# Harshit Vij & Anr v. State of U.P. & Anr

- **Citation:** (2020) 6 ILRA 134
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-02-25
- **Case number:** Application U/S 482 No. 7263 of 2020
- **Bench:** Mrs. Manju Rani Chauhan
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/harshit-vij-anr-v-state-of-u-p-anr-45773
- **Pages:** 21

## Headnote

Civil Law - Negotiable instruments Act,
1881 - Section 139 - Presumption in favour of
holder - once the issuance of cheque is
admitted/established, the presumption would
arise under Section 139 of the N.I. Act in favour
of the holder of cheque that is the complainant -
presumptions u/s 139 of the N.I. Act is
rebuttable. - burden lies upon the accused to
rebut the presumption by adducing evidence -
until the accused discharges his burden, the
presumption under Section 139 of N.I. Act will
continue to remain - When disputed questions
of facts are involved which need to be
adjudicated after the parties adduce evidence,
the complaint under Section 138 of the N.I. Act
could not be quashed by the High Court u/s 482
Cr.P.C. (Para 26)

Criminal Law - Criminal Procedure Code (2
of 1974) - Section 245 - Discharge & Framing
of Charge - at the stage of framing of charge
the court is required to evaluate the material
and documents on record with a view to finding
out if the facts emerging therefrom, taken at
their face value, disclosed the existence of all
the ingredients constituting the alleged offence -
At that stage, the court is not expected to go
deep into the probative value of the material on
6 All. Harshit Vij & Anr. Vs. State of U.P. & Anr.
135
record -defence of the accused is not to be
looked into at the stage when the accused seeks
to
be
discharged
-
Veracity
of
deposition/material is a matter of trial and not
required to be examined while framing charge-
Appreciation of evidence on merit is to be done
by the court only after the charges have been
framed and the trial has commenced. (Para 25)

Application disimissed (E-5)

List of case cited :

1.PoojaRavinderDevidasani Vs St. of Mah & anr.
(2014) 16 SCC

2.RajeshbhaiMuljibhai Patel & ors. etc. Vs St. of
Guj & anr. (2020) 0 Supreme SC 137

3.M.E. Shivalingamurthy Vs CBI, Bengaluru
(2020) 1 Supreme 169/2020 0 Supreme (SC) 12

4.R.P. Kapur Vs St. of Punj. AIR (1960) SC 866

5.St. of Haryana & ors. Vs Ch. Bhajan Lal & ors.
(1992) Supp. (1) SCC 335

6.St. of Bihar & anr. Vs P.P. Sharma & anr
(1992) Supp 1 SCC 222

7.Zandu Pharmaceuticals Works Ltd. & ors. Vs
Mohammad SharifulHaque & anr. (2005) 1 SCC
122

8.M. N. Ojha Vs. Alok Kumar Srivastava (2009)
9 SCC 682

9.Nallapareddy Sridhar Reddy Vs St. of AP & ors
(2020) 0 Supreme (SC) 45

10.St. of Bihar Vs Ramesh Singh (1977) 4 SCC
39

11.Suptd. & Remembrancer of Legal Affairs, WB
Vs Anil Kumar Bhunja AIR (1980) SC 52

12.Palwinder Singh Vs Balvinder Singh reported
in AIR (2009) SC 887

## Text

_Characters 0–39,858 of 72,763. This is a partial read: ask again with offset=39858 for what follows._

134 INDIAN LAW REPORTS ALLAHABAD SERIES
socially or economically weaker strata of
the society, quashing in such a case would
only
encourage
commission
of
such
offences, as the accused, using his money
power or otherwise, may be able to induce
the prosecutrix/victim to enter in to
settlement with him and then seek quashing
of criminal proceedings, on the strength of
that settlement.

15. This Court does not find that this
case fall in categories as recognized by the
Apex Court for quashing the criminal
proceedings of the trial court at pre-trial
stage. Considering the facts, circumstances
and nature of allegations against the
applicants in this case, the cognizable
offence is made out. At this stage, it would
not be appropriate to adjudge whether the
case shall ultimately end in conviction or
not. Only prima facie satisfaction of the
Court about the existence of sufficient
ground to proceed in the matter is required.
The impugned criminal proceedings under
the facts of this case cannot be said to be
abuse of the process of the Court. There is
no good ground to invoke inherent power
under Section 482 Cr.P.C. by this Court.

16. The relief as sought by the
applicants through the instant application is
hereby refused.

17. This application under Section
482 Cr.P.C. lacks merit and is, accordingly,
dismissed.

18. Office is directed to communicate
this order to the concerned court below as
well as victim/opposite party no.2 of this
case within two weeks.
----------
(2020)06ILR A134
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 25.02.2020

BEFORE
THE HON'BLE MRS. MANJU RANI
CHAUHAN, J.

Application U/S 482 No. 7263 of 2020
With
Application U/S 482 No. 7264 of 2020
With
Application U/S 482 No. 7266 of 2020

Harshit Vij & Anr. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicants:
Sri Ravi Jha, Sri Anil Kumar Srivastava, Sri
Ram Bahadur

Counsel for the Opposite Parties:
A.G.A.

Civil Law - Negotiable instruments Act,
1881 - Section 139 - Presumption in favour of
holder - once the issuance of cheque is
admitted/established, the presumption would
arise under Section 139 of the N.I. Act in favour
of the holder of cheque that is the complainant -
presumptions u/s 139 of the N.I. Act is
rebuttable. - burden lies upon the accused to
rebut the presumption by adducing evidence -
until the accused discharges his burden, the
presumption under Section 139 of N.I. Act will
continue to remain - When disputed questions
of facts are involved which need to be
adjudicated after the parties adduce evidence,
the complaint under Section 138 of the N.I. Act
could not be quashed by the High Court u/s 482
Cr.P.C. (Para 26)

Criminal Law - Criminal Procedure Code (2
of 1974) - Section 245 - Discharge & Framing
of Charge - at the stage of framing of charge
the court is required to evaluate the material
and documents on record with a view to finding
out if the facts emerging therefrom, taken at
their face value, disclosed the existence of all
the ingredients constituting the alleged offence -
At that stage, the court is not expected to go
deep into the probative value of the material on
6 All. Harshit Vij & Anr. Vs. State of U.P. & Anr.
135
record -defence of the accused is not to be
looked into at the stage when the accused seeks
to
be
discharged
-
Veracity
of
deposition/material is a matter of trial and not
required to be examined while framing charge-
Appreciation of evidence on merit is to be done
by the court only after the charges have been
framed and the trial has commenced. (Para 25)

Application disimissed (E-5)

List of case cited :

1.PoojaRavinderDevidasani Vs St. of Mah & anr.
(2014) 16 SCC

2.RajeshbhaiMuljibhai Patel & ors. etc. Vs St. of
Guj & anr. (2020) 0 Supreme SC 137

3.M.E. Shivalingamurthy Vs CBI, Bengaluru
(2020) 1 Supreme 169/2020 0 Supreme (SC) 12

4.R.P. Kapur Vs St. of Punj. AIR (1960) SC 866

5.St. of Haryana & ors. Vs Ch. Bhajan Lal & ors.
(1992) Supp. (1) SCC 335

6.St. of Bihar & anr. Vs P.P. Sharma & anr
(1992) Supp 1 SCC 222

7.Zandu Pharmaceuticals Works Ltd. & ors. Vs
Mohammad SharifulHaque & anr. (2005) 1 SCC
122

8.M. N. Ojha Vs. Alok Kumar Srivastava (2009)
9 SCC 682

9.Nallapareddy Sridhar Reddy Vs St. of AP & ors
(2020) 0 Supreme (SC) 45

10.St. of Bihar Vs Ramesh Singh (1977) 4 SCC
39

11.Suptd. & Remembrancer of Legal Affairs, WB
Vs Anil Kumar Bhunja AIR (1980) SC 52

12.Palwinder Singh Vs Balvinder Singh reported
in AIR (2009) SC 887

(Delivered by Hon'ble Mrs. Manju Rani
Chauhan, J.)

1. This application under Section 482
Cr.P.C. has been filed to quash the entire
proceedings of the Complaint Case No. 21
of 2017 (Naeem Ahmed Ansari Vs. Purna
Agencies Pvt. Ltd. & Others), under
Sections
138/141
of
the
Negotiable
Instrument Act, 1881 as well as the order
dated 18th December, 2019 passed by the
Additional
Judge,
Saharanpur
on
applications filed by the applicants being
paper nos. 12-B and 13-B under Sections
251 read with Section 245 Cr.P.C. for
seeking
discharge
in
the
aforesaid
complaint case, whereby the concerned
Magistrate
has
rejected
both
the
applications.

2. Heard Mr. Anil Kumar Srivastava,
learned Senior Advocate assisted by Mr.
Ravi Jha and Ram Bahadur, learned
counsel for the applicants and Mr. Amit
Singh Chauhan and Mr. Pankaj Srivastava,
learned Additional Government Advocates.

3. Perused the material available on
record.

4. All these three applications under
Section
482
Cr.P.C.
raise
common
questions of law, issue and facts, therefore,
clubbed together and are being decided by
means of this common order. Application
U/s 482 Cr.P.C. No. 7263 of 2020 is being
treated to be the leading case.

5. Brief facts, as are borne out from
the records of the present application, are
as follows:

Opposite party no.2, namely,
Naeem Ahmad
has
made
complaint
Sections
138/141
of
the
Negotiable
Instrument Act, 1881 (hereinafter referred
to as the "N.I. Act") before the Additional
136 INDIAN LAW REPORTS ALLAHABAD SERIES
Judge/Fast Track Court, Saharanpur on
11th January, 2017 against the company,
namely, M/s Purna Agencies Private Ltd.,
IX/Raghubarpura No.2, Gandhi Nagar,
Delhi East, Delhi through Authorized
Signatory, namely, Kanika Aggi as well as
four named accused persons, namely,
Kanika Aggi, Kanwal Kumar, Ashok
Chaudhary, Harshit Viz (all are alleged to
be directors of the said company). In the
said complaint it has been stated that
Kanika Aggi is the director and authorized
signatory and she is responsible for all the
work and transactions done against the said
company. Regarding payment of money of
the opposite party no.2, which was due
against the company, a cheque bearing no.
099242 dated 19th October, 2016 for a sum
of Rs. 50,00,000/- (Rupees fifty lacs only)
drawn on bank account of Purna Agencies
Pvt. Ltd. with State Bank of Bikaner and
Jaipur, G.T. Road, Ludhiana Branch,
bearing the signature of Ms. Kanika Aggi
on behalf of the all the directors of the
company was handed over to opposite
party no.2 towards payments of certain
monies with an assurance that the same
would
be
honoured
immediately
on
presentation. On the assurance given by all
the directors including Kanika Aggi, on
20th October, 2016 when the said cheque
was presented by opposite party no.2 with
his bank bearing Jammu and Kashmir
Bank, Branch Parshwnath Plaza Court
Road,
Saharanpur,
the
same
was
dishonoured and was returned with the
Wollongong endorsement on the memo of
return:
"payment
stopped
by
the
drawer". It has further been stated that
when opposite party no.2 conveyed the
above to the accused, he was orally
informed that the said cheque be presented
again in the first week of December, 2016
with an assurance that the cheque would be
cleared.

On 5th December, 2016 opposite
party no.2, on the basis of such assurance,
presented the said cheque again with his
bank, being Jammu and Kashmir Bank,
Branch Parshwnath Plaza Court Road,
Saaharanpur. However, once again, the
same was dishonoured and was returned
with the following endorsement on the
memo of return dated 5th December,
2016:"payment stopped by drawer".

On 15th December, 2016, a
statutory legal notice under Section 138
N.I. Act was issued by opposite party no.2
through his advocate to the applicants, the
said company, Kanika Aggi and Kanwar
Kumar inter alia seeking payment of Rs.
50,00,000/- (Rupess fifty lacs only) due to
opposite party no.2 within a period of 15
days of receipt of notice. However, the
aforesaid amount has not been paid to
opposite party no.2.

In view of above, opposite party
no.2 filed the present complaint seeking
that proceedings under Section 138 N.I. Act
and Section 420 I.P.C. be initiated against
the
accused
persons
including
the
applicant. Along with the complaint,
opposite party no.2 has also an affidavit
dated 11th January, 2017 in lieu of
statement under Section 200 Cr.P.C., bank
return
memos
and
cheque.
On
the
complaint being filed, the concerned
Magistrate has taken cognizance vide order
dated 14th July, 2017 and thereafter passed
an order dated 14th July, 2017 summoning
the all accused persons including the
applicants. Both the applicants have been
granted bail by the court below vide orders
dated
24th
August,
2017
and
7th
September, 2017 respectively.

On
7th
September,
2017,
applicants filed separate applicantion being
application no. 12-B by applicant no.1 and
application no.13-B by applicant no.2,
under Section 251 read with Section 245
6 All. Harshit Vij & Anr. Vs. State of U.P. & Anr.
137
Cr.P.C. seeking discharge in the said
complaint case. On 18th December, 2019,
both the applications have been dismissed
by the concerned Magistrate. It is against
this order, summoning order and entire
proceedings of the aforesaid complaint case
that the present application has been filed.

6. Mr. Srivastava, learned Senior
Advocate appearing for the applicants
submits that except a mere bald cursory
statement that the applicants are directors
and authorized signatories of the said
company, no specific averment has been
made as to their role in the day-to-day
affairs of the company. As aforesaid, while
the applicant no.1 ceased to be a director of
the said company on 1st April, 2016,
applicant no.2 resigned as the director
thereof on 5th October, 2016. As such the
applicants were neither directors of the said
company nor engaged in day-to-day affairs
thereof as on the date of the commission of
the alleged offence or on the date of
issuance of cheque in question. The
applicants cannot in any manner be held
liable for the alleged offence. Thus, the
entire proceedings against the applicants
are based on erroneous facts.

7. Learned counsel appearing for the
applicants further submits that the present
complaint has been filed by suppressing the
crucial facts in respect of the applicants' position
in the said company, disclosure of which would
have revealed that the said complaint cannot
under any circumstances lie against the
applicants. Opposite party no.2 thus approached
the court with clean hands and on this ground
the entire proceedings of the present complaint
is liable to be quashed. Despite the above, the
applicants have been erroneously and in a
mechanical manner arrayed as accused nos. 4
and 5 in the present complaint, the same is
nothing but an attempt to harass the applicants
and extort money from them.

8. It is further submitted that the
amount of Rs. 50,00,000/- alleged to be
payable to opposite party no.2 is not
supported by any purchase order, invoice or
any documentation whatsoever. Thus, the
entire case of opposite party no.2 is based
on a mere avement that the cheque was
issued by the said company to opposite
party no.2 towards payments of certain
monies. Thus, even prima facie the said
complaint has failed to disclose the
existence of any legally enforceable debt.

9. It is further submitted that the
concerned Magistrate erred in holding that
the cognizance of the complaint has already
been taken, therefore, the applications filed
by the applicants seeking discharge would
not
be
maintainable.
The
judgments
referred to in the impugned order by the
concerned Magistrate i.e. Adalat Prasad Vs.
Roop Lal Jindal; (2004) SCC (Cri) 1927
and Iris Computers Ltd. Vs. Askari
Infortech Pvt. Ltd.; (2016) 2 SCC (Cri)
389, are not applicable to the case of the
applicants.

10. It is lastly submitted that while
passing the impugned order, the concerned
Magistrate failed to consider, much less
distinguish, the decisions of the Apex Court
cited by the applicants. On the cumulative
strength of the aforesaid, learned counsel
for the applicants urges that the said
complaint is mala fide and is liable to be
quashed and asking the applicants to stand
the trial in the present case would be abuse
of the process of the court.

11. In support of his case, Mr.
Srivastava,
learned
Senior
Counsel
appearing for the applicants has referred to
paragraph nos. 17, 18, 23, 24, 25A, 27 and
28 of the judgment of the Apex Court in the
case of Pooja Ravinder Devidasani Vs.
138 INDIAN LAW REPORTS ALLAHABAD SERIES
State of Maharashtra & Another reported
in (2014) 16 SCC.

12. Per contra, Mr. Amit Singh
Chauhan and Mr. Pankaj Srivastava,
learned Additional Government Advocates
for the State have vehementally opposed
the prayer made by the learned counsel for
the applicants by contending that the
submissions made by the learned counsel
for the applicants relate to disputes
questions of fact and legality, veracity or
otherwise of the same cannot be examined
at summoning or pre-trial stage. In support
of their submissions, they have referred
paragraph no.20 of the judgment of the
Apex Court in the case of Rajeshbhai
Muljibhai Patel & Others Etc. Vs. State
of Gujarat & Another Etc. reported in
2020 0 Supreme (SC) 137.

13. On the issue of rejection of discharge
applications filed by the applicants, learned
A.G.As. submits that the concerned Magistrate
after considering all the documents available on
record and after relying upon the various
judgments of the Apex Court has rightly
rejected the applications of the applicants for
seeking discharge. There is no illegality or
infirmity in the order passed by the concerned
Magistrate rejecting the discharge applications
of the applicants. In support of their case, they
have referred paragraph nos. 15, 25, 26, 27 and
28 of the judgment of the Apex Court in the
case of M.E. Shivalingamurthy Vs. Central
Bureau of investigation, Bengaluru reported
in 2020 1 Supreme 169/2020 0 Supreme (SC)
12. On the cumulative strength of the aforesaid,
learned Additional Government Advocates urge
that the present application under Section 482
Cr.P.C. is liable to be rejected.

14. I have considered the submissions
made by the learned counsel for the
applicants and have gone through the records
of the present application as also the orders
impugned.

15. Before going on the merits of the case
set up by learned counsel for the parties, this
Court comes to the paragraphs of the judgments
of the Apex Court as relied upon by the learned
counsel for the parties herein-above.

16. Paragraph nos. 17, 18, 23, 24, 25A, 27
and 28 of the judgment of the Apex Court in the
case of Pooja Ravinder Devidasani (Supra), as
relied upon by the learned counsel for the
applicants, are as follows:

"17. There is no dispute that the
appellant, who was wife of the Managing
Director, was appointed as a Director of
the Company-M/S Elite International Pvt.
Ltd. on 1st July, 2004 and had also
executed a Letter of Guarantee on 19th
January, 2005. The cheques in question
were
issued
during
April,
2008
to
September, 2008. So far as the dishonor of
Cheques is concerned, admittedly the
cheques were not signed by the appellant.
There is also no dispute that the appellant
was not the Managing Director but only a
non-executive Director of the Company.
Non-executive Director is no doubt a
custodian of the governance of the
Company but does not involve in the dayto-day affairs of the running of its business
and only monitors the executive activity. To
fasten vicarious liability under Section 141
of the Act on a person, at the material time
that person shall have been at the helm of
affairs of the Company, one who actively
looks after the day-to-day activities of the
Company and particularly responsible for
the conduct of its business. Simply because
a person is a Director of a Company, does
not make him liable under the N.I. Act.
Every person connected with the Company
will not fall into the ambit of the provision.
6 All. Harshit Vij & Anr. Vs. State of U.P. & Anr.
139
Time and again, it has been asserted by this
Court that only those persons who were in
charge of and responsible for the conduct
of the business of the Company at the time
of commission of an offence will be liable
for criminal action. A Director, who was
not in charge of and was not responsible
for the conduct of the business of the
Company at the relevant time, will not be
liable for an offence under Section 141 of
the N.I. Act. In National Small Industries
Corporation (supra) this Court observed:

"Section 141 is a penal provision
creating vicarious liability, and which, as
per settled law, must be strictly construed.
It is therefore, not sufficient to make a bald
cursory statement in a complaint that the
Director (arrayed as an accused) is in
charge of and responsible to the company
for the conduct of the business of the
company without anything more as to the
role of the Director. But the complaint
should spell out as to how and in what
manner Respondent 1 was in charge of or
was responsible to the accused Company
for the conduct of its business. This is in
consonance with strict interpretation of
penal statutes, especially, where such
statutes create vicarious liability.

A company may have a number of
Directors and to make any or all the
Directors as accused in a complaint merely
on the basis of a statement that they are in
charge of and responsible for the conduct
of the business of the company without
anything more is not a sufficient or
adequate fulfillment of the requirements
under Section 141.

18. In Girdhari Lal Gupta Vs.
D.H. Mehta & Anr. (1971) 3 SCC 189, this
Court observed that a person 'in charge of
a business' means that the person should be
in overall control of the day to day business
of the Company.

23. In Gunmala Sales Private
Ltd. (supra) on which learned counsel for
the respondents has heavily relied, this
Court at Para 33(c) held : "In the facts of a
given case, on an overall reading of the
complaint, the High Court may, despite the
presence of the basic averment, quash the
complaint because of the absence of more
particulars about role of the Director in the
complaint. It may do so having come across
some
unimpeachable,
uncontrovertible
evidence which is beyond suspicion or
doubt or totally acceptable circumstances
which may clearly indicate that the
Director could not have been concerned
with the issuance of cheques and asking
him to stand the trial would be abuse of the
process of the court. Despite the presence
of basic averment, it may come to a
conclusion that no case is made out against
the Director. Take for instance a case of a
Director suffering from a terminal illness
who was bedridden at the relevant time or
a Director who had resigned long before
issuance of cheques. In such cases, if the
High Court is convinced that prosecuting
such a Director is merely an arm- twisting
tactics, the High Court may quash the
proceedings. It bears repetition to state that
to establish such case unimpeachable,
uncontrovertible evidence which is beyond
suspicion or doubt or some totally
acceptable circumstances will have to be
brought to the notice of the High Court.
Such cases may be few and far between but
the possibility of such a case being there
cannot be ruled out".

24. In the light of the law laid
down by this Court, the present case be
examined. It is not in dispute that two
persons, namely, Parag Tejani and Hitesh
Haria,
were
inducted
as
DirectorOperations of the Company w.e.f. 17th
December, 2005 by virtue of a resolution
passed by the Company on the same date. It
140 INDIAN LAW REPORTS ALLAHABAD SERIES
is on the same date the appellant had
ceased to be a Director as per the Annual
Report which is not disputed by the
Respondent No. 2. A perusal of the
Complaint shows that Respondent No. 2
has made the newly appointed DirectorsOperations Parag Tejani and Hitesh Haria
also as accused stating that all the accused
approached him with a request for trade
finance facility and accordingly the said
facility was granted as per their request. It
thus gives an impression that Respondent
No. 2 is well aware of the change of
Directors in the accused Company. In spite
of knowing the developments taken place in
the Company that the appellant was no
longer a Director of the Company and two
new
Directors
were
inducted,
the
Respondent No. 2 has chosen to array all of
them as accused in the Complaints.
Moreover, Respondent No. 2 had not
disputed this fact emphatically in the
proceedings before the High Court. We
have gone though the reply affidavit filed
by Respondent No. 2 before the High Court
of Bombay.

25. A bare reading of the
averment of Respondent No. 2 before the
High Court, suggests that his case appears
to be that the appellant has not proved her
resignation in unequivocal terms and it is a
disputed question of fact. It is noteworthy
that the respondent No. 2 except making a
bald statement and throwing the burden on
the appellant to prove authenticity of
documents, has not pleaded anywhere that
the public documents Form 32 and Annual
Return
are
forged
and
fabricated
documents. Curiously, respondent No. 2 on
the one hand raises a doubt about the
genuineness
of
Form
32,
a
public
document, through which the default
Company had communicated the change of
Directors to the Registrar of the Companies
with the effect of resignation of the
appellant and induction of two DirectorsOperations and on the other hand, he has
arrayed the two newly appointed Directors-
Operations as accused whose names were
communicated
to
the
Registrar
of
Companies by the very same Form 32. The
respondent/complainant
cannot
be
permitted to blow hot and cold at the same
time. When he denies the genuineness of
the document, he cannot act upon it and
array the newly appointed Directors as
accused.

27. Unfortunately, the High Court
did not deal the issue in a proper
perspective
and
committed
error
in
dismissing the writ petitions by holding that
in the Complaints filed by the Respondent
No. 2, specific averments were made
against the appellant. But on the contrary,
taking the complaint as a whole, it can be
inferred that in the entire complaint, no
specific role is attributed to the appellant in
the commission of offence. It is settled law
that to attract a case under Section 141 of
the N.I. Act a specific role must have been
played by a Director of the Company for
fastening vicarious liability. But in this
case, the appellant was neither a Director
of the accused Company nor in charge of
or involved in the day to day affairs of the
Company at the time of commission of the
alleged offence. There is not even a whisper
or shred of evidence on record to show that
there is any act committed by the appellant
from which a reasonable inference can be
drawn
that
the
appellant
could
be
vicariously held liable for the offence with
which she is charged.

28. In the entire complaint,
neither the role of the appellant in the
affairs of the Company was explained nor
in what manner the appellant is responsible
for the conduct of business of the Company,
was explained. From the record it appears
that the trade finance facility was extended
6 All. Harshit Vij & Anr. Vs. State of U.P. & Anr.
141
by the Respondent No. 2 to the default
Company during the period from 13th
April, 2008 to 14th October, 2008, against
which the Cheques were issued by the
Company which stood dishonored. Much
before that on 17th December, 2005 the
appellant resigned from the Board of
Directors. Hence, we have no hesitation to
hold that continuation of the criminal
proceedings against the appellant under
Section 138read with Section 141 of the
N.I. Act is a pure abuse of process of law
and it has to be interdicted at the
threshold."

17. Paragraph no.20 of the judgment
of the Apex Court in the case of
Rajeshbhai Muljibhai Patel (Supra) as
relied upon by the learned Additional
Government Advocates for the State, is as
follows:

"20. The High Court, in our view,
erred in quashing the criminal case in
C.C.No.367/2016 filed by appellant No.3Hasmukhbhai under Section 138 of N.I.
Act. As pointed out earlier, Yogeshbhai has
admitted the issuance of cheques. When
once
the
issuance
of
cheque
is
admitted/established,
the
presumption
would arise under Section 139 of the N.I.
Act in favour of the holder of cheque that
is the complainant-appellant No.3. The
nature of presumptions under Section139
of the N.I. Act and Section 118(a) of the
Indian Evidence Act are rebuttable.
Yogeshbhai has of course, raised the
defence
that
there
is
no
illegally
enforceable debt and he issued the
cheques
to
help
appellant
No.3Hasmukhbhai for purchase of lands. The
burden lies upon the accused to rebut the
presumption by adducing evidence. The
High Court did not keep in view that until
the accused discharges his burden, the
presumption under Section 139 of N.I. Act
will continue to remain. It is for
Yogeshbhai to adduce evidence to rebut the
statutory
presumption.
When disputed
questions of facts are involved which need
to be adjudicated after the parties adduce
evidence, the complaint under Section 138
of the N.I. Act ought not to have been
quashed by the High Court by taking
recourse to Section 482 Cr.P.C. Though, the
Court has the power to quash the criminal
complaint filed under Section 138 of the
N.I. Act on the legal issues like limitation,
etc. Criminal complaint filed under Section
138 of the N.I. Act against Yogeshbhai
ought not have been quashed merely on the
ground that there are inter se dispute
between appellant No.3 and respondent
No.2. Without keeping in view the statutory
presumption raised under Section 139 of
the N.I. Act, the High Court, in our view,
committed a serious error in quashing the
criminal complaint in C.C.No.367/2016
filed under Section 138 of N.I. Act.

(Emphasis added)

18. Paragraph nos. 15, 25 to 27 of the
judgment of the Apex Court in the case of
M.E. Shivalingamurthy (Supra) as relied
upon
by
the
learned
Additional
Government Advocates for the State, are as
follows:

"15. The defence of the accused is
not to be looked into at the stage when the
accused seeks to be discharged under
Section 227 of the Cr.PC (See State of J &
K v. Sudershan Chakkar and another, AIR
1995 SC 1954). The expression, "the record
of the case", used in Section 227 of the
Cr.PC, is to be understood as the
documents and the articles, if any,
produced by the prosecution. The Code
does not give any right to the accused to
142 INDIAN LAW REPORTS ALLAHABAD SERIES
produce any document at the stage of
framing of the charge. At the stage of
framing of the charge, the submission of the
accused is to be confined to the material
produced by the Police (See State of Orissa
v. Debendra Nath Padhi, AIR 2005 SC
359).

25. It is here that again it
becomes
necessary
that
we
remind
ourselves of the contours of the jurisdiction
under Section 227 of the Cr.PC. The
principle established is to take the
materials produced by the prosecution,
both in the form of oral statements and also
documentary material, and act upon it
without it been subjected to questioning
through cross-examination and everything
assumed in favour of the prosecution, if a
scenario emerges where no offence, as
alleged, is made out against the accused,
it, undoubtedly, would enure to the benefit
of the accused warranting the Trial Court
to discharge the accused.

26. It is not open to the accused
to rely on material by way of defence and
persuade the court to discharge him.

27.
However,
what
is
the
meaning of the expression "materials on
the basis of which grave suspicion is
aroused in the mind of the court's", which
is not explained away? Can the accused
explain away the material only with
reference to the materials produced by the
prosecution? Can the accused rely upon
material which he chooses to produce at
the stage?

28. In view of the decisions of this
Court that the accused can only rely on the
materials which are produced by the
prosecution, it must be understood that the
grave suspicion, if it is established on the
materials, should be explained away only
in terms of the materials made available by
the prosecution. No doubt, the accused may
appeal to the broad probabilities to the
case to persuade the court to discharge
him."

(Emphasis added)

19. Now, this Court comes on the
issues whether it is appropriate for this
Court being the Highest Court to exercise
its jurisdiction under Section 482 Cr.P.C. to
quash the charge-sheet and the proceedings
at the stage when the Magistrate has merely
issued process against the applicants. The
aforesaid
issue
has
elaborately
been
discussed by the Apex Court the following
judgments:

(i) R.P. Kapur Versus State of
Punjab; AIR 1960 SC 866,

(ii) State of Haryana & Ors.
Versus Ch. Bhajan Lal & Ors.;1992
Supp.(1) SCC 335,

(iii) State of Bihar & Anr.
Versus P.P. Sharma & Anr.; 1992 Supp
(1) SCC 222,

(iv)
Zandu
Pharmaceuticals
Works Ltd. & Ors. Versus Mohammad
Shariful Haque & Anr.; 2005 (1) SCC
122, and

(v) M. N. Ojha Vs. Alok Kumar
Srivastava; 2009 (9) SCC 682.

20. In the case of R.P. Kapur (Supra),
the following has been observed by the
Apex Court in paragraph 6:

"Before dealing with the merits of
the appeal it is necessary to consider the
nature and scope of the inherent power of
the High Court under s. 561 -A of the Code.
The said section saves the inherent power
of the High Court to make such orders as
may be necessary to give effect to any order
under this Code or to prevent abuse of the
process of any court or otherwise to secure
the ends of justice. There is no doubt that
this inherent power cannot be exercised in
6 All. Harshit Vij & Anr. Vs. State of U.P. & Anr.
143
regard to matters specifically covered by
the other provisions of the Code. In the
present case the magistrate before whom
the police report has been filed under s.
173 of the Code has yet not applied his
mind to the merits of the said report and it
may be assumed in favour of the appellant
that his request for the quashing of the
.proceedings is not at the present stage
covered by any specific provision of the
Code. It is well-established that the
inherent jurisdiction of the High Court can
be exercised to quash proceedings in a
proper case either to prevent the abuse of
the process of any court or otherwise to
secure the ends of justice. Ordinarily
criminal proceedings instituted against an
accused person must be tried under the
provisions of the Code, and the High Court
would be reluctant to interfere with the said
proceedings at an interlocutory stage. It is
not possible, desirable or expedient to lay
down any inflexible rule which would
govern the exercise of this inherent
jurisdiction. However, we may indicate
some categories of cases where the inherent
jurisdiction can and should be exercised for
quashing the proceedings. There may be
cases where it may be possible for the High
Court to take the view that the institution or
continuance
of
criminal
proceedings
against an accused person may amount to
the abuse of the process of the court or that
the quashing of the impugned proceedings
would secure the ends of justice. If the
criminal proceeding in question is in
respect of an offence alleged to have been
committed by an accused person and it
manifestly appears that there is a legal bar
against the institution or continuance of the
said proceeding the High Court would be
justified in quashing the proceeding on that
ground. Absence of the requisite sanction
may, for instance, furnish cases under this
category. Cases may also arise where the
a11egations in the First Information Report
or the complaint, even if they are taken at
their face value and accepted in their
entirety, do not constitute the offence
alleged; in such cases no ques- tion of
appreciating evidence arises; it is a matter
merely of looking at the complaint or the
First Information Report to decide whether
the offence alleged is disclosed or not. In
such cases it would be legitimate for the
High Court to hold that it would be
manifestly unjust to allow the process of the
criminal court to be issued against the
accused person. A third category of cases
in which the inherent jurisdiction of the
High Court can be successfully invoked
may also arise. In cases falling under this
category the allegations made against the
accused person do constitute an offence
alleged but there is either no legal evidence
adduced in support of the case or evidence
adduced clearly or manifestly fails to prove
the charge. In dealing with this class of
cases it is important to bear in mind the
distinction between a case where there is
no legal evidence or where there is
evidence which is manifestly and clearly
inconsistent with the accusation made and
cases where there is legal evidence which
on its appreciation may or may not support
the accusation in question. In exercising its
jurisdiction under s. 561-A the High Court
would not embark upon an enquiry as to
whether the evidence in question is reliable
or not. That is the function of the trial
magis- trate, and ordinarily it would not be
open to any party to invoke the High
Court's inherent jurisdiction and' contend
that on a reasonable appreciation of the
evidence the accusation made against the
accused would not be sustained. Broadly
stated that is the nature and scope of the
inherent jurisdiction of the High Court
under s. 561-A in the matter of quashing
criminal proceedings, and that is the effect
144 INDIAN LAW REPORTS ALLAHABAD SERIES
of the judicial decisions on the point (Vide:
In Re: Shripad G. Chandavarkar AIR 1928
Bom 184, Jagat Ohandra Mozumdar v.
Queen Empress ILR 26 Cal 786), Dr.
Shanker Singh v. The State of Punjab 56
Pun LR 54 : (AIR 1954 Punj 193),
Nripendra Bhusan Ray v. Govind Bandhu
Majumdar, AIR 1924 Cal 1018 and
Ramanathan Chettiyar v. K. Sivarama
Subrahmanya Ayyar ILR 47 Mad 722: (AIR
1925 Mad 39)."

21. In the case of State of Haryana
(Supra), the following has been observed
by the Apex Court in paragraph 105:

"105. In the backdrop of the
interpretation of the various relevant
provisions of the Code under Chapter XIV
and of the principles of law enunciated by
this Court in a series of decisions relating
to the exercise of the extra-ordinary power
under Article 226 or the inherent powers
Under Section 482 of the Code which we
have extracted and reproduced above, we
give the following categories of cases by
way of illustration wherein such power
could be exercised either to prevent abuse
of the process of any Court or otherwise to
secure the ends of justice, though it may not
be possible to lay down any precise, clearly
defined and sufficiently channelised and
inflexible guidelines or rigid formulae and
to give an exhaustive list of myriad kinds of
cases wherein such power should be
exercised.

1. Where the allegations made in
the First Information Report or the
complaint, even if they are taken at their
face value and accepted in their entirety do
not prima-facie constitute any offence or
make out a case against the accused.

2. Where the allegations in the
First
Information
Report
and
other
materials, if any, accompanying the F.I.R.
do not disclose a cognizable offence,
justifying an investigation by police officers
Under Section 156(1) of the Code except
under an order of a Magistrate within the
purview of Section 155(2) of the Code.

3. Where the uncontroverted
allegations made in the FIR or complaint
and the evidence collected in support of the
same do not disclose the commission of any
offence and make out a case against the
accused.

4. Where, the allegations in the
F.I.R. do not constitute a cognizable offence
but constitute only a non-cognizable
offence, no investigation is permitted by a
police officer without an order of a
Magistrate as contemplated Under Section
155(2) of the Code.

5. Where the allegations made in
the FIR or complaint are so absurd and
inherently improbable on the basis of which
no prudent person can ever reach a just
conclusion that there is sufficient ground
for proceeding against the accused.

6. Where there is an express legal
bar engrafted in any of the provisions of the
Code or the concerned Act (under which a
criminal proceeding is instituted) to the
institution
and
continuance
of
the
proceedings and/or where there is a
specific provision in the Code or the
concerned
Act,
providing
efficacious
redress for the grievance of the aggrieved
party.

7. Where a criminal proceeding is
manifestly attended with mala fide and/or
where
the
proceeding
is
maliciously
instituted with an ulterior motive for
wreaking vengeance on the accused and
with a view to spite him due to private and
personal grudge."

22. In the case of State of Bihar
(Supra), the following has been observed
by the Apex Court in paragraph 22. :-
6 All. Harshit Vij & Anr. Vs. State of U.P. & Anr.
145

"The question of mala fide
exercise of power assumes significance
only when the criminal prosecution is
initiated on extraneous considerations and
for an unauthorised purpose. There is no
material whatsoever is this case to show
that on the date when the FIR was lodged
by R.K. Singh he was activated by bias or
had any reason to act maliciously. The
dominant purpose of registering the case
against the respondents was to have an
investigation done into the allegations
contained in the FIR and in the event of
there being sufficient material in support of
the allegations to present the charge sheet
before the court. There is no material to
show
that
the
dominant
object
of
registering the case was the character
assassination of the respondents or to
harass and humiliate them. This Court in
State of Bihar v J.A.C. Saldhana and Ors.,
[1980] 2 SCR 16 has held that when the
information is lodged at the police station
and an offence is registered, the mala fides
of the informant would be of secondary
importance. It is the material collected
during the investigation which decides the
fate of the accused person. This Court in
State of Haryana and Ors. v. Ch. Bhajan
Lal and Ors., J.T. 1990 (4) S.C. 650
permitted the State Government to hold
investigation afresh against Ch. Bhajan Lal
inspite of the fact the prosecution was
lodged at the instance of Dharam Pal who
was enimical towards Bhajan Lal."

23.

In
the
case
of
Zandu
Pharmaceuticals Works Ltd. (Supra), the
following has been observed by the Apex
Court in paragraphs nos. 8 to 12:

"8. Exercise of power under
Section 482 of the Code in a case of this
nature is the exception and not the rule.
The Section does not confer any new
powers on the High Court. It only saves the
inherent power which the Court possessed
before the enactment of the Code. It
envisages three circumstances under which
the inherent jurisdiction may be exercised,
namely, (i) to give effect to an order under
the Code, (ii) to prevent abuse of the
process of court, and (iii) to otherwise
secure the ends of justice.