Criminal Appeal No.29 of 2008,Criminal Appeal No.30 of 2008

7th August, 2009

Petitioner Counsel: Mr. S. R. RIVONKAR
Respondent Counsel: Mr. ULHAS TARI

Cases Cited:
Goa Plast Pvt. Ltd. Vs. Chico Ursula D'Souza, 2001(1) Goa L.T. 313 [Para 5]
Goa Plast (P) Ltd Vs. Chico Ursula D'Souza, 2003(2) ALL MR 750 (S.C.)=(2003)3 SCC 232 [Para 5,7]
Modi Cements Ltd Vs. Kuchil Kumar Nandi, 1998(2) ALL MR 433 (S.C.)=(1998)3 SCC 249 [Para 5]
Ashok Yeshwant Badave Vs. Surendra Madhavrao Nighojakar, 2001 ALL MR (Cri) 1028 (S.C.)=(2001)3 SCC 726 [Para 5]

JUDGMENT

JUDGMENT :- Both these appeals have been filed by the complainant and are directed against common Judgment dt.30.10.07 of the Learned trial Court by which the accused has been acquitted under section 138 of the Negotiable Instruments Act, 1881. The case of the complainant, in brief, was that the complainant sold to the accused 40 second hand sewing machines in working condition at the rate of Rs.2,200/- per machine and for a total sum of Rs.88,000/- by delivery challan cum invoice no.1562 dated 10.10.2001 and towards part payment of the said amount the accused gave to the complainant two post dated cheques, details of which are as follows :-

1. 130901 dated 22.10.2001 for Rs.5,000/-.

2. 130902 dated 28.10.2001 for Rs.5,000/-.

and according to the complainant the accused was to pay the balance of Rs.78,000/- within eight days from 28.10.2001. The complainant deposited both the cheques in his account for the purpose of collection but by memorandum dated 31.10.2001 the complainant was informed that the accused had stopped payment. The complainant, therefore, sent a demand statutory notice dated 9.11.2001 calling upon the accused to make payment within fifteen days of the said notice.

2. The accused replied to the said notice and denied having purchased any sewing machines from the complainant on 10.10.01. In para 3 of the reply it was stated that the complainant was due and payable to the accused a sum of Rs.17,480/- towards fabrication and welding work done by him for the complainant. In para 4 it was stated that the subject cheques were issued to the complainant towards three months' rent payable by the accused to the complainant for the premises used and occupied by the accused. According to the accused when the accused demanded the said sum of Rs.17,480/-, the complainant had told the accused to pay the complainant's rental amount of three months first, by cheques and thereafter the complainant had promised to pay to the accused the said amount of Rs.17,480/- and believing in the words of the complainant that the accused had issued to the complainant the said two cheques but when the complainant refused to pay to the accused the said amount of Rs.17,480/- that the accused gave instructions to the bank not to make payment to the complainant as regards the said cheques.

3. The complainant sent another letter to the accused dated 12.12.2001 denying what was stated by the accused in the reply dated 28.11.2001 sent by the accused and reiterating the stand of the complainant as disclosed in the said statutory demand notice.

4. The complainant examined its Managing Partner Shri. Ulhas Pilankar (to be referred to as complainant, hereafter) and also examined another witness by name Shrinath Banaulikar. The accused also examined himself and another worker of his, by name Dhrup Vishwakarma. The complainant produced the said delivery challan-cum-invoice dated 10.10.2001 which was marked as exh PW-1/A. The complainant also produced some other documents, being required to be produced by the accused. The accused also produced a blank copy of the said delivery challan cum invoice with only the signature of the accused.

5. The Learned trial Court relied on Goa Plast Pvt. Ltd. Vs. Chico Ursula D'Souza (2001(1) Goa L.T. 313) and came to the conclusion that since the accused had issued instructions to the Bank to stop the payment, no offence was made out, without considering that the said decision of this Court was reversed by the Apex Court in between the same parties reported in [Goa Plast (P) Ltd Vs. Chico Ursula D'Souza and another] (2003)3 SCC 232 : [2003(2) ALL MR 750 (S.C.)] wherein the Apex Court held that the presumption under section 139 of the Act must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment it will not preclude an action under section 138 of the Act by the drawee or the holder of the cheque in due course. The Apex Court further noted that this view was earlier held by the Court in Modi Cements Ltd Vs. Kuchil Kumar Nandi ((1998)3 SCC 249 : [1998(2) ALL MR 433 (S.C.)]) and Ashok Yeshwant Badave Vs. Surendra Madhavrao Nighojakar ((2001)3 SCC 726 : [2001 ALL MR (Cri) 1028 (S.C.)]) further observing that the view held was in consonance with the object of the legislation and with a further observation that after the issue of a post dated cheque, the payee alters his position by accepting the cheque and if the stoppage of the payment before the due date of the cheque is allowed to take the transaction out of the purview of section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date.

6. Shri. Rivonkar, the Learned Counsel on behalf of the complainant has submitted that the complainant had produced the delivery challan of the sale of the second hand sewing machines on which the accused had not disputed his signature. Learned Counsel has further submitted that the complainant had also examined PW-2 who was present at the time when complainant discussed the sale of the machines with the accused. Learned Counsel further submits that the accused has not denied the giving of the two cheques and as such there was a presumption in favour of the complainant under the relevant provisions of the Act which has not at all been considered by the trial Court. Learned Counsel further submits that the accused had admitted his liability towards the complainant when the accused gave the said two cheques although the accused might have stated that they were given towards payment of rent. Learned Counsel further submits that no person would have given two cheques in favour of anyone for Rs.10,000/- in case such a person was to pay a bigger amount of Rs.19,500/- to the accused. Learned Counsel further submits that the accused did not produce the original/first copy which was given to the accused but produced the third copy which had remained incomplete on account of improper placing of carbon and which was given to the accused at his request. Learned Counsel, therefore, submits that the defence taken by the accused is fabricated and is otherwise not substantiated.

7. On the other hand Shri. Tari, on behalf of the accused has submitted that the two cheques were taken by the complainant by using undue influence on the accused who was an outsider. Learned Counsel further submits that the accused had an amount in the bank to honour the cheques because on 12.10.01 the accused had deposited an amount of Rs.9,000/- as can be seen from Exhibit 39. Learned Counsel further submits that till date the complainant has not filed a case for recovery of the balance amount towards the sale of machines in case the machines were sold to the accused for the sum of Rs.88,000/-. Learned Counsel further submits that the accused gave instructions to the Bank to stop payment because the accused did not receive the said sum of Rs.17,840/- as promised by the complainant. It is the submission of Shri. Tari that the decision of the Apex Court in Goa Plast (P) Ltd Vs. Chico Ursula D'Souza and another ((2003)3 SCC 232 : [2003(2) ALL MR 750 (S.C.)]) is not applicable to this case. Shri. Rivonkar has submitted that the accused also did not file any case for the recovery of Rs.17,840/- in case the complainant had owed the said sum to the complainant and he further submits that if the complainant has not taken steps to recover the balance amount towards the sale of the machines it could be because of wrong legal advice.

8. The complainant in his evidence after stating what was stated in the complaint had produced the said delivery challan at Exhibit PW-1/A and had identified the signature of his brother Nilesh Pilankar who had prepared it at point A and that of the accused at point B and had further explained that the original of the challan was white in colour, the second copy was pink in colour and the third copy was yellow in colour. The complainant was asked to produce the challan book which he produced and he stated that a copy of the subject challan was not in the said challan book. Obviously, it could not have been there because according to the complainant the original was given to the accused, the second copy was produced by him and the third copy was produced by the accused. Admittedly the challan/invoice bears no.1562 and date as 10.10.01 and was marked Exhibit PW-1/A. In his cross examination the complainant was compelled to admit that invoice no.1563 had date as 16.9.2001 and had further admitted that on invoices no.1561 and 1563 the words delivery challan which appeared on invoice no.1562 did not appear. On being asked by the accused, the complainant had also produced an invoice of Virani Sales Corporation from where the complainant had purchased the said machines. In cross examination he had denied the case of the accused that the complainant had given any place to the accused on rent or the accused had carried out any works of fabrication for him. As regards the challan produced by the accused Exhibit P-1/A the complainant had explained that the contents of the challan Exhibit PW-1/A did not come on challan Exhibit P-1/A on account of full carbon paper not being used, and that only some portion had come on it.

9. The complainant's witness Shri. Banaulikar had stated that he knew the complainant and in the year 2001 he had visited the complainant at Tivim Industrial Estate at Karaswada to discuss some business with him and at that time he had found the accused negotiating the purchase of second hand sewing mahines with the complainant.

10. On the other hand, the accused had stated that he had taken a contract of the complainant to make a loft and a ladder to go to the mezzanine floor of the complainant and the labour cost of it was Rs.18,480/- of which he was paid by the complainant Rs.1,000/- and the accused was required to be paid by the complaint towards labour cost Rs.17,480/-. As stated by him, he was using a portion of the shed of the premises of the complainant for almost three months and the rent which was fixed at the rate of Rs.3,500/- per month was rounded upto Rs.10,000/- and in October, 2001 he had asked the complainant to pay the said balance of Rs.17,480/- and he had also suggested to the complainant to deduct the said rent of Rs.10,000/- from the said amount of Rs.17,480/- and pay him the balance which he was entitled to and his suggestion was not accepted by the complainant. The accused stated that the complainant suggested to the accused that he would pay 50% of the balance of labour charges by 19.10.2001 and the accused should pay 50% of the rent by 22.10.2001, by cheque and that the complainant further suggested to him that he would make the payment of the entire balance of 50% of labour charges by 26.10.2001 and that the accused should pay him the 50% balance of rent by 28.10.2001 by cheque and asked the accused to give two post dated cheques to that effect, each amounting to Rs.5,000/-. The accused also stated that he agreed to the suggestion of the complainant, as it was good for him, and at that time the accused asked the complainant for some writing regarding the discussions and at that time the complainant told him that he would issue a receipt of having received the rent and showed him the invoice book of Bhakti Garments and asked him to sign at the bottom, on one triplicate invoice by putting carbon on it and when he signed the invoice (Exhibit P-1)/A) at that time nothing was written on it in pen and the same was totally blank, except for the printed matter and he was told to sign the same as a token of their discussion. The accused also stated that he had asked the complainant for retaining for him the third copy of the said invoice Exhibit P-1/A as nothing was written on any of the three copies of the said invoice Exhibit P-1/A. In cross examination the accused admitted that he had not filed any case till date for the recovery of the said amount of Rs.17,480/- because he could not afford to file the same. He denied the suggestion that he did not file a case because his case is false.

11. The accused had produced the statement of his Bank account at Exhibit 39 and it does show that on 12.10.01 the accused had deposited a sum of Rs.9,000/- but on 29.10.01 had withdrawn Rs.4,000/- and as on 1.11.2001 he had withdrawn further amount of Rs.4,000/- leaving a balance of Rs.1,152/-. The cheques were deposited by the complainant on different dates and it could be that when the first cheque was deposited the accused had an amount in his bank to honour the said cheque and it is the contention of the Learned Counsel on behalf of the accused that the amount in the Bank account of the accused was not insufficient, as contemplated by section 138 of the Act for according to him only then that an offence would have been made out. This submission cannot be accepted because of the law laid down by the Apex Court to which reference has already been made hereinabove.

12. The complainant had produced the delivery challan-cum-invoice Exhibit PW-1/A which shows that 40 numbers sewing machines were given to the accused. The same carries the signature of the accused. The first explanation given by the accused in the reply to notice dated 28.11.01 is that the two cheques were given by the accused to the complainant towards three months rent, after rounding the period for which it was due and this according to the accused is inspite of the fact that the complainant owed to the accused a sum of Rs.17,480/-. No prudent person would have given two cheques for Rs.10,000/- to a person who in turn owes Rs.17,480/-. That the said two cheques were given by the accused is admitted by him. Whether they were given towards part price to be paid to the complainant towards the sale of machines is one aspect. Whether they were given towards the rent payable by the accused is another aspect, but nevertheless the fact remains that both the cheques were given by the accused towards a liability which the accused owed to the complainant whether by way of part price of sale of machines or rent and therefore the accused under no circumstances could have given instructions to the bank to stop payment of the money due thereon. This is a case where the liability is admitted but only the nature of liability was disputed. Therefore the presumption ought to have been drawn with greater force and vigour in favour of the complainant which the Learned trial Court failed to.

13. The sale of machines was proved by the complainant not only with the evidence of delivery challan Exhibit PW-1/A but also with the evidence of PW-2. The accused who was in the habit of transacting his business by issuing cheques would have not been so naive, as to sign a blank challan as contended by him. The only inference which can be drawn from Exhibit PW-1/A is that the accused had signed the said delivery challan in proof of the delivery of the said sewing machines. On the contrary it appears, that it is the complainant who was rather naive, to have given to the accused in addition to the original challan, the said blank copy which has enabled the accused to set up the said plea which has got to be considered as false. The claim of manufacturing a ladder is very cryptic. The accused had not even stated as to who supplied the material for erecting the same or how much it was worth. Mere statement that the complainant owed to the accused a sum of Rs.18,480/- of which the accused was paid Rs.1,000/- leaving a balance of Rs.17,480/- could not be accepted, without further corroboration.

14. In conclusion it may be stated that the giving of the two cheques was admitted by the accused and so also the liability to pay the amount due thereon and consequently there was no other option for the trial Court but to have convicted the accused. Consequently the appeal deserves to succeed. The impugned judgment is hereby set aside and the accused convicted under section 138 of the Act.

15. Learned Counsel on behalf of the accused submits that the accused is ready to pay the sum of Rs.10,000/- to the complainant. This proposal is not acceptable to the complainant. Learned Counsel further submits that the accused has undergone the trial for a long time and the amount due is only Rs.10,000/- and therefore no sentence of imprisonment be imposed on the accused. Shri. Rivonkar the Learned Counsel for the complainant submitted that in case the accused is not to be imprisoned then he ought to be directed to pay compensation which is equivalent to the total amount due to the complainant. I am afraid that this submission cannot be accepted because the law contemplates only compensation which can be double the amount of the cheque. If the accused has faced the trial for almost eight years, the complainant too has been deprived of the amount which was rightly due to him for the same period. Shri. Rivonkar has fairly conceded that no sentence of imprisonment be given to the accused but according to him the compensation atleast be doubled. Considering the facts and circumstances of the case and in view of the concession made, the accused is hereby sentenced to pay a fine of Rs.18,000/- and the entire sum shall be given to the complainant by way of compensation and in default the accused shall undergo simple imprisonment for six months. Fine to be paid within fifteen days.

Appeal allowed.