Wipro Limited vs Prasanna Kumar Baral
2023 Latest Caselaw 2236 Ori

      IN THE HIGH COURT OF ORISSA AT CUTTACK

                      CRA NO.412 of 1994

     (In the matter of application under Section 378(4) of
     the Code of Criminal Procedure, 1973.)

  Wipro Limited, Cuttack               ....       Appellant
                            -versus-

  Prasanna Kumar Baral                 ....    Respondent


  For Appellant            : Mr. S.K.Rout, Amicus Curiae


  For Respondent           : Mr. R.C.Ray, Advocate

         CORAM:
                     JUSTICE G. SATAPATHY


                     DATE OF HEARING :06.03.2023
                     DATE OF JUDGMENT:20.03.2023


G. Satapathy, J.

1. Instant appeal U/S.378(4) of the Code of

Criminal Procedure, 1973 (hereinafter referred to as,

'Code' for brevity) by the appellant is directed against the

order passed on 23.08.1994 by Sri A.B.S.Naidu, learned

S.D.J.M., Sadar, Cuttack in I.CC Case No. 57 of

1993(Trial Case No. 1722 of 1993) acquitting the

respondent of the offence U/S. 138 of NI Act by invoking

the provision of Section 255(1) of the Code.

2. Facts giving rise to this appeal in precise are

the appellant being the Senior Branch Supervisor of the

company "Wipro Limited" was the complainant, whereas

the respondent being the proprietor of M/S. Premier

Agency was the accused in ICC Case No. 57 of 1993 and

according to the complainant, the accused used to

purchase goods from the Branch Office of the

complainant-company and sells the articles so purchased

by it to customers. Accordingly, on 01.01.1993, the

accused requested the complainant-company to dispatch

some stock which was dispatched on the same day vide

invoice No. 1013 worth Rs.22,887.45 paise and as

against such transaction, the respondent-accused issued

a cheque bearing No. 445482 dated 01.01.1993 of

Central Bank of India for an amount of Rs.22,887.45

paise, but when the said cheque was presented by the

complainant at State Bank of India, Industrial Estate

Branch, Cuttack for collection, the same was dishonoured

on 12.02.1993 and returned back to the complainant,

who after issuing demand notice on 24.02.1993 which

was received by the respondent-accused on 27.02.1993,

filed the aforesaid complaint against the respondent-

accused for refusing to make payment for the cheque. In

support of the case, the complainant got himself

examined, besides two other witnesses with documentary

evidence vide Ext. 1 to 4 as against no evidence

whatsoever by the respondent-accused. Learned trial

Court on analysis of evidence on record upon hearing the

parties, came to a conclusion that the complainant had

not been able to establish the existence of any debt or

liability against the respondent-accused and in discharge

of such liability, the cheque was issued by the accused.

Learned trial Court further disbelieved the service of

notice U/S. 138(b) of NI Act against the respondent-

accused and by holding so, the learned trial Court

acquitted the accused by the impugned order. Hence, this

appeal.

3. Although this is an appeal against acquittal by

the company-Wipro Limited filed in the year 1994, but

when none appears for the appellant for three

consecutive dates, Mr.S.K.Rout, learned counsel was

accordingly appointed as Amicus Curiae for the appellant

in the matter. On the other hand, Mr.R.C.Rai, learned

counsel and his associates appeared for respondent.

4. In the course of hearing of the appeal,

Mr.S.K.Rout, learned Amicus Curiae has forcefully

submitted that the appellant had complied the provision

of Section 138(b) of NI Act in letter and spirit and the

service of notice upon the respondent-accused had never

been challenged by the defence, but mere denial of

service of notice upon the respondent would not enure to

the benefit of the accused. It is further submitted by the

learned Amicus Curiae that when the accused had

admitted the business transaction between him and the

appellant, it could not be considered that the cheque

issued by the respondent-accused was not on account of

any discharge of debt or liability, but the learned trial

Court by ignoring the presumption available in favour of

the appellant had mis-appreciated the evidence to hold

that the accused had not issued the cheque for discharge

of debt or liability and thereby, had erroneously acquitted

the respondent-accused. Learned Amicus Curiae has

further submitted that in a prosecution U/S. 138 of NI

Act, the burden is on the accused to rebut the

presumption that the cheque was issued not for discharge

of any debt or other liability, but it is very clear from the

evidence on record that such presumption was never

discharged by the accused and thereby, the learned trial

Court had committed gross error in holding the accused

not guilty of the offence. In summing up his argument,

learned Amicus Curiae has prayed to allow the appeal and

reverse the judgment of acquittal by convicting the

accused for offence U/S. 138 of NI Act and sentence him

to appropriate punishment. In addition to his oral

argument, Mr.S.K.Rout, learned Amicus Curiae has also

filed a written note of submission along with citations in

the case of Bir Singh Vrs. Mukesh Kumar; (2019) 74

OCR (SC) 87, Uttam Ram Vrs. Devinder Singh

Hudan & another; (2019) 76 OCR (SC) 701 and

Kalamani Tex & another Vrs. P.Balasubramanian;

(2021) 82 OCR (SC) 150.

5. In resisting the submissions advanced on behalf

of appellant and supporting the impugned judgment,

Mr.R.C.Ray, learned counsel for the respondent has

submitted that the learned trial Court had not committed

any error in holding the accused not guilty of the offence

in view of the failure of the complainant to establish the

necessary ingredients of Section 138 of NI Act.

Accordingly, Mr.R.C.Ray, learned counsel has prayed to

dismiss the appeal.

6. Admittedly, this is an appeal against acquittal.

In case of appeal against acquittal, the proposition as

explained by the Apex Court in a plethora of decisions

which holds good is that the presumption of innocence is

reinforced in case of acquittal of the accused and the

finding of the acquittal should not ordinarily be disturbed

merely on the ground that another view is possible. A

mindful conspectus of the judgment of the learned trial

Court in this case would go to disclose that the learned

trial Court had acquitted the accused on the ground that

complainant was unable to prove that the cheque was

issued by the accused for discharge of any pre-existing

debt or liability and his failure to comply the Section

138(b) of the NI Act for want of receipt of demand notice

by the accused and the advance cheque issued by the

accused had been used in this case. In a criminal trial,

the burden of proving guilt of the accused always rests

upon the prosecution, but in a prosecution U/S. 138 of NI

Act, there are two statutory presumptions available to the

complainant. Of the two presumptions, Section 118,

starts with a phrase that "until the contrary is proved"

and proceeds with the mandatory presumptions

enumerated therein which includes the presumption

under sub-clause(a) to section 118 to the effect that

presumption shall be made of consideration that every

negotiable instrument was made or drawn for

consideration, and that every such instrument, when it

has been accepted, endorsed, negotiated or transferred,

was accepted, endorsed, negotiated or transferred for

consideration.

Similarly, Section 139 of NI Act which speaks

about presumption in favour of holder of cheque in the

following terms that it shall be presumed, unless the

contrary is proved, that the holder of a cheque received

the cheque of the nature referred to in Section 138 for

the discharge, in whole or in part, of any debt or other

liability. A plain reading of aforesaid statutory

presumptions relating to dishonor of cheque makes it

ample clear that the complainant has to establish by way

of leading evidence that he or she is the holder of cheque

and the cheque was issued by the accused, but when the

same was presented got dishonored. Once these facts are

established by the complainant, the burden turns to the

accused to rebut the presumption that the cheque was

issued not for any debt or other liability. In other words,

once the complainant establishes that the cheque was

issued by the accused and the same got dishonored on

presentation, the accused has to establish through

evidence to rebut the statutory presumption attached for

dishonor of cheque, which was issued by him, was issued

not for discharge of any debt or other liability. The

aforesaid principle as introduced by way of Section 139 of

NI Act carves out an exception to general rule as to the

burden of proof and shifts the onus on the accused. It,

therefore, very clear that the statute mandates that once

the signature(s) of an accused on the cheque/negotiable

instrument is/are established, the "reverse onus" clauses

become operative and in such situation, obligation shifts

upon the accused to discharge the presumption imposed

upon him. In this context, the presumption of innocence

of the accused is, however, neither got diluted nor the

statutory presumptions as available in NI Act relieve the

prosecution from proving the case against the accused

beyond all reasonable doubt, but relax the burden of the

prosecution for establishing the offence U/S. 138 of NI

Act once it has been able to establish that the cheque in

question was issued by the accused to the complainant

and accordingly, shifts the onus on the accused to rebut

the presumption that the cheque in question was issued

to the complainant not for the discharge of any debt or

liability.

7. The statutory presumptions as available to the

holder of a cheque are certainly rebuttable presumptions

and the accused can rebut such presumptions by way of

leading independent evidence or by way of eliciting

evidence in the cross-examination of the prosecution

witnesses on the standard of proof of "preponderance

of probability". Undoubtedly and correctly the learned

Amicus Curiae has argued by relying upon the cases Bir

Singh, Uttam Ram and Kalamani Tex (supra) that

the learned trial Court had erroneously placed the burden

on the complainant to establish inter-alia that the cheque

was issued by the accused towards discharge of debt or

liability ignoring the principle that the complainant has

only the duty to establish that accused had issued the

cheque which was dishonored on presentation. It may so

happen, sometimes that the ultimate conclusion would be

correct, but the principle through which conclusion

arrived at might have been incorrect. It is, therefore,

made clear to examine whether the accused had

discharged such presumption as available against him for

issuing the cheque in this case which got dishonored

inasmuch as the issuance of cheque by the accused had

never been disputed or denied by the accused, rather

plea was taken by him to might have issued in advance.

In assessing and evaluating the evidence, it appears that

P.W.1 who was the Branch Supervisor of the Company

had admitted in cross-examination that they used to

maintain the accounts with respect to the business

transaction of the accused in the office and the persons to

whom they supply goods used to grant receipt in token of

taking delivery and they have not filed any document in

respect of supply of goods to the accused and there was

no written agreement with respect to mode of settlement

of their account with the accused. P.W.2, the Area Sales

Officer of the Company, had only reiterated about claim

of the Company. It is stated by P.W.1 that the accused

had come to their Office and placed orders for supply of

Wipro products worth of Rs.22,887.45 paise and they

delivered the goods to the accused according to the

orders placed by him. Although, P.Ws.1 and 2 had stated

about issuance of cheque by the accused and dishonor of

same on presentation, but no document had been filed on

behalf of the Company to show that the accused either

had placed order for supply of goods or had he received

any goods, no matter there was practice of retaining

grant of receipt in token of delivery of goods from the

side of the Company. It is also admitted by P.W.1 that

they had not filed any document in respect of supply of

goods to the accused, although it was claimed in the

complaint that the stocks were dispatched vide Invoice

No.1013 for Rs.22,887.45 paise, but no such invoice was

even produced in this case. On the other hand, the

accused had taken a stand/plea of not receiving any

goods worth Rs.22,887.45 paise for which he issued

cheque. P.W.1 had further admitted in cross-examination

that he cannot say as to why the accused used the rubber

stamp of their firm in the cheque under Ext.1 instead of

writing the name of the firm in ink and he cannot say who

signed on Ext.4 which was the postal A.D. For business

transaction between the Company and the firm as in this

case, there must be documentation in support of business

transaction. In this case, when it is claimed by the

complainant that the accused was its stockiest and it had

placed orders, but no document was ever produced by

the complainant nor was any document produced before

the Court about receipt of goods by the accused or supply

of goods by the complainant. Merely stating that accused

had placed some orders and issued cheque towards

supply of goods would not be sufficient to establish that

the order for goods was either placed by the accused or

the same was received by it and once such claim was

found not established, it would give to a reasonable and

probable grounds to believe about issuance of cheque not

towards discharge of any debt or liability.

8. In view of the aforesaid analysis of evidence,

there would be hardly any doubt in the mind of the Court

about rebuttal of presumptions by the accused on the

standard of preponderance of probability to the effect

that the cheque issued by the accused was found to have

not been established to have been issued for discharge of

any debt or liability and, thereby, the presumption

U/S.139 of N.I. Act stands discharged by the accused.

9. A careful appreciation of documentary evidence

on record would go to reveal that the cheque was stated

to be issued by the proprietor for M/S. Premier Agency

and the demand notice had only been issued against M/S.

Premier Agency, but while instituting complaint, the name

of Prasanna Kumar Baral had been described as accused

in the cause title, but ultimately, no demand notice was

ever issued against said Prasanna Kumar Baral in

individual capacity and the learned trial Court had also

held by appreciating the evidence on record that notice

U/S.138(b) of N.I. Act had not been served upon the

accused. On the contrary, M/S. Premier Agency had not

been made as an accused, although Mr.Prasanna Kumar

Baral had been described as an accused in the complaint

being the proprietor of M/S. Premier Agency. Section 141

of N.I. Act mandates that if the person committing an

offence U/S.138 of N.I. Act is a Company, every persons

who, at the time of offence was committed, was in-

charge of, and was responsible to the Company for the

conduct of business of the Company, as well as the

Company, shall be deemed to be guilty of the offence and

shall be liable to be proceeded against. It is made clear in

the explanation to the section, for the purpose of this

section, Company includes a firm or other association of

individuals. In the fitness of the things and the

circumstance of the case, when the demand notice was

only addressed to M/S. Premier Agency, how come a

prosecution would lie against Mr. Prasanna Kumar Baral

as a proprietor of such firm and more fully, when cheque

was issued by proprietor for M/S. Premier Agency.

Admittedly, there is hardly any averment either in the

complaint or in the demand notice that Mr. Prasanna

Kumar Baral was responsible for the conduct of business

of M/S. Premier Agency nor M/S. Premier Agency had

been separately made as an accused, but Section 141 of

N.I. Act makes it obligatory to implead the Company/firm

or other association of individuals to be responsible for

commission of offence. In addition, the learned trial Court

on appreciation of evidence had also come to a conclusion

that notice U/S.138(b) of N.I. Act had not been served

upon the accused, which by itself is a incurable defect

and in a situation like in this case, it only adds to the

failure of prosecution to establish the guilt of the accused

by means of beyond all reasonable doubt.

10. In National Small Industries Corporation

Limited Vrs. Harmeet Singh Paintal; (2010) 3 SCC

330 the Apex Court at paragraph-39 has laid down the

principle as follows:-

"(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.

(ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of offence, were in charge of and were responsible for the conduct of the business of the company.

(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously

liable for the offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.

(iv)Vicarious liability on the part of a person must be pleaded and proved and not inferred.

(v)If accused is Managing Director or Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.

(vi) If accused is a Director or an Officer of a Company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in complaint.

(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases."

11. In view of the discussions made hereinabove

upon the reappraisal of evidence on record and taking

into consideration the ultimate conclusion arrived at by

the learned trial Court acquitting the respondent suffering

from no illegality or perversity so as to warrant any

interference, the acquittal of the respondent-accused

being not contrary to law and facts is hereby affirmed.

12. In the result, the appeal is dismissed on

contest, but in the circumstance, there is no order as to

costs.

(G. Satapathy) Judge

Orissa High Court, Cuttack, Dated the 20th day of March, 2023/Kishore