# Gyaneshwar Katiyar & Anr v. State of U.P. & Anr

- **Citation:** (2024) 4 ILRA 596
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-04-15
- **Case number:** Application U/S 482. No. 3438 of 2024
- **Bench:** Shamim Ahmed
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/gyaneshwar-katiyar-anr-v-state-of-u-p-anr-51841
- **Pages:** 7

## Headnote

(A) Criminal Law - The Code of Criminal
Procedure, 1973 - Section 482 - Inherent
power - The Negotiable instruments Act,
1981- Sections 138 & 141 - Negotiable
Instruments - Cheque Dishonour - Legal
position for quashing of proceedings at
the initial stage - test to be applied by
court
-
whether
uncontroverted
allegations as made prima facie establish
the offence - and whether the chances of
ultimate conviction are bleak - such that
no useful purpose is likely to be served by
allowing the criminal proceedings to
continue - Quashing of the criminal
proceedings is an exception than a rule -
Power of High Court is very wide but
should be exercised very cautiously to do
real and substantial justice for which the
court alone exists.(Para - 17,18)

Applicants, members of an Association of
Persons (AOP) - were summoned in complaint
under Sections 138 and 141 of NI Act - for
dishonour of cheques amounting to ₹60,00,000
- allegation - cheques were issued towards
repayment of investments made by him in the
AOP - contention - cheques were stolen and
misused by complainant after they sent a legal
notice demanding repayment of borrowed funds
- applicants neither denied their signatures on
the cheques nor lodged any complaint regarding
the alleged theft. (Paras 2, 4, 5)

HELD: - Court would not embark into an
inquiry, as this is Trial Court's function. Since a
prima facie offence is disclosed, quashing the
complaint, summoning order, and proceedings
is unwarranted. Applicants can raise objections
at the appropriate stage. Prayer for quashing is
denied. (Para - 19,20)

Application u/s 482 Cr.P.C. rejected. (E-7)

List of Cases cited:

## Text

596 INDIAN LAW REPORTS ALLAHABAD SERIES
impugned
summoning
order
dated
22.09.2023 passed by Additional Chief
Judicial Magistrate/F.T.C. Court No.38,
Barabanki in Criminal Case No.3149/2023
(State vs. Sushri Sherya Verma and others),
arising out of Case Crime No.0045/2022,
under Sections 171 H and 188 of I.P.C.,
Police
Station
Mohammadpur
Khala,
District-Barabanki as well as the entire
criminal proceedings in pursuance thereof are
hereby quashed.

39. For the reasons discussed above, the
instant application under Section 482 Cr.P.C.
is allowed in respect of the instant applicants.

40. Learned Senior Registrar of this
Court is directed to transmit a copy of this
order to the trial court concerned for its
necessary compliance.
----------
(2024) 4 ILRA 596
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 15.04.2024

BEFORE

THE HON'BLE SHAMIM AHMED, J.

Application U/S 482. No. 3438 of 2024

Gyaneshwar Katiyar & Anr. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicants:
Sri Amit Kumar Singh

Counsel for the Opposite Parties:
G.A.

(A) Criminal Law - The Code of Criminal
Procedure, 1973 - Section 482 - Inherent
power - The Negotiable instruments Act,
1981- Sections 138 & 141 - Negotiable
Instruments - Cheque Dishonour - Legal
position for quashing of proceedings at
the initial stage - test to be applied by
court
-
whether
uncontroverted
allegations as made prima facie establish
the offence - and whether the chances of
ultimate conviction are bleak - such that
no useful purpose is likely to be served by
allowing the criminal proceedings to
continue - Quashing of the criminal
proceedings is an exception than a rule -
Power of High Court is very wide but
should be exercised very cautiously to do
real and substantial justice for which the
court alone exists.(Para - 17,18)

Applicants, members of an Association of
Persons (AOP) - were summoned in complaint
under Sections 138 and 141 of NI Act - for
dishonour of cheques amounting to ₹60,00,000
- allegation - cheques were issued towards
repayment of investments made by him in the
AOP - contention - cheques were stolen and
misused by complainant after they sent a legal
notice demanding repayment of borrowed funds
- applicants neither denied their signatures on
the cheques nor lodged any complaint regarding
the alleged theft. (Paras 2, 4, 5)

HELD: - Court would not embark into an
inquiry, as this is Trial Court's function. Since a
prima facie offence is disclosed, quashing the
complaint, summoning order, and proceedings
is unwarranted. Applicants can raise objections
at the appropriate stage. Prayer for quashing is
denied. (Para - 19,20)

Application u/s 482 Cr.P.C. rejected. (E-7)

List of Cases cited:

1. Mohd. Allauddin Khan Vs St. of Bihar & ors.,
(2019) 6 SCC 107

2. R.P. Kapoor Vs St. of Punj., AIR 1960 S.C.
866

3. St. of Haryana Vs Bhajanlal, 1992 SCC
(Crl.)426

4. St. of Bihar Vs P.P. Sharma, 1992 SCC
(Crl.)192

5. Zandu Pharmaceutical Works Ltd. Vs Mohd.
Saraful Haq & anr., 2005 SCC (Cri.)283
4 All. Gyaneshwar Katiyar & Anr. Vs. State of U.P. & Anr.
597
6. Neeharika Infrastructure Pvt. Ltd. Vs St. of
Maha., AIR 2021 SC 1918

7. S.W. Palankattkar & ors. Vs St. of Bihar, 2002
(44) ACC 168

(Delivered by Hon'ble Shamim Ahmed, J.)

1. Vakalatnama filed today in the
Court by Shri Lalit Kishore Pandey,
Advocate on behalf of opposite party No.2
is taken on record.

2. Heard Shri Amit Kumar Singh,
learned Counsel for the applicants, Shri
Lalit Kishore Pandey, learned Counsel for
the opposite party No.2, Shri S.P. Tiwari,
learned A.G.A. for the State-opposite party
No.1 and perused the material placed on
record.

3. The present application under
Section 482 Cr.P.C. has been filed on
behalf
of
the
applicants
seeking
quashing/setting aside of the summoning
order dated 12.10.2023 passed by learned
Presiding Officer, Additional Court No.5,
Lucknow
in
Complaint
Case
No.87472/2023
vide
filing
No.105314/2023 instituted against the
applicants under Section 138 and 141 of
Negotiable Instruments Act, 1881 as well
as entire proceedings of the aforesaid case
so far it relates to the present applicants. A
further prayer has been made by the
applicants to call for the records of
Complaint Case No.87472/2023 vide filing
No.105314/2023 under Sections 138 and
141 of Negotiable Instruments Act, 1881.

4. Learned Counsel for the applicants
submits that the applicants are innocent
persons and have been falsely implicated in
the present case due to enmity. He further
submits that the applicants are into the
business of trading of Indian-made foreign
liquor and beer in the State of Uttar
Pradesh and to effectively manage the
business and operations they had formed an
Association of Persons (hereinafter referred
as "AOP") in the name and style of BKS
Associates and the applicants are the
Member of the AOP. He further submits
that the opposite party No.2's mother,
namely-Poonam Jaiswal was the licensee of
a retail shop of country liquor situated at
Mohamadpur,
Sariya,
Bankey
Nagar
Chauraha(A), District-Lucknow since the
opposite party No.2 and his mother did not
have any prior experience of operation of
retail shop of country liquor, they joined
AOP
formed
by
the
applicants
on
17.07.2020 in which opposite party No.2
was given share of 5% only. He further
submits that after joining the AOP, the
opposite party No.2 borrowed/withdrew
various sums from the AOP from time to
time with a promise that he would return
the same very soon but when the amounts
were not returned the applicants issued a
legal notice dated 03.07.2023 to opposite
party No.2 demanding therein the return of
capital withdrawn/borrowed by him from
the AOP. Thereafter, the opposite party
No.2 on 05.07.2023 issued a legal notice to
the applicants demanding an amount of
Rs.25,00,000/- (Rupees Twenty Five Lakh
Only) in lieu of two cheques obtained by
him bearing No.1364 dated 29.05.2023 of
Rs.25,00,000/- (Rupees Twenty Five Lakh
Only)
and
bearing
No.1365
dated
19.06.2023 of Rs.35,00,000/-, Bank-ICICI
Bank,
Branch-Vikas
Nagar,
Lucknow
alleging therein that the said cheques were
given by the applicants to the opposite
party No.2 for capital inducted by opposite
party No.2 and profit accrued thereof.

5. Learned Counsel for the applicant
further submits that since the applicants
were demanding the amount, which was
598 INDIAN LAW REPORTS ALLAHABAD SERIES
borrowed by the opposite party No.2 from
the AOP through legal notice dated
03.07.2023, therefore, the opposite party
No.2, who was also the In-charge of day to
day activities of AOP, stole the said two
cheques as he had the access of signed
cheques and other security documents of
AOP and misused them by putting them in
the bank for encashment in order to
implicate the present applicants in false
complaint case under the provisions of
Negotiable Instruments Act, 1881.

6. The overall contention of the
learned counsel for the applicants is that no
offence against the applicants is disclosed
and the present prosecution has been
instituted with a malafide intention for the
purposes of harassment, thus, he submits
that the present case is nothing but an abuse
of process of law, therefore, the present
application may be allowed and the
proceedings of the present case may be
quashed.

7. Per contra, learned Counsel for the
opposite party No.2 vehemently opposes
the contentions made by learned Counsel
for the applicants and submits that the
opposite party No.2 was running his
business in the name of his mother and the
business was giving him profits but the
applicants persuaded the opposite party
No.2 to join their AOP only with the
intention
to
commit
forgery
and
misappropriation of funds. The opposite
party No.2 in order to gain profits by
joining the AOP of which the applicants are
founder Members, started putting more and
more money with the hope and trust given
by the existing members of the AOP and
made
an
investment
of
about
Rs.50,00,000/- (Rupees Fifty Lakh Only)
and they also promised after all these
investments, the business will flourish all
over the State of U.P. and then we will
calculate all the profits gained together and
will split it as per the share of each of the
members but when the same did not
happen, then the opposite party No.2 asked
the applicants to return his money, which
was earlier denied and later on, the
applicants issued two cheques bearing
No.1364
dated
29.05.2023
of
Rs.25,00,000/- (Rupees Twenty Five Lakh
Only)
and
bearing
No.1365
dated
19.06.2023 of Rs.35,00,000/-, Bank-ICICI
Bank, Branch-Vikas Nagar, Lucknow in
the name of opposite party No.2 but when
the
cheque
bearing
No.1364
dated
29.05.2023 amounting to Rs.25,00,000/-
(Rupees Twenty Five Lacs Only) was
presented before the Bank of Baroda,
Branch Aliganj, Lucknow for withdrawal
of the said amount, the same was
dishonored with remark 'Funds Insufficient'
on 26.06.2023.

8. Learned Counsel for the opposite
party No.2 further submits that thereafter,
the opposite party No.2 issued legal notice
to the applicants on 05.07.2023 stating
therein all the facts and circumstances of
the case. He further submits that in reply to
the legal notice dated 05.07.2023, the
applicants on 15.07.2023 sent a reply of the
aforesaid notice to the opposite party No.2,
wherein they have not denied the signatures
which were done on the two cheques. He
further submits that in their reply to the
legal notice, they did not mention anything
about them making any complaint to any
authority regarding the lost two cheques,
which itself weaken their case, thus, he
submits that the impugned summoning
order dated 12.10.2023 has been rightly
passed by the learned trial court in
accordance with law, therefore, the same is
not liable to be quashed and the instant
application is liable to be rejected.
4 All. Gyaneshwar Katiyar & Anr. Vs. State of U.P. & Anr.
599

9. Learned A.G.A. for the Stateopposite party No.1 contends that from the
allegations made in the complaint filed by
the opposite party No.2, prima facie
offence is made out against the applicants.
The innocence of the applicants cannot be
adjudged at the pre trial stage. Therefore,
the
applicants
do
not
deserve
any
indulgence.

10. After hearing learned Counsel for
the parties and after perusal of records, this
Court finds that towards the discharge of
above mentioned financial liabilities, the
accused-applicants provided the opposite
party No.2 with two post dated cheques
worth Rs.60,00,000/- (Rupees Sixty Lakhs
Only) of different values payable on
different dates. Out of those two cheques,
one
cheque
bearing
No.1364
dated
29.05.2023 of Rs.25,00,000/- (Rupees
Twenty Five Lakh Only) was deposited by
the opposite party No.2 with its banker for
encashment but the said cheque was unpaid
with the remark 'funds insufficient'. The
opposite
party
No.2
informed
the
applicants regarding the dishonour of the
cheque and asked them to pay the amount.
However, the applicants did not pay any
heed to the request of the opposite party
No.2. Thereafter, a legal notice was sent
and despite that applicants failed to make
payment against the said cheques. It is
further alleged in the complaint that the
applicants were at the time of commission
of the offence were Founder Members of
the BKS Associates and were solely
responsible for the conduct of the business
of the AOP, therefore, the applicants are
liable for offence committed under Section
138 and 141 of the Negotiable Instruments
Act, 1881, thus, the opposite party No.2 has
initiated
the
proceedings
against
the
applicants under the provisions of the
Negotiable Instruments Act, 1881.

11. It would relevant here to go
through Sections 138 and 141 of the
Negotiable Instruments Act, 1881. Section
138 and 141 of the Negotiable Instruments
Act, 1881 would read as under:-

"Section 138 in The Negotiable
Instruments Act, 1881

138. Dishonour of cheque for
insufficiency, etc., of funds in the account.?

Where any cheque drawn by a
person on an account maintained by him
with a banker for payment of any amount of
money to another person from out of that
account for the discharge, in whole or in
part, of any debt or other liability, is
returned by the bank unpaid, either
because of the amount of money standing to
the credit of that account is insufficient to
honour the cheque or that it exceeds the
amount arranged to be paid from that
account by an agreement made with that
bank, such person shall be deemed to have
committed an offence and shall, without
prejudice to any other provisions of this
Act, be punished with imprisonment for a
term which may be extended to two years,
or with fine which may extend to twice the
amount of the cheque, or with both:

Provided that nothing contained
in this section shall apply unless?

(a) the cheque has been presented
to the bank within a period of six months
from the date on which it is drawn or
within the period of its validity, whichever
is earlier;

(b) the payee or the holder in due
course of the cheque, as the case may be,
makes a demand for the payment of the
said amount of money by giving a notice in
600 INDIAN LAW REPORTS ALLAHABAD SERIES
writing, to the drawer of the cheque,
[within thirty days of the receipt of
information by him from the bank regarding
the return of the cheque as unpaid; and

(c) the drawer of such cheque fails
to make the payment of the said amount of
money to the payee or, as the case may be, to
the holder in due course of the cheque, within
fifteen days of the receipt of the said notice.

Section 141 in The Negotiable
Instruments Act, 1881

141. Offences by companies. ?

(1) If the person committing an
offence under section 138 is a company,
every person who, at the time the offence was
committed, was in charge of, and was
responsible to the company for the conduct of
the business of the company, as well as the
company, shall be deemed to be guilty of the
offence and shall be liable to be proceeded
against and punished accordingly:

Provided that nothing contained in
this sub-section shall render any person liable
to punishment if he proves that the offence was
committed without his knowledge, or that he
had exercised all due diligence to prevent the
commission of such offence:

Provided further that where a
person is nominated as a Director of a
company by virtue of his holding any office
or employment in the Central Government or
State Government or a financial corporation
owned
or
controlled
by
the
Central
Government or the State Government, as the
case may be, he shall not be liable for
prosecution under this Chapter.

(2)
Notwithstanding
anything
contained in sub-section (1), where any
offence under this Act has been committed
by a company and it is proved that the
offence has been committed with the
consent or connivance of, or is attributable
to, any neglect on the part of, any director,
manager, secretary or other officer of the
company,
such
director,
manager,
secretary or other officer shall also be
deemed to be guilty of that offence and
shall be liable to be proceeded against and
punished accordingly."

11. It is further observed here that
according to the reply sent by the
applicants, execution of the cheques in
question has nowhere been disputed and as
per the reply of the applicants, the cheques
in
question
were
stolen
from
their
possession but in this regard they did not
file any complaint with the authorities
concerned. This question as to whether the
cheques in question were only stolen or
not, is a matter of evidence to be decided
later on during the course of the trial.
Moreover, the applicants have no where
taken up this plea in their reply that the
they
were
neither
In-charge
of
or
responsible to the AOP for the conduct of
business of the AOP.

12. It is further observed here that in
their reply of the legal notice, the
applicants did not dispute the signatures
made on the aforesaid two cheques, thus, it
can be transpired that the cheques in
question were duly signed and issued by
the applicants against their liabilities
towards the opposite party No.2.

13. Further in the case in hand,
reading the complaint as a whole, it is clear
that the allegations in the complaint are that
the cheques which were dishonoured were
issued by the Founder Members of the
AOP i.e. the applicants and the applicants
4 All. Gyaneshwar Katiyar & Anr. Vs. State of U.P. & Anr.
601
were In-charge of the affairs of the AOP. It
is not proper to split hairs in reading the
complaint so as to come to a conclusion
that the allegation as a whole is not
sufficient to show that at the relevant
point of time the applicants are not
alleged to be persons In-charge of the
affairs of the AOP. Obviously, the
complaint refers to the point of time,
when the two cheques were issued, their
presentation, dishonour and failure to pay
in spite of notice of dishonour. Reading
the complaint as a whole, this Court is
satisfied that it is a case where the
contentions raised by the applicants can
only be dealt after the conclusion of the
trial.

14. Further, the Hon'ble Supreme
Court in the case of Mohd. Allauddin
Khan vs. State of Bihar and Others
reported in (2019) 6 SCC 107 has been
pleased to observe paragraph Nos.9 and
12, which are reproduced hereinunder:-

"9. First error is that the High
Court did not examine the case with a
view to find out as to whether the
allegations made in the complaint prima
facie make out the offences falling under
Sections 323 and 379 read with Section
34 IPC or not. Instead the High Court in
para 6 gave importance to the fact that
since there was a dispute pending
between the parties in the civil court in
relation to a shop as being landlord and
tenant, it is essentially a civil dispute
between the parties. It is on this ground,
the High Court proceeded to quash the
complaint. This approach of the High
Court, in our view, is faulty.

12 The High Court should have
seen that when a specific grievance of the
appellant in his complaint was that
Respondents 2 and 3 have committed the
offences punishable under Sections 323 and
379 read with Section 34 IPC, then the
question to be examined is as to whether
there are allegations of commission of
these two offences in the complaint or not.
In other words, in order to see whether any
prima facie case against the accused for
taking its cognizance is made out or not,
the Court is only required to see the
allegations made in the complaint. In the
absence of any finding recorded by the
High Court on this material question, the
impugned order [Prem Prakash Gupta v.
State of Bihar, 2017 SCC OnLine Pat
3618] is legally unsustainable."

15. Thus, from the perusal of the
materials on record and looking into the
facts of the case and after considering the
arguments made at the bar and the
judgment referred above, it does not appear
that no offence has been made out against
the applicant.

16. At the stage of issuing process the
trial court is not expected to examine and
assess in detail the material placed on
record, only this has to be seen whether
prima facie cognizable offence is disclosed
or not. The Apex Court has also laid down
the
guidelines
where
the
criminal
proceedings
could
be
interfered
and
quashed in exercise of its power by the
High Court in the following cases:-(i) R.P.
Kapoor Vs. State of Punjab, AIR 1960
S.C. 866, (ii) State of Haryana Vs.
Bhajanlal, 1992 SCC (Crl.)426, (iii) State
of Bihar Vs. P.P. Sharma, 1992 SCC
(Crl.)192 and (iv) Zandu Pharmaceutical
Works Ltd. Vs. Mohd. Saraful Haq and
another, (Para-10) 2005 SCC (Cri.)283
and (v) Neeharika Infrastructure Pvt. Ltd.
Vs. State of Maharashtra, AIR 2021 SC
1918.
602 INDIAN LAW REPORTS ALLAHABAD SERIES

17. From the aforesaid decisions the
Apex Court has settled the legal position
for quashing of the proceedings at the
initial stage. The test to be applied by the
court
is
to
whether
uncontroverted
allegation as made prima facie establishes
the offence and the chances of ultimate
conviction is bleak and no useful purpose
is likely to be served by allowing
criminal proceedings to be continue.

18. In S.W. Palankattkar & others
Vs. State of Bihar, 2002 (44) ACC 168, it
has been held by the Hon'ble Apex Court
that quashing of the criminal proceedings
is an exception than a rule. The inherent
powers of the High Court under Section
482
Cr.P.C
itself
envisages
three
circumstances under which the inherent
jurisdiction may be exercised:-(i) to give
effect an order under the Code, (ii) to
prevent abuse of the process of the court ;
(iii) to otherwise secure the ends of
justice. The power of High Court is very
wide but should be exercised very
cautiously to do real and substantial
justice for which the court alone exists.

19. The High Court would not
embark upon an inquiry as it is the
function of the Trial Judge/Court. The
interference at the threshold of quashing
of the complaint case, summoning order
and the criminal proceedings in case in
hand cannot be said to be exceptional as
it discloses prima facie commission of an
offence. In the result, the prayer made for
quashing is refused. The applicant has
ample opportunity to raise all the
objections at the appropriate stage.

20. In view thereof, the present
application lacks merit and substance and is
hereby rejected.
----------
(2024) 4 ILRA 602
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 23.04.2024

BEFORE

THE HON'BLE SHAMIM AHMED, J.

Application U/S 482. No. 3694 of 2024

Rajnu ...Applicant
Versus
State of U.P. & Ors. ...Opposite Parties

Counsel for the Applicant:
Sri Sushil Kumar Singh

Counsel for the Opposite Parties:
G.A.

Criminal
Law
-
Code
of
Criminal
Procedure, 1973 - Section 482 - Indian
Penal Code, 1860 - Sections 363, 366, 504
& 376 - Protection of Children from
Sexual Offences Act, 2012 - Sections 3/4
- Application for Quashing Proceedings -
Compromise
in
POCSO
Case
-
NonCompoundable Offences
The applicant, Rajnu, filed an application under
Section 482 Cr.P.C. to quash proceedings in
Criminal Case No. 1177 of 2022 arising out of
Case Crime No. 236/2021 under Sections 363,
366, 504, 376 IPC and Sections 3/4 POCSO Act,
Police Station Mall, District Lucknow, based on a
compromise between the parties. The applicant,
previously denied quashing of the charge sheet
and summoning order by a Coordinate Bench on
14.12.2022, claimed false implication due to
village rivalry. The St. opposed, citing the
Supreme Court's ruling in Parbatbhai Aahir Vs
St. of Gujarat ((2017) 9 SCC 641), which
prohibits quashing serious offenses like those
under the POCSO Act on the basis of
compromise. Held: The court rejected the
application, finding that the allegations prima
facie disclosed a cognizable offense and that
quashing
based
on
compromise
was
impermissible under Parbatbhai Aahir. The court
reiterated that inherent powers under Section
482 Cr.P.C. are to be exercised cautiously to
prevent abuse of process or secure justice, and