Karnataka High Court
M/S C.A.Galiakotwala & Co. Pvt. Ltd vs M/S Aura Engineering Contracts (P) Ltd on 6 February, 2024
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CRL.A No. 857 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 06TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE S RACHAIAH
CRIMINAL APPEAL NO. 857 OF 2015
BETWEEN:
M/S C.A.GALIAKOTWALA & CO. PVT. LTD.,
OFFICE NO.43/1,
SABUVANI BUILDING,
N.R.ROAD,
BANGALORE-560002.
REP. BY ITS MANAGER AND PA HOLDER,
MR.S.CHANDRA SHEKAR,
S/O MR.S.R.SURAPPA,
AGED ABOUT 49 YEARS.
...APPELLANT
(BY SRI. B.KESHAVA MURTHY, ADVOCATE)
AND:
1 . M/S. AURA ENGINEERING CONTRACTS (P) LTD.,
#37/12, 2ND MAIN,
NAGARBHAVI MAIN ROAD,
GOVINDARAJANAGAR,
BANGALORE-560040.
REP. BY ITS MANAGING DIRECTOR
MR.SURESH BABU.T.R.
2 . M/S. AURA ENGINEERING CONTRACTS (P) LTD.,
#37/12, 2ND MAIN,
NAGARBHAVI MAIN ROAD,
GOVINDARAJANAGAR,
BANGALORE-560040,
REP. BY ITS DIRECTOR,
MRS.VEENA BASAVARAJAIAH,
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CRL.A No. 857 of 2015
ALSO AT:
MR. SURESH BABU.T.R.
NO. 15/1, 1 H CROSS,
3RD STAGE,
8TH MAIN ROAD, 4TH BLOCK,
BASAVESHWARANAGAR,
BANGALORE-560079.
MRS. VEENA BASAVARAJAIAH
NO.245, 11TH CROSS,
BEML LAYOUT,
BASAVESHWARANAGARA,
BANGALORE-560079.
...RESPONDENTS
(BY SRI.S.VELMURUGAN, ADVOCATE FOR R1 AND R2)
THIS CRL.A. IS FILED U/S.378 CR.P.C BY THE ADV., FOR
THE APPELLANT PRAYING TO CALL FOR RECORDS IN
C.C.NO.20392/2014 ON THE FILE OF XXVII ADDL.CHIEF
METROPOLITAN MAGISTRATE, BANGALORE; TO SET ASIDE THE
JUDGMENT DATED:20.6.2015 PASSED BY THE XXVII
ADDL.CHIEF METROPOLITAN MAGISTRATE, BANGALORE, IN
C.C.NO.20392/2014 AND ALLOW THE APPEAL BY CONVICTING
THE RESPONDENTS HEREIN FOR THE OFFENCE PUNISHABLE
U/S 138 OF N.I.ACT.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED ON 18.11.2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, THE COURT
DELIVERED THE FOLLOWING:-
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CRL.A No. 857 of 2015
JUDGMENT
1. This Criminal Appeal is filed by the appellant / complainant, being aggrieved by the judgment and order dated 20.06.2015 in C.C.No.20392/2014 on the file of the learned XXVII Additional Chief Metropolitan Magistrate at Bengaluru, wherein the Trial Court acquitted the respondent herein / accused for the offence under Section 138 of the Negotiable Instruments Act (for short 'N.I Act').
2. The rank of the parties in the Trial Court will be considered henceforth as per their rankings for convenience.
Brief facts of the case are as under:
3. It is the case of the complainant that the complainant is a Private Limited Company doing business of distributing valves, cocks, elbow, coupler and other allied products. The accused is also a Private Limited Company and accused Nos.1 and 2 are the Managing Director and Director of the said Company. They used to purchase the materials from the complainant on credit basis with agreement to pay interest at the rate of 24% per annum on the delayed payment. As per the averments of the -4- CRL.A No. 857 of 2015 complaint, the accused had purchased some materials from the complainant and he was due a sum of Rs.10,68,263.79 to the complainant - Company. To clear the said loan, the accused said to have issued four cheques, all the cheques are dated 05.06.2014. When those cheques were presented for encashment, the cheques came to be dishonoured and returned with a shara as "exceeds arrangements". The notice was issued regarding dishonour of the cheques on 11.06.2014. The said notice was returned with an endorsement as "intimation delivered, but not claimed". Despite intimation having been received, the accused has neither repaid the amount nor replied to the notice. Therefore, a complaint came to be registered before the jurisdictional Magistrate. The Magistrate took cognizance and proceeded with the case.
4. To prove the case of the complainant, the complainant examined one witness as PW.1 and got marked 43 documents namely Exs.P1 to P43. On the other hand, the accused examined himself as DW.1 and got marked 58 documents as Exs.D1 to D58.
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5. The Trial Court after appreciating the oral and documentary evidence on record, opined that the complainant has failed to prove that there existed legally enforceable debt or liability and recorded the acquittal. Being aggrieved by the same, the complainant has preferred this appeal.
6. Heard Shri B.Keshava Murthy, learned counsel for the appellant and Shri S.Velmurugan, learned counsel for the respondent Nos.1 and 2.
7. It is the submission of learned counsel for the appellant that the findings of the Trial Court in recording the acquittal appears to be erroneous and perverse and therefore, the said findings of the Trial Court are required to be set aside.
8. It is further submitted that, the issuance of the cheques and signatures on the cheques have been admitted by the accused, however, denied the transaction. Mere denial of transaction or mere denial of liability is not sufficient to rebut the presumption. Except denial of the liability, the accused has failed to prove that those cheques have been issued for the transaction other than the liability. -6- CRL.A No. 857 of 2015 The Trial Court ignored in considering the said aspect and recorded the acquittal which is not appropriate and it is improper.
9. It is further submitted that the invoices under which the accused has purchased the materials clearly indicates that the accused is liable to pay the amount stated in the cheques. In spite of sufficient evidence having been produced before the Trial Court, the Trial Court failed to take note of the evidence, both oral and documentary, and recorded the acquittal on the ground that the complainant has failed to prove the liability, which is inappropriate and perverse and therefore, the said findings are required to be set aside. Making such submission, the learned counsel for the appellant prays to allow the appeal.
10. Per contra, learned counsel for the respondents vehemently justified the findings of the Trial Court in recording the acquittal and submitted that the goods / materials supplied by the complainant are of sub-standard quality. The items which were purchased by the accused have been supplied to JSS Hospital, wherein the Director has written a letter to the Contractor regarding the sub-standard -7- CRL.A No. 857 of 2015 quality materials supplied and asked the complainant to take back the materials. Such being the fact, the liability on the cheques would not arise at all. The Trial Court after considering this aspect, recorded the acquittal which requires no interference. Making such submission, the learned counsel for the respondents prays to dismiss the appeal.
11. After having heard learned counsel for the respective parties and also perused the findings recorded by the Courts below, the points which would arise for my consideration are:
i) Whether the findings of the Trial Court in recording the acquittal of the accused appear to be appropriate and the said order of acquittal is justifiable?
ii) Whether the appellant has made out grounds to interfere with the judgment of acquittal passed by the Trial Court?
12. Before adverting to the facts of the case, it is appropriate to refer the settled principle of law regarding appeal against acquittal. The Appellate Court should normally not interfere with the findings, unless it is perverse and contrary to the evidence on record. In order to -8- CRL.A No. 857 of 2015 ascertain as to whether any perversity or illegality in the findings recorded by the Trial Court, it is necessary to re-appreciate both oral and documentary evidence on record.
13. It is also necessary and relevant to refer to the judgment of the Hon'ble Supreme Court for better understanding the proposition of law in respect of Negotiable Instruments Act. The Hon'ble Supreme Court in the case of BASALINGAPPA v. MUDIBASAPPA1, held in paragraph No.25, which reads thus:
"25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof a for rebutting the presumption is that of preponderance of probabilities.1
(2019) 5 SCC 418 -9- CRL.A No. 857 of 2015 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
14. On careful reading of the dictum of the Hon'ble Supreme Court, it makes it clear that, once the execution of the cheque is admitted, Section 139 of the N.I. Act mandates a presumption that the cheque was issued for the discharge of any debt or other liability. The said presumption is rebuttable in nature. To rebut the presumption, the accused may rely on evidence led by him or he can also rely on the materials submitted by the complainant. It is further made it clear that it is not necessary for the accused to come in the witness box in support of his case or to rebut the
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CRL.A No. 857 of 2015presumption. Admittedly, the complainant herein had fulfilled the ingredients of Section 138 of N.I. Act and the presumption guaranteed under Section 139 of N.I. Act protected the complainant in such circumstances. The law mandates the accused to rebut the presumption by producing cogent evidence, both oral and documentary, to rebut the presumption. The word 'evidence' not necessarily meant that the accused is required to enter into witness box to lead his evidence.
15. As per the contention of the accused, the complainant has not supplied the goods of good quality and the materials which supplied to JSS Hospital, Mysuru are considered as sub-standard materials. Consequently, the payments have been withheld by the Director of JSS Hospital, Mysuru. Several e-mail correspondences have taken place between the complainant and the accused with regard to furnishing the test certificate to prove that the materials supplied are of standard quality.
16. The accused in support of his contention relied on certain documents which are marked as Exs.D8 to D13 which indicate that the Director of JSS Hospital has expressed his
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CRL.A No. 857 of 2015dissatisfaction for having supplied the sub-standard quality of materials to the hospital.
17. It is further stated by the accused that he also sent letter to the complainant which is marked as Ex.D2 which indicates that the cheques are being issued without mentioning the date as per the request made by the complainant and those cheques have to be deposited only after having obtained the confirmation from the accused. It is also stated that once the payment has been made through RTGS, the cheques have to be returned to the accused.
18. It is also required to be taken note of Ex.D8 which is issued by the Office of the Director of JSS New Hospital, M.G.Road, Mysuru. Para 2 of the said letter reads thus:-
"As there is a problem in the quality we would like to bring it your kind notice to change entire PVC pipes and fittings to Supreme or Astral Make. Though you have given test certificate which is not acceptable to us, as the certificates may be fabricated. You have also used non -ISI solvent cement for jointing purpose which has been supplied by your manufacturer, declarers and there was no proper answer from them for the same when they visited to the our project. The samples have been checked by M/s.CIPTE, Mysore,
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where they are not satisfied with the quality and solvent cement used."
On perusal of the said document extracted above, it makes it clear that the goods which were supplied to the JSS Hospital said to have purchased by the accused are of sub-standard quality, hence, the amount was withheld by the hospital authority.
19. On conjoint reading of Exs.D2 and D8, it makes it clear that the complainant should have presented those cheques after obtaining the confirmation from the accused. In the present case, there is no confirmation from the accused to present those cheques for encashment. Therefore, the liability on the cheques certainly would not arise. Hence, I am of the considered opinion that the accused has rebutted the presumption.
20. Once the presumption is rebutted, the burden would be shifted on the complainant to prove his case.
21. Now, it is relevant to refer to the evidence of PW.1. As per the evidence of PW.1, some materials have been purchased by the accused from the complainant and the balance was to be paid by the accused to the complainant. To clear the said loan, four cheques have been
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CRL.A No. 857 of 2015issued by the accused to that effect. It is further submitted that the materials which were supplied by the complainant never appeared to be of sub-standard quality and the quality has not been examined in accordance with law. Therefore, mere stating that the goods / materials which were supplied are of sub-standard may not absolve the liability. The materials which were supplied have been affixed to the new project of JSS hospital and there is no proof regarding the damage. The accused in order to avoid the payment, has raised a contention that the goods supplied were of sub- standard quality, which contention is not acceptable.
22. Now, it is necessary to refer to the e-mail dated 12.06.2014 sent to the complainant by the accused stating that the test certificates in respect of the materials supplied have to be furnished to the JSS Medical Hospital at Mysuru as per the demand made by the authority. In response to the said e-mail, the complainant issued test certificates on 18.06.2014 marked as Exs.D14 to D50, stating that the materials supplied are of standard quality. In spite of certificates having been issued, the accused has not received the payment from his customer namely JSS Medical Hospital,
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CRL.A No. 857 of 2015Mysuru. Therefore, the respondent assertively submitted that the liability to repay the amount mentioned in the cheques would not arise. The said contention has to be accepted on perusal of several documents produced by either of the parties. Therefore, I am of the considered opinion that the observation made by the Trial Court in recording the acquittal, after appreciating both oral and documentary on record, which appears to be appropriate. There is no occasion for this Court to interfere with the said acquittal.
23. In the light of the observations made above, the points which arose for my consideration are answered as:
Point No.(i) : in the "Affirmative"
Point No.(ii) : in the "Negative"
24. Hence, I proceed to pass the following;
ORDER The Criminal Appeal stands dismissed.
Sd/-
JUDGE BSS