GANESH STEEL ROLLING MILLS LIMITED Vs. STCL LIMITED

JUDGEMENT

(1.) These petitions are heard and disposed of together as identical facts and circumstances are involved and are in relation to transactions between the same parties.

(2.) Heard the learned Senior Advocate Shri G.L.Rawal appearing for the counsel for the petitioners and the learned counsel appearing for the respondent.

(3.) In Criminal Petition no.4104 of 2009, the petitioners 1 to 3 are a company and its directors, respectively, arraigned as accused in a criminal case filed by the respondent, M/s STCL Limited, a Government of India undertaking, before the Court of XV Additional Chief Metropolitan Magistrate , Bangalore, in case no. C.C.16289 of 2009, alleging an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Petitioner no.1 had entered into a contract dated 9.7.2008 with the respondent for import purchase of 750 MT of MS Turnings and Borings for a value of Rs. 1,61,26000. In terms of the contract the petitioner was to furnish a "PDC" (sic) or a post dated cheque equivalent to 100% of the contract value as security for due payment and that the same would be returned on satisfactory performance of the contract. It was also required of Petitioner no.2 as a Director of Petitioner no.1 to execute a personal guarantee on 9.7.2008, for the contract value. Incidentally, an undated cheque bearing no.917881 for the afore said amount, referred to in the personal guarantee, was furnished. Of the contracted quantity of 750 MT, it transpires that the actual quantity delivered, in four shipments, was 681 MT. The petitioner company has taken delivery of a quantity of 106 MT and made a total payment of Rs.22.94 lakh towards the same, the balance quantity was said to be with the respondent. It is the case of the petitioners that when matters stood thus, the respondent had chosen to present the undated cheque, furnished by the petitioners as security for the total contract price of Rs.1,61,26000, for encashment while supplying the date on the cheque as "11.3.2009", as if the cheque had been issued in discharge of a debt or other legal liability. It transpires that the banker of the petitioners had dishonoured the cheque as there were insufficient funds in the account of the petitioners. It is in this background that the criminal proceedings had been initiated after exchange of legal notices.