SHIVANI HEALTHCARE (A PARTNERSHIP FIRM, CONSTITUTED UNDER THE INDIAN PARTNERSHIP ACT) REP BY ITS PARTNER K.N. MURALI KRISHNA BABU AND K.N. MURALI KRISHNA BABU Vs. SHIVANI REMEDIES (A PARTNERSHIP FIRM, CONSTITUTED UNDER THE INDIAN PARTNERSHIP ACT

JUDGEMENT

(1.) RESPONDENT filed a private complaint under Section 200 of Code of Criminal Procedure read with Section 138 of The Negotiable Instruments Act, 1881 (for short "the Act") against the Petitioners alleging commission of an offence punishable under Section 138 of the Act. After filing of an affidavit and recording sworn statement of the complainant, cognizance was taken by the learned Magistrate on 21.04.2005 and case was ordered to be registered. Accordingly, CC No. 268/2009 for an offence punishable under Section 138 of the Act was registered and process was issued to the accused. This petition is for quashing of the said order.

(2.) BRIEF facts of the case as per the averments contained in the complaint are: Complainant is a partnership firm engaged in the business of Pharmaceutical products. Accused -1 is engaged in the business of distribution of Pharmaceutical products. Accused -2 is the Managing Director. In pursuance of an agreement dated 19.2.2003, accused agreed to acquire Brand Names/Trade Marks owned and possessed by the complainant along with its 'Good Will' for consideration of Rs. 10,00,000/ - and on the same day paid advance money of Rs. 01.00 lakh under a demand draft. Accused assured to pay the balance amount of Rs. 9,00,000/ - in installments commencing from May, 2003 towards which post dated cheques were issued. A Deed of Assignment was executed on 19.2.2003, for transfer of 'Title' pending payment. It is alleged that, accused were due to pay the complainant a total sum of Rs. 5,00,000/ -and at the instance of the accused, the complainant delayed presentation of 2 cheques for encashment. When presented, the cheques were returned with bankers' endorsement dated 23.9.2004 'Payment stopped by the Drawer'. Complaint served notice dated 20.10.2004 to which a reply dated 2.11.2004 was sent. It was stated in the said reply notice that, a Tripartite Memorandum of Understanding (MOU) dated 11.4.2003 has been executed between the parties, in terms of which, certain amount needs to be given set off and hence, the accused is not liable to pay any amount to the complainant and accordingly, the accused stopped the payment of 2 cheques. Not satisfied with the reply, said private complaint was filed on 27.11.2004, the cognizance of which was taken and summons was issued to the accused.

(3.) SRI . Ajay Patil, learned Advocate appearing for the Respondent/complainant, on the other hand, repudiating the said contentions, contended that, since there is element of criminal offence involved in the matter, the lawful proceedings initiated in the Court of the Magistrate, cannot be permitted to be defeated by way of the present petition. He submitted that, arbitration clause in the MOU would enure to the benefit of accused, only in settling the civil proceedings and not with reference to the criminal offence which has been committed by them. He further submitted that, amount with regard to the alleged adjustment and the terms of agreement/MOU is a disputed fact and since it is the defence which has been sought to be put forth to the complaint by accused, the same cannot be made the defence to quash the proceedings.