R.J. Plastics vs M/S Amplast Polymers Pvt. Ltd And ...
2021 Latest Caselaw 14561 Bom

                                                                       5 alp 124-19.doc


                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         CRIMINAL APPELLATE JURISDICTION
                         CRIMINAL APPLICATION NO. 124 OF 2019

             R.J.Plastics                             ..Applicant

                            v/s.

             M/s. Amplas Polymers Pvt. Ltd.
             & Ors.                                   ..Respondent/s

             Mr. Sagar Kasar for the Applicant.
             Mr. P.H.Gaikwad, APP for the Respondent No.5.

                                   CORAM : ANUJA PRABHUDESSAI, J.

DATED : 6th OCTOBER 2021.

P.C.

1. This is an Application under Section 378(4)of Cr.P.C. seeking

leave to appeal against the judgment dated 30.01.2019 in

S.C.C.No.73 of 2006. By the impugned judgment the learned

Magistrate has dismissed the complaint and acquitted the

Respondents of offence under Section 138 r/w. 141 of the

Negotiable Instruments Act.

2. The Applicant, hereinafter referred to as the Complainant, is

a proprietary concern engaged in business of trading, selling and

supplying of plastics granules. The Respondent No.1-Company is

engaged in business of manufacturing plastic products. The

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Complainant had supplied plastic granules to Respondent No.1

Company, of which Respondent Nos.2 to 4 are the Directors. It is

the case of the Complainant that the Respondent No.4, as a

Director of Respondent No.1 Company had issued two cheques

bearing cheque no.434719 dated 12.07.2006 for Rs.10,90,800/-

and cheque no. 434720 dt.15.07.2006 for Rs.5,55,400/- towards

full payment of the goods supplied. The said cheques were

dishonoured with an endorsement 'not signed as per signature

mandate' and 'account closed'. By notice dated 21.08.2006 the

Complainant called upon the Respondents to pay the cheque

amount of Rs.16,36,200/-. It is alleged that the Respondents did

not make the payment despite receipt of notice. Hence a

complaint came to be filed under Section 138 r/w. 141 of the

Negotiable Instruments Act.

3. The Complainant examined Rajnibhai Bagadia as CW1 and

his brother Dharmendra Bagadia as CW2. In defence the

Respondents examined DW1 Gopal Shah as their witness. The

trial Court, upon examining the evidence on record held that the

subject cheques were issued by the Respondent No.4. The

Respondent Nos.2 and 3 are not the signatories to the said

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cheques. The trial Court also held that there are no averments in

the complaint that Respondent Nos.2 and 3 were responsible for

the conduct of the business of the Company at the time the offence

was allegedly committed. Placing reliance upon the decision of the

Apex Court in A.K.Singhania vs. Gujarat State Fertilizer Co. Ltd &

Anr. AIR 2014 SC 71 and Gunmala Sales Pvt. Ltd. vs. Anu Mehta &

Ors (AIR 2015 SC 1072, the trial Court held that in the absence of

essential averments in the complaint, Respondent Nos.2 and 3

cannot be prosecuted for offence under Section 138 r/w. 141 of

the N.I.Act.

4. The trial Court observed that the subject cheques were

allegedly issued towards the price of the goods supplied by the

Complainant. The trial Court observed that CW1 Rajnibhai has

admitted in his cross examination that the Respondent No.1

Company owed only an amount of Rs.12,80,000/- and not an

amount of Rs.16,36,200/-. The learned Judge has also taken note

of the fact that though the invoices at Exhibit 101 and 102 show

that the Complainant had sold plastic granules worth

Rs.16,36,200/- the contents of the ledger (Exh.94) reveals that as

on 1.4.2006 Respondent No.1 owed to the Complainant only an

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amount of Rs.12,80,231/-. The learned Judge therefore held that

the subject cheques which are for Rs.16,36,200/- were not issued

towards discharge of legally enforceable debt. The learned Judge

therefore acquitted the Respondents of offences under Section 138

r/w. 141 of N.I.Act. Hence the Complainant has filed the present

application under Section 378 (4) of Cr.P.C. for grant of leave to

appeal.

5. Heard Mr. Kasar, learned Counsel for the Applicant. Perused

the records.

6. The complaint under Section 138 of the N.I. Act was filed for

dishonour of subject cheques issued in favour of the Complainant

towards price of goods supplied to Respondent No.1 company.

The said cheques were issued by the Respondent No.4. The

Respondent Nos.2 and 3 were not signatories to the said cheques.

The averments in the complaint indicate that the Respondent

Nos.2 and 3 were the Directors of Respondent No.1 Company.

However, there are no averments in the complaint that at the time

the offence was committed, these Respondents were in-charge of

and responsible for the conduct of the business of the Company.

In the absence of such essential averments, as stipulated in Section

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141 of the N.I.Act, Respondent Nos.2 and 3 cannot be held guilty

of the offence under Section 138 of the N.I.Act.

7. The averments in the complaint vis-a-vis the evidence of

CW1 reveals that the subject cheques for Rs. 16,36,200/- were

issued by the Respondent No.4 towards the price of the goods

supplied. The said cheques were dishonoured and despite demand

for the payment of the said amount made by notice dated

21.8.2006, the Respondent failed to pay the said amount.

8. It is pertinent to note that CW1 Rajnibhai Bagadia, has stated

in his cross examination that the Respondent No.1 had purchased

the goods from the Company in the month of March 2004. He has

admitted that the Respondent No.1 used to regularly pay the

purchase price on delivery of goods. CW1 was unable to state the

price of the goods supplied to the Respondent No.1. He has

admitted that the Respondent No.1 owed to the Complainant an

amount of Rs.12,80,000/-. He has further admitted that the

Respondent No.1 did not owe to the Complainant an amount of

Rs.16,36,200/-. The evidence of this witness thus indicates that

the actual liability of Respondent No.1 Company was to the tune

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of Rs.12,80,000/- and not Rs.16,36,200/- being the cheque

amount. This admission sufficiently rebuts the presumption under

Section 139 of the N.I.Act.

9. It is to be noted that CW2 Dharmendra Bagadia, the brother

of CW1 has deposed that the Respondent No.1 Company had

purchased plastic granules from the Complainant till 1.07.2004.

He claims that the outstanding dues were to the tune of

Rs.28,18,231/-. He claims that the general practice is to charge

36% interest in case the payment towards plastic granules is

received after 30 days from the date of delivery. He has deposed

that several cheques issued by the Respondent No.1 company were

dis-honoured. Hence, a joint meeting was held in January 2006

to settle the accounts. He has deposed that as in January 2006 the

total amount due was Rs.44,35,555/-, which included interest of

Rs.15,55,325/-. He has deposed that after much negotiations the

interest rate was reduced and it was agreed that the Respondent

No.1 would pay the amount of Rs.28,80,231/- in addition, interest

of Rs.3,55,969/-. The total amount thus payable by the

Respondent No.1 was Rs.32,36,200/-. He has deposed that the

Respondent paid an amount of Rs.16,00,000/- and was liable to

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pay the balance amount of Rs.16,36,200/-. The subject cheques

were issued towards payment of the said balance amount.

10. It is pertinent to note that the averments in the complaint as

well as the evidence of CW1 does not indicate that the total

outstanding dues were to the tune of Rs.32,36,200/-. There is no

reference to the settlement talks and/or payment of

Rs.16,00,000/-. The averments in the complaint and the evidence

of CW1 also does not indicate that the cheques for Rs.16,36,200/-

were issued towards payment of the balance amount, but

mentions that the cheques for Rs.16,36,200/- were issued towards

the price of the goods purchased by Respondent No.1.

11. It is also pertinent to note that CW2 has admitted in his cross

examination that as per the ledger at Exhibit 94 dated 1.4.2006,

the outstanding dues were 12,80,231/- . He has admitted that the

Respondent No.1 had no business transaction with the

Complainant after the said entry in the ledger at Exh. 94. The

material on record thus clearly indicates that as on 1.4.2006, the

outstanding dues were Rs.12,80,231/- and this falsifies the claim

of CW2 that the amount due on January 2006 was Rs.44,35,555/-.

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As rightly held by the learned Magistrate, CW2 had introduced a

new case of settlement only to wipe out the admission made by

CW1.

12. The actual liability of the Respondent No.1 according to the

complainant was Rs.12,80,000/-, which was less than the amount

mentioned in the cheque. Despite which the Complainant

presented the cheque for payment of the cheque amount of

Rs.16,36,200/-. Furthermore, upon dishonour of the cheque, the

Complainant issued a notice of demand making an omnibus

demand for the entire cheque amount without indicating that the

actual amount due was only Rs.12,80,200/-. Since the liability of

Respondent No.1 was only Rs.12,80,200/-, the Complainant could

have demanded only an amount of Rs.12,80,200/-. Thus the

demand notice calling upn the Respondent to pay the amount

more than the amount due, cannot be said to be a legal and valid

notice as envisaged in Section 138(b) of the N.I. Act.

13. In view of the discussion supra, it is evident that the amount

payable to the Complainant was much less than the actual amount

mentioned in the subject cheques or demanded by the statutory

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notice. The Respondent No.1 was therefore not legally liable to

pay the said amount. Under the circumstances, the view taken by

the learned Judge being possible and plausible view, the same

cannot be interfered with. The application is therefore dismissed.

Digitally signed by

(ANUJA PRABHUDESSAI, J.) PRASANNA P PRASANNA P SALGAONKAR SALGAONKAR Date:

2021.10.12 17:25:18 +0530

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