Agarwal Tube Distribution vs Sony Engineering Works and Others

P.S. Narayana, J.—Heard Smt. Manjula, representing Sri Hanumantha Rao, counsel for the appellant and Sri Mahadeva, representing Sri Krishna Murthy, counsel representing the respondent and the learned Additional Public Prosecutor.

The complainant in C.C. No. 812 of 1995 on the file of the XI Metropolitan Magistrate, Secunderabad preferred the present criminal appeal as against the order of acquittal recorded by the learned Magistrate in the said C.C. No. 812 of 1995 by the Judgment dated 09.7.1998.

The case of the complainant is that the complainant supplied G.I. Indian Gold tubes to the respondents 1 and 2 worth Rs. 3,10,571/- and against the said outstanding amount of Rs. 3,10,571/-, A2 made cash payments and accused No. 1 issued! three cheques for Rs. 50,000/- each dated 13.4.1995, 20.4.1995 and 24.4.1995 and A1 had honoured cheque No. 1133253 dated 13.4.1995, but other two cheques dated 19.4.1995 and 22.4.1995 bearing Nos. 1133254 and 1133257 were dishonoured. Then the accused paid Rs. 1,35,571/- to the complainant on various dates. The complainant presented the said two cheques bearing Nos. 1133254 and 1133257 dated 19.4.1995 and 22.4.1995 for Rs. 50,000/- each and the same were returned with endorsement ''insufficient funds''. Then the complainant issued a legal notice dated 08.9.1995 and the same had been acknowledged by the accused, but failed to pay the amount. Hence, the accused are liable to be punished u/s 138 of Negotiable Instruments Act, 1881 (hereinafter in short referred to as ''the Act''). The complainant examined himself as P.W.1 and Exs. P1 to P-15 were marked. On appreciation of evidence, an order of acquittal had been recorded, hence the criminal appeal.

Smt. Manjula, representing the appellant had drawn the attention of this Court to different provisions of the Act and pointed out to the presumption available u/s 139 of the Act and would contend that in the absence of any rebuttal evidence placed on behalf of the accused, the accused are liable to be convicted u/s 138 of the Act and acquittal recorded is bad in law. The learned counsel also placed strong reliance on K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, and Hiten P. Dalal Vs. Bratindranath Banerjee, , Adapaka Eswaramma and Others Vs. N. Chandra Sekhar, .

The learned counsel had taken this court through the evidence of P.W.1 and would submit that the reasons recorded by the learned Magistrate on the ground that P.W.1 admitted in cross-examination that the ink used for signatures in Exs. P1 and P2 cheques is different with the ink used to fill the contents therein and drawing inference therefrom that Exs. P1 and P2 were blank cheques, cannot be sustained in the absence of any evidence adduced on behalf of accused, especially in the light of Section 139 of the Act.

Per contra, Sri Mahadeva, learned counsel representing R1, R2-accused would contend that this is an appeal against acquittal and unless the reasons recorded by the learned Magistrate are shown to be either perverse or unreasonable, normally, such findings need not be disturbed in an appeal. The learned counsel placed strong reliance in C.ANTONY v. K.G. RAGHAVAN NAIR and Atluri Usha Swamy Vs. Vijay Prestessed Products (P) Limited and Others, . The learned counsel also had taken this court through the other findings recorded to the effect that P.W.1 is not having any record to show that M/s. Sony Engineering Works, represented by A1 and M/s. Sony Tubes Syndicate, represented by A2 are sister concerns. The learned counsel also had drawn the attention of this court to the findings recorded in relation to Exs. P1 and P2-cheques, the signatures thereon and the ink in filling up the contents and the other relevant aspects at paras 16, 17, 18 and 19 of the Judgment and would contend that in view of the fact that the prosecution was unable to establish legally enforceable debt, there is no question of drawing any presumption u/s 139 of the Act and hence the acquittal recorded may have to be confirmed.

Heard both the counsel.

The complainant examined himself as P.W.1 and Exs. P1 to P15 were marked. Ex. P1 is the cheque for Rs. 50,000/- dated 19.4.1995 and Ex. P2 is the cheque for Rs. 50,000/- dated 22.4.1995. The case of the complainant is that the accused are his customers and at their request, he supplied G.I. pipes worth Rs. 3,10,571/- and in that connection accused issued three cheques for Rs. 50,000/- each, out of which one cheque was honoured and other two cheques i.e., Exs. P1 and P2 for Rs. 50,000/- dated 19.4.1995 and 22.4.1995 were dishonoured for insufficient funds. Hence, the complainant got issued Ex. P4 legal notice dated 09.8.1995, which was served on accused for which A1 sent reply notice dated 22.8.1995 under Ex. P5.

The stand taken by the defence is Exs. P1 and P2 cheques were blank cheques and Sony Tubes took them from A1 as security and taking advantage of blank cheques, the contents were filled in and the case was filed. As per the averments made in the complaint, A2 approached the complainant through her son and placed order for supply of G.I. Indian Gold Tubes against outstanding amount; of Rs. 3,10,571/-. A2 made cash payment and A1 issued three cheques for Rs. 50,000/- each on 13.4.1995, 20.4.1995 and 24.4.1995 out of which Exs. P1 and P2 were dishonoured with an endorsement ''insufficient funds''. Exs. P1 and P2 cheques were signed by A1. A2 was not the signatory of Exs. P1 and P2 cheques. According to P.W.1, Accused No. 2 approached the complainant through her son and placed order for supply of G.I. Indian Gold Tubes. It is averred in the complaint that A2 placed orders and accordingly the material was given. It is also averred in the complaint that A1 had issued Exs. P1 and P2 cheques in discharge of legally enforceable debt of his mother A2. The case of P.W.1 as per the averments made in the complaint is that A2 placed order through her son and A1 issued Exs. P1 and P2 cheques on behalf of A2 in discharge of legally enforceable liability of his mother. As far as these aspects are concerned, except the evidence of P.W.1, there is no other evidence available on record. Inasmuch as signatures in Exs. P1 and P2 are admitted, the stand taken by the counsel for complainant is that the presumption u/s 139 of the Act is available and hence the findings recorded by the learned Magistrate cannot be sustained.

In Atluri Usha Swamy Vs. Vijay Prestessed Products (P) Limited and Others, the Division Bench while dealing with Section 118 of the Act held that:

"When the execution of promissory note is admitted, there arises a presumption of consideration for the same and the burden lies on the executant of the promissory note to rebut the presumption and the mere fact that cash was not paid under the promissory note as stated in it does not shift the burden of proof placed on the executant to prove consideration."

Strong reliance was placed on a decision in HITEN P.DALAL v. BRATINDRANATH BANERJEE wherein the Apex Court held that:

" Because both Sections 138 and 139 requires that the Court " shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and sifts the onus on to the accused. Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact.

In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the Court but to draw that statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists" Section 3 Evidence Act. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the ''prudent man''."

There cannot be any doubt or controversy or any quarrel to the proposition, which had been laid down in these decisions. The presumption u/s 118 of the Act and also the presumption u/s 139 of the Act would be available. In the present case, except the evidence of P.W.1 there is no other evidence available on record in support of the several averments made in the complaint. P.W.1 in cross-examination admitted that the ink used for signature in Exs. P1 and P2 cheques is different with the ink, which had been used for filling up the contents of Exs. P1 and P2. It is pertinent to note that the defence version is that Exs. P1 and P2 cheques were blank cheques, which had been taken under certain circumstances. It is no doubt true that none had been examined on behalf of defence. P.W.1 also further admitted that he is not having any record to show that Sony Engineering Works, represented by A1 and Sony Tubes Syndicates, represented by A2 are sister concerns. P.W.1 further admitted that brother of A1 signed under Ex. P6 delivery challan and Ex. P7 delivery challan bears the signature of A1. The signatures in Exs. P1 and P2 cheques are different to the signature made in Ex. P7 delivery challan and these were the findings recorded by the learned Magistrate on examination of all these documents. It was further recorded that the evidence of P.W.1 discloses that delivery challan was signed by brother of A1. Hence, a finding was recorded that the evidence on record does not prove that A1 received goods on behalf of A2 so as to fasten the liability and in that view of the matter complainant-P.W.1 failed to prove that the cheques had been issued to discharge in whole or in part of any debt or any other liability.

The counsel representing respondents 1 and 2 placed strong reliance on a decision of Division Bench in B. Mohan Krishna Vs. Union of India and Others, and also relied upon A.BHOOSANRAO v. PURUSHOTHAMDAS AND ANR. 1997(1) ALT (Cri.) 956 (AP). In C. Antony Vs. K.G. Raghavan Nair, , while dealing with an order of acquittal in relation to 138 of the Act and the power of High court to interfere with and re-appreciation of evidence in appeal it was held thus:

"Unless the findings of trial Court are perverse or contrary to the material on record, High Court cannot, in appeal, substitute its finding merely because another contrary opinion was possible on the basis of material on record."

The main ground of attack of the learned counsel for appellant is that though the presumption u/s 139 of the Act is available, recording acquittal in the absence of any evidence let in on behalf of the defence cannot be said to be justified. It is pertinent to note that the evidence of P.W.1 itself suffers from several infirmities and the stand taken by the complainant-P.W.1, as per the averments of the complaint, had not been proved by placing acceptable evidence. Hence, the learned Magistrate recorded findings and also recorded an acquittal.

On appreciation of the whole material, this Court is satisfied that the said findings cannot be said to be either perverse or based on any mis-appreciation of the evidence available on record and hence the said acquittal recorded by the learned Magistrate need not be disturbed by this Court.

Accordingly, the findings of the learned Magistrate are hereby confirmed and the appeal shall stand dismissed.