Orissa High Court
Smt. Anupama Biswal vs State Of Odisha & Another ……. … on 4 March, 2025
THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.3881 of 2023
(In the matter of an application under Section 482 of the Code of
Criminal Procedure, 1973)
Smt. Anupama Biswal ....... Petitioner
-Versus-
State of Odisha & another ....... Opposite Parties
For the Petitioner : Mr. Dipti Ranjan Mohapatra, Advocate
For the Opp. Party No.1 : Mr. M.K. Mohanty
Additional Standing Counsel
(For the Opp. Party No.1)
For the Opp. Party No.2 : Mr. Lalit Sahu, Advocate
CORAM:
THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA
Date of Hearing: 16.01.2025 :: Date of Judgment: 04.03.2025
S.S. Mishra, J. The petitioner has invoked the inherent jurisdiction of this Court
under Section 482 Cr.P.C. seeking quashing of the criminal complaint
being ICC Case No.208 of 2021 initiated by the opposite party No.2 for
the alleged commission of the offence punishable under Section 138 of
the N.I. Act.
2. The brief fact in the complaint is that the opposite party No.2, being
the complainant has alleged that, on the basis of the assurance given by
the son of the present petitioner to arrange admission of her son in a
Government Medical College, she had given cash to the son of the
petitioner. The son of the petitioner could not arrange the seat in the
Government Medical College for the son of the complainant, as promised
by him. The criminal case was initiated against the son of the petitioner
for various offences, which is pending trial.
3. When the matter stood thus, the complainant demanded the money
back from the son of the petitioner. To discharge the said liability, the
petitioner issued two cheques from her account in favour of the
complainant. On being presented the said cheques, the bankers of the
petitioner dishonoured the cheque. The statutory demand notice was
issued by the complainant to the petitioner. Since the demand notice was
not responded, the complainant case being ICC Case No.208 of 2021 was
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initiated. The petitioner is seeking quashing of the said criminal
complaint case on various grounds.
4. Heard Mr. D.R. Mohapatra, learned counsel petitioner, Mr. M. K.
Mohanty, learned Additional Standing Counsel for the opposite party
No.1 (State) and Mr. Lalit Sahu, learned counsel for the opposite party
No.2.
5. Mr. Mohapatra, learned counsel for the petitioner primarily focused
on the ground that the cheque issued by his client is not against the
legally recoverable debt. Therefore, the criminal complaint under Section
138 of the N.I. Act is not maintainable. He has relied upon the judgment
of Hon'ble Madras High Court in N.V.P Pandian v. M.M. Roy, reported
in AIR 1979 MAD 42. He has drawn the attention of this Court to
Paragraphs 5 and 11 of the said judgement which reads as under:
"5. But, the question for consideration is whether the respondent
would be entitled to maintain the action for the recovery of the plaint
claim. It should be noted that the suit is based on the original loan and
not merely on Ex. A-1, agreement. The specific case of the respondent
is that in consideration of the promise made by the appellant to obtain
a seat for her son in the Madras Medical College she paid Rs. 15,000/-
to him. No doubt, she would say that she gave the money as loan to the
appellant on the latter's assurance that he would obtain a seat for her
son in the Madras Medical College. But, a reading of the entire
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paragraph 3 of the plaint would make it clear that it was because the
appellant failed to get a seat for her son in the Madras Medical
College that the respondent filed the suit for the refund of the sum of
Rs. 15,000/-. A readding of Ex. A-6 notice dated 26th November 1972,
sent by the respondent's counsel would make it clear that the amount
was paid for the purpose of securing a seat in the Medical College and
not as a loan as is now sought to be made out in the plaint. On the fact
of it, it is clear that the agreement was against public policy. It is well
known that selection to the Medical Colleges in the State is made on
the basis of merit in accordance with the norms prescribed from time
to time by the Government. The public has an interest to see that in the
selection of candidates for a seat in the Medical College the fittest
persons should be selected. The law will not uphold an agreement
whereby a person has agreed to use his influence or position for the
purpose of securing a title, contract or some other benefit from the
Government. The public has a right to demand that the public officials
shall not be induced merely by consideration of personal gain to act in
a manner other than that which the public interest demands. Therefore,
when the respondent borrowed Rs. 15,000 in consideration of the
appellant agreeing to use his influence and secure for her son a seat in
the Madras Medical College, it could only be by means other than
straight forward.
11. Following these decisions, it has to be held that the instant case
falls clearly under the maxim in pari delicto potior est conditio
possidentis. The respondent must have known when she paid Rs.
15,000 that she was paying the money for an illegal object or an object
opposed to public policy. She cannot in any way be considered to be
less guilty party as none of the situations contemplated
in Sitaram v. Radha Bai is present. I therefore, follow the decision
in Kuju Collieries v. Tharkhand Mines and Ratanchand v. Askar and
hold that the respondent is not entitled to a refund of the money from
the appellant. The respondent herself could not get the relief she
wanted without setting up and proving the illegal object for which she
had paid the money. I therefore, set aside the judgment and decree of
the trial court, dismiss the suit and allow the appeal with costs."
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To support his case, learned counsel for the petitioner has further relied
upon the judgment of Hon'ble High Court of Delhi in Virender Singh vs.
Laxmi Narain and Ors., reported in MANU/DE/9709/2006. Relevant
part of paragraph 13 of the said judgement is reproduced hereunder:
13. "................... In the present case neither party is a
victim of exploitation. Both had voluntarily and by their free
will joined hands to flout the law. Therefore, in terms of the
Supreme Court decisions in Sita Ram v. Radha Bai (supra)
and Mohd. Salimuddin (supra) themselves, the parties being
in pari delicto, the doctrine would apply and the sum of
Rs.80,000/- could not be recovered in a court of law. Meaning
thereby that there did not exist any legally enforceable debt or
liability for the discharge of which it could be said that the
cheque in question was issued. Consequently, Section 138 of
the said Act would not be attracted. This legal position was
not appreciated by the courts below and it is for this reason
that they fell into error. That being the case, the conviction of
the petitioner is set aside. It is, however, made clear by the
learned Counsel for the petitioner that the sum of Rs.1 lac,
which had been deposited pursuant to the orders by the court
below, has already been withdrawn by the respondent No. 1
and that he would not be pressing for its return. The learned
Counsel for the petitioner also submits that to maintain his
bona fides, he would be paying a further sum of Rs.20,000/-
within two months to the complainant/respondent No. 1. He
submits that the said sum will be deposited in the trial court,
which the complainant/respondent No. 1 may withdraw
immediately thereafter.
6. Relying upon the aforementioned judgments, Mr. Mohapatra, learned
counsel for the petitioner primarily submitted that the cheque was issued
to discharge the so-called liability of the son of the petitioner, who had
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taken the cash from the complainant to arrange the seat in the
Government Medical College, which apparently is an immoral conduct.
Therefore, the debt so emanating from the aforementioned transaction is
an immoral debt, which is not recoverable either in the common law or
otherwise in accordance with law. Accordingly, the complaint under
Section 138 of the N.I. Act is also not maintainable. In this regard, Mr.
Mohapatra has drawn my attention to the Judgment of Karnataka High
Court in the case of R. Parimala Bai Vs Bhaskar Narasimhaiah,
reported in 2018 SCC OnLine Kar 3989. The relevant Paragraph 25 of
the said judgement is reproduced for ready reference:
"25. It is seen that, there are absolutely no allegations whatsoever
that the accused has taken this money as a loan or a debt or as a
liability at any point of time. It is clear cut case of the complainant
that, he has paid money for the purpose of securing job for his son,
even without examining whether the accused has got any authority
to provide job to his son or not and what is the procedure that is
required to be followed by the HAL factory for the purpose of
selecting any candidate for the purpose of providing any job.
Therefore, without examining anything, the complainant himself
has entered into a void contract with the accused and paid money
as against the public policy for illegal purpose."
He has further relied upon the judgement of Bombay High Court
in the case of Nanda Vs Nandkishor, reported in 2010 SCC OnLine
Page 6 of 19
Bom 54. The relevant Paragraph 3 of the said judgement is reproduced
below:
"3. The accused did not dispute the fact that he had issued the cheque
under his signature and had received notice (Exh. 22) from the
complainant; but outrightly denied the complaint and any liability on
the ground that the complainant was doing business of money lending
without any requisite licence for money lending and that the
complainant has failed to prove legally enforceable or recoverable
debt or legal liability as against accused, in view of the provisions of
the Bombay Money Lenders Act, 1946. The accused opposed the
complaint stoutly on the ground that under section 139 of the N.I. Act,
there cannot be presumption of pre-existing liability and complainant
had failed to prove that the cheque was issued towards legally
enforceable debt or liability."
To substantiate his submission, learned counsel for the petitioner has
further relied upon the judgment of Hon'ble Madras High Court in case
of Jeyaramachandran Vs. Babu @ A.M.Iqbal (Crl.A.Nos 534 & 535 of
2013) which was disposed of on 20.03.2020. Paragraph 19 of the said
judgement is reproduced here under:
"19. The doctrine or rule of in pari delicto is the embodiment of
the principle that the Courts refuses to enforce the illegal
agreement at the instance of the person who is a party to the
illegality or fraud. As above pointed out, the three exceptional
conditions to which the abovesaid maxim does not apply, not
applying to the facts and circumstances of the present case,
resultantly, as held by the Delhi High Court, in the abovesaid
decision, considering the facts and circumstances of the present
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case, there did not exist any legally enforceable debt or liability
for the discharge of which the cheques in question could be held
to have been issued, in such view of the matter, Section 138 of
the Negotiable Instruments Act would not be attracted and the
abovesaid aspects of the matter having also been taken into
consideration by the Appellate Court and inter alia rightly
chosen to acquit the respondent of the offence put forth against
him."
7. To counter the submission of Mr. Mohapatra, learned counsel for the
petitioner, Mr. Sahu, learned counsel for the opposite party No.2 has
submitted that whether the dues are legally recoverable against which the
cheque was issued or not, could only be ascertained by undertaking
complete trial. The complaint has been pending since more than one year
and much has taken place before the trial Court. Therefore, at this belated
stage, no interference is called for.
8. As per the statutory mandate under Section 143(2) of the N.I. Act,
the trial of the case under Section 138 of the N.I. Act should have been
completed within six months. However, the petitioner, on some pretext or
the other, is trying to prolong the trial of the case to defeat the cause of
the opposite party No.2-complainant.
Page 8 of 19
9. Mr. Sahu, learned counsel for the opposite party No.2 has also relied
upon the judgment of Jammu & Kashmir High Court - Srinagar Bench in
the case of Fayaz Ahamad Sheike & Another Vs Mushtaq Ahmad Khan
& Another, which was disposed of on 15.07.2022 in CRM(M)
No.280/2021 & CRM(M) No.281/2021 and contended that the
complainant is well within her right to continue the prosecution for the
alleged commission of the offence punishable under Section 138 of the
N.I. Act as well as Section 420 of the IPC simultaneously against the
petitioner accused. Paragraph 15 of the said judgment is reproduced
below:
"15. From the aforesaid analysis of law on the subject, it is clear
that offences under Section 138 of the NI Act and Section 420 of IPC
are distinct from each other because ingredients of the two offences
are different. While in a prosecution under Section 138 of NI Act,
fraudulent or dishonest intention at the time of issuance of cheque
need not be proved but in a prosecution under Section 420 of IPC,
such intention is an important ingredient to be established. For
proving offence under Section 138 of NI Act, it has to be established
that the cheque has been P a g e | 13 issued by the accused to
discharge a legally enforceable debt or liability and the same has
been dishonoured for insufficiency of funds etc. and despite receipt
of statutory notice of demand, the accused has failed to pay the
amount of cheque within the stipulated time. It is only when accused
fails to make the payment within the stipulated time upon receipt of
notice of demand that the offence under Section 138 of NI Act is
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made out against an accused. In the case of prosecution for the
charge under Section 420 of IPC, these ingredients need not be
proved by the prosecution. However, it has to be proved by
prosecution that at the very inception i.e. at the time of issuance of
the cheque by the accused, he had a dishonest intention. Thus,
offence under Section 420 of IPC is made out at the time of issuance
of the cheque itself which is not the case with offence under Section
138 of NI Act. Therefore, the two offences are distinct from each
other and the principle of double jeopardy or rule of estoppel does
not come into play."
10. There is no quarrel on the point of law that both the prosecution
under Section 420 of the IPC and the complaint under Section 138 of the
N.I. Act can run simultaneously against the accused. Both the offences
are independent offences.
11. Therefore, I am completely in agreement with the contention raised
by Mr. Sahu, learned counsel for the opposite party No.2.
12. However, this Court is examining as to whether the complaint under
Section 138 of the N.I. Act initiated by the opposite party No.2 is
maintainable against the petitioner. Once the petitioner on the basis of the
facts of the present case and the case cited at the Bar could establish that
the debt against which the cheques were issued is not legally recoverable
dues.
Page 10 of 19
13. It would be apt to reproduce the provision of Section 138 of the
N.I. Act.
"138. Dishonour of cheque for insufficiency, etc., of funds in the
account.--
Where any cheque drawn by a person on an account maintained by
him with a banker for payment of any amount of money to another
person from out of that account for the discharge, in whole or in part,
of any debt or other liability, is returned by the bank unpaid, either
because of the amount of money standing to the credit of that account
is insufficient to honour the cheque or that it exceeds the amount
arranged to be paid from that account by an agreement made with
that bank, such person shall be deemed to have committed an offence
and shall, without prejudice to any other provisions of this Act, be
punished with imprisonment for a term which may be extended to two
years, or with fine which may extend to twice the amount of the
cheque, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six
months from the date on which it is drawn or within the period of its
validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may
be, makes a demand for the payment of the said amount of money by
giving a notice in writing, to the drawer of the cheque, [within thirty
days of the receipt of information by him from the bank regarding the
return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said
amount of money to the payee or, as the case may be, to the holder in
due course of the cheque, within fifteen days of the receipt of the said
notice.
Explanation.--
For the purposes of this section, "debt or other liability" means a
legally enforceable debt or other liability.]"
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Reading of the provision indicates the basic ingredients to initiate the
proceeding under Section 138 of the N.I. Act are as under:
" Ingredients of Section 138 of Negotiable Instruments Act:
i. A person must have drawn a cheque to another person for
payment of certain amount which is legally recoverable;
ii. Cheque has been presented to bank within a period of 3 months
from date it was drawn;
iii. Cheque is returned by bank unpaid because of insufficient fund
in the account;
iv. Holder of cheque makes a demand for payment of the said
amount of money by giving notice to drawer and within 30
days period it is unpaid and returned;
V. Drawer fails to make payment to the payee."
14. Relying upon the aforementioned judgments, this Court has
obtained the view that the cheques issued by the petitioner in favour of
the complainant is not legally enforceable debt being immoral debt. One
of the ingredients to initiate a proceeding under Section 138 of the N.I.
Act is essentially the cheques issued should be towards a debt or other
liability, which is legally enforceable debt or the liability. On the basis of
the undisputed facts germinating from the record, the petitioner could
successfully establish that the cheques issued by her to the complainant is
to clear the amount illegally accepted by his son for arranging a seat in
the Medial College for the son of the complainant. The son of the
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complainant has also participated in the illegal act. Therefore, the cheques
issued by the petitioner to discharge the immoral debt created by her son
is not enforceable under law.
15. The doctrine of in pari delicto is clearly applicable in the present
case. The Court should refuse to enforce illegal debt. The complainant,
being a party to the illegal transaction out of which the present dispute
has arisen, cannot encash from her own guilt. He has been equal partners
in the illegal conduct indulged by the son of the petitioner. Ambitious
parents indulging in the illegal methods to secure admission of their
wards to a good college at the cost of meritocracy and fairness in
education, is indeed a crime. Such actions not only deprive deserving
candidates of their rightful opportunities but also foster an environment of
dishonesty and corruption, ultimately harming the future of education and
society at large. Parents must evolve beyond a regressive mind-set that
imposes career choices upon their children, driven by unfulfilled personal
aspirations. While it is natural for parents to dream of a successful future
for their children, such aspirations must be nurtured through ethical
means rather than unlawful shortcuts. Parents must act as facilitators in
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their child's educational and career journey--offering guidance and
motivation while respecting their individuality. They should aid, but not
dictate the decision-making process, support their child's choices, provide
them with the freedom to explore their skills and encourage them to
develop and achieve through merit and perseverance. Upholding these
values will not only ensure fairness in education but also foster a
generation that values integrity, hard work, and self-discovery. The
indulgence of the parent-complainant, who serves in the police
department, in such an act that contradicts the very ethos of society is
highly condemnable. This not only raises questions about the
complainant's own conduct but also necessitates a closer examination of
the transaction in question.
16. Although it is well settled that once a cheque is admitted to have
been signed and issued in favour of the holder, there is a statutory
presumption operates to the effect that it is issued in discharge of a
legally enforceable debt or liability. This presumption being a rebuttable
one, the issuer of the cheque is able to discharge the burden that it was
issued for some other purpose. Therefore, it is inevitable for the petitioner
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to face the trial and rebut the presumption operating against her because it
is admitted case on the part of the petitioner that she indeed has issued the
cheques.
17. The Hon'ble Supreme Court in the case of Rathish Babu
Unnikrishnan vs. The State (Govt. of NCT of Delhi) & Anr., vide
Criminal Appeal Nos.694-695 of 2022 (Arising out of SLP (Crl.)
Nos.5781-5782 of 2020) the Court held thus:
"17. The consequences of scuttling the criminal process at a pre-trial
stage can be grave and irreparable. Quashing proceedings at
preliminary stages will result in finality without the parties having
had an opportunity to adduce evidence and the consequence then is
that the proper forum i.e., the trial court is ousted from weighing the
material evidence. If this is allowed, the accused may be given an
un-merited advantage in the criminal process, also because of the
legal presumption, when the cheque and signature are not disputed
by the appellant, the balance of convenience at this stage is in favour
of the complainant/prosecution, as the accused will have due
opportunity to adduce defence evidence during the trial, to rebut the
presumption.
19. In our assessment, the impugned judgment is rendered by
applying the correct legal principles and the High Court rightly
declined relief to the accused, in the quashing proceeding. Having
said this, to rebut the legal presumption against him, the appellant
must also get a fair opportunity to adduce his evidence in an open
trial by an impartial judge who can dispassionately weigh the
material to reach the truth of the matter. At this point, one might
benefit by recalling the words of Harry Brown, the American author
and investment advisor who so aptly said- "A fair trial is one in
which the rules of evidence are honored, the accused has competent
counsel, and the judge enforce the proper court room procedure- a
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trial in which every assumption can be challenged" we expect no
less and no more for the appellant."
18. It is again well settled principle of law that while exercising the
inherent jurisdiction under Section 482 Cr. P.C., the High Court should
not scuttle the trial in between, particularly when the presumption
operates against the accused person. The accused is to undergo a full trial
and discharge his burden to prove the case otherwise.
19. However, in the fact scenario of the present case, on the basis of
the admitted facts, even if the petitioner is put to trial, in my considered
view, the trial definitely would not result in securing conviction.
Therefore, this case appears to be covered by the judgment of the Hon'ble
Supreme Court in the case of Gian Singh v. State of Punjab and
another, reported in 2012 (10) SCC 303, it would apt to reproduce
relevant part of the judgment: -
"61. The position that emerges from the above discussion can be
summarised thus : the power of the High Court in quashing a criminal
proceeding or FIR or complaint in exercise of its inherent jurisdiction is
distinct and different from the power given to a criminal court for
compounding the offences under Section 320 of the Code. Inherent
power is of wide plenitude with no statutory limitation but it has to be
exercised in accord with the guideline engrafted in such power viz. : (i)
to secure the ends of justice, or (ii) to prevent abuse of the process of
any court. In what cases power to quash the criminal proceeding or
complaint or FIR may be exercised where the offender and the victim
Page 16 of 19
have settled their dispute would depend on the facts and circumstances
of each case and no category can be prescribed. However, before
exercise of such power, the High Court must have due regard to the
nature and gravity of the crime. Heinous and serious offences of mental
depravity or offences like murder, rape, dacoity, etc. cannot be fittingly
quashed even though the victim or victim's family and the offender have
settled the dispute. Such offences are not private in nature and have a
serious impact on society. Similarly, any compromise between the victim
and the offender in relation to the offences under special statutes like the
Prevention of Corruption Act or the offences committed by public
servants while working in that capacity, etc.; cannot provide for any
basis for quashing criminal proceedings involving such offences. But the
criminal cases having overwhelmingly and predominatingly civil flavour
stand on a different footing for the purposes of quashing, particularly
the offences arising from commercial, financial, mercantile, civil,
partnership or such like transactions or the offences arising out of
matrimony relating to dowry, etc. or the family disputes where the
wrong is basically private or personal in nature and the parties have
resolved their entire dispute. In this category of cases, the High Court
may quash the criminal proceedings if in its view, because of the
compromise between the offender and the victim, the possibility of
conviction is remote and bleak and continuation of the criminal case
would put the accused to great oppression and prejudice and extreme
injustice would be caused to him by not quashing the criminal case
despite full and complete settlement and compromise with the victim. In
other words, the High Court must consider whether it would be unfair
or contrary to the interest of justice to continue with the criminal
proceeding or continuation of the criminal proceeding would
tantamount to abuse of process of law despite settlement and
compromise between the victim and the wrongdoer and whether to
secure the ends of justice, it is appropriate that the criminal case is put
to an end and if the answer to the above question(s) is in the affirmative,
the High Court shall be well within its jurisdiction to quash the criminal
proceeding."
20. The aforementioned principle has also been reiterated by the
Hon'ble Supreme Court in many other judgments. Therefore, this Court is
of the opinion that subjecting the petitioner to the rigors of the trial is
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destined to be a futile exercise and will be the abuse of the process of the
court because the cheques were admittedly issued by the present
petitioner towards a debt created by her son by indulging in criminal act.
The complainant herself is also a party to the immoral and illegal
transaction made with the son of the petitioner. The principle of Ex turpi
causa non oritur actio" applies to the fact of this case. No action arises
from an immoral or illegal cause. Therefore, the court will not assist a
party in recovering money if debt arises from illegal or immoral activity.
21. Therefore, the complainant being a party to the immoral transaction
cannot derive the benefit of the same and prosecute the petitioner for the
offence punishable under Section 138 of the N.I. Act. The view expressed
by this Court is only regarding the prosecution initiated by the
complainant under Section 138 of the N.I. Act and the same shall not be
construed as if the expression of opinion regarding the other cases
pending relating to the transaction between the son of the petitioner for
which he is facing the trial or regarding any other offence made out
against the petitioner.
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22. Accordingly, the CRLMC is allowed. The proceeding in ICC Case
No.208 of 2021 U/s.138 of the N.I. Act pending in the court of the
learned S.D.J.M., Bhadrak stands quashed qua the petitioner. The
Opposite Party No.2 is granted liberty to proceed against the petitioner in
accordance with law, if any other offence is made out.
......................
(S.S. Mishra)
Judge
The High Court of Orissa, Cuttack
The 4th of March, 2025/ Subhasis Mohanty, Personal Assistant
Signature Not Verified
Digitally Signed
Signed by: SUBHASIS MOHANTY Page 19 of 19
Designation: Personal Assistant
Reason: Authentication
Location: High Court of Orissa, Cuttack.
Date: 12-Mar-2025 17:06:01
