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TMI Blog2020 (11) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... was dishonoured with an endorsement 'funds insufficient' vide memo dated 03.08.2006. The complainant got issued a legal notice on 29.08.2006 both by RPAD and UCP and the same was served on the said accused persons but they have neither replied the notice nor complied the demand made in the legal notice. Hence, a complaint was filed and the accused were secured and denied the allegation and claimed trial. 5. The complainant, in order to prove his case, he himself examined as PW1 and got marked Exs.P1 to P18. The statements of accused persons were recorded under Section 313 of Cr.P.C. and they got themselves examined as DW1 and DW2 and got marked document Ex.D1. The trial Court, after considering both oral and documentary evidence, convicted the accused persons directing them to pay fine of Rs. 3,00,00,000/- (Rs. 3 crores) and out of the said fine amount, Rs. 2,99,95,000/- was awarded as compensation in favour of the complainant. Being aggrieved, the accused persons filed an appeal in Crl.Appeal.No.657/2009. The appellate Court has reversed the finding of the trial Court and acquitted the accused persons. Being aggrieved, the present appeal is filed by the complainant. 6. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rao vs. Joseph and Joseph Regis Kalingarayar, reported in 2001 Crl.L.J.2392 and brings to my notice paragraph No.18 of the judgment and submits that the above judgment aptly applicable to the case on hand. In the similar situation, the Madras High Court has held that once the cheque has been issued, the accused cannot contend that they are not liable to pay the cheque amount. He also relied upon the judgment of the Supreme Court in the case of ICDS Ltd. vs. Beena Shabeer and another reported in (2002)6 SCC 426 and brings to my notice paragraphs-9, 10 and 12 of the judgment and would submit that the Apex Court in detail has discussed with regard to liability and also the intent of the legislature. The words "any cheque" and "other liability" occurring in Section 138 of the NI Act are the two key expressions which stand as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the stature. 8. Referring the above two judgments, learned counsel canvassed legal arguments before this Court that the appellate Court has committed an error in coming to the conclusion that there was no liability on the part of the accused company and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord and thereafter this Court can consider whether the principles laid down in the judgments referred to by the learned counsel for the complainant is applicable to the case on hand. 12. Perused the evidence of PW1 wherein the complainant has reiterated the contents of the complaint vide affidavit dated 29.10.2007. The complainant got marked the documents Exs.P1 to 18 except 17(A)(1) to (A)(5). In the cross- examination, PW1 has categorically admitted that the complainant company is a proprietary concern and that he has not sponsored Rs. 2,30,00,000/- (Rupees Two Crores and thirty lakhs Only) to the accused company and further admits that he has not given any amount to the accused company and he admits that he was a Technical Director of M/s.IGSL company. It is his evidence that he was a Technical Director in M/s.IGSL company for 1½ years and he was the signing authority with accused No.2-Nelson in M/s.IGSL company. The complainant, after cross-examination, filed an additional affidavit dated 22.11.2007 and in the said affidavit has categorically stated that the cheque in question is a debt legally due and payable by the sister concern of the accused company and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the accused company and the complainant and also referred the two suits filed by the complainant. He was subjected to cross-examination. In the cross-examination, he has categorically admits that before M/s.IGSF company, he was a Director and it is true to suggest before joining M/s.IGSF, he was the Director of M/s.STFL Company. He also admits that the complainant was depositing funds with the M/s.STFL. M/s. IGSL started in the month of June 1997. He further admits that when they started the Company there were three Directors including him and other two Directors. Accused No.1 joined M/s. IGSL in the year 1998 as a Director. He also admits that there is one MOU between the complainant and M/s. IGSL, but he claims that there is only one MOU and denied other two MOUs. He admits that Ex.P.17(A)(1) is the MOU and in the context of complaint, the complainant has joined as Director. He also put his signature on Ex.P.17(A)(2) and written something on Ex.P.17(A)(3). He also admits that there is mention of liability of M/s. IGSL to the tune of Rs. 86,69,000/- on various accounts. He also admits that in terms of Ex.P.17(A)(4), ten cheques have been issued by M/s. IGSL and further adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f P.W.1, D.Ws.1 and 2 and considering the factual aspect, comes to a conclusion that Ex.P.1 - cheque is issued in discharge of the liability in respect of M/s. IGSL, wherein the accused Nos.1 and 2 were the Directors of the said Company. No doubt on perusal of Ex.P.1, the cheque is issued in the name of the accused Company and not in the name of M/s. IGSL. It has to be noted that when the cheque has been issued and signature has been admitted on Ex.P.1, in view of the judgment of the Apex Court in the case of RANGAPPA v. MOHAN reported in AIR 2010 SC 1898, the presumption has to be drawn. However, it is settled law that when the presumption is drawn, if the accused rebut the evidence of the complainant by either of two modes i.e., by stepping into the witness box and leading cogent evidence and another mode by way of destroying the evidence of complainant in his cross- examination, it is enough for rebutting the evidence of the complainant. 17. The Apex Court in the case of M/S. KUMAR EXPORTS v. M/S. SHARMA CARPETS reported in AIR 2009 SC 1518 has also laid down the same principles. It is settled law that the accused has to lead plausible evidence before the Court to substantiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in view of the recent judgment of the Apex Court and the handwriting of different persons and typing the same through the complainant on Ex.P.1 is immaterial once the cheque has been admitted and issued the cheque in favour of the complainant. 20. The other contention of the accused is that under Section 141 of the Act, there must be existence of Company liability. This Court had discussed above with regard to the issuance of cheque and also comes to the conclusion that the cheque is issued to discharge the liability in respect of M/s. IGSL. When such being the case, the contention of the accused cannot be accepted. The contention that, merely because the Directors of the accused Company have issued the cheque, the accused Company cannot be held liable, the said contention cannot be accepted for the reason that both accused Nos.1 and 2 have not denied the fact that they were the Directors of M/s. IGSL and there was existence of MOU between the complainant and the accused in terms of Ex.P.17(A) to Ex.P.17A(5). Though they denied that they executed only one MOU, the admission elicited from the mouth of D.W.2 is clear that they are the signatories and the documents are in their han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards the payee. Even in Section 139 of the Negotiable Instruments Act, by which a legal presumption is created, the Parliament has only fixed the presumption that the cheque was issued "for the discharge, in whole or in part, or any debt or other liability". This would mean that the debt or other liability includes the due from any other person. It is not necessary that the debt or liability should be due from the drawer himself. It can be issued for the discharge of any other man's debt or liability. Legally enforceable debt or liability would have a reference to the nature of the debt or liability and not the person against whom the debt or liability can be enforced." 22. Having read the principles laid down in the judgment referred supra, it is aptly applicable to the case on hand in view of the contentions raised by the accused. The cheque has been issued in respect of the liability of M/s. IGSL and D.Ws.1 and 2 have categorically admitted that they were also Directors of M/s. IGSL. When such being the case, both on the factual aspect and also legal aspects, the complainant has made out the case. 23. The learned counsel for the complainant also brought to the notice of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the factual context within the ambit of the provisions of the Statute. Any contra-interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of guarantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act. The judgments recorded in the order of the High Court do not have any relevance in the contextual facts and the same thus does not lend any assistance to the contentions raised by the respondents. 12. It is to be noted, however, that both the parties during the course of arguments have made elaborate submissions on Sections 126 and 128 of the Contract Act, but in our view, by reason of the specific language used by the legislature, question of consideration of the matter from the point of view of another Statute would not arise, neither would we like to express any view since that may have some effect as regards the merits." 24. The Apex Court in the judgment referred supra discussed in detail with regard to purview of Section 138 of the Act. The language of the statute depicts the intent of the law- makers to the effect that wherever there is a default on the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence placed on record and also the admissions elicited from the mouth of D.Ws.1 and 2, this Court has to draw the presumption in favour of the complainant under Section 139 of the Act. Accused Nos.1 and 2 have stepped into the witness box and adduced the evidence. The answers elicited from the mouth of D.Ws.1 and 2 is clear that they have issued the subject matter of cheque Ex.P.1 in discharge of the liability in respect of M/s. IGSL, wherein they were the Directors. The accused persons though set up the specific defence that the cheque was misused by collecting the same from the former employee of M/s. IGSL, the same has not been substantiated by placing any cogent evidence before the Court. The accused failed to place any plausible evidence before the Court to rebut the evidence of the complainant and hence the accused persons have failed in discharging their liability and discharging their burden rebutting evidence of the complainant. The Appellate Court has committed an error in coming to the occlusion that there was no legally recoverable debt and there was no transaction between the complainant and the accused and the admitted document is in respect of Rs. 86,00,000/- and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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