Bangalore District Court
M/S A O Smith India Water Products Pvt. ... vs Mrs. Vandana Showndik on 19 December, 2024
C.C.NO.19035/2019
0
KABC030600522019
Presented on : 21-08-2019
Registered on : 21-08-2019
Decided on : 19-12-2024
Duration : 5 years, 3 months, 29 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 19th DAY OF DECEMBER-2024
C.C.NO.19035/2019
Complainant: M/s.A.O.Smith India Water Products Pvt.,Ltd,
A company registered under the Indian
companies Act, 1956, Having its registered
O/at : Plot NO.300, KIADB Industrial Area
Phase II, Harohalli (V and P),
Tq: Kanakapura, Dist: Ramanagar-562112.
R/by its Company Secretary
Ms.Brinda.T.B.
(By Sri.C.K.Nandakumar & Ors.,Advs.,)
V/s
Accused: Mrs.Vandana Showndik,
Sole Proprietor of M/s. Bluray Electronics,
No.550, Sahid Nagar,
Bhubaneswar-751007.
(By Sri.Girish.K.M.,Adv.,)
:JUDGMENT:
This case arises out of the private complaint filed by the complainant against the accused under section C.C.NO.19035/2019 1 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant is one of the world's leading manufacturers of residential and commercial water heating equipment and boilers, offering a comprehensive product line featuring the best known brands in North America and China, as well as water purification products for residential and light commercial applications. Further the accused is a distributor dealing (interalia) in the complainant's company products, the complainant supplied various products as per the orders placed by the accused. The accused acknowledged the products, as per purchase orders for the period from 23.12.2017 to 13.12.2018. The complainant raised invoices for the supplied products. The outstanding dues of executed orders for the above said period is total of Rs.11,36,039.06. It is further stated that after credit period, the complainant followed up repeatedly for the balance payment. The accused in order to repayment of the same had issued the cheque No.024248 dated: 29.01.2019 for Rs.11,36,039/- drawn on Oriental Bank of Commerce, Ravi Talkies Road Branch, Bhubaneshwar. The complainant presented the said cheque for realization C.C.NO.19035/2019 2 through its banker Indian Axis Bank, J.P.Nagar branch, Bangalore. But the said cheque was dishonored on 31.01.2019 as "Funds Insufficient". Thereafter, on 14.02.2019 the complainant got issued a legal notice to the accused through its counsel, calling upon her to make payment of cheque. The said notice was duly served to the accused on 22.02.2019 and she had issued an untenable reply on 08.03.2019. Further on 30.03.2019 the complainant issued a rejoinder notice to the accused. After issuance of rejoinder notice the accused failed to pay the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 04.04.2019.
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R No.7676/2019. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 20.08.2019 to register the case in Register No.III.
4. Thereafter, summons was issued to the accused and she appeared before the court through advocate and secured bail. She was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. She has pleaded not guilty and C.C.NO.19035/2019 3 claimed to be tried.
5. The complainant in support of its case, have examined its Secretary as PW.1 and got marked 15 documents at Ex.P.1 to 15 and closed its side.
6. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was recorded. She has denied the incriminating evidence appearing against her. Inspite of sufficient opportunity the accused not lead defence evidence. Hence, the defence evidence taken as nil.
7. I have heard the arguments on both the sides and perused the written argument filed by the learned counsel for the accused and also perused the material placed on record.
8. The learned counsel for the complainant has relied upon the citations reported in (2021) 5 SCC 283, (2022) 2 SCC 355, (1999) 7 SCC 510, (2010) 11 SCC 441, 2019 SCC Online Kar 2117, 2019 SCC Online Kar 1653 and (2019) 10 SCC 287.
9. The learned counsel for the accused has relied upon the judgment in Crl.A.No.270/2022.
10. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
C.C.NO.19035/2019 4
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-
Ex.P.6, towards the discharge of the said legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.6 was dishonored for the reasons "Funds Insufficient" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
11. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
12. POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken these two points together for common discussion. The case of the complainant is that she was acquainted with the accused. Further the complainant is one of the C.C.NO.19035/2019 5 world's leading manufacturers of residential and commercial water heating equipment and boilers, offering a comprehensive product line featuring the best known brands in North America and China, as well as water purification products for residential and light commercial applications. The accused is a distributor dealing (interalia) in the complainant's company products, the complainant supplied various products as per the orders placed by the accused. The accused acknowledged the products, as per purchase orders for the period from 23.12.2017 to 13.12.2018. The complainant raised invoices for the supplied products. The outstanding dues of executed orders for the above said period in total of Rs.11,36,039.06. After credit period, the complainant followed up repeatedly for the balance payment. Finally, the accused issued the cheque in question towards payment of unpaid invoices. The complainant presented the said cheque for realization through its banker. But the said cheque was dishonored as "Funds Insufficient". Thereafter, the complainant got issued a legal notice to the accused through its counsel, calling upon her to make payment of cheque. The said notice was duly served to the accused and she had issued an untenable reply. Further the complainant issued a rejoinder notice to the accused. After issuance of rejoinder notice the accused failed to pay the cheque amount. As such, the accused have committed an offence punishable under section C.C.NO.19035/2019 6 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
13. In support of the case, the complainant have examined its Secretary as P.W.1 and 15 documents were marked at Ex.P.1 to 15. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the board resolution dated: 01.08.2017. Ex.P.2 are the Invoices. Ex.P.3 is the Statement of outstanding. Ex.P.4 is the computerized copy of statement of account. Ex.P.5 is the Certificate under section 65(b) of Indian Evidence Act. Ex.P.6 is the cheque issued by the accused in favour of the complainant dated: 29.01.2019 for Rs.11,36,039/-. Ex.P.6(a) is the signature of the accused. Ex.P.7 is the bank memo dated: 30.01.2019 informing the dishonor of the cheque as ''Funds Insufficient''. Ex.P.8 is the office copy of legal notice dated: 14.02.2019. Ex.P.8(a) is the postal receipt. Ex.P.9 is the postal acknowledgment. Ex.P.10 is the track consignment. Ex.P.11 is the reply notice dated:
08.03.2019. Ex.P.12 is the rejoinder notice dated:
30.03.2019. Ex.P.12(a) and 12(b) are the postal receipts. Ex.P.13 and 14 are the postal acknowledgments. Ex.P.15 is the complaint.
14. The main defence of the accused is that in the month of December 2017 she had issued blank cheques to the complainant for the purpose of security.
C.C.NO.19035/2019 7 Further the complainant have misused one of the cheque and filed this false complaint against the accused. Further contended that she has never admitted regarding repayment of the amount as contended by the complainant. But the accused in her defence has not disputed Ex.P.6 being her cheque drawn on the account of the accused. She also does not dispute her signature appearing on the said cheque.
15. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, it is the fact that the complainant is one of the world's leading manufacturers of residential and commercial water heating equipment and boilers, offering a comprehensive product line featuring the best known brands in North America and China, as well as water purification products for residential and light commercial applications. Further argued that the accused is a distributor dealing in the complainant's products. As per the orders placed by the accused the complainant supplied various products to the accused and the accused acknowledge the products supplied by the complainant. It is further argued that as per the C.C.NO.19035/2019 8 purchase orders for the period from 23.12.2017 to 13.12.2018 the complainant raised invoices for the same and the outstanding dues of the aforesaid period is of Rs.11,36,039.06. Further argued that the accused is liable to pay the said amount, which was due for the executed orders, including tax. Inspite of repeated requests, the accused not paid the said amount. Further argued that after credit period, the complainant followed up repeatedly for the balance payment, the accused in order to payment of the unpaid invoices had issued the cheque in question in favour of the complainant and duly singed by the accused.
16. He further argued that the accused has not denied Ex.P.6 being her cheque drawn on the account of the accused. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the case of the complainant. The defence have failed to rebut the presumption under section 139 N.I.Act. The learned counsel for the complainant further argued that the accused has failed to produce any believable evidence that she had issued the alleged cheque in favour of the complainant for the purpose of security and also the defence why she has not returned back the same is not clear. He further argued that under section 139 of N.I.Act, there is a presumption C.C.NO.19035/2019 9 that the cheque have been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.6 being her cheque drawn on the account of the accused. The said presumption is available to the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that she had not given any cheque to the complainant for repayment of the amount and further she had issued blank cheques to the complainant for the purpose of security in the month of December 2017. As such, very defence of the accused is not believable.
17. He further argued that the accused has not produced any oral or documentary evidence to prove her defence. Upon careful perusal of the entire evidence of records both the oral as well as documentary evidence the complainant have proved their case. It was further argued that the accused seriously disputed that the complainant have misused the alleged security cheque and filed false case. However, the accused has miserable failed to prove the said fact. Further the materials available on record C.C.NO.19035/2019 10 clearly established that the accused admitted the issuance of the cheque to the complainant. The initial burden is on the complainant to prove that the cheque was issued in favour of the complainant towards payment of amount, then onus shifts upon the accused to prove her defence and it is for the accused to rebut the legal presumption enumerated under section 138 of Negotiable Instruments Act. As per presumption the cheque was issued for discharge of legal liability and it is for the accused to rebut the said presumption by adducing the cogent and convincing evidence. It was further argued that under the facts and circumstances the complainant have proved that in order to repayment of the amount the accused had issued the cheque in question in favour of the complainant. The accused has not produced any evidence to prove her probable defence. Under these circumstances the complainant have established their case in compliance of 138 of the N.I.Act. Further argued that on 10.10.2018 the accused had issued cheque for Rs.7,44,291/- in favour of the complainant. The complainant has presented the said cheque for encashment at Bhubaneshwar, which got dishonored on 23.10.2018, since funds were insufficient. The accused requested the complainant to redeposited the same in Bangalore on 01.01.2019, which was dishonored again on 07.01.2019 for the same reasons. However, this cheque has been misplaced and the complainant requested the bank to C.C.NO.19035/2019 11 give a copy of the return memo. At this stage, the accused agreed that deposit the cheque in question on 29.01.2019 to the bank and this fact was brought to the complainant notice through phone. Further argued that even after several reminders by the complainant's sales personnel, the accused was not willing to make the due payment. The accused caused delay in making payments and avoided the complainant's sales executives. Hence, the complainant deposited the cheque in question for the entire outstanding amount. Hence, the accused is liable to pay the cheque amount to the complainant. Hence, he prays to convict the accused.
18. The learned counsel for the accused has argued that there was no legally enforceable debt/liability to the complainant from the accused for which the cheque was issued. Further argued that the accused had not issued the cheque in favour of the complainant for repayment of due/debt on 29.01.2019. Further argued that the accused has issued the blank cheques in favour of the complainant for the purpose of security and the complainant have misused the one of the cheque and filed false case. Further argued that the complainant misused the blank signed security cheque. On looking it cheque-Ex.P.6 the signature of the accused is admitted. Whereas, the writing part of the cheque amount in words and in figure are different C.C.NO.19035/2019 12 handwriting. Therefore, the entire cheque was filled up by the complainant as their whims. The complainant created all the documents and filed this false case against the accused. Further argued that the accused is no due to the complainant. Hence, question of the repayment of the amount as contended by the complainant does not arise at all. Therefore, from the evidence placed on record, very due amount from the accused to the complainant is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act, regarding existence of legally enforceable debt/liability.
19. The learned counsel for the accused has filed written argument. In his written argument it is submits that the complaint, being filed by the complainant under section 138 of N.l.Act, is however, devoid of any merit in as much as the cheque issued to the complainant in good faith has been misused and with a malafide intention to harass the accused the complainant has filed this case without complying necessary ingredients. In this connection points for determination are to be framed is a follows;
(i) Does the failure of the complainant to file the complaint by not complying the procedural requirements under section 139 R/w 142 vitiate the case of prosecution amounting to non-maintainability of the case at the threshold?.
C.C.NO.19035/2019 13
(ii) Whether a legally valid and enforceable debt existed qua the complainant and the cheque No.024248 dated: 29.01.2019 valuing Rs.11,36,039/- was issued to discharge or towards legal enforceable debt/liability?.
(iii) Whether the accused has issued the undated cheque in question prior to issuance of cheque No.035646 dated: 10.10.2018, the value of which is Rs.7,44,291/-?.
(iv) Whether cheque No.024248 has been misused by putting date and amount as 29.01.2019 and Rs.11,36,039/- respectively?.
(v) Whether culmination of facts before this court are arising out of misuse of the said cheque constituting an allegation of fraud under section 420 of IPC before JMFC Bhubaneswar Vide ICC No.1208/2020 and suit for recovery of Rs.19,46,400.56 before senior Civil Judge (Commercial Court) Bhubaneswar vide CS No.73/2021?.
(vi) Whether the matter is to be adjudicated keeping aside the judgment or order of the above courts at Bhubaneswar?.
(vii) Whether above said matter on 138 N.I.Act relating to bounce of cheque No.024248 is maintainable in eye of law in compliance of above moot points from Sl.No. (I) to (v)?.
20.Point No.i: It is submits that as per the act, the C.C.NO.19035/2019 14 offence under section 138 and 142 of N.I.Act can we completed only with the concatenation of number of facts wherein 142(b) of the Act Specified that such complaint is made within one month on the date on which the casue of action arises. In the instant case cheque bounce date giving by bank is 31.01.2019, legal notice was sent to the accused 14.02.2019 and served on 22.02.2019, so according to cause of complaint case of action arose on 22.02.2019, complaint petition filed by the complainant before the court is 04.04.2019 which is beyond the statutory period because the complainant is required to filed the case by 24.03.2019. So far as applicability of liability under this section is concerned this case is not maintainable as the complainant fails to oblige the necessary ingredients. This apart, this court ignores this statutory obligation under section 138, 142 of N.I.Act before taking cognizance which is bad in law. Hence this case is liable to be dismissed.
21. Point No.ii: Further as averred by the complainant during cross examination, there is not personal or money transaction with the accused. On the other side the accused-plaintiff at Bhubaneswar Court has averred at Sl.No.9 to 11 of the complaint that materials worth of Rs.12,62,572.36 has been found defective and hence returned and these controversy has been erupted since October 2018. After calculation C.C.NO.19035/2019 15 on settlement agreed by both side, there has been a liability of Rs.7,44,291/- which was to be collected by the complainant through the cheque No.035646 dated:
10.10.2018 issued by the accused the complainant.
Thus there is no question of liability of Rs.11,36,039/- in any way. Further admittedly the complainant has no document about calculation sheet mentioning Rs.11,36,039/- which needs to be availed from the accused. Therefore it is clear that the cheque has been authored by the complainant with date and amount in a fraudulent manner, so hence no liability.
22.Point No.iii: Further as averred at Sl.No.5 of C.S.No.73/2021, the accused-plaintiff has given undated blank signed security cheques bearing No.024247, 024248, 024249 and 024250 to sales head and Regional Sales Manager of the complainant company by virtue of agreement between the accused- plaintiff and the complainant company personnel arising out of assurance by the above mentioned company personnel and after that the said company had sent materials worth of Rs.26,43,862.34 by raising bills without any firm written order from the accused- plaintiff. It is worthy to be mentioned here that the said cheques have been given during December 2017 from the cheque book No.647 of Oriental Bank of Commerce, at Bhubaneswar ranging cheque serial No from 024151 to 024250. It can be more clear that C.C.NO.19035/2019 16 another cheque book No.1544 ranging cheque serial number from 035576 to 035675 of same bank had been started utilizing by the accused from 03.07.2018 and till 31.10.2018 wherein cheque No.035646 dated:
10.10.2018 is apart of it. So there is no stretch of imagination to even presume that the cheque No.024248 of earlier cheque book, already exhausted during December 2017, has been issued after 10.10.2018 i.e., on 29.01.2019. Thus, it is conspicuous that the accused has issued cheque No.024248 undated without mentioned of any amount as security cheque. So such undated security cheque can not be considered discharge of legally enforceable debt/liability and hence does not amount to offence U/s.138 of N.I.Act. Further as averred on 30.03.2019 by the complainant at Sl.No.6 of "Rejoinder notice to the reply notice dated:08.03.2019, amount of Rs.7,44,291/-
relating to cheque No.035646 dated: 10.10.2018 got dishonored first on 23.10.2018, then 07.01.2019 and then misplaced but candidly stated that the accused agreed to deposit the present cheque mentioning Rs.11,36,039/- which is not at all legally enforceable debt as the amount differs from the earlier amount of Rs.7,44,291/-. But the contradictory statement during cross examination on 08.11.2024 reveals that Rs.11,36,039/- was dishonored two times and another cheque in question was issued for repayment of liability which is not at all a fact.
C.C.NO.19035/2019 17
23. Point No.iv: Further cheque No.024248 is part of a group of cheques issued during December 2017 by the accused to the complainant company and all cheques are from the cheque No.647 of Oriental Bank of Commerce, at Bhubaneswar ranging cheque serial number from 024151 to 024250. Then, another cheque book No.1544 ranging cheque serial number from 035576 to 035675 of same bank had been started utilizing by the accused from 03.07.2018 and till 31.10.2018 wherein cheque No.035646 dated:
10.10.2018 is part of it. So, it is beyond doubt that cheque No.024248 of earlier cheque book No.647 can no way be utilized after cheque No.035646 dated:
10.10.2018 contained in next cheque book No.1544 which was utilized from 03.07.2018 and till 31.10.2018.
Even reasonable and sound mind can not date to put the date of cheque No.024248 as 29.01.2019 and amount of Rs.11,36,039/- without any basis and calculation after lapse of two cheque books lasted upto 31.10.2018. thus, there is fraud committed by the complainant who has mis-utilized the cheque in question.
24. Point No.v: Further the facts stated above are well averred before JMFC Bhubaneswar vide ICC No.1208/2020 relating to misuse of the said cheque constituting an allegation of fraud U/s.420 of IPC and before Senior Civil Judge (Commercial Court), C.C.NO.19035/2019 18 Bhubaneswar vide CS No.73/2021 containing misuse of the said cheque in matter of suit for recovery of Rs.19,46,400.56 and hence needs no merit to attract section 138 of N.I.Act.
25.Point No.vi: It is submitted that adjudication at this stage pertaining to cheque bounce matter under section 138 N.I.Act against the backdrop of two pending cases i.e., on fraud and suit for recovery before two courts at Bhubaneswar may be a miscarriage of justice and more so would be prejudice to the accused when there is a conspicuous misuse of cheque in question by the complainant.
26.Point No.vii: Above factors well depicted in each points has no considered view to attract any offence under section 138 of N.I.Act, as there is obvious fraud vis-avis misuse of cheque in this case. Hence, it is not maintainable in the eye of law and the complainant is to be awarded with heavy cost.
27. It is further submits that in view of above clarification it is to be drawn that there is a consistent allegation against the complainant who has misused the cheque in question by putting date and amount as per his will and whim to wreak vengeance against the accused due to the business dispute has been state in the Civil Suit No.7/2021 and Criminal Case vide ICC No.1208/2020 before Hon'ble courts at Bhubaneswar and thus the stand of the defence/accused appears to C.C.NO.19035/2019 19 be more probable than the case of the complainant. The defence raised by the accused created a doubt regarding the truthfulness of the complainant's case. (In matter of T.Nagappa Vs. Y.R.Muralidhar 2008 40 OCR (SC) 496 : when a contention of misuse of cheque has been raised, the accused must be granted opportunity for adducing evidence, notwithstanding presumption U/s.118(a) of 139). Hence, he prays to acquit the accused.
28. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed she had issued the cheque in favour of the complainant. It is not disputed that the complainant is a private limited company and the accused is a proprietor and businesswoman. Whereas, the accused has contended that she had given blank chaques to the complainant in the month of December 2017 for the purposes of security. The accused has specifically denied having debt/liability issued the cheque-Ex.P.6 dated:29.01.2019 towards the discharge of any debt/liability. She contends that the complainant have misused the blank security cheque and a false complaint was filed.
29. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the C.C.NO.19035/2019 20 cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant's in order to prove its case, have examined its Secretary as PW.1 and 15 documents were marked at Ex.P.1 to 15. In chief examination, P.W.1 has repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.6 being her cheque drawn on the account of the accused. The said presumption is available to the complainant.
30. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque-Ex.P.6 was issued. In order to prove her defence, the accused has failed to adduce oral as well as documentary evidence.
31. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further the accused has to produce some probable evidence, C.C.NO.19035/2019 21 which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that she had not given any cheque to the complainant for repayment of the due amount. Further she has taken defence that in the month of December 2017 she had issued the blank signed cheques for the purpose of security. Further the complainant have misused one of the security cheque and filed false case. Except, the said defence, she has not produced any material to prove her defence. Further she has not produced or adduced any evidence regarding prove her defence. If she had not given the cheque to the complainant for repayment of the amount, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the cheque. On which date she came to knew about the alleged illegal act of the complainant, she did not whisper about on what date she came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why she has given the signed blank cheques to the complainant without anticipating the consequence is not explained by her. So also, she has not stated anything as to what steps she took to receive back the cheque. Moreover, immediately after the alleged blank cheque misused by C.C.NO.19035/2019 22 the complainant she has not lodge complaint before concerned police station. No steps have been taken to receive back the cheques, after she came to know about the same. Further the accused has taken the defence that she has filed case against the complainant at Bhubaneshwar. The accused motive is that the accused filed case as a counterblast to intimidate or harass the complainant. Further the accused filed the case as a defence strategy to shift the focus from their own liability to the complainant's alleged wrongdoing. Further the filing of the case did not affect the proceedings of this case.
32. Further the learned counsel for the accused has taken the defence that the complainant filed the complaint by not complying the procedural requirements under section 139 R/w 142 vitiate the case of prosecution amounting to non-maintainability of the case at the threshold. Hence, he prays to dismiss the case. In the instant case cheque was dishonored bank memo on 31.01.2019, the complainant has issued a legal notice to the accused on 14.02.2019 and the said legal notice was served to the accused on 22.02.2019, so according to cause of complaint case of action arose on 22.02.2019, the complaint petition filed by the complainant before the court on 04.04.2019. As per the accused which is beyond the statutory period because the complainant is required to filed the case C.C.NO.19035/2019 23 by 24.03.2019. So far as applicability of liability under this section is concerned this case is not maintainable as the complainant fails to oblige the necessary ingredients. Under section 138 of Negotiable Instruments Act, 1881, the date of service of notice is considered for calculating the limitation. Section 138(b) of the N.I.Act "the complaint must be filed within one month from the date on which the notice referred to in clause (b) of sub-section (1) is served on the drawer...". The Hon'ble Supreme court in the case of K.Bhaskaran V/s Sankaran Vaidhyan (1999)7 SCC 510, it is held that the date of service of notice is the revenant date for calculating the limitation period. Therefore, for calculating the limitation period, the date of service of notice is considered, not the date of issuance of notice. Hence, the complainant has filed this case within the period of one month from the date of cause of action. Therefore, the defence holds no water.
33. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act, that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally C.C.NO.19035/2019 24 recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.6 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
34. Further the accused has taken the defence that in the month of December 2017 she had issued the blank cheques for the purpose of security. Further taken the defence that there is no due to the complainant. The complainant instead of returning the cheques, they have misused the one of the security cheque and filed this false case. Hence, an offence under section 138 of N.I.Act is not attracted. In this regard once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the judgment of the Hon'ble Supreme C.C.NO.19035/2019 25 Court has held in 2021 SCC Online SC 1002 in the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another as categorically held that once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, but without producing any documents, then she has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
35. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount;
C.C.NO.19035/2019 26 such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
36. In the case of Kalemani Tex and another V/s P.Balasubramanian, reported in (2021) 5 SCC 283, the Hon'ble Supreme Court has observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
37. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish her defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
38. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused C.C.NO.19035/2019 27 for the reason stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, in this regard the accused has not produced any documents.
39. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of the cheque and filing a false case is not possible. The accused admittedly having knowledge of business. It is implies, she is conversant with financial transaction. If the complainant misused the alleged security cheque and had not return the same, inspite of collecting cheques leaves from her, as a prudent man, the accused should have inquired with the complainant and demanded to return those cheques. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because she did not take any legal action against the complainant. Further she could have issued a notice to her banker to stop payment or legal notice to the complainant or she could have given complaint to the police station immediately. No such steps were taken by the accused. She simply makes a bald allegation of misuse of security cheque against the complainant. It appears, just to escape from her legal liability, she has taken such contentions without any valid basis.
C.C.NO.19035/2019 28
40. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.6 being her the cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and also cheque return memo-Ex.P.7 it is established that the cheque was dishonored as "Funds Insufficient''. A legal notice being issued as per Ex.P.8 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice send by the complainant on her address. When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
41. It is not the contention of the accused that thereafter she has paid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the C.C.NO.19035/2019 29 evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even she did not whisper anything about the defence while her plea was recorded under section 251 of Cr.P.C. Except she has issued the cheque for the purpose of security. In the judgment of Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he want to take. As such it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
42. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court C.C.NO.19035/2019 30 held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on her behalf.
43. The learned counsel for the accused argued that except signature other writings on the cheque- Ex.P.6 is not in her handwriting, which was filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits her signature, she cannot take up a defence that other contents of cheque was filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC)
138), between Bir Singh V/s Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque C.C.NO.19035/2019 31 had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer, if cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. Even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment. Would attract presumption Under section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
44. The principles emerging from the above referred decision make it clear that, it is not mandatory and no law prescribes that the contents of the cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I.Act arises. The principle of law laid down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, the cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the C.C.NO.19035/2019 32 drawee thereof to make or complete the instrument.
45. As per the version of the accused is that she has nowhere denied transaction. The accused herself has admitted that she is the holder of alleged cheque. It is sufficient hold that she had issued the cheque-Ex.P.6 and even after she has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for her to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused has issued the cheque- Ex.P.6 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by her that the cheque in question was not issued to the complainant for repayment of the due/liability. Further she had issued the blank cheques for the purpose of security. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
46. PW.1 in her evidence has specifically deposed C.C.NO.19035/2019 33 that the accused company as a distributor dealing in complainant company products, the complainant supplied various products as per the orders placed by the accused. The accused acknowledged the products supplied as per purchase orders for the period from 23.12.2017 to 13.12.2018. The complainant raised invoices for the supplied products. The outstanding dues of executed orders for the above said period is total of Rs.11,36,039.06. Further deposed that after the credit period the complainant followed up repeatedly for the balance payment. The accused in order to repayment of amount had issued the cheque-Ex.P.6. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, further the complainant is a private limited company and the accused is a proprietor. As per the assurance of the accused the complainant presented the said cheque for encashment through its banker, but same was dishonored as "funds insufficient", this is also not disputed by the accused. The accused has failed to probables her defence. Further the accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction and other documents no consequences to disbelieve the case of the complainant. With these reasons, I answer point No.1 and 2 in the Affirmative.
47. POINT NO.3 AND 4: In order to avoid C.C.NO.19035/2019 34 repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.6 being her cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter she had repaid the cheque amount within stipulated time of 15 days, after service of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused has not issued the cheque in favour of the complainant for repayment of the dues and why she has not produced any documents. After service of notice the accused has not paid the cheque amount. Hence, the present complaint came to be filed before the court on 04.04.2019 within the period of one month from the date of cause of action.
48. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque-Ex.P.6 was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 C.C.NO.19035/2019 35 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
49. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove her rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.11,50,000/- (Rupees eleven lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said C.C.NO.19035/2019 36 fine amount an amount of Rs.11,40,000/- (Rupees eleven lakhs forty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 19th day of December-2024) (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Smt.BrindaT.B. List of documents marked on behalf of the complainant:
Ex.P.1 : Board resolution.
Ex.P.2 : Invoices.
Ex.P.3 : Statement of outstanding.
Ex.P.4 : Computerized copy of statement of account.
Ex.P.5 : Certificate U/s.65(b) of I.E.Act.
Ex.P.6 : Cheque.
Ex.P.6(a) : Signature of the accused.
Ex.P.7 : Bank endorsement.
Ex.P.8 : Office copy of the legal notice.
Ex.P.8(a) : Postal receipt.
Ex.P.9 : Postal acknowledgment.
Ex.P.10 : Track consignment.
Ex.P.11 : Reply notice.
C.C.NO.19035/2019
37
Ex.P.12 : Rejoinder notice.
Ex.P.12(a) & 12(b) : Postal receipts
Ex.P.13 & 14 : Postal acknowledgments
Ex.P.15 : Complaint.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
-Nil-
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.19035/2019 38 19.12.2024 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.11,50,000/- (Rupees eleven lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.11,40,000/- (Rupees eleven lakhs forty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.