1 of 12 Crl. Appeal No.250/2018
IN THE COURT OF THE METROPOLITAN SESSIONS JUDGE :: HYDERABAD
Dated this the 29th day of April, 2022
Present: Smt. E. Tirumala Devi, Metropolitan Sessions Judge, Hyderabad.
CRIMINAL APPEAL NO. 250/2018
From what court this appeal isThe III Special Magistrate, Hyderabad. preferred:
Case Number in that court CC. No. 161/2016
Criminal Appeal Number Crl. Appeal No. 250/2018
Name and description of the AppellantM/s. Vishal Agencies, Represented by its Proprietor Vikram Madanlal Bhandari, S/o. Madanlal Agarchandji Bhandari, Aged: 42 years, Occupation: Business, # 24, 60 Feet Road, Uttarahalli, Channasandra Village, Hobli, Bangalore – 560 061.
Name and description of the(1). M/s. NCL Industries, Represented Respondentby its Authorized Officer, Mr. Ch. Anil Kumar, S/o. Penchalaiah, Aged: 38 years, Sr. Officer (Liaison), Having its registered and corporate office at Raghava Ratna Towers, 7th Floor, Chirag Ali Lane, Hyderabad – 500 001.
(2). The State of Telangana, Represented by Public Prosecutor, Hyderabad.
The law and sentence under which The appellant/accused is found the Appellant was convicted before theguilty for the offence punishable under lower courtSection 138 of NI Act and is convicted under Section 255(2) of Cr.P.C. and is sentenced to undergo Simple Imprisonment for a period of one (1) year and to pay a sum of Rs.20,54,458/- as compensation under Section 357(3) of CrPC to the complainant within two (2) months from today, failing which, the accused shall undergo Simple Imprisonment for one (1) year.
Whether confirmed, modified orIn the result, the appeal is reversed and if modified, thedismissed by upholding the conviction modification and sentence passed by the III Special
Magistrate, Hyderabad in C.C.
No.161/2016, dated 09-03-2018.
2 of 12 Crl. Appeal No.250/2018
DATE OR ON WHICH
Presentation23-03-2018 Filing24-03-2018 Notice issued to Respondent to appear04-04-2018 Whether on bail, if so, the bail bond--- Respondent ordered to appear04-05-2018 Hearing12-04-2022 Judgment29-04-2022
This Criminal Appeal is coming on for hearing before me upon perusing the grounds of appeal and record of evidence and upon considering the arguments of Sri G. Ashok Reddy, Advocate for the appellant and Sri G.V. Bhaskar Reddy, Advocate for R1, this Court made the following:-
: : J U D G M E N T : :
1.This appeal is filed aggrieved by the judgment dt:9.3.2018 in
C.C.No.161/2016 passed by the III Special Magistrate, Hyderabad.
2.The parties herein are referred to as they were arrayed in the trial court.
3.1The succinctness of the case of complainant is that the complainant company carries on the business of manufacturing and sale of cement and other building products. The accused entered into dealership agreement with the complainant company and agreed to purchase the cement on credit basis. Based on the agreement, the complainant company supplied cement to the accused on different dates and on different invoices. During the course of business transactions, as on 18.6.2015, the accused is liable to pay an amount of
Rs.20,54,458/- towards outstanding amount. After constant demands by the complainant company, in discharge of his liability, the accused issued a cheque bearing no.037205, dt:28.9.2015 for Rs.20,54,458/- drawn on Indian Overseas
Bank, Banashankari II, State Branch, Bangalore.
3.2The complainant company presented the cheque for encashment through its banker IDBI Bank Limited, Abids Branch, Hyderabad, but the said cheque was returned with a reason “kindly contact drawer/drawee bank and please present again” vide cheque return memo dt:6.10.2015. Thereupon, the complainant got issued a legal notice dt:26.10.2015 to the accused by registered 3 of 12 Crl. Appeal No.250/2018 post acknowledgment and the accused received the legal notice on 31.10.2015 and issued reply notice dt:24.11.2015, but failed to pay the dues. Hence, the complaint.
4.During trial, the complainant got examined himself as PW1 besides examining PWs 2 and 3 and got marked Exs.P1 to P59 and Ex.X1 to X5. On the other hand, the appellant/accused examined himself as DW1 and got marked
Exs.D1 to D11.
5.The trial court after considering the evidence and other material on record, concluded that the appellant/accused is found guilty for the charged offence and thereby convicted and sentenced to undergo simple imprisonment for a period of one year. He is further directed to pay a sum of Rs.20,54,458/- as compensation under section 357(3) of CrPC to the complainant within two months from today, failing which, the accused shall undergo simple imprisonment for a period of one year for the offence under section 138 of NI Act.
6.Heard both counsel.
7.The learned counsel for appellant/accused submitted that the complainant failed to establish the legally enforceable debt, hence prayed to allow the appeal.
8.The learned counsel for respondent/complainant submitted that the trial court has rightly convicted the accused and thus prayed to uphold the judgment of the trial court.
9.Now the points that arise for determination are:
1) Whether the prosecution could prove the charge against the accused beyond reasonable doubt?
2) Whether the judgment of the trial court cannot be sustained?
3) To what relief?
POINT NO.1:-
10.The case of the defacto complainant is that their company has delivered the goods worth Rs.20,54,458/- out of acquaintance with the accused and that the accused has issued a cheque, but failed to honour the same and that the complainant has issued notice and inspite of receipt of the notice, the 4 of 12 Crl. Appeal No.250/2018 accused has not paid the amount under the cheque. Thus, the accused is facing charge under section 138 of NI Act.
11.In support of its case, the complainant has examined PWs 1 to 3 and got marked Exs.P1 to P59 and also Exs.X1 to X5. The accused got examined DW1 and got marked Exs.D1 to D11.
12.1PW1 has reiterated the averments of his complaint stating that the complainant company is a public limited company and the accused company is a dealer of the complainant company and that he has been working in the complainant company since 2008, that he is authorised to represent the case by virtue of Ex.P8/authorisation letter, dt:24.2.2011. It is elicited from him that their company carries on business of manufacturing and sale of cement and other building products. The accused is the proprietor of M/s.Vishal Agencies and the accused has entered into dealership agreement with their company and that based on the said agreement, they have supplied cement to the accused on different dates and that as on 18.6.2015, the accused is liable to pay an amount of Rs.20,54,458/-. He further stated that on constant demands made by them and in discharge of the said liability the accused issued a cheque bearing no.037205,
dt:28.9.2015 for Rs.20,54,458/-, that they have presented the said cheque for
encashment through their banker and it was returned for the reason that “kindly contact drawer drawee bank and please present again” vide cheque return memo
dt:16.10.2015/Ex.P2. Thus, they got issued legal notice and that the accused
has received the same, but has failed to repay the amount.
12.2In his cross-examination it is elicited that he was not present at the time of execution of agreement with the accused and that they have not filed agreement in this case. He further stated that the complainant has supplied the material to the accused only in the name of Vishal Agencies and on the purchase orders made by the accused they raised invoices, accordingly the consignment has been dispatched and that they have not filed the purchase orders in this case. He stated that the purchase orders were taken sometimes on phone and sometimes in writing. It is elicited from him that during the past seven years, no 5 of 12 Crl. Appeal No.250/2018 cheque of the accused was dishonoured and that he does not know whether the subject cheque is non-CTS cheque and that the subject cheque was not returned for insufficiency of funds. He stated that he does not know the particular reason why the complainant waited for such due amount of Rs.20 lakhs, then he added that the accused was previously due for more than Rs.50 lakhs and thereafter some payments were made and the accused fell due for such amount and for subsequent transactions and stopped payments and so the supply was stopped.
He denied the suggestion that the subject cheque was a blank cheque which was obtained by the complainant from the accused at the time of agreement and that the cheque is a non-CTS cheque and that it has become invalid and was presented in the bank by filling up the blanks with those amounts mentioned in the cheque. He further denied the suggestion that the subject cheques series was given by the banker of the accused in 2010 and that the complainant has presented the said cheque in the year 2015.
13.1PW2 is the Senior Sales officer in the complainant company. It is elicited from him that he knows the accused since 2014 and that on behalf of their company he used to send the material to the accused after obtaining permission from E-Sugam from the Department of Commercial Tax, Karnataka
State to supply the cement to the accused. He stated that the said E-Sugam reports show the supply of cement to the accused under Exs.P9 to P52 and that he has downloaded the E-Sugam reports from the official website of the
Department and he saved into DVD which is filed along with his affidavit. He stated that he has personal knowledge about the supply of cement under Exs.P9 to P52 and that the accused is liable to pay Rs.20,54,458/- and has issued Ex.P1 to discharge the said liability. Ex.P53 is the E-Sugam report showing the supply of material to the accused by the complainant dt:8.12.015. Ex.P54 is the CD.
The said exhibits are marked subject to objection raised by the defence counsel.
13.2In his cross-examination it is elicited that he used to get involved whenever the stocks are supplied to the consignees and whenever the invoices are generated. It is elicited from him that one time supply of material to the 6 of 12 Crl. Appeal No.250/2018 consignee is based on loading slip issued by the consignee. He further stated that they would also supply material whenever there is an order over phone. In the present case, the complainant used to supply material even though the value of the material of some of the invoices is due. It is elicited from him that the cheque amount relates to weight of 350 to 400 tonnes of worth of material and that their company team has collected the present cheque from the accused and it was a post dated cheque and that it was given by the accused for the value of the consignments. He added that though the accused was sending the amount through RTGS, when the accused failed to pay the value of the invoices amount, on demand to pay the due amount to the accused, the accused has delivered the subject cheque. He denied the suggestion that eventhough there is no due by the accused, the complainant company has misused the blank signed cheque given at the time of entering into agreement dt:24.12.2010.
14.1PW3 is the Commercial Tax Inspector. Ex.X1 is the letter of authorisation, Ex.X2 is the tax analysis details for the years 2014-16 pertaining to
Vishal Agencies. It is elicited from him that the accused firm M/s.Vishal Agencies is in their Commercial Tax Circle and that it is registered in their e-filing with TIN
No.29020349880. It is elicited from him that Ex.X2 contain the details of input and output tax analysis. The output tax means levying tax by the manufacturer on the dealer for the consignment sold to the dealer. The input tax means the tax collected by the dealer from the consumers for the material sold by the dealer to the consumer. Ex.X3 is the returns summary through E-filing system for the period April2014 to March2015. It shows the business details of the accused during 2014-2016. Ex.X4 is the attested true copy of E-Sugam report from 1.1.2014 to 31.12.2016 submitted by the accused. Ex.X5 is attested true copy of report on invoice details by the accused company for the months from July,2015 to February,2015. As per their record, the business of the accused was stopped on 1.12.2016.
14.2In his cross-examination it is elicited that the invoice details of
Ex.P26, 35, 37 to 42 is not reflected in Ex.X5. He stated that their department is 7 of 12 Crl. Appeal No.250/2018 not concerned about the details of the person to whom the consignment is delivered. It is elicited from him that the accused company should upload all its transactions in a month and file monthly returns to their department. Likewise the complainant also should file such returns showing all the transactions with the accused in a month. Whatever information is uploaded by the accused with respect to their transactions with the complainant company, such information only be available in their department. It is elicited from him that since the above eight invoices are not shown in Ex.X5, it means the accused has not claimed the input tax. He added that whenever the accused claims input tax, it is shown in Ex.X2 to Ex.X5. He denied the suggestion that E-Sugam can be raised by anybody.
14.3On his re-examination by the counsel for the complainant it is elicited that Exs.P38 to P42 are reflected in Ex.X4 and that it contains the details of dates and time of submitting information by the accused to their department.
15.1DW1 is the proprietor of Vishal Agencies. It is elicited from him that they have entered into dealership agreement with the complainant in 2010 and while entering into the said agreement he has issued blank cheque to NCL
Industries for the purpose of bank details. He stated that they have been making payments through NEFT or RTGS in advance and that as per the bank statement, their payments to NCL Industries Limited were made only through
RTGS and NEFT in advance for every transaction and that they have never issued any cheque for any transaction with complainant. He further stated that he has also got a bank letter given by the Indain Overseas Bank that the cheque book relating to the present cheque was given to the accused on 24.12.2010.
Ex.D8 is the bank statement issued to Vishal Agencies by the banker for the period from 1.4.2010 to 31.3.2015. Ex.D9 is the letter issued by Indian Overseas
Bank. It is elicited from him that the complainant created invoices with seal and signatures, and the said seal and signatures on the invoices do not belong to them. He filed a copy of acknowledgment under Ex.D10 which shows that they have received Ex.P5 notice. The said document Ex.D10 is relied upon by him to show that the seal and signature on Ex.D10 is their original seal and signature 8 of 12 Crl. Appeal No.250/2018 and that it differs from the seal and signatures made on the invoices exhibited by the complainant company. He further stated that the seal put on all invoices is “Vishal Agency”, but the name of their firm is “Vishal Agencies”. He further filed a copy of E-Sugam taken from the Government of Karnataka to show that anybody can submit or take E-Sugam on anybody’s name. Ex.D11 is the said copy of E-
Sugam raised by Jade Studio, Bangalore. Thus, he contends that all E-Sugams filed by the complainant are false documents and that they would not show any proof of delivery. He further disputed that Ex.D1, the receiver of consignment is
Vijaya Cements and the consignee name is Vishal Agencies and thus he has stated that they are not due to pay any amount to the complainant and that it is a mischief played by the complainant. It is contended that they have never taken any consignment on credit and thus they are not liable to pay any amount and that their cheuqe is not returned for the reason of insufficiency of funds, but it was returned for the reason that “kindly contact drawer, drawee bank and please present again”. Therefore, it is the contention of DW1 that there is no legally enforceable debt and that they are not liable to pay any amount to the complainant.
15.2In his cross-examination it is elicited from him that he has not filed any document to show that he has given a blank signed cheque to the complainant at the time of entering into the dealership agreement. That in general if a person insists a cheque for bank details, a cancelled cheque would be given normally. He stated that he maintains account for the receipt and sale of material. He was confronted with seven delivery challans and he was questioned as to whether they are one and the same as per Exs.D1 to D7 and he answered that all the documents are one and the same. Exs.P53 to P59 are the seven delivery challans cum tax invoices. He denied the suggestion that 3 copies of invoices would be prepared and that one copy would be retained by the consignor, one copy would be with the receiver and one copy would be sent back to the consignor after being duly signed by the receiver with seal, but there will not be any xerox copy with the consignees signature. He denied the suggestion 9 of 12 Crl. Appeal No.250/2018 that the accused has received the consignments, the truck driver has mistakenly obtained the stamp and signature of Vijaya Cements on Ex.P53. It is elicited from him that there was no sufficient balance to honour the subject cheque for Rs.20,54,458/-. He added that he has not maintained such amount in his account as he has not issued any cheque for such amount. He further denied that the accused has received the material as per the statement of account and invoices and that he intentionally affixed the stamp of Vishal Agency instead of
Vishal Agencies and that he is deposing false to avoid the payment. He further denied the suggestion that the subject cheque is not given in the year 2010, but it has been issued on demand for discharge of legally enforceable liability.
16.On a thorough perusal of the evidence on record, it is elicited that issuance of cheque is admitted by the accused, but it is contended that it was given towards bank details. But, DW1 has admitted that one would give a cancelled cheque for furnishing bank details. Therefore, the said contention is untenable by his own admission. It is further contended by the accused that the said cheque was given at the time of agreement, but no such agreement is filed
in the court. Admittedly there were business transactions between the
complainant and the accused and it was further admitted that the payments were also made from RTGS. The accused says that it was always through RTGS or
NEFT and that he has never issued any cheque. Another contention raised by the defence is that the cheque pertains to 2010 and the entire leaves in the said cheque book were issued in 2010 itself and that this is the only cheque presented in 2015 and thus argued that it is falsely used. Another contention raised by the defence is that their company is Vishal Agencies while the invoices in Exs.P9 to
P52 bears the stamp as Vishal Agency. Therefore, the endorsement of receiving the goods in the said invoices do not belong to them. Another contention raised in defence is that the return of cheque is not due to the reason of insufficient funds, but due to the reason that ““kindly contact drawer, drawee bank and please present again”. Thus, the accused has taken defence that there is no 10 of 12 Crl. Appeal No.250/2018 legally enforceable debt between himself and the complainant and that he is not liable to pay any amount.
17.But, the existence of legally enforceable debt is proved by the customer ledger of NCL Industries filed under Ex.P7. It shows the sales invoices value of the customer i.e, the accused/Vishal Agencies on various dates from
March,2011 to October,2015. Ex.P7 discloses all the details as well as invoices pertaining to the accused and it also shows the closing balance as
Rs.20,54,458/- and the dishonor of cheque on 6.10.2015 is also elicited from
Ex.P7. A perusal of Exs.P9 to P52 reveals that they are delivery challans cum tax invoices disclosing that the goods were delivered to Vishal Agencies by the
NCL Industries from January,2015 to February,2015. It is further strengthened by the evidence of PW3, the CTI through the exhibits filed by him under Ex.X4 and X5, as the tax invoice details submitted by accused in Ex.X4 and X5 disclose the transactions under Exs.P9 to P52. Ex.P1 is the cheque dt:28.9.2015 presented on 6.10.2015 which was returned with an endorsement “kindly contact drawer, drawee bank and please present again” under a cheque return memo/Ex.P2. Legal notice Ex.P3 was sent vide postal receipt/Ex.P4 which was received under Ex.P5/the acknowledgment dt:31.10.2015, the accused has not responded to the said legal notice, but instead he has issued a reply notice in
Ex.P6 calling for the details of the bills and supportive documents. Thus, ingredients of section 138 of NI Act are satisfied, therefore presumption under section 139 of NI Act is drawn in favour of the complainant. It is the duty of the accused to rebut the case of the complainant. The accused got examined DW1 and got marked Exs.D1 to D11, but a perusal of these exhibits coupled with the evidence of DW1 do not aid the accused to disprove the case of the complainant.
Exs.D1 to D7 are the delivery challans cum invoices and they bear the same TIN number as mentioned in Exs.P9 to P52. Ex.D1 is addressed to Vishal Agencies, but received by the Vijaya Cements. While Exs.D2 to D7, the consignee’s endorsement pertains to Vishal Agency. A perusal of Ex.D1 shows that it is the photostat copy of Ex.P53. In this regard it is pertinent to refer to the cross- 11 of 12 Crl. Appeal No.250/2018 examination of DW1. A suggestion was given by the complainant’s counsel which was denied by him. It was suggested that the truck driver must have mistakenly obtained the stamp and signatures of Vijaya Cements instead of
Vishal Agencies on Ex.P53. The contention of the complainant’s counsel is that the delivery challan and the goods would be entrusted to the truck driver, who obtains the signature on the challan from the consginee and that the consignor should not suffer for the said mistake. The said contention raised by the complainant in this regard sounds reasonable. Since Exs.D1 to D7 bear the same TIN as Exs.P9 to P52 and also further supported by the customer ledger/Ex.P7, it is held that the goods were delivered to the accused company as disclosed from Exs.P9 to P52. Ex.D8 is the bank statement showing that the cheque leaves in the said cheque book are used in 2010 by the accused. Ex.D9 is the letter from the bank saying that it is the cheque from cheque book issued on 24.12.2015 and that it was returned for the reasons “kindly contact drawer, drawee bank and please present again”, since it was a non-CTS cheque. It is pertinent to refer to the Apex Court decision reported in Lakshmi Dyechem Vs.
State of Gujarat reported in 2013(2) ALD(Crl) 823 (SC) wherein it was held that the reasons which are to be considered for dishonour of cheques are such as “account closed, payments stopped, refer to the drawer and that they are the only species of that genus”. It was further held that return of the cheque for the reason that “refer to the drawer” is also dishonour of cheque. Ex.D11 is the sample of tax invoice produced by the accused contending that it can be generated in any consignee’s name. Ex.D11 shows the consignee to be NCL
Industries. But, it is to be noted that it does not disclose the delivery particulars and whether the goods mentioned are delivered to the consignee. Thus, it cannot be taken as reference or cannot be compared with Exs.P9 to P52.
Hence,it is opined that these Exs.D1 to D11 do not aid the defence taken by the accused to disprove the case of the complainant. Thus, it is held that the complainant could prove that the accused committed an offence under section 138 of NI Act.
12 of 12 Crl. Appeal No.250/2018
POINT NO.2:-
18.In view of the reasoned findings arrived at point no.1, there is no need to interfere with the judgment of the trial court and hence the same is upheld.
POINT NO.3:-
19.In the result, the appeal is dismissed by upholding the conviction and sentence passed by the III Special Magistrate, Hyderabad in
C.C.No.161/2016, dt:9.3.2018.
Partly typed to my dictation and partly dictated to the Stenographer, transcribed by him, corrected and pronounced by me in the open Court, on this the 29 th day of April, 2022.
Sd/-xxx
METROPOLITAN SESSIONS JUDGE
HYDERABAD
DATED: 29-04-2022
Since the appellant/accused is absent, the trial Court is directed to execute the sentence.
Sd/-xxx
METROPOLITAN SESSIONS JUDGE
HYDERABAD