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Accused stands discharged if he pays the amount of interest and costs of litigation incurred by the complainants: Bombay High Court.

On Wednesday, the 3rd of August, in the year 2022, the Bombay High Court passed a judgment in favour of the accused as long as he pays the dues, along with interest as well as the cost of litigation incurred by the complainants. This judgement was passed in the case of Karmayogi Shankarraoji Patil & Ors. vs. Ruia & Ruia Pvt. Ltd. & Ors.( Criminal Writ Petition No. 5208 Of 2017) and this case was presided over by a bench consisting of The Honourable Mr. Justice N. J. Jamadar.

FACTS OF THE CASE:

In this petition, the challenge is induced against the orders passed by the learned Additional Sessions Judge of Greater Mumbai, in which he was persuaded to dismiss the Revision Applications of the petitioners and affirm the orders dated 4th January of 2016, passed by the learned Metropolitan Magistrate, of the 33rd Court, Ballard Pier in Mumbai. The Metropolitan magistrate passed a judgment against the petitioners and charged the petitioners for the offence punishable under Sections 138 read with 141 Negotiable Instruments Act, 1881.

The complainant is a Company engaged in trade of various commodities such as sugar, molasses, alcohol, and chemicals. One of the Petitioner is a Cooperative Society, and the other three petitioner form the management of the same. This society is registered under the Maharashtra Co-operative Societies Act, 1960 and they run a sugar factory.

The petitioner had entered into an agreement with the respondent to supply and sale ‘A’ grade molasses having TRS 50% and above for industrial/export/liquor purpose. The respondent agreed to pay an advance amount of Rs.3,49,65,000 to the accused. Under the terms of the agreement, the delivery of the molasses, as per schedule, was the essence of the contract and in the event of default in the delivery of the specified quantity of molasses, for the quantity short supplied the price was to be reduced by Rs.500 per MT for the month of November 2014, Rs. 750 for the month of December, 2014 and Rs.1000, for the month of January, 2015. To cover the advance payment of Rs.3,49,65,000, the petitioner had drawn Seven cheques in favour of the respondent payable on 21th October, 2014.

There was failure on the part of petitioner to supply the molasses in accordance with the terms of the contract. There was correspondence exchanged between the parties and in lieu of the seven cheques, referred to above, the petitioner had drawn four cheques for Rs. 50,00,000, each, payable on 15th January, 2015. Eventually, those four cheques were also dishonoured after which the accused gave a proposal to settle the dispute by incorporating the terms and conditions in a letter dated 4th June, 2015 (the letter of settlement). The petitoner, while acknowledging the debt of Rs.2,62,79,654, agreed to pay a sum of Rs.1,57,75,607 towards the full and final settlement of the complainant’s claim. Under the terms of the said settlement, the accused had drawn cheque bearing a sum of Rs.50,00,000 payable on 20th June, 2015, a cheque for a sum of Rs.42,75,607 payable on 10th July, 2015 and a cheque for an amount of Rs.65,00,000 payable on 31st July, 2015 on State Bank of India, Branch, Indapur. The accused further agreed that in the event of default in payment of any of the installments, the entire amount of Rs.2,62,79,654 would become due and payable and the complainant would be entitled to initiate appropriate legal action to recover the entire due amount.

The complainant received payment of a sum of Rs. 50,00,000 on 17th June, 2015 via RTGS. The accused paid a further sum of Rs.23,00,000 via RTGS in between 16th July, 2015 to 24th July, 2015. However, the cheque drawn for a sum of Rs.42,75,607 was returned “unencashed” on 27th July, 2015. The Cheque drawn for Rs.65,00,000 was also dishonoured on presentment on 11th August 2015. The complainant thus addressed demand notices calling upon the accused to pay the amount covered by the dishonoured cheques as well as the entire due amount, agreed to be paid in accordance with the terms of the settlement. Despite the service of notices, the accused committed default in payment. Hence, the complaints.

JUDGEMENT:

The petitions stand allowed as long as the following terms are fulfilled that is the petitioners shall deposit the amount of interest and costs of litigation as indicated in the judgement of the court within a period of three weeks from the date of this order in the Court of the learned Metropolitan Magistrate. If the accused deposit the aforesaid amount within the said period, both the complaints shall stand disposed as closed under Section 143 of the Negotiable Instruments Act, 1881 read with Section 258 of the Code of Criminal Procedure. In the event of default, the complaints would proceed in accordance with law.

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 JUDGEMENT REVIEWED BY TANAV ZACHARIAH.

Click here to view the Judgement

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