TMI Blog2018 (6) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... The accused has issued cheques in question which were exhibited in evidence vide Exhibits19, 20 and 21. The applicant-accused has admitted that the amount of cheques is due and payable to the complainant. However, the defence of the applicant-accused is that the alleged transactions are forward trading transactions, which are also called as Badla transactions, which were prohibited by Pune Stock Exchange, and therefore, the same are not legally enforceable. In accordance with Section 138 of Negotiable Instruments Act, it shall be presumed unless contrary is proved, that the holder of the cheque received the cheque of the nature referred to in Section 138 of the Act for the discharge in whole or in part of any debt or other liability. In the present case, the complainant has proved that the cheques were issued by the applicant-accused. The said presumption is not rebutted by the applicant-accused in any manner. The applicant-accused had admitted issuance of cheques and that there were outstanding due from him to the complainant in February 1996. The findings of conviction imposed by the Trial Court and confirmed by the Appellate Court, are required to be accepted. While impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the said cheques be presented again for encashment with undertaking to honour the same. The complainant deposited the said cheques in his bank on 3rd July 1996. However, the said cheques were returned by the bankers with remark not arranged for . The complainant received the written memo on 4th July 1996 issued by the bankers of the applicant-accused through his bank on 5th July 1996. The complainant thereafter issued notice to the accused on 13th July 1996 through his advocate and called upon him to pay the amount of cheques. The said notice was received by the applicant-accused, however, he failed to pay the amount. The applicant-accused forwarded the reply dated 24th July 1996 through his advocate raising false contentions. It was stated that there is an agreement between the complainant and the applicant-accused not to deposit the cheques by the complainant. The complainant denied the said agreement and called upon the applicant-accused to give particulars and copies of the agreement, as contained in letter dated 4th August 1996 and 19th August 1996. Thereafter the complaint was filed on 26th August 1996 before the Court of learned JMFC, Cantonment, Pune. 4. The Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 14th January 2013, the revision application was restored to file subject to deposit of ₹ 3.85 lakh by the applicant in this Court. The notice of hearing of the revision application was served by the applicant-accused upon respondent no.2 and the affidavit dated 18th January 2018 has been filed in these proceedings. 7. Learned advocate for the applicant accused submitted that both the Courts below have committed an error in convicting the applicant. The Courts below failed to take into consideration that the cheques were not issued in discharge of legally enforceable debt or other liability, which is a requirement to prosecute an accused for offence u/s 138 of Negotiable Instruments Act, 1881. It is further submitted that the transaction between the applicant-accused and the complainant is in the nature of Badla Trading which was banned from December1993. Therefore, any amount claimed out of such Badla Trading is not a debt, which can be legally recoverable. Both the Courts have ignored the said aspect and have not appreciated the evidence in proper perspective. The Courts have erroneously rejected the claim of the applicant accused that forward transactions or B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived the shares, he issued receipts for them. Exhibit45 is one such receipt issued by the complainant. The complainant had also agreed with regards to Exhibit22 that he did not issue delivery slips. The transactions at Exhibit22 were made without any intention to transfer ownership of the securities. The complainant did not prove that the transactions in Exhibit22 were genuine by producing any documents. 8. Learned counsel for the applicant accused further submitted that the bulk of transactions between the applicant-accused and the complainant are Badla transactions or forward transactions. It is also the case of the applicant-accused that it was agreed between them vide agreement dated 30th April 1996 that in view of the agreement and undertaking given by the applicant-accused to repay the same dues along with stipulated interest @ 1% per week from 15th February 1996. The cheques in question stood cancelled. He produced the agreement at Exhibit49. It is submitted that even in his reply to the notice issued by the complainant for the dishonour of cheques, a reference was made to the said agreement to counter the liability. It is contended that in spite of the said claim, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so indicate that the Court has scrutinized and appreciated the evidence on record and after giving opportunity to the defence, has held that the applicant-accused is liable to be convicted for the said offence. The Appellate Court has confirmed the judgment of conviction by taking into consideration the evidence on record and the submissions advanced by both the parties. The complainant has examined himself and two other witnesses. The accused has examined himself as a defence witness to contend that the transactions were in the nature of Badla transactions, which are prohibited in law. 11. Admittedly from February1993, the applicant-accused was dealing with the complainant in connection with purchase and sale of shares. The accused has issued cheques in question which were exhibited in evidence vide Exhibits19, 20 and 21. The applicant-accused has admitted that the amount of cheques is due and payable to the complainant. However, the defence of the applicant-accused is that the alleged transactions are forward trading transactions, which are also called as Badla transactions, which were prohibited by Pune Stock Exchange, and therefore, the same are not legally enforceable. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se is that the transactions were bona fide. He produced the extract of account of the applicant, Exhibit22. The applicant-accused admitted that he had signed the said extract of account but denied the written contents of Exhibit22. There is an endorsement on Exhibit22 and below that endorsement the applicant-accused has signed. As per the said endorsement, the applicant-accused confirmed its dues to the complainant as per said statement of account. The applicant-accused undertook to honour the cheques. He admitted that he had some accounts with the complainant and the extract of account at Exhibit22 is pertaining to the period from February1996 and 31st May 1996. The accused has admitted that there were 12 to 15 genuine sale transactions maintained in Exhibit22 extract of accounts and remaining transactions are Badla transactions. The applicant-accused also relied upon settlement no.39 at Exhibit44 and receipt dated 29th May 1995 at Exhibit45 as well as bill dated 29th October 1995 and 4th January 1996 vide Exhibits45 to 48. In cross-examination, however, the applicant-accused admitted that there is no reference to these documents at Exhibits44 to 48 that the alleged transactions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd informed him that he has not produced the copy of the agreement and that he has not mentioned in the correspondence with complainant that the alleged transactions are Badla transactions. The Trial Court, therefore, has observed that the agreement is not binding on the complainant. The original was not brought before the Court and it was contended that the original is with the complainant. Thus, there is no substance in the defences raised by the applicant-accused. 14. On perusal of the documents at Exhibits42 to 48, the Trial Court observed that there is no reference in those documents that the alleged transactions are Badla transactions. The accused failed to examine the Secretary of Pune Stock Exchange or any other witness to prove that the transactions between him and the applicant-accused are Badla transactions. It is also pertinent to note that the applicant-accused had presented the list of witnesses vide Exhibit42 and stated that the Secretary of Pune Stock Exchange and the Director of SEBI, Mumbai are the defence witnesses. He had also prayed for issuance of summons to these witnesses, however, the applicant-accused did not examine the said witnesses to prove that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Court and the Appellate Court, the defence of the applicant that the cheques were issued in respect of Badla transactions has been rejected by assigning proper reasons. The Trial Court has observed that the complainant has proved that the cheques were issued by the applicant-accused and that there were dues payable by the applicant-accused to the complainant at the relevant time. The applicant had also raised another defence on the basis of purported agreement stating that the cheques were annulled while admitting his liability. It is also pertinent to note that the applicant-accused has not examined any officer of Pune Stock Exchange or broker to prove that the disputed transactions between him and the complainant, are forward trading transactions and which are banned by Pune Stock Exchange. In spite of liberty, the applicant-accused did not avail of the same in support of his purported defence and now belatedly he cannot be permitted to prefer such an application which is also devoid of merits. From the record and as has been observed by the Trial Court, the applicant-accused had tendered the list of witnesses vide Exhibit42 stating that he will rely upon the defence witnesses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 15th April 1998 passed by the learned Judicial Magistrate, First Class, Cantonment Court, Pune in Criminal Case No.2197 of 1996 convicting the applicant for the offence u/s 138 of Negotiable Instruments Act, 1881, as well as the judgment and order dated 6th November 2001 passed by Additional Sessions Judge, Pune in Criminal Appeal No.84 of 1998, is confirmed, subject to modification of sentence; (ii) The substantive sentence of imprisonment of three months imposed by the Trial Court vide judgment and order dated 15th April 1998 and confirmed by the Sessions Court, Pune vide judgment and order dated 6th November 2001 is set aside and the applicant is sentenced to pay fine of ₹ 3.95 lakh. The amount of ₹ 3.85 lakh out of the fine amount is directed to be paid to respondent no.2complainant towards compensation; (iii) Since ₹ 3.85 lakh has been deposited by the applicant-accused in this Court during pendency of this revision application, the respondent no.2complainant is permitted to withdraw the same; (iv) Criminal Revision Application No.407 of 2001 and Criminal Application No.477 of 2010 stand disposed off in above terms. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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