Bangalore District Court
Standard Chartered Bank vs M/S Buzzworks Loyalty Solutions on 14 September, 2016
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 14th day of September 2016
:PRESENT:
SMT.SHEILA B.M. M.Com. LL.M.
XXVI Addl.C.M.M., Bangalore City.
JUDGMENT U/S 355 OF Cr.P.C
Case No. : C.C No.6573/2015
Complainant : Standard Chartered Bank
No.26, Raheja Towers, III Floor,
Mahathma Gandhi Road,
Bangalore - 560 001
Represented by its Attorney holder
Sri. Awdesh Rathi
(By Smt.LMN - Adv.)
Accused : M/s Buzzworks Loyalty Solutions
Pvt. Ltd.
Having its office at No.348,
1st 'A' Main Road,
8th Block, Koramangala,
Bangalore - 560 095
Represented by its Director
Mr.Leonard Anthony Kulangara
(By Sri. CGB - Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Final Order : Accused is acquitted
Date of Order : 14.09.2016.
2 CC No. 6573 of 2015
The complainant has filed this complaint against the
Accused for the offence punishable u/s 138 of Negotiable
Instruments Act.
2. The Complainant has stated that it is bank incorporated
in England. Mr. Senthil Kumar Murugeshan is the authorized
representative to prosecute the complaint on behalf of the
Complainant. One of the Complainant's employee Ms. Kanika
Iyer contacted the accused for arrangement prepaid movie
vouchers and accordingly accused agreed to provide prepaid
movie vouchers and in this regard gave quotation of
Rs.19,66,428/- on 15.11.2014. In terms of the quotation the
movie voucher shall be delivered within 6 working days from the
receipt of the pay order. At the instance of the accused the
Complainant made payment of the entire amount of
Rs.19,66,248/- through pay order dated 20.11.2014.
3. It is stated that the accused was only able to procure
and furnish 866 prepaid voucher of Rs.1200/- denomination
each within 6 working days which amounted to Rs.10,63,200/-
and further failed to furnish balance 788 prepaid movie vouchers
of the same denomination which amounts to Rs.9,03,068/- and
3 CC No. 6573 of 2015
also failed to refund the said amount to the Complainant. When
the Complainant insisted for the balance amount the accused
had issued account payee cheque dated 22.12.2014 for
Rs.9,03,068/-. When the said cheque was presented it is
returned dishonoured with shara "Insufficient Funds" as per
memo of the bank. Legal notice was issued on 09.01.2015 to the
accused. In spite of the receipt of the notice accused has not
paid amount. Hence the complaint.
4. On presentation of the complaint, cognizance and
statement of the Complainant was recorded and case was
ordered to register against the accused for the offence
punishable u/s 138 of Negotiable Instruments Act. Notice was
sent to the accused.
5. The accused appeared before the court through his
counsel and was enlarged on bail. Copies of the papers were
furnished to them as required u/s 207 of Cr.P.C. The summons
and the substance of the accusation for the offence punishable
u/s 138 of Negotiable Instruments Act was read over and
explained to the accused. The accused pleaded not guilty and
claimed trial.
4 CC No. 6573 of 2015
6. The Complainant has examined its POA holder as PW1
and got marked Ex-P1 to P14. After closing the Complainant
side, the statement of the accused u/s 313 of Cr.P.C. was
recorded and the accused has denied the incriminating evidence
against him. The accused examined himself as DW1 and got
marked Ex-D1 to D10.
7. Heard arguments.
8. The points that arise for consideration are as under:
1) Whether the complainant proves that the
cheque bearing No. 320601 dated : 20.12.2014
for a sum of Rs.9,03,048/- drawn on Union
Bank of India, Bangalore returned unpaid for
the reason that the funds insufficient in the
account of the Accused? If so whether the
Complainant proves that the legal notice has
been served on the accused ?
2) Whether the accused proves that, cheque
bearing No. 320601 dated : 20.12.2014 was not
issued in discharge of any legally recoverable
debt in favour of the Complainant
3) Whether complaint is maintainable ?
4) What order ?
9. My findings on the above points are as under:
Point No.1: In the affirmative,
Point No.2: In the affirmative,
5 CC No. 6573 of 2015
Point No.3: In the affirmative,
Point No.4: As per the final order for the following:
REASONS
POINT NO.1:
10. The Complainant has stated that the accused agreed to
provide prepaid movie vouchers and in this regard gave
quotation for Rs.19,66,248/- as per the quotation the
Complainant had paid the said amount by pay order on
20.11.2014. The accused procured and furnished 866 prepaid
vouchers of Rs.1200/-denomination amounting to
Rs.10,63,200/- and failed to furnish balance 788 prepaid movie
vouchers amounting Rs.9,03,068/-. On persistent demand
accused had issued dated 20.12.2014 for Rs.9,03,048/- as per
Ex-P1. When the said cheque was presented it was returned
unpaid for "Insufficient Funds" as per memo dated 23.12.2014
as per Ex-P2. It is stated that due to typographical error in the
endorsement it is mentioned as "amount in words and figures
are differ". Subsequently upon mail sent for issuance of correct
reason the Union Bank of India has sent mail on 23.12.2014
6 CC No. 6573 of 2015
confirming the reason for dishonour is due to "Insufficient
Funds" Ex-P3 is letter sent through email.
11. The accused in his evidence has stated that in year
2010 there was re empanelment of Complainant Bank he had
issued two cheques of Standard Chartered Bank. In the year
2013 he had changed his bank so he took return of few cheques
of Standard Chartered and issued two fresh cheques of Union
Bank of India. These cheques were issued as part of
empanelment. During cross-examination he admit to have
been signed Ex-P2 cheque and that it pertain to his company
account. From the above admission it can be held that Ex-P1
cheque pertain to the account of the accused and when the said
cheque was presented it has been dishonoured for "Insufficient
Funds" in the account of the accused.
12. PW1 has stated that subsequent to the dishonour of
the cheque Legal notice was issued on 09.01.2015 which was
sent through registered post and ordinary post. The notice has
been duly served on the accused. Ex-P4 is the notice and Ex-P5
7 CC No. 6573 of 2015
is the RPAD receipt. Ex-P6 is the RPAD acknowledgement. PW1
during cross-examination has denied the suggestion that notice
has not been served on the accused. He has stated that
authorized person has received the notice as per Ex-P6. He
admits that the accused has not signed the acknowledgement.
Ex-P6 acknowledgement bears the seal of the company. The
accused has not denied that the seal is not pertaining to the
company hence it could be held that notice has been received by
authorized person. It is contended that in Ex-P6 RAPD
acknowledgement the full address has not been mentioned. Ex-
P4 notice discloses the full address of the accused. If the notice
was not served it would have been returned as insufficient
address. Hence contention of the accused that there has been
no proper notice holds no water.
13. The Hon'ble SC in Appeal Crl. 767 / 2007,
indiankanoon.org/doc/272690 at para 17 has held
It is also to be borne in mind that the
requirement of giving of notice is clear
departure from the rule of Criminal Law, where
there is no stipulation of giving of a notice before
filling a complaint. Any drawer who claims that
he did not receive the notice sent by post, can,
8 CC No. 6573 of 2015
within 15 days of receipt of summons from the
court in respect of the complaint under section
138 of the Act, make payment of the cheque
amount and submit to the court that he had
made payment within 15 days of receipt of
summons (by receiving a copy of complaint with
the summons) and therefore, the complaint is
liable to be rejected. A person who does not
pay within 15 days of receipt of the summons
from the court along with the copy of the
complaint under section 138 of the act, cannot
obviously contend that there was no proper
service of notice as required under section 138,
by ignoring statutory presumption to the
contrary under section 27 of the GC Act and
section 114 of the evidence act. In our view, any
other interpretation of the proviso would defeat
the very object of the legislature. As observed in
Bhaskarana case (supra), if the giving of notice
in the context of Clause (b) of the proviso was
the same as the receipt of notice a trickster
cheque drawer would get the premium to avoid
receiving the notice by adopting different
strategies and escape form legal consequences
of section 138 of the act.
14. The said decision applies to the case on hand. The
accused after receiving summons from the court has not paid the
cheque amount within 15 days and therefore in view of the above
decision he cannot contend that there has been no proper
service of notice. In view of the above discussion point no. 1 is
answered in affirmative.
9 CC No. 6573 of 2015
POINT NO.2
15. Once the cheque relates to the accused and his
signature on the said cheque is proved an initial presumption as
contemplated u/s. 138 of Negotiable Instruments Act has to be
raised by the court in favour of the Complainant. Sec. 139 of the
Negotiable Instrument Act contemplates that it shall be
presumed unless contrary is proved that the holder of the
cheque received the cheque of the nature referred to in the
Sec.138 for the discharge of the whole or in part any debt or
liability. The presumption referred to u/s 138 of Negotiable
Instruments Act is mandatory presumption and in general
presumption. But the accused is entitled to rebut the said
presumption. What is required to be established by the accused
in order to rebut the presumption is different from each case
under given circumstances. But the fact remains that mere
plausible explanation is not expected from the accused and it
must be more than plausible explanation by way of rebuttal
evidence. In other words the defence raised by way of rebuttal
evidence must be probable and capable of being accepted by the
court.
10 CC No. 6573 of 2015
16. The accused in his evidence has stated that he has not
given the cheque in question to the Complainant with regard to
movie vouchers; that in year 2010 there was re empanelment of
the Complainant Bank and he had given two cheques of
Standard Chartered bank ; in the year 2013 he had changed his
bank so he had taken return of the two cheque of Standard
Chartered bank and issued two fresh cheques of Union Bank of
India and these cheques were issued as part of empanelment.
During cross-examination DW1 has stated that Complainant
Bank has not give letter in writing to give security cheque in
view of change in policy ; that he has not issued any notice even
subsequent to the filing the case that the security cheque has
been misused. The Complainant has not produced any
documents to show that Ex-P1 cheque is given in the year 2013.
In the absence of documentary evidence it become difficult to
believe that Ex-P1 cheque was given in the year 2013 with regard
to empanelment.
17. The counsel for the accused submitted that the
vakalath given by the Complainant to his advocate has not been
accepted by his advocate. That is the matter between the
11 CC No. 6573 of 2015
Complainant and his advocate and the accused has no voice in
this regard.
18. The accused has contended that he is regular customer
of Complainant bank and has conducted annual sport meet an
the Complainant bank has to pay a sum of Rs.75,000/- in this
regard; that he has conducted ATM inauguration at Jindal City
and for this inauguration of ATM the accused has charged a sum
of Rs.20,000/- for his loyalty service. It is thus contended that
the Complainant bank is due to him in all Rs.95,000/-. This
case is a criminal case for not honouring the cheque issued and
not a case for recovery of money. Hence the above claim of the
accused is not sustainable in these proceedings.
19. The counsel for the accused contended that the reason
for return of the cheque as per Ex-P2 is "Amount in words and
figures differs". The reason for return as per e-mail Ex-P3
"Insufficient Funds". It is contended that both shara the reason
for return of the cheque is different and thereafter notice has not
been sent to the accused person. Legal notice has been sent
only after receipt of Ex-P2 and P3 endorsement from bank. In
the Legal notice Ex-P4 the reason for dishonour is mentioned as
12 CC No. 6573 of 2015
funds insufficient. The accused has not placed any material to
show that as on the date of dishonour he had sufficient funds in
his account.
20. It is elicited from PW1 that his nature of work is home
loan business loan and loan against properties..... with regard to
aspect other than retail there are other officers and managers to
look after. It is true that I have no experience in respect of the
matter other than retail collections in our bank......Witness
voluntarily says that his subordinate has done the transaction. I
have not received personally Ex-P1 cheque from the accused.
Kanika of our team has received the cheque from the accused. I
have not seen accused handing over the cheque to Kanika.
......... In our bank there is separate committee which takes care
of entrainments. I am not a member of the said committee. ......
Anant Krishnan takes care of the committee....... I do not know
whether the committee will have to take approval from the head
office for taking service........ I cannot say number of movie
vouchers provided by the accused as I have got only the value of
it. ....... I am not aware as to whether accused is a regular event
management company for our bank in South India...... I am no
13 CC No. 6573 of 2015
aware who filled the cheque in question.... I am not aware as to
whether the amount and name has been filled by our bank
officials.
21. The Hon'ble SC in A.C.Narayana vs. State of
Maharashtra and others reported in 2013 (11) SCALE 360
relied upon the decision by the SC in A.C.Narayana vs. State of
Maharashtra Crl. Appeal No. 73/2007 decided on 28.01.2015
has held,
At para 23 In the light of discussion we are of the
view that the power of attorney holder may be
allowed to filed, appear and depose for the purpose of
issue of process for the offence punishable u/s 138 of
NI Act. An exception to the above is when the
power of the attorney holder of the Complainant
who does not have personal knowledge cannot
be examined. However where the attorney holder of
the Complainant is in charge of business of payee
Complainant and the attorney holder alone is
personally aware of transactions and the complaint
signed by the attorney holder on behalf of the payee
Complainant, there is no reason why the attorney
holder cannot be examined as the Complainant.
Nevertheless an explicit assertion as to the knowledge
14 CC No. 6573 of 2015
the power of attorney holder about the transaction in
question must be specified in the complaint".
The above decision applies to the case on hand. From the
evidence of PW1 it is clear that PW1 is not personally aware of
the transaction. He is thus not a competent witness.
22. The Complainant in the complaint Ex-P7, Legal notice
Ex-P4, and in the affidavit has stated as per quotation the
Complainant had paid entire amount of 19,66,248/- by pay
order, The accused was able procure and furnish 866 prepaid
vouchers of Rs.1200 denomination each within 6 working days
which amounted to 10,63,200/- and further failed to furnish
balance 788 prepaid movie vouchers of the same denomination
which amounts to Rs.9,03,068/-. Ex-P12 is the proforma
invoice and Ex-D1 is the Invoice. In both these documents the
quantity and the amount is same. The details with regard to the
location and quantity as per documents are as follows.
SL.NO. LOCATION QUANTITY
1 Bangalore (Cinema gift card) 555
2 Chennai (Cinema fuel gift card) 855
3 Coimabatore(Cinema fuel gift card) 31
15 CC No. 6573 of 2015
4. Cochin (Cinema gift card) 48
5. Hydrabad (Cinema gift card) 185
23. The documents Ex-D2 to 6 produced by the accused
show that accused has delivered prepaid movie vouchers of 1584
to the Complainant in all the locations as per invoice.
24. The accused has stated that with regard to the movie
vouchers 90 vouchers which ought to have been supplied to the
Complainant was pending. In support of his contention he has
produced deliver notes 5 in numbers as per Ex-D2 to D6. These
delivery notes support his contention. During cross-examination
the accused admits that as per delivery challan it is mentioned
as seal and signature. He however denies that any transaction
without seal is not valid. He admits that Ex-D2 to D6 do not
bear the seal (wrongly typed as signature ) of the Complainant
Bank. It is elicited that Ex-D2 and D3 have been delivered to
Dhanshekar Palani and without verifying he cannot say to whom
Ex-D4 to D6 have been delivered. He had denied the suggestion
that Ex-D2 to D6 are created documents for the purpose of the
case. He admits that Ex-D2, D4 and D6 do not bear the
16 CC No. 6573 of 2015
signature of the authorized officer of the accused company.
Witness voluntary stated that the original delivery note is sent to
the Complainant and copy is produced before the court and that
the copy does not bear the signature. The Ex-D2 to D6 delivery
notes have not been confronted to the Complainant. The
accused has failed to prove that there is balance to deliver only
90 movie vouchers.
25. As already stated the Complainant has stated that the
accused has delivered 866 prepaid voucher of 1200
denominations amounting to Rs.10,63,200/-. On calculation it
is seen that 866 voucher of Rs.1200 would amount to
Rs.10,39,200/-. It is clear that more than 866 prepaid
vouchers has been delivered. From Ex-P12 it is seen that
Cinema Gift Card with regard to Bangalore, Cochin, Hyderabad
per unit of INR 300 value X 4 units each is 1200. At discount of
4.50% is given on the said amount so the rate would be
Rs.1146/- per unit. The Complainant has not stated in respect
of which location movie vouchers have been delivered. The
movie vouchers in respect of Chennai Coimabatore location 1200
per unit whereas in respect of Bangalore, Cochin, Hyderabad it is
17 CC No. 6573 of 2015
1164 per unit. The complaint, Legal notice and affidavit
discloses that accused has failed to furnish 788 prepaid movie
voucher of the same denomination to the Complainant which
amounts to Rs.9,03,068/-. The amount for 788 prepaid movie
voucher of 1200 denomination would be Rs.9,45,600/-. The
Complainant has not given the details with regard to the location
to which movie vouchers have been supplied and the locations to
which location movie vouchers have not been supplied. In the
absence of the details of supply of movie vouchers it is not
possible to calculate the amount due by the accused. Hence
the contention of the accused that he is not liable for the
amount mentioned in the cheque appears to be believable.
26. The case put forth by the accused that the cheque was
not given for the discharge of the debt appears to be probable
and convincing in view of discussion in para 20 to 25. The
presumption u/s 118 and 139 of act would stand rebutted. The
Complainant has not placed any other acceptable evidence. In
view of the above discussion point no.2 is answered in the
affirmative.
18 CC No. 6573 of 2015
POINT No.3
27. Initially the complaint was filed by one Mr. Senthil
Kumar Murugesan. Subsequently Mr. Awadesh Rathi has been
substituted. Mr. Awdesh Rathi working as Manager of
M/s.Standard Chartered Bank has been examined as PW1 and
he has stated that he is power of attorney holder of Complainant
Bank. He has produced power of attorney as per Ex-P14. From
the documents it is seen that Mr.Iyan Bryden, Chief Risk Officer,
South Asia and India has executed the power of attorney for and
behalf of Standard Chartered Bank under power of attorney
dated 31st Jul.y 2014. It appears Mr.Iyan Bryden has delegated
his power to Mr. Awadesh Rathi. The counsel for the accused
has contended that attorney holder cannot delegate his power or
no delegated power can be further delegated. Delegated powers
can further be delegated only if the documents authorizes the
power of attorney to further delegate.
28. In this case the Complainant has not marked the power
of attorney of Mr. Iyan Bryden. The said documents is vital
documents as it throws light as to whether Mr.Iyan Bryden had
19 CC No. 6573 of 2015
authority to further delegate his power by executing power of
attorney. Initially the power of attorney of Mr. Bryden was not
produced. Serious objection were raised by defense and as the
Complainant did not produce the documents application u/s 91
of Cr.P.C. was filed by the accused. In pursuance to the order
passed by the court the Complainant produced the power of
attorney executed in favour of Mr.Iyan Bryden but did not choose
it get the documents marked. Application was filed by the
accused to further cross-examination of PW1 with regard to
validity and admissibility in India of GPA dated 31.07.2014
executed in favor of Mr.Iyan Bryden.
29. The GPA in favour of Mr.Iyan Bryden has been executed
in England. In spite of the application filed by the accused the
Complainant did not choose to get the GPA dated 31.07.2014
executed in favor of Mr.Iyan Bryden exhibited. As the GPA dated
31.07.2014 has not been marked this court has dismissed the
application to cross examine PW1 on admissibility, as the
question of admissibility of the documents does not arise.
20 CC No. 6573 of 2015
30. The counsel for the accused has submitted that any
documents / instrument executed outside India then, the said
documents has to be stamped within 3 months from the date
first receiving the said documents in that state as per sec.18 of
Karnataka Stamp Act. Further u/s 10 A of Karnataka Stamp
Act the documents has to be stamped by paying the cash before
the Deputy Commissioner or District Commissioner of Stamps of
that concerned district. Sec. 41 of the Karnataka Stamp Act
1957 mandates that the said documents has to be endorsed and
also authentication has to be given by the District Commissioner
or Deputy Commissioner by issuing authentication endorsement
certificate. It is argued that original GPA dated 31.07.2014 has
been executed in England and that the Complainant does not
produced any documents to show that it has been duly
endorsed. As already stated GPA dated 31.07.2014 executed in
favour of Mr.Iyan Bryden has not been marked. This court
cannot look into unexihibited documents and given findings as
to its validity. It can only be said that Mr.Awadesh Rathi power
of attorney holder of the Complainant Bank failed to prove that
the Mr.Iyan Bryden executant of his power had authority to sub
21 CC No. 6573 of 2015
delegate his power under valid documents. As the power of
attorney holder has f ailed to prove his authority to prosecute the
Complainant the complaint is not maintainable. Accordingly
point No.3 is answered in affirmative.
POINT No.4
31. In view of the affirmative findings on point 2 and 3 the
Complainant is not entitled for the relief sought for. In the result
I proceed to pass the following:
ORDER
Acting u/s 255(1) of Cr.P.C., the accused is acquitted for the offence u/s 138 of NI Act.
Bail bond shall be in force for the period of 6 months as provided u/s 437A Cr.P.C. (Dictated to the Stenographer, transcribed and computerized by her, corrected and then pronounced by me in the open court on this the 14th day September of 2016) (SHEILA B.M.) XXVI ACMM, Bangalore City.
22 CC No. 6573 of 2015ANNEXURE Witnesses examined for the Complainant:
PW.1 Awadesh Rathi Witness examined for the accused:
DW1 Leonard Anthony Kulangara List of Documents marked for the Complainant:
Ex. P1 Cheque.
Ex. P1(a) Signature of the accused on the cheque.
Ex. P2 Endorsement. Ex. P3 Letter sent through E-mail. Ex. P4 Notice. Ex. P5 RPAD receipt. Ex. P6 RPAD acknowledgement. Ex. P7 Complaint. Ex. P8 Proforma invoice (3 pages) Ex. P9 E-mails (2 pages) Ex. P10 E-mails Ex. P11 Carbon copy of DD challan Ex. P12 Original invoice. Ex. P13 Complaint. Ex. P14 Power of attorney.
List of Documents marked for the accused:
Ex.D1 Original invoice 23 CC No. 6573 of 2015 Ex.D2 to D6 Delivery notes 5 in no.
Ex.D7 E-mail (4 sheets)
Ex.D8 E-mail along with 2 attachments
Ex.D9 E-mail along with 3 attachments
Ex.D10 CD pertaining to photos of two launch events
XXVI ACMM, Bangalore
24 CC No. 6573 of 2015
(Judgment pronounced in the open court vide separate order) ORDER Acting u/s 255(1) of Cr.P.C., the accused is acquitted for the offence u/s 138 of NI Act.
Bail bond shall be in force for the period of 6 months as provided u/s 437A Cr.P.C.
(SHEILA B.M.) XXVI ACMM, Bangalore City.