Bangalore District Court
Services Pvt.Ltd vs India Pvt.Ltd on 18 June, 2021
IN THE COURT OF II ADDL.JUDGE & ACMM,
COUIRT OF SMALL CAUSES,
BENGALURU (SCCH.13)
DATED THE 18TH DAY OF JUNE 2021.
PRESENT :
SMT. DIVYASHREE.C.M., B.A.L, LL.M,
II Addl. Judge & ACMM,
Court of Small Causes,
Bengaluru
C.C.No.17728 OF 2012
1. Case Number : CC.No.17728 of 2012
2. The date of : 13.01.2012
commission of
evidence
Name of the M/s Maba Corporate
3. :
Complainant Services Pvt.Ltd.,
at No.186/1,J.C.Complex,
Annexure,Sirur Park Road,
Sheshadripura,
Bengaluru560 020.
Regd.Office No.70,
Bamana, near Farm House,
Jalahalli East,
Vidyaranyapura Post,
Bengaluru97.
Reptd. By its Manager &
Power of Attorney Holder
Sri.K.Venkatesh Murthy.
(By Sri.B.H.Shamanna,
Advocate)
SCCH.13 2 CC.17728/2012
3. Name of the : 1. M/s ODM Media Services
Accused India Pvt.Ltd., No.1008,
10th Floor, Barton Centre,
Mahatma Gandhi Road,
Bengaluru560 001.
Reptd.by its Directors.
(By Sri.H.P.Madhu, Adv.)
2. Sri.Pavin Ponanna,
R/a No.91, 1st Main,
4th Cross,UAS Layout,
Krishi Layout,
R.M.V.2nd Stage,
Bengaluru560 094.
(By Sri.H.P.Madhu, Adv.)
3. Sri.Arun Kumar.B.
R/a No.36, Kushi Mansion
Apartment, 16th Main Road,
M.C.Layout, Vijayanagara,
Bengaluru560 040.
(By Sri.Y.N.Pavankumar,
Advocate)
5. The offence : U/S.138 of The
complained of Negotiable Instruments
or proved Act
6. Plea of the : Pleaded not guilty
Accused
7. Final order : Accused are Convicted
8. Date of such : 18.06.2021
order
JUDGMENT
This complaint under Section 200 of Cr.P.C. is filed alleging offence under SCCH.13 3 CC.17728/2012 Sec.138 and 141 of the Negotiable Instruments Act, 1881.
2. Complainant is a private limited company registered under the Indian Companies Act and is doing financial business. The first accused is the private limited company and the second and third accused are the directors of the first accused company. The second and third accused are the directors as well as authorized signatories of the first accused. Accused persons were known to the complainant company for the past several years and the accused persons used to borrow money from the complainant company for their business purposes. The accused company borrowed Rs.4,17,29,990/ on 31.03.2011 to execute some huge orders. In order to clear the liability the accused persons signed and issued cheques towards the part payment of the loan and had also executed some documents for borrowing loans from the complainant. The accused had issued cheques bearing number 967313 dated 25.10.2011 for a sum of Rs.9,36,435/ and a cheque bearing number 967314 dated 25.11.2011 for a sum of Rs.9,18,935/ and these cheques were drawn on the Karnataka bank Ltd,. Malleswaram branch Bengaluru. The accused company had promised and assured the SCCH.13 4 CC.17728/2012 complainant that they will make arrangement to all of these cheques that are signed by the second and third accused. The complainant presented these cheques for encashment through its banker the Karnataka bank Ltd., Malleswaram branch, Bengaluru on 25.11.2011. The bank has refused to honour the cheques and issued an endorsement dated 25.11.2011 as funds insufficient and the complainant received the intimation on the same day. The complainant issued the demand notice to the accused dated 29.11.2011 and 30.11.2011 informing the dishonour of cheques and demanding for payment of money borrowed from them. Even after service of notices the accused persons did not make any arrangement to repay the amount. Hence the present complaint is filed alleging offence punishable under Section 138 and NI Act and requested this court to secure the accused and deal with them according to the law and convict the accused persons under Section 138 of the Negotiable Instruments Act with imprisonment and also imposing fine double the amount of the Cheques.
3. On filing of this complaint cognizance was taken and the Sworn statement of the complainant was recorded. By considering the sworn statement and the documents produced by SCCH.13 5 CC.17728/2012 the complainant, cognizance of the offence punishable under Section 138 of negotiable instruments act was taken against the accused number 1 to 3 and the summons were issued to secure them.
4. After receiving the summons accused No.2 & 3 have appeared before this court and obtained bail. The substance of accusation were read over to the accused No.2 & 3 and the accused have pleaded not guilty of the offence punishable under Section 138 Negotiable Instruments Act and have submitted that they have defence to make.
5. After recording the plea of the accused, the trial commenced and the Manager of the complainant company is examined as PW1 in its evidence and produced 44 documents as per Ex. P.1 to P.44. PW1 is cross examined in length by the counsel for accused. During crossexamination Ex.D.1 to D.3 were marked. There are the same statements of ledger accounts of accused which are produced by the complainant in its evidence.
6. After closing the complainant evidence statement of accused under Section 313 of CRPC is recorded and the accused number two and SCCH.13 6 CC.17728/2012 three have denied all the incriminating evidence against the accused number 1 to 3.
7. Even though the accused No.2 & 3 have submitted that they want to lead evidence on their behalf, even after sufficient opportunity they did not lead any evidence hence, the defence evidence was taken as nil and the arguments of both the complainant and the accused were heard in length. After hearing the argument and on perusal of evidence and other materials on record the point that arises for my determination is:
1. Has the complainant proves that Ex.P.1 & P.2 cheques were issued by the accused towards discharge of legal liability and on their presentation were dishonoured for the reason 'insufficient funds' and the accused failed to pay the cheque amount within the stipulated period and thereby committed the offence punishable under Section 138 of Negotiable Instrument Act?
2. What order?
8. In order to prove the guilt of the accused, the complainant examined its Manager as PW1 and produced 44 documents. Accused did not lead any evidence. By considering all the materials documents and evidence on record I SCCH.13 7 CC.17728/2012 have answered the above point in the Affirmative for the following reasons.
REASONS
9. Point No.1: The complainant claims that Ex.P.1 & P.2 cheques were issued by the accused company in part payment of the loan advanced by them. Cheque No.967314 dated: 25.11.2011 was given for Rs.9,18,935/ and cheque No.967313 dated:
25.10.2011 was issued for Rs.9,36,435/.
The alleged transaction between the complainant and the accused stated to have occurred on 31.03.2011 totally for Rs.4,17,29,990/. In order to show that the loan has been advanced to the accused company, the complainant has produced its computerized ledger extract at Ex.P.16 to P.20. Complainant has also produced letters issued by the accused company to the complainant admitting the loan transaction at Ex.P.23 to P.28. Ex.P.23 is a letter dated: 01.14.2011 wherein the accused company confirmed that they are due to their corporation a sum of Rs.4,17,29,990/ as on 31.03.2011, it was requested to give some time to repay the said amount on installment basis and it has SCCH.13 8 CC.17728/2012 been written that they will issue cheques in favour of the complainant towards repayment of the said loan amount. Ex.P.24 & P.25 letters show that the accused No.2 Pavin Ponanna has written letters stating that they will settle the accounts by 28.08.2012 and it has been stated that they are extremely sorry for the inconvenience caused and stated that they will withdraw all the false cases filed against the complainant and in other letters Ex.P.26 to P.28 also, accused have admitted the due of Rs.4,37,29,990/.
10. Ex.P.29 is a copy of FIR which shows that the complainant company has registered a case against the accused for issuing cheques which came to be dishonoured for non tallying the signatures and offences of cheating and other offences were alleged against the accused company. This was registered in September 2011. Ex.P.30 is a copy of private complaint against the accused alleging offences under Sec.415, 418, 420, 422 and 425 IPC based on which FIR at Ex.P.29 has been registered. Ex.P.31 is chargesheet filed SCCH.13 9 CC.17728/2012 against the accused for the above mentioned offences. Ex.P.32 is FIR registered based on the private complaint filed against the accused company by the complainant and copy of which is produced at Ex.P.33. Ex.P.34 is another chargesheet alleging the same offences against the accused company. Ex.P.36 is a day book of the complainant corporation from 04.04.2008 and the entry on the date of 31.08.2011, 30.09.2011, 30.10.2011 and also many other dates show several transactions with the accused company. Ex.P.38 is the certified copy of the memo filed by the accused company in the Original Suit 2421/2013 pending on the file of City Civil Court. It is stated in the memo by the accused that the settlement talks are going on between the parties to settle the amount. Ex.P.39 and P.40 contains other letters by the accused from 24.04.2009 to 16.03.2011 stating repayment of amounts on several occasions in part. Ex.P.41, P.42, P.43 & P.44 are the ledger accounts of the complainant company which shows the credit and debit of amounts to the accused.
SCCH.13 10 CC.17728/201211. On perusal of entire cross examination of PW1 there is no specific denial of issuance of Ex. P1 and two cheques. In fact there is no specific defence that the cheques at Ex. P1 and two are not issued by the accused company. It is not at all suggested to the PW1 that the cheque at Ex. P.1 and two are not issued to pay any legally recoverable debt. It is contended by the accused that the Ex. P 17 to 20 are not genuine account statements. It is only in the crossexamination the accused has taken defence. No objection has been filed to the complaint and no defence evidence have been lead.
12. Only on behalf of the accused No.3 the crossexamination has been made. The accused No.2 did not crossexamine the PW.1. The accused has stated that the PW.1 does not have the authority to dispose on behalf of the complainant. It is suggested that no detailed resolution has been filed by PW.1. it is found from the evidence that initially one Puttaswamy Gowda had presented the complaint and the resolution was passed in his name to represent the complainant. Sworn statement of Puttaswamegowda was recorded. Later, on his resignation, present Manager is examined with Power of attorney and the resolution in his SCCH.13 11 CC.17728/2012 name. I found no irregularity in the evidence of complainant.
13. The accused have admitted the loan transactions between the complainant and the accused. But the accused have disputed the other documents produced by the complainant including ledger account statements and bank statements. It is admitted by the PW.1 that the certified copy of Complaints, FIR and chargesheet are not pertaining to the present cheques. Except denying the balance sheet and other documents produced by the complainant, accused did not deny the chequea and signatures on the cheques and dishonouring the cheques by the bank. It is contended that as on the date of cheques as per the balance sheet the accused were not due so much of amount. But it is impliedly admitted that as on the date of transaction the amount mentioned in the cheques were due to the complainant company by the accused.
14. On perusal of entire cross examination of PW1 it is clear that the borrowing of loan from the complainant, issuance of cheques at Ex. P1 & P2 and signatures found on those cheques, presentation of cheques, dishonour of cheques and the written demand made by the complainant through SCCH.13 12 CC.17728/2012 legal notice are not at all disputed. The accused did not say that the demand notice is not at all served on them. The letter issued by the accused company to the complainant and the memo dated 24.03.2017 filed in civil suit in O.S.No.2421/2013 are also not disputed by the accused. During the pendency of these proceedings the accused has admitted the liability and amount due to the complainant in a civil proceedings by filing a memo dated 24.03.2017 which is produced at Ex. P38. The letters produced at Ex. P23 to P28 show that the accused company has admitted the debt by them by way of the acknowledgement. The complainant has argued that as they have admitted the liability even in the civil suit by filing the doctrine of judicial is fully applicable in this case and it proves the loan transaction between the accused and the complainant. Though the accused have disputed the Ex. P16 to P20 & Ex. P37, Ex. P41 to P44 it shows that the amount has been paid to the accused No.1 and some amounts are paid to accused No.2 & 3 as per their instructions.
15. Moreover the accused did not enter the witness box and did not prove that the signatures found on the exhibits are not of them. However the Ex. P1 and two cheques are SCCH.13 13 CC.17728/2012 returned only for the reason of insufficient fund and the signatures are not denied. When the loan transaction, issuance of cheque admitted and when the letters issued by the accused or not disproved these all documents clearly indicates that the accused have obtained the loan and the Ex. P1 and 2 cheques are issued in order to repay the legally recoverable debt.
16. All these clearly indicates that the complainant has fulfilled the ingredients of Section 138 Negotiable Instruments Act. The complainant has proved the drawing of the cheques by the accused towards repayment of loan amount. The cheques issued were for repayment of the part of the debt and those cheques on presentation have returned by the banker for want of funds. Even after the written demand made by the complainant, accused have failed to make any repayment within 15 days. The accused not even replied to the demand notice issued by the complainant. And in the present proceedings accused have failed to rebut the presumption as contemplated under Section 139 of NI Act. On the contrary the accused have admitted the transactions issuance of cheque and signatures on those cheques.
SCCH.13 14 CC.17728/201217. Counsel for the complainant argued that the complainant has proved the ingredients under Section 138 NI Act and the accused has failed to report the presumptions under the law. The complainant's counsel relied on the various judgments of Hon'ble Supreme Court & Hon'ble High Court of Karnataka and other High Courts as under :
1. Laws (SC) 2021 2 32
2. Laws (SC) 2020 2
3. Criminal Appeal No.271/2020
4. Criminal Appeal No.132/2020
5. Laws (SC) 2020 9 40
6. Laws (SC) 2019 10 64
7. Laws (SC) 2016 8 182
8. AIR 2001 SC 3897
9. ILR 2004 KAR 4423
10. Laws (SC) 2001 11 71
11. AIR 2001 SC 2895
12. Laws (KAR) 2019 11 86
13. Laws (SC) 2020 1 125
14. 2014 Criminal Law Journal 2908
18. Relying on these judgments, counsel for complainant argued that the accused has not adduced any evidence to rebut the presumption raised under Section 138 NI Act and submitted that the accused did not even replied to the demand notice issued by the complainant. Relying on the judgment of other Magistrate SCCH.13 15 CC.17728/2012 Court in CC.943/2012 wherein the accused are convicted for the offence punishable under Sec.138 NI Act, it is requested to punish the accused as the complainant has successfully fulfilled all the requirements under this Section.
19. Counsel for the accused argued that the defence can disprove the case of complainant with reference to the evidence of prosecution as well as defence evidence. It is contended that standard of proof in discharge of the burden in terms of Section 138 of the act being of preponderance of probability. The inference can therefore be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relied upon. The accused has contended that there is no legally recoverable debt. They relied on the following judgments:
1. 2020(2) RCR (Criminal) 247
2. 2007 (2) Crimes 318
3. 2015(12) RCR (Criminal) 411
4. 2016 ACD 455
5. 2017 ACD 122
6. 2013(4) RCR (Criminal) 306
7. 2015 (ACD) (83) KAR
8. 2007 (4) RCR (Criminal) 588
9. 2015 (1) crimes 48 SCCH.13 16 CC.17728/2012
10. 1998 (3) SCC 410
11. 2017 AIR (SC) 450
12. 2006 AIR (SC) 3366
20. It is argued that the presumption mandatory by Section 138 NI act includes a presumption that there exists a legally recoverable debt or liability and that is rebuttable presumption and it is open to the accused to raise a defence wherein the existence of legally enforceable debt or liability can be contested.
21. Counsel for the accused has by relying on the above judgments, contended that there is a categorical admission by the complainant that according to the balance sheet produced by the complainant, the accused company was not due such amount as on the date of cheques. But the nondenial of the letters issued by the accused company clearly shows that they were due to the complainant company the amount stated by the complainant as on the date of issuance of cheque. And though the accused contended that the complainant has categorically admitted that there is no due, on perusal of evidence there is no such admission by the PW1 in his evidence. Accused relied on the judgment stating that the complainant failed to show that he had financial capacity SCCH.13 17 CC.17728/2012 to advance huge amount and the entries in the books have to be proved by independent evidence by the complainant. But in the present case the financial capacity of the complainant was not at all questioned by the accused in the cross examination of PW1. The accused spent much of the crossexamination in disproving the ledgers and statements of accounts produced by the complainant but failed to disprove the issuance of cheque signatures and the liability of the accused to pay the amount in the cheque. The accused has failed to rebut the presumption under Section 118 and Section 139 of NI act.
22. Unlike other criminal proceedings, proceedings under Sec.138 NI Act is an exception to the general principle that the accused is presumed to be innocent until the guilt is proved beyond all reasonable doubt. In the proceedings initiated under Sec.138 of NI Act, to prove beyond reasonable doubt is subject to presumption envisaged under Sec.138 NI Act. Once the requirement under Sec.138 NI Act is fulfilled, it has to be presumed that the cheque was issued for discharge of legally recoverable debt or liability. The presumption under Sec.139 NI Act is mandatory in nature and it has to be SCCH.13 18 CC.17728/2012 raised on all the cases of fulfillment of requirement of Sec.138 NI Act. In the ruling rendered by Hon'ble Apex Court, in the case of Rangappa Vs. Mohan reported in AIR 2010 (SC) 1898 by relying on several rulings rendered by the Hon'ble Apex Court including the case of Krishna Janardhan Bhat Vs. Dattathraya G. Hegde reported in AIR 2008 (SC) 1325, it was held that "Existence of legally recoverable debt or liability is a matter of presumption Under Section139 of N.I. Act". The Hon'ble Apex Court disapproved the principle laid down in Krishna Janardhan Bhat's case that "Initial burden of proving existence of the liability lies upon the complainant". In the case of Sri.B.H.Lakshminarayana Vs. Smt.Girijamma reported in 2010 (4) KCCR 2637, it is held that "the presumption that the cheque was issued for legally recoverable debt is to be presumed". Further as provided under Section.118 of N.I. Act, it is to be presumed that the cheques in question were issued for consideration on the date as found therein.
SCCH.13 19 CC.17728/201223. As already discussed above, the complainant has proved its case as to commission of offence punishable under Sec.138 and under Sec. 141 NI Act by the accused No.1 and being directors of the accused No.1 company accused No.2 & 3 have also committed the above offence. Hence, the accused 1 to 3 are found guilty of offence punishable under Sec.138 & Sec.141 of NI Act. With all these observations the Point No.1 is answered in the Affirmative.
24. Point No.2: for the reasons discussed on Point No.1, I proceed to pass the following :
ORDER Exercising power under Sec.255 (2) of Cr.P.C., the accused No.1 M/s ODM Media Services India Pvt.Ltd., is held guilty and convicted for the offence punishable under Section 138 & Sec.141 of Negotiable Instrument Act.
The accused No.2 Sri.Pavin Ponanna & Accused No.3 Sri.Arun Kumar B. being Directors of accused No.1 and authorized signatories of accused No.1 are also held guilty and convicted for the offence punishable under Sec.138 & Sec.141 NI Act.
SCCH.13 20 CC.17728/2012Accused No.1 to 3 are sentenced to pay fine of Rs.18,65,000/ for the offence punishable under Sec.138 & Sec.141 NI Act. In default of payment of fine, accused No.2 & 3 shall undergo simple imprisonment for a period of six months.
By exercising power under Sec.357(1) Cr.P.C. out of total fine amount of Rs.18,65,000/, a sum of Rs.18,55,000/ 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 No.2 & 3 stands cancelled.
Supply free copy of this judgment to the accused.
(Dictated to the stenographer, transcript thereof corrected, signed and then pronounced by me in the Open Court on this the 18th day of June 2021.) (DIVYASHREE.C.M.) II Addl. Judge & ACMM Court of Small Causes, Bengaluru A N N E X U R E WITNESSES EXAMINED ON BEHALF OF COMPLAINANT:
PW1: K. Venkateshmurthy DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P.1 & 2 Original cheques
Ex.P.3 &4 Bank Endorsements
SCCH.13 21 CC.17728/2012
Ex.P.5 Office copy of legal notice
Ex.P.6 & 7 Postal acknowledgment Ex.P.8 & 9 Unserved postal covers Ex.P.10 Power of attorney Ex.P.11 Board resolution dt:27.10.2014 Ex.P.12 Authorization letter Ex.P.13 Certificate of registration Ex.P.14 Certificate of incorporation Ex.P.15 Non banking Financial Companies Directions (RBI) Ex.P.16 Ledger Account of ODM Media for the year 01.04.2008 Ex.P.17 Ledger Account of ODM Media out door for the year 01.04.2008 to 31.03.2009 Ex.P.18 Ledger Account of ODM Media out door for the year 01.04.2009 to 31.3.2010 Ex.P.19 Ledger Account of ODM Media out door for the year 01.04.2010 to 31.3.2011 Ex.P.20 Ledger Account of ODM Media out door for the year 01.04.2011 to 11.04.2011 Ex.P.21 Certificate in compliance of Sec.65(b) of Evidence Act Ex.P.22 Order of BBMP dated:
16,01,2013 black listing the accused company Ex.P.23 Letter of the accused dated:
01.04.2011 Ex.P.24 Letter of the accused dated:12.08.2012 Ex.P.25 Letter of the accused dated:12.09.2012 SCCH.13 22 CC.17728/2012 Ex.P.26 Letter of the accused dated:08.11.2012 Ex.P.27 Letter of the accused dated:14.02.2013 Ex.P.28 Letter of the accused dated:12.12.2013 Ex.P.29 Certified copy of the FIR filed in Crime No.136/2011 against 2nd accused Ex.P.30 Certified copy of PCR No.13050/2011 against 2nd accused Ex.P.31 Certified copy of chargesheet against 2nd accused Ex.P.32 Certified copy of filed in Crime No.137/2011 against 3rd accused Ex.P.33 Certified copy of PCR No.13049/2011 against 3rd accused Ex.P.34 Certified copy of chargesheet against 3rd accused Ex.P.35 Memorandum & Articles of Association of complainant's company Ex.P.36 Day book for the period 01.04.2008 to 31.03.2012 Ex.P.37 Ledger Account of accused persons from 01.04.2008 to 31.03.2012 Ex.P.38 Certified copy of Memo filed in ordersheet in 2421/2013 dated: 24.03.2017 by the 2nd accused Ex.P.39 Letter given by the accused persons for receipts SCCH.13 23 CC.17728/2012 dated:03.03.2009 Ex.P.40 Letter given by the accused dated: 24.04.2009 to 16.03.2011 Ex.P.40(a) to Letter issued by ODM against P.40(l) payment made to the account of Prathik Ex.P.41 Ledger accounts of Prateek from 01.04.2008 to 31.3.2012 Ex.P.42 Ledger accounts of Kemparaju from 01.04.2008 to 31.3.2012 Ex.P.43 Ledger accounts of Srinivas from 01.04.2008 to 31.3.2012 Ex.P.44 Ledger accounts of Sandhya Kumari from 01.04.2008 to 31.3.2012 WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
None DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
Ex.D.1 Outstanding balance as on 31.3.2011 in account statement of ODM Media Services Pvt.Ltd.
Ex.D.2 Statement of account of complainant in Karnataka Bank, Malleshwaram Branch.
Ex.D.3 Certified copy of accused statement of Arun Kumar B. (DIVYASHREE.C.M.) II Addl. Judge & ACMM Court of Small Causes, Bengaluru.
SCCH.13 24 CC.17728/2012(Judgment pronounced in the Open Court vide separate order) ORDER Exercising power under Sec.255 (2) of Cr.P.C., the accused No.1 M/s ODM Media Services India Pvt.Ltd., is held guilty and convicted for the offence punishable under Section 138 & Sec.141 of Negotiable Instrument Act.
The accused No.2 Sri.Pavin Ponanna & Accused No.3 Sri.Arun Kumar B. being Directors of accused No.1 and authorized signatories of accused No.1 are also held guilty and convicted for the offence punishable under Sec.138 & Sec.141 NI Act.
Accused No.1 to 3 are sentenced to pay fine of Rs.18,65,000/ for the offence punishable under Sec.138 & Sec.141 NI Act. In default of payment of fine, accused No.2 & 3 shall undergo simple imprisonment for a period of six months.
By exercising power under Sec.357(1) Cr.P.C. out of total fine amount of Rs.18,65,000/, a sum of Rs.18,55,000/ is ordered to be paid to the complainant as compensation and Rs.10,000/ is ordered to be remitted to the State.
SCCH.13 25 CC.17728/2012 The bail bond of the accused
No.2 & 3 stands cancelled.
Supply free copy of this
judgment to the accused.
(DIVYASHREE.C.M.)
II Addl. Judge & ACMM
Court of Small Causes,
Bengaluru