S.C. GARG Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) Challenge in this Criminal Appeal is to the final judgment and order dtd. 28/4/2017 passed by the High Court of Judicature at Allahabad whereby the appellant's petition under Sec. 482 of the Criminal Procedure Code, 1973 ['Cr.P.C.'] seeking quashment of Criminal Case No. 7489 of 2002 pending on the file of Chief Judicial Magistrate, Ghaziabad for offences under Sec. 420 of the Indian Penal Code, 1860 ['IPC'], has been dismissed.

(2.) Brief facts necessary for disposal of the criminal appeal are that the appellant/S.C. Garg ['Garg'] was the Managing Director of the Company Ruchira Papers Ltd. ['Company'] which was engaged in manufacturing craft papers. The Company had business dealings with ID Packaging, a partnership concern of respondent no. 2/R.N. Tyagi ['Tyagi']. In conduct of business between two entities, the parties used to maintain a running account and Tyagi used to issue cheques from time to time in favour of ID Packaging. Between 22/12/1997 to 30/1/1998, Tyagi issued 11 cheques which were initially dishonoured due to insufficiency of funds in the account. To maintain business relations, both the parties agreed to present the 11 cheques again at a later stage upon instructions from Tyagi. In relation to the liabilities other than the amount involved in the 11 cheques, Tyagi made payment by issuing 03 demand drafts in the name of the appellant's company. On 8/6/1998, 11 cheques were again presented for encashment upon which only four cheques were cleared leaving the remaining 07 cheques to be dishonoured again. The appellant's company filed a complaint under Sec. 138 of the Negotiable Instruments Act, 1881 ['NI Act'] against ID Packaging and Tyagi in relation to the 07 dishonoured cheques.

(3.) On 25/10/2002, the learned Magistrate convicted Tyagi for offence under Sec. 138 of the NI Act. His defence, that there is no enforceable debt as the amount involved in 07 cheques has already been paid through the demand drafts, was rejected with a specific finding that the demand drafts pertained to other liabilities of Tyagi to the company and were not towards liquidating the liability arising under the cheques in question. Tyagi was sentenced to imprisonment till rising of Court and pay fine of Rs.3,20,385.00 (i.e. cumulative amount of the 7 dishonoured cheques). The appeal preferred by Tyagi challenging his conviction under Sec. 138 of the NI Act was dismissed by the learned Additional Sessions Judge on 17/3/2005 by affirming the finding, conviction and sentence awarded to him.