Bangalore District Court
M/S Lovable Lingerie Limited vs M/S.Ganpati Marketing on 2 November, 2022
KABC030889382018
IN THE COURT OF THE XXV ADDL. CHIEF
METROPOLITAN MAGISTRATE, AT BANGALORE
Dated this the 2nd day of November, 2022
Present:
SMT SUJATA SIDAGOUDA PATIL,
B.SC.,LL.B.
XXV Addl. Chief Metropolitan Magistrate,
Bangalore.
CC NO. 32403/2018
Complainant : M/s Lovable Lingerie Limited.
Having their Registered office at
Plot NO.A46, Street No.2, MIDC
Anderi (East)
Mumbai 400 093.
Also having office at
No.18/2, Opp Khodays Breweries Ltd
Behind RMS International School
Konankunte Cross
Kanakapura Main Road
Bangalore 560 062.
Rep. By its Accounts Manager
Mr.Rajshekara T
S/o.Sri Parameshwara Kalluraya
aged 41 years.
(By Sri RC Advocate )
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C.C.No.32403/2018
V/s
Accused : M/s.Ganpati Marketing .
Office at SCO No.25/1
1st Floor, Ekta Market
VPO Burail Sector 45
Circular road
Chandigarh 160047.
2.M/s.Ganpati Marketing
Office at SCO No.25/1
1st floor Ekta Market
VPO Burail Sector 45
Circular Road,
Chandigarh 16047.
(By Sri SLS - Advocate )
1. Date of Commencement 08.08.2018
of offence
2. Date of report of offence 02.11.2018
3. Name of the M/s.Lovable Lingerie Limited.
Complainant
4. Date of recording of 01.12.2018
evidence
5. Date of closing of 06.09.2022
evidence
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused is Acquitted.
8. Complainant Sri - RC
Represented by
9. Accused defence by Sri SLS
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C.C.No.32403/2018
JUDGMENT
The complainant filed this complaint under Sec.200 Cr.P.C. against the accused for the offence punishable under Sec.138 Negotiable Instruments Act (For short N.I.Act).
2. The brief facts of the complainant case is as under:
The complainant company is registered under the companies act that pursuant to MOU dt.09.11.2015, the complainant company appointed the accused as their distributor for territory of all over Himachal Pradesh. The said MOU is signed by accused No.2 in the capacity as Proprietor of M/s.Ganapathi Marketing. After appointment of the accused as a distributor, the complainant sold and supplied their goods ie readymade garments to the accused by raising the invoices. The accused never raised any dispute or contention about the quality and quantity of the goods supplied to the accused and made part payment.
The accused in discharge of legally recoverable debt towards part payment issued cheque bearing No.014593 dt.08.08.2018 for a sum of Rs.29,78,584/ drawn on Axis Bank Ltd, MDC Sector 5 branch, Panchkula (HR) Panchakula 134114. The complainant presented said cheque through its banker ie Yes Bank Ltd, JP Nagar, Bangalore and same 21 C.C.No.32403/2018 returned dishonored for the reason "Account Closed". Hence, the complainant got issued legal notice dt.27.08.2018 to the accused. Despite of service of notice, the accused failed to pay said amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint.
3. Filed the complaint, cognizance taken and recorded the sworn statement of the complainant. Thereafter, the case is registered against the accused and summons issued. The accused appeared with the Advocate and released on bail. Copy of the complaint furnished to the accused. Plea recorded and same was read out to the accused. The accused pleaded not guilty and claimed to be tried.
4. In support of the complainant's case, the Authorized Representative of the complainant company got examined as PW1 got marked Ex.P.1 to Ex.P.65. After closure of the evidence of the complainant, 313 Cr.P.C statement of the accused has been recorded. The accused denied the incriminating evidence placed by the complainant, but, not chose to lead defence evidence. Ex.D1 to Ex.D6 have been marked .
Heard arguments and perused the material on record. 21
C.C.No.32403/2018
5. The counsel for complainant has relied on the following citations :
1. Adalath Prasad Vs Rooplal Jindal (2004) 7 SCC 338
2. Devendra Krishanlal Dagalia Vs Dwarkesh Diamonds Private Limited (2014) 2 SCC 246
3. Sonali Mehta Vs State of Jharkhand (2005) Crl.L.J 1559
4. Nishant Aggarwal Vs Kailash Kumar Sharma (2013) 10 SCC 72.
5. Standard Chartered Bank Vs State of Maharashtra & Ors ( 2016) 6 SCC 62.
6. The counsel for accused has relied on the following citations :
1. Dashrathbhai Trikambhai Patel Vs Hitesh Mahendrabhai Patel and Anr. 2022 SCC Online SC 1376.
2. Indus Airways Pvt Ltd, V/s Magnum Aviation Pvt Ltd (2014) 12 SCC 539.
3. M.S.Narayana Menon Alias Mani Vs State of Kerala and Anr (2006) 6 SCC 39.
4. Krishna Janardhan Bhat Vs Dattatraya G Hegde (2008) 4 SCC 54.
I have gone through the principles discussed in the above judgments.
7. On the basis of the contents of the complaint the following points arise for my consideration. :
1. Whether the complainant proves beyond reasonable doubt that the accused issued cheque bearing No.014593 dt.08.08.2018 for a sum of Rs.29,78,584/ drawn on Axis Bank Ltd, MDC Sector 5 branch, Panchkula (HR) Panchakula 134114 in favour of the complainant?21
C.C.No.32403/2018
2. What Order?
8. My findings to the above points are as follows:
Point No.1: In the Negative.
PointNo.2 : As per final order
for the following :
REASONS
9. Point Nos.1 & 2: Both these points are
interconnected with each other. In order to avoid repetition of facts, both the points have been taken up together for consideration.
10. The case of the complainant is that The complainant company is registered under the companies act that pursuant to MOU dt.09.11.2015, the complainant company appointed the accused as their distributor for territory of all over Himachal Pradesh. The said MOU is signed by accused No.2 in the capacity as Proprietor of M/s.Ganapathi Marketing. After appointment of the accused as a distributor, the complainant sold and supplied their goods ie readymade garments to the accused by raising the invoices. The accused never raised any dispute or contention about the quality and quantity of the goods supplied to the accused and made part payment.
The accused in discharge of legally recoverable debt towards part payment issued cheque bearing No.014593 21 C.C.No.32403/2018 dt.08.08.2018 for a sum of Rs.29,78,584/ drawn on Axis Bank Ltd, MDC Sector 5 branch, Panchkula (HR) Panchakula 134114. The complainant presented said cheque through its banker ie Yes Bank Ltd, JP Nagar, Bangalore and same returned dishonored for the reason "Account Closed". Hence, the complainant got issued legal notice dt.27.08.2018 to the accused. Despite of service of notice, the accused failed to pay said amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused.
11. The accused has taken specific contention that she paid regularly as per purchase invoices raised by the complainant. Even though the cheques have been issued towards security purpose at the time of entering MOU, the same have been misused by the complainant company by filing present case along with another case which is pending before 42nd ACMM Court.
12. It is the contention of the complainant that on 9.11.2015 accused has entered into agreement with the complainant company and MOU is signed by the accused No.2 thereafter within one month period , the complainant company started to supply the ready made garments in favour of the accused proprietory concern. The accused No.1 has undertaken to sell the ready made garments sent by the complainant 21 C.C.No.32403/2018 company in the territory of all over Himachal Pradesh. Accordingly complainant company raised invoices with respect to the products supplied to the accused based on which the company insisted to make payment due on the part of the accused. Accordingly, accused No.2 has issued cheque in dispute towards part payment and same has been presented for encashment process and dishonored. Thereafter, complainant company has complied with the necessary ingredients of Sec.138 of NIAct and filed the present case.
13. In order to prove the case of the complainant , they have produced 65 documents as Ex.P.1 to P.65. Ex.P.1 is the complaint. Ex.P.2 is the Board Resolution. Ex.P.3 is the Cheque. Ex.P.4 is the Bank Endorsement. Ex.P.5 is the office copy of legal notice. Ex.P.6 & 7 are the postal receipts. Ex.P.8 is the postal envelope. Ex.P9 is the Notice. Ex.P.10 Copy of Certificate of Incorporation. Ex.P.11 is the copy of the complaint. Ex.P.12 to Ex.P.22 are the Invoice. Ex.P.23 to Ex.P.29 are the Tax Invoices. Ex.P.30 to Ex.P.47 are the the E way Bill Extracts. Ex.P.48 to Ex.P.65 are the scanned copies of the receipts. Among them Ex.P.12 to Ex.P.29 are the invoices through which the complainant has made allegation that accused was due of amount mentioned under those invoices. On perusal of entire invoices it is evident that Rs.64,00,000/ worth 21 C.C.No.32403/2018 of garment materials have been supplied by the complainant company in favour of the accused proprietory. But not paid the amount shown under above said invoices. Therefore after insisting by the complainant company towards part payment, the accused No.2 has issued the cheque in dispute. But, during cross examination PW 1 who admitted existence of running account maintained by complainant company, failed to produce the authorized copy of the statement to show that based on above said purchase invoices, accused was due of amount and towards part payment issued the cheque in question. Further it is explained by PW 1 that on 12.11.2017 there was fire incident that took place in the complainant company due to this accident, the entire documentary evidence has been erased, but, after instruction issued by the court he has produced the e way bill statement marked as Ex.P.30 through which they have shown some transactions not entire transactions held during the Month of November, 2015 to till cancellation of agreement. But, during cross examination PW 1 admits that the person by name Ashok Singh who entered into MOU with the accused No.2 is still working in the complainant company, but, not examined in order to prove execution of MOU by the complainant company. It is observed that the complainant company cancelled the agreement without following due process of law, like issuance of 21 C.C.No.32403/2018 legal notice, by receiving of unsold garment materials PW 1 who being the GPA holder had not given relevant evidence on this aspect. But, he admits that the person who was working as General Manager in Sales & Marketing Section is still working in the same company as a Managing Director. But , not adduced additional evidence of this person in order to show the cancellation of the agreement. Further it is observed that PW 1 has shown ignorance of pleading for the question put by the defence counsel about part payment made by the accused No.2 after presentation of the cheque bearing No.014592 which has been utilized in filing of private complaint bearing PCR No.3420/2018 pending before the 42nd ACCM Court, Bangalore.
14. On the other hand the accused has taken specific defence that accused proprietory has entered into agreement in order to distribute the ready made garments manufactured by the complainant company. Accordingly accused signed MOU on 9.11.2015. Thereafter complainant company supplied the garment materials by raising invoices. To that effect accused has made regular payment even though the complainant company has misused two blank signed cheques which have been issued at the time of entering into MOU. Out of these two cheques a cheque Ex.P.3 has been utilized by putting recent date as 8.8.2018, but, cheque is issued on 9.11.2015 and very 21 C.C.No.32403/2018 issuance has been mentioned under MOU which is marked as Ex.D.1. During cross examination of the complainant entire MOU confronted to him has been duly admitted including its contents. Further he admits with respect to another cheque bearing No.014592 wherein complainant company has filed another case before 42nd ACMM Bangalore which is pending wherein it is contended that complainant company has supplied ready made garments as per agreement from 9.11.2015 to 16.8.2017 and cheque has been issued on 3.10.2018 and same is dishonored with endorsement "Account Closed " dt.5.10.2017. Despite knowing well about closing of the account by the accused the complainant company official again presented the second cheque bearing No.014593 by mentioning date as 8.8.2018 and complied with the necessary ingredients of Sec.139 of NI Act purposely.
15. Apart it is contended that whenever the complainant company supplied ready made garments has raised the invoices respectively and accused No.2 has made payment regularly. In order to show her regularity, accused No.2 has produced authorized copy of statement of account maintained by the accused which is supported by invoice copy sent by the complainant company. It is observed that during cross examination of PW 1 the defence counsel has asked about 21 C.C.No.32403/2018 authorized copy of statement of account maintained by the accused proprietory through which it has made payment to the complainant regularly. But, complainant has failed to produce either account statement of the complainant company or the account statement of accused proprietory. But at later stage, the accused has produced the authorized copy of the account statement belonging to the accused company wherein it can be gathered that since beginning ie from 18.01.2016 to 04.01.2018. Accused proprietory has made payment more than Rs.88 Lakhs through its account. Therefore, it is specific contention of the defence that the invoices raised by the complainant company as per Ex.P.12 to Ex.P.29 it is approximately Rs.64 Lakhs. Therefore, accused has contended that more than transaction shown by the complainant company, the accused No.2 has made payment. Further it is observed that accused No.2 has made payment approximately of Rs.88 Lakhs . Accused No.2 has made last payment in the month of December, 2017 and in the month of January, 2018 to the extent of Rs.6 Lakhs and Rs.5 Lakh respectively. These payments have been made by the accused after presentation of another cheque for encashment and issuance of legal notice to that effect by the complainant company. But this statement is concerned to different account maintained by the accused bearing No.50200012487090 through 21 C.C.No.32403/2018 which accused has made continuous payment from 18.01.2016 to 04.01.2018. But cheque has been issued concerned to different account bearing No.914020016129777. On perusal of Ex.P.12 to Ex.P.29 and the account statement which is authorized copy produced by the accused it is crystal clear that the accused has made more payment compared to the tax invoices produced by the complainant company.
16. The account statement produced by the accused prevails over Ex.P.12 to P.29 though these documents have been exhibited under 'P' series but payment has been made by the accused as per account statement which gives detail transaction held between the accused and the complainant company. Further it shows that as per allegations the complainant company has canceled the agreement in the month of August 2017 as per Ex.D.2 which is nothing but the certified copy of the complaint filed by the complainant before 42 nd ACMM Court. But in the present case they have not mentioned exact date of cancellation of the agreement, though they have not canceled the agreement by following due process of law. Therefore, the present complainant company has not approached the court with clean hand. Knowingly it has presented second cheque for encashment as account has been closed prior to presenting of another cheque and concerned bank 21 C.C.No.32403/2018 has issued endorsement dt.5.10.2017. But received further payments of Rs.11 Lakhs which has been made by the accused No.2 on 7.12.2017 and 4.1.2018 for likesum of amount Rs.6 Lakhs and Rs.5 lakhs respectively. Hence, the transaction described under PCR No.3420/2018 filed before 42 nd ACMM Court and transaction described under the present case as one and the same. The amount mentioned in the cheque of above said PCR No.3420/2018 is for Rs.32,78,584/ and in the present case it has been mentioned for amount of Rs.29,78,584/. Same has been duly observed during crossexamination of PW1. Apart it, it has been observed that as per MOU exhibited by the parties , complainant company has to give incentive and trade discount as mentioned under Clause 3 of MOU . But there is no documentary evidence produced by the complainant company towards compliance of said clause of MOU - Ex.D.1. Hence, it reveals that the complainant company has not performed its part performance before approaching the court. On the contrary, the accused has shown promptness by filing account statement through which she has proved regular payment made by her from the date of agreement to till the month of January , 2018. Further it is observed that as per the price invoices produced by the complainant company their claim is around about Rs.64 Lakhs. But, the accused has made payment through her 21 C.C.No.32403/2018 account No.50200012487090 for about Rs.88 Lakhs. Hence, accused has made payment more than the allegation made by the complainant company. Hence, the amount mentioned under the cheque is not legally recoverable debt.
17. As per Sec.139 of N I Act, presumption exists in favour of the complainant which is rebuttable one and the onus shifts on the accused to raise probable defence in order to rebut the above said presumption. Hence, it is open for the accused to rely on the evidence placed by the complainant through which if she successfully creates doubt behind approach of the complainant company to the court and shows that the approach of the complainant company is itself not clean handed without due performance of its part.
18. Therefore, it is to be decided whether the complainant had succeeded in establishing the case against the accused as she has committed offence U/s.138 of N.I. Act. As it is already held in the above that, the complainant has to prove the allegations made against the accused beyond all reasonable doubt, to prove the said allegations there must be a clinching and clear evidence against the accused to establish all the ingredients constituting the offence U/s.138 N.I.Act. The complainant has failed to prove the initial burden that lies on it.
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19. Mere production of the cheque is not sufficient to prove the ingredients of Sec.138 of N.I.Act. There must be a existing legally recoverable debt on the part of the accused . The complainant has not discharged the initial burden which lies on him. The accused has successfully rebutted the presumption available under Sec.139 of N.I.Act. Therefore complainant has to establish its case beyond reasonable doubt as there are material omissions especially in view of the probable defence set up by the accused that cheque in question was taken by the complainant's company at the time of entering into agreement. Hence failure of the complainant to prove due of the cheque amount on the part of the accused may itself probabalize the accused version and lead to conclusion that debt mentioned under the cheque is not legally recoverable. Hence it is clear that the accused has performed her part performance. There is no allegation against the accused regarding violation of terms and conditions of the agreementEx.D1. Despite it, the complainant company has not performed its part performance as mentioned under the agreement. Hence, under these circumstances offence under Sec.138 of NI Act is not attracted. Therefore, accused has rebutted legal presumption existing u/s.139 of NI Act . Furthermore, I have gone through the citations placed by the complainant's counsel. Those citations 21 C.C.No.32403/2018 are regarding to the jurisdiction and for compliance of Sec.141 NI Act including maintainability of the case for the offence punishable u/s.138 of NI Act. But, the court has taken cognizance after perusal of compliance of ingredients of Sec.138 & 141 of N.I. Act by the complainant company . Further another citation produced by the complainant company reported in 2021 SCC Online SC 1002 (Sripathi Singh Vs State of Jharkand and Anr) in which also the principles discussed by the Honble Apex Court are not at all applicable to the case on hand.
20. In this regard, it is necessary to refer the following decisions :
1. (2020) 15 SCC 348 ANSS Rajashekar V/s.Augustus Jeba Ananth Debt - Financial and Monetary Laws N.I.Act , 1881, S138, 118, Presumption under Sec.139 -
Rebuttable nature of presumption - Standard of proof to rebut said presumption is preponderance of probabilities Principles summarised Held on a probable defence which creates doubt about existence of a legally enforceable debt or liability., prosecution can fail In determining whether the presumption has been rebutted , the test of proportionality must guide the determination.
2. (2010) 11 SCC 441Rangappa V/s Sri.Mohan 'N.I.Act, 1881 S.139 Presumption under Scope of
- Held , presumption mandated by S.139 includes a presumption that there exists a legally enforceable debt or liability However, such 21 C.C.No.32403/2018 presumption is rebuttable in nature - Criminal Trial - Proof Presumption - Generally'.
The principles of the above cases are amply applicable to the case on hand. In view of the principles laid down in the above cases and materials on record, the court comes to the conclusion that the complainant has utterly failed to prove the case beyond all reasonable doubt and has not placed sufficient oral and documentary evidence for convincing the court in order to convict the accused for the offences punishable under Sec.138 of N.I.Act. Hence, Point Nos.1 and 2 are answered in the Negative. Accordingly, I proceed to pass the following :
ORDER Exercising the powers conferred upon this court u/s.255(1) Cr.P.C., the accused is hereby Acquitted for the offence punishable under Sec.138 Negotiable Instrument Act.
The bail bond of the accused and that of the surety if any stand cancelled. (Dictated to the Stenographer , transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 2nd day of November , 2022).
(SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.21
C.C.No.32403/2018 ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Sri Rajshekar T.
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Complaint
Ex.P2 : Board Resolution
Ex.P3 : Cheque
Ex.P4 : Cheque Return Memo
Ex.P5 : Office copy of legal notice
Ex.P67 : Postal Receipts
Ex.P8 : Postal Envelope
Ex.P9 : Notice.
Ex.P10 : Copy of Certificate of Incorporation
Ex.P11 : Copy of the complaint
Ex.P1222 : Invoices
Ex.P2329 : Tax Invoices
Ex.P3047 : Eway bill extract
Ex.P4865 : Scanned copies of receipts.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED: Nil
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED:
Ex.D1 : Memorandum Of Understanding
ExD2 : Copy of the Complaint
Ex.D3&5 : Tax Invoice/Delivery Challan
Ex.D4&6 : GST Invoice/Delivery Challan
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C.C.No.32403/2018
(SUJATA SIDAGOUDA PATIL)
XXV A.C.M.M., BANGALORE.