M/S. Aiphine Pharmaceuticals ... vs The State Of Telangana
2023 Latest Caselaw 3773 Tel

             THE HON'BLE SRI JUSTICE E.V.VENUGOPAL
             CRIMINAL REVISION CASE NO.462 OF 2020

ORDER :

This Criminal Revision Case is filed by the petitioners/accused

Nos.1 and 2 under Sections 397 and 401 of Criminal Procedure Code

(for short 'Cr.P.C.') aggrieved by the judgment dated 27.02.2020 in

Criminal Appeal No.1413 of 2017 on the file of the learned Metropolitan

Sessions Judge, Hyderabad wherein the findings dated 24.11.2017 of

the learned XXIV Special Magistrate, Hyderabad vide judgment in CC

No.333 of 2016 sentencing the 2nd petitioner to undergo simple

imprisonment for a period of one year and 1st petitioner to pay a fine of

Rs.5,000/- and also to pay the cheque amount of Rs.35,00,000/- as

compensation to the 2nd respondent and in default of payment of said

fine amount and compensation amount, the 2nd petitioner to suffer

simple imprisonment for one month, was confirmed.

2. Heard Sri Mummaneni Srinivasa Rao, learned counsel for

the petitioners, Sri Vizarath Ali, learned Assistant Public Prosecutor,

representing learned Public Prosecutor for the State/1st respondent and

Sri E.Poornachander Rao, learned counsel for the 2nd respondent.

3. CC No.333 of 2016, on the file of the trial Court was filed

by the 2nd respondent under Section 200 of Cr.P.C. for the offence

punishable under Section 138 of Negotiable Instruments Act, 1881

against the petitioners herein for dishonour of Ex.P2/cheque bearing

No.000049 dated 01.12.2015 drawn on Andhra Bank, HMT LE Branch

for Rs.35,00,000/- issued in his favour towards discharge of legally

enforceable debt i.e. payment of balance sale consideration in respect of

a property purchased by the petitioners from the 2nd respondent.

Ex.P2 cheque was issued in the place of Ex.P10, which is also a cheque

issued initially for the same purpose and dishonoured for insufficiency

of funds. Upon presentation, the said cheque was returned unpaid

under Ex.P3/cheque return memo dated 02.12.2015 for the reason

"insufficient funds". Accordingly, after complying with all the legal

formalities, the 2nd respondent got registered the present case. The

petitioners contended before the trial Court that the subject cheque

was issued in the form of blank one towards security and later the 2nd

respondent did not return the same and filed the CC No.333 of 2016.

The trial Court, upon considering the evidence on both sides in the

form of PW1, Exs.P1 to P9 and Ex.D1, found the petitioners guilty,

convicted and sentenced them as stated supra. The said findings were

confirmed by the learned appellate Court vide Criminal Appeal No.1413

of 2017.

4. Aggrieved by the findings of both the Courts below, the

petitioners filed the present criminal revision case mainly contending

that both the Courts below failed to consider the fact that ingredients of

the case on hand do not attract Section 138 of NI Act, as on the date of

issuance of Ex.P2 cheque, the agreement of sale/Ex.P1 was cancelled

vide cancellation deed/Ex.P12 and hence, issuance of Ex.P2 towards

discharge of legally enforceable debt does not arise, the Judge of the

learned trial Court, who is a Special Magistrate, has no power or

authority to convict the petitioners under Section 138 of NI Act since

the trial, enquiry and order must be passed by the officer not below the

rank of Judicial First Class Magistrate. Thus stating, he requested to

allow the present criminal revision case. On the other hand, learned

counsel for the 1st respondent and learned Assistant Public Prosecutor

opposed the present matter vehemently contending that findings of

both the Courts below are well considered and reasoned ones and there

is no necessity for interference with the same.

5. Issuance of Ex.P2 cheque, signature of 2nd petitioner on it

and its return are not disputed by the petitioners. The vehement

contention of the petitioners is that Ex.P2 cheque was not issued

towards discharge of legally enforceable debt. On the other hand, the

2nd respondent has drawn a presumption under Sections 118 and 139

of NI Act that Ex.P2 was issued towards discharge of a legally

enforceable debt. Therefore, heavy burden lies on the petitioners to

rebut the same by explaining the circumstances under which, Ex.P2

was issued. It is the contention of the petitioners that Ex.P2 cheque

was issued in the form of blank one towards security while entering

into Ex.P1/agreement of sale but the same was not returned by the 2nd

respondent after its purpose was fulfilled. However, it is not explained

by the petitioners as to why they kept quiet since presentation of Ex.P2

and its subsequent dishonour and issuance of a legal notice. Though

the petitioners disputed receipt of legal notice, it is a fact to be noted

that the same was addressed to the correct address of the petitioners

and hence, it is deemed to be valid service of notice on the petitioners.

There is nothing on record showing the legal recourse taken by the

petitioners seeking return of the unreturned documents or for legal

notice/Ex.P4 issued by the 2nd respondent. The petitioners did not

adduce any evidence before the trial Court in support of their defence.

In these circumstances, the contention of the petitioners that Ex.P2

was handed over in the form of blank one cannot be believed.

6. It is the contention of the 2nd respondent that agreement is

for sale of all the properties mentioned in schedule along with

machinery and other fixtures and that Ex.P8/sale deed is only

pertaining to land and building as such, for the remaining part of the

schedule, consideration is as in Ex.P1 remains live, hence he is entitled

for rest of the amount of Rs.35,00,000/- towards the factory equipment

and machinery items. On the other hand, the petitioners contended

that payment under Ex.P2 is nothing but execution of an illegal

agreement, to avoid the stamp duty, which shall be considered as void

under Section 23 of the Contract Act.

7. Perusal of entire record goes to show that there is

inconsistency in the defence of the petitioners and that it has been

changed from time to time, which itself gives rise to a suspicion that

only to get rid of the conviction and criminal liability for dishonour of

the cheques, the petitioners are trying to put forth several contentions

without corroborative and sustentative evidence. On the other hand,

the 2nd respondent by adducing oral and documentary evidence, could

able to establish that initially the petitioners issued Ex.P10 cheque for

Rs.35,00,000/- and upon its dishonour, they issued Ex.P2 cheque for

the said amount and the said cheque was also dishonoured for the

reason of insufficiency of funds in the account of the petitioners. In

that view of the matter, both the Courts below have rightly appreciated

the evidence available on record and gave reasoned findings finding the

petitioner guilty. This Court finds nothing on record warranting its

interference with regard to the concurrent findings of both the Courts

below.

8. So far as the contention of the learned counsel for the

petitioners that Judge of the learned trial Court, who is a Special

Magistrate, has no power or authority to convict the petitioners under

Section 138 of NI Act since the trial, enquiry and order must be passed

by the officer not below the rank of Judicial First Class Magistrate is

concerned, the 2nd respondent filed copies of GOMs.No.35 dated

31.03.2011, issued by the then Government of Andhra Pradesh, copy of

ROC No.701/E1/2010 dated 19.07.2011 issued by this Court and also

the illustrative list of cases assigned to Morning/Evening/Shift/Special

Magistrates' Courts and of the above said documents, the illustrative

list, referred supra, at serial No.3, clearly shows assignment of cheque

bouncing cases under Section 138 of Negotiable Instruments Act, 1881

along with other cases to the Special Magistrates' Courts. The 2nd

respondent also filed the copies of subsequent GOs continuing the

Special Magistrate Courts from time to time. In that view of the matter,

the contention of the petitioners in this regard will not stand for legal

scrutiny and hence, the same stands rejected.

9. Having regard to the above facts and circumstances and

also the evidence on record, this Court is of the considered view that

the concurrent findings of both the Courts below are sustainable and

there is no apparent error on the face of record and hence, there is no

need or necessity warranting interference of this Court. Accordingly,

this Court is inclined to dismiss the criminal revision case.

10. In the result, this Criminal Revision Case is dismissed.

The miscellaneous applications, if any pending, shall also stand closed.

______________________ E.V.VENUGOPAL, J Dated : 09-11-2023 abb