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IN THE HIGH COURT OF KARNATAKA AT BENGALURU R
DATED THIS THE 6TH DAY OF JANUARY, 2021
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL APPEAL No.1145/2011
C/w CRIMINAL APPEAL Nos.1135/2011, 1146/2011
IN CRIMINAL APPEAL No.1145/2011:
BETWEEN:
M/S. NATIONAL AGRICULTURAL CO- OP.
MARKETING FEDERATION OF INDIA LTD. (NAFED)
BRANCH OFFICE, NO.8,
CUNNINGHAM ROAD,
BENGALURU - 560 052.
REPRESENTED BY ITS
BENGALURU BRANCH MANAGER. ... APPELLANT
(BY SRI GIRIDHAR H., ADVOCATE)
AND:
1. M/S. DISHA IMPEX (PVT.) LTD.,
HAVING ITS REGISTERED OFFICE AT Z-17,
BASEMENT HAUSKHAS,
NEW DELHI - 110 016,
REPRESENTED BY SRI NIRANJAN JAYANTHILAL.
2. SRI NIRANJAN JAYANTHILAL,
DIRECTOR,
M/S. DISHA IMPEX (PVT.) LTD.,
HAVING ITS REGISTERED OFFICE AT Z-17,
BASEMENT HAUSKHAS,
NEW DELHI - 110 016. ... RESPONDENTS
(BY SRI TRIDEEP PAIS, ADVOCATE FOR
SRI B.S. RADHANANDAN, ADVOCATE FOR R-1 AND R-2)
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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
CR.P.C PRAYING TO QUASH THE JUDGMENT IN CRIMINAL CASE
BEARING NO.14692/2007 DATED 20.08.2011 IMPUGNED IN THIS
APPEAL PASSED BY THE XX ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY, ACQUITTING THE RESPONDENT/
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF
N.I. ACT.
IN CRIMINAL APPEAL No.1135/2011:
BETWEEN:
M/S. NATIONAL AGRICULTURAL CO-OP.
MARKETING FEDERATION OF INDIA LTD. (NAFED),
BRANCH OFFICE,
NO.8, CUNNINGHAM ROAD,
BENGALURU-560 052.
REPRESENTED BY ITS
BANGALORE BRANCH MANAGER
SRI N. KADHRIVELU. ... APPELLANT
(BY SRI GIRIDHAR H., ADVOCATE)
AND:
1. ADITHYA MINERALS,
NO.403, 15TH WARD,
NEAR CHIRANJEEVI HOSPITAL,
AMARAVATHI,
HOSPET - 583 201.
REPRESENTED BY ITS
AUTHORIZED SIGNATORY.
2. M/S. DISHA IMPEX (PVT.) LTD.,
HAVING ITS REGISTERED OFFICE AT Z-17,
BASEMENT HAUSKHAS,
NEW DLEHI - 110 016.
REPRESENTED BY
SRI NIRANJAN JAYANTHILAL. ... RESPONDENTS
(BY SRI TRIDEEP PAIS, ADVOCATE FOR
SRI B.S. RADHANANDAN, ADVOCATE FOR R-1 AND R-2)
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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
CR.P.C PRAYING TO QUASH THE JUDGMENT IN CRL. COMPLAINT
BEARING NO.17140/2007, DATED 20.08.2011 PASSED BY THE XX
ADDL. CMM., BENGALURU, ACQUITTING THE RESPONDENTS/
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138
OF N.I. ACT.
IN CRIMINAL APPEAL No.1146/2011:
BETWEEN:
M/S. NATIONAL AGRICULTURAL CO-OP
MARKETING FEDERATION OF INDIA LTD. (NAFED),
BRANCH OFFICE, NO.8,
CUNNINGHAM ROAD,
BENGALURU - 560 052.
REPRESENTED BY ITS
BENGALURU BRANCH MANAGER
SRI N. KADRIVELU. ... APPELLANT
(BY SRI GIRIDHAR H., ADVOCATE)
AND:
1. M/S. DISHA IMPEX (PVT.) LTD.,
HAVING ITS REGISTERED OFFICE AT Z-17,
BASEMENT HAUSKHAS,
NEW DELHI - 110 016,
REPRESENTED BY SRI. NIRANJAN JAYANTHILAL.
2. SRI NIRANJAN JAYANTHILAL,
DIRECTOR,
M/S. DISHA IMPEX (PVT.) LTD.
HAVING ITS REGD OFFICE AT Z-17,
BASEMENT HAUSKHAS,
NEW DELHI - 110 016. ... RESPONDENTS
(BY SRI TRIDEEP PAIS, ADVOCATE FOR
SRI B.S. RADHANANDAN, ADVOCATE FOR R-1 AND R-2)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
CR.P.C PRAYING TO SET ASIDE THE JUDGMENT IN CRIMINAL CASE
BEARING NO.14691/2007 DATED 20.08.2011 IMPUGNED IN THIS
APPEAL PASSED BY THE XX ADDITIONAL CHIEF METROPOLITAN
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MAGISTRATE, BENGALURU CITY ACQUITTING THE RESPONDENTS/
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138
OF N.I.ACT.
THESE CRIMINAL APPEALS HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 23.12.2020, THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
JUDGMENT
These appeals are filed challenging the judgment of acquittal dated 20.08.2011 passed in C.C.Nos.14692/2007, 17140/2007 and 14691/2007 respectively, on the file of the XX Additional Chief Metropolitan Magistrate, Bengaluru.
2. All the three appeals are taken up together since the complainant and the accused are common in C.C.Nos.14692/2007 and 14691/2007. The very same accused is accused No.2 in C.C.No.17140/2007 and accused No.1 is Aditya Minerals represented by the same accused. Though the independent witnesses of P.W.1 are examined, all the witnesses are one and the same and documents in C.C.Nos.14692/2007 and 14691/2007 are similar both in respect of the complainant and the accused. The documents in C.C.No.17140/2007 are also similar, but there are slight changes. The judgments are also independently delivered by the Trial Court by the very same 5 Presiding Officer, hence all these appeals are taken up together for common disposal.
3. The parties are referred to as per their original rankings before the Trial Court as complainant and accused in order to avoid the confusion and for the convenience of the Court.
4. The factual matrix of the case is that the complainant is a Central Government undertaking and had entered into a Memorandum of Understanding ('MOU' for short) on 10.03.2004 with accused No.2 to finance accused No.1 Company for procurement of Iron Ore to the tune of Rs.11.86 Crores and the complainant would fund 80% of the estimated cost subject to actuals and accused No.2 would pay the remaining 20% simultaneously proportionate to the draw down.
5. In connection with this transaction pertaining to the MOU dated 10.03.2004, the accused had issued a cheque for Rs.1 Crore dated 28.08.2006 in C.C.No.14691/2007, cheque dated 28.08.2006 for Rs.1.5 Crores in C.C.No.14692/2007 and cheque for Rs.1 Crore dated 28.11.2006 in C.C.No.17140/2007. When these cheques were presented, they were dishonoured 6 with an endorsement "funds insufficient". Hence legal notice was issued on 21.02.2007 in respect of C.C.Nos.14691/2007 and 14692/2007 and legal notice dated 11.01.2007 was issued in respect of C.C.No.17140/2007. All these notices were served against the accused. Inspite of service of notice, the accused did not comply the demand and hence the complainant was forced to file separate independent complaints against the accused persons.
6. The complainant in order to substantiate the case in C.C.Nos.14691/2007, 14692/2007, examined one witness Sri R. Sundararajan as P.W.1 and got marked the documents at Exs.P.1 to 8. The accused though not led any defence evidence, confronted the documents and got marked the documents at Exs.D.1 to 9. In C.C.No.17140/2007, the complainant got examined one witness Sri R. Sundararajan as P.W.1 and got marked the documents at Exs.P.1 to 13. The accused though not led any defence evidence, confronted the documents and got marked the documents at Exs.D.1 to 10. The Trial Court recorded the statement of the accused under Section 313 of Cr.P.C. and the accused did not choose to lead any evidence. The Trial Court after considering both oral and documentary 7 evidence placed on record, acquitted the accused and hence the present appeals are filed before this Court.
7. The complainant/appellant in Crl.A.Nos.1145/2011, 1135/2011 and 1146/2011 has urged the common grounds in the appeal contending that the Trial Judge without properly appreciating the evidence of P.W.1, committed an error in acquitting the accused. The Trial Judge also failed to appreciate the law laid down in the judgment reported in 1996 (1) Crimes 454 and 2010 (1) KCCR 176, since the accused utterly failed to rebut the presumptions available in favour of the complainant.
8. The Trial Judge also erred in not considering that accused Nos.1 and 2 have not entered into the witness box and are not entitled to take advantage of the case of the complainant without placing any evidence by entering into the witness box. As such the complainant was denied the opportunity of cross- examining the accused. The Trial Court also erred in relying on the complaints preferred by the complainant Company in the arbitration petition preferred at New Delhi with regard to many other transactions that had taken place between the complainant and accused No.1 and the Trial Judge ought not to have taken 8 into consideration the arbitration proceedings. The present proceedings was initiated only in respect of return of the cheque issued in favour of the complainant which were dishonoured. The Trial Judge also erred in holding that the complainant himself was due money to accused No.1 based on a cheque issued in favour of accused No.1 by the complainant Company. The said cheque was issued to the accused with regard to other transactions under which the complainant Company has issued the cheques out of the exports proceeds realized as per the terms of the MOU dated 10.03.2004.
9. The complainant apart from these grounds urged in the above appeals, in Crl.A.No.1135/2011 urged two other additional grounds contending that the Trial Court failed to appreciate the additional affidavit filed by the complainant rectifying the mistakes of the original complaint. The Trial Judge has not considered the evidence of the complainant wherein he has categorically stated that accused No.2 had written a letter dated 08.12.2006 not to present the cheque even though the cheque was supposed to have been cleared immediately after 06.12.2006.
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10. The learned counsel appearing for the appellant in all the appeals would submit that there was a MOU between the parties to procure the minerals and export the same. In terms of the MOU dated 10.03.2004, which is marked as Ex.P.8, it was agreed to pay 80% by the complainant and remaining 20% by the accused. As per Clause No.19 of the MOU, that in case of breach of any terms and conditions of this agreement by the accused, the complainant shall be at liberty to terminate the agreement forthwith and deal with or dispose of the goods lying in its custody and realize the money for the same and that in the process if the complainant suffers any loss of their investment or returns thereon, the same shall be payable by the accused.
11. The learned counsel also brought to the notice of this Court Clause No.2 of the MOU with regard to expected cost of the proposed procurement of Iron Ore in Crores detailed in the MOU to the tune of Rs.14.82 Crores. The learned counsel also brought to the notice of this Court Clause No.9 of the MOU with regard to the ready stock disbursement of the funds will be at site and before actual disbursement the accused shall submit invoice in favour of the complainant, certificate of SGS in respect of quality and quantity of material, physical inspection of 10 material, insurance cover, security arrangement of material and lease of yard duly transferred in the name of the complainant.
12. The learned counsel for the complainant would also submit that the procurement of iron was not exported and the stock was missing. The learned counsel would submit that in order to substantiate the case of the complainant, the complainant examined one witness as P.W.1 and also filed the additional affidavit. The evidence of P.W.1 would substantiate the case of the complainant. The Trial Judge has committed an error in shifting the burden on the complainant. Inspite several documents are produced and the accused has admitted the cheque, the Trial Judge ought to have drawn the presumption under Section 139 of the Negotiable Instruments Act ('N.I. Act' for short). The reasoning given by the Trial Court with regard to the existence of the liability is erroneous. The defence taken by the accused is that the cheques were given as security and not for any liability. In order to substantiate the said contention, the accused failed to step into the witness box and not led any evidence. The learned counsel would submit that in terms of the MOU, there was no terms or conditions to furnish the cheque as security and what made to issue the cheque as security, nothing 11 is placed on record. More than 10 cheques are issued and notices were also issued against the accused and the accused did not give any reply.
13. The defence relies upon the documents Exs.D.2 to 4 i.e., the complaint filed at Delhi and the same is in respect of different transactions. The accused also relied upon Ex.D.5, evidence adduced before Delhi. Ex.D.9 is the document of initiation of the arbitration proceedings. The Trial Judge after considering both oral and documentary evidence placed on record has not held that the preponderance of probabilities has been made out by the accused and instead of relied upon Ex.D.6 erroneously. The actual documents which have been placed before the Trial Court supports the case of the complainant. Inspite the complainant proved the case beyond reasonable doubt, the Trial Judge committed an error. The judgments which the accused relies upon are prior to amendment to Section 138 of the N.I. Act and even though the accused has not probalised the case and in the MOU there is no any averment with regard to furnishing of the security, the Trial Judge has committed an error in coming to the conclusion that the defence of the accused is probable.
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14. The other contention of the learned counsel is that the Trial Court has observed that the very presentation of the cheques are premature and contend that the Trial Judge has committed an error that unless the accounts are finalized, the complainant ought not to have presented the cheques. Inspite of service of notice, the accused has not given any reply and also no payment has been made subsequent to the receipt of notice also. When such being the case, the Trial Judge ought to have drawn the presumption mandated under Section 139 of the N.I. Act.
15. The learned counsel for the complainant in support of his contentions, he relies upon the judgment of the Apex Court in the case of ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT AND ANOTHER reported in AIR 2019 SC 1876. Referring paragraph No.17 of the judgment, the learned counsel would submit that once presumption of existence of legally enforceable debt drawn in favour of the complainant, onus is shifted on the accused. Unless onus is discharged by the accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to the 13 accused. The learned counsel referring paragraph No.18 would submit that failure of the accused to show reasonable probability of existence of no transaction has been made out. The accused not denied his signatures on cheques but attempting to suggest availability of his signatures and contending that the cheques are taken as security, cannot be accepted unless the accused makes out the preponderance of probabilities in his favour.
16. The learned counsel for the complainant also relied upon the judgment of the Apex Court in the case of BIR SINGH v. MUKESH KUMAR reported in (2019) 4 SCC 197. The learned counsel referring this judgment would submit that Section 139 of the N.I. Act raises presumption of law that cheque duly drawn was in discharge of debt or liability. However, the said presumption is rebuttable and the onus lies on drawer to rebut it by adducing cogent evidence to the contrary. The learned counsel referring this judgment would submit that the accused did not step into the witness box and not rebutted the presumption by adducing any cogent evidence.
17. The learned counsel also relied upon the judgment of the Apex Court in the case of UTTAM RAM v. DEVINDER 14 SINGH HUDAN AND ANOTHER reported in (2019) 10 SCC
287. The learned counsel referring this judgment would submit that in this judgment, the Apex Court held that matters to be established by the accused and bare denial of the passing of the consideration and existence of a debt, is not enough to rebut the presumption. To rebut the statutory presumptions, accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. Rather, something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. The learned counsel referring this judgment would submit that the accused did not choose to enter into the witness box and adduce any evidence and also not brought out any case shifting the burden of proof on the complainant.
18. The learned counsel for the complainant also relied upon the judgment of the Apex Court in the case of M/S. SHREE DANESHWARI TRADERS v. SANJAY JAIN AND ANOTHER passed in Criminal Appeal Nos.61-62/2011 and brought to the notice of this Court paragraph Nos.18 and 19 of the judgment, wherein the Apex Court has held that the courts below erred in not raising the statutory presumption under 15 Section 139 of the N.I. Act that the complainant received the cheques to discharge the debt or other liability in whole or in part. It is further observed that it is for the accused to adduce evidence to prove that the cheques were not supported by consideration and that there was no debt or liability to be discharged by him. The oral and the documentary evidence adduced by the complainant are sufficient to prove that it was a legally enforceable debt and the cheques were issued to discharge the legally enforceable debt. With the evidence adduced by the complainant, the courts below ought to have raised the presumption under Section 139 of the Act. The evidence adduced by the accused is not sufficient to rebut the presumption raised under Section 139 of the Act. The learned counsel referring this judgment would submit that the Trial Judge has committed an error in not drawing the presumption and also failed to take note of the fact that the material placed by the accused is not sufficient to rebut the presumption. Inspite of the accused has not placed the material to prove his case with preponderance of probabilities, the Trial Judge has committed an error.
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19. Per contra, the learned counsel appearing for the accused would submit that there is no dispute with regard to procurement of Iron Ore in terms of the MOU. It was agreed that the complainant has to fund 80% and the accused has to fund 20%. It is also agreed that after exporting the Iron Ore, the complainant has to deduct 80% interest cost of transportation, demurrages and if it exceeds, the accused to get the benefit of 20%. The learned counsel appearing for the accused brought to the notice of the Court the averments made in paragraph No.2 of the complaint and the complainant has not produced any documents except legal notice, but while adducing the additional evidence referred the document MOU. The learned counsel would submit that audited account statement was not produced and vessel is not nominated by China. The complainant recovered Rs.4-5 Crores and Ex.D.7 clearly discloses that part payment was made in favour of the accused and no documents is placed for having repaid the balance amount after sending the letter Ex.D.7. The accused relied upon documents Exs.D.1 to 9. The complainant sold the goods. The complainant relies upon the evidence of P.W.1 claiming the transaction is for Rs.11,50,57,488/- and in this regard also not produced the 17 statement of accounts. But in Ex.P.8 - MOU, it is mentioned that the transaction is to the tune of Rs.14 Crores. When the statement of account has not been produced and the accounts are not finalized, the question of issuing the subject matter of cheques does not arise.
20. The learned counsel also relies upon Ex.D.5, the answers elicited from the mouth of the witness at Delhi in criminal case and would submit that the very admission takes away the case of the complainant. Ex.D.6 is also clear with regard to the transaction not restricted to only in terms of MOU and more than Rs.30 Crores business was done. The learned counsel relying upon Ex.D.7 would submit that while making the payment of Rs.1.10 Crores, the liability of the complainant was admitted. The witness who has been examined before the Court would categorically admit that the averments made in paragraph No.2 of the complaint are false. When such admissions was elicited from the mouth of the witness, the very claim made by the complainant based on the averment made in paragraph No.2 would become fatal. It is also contended that before finalizing the accounts, the complainant had presented the cheques, which was issued for security. The complainant would also submit that 18 in C.C.No.17140/2007, in the cross-examination, the witness has categorically admitted with regard to the payment of Rs.1 Crore by Aditya Minerals.
21. The learned counsel for the accused in support of his contentions mainly relied upon the judgment of the Apex Court in the case of M.S. NARAYANA MENON v. STATE OF KERALA AND OTHERS reported in MANU/SC/2881/2006 and brought to the notice of this Court paragraph Nos.17, 19, 20, 21 and 23 of the judgment. For rebutting the presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. The learned counsel would submit that the standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies. It is not in dispute that transactions comprising purchases and sales of shares by investors is a matter of confidence. Both parties would have to rely upon one another. For the said purpose, the courts of law may also take judicial notice of the practice prevailing in such business. For proving the said transactions, books of accounts maintained by 19 respondent No.2 were found to be not reflecting the correct state of affairs. It was for the complainant only to discharge initial onus of proof. He was not necessarily required to disprove the prosecution case. The learned counsel referring this judgment would submit that the accused had made out a ground for preponderance of probabilities and the complainant has not placed any statement of account with regard to business transactions. Hence, this judgment is aptly applicable to the case on hand.
22. The learned counsel for the accused also relied upon the judgment of Delhi High Court in the case of PINE PRODUCT INDUSTRIES AND OTHERS v. R.P. GUPTA AND SONS AND OTHERS reported in MANU/DE/9749/2006. Relying upon paragraph No.6 of the judgment, the learned counsel would contend that no details whatsoever have been indicated as to what the liabilities were, what were the amounts for which the said cheque was issued for part payments, on which dates the amounts were taken by the petitioner. Nor were the exact amounts taken by the petitioner mentioned. The complaint was completely vague and bereft of any details.
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23. The learned counsel referring paragraph No.12 of the judgment would contend that if the petitioner is yet able to show from the evidence on record that the presumption is rebutted then the complainant must be able to establish from the evidence on record itself that a case under Section 138 is clearly made out. If the complaint is vague and bereft of any details regarding discharge, liability of repayment of the amounts, there cannot be any conviction in the criminal proceedings. The complaint is also silent with regard to what was the rate of interest, what was the extent of goods which were supplied and adjusted against the payment. When all these details are conspicuously absent, the accused cannot be convicted.
24. The learned counsel also relied upon the judgment of the Apex Court in the case of NATIONAL SMALL INDUSTRIES CORPORATION LTD. v. STATE (NCT OF DELHI) AND OTHERS reported in MANU/SC/4845/2008 and brought to the notice of this Court paragraph Nos.12 and 13 with regard to relying upon the evidence of the employees of the Government Company working in Public Limited Companies.
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25. The learned counsel also relied upon the judgment of the Apex Court in the case of BASANT SINGH v. JANKI SINGH AND OTHERS reported in MANU/SC/0284/1966 and brought to the notice of this Court paragraph Nos.4 to 6, wherein the Apex Court made an observation that they are unable to accept the line of reasoning with regard to correctness of the statement that she had surrendered her estate and was entitled to maintenance only. All the statements in the plaint are, therefore, admissible as evidence. However, the Court is not bound to accept all the statements as correct. The Court may accept some of the statements and reject the rest. The High Court also observed that an admission in a pleading can be used only for the purpose of suit in which the pleading was filed and also distinction between and admission made by a party in a pleading and other admissions. Under the Indian law, an admission made by a party in a plaint signed and verified by him may be used as evidence against him in other suits. In other suits, this admission cannot be regarded as conclusive, and it is open to the party to show that it is not true. The learned counsel referring this judgment would submit that Sections 17 to 21 of the Evidence Act comes to the rescue of the accused in view of 22 the admission given by P.W.1 in the cross-examination and also the answers elicited from the mouth of the witnesses of the Company in Delhi proceedings which has been marked as Ex.D.5.
26. The learned counsel also relied upon the judgment of this Court in the case of SHREYAS AGRO SERVICES PVT. LTD. v. CHANDRAKUMAR S.B. reported in MANU/KA/8224/2006 and brought to the notice of this Court paragraph No.3, wherein it is held that the words "for discharge of any debt or other liability" in Section 138 of N.I. Act should be interpreted to mean current existing or past ascertained liabilities. Referring this judgment, the learned counsel would submit that in the case on hand, there is no material with regard to current existing or past ascertained liabilities and first of all there is no statement of accounts before this Court. Under the circumstances, it cannot be contended that the cheques are issued in respect of discharge of any debt or any liability.
27. The learned counsel relied upon the judgment of the Allahabad High Court in the case of AJODHYA PRASAD BHARGAVA v. BHAWANI SHANKER BHARGAVA AND 23 OTHERS reported in MANU/UP/0001/1957 and brought to the notice of this Court paragraph Nos.9, 18 and 83, wherein the Full Bench discussed with regard to the admissions under Section 21 of the Evidence Act. The party making the admission may give evidence to rebut this presumption, but unless and until that is satisfactorily done, the fact admitted must be taken to be established. The learned counsel referring paragraph No.83 of the judgment would submit that the admissions being substantive piece of evidence, there admissibility is not depending on the appearance or non-appearance of the party as witness.
28. The learned counsel relied on the judgment of the Apex Court in the case of BISHWANATH PRASAD AND OTHERS v. DWARKA PRASAD AND OTHERS reported in MANU/SC/0006/1973. Referring this judgment the learned counsel brought to the notice of this Court the observation made by the Apex Court with regard to Section 21 and 145 of the Evidence Act with regard to cardinal distinction between party who is author of prior statement and witness who is examined and sought to be discredited by use of his prior statement. 24 Admission by party in former case is substantive evidence if fulfills requirements of Section 21.
29. The learned counsel relied upon the judgment of Andhra Pradesh High Court in the case of SWASTIK COATERS PVT. LTD., v. DEEPAK BROTHERS AND OTHERS reported in MANU/AP/0124/1996 and brought to the notice of this Court paragraph No.3 of the judgment, wherein the High Court has made an observation that at any rate, the cheque was a post dated cheque and as on the date of issuing of the cheque there was no existing enforceable debt or liability and having regard to these circumstances no offence is constituted under Section 138 of the N.I. Act.
30. The learned counsel relied upon the judgment of the Apex Court in the case of THIRU JOHN AND OTHERS v.
RETURNING OFFICER AND OTHERS reported in MANU/SC/0211/1977 and brought to the notice of this Court paragraph Nos.14 to 16. Referring paragraph No.15 the learned counsel would submit that the Apex Court has made an observation that it is well settled that, a party's admission as defined in Sections 17 to 20 fulfilling the requirements of Section 25 21, Evidence Act, is substantive evidence. An admission, if clearly and unequivocally made, is the best evidence against the party making it and though not conclusive, shifts the onus on to the maker on the principle that "what a party himself admits to be true may reasonably be presumed to be so and until the presumption was rebutted the fact admitted must be taken to be established.
31. The learned counsel relied upon the judgment of the Apex Court in the case of UNION OF INDIA v. MOKSH BUILDERS AND FINANCIERS LTD. AND OTHERS reported in MANU/SC/0057/1976 and brought to the notice of this Court paragraph Nos.16 and 22 to 24 of the judgment. In paragraph No.16 it is held that the burden of proof is, however not static, any may shift during the course of the evidence. Thus while the burden initially rests on the party who would fail if no evidence is led at all after the evidence is recorded, it rests upon the party against whom judgment would be given if no further evidence were adduced by either side. It is therefore necessary to weigh the evidence in this case and to decide whether, even if it were assumed that there was no conclusive evidence to establish or rebut the allegation. The learned counsel would submit that an 26 admission is substantive evidence of the fact admitted and that admissions duly proved are admissible evidence irrespective of whether the party making them appeared in the witness box or not and whether that party when appearing as witness was confronted with those statements in case it made a statement contrary to those admissions.
32. The learned counsel for the accused relied upon the judgment of Kerala High Court in the case of JOSEPH SARTHO v. G. GOPINATHAN AND ANOTHER reported in MANU/KE/0342/2008 and brought to the notice of this Court paragraph Nos.13 and 16. The learned counsel referring this judgment would contend that it is one of the fundamental principles of law that penal law should not be vague. A law fails to meet the requirements of the due process clause if it so vague and standard less that it leaves the public uncertain as to the conduct it prohibits or leaves judges and jurors free to decide. The observation made in the judgments that for the bouncing of a cheque, which did not represent the amount or part of the amount due to the appellant, the accused cannot be made liable. 27
33. The learned counsel relied upon the judgment of the Apex Court in the case of RAHUL BUILDERS v. ARIHANT FERTILIZERS AND CHEMICAL AND ANOTHER reported in MANU/SC/4139/2007 and brought to the notice of this Court paragraph No.8 of the judgment with regard to giving of the notice within a stipulated time and not giving any reply by the accused.
34. The learned counsel in support of his contentions relied upon several judgments before this Court and would submit that under Sections 17 to 21 of the Evidence Act, the admissions takes away the case of the complainant insofar as to gain tradings and admission given by Sri K.K. Mathur when he was subjected to cross-examination in terms of Ex.D.5. The witness who has been examined before the Court Sri R. Sundararajan also admitted the defence of the accused so also in respect of Aditya Minerals. The very document Ex.D.7 admission takes away the case of the complainant.
35. Having heard the arguments of the respective learned counsel and also on perusal of the grounds urged in the 28 appeals, the points that would arise for the consideration of this Court are:
(i) Whether the Trial Court has committed an error in acquitting the accused for the offence punishable under Section 138 of the N.I. Act?
(ii) What order?
Point Nos.(i) and (ii):
36. Having heard learned counsel for the
appellant/complainant and learned counsel appearing for the respondents/accused, this Court has to re-appreciate the material available on record since these appeals are filed against the order of acquittal. I have also given my conscious consideration in respect of the judgments referred to by both the learned counsel on behalf of the complainant as well as the accused. Having gone through the principles laid down in the judgments referred supra, it is clear that when once the issuance of cheque has been admitted, the presumption has to be drawn in favour of the complainant under Section 139 of N.I. Act. It is also pertinent to note that in view of the recent judgments, which have been quoted by the learned counsel for the 29 complainant, it is settled law that the presumption under the N.I. Act is rebuttable presumption and the Court has to look into the evidence available on record whether the accused has rebutted the evidence of complainant. If the complainant is able to draw the presumption at the first instance, the burden shifts on the accused with regard to rebutting the evidence of the complainant. If the accused rebuts the evidence of the complainant, then the onus shifts on the complainant to further prove his case meeting the case of the accused to substantiate the claim before the Court. Hence, it is settled law that the presumption is rebuttable presumption and once if it is rebutted, the onus shifts on the complainant to meet the case of the accused. Now this Court has to examine whether it is a case for drawing the presumption and whether the said presumption has been rebutted and also whether the burden shifts on the complainant to prove his case after rebuttal.
37. In order to consider the appeals which are pending, this Court has to first look into the averments of the complaint. In para No.2 of all these complaints, it is the averment of the complainant that the complainant had entered into the business 30 transaction with accused No.1 Company and accused No.2 is the Director of accused No.1 Company. The accused had raised two invoices for about 6000 mts for shipment of the business transaction. It is the further averment of the complainant that when the complainant pressed for payment, M/s DIPL issued the cheque dated 28.08.2006 for an amount of Rs.1,00,00,000/- and an amount of Rs.1.5 Crores vide cheque dated 28.08.2006. In respect of other complaint in C.C.No.17140/2007, the accused No.1 is M/s. Aditya Minerals and accused No.2 is the M/s. DIPL, who issued the cheque for Rs.1,00,00,000/- dated 28.11.2006 and the legal notices are issued against M/s DIPL in respect of two complaints in PCR Nos.5303/2007 and 5427/2007 on 21.02.2007 and in respect of complaint in PCR No.3832/2007, legal notice was issued on 11.01.2007. When the said cheques were presented for encashment, those cheques returned with an endorsements "funds insufficient" and "referred to drawer".
38. Having taken note of the pleadings of the complaints, it is the specific case of the complainant that notices issued against the accused were served on the accused and the accused had not replied to the said notices. It is also important to note that there is no dispute with regard to issuance of 31 cheques, legal notices and also no reply to the said notices so also the complaints were filed, cognizance was taken and the accused persons were secured. It is important to note that in all the complaints, the pleadings is that the accused had raised two invoices for about 6000 mts for shipment of the business transaction.
39. The complainant in C.C.No.14691/2007, in order to prove the case, examined one witness as PW.1 and PW.1 has filed the affidavit dated 30.10.2009 at the first instance and got marked documents Exs.P1 to P7 and thereafter, again he filed an additional affidavit dated 12.01.2010 before the Trial Court and got marked the document Ex.P8 - the memorandum of understanding. PW.1 was subjected to cross-examination. In the cross-examination, he admits that in terms of MOU - Ex.P8, it was agreed to fund 80% by the complainant and 20% by the accused for procurement of iron ore. PW.1 also admits that the Iron Ore under the MOU, would be procured in the name of the complainant and that the letter of credit would be opened in the name of the complainant. He also admits that the amount thus received, the share of the complainant would be first recovered and thereafter the balance would be paid to the accused. P.W.1 32 further admits that irrespective of profit or loss, the dues of the complainant would be adjusted first. It is elicited that complainant had filed the Arbitration Petition No.15/2006 against Gains Trading Limited for a claim of Rs.11,50,57,488/- in terms of Ex.D.1.
40. In the further cross-examination of P.W.1, it is elicited that he has not produced nor exhibited any account statement in respect of the transaction of the complainant with the accused. It is further elicited that Sri. K. K. Mathur filed the account extract in Arbitration Proceedings in Delhi and the same was exhibited in criminal proceedings at Delhi as per Ex.D6 in respect of three complaints which are filed at Delhi Court. The complaints are got marked as Exs.D2 to D4. It is elicited that serial Nos.1 to 14 of the account extract as per Ex.D6 may exceed Rs.20 Crores. It is further elicited that the transactions of Gains Trading Limited with the complainant are related to MOU marked at Ex.P8 dated 10.03.2004 and that Ex.D9 is the Arbitral Tribunal Petition. It is elicited that invoices referred to in the complaint as well as at para No.2 of his evidence affidavit has not been produced and also not furnished the details of the referred invoices. It is also elicited that there were no invoices as 33 mentioned at para No.2 of his additional affidavit and he further admits that the contents of para No.2 of the complaint is not correct. It is elicited that there was running account between the complainant Company and the accused and the letter dated 12.07.2005 was addressed to accused in terms of Ex.D7 admitting the payment being made to accused towards part payment of 20% of the share of investment out of the export proceeds realized. It is elicited that as on 23.06.2005, the complainant Company has received more than 20 Crores from the accused and in terms of Ex.P8, the same is restricted to Rs.14.82 Crores. It is elicited that he is unable to say that Rs.4.45 Crores recovered during the year 2005-2006 by the complainant company under the MOU has not been shown in the accounts of the accused. It is elicited that in case, if any amount is received from the Gains Trading Limited through Arbitration or otherwise, the same can be credited to the accused. It is elicited that after 12.07.2005, the complainant Company has not placed any documents to show the liability claimed under the cheques. It is suggested that the cheques were given only as a security and the same is denied. It is also suggested that the complaints 34 are false since there was no liability on the date of presentation of the cheque and filing of the complaint and the same is denied.
41. In respect of complaint in C.C.No.17140/2007, which is filed against M/s Aditya Minerals, the complainant examined one witness as P.W.1 to prove his case and got marked documents Exs.P1 to P13. P.W.1 filed affidavit evidence in lieu of his chief examination and was subjected to cross-examination. In the cross-examination, Exs.D1 to D9 were confronted. It is elicited that the evidence and additional affidavit in respect of evidence are identical to other two complaints. In this case also, he admits that the referred invoices at para No.2 of the complaint are not placed on record as exhibits. It is further elicited that two invoices are not in existence. He further admits that in para No.2 of the complaint is false, but witness volunteers that the contents of the additional affidavit is true. It is elicited that accused No.2 Disha Impex Private Limited is not the signatory to the cheque. It is elicited that accused No.1 is not the party to the MOU produced as per Ex.P13. He further admits that referred transaction is at the behest of Disha Impex Private Limited. It is further elicited that if there was no dues on 35 the part of accused No.2, accused No.1 being acted at the behest of accused No.2 is also not liable to clear any dues.
42. Having perused the evidence of the complainant, this Court has to examine as to whether the accused has rebutted the case of the complainant. It is also important to note that the evidence of the complainant can be rebutted in two modes, one by effective cross-examination and another mode by leading evidence before the trail Court. In the case on hand, the accused has not led any evidence . The matter remains before the Court is whether the accused had rebutted the evidence of the complainant.
43. Having perused all the complaints, in para No.2, it is the specific case of the complainant that the accused had raised two invoices and in pursuance of the said two invoices, the subject matter of the cheques are issued. It is the defence of the accused that he gave the cheques as a security and those cheques are presented and hence, there is no liability on the part of the accused. It is important to note that in the cross- examination of PW.1, it is categorically elicited that the contents of para No.2 of the complaint are false. It is further important to 36 note that the complainant claims the amount based on the invoices and the said two invoices are not placed before the Court. It is pertinent to note that in the cross-examination, it is categorically elicited that no such invoices are in existence. It is also important to note that no invoice bills are furnished.
44. Having perused all these pleadings and the answers elicited from the mouth of the witness - PW.1, it is clear that the very foundation of the case of the complainant goes to the very root of the case of the defence. It is important to note that no where in the complaint, the complainant has stated with regard to MOU entered into between the complainant and accused, which is marked as Ex.P8 and Ex.P13 in another complaint. There is no dispute with regard to the agreement entered into with the accused M/s. DIPL. It is also important to note that M/s.Aditya Minerals is not a party to Ex.P13 - MOU. It is also important to note that there is no any pleadings in the complaint with regard to MOU dated 10.03.2004 and it is important to note that document MOU is marked through additional affidavit. I have already pointed out that there is no reference of the same in the complaint. It is pertinent to note that when the 37 complainant claims the amount based on the said invoices and when those invoices are not in existence, the question of issuance of cheques towards legally recoverable debt or liability does not arise.
45. It is pertinent to note that in the cross-examination of P.W.1, the accused elicited the answer with regard to filing of three complaints at Delhi Court and also filing of an Arbitration Proceedings and the documents pertaining to the said cases are also furnished and marked through P.W.1. Hence, there is no dispute with regard to filing of case at Delhi Court and also filing of Arbitration Proceedings. It is also important to note that Ex.D6 statement, which is confronted to the witness has been categorically admitted by PW.1. It is also important to note that it is elicited from the mouth of PW.1 that from serial Nos.1 to 14 in terms of Ex.D6, it is categorically admitted that the transactions that was taken place exceeds Rs.20 Crores. In terms of MOU - Ex.P8, the transaction is only for Rs.11.86 Crores and there is no answer elicited from the mouth of complainant exceeding the business limit.
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46. It is also important to note that the complainant has not produced the statement of accounts in respect of transaction of the complainant with the accused. It is also elicited that this agreement is concerned only for an amount of Rs.14.82 Crores. It is pertinent to note that when the complainant makes a claim based on the two invoices, in an ingenious method he has filed an additional affidavit claiming the MOU entered into between the complainant and the accused. I have already pointed out that there is no averment in the complaint with regard to the MOU. The complainant has changed his version subsequently stating that the transaction between the complainant and the accused is based on the MOU entered into between them. It is also pertinent to note that though PW.1 says that he is unable to say that an amount of Rs.4.45 Crores recovered from the Gains Trading Limited, but categorically admits that if any amount is received through Arbitration or otherwise, the same can be credited to the accounts. On perusal of Ex.D6, it is clear that more than an amount of Rs.30 Crores transaction was taken place between the complainant and the accused including the receipt of amount from M/s. Aditya Minerals Private Limited in respect of other complaint.
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47. It is pertinent to note that according to the complaint the cheques in question are issued in the year 2006, in respect of two invoices, but transaction has been continued as per Ex.D6 till 30.04.2008. It is pertinent to note that in terms of clause No.19 of MOU it is clear that in case of breach of any terms and conditions of the agreement by the accused, the complainant shall be at liberty to terminate the agreement forthwith and deal with or dispose off the goods lying in its custody and realize the money for the same and if the complainant suffers any loss of their investment or returns thereon, the same shall be payable by M/s. DIPL. Even though there is a clause for terminating the agreement, there is no material before the Court to show that the agreement was terminated and in terms of Ex.D6 the business is continued till 2008. Hence, it creates doubt in respect of the claim of the complainant. First of all it is the claim of the complainant that these two cheques are issued in respect of two invoices and no such invoices are in existence. It is also categorically elicited that para No.2 of the complaint averments are false. When such being the case, the very claim of the complainant has not been substantiated. It is also pertinent to 40 note that in Ex.D9 copy of the Arbitration Petition, which was filed before the Arbitration Tribunal at para No.11, a specific averment has been made in respect of the complaint against M/s.Aditya Minerals for having received the payment from the drawer of the cheque and steps have been taken for withdrawal of the case in respect of amount of Rs.59 lakhs as well as Rs.1 Crore, but the complaints are continued.
48. It is pertinent to note that the accused relied upon the document Ex.D7 dated 12.07.2005 and the said letter is written by the complainant and the complainant does not dispute those documents. In terms of Ex.D7 complainant made the payment in favour of the accused for an amount of Rs.1,10,00,000/-, which is being part payment of 20% of accused share of investment, out of the export proceeds realized. The accused mainly bank upon the said document and contend that the said payment is towards the part payment. No document placed before the Court for having paid the remaining amount in favour of the accused. The complainant also not placed any documentary proof before the Court with regard to the transaction between the complainant and the accused 41 specifically with regard to Ex.D7. But Ex.D6, is confronted to the witness and whereby elicited the answer that the transaction has been continued till 2008 April.
49. Having taken note of the answers elicited from the mouth of P.W.1, it is clear that the complainant failed to substantiate the claim made against the accused persons. It is the main contention of the accused that the cheques which were secured by the complainant for security are utilized for filing these complaints. I have already pointed out that though the complainant makes a claim based on the invoices, those invoices are not in existence and the averment of the complaint is also false. That apart, Ex.D7 substantiate the case of the accused. The complainant has also not produced any documentary proof with regard to the liability of the accused and the statement of accounts in this transaction between the complainant and the accused has also not been produced. Apart from that, the complainant has received the amount from M/s. Aditya Minerals to the tune of Rs.1 Crore and also an amount of Rs.4.45 Crores from the Gains Trading Limited. It is also an admitted fact that the same can be credited to the account of the accused. The complainant being the National Level Co-operative Society 42 registered under the Multi-State Co-operative Societies Act, 1984 having registered office at Nafed House, Siddhartha Enclave, Ashram Chowk, Ring Road, New Dlehi, ought to have maintained the account in respect of the transaction. Being the Central Government undertaking, it ought to have maintained the account and not placed any statement of accounts. The accused has relied upon the document - Ex.D6, which has been filed at Delhi Court and when the same was confronted, the complainant admitted that the transaction between the accused and the complainant exceeds the business limit as specified in the MOU dated 10.03.2004. When such being the case, the accused has rebutted the case of the complainant by adducing the cogent evidence and produced several documents before the Trial Court, confronted the same and elicited the answers from the mouth of P.W.1.
50. I have already pointed out that the complainant has not stated anything in the complaint about the transaction taken place between the complainant and the accused for more than the credit limit as envisaged in MOU dated 10.03.2004. When the accused has rebutted the evidence of the complainant by the effective cross-examination of PW.1 and elicited important 43 answers from the mouth of P.W.1, the complainant ought to have produced the statement of accounts and the same has not been done. Instead, the counsel appearing for the complainant would submit vehemently that the accused also not disputed the business transaction that had been taken place between the complainant and the accused. Learned counsel would further contend that the reason given by the Trial Court that the complainant has not proved its case is erroneous. As to the furnishing of the cheques as security is concerned, there is no averment in the MOU. Learned counsel would submit that no reply was given. When such being the case, the Trial Judge ought to have drawn the presumption. The said contention of the complainant's counsel cannot be accepted in view of the answers elicited from the mouth of P.W.1. The complainant has not approached the Court with clean hands. He pleaded in the complaint that those cheques are issued towards the invoices raised by the accused, but no such invoices are in existence and those bills of invoices are also not furnished. Hence, the very contention that the Trial Judge has committed an error in acquitting the accused also cannot be accepted. 44
51. I have already pointed out that the accused had rebutted the case of the complainant by making effective cross- examination and even in the absence of any evidence adduced by the accused, the case of the complainant has been rebutted through effective cross-examination. Hence, I do not find any merit in the appeals to reverse the findings of the Trial Court. It is settled law that the Court can reverse the order of acquittal, if the judgment of the Trial Court is perverse and has not considered the material on record. I do not find any such material to reverse the findings of the Trial Court.
52. In view of the discussions made above, I pass the following:
ORDER The appeals are dismissed.
Sd/-
JUDGE MD/PYR