ANIL SACHAR & ANR. versus M/S SHREE NATH SPINNERS P. LTD. & ORS. ETC.

Citation: [2011] 9 S.C.R. 328 · Decided: 19-07-2011 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Disposed off
Cited by 1 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
B 
c 
[2011) 9 S.C.R. 328 
ANIL SACHAR & ANR. 
v. 
M/S SHREE NATH SPINNERS P. LTD. & ORS. ETC. 
(Criminal Appeals Nos. 1413-1414 of 2011) 
*JULY 19, 2011 AND AUGUST 17, 2011 
[DR. MUKUNDAKAM SHARMA AND 
ANIL R. DAVE, JJ.] 
Negotiable Instruments Act, 1881: 
ss. 138 and 139 - Presumption in favour of holder of 
cheque - Cheques issued by one of the two sister concerns 
for dues towards the goods supplied to the other of the said 
concerns - Dishonour of cheques - Complaints - Acquittal 
0 
of accused on the ground that goods had been supplied to 
one company while cheques were issued by the other and 
there was no liability of the company issuing the cheques -
HELD: The complainants had established before the trial 
court that there was an understanding among the 
complainants and the accused that in consideration of supply 
E of goods to one company, the other was to make the payment 
- This understanding was on account of the fact that both the 
companies were sister concerns and their Directors were 
common - In the circumstances, it has been proved that in 
consideration of supply of goods to one sister concern, the 
F other had made the payment - The tnal court ought to have 
considered provisions of s. 139 of the Act, which make it clear 
that there is a presumption with regard to consideration when 
a cheque has been issued by the drawer of the cheque - Of 
course, the presumption refeffed to in s. 139 is rebuttable -
G In the instant case, no effort was made for rebuttal of the 
presumption and, therefore, the presumption must go in 
favour of the holder of the cheques - Accused held guilty of 
the offence punishable u/s 138 - On the date of hearing the 
* 
Conviction recorded on 19.7.2011 and sentences passed on. 17.8.2011. 
H 
328 
; 
ANIL SACHAR & ANR. v. SHREE NATH SPINNERS 329 
P. LTD. & ORS. ETC. 
accused on question of sentence, the records indicated that A 
one of the accused had died - Therefore, appeal as regards 
him stands abated - In the circumstances, imposition of a 
fine of Rs.10,00,0001- on the other accused payable to the 
complainants as compensation would meet the ends of justice 
- Ordered accordingly - Code of Criminal Procedure, 1973 B 
- s.235(2). 
The appellants filed complaints against the 
respondents for offences punishable uls 138 of the 
Negotiable Instruments Act, 1881 for dishonour of C 
cheques issued by respondent no. 3, as Director of M/s 
'ATO' Ltd. towards the dues of M/S 'SNS' P. Ltd. It was 
the case of the complainants that both M/s SNS P. Ltd. 
and Mis ATO Ltd. were sister concerns with common 
directors and respondent no. 3 who signed the cheques 
as Director of Mis 'ATO' Ltd. was also the director of Mis D 
'SNS' P. Ltd. One of the accused died pending trial. The 
trial court acquitted the accused holding that the goods 
had been supplied by the complainants to Mis 'SNS' P 
Ltd., but cheques had been issued by Mis 'ATO' Ltd. and 
not by 'SNS' P. Ltd. and as Mis 'SNS' P. Ltd. and Mis 'ATO' E 
Ltd. were two distinct entities, there was no liability of Ml 
s 'ATO" Ltd. and, therefore, dishonour of the cheques in 
question would not make the signatory of the cheques 
from the account of Mis 'ATO' Ltd. liable under the 
provisions of the Act. The appeals having been F 
dismissed by the High Court, the complainants filed the 
instant appeals. 
Recording the conviction, the Court 
HELD: 1.1. The complainants had established before G 
the trial court that there was an understanding among the 
complainants and the accused that in consideration of 
supply of goods to Mis. 'SNS' P. Ltd., Mis. 'ATO' Ltd. was 
to make the payment. This understanding was on 
account of the fact that both the companies were sister H 
330 
SUPREME COURT REPORTS 
[2011] 9 S.C.R. 
A 
concerns and their Directors were common. In the 
circumstances, it has been proved that in consideration 
of supply of goods to M/s. 'SNS' P. Ltd., M/s. 'ATO' Ltd. 
had made the payment. These facts are very well 
reflected in the statement made in the complaints and in 
B 
the evidence by the complainants which have not been 
controverted. The trial court, therefore, was not right 
when it came to the conclusion that there was no reason 
for Mis. 'ATO' Ltd. to give the cheques to the 
complainants. [para 14] [336-F-H; 337-A-B] 
c 
D 
lndowind Energy Ltd. v. Wescare (India) Ltd. and Anr. 
2010 (5) SCR 284 = 2010 (5) SCC 306; and Rahul Builders 
v. Arihant Fertilizers & Chemicals and Anr. 2007 (11) 
SCR 951 =2008(2) sec
Excerpt shown. Read the full judgment & AI analysis in Lexace.