Dismissed

Wipro Ltd. v. Prasana

Orissa HC20 Mar 2023CRA/412/1994

Case brief

AI extract

What is this about?

This High Court dismissed an appeal filed by Wipro Limited against the acquittal of Prasanna Kumar Baral under Section 138 of the Negotiable Instruments Act. The Court held that the prosecution failed to establish that the cheque was issued for discharge of debt and the trial court correctly acquitted the accused due to lack of evidence and procedural defects.

What did the court decide?

The appeal was dismissed; no order as to costs.

Wipro Ltd. Vs Prasana — Cheque Dishonour | Orissa HC (2023)

¶1

IN THE HIGH COURT OF ORISSA AT CUTTACK

¶2

CRA NO.412 of 1994

¶3

(In the matter of application under Section 378(4) of the Code of Criminal Procedure, 1973.)

¶4

Wipro Limited, Cuttack …. Appellant
-versus-
Prasanna Kumar Baral …. Respondent
For Appellant : Mr. S.K.Rout, Amicus Curiae
For Respondent : Mr. R.C.Ray, Advocate
CORAM:
JUSTICE G. SATAPATHY
DATE OF HEARING :06.03.2023
DATE OF JUDGMENT:20.03.2023

¶5

G. Satapathy, J.

¶6

Instant appeal U/S.378(4) of the Code of Criminal Procedure, 1973 (hereinafter referred to as, ‘Code’ for brevity) by the appellant is directed against the order passed on 23.08.1994 by Sri A.B.S.Naidu, learned

¶7

Page 1 of 20

¶8

CRA No.412 of 1994

¶9

S.D.J.M., Sadar, Cuttack in I.CC Case No. 57 of 1993(Trial Case No. 1722 of 1993) acquitting the respondent of the offence U/S. 138 of NI Act by invoking the provision of Section 255(1) of the Code.

¶10

Facts giving rise to this appeal in precise are the appellant being the Senior Branch Supervisor of the company “Wipro Limited” was the complainant, whereas the respondent being the proprietor of M/S. Premier Agency was the accused in ICC Case No. 57 of 1993 and according to the complainant, the accused used to purchase goods from the Branch Office of the complainant-company and sells the articles so purchased by it to customers. Accordingly, on 01.01.1993, the accused requested the complainant-company to dispatch some stock which was dispatched on the same day vide invoice No. 1013 worth Rs.22,887.45 paise and as against such transaction, the respondent-accused issued a cheque bearing No. 445482 dated 01.01.1993 of

¶11

Page 2 of 20

¶12

CRA No.412 of 1994

¶13

Central Bank of India for an amount of Rs.22,887.45 paise, but when the said cheque was presented by the complainant at State Bank of India, Industrial Estate Branch, Cuttack for collection, the same was dishonoured on 12.02.1993 and returned back to the complainant, who after issuing demand notice on 24.02.1993 which was received by the respondent-accused on 27.02.1993, filed the aforesaid complaint against the respondentaccused for refusing to make payment for the cheque. In support of the case, the complainant got himself examined, besides two other witnesses with documentary evidence vide Ext. 1 to 4 as against no evidence whatsoever by the respondent-accused. Learned trial Court on analysis of evidence on record upon hearing the parties, came to a conclusion that the complainant had not been able to establish the existence of any debt or liability against the respondent-accused and in discharge of such liability, the cheque was issued by the accused.

¶14

CRA No.412 of 1994 Page 3 of 20

¶15

Learned trial Court further disbelieved the service of notice U/S. 138(b) of NI Act against the respondentaccused and by holding so, the learned trial Court acquitted the accused by the impugned order. Hence, this appeal.

¶16

Although this is an appeal against acquittal by the company-Wipro Limited filed in the year 1994, but when none appears for the appellant for three consecutive dates, Mr.S.K.Rout, learned counsel was accordingly appointed as Amicus Curiae for the appellant in the matter. On the other hand, Mr.R.C.Rai, learned counsel and his associates appeared for respondent.

¶17

In the course of hearing of the appeal, Mr.S.K.Rout, learned Amicus Curiae has forcefully submitted that the appellant had complied the provision of Section 138(b) of NI Act in letter and spirit and the service of notice upon the respondent-accused had never been challenged by the defence, but mere denial of

¶18

Page 4 of 20

¶19

CRA No.412 of 1994

¶20

service of notice upon the respondent would not enure to the benefit of the accused. It is further submitted by the learned Amicus Curiae that when the accused had admitted the business transaction between him and the appellant, it could not be considered that the cheque issued by the respondent-accused was not on account of any discharge of debt or liability, but the learned trial Court by ignoring the presumption available in favour of the appellant had mis-appreciated the evidence to hold that the accused had not issued the cheque for discharge of debt or liability and thereby, had erroneously acquitted the respondent-accused. Learned Amicus Curiae has further submitted that in a prosecution U/S. 138 of NI Act, the burden is on the accused to rebut the presumption that the cheque was issued not for discharge of any debt or other liability, but it is very clear from the evidence on record that such presumption was never discharged by the accused and thereby, the learned trial

¶21

CRA No.412 of 1994 Page 5 of 20

¶22

Court had committed gross error in holding the accused not guilty of the offence. In summing up his argument, learned Amicus Curiae has prayed to allow the appeal and reverse the judgment of acquittal by convicting the accused for offence U/S. 138 of NI Act and sentence him to appropriate punishment. In addition to his oral argument, Mr.S.K.Rout, learned Amicus Curiae has also filed a written note of submission along with citations in

¶23

the case of Bir Singh Vrs. Mukesh Kumar; (2019) 74 OCR (SC) 87, Uttam Ram Vrs. Devinder Singh Hudan & another; (2019) 76 OCR (SC) 701 and Kalamani Tex & another Vrs. P.Balasubramanian; (2021) 82 OCR (SC) 150 .

¶24

In resisting the submissions advanced on behalf of appellant and supporting the impugned judgment, Mr.R.C.Ray, learned counsel for the respondent has submitted that the learned trial Court had not committed any error in holding the accused not guilty of the offence

¶25

Page 6 of 20

¶26

CRA No.412 of 1994

¶27

in view of the failure of the complainant to establish the necessary ingredients of Section 138 of NI Act. Accordingly, Mr.R.C.Ray, learned counsel has prayed to dismiss the appeal.

¶28

Admittedly, this is an appeal against acquittal. In case of appeal against acquittal, the proposition as explained by the Apex Court in a plethora of decisions which holds good is that the presumption of innocence is reinforced in case of acquittal of the accused and the finding of the acquittal should not ordinarily be disturbed merely on the ground that another view is possible. A mindful conspectus of the judgment of the learned trial Court in this case would go to disclose that the learned trial Court had acquitted the accused on the ground that complainant was unable to prove that the cheque was issued by the accused for discharge of any pre-existing debt or liability and his failure to comply the Section 138(b) of the NI Act for want of receipt of demand notice

¶29

CRA No.412 of 1994 Page 7 of 20

¶30

by the accused and the advance cheque issued by the accused had been used in this case. In a criminal trial, the burden of proving guilt of the accused always rests upon the prosecution, but in a prosecution U/S. 138 of NI Act, there are two statutory presumptions available to the complainant. Of the two presumptions, Section 118, starts with a phrase that “ until the contrary is proved”

¶31

and proceeds with the mandatory presumptions enumerated therein which includes the presumption under sub-clause(a) to section 118 to the effect that presumption shall be made of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.

¶32

Similarly, Section 139 of NI Act which speaks about presumption in favour of holder of cheque in the

¶33

Page 8 of 20

¶34

CRA No.412 of 1994

¶35

following terms that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. A plain reading of aforesaid statutory presumptions relating to dishonor of cheque makes it ample clear that the complainant has to establish by way of leading evidence that he or she is the holder of cheque and the cheque was issued by the accused, but when the same was presented got dishonored. Once these facts are established by the complainant, the burden turns to the accused to rebut the presumption that the cheque was issued not for any debt or other liability. In other words, once the complainant establishes that the cheque was issued by the accused and the same got dishonored on presentation, the accused has to establish through evidence to rebut the statutory presumption attached for dishonor of cheque, which was issued by him, was issued

¶36

CRA No.412 of 1994 Page 9 of 20

¶37

not for discharge of any debt or other liability. The aforesaid principle as introduced by way of Section 139 of NI Act carves out an exception to general rule as to the burden of proof and shifts the onus on the accused. It, therefore, very clear that the statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument is/are established, the “reverse onus” clauses become operative and in such situation, obligation shifts upon the accused to discharge the presumption imposed upon him. In this context, the presumption of innocence of the accused is, however, neither got diluted nor the statutory presumptions as available in NI Act relieve the prosecution from proving the case against the accused beyond all reasonable doubt, but relax the burden of the prosecution for establishing the offence U/S. 138 of NI Act once it has been able to establish that the cheque in question was issued by the accused to the complainant and accordingly, shifts the onus on the accused to rebut

¶38

Page 10 of 20

¶39

CRA No.412 of 1994

¶40

the presumption that the cheque in question was issued to the complainant not for the discharge of any debt or liability.

¶41

The statutory presumptions as available to the holder of a cheque are certainly rebuttable presumptions and the accused can rebut such presumptions by way of leading independent evidence or by way of eliciting evidence in the cross-examination of the prosecution witnesses on the standard of proof of “preponderance of probability” . Undoubtedly and correctly the learned Amicus Curiae has argued by relying upon the cases Bir Singh, Uttam Ram and Kalamani Tex (supra) that the learned trial Court had erroneously placed the burden on the complainant to establish inter-alia that the cheque was issued by the accused towards discharge of debt or liability ignoring the principle that the complainant has only the duty to establish that accused had issued the cheque which was dishonored on presentation. It may so

¶42

CRA No.412 of 1994 Page 11 of 20

¶43

happen, sometimes that the ultimate conclusion would be correct, but the principle through which conclusion arrived at might have been incorrect. It is, therefore, made clear to examine whether the accused had discharged such presumption as available against him for issuing the cheque in this case which got dishonored inasmuch as the issuance of cheque by the accused had never been disputed or denied by the accused, rather plea was taken by him to might have issued in advance. In assessing and evaluating the evidence, it appears that P.W.1 who was the Branch Supervisor of the Company had admitted in cross-examination that they used to maintain the accounts with respect to the business transaction of the accused in the office and the persons to

¶44

whom they supply goods used to grant receipt in token of taking delivery and they have not filed any document in respect of supply of goods to the accused and there was no written agreement with respect to mode of settlement

¶45

Page 12 of 20

¶46

CRA No.412 of 1994

¶47

of their account with the accused. P.W.2, the Area Sales Officer of the Company, had only reiterated about claim of the Company. It is stated by P.W.1 that the accused had come to their Office and placed orders for supply of Wipro products worth of Rs.22,887.45 paise and they delivered the goods to the accused according to the orders placed by him. Although, P.Ws.1 and 2 had stated about issuance of cheque by the accused and dishonor of same on presentation, but no document had been filed on behalf of the Company to show that the accused either had placed order for supply of goods or had he received any goods, no matter there was practice of retaining grant of receipt in token of delivery of goods from the side of the Company. It is also admitted by P.W.1 that they had not filed any document in respect of supply of goods to the accused, although it was claimed in the complaint that the stocks were dispatched vide Invoice No.1013 for Rs.22,887.45 paise, but no such invoice was

¶48

CRA No.412 of 1994 Page 13 of 20

¶49

even produced in this case. On the other hand, the accused had taken a stand/plea of not receiving any goods worth Rs.22,887.45 paise for which he issued cheque. P.W.1 had further admitted in cross-examination that he cannot say as to why the accused used the rubber

¶50

stamp of their firm in the cheque under Ext.1 instead of writing the name of the firm in ink and he cannot say who signed on Ext.4 which was the postal A.D. For business transaction between the Company and the firm as in this case, there must be documentation in support of business transaction. In this case, when it is claimed by the complainant that the accused was its stockiest and it had placed orders, but no document was ever produced by the complainant nor was any document produced before

¶51

the Court about receipt of goods by the accused or supply of goods by the complainant. Merely stating that accused had placed some orders and issued cheque towards supply of goods would not be sufficient to establish that

¶52

Page 14 of 20

¶53

CRA No.412 of 1994

¶54

the order for goods was either placed by the accused or the same was received by it and once such claim was found not established, it would give to a reasonable and probable grounds to believe about issuance of cheque not towards discharge of any debt or liability.

¶55

In view of the aforesaid analysis of evidence, there would be hardly any doubt in the mind of the Court about rebuttal of presumptions by the accused on the standard of preponderance of probability to the effect that the cheque issued by the accused was found to have not been established to have been issued for discharge of any debt or liability and, thereby, the presumption U/S.139 of N.I. Act stands discharged by the accused.

¶56

A careful appreciation of documentary evidence on record would go to reveal that the cheque was stated to be issued by the proprietor for M/S. Premier Agency and the demand notice had only been issued against M/S. Premier Agency, but while instituting complaint, the name

¶57

CRA No.412 of 1994 Page 15 of 20

¶58

of Prasanna Kumar Baral had been described as accused in the cause title, but ultimately, no demand notice was ever issued against said Prasanna Kumar Baral in individual capacity and the learned trial Court had also held by appreciating the evidence on record that notice U/S.138(b) of N.I. Act had not been served upon the accused. On the contrary, M/S. Premier Agency had not been made as an accused, although Mr.Prasanna Kumar Baral had been described as an accused in the complaint being the proprietor of M/S. Premier Agency. Section 141 of N.I. Act mandates that if the person committing an offence U/S.138 of N.I. Act is a Company, every persons who, at the time of offence was committed, was incharge of, and was responsible to the Company for the conduct of business of the Company, as well as the Company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against. It is made clear in the explanation to the section, for the purpose of this

¶59

Page 16 of 20

¶60

CRA No.412 of 1994

¶61

section, Company includes a firm or other association of individuals. In the fitness of the things and the circumstance of the case, when the demand notice was only addressed to M/S. Premier Agency, how come a prosecution would lie against Mr. Prasanna Kumar Baral as a proprietor of such firm and more fully, when cheque

¶62

was issued by proprietor for M/S. Premier Agency. Admittedly, there is hardly any averment either in the complaint or in the demand notice that Mr. Prasanna Kumar Baral was responsible for the conduct of business of M/S. Premier Agency nor M/S. Premier Agency had been separately made as an accused, but Section 141 of N.I. Act makes it obligatory to implead the Company/firm

¶63

or other association of individuals to be responsible for commission of offence. In addition, the learned trial Court on appreciation of evidence had also come to a conclusion that notice U/S.138(b) of N.I. Act had not been served upon the accused, which by itself is a incurable defect

¶64

CRA No.412 of 1994 Page 17 of 20

¶65

and in a situation like in this case, it only adds to the failure of prosecution to establish the guilt of the accused by means of beyond all reasonable doubt.

¶66

In National Small Industries Corporation Limited Vrs. Harmeet Singh Paintal; (2010) 3 SCC

¶67

330 the Apex Court at paragraph-39 has laid down the

¶68

principle as follows:-

¶69

“(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of offence, were in charge of and were responsible for the conduct of the business of the company.

¶70

(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously

¶71

Page 18 of 20

¶72

CRA No.412 of 1994

¶73

liable for the offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.

¶74

(iv)Vicarious liability on the part of a person must be pleaded and proved and not inferred.

¶75

(v)If accused is Managing Director or Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.

¶76

(vi) If accused is a Director or an Officer of a Company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in complaint.

¶77

(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases.”

¶78

In view of the discussions made hereinabove

¶79

upon the reappraisal of evidence on record and taking into consideration the ultimate conclusion arrived at by the learned trial Court acquitting the respondent suffering

¶80

CRA No.412 of 1994 Page 19 of 20

¶81

from no illegality or perversity so as to warrant any interference, the acquittal of the respondent-accused being not contrary to law and facts is hereby affirmed.

¶82

In the result, the appeal is dismissed on contest, but in the circumstance, there is no order as to

¶83

costs.

¶84

(G. Satapathy)
Judge

¶85

Orissa High Court, Cuttack, Dated the 20^th day of March, 2023/Kishore

¶86

Page 20 of 20

¶87

CRA No.412 of 1994

Wipro Ltd. v. Prasana

Case brief

What is this about?

What did the court decide?

Wipro Ltd. v. Prasana

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Debendra Prasad Dev Vs State of Orissa

Gajanan Meher Vs State of Odisha

Sashi Muna Vs State of Odisha

Anil Kumar Sahoo Vs State of Orissa

Prafulla Ku.Singh Vs State of Orissa

Babi Panda Vs State of Orissa