During the proceedings regarding an accused's request to dismiss the FIR under sections 406 and 420 of the Indian Penal Code (IPC), the Punjab & Haryana High Court observed that complaint filed u/s 138 of Negotiable Instruments Act ("NI Act") for dishonor of cheque does not bar a subsequent case for cheating u/s 420 and 406 IPC.

The division bench of Justice Anoop Chitkara noted the precedent established in the Sangeetaben Mahendrabhai Patel v. State of Gujarat & Anr case. In this instance, a two-judge Bench of the Supreme Court held that although there might be overlapping facts between the cases, the essential elements of the offenses are totally distinct. Consequently, the court clarified that the initiation of a subsequent case is not prohibited in such scenarios.

It would be a violation of Article 20(2) of India's Constitution to file an FIR under the Indian Penal Code by leveling allegations that the goods were received with malicious intent and cheques were also issued with such an intent, and to simultaneously seek prosecution under Section 138 of NIA for the same set of allegations and a similar transaction for the same amount would violate Article 20(2) of the Constitution of India.”

However, it was clarified that the issue having been referred to a larger bench in J. Vedhasingh v. R.M. Govindan, the view expressed would have no legal and binding force.

In the said matter, the petitioners faced two complaints under section 138 of the Negotiable Instruments Act (NI Act) and an FIR under sections 406/420 of the Indian Penal Code (IPC), all related to the same amount of Rs. 1.59 crores, seeking their criminal prosecution.

The complainant argued that the case wasn't solely about the dishonoring of the cheque but also involved breach of trust along with mens rea (intent). Consequently, they contended that filing an FIR under sections 406 and 420 of the IPC was not prohibited. Conversely, the petitioners argued that the dishonoring of the cheque couldn't be construed as indicative of an intention to deceive or as a malicious act on the part of the issuer. Therefore, they sought the quashing of the FIR.

The court opined that according to the contentions presented by the private respondents, the two offenses were distinct. They emphasized that the fraudulent and dishonest intention was a crucial aspect relevant to the offense under section 420 of the Indian Penal Code (IPC).

It was further said that the entrustment was against a promise to pay and was governed under Indian Contract Act, 1872.  They highlighted that if despite this context, there existed a malicious intent, and the offenses punishable under Sections 420 and 406 of the IPC were established, it could potentially undermine the stringent provisions of Section 138 of the Negotiable Instruments Act (NIA), which is considered a Special Act.

The court restated the principle that in instances of conflicting judgments by Supreme Court Benches of equal authority, High Courts are bound to adhere to the earliest judgment of the largest bench concerning the particular issue. The plea was disposed of with liberty to file fresh after passing of decision of the above-mentioned larger bench of the Supreme Court

Advocate Viren Sibal appeared for petitioners

AAG Karunesh Kaushal appeared for State

Advocates Aashish Chopra and Mehar Nagpal appeared for respondent Nos.2 to 4

Case Title: Jitendra Singh and another v. State of Punjab and others

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