Bangalore District Court
M/S.Stove Kraft Limited vs Sri Tarun Chowdhury on 10 April, 2023
KABC030531562020
IN THE COURT OF THE XXV ADDL. CHIEF METROPOLITAN
MAGISTRATE, AT BANGALORE
Dated this the 10th day of April , 2023
Present:
SMT SUJATA SIDAGOUDA PATIL,
B.SC.,LL.B.
XXV Addl. Chief Metropolitan Magistrate,
Bangalore.
CC NO.14240/2020
Complainant : M/s.Stove Kraft Limited
No.81, Harohalli Industrial Area
Kanakapura Taluk, Ramnagar Dist
Bangalore .
Rep.by its Authorized Representative
Arya Mathew.
(By Sri KCV. Advocate )
V/s
Accused : Sri Tarun Chowdhury
Aged major
Proprietor of
Chowdhurys'
54, Dr.S.N.Bhattacharjee Road, Near Jal
Tank,
Berhampore Dist, Murshidabad
Berhampore - 742101, West Bengal.
(By PVB - Advocate)
1. Date of Commencement 04.09.2019
of offence
2. Date of report of offence 14.11.2019
3. Name of the Stove Kraft Limited
Complainant
2
C.C.No.14240/2020
4. Date of recording of 21.10.2020
evidence
5. Date of closing of 25.01.2023
evidence
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused is Convicted
8. Complainant KCV Advocate
Represented by
9. Accused defence by PVB - Advocate
JUDGMENT
The complainant filed the 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 case is as under:
The complainant is in the business of manufacturing and trading of kitchenware and cookware appliances in India since 1999 and that the accused is a distributor of the complainant's products. The complainant had supplied cookware appliances to the accused on credit basis. As on September, 2018, accused was due to total balance of Rs.4,41,489/. In order to clear the liability, the accused issued a cheque bearing No.047918 DT.04.09.2019 drawn on United Bank of India,Berhampore (WB) for a sum of Rs.4,41,489/ . The complainant presented said cheque through its banker ie Standard Chartered Bank, Koramangala Branch, Bengaluru for realization and the same returned dishonored for 3 C.C.No.14240/2020 the reason "Funds Insufficient", subsequently, the complainant issued legal notice dt.03.10.2019 to pay outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint.
3. After filing of the complaint, cognizance taken and recorded the sworn statement of the complainant. The complainant has complied all the statutory requirements under Sec.138 of N.I.Act. 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 read out to the accused. The accused pleaded not guilty and claimed to be tried.
Immediately after recording plea, the complainant approached with interim application u/s.143A of N.I.Act seeking interim compensation. After hearing, the court has passed speaking order dt.25.02.2022 directing the accused to pay 20% of the cheque amount and after 60 days when the accused failed to comply and complainant insisted for issuance of FLW by invoking Sec.421 of Cr.P.C. , at that time accused deposited 20% of the cheque amount and complied with the interim order. 4
C.C.No.14240/2020
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.7. The complainant company filed substitution application to substitute the authorized representative. Accordingly, the substituted representative has been examined as PW 2 and got marked Ex.P.8 to Ex.P.10. 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. Inspite of grant of opportunity the accused has not lead evidence. Hence, defence evidence taken as Nil.
5. Heard arguments and perused the material on record.
6. 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.047918 DT.04.09.2019 drawn on United Bank of India, Berhampore (WB) for a sum of Rs.4,41,489/ in favour of the complainant towards discharge of legal liability ?
2. Whether the complainant proves beyond reasonable doubt that the accused has committed the offence punishable under Sec.138 of N.I.Act?
3. What order ?5
C.C.No.14240/2020
7. My findings to the above points are as follows:
Point No.1&2 In the Affirmative Point.No.3 : As per final order for the following:
REASONS
8. 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.
9. The case of the complainant is that the complainant is in the business of manufacturing and trading of kitchenware and cookware appliances in India since 1999 and that the accused is a distributor of the complainant's products. The complainant had supplied cookware appliances to the accused on credit basis. As on September, 2018, accused was due to total balance of Rs.4,41,489/. In order to clear the liability, the accused issued a cheque bearing No.047918 DT.04.09.2019 drawn on United Bank of India,Berhampore (WB) for a sum of Rs.4,41,489/ . The complainant presented said cheque through its banker ie Standard Chartered Bank, Koramangala Branch, Bengaluru for realization and the same returned dishonored for the reason "
Funds Insufficient", subsequently, the complainant issued legal notice dt.03.10.2019 to pay outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount 6 C.C.No.14240/2020 to the complainant. Therefore, the complainant was constrained to file the complaint against the accused.
10. In order to create the legal presumption as per Sec.139 of NI Act, the Authorized Representative of the complainant company got examined as PW1 and PW 2 by narrating entire complaint averments and got marked the documents as Ex.P.1 to Ex.P.10. Ex.P1 is N.C. of authorization letter. Ex.P.2 is the cheque. Ex.P.3 is the bank endorsement. Ex.P.4 is the office copy of legal notice. Ex.P.5 is the postal receipt. Ex.P.6 is the postal acknowledgement. Ex.P.7 Account Extract . Ex.P.8 is the Original Board Resolution Letter. Ex.P.9 is the Ledger Extract. Ex.P.10 is the Web copy of Incorporation Certificate.
11. After recording the sworn statement, PW 1 remained absent and not appeared for further process. Therefore, the counsel has filed substitution application. Thereafter, PW 2 being the substituted representative got examined as PW 2 and got marked Ex.P.8 to Ex.P.10.
12. During cross examination the defence counsel has suggested that PW 2 has admitted about non producing the tax invoices along with other relevant documents in order to show the supply of claimed materials to the accused. But she has explained there is running account maintained of the accused 7 C.C.No.14240/2020 and after placing the purchase order they used to supply the materials by providing 60 days time for making payment concerned to the invoice raised by them. Further she admits that they have not produced relevant documents like the consignment note or the delivery note including the bills. But has narrated that when they insisted for payment, at that time the accused issued the cheque in dispute in the month of September, 2019.
13. Further it is observed that during cross examination PW 2 has admitted receipt of damaged materials worth Rs.1,69,525/ which have been returned by the accused and the said transaction has been duly entered in the ledger extract dt.09.01.2020. Accordingly, the revised and updated ledger extract has already been marked as Ex.P.9. The witness has stated that as per the entry of Ex.P.9, the accused has lessened the legal liability by returning the damaged materials and the complainant company is claiming the balance amount after deducting the value of returned damaged materials worth Rs.1,69,525/.
14. The defence counsel has highlighted the process of conversion of the complainant company from private limited company to public limited company by saying that there is no 8 C.C.No.14240/2020 required procedure followed by the complainant company. To that effect, PW 2 with due consent of the court has produced web copy of the Incorporation Certificate issued by the concerned authority through which it has been observed that by following due process of law, the complainant company has obtained certificate dt.13.08.2018 for conversion from private company to a public company. But it is observed that the complainant company has not changed the account and maintained the previous account. Therefore, on perusing Ex.P.10, there is no illegality or irregularity committed on the part of the complainant company towards above said conversion of the liability. As per evidence placed by PW 2, accused was due of total amount of Rs.4,41,498/ in the month of September, 2018. Thereafter, when they insisted for payment at that time accused issued the disputed cheque . Further she deposed that in the month of September, 2019, the cheque in dispute was issued by the accused in the old name of the complainant company. Due to change of private liability into public liability, the claim of the complainant cannot be vitiated as the old account has been continued by the complainant company. Therefore after conversion, the claim of the complainant company cannot be said to be illegal claim. Further it is observed that during lengthy crossexamination the legal 9 C.C.No.14240/2020 liability claimed by the complainant company is not denied by saying that there was no such materials supplied in favour of the accused. In fact during pendency of the case the accused returned the damaged goods to lessen the claimed liability. Therefore the accused impliedly admitted the claimed liability mentioned in the account extract, Ex.P.9. Further it is observed that the complainant has not produced the reply notice issued by the accused after filing of the present case. Despite it the accused himself has not put effort to produce the office copy of the reply in order to prove his defence. Accordingly, the accused has no specific defence by denying the entire transaction including outstanding liability.
15. It is well settled principle of law that "even a blank cheque leaf signed and handed over by the accused which is towards some payment, would attract presumption u/s.139 of N.I.Act in absence of cogent evidence to show that cheque was not issued in discharge of debt". Thus no discrepancy had emerged out of the cross examination which may demolish complainant version even on the touch stone of preponderance of probabilities. Hence, amount mentioned under the cheque is legally recoverable debt after deducting the value of the damaged materials returned by the accused. When there is issuance of 10 C.C.No.14240/2020 blank cheque and the signature is not disputed, then burden lies on the accused to disprove the case of the complainant. That means initially the burden is on the complainant. Once burden is discharged by the complainant, then onus lies on the accused to disprove the case of the complainant. But, the accused has not put better efforts in order to rebut the case of the complainant. Therefore, the object of 138 of N.I.Act is to infuse credibility to negotiable instruments including cheques and to encourage and use of negotiable instruments including cheques in financial transaction. The penal provisions of Sec.138 of N.I.Act is intended to be a deterrent to callus issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same.
16. I have also gone through the principles discussed by the Honble apex court in the judgment held between Bir Singh V/s Mukesh Kumar (2019 (4) SCC 197) in which it has been held that :
"It is immaterial that the cheque may have been filled by any person other than the drawer. If it is duly signed by the drawer then the ingredients of Sec.138 of N.I. Act would be attracted. Therefore issuance of signed blank cheque by the payee towards payment may fill up the amount and other particulars. Therefore issuance of blank signed cheque itself would not invalidate the cheque which was not in discharge of debt or liability by 11 C.C.No.14240/2020 adducing evidence. Because as per Sec.20, 87 , 139 of N.I.Act make it amply clear that person who signs a cheque and makes it over to payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of debt or in discharge of liability".
17. Therefore the accused who being the partner of the accused firm and signatory of the cheque in dispute is legally liable to pay the cheque amount. Hence complainant has placed sufficient oral and documentary evidence to prove that the accused issued the cheque in discharge of legal liability. Therefore, the presumption under Sec.139 of N.I.Act remain intact. The complainant has proved the complaint averments by placing oral and documentary evidence. On the other hand, the accused failed to prove the defence by rebutting the above said presumption.
18. The complainant has proved that the cheque in question was issued by the accused towards discharge of legal liability. Therefore, the court can raise presumption mandated under Sec.139 of N.I.Act as per the ratio laid down by the Hon'ble Apex Court in 2010(11) SCC 441 (Rangappa V/s Mohan).
"Once the cheque relates to the account of accused and he accepts and admits the signature on said cheque, then initial 12 C.C.No.14240/2020 presumption as contemplated under Sec.139 of N.I.Act has to be raised by the court in favour of the complainant". On the other hand, the accused failed to rebut the statutory presumption.
19. In the light of the above discussion and the material placed on record, the court is of the opinion that the complainant has proved existence of legal liability and also proved that the accused issued the cheque in question towards discharge of legal liability. The complainant has proved the ingredients of Sec.138 of N.I.Act. Therefore considering the entire facts and circumstances of the case and the available evidence on record, the court comes to the conclusion that the accused committed the offence punishable under Sec.138 of N.I.Act. The complainant is entitled for balance amount in the form of compensation under Sec.357 Cr.P.C. Therefore, the complainant has proved point No.1 beyond all reasonable doubt. Hence, Point Nos.1 & 2 are answered in the Affirmative.
20.Point No.3 : , In the light of the above finding on point No.1 , I proceed to pass the following:
ORDER Acting u/s. 255(2) of Cr.p.c., the accused is convicted for the offence punishable under Sec.138 of N.I.Act.13
C.C.No.14240/2020 The accused is sentenced to pay fine amount of Rs.1,93,666/ (Rupees One Lakh Ninety Three Thousand Six Hundred and Sixty Six only) In default of payment of fine, shall undergo SI for six months.
Acting under Sec.357(1)(b) of Cr.P.C., out of the fine amount, the complainant is entitled for Rs.1,88,666/ (Rupees One Lakh Eighty Eight Thousand Six Hundred and Sixty Six ) towards compensation.
[[[ Acting under Sec.357(1) (a) of Cr.P.C., the remaining fine amount of Rs.5,000/ (Rupees Five Thousand only) is to be remitted to the state.
Copy of the judgment shall be furnished to the accused free of cost.
(Dictated to the Stenographer directly on the computer , transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 10th day of April, 2023 ).
(SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Vivek Mishra
PW 2 : Arya Mathew
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : N.C. of Authorization letter
14
C.C.No.14240/2020
Ex.P2 : Cheque
Ex.P3 : Bank Endorsement
Ex.P4 : Office copy of legal notice
Ex.P5 : Postal receipt
Ex.P6 : Postal acknowledgement
Ex.P7 : Account Extract
Ex.P8 : Board Resolution
Ex.P9 : Ledger Extract
Ex.P10 : Web copy of the Incorporation
Certificate
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED: Nil
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: Digitally signed by Nil SUJATA SUJATA SIDAGOUDA SIDAGOUDA PATIL PATIL Date: 2023.04.10 17:09:20 +0530 (SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.
15 C.C.No.14240/2020 16 C.C.No.14240/2020