Bangalore District Court
Visage Holdings And Finance Pvt. Ltd. ... vs Fab Venue Textiles Rep By Satyakala ... on 11 January, 2024
KABC030896052021
Presented on : 06-12-2021 Registered on : 06-12-2021
Decided on : 11-01-2024 Duration : 2 years, 1 months, 5 days
IN THE COURT OF XXVII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
Present: Sri. K.N. SHIVAKUMAR B.Sc, LL.B., LL.M.,
XXVII A.C.M.M Bengaluru.
Dated: This the 11 th day of January, 2024
C.C. NO.34237/2021
Complainant M/S. VISAGE HOLDINGS
& FINANCE PRIVATE LIMITED
Having its Registered office at
No. 50, 2nd Floor, 100 Feet Road,
HAL 2nd Stage, Indiranagar,
BENGALURU 560038.
Represented by its Assistant Manager
and Collection
Mrs. Vinaya Shetty
Aged about 30 Years
(Rep by Sri. J.S, Adv.,)
V/s.
Accused M/s. FAB VENUE TEXTILES
No. 1615 Padmanagar, New Kaneri Road,
Sonale, Thane,
Maharashtra 421305
Represented by its Authorized Signatory
Mr. Satyakala Prabhakar Aluwala.
And also Available at:
M/s. Fab Venue Taxtiles
No.1376 Sundaram Apartment
Room No.102,
Chaudhary Compound Kamathghar
Bhiwandi Thane,
Maharashtra 421305.
Represented by its Authorized Signatory
Mr. Satyakala Prabhakar Aluwala
(Reptd by Sri. Dhananjay Kumar
Adv.,)
Offence U/s.138 of Negotiable
Instruments Act.
2 C.C. No. 34237/2021
Plea of the accused Pleaded not guilty
Final Order ACQUITTED
Judgment Date 11/01/2024
****
JUDGMENT
The Complainant has filed complaint U/Sec.200 of Code of Criminal Procedure against the Accused for the offence punishable U/Sec.138 of Negotiable Instrument Act.
2. The facts of the case in brief are as follows:-
It is the case of the Complainant that, it is engaged in the business of financial services i.e., lending loan for various purposes. The accused had approached and availed loan from the complainant under loan Agreement No. TLAPS0001282. After taking said loan, he became defaulter in repayment of said loan and as such he was due for Rs.27,89,194/-. Thereafter, he had issued Cheque bearing No. 278759, dated: 26/07/2021 for a sum of Rs.27,89,194/- drawn on DNS Bank, in favour of the complainant towards discharge of his liability. But, when the said cheque was presented for encashment by the complainant, the same got dishonoured on the ground of 3 C.C. No. 34237/2021 " INSUFFICIENT FUNDS " in the account of the accused. Thereafter, the complainant got issued legal notice dated:31/08/2021 to the accused through RPAD calling upon him to pay the amount covered under the aforesaid cheque within 15 days from the date of receipt of notice. But, the accused has neither replied to the notice nor paid the amount covered under the aforesaid cheque. Hence, this complaint.
3. After recording the sworn statement of the representative of complainant company and also verifying the documents, cognizance was taken against the accused for the offence punishable under Sec. 138 R/w 142 of N.I. Act. The accused on receiving the summons appeared before the Court through her counsel and was enlarged on bail and her plea was recorded. The accused pleaded not guilty but, claimed to have defence. Hence, the case was posted for evidence of the complainant.
4. In order to prove the case, initially the Authorized Representative/ General Power of Attorney Holder of the 4 C.C. No. 34237/2021 complainant company by name Mr. Ravi Prasad. U got himself examined as PW1 and got marked Ex.P1 to P8 documents. Thereafter, the complainant company got substituted & examined its Authorized Signatory by name Mrs. Vinaya Shetty as PW.2 and she adopted the very same documents i.e., Ex.P1 to P8 marked through PW1 and also got marked Ex.P9 to 14 as additional documents and she was cross-examined by the accused. The accused was examined U/sec. 313 of Cr.P.C., wherein she has denied the incriminating evidence against her and stated to had no defence evidence.
5. Heard the arguments of the advocate for the complainant and the counsel for the accused. Perused the records.
6. The following points arise for my consideration:
1. Whether the complainant proves that the cheque bearing No.278759 for a sum of Rs.27,89,194/- dated: 26/07/2021 drawn on DNS Bank, issued by the accused has been dis -
honored on the ground of "FUNDS INSUFFI-
CIENT" and the accused even after receiving the intimation regarding the dishonor of cheque failed to pay the cheque amount within the stip - ulated period and thereby accused has commit- ted an offence punishable under Sec.138 of N.I. Act?
5 C.C. No. 34237/2021
2. What order?
7 . My findings on the above points are as under
Point No.1: I n t h e N e g a t i v e Point No.2: As per final order, for the following:
REA S ON S
8. Point No.1 : In view of the present legal position as held by our Hon'ble High Court as well as Apex Court of India in a catena of decisions as well as relevant provisions of the Act, this court has to see whether the complainant has complied all the requirements as contained in Sec.138 of NI Act so as to bring home the guilt of the accused for the alleged offence. If so, whether the accused is able to rebut the legal presumption available to the complainant under Sec.139 of the Act by adducing probable defense or not. However, it is held by the full bench of our Apex Court in the case of Rangappa Vs. Mohan reported in 2010 (1) DCR 706 that ;
"The Statutory presumption mandated by sec.139 of the Act, does indeed include the existence of a legally 6 C.C. No. 34237/2021 enforceable debt or liability. However, the presump - tion U/S 139 of the Act is in the nature of a rebut- table presumption and it is open for the accused to raise a defence wherein the existence of a legally en- forceable debt or liability can be contested" .
9. Therefore, in view of the above decision once the cheque is admitted, the statutory presumption would auto- matically fall in favour of the complainant that, the alleged cheque was issued for the discharge of an existing legally enforceable debt or liability against the accused and the burden will shift on to the accused to rebut the same.
10. The learned counsel for the complainant has sub- mitted the arguments contending that the accused has ad- mitted the cheque and his signature thereon. Though the accused has chosen to cross examine PW1, he has failed to rebut the presumption U/sec. 139 of the Negotiable In- struments Act in favour of the complainant. Hence, he is liable to be convicted. On the other hand the counsel for the accused has argued that, the accused was neither due for Rs.2,78,919/- as alleged in the complaint nor issued al- leged cheque Ex.P3 towards discharge of any such due. 7 C.C. No. 34237/2021 Rather, said cheque was issued as a security towards re- payment of said loan. Further, the complainant company got hypothicated the machineries purchased through al- leged loan towards security of said loan. Further, it is ar- gued that, though the period of alleged loan was 5 years, about 2 years prior to said period, the complainant com- pany had seized said machineries and realized the entire loan amount. In spite of it, the complainant company in- stead of returning the said cheque taken as security, mis- used the same to file this false complaint against the ac- cused. Further, the complainant company has not dis- closed said fact of seizer of hypothicated machineries and also the arbitration proceedings initiated against the ac- cused. As such the complainant company has not ap- proached this court with clean hands. That apart, the com- plaint is also not maintainable, because the Representative of the complainant was not duly authorized and not having the knowledge of alleged transactions. Hence, the com- plaint is liable to be dismissed.
8 C.C. No. 34237/2021
11. Now, on the basis of the materials available on record, it is required to examine whether the complainant has complied with the provisions of Section 138 of N.I Act to get cause of action to file this complaint. The com- plainant besides his oral testimony has relied on the docu- ments at Ex.P3 to 8 in support of her contentions. Ex.P3 is the cheque alleged to have been issued by the accused, Ex.P.4 is the Return memo issued by the Banker of the ac- cused with the endorsement " FUNDS INSUFFICIENT " , Ex.P5 is the copy of legal notice issued by the com- plainant, Ex.P6 & 7 are the postal receipts for having sent the said notice to the accused and Ex.P8 is the unserved postal covers. All these documents corroborate the version of the complainant in his complaint as well as affidavit in lieu of chief examination and more over these documents are not at all disputed by the accused except service of no- tice and issuance of the cheque, which would be discussed in detail later. Thus, complainant with the help of Ex.P3 to 8 has conveniently proved to have complied the provi- sions of Section 138 i.e. presentation of cheque within the 9 C.C. No. 34237/2021 statutory period for encashment, issue of legal notice within prescribed period to the Accused and filing of complaint within limitation period as per section 142 of the Act.
12. Regarding the service of notice, it is stated by the complainant that one of the legal notices sent to the ad- dress of the accused through RPAD was returned unserved on the ground of incomplete address, whereas the another notice sent to other address of the accused was duly served. In support of the same, the complainant got produced the unserved postal envelope and the postal Acknowledgement along with the complaint. However, may be due to some inadvertance only the postal envelope was marked as Ex.P8 and the acknowledgment was not marked. On perusal of the records it is revealed that, the fact of said acknowledg- ment was clearly stated in the complaint and also produc- tion of the same was mentioned in the complaint and list of documents. Therefore, this court deems it proper to con- sider the same as the document produced in support of ser- vice of statutory notice. More over, the accused in the course of cross-examination of PW1 has neither denied nor 10 C.C. No. 34237/2021 disputed said fact as well as the said acknowledgment. Therefore, the statutory notice U/sec.138(b) of the Nego- tiable Instruments Act is held have been duly served.
13. The second aspect of the case is whether the ac- cused has successfully rebutted the presumption available in favour of the complainant with probable and convincing evidences? It is well settled principle of law that, once the cheque is admitted there will be a statutory presumption in favour of the holder or holder in due course U/Ss 118 and 139 of the Act. However, as held by our Hon'ble Apex Court and the High Court in a catena of decisions, the presump- tions under the said sections are in the nature of rebuttable presumptions and hence, the accused can very well rebut the said presumptions by leading reasonable and probable defence. Let us examine the same on the basis of the mate- rials available on record.
14. It is the case of the complainant that, the ac- cused had borrowed a business loan of Rs.30,00,000/- un- der the loan agreement No. TLAPS0001282. Under the 11 C.C. No. 34237/2021 said loan transaction the accused was due for a sum of Rs.27,89,194/- and towards discharge of the said liability the accused has issued alleged cheque Ex.P3. On the other hand, the accused has neither denied nor disputed alleged loan transaction. However, he has denied and disputed that he was due for said sum of Rs.27,89,194/- and denied that he has issued alleged cheque towards the payment of said due.
15. In support of the case of the complainant the Rep- resentative of the complainant company was examined as PW1 and got produced the loan application, sanction letter, loan agreement, statement of account and the preclosure projection of said loan as per Ex.P10 to 14 respectively. All these documentary evidences corroborate the version of PW1 in her affidavit in lieu of examination in chief. In the course of cross-examination of PW1, the accused has con- tended that, though the term of said loan was 5 years from 2018, the complainant company had illegally seized the hy- pothecated machineries and also misused the security cheque taken at the time of sanctioning said loan even prior 12 C.C. No. 34237/2021 to said period of 5 years. In the light of the said contention on perusal of the sanction letter Ex.P11, it appears very clear that as contended by the accused the term of said loan was 60 months from 25/03/2018 i.e., 5 years. As such, the said loan repayment schedule would end by 24/03/2023. But, the cheque in issue is dated:
07/08/2021 and the present complaint was filed on 07/10/2021 i.e., about 2 years prior to the term of said loan. The complainant has not given any explanation either in the complaint or in the testimony of PW1 as to why al- leged cheque was issued by the accused for the entire due amount of said loan much prior to the term of said loan.
16. Further, it is contended by the defence counsel that, the complainant company got hypothication of ma- chineries purchased by the accused through alleged loan as security and also said machineries were seized and repos- sessed by the complainant company. In support of the same, he got produced the repossessed asset inventory list dated: 16/03/2020 as per Ex.D2, which was also categori- 13 C.C. No. 34237/2021 cally admitted by PW1 in her cross-examination. Again she has not explained as to why said hypothicated ma- chineries were seized and repossessed during 2020 i.e., about 3 years prior to the term of said loan. When there is no justifiable reasons or grounds for pre-closure of any such loan either at the instance of the complainant com- pany or the accused, it appears difficult to accept that the accused had issued any such cheque towards discharge of entire outstanding due.
17. Apart from the above, it is pertinent to note that, though admittedly said machineries were seized and repos- sessed by the complainant much prior to filing of this com- plaint, the complainant has not disclosed said fact either in the complaint or the legal notice or in the evidence of PW1. Only when said fact was put to PW1 by way of sug- gestion in her cross-examination, she has admitted the same. More so, though the complainant company had seized and repossessed said machineries, it has not stated as to what happened to those machineries after the seizer. 14 C.C. No. 34237/2021 Whether those machineries were sold in auction and real- ized the sale consideration towards the dues under the al- leged loan or they were returned to the accused after ob- taining the cheque in issue towards discharge of said dues. If at all, the value of said machineries was lesser than the actual due of the accused under the said loan, the com- plainant company should have adjusted the sale considera- tion of said machineries towards the part of said due and obtained alleged cheque towards discharge of the remaining due amount. But, the PW1 in her cross-examination cate- gorically admitted that, the total value of said machineries as per the sanction letter issued by them was Rs.1,39,12,000/-. As such, there may not be any chances of selling those machineries for the amounts lesser than the alleged due of Rs.27,89,194/-. If said machineries were seized and repossessed by the complainant, how come the accused would issue alleged cheque towards discharge of said due without returning said machineries to him. If at all, the accused had issued said cheque towards discharge of said due of Rs.27,89,194/-, the complainant company 15 C.C. No. 34237/2021 should have returned the said machineries to the posses- sion of the accused. But, as discussed herein above, the complainant company has neither disclosed nor stated as to what happened to said machineries after seizing them during 2020 and / or after obtaining alleged cheque from the accused.
18. Further, the complainant got produced the Ledger Account Extract of the accused as per Ex.P13. On perusal of said extract it is revealed that as on 26/07/2021 the out- standing due was Rs.19,32,009/-. The cheque in issue Ex.P3 is also dated: 26/07/2021. Thus, a doubt arises as to how the accused issued said cheque for Rs.27,89,194/- when the outstanding due as on the said date was Rs.19,32,009/-. In this regard the PW1 also got produced the loan preclosure projection as per Ex.P14, which shows the total payable amount as Rs.27,89,194/- including the various interest and charges. But, except producing said document, the PW1 has not explained the contents of said document to show as to how they have arrived at 16 C.C. No. 34237/2021 Rs.27,89,194/-. Though in the said report the principle due amounts, the interest and the charges due were shown, that cannot be accepted barely without satisfactory expla- nation. Because, the Ledger Account Extract Ex.P13 also contains the amounts towards service charges, insurance charges, interest etc.,. including the principle due amount, which is shown to be Rs.19,32,009/-. That being the case, on the same date i.e., 26/07/2021 how the interest and charges mentioned in Ex.P14 could be imposed to the out- standing due of Rs.19,32,009/-. There is no explanation for the same either in the complaint or the legal notice or the evidence of PW1.
19. Apart from all the above, it is pertinent to note that, the defence counsel in the course of cross-examination of PW1 has elicited several facts to show that, the Representa- tive of the complainant company - PW1 is not having knowledge about the alleged transaction. Some of such facts wherein the PW1 pleaded her ignorance in her cross- examination are as follows:
17 C.C. No. 34237/2021
" ಆರರರಪ ನಮಮ ಸಸಸಸ ಇಸದ ವವವಹರದ ಸಲ ಪಡದದಸರರ. ಅವರರ ಏನರ ವವವಹರ ಮಡಲರ ಸಲ ಪಡದದಸರರ ಗರತತಲಲ.
ನ ನನರ ಪರಶರಲನ ಮಡಲಲ ಎಸದರ ಸರ.
ಸದರ ದಖಲಯನರ ಆರರರಪ ಎಷರ ಷ ಸಲ ಮರರಪವತ ಮಡದರಸದರ ನಖರವಗ ಗರತತಲಲ.
ಸದರ ಮಷನರಗಳನರ ನ ಸಸದರನ ಪಡದ ನಸತರ ಏನರ ಮಡಲಗದ ಲ ಎಸದರ ಮಹತ ಇಲ .
ಆರರರಪ ಉತತದನ ಉದಶಕಕ ಸಲ ಪಡದರರತತರ. ಆರರರಪ ಕಸಪನ ವರರದಸ ನವ ಬರರ ಪ ಪಕರಣಗಳನರ ನ ದಖಲಸರರವ ಬಗಗ ಮಹತ ಇಲಲ.
ಆರರರಪ ಕಸಪನ ವರರದಸ ನವ 2019 ರಲ Claim . P No. 112/2019 ರ Arbitration ಪಪಕರಣ ದಖಲಸದವ ಎಸದರ ಗರತತಲಲ.
ಸದರ ಪ ಪಕರಣದಲ ದ 11.04.2019 ರಸದರ ಅವರಡ ಆಗದ ಎಸದರ ಗರತತಲಲ.
ಷ ಎಸದರ ನನಪಲಲ."
ಆರರರಪಯ ಸಲದ ಅವಧ ಎಷರ
20. In view of all the above discussed facts and cir- cumstances, the defence of the accused that the alleged cheque-Ex.P3 was issued issued to the complainant com- pany by the accused as security towards payment of alleged loan appears more probable than the version of the com- plainant that the said cheque was issued by the accused to- wards payment of the total due i.e Rs.27,89,194/- to the complainant company .
18 C.C. No. 34237/2021
21. In view of all the above discussion, it can be concluded that the complainant has failed to establish through cogent and convincing evidence, the fact of issuance of the cheque for discharge of legality enforceable debt, which is dishonored for want of sufficient funds, issuance of legal notice within stipulated time, failure on the part of Accused to repay the amount within stipulated period. On the other hand, the Accused has successfully rebutted the presumption available to the complainant through probable evidences that would preponderate upon the evidence lead by the complainant. Therefore, the Accused is held to have not committed an offence punishable under Sec. 138 of N.I. Act. Accordingly point No.1 is answered in the Negative .
22. Point No.2:- In view of my answer to Point No.1, I proceed to pass the following:-
O R DE R Acting u/s 255(1) of Cr.P.C. the accused is hereby acquitted of the offence P/U/S 138 of N.I.Act. 19 C.C. No. 34237/2021
The bail bonds and surety bonds of the accused shall stand cancelled.
(Dictated to the stenographer directly on computer, corrected and then pronounced in open court by me on this the 11 th day of January, 2024) Digitally signed by KN K N SHIVAKUMAR SHIVAKUMAR Date: 2024.01.17 15:27:49 +0530 (K.N. Shivakumar) XXVII A.C.M.M., Bengaluru.
ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : Mr. RAVI PRASAD. U PW2 : Mrs. Vinaya Shetty
Documents marked on behalf of the complainant Ex.P1 : Copy of Incorporation certificate Ex.P2 : Authorization letter Ex.P3 : Cheque Ex.P3(a) : Signature of the accused Ex.P4 : Returned Memo Ex.P5 : Notice dated:31/08/2021 Ex.P6 & 7 : Postal receipts Ex.P8 : Postal Unserved covers Ex.P9 : GPA 20 C.C. No. 34237/2021 Ex.P10 : Loan Application Ex.P11 : Sanction letter Ex.P12 : Loan Agreement Ex.P13 : Statement of accounts Ex.P14 : Loan preclosure projection Witnesses examined on behalf of the accused:
- Nil-
Documents marked on behalf of the accused:
- Nil- Digitally signed
by K N
KN SHIVAKUMAR
SHIVAKUMAR Date: 2024.01.17
15:27:57 +0530
XXVII A.C.M.M
Bengaluru.
21 C.C. No. 34237/2021
11/01/2024
Comp: Sri. SE Adv.,
Accd: Sri.DK Adv.,
For Judgment.
22 C.C. No. 34237/2021
(Judgment pronounced in open court vide a separate judgment) O RD ER Acting u/s 255(1) of Cr.P.C. the accused is hereby acquitted of the offence P/U/S 138 of N.I.Act.
The bail bonds and surety bonds of the accused shall stand cancelled.
XXVII A.C.M.M., Bengaluru.