Bangalore District Court
Dated 1St September 2016 And Accused Is vs Has Neither Complied With The Demand ... on 15 November, 2021
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present: Sri. MANJUNATHA, B.A, LL.B.,
XXVIII A.C.M.M
Bengaluru City.
Dated this the 15th day of November, 2021
CC.No.3031/2019
JUDGMENT
1. Sl.No. of the case : C.C.No.3031/2019
2. The date of commence of Evidence : 02.02.2019
3. The date of Institution : 18.08.2018
4. Name of the Complainant :Sri. Meghdooth Sharada Chits (Pvt) Ltd Office at No.160/38, New No.58, 3rd main, 3rd cross, S.L Byrappa road, Hanumanthanagar, Bengaluru560069.
Rep by its Managing Director Nagamanickyam Ethiraj
5. Name of the Accused : Sri. Dhiraj jain @ Jain Dhiraj S/o Ashok Jain, Aged about 41 years, CC.No.3031 /2019 2 No374/513, 2nd floor, 9th A cross, Sai Tulasi Paradise, Hanumanthanagar, Bangalore560050.
6. The offence complained : U/s.138 of N.I. Act
7. Plea of the accused on his examination : Pleaded not guilty
8. Final Order : Accused is Convicted
9. Date of such order : 15.11.2021 JUDGMENT
1. The complainant has filed this complaint against the accused for the offence punishable u/s 138 r/w 142 of N.I. Act.
2. The gist of the complainant's case is that :
The complainant is running register chit business, the accused enter into chit agreement with complainant dated 1st September 2016 and accused is one of the subscribers of chit NB.02 group bearing Sno.16, a chit amount of Rs.30,00,000/ (Thirty Lakhs only) which is payable at Rs.1,50,000/ (Rupees one CC.No.3031 /2019 3 lakh Fifty Thousand only) per month, for a period of 20 months. The accused had participated in the chit action held on 10.12.2016 and was declared as the prize bidder in the said auction drawn and received the prize amount of Rs.21,70,000/ (Rupees Twenty One lakh Seventy Thousand only) after deducting Rs.8,30,000/ (Rupees Eight Lakh Thirty Thousand only) for that the accused executed necessary documents and received bid amount by way of two cheques (1) cheque bearing No.000292 dated 30.12.2016 for a sum of Rs.9,00,000/ (Rupees Nine Lakhs only) (2) cheque bearing No.000294 for a sum of Rs.12,57,400/ (Rupees Twelve Lakhs Fifty Seven Thousand Four Hundred only). The accused has paid 9 installment, thereafter become defaulter inspite of repeated requests and demands by the complainant.
Thereafter the accused have issued a cheque bearing No.041953 dated 10.03.2018 for a sum of CC.No.3031 /2019 4 Rs.3,81,000/ (Rupees Three lakhs Eighty one Thousand only) drawn on COSMOUS Bank, Bengaluru branch, Bengaluru in favour of complainant towards clearance of the 10th, 11th & 12th installments of the said chit. The accused assured the remaining balance installment chit amount will pay within short period. As per the instructions of accused the complainant has presented the said cheque to their banker Vijaya Bank, Basavanagudi branch, Bengaluru for realisation, but the said cheque was dishonoured for the reason 'Funds Insufficient' on 05.06.2018. After dishonor of said cheque the complainant made several efforts to contact the accused for repayment of cheque amount, but accused had neglected to pay the cheque amount of Rs.3,81,000/(rupees Three lakh eightyone thousand only). The complainant got issued legal notice dated 04.07.2018 through RPAD to the accused under sec.138 of N.I Act calling upon the accused to CC.No.3031 /2019 5 pay the cheque amount of Rs.3,81,000/ (rupees Three Lakh Eightyone Thousand only) and balance chit amount within 15 days from the date of receipt of notice. The RPAD notice served on 06.07.2018. The accused has neither complied with the demand made therein nor replied thereon. Hence, the accused has committed an offence as described under sec.138 of N.I Act. Hence, the complainant prays to punish the accused under sec.138 of N.I Act with suitable compensation as contemplated under N.I Act.
3. In pursuance of the court summons, the accused has appeared through his Counsel and got enlarged on bail by executing necessary documents. The copy of the complaint was furnished to the accused, as required under law. As there was sufficient material, plea was recorded against the accused on 29.07.2019 and explained in his vernacular, for which the accused pleaded not guilty and claims to be tried.
CC.No.3031 /2019 6
4. In order to prove the case, the Managing Director of the complainant Company Sri. Nagamanickyam Ethiraj S/o Srinivasa Shetty Nagamanicam examined as PW1 and got marked documents at Ex.P1 to 11. Then the statement u/s 313 Cr.P.C was recorded on 18.11.2019, wherein the incriminating evidence appeared against the accused was read over and explained which was denied by the accused. The accused examined himself as DW1 and got marked Ex.D1 document on his behalf.
5. Heard the arguments and perused the material placed on record.
6. On the basis of the above facts, the following points arise for my consideration:
1. Whether the complainant proves that the accused towards discharge of legal recoverable debt issued cheque bearing No.041953 dt:10.03.2018 for CC.No.3031 /2019 7 Rs.3,81,000/ (Rupees Three Lakhs Eightyone Thousand only) drawn on Cosmous Bank, Bengaluru branch, Bangalore, in favour of complainant, on presentation for encashment it was returned as 'Funds Insufficient' and in spite of receipt of legal notice, the accused failed to pay the cheque amount within the statutory period and thereby the accused has committed an offence punishable u/s 138 of N.I. Act?
2. What order?
7. 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
8. Point No.1: The complainant in order to prove its case got examined the Managing Director of complainant company Sri. Nagamanickyam Ethiraj as CC.No.3031 /2019 8 PW1 and Ex.P1 to Ex.P11 documents are marked. PW1 Sri. Nagamanickyam Ethiraj filed affidavit in lieu of his examination in chief and deposed in his evidence that he is the Managing Director of the complainant company, he is well conversant with the facts of the case. He is running register chit business, the accused enter into chit agreement with complainant dated 1 st September 2016 and accused is one of the subscribers of chit NB.02 group bearing Sno.16 a chit amount of Rs.30,00,000/ (Thirty Lakhs only) which is payable at Rs.1,50,000/ (Rupees one lakh Fifty Thousand only) per month, for a period of 20 months. The accused had participated in the chit action held on 10.12.2016 and was declared as the prize bid in the said auction drawn and received the prize amount of Rs.21,70,000/ (Rupees Twentyone lakh Seventy Thousand only) after deducting Rs.8,30,000/ (Rupees Eight Lakh Thirty Thousand only) for that the accused CC.No.3031 /2019 9 executed necessary documents and received bid amount by way of two cheques (1) cheque bearing No.000292 dated 30.12.2016 for a sum of Rs.9,00,000/ (Rupees Nine Lakhs only) (2)cheque bearing No.000294 for a sum of Rs.12,57,400/ (Rupees Twelve Lakhs Fifty Seven Thousand Four Hundred only). The accused has paid 9 installment, thereafter become defaulter inspite of repeated requests and demands by the complainant. Thereafter the accused have issued a cheque bearing No.041953 dated 10.03.2018 for a sum of Rs.3,81,000/ (Rupees Three lakhs Eightyone Thousand only) drawn on COSMOUS Bank, Bengaluru branch, Bengaluru in favour of complainant towards clearance of the 10 th 11th & 12th installments of the said chit. The accused assured the remaining balance installment chit amount will pay within short period. As per the instructions of accused the complainant has presented CC.No.3031 /2019 10 the said cheque to their banker Vijaya Bank, Basavanagudi branch, Bengaluru for realisation, but the said cheque was dishonoured for the reason 'Funds Insufficient' on 05.06.2018. After dishonor of said cheque the complainant made several efforts to contact the accused for repayment of cheque amount, but accused had neglected to pay the cheque amount of Rs.3,81,000/(rupees Three lakh eightyone thousand only).
9. Ex.P1 is the Minutes of meeting, Ex.P2 is the authorization letter issued by the complainant in favour of the PW1, Ex.P3 is the copy of incorporation certificate, Ex.P4 is the chit agreement, Ex.P5 is the On Demand promissory note, Ex.P6 is the receipt for having received the prize amount by the accused, Ex.P7 is the cheque issued by the accused dated 10.03.2018 for Rs.3,81,000/ drawn on Cosmous bank, Bengaluru branch, Bengaluru, Ex.P7(a) is the CC.No.3031 /2019 11 signature of the accused, Ex.P8 is the bank memo dated 05.06.2018, Ex.P9 is the office copy of the legal notice dated 04.07.2018 issued by the complainant through its advocate to the accused, Ex.P9(a) is the postal receipts, Ex.P10 is the postal acknowledgement for having received the notice by the accused.
10. The learned counsel for the accused subjected PW1 for cross examination and denied the receipt of legal notice marked as Ex.P9 by the accused. According to PW1 legal notice has been issued to the different address furnished. Different address of the complainant shown in the complaint as well as legal notice, notice was also given to the accused regarding the change of address of the complainant, but there is no document to show the notice issued to the accused regarding the change of address of the complainant. Accused denied the alleged chit business conducted by the complainant company. However PW1 deposed that CC.No.3031 /2019 12 the complainant company has obtained permission from the competent authority to conduct the chit business. No merits in the denial of the license issued in favour of the complainant to run the chit business. Complainant company has in all five directors, date of authorization given to PW1 has not been mentioned in Ex.P2, it is clear from the legal notice issued to the accused that, it is the PW1 who gave instructions the defence lawyer to issue legal notice to the accused on behalf of the complainant. The accused became member of the chit in the year 2016. PW1 further admits that the member of the chits will not hand over any cheques to the complainant company for security purpose. The accuse issued the Ex.P7 cheque in favour of the complainant on 10.03.2018, except the disputed cheque the complainant is not having any other cheque leafs issued by the accused in favour of the complainant. The address proof documents are CC.No.3031 /2019 13 generally collected by the complainant to accept as member of the chits, it has been denied by PW1 that the complainant has collected in all 3 cheques from the accused. Copy of agreement was not handed over to the accused. Ex.P10 postal acknowledgment has been duly singed by the wife of the accused as mentioned on the acknowledgment itself. Service of legal notice to the accused specifically denied, the accused also denied the liability on his part to pay the installment No.10,11 and 12 as alleged in the complaint. It is also alleged that the complainant has misused the cheque issued by the accused for security purpose. On one hand the accused questioning the very existence of the complainant company, on the other hand, the accused took defence that he had issued cheque in favour of the complainant for security purpose. According to accused cheque in question is nothing to do with the transaction alleged in the CC.No.3031 /2019 14 complainant.
11. The accused has been examined as DW1 and he deposed in his evidence that he became member of the complainant chit in the year 20132014. He participated in the bid in 2017 and received prize amount of Rs.21,00,000/(rupees Twentyone lakh only) from the complainant. He has paid the entire installments as such he is not liable to pay any amount to the complainant as stated in the complaint. However, he has made specific allegation that the complainant company is conducting benamy transaction by unlawful means, he issued the cheque in question in the year 2015 for security purpose, he had filled the date and signed the cheque at the time of handing over the same to the complainant. He was not aware that the complainant is conducting chit business, he has not received any legal notice much less Ex.P10 notice issued through the complainant's CC.No.3031 /2019 15 counsel. Ex.P10 does not contain his or his wife's signature. Ex.D1 is his Aadhaar card in which his address is mentioned. During cross examination by the learned counsel for the complainant. He further deposed that :
"ಪರರದ ಸಸಸಸಯಸದ ಪಡದಸತಹ ಹಣವನನ ನ ನನನ ಮರನ ಪವತ ಮಡದ ಎಸದನ ತತತರಸಲನ ರವದತ ದಖಲಯನನ ನ ಹಜರನ ಪಡಸಲಲ. ಅವಗಳನನ ನ ನನರಲಯಕಕ ಹಜರನ ಪಡಸಲಲನ ರವದತ ತತಸದರ ಇಲಲ."
If at all the accused has paid the entire installments including installments of the chit No. 10 to 12, he could have produce documents to that effect. Though the accused took defence that Ex.P7 cheque was not issued to discharge legally enforceable liability, he has not substantiated his defence by leading cogent evidence in this regard. There is no document to show that accused has repaid the installment No.10 to 12 of chit bearing No. NB.02 group bearing No.16 as per the terms and conditions of the agreement CC.No.3031 /2019 16 produced by the complainant. There is absolutely no document to show that the complainant is running benamy transaction as alleged by the accused. No merits in the defence set up by the accused that he has not received legal notice marked as Ex.P10. Accused has admitted that Ex.P7(a) signature belongs to him and he has not initiated any legal action against the complainant for the alleged misuse of cheque. It is clear from the evidence available on record that the accused falsely denied issuance of cheque to avoid his liability to pay the amount covered under the cheque marked as Ex.P7. The address of the accused in Ex.D1 mentioned as:
Dhiraj Jain S/o Ashok Jain, No.374/5/3, 2nd floor, Sai Tulasi Paradise, 9th A cross, 50 feet road, Hanumantha Nagar, Bengaluru South, Gaviopuram Extension, Bengaluru, Karnataka.
CC.No.3031 /2019 17 Notice has been issued to the accused to the address mentioned in Ex.P10.
12. The learned counsel for the accused relied on the un reported decision of Hon'ble Delhi High Court in :
CRL.REV.P.438/2017 DD 1st July 2019 R.L Varma & Sons (HUF) v/s P.C Sharma wherein Hon'ble Delhi High Court held that:
"The requirement to serve a notice demanding payment is held to be mandatory prerequisite, but the manner in which that notice is served and the receipt thereof are matters of presumption.
The drawer to rebut the presumption about the service of notice show that he had no knowledge with the notice was brought to his address or with the address mentioned on the cover was incorrect or that the letter was never tendered with the report of the CC.No.3031 /2019 18 postman was incorrect".
13. In the case on hand, the complainant issued notice marked as Ex.P9 through RPAD and the notice was served on the accused. The complainant received acknowledgement for having served the notice on the accused and produced the acknowledgment as per Ex.P10. Therefore burden is on the accused to establish that he had no knowledge with the notice brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or with the report of the post man was incorrect. Complainant has mentioned the address of the accused on the cover as well as the acknowledgment produced at Ex.P10. Acknowledgement Ex.P10 also contained signature as well as telephone number of the addressee/person who received the notice.
14. Honb'le Delhi High Court in the above referred CC.No.3031 /2019 19 decision discussed the effect of endorsement by the post office that "addressee left'. In the case on hand, notice has been received by the addressee. Therefore, decision referred above can not be made applicable to the facts on hand.
15. Hon'ble Bombay High Court in Mohammed Farooque Shah Dat v/s Kantaben G Savalia and others Crl Application on 3535 of 2006 DD 16.04.2007 held that:
" When the sender has dispatched the notice by post with correct address written on it, it could be deemed to have been served on sender unless he proves that it was not really served and he was not responsible for such nonservice."
16. The learned counsel for the accused file vakalath on behalf of the accused wherein address of the accused is mentioned as follows: CC.No.3031 /2019 20 Dhiraj Jain S/o Ashok Jain, 50 Feet, No.374/5/B, II floor, 9th main, 50 feet road, Hanumantha Nagar, Bengaluru19.
The address of the accused in Ex.D1 is almost similar and the complainant dispatched statutory notice to the accused as alleged in Ex.P9. It is not the case of the accused that he was not residing in the given address at relevant point of time. There is no material on record to show that the accused was not residing in the given address, when the statutory notice was dispatched by the complainant. No merits in the argument addressed by the learned counsel for the accused regarding requirement of service of notice. There is no evidence to rebut the presumption available in favour of the complainant regarding CC.No.3031 /2019 21 service of notice and its receipt.
17. Hon'ble Supreme Court in (Unreported) Crl appeal No.711/2009 D.D M.D Thomas v/s P.S Jaleel and Anr held that:
"The notice of demand was served upon the wife of the appellant and not the appellant, acquittal is proper".
It is not the case of the accused that notice was received by his wife in the given address. But the accused had taken a defence that notice was not at all send to his address as such the notice itself is bad under law. Therefore decision referred above can not be made applicable to the facts on hand. Mere mentioning the "phone number" or "wife" on the acknowledgement it can not be said that the Ex.P9 notice was not served on the accused in view of the facts that the defence of the accused is denial of issuance of notice to his correct address. Wife residing CC.No.3031 /2019 22 the same address but not the husband is not acceptable unreported decision reffered above cannot made applicable in the facts on hand.
18. The learned counsel for the accused further submits that the authorization letter produced by the complainant on Ex.P1 is not proper authorisation in favour of PW1 to depose before this court. It is pertinent to note that Ex.P1 letter has been issued in favour of PW1 on 10.10.2012 by the directors of the complainant company, incorporation certificate is also produced as per Ex.P3.
19. The defence of the accused is that he had issued the cheque for security purpose. On the other hand, the complainant is able to establish the existence of complainant company, authorisation issued to PW1 to depose before this court on behalf of the company is sufficient to hold that the complainant is properly represented before this court. Apart from that the CC.No.3031 /2019 23 Ex.P2 authorisation letter has been produced by the complainant to establish authority to file the complaint. Conjoint reading of Ex.P1 and 2 documents clearly establishes that the complainant is company incorporated under the companies Act and the accused being the member of chit NB.02 group bearing S No.16 chit amount of Rs.30,00,000/ (Thirty Lakhs only) which is payable at Rs.1,50,000/ (Rupees one lakh Fifty thousand only) per month for a period of 20 months and the accused had participated in the chit action held on 10.12.2016 and he declared as prize bidder in the said auction drawn and received the prize amount of Rs.21,70,000/ (rupees Twentyone lakh seventy thousand only) as admitted. Accused being DW1 deposed during cross examination that mobile number mentioned in Ex.P10 acknowledgement belongs to him, but denied his signature with intention to escape from his liability to pay the amount covered CC.No.3031 /2019 24 under the disputed cheque. Therefore accused should be held liable for the offences punishable committed under sec.138 of N.I Act.
20. On appreciation of entire evidence, this court is of the opinion that the accused miserably failed to challenge the oral and documentary evidence produced by the complainant. Accused has utterly fails to prove the defence that he has not issued cheque for discharge of legally enforceable debt. On the contrary, the complainant has proved through overwhelming evidence that the accused has issued Ex.P7/cheque for a total sum of Rs.3,81,000/ towards discharge of legally enforceable debt and on presentation of the cheques, the same were dishonored for the reasons 'Funds Insufficient' and even after service of legal notice, the accused has not paid the amount covered under the cheques. Hence, in the considered view of this court, the complainant has proved that the CC.No.3031 /2019 25 accused has committed an offence punishable u/s 138 of N.I. Act. Hence, I answer the above point No.1 in the affirmative.
21. Point No.2: From the material on record and considering the age, avocation of accused and quantum of the cheques, if the accused is sent to jail, it would cause problem to the accused as well as to her family members. Having regard to the facts and circumstances, prevailing rate of interest in the nationalized Bank and litigation expenses, I proceed to pass the following:
ORDER The accused is found guilty of the offence punishable u/s 138 of N.I. Act.
Acting u/s 255(2) of Cr.P.C. the accused is hereby convicted and sentenced to pay fine of Rs.4,00,000/(Rupees Four Lakh only) in default he shall undergo simple imprisonment for six months.
CC.No.3031 /2019 26 Out of fine amount of Rs.4,00,000/ (Rupees Four Lakhs only) a sum of Rs.3,95,000/ (Rupees Three lakh Ninetyfive Thousand only) is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/ (Rupees Five Thosuand only) shall be remitted to the State.
The bail bond executed by the accused stand canceled.
Supply free copy of the judgment to the accused. (Dictated to Stenographer directly on the Computer, taken print out corrected, signed by me and then pronounced in the open court this the 15 th day of November, 2021) (MANJUNATHA) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT :
PW1 : Sri. Nagamanickyam Eithiraj CC.No.3031 /2019 27 LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE:
DW1 : Sri. Dheeraj Jain LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P1 : Minutes of meeting Ex.P2 : Authorisation letter Ex.P3 : Incorporation certificate Ex.P4 : Chit agreement Ex.P5 : On Demand promissory note Ex.P6 : Receipt Ex.P7 : Cheque Ex.P7(a) : Signature of the accused Ex.P8 : Bank Endorsement Ex.P9 : Legal notice Ex.P9(a) : Postal receipt Ex.P10 : Postal acknowledgement Ex.P11 : Compliant
LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:
Ex.D1 : Aadhaar card.
XXVIII Addl. Chief Metropolitan
Magistrate, Bengaluru.
CC.No.3031 /2019
28
26.10.2021
Judgment pronounced in the open court vide separate order.
ORDER The accused is found guilty of the offence punishable u/s 138 of N.I. Act.
Acting u/s 255(2) of of Cr.P.C. the accused is hereby convicted and sentenced to pay fine of Rs.4,00,000/(Rupees Four Lakh only) in default he shall undergo simple imprisonment for six months.
Out of fine amount of Rs.4,00,000/ (Rupees Four Lakhs only) a sum of Rs.3,95,000/ (Rupees Three lakh Ninetyfive Thousand only) is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/ (Rupees Five Thosuand only) shall be remitted to the State.
The bail bond executed by the accused stand canceled.
Supply free copy of the judgment to the accused.
XXVIII A.C.M.M, Bangaluru. CC.No.3031 /2019 29