Research › Search › Judgment

Orissa High Court · body

2014 DIGILAW 388 (ORI)

I. B. Enterprises v. Konark Supply Agency

2014-07-03

I.MAHANTY

body2014
Judgment I. Mahanty, J. This revision under Section 401 of the Cr. P.C. has come to be filed by the petitioner seeking to challenge the judgment dated 05.04.2008 passed by the learned Additional Sessions Judge, Rourkela in Criminal Appeal No.15 of 2006 affirming the conviction and sentence passed by the learned S.D.J.M., Panposh, Rourkela in 1CC No.58 of 2004 directing the petitioner to undergo S.I. for a period of two years and to pay compensation of Rs.4,20,000/-to the complainant and in default of compensation amount, to undergo S.I. for a further period of three months for the offence under Section 138 of the N.I. Act. 2. It is asserted on behalf of the petitioner that the court below failed to appreciate that the cheque that had been issued by the petitioner had been given by way of advance for supply of materials and without supplying the materials, the same was utilize by the opposite party-complainant with an oblique motive and the complainant was, therefore, not entitled to encash the cheque in question nor was the petitioner liable to the opposite party-complainant in any manner. The complainant and opposite party entered appearance through counsel and submitted that the complainant-opposite party was the dealer of L & T cement and carrying on business in Rourkela for supply of cement. The petitioner purchased cement on credit basis on different dates, which was supplied on good faith and the complainant made repeated demands for clearance of the outstanding. The petitioner avoided discharging his liability on various pretexts and ultimately on 23.02.2004 issued a cheque for Rs.4,00,000/-in favour of the opposite party-complainant. When the cheque was produced for encashment, the same was dis-honored due to “insufficiency of fund”. Thereafter, necessary demand notice was issued to the petitioner through advocate on 28.02.2004 which was duly received by him on 01.03.2004 and in spite of receipt of the notice since the petitioner did not comply nor reply to the notice, the opposite party-complainant initiated 1CC case in the court of learned S.D.J.M., Panposh. In course of the trial, the complainant examined himself and two witnesses, whereas the petitioner-accused only examined himself as defence witness. In course of the trial, the complainant examined himself and two witnesses, whereas the petitioner-accused only examined himself as defence witness. It is further submitted on behalf of the complainant that the accused-petitioner in his cross-examination at para-5 admits to have done business with the complainant for last 15 to 20 years and he admits not having issued any notice to the banker to stop payment of the cheque. It is, therefore, submitted that on perusal of the evidence of the accused-petitioner as well as the complainant, it would become crystal clear that out of good faith the sale/transaction have been affected between the parties. 3. Learned counsel for the petitioner placed reliance on a judgment of the Hon’ble Supreme Court in the case of P. Venugopal V. Madan P. Sarathi, (2009) 42 O.C.R. (SC) 217, in which the Hon’ble Supreme Court held that the initial burden of proving that the cheque was issued for discharge of any debt or liability is on the complainant and the presumption raised under Section 139 of the Act in favour of the holder of the cheque “does not extend to the extent that the cheque was issued for the discharge of any debt or liability which is required to be proved and it is essentially a question of fact”. For better appreciation, para-19 of the aforesaid judgment is quoted hereunder. “Indisputably, in view of the decisions of this Court in Krushna Janardhan Bhat (supra), the initial burden was on the complainant. The presumption raised in favour of the holder of the cheque must be kept confined to the matters covered thereby. The presumption raised does not extend to the extent that the cheque was issued for the discharge of any debt or liability which is required to be proved by the complainant. In a case of this nature, however, it is essentially a question of fact.” 4. It is asserted on behalf of the petitioner that the stand of the accused-petitioner taken in defence was that of denial of any existing date and further that the said amount had been offered by way of an advance and that no supply had been effected by the complainant. It is asserted on behalf of the petitioner that the stand of the accused-petitioner taken in defence was that of denial of any existing date and further that the said amount had been offered by way of an advance and that no supply had been effected by the complainant. Learned counsel for the petitioner placed reliance on a judgment of the Hon’ble Supreme Court in the case of M.S. Narayana Menon @ Mani V. State of Kerala & another, (2006) 35 O.C.R. (SC) 43, in which the Hon’ble Supreme Court reaffirmed its views expressed in an earlier judgment in the case of Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal [ (1999) 3 SCC 35 ] in para-31, which is quoted hereunder: “Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The Court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt.” In the aforesaid judgment, it has been categorically noted that a defendant can prove the non-existence of a consideration by raising a probable defence and in such a case if the defendant discharges the initial onus of proof by showing that the existence of consideration was improbable or doubtful, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove, would disentitle him to the grant of relief on the basis of the negotiable instrument. In the case at hand, from the evidence of the complainant, it appears that in order to establish the offence under Section 138 of the N.I. Act against the accused-petitioner, while it is claimed that the material was duly supplied to the accused by issuing bills in favour of the accused (all those bills were given to his conducting advocate to be filed in the court of law, if required). The aforesaid fact by itself would indicate that neither the bills nor books of accounts were ever produced before the trial court and the court proceeded on a presumption under Section 118 of the Act which was not capable of replacing evidence since the petitioner (accused) had discharged his initial onus by raising his defence of advance payment and non-supply and thereby discharging the initial onus of proof regarding the existence of consideration being improbable or doubtful and consequently the onus stood shifted to the plaintiff to prove it as a matter of fact. In the case at hand, neither the books of accounts nor the bills were ever produced in course of the trial and both the trial court as well as appellate court proceeded merely on the basis of a presumption, which in the fact situation of the present case was not available to be relied upon. 5. In the case at hand, neither the books of accounts nor the bills were ever produced in course of the trial and both the trial court as well as appellate court proceeded merely on the basis of a presumption, which in the fact situation of the present case was not available to be relied upon. 5. As a consequence of the aforesaid finding, this revision is allowed and the judgment dated 05.04.2008 passed by the learned Additional Sessions Judge, Rourkela in Criminal Appeal No.15 of 2006 and the judgment dated 24.02.2006 passed by the learned S.D.J.M., Panposh, Rourkela in 1CC Case No.58 of 2004 are hereby set aside but, in the peculiar circumstances of the case, the matter stands remitted back to the trial court with a further direction to afford a further opportunity to the complainant to produce documentary evidence, if any, and the accused also be afforded an opportunity of cross-examination and to proceed afresh strictly in accordance with law and the citation of the Hon’ble Supreme Court as noted hereinabove.