Ranju vs Bhushan Kriplani

S.B. Shukre, J.—By these appeals, the appellant has assailed the judgments and orders dated 23.11.2009 passed in Summary Cri. Case Nos. 5315/08 and 5316/08 by the 24th J.M.F.C., Nagpur (Special Court), thereby acquitting respondent no. 1 of the offence with which he was charged in the said cases i.e. offence punishable under Section 138 of the Negotiable Instruments Act, and since parties are same and dishonoured cheques relate to same contact, the appeals are being disposed of by this common judgment and order.

Briefly stated, facts of the case are as under :

(a) The appellant is the proprietor of an event management agency by name M/s. Admaark Incorporated. The appellant had proposed to organize a mega event under the title "Career 2007" for educating aspiring students of the various options and career opportunities that they would have on completion of their respective courses.

(b) Respondent no. 1 was also then running an institution under the name and style "Chester Information Archive" which was engaged in imparting of education to students in software programmes. On learning about the event, respondent no. 1 approached the appellant and proposed to participate in the event as its sponsor. The appellant explained various services that would be offered to the respondent no. 1 in exchange of sponsorship fee that would be charged from respondent no. 1.

(c) On being satisfied with the services being offered, respondent no. 1 agreed to pay sponsorship fee and it was agreed to be at Rs. 2,50,000/- exclusive of taxes. An agreement to that effect was entered into between the parties. The agreement was signed on behalf of M/s. Admaark by one Pramod Batra, who has been stated by the appellant to be the Manager of the Agency, and also by respondent no. 1. An amount of Rs. one lac was paid by three cheques of different dates which were duly honoured while for the remaining amount, three post dated cheques were issued.

(d) Later on, some dispute arose between the parties as regards the services offered to respondent no. 1. According to respondent no. 1, the appellant had agreed to make respondent no. 1 as an associate sponsor for the event "Career 2007", but the appellant uniterally converted his status into a co-sponsor together with another concern, namely M/s. Aptech. There were some negotiations on this issue between the parties and out of those negotiations, two more cheques, as alleged by the appellant, one for Rs. 40,000/- and the other for Rs. 10,000/- were issued on 14.2.2008 by respondent no. 1 to the appellant. There was one more cheque dated 15.8.2007 which was earlier issued by respondent No. 1 for Rs. 25,000/- and, since the amount thereof was to be realized as a part of contract between the parties, it was presented to H.D.F.C. Bank with which the appellant had the account. But, it was returned unpaid by the H.D.F.C. Bank to the appellant. The return memo issued by the Drawee Bank, i.e. Union Bank of India, of respondent no. 1, on whom the cheque was drawn, showed two reasons for dishonour of the cheque, namely, (a) out of date, and (b) payment stopped by the drawer. The other two cheques issued by respondent no. 1 for Rs. 40,000/- as well as for Rs. 10,000/- were also returned unpaid for the reason "payment stopped".

The appellant issued two notices, one for dishonour of cheque for Rs. 25,000/- and the other for dishonour of two cheques for Rs. 40,000/- and Rs. 10,000/- within the stipulated period of 15 days to the respondent no. 1 calling upon him to make the payment of amounts of these cheques. Reply was given by respondent no. 1 denying his liability in the matter. As the payment was not ultimately made by the respondent no. 1, two complaint cases came to be filed against him by the appellant.

The respondent denied the charge framed against him and claimed to be tried. Evidence was recorded and arguments were heard by the learned Magistrate. The learned Magistrate, by the impugned judgments and orders of the same date i.e. 23.11.2009, dismissed the complaint cases only on the ground that the notices that were issued to respondent no. 1 by the appellant were not legally valid as they were issued on the instructions of Pramod Batra, Manager of M/s. Admaark, and not the proprietor of the said agency. The learned Magistrate held that Pramod Batra did not have authority to give instructions in the matter and, therefore, the learned Magistrate even after recording findings in both the judgments that the cheques in question were issued towards discharge of legally enforceable liabilities, dismissed both the complaint cases on this short ground. Being aggrieved, the appellant has preferred these appeals.

I have heard Shri Kothari, learned counsel for the appellant, Shri Dani, learned counsel for respondent no. 1 and Smt. Mehta, learned APP for respondent no. 2/State. I have carefully gone through the impugned judgments and orders and the record of the cases before the trial Court.

It is the contention of the learned counsel for the appellant in both the appeals that it is well settled law that in criminal matters it is not necessary that the authority to act on behalf of the principle must be in writing and it can also be an implied authority, which can be gathered from the circumstances surrounding the case of the complainant . He submits that there has been ample evidence adduced by the complainant in both the appeals showing that Pramod Batra was not only the manager of Admaark agency but was well acquainted with all the affairs of the agency. He further submits that this evidence would also show that Pramod Batra had been acting on behalf of the said agency all along and had also entered into various agreements and other correspondence with respondent no. 1, to which respondent no. 1 never objected at any point of time, rather respondent no. 1 accepted the authority of Pramod Batra to act on behalf of the said agency. Therefore, he submits that the learned Magistrate has committed an error of law and fact in recording a finding that the notices issued by the appellant were not in accordance with law. In support, he has placed reliance upon the case of Sagyadhurai and ors. v. J.D. Electronics reported in II (1997) BC 21.

Shri Dani, learned counsel for respondent no. 1, has taken me through both the judgments para by para, line by line and word by word just to support his argument that both the judgments have been rendered by the learned Magistrate absolutely in a mechanical manner and without any application of mind. He submits that although the two complaint cases related to different cheques, the learned Magistrate in both the cases has referred to only one cheque for Rs. 25,000/-, which cheque was involved actually in Summary Cri. Case No. 5316/08. He further submits that this cheque has been referred to in Summary Cri. Case No. 5315/08, as well, although this cheque was never involved in this case and the two cheques for Rs. 40,000/- and Rs. 10,000/- were the subject matter of this criminal case.

The learned counsel further submits that respondent no. 1 had raised very specific defence that respondent no. 1 had incurred no legally enforceable liability which was required to be discharged by him and in support of the defence, the respondent no. 1 in his evidence had taken a stand that he had protested against the down grading of his status from an independent sponsor to a co-sponsor and, therefore, had sought to withdraw his participation in the event "Career 2007". He further submits that it was also the defence of the respondent no. 1 that after the move of his withdrawal was made, the appellant persuaded him to continue with the agreement of participation by agreeing to accept only Rs. one lac towards the full and final settlement of all the dues payable by the respondent no. 1 under the agreement.

The learned counsel further submits that the cheque for Rs. 25,000/- involved in Summary Criminal Case No. 5316/08 was returned unpaid for two reasons, of which the first reason, that is presentment of the cheque to the bank on which it was drawn after expiry of the validity period of the cheque, was extremely important. He submits that the law in this regard has been settled by the Hon''ble Apex Court in the case of Shri Ishar Alloy Steels Ltd. Vs. Jayaswals NECO Ltd., and the Hon''ble Apex Court has categorically held that the presentation of the cheque must be within six months at the bank on which it is drawn, whether presented personally or through another bank, namely, the collecting bank of the payee, and if it is presented beyond the validity period, no case under Section 138 of the Negotiable Instruments Act is maintainable.

The learned counsel further submits that all these defences taken by respondent no. 1 in a very specific manner have not been cursorily dealt with by the learned Magistrate even cursorily and this would only be an example of non-application of mind on the part of the learned Magistrate.

Learned APP agrees that the defences taken by respondent no. 1 have not been at all considered by the learned Magistrate. She also agrees that even the cases cited by the complainant as well as the accused have not been discussed in any manner by the learned Magistrate.

A bare perusal of the impugned judgments, would be enough to find as to how the learned APP is right in agreeing with the submissions of learned Counsel for both sides that the learned Magistrate has been so casual and easy going in her approach as not to even look at the law applicable and defences taken by the accused or respondent No. 1 and find a convenient way of acquitting him on the short ground of invalidity of the notice without considering the principle of law that authority to file complaint or send notice in criminal cases need not be in writing and can be inferred from the facts and circumstances of the case as established by evidence on record for which useful reference could have been made to cases cited before the Court including the case of Sagyadhurai and others (supra). Therefore, on this ground alone these appeals are liable to be allowed. But, as there are other submissions made, I must deal with them as well.

There were two different criminal cases relating to two different and distinct cases of dishonour of cheques and, therefore, the judgments impugned herein were expected to be stating distinctive facts, but that was not to be. In Summary Cri. Case No. 5315/08 the cheques bearing No. 115086 for Rs. 40,000/- dated 15.2.2008 and for Rs. 10,000/- bearing No. 115808 for Rs. 10,000/- dated 20.9.2008 were involved while in Summary Cri. Case No. 5316/08 cheque No. 21046 dated 15.8.2007 for Rs. 25,000/- was the subject matter. However, in Summary Cri. Case No. 5315/08 what the learned Magistrate has referred to is Cheque No. 21046 dated 15.8.2007 for Rs. 25,000/- and discussed the evidence in the context of this cheque and also recorded a finding that the cheque was issued for discharge of legally enforceable liability and a further finding that the case was liable to be dismissed on the ground that no legally valid notice was issued, as required under Section 138 of Negotiable Instruments Act, by the appellant to the respondent no. 1. As a matter of fact both the judgments, line by line, para by para and word by word are almost identical though, the subject cheques were different and defences not so similar. This would only show the mechanical way of dealing with cases involving economic offences thereby causing serious prejudice to the rights of the parties.

The learned Magistrate has also ignored some of the important defences raised by respondent no. 1. In Summary Cri. Case No. 5316/08 there was additional ground available for return of the cheque unpaid. This ground related to the cheque being out of date. The learned Magistrate, however, turned a Nelson''s eye to this ground and chose to not give her opinion as to whether the cheque was presented within the validity period or after the validity period of cheque and what was the effect of such presentment on the maintainability of the proceedings initiated by the appellant against respondent no. 1 under Section 138. The learned Magistrate ought to have given her finding in this regard by considering the evidence on record and principles of law laid down in the case of Ishwar Alloy Steels Ltd. (supra). I do not quite understand as to what made learned Magistrate to hold back herself on this significant aspect of the case.

It is further seen from both the impugned judgments that the learned counsel from both the sides had cited various judgments of High Courts and the Hon''ble Apex Court. Even these judgments appear to have become victim of casual approach adopted by the learned Magistrate. The learned Magistrate dealt with them in a summary manner tersely observing that considering those judgments and the arguments of both the sides, the complainant could not be said to have proved her case against respondent no. 1.

The approach adopted by the learned Magistrate is one of easy going to say the least. It appears to me that the learned Magistrate has forgotten that she is a judicial officer entrusted with the responsibility of discharging judicial functions in judicious manner which would mean doing justice by rendering judgments which comprehensively deal with evidence and defences taken and make conclusions through intelligent process of reasoning. The impugned judgments, however, do not exhibit any of these judicial qualities. They also do not show whether the learned Magistrate has followed the ratio of the cases referred or has distinguished those cases or any of them. In paragraph 16 of both the impugned judgments, a reference has been made to the case of Prudential Finance Ltd. v. State of Maharashtra reported in 1999(I) Cri.L.J. 466. It is only stated that this judgment is not applicable to the facts of the case, but how the facts of the cases before the learned Magistrate were different from the case of Prudential Finance Ltd. is not stated. Whenever any case law is referred to a Court, the Court is burdened with a duty to cull out the ratio of the case and examine if the ratio could be applied to the facts of the case before it. If it comes to the conclusion that the ratio could not be applied, the Court must state the reasons and if necessary also the distinguishing features of that case. This duty, which is borne out of the judicial functions of a Court, has been met only with non-compliance.

The above referred discussion would lead me to believe that both the judgments can only be said to be the examples of non-application of mind and wound-up attitude on the part of the learned Magistrate resulting in miscarriage of justice and sufferance by the parties. Therefore, the judgments and orders cannot be sustained in law, even for a moment. They deserve to be quashed and set aside with a direction to the trial Court to hear the cases afresh from the stage of arguments of the parties.

In the result, both the appeals are allowed and the impugned judgments and orders are quashed and set aside. Cases are remitted back to the learned Magistrate for hearing the arguments of both the sides afresh and decide the cases in accordance with law.

Parties are directed to appear before the concerned Court on 01.11.2014. Bail bonds to continue.

Copy of the order be sent to the learned Principal District Judge, Nagpur, and also to the learned Magistrate so that opportunity for improvement is afforded.