Does Prosecution Under IPC After Filing Of 138 NI Act Complaint Amount To Double Jeopardy? Punjab & Haryana HC Explains

While hearing an accused's plea seeking quashing of FIR u/s 406 and 420 IPC, the Punjab & Haryana High Court has observed that complaint filed u/s 138 of Negotiable Instruments Act ("NI Act") for dishonor of cheque does not bar a subsequent case for cheating u/s 420 and 406 IPC.

Justice Anoop Chitkara took note of the position laid down in Sangeetaben Mahendrabhai Patel v. State of Gujarat & Anr, where a two-judge Bench of the Supreme Court had held that there may be some overlapping of facts in both cases, but ingredients of offences are entirely different. Thus, a subsequent case is not barred.

Pertinently, the court opined that after a criminal prosecution has been launched, “it would be a violation of Article 20(2) of India's Constitution to file an FIR under the Indian Penal Code by leveling allegations that the goods were received with malicious intent and cheques were also issued with such an intent, and to simultaneously seek prosecution under Section 138 of NIA for the same set of allegations and a similar transaction for the same amount would violate Article 20(2) of the Constitution of India.”

However, it was clarified that the issue having been referred to a larger bench in J. Vedhasingh v. R.M. Govindan, the view expressed would have no legal and binding force.

The factual matrix of the case was that for the same amount of Rs.1.59 crores, two complaints u/s 138 of NI Act and an FIR u/s 406/420 IPC were filed against the petitioners seeking criminal prosecution.

The complainant/private respondents contended that the case was not only of cheque dishonor, but also breach of trust accompanied by mens rea. As such, FIR u/s 406 and 420 IPC was not barred. The petitioners, on the other hand, contended that dishonor of cheque could not be construed as intention to cheat or malicious act on part of the issuer. Hence, the FIR was liable to be quashed.

So far as the private respondents had contended that the two offences were different as fraudulent and dishonest intention was relevant to offence u/s 420 IPC, the court opined,

"Once the legislature had provided a special provision for prosecution for the dishonor of a cheque with a presumption in favor of the holder of the cheque, it would be reading down the statute by taking the view that the same amount was also misappropriated ...once the complainant has preferred to launch prosecution under Section 138 of NIA, a parallel prosecution under Sections 420 & 406 IPC would not lie and would amount to double jeopardy, violating Article 20(2) of India’s Constitution, which makes it fundamental right that no person shall be prosecuted and for the same offence more than once.”

It was further said that the entrustment was against a promise to pay and was governed under Indian Contract Act, 1872. If still there was a malicious intent and offences punishable under Sections 420 & 406 IPC also made out, “then it would be undermining the stringent provisions of Section 138 of NIA, which is a Special Act.”

The court also reiterated that when faced with conflicting judgments of Supreme Court Benches of equal strength, High Courts must follow the earliest judgement of the largest bench on the point in issue.

The plea was disposed of with liberty to file fresh after passing of decision of the above-mentioned larger bench of the Supreme Court.

“All the proceedings before the trial court shall be subject to the outcome of the judgment of larger bench and consequent petition similar to this, if the stage arises," the court added.

Advocate Viren Sibal appeared for petitioners

AAG Karunesh Kaushal appeared for State

Advocates Aashish Chopra and Mehar Nagpal appeared for respondent Nos.2 to 4

Case Title: Jitendra Singh and another v. State of Punjab and others

Citation: 2023 LiveLaw (PH) 245

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