GOA HANDICRAFTS RURAL AND SMALL SCALE INDUSTRIES DEVELOPMENT CORPORATION LTD Vs. SAMUDRA ROPES PVT LTD

JUDGEMENT

(1.) THE Appellant herein is the original Complainant. He is challenging the judgment and Order passed by the 1st additional Sessions Judge, Panaji, who by his order dated 5-9-2003 acquitted the respondent/accused for an offence punishable under Section 138 of the Negotiable instruments Act, 1881 (Act, for short) and who by his Judgment and Order was pleased to set aside the Order passed by the Judicial magistrate, First Class, Panaji, who had convicted the Accused under Section 138 of the said Act.

(2.) THE brief facts which are relevant for the purpose of deciding this Criminal Appeal are as under :-The Complainant is a Company registered under the Companies Act and its registered office is at Panaji, Goa. The Accused No. 1 is also a Private Limited Company having its office at Margao, Goa and the Accused No. 2 is the Managing Director of Accused No. 1 which admittedly is under the control of respondent No. 2 and its day to day management. The Accused had issued a post dated cheque dated 29-12-1999 for an amount of Rs. 10,00,000/- in favour of the Complainant drawn on Saraswat Co-operative Bank Ltd. towards the discharge of liabilities of Accused no. 1 in respect of the materials taken by them on credit from the Complainant. This cheque was deposited by the Complainant with their bankers. However, the said cheque was returned by the said Bank with an endorsement "exceeds arrangement". The Complainant thereafter issued a legal statutory notice dated 16-3-2000. However, the Accused did not give any reply to the said notice nor payment was made by the Accused within 15 days from the receipt of the said notice. The Complainant, therefore, filed a complaint under Section 138 of the said Act. Process was issued by the magistrate on the said complaint after the statement of Sadashiv Shirodkar was recorded in verification of the complaint. The trial Court convicted the Respondent/accused under section 138 of the said Act and sentenced him to undergo imprisonment till rising of the Court and further directed him to pay compensation of Rs. 10,00,000/- and in default of payment of compensation to undergo 6 months Simple imprisonment. Against the said Order, the accused preferred an Appeal before the session Court being Criminal Appeal No. 78 of 2002. The Additional Sessions Judge, Panaji, by his Judgment and Order dated 5-9-2003 set aside the Order passed by the Magistrate and allowed the Appeal and acquitted the Accused of the offence punishable under Section 138 of the said Act. Against the said Order, the original Complainant has filed this Appeal against acquittal.

(3.) SUBMISSIONS: the learned Counsel appearing on behalf of the Appellant has submitted that the additional Sessions Judge has erred in coming to the conclusion that there was no existing debt or liability and had further erred in relying on a Judgment in the case of R. Sreenivasan vs. State of Kerala and another (2002)Vol. 11 Company cases (sic.) and in the case of Shri. Taherr Khambati Vs. M/s. Vinayak enterprises (1995 Cri. L. J. 560) and the same had been overruled by subsequent judgment of the Supreme Court. He submitted that the lower appellate Court had failed to take into consideration that the Complainant in his cross-examination had clearly admitted that there was an existing debt and liability payable to the complainant and that the cheque was issued for discharging the said liability. He submitted that, therefore, the findings of the Sessions court was perverse to the extent that he did not take into consideration the specific admission given by the Accused in his cross-examination. He further submitted that the sessions Court had clearly erred in coming to the conclusion that the trial Court had only considered the point whether the said cheque was issued by way of security. He submitted that the trial Court in fact had considered the evidence adduced by the Complainant and the admissions which were given by the Accused in its totality and thereafter had given a specific finding that the cheque was issued towards the existing debt and legally enforceable liability. The learned Counsel appearing on behalf of the appellant further invited my attention to a number of Judgments of the Supreme Court and to Judgments of this Court and various other High Courts in support of his submissions firstly on the point that even if the cheque was issued under security even then it would attract the liability under Section 138 of the said Act. In support of this submission, he relied on a judgment of the Supreme Court in the case of icds Ltd. Vs. Beena Shabeer and another ( (2002)6 SCC 426 ). He also relied on a judgment of the Kerala High Court in the case of Gopi s/o. Vasudevan Vs. Sudarsanan s/ o. Chackrapani and another (2002 Cri. LJ. 4194 ). He also relied on a Judgment of the madras High Court in the case of Palraj Vs. Lalchandh ( (2001)103 Com. Cases 527) and on a Judgment of the Madras High Court in the case of M/s. Alsa Constructions and Housing limited and another Vs. M. Mal Reddy (1999 Cri. L. J. 2743 ). He further submitted that even if the amount mentioned in the cheque was larger than the liability even then the penal provisions under Section 138 of the said Act were attracted. In support of the said submissions he relied on a Judgment in the case of P. V. Kochayippa Vs. P. N. Suprasidhan rajani Bhawan (2002 CRI. L. J. 4803) : 2002 (3) ALL MR (JOURNAL) 31 and in the case of Andhra Engineering Corporation Vs. TCI Finance Ltd. (1999 DCR 130) : 1999 all MR (Cri) JOURNAL 51. He also relied on another Judgment of the Kerala High Court in the case of R. Gopikuttan Pillai Vs. Sankara Narayanan Nair (2004 (1) DCR 222 ). The learned Counsel also sought to distinguish the Judgments on which reliance was placed by the Additional Sessions Judge. He further submitted that it was the burden of rebutting the presumption which is raised under section 139 of the said Act which was squarely on the Accused and the said burden had to be discharged by leading cogent evidence. In support of the said submission, he relied on a judgment of the Supreme Court in the case of k. N. Beena Vs. Muniyappan and another ( (2001)8 SCC 458) : 2002 (1) ALL MR 277 (S. C. ). He further submitted that a mere disability of the Accused to pay the amount would not absolve him from his liability under section 138 of the said Act. In support of the said submission he relied on a Judgment of the supreme Court in the case of Pankaj Mehra vs. State of Maharashtra (2000 (2) SCC 756 ). He further submitted that pendency of the proceedings before the BIFR did not in (sic)ex post facto file a complaint under Section 138 of the said Act. In support of the said submission, he relied on a Judgment of the supreme Court in the case of Kusum Ingots and Alloys Ltd. Vs. Pennar Peterson securities Ltd. and others ( (2000) 2 SCC 745 ). He further submitted that the provisions of Section 138 to Section 142 had to be construed in such a manner that the mischief which was sought to be remedied by the said provisions would not render (sic ). In support of the said submission regarding the object of section 138 to Section 142 he relied on a judgment of the Supreme Court in the case of modi Cements Ltd. Vs. Kuchil Kumar nandi (1998)3 SCC 249): 1998 (2) ALL MR 433 (S. C.) and also in the case of Dalmaia cement (Bharat) Ltd. Vs. Galaxy Traders and Agencies Ltd. and others (2001)6 SCC 463) and also in the case of Goa Plast (P) Ltd. Vs. Chico Ursula D'souza (2004)2 SCC 235): 2003 (2) ALL MR 750 (S. C.) and in the case m/s. Alsa Constructions and Housing limited and another Vs. M. Mal Reddy (1999 CRI. L. J. 2743 ). He further relied on two recent Judgments of the Kerala High Court in the case of M/s. General Auto Saies Vs. D. Vijayalakshmi, (2005 (3) ALL MR (JOURNAL) 6 and in another case in Assoo hajee Vs. K. L. Abdul Lathcef and another (2005 (3) ALL MR (JOURNAL) 21) in support of his submission that the prosecution for the dishonour of the cheque was maintainable even though the cheque was given by way of security.