M.Panchamurthy Vs. the Fertilizers and Chemicals. - Court Judgment

Excerpt:
[p.r.shivakumar, j.] negotiable instruments act, 1881 - section 138, 141, 142 -- the revision petitioner/accused used to purchase fertilizers from the respondent/complainant by issuing cheques towards the price of such fertilizer purchased by him. the same was supplied to the revision petitioner/accused under delivery challan no.143909 dated 13.09.1999 and the revision petitioner paid the price for the said consignment by a cheque bearing no.352464 dated 10.09.1999 for rs.64,850/-. similarly 10 mt of factamfos was delivered to the revision petitioner/accused vide delivery challan no.92585 dated 12.08.1999 and the revision petitioner paid the price for the said consignment by a cheque dated 11.09.1999 bearing cheque no.352458 drawn for a sum of rs.65,480/-. the original delivery challan has been produced by the revision petitioner as ex.d2.order1. the accused, who was prosecuted for an offence under section 138 of the negotiable instruments act, 1881 (3 counts), convicted and sentenced to undergo simple imprisonment for six months and pay a fine of rs.2,000/- on each count of the charges, after unsuccessfully prosecuting an appeal before the appellate court, has approached this court with the present criminal revision case.2. a complaint was preferred on the file of the learned judicial magistrate no.ii, thanjavur by the fertilizers and chemicals travancore ltd., represented by its sr. regional manager a.srinivasan (respondent herein) containing the following allegations:i) the petitioner herein was a dealer of the complainant doing business of sale of fertilizers in the name and style of sathya traders, as its sole proprietor. the revision petitioner/accused used to purchase fertilizers from the respondent/complainant by issuing cheques towards the price of such fertilizer purchased by him. a request was made by the revision petitioner/accused on 10.09.1999 for the supply of 10 mt of factamfos. the same was supplied to the revision petitioner/accused under delivery challan no.143909 dated 13.09.1999 and the revision petitioner paid the price for the said consignment by a cheque bearing no.352464 dated 10.09.1999 for rs.64,850/-. similarly 10 mt of factamfos was delivered to the revision petitioner/accused vide delivery challan no.92585 dated 12.08.1999 and the revision petitioner paid the price for the said consignment by a cheque dated 11.09.1999 bearing cheque no.352458 drawn for a sum of rs.65,480/-. again by a delivery challan no.144497 dated 11.09.1999, 7 mt of muriate of potash were delivered to the revision petitioner/accused and towards the value of the same, he issued a cheque bearing no.352474 dated 11.09.1999 for rs.25,368/-. all the three cheques were drawn on the account maintained by the revision petitioner/accused with indian overseas bank, north main street, thanjavur. when the above cheques were presented for collection through the banker of the respondent, namely state bank of travancore, thanjavur branch, all the three cheques were returned unpaid due to insufficiency of funds available in the account of the revision petitioner with a memorandum stating exceeds arrangement and insufficient funds as the reason for dishonour.ii) within 15 days after the receipt of the memorandum intimating the dishonour of the cheques, the respondent/complainant issued separate registered notices in respect of each cheque on 20.09.1999 demanding payment of the cheque amount. though the revision petitioner/accused received the notices on 23.09.1999, he failed to make payment as demanded. the above said cheques had been drawn and given to the respondent/complainant for the discharge of legally enforceable debts. since all the offences alleged are of same nature and committed within a span of 12 months, a complaint has been made for the prosecution of the revision petitioner/accused for all the three offences together in one and the same trial. therefore, the revision petitioner/accused should be prosecuted for 3 counts of the offence under section 138 of the negotiable instruments act, 1881 r/w sections 141 and 142 of the said act for the said offence, each one relating to the dishonour of the above said three cheques.3. the learned judicial magistrate no.ii, thanjavur took it on file as c.c.no.175/2006 following the private complaint procedure and thereafter issued process to the revision petitioner/accused. on appearance, the revision petitioner/accused denied having committed the offence alleged and hence a trial was conducted in which three witnesses were examined as pws.1 to 3 and seventeen documents were marked as exs.p1 to p17 on the side of the respondent herein/complainant. after completion of recording of evidence on the side of the complainant, the revision petitioner/accused was questioned regarding the incriminating materials found in the evidence adduced on the side of the complainant and also generally regarding the case, under section 313(1)(b) cr.p.c. on the side of the revision petitioner/accused no witness was examined, but three documents have been marked as exs.d1 to d3.4. the learned judicial magistrate no.ii, thanjavur after hearing the arguments advanced on both sides and upon perusing the materials brought on record and on an appreciation of evidence, came to the conclusion that the respondent herein/complainant proved the charge beyond reasonable doubt, held the revision petitioner/accused guilty of the offence under section 138 of the negotiable instruments act, 1881 (three counts), convicted him and sentenced him to the punishments indicated supra by a judgment dated 23.01.2008.5. challenging the said judgment in respect of conviction as well as sentence imposed, the revision petitioner/accused preferred an appeal in c.a.no.19 of 2008 on the file of court of session, thanjavur, which was made over from the i additional district and sessions judge (pcr), thanjavur and the learned appellate judge, after hearing both sides and on re-appreciation of evidence came to the conclusion that the charge against the revision petitioner/accused stood proved beyond reasonable doubt and that there was no scope for interfering with the judgment of conviction and the order of sentence.6. aggrieved by the same and questioning the correctness and legality of the judgment of the learned appellate judge confirming the judgment of the trial court convicting the revision petitioner/accused for the offence under section 138 of the negotiable instruments act, 1881 (3 counts) and imposing punishment as aforesaid, the revision petitioner/accused has come forward with present criminal revision case on various grounds set out in the grounds of revision incorporated in the revision petition.7. the point that arises for consideration in this criminal revision case is:whether the judgment of the lower appellate court confirming the conviction recorded and the sentenced imposed by the trial suffers from any defect or infirmity warranting interference by this court in exercise of its revisional power?8. the arguments advanced by mr.s.ravi, learned counsel for the petitioner and by mr.v.r.shanmuganathan, learned counsel for the respondent were heard. the materials available on record were also perused.9. the accused, who suffered a conviction before the trial court and confirmation of the same before the appellate court, is the petitioner in the present criminal revision case. he was prosecuted for an alleged offence punishable under section 138 r/w section 141 and 142 of the negotiable instruments act, 1881. the prosecution was launched for the dishonour of three cheques allegedly issued by the revision petitioner to the respondent herein for the discharge of legally recoverable debts. according to the respondent herein/complainant, the liability arose for the supply of fertilizers under three delivery challans and in discharge of the said liability, three cheques were issued by the revision petitioner, who is running a business in the name and style of sathya traders as its sole proprietor. it is not in dispute that the revision petitioner is running a business in the name and style of sathya traders as its sole proprietor. the respondent company is the manufacturer of fertilizers and the revision petitioner got the dealership of the respondent herein/complainant and in pursuance of the dealership agreement, fertilizers were supplied at the dealers point to the dealer, for which the cheques in question were said to be issued. out of the three cheques, one cheque is dated 10.09.1999 and the other two are dated 11.09.1999. it is also not in dispute that when the said cheques were presented for collection through the banker of the respondent herein, they were returned with the memo citing exceeds arrangements as the reason for dishonour. the dishonoured cheques have been produced and marked as exs.p2 to p4. the bank memo intimating the dishonour has been marked as ex.p5. it is also not in dispute that the above said cheques pertain to the bank account maintained by the revision petitioner in the name of his business concern sathya traders with his banker.10. the zonal manager of the respondent bank has deposed as pw.1 and a copy of the power of attorney given to him for deposing on behalf of the company has been produced and marked as ex.p1. the branch manager of respondent's banker, namely state bank of travancore, thanjavur branch has been examined as pw.2 and he has spoken about the presentation of exs.p2 to p4-cheques for collection through the said bank. he has also spoken about the return of the cheques without payment. copies of the memoranda sent by indian overseas bank, thanjavur branch to the state bank of travancore, thanjavur returning the cheques for the reason amount exceeds arrangement have been produced. ex.p5 series contain a debit note and the dishonour memos. pw.2 has spoken about the receipt of the cheques in their bank for collection, sending the said cheques to the indian overseas bank, thanjavur branch for clearance and the dishonour of the cheques, for which the memorandum was issued by the indian overseas bank. he has also spoken about the reason for the dishonour noted in the memorandum returning the cheques unpaid. pw.3, the branch manager of indian overseas bank, thanjavur, in which branch the revision petitioner is having a cash credit account in the name of his business sathya traders, has spoken about the receipt of exs.p2 to p4-cheques through state bank of travancore, thanjavur branch and it is his evidence that the said cheques were dishonoured since the arrangement the revision petitioner had made with the bank exceeded the amount covered by the cheques. according to his evidence, the revision petitioner had been given cash credit facility to the tune of rs.7,00,000/-, out of which the revision petitioner had already availed a sum of rs.6,91,927.26p. the same would show that on the date of receipt of exs.p2 to p4-cheques, the cash credit facility available to sathya traders, which remained unavailed was only rs.8,073.74p. that is the reason why the cheques were returned by the indian overseas bank, thanjavur branch stating that the amount covered by the cheques exceeded the arrangement made with the bank, as the reason for dishonour. a copy of the collection slip showing the particulars of cheque clearance through state bank of travancore, thanjavur branch has been marked as ex.p15. copy of the ledger relating to the cash credit account of the revision petitioner's business concern sathya traders has been produced as ex.p16. from the same it is obvious that on the date of receipt of the cheques for collection, there was no sufficient fund in the cash credit account. ex.p17 is the true extract of the cheque return register pertaining to sathya traders. from the evidence of pws.1 to 3 and exs.p2 to p5, it is obvious that the cheques were returned on the ground that there was no sufficient fund in the account on which the cheques were drawn and the cheque amount exceeded the arrangement made with the banker, namely the cash credit facility. therefore the condition found in section 138 of the negotiable instruments act, 1881 that the cheque should have been returned for insufficient funds or the amount exceeds arrangement made by the drawer with his banker stands fulfilled and proved.11. the next question that arises for consideration is whether the cheques were proved to be issued for the discharge of a legally enforceable liability or a legally recoverable debt?. according to the respondent's case, all the three cheques were issued on three different occasions towards payment of the price of the goods, namely fertilizer, delivered to the revision petitioner at thanjavur under three different challans. the copies of the delivery challans have been marked as exs.p6 to p8. it is pertinent to note that all those three documents are not originals, but are xerox copies. still those copies were marked as exhibits by the trial court without considering the admissibility of the secondary evidence. it is also obvious from exs.p9 to p11 - copies of legal notice and exs.p12 to p14-postal acknowledgment cards that statutory notice, as contemplated under section 138 of the negotiable instruments act, 1881, informing the revision petitioner of the dishonour of his cheques and calling upon him to make payment of the cheque amount, were issued and served on the revision petitioner. it is not the case of the revision petitioner that he sent any reply praying for the presentation of the cheques for collection again on the premise that he had subsequently made arrangements for honouring the cheques or that he came forward to make payment of the cheque amounts. it is also an admitted case that the revision petitioner did not issue any reply to the said notice. therefore, the respondent has chosen to prefer the complaint for prosecuting the revision petitioner/accused for the offence under section 138 r/w section 141 and 142 of the negotiable instruments act, 1881 on three counts relating to the dishonour of all the three cheques.12. the conditions precedent for prosecuting the drawer for an offence under section 138 of the negotiable instruments act, 1881 has also been complied with. compliance with such conditions alone shall not be enough to prove the charge against the accused, who is the present revision petitioner. it must also be proved that the cheques in question were issued for the discharge of a legally recoverable debt or other liability. of course when the issuance of the cheque is admitted or proved, the same will attract the presumption under section 139 of the negotiable instruments act, 1881. now it has been settled that such a presumption will include a presumption that the cheques were issued in discharge of a debt or other liability by the judgment of the hon'ble supreme court in rangappa v. sri mohan reported in (2010) 11 scc 441. it has been made clear that the said presumption is a rebuttal presumption and for rebutting the same, the degree of proof needed is not comparable to the degree of proof required on the part of the prosecution or complainant and that the accused need not adduce positive evidence and he can simply rely on the answers elicited during cross-examination of the complainant's witnesses and the discrepancies found in the evidence, both oral and documentary adduced on the side of the complainant to rebut such presumption by preponderance of probabilities.13. in this case, it is the contention of the revision petitioner that the cheques were not issued for the discharge of any debt or liability and that at the time of granting dealership to the revision petitioner, the respondent had obtained blank cheques as security for the goods to be supplied in future and that exs.p2 to p4 were also such cheques given as such security in advance for use in future transaction for the supply of goods. it is the further contention of the revision petitioner that the cheques were not issued in respect of the supplies made under the delivery challans relied on by the respondent and that hence the contention of the revision petitioner that the cheques were not issued for the discharge of a legally recoverable debt or other liability should be accepted. the learned counsel for the revision petitioner referred to the following admissions made by pw.1 during cross examination: pw.1 has stated in cross that he was not the zonal manager at the time of the transaction with the revision petitioner and one sivanandam, the then zonal manager alone knew the entire particulars of the transaction. even though pw.1 has admitted that the said sivanandam could be examined, for the reasons best known to the respondent, the said sivanandam, who knew the entire transaction between the revision petitioner and the respondent, has not been examined. similarly, though it has been admitted by pw.1 that the agreement between the respondent and the revision petitioner regarding the dealership is available with the respondent, they have not chosen to produce the said document. according to the submission of the learned counsel for the revision petitioner, the production of the same would clearly show that exs.p2 to p4- cheques had not been issued towards particular consignments.14. learned counsel has also pointed out the fact that pw.1 admitted that copies of the delivery challans were obtained by using carbon and that carbon copies were not produced and on the other hand, xerox copies were produced. it has also been pointed out that ex.d2 is the original of delivery challan and ex.p6 has been produced as a copy of the same. in ex.p6, one kannan's signature is found as the agent of the customer. the original delivery challan has been produced by the revision petitioner as ex.d2. but there are differences between ex.d2 and ex.p6, which has been produced as a copy of the original delivery challan. similar discrepancies are also pointed out to be present in the other delivery challans marked as exs.p7 and p8. pw.1 has also clearly admitted that he did not have personal knowledge regarding the delivery effected under the originals of exs.p6 to p8; that out of the persons who effected delivery under the three different challans, one is still in service and other has been removed from service. it is also his clear admission that the delivery particulars could be known to those persons alone. therefore, as rightly pointed out by the learned counsel for the revision petitioner, the non-examination of the then zonal manager and the persons who is said to have effected delivery, is a point in favour of the revision petitioner. while referring to the practice adopted by the respondent, pw.1 has stated in his evidence that when goods are delivered on credit, post-dated cheques bearing dates 30 days after the delivery or thereafter would be obtained. however, it is pw.1's evidence that for the cheque bearing cheque no.352464 dated 10.09.1999, the goods were delivered subsequently, namely on 13.09.1999. such a discrepancy found in the complaint was sought to be asserted by pw.1 to be correct stating that cheque was issued in advance and goods were delivered subsequently which goes contra to the earlier part of the averments made in the complaint as well as the legal notice. it is also the admission of pw.1 that for the cheques issued on 11.09.1999, goods were supplied on 12.08.1999 and that the cheques were also issued on the dates of delivery of goods. pw.1 also pleads ignorance as to why the cheques exs.p2 to p4, which are dated 10.09.1999 and 11.09.1999, were not presented for collection immediately. the reasons were not known. for every question pw.1 would say that only other persons will be able to answer. but such other persons were not examined on the side of the respondent.15. it is also pertinent to note that though the revision petitioner wanted the respondent/complainant to produce the documents executed by the revision petitioner/accused for getting the dealership, they were not produced by the respondent/complainant. on the other hand, the revision petitioner/accused has chosen to produce the dealership authorisation letter dated 30.01.1995. the same has been marked as ex.d3. it contains the following recital:we have pleasure in appointing you with effect from 30.1.1995 as one of our authorised dealers at thanjavur district on the terms and conditions stipulated in the dealer agreement.cash receipt shall be sent to you separately for rs.2,500/- (rupees two thousand five hundred only) remitted by you towards interest free security deposit......besides producing the dealership appointment letter, the revision petitioner has contended that at the time appointing dealers, for security purposes, the respondent used to get blank cheques and exs.p2 to p4 were such cheques obtained at the time of according dealership to the revision petitioner and that the same were later on filled up, when the relationship between the revision petitioner and the respondent got strained. in this regard, learned counsel for the revision petitioner has pointed out the admission made by pw.1 that it was the practice of the respondent company to get cheques as security at the time of appointing dealers and hence it must be held that by eliciting such answers, the revision petitioner was able to rebut the presumption by preponderance of probabilities, sufficient to shift and recast the burden of proof on the respondent/complainant and that the respondent/complainant thereafter has not proved that the cheques were issued for the discharge of a legally recoverable debt or other liability by reliable evidence. it is the further contention of the learned counsel for the revision petitioner that the reverse burden cast on the complainant after the presumption is rebutted requires proof beyond reasonable doubt and that the respondent/complainant has not discharged the said reverse burden of proof.16. per contra, the learned counsel for the respondent/complainant would submit that the revision petitioner/accused has not chosen to lead any oral evidence and that he has not even chosen to issue any reply to the statutory notice and the same would be enough to show that there was admission on his part. this court is not in a position to accept the said contention raised on behalf of the respondent/complainant. the mere fact that the recipient of a notice has not chosen to issue a reply, cannot be taken as an admission of the contents of the notice. on the other hand, it can be taken as a decision to face the action that may be taken by the person, who sent the notice. above all, as rightly pointed out by the learned counsel for the revision petitioner, the revision petitioner/accused was able to elicit more number of answers from pw.1 and produce exs.d1 to d3 to rebut the presumption under section 139 of the negotiable instruments act, 1881 by preponderance of probabilities and that the revision petitioner/accused has successfully rebutted the presumption. on the other hand, the respondent/complainant has not discharged the reverse burden of proof on the rebuttal of the presumption. the respondent/complainant has not proved that the cheques were issued for the supply of fertilizers under three delivery challans. both the courts below have committed an error in holding the revision petitioner/accused guilty of the offence with which he stood charged. if the courts below have properly appreciated the evidence, they would have arrived at a conclusion that the case of the respondent/complainant was not proved and acquitted the revision petitioner/accused. this court holds that the judgment of the appellate court confirming the conviction and sentence is defective, discrepant and the same is liable to be interfered with and set aside and that the judgment of the trial court convicting the revision petitioner/accused is liable to be set aside by invoking the revisional powers of this court.17. in the result, the criminal revision case is allowed. the judgment of the 1st additional sessions court (pcr), thanjavur dated 10.12.2008 made in c.a.no.19 of 2008 confirming the conviction recorded and the sentence imposed by the trial court, namely judicial magistrate no.ii, thanjavur in his judgment dated 23.01.2008 made in c.c.no.175 of 2006 is set aside. the revision petitioner is acquitted of the offence with which he stood charged. fine amount collected, if any, shall be refunded to the revision petitioner.