Bangalore District Court
M/S Delton Control And Switch Gears Llp vs Devi Enterprises And Billamangala ... on 25 January, 2024
C.C.NO.4701/2020
0
KABC030177502020
Presented on : 07-03-2020
Registered on : 07-03-2020
Decided on : 25-01-2024
Duration : 3 years, 10 months, 18 days
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LL.B.,LL.M
XXVIII A.C.M.M, Bengaluru City.
DATED: THIS THE 25 th DAY OF JANUARY-2024
C.C.NO.4701/2020
Complainant: M/s.DeltonControl & SwitchGears LLP,
A Partnership Concern, Having its
registered O/at No. 43-43A, 1st Main Road,
New Timber Yard Layout, Off Mysore Road,
Bengaluru-560026,
R/by its Authorized representative,
Mr.Nagaraj.G S/o Late.D.Gangaiah, Age: 45
years, Ph.No.918026763597,
E-mail Id [email protected]
(By Agraa Legal, Advocates.,)
V/s
Accused: 1. Devi Enterprises,
No.20/B, Sy.No.17/12, Ground Floor,
"Shree Nilaya, 2nd Cross, Naidu Layout,
Jaganahalli, J.P.Nagar Post,
Bangalore-560078. R/by its Proprietor,
Mr.Billamangala Shivanna Girish.
2. Mr.Billamangala Shivanna Girish,
C.C.NO.4701/2020
1
Proprietor, M/s. Devi Enterprises,
No.28, R.C.Layout, Near BWSSB
Pump House, Thathagudi,
Bangalore-560062.
(By Sri.Hariprasad & Associates.,)
:JUDGMENT:
This case arises out of the private complaint filed by the complainant against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is submitted by the complainant is that the complainant is a limited liability partnership managed and administered by its Managing Partner, Mr.Mahesh Kantilal. The complainant interalia engaged in the business of distribution of electrical products and is an authorized dealer of leading and reputed brands in the field. The complainant is registered under the GST. The accused No.1 is a proprietorship concern, which is managed and administered by the accused No.2. The accused No.1, through its proprietor, the accused No.2, approached the complainant and sought enter into business transactions with the complainant. After mutual discussions and negotiations between the accused No.2 and the complainant, the accused No.1 has placed certain purchase orders on the complainant for purchase of certain switchgear items and electrical C.C.NO.4701/2020 2 parts. Accordingly, the complainant has supplied goods to the accused No.1 and the same was accepted without any complaints or demur. After delivery of goods, the complainant has raised invoices as per the terms of agreement between the complainant and the accused No.1. Further stated that due to continuous transaction between the complainant and the accused, the complainant had maintained a running account in respect of transactions of the accused No.1. As per the ledger account maintained by the complainant, invoices for a total sum of Rs.2,24,18,954/- were raised. The accused No.1 has made a total payment of Rs.2,01,01,820/- to the complainant towards partial discharge of due and therefore, is due for a sum of Rs.23,17,134/-.
3. It is the further stated that after repeated follows ups, the accused No.1 issued the cheque bearing No.000201 on 27.08.2019 for a sum of Rs.23,17,134/-, drawn on Andhra Bank, JP Nagar Branch, Bangalore in favour of the complainant towards discharge of its liability. The said cheque was signed by the accused No.2 in the capacity of a proprietor of the accused No.1. On the oral representations made by the accused No.2, the complainant presented the said cheque for encashment through its banker viz., Kotak Mahindra Bank Ltd, Netkallappa Circle Branch, Bangalore. But the said cheque was dishonored on 21.10.2019 with an endorsement "Funds Insufficient" in C.C.NO.4701/2020 3 account of the accused. Thereafter, on 08.11.2019 the complainant got issued a statutory notice to the accused calling upon him to pay the cheque amount within fifteen days from the date of receipt of the said legal notice. The said notice was served to the accused on 11.11.2019 and 14.11.2019 respectively. After service of the legal notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused has committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 11.12.2019.
4. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R.No.1921/2020. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 07.03.2020 to register the case in Register No.III.
5. Thereafter, summons was issued to the accused and he appeared before the court through advocate and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
6. The complainant in support of its case, have examined its Accounts Manager as PW.1 and got C.C.NO.4701/2020 4 marked 15 documents at Ex.P.1 to 15 and closed its side. PW.1 was fully cross examined by the counsel for the accused.
7. After closer of the evidence of the complainant, the statement of the accused under section 313 of Cr.P.C, was recorded. He has denied the incriminating evidence appeared against him. In his defence, the accused examined himself as DW.1 and 04 documents were marked at Ex.D.1 to 4. During the cross examination of PW.1 Ex.D.1 to 3 got marked by way of confrontation.
8. I have heard the arguments on both the sides and perused the written arguments submitted by the learned counsels for the complainant and accused and also perused the material placed on record.
9. The learned counsel for the complainant has relied upon the Crl.A.No.2104/2018.
10. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt or liability.?
2. Whether the complainant further proves that the accused had issued the cheque-Ex.P.6, towards the discharge of the legally enforceable debt or liability.?
3.Whether the complainant further proves that the cheque-Ex.P.6 was dishonored for the reasons "Funds Insufficient" in the account of the C.C.NO.4701/2020 5 accused and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
11. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following;
:REASONS:
12. POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts, I have taken these two points together for common discussion. The case of the complainant is that he was acquainted with the accused. Further the complainant is a limited liability partnership. The complainant interalia engaged in the business of distribution of electrical products and is an authorized dealer of leading and reputed brands in the field. The complainant is registered under the GST. The accused No.1 is a proprietorship concern, which is managed and administered by the accused No.2. The accused No.1, through its proprietor, the accused No.2, approached the complainant and sought enter into C.C.NO.4701/2020 6 business transactions with the complainant. After mutual discussions and negotiations between the accused and the complainant, the accused No.1 has placed certain purchase orders on the complainant for purchase of certain switchgear items and electrical parts. Accordingly, the complainant has supplied goods to the accused No.1 and the same was accepted without any complaints or demur by the accused or his employees. After delivery of goods, the complainant has raised invoices as per the terms of agreement. Further due to continuous transaction between the complainant and the accused No.1, the complainant had maintained a running account in respect of transactions. As per the ledger account maintained by the complainant, invoices for a total sum of Rs.2,24,18,954/- were raised. The accused No.1 has made a payment of Rs.2,01,01,820/- to the complainant towards partial discharge of due and therefore, is due and liable to pay the complainant a sum of Rs.23,17,134/-.
13. Further after repeated follows ups, the accused No.2 on behalf of the accused No.1 issued the cheque in question in favour of the complainant towards discharge of its liability. Further on the oral representations made by the accused No.2, the complainant presented the said cheque for encashment through its banker. But the said cheque was dishonored with an endorsement "Funds Insufficient" in account of C.C.NO.4701/2020 7 the accused. Thereafter, the complainant got issued a statutory notice to the accused calling upon him to pay the cheque amount within fifteen days from the date of receipt of the said legal notice. The said notice was served to the accused. After service of the statutory notice, the accused neither reply the notice nor paid the cheque amount to the complainant. As such, the accused has committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
14. In support of the case, the complainant's have examined its Accounts Manager as P.W.1 and 15 documents were marked at Ex.P.1 to 15. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the GST registration certificate of the complainant company. Ex.P.2 is the Letter of Authorization. Ex.P.3 are the 12 invoices raised by the complainant. Ex.P.4 is the Account ledger. Ex.P.5 is the Kotak Mahindra Bank Account statement of the complainant company. Ex.P.6 is the cheque in question issued by the accused in favour of the complainant for a sum of Rs.23,17,134/-. Ex.P.6(a) is the signature of the accused No.2. Ex.P.7 is the bank memo dated 21.10.2019 informing of the dishonor of the cheque as Funds Insufficient in the account of the accused No.1. Ex.P.8 is the office copy of legal notice dated:
08.11.2019. Ex.P.8(a) and 8(b) are the postal receipts.
C.C.NO.4701/2020 8 Ex.P.9 and 10 are the returned legal notices. Ex.P.9(a) and 10(a) are the returned RPAD covers. Ex.P.11 is the complaint. Ex.P.12 is the confirmation of account. Ex.P.13 and 14 are the GST certificates. Ex.P.15 is the certificate under section 65(b) of Indian Evidence Act.
15. In order to prove his defence, the accused is examined himself as DW.1. In the chief examination D.W.1 has repeated the defence taken by him. Further deposed that he is doing the business in the name style of Devi Enterprises since many years and they are the dealers in CCTV, UPS, Sales and services and Electric works. Further deposed that the complainant firm were doing the business of distribution of electrical products and also were dealers in the said field. He was in need of some electrical products and in respect of the same he approached the complainant firm and they agreed to supply on a condition that he should deposit a signed blank cheque as security, for which he agreed and he handed over a signed blank cheque to the complainant firm and they are also took signatures on some documents and agreements. Further deposed that after fulfilling their demand he placed an order agreeing for 2% CST and 2% KST and also requested to deliver the goods within time as stated in the purchase orders for which the complainant agreed. Further deposed that the complainant even thought supplied materials to him but they were not in time for which he had sustain C.C.NO.4701/2020 9 several losses and he has made payment as and when demanded by them.
16. Further deposed that in his purchase order as submitted by him to this court as per Ex.D.1 to 3, it is quite clear that he had agreed for 2% CST but the complainant while raising the bill have included 28% GST which is illegal and he is not liable to pay the same. The complainant had agreed to supply the goods as per his purchase order for 2% CST and now they are claiming 28% CST, which was not the agreement entered between them. Further deposed that till 2017-18 he had placed an order for the supply of goods to the tune of Rs.2,01,01,820/- and he made payment for all the goods supplied by them. Further deposed that 12 numbers tax invoices produced by the complainant as per Ex.P.3 dated: 04.08.2017, 29.08.2017 and 29.08.2017, 29.08.2017 and 06.09.2017, in these invoices are not belong to his concern and in this some invoices no where related his concern and they have concocted invoices. Further deposed that he has not received any legal notice. The complainant company purposefully has sent the legal notice to the wrong address, so that he could not reply to the notice and take action against them. Further he do not business in the address mentioned above and same cannot be seen in his purchase order which is marked at Ex.D.1 to 3. Further deposed that the present complaint is false and he do not owe any C.C.NO.4701/2020 10 amount to the complainant firm and he has not issued the cheque in dispute to the complainant for discharge of any liability. Hence, he prays to dismissed the complaint and acquit him. Ex.D.1 to 3 are the purchase orders. Ex.D.4 is the GST registration certificate of the accused company.
17. The accused in his defence, has taken the contention that he had placed an order to the complainant for supply of goods by its purchase order. But the complainant failed to supply the goods within time. He has paid entire amount for the goods supplied by the complainant. Further contended that even after receiving the money the complainant have failed to return the cheque and the cheque in question is not given by him to the complainant for discharge of any liability, the same is given to the complainant for the purpose of security before purchasing the goods. Further the complainant have misused the said blank cheque and filed a false complaint against the accused. Further he contended that he has never admitted regarding repayment of amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay the amount of Rs.23,17,134/-. But the accused in his defence has not disputed Ex.P.6-cheque having been issued by him. He also does not dispute his signature appearing on the said the cheque.
C.C.NO.4701/2020 11
18. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt or liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that after repeated request made by the complainant, the accused has not paid any amount to the complainant. Further argued that the accused towards of discharge of the said payment, had issued the cheque in favour of the complainant. He further argued that the accused has not denied the cheque- Ex.P.6 being his drawn on the account of the accused No.1 and his signature appearing on the said cheque. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act. The counsel for the complainant further argued that the accused has failed to produce any believable evidence that he had issued the blank cheque in favour of the complainant for the purpose of security and also why he has not returned back the same is not clear. Further argued that under section 139 of N.I.Act, there is a presumption that the cheque has been issued for discharge of legally enforceable debt or liability. In the C.C.NO.4701/2020 12 present case, the accused has not disputed Ex.P.6 being his cheque drawn on the account of the accused No.1. The said presumption is available to the complainant.
19. Further he has argued that the accused had failed to prove the very fact that cheque was given to the complainant company for the purpose of security. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that as per the demand of the complainant he had given the blank cheque as security measure. As such, very defence of the accused is not believable. The learned counsel for the complainant further argued that the accused has not produced any documentary evidence to prove his defence.
20. The learned counsel for the complainant has filed detail written arguments. In his written arguments it is submits that the present complaint arises out of dishonor of cheque in question issued by the accused in favour of the complainant towards discharge of its liability. The aforementioned cheque was dishonored with the endorsement "funds Insufficient" vide dishonor C.C.NO.4701/2020 13 memo dated: 21.10.2019. Accordingly, the complainant got issued a statutory legal notice under section 138 of the Negotiable Instruments Act, 1881 calling upon the accused t pay the cheque amount within 15 days to the office address/last known address of the accused. The notice was issued to the very same address for which the accused has furnished for obtaining registration under GST. The said legal notices were attempted to be served on 11.11.2019 and 14.11.2019 respectively. As the accused were not forthcoming to make any payments, the complainant was constrained to file the instant complaint before this court. Upon taking cognizance, this court was issued process to the accused. Thereafter he has appeared before this court and pleaded not guilty. Thereafter, the complainant examined Mr.Nagaraj.G as "PW.1" and has produced various documents in support of its case which have been marked as Ex.P.1 to 15. The counsel for the accused cross examined PW.1 and thereafter the accused recorded its oral evidence as DW.1. The accused has produced 04 documents which were marked as Ex.D.1 to 4 and thereafter the counsel for the complainant has extensively cross examined the accused. The counsels for both the complainant and the accused have submitted their arguments.
21. Further submits that the aforesaid cheque was issued by the accused in favour of the complainant towards discharge of its liability in respect of the C.C.NO.4701/2020 14 invoices raised by the complaint. The said invoices were raised towards supply of materials such as switchgear items and electrical parts. The accused had at no point of time before recording its evidence disputed the quality or the supply of the material by the complainant. Due to continuous transactions between the complainant and the accused No.1, the complainant had maintained a running account in respect of the transactions of the accused No.1. As per the ledger account maintained by the complainant, invoices for a total sum of Rs.2,24,18,954/- were raised, of which a total payment of Rs.2,01,820/- has been made by the accused to the complainant towards partial discharge of dues. However, a sum of Rs.23,17,134/- was due and payable by the accused to the complainant. Accordingly, the subject cheque was issued by the accused in favour of the complainant. The complainant has placed on record the dishonoured cheque, the dishonor memo, legal notice, tax invoices raised by the complainant, account ledger statement maintained by the complainant, bank account statement, confirmation of balance letter acknowledged by the accused as per Ex.P.3 to 8 and 12 in support of its case. Aforementioned documents clearly indicate that the accused has issued the subject cheque in favour of the complainant towards discharge of its outstanding dues. The complainant clearly proved that the subject cheque was issued towards a legally C.C.NO.4701/2020 15 enforceable debt/liability of the accused. By endorsing the confirmation balancing letter dated: 01.10.2018, the accused has furthermore clearly admitted to its outstanding dues which are payable by it towards the complainant. The signature in the confirmation balance letter-Ex.P.12 clearly matches with the signature on the purchase orders produced by the accused at Ex.D.1 to
3. Therefore, from the documents submitted before this court by the accused himself demonstrates that the authorized signatory of the accused who had placed purchase orders on the complainant company has himself issued to the confirmation of balance letter, acknowledging that as on the date of issuance of confirmation of balance letter, the accused is due and liable to pay the complainant the amount mentioned in the cheque.
22. Further submits that the accused has not denied the issuance of subject cheque in favour of the complainant or his signature. Furthermore the accused has also not disputed the receipt of the said goods as given under the invoices or receipt of the invoices. The accused only dispute regarding the applicability of GST on the invoices raised by the complainant. Further such an contention does not hold water as it is widely known that the GST laws came into force with effect from 01.07.2017. This being the case, the complainant has raised all the invoices post 01.07.2017 with applicable GST, including the invoices collectively marked as C.C.NO.4701/2020 16 Ex.P.3. The accused through its representatives as accepted the goods supplied by the complainant and duly acknowledged the receipt of the said invoices. The accused at no point, until after filing of the above complaint, raised the dispute the issue with regard to GST amount mentioned in the invoices. As such, the accused is now raising such baseless claims is clearly an afterthought and a sham defence, which does not merit any consideration at the hands of this court. Further the accused is guilt of suppressing material facts and documents before this court that or very much relevant for the purpose establishing the actual transaction between the parties. The accused repeatedly made various bald, vague averments without any proof or basis. The accused has miserably failed to adduce any cogent evidence in support of its case or averments and has miserably failed to rebut the presumption in favour of the complainant.
23. Further submits that the accused in its evidence as well as during the course of its final arguments has repeatedly averred that the complainant has produced certain invoices in its evidence which do not belong to the accused. The accused has allegedly claimed that GST No.29BKLPS786A2ZH does not belong to it and that the invoices raised by the complainant on the accused are concocted. Further all such claims raised by the accused are clearly an afterthought, half baked and have only been averred by C.C.NO.4701/2020 17 the accused to escape from this liability towards the complainant and solely to make out a case before this court. The accused has not led in any cogent evidence to indicate that said GST number does not belong to it. Infact, after conclusion of the evidence the accused, the complainant as rebuttal evidence has filed an additional affidavit in lieu of further examination in chief through its witness PW.1 and has produced GST search results which have been downloaded from the website of the GST department for both the GST which have been marked as Ex.P.13 and 14 respectively. The accused No.2 who is proprietor of M/s.Devi Enterprises was assisted by his brother i.e., Mr.Harish Beemamangala Shivanna, who was also involved with the transactions between the accused No.1 and the complainant. The purchase orders issued by M/s. Devi Enterprises have been signed by Mr.Harish Beemamangala Shivanna and he was also the point of contact for delivery of goods by the complainant.
24. Further submits that the purchase orders produced and marked as Ex.D.1 to 3 also contain the name of Mr.Harish Beemamangala Shivanna as the contact person and bears his signature. The confirmation of balance statement has also been acknowledged by the accused through Mr.Harish Beemamangala Shivanna. From the documents placed by both the complainant as well as the accused, it becomes clear that Mr.Harish Beemamangala C.C.NO.4701/2020 18 Shivanna, who is the brother of the accused No.2 was actively involved in conducting the day today affairs of the accused No.1 as well as the business transactions with the complainant. Upon the introduction and implementation of GST in 2017, Mr Harish Beemamangala Shivanna provided with the said GST No.29BKLPS868A2ZH for M/s.Devi Enterprises and accordingly the complainant has raised invoices on the said GST number. Further the complainant has also availed input credit on the said invoices, which would not be possible if there was any mismatch in the GST number or GST form filed by the complainant and the counter party (M/s.Devi Enterprises). Further submits that the GST portal would automatically detect if the GST number provided in the invoice raised by the complainant did not match with the returns filed by the counter party. That apart from the aforementioned GST even the other GST No.29ALFP6879D1ZW had been provided by the accused to the complainant. Solely on the basis of the representation made by the accused and its point of contact i.e., Mr.Harish Beemamangala Shivanna, the complainant raised its invoices for the materials supplied by it.
25. Further submits that in view of GST search results which have been downloaded from the website GST department for both the GST reflecting the name of the accused, the arguments of the accused that GST No.29BKLPS868A2ZH does not belong to it clearly C.C.NO.4701/2020 19 does not hold water and has solely been made out to make up a false defence. The accused apart from making search an bald averments has not placed on record any document in support of its case. Further the accused has also raised contention regarding the address to which the legal notice had been issued by the complainant. The legal notice was issued to the address of the accused No.1 as known to the complainant. The address can be confirmed in Ex.D.4 i.e., registration certificate of the accused wherein it states the address in the principal place of business of the accused. Furthermore, Ex.P.13 i.e., GST search result downloaded from the website of the GST department also confirms the said address of the accused as its principal place of business. Thus the contention raised by the accused that legal notice had been issued to and incorrect address is also not true. Further submits that Mr.Nagaraj.G who has been examined as PW.1 in the instant case has duly been authorized to represent, adduce evidence and do all necessary acts and deeds on behalf of the complainant before this court, vide authorization letter dated:
07.10.2019. The accused at such a belated stage cannot question the validity or veracity of the authorization letter and GST registration certificate of the complainant which have been filed by the complainant in support of its case. Further the Mr.Mahesh Kantilal being the Managing partner of the C.C.NO.4701/2020 20 complainant firm on behalf of the complainant firm had authority to appoint any person to represent the complainant. Upon recording his chief-examination, PW.1 has also rendered himself to cross examination by the counsel for the accused. Such a contention of the accused that the instant complaint ought to be dismissed as PW.1 has no locus standi to depose as a witness before this court is completely frivolous and baseless and no actual ground has been out by the accused in this regard.
26. Further submits that the accused has submitted various case laws/judgments before this court in support of it arguments pertaining to locus standi of the complainant, onus on the complainant in proving essential ingredients of section 138 of the Negotiable Instruments Act, liability of the accused towards the complainant. However, the accused has failed to outline as to how the said judgments are applicable to its contentions/ facts of the case. The said case laws/judgments have no applicability whatsoever in respect to the fact and circumstances of the above case, particularly in view of the evidence led in by the complainant with regard to the admitted debt of the accused towards the complainant. From the examination of the aforesaid documents, it can be clearly established that the complainant has genuine and legitimate claim for a sum of Rs.23,17,134/- against the accused. Further the defence of the C.C.NO.4701/2020 21 accused is merely a moon shine defence as it has merely been raised without the support of any documents. The above said facts and the documents clearly establish that the dishonored cheque was issued by the accused towards discharge of a legally recoverable debt. The accused has miserably failed to raise any probable defence to rebut the presumption. The accused has only made vague averments and has failed to bring on record something probable to disprove the case of the complainant. Hence, he prays to allow the complaint as prayed for.
27. The learned counsel for the accused has filed detail written argument. In the written argument he has reiterated the facts of the case. In reference to the above, the complainant firm examined its accounts Manager as PW.1 and produced Ex.P.1 to 14. The case of the accused is that they issued the signed blank cheque as security at the time of entering in to agreement with the complainant firm at the initial stage. The purchase goods worth of Rs.2,00,00,000/- from the complainant firm and has repaid entire amount within time. While the aforesaid transaction there arouse some dispute with respect to GST and CST. Due to which, the complainant in order to seek revenge has mis-utilized the cheque, which was issued as security and has filed this false complaint against them. The accused in order to prove his case cross examined PW.1. The invoice dated: 14.08.2017, 29.08.2017, C.C.NO.4701/2020 22 29.08.2017 and 06.09.2017 produced by the complainant do not belong to the accused. In the aforesaid invoice the GST number is different, it do not belong to the accused and the complainant failed to prove that those invoices belong to the accused. Henceforth, there is debt by the accused as alleged by the complainant in their complaint. The present complaint is filed by one Mr.Nagaraj.G, Account Manager on behalf of the complainant firm without any proper authorization of the complainant firm as required under the law. The authorization letter issued by Mahesh Kantilal the Managing partner of the complainant firm is without any resolution or permission from other partners. Hence, the said Nagaraj.G, Account Manager, has no locusstandi to file the present complaint. Another important point that the said Nagaraj.G, Account Manager who is examined as PW.1 has deposed before this court stating that he has no personal knowledge of the transaction that occurred between the complainant firm and the accused concern, when being so how can he give evidence on behalf of the complainant firm. Henceforth he ha no locus-standi to file or to give evidence on behalf of the complainant before this court. Again PW.1 in his cross examination has clearly admitted that he filled the contents of the cheque, by this it is clear that the cheque in dispute was blank at the time of issuance and it was not issued for any legally enforceable debt.
C.C.NO.4701/2020 23 They have misused the cheque by filling the contents and have filed false complaint against the accused.
28. Further submits that whether PW.1 has locus standi to give/depose evidence on behalf of the complainant: In respect of the above the complainant firm had itself produced GST certificate which is marked as Ex.P.1, on perusal of the same in page No.3 of the said certificate there are 3 partners, when being so, how can Mr.Mahesh Kantilal, individually given authorization to Nagaraj.G, Account Manager, without the permission of other partners. Hence, the authorization letter issued by Mr.Mahesh Kantilal is invalid. Again the said document i.e., Ex.P.1 is a computer generated copy, it has no authenticity, further the complainant has not produced the said document with proper manner that is they have not filed 65B application. The said Mr. Nagaraj has filed this case without proper authorization. Again on perusal of Ex.P.2 it is crystal clear that their was no any meeting between the partners nor passed any resolution or permission were given to Mr.Mahesh Kantilal for authorization any person for filing the present complaint on behalf of the complainant firm. And on perusing of the cross examination of PW.1 wherein the complainant has deposed that ಪರರದದರರ ಸಸಸಸ ಯಲ ಮಹಹಶ ಕಸತಲಲ ಮತತತ ಶಶಹ.ಎನ. ಎಸ. ಎಲಕಕ ಶಕಲ ಲಮಟಡರ ವರತ ಪಲತದರರತ ಇರತತತರ . ಶಶಹ.ಎನ. ಎಸ. ಎಲಕಕ ಶಕಲ ಲಮಟಡ ಕಸಪನ ಎಸದರ ಸರ.
C.C.NO.4701/2020 24 ಶಶಹ.ಎನ. ಎಸ. ಎಲಕಕ ಶಕಲ ಲಮಟಡನ ಲ 3-4 ಜನ ನರಹರಶಕರತ ಇರತತತರ . ಅದರಲ ಮತಖಖ ವಗ ಹರವಲಲ ಬಮತಸದಶ, ಬಶ ಜ ನಸದನ ಮತಸದಶ, ಶಶಹವಲಲ ಬ ಮತಸದಶ ಇರತತತರ . ಶಶಹ.ಎನ. ಎಸ.ಎಲಕಕ ಶಕಲ ಲಮಟಡರವರ ಕಹಬಲಡಹಲರ ವಖ ವಹರ ಮಡತತತರ .
29. On perusing of above deposition that he stated that the complainant firm have two partners one is Mahesh Kanthilal and another one is N.M. Electrial Limited, but he failed to mentioned the name of Mr.Chandmal Kanthilal. The N.M.Electrical limited is the limited company having several directors. The second partner which PW.1 stated is not an individual person, it is a corporate body/juristic person which consists of 3-4 directors. Any complaint filed on behalf of the company/firm their permission is necessary through resolution or meeting of partners/Directors. Again the complainant firm failed to produce partnership deed, whether it is registered or not, it is unknown. Further Ex.P.1 do not bear any seal or signature, and produced without the application under section 65B of evidence Act. Hence, this document do not have any evidence value, it cannot be looked into as per law. The complainant claim as partnership firm but they not produced any authentic documents to their version. The accused case is Mr.Mahesh Kanthilal had no locus-standi/right to issue authorization letter to Mr.Nagaraj, Account Manager to represent the case on behalf of the complainant firm. Hence, looked from any angle the complaint presented/filed by Mr.Nagaraj.C C.C.NO.4701/2020 25 Account Manager have no locus standi to file or give evidence on behalf of the complainant firm and on this point itself the complaint is liable to be dismissed.
30. In his written arguments he has reiterated the section 7 to 9, 138(c) and 142(a) of the N.I.Act. He has relied upon the citations reported in CDJ 2011 SC 216 (2011(2) S.C), Milind Shripad Chandurkar V/s. Kalim M Khan and Another, CDJ 2007 Kar HC 924 {IV (2008) BC 657}, Omshakthi S/C & S/T and Minority Credit Co- operative Society Limited V/s M.Venkatesh, Criminal Appeal No.1065/2005 decided on 05.10.2007, 2002 BC 559, Dr.Umagangadhar V/s. Classic Coffee and Species Private Limited, Chickmagalur, in Cri.P.No.1103/2000 decided on 17.04.2001, IV (2008) BC 329, 2008(1) DCR 211, Criminal Revision Application No.56/2006 decided on 08.06.2007, 2009 (2) DCR 36 Bombay High Court, 2010(1) DCR 67, Bombay High Court, Criminal Appeal No.35, 50 and 55/2009 decided on 15.10.2009, CDJ 2014 Kar HC 926 (2015 ACD 83 (KAR)).
31. Further submits that whether the complainant has prove the essential ingredients of 138 of N.I.Act. In respect of the above, PW.1 i.e., Nagaraj.C, account manager examined himself as PW.1 and in his cross examination he is clearly admitted that he has no personal knowledge regarding the transaction which occurred between the complainant firm and accused, C.C.NO.4701/2020 26 when the cheque was issued. He accepted his ignorance about the transaction and also issuance of the alleged disputed cheques towards discharge of liability. Since PW.1 had unequivocally admitted that he had no personal knowledge about the transaction and he had not witnessed the transaction. Henceforth question arises as to the evidential value of his evidence. In this point he has relied upon the citation reported in CDJ 2013 SC 805 {2015 (1) DCR 228} A.C.Narayan V/s. Sate of Maharastra & Another : It has held that N.I.Act 1881 section 138 and 142 complaint Maintainability held- if complaint is filed for on behalf of payee or holder in due course then that is good enough compliance with section 142 of N.I.Act. A bare reading of the above judgment, it is crystal that the power of attorney holder can depose and verify on oath before the court in order to prove the contents of the complaint. However the power of attorney holder must have to witnessed the transaction as an agent of payee/holder in due course of posses due knowledge regarding the said transactions.
32. Further submits that whether the accused is liable to pay any amount to the complainant : In respect to the above, on perusal of deposition of PW.1 he has clearly admitted that the cheque received by complainant as security at the time of first agreement. And he further admitted that he himself filled the contents in the cheque and presented the cheque. The C.C.NO.4701/2020 27 complainant produced some invoices copies it has been marked as Ex.P.3 series. Admittedly some invoice copies bear different GST numbers. Those GST numbers do not pertain to accused and the complainant miserably failed to prove that those GST belongs to him. Hence, the complainant have failed to prove the initial burden which is on him, presumption under section 139 and 118 do not support him Henceforth the complaint is liable to be dismissed. Hence, there is no debts as alleged in the complaint. It shows that the cheque in question was issued by the accused not towards the discharge of any legally enforceable debt.
33. In his written arguments it is relied upon the citations reported in CDJ 2007 Kar HC 422 {ILR 2007 KAR 1703}, 2011 ACD 1136 (KER), CDJ 2014 SC 288 Supreme Court of India Criminal Appeal No.83/2014 (Arising out of SLP (Crl.) No.9752/2010), CDJ 2022 SC 1121, CDJ 2013 SC 1060 {2014(1) DCR 9}, CDJ 2009 Kar HC 586 {2010 CRI.L.J.1061}, CDJ 2008 SC 047 (2008 AIR SCW 738), CDJ 2007 SC 214 {2007) 5 SCC 264}, CDJ 2013 SC 110, CDJ 2013 DHC 2097 (2013 (1) DCR 417). Hence, these reasons, he prays to dismiss the complaint and acquit the accused.
34. The main defence of the accused is that there was no legally enforceable debt or liability or due to the complainant from the accused for which the cheque-
C.C.NO.4701/2020 28 Ex.P.6 was issued. So also he has taken up the defence that he had issued the blank cheque to the complainant for the purpose of security. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt or liability, for which the cheque came to be issued. The complainant created all the documents and make an unlawful gain against the accused have filed this false case. The complainant have not produced any believable documents regarding alleged transaction. Therefore, from the evidence placed on record, the very supplying the materials to the accused is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt. The complainant have filed this false case against the accused by filling the contents of the cheque and misused the security cheque. The ingredients of the Negotiable Instruments Act are not made out. Hence, the offence punishable under section 138 of N.I.Act against the accused is not attracted. Further contended that there is no existing legally enforceable debt or liability on the date of presentation of alleged cheque.
35. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque-
C.C.NO.4701/2020 29 Ex.P.6 in favour of the complainant. Further it is not disputed that the cheque in question issued by the accused in the account of the accused in favour of the complainant. It is not disputed that the complainant company is a limited liability partnership and the accused is a proprietor and businessman. The accused in order to repayment of said amount had issued the cheque in favour of the complainant. Whereas, the accused has contended that he had given the signed chaque to the complainant for the purpose of security. When the cheque had given which was blank. The accused has specifically denied having debt or liability issued the cheque-Ex.P.6 on 27.08.2019. He contends that the blank cheque given by him to the complainant as was misused by the complainant and a false complaint was filed against the accused.
36. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt or liability, for which the cheque drawn on the account of the accused and was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Accounts Manager as PW.1 and 15 documents were marked at Ex.P.1 to 15. In chief examination, he has repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.6 being drawn on the accused account. The said presumption is available to the complainant.
C.C.NO.4701/2020 30 In the complaint it is stated that the accused in order to clearing the outstanding due had issued the cheque in question in favour of the complainant. This fact is also stated in the notice as well as in the evidence. This fact is not disputed by the accused.
37. Under section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt or liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforcible debt or liability. In the case on hand also the accused has disputed the existence of legally enforceable debt or liability, for which the cheque in question was issued.
38. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case, further he has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused that he had issued blank cheque to the complainant company for the purpose of security. Further he has already paid entire amount to the complainant. Except, said defence, he C.C.NO.4701/2020 31 has not produced any material to prove such defence. If the accused had given the cheque to the complainant company for the purpose of security, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque. On which date the accused came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is a Businessman and having knowledge of the financial transaction, why he has given the blank cheque to the complainant without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the blank cheque. Moreover, immediately after the alleged blank cheque-Ex.P.6 misused by the complainant he has not lodge any complaint before concerned police station. No steps have been taken to receive back the blank cheque, after he came to know about the same.
39. It is further stated that during the course of his arguments the accused has raised a question that the complainant is a limited liability partnership. The complainant not produced any documents before this court. Therefore, the complaint is not maintainable. The complainant firm is a limited liability partnership and it is C.C.NO.4701/2020 32 true that the complainant has produced the printout copy of GST registration certificate. But not produced the certificate under section 65(b) of Indian Evidence Act. However, the firm is a limited liability partnership firm. On perusal of the document it shows that it is a limited liability partnership company. However, if the firm is not registered then also the complaint is maintainable as per the ruling of the Hon'ble Apex Court in BSI Limited V/s. Gift holdings Pvt.,Ltd., (2002) 2 SCC 737; It was held in para 20 of the judgment that the criminal prosecution is neither for recovery of money nor any enforcement of any security etc., section 138 of the N.I.Act is a penal provision, the commission of which offence entails a conviction and sentence on proof of guilt in duly conducted criminal proceedings. Ones, the offence under section 138 of N.I.Act is completed, the prosecution proceedings can be initiated not for recovery of amount covered by the cheque but for brining the offender to penal liability. Thus, the prosecution for the offence punishable under section 138 of the N.I.Act not being any proceeding, muchless a suit, to enforce a right arising from a contract, but it being proving of an offence alleged to have been committed by drawer of a cheque in favour of the complainant and also as observed by the trial court, since the said issuance of a cheque towards legally enforceable debt by the accused in favour of the complainant since proved, the complainant merely C.C.NO.4701/2020 33 because. Being an unregistered firm is not precluded from initiating the complaint under section 200 of the Cr.P.C against the accused for the offence punishable under section 138 of the N.I.Act". Further this law has been retreated by the Hon'ble High Court of Karnataka in (2019) SCC online Karnataka 3625 at para No.16 &
17. Hence, the contention of the accused holds no water.
40. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.6 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the C.C.NO.4701/2020 34 complainant, the onus shifts on the accused to rebut the complainant's case.
41. Further the learned counsel for the accused has submitted that the cheque was given to the complainant for the purpose of security. Further the accused has already paid entire amount to the complainant. Further submitted that PW.1 during his cross examination has specifically admits that subject cheque was issued for the purpose of security and same was filled up by him. Hence, offence punishable under section 138 of N.I.Act is not attracted. In this regard once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that cheque was issued by the drawer for legally payable debt or liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that, once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment C.C.NO.4701/2020 35 which is legally recoverable debt.
42. Further in considering the scope of the presumption to be raised under section 139 of the Act and nature of evidence to be adduced by the accused to rebut the presumption, in Kumar Exports V/s Sharma Carpets, reported in (2009) 2 SCC 513 held as under;
"14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mention in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The terms "presumption" is used to designate an inference, affirmative or dis-affirmative of the existence of a fact, conveniently called the "presumed fact"
drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means 'taking as true without examination or proof.'
18. Applying the definition of the word "proved" in section 3 of the Evidence Act to the provisions of section 118 and 139 of the Act, it becomes evident that in a trial under section 138 of the act a presumption will have to be made that every Negotiable Instruments was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of Negotiable Instruments is either proved or admitted. As soon as the complainant discharges C.C.NO.4701/2020 36 the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumption under sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
19.The use of the phrase "until the contrary is proved" in section 118 of the Act and use of the words "unless the contrary is proved" in section 139 of the act read with definitions of "May presume" and "Shall presume" as give in section 4 of the Evidence Act, makes it at once clear that presumption to be raised under both the provisions are rebuttable. When a presumptions is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not presumed, the purpose of the presumption is over.
20. The accused in a trial under section 138 of the act has two options. He can either show that consideration and debt did not exist or that under the particular 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 existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is 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 that 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 C.C.NO.4701/2020 37 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 consideration and 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 presumption, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstance 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 consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstance so relied upon are compelling the burden may likewise shift again on to the complainant. The accused may also rely upon presumption of fact, for instance, those mentioned in section 114 of the evidence act to rebut the presumptions arising under section 118 and 139 of the Act".
43. In the present case of the complainant, due to commercial arrangement between the parties were fructified, and as such the complainant had supplied the materials to the accused company. Ex.P.3 are the invoices. In token of their acceptance of said materials, the accused had issued the cheque in question. However, it has been contended by the accused in his defence that that cheque was issued for the purpose of security and not for supply of materials. The oral and documentary evidence adduced by the complainant are sufficient to prove that the cheque was issued for C.C.NO.4701/2020 38 legally enforceable debt. An evidence adduced by the complainant/P.W.1 there would be presumption under section 139 of N.I.Act. Further the accused did not adduced any cogent and reliable evidence, it is not sufficient to rebut the presumption raised under section 139 of the N.I.Act. It is quite unbelievable that in a business/mercantile transaction the accused even after making payment towards purchase did not insist for the return of the cheque. It is quite improbable that the accused did not take any steps to get back that cheque.
44. Further the complaint filed within statutory period. That consequent to the non-payment of the cheque amount so demanded by the complainant within the statutory period, the complainant have filed the present complaint, which is well within limitation. Hence, contention of the accused cannot be considered that the cheque in question was issued for the purpose of security. It is clear that there is no prohibition either in insolvency act or Negotiable Instruments Act for the complainant to approach the criminal court. The bar is extended to only civil detention and civil arrest, it would not cover under section 138 of the Negotiable Instruments Act.
45. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is C.C.NO.4701/2020 39 admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
46. In the case of Kalamani Tex V/s P. Balasubramanian, reported in (2021) 5 SCC 283 has observed that section 138 read with 139 of N.I.Act, presumption as to legally enforceable debt, effect of admission regarding signature on the cheque, in such situation, court held that required to presume that the cheque was issued as consideration for legally enforceable debt.
"13. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under section 118 and 139 of N.I.Act. The statute mandates that once the signature(s) of an C.C.NO.4701/2020 40 accused on the cheque/Negotiable Instruments are established, then these "reverse onus"
clauses become operative. In such situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallized by this court in Rohitbhai Jivanlal Patel V/s state of Gujrat, (2019) 18 SCC 106, Para 18: (2020) 3 SCC (Civil) 800:
(2020) 3 SCC (Cri) 575) in the following words:
(SCC pp. 120-21, para 18)".
"18. In case at hand, even after purportedly drawing the presumption under section 139 of the N.I.Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want to examination of relevant witness who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with principle of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused".
47. In the present case also, as the accused never disputed his signature and did not deny issuing cheque from the account of the accused. The accused did not dispute cheque return memo also. The cheque was returned for the reasons Funds Insufficient in the account of the accused. Thus, the act clearly lays down presumptions in favour of the complainant with regard to the issuance of the cheque by the accused towards the discharge of the liability in favour of the C.C.NO.4701/2020 41 complainant. Further under scheme of the Act, the onus is upon the accused to rebut the presumption in favour of the complainant by raising a probable defence. Such being the legal position, it would be pertinent to refer to the defences raised by the accused to rebut the presumptions in favour of the complainant in this case.
48. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
49. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reasons stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard. It was also contended by the accused that he had issued the blank cheque to the complainant for the purpose of security. The said cheque was misused by the complainant. In order to prove his defence has failed to produce any believable C.C.NO.4701/2020 42 evidence before this court.
50. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and had not return the same, inspite of collecting cheque leaves from the accused, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.6-cheque. Further he could have issued notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of blank security cheque against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
51. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment C.C.NO.4701/2020 43 to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.6 is the cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt or liability. From the evidence of P.W.1 and also cheque return memo-Ex.P.7 it is established that the cheque was dishonored for the reasons "Funds Insufficient'' in the account of the accused. A legal notice being issued as per Ex.P.8 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not disputed regarding notice send by the complainant on his address. But the notice sent to the address of the accused is returned unclaimed and the notice sent to the another address of the accused returned as insufficient address. But the accused has not given reply to the said notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I Act. The accused has contended that he has not received the notice from the complainant. Hence, he has not taken any legal action C.C.NO.4701/2020 44 against the complainant. But during his cross-
examination specifically admits that address shown in the notice is the office address of the accused. Hence, as per section 27 of General Clause Act 1897, presumption is in favour of complainant that statutory notice is duly served on the accused". Hence, notice presumed to be served on the accused. Therefor, defence also holds no water. When the accused has not seriously disputed the address, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
52. It is not the contention of the accused that thereafter he has repaid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period and failed to give reply to the notice, as such the accused has committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even the accused did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of the Hon'ble Supreme Court in Indian Bank C.C.NO.4701/2020 45 Association V/s Union of India and others, (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
53. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on their behalf.
C.C.NO.4701/2020 46
54. The learned counsel for the accused argued except signature other writings on Ex.P.6-cheque are not in his handwritings, which were filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits his signature, he cannot take up a defence that other contents of the cheque were filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC) 138), between Bir Singh V/s. Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the 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 cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. Even a blank cheque leaf, voluntarily signed and handed over by the accused C.C.NO.4701/2020 47 which is towards some payment. Would attract presumption Under section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
55. The principles emerging from the above referred decision make it clear that, it is not mandatory and no law prescribes that the contents of cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I.Act arises. The principle of law laid- down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
56. As per the version of the accused is that the accused has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that the accused has issued the cheque-Ex.P.6 and even after the accused has not paid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of C.C.NO.4701/2020 48 section 139 of N.I.Act. The accused is liable for dishonor of the cheque. In case of dishonor of the cheque, once the execution of the cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused has issued the cheque- Ex.P.6 in favour of the complainant in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him that cheque was given to the complainant for the purpose of security and he has already paid the amount to the complainant. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
57. PW.1 in his evidence has specifically stated that the accused No.1 is a proprietorship concern, which is managed and administered by the accused No.2. The accused No.1, through its proprietor, the accused No.2, approached the complainant and sought enter into business transactions with the complainant. After mutual discussions and negotiations between the accused No.2 and the complainant, the accused No.1 has placed certain purchase orders on the complainant C.C.NO.4701/2020 49 for purchase of certain switchgear items and electrical parts. Accordingly, the complainant has supplied goods to the accused No.1 and the same was accepted without any complaints or demur by the accused or his employees. After delivery of goods, the complainant has raised invoices on the accused No.1 as per the terms of agreement between the complainant and the accused No.1. Further due to continuous transaction between the complainant and the accused No.1, the complainant had maintained a running account in respect of transactions of the accused No.1. As per the ledger account maintained by the complainant, invoices for a total sum of Rs.2,24,18,954/- were raised. The accused No.1 has made a total payment of Rs.2,01,01,820/- to the complainant towards partial discharge of due and therefore, is due and liable to pay the complainant a sum of Rs.23,17,134/-. After repeated reminders/communications the accused has issued the cheque in question in favour of the complainant towards the clearance of its outstanding dues. So also it is not in disputed that the complainant and the accused are known to each other, some point of period. When the cheque was presented to the bank same was returned for the reasons funds insufficient, this is not seriously disputed by the accused. The accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the C.C.NO.4701/2020 50 case of the complainant. The accused has failed to probables his defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
58. POINT NO.3 AND 4: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts, I have taken these two points together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. The cheque-Ex.P.6 being drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case, if the accounts department of the accused had issued the cheque in favour of the complainant for the purpose of security only and why he has not produced any documents. After service of notice the accused neither reply the notice nor paid the cheque amount to the complainant. Hence, the present complaint came to be filed before this court on 11.12.2019 within the C.C.NO.4701/2020 51 period of one month from the date of cause of action.
59. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque was issued for discharge of legally enforceable liability or debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
60.POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following:
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for the offence punishable under section 138 of N.I.Act.
C.C.NO.4701/2020 52 The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.23,20,000/- (Rupees twenty three lakhs twenty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.23,05,000/- (Rupees twenty three lakhs five thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C. and remaining amount of Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 25 th day of January 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.01.29 11:43:25 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Nagaraj.G.
C.C.NO.4701/2020
53
List of documents marked on behalf of the complainant:
Ex.P.1 : GST Registration Certificate.
Ex.P.2 : Authorization letter. Ex.P.3 : 12 Invoices. Ex.P.4 : Account ledger. Ex.P.5 : Kotak Mahindra Bank Statement. Ex.P.6 : Cheque. Ex.P.6(a) : Signatures of the accused. Ex.P.7 : Bank endorsement. Ex.P.8 : Office copy of the legal notice. Ex.P.8(a) & 8(b) : Postal receipts. Ex.P.9 : Postal acknowledgement. Ex.P.10 : Returned legal notice. Ex.P.10(a) : Returned postal cover. Ex.P.11 : Complaint. Ex.P.12 : Confirmation of account. Ex.P.13 & 14 : GST registration certificates. Ex.P.15 : Certificate U/s.65(b) of I.E.Act.
List of witnesses examined on behalf of the accused:
DW.1 : Sri.B.S.Girish.
List of documents marked on behalf of the accused: Ex.D.1 to 3 : Purchase orders (Marked through PW.1). Ex.D.4 : GST registration certificate of the accused company.
Digitally
signed by
SOUBHAGYA
SOUBHAGYA B BHUSHER
B BHUSHER Date:
2024.01.29
11:43:32
+0530
XXVIII Addl. Chief Metropolitan
Magistrate, Bengaluru.
C.C.NO.4701/2020
54
C.C.NO.4701/2020
55
25.01.2024 (Judgment pronounced in the Open
Court Vide Separate Sheet)
:ORDER:
Acting under section 255(2) of
Cr.P.C., the accused is convicted for the offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.23,20,000/- (Rupees twenty three lakhs twenty thousand only) to the complainant.
It is further ordered that out of the
said fine amount an amount of
Rs.23,05,000/- (Rupees twenty three
lakhs five thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C. and remaining amount of Rs.15,000/-
(Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine
amount, the accused shall undergo
simple imprisonment of six months.
XXVIII Addl. Chief Metropolitan
Magistrate, Bengaluru.