TaxTMI 
TaxTMI 
2020 (1) TMI 1
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....turer. The issuance of a cheque has arisen out of the transaction of sale of the steel material of different kinds by the complainant to accused No.1 company. There are two instances of sale dated 13/05/2003 and 14/05/2003. The value of this sale amounts to Rs. 5.00 lakhs. The cheque in question was issued on Punjab National Bank, Gandhibagh Branch, Nagpur for Rs. 5.00 lakhs. It was dated 15/05/2003. 03] The complainant on one hand contends about voluntarily issuance of that cheque for genuine transaction of sale of steel material. Whereas, the accused contends about issuance of a cheque not freely, but by applying the force. Accused Nos.2 & 3 are the Directors of accused No.1 - company. Accused No.3 signed the cheque. Accused No.2 expired after filing of a complaint and earlier to its disposal. On one hand, complainant contends about dishonour of cheque due to insufficient funds, issuance of a demand notice dated 21/06/2003 and its receipt by direct and by constructing way and consequent failure to pay the amount of the cheque. Whereas, the accused contends about issuance of notice to the complainant on 20/05/2003 lodging of a complaint with Lakadganj Police Station, Nagpur. 04]....
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....ss-examination? IV. In what manner, the accused needs to be dealt with, if this Court finds proof of commission of the offence? INTERFERENCE BY THE APPELLATE COURT 08] It is true that during pendency of the trial, the presumption of innocence is in operation. It get confirmed when there is a verdict of acquittal in favour of the accused. It is said that the appellate Court should not interfere in the judgment of acquittal normally. It is also true that the offences of the Indian Penal Code and the offences under the Negotiable Instruments Act stand on the different footing. In a first category, the accused generally takes a defence of denial. Rarely, these cases involved documentary evidence. Whereas, in a latter category, the cases mainly rest on a documentary evidence. So, the scope of interference by the appellate Court is more (if the evidence suggests otherwise) than the scope for interference in the Indian Penal Code offences. PRESUMPTION UNDER THE NEGOTIABLE INSTRUMENTS ACT 09] Sections 118 & 139 of the N.I. Act deal with those issues. The complainant relies upon the presumption under Section 139 of the N.I. Act. Whereas, the accused has taken the help of the proviso t....
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....s indorsee. We are not dealing the case of indorsement. So the payee is the holder in due course. In the cheque, if name of the person is mentioned, who is entitled to recover the amount is called as a payee under Section 7 of the N.I. Act. FACTS 13] In this case, the name of the complainant is mentioned in the cheque. So, he becomes the payee and holder in due course. Whether the cheque was issued voluntarily or not will be decided later on. PROVISO 14] Proviso to clause (g) lays down a rule, wherein the initial presumption in favour of the holder in due course is not applicable. Following are the ingredients of the proviso :- i] Instrument has been obtained from lawful owner or from lawful custody by means of (a) an offence (b) by fraud. ii] Instrument has been obtained from the maker or acceptor by means of (a) an offence (b) fraud or (c) unlawful consideration. So, if one of the categories is shown then the holder in due course is not entitled to request the Court to draw presumption that he is a holder in due course. In other words, he is also not entitled to request the Court that cheque has been received by him for discharge of debt or liability. FACTS 15] T....
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....ent of the hand-loan. In the facts and circumstances of the case, it was held that mere denial of the existence of debt and passing of consideration is not sufficient to rebut the presumption. The test of proof beyond reasonable doubt is certainly not applicable. On facts, the High Court held that accused could not rebut the presumption. 18] Accused can succeed in rebutting the presumption, if he can make his defence probable. The test to be applied is that of preponderance of probability. There was a variance in between the cross-examination and the answers given in 313 statement. So, on facts, it was held that accused could not rebut the presumption. This Court was pleased to convict the accused in the case of Datta Sonaji Doiphode vs. Deepak Walmik Meshram, reported in 2018(2) Crimes 6 (Bom.). 19] The judgments relied upon by the complainant is in the case of Lalji s/o Bansanarayan Choubey vs. Jiyalal Chavan & Anr., reported in 2009 ALL MR (Cri) 483. Once the fine amount is recovered, how much has to be appropriated, has been laid down in the said judgment. Whereas, on the point of standard and discharging of a burden on accused, how it is to be discharged, the judgment in th....
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....e added in the bill at Exh.21, but they were not added in the bill at Exh.20. VII. Bombay Sales Tax charges at 4% were added in the bills at Exh.20 & Exh.21, but during cross-examination, the complainant's witness admits that entry of sale in Excise Register is not taken (he offered explanation that it is not applicable to them). VIII. Weight receipt is issued only when goods are weighed on weighbridge. IX. Complainant's witness clarified that if the goods are weighed manually, no weight receipt is to be issued. X. Quantity of the material sold vide two bills is around 28 tonnes. XI. The Court observed difficulty to weigh such huge quantity manually. XII. Stock Register for goods purchased and sold is maintained, but witness has not produced the same. XIII. There were earlier transactions with the accused, but the complainant's witness answers that they are out of record. XIV. No account in the Register is maintained for earlier transactions with the accused as answered by the witness. CONCLUSION 23] For the above findings, the trial Court held that transaction of sale of the material is not proved by the complainant. I have also gone through the examination-in-ch....
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....ged from the burden of proving those facts. It is further pleaded that there is no need for them to produce the documents about the facts admitted during cross-examination. He further contends that the burden shifts on the complainant to produce those documents. On the other hand, the complainant contends that merely giving certain admissions does not relieve the accused from producing the documents. They further contend that if the accused wants this court to believe the contents of the relevant documents, it is for them to produce it. NOT PRODUCING DOCUMENTS 26] It is no doubt true that the complainant's witness has given certain admissions during cross-examination. They are referred above. We can certainly draw inference about receipt of a notice dated 20/05/2003 by the complainant, visiting the factory of Milkiyat singh on 15/05/2003 and executing the agreement about purchase of land with accused No.3. I fully agree with the complainant that it was primary duty of the accused to produce the documents. At least, the notice dated 20/05/2003 and F.I.R./ Charge-Sheet about offences under Sections 452, 294, 506(ii) of the Indian Penal Code, what prevented the accused from producin....
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....ot complete because as per the internal procedure of the company, at least two signatures are required, whereas, cheque in question only contains one signature. To prove this requirement, the company has examined Bhaudas Raut from Punjab National Bank. 31] It is true that through witness Raut accused has brought on record necessity of signing the cheque by two persons on behalf of the company. It can be believed. Issue does not rest there. Cheque is dishonoured due to insufficient funds. The accused through bank witness ought to have brought on record the reasons for not mentioning in the memo as "cheque is incomplete" They ought to have brought on record the practice of bank while scrutinizing the cheque. They ought to have brought on record why cheque was not dishonoured for reason "cheque is incomplete". Accused lost this opportunity even though they examined bank witness. Hence, we have to hold that cheque was returned for the reason 'funds insufficient'. Trial Court has not drawn any conclusion. It was wrongly held that the complainant ought to have brought on record earlier cheques given to the complainant by accused (paragraph 24). RECEIPT OF NOTICE 32] Originally there w....