Bangalore District Court
M/S Edifice Foods And Beverages Pvt Ltd ... vs P.V.N.Vijaya Kumar on 12 February, 2025
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Crl.Apl.No.122/2024 JUDGMENT
KABC010018072024
IN THE COURT OF LXIX ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE (CCH 70)
Present:
Smt. Shirin Javeed Ansari, B.A.,LL.B (Hon`s) LL.M.,
LXIX Additional City Civil and Sessions Judge,
Bengaluru.
Dated this the 12th day of February, 2025
Crl.A.No.122/2024
Appellant : 1. M/s. Edifice Foods & Beverages Pvt.Ltd.,
A company registered under Companies
At. 1956, having its registered address
at Plot No.7B, Opposite to : M/s Renuka
Industries, KIADB Industrial Area,
Bashettihalli, Doddaballapura,
Bengaluru Rural District.
PIN- 561 203.
And also at:
No. 920, 2nd Main Road, 4th Block,
South Side of Sri Rama Mandira, BBMP
West, Rajajinagar, Bengaluru-560 010.
Represented by its Directors Mr. Jatin
Maganlal Popat Mr. Vikas Raj Popat
2. Mr. JAIN MAGANLAL POPAT,
S/o. Maganlal Kasandas Popat,
Aged about 47 years,
R/at. No. 920, Amrutha Nilayam,
2nd Main Road, 4th Block,
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Crl.Apl.No.122/2024 JUDGMENT
South Side of Sri Rama Mandira,
BBMP West, Rajajinagar,
Bengaluru-560 010.
3. Mr. VIKAS RAJ POPAT, (Dead)
S/o. Maganlal Kasandas Popat,
Aged about 47 years,
R/at. No. 920,
Amrutha Nilayam, 2nd Main Road,
4th Block, South Side of
Sri Rama Mandira, BBMP West,
Rajajinagar,
Bengaluru-560 010.
(Rep. by Sri. Abhishek Gowda, Advocate)
-V/s-
Respondent : Sri. P.V.N. VIJAYA KUMAR,
S/o. Sri. P.V.S. Sastry,
Aged about 49 years,
R/at. No. S-2, G.J. Nest - 3,
Lakshmanappa Nagar, Lottegollahalli,
RMV II Stage,
Bengaluru-560 094.
(Rep. by Sri. Chidambara G.S., Advocate)
JUDGMENT
The present appeal is filed by the appellant/accused No.2 under Section 374(3) of the Code of Criminal Procedure, 1973, challenging the judgment and order of conviction dated 25.11.2023, rendered by the learned XIX Additional Chief Metropolitan Magistrate, Bengaluru, in 3 Crl.Apl.No.122/2024 JUDGMENT C.C. No. 4597/2018, whereby the appellant was convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs. 28,10,000/-, out of which an amount of Rs. 28,00,000/- was directed to be paid as compensation to the complainant under Section 357(1)(b) of Cr.P.C., and in default of payment, the appellant was ordered to undergo six months simple imprisonment.
2. The accused in C.C.No.4597/2018 before the trial Court having preferred the instant appeal against the appellant as the appellant and the respondent are hereby assigned with their original ranks before the trial court that is the appellant as the accused and the respondent as original complainant in CC No.4597/2018 in the instant discussion for the purpose of Brevity and convenience to avoid the confoundation and perplexity.
3. The epitomized facts of the case of the complainant in CC No. 4597/2018before the trial court run thus; 3a. The accused No.2 (appellant herein) was a director of accused No.1 company, which was engaged in the manufacturing and marketing of fruit pulp juices. The 4 Crl.Apl.No.122/2024 JUDGMENT complainant, believing the representations and inducements of the accused, agreed to invest a sum of Rs. 1 crore in return for 33% equity shares in the company, as per the Share Subscription and Shareholders Agreement dated 05.05.2017.
3b. The complainant, in pursuance of the agreement, paid an initial sum of Rs. 20,00,000/- through cheque, which was duly encashed by the accused. However, the accused failed to comply with the statutory and contractual obligations, including the allotment of shares, which led to a dispute between the parties.
3c. Subsequently, another Business Agreement dated 28.07.2017 was executed, whereby the complainant was appointed as the C&F Agent for Karnataka, Telangana, and Andhra Pradesh, but the accused again defaulted on the terms of the agreement.
3d. As the accused failed to honour the terms of the agreements, on 13.09.2017, accused No.2 issued a cheque for Rs. 20,00,000/-( Rupees Twenty Lakhs only) towards repayment of the dues of the complainant. However, when 5 Crl.Apl.No.122/2024 JUDGMENT presented for encashment, the cheque was dishonoured with the bank endorsement "Payment stopped by the drawer".
3e. The complainant issued a demand notice on 28.12.2017, calling upon the accused to make the payment. However, the accused failed to comply, leading to the initiation of criminal proceedings under Section 138 of the N.I. Act.
3f. Upon filing of the private complaint under Section 200 of Cr.P.C., the Trial Court took cognizance of the offence, recorded the sworn statement of the complainant, and, finding prima facie material, issued process against the accused persons. The complainant examined himself as PW.1 and marked Ex.P1 to Ex.P27. The accused examined himself as DW.1 and produced Ex.D1 and Ex.D2.
3g. The trial court, after considering the evidence on record, convicted the appellant, holding that he failed to rebut the presumption under Section 139 of the N.I. Act and that the cheque was issued towards a legally enforceable debt.
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Crl.Apl.No.122/2024 JUDGMENT
4. Being aggrieved by the impugned judgment passed by the trial court, the appellant being accused before the trial court has preferred the instant appeal against the respondent who was the complainant before the trial court on the following;
GROUNDS OF APPEAL
a) The Trial Court has committed grave error in law in taking the cognizance of the offence and as such conviction is bad in law.
b). The Trial Court has erred in law in accepting and acting upon the evidence of PW.1 which is being in-admissible.
c). That the Evidence taken by the Trial Court is manifestly erroneous and argument employed by the Trial Court for convicting the Appellant No. 2 utterly unsustainable in law.
d). The Appellant No.2 further submits that the Trial Court based on the Evidence adduced by the Complainant has passed the said order as against the Appellant No. 2 which is bad under law.
e).The Appellant No.2 submits that the Respondent invested Rs. 20,00,000/- on the day of signing the agreement dated:
05.05.2017. However, the Respondent has failed to invest Rs. 30,00,000/- within 30 7 Crl.Apl.No.122/2024 JUDGMENT days from the date of executing shareholders agreement and as such no shares were issued to the Respondent as he breached the condition of the agreement dated: 05.05.2017.
f). The Appellant No. 2 submits that the Respondent wanted to come into his company as an investing Director as he did not want to lose the money invested. Even the Appellant No.2 wanted to give another opportunity to the Respondent to make good his investment. After a couple of meetings between the Appellant No.2 and Respondent another business Agreement dated:
28.07.2017 was entered between them and the Appellant No.2 agreed to give the Respondent the C & F agency for the areas of Andhra Pradesh, Telangana and Karnataka for the Fruit Pulp Juices. The Respondent has decided that he would join the company as a Director to learn the techniques of juice manufacturing as the Respondent himself confided with the Appellant No.2 that he was lacking the responsible knowledge and expertise in the field of manufacturing fruit pulp juices to take the business forward. With mutual consent and agreement the earlier agreements were cancelled and a new business agreement resolution was done by the Appellant No.2 and a third agreement dated: 13.09.2017 was entered into. At this point of time, it was specifically agreed that the Respondent would invest Rs.
40,00,000/- on signing the business agreement and within 10 days from the date of signing the same the Respondent would invest amount of Rs. 60,00,000/-. But, the Respondent had no experience in juice 8 Crl.Apl.No.122/2024 JUDGMENT manufacturing he was an inconvenience to the staff and management. That on 13.09.2017 the day of the signing of the Agreement in the factory premises in the presence of Respondent Associate One Mr. Swaminathan and the employees of the Appellant No.2 namely Karthik Gowda, Gangadhar and Miss. Uma the Respondent has induced and forced the Appellant No.2 to sign the agreement dated: 13.09.2017 and write a cheque for Rs. 20,00,000/- in favour of Respondent to symbolically cancel earlier agreements and believing the words of the Respondent, the Appellant No.2 signed the agreement and kept the cheque in question of Rs.20,00,000/- ready on the table. As the Respondent was adamant and had insisted on signing only after his signs the agreement and hands over the said cheque of Rs. 20,00,000/- in favour of Respondent, then only he would handover Rs. 40,00,000/- cheque in favour of the Appellant No.2 along with Agreement. Believing the words of the Respondent, the Appellant No.2 hand over all the original documents like earlier business agreement, board resolution etc., asking with agreement dated: 13.09.2017 and Rs. 20,00,000/- undated cheque to the Respondent. To the utter shock and surprise, the Respondent instead of giving back the agreement after signing and Rs. 40,00,000/- cheque along with it, as promised the Appellant No.2, the Respondent cunningly takes Rs.
20,00,000/- undated cheque given by the Appellant No.2 along with all original documents and agreement dated:
13.09.2017. Thereafter, the Respondent saying that the deal is off and that the Respondent would give back/return the 9 Crl.Apl.No.122/2024 JUDGMENT original documents and Rs. 20,00,000/-
undated cheque to the Appellant No.2 if the Appellant transfers Rs. 20,00,000/-in cash to the Respondent account.
g). The Appellant No.2 submits that he made stop payment in his bank. Even though, the Appellant No.2 has made stop payment, but the Respondent intentionally presented the cheque and claiming illegal money from the Appellant No.2, but the Appellant No.2 is not liable to pay any money to the Respondent. The Respondent himself committed breach of trust and cheated the Appellant No.2.
h). The Appellant No.2 further submits that due to the aforesaid act, the Appellant No.2 suffered loss in the business and he could not come out of the same. Further, the father and brother of the Appellant No.2 expired and also the Respondent did not bring further funds, the company went into huge loss and got closed. Hence, there is no legally enforceable debt in as much as the transactions are based on three different business agreements and is one of civil nature. Therefore, the Appellant No.2 is not liable to pay any amount to the Respondent.
i). The Appellant No. 2 further submits that the learned XIX Addl. Chief Metropolitan Magistrate, Bengaluru passed an order to deposit 20% of the Cheque amount. As per the orders of the Trial Court, the Appellant No.2 had paid Rs. 3,65,000/- (Rupees Three lakhs sixty five thousand only) before the Court below and the balance amount of Rs.35,000/- has to be deposited before the Trial Court.
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Crl.Apl.No.122/2024 JUDGMENT
j). The Appellant further submits that the appraisal of evidence on record by the Trial Court thus suffers from legality, manifest error and the finding of the Trial Court was therefore un-reasonable and perverse.
k). The Appellant No.2 further submits that the sentence passed by the Trial Court is too harsh and severe and the impugned Judgment is illegal, incorrect and improper and has resulted in miscarriage of justice. Hence,, the Appellant prays before this Court to call for the entire records and Set- aside the order of conviction and sentence and fine imposed by the Trial Court, to dismiss the complaint filed by the complainant/ respondent and to acquit the Appellant/Accused in the interest of justice and equity.
5. On the basis of the pleadings and the defense raised by the accused person and on the grounds of discussion made by the trial court in its judg ment the following points arise for my consideration.
1. Whether the appellant has made out sufficient grounds to condone delay of 24 days in filing the appeal?
2. Whether the judgment of conviction and order of sentence passed by the trial 11 Crl.Apl.No.122/2024 JUDGMENT court in C.C. No. 4597/2018 is sustainable in the eyes of law?
3. What order?
6. My findings to the above points are as under
Point No. 1: In the Affirmative Point No.2: In the Affirmative Point No.3: As per final order for the following, REASONS
7. POINT NO. 1:-Under the present application, the appellant has sought to condone the delay of 24 days in preferring the present appeal. The respondent complainant has not filed any objections denying the reasons for delay in filing the appeal.
8. The judgment was passed by the trial Court on 25.11.2023, the appeal was filed on 19.01.2024, there is delay of 24 days. The reason for delay has been explained in Para-2 of the affidavit that due to ill-health of his mother, he was unable to contact his counsel and give instructions to file this appeal. Meanwhile, his 12 Crl.Apl.No.122/2024 JUDGMENT counsel was also not able to contact the appellant. Hence, there is a delay in filing of present appeal. More over the respondent has not filed any objections to the present application. Due to this reason, the appeal is not preferred within the stipulated period of time. Hence, the appellant was unable to contact his counsel on time. Hence, the delay of 24 days is caused in preferring the present appeal.
9. It is settled principle of law that sufficient cause should be construed liberally. There is no presumption that the delay is deliberate. The meritorious matter cannot be dismissed on technicalities. This shows that it would have become very difficult for the applicant to prefer this appeal in the circumstances stated above. Considering the reasons for delay, it is sufficient. There is no negligence or inaction on part of the appellant. Accordingly, point No.1 is answered in the Affirmative.
10. POINT No.2:- According to the complainant, the accused No.2 (appellant herein) was a director of 13 Crl.Apl.No.122/2024 JUDGMENT accused No.1 company, which was engaged in the manufacturing and marketing of fruit pulp juices. The complainant, believing the representations and inducements of the accused, agreed to invest a sum of Rs. 1 crore in return for 33% equity shares in the company, as per the Share Subscription and Shareholders Agreement dated 05.05.2017.
11. The complainant, in pursuance of the agreement, paid an initial sum of Rs. 20,00,000/- (Rupees Twenty Lakhs only) through cheque, which was duly encashed by the accused. However, the accused failed to comply with the statutory and contractual obligations, including the allotment of shares, which led to a dispute between the parties.
12. Subsequently, another Business Agreement dated 28.07.2017was executed, whereby the complainant was appointed as the C&F Agent for Karnataka, Telangana, and Andhra Pradesh, but the accused again defaulted on the terms of the agreement. 14
Crl.Apl.No.122/2024 JUDGMENT
13. As the accused failed to honour the terms of the agreements, on13.09.2017, accused No.2 issued a cheque for Rs.20,00,000/-(Rupees Twenty Lakhs only) towards repayment of the dues of the complainant. However, when presented for encashment, the cheque was dishonoured with the bank endorsement"Payment stopped by the drawer".
14. The complainant issued a demand notice on 28.12.2017, calling upon the accused to make the payment. However, the accused failed to comply, leading to the initiation of criminal proceedings under Section 138 of the N.I. Act.
15. The key defences raised by the appellant in the present appeal are that the Trial Court erred in taking cognizance of the offence and the conviction is unsustainable in law. The evidence of PW.1 (complainant) was erroneously relied upon. The trial court misinterpreted the agreements entered between 15 Crl.Apl.No.122/2024 JUDGMENT the parties and failed to consider that the cheque in question was obtained by coercion and inducement. The complainant failed to fulfill his contractual obligations and hence had no legally enforceable claim. The Trial Court imposed an excessive and harsh sentence without considering the surrounding circumstances. The question that arises for determination in the present appeal is whether the findings of the Trial Court suffer from legal infirmities or errors in appreciation of evidence, warranting interference by this Court.
16. The appellant, being aggrieved by the said judgment of conviction and order of sentence, has approached this Court on various factual and legal grounds, primarily contending that the trial court erred in appreciating the documentary and oral evidence, failed to consider the defences raised by the accused, and wrongly applied the presumption under Section 139 of the N.I. Act.
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17. At the very outset, this Court is required to consider the presumption under Section 139 of the N.I. Act, which states that "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability."
18. The Hon'ble Supreme Court in Rangappa v. Sri Mohan (2010) 11 SCC 441 has categorically held that once the issuance of the cheque is admitted, the burden shifts upon the accused to prove that there was no legally enforceable debt.
19. In the present case, the accused admitted that the cheque in question was drawn on his bank account and bore his signature. This admission automatically attracts the presumption under Section 139 of the N.I. Act, which the accused was required to rebut by adducing cogent evidence.
20. The accused, in his defence, contended that the cheque was obtained through coercion and 17 Crl.Apl.No.122/2024 JUDGMENT inducement. However, this defence is unsubstantiated and improbable for the reasons that the accused failed to lodge any police complaint alleging coercion or inducement. The accused continued business negotiations with the complainant even after issuing the cheque, which contradicts his own defence. The accused did not produce any independent witness to corroborate his version.
21. The Hon'ble Supreme Court in K.N. Beena v. Muniyappan (2001) 8 SCC 458 has held that "A mere denial of liability or an assertion that the cheque was obtained by force will not be sufficient to rebut the statutory presumption under Section 139 of the N.I. Act."
22. The accused has also contended that the complainant breached contractual obligations. However, this is irrelevant in proceedings under Section 138 of the N.I. Act, as laid down in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89, where it was held that "The dishonour of a cheque gives rise to a strict liability, independent of the underlying transaction." In view of the 18 Crl.Apl.No.122/2024 JUDGMENT foregoing reasons, this Court finds no infirmity in the findings of the Trial Court Accordingly, Point No.2 is answered in the Affirmative.
23. In light of the above discussion, it is evident that the findings of the trial court are based on a sound appreciation of evidence and a correct application of the law. The appellant has failed to demonstrate any error or illegality in the judgment of the trial court. Hence, in view of this, I answer Point No.2 In the Affirmative.
24. POINT No.3: In view of the reasons discussed above, I hold that the judgment of conviction passed by the trial court is sustainable in law and warrants no interference. Hence, in view of this, I proceed to pass the following:
ORDER The application filed by the appellant under Sec.142(b) of the NI Act for condonation of delay of 24 days is hereby allowed. The delay of 24 days in filing the appeal is hereby condoned.
The appeal filed by the appellant under section 374(3) of Cr.P.C is dismissed.19
Crl.Apl.No.122/2024 JUDGMENT The judgment of conviction and sentence dated 25.11.2023 passed by the Learned XIX Additional Chief Metropolitan Magistrate, Bengaluru, in C.C. No. 4597/2018 is hereby confirmed and upheld.
The appellant is directed to comply with the order of compensation.
Send back the trial court records along with a copy of this judgment for further action. (Dictated to the Stenographer, Directly on the computer corrected by me, and then pronounced in open court on this the 12th day of February 2025.) (Shirin Javeed Ansari) 69th Addl. City Civil and Sessions Judge, Bangalore. CCH-70) 20 Crl.Apl.No.122/2024 JUDGMENT 21 Crl.Apl.No.122/2024 JUDGMENT Judgment pronounced in the open Court (Vide separate Judgment) ORDER The application filed by the appellant under Sec.142(b) of the NI Act for condonation of delay of 24 days is hereby allowed. The delay of 24 days in filing the appeal is hereby condoned.
The appeal filed by the appellant under section 374(3) of Cr.P.C is dismissed.
The judgment of conviction and sentence dated 25.11.2023 passed by the Learned XIX Additional Chief Metropolitan Magistrate, Bengaluru, in C.C. No. 4597/2018 is hereby confirmed and upheld.
The appellant is directed to comply with the order of compensation.
Send back the trial court records along 22 Crl.Apl.No.122/2024 JUDGMENT with a copy of this judgment for further action.
(Shirin Javeed Ansari) 69th Addl. City Civil and Sessions Judge, Bangalore. CCH-70)