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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 ..... 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 ₹ 86,00,000/- and the cheque is for an amount of ₹ 2,30,00,000/-. It is emerged in the evidence that they agreed to pay interest at the rate of 9% and in terms of memorandum to pay an amount of ₹ 36,00,000/- and also to issue the shares in respect of ₹ 50,00,000/-. It is the burden on the accused to show as to under what circumstances he has issued the cheque to the tune of ₹ 2,30,00,000/-, if there was no liability and the same is also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 3,00,00,000/- (₹ 3 crores) and out of the said fine amount, ₹ 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. The main contention of the learned counsel for the complainant is that issuance of cheque-Ex.P1 by the accused persons is not in dispute. That the accused persons have issued the said cheque jointly to discharge the debt payable to the complainant on behalf of Indo Global Spices Ltd. (for short 'IGSL') It is further contended that the appellate Court has committed an error holding that when the accused company was not at al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 transaction is in respect of M/s.IGSL Company and the very finding of the appellate Court is erroneous. 9. Per contra, the learned counsel appearing for the respondents would submit that it is the specific defence of the accused that the cheque was collected from the former employee of M/s.IGSL company and the same has not given for discharging liability. The other contention of the respondents' counsel is that the cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss- examination, PW1 has categorically admitted that the complainant company is a proprietary concern and that he has not sponsored ₹ 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 1 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 accused has agreed to discharge the debt and with that assurance cheque has been issued. PW1 was subjected to further cross- examination and in the cross-examination it is elicited that two suits are already filed prior to filing of the criminal complaint. He also admits that the contents of cheque Ex.P1 are got typed in his office. The document Ex.D1-complaint was also confronted to him wherein the complainan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 admits that he was one of the signatory for one of the cheques. He also admits that Ex.P.1(b) is his signature in Ex.P.1 cheque. The witness volunteers that the cheque was misused by the Company through the employee of M/s. IGSL. He also admits that the cheques which are issued by M/s. Organic Gold are verified by them. He also admits that he was the Managing Director for M/s. IGSL from 2002 to 2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 the defence. In the case on hand, in order to prove the defence of the accused that the cheque was collected through the former employee of M/s. IGSL, nothing is placed before the Court to substantiate the defence and the defence remains as defence only. In the cross-examination of P.W.1 also, nothing is elicited with regard to this aspect except suggesting the same to the P.W.1. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussed 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 handwriting. When such being the case, the contention of the accused cannot be accepted considering the factual aspects of the case. 21. With regard to liability is concerned, the learned counsel for the complainant brought to the notice of this Court the judgment of Madras High Court in the case of P.R.Shankar Rao (supra). Paragraph Nos.18 and 19 of the said judgment reads as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 this Court the judgment of the Apex Court in the case of ICDS Ltd. (supra). Paragraph Nos.9 to 12 of the judgment reads as follows: 9. As noticed hereinbefore, the principal reason for quashing of the proceeding as also the complaint by the High Court was by reason of the fact that Section 138 of the Act provides for issuance of a cheque to another person t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability, there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of the Act. It is further observed that any cheque and other liability are the two key expressions which stand as clarifying the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued 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 ₹ 86,00,000/- and the cheque is for an amount of ₹ 2,30,00,000/-. It is emerged in the evidence that they agreed to pay interest at the rate of 9% and in terms of memorandum to pay an amount of ₹ 36,00,000/- and also to issue the shares in respect of ₹ 50,00,000/-. 29. Having taken note of the admission in Ex.P.17(A)(1) to Ex.P.17(A)(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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