2017 (10) TMI 618 - HC - Indian Laws

Offence under NI Act - eligibility of judgment of the DRAT - Held that - The plea taken by the petitioner with respect to the testimony of the Notary Public has been discussed at length by the DRAT and findings were given after appreciating the evidence led by the parties before the DRT. We are inclined to concur with the said findings. The Notary Public is no doubt, an independent witness acting under the authority of law and discharging the duties assigned to him by virtue of the N.I. Act. In the absence of any mala fides or bias, being proved against him, his testimony has more credence over any other witness produced before the Tribunal. We therefore find no illegality on the part of the DRT or the DRAT in relying on the evidence of Shri S.L. Tyagi, the Notary Public whose testimony is also supported by the documents which he had maintained during the course of his work and the attending circumstances. The next argument advanced by the learned counsel for the petitioner that the averments in the OA are vague and do not disclose details like the date of presentation of the bills of exchange, the date of discount, the name of the person in the OBC who had returned the bills of exchange unpaid, etc., doesn t have any force. We find no infirmity in the said findings returned by the DRAT for the reason that the bills of exchange were drawn by the respondent No.3 in favour of the petitioner and were accepted by the petitioner and therefore, the petitioner is the acceptor and the drawee under Section 7 of N.I. Act. The argument of the learned counsel for the petitioner that since the accounts between petitioner and respondents No.3 stood settled, no claim can be raised against the petitioner, is of no consequence. It is noteworthy that the OA was filed in the year 2014 and the DRT-II had passed an order on 06.01.2014. The petitioner alleges that it had settled its accounts with the respondent No.3 between 09.11.1998 to 01.05.1999. Despite the said version, no such plea was taken by the petitioner in its written statement filed before the DRT-II, in response to the OA of the contesting respondents. Even otherwise, the alleged settlement with the respondent No.3 was much after the date when the bills of exchange were presented to the petitioner by Shri S.K. Tyagi, Notary Public on 23.10.1998 and notice of protest was given. It is apparent from the record that the petitioner had been taking contrary stands before the DRT-II and the DRAT and this fact has been noted in the impugned order The argument of the petitioner that the judgment of the DRAT is based on surmises and conjectures is devoid of substance. The DRAT has noted the pleas of the petitioner, as taken before the DRT-II in its written statement and juxtaposed them with the pleas taken in the appeal. The view of the DRAT is therefore not based on surmises and conjectures, but is simply a reproduction of the different and shifting stands taken by the petitioner before different fora. In all opinion that the impugned judgment is based on cogent evidence brought on record. Learned counsel for the petitioner has failed to point out any illegality, infirmity or perversity in the impugned judgment for interference.

Issues Involved:
1. Challenge to the order of the DRAT dated 24.08.2015.
2. Presentation and acceptance of bills of exchange.
3. Allegations of forgery and fabrication of bills.
4. Jurisdiction of the High Court under Article 226 and 227.
5. Credibility of the Notary Public's testimony.
6. Adequacy of pleadings in the original appeal.
7. Privity of contract and liability under the Negotiable Instruments Act.

Detailed Analysis:

1. Challenge to the order of the DRAT dated 24.08.2015:
The petitioner challenged the DRAT's order on grounds of miscarriage of justice and violation of natural justice principles. The petitioner argued that there was insufficient material to prove the acceptance of the bills of exchange and the subsequent endorsements. The petitioner also claimed that the bills were never presented for payment to OBC or to the petitioner, and that the bills were discharged upon settlement with respondent No.3.

2. Presentation and acceptance of bills of exchange:
The contesting respondents presented four bills of exchange to OBC, which were returned unpaid. The bills were protested by S.K. Tyagi, Notary Public, but the petitioner did not make any payment. The respondents sought directions for the petitioner to pay ?53,17,505 with interest at 18% per annum. The DRT-II directed the petitioner to make the payment, and the DRAT dismissed the appeal, leading to the present petition.

3. Allegations of forgery and fabrication of bills:
The petitioner alleged that the bills of exchange were forged and fabricated by the respondent bank, and that the bank's name was inserted without authorization. The petitioner argued that the evidence on record was insufficient to prove the presentation and rejection of the bills by OBC, and that the protest by the Notary Public did not comply with the provisions of the Negotiable Instruments Act.

4. Jurisdiction of the High Court under Article 226 and 227:
The jurisdiction of the High Court under Article 226 and 227 is limited and supervisory, not appellate. The court cannot re-appreciate evidence adduced before the Tribunal. The Supreme Court has held that the High Court should not reverse concurrent findings of fact by lower authorities unless there is no evidence to support the findings or the decision is unreasonable.

5. Credibility of the Notary Public's testimony:
The testimony of S.K. Tyagi, Notary Public, was given credence by the DRT-II and DRAT as he was considered an independent witness. The petitioner challenged this reliance, but the DRAT found that the Notary Public's testimony was supported by documentary evidence and other circumstances. The court concurred with the DRAT's findings, emphasizing the Notary Public's role under the Negotiable Instruments Act.

6. Adequacy of pleadings in the original appeal:
The petitioner contended that the pleadings in the OA were vague and lacked material particulars. The DRAT noted that all necessary facts were pleaded by the respondents, including the presentation and protest of the bills of exchange. The court found no force in the petitioner's argument regarding the vagueness of the pleadings.

7. Privity of contract and liability under the Negotiable Instruments Act:
The petitioner argued that there was no privity of contract with respondent No.1/Bank and that the bills of exchange were not enforceable. The DRAT held that the petitioner, as the acceptor and drawee of the bills, was liable under Section 7 of the Negotiable Instruments Act. The court found no infirmity in the DRAT's findings and rejected the petitioner's argument.

Conclusion:
The court dismissed the petition, finding no illegality, infirmity, or perversity in the DRAT's judgment. The appeal was dismissed along with the pending application, with no order as to costs. The court upheld the concurrent findings of fact by the DRT-II and DRAT, emphasizing the limited scope of its jurisdiction under Article 226 and 227.

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