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2007 Supreme(Kar) 681

Karnataka High Court
Judges : A.C.KABBIN
GOWRI CONTAINERS - Appellant
Versus
S.C.SHETTY - Respondent
Criminal Appeal 772 Of 2002
Decided On : 10/09/2007
Advocates Appeared :
C.V.Sudhindra, H.JAYAKAR SHETTY, M.D.ANURADHA

The court established that the debt was legally enforceable, and the notices of dishonour had been served within the required time, leading to the conviction of the respondents.

Headnote:

Negotiable Instruments Act - Acquittal Challenged - Section 138 - Summary

Fact of the Case:

The complainant supplied goods to the accused and received cheques in return. The cheques were dishonored, leading to a complaint under section 138 of the Negotiable Instruments Act. The accused contended that the complainant was an unregistered partnership firm and therefore the debt was not legally enforceable.

Finding of the Court:

The court found that the goods had been delivered and the cheques were issued for the amounts due as the price of the goods. The court also held that the liability was legally enforceable and that the notices of dishonour had been served within the required time.

Issues: The issues revolved around the delivery of goods, the enforceability of the debt, and the service of notices of dishonour.

Ratio Decidendi: The court held that the debt was legally enforceable, despite the complainant being an unregistered partnership firm, and that the notices of dishonour had been served within the required time.

Final Decision: The appeals were allowed, the acquittal was set aside, and the respondents were convicted for the offence punishable under section 138 of the Negotiable Instruments Act. The respondents were sentenced to pay a fine.

KABBIN, J.

( 1 ) THESE two appeals have been preferred by the complainant challenging the acquittal of the respondent for offences punishable under section 13 8 of the Negotiable Instruments Act. Since both these appeals relate to the same parties and the same transactions, this common judgment is being passed in respect of both the appeals.

( 2 ) THE case of the complainant, in brief, is as under:

"the complainant deals in fabrication and manufacture of containers and other accessories and equipments. The accused No. 1 is the proprietor of the accused no. 2, a proprietary concern. The accused No. 2 deals in agro chemicals. The accused No. 2 by its proprietor s. C. Shetty placed an order for containers with the complainant and in response to the same, the complainant supplied to the accused materials as per invoices totalling for an amount of Rs. 82,384/ -. Towards the payment of the said containers, the accused issued eight cheques. One cheque for rs. 10,000/- was encashed and seven cheques were returned un-encashed. The cheque bearing No. 062865 dated 26-06-1998 (concerned in C. C. No. 30387/1999- Criminal Appeal No. 868/2002) for a sum of rs. 10,000/- returned dishonoured with an endorsement 'insufficient funds'. Despite the legal notice dated 27. 07. 1998 the respondents having not paid the amount, they have committed an offence punishable under section 138 of the Negotiable Instruments Act. In respect of other six cheques, namely cheque bearing no. 062866 dated 30-06-1998 for a sum of rs. 10,000-, cheque bearing No. 062871 dated 04-07-1998 for a sum of Rs. 10,000/-, cheque bearing no. 062872 dated 10-07-1998 for a sum of Rs. 10,000/-, cheque bearing No. 062873 dated 16-07-1998 for a sum of Rs. 10,000/-, cheque bearing No. 062874 dated 25-07-1998 for a sum of Rs. 10,000/- and cheque bearing No. 062875 dated 30-07-1998 for a sum of rs. l2,350/- (concerned in C. C. No. 30240/1999 -Criminal Appeal No. 772/2002), since they were dishonoured as per the memo of dishonour dated 08-09-1998, the notice of dishonour was given on 14-09-1998. Though notices were served, the amount not having been paid, the accused has committed an offence punishable u/s 138 of the Negotiable instruments Act. "

( 3 ) IN each case, the complainant was examined as PW-1. The contention taken by the accused in each case was that blank cheques had been taken by the complainant as security which were later filled by the complainant; and that articles in question not having been supplied to the accused, there was no liability under the cheques. A legal point was raised by the respondent that the complainant - partnership firm being an unregistered partnership firm, in view of the provisions of section 69 (2) of the Indian Partnership Act, no suit could have been filed to recover the amount and consequently, the amounts under cheque were not legally enforceable debt or liability. The learned trial Judge acquitted the accused/respondent on the grounds that: "i) the date of service of notice had not been mentioned in the complaint, ii) D. W. 1 had denied the version of P. W. 1, iii) In the absence of documentary evidence, sole testimony of the complainant was not acceptable, iv) That the complainant firm not having been registered under the Partnership Act, the amount due was not enforceable debt or liability. Challenging that judgment of acquittal, these appeals have been preferred by the complainant.

( 4 ) SMT. M. D. Anuradha, learned counsel for the appellant submits that this is not a claim arising out of a contract, but the cheques having been issued for payment of price of goods supplied, section 69 (2) of the Indian Partnership Act has no application to the present case. As regards the observation of the learned Trial Judge that in the absence of documentary evidence, the sole testimony of P. W. 1 regarding delivery of goods cannot be accepted, she submits that non delivery of goods to the respondents had to be proved by the accused and not by the compl












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