Supreme Court - Daily Orders
B.M. Basavaraj vs Srinivas S. Datta on 5 April, 2016
Bench: A.K. Sikri, R.K. Agrawal
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 306 OF 2016
(Arising out of SLP (Criminal) No. 1587 of 2013)
B.M. BASAVARAJ ... Appellant
VERSUS
SRINIVAS S. DATTA ... Respondent
O R D E R
Leave granted.
We have heard learned counsel for the parties at length.
The appellant herein had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, (hereinafter referred to as 'Act'), inter alia, alleging therien that it had entered into a contract with the respondent herein as per which the appellant was to supply some material for the completion of certain project which was undertaken by the respondent. It was further stated that the respondent was supposed to make payment in terms of the said agreement as under: -
“Payment
1. Rs. 25,000.00 at the time of release of Purchase Order Signature Not Verified 2. Rs. 25,000.00 at the time of Board Level Digitally signed by NIDHI AHUJA Demonstration.Date: 2016.04.13
05:47:05 IST Reason:
3. Rs. 25,000.00 at the time of Road Triais.
4. Rs. 50,000.00 at the time of supply of units.
5. Balance Rs. 50,000.00 plus the taxes applicable 1 Crl.A. 306/2016 @ SLP (Crl.) No. 1587/2013 within 45 days from the date of supply of units.
We hereby agree by the above payment terms signed by the petitioner and respondent.” According to the appellant, it had made the requisite supplies and pursuant thereto, the respondent had issued two cheques dated 20.11.2003 and 30.11.2003 for Rs.25,000/- each. Those cheques were returned dishonoured on presentation with the remarks 'Insufficient Funds'. When the respondent was informed about the same, he issued cheques for Rs. 50,000/- and 75,000/-, which was the amount due for the work undertaken and completed by the appellant for the respondent, as under: -
(1) Cheque No. 795553 dated 22.11.2004 for Rs.50,000/-
drawn on Canara Bank.
(2) Cheque No. 795554 dated 15.12.2004 for Rs.75,000/- drawn on Canara Bank.
Both the cheques were again returned by the Bank uncleared with the endorsement 'Insufficient Funds'.
The appellant thereupon issued legal notice dated 18.12.2004 to the respondent in which, inter alia, the following averments were made: -
“You are also aware of the fact that as per the said agreement my client has already supplied all the units to you and in acceptance of the said units you have issued the following cheques in favour of my client towards the payment of balance amounts.” xxxxx “Believing your words my client has presented the 2 Crl.A. 306/2016 @ SLP (Crl.) No. 1587/2013 following cheques.
Sl.No. Cheque No. Cheque Date Amount in Rs.
5. 795553 22nd Nov 2004 50,000=00
6. 795554 15th Dec 2004 75,000=00 and both the cheques were returned by the bank, Canara Bank, Sarakki Layout Branch, Bangalore stating the reason as INSUFFICIENT FUNDS as per the endorsement i.e. memorandum of cheques unpaid, dated 10.12.2004 and 16.12.2004 respectively.
Thus you have committed an offence under Section 138 of the Negotiable Instruments Act read with section 420 of the IPC. And hence I hereby issue the following;
You hereby take this notice that the cheques issued by you in favour of my client dated 22.12.2004 and 15.12.2004 bearing number 795553 and 795554 respectively, towards the payment of balance amount i.e. Rs.1,25,000=00 (Rupees One lakh twenty five thousand) towards the design and development of AVL Units with Base Station Unit supplied to you.” Pertinently no reply was given to these notices by the respondent which forced the appellant to file the aforesaid complaint under Section 138 of the Act.
The trial court, after recording the evidences of both the parties in the said complaint, dismissed the complaint primarily on the ground that the appellant had not furnished any document to prove that it had actually supplied the material to the respondent as per the agreement. This finding is upheld by the High Court also vide the impugned judgment.
A neat submission which is made by Mr. Sushil Kumar 3 Crl.A. 306/2016 @ SLP (Crl.) No. 1587/2013 Jain, learned senior counsel appearing for the appellant, is that once the cheques were given by the respondent to the appellant, there was a presumption in law that the dues were payable by the respondent to the appellant. He had pointed out that this is so acknowledged by the High Court also in the impugned judgment but has committed an error in law in holding that inspite thereof, it was for the appellant to establish that he had fulfilled its obligation under the agreement and only then presumption under Section 139 of the Act was available. This is clearly an erroneous approach on the part of the courts below.
Section 139 of the Act reads as under: -
“139. Presumption in favor of holder It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.” Once the appellant files a complaint on the basis that he was holding the aforesaid cheques as holder in due course which were admittedly given by the respondent to the appellant and the said cheques were dishonoured when they were presented for encashment to the Bank and he, further, is able to establish that due notice of the dishonour of the said cheques was given to the respondent as provided in law, there was a clear presumption in favour of the appellant that the money was due under the said cheques. It may be 4 Crl.A. 306/2016 @ SLP (Crl.) No. 1587/2013 noted that there is no defence to the effect that the cheques were not issued by the respondent or the cheques do not bear its signatures or they were not presented properly for encashment.
In the aforesaid circumstances, it was not even necessary for the appellant to produce any document to the effect that it had fulfilled the obligation under the agreement which was entered into between the parties. The case was founded on the dishonour of the two cheques and not on the basis of the said agreement. Further, it was not a civil suit which was filed on the basis of the said agreement or any demand was raised for money on the ground that the agreement had been fulfilled. The case is that the payment was not released. It is here where the High Court has fell in legal error.
We are, therefore, of the opinion that the dishonour of the aforesaid cheques in the aforesaid manner clearly establish that the amount was due to the appellant and it is the respondent which has failed to discharge its obligation. This is more so, when in the legal notice, specific averment was made by the appellant that the appellant had discharged its obligation under the contract and only thereupon, the cheques were issued and the respondent had not even replied to the said notice. We, thus, set aside the orders of the courts below and hold that the respondent has committed an 5 Crl.A. 306/2016 @ SLP (Crl.) No. 1587/2013 offence in terms of the provisions under Section 138 of the Act. The respondent shall pay to the appellant the amount due with interest at the rate of 9 per cent from the date of filing of the complaint within two months. If the amount is not paid within the aforesaid period, the respondent shall be liable to pay the appellant double the amount of cheques as well as the interest accrued on the cheques amount.
The appeal stands allowed.
....................., J.
[ A.K. SIKRI ] ....................., J.
[ R.K. AGRAWAL ] New Delhi;
April 05, 2016.
6 Crl.A. 306/2016 @ SLP (Crl.) No. 1587/2013
ITEM NO.19 COURT NO.11 SECTION IIB
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No. 1587/2013 (Arising out of impugned final judgment and order dated 16/03/2012 in CRLA No. 1431/2007 passed by the High Court Of Karnataka At Bangalore) B.M. BASAVARAJ Petitioner(s) VERSUS SRINIVAS S. DATTA Respondent(s) (With office report) (For final disposal) Date : 05/04/2016 This petition was called on for hearing today. CORAM :
HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE R.K. AGRAWAL For Petitioner(s) Mr. Sushil Kr. Jain, Sr. Adv.
Mr. Ashwin Kothemath, Adv. Mr. Abhinav Gupta, Adv. Mr. Manu Maheshwari, Adv. Ms. Ankita Gupta, Adv.
Ms. K. V. Bharathi Upadhyaya, Adv.
For Respondent(s) Mr. Anandh Sanjay M. Nuli, Adv.
Mr. Dharm Singh, Adv.
M/s. Nuli & Nuli.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeal stands allowed in terms of the signed order.
(Nidhi Ahuja) (Tapan Kr. Chakraborty)
Court Master Court Master
[Signed order is placed on the file.] 7