Saturday, 12 July 2014

Dishonour of cheque-standard of proof required for rebutting presumption of legal liability by accused



In the present  case,  considering the fact  that PW  1   had 
been repeatedly   showing his willingness to produce the documents but 
factually   avoided to produce the documents   was clearly indicative of 
the   fact   that   the   goods     as   alleged,   were   never   supplied   during   the 
period   between 7.5.2010 and 8.3.2011. The view,therefore, taken by 
the learned trial Court, appears to be one of the probable views   and 

does  no call  for  any interference. The  learned trial  Court  has  rightly 
held  that the standard of proof required for rebutting the presumption 
shall not be as strong  as  a  standard of poof  required for proving  the 
prosecution case.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 BENCH AT NAGPUR, NAGPUR.

CRIMINAL  APPEAL NO.  247  /2013

M/.sAditya   Air Products  Private Ltd.

v e r s u s
M/s  Saarth Engineering and 
Construction Pvt. Ltd.

CORAM:   M.L.TAHALIYANI,  J.

DATE OF PORNOUCEMENT: 15.01.2014
Citation; 2014 ALL MR(cri)1801

1.
This   is     an   Appeal   against     the   judgment     and   order   of 
acquittal passed by the learned Judicial Magistrate, First Class, Nagpur 
in Summary  Criminal Case No.20795/2011.

2.

The  respondent  Nos.  1 to  4    were   prosecuted by the 
appellant   for   the   offence   punishable   under   Section   138     of   the 
Negotiable Instruments Act on the  ground that  three cheques   totally 
amounting to Rs. 7 lakhs,  issued by the  respondent no.3 on behalf  of 
the respondent no.2 were   dishonoured for want of  sufficient funds. At 
this stage,     it may be mentioned here that the respondent no.2     was 

earlier  a Private Limited Company  and was  later on converted into  a 
Public   Limited   Company.   The     respondent   no.3­Vivek       was   the 
Chairman  of  respondent no.2    and respondent no.4  was  the Vice­ 
President of respondent no.2.
3.
The   appellant­M/s     Aditya   Air   Products   Private   Limited 
were manufacturing   industrial and medical gases in their factories at 
Nagpur   and Chandrapur. The respondent   no.2   ( earlier   respondent 
no.1 ) had     placed order   through the respondent nos. 3   and   4   for 
LPG    cylinders,  CO2  gas cylinders and oxygen  gas cylinders for being 
delivered   at   the   sites   of   respondents     at   Amravati,   Bela,     and 
Chandrapur.   It     was     alleged   by   the   appellant   that   the   material   was 
supplied  as per the order issued and thee cheques   worth Rs. 7 lakhs 
were   issued   in   part   consideration   of   the   material   supplied     by   the 
appellant.   The   total   liability   of   the   respondents   was   Rs.   9,68,902/­. 

It was the  case of the appellant before the  trial Court that an amount 
of Rs.  2 lakh    was already deposited and, therefore, there  was  due  of 
Rs. 7,68,902/..   The   respondents   had allegedly issued three cheques 
to pay the due  amount. The first   two cheques  of Rs. 1 lakh each, were 
dated 12.1.2011 and the third cheque     of Rs. 5 lakhs       was dated 
4.

May 2010 and  8th March 2011.
12.4.2011.     The goods     were supplied during the period between 7th 
Since the cheques   were dishonoured due  to insufficiency 
of funds, the appellant had issued statutory   notice after dishonour  of 
cheques  and after waiting for  statutory period.  They   had lodged   a 
common  complaint in respect of all the three cheques, which  has been 
decided by the learned Judicial Magistrate, First Class and the order of 
acquittal has been passed.
5.
The  defence of the  respondent s before the trial Court  was 
that the cheques  were  issued by way of security deposit  and that there 
was no legally enforceable liability     due to the appellant. It   was   the 
case   of     respondents   that   though   the   appellant       claimed   to   have 
supplied  material  as  per  the   order,  the  original  order   forms, delivery 
challans     and   other   documents   demonstrating   sale   of   goods     and 

delivery  of the same  to the respondents were  not produced before the 
trial Court. The trial Court   took   note of the fact that   though PW   1 
has  stated in his  examination­in­chief  that he had got all the original 
documents and he could produce  the same  as and  when required, he 
failed to do the same inspite of the fact that this issue  was raised by the 
respondents   in  cross­examination   of   PW   1.   The   learned trial  Court 

after having gone through the  evidence  particularly cross­examination 
of PW 1,   had come  to the conclusion that the  respondents have been 
able to rebut  the  presumption which could be raised in faovur of the 
appellant. The learned trial Magistrate in his judgment has stated that 
the cross­examination of PW  1    indicates that he had no documents to 
support   the   claim   of     appellant   that   the   goods   were   supplied   to   the 
respondents.
6.
I   have   gone     through     the   cross­examination   of   PW     1. 
Though PW   1     had   shown  his  willingness  to produce the original 
documents, he avoided to produce the same despite the fact that he was 
thoroughly   cross­examined   in respect of documents – Exhs       38, 39 
and 40.   He has   admitted in his   cross­examination that he had not 
filed   delivery   memo   and   invoice   memo   either   with   the   complaint   or 
with the affidavit of  evidence in respect  of the goods   supplied by the 

appellant   during   the   period   between   7.5.2010   and   8.3.2011.   He 
stated in his examination­in­chief   that  record could not be produced 
because it was bulky.   He had   repeated the same thing in the cross­
examination. In fact,  he should have realised that it was high­time    for 
him to produce delivery challans and invoice memos.  The claim of   PW 
1    that the  record was bulky  and, therefore, could not  be produced, 
ig
does not appear to be correct. He denied the suggestion that the dates of 
three  disputed cheques    were  recorded by the   staff members of  the 
appellant.  This suggestion on behalf  of  the respondents to PW  1   was 
not  a bald suggestion, inasmuch as  there is no explanation as to why 
the  two cheques   dated January, 2011    were deposited in the Bank  in 
the month of   June,2011.   In the   ordinary     course,   no businessman 
will retain cheques   with him for six months  unnecessarily. If the two 
cheques   worth Rs. 2 lakhs       were not   deposited in the bank by the 
appellant,   PW  1 owed  an  explanation for the  same to the Court.
7.
The   learned   Magistrate   had   taken   the   view   that   the 
respondents/accused   had   been   able   to   rebut   the   presumption   under 
Section 139   of the Negotiable Instruments Act by probabilising their 
case.

8.

Learned   counsel   Mr   R.P
.Joshi   appearing   on   behalf   of   the 
appellant,   has   relied   upon   the   judgments   of   this   Court   reported   at 
2013 All MR (Cri) 1204;   { VPK   Urban   Co­op. Credit Society Ltd.  
vs. Mrs.   Nandini Waingade and another  }     and judgment     of the 
Hon’ble     Supreme   Court     reported   at  (2010)   11   SCC     441;  
{   Rangappa   vs. Shri Mohan}. This   gist   of the cases cited by Mr. 

R.P
.Joshi, learned counsel, is  that the presumption under Section 139 is 
a   rebuttable       presumption   and     as   to   whether   the   same   has   been
rebuttable   or  not,  is  to  be  considered by  the  Court  on  the   facts  and 
circumstances   of   the   case   in   hand.   The   Hon’ble     Supreme   Court   in 
another  judgment reported at (2007)  5 SCC 264 : { Kamala S.  vs.  
Vidhyadharan M J  and  another} has  stated  at paragraph no. 15 as 
under :­
“15.     The   Act   contains     provisions   raising 
presumption as regards  the negotiable instruments 
under   Section   118(a)   of   the   Act     as   also   under 
Section  139 thereof. The  said   presumptions    are 
rebuttable     ones.   Whether   presumption   stood 
rebutted   or not would not depend upon the facts 
and circumstances of each case.”

9.

In the present  case,  considering the fact  that PW  1   had 
been repeatedly   showing his willingness to produce the documents but 
factually   avoided to produce the documents   was clearly indicative of 
the   fact   that   the   goods     as   alleged,   were   never   supplied   during   the 
period   between 7.5.2010 and 8.3.2011. The view,therefore, taken by 
the learned trial Court, appears to be one of the probable views   and 

does  no call  for  any interference. The  learned trial  Court  has  rightly 
held  that the standard of proof required for rebutting the presumption 
shall not be as strong  as  a  standard of poof  required for proving  the 
prosecution case.
10.
I do not  find any merit in the Appeal. The Appeal  stands 
dismissed. 

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