Bangalore District Court
Sri.Sathish Kumar vs Twinspark Motors on 31 March, 2022
1
C.C.No/10435/2018
IN THE COURT OF THE XIX ADDL. CHIEF
METROPOLITAN MAGISTRATE AT BENGALURU CITY.
Dated this the 31st day of March 2022.
PRESENT:SRI.FAROOQ ZARE,B.A.(Law)LL.B.L.L.M.
XIX ADDL.C.M.M., BENGALURU.
Case No: :- C.C.No.10435 of 2018
COMPLAINANT :- Sri.Sathish Kumar
S/o Late B.H.Srikantappa,
Aged about 47 years,
R/at No.259, 5th Main,
Milk Colony,
Malleshwaram West,
Bengaluru-560055.
(By Sri.G.S.P.K., Advocate)
-V/s-
ACCUSED :-1 Twinspark Motors
A Partnership Firm Having
Office, At No.15, 5th Main,
Shanthivana, Kodigehalli Main
Road, Sahakarangar,
Bengaluru-560092
Represented by its Partner
:-2 Praveen Prabhakar
Partner, Twinspark Motors,
No.15, 5th Main,
Shanthivana, Kodigehalli Main
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C.C.No/10435/2018
Road, Sahakarangar,
Bengaluru-560092.
:-3 Nagendra S. Murthy
Partner, Twinspark Motors,
No.15, 5th Main,
Shanthivana, Kodigehalli Main
Road, Sahakarangar,
Bengaluru-560092.
(By Sri. K.P.T., Advocate)
Offence complained of: :- U/s.138 of N.I.Act.
Plea of accused: :- Pleaded not guilty.
Opinion of the Judge: :- Accused found guilty.
Date of order: :- 31st March, 2022.
JU DG MEN T
The complainant has filed this complaint U/s.200
of Cr.P.C. against the accused for the offence punishable
U/s.138 of N.I.Act.
2. The brief facts of the complaint are that;
Accused No. 2 and 3 are partners in the firm of
accused No.1 dealing with motor cycle accessories,
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C.C.No/10435/2018
riding gear and a cafe under the name and style "X-
Torque Cafe. Accused No. 2 and 3 being well acquainted
with complainant for nearly 2 years and being fully
aware of the fact of his expertise in motor cycles and the
repairs, expressed there desire of inducting him as a
partner in the first accused firm for starting a motor
cycle service center and it was decided amongst accused
No. 2 and 3 as well as complainant to start partnership
firm under name and style "X-Torque Cafe as unit of
Twinspark Motors. Further it was decided among
accused No.2 and 3 and complainant that an initial
investment of Rs.15,00,000/- would made by the
complainant.
3. The land was identified and leased for period of
5 years from one Sri Bhuvanesh at No.15, 5 th Main,
Shantivana Kodigehalli Main Road, Sahakaranagar,
Bengaluru-560092. The accused No. 2 and 3 agreed to
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C.C.No/10435/2018
set down X-Torque Cafe located at HSR Layout and also
agreed with the complainant to get a new partnership
deed done once the final audit report on the financial
workings and valuation existing stock at the time of
closing down X.Torque Cafe was completed by the
Auditors appointment by the accused No.2 and 3.
4. By reposing faith and trust on the accused
No.1 and 2 as the compliant would be indicted as a
partner, the complainant has made the following
payments as agreed, in favour of account pertaining to
accused No.1 to which accused No.2 and 3 are the
authorized signatories.
Date Description Ref.No Amount
(Rs.)
04.07.2017 NEFT DR-YESB0000022- N18616016- 3,00,000/-
Twinspark Motors-NETBANK, 6642033
MUM-N186160166642033
12.08.2016 NEFT DR-YESB0000022- N22516017- 1,00,000/-
Twinspark Motors-NETBANK, 8386254
MUM-N225160178386254
15.09.2016 NEFT DR-YESB0000022- N25916018- 4,00,000/-
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C.C.No/10435/2018
Twinspark Motors-NETBANK, 7669848
MUM-N259160187665121
19.11.2016 NEFT DR-YESB0000022- N32416020- 3,00,000/-
Twinspark Motors-NETBANK, 8618330
MUM-N324160208618330
Total amount transferred through NEFT 14,50,000/
-
Cash towards petty expenses 50,000/- Total amount invested by our Client towards TORQ92 15,00,000/
-
5. The complainant further claim that even though construction was started to setup the business unit, there was undue delay at the instance contractors and due to the complainant's family intervention by way of personal expenditure. The construction was completed and TORQ92 was opened for business on 27.10.2016. The complainant kept on reminding the accused No. 2 and 3 about pending partnership deed but the same was met with no response from them. However, accused No. 2 and 3 always kept on claiming and giving excuses that audit work was still going on 6 C.C.No/10435/2018 and the partnership deed could be completed after audit report presented. When the complaint enquired about the monthly financial reports on the business being conducted, it was again met with same excuse of audit being in progress.
6. The complainant further states that, when the accused No.3 was asked with responsibility of interacting with the auditors to ensure timely financial audit closer accused No.3 kept on avoiding all questions relate to audit as well as partnership deed and always claimed the audit was nearing completion but the same was never materialized. The complainant however was worried about indefinite delay in getting the partnership agreement completed and evasive answers given by accused No.2 and 3 forced the complainant to question about delay and intention of the accused No.2 and 3. 7
C.C.No/10435/2018
7. The complainant further states that on continuous remainders made by him, on 28.06.2017 the accused No. 2 and 3 asked the complainant to submit certain documents to the auditors which was duly complied by him on 29.06.2017. Despite providing all the relevant document the partnership deed was never completed. The accused No.2 and 3 started avoiding all requests for completion of partnership deed and also started taking decisions independently without knowledge of the complainant and started keeping him out of the financial aspects of day to day business of TORQ92. On 10.11.2017 the accused No.2 made an announcement in the social media that one Sri.Mahendra Basavaraju was being taken into TORQ92 as a partner and this decision to take an additional partner was done without consulting complainant and when he questioned about it, accused No.2 and 3 replied 8 C.C.No/10435/2018 that the intended to buy the partnership are the complainant and are no more interested in continuing the partnership and not interested executing the partnership deed.
8. After due deliberation and discussion amongst complainant and accused No.2 and 3 it was finally agreed to settle the claim of the complainant in terms of money. It was agreed to pay the complainant a sum of Rs.14,00,000/- was paid by way of two cheques on 11.11.2017 and balance of Rs.16,00,000/- was paid in the form of cheque bearing No.000030 dated 11.02.2018 drawn on Yes Bank, Kasturba Road, Bengaluru in favour of the complainant and he was requested to present the same during the end of second week of February 2018. Accordingly the complainant presented the said cheque with his banker HDFC Bank, 9 C.C.No/10435/2018 Sadashivanagar, Bengaluru but the same was dishonoured with an endorsement "Funds Insufficient"
and the same was intimated to the complainant on 17.02.2018. The complainant got issued legal notice on 17.03.2018 to the accused through RPAD demanding them to make good payment of the cheque amount. The notice has been duly served on the accused and they have caused reply admitting the issuance of cheque but have taken untenable contentions.
9. On presentation of the complaint, the cognizance was taken of the offence punishable U/sec.138 of N.I.Act and registered it as P.C.5393/2018. The sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, it was registered as Criminal case in 10 C.C.No/10435/2018 register No.III and the process was issued to the accused.
10. On receipt of the summons, the accused No.2 and 3 have appeared before the court through their counsel and secured bail. They were furnished with the prosecution papers. The substance of the accusation was read over and explained to them. They pleaded not guilty and claimed to be tried.
11. The complainant has himself got examined as PW1 and got marked documents at Exs.P1 to Ex.P10. 12. The statement of the accused No. 2 and 3 U/sec.313 of Cr.P.C., was recorded. They denied the incriminating evidence appearing against them. On behalf of accused No.2 and 3, accused No.2 himself got 11 C.C.No/10435/2018 examined as DW-1 and got marked documents at Ex.D1 to Ex.D26.
13. Heard the arguments of both the sides.
14. The points that arise for my consideration are as under;
1. Whether the complainant proves that the accused No.2 and 3 have issued cheque at Ex.P1 for sum of Rs.16,00,000/- in his favour towards discharge of their liability.?
2. Whether the complainant further proves that the said cheque was dishonoured as "Funds Insufficient" when it was presented for encashment.?
3. Whether the complainant further proves that he has complied with the mandatory provisions of Section 138 of N.I.Act.?
4. What order ?12
C.C.No/10435/2018
15. My findings to the above points for consideration are as under:
Point No.1:- In the Affirmative. Point No.2:- In the Affirmative. Point No.3:- In the Affirmative. Point No.4:- As per final order for the following;
:: R E A S O N S ::
16. Point No.1:- As regards legally enforceable debt or liability the Hon'ble Supreme Court in the case of Rangapa v/s Sri. Mohan reported in (2010) 11 SCC 441 has held that "The presumption mandated by Sec.139 of the Act includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and its open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested.
However, herein, there can be no doubt that there is an initial presumption which favours the complainant. 13
C.C.No/10435/2018 When an accused has to rebut the presumption U/sec. 139, the standard of proofs for doing so is that of preponderance probabilities. Therefore, when the accused is able to raise a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own".
17. If the facts and circumstances of the case are considered in the light of above said principle of law it is clear that the accused have not disputed during the trial that the cheque in question is drawn on their bank account and it bears their signature. Therefore, the statutory presumption arises U/sec.118(a) and 139 of N.I. Act in favour of the complainant that the cheque in 14 C.C.No/10435/2018 question is issued for consideration in discharge of debt or liability. The burden of rebutting the said presumption by probable defence is on the accused.
18. The complainant in his evidence has repeated the averments of the complaint and he has also relied upon documents Ex.P1 to Ex.P10.
19. It is relevant note here that during the pend ency of the case accused No.3 reported to be deed and as such case against accused No.3 stands abated. At the very outset it is necessary state the admitted facts between the parties. It is an admitted fact that accused No.2 and 3 are partners of Twins park Motors. It is not in dispute that both accused No.2 and 3 as well as complainant have agreed to invest Rs.15,00,000/- each for commencing a partnership concern under the name and style TARQ92. It is not in dispute that for 15 C.C.No/10435/2018 commencing the said partnership concern, both the parties have identified a land. The accused No.2 and 3 have also admitted that they have issued two cheques in favour of the complainant as stated in the complaint.
20. The accused No.2 and 3 by way of issuing reply notice, cross examining PW1 and leading defence evidence have raised certain defenses before the court to rebut the statutory presumptions available in favour of the complainant U/sces.118(a) and 139 of N.I.Act.
21. PW1 is cross examined at length. The accused No.2 and 3 have contended that as the filing of income tax return and getting Audit report from the Auditor was delayed, commencing partnership deed was not materialized. On negotiation it was agreed between complainant as well as accused that a sum of Rs.13,00,000/- to be paid to the complainant for 16 C.C.No/10435/2018 investment of the complainant. Accordingly, they have paid entire amount and there is no any due payable by them.
22. The accused has relied upon statement made by the complainant during his cross examination in the massage at Ex.D5 as the complainant while outgoing from the partnership concern is waing a sum of Rs.15,00,000/- as a gift. However, it is relevant to note here that by presenting the cheque in question for encashment and after following legal formalities, he has initiated proceedings against accused U/sec.138 of N.I.Act. Therefore the above said admission given by the complainant is not helpful to the accused.
23. The accused have also contended that income tax returns was not submitted and the audit report was not prepared by the auditor, the commencement of partnership concern was not materialized. Except the 17 C.C.No/10435/2018 self serving statement made by the accused No.2 in his evidence and such contention raised in the reply notice no other material has been produced by him before the court to substance said contention.
24. The accused have also contended that while the complainant working in the partnership concern he collected money from a few customers and on contacting them, the said customers told them that the complainant has received the balance amount. There is nothing on record show that as the complainant has misutalized the money given by the customers they have taken necessary legal steps against the complainant. Apart from it, it is the not the case of the accused that they have initiated appropriate proceedings against the said customers for recovery of said amount from them.
25. It is the prime contention of the accused that as the complainant has misused the cheque they have 18 C.C.No/10435/2018 filed the criminal case against the accused. It is contended that as a practice they used to keep one or two signed cheques in the drawer at the store for emergency purpose in case they are traveling and some time in August 2017 when both accused No.2 and 3 were not present the complainant has taken one of the signs cheques when the store manager was occupied elsewhere. The accused in support of his contention has produced the certified copies of Private complaint, Order sheet, FIR relating to PC No.5793/2018. To counter this contention DW1 is subjected to his cross examination. In the cross examination DW1 has clearly admitted that they have filed a complaint with the Kodigehalli Police station after receipt of legal notice from the complainant. It is the argument of the learned counsel for the complainant that since the accused have filed private complaint against the complainant after receipt of legal notice the said contention of the accused is an after 19 C.C.No/10435/2018 thought. It is the not the case of the accused that before issuance of demand notice by the complainant they have lodge private complaint before the competent court or police complaint with the police station concerned. If the accused were to file complaint against the complainant before filing this case or receipt of demand notice, the things would have been different. Therefore, it is nothing but an after thought exercise under taken by the accused to escape from the clutches of law. It is relevant note here that in the cross examination of PW1 it is suggested that whenever accused used to go outside, the cash as well as cheque were with the complainant which has been denied by PW1. This fact as suggested by the accused has not been stated either in the reply notice or in his examination chief.
26. It is very difficult to accept the contention of the accused that the use to keep one or two cheques in the drawer whenever they were traveling because no 20 C.C.No/10435/2018 ordinary prudent man would do this type of acts in business affairs. It has come in the evidence of the DW1 TARQ92 partnership concern is still in existence.
27. According to the complainant it was agreed amongst accused No.2 and 3 and himself that a sum of Rs.30,00,000/- was agreed to be paid to him and a sum of Rs.14,00,000/- was paid through two cheques on 11.11.2017 and for paying balance of Rs.16,00,000/- accused No.2 and 3 have issued cheque in question.
28. However, according to the accused No.2 and 3 it was agreed that a sum of Rs.15,00,000/- in full and final settlement was agreed to be paid to the complainant and the complainant's friend had to pay a sum of Rs.96,387/- towards repair and service charges to the service center and he stated that he would pay the said amount to the complainant and there was over due personal billings in a sum of Rs.17,922/- from 21 C.C.No/10435/2018 complainant side and complainant agreed to receive balance of Rs.13,97,984/- and said amount was paid through cheque bearing No.000045 dated 11.11.2017 and a sum of Rs.12,299/- was paid to the complainant through cheque No.000046 darted 11.11.2017 and the said cheques were encashed. There is no dispute that these two cheques were encashed by the complainant and the complainant has also admitted in his cross examination these two cheques were encashed by him. PW1 also in his cross examination admitted that his friend namely Prakash had to pay a sum of Rs.96,387/- towards repair of his vehicle.
29. The accused No.2 and 3 have contended that regarding dispute between themselves and complainant, a negotiation was held with one Shivakumar and same has been admitted by during his cross examination. It is relevant to note here that the defence side has got 22 C.C.No/10435/2018 marked whatsapp messages as per Ex.D1 to Ex.D6 during the course of cross examination of PW1 on confrontation. It is to be noted here that these whatsapp messages do not come to the aid of accused to rebut the statutory presumption all over the in favour of the complainant.
30. DW1 in his examination chief has repeated the contentions taken in the reply notice. In the cross examination DW1 has admitted that after receipt of legal notice he filed a false case against the complainant. DW1 in support of his case has produced certified copies of private complaint, order sheet in P.C.R No. 5793/2018 at Ex.D7 and Ex.D8 and certified copy of FIR in Crime No.137/2018 at Ex.D9 and certified copy of two pages of charge sheet in C.C.No.8722/2019 at Ex.D26. In view of the above said admission given by DW1 saying that he has filed false case against the 23 C.C.No/10435/2018 complainant, the above referred to documents are not helpful to him.
31. The accused No.2 and 3 in support of their case have got examined one witness as DW2. According to his oral testimony the complainant has invested a sum of Rs.15,00,000/- in the partnership and later he by taking his amount he has gone out of the partnership concern. As already stated above the accused No.2 and 3 have contended that they would keep one or two blank cheque in the shop when they intend to travel outside. However, DW2 in his examination chief has stated that during February 2018 the bank informed that a sum of Rs.16,00,000/- in favour of the complainant was dishonoured and later it came to know that the complainant misused the cheques. It is relevant to note here that DW2 had given a different version in his examination chief. It is not explained by the accused that why the complaint was not lodged immediately after 24 C.C.No/10435/2018 came to know about misuse of cheque. Therefore, it is clear that the contention raised by the accused regarding misplacing of cheque and misusing of it by the complainant cannot be acceptable.
32. It is to be noted here that DW2 has given his evidence in his examination chief before the court on behalf of accused No.2. However, during his cross examination he has clearly stated that his examination- in-chief came to be prepared in police station. Such being the case the testimony of DW2 is not helpful to the accused. Apart from it DW2 in his cross examination has also stated that he doesn't know anything regarding parting with Rs.15,00,000/- by complainant in the partnership concern. DW2 is also stated in his cross examination that Praveen Prabhakar used to look after the banking transaction as well as cash transaction. However he has pleaded ignorance saying that he 25 C.C.No/10435/2018 doesn't know anything about issuance of cheque by the accused in favour of complainant.
33. From the material placed on records by the both the sides this court is of the opinion that the accused No.3 has failed in rebutting the statutory presumptions operating in favour of the complainant U/secs.118(a) and 139 of N.I.Act. In other words the case of the complainant stands unrebutted and he has proved that accused No.2 and 3 have issued cheque in question at Ex.P1 towards discharge of legally enforceable liability. It is to be noted here that since during the pendency of the case, accused No.2 reported to be dead, accused No.3 to pay cheque amount to the complainant. Accordingly Point No.1 is answered in the Affirmative.
34. Point No.2:- According to the complainant the cheque in question at Ex.P1 was returned unpaid with 26 C.C.No/10435/2018 an endorsement as "Funds Insufficient". The bank memo produced by the complainant at Ex.P2 reveals that cheque was returned unpaid for the reasons "Funds Insufficient". The bank memo at Ex.P2 proves dishonour of cheque for the reasons "Funds Insufficient" by virtue of presumption raised U/sec.146 of N.I.Act and during the trial Ex.P2 went uncontroverted. Hence, I answer point No.2 in the Affirmative.
35. Point No.3:- The cheque in question at Ex.P1 was returned unpaid with bank endorsement on 17.02.2018 as per bank memo at Ex.P2. It is clear from Ex.P3 the office copy of legal notice that, the complainant caused demand notice on 17.03.2018 informing the accused about dishonour of the cheque and making demand for repayment of amount covered under the cheque in question. On perusal of Ex.P1 to Ex.P9 it is evident that the complainant has presented 27 C.C.No/10435/2018 the cheque within its validity and it was returned unpaid on 17.02.2018 as well as he caused legal notice within one month from the date of intimation of dishonour of the cheque. During the trial the accused has not denied the service of demand notice.
36. The records disclose that after causing demand notice, the accused has not repaid amount covered under cheque Ex.P1 after expiry of fifteen days statutory period from the date of service of notice, the complaint is filed well within the period of limitation. As accused has failed in paying amount covered under cheque at Ex.P1, all the essential ingredients of section 138 of N.I.Act have been complied with and thereby accused No.3 has committed the said offence. Accordingly point No.3 is answered in the Affirmative. 28
C.C.No/10435/2018
37. Point No.4:-In view of my findings on the above points, I proceed to pass the following;
O RDE R Accused No.3 is convicted U/sec.255 (2) of Cr.P.C., for the offence punishable u/Sec.138 of N.I.Act.
The accused No.3 is sentenced to pay a fine of Rs.19,10,000/-. In default of payment of fine, the accused No.3 shall undergo simple imprisonment for a period of 6 (six) months. Out of the total fine amount, an amount of Rs. 19,00,000/- shall be paid to the complainant as compensation U/sec.357(1)(b) of Cr.P.C and the remaining amount of Rs.10,000/- shall be remitted to the state.
The bail bond of the accused No.3 stands cancelled while the cash surety of Rs.15,000/- that was deposited by accused No.3 on 21.07.2018 is ordered to be forfeited to the state.
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C.C.No/10435/2018 Office to furnish a free copy of this Judgment to the accused No.3 forthwith.
(Directly dictated to the Stenographer on computer, typed by him, corrected by me and then pronounced in the Open Court on 31st March, 2022.) (FAROOQ ZARE) XIX ADDL.C.M.M., Bengaluru.
::ANNEXURE::
Witnesses examined on behalf of the Complainant:
PW.1 :- Sathish Kumar.
Documents marked on behalf of the Complainant:
Ex.P1 :- Cheque. Ex.P1(a) :- Signature of the Accused Ex.P2 :- Bank Endorsement. Ex.P3 :- Office copy of the legal notice. Ex.P4 to Ex.P6 :- Postal receipts. Ex.P7 to Ex.P9 :- Postal Track Consignments report. Ex.P10 :- Reply notice.
Witnesses examined on behalf of the Accused:-
DW.1 :- P.Praveen.
DW.2 :- Karumbaiah K.P.
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C.C.No/10435/2018
Documents marked on behalf of the Accused:-
Ex.D1 to Ex.D6 :- Copies of Whatsapp Messages. Ex.D7 :- Certified copy of P.C.R NO.
5793/2018.
Ex.D8 :- Certified copy of order sheet in P.C.R NO. 5793/2018.
Ex.D9 :- Certified copy of FIR. Ex.D10 :- Copy of Whatsapp Message. Ex.D11 :- Affidavit of Evidence U/Sec.65-B of the Indian Evidence Act. Ex.D12 to Ex.D20 :- Invoices. Ex.D21 :- Indian Income Tax Return Acknowledgment in Assessment year 2017-18. Ex.D22 :- Balance Sheet as at 31st March 2017. Ex.D23 :- Statement of Profit and Loss for the year ended 31st March 2017. Ex.D24 :- Indian Income Tax Return Acknowledgment in Assessment year 2018-19. Ex.D25 :- Account Statement bearing No. 002283800012438. Ex.D26 :- Certified copy of Charge sheet (two pages) in C.C.No.8422/2019. (FAROOQ ZARE) XIX ADDL.C.M.M., Bengaluru.