Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2008 Supreme(SC) 1850

2009(1) Supreme 231
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
R.V. Raveendran and J.M. Panchal, JJ.
M/s. Kumar Exports — Appellant
versus
M/s. Sharma Carpets — Respondent
Criminal Appeal No. 2045 of 2008
(Arising out Special Leave Petition (Criminal) No. 955 of 2007)
Decided on : 16-12-2008

Advocates appeared:
For the Appellant :K.C. Bajaj, Sanjeev Malhotra, Himanshu Bajaj and Pradeeo Shukla, Advocates.
For the Respondent:Naresh Kaushik, Manish Kaushik, Amita Kalkal and Mrs. Lalita Naresh Kaushik, Advocates.

IMPORTANT POINT
The judicial function of imposing appropriate sentence can be performed only by the Appellate Court when it reverses the order of acquittal and not by any other court.

Headnote:(a)Negotiable Instruments Act, 1881 – Sections 118 and 139 – Presumption – Scope and ambit discussed. (Paras 9 to 11)
       (b)Code of Criminal Procedure, 1973 – Section 386(a) – Single Judge, after convicting the accused remitting the matter to the Magistrate for passing appropriate sentence – Such course unknown to law – The judicial function of imposing appropriate sentence can be performed only by the Appellate Court when it reverses the order of acquittal and not by any other court. (Para 13)
       Facts of the case :
       1. It is the case of the respondent that the appellant purchased handtufted woolen carpets from him on August 6, 1994, cost of which was Rs.1,90,348.39. The appellant issued two cheques, i.e., one cheque bearing No. 052912 dated August 25, 1994 for a sum of Rs.1,00,000/- and another cheque bearing No. 052913 dated September 25, 1994 for an amount of Rs.90,348.39 drawn on Panipat branch of Union Bank of India, for discharge of his liability. The cheques were dishonoured twice due to lack of funds in the bank.
       2.The respondent filed Criminal Complaint and prayed to convict the appellant under Section 138 of the Act.
       3.The learned Magistrate acquitted the appellant
       4. The learned Single Judge, convicted the appellant under Section 138 of the Act and remitted the matter to the trial court for passing appropriate order of sentence, after hearing the appellant and the respondent.
       Finding of the Court :
       The respondent failed to establish his case under Section 138 of the Act.
       Result : Appeal allowed.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

The primary judicial function of imposing a sentence following a conviction can only be performed by the Appellate Court when it reverses an order of acquittal. This function cannot be delegated to any other court or authority (!) (!) .
In cases involving the dishonor of cheques under the Negotiable Instruments Act, there are specific presumptions that are to be raised in favor of the complainant, such as the presumption of consideration and that the cheque was issued for discharge of a debt or liability. These presumptions are rebuttable and remain until the accused successfully proves otherwise (!) (!) .
The burden of proof initially lies with the complainant to establish that the cheque was issued for a debt or liability, but once this is established or admitted, the onus shifts to the accused to rebut the presumption by providing evidence that the consideration did not exist or that the debt was not due (!) (!) .
The scope of the presumptions under the Negotiable Instruments Act allows the accused to challenge the validity of the debt or consideration through direct or circumstantial evidence, including affidavits or documents that suggest the absence of a transaction or liability (!) .
The evidence presented by the respondent in the case indicated that no sale of woolen carpets had taken place during the relevant assessment year, which undermined the claim that the cheques were issued for such a sale. This evidence shifted the burden back to the complainant to prove the debt or consideration, which they failed to do sufficiently (!) .
The procedural approach taken by the High Court—specifically, remitting the matter for passing a sentence after conviction—was not in accordance with legal procedures. The power to impose an appropriate sentence lies with the appellate court itself following a conviction, not with the trial court or other authorities (!) .
Ultimately, the appeal was allowed, the judgment convicting the appellant was set aside, and the original order of acquittal was restored, reaffirming that the prosecution failed to establish the necessary elements to sustain a conviction under the relevant section of the Act (!) .

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JUDGMENT

J.M. Panchal, J. —

1.Leave granted.

2.The instant appeal is directed against judgment dated November 23, 2006, rendered by the learned Single Judge of Punjab and Haryana High Court, in Criminal Appeal No. 946 SBA of 2004, by which the judgment dated December 6, 2003, passed by the learned Judicial Magistrate I Class, Karnal, in Criminal Complaint No. 178 of 2001, acquitting the appellant under Section 138 of the Negotiable Instruments Act, 1881 (‘the Act’ for short), is set aside and after convicting the appellant under Section 138 of the Act the matter is remitted to the learned Magistrate to pass appropriate order of sentence.

3.Jai Bhagwan Sharma, proprietor of M/s. Sharma Carpets, the respondent herein, deals in carpets. Rajinder Kumar, proprietor of M/s. Kumar Exports, the appellant herein, is carrying on business at Panipat. It is the case of the respondent that the appellant purchased handtufted woolen carpets from him on August 6, 1994, cost of which was Rs.1,90,348.39. According to the respondent, the appellant issued two cheques, i.e., one cheque bearing No. 052912 dated August 25, 1994 for a sum of Rs.1,00,000/- and another cheque bearing No. 052913 dated September 25, 1994 for an amount of Rs.90,348.39 drawn on Panipat branch of Union Bank of India, for discharge of his liability. The case of the respondent is that the cheques were deposited in the bank by him for encashment, but those cheques were received back unpaid with remarks “insufficient funds”. It is the case of the respondent that the fact that the cheques were dishonoured for insufficient funds was brought to the notice of the appellant and on the request of the appellant, the cheques were again presented for encashment in the bank on January 5, 1995, but they were again dishonoured due to lack of funds in the account of the firm of the appellant. What is claimed by the respondent is that under the circumstances he had served statutory notice dated January 19, 1995 calling upon the appellant to make payment of the amount due but neither the appellant had replied the said notice nor made payment of the amount due. The respondent, therefore, filed Criminal Complaint No. 178 of 2001 in the court of the learned Judicial Magistrate 1st Class, Karnal and prayed to convict the appellant under Section 138 of the Act.

4.On service of summons the appellant appeared before the Court. His defence was that the bill produced by the respondent indicating sale of woolen carpets was a fictitious one and that blank cheques with his signatures were taken from him by the respondent to enable the respondent to purchase the raw material for him. According to the appellant the cheques were in the form of advance payment for supply of carpets, but the respondent had failed to deliver the goods to him. The appellant alleged that the respondent had stopped manufacturing carpets and as the cheques were not issued in discharge of any liability, he was not liable to be convicted under Section 138 of the Act.

5.In order to prove his case the respondent examined himself as CW-3 and produced the cheques dishonoured at Ex. CW-2/A and CW-2/B, statutory notice at Ex. C-4, carbon copy of bill at CW-2/C, etc. He examined two witnesses to prove the presentation and dishonour of the cheques. No other witness was examined by him in support of his case pleaded in the complaint against the appellant. The appellant examined himself to substantiate his defence as DW-1. He also examined one Mr. Om Prakash, serving as a clerk in the Sales Tax Department, as DW-2, who stated before the Court that the respondent’s firm had filed sales tax return for the Assessment Year 1994-95 declaring that no sale or purchase of woolen carpets had taken place and, therefore, no sales tax was deposited. The said witness also produced an affidavit filed by the respondent as Ex.D-1 wherein the respondent had stated on oath that no sale or purchase of woolen carpets had taken place during the Assessment Year 1994-95

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2008 Supreme(SC) 1850

IMPORTANT POINTThe judicial function of imposing appropriate sentence can be performed only by the Appellate Court when it reverses the order of acquittal and not by any other court.

IMPORTANT POINT
The judicial function of imposing appropriate sentence can be performed only by the Appellate Court when it reverses the order of acquittal and not by any other court.