Dismissed

Umesh Kumar Jagani v. Govind Prasad Tiwari

Madras HC8 Nov 2018CRL A/157/2010

Case brief

AI extract

What is this about?

This criminal appeal against a conviction under Section 138 NI Act was filed by a complainant challenging an acquittal. The High Court found the appellant failed to rebut the presumption of legal debt because the first accused admitted signatures and cheques without producing contrary evidence. However, due to the complainant filing multiple cases for a single transaction and failing to produce in

What did the court decide?

The appeal was dismissed, the order of acquittal passed by the Additional Sessions Court was confirmed, and the respondent/appellant was set free of the charges under Section 138 of the Negotiable Ins

Umesh Kumar Jagani Vs Govind Prasad Tiwari — Cheque Dishonour | Madras HC (2018)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

CAV.DT.23.07.2018

08.11.2018

CORAM

THE HONOURABLE MR. JUSTICE R.PONGIAPPAN

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Crl.A.No.157 of 2010

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Umesh Kumar Jagani, Proprietor of M/s.Umesh Industrial Services, No.24, Sembudoss Street, II Floor, Chennai – 600 001. ..Appellant/Respondent/ Complainant

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versus

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Govind Prasad Tiwari, S/o.Srinivas Tiwari, 152, Mint Street, Chennai – 600 079. ..Respondent/Appellant/ Accused

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Prayer:

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Criminal Appeal filed under Section 378 of the Code of Criminal Procedure, to set aside the judgment and decree dated 21.11.2009 passed in Crl.A.No.194 of 2008 on the file of the learned VI Additional Sessions Court, City Sessions Court Chennai, in reversing the judgment dated 08.04.2008 passed in C.C.No.11995 of 2003 on the file of the learned XV Metropolitan Magistrate, George Town, Chennai, by allowing the present Criminal Appeal.

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This Criminal Appeal is directed against the judgment rendered by the learned VI Additional Sessions Court, Chennai, in Crl.A.No.194 of 2008 dated 21.11.2009, wherein, he allowed the appeal filed by the respondent and set aside the conviction and sentence passed by the learned XV Metropolitan Magistrate, George Town, Chennai in C.C.No.11995 of 2013 dated 08.04.2008.

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For the sake of convenience, hereinafter, the appellant is called as “complainant” and the respondent is called as “accused”.

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The case of the appellant / complainant in the Trial Court, is as follows: The complainant Umesh Kumar Jagani is the Proprietor of Umesh Industrial Services and doing the business of selling iron and steel materials. The accused Govind Prasad Tiwari is the Proprietor of Balajee Steel Enterprises, and running another one concern in the name and style of “M/s.Steelex Impex (India) Ltd.”. On the request made by the accused, the complainant supplied the iron materials for a sum of Rs.1,11,83,417/- for the period from 23.03.2001 to 26.05.2001. The said iron materials are supplied to M/s.Steelex Impex (India) Ltd., for which, the accused stood as a Guarantor.

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After acknowledging the dues, the accused issued 8 cheques, which are as follows:

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Sl.No	. Cheque No.	Date	Amount (Rs.)
1.	268185	24.10.2002	19,37,647.00
2.	268186	27.10.2002	20,47,549.00
3.	268187	30.10.2002	12,50,817.50
4.	268188	01.11.2002	24,56,925.00
5.	268189	06.11.2002	25,29,297.00
6.	268190	09.11.2002	23,14,678.00
7.	268192	12.11.2002	14,31,113.00
8.	268191	12.11.2002	2,30,629.00
			1,41,98,655.50

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On 23.04.2003, the complainant presented the above cheques for collection in his Banker, namely, Bank of Maharashtra Branch, Chennai, but the said cheques have been returned as unpaid on 24.04.2003 with an endorsement “Insufficient funds”. Subsequently, on 06.05.2003, the complainant issued a statutory notice, in which, he demanded the accused to pay the entire due, but the said notice was returned to the complainant for the reason “door locked”. Thus, the complainant lodged a private complaint for punishing the accused under Section 138 of the Negotiable Instruments Act, 1881 [hereinafter referred to as “N.I.Act”].

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Before the trial Court, after taking cognizance, the learned Magistrate issued summons to the accused, and on appearance, he was questioned with regard to the allegations levelled against him, for which, he denied the same as false.

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Before the trial Court, the complainant examined himself as P.W.1 and marked 8 documents as P.W.1 to P.W.8, the letter dated 19.02.2001 and the acknowledgment given by the accused dated 01.04.2002, in the same way, another one letter executed by the accused dated 19.04.2002, are all marked as Ex.P.1 to Ex.P.3. As per the above documents, the accused admitted the liability of M/s.Steelex Impex (India) Ltd, further, he acknowledged for standing as a Guarantor for a sum of Rs.1,02,22,234/-. In the trial Court, P.W.1 has produced 8 cheques as Ex.P.4 series and the dishonour memo issued by the Bank as Ex.P.5. Further on the side of the complainant, debit advice issued by the bank, statutory notice and the returned notice are marked as Ex.P.6 to Ex.P.8 respectively.

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The learned trial Judge with relevant to the incriminating materials available in the evidence of P.W.1 examined the accused under Section 313 Cr.P.C., for which, the accused denied the same as false. However, on the side of the accused, he did not choose to examine any witnesses nor did he mark any documents.

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After concluding the trial, the learned XV Metropolitan Magistrate came to the conclusion that, the accused is found guilty for the offence under Section 138 of N.I. Act, convicted and sentenced him to undergo 2 years simple imprisonment and also to pay a fine of Rs.1.5 crores as compensation to be paid to the complainant within a period 6 months. Aggrieved over the judgment rendered by the learned Magistrate, the respondent/accused prepared an appeal before the learned VI Additional Sessions Judge, Chennai in Crl.A.No.194 of 2008. After elaborate enquiry, the learned VI Additional Sessions Judge, allowed the appeal and set aside the conviction and sentence passed against the accused. Challenging the same, the complainant is before this Court with the present appeal praying to set aside the judgment of VI Additional Sessions Judge and for restoring the conviction and sentence.

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Heard Mr.S.Saravana Kumar, learned counsel appearing for the appellant, Mr.S.Ashok Kumar, learned counsel appearing for the respondent and also perused the material documents available on record.

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Now on going through the judgment rendered by the First Appellate Court, the learned Sessions Judge, doubted about the Ex.P.4 [8 cheques] and Ex.P.5 [returned memo], further, he doubted about the genuineness of the cheques and thereafter, allowed the appeal. In the trial court, the cheques pertaining to the case have been marked as Ex.P.4 and memos issued by the Bank authorities have been marked as Ex.P.5. It is true, the memos issued by the Bank authorities have not been exhibited

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through the Bank Manager. However as per the contents of Ex.P.2 and Ex.P.3, the accused admitted the signature found in the cheques, further in the cross examination of P.W.1, on the side of the accused, he not at all disputed the genuineness of Ex.P.4 and Ex.P.5. In the said circumstances, the learned First Appellate Court suo motu took the said aspect and allowed the appeal, which is purely erroneous in law.

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In otherwise, in the trial Court, in no area the accused disputed the signature found in the cheques. In the said situation, it is relevant to see the judgment of our Honourable Apex Court in RANGAPPA vs. SRI MOHAN reported in (2010) 11 SCC 441 wherein, it has observed as follows :

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“The High Court in its order noted that in the course of the trial proceedings, the accused had admitted that the signature on the impugned cheque (No. 0886322 dated 8-22001) was indeed his own. Once this fact has been acknowledged, Section 139 of the Act mandates a presumption that the cheque pertained to a legally enforceable debt or liability. This presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence.”

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Furthermore, in the same judgment, our Honourable Apex Court has held as follows:

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“The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent complainant.”

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Accordingly, in order to rebut the presumption, the duty is cast upon the accused to raise a probable defence and create a suspicious circumstances over the case of complainant.

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In order to rebut the presumption, on the side of the accused, no material was produced to show that the cheques now under dispute were issued for other purpose, even the accused has not been entered into the witness box and stated his

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case. In fact, there is no compulsion to the accused for entering into the box, it is enough that to create a suspicious circumstances through the evidences and the materials produced on the side of the complainant.

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In the trial court, during the time of cross examination, the accused placed his case, as there are 3 cases have been filed by the complainant for a single transaction. Further, it is the contention of the accused, before the lower Court that the documents now produced by the complainant are all forged one. In the written argument submitted by the accused he has mentioned as per the acknowledgment letter received by the accused, he gave only 3 cheques, but P.W.1 presented 8 cheques for enhancement. Further, he submitted the total liability as per the Ex.P.3 is Rs.1,25,36,913/- but the total cheque amount in the above case is Rs.1,41,98,655.50/-. Accordingly, he argued that the complainant has approached the trial Court after suppressing the real fact. Further, he made a submission that all the cheques under dispute are obtained by the complainant as security.

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Even though the said submission may be in favour of the accused at no point of time in the cross examination of P.W.1, he did not dispute the contradiction available in the number of cheques as well as the difference of amount arrived in Ex.P.3 and P.4, therefore, without any pleadings now praying as above, is immaterial to decide the case in favour of the accused.

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Secondly, in order to rebut the presumption raised under Section 139 N.I.Act, the learned counsel appearing for the accused would contend that as per the evidence given by P.W.1, the iron materials were supplied to the accused through the invoices but in order to prove the same, the copy of the invoices have not been marked. Further, it was the contention on the side of the accused for a single liability the complainant foisted three cases against the accused, which shows the cheques now under dispute are not issued to discharge the liability.

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On considering the rival submissions made on either side, it is relevant to see the judgment of our Honourable Apex Court in M.S.NARAYANA MENON @ MANI vs. STATE OF KERALA reported in (2006) 6 SCC 39, in which, it has held as follows: “The definite case of the second respondent was that the cheque dated 17-8-1992 was issued by the appellant in discharge of his debt. The said liability by way of debt arose in terms of the transactions. Two adverse inferences in the instant case are liable to be drawn against the second

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respondent i.e. (i) he deliberately has not produced his books of accounts, and (ii) he had not been maintaining the statutory books of accounts, and other registers in terms of the Stock Exchange bye-laws. In Kundan Lal Rallaram, AIR 1961 SC 1316 it was held that if a relevant evidence is withheld, the court may draw a presumption to the effect that if the same was produced, it might have gone unfavourable to the plaintiff. Such a presumption was itself held to be sufficient to rebut the presumption arising under Section 118 of the NI Act.”

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Following the principles laid down by our Honourable Apex Court, in this case also the complainant has not produced his books of accounts, further for non-production of the said documents, he has not offered any proper explanation before the trial Court, so there could be the possible reason for rebutting the presumption raised under Section 139 of N.I.Act.

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Secondly, on going through the evidence of P.W.1 in his cross examination, he has stated as follows: “ehd; vjphpf;F ehd; ,Uk;g[ kw;Wk; !;Obk;l;oya;y; rg;isbra;njd; vjphpapd; rp!;lh; fd;rh;d; !;Oyf;!; ,z;lf;!; ,e;jpah vd;w epWtdj;jpw;F rg;is bra;njd;/ vjphp ghyh$p !;Oy; vz;lh;gpiurpd; chpikahsh; Mthh;/ !;Oyf;!; ,z;lf;!; jpndZFkhh; vd;gth; chpikahsh; Mthh;/ Vw;fdnt jpndZFkhh; kprh;uh kPJ tHf;F jhf;fy; bra;jpUf;fpnwd;/ mjd; tHf;F vz; 11994/2003 vd;w Fw;wKiwaPl;il jpndZFkhh; kpruh kPJ jhf;fy; bra;Js;nsd;/ mjpy; 1/25 nfhof;F cz;lhd fhnrhiyf;fhf 11994/03 vd;w tHf;fpy; jhf;fy; bra;ag;gl;Ls;sJ/ ehd; ,Uk;g[ !;Oy; rg;isbra;jjw;fhd 32 gpy;fs; kw;Wk; ,d;th!;fs; ,e;j tHf;fpy; jhf;fy; bra;Js;nsd;/ 32 ,d;th!;fSk; !;Oyf; ,z;lf;!; ,e;jpah bgahpy; jhd; vGjg;gl;oUf;fpwJ/ !;Oyf; ,z;lf;!; ,e;jpah epWtdKk; ghyh$p vz;lh;gpiur; epWtdKk; xnu fl;oj;jpy; jhd; cs;sJ/ nfhtpe;jgpurh;j jpthhp vd;gth; vy;yh Mtz';fspYk; ifbaGj;jpl;oUf;fpwhh;/ jpndZFkhh; kpruhtpw;F vjpuhf kj;jpa

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Fw;wgphptpy; g[fhh; bfhLj;jpUf;fpnwd;/ nfhtpe;jgpurhj; jpthhp kPJk; kj;jpa Fw;wg;gphptpy; g[fhh; bfhLj;jpf;fpnwd;/ mjd; nghpy; 801/2002 vd;W tHf;F gjpt[ bra;jpUf;fpwJ/ nfhtpe;gpurhj; jpthhp bt';fnl Z gpurhj;. te;jdh njtp jpthhp. bt';fnl Z jpthhp. rPdpthrh jpthhp ghyh$p !;Oy; vz;lh;gpiurh!; kfhyl;Rkp !;Of;y. _ te;jdh nghd;w

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1. epWtd';fs; j';fs; FLk;g epWtd; vd;W Twp tpaghuk; bra;J tUfpwhh;fs;/ ehd; mth;fSf;F !;Oy; rg;is bra;tjhy; mth;fs; bgah;fis ,e;j tHf;fpy; nrh;j;jpUf;fpnwd;/ kj;jpa Fw;wgphptpy; jhf;fy; bra;Js;s Mtz';fs; ,e;j tHf;fpy; jhf;fy;

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bra;atpy;iy/ kj;jpaFw;wg;gphptpy; vd;d Mtz';fs; nfl;lhh;fnsh

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me;j Mtz';fs; jhf;fy; bra;jpUf;fpnwd;/ ,e;j tHf;fpy; nfl;l

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Mtz';fs; jhf;fy; bra;jpUf;fpnwd;/ ”

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Now on going through the close scrutiny of the evidence given by the P.W.1 for claiming Rs.1.25 crores except this case he had filed two other cases that shows he attempted to get unlawful enrichment. Since for the same debt, the complainant filed two cases, we cannot came to the conclusion that the cheques now produced by the complainant in this case were issued in order to discharge the liability. Therefore, the admission of the P.W.1 itself shows that he misused the provisions available in the N.I.Act. Now on going through the Section 138 N.I.Act, which reads as follows:

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“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

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amount of the cheque, or with both:

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Provided that nothing contained in this section shall apply unless—

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(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;

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(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

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(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.”

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Accordingly, in order to prove Section 138 N.I. Act, it must be proved that the cheques had been issued in order to discharge the debt or liability, but in this case we cannot came to the conclusion that the present cheques produced in this case had been issued by the accused for the specific liability. Even though the First Appellate Court did not consider those aspects, it is necessary to decide the said aspect also for rendering the real justice.

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In the light of the above discussions, I am of the considered view that the respondent/accused is not found guilty for the offence under Section 138 of N.I. Act and the Appeal filed by the appellant/complainant deserves no merits and accordingly, the same is dismissed. The order of acquittal dated 21.11.2009 passed by the learned VI Additional Sessions Court, Chennai, in Crl.A.No.194 of 2008 is hereby confirmed.

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Sub Assistant Registrar

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sri

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