Criminal Revision Application No.405 of 2009

19th December, 2009

Petitioner Counsel: Mr. P.H.H. PONDA
Respondent Counsel: Mr. Y. M. CHAUDHARY,Mrs. A. A. MANE

Cases Cited:
Bishwanath Rai Vs. Sachidanand Singh, AIR 1971 SC 1949 [Para 23]
Madhoklal Sudham, AIR 1954 Bom. 305 [Para 23]
Re: Mubarak Ali, AIR 1957 SC 856 [Para 23]
Re: Sir Mohammed Yusuf, AIR 1968 Bom. 112 [Para 23]
Om Prakash Berlia Vs. Unit Trust of India, AIR 1983 Bom. 1 [Para 23]
K. K. Ahuja Vs. V. K. Vohra, 2009 ALL SCR 1524 : 2009(8) SCC 691 [Para 38]
S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla, 2005(5) ALL MR 1118 (S.C.)=2005 SCC (Cri.) 1975 [Para 38]
Sabitha Krishnamurthy Vs. Chenna Basavaradhya, AIR 2006 SC 3086 [Para 38]
Ranvir Yadav Vs. State of Bihar, 2009 ALL MR (Cri) 2089 (S.C.) [Para 39]
Naval Kishore Singh Vs. State of Bihar, 2004 Cri.L.J. 4252 : 2004 SCC (Cri) 1967 [Para 39]
Latu Mahto Vs. State of Bihar, , (2008)3 SCC (Cri) 500 [Para 39]
Shaikh Maqsood Vs. State of Maharashtra, 2009 ALL SCR 1596 : 2009(2) Bom.C.R. (Cri.) 273 [Para 39]
State of Punjab Vs. Hari Singh, 2009 ALL SCR 2225 : (2009)2 SCC (Cri) 243 [Para 39]
State of Punjab Vs. Swaran Singh, 2005 SCC (Cri) 1359 [Para 39]
Sharad Birdhichand Sarda Vs. State of Maharashtra, 2009 ALL SCR (O.C.C.) 281 : AIR 1984 SC 1622 [Para 39]
Pawan Kumar Vs. State, 2004 Cr.L.J. 2310 [Para 42]
MCD Vs. State of Delhi, 2005 SCC (Cri.) 1322 [Para 42]
Balbir Singh Vs. State of Punjab, 2004 Cri.L.J. 1864 [Para 42]
Ved Prakash Vs. State of Haryana, 1981 Cri.L.J. 161 [Para 42]
Mohammad alias Biliya Vs. State of Rajasthan, 2001 SCC (Cri) 1497 [Para 42]
Masarullah Vs. State of Tamil Nadu, 1983 Cri.L.J. 1043 [Para 42]
Mohamed Aziz Mohamed Nazir Vs. State of Maharashtra, AIR 1976 SC 730 [Para 42]
Darshan Kumar Vs. Secretary, Municipal Corpn. Jabalpur, AIR 1973 SC 906 (V 60 C 199) [Para 42]
Dalbir Singh Vs. State of Haryana, 2004 SCC (Cri) 1208 [Para 42]
Commandant, 20th Battalion, ITB Police Vs. Sanjay Binjola, 2001 ALL MR (Cri) 1022 (S.C.)=2001 SCC (Cri) 897 [Para 42]
Bishnu Deo Shaw Vs. State of West Bengal, AIR 1979 SC 964 [Para 42]
Ram Prakash Vs. State of Himachal Pradesh, AIR 1973 SC 780 [Para 42]
Rattan Lal Vs. State of Punjab, AIR 1965 SC 444 (V 52 C 72) [Para 42]
Keshav Sitaram Sali Vs. State of Maharashtra, AIR 1983 SC 291 [Para 42]
Ratilal Prithviraj Bafna Vs. Purshottam K. Kone, AIR 1979 SC 1284 [Para 42]
Roshanali Burhanali Syed Vs. State of Gujarat, AIR 1982 SC 784 [Para 42]
State of Orissa Vs. Debendra Nath Padhi,, AIR 2005 SC 359 [Para 42]
M. V. Nalinakshan Vs. M. Rameshan, 2009 ALL MR (Cri) JOURNAL 273=2009 Cr.L.J. 1703 [Para 44]

JUDGMENT

JUDGMENT :- This Civil Revision Application challenges the order of the learned Metropolitan Magistrate, 44th Court, Andheri, Mumbai in C.C. No.376/SS/2005 dated 12th June, 2007 convicting the applicants of offence punishable under Section 138 read with Section 141 of the Negotiable Instruments Act and sentencing applicant No.1 (accused No.1) to pay fine of Rs.5,000/- and applicant No.2 (accused No.4) to simple imprisonment for one year and to pay compensation of Rs.5,50,000/- and in default to suffer simple imprisonment for 3 months. The applicants have also challenged the judgment of the learned Sessions Judge, Greater Bombay upholding and confirming the said sentence on 23rd June, 2009. The initial complaint under Section 138 read with Section 141 of the Negotiable Instruments Act came to be filed by the respondent No.1 (complainant) herein inter alia against the applicants herein (the accused company) upon a dishonoured cheque of Rs.5,00,000/- issued by the accused company on 29th July, 2000.

2. The parties had entered into certain agreement with regard to sale of shares of one Zuari Finance Limited, which is a sister concern of the accused company, which were agreed to be purchased by the accused company from the complainant.

3. A letter dated 31st July, 2000 came to be written by the accused company to the complainant showing that they agreed to purchase from the company 50,000 shares of Zuari Finance Limited at the rate of Rs.12/- per share.

4. In the letter dated 7th August, 2000 to the complainant the accused company confirmed that they received the share certificates and transfer deeds duly filled-in and completed, as per the list attached to that letter.

5. By a letter dated 9th August, 2000 to the complainant the accused company claims to have forwarded a cheque dated 10th September, 2000 for Rs.6 lakhs towards sale of 50,000 shares of Zuari Finance Limited.

6. It may be mentioned that these letters, which are not denied by the accused, show the discussions, agreement and transaction, with regard to sale of shares alone.

7. By a letter dated 14th August, 2000 to the complainant the accused company referred to discussions had with the complainant regarding a short term loan of Rs.5 lakhs to the complainant on the terms agreed by the complainant and the accused company. The accused company referred to a cheque of Rs.5 lakhs bearing No.107376 drawn on Union Bank of India being issued to the complainant for that purpose. It regretted to inform the complainant that the short term loan was not possible and hence the amount could not be released to the complainant. It notified the complainant that the bank had been informed to stop payment and requested the complainant to return the cheque dated 29th July, 2000.

8. The complainant, however, presented the cheque for payment on 17th August, 2000. It was dishonoured on 18th August, 2000. The complainant was intimated of the dishonour by the bank on 19th August, 2000.

9. The complainant issued notice of dishonour upon the accused company and its Directors on 23rd August, 2000. The notice came to be replied by the accused company on 16th September, 2000. The criminal complaint came to be filed accordingly.

10. It is seen that the issue of the cheque by the accused company is not denied. Consequently the consideration that passed thereunder for discharge of the liability of the accused company under the transaction that transpired between the parties is statutorily presumed under Section 139 of the Negotiable Instruments Act. It is for the accused to rebut that presumption.

11. It is the case of the complainant that the parties had agreed for the sale of shares of Zuari Finance Limited to the accused company. The price of the shares, the number of the shares as well as the factum of the sale came to be incorporated in the letter dated 31st July, 2000. The documents required to be executed and the time for the completion of the transaction was also mentioned in the letter dated 31st July, 2000. That letter represents the complete transaction between the parties. That letter was acted upon by the complainant. The complainant sent the share certificates and the transfer deeds as agreed. The accused company made part payment of Rs.5 lakhs towards the agreed consideration of Rs.6 lakhs (50,000 shares @ Rs.12/- per share) for the transaction set out in the letter dated 31st July, 2000. The company also confirmed receipt of the documents relating to the transfer of shares from the complainant. The transfer was effectuated on 7th August, 2000. The complainant has relied upon xerox copies of share certificates with the necessary endorsement showing transfer from the name of the complainant to the name of the accused company under the seal of the accused company signed by the same person who had signed against the seal of the transfer in favour of the complainant a year earlier.

12. It is further the complainant's case that despite the transaction having been effectuated by 7th August, 2000, on 9th August, 2000 the accused company sent another letter stating that they were forwarding another cheque of Rs.6 lakhs in respect of the transfer of 50,000 shares @ Rs.12/- per share. Though the letter mentioned that the cheque was enclosed, no cheque was enclosed with the said letter.

13. It is further the complainant's case that thereafter on 14th August, 2000 the accused company dishonestly stated that there was an agreement for a short term loan to be given by the accused company to the complainant for which the cheque dated 29th July, 2000 came to be issued and that the loan was not to be granted and hence the cheque was not to be presented. The complainant presented the cheque since it was towards part consideration of the sale of the shares which was already effectuated.

14. It is the case of the accused company that the cheque was issued as and by way of short term loan to be granted to the complainant by the accused company. After the issue of the cheque the company decided not to grant the loan. Hence the accused company informed the complainant not to present the cheque and stopped its payment. The transaction relating to the sale of shares is not denied or disputed. In fact it is the case of the accused company that is the separate transaction for which a separate cheque of Rs.6 lakhs was issued to the complainant, which the complainant has not presented for payment.

15. These two cases are required to be considered and appreciated.

16. The fact that there were discussions between the parties is admitted. The fact that there were discussions for the sale of shares of the complainant is also admitted. The fact that the dishonoured cheque was issued pursuant to discussions is also admitted. Whether or not, these discussions were for the sale of shares alone or also for the grant of loan to the complainant is to be seen.

17. Unfortunately though the transfer of shares was effectuated by 9th August, 2000 the cheque issued on 29th July, 2000 was not deposited by the complainant in his bank account. Before its deposit on 14th August, 2000 the company stopped payment of the cheque on 14th August, 2000 on the ground that the loan which was to be granted to the complainant was decided not to be granted. Therefore, this defence has to be further considered. It is this defence that is material; the transaction for the sale of the shares is a separate and distinct transaction as per the case of the company.

18. The case of the accused company is that it agreed to grant a short term loan to the complainant. The accused Company is not a finance company. No documents of the loan agreed to be granted are stated to be executed by the loanee/complainant. No security for repayment of the loan is shown to be taken by the company. Only a cheque is issued and a fortnight after the issue the company has changed its decision. A company acts through its Directors. The Directors are the agents of the company. The Directors act collectively on the board of the company. Consequently the company acts through its resolutions. The resolutions are passed by the Directors in the Directors Meetings. No resolution for grant of the short term loan is shown to have been passed. It is not stated whether that is the usual business of the company.

19. The witness examined on behalf of the company who was looking after the administration of the company has been extensively cross examined on this defence. The witness stated that he did not know of the practice of the company to give short term loans to individuals. He did not know to how many persons such loans were given. He did not know whether the complainant applied for the loan. He was not aware of the agreement between the company and the complainant either orally or in writing. He was not aware of the discussion in the meeting of the Board of Directors to sanction any loan to the complainant. He agreed that the Board of Directors had to pass a resolution to sanction such a loan. He did not know whether the company could sanction a loan without the board resolution. He did not know the rate of interest charged by the company on such loan or the repayment schedule for the loan. He did not know whether any collateral security was obtained by the company for the loan.

20. So much for the defence of the company with regard to the admitted issue of the cheque - that was for a loan that never was.

21. The very letter dated 14th August, 2000 shows an agreement between the parties that was complete. Both the parties are bound by such an agreement. No party can resile from such an agreement. The party which resiles would be breaching the agreement. If the company, upon discussions, "mutually agrees" to give a loan of Rs.5 lakhs, it cannot resile from that agreement on the ground that it was not possible, if it was decided to grant the loan which decision was mutually taken after discussions had by the parties to the agreement. Hence, even if the accused Company had agreed to give a loan to the complainant for which it issued a cheque, that agreement is enforceable. The discussions had between the parties itself show that the consideration under the cheque admittedly drawn by the company represented a legally enforceable liability of the company. After those discussions if a cheque is issued it will have to be honoured, and if it is dishonoured the company would have to show how it is justified in dishonour it. That would be the defence of the company in an action upon dishonour of the cheque, which was admittedly drawn and which carried the statutory presumption under Section 139 of the Negotiable Instruments Act. If upon the case of the company that there was an agreement to grant a loan, the company issued a cheque, the company must honour the cheque. The company has not shown why it is justified in dishonouring the cheque except that it is "presently not possible" and that the company is "unable to realise the payment". Even if that is so the defence of the company for dishonour of the cheque is not made out. The company would be liable to honour the cheque already issued upon the agreement between the parties be it for loan or otherwise. The company's lack of possibility or inability to realise the funds is no ground to dishonour the cheque issued by way of fulfilling its obligations under the admittedly executed and completed contract between the parties.

22. D.W.1 who is the officer-in-charge of administration of the company was shown the letter dated 14th August, 2000 in his cross-examination. He has not been able to identify the signature of the signatory of the said letter who is shown as the authorised signatory of the company. The letter is shown to be sent by registered post A.D. He has not been able to produce the postal acknowledgment of the letter, though he took time to check the records to produce the acknowledgment card. He has been shown the envelope in which the letter was received by the complainant. He stated that he was not aware that it was sent by his company in that envelope.

23. The complainant has admittedly received the company's letter dated 14th August, 2000 by post. It is therefore marked an Exhibit in evidence (See Bishwanath Rai Vs. Sachidanand Singh, AIR 1971 SC 1949 @ 1953) this would show the mere fact that it was sent and received. It would not prove the truth of its contents (See Madhoklal Sudham AIR 1954 Bom. 305; Re: Mubarak Ali, AIR 1957 SC 856; Re: Sir Mohammed Yusuf, AIR 1968 Bom. 112 and Om Prakash Berlia Vs. Unit Trust of India, AIR 1983 Bom. 1). He has admittedly not replied to it. Much ado made about that fact in the cross-examination. The complainant has stated that he has not replied to it as it was completely false. The parties were not litigants. A mere lack of reply, therefore, cannot prove the truth of the contents of the letter which have not been proved even by examination of the officer-in-charge of the administration of the company, D.W.1 who has even failed to identify the signature of the signatory to the letter and in view of the complete lack of any other corroborative evidence or the probabilities of the issue of the letter.

24. The company had sent the complainant the letter dated 14th August, 2000. The company has based its entire defence to the criminal action under the dishonoured cheque based upon the letter dated 14th August, 2000 in a bid to rebut the statutory presumption that arises out of the admittedly drawn and issued cheque by a Director of the company on behalf of the company for the contract admittedly entered into upon discussions by the company with the complainant. The letter bears an illegible signature. The witness examined by the company is the officer-in-charge of the administration of the company. That witness when shown the letter has been unable to identify the signature on the letter. He admitted that he did not know the name of the signatory who has signed as "Authorised Signatory". It must be remembered that 5 days before that letter the same witness D.W.1 had signed the letter dated 9th August, 2000 of the company as "Accounts Department". He is, therefore, a competent witness to depose about his colleague in his company who has signed the letter 5 days thereafter. Yet he has not identified the signatory. The signatory of the letter dated 14th August, 2000 has not been examined. The contents of the letter dated 14th August, 2000 are, therefore, also not proved though it has been marked exhibit based upon the only fact that it was received by the complainant.

25. The reliance by the company upon its own letter dated 9th August, 2000 stating that it was forwarding a cheque of Rs.6 lakhs towards sale of the shares and contending that the complainant did not present that cheque for payment is a needless issue with which the present case relating to the dishonour of the cheque is completely unrelated and unconcerned and has been brought up only to confuse the otherwise clear liability of the company under the cheque admittedly issued by it. The learned Judge has however, allowed evidence to be led on the issue of the letter dated 9th August, 2000 allegedly forwarding the cheque of Rs.6 lakhs thereunder. The presentment of that cheque has not been shown in the evidence of the defence witness though time was granted for that purpose. The issue of a specific cheque from the counterfoil cheque book of the company has not been shown by the company in the trial or even upon this Court's query.

26. To make matters worse and to make the confusion complete, however unsuccessfully, two letters dated 9th August, 2000 are sought to be produced in the trial Court and have been marked Exhibits-41 and 42 upon the evidence of D.W.1 that they were issued. Both the letters relate to the cheque for Rs.6 lakhs. It was the admitted sale price for the sale of 50,000 shares of Zuari Finance Limited @ Rs.12/- per share. One letter addressed to the complainant is signed by D.W.1 himself as "Accounts Department". It shows the date of he cheque without any further particulars of the cheque. It shows that the cheque is dated 10th September, 2000. The witness has deposed that he has signed the letter and identified its contents. The contents of the letter marked Exhibit-41 may be taken to be proved upon the evidence of D.W.1. He has deposed that it was a computer print-out. The letter Exhibit-41 does not show the number of the cheque or the bank upon which it was drawn.

27. The other letter also dated 9th August, 2000 marked exhibit-42 in evidence shows the said cheque of the said date and the said amount also containing further particulars with regard to the number and the bank upon which it was drawn. It shows that it bore No.504053 and was drawn on United Western Bank Limited, Fort, Mumbai. That cheque is not signed by D.W.1. It bears an illegible signature of "Accounts Department". It does not show the name of the signatory. Though D.W.1 was in the accounts department of the same company on that day, he has not identified the signature of that letter as that of his colleague.

28. During the cross-examination, D.W.1 was questioned as to whether the cheque of Rs.6 lakhs was encashed by the complainant. On 5th January, 2007 in his cross-examination he stated that he would have to check the record. On 20th January, 2007 he stated that he has forgotten to check the details and requested more time to check the records. On 23rd February, 2007 he deposed that cheque bore No.107354 of Union Bank of India. The account number of the company was 55125. He deposed that the cheque was not encashed. He has not shown the documentary evidence which would prove that the cheque was issued and not encashed in the trial court. Mr. Ponda was specifically called upon to produce the bank records of the company to show that this very cheque was not encashed though other cheques in that series were encashed. Mr. Ponda again called for instructions but which have not been received and shown to Court. Strangely though the witness deposed that the relevant cheque bore No.107354 the letter dated 9th August, 2000 Exhibit-42 shows that the cheque bore No.504053. Though the deposition of D.W.1 shows that the cheque was drawn on Union Bank of India, the letter dated 9th August, 2000 Exhibit-42 shows that the cheque was drawn on United Western Bank Ltd., Fort Mumbai. So much for the cheque that never was.

29. The transaction took place on 31st July, 2000 yet the cheque has been dated 29th July, 2000. It has been issued duly filled-in by the company yet the complainant has been cross-examined upon its date. The complainant has stated that he does not know why the cheque was dated 29th July, 2000 when the transaction between the parties for sale of shares of Zuari Finance Limited took place on 31st July, 2000 after discussions between them.

30. The complainant has been cross examined upon why the cheque was not presented for payment until 17th August, 2000. The complainant has clarified in his cross-examination that was because the accused told him that the company was based in Goa and it would take time to transfer the amount from Goa to Mumbai.

31. The accused have also raised dispute about the very transfer of the shares though they claim to have issued the cheque for such transfer. They contend that the transfer is not effected. Why ever would they not cause the transfer to be affected if they issued the cheque towards such transfer is completely isoteric.

32. The complainant has relied upon the effectuation of the discussions by the very sale of the shares. The complainant has produced the xerox copy of the share certificates themselves. These show the last transaction dated 7th August, 2000. The company claims that the shares have never been transferred though the company also claims that the cheque of Rs.6 lakhs towards the entire sale price of the shares was issued. The company has relied upon two letters between the two sister concerns being the company and Zuari Finance Limited dated 15th June, 2005 and 15th July, 2005. The company asked its sister concern whether the shares of the complainant were transferred to their name. Its sister concern informed the company that the shares of the complainant were not transferred. The company in which the complainant held the shares is a listed company. It would have declared dividends in the years between 2001 to 2005-2006. These letters are of the year 2005, 4 years after the complaint came to be filed and 5 years after the transaction came to be entered into. There is absolutely no circumstantial or substantial evidence showing that the complainant continued to be a member of the company and continued to enjoy the rights of the membership of the company pursuant to continuing as such member.

33. It is futile to contend that there was no transaction for transfer of shares and to merely bring on record by two letters that the shares were not transferred in favour of the accused company in view of its own letter dated 9th August, 2000 sending the cheque representing the share transfer price to the complainant.

34. As against this the complainant has shown the strongest possible circumstance of the transaction for sale of shares between the parties being the effectuation of the transfer itself. The complainant ceased to be a member. The company became a member in its sister concern. The complainant would have thereafter no further documentary evidence to further substantiate the transaction.

35. The copies of the share certificates produced by the complainant was shown to the witness who deposed on behalf of the company D.W.1. D.W.1 was asked to identify the initials on the reverse of the share certificates showing the person who signed the share certificates on behalf of the company upon the seal of the company with regard to the last transfer of the shares from the complainant to the company. Since the company was the transferee/purchaser/buyer of the shares to become its member and to obtain membership rights under the Companies Act, 1956. The witness who is an officer in the administration of the company could not identify the initials. He was asked if the signatures were of Mr. Javkar (Mr. Javkar is stated to be the Chartered Accountant of the company). The witness stated that he required time to check up the records on 5th January, 2007 when he was being cross-examined. On 23rd February, 2007 he deposed that the share certificates and the signatures thereon were not available in the company's records and he was not aware that it bore the signature of the Sanjay Javkar on behalf of the company.

36. The original share certificates are required to be lodged by the transferee/purchaser/buyer of the shares with the company for effecting the transfer to obtain membership rights. Hence, the transferor/seller of the shares would require to give the original share certificates to the buyer. He would obtain and get for himself only its xerox copies for his record. When the transaction took place between the parties on 31st July, 2000 and the cheque dated 29th July, 2000 was issued in part payment of the price of the shares sold by the complainant as the transferor to the company as the transferee, the complainant could have been given copies of the share certificates. The complainant can therefore, produce only such copies in the Court. It is for the company to produce the original share certificates. If the company does not produce the original share certificates, the copies of the share certificates produced by the mechanical process of obtaining xerox copies/photo copies would be admissible in evidence as secondary evidence being copies of the original documents taken out by such mechanical process. Copies of the share certificates showing a transfer duly executed produced by the complainant are, therefore, rightly taken on record as exhibits and the witness on behalf of the company has been shown the said share certificates to be able to explain the last transfer entries.

37. It may be mentioned that unless the complainant delivered the original share certificates he would not have been paid the consideration for the shares. It may also be mentioned that unless the company registered the transfer it would not have obtained the benefits of the transfer of shares. The company would require to show the original share certificates also to its Auditors to justify the consideration paid for such transfer. Consequently the original share certificates must be taken to be in the custody and possession of the company. The company having not produced it from such proper custody, an adverse inference that if such certificates were produced, it would show the transfer of the shares in favour of the company would be required to be drawn. In fact the document would show a legitimate transfer provided, of course, it is a transfer for consideration. It would estop the complainant from contending otherwise. It is only because the company has got the shares transferred in its name, but has not shown the payment made for the transfer, that the company has not produced the original share certificates. Consequently the copies of the share certificates produced by the complainant on record must be accepted as genuine secondary evidence. So much for the share certificates that are proved.

38. The cheque has been issued by the company. It is signed by its Director. The complainant may not know which Director signed the cheque as the cheque may or may not be signed in the presence of the complainant. In this case the complainant deposed that the cheque which came to be dishonoured was signed by Dr. Praful Hede. The complainant was asked in his cross-examination how he made that statement. Thanks to the cross-examination, the complainant has clarified that he stated so because he was told so by Sanjay Javkar who was the Chartered Accountant of the company. D.W.1, who was looking after the administration of the company, has been examined as the witness of the defence. He is the competent witness in as much as he was admittedly looking after the administration. On 27th December, 2006 in his cross-examination he was shown the cheque. He had deposed that he did not recognise the signature and would have to check the record. The cheque is admittedly issued by the company. It has to be signed atleast by one of its Directors. The officer-in-charge of administration was required to ascertain who was that Director. On 20th January, 2007 the witness was again shown the cheque. He deposed that the cheque was signed by Mr. Samit Hede. He identified the signature of the Director of his company Mr. Samit Hede. That is therefore, an admitted position. Dr. Praful Hede would not be liable upon the cheque as he is not the signatory on the cheque. Mr. Samit Hede would only be liable as the Director of the company who signed the cheque. (see K. K. Ahuja Vs. V. K. Vohra, 2009(8) SCC 691 : [2009 ALL SCR 1524] considering S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla, 2005 SCC (Cri.) 1975 : [2005(5) ALL MR 1118 (S.C.)]; Sabitha Krishnamurthy Vs. Chenna Basavaradhya, AIR 2006 SC 3086).

39. It is argued on behalf of the company by Mr. Ponda that this fact has not been put to Mr. Samit Hede, who is one of the accused and who has been convicted by the learned Magistrate, in his 313 statement and therefore, the conviction is bad. It may be said that this argument is bad instead. The evidence that is required to be put to the accused under Section 313 of the Cr.P.C. is the evidence of the prosecution which is disputed by the accused. Admitted facts do not have to be proved. Hence, admitted facts are not required to be put to the accused. The admissions of the accused is not a part of the prosecution case, but is a case either in his 313 statement itself or in the evidence of the witness produced by the accused as defence witness. The purpose and object of Section 313 is to enable the accused to explain the circumstances against him. Those are therefore, the circumstances that are brought out by the prosecution against the accused. Those are not the circumstances that the accused himself brings up before the Court as a part of his case. It has not been contended on behalf of the accused that the letter dated 14th August, 2000 should have been put to the accused. That is because that is the case of the accused himself/itself. Similarly the other part of the case of the accused is that not Dr. Prafful Hede, but Mr. Samit Hede, drew the cheque. That has been deposed and clarified in the cross-examination of D.W.1. Consequent upon that cross-examination Dr. Prafful Hede could not be convicted despite the evidence of the complainant. He has been rightly acquitted by the learned Magistrate. It is too mischievous to suggest that no Director of the Company could have drawn the cheque, which is admittedly drawn by and on behalf of the company. All that the trial has to consider is which of the Directors drew the cheque. Under the facts which are brought out in this trial by the defence witness himself, it is seen that no Directors other than Mr. Samit Hede signed the cheque which came to be dishonoured. The liability under the dishonoured cheque is only of Mr. Samit Hede and none else. The liability is shown by the witness of the Accused. His liability is admitted, complete and total. A host of judgments, under Section 313 of the Cr.P.C. relied upon by Mr. Ponda, none of which show that facts brought out in the evidence of the defence itself must be put to the Accused (See Ranvir Yadav Vs. State of Bihar, 2009 ALL MR (Cri) 2089 (S.C.); Naval Kishore Singh Vs. State of Bihar, 2004 Cri.L.J. 4252; Naval Kishore Singh Vs. State of Bihar, 2004 SCC (Cri) 1967; Latu Mahto & Anr. Vs. State of Bihar, (2008)3 SCC (Cri) 500; Shaikh Maqsood Vs. State of Maharashtra, 2009(2) Bom.C.R. (Cri.) 273 : [2009 ALL SCR 1596]; State of Punjab Vs. Hari Singh & Ors., (2009)2 SCC (Cri) 243 : [2009 ALL SCR 2225]; State of Punjab Vs. Swaran Singh, 2005 SCC (Cri) 1359; Sharad Birdhichand Sarda Vs. State of Maharashtra, AIR 1984 SC 1622 : [2009 ALL SCR (O.C.C.) 281]) need not be adverted to.

40. In a vain attempt to show a case on behalf of the company Mr. Ponda drew my attention to the copy of the application of the company itself filed in this Court being the above Criminal Revision Application to show that it has not been verified and signed by the complainant. The application is a typewritten copy. The Advocate for the company has not even certified it to be a true copy of the original record. The argument must be left at that notwithstanding a compilation of judgments which need not be adverted to.

41. It has been argued on behalf of the company that the impugned orders have not applied the Probation of Offenders Act which are required to be applied in this case since it involves an offence punishable with an imprisonment of less than 7 years under Section 360 of Cr.P.C. and since the special reasons for not applying the Probation of Offenders Act and according them special treatment thereunder are not stated, the orders are bad. Section 360 makes special provisions only for minors or women. Those two categories of persons have to further qualify to be first time offenders without any previous conviction show their age, without any previous antecedents and the circumstances in which the offences were committed and the Court must be specified that they may be released on probation of Good Conduct. If they were such offenders then alone under Section 361 of the Cr.P.C. the Court would have to record special reasons for not granting them the special treatment.

42. Mr. Ponda drew my attention to a host of decisions in various other legislations in which the Probation of Offenders Act has been applied or in which the Probation of Offenders Act has been directly legislated not to apply (along with irrelevant decisions relating to quashing of complaints) (See Pawan Kumar & Ors. Vs. State, 2004 Cr.L.J. 2310; MCD Vs. State of Delhi, 2005 SCC (Cri.) 1322; Balbir Singh Vs. The State of Punjab, 2004 Cri.L.J. 1864; Ved Prakash Vs. State of Haryana, 1981 Cri.L.J. 161; Mohammad alias Biliya Vs. State of Rajasthan, 2001 SCC (Cri) 1497; Masarullah Vs. State of Tamil Nadu, 1983 Cri.L.J. 1043; Mohamed Aziz Mohamed Nazir Vs. State of Maharashtra, AIR 1976 SC 730; Darshan Kumar Vs. Secretary, Municipal Corpn. Jabalpur, AIR 1973 SC 906 (V 60 C 199); Dalbir Singh Vs. State of Haryana, 2004 SCC (Cri) 1208; Commandant, 20th Battalion, ITB Police Vs. Sanjay Binjola, 2001 SCC (Cri) 897 : [2001 ALL MR (Cri) 1022 (S.C.)]; Bishnu Deo Shaw Vs. State of West Bengal, AIR 1979 SC 964; Constancio Figueiro of Guirim Vs. State Criminal Procedure Code, Sections 360 and 361; Ram Prakash Vs. The State of Himachal Pradesh, AIR 1973 SC 780; Rattan Lal Vs. The State of Punjab, AIR 1965 SC 444 (V 52 C 72); Keshav Sitaram Sali Vs. State of Maharashtra, AIR 1983 SC 291; Ratilal Prithviraj Bafna Vs. Purshottam K. Kone, AIR 1979 SC 1284; Roshanali Burhanali Syed Vs. State of Gujarat, AIR 1982 SC 784 (1); State of Orissa Vs. Debendra Nath Padhi, AIR 2005 SC 359 need not be adverted to. (B)).

43. Mr. Ponda argued that criminal prosecution under Section 138 of the Negotiable Instruments Act, which is in the nature of Civil proceedings, essentially qualify for applicability of the Probation of Offenders Act, the procedure required under Section 360 of the Cr.P.C. is to be followed because they are essentially commercial disputes where the accused, more specifically those who are Directors of the Companies, are not prone to criminality.

44. Mr. Chaudhary on behalf of the accused argued that criminal proceeding under Section 138 is not amenable to the grant of probation as held by the Single Judge of the Kerala High Court in the case of M. V. Nalinakshan Vs. M. Rameshan, 2009 Cr.L.J. 1703 : [2009 ALL MR (Cri) JOURNAL 273]. The Court has considered in detail how and why the Probation of Offenders Act would not apply to such criminal proceedings. In that case the learned Magistrate invoked Section 4(1) of the Probation of Offenders Act upon conviction of the accused under Section 138 of the Negotiable Instruments Act without even calling for the report required under the aforesaid provisions upon the premise that no moral turpitude or mens rea were involved in that case. The Court considered the impact of adverse effect on the society consequent upon letting off offenders on probation indiscriminately and upon considering the objects and provisions of the Probation of Offenders Act. It observed that the Court would have to consider whether in a given case it was apt and suitable to the end in view and would not apply to Section 138 of the Negotiable Instruments Act as an expedient mode of disposal of those cases. The Court considered the scheme of the Negotiable Instruments Act which is to compensate the payee for the loss and injury suffered. It observed that the responsibility of awarding compensation was bestowed on the Court. The act of dishonour was observed not to be an emotional act done under any compulsion of circumstances and hence a person who dishonours the cheque cannot alone be asked to maintain good behaviour and keep peace in the locality for any period whatsoever by executing a bond in that behalf.

45. I agree that no purpose will be served, nay it would be a mockery of law to call upon an inanimate legal person like the accused Company or one or some of its Directors to maintain good behaviour (though it may include honouring of cheques and also honouring of other promises) and to keep peace. I also agree that the scheme of the Act is to compensate the payee. The extent of the compensation has also been set out. The fine/compensation to be levied may extend to double the amount of the compensation payable under the aforesaid Section.

46. It is true that the essential lis between the parties in a criminal prosecution under Section 138 of the Negotiable Instruments Act, as in this case also, is essentially a commercial dispute amenable to the jurisdiction of the Civil Court which could be tried upon payment of ad valorum Court fee. It is only upon the statutory provision being made that a criminal proceeding comes into effect.

47. The complainant in this case has sought return of his investment. He invested in a listed company. Had the agreement between the parties been honoured he would have received a fair return on his investment as per his agreement. He has been denied that return. The denial is not simplicitor made. The denial is upon a false excuse set out together with a fabrication of another false case. Nevertheless compensatory relief to the complainant which is required to be granted in a commercial transaction of the kind as in this case would be more appropriate than allowing him to avenge himself by imprisoning the relevant Director of the accused Company whatever be the satisfaction that may be derived by the Complainant from such culmination of his litigation. A case such as this is a fit case where the highest extent of compensation is required to be granted to the Complainant. That would be double the amount of the cheque. This may be granted to the Complainant in alternative of the sentence of imprisonment which could be awarded if the accused Company and its relevant Directors see reason and make amends by accepting this extent of compensation/fine within a reasonable period. In the absence of such acceptance by payment the interference with the concurrent convictions made against the accused Company and its Director would not deserve to be made as it is seen that the company has not only dishonoured the cheque admittedly issued by the company without any reason or cause but has fraudulently set up a dishonest defence. It is seen that the statutory presumption of the passing of consideration under the cheque issued in favour of the complainant as its holder and payee has not been rebutted. The defence sought to be shown is moonshine. The defence does not show how and why the cheque issued cannot be presented for payment and honoured by the company's bankers. It has not shown by which other mode the consideration that passed under the cheque came to be legitimately paid to the complainant so that the liability under the cheque could not then be enforced. It has not shown the encashment of the cheque of the Company when the company claims to have issued another cheque for transfer of the shares being the cheque for Rs.6 lakhs purportedly sent to the complainant, but not encashed by him.

48. The conviction must therefore, be maintained. The only concession that can be shown to the company would be to defer the sentence of imprisonment for a reasonable time until the complainant is fully compensated on account of the loss caused to the complainant by not only the dishonour of the cheque, but a dishonest defence for such dishonour whilst monies lawfully due to him remained with the accused Company.

49. The amount of Rs.5,50,000/- has been deposited. The company therefore, claims that the compensation granted has been paid.

50. If the company deposits in this Court a sum of Rs.5,00,000/- within 4 weeks from today the substantive sentence of the imprisonment of accused No.4 as the Director of the company shall be set aside. If the company fails to deposit the said amount within 4 weeks from today, the accused No.4 Mr. Sameet @ Sumit @ Sameer Hede, shall be taken in custody to serve the sentence imposed upon him by the lower Court.

51. The complainant shall be entitled to withdraw Rs.5,50,000/- already deposited in the Court by the company.

52. The complainant shall also be entitled to withdraw the further sum of Rs.5,00,000/- to be deposited.

53. The Criminal Revision Application is disposed off accordingly.

Ordered accordingly.