2016 Supreme(SC) 88

SUPREME COURT OF INDIA
T.S. THAKUR, CJI., KURIAN JOSEPH, J.
Don Ayengia – Appellant
Versus
The State of Assam & Anr. – Respondents
Criminal Appeal Nos. 82-83 of 2016 (Arising out of S.L.P. (Crl.) Nos. 4517-4518 of 2014)
Decided on : 28-01-2016

IMPORTANT POINTS
Concurrent findings of trial court and the first appellate court conclusively establish the facts.
Whether the cheques issued by accused relate to debt or liability can be determined from the agreement or other documents and conduct of the parties.

Headnote:Administration of justice – Facts of the case – Concurrent findings of trial court and the first appellate court conclusively establish the facts. (Para 10)

       Negotiable Instruments Act, 1881 – Section 138 – Late respondent Nazimul Islam had received an amount of rupees ten lakhs from the complainant in connection with the agreement executed between the two – The amount was refundable within a month – Promissory note acknowledging the debt and promising to liquidate the same within one month with interest at bank rate – cheques were to be returned on payment of the amount – Cheques post dated to give the drawer one month time – Promissory note by Nazimul Islam and endorsement thereon by the respondent establish that cheques were issued for liquidating the consideration – Prosecution and conviction not improper. (Para 11, 12)

       Facts of the case:

       The Complainant/Appellant in these appeals is a partner in M/s. Ayaan Consortium. He entered into an agreement with one Nazimul Islam for construction of a multi-storeyed building over a certain parcel of land.

       The Complainant/Appellant paid to Nazimul Islam in connection with the said agreement a sum of Rs.10,00,000/- (Rupees Ten Lakhs only).

       However, the agreement did not materialise in the execution of the work in question with the result that the same was cancelled in terms of a Promissory Note dated 13th August, 2007 executed by Nazimul Islam in favour of the Complainant/Appellant. The Promissory Note, apart from cancelling the agreement, promised to pay to the Complainant/Appellant the amount of Rs.10,00,000/- received by the executant Nazimul Islam within a period of one month from the date the Promissory Note was executed. The Promissory Note further stipulated that the amount of Rs.10,00,000/- was being refunded by the executant in terms of five post-dated cheques dated 5th September, 2007, 7th September, 2007, 9th September, 2007, 11th September, 2007 and 13th September, 2007, the receipt whereof was acknowledged by the Complainant/Appellant. The Promissory Note, at the same time, mentioned that the cheques were being issued as a security and shall be returned to Nazimul Islam when the amount of Rs.10,00,000/- is paid by him within a period of one month. Interest at the bank rates was also promised to be paid on the said amount of Rs.10,00,000/-.

       All the cheques were, however, dishonoured by the bank on the ground of insufficiency of funds. A second presentation also proved abortive for the same reason. At this stage Respondent No.2-Haren Mudoi indemnified the Complainant/Appellant by acknowledging that the cheques in question were actually issued by him and handed over to Nazimul Islam vide an endorsement on the Promissory Note in which he agreed to the cheques being presented for payment after 25th September, 2007. The Complainant/Appellant accordingly once again presented the cheques for payment on 5th November, 2007 but the same were dishonoured by the bank for the third time.

       A complaint under Section 138 of the Negotiable Instruments Act, 1881 was filed by the appellant against both Nazimul Islam and Haren Mudoi. Nazimul Islam, in the meantime, passed away, and proceedings against him abated but the trial court found the Respondent-2 guilty and convicted him and sentenced him to undergo simple imprisonment for a period of one year. In addition, the trial court awarded compensation to the Complainant/Appellant in a sum of Rs.12,00,000/- to be paid within a period of three months.

       The Respondent preferred Criminal Appeal before Additional Sessions Judge, who, while upholding the conviction of the Respondent modified the sentence awarded to him.

       The High Court has set aside the conviction of the Respondent.

       Finding of the case:

       High Court erred in setting aside the conviction.

       Result: Appeal allowed.