K. SURESH Vs. LLOYDS FINANCE LTD

JUDGEMENT

(1.) THE Petitioner in this petition under Section 482 of the Code of Criminal Procedure, 1973 ('CrPC ) seeks the quashing of Criminal Complaint No. 2234 of 2001 titled Lloyds Finance Ltd. v. Madhya Pradesh State Road Transport Corporation and Others pending in the Court of the Metropolitan Magistrate ('MM ), New Delhi. The complaint was filed by the Respondent No.1 against the Madhya Pradesh State Road Transport Corporation ('MPSRTC ) as well as three others including the Petitioner here who is its Managing Director and two others being the Chief Accounts Officer and the Accounts Officer of MPSRTC. The complaint was for offences under Sections 138 and 141 of the Negotiable Instruments Act, 1881 ('NI Act ) in respect of the dishonor of eleven cheques issued on behalf of the MPSRTC in favour of the complainant company.

(2.) MR . Siddharth Luthra, the learned Senior Counsel, appearing for the Petitioner urged two grounds in support of the prayer for quashing of the criminal proceedings. The first was that the Petitioner who is an officer of the Indian Administrative Service ('IAS ) was nominated by the State Government of Madhya Pradesh to serve as the Managing Director of the MPSRTC. In terms of Section 43 of the Road Transport Corporation Act, 1950 ('RTC Act ), the Petitioner was a public servant within the meaning of Section 21 of the Indian Penal Code (IPC). Therefore, prior sanction for prosecuting the Petitioner in terms of Section 197 CrPC was a mandatory requirement before the learned MM could have taken cognizance of the offences on the basis of the complaint filed by the Respondent. Since the learned MM proceeded to take cognizance without such sanction having been obtained, the order taking cognizance was unsustainable in law. He relied upon the judgment of the Gauhati High Court dated 8th August, 2006 in Criminal Revision No. 174 of 2002 (K. Suresh v. Arihant Hire-Purchase Co. Ltd.) which was a case involving the Petitioner in his capacity as Managing Director of the MPSRTC for a similar offence under Section 138 NI Act.

(3.) IN reply, Mr. U.A. Rana, the learned Advocate appearing for the Respondent No. 1 complainant submits that the issuance of the cheques which were dishonoured due to insufficient funds could not said to be the performance of any official function of the Managing Director of MPSRTC. He refers to Section 140 NI Act which categorically states that it would be no defence in a prosecution for the offence under Section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment. He sought to distinguish the judgment of the Gauhati High Court in K. Suresh on the ground that there was no discussion therein of the question whether the Managing Director was, in issuing the cheques in question, performing an official function or not. Therefore the absence of a prior sanction under Section 197 CrPC would not render the order taking cognizance bad in law.