Karnataka High Court
M/S V Guard Industries Ltd vs Sreeanjana Enterprises on 10 February, 2020
Author: John Michael Cunha
Bench: John Michael Cunha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF FEBRUARY 2020
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
CRIMINAL APPEAL No.96 OF 2017
BETWEEN:
M/S V GUARD INDUSTRIES LTD
HAVING ITS REGISTERED OFFICE AT
NO 33/2005 F
VENNALA HIGH SCHOOL ROAD
VENNALA P O KOCHI, KERALA - 682028
AND ITS WAREHOUSE AT PLOT NO 16C
1ST PHASE, BANGALORE,
KARNATAKA - 560074
REPRESENTED BY ITS POWER OF ATTORNEY HOLDER
MR JAGADEESHA P
S/O PARAMASHIVAIAH
CHIEF OFFICER - ACCOUNT
...APPELLANT
(BY SRI: V S BIJU, ADVOCATE)
AND:
1. SREEANJANA ENTERPRISES
124, 1ST FLOOR,
J N C ROAD , KHB COLONY 5TH BLOCK
KORAMANGALA, BANGALORE - 560095
REPRESENTED BY ITS PROPRIETOR
MRS S GAYATHRI
2. MRS S GAYATHRI
2
PROPRIETOR, SREE ANJANA ENTERPRISES
124, 1ST FLOOR, JNC ROAD,
KHB COLONY, 5TH BLOCK
KORAMANGALA
BANGALORE - 560095
...RESPONDENTS
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND
ORDER DATED 13.10.2016 PASSED BY THE XXV ADDITIONAL
C.M.M., BENGALURU IN C.C.NO.1959/2015-ACQUITTING THE
RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE
UNDER SECTION 138 OF N.I.ACT.
THIS CRIMINAL APPEAL COMING ON FOR HEARING
THIS DAY, THE COURT DELIVERED THE FOLLOWING:-
JUDGMENT
This appeal is directed against the judgment and order of acquittal dated 13.10.2016 passed by XXV Addl. Chief Metropolitan Magistrate, Bengaluru in C.C.No.1959/2015, whereby the complaint filed by the appellant(hereinafter referred to as 'complainant') under section 138 of N.I. Act is dismissed and respondent (hereinafter referred to as 'accused') has been acquitted of the above offence.
Heard learned counsel appearing for the appellant/complainant. Learned counsel for
respondents/accused is absent. Perused the records. 3
2. The case of the complainant is that it is a company registered under the Companies Act by name M/s. V. Guard Industries Limited, Bengaluru. Accused Nos.1 and 2 were having business transaction with the complainant company and towards part payment of the value of the goods purchased by accused Nos.1 and 2, second accused issued a cheque bearing No.281416 dated 10.11.2014 for a sum of Rs.4,49,763/- drawn on State Bank of Mysore, Koramangala Branch, Bengaluru. Said cheque when presented for encashment was dishonoured for 'insufficient funds'. Notice issued to the accused demanding payment of the cheque amount though received by the accused was not complied with and hence the complainant sought prosecution of the accused for the above offence.
3. The accused having denied the charges, the Power of attorney of the complainant examined himself as PW-1 and also examined one of its employee as PW-2 and got marked in evidence 12 documents viz., Ex-P1- Power of Attorney, dishonoured cheque-Ex-P2, Bank endorsements Ex-P3 and 4 Ex-P4, office copy of legal notice-Exs-P5 and 6, postal receipts Ex-P7 and 8, postal acknowledgments Exs-P9 and P10, bunch of invoices marked as Ex-P11 and 12. In rebuttal, accused No.2 Mrs. S. Gayathri examined herself as DW-1 and relied on two documents viz., copy of the agreement Ex-D1 and bank ledger extract Ex-D2.
4. Considering the above evidence, by the impugned judgment, the learned magistrate was of the opinion that by producing Ex-D1, the accused probabalised her defence that the cheque in question was taken by the complainant as security at the time of entering into an original agreement and further the learned magistrate was of the opinion that the amount claimed in Ex-P2-cheque did not tally with the total amount of the invoices and with this reasoning, the learned magistrate found it proper to dismiss the complaint and consequently, acquitted the accused of the above offence.
5. Learned counsel for the appellant/complainant, taking me through the pleadings and the evidence of the parties submitted that accused did not dispute the transaction and 5 issuance of cheque and the signature of accused No.2 found therein. Further, she failed to issue any reply to the legal notice putting forth any specific defence. The defence set up by the accused in the course of trial is contrary to her own documents and under the said circumstances, the learned magistrate has committed grave error in acquitting the accused.
6. Learned counsel for the respondents/accused has not addressed any arguments.
I have bestowed my thoughtful consideration to the submissions made by learned counsel for the appellant/complainant and have carefully gone through the material on record.
7. The specific case of the complainant is that the cheque in question was issued by the second accused on behalf of accused No.1 company towards the value of the goods supplied to the first accused/Sree Anjana Enterprises together with overdue interest. In proof of the transaction, 6 the complainant produced various invoices marked as Exs-P11 and 12; the genuineness of these invoices were not disputed or countered by the accused. As a matter of fact, accused No.2 admitted that she was having transaction with the complainant and that she has been purchasing electronic and electro mechanical products from the complainant. This is evident from the evidence of DW-1 wherein she has unequivocally stated that "the complainant used to supply the goods to us which in-turn was being distributed by us to the dealers".
8. The only defence set up by the accused is that the cheque in question was taken by the complainant by way of security. This defence appears to have taken shape only in the course of trial. The accused did not reply to the legal notice issued by the complainant putting forth the plea that the cheque in question was issued by her as security. This evidence is inconsistent to the very case set up by the accused as could be seen from her chief examination wherein she has stated that "the complainant obtained the agreement 7 before commencement of the transaction. During that time, the complainant also obtained three blank signed cheques from me as security for our transactions. The complainant themselves used to fill up blank portions of the cheque and present the same for encashment. Still there are three blank cheques in the custody of the complainant apart from the cheque involved in this case". This evidence indicate that the accused used to issue blank cheques to the complainant and the complainant was making use of the same as and when supplies were made. This evidence is inconsistent to the later portion of the evidence of DW-1, wherein she has asserted that the cheque in question was given to the complainant as security. If in fact the subject cheque was given as security, question of complainant filling those cheques and presenting them for encashment does not arise at all. This admission clearly indicates that the cheque in question was issued by the accused towards the value of the goods supplied as contended by the complainant.
9. The learned magistrate has held that Ex-D1 is an agreement wherein the complainant has made an 8 acknowledgement to the effect that subject cheque has been issued as security cheque. I have gone through Ex-D1. It is not an agreement between the complainant and the accused as understood by the learned magistrate. On the other hand, it is an application written by the accused herself. The complainant has not signed it nor has she made any endorsement in the said document. The accused herself has written in the said application that three cheques were given by her as security. This document cannot be held against the complainant. The learned magistrate has totally misconstrued this document which has vitiated the finding recorded in the impugned judgment. Likewise, the reasoning of the learned magistrate that there is discrepancy between the cheque amount and the amounts reflected in tax invoices Ex-P11 and 12, also cannot be a ground to exonerate the accused especially in view of the presumption raised in favour of the holder of cheque. As the complainant has convincingly proved in evidence that value of the goods supplied to the accused was due as on the date of presentation of the cheque, there is no escape from the conclusion that the cheque in question 9 was received by the complainant towards discharge of the amount due from the accused.
10. On considering the entire evidence of the complainant and the accused, I find that the complainant has proved not only the transaction, but also legally enforceable debt due and payable by the accused as on the date of dishonour of the cheque. The inconsistent defence set up by the accused coupled with her failure to issue reply to the legal notice leads to the inference that the defence set up by the accused is purely an afterthought. The evidence of the accused is inconsistent. The accused has produced bank ledger extract-Ex-D2 relating to the account maintained by her in State Bank of Mysore, Koramangala, Bengaluru. This document does not throw light either on the transaction or on the liabilities due by the accused. The learned magistrate has failed to consider all the above aspects. It has misconstrued Ex-D1, which has resulted in erroneous finding which under the circumstances of the case cannot be sustained. 10
For the above reasons, the impugned judgment dated 13.10.2016 passed by learned XXV Addl. CMM, Bengaluru in C.C.No.1959/2015 is liable to be set-aside and is accordingly, set-aside. Consequently, the appeal filed by the appellant/complainant under section 138 of N.I. Act is allowed. Accused is held guilty of the offence under section 138 of N.I. Act and is sentenced to pay a fine of Rs.6.00 lakhs and on deposit or realization of the said amount, a sum of Rs.5,50,000/- shall be made over the complainant as compensation.
Sd/-
JUDGE *mn/-