... 1 ... IN THE HIGH COURT OF BOMBAY AT GOA. CRIMINAL APPEAL NO.23 OF 2007 M/s Paul Dias and Sons by its partner, Mr. William Dias, 10, Khalap Mansion, Vasco da Gama, Goa. ... Appellant v e r s u s M/s SDS Shipping Pvt. Ltd., by its Managing Director, Capt. V.K.S. Saigal, having their office at C-72, Mittal Court, Nairman Point, Mumbai – 400 021 ... Respondents Mr. A. F. Diniz, Advocate for the Appellant. Mr. A. Monteiro, Advocate for the Respondent. CORAM: R. C. CHAVAN, J. DATED: 22nd July, 2008. ORAL JUDGMENT: This appeal by the complainant takes exception to judgment rendered by the learned Judicial Magistrate, First ... 2 ... Class, Vasco in Criminal Case No.536/04 whereby the learned Magistrate acquitted the respondent of the offence punishable under section 138 of the Negotiable Instrument Act. 2. The facts which led to filing of the complaint are as under: The complainant/company are Ship Chandlers who provide various ship stores to ships which call at Mormugao Port. The respondent/company has been arranging for supply of such stores through the complainant as Agents of Russian Vessel A. A. Sidorenko. The respondent has issued cheques No.353919 and 353921 dated 22.08.2003 and 30.09.2003 drawn on Centurion Bank at Vasco for Rs.2,00,000/- each towards ship stores supplied to the said Russian Vessel A.A. Sidorenko. The complainant presented the first cheque No.353919 for clearance on 25.08.2003 through their bankers, which was returned back for want of funds. It was again presented on 14.10.2003 and was once again returned for want of funds. This cheque, ... 3 ... alongwith other cheque No. 353921, were again presented on 19.02.2004 and both the cheques bounced for want of funds. On 18.03.2004, the complainant issued a notice by registered post acknowledgment due informing the accused of dishonour of cheques and making a demand of money at the earliest. This notice was received by the accused on 20.03.2004 and was replied by letter dated 20.3.2004 acknowledging that the amount was due and promising payment after the Russian elections were over. Since the payment did not come through, the complainant filed a complaint before the learned Magistrate. 3. Upon issuance of process, accused applied for being represented by one Dinesh Jamsandekar, Accounts Manager in place of the Managing Director. The Trial Court rejected his application leading the accused to file Revision, which was allowed by the Sessions Judge, allowing Dinesh Jamsandekar to represent the accused. ... 4 ... 4. Upon considering the evidence tendered, the learned Magistrate held that the complainant had failed to prove the ingredients of the offence punishable under section 138 of the Negotiable Instrument Act and proceeded to acquit the respondent, which has led to filing of the present appeal. 5. I have heard Mr. Diniz, the learned counsel for the appellant and Mr. Monteiro, the learned counsel for the respondent. With the help of of both the learned counsel, I have gone through the complaint, documents and the evidence tendered. The learned counsel for the appellant submitted that the learned Trial Magistrate should not have held against the complainant in face of reply to the notice of dishonour dated 18.3.2004 sent under the signature of Dinesh Jamsandekar. The contention of the learned counsel for the respondent is that Dinesh Jamsandekar may have been the Accounts Manager, but had no authority to accept liability since he is not in charge ... 5 ... and responsible for the conduct of the business of the company. What Dinesh Jamsandekar has done by notice dated 18.3.2004 is not acceptance of liability on behalf of the company, but merely acknowledgment on the basis of the material and the accounts books in his possession, that the company was liable to make payment towards the cheques which were dishonoured. The learned counsel for the respondent submitted that the reply dated 22.3.2004 merely acknowledges the liability to pay legitimate dues and not the dues under the cheque. 6. This letter dated 22.3.2004 is in response to the notice dated 18.3.2004. The Advocate who sent the notice was careful in giving the reference No.LN/PJA/14/04. It would be seen that the reply of Dinesh Jamsandekar specifically quotes this reference and therefore, it cannot be said that the communication was made in a vacuum. It was specifically in response to the notice and hence if the Accounts Manager disputed the liability to pay the amount due under the cheques, ... 6 ... the Manager ought to have said so. He should have clearly pointed out that there was nothing due. Not having done so, it is not now open to the respondent to wriggle out of the consequences of writing such a letter. 7. The learned Magistrate in paragraph 37 of the judgment has discarded the letter signed by Dinesh Jamsandekar saying that he is not responsible for the conduct of the business of the accused/company. The learned Magistrate should not have bought the arguments of the counsel of the accused so lightly, particularly in face of the fact that accused sought to be represented by Dinesh Jamsandekar and took the matter to the Sessions Court, when the Magistrate declined. He should have seen that he had in fact examined the same person under section 313 of the Criminal Procedure Code. Therefore, as a person in the know of the affairs of the company, particularly the accounts of the company, his word that the Company would make the payment should have weighed with the learned ... 7 ... Magistrate. 8. Learned counsel for the respondent however, rightly submitted that a sum of Rs.2,00,000/- has been paid to the complainant and it has been acknowledged by the complainant in the cross examination. Shri William Dias who was examined on behalf of the complainant admitted that “after the chques (cheques) bounce(d) for the first time, upon my request the accused paid an amount of Rs.2,00,000/- of the previous balance.” He submitted that since after the first bounce, a sum of Rs.2,00,000/- was paid, the debt was entirely liquidated. He submitted that the word “cheques” being a plural, and further the words “for the first time”, clearly refer to the bouncing of cheques on 19.2.2004. Therefore, liability in respect of the second cheque too has extinguished, since it was the only cheque which bounced for the first time. It is not clear as to how cheque no.353919 could be said to have not bounced for the first time. Any cheque would have a first bounce, before it ... 8 ... has a second or third bounce. It appears that the plural “cheques” is merely a typographical error. 9. In this case, the complainant had also sent an e-mail upon bouncing of the cheque no.353919 on 28.08.2003. This e- mail is at Exh.55. By this e-mail the complainant had informed the accused that the cheque for Rs.2,00,000/- had bounced and had requested the accused to immediately clear the cheque mentioned in the e-mail. In fact, this e-mail has been one of the principle causes why the learned Magistrate held against the accused, observing that since this e-mail was sent on 28.8.2003, the cause of action in respect of the said cheque was over long before the complaint was filed. There can be no doubt that a notice demanding payment of amount under a dishoured cheque could be sent electronically as well. Since no format is prescribed, Exh.55 would qualify to be a notice contemplated under section 138 of the Negotiable Instrument Act. It is not necessary to go into that aspect right now. The object of ... 9 ... referring to the e-mail at Exh.55 is to point to a suggestion on behalf of the accused to Shri William Dias towards the end of cross examination on 6.10.2006. It was suggested that after making a request by Exh.55, the amount that was paid was towards the cheque involved in this case and therefore, no amount is due in respect of the cheques. There would be no occasion to pay the amount in respect of second cheque No.353921 in response to e-mail at Exh.55, since the cheque was not at all presented by then. By making this suggestion the accused had made it clear that the payment which was made was towards the first cheque. Therefore, the arguments advanced by the learned counsel Shri Monteiro in this behalf are not available to him. 10. As far as cheque no. 353919 is concerned, in view of the admission of the complainant that sum of Rs.2,00,000/- has been received, the cause of action could be said to have been extinguished. Learned counsel for the appellant Shri Diniz tried ... 10 ... to contend that this payment was towards the current running account of the parties and not necessarily towards the cheque in question. He submitted that the witness has stated in the Court that an amount of Rs.2,00,000/- was on account of the previous balance, and so, it cannot be said that the cause of action in respect of the first cheque was extinguished. Now, when a person receives a sum of money and maintains books of accounts, it is for him to show as to how the amount was appropriated. All this was required to be proved by the complainant. In the absence of the evidence to show that there were indeed any outstanding dues towards which a sum of Rs.2,00,000/- could be appropriated, this contention on behalf of the appellant cannot be accepted. It has to be held that the learned Magistrate rightly concluded that the cause of action in respect of cheque no. 353919 was extinguished. 11. Learned counsel for the appellant rightly submitted that the entire judgment proceeds on the assumption that once ... 11 ... cause of action in respect of cheque no. 353919 did not survive, nothing further was required to be said in respect of the other cheque no.353921. As the foregoing discussion would show, it is nobody's case that this cheque was issued in lieu of the first cheque. The reply of Dinesh Jamsandekar clearly acknowledges liability in respect of this cheque. Argument that a sum of Rs.2,00,000/- was paid after the dishonour of the second cheque, cannot be accepted for the reasons mentioned in the preceding paragraphs. The learned Magistrate should have therefore, held that the complainant had proved that the accused failed to pay the amount under cheque no.353921 which was dishonoured within 15 days of notice of demand dated 18.3.2004, and that therefore the offence in respect of dishonour of this cheque was duly proved. 12. The manner in which the learned Magistrate framed the point for determination shows why the discussion by the learned Magistrate was not focused. The point framed reads as ... 12 ... under: “Does the complainant proved that accused committed offence punishable under section 138 of the Negotiable Instrument Act ?” It could have been appropriate if the point framed could reflect the ingredients of the offence, rather than asking himself whether the accused had committed the offence under section 138 of the Negotiable Instrument Act. 13. As regards to the cheque No.353919, the conclusion drawn by the learned Magistrate cannot be said to be wrong. However, he has not at all considered that there was another cheque No.353921 which was also the subject matter of the complaint before him. The particulars of the offence explained to the accused at Exh.52 refer to both the cheques. Since in respect of this cheque, the findings of the learned Magistrate are totally baseless, the appeal would have to be allowed to that ... 13 ... extent. 14. This takes me to the question of sentence to be imposed. Advocate Diniz for the appellant points out that at least a sum of Rs.2,00,000/- has been withheld by the accused since the year 2002 till today. Even at a modest 10% per annum, the interest accumulate would come to Rs.50,000/-. He therefore, submitted that the respondent should be sentenced to pay a fine or compensation equal to double the amount of the cheque. He also suggested that the Managing Director of the respondent, who is the signatory of the cheque, should also serve a term of imprisonment, in order to ensure that the accused company does not default in future. The learned counsel for the respondent submitted that imprisonment is not warranted and also suggested that the amount of fine or compensation to be awarded need not be twice the amount of the cheque in default. Considering the facts and circumstances of the case, the following order should meet the ends of justice. ... 14 ... 15. The appeal is allowed to the extent of the offence punishable under section 138 of the Negotiable Instrument Act in respect of cheque no.353921. Acquittal of the respondent is set aside and instead the respondent is convicted of the offence punishable under section 138 of the Negotiable Instrument Act and is sentenced to pay a fine of Rs.5000/- and compensation of Rs.3,00,000/-. In default of payment of fine and compensation within a period of 6 weeks, the Managing Director of the Company, Capt. V. K. S. Saigal shall suffer simple imprisonment for 3 months. R.C. CHAVAN, J. lh/.