1 IN THE HIGH COURT OF BOMBAY AT GOA CRIMINAL APPEAL NO.62 OF 2009 M/s Matoshri Cashew Nuts represented by its proprietor, Shri Dilip U. Gawde, Major of age, r/o Amaiwada, Pernem, Goa. .. Appellant Versus Shri Mohammad Abdul Kadar, Proprietor of Fatima Tours and Travels, major of age, c/o Milk Parlour Stall, Platform No.1, Margao Konkan Railway Station, Margao, Goa. .. Respondent Mr. Valmiki Menezes, Advocate for the appellant. Mr. Ryan Menezes, Advocate for the respondent. CORAM :- U. D. SALVI, J. DATE OF RESERVING THE JUDGMENT :- 27 th November,2009. DATE OF PRONOUNCING THE JUDGMENT:-7 th /14 th January,2010. JUDGMENT : 1. This appeal has been preferred against the judgment and order of the acquittal of the respondent / accused of the offence punishable under Section 138 of the 2 N.I.Act, 1881 in OA case No.625/2007/F by order passed by J.M.F.C. Mapusa, at Mapusa, Goa on 29.01.2009. 2. Dishonour of the cheque bearing No.648356 dated 10.10.2007 drawn on South Indian Bank Ltd. Margao Branch for a sum of Rs.41,000/- by the respondent / accused in favour of the appellant/ complainant M/s. Matoshri Cashew nuts on account of insufficiency of the funds, and subsequent failure of the respondent/ accused to make good the payment of the cheque amount within stipulated period of time in response to the notice of demand dated 22.10.2007 addressed on behalf of the appellant/ complainant resulted in lodging of the complaint – aforesaid case under Section 138 of N.I. Act, 1881 in the Court of J.M.F.C., Mapusa. The complaint indicated that the said cheque was issued towards the part payment of the price of the cashew nuts worth Rs.93,640/- purchased by the respondent/ accused from the appellant/ complainant. 3. The learned Trial Court acquitted the respondent/ accused on the ground that the appellant / complainant failed to prove that the cheque was issued towards legally enforceable debt. Controversy in the present appeal is also 3 focused on the validity of the finding of the Trial Court on this point. 4. Learned Advocate Mr. V. Menezes for the appellant submitted that to prove the point that the alleged cheque was issued towards legally enforceable debt, the appellant/ complainant proprietor of M/s.Matoshri Cashew nuts examined himself and produced in evidence cheque dated 10.10.2007 Exh.25 for an amount of Rs.41,000/-, Notice of demand dated 22.10.2007 Exh.27 along with A.D. Card, two bills dated 11.11.2006 and 29.11.2006 towards the supply of cashew nuts worth Rs.93,640/- Exh.28 collectively, 5 cash credit memos Exh.31 in respect of supply of cashew nuts between 8.4.2006 and 8.6.2005. Affidavit in examination-in-chief Exh.21 reveals an averment that the respondent accused had purchased cashew nuts worth Rs.93,640/- from him and issued the cheque in question for a sum of Rs.41,000/- towards part payment of the said cashew nuts purchased from him; and the said cheque was issued and delivered to him in the discharge of the legally enforceable debt. 5. In the cross-examination, the appellant / 4 complainant revealed that he used to obtain post dated cheques from the accused and thereafter supply the goods; and the accused had written the amount in figures and in words on the said cheque in his presence and the accused had continuous business with him; and he used to adjust the bill amount as per the finances available to the accused and the cheque Exh.25 was given to him by the accused after obtaining the bills Exh.25 on 29.11.2006. In response to the query as to why a cheque amounting to Rs.93,640/- - the total bill amount was not taken from the accused, the appellant answered that the specific amount was not obtained as the accused was adjusting the bill amount according to his financial position and he holds dishonoured cheques issued by the accused for the balance amounts with him. According to the appellant, he had conducted business transactions amounting to Rs.20 Lacs with the accused out of which Rs.17 Lacs were paid by the accused and the balance amount of Rs.3 Lacs includes the cheque amount, the amount of Rs.1,30,000/- payable under promissory note, cheque amount of Rs.70,000/- and one more cheque. He further deposed that an amount of Rs.52,640/- i.e. Rs.93,640/- minus Rs.41,000/-, was due and payable to him by the accused. In course of his cross-examination, 5 cash credit memos Exh.31 5 namely memos/ bills dated 8.4.2006 for an amount of Rs.42,800/-, dated 20.03.2006 for an amount of Rs.21,200/-, dated 17.4.2006 for an amount of Rs.27,000/-, dated 11.5.2006 for an amount of Rs.26,900/- and dated 8.5.2005 for an amount of Rs.47,806/- were produced on record. The appellant further deposed in his cross-examination that the accused had made payment of Rs.55,000/- in 11 instalments of Rs.5,000/- each from 28.04.2007 to 23.07.2007 and no payments were received from the accused after 29.11.2006. 6. The learned Trial Court considered the submission made on behalf of the respondent accused that as the appellant had not demanded the payment of Rs.52,640/- due to him in writing from the accused at any point of time, the payment of Rs.55,000/- admittedly made by the accused to the complainant was in respect of the cheque amount of Rs.41,000/- and, therefore, no amount was due to the complainant by the accused. The learned Trial Court, however, did not agree with this contention for the reason that the cheque Exh.25 dated 10.10.2007 was issued by the accused on 29.11.2006, and payment of Rs.55,000/- was made by the accused between 28.4.2007 and 23.07.2007 and there was no business transaction after 29.11.2006. The 6 learned Trial Court further held that the payment of Rs.55,000/- can be considered towards Rs.93,640/- and not towards Rs.41,000/- and, therefore, in absence of any specific statement of the complainant as towards which debt the said amount was adjusted, it can be presumed that the same was adjusted towards Rs.93,640/- and as such on deduction of Rs.55,000/- from Rs.93,640/- the balance debt was Rs.38,640/- and not Rs.41,000/-. The learned Trial Court further observed that as the complainant had admitted that he used to take post dated cheques from the accused before supplying him any goods, therefore, there existed possibility that the cheque Exh.25 was taken as post dated cheque from the accused and though the complainant has stated that an amount of Rs.52,640/- was due, the complainant did not succeed in proving the same. It is on this logic the learned Trial Court reached a conclusion that the complainant had clearly failed to prove that as on the date of the cheque, the accused owed him a legally enforceable debt of Rs.41,000/- 7. Rationality of this very logic employed by the learned Trial Court has been questioned by the learned Advocate V.Menezes for the appellant. He submitted that the reasonableness of the view taken by the Trial Court must be 7 based on the total evidence adduced through the testimonies of the witnesses examined in the Trial Court. In the instant case, he submitted that the learned Trial Court completely overlooked the facts revealed in the evidence of the complainant that the accused had continuous business with the complainant leaving Rs. 3 Lacs as outstanding dues and the complainant had produced in the evidence five cash credit memos Exh.31 collectively. He further pointed out from the evidence that there was nothing in the cross- examination of the complainant to disturb these material facts nor did the accused examine himself or produce anything countering the said facts. 8. Relying on the judgments reported in (2002)4 SCC 85 Bhagwan Singh and Others Versus State of M.P. and (2002)7 SCC 450 Dely and another Versus State of U.P., learned Advocate Valmiki Menezes for the appellant/ complainant submitted that the High Court possesses full powers to review the evidence in order to ascertain the reasonableness in appreciation of the evidence done by the Trial Court; and in case it is found that the Trial Court has completely ignored the basic principles of criminal law and taken into account extraneous considerations, the reversal of 8 the acquittal order passed by the Trial Court is justified. Keeping this in mind, he argued, the error can be seen in the approach of the learned Trial Court to embark on calculations keeping aside the presumption in law about the issuance of the cheque for discharge of a debt or liability under Sections 118, 139 and 138 of N.I. Act, 1881 and the material evidence regarding obtaining of the cheque Exh.25 with the amount in figures and words in the handwriting of the respondent / accused in course of continuous running business amounting to Rs.20 Lacs. He further argued that the learned Trial Court has completely ignored the fact that the respondent/ accused had not produced anything to suggest that any payment was made towards dues under the cash credit memos Exh.31 collectively in respect of the supply of the cashew nuts worth Rs.1,65,706/-. Considering the amount due under the cash credit memos Exh.31, he argued, it could be gathered that there existed legally enforceable debt towards discharge of which the cheque Exh.25 was issued. Failure of the respondent/ accused to rebut the presumption about the existence of the legally enforceable debt as envisaged under Section 139 of the said Act, he argued, is very much evident with the production of the said bills Exh.31. 9 9. Relying on the judgments reported in 2007(1) Mh.L.J. 210 - Purushottam Maniklal Gandhi Versus Manohar Deshmukh, 2008 All M.R. (Cri.)2230 - Balaji Agencies Pvt. Ltd. Versus Vilas Bagi Package Ltd. and another and unreported judgment in Criminal Revision Application - Mrs. Sheela @ Sudam Manjunath Vernekar Versus Rayba S.Dessai and another, he argued that the proposition that the Appellate Court should be slow in disturbing the finding of a fact is not valid in cases under Section 138 of N.I. Act wherein apart from the factual aspects there are statutory presumptions as well. While commenting on the evidence he added that it is equally open for the holder of the cheque to fill up blanks and specify the amounts therein as the act of filling up of the blanks does not amount to any alteration in the cheque, particularly when the cheque was not initially issued for any different specified sum, which was changed; and when a drawer of a cheque delivered signed cheque, he gives an authority to the holder to put a date of its choice. He further submitted that complaint under Section 138 of the N.I. Act is maintainable in a case where the cheque was given as a security for payment of debts. Citing judgment reported 2002 Cri.L.J. 4803 - P. V. Kochieappa Versus P. N. 10 Suprasudan, he further argued that there can be a complaint under Section 138 of N. I. Act in respect of a cheque for amount larger than the liability. 10. Distinguishing the judgment of the Hon'ble Kerala High Court in P.V. Kochieappa's case from the facts in the present case, the learned Advocate Ryan Menezes for the respondent accused submitted that the existence of the interest due on the date was taken into account in issuing the cheque in the said case and as such the facts in the said case were grossly different than the facts in the present case. He further argued that the nexus between the cheque in question and the liability of the respondent accused was not established by the appellant complainant in as much as the the case pleaded in the complaint differ materially from the case tried to be made out in the evidence of the complainant. In his view, the expression 'other liability' in Section 138 of the said Act was construed by the Hon'ble Apex Court in ICDS Ltd's case (supra) only with reference to the liability of the guarantor as distinguished from the liability tried to be fastened on the head of the respondent accused by the appellant complainant in the present case. In his view, the learned Trial Court had rightly acquitted the respondent 11 accused. 11. Learned Advocate R.Menezes with reference to the judgment of the Apex Court reported in 2007 HTPL(LE- Crim) 28218- Chandrappa & Ors. Versus State of Karnataka submitted that presumption of innocence available to the accused is further enforced in case of acquittal of the accused and, therefore, the finding of the Trial Court based on reasonable and probable view of the evidence should not be disturbed in the appeal. Quoting from the another judgment of the Apex Court reported in 2008 STPL (LE-Crim) 29108 SC- Krishna Janardhan Bhat Versus Dattatray G. Hegde, he submitted that the existence of a legally enforceable debt is not a matter of presumption under Section 139 as Section 139 of the N.I.Act merely raises a presumption in favour of the holder of the cheque that the same has been issued for discharge of any debt or other liability and it is not necessary for the accused to step into the witness box for the purpose of rebuttal of such presumption and the accused may discharge this burden on the basis of material already brought on record. He further relied on the judgment of this Bench reported in 2006(2) Bombay Cases Reporter (Cri.) 830 Laxmikant D. Naik 12 Karmali Versus Santosh V. Naik to advocate the proposition that when the cheque is for an amount more than due by the accused, Section 138 of the N.I. Act is not attracted. In this connection, he argued that the complainant had come to the Court with a specific case that the cheque in question was issued towards part payment of the amount of Rs.93,640/- being the price of the cashew nuts purchased and the complainant having failed to prove this case even with the aid of the presumptions in his favour, the complainant's case deserves to be dismissed. To further his submissions, he placed reliance on the unreported judgment dated 6.5.2009 of this Bench in Criminal Appeal No.33/2009 - Damodar R. Halarnekar Versus Devdas N. Narvekar 12. In light of the judgment of the Apex Court in the case of Chandrappa and others (supra),it is necessary to examine the reasonableness of the view taken by the Trial Court of the evidence adduced in the present case. It is correct that the complainant approached the Trial Court with a specific case that the accused had purchased from him cashew nuts worth Rs.93,640/- and the cheque in question was issued by him towards part payment of the price of the said cashew nuts purchased from him. While maintaining 13 this case in his evidence,he further qualified that the accused had continuous business with him and used to adjust the bill amounts as per the financial convenience of the accused. He also produced in the evidence cash credit memos Exh.31 in response to the query regarding the amount due and payable by the accused to him after March 2006 in course of such business. 13. The complainant was not cross-examined on this facet of the case, particularly in relation to what has been stated in the complaint. Apart from this, the complainant had averred in his evidence that the cheque in question was issued by the accused on 29.11.2006 after he had written the amount in figures and in words on the said cheque in his presence. Yet the evidence of the complainant reveals that the complainant did make payment of Rs.55,000/- in 11 instalments of Rs.5,000/- each from 20/04/2007 till 23/07/2007 knowing fully well that the complainant was holding cheque of Rs.41,000/- drawn by him. It is also in the evidence of the complainant that he had incorporated the date in the cheque after confirming the same from the accused. All this goes to show that the accused knew about his dues then outstanding in course of the running business 14 with the complainant i.e. the legally enforceable debt, which he owed to the complainant at the material time. If such dues were not existing the accused would not have made payment of Rs.55,000/-. The existence of legally enforceable debt outstanding in the name of the accused at the material time, therefore, becomes evident from the testimony of the complainant, particularly cash credit memos Exh.31,and is not a matter, which arises as a result of presumption under Section 139 of the N.I. Act, 1881. 14. The accused could have unsettled this fact of existence of legally recoverable debt either by examining himself or producing in the evidence the receipts of the payment made towards liquidation of such debt. The accused did not do so as he very well knew that such debt existed at the material time. Logic employed by the learned Trial Court in arriving at the findings in favour of the accused is, therefore, neither reasonable nor probable. 15. Factual basis for proving the existence of legally recoverable dues was not proved in the cases cited on behalf of the respondent/ accused. The judgments in the said cases are, therefore, of no avail to the respondent / accused. 15 16. In view of the aforesaid discussion, the acquittal of the respondent / accused in the present case needs to be reversed. The impugned judgment and order of acquittal passed by the learned J.M.F.C.,Mapusa, Goa is set aside. The respondent / accused is convicted of the offence punishable under Section 138 of N. I. Act,1881. Dt.7/01/2010. U. D. SALVI, J. 17. Parties have been heard on the point of sentence. The respondent/ accused submits that the cheque in question was given in course of running business and there is evidence of payments being made by him to the appellant/ complainant. Considering these facts, he submitted that leniency be shown and he be sentenced only with fine. Learned Advocate V. Menezes for the appellant submitted that essentially the prosecution is launched for getting the money due under the dishonoured cheque, and therefore, the amount of fine on which the accused would be released ought to be proportionate to loss suffered by the appellant/ complainant from the time the cheque was dishonoured till this date. 16 18. Offences under N.I. Act, 1881 are compoundable. This signifies that there is freedom for parties to remove blame of punishment under this Act on their terms. Considering the facts and circumstances in the present case, the following order is passed : i. The respondent/ accused is sentenced to a fine of Rs.60,000/- and in default to undergo S.I. for a period of three months. ii. Fine to be deposited in this Court within four weeks. iii. The amount of Rs.50,000/- from the amount deposited towards fine shall be paid to the appellant/ complainant as compensation. iv. Registry to arrange for such payment. Date – 14/01/2010. U. D. SALVI, J. SMA