Bangalore District Court
Smt. Shobha Devi Jain vs Smt. Geetha on 29 August, 2019
IN THE COURT OF XXI ADDL.CHIEF METROPOLITON
MAGISTRATE, BENGALURU CITY
Present: Sri. V. NAGARAJA, LL.B., LL.M.,
XXI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Dated this the 29th day of August, 2019
C.C. No.8539/2018
COMPLAINANT: Smt. SHOBHA DEVI JAIN
W/o. Kewal Chand Jain,
Aged about 54 years,
Proprietor of Deepak Marketing Company,
Having its Office at No.31,
Akkipet Main Road,
Bengaluru.
Represented by her SPA Holder
Sri. Kewal Chand Jain
S/o. Badarmal,
Aged about 57 years,
No.31, Akkipet Main Raid,
Bengaluru - 560 053.
(Reptd. By: SKM., Advocate)
V/s.
ACCUSED: 1. Smt. GEETHA
W/o. Hanumantharaju,
Aged about 37 years,
Proprietor & Authorized Signatory
M/s. Hamsa Print 'N' Pack,
Regd. Office at No.15/16,
1st Main, 1st Cross,
Hegganahalli, Sanjeevini Nagara,
Vishwaneedam Post,
Bengaluru - 560 091.
And also available at:
Work Place: No.154,
Byraveswara Indl. Estate,
Vishwaneedam Post,
Bengaluru - 560 091.
2 C.C.No.8539/2018
2. Sri. HANUMANTHARAJU
Aged about 42 years,
Authorized Signatory
M/s. Hamsa Print 'N' Pack,
Regd. Office at No.15/16,
1st Main, 1st Cross,
Hegganahalli, Sanjeevini Nagara,
Vishwaneedam Post,
Bengaluru - 560 091.
And also available at:
Work Place: No.154,
Byraveswara Indl. Estate,
Vishwaneedam Post,
Bengaluru - 560 091.
3. M/s. HAMSA PRINT 'N' PACK
Represented by is Proprietor and
Authorized Signatory,
Smt. Geetha M and Hanumantharaju
Regd. Office at No.15/16,
1st Main, 1st Cross,
Hegganahalli, Sanjeevini Nagara,
Vishwaneedam Post,
Bengaluru - 560 091.
And also available at:
Work Place: No.154,
Byraveswara Indl. Estate,
Vishwaneedam Post,
Bengaluru - 560 091.
(Reptd. By: VB., Advocate)
:JUDGMENT:
Complainant has filed this complaint under Section 200 of Cr.P.C. r/w Section 138 of N.I. Act, seeking for penalizing the accused for the offence punishable under Section 138 of N.I. Act and also for awarding compensation to her.
3 C.C.No.8539/2018
2. Case of the complainant in a nutshell is that:
Complainant is proprietrix of Deepak Marketing Company, which is running business of dealer and distributor of Craft Papers and Board, whereas accused No.1 Smt. Geetha M is also proprietrix of accused No.3 M/s. Hamsa Print 'N' Pack, whereas accused No.2 Hanumatharaju is authorized signatory of accused No.3 and they are also running business. So, in the course of their business transactions, accused started to purchase Craft Papers and Boards from the complainant from the year 2011, on credit basis and requested the complainant to make payments of goods price within 30 days from the date of supply of goods or raising invoice.
3. It is further averred that initially accused were sincerely making payments within time, but later on, they became irregular in making payments and requested the complainant to carried forward the due amounts. So, due amounts were carry forward from year to year and debt notes were raised from time to time and accused have confirmed the due amounts. Accordingly, on 01.04.2017, also accused have confirmed the account statements that is to say for the period from 2011 to 2017, accused made 4 C.C.No.8539/2018 transaction with the complainant for total sum of Rs.44,18,119/-, out of above said amount, the accused have paid only Rs.42,73,119/-. So, still accused were balance of Rs.1,45,000/- (44,18,119 - 42,73,119 = Rs.1,45,000/-). So, in order to discharge above said Rs.1,45,000/-, on 27.01.2018, the accused have issued a postdated cheque bearing No.887030 dated 01.02.2018 for Rs.1,45,000/- drawn on Corporation Bank, Peenya Branch, Bengaluru and assured to honour the said cheque. So, believing the words of accused, on 05.02.2018, she presented above said cheque through her banker i.e., Kotak Mahindra Bank, Levelle Road Branch, Bengaluru. But said cheque was dishonoured for the reason "Payment Stopped by Drawer". So, the bank authorities issued endorsement dated 07.02.2018. So, she got issued legal notice dated 21.02.2018 through RPAD to all accused regarding dishonour of cheque and calling upon them to pay cheque amount, whereas said notices have been duly served on accused on 22.02.2018. But, the accused have failed to pay the cheque amount. Hence, accused have committed offence punishable U/s.138 of NI Act. Hence, she is constrained to file this complaint seeking for penalizing the all accused for the 5 C.C.No.8539/2018 offence punishable under Section 138 of N.I. Act., and also seeking for awarding of compensation to her.
4. In pursuance of summons issued by this court, accused No.1 and 2 made appearance on their behalf as well as accused No.3 through their counsel and obtained bail and now they are on bail.
5. As these proceedings are summary in nature, substance of accusation read over and explained to accused No.1 and 2 in language known to them whereas, they pleaded not guilty and claimed for trial.
6. In order to prove the case of the complainant, her SPA holder has been examined as PW-1 and got documents marked Ex.P-1 to Ex.P-13. After completion of evidence of complainant, statement of accused No.1 and 2 as specified U/s.313 of Cr.P.C., have been recorded, whereas accused No.2 has been examined as DW-1 and accountant of accused No.3 has been examined as DW-2 and got documents marked Ex.D-1 to Ex.D-8.
7. I have heard arguments of both learned counsels.
8. Perused the records.
6 C.C.No.8539/2018
9. After perusal of records, the points arise for my consideration are:
1) Whether complainant proves beyond all reasonable doubt that accused No.1 being Proprietor and accused No.2 being authorized signatory of accused No.3 firm, in order to discharge their legally enforceable debt, issued a postdated cheque bearing No.887030 dated 01.02.2018 for Rs.1,45,000/- drawn on Corporation Bank, Peenya Branch, Bengaluru?
2) Whether complainant further proves that she has complied with mandatory requirements as specified under Section 138 of N.I. Act?
3) What Order?
10. My findings on the above points are:
Point No.1 : In the Negative
Point No.2 : Does not Survive for Consideration
Point No.3 : As per final order,
for the following:
REASONS
11. Point No.1: As I have already stated, in order to prove the case of the complainant, her SPA holder has been examined as PW-1 and he filed his examination-in-chief by way of affidavit by reiterating entire complaint averments as stated above. In support of his oral testimony, he relied upon Ex.P-1 to Ex.P-13.
12. On the other hand, accused No.2 has been examined as DW-1 and accountant of accused No.3 has 7 C.C.No.8539/2018 been examined as DW-2 and got documents marked Ex.D-1 to Ex.D-8.
13. Before appreciation of evidence of both parties, I am of the opinion, it is worth to note presumptions envisaged in N.I. Act as well as ratio laid down by the Hon'ble Apex Court in Three Judges Bench Judgment reported in (2010) 11 SCC 441 (Rangappa V/s. Sri Mohan) wherein it is held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent /complainant."
It is further held:
Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
14. So in the light of above presumptions and ratio decidendi laid down by Hon'ble Apex Court, if the present 8 C.C.No.8539/2018 facts and situations are analyzed, it is obvious that according to complainant, accused have issued cheque for discharging of their liability arose with respect to purchasing of Craft Papers and Boards. On the other hand, on considering the stand taken by the accused in their evidence, it is obvious that though they dispute their liability as claimed by complainant, but they are not disputing the facts that cheque is belonged to account of accused No.3 firm and it bears signature of accused No.1. So, as I have already stated in view of ratio laid down by Hon'ble Apex court in the Judgments stated supra, that as soon as accused admits the facts that cheque is belonged to her account and it bears her signature, then the mandatory presumption u/S 139 of N.I. Act comes to the aid of complainant and she can rest upon said presumption.
Now the crucial question arises as to whether accused are able to rebut the said presumption or not?
15. As I have already stated, accused have specifically denied alleged liability of Rs.1,45,000/- as claimed by complainant, whereas they specifically contended that though they have started business 9 C.C.No.8539/2018 transaction with complainant in the year 2011, but they stopped their business with the complainant after 2014 as complainant did not supply quality materials. In other wards, he supplied only sub-standard materials. So, for the financial year 2014-15 that is to say on 31.03.2015, accused was only due of Rs.2,90,000/-. As the complainant had supplied sub-standard materials, they have withheld the said payment, but complainant insisted for clearance of said balance. So, in the month of August 2015, the accused have issued two undated cheques bearing No.887028 and 887030 (present cheque) for each Rs.1,45,000/- totally for Rs.2,90,000/- as a security cheques for said due amount and assured that they would make payment of the said amount and get back the cheques. Later, from 25.07.2016 to 24.03.2017, accused have transferred total Rs.2,45,000/- to the account of complainant by way of NEFT. So, remaining balance was only Rs.45,000/-. Meanwhile, the complainant has raised debit note for Rs.34,801/- as a interest. So, as on 01.04.2017, accused were only due Rs.79,801/-. So, on 03.01.2018, they have transferred Rs.77,211/- to the account of complainant by way of NEFT. So, the accused were balance of only Rs.2,590/- after 01.03.2018. So, 10 C.C.No.8539/2018 under such circumstances, there was no legally enforceable debt of Rs.1,45,000/- as on 27.01.2018, so the question of issuance of present cheque on 27.01.2018 for Rs.1,45,000/- does not arise, whereas the complainant in order to grab more money from accused, she has misused above said undated cheque bearing No.887030 for Rs.1,45,000/- which was given for security and filed this false complaint. Hence, same is liable to be dismissed and they may be acquitted.
16. In support of above defence, learned counsel for accused argued that presumption envisaged under Section 139 of N.I. Act is rebuttable presumption. So, initially court can raise such presumption, whereas accused can rebut the said presumption by raising probable and acceptable defence by contesting on the fact of existence of legally enforceable debt. In this case, accused were not due of Rs.1,45,000/- as claimed by the complainant. In fact, they were only due of Rs.2,590/-. He further argued that though the accused started business transaction with complainant in the year 2011, but they stopped their business with the complainant after 2014 as complainant did not supply quality materials. In other wards, he 11 C.C.No.8539/2018 supplied only sub-standard materials. So, under such circumstances, when admittedly the accused have stopped business transaction with the complainant in the year 2014 itself, then question of purchasing materials from the complainant on 08.01.2018 and 12.01.2018 as per tax invoices Ex.P-6 and Ex.P-7 do not arise, whereas the complainant has created these documents only in order to make adjustments in her account ledger Ex.P-11 to make wrongful claim of Rs.1,45,000/- which is covered under Ex.P-1 cheque. He further argued that though in Ex.P-11 account ledger extract, on 31.03.2016, complainant has shown debit note for Rs.68,923/-, but she has not produced any such debit note, whereas such entry is created only in order to make account adjustments to claim Rs.1,45,000/- though there was no such due. Hence, the accused are not due of alleged cheque amount of Rs.1,45,000/- to issue present cheque. Hence, compliant is liable to be dismissed and accused may be acquitted.
17. On the other hand, learned counsel for complainant agued that when accused is not disputing the issuance of cheque and her signature thereon, then the 12 C.C.No.8539/2018 mandatory presumption shall be raised in favour of complainant that accused has issued said cheque for discharging of legally enforceable debt i.e., amount covered under the cheque. He further argued that DW-1 admitted the Ex.P-8 confirmation of account and Ex.P-9 debit note. So, from these documents, it is clear that accused were due of Rs.1,45,000/-, but now in order to escape from their liability, they created this false story. Hence, version of the accused cannot be believable and acceptable. Hence, they have to be convicted and maximum sentence has to be imposed.
18. Having regard to the arguments of both counsels, before appreciating the defence of accused, it is worth to note the standard of proof required by accused to rebut the mandatory presumption which is already raised in favour of complainant.
19. At this juncture, it is worth to note ratio laid down by Hon'ble Apex Court in the above said Rangappa V/s. Mohan's case wherein Hon'ble Court held that:
"It is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities".13 C.C.No.8539/2018
Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own"
20. At this juncture, it is also worth to note judgment of Hon'ble Apex Court reported in (2013)3 SCC 86 (Vijay V/s. Laxman and another) where it is held:
"Sections 118 and 139 of the Negotiable Instruments Act make that abundantly clear. That presumption is, however, rebuttable in nature. What is most important is that the standard of proof required for rebutting any such presumption is not as high as that required of the prosecution. So long as the accused can make his version reasonably probable, the burden of rebutting presumption would stand discharged"
It is further held that:
"Case set up by holder of cheque itself dubious, thus, held, initial presumption itself comes to an end"14 C.C.No.8539/2018
21. So, in the light of above ratio, if the present facts and situations are analyzed, as I have already stated the accused have specifically contended that though they have started business transaction with complainant in the year 2011, but they stopped their business with the complainant after 2014 as complainant did not supply quality materials. In other wards, he supplied only sub- standard materials. So, for the financial year 2014-15 that is to say on 31.03.2015, accused was only due of Rs.2,90,000/-. As the complainant had supplied sub- standard materials, they have withheld the said payment, but complainant insisted for clearance of said balance. So, in the month of August 2015, the accused have issued two undated cheques bearing No.887028 and 887030 (present cheque) for each Rs.1,45,000/- totally for Rs.2,90,000/- as a security cheques for said due amount and assured that they would make payment of the said amount and get back the cheques. Later, from 25.07.2016 to 24.03.2017, accused have transferred total Rs.2,45,000/- to the account of complainant by way of NEFT. So, remaining balance was only Rs.45,000/-. Meanwhile, the complainant has raised debit note for Rs.34,801/- as a interest. So, as on 01.04.2017, accused were only due 15 C.C.No.8539/2018 Rs.79,801/-. So, on 03.01.2018, they have transferred Rs.77,211/- to the account of complainant by way of NEFT. So, the accused were balance of only Rs.2,590/- after 01.03.2018. So, under such circumstances, there was no legally enforceable debt of Rs.1,45,000/- as on 27.01.2018, so the question of issuance of present cheque on 27.01.2018 for Rs.1,45,000/- does not arise, whereas complainant has misused earlier security cheque.
22. The accused in order to substantiate his above contention, he mainly relied upon the clear admission given by PW-1 in his cross-examination, which reads as follows:
"¤¦-11 CPËAmïì ¸ÉÖÃmïªÉÄAmï£À°è 2015, 2016 ºÁUÀÆ 2017£ÀÉà ¸Á°£À°è AiÀiÁªÀÅzÉà ªÀåªÀºÁgÀ DVgÀĪÀÅ¢®è JAzÀÄ ¸ÀÆa¹zÀgÉ ¸Àj"
23. So, from the above clear admission, it is crystal clear that for the years 2015, 2016 and 2017, there were no sale of goods transactions between complainant and accused. It is further important to note, both complainant and accused have produced their account ledger extracts pertaining to their transactions, which are marked as 16 C.C.No.8539/2018 Ex.P-11 and Ex.D-7. On perusal of said documents, admittedly as on 01.04.2016, accused was due of Rs.2,90,000/-. It is further important to note admittedly after 01.04.2016 i.e., from 25.07.2016 to 24.03.2017, the accused has made total payments of Rs.2,45,000/- by way of money transfer from his account to complainant's account as reflected in Ex.D-4 which is bank statement of accused and same is also reflected in complainant's account statement. So, after deducting Rs.2,45,000/- from due amount of Rs.2,90,000/-, then Rs.45,000/- (Rs.2,90,000 - Rs.2,45,000 = Rs.45,000) was only due for the year end of 31.03.2017 as reflected in both account ledger extracts. It is further significant to note, admittedly as per Ex.P-9 debit note dated 31.01.2017, Rs.34,801/- has been calculated as interest and added to above said Rs.45,000/-. So, accused was due of Rs.79,801/- as on 01.04.2017. Later, admittedly on 03.01.2018, accused transferred Rs.77,211/- to the account of complainant as reflected in Ex.D-4. So, after 03.01.2018, accused was only due of Rs.2,590/- (Rs.79,801 - Rs.77,211 = Rs.2,590). It is further important to note, on perusal of Ex.D-8 which is cheque book's counter foil, clearly substantiate that present cheque leaf bearing No.887030 and its series 17 C.C.No.8539/2018 number 887028 were issued to complainant for each Rs.1,45,000/- without mentioning the date in the year 2015 itself. So, considering above evidence and circumstances, they clearly prove that as on 04.01.2018 the accused was only due of Rs.2,590/-, but not Rs.1,45,000/- as claimed by the complainant, whereas present cheque has been issued for Rs.1,45,000/- in the year 2015 without mentioning the date. It is significant to note, though the complainant has cross-examined DW-1 and DW-2, nothing is elicited to disbelieve their evidence. So, under such circumstances, I am of the opinion that the version of the accused is so probable and acceptable and thereby the accused are able to rebut the mandatory presumption raised in favour of complainant and now shifts the reverse onus on the complainant to prove existence of alleged liability of Rs.1,45,000/- independently without the aid of presumption.
24. As I have already pointed out, accused are able to prove that as on 04.01.2018, accused were only due of Rs.2,590/- as reflected in their account ledger extract Ex.D-7. Per contra, the complainant contended that as per her account ledger extract Ex.P-11, the accused were doing business with her from the year 2011 and maintained 18 C.C.No.8539/2018 current account which continued up to 07.02.2018, during said period, accused have made total transaction of Rs.44,18,119/-, out of which, they have paid Rs.42,73,119/-. So, remaining balance is Rs.1,45,000/-. In order to show said amount, she mainly relied upon Ex.P-6 tax invoice dated 08.01.2018 for Rs.34,830/-, Ex.P-7 tax invoice dated 12.01.2018 for Rs.17,807/- and Ex.P-10 debit note dated 09.01.2018 for Rs.20,850/-.
25. It is important to note, accused have seriously disputed these documents and transactions by stating that after 2014, they stopped business transaction with complainant. Such being so, there are no transactions as contended by the complainant. In fact, complainant has created these documents only in order to adjust her account ledger to claim amount covered under security cheque. So, the accused have lodged complaint before concerned authority i.e., GST Office, Peenya, Bengaluru and also instructed their banker to make stop payment regarding above said undated security cheque.
26. It is important to note, on perusal of Ex.D-1 which is copy of the complaint lodged by accused before ACTO, GST Office, Peenya, Bengaluru clearly reveals that 19 C.C.No.8539/2018 they have objected raising of Ex.P-6 and Ex.P-7 invoices in their GST number and contended that no material was supplied to them as shown in said tax invoices. So, they asked the authority to delete such invoice numbers from their GST. It is important to note, the complainant has not produced any contrary document to show that she has supplied materials to accused as per Ex.P-6 and Ex.P-7 tax invoices. It is further important to note, on perusal of Ex.P-11 her account ledger extract, on 31.03.2016, she mentioned debit note for Rs.68,923/-, but she has not produced any such debit note before this court. So, under such circumstances, the amounts claimed under above said invoices and debit notes are doubtful. Hence, I am of the clear opinion that complainant has failed to prove existence of legally enforceable debt of Rs.1,45,000/- as on the date of issuance of alleged cheque without aid of presumption. Hence, I am of the clear opinion that accused have successfully rebutted the presumption raised in favour of complainant. On the other hand, complainant has failed to discharge reverse onus. Hence, I hold this point in the Negative.
27. Point No.2: In view of discussion made on point No.1, this point does not survive for consideration. 20 C.C.No.8539/2018
28. Point No.3: For the foregoing reasons discussed on points No.1 and 2, I proceed to pass the following:-
ORDER Acting under Section 255(1) r/w Section 264 of Cr.P.C. the accused No.1 to 3 are hereby acquitted for the offence punishable u/S.138 of Negotiable Instruments Act.The bail bonds of the accused No.1 and 2
and surety bonds stands cancelled.
However, accused No.1 and 2 shall execute personal bond of Rs.1,45,000/-
in view of Sec.437(A) of Cr.P.C.
(Directly dictated to Stenographer on computer, computerized by him, corrected and then pronounced by me in the open court on this the 29th day of August, 2019) (V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW-1 : Kewal Chand Jain LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P-1 : Cheque
Ex.P-2 : Bank Endorsement
Ex.P-3 : Copy of Legal Notice
Ex.P-4 : Postal Receipts
Ex.P-5 : Speed Postal Acknowledgements
Ex.P-6 & 7 : Tax Invoices
Ex.P-8 : Confirmation of Accounts
Ex.P-9 & 10: Debit Notes
Ex.P-11 : Account Ledger Extract
Ex.P-12 : Registration Certificate
Ex.P-13 : Special Power of Attorney
21 C.C.No.8539/2018
LIST OF WITNESSES EXAMINED FOR THE DEFENCE:
DW-1 : Hanumantharaju
DW-2 : Suresh M
LIST OF DOCUMENTS MARKED FOR THE DEFENCE:
Ex.D-1 : Letter
Ex.D-2 & 3 : Account Ledger Extract
Ex.D-4 & 5 : Statement of Accounts
Ex.D-6 : Authorization Letter
Ex.D-7 : Account Ledger Extract
Ex.D-8 : Cheque Book/Counter Foil
(V. NAGARAJA)
XXI ADDL. C.M.M., BENGALURU.