In Ghureg Lat v. State of tlttar Prad.esh

THE HON'BLE SRI JUSTICE E.V.VENUGOPAI, QEIIEINAI, A?PEAL No'l6ZQ_qf 2QlE JUDGMENT: This Criminal Appeal is filed by the appellant/complainant under Sections 374(2) of Cr.P.C. assailing the Jr-rdgment datecl 05.11.2015 passed in Crl.A.No.499 of 2013 passed by the learne<i II Additional Metropolitan Sessions .Iudge, H)rderabad, whereby, the sentence of conviction impost:d against respondent Nos. i and 2/accrrsed Nos.1 and 2 uide Judgment clated 17.1O.2O12 in C.C.No.l03 of 2OLl (old C.C.No.21 of 2010) on the file of the Special Magistrate V[, Hyderabad, rn,as set aside ancl zrcquitted them for the offence under Section 138 of the Negotiable Instruments Act, 1881.

2. For the sal<e convenience, the appellant herein will be referred as complairrant alncl rc'spondent Nos.1 and 2 will be referred as accused Nos.1 and 2, as they are arraigned belore the trial Court.

3. The brief backdrop of the instant case is as follou,s a) the cornplainant and accused Nos.2 and 3 and two other persons, namel5,, Md.Aijaz and Syed Ali Akber have c<>nstituted the partnership firnr urrder the name and style as CENTURY 2l i.e., \ accused No.l ancl that they have purchased the land admeasuring acs.\2.12 guntas in Sy.No. lg3/A, 196, LgT,IgL,Ig4,,t95, l9g & 200, situated at Palgutta village, Chevella Mandal, Ranga Reddy District, to 2 develop and convert the land into housing plots and that all the partners collectively developed the said land and converted into housing plots. Subsequently, differences arose between partners i.e., accused Nos.2 and 3, complainant, Md.Aljaz and Syed Ali Akber and that the complainant and two other persons wanted '' to retire from the partnership firm i.e., from accused No.1 - Firm. Accordingly, they have entered into a Memorandum of Understanding, dated 03'07'2008, betrveen accused Nos.1 to 3 as First Party and complainant and two other partners as Second PartY. b) As per paragraph No.4 of the Memorandum of understanding, dated O3.O7.2OO8, in view of their retirement, accused Nos'2 and 3 have agreed to pay an amount of Rs.1,65,O0,000/- (Rupees one crore and Sixty Five Lakhs only) towards the amount invested and for the services rendered by them to the partnership firm and that accused Nos'2 and 3 have issued. 12 cheques to the complainant and two other partners duly signed by accused No.2 in the name of accused No.l and out of 12 cheques, three cheques bearing Nos.133433, dated 26.12.2008 for Rs.15,OO,O0O/-; 133435, dated 26.02.2OO9 for Rs. 2O,OO,000/- and 133438, dated 26.o5.2OOg for Rs.5,oo,0oo/- were issued to the complainant towards his retirement, investment and service rendered by him to the partnershiP firm. J c) The complainant has further submitted that <:heque bearing No.133433, dated 26.12.2OO8 for Rs.15,00,0OO/- \\'.r:; presented in HDFC Bank and tl-re same rn'as dishonoured for "insuffici,snl funds" and that as per the instructions of the accusecl Nos.2 zrnd 3, he has presented the said cheques ir-r HDFC bank, Hyderabad zrnd again the same dishonoured u,ith an endorsement "funds instrfficient" uide cheque return memos, clated 23.O7.2OO9. cl) 'l'heref ore the complainant got issued legal notice dated

17.O8.2OO9 calling upon the accused Nos.2 and 3 to p{ry Rs.25,O0,000/- torvards the chequc amounts covered under Exs.P.2 and P.4 cheques ancl the same was served on accused Nos.2 and 3 on

19.08.2009 ilnd notice sent to accused No.l was returned with an endorsement "left". Bven after receipt of the said notice, accused Nos.2 and 3 did not choose either repay the said amount or to give any reply.

4. To prove the case of the complainant, he got examined himself as PW.l and got marked Bxs.P.l to P.l1 i.e., Ex.P.l Memorandum of Understanding, dated 03.07.2008; Ex.P.2 is the cheque bearing No.133435, datr:d 26.02.2009; Ex.P.3 is cheque return memo; Ex.P.4 is cheque bearing No.133438, dated 26.05.2009; Ex.P.li is the cheque return memo; Ex.P.6 is the legal notice; Exs.p.7 and p.8 are the acknowledgments; Ex.p.9 is the registered post slil>; Ex.10 is the registered post acknowledgment and Ex.p.l I is ttre certificate of 4 posting. To disprove the contention of the complainant, accused No-2 examined himself as DW.1 and got marked Bx.D.1 agreement of sale- cum-General Power of Attorney, dated 2l -Ll '2OO9. S. After following the due procedure and on consideration of the entire evidence both oral and documentaty, learned trial Court recorded the conviction against the accused and sentenced accused Nos.2 and 3 to undergo rigorous imprisonment for a period of six (6) months each and also directed accused No.1, represented byaccused No.2 to pay fine of Rs.9,O0,OOO- and accused Nos.2 and 3 shall pay fine of Rs.8,OO,O0O/- cach Feeling aggrieved and dissatisfied with the findings of thc learned

6. trial Court, accused Nos.l and 2 have preferred an appeal uide Crl.A.No.499 of 2Ol3 challenging the Judgment dated 17.10.2012 in C.C.No.1O3 of 2OlL (old C.C.No.2L of 2010) on the file of thc Special Magistrate VI, Hydcrabad. After considering the rival submissions made by learned counsel appearing for either side and on careful examination of the material available on record, learned Sessions Judge set aside the Judgment of the learned trial Court and also acquitted them for the said offen ce uid"eJudgment dated 05. 1 1 .2015 in Crt.A.N o.499 of 20 13.

7. Being aggrieved with the acquittal of accused Nos.l and 2, tt:re complainant has preferred the present appeal on the following ground that learned Sessions Judge erred in misconstruing the evidence on I I I I t I 5 record and the e\iidence of PW.1 which clearly makes out. a case against the accused and also erred in holding that the complainant has miserably failecl ir-r establishing the liability on the part. of the accused by ignoring the documentary evidence, more partir:11lsply, Ex.P.1 Memorandum of Understancling. Further, learned Sessions Judge failed to consider that the accused could not rebut the presumption and discharge their burclen of proof be-yond reasonable dc,ubt. Therefore, prays this Court to set aside the impugned Judgment and confirm the Judgment dated 17.1O.2O12 passed by the learned trial Cr>urt.

8. Heard learned counsel for thc appellant and Mr.E.Ganesh, learned Assistant Government Pleader appearing for respondent No.3 - State.

9. In cases of acquittal, the Hon'ble Supreme Court in Raui Sharma a. State (Gouernment of Ncr of Dethi) a.nd anotherl. held that while dealing with an appeal against acquittal, the appellate court has to consider whether the trial Court's view can be termed as a possible one, particularly when evidence on record has been analysed. The reason is that an order of acquittal adds up to the presumption of innocence in favour of the accused. Thus, the appellate court has to lte relatively slow in reversing the order of the trial court rendering acquittal. ( 1 (2022) 8 Supreme Court Cases 536 6

10. In Ghureg Lat v. State of tlttar Prad.esh2 the Hon'ble supreme Court after referring to several Judgments regarding the settled principles of law and the po\ /ers of appellate Court in reversing the ordcr of acquittal, helcl at para 7O, as follows: "70. ht. the tight of the aboue, the High Courl"and other appellate Courts shoutd follow the well-settled principles crystallized bg number of Judgrnents if it is going to ouerntle or othentise disturb the trial court's acquittal:

1. The appellate court mag only ouemtle or otherutbe disturb the triat court's acquittal if it has "uery substantial and compelling reasons" Jor doin-cy so. A number of instances arise in which the appellate court would haue "uery substantial and compelling rea"sons" to discard the trial court's decision. "very substantial and compelling reasons" exist when: i) The trictl court's conclusion with regard to the facts is palpablg Luronq: ii) T'he trial court's decision was based on an erroneous uiew of law; iii)Ttrc tricLl court's judgment is likely to result in "graue miscarriag e of justice " ; iu)The entire approach of the trial court in dealing with the euidence was patently itlegal; unreasonable; u) The triat court's iudgment u)as manifestly unjust and ui)The trial court hcts ignored the euidence or misread the material euidence or has tgnored material doutments like dging declarations/ report of the batlistic experT, etc. uii)Th.is lisf is intended to be illustratiue, not exhaustiue. 2. TfLe appellate court rnust alwags giue proper weight and consideration o the findings of the trial court.

3. If two reasonable uiews can be reached- one that leads to High Courts/ appeltate courts acquittal, the other to conuictton must ntle irt fauour of the accused." -the 1 1. Before entering into the merits of the case, it is apt to note that the findings of the learned Sessions Judge while acquitting accused Nos.l ar,'d 2 and the same are extracted below: , (2008) 10 Suprerne Court Cases 450 7 "25.Whereas the Sl.Nos.2 and 3 of the Second party have also pursued the ma.tter with the forest department so as to officialll. hitvc an access road from the forest land n.t only to the venttrre of the First and the Second party br-rt also the access roacl to Mr.Sufi land also. As such both have lg,reed to bear hall expenditure and in the process the second part-r, have aiready invested the re quirecl amount erkrng with Mr.Sufi and the matter is at the stage of finitlization, therefore, in vie'*, of payment airead_\, made b-t, the second party will <lbtain the necessary proceedings liom the concerned department ancl further expenciiture sharll be born by the first party ancl Mr,Sttfi equally from the clatc of this document.

26.In view of the above two clauses Ex P.l imposcs liabilities on tloth the parties and more over the se<;ond party admitteclly participated in developmental activities irt the site who transacted with the Rafathullah t(han who has to execute a sale deed in respect of 3O feet and adrrittedly he executecl a sale deed for 2O roacl ar-rcl the total roacl is: 5O and the accused are permitted to use the road as of 5rl' without any objection till the execution of sale deed by lt.lfathullah Khan for the remaining 3O feet road and this liability is to be fulfrlled by the second party to Ex.P.1 and P.Wl is one of the second party and more over the second party dealt with the forest officials and they have to get the permissiorr lrom the Forest Officials to have access road from the forest tand but surprisingly P.W.I admitted that no sale cleed was; executed by Rafathullah Khan in terms of Ex.P.l and also admitted that Forest Officials did not provide the permission for the road, which clearly suggest that p.W.l along with other two partners Mohd. Khaleel and Syed Ali Akber failed t. honour E x.Pl terms on this part and more over the cheques under Ex.P.2. Ex.P4 and Ex.P.6 respectively were disho,rured on 8

23.07.2OO9 which clearly suggested that these are the post dated cheques and deposited on 23.O7.2OO9, though it contains the dates as 26.01.2OO9, 26.03.2009 and 26.05.2009, there is no explanation from the P.W.1 why he failcd to present the chcques on the respective dates, which clearly suggest that there must be some dispute took place between the P.W.1 and accused and Ex.D.l Suggest that the road under 20' feet was transferred to third party which clearly suggest the violation of the contractual obligation under Ex.P.1 and to that extent, the learned counsel for the Appellants have relied upon the above said 1 to 12 rulings and more particularly in ruling in 2O 14 Law Suit (SC) 252, dated 07.O4.2O14 between Indus Airwags Put Limited and others a. Magnutn Aviation Pvt. Limited and onother and the samc principle is followed is applied in rulings 2OlO Cri.LJ 1061 between Venko;tesh Bhot u. Rohidas Shenog and 1997 Cri.L.J.1942 between M/s.Swastik Coasters Put Ltd., a. Deepak Brothers and others, which clearly supports case o[ the appellants and the respondent miserably failecl to prove the liability on the part of the Appellants and the discussion regarding other rulings not necessary and the rulings relied by the Respondent suggested the presumptions regarding 139 of Negotiable Instruments Act when there is a proofl regarding debt or other liability. As far as this case is concerned, thc Respondents successfully proved the bouncing of the cheques, but failed to prove the liability on the part of the accused/Appellants, more particularly which is a contractual in terms of Ex.D.1 and the respondent failed to honour the terms and though the liability appears ostensibly but it is coupled with obligation on the part of the Respondent. But the Respondent without fulfilling obligations on his part claiming cheque amounts which cannot be permitted when the obligations are reciprocal and the criminal liability does not arise till the fulfillment of the 9 obligations by the Respondent has rightly submitted by the Learned Counsel for the Appellants and there is no force in the arguments submitted b-y the learned Counsel for the Responclent to that extent and aclmittedly ar l:itration proceedings are pending betu,ecn the parties ancl thr. irmoltnt covered under Ex.P.2 ancl Ex.P.4 are subject natter of arbitration proceedings. Accordingly the considerr:ct opinion of this court is that the trial coLrrt miserably failecl to consider the same and the findings recorded by the trial court for the offence under section 138 of Negotiable Instruments Act is erroneous is liable to be set aside. Accordingly tlrt:se two points are answered."

12. It was apparent from the record that complainant, accused Nos.2 and 3 and two others have constituted a partnership lirne i.e., accused. No.1 and have purchased the land admeasuring Acs. +2.r2 guntas, situated at Palgutta Village, Chevella Mandal, Rangaredd.), District, with an intention to convert the same into house plots. They hia.ve collectively developed the said land. For time being, due to differcnce of opinions, the complainant and two other partners were intenclecl to retire from accused No.1 - firm. Upon which, they all have enterec into a Memo of Understanding (Ex.P.1), by dividing into two groups, on one side accused Nos.l to 3 and the other, complainant and two rtther partners, and they have agreed for all the terms and conditions rnt:ntioned in the said Memo of Understanding. In this connection, accused Nos.1 to 3 have to pay an amount of Rs.l,65,00,0oo/- (Rupees one crore and sixty five lakhs only) to the complainant and trvo others towards their \ 10 investment and service rendered by them. In compliance with the terms of the said Memo of Understanding, accused Nos.2 and 3 have issued cheques in favour of the complainant and others. The case of the complainant in the present subject matter is that out o[ three cheques issued by accused Nos.2 and 3, two chcques were dishonoured with an endorsement'insufficient funds'.

13. The contention of the complainant is that accused Nos.1 to 3 did not pay the amount agreed in the said Memo of Understanding and they are liable for punishment under the provision of the Negotiable lnstruments Act, 1881. It is the specific contention of accused Nos.l and,2 that the complainant and two others have not complied with the terms of the said Memo of Understanding. Therefore, they stopped the payment of the said cheques. L4. Learned Sessions Judge has rightly observed that the complainant successfully proved the bouncing of the cheques, but failed to prove the liability on the part of accused Nos.l and 2, more particularly, which is a contractual in terms of Ex.D.l and the complainant failed to honour the terms and though the liability appears ostensibly but it is coupled with obligation on the part of the complainant. But the complainant without fulfilling obligations on his part claiming cheque amounts which cannot be permitted when the obligations are reciprocal and the criminal liability does not arise till the fulfillment of the obligations by the Complainant. t t :i l.:::] 11 15' After metict-tlous analvsis of the material found in the record and also viewed from any angle, this cour[ is of the consider.e,l opinio, that thc findings of the learned Sessions Juclge nre well re,sonec :rncr the interference of this court is unwarranted. Therefore, this appcar is liable to be dismissecl 16' In viev' of the discussio. made hereinbefore, trris appe:rl is dismissed and the impugned Judgment dated 05.I I .2o1:> passecl bv the learned Sessions Judge is hereby confirmed Miscella-neolts petitions pending, if an;., in this Crirninal Appeal shall stand dismissed. //TRUE COPY// SD/- V KAVITHA PUTY REGISTRAR TION OFFICER To,

1. The ll Additional Metropolitan Sessions Judge, Hyderabad 2. One CC to SRl. O KAILASHNATH REDDY Advocate IOPUC] 3. one cc to THE PUBLIC PRosEcuroR, High court for the state of Telangana, Hyderabad. [OUT]

4. Two CD Copies ABK ry. I HIGH COURT DATED i28,lOT12025 a ORDER CRLA.No.670 of 2016 r,tt SIz1 $ t, 21mum DISMISSII{G THE CRLA l,\ L t