SUNIL TODI Vs. STATE OF GUJARAT

JUDGEMENT

(1.) A Single Judge of the High Court of Gujarat dismissed the petitions under Section 482 of the Code of Criminal Procedure, 1973("CrPC"), instituted by the appellants to quash the criminal complaint2 instituted by the second respondent for offences punishable under Section 138 of the Negotiable Instruments Act, 1881("NI Act"), and challenge an order of summons dated 3 November 2017 of the JMFC Mundra on the complaint. The complaint arises from the dishonour of a cheque in the amount of Rs.2,67,84,000/-. In the two appeals which arose from the order of the High Court, the appellants are respectively, four Directors(SLP (Crl) 6590/ 2019) and the Managing Director(SLP (Crl) 6995/2019) of a company by the name of R.L. Steels & Energy Limited("Company").

(2.) The background in which the controversy has arisen needs to be noticed. On 19 December 2015, a Letter of Intent was issued by the company to the second respondent for providing uninterrupted power supply at the plant of the company situated at Aurangabad in Maharashtra. Clause (k) of the Letter of Intent envisages that all payments would be made within sixty days through a Letter of Credit("LC") to be opened by the company. On 29 April 2016, an email was addressed by the company stating that payment security would be by cheque for an amount equivalent to the quantum of energy to be scheduled for forty-five days. Payments for monthly billing were to be made by LC within seven days of the receipt of bills. This was agreed upon in a communication dated 30 April 2016 addressed on behalf of the second respondent. On 30 June 2016, the company addressed a communication to the second respondent that it was issuing two cheques "only for security deposit " and that the cheques were to be deposited "after getting confirmation only ". The details of the cheques were :

(3.) A cheque post-dated 28 August 2017 in the amount of Rs.2,67,84,000/- was accordingly issued with the following endorsement on its reverse: "to be deposited after confirmation only for security purpose ". The power supply commenced from 1 July 2016. On 4 July 2016, the company addressed a communication to its banker, Karur Vysya Bank, requesting to stop payment of the above two cheques. On 24 July 2016, a Power Supply Agreement("PSA") was entered into between the second respondent and the company. The agreement envisages that the company would make payment to the second respondent on the tenth day of every calendar month by a LC. Clause 2.5.1 of the agreement stipulated thus: