Dismissed

M/S Rajashree Cement v. S B Agrawal and Ors.

Bombay HC11 Feb 2014APPLN/17/2006

Case brief

AI extract

What is this about?

In a criminal application under Section 138 NI Act, the High Court refused leave to appeal an acquittal order. The court held that doubts regarding service of notice and lack of clear evidence on the principal liability amounted to reasonable doubt, making an appeal futile.

What did the court decide?

Leave to appeal against the order of acquittal refused; application rejected.

M/S Rajashree Cement Vs S B Agrawal and Ors. — Cheque Dishonour | Bombay HC (2014)

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(1)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, AURANGABAD BENCH, AT AURANGABAD.

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Criminal Application No. 17 of 2006

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M/s. Rajashree Cement, Unit of Indian Rayon and Industries Ltd., Through its authorized G.P.A., Shri Bhagwandas Deendayal Agarwal, Age : 55 years, Occupation : Manager, R/o. At Post : Pune, .. Applicant Dhole Patil Road. (Original complainant)

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versus

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Shri S.B. Agarwal, Director, Piyush Agro Inputs Marketing Pvt. Ltd., 15, Agrawal Plaza, Near St. Francis High School, Opp. Yashodeep Hotel, Jalna Road, Aurangabad.

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Piyush Agro Inputs Marketing Pvt. Ltd., Address as above.

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The State of Maharashtra (formal party)

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.. Respondents (Nos.1 and 2 - Original accused)

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Mr. Vijay Sharma, Advocate, holding for Mr. C.P. Sengaonkar, Advocate, for the applicant.

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Mr. D.S. Bharuka, Advocate, for the respondent nos.1 and 2.

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(2)

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Mr. P.P. More, Additional Public Prosecutor, for the respondent no.3.

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CORAM : ABHAY M. THIPSAY, J.

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DATE : 11TH FEBRUARY 2014

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P.C. :

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Heard Mr. Vijay Sharma, the learned Counsel holding for Mr. C.P. Sengaonkar, the learned Counsel for the applicant. Heard Mr. D.S. Bharuka, the learned Counsel for the respondent nos.1 and 2. Heard Mr. P.P. More, the learned Additional Public Prosecutor for the respondent no. 3.

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The applicant is the original complainant in Summary Criminal Case No. 194/1999. The respondent nos.1 and 2 herein were the accused nos.1 and 2, respectively, in the said case. The case related to an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The learned Judicial Magistrate (First Class), Aurangabad, after holding a trial, found the respondent nos.1 and 2 herein (hereinafter referred to as "the accused" ) not guilty and passed an order of acquittal. The applicant being aggrieved by the said order of acquittal, is, by the present Application, seeking leave to appeal from the judgment and order passed by the learned Magistrate.

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The Application for leave to appeal against the said order of

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(3)

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acquittal is pending since the year 2006. Though leave has not been granted, notices have been issued to the respondents and even the record and proceedings have been called for.

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With the assistance of the learned Counsel for the parties, I have carefully gone through the impugned judgment. I have also gone through the relevant record.

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The case of the applicant (hereinafter referred to as "the complainant" ), as made out in the complaint, was, in brief, that the complainant was dealing in the business of manufacturing of cement. That, the complainant was a unit of Indian Rayon and Industries Limited. That, the accused were the dealers of the product of the complainant since 1-12-1995. That, the accused had been supplied with cement by the complainant from time to time and they had paid to the complainant against the supply of cement. That, however, an amount of Rs. 7,65,830/was outstanding towards the price of cement supplied. That, as per the agreement between the parties and as per the business ethics, interest at the rate of 24 % per annum on the outstanding amount was leviable. That, the accused had acknowledged the dues by putting signature on a confirmation letter dated 6-7-1998. That, on 31-12-1998, an amount of Rs. 9,71,583/was outstanding with the accused persons and towards the repayment thereof, a cheque was issued by the accused persons in the sum of Rs. 9,71,583/- That, the said cheque was dishonoured and that, since even after the receipt of a demand notice, the amount of the cheque was not paid, the accused were prosecuted.

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(4)

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A number of contentions were raised before the learned Magistrate and the same have been carefully dealt with by the learned Magistrate in the impugned judgment.

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The first issue was whether any demand notice had been properly served. It was not in dispute that the postal envelope containing notice was returned with an endorsement that, ‘intimated, but refused’. The learned Magistrate, on considering the evidence in that regard, came to the conclusion that the service of the demand notice was not properly proved. The relevant discussion finds place in paras 9, 10, 11 and 12 of the impugned judgment. There was a doubt that the notice had not been sent to the correct address and this doubt felt by the Magistrate cannot be said to be unjustified. Further, the evidence was to the effect that an employee of the complainant was present along with the postman, when the postman had gone to deliver the packet containing the notice, to the accused persons. The propriety of keeping an officer of the complainant present along with the postman was doubted by the learned Magistrate. Moreover, the very nature of endorsement made by the postman was thought to be inconsistent by the Magistrate. The endorsement suggests two inconsistent things, namely, ‘given intimation but refused to accept’. The question of giving intimation would generally arise when the addressee would not be present before the postman and delivery could not be given. But the question of ‘refusing’ would arise when the addressee would be very much present in front of postman. The view of the Magistrate that, this needed clarification, which could be obtained by examining postman, which was not done, is correct. When this aspect of the matter is considered along with the fact that an officer of the

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(5)

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complainant had accompanied the postman when the postman is said to have gone for delivering the packet containing the demand notice, the doubt felt by the Magistrate about the demand notice having been served upon the accused, cannot be said to be improper or unjustified.

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Mr. Sharma, the learned Counsel for the applicant, submitted that the complainant had made repeated applications for examining the postman as a witness and though summons were ordered to be issued to the postman, he could not be examined. According to Mr. Sharma, the complainant cannot be faulted for that reason. In my opinion, the question is not whether the complainant deliberately did not examine the postman, but whether clarification by the postman was necessary on the face of the endorsement. The answer to this question must be in the affirmative. The next question would be whether such clarification was available to the court. Since the answer to this question is in the negative, as aforesaid, the doubt entertained by the Magistrate on the aspect of service of notice cannot be said to be unreasonable.

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The actual complaint had been filed by one Shri B.D. Agrawal, who claimed to be a constituted attorney of M/s. Rajashree Cement - described as a unit of Indian Rayon and Industries Limited. In the evidence, it transpired that there was no authority or resolution in favour of said Shri B.D. Agrawal given or passed by the complainant / Company - or its Division. When Shri Agrawal was examined as a witness, he claimed the source of his authority, to be in his authorization by one Kailaschand Birla, who himself was a constituted attorney of the Company - Indian Rayon and Industries Limited. The learned Magistrate

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(6)

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observed that the power of attorney holder could not authorize another to file a complaint and such sort of delegation of power was not permissible. This view of the Magistrate is also proper and legal.

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There is also another interesting aspect of the matter which was properly appreciated by the learned Magistrate. Without going into a deeper discussion and assuming that the accused persons had admitted some liability towards the complainant, that liability was, at best, to the extent of Rs. 7,65,830/-. The cheque amount was much more i.e. Rs. 9,71,583/-. The claim of the complainant was that, it was because the amount of interest was included therein. However, what was the agreed amount of interest, is not at all clear and how the interest was calculated or arrived at, is also not clear.

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In my opinion, in a case like this, the complainant would be obliged to show that the liability in discharge of which the cheque is purportedly issued, was covering the entire amount of the cheque. In other words, it ought to have been shown, by some evidence, that the accused were liable to pay, on the given date, an amount of Rs. 9,71,583/- or more to the complainant. This has not been done and the liability is sought to be established by claiming the same to be inclusive of interest, but the terms on which interest was agreed to be charged, were not brought on record. The so called ‘business ethics’ cannot be brought into picture to arrive at a proper figure in that regard. This is apart from the fact that the Magistrate's view that, the accused had admitted liability only to the extent of Rs. 2,44,881/- and not to the extent of Rs. 7,65,830/-, is also a possible view, of the evidence that was adduced before him in that regard.

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(7)

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On a careful reading of the impugned judgment, the doubt felt by the Magistrate, about the truth of the complainant's version, appears to be proper and justified. The Magistrate's conclusion that, the case against the accused persons had not proved beyond reasonable doubt, appears to be proper and legal.

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It is well settled that, while considering grant of leave to file appeal against an order of acquittal, the principles governing the appreciation of evidence in appeal against acquittals are required to be kept in mind. It is well settled that, even if two views of the evidence adduced during trial are possible and the trial court has selected one of them, the appellate court would not interfere with such a view, even if, had it itself been the trial court, it might have taken the other view.

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Considering all the relevant aspects of the matter, this does not seem to be a case where the finding of acquittal is likely to be altered, even if leave is granted. Therefore, grant of leave to appeal would be futile.

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Leave refused.

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15. Application is rejected.

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( ABHAY M. THIPSAY ) JUDGE

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bgp/CrA17.06

M/S Rajashree Cement v. S B Agrawal and Ors.

Case brief

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What did the court decide?

M/S Rajashree Cement v. S B Agrawal and Ors.

Case brief

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