Bangalore District Court
M/S Splendid Marketing vs M/S Enrich Interiors on 26 April, 2022
IN THE COURT OF XXXIII ADDL. CHIEF
METROPOLITAN MAGISTRATE, MAYO HALL UNIT,
BENGALURU
: PRESENT :
M.Vijay, BAL, LLB.
XXXIII ADDL.CHIEF METROPOLITAN MAGISTRATE,
BENGALURU.
DATED IS THE 26TH DAY OF APRIL, 2022.
C.C.No.53026/2019
COMPLAINANT : M/s Splendid Marketing,
No.1 & 2, Ground Floor,
LVS Elite, TC Palya Road,
Sonnathammana Halli, K.R.Puram,
Bangalore560036.
Rep. By its Proprietor
Smt. B.Vandana,
Aged about 35 years,
D/o B.Sreenivasulu Reddy.
.Vs.
ACCUSED : 1. M/s Enrich Interiors,
No.403, 1st Floor, Ave Maria,
Dickenson Road,
Bangalore560042.
Rep. By its Proprietor
Sri. Suresh Gidwaani
So also
M/s. Enrich Interiors
No.123, "Shoba Amber"
Jakkur Aerodrum, Jakkur B.G.Shoba,
Ultima Campus, Bangalore560064.
Rep. By its Proprietor
Sri. Suresh Gidwaani.
2
C.C.No.53026/2019
2. Sri. Suresh Gidwaani
Proprietor, M/s. Enrich Interiors,
R/at No.2/B, Scottsdale Apartments,
Frazer Town, Bangalore560005.
JUDGEMENT
The complainant has filed this private complaint U/s.200 of Cr.P.C., against the accused for the offence punishable U/s 138 of Negotiable Instrument Act.
The factual matrix of the case are as follow
2. The complainant claims to be proprietorship dealing in whole sale business of selling of granites and tiles of reputed companies ie., Somani, Kajaria etc., the A1 represented by its proprietor, A2 dealing in business of interior works, tiles, granites for the houses/apartments and other buildings, regularly purchasing the granites and tiles etc., for interior works from it, as such the accused were regularly purchased the materials from it, the accused got faith and confidence on the accused, accordingly, the accused used to purchase material on credit basis. Accordingly, the accused on 15.09.2017 requested the complainant to supply of Kajaria 800X800 African wood as per purchase order. Believing the accused, the complainant supplied materials on 3 C.C.No.53026/2019 03.10.2017 on credit basis and raised invoices bearing No.842, 849, 850 all are dated 03.10.2017 for sum of Rs.3,58,659/, each totally which has supplied material for total amount of Rs.10,75,977/.
3. Thereafter, despite receipt of materials, the accused failed to clear the balance amount of Rs.10,75,977/, even then he requested further to supply the materials to it, believing the accused again, the complainant supplied Kajaria in the 2nd week of August 2018, 168sq meters, vide invoice No.885 for sum of Rs.1,07,575/, dated 20.03.2018 and another invoice No.SM899 for sum of Rs.6,318/, dated 25.08.2018 to the accused, in totally the accused had due of Rs.11,88,927/, towards suppling of materials. Despite of its demand, the accused failed to clear total sum of Rs.7,89,927/. However, the A2 finally had issued three cheque bearing No.271379 for sum of Rs.5,00,000/, dated 29.01.2019, cheque bearing No.271380 dated 29.01.2018 for sum of Rs.5,75,977/, both were drawn on Yes Bank, Kasthurba Road Branch, Bangalore, and another cheque bearing No.141691 dated 29.01.2019 for sum of Rs.1,13,950/, drawn on Axis 4 C.C.No.53026/2019 Bank, Coxtown Branch, Bangalore, with an assurance that, the cheque would be honored on due date.
4. Believing the assurance of accused, the complainant claims to have presented it through banker HDFC Bank Richmond Road, Bangalore, but out of three cheques ie., cheque bearing No.271379, 271380 were returned unpaid for "Stop Payment" vide memo's dated 13.01.2019 respectively and another cheque bearing No.141691 was returned unpaid for "Funds Insufficient" vide memo dated 30.01.2019, same was brought to the notice of the accused and demanded to pay the cheques amount, but despite demand the accused failed to pay the cheques amount. Accordingly, the complainant was constrained to issue legal notice to the accused demanding to pay the total sum of Rs.11,89,927/, on 15.02.2019, same was served upon the accused on 18.02.2019, but despite service, the accused neither paid the cheque amount nor replied to his notice. accordingly, alleged that, the accused intentionally to cheat the complainant had stopped the payments of cheques as well as failed to maintain sufficient balance in his account. Accordingly, 5 C.C.No.53026/2019 alleged that, the accused have committed an o/p/u/s 138 of N.I.Act.
5. The court took cognizance for an o/p/u/s.138 of N.I. Act, based on the complaint, sworn statement and documents filed by the complainant and criminal case ordered to be registered against the accused for an o/p/u/s.138 of N.I. Act.
6. In pursuance of summons, the A2 appeared through his counsel and he was on court bail. Substance of plea was recorded, A2 pleaded not guilty and claims to be tried.
7. The complainant in order to prove its case got examined its proprietor as P.W.1 and got marked Ex.P.1 to P.13. Upon closure of complainant side evidence, A2 was examined u/s 313 of Cr.P.C., he denied the incriminating materials on record, and contended that, 80% of materials supplied to it were defective and contended that, the cheques have been misused by the complainant were issued for security to it, the A2 got examined himself as D.W.1.
6C.C.No.53026/2019
8. Heard both the sides. The learned counsel for the accused also filed written argument.
9. Perused the materials on record, the following points arise for my determination.
1. Whether the complaint proves beyond all reasonable doubt that, accused have committed an o/p/u/s 138 of Negotiable Instruments Act?"
2. What Order?
10. My findings to the above points are follows;
Point No1: In the Affirmative Point No.2: As per final order for forgoing;
REASONS
11. POINT No.1: The complainant claims to have supplied the material to the A1 and raised invoices bearing Nos.848 to 850 and 885, 899 for total sum of Rs.11,89,927/, towards discharge of liability, the accused allegedly issued three cheques bearing Nos.271379, 271380, 141691 for total sum of Rs.11,89,927/, but out these cheques, the first two cheques were returned for "stop payments" and another returned for "Funds 7 C.C.No.53026/2019 Insufficient", despite service of notice, the accused failed to pay the cheques amount, accordingly this complaint.
12. Per contra, the accused admitted, the materials supplied by the complainant to it vide invoices bearing No. 848 to 850 and 885, 899 and also he admits the notice caused by the complainant demanding to pay the cheques amount, however, accused have specifically contended that, cheques were issued prior to supply of materials but not in the year 2019 and after supplying the materials, they have noticed that the complainant had supplied 70% defective. Therefore, same was communicated to the complainant to take back the defective materials, even then the complainant had not made any effort to take back his materials. Accordingly, they are not liable for claimed amount as the complainant had supplied defective materials.
13. Considering the above rival contention, it is clear that, there is no dispute with regard to materials supplied by the complainant to the accused as claimed by the complainant and also Ex.P.1 to P.3 cheques pertains to the account of A1 and A2 is the sole proprietor of A1.
8C.C.No.53026/2019 That apart, the compliance of section 138A to C., also not in dispute.
14. However, the accused specifically contended that, the complainant had supplied 70% of defective materials, therefore, they have not liable for claimed amount of Rs.11,89,987/, covered under invoices raised by the complainant vide bearing No. 848 to 850 and 885, 899, as stated supra, the accused does not disputes the Ex.P.1 to P.3 relied by the complainant pertains to the account of A1 and A2 is the sole proprietor, accordingly, the accused admits the signature pertains to A2 and cheques pertains to A1.
15. So, in view of admission, though the accused denied the existence of liability, but once he admits the issuance of cheques Ex.P.1 to P.3 in favour of the complainant, it has to be presumed that, the cheques were issued towards consideration or discharge of liability. As per said ruling the Hon'ble Apex Court i.e., Rangappa V/s Mohan held that;
"Once the cheque relates to the account of the accused and he accept and admit the signature on the said cheque, then initial 9 C.C.No.53026/2019 presumption as contemplated under Sec.139 of N.I. Act has to be raised by the court in favour of the complainant. The presumption referred to in Sec.139 of N.I. Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption."
16. Accordingly, the presumption drawn in favour of the complainant that, Ex.P.1 to P.3 were issued by the accused towards discharge of legally enforceable liability. However, it is a rebuttable presumption, the onus is on the accused to rebut the presumption that, 70% of the materials supplied by the complainant were defective. Accordingly, they are not liable to pay the cheque amount, for that the accused examined himself and filed examination chief affidavit, wherein he stated that, he placed purchase order for supplying of Kajaria African wood from the complainant company on 15.09.2017.
17. Later on, he also purchased several materials from the complainant company as per the invoices raised by the complaint ie., 848 to 850 and 885, 899, however, he claims that, he purchased the materials under 5050 ratio 10 C.C.No.53026/2019 ie., 50% on credit and 50% on payment, after delivery of the materials by the complainant, he noticed 70% of material supplied by the complainant towards damaged same was brought to the notice of the complainant and he requested the complainant to take back the damaged materials, even then the complainant failed to take back damaged materials, after receipt of notice from the complainant, he contacted the complainant and complainant assured him that, he will compromise the matter, accordingly, he did not issue reply to notice, since the complainant supplied damaged materials and he is not liable for claimed amount.
18. However, during the course of cross examination, the complainant elicited that, the accused claimed that, he had issued reply notice to the complainant, by setting forth his defence that, the materials supplied by the complainant were damaged, but, the accused has not produced any reply notice as claimed by him during the course of cross examination. Besides that, it is not the case of the accused that, he had returned the defective materials supplied by the complainant. Admittedly, the accused has not returned the defective material as alleged 11 C.C.No.53026/2019 by the accused, even the accused admittedly not caused any legal notice to the complainant requesting the complainant to take back the defective material. So, without retuning the alleged defective materials and without taking any legal steps for returning the goods supplied by the complainant or taking action against the complainant, the accused simply claiming that, he is not liable despite he admits that, he had received materials as per invoices raised by the complainant. So, admittedly the accused has not produced any materials before the court to show that, the complainant had supplied defective materials in the year 2017, further since 2017 admittedly, the accused has not taken any action against the complainant for supplying of defective materials.
19. Moreover, the Ex.P.1 and P.2 were dishonored for the reasons "stop payment" and another cheque was dishonored for "Funds Insufficient" when, the accused specifically claiming that, he had issued the stop payment instruction to his banker for stop payments as the complainant had supplied defective materials, the onus is on him to prove that, the cheque were not dishonored because of paucity of funds, but to prove the same, the 12 C.C.No.53026/2019 accused not produced any documents to show that, they had sufficient amount in the account of A1, at the time of presentation of Ex.P.1 and P.2 ie., in the year 2019, but nothing has produced to show that, the accused had sufficient amount in his account to credit the cheque or honor the cheques, at this stage, it is relevant to note the decision of the Hon'ble Apex Court in M/s MMTC Ltd., and another V/S Medchil Chemicals and Pharma Pvt. Ltd., held that, "even though the cheque dishonored by reason of stop payment instruction an offence under section 138 could still be made out. It is held that, the presumption U/S 139 is attracted in such a case also the authority shows that, even in the cheque is dishonored by reason of stop payment instruction by virtue Sec.139 the court as to presume that, the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Off course this is a rebuttable presumption. The accused can thus show that the stop payment instruction were not issued because of insufficiency or paucity of funds if the accused shows that in his account there was sufficient 13 C.C.No.53026/2019 funds to clear the amount of cheque at the time of presentation the cheque for encashment at the drawer bank and that stop payment notice had been issued because of other valid causes including that there was no existing that or liability had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then an o/p/u/s 138 would not be made out".
20. So, to believe the contention or to accept the contention of the accused that, since defective materials supplied, he compel to issue instruction to his banker for stop payment, first of all the accused must establish there were sufficient amount in his account to honor the cheques in question but failed to produce. Accordingly, the contention of defective materials cannot be acceptable.
21. That apart, the accused except his oral say, nothing has produced to show that, the materials supplied by the complainant were defective in nature and he has made claim against the complainant before the compation authority about supplying of the materials. So, whether it 14 C.C.No.53026/2019 is defective or the material supplied were good, once it is supplied and cheques were issued even for security, once the accused admits the material supplied by the complainant and invoices bearing Nos.848 to 850 and 885, 899 as claimed by the complainant, the onus is on the accused to prove that, the cheques were not issued towards discharge of legally enforceable liability. But, the accused though contended that 70% of material were defective in nature, but no iota of evidence is produced to that effect and no materials brought on record to show that, soon after noticing the defective materials supplied by the complainant, he asked the complainant to take back and take legal action against the complainant for alleged supply of defective materials by deducting the principle amount, but, admittedly the accused not taken any action against the complainant, so inaction of the accused clearly indicates that, the defence taken by the accused nothing but an after thought to escape from the liability. Accordingly, the accused failed to brought out materials to rebut the presumption drawn in favour of the complainant. Even in the cross examination of P.W.1 the accused failed to elicit anything that, soon after noticing the defecting materials he returned back the materials 15 C.C.No.53026/2019 supplied by the complainant, further, it is not the case of the accused that, he paid amount to complainant atleast for good materials supplied to him.
22. So, considering the entire materials on record, the accused admitted the materials supplied by the complainant under invoice Nos.848 to 850 and 885, 899 for a tune of Rs.11,92,729/, in the year 2017 and also issuance of cheque in favour of the complainant, but he contends that, the cheques were issued before supplying of the materials and one cheque issued for security, but to prove the same nothing has brought on record to show that, much prior to the supply of materials ie., in the year 2017, the cheques were in custody of the complainant, in absence of that, the issuance of cheque much earlier to the supply of material cannot be acceptable.
23. Further, the accused contended that, 70% of material supplied by the complainant were damaged, therefore, he is not liable, so once he admits the supplying of receipt of materials from the complainant and issuance of cheque in question in favour of the complainant, the onus is on the accused to show that, the materials supplied by the complainant were damaged, but to that 16 C.C.No.53026/2019 effect, the accused nothing has produced even photograph to show that the damaged material supplied by the complainant.
Besides that, the accused admittedly not taken any steps to return back to alleged damaged materials supplied by the complainant to him, in absence of that, the defence of the accused without any cogent evidence or materials to prove their contention that, 70% of materials supplied by the complainant were damaged, the defence of the accused cannot be acceptable, as it is remained unproved and not probable that, no prudent man would keep mum even after supplying of 70% of materials damaged, hence, the defence of the accused nothing but an after thought and not probable one, accordingly, the accused failed to rebut the presumption drawn in favour of the complainant. Hence, in view of admission about the business transaction held in between accused and the complainant as well as issuance of cheques in question towards discharge of legally enforceable liability cannot be doubted. Hence, the complainant has proved, its case that, as per invoices No.848 to 850 and 885, 899 raised by the complainant, the accused due of 17 C.C.No.53026/2019 Rs.11,87,979/, and cheques were issued towards discharge of said liability as admitted by the accused that, the materials supplied by the complainant, accordingly, in view of failure to prove sufficient funds in the account or the accused, the contention about damaged materials supplied by the complainant without proving the sufficient balance in his account cannot be acceptable. Accordingly, the accused found guilty of o/p/u/s 138 of N.I.Act.
25. So, far as sentence and compensation is concern, it is well settled law that an o/p/u/s.138 of N.I.Act., is primarily compensatory in nature, punitive is secondary. The accused admittedly not paid any amount towards invoices raised by the complainant since 2017. So, considering the nature of transaction between the parties and duration of pendency, litigation expenses, I am of the opinion that, if the accused is sentenced to pay fine of Rs.12,39,927/, that would meet the ends of justice, accordingly, the accused is hereby sentenced to pay a fine of Rs.12,39,927/, out of that the complainant is entitled for sum of Rs.12,34,927/, as a compensation as per Sec.357(1) of Cr.P.C. remaining amount of Rs.5,000/ is 18 C.C.No.53026/2019 to be appropriated to the state, in case of default the accused shall under go simple imprisonment for a period of 6 months. Accordingly I answered the above point in "Affirmative".
26. Point No.2: In view of above finding to Point No.1, I proceed to pass following;
ORDER Acting under section 255(2) of Criminal Procedure Code, the A1 and 2 are convicted for an offence punishable U/s 138 of Negotiable Instrument Act.
The accused sentenced to pay a fine of Rs.12,39,927/ (Rupees Twelve Lakh Thirty Nine Thousand Nine Hundred and Twenty Seven only) in default, the A2 shall undergo simple imprisonment for a period of six months. Out of the fine amount received, Rs.5,000/, is to be appropriated to the state and by way of compensation as per the provision u/Sec.357(1) of Cr.P.C., the complainant is entitled for Rs.12,34,927/.
19C.C.No.53026/2019 The bail bond and surety bond of the accused shall stand cancelled.
Office is directed to furnish a free copy of the judgement to the accused u/s 363(1) of Cr.P.C.
(Dictated to the Stenographer transcribed and typed by her, corrected, signed and then pronounced by me in the open court, on this the 26th day of April, 2022) (M.Vijay), XXXIII ACMM, BENGALURU.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 : Smt. B. Vandana
2. Documents marked on behalf of complainant:
Ex.P.1 : Notarized copy of Vat Registration certificate Ex.P.2 : Notarized copy of GST Registration certificate Ex.P.3 to 5 : Orginal cheques Ex.P.3(a) to 5(a) : Signature of the accused Ex.P.6 to 8 : Bank return memo's Ex.P.9 : Office copy of legal notice Ex.P.10 : Three postal receipts Ex.P.11 & 12 : Returned postal cover Ex.P.11(a) & 12(a) : Returned postal cover opened in the open court and notice therein marked 20 C.C.No.53026/2019 Ex.P.13 : Postal acknowledgment
3. Witnesses examined on behalf of Accused:
D.W.1 : Sri. Suresh Gidwaani
Proprietor
4. Documents marked on behalf of Accused:
NIL (M.Vijay), XXXIII ACMM, BENGALURU.