Madras High Court
Rubfila International Ltd vs Alok Gupta on 21 April, 2018
Author: P.Rajamanickam
Bench: P.Rajamanickam
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :21.04.2018 CORAM THE HONOURABLE Mr.JUSTICE P.RAJAMANICKAM Crl.A.No.429 of 2005 Rubfila International Ltd., Rep.by Joseph Peter, Company Secretary Kanjikode, Palakkad, Kerala State. ... Appellant Vs. Alok Gupta Proprietor Alok Enterprises F-11, Panday Nagar Paiparganj Delhi 110 091. ...Respondent PRAYER: Criminal Appeal filed under Section 378 of Cr.P.C., against the judgment passed by the learned Additional District and Sessions Judge-Fast Track Court No.II, Coimbatore dated 29.09.2004 in C.A.No.104 of 2004 setting aside the judgment of the trial Court namely, learned Judicial Magistrate No.III, Coimbatore in C.C.No.22 of 2000 dated 13.02.2004, acquitting the respondent herein for the offence punishable under Section 138 of Negotiable Instruments Act. For Appellant : No Appearance For Respondent : No Appearance JUDGMENT
This appeal has been filed by the complainant against the judgment of acquittal passed by the learned Additional District and Sessions Judge-Fast Track Court No.II, Coimbatore, in Crl.A.No.104 of 2004 dated 29.09.2004.
2. The appellant herein has filed a complaint under Section 200 of Cr.P.C., stating that the complainant is the reputed manufacturer of various Rubber Threads at Palakkad, Kerala State. The accused is the Proprietor of Alok Enterprises at Delhi and one of the Dealers and Distributors of complainant's Latex Rubber Threads at Delhi. Hence, towards the supply of various Latex Rubber Threads by the complainant, a sum of Rs.32,90,176/- is due and outstanding. Inspite of several demands, accused has not paid the said amount. Lastly, the accused has issued a cheque for a sum of Rs.68,420/- dated 14.07.1999 towards part payment. The said cheque was presented in the Bank for encashment on 04.09.1999 and the same was returned on 16.09.1999 as payment stopped. Thereafter, the complainant had issued a statutory notice on 25.09.1999 calling upon the accused to pay the cheque amount within the period of 15 days from the date of receipt of the said notice. The accused had received the notice, but did not make any payment within the period of 15 days as mentioned in the notice. On the contrary, the accused had sent a reply dated 25.10.1999 with false averments and hence, the complainant had filed a complaint under Section 200 of Cr.P.C., to punish the accused under Section 138 of the Negotiable Instruments Act.
3. Based on the said complaint the learned Judicial Magistrate No.III, Coimbatore, has taken the case on file in CC.No.22 of 2000 and issued summons to the accused. On appearance of the accused, copies were furnished and the accused was questioned with regard to the offence said to have been committed by the accused. The accused pleaded not guilty and hence, the learned Judicial Magistrate No.III, has tried the case.
4. During trial, the complainant had examined three witnesses, as PW1 to PW3 and also marked Exs.P1 to P10. The evidence of PW1 to PW3 in brief is as follows:-
a) PW1, Joseph Peter is working as an Assistant Manager in the complainant's Company. He has been authorized to give evidence on behalf of the Company. The said authorization was marked as Ex.P1. He has stated that their Company is manufacturing Rubber Threads and the accused purchased various Latex Rubber Threads from their Company. He further stated that towards the supply of the said materials a sum of Rs.32,90,176/- was due from the accused and when the same was demanded on 10.07.1999, the accused had issued a cheque (Ex.P2) for Rs.68,420/- dated 14.07.1999 and the said cheque was presented in the Bank on 04.09.1999 for encashment and the same was returned on 16.09.1999 with an endorsement " payment stopped" and the Bank memo has been marked as Ex.P3. A statutory notice was issued on 25.09.1999, calling upon the accused to pay the cheque amount. The Office copy of the said notice was marked was Ex.P4. The accused had received the said notice, but he did not make any payment. The Postal acknowledgement was marked as Ex.P5. However, the accused sent a reply notice dated 25.10.1999 with false averments and the same has been marked as Ex.P6.
b) PW2 is the Divisional Manager, ICICI Bank, Tirchy Road Branch, Coimbatore. He has stated that the aforesaid cheque was presented in their Bank on 04.09.1999 and the same was sent to Bank of Madura. He further stated that the cheque was returned, on the ground that there was no sufficient funds, the Bank's debit advice was marked as Ex.P7. The complainant's account statement has been marked as Ex.P8.
c) PW3 is another Manager. He has stated that the ICICI Bank merged with Madura Bank. The authorization given by the Bank to give evidence was marked as Ex.P9. He has stated that Ex.P2 cheque came to their Bank on 08.09.1999 for collection and the same was returned on the ground that the payment stopped by the drawer. He has produced the account statement of the accused and marked as Ex.P10.
5. The evidence on the side of the complainant was closed with PW3 and thereafter, the accused was questioned under Section 313 of Cr.P.C., with regard to the incriminating circumstances found in the evidence of the PW1 to PW3. The accused denied them as false but he has not examined any witnesses on his side.
6. The learned Judicial Magistrate, after considering the materials placed before her, found that the said cheque was issued by the accused for discharging legally enforceable liability and accordingly, found the accused guilty under Section 138 of the Negotiable Instruments Act and convicted him to undergo three months Rigorous imprisonment and also imposed a fine of Rs.5,000/- in default to undergo three months Rigorous imprisonment. Aggrieved by the same, the accused has filed an Appeal in Crl.A.No.104 of 2004 on the file of the Additional District and Sessions Judge-Fast Track Court No.II, Coimbatore.
7. The learned Additional District and Sessions Judge has found that the accused was appointed as representative of the complainant Company for Delhi area. He also found that the complainant Company was running in the building owned by the accused as tenant for monthly rent of Rs.5,000/-. He also found that Rs.13,51,521/- has to be paid by the complainant Company to the accused and for recovery of the said amount, the accused has already filed a suit before the Court at Delhi and the said suit is pending. He further found that since with regard to the amount to be paid between the parties already a suit is pending before the Civil Court, the Criminal Court cannot decide the said issue. He further found that since the accused is disputing the liability, eventhough, he is having a sufficient amount in his Bank account, he gave stop payment instruction to the Bank and hence, the Bank had stopped the payment to Ex.P1 cheque and therefore, the offence under Section 138 of the Negotiable Instruments Act, will not attract. Accordingly, the learned Additional District and Sessions Judge has allowed the said appeal and acquitted the accused. Challenging the judgment of the Appellate Court, the complainant has preferred this Appeal.
8. When this matter was taken up for hearing today morning there was no representation on the side of the appellant. The learned counsel for the respondent was present. Hence, the matter was passed over and taken up at 3.30 p.m. At that time, there is no representation on either side. Hence, after perusing the Appeal Memorandum, copy of the complaint, judgment passed by the trial Court and the judgment passed by the First Appellate Court, this judgment is being passed.
9. The learned Additional District and Sessions Judge in his judgment in Crl.A.No.104 of 2004 has stated that the Bank Statement of the accused (Ex.P10) would clearly show that when Ex.P1 cheque has come for encashment on 08.09.1999 a sum of Rs.12,40,189.32 was there in the account of the accused. In Ex.P1 cheque, the amount mentioned is only Rs.68,420/-. So it is clear that,when the said cheque was presented for encashment on 08.09.1999, the accused had sufficient funds in his Bank account.
10. It is also stated in the judgment in Crl.A.No.104 of 2004 that PW1 has admitted in his evidence that the complainant's Company is running in the premises of the accused as tenant for monthly rent of Rs.5,000/-. Further, PW1 has admitted that the wife of the accused was working as Marketing Executive in the complainant's Company. It is also stated that though PW1 has denied the suggestion that the complainant Company is liable to pay a sum of Rs.13,51,521/- to the accused, the accused has filed the suit before the Court at Delhi for recovery of the said amount. Since there was a dispute with regard to the transactions between the accused and complainant and a suit is also pending before the Court at Delhi, the accused has issued instructions to the Bank to stop payment.
11. The learned Additional District and Sessions Judge, relying upon the decision M/s. M.M.T.C.Ltd and Another Vs. Medchal Chemicals & Pharma (P) Ltd., and another, 2001 (4) CTC 749, has held that the accused has rebutted the presumption through the evidence of PW1 and Ex.P10. He has also found that the accused issued stop payment instructions on valid ground that already Civil Suit is pending at Delhi, with regard to the transactions between the parties.
12. In M/s. M.M.T.C.Ltd and Another Vs. Medchal Chemicals & Pharma (P) Ltd., and another, (supra) the Hon'ble Supreme Court in Paragraph No.16 has observe as follows:-
16. Just such a contention has been negatived by this Court has, in the case of Modi Cement Ltd. V. Kuchil Kumar Nandi, 1998 (1) CTC 402. It has been held that even though the cheque is dishonoured by reason of 'stop payment' instruction an offence under Section 138 still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of stop payment instructions by virtue of Section 139 the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the stop payment instructions were not issued because of insufficiency or paucity of funds. If the amount of the cheque at the account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused.
13. From the aforesaid decision, it is clear that eventhough, the cheque is dishonoured by reason of 'stop payment' instruction, an offence under Section 138 could still be made out. It is also clear that a presumption under Section 139 also would arise, but the said presumption is a rebuttable presumption. The accused can thus show that the stop payment instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of stop payment notice had been issued because of other valid causes including that there was not existing debt or liability, offence under Section 138 of the Negotiable Instruments Act would not be made out.
14. In this case as already pointed out that on the date of presentation of Ex.P2 cheque, the accused had sufficient funds on his Bank account. The accused has proved that he has already filed a suit for recovery of Rs.13,51,521/- from the complainant's Company before the Court at Delhi. So, it is clear that a bona fide dispute is pending between the parties with regard to the transactions took place between them. So it appears that the accused has issued the stop payment notice on valid cause. Therefore, this Court is of the view that the learned Additional District and Sessions Judge has rightly acquitted the accused and there is no infirmity in the judgment passed by the Appellate Court. Therefore, this Appeal is liable to be dismissed.
15. In the result, the Appeal is dismissed, the judgment passed by the learned Additional District and Sessions Judge, Coimbatore in Crl.A.No.104 of 2004 is confirmed.
21.04.2018 (4/4) dna/gv P.RAJAMANICKAM.J., dna/gv To
1.The learned Additional District and Sessions Judge-Fast Track Court No.II, Coimbatore.
2. The learned Judicial Magistrate No.III, Coimbatore.
Crl.A.No.429 of 200521.04.2018 (4/4)