Invoking S.138 Of NI Act Does Not Bar Registration Of Crime Under Sections 406, 420 IPC: Karnataka High Court

A single judge bench of Justice M Nagaprasanna said,

"In a case under the Act what is required to be noticed is, whether it is for a legally enforceable debt and a fine is imposed. In an offence involved on the same instrument under Sections 406 or 420 IPC sentence of seven years can be imposed and the element mens rea is what is required to be seen in a case for offence of cheating under Section 420 of the IPC inter-alia."

Case Details:

The petitioners approached the court calling in question the proceedings registered on 22-07-2021 for the offence punishable under Section 420 of the IPC on the private complaint filed by one SOMASHEKAR B.

The petitioners were the Directors of the Company by the name Headwin Exim Private Limited ('the Company' for short). They approached the 2nd respondent/complainant seeking financial assistance to meet immediate financial needs that arose in its business. The financial assistance was rendered between July 2015 and September 2015 against which, the Company had issued five cheques total. The cheques were dishonoured. Following which proceedings invoking the Negotiable Instruments Act, 1881 were taken up by the complainant. The same is pending consideration before the competent Court.

Further, on the same instrument of issuance of cheques for which proceedings had been initiated under Section 138 of the Act, the complainant registered a private complaint invoking Section 200 of the Cr.P.C. alleging cheating under Section 420 of the IPC on the part of the Company and its Directors. The learned Magistrate, on registration of the said private complaint, directs investigation under Section 156(3) of the Cr.P.C. The Police pursuant to the aforesaid direction under Section 156(3) of the Cr.P.C., registers a FIR.

Petitioners submissions:

It was said, "The complainant having invoked the jurisdiction of the competent criminal Court by filing a complaint alleging offence punishable under Section 138 of the Act could not have again registered a complaint for the offence of cheating. It would amount to filing two complaints for the same offence."

Further, the private complaint so registered for the offence punishable under Section 420 IPC runs counter to the judgment of the Apex Court in the case of PRIYANKA SRIVASTAVA V. STATE OF U.P., reported in (2015) 6 SCC 287.

Respondents submissions:

It was said, "Invoking Section 138 of the Act will not preclude the complainant from registering a crime for offence punishable either under Section 406 or 420 of the IPC as it does amount to cheating and inducement on the part of the accused. It is a matter of trial in which the petitioners have to come out clean and seek dismissal of the petition."

Court findings:

The bench referred to apex court judgement in the case of SANGEETABEN MAHENDRABHAI PATEL V. STATE OF GUJARAT & ANR (2012) 7 SCC 621 wherein the court considered the very issue of whether a petition under Section 420 of the IPC would be maintainable, during the pendency or even after conviction under Section 138 of the Act. The Apex Court held that the two operate in different fields.

It observed, "The Apex Court holds that there can be no question of it being violative of Article 20(2) of the Constitution of India or Section 300(1) of the Cr.P.C. as it does not amount to double jeopardy. Therefore, the submission of the learned counsel appearing for the petitioners that the proceeding for offence punishable under Section 420 of the IPC is not maintainable once the complainant invokes Section 138 of the Act is unacceptable. It is a matter of trial for the petitioners to come out clean."

Further, the court went through the complaint and said, "A perusal at the impugned complaint would clearly indicate that the complaint is in compliance with the mandate of the judgment in the case of PRIYANKA SRIVASTAVA as the complainant in the complaint narrates the efforts taken for registration of a crime before the Police and the affidavit accompanies the complaint."

It held, "Therefore, the complaint registered is also not in violation of the judgment of the Apex Court in the case of PRIYANKA SRIVASTAVA."

Accordingly, it dismissed the petition.

Case Title: RASHMI TANDON & ANR v. THE STATE OF KARNATAKA

Case No: CRIMINAL PETITION No.6638 OF 2021

Citation: 2022 LiveLaw (Kar) 159

Date of Order: 10TH DAY OF MAY, 2022

Appearance: Advocate S.G.BHAGAVAN for petitioners; Advocate B.J.ROHITH, HCGP FOR R1; Advocate DEVI PRASAD SHETTY for R2

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