Bangalore District Court
Trust Chemists And Druggists Ltd vs M/S Chaya Healthcare Pvt. Ltd., And ... on 11 January, 2024
C.C.NO.10132/2019
0
KABC030319752019
Presented on : 04-05-2019
Registered on : 04-05-2019
Decided on : 11-01-2024
Duration : 4 years, 8 months, 7 days
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LL.B.,LL.M
XXVIII A.C.M.M., Bangalore City.
DATED; THIS THE 11 TH DAY OF JANUARY-2024
C.C.NO.10132/2019
Complainant: M/s.Trust Chemists and Druggists Ltd.,
A company incorporated under the provisions
of the companies Act, having its
registered office No.3BM, 416, HRBR
Extension, 3rd Block, Hennur Banaswadi Main
Road, Kacharakanahalli, Bangalore-560043.
R/by its Authorized Signatory
Mr.D.Ramesh S/o D.Perraju, Age: 51 years.
E-mail: [email protected]
Phone No.9611104760.
(By M/s.Agraa Legal Associates,.)
V/s
Accused: 1.M/s.Chaya Healthcare Pvt.,Ltd.,
A Company incorporated under the
Provisions of the Companies Act,
Having registered office at No.6 C-335,
4th 'A' Main, 6th 'A' Cross, OMBR Layout,
Bhuvanagiri, Bangalore-560043.
R/by Managing Director,
Dr.Mahesh Chowdappa,
S/o Not known to the complainant,
C.C.NO.10132/2019
1
Age: Major, E-mail:[email protected]
(Phone No:080-4533 3339)
2.Dr.Mahesh Chowdappa,
S/o Not known to the complainant,
Age: Major, Managing Director,
Having his place of business at
No.6 C-335, 4th 'A' Main, 6th 'A' Cross,
OMBR Layout, Bhuvanagiri,
Bangalore-560043.
E-mail:[email protected]
Phone No.9880847339.
3.Mr.Chandrakanth Chowdappa
S/o Not known to the complainant,
Age: Major, Director,
Having his place of business at
No.6 C-335, 4th 'A' Main, 6th 'A' Cross,
OMBR Layout, Bhuvanagiri,
Bangalore-560043.
E-mail:[email protected]
Ph.No.080-4533 3339.
4.Smt.Hemalatha Chowdappa
S/o Not known to the complainant,
Age: Major, Director,
R/at No.585, 6th Cross, 10th Main,
Opp: Miranda High School, HAL,
3rd Stage, New Thippasandra,
Bangalore-560075.
E-mail:[email protected]
Phone No.080-4533 3339.
(Dead).
5.Mr.Batlabavanahalli Muniswamy Gowda,
S/o Not known to the complainant,
Age: Major, Director, R/at No.855, 5th Cross, 5th
Main, H.P.Gas Road, Indiranagar, 1st Stage,
Bangalore-560038.
E-mail:[email protected]
Phone No.080-4533 3339.
(A.2 to 4 by Sri.S.Srinivasa.,Adv.,)
(A-5 by Sri.Naveen.K.R.,Adv.,)
C.C.NO.10132/2019
2
:JUDGMENT:
This case arises out of the private complaint filed by the complainant against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant is a company incorporated under the provisions of the companies Act, 1956 and is interalia engaged in the business of running a chain of medical shops and pharmacies in Bangalore. The complainant company issued the board resolution in favour Mr.D.Ramesh. The accused No.1 is a private limited company that runs and operates a specialist health center/hospital under the name and style of 'Chaya Super Specialty Hospital' in Bangalore. The accused No.2 is the Managing Director of the accused No.1 company and has represented it in all transactions between the complainant and accused No.1. The accused No.3 to 5 are the directors of the accused No.1 company. Along with accused No.2, the accused No.3 to 5 are all responsible for the day today affairs of the accused No.1 and have been actively involved in the transactions between the complainant and the accused No.1. On the basis of certain agreements between the complainant and accused company, the complainant had opened a medical shop/pharmacy in C.C.NO.10132/2019 3 the premises of the accused's hospital and supplied medicines to the hospital and the patients therein. It is further stated that the medicines were sold on a credit basis. The complainant and the accused companies had also entered into a profit sharing agreement in respect of the profits generated by the accused No.1 company. However, the accused No.1 regularly defaulted on making the payments due to the complainant company and the debt of the accused No.1 company continued to steadily increase. Further stated that the complainant company issued repeated reminders and requested the accused No.1 company and its directors to clear the dues. But the accused continued to dodge the payments on one pretext or the other, the complainant company got issued a demand notice on 21.06.2018 to the accused No.1 company under the provisions of the Insolvency and Bankruptcy code, 2016, calling upon them to pay the total outstanding amount of Rs.1,37,51,304.25/-. The accused company on 26.06.2018 got issued a reply notice to the counsel for the complainant company denying their liability. However, in the said reply it was communicated to the complainant company that the accused is willing to discuss the dispute in question in person and achieve an agreement.
3. It is further stated that the representatives of the complainant met the accused No.2 and other representatives of the accused No.1 company to C.C.NO.10132/2019 4 reconcile the accounts between the companies. The accused No.1 admitted its liability towards the complainant company and the accused No.2 undertook to make the payments due to the complainant in installments. This resulted in the parties entering into a Memorandum of Understanding dated: 09.07.2018. In terms of the said Memorandum of Understanding, the accused undertook to make payment of Rs.1,18,79,535/- to the complainant in tranches/ installments. The accused undertook to make payment for a sum of Rs.80,79,535/- on or before 31.01.2019 in six monthly installments starting from August 2018. The remaining amount of Rs.38,00,000/- was to be paid by the accused on or before 31.03.2019. The accused issued two cheques for a sum of Rs.80,79,535 and Rs.38,00,000/- respectively and it was agreed that in case of default in paying the monthly installments to the complainant for two consecutive months, the complainant would be entitled to present the said cheques towards discharge of the accused's liability to the complainant. The said Memorandum of Understanding was signed by the accused No.2 on behalf of the accused No.1 company and accused No.3 has affixed his signature as one of the witness.
4. It is further stated that the accused issued cheque bearing No.004846 for a sum of Rs.80,79,535/- and the cheque bearing No.004845 for a sum of Rs.38,00,000/-, both cheques were drawn on the C.C.NO.10132/2019 5 National Co-operative Bank Ltd., Banaswadi Branch, Bangalore in favour of the complainant. The said cheques were jointly signed by the accused No.2 and 3 in their capacity as Directors of accused No.1 company. Further the accused defaulted in making monthly payments as per the terms of the Memorandum of Understanding from the month of August, 2018, itself, i.e., the very first month after execution of the Memorandum of Understanding. The accused only made a partly payment of Rs.50,000/- to the complainant instead of the promised minimum payment of Rs.7,00,000/- per month. The complainant's repeated reminder and requests to the accused fell on deaf ears and no payment whatsoever was made by the accused from September, 2018 onwards. As per the terms of the Memorandum of Understanding, on the account of the conduct of the accused, the complainant was constrained to present the aforesaid cheques to its banker for encashment. Thereafter, the complainant presented the cheque bearing No.004846 dated: 05.10.2018 for a sum of Rs.80,79,535/- drawn on the National Co-operative Bank, Banaswadi Branch, Bangalore through its banker the State Bank of India, Kumara Park Branch. But the said cheque came to be dishonoured on 06.10.2018 for the reasons Exceeds Arrangement in the account of the accused No.1. The complainant immediately contacted the accused No.2 and 3 and informed them C.C.NO.10132/2019 6 regarding the dishonor of the said cheque. Subsequently the accused No.2 issued an apology by way of e-mail dated: 08.10.2018 apologizing for the dishonor of the said cheque and requested for more time for repayments of the outstanding amounts. It once again acknowledged its liability towards the complainant. Despite repeated attempts and reminders to the accused to make good the cheque amount, the accused continued to prevaricate and evade the representatives of the complainant company. Thereafter, the complainant on 12.10.2018 issued a legal notice to the accused through their counsel by RPAD calling upon them to make payment of the said cheque within 15 days from the date of receipt of the said notice. The notice was received by the accused company on 13.10.2018. The accused neither responded to the said demand notice nor came forward to make the payment due to the complainant. Hence, the complainant again got issued a second legal notice on 02.11.2018 to the accused No.2 to 5. The said notice was received by the accused No.2 to 4 on 05.11.2018 and the said notice was attempted to be delivered to the accused No.5. But the accused No.5 has refused to receive the same. After receipt of the second legal notice also none of the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the C.C.NO.10132/2019 7 present complaint came to be filed before this court on 23.11.2018.
5. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R.No.1149/2019. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 29.04.2019 to register the case in Register No.III.
6. Thereafter, summonses were issued to the accused persons and they have appeared before the court through their counsel and secured bail. They have furnished its necessary papers as complied under section 208 of Cr.P.C,. Thereafter, the plea of the accused was recorded by the court. They have pleaded not guilty and make a defence.
7. The complainant in support of its case, have examined its Authorized signatory as PW.1 and got marked 19 documents at Ex.P.1 to 19 and one more witness examined as PW.2 and got marked 03 documents at Ex.P.20 to 22 and closed its side.
8. After closer of the evidence of the complainant, the statement of the accused under section 313 of Cr.P.C., was recorded. They have denied the incriminating evidence appearing against them. In their defence, the accused No.2 is examined as DW.1 and no documents were marked on their behalf. But during C.C.NO.10132/2019 8 the course of cross examination of PW.1 got marked a document at Ex.D.1 by way of confrontation.
9. I have heard the arguments on both the sides and also perused the material placed on record.
10. The learned counsel for the accused has relied upon the Crl.A.No.2580/2011 (D.D 11.12.2020), Cri.A.No.1497/2022 (D.D 11.10.2022) and (2014) 11 SCC, Cri.A.No.73/2007 with No.1437/2013 (D.D 13.09.2013).
11. The accused No.4 is reported to be dead. Hence, case against the accused No.4 is stands abated.
12. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt or liability.?
2.Whether the complainant further proves that the accused had issued the cheque-
Ex.P.5, towards the discharge of the said legally enforceable debt or liability.?
3.Whether the complainant further proves that the cheque-Ex.P.5 was dishonored for the reasons "Exceeds Arrangement" in the account of the accused No.1 and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of the legal notice.?
4.Whether the accused have thus committed C.C.NO.10132/2019 9 an offence punishable under section 138 of N.I.Act.?
5.What order?
13. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following;
:REASONS:
14.POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts, I have taken these two points together for common discussion. The case of the complainant is that they were acquainted with the accused. Further the complainant is a company incorporated under the provisions of the companies act and is interalia engaged in the business of running a chain of medical shops and pharmacies in Bangalore. The accused No.1 is a private limited company that runs and operates a specialist health center/hospital under the name and style of 'Chaya Super Specialty Hospital' in Bangalore. The accused No.2 is the Managing Director of the accused No.1 company and has represented it in all transactions between the complainant and accused No.1. The accused No.3 to 5 are the directors of the accused No.1 company. The C.C.NO.10132/2019 10 accused No.3 to 5 are also responsible for the day today affairs of the accused No.1 and have been actively involved in the transactions between the complainant and the accused No.1. On the basis of certain agreements between the complainant and the accused company, the complainant had opened a medical shop/pharmacy in the premises of the accused's hospital and supplied medicines to the hospital and the patients therein. The medicines were sold on a credit basis and the complainant and the accused companies had also entered into a profit sharing agreement in respect of the profits generated by the accused No.1 company. But, the accused No.1 regularly defaulted on making the payments due to the complainant company and the debt of the accused No.1 company continued to steadily increase. Further the complainant company issued repeated reminders and requested the accused No.1 company and its directors to clear the dues. But the accused continued to dodge the payments on one pretext or the other, the complainant company got issued a demand notice to the accused No.1 company under the provisions of the Insolvency and Bankruptcy code, calling upon them to pay the total outstanding due amount of Rs.1,37,51,304.25/-. The accused company got issued a reply notice to the counsel for the complainant company denying their liability. However, in the said reply it was communicated to the complainant company C.C.NO.10132/2019 11 that the accused is willing to discuss the dispute in question in person and achieve an agreement'.
15. Further the representatives of the complainant met the accused No.2 and other representatives of the accused No.1 company to reconcile the accounts between the companies. The accused No.1 admitted its liability towards the complainant company and the accused No.2 undertook to make the payments due to the complainant in installments. This resulted in the parties entering into a Memorandum of Understanding dated: 09.07.2018. In terms of the said agreement, the accused undertook to make payment to the complainant in tranches/installments. The accused undertook to make payment of Rs.80,79,535/- on or before 31.01.2019 in six monthly installments starting from August 2018. The remaining of Rs.38,00,000/- was to be paid by the accused on or before 31.03.2019. The accused issued two cheques for sum of Rs.80,79,535 and Rs.38,00,000/- respectively and it was agreed that in case of default in the accused paying the monthly installments to the complainant for two consecutive months, the complainant would be entitled to present the said cheques towards discharge of the accused's liability to the complainant. The said Memorandum of Understanding was signed by the accused No.2 on behalf of the accused No.1 company and accused No.3 has affixed his signature as one of the witness.
C.C.NO.10132/2019 12
16. Further the said cheques were jointly signed by the accused No.2 and 3 in their capacity as Directors of accused No.1 company. Further the accused defaulted in making monthly payments as per the terms of the Memorandum of Understanding from the month of August, 2018, after execution of the Memorandum of Understanding. The accused only made a partly payment of Rs.50,000/- to the complainant instead of the promised minimum payment of Rs.7,00,000/- per month. As per the terms of the Memorandum of Understanding, on the account of the conduct of the accused and the accused No.2 repeated failure to fulfill their commitments and obligations, the complainant was constrained to present the aforesaid cheques to its banker for encashment. Thereafter, the complainant presented the cheque in question through its banker. But the said cheque came to be dishonoured for the reasons "Exceeds Arrangement" in the account of the accused No.1. The complainant immediately contacted the accused and informed them regarding the dishonor of the said cheque. Subsequently the accused No.2 issued an apology by way of e-mail apologizing for the dishonor of the said cheque and requested for more time for repayments of the outstanding amounts. Despite repeated attempts and reminders to the accused to make good the cheque amount, the accused continued to prevaricate and evade the representatives of the complainant C.C.NO.10132/2019 13 company. Thereafter, the complainant got issued a legal notice to the accused through their counsel by RPAD calling upon them to make payment of the said cheque within 15 days from the date of receipt of the said notice. The notice was received by the accused. The accused neither responded to the said demand notice nor came forward to make the payment due to the complainant. Hence, the complainant once again got issued a legal notice to the accused. The said notice was received by the accused. After receipt of the second legal notice also none of the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
17. In support of the case, the complainant have examined its Authorized signatory as P.W.1 and 19 documents were marked at Ex.P.1 to 19. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. The complainant's have examined its Senior Manager as PW.2 and 3 documents were marked at Ex.P.20 to 22. In the chief examination P.W.2 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the resolution passed by the complainant company. Ex.P.2 is the notice issued by the complainant company under the Insolvency & Bankruptcy Code 2016 dated:
21.06.2018 to the accused. Ex.P.3 is the reply given by C.C.NO.10132/2019 14 the accused. Ex.P.4 is the Memorandum of Understanding dated: 09.07.2018. Ex.P.5 is the cheque in question issued by the accused in favour of the complainant on 05.10.2018 for a sum of Rs.80,79,535/-. Ex.P.5(a) and 5(b) are the signatures of the accused No.2 and 3. Ex.P.6 is the bank memo dated: 06.10.2018 informing of the dishonor of the cheque as "Exceeds Arrangement" in the account of the accused No.1. Ex.P.7 is the E-mail sent by the accused to the complainant. Ex.P.8 is the office copy of legal notice dated: 12.10.2018. Ex.P.8(a) is the postal receipt. Ex.P.9 is the postal acknowledgment. Ex.P.10 is the track consignment. Ex.P.11 is the another office copy of the legal notice dated: 02.11.2018. Ex.P.12 are the postal receipts. Ex.P.13 to 16 are the postal acknowledgements. Ex.P.17 are the track consignments. Ex.P.18 is the returned legal notice.
Ex.P.18(a) is the postal cover. Ex.P.19 is the complaint. Ex.P.20 is the appointment order given by the complainant company. Ex.P.21 is the statement. Ex.22 is the ledger account.
18. The accused No.2 is examined himself as DW.1 by way of affidavit and no documents were marked on their behalf and during the cross examination of PW.1 got marked a document at Ex.D.1 by way of confrontation. Ex.D.1 is the amenities agreement.
C.C.NO.10132/2019 15
19. The accused have taken the defence that as per the memorandum of understanding they have issued two security cheques in favour of the complainant. Further defence of the accused is that as per the profit sharing agreement the complainant not strictly follow the terms and conditions. Further the complainant failed to adherer the terms and conditions stipulated in the memorandum of understanding and they have failed to share the profit ratio of 50:50. Further despite several request and reminders the complainant neither provided the details of the profit nor shared the profit in the ratio of 50:50 and dishonestly with held the profit without adjusting the same to the outstanding due amount. Further the complainant have misused the said security cheque and filed false complaint against the accused. The accused in their defence have not disputed Ex.P.5- cheque have been issued by the accused. They also does not dispute signatures appearing on the said cheque. But, they have taken up the contention that they had issued the cheque in question in favour of the complainant at the time of entering into the memorandum of understanding as a security. Further they have never admitted regarding repayment of the amount as contended by the complainant. Further contended that there is no due from the accused.
20. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly C.C.NO.10132/2019 16 required to prove the existence of legally enforceable debt or liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that after the repeated request made by the complainant, the accused have not paid any amount to the complainant. Further argued that the accused in order to repayment of debt/liability had issued the cheque in question in favour of the complainant. He further argued that the accused have not denied the cheque-Ex.P.5 being their cheque and drawn on the account of the accused No.1 company. When the signatures is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused have failed to elicit anything in the cross examination of P.W.1 and 2 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act. The counsel for the complainant further argued that the accused have failed to produce any believable evidence that they had issued the cheque in question in favour of the complainant at the time of entering into the memorandum of understanding as a security and why they have not returned back the same is not clear. He further argued that under section 139 of N.I.Act, there is a presumption that the cheque has been issued for discharge of legally enforceable debt/liability. In the present case, the accused have not C.C.NO.10132/2019 17 disputed Ex.P.5 being their cheque and drawn on the account of the accused No.1. The said presumption is available to the complainant.
21. Further he has argued that the accused have failed to prove the very fact that Ex.P.5-cheque was given to the complainant for the purpose of security. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that they have already paid the amount to the complainant and the complainant not provided the details of profit and shared and the complainant with held the profit without adjusting the same to the outstanding due amount and they had given the cheques to the complainant for the purpose of security. As such, very defence of the accused is not believable. The learned counsel for the complainant further argued that on the basis of agreements between the complainant and the accused company, the complainant had opened a pharmacy in the premises of the accused hospital and supplied the medicines to the hospital and patient. Further argued that the medicines were sold on a credit basis and the complainant and the accused company had entered into a profit and sharing agreement in respect of the C.C.NO.10132/2019 18 profits generated by the accused No.1 company. But the accused No.1 regularly defaulted to making the payment due to the complainant company. Thereafter, the complainant company got issued a reminder notice to the accused company calling upon them to pay the total outstanding amount. Thereafter the accused company got issued reply notice by denying the their liability. Further argued that the representative of the complainant company met the accused company to reconcile the account between the companies. Then the accused admitted its liability towards the complainant company and the accused No.2 undertook to make the payments due to the complainant in installments. In this regard the parties entering in to a memorandum of understanding as per Ex.P.4. In terms of the said memorandum of understanding the accused undertooks to make payment of Rs.1,18,79,535/- to the complainant in installments. The accused undertook to make payment of a sum of Rs.80,79,535/- on or before 31.01.2019 in six monthly installments. The remaining amount of Rs.38,00,000/- was to be paid on or before 31.03.2019. The accused also issued two cheques including cheque in question in favour of the complainant and it was agreed that in case of defaulted in the accused paying the monthly installments to the complainant for two consecutive months, the complainant entitled to present the said C.C.NO.10132/2019 19 cheques towards discharge of the accused liability. The accused No.2 was signed the said memorandum of understanding on behalf of the accused No.1 and the accused No.3 has affixed his signature as one of the witness.
22. Further argued that the accused defaulted in making monthly payments. The accused only made a payment of Rs.50,000/- to the complainant instead of the promised minimum payment of Rs.7,00,000/- per month. The complainant repeatedly requests to the accused to pay the amount. But the accused failed to pay the said amount. Hence, the complainant have presented the said cheque for encashment through its banker. Further argued that the accused have not produced any believable evidence to prove their defence. Upon careful perusal of the entire evidence of records both the oral as well as documentary evidence the complainant have proved their case. The accused have admitted that they had issued the cheque in question in favour of the complainant and same was returned with an endorsements as Exceeds arrangement in the account of the accused No.1. Thereafter, the complainant got issued a legal notice to the accused. Inspite of service of notice, the accused neither reply to the notice nor paid the cheque amount. Hence, the complainant have filed this case before this court. It is further argued that the burden of proving that the cheque has not been issued for debt or a liability is C.C.NO.10132/2019 20 on the accused. As per section 139 of N.I.Act, the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or a liability. Therefore, in compliance under section 138 the court has to presume that the cheque had been issued for a debt or liability. The said presumption is rebuttable and the burden of proving that the cheque had not been issued for a debt or liability is on the accused. It was further argued that the accused have seriously disputed that the complainant received the cheque in question at the time of entering into the memorandum of understanding as a security and company have misused the cheque. However, the accused have miserable failed to prove the said fact. Further the materials available on record clearly established that the accused admitted transactions, they also admit the issuance of the cheque to the complainant. The initial burden is the complainant to prove that the cheque was issued in favour of the complainant towards payment of due amount, then onus shifts upon the accused to prove their defence and it is for the accused to rebut the legal presumption enumerated under section 138 of Negotiable Instruments Act. As per presumption the cheque was issued for discharge of legal liability and it is for the accused to rebut the said presumption by adducing the cogent and convincing evidence.
C.C.NO.10132/2019 21
23. It was further argued that on 11.08.2022 both the counsels have filed a joint memo. In the joint memo the accused have specifically admits transaction and they have also admits their legal liability to the complainant. Further as per joint memo the accused have issued the cheques in favour of the complainant. The cheques issued by the accused as per joint memo also dishonored. Under facts and circumstances the complainant have proved that in order to repayment of said amount the accused had issued the cheque in question in favour of the complainant. Though the accused have contended that inspite of several request and reminders the complainant neither provided the details of the profit nor shared the profit in the ratio of 50:50 as per the memorandum of understanding and the complainant with held the profit without adjusting the same to the outstanding due amount, if the payment due by the complainant and they have not provided the details of profit and shared profits in the ratio of 50:50 is genuine, the accused have not produced any piece of papers to prove the same except Ex.D.1. On the contrary, the accused have utterly failed to prove their probable defence that the complainant have taken the cheque in question as a security only. It is pertinent to note that the accused have admitted the transactions and the accused have issued the cheque produced at Ex.P.5 and the said cheque was issued for discharge of legally recoverable C.C.NO.10132/2019 22 debt and the accused have not produced any evidence to prove their probable defence. Under these circumstances the complainant have established their case in compliance of 138 of the N.I.Act. Hence, he prays to convict the accused and direct the accused to pay twice the cheque amount.
24. The learned counsel for the accused has argued that there was no legally enforceable debt or liability to the complainant from the accused for which the cheque-Ex.P.5 was issued. Further argued that the accused had issued the cheque to the complainant at the time of entering into the memorandum of understanding as a security. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt or liability, for which the cheque came to be issued. The complainant created all the documents and filed this false complaint against the accused. Therefore, from the evidence placed on record, the very repayment of amount to the complainant is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt. The complainant have utterly failed to prove their case against the accused. Further argued that the complainant is due of the shared profit in the ratio of 50:50 as per the memorandum of understanding. Hence, question of C.C.NO.10132/2019 23 repayment of the amount and issuance of the cheque does not arise at all. The complainant have misused the said security cheque issued by the accused and false case has been filed against the accused. Hence, offence under section 138 of N.I.Act is not attracted. Further argued that the accused have not issued the cheque in question voluntarily and the amount mentioned in the cheque is not filled up by the accused. The accused not issued the cheque for the legally enforceable debt or liability voluntarily.
25. Further argued that at the request of the complainant a permission was accorded to open medical shop in the premises of the accused No.1 and the complainant agreed to supply the medicines to the hospital and patient. Accordingly, a profit sharing agreement was entered between the accused No.1 and the complainant. As per the profit sharing agreement the complainant agreed to supply the medicines to the hospital and upon supply within 30 days and profit shall be shared equally between the accused No.1 and the complainant. Thereafter, a memorandum of understanding was entered into between the accused and the complainant on 09.07.2018. The accused No.2 in the capacity of the director/s of the accused No.1 delivered two security cheques in favour of the complainant. As per the memorandum of understanding clause-5, the parties have agreed that till the accused No.1 pays all the outstanding dues C.C.NO.10132/2019 24 amount, the profit sharing for the sales made will continue to be 50:50. The said profit sharing ratio will be revised to 60:40 only after clearing the said payments. Further argued that the complainant is strictly to adhere to the terms and conditions as stipulated in the memorandum of understanding. But the complainant failed to adhere the terms and conditions stipulated in the memorandum of understanding and they have failed to share the profit in the ratio of 50:50 at least to share the details of the profit accrued on the business from 09.07.2018. The accused inspite of several request and reminders to the complainant they have not provided the details of profit and they have not shared the profit to the accused.
26. Further argued that the complainant with held the profit without adjusting the same to the outstanding due amount. Further argued that till today the complainant have not provided the details of profit to the accused and with held the amount which is legally entitled by the accused. As on the date of presentation of the cheque there was no legally enforceable debt payable to the complainant. If at all the complainant would have shared the profit as per the terms of memorandum of understanding or adjusted the same towards the outstanding covered under the cheque, there could not be any legally enforceable debt payable to the complainant. Further argued that knowing well that there is no legally enforceable debt by the accused C.C.NO.10132/2019 25 No.1 as on the date of presentation of the cheque in question, the complainant deliberately presented the cheque to the bank and caused legal notice to the accused. Further argued that accused No.3 and 5 though the directors of the company, have not involved into a day today business affairs of the company. In order to harass them the complainant deliberately arrayed them as the accused and issued a legal notice to them, though in an earlier notice they were not made as a party. Further argued that there was no legally enforceable debt as on the date of presentation of the cheque and falsely filed the complaint against the accused. Further argued that the amount mentioning the cheque not issued to the complainant neither recoverable by the complainant nor payable to the accused. The amount shown under the cheque is also not a debt. The accused have not bound any money. The complainant is not lawfully entitled for any payment. Hence, the accused have not committed any offence.
27. It is further argued that P.W.1 is neither director nor employee of the company. Hence, P.W.1 is not having any personal knowledge about the transaction. Hence, without having the personal knowledge about the transaction he is not having any right to prosecute the case against the accused. Further argued that PW.1 is only in order give trouble to the accused and with an intention of making illegal C.C.NO.10132/2019 26 money from the accused filed this false case. This is not permissible under the law. Further argued that the cheque in question was collecting from the accused at the time of entering into the memorandum of understanding as security measure. The complainant created all the documents and filed this false case against the accused. Further argued that the accused have already paid entire amount to the complainant. Hence, question of the repayment of the amount as contended by the complainant does not arise at all. Further argued that the complainant have not produced any documents regarding registration of the company. Hence, case of the complainant is not maintainable in the eye of law. Therefore, from the evidence placed on record, the very due amount by the accused is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt or liability. Hence, he prays to dismissed the complaint and acquit the accused.
28. In the case on hand the complainant and the accused having some transactions has not been seriously disputed by the accused. Further the accused have not seriously disputed they had issued the subject cheque in favour of the complainant. Whereas, the accused have contended that the complainant had taken the chaques as a security at the time of entering into the agreement. The accused have specifically C.C.NO.10132/2019 27 denied having debt or liability had issued the cheque- Ex.P.5 on 05.10.2018 towards the discharge of any debt or liability. They contends that the accused had issued the cheque for the purpose of security as was misused by the complainant and a false complaint was filed.
29. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt or liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant's in order to prove its case, have examined its Authorized signatory and Senior Manager as PW.1 and 2 and got marked 22 documents at Ex.P.1 to 22. In chief examination, P.W.1 and 2 have repeated the averments made by the complainant in the complaint. In the present case, the accused have not disputed the cheque-Ex.P.5 being their cheque drawn on the account of the accused No.1. The said presumption is available to the complainant.
30. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt or liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforcible debt/liability. In the case on hand also the accused have disputed the existence of legally enforceable debt/liability, for which cheque-Ex.P.5 was C.C.NO.10132/2019 28 issued. In order to prove their defence, the accused No.2 has adduced his oral evidence before this court and marked the document at Ex.D.1. Except Ex.D.1 they have failed to produce any documents to prove that there is no due from the accused and they had issued the cheque in question at the time of entering the agreement as security purpose only. PW.1 during his cross-examination has specifically denied the suggestions made to him that the cheque in question was issued for the purpose of security only.
31. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further the accused have to produce some probable evidence, which creates doubt about the existence of legally enforceable debt or liability. In the present case, as per the defence taken by the accused is that they had given the cheque to the complainant for the purpose of security. Except, said defence, they have not produced any materials to prove such defence. If the complainant had taken the cheque for the security purpose only, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant C.C.NO.10132/2019 29 for misusing of the said cheque. On which date the accused came to knew about the alleged illegal act of the complainant, they did not whisper about on what date they came to know the alleged cheque illegally misused by the complainant. Admittedly the accused are the businessmen and they are having a knowledge of the financial transaction, why they have given the cheque to the complainant without anticipating the consequence is not explained by them. So also, they have not stated anything as to what steps they took to receive back the cheque. Moreover, immediately after the alleged cheque misused by the complainant they have not lodge complaint before concerned police station. No steps have been taken to receive back the cheque, after they came to know about the same.
32. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, (AIR 2010 SC 1898), the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that C.C.NO.10132/2019 30 mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque- Ex.P.5 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant case.
33. Further the accused have taken contention that the cheque was given to the complainant for the purpose of security at the time of entering into the memorandum of understanding. Hence, offence under section 138 of N.I.Act is not attracted. In this regard once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that cheque was issued by the drawer for legally payable debt or liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was C.C.NO.10132/2019 31 given only for security purpose, but without producing any documents, then the accused have to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
34. Further in considering the scope of the presumption to be raised under section 139 of the Act and nature of evidence to be adduced by the accused to rebut the presumption, in Kumar Exports V/s Sharma Carpets, reported in (2009) 2 SCC 513 held as under;
"14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mention in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The terms "presumption" is used to designate an inference, affirmative or dis-affirmative of the existence of a fact, conveniently called the "presumed fact"
drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means 'taking as true without examination or proof.'
18. Applying the definition of the word "proved" in section 3 of the Evidence Act to the provisions of section 118 and 139 of the Act, it becomes evident that in a trial under section 138 of the act a presumption will have to be made that every Negotiable Instruments was made or drawn for C.C.NO.10132/2019 32 consideration and that it was executed for discharge of debt or liability once the execution of Negotiable Instruments is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumption under sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
19.The use of the phrase "until the contrary is proved" in section 118 of the Act and use of the words "unless the contrary is proved" in section 139 of the act read with definitions of "May presume" and "Shall presume" as give in section 4 of the Evidence Act, makes it at once clear that presumption to be raised under both the provisions are rebuttable. When a presumptions is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not presumed, the purpose of the presumption is over.
20. The accused in a trial under section 138 of the act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him.
C.C.NO.10132/2019 33 However, the court need not insist in every case that the accused should disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumption, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstance of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstance so relied upon are compelling the burden may likewise shift again on to the complainant. The accused may also rely upon presumption of fact, for instance, those mentioned in section 114 of the evidence act to rebut the presumptions arising under section 118 and 139 of the Act".
35. In the present case of the complainant, on the basis certain agreements between the complainant and the accused company, the complainant had opened a medical shop/pharmacy in premises of the accused's hospital and supplied medicines to the hospital and patient. Medicines were sold on a credit basis and the complainant and the accused companies had also entered into a profit sharing agreement in respect of the profits generated by the accused No.1. The accused No.1 defaulted on making payments due to the C.C.NO.10132/2019 34 complainant company. On 09.07.2018 the complainant and the accused entering into a memorandum of understanding, in terms of said agreement the accused undertook to make payment of Rs.1,18,79,535/- to the complainant in installments. The accused undertook to make payment of Rs.80,79,535/- on or before 31.01.2019 in six monthly installments and remaining Rs.38,00,000/- was to be paid by the accused on or before 31.03.2019. The accused has also issued two cheque including cheque in question and it was agreed that in case of default in paying the monthly installment the complainant would be entitled to present the said cheques. The accused defaulted in making payment. In token of their acceptance of said agreement, the accused had issued the cheque in question. However, it has been contended by the accused in their defence that the cheque was taken by the complainant for the purpose of security at the time of entering into the memorandum of understanding. The oral and documentary evidence adduced by the complainant are sufficient to prove that the cheque was issued for legally enforceable debt. With evidence adduced by the complainant there would be presumption under section 139 of N.I.Act. Further the accused did not adduced any cogent and reliable evidence, it is not sufficient to rebut the presumption raised under section 139 of the N.I.Act. It is quite unbelievable that in a business/mercantile transaction the accused even after C.C.NO.10132/2019 35 making payment did not insist for the return of the cheque. It is quite improbable that the accused did not take any steps to get back said cheque.
36. Further the complaint filed within statutory period. That consequent to the non-payment of the cheque amount so demanded by the complainant within the statutory period, the complainant has filed the present complaint, which is well within limitation. Hence, contention of the accused cannot be considered that the cheque in question was taken by the complainant at the time of entering into the memorandum of understanding for the purpose security.
37. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to C.C.NO.10132/2019 36 the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
38. In the case of Kalamani Tex V/s P. Balasubramanian, reported in (2021) 5 SCC 283 has observed that section 138 R/w 139 of N.I.Act, presumption as to legally enforceable debt, effect of admission regarding signature on the cheque, in such situation, court held that required to presume that the cheque was issued as consideration for legally enforceable debt.
"13. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under section 118 and 139 of N.I.Act. The statute mandates that once the signature(s) of an accused on the cheque/Negotiable Instruments are established, then these "reverse onus"
clauses become operative. In such situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallized by this court in Rohitbhai Jivanlal Patel V/s state of Gujrat, (2019) 18 SCC 106, Para 18: (2020) 3 SCC (Civil) 800:
(2020) 3 SCC (Cri) 575) in the following words:
(SCC pp. 120-21, para 18)".
"18. In case at hand, even after purportedly drawing the presumption under section 139 of the N.I.Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want to examination of relevant witness who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance C.C.NO.10132/2019 37 with principle of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused".
39. In the present case also, as the accused never disputed their signatures and did not deny issuing cheque from the account of the accused No.1.
The accused did not dispute cheque return memo also. The cheque was returned for the reasons "Exceeds arrangement" in the account of the accused No.1. Thus, the act clearly lays down presumptions in favour of the complainant with regard to the issuance of cheque by the accused towards the discharge of the liability in favour of the complainant. Further under scheme of the Act, the onus is upon the accused to rebut the presumption in favour of the complainant by raising a probable defence. Such being the legal position, it would be pertinent to refer to the defences raised by the accused to rebut the presumptions in favour of the complainant in this case.
40. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish their defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
C.C.NO.10132/2019 38
41. It is not in dispute that bounced cheque belongs to the bank account of the accused No.1. It is also not in dispute that signatures appearing on the bounced cheque is the signatures of the accused No.2 and 3. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reasons stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused have not produced any documents in this regard. The accused in order to prove their defence they have failed to produce any believable evidence before this court.
42. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of the cheque and filing a false case is not possible. The accused admittedly having a knowledge of business. It is implies, they are conversant with financial transaction. If the complainant misused the said cheque and had not return the same, inspite of collecting the cheque leaves from them, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque and documents. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because they did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.5- C.C.NO.10132/2019 39 cheque. Further they could have issued a notice to their banker to stop payment or legal notice to the complainant or they could have given complaint to the police station immediately. No such steps were taken by the accused. They simply makes a bald allegation of misuse of cheque against the complainant. It appears, just to escape from their legal liability, they have taken such contentions without any valid basis.
43. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon them to make repayment to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.5 is the cheque drawn on account of the accused No.1. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt or liability. From the evidence of P.W.1 and 2 and also cheque return memo-Ex.P.6 it is established that the cheque was dishonored for the reasons "Exceeds Arrangement'' in the account of the accused No.1. A legal notice being issued as per Ex.P.8 and 11 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused have not seriously disputed regarding notice send by the complainant on their addresses. But the accused have not given reply C.C.NO.10132/2019 40 to the said notice. Thereby, they could have asserted their defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at their addresses. When the accused have not seriously disputed the address, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
44. It is not the contention of the accused that thereafter they have repaid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused have not paid the cheque amount within stipulated period, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even the accused did not whisper anything about the defence while their plea was recorded under section 251 of Cr.P.C. In the judgment of the Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, reported in 2010 (5) SCC 590, it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section C.C.NO.10132/2019 41 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on them.
45. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused have not been able to make out a probable case on their behalf.
46. As per the version of the accused is that the accused have nowhere denied transaction. The accused themselves have admitted that the accused No.1 is the holder of alleged cheque and the accused No.2 to 5 are the Managing Director and Directors of C.C.NO.10132/2019 42 the accused No.1. It is sufficient hold that the accused have issued the cheque and even after the accused have not paid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of the cheque. In case of dishonor of the cheque, once the execution of the cheque is admitted by the accused, then it for them to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 and 2 have established the case of the complainant, the accused have issued the cheque in order to repay the legally recoverable amount. Therefore, the accused have failed to probables the defence taken by them that the cheque was taken by the complainant for the purpose of security at the time of entering into the memorandum of understanding. Therefore, the accused have failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
47. PW.1 and 2 in their evidence have specifically deposed that the accused are defaulted in making payment to the complainant. Further as per the memorandum of understanding the accused have C.C.NO.10132/2019 43 failed to repay the agreed amount. Further the accused undertook to make the payment of Rs.80,79,535/- on or before 31.01.2019 in six monthly installments starting from August 2018. The remaining amount of Rs.38,00,000/- was to be paid by the accused on or before 31.03.2019. The accused also issued two cheques and it was agreed that in case of default in the accused paying the monthly installments to the complainant for to consecutive months, the complainant would be entitled present the said cheques towards discharge of the accused's liability to the complainant. The accused failed to making monthly payments. As per the terms of memorandum of understanding. Hence, the complainant presented the said cheque for encashment. So also it is not in disputed that the complainant and the accused are known to each other, some point of period. The accused have issued the cheque for repayment of the said amount. When the cheque was presented the bank same was returned for the reasons "Exceeds arrangement", this is also not seriously disputed by the accused. But the accused have failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused have failed to probables their defence. Further on perusal of the record, it reveals that on 11.08.2022 both the counsels have filed C.C.NO.10132/2019 44 a joint memo. In the joint memo the accused admits the execution, validity and contents of the memorandum of understanding dated: 09.07.2018 between the accused No.1 and the complainant company. Further the accused acknowledge that in terms of the said memorandum of understanding and also admits to make payment of Rs.1,18,79,535/- to the complainant in two installments i.e., Rs.80,79,535/- on or before 31.01.2019 and balance of Rs.38,00,000/- on or before 31.03.2019 towards discharge of the said debt issued two post dated cheques subject matter of this proceedings to the complainant. Further the accused admit that said cheques were signed by the accused No.2 and 3. Further the accused No.2 and 3 have offered to pay the complainant the entire sum of Rs.1,18,79,535/- and the complainant has agreed to receive the settlement amount as complete settlement of its dues from the accused. The accused towards full and final settlement have issued six post dated cheques to the complainant. It shows that the accused have admits their liability of payment to the complainant. With these reasons, I answer point No.1 and 2 in the Affirmative.
48. POINT NO.3 AND 4: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts, I have taken these two points together for common discussion. Before a person is C.C.NO.10132/2019 45 held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. The cheque-Ex.P.5 being drawn on the account of the accused No.1 is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused have not taken up any contention that thereafter they had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case, if the accused have issued the cheque in favour of the complainant for the purpose of security only and why they have not produced any documents and why they have not lodge any complaint against the complainant. After service of notice the accused not reply. Hence, the present complaint came to be filed before this court on 23.11.2018 within the period of one month from the date of cause of action.
49. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque-Ex.P.5 was issued for discharge of legally enforceable liability or debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section C.C.NO.10132/2019 46 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
50.POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused have failed to prove their rebuttal for the reasons mentioned above. In this case the learned counsel for the complainant has fairly submitted that as per the orders passed by this court in respect of this case and C.C.No.21632/2019 the complainant totally receipt of Rs.15,67,953/- towards partial payment of the settlement amount by way of adjustment with the interim deposit. Whatever amount this court impose as fine, which may be paid to the complainant under section 357(1)(b) of Cr.P.C., that amount which already partial amount for a sum of Rs.13,77,953/- interim amount and partial settlement amount paid by the accused is deducted. Further since the said offence is an economic crime. Hence, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused are convicted for an offence under section 138 of N.I.Act.
The bail bonds of the accused hereby stands canceled.
C.C.NO.10132/2019 47 In view of death of the accused No.4 case against the accused No.4 is stands abated.
The accused are sentence to pay fine of Rs.68,00,000/- (Rupees sixty eight lakhs only) to the complainant. It is further ordered that out of the said fine amount an amount of Rs.67,80,000/- (Rupees sixty seven lakhs eighty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.20,000/- (Rupees twenty thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment for a period of six months each.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 11 th day of January 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.01.12 12:02:19 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.Dasari Ramesh.
C.C.NO.10132/2019
48
PW.2 : Mr.Arvind Selvam.
List of documents marked on behalf of the complainant:
Ex.P.1 : Resolution.
Ex.P.2 : Notice issued under the Insolvency & Bankruptcy
code 2016 dated: 21.06.2018.
Ex.P.3 : Reply.
Ex.P.4 : memorandum of understanding.
Ex.P.5 : Cheque.
Ex.P.5(a) & 5(b) : Signatures of the accused No.2 & 3.
Ex.P.6 : Bank endorsement. Ex.P.7 : Email. Ex.P.8 : Office copy of legal notice. Ex.P.8(a) : Postal receipt. Ex.P.9 : Postal acknowledgement. Ex.P.10 : Track consignment. Ex.P.11 : Another office copy of the legal notice. Ex.P.12 : Postal receipts. Ex.P.13 to 16 : Postal acknowledgements. Ex.P.17 : Track consignments. Ex.P.18 : Returned legal notice. Ex.P.18(a) : Postal cover. Ex.P.19 : Complaint. Ex.P.20 : Appoint order. Ex.P.21 : Statement. Ex.P.22 : Ledger account.
List of witnesses examined on behalf of the accused:
DW.1 : Mr.Mahesh Chowdappa List of documents marked on behalf of the accused:
Ex.D.1 : Amenities Agreement (marked through PW.1).Digitally signed by SOUBHAGYA B
SOUBHAGYA BHUSHER
B BHUSHER Date:
2024.01.12
12:02:28 +0530
XXVIII Addl. Chief Metropolitan
Magistrate, Bengaluru.
C.C.NO.10132/2019
49
11.11.2023 (Judgment pronounced in the Open Court Vide
Separate Sheet)
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused are convicted for an offence under section 138 of N.I.Act.
The bail bonds of the accused hereby stands canceled.
In view of death of the accused No.4 case against the accused No.4 is stands abated.
The accused are sentence to pay fine of Rs.68,00,000/- (Rupees sixty eight lakhs only) to the complainant. It is further ordered that out of the said fine amount an amount of Rs.67,80,000/- (Rupees sixty seven lakhs eighty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.20,000/- (Rupees twenty thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment for a period of six months each.
XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.