TaxTMI 
TaxTMI 
2021 (1) TMI 306
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....of the estimated cost subject to actual and accused No.2 would pay the remaining 20% simultaneously proportionate to the draw down. 4. In connection with this transaction pertaining to the MOU dated 10.03.2004, the accused had issued a cheque for Rs. 2.5 Crores dated 17.05.2007. When the said cheque was presented, it was dishonoured with an endorsement "funds insufficient". Hence legal notice was issued on 26.11.2007. Inspite of service of notice, the accused did not comply the demand and hence the complainant was forced to file complaint against the accused. 5. The complainant in order to substantiate the case examined one witness Sri R. Sundararajan as P.W.1 and Sri R. Kannan as P.W.2 and got marked the documents at Exs.P.1 to 10. The accused though not led any defense evidence, the Court got marked the documents at Exs.C.1 to 3. The Trial Court recorded the statement of the accused under Section 313 of Cr.P.C. and the accused did not choose to lead any evidence. The Trial Court after considering both oral and documentary evidence placed on record, acquitted the accused and hence the present appeal is filed before this Court. 6. The main contention of the complainant in this a....
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....f material, physical inspection of material, insurance cover, security arrangement of material and lease of yard duly transferred in the name of the complainant. 9. The learned counsel for the complainant would also submit that the procurement of Iron Ore was not exported and the stock was missing. The learned counsel would submit that in order to substantiate the case of the complainant, the complainant examined P.Ws.1 and 2. The evidence of P.W.1 would substantiate the case of the complainant. The Trial Judge has committed an error in shifting the burden on the complainant. Inspite several documents are produced and the accused has admitted the cheque, the Trial Judge ought to have drawn the presumption under Section 139 of the Negotiable Instruments Act ('N.I. Act' for short). The reasoning given by the Trial Court with regard to the existence of the liability is erroneous. The defense taken by the accused is that the cheques were given as security and not for any liability. In order to substantiate the said contention, the accused failed to step into the witness box and not led any evidence. The learned counsel would submit that in terms of the MOU, there was no terms ....
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....e of funds for advancing loan to the accused. The learned counsel referring paragraph No.18 would submit that failure of the accused to show reasonable probability of existence of no transaction has been made out. The accused not denied his signatures on cheques but attempting to suggest availability of his signatures and contending that the cheques are taken as security, cannot be accepted unless the accused makes out the preponderance of probabilities in his favour. 13. The learned counsel for the complainant also relied upon the judgment of the Apex Court in the case of BIR SINGH v. MUKESH KUMAR reported in (2019) 4 SCC 197. The learned counsel referring this judgment would submit that Section 139 of the N.I. Act raises presumption of law that cheque duly drawn was in discharge of debt or liability. However, the said presumption is rebuttable and the onus lies on drawer to rebut it by adducing cogent evidence to the contrary. The learned counsel referring this judgment would submit that the accused did not step into the witness box and not rebutted the presumption by adducing any cogent evidence. 14. The learned counsel also relied upon the judgment of the Apex Court in the ca....
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....dge has committed an error. 16. Per contra, the learned counsel appearing for the accused would submit that there is no dispute with regard to procurement of Iron Ore in terms of the MOU. It was agreed that the complainant has to fund 80% and the accused has to fund 20%. It is also agreed that after exporting the Iron Ore, the complainant has to deduct 80% interest cost of transportation, demurrages and if it exceeds, the accused to get the benefit of 20%. The learned counsel appearing for the accused brought to the notice of the Court the averments made in paragraph No.2 of the complaint and the complainant has not produced any documents except legal notice, but while adducing the additional evidence referred the document MOU. The learned counsel would submit that the audited account statement was not produced. The accused relied upon documents Exs.C.1 to 3. The complainant sold the goods. The complainant relies upon the evidence of P.W.1 claiming the transaction is for Rs. 11,50,57,488/- and in this regard also not produced the statement of accounts. But in MOU, it is mentioned that the transaction is to the tune of Rs. 14 Crores. When the statement of account has not been produ....
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....nt would contend that if the petitioner is yet able to show from the evidence on record that the presumption is rebutted then the complainant must be able to establish from the evidence on record itself that a case under Section 138 is clearly made out. If the complaint is vague and bereft of any details regarding discharge, liability of repayment of the amounts, there cannot be any conviction in the criminal proceedings. The complaint is also silent with regard to what was the rate of interest, what was the extent of goods which were supplied and adjusted against the payment. When all these details are conspicuously absent, the accused cannot be convicted. 20. The learned counsel also relied upon the judgment of the Apex Court in the case of NATIONAL SMALL INDUSTRIES CORPORATION LTD. v. STATE (NCT OF DELHI) AND OTHERS reported in MANU/SC/4845/2008 and brought to the notice of this Court paragraph Nos.12 and 13 with regard to relying upon the evidence of the employees of the Government Company working in Public Limited Companies. 21. The learned counsel also relied upon the judgment of the Apex Court in the case of BASANT SINGH v. JANKI SINGH AND OTHERS reported in MANU/SC/0284/1....
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....the Evidence Act. The party making the admission may give evidence to rebut this presumption, but unless and until that is satisfactorily done, the fact admitted must be taken to be established. The learned counsel referring paragraph No.83 of the judgment would submit that the admissions being substantive piece of evidence, there admissibility is not depending on the appearance or non-appearance of the party as witness. 24. The learned counsel relied on the judgment of the Apex Court in the case of BISHWANATH PRASAD AND OTHERS v. DWARKA PRASAD AND OTHERS reported in MANU/SC/0006/1973. Referring this judgment the learned counsel brought to the notice of this Court the observation made by the Apex Court with regard to Section 21 and 145 of the Evidence Act with regard to cardinal distinction between party who is author of prior statement and witness who is examined and sought to be discredited by use of his prior statement. Admission by party in former case is substantive evidence if fulfills requirements of Section 21. 25. The learned counsel relied upon the judgment of Andhra Pradesh High Court in the case of SWASTIK COATERS PVT. LTD., v. DEEPAK BROTHERS AND OTHERS reported in M....
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....trary to those admissions. 28. The learned counsel for the accused relied upon the judgment of Kerala High Court in the case of JOSEPH SARTHO v. G. GOPINATHAN AND ANOTHER reported in MANU/KE/0342/2008 and brought to the notice of this Court paragraph Nos.13 and 16. The learned counsel referring this judgment would contend that it is one of the fundamental principles of law that penal law should not be vague. A law fails to meet the requirements of the due process clause if it so vague and standard less that it leaves the public uncertain as to the conduct it prohibits or leaves judges and jurors free to decide. The observation made in the judgments that for the bouncing of a cheque, which did not represent the amount or part of the amount due to the appellant, the accused cannot be made liable. 29. The learned counsel relied upon the judgment of the Apex Court in the case of RAHUL BUILDERS v. ARIHANT FERTILIZERS AND CHEMICAL AND ANOTHER reported in MANU/SC/4139/2007 and brought to the notice of this Court paragraph No.8 of the judgment with regard to giving of the notice within a stipulated time and not giving any reply by the accused. 30. The learned counsel in support of his c....
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....e would be paid, it was returned on the ground of 'Insufficient Funds'. Exchange of notice also narrated in the affidavit. The documents-Exs.P8 to P10 are marked through this witness i.e., Proforma Sale Invoice, Letter addressed to the Complainant and the Invoice sent to the accused, respectively. He was subjected to cross-examination. In the cross-examination, it is elicited that he is giving evidence on his personal knowledge and based on the documents. His evidence was that the transaction was taken place between 2004 and 2006. Prior to that he was working at Chennai and he was seeing the reports which he was getting from Bengaluru. Hence, he has the personal knowledge. He says that he does not know about filing of three cases against this accused, but he admits that one K.K.Mathur working at Delhi. But not aware of filing of three cases at Delhi. However, he admits that Sundararajan, who had filed an affidavit earlier and examined as P.W.1 in this case and K.K.Mathur, both are still working in the complainant-Company. He admits that two invoices referred in paragraph No.2 of the complaint are not pressed and in his affidavit, there is an averment in respect of paragraph....
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....cheque. There is no averment with regard to 6000 MTs, but it is contrary to the earlier affidavit filed by Sundararajan. Though the evidence of P.W.1-Sundararajan was discarded since he was not tendered for prosecution. Exs.P1 to P7, which are with regard to authorization and subject matter of the cheque and the memo issued by the Bank, legal notice and postal acknowledgement are the documents marked on behalf of the complainant. It is important to note that based on the complaint, it is the case of the complainant that the accused had raised two invoices for supply of 6000 MTs for shipment of the business transaction and these two invoices are not in existence as admitted by P.W.1 in the cross-examination. However, the complainant relied upon the documents-Exs.P8 to P10. But in the cross-examination, it is categorically admitted that Exs.P8 to P10 bears the date prior to the subject matter of the cheque and also there is contrary evidence as against the contents of the complaint and in the complaint, it is in respect of 6000 MTs. and in the affidavit it is mentioned as 25000 MTs. It is also categorically admitted that Ex.P10 is only a Proforma Sale Invoice. It is also important to....
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....arajan, who has been examined as P.W.1 has deposed regarding the transaction between the complainant and the accused. He categorically admits that the documents-Exs.C1 to C3, which are in respect of the account extract and that the accused had paid more than Rs. 30 Crores to the complainant. The very same documents were marked as Ex.P6 in other complaints and the same has been suppressed by the complainant before this Court. Though the accused has not been examined before the Court, effectively rebutted the evidence of the complainant and the answers elicited from the mouth of P.W.1, it is clear that the contents of the complaint has not been set out in the affidavit filed by P.W.2. The affidavit filed by PWs.1 and 2 are contrary to each other having supplied the iron ore. One claims that it was 6000 MTs iron ore and subsequent witness-P.W.2 claims that, it was 25000 MTs iron ore. 38. I have already pointed out that in the affidavit of P.W.2 averments are also contrary to the complaint averments. The same is as against the pleadings and also in the original complaint and affidavit of Sundararajan, it is claimed that the cheques are issued in respect of two invoices, but subsequent....