TMI Blog2019 (7) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... cused can rely on the materials submitted by the complainant to raise such a defence and it is conceivable that sometimes the accused may not need to adduce evidence of his/her own. Appeal allowed. - CRIMINAL APPEAL NO.657 OF 2018 - - - Dated:- 23-7-2019 - DAMA SESHADRI NAIDU, J. Mr. Jatin Premji Shah a/w. Snehankita Munj and Zarna Shah for the appellant. Mr. Ram Mani Upadhyay for respondents 2 3. Mr. A.S.Patil, APP for the State. JUDGMENT Introduction: Appellant Doshi Brothers is a proprietary concern. Through its proprietor, BC Doshi, it filed a private complaint against M/s. Sai Wire Products ( the Company ) and its director Mustafa Mohammadhussain Sial ( Sial ), the 2nd and 3rd respondents respectively. Sial, as the co-signatory of the cheque, is said to be looking after the Company s day-to-day affairs. 2. Doshi, the sole proprietor, claims to have business relations with the Company. He further claims that, as part of their continued business transactions, he supplied goods to the Company and received cheques, signed by Sial and another, for the partial discharge of the Company s debt. The cheques dish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial Court s reasoning. According to him, it has failed to consider the vital documentary evidence, besides the oral evidence, Doshi has placed on the record. He also argues that the trial Court has made sweeping observations as if Doshi had filed no documents to support his claim. In this context, Shri Shah also underlines that Doshi enjoyed statutory presumption, but the trial Court has entirely forgotten that aspect. 8. To bolster his contentions, Shri Shah has relied on a few judgments. I will refer to them only if I need a precedential prop to buttress any proposition of law. Respondents 2 and 3: 9. To begin with, Shri Ram Mani Upadhyay, the learned counsel for the respondents 2 3, insists this Court should have had before it the entire lower Court record (R P) to let him examine all the proceedings and documents. In its absence, the rights of the accused might suffer. 10. To illustrate the need of R P, Shri Upadhyay cited two examples: first, the complainant s sworn statement under Section 200 of Cr.P.C is not part of the appeal record. In its absence, he could not verify whether there are any contradictions between that statement und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. Now, the admitted facts are these: Doshi s proprietary concern, which cannot be a different legal entity from its proprietor himself, has had business relationship with the Company. (And I have used the expression Company to include both the respondents, that is the Company and Sial, its Director). The Company admits that it had ordered supply of goods-steel-but Doshi did not supply them. The Company has not disputed the cheques but asserted that the Company gave those three cheques earlier as security and that Doshi misused them. 17. The Company maintains that Doshi has not discharged the primary burden the law cast on him. Doshi counters this assertion by arguing that as the cheques stood admitted, Section 139 of NI Act springs into action. And, rebuttable as the burden is, the Company has not discharged that burden. There can be no quarrel, however, about the legal proposition that the accused can discharge its statutory burden under Section 139 either directly or indirectly-that is, based on the infirmities in the prosecution s case. 18. Now, before we analyse the rival contentions, we will see how the trial Court has returned a verdict of acquittal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his pleader; to the Public Prosecutor; to the complainant if the appeal is from a judgment of conviction in a case instituted upon complaint; and to the accused if the appeal is under section 377 or section 378. The Appellate Court should also furnish them with a copy of the grounds of appeal. 23. Then, Subsection mandates that the Appellate Court should send for the record, if such record is not already available in that Court, and hear the parties. Of course, if the appeal is only about the extent or the legality of the sentence, the Court may dispose of the appeal without sending for the record. 24. Here, the appellant-complainant has filed all the material documents, including the evidence, along with the grounds of appeal. Yet what the respondent-accused wants, as his counsel insists, is the complainant s statement under Section 200 of Cr PC. True, different High Courts have taken different views on whether it is mandatory for the Judicial Magistrate to examine the complainant under Section 200 in a case under the NI Act. But a Division Bench of this Court, in Maharaja Developers v. Udaysingh Pratap Singh Bhonsale [2007 (3) Crimes 550 (Bom)], has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Section 200 Cr PC., does not materially affect the course of appeal, nor does it prejudice the Company. The Admissibility of Documents: 29. The Company s counsel has argued that though Doshi has filed many documents, he has not properly marked them. The judgment contains no schedule showing the list of documents-a practice essential for the appellate courts to know what documents have been legitimately brought on record. As the Company s counsel has rightly contended, not all documents placed on record would automatically get marked or admitted. 30. To steer the case clear of this controversy, I have considered only those documents that have been mentioned in the judgment as admitted. II. On the Merits: (a) What is a Proprietary Concern? 31. Regrettably, the trial Court seems to have been caught in a conceptual confusion on this point. It has observed that M. C. Doshi, who deposed as P.W. 1, has no proper authorization to present the complaint and to produce the evidence on behalf of the complainant company. It further observes that the complainant company firm is a proprietary firm and Doshi is its proprietor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorization to present the complaint on behalf of the complainant company. To repeat, in relation to a proprietary concern, its Proprietor getting authorisation does not arise. The proprietary concern and the proprietor are but one; there is no dichotomy. 36. Here curiously, perhaps adding to the trial Court s discomfiture, the proprietor has sued in the assumed name; that is, in the proprietary concern s name. As it is not a legal entity, no proceedings could be maintained in its name. It is, actually, the proprietor who should have sued or who is deemed to have sued here. First, this issue has never been raised in the trial Court, so it passed sub silentio. Second, it is a curable defect; therefore, no need to make adjudicatory mountains out of procedural molehills. Were the Cheques given as Security? 37. The Company and its Director contend that the cheques were given as security, but Doshi misused them. To justify this assertion, the Company has argued these aspects: (a) Doshi has failed to explain why he has taken cheques for ₹ 6 lakh when the alleged debt is more than that. (b) Doshi has claimed to have taken t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cover the total liability? The statement of account reveals the outstanding amount as ₹ 13,77,046/-, and this document has not been disputed. It has begun with an opening balance of ₹ 7,02,753/-. The Company always enjoyed, it seems, a credit facility, and it could keep, perhaps, a margin of about seven lakhs. So of ₹ 13,77,046/-, it issued cheques for six lakhs, again keeping a margin of about seven lakhs again. And a cheque can always be given, as Section 139 declares, for discharging a debt in full or in part. 43. The next question in this context is, why did the cheques were dated with a rubber-stamp, though they were handwritten? The answer is not far to seek. It is a matter of practice; it is a matter of convenience. In business transactions, the dates are certain and repetitive, but not the amounts, which have to be given both in words and figures. So a preformatted rubber stamp is the last thing any business could employ. In other words, it is unusual, even impossible, to find a business concern using rubber-stamps to write words and figures on a cheque. It may use a typewriter or a printer, though. The date-stamp, on the other hand, is a devise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the twin burden: that the cheques were given as security, and that they did not receive the goods. About the Company s assertion that it had given the cheques to Doshi as security, it has placed no evidence. Nor has it elicited anything from Doshi in the cross examination. In fact, issuing cheques as security and not receiving the goods are two different things; one cannot disprove the other. Giving cheques as security, to be explicit, is unconnected with not receiving the goods. Have the Goods not been Supplied? 48. The Company has admitted that it had ordered steel, but Doshi did not supply the goods. In that context, the trial Court has concluded that Doshi was under a statutory obligation to prove that the Company issued the cheques to discharge the existing legally enforceable debt/ liability , but he failed to discharge that burden. (a) The Presumptions: 49. To answer this contention, we must examine the statutory position under the NI Act, especially Sections 118 and 139. Under Section 118, the presumptions cover (a) consideration, (b) the date, (c) the time of acceptance, (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, Rangappa disagreed with Krishna Janardhan Bhat. But it has accepted this is a rebuttable presumption and that it is open to the accused to raise a defence, contesting that presumption. Rangappa has, in that context, observed: Section 139 of the Act is an example of a reverse onus clause that has been included to further the legislative objective of improving the credibility of negotiable instruments. . . However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof. 54. But Rangappa endorses Krishna Janardhan Bhat on the question of rebuttal. It holds that in the absence of compelling justifications, rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keeping aside everything else, Doshi can latch on to the statutory presumption under Section 139 that the cheques were given for the discharge of a legally enforceable debt. It must have been the Company s turn to rebut it. Wishing away a presumption is no rebuttal; neither is a bald denial. 59. The trial Court s observations that Doshi has not produced the records to prove that it had supplied the goods and that he has not examined the accountant carry no conviction. If Doshi had to prove the whole transaction from the scratch merely because the Company denied having received the goods, the statutory presumption pales into oblivion. And Section 139 of NI Act stands entirely ignored. Collateral Factors: 60. Even otherwise, from the records it is evident that getting the cheques dishonoured is nothing new for the Company vis- -vis Doshi. In the statement of account, there were instances recorded that the Company gave cheques but did not honour them. To illustrate, on 12th June 2009, the Company s cheque was returned unpaid; so was on 23rd September 2009. In fact, the banker s endorsement reads don t present again, an endorsement usually reserved for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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