Telangana High Court

M/S. Rain Cements Limited vs M/S. Sri Durga Agencies, And 3 Others on 27 September, 2024

              HON'BLE SRI JUSTICE K.SURENDER

              CRIMINAL APPEAL No.495 OF 2013
JUDGMENT:

1. The appellant is the complainant in the Court below, filed the

present appeal questioning the acquittal of the respondent/accused

for the offence under Section 138 of the Negotiable Instruments Act

vide judgment in CC No.841 of 2012 dated 04.02.2013 passed by

the XV Additional Judge-cum-XIX Additional Chief Metropolitan

Magistrate, Hyderabad.

2. Briefly, the case of the complainant is that the complainant is

Public Limited Company. Complainant manufacturers cement

under brand name 'Priya Cement'. The accused were having

business at Alwal, Secunderabad. The 2nd accused/A2 was the

Managing Partner and Accused No.3 is another partner of A1 firm.

The accused approached the complainant for dealership of Priya

brand cement. Having given the dealership, the goods were supplied

from time to time on credit basis. Over a period of time, there was

an outstanding and accordingly, cheque bearing No.335221 under

Ex.P3 for Rs.1,25,519/- was given. The said cheque when presented

for realization, was returned unpaid on the ground of 'insufficient

funds'. The complainant issued notice to pay the amount covered

by the cheque. However, no amount was paid. Complaint was filed

within six months. During the course of trial, the complainant

examined the representative of the company as P.W.1 and marked

Exs.P1 to P28. On behalf of the accused, Managing Partner/A2

examined himself as D.W.1.

3. The case of the accused is that in the year 2008 he had taken

dealership of accused company. At the time of taking the

dealership, an amount of Rs.35,000/- which was refundable was

given to the complainant company. Further, two blank cheques

including Ex.P3 were given. Since the accused sustained losses, the

accused asked the company to stop the transactions. The due

amount of Rs.1,25,000/- had to be paid by the accused. In the

month of December, 2009, an amount of Rs.35,000/- which was

given earlier as refundable deposit was deducted and accused was

asked to pay Rs.90,000/-. One of the blank cheques were filled up

with Rs.90,000/- amount and the said cheque was bounced.

Ex.P28 is the letter dated 01.12.2009 in which A2 undertook to

arrange the amount by the end of December month. Accordingly,

the representative of the complainant received Rs.90,000/- in cash,

but did not pass any receipt.

4. Learned Magistrate found that one cheque bearing No.335220

for Rs.90,000/- when presented in their account was bounced on

01.12.2009 for the reason of 'insufficient funds' and the same was

reflected in Ex.P14 statement of account of the complainant

company. According to the accounts of company as on the date of

15.12.2011, an amount of Rs.1,25,519/- was outstanding.

However, the accused had paid the amount of Rs.90,000/- earlier

which cleared the entire outstanding.

5. Learned Magistrate found favour with the version given by the

accused and held that burden which is shifted on to him was

rebutted by preponderance of probability and accordingly, acquitted

the accused.

6. Learned counsel appearing for the appellant/complainant

would submit that the finding of the learned Magistrate is incorrect.

The accused having admitted outstanding has not produced any

receipt for the payment of Rs.90,000/-. Mere denial of debt is not

sufficient to rebut the presumption under Section 139 of the

Negotiable Instruments Act. Learned counsel has relied on the

judgment of Hon'ble Supreme Court in the case of Rohitbhai

Jivanlal Patel v. State of Gujarat and another1. Learned counsel

also relied on the judgment of Hon'ble Supreme Court in Rangappa

v. Sri Mohan 2 and also the judgment in Sripati Singh (Since

deceased) through His Son Gaurav Singh v. State of Jharkhand

and another3 and argued that a cheque given under security can

also be presented once there is an outstanding. If the cheque is

dishonoured, consequences under Section 138 of the Negotiable

Instruments Act have to follow.

7. Learned counsel appearing for the accused supported the

findings of the learned Magistrate and argued that it is not mere

denial by the accused regarding the outstanding but has proved his

version on the basis of documents filed by the accused.

(2019) 18 Supreme Court Cases 106

(2010) 11 Supreme Court Cases 441

2021 SCC OnLine SC 1002

8. In Ravi Sharma v. State (Government of NCT of Delhi) and

another4, the Hon'ble Supreme Court held that while dealing with

an appeal against acquittal, the appellate court has to consider

whether the trial Court's view can be termed as a possible one,

particularly when evidence on record has been analysed. The

reason is that an order of acquittal adds up to the presumption of

innocence in favour of the accused. Thus, the appellate court has to

be relatively slow in reversing the order of the trial court rendering

acquittal.

9. In Ghurey Lal v. State of Uttar Pradesh 5 the Hon'ble

Supreme Court after referring to several Judgments regarding the

settled principles of law and the powers of appellate Court in

reversing the order of acquittal, held at para 70, as follows:

"70. In the light of the above, the High Court and other appellate Courts should follow the well-settled principles crystallized by number of Judgments if it is going to overrule or otherwise disturb the trial court's acquittal:

1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has "very substantial and compelling reasons"

for doing so.

(2022) 8 Supreme Court Cases 536

(2008) 10 Supreme Court Cases 450

A number of instances arise in which the appellate court would have "very substantial and compelling reasons" to discard the trial court's decision. "Very substantial and compelling reasons" exist when:

i) The trial court's conclusion with regard to the facts is palpably wrong:

ii) The trial court's decision was based on an erroneous view of law;

iii) The trial court's judgment is likely to result in "grave miscarriage of justice";

iv) The entire approach of the trial court in dealing with the evidence was patently illegal;

v) The trial court's judgment was manifestly unjust and unreasonable;

vi) The trial court has ignored the evidence or misread the material evidence or has ignored material documents like dying declarations/report of the ballistic expert, etc.

vii) This list is intended to be illustrative, not exhaustive.

2. The appellate court must always give proper weight and consideration o the findings of the trial court.

If two reasonable views can be reached__ one that leads to acquittal, the other to conviction __the High Courts/appellate courts must rule in favour of the accused."

10. As rightly argued by the counsel for the accused, it is not the

case of mere denial of the outstanding and that amount of

Rs.90,000/- was paid. Right from the beginning, the accused had

denied the sequence of the events that transpired and convinced

the Court regarding the version of the accused being correct. The

cheque bearing No.335220 was presented in the year 2009 itself.

The present cheque in question is 335221, which is in the year

2011. The version given by the accused that it was given as

security, was believed by the learned Magistrate since the writing

on the cheque with respect to the signature, date and the amount

differed. Having admitted that there was an outstanding amount of

Rs.35,000/- which was given towards refundable deposit, the