MUNISH MEHRA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) This criminal revision petition has been preferred by the petitioner accused against the judgment of the learned Addl. Sessions Judge, Sirmour passed in appeal affirming the judgment and sentence passed by learned Judicial Magistrate, Sirmour, convicting the petitioner herein to pay a fine of Rs.8,18,500.35 paise and sentenced to undergo imprisonment till rising of the Court. The bank instituted the complaint out of which the present proceeding arises on the allegation that M/s Wadhwa Pharmochem Private Ltd., Kala Amb (hereinafter 'Wadhwa Pharma') had been obtaining financial facilities in the nature of cash credit limit for the last seven years. In accordance with the agreement, the raw material and finished/semi-finished goods were hypothecated with the bank. The sale proceeds of these goods were required to be deposited by them in the cash credit account. The complaint then proceeds that Wadhwa Pharma sold their products to the accused by bill No. 17 dated 13.11.1995 Ext.PW4/D for Rs.3,06,000.50 paise, bill No. 18 dated 15.11.1995 Ext.PW4/E for Rs.2,92,001.90 paise and bill No. 20 dated 19.11.1995 Ext.PW4/N for a sum of Rs. 2,20,497.95 paise which goods were dispatched through transport Company and the documents were submitted to the Bank to be retired by the complainant. These goods could not be released from the transport Company by the accused without retiring the documents i.e. paying the amount of these bills to the bank.

(2.) On the request of Wadhwa Pharma, the bank purchased these bills aggregating to Rs. 8,18,500.35 paise and paid this amount to Wadhwa Pharma to the extent of 75% on the assurance that the bills would be retired by the consignee (accused in this case), before taking delivery of goods from the transport Company. The accused managed the delivery of the goods in connivance with Wadhwa Pharma. By letter dated 8.6.1996 (Ext.PJ) addressed to the complainant bank sent cheque No. 055202 for a sum of Rs. 8,18,500.35 paise drawn on the bank of Baroda, Jawaharnagar, New Delhi in the name of Wadhwa Pharma constituting the consideration for three bills and with the assurance that on presentation of the cheque it would be honoured by the bank. Wadhwa Pharma had delivered letter dated 10.6.1996 (Ext.PB) requesting the complainant to collect the amount. The bank was the holder of the cheque in due course. On these assurances, the complainant-bank paid the amount to Wadhwa Pharma and the complainant sent the cheque in question for collection, but the same was returned with the remarks "insufficient funds". Two notices, one by registered post and another by U.P.C. were issued to the accused but of no avail. After recording preliminary evidence, the accused was summoned to face trial under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act').

(3.) The point formulated by the learned trial Court for determination was that whether the cheque Ext.PA for a sum of Rs.8,18,500.35 paise was dis-honoured thereby attracting the provisions of the 'Act'. The learned trial Court holds the fact that cheque Ext.PA for a sum of Rs.8,18,500.35 paise drawn on the bank of Baroda, Jawaharnagar Branch, New Delhi has not been disputed by the accused. His defence was that the cheque issued to Wadhwa Pharma as security and not against any liability nor was it issued to the bank. There was no privity of contract between the accused and the Bank.