Telangana High Court
M/S. Rallis India Ltd vs M/S. Sri Lakshmi Agencies on 12 March, 2025
HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL APPEAL Nos.533, 568, 570, 573 and 588 OF 2018
COMMON JUDGMENT:
1. Criminal Appeal No.533 of 2018 is filed by the appellant,
aggrieved by the acquittal of accused vide judgment in C.C.No.76 of
2013 dated 08.02.2017. Criminal Appeal No.568 of 2018 is filed by
the appellant aggrieved by the acquittal of accused vide judgment in
C.C.No.80 of 2013 dated 08.02.2017. Criminal Appeal No.570 of
2018 is filed by the appellant aggrieved by the acquittal of accused
vide judgment in C.C.No.79 of 2013 dated 08.02.2017. Criminal
Appeal No.573 of 2018 is filed by the appellant aggrieved by the
acquittal of accused vide judgment in C.C.No.77 of 2013 dated
08.02.2017, and Criminal Appeal No.588 of 2018 is filed by the
appellant aggrieved by the acquittal of accused vide judgment in
C.C.No.78 of 2013 dated 08.02.2017. Since parties in all the
appeals are one and the same, they are being heard together and
disposed off by way of this Common Judgment.
2. The appellant company herein is the complainant before the
learned III Special Magistrate, Hyderabad. A private complaint was
filed to punish the respondent/accused for the offence under
Section 138 of the Negotiable Instruments Act. The complainant
company is a public limited company and the 1st respondent/1st
accused is a partnership firm represented by its partners A2 to A7.
A3 is the signatory of the cheques in question, in all the cases.
According to the complainant, all other accused, i.e., A2, A4 to A7
were responsible for the day to day activities of A1 partnership firm,
and are jointly liable.
3. Briefly, the case of the complainant company in all the cases is
that, the complainant company's products, which are fertilizers,
chemicals, and pesticides, were supplied to the
respondents/accused on a regular basis as part of a business
understanding. The products were delivered by the complainant
company and accepted by the accused firm. Towards payment of
the outstanding amounts for the products supplied, cheques in
question were issued. The following cheques, when presented for
clearance, were returned unpaid on the ground of, "payment
stopped by drawer", and in Crl.A.No.627 of 2018, the reason for
return of the cheque is, "insufficient funds".
Crl.Appeal number Parties names Cheque No.& amount
Against CC No.
Crl.A.No.533 of 2018 M/s.Rallis India Cheque bearing
Against CC No.73 of Limited. No.532924,
2013 M/s.Sri Lakshmi dt.20.03.2003 for
Agencies & others Rs.15,00,000/- was
issued
Crl.A.No.568 of 2018 M/s.Rallis India Cheque bearing
Against CC No.80 of Limited. No.532923,
2013 M/s.Sri Lakshmi dt.28.02.2003 for
Agencies & others Rs.15,00,000/- was
issued
Crl.A.No.570 of 2018 M/s.Rallis India Cheque bearing
against CC No.79 of Limited. No.532926,
2013 M/s.Sri Lakshmi dt.31.03.2003 for
Agencies & others 15,00,000/- was
issued
Crl.A.No.573 of 2018 M/s.Rallis India Cheque bearing
against C.C.No.77 of Limited. No.532920,
2013 M/s.Sri Lakshmi dt.20.01.2003 for
Agencies & others 15,00,000/- was
issued
Crl.A.No.588 of 2018 M/s.Rallis India Cheque bearing
against C.C.No.78 of Limited. No.532922,
2013 M/s.Sri Lakshmi dt.21.02.2003 for
Agencies & others Rs.15,00,000/-. was
issued
4. The learned Magistrate examined witnesses on behalf of the
complainant, and the documents were marked during trial. Heavy
reliance was placed on the statement of account Ex.P3 and Ex.P4,
letter of the accused, as the basis to show that there was an
outstanding. Learned Magistrate, having considered the evidence on
record, acquitted the accused on the following grounds:
1) Ex.P3 is the statement of account which cannot be looked
into since there is no certificate under Section 65-B of the
Indian Evidence Act.
2) Under Section 34 of the Indian Evidence Act, in a statement
of account, the entries would be relevant, but there should
be other evidence in support of such statement of account
to infer liability.
3) P.W.2 admitted that though there is supporting material,
the same was not filed in the case.
4) Ex.P4 letter reflects that there is an outstanding to a tune of
Rs.3,69,76,348/-, and P.W.2 admitted that there was
statement by way of the MOU dated 31.03.2004, however,
the said MOU was not filed.
5) Ex.P4 letter does not show that seven post-dated cheques
were issued towards outstanding liability.
6) P.W.2 admitted that he cannot correctly say the
outstanding as on 29.11.2002, which is the date of Ex.P4
letter.
7) According to Ex.P4, there was an agreement on 27.11.2002.
However, the said agreement was not filed. Once P.W.2
admitted that there is claim by A1 firm against the
complainant, and Ex.P4 reflects that the complainant
assured to issue correct notes for the amount and Ex.P4
does not contain the details of the post-dated cheques, it
can only be concluded that the cheques in question were
not issued for any existing liability.
8) When Exs.P3 and P4 are excluded from consideration, there
is no other evidence to substantiate that the accused are
liable to pay any amounts.
5. Learned counsel appearing for the appellant would submit
that once the signature on the cheque and its issuance are
admitted, presumption is raised under Section 139 of the
Negotiable Instruments Act, and the accused failed to rebut the
presumption by any admissible evidence. The learned Magistrate
had committed an error in finding the accused not guilty, though
there was no dispute regarding the issuance of the cheques.
6. On the other hand, learned counsel appearing for the
respondents/accused argued that the findings of the learned
Magistrate needs no interference since they are based on record and
reasonable.
7. The Hon'ble Supreme Court in Chandrabhan Sudam Sanap v.
The State of Maharashtra 1, held as follows:
"49. This judgment has put the matter beyond controversy. In
view of the above, there is no manner of doubt that certificate
under Section 65-B(4) is a condition precedent to the
admissibility of evidence by way of electronic record and
further it is clear that the Court has also held Anwar
P.V.(supra) to be the correct position of law."
8. The finding of the trial Court can be reversed by the appellate
Court only when the appellant makes out a case to show that the
trial Court has omitted to consider the evidence on record or that
the findings are contrary to the evidence adduced by the
complainant. Unless compelling reasons are shown, the question of
reversing an order of acquittal does not arise.
Criminal Appeal No.879 of 2019 dated 28.01.2025
9. In Ravi Sharma v. State (Government of NCT of Delhi) and
another 2, 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.
10. In Ghurey Lal v. State of Uttar Pradesh 3, 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.
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;
(2022) 8 Supreme Court Cases 536
(2008) 10 Supreme Court Cases 450
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."
11. In the case on hand, even according to the complainant, the
transactions were over a period of time and the material was
supplied and payments were also received. Only for the reason of
the issuance of cheques and signatures being admitted, the Court
cannot lose sight of the transactions in between the parties to come
to a conclusion regarding the outstanding liability against the
cheques issued. The transactions in between the parties are to be
looked into in its entirety, and the Court cannot place reliance only
on the fact that the cheques were issued. The burden that shifts
onto the accused can be discharged by the preponderance of
probability. Once the accused places before the Court, either by
producing any evidence or on the basis of the oral and documentary
evidence of the complainant, that there is no outstanding, the Court
can consider the evidence on record and acquit the accused. Once
it is found that the complainant stated that there was sufficient
evidence to prove the outstanding, however could not prove the
documents on record by admissible evidence, the complainant fails
to prove its case against the accused. Only on the ground that the
issuance of cheque was admitted, the same cannot be made basis
to convict the accused since the complainant failed to prove the
outstanding as discussed.
12. Learned Magistrate found that the very basis for launching
prosecution is Ex.P3, the statement of account, which cannot be
looked into, since there is no certificate under Section 65-B of the
Indian Evidence Act, and Ex.P4 letter does not contain the details of
the outstanding or the transactions, since there is no clarity
regarding the liability of A1 firm. Further, there being no proof of
supply of material, the cheques in question being issued to pay any
existing outstanding, cannot be believed. In the present facts, when
there are no specific averments to implicate A2, A4 to A7 by making
them vicariously liable, or reflecting their involvement, and also
Exs.P3 and P4 have not been proved by complying with the
requirements of secondary evidence, there is no infirmity in the
finding of the learned Magistrate. There are no compelling reasons
to interfere with the said finding.
13. Accordingly, all the Criminal Appeals are dismissed.
__________________
K.SURENDER, J
Date: 12.03.2025
kvs
