SHIVANAI HEALTH CARE BANGALORE REP BY ITS PARTNER K N MURALI KRISHNA BABU Vs. SHIVANI REMEDIES BHATKAL REP BY HIS PARTNER RAGHUVEER KOLLE UTTARA KANNADA DIST

JUDGEMENT

(1.) RESPONDENT filed a private complaint under S.200 of Cr.P.C. read with S.138 of the Negotiable Instruments Act, 1881 (for short the Act) against the petitioners alleging commission of an offence punishable under S.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 S. 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 `Goodwill 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 instalments 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 enchashment. 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.) INDISPUTABLY, accused have entered into an agreement dated 19.2.2003 under which they agreed to acquire the Trade Marks/ Brand Names owned by the complainant, for sale consideration of Rs.10,00,000/- by way of assignment along with `Good Will and that on the same day, they paid a sum of Rs.1,00,000/- and promised to pay the balance amount of Rs.9,00,000/- in 9 monthly instalments commencing from May, 2003 vide post dated cheques. Complainant executed a Deed of Assignment dated 19.2.2003 in favour of the accused for smooth transfer of `Title pending payment. In furtherance of the said transaction, under a letter dated 26.8.2003, accused tendered the cheques totally amounting to Rs.8,50,000/- drawn in favour of the complainant. Subsequently, accused delivered demand drafts for Rs.1,00,000/- and Rs.2,50,000/- and obtained back from the complainant two cheques for Rs.1,00,000 and Rs. 2,50,000/- respectively. A Tripartite MOU between M/s. Shivani Pharmatech Pvt. Ltd., and M/s. Shivani Surgicals Pvt. Ltd., respresented by its Director Mr. Raghuveer Kolle and the accused was entered into. It is alleged by accused that, after entering into the said MOU, several drugs of different brands manufactured and sold by the complainant prior to entering into the Deed of Assignment, were returned as the drugs had expired and found to be damaged pharmaceutical products. The accused contends that, a letter dated 21.9.2004 was addressed to M/s. Shivani Pharmatech Pvt Ltd., indicating that, the accused are unable to receive or recover payment of certain supplied bills from various parties. Therefore, they claim that they are entitled to recover from the complainant Rs.4,4,3,648.36. The accused also raised a dispute with regard to the Brand Name/ Trade Mark `RHINORIL and contended that there is a dispute. It was claimed that, accused are entitled to debit the said amount of Rs.4,43,648.36 from the account of the complainant as agreed upon, in the MOU and hence, they stopped payment in respect of 2 cheques for Rs. 2,50,000/- each and as such, there is no legally recoverable debt or liability. It is on the basis of the said reply notice and with reference to the said MOU dated 11.4.2003, it is contended that, since the MOU has a clause to the effect that, in case of any disputes, the same shall be referred to arbitration and the award shall be final and binding on all, the complaint is not maintainable.