Bangalore District Court
700 071. And Its Branch Office At No.16 vs Having Her Office At Nos.73 & 74 on 9 April, 2021
1
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 9th DAY OF APRIL, 2021
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.56804/2019
M/s. TATA STEEL PROCESSING AND
DISTRIBUTION LIMITED
A company incorporated under the Companies
Act, 1956, having its registered Office at TATA
Centre, No.43, Jawaharlal Nehru Road, Kolkata -
COMPLAINANT
700 071. and its branch Office at No.16, S.P.
Building, 2nd Floor, Apple Villa, Lalbagh Main Road,
Bengaluru - 560 027. Reptd by its Manager -
Accounts - Mr.Jaimurthy
Aged about 43 years S/o. Mr. Annaiah
Mrs. MALAKUMAR
W/o. Mr. Mohan Kumar
Proprietrix : M/s. L.V. Industries,
ACCUSED
having her Office at Nos.73 & 74, Sri. Gandhada
Kaval, 17th Cross, Vishwaneedam, Behind Konaga
Garments, Bengaluru - 560 091.
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused is convicted
(K. GURUPRASAD)
XIV ADDL. C.M.M., BENGALURU
2
JUDGMENT
The present complaint is filed under Sec.200 Cr.PC for the offence punishable under Section 138 of Negotiable Instruments Act.
2. It is the case of the complainant that, it is company incorporated under Companies Act, 1956 carrying on business of processing and distribution of iron and steel materials. The accused carries on business of manufacturer of battery boxes for various other battery manufacturers. The complainant company supplied certain materials to the accused such as Hot Rolled Cut Coils of various specifications and dimensions and in various quantities on credit basis under four invoices dated 22.8.2018, 11.10.2018, 12.10.2018 and 12.10.2018 totally worth Rs.27,64,934.70. The accused acknowledged receipt of said goods and issued to the complainant cheques bearing No.638324 for Rs.9,53,493/-, No.638326 for Rs.5,93,540/- and No.638327 for Rs.5,88,749/- dtd.4.7.2019 drawn on Corporation Bank, Peenya Industrial Estate branch, Bengaluru in favour of the complainant towards part payment of said invoice amount. When the complainant presented said cheques for encashment to its banker i.e HDFC Bank Ltd., Richmond Road branch, Bengaluru on 4.7.2019, the said cheques came to be dishonored for the reason "funds insufficient" on 5.7.2019. When the complainant got issued legal notice dtd.9.7.2019 to 3 the accused calling upon the accused to pay the cheques amount, said notice was received by the accused on 12.7.2019. However, the accused has not paid the cheques amount and as such the accused is guilty of the offence punishable under Section 138 of N.I. Act. Hence this complaint.
3. In order to prove its case, the Manager-Accounts of the complainant company has been examined himself as CW.1 (PW.1) and got marked Ex.P1 to P18 and closed complainant side of evidence. Thereafter, statement of the accused U/s.313 of Cr.PC was recorded. The accused has not lead any defence evidence though sufficient opportunity has been given to the accused. The counsel for the accused has filed written arguments.
4. Heard both sides. Perused the complaint, evidence on record, written arguments and court records.
5. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused has issued three cheques in question in discharge of legally enforceable debt or liability as contended by it?
2) Whether the complainant further proves that the accused has committed the offence punishable under Section 138 of Negotiable Instruments Act?
43) Whether the complainant is entitled for the relief's as prayed in the complaint?
4) What Order?
6. The above points are answered as under;
Point No.1 to 3 : In affirmative,
Point No.4 : As per the final order,
for the following.......
REASONS
7. Point Nos. 1 and 2: Since these two points are inter linked and to avoid repetition they are taken together for discussion.
8. As regard to limitation to file this complaint, it is clear from Ex.P1 to P9 that when the complainant presented the cheques in question to its banker within three months from the date of said cheques, said cheques came to be dishonoured with bank shara "funds insufficient" and that when the complainant got issued statutory notice U/s.138 of N.I. Act to the accused by registered post (within 30 days from the date of intimation of dishonour of said cheques), calling upon the accused to pay the cheques amount, the said notice came to be served on the accused on 12.7.2019. Hence, the present complaint which is filed after expiry of 15 days from the date of service of said notice and within one month thereafter is in time.
59. As regard to legally enforceable debt or liability, in 2010 (11) SCC 441 - (Rangappa Vs Sri. Mohan), it is held that;
" The presumption mandated by Sec.139 of the Act includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebutable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the complainant"..............."when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own".
10. If the facts and circumstances of this case are considered in light of above said principle of law, it is not disputed that the cheques in question are drawn on bank account of the accused and that they bear signatures of the accused. Therefore, statutory presumption arises U/s.139 of N.I. Act in favour of the complainant that the cheques in question are issued in discharge of debt or liability. The burden of rebutting the said presumption by probable defence is on the accused.
611. It is the case of the complainant that it supplied goods worth Rs.27,64,934.70 on 22.8.2018, 11.10.2018, 12.10.2018 and 12.10.2018 as per Ex.P11 to P14 tax invoices and Ex.P15 to P18 consignment notes/lorry receipts to the accused on credit basis and that the accused issued Ex.P1 to P3 cheques towards part payment of said invoice amounts but said cheques came to be dishonored. On the other hand, it is specific defence of the accused that complainant company has not supplied goods to the accused as per Ex.P11 to 14 invoices and Ex.P15 to 18 consignment notes nor has she issued Ex.P1 to 3 cheques towards part payment of invoice amounts. It is further defence of the accused that complainant company has fabricated and created Ex.P11 to 18 documents though it has not supplied any such goods to the accused on credit basis. It is further defence of the accused that the complainant company used to take blank signed cheques from the accused by way of security, prior to supply of goods on credit basis and subsequently used to return such cheques after payment of amounts through RTGs or cheques. It is further defence of the accused that though complainant has not supplied goods as per Ex.P11 to P18, it has misused Ex.P1 to P3-cheques which had been given to the complainant as blank signed cheques by way of security and filed this false complaint against the accused.
712. On careful perusal of evidence on record, it is clear that defence of the accused does not appear to be probable nor does it inspire confidence of this court. It is because, even though accused has received Ex.P8-notice in which it is claimed by the complainant that it has supplied goods worth Rs.27,64,934.70 to the accused on credit basis and that accused in turn issued the cheques in question towards part payment of said amount, accused has not got issued any reply notice to Ex.P8-legal notice denying any such transaction between complainant and accused and putting up defence at the earliest that she has issued said three cheques in blank only by way of security and not towards part payment of any invoice amount. Any prudent person under similar circumstances would have promptly issued reply notice denying receipt of any goods on credit basis and issuance of any cheques towards payment of such goods. Inaction on the part of accused to issue reply notice to Ex.P8, clearly goes against defence of the accused.
13. Further, complainant has produced Ex.P11 to 14 tax invoices and Ex.P15 to 18 consignment notes in support of its claim that it has supplied goods worth of Rs.27,64,934.70 to the accused on credit basis. No doubt, counsel for the accused has disputed genuineness and admissibility of Ex.P11 to P18 on the ground that GST Number of complainant company and GST number of transporter are not mentioned on Ex.P15 to 18 and name of driver of transporter who supplied goods is not 8 mentioned in Ex.P15 to 18 and value of goods supplied to the accused are not mentioned in Ex.P15 to 18 and e-way bill number and L.R number are written in handwriting in Ex.P12 to 14 while e-way bill number is not mentioned in Ex.P11 and certificate U/s.65-B of Evidence Act is not produced though Ex.P11 to 14 are computer generated documents and invoices are raised in four copies instead of triplicate copies as required under GST Act. The said documents are further doubted by the accused on the ground that purchase orders and e-way bills are not produced in this case in connection with Ex.P11 to 18.
14. However, it is pertinent to note that the accused has not entered witness box to deny on oath the genuineness of Ex.P11 to 18 documents. Further, accused has also not got issued any reply notice to Ex.P8-legal notice denying any such transaction between her and complainant company though she has received Ex.P8-notice. Mere suggestions by counsel for the accused to PW.1 during cross-examination, denying genuineness of Ex.P11 to 18 documents is not sufficient to create doubt regarding genuineness of these documents, particularly when Ex.P15 to 18 consignment notes bear seal and signature on behalf of the accused for having received goods as per Ex.P11 to
18. It is pertinent to note that no suggestion has been put by counsel for the accused to PW.1 during cross-examination that the said seal and signature are not the seal and signature of the accused. Even accused has not entered the witness box to 9 disown on oath said seal and signature. Therefore the contentions raised by counsel for the accused by way of suggestions to PW.1 during cross-examination and also in written arguments regarding genuineness of Ex.P11 to 18 documents are not sufficient to conclude that Ex.P11 to 18 are fabricated documents. As regard to admissibility of Ex.P11 to 14, there is no mandatory provision in GST Act and Rules that no extra invoice should be raised apart from issuing invoices in-triplicate. Further, since Ex.P11 to 14 invoices are original documents with seal and signature of complainant company, there is no need of production of Certificate U/s.65-B of Evidence Act though the said documents are computer generated documents.
15. Counsel for the accused has argued in the written arguments that the complaint in this case does not have verification column after the prayer column and as such the present complaint which is filed without verification is not maintainable. However this contention of counsel for the accused cannot be accepted because any complaint filed without verification column is not fatal as there is no mandatory requirement of verification column in criminal complaint field U/s.200 of Cr.PC.
16. Counsel for the accused has argued that complainant company is juristic person which has to be represented by some human agency and that Sec.291 of the Companies Act requires that Board of Directors of the company shall be entitled to 10 exercise all such power and to do all such acts and things as the company is authorized to exercise and do. It is further argued that complainant has produced Ex.P10- authorization letter which shows that Managing Director of the complainant company has authorized PW.1 to represent the complainant company in this case and that said Managing Director has exercised said power by virtue of power conferred upon him by the Board of Directors of the complainant company. However complainant has not produced any board resolution or memorandum of association or article of association of the complainant company under which said Managing Director has been given power to authorize PW.1 to represent complainant company in this case. Even date and number of resolution under which such power has been given to Managing Director is not disclosed in this case. Hence, PW.1 has no locus standi to represent complainant company in this case and as such the present complaint is not maintainable. In this regard, counsel for the accused has relied upon decisions in ILR 2014 KAR 2168, 2014 (5) KCCR 854, 2015 (1) KAR 822 and 2016 (1) DCR 698. Further, it is argued that Ex.P10-authorization letter is not admissible evidence without Certificate U/s.65-B of Evidence Act.
17. Ex.P10 is authorization letter issued by one Abraham G. Stephanos, Managing Director of the complainant company in favour of PW.1 to represent complainant company in this case. Ex.P10 further discloses that said Managing Director has issued 11 Ex.P10 by virtue of power conferred upon him by Board of Directors of complainant company. No doubt, complainant has not produced any board resolution or memorandum of association or articles of association under which said Managing Director has been conferred such powers to issue Ex.P10 in favour of PW.1. Even date of such board resolution and details of such board resolution have not been disclosed in this case. However no suggestion has been put by counsel for the accused to PW.1 during cross-examination that no such resolution has been passed in the meeting of board of directors conferring power on said Managing Director to issue Ex.P10 authorization letter, as stated in Ex.P10. In other words, accused has not disputed passing of any resolution conferring power on the Managing Director to issue Ex.P1- authorization letter in favour of PW.1. Therefore, mere non-production of board resolution or articles of association or memorandum of association is not fatal to the complainant's case and it cannot be said that PW.1 has no locus standi to file this complaint and to give evidence on behalf of the complainant company, particularly when PW.1 has been authorized under Ex.P10 authorization letter to do so and there is recital in Ex.P10 that Managing Director who issued Ex.P10 has been conferred power by the Board of Directors of the complainant company. Hence contention of counsel for the accused cannot be accepted and the decisions relied upon by counsel for the accused are not helpful to the accused.
12Moreover, Ex.P10 is original document and as such Certificate U/s.65-B of Evidence Act is not required. Therefore, it can be concluded that PW.1 has locus standi to file this complaint on behalf of the complainant company.
18. Counsel for the accused has argued that demand for payment of cheque has to be made U/s.138 (b) of N.I. Act by payee or holder in due course, as case may be. However Ex.P8 demand notice does not disclose at whose instance said notice was issued and as such it was not issued either at instance of payee or at the instance of holder in due course and therefore said demand notice is not as per the requirement of Sec.138 (b) of N.I. Act and not maintainable under law.
19. However above said contention of counsel for the accused cannot be accepted because, it is disclosed in Ex.P8 demand notice that said notice has been issued on the instruction of TATA STEEL Processing and Distribution Ltd., i.e., complainant company and as such the said notice has been issued U/s.138 (b) of N.I. Act. Merely because human agency on whose instruction Ex.P8 is issued, is not disclosed in the notice, it cannot be said that Ex.P8 demand notice is not as required U/s.138 (b) of N.I. Act. On careful perusal of Ex.P8 notice, it is clear that the contents of said notice are sufficient and clear enough to communicate to the accused as to on whose instruction and on whose behalf said notice has been issued and for what purpose, said notice has been issued. Therefore, when 13 there is no ambiguity and uncertainty regarding on whose behalf and for what purpose such demand notice has been issued, it cannot be said that Ex.P8 demand notice is not as per requirement of Sec.138 (b) of N.I. Act, merely because, name of human agency of complainant company is not disclosed therein. Hence contention of accused in this regard cannot be accepted.
20. Counsel for the accused has argued that PW.1 has not disclosed in his complaint or in his evidence, date of handing over of cheques in question by accused to the complainant company. There is also difference of ink and handwriting in signature and other contents in Ex.P1 to P3-cheques. It is further argued that PW.1 has admitted that he does not know when and who handed over said cheques to the complainant company. It is therefore argued that these statements of PW.1 and difference in ink and handwriting show that complainant has misused the security cheque given to it in this case.
21. Above said contention of counsel for the accused also cannot be accepted because accused has not entered into witness box to state on oath that he has issued Ex.P1 to P3- cheques in blank by way of security to the complainant company. Further even though Ex.P8 notice has been served on the accused, accused has not got issued any reply notice to Ex.P8 notice putting up such plea at the earliest. This conduct of accused also goes against the defence of the accused that Ex.P1 to P3 cheques have been issued in blank by way of security to 14 the complainant company and that complainant company has misused the said cheques. Even otherwise mere difference in handwriting and ink used in Ex.P1 to P3 is not sufficient to come to conclusion that said cheques have been misused by the complainant company, particularly when Sec.20 of N.I. Act authorizes payee or holder in due course to fill-up contents of inchoate cheque to the extent of legally enforceable debt or liability. It is settled principle of law that even blank signed cheque issued by way of security will be covered under the provisions of Sec.138 (b) of N.I. Act and accused cannot escape from the liability to pay the cheque amount unless and until he rebuts statutory presumption U/s.139 of N.I. Act. Therefore contention of counsel for the accused that security cheques are misused in this case cannot be accepted.
22. In view of my above discussion, I am of considered opinion that the accused has utterly failed to prove or probabalize her defence and thereby to rebut statutory presumption in favour of the complainant. It clearly appears from the evidence on record that defence of the accused is only an afterthought without any basis. Unless and until the accused rebuts the statutory presumption with convincing and cogent evidence, burden cannot be shifted on the complainant. As discussed above, the complainant has placed sufficient materials on record to establish her contention as put by the complainant. The evidence on record is sufficient to accept the case of the 15 complainant that accused has issued cheques in question towards discharge of legally enforceable debt or liability and the complainant has proved all the requirements of Sec.138 of N.I. Act, so as to constitute the offence against the accused. Therefore, Point Nos.1 & 2 are in affirmative and answered accordingly.
23. Point No.3: As discussed in connection with Point Nos.1 & 2, the complainant has proved its case as to commission of the offence punishable U/s.138 of N.I. Act by the accused. The punishment prescribed for the said offence is imprisonment for a period which may extend to two years or with fine. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, provisions of Sec.117 of N.I. Act, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), etc., this court is of the considered view that it is just and desirable to impose fine of Rs.25,00,000/- and out of the said amount a sum of Rs.10,000/- has to be remitted to the State and the remaining amount of Rs.24,90,000/- is to be given to the complainant as compensation as provided U/s.357(1) of Cr.PC and accordingly Point No.3 is answered in Affirmative.
24. Point No.4: For the reasons discussed in connection with Point Nos.1 to 3 this court proceed to pass the following......
16ORDER Acting under Section 255(2) of Cr.PC accused is hereby convicted for the offence punishable under Section 138 of Negotiable Instruments Act. The accused shall pay a fine of Rs.25,00,000/- for the offence punishable U/s.138 of N.I. Act. In default of payment of fine amount, the accused shall under go simple imprisonment for a period of fifteen months.
By exercising the power conferred U/s.357(1) of Cr.PC., out of total fine amount of Rs.25,00,000/-, a sum of Rs.24,90,000/- is ordered to be paid to the complainant as compensation and Rs.10,000/- is ordered to be remitted to the State.
The bail bond of the accused stands cancelled. The cash security deposited by the accused is ordered to be continued till expiry of the appeal period.
Supply the free copy of this judgment to the accused forth with.
(Dictated to the stenographer, transcript thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 9th Day of April, 2021) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru 17 ANNEXURE Witnesses examined for the complainant:
PW.1 : Mr. Jaimurthy
Witnesses examined for the defence:
NIL
Documents marked for the complainant:
Ex.P1 to 3 : Three Cheques
Ex.P1(a) to 3(a) : Signature of accused
Ex.P4 to 6 : Bank endorsements
Ex.P7 : Return statement
Ex.P8 : Copy of Legal Notice
Ex.P9 : Postal acknowledgement
Ex.P10 : Letter of authorization
Ex.P11 to 14 : Tax invoices
Ex.P15 to 18 : Goods Consignment notes
Documents marked for the defence:
NIL
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU