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Criminal Miscellaneous No.332-Q of 1972, decided on 1st June, 1974.

(a) Penal Code (RLV of 1860)--

---S. 420--Fraud--Cheque if dishonoured, by bank, affected party, held, could not criminally proceed against giver of cheque but cart only proceed against him in civil Court.

(b) Criminal Procedure Code (V of 1898)---

---S. 561-A--Penal Code (XLV of 1860), S.420--Quashing of proceed ings--Dispute between parties of civil nature--Cheque was drawn by accused in his capacity as Managing Director of a Company which had been dissolved--Criminal proceedings, held, could not be initiated against him--Drawee if so advised could proceed against him or Company in civil Court or under Companies Act, 1913--Taking criminal proceedings against accused would be abuse of process of Court--Proceedings quashed in circumstances.

Amjad Hussain Syed for Petitioner.

Rana Ejaz for Respondent.

The petitioner claims himself to be the Managing Director of Peoples Industries Limited, Rawalpindi, a private limited company incorporated, in 1965. The respondent in this case is the proprietor of M/s. Khizri Traders, 30-Haider Road, Rawalpindi Cantonment. This is a firm of Agents for M/s. Haroon Industries Limited, Karachi. According to the petitioner, one Dodge Van Model K-160 at the total price of Rs.22,725 was purchased by the petitioner on behalf of the company from the respondent for the transportation of milk and other products. In payment of the sale proceeds two crossed cheques were issued. One crossed cheque for Rs.19,000 was issued on the 17th of February, 1967 under the joint signatures of the petitioner as well as Chairman of the company namely Alhaj Abdullah Zaheer-ud-Din Mal Mian), Ex-Minister far Health, Labour and Social Welfare, Government of Pakistan. This cheque was encashed by the respondent. The second crossed cheque bearing the date of the 15th August, 1967 for the balance payment of Rs.3,725 was dishonoured. Any way the possession of the van in question was delivered by the respondent to the petitioner on the 22nd of April, 1967 and it was registered in the name of the petitioner. The position of the petitioner is that the crossed cheque, dated 15th of August, 1967 was dishonoured as the company was not in a position to pay the same being in financial difficulties. The respondent filed a complaint unuer section 420, P.P.C. in the Court of the Cantonment Magistrate, Rawalpindi, on the 23rd April, 1969 against the petitioner alleging that the first crossed cheque issued by the petitioner was encashed by him whereas the second crossed cheque was dishonoured. It is stated in the complaint that the petitioner issued a third cheque for Rs.225 on the 27th of April, 1968 which was encashed. He issued another cheque on the 24th April, 1968 for Rs.500 but this was also dishonoured. It. was stated in the complaint that two cheques issued by the petitioner were dishonoured and that the balance amount of Rs.3,500 was still at standing in the' name of the petitioner. It was also stated that the respondent contacted the petitioner alongwith others and demanded the payment of the balance amount but the petitioner refused to pay the amount. The Magistrate after recording the preliminary statements .of the respondent-complainant and his witnesses issued summons to- the petitioner for appearance on the 2nd of July, 1969. The petitioner evaded service and did not appear before the Magistrate. The petitioner has filed the present petition in this Court for quashment of the proceedings in the complainant case against him on the ground that the petitioner did not purchase, the said vehicle in his individual capacity nor did he issue any cheque to the respondent-complainant in his personal capacity. The cheques that had been dishonoured were issued to the petitioner as Managing Director of the Peoples Industries Limited and as such he was not personally liable; that the proceedings were in bad faith; that it was admitted that Rs.3,500 as, balance amount in respect of the purchase of the vehicle was still to be paid by the Peoples Industries Limited to the respondent-complainant but that the nature of the dispute was civil and criminal proceedings should not have been instituted against the petitioner; that the petitioner did not desire to defraud the respondent-complainant with any intention of cheating him. He only acted on behalf of the Peoples Industries Limited in a bona fide manner, that the proceedings taken against him in the lower Court were unwarranted try law and amounted to abuse of the process of the Court. It was, therefore, prayed that the proceedings against the petitioner be quashed.

2. I have heard the learned counsel for the petitioner as well as the respondent. The legal position in this country is that if a cheque is issued by someone to the other and that cheque is dishonoured by the bank the affected party cannot criminally proceed against the giver of the cheque under section 420, P.P.C. but he could only proceed against him in the civil Court. In the present case it is submitted on behalf of the petitioner that he only acted as Managing Director of the Peoples Industries Limited and purchased the van in question from the respondent in that capacity for the use of the company. It is submitted that the respondent encashed the cheque amounting to Rs.19,000 issued under the signatures of the petitioner as well as the Chairman of the company. Consequently there was no intention to cheat. The balance amount which was not paid to the respondent i.e. Rs.35,003 could not be paid because of the financial difficulties of the company. Learned counsel for the petitioner argues that clearly the dispute between the plaintiff is of civil nature and that the respondent should proceed, if he so wanted, against the petitioner of the company by instituting proceedings in the civil Court. It is further submitted that the petitioner is an Advocate present and that the company of which he was the Managing Director had been dissolved.

3. There is force in the arguments of learned counsel. In the circumstances the criminal proceedings. cannot be instituted against the petitioner. However, if the respondent is so advised, he can proceed against him or the company as the case may be in the civil Court or f under the Companies Act, where the Managing Director is liable for, any loss which he causes to the creditor. Taking of criminal proceedings against the petitioner, therefore, is abuse of the process of the Court.

The result is that the proceedings against the petitioner in the easel entitled; Major (Retd.) Abdul Karim Rana v. Malik Mohammad Asghari pending in the Court of the Magistrate concerned are hereby quashed. This petition stands disposed of.

M. Y. H.

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