Liability under the Negotiable Instruments Act for dishonor of cheques issued in payment for supplied goods.

The brief facts of the case are as follows:-

1. The respondent herein / complainant had filed a case in S.T.C.No.1459 of 2007, on the file of Special Metropolitan Magistrate, Chennai, against the revision petitioners / second accused and nine others stating that the complainant is the dealer and supplier of iron and steel. The first accused is a company incorporated under the Companies Act and is represented by the second accused, who is looking after the affairs of the company at Chennai. The accused 2 to 5 are the Directors of the 1st accused company, as such, they are incharge and responsible for the day to day affairs of the first accused company. As per the instructions of the accused 2 to 5, this complainant had supplied the material as per the orders placed by the accused 2, 6, 9 and 10. The accused 7 and 8 are the persons who had coordinated the business transaction on behalf of the first accused company. The second accused with the consultation of the accused 6, 9 and 10 placed orders on various dates for supply of goods.

2. In pursuance of such an order, the goods were supplied on 16.03.2002, as per delivery challan and invoice was raised for a sum Rs.2,22,596/-. The cheque was issued by the second accused on behalf of the first accused company and signed by the accused 9 and 10, as authorized signatories. The cheque was presented to the complainant's bank for collection and the same was returned on 03.10.2003, with an endorsement "exceeds arrangements". Hence, the complainant sent a legal notice on 15.10.2003 and the same was received by some of the accused and some of the accused did not receive the notice. Even after the receipt of the legal notice, the accused neither paid the cheque amount nor sent any reply. Hence, the case has been filed under Section 138 r/w 141 of the Negotiable Instruments Act, against the accused.

3. The accused pleaded not guilty and hence, the case was proceeded with. On the side of the complainant, one witness was examined as P.W.1 and 15 documents were marked as Exs.P1 to P15, viz., ExP1-registration certificate of complainant firm dated 12.07.1990, Ex.P2-partnership deed dated 11.06.1995, Ex.P3-invoice dated 02.08.2001, Ex.P4-delivery challan dated 02.08.2001, Ex.P5-covering letter dated 13.09.2001, Ex.P6-Dena bank cheque No.658950 for a sum of Rs.1,67,328/-, dated 25.05.2003, Ex.P7-Dena Bank cheque No.658943 for a sum of Rs.2,46,339/-, dated 25.05.2003, Ex.P8-Dena Bank cheque No.658949 for a sum of Rs.4,83,298/-dated 25.05.2003, Ex.P9-return memos dated 28.10.2003, Ex.P10-debit advice dated 29.10.2003, Ex.P11-legal notice by complainant counsel dated 31.10.2003, Ex.P12-acknowledgment cards, Ex.P13-returned cover from R.Krishnan, Ex.P14-Minutes of Meeting between complainant company and A-1 Company, Ex.P15-copy of the Annual return from A-1 company dated 07.08.2001. On the side of the defence, 9 witnesses were examined, viz., D.W.1-R.V.Raghavan, D.W.2-M.K.Jothi, D.W.3-Senthil Kumar, D.W.4-Jayant Bhattacharjee, D.W.5-G.Ramesh, D.W.6-Rajkumar Menon, D.W.7-Jothi Nathan, D.W.8-Francis Xavier and D.W.9-Saikat Basu and 24 documents were marked as Exs.D1 to D24, viz., Ex.D1-reply notice by A-2 counsel, Ex.D2-reply notice by A5 counsel, Ex.D3-certified copy of 18(1) settlement, Ex.D4-copy of resignation letter of A2 sent to A-1 company, Kolkatta, dated 12.09.2003, Ex.D5-statement of account by Dena Bank for the period from 01.01.2002 to 14.04.2008, Ex.D6-letter to Provident Fund Office dated 19.06.2008, Ex.D7-certified copy of complaint before the Magistrate at Kolkatta, Ex.D8-letter by counsel of A-1 Company to A-2, Ex.D9-letter by A1 company to ROC dated 10.06.2008, Ex.D10-General Power of Attorney dated 27.07.1999, Ex.D11-salary slip of accused G.Ramesh, Ex.D12-reliving order of accused G.Ramesh, dated 11.09.2003, Ex.D13-Memorandum and Articles of Association of A-1 company, Ex.D.14-relieving order of M.Rajkumar Menon, Ex.D15-report by the Commercial Tax Officer regarding A-1