THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRIMINAL APPEAL No.215 OF 2005 JUDGMENT: This appeal is directed against the judgment, dated 28-12-2004, in Crl.A.No.262 of 2004 on the file of the learned III Additional Metropolitan Sessions Judge, Hyderabad, wherein the said appeal filed by the 1st respondent herein was allowed setting aside the conviction of the 1st respondent herein-accused for the offence under Section 138 of the Negotiable Instruments Act (for brevity, ‘the Act’) and sentence of simple imprisonment for six months and also payment of compensation of Rs.3,00,000/- imposed by the learned XXIII Metropolitan Magistrate, Hyderabad in C.C.No.724 of 2001. 2. Heard learned counsel appearing for the appellant- de facto complainant and the learned Additional Public Prosecutor appearing for the 2nd respondent-State. None appeared for the 1st respondent-accused though served with notice. Perused the records. 3. Appellant filed the complaint against the 1st respondent alleging in brief as follows: Appellant is a registered company carrying on the manufacture of basic drugs and intermediaries and the accused, who was the Proprietor of M/s Mala Impex Pharma and M/s Mahaveer Pharma, placed an order for supply of 300 kgs of Ranitidine HCL USP23 and the same was supplied by the appellant under invoice, dated 24-11-2000. The value of the order was Rs.2,78,678/-. It is further pleaded that the accused paid Rs.1,28,678/- in cash and for the balance amount issued a cheque bearing No.783290, dated 11-01-2001, for a sum of Rs.1,50,000/- drawn on the bank of Baroda, Hyderabad. It is further alleged that when the cheque was presented for encashment on 15-05-2001 the same was dishonoured by memo, dated 22-05-2001. The appellant got issued a legal notice but the accused did not give any reply. Hence, the complaint. 4. According to the accused, he has nothing to do with M/s Mala Impex Pharma, which is alleged to have placed order for the alleged drug from the de facto complainant and the said concern is owned by his wife-Maladevi. He would further plead that the cheque is alleged to have been issued on behalf of M/s Mahavir Pharma, which concern has admittedly no transaction with the de facto complainant-company insofar as the subject-drug is concerned. 5. Before the trial Court, the de facto complainant examined P.W.1, who is the Accounts Officer, and marked Exs.P.1 to P10. The accused examined his wife-Maladevi as D.W.1 and marked Ex.D1-copy of the certificate of registration. 6. Learned Magistrate by judgment, dated 31-08-2001, found the accused guilty of the offence under Section 138 of the Act and imposed sentence of rigorous imprisonment for six months and also directed him to pay compensation of Rs.3,00,000/-. Aggrieved by the same, the accused preferred an appeal in Crl.A.No.262 of 2004 and the learned Sessions Judge by impugned judgment set side the conviction and sentence recorded by the learned Magistrate and allowed the appeal. Hence, the present appeal by the appellant. 7. Learned Magistrate disbelieved Ex.D1-copy of registration certificate on the ground that the registration was done long subsequent to issuance of the cheque-Ex.P3. The learned Magistrate further gave a finding that the accused is also a party to the transaction between the appellant and M/s Mala Impex Pharma as the accused has signed the delivery receipt in token of taking delivery of the drug supplied by the appellant and therefore the plea of the accused that he has nothing to do with the concern-M/s Mala Impex Pharma cannot be believed. The learned Sessions Judge in the appeal held that the cheque was admittedly issued by M/s Mahavir Pharma, which had admittedly no dealings with the appellant insofar as the subject- drug is concerned, and therefore no liability can be fastened on the accused. 8. It is to be noted that M/s Mahavir Pharma and M/s Mala Impex Pharma are two different legal entities. As per Ex.D1-certificate of registration, M/s Mala Impex Pharma is owned by D.W.1, who of course is the wife of the accused. There is nothing on record to show that the accused has any legal relationship with the said concern-M/s Mala Impex Pharma so as to bind the said concern by his transactions. Even assuming for a moment that Ex.D1 cannot be taken into consideration on the ground that it was obtained subsequent to issuance of the cheque apart from the fact that Ex.D1 is only a Xerox copy, still the cheque-Ex.P3 was issued admittedly by M/s Mahavir Pharma and not by M/s Mala Impex Pharma. Even according to the de facto complainant, they supplied the drug to M/s Mala Impex Pharma. The legal liability for discharge of the debt due to the de facto complainant towards the balance consideration price of the drug supplied by them is only on the part of M/s Mala Impex Pharma to whom the drug was supplied but certainly not of M/s Mahavir Pharma. The issuance of the cheque-Ex.P3 by M/s Mahavir Pharma, represented by the accused, is therefore not relatable to the transaction between the de facto complainant and M/s Mala Impex Pharma. The cheque-Ex.P3 alleged to have been issued by the accused on behalf of M/s Mahavir Pharma cannot be said to be in discharge of any legally enforceable liability due by M/s Mala Impex Pharma. Admittedly, there was no legally enforceable liability to be discharged by M/s Mahavir Pharma towards the de facto complainant. 9. Under those circumstances, as the cheque-Ex.P3 issued by the accused on behalf of M/s Mahavir Pharma is not shown to be in discharge of any legally enforceable liability by the said concern towards the de facto complainant, the ingredients of the offence under Section 138 of the Act are not attracted. Learned Sessions Judge has therefore rightly held that the accused is not liable for punishment for the offence under Section 138 of the Act as there is no legally enforceable debt due by the accused to the de facto complainant. The impugned judgment of the learned Sessions Judge setting aside the conviction and sentence recorded by the learned Magistrate and allowing the appeal does not therefore call for any interference of this Court as the same is based on proper appreciation of evidence on record. 10. In the result, Criminal Appeal is dismissed. _______________________ G.V.SEETHAPATHY, J 13th August, 2009 Tsy