IN THE HIGH COURT OF BOMBAY AT GOA. CRIMINAL APPEAL NO. 63 OF 2003. Shri Wilson Fernandes, c/o Hotel Sunaina, Fatorda, Margao. ... Appellant. Versus 1. Shri Nitin Pandurang Chodankar, Near Damodar Housing Society, Behind Gouri Bungalow, Aquem, Alto Margao. 2. State. ... Respondents. Mr. C.A. Coutinho, Advocate for the Appellant. Mr. P.P. Singh, Advocate for the Respondent No. 1. Mr. S.N. Sardessai, Public Prosecutor for the Respondent No. 2/State. Coram : P.V. HARDAS, J. Date : 5th April 2004. ORAL JUDGMENT. The appellant/original complainant, being aggrieved by the Judgment passed by the IIIrd Assistant Sessions Judge, South Goa, Margao, dated 5th May 2003, in Criminal Appeal No. 28 of 2002, allowing the appeal and acquitting the respondent/accused, for an offence punishable under Section 138 of the Negotiable Instruments Act, has filed the present Appeal. 2. The facts, in brief, as are necessary for the decision of this Appeal, are set out hereunder:- The appellant/complainant filed Criminal Case - 2 - No. 533/N/99/F in the Court of the Judicial Magistrate, First Class, Margao, against the respondent/accused alleging therein that the accused on 4th August 1997 had obtained an amount of Rs. 5,56,000/- from the complainant with a promise to sell a flat of 100 square metres in the building known as ‘Niad’ at Rawalfond, Navelim, Salcete Goa. The complainant had averred that the accused had promised to deliver possession of the flat within 6 months from the date of receipt of the amount. The complainant has averred that the accused, despite the oral agreement, failed and neglected to deliver the possession of the flat within the said period of 6 months and, on the complainant contacting the accused several times, the accused had promised to deliver the possession of the flat on or before 10th June 1999. The complainant further averred that as the accused failed to deliver the possession of the flat on 10th June 1999, the complainant contacted the accused on 16th June 1999 and the accused expressed his inability to give possession of the flat and issued 6 cheques being cheque no. 9912471, dated 16th June 1999, for Rs. 1 lakh; cheque no. 9912472, dated 25th June 1999, for Rs. 50,000/-; cheque no. 9912474, dated 18th July 1999, for Rs. 56,000/-; cheque no. 9912475, dated 22nd August 1999, for Rs. 1.5 lakhs; cheque no. 9912476, dated 25th September 1999, for Rs. 1.5 lakhs and cheque no. 9912477, dated 20th October 1999, for - 3 - Rs. 50,000/-. The said cheque no. 9912474, dated 18th July 1999, for Rs. 56,000/- was returned unpaid alongwith a memorandum disclosing the remark ‘account closed’. The complainant then issued a notice, on 15th November 1999, and the accused, despite receiving the notice on 18th November 1999, did not pay the complainant the value of the cheque. In the said factual backdrop, the complainant filed the complaint before the Judicial Magistrate, First Class, Margao. 3. The learned trial Court explained the particulars of the offence to the accused. The particulars of the offence state that the complainant had paid an amount of Rs. 5,56,000/-, the accused had promised to sell a flat of 100 square metres in the building known as ‘Niad’ and despite his promise had failed to deliver the flat within 6 months. Towards the discharge of his liability, the accused had issued a cheque bearing no. 9912474, dated 18th July 1999, for Rs. 56,000/-, which was returned unpaid on account of ‘account closed’. The accused pleaded not guilty and claimed to be tried. The complainant examined himself as P.W.1, S.M. Bhandare as P.W.2 and Balkur Arun Sheregar as P.W.3 The accused examined himself as D.W.1 and also his wife Sharmila as D.W.2. The learned trial Court, accepting the case of the complainant, convicted the accused for an offence punishable under Section 138 - 4 - of the Negotiable Instruments Act and sentenced the accused to undergo simple imprisonment for 2 months and directed the accused to pay compensation of Rs. 1.12 lakhs to the complainant under Section 357(3) of the Code of Criminal Procedure or in default to undergo simple imprisonment for 2 months. On an appeal being carried to the Sessions Court by the accused, the learned IIIrd Assistant Sessions Judge, vide Judgment, dated 5th May 2003, allowed the appeal and acquitted the accused. The complainant, being aggrieved by the acquittal of the accused, has filed the present appeal against acquittal. 4. The learned appellate Court doubted in principle and in substance the contention of the complainant that he had paid an amount of Rs. 5,56,000/- to the accused for the purchase of a flat. The learned appellate Court doubted the case of the complainant for the reason that admittedly no documents had been executed towards the receipt of the said amount by the accused and the appellate Court found that no prudent person, particularly the complainant, who was a law graduate himself, would advance such a huge amount without either obtaining a written agreement or receipt in proof of payment of the amount. The learned appellate Court also found discrepancy in the testimony of the complainant in respect of the amount of Rs. - 5 - 5,56,000/- in cash available with the complainant for payment to the accused. The learned appellate Court also found that from the cross-examination of the complainant, the accused had succeeded in ‘bringing on record a doubt as to whether there was any debt or liability incurred by the accused towards the complainant’. The learned appellate Court also found that the accused had succeeded in bringing on record material which casts a doubt on the said transaction of 4th August 1997 in respect of the accused receiving an amount of Rs. 5,56,000/- and, thus, the claim of the complainant was not believable and, thus, the accused had been able to establish that there was no debt or liability in respect of the said amount. The appellate Court, therefore, allowed the appeal and acquitted the accused. 5. In order to appreciate the rival contentions, it is useful to refer to the evidence led by the complainant and the accused. 6. The complainant examined himself as P.W.1 and stated that he had paid an amount of Rs. 5,56,000/- to the accused on 4th August 1997 and the accused had promised to deliver a flat within 6 months. As the accused committed default in not delivering the flat as agreed, the complainant approached the accused and the - 6 - accused promised to deliver the flat by 10th June 1999. Since the accused again defaulted in delivering the flat to the complainant, the complainant contacted the accused on 16th June 1999. The accused pleaded his inability to deliver the flat and had issued 6 cheques. The cheque no. 9912474, dated 18th July 1999, for Rs. 56,000/-, on being presented to the Bank, was returned unpaid with an endorsement ‘account closed’. The cheque is at Exhibit P.W.1/A and the cheque return memo is at Exhibit P.Ws.1/B and 1/C. The complainant issued a notice to the accused at Exhibit P.W.1/D (Colly), which was accepted by the accused. As the accused had failed to pay the amount to the complainant, despite receipt of the notice, the complaint was filed. 7. In the cross-examination the complainant has admitted that he does not have any document to show that a flat was agreed to be sold to him. He further states that he had borrowed 50% from Professor G.R. Budbud and the balance amount was his. He has further stated that he is in possession of receipts to show that he had borrowed half the amount from said Professor Budbud. In respect of half of the amount invested by him, he has stated that he had withdrawn the said amount from his account in the Bank. He further states that he had physically verified the construction of the flat before construction but after construction of the said flat he - 7 - had not visited the said site. He has further admitted that the cash transaction of the accused is reflected in his balance sheet from the year 1997 onwards. He has further admitted that he had withdrawn 50% of the amount paid by him to the accused from his account in the Canara Bank. Despite direction by the Court to produce the pass-book, the complainant had not produced the pass-book. He was asked the question as to why he had not brought the pass-book and he answered by stating that he had not brought the pass-book since the amount he had withdrawn was not figuring in the pass-book. He has admitted that his hotel had given a contract to the wife of the accused from 23rd May 1997 upto 31st December 1998. He denied the suggestion that, since he was having access to the office, he took the cheques, which were signed by the accused. The complainant has further admitted that he has not shown the transaction with the accused in his Income Tax Returns. He has also admitted that in the Income Tax Returns filed in respect of the hotel, he has not shown that he had paid to the accused the amount of Rs. 5,56,000/-. He was asked to give the name of the Bank from which he had withdrawn half of the amount of Rs. 5,56,000/-. He has answered by saying that he had borrowed it from G.R. Budbud, Jacinto Godinho and others. He later on stated that he had not withdrawn any amount from his Bank but he had obtained loan worth Rs. 2,78,000/- from Mr. G.R. - 8 - Budbud - Rs. 20,000/-, Mr. Jacinto Godinho - Rs. 95,000/-, Mr. Joaquim Gomes - Rs. 95,000/-, Ninata Fernandes - Rs. 82,000/-, Lady Aravela Godinho - Rs. 20,000/-, Mr. Joe Miranda - Rs. 16,000/-, Mrs. Maria Gracias - Rs. 20,000/- and Mrs. Clara Cotta - Rs. 20,000/-. He has admitted that in the receipts, at Exhibit P.W.1/DF/G Colly, the name ‘Wilson Fernandes’ appears to be typed. He has further admitted that the said receipts relate to the transactions with the accused and the receipts were given to him by the accused on different dates. He has admitted that there is no cheque for Rs. 19,000/- in the said receipts, which are 26 out of 31 receipts. He has admitted that in none of the receipts the amount exceeds Rs. 19,000/-. He has further stated that the said receipts/vouchers were given as guarantee. He states that the receipts were typed by the accused. He has admitted that after the agreement expired, the wife of the accused vacated the hotel and he took charge of the hotel and restaurant. He has admitted that in the receipts, the column regarding the purpose of giving the amount, is blank. 8. P.W.2 S.M. Bhandare was the Bank Manager of Canara Bank, Fatorda Branch, at the relevant time. He states that after the cheque was returned unpaid, the same was returned to the complainant on 3rd November - 9 - 1999. 9. P.W.3 Balkur Arun Sheregar was, at the relevant time, attached to the Bank of India and states that the accused had an account in the Bank. He further states that the cheque at Exhibit P.W.1/A was received by the Bank for realization. Since the account holder (accused) had not maintained the minimum balance, there were periodical debts of service charges and as a result of which the account was closed on 10th August 1995. When the cheque was received for realization, the account stood closed and, hence, the cheque was returned. He states that the accused had applied for stopping payment on 17th September 1999. The money in the account of the accused was insufficient to meet the cheque. In the cross-examination he has admitted that he had not informed the accused that the Bank was closing the account. 10. The replies given by the accused in his Statement under Section 313 of the Code of Criminal Procedure reveal that the accused has denied as false the entire case set-up by the complainant. In the Statement, the accused had stated that he would examine himself and his wife as defence witnesses and would give his statement before the Court. - 10 - 11. The accused examined himself as D.W.1 and stated that since 1997 he was acquainted with the complainant as he had taken a catering contract of Tourist Hostel. He further states that the complainant was a family friend of his wife and in-laws. In January 1997 he was offered a contract by the complainant to run a hotel by name Sunaina and, accordingly, he and his wife agreed to run the hotel from 23rd May 1997. He then states about the various terms of agreement. He further states that there was one room in the hotel, which was occupied by his wife as his wife used to stay in the hotel for the entire day. His wife used to lock the said room but used to keep the keys in the drawer of the counter. He further states that his wife was working as catering contractor in the said hotel till November 1998. Since August 1998, his wife was sick and was not going to the restaurant. His wife gave birth to a daughter on 9th October 1998. During his wife’s absence, he used to occasionally go to the restaurant and used to look after the catering. In the room his wife had kept account books, cash books, pass books and other belongings. He states that on 15th November 1998 the Karnataka Police had come to the hotel and had seized the motor-car of the complainant. The Karnataka Police had thereafter come to his residence but he could not meet the police as he alongwith his wife had gone to the doctor. After about 2 to 3 days of the incident the - 11 - complainant came to his house and informed him that the police had come to the hotel as the deal in respect of the sale of the motor-car had been finalized in the hotel, the police were searching for the accused and his wife. The complainant further told him not to come to the restaurant because the Karnataka Police were keeping a watch and there was a possibility of his arrest. The accused states that thereafter neither he nor his wife visited the restaurant at all. In December 1998, the complainant again came to his house and informed the accused that after a new caterer is appointed the personal belongings like catering items, documents, cheque books and pass books would be returned to the accused and his wife. The accused states that the complainant himself began running the restaurant. The accused has stated that till today the complainant has not returned his personal belongings like cheque books etc.. In respect of the receipt at Exhibit P.W.1/DF/G Colly, the accused has stated that they have not been issued by him to the complainant. He has admitted his signature on the receipt at Exhibit P.W.1/DF/G Colly. He has admitted that the amount and the date stated in the cheque were written by him. He has, however, stated that the name ‘Wilson Fernandes’ was not written by him nor was the cheque handed over by him. He further states that the signed cheques bearing no name which were lying in the room have been taken possession of by - 12 - the complainant. He further states that the complainant has misused the cheques so found by him by putting his own name. He has stated that he did not owe any amount to the complainant. He further states that in order to pay the Goa Tourism Development Corporation and in order to avoid the encashment of the bank guarantee, his wife had arranged an amount of Rs. 5,56,000/- and the balance amount had been arranged by him. He states that in order to repay the amount to his wife he had signed six cheques and had left the entire cheque book with her. He has further stated that the receipts/vouchers at Exhibit PW1/DEF/G Colly were written and signed by him and they are in all 33 in number. Inadvertently he had signed on the said vouchers/receipts. He has stated that the complainant has typed his own name on the said receipts. The total amount of the said receipts is Rs. 5,56,000/-, which matches with the amount of the six cheques. He has also stated that he was constructing a building known as ‘Chodankar Residency’ and in the said building there was no flat admeasuring 100 square metres and in December 1998 he got the occupancy certificate from the Village Panchayat. He has further stated that in respect of the sale of the various flats he has always entered into a written agreement and there is no question of oral agreement with anyone. 12. In the cross-examination he has admitted that - 13 - he had received a notice from the Government to pay dues worth Rs. 7,75,000/- or else his contract would be terminated. He has also admitted that from 1994 he was operating the catering of the Tourist Hostel of the Government. He has stated that he does not know whether his brother-in-law Pradeep Naik, who has constructed a building next to Hotel Sunaina, was a good friend of the complainant. He has admitted that from 23rd May 1997 till 31st December 1998 his wife was looking after the management of Raj Restaurant and was sick from August 1998. He has denied the suggestion that no room was given by the management to his wife. He has further admitted in the cross-examination that in the absence of his wife particularly during her sickness he used to supervise and manage the waiters. He denied the suggestion that after settlement of the account, he had delivered possession of the restaurant and while delivering the possession, personal belongings had been removed by his wife. He has also admitted that he had not filed any complaint before the police when the cheques were misplaced. He has also admitted that he had not sent a letter to the Bank nor filed any case for the refund of the said security deposit. He has admitted not to have issued any notice to the complainant prior to the filing of the complaint. He has admitted that since 1997-98 he has not been operating the account in the Bank of India, Margao - 14 - Branch and was not aware that the Bank of India had stopped the operation of the account. He states that he even does not remotely remember as to when he last operated the account in the said Bank. He denied the suggestion that he was fully aware that the savings bank account had been stopped by the Bank. He has admitted to have issued a letter to the Bank issuing ‘stop payment’ instructions but had not checked whether there was sufficient funds in his account. He has admitted that he has a construction firm named ‘Ninad’ and, since December 1997, he is in the construction business. 13. The accused examined his wife Sharmila as D.W.2. Sharmila states that the complainant was her family friend and had taken the catering contract in the restaurant of the Hotel Sunaina. She states that she could not fulfil the contract and left in November 1998 as she was in the family way and was expecting the delivery of the child. She states that the complainant had come to her house and had told her about the problem of his car and had told her not to come to the hotel. She further states that she used to keep all her personal things in the office room at Hotel Sunaina and the keys were always kept at the counter of the Hotel. She also states that the accused was also looking to the catering contracts during her absence. The cheques which were kept in the locker in the room were easily - 15 - accessible. The complainant after telling her not to come to the restaurant started running the restaurant himself. She states that the cheque duly signed by the accused had been given to her, which had been kept in the hotel. The said cheques had been issued to her by the accused as the accused was supposed to make payment for the amount paid by her at the time of making payment to Goa Tourism Development Corporation. In respect of the receipts/vouchers, she has stated that they were to be signed by her but inadvertently they had been signed by the accused. She has stated that the name on the receipts was blank as also the name on the cheques. In the cross-examination she has admitted to have issued notice to the complainant for refund of the money in respect of the catering contract but not to have filed a case against the complainant. She has further admitted that she had given Rs. 5,60,000/- to the accused. She has denied the suggestion that she had borrowed the said amount from her relatives. She has admitted that this amount is reflected on various receipts at Exhibit DW1/G Colly. She has also admitted that the receipt is for Rs. 19,000/- as a receipt cannot evidence cash transaction of more than Rs. 20,000/-. She has denied the suggestion that after she had stopped the catering contract she had taken all her belongings including the cheque books etc.. She is stated not to have filed a complaint to the police in respect of her belongings - 16 - lying in the room and the complainant refusing to hand over the same to her. 14. Mr. Coutinho, the learned counsel appearing on behalf of the appellant/original complainant has submitted (1) that the lower appellate Court has completely ignored the presumption available under Section 139 of the Negotiable Instruments Act. For this purpose strong reliance is placed on the Judgment of the Apex Court in Hiten P. Dalal v. Bratindranath Hiten P. Dalal v. Bratindranath Hiten P. Dalal v. Bratindranath Banerjee Banerjee Banerjee, (2001) 6 S.C.C. 16. (2) It is also urged that the defence of the accused/respondent is contradictory and as such it cannot be said that the accused has successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act. (3) It is also urged that the learned Assistant Sessions Judge did not have the necessary jurisdiction to decide the appeal and, therefore, the present appeal deserves to be allowed. 15. Mr. Singh, the learned counsel appearing on behalf of the respondent/accused has submitted:- (1) the accused has been able to rebut the presumption on the basis of the admission elicited in the cross-examination of the accused as well as in the evidence of his witness. (2) It is also submitted that the evidence of the accused tasks human credulity particularly when he - 17 - advanced Rs. 5,56,000/- without obtaining a written agreement or a receipt towards the payment. (3) It is urged that the ground that the Assistant Sessions Judge has no jurisdiction to decide the appeal has not been taken in the Memo of Appeal and, therefore, the appellant cannot be permitted to urge this ground for the first time. Alternatively it is submitted that originally after the admission of the appeal, the appeal was assigned to the IIIrd Assistant Sessions Judge, Margao, Goa. The said making over of the Appeal to the IIIrd Assistant Sessions Judge by the District and Sessions Judge is dated 24th June 2002. At that time the Court of the IIIrd Assistant Sessions Judge was presided over by the Assistant Sessions Judge, who retired soon thereafter. The appeal on some occasions was placed for necessary orders before the Additional Sessions Judge, Margao, who was in-charge of the Court of the IIIrd Assistant Sessions Judge. Thereafter it appears that the Assistant Sessions Judge, Margao, came to be appointed and posted to the Court of the IIIrd Assistant Sessions Judge, South Goa, Margao. It is submitted by Mr. Singh that an