Karnataka High Court
M/S.National Agricultural Co- Op vs M/S.Disha Impex (Pvt) Ltd on 6 January, 2021
Author: H.P.Sandesh
1
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)
2
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)
3
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
4
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
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
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
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
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.
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
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
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.
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
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
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
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.
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
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
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
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.
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.
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
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
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.
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
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
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.
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
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
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
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
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
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
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
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
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
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
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.
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.
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
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
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
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
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.
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
