In light of proceedings instituted against an individual person under S.482, it has been observed by the bench of Subhasis Dasgupta J. that there is no bar to initiate proceedings under S.138 of N.I. Act I in the matter of Ramesh Chandra Agarwal Vs. The State of West Bengal & Ors. [CRR No. 1754 of 2020] in the High Court of Calcutta.
The appellant being engaged in the business of Corporate Depositor, on the presentation of petitioner with other carrying then a trade of auto car dealership of Maruti Suzuki, advanced a loan of fifty lakh in the form of inter-corporate deposit, on 18th March, 2020, to the petitioner being one of the Directors of Premier Car World Pvt. Ltd. for a period of 90 days bearing an interest of 10% per annum to overcome the stringent financial condition, faced by the borrower/Premier Car World Pvt. Ltd. Such amount of inter-corporate deposit was encashed by the petitioner/accused, who also had issued a post-dated cheque of Rs. 50 Lakh to the complainant creditor, as collateral security. Since the petitioner being beneficiary of inter-corporate deposit deliberately declined to return the money, taken as loan after the lapse of stipulated period of time of 90 days, on being requested by the petitioner/accused person, the complainant creditor deposited the post-dated cheque, given by loanee petitioner/accused person, to its banker on 16th June, 2020, which was dishonoured by the bank upon receiving stop payment instruction from the beneficiary/loanee/petitioner accused person
It was contended that since nothing was tangible in the complaint itself that there existed a fraudulent and dishonest intention on the part of petitioner at the time of commission of offence, the continuance of the proceeding would be absolutely illegal. He further placed reliance on Satishchandra Ratanlal Shah Vs. State of Gujrat & Anr. n (2019) 9 SCC 148 to contend that mere inability of the petitioner to pay off loan amount cannot give rise to a prosecution for cheating unless the fraudulent or dishonest intention was shown right at the beginning of the transaction.
It was observed by the court that “A separate case under Section 138 of Negotiable Instruments Act is also pending against the petitioner. The settled proposition of law is that though there is civil remedy available in connection with a commercial transaction, but there is no legal impediment to launch a separate prosecution under Section 138 of N.I. Act, subject to the fulfilment of the ingredients constituting such offence, which is indeed different from the instant on.” The court opined that when exercising jurisdiction under Section 482 of the Cr.P.C., the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is the function of the trial Judge. Judicial process should not be an instrument of oppression, or, needless harassment.
However, the court saw to it that there was still space for evidence collection and directed, “It is the sole case of the petitioner that the loan amount could not be liquidated because of impact of COVID-19, though attempts were made on a couple of occasions to deposit the interest component of the principal amount of debt. The subsequent conduct of the petitioner is not always the sole test of the offence of cheating. When the investigation is at its initial stage, it is very hard to ascertain the required fraudulent and dishonest intention on the part of the petitioner from the materials placed in the Case Diary together with documents available in the record.”