IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD WEDNESDAY THE NINETEENTH DAY OF JANUARY TWO THOUSAND AND ELEVEN PRESENT THE HONOURABLE SRI JUSTICE RAJA ELANGO CRIMINAL APPEAL No. 2 5 3 OF 2008 Between: Employees State Insurance Corporation, Hyderabad, Represented by its Legal Inspector Sri Abdul Gafoor … Appellant V/s. M/s. Yemmiganur Spinning Mills (P) Limited, Kurnool, Kurnool district & 2-Ors. … Respondents Counsel for the appellant : Smt. Pushpinder Kaur Sri PAVVS Sasrma Counsel for the respondent Nos.1 & 2 : Sri G. Vijaya Saradhi Counsel for the respondent No.3 : Addl.Public Prosecutor The Court made the following judgment :(judgment follows2nd page) THE HONOURABLE SRI JUSTICE RAJA ELANGO CRIMINAL APPEAL No. 2 5 3 OF 2008 JUDGMENT : Challenging the order of acquittal recorded by the learned I-Additional Chief Metropolitan Magistrate, Hyderabad in CC.No. 3217 of 2005, dated 12-09-2007, this criminal appeal is filed. 2. The brief facts of the case are as follows: The complainant is a statutory authority. The first respondent is a Company dealing in Spinning Mills (Private) Limited and used to pay contributions as per the Employees State Insurance Act, 1940. The first respondent herein in order to discharge his liability issued a cheque bearing No. 887629, dated 25-7-2000 and the same was deposited and returned for insufficient funds. The appellant herein complied the statutory provisions of Negotiable Instruments Act and filed a case against under section 138 of Negotiable Instruments Act. During the pendency of the above case, the first respondent herein produced demand draft in order to discharge the said liability and the same was recorded by the learned Magistrate in the judgment and PW-1 who is a authorised person of the appellant herein deposed before the court that he will not accept demand draft in view of the fact that it is a statutory liability of the accused herein. 3. The learned Magistrate recorded the evidence and also recorded the order of acquittal, which reads as hereunder: In the instant case, the testimony of PW-1 namely M.A. Rab goes to show that the complaint was filed by the Legal Inspector R. Ramanarayana and how he is substituted in this case. He is a public servant as per section 92 of Employees State Insurance Corporation Act within the meaning of Section 21 of IPC that the Insurance Inspector hereby authorised to present on behalf of the Corporation the Courts as per the resolution dated 14th August, 1958. The Accused No.1 M/s. Yemmiganur Spinning Mills Private Limited, Yemmiganur, Kurnool is a private limited company and it covers under ESI Act allotted with code No. 52.T.11/14/51-1972-11/98 and Accused No.2 is the Executive Director of A-1 firm and A-2 is the person in- charge to look after the day to day business affairs. That A-2 is liable to pay ESI contribution. In discharge of the said liability A-2 issued a cheque bearing No. 887629 dated 25-7- 2000 for Rs.1,00,000/- drawn on Andhra Bank, Yemmiganur at the Office of the Complainant at Adarshanagar, Hyderabad in favour of the Recovery Officer, ESI Corporation, Hyderabad, the said cheque when presented was dishonoured and returned by the accused bank. The Corporation came to know regarding the dishonour of cheque on 27-12-2000 with an endorsement “funds insufficient”. The Corporation got issued statutory notice on 04-1-2001 dispatched through registered post with acknowledgement due on 5-1-2001. The said notice was returned. A-1 or A-2 failed to pay the said cheque amount within the stipulated period. The attested true copy of the resolution dated 14-8-1958 is Ex.P-1, authorization letter given by Regional Director dated 21-3-2002 is EX.P2. Authorization is EX.P3 cheque bearing No. 887629 dated 25- 7-2000 is EX.P4. Cheque return memo dated 27-12-2000 is EX.P5. Office copy of statutory notice is EX.P6 is attested xerox copy of postal receipt dated 5-7-2001 is EX.P7 return of statutory notice is EX.P8 and another return of statutory notice is EX.P9. But when PW-1 was confronted by the Counsel for the accused he admitted that the accused is ready and willing to pay the cheque amount to the complainant Corporation by way of demand draft. And the demand draft is also filed in this case which is EX.D-1 bearing No. A4 7920 dated 6-9- 2007. Further PW-1 deposed that the complainant Corporation has no objection to receive the demand draft amount in this case. The Complainant Corporation is willing to receive the cheque amount directly but as per the Corporation Rules, PW-1 cannot withdraw the case directly from the Court on receipt of Ex.D-1. PW-1 further deposed that the Court has discretion to dismiss the complaint since the Complainant Corporation has no objection to receive the Ex.D-1 by encashing the said amount after disposal of the case. PW-1 is only an authorised person for the Complainant Corporation, he requested the Court to return the Ex.D-1 to the Complainant Corporation or its authorised person after disposal of the case. In view of the above clear admission on the part of PW-1, I am of the opinion that there is no need to go deep into the merits of the case because as per the evidence of PW-1 the accused has paid the cheque amount by way of DD Ex.D-1 and the Complainant Corporation has no objection to receive Ex.D-1 soon after the disposal of the case. Moreover, PW-1 requested the Court while giving evidence to return Ex.D-1 to the Complainant Corporation or to its authorised person. So in such circumstances, I am of the opinion that the complainant failed to establish the guilt of the accused under section 138 read with section 142 of Negotiable Instruments Act beyond all reasonable doubt, as such, the accused is entitled for acquittal. 4. Smt. Pushpinder Kaur, the learned counsel for the appellant contended that the learned Magistrate should not have recorded that the complainant failed to establish the case beyond all reasonable doubt. The fact remains that the accused accepting his liability, produced demand draft in order to discharge his liability in view of filing of the present complaint. This Court is of the view that the learned Magistrate should not have observed in the judgment as stated above. In view of the fact that PW-1 accepted the demand draft given by the respondent-accused herein in discharge of his liability which impliedly amounts to compounding the offence. Instead of recording the same, the learned Magistrate acquitted the accused observing that the complainant failed to establish the guilt of the accused under section 138 read with section 142 of Negotiable Instruments Act beyond all reasonable doubt. Hence, the said portion in the judgment is hereby set aside and the remaining portion of the judgment is not interfered with. 5. With the above observation, the Criminal Appeal is disposed of. ___________________________ JUSTICE RAJA ELANGO 19-01-2011 I s L THE HONOURABLE SRI JUSTICE RAJA ELANGO CRIMINAL APPEAL No. 2 5 3 OF 2008 Circulation No. 70 Date: 19-01-2011 Court Master: I s L