Karnataka High Court
M/S. National Agricultural ... vs M/S Disha Impex (Pvt.) Ltd. on 6 January, 2021
Author: H.P.Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF JANUARY, 2021
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL APPEAL No.1072/2013
BETWEEN:
M/s. NATIONAL AGRICULTURAL CO-OP.
MARKETING FEDERATION OF INDIA (NAFED),
BRANCH OFFICE,
NO.8, CUNNINGHAM ROAD,
BENGALURU-560 052,
REP. BY ITS BENGALURU BRANCH MANAGER. ... APPELLANT
(BY SRI GIRIDHAR H., ADVOCATE)
AND:
1. M/s. DISHA IMPEX (PVT.) LTD.,
HAVING ITS REGD. OFFICE AT Z-17,
BASEMENT HAUSKHAS,
NEW DELHI-110 016,
REP. 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 DATED 27.08.2013
PASSED BY THE XV A.C.M.M., BENGALURU IN C.C.NO.17750/2008
2
ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE
PUNISHABLE UNDER SECTION 138 OF N.I.ACT.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 23.12.2020, THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
JUDGMENT
This appeal is filed challenging the judgment of acquittal
dated 27.08.2013 passed in C.C.No.17750/2008, on the file of
the XV Additional Chief Metropolitan Magistrate, Bengaluru.
2. 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.
3. 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 actual and accused No.2 would pay the remaining
20% simultaneously proportionate to the draw down.
4. In connection with this transaction pertaining to the
MOU dated 10.03.2004, the accused had issued a cheque for
Rs.2.5 Crores dated 17.05.2007. When the said cheque was
presented, it was dishonoured with an endorsement "funds
insufficient". Hence legal notice was issued on 26.11.2007.
Inspite of service of notice, the accused did not comply the
demand and hence the complainant was forced to file complaint
against the accused.
5. The complainant in order to substantiate the case
examined one witness Sri R. Sundararajan as P.W.1 and Sri R.
Kannan as P.W.2 and got marked the documents at Exs.P.1 to
10. The accused though not led any defense evidence, the Court
got marked the documents at Exs.C.1 to 3. 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
evidence placed on record, acquitted the accused and hence the
present appeal is filed before this Court.
6. The main contention of the complainant in this
appeal is that the Trial Judge failed to consider the evidence of
PWs.1 and 2 and also the principles laid down in the judgments
referred in the grounds of appeal and also failed to take note of
accused Nos.1 and 2 have not entered into the witness box to
rebut the evidence of the complainant. The Trial Judge has
erred in relying on complaints preferred by the complainant in
the arbitration petition and criminal proceedings initiated at Delhi
and failed to take note of those matters, which arose with regard
to other transactions that had taken place between the
complainant and accused Nos.1 and 2. The Trial Judge should
have considered only the complaint with regard to the return of
cheque. The Trial Judge also has committed an error in holding
that the complainant itself 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 the other transactions in terms of the
MOU dated 10.03.2004. The Trial Judge failed to take note of
the fact that P.W.1 was transferred as a result P.W.2 gave the
evidence and his evidence is not appreciated in a proper
perspective.
7. The learned counsel appearing for the appellant
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, 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.
8. 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
material, insurance cover, security arrangement of material and
lease of yard duly transferred in the name of the complainant.
9. The learned counsel for the complainant would also
submit that the procurement of Iron Ore 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 P.Ws.1 and 2. 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 defense 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 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.
10. The defense relies upon the documents Exs.C.1 and
2 i.e., the complaint filed at Delhi and the same is in respect of
different transactions. The accused also relied upon Ex.C.3, the
account extract. 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.C.3 erroneously. The
actual documents which have been placed before the Trial Court
supports the case of the complainant. In spite 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 prevailed 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 defense of the accused is probable.
11. 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. In spite
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.
12. 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
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.
13. 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.
14. The learned counsel also relied upon the judgment of
the Apex Court in the case of UTTAM RAM v. DEVINDER
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 defense 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.
15. 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
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. In
spite of the accused has not placed the material to prove his
case with preponderance of probabilities, the Trial Judge has
committed an error.
16. 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 the audited account statement was
not produced. The accused relied upon documents Exs.C.1 to 3.
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
statement of accounts. But in 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.
17. 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 are 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
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.
18. The learned counsel for the accused 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.
19. 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.
20. 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.
21. 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
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.
22. 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.
23. The learned counsel relied upon the judgment of the
Allahabad High Court in the case of AJODHYA PRASAD
BHARGAVA v. BHAWANI SHANKER BHARGAVA AND
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.
24. 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.
Admission by party in former case is substantive evidence if
fulfills requirements of Section 21.
25. 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.
26. 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
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.
27. 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
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.
28. 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.
29. 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.
30. 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. The witness who has been
examined before the Court Sri R. Sundararajan also admitted the
defence of the accused.
31. Having heard the arguments of the respective
learned counsel and also on perusal of the grounds urged in the
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):
32. Having heard the respective counsel on behalf of the
complainant and the accused and also in keeping the grounds
urged in the appeal, this Court has to re-appreciate the material
available on record. The present appeal is filed against the order
of acquittal. This Court has to re-appreciate the material on
record and arrive for a conclusion whether the trial Judge has
considered the material available on record or not. This Court
also given anxious consideration to the principles laid down in
the Judgments referred supra both by Complainant's Counsel
and accused Counsel. In keeping the principles and also
considering the material available on record, this Court has to
examine whether the Trial Court Judgment is perverse and not
based on the material available on record.
33. In keeping the grounds, this Court has to evaluate
the evidence available on record. Admittedly, the complainant
has examined two witnesses. Though, P.W.1 filed an affidavit
and examined in chief and got marked the documents-Exs.P1 to
P7, he was not tendered for cross-examination. Hence, his
evidence has been discarded and only the evidence of P.W.2 was
remained. The accused have not led any evidence.
34. The evidence, which remains is the witness-
R.Kannan, Assistant Manager (Accounts), in his evidence in the
form of an affidavit, it is stated that the accused had raised one
invoice for about 25000 MTs for shipment of the business
transaction. When the complainant pressed for payment of
complainant's dues, the accused have issued the cheque for a
sum of Rs.2,50,00,000/-. Though, it was assured that the same
would be paid, it was returned on the ground of 'Insufficient
Funds'. Exchange of notice also narrated in the affidavit. The
documents-Exs.P8 to P10 are marked through this witness i.e.,
Proforma Sale Invoice, Letter addressed to the Complainant and
the Invoice sent to the accused, respectively. He was subjected
to cross-examination. In the cross-examination, it is elicited that
he is giving evidence on his personal knowledge and based on
the documents. His evidence was that the transaction was taken
place between 2004 and 2006. Prior to that he was working at
Chennai and he was seeing the reports which he was getting
from Bengaluru. Hence, he has the personal knowledge. He says
that he does not know about filing of three cases against this
accused, but he admits that one K.K.Mathur working at Delhi.
But not aware of filing of three cases at Delhi. However, he
admits that Sundararajan, who had filed an affidavit earlier and
examined as P.W.1 in this case and K.K.Mathur, both are still
working in the complainant-Company. He admits that two
invoices referred in paragraph No.2 of the complaint are not
pressed and in his affidavit, there is an averment in respect of
paragraph No.2 of the complaint, but not in the affidavit of
Sundararajan. However, he admits that the contents of his
affidavit are not tallying with the second paragraph of the
complaint. He also admits that in the affidavit of Sundararajan,
there was no reference of 25000 MTs. He admits that he has not
produced any statement of accounts to show that accused-
Company is due to the complainant-Company to the tune of
Rs.2,50,00,000/-. He says invoice shows the same. He admits
that Exs.P8 to P10 bears the dates prior to the disputed cheque.
He admits that in the complaint in paragraph No.2, it is
mentioned as 6000 MTs and in his affidavit, it is mentioned as
25000 MTs. He admits that Ex.P10 is the Proforma Sale Invoice.
He admits that after sending Ex.P10 to the accused, he has not
produced the reference of the said invoice in this case. He
admits that his advocate has prepared the chief-examination by
way of affidavit. It is suggested that the complaints filed at
Bengaluru and Delhi and Arbitration Petition were pending before
Justice Sharada Agarwal are also connected to this transaction
and the same was denied. He admits that invoices, which are
referred in paragraph No.2 of the complaint, are not in
existence. It is suggested that after Ex.P10, no transaction was
taken place between the complainant and the accused and the
same was denied. It is suggested that after dismissal of three
complaints at Delhi and three complaints in Bengaluru, the
affidavit filed by him is contrary to the affidavit filed by P.W.1-
Sundararajan and the said suggestion was denied. It is
suggested that in terms of MOU, the agreement was only for a
sum of Rs.14.82 Crores and accused already paid more than
Rs.20 Crores. But, he claims that he has not aware of the same.
The documents-Exs.C1 to C3 are got marked as Court
Documents and accused have not led any evidence.
35. Having perused both oral and documentary
evidence, the evidence of P.W.1-Sundararajan was discarded.
But, in his affidavit, he claims that the accused had raised two
invoices for about 6000 MTs for shipment of business transaction
and complaint averments also described the same. The other
witness is R.Kannan, who subsequently examined as P.W.2. In
his affidavit, he says that complainant entered into a business
transaction with accused Nos.1 and 2 and when pressed for
payment, the accused issued the subject matter of the cheque.
There is no averment with regard to 6000 MTs, but it is contrary
to the earlier affidavit filed by Sundararajan. Though the
evidence of P.W.1-Sundararajan was discarded since he was not
tendered for prosecution. Exs.P1 to P7, which are with regard to
authorization and subject matter of the cheque and the memo
issued by the Bank, legal notice and postal acknowledgement
are the documents marked on behalf of the complainant. It is
important to note that based on the complaint, it is the case of
the complainant that the accused had raised two invoices for
supply of 6000 MTs for shipment of the business transaction and
these two invoices are not in existence as admitted by P.W.1 in
the cross-examination. However, the complainant relied upon
the documents-Exs.P8 to P10. But in the cross-examination, it is
categorically admitted that Exs.P8 to P10 bears the date prior to
the subject matter of the cheque and also there is contrary
evidence as against the contents of the complaint and in the
complaint, it is in respect of 6000 MTs. and in the affidavit it is
mentioned as 25000 MTs. It is also categorically admitted that
Ex.P10 is only a Proforma Sale Invoice. It is also important to
note that though P.W.2-R.Kannan was examined and claims that
he is having the personal knowledge and giving evidence based
on the records. He denies the initiation of other three complaints
before the Court. Even he had gone to the extent of denying the
three complaints filed against these accused persons at Delhi, so
also initiation of arbitration proceedings.
36. I have already pointed out that two invoices, which
are referred in the complaint are not produced before this Court
and subsequently relied upon the documents-Exs.P8 to P10 and
without any pleading in the complaint, the documents-Exs.P8 to
P10 are introduced during the course of examining this witness.
It is also important to note that this witness is not having the
personal knowledge. Only he claims that he was getting the
report when he was working at Chennai and having the personal
knowledge. He then denies the initiation of proceedings against
the accused at Delhi as well as at Bengaluru, this witness cannot
be termed as having personal knowledge with regard to the
transaction. It is also important to note that Ex.P10, which has
been relied upon by the complainant is only a Proforma Sale
Invoice and legal notice claim is in respect of two invoices for
about 6000 MTs, but documents produced before this Court as
Exs.P8 to P10 are contrary to the complaint averments as well as
the legal notice. Hence, it is clear that Ex.P8 is in respect of
25000 MTs. of iron ore and claim is to the tune of
Rs.2,50,00,000/-. The complainant has changed his version
while leading the evidence through the witness P.W.2-Kannan.
The complainant being the Central Government Undertaking
ought to have produced the documents with regard to the
transaction, which had taken place between the complainant and
the accused. It is also important to note that in the cross-
examination, P.W.2-Kannan was cross-examined suggesting that
in terms of MOU, it is agreed to transact only to the tune of
Rs.14.82 Crores. But the accused already made the payments
more than Rs.20 Crores and witness says he is not aware of the
same. Hence, it is clear that the witness - P.W.1 is not aware of
the transaction taken place between the complainant and the
accused. It is also important to note that Exs.C1 to C3 are got
marked as Court documents. The complainant does not deny the
same.
37. In terms of Exs.C1 to C3, it is clear that when
Sundararajan, who has been examined as P.W.1 has deposed
regarding the transaction between the complainant and the
accused. He categorically admits that the documents-Exs.C1 to
C3, which are in respect of the account extract and that the
accused had paid more than Rs.30 Crores to the complainant.
The very same documents were marked as Ex.P6 in other
complaints and the same has been suppressed by the
complainant before this Court. Though the accused has not
been examined before the Court, effectively rebutted the
evidence of the complainant and the answers elicited from the
mouth of P.W.1, it is clear that the contents of the complaint has
not been set out in the affidavit filed by P.W.2. The affidavit filed
by PWs.1 and 2 are contrary to each other having supplied the
iron ore. One claims that it was 6000 MTs iron ore and
subsequent witness-P.W.2 claims that, it was 25000 MTs iron
ore.
38. I have already pointed out that in the affidavit of
P.W.2 averments are also contrary to the complaint averments.
The same is as against the pleadings and also in the original
complaint and affidavit of Sundararajan, it is claimed that the
cheques are issued in respect of two invoices, but subsequently,
P.W.2 claims that it was in respect of supply of 25000 MTs. iron
ore. The complainant is not sure about whether it is for the
supply of 6000 MTs. iron ore or towards supply of 25000 MTs.
iron ore and also the invoices which have been pleaded in
paragraph No.2 of the complaint have not been placed before
the Court. It is also important to note that, P.W.2, who has
been examined subsequently, is not aware of the transaction
between the complainant and the accused in toto and he is not
aware of any proceedings initiated by the accused in Delhi as
well as in Bengaluru. It is also pertinent to note that the
complainant being a Central Government Undertaking has not
maintained any account with regard to the transaction and
produced the same before the Court. There must be a proof
with regard to ascertaining the liability of the accused. In the
absence of said statement of account before the Court, the Court
cannot come to the conclusion that the cheques are issued
towards the debt or liability. It is also important to note that
P.W.2 categorically admits that Ex.P10 was only a Proforma Sale
Invoice was raised. When such being the case, in the absence of
relevant documents before the Court, the Court cannot come to
a conclusion that the said cheques are issued in discharge of
liability. No doubt, it is settled principle that once the cheque is
admitted and not denied the signature; the Court has to draw
the presumption.
39. I have already pointed out that the said presumption
is also a rebuttable presumption. In the case on hand, the
accused had rebutted the case of the complainant and even after
rebutting the evidence of the complainant, even though, the
burden shifts on him but further fails to prove the case of the
complainant. The Complainant did not choose to place the
material before the Court either the invoices or the statement of
accounts. When such being the case, the accused are rebutted
the case of the complainant.
40. Having perused both oral and documentary evidence
available on record, I do not find any error committed by the
Trial Court in appreciating both oral and documentary evidence
and rightly come to the conclusion that the complainant has
failed to prove its case. This Court can only reverse the finding of
the Trial Court if the findings of the Trial Court is perverse and
the material evidence is not considered then to exercise its
appellate jurisdiction to reverse the findings and I did not find
any such error committed by the Trial Court in appreciating the
case of the complainant. Hence, it is not a fit case to reverse
the findings of the Trial Court.
41. In view of the discussions made above, I pass the
following:
ORDER
The appeal is dismissed.
Sd/-
JUDGE
MD/PYR/CP*
