SWASTIK COATERS PVT LTD Vs. DEEPAK BROTHERS

JUDGEMENT

(1.) This appeal is preferred against the judgment and order dated 3-8-1994 passed by the XI Metropolitan Magistrate at Secunderabad on his file in C.C. No. 409 of 1992. By the impugned order the accused No. 1 and 2 have been acquitted. The appellant M/s. Swastik Coaters Private Limited is the original complainant and M/s. Deepak Brothers is the accused No. 1 and M/s. Deepak Thakkar, a partner of Accused No. 1 is accused No. 2. The complaint is filed under Section 138 of the Negotiable Instruments Act alleging that the accused have issued a cheque dated 20-12-1991 vide Ex.P-2 which has bounced back with the endorsement of the Bank exceeds arrangement. The complainant accordingly received the dishonoured cheque along with the cheque returned memo dated 29-4-1992 from the bankers on 13-5-1992. Thereafter a legal notice dated 15-5-1992 was issued to the accused calling upon him to make the payment of a sum of Rs. 2,64,000/- together with interest at the rate of 18%p.a. from the date of the cheque till the date of the payment within 15 days from the date of receipt of the legal notice and the said legal notice was received by the accused on 18-5-1992. Thereafter the accused vide their letter dated 30-5-1992 sent a Demand Draft for an amount of Rs. 20,000/- to the complainant asking the complainant to credit the same in their account as part payment. Thereafter the complainant has by its legal notice dated 6-6-1992 intimated the accused that they have received the Demand Draft for an amount of Rs. 20,000/- on 1-6-1992 and the accused are liable to pay them a sum of Rs. 2,64,000/- together with interest at the rate of 18% p.a. from the date of the cheque i.e. from 20-12-1991 to 31-5-1992 amounting to Rs. 21,221.26 and the amount of Rs. 20,000/- sent by the accused has been apropriated towards the interest, without prejudice to their right to recover the principal amount of Rs. 2,64,000/- along with interest. The said legal notice also called upon the accused to pay the amount of Rs. 2,64,000/- together with interest and Rs. 2,5000/- towards the cost of issuing legal notice dated 15-5-1992 and 6-6-1992. It is stated that the said legal notice was issued by the accused on 8-6-1992 but the accused have not made the payment nor did he reply. In those circumstances the present complaint was filed for the offences under Section 138 of the Negotiable Instruments Act as amended in the year 1988 with a request to the Court to punish the accused. The appellant examined himself as P.W.I and got marked Ex.P-1 to P-16. The accused examined himself as D.W.I and produced one document Ex.1. On appreciation of the entire evidence on record the Court below has acquitted the accused persons. It is under these circumstances the present appeal is preferred.

(2.) The learned Counsel appearing for the appellant submitted that the entire approach of the Court below is not correct and accordingly the impugned judgment and order are liable to be set aside. On the other hand the learned Counsel for the respondents supported the judgment not only for the reasons urged in the impugned order but also on the ground that the complaint itself was not maintainable being filed by one of the Directors for and on behalf of the company without any authority. He also submitted that on the date of issuing the cheque there was no existing liability and as such offence under Section 138 of the Negotiable Instruments Act is not constituted. He also stated that the goods supplied by the company subsequent to the issuing of the cheque was substandard and the jail authorities for whose sake the goods were purchased, had rejected the major portion of the goods, and as such a bona fide dispute has arisen regarding the transaction, even before the alleged dishonouring of the cheque. He submitted that if these contentions are upheld it is not even necessary to go into the merits of the case. He submitted even otherwise the reasons assigned by the Court below in acquitting the accused do not call for interference in this appeal.

(3.) In order to appreciate the rival contentions of the parties it is necessary to note a few admitted facts of the case. It is an admitted fact that the complainant had supplied 125 bales of binding cloth vide bill No. 1401, dt. 27-11-91 vide Ex.P-1 worth Rs. 3,62,900/- and bank charges of Rs. 1,100/- are paid. A sum of Rs. 1,00,000/- by way of a Demand Draft was paid and for the balance amount of Rs. 2,64,000/- a cheque dated 20-12-91 was issued by the accused marked in the case as Ex.P-2. The said cheque on its presentation bounced back with an endorsement of the Bank dated 28-12-91, vide Ex.P-3, as "exceeds arrangement". Again the cheque has been presented for the second time and for the second time also it was returned with the bankers Memo. dt. 18-3-92, vide Ex.P-5. It appears that the complainant have presented once again for the third time the cheque and the same was returned vide bankers Memo dt. 29-5-1992, vide Ex.P-7, stating that "exceeds arrangement" and after the said memo the complainant issued a notice to the accused demanding the payment of the amount mentioned in the cheque within 15 days vide notice dated 15-5-92 filed in the case at Ex.P-9. On failure on the part of the accused the present complaint was filed and Ex.P-10 is the postal receipt and Ex.P-11 and 12 are the postal acknowledgments. Meanwhile the accused sent Rs. 20,000/- (vide Ex.P-13) vide letter dated 30-5-92 along with a Demand Draft for the said amount of Rs. 20,000/- filed in the case at Ex.P-13. On verification I found that the present complaint was filed through one of the Directors of the Company. The complaint does not disclose that either a resolution of the company is filed or there is any authorisation letter authorising the Director to file the said complaint. It is also not in dispute that the said 125 bales of binding cloth was supplied by the complainant on the basis of the quotation issued by the complainant vide Ex.D-1 and the said material was directly sent to Yerrawada Central Prison for which the material was purchased by the accused. It is also not in dispute that the material was sent subsequent to the issuing of the cheque. According to the complainant the said material was sent the next day of issuing of the cheque and according to the accused it was sent two days thereafter. In his evidence P.W.I stated that