Bangalore District Court
W/O Shyam Sunder Bajaj vs Is Acquitted on 2 March, 2015
IN THE COURT OF THE XL ADDL.CHIEF METROPOLITAN
MAGISTRATE, BANGALORE CITY.
SCCH-14
PRESENT: Basavaraj Chengti., B.Com.,LL.B.,(spl)
XL ACMM,
BANGALORE.
C.C.No. 12961/2013
Dated this the 2nd day of March 2015
1. Sl.No. of the case C.C. No.12961/2013
2. The date of Institution 09.05.2013
3. The date of
commencement of the
20.08.2014
evidence
4. Name of the Smt.Sheila Bajaj
Complainant W/o Shyam Sunder Bajaj,
Aged about 56 years,
No.114, St.Micheal School road,
Shanthinagar,
Bangalore-560 027.
Represented by her GPA holder,
Sri.Shyam Sunder Bajaj.
(By pleader Sri SMG)
5. Mr.Srinath
Name of the Accused Major,
Proprietor/Authorised Signatory,
M/s Siddaratha Enterprises,
No.1, 1st cross,
Annaya Palya Layout,
RMV 2nd Stage,
Dollors Colony,
SCCH-14 2 CC No.12961/2013
Bangalore.560 094.
(By pleader Sri MSB)
6. The offence complained Under Sec.138 of N.I. Act.
of or proved
7. Plea of the accused on Pleaded not guilty
his examination
8. Final Order
Accused is acquitted
9. Date of such order 02.03.2015
XL ACMM,
BANGALORE.
SCCH-14 3 CC No.12961/2013
JUDGMENT
This is a complaint filed by the complainant against the accused for the offence punishable U/Sec.138 of Negotiable Instruments Act (hereinafter called the Act). The complainant is represented by her GPA holder.
2. Brief averments of the complaint are as under:
The accused as proprietor/Authorised Signatory of M/s Siddaratha Enterprises borrowed a sum of Rs.2,50,000/- from the complainant on 12.10.2011 for his business purpose. The accused executed an On Demand Promissory Note and Consideration receipt in favour of the complainant. In response to repeated requests and demands, the accused has issued a cheque bearing No.222273, dated 20.03.2013 for Rs.75,000/- drawn on Vijaya Bank, Malleshwaram Branch, Bangalore-03 in favour of complainant towards repayment of loan. The complainant presented the said cheque through her Banker Canara Bank, Shanthinagar Branch, Bangalore, but the cheque was dishonoured for the reasons "FUNDS INSUFFICIENT" with dishonour memo dated 21.03.2013. The complainant got issued a legal notice to the accused on 10.04.2013 calling upon him to pay the amount of cheque. The notice sent through RPAD was duly served upon the accused on 12.04.2013. Inspite of receipt of notice, the accused has not paid amount of cheque to the complainant. Hence, the complainant has filed this complaint praying for convicting the accused, punishing him and for awarding compensation.SCCH-14 4 CC No.12961/2013
3. On the basis of the complaint, cognizance of offence was taken and the complaint was registered in PCR No.10586/2013. Then, sworn statement of the complainant was recorded. After hearing the complainant and his counsel, the court found sufficient material to issue process against the accused for the offence punishable U/s 138 of the Act. Accordingly, this criminal case was registered against the accused for the said offence and process was issued. Initially, this case was pending before 13 th ACMM, Bangalore which was made over to 19th ACMM, Bangalore and later, it came to be transferred to this court. In the pursuance of the process, the accused has appeared before court through his counsel and he is enlarged on bail. Then, substance of accusation was read over and explained to the accused. He has pleaded not guilty. Hence, the complainant was called upon to prove his case.
4. During evidence, the complainant has examined her GPA holder as PW.1 and got marked documents as Ex.P1 to Ex.P8. Then, statement of accused was recorded. The accused has examined himself as DW.1 and got marked letter given by Vijaya Bank as Ex.D1.
5. Heard the arguments. Both the counsel filed written arguments. The complainant has relied upon following rulings;
1. (2001) 8 SCC 458 (K.N.Beena Vs Muniyappa and another)
2. 2009 (1) DCR 146 (Smt.Vasantha Kumari Vs. D.Devendra Reddy) SCCH-14 5 CC No.12961/2013 3(i).2006 Crl.L.J 3760 (Smt.Uma Swamy Vs K.N.Ramanath) 3(ii). 2004 Cri.L.J. 664 SC (Gao Plast (p) Ltd., Vs Chico Ursula D souza)
4. ILR 1994 KAR 2991 (V.N.Samant Vs KGN Traders another)
5. AIR 2000 SC 145 (Anil Hada Vs India Acrylic Ltd ) The accused has relied upon following rulings;
1. ILR 2001 KAR 4310 (Deepa Finance Corp & ano Vs A.K.Mohammed)
2. 2007 (5) SCC 103 (Raghu Lakshminarayan Vs Fine Tubes)
3. Cri.Appeal No.438/2009 & in 2014(3) DCR 783 (Mr.N.Shrihari Vs Mr.Babu Shetty)
4. Cri.Appeal No.1184/2012 (Dastigir Sab Vs L Jayamma)
5. 2014 (3) DCR 529 (Gaurav Srivastava Vs State of UP and another)
6. AIR 2014 SC 360 (A.C.Narayanan Vs State of Maharastra and Another)
7. Crl.Appeal No.1036/2008 (ICDS ltd Vs Sri.K.N.Nagesh) I have gone through the written arguments, citations and perused records.
6. Now the points arise for my consideration are:
SCCH-14 6 CC No.12961/20131. Whether the complainant has proved that the accused has issued Ex.P1 cheque in his favour towards discharge of legally recoverable debt without maintaining sufficient balance in her bank account and failed to pay the cheque amount within time inspite of service of demand notice?
2. What order ?
7. My findings are:
POINT NO.1 : In negative POINT NO.2 : As per final order.
REASONS
8. POINT NO.1: The GPA holder of the complainant has entered the witness box as PW-1 and reiterated the averments of the complaint. He got marked documents as Ex.P-1 to 8. The accused has denied all incriminating evidence against him as false during his statement. However, he has admitted the service of demand notice. He has explained that he is not acquainted with the complainant, that he has not borrowed any amount from him and question of payment of cheque amount to him does not arise and since, the notice was not related to him, he did not issue reply. The accused got himself examined as DW-1 and got marked letter of Vijaya Bank as Ex.D-1. On careful perusal of oral and documentary evidence on record, it reveals that a technical point of law and fact is involved in this case.
SCCH-14 7 CC No.12961/20139. PW-1: Shyam Sundar Bajaj is the GPA holder of the complainant and he has reiterated the averments of the complaint. He has admitted in cross examination that the complainant has advanced loan by way of cheque in favour of M/s Siddartha Enterprises, that as per Ex.P-3, loan is advanced to said concern, that Ex.P-4 belongs to said concern, that no notice is issued to the said concern, that name of the accused is not mentioned in Ex.P-3, that Ex.P-3 is between the complainant and M/s Siddartha Enterprises.
10. DW-1: Srinath has stated that M/s Siddartha Enterprises is a Proprietory concern and he is its authorised signatory, that his wife Shashikala is the proprietrix of said concern, that Ex.P-4 cheque belongs to M/s Siddartha Enterprises. In cross examination, he has admitted that cheque, receipt and pronote at Ex.P-4, 2 and 3 bear his signatures, that he borrowed loan in his individual capacity and repaid it.
11. Ex.P1 is the deed of GPA and it reveals that the complainant has authorised PW-1 to take legal action against M/s Siddartha Enterprises and Mr.Srinath to recover the amount lent. PW-1 has deposed before the court on the basis of said GPA. The counsel for the accused has argued that the notice was issued by the complainant herself, but the complaint is filed by PW-1, that the said PW-1 has deposed as if he is the complainant and his evidence is not admissible. He has relied upon ruling of our Hon'ble High court rendered in Criminal Appeal No.1035/2008 SCCH-14 8 CC No.12961/2013 and ruling of Hon'ble Supreme Court reported in AIR 2014 SC
630. It is held in the rulings that the power of attorney holder can not give evidence regarding the facts within the knowledge of executor and he may give evidence regarding the facts within his knowledge. I have gone through the evidence of PW-1. It reveals that PW-1 is none else than the husband of the complainant, that he has deposed on the basis of personal knowledge of the facts. Therefore, the said rulings can not be applied to this case. Evidence of PW-1 is admissible and believable.
12. Ex.P-4 is the cheque dt.20-3-2013 for Rs.75,000/- drawn on Vijaya Bank in favour of the complainant. It bears the signature of the accused under the seal of M/s Siddartha Enterprises. Ex.P-5 is bank memo and it reveals that the cheque at Ex.P-4 was dishonoured on 21-3-2013 for insufficient funds. It is not the case of the accused that there was sufficient funds in the account pertaining to the cheque on 21-3-2013. Ex.P-6 is the copy of legal notice which discloses that on 10-4-2013, the complainant has issued notice to the accused demanding payment the of cheque amount. Ex.P-8 is postal acknowledgement which goes to show that the notice was served on the accused on or about 24-4-2013. The accused has disputed the signature on Ex.P-8, but he has admitted the service of notice. He has not disputed the correctness of the address shown in Ex.P-6 and 8. Therefore, it can be said that the notice was duly served on the accused on or about 24-4- 2013. It is not the defence of the accused that he paid the SCCH-14 9 CC No.12961/2013 cheque amount to the complainant after service of notice. He has not replied the notice. Therefore, evidence of PW-1 that the accused has not paid the cheque amount in spite of service of notice can be believed. If the notice is held to be legal and valid, then cause of action accrued to the complainant to file a complaint on 9-5-2014 for the offence punishable U/s 138 of the Act. The complaint was presented before the Court on 9-5-2014 which is well within time. Ex.P-2 and 3 are consideration receipt and promissory note executed by the accused in favour of the complainant as authorized signatory of M/s Siddartha Enterprises. The said receipt and promissory note confirm the existence of debt in discharge of which Ex.P-4 cheque is issued. The said cheque pertains to A/c No.113900300001974 with Vijaya Bank, Malleshwaram, Bangalore. Ex.D-1 is the letter of said bank which discloses that A/c No.113900300001974 is a current account in the name of M/s Siddartha Enterprises and Mrs. Shashikala Hegde is its proprietrix.
13. The counsel for the accused has given certain suggestions during the cross examination of PW-1. The said suggestions and answers of PW-1 are as under:
". It is true to suggest that as per Ex.P3 the loan is advanced to M/s Siddhartha Enterprises. It is true to suggest that Ex.P4 cheque belongs to M/s Siddhartha Enterprises. It is true to suggest that the complainant has not issued any notice to M/s Siddhartha Enterprises. It is true to suggest SCCH-14 10 CC No.12961/2013 that Ex.P6 notice is issued to the accused ".
"Thecomplainant has not issued cheque in the name of the accused. Witness volunteers that cheque is issued in the name of M/s Siddhartha Enterprises".
"It is true to suggest that Ex.P3 is between the complainant and M/s Siddhartha Enterprises".
14. By the above suggestions, the accused has admitted the borrowing of loan by M/s Siddartha Enterprises from the complainant, execution promissory note and delivery of cheque in question in favour of complainant. The above suggestions and admissions coupled with documents at Ex.P-2, 3 and 4 establish that the accused is the authorized signatory of M/s Siddartha Enterprises, that he borrowed Rs.2,50,000/- from the complainant for M/s Siddartha Enterprises by executing consideration receipt and promissory note, that he issued Ex.P-4 cheque on behalf of M/s Siddartha Enterprises in favour of complainant towards discharge of debt. Ex.P-5 reveals that the said cheque is dishonoured for insufficient funds, but that itself does not constitute an offence punishable U/s 138 of the Act. The holder or payee has to issue notice in writing to the drawer of the cheque demanding the payment of amount covered under the cheque. If the drawer fails to pay the amount within 15 days from the date of service of such notice, then the offence said to be committed. The holder or payee has to file complaint within one SCCH-14 11 CC No.12961/2013 month from the date of cause of action i.e., within one month from 16 day of service of notice on the drawer of the cheque.
15. Oral and documentary evidence on record disclose that M/s Siddartha Enterprises has borrowed loan from the complainant. It is the M/s Siddartha Enterprises who executed the promissory note. It is the M/s Siddartha Enterprises who issued Ex.P-4 cheque in favour of the complainant towards discharge of debt. It is the M/s Siddartha Enterprises who is liable to pay the amount to the complainant. The bank account pertaining to Ex.P-4 cheque is a current account standing in the name of M/s Siddartha Enterprises. Mrs. Shashikala Hegde is the proprietrix of the said concern. The accused is only the authorized signatory of the said concern. His acts and deeds are only for and on behalf of M/s Siddartha Enterprises. He is individually not concerned with the loan borrowed from the complainant and not liable for any action for dishonour of Ex.P-4 cheque. Sec.138 of the Act reads as under:
138. Dishonour of cheque for insufficiency, etc., of funds in the account;- where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge , in whole or in part, of any debt of other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may SCCH-14 12 CC No.12961/2013 extend to twice the amount of the cheque, or with both:SCCH-14 13 CC No.12961/2013
Provided that nothing contained in this section shall apply unless;-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation;- For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
16. The above provision makes it clear that if a cheque is dishonoured and its amount is not paid, it is the holder of account who is liable for prosecution. The drawer is required to issue demand notice to the drawer of the cheque and not to the signatory. In this case, the complainant has not issued demand notice to M/s Siddartha Enterprises. Notice issued to the accused in his individual capacity is no notice to M/s Siddartha Enterprises. If the notice was issued to the proprietrix of M/s Siddartha Enterprises, then the matter would be different. If the proprietrix is made as accused with or without M/s Siddartha Enterprises, then it would be legal and proper. The cheque is SCCH-14 14 CC No.12961/2013 though signed by the accused, but it was on behalf of M/s Siddartha Enterprises. The complainant ought to have issued notice to M/s Siddartha Enterprises and its proprietrix. The demand notice to a person other than the holder of bank account, it is not a proper notice. Therefore, the notice issued by the complainant to the accused can not be construed as notice to M/s Siddartha Enterprises and its proprietrix. Thus, there is no proper demand by the complainant for payment of cheque amount. The notice at Ex.P-6 and postal acknowledgement at Ex.P-8 are invalid. Non payment of cheque amount by the accused does not constitute an offence punishable U/s 138 of the Act. There was no debt or liability on the accused in his individual capacity towards the complainant. The cheque is not his individual cheque. It was not drawn on his personal account. Therefore, notice issued against him is not sufficient to prosecute him for the said offence. The complainant ought to have issued notice to M/s Siddartha Enterprises and to its proprietrix. He ought to have filed complaint against M/s Siddartha Enterprises represented by its proprietrix or by its authorized signatory i.e., the accused. The rulings relied upon by the complainant are applicable to a company, but in this case the transaction is between the complainant and a proprietary concern. Therefore, the principles laid down in the said rulings are not applicable to this case. The prosecution of the accused for dishonour of Ex.P-4 cheque is illegal. The complainant has failed to prove this point. The accused has not committed an offence punishable U/s 138 of the Act. Hence, I answer the point in negative.
SCCH-14 15 CC No.12961/201317. POINT NO.2:In view of above discussion and findings, I pass following:
ORDER The accused is found not guilty and is acquitted for the offence punishable U/s 138 of the Negotiable Instruments Act.
His bail bond stands cancelled.
(Dictated to the Stenographer, directly on computer and then corrected by me and pronounced in the open court, on this the 2nd day of March 2015.) BASAVARAJ CHENGTI XL ACMM, BANGALORE SCCH-14 16 CC No.12961/2013 LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:
PW.1 - Shyan Sunder Bajaj LIST OF DOCUMENT MARKED ON BEHALF OF THE COMPLAINANT:
Limitation Ex.P.1 - Deed of General Power of Attorney Ex.P2 - Receipt Ex.P3 - On demand promissory note Ex.P4 - Cheque Signature of accused Ex.P5 - Bank memo Ex.P6 - Copy of notice Ex.P7 - Postal receipt Ex.P8 - Postal Acknowledgment LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE:
DW.1 - Srinath LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:
Ex.D1 Copy of Letter
XL ACMM,
BANGALORE.
SCCH-14 17 CC No.12961/2013
Dt;02.03.2015
Order pronounced in open court
vide separate judgment.
ORDER
The accused is found not guilty and
is acquitted for the offence punishable U/s 138 of the Negotiable Instruments Act.
His bail bond stands cancelled.
XL ACMM, BANGALORE