Bangalore District Court
Terraserve Foods Pvt. Ltd vs Shree Basava Enterprises on 12 September, 2024
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CC No.36942/2022
KABC030868972022
IN THE COURT OF XXVII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU
Present: Sri. Maruthi.K B.A., LL.B.,
XXVII A.C.J.M Bengaluru.
Dated: This the 12th day of September 2024
C.C. NO.36942/2022
Complainant : TERRASERVE FOOD PVT. LTD
No.9/4, Yerrappa Indl Area,
Channenahalli,
Seegehalli, Magadi Main Road,
Bangalore-562130,
Represented by its C.O.O
Mr.Raghavendra.B
(Rep by Mr. A.K.H.S,
Adv.)
V/s.
Accused : Shree Basava Enterprises,
Store at Ground Floor,
B.H.K.L-42190
K.Hosakoppalu,
Hassan-573201
Rep.By its Proprietor,
Sri.Siddhalingappa H.R,
and also at
Sri.Siddhalingappa H.R,
S/o Rimeshappa,
Aged about 30 years,
C Hosahalli Village,
Holebelluru Post,
Alur Taluk Hassan District.
(Reptd by Sri. D.A.S., Adv.,)
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CC No.36942/2022
Offence : U/s.138 of Negotiable
Instruments Act.
Plea of the accused : Pleaded not guilty
Final Order : Convicted
Judgment Date : 12.09.2024
*****
JUDGMENT
The complainant company has filed complaint U/Sec.200 of Code of Criminal Procedure against the Accused for the offence punishable U/Sec.138 of Negotiable Instrument Act.
2. The facts of the case in brief are as follows:-
It is the case of the Complainant Company that it is carrying on the wholesale business under the name and style M/s Terraserve Pvt.Ltd., in manufacturing and trading in foods and beverages and supply the same on cash and credit basis. The accused is also carrying on the business of foods and beverages in retails by the name Shree Basava Enterprises and accused herein is a proprietor. Accordingly accused use to purchase the goods as and when required from the complainant's company in cash and credit basis for about one year. Accordingly, complainant is maintaining regular books of 3 CC No.36942/2022 accounts as per usual course of business transaction in respect of the credit/cash purchase made by accused, as per the trade purchase of goods accused has agreed to clear the outstanding amount within the time and/or otherwise in the event of failure to pay the amount at the rate of 18% per annum from the date or purchase till the date of clearance of outstanding amount. Accused has purchased food and beverages products from the complainant's company on may occasions on credit basis and due of Rs.58,498/-. Further towards discharge of liability due and payable the accused issued Cheque bearing No.404691 dated: 09.02.2021 for Rs.58,498/- drawn on Karnataka Grameena Bank, Hemavathi Nagar, Hassan Branch of the complainant company and assured that the same would be honored on its presentation.
3. It is stated that, the complainant presented the said cheque for encashment through its banker Axis Bank, Nagarabhavi II stage Branch, Bangalore and the same got dishonored and returned with memo dated:
18.02.2021 stating "FUNDS INSUFFICIENT". Thereafter, the complainant got issued legal notice dated: 08.03.2021 to 4 CC No.36942/2022 the accused through RPAD calling upon him to repay the amount covered under the aforesaid cheque within 15 days from the date of receipt of notice . But, the accused has neither replied to the notice nor paid the amount covered under the said cheque. Hence, this complaint.
4. After the complaint is filed, cognizance for the above said offence was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed to register the case in Register III and it was registered.
5. Thereafter, summons was issued to the accused and he has appeared before the court through advocate and secured bail. Thereafter, plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
6. In order to prove its case, the Office Representative of the complainant company by name Mr.Bhogesh got himself examined as PW.1 and got marked Ex.P1 to Ex.P17 documents. Then the case was posted for recording the Statement of accused under 5 CC No.36942/2022 Sec.313 of Cr.P.C. In the statement under section 313 of Cr.P.C, the accused has denied all the incriminating evidences appearing against him. The accused has not let-in his side oral evidence and no documents are marked on his behalf. Then the matter was posted for Arguments.
7. During the pendency of the case, the learned counsel for the complainant has filed an application for the substitution of the representative of the company contending that the complainant originally represented by its Office representative due to change of circumstances they would like to substitute Authorized representative Mr.Shashi Kumar.M during course of trial. Accordingly, on 26.03.2024, the said application was allowed. The learned counsel for the complainant filed amendment complaint and new representative is examined as PW-2 by filing affidavit in lieu of his examination in chief and adopted the documents marked as Ex.P.1 to Ex.P.17 at the time of sworn statement in chief and produced additional documents which are marked as Ex.P.18 & 19. Later cross of PW-2 is held in 6 CC No.36942/2022 detail and accused has claimed there is defence evidence, hence case was posted for defence evidence. After giving sufficient opportunity to accused to lead defence evidence, the accused did not let in his evidence. Hence his evidence taken as nil.
8. Heard the arguments and perused the records.
9. The following points arise for my consideration:
1. Whether the complainant proves that the cheque bearing No.404691 for a sum of Rs.58,498/- dated: 09.02.2021 drawn on Karnataka Gramin Bank, Hemavathinagar, Hassan issued by the accused has been dishonored on the ground of "FUNDS INSUFFICIENT" and the accused even after receiving the intimation regarding the dishonor of cheque failed to pay the cheque amount within the stipulated period and thereby accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
10. My findings on the above points are as under Point No.1: In the Affirmative Point No.2: As per final order, for the following:
REASONS
11. Point No.1 : In view of the present legal position as held by our Hon'ble High Court as well as 7 CC No.36942/2022 Apex Court of India in a catena of decisions as well as relevant provisions of the Act, this court has to see whether the complainant has complied all the requirements as contained in Sec.138 of NI Act so as to bring home the guilt of the accused for the alleged offence. If so, whether the accused is able to rebut the legal presumption available to the complainant under Sec.139 of the Act by adducing probable defense or not. However, it is held by the full bench of our Apex Court in the case of Rangappa Vs. Mohan reported in 2010 (1) DCR 706 that ;
"The Statutory presumption mandated by sec.139 of the Act, does indeed include the existence of a legally enforceable debt or liability. However, the presumption U/S 139 of the Act is in the nature of a rebuttable presumption and it is open for the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested".
12. Therefore, in view of the above decision once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant that, the alleged cheque was issued for the discharge of an existing legally enforceable debt or liability against the 8 CC No.36942/2022 accused and the burden will shift on to the accused to rebut the same.
13. The learned counsel for the complainant has submitted the arguments contending that the accused has admitted the cheque and his signature thereon. The accused has not chosen to lead any defence evidence and as such, he has failed to rebut the presumption U/sec. 139 of the Negotiable Instruments Act in favour of the complainant. Hence, he is liable to be convicted. On the other the counsel for the accused has argued that, Ex.P3 notice issued by the complainant company has not been served upon the accused and argued the cheque in question issued by the accused to the complainant company towards security has been misused and a false case has been filed against the accused. Further contended accused has not known to complainant and sought to acquit the accused. Further it is contended by the accused Ex.P.10 and Ex.P.15 are one and the same documents there is no signature of accused on invoices. Ex.P.16 not contained any signature or seal of the complainant company and it is also not certified as per 9 CC No.36942/2022 section 65(B) of Indian Evidence Act. The writings in Ex.P.1 defers from the signature of accused and Ex.P.2 is the xerox copy. In support of his arguments the learned counsel for the accused relied on the following rulings:
1. M/s Ajeet Seeds Ltd., Vs. K.Gopala Krishnaiah on 16.07.2014 in Crl.Apl.No.1523 of 2014.
14. I have gone through the rulings relied by the accused and I have taken note of the principles laid down in the aforesaid rulings and I have adopted the same while deciding the instant case. On considering the arguments addressed by the learned counsel for the complainant and Accused, before adverting to the oral evidence let in by the complainant and also without touching upon the defence set up by the Accused, it is required to examine whether the complainant has complied with the provisions of Section 138 of N.I Act to get cause of action to file this complaint. The complainant besides his oral testimony has relied on the documents at Ex.P.1 to 5 in support of his contentions.
Ex.P.1 is the cheque alleged to have been issued by the accused, Ex.P.2 is the Return memo issued by the 10 CC No.36942/2022 Banker of the accused with the endorsement "FUNDS INSUFFICIENT", Ex.P.3 is the copy of legal notice issued by the complainant, Ex.P4 are the postal receipts, Ex.P5 is the returned postal envelope. All these documents corroborate the version of the complainant in his complaint as well as affidavit in lieu of chief examination and more over these documents are not at all disputed by the accused except service of notice and issuance of the cheque, which would be discussed in detail later. Thus, complainant with the help of Ex.P.1 to 5 has conveniently proved to have complied the provisions of Section 138 i.e. presentation of cheque within the statutory period for encashment, issue of legal notice within prescribed period to the Accused and filing of complaint within limitation period as per section 142 of the Act.
15. The second aspect of the case is whether the accused has successfully rebutted the presumption available in favour of the complainant with probable and convincing evidences? It is well settled principle of law that, once the cheque is admitted there will be a 11 CC No.36942/2022 statutory presumption in favour of the holder or holder in due course U/Ss. 118 and 139 of the Act. However, as held by our Hon'ble Apex Court and the High Court in a catena of decisions, the presumptions under the said sections are in the nature of rebuttable presumptions and hence, the accused can very well rebut the said presumptions by leading reasonable and probable defence. Let us examine the same on the basis of the materials available on record.
16. It is the case of the complainant that, the accused purchased food and beverages from the complainant company on credit facility. As such, he was due for Rs.58,498/-. After repeated requests made by the complainant for payment of said due the accused has issued the cheque Ex.P.1. On the other hand it is the specific defence of the accused that, the accused has not issued said cheque towards discharge of any such due, rather the said cheque was issued to the complainant as security. The said cheque is being misused by the complainant to file this false complaint. Except, such a defence in the course of cross- 12
CC No.36942/2022 examination of PW1, the accused has neither denied nor disputed transactions with the complainant company. On the other hand, the complainant got produced invoices as per Ex.P10 to 15 and Ledger Account Extracts as per Ex.P16. All these documents aptly corroborate the version of the complainant in his complaint as well as evidence that, the accused purchased the said items and also that he is due for an amount of Rs.58,498/- . The Ledger Account Extracts at Ex.P16 reveal that the accused has become defaulter in making payment of Rs.58,498/- towards bill No.SR147/2020-21. In the course of cross-examination of PW2, the accused has disputed Ex.P.10, 15 & Ex.16. On perusal of the Ex.P.10 & 15, they discloses as if they are one and the same documents but on keen perusal of those exhibits it clearly goes to show that it begin from Sl.No.1 to 26 therefore it was printed two invoices. Further it is contended by accused that PW-2 admitted in cross examination that he not known accused personally. Therefore contents that there is no person knowledge to the complainant about accused. It is 13 CC No.36942/2022 admitted fact that initially complainant was filed by one Mr.Bhogesh who is one of the office representative of complainant company. Thereafter during pendency of case PW-2 was substituted. Therefore for that reason he may not know the accused personally. He know the accused on the basis of documents available in the company of complainant. Therefore the arguments advanced by counsel for accused not holds good in the eye of law.
17. The defence taken by the accused is with regard to issuance of said cheque Ex.P1 towards discharge of said liability under the said documents. In this regard, in the course of cross-examination of PW2, the accused contended that said cheque Ex.P1 was given to the complainant as security. But, except mere suggestion, nothing was elicited to substantiate that said cheque was issued as security. More so, he has neither adduced any evidence nor produced any materials to show that there has been the practice of taking such cheques as security in the complainant company. As held by our Hon'ble High court in the case of Siddappa Vs. Smt. Chand bee Hyderabad 14 CC No.36942/2022 Reported in 2014 Cr.R 646 (kant), " mere suggestion will not take place of proof even by means of preponderance of probabalities and something more is required to rebut the presumption". the accused has not placed any credible evidence before the court to establish that the Ex.P1 cheque was issued towards security and notably, the accused has not even explained in his statement recorded U/sec. 313 of Cr.P.C., as to how the subject cheque came in to possession of the complainant company.
18. The counsel for the accused argued that complainant has not produced certificate U/sec. 65(B) of Indian Evidence Act to prove Ex.P.6 ledger extract as it does not contain seal and signature of company. The said contention will not come to the aid of accused as the complainant has produced Ex.P10 to 15 invoices which contains seal and signature of complainant company. That apart, though the complainant has not produced the ledger extract which did not contain company seal and signature in question, same is not fatal to the case of the 15 CC No.36942/2022 complainant. If at all, the same was very much necessary to disprove the case of the complainant, the accused could have summoned the said documents from the complainant and no such positive steps is taken by the accused. Section 65(B) Certificate is required when electronic records are produced as evidence in court. The certificate verifies the authenticity of electronic record. In NI Act cases, if electronic are used as evidence, then section 65(B) certificate may be necessary to prove their authenticity. In the present case in hand though the complainant has produced ledger extract generated from computer but it was no accompanied with certificate u/s 65(B) of Indian Evidence Act. In the absence of certificate Ex.P.6 will not comes to the aid of complainant. However he has produced other documents such as invoices to prove the due amount payable by the accused. As such, it could be concluded that the complainant has ably established the transaction in question.
19. That apart, even though Ex.P3 Notice has been returned as "Not Known" and as the accused has not 16 CC No.36942/2022 disputed the address mentioned at Ex.P3, the same will have to be construed as deemed service and as the complainant has sent notice to the correct address of the accused, this court will have to raise presumption as contemplated U/sec. 27 of the General Clauses Act that as the notice is sent to the correct address the same is a deemed service. The said proposition of law is laid down in the ruling decided between C.C. ALAVI HAJI V/s. PALAPETTY MUHAMMED AND ANOTHER (Crl.Appeal No. 767/2007) decided on 18/05/2007, wherein, the Hon'ble Apex court at Paragraph No.14 held that:
"Sec.27 of General Clauses Act gives raise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed have been effected at the time at which the letter would have been delivered in the ordinary course of business. This court has already held that when a notice is sent by registered post and is returned with a postal endorsement refused or not available in the house or house lock or shop closed or addressee not in station due service has to be presumed".17
CC No.36942/2022 In the light of the principle laid down above, the accused has not placed any credible evidence before the court to establish that the address mentioned at Ex.P3 does not belongs to him. As such this court is of the view that, the accused had knowledge about Ex.P3 notice and that after having knowledge about the same, the accused has neither replied to the notice nor initiated any action against the complainant company to establish that the Ex.P1 cheque was not issued towards legally enforceable debt. Therefore the citation relied by counsel for accused does not support the case in hand.
20. The accused has also taken defence that the contents of Ex.P1 cheque is written in different ink. During cross-examination PW1 admitted that the contents of Ex.P1 cheque is written in different Ink and also admitted the handwriting of the contents found in Ex.P1 Cheque is also different. But the accused has not disputed his signature at Ex.P1 cheque. It is to be noted that, as per Sec.20 of the Negotiable Instruments Act the contents of cheque can be filled-up by the complainant himself and even though if the contents of 18 CC No.36942/2022 Ex.P1 cheque is in a different Ink and in different handwriting the same is of no consequence and the accused cannot take advantage of the same without he placing credible evidence before the court that the Ex.P1 cheque was not issued by him towards discharge of legally enforceable debt. By taking note of the entire materials placed on record by the complainant, it could be concluded that the complainant has complied mandatory requirements of Sec. 138 of the Negotiable Instruments Act and the accused has failed to rebut the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act by placing acceptable evidence. Accordingly, I answer Point No.1 in the Affirmative.
21. POINT NO.2 :- In view of my findings to the Points No.1, I proceed to pass the following:-
ORDER In exercise of power conferred U/sec. 255(2) of Code of Criminal Procedure, the accused is convicted for the offence punishable U/s.138 of N.I. Act and sentenced to pay fine of Rs.75,000/-.
In default of payment of the said fine amount, the accused shall undergo simple imprisonment for a period of Six months. 19
CC No.36942/2022 Out of the fine amount Rs.70,000/- shall be paid to the complainant as compensation as contemplated U/sec. 357(1)(b) of Code of Criminal Procedure and the remaining fine amount of Rs.5,000/- shall be paid to the state.
(Dictated to the stenographer directly on computer, corrected and then pronounced in open court by me on this the 12th day of September, 2024) Digitally signed MARUTHI by MARUTHI K K Date: 2024.09.19 15:37:34 +0530 (Maruthi.K) XXVII A.C.J.M., Bengaluru.
ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : Bhogesh PW2 : Shashi Kumar.M
Documents marked on behalf of the complainant Ex.P1 : Cheque Ex.P1(a) : Signature of accused Ex.P3 : Legal Notice Ex.P4 : Two postal receipts Ex.P5 : Returned postal cover Ex.P6 : Incorporation Certificate Ex.P7 : Registration Certificate Ex.P8 : Board Resolution Ex.P9 : Authorization Ex.P10 to 15 : 6 invoices 20 CC No.36942/2022 Ex.P16 : Account Ledger Ex.P17 : Complaint Witnesses examined on behalf of the accused:
-NIL-
Documents marked on behalf of the accused:
-NIL- Digitally signed
MARUTHI by MARUTHI K
Date:
K 2024.09.19
15:37:39 +0530
XXVII A.C.J.M
Bengaluru.