GANGARAM N M Vs. NATARAJ SAW MILLS

JUDGEMENT

(1.) THESE petitions are heard and disposed of by this common order as the petitioner in these cases is the same person and similarly the respondent is also common.

(2.) IT is the case of the petitioner that both the petitioner and respondent were timber merchants and were regularly transacting business whereby the petitioner would sometimes engage the respondent's services for cutting timber and at other times would purchase timber from the respondent and during the course of these transactions would make payments from time to time. On occasion when there were cash transactions, it was the practice for the petitioner to issue cheques by way of security on the footing that he would make payments later and it is in the course of such transaction that cheques, totally numbering 24, had been issued to the respondent as security and it is those cheques, which are the subject matter of the several cases. It was the case of the respondent-complainant that when the cheques were presented for payment, they were returned with endorsements to the effect that funds were insufficient and on the basis of such endorsements, notices were issued as contemplated under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the NI Act", for brevity) and since there was no compliance with the demand, the complaints followed. The petitioner had entered appearance and had contested all the cases and had set up a common defence to the effect that the cheques were not issued for discharge of any legal liability and were, as already stated, only issued as security for the payment of money that was due and such payments have been made independently. But, however, the cheques, which were issued and which are the subject matter of the complaint, were not returned to the petitioner and it is those cheques, which were being misused. The complainant had strongly refuted such a defence and on the basis of the material evidence that was tendered, the Trial Court had held that the allegations were proved and sentenced the petitioner in each of these cases to pay a fine amount which totalled to about Rs.15,19,000/- in all including the cheque amounts which totalled to Rs.13,99,000/- and out of which compensation amount was also directed to be paid exceeding the respective cheque amount. That having been challenged in appeal, the appeal was dismissed. However, the only modification in the judgment passed by the Trial Court, was reduction in the fine amount. It is that, which is challenged in these petitions.

(3.) THEREFORE, the learned counsel would submit that in the case on hand it was for the petitioner to have produced material to hold that there was no legal liability. If indeed, there were payments made corresponding to the cheques that were issued which are the subject matter of the complaint, the petitioners cannot contend that since statement of accounts were not produced by the complainant-respondent that an adverse inference had to be drawn on a preponderance of probabilities. The probabilities would arise only if there was some material produced by the petitioner to indicate the absence of legal liability for which the cheques could have been issued. On the other hand, when the petitioner does not deny that the cheques were issued on his account and they were duly signed by him, the preponderance of probabilities would be in favour of the complainant and not the respondent. If the cheques had been issued, 24 in all, as security for due payment, it is surprising that the petitioner did not choose to stop payment of these cheques, if it is to be further accepted that the complainant had illegally withheld those cheques even after having received the payments and had sought to use them illegally in lodging the complaint. Therefore, in the absence of any such material, it is not open for the petitioner to urge that the cheques were issued as security and were being misused by the complainant and therefore would submit that there is no substance in the present case on hand. On the other hand, it is the complainant who should be aggrieved as the compensation that is to be paid out of the fine amount is abysmally low and does not correspond to the interest that the money would have accrued over the years, as the cheques are of the year 2000 and therefore would submit that there is no warrant for interference by this Court.