Bangalore District Court
M/S. Fortune Group Propstar Llp vs Dr. K. Senthilnathan on 15 March, 2016
IN THE COURT OF THE XXVII ADDL. CHIEF
METROPOLITON MAGISTRATE, NRUPATHUNGA
ROAD, BENGALURU CITY.
Dated this the 15th day of March-2016
:: PRESENT ::
SRI. MALLANAGOUDA, B.Com., LL.B.,
XXVII Addl. C.M.M., Bengaluru City.
C.C. NO.10158/2012
COMPLAINANT:
M/s. Fortune Group Propstar LLP,
with its office at No.6, III Floor,
Park Road, Tasker Town,
Shivajinagar, Bangalore-51.
Represented by its Managing Partner,
Mr. Mohammed Ghouse Farooq.
(Rept. by Sri. Kamal & Bhanu. Advs.)
V/S
ACCUSED:
1. Dr. K. Senthilnathan,
S/o S.P. Kunga Sabai,
Aged about 54 years,
No.1620-A, 16th 'A' Main Road,
Anna Nagar, Chennai - 600040.
2. M/s. Sridevi Hospital,
A Proprietorship Concern,
No.1620-A, 16th 'A' Main Road,
Judgment 2 C.C.10158/2012
Anna Nagar, Chennai-600040.
Represented by its Proprietor
Dr. K. Senthilnathan
(Rept. by Sri. K.N.C. & Associates, M.R.B. Adv.)
OFFENCE COMPLAINED OF : U/Sec.138 of Negotiable
Instruments Act.
PLEAD OF THE ACCUSED : Not guilty.
FINAL ORDER : Accused is convicted
DATE OF ORDER : 15-03-2016
(MALLANAGOUDA)
XXVII Addl.CMM.,
Bengaluru.
***
:: JUDGMENT ::
This is the case in which the complainant has filed the complaint against the accused under Section.200 Criminal Procedure Code for the offence punishable under Section.138 of Negotiable Instruments Act.
2. The brief facts of the complainant's case are as under: Judgment 3 C.C.10158/2012
The complainant is a partnership firm registered under Limited Liability Partnership Act - 2008 and carrying on the business of real estate development in and around the city of Bangalore. In January-2011 accused was introduced to complainant through Dr. Mohan Rao and Mr. Raja Reddy residents of V.Kota, at that time accused represented as he is the proprietor of M/s. Sridevi Hospitals and M/s. Sridevi Developers of Chennai and property bearing Plot No. ML- 8D measuring 1.46 acres of Sy. No.2 situated at Peenya Plantation, Yeshwanthapura Hobli, Bangalore North Taluk, Bangalore bearing municipal No.5, HMT Main Road, Bangalore is belongs to M/s. Sridevi Hospitals, he is developing the said property into a multistoried residential apartment building and due to financial difficulties he could not complete the said development work, hence he offered the complainant to take up the incomplete project and to complete the same, at that time he made representation stating that as consideration thereof the complainant would be entitled to specific share in the proceeds of the project. Judgment 4 C.C.10158/2012 Accordingly complainant agreed to take up the incomplete project, got executed agreement dated: 24-03-2011, pursuant to the said agreement accused has executed a General Power of Attorney dated: 24-03-2011, after that they got executed supplemental agreement dated: 15-07-2011 and another Power of Attorney dated: 18-07-2011. Accused has availed financial assistance from Indian Overseas Bank, Chennai and he was due huge money exceeding Rs.15 crores to said Bank, the said loan amount was taken over by the Asset Reconstruction Company Indian Ltd, when accused requested the complainant to extend financial assistance to make payments towards the said Bank dues complainant has paid Rs.3 crores to accused, further complainant has invested huge money in carrying project agreed and he has substantially completed the project and undertook huge publicity and advertisement in respect of the project due to which loss making project has turned into a profit making venture, at this juncture with malafide intentions accused started insisting to pay some more money but already Judgment 5 C.C.10158/2012 complainant has invested huge money and paid to Asset Reconstruction Company India Ltd as aforesaid, declined to comply with the unreasonable demands made by the accused. Further more accused has deliberately failed and neglected to get necessary documents executed from Asset Reconstruction Company India Ltd., for releasing the charge over the subject property, accordingly in last week August- 2011 differences arose between complainant and accused due to negligence of accused in complying with the requirements and unreasonable demand by the accused for payment of additional amount. After that several negotiations were held between the complainant and accused and in meeting held on 30-08-2011 it was agreed and resolved that the accused would pay of Rs.4,75,00,000/- to complainant towards refund of the amount paid by the complainant and towards reimbursement of the cost and investments made by the complainant into the project, accordingly they got executed memorandum of understandings and to pay the said amount accused has Judgment 6 C.C.10158/2012 issued cheques bearing No.217081, 217082 and 217083 all dated: 30-09-2011 for Rs.1 crore 75 lakhs, Rs.1 crore 50 lakhs and Rs.1 crore 50 lakhs all drawn on Indian Bank, ASIAD Colony, Chennai. Further it was agreed that memorandum of understanding and power of attorney's earlier executed by the accused would be valid and subsisting till payment of Rs.4,75,00,000/- by the accused and for delayed payments accused has to pay interest at 24% per annum. However accused has failed to pay the amount as agreed in the said Memorandum of understanding and he prolonged the matter up to the second week of December- 2011, after several requests and demands accused invited the complainant to Chennai on 17-12-2011, but again he protracted the matter up to 20-12-2011 and he informed that he has gone out of Chennai to arrange funds, thereafter on 22-12-2011 when complainant has presented the said cheques to bank for encashment, the same are dishonoured with endorsements as 'payment stopped by drawer', after that on 26-12-2011 complainant learnt that in collusion with Judgment 7 C.C.10158/2012 one Mukhtiar Ahmed and another one Hussain. M.F, accused has fabricated documents like Power of Attorney, Agreement, Cancellation of Agreement, Settlements deeds, Rectification Deeds by forging the signatures of the Managing Partner of the complainant and had also filed suits in O.S.7056/2011 and No.7282/2011 and criminal complaints in PCR NO.21770/2011 and obtained fraudulent compromise decrees and orders by playing fraud on the courts, after that complainant lodged complaint before the Commissioner of Police, Bangalore and it was referred to City Crime Branch, Bangalore City, thereafter on 26-12-2011 at about 7.00 p.m. A.M. Saleem and other 4-5 persons went to the house of the partners of the complainant and threatened them with dire consequences if the complaint was pursued further, thereafter on 30-12-2011 they filed a complaint against the accused and other persons, thereafter on 19-01-2012 complainant got issued notice to accused calling upon him to pay the amount of the cheques, even after service of notice accused has not paid the cheque Judgment 8 C.C.10158/2012 amount to complainant. Further complainant has filed an application to set aside the compromise decrees passed in O.S. No.7056/2011 and O.S. No.7282/2011 and court passed stay order in both the suits. Thereby accused has committed an offence punishable under Section.138 of Negotiable Instruments Act.
3. After service of summons, accused has appeared before this court and pleaded not guilty for the offence under Section.138 Negotiable Instruments Act. Hence, the trial has been conducted against him for the said offence.
4. On the basis of the above facts, following points have arisen for my consideration:
POINTS
1. Whether complainant proves beyond reasonable doubt that to pay the amount received from the complainant and development made by the complainant in property belongs to accused, accused has issued cheques bearing No.217081, 217082 and 217083 all dated: 30-09-2011 for Rs.1 Judgment 9 C.C.10158/2012 crore 75 lakhs, Rs.1 crore 50 lakhs and Rs.1 crore 50 lakhs all the cheques are drawn on Indian Bank, ASIAD Colony, Chennai, on presentation the said cheques have been dishonoured and returned with an endorsements as 'Payment stopped by the drawer', after that complainant got issued notice dated: 19-01-2012 to accused, even after service of notice also accused has not paid the cheques amount to complainant.
Therefore, accused is liable for conviction for the offence punishable under Section.138 of Negotiable Instruments Act?
2. What order?
5. In support of its case, complainant examined one witness as P.W.1 and got marked documents at Exs.P1 to P40 on its behalf. On the other hand accused examined himself and examined two more witness as D.W.1 to D.W.3 and got marked documents at Ex.D1 to D11 on his behalf.
(Note: Since at the time of dictating the judgment it is founds two documents are marked as Ex.P38, therefore document marked as Ex.P38 on 26-02-2016 is renumbered as Ex.P40)
6. Heard arguments.
Judgment 10 C.C.10158/2012
7. My findings on the above points are as under:
Point No.1: In the Affirmative
Point No.2: As per final order, for the following:
REASONS
8. POINT NO.1: It is the case of the complainant that accused No.1 is the proprietorship concern and accused No.2 is the Proprietor of accused No.1, accused has got property in plot bearing No. ML-8D, measuring 1.46 acres of Sy. No.2 situated at Peenya Plantation, Yeshwanthapura Hobli, Bangalore, accused has entered into an agreement with the complainant for completion of construction of residential apartments in the said land, accordingly complainant and accused have entered into different agreements and in view of said agreements accused has executed Power of Attorney's infavour of complainant, as per the said agreements complainant has made some developments in the said land and has paid Rs.3 crores to accused for payment to Asset Reconstruction Company Ltd., Judgment 11 C.C.10158/2012 however subsequently the accused demanded for some more money but when complainant has refused for the same, difference arose between them in August-2011, accordingly negotiations were held, during which accused has agreed to pay Rs.4 crores 75 lakhs to complainant, for the refund of the amount paid by the complainant and towards reimbursement of the investment made by the complainant in the project, accordingly they got executed MOU on 30-08- 2011, as per the said MOU accused has issued three cheques bearing No.217081, 217082 and 217083 all dated: 30-09- 2011 for Rs.1 crore 75 lakhs, Rs.1 crore 50 lakhs and Rs.1 crore 50 lakhs all drawn on Indian Bank, ASIAD Colony, Chennai, but on presentation the said cheques are dishonoured with endorsement 'payment stopped by the drawer', after that complainant has got issued notice dated:
19-01-2012 to accused, even after service of notice also accused has not paid the cheques amount to complainant. Thereby accused has committed an offence punishable under Section.138 of Negotiable Instruments Act. Judgment 12 C.C.10158/2012
9. During evidence P.W.1 namely Mohammed Ghouse Farooq has filed his affidavit as chief-examination, in which he once again restated the facts alleged in the complaint as discussed above. In cross-examination he denied suggestions regarding compromise entered into between complainant and accused in civil suits filed by the accused and issuance of cheques in question for collateral security.
10. On the other hand accused deposed that when complainant was unable to start construction due to lack of funds, they requested him to issue cheques for raising funds by keeping the same as collateral securities, accordingly he issued three cheques in question, subsequently as the complainant has failed to start construction he filed the suits in O.S. No.7056/2011 and 7282/2011, in which one Mukhtiar Ahmed GPA holder of the complainant has compromised in the said suit, he is not liable to pay any money to complainant.
Judgment 13 C.C.10158/2012
11. During arguments learned counsel for complainant has argued that as the accused himself has admitted that cheques in question belongs to him, complainant has produced sufficient evidence to show that as on the date of the cheques accused was liable to pay the amount mentioned in the cheques, on presentation cheques are dishonoured with endorsements as 'Payment stopped by the drawer', after that complainant has complied all other conditions of Section.138 of Negotiable Instruments Act, even after that also accused has not paid the cheques amount to complainant. Thereby, accused is liable for conviction for the offence punishable under Section.138 of Negotiable Instruments Act. In support of his said arguments he has relied upon the following judgments:
2009 AIR SCW 713 National Small Industries Corporation Ltd., V/s.
State (NCT of Delhi) & Ors.
A. Negotiable Instruments Act (26 of 1881), Ss.138, 142 - Dishonour of cheque -
Complainant - Who can be - Cheque has not been endorsed by payee in favour of anyone - It Judgment 14 C.C.10158/2012 is the payee alone whether corporeal or incorporeal person, who can be the complainant.
*** 2002 Cri. L.J.266 M/s. MMTC Ltd. and another V/s.
M/s. Medchl Chemicals and Pharma (P) Ltd & Anr. A. Negotiable Instruments Act (26 of 1881), Ss.142, 138 - Cheque dishonour complaint - Can be made by payee or holder in due course of cheque - Complaint lodged in name and on behalf of appellant company who is payee of cheques - Is maintainable - Fact that complaint was lodged by Manager or Deputy General Manager who had not been authorized by Board of Directors to sign and file complaint on behalf of company - Cannot be a ground for quashing complaint, since defect is curable.
***
12. On the other hand counsel for accused has argued that as the complainant has not produced authorization executed infavour of the person who filed the complaint and who has given evidence on behalf of complainant, there is no evidence regarding existence of legally dischargeable debt, dispute is of Civil in Nature, therefore accused is entitled for Judgment 15 C.C.10158/2012 acquittal. In support of his said arguments he has relied upon the following judgements:
AIR 2014 Supreme Court 3519 Dashrath Rupsingh Rathod V/s.
State of Maharashtra & Anr A. Negotiable Instruments Act (26 of 1881), Ss.138, 142 - Criminal P.C. (2 of 1974), Ss.177, 178, 179 - Dishonour of cheque - Complaint - Taking of cognizance - Criminal P.C. makes departure from Civil Procedure Code in not making 'cause of action' routinely relevant for determination of territoriality of criminal Courts
- Phrase 'cause of action' in S.142 is apposite for taking cognizance - But inappropriate and irrelevant for determining commission of subject offence.
*** The judgment of Hon'ble Supreme Court of India reported in Criminal Appeal No.605 of 2015 Yogendra Pratap Singh V/s.
Savitri Pandey & Anr.
*** ILR 2007 KAR 765 Ranjitha Balasubramanian & Anr Judgment 16 C.C.10158/2012 V/s.
Shanthi Group & Others Negotiable Instruments Act, 1881 - Section.138 offences under-Dismissal of complaint - Appealed against complaint by the Power of Attorney holder of the appellants - Non-production of power of attorney - absence of proof of power of attorney - HELD, In the absence of Power of Attorney, the complaint is not maintainable - On facts, Held, when the power of attorney holder has not produced the power of attorney to prove that he has been authorized to file the complaint and depose on behalf of the principal, the Trial Court has rightly dismissed the complaint.
*** The judgment of Hon'ble High Court of Karnataka, (Dharwad Bench) reported in Criminal Appeal No.2653 of 2008 Canara Workshops Limited, Hubli V/s.
Mantesh *** The judgment of Hon'ble High Court of Karnataka, reported in Criminal Revision Petition No.129 of 2013 George Joseph & Another V/s.
HMT (International) Limited & Another *** Judgment 17 C.C.10158/2012 The judgment of Hon'ble Supreme Court of India, reported in (2015) 0 Supreme (SC) 53576 A.C. Narayanan V/s.
State of Maharashtra A. Negotiable Instruments Act, 1881 -
Sections.138, 141 and 142 - Complaint by power of attorney holder - Filing of complaint by power of attorney holder perfectly in order - Instantly, however, no mention of, or a reference to Power of Attorney in body of complaint - Power of attorney not exhibited - No particulars of power of attorney filed - Complainant not mentioning that complaint is filed by power of attorney holder - Order taking cognizance not mentioning anything about power of attorney - Order not sustainable - Impugned judgment liable to be set aside - Proceedings against appellant liable to be quashed.
*** ILR 2007 KAR 3155 Director Maruthi Feeds & Farms Pvt. Ltd., V/s.
Basanna Pattekar Negotiable Instruments Act, 1881 -
Section.138 - Offence under - Acquittal - Appealed against - Director of the complainant company deposing on behalf of the company - Non-production of resolution - On facts Held, PW.1 Director of the company has not produced any documentary evidence to show that he is the Judgment 18 C.C.10158/2012 Director and he has been authorized by the company to depose on behalf of the company - Further Held, Since the company is a juristic person, any person on behalf of the company has to be authorized by the company under the Articles of Association or by a separate resolution to depose on behalf of the company - Dismissal of the complaint is sound and proper
- Judgement of acquittal is justified. Appeal deposed of.
***
13. Regarding contention of the accused about non- existence of legally dischargeable debt is concerned, on perusal of the evidence of both the parties and arguments of their counsels it appears that as rightly argued by the counsel for complainant as per Section.139 of Negotiable Instruments Act when accused admits that cheque in question is belongs to him, it is proper and necessary to presume that accused has issued cheques for payment of legally dischargeable debt and burden lies on the accused to rebut the said presumption. Here in this case admittedly complainant has transferred Rs.3 crores to accused and Asset Reconstruction Company Ltd., as per instructions of the accused. Further more admittedly accused has executed a Judgment 19 C.C.10158/2012 MOU as per Ex.P21, from which it appears that on 30-08- 2011 accused has issued three cheques in question for total amount of Rs.4 crores 75 lakhs, even if accused has contended that in a suit filed by him Power of Attorney holder of the complainant has got the matter compromised accordingly accused in not liable to pay the amount mentioned in the cheques, as admitted by the accused himself already all those compromise orders and decrees have been set aside by the Hon'ble City Civil Court and as of now there is no any order or decree regarding the said alleged compromise between complainant and accused are in existence, therefore it appears that when accused himself has executed a MOU and issued cheques in question to pay the amount mentioned in the cheques as agreed by him in the said MOU marked at Ex.P21 definitely it appears that as on the date mentioned in the cheques accused was liable to pay the amount mentioned in the cheques and to pay the said amount only he has issued the cheques in question to complainant. Even if accused has contended that he has Judgment 20 C.C.10158/2012 issued cheques in question as per demand made by the complainant for borrowing loan by keeping the cheques as collateral security accused has not produced any other documents regarding the same. Further more accused is a Medical Practitioner and admittedly he has executed a MOU dated: 30-08-2011 which is marked at Ex.P21, therefore contention of the accused about issuance of cheques for keeping as collateral security appears tobe false, therefore it appears that contention of the accused regarding non- existence of legally dischargeable debt appears to be incorrect.
14. Regarding contention of the accused about non- production of authorization is concerned complainant has produced LLP agreement marked at Ex.P39, from which it appears that the person who filed the complaint and who has given evidence before the court namely Mohammed Ghouse Farooq is authorized to file a complaint and to give evidence before the court, therefore there is no necessity of any separate authorization for representing the complaint, hence Judgment 21 C.C.10158/2012 the said contention of the accused about maintainability of the complaint for non-production of authorization is incorrect. Therefore when there is evidence to show that as on the date of cheques accused was liable to pay the amount mentioned in the cheques, admittedly cheques in question are belongs to accused, he has issued the cheques for payment of the said amount, on presentation of the said cheques, same are dishonoured with endorsement as 'Payment stopped by the drawer', after that complainant has complied all other conditions of Section.138 of Negotiable Instruments Act, even after that also accused has not paid the cheques amount to complainant, therefore definitely accused has committed an offence punishable under Section.138 of Negotiable Instruments Act and he is liable for conviction for the said offence. Since by looking to evidence it appears that though accused is a Medical Practitioner and issued cheques for payment of the amount mentioned in the cheques, subsequently he has made efforts to create documents regarding compromise in collusion with Judgment 22 C.C.10158/2012 some other persons, it is decided to convict the accused with maximum punishment of imprisonment for one year and fine up to the double the cheques amount with interest at 9% per annum. Hence, I answered Point No.1 in the Affirmative.
15. POINT NO.2: In view of my findings on Point No.1, I proceed to pass the following:
ORDER Acting under Section.265 of Cr.P.C., accused is convicted for the offence punishable under Section.138 of Negotiable Instruments Act.
Accused shall undergo simple imprisonment for one year and shall pay fine of Rs.9,50,00,000/- (Nine crores fifty lakhs) with interest at 9% per annum from the date of cheque till payment of the entire amount. Out of the fine amount Rs.9,45,00,000/- (Nine crores Judgment 23 C.C.10158/2012 forty-five lakhs) and interest thereon is ordered to be paid to the complainant as compensation and remaining amount of Rs.5,00,000/- and interest thereon is ordered to be remitted to the State.
(Dictated to Stenographer, transcribed and computerized by him, corrected and then pronounced by me in the open court on this the 15th day of March-2016) (MALLANA GOUDA) XXVII Addl. Chief Metropolitan, Magistrate, Bengaluru.
ANNEXURE List of Witnesses examined on behalf of Complainant:
PW.1 : Mohammed Ghouse Farooq List of Exhibits marked on behalf of Complainant:
Ex.P1 to 3 : Cheques
Ex.P4 to 6 : Bank endorsements
Ex.P7 : Notice
Ex.P8 & 9 : Postal receipts
Ex.P10 & 11 : Postal acknowledgements
Ex.P12 & 13 : C/cs of orders of O.S.7282/2011 &
O.S.7056/2011
Ex.P14 : Complaint
Ex.P15 : C/c of Order in OS.7056/2011
Ex.P16 : C/c of Agreement
Ex.P17 : C/c of GPA
Ex.P18 : C/c of Supplemental Agreement
Judgment 24 C.C.10158/2012
Ex.P19 : C/c of GPA
Ex.P20 : C/c of Bank account statement
Ex.P21 : C/c of MOU
Ex.P22 : C/c of Caveat
Ex.P23 : C/c of Private complaint
Ex.P24 : C/c of Compromise Petition
Ex.P25 : C/c of Advancement application
Ex.P26 : C/c of Order sheet in PCR.21770/2011
Ex.P27 : C/c of FIR with complaint
Ex.P28 : C/c of another FIR with complaint
Ex.P29 : C/c of another FIR with complaint
Ex.P30 : C/c of order sheet in Cri.No.227/2011
Ex.P31 : C/c of B Report
Ex.P32 : Publication given in The New Indian
Express
Ex.P33 : Publication given in Kannada Newspaper
Ex.P34 & 35 : C/c of Order in OS.7056/11 & 7282/11
Ex.P36 & 37 : C/c of WP No.13232/12 with Order
sheet
Ex.P38 : Copy of Order in W.P.13232/12
Ex.P39 : Partnership Agreement
Ex.P40 : Incorporation Certificate
List of Witnesses examined on behalf of the accused:
DW.1 : Dr. K. Senthil Nathan DW.2 : Shanthi DW.3 : R.V. Chandrashekaran
List of Exhibits marked on behalf of accused:
Ex.D1 : C/c of Plaint in OS.7056/2011 Ex.D2 : C/c of Compromise Petition in OS.7056/2011 Ex.D3 : C/c of suit in OS.7056/2011 Ex.D4 : C/c of Plaint in OS.7282/2011 Ex.D5 : C/c of Compromise Petition in OS.7282/2011 Ex.D6 : C/c of Decree in OS.7282/2011 Judgment 25 C.C.10158/2012 Ex.D7 & 8 : C/cs of W.P. No.42456/2014 Ex.D9 & 10 : C/cs of complaint in PCR. No.21770/11 Ex.D11 : C/c of Letter (MALLANA GOUDA) XXVII Addl. Chief Metropolitan Magistrate, Bengaluru.