Bangalore District Court
M/S. M.S. Sarees vs Sri Annapoorneshwari Silks on 23 January, 2020
IN THE COURT OF XXI ADDL.CHIEF METROPOLITON
MAGISTRATE, BENGALURU CITY
Present: Sri. V. NAGARAJA, LL.B., LL.M.,
XXI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Dated this the 23rd day of January, 2020
C.C. No.28471/2018
COMPLAINANT: M/s. M.S. SAREES
Represented by its Proprietor
Sri. Akash M. Jain
Aged about 39 years,
No.167/2, Huriopet,
Near M.T. Street,
Bengaluru - 560 020.
(Reptd. By: VR., Advocate)
V/s.
ACCUSED: 1. SRI ANNAPOORNESHWARI SILKS
#79, 1st Floor, MYJ Towers,
Infantry Road,
Bengaluru - 560 001.
Represented by its Partner
Sri. Mahalinge Nanjundappa Gowda
2. Mr. MAHALINGE NANJUNDAPPA GOWDA
Age and father name not known
to the complainant,
Partner,
Sri Annapoorneshwari Silks,
R/at. No.39, CVP Block,
5th Main, 2nd Cross,
Ganganagara, R.T. Nagara,
Bengaluru - 560 032.
3. Mr. MUTHU SELVAM P
Age and father name not known
to the complainant,
Partner,
Sri Annapoorneshwari Silks,
R/at. No.1 "D" 6th Street,
2 C.C.No.28471/2018
Bharathi Nagara,
Bengaluru - 560 008.
4. Mr. SARAVANA KUMAR P
Age and father name not known
to the complainant,
Partner,
Sri Annapoorneshwari Silks,
R/at. No.18, 2nd Floor,
'G' Street, 6th Cross,
Ulsoor, HAL 2nd Stage,
Bengaluru - 560 008.
(Reptd. By: YRN., Advocate)
:JUDGMENT:
Complainant has filed this complaint under Section 200 of Cr.P.C. r/w Section 138 of N.I. Act, seeking for penalizing the accused persons for the offence punishable under Section 138 of N.I. Act and also for awarding compensation to him.
2. Case of the complainant in a nutshell is that:
Complainant is sole proprietorship concern, represented by its proprietor namely Akash M. Jain. It is further averred that complainant has been running business of wholesale dealer in sarees. On the other hand, accused No.1 is a partnership firm, represented by accused No.2 to 4, who are its partners, who are in-charge and responsible for day to day affairs of accused No.1 3 C.C.No.28471/2018 partnership firm. It is further averred that in the course of their business, they used to purchase sarees from complainant on credit basis by placing purchase orders.
So, during the year 2017, they became due of Rs.10,97,340/- as a principal and as per business practice, accused were also liable to pay interest @ 24% per annum for delay payments.
It is further averred that inspite of repeated demands for repayment of above said amount, accused went on postponing the same. Ultimately, in order to discharge above liability, accused have issued him a cheque bearing No.414046 dated 15.04.2018 for Rs.10,97,340/- drawn on ICICI Bank, Cantonment Branch, Bengaluru and assured to honour the said cheque. So, believing the words of accused, on 14.05.2018, he presented above said cheque through his banker i.e., Kotak Mahindra Bank, K.G Road Branch, Bengaluru. But said cheque was dishonoured for the reason "Funds Insufficient" in the account of accused.
So, the bank authorities issued endorsement dated 15.05.2018. So, he got issued legal notice dated 28.05.2018 through RPAD to accused regarding dishonour of cheque and calling upon them to pay cheque amount, 4 C.C.No.28471/2018 whereas said notice has been duly served on accused No.1 on 29.05.2018 and also to other accused. But, after receipt of said notice, the accused No.1 remitted only sum of Rs.2,00,000/- to the account of complainant through RTGS, but accused have failed to pay the entire cheque amount. Hence, accused have committed offence punishable U/s.138 of NI Act. Hence, he is constrained to file this complaint seeking for penalizing all the accused for the offence punishable under Section 138 of N.I. Act., and also seeking for awarding of compensation to him.
3. In pursuance of summons issued by this court, accused No.2 to 4 made appearance on their behalf as well as accused No.1 through their counsel and obtained bail and now they are on bail.
4. As these proceedings are summary in nature, substance of accusation read over and explained to accused No.2 to 4 in language known to them whereas, they pleaded not guilty and claimed for trial.
5. In order to prove the case of the complainant, he has been examined as PW-1 and got documents marked Ex.P-1 to Ex.P-21. After completion of evidence of complainant, statement of accused No.2 to 4 as specified 5 C.C.No.28471/2018 U/s.313 of Cr.P.C., have been recorded and on behalf of all accused, accused No.4 Shrvana Kumar has been examined as DW-1 and got documents marked Ex.D-1 to Ex.D-33.
6. I have heard arguments of both learned counsels, they also filed memo of citations.
7. Perused the records.
8. After perusal of records, the points arise for my consideration are:
1) Whether complainant proves beyond all reasonable doubt that accused No.1 being partnership firm, which is represented by its partners accused No.2 to 4, in order to discharge their legally enforceable debt, they issued him a cheque No.414046 dated 15.04.2018 for Rs.10,97,340/- drawn on ICICI Bank, Cantonment Branch, Bengaluru?
2) Whether complainant further proves that he has complied with mandatory requirements as specified under Section 138 of N.I. Act r/w 141 of N.I. Act?
3) What Order?
9. My findings on the above points are:
Point No.1 : In the Affirmative
Point No.2 : In the Affirmative
Point No.3 : As per final order,
for the following:
REASONS
10. Point No.1: As I have already stated, in order to prove the case of the complainant, he has been examined 6 C.C.No.28471/2018 as PW-1 and he filed his examination-in-chief by way of affidavit by reiterating entire complaint averments as stated above. In support of his oral testimony, he relied upon Ex.P-1 to Ex.P-21.
11. On the other hand, accused No.4 has been examined as DW-1 and got documents marked Ex.D-1 to Ex.D-33.
12. Before appreciation of evidence of the both parties, I am of the opinion, it is worth to note presumptions envisaged in N.I. Act as well as ratio laid down by the Hon'ble Apex Court in Three Judges Bench Judgment reported in (2010) 11 SCC 441 (Rangappa V/s. Sri Mohan) wherein it is held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent /complainant."
It is further held:
Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to 7 C.C.No.28471/2018 be raised by the court in favour of the complainant. The presumption referred to Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
13. So in the light of above presumptions and ratio decidendi laid down by Hon'ble Apex Court, if the present facts and situations are analyzed, it is obvious that according to complainant, accused have issued cheque for discharging of their liability. On the other hand, on considering the stand taken by all accused, it is obvious that though they dispute their liability as claimed by complainant, but they have not disputed the fact that cheque is belonged to accused No.1 partnership firm and it bears signature of its authorized signatory, accused No.2. So, as I have already stated in view of ratio laid down by Hon'ble Apex court in the Judgments stated supra, that as soon as accused admits his signature on cheque, mandatory presumption u/S 139 of N.I. Act comes to aid of complainant and he can rest upon said presumption.
14. Whereas, learned counsel for defence argued that in order to raise presumption U/s.138 of NI Act, the condition precedent is that complainant must prove the existence of legally recoverable debt or liability, if he is able 8 C.C.No.28471/2018 to prove the same, then only presumption can be raised otherwise not.
15. Having regard to the arguments of learned counsel for accused, it is important to note as I have already pointed out Hon'ble Three-Judges Bench Judgment of Hon'ble Supreme Court in Rangappa's case stated supra, it is clearly held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally recoverable debt or liability"
16. So when above ratio clearly states that presumption includes existence of legally enforceable debt or liability then further proof of that fact is not required that too in summary proceedings. Because Hon'ble Apex Court in the judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets) has clearly observed that:
Presumption literally means "taking as true without examination or proof"
17. At this juncture, it is also worth to note ratio laid down by Hon'ble Apex Court in the judgment reported in (2014)5 SCC 590 (Indian Bank Association and others V/s. Union of India and others) wherein it is held by reiterating 9 C.C.No.28471/2018 Section 143 of Negotiable Instruments Act and Section 264 of Cr.P.C., that:
"The Magistrate is not expected to record full evidence which he would have been, otherwise required to record in a regular trial and his judgment should also contain a brief statement of the reasons for the finding and not elaborate reasons which otherwise he would have been required to record in regular trials"
18. So, in the light of above ratio decidendi and in view of Section 143 of Negotiable Instruments Act and Section 264 of Cr.P.C., as this case is summary case, I am of the opinion it is not necessary to discuss elaborately with respect to legally enforceable debt when presumption includes existence of legally recoverable debt as held in the above said judgment of Hon'ble Apex Court. So, the mandatory presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is to say the cheque was not issued for consideration and in discharge of any debt or liability, in other words, onus shifts on the accused to rebut the said mandatory presumption raised in favour of complainant as observed by Hon'ble Apex Court in the Judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets). 10 C.C.No.28471/2018
Now the crucial question arises as to whether accused are able to rebut the said presumption or not?
19. It is significant to note on considering the defence of the accused, they contended that they used to purchase sarees from the complainant by placing purchase orders. Sometimes they used to purchase materials on the basis of cash and carry and sometimes on credit basis. So, whenever they purchased materials on credit basis, the complainant used to obtain their signed blank cheques for security purpose. Accordingly, in the year 2017, they had purchased materials from the complainant for Rs.10,65,715/- and paid Rs.8,65,715/- by way of cash in different dates and remaining Rs.2,00,000/- has been transferred to the account of complainant through RTGS. So, they have cleared entire amount. So, there was no liability. Such being so, the complainant in order to grab more money from them, he has misused their security cheque by filling up the contents of the same for his convenience and filed this false complaint. Hence, complaint is liable to be dismissed and they may be acquitted.
11 C.C.No.28471/2018
20. Whereas learned counsel for accused in his arguments, he argued that complainant has not produced proper and correct accounts, whereas the complainant has created account ledger extract as per Ex.P-9 only in order to make false claim. Hence, said document cannot be believable. He further argued that complainant has misused security cheque by filling up the contents for his convenience, which can be easily seen by comparing the different handwriting and different ink found on the cheques. Hence, complaint is liable to be dismissed and accused may be acquitted.
21. In support of his arguments, he placed reliance upon the judgments of Hon'ble Apex Court reported in:
1. Crl. Appeal No.830/2014
2. (2009)2 SCC 513
22. Per contra, learned counsel for complainant argued that when accused are not disputing the fact that cheque is belonged to account of accused No.1 partnership firm and it bears signature of accused No.2, then mandatory presumption shall raise in favour of complainant. Moreover, after receiving the demand notice issued by complainant regarding cheque amount, the 12 C.C.No.28471/2018 accused have admitted the liability and made part payment of Rs.2,00,000/- by transferring the money from their account to complainant's account. But, now in order to escape from paying remaining balance amount of Rs.8,97,340/-, they created false vouchers and contended that they have given present cheque for security purpose, but they have has not explained under what circumstances and for what reason, they have given said cheque for security. He further argued that if at all version of the accused was true, then they could have given reply by narrating the same and even they could have taken legal action against the complainant for alleged misuse of the cheque, but they did not do so and now they come up with this false story. Hence, same cannot be believable. Hence, accused have to be convicted and maximum sentence may be imposed.
23. In support of his arguments, he placed reliance upon the judgments of Hon'ble Apex Court reported in:
1. (2003) CCR 2016 5. (2012)1 DCR 189
2. 2006 Crl.L.J 1 6. 2005 Crl.L.J. 127
3. 2005 Cr.L.J. 4297 7. 2001(4) KAR 122
4. 2015 AIR SCW 3040 8. AIR 2010 SC 1898 13 C.C.No.28471/2018
24. Having regard to the arguments of both learned counsels, it is worth to note ratio decidendi laid down Hon'ble Apex Court in very Rangappa V/s. Sri. Mohan's case, it is clearly observed that:
"A mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court"
25. At this juncture, it is worth to note ratio decidendi laid down by the Constitution Bench of Hon'ble Apex Court in the judgment reported in AIR 1964 SC 575 (Dhanvantrai Balwantrai Desai V/s. State of Maharashtra) which has been followed in the subsequent judgment reported in (2001)6 SCC 16 (Hiten P.Dalal V/s. Brathindranath Banerjee) wherein it is held that:
"That the distinction between the two kinds of presumption lay not only in the mandate to the court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is 14 C.C.No.28471/2018 consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "The burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation is offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible"
26. At this juncture, it also worth to note in another judgment of Hon'ble Apex Court reported in (2010)8 SCC 383 (Meghmala and others V/s. Narasimha Reddy and others) wherein it is held that:
"It is not like any other criminal case where the accused is presumed to be innocent unless the guilt is proved. The presumption of innocence is a human right, however, subject to the statutory exceptions, the said principle forms the basis of criminal jurisprudence. For this purpose, the nature of offence, its seriousness and gravity thereof has to be taken into consideration. Statutes like the 15 C.C.No.28471/2018 Negotiable Instruments Act, 1881; the Prevention of Corruption Act, 1998; and the Terrorist and Disruptive Activities (Prevention) Act, 1987, provide for presumption of guilt if the circumstances provided in those statutes are found to be fulfilled and shift the burden of proof of innocence on the accused. Thus, the legislature has adopted a deviating course from ordinary criminal law shifting the burden on the accused to prove that he was not guilt"
27. So from the above ratio, it is crystal clear that proceedings U/s.138 of NI Act is not like any other criminal case where the accused is presumed to be innocent unless the guilt is proved. On the other hand the legislature has adopted a deviating course from ordinary criminal law by shifting the burden on the accused to prove that he is not guilty. So, the accused must rebut the mandatory presumption by raising probable and acceptable defence to the satisfaction of the court, because the presumption raised in favour of complainant is mandatory presumption, but not general presumption.
28. In the light of above ratio decedendi, if the tax invoices Ex.P-11 to Ex.P-19 produced by complainant and copies thereof produced by the accused which are marked 16 C.C.No.28471/2018 as Ex.D-1, Ex.D-5, Ex.D-9, Ex.D-15, Ex.D-21, Ex.D-26 and Ex.D-28, it is crystal clear that accused is not disputing the purchase of material from the complainant for the amounts shown in said invoices that is to say almost cheque amount. It is also admitted fact that after receiving the demand notice issued by complainant, the accused had made payment of Rs.2,00,000/- to complainant on 03.07.2018 by way of RTGS.
29. Now, the dispute is with respect to balance amount of Rs.8,97,340/- (10,97,340 - 2,00,000 = 8,97,340) out of total cheque amount of Rs.10,97,340/-. It is significant to note, accused has contended that they have cleared entire balance amount by paying through cash in various dates as per cash vouchers Ex.D-2 to Ex.D-4, Ex.D-6, Ex.D-7, Ex.D-10 to Ex.D-14, Ex.D-16 to Ex.D-25, Ex.D-27, Ex.D-29 to Ex.D-33. It is important to note, complainant has seriously disputed genuinity of cash vouchers by contending that he has not at all received any amount shown in the cash vouchers and he has not issued, whereas accused only in order to escape from his liability, he created the said vouchers. 17 C.C.No.28471/2018
30. Having regard to the contentions of the both parties, the crucial question arises as to whether above said cash vouchers can be believable and acceptable?
31. It is important to note, admittedly, the above said cash vouchers do not bear seal of complainant to prove that he has issued said vouchers, whereas accused contended that agent of the complainant namely Teja received the amount and issued said vouchers by affixing his signature. But, it is significant to note, accused have not made any efforts to summon the said Teja who has affixed signature on above said cash vouchers to prove them. So, in absence of such cogent and convincing evidence, it is hard to accept the said documents. It is further significant to note, it is elicited in the cross- examination of DW-1 "1£Éà DgÉÆæ ¸ÀA¸ÉÜAiÀÄ §ÄPïì D¥sï CPËAmïì£ÀÄß Drmï ªÀiÁr¸ÀÄvÉÛêÉ. ¸ÀzÀj §ÄPïì D¥sï CPËAmïì£À°è £ÁªÀÅ ªÀiÁqÀĪÀ ªÀåªÀºÁgÀUÀ¼À §UÉÎ £ÀªÀÄÆzÀÄ EzÉ. 2010 jAzÀ £ÁªÀÅ ¦gÁå¢AiÉÆA¢UÉ ªÀiÁrgÀĪÀ ªÀåªÀºÁgÀUÀ¼À §UÉÎ §ÄPïì D¥sï CPËAmïì£À°è £ÀªÀÄÆ¢¹zÉÝêÉ. CzÉà jÃw CPËAmïì ¯ÉqÀÓgï£ÀÄß ¸ÀºÁ ¤ªÀðºÀuÉ 18 C.C.No.28471/2018 ªÀiÁqÀÄwÛzÉÝêÉ. ¸ÀzÀj £ÀªÀÄä 1£Éà DgÉÆæ ¸ÀA¸ÉÜAiÀÄ°è £ÀªÀÄä ªÀåªÀºÁgÀUÀ¼À ¯ÉPÀÌ¥ÀvÀæUÀ¼À §UÉÎ ¨Áå¯É£ïì ²Ãmï£ÀÄß vÀAiÀiÁj¹ CzÀ£ÀÄß ¸ÀºÁ Drmï ªÀiÁr¸ÀÄvÉÛêÉ. CzÀgÀ°è 1£Éà DgÉÆæ ¸ÀA¸ÉÜAiÀÄÄ ¸Á® §gÀ¨ÉÃPÉA§Ä ¸ÀºÁ £ÀªÀÄÆzÀÄ EzÉ ºÁUÀÆ 1£Éà DgÉÆæ ¸ÀA¸ÉÜUÉ AiÀiÁjAzÀ ¸Á® §gÀ¨ÉÃPÉA§ÄzÀÄ ¸ÀºÁ £ÀªÀÄÆzÀÄ EzÉ. ªÉÄÃ¯É ºÉýzÀ §ÄPïì D¥sï CPËAmïì, CPËAmïì ¯ÉqÀÓgï ºÁUÀÆ ¨Áå¯É£ïì ²Ãmï£ÀÄß £ÁåAiÀiÁ®AiÀÄPÉÌ ºÁdgÀÄ¥Àr¹®è. 2018 ¸É¥ÉÖA§gï¤AzÀ 1£Éà DgÉÆæ ¸ÀA¸ÉÜAiÀÄ£ÀÄß ªÀÄÄaÑgÀĪÀ PÁgÀt¢AzÀ ªÉÄÃ®É ºÉýzÀ zÁR¯ÉUÀ¼À£ÀÄß ºÁdgÀÄ¥Àr¸À®Ä DUÀĪÀÅ¢®è. ¸É¥ÉÖA§gï 2018 jAzÀ D jÃw zÁR¯ÉUÀ¼À£ÀÄß ¤ªÀðºÀuÉ ªÀiÁrgÀĪÀÅ¢®è. 2018 PÀÆÌ »A¢£À zÁR¯ÉUÀ¼À£ÀÄß ¤ªÀðºÀuÉ ªÀiÁrgÀÄvÉÛêÉ. CªÀÅUÀ¼À£ÀÄß £ÁåAiÀiÁ®AiÀÄPÉÌ ºÁdgÀÄ ªÀiÁqÀ®Ä DUÀĪÀÅ¢®è"
"£Á£ÀÄ ¦gÁå¢UÉ PÁå±ï ªÉÇÃZÀgïì ªÀÄÆ®PÀ ºÀt ¤ÃrzÀ §UÉÎ vÉÆÃj¸À®Ä D ¢£ÁAPÀUÀ¼À°è £ÀªÀÄä §½ ºÀt EvÀÄÛ JAzÀÄ vÉÆÃj¸ÀĪÀ §UÉÎ zÁR¯ÉUÀ¼ÀÄ EªÉ JA§ ¥Àæ±ÉßUÉ ¸ÁQëAiÀÄÄ £ÀªÀÄä ªÁå¥ÁgÀzÀ°è £ÀªÀÄUÉ §gÀÄwÛzÀÝ ¢£ÀzÀ ªÀ»ªÁn£À 19 C.C.No.28471/2018 ºÀtzÀAvÉ £ÁªÀÅ ¦gÁå¢UÉ ºÀtªÀ£ÀÄß PÁå±ï ªÉÇÃZÀgïìUÀ¼À ªÀÄÆ®PÀ ¤ÃrgÀÄvÉÛÃªÉ JAzÀÄ GvÀÛj¹gÀÄvÁÛgÉ. PÁå±ï ªÉÇÃZÀgïìUÀ¼À°è vÉÆÃj¹gÀĪÀ ºÀtªÀ£ÀÄß £ÀªÀÄä §ÄPïì D¥sï CPËAmïì£À°èAiÀÄÆ ¸ÀºÁ vÉÆÃj¹gÀÄvÉÛÃªÉ DzÀgÉ §ÄPïì D¥sï CPËAmïì £ÀªÀÄä §½ E®è"
32. So, above evidence of DW-1 reveals that accused No.1 being partnership firm, registered under VAT (earlier) and now under GST, all account books and ledgers of accused No.1 firm got audited, but DW-1 further deposed that he has not produced such book of accounts and account ledgers to show that at the time of making alleged payments through cash vouchers, they had money to make such payments. So, in absence of non-production of book of accounts, account ledgers pertaining to transactions took place between complainant and accused, I am of the opinion, it is not safe to rely upon the alleged cash vouchers. It is further significant to note, admittedly when accused used to make payments through bank account that is to say transferring of money through RTGS as done on 03.07.2018 with respect to Rs.2,00,000/- then a serious doubt arises in the mind of the court to accept 20 C.C.No.28471/2018 the version of the accused that they have cleared remaining balance i.e., Rs.8,97,340/- through cash vouchers cannot be believable and acceptable. Hence, I do not find any force in the arguments of learned counsel for accused.
33. Coming to another contention of the accused that they had given present cheque for security purpose, but it is significant to note, they have not explained under what circumstances, they had compelled to issue said cheque for security purpose, even they have not placed any cogent and convincing evidence to show that they used to issue signed cheque for security purpose. So, under such circumstances, mere their contention that they issued present cheque for security purpose cannot be believable and acceptable.
34. At this juncture, it is also worth to take note of the conduct of the accused as specified U/s.114 of Indian Evidence Act that as per their contention, complainant has misused their cheque which was given to him for security purpose even after clearing the dues. If that is the case, a reasonable doubt arises in the mind of the court as to why the accused have kept quite for a along time without 21 C.C.No.28471/2018 making any efforts to get back his alleged security cheque even after clearance the dues. It is further significant to note as to why accused have kept quite without lodging any police complaint or taking any legal action against complainant regarding alleged misuse of cheque. So, I am of the opinion, if at all accused have not issued present cheque for discharging of legally enforceable debt, then definitely accused would have lodged police complaint or initiated legal proceedings against the complainant, because no prudent man will keep quite, when his cheque is misused by somebody else. So, non-taking any of these actions by the accused at appropriate time, it creates a reasonable doubt in the mind of the court regarding acceptance of his version that complainant has misused his cheques. So, I come to clear conclusion that the defence raised by the accused is not probable and acceptable.
35. Coming to another argument of learned counsel for accused that complainant has filled up the contents of the cheques for his convenience which amounts to material alteration etc. 22 C.C.No.28471/2018
36. Having regard to the arguments of learned counsel for accused at this juncture, it is worth to note ratio laid down by Hon'ble Apex Court in the recent judgment reported in 2019 SCC On line SC 138 = Crl. Appeal No.230-231/2019 2019 (@SLP(Crl) No.9334- 35/2018) dated 06.02.2019 (Bir Singh V/s. Mukesh Kumar) wherein it is held that:
"A meaningful reading of the provisions of the Negotiable Instruments Act, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had not been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted"
"If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence"23 C.C.No.28471/2018
"It may reasonably be presumed that the cheque was filled in by the appellant- complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration"
37. Having regard to the arguments of learned counsel for accused at this juncture, it is worth to note ratio laid down by Hon'ble Apex Court in the judgment reported in (2002)7 SCC 150 (P.K. Manmadhan Kartha V/s. Sanjeev Raj and another) wherein it is held that:
"Difference of handwriting and ink on the cheque did not rebut the statutory presumption U/s.139 and 118 of NI Act"
38. At this juncture it is also worth to note that view taken by Hon'ble High Court of Karnataka reported in ILR 2001 KAR 4127 (S.R. Muralidhar V/s. Ashok G.Y.) wherein it is held that:
Section 20 of NI Act - Inchoate stamped instruments "No law provides that in case of any negotiable instrument entire body has to be written by maker or drawer only. What is material is signature of drawer or maker and not the body writing hence question of body writing has no significance"24 C.C.No.28471/2018
"It is not objectionable or illegal in law to receive a inchoate negotiate instrument duly singed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully binds the maker of the Negotiable Instrument"
39. So, in the light of above principle if the present facts and situations are analyzed, as I have already pointed out accused is not disputing issuance of cheques and his signatures thereon. Under such circumstances, filling up body of the cheque by complainant or somebody else will not invalidate the cheque and that itself will not rebut the mandatory presumption raised in favour of complainant when version of the accused itself is not probable and acceptable. Hence, I don't find any force in the arguments of learned counsel for accused.
40. In view of binding precedent of Constitution Bench and Larger Bench judgments of Hon'ble Apex Court, the judgments of Hon'ble Courts relied by learned counsel for accused, will not helpful to his contention. 25 C.C.No.28471/2018
41. As I have already pointed that Hon'ble Apex Court in the Constitution Bench and Larger Bench Judgments stated supra, it is clearly held that presumption envisaged U/s.138 of NI Act is not general presumption but it is mandatory presumption, so the said presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible". So, I come to clear conclusion that accused have utterly failed to rebut the mandatory presumption raised in favour of complainant. Hence, I hold this point in Affirmative.
42. Point No.2: As I have already discussed in point No.1 that accused have issued cheque for discharging of their legally recoverable debt. Whereas, on perusal of bank endorsements given by bank authority clearly reveal that complainant had presented the said cheques within validity period, but said cheque was dishonoured with endorsement "Funds Insufficient". On perusal of Ex.P-3 which is legal notice issued to accused clearly reveal that the complainant got issued said demand notice to accused within specified time of 30 days from the date of receiving of endorsement from bank. On perusal of Ex.P-5 which is postal acknowledgement, clearly reveals that the demand notice has been duly served on accused. 26 C.C.No.28471/2018
43. So on considering the oral coupled with the documentary evidence of the complainant, they clearly proved that complainant has complied with mandatory requirements as specified U/s.138(a) and (b) of N.I. Act. Whereas, accused have not paid the cheque amount within specified time, inspite of service of demand notice. It is significant to note, admittedly, accused No.1 being partnership firm, represented by its partners accused No.2 to 4, who are in-charge and liable for day to day affairs of firm and who are also responsible for issuance of present cheque fall within the ambit of Section 141 of NI Act. Hence, accused have committed offence punishable U/s.138 r/w 141 of NI Act.
44. It is significant to note, learned counsel for accused argued that admittedly the accused have made payment of Rs.2,00,000/- on 03.07.2018 that is to say after issuance of notice. Hence, criminal liability cannot be fastened against accused etc.
45. Having regard to the arguments of learned counsel for accused, it is important to note, demand notice has been served on accused on 29.05.2018, but above payment is made on 03.07.2018 i.e., beyond 15 days from 27 C.C.No.28471/2018 the date of service of notice. So, under such circumstances, when accused have failed to make entire payment of cheque amount as demanded under the statutory notice within 15 days from the service of notice, cause of action arose to complainant to file present complaint. So, once cause of action arose, mere making part payment in subsequent date, will not absolve the accused from criminal liability. However, such subsequent part payment can be considered at the time of passing sentence and imposing fine. Hence, I do not find any force in the arguments of learned counsel for accused. Hence, I hold point No.2 in Affirmative.
46. Point No.3: For the foregoing reasons discussed on points No.1 and 2, I proceed to pass the following:-
ORDER Acting under Section 255(2) r/w 264 of Cr.P.C., the accused No.1 to 4 are hereby convicted for the offence punishable u/S.138 of Negotiable Instruments Act.
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
On considering the facts and circumstances of the case, accused No.2 to 4 being partners of accused No.1 is hereby sentenced to pay fine of Rs.9,03,000/- (Nine Lakhs and Three Thousand only, as they have already paid 28 C.C.No.28471/2018 Rs.2,00,000/- to the complainant) jointly. In default they shall undergo simple imprisonment for a period of 5 (Five) months jointly.
In view of Section 357 of Cr.P.C., complainant is entitled for compensation of Rs.8,98,000/- (Eight Lakhs and Ninety Eight Thousand only) out of above said fine amount.
After collecting the above fine amount, office is directed to pay Rs.8,98,000/- (Eight Lakhs and Ninety Eight Thousand only) to complainant as compensation and defray remaining fine amount of Rs.5,000/- (Five Thousand only) to state, after appeal period is over.
However, accused No.2 to 4 shall execute personal bond of Rs.9,03,000/- in view of Sec.437(A) of Cr.P.C.
The office is hereby directed to supply the copy of this Judgment to the accused on free of cost.
(Directly dictated to Stenographer on computer, computerized by him, corrected and then pronounced by me in the open court on this the 23rd day of January, 2020) (V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW-1 : Akash M LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P-1 : Cheque
Ex.P-2 : Bank Endorsement
Ex.P-3 : Copy of Legal Notice
Ex.P-4 : Postal Receipts
Ex.P-5 : Postal Acknowledgement
29 C.C.No.28471/2018
Ex.P-6 : Returned Postal Cover
Ex.P-7 & 8 : Settled Replies
Ex.P-9 : Account Ledger Extract
Ex.P-11 to 19: Tax Invoices
Ex.P-20 & 21: Credit Notes
LIST OF WITNESSES EXAMINED FOR THE DEFENCE:
DW-1 : Shravana Kumara LIST OF DOCUMENTS MARKED FOR THE DEFENCE:
Ex.D-1 : Invoice
Ex.D-2 to 4: Cash Vouchers
Ex.D-5 : Invoice
Ex.D-6 to 8: Cash Vouchers
Ex.D-9 : Invoice
Ex.D-10 to 14: Cash Vouchers
Ex.D-15 : Invoice
Ex.D-16 to 20: Cash Vouchers
Ex.D-21 : Invoice
Ex.D-22 to 25: Cash Vouchers
Ex.D-26 : Invoice
Ex.D-27 : Cash Voucher
Ex.D-28 : Invoice
Ex.D-29 to 33: Cash Vouchers
(V. NAGARAJA)
XXI ADDL. C.M.M., BENGALURU.