N. Lakshmiammal vs Subash Spinning Mills

R.S. Ramanathan, J.—The complainant in C.C. No.439 of 2007 on the file of the Judicial Magistrate II, Pollachi is the appellant. The complainant filed the above private complaint under Section 138 of the Negotiable Instruments Act against the respondents on the file of the Judicial Magistrate II, Pollachi in C.C. No.439 of 2007 and the learned Judicial Magistrate convicted the second respondent under Section 138 of the Negotiable Instruments Act and sentenced to undergo simple imprisonment for six months and to pay a fine of Rs.1,000/-, in default, to undergo simple imprisonment for 3 months and aggrieved by the same, the respondents filed Cril.A.No.152 of 2008 on the file of the Additional District and Sessions Judge, Fast Track II, Coimbatore and the learned first appellate Judge allowed the Appeal and set aside the judgment of conviction and sentence and hence, this Appeal is filed by the appellant.

The case of the appellant is that the appellant supplied cotton to the respondents 1 and 2 on account, and on 30.09.1998, the respondents were liable to pay Rs.3,57,046/- and therefore, the respondents issued two cheques bearing No. 498965 dt. 21.9.1998 for Rs.2,00,000 and another cheque bearing No. 498986 dt. 30.10.1998 for Rs.1,57,046/- both drawn on the Tamilnad Mercantile Bank Ltd., Coimbatore and the cheques were presented for collection and they were returned with an endorsement "insufficient funds" and therefore, a statutory notice dated 27.3.1999 was issued and that was not received by the respondents and therefore, the case was filed.

To prove the case, the complainant examined herself as PW.1 and examined 3 witnesses. She also marked 10 Exhibits. On the side of the respondents, the second respondent examined himself as DW.1 and also examined another witness and also marked 7 documents.

The appellant appeared in person and submitted her arguments as follows:-

She supplied cotton to the respondents and as on 30.09.1998, the respondents 1 and 2 were liable to pay Rs.1,33,846/-. Therefore, the respondents issued two cheques bearing No. 498965 dt. 21.9.1998 for Rs.2,00,000 and another cheque bearing No. 498986 dt. 30.10.1998 for Rs.1,57,046/- both drawn on the Tamilnad Mercantile bank Ltd., Coimbatore, and requested the appellant to present the cheques for collection after 7 days and believing their representation, she presented the cheque for collection and that were returned with the endorsement "insufficient funds". After issuing statutory notice, the complaint was filed and to prove that the respondents purchased cotton bales under Bill No. 218, she examined herself and that was also spoken to by PW.3, the lorry driver, who delivered the goods to the respondents 1 and 2 and PW.4 also corroborated the evidence of PW.1, the appellant, that the cheques were issued by the respondents for the supply of cotton bales under Bill No. 218 and therefore, the appellant proved the liability and the respondents also admitted the issuance of cheques. Considering all these aspects, the trial court rightly convicted the respondents and the lower appellate Court without properly appreciating the case of the appellant, allowed the Appeal. Therefore, the Appeal is field and the Appeal is liable to be allowed for the reasons stated above. She further submitted that the respondents 1 and 2 failed to prove that the two cheques were given as security and the defence raised by the respondents 1 and 2 that they purchased cotton from her under Bill No. 25 for a sum of Rs.1,58,100/- and repaid Rs.1,49,000/- in 3 installments, namely, 23.9.1998, 6.10.1998 each for Rs.50,000/- and on 15.10.1998 for Rs.49,000/- and the cheques were issued as security while taking delivery of the goods under Bill No. 25 and balance of Rs.9,100/- was to be paid. She further submitted that Bill No. 25, which was marked as Ex.D.4 cannot be accepted as a true Bill as it does not contain the seal by Commercial Tax Office and therefore, the lower appellate Court erred in believing Exs.D.1 to D.4 in allowing the Appeal. She also submitted that Exs.D.1 to D.3 were issued for earlier purchases made by the respondents and they were not paid towards the purchases made by the appellant as spoken to in the complaint and having regard to PW.3, driver, who delivered the cotton bales to the respondents, the appellant proved her case and the respondents failed to rebut the presumption and therefore, the respondents are liable to be convicted.

Mr. Palani Selvaraj, learned counsel appearing for the respondents 1 and 2 submitted that the trial Court without properly appreciating Exs.D1 to D.4 and the evidence of DW.2 erred in convicting the respondents and the lower appellate Court rightly appreciated the law on that aspect and held that the respondents rebutted the presumption by examining DW.2 as well as marked Exs.D1 to D4 and allowed the Appeal and therefore, the judgment of the lower appellate Court does not call for interference. The respondents further submitted that in the complaint as well as in the statutory notice, the appellant did not state that the respondents purchased cotton bales under Bill No. 218 for the sum of Rs.3,57,046/- and it is only stated that on credit basis, cotton was supplied to the respondents on 16.9.1998. But, in evidence, Bill No. 218 was mentioned but Bill No. 218 was not marked and therefore, in the absence of any proof of receipt by the respondents, it cannot be contended that the appellant supplied cotton bales. He further submitted that the evidence of PW.3 cannot be believed. He is only a lorry driver and according to him, he delivered cotton bales to the respondents and having regard to the evidence of DW.2, the evidence of PW.1 and PW.3 cannot be believed. He further submitted that PW.1 admitted that whenever cotton bales were sold, seller has to pay cess and some times, buyer has to pay cess. As per the evidence of DW.2, the Superintendent of Regulatory Market, whenever cotton bales are sold within that area, it has to be sold only through the Regulatory Market and without paying the cess, the goods cannot be sold and they are maintaining the account and as per their account, in the month of September 1998, under Bill No. 25, the appellant sold cotton bales worth Rs.1,58,100 on 9.9.1998 and no sale was effected under Bill No. 218 or 219 on 16.9.1998 and 30.9.1998 and therefore, in the absence of any acknowledgment by the respondents in Bill No. 218 for having received the cotton bales and having regard to the evidence of DW.2, it cannot be contended that cotton bales were sold under Bill No. 218. He further submitted that under Sections 118 and 139 of the Negotiable Instruments Act, the respondents have to rebut the presumption by making out probable defence and in this case, the respondents have substantiated their case by marking Exs.D.1 to D.4 as well as the evidence of DW.2 and the respondents contend that no purchase was made under Bill No. 218 and the cheque was issued as a collateral security for the bill amount payable under Ex.D.4 namely, Bill No. 25 dated 9.9.1998 for the sum of Rs.1,58,100/- and Rs.1,49,000/- was paid as evidenced by Exs.D.1 and D.3 and the same was also admitted by the appellant during evidence and therefore, once the respondents rebutted the presumption by adducing probable evidence, the burden shifts on to the appellant to prove that the respondents were liable to pay the said sum towards legally enforceable liability and in this case, that was not proved and therefore, the lower appellate Court has rightly allowed the Appeal.

Whether the lower Appellate Court was right in allowing the Appeal holding that the appellant failed to prove that the respondents 1 and 2 are liable to pay the sum of Rs.3,57,046/-? as per Cheques No. 498965 and 498986.

As stated supra, the specific case of the appellant is that under Bill No. 218 on 16.9.1998, she supplied cotton bales worth Rs.3,57,046/- and the appellant issued two cheques for the said sum. Admittedly, in the notice as well as in the complaint, there is no reference to Bill No. 218 and it is further stated that on credit basis, the appellant supplied cotton bales to the respondents, and the bill No. 218 was neither filed along with the complaint nor marked in evidence. As rightly submitted by the learned counsel for the respondents, Bill No. 218 was not marked. The appellant examined PW.3, lorry driver to prove the delivery and the evidence of lorry driver cannot be believed as Bill No. 218 was not marked and also having regard to the evidence of DW.2. It is admitted by the appellant that cess has to be paid by seller and some times, buyer will also pay cess but the law is very clear that normally cess has to be paid by the seller. Admittedly, no proof was filed by the appellant for having paid cess for the sale under Bill No. 218. DW.2, the Superintendent of the Regulatory Market, clearly deposed by producing Ex.D.6 that in the month of September 1998, the appellant sold cotton bales worth Rs.1,58,100/- under Bill No. 25 to the respondents on 9.9.1998 and in respect of that the permission chit was issued bearing No. 262330. PW.1, the appellant also admitted that the respondents paid Rs.1,49,000/- and contended that the said amount was paid for earlier dues. It is seen from Exs.D.1 to D.3 that those receipts are dated 23.9.1998, 6.10.1998 and 15.10.1998. According to the appellant, Bill No. 218 is dated 16.09.1998 and in respect of other case in which both the parties are the same, Bill Number is 219 dated 30.9.1998 and under that Bill No. 219, cotton bales were sold for Rs.1,33,846/- to the respondents. It is stated by the appellant in evidence that though under Bill No. 218 dated 16.9.1998, a sum of Rs.3,57,046/- was due and that amount was not paid, she also supplied cotton bales worth Rs.1,33,846 on 30.9.1998 as the respondents informed her that they had applied for loan. This explanation cannot be accepted, having regard to Exs.D.1 to D.3. Ex.D.1 is dated 23.9.1998 for the sum of Rs.50,000/-. Ex.D.2 is dated 6.10.1998 for the sum of Rs.50,000/-. Ex.D.3 is dated 15.10.1998 for the sum of Rs.49,000/-. Therefore, if really, the appellant had supplied cotton bales worth Rs.3,57,046 on 16.9.1998 and Rs.1,33,846 on 30.9.1998, she would not have supplied those goods without insisting on payment. Admittedly, except the oral evidence of PW.1 and PW.3, there is no evidence to prove that cotton bales were supplied to the respondents through PW.3 on 30.9.1998.

As stated supra, the evidence of DW.2 and Ex.D.6 would also falsify the case of the appellant and therefore, the lower appellate Court rightly believed the evidence of the respondents 1 and 2 and allowed the Appeal. In this case, the payment of Rs.1,49,000/- by the respondents through Exs.D.1 to D.3 was admitted and PW.1 also admitted Ex.D.4 Bill No. 25 and though she denied it in the latter part of the examination, issuance of Bill No. 25 Ex.D.4 was proved through examination of DW.2 and Ex.D.6. Therefore, the respondents have proved that they had transaction only under Bill No. 25 Ex.D.4 and though repaid Rs.1,49,000/- against the credit of Rs.1,58,100/- and while purchasing the goods on credit under Bill No. 25 Ex.D.4, they gave 3 cheques and that was misused by the appellant.

Therefore, when the respondents have rebutted the presumption by producing oral and documentary evidence, the burden shifts on to the appellant to prove that she supplied the goods and in this case, the appellant failed to prove that she supplied the goods as there is no acknowledgment of the receipt of goods by appellant and the evidence of PW.1 and PW.3 cannot be believed for arriving at the conclusion that the goods were delivered to the respondents in the light of Ex.D6, which would clearly prove that no transaction under Bill No. 218 dated 16.09.1998 took place between the appellant and the respondents during the month of September. Further, in the notice as well as in the complaint, there is no reference to Bill No. 218 and the Bill was not marked. These aspects were rightly appreciated by the lower appellate Court and the lower Appellate Court rightly held that the respondents rebutted the presumption by adducing sufficient proof and the appellant failed to prove the appellant''s case and also relied upon decisions rendered by the Hon''ble Supreme Court, and rightly allowed the Appeal.

Hence, I do not find any reason to interfere with the judgment of the lower appellate Court. The Criminal Appeal is dismissed.