- (1.) Leave granted.
(2.) The Appellant No. 1 herein is an agro-based company having varied interests in providing feed supplements, vaccines etc. The Appellant Nos. 2 and 3 are the Managing Director and Chairperson of the Appellant No. 1 Company, which is based in Hyderabad in the State of Andhra Pradesh. In order to utilize the dealer network of the Appellant No. 1 Company, the Respondent No. 1 Company approached the Appellants for distribution of prawn feed manufactured by it. Inasmuch as, the said venture did not turn out to be very successful, the Appellant No. 1 Company took a decision to discontinue its dealings with the Respondent No. 1 Company. In furtherance of the above, the Appellant Company settled all its, outstandings with the Respondent No. 1 Company and also gave an authorization letter to the Respondent No. 1 Company to collect all other dues directly from the customers of the Appellant No. 1 Company, who had bought the feed but were yet to pay the price therefor. The concerned customers were also informed about the aforesaid decision. Thereafter, on 4th October, 2001, the Appellant Company requested the Respondent No. 1 Company to coordinate with one K. Balashankar Reddy, the then General Manager at Nellore, for collecting the dues which were still outstanding. From the contents of the said letter it appears that the Respondent Company had accepted the said offer. However, in the course of making collections from the customers directly, it was found that some of its employees had conspired with the said K. Balashankar Reddy and had misappropriated some amounts of money and the same was intimated by the Respondent No. 1 Company to the Appellant Company which asked the former to take action against the said Balashankar Reddy and its concerned employees.
(3.) Subsequently, however, the Appellant and the Proforma Respondents received a notice dated 13thDecember, 2002, from the Respondent No. 1 Company purporting to be a notice under Section 138 of the Negotiable Instruments Act, 1881 hereinafter referred to as "the 1881 Act", wherein it was stated that a cheque issued by K. Balashankar Reddy on 25th November, 2002, drawn on the State Bank of Hyderabad, Nellore Branch, had been returned dishonoured with the endorsement "Account closed". The notice also demanded repayment of the cheque amount from the Appellants.;