Dismissed

M/s. Visaka Industries Ltd., a Company regd under India v. State of a.P., through its Public Prosecutor

Telangana HC4 Jul 2023CRLA/1077/2008

Case brief

AI extract

What is this about?

In this criminal appeal challenging an acquittal, the High Court held that the prosecution failed to prove an outstanding debt. Citing Supreme Court precedents on the burden of proof regarding blank cheques and appellate caution, the Court found no valid reasons to reverse the acquittal and dismissed the appeal.

What did the court decide?

The criminal appeal is dismissed; the order of acquittal stands affirmed.

M/s. Visaka Industries Ltd., a Company regd under India… — Cheque Dishonour | Telangana HC (2023)

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[³²⁵¹ ]

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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TUESDAY ,THE FOURTH DAY OF JULY TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SRI JUSTICE K.SURENDER

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CRIMINA L APPEAL NO: 1 077 0F 2008

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Appeal filed under Section 37g(4) of Cr.p.C., aggrieved by the Orders dated 24.o1 Metropolitan Sessions 2007 passed in criminar Jud.ge eppeai (Mahira tto. corrtt +oi oizo6E ,i -H-y-o-eraoao on the fire of preferred aoainst the v Additionarthe Judsment dated 28 'r'r 2005 passed in cc.N;. il;-"irooi";li"iir""ri',iL'ir Additionat Chief Metropotitan Magistrate. S".rnOlilOro

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Between:

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M/s. Visaka lndustries Ltd_ 51-g"ffi$,5riu+;,i#d;tff^iirfrdtlfl

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AND

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...PETITIONER/RESPONDENT . 1

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State of A.p., through its public prosecutor, High Court of A.p., Hyderabad 2. M/s. Fatima Traders reo by. proprietor Sri S.F. lbrahim, Situated in premises B. No. 70 M. H. Road, uooi6rbo:5i, cr,',L;nllobo, 6riil ",

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S.F.lbrahim, S/o. S.F.Far x"tnirsi^{ji,il"rj;;d;8""?"t';,:l?E;Jl,iJ,.esffi} !1.1r_?xrr:,1,::!"rr,f^, voC 1st Cross streetl Nerriunaga;, cni.rli6ibiii.

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...RESPONDENTS

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Counsel for the Appellant : Sri p. SURYA NARAYANA MURTHY

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Counsel for the Respondent No.i : pUBLIC PROSECUTOR

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Counsel for the Respondent Nos. 2 & 3 : Sri N. RAGHAVAN

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The Gourt delivered the following: JUDGMENT

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H'ON'BLE SRI JUSTICE K.STIREND.DR

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CRIMINAL APPEAL No,1077 OF irOC8

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JUDGMDNT:

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l'irt' E)r( s('nt appeal is frled b-v thc rplr(l lilirt/'com plainant aggrieve:cL [-,\ tl-re acquitial rc'corcicd tr r,ire V Aclditional 1n Metropolrtarr Sessions Judge. (Maliila Cotrrl) Hyderabad, Crl.A.No. 1g'z I 2006, dt.2.+.01 .2007 , reversir-rg rhe conviction recordecl L,r' the XI Acldl Clhief Mctr opolitz n Magistrate, Securrderarbacl in CC.No.8 +512OO2, dt.2B.l .20C5 lir- the offence under Sc( tron^l ,l8 of thc Negotie,tiric Instrumt'nts ltt ,

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Heard. l)r nrsed the record

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The cor-n1,lirinant comp€1n.' filed casc untlt:t :it-'ction i38 of the Negotiable Inst-ruments Act before the r'oncerned Magistrate alleging that th : accused firm an<:l the Propri,.'tor^{tvt:re purchasing} asbestos shet:tr lrom the complainant compz nv an,.l used to^give post dated che ques on behalf of^{'Patween'lraclt} r,;'. Previously, some of thc^,:l'r l(lues were being l-ronoured rmd tlir,,honored and subsequent.ll' el rrunts tere being paid on detna.rrd. The said business wi.rs bc ing run lrom the vear 1997

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In tlxr^yi:z r 200 1 according to PWl^{who rr:p,p656nted} the Companv c epc,s rcl lhat thc accuscd^{firm rcqttcstcd} to^supply

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material and thereaftcr lssLled chequcs^{tou'ards the pavmenl of} the received goods- The said^{cheques q,hen presentedfor} clearance were returrred unpaid for the^reason of^{payment stopped} by drawer. Four separate cases were filed in respect of^those cheques i.e.

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i) C.C.No.844 l2OO2 is filed in respect of three cheques i.e. cheques bearing Nos.0688O 1, dL.2O.O2.2OO2, 068804, dt.2o.O2.2OO2^and 066576, dt. 12.10.200 1 for Rs.3,99,535.50, Rs.2,98,951/- and Rs. 1,O0,00O/- respectively.

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ii) CC.No.845/2002 is filed in respect of cheque bearing

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No.068803, dt. 18.02.002 for Rs.4,98,975.5O.

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iii) C.C.No.a46l2OO2 is filed in respect of cheque bearing No.06324 I dt.l6.O2.2OO2 for Rs.1,45,447 /-.

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iv) CC.No.a47 l2OO2 is filed in respect of cheque bearing No.45509, dt. 18.02.2002 for Rs.6,28,109.88.

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The learned Magistrate having found that there was an enforceable debt on the cheques issue, convicted the accused ltrm and the Proprietor for the offence under Section 138 of the Negotiable Instruments Act.

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Tltr:.1:r: Lsccl prclerrcrl altpcal ltcfbi-c titc- Scs:,irir:s Jrrclge. The leirrnc,d Sc:;:r rns .Jlrdec lravinlr gon(, t])ro-lp,,t iltr ,,t.idr:nce has acquitte r: thir r(. cused mailtl]' on rlte follo\'ir q i1r.c u rdr;.

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i) PWI rvho is lhe authorizecl person d,.posir;. on behalf of company statt d that he r.r,as ltot a\'are ol sevr_,r.i I :ransactions in betrr.een the c( n pJainant compan] and the alccus()ri.

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ii) PW 1 ,:xFr-e ss;erl ignorance of thc ven. first ralsaction in betrr-een llte to npany ancl the accused.

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iii) Accord in51 o him he u,as not present ,vhe n he discussion betu'een their c rrtpany ar-rd the accused took pla<:r .

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iv) PW I furthc,r v./as not a^/are as to u.ho ex.clrte.l Ex.p3_cl-reque and lvheth.:r it : s in the hernd writing of accust:d.

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v) The conrpl,ai: r.rnt compan.v liled Ex.pt2 rr.hicl-r ir; an account cop], to substi ntiate the outsranding. Howevr:t.. the wltness examined on l;e rzlf of company pW2 could nc,t t-,::I,li. in that there was an outstatlc ng amount mentioned in the r:hetqrLc Ex.p3.

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vi) When P\Vs. I urd 2 could not substantiate the tri nsactions in betu'ecn the cc)rr plaina,t and accused comparry anr also pleaded ignora,cc ol tl-e iransactions, the r.ersion of tL e ar:r:r,Lsect that the

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chcques were^{isslred in biank cluringbanktransactions can be} believed.

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vii) As on the date of issuing of^{the cheque inquestionthe} complainant had utterly^{failed toprove that there was an} outstanding and accordingly'^{it cannotbe inferredthat the cheque} was issued towards any legally^{enforceable debt.}

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7 . Learned Counsel appearing for the^{complainantcompany} would submit that the learned^{Sessions Judgehad committedan} error in reversing the^{well reasonedjudgmentof the trial Court.} The transactions in between the^{complainant companyand} accused irrm were from the^{year 1997. As such, the learned} Sessions^judge has misread the^{documents Ex.P12 and also the} evidence of PWs. I aod 2.

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l.earned Counsel appearing for the complainant^company relied on the Judgment of Honourable^{Supreme Court in} P.K.Manmadhan Kartha o.^{SanieeuRa./ I} "r',0^{argued that once} a cheque is issued there is a^{presumption and the burdenis on} the accused to discharge^{his burdenthat the chequewas issued} in blank.

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'zooz^{(z)scc rso}

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Hr' :Lir;r relred on Lhc ..ludgmerlt ol I-or o rrir ble -suprerne Court ir Bir singh u. Mukesh Kumar² ,vhr.r,riir ir is helci that s'hen thc iss rirnce of cheque and signatt re ,r (. c irclmtlted, the IiabilrLv^r rril;,:r trrespectivc of rl,hether the r.hc,qr c \'. s post dated or bianli.

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ln Kala ndni Tex a. P.Balasubramanid.n³ lh<: honourable Supreme Ccr.r. t hzLs taken the sirrilar view aj irr Eir Sirgh case.

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1l. ln Suni Todi u. State of Gujarat in C'ri.A.No.1446 oJ 2O21 the ]{ )r ourable Supreme Court .r.hile :xprlailtlng 16s meanirrg ol 'd'bt or other liability", observed ihiLi sum of monev promrsed to b paid on a future date b1. rcssrllt i_ i an e1,h*"1qon falls withrn t:re said phrase.

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Learncrl^r lcultsel also relied on the Jucgrrre,rr.- r,'f Honourable Supreme Cour in Dashrathbhai Trikambhai .Pr.ttel u. Hitesh mqhendrabha'. Pag el in Crl. A. No. 7 49 7/2 Orl 2.

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Learttec^(;ounsel appearing for the cornplain:t1t bastng on the aforesaid . udgments argued that e\ren asl;rtnting tfrat the cheques $'ero s;ued in blank, hou,ever th ey r.r'e:-e voluntarily

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' 1zors1^{a scc rs} '

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'1zozr;^{s scczs:;}

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passed to the complainant compan,\ even according to^the accused. In the event of cheques being rroluntarily^given and accepted by the accused, a subsequent dishonor of chcque^wouid entail the company to prosecute the accuscd for the offence^under Section 138 of the Negotiable lnstrumetrts Act.^{Since the accused} failed to rebut his evidence the acquittal has to be^reversed. Learned Counsel also raised other grounds regarding^{pendency of} civil suits which grounds are not apposite for determining the present appeal.

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lrarned Sessions Judge had found that the^complainant compafly has failed to prove the factum of any debt on the cheque Ex.P3. Though Ex.P l2-statement was filed by the company, both the witnesses PWs. I and 2 failed to explain as to^{how the} outstanding arose. In the background of the^{transactions between} the complainant company and accused firm,^{it is} apparent^that the blank cheques were^{given. Whenever} outstanding^{arose, the} cheques being frlled up and^{presented.The said fact is, in fact,} admitted. The specific^case of^{the accused is} that there^{was no} outstanding as far as^{the cheque} in^question is concerned.^Though there was no outstanding or any liability, the complainant company has filled up the cheques and filed cases.

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I5.^'llt,' l rr I rn sl'ril'terrl olrto rlte accusec cirn i,a' c tscl-.irrqcd br prcpori(l('rar rr r of probabilit'. The transactilns since I997 arc not dislruted an( palmcnts being regularlr. nra,ir' .t-c :riso not drspr-rterl^():l !acts the accused u'as able Ir] lt o,(r thirt blank cl-rc;qr-res \',,r-, g;r,en. In the said back;;rorncl ii is ibr thc complainarn^, o mpany to establish that tt ere r-:rs f,utstanding Though llx.^r1l was filed the witnesses falt.d to p'ove thilt us on the date :Trel t o^-red on the cheque there w,as outsl ,tn(ling pa.able btr ih c ar:cu s er

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Ir.r Ravi iharma v. State (Government of NCT of Delhil and anothera. tlre Hon'ble Supreme Court hcld :lre t s hile dealing u/ith an ap1;e rl against acquittal, the ap telletle. coLlrt has to consicler r,vhet re r the trial Court's vieu, can t e termed as a possible ()ne, rrirticularly when evidence )n r()c )rc has been analysed. Th,: . errson is that an order oT acquittzrJ r dds up to the presumpti(ln c nnocence in favour of the acc.rrs,:d, Thlrs, the appellate c:ourt has to be relatively slow in r,:vers it- g t re o rder of the trial court r..ndt:ring acquittal.

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r (2022) 8 SuPrerre CcLrl ;6ses 536 /

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ln Ghureg Lat v.^{State oflJttar Ptadesh' the Hon'ble} Supreme Court after^{referring to several.-ludgments regardingthe} IN settled principles of^{lar,r,' and the powersof appellate Court} reversing the order of^{acquittal,held at para7O, as follo"r's:}

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"7O. In^{the tight of the above, the High Courlaru1 other appellate} Courts should fotlottt^{the tuetl-settLedpinciples crystallized by number} of Judgments if it is^{goingto ouemtle or otheru:isedisturbthe tial} court's acqltittal:

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The appeltate court^{mag onlg ouernlle or othenttise disturb} the tial coui'i ocqtittal if it^{has "uery substontialand compelling} reasons" for doing so.

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A number of instances^{aise in uhichthe appellatecoufi Luould} haue "uery subsiantial^{and' compeLLingrcasons" to tliscardthe tiol} court's dicision. "Very^{subslantiol and con'tpelling reasotrs"e:jst} when:i) The tial court's conclusion tuith regard to the facts is

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palpably urong:

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ii) Tle fial court's decision^{uas basedon an erroneous} uiew of la ut; iii)The fial court's iudgment^{is likely to result in "graue} miscarriage of^justice" ;

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iu) The ei,ntire opprooch^{of the tial court in dealing uith the} euidence uos^{patentlA illegal;}

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u) The tial court's^{judgmentu)as manifestly unjust and} unreosonable;

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ui) Tle tial court^{has ignored the euidenceor m'isreodthe} mateial euidence or^{hos ignored mateialdocumentslike dging} declarations/^{report of the ballisticexpert,etc.} uii) Thi-s list is intended^{to be illustratiue, not} exhaustiue.

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Tle appetlate court^{mustahaaysgiue properueiglrt and} consideration o the findings^{of the trial court'}

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If two reasonable^{uiews can be reached- one that leads} to acquittat, the other^{to conuittion} -the High Courts/ appellate courts must^{rule in} fauour^{of the acansed'"}

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t 120081^{10 supreme Court Cases450}

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T r,' l;ir cclr that u irs shilied onto th( z^(',rlrsed has becn discharged - rrrvrncrnslv botl-i on the basis c f th,l doc:uments prccliiccrl l>r^rr: :icc,.tscc"r airld ailso since tht cornprlail.anL^,-'unr paln-\ fariled ',()^,:s rr rlish that ihere \/as an out:;tirrrr ing amount mcniiori('d^,rn Ex-P3-ch<)qLle lroin their ou,n st.rten-.enl trx..[)12

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