Servesh Kumar Gupta, J.@mdashHeard learned Counsel for the parties and perused the papers on record. It appears that the accused applicant and the complainant respondent both are the engineers in the Public Works Department, Uttarakhand (for short, PWD). The work of construction of a bridge through Panchaghati Construction Company (for brevity, the company) was undertaken by the PWD. The cost of the said project was rupees thirty six lakhs.
2. It appears that in addition to their official duties, both the litigating engineers, in some form or the other, had their sleeping partnership in the Company. The Company started the construction work, wherefor first payment to the tune of Rs. 6,97,749/- was made by the PWD to the Company.
3. As per the averments of the complaint, the applicant petitioner separated himself from the Company after the release of the first payment, as indicated above. Subsequent thereto, when he was asked by the complainant Ganga Singh Matiyali to clear the accounts out of the profits so received by him, accused applicant Parmesh Singh Negi allegedly issued him a cheque of Rs. 9,30,000/- drawn at Nainital Bank, Almora. The said cheque, when presented by the complainant, got dishonoured on 23.5.2009 and the same was returned unpaid to the complainant by the bank with the endorsement "insufficient fund". So, a notice u/s 138(b) of the Negotiable Instruments Act was issued by Ganga Singh Matiyali to Parmesh Singh Negi demanding payment of the cheque amount. When the payment was not made by Mr. Negi, the impugned complaint case no. 392/2009 was lodged on 6.7.2009 u/s 138 of the N.I. Act against him by Mr. Matiyali in the Court of Chief Judicial Magistrate, Champawat.
4. Learned Magistrate, after recording the statement of the complainant, passed the impugned order of cognizance dated 20.7.2009 and summoned the accused applicant to stand trial for the said offence under the Negotiable Instruments Act.
5. It has been contended by learned Sr. Counsel for the applicant that even if the averments made in the complaint are taken into consideration, these by themselves do not prove any offence against the applicant because, firstly, being a Government Servant/Engineer in PWD, the parties involved in the present litigation, could not participate either actively or in the form of sleeping partnership in the Company, which was assigned the work of construction of bridge by the PWD itself, where they were serving and, secondly, paragraph 3 of the complaint adverts that after the release of First payment, the applicant Mr. Negi severed his relations from the Company and took away the entire profit of the first payment, which was to the tune of Rs. 6,97,749/-. Hence, when the payment itself was to the tune of Rs. 6,97,749/-, then how amount of Rs. 9,30,000/- can be worked out to be the profit out of the said amount.
6. Learned Counsel for the respondent further argued that the typed version, referred to at page 19 of this petition, is not correct. Photostat copy of the original document, annexed as Annexure No. 4 to the petition, also displays the amount of Rs. 4,16,044/-, which was in addition to the above amount. So, even if this amount is taken into consideration for a moment, then too the entire amount paid to the Company comes to nearly rupees eleven lakhs. In this amount of rupees eleven lakhs, cost of construction is also included. So, it was not possible that out of rupees eleven lakhs, Rs. 9,30,000/- was towards the profit, and after working out the same, a cheque of equivalent amount was given by Mr. Negi to the complainant.
7. Besides, it has also been argued by learned Sr. Counsel for the applicant that as per the certificate, issued by Chief Engineer Level I, PWD (Annexure 3 to the petition), the said Company/Firm was having four partners, namely, Govind Bhallabh, Ajay Gadkoti, Hemand Gadkoti and Prakash Pangari. Nowhere the names of either of these two engineers have been mentioned as partners in the said Firm.
8. Learned Counsel for the complainant respondent argued that the cheque amount, in question, is a legally enforceable debt, as has been explained in the explanation appended to Section 138 of the N.I. Act. This contention is not tenable because when the entire transaction (if any) between the parties itself is based upon an illegal partnership, then the cheque issued on account of the said partnership firm by either of the parties cannot be termed as a legal and valid transaction, much less a legally enforceable debt by any stress of imagination.
9. For the reasons recorded above, impugned proceedings cannot be permitted to progress anymore. Order of cognizance and entire proceedings of the impugned complaint case are liable to be quashed.
10. Consequently, petition is allowed. Order of cognizance dated 20.7.2009, passed by the Chief Judicial Magistrate, Champawat as well as the entire proceedings of Criminal Case No. 392/2009, Ganga Singh Matiyali v. Parmesh Singh Negi, u/s 138 of the Negotiable Instruments Act are hereby quashed. Inform the court concerned accordingly.
