M/S.JANAKI RAMA ENTERPRISES [P] LTD vs. DY.COMMISSIONER OF INCOMETAX

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI FRIDAY, THE FIFTH DAY OF JANUARY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE V.SRINIVAS CRIMINAL REVISION CASE NO: 368 OF 2010 Revision filed under Sections 397 & 401 of Cr.P.C aggrieved by the J^udgment of the III Additional Sessions Judge. (FTC) Bhimavaram, West Godavari District dt. 23-2-2010 passed in Crl.A.No.110 of 2008 as confirmed in CC.No.12 of 2007, dt.15-04-2008 on the file of the Judicial First Class Magistrate-cum-Principal Junior Civil Judge, Bhimavaram, West Godavari District. BETWEEN: J.V. Ramaraju, S/o Ramakrishna Raju, R/o.D.No.4-21, Pedda Amiram, Talla Mandal, ...PETITIONER/ACCUSED AND 1. M/S Sundaram Finance Ltd., rep., by its Branch Manager, J.BV Subrahamanaym, S/o. Hanumantha Rao, R/o. Bhimavaram, 2. The State of Andhra Pradesh, rep. by its Public Prosecutor. High Court of A.P., at Hyderabad. ...RESPONDENTS/ACCUSED Counsel for the Petitioners: SRI. RAJA REDDY KONETI Counsel for the Respondents: SRI. KRISHNA L GAHALOTH Counsel for the Respondents: PUBLIC PROSECUTOR The Court made the following ORDER:

I THE HON’BLE SRI JUSTICE V.SRINIVAS CRIMINAL REVISION CASE No._368 of 2010 ■■ ■ / ORDER; Crl.A.No.llO Assailing the judgment dated 23.02.2010 in file of the Court of learned III Additional Sessions the conviction and dated 15.04.2008 in of 2008 on the Judge (FTC), Bhimavaram, confirming imposed by the judgment the file of the Court of learned Judicial sentence C.C.No.12 of 2007 on Magistrate of First Class, Bhimavaram, for the offence under Negotiable Instruments Act (hereinafter referred petitioner/accused filed the present criminal under Section 397 r/w.401 of the Criminal section 138 of to as “N.I.Act”), the revision case Procedure Code, 1973 (hereinafter referred to as “Cr.P.C.”). admitted on 25.02.2010 and the The revision case was 2. of imprisonment imposed against the petitioner in Crl.R.C.M.P.No.547 of 2010. was sentence suspended, vide orders The shorn of necessary facts are that. 3. i). The complainant, M/s.Sundaram Finance Limited has been Lakshmi General Finance Petitioner/accused was approached the doing finance business and its sister concern is having branch at Bhimavaram

said Lakshmi General finance and availed finance of Rs.4,50,000/- for purchase of loriy on hire purpose. The said amount was paid to him by way of cheque for Rs. 1,75,000/- drawn in his favour and the remaining amount of Rs.2.75,000/- by way of cheque drawn in favour of P.Muralikrishnam Raju, who is the authorized agent of the petitioner, ii). Petitioner and the said Lakshmi General have entered into a Finance bilateral agreement dated 03.12.2004. According to which, accused has loan amount along with interest within to pay the thirty-five (35) equal installments and one R.Ramakrishnam Raju stood as guarantor for such transaction. hi). The said Lakshmi General Finance Company was amalgamated into the complainant company and it was upheld by the High Court of Judicature of Madras 25.02.2005. Thereby, the complainant authorized to on company is recover the balance amount from the petitioner. On being made a demand by the complainant for repayment of balance, the petitioner has issued a cheque for Rs.2,49,119/- on 15.11.2006 drawn on Bank

of Baroda, Bhimavaram branch towards part payment of the balance due. iv). Subsequently, the said cheque was presented by the complainant in its account in Indian Overseas Bank, Bhimavaram and it was returned by the petitioner’s bank with a memo dated 17.11.2006 as account closed and the same was informed to the complainant by its banker with a memo dated 18.11.2006. Then the complainant got issued a legal notice to the petitioner. but the said notice was returned as ‘person not available’. Hence, the complaint. 4. Now the point that arises for determination in this revision is “whether there is any manifest error of law or flagrant miscarriage of justice in the findings recorded by the Trial Court as well first Appellate Court?” 5. Sri B.Chandrasekhar, learned counsel representing Sri Raja Reddy Koneti, learned counsel for the petitioner, submits that the 1®^ respondent without there being any proper material filed the calendar case and the trial Court as well Sessions Court committed error in passing the judgment in favour of 1 St respondent herein.

4 6. He further submits that complaint filed without proper authorization, which is nothing but illegal and as such the same is liable to be rejected; that the complainant is not a person in whose favour the alleged cheque was issued, thereby, the complaint itself is not maintainable and there is no legally enforceable debt and there is no obligation on the part of the petitioner/accused to discharge the same. 7. In view of the facts and contentions raised by the learned counsel, this Court closely perused the material available record. The complainant examined one J.B.V.Subrahmanyam, who is Branch Manager of Complainant’s Company, before the trial Court. In his evidence, he reiterated the facts stated in the complaint and through him Exs.P.l to P.ll were exhibited and he was cross examined at length by the learned counsel for the accused. on The contention before the trial Court by the accused is that the cheque in question covered under Ex.P.4 is a postdated cheque, the said cheque was filled and without the knowledge of the aceused presented into the bank. It is also contended that the complainant company i.e., M/s.Sundaram Finance Limited has no right to take 8. any legal action against the

5 petitioner/accused and that accused has discharge the amount covered under Ex.P.4. 9. The trial Court after the evaluating the evidence placed record held that when the cheque was drawn for payment of liability to no on amount towards discharge of liability and the cheque dishonoured; that the was same was presented within prescribed period; that payee made a demand for payment of the money by giving a notice in writing to the drawer within the stipulated period and that the drawer failed to make the payment within fifteen (15) days of the receipt of the notice, the accused is liable for punishment under the N.l.Act and the trial Court after discussing the above said legal points also plaeed reliance judgments reported in K.Bhaskaran v. Sankaran Vaidhyan Balan^as well Musaraf Hossain Khan v. Bhagheeratha Engg. Ltd.%nd D.Vinod v. Shiyappa^ and after considering the entire material on record i.e., Exs.P. 1 to P. 11 and as there is no other evidence to disprove the contents in the evidence of P.W.l, the trial Court found the aecused guilty of the offence under Section 138 of N.l.Act and sentenced him to undergo simple imprisonment for a period of six (6) months and to pay on ^2001 ALT (Crt) 42 (SC) 22006 (3) SCJ 604 32006 (8) SCJ 63

6 fine of Rs.5.000/-, in default to suffer simple imprisonment for one (1) month. Aggrieved by the appeal, vide Crl.A.No.llO 10. same, the petitioner/accused filed an of 2008, before the learned Additional Sessions Judge (FTC), Bhimavaram. The learned Sessions Judge categorically held III at paragraph No. 10 of the impugned judgment that “the initial burden i to prove that there is on the complaint IS preexisting liability and in discharge of the said debt the cheque in question was issued and also held that the complainant issued Ex.P.l authorization to P.W. 1 to look all legal matters on behalf of the complainant company”. 11. The learned Sessions contention of the accused that the establish that M/s.Lakshmi General amalgamated with the complainant Sessions Judge, after elaborate discussion Judge also considered the complainant failed to Finance Limited was company. But, the learned held that, Ex.P.lO discloses that by order is with effect from 01.04.2004 M/s.Lakshmi General Finance Limited and was amalgamated to the account copy of the that the accused complainant company after amalgamation. Thereby, it can be satd that accused complainant company. Further Ex.P.ll complainant relating to the accused discloses used to pay the installments to the even

7 recognized the complainant company and is aware of the fact that M/s.Lakshmi General Finance Limited is amalgamated with the complainant company and as such he paid installments even after 01.04.2004 as born out from Ex.P.ll account copy. 12. As such, the learned Sessions Judge also found that the accused issued Ex.P.4 cheque in discharging legally enforceable debt for the preexisting liability of him. It is also found that even the accused also paid the amount to the complainant and the account company copy under Ex.P. 11 clearly goes to show that he paid installments after amalgamation of its sister concern. Therefore, the complaint has proved its contentions and to rebut the same, even the accused did not enter into witness box nor placed any record piece of paper to show that he is not liable to discharge the debt amount rather legally enforceable debt covered under Ex.P.4. or 13. Section 139 of N.I.Act enjoins the Court to presume that the holder of the cheque received it for the discharge of any debt or liability and the burden is only on the accused to rebut the said presumption. Thereby, before the trial Court the complaint established its case and both the Courts below rightly appreciated the material on record and found the guilt of the

accused under Section 138 of N.I.Act and in view of the above discussion there are no grounds put forth by the petitioner to interfere with the concurrent findings recording by both Courts below. the 14. It is settled law that the revisionai court should not appreciate the evidence or interfere with the findings of fact, unless they are perverse or unreasonable. This is one of the principles of criminal re- revision, as laid down by the Supreme Court of India in several cases. The revisionai eourt should not aet as a second appellate court and substitute its own views for those of the Court below, unless there is a clear error of law or a gross injustice in the order or proceeding of the lower court. The revisionai court should exercise its power with caution and restraint, and only in exceptional cases where there i manifest illegality or a serious miscarriage of justice. In the present case on hand, this Court does not find such error of law IS a 15. any or a gross injustice in the order or proceeding of the Court below/Sessions Court to exercise revisionai power. However, 16. now, eoming to operation of sentence is eoncerned, the learned counsel for the petitioner brought to the notice of this Court Lcucminivas a judgment of this Court reported iin Agarwal Andhra Semi V. Conductors

9 Pvt.Ltd.'^as well judgment of Hon’ble Supreme Court reported in Bir Singh v. Mukesh Kumar^, wherein at paragraph Nos. 18, 19, 28 and 29 held as follows: 18. The Appellate Court affirmed the aforesaid factual findings. The Trial Court and the Appellate Court arrived at the specific concurrent factual finding that the cheque had admittedly been signed by the respondent-accused. The Trial Court and the Appellate Court rejected the plea of the respondent-accused that the appellant- complainant had misused a blank signed cheque made over by the respondent-accused to the appellant- complainant for deposit of Income Tax, in view of the admission of the respondent-accused that taxes paid in cash for which the appellant-complainant used to take payment from the respondent in cash. 19. It is well settled that in the exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyze and re-interpret the evidence on record. were 28. In R.Vijayan vs. Baby and Another (2012) 1 SCC 260 this Court observed that the object of Chapter XVII of the Negotiable Instruments Act is both punitive as also compensatory and restitutive. It provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonour of cheque and for enforcement of 4(2006) 1 ALD CrtaOO (A.P.) 5(2019)4 SCC 197

10 the civil liability for realization of the cheque amount, thereby obviating the need for the creditor to move two different for a for relief. This Court expressed its anguish that some Magistrates went by the traditional view, that the criminal proceedings were for imposing punishment and did not exercise discretion to direct payment of compensation, causing considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case was decided”. It is also brought to the notice of this Court a judgment of the HonTDle Supreme Court reported in Meters and Instruments Private Limited v. Kanchan Mehta^, wherein at paragraph No. 18 held as follows: 17. “18. From the above discussion following aspects emerge: i) Offence under Section 138 of the Act is primarily a civil wrong. Burden of proof is on accused in view presumption under Section 139 but the standard of such proof ii “preponderance of probabilities”. The same has to be normally tried summarily as per provisions of summary trial under the Cr.P.C. but with such variation as may be appropriate to proceedings under Chapter XVII of the Act. Thus read, principle of Section 258 Cr.P.C. will apply and the Court can close the proceedings and discharge the accused on satisfaction that the cheque amount with IS ®AIR 2017 SC 4594

assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect. ii) The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court. iii) Though compounding requires consent of both parties, even in absence of such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused. iv) Procedure for trial of cases under Chapter XVll of the Act has normally to be summary. The discretion of the Magistrate under second proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the Court has jurisdiction under Section 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 IPC and with further powers of recovery under Section 431 Cr.P.C. With this approach, prison sentence of more than one year may not be required in all cases.

12 v) Since evidence of the affidavit, subject to the Court giving affidavit and complaint can be given on summoning the person examining him and the bank’s slip being prima facie evidence of the dishonor of cheque, it is any further can be read unnecessary for the Magistrate to record preliminaiy evidence. Such affidavit evidence as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes be as per Section 264 Cr.P.C. necessary, where sentence of one year may have to be awarded and 357(3) is considered compensation under Section rnadequate, having regard to the the financial amount of the cheque, capacity and the conduct of the accused or any other circumstances. 18. Considering the above authoritative as discussed interfere with the pronouncements and supra, this Court does not find any grounds to concurrent findings recorded by both the Courts below regarding conviction under Section 138 of N.I.Act to meet the ends of justice, the against the petitioner. However, petitioner/accused is directed to Rs.2,49,119/- to the complainant within pay the cheque amount of three (3) months from today, in default he shall undergo the sentence of imprisonment as well fine as affirmed by the trial Court, which was confirmed by the Appellate Court. Accordingly, the revision petitioner is

13 directed to appear before the trial court on or before 05.04.2024, to receive the sentence of imprisonment or to pay the compensation amount as fixed by this court. In case any failure on the part of the revision petitioner in appearing before the Court below as directed supra and in making the payment of compensation amount, the trial Court is free to take coercive steps to secure the presence of the revision petitioner and to execute the sentence awarded against him. With the above observations, the present Criminal Revision Case is disposed off. Copy of this order shall be marked to the trial Court and the learned Magistrate concerned can take steps against the petitioner/accused to serve the sentence, if he fails to comply the condition stated in penultimate paragraph of this order. 19. Interim orders granted earlier if any, stand vacated. As a sequel, miscellaneous applications pending, if any. shall stand closed. SD/- M. RAMESH BABU DEPUTY REGISTRAR / //TRUE COPY// SECTION OFFICER To, 1. The III Additional Sessions Judge, (FTC) Bhimavaram, West Godavari District. 2. The Judicial First Class Magistrate-cum-Principal Junior Civil Judge, Bhimavaram. 3. One CC to Sri. Raja Reddy Koneti, Advocate [OPUC] 4. One CC to Sri. Krishna L Gahaloth, Advocate [OPUC] 5 Two CCs to Public Prosecutor, Fligh Court of Andhra Pradesh at Amaravathi. [OUT] 6. The Section Officer, Criminal Section, High Court of Andhra Pradesh at Amaravati. 7. Three C.D. Copies. SSL vna f^^vseern

HIGH COURT 9 DATED:05/01/2024 f V : ORDER CRLRC.N0.368 OF 2010 DISPOSING OF THE CRIMINAL REVISION CASE lt)I> J I I \ I