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1998 Supreme(AP) 851

Andhra Pradesh High Court
Judges : K.B.SIDDAPPA
Voruganti Chinna Gopaiah - Appellant
Versus
Godavari Fertilizers, Chemicals - Respondent
Decided On : 11-20-98

Headnote:NEGOTIABLE INSTRUMENTS ACT - Sec.138 - Dishonour of Cheque - Complaint filed before Magistrate - Accused convicted - Accused filing appeal against conviction and complaint filed Revision on question of adequacy of sentence passed - Contention that cheque was replaced by agreement under which complainant agreed to receive cheque amount in instalments - Cheque issued by accused in discharge of debt and subsequently wrote letter and that was acted upon - Lower Court applied rule of thumb and erroneously came to conclusion that once cheque issued and it is subsequently dishonoured, offence under Sec.138 is made out - When complainant agreed for terms of agreement by giving replies in favour of accused, it cannot be held that accused is guilty under Sec.138 - Judgment and sentence of Lower Court set aside.

K. B. SIDDAPPA, J.

( 1 ) THE Criminal Appeal is called from the file of Metropolitan Sessions Judge, Vijayawada. It is filed by the accused against the Judgment and sentence passed in CC No. 329 of 1991. The Criminal Revision Case is filed by the complainant on the ground that the sentence passed in CC No. 329 of 1991 is not adequate.

( 2 ) FIRST of all I would like to deal with the Criminal Appeal.

( 3 ) THE brief facts of the complaint are as follows:the Complainant who is the 1st respondent, is represented by its Accounts Officer Mr. P. S. Rao. It is stated that the 1st respondent-company is registered under the Companies Registration Act. It is a joint venture of the Government of Andhra Pradesh and IFFCO. The Company manufactures DAP and also deals in other composite fertilizers like Urea, Calcium etc. It has its Regional Marketing office at 40-7-27/a/2, Mogalrajapuram, Vijayawada. Accused No. 2 is representing the Accused No. 1 Rice and Flour Mill. They are doing business in fertilizers and pesticides. They are having a continuous running account with the Complainant-Company. The accused felt in arrears to the tune of Rs. 10,99,899. 90 ps. On 5-10-1991, Accused No. 1 gave a cheque for the said amount drawn on State Bank of Hyderabad, Huzurnagar in favour of the complainant. The complainant presented the cheque on the same day with their Banker Andhra Bank, Labbipet, Vijayawada to send the same for Collection to State Bank of Hyderabad, Huzurnagar. The Cheque was returned by the State Bank of Hyderabad, Huzurnagar with an endorsement "funds Insufficient". This fact was informed to the complainant by its Banker on 14-10-1991 with debit advice charges of Rs. 1660. 00. Immediately, the complainant gave a phonogram to Accused No. 1 on 14-10-1991 informing about the dishonour of the cheque and requested to arrange a draft for the same. On 21-10-1991, the complainant demanded the accused by Registered letter, informing about the dishonour of the cheque, and the amount due within 15 days from the date of receipt of the letter. The said letter was acknowledged by the Accused No. 2 on 29-10-1991. Accused No. 1 also acknowledged the same on 1-11-1991. Inspite of that no amounts are paid. According to the complainant, the accused committed the offence punishable under Section 138 of Negotiable instruments Act. Hence the complaint.

( 4 ) TO prove their case the Prosecution examined PW1 and marked Exs. Pl to P7. Nobody was examined on behalf of defence, but Ex. D1 was marked.

( 5 ) CONSIDERING both oral and documentary evidence, the lower Court held that the offence punishable under Section 138 of Negotiable Instruments Act is made out and sentenced Accused No. 2 who is the Proprietor of Accused No. 1 Rice and Flour Mill, to undergo Rigorous Imprisonment for a period of one month and to pay a fine of Rs. 5,000. 00, in default, to undergo Imprisonment for one month.

( 6 ) AGAINST the said Judgment and sentence the present Appeal is filed.

( 7 ) THE complainant, as stated earlier, filed Criminal Revision Case on the question of adequacy of the sentence passed.

( 8 ) SINCE both the matters are connected they are being disposed of by this Common judgment.

( 9 ) THERE is no dispute in the fact that the accused are the customers of the complainant. The issuance of the cheque (Ex. Pl dated 5-10-1991) in favour of the complainant in respect of the amount due on the running account is not disputed. The fact of dishonour and intimation under Ex. P2 dated 14-10-1991 and Ex. P3 dated 8-10-1991 and the subsequent Phonogram Ex. P4 dated 14-10-1991 are not in dispute. It is also not in dispute that the complainant issued Ex. P5 dated 21-10-1991 (office copy of the notice issued by the complainant ). The said notice was received by the accused under acknowledgment Ex. P6 dated 22-10-1991.

( 10 ) THE learned Counsel appearing for the appellant/a2 submitted that though there was outstanding amount and though Ex. P1 cheque was issued towards payment of t







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