Bangalore District Court
Essilor India Private Limited vs Mr. Ashok Rao on 7 March, 2023
KABC0B0010312021
IN THE COURT OF THE XVII ADDL. JUDGE, COURT OF
SMALL CAUSES &
ADDL. CHIEF METROPOLITAN MAGISTRATE,
MAYO HALL UNIT, BENGALURU (SCCH-21).
Dated: This the 7th Day of March 2023
PRESENT: Sri. RAJESH M. KAMATE, B.Com., LL.B(Spl.)
XVII ADDL. JUDGE, Court of Small
Causes & ACMM, Bengaluru.
C.C. No.57165/2019
Complainant/s : Essilor India Private Limited,
Prestige Trade Tower,10th Floor,
#46, Palace Road, High Grounds,
Sampangiramanagar,
Bengaluru-560001.
Represented by its SPA Holder
Mr. Chandan Shop,
S/o. Shop Shashi Kumar,
Aged about 38 years,
(By Sri. S.N.R., Advocate)
V/s.
Accused/s : Mr. Ashok Rao,
Proprietor,
Rao Associates,
RS No.AJ-242, TS No.298AJ,
Near Syndicate Bank,
Opposite to Girias Showroom,
Kadri Road, Mangalore,
Karnataka-575003.
(By Sri. H.M.A., Advocate)
SCCH-21 2 C.C. No.: 57165/2019
JUDGMENT
The accused in this case is tried for the offence punishable under Section 138 of Negotiable Instrument Act 1881, on the complaint of the complainant.
2. The summary of the complainant's case is that:
The accused has purchased the optical lenses from the complainant and towards the discharge of the outstanding amount, the accused issued two cheques bearing Nos.258772, 215251 dated 19.08.2019 for Rs.39,60,026/- and 97,29,561/- drawn on State Bank of India, Mallikatta Branch, Mangaluru, assuring that the cheques would be honored if presented for the payment. The complainant presented the said cheques for encashment through its banker M/s. Citi Bank N.A., M.G. Road branch, Bengaluru, on 19.08.2019. But the said cheques came to be dishonored on the ground of 'Account closed' on 05.09.2019. Thereafter on 19.09.2019, the complainant got issued legal notice through RPAD demanding for repayment of the cheque amount within 15 days from the date of receipt of the notice. The notice sent through RPAD was served to the accused on 21.09.2019. The accused has not paid the amount. Therefore, this complaint is filed on 18.10.2019.
3. On filing of the complaint, the cognizance was taken for the offence punishable under section 138 of N.I. Act and sworn statement was recorded. As there was sufficient ground to proceed further, a criminal case has been registered against the accused and he was summoned. The SCCH-21 3 C.C. No.: 57165/2019 substance of accusation is orally stated to the accused and his plea was recorded. The accused pleaded not guilty and submitted that he has defence to make.
4. In support of the complainant's case, the sworn statement of the earlier Power of Attorney holder of the complainant during the pre-summoning stage is considered as evidence of the complainant and he got marked Ex.P1 to 9 documents and new Power of Attorney holder got examined himself as PW.2 and got marked documents as per Ex.P10 to
36. The statement of the accused is recorded under Section 313 of Cr.P.C and his answers were recorded. The accused has got examined himself as DW.1 and got marked Ex.D4 to 6 documents and by confront to PW.1 got marked documents as per Ex.D1 to D3.
5. Heard the arguments.
6. The points that arise for my consideration are:
1. Whether the complainant proves that it has complied the ingredients of Section 138 of N.I. Act in order to constitute an offence?
2. Whether the complainant further proves that accused have committed an offence punishable under Section 138 of N.I. Act 1881?
3. What order?
7. My answer to the above points is as follows:
Point No.1 : In the Affirmative,
SCCH-21 4 C.C. No.: 57165/2019
Point No.2: In the Affirmative,
Point No.3 : As per final order for
the following:
REASONS
8. POINT No.1: In order to constitute an offence under Section 138 of N.I. Act, the cheque shall be presented to the bank within a period of 3 months from its date. On its dishonor, the drawer or holder of the cheque as the case may be shall cause demand notice within 30 days from the date of dishonor, demanding to repay within 15 days from the date of service of the notice. If the drawer of the cheque fails to repay the amount mentioned in the cheque within 15 days from the date of service of notice, cause of action arises for filing the complaint.
9. The sworn statement of the complainant filed by way of affidavit during the pre-summoning stage is considered as the evidence of the complainant. In the affidavit, the complainant has testified regarding the supply of products, issuance of cheques, issuance of demand notice and also failure of the accused to pay the cheque amount. The complainant has produced cheques bearing Nos.258772, 215251 dated 19.08.2019 for Rs.39,60,026/- and 97,29,561/- drawn on State Bank of India, Mallikatta Branch, Mangaluru, as per Ex.P1 and 2. Ex.P5 and 6 are the endorsements issued by the bank stating dishonor of Ex.P1 and 2 cheques and it shows that the said cheques were dishonored for 'Account closed'. Ex.P7 is the office copy of legal notice dated 19.09.2019. Ex.P8 is the postal receipt for SCCH-21 5 C.C. No.: 57165/2019 having sent notice to the accused and Ex.P9 is the postal acknowledgment evidencing the service of notice to the accused.
10. In this case on perusal of documents produced by the complainant, Ex.P1 and 2 are the cheques dated 19.08.2019. Ex.P5 and 6 shows that cheques in question were dishonored on 05.09.2019. As per Ex.P5 and 6, it appears that the cheques were presented within three months from the date of issuance of cheques. The notice is issued within the statutory period of time as per Ex.P7 on 19.09.2019 and notice issued to the accused was served on 21.09.2019 as per Ex.P9 postal acknowledgment. The cause of action for filing the complaint arose on 07.10.2019. The complainant has filed this complaint on 18.10.2019 i.e. within 30 days from the date of arisal of the cause of action.
11. Therefore, in view of my discussion, I am of the opinion that the complainant has complied all the mandatory requirements of Section 138 and 142 of N.I. Act. Accordingly, I answer Point No.1 in the Affirmative.
12. Point No.2: In this point the burden is on the complainant to prove that the accused have committed an offence under section 138 of N.I. Act by issuing cheques.
13. As discussed at Point No.1, the complainant has complied all the mandatory requirements of Section 138 and 142 of N.I. Act.
SCCH-21 6 C.C. No.: 57165/201914. Now, it is the case of the complainant company that they are in business of processing and distributing ophthalmic lenses and equipments and allied products in both domestic and international markets. During the course of business the accused Ashok Rao, proprietor of Rao Associates who were engaged in the distribution of optical and contact lenses approached the complainant for the business. Thereafter, he used to place orders and complainant supplied the products towards the business and towards continuation of business, both the complainant and accused have also entered into an agreement for smooth running of their business and as per the agreement the complainant used to supply the goods upon the orders placed by the accused. Whereas the accused towards partial discharge of his debt to the complainant company in the year 2019 has issued two cheques bearing No.258772 dated 19.08.2019 for an amount of Rs.39,60,026/- and another cheque bearing No.215251 dated 19.08.2019 for an amount of Rs.97,29,561/- towards the purchase order placed by him for both Mangaluru and Hubli branch and in all he was having total debt for an amount of Rs.1,20,93,215/- and in order to repay the same the accused has issued both these cheques. Thereafter the complainant company presented the cheques to the Citi Bank N.A. M.G. Road, Bengaluru on 19.08.2019, but the same were returned with an endorsement as account closed on 05.09.2019 and thereafter on 19.09.2019 the complainant has got issued demand notice for payment of the cheque amount and the same has been served on 21.09.2019, but inspite of which the accused has SCCH-21 7 C.C. No.: 57165/2019 not made any payment and being constrained by the same, the complainant has filed the present complaint against the accused u/s.138 of N.I. Act and also reply notice has been given by the accused on 19.10.2019 after the statutory reply which is also produced by the accused.
15. In support of the case the complainant has examined PW.1 Chandan Shop and got marked Ex.P1 & 9 and also has examined PW.2 and got marked Ex.P10 to 36. Per contra in defence the accused has himself has got examined as DW.1 and got marked Ex.D1 to 6.
16. Now it is the main defence of the accused that in support of the case the complainant has produced special POA at Ex.P10 but there is no board resolution or any other document in support of the same to prove that the complainant has been examined as PW.1 and 2 by the complainant company through their duly authorised person and on this ground this complaint is liable to be dismissed. On perusal of documentary evidence it can be seen that the document of power of attorney is produced by the complainant at Ex.P10 through PW.2 and also he has been cross examined by the accused counsel in which he has admitted the special power of attorney is given by Mr.N.S. Raghava and the same is duly signed by Raghavan but words are incomplete and further in the cross he has also admitted the letter power of attorney is pertaining to the year 2021 as per Ex.P10 and Ex.P12 is the another special power of attorney which are executed in their favour without resolution. Further, the accused counsel has argued that no SCCH-21 8 C.C. No.: 57165/2019 resolution is produced before the court to prove that PW.2 was duly authorised to conduct the case by the complainant company. Whereas, on perusal of the document at Ex.P10 and 12 which are the special power of attorney and out of which Ex.P10 is dated 16.06.2010 and Ex.P12 is in the year 2021. but, the said power of attorney are in the name of Pw.2 executed by N.S. Raghavan and only because no resolution is produced by the accused counsel itself is not sufficient to come to conclusion that the company has not authorised the representative to conduct the case and the said fact of non- production of board resolution even though Ex.P10 and 12 special power of attorney are produced before this court, it could be seen that the same witness was having the personal knowledge about the case before this court and the knowledge of the case has been clearly stated by him which itself is sufficient to come to conclusion that personal knowledge of the authorised representative is with respect to the present case and further the said person is working in several departments and as such inspite of which the evidence given by him on the basis of power of attorney at Ex.P10 and 12 are sufficient to come to conclusion that the said person is duly authorised by the complainant to conduct the case and on this count the court cannot dismiss the entire complaint by holding that there is no board resolution.
17. Apart from it the complainant counsel has also relied upon citation reported in A.C. Narayan vs. State of Maharashtra and TRL Krosaki Refractories Ltd. vs. S.M.S. Asia pvt. Ltd., in which the Hon'ble Apex court has clearly held that power attorney given to the authorised SCCH-21 9 C.C. No.: 57165/2019 representative in the matters pending adjudication and the personal knowledge of authorised representative is must with respect to the said case and in this case the same has been proved by the complainant and as such the said principles are aptly applicable to the present case in hand.
18. Now the other contention taken by the accused counsel is that the cheques issued in favour of the complainant company are undated cheques issued in the year 2009 and the cheques are used by the complainant company after lapse of 10 years inspite of the fact that the account is closed in 2011 and new account has been opened by him in 2012 for which he has also given reply notice as per Ex.D1, but the same has not been considered by the complainant and the said undated cheques issued by the accused are towards security purpose has been misused for which the complaint is not maintainable and liable to be dismissed. On this aspect the complainant counsel has argued that the said cheques at Ex.P1 and 2 are issued by the accused which are post dated cheques and the said cheques are towards the discharge of legally recoverable debt towards the materials supplied by them to the accused and also the accused has in all given 12 undated cheques including the Ex.P1 and 2 cheques at the time of entering into agreement which were duly signed by him and thereafter during the course of business the accused was regular in making payments but in the year 2019, the accused towards payment for the supply of goods at Mangaluru and Hubli branch had issued Ex.P1 for an amount of Rs.39,60,026/- and Ex.P2 of Rs.97,29,561/- for total amount of SCCH-21 10 C.C. No.: 57165/2019 Rs.1,36,89,597/- and the said cheques are not undated or issued by the accused for security purpose. Apart from it, it is also contended that DW.1 in his cross-examination has clearly admitted the signature on the cheques as per Ex.P1(a) and Ex.P2(a). which itself is sufficient to draw the presumption in favour of the complainant.
19. Hence, considering the oral and documentary evidence of both the parties before the court it goes to show that the accused and complainant as discussed are in the business of selling spectacles and accused being distributor having branch at Mangaluru and Hubli has entered into an agreement as per Ex.P35 between accused and the complainant and in the said agreement both of them have admitted for doing business and also in the said agreement it is clearly mentioned that the accused has issued 12 cheques and the same can be used by the complainant company which are undated. Further the accused has clearly admitted the signature on the cheques at Ex.P1(a) and Ex.P2(a) and also the agreement entered among themselves. On perusal of the said agreement, also the said clause of issuance of blank cheque is clearly admitted by him which are nothing but total 12 undated cheques including the cheques at Ex.P1 and 2. Apart from it in the cross-examination of PW.1 and 2 have admitted that the cheques are pertaining to SBI bank and no hurdle to produce 12 cheques and also that the cheques issued by the accused are not for the exact date but there is difference in the date of issuance of cheques and the said cheques are pertaining to the time of distribution of agreement. Hence, on this aspect with respect to the SCCH-21 11 C.C. No.: 57165/2019 contention of the accused that the said cheques are undated cheques taken by the complainant at the time of entering into the agreement which are also post dated cheques is clearly admitted by PW.1 and also there is a clause in the agreement that if the same are to be presented within one year, but in view of the said agreement it clearly goes to show that as per the agreement entered between the complainant and accused, the said 12 cheques are issued by the accused for his business purpose and as such only because the same are post dated cheques or undated cheques, cannot be the sole ground to come to conclusion that the same are not issued towards the discharge of legally recoverable debt and are only blank cheques for security purpose. The mere issuance of post dated or undated cheques cannot be considered that they are issued for security purpose and in this case the admission given by DW.1 that there was an agreement with respect to the transactions and also he has issued 12 cheques by him to the complainant for future transactions and also the admission of his signature at Ex.P1(a) and Ex.P2(a) clearly goes to show that the accused has admitted the said Ex.P1 and 2 cheques are issued by him to the complainant company for future transactions among themselves and for the purpose of business transaction with the complainant is itself is sufficient to come to conclusion that the said cheques are issued by the accused to the complainant for future transactions and discharge of liability and the said amount in Ex.P1 and 2 is towards legally enforceable debt.
SCCH-21 12 C.C. No.: 57165/201920. Apart from it in order to prove the said contention it goes to show that the complainant has produced the documents at Ex.P11 to 14 which are the customer ledger account and Ex.P15 to 25 are the purpose orders made by the accused after entering into an agreement and on this aspect the accused counsel has cross examined the PW.2 in length wherein he has admitted that the said documents at Ex.P11, 13 and 14 customer ledger account does not agree with their books and the balance shown in the said ledger account which are not tallying with one another and also in the same ledger of invoices the accused has not accepted the amount mentioned in those account by making a note in handwriting and marking as 'does not agree' is the defence of the accused that the said customer ledger report towards supply of goods is not agreed by him and also the said purchase invoices produced by the complainant at Ex.P15 to 25 are not related to the transactions for the supply of goods to him.
21. On this aspect it goes to show that even though the accused has made a note about non-agreeing with the said supply of goods and by making note as mentioned the balance amount with endorsement as does not agree but it also goes to show that in the cross of DW.1 he has admitted that thereafter no correspondence or reconciliation statement has been sent by him to the complainant for not agreeing that the goods sent by the complainant company to him and also with respect to the amount mentioned in the customer ledger report. Such being the fact even though he has endorsed with note as 'not agreeing' but the condition of the reconciliation statement is not complied by him nor he has made any reply SCCH-21 13 C.C. No.: 57165/2019 notice to the complainant company sending in detail with respect to disagreeing about the said amount cannot be ignored by this court that what estopped the accused to comply the said condition when there is a huge difference between the consignment and the purchase order made by him and not sending the reconciliation statement to the complainant company or not making any reply itself is sufficient to come to conclusion that the accused has agreed with the supply of goods made to him as per the purchase order.
22. Apart from it it also goes to show that the complainant has produced the copies of invoices at Ex.P27 to 34 to show the goods are supplied by them to the accused and with respect to the said fact of invoices is concerned are pertaining to the year 24.03.2017 to 29.06.2019 and by confront to DW.1 the terms and conditions mentioned in the said invoices are marked as Ex.P26(a) to 26(c) with respect to the supply of goods made by the complainant company in the key points mentioned at Ex.P26(a) (b) and (c), it clearly goes to show that the documents of invoices produced before this court by the complainant company shows the supply of goods made by them to the accused and the accused in terms has failed to make payments as per the invoices and the purpose orders which are also tallying with the customer ledger report produced by the complainant.
23. Further in the document at Ex.P11 the balance amount of Mangaluru branch is showing for the period of 01.01.2018 to 12.09.2019 as Rs.1,10,37,836.80 and after payments and receipts of the accused the total debit amount SCCH-21 14 C.C. No.: 57165/2019 is Rs.2,87,63,457.94 and hence the total amount of both the opening balance and debit will be Rs.3,98,01,293.90 and also is showing a credit amount of Rs.3,00,71,591/- and hence after deduction i.e. out of Rs.3,98,01,293.90 if Rs.3,00,71,591/- is deducted balance will be Rs.97,29,702.90.
24. Further towards the Hubli branch in the said document at Ex.P11 the opening balance is showing as Rs.46,61,879.08 plus debit amount of Rs.46,81,972.40 and the total will be Rs.93,43,851.48 and after deducting credit payments of Rs.53,83,824.88 the receipts received will be Rs.39,60,026.60 of Hubli branch.
25. Hence, considering the said amount, the Ex.P1 cheque is showing for amount of Rs.39,60,026/- and Ex.P2 cheque is showing Rs.97,29,561/- and the total of the said amount will be Rs.1,36,89,597/- and as such the Ex.P11 customer ledger account showing the balance of amount as per Ex.P1 Rs.39,60,026/- and as per Ex.P2 Rs.97,29,561/- is the same amount which are mentioned in the cheque in order to come to conclusion that the said cheque amount to be recovered from the accused is towards discharge of liability to be paid by him for purchase of ophthalmic lenses and equipment.
26. Therefore in view of my discussion, even though the accused has seriously disputed about the supply of goods to him for the year 2017 to 19 and also has vehemently cross examined PW.1 and 2 on these aspects, but in view of the SCCH-21 15 C.C. No.: 57165/2019 document produced by the complainant at Ex.P11 to 14 customer ledger report and purchase orders at Ex.P15 to 25 and invoices at Ex.P26 to 34 are suffice to come to conclusion that the materials are supplied by the complainant to the accused for which the accused has failed to make the payments and the said transactions clearly goes to show that the accused is liable for the discharge o his liabilities for purchase of said goods.
27. Further, the accused has examined himself as DW.1 and got marked Ex.D1 to 6 and has contended that his account has been closed as per agreement 2011 and the cheques are pertaining to the year 2012 and such being the fact after closure of account he has not issued any cheques to the complainant company but the said undated cheques which are produced by him to the complainant company at the time of agreement are misused by them. Further argued that the said cheques are not presented in the year 2012 and by misusing the same had produced in the year 2019 and also has produced the document at Ex.D5 and 6 which are the letter given by Karnataka Bank and to show that his cheques other than Ex,P1 and 2 are cleared and hence the said cheques are not towards legally recoverable debt. On this aspect it goes to show that the said cheques are produced in the year 2019 and the same has been returned with memo as accounts closed and such being the fact even though at one stretch as per letter issued by the bank it can be considered that the account is closed in the year 2011 and his other cheques are encashed except Ex.P1 and 2, but in view of the agreement produced at Ex.P11 the said cheques SCCH-21 16 C.C. No.: 57165/2019 are handed over by the accused to the complainant at the time of agreement and as discussed earlier the said cheques are considered as post dated cheques agreed to be produced in future towards the payment of the supply of goods and such being the fact the production of cheques after 7 years when the account has been closed in the year 2011 itself is not sufficient to come to conclusion that the said cheques issued by the accused are not towards discharge of legally recoverable debt and further the document at Ex.P6 showing clearance of all other cheques will not help the accused to escape from the liability of accused in the the amount mentioned at Ex.P1 and 2 as it could be seen that the complainant by producing other documents like customer ledger account report, invoice and purchase order to prove the amount mentioned in cheque amount at Ex.P1 and 2 are issued by the accused towards payment of goods supplied to him and therefore, in view of my discussion the defence evidence led by DW.1 along with the documentary evidence at Ex.D1 to 6 is also not sufficient to hold that he is not liable to pay the said cheques amount and has failed to prove that the cheques are not issued by him towards legally recoverable debt.
28. The learned counsel for the complainant has relied upon the following citations:
1. AIR 1968 SC 1413 - Gopal Krishnaji Ketkar Vs. Mohamed Haji Latif & others.
2. (1999) 8 SCC 221 - Central Bank of India & another Vs. Saxons Farms & others SCCH-21 17 C.C. No.: 57165/2019 I have gone through the said citation with respect to the reply notice given after limitation and in this case also as per Ex.D1 the accused has given reply after lodging the complaint which is beyond the period of limitation and with due respect to the said principle the same is aptly applicable to the present case in hand.
3. AIR 2015 SC 1198 - A.C. Narayanan Vs. State of Maharashtra & another.
4. (2014) 11 SCC 790 - A.C. Narayan Vs. State of Maharashtra
5. (2022) 7 SCC 612 - TRL Krosaki Refractories Limited Vs. SMS Asia Private Limited & another I have gone through the said citation with respect to the the Power of attorney produced by the complainant to conduct the case in which it has been clearly held that the knowledge about the facts of the case and duly authorised by the company is sufficient to prove that the complaint is lodged and case is conducted by competent person and with due respect to the said principle the same is aptly applicable to the present case in hand.
6. AIR 2019 SC 11983 - Basalingappa Vs. Mudibasappa.
I have gone through the said citation with respect to the the financial capacity of the complainant to give loan and in this case it goes to show that the company has shown thhat they had sufficient funds and have supplied materials to the SCCH-21 18 C.C. No.: 57165/2019 accused to show their financial capacity and with due respect to the said principle the same is aptly applicable to the present case in hand.
7. (2010) 11 SCC 441 - Rangappa Vs. Mohan I have gone through the said citation wherein it has been held that the accused to raise probable defence to create doubt in the mind of court to show the said amount mentioned in the cheque is not towards discharge of liability but in this case the accused has failed to do so and hence with due respect to the said principle the same is aptly applicable to the present case in hand.
8. AIR 2006 SC 3366 - M.S. Narayanan Menon Vs. State of Kerala & another.
9. ILR 2009 KAR 172 - A. Viswanatha Pai Vs. Vivekananda S. Bhat.
I have gone through the said citation wherein it has been held that there must be sufficient documents to show the legally recoverable debt and in this case the complainant has produced numerous documents in support of the cheque amount to show the same is legally recoverable debt and hence with due respect to the said principle the same is aptly applicable to the present case in hand.
10. (2021) SCC Online SC 1002 - Sripati Singh Vs. State of Jharkand.
SCCH-21 19 C.C. No.: 57165/201911. (2022) SCC Online SC 1376- Dashrathbai Trikambhai Patel V/s Hitesh Mahendrabhai Patel & another.
13. (2019) 4 SCC 197- Bir Singh Vs. Mukesh Kumar.
14. 2019 SCC Online SC 491 - Basalingappa Vs. Mudibasappa
15. (2010) 11 SCC 441- Rangappa Vs. Sri Mohan
16. (2019) 10 SCC 287 - Uttam Ram Vs. Devinder Singh Hudan I have gone through the said citation wherein it has been held that presumption is to be discharged by proving its case beyond reasonable doubt and by way of rebuttal evidence it must be proved that the said cheque amount is not towards legally recoverable debt and in this case the complainant has proved the same by way of evidence but the accused has failed to prove by defence evidence and also by way of preponderance of liability to show that the cheque amount is not towards legally recoverable debt and with due respect to the said principle the same is aptly applicable to the present case in hand.
17. (2014) 9 SCC 129 - Dashrath Rupsingh Rathod Vs. State of Maharashtra.
I have gone through the said citation with respect to the the point of jurisdiction of 3 different causes and in this case SCCH-21 20 C.C. No.: 57165/2019 the complainant has proved that this court has jurisdiction to entertain the complaint and with due respect to the said principle the same is aptly applicable to the present case in hand.
18. (1999) 4 SCC 253 - NEPC Micon Ltd. Vs. Magna Leasing Limited I have gone through the said citation wherein it has been held that return of cheque on ground of accounts closed amounts to commission of offence u/s.138 of N.I. Act and in this case also as per the memo it has been reported as the account is closed which amounts to offence u/s.138 of N.I. Act and with due respect to the said principle the same is aptly applicable to the present case in hand.
19. (2015) 9 SCC 622 - Moinuddin Abdul Sattar Shaikh Vs. Vijay D. Salvi I have gone through the said citation wherein it has been held if an account is maintained and cheque issued by drawer knowingly the account is closed then he shall be made liable to pay the said amount and with due respect to the said principle the same is aptly applicable to the present case in hand.
29. The learned counsel appearing for the accused has relied upon the following citations:
1. AIR 1968 SC 1413 - Gopal Krishnaji Ketkar vs. Mohamed Haji Latif and others.SCCH-21 21 C.C. No.: 57165/2019
I have gone through the said citation wherein it has been held that best evidence throwing light on issue of consistency must be considered by the court, but in this case the accused has failed to show by way of documentary evidence to disbelieve the case of complainant and with due respect to the said principle the same is not applicable to the present case in hand.
2. (1994) 1 SCC 1 - S.P.Chengalvaraya Naidu (dead) by Lrs. vs. Jagannath (dead) by Lrs. And others. I have gone through the said citation wherein it has been held that non disclosure of relevant and marked documents to obtain advantage amounts to fraud. But in this case it goes to show that the complainant has proved by way of documentary evidence that the materials have been supplied to the accused as per the ledger account, invoices and purchase order and with due respect to the said principle the same is not applicable to the present case in hand.
3. AIR 2015 SC 1198 - A.C.Narayanan vs. State of Maharashtra and anr. Shri G.Kamalakar vs. M/s. Surana Securities Ltd., and another.
I have gone through the said citation wherein it has been held that complaint was neither signed by managing director or director of the company and deputy manager gave evidence on behalf of company though he does not know anything, but in this case the complainant has produced the power of attorney and also stated that he has thorough knowledge about the case and the transactions taken place between the complainant and accused and hence with due SCCH-21 22 C.C. No.: 57165/2019 respect to the said principle the same is not applicable to the present case in hand.
4. AIR 2019 SC 1983 - Basalingappa vs. Mudibasappa I have gone through the said citation wherein it has been held that non mentioning of date of issuance of cheque by complainant in complaint and failure to show financial capacity amounts to acquittal, but in this case it goes to show that the cheque at Ex.P1 and 2 are post dated cheques issued by the accused and also the financial capacity is proved by the complainant and hence with due respect to the said principle the same is not applicable to the present case in hand.
5. (2010) 11 SCC 441 - Rangappa vs. Sri Mohan I have gone through the said citation wherein it has been held that presumption is to be discharged by proving its case beyond reasonable doubt and by way of rebuttal evidence it must be proved that the said cheque amount is not towards legally recoverable debt and in this case the complainant has proved the same by way of evidence but the accused has failed to prove by defence evidence and also by way of preponderance of liability to show that the cheque amount is not towards legally recoverable debt and with due respect to the said principle the same is aptly applicable to the present case in hand.
6. AIR 2006 SC 3366 - M.S. Narayana Menon alias Mani vs. State of Kerala and Anr.
SCCH-21 23 C.C. No.: 57165/2019I have gone through the said citation wherein it has been held that discrepancy found in books of account to prove the said transactions appears to be probable evidence and accused is entitled for acquittal, but in this case complainant has proved by producing ledger account, invoice and purchase order which is also tallying with the cheque amount as per the balance shown by him in the ledger account and hence there is no discrepancy in the books of account and hence with due respect to the said principle the same is not applicable to the present case in hand.
7. ILR 2009 KAR 172 - Sri. A.Viswanatha Pai vs. Sri. Vivekananda S. Bhat I have gone through the said citation wherein it has been held that accused has successfully established his defence version by adducing and in the cross of PW.1 to show the cheque is not issued towards legally enforceable debt, but in this case the accused has failed to show by preponderance of probabilities that the said cheque amount is legally recoverable debt and hence with due respect to the said principle the same is not applicable to the present case in hand.
8. (2020) 7 SCC 1 - Arjun Pandit Rao Khotkar vs. Kailash Kushan Rao Gorantyal and others.
I have gone through the said citation relied by both sides in which it has been held that u/s. 65 a & b of Evidence Act the production of certificate being procedural can be relaxed by the court but permission to produce such certificate at later point after commencement of trial shall not SCCH-21 24 C.C. No.: 57165/2019 affect the fair trial and with due respect to the said principle the same , but in this case the accused has produced bank statement in his defence without certificate and also there are customer ledger account, purchase order and invoice produced by the complainant and non-production of 65(b) certificate will not disprove the document as it could be seen the letters of endorsement produced by the accused from bank authorities are considered by this court and hence the said principle is aptly applicable to the present case in hand.
30. Further, in so far as the payment of the amount by the accused in the cheque having been signed by him, the presumption for passing of the consideration would arise as provided u/s. 118(A) of N.I. Act as to presumption of Negotiable instrument until the contrary is proved and also that consideration of every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred to the effect that such presumption would remain until the contrary is proved. Hence, once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was issued for the discharge of the debt or other liability and the onus is on the accused to raise the probable defence and as such the standard of proof for rebutting the presumption is that of preponderance of probablities. Inference of preponderance of probabilities can be drawn not only from the materials brought on the record by the parties but also by reference to the circumstance upon which they rely.
SCCH-21 25 C.C. No.: 57165/201931. U/s. 139 of N.I. Act, unless the contrary is proved the holder of a cheque who has received the cheque of the nature referred in section 138 of N.I. Act for the discharge, in whole or in part or of any debt or other liability, but the said presumption of law is not absolute and is rebuttable. Hence, for a offence which is alleged to have been committed u/S.138 of N.I. Act, the initial burden of proof is on the accused to prove the non-existence of consideration by bringing on record such facts and circumstance which would lead the court to believe the non-existence of legally enforceable debt or liability either by direct evidence or by preponderance of probabilities that the existence of legally enforceable debt or liability was improbable, doubtful or illegal.
32. Therefore, in view of my discussion it clearly goes to show that the complainant has proved that the accused has issued cheques as per Ex.P1 and 2 dated 19.08.2019 totally for an amount of Rs.1,36,89,587/- as payment towards supply of ophthalmic lenses, equipments and other products to the accused and hence, I am of the opinion that in this point the complainant has proved the guilt of the accused for the offence punishable under Section 138 of N.I. Act. Accordingly, Point No.2 is answered in the Affirmative.
33. POINT No.3: Section 138 of N.I. Act empowers the Court to sentence the accused upto two years and also to impose fine which may extend to twice the amount of cheque, or with both. The cheques in question were issued on SCCH-21 26 C.C. No.: 57165/2019 19.08.2019 totally for Rs.1,36,89,587/-(Rupees One Crore thirty six lakhs eighty nine thousand five hundred and eighty seven only). The complainant was deprived of money that was rightfully due to it for a period of 3 years 5 months. However, having regard to the facts of the case and the amount involved, there are no warranting circumstances to award the sentence of imprisonment as substantive sentence. Directing the accused to pay fine and also awarding compensation to the complainant would meet the ends of justice. But adequate default sentence shall have to be imposed to ensure the recovery of fine imposed to the accused. Therefore, the complainant is required to be suitably compensated as per section 80 and 117 of the Negotiable Instrument Act and also appropriate in default sentence. Having regard to all these facts, I pass the following:
ORDER The accused is found guilty for an offence punishable under Sec.138 of N.I. Act and he is sentenced to pay a fine of Rs.1,65,64,400/-(Rupees One Crore sixty five lakhs sixty four thousand four hundred only). In default to pay fine, the accused shall undergo simple imprisonment for a period of six months.
Further, acting under Section 357(1)(b) of Cr.P.C., out of the fine amount, a sum of Rs.1,65,54,400/-(Rupees One Crore sixty five lakhs fifty four thousand four hundred only) SCCH-21 27 C.C. No.: 57165/2019 on recovery shall be paid as compensation to the complainant.
The office is directed to supply a free copy of judgment to the accused.
(Dictated to the Stenographer, transcribed by her, corrected, signed and then pronounced by me in the open court on this the 07 th day of March 2023) Digitally signed by KAMATE KAMATE RAJESH M RAJESH M Date: 2023.03.14 17:02:44 +0530 (RAJESH M. KAMATE) XVII ADDL.JUDGE, Court of Small Causes & ACMM, Mayo Hall Unit, Bengaluru.
ANNEXURE List of witnesses examined on behalf of the complainant:
P.W 1: Chandan Shop P.W 2: Prakash Raju V. List of documents marked on behalf of the complainant:
Ex.P.1 & 2 : Cheques
Ex.P.3 & 4 : Bank challans
Ex.P.5 & 6 Bank endorsements
Ex.P.7 : Copy of Demand notice
Ex.P.8 : Postal receipt
Ex.P.9 : Postal acknowledgment
Ex.P.10 : N/c. of SPA
Ex.P.11 : Customer Ledger report
Ex.P.12 : N/c. of SPA
Ex.P.13 & 14 : Customer ledger report
Ex.P.15 to 25 : Purchase orders
Ex.P26 to 34 : Invoices
Ex.P35 : Distributor agreement dt.20.04.2009
Ex.P36 : GST Tax invoice composition
SCCH-21 28 C.C. No.: 57165/2019
List of witnesses examined on behalf of the accused:-
DW.1 : Ashok Rao List of documents marked on behalf of the accused:-
Ex.D1 : Reply notice
Ex.D2 : Postal receipt
Ex.D3 : Postal acknowledgment
Ex.D4 & 5 : SBI letter dt.02.11.2021
Ex.D6 : Karnataka Bank letter dt.23.12.2021
Digitally signed by
KAMATE KAMATE RAJESH M
RAJESH M Date: 2023.03.14
17:03:11 +0530
(RAJESH M. KAMATE)
XVII ADDL. JUDGE,
Court of Small Causes &
Addl. CMM, Mayo Hall Unit,
Bengaluru.
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