THE HON'BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CRIMINAL REVISION CASE Nos.634 OF 2003, 717 AND 777 OF 2004 Dated: 04-07-2011 Between: CRIMINAL REVISION CASE No.634 OF 2003 Radhey Sham Bung. - - - Petitioner/ Complainant. And Sri Sai Trading Company, Rep. By L.N. Rathi, Five others and the State of A.P., Rep. By its Public Prosecutor., High Court of A.P., Hyderabad. - - - Respondents/ Accused. CRIMINAL REVISION CASE No.717 OF 2004 Laxmi Nivas Rathi. - - - Petitioner/ Appellant. And The State of A.P., Rep. By its Public Prosecutor., High Court of A.P., Hyderabad And another. - - - Respondents/ Complainant. CRIMINAL REVISION CASE No.777 OF 2004 Radhey Shyam Bung. - - - Petitioner/ Respondent. And Laxmi Nivas Rathi, four others and The State of A.P., Rep. By its Public Prosecutor., High Court of A.P., Hyderabad. - - - Respondents/ Appellants. This Court made the following : THE HON'BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CRIMINAL REVISION CASE No.634 OF 2003, 717 AND 777 OF 2004 COMMON ORDER: Since the issue involved in all these Criminal Revision Cases is the same and the accused and the complainant in all the cases are also the same, these Revision Cases are clubbed for disposal by common order. 2. The Criminal Revision Case No.634 of 2003 is filed by the complainant challenging judgement dated 03-02-2003 of the III Metropolitan Magistrate, Hyderabad in C.C. No.473 of 1997, whereas the Criminal Revision Case Nos.717 and 777 of 2004 are filed by the Revision Petitioner/A-6 and the Complainant respectively challenging judgment dated 12-04-2004 of the III Additional Metropolitan Sessions Judge, Hyderabad in Criminal Appeal No.83 of 2003, one against confirmation of conviction and sentence against A-6 in the case and the other against acquittal of A-1 and A-3 to A-5 in the case. 3. According to the prosecution, A-2 to A-6 in the case borrowed a sum of Rs.2,25,000/- for the purpose of the business of their family firm i.e., A-1, being the partners of the firm and they all issued joint acknowledgement in token of receiving the amount and they used to participate in the affairs of the firm actively and subsequently, A-6 in the case issued a cheque dated 20-02-1997 for Rs.2,73,825/- drawn on A.P. Mahesh Co-operative Urban Bank Limited, Hyderabad towards full and final settlement of the entire claim on behalf of all of them and when the complainant presented the said cheque before Indian Bank, Begum Bazar Branch, Hyderabad, it was dishonoured on the ground of insufficiency of funds of A-1 firm, and thereafter a notice was issued by the complainant to the accused under Section 138 of the Negotiable Instruments Act, 1881, following which, complainant was filed before the trial Court for necessary action. 4. The accused were tried for offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 5. On behalf of the complainant he (the complainant) got himself examined as PW.1 besides examining PWs.2 and 3 and got marked Exs.P-1 to P-31. On behalf of the accused, no oral or documentary evidence was let in. 6. The trial Court accepting the version of the complainant found A-1, A-3 to A-6 guilty of committing the offence punishable under Section 138 of the Negotiable Instruments Act. Because A-1 is a firm which is a juristic person, the trial Court imposed a fine of Rs.5,000/- against it, which was directed to be paid by A-3 to A-6 equally and in default of paying it sentenced them to undergo Simple Imprisonment for six months each. They were further convicted and sentenced to pay a fine of Rs.3,000/- and in default of paying it to undergo simple imprisonment for one month each personally for the offence punishable under Section 138 of the N.I. Act, 1881. It is however stated that A-2 in the case died during the pendency of the proceedings in C.C. No.473 of 1997 and hence the case against him was dismissed as abated, whereas consequently, A-1 and A-3 to A-6 in the case filed the Criminal Appeal No.83 of 2003 before the III Additional Metropolitan Sessions Judge, Hyderabad, where by the judgment dated 12-04-2004, the learned Sessions Judge, while confirming the conviction and sentence imposed against A-6 however, set aside the conviction and sentence imposed against A-1, A-3 to A-5 and challenging the same, these Revisions are filed by the Complainant and A-6 respectively. 7. It is the contention of learned counsel for the complainant that it is important that the amount was borrowed by all the accused for the firm and when A-3 to A-5 being the partners of A-1 firm actively participated in the business of the firm as borne out by the record, and even though the cheque was issued by A-6 only and not by the firm or the other partners it has to be construed that the cheque was issued by all the accused and further the complainant issued notices to all the accused to pay the amount which were served on all of them and it is quite unreasonable to convict A-6 alone and acquit A-1 and A-3 to A-5 of the said offence and hence the judgement of the Appellate Court in erroneously acquitting A-1 and A-3 to A-5 shall be set aside and consequently basing upon the evidence adduced, they should be convicted and sentenced. It is further contended by him that the fine or compensation imposed by the trial Court is not in consonance with the amended provisions of Section 138 N.I. Act and hence the matter is to be remanded to the trial court for fresh consideration relying upon decision reported in between Goa Plast (P) Limited Vs. Chico Ursula D’Souza[1]. 8 On the other hand, it is contended on behalf of A-1 and A-3 to A-6 that the Appellate Court properly appreciated the evidence on record and acquitted A-1 and A-3 to A-5 and there is no reason to interfere with the same so far as they are concerned and further the existence of legal debt is not established and the trial Court failed to appreciate the matter properly so far as A-1 and A-3 to A-6 are concerned and further the appellate Court failed to appreciate the matter properly so far as A-6 is concerned and hence the conviction and sentence imposed against A-6 are liable to be set aside 9. Now, the points for consideration are : 1) Whether the Appellate Court properly examined the matter and correctly acquitted A-1 and A-3 to A-5 in the case? 2) Whether the conviction and sentence imposed against A-6 are tenable? 3) Whether the fine/compensation awarded by the Courts below is acceptable and sustainable respectively and it is to be reconsidered? 10. It is very significant that both the Courts below in a way accepted that all the accused together borrowed the amount and out of them A-6 issued the cheque which was dishonoured when presented before Indian Bank, Begumbazar Branch, Hyderabad. Further, the trial Court taking into consideration all the relevant factors and exhaustively examining the material on record found that the accused committed the offence punishable under Section 358 of N.I. Act. On the other hand, while examining the material on record, it is observed by the Appellate Court that A-6 alone issued Ex.P-1 cheque which was dishonoured on the presentation of it for encashment and the amount was not borrowed for the purpose of the business of the firm and hence the firm (A-1) and A-3 to A-5 were found not guilty of committing the offence, whereas A-6 was only found guilty of committing the offence and consequently delivered the verdict while accepting the other findings of the trial Court. 11. Point Nos.1 and 2: So far as the conviction and sentence of six months imprisonment imposed against A-6 is concerned it is based upon good evidence and sound reasoning and there is no reason to interfere with the same. 12. Significantly, it is the contention of learned counsel for the complainant that the fine amount imposed by the Trial Court against A- 1 and A-3 to A-6 is very low and the trial Court should have considered the total amount concerned in the case and imposed fine or compensation to be paid to the complainant in conformity with the amended provision of Section 138 N.I. Act while relying upon the decision first cited supra. 13. In that decision, the Supreme Court observed with reference to relevant facts and circumstances : “The transaction in question took place between the parties in the year 1993, therefore, Section 138, as it stood at the relevant time, would be applicable to the present case, section 138 provides imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque or with both. Section 138 has now been amended and the penalty of imprisonment for a term, which may extend to one year has been substituted to two years as provided by the Amending Act of 2002 and the fine which may extend to twice of the amount of the cheque. This has been prescribed as the punishment for the offence under Section 138 of the Act”. And with such observations directed the concerned to pay a sum of Rs.80,000/- by way of demand draft whereas the corresponding cheque amount was Rs.40,000/-. 14. In view of the judgement of Supreme Court it clearly appears that the fine/compensation imposed by the trial Court against A-1 and A-3 to A-5 is not in conformity with the statutory provisions and the observations of the Supreme Court. Hence, the matter is to be remanded to the trial Court for fresh consideration of the matter so far as the fine clause and payment of necessary compensation to the complainant are concerned. 15. Point No.3: It is very emphasizing that as per the record all the accused borrowed the amount either for the firm or for their personal needs being members of a family and A-6 issued the cheque for the entire due amount not only on his behalf but also on behalf of A-1 to A- 5. Further, it is pertinent that the complainant issued the corresponding notices demanding to pay the amount subsequent to the dishonour of the cheque to all the accused and Exs.P-4 to P-9, postal acknowledgements confirm that they received the notices and Ex.P-12 provides that on behalf of all of them the corresponding reply was given denying their liability. It is particularly stressed by the learned counsel for the complainant that it cannot be perceived that A- 6 would have given the cheque towards the payment of entire amount on his behalf only and not on behalf of A-1 to A-5. 16. Further, under Section 139 or Section 138 of the Act, the Court has to presume that the holder of the cheque received the cheque for discharging a legally enforceable debt either in whole or part unless the contrary is proved, whereas, that presumption is always rebuttable. If the cheque is not proved no such presumption will be there. Therefore, it is for the accused to place satisfactory evidence to the effect that the cheque was not issued in view of any legally existing debt or they did not issue the cheque at all and hence it is not binding upon them as per law. 17. It is to be very much emphasised that admittedly the acknowledgement of receiving the amount (Ex.P13) contains the signatures of all the accused whereas it is claimed that the signature of A-6 was obtained on blank cheque and they got no partnership and there has been no legally enforceable debt. They failed to place any evidence, which can be accepted to substantiate their claim that the signature of A-6 was obtained on blank cheque and subsequently necessary mischief was done. Therefore, the presumption is not rebutted. Further, quite significantly when the appellate Court failed to appreciate why A-6 gave the cheque for all by virtue of the provisions of Section 401 Cr.P.C. the matter can be remanded to the appellate Court for further inquiry. That A-6 issued the cheque in respect of the entire amount said to be due to the complainant, is to be properly discussed by the Appellate Court whereas it was not done accordingly. 18. Further, taking into consideration the various circumstances of the case, I am of the opinion that the judgement of acquittal made against A-1 and A-3 to A-5 is liable to be set aside and eventually the matter is to be remanded to the Appellate Court for fresh consideration as per law. In the result, the Criminal Revision Case 634 of 2003 and the Criminal Revision Case 777 of 2004 are allowed and the Criminal Revision Case 717 of 2004 is dismissed and the matter in so far as the imposition of fine or compensation is concerned, is remanded to the trial Court with a direction to dispose of the matter in that context in view of the decision of the Supreme Court cited supra and further the matter in so far as the Appeal is concerned is remanded back to the Appellate Court for fresh consideration of the question of acquittal against A-1 and A-3 to A-5 is concerned. Further, in the circumstances of the case the Appellate court is directed to dispose of the matter within three months from the date of receiving a copy of this order consequent upon which only the trial Court has to dispose of the matter with regards to the question of imposition of necessary fine and compensation. ___________________________ G. KRISHNA MOHAN REDDY, J. 04th July, 2011 Dsh/Da. THE HON'BLE SRI JUSTICE G. KRISHNA MOHAN REDDY 196 CRIMINAL REVISION CASE Nos.634 OF 2003 & 717 & 777 OF 2004 Date:04-07-2011 Dsh/Da. [1] 2004 (1) ALT (Crl.) 135 (SC).