Bangalore District Court
J.K. Cement Ltd vs M/S. Shree Malleshwara on 24 January, 2023
1 C.C. No. 19851/2019
KABC030626512019
Presented on : 29-08-2019
Registered on : 29-08-2019
Decided on : 24-01-2023
Duration : 3 years, 4 months, 26 days
IN THE COURT OF XXVII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
Present: Sri. H. Satish B.A.L, LL.B., LL.M.,
XXVII A.C.M.M Bengaluru.
Dated: This the 24 th day of January 2023.
C.C. NO.19851/2019
Complainant J.K. Cement Ltd.,
Having Regional Marketing office
At No.541, 3rd Floor,
4th Cross, HMT Layout,
R.T. Nagar,
BANGALORE 560032.
Represented by its
Authorized Officer
Mr. Sanjay Naik,
S/o. Dattu,
Aged about 44
(By Sri.Chethan Kumar, Adv.,)
V/s.
Accused 1. M/s. Shree Malleshwara
Enterprises
No.1 Maruthi Nagar Bus Stop,
Nagarabhavi Main Road,
Bengaluru 560072
Represented by its
Proprietor and Authorized Signatory
2 C.C. No. 19851/2019
Mr. C.M. Lokesh
2. MR. C.M. Lokesh
Residing at No.74,
Shri Lakshmi Nivas 4th Main,
12th Block, Nagarabhavi,
2nd Stage,
Bengaluru 560072,
And also at:
Chalya (Village),
Shravanabelagola (Hubli)
Chennarayapatna Taluk,
Hassan District 573135
(By Sri. R.R Adv.,)
Offence U/s.138 of Negotiable
Instruments Act.
Plea of the accused Accused submitted he has
defence to make
Final Order ACQUITTED
Judgment Date 24/01/2023
****
JUDGMENT
The complainant company has filed complaint U/Sec.200 of Code of Criminal Procedure against the Accused for the offence punishable U/Sec.138 of the Negotiable Instrument Act.
2. The facts germane for disposal of the instant complaint can be summarized as per following:-
It is the case of the complainant company that, it is a manufacturing unit of J.K, Cement Ltd., Company and it 3 C.C. No. 19851/2019 is engaged in producing and selling Grey Cement, White Cement, Super Grip adhesive and other allied products in various manufacturing units of J.K. Cement Ltd.,. It is stated that, accused No.2 being the authorized signatory and proprietor of accused No.1 concern, placed orders on day today basis for supply of Grey Cement for dealer/stockiest and as per the demand made by the accused, the complainant company use to supply Grey Cement to the accused as per his demands and the accused use to remit payment periodically.
3. It is stated that, the accused has made part payment to the complainant company from time to time and the complainant company has maintained a running account in respect of such payments and stated that as per the books of account maintained by the complainant company, the accused is liable to pay an outstanding amount of Rs.35,69,383/- to the complainant company and the complainant company requested the accused to repay the said amount and the accused in discharge of the liability due and payable, issued Cheque bearing No. 4 C.C. No. 19851/2019 100530 dated: 14/06/2019 for a sum of Rs.35,69,383/- drawn on Sir M Visvesvaraya Co-operative Bank Ltd., 173, 13th B Main Road, Mathikere Extension, Mathikere Branch, Bengaluru, in favour of the complainant company.
4. It is stated that, on 14/06/2019 the complainant company presented the said cheque for encashment through its Banker i.e., Corporation Bank (CAPS Branch, Bengaluru - CAPS), 2nd Floor, 21/1, Jelitta Towers Mission Road Bengaluru and the same got dishonoured and returned with an endorsement dated: 15/06/2019 stating "Exceeds Arrangement ". Thereafter, the complainant company got issued legal notice dated:
05/07/2019 to the accused through RPAD calling upon him to repay the cheque amount within 15 days from the date of receipt of notice and the said notice was served upon accused No.1 on 06/07/2019 and the accused No.2 refused to receive the said notice and the same was returned with shara stating "Party Refused". After receipt of notice, the accused has neither repaid the cheque 5 C.C. No. 19851/2019 amount covered under the aforesaid cheque nor replied to the said notice. Hence, this complaint.
5. The sworn statement of the Authorized Officer/ Deputy Manager of the complainant company by name Sanjay Naik was recorded. As the complainant had complied the mandatory requirements of Section 138 of Negotiable Instrument Act, this Court issued summons to the Accused. After service of summons, Accused entered appearance and was enlarged on bail.
6. The plea of the Accused was recorded and the substance of accusation was read over to the accused in the language known to him and the same was explained, to which, accused pleaded not guilty and submitted he has defense to make.
7. In order to prove the case, the Authorized Officer/Deputy Manager of the complainant company by name Sanjay Naik got himself examined as PW.1 and got marked Ex.P1 to Ex.P15 documents.
6 C.C. No. 19851/2019
8. The statement of Accused under section 313 Code of Criminal Procedure was recorded and the accused denied the incriminating evidence appearing against him. The accused got himself examined as DW.1 and no documents are marked on his behalf.
9. Heard arguments on both sides. I have perused the materials on record.
10. The following points arise for my determination:
(i) Whether the complainant company proves that towards discharge of liability due and payable, accused issued cheque bearing No. 100530 dated: 14/06/2019 for Rs.35,69,383/-
drawn on Sir M. Vishvesaraya Co-
operative Bank Ltd., Mathikere Branch, Bengaluru?
(ii) Whether the complainant company proves that accused has committed an offence punishable U/Sec.138 of Negotiable Instrument Act?
(iii) What order?
11. My answer to the above points are as follows:-
Point No.1 & 2 : In the Negative 7 C.C. No. 19851/2019 Point No.3 : As per the final order, for the following:-
R EAS O N S
12. Point Nos.1 & 2 : In-order to prove the case, the Authorized Officer/ Deputy Manager of the complainant company by name SANJAY NAIK got himself examined as PW1 and the affidavit filed by him in lieu of sworn statement was treated as examination in chief as per the dictum laid down in the ruling of the Hon'ble Apex Court of India, reported in (2014) 5 SCC 590 (Indian Bank Association & Ors V/s. Union of India & Ors). The complainant company got marked Ex.P1 to P15 documents.
13. The complainant has exhibited the following Ex.P1 to P15 documents. Ex.P1 is the Certified copy of extract of Minutes of Meeting of the Board of Directors of the complainant company held on 24/11/2014, Ex.P2 is the Balance confirmation, Ex.P3 is the Accounts statement, Ex.P4 is the Cheque dated: 14/06/2019, Ex.P5 is the Bank endorsement dated: 15/06/2019, Ex.P6 8 C.C. No. 19851/2019 is the Copy of Demand Notice dated: 07/07/2019, Ex.P7 to 9 are the Postal Receipts, Ex.P10 & 11 are the returned Postal covers, Ex.P10(a) & 11(a) are the copies of notices contained in Ex.P10 & 11 postal covers, Ex.P12 is the Postal track consignment, Ex.P13 is the reply notice dated: 20/07/2019, Ex.P13(a) is the Postal cover, Ex.P14 is the customer ledger report and Ex.P15 is the Certificate U/sec. 65B of Indian Evidence Act.
14. The learned counsel for the complainant vehemently argued that, the accused has not disputed his signature at Ex.P4 Cheque and he has not disputed that the Ex.P4 Cheque does not belongs to him and argued the accused has admitted execution of Ex.P2 balance confirmation letter and argued the accused in his reply notice i.e., Ex.P13 has also admitted the liability payable by him and argued the accused has taken a defence that Ex.P6 notice was not served upon him and he in his cross-examination has categorically admitted that he is running his business in the office address shown at Ex.P6 notice and he has also admitted that he 9 C.C. No. 19851/2019 is permanent resident of Residential address shown in Ex.P6 notice and argued as the complainant company has issued Ex.P6 notice through Registered post and though the said notice sent to the residential address has been returned as "Refused", this court will have to be draw presumption as contemplated U/sec. 27 of General Clauses Act that the same is a deemed service and argued no positive evidence is placed on record by the accused to establish that the Ex.P4 cheque was issued by the accused towards security and argued the complainant company by examining PW1 and by producing all relevant documents and by eliciting material answers from DW1, has ably proved its case and the accused has failed to rebut the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act and sought to convict the accused.
15. Per-contra, learned counsel for the accused stoutly argued that the complainant company has not stated in the Ex.P6 notice, complaint and in the affidavit filed by PW1 in lieu of sworn statement/examination in 10 C.C. No. 19851/2019 chief as to the extact transaction that had taken place between the complainant company and accused and argued PW1 in his cross-examination has categorically admitted that an amount of Rs.21,28,000/- is deposited in the account of the accused and also admitted that the accused has deposited sum of Rs.1,00,000/- at the time of taking dealership for purchase and sale of cement and argued PW1 himself has admitted that if the said amount is deducted, the accused is liable to pay only Rs.11,50,000/- and argued though, the complainant company has suggested to DW1 that it is the rule of the complainant company not to release the commission amount of Rs.21,28,000/- to the accused until the dues are cleared, the complainant company has not produced any document in respect of the same and argued the subject cheque issued by the accused towards security in the year 2009 in respect of the transaction in question has been misused by the complainant company and argued Ex.P6 notice was not served upon the accused and also argued that the claim made by the complainant company is not a 11 C.C. No. 19851/2019 valid claim and argued the accused has raised a probable defence and has successfully rebutted the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act by examining himself and also by eliciting material answers from PW1 and sought to acquit the accused.
16. On considering the arguments addressed by the learned counsel for the complainant and accused, before adverting to the oral evidence let in by the complainant and accused and also without touching upon the defence set up by the accused, the documents produced by the complainant company which are at Ex.P4 to 11(a) prima- facie discloses that the complainant company has discharged initial burden of proving issuance and presentation of Ex.P4 cheque, bouncing of cheque, issuance of notice and its service. At this juncture, I find it relevant to quote ruling reported in 2010(11) SCC 441, decided between Rangappa Vs. Sri. Mohan wherein the Hon'ble Apex Court held that:
12 C.C. No. 19851/2019
" Presumption under section 139 of Negotiable Instrument Act, 1881 includes the presumption of the existence of legally enforceable debt or liability. That presumption is required to be honoured and if it is not so done, the entire basis of making these provision will be lost. Therefore, it has been held that, it is for the Accused to explain his case and defend it once the fact of cheque bouncing is prima-facie established. The brain is on him to disprove the allegations once a prima-facie case is made out by the complainant ".
17. In the aforesaid ruling the Hon'ble Apex court has held that, once the complainant establishes bouncing of cheque, then it is for the accused to disprove the allegations and also it is for him to rebut the presumption as contemplated under section 139 of Negotiable Instrument Act by placing acceptable evidence. In the ruling decided by the Hon'ble Apex Court in:
Crl.Appeal No. 1233 - 1235 of 2022 decided on 12/08/2022 between Rasiya V/s Abdul Nazar reported in 2022 SCC Online SC 1131 the Hon'ble Apex court at paragraph 7 held that as per Sec.139 of the Negotiable Instruments Act, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Sec.138 of the Negotiable Instruments Act for discharge, in whole or in part, of any debt or other liability. Therefore, 13 C.C. No. 19851/2019 once the initial burden is discharged by the complainant that the cheque was issued by the accused and the signature and the issuance of cheque is not disputed by the accused, in that case, the onus will shift on the accused to prove the contrary that the cheque was not for any debt or other liability.
The presumption U/sec. 139 of the Negotiable Instruments Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant / Holder of cheque, in that case, it is for the accused to prove the contrary.
In the ruling reported in (2020) 12 SCC 724 decided between APS Forex service private limited V/s Shakthi International Fashion Linkers and others. The Hon'ble Apex Court at paragraph 9, held that :
Sec.139 of the Negotiable Instruments Act is an example of reverse onus clause and therefore, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always presumption in favour of the complainant that their exists legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.
18. In the light of the principle laid down above, it is worth to note that, DW1 in his examination in chief at paragraph 1, deposed that he obtained dealership from 14 C.C. No. 19851/2019 complainant company for purchase and sale of cement and in that connection the complainant company had obtained 2 signed blank cheques, Rs.1,00,000/- deposit and other documents from him. That apart, during cross-examination, nothing has been suggested by the accused to PW1, either disputing that Ex.P4 cheque does not belongs to him or that signature appearing thereon does not belongs to him. During cross-examination dated: 06/10/2022 at paragraph 9, the accused has suggested to PW1 that as on 14/06/2019 the accused was not liable to pay the amount covered under Ex.P4 cheque and the accused has also suggested to PW1 that knowingly well about the same, the complainant company has filled up the contents of Ex.P4 cheque which was given by the accused towards security and by misusing the same, the complainant company has filed a false complaint against the accused and the said suggestion have been denied by PW1. As the accused has admitted his signature at Ex.P4 cheque and also as he has admitted that the same belongs to him and its issuance, this court will have to raise presumption as contemplated U/sec. 139 of the 15 C.C. No. 19851/2019 Negotiable Instruments Act that Ex.P4 cheque was issued by the accused towards discharge of debt.
19. At this juncture, I find it appropriate to quote the ruling reported in:
(2009) 2 SCC 513 decided between Kumar Exports V/s. Sharma Carpets, the Hon'ble Apex Court at paragraph 20 & 21 has explained the course to be adopted by the accused to disprove the case of the complainant and to rebut the presumption as envisaged U/sec. 139 of the Negotiable Instruments Act. At paragraph 20, it is held that, the accused in a trial U/sec. 138 of the Negotiable Instruments Act has two options.
He can either show that consideration and debt did not exist or that under the particulars circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt exist. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as his expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and there was no debt or liability to be discharged by him. However, the court need not insist in every case, that the accused should disprove the non-
existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that, bare denial of the passing of the 16 C.C. No. 19851/2019 consideration and the existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration which, the court may either believe that the consideration and debt did not exist or there non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by the consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances, so relied upon or compelling, the burden may like wise, shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Sec.114 of the Evidence Act, to rebut the presumption U/sec. 118 & 139 of the Negotiable Instruments Act.
At paragraph 21, the Hon'ble Apex Court held that the accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases from the case set out by the complainant, that is the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shift back to the complainant and, 17 C.C. No. 19851/2019 therefore, the presumption U/sec. 118 and 139 of the Negotiable Instruments Act will not again come to the complainant's rescue. In the light of the principle laid down above, now I find it appropriate to enter in to the domain of defence set up by the accused to ascertain whether accused has been able to rebut the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act. Let me discuss each and every aspect in detail.
(I) TRANSACTION:
20. It is to be noted that, it is the case of the complainant company, that based on the demand placed by the accused, it had supplied Cement to the accused and the complainant company has maintained books of accounts in respect of the transaction in question. In order to establish the transaction in question the complainant company, has produced Ex.P2 balance confirmation letter and Ex.P14 Account statement and notably, the complainant has not produced purchae orders. Be that as it may, the accused / DW1 in his examination in chief has deposed, that complainant is known 18 C.C. No. 19851/2019 to him and he is the proprietor of accused No.1 concern and that he is doing Cement business and deposed since 2009, he is purchasing cement from the complainant. DW1 also deposed, that in the year 2009 when he started business transaction with the complainant company he has obtained dealership for purchasing and selling J.K. Cement and at that time he had given Rs.1,00,000/- towards security deposit, documents pertaining to his address, blank letter heads and two signed blank cheques. At paragraph 2, DW1 also deposed that if he purchase 100 bags cement, the complainant company use to give discount up to Rs.20/- to Rs.60/-.
21. During cross-examination, at paragraph 2, DW1 deposed ನನನ ಫರರಧಯವರರದ ಸಮರಟ ಖರರದಸದ ನರತರ ಅವರಗ ಹಣವನನ ನ RTGS ಮತನತ ಚಕ ಮನಖರತರ ಪವತಸದ ಎರದರ ಸರ. As discussed, in order to establish the transaction in question the complainant company has produced Ex.P2 Balance confirmation letter. At paragraph 3, DW1 deposed ನಪ2 ರಲ 1 ನರ ಆರರರಪ ಸರಸಸಯ ಮಹರನ ಇರನತತದ. ನಪ2 ರಲ ನನನ ಸಹ ಇದ ಎರದರ ಸರ.
That apart, during cross-examination dated: 15/09/2022 at 19 C.C. No. 19851/2019 paragraph 1, PW1 admitted ಆರರರಪ ಸರಸಸಯನ ಫರರಧ ಕರಪನಯರದ Cement Dealership ಪಡದನಕರಳನ ಳ ವಗ ಭದದತ ಠರವಣ ನ ಫರರಧ ಕರಪನಗ ಡಪಸಟಮಡರನತತರ. PW1 ಎರದನ ರರ.1 ಲಕ ಹಣವನನ admitted that, when the accused purchases cement from the complainant company and sells it to other customers, the complainant company will give commission to the accused and deposed ಆರರರಪ ಸರಸಸಯನ ಫರರಧ ಕರಪನಯರದ ಸರಮರಟ ಲ ಕಮಮಷನ ಕರಟಟರನತತರವ. At ಖರರದಸ ಬರರ ಗದಹಕರಗ ಮರಟ ಮಡದಗಲ paragraph 2, PW1 deposed that the accused No.1 concern has obtained cement dealership from the complainant company in the year 2009. It is to be noted that, the complainant company has not produced dealership agreement. Even other wise, by taking note of Ex.P2 & P14 documents, coupled with testimony of PW1 & DW1 and the suggestion put forth by the accused to PW1 makes it amply clear that there was a business transaction between the complainant company and the accused in respect of purchase of cement. (II) SERVICE OF NOTICE:
22. It is required to be noted that, the accused has taken defence that Ex.P6 Notice was not served upon him. The 20 C.C. No. 19851/2019 accused / DW1 in his examination in chief, at paragraph 6, deposed that he has not received any notice from the complainant company in respect of dishonour of cheque.
During cross-examination, dated: 15/12/2022, at paragraph 1, DW1 / accused admitted that Ex.P13 document belongs to accused No.1 concern and admitted the address shown in the Ex.P13 document is his office address and admitted that he is carrying on business even today in the said address. DW1 admitted that in the complaint, Ex.P6 notice and Ex.P13 document, the address of the accused No.1 concern is mentioned. DW1 admitted that he is native of Chalya Village, Shravanabelagola Hobli, Channarayapatna Taluk, Hassan District and admitted that he has mentioned the very same address in the rent agreement entered with H.V. Rudramurthy in respect of his office address and admitted that he took the office premises on rent on 01/01/2016.
23. It is to be noted that, during cross-examination, dated: 15/09/2022, at paragraph 5, PW1 deposed ಆರರರಪತನಗ ನಪ6 ನರರಟಸನ ಜರರಗಲಲ ಎರದರ ಸಕ ಆ ನರರಟಸನನ ನ ಸಸರಕರಸಲನ ಆರರರಪತ ನರಕರಸರನತತನರದನ ನನಡಯನತತರ. ನಪ6 ರಲ 21 C.C. No. 19851/2019 ದ , ಅದರಲ ಶ ದವಣ ಬಳಗರಳ, ಚನನರಯಪಟಟಣ ಆರರರಪತನ 3 ವಳಸ ಕಣಸದನ ತಲರಕ ವಳಸಕಕ ಕಳನಹಸದ ನರರಟಸನ ಬಗಗ ಜರರಗದರ ಹರತರನಗ ಬರದ 2 ಅರಚ ಲಕರರಟಗಳನನ ನ ಹಜರಸರನತತರನ. It is to be noted that, the accused has suggested to PW1, that the accused has vacated the address shown in Ex.P10 & 11, 30 years ago and because of which Ex.P6 notice was not served upon the accused, for which PW1 deposed that he do not know whether accused was residing in the address shown at Ex.P10 & 11 as on date of issuance of Ex.P6 notice. At paragraph 6, PW1 denied that he has not produced any documents to show that Ex.P6 notice was served upon the accused to the 2 addresses of Bengaluru and the same is denied by PW1. It is also suggested that, if Ex.P6 notice was sent to the Bengaluru address of the accused, the accused would have requested to pay the commission amount of Rs.21,28,000/- and for the said reason, complainant company has not issued / sent Ex.P6 notice to the Bengaluru address of the accused, the same is denied by PW1.
24. It is required to be noted that, in order to establish that the complainant company had issued notice to the 22 C.C. No. 19851/2019 accused through RPAD intimating about dishonour of Ex.P4 cheque and calling upon him to repay the amount covered under Ex.P4 cheque, the complainant company has produced Ex.P6 legal notice dated: 07/07/2019, Ex.P7 to P9 Postal receipts, Ex.P10 & 11 Postal covers and Ex.P12 Postal track consignment. It is to be noted that, as per Ex.P12, Ex.P6 notice sent to the Nagarbhavi / Bengaluru address of the accused was served and the Ex.P6 notice sent to the Chalya Village, Channarayanpatna Taluk, Hassan District address and to the office address of the accused situated at Nagarbhavi was returned as "Party refused".
25. It is worth to note that, as discussed, the accused has admitted his office address mentioned at Ex.P13 and he has also admitted that his office address mentioned at Ex.P6 notice and he has specifically admitted that his original place of residence is Chalya Village, Channarayapatna Taluk, Hassan District. Therefore, as the accused has admitted his address mentioned at Ex.P6 notice and that the same belongs to him and though Ex.P6 notice issued to the accused were returned as Party refused as per Ex.P10 & 11, the same will 23 C.C. No. 19851/2019 have to be construed as deemed service and as the complainant has sent notice to the correct address of the accused, through RPAD, this court will have to raise presumption as contemplated U/sec. 27 of the General Clauses Act that if, the notice is sent to the correct address through Registered post, the same is a deemed service. The said proposition of law is laid down in the ruling decided between C.C. ALAVI HAJI V/s. PALAPETTY MUHAMMED AND ANOTHER (Crl.Appeal No. 767/2007) decided on 18/05/2007, wherein, the Hon'ble Apex court at Paragraph No.14 held that:
"Sec.27 of General Clauses Act gives raise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed have been effected at the time at which the letter would have been delivered in the ordinary course of business. This court has already held that when a notice is sent by registered post and is returned with a postal endorsement refused or not available in the house or house lock or shop closed or addressee not in station due service has to be presumed". 24 C.C. No. 19851/2019
In the light of the principle laid down above and taking note of the admission of DW1, it cannot be said that Ex.P7 notice was not served upon the accused. It is worth to note that, though the accused has taken a defence that Ex.P6 notice was not served upon him, the complainant company has produced Ex.P13 Reply notice dated: 20/07/2019 in which the accused has categorically mentioned that he is replying to the notice issued by the complainant company. Notably, the accused has not disputed Ex.P13 document and he in his cross- examination at paragraph 5, he has categorically admitted that he has issued Ex.P13 Reply notice to the complainant company. Therefore, it could be concluded that Ex.P6 notice was served upon the accused.
III. STATEMENT OF ACCOUNT:
26. It is to be noted that, as discussed, in order to establish that the accused is liable to pay the amount covered under Ex.P4 cheque, the complainant company has mainly relied on Ex.P2 balance confirmation letter issued by accused and the complainant company has also produced Ex.P3 Account statement and Ex.P14 Customer ledger report. 25 C.C. No. 19851/2019 During examination in chief, at paragraph 2, DW1 deposed that, the complainant company use to maintain 3 accounts in respect of the cement business he made with the complainant company and the same are SECURITY DEPOSIT ACCOUNT, SPECIAL SECURITY DEPOSIT ACCOUNT AND TRADE ACCOUNT and deposed that if he pays Rs.1,00,000/- the complainant company use to give him cement worth of Rs.2,00,000/- and deposed in the discount given to him, certain amount was deposited to the trade account and certain amount was deposited to the special security deposit account.
27. At paragraph 3, DW1 deposed that, the business transaction between himself and complainant company came to end in the year 2018 and deposed in the special security deposit account, up to 2018 the complainant company has deposited Rs.21,28,000/- and every year, bank rate interest was given to the said amount. At paragraph 4, DW1 deposed the complainant company has not paid the said sum of Rs.21,28,000/- and also deposed since 2018 the complainant company has not deposited bank rate interest to the said 26 C.C. No. 19851/2019 amount and also deposed that the security deposit amount of Rs.1,00,000/- paid by him to the complainant company has not been returned. At paragraph 5, DW1 deposed, that complainant company closed its business in the year 2018 and in the year 2019 he had written letter to the complainant company stating to take back the commission amount and to tell him the amount payable by him and the complainant company orally informed him to pay Rs.3,00,000/- and he has paid the same in the year 2022 through RTGS and deposed he has not liable to pay any amount to the complainant company.
28. During cross-examination, at paragraph 2, the complainant company has suggested to accused / DW1 ಫರರಧ ಕರಪನಯಲ ನನನ ಮಡನತತದದ ವವವಹರದ ಬಗಗ Security deposit account & Trade Account ಮತ ತ ಇತನತ ಎರದರ ಸರಯಲಲ.. ನನನ ಫರರಧಯವರರರದಗ ಮಡದ ವವವಹರದ ಬಗಗ ನಪ3 ರಲ ಸರಗತಗಳನ ನಮರದನ ಇದ ಎರದರ ಸರ. At paragraph 3, DW1 admitted that Ex.P2 document contains seal of accused No.1 concern and admitted that he has signed in the said document. At paragraph 4, the complainant company has suggested to 27 C.C. No. 19851/2019 accused / DW1 that the complainant company was not giving him discount to the tune of Rs.20/- to Rs.60/- as deposed by him and the same is denied by DW1. At paragraph 5, DW1 admitted that he has not produced any document to show for having written letter to the complainant company seeking return of amount deposited in his account. DW1 deposed ನಪ4 ರಲ ನಮರದನ ಆಗರನವ ಹಣವನನ ನ ನನನ ಫರರಧ ಕರಪನಗ ತರನವಳ ಮಡದ ಕರಣ, ಫರರಧ ಕರಪನಯ ನಯಮಗಳ ಪ ದಕರ ನನನ ಖತಯಲ ಜಮ ಆಗರನವ commission ಹಣ ಮತನತ ಭದದತ ಹಣ ರರ.21,28,000/- ಹರತರನಗಸಲನ ಬರನವದಲಲ ಎರದರ ಸಕ ಫರರಧ ಕರಪನಯಲ ಆ ರರತ ನಯಮ ಇರನವದಲಲ ಎರದನ ನನಡಯನತತರ. At paragraph 6, DW1 admitted that in the year 2019 the complainant company has not told him orally that he is liable to pay Rs.3,00,000/-. DW1 admitted that he has issued Ex.P13 notice to the complainant company.
29. That apart, during cross-examination, dated:
15/09/2022 at paragraph 1, PW1 admitted that accused has deposited sum of Rs.1,00,000/- to the complainant company at the time of obtaining cement dealership. PW1 also admitted that the complainant company use to give 28 C.C. No. 19851/2019 commission to the accused when accused purchased cement from the complainant company and sells it to other customers. PW1 deposed that whenever the accused has purchased cement from the complainant company and has sold to other customer, the complainant company has given commission to the accused. At paragraph 2, PW1 deposed that accused has obtained dealership in the year 2009 and denied that the complainant company has not paid commission amount to the accused. At paragraph 3, PW1 deposed, accused has given Ex.P4 cheque to the complainant company after issuance of Ex.P2 letter and admitted that the amount mentioned in the Ex.P2 document does not tally with the document mentioned at Ex.P4. PW1 deposed that the accused has transacted with the complainant company up to 2018.
30. PW1 also deposed ಈ ಪ ದಕರಣವನನ ನ 2019 ರಲ ಆರರರಪತನ ವರನದದ ದಖಲನ ಮಡನವ ಕಲಕಕ ಆರರರಪತನಗ ಫರರಧ ಕರಡಬರಕದ ಓಟನ ಟ ರರ.21,28,000/- ಮತತ ಜಮರಗತನತ. ಅದರಲ security ಹಣ ರರ.1,00,000/- , commission ಹಣ ಮತನತ ಅದಕಕ ಬಡಡ ಎಲ ಲ ವ ಸಹ ಸರರಕರಡರರನತತದ. ಅದಲಲದರ ಆರರರಪತ 2019 ಆಗಸಟ ತರಗಳನಲ ರರ.2 ಲಕ 29 C.C. No. 19851/2019 ಹಣ ಮತನತ ಮರ-2021 ರಲ ರರ.1 ಲಕ ಹಣವನನ ನ ಬವರಕ ಅಕರಟಮನಖರತರ ಫಯರರಧಗ ಪವತಸರನತತರ. At paragraph 4, PW1 deposed ನನನ ಪ ದಕರ ಆ ಮತತವನನ ನ ಕಳದನ ಆರರರಪತನನ ಈ ದನದವರಗ ಫರರಧಗ ರರ.11,50,000/- ಹಣ ಮತ ತ ಬಕ ಕರಡಬರಕಗದ.. ಆ ವಚರವನನ ನ ನಪ4 ನರರಟಸಸನಲ, ದರರನಲ ಮತನತ ನನನ ಮನಖವ ವಚರಣಯಲ ತಳಸಲಲ ಎರದರ ಸರ. PW1 voluntarily deposed that the Cement business is a running account and the commission amount and the interest amount is a different account and admitted that the same is not mentioned in the Ex.P6 notice, complaint and in his examination in chief. PW1 deposed that after culmination of dealership business, complainant company will return Security deposit, commission amount and the interest amount to the accused and admitted the same has not been mentioned in the complaint, Ex.P6 notice and in the examination in chief.
31. During cross-examination dated: 06/10/2022 at paragraph 8, PW1 deposed 2018 ರಲ ಆರರರಪತನನ ಫರರಧಗ ಎಷನ ಟ ಹಣ ಬಕ ಕರಡಬರಕಗತನತ ಎರದರ ಸಕಯರ ನಪ3 ರಲ ನಮರದನ ಆಗದ ಎರದನ ನನಡಯನತತರ. ಆರರರಪಗ 2018 ರಲ ಆತನನ ಎಷನ ಟ ಬಕ ಕರಡಬರಕಗದ ಮತನತ ಟ ಬಕ ಇದ ಎರದನ ಹರಳ ನರರಟಸನ ಕರಟಟರನವದಲಲ .
ಆತನನ ಕರಟಟ ಭದದತ ಹಣ ಎಷನ 30 C.C. No. 19851/2019 PW1 voluntarily deposed that they have given only Account statement and also deposed that the accused has issued Ex.P2 document. At paragraph 9, PW1 admitted that the complainant company will send message to the mobile phone of the customer about the balance repayable. It is suggested by the accused that on 05/02/2022, the complainant company had sent message to the mobile of the accused stating that he has to pay balance amount of Rs.32,69,973/- for which PW1 deposed after deducting the payment of Rs.3,00,000/-, the complainant company has sent the said message. During cross-examination, dated: 24/12/2022 at paragraph 10, PW1 admitted ನನನ ಮತನತ ಆರರರಪ ನಡನವ September 2019 ರರದ ವವವಹರ ನಡದರನವದಲಲ. ನಪ14 ಅಕರಟ statement ಕ ತಮಬದದವಗರನವದಲಲ ಎರದರ ಸರಯಲಲ. ನಪ14 ಈ ಪ ದಕರಣದ ಸಲನವಗ ಸಸಷಟಸದನರದರ ಸರಯಲಲ.
32. On careful scrutiny of the testimony of PW1, DW1 and the documents produced by the complainant company , what emerges is that the accused has not disputed the transaction in question in toto. That apart, though the accused has denied issuance of Ex.P13 reply notice and 31 C.C. No. 19851/2019 though there is no averment in the complaint that the accused had issued Ex.P13 reply notice, a careful scrutiny of Ex.P13 reply notice dated: 20/07/2019 depicts that the accused has categorically admitted that, the outstanding amount of Rs.35,69,383/- against his security deposit amount of Rs.21,28,994.24/- was due to be paid by him to the complainant company. That apart, the accused has categorically admitted Ex.P2 document and his signature appearing thereon belongs to him and also admitted the seal appearing in the said document belongs to accused No.1 concern.
33. On scrutiny of Ex.P2 document, it reveals that the accused has confirmed the debit balance of Rs.36,69,382.52/- as on 31/03/2019. Ex.P4 cheque is dated: 14/06/2019 and in the said cheque an amount of Rs.35,69,383/- is mentioned. PW1 has categorically admitted that the amount mentioned in Ex.P2 document does not tally with the amount mentioned in Ex.P4 cheque. That apart, the accused in his cross-examination, at paragraph 3, admitted that the transaction made by him with the complainant 32 C.C. No. 19851/2019 company is reflected in the Ex.P3 document and also admitted as per Ex.P3 on 13/05/2019 and 31/05/2019 the accused has made payment of Rs.50,000/- each to the complainant company. As the accused has admitted payment of Rs.1,00,000/- on the aforesaid dates and if the same is taken in to account then the amount mentioned in the Ex.P4 cheque tallies. At Ex.P3 as on 15/06/2019 the outstanding amount payable by the accused is mentioned as Rs.35,69,382/-.
34. Be that as it may, it is worth to note that, on careful scrutiny of Ex.P6 notice, complaint averments and the affidavit filed by PW1 in lieu of examination in chief, it reveals that nothing is mentioned in the said document, stating that the accused had deposited Rs.1,00,000/- at the time of dealership for sale of cement and that the complainant company use to pay commission to the accused and that the complainant company had maintained different accounts in respect of business, commission and interest payable. It is only during the examination in chief, the accused has deposed about the same and notably, the complainant 33 C.C. No. 19851/2019 company has admitted the same. It is worth to note that, though the complainant company has suggested to accused that as per the norms of the complainant company they cannot repay the commission and deposit amount of Rs.21,28,000/- to the accused until he repay the entire dues, to establish the same, the complainant company has not produced any materials before the court. That apart, the complainant company has also not produced dealership agreement to ascertain what was the terms and condition of the said agreement.
35. That apart, as discussed, PW1 in his cross- examination has categorically deposed that as per him, as on this day the accused is liable to pay only Rs.11,50,000/- and he has specifically admitted that at the time of instituting the complaint in the year 2019 there was an amount of Rs.21,28,000/- was deposited in the account of the accused and notably, the said aspect has not been stated by the complainant company at Ex.P6 legal notice, in the complaint and also in the affidavit filed by PW1 in lieu of examination in chief. Therefore, when the complainant company admits that 34 C.C. No. 19851/2019 as on 2019 when the instant complaint was filed an amount of Rs.21,28,000/- was credited in the account of the accused which includes security deposit amount of Rs.1,00,000/- paid by the accused and commission amount inclusive of interest was in the account of the accused and without the same being narrated in the Ex.P6 notice, complaint and in the affidavit filed by PW1 in lieu of examination in chief, this court is of the view that Ex.P4 subject cheque was not issued by the accused towards discharge of legally enforceable debt. More so, when PW1 has deposed that the accused has transacted with the complainant company up to 2018, in such an event the complainant company ought to have returned / repaid the commission amount of Rs.21,28,000/- to the accused and when the transaction between the complainant and accused has come to an end, holding of the said amount by the complainant company is not justified by placing any credible evidence.
(IV) CHEQUE ISSUED TOWARDS SECURITY:
36. It is to be noted that, the accused / DW1 in his examination in chief has deposed that he had issued two 35 C.C. No. 19851/2019 signed blank cheques to the complainant company in the year 2009 at the time of taking dealership for sale of cement. During cross-examination, at paragraph 3, DW1 has denied the suggestion made by the complainant that he has not issued subject cheque and another signed blank cheque to the complainant towards security. DW1 admitted that he has not obtained endorsement from the complainant company for having issued 2 signed blank cheques towards security. DW1 voluntarily deposed that there is mention about the same in dealership agreement. It is to be noted that, either the accused or the complainant company have not produced the said agreement. At paragraph 6, the complainant company has suggested to accused / DW1 that he is liable to pay the amount covered under Ex.P4 cheque and the same is denied by PW1.
37. During cross-examination dated: 06/10/2022 at paragraph 9, the accused has suggested to PW1, that as on 14/06/2019 the accused is not liable to pay the amount covered under Ex.P4 cheque and the same is denied by PW1. The accused has also suggested to PW1 that by filling up the 36 C.C. No. 19851/2019 contents of cheque given by the accused as a security, the complainant company has filed a false complaint against the accused. It is to be noted that, in the ruling reported in 2019 SCC Online SC 138 decided between Birsingh V/s Mukesh Kumar. At paragraph 37 & 38 the Hon'ble Apex Court held that, a meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sec.28, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to a payee remains liable unless he adduces evidence to rebut the presumption that the cheque 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 the cheque is other wise valid, the penal provisions of Sec.138 would be attracted. At paragraph 38, the Hon'ble Apex Court held if a signed blank cheque is voluntarily presented to a payee, towards some payments, the payee may fil-up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the 37 C.C. No. 19851/2019 accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence".
38. It is required to be noted that, as per Sec.20 of the Negotiable Instrument Act, when one person signs and delivers to another a stamped in accordance with the law relating to the Negotiable Instruments either wholly blank or having written there on an in-complete the Negotiable Instruments he thereby gives prima-facie authority to the holder there of to make or complete. In the ruling relied reported in 2006 SCC Online KAR 123 decided between Shreyas Agro Services Pvt Ltd., V/s. Chandrakumar S.B at paragraph 6 the Hon'ble High Court of Karnataka held that Sec.20 of the Negotiable Instruments Act declares that inchoate instruments are also valid and legally enforceable. In the case of a signed blank cheque, the drawer gives authority to the drawee to fill up the agreed liability. If the drawee were to dis honestly fill up any excess liability and the extent of liability if it becomes bonafide matter of civil dispute in such case, the drawer has no obligation to facilitate the encashment of cheque. 38 C.C. No. 19851/2019
39. In the ruling reported in AIR 2000 KAR 169 H Maregowda V/s Thippamma the Hon'ble High Court of Karnataka at paragraph 14 held that a reading of Sec.20 of the Negotiable Instruments Act will reveal that the words used are "either wholly blank or having written thereon an incomplete Negotiable Instruments". Thus, even if a blank promissory note is given, it cannot be taken as a defence to avoid a decree based on such instrument, once it is found that the document produced before the court satisfies the requirements of a promissory note within the meaning of the Negotiable Instruments Act. The instrument may be wholly blank or incomplete in particular in either case, the holder has the authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument if so wide that the party so signing is bound to be a holder in due course. Even though the holder was authorized to fill a certain amount and he infact inserts a greater amount, it is necessary that the sum ought not to exceed the amount covered by the same. 39 C.C. No. 19851/2019
40. In the light of the aforesaid provision and principle laid down in the aforesaid ruling the holder of the cheque can fill up the contents of the cheque and present it to the bank for encashment. That apart, whether the accused had authorized complainant / Holder of the cheque to fill up the contents of the cheque is to be looked into. At this juncture, I find it relevant to quote the ruling decided by the Hon'ble High Court of Madras decided on 21/03/2018 between E. Dhanus Kodi V/s D. Sreedhar wherein, the Hon'ble High Court held that the complainant cannot be justified in doing material alteration beyond the knowledge of the accused and held it would be certainly unlawful if the complainant is allowed to fill up the details of the cheque beyond the knowledge of the accused, such that filling update and the amount in a blank cheque.
41. In the light of the principle laid down above, as Ex.P4 cheque was issued by the accused as a security in respect of the transaction in question as claimed by him and also when the PW1 has categorically admitted that as on 2019 40 C.C. No. 19851/2019 an amount of Rs.21,28,000/- was credited in the account of accused and without the documents being placed on record by the complainant company that, as per the norms of complainant company that the complainant company will not return the said amount of Rs.21,28,000/- to the accused without he clearing the outstanding amount towards the dealership business and without the complainant company producing the dealership agreement before the court, it could be concluded that the accused had not authorized the complainant to fill up the contents of the cheque and the same was also not within the knowledge of the accused. That apart, as discussed the material placed on record by the accused also discloses that the amount covered under Ex.P2 document, is in excess when compared to Ex.P4 cheque and the accused has proved that there is a bonafied dispute with regard to the extent of liability and therefore, the dishonour of cheque under such circumstances, does not attract prosecution U/sec. 138 of the Negotiable Instruments Act and thereby the accused has ably established that the subject cheque was issued by him to the complainant company towards security in respect of the transaction in question. As 41 C.C. No. 19851/2019 such, taking note of the entire materials placed on record by the accused, it could be concluded that the accused has raised a probable defence that the subject cheque was not issued to the complainant company towards discharge of legally enforceable debt and thereby the accused has rebutted the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act by placing acceptable evidence. Accordingly, I answer Point No.1 & 2 in the Negative.
42. Point No.3 :- For the foregoing reasons, I proceed to pass the following:-
O R DE R In exercise of power conferred U/sec. 255(1) of Cr.PC, the accused is acquitted for the offence punishable U/s.138 of N.I. Act.
Bail bonds of accused shall be in force for a period of Six months.
(Dictated to the stenographer, directly on computer , corrected and then pronounced in open court by me on this the 24 thday of January, 2023) (H. Satish) XXVII A.C.M.M., Bengaluru.42 C.C. No. 19851/2019
ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : SRI.SANJAY NAIK Documents marked on behalf of the complainant Ex.P1 : CC of extract of Minutes of Meeting of the Board of Directors of the complainant company held on 24/11/2014 Ex.P2 : Balance confirmation Ex.P3 : Accounts statement pertaining to the transaction of the accused Ex.P4 : Cheque dated: 14/06/2019 Ex.P5 : Bank endorsement Ex.P6 : Copy of Demand Notice dated: 07/07/2019 Ex.P7 to 9 : Postal Receipts Ex.P10 & 11: Returned Postal covers Ex.P10(a) & 11(a) : Copies of notices contained in Ex.P10 & 11 postal covers Ex.P12 : Postal track consignment Ex.P13 : Reply dated: 20/07/2019 Ex.P13(a) : Postal Cover Ex.P14 : Customer ledger report Ex.P15 : Certificate U/sec. 65B of Indian Evidence Act 43 C.C. No. 19851/2019 Witnesses examined on behalf of the accused:
DW1 : C.M. LOKESH Documents marked on behalf of the accused:
-Nil-
XXVII A.C.M.M Bengaluru.44 C.C. No. 19851/2019
24/01/2023 Comp: Sri. GKM Adv., Accd: Sri. YVJ Adv., For Judgment.
(Order typed vide separate sheet) O RD ER 45 C.C. No. 19851/2019 In exercise of power conferred U/sec. 255(1) of Cr.PC, the accused is acquitted for the offence punishable U/s.138 of N.I. Act.
Bail bonds of accused shall be in force for a period of Six months.
(H. Satish) XXVII A.C.M.M., B engaluru.