THE COMMISSIONER OF INCOME TAX vs. M/S MANGALORE REFINERY AND PETROCHEMICALS LTD

For the sake of convenience, parties are referred to by their ranks before the trial Court.

A complaint came to be filed against the accused by the complainant alleging that accused running a business of pharmaceutical marketing agent in the name of name and style of 'Swiss Bio Science'. Complainant was appointed as a pharmaceutical consignee sales agent for Karnataka in the name and style of 'Poorna Chandra Pharma'. Accused used to deliver pharmaceutical stocks. Complainant used to pay for the same through cheques and used to supply the same on demand made by the wholesalers and he was paid by the wholesalers. However, due to lapse in marketing sale decreased and pharmaceutical products delivered to the complainant were held up. After few days, complainant has returned the said goods to the accused. He was assured payment of the same. In this way, as on 09.07.2010, a sum of Rs.9,16,142/- was due from the accused to the complainant.

Due to all this, complainant stopped the business in the month of November 2010. He kept on requesting the accused to return the balance with interest

After service of summons, accused appeared through counsel and contested the case by pleading not guilty.

In order to prove the allegations against accused, complainant examined himself as PW-1 and got marked Exs.P1 to 19.

During the course of his statement under Section 313 Cr.P.C, the accused has denied the incriminating evidence led by the complainant.

In fact, accused has also given evidence as DW-1 and relied upon Ex.D1 consisting of 17 invoices.

The trial Court convicted the accused and sentenced him to pay fine Rs.4,10,000/- with the default sentence of imprisonment. Out of the fine amount realised a sum of Rs.4,00,000/- is ordered to be paid to the complainant by way of compensation.

Aggrieved by the same, accused approached the Sessions Court in Crl.A.No.910/2017. However, the same came to be dismissed by confirming the judgment and order of the trial Court.

Aggrieved by the concurrent findings of trial Court and Sessions Court, the accused is before this Court, contending that the same are against law, facts and not sustainable in law. The Courts below have committed serious error in convicting the accused despite there is no

On the other hand, learned counsel for complainant supported the impugned judgment and order and sought for dismissal of the petition.

Heard arguments and perused the record.

The undisputed facts are that accused is running a business as pharmaceutical marketing agent and complainant was appointed as a pharmaceutical consignee sales agent. It is also not in dispute that whenever goods were supplied by the accused, complainant used to pay the amount and recover the same from the wholesale purchasers. It is alleged that due to fall in the marketing strategy, the goods supplied to the complainant were held up and he returned the same, but accused failed to refund the amount. In this way, accused was due in a sum of Rs.9,16,142/- as on 09.07.2010 and after much persuation, accused issued two cheques for Rs.2 lakhs each towards part payment and when presented, they were dishonoured for want of sufficient funds. Accused claimed that the complainant has not returned goods worth Rs.9,83,858/- and immediately after return of the same, he would be entitled for the said amount.

The accused has also alleged that the cheques in question were not issued to the complainant by the

At the outset, it is relevant to note that accused has not replied to the legal notice, which were sent to his office address and residential address. Both notices are returned with endorsement information delivered, but not claimed. The accused is not disputing his addresses to which the legal notices were sent. In fact in the complaint also, the same address is given.

Under Section 27 of the General Clauses Act when any Central Act or Regulation made after the commencement of the General Clauses Act, authorizes or requires any document to be served by post, whether the expression service or either of the expressions give or send, or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of the post.

Therefore presumption is operating in favour of the complainant and against the accused that intentionally the accused has not received the legal notice and choose to send any reply. Therefore, it is not open to the accused to claim that legal notice is not served on him and therefore mandatory requirement of Section 138 is not complied with. Accused has not lead any evidence to prove that legal notice are not served on him.

Despite the fact that the accused has not sent reply and thereby spelling of his defence at the earliest available opportunity, he is at liberty to take such defence at the trial and establish the same. The suggestions made to complainant that the cheques were not issued by the accused and on the other hand, he has managed to collect them from the receptionist is denied by him. Admittedly, the accused has not taken any action against the receptionist for having issued cheques to the complainant unauthorisedly. During the course of his evidence, the accused has deposed that complainant is due in a sum of Rs.19 lakhs.

However, as admitted by him, accused has not taken any steps to recover the same. Thus, the conduct of accused is not consistent with the defence taken by him. Of course he has failed to prove the same.

Thus through the oral and documentary evidence, coupled with the presumption under Section 139 of N.I. Act, the complainant has proved that accused has committed the offence punishable under Section 138 of N.I Act. The trial Court as well as the Sessions Court rightly held him guilty and the conclusions arrived at and findings given by them are consistent with the evidence on record. As such this Court finds no perversity calling for interference in exercise of the powers under Section 397 r/w 401 Cr.P.C.

In the result the petition fails and accordingly the following: ORDER (i) Petition filed by the accused under Section 397 r/w 401 Cr.P.C is hereby dismissed.