Bangalore District Court
Company Private Limited vs Nos.3 And 4.) on 31 December, 2021
KABC020381282009
IN THE COURT OF THE XXI ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY.
DATED THIS THE 31ST DAY OF DECEMBER 2021
Present: Miss.B.T.ANNAPOORNESHWARI
B.A., L.L.B., L.L.M.
XXIII ASCJ & XXI ACMM.
C.C.25456/2009
1. Sl. No. of the Case : C. C.No.25456/2009
2. The date of complaint of 10.09.2009
commission of offence :
3. Name of the Hasham Investment and Trading
Complainant : Company Private Limited,
H. P.House,
5 Janmabhoomi Marg, Fort, Mumbai
400 023.
Represented by its Authorized
Signatory
Sri.Sambasivam Kailasam.
Corporate office at:
No:134 Doddakannelli, Sarjapur
Road,
Bangalore560 035.
(By M/s.Holla & Holla Advocates.)
4. Name of the Accused 1) Subhiksha Trading Services
: Limited, Cabin A, Flat No.2, Habib
Complex, 2nd Floor, No.5,
Durgabhai Deshmukh Road, RA
2 CC No.25456/2009
SCC.H-25
Puram, Chennai 600 028.
2) Mr.R.Subramanian, Director,
Subhiksha Trading Services
Limited, 2/583 Singravelan Road I
cross, Chinna Neelangarai,
Chennai 600 041.
3) Ms.Renuka Ramnath, Director,
Subhiksha Trading Services
Limtied, 701, Radhika
Apartments, Opp. Sayani Road,
Prabha Devi, Mumbai 400 025.
4) Mr.Rajeev Bakshi, Director,
Subhiksha Trading Services
Limited, C/o ICICI Venture Funds
Management Company Limited,
Stanrose House, Ground Floor,
Appasaheb Marathe Marg, Prabha
Devi, Mumbai 400 025.
(AS PER ORDERS IN CRL.P. 8510/2015,
8511/2015 OF HON'BLE H.C.
COMPLAINT QUASHED AGAINST
ACCUSED NOS.3 AND 4.)
5) Mr.K.Balasumbramanian, Deputy
General Manager, Subhiksha
Trading Services Limited 27, 4th
Main, Kasturba Nagar, Adyar,
Chennai 600 020.
(A1 & A2 By Sri.Shakeer Abbas,
Advocate & A5 by Sri.Prakash
Goklaney, Advocate.)
5. The offence complained u/Sec.138 of Negotiable Instruments
of : Act
6. Plea of the Accused : Pleaded not guilty
7. Final order : Accused Nos.1, 2 and 5 are convicted.
8. Date of such order : 31.12.2021
3 CC No.25456/2009
SCC.H-25
JUDGMENT
This complaint is under Section 138 of N.I. Act.
2. The case of the Complainant Company in brief is that, it is company incorporated under the Companies Act, 1956, and carrying on the business of investment management. The accused No.1 owed to the complainant inter alia, a sum of Rs.43,74,17,000/ pursuant to a Bridge Loan Agreement dated 31.12.2008. Towards part repayment of the principal amount of loan provided by the complainant to the accused No.1 under the Bridge Loan agreement, the accused No.1 issued five cheques all drawn on Axis Bank, Whitefield Branch, Bangalore, which are as under;
Sl.No Cheque Cheque Amount
No: Date
1. 007211 03.01.2009 12,07,00,000.00
2. 007212 03.01.2009 6,50,00,000.00
3. 007213 03.01.2009 5,50,00,000.00
4. 007214 03.01.2009 1,49,74,946.53
5. 007215 03.01.2009 5,75,00,000.00
Total 31,31,74,946.53
4 CC No.25456/2009
SCC.H-25
The accused No.2 is the Managing Director of the accused No.1 and accused Nos.3 and 4 are the Directors on the Board of Directors of the accused No.1 at the time the Five cheques in respect of amount payable were issued by the accused No.1. The above cheques are signed by the accused No.5 who is the Deputy General Manager and authorized signatory of the accused No.1. The accused Nos.2 to 5 are in charge of and responsible to the accused No.1 for management and conduct of the business of the accused No.1. At the time of issuing the aforesaid cheques all the accused had specifically assured the complainant that the same would be duly honoured on presentation. The complainant presented the said cheques for encashment to its Bankers viz., HDFC Bank, Koramangala Branch, Bangalore. To the shock the aforesaid cheques were dishonoured and returned with the endorsement "Insufficient Funds". The said dishonour was intimated to the complainant by his bankers on 02.07.2009. The accused Nos.2 to 4 are the Directors of first accused and accused No.5 is the Deputy General Manager of the accused No.1 and all of them are also jointly and severally liable as all of them are actively involved in day 5 CC No.25456/2009 SCC.H-25 to day affairs of first accused. The complainant got issued a legal notice dated 30.7.2009 through registered post acknowledgement due to all the accused calling upon them to pay the amount of Rs.31,31,74,946.53/ towards the aforesaid dishonoured cheques within the period of 15 days from the date of receipt of the said notice, which was duly served on accused Nos.1, 2 and 5 on 03.08.2009 and the notice sent under the certificate of posting has been duly served on the accused. Even then the accused have failed and neglected to pay the amount covered by the cheques and therefore become liable for punishment in accordance with the provisions of Section 138 of N.I. Act, 1881.
3. After perusing the complaint with documents and sworn statement, cognizance taken and this case registered and summons issued. In response to summons issued by this court, the accused Nos.2 to 5 appeared and as accused Nos.3 and 4 preferred Crl.P., the matter stayed. Thereafter, as per the order passed by Hon'ble H.C. in Cr.P.No:8510/2015 alongwith 8511/2015 this complaint is 6 CC No.25456/2009 SCC.H-25 quashed against accused Nos.3 and 4 and accordingly this court dismissed the complaint against said accused.
4. Thereafter, this complaint is proceeded against accused Nos.1, 2 and 5 only. The copies of prosecution/complaint papers were supplied to the accused as required under Section 207 of Cr.P.C. The substance of accusation for the alleged offence punishable under Section 138 of N.I. Act, is read over and explained to the accused in the language known to them to which they pleaded not guilty and claimed to be tried.
5. The complainant company in order to prove its case has examined its authorized representative as PW.1 and got marked 21 documents as per Exs.P.1 to P.21, Exs.P.21(a) to
(f). They have also got examined one witness Sri.Ramesh, Branch head, Axis Bank, White Field Branch, Bengaluru, as PW.2 and produced documents at Exs.P.22 to P.26 and closed their side.
7 CC No.25456/2009
SCC.H-25
6. The statement of the accused Nos.2 and 5 under Section 313 of the Cr.P.C is recorded by explaining incriminatory circumstances appearing against them. The accused have denied the entire evidence of the Complainant and submitted written submission in defence. In the written submission of accused No.5 he contended that there was no legally enforceable debt as the cheques dated 03.01.2009 when the loan was due only on 31.1.2009, no evidence lead as to how loss of original documents occurred and when discovered as required u/Sec.65(c) of Evidence Act and hence Exs.P.2 to P.17 except Ex.P.12 cannot be looked into and conduct of complainant in not effectively prosecuting against accused Nos.3 and 4 also to be considered. The accused No.2 in his written submission taken above similar contentions and further contended that the complainant was registered as NBFC only in 2019 and as such the complainant was not entitled to lend loan when the alleged loan was given as it was not registered with RBI.
7. In support of the defence the accused Nos.5 and 2 have got examined themselves as DWs.1 and 2 respectively. 8 CC No.25456/2009
SCC.H-25 In the crossexamination of PW.1 they got marked Exs.D.1 to 7 and Exs.D.8 to D.14 are got marked in the evidence of DW.1 and closed their side.
8. Heard arguments of both sides and perused the materials on record. The counsel for complainant and accused No.2 have also filed written arguments and the counsel for the accused No.5 has adopted the oral and written arguments of accused No.2. Both counsel have also relied upon decisions in support of their case.
9. Now the points that arise for consideration of this court are:
1. Whether the Complainant company proved that, the accused No.2 being the MD of accused No.1 company and accused No.5 being the Deputy General Manager of accused No.1 as the accused No.1 owed to the complainant company a sum of Rs.43,74,17,000/ pursuant to a bridge loan agreement dated 31.12.2008 and towards part payment of said amount issued cheque bearing Nos.007211 dated 03.01.2009 for Rs.12,07,00,000/, cheque bearing Nos.007212 dated 03.01.2009 for Rs.6,50,00,000/, cheque bearing Nos.007213 dated 03.01.2009 for Rs.5,50,00,000/, cheque bearing 9 CC No.25456/2009 SCC.H-25 Nos.007214 dated 03.01.2009 for Rs.1,49,74,946.53/, cheque bearing Nos.007215 dated 03.01.2009 for Rs.5,75,00,000/ all drawn on Axis Bank, Whitefield Branch, Bangalore, to discharge the legally recoverable debt or liability?
2. Whether Complainant proved that, they have complied the mandatory requirements of section 138 of NI Act and therefore the accused Nos.1, 2 and 5 have committed the offence punishable under section 138 of N.I Act?
3. What order or sentence?
10. On hearing the arguments of both side and perusal of oral and documentary evidence on record, this court gives findings to the above points as under;
1) In the affirmative,
2) In the affirmative,
3) As per final order, for the following reasons;
REASONS
11. Point Nos.1 and 2: These points are taken up together for the sake of convenience and to avoid repetition of facts and circumstances of the case.
10 CC No.25456/2009
SCC.H-25
12. It is the specific case of the Complainant that, in pursuant to bridge loan dated 31.12.2008 the accused No.1 company owed a sum of Rs.43,74,17,000/ and towards its part repayment the accused Nos.2 and 5 being the MD and Deputy General Manager of accused No.1 have issued five cheques for Rs.31,31,74,946.53/ and upon presentation of the said cheques they got dishonoured for insufficient funds and even after issuance of notice the accused have not repaid the said amount. The accused Nos.2 and 5 have denied the case of the complainant stating that there does not exist legally recoverable debt or liability as on the date of cheque as the amount was not at all due as on the date of cheque or its presentation, the complainant was having control over their bank account and they got issued the cheques which can be make out from Ex.D.4/reply notice of accused to Ex.P.12/legal notice.
13. In support of the case the complainant got examined its authorized representative as PW.1 who reiterated the averments of complaint in his examination in 11 CC No.25456/2009 SCC.H-25 chief and further deposed that during the course of the trial accused Nos.3 and 4 approached the Hon'ble High Court of Karnataka in Crl.P.8510/2015 and 8511/2015 and got the complaint quashed against them. The PW.1 has got marked Exs.P.1 to P.21(a) to (d). The Ex.P.1 is the authorization letter, Exs.P.2 to 6 are the copies of five cheques, Exs.P.7 to P.11 are the copies of five Bank Endorsements, Ex.P.12 is the office copy of legal notice, Exs.P.13 to P.16 are the copies of four acknowledgments, Ex.P.17 is the copy of COP letter, Ex.P.18 is the two bank account extract, Ex.P.19 is the letter issued by the HDFC Bank, Ex.P.20 is the Audit Report and Ex.P.21 is the true copy of Bank Account statement of complainant for the period from 01.12.2008 to 31.12.2009, Exs.P.21(a) to (f) are relevant transactions.
14. The DW.1 deposed in the version that he is not responsible to the acts done by him, about due date, default notice, various litigation between accused and complainant, about discharge of accused 3 and 4 and conduct of complainant in not effectively prosecuting the complaint against said accused. In the crossexamination of DW.1 it is 12 CC No.25456/2009 SCC.H-25 elicited that for execution of Ex.D.1 bridge loan agreement the connected and ancillary documents such as account opening form, KYC documents and several cheques were to be signed with the cooperation of several people, accordingly he signed the cheques and accused No.2 was aware that there was need to him to sign the cheques for the purpose of bridge loan agreement, he is aware that the complainant company disbursed bridge loan under Ex.D.1, as per Ex.P.12 31.31 crores is reportedly due and rest of the amount have been paid by the accused No.1 to the complainant, DW.1 points out Exs.P.24(a) and P.24(b) affirming disbursal of bridge loan to the accused No.1 company, admits 5 entries at page 2 of Ex.P.24 and stated that they given instructions to Ex.D.4 which issued in reply to Ex.P.12.
15. The DW.2 in his evidence contended several points with regard to due date, the documents filed by complainant are inadmissible. In the crossexamination he admits about receipt of certain amounts under Ex.D.1, admission of part payment in his written submission filed u/Sec.313 of Cr.P.C. 13 CC No.25456/2009
SCC.H-25 and he was the responsible officer of A1 company alongwith A3 and A4.
16. Now, the reply notice dated 18.08.2009 marked at Ex.D.4 is the first defence taken out by the accused Nos.1, 2 and 5 and it is important document to be look into as to what was the defence of the accused immediately after the receipt of the legal notice/Ex.P.12 by the complainant which needs to be appreciated alongwith other evidence on record. As per Ex.D.4 and also in their evidence the accused did not dispute receipt of bridge loan as at Ex.D.4 in the first para it is clearly stated that 'under Ex.D.1 certain loans were disbursed to their company'. From this the disbursement of loan is clearly admitted by the accused. The accused in Ex.D.4 disputes only the due date of loan and the Axis bank Account was being under the control of complainant and as per clauses 4.2 and 4.4 of Ex.D.1 Loan Escrow Account was to be designated and execution of irrevocable authorization on 31.12.2008 and cheques were not issued by them.
14 CC No.25456/2009
SCC.H-25
17. Keeping in mind the evidence on record, the ingredients of Section 138 of the Negotiable Instruments Act is to be looked into. Sec.138 of the N.I. Act reads thus;
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [ a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both."
18. Section 139 of the Negotiable Instruments Act which is presumption needs to be drawn in favour of the complainant when he satisfies the ingredients of Section 138 of N.I. Act. Section 139 of N.I. Act reads thus; 15 CC No.25456/2009
SCC.H-25 "139. Presumption in favour of holder 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."
Therefore, the debt or other liability narrated in the above Sections has to be construed as existence of legally recoverable debt or liability so far as the accused is concerned.
19. As per settled principles of law laid down by the Hon'ble Apex court in Rangappa vs. Sri Mohan and many other cases once the accused admitted issuance of cheque by signing itself is sufficient to draw presumption in favour of the complainant and presumption u/Sec.139 includes there is legally recoverable debt or liability unless it is rebutted as it is rebuttal presumption. In this case the accused admitted issuance of cheque by signing then the presumption is in favour of the complainant as rightly argued by the counsel for the complainant. In AIR 2019 S.C. 1983 Basalingappa V. Mudibasappa, wherein Hon'ble Supreme Court thrown light upon 'how the probable defence can be raised, what is standard of proof, discharge of burden of proof, that the presumption mandated by Section 139 of the Act is an example of a reverse onus clause .....'. Whether the said 16 CC No.25456/2009 SCC.H-25 presumption is rebutted by the accused as required under law is to be looked into as it is rebuttable presumption and if the presumption is rebutted by preponderance of probabilities by leading separate evidence or with the materials placed by the complainant itself then the presumption raised in favour of the complainant stands rebutted and the burden of onus shifts again on the complainant as rightly pointed out by the counsel for the accused.
20. In order to appreciate whether there existed a legally recoverable debt or not and towards said legally recoverable debt in part payment the cheques in question issued or not. Further, what is the due date of loan? whether due date occurred or not, to consider these issues and arrive to conclusion the first document needs to be considered and appreciated is the bridge loan agreement dated 31.12.2008/Ex.D.1. The said document is not produced by the complainant in its evidence but it is got marked in the crossexamination of PW.1 as Ex.D.1 and said document is admitted document. It is the contention of the accused Nos.2 and 5 that the debt under Ex.D.1 as per clause 2.8 of said 17 CC No.25456/2009 SCC.H-25 Ex.D.1, the amount borrowed by accused No.1 would become due and payable only on the disbursal of long term loan by the Institutions and Banks. To appreciate the same in the Ex.D.1/bridge loan agreement, the clauses 2.3, 2.8, 11.1, 11.1(a), 11.1(I) needs to be looked into and appreciated which read as under;
"2.3 The Bridge loan shall be for a period not exceeding 1 (One) month from the date of disbursement of the Bridge Loan or the date of obtaining the disbursal of the Long Term Loans by the Borrower from the Institutions and Banks, whichever is earlier (hereinafter referred to as the "Bridge Loan Period"), 2.8 The Borrower shall pay to the Lender, the Bridge Loan alongwith the accrued interest immediately following the Bridge Loan period and in any case not later than 2 (Three) Business Days following the date of disbursal of the Long Term loans by the Institutions and Banks (hereinafter referred to as the "Due Date"), 11.1 If one or more of the events specified below happen(s), the Lender may, by a notice in writing to the Borrower, declare that the Secured Amounts to become be due and payable forthwith (hereinafter referred to as the "Event of Default");
11.1(a) Default has occurred in the payment of principle sums of the Bridge Loan and Interest on the Due Date;
11.1(I) If any Event of Default or any event which, after the notice, or lapse of time, or both, would constitute an Event of Default has happened 18 CC No.25456/2009 SCC.H-25 the Borrower shall, forthwith give notice thereof to the Lender ii writing specifying the nature of such Event of Default."
21. From careful reading of clauses 2.3 and 2.8 makes it clear that the bridge loan period is only for one month from the date of disbursement of bridge loan or the date of obtaining the disbursal of the Long Term Loans by the Borrower whichever earlier, it means one month or prior to it if the borrower gets the Long Term Loans. Keeping this in mind if clause 2.8 is read it is clearly states that the borrower agreed to pay the lender the bridge loan alongwith the secured interest immediately following the bridge loan period and in any case not later than three business days following the date of disbursal of the long term loan of the institutions/Banks. The clause 2.8 should not be read in isolation but it should be read alongwith clause 2.3 to get correct interpretation. As per clause 2.3 the parties have agreed that the bridge loan period shall be for a period of one month and the loan under bridge loan becomes due on the completion of 30th day of the following month and loan becomes due on 31st day of following month even in case 19 CC No.25456/2009 SCC.H-25 there is no disbursement of long term loans by the institutions or banks to the accused but if long term loans disbursed by the institutions or banks to the accused during the said one month period then the bridge loan borrowed by the accused would become payable within three business days following such disbursal by the institutions or banks. The clause 2.8 is to be read with clause 2.3 and thus clause 2.3 would operates immediately after completion of 30 days and thus the loan borrowed by the accused under bridge loan would become legally enforceable debt on 31 st day itself. The case of the accused is not that no bridge loan amount disbursed under Ex.D.1 on the said date or on which date it was disbursed and it is also not the case of accused that they paid the entire bridge loan amount which became due and there exists no due at all. When this being the case then as per Ex.D.1/bridge loan agreement clause 2.3 the loan becomes due immediately after one month i.e. the loan will become due on 31.01.2009 as under Ex.D.1 itself the bridge loan disbursed on the said date and there is no any contrary evidence by the accused in this regard that except the 20 CC No.25456/2009 SCC.H-25 contention of accused with regard to due date no occurred at all.
22. Further, under the Ex.D.1 the parties mutually agreed to the terms and conditions therein and hence as per said agreement there exists legally recoverable debt payable by the accused to the complainant. Further as per above interpretation the due date is 31.01.2009 and not as contended by the accused in Ex.D.4 at para 9 that 'loan is payable as per clause 2.3 therein only on the date of obtaining disbursal of the loan term loan and as the said long term loans have not yet been availed the bridge loans are in no manner due and as such there is no subsisting liability payable to your clients'. Further in Ex.D.4 at para 9 the accused at one instance contend that long term loans have not yet been availed but contrary to that at para 10 contend that 'your clients are aware that our clients have scrupulously ensured deposit of the sum of Rs.13.36 crores being the exact amount of Long term loans availed by the company from Institutions and Banks after your bridge loan in the said Axis Bank account which your clients have 21 CC No.25456/2009 SCC.H-25 transferred to themselves using their control over the account and that no other amounts are in any manner been disbursed to our clients and as such there is no further loan due for repayment as per the Bridge loan agreement dated 31 st Dec 2008'. Further the accused in Ex.D.4 at para 9 further contend that 'your clients are aware that their representative Mr Bobby Mustafa had as recently as 25 th July 2009 (copy annexed) mailed all the Institutions and Banks" seeking disbursal of the Long term loans promised to our clients so that they can repay your clients and as such your clients have chosen to embark on this path of intimidation merely to intimidate and harass our clients knowing fully well that there are no dues whatsoever...'. From the Ex.D.4 it is clear that the accused only to make allegations against the complainant pointing out clauses 4.2 and 4.4 of Ex.D.1 have stated as above which went against them proving that they clearly admitted the disbursal of loan but only dispute the due date and clearly state that there was no disbursal of long term loans from Institutions and Banks. In Ex.D.4 the accused deny that they issued cheques stating that the bank account was under the control of complainant itself and all 22 CC No.25456/2009 SCC.H-25 cheques were issued to banks only by the complainant's executives from their office which is contrary to the admission of DWs.1 and 2 that the DW.1 signed and handed over the cheques under Ex.D.1 to the complainant upon the instruction of the accused No.2 on behalf of accused No.1.
23. In the crossexamination of PW.1 several questions with regard to leading secondary evidence, registration of complainant company with RBI are taken up even though the question of registration with RBI was not taken up in Ex.D.4 by the accused. This court while dismissing the application filed by the accused No.2 u/Sec.91 Cr.P.C. on 02.08.2021 has observed that with regard to RBI registration the Hon'ble High Court in W.P.11482/2020 has given finding and hence the crossexamination on this issue is not considered and appreciated.
24. As far as the leading of secondary evidence is considered, no doubt the Exs.P.2 to P.11, P.13 to P.17 are the copies of cheques, bank endorsements, postal acknowledgments and COP, which are marked after allowing 23 CC No.25456/2009 SCC.H-25 the application filed by the complainant u/Sec.65(c) of Evidence Act. The accused has not challenged the said order passed by this court. But the accused contends that neither in the application for secondary evidence nor in the evidence of PW.1 it is clear when and how such loss of original documents occurred and when the loss was discovered and why it chose not even to move any process of law in respect of the loss. While allowing the application this court observed at last lines at para 9 of the order that '9........when the complainant has produced Xerox copies into the court alongwith original and this court or ministerial staff of the court have verified the Xerox with the originals and this court by relying upon those documents issued summons to the accused, now there is no bar for this court to permit the complainant to produce the secondary evidence and for this court to rely upon those documents subject to its genuineness and burden of proof'. It is clear that the accused have not challenged the said order passed by this court. The complainant filed the said application u/Sec.65(c) of Indian Evidence Act stating that at the time of presentation of complaint they produced original cheques and other 24 CC No.25456/2009 SCC.H-25 documents and this court after going through the said documents recorded sworn statement and issued process and registered criminal case and when the case posted for their evidence they searched for original documents but despite of their best efforts they could not trace the original documents. The said averments of the complainant comply Section 63 of Indian Evidence Act and as they produced original before this court and after comparing the same with the copies this court recorded the sworn statement which is also observed by this court in the order and further by filing application u/Sec.65(c) and stating that the original were lost and could not traced despite best efforts and on considering said statement the application filed u/Sec.65(c) came to be allowed, there is not need to lead separate evidence by the complainant. Further the crossexamination in this aspect also clearly throws focus on the aspects as to how loss occurred and what action they took in that regard. Therefore, the documents produced at Exs.P.2 to P.11, P.13 to P.17 are considered under secondary evidence.
25 CC No.25456/2009
SCC.H-25
25. If the crossexamination of PW.1 by accused is looked into much questions are put with regard to due date and as discussed above this court has come to the conclusion after interpretation of Ex.D.1 that the due date is 31.01.2009 only. Further there are questions put to PW.1 with regard to arbitration clause in Ex.D.1. In so far as the arbitration clause is considered, there is no bar under law to proceed under the negotiable instruments act when parties does not agree for arbitration as it is clear from Ex.D.3 and simultaneous proceedings also maintainable. Further as discussed above clause 11.1 requires only declaration that the default was committed by the accused and as per Ex.D.2 the same was declared and intimated to the accused and there is compliance of clause 11.1 of Ex.D.1 also. As per Ex.D.1 bridge loan and as per PW.1 the cheques were issued under clause 3.1(b) and were enforced as per clause 3.3 of Ex.D.1, which reads as under;
"3.1(b) Post dated cheques of the borrower to the lender for an aggregate amount equal to the bridge loan and the interest up to the due date; 3.3. The securities may be enforced by the Lender in the event the borrower defaults in the repayment of the bridge loan and the interest on the due date.' 26 CC No.25456/2009 SCC.H-25
26. As per above clauses the cheques were issued by the accused as security under Ex.D.1 and the DW.1 also admits that he did issue the cheques under Ex.D.1 to the complainant on the instruction of accused No.2 on behalf of accused No.1. As discussed above the secondary evidence permitted by this court as the originals were produced at the time of sworn statement and after perusal of said originals with the copies in the file by this court they were returned and hence the Exs.P.2 to P.11 and P.13 to P.17 are the copies of originals as required under Section 63 of Evidence Act and as the accused admitted issuance of cheques and they are the similar cheques now under question and as per evidence on record it is clear that the cheques in question are admitted by the accused as issued under Ex.D.1.
27. In the crossexamination of PW.1 the accused No.2 posed questions with regard to internal matters of complainant company on Ex.P.1, about Ex.D.1 even though it is admitted document. The said questions are not relevant as the scope of present complaint is limited and internal matters of the company on Ex.P.1 and other aspects are also not in 27 CC No.25456/2009 SCC.H-25 question to be considered as this is only complaint under negotiable instruments Act and as the Ex.D.1 is admitted document and hence the other questions with regard to said documents are also not relevant and hence the cross examination in this regard has no relevancy and needs no consideration.
28. The Ex.P.18 is the true copy of one bank account statement of complainant account (by oversight in the evidence mentioned as two bank account), which shows disbursement of bridge loan in favour of accused company on 01.01.2009 and as per PW.1 it also shows part repayment by the accused. The accused disputed the said document stating that it is not alongwith the certificate required under Bankers Books Evidence Act. The Ex.P.18 is the true copy of Bank account and it is marked without certificate and at the time of marking no such objections raised by the accused and hence now the accused cannot take objections to that effect. The complainant has produced Ex.P.24 which is similar statement produced at Ex.P.18 and hence Ex.P.18 (Ex.P.24) is considered in favour of the complainant as it proved the 28 CC No.25456/2009 SCC.H-25 disbursal of loan to the accused and when the accused himself as per Ex.D.4 and in the evidence admitted about disbursal of the bridge loan and hence in this back ground the Ex.P.18 is only a corelating document and it is also indirectly admitted by the accused by giving admissions about disbursal of bridge loan under Ex.D.1 and hence now the accused cannot go back and take contrary stand that Ex.P.18 is not genuine document. The Ex.P.19 is the letter issued by the complainant's bank mentioning the details of cheques and amount, even though the accused disputes the said document stating that it is also not alongwith certificate of Bank but as the DWs.1 and 2 admitted about issuance of cheques and hence as per the evidence of PW.2 they were dishonoured and hence the similar details are appearing in Ex.P.19 and hence the Ex.P.19 is considered in favour of complainant's case and complainant proved that the cheques in question were presented and got dishonoured and the same details are mentioned in said letter apart from the Bank return memos. Further much questions are put to PW.1 with regard to mistake in the name of complainant's company in the cheques in question and about signature appearing 29 CC No.25456/2009 SCC.H-25 thereon belongs to A5 but they have no relevancy as the endorsements given by the bank at Exs.P.7 to P.11 shows that cheques were returned for insufficiency of funds and not for any other reasons and further as per the admission of DW.1 he only signed on cheques issued to the complainant and as per the conclusion of this court the said cheques are the cheques in question which are also affirmed by the evidence of PW.2. The Ex.P.20 is the true copy of auditor's report with balance sheet pertaining to the complainant company which is produced to show advances even though the accused denied the said document but not lead any contrary evidence. The Ex.P.21 is the true copy of the bank account of complainant with certificate as per Ex.P.26. Ex.P.21(a) is the relevant entry showing the disbursement of bridge loan in favour of accused and even the accused admitted disbursal of bridge loan. Ex.P.21(b) is the relevant transaction dated 7.1.2009 regarding deposit of cheque No:7210 and Exs.P.21(c) is the relevant transactions for depositing the cheques in question and its dishonour as per Ex.P.21(d). The Exs.P.21(e) & (f) relevant entries about part payment by the accused No.1, even though the accused 30 CC No.25456/2009 SCC.H-25 denied the Ex.P.21 but not lead any contrary evidence and said document is supports the case of the complainant as it is also proved by the evidence of PW.2 and by producing the said documents the case of the complainant stands proved in this regard.
29. The Exs.D.5 to D.7 are got marked in the cross examination of PW.1 even though the witness did not confirm about contents of said documents but as he recognized them. By confronting said documents the accused contended that the complainant company was not registered with the RBI even at the time of Exs.D.5 to D.7 also but issue of registration with RBI is already discussed above and hence the Exs.D.5 to D.7 are not relevant to the present case. The Ex.D.8 is the articles of association of accused No.1 company, which is not required to be appreciated as there is no issue in this regard and the scope of complaint is limited. The Ex.D.9 is the true copy of investment agreement dated 01.12.2004 of accused No.1 company but it is certified as true copy by the accused No.2 who clearly stated in the application filed by accused No.5 u/Sec.65 Evidence Act that he has no certified 31 CC No.25456/2009 SCC.H-25 or true copies of documents sought therein and hence the Ex.D.9 is not considered as it is certified by the accused No.2 contrary to his own statement and moreover why the said document is produced is not explained. The certified copy of order passed in C.P.No:68/2009 is marked at Ex.D.10 and it is admitted fact that the accused No.1 ordered to be wind up. The contention of the accused is that the winding up petition filed in the year 2009 and therefore the winding up date backs to the date of presentation of petition. Admittedly the cheques issued by the accused Nos.2, 5 on behalf of accused No.1 and hence the prosecution is not barred against them for the present offence. The Exs.D.11 and D.12 IT return copies of accused No.5 are produced, they are not relevant to the present complaint as the present case is not of personal liability of accused for having issued cheuqes in question which bounced.
30. The PW.2 has deposed in support of the case of the complainant about presenting Exs.P.2 to P.6 on which date there was no sufficient funds in the account of accused and clearance of Ex.P.25, confirming the signature of accused 32 CC No.25456/2009 SCC.H-25 No.5 as per Ex.P.23/certified true copy of account opening form with KYC documents annexed with Ex.P.27/board resolution. In the crossexamination many questions put with regard to genuineness of Exs.P.23 to P.25 but nothing worth is elicited to disprove his evidence with regard to said documents and further the accused contend that the said documents are not produced alongwith certificate as required under law but as they are true copies and the PW.2 is examined and hence they are supported by the evidence of PW.2. Further as the DW.1 admitted about signing the cheques and its delivery and hence the other questions with regard to account was being controlled by the complainant is not helpful to the accused in their defence as it remained unproved as no documentary evidence lead by the accused except the oral testimony. Though the accused tried to get mark the copies and some true copies of emails and other documents attested by accused No.2 they were rejected as they were alleged to have attested by the accused No.2 himself contrary to the contention of application filed by the accused No.5 u/Sec.91 Cr.P.C. stating that the accused No.2 did not has any certified or true copies with him. 33 CC No.25456/2009
SCC.H-25
31. By leading the evidence oral as well as documentary as discussed above the complainant has proved its case as alleged against the accused Nos.1, 2 and 5 who have utterly failed to rebut the presumption available to the complainant by evidence of preponderance of probabilities.
32. The counsel for the complainant argued that the complainant and accused No1 both are companies and accused No.1 represented by accused No.2 approached the complainant for financial assistance as accused No.1 was under financial strain. The complainant agreed to provide the financial assistance in terms of the Bridge Loan Agreement dated 31.12.2008 (Ex.D.1) subjected to terms and conditions mentioned therein and one such requirement was that accused No.1 was required to secure the bridge loan by issue of cheques. After compliance of all terms and conditions of Ex.D.1 the bridge loan released by the complainant on 01.01.2009 as per Ex.P.24 which was appropriated on the same day as could be seen from Ex.P.24 for its own purposes and hence as per Ex.D.1 the accused became liable to return 34 CC No.25456/2009 SCC.H-25 the loan amount due on or before 31.1.2009 as per clauses 2.3, 2.8 and 3.3. As on 31.1.2009 the accused No.1 was liable to repay to the complainant a sum of Rs.31,31,74,946.53/. As per the Ex.D.1 and towards part repayment of the principal amount of loan the accused No.1 issued cheques in question which on presentation on 01.07.2009 through their banker got dishonoured for the reason of insufficient funds as per endorsement of bank dated 2.7.2009 and thereafter the complainant issued legal notice/Ex.P.12 through registered post which served on accused Nos.1, 2 and 5 on 03.8.2009 even then the accused failed to comply with it. The complainant after filing complaint this court took cognizance and registered case, later the accused Nos.3 and 4 have been dropped. The complainant has got examined PWs.1 and 2 and got marked Exs.P.1 to P.28 to support the case. After recording statement of accused, the accused have lead their evidence as DWs.1 and 2 and got marked Exs.D.1 to 13. As per Ex.D.1 there exists a legally enforceable debt which is liable to be repaid by the accused No.1, under Ex.D.1 the accused No.1 issued five cheques in question at Exs.P.2 to P.6 which 35 CC No.25456/2009 SCC.H-25 presented within stipulated period of six months and statutory notice of dishonour issued as per Ex.P.12 but accused Nos.1, 2 and 5 have failed to pay the amount covered under cheques and therefore there is compliance of Section 138 of NI Act. The DWs.1 and 2 in their evidence have categorically admitted that the accused No.1 received the bridge loan amount and issuance of cheque signed by accused No.5 on behalf of accused No.1 under intimation to accused No.2 and also admitted that the accused No.1 not repaid the bridge loan and admitted receipt of Ex.P.12 and produced Ex.D.4/reply and from all this admissions the ingredients and requirements of Sections 118 and 139 of the NI Act are fulfilled. Further as the accused No.1 is a company incorporated under the Companies Act 1956, the accused No.2 was being the Managing Director of the accused No.1 and the accused No.5 was being the Deputy General Manager of the accused No.1 who is also signatory to the cheques Exs.P.2 to P.6, the DW.1 deposed that he signed the cheques in question on behalf of accused No.1 and accused No.2 was aware of issue of cheques signed by accused No.5 that issue of cheques enabled the transaction under the Ex.D.1 and the 36 CC No.25456/2009 SCC.H-25 DW.1 was aware of the bridge loan agreement and fully cooperated for its execution and implementation and the DW.2 admitted that he signed Ex.D.1 and no steps were taken to prevent commission of the offence under Section 138 NI Act and from all this makes it clear fulfillment of ingredients and requirements of Section 141 of NI Act. The accused have failed to rebut the presumption available to the complainant but taken untenable defeces which already rejected by this court by the orders passed from time to time. Therefore, the offence of dishonour of cheques in question having been issued by the accused No.1 company the accused Nos.2 and 5 are also liable to be held guilty for the offence alleged. This argument of the counsel for the complainant is acceptable in support of the case of the complainant as per the appreciation of evidence discussed above.
33. The counsel for the complainant has relied upon following decisions in support of the complaint; (1) National Small Industries Corportaion Limited Vs. Harmeet Singh Paintal (2010) 3 SCC 330 (para 25) 37 CC No.25456/2009 SCC.H-25 "Vicarious liability Section 141 of NI Act The criminal liability can be fastened only on those who, at the time of the commission of the offence, where in charge of and were responsible for the conduct of the business of the company. If accused is Managing Director or Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. If accused is a Director or an Officer of a company who signed the cheques on behalf the company then also it is not necessary to make specific averment in complaint."
(2) Dale & Carrington Investment (P) Limited and Antoher V. P.K. Prathapan and Others reported in (2005) 1 SCC 212 "Authorization to the representative of the complainant. The company being an incorporeal juristic person, acts through its Board of Directors and the Board of Directors takes decisions on the activities of the company by adopting resolutions in its meetings as per the memorandum and articles of the company. The board of Directors of the complainant company will have to pass a resolution whereby the person who is likely to act as the de facto complainant would have to be granted the authority to do so.
Substitution is permissible in terms of Section 302 of Cr.P.C."
(3) Sri.Krishna Agencies v. State of Andhra Pradesh & Another, (2009) 1 SCC 69 (Para 7):
"No bar for simultaneous continuance of criminal proceedings for offence under Section 138 of NI Act and civil proceeding for arbitration in terms of the Arbitration and Conciliation Act, 1996."38 CC No.25456/2009
SCC.H-25 (4) Sripati Singh (since deceased) Through His son Gaurav Singh v. State of Jharkhand & Avnother Criminal Appeal No.1269 1270 of 2021 [Arising out of SLP (Criminal) No.252 253/2020] dated 28.10.2021 (Paras 9, 12, 14, 16 to 22) "Cheque issued as security is liable for prosecution under Section 138 of the NI Act." (5) Sunil Todi & Others v. State of Gujarat & Another Criminal Appeal No.14461447 of 2021 dated 03.12.2021 (Para 17(I), 25,
30) "The term debt includes a sum of money promised to be paid on a future date by reason of a present obligation. If the sum payable depends on a contingent event, then it takes the color of a debt only after the contingency has occurred. Section 138 of NI Act covers a situation where cheque is drawn for a debt that is incurred before the cheque is encashed. The legal requirement is that a cheque must be drawn by a person for the payment of money to another for the discharge, in whole or in part, of any debt or other liability. A cheque may be issued to facilitate a commercial transaction between the parties. Where, acting upon the underlying purpose, a commercial arrangement between the parties has fructified. The presentation of the cheque upon the failure of the drawer to pay, is a consequence which would be within the contemplation of the drawer. The cheque, in other words, would in such an instance mature for presentation and in 39 CC No.25456/2009 SCC.H-25 substance and in effect, is towards a legally enforceable debt or liability."
(6) P.Mohanraj and Others v. Shah Brothers Ispat Private Limited 2021 SCC Online SC 152 (Civil Appeal No.10355 of 2018 decided on March 1, 2021) "Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 and its effect on the present proceedings."
(7) APS Forex Services Pvt Ltd. V. Shakti International Fashion Linkers & Ors Criminal Appeal No.272 of 2020 (Para 7) "Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence."
34. I have perused the above decisions and they are aptly applicable to the present case and supports the case of the complainant. The counsel for the complainant also produced order dated 11.04.2019 in Crl.P.No:1895/2019 passed by the Hon'ble High Court of Karnataka wherein the Hon'ble H.C. interpreted the bridge loan clauses 2.3, 2.8 and the due due, clause 11.1(a) and imposed cost of Rs.2 lakhs. 40 CC No.25456/2009
SCC.H-25 Further produced the order dated 06.01.2020 in SLP (Crl.) No:11394/2019 passed by the Hon'ble Supreme Court of India, wherein the Apex court while dismissing the SLP clarified that the observations contained in the impugned order dated 11.04.2019 shall not affect the merits of the contentions of the accused at the trial and order for payment of cost was also deleted. Further produced order dated 25.2.2021 in M.A.No:316/2021 in SLP (Crl.) No:11394/2019 passed by the Hon'ble Supreme Court of India, on the application filed by the complainant in the above case, aggrieved by the observations of the Hon'ble Supreme Court in the order dated 06.01.2020. While observing that retaining the observations of the High Court would virtually conclude the trial, clarification was not recalled. Further, the costs were retained and the order for deletion of the costs was recalled. Further, time limit was fixed for completion of trial by this court, by a period of three months,which was modified to 31.12.2021 as per order dated 12.07.2021. Further produced order dated 22.4.2021 in OSA 1/2021 passed by the Hon'ble High Court of Karnataka (para 20) wherein it is observed by the Hon'ble D.B. that India Awake for 41 CC No.25456/2009 SCC.H-25 Transparency (IAT) which was represented by accused No.2 as an Advocate sought to file proceeding after proceeding against the complainant out of vengeance and to disrupt the functioning of the complainant. Accused No.2 was an authorized signatory of IAT in an earlier proceeding before the learned single judge of the Hon'ble High Court. These orders show the conduct of the accused No.2.
35. The counsel for accused No.2 has argued (which is also adopted by counsel for accused No.5) that there cannot be any offence u/Sec.138 of NI Act in respect of a dishonour of a cheque dated 03.01.2009 when the complaint admits loan to be due for repayment only on 31.1.2009 and as such there was no money due and payable when the cheque was issued on 03.01.2009 and hence the presumption stands rebutted by the accused. The documents produced at Exs.P.2 to P.6 copies and other documents produced are all inadmissible in evidence as none of the documents were compliant with requirements of Section 65B of Evidence Act and Section 2A of the Bankers Book Evidence Act. The accused Nos.2 and 5 are not persons covered under Section 42 CC No.25456/2009 SCC.H-25 141 of the NI Act in respect of A1 company and cannot be held vicariously liable for any offence under Section 138 of NI Act. There is non compliance of the requirements of Section 202 of Cr.P.C. in respect of accused living outside the regular territorial jurisdiction of the court. The evidence of PWs.1 and 2 is not reliable. Relying upon the decision of Apex court in the case of Rangappa Vs. Sri. Mohan (2010(1) SC 441 submits the presumption is rebuttable one. Further relied upon the following decisions;
(1) In Ashok Yeshwant Badave Vs. Surendra Madhavrao Nighojakar (2001) 3 SCC 726, wherein Hon'ble Apex court considered various provisions of NI Act i.e. Sections 6, 9, 138, 139 and 140 and discussed above post dated cheque, bill of exchange and observed that the amount of the cheque should be due on the date of the cheque as otherwise the core ingredient of S.138 NI Act offence will not arise. (2) K.Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 Hon'ble Apex Court held that the drawing of the cheque is a necessary condition for the offence and as per the provisions of S.138 of NI Act 1881 the cheque has to be in respect of enforceable liability when drawn. If there is no enforceable 43 CC No.25456/2009 SCC.H-25 liability when the cheque is drawn even the 1 st ingredient of the offence will not exist.
(3) Int he case of Sampelly Satyanarayana Rao Vs. Indian Renewable Energy 2016(10 SCC 458 held that, ... once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act. If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise. (4) In Sunil Todi 2021 SCC Online SC 1174 held that, wherein Hon'ble Apex court approved the decision in the case of Sampelly and held that, ....if on the date of the cheque a liability or debt exists or the amount has become enforceable, Section 138 would stand attracted and not otherwise. (5) In Sripathi Singh 2021 SCC online SC 1002 the Hon'ble Apex Court held that, the cheques were issued as security cheques and not towards discharge of any debt.
36. The counsel for accused further argued with regard to predated cheque, event of default notice served after cheque claimed as dishonoured, winding up of company 44 CC No.25456/2009 SCC.H-25 relates back to the date of presentation of such petition and hence accused are not responsible as they were discharged from the offices. As far as orders on secondary evidence and considering secondary evidence documents marked the discussion is made above. In so far as compliance of Section 202 of Cr.P.C. is considered, this court by inquiring into the matter and recording sworn statement has complied Section 202 of Cr.P.C. and the Hon'ble H.C. in Cr.P.No:1895/2019 dated 11.04.2019 observed about compliance of Section 202 Cr.P.C.. Further, I have perused the decision of Hon'ble Apex court in Ashok Yeshwant Badave, and it is no way helpful to the accused as the facts and circumstances of the said case and this case are different. The second decision in the case of K.Bhaskaran Vs. Sankaran Vaidhyan Balan and Anr., wherein the Hon'ble Apex court dealt with jurisdiction issue and hence it is not helpful to the accused. The decision in Rangappa Vs. Mohan as discussed above is aptly applicable to the case of complainant in drawing the presumption and as per the evidence on record the accused have failed to rebut the presumption. The decision in Sampelly Styanarayana Rao Vs. Indian Renewable Energy Development Agency 45 CC No.25456/2009 SCC.H-25 Limited, the Hon'ble Apex court was dealing with the quash petition and hence the facts and circumstances of that case and this case are different. In this case it is clear from the evidence that on the date of presentation of cheques in question the loan became due and hence the entire arguments of the counsel for the accused is not helpful to the defence of the accused as the accused have utterly failed to prove their defence who themselves admitted the due repayment of bridge loan and issue of cheques.
37. On overall consideration of the materials placed on record by both parties, as per the discussion made above and the appreciation of evidence and considering the arguments of counsel for the complainant this court holds that by leading oral and documentary evidence the complainant proved that there exists legally recoverable debt which fell due, the cheques in question issued for repayment and on presentment they got dishonoured and notice issued which is not complied by accused Nos.1, 2 and 5 and they complied Section 138 of NI Act. Therefore, this court holds that the complainant has proved its case and proved the 46 CC No.25456/2009 SCC.H-25 points 1 and 2 in its favour and accordingly these points are answered in the affirmative.
38. Point No.3: The memo and submission filed by the counsel for accused No.5 seeking eschewing the affidavit of PW.2 are still pending and needs finding, hence they are taken up for consideration. The counsel for the accused No.5 filed application u/Sec.91 Cr.P.C. on 30.8.2021 seeking direction to the Axis Bank representative to produce the records set out in the application, which came to be allowed on 28.10.2021 and directed the PW.2 to produce the records sought in the application. On 20.11.2021 the PW.2 has filed affidavit as further evidence, after taking it on record order passed to restricting the said affidavit only for nonproduction of documents sought by accused No.5. The counsel for accused No.5 filed submission of accused No.5 in respect of affidavit of PW.2 stating that the claimed affidavit and contents thereof are to be wholly disregarded and eschewed as Axis Bank is not summoned to tender any evidence by affidavit in the case 47 CC No.25456/2009 SCC.H-25 and in further act of mischief Axis Bank has sought to present documents unrelated to the 9 sets of documents sought from it. Further the counsel for the accused No.5 filed memo seeking to eschew and for directions stating that the court has taken the documents tendered on record not noting that many of the documents were not documents that were even summoned by the court vide order dated 28.10.2021, such documents cannot be taken on record of the case and are to be eschewed and direct the bank to return the originals to the court. Perused the application filed by the accused No.5 u/Sec.91 Cr.P.C., which is allowed and accordingly the direction issued to the Axis Bank to produce the documents sought in the said application. The affidavit filed by PW.2 states that they produced the documents submitted alongwith the account opening form listed in the affidavit at
(a) to (l) and stated that no Power of attorney is received by the Bank, further stated that the documents such as (a) Acknowledgement for cheque book, (b) Intimation sent to A1 company, (c) Copies of other documents pertaining to debits and credits in the account of M/s Subhiksha Trading Services Ltd from January 2009 to July 2009 including deposit slips 48 CC No.25456/2009 SCC.H-25 and cheques instructions for electronic payment could not be submitted since documents asked are for more than 10 years and account is closed, the concerned acknowledgments/letters/instructions for electronic payment could not be retrieved, further stated during the period 2008 and 2009 Axis Bank Limited had no centralized backup of e mails since it was decentralized at individual compute systems and as and when the compute systems are non usable, said systems were disposed off after deleting the backup emails and hence the Emails sent by Axis Bank Limited with respect to Account bearing No:514010200001922 cannot be retrieved and produced and stated that they found the current A/c mentioned therein of accused No.1 company. In the affidavit at para 3 there is other documents i.e. cheques which are not the documents summoned. Further even though the true copies of documents mentioned in the affidavit are produced but as they are not got marked in the evidence by either party and let for crossexamination, hence they cannot not be looked into and appreciated and hence question of eschewing the said affidavit does not arise as the affidavit restricted to 49 CC No.25456/2009 SCC.H-25 consider the aspect as to for what reasons the other documents sought by accused No.5 are not produced and accordingly the said memo and application filed by accused No.5 seeking eschew the affidavit of Pw.2 are stands disposed off.
39. With regard to punishment is considered, the case is of more than 12 years old filed for dishonour of cheques and as per Section 80 of NI Act interest provided @ 18% per annum from the date of cheque till the date of realization. On appreciation of entire evidence on record the complainant has proved its case. Considering the conduct of accused throughout trial in filing one or the other applications and dragging the case till the dead line given by the Hon'ble Supreme Court and maximum punishment needs to be imposed on the accused Nos.1, 2 and 5 to meet the interest of justice.
40. For the reasons and discussions and findings given to above point Nos.1 to 2, this court proceeds to pass the following:
50 CC No.25456/2009
SCC.H-25 ORDER By exercising the powers conferred u/Sec.255(2) Cr.P.C the accused Nos.1, 2 and 5 are convicted for the offence punishable under Section 138 of Negotiable Instruments Act and sentenced to undergo S.I. for a period of two years and shall pay a fine of Rs.62,63,59,893/ (Rupees Sixty Two Crores Sixty Three Lakhs Fifty Nine Thousand Eight Hundred Ninety Three).
Out of the fine amount the complainant is entitled for a sum of Rs.62,63,49,893/ (Rupees Sixty Two Crores Sixty Three Lakhs Forty Nine Thousand Eight Hundred Ninety Three only) as compensation under Section 357 Cr.P.C. and balance of Rs.10,000/ shall be paid to the State as fine.51 CC No.25456/2009
SCC.H-25 Office is directed to supply a free copy of this judgment to the accused forthwith.
(Typed by me directly on the laptop, computerized by the Stenographer, then corrected, signed and then pronounced in open court on this the 31st day of December 2021.) (Miss. B.T.ANNAPOORNESHWARI) XXI Addl.C.M.M & XXIII ASCJ, Bangalore.
ANNEXURE Witnesses examined on behalf of the Complainant:
PW.1 : Sri.Rajesh Ramaiah PW.2 : Sri.Ramesh
Witnesses examined on behalf of the Accused:
DW.1: Sri.K.Balasumbramanian DW.2: Sri.R.Subramanian
Documents marked on behalf of the Complainant:
Ex.P.1: Authorization letter
Exs.P.2 to 6: Copies of five cheques,
Exs.P.7 to
P.11: Copies of five Bank Endorsements
52 CC No.25456/2009
SCC.H-25
Ex.P.12: Office copy of legal notice
Exs.P.13 to
P.16: Copies of four acknowledgments
Ex.P.17: Copy of COP letter
Ex.P.18: Bank account extract
Ex.P.19: Letter issued by the HDFC Bank
Ex.P.20: True copy of Audit Report
Ex.P.21: True copy of Bank Account statement
Exs.P.21(a)to(f): Relevant entries.
Documents marked on behalf of the Accused:
Ex.D.1: Copy of Bridge loan agreement dated 31.12.2008 Ex.D.2: Copy of Event of Default notice Ex.D.3: Copy of Letter dated 14.07.2009 to Ex.D.2 Ex.D.4: Copy of reply dated 18.08.2009 Exs.D.5 &D.6: Copies of Audit Reports of complainant company Ex.D.7: Copy of Board's report Ex.D.8: Certified copy of Articles of Association of A1 company Ex.D.9: True copy of Investment agreement dated 01.12.2004 Ex.D.10: Certified copy of orders passed in C.A.No.68 of 2009 and connected petitions by Hon'ble Madras H.C. 53 CC No.25456/2009 SCC.H-25 Exs.D.11 & D.12: Tax returns Exs.D.13 & D.14: Certified copies of annual returns of complainant company Sd/ (Miss. B.T.ANNAPOORNESHWARI) XXI Addl.C.M.M & XXIII ASCJ, Bangalore.54 CC No.25456/2009
SCC.H-25 31.12.2021 JUDGMENT PRONOUNCED IN OPEN COURT VIDE SEPARATE ORDER ORDER By exercising the powers conferred u/Sec.255(2) Cr.P.C the accused Nos.1, 2 and 5 are convicted for the offence punishable under Section 138 of Negotiable Instruments Act and sentenced to undergo S.I. for a period of two years and shall pay a fine of Rs.62,63,59,893/ (Rupees Sixty Two Crores 55 CC No.25456/2009 SCC.H-25 Sixty Three Lakhs Fifty Nine Thousand Eight Hundred Ninety Three).
Out of the fine amount the complainant is entitled for a sum of Rs.62,63,49,893/ (Rupees Sixty Two Crores Sixty Three Lakhs Forty Nine Thousand Eight Hundred Ninety Three only) as compensation under Section 357 Cr.P.C. and balance of Rs.10,000/ shall be paid to the State as fine.
Office is directed to supply a free copy of this judgment to the accused forthwith.
XXI A.C.M.M. & XXIII ASCJ Bangalore