TMI Blog2020 (1) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... that he executed the said MOU dated 3rd September 1996 for selling 2000 shares, which were with him, including shares of his wife, son, friend Mr. Dolare and his wife. At the same time, for reasons I am unable to fathom, complainant says he is not inclined to produce the MOU in these proceedings because he has produced it in a civil suit, which had already been filed. The Trial Court after considering the evidence and the documents and the facts and circumstances of the case, dismissed the complaint on the basis that there is no legally enforceable debt or other liability. The reason why the Escrow agent arrangement, as mentioned in paragraph 2 of the MOU, was arrived at was to only safeguard the interest of both the parties. It should not happen that accused make the payments but complainant does not resign from the company and hand over the original share certificates together with duly filled and signed share transfer forms. It should also not happen that complainant would submit or hand over the letter of resignation together with original share certificates and the share transfer forms duly filled and signed to accused but accused do not make the payments. This protecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the accused in both the complaint were different, the complainant being common. 3. Complainant and two accused were shareholders of one Shree Sai Baba Sand Dredging Company Private Limited (the said Company). Complainant, through himself and through others, held 2000 fully paid equity shares in the said company. It is not necessary to go into the background of the companies and how it works, suffice to say complainant wanted to exit and offered to sell 2000 shares to the two accused. Complainant personally had only 400 shares in his name, whereas the remaining 1600 shares were held by his wife (400 shares), his son (400 shares), his friend one Rizwan Gulam Murtaja Dolare (400 shares) and Farbida Dolare (400 shares). The accused agreed to purchase the 2000 shares for lump sum consideration of ₹ 18 lakhs. The understanding between the two parties were reduced to writing in the form of a Memorandum of Association/Understanding dated 3rd September 1996. As per the MOU, two cheques of ₹ 3 lakhs each dated 30th September 1996 and 31st October 1996 were issued. The balance ₹ 12 lakhs were to be paid in installments by issuing 12 post dated cheques of ₹ 1 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00 lacs. NOW THEREFORE THIS PRESENTS WITNESS AND IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:- 1. Shri. H. R. Pathak agrees to sell and Shri. Rajendra and Shri Dharmendra Ratan Mhatre agree to purchase the shares held by Shri. Harendra Ramchandra Pathak in Shree Sai Baba Sand Dredging Company Private Limited for an agreed lumpsum consideration of ₹ 18.00 Lacs. The said sum of ₹ 18.00 lacs shall be paid to Shri. H. R. Pathak as mentioned in Schedule A hereunder written. 2. It is mutually decided that Shri. Harendra Ramchandra Pathak shall sign a letter of resignation from his Directorship/chairmanship of Shri. Sai Baba Sand Dredging Company Private Limited and also transfer forms in respect of the shares; and the said resignation letter and original shares alongwith the transfer forms, duly filled and signed shall be kept in the custody of a third person, who will release the same to Shri. Rajendra and Shri. Dharmendra Ratan Mhatre only after the full and final payment is made to Shri. Harendra Ramchandra Pathak as mentioned in the Schedule A annexed hereto. Schedule A Schedule of payments of ₹ 18.00 lacs to made to Shri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al no.685 of 2003 denying liability. In short, what is stated in the reply is the amounts under the cheques have not become due as there were preconditions to be complied with by complainant, which complainant had not complied. Complainant, thereafter, filed the complaints but I have to note that in the complaint, complainant has not dealt with the stand taken by the accused in reply to the statutory notice. 6. Process was issued and accused denied liability and claimed to be tried. In both the complaints, complainant led evidence of three witnesses, the first witness being himself as PW-1 and the other two are from the Bank to prove the cheques being deposited and dishonoured. The respondents have not disputed that the cheques, which are subject matter of the two complaints, have been issued. There is also no disputes that the cheques were dishonoured. It is also not disputed that a statutory notice under Section 138 of the said Act was issued by complainant because there is also a reply sent to the statutory notice. Mr. Datar submitted that therefore, under Section 139 of the said Act, there is a presumption that the cheques issued were for discharge of a debt/liability. Mr. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary burden and not a persuasive burden. (v) It is not necessary for the accused to come in the witness box to support his defence. 9. Therefore, the standard of proof for rebutting the presumption is that of preponderance of probabilities and not beyond reasonable doubt. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. It is not necessary for the accused to come in the witness box in support of his defence because Section 139 imposed an evidentiary burden and not a persuasive burden. With this settled position in law, let us proceed further. 10. The subject matter of the entire dispute is the MOU. Strangely, complainant is relying on the amounts payable based on the MOU but chooses not to produce the MOU. In the cross examination, complainant admits that he executed the said MOU dated 3rd September 1996 for selling 2000 shares, which were with him, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to PW-1 accused had handed over 12 cheques as mentioned in the MOU to Mr. Sarangdhar, the Chartered Accountant of the said company. PW-1 says that accused also handed over to him two cheques of ₹ 3 lakhs. PW-1 also admits that accused issued all the cheques on 3rd September 1996 as per the MOU and he has collected all the cheques from Mr. Sarangdhar, the Chartered Accountant. PW-1 admits in his cross examination that he did not inform the accused that he collected the cheques from Mr. Saranghdar. PW-1 also states in his cross examination that he does not know whether the shares were transferred in the name of accused or whether all shares still stand in his name or in the name of his wife or in the name of his son or in the name of his friend etc. PW-1 says he does not know whether the position of the shares is still as it is as it was prior to 3rd September 1996. The Trial Court after considering the MOU, has come to a conclusion that the time to make the payment had not arisen because as per Clause (2) of the MOU, it was mutually decided that complainant shall sign a letter of resignation from his Directorship of the said company, and also transfer forms in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Trial Court is a reasonable conclusion and I see no reason to interfere. 16. The Apex Court in Chandrappa (Supra) in paragraph 42 has laid down the general principles regarding powers of the Appellate Court while dealing with an appeal against an order of acquittal. Paragraph 42 reads as under : 42. From the above decisions, in our considered view, the following general principles regarding powers of appellate Court while dealing with an appeal against an order of acquittal emerge; (1) An appellate Court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded; (2) The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate Court on the evidence before it may reach its own conclusion, both on questions of fact and of law; (3) Various expressions, such as, 'substantial and compelling reasons', 'good and sufficient grounds', 'very strong circumstances', 'distorted conclusions', 'glaring mistakes', etc. are not intended to curtail extensive powers of an appellate Court in an appeal against acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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