Bangalore District Court
Partner Of vs Proprietrix Of on 26 November, 2021
BEFORE THE COURT OF XXIV ADDITIONAL SMALL
CAUSES JUDGE AND THE MOTOR ACCIDENT CLAIMS
TRIBUNAL & A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 26th DAY OF NOVEMBER 2021
PRESENT: SRI.R.MAHESHA. B.A.,L, LLB.,
XXIV ADDL. SCJ &
ACMM & MEMBER - MACT
BENGALURU.
1. Sl. No. of the Case CC.No.371 of 2019
2. The date of 11-01-2019
commencement of
evidence
3. The date of closing 08-09-2021
evidence
4. Name of the Sri.S.Krishnamurthy,
Complainant Partner of
M/s VDK Enterprises
No.7, 4th cross, Vidyanagar
(Near 8th mile circle)
Bangalore-73.
(By Sri.D.M.-Advocate)
5. Name of the Smt.T.Sarathamani,
Accused Proprietrix of
Sun Star Technologies,
Plot No.3/387-4 Rajeshwari layout,
Begapallipost, SIPCOT,
Hosur-635126,
Tamil Nadu
Residence : No.2/316-9,
2nd cross, Mookandapalli,
Podhigai nagar,
Hosur-635109,
Tamil Nadu.
(By Sri.M.M.-Advocate)
2 C.C.No.371 of 2019
SCCH-26
6. The offence U/s.138 of the Negotiable Instruments Act
complained of
7. Opinion of the Accused found guilty
judge
JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
That from the month of July 2017 to April 2018 the accused has purchased the materials worth Rs.8,90,726/- from the complainant and That in the month of May 2018 the complainant approached the accused and her husband and demanded the accused to clear the bills amount but both of them pleaded their financial difficulties and assured that the accused will make the payment at the earliest. That the complainant waited till September 2018, again approached the accused in the first week of October 2018 and requested 3 C.C.No.371 of 2019 SCCH-26 her to make the payment of bills amount and towards payment of the invoice amount i.e., in order to discharge their above said liability, the accused has issued cheques bearing No.321266 dated 2-11-2018 for Rs.26,823/-, 321267 dated 2-11-2018 for Rs.77,366/-, 321268 dated 2-11-2018 for Rs.58,693, 321270 dated 2-11-2018 for Rs.26,257/-, 321328 dated 9-11-2018 for Rs.2,20,655/- and 321330 dated 9-11- 2018 for Rs.4,47,506/- in favour of the complainant's firm all the cheques are drawn on Syndicate Bank, Hosur branch, Tamilnadu. That the complainant presented the said cheque No.321268 dated 2-11-2018 for Rs.58,693/-, another cheque bearing No.321270 dated 2-11-2018 for Rs.26,257/- drawn on Syndicate Bank, Hosur branch, Tamilnadu to the bank for encashment, but the said cheques returned with an endorsement as Insufficient Funds. That the complainant issued a legal notice dated 28-11-2018 to the accused, but the accused has not bothered to pay the said amount to the complainant. Hence filed this complaint.
3. After filing of this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded. 4 C.C.No.371 of 2019
SCCH-26 Thereafter cognizance was taken and registered in Crl.Reg.No.III and summons issued to the accused. In response of summons, accused appeared through his counsel and got enlarged him on bail. The plea was recorded, read over and explained to the accused he pleaded not guilty and claims to be tried. Hence the case is posted for complainant evidence.
4. In order to establish its case, complainant got himself examined as PW-1 and got marked 1 to 33 and closed his side.
5. Heard oral argument from complainant and the accused counsel.
6. The learned counsel for complainant has relied and placed following decisions:-
1. Bhasin Credit Aid Ltd., Vs Rajkumar Crl.Appeal No.671/2005
2. 2019 (5) KCCR SN 79
3. BIR Singh Vs Mukeshkumar (2019) 4 SCC 197
4. 2021(1) KLR 378(SC)
5. AIR 2018 SC 3173
6. (2019) (10) SCC 287 Uttam Ram Vs Devinder Singh Hudan
7. 2019 (5) KCCR SN 19 (SC)
7. The learned accused advocate has placed below judgments in support of his case:-
5 C.C.No.371 of 2019
SCCH-26
1. Crl.Appeal No.533/2005 c/w 555 to 559/2005 and 560/2005 Govindram chanani Vs Latha and another Single Bench DD 23-01-2009
2. 2012(5) SCC 661 3 judges bench Supreme Court of India- Aneeta hada Vs God father travels and tours pvt., Ltd.,
3. Crl.Appeal No.3536/2013 Hon'ble High Court of Karnataka Kalburgi bench, single bench DD 21-12-2020- Mohammad Imtiyaz Ahmad Khan Vs Mohammad Azmat
4. Crl.Appeal No.830/2014-Supreme Court of India DB M/s Indus Airways Pvt., Ltd., and others Vs M/s Magnum Aviation Pvt., Ltd., and others.
5. Crl.Appeal No.1028/2010 single bench Hon'ble High court of Karnataka dt.9-9-2020-Shriram transport finance co., Ltd., Vs Smt.Asamabi Shabhana
8. On perusal of entire material available on record and also on hearing the arguments with the rulings relied the points that would arise for consideration are:
POINTS
1. Whether the complainant proves that the accused had issued cheques in question in discharge of the legally recoverable debt as contended by him?
2. Whether complainant proves that the accused has committed the offence punishable under Sec.138 of NI Act?
3. Whether the complainant is entitled for the relief as prayed in the complaint?
4. What order?6 C.C.No.371 of 2019
SCCH-26
9. My answer to the above points is as follows :-
Point No.1 to 3 : In the Affirmative Point No.4 : As per final order for the following:-
REASONS
10. POINT NO.1 to 3 :- Since these points are interlinked and to avoid repetition they are taken together for common discussion. Before peeping the disputed facts it is appropriate to refer the undisputed facts, which can be gathered from the material placed before this court. On going through the rival contention of the parties, oral and documentary evidence, it is clear that the complainant is the partner of M/s V.D.K.enterprises. The husband of the accused i.e., A.Selvam and the complainant are well know to each other as they were working in the same company. The accused husband introduced accused to the complainant proprietary concern. The accused started purchasing industrial requirement from the complainant from the beginning of 2017. The cheques in question issued by one 7 C.C.No.371 of 2019 SCCH-26 Sunstar Technologies, the accused was proprietrix of Sunstar Technologies and accused was signatory to Ex-P1 and 2. Ex- P1 and 2 issued in favour of VDK enterprises. On presentation of above said cheques got dishonoured for the reason of Funds Insufficient. The complainant issued legal notice on behalf of M/s VDK enterprises as on the strength of partner. The said legal notice duly delivered to accused on 7- 12-2018, the accused did not replied.
11. With above admitted facts, now the facts in issue are analyzed, as already stated the accused has denied the entire case of the complainant partnership firm as to commission of the offence punishable under section 138 of NI Act. While recording their plea for the said offence and also accused has denied the incriminating circumstance found in the evidence of the complainant. At the time of recording of his statement under section 313 of Cr.P.C., The accused has mainly denied the claim of complainant partnership firm, on going through the cross-examination of PW1, it is clear that in addition to the total denial of the case of the complainant firm, the accused 8 C.C.No.371 of 2019 SCCH-26 has specifically contended that the present partner had no authorization to file this complaint against accused. There is no order from accused for purchasing industrial items and electrical items. There is no document for receiving materials from accused. The Ex-P8 to 33 created manipulated for the purpose of this case by the complainant. The alleged cheque in question took from complainant partnership firm at the time of commencing business transaction by the accused, the said cheques misused and filed false case against accused for getting illegal benefit from accused. The present complaint filed against accused on the basis of personal capacity. The materials which were received by the accused husband he cleared entire amount, accused had no due towards complainant partnership firm. Therefore, on the above objections the accused seeking the present complaint is not maintainable and liable to be dismissed in limine.
12. It is needless to say that the proceeding "under section 138 of NI Act is an exception to the general principle that the accused is presumed to be innocent 9 C.C.No.371 of 2019 SCCH-26 until the guilty is proved beyond all reasonable doubt". In the proceedings initiated under section 138 of NI Act, proof beyond all reasonable doubt is subjected to presumption envisaged under section 139 of NI Act. Once the requirement of Sec.138 of NI Act is fulfilled, then it has to be presumed that the cheque was issued for discharge of the legally recoverable debt or liability. The presumption envisaged under Sec.139 of NI Act is mandatory in nature and it has to be raised in all the cases on fulfillment of the requirements of Sec.138 of NI Act. In the ruling rendered by Hon'ble Apex Court in the case of Rangappa V/s Mohan reported in AIR 2010 SC (1898) by relying on several rulings rendered by the Hon'ble Apex Court including the case of Krishnajanardhana Bhat V/s Dattareya G. Hegde reported in AIR 2008 SC (1325) it was held that "existence of legally recoverable debt or liability is a matter of presumption under section 139 of NI Act". The Hon'ble Apex Court disapproved the principle laid down in Krishnajanardhana Bhat case that "initial burden of proving existence of the liability lies upon the complainant". In the case of Sri.B.H.Lakshmi Naryana V/s Smt. Girijamma 10 C.C.No.371 of 2019 SCCH-26 reported in 2010(4) KCCR 2637 it is held that "the presumption that the cheque was issued for legally recoverable debt is to be presumed". Further the Hon'ble Apex Court in Crl. Appeal No.803/2018 Krishna Rao V/s Shankare Gowda reported in 2018(7) SCJ 300 reiterated the above principle further as provided under Sec.118 it is to be presumed that the cheque in question was issued for consideration on the date found therein.
13. In the light of the rival contention of the parties at the outset it is to be determined as to whether the complainant had complied with all the requirements of Sec.138 of NI Act as contended. In order to prove the case of the complainant, One Krishnamurthy -partner of complainant partnership firm has examined as PW-1 and he reiterated the complaint averments in his examination-in-chief by way of affidavit and got documents marked as Ex-P1 to 33. Ex-P1 cheque dated 2-11- 2018 issued in favour of VDK enterprises for sum of Rs.58,693/- cheque bearing No.321268, Ex-P1(a)-signature of the accused on behalf of her firm Sun star technologies, Ex-P2 11 C.C.No.371 of 2019 SCCH-26 cheque dated 2-11-2018 issued in favour of VDK enterprises for sum of Rs.26,257/- cheque bearing No.321270, Ex-P2(a)- signature of the accused on behalf of her firm Sun star technologies, Ex-P3 and 4 are endorsements issued by the SBI, Dasarahalli branch, Bangalore-57. On presentation of Ex-P1 and 2 got dishonoured on 15-11-2018 for the reason Funds Insufficient. Ex-P5 legal notice issued by M/s VDK Enterprises represented by its partner to accused dt.28-11- 2018. Ex-P6-postal receipt dt.28-11-2018, Ex-P7-postal acknowledgment dt.7-12-2018. Ex-P8 to 28 are tax invoices raised by complainant partnership firm in the name of Sun star technologies. Ex-P29, 30 balance sheet of complainant partnership firm from 31-3-2019 till 2020-2021 along with IT returns of complainant firm for the assessment year 2019- 2020, 2020-2021. Ex-P31 65(B) certificate issued by complainant partnership firm partner S.Krishnamurthy. Ex- P32 Email conversation dt.26-10-2017, 11-01-2018, 14-4- 2018 between complainant firm partner and accused proprietorship and GST statement of complainant firm 1-4- 2017 to 31-12-2018 along with GST payment uploaded 12 C.C.No.371 of 2019 SCCH-26 document. Ex-P33-resolution dt.15-6-2017, the another partner of complainant partnership firm authorized S.Krishnamurthy first partner of complainant firm for appear before various authorities to do certain acts on behalf of VDK enterprises and also permitted to participation in legal proceedings to defend and safeguard the interest of the partnership firm in connection with business activities before various authorities, quasi judicial authorities and courts of law. On the other hand, despite provide sufficient time, accused did not choose lead any evidence on her behalf. So accused did not produce any oral and documentary evidence.
14. In the light of rival contention of the parties, at the outset it is to be determined as to whether the complainant partnership firm authorized partner S.Krishnamurthy examined as PW-1 and filed Ex-P1 to 33. On perusal of Ex-P1 to 5, he complied necessary legal ingredients of Section 138 of NI Act. In order to prove the case, the complainant partnership firm S.Krishnamurthy reiterated the complaint averments in his sworn statement by way of affidavit which itself is treated as examination in chief in view of the decision of Hon'ble 13 C.C.No.371 of 2019 SCCH-26 Apex court reported in 2014(A) SCC 590 Indian Bank Association and others Vs Union of India and others (WP civil No.18/2013.
15. On perusal of Ex-P1 and 2 which belongs to accused proprietorship and bear signature belongs to accused. The said Ex-P1 and 2 as per the assurance given by the accused on presentation by the complainant through his banker both cheques are got dishonoured on 15-11-2018 for the reason of Funds Insufficient. Ex-P5-statutory notice issued by complainant partnership firm partner and intimated to the accused Smt.T.Sarthamani Proprietrix of Sun star Technologies plot No.3/387/4, Rajeshwari layout, Begapalli post, SIPCOT, Hosur 635126, Tamilnadu. The said notice duly served on accused on 3-12-2018, in the present case accused did not raised any objection or took any defence regarding the notice has been issued by complainant did not served on accused. So it can be easily came to conclusion that the statutory notice has been issued by complainant duly served on accused. The accused did not replied or made payment towards disputed cheque within 15 days from the 14 C.C.No.371 of 2019 SCCH-26 date of receipt of Ex-P5. Admittedly accused did not repaid cheque amount till today. So it is clear that, the complainant complied statutory requirements of presenting cheques, issuing notice and presenting complaint well in time.
16. On conjoint reading of the entire oral and documentary evidence, they remain no doubt that the complainant company had complied with all the requirements of the Sec.138 of NI Act. This being the fact, as discussed earlier in the light of the dictum of the Hon'ble Apex Court, it goes without saying that the presumption available under section 138 of NI Act is required to be drawn on some presume that the accused had issued the cheque as per Ex.P1 and 2 towards discharge of legally recoverable debt. It is also presumed that the cheques were issued for consideration on the date as mentioned therein.
17. It is well settled principle of law through catena of decisions that though the statutory presumptions available under Sec.118 and 139 of NI Act are mandatory in nature, they are the rebuttal one. It is needless to say that when the complainant proves the requirement of Sec.138 of NI Act the 15 C.C.No.371 of 2019 SCCH-26 onus of proof shifts and lies on the shoulder of the accused to rebut the presumptions available in favour of the complainant. It is the accused who has to rebut the presumptions with all preponderance of probability with clear, cogent and convincing evidence though, not beyond all reasonable doubt. The accused has to make out probable defence by producing convincing acceptable evidence and thereafter only burden shifts on the shoulder of the complainant. It is also settled law that to rebut the presumption, the accused can also rely upon presumptions available under the Evidence Act. It is also set in rest that in order to rebut the presumption it is not imperative on the part of the accused to step into the witness box and he may discharge his burden on the basis of the Acts elicited in the cross-examination of the complainant. It is also equally true that, if the accused places such evidence so as to disbelieve the case of the complainant, then the presumptions stand rebutted. This view is also supported with the decisions of the Hon'ble Apex Court reported in 2006(3) SCC (CRL) 30 Tamilnadu Marcantile Bank Limited V/s M/s Subbaiah Gas Agency and others. ILR 2009 (2) 1633 Kumar Exports 16 C.C.No.371 of 2019 SCCH-26 V/s Sharma Carpets, AIR 2008 SCC 1325 Krishnajanardhana V/s Dattareya G. Hegde, 2013 SCR (SAR) CRI 373 Vijay V/s Lakshman & another and AIR 2010 SC 1898 Rangappa V/s Mohan and Crl. Appeal No.230 & 231/2019 Bir Singh V/s Mukesh Kumar. Now the question that would arise is whether the accused has rebutted the statutory presumptions available in favour of the complainant.
18. With the evidence of PW-1, the contents of documents are analyzed, it is forthcoming that, the complainant dealing in supply of all industrial requirements and accused husband A.Selvam and complainant firm partner by name Krishnamurthy are well known to each other. As earlier they were working in the same company and in that connection accused husband introduced her wife to complainant firm and partner Krishnamurthy. The accused started purchasing the industrial requirements from complainant partnership firm from the beginning of 2017 and initially accused prompt in making payment. The accused purchased the materials worth of Rs.8,90,786/- from the 17 C.C.No.371 of 2019 SCCH-26 month of July 2017 to April 2018 as per Ex-P8 to 28. The invoices raised by complainant firm and supplied the materials. The accused and her husband have assured they will make payment at the earliest by considering the friendship with accused husband and with hope that accused will clear the bill amount at once the complainant firm supplied materials to accused proprietorship. The complainant firm partner has approached accused and her husband and demanded to clear the bills amount, but both have pleaded their financial difficulties and further both have assured that they will make payment at the earliest. The complainant firm partner waited till September 2018. Again he approached accused and her husband for making payment of bills amount towards payment of invoices i.e., Ex-P8 to 28, they issued six cheques for Rs.4,47,506/-. All the cheques are drawn on Syndicate bank, Hosur branch, Hosur, Tamilnadu. The accused and her husband have promised to complainant, the above said cheques will be honoured on its presentation and also assured that they would make arrangement having sufficient funds in their bank a/c. The 18 C.C.No.371 of 2019 SCCH-26 said cheques on presentation got dishonoured. Therefore he issued statutory notice, the said notice duly served, even though he did not complied and not paid balance due bills towards complainant firm. To substantiate complaint averments, the partner of the complainant firm one S.Krishnamurthy examined as PW-1 and he produced Ex-P1 to 33. PW-1 subjected cross examination by the accused. PW-1 stated during cross examination that they are maintaining books of a/cs and that they are filing ITR for every year and auditing a/cs and that the accused for having purchase the industrial products. The accused purchasing the products from VDK enterprises from the year 2017. Further he denied the suggestion of accused during cross examination that there is no condition with regard to payments in Ex-P8 to 28. Further PW-1 denied the suggestion of accused that Ex-P8 to 28 were created by the partner S.Krishnamurthy for the purpose of this case. Further PW-1 denied the suggestion of accused that he had return the cheque amount and name of the complainant firm without instruction of accused. Further PW-1 stated that he has 19 C.C.No.371 of 2019 SCCH-26 uploaded the invoices in order to pay the GST and he further denied that he has not shown the payment due date in the invoice. Further PW-1 denied the suggestion of accused, he has not supplied invoice products to the accused. Further PW-1 admitted during cross examination that accused working as teacher. Further he admitted that there is no acknowledgment on Ex-P8 to 28 for receiving materials from complainant firm to accused. Further he stated during cross examination that if anybody knowing well to the complainant they would gave open credit by getting post dated cheques. Further he stated that if materials found any defects or rejected by buyer, they would made exchange the materials and they would raise separate invoice as reject invoice. Further PW-1 stated during cross examination that normally the original invoice would handed over to customer. PW-1 during cross examination explained before this court that there is a chance to get another invoice from his office. In the first part of the cross examination dt.26-3-2021, PW-1 clearly admitted that he had not filed any document to show he was one of the partner of complainant firm and other partner of 20 C.C.No.371 of 2019 SCCH-26 complainant firm has duly authorized to represent complainant firm on behalf of other partner. Later Ex-P33 produced by PW-1 on 19-08-2021 before this court. PW-1 stated during cross examination dt.8-9-2021, the said Ex-P33 PW-1 himself prepared in his office in the year 2017. But the said document not produced while filing this complaint before court. PW-1 explained the reasons for non production of Ex- P33 at the time of filing complaint that document not traced in his office. Therefore he could not produce at relevant point of time. Further PW-1 denied the suggestion of accused that Ex- P33 created by PW-1 without getting the consent of other partner and he denied the suggestion of accused, they not yet intimated in writing, accused had how much due towards complainant firm. The other suggestions of accused clearly and categorically denied.
19. The main defence of the accused is that the cheque in question was issued in the name of M/s VDK Enterprises, the present case filed in the name of one S.Krishnamurthy in his personal capacity. M/s VDK enterprises is a partnership firm and not a legal entity. Wherefore the authorization letter 21 C.C.No.371 of 2019 SCCH-26 from the other partner is mandatory to file this complaint. The present complaint not filed in accordance with law. Hence complaint is liable to dismissed on this ground. Further the accused mainly contended his other defence during trial that M/s Sun star technologies issued cheques not by Smt.Sarthamani in her own capacity. In the present case, the complainant has not impleaded the said M/s Sun star technologies company in the case. Therefore criteria prescribed by Section 142 of NI Act is violated. Hence present case liable to be dismissed on this sole ground. The learned accused counsel relied Hon'ble Apex court decisions for his defence and during the course of arguments, learned counsel mainly took this court attention about judgment passed by Hon'ble High court of Karnataka dt.23-01-2009 in Crl.Appeal No.553 to 565/2005 in Govindaram Chanani Vs Latha and others wherein Hon'ble High court of Karnataka held that as per Section 142 of NI Act the complainant must be by the payee or the holder in due course. Further Hon'ble High court of Karnataka referred Apex court decision in that judgment in the case of M/s Shankara finance and investment Vs state of 22 C.C.No.371 of 2019 SCCH-26 A.P. and others 2008 AIR SCW 7493, the principle laid down by the Apex court squarely applicable to the case on hand before Hon'ble High Court of Karnataka and Hon'ble High Court of Karnataka followed the principle of law laid by Hon'ble Apex court.
20. Further learned accused counsel place reliance on Apex court decision Aneeta hada V/s God father travels and tours pvt., Ltd., reported in 2012(5) SCC 661 wherein Apex court held that the decision in Aneeta hada reported in 2000(1) SCC(1) has to be treated as not laying down the correct law as far as it states that the director or any officer can be prosecuted without impleadment of the company. Held as to emphasise the matter would be stand on a different footing where therefore some legal impediment and doctrine of lex non cogit and impossible get attracted. Wherein Supreme Court Division Bench held that Section 141 uses the term person and referes it to a company the company is a juristic person, the concept of corporate criminal liability is attracted to a corporation and company and it is also luminescent from the language employed u/s 141 of the Act. The present 23 C.C.No.371 of 2019 SCCH-26 enactment is one where the company itself and certain categories of officers in certain circumstances or determined to be the guilty of the offence.
Para 22 to 24 same extracted.
21. The company can have criminal liability fastened on it and if a group of persons that guide the business of the companies have the criminal intend, that would be imputed to the body corporate.
22. Section 141 of the Act clearly stipulates that when a person which is a company commits an offence, then certain categories of persons incharge as well as the company would be deemed to be liable for the offence u/s 138 of NI Act. Thus the statutory intendment is absolutely plain the provision makes the functionaries and the companies to be liable and that is by deeming fiction. A deeming fiction as its own signification criminal proceedings against director, for without impleading company as accused held not maintainable.
23. Further accused counsel placed his reliance on Crl.Appeal No.3536/2013 by Hon'ble High court of Karnataka, Kalburgi bench in case between Mohammad Imtiyaz Ahmed 24 C.C.No.371 of 2019 SCCH-26 Khan Vs Mohammed Azmat wherein Karnataka High court followed the larger bench decision of Hon'ble Apex court in the case of Aneetha Hada and held that without making the company a party the complaint is not maintainable.
24. Further learned accused counsel placed reliance on Apex court decision in case between M/s Hindus Airways private Ltd., and others, M/s Magnum Aviation Pvt., Ltd., and others wherein Apex court held that if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier in view of the Apex court the cheque cannot be said to have been drawn for on existing debt or liability.
25. Further learned accused counsel placed reliance on another judgment of our Hon'ble High court of Karnataka in Crl.Appeal No.1028/2010 between Sriram transport finance co., Ltd., Vs Asamabi Shabhana wherein Hon'ble High court of Karnataka held that once the accused has successfully rebutted the presumption u/s 139 of NI Act, the onus shifts 25 C.C.No.371 of 2019 SCCH-26 back to the complainant. It is onus on the complainant to proving the alleged liability from the accused equalent to the cheque amount.
26. On the other hand, learned complainant counsel placed reliance on several decisions during the course of her arguments. In case between Basin Credit Aid Ltd., Vs Rajkumar, High court of Delhi wherein Hon'ble Delhi High Court held that for the offence u/s NI Act, the only criteria prescribed by Section 142 of NI Act is that must be instituted by the payee or holder in due course, the complaint lodged by Manager or other employer who had not been authorized by the board of directors to sign and file the complaint cannot be a ground for quashing the complaint.
27. Further learned complainant counsel placed decision of Hon'ble High court of Karnataka which is reported in 2019(5) KCCR) SN 79 between M/s Ajmera housing corporation Vs Ramachandra wherein Hon'ble High court of Karnataka held that an unregistered firm can maintain a complaint u/s 200 of Cr.P.C. and the Sec.69 of the Indian 26 C.C.No.371 of 2019 SCCH-26 partnership Act 1932 does not bar initiating a criminal auction u/s 138 of NI Act.
28. Further learned complainant counsel placed reliance on Hon'ble Apex court decision in case between Bir Singh Vs Mukhesh Kumar reported in 2019(4) SCC 197 wherein Apex court held that the presumptions are rules of evidence and do not conflict with the presumption of innocence which requires the prosecution to prove case against the accused beyond reasonable doubt. Presumption of innocence is undoubtedly a human right. However, the obligation on the prosecution may be discharged with the help of presumption of law and presumption of fact unless accused adduces evidence showing the reasonable possibility of the non- existence of the presumed fact.
29. Further learned counsel for complainant placed reliance on recent decision of Hon'ble Apex court in case between Sumeti Vij Vs M/s Paramount Tech Fab Industries wherein Apex court held that regarding presumptions u/s 118A and 139 of NI Act, there is a mandate of presumption of consideration in terms of the provision of the Act. The onus 27 C.C.No.371 of 2019 SCCH-26 shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of NI Act. Further wherein Apex court held that to rebut this presumption, facts must be adduced by the accused which on a preponderance of probability (not beyond reasonable doubt as in the case of criminal offences).
30. Further learned counsel for complainant placed reliance and decision of Apex court in case between Kishan Rao Vs Shankar gouda reported in AIR 2018 SCC 3173 Supreme court of India wherein Apex court held that complainant proving issuance of cheque having signatures of accused failing to rebut presumption raised against him and no evidence lead by accused in support of his case. Acquittal of the accused by the High court in revisional jurisdiction on the ground of doubt in mind of curt with regard to existence of loan improper and accused liable to be convicted.
31. Further learned complainant counsel placed reliance on Apex court decision in case between Uttam Ram Vs Devinder Singh Hudan which is reported 2019(10) SCC 28 C.C.No.371 of 2019 SCCH-26 287 wherein Apex court held that the accused has failed to lead any evidence to rebut the statutory presumption the complainant proved that the cheque in question were drawn for consideration and the holder of the cheque received the same in discharge of existing debt, thereafter onus shifts on the accused to establish a probable defence so as to rebut such presumption.
32. By considering the learned both counsel arguments and the principle of law laid down by Hon'ble Apex court it is clear from Apex court decision that as per Section 141 of NI Act, the complaint shall be filed by payee or holder in due course. Further if cheque issued by firm in favour of firm, they shall arrayed as accused or complainant. Further in case of offence u/s 138 of NI Act, r/w sec.118A and 139 of NI Act drawing presumption in favour of complainant the complainant initially proved he received signed signatures of accused for discharge of existing legally dischargeable debt or loan. In this scenario now onus shifted on accused he has to explain by utilizing evidence placed by complainant or accused can himself produce some evidence, he can probablise the 29 C.C.No.371 of 2019 SCCH-26 case of the complainant the cheque in question was not issued by the accused for the purpose of discharge of legally recoverable debt or there is no subsist of loan or any liability.
33. Now the present case in hand facts are analyzed the payee or holder in due course was M/s VDK enterprises. The said VDK enterprises unregistered partnership firm. While sending statutory notice, the Ex-P5 sent to accused on the instructions given by partner of complainant firm and complainant firm had been represented by its partner one S.Krishnamurthy. Admittedly Ex-P5 duly served on accused last known address as per Ex-P7. Despite duly served on accused, she did not make payment or replied to Ex-P5. Further it is pertinent to note that on careful perusal of cause title of this case, it is forthcoming that while filing this complaint, complainant name mentioned as Sri.S.Krishnamurthy partner of M/s VDK enterprises and accused name mentioned in the cause title as Smt.T.Sarthamani -Proprietrix of Sun Star Technologies. The partnership firm and sole Proprietrix made as party to this proceedings. The said firm and Proprietrix represented by 30 C.C.No.371 of 2019 SCCH-26 partner and sole Proprietrix. A bare reading of Section 69(2) of Partnership Act shows that Section 69(2) prohibits the enforcement of rights in respect of unregistered firm by way of suit. The same does not relate to a criminal complaint. Therefore, there is no bar to the criminal complaint that has been filed and non registration of the firm would not bar the prosecution of an accused on the ground that firm was not registered. The said provision again reiterated by Hon'ble Supreme court of India in the case of Kamal Publishes enterprises Vs D.R. Construction company reported in 2000(6) SCC 659 and further the same fact had been observed by Hon'ble Supreme court in case between Beacon industries represented by its partners, Bangalore Vs Anlampam Ghosh. The present case in hand the complainant firm was unregistered firm it is not a legal entity like company etc., As per Section 69(2) of partnership Act, there is no bar to file complaint u/s 138 of NI Act against the accused. The present complainant made firm as a party to this proceedings and also he made sole proprietorship of accused made as a party to this proceedings. In view of the 31 C.C.No.371 of 2019 SCCH-26 complainant made party to the proceedings i.e., complainant firm and accused sole proprietorship the defence taken by accused, the present complaint was not maintainable for non making firm and proprietorship as a party to this proceedings cannot be sustainable. Further the main defence of the accused is that the present complainant had been not authorized by another partner of complainant firm. Therefore the present complainant was not competent to prosecute the case against this accused. Admittedly the complainant firm did not produced authorization letter or authority before this court during first part of cross examination. Later complainant produced Ex-P33. Ex-P33 reveals that the complainant firm had two partners and it is a unregistered partnership firm, another partner Smt.Veena had authorized present complainant/another partner to represent on behalf of firm before competent authorities and quasi judicial authorities and before courts of law. In production of Ex-P33 the defence of accused goes, even PW-1 admitted during cross examination he did not produced any authorization letter and he was partner of complainant firm, later it is clarified and 32 C.C.No.371 of 2019 SCCH-26 produced Ex-P33. Therefore the defence took by accused does not sustainable. The decisions relied by accused is also not applicable to case of the accused. Therefore the Apex court decisions relied by accused is not applicable to the present case facts.
34. The case of the complainant is that the accused husband and complainant are well known to each other, earlier they are working in the same company. The husband of accused introduced the accused and her proprietary concern to the complainant and the accused started purchasing industrial requirements from the complainant from the beginning of 2017. The accused had purchased materials worth of Rs.8,90,726/- from the month of July 2017 to April 2018. For such they raised invoices as detailed described in their complaint. The accused and her husband assure to make payment, considering the friendship of accused husband and complainant, the complainant firm provided sufficient time for making payment. But accused did not made payment well in time. After repeated enquiry and demand, request made by complainant, they issued cheque in 33 C.C.No.371 of 2019 SCCH-26 question. The said cheque in question were dishonoured for the reason of Funds Insufficient. Therefore he instituted this complaint for recovery of disputed cheque amount. To prove above facts, the burden lies on complainant. To substantiate above facts, he mainly relied Ex-P1 to 33. Ex-P1 and 2 cheques which were issued in favour of complainant firm bear signatures belongs to accused, the accused signed on Ex-P1 and 2 on the capacity of sole proprietor of Sunstar Technologies. The complainant issued legal notice as per Ex- P5 on 28-11-2018, the said legal notice duly served on accused on 7-12-2018. Admittedly it was not disputed by accused. The accused did not replied or made payment of disputed cheque amount. The complainant mainly relied Ex- P8 to 28 are invoices raised by VDK enterprises which is commencing from 17-7-2017 to 28-4-2018. The accused questioned PW-1 during cross examination, there is no purchase order from accused and there is no acknowledgment from the accused for receiving materials as per Ex-P8 to 28. On careful perusal of Ex-P8 to 28, it is forthcoming that the accused made purchase order through mail and verbal. It was 34 C.C.No.371 of 2019 SCCH-26 clearly mentioned in all the invoices. Further there is a due date for payment. Admittedly there is no acknowledgment from accused for receiving materials as per invoices. For this PW-1 clearly admitted during cross examination that there is no document accused for receiving materials from complainant firm. On perusal of Ex-P8 to 28, they contains entire descriptions of materials supplied to accused proprietorship address. It is the case of the complainant that accused husband and present complainant are well known to each other, normally accused husband ordered through his whatsapp and he will collected materials personally. Therefore there is no acknowledgment for receiving materials from complainant firm. Due to intimacy between complainant and accused husband, the complainant firm did not took acknowledgment from accused proprietorship. So this fact had been not pleaded in the complaint and notice, but it is elicited during cross examination through the mouth of PW-1. Further complainant produced Email conversation order placed by accused proprietorship and he demanded due payment through Email to accused. Further he produced GST 35 C.C.No.371 of 2019 SCCH-26 uploaded statement of complainant firm, they paid GST to the competent authority. The materials which were supplied to the accused proprietorship. The materials placed from complainant firm Ex-P8 to 28 and GST payment vouchers and Ex-P1 and 2, this court can came to conclusion that there is a business transaction with complainant firm and accused from 2017 to 2018, the accused purchased materials as per Ex-P8 to 28 and accused proprietorship had due of Rs.8,57,300/- to discharge the same, the cheques in question were issued in favour of complainant firm. When complainant firm produced original signed cheques of accused and statutory notice issued by complainant firm the said notice duly served on accused, there is no reply from the side of accused at appropriate time and in support of Ex-P1 to 5, he produced Ex-P8 to 33 and complainant firm claiming on the basis of above documents disputed cheque amount due from accused on the basis of Ex-P8 to 28. So from this document, it is clear from present case invoices and disputed cheque accused has due of Rs.84,950/-. To rebut this document, burden lies on accused, but accused did not produced any 36 C.C.No.371 of 2019 SCCH-26 document to show she did not received any materials from the year 2017 to 2018. The accused claims while recording 313 statement, she had evidence from her side. This court provided sufficient time for produce and adduce her evidence, but she did not adduce and produce any evidence from her side. The accused herself orally submitted, she had no evidence. Therefore this court closed defence evidence as Nil. The documents produced by complainant firm it can be presumed that the accused husband on behalf of her wife he made/placed purchase orders verbally and through Email and through whatsapp. In turn the complainant firm supplied industrial materials to accused. The accused had due total sum of Rs.8,57,300/- for discharge of the same, she issued six signed cheques in favour of complainant firm. As per Section 20 of NI Act, if once authority given the holder in due course can filled-up particulars and may presented for encashment through his banker. There is no bar in act to fill Negotiable Instruments. During the course of cross examination, the accused suggested PW-1 the cheque in questions were filled by complainant and he contended that the handwritings on Ex- 37 C.C.No.371 of 2019
SCCH-26 P1 and 2 are different not wrote by accused. In view of the Section 20 of NI Act, this suggestion of accused does not sustained because Act itself authorized to fill cheques. Therefore defence of the accused does not sustainable. The complainant firm claiming disputed cheques amount on the basis of Ex-P 8 to 28, this documents are with consoance with other documents i.e., GST payment document and ITR documents. The present accused did not disputed bear signature in Ex-P1 and 2. Ex-P1 and 2 were returned as unpaid for the reasons of Insufficient of Funds. He issued Ex- P5 for calling accused for made payment. The accused did not replied at relevant point of time. The complainant produced Ex-P8 to 33, this documents clearly establishes the complainant firm and accused proprietorship have business transactions from 2017 to 2018. The answers elicited in the cross examination of PW-1 and defence of the accused is sufficient to hold Ex-P1 and 2 issued towards the discharge of subsisting debt.
38 C.C.No.371 of 2019
SCCH-26
35. The cheque is an instrument comes under the N.I Act holder in due course of the cheque, has got good title over the cheque. Therefore on the basis of evidence of PW1 and documentary evidence it clearly establish that the accused issued the disputed cheque to the complainant company for legally dischargeable debt. The complainant company has complied all essential ingredients of Sec.138 of NI Act. When complainant company complied all essential ingredients of Sec.138, as per Sec.139 of NI Act the cheque is issued for legally recoverable debt. The judgments relied by complainant counsel which is reported 2019(4) SCC 197 Bir Singh Vs Mukhesh Kumar and AIR 2018 SC 3173 Kishan Rao Vs Shankar Gowda, Uttam Ram Vs Devinder Singh Hudan reported in 2019 (10) SCC 287 are squarely applicable the facts and circumstances of the complainant's case.
36. On careful examination of all the documents of complainant, it is very clear that the complainant firm filed this complaint well within time and complied all the ingredients of Section 138 of N.I. Act 1881. The presumption Under Section 139 of the NI Act is a presumption of law, it is 39 C.C.No.371 of 2019 SCCH-26 not a presumption of fact. This presumption has to be raised by the court in all the cases once the factum of dishonor is established. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttable evidence depends on the facts and circumstances of each case. Such evidence must be sufficient to prove the case. Therefore a mere explanation is not sufficient to rebut this presumption of law. It is profitable to refer and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.123/2021 arising out of special leave petition (criminal) 1876/2018 between M/s Kalamani Tex and another Vs P.Balasubramanian disposal date on 10-02-2021 (three judges bench). In this case, Apex court held that, "once signature on cheque admitted by the accused, court ought to have presume that, cheque was issued as consideration for a legally enforceable debt."
37. It is pertinent to refer and relied Hon'ble Apex court recent decision passed and relied by the learned complaiannt counsel in Criminal Appeal No.292/21 between Sumethi 40 C.C.No.371 of 2019 SCCH-26 Vij Vs. M/s Paramount Tech FAB Industries (Division Bench) disposed dated 9.3.2021 In this case Apex Court held that under Section 139 of the Act, a presumption is raised that holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut this presumption, facts must be adduced by the accused which on preponderance of probability (not beyond reasonable doubt as in the case of criminal offence. Must then be proved.
38. Further Apex court clarified that there is a mandate of presumption of consideration in terms of the provision of the act under Section 118 and 139 of Negotiable Instrument Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of section 138 of the NI Act.
39. As per N.I. Act, the presumption is in favour of holder of cheque. Here, the holder of cheque is complainant and presumption is in favour of complainant. It is burden on the 41 C.C.No.371 of 2019 SCCH-26 accused to rebut the above presumption. As per Section 118 of N.I Act, presumption has to be raised by the court in all the cases once the factum of dishonour is established, but it is rebuttal presumption. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and should prove beyond any reasonable doubt. The accused has not taken and proved defence to rebut the presumption of law available in favour of the complainant envisaged U/s 118 r/w section 139 of NI Act. Accordingly the case of the complainant is acceptable as the complainant has proved that accused has intentionally without having sufficient money in her account and issued disputed cheques. Therefore, a mere explanation is not enough to repel this presumption of law.
40. Therefore in my considered view, the complainant firm has established his case by way of documentary as well as oral evidence. Being accused liable to pay outstanding due 42 C.C.No.371 of 2019 SCCH-26 amount of Rs.84,950/-. to the complainant firm. Hence my answer to point No.1 to 3 in the Affirmative.
41. Point No.4: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. It is worth to note that the offence is of the nature of civil wrong. This court has power to impose both sentence of imprisonment and fine on the accused. This court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Hon'ble supreme court of India in a decision reported in 2015 (17) SCC 368 in a case of H.K.Pukhraj Vs D.Parsmal observed that having regard to the length of trial and date of issuance of cheque it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Further accused has to compensate the complainant in terms of money. In the result, I proceed to pass the following:-
43 C.C.No.371 of 2019
SCCH-26
-: O R D E R :-
By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.1,10,000/- (Rupees One lakh ten thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.1,05,000/- shall be payable to the complainant as compensation and remaining amount of Rs.5,000/- shall be defrayed as state expense.
In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith.
(Dictated to the stenographer, through online computer, thereof is corrected and then pronounced by me in the open Court on this the 26th November 2021) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
44 C.C.No.371 of 2019
SCCH-26
ANNEXURE
WITNESSES EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW-1: S.Krishnamurthy
DOCUMENTS MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P-1, 2: Cheques
Ex.P-1(a) & 2(a): Signatures
Ex.P-3 & 4: Bank memo
Ex.P-5: Legal notice
Ex.P-6 : Postal receipt
Ex.P-7: Postal Acknowledgment
Ex.P-8 to 28 : Tax invoices
Ex.P-29: Original copy of the audit balance
for the year 2018-2019
Ex.P-30: Original copy of the audit balance
for the year 2019-2020
Ex.P-31: 65B certificate
Ex.P-32: Statement showing GST invoices
Ex.P-33: Original copy of resolution
dated 15-6-2017
WITNESSES EXAMINED ON BEHALF OF THE ACCUSED: NIL DOCUMENTS MARKED ON BEHALF OF THE ACCUSED: NIL (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.