Karnataka High Court
Bijoy David vs M/S Wider Horizons on 7 December, 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF DECEMBER, 2020
BEFORE
THE HON'BLE MR. JUSTICE N.K.SUDHINDRARAO
CRIMINAL APPEAL No.770/2016
BETWEEN:
BIJOY DAVID
S/O MALIAKAL JOSEPH
HOUSE NO.15/112, SOUTH BAZAAR
EAST END ROAD
IRINJALAKUDA-580 121
KERALA
REPRESENTED BY HIS POA HOLDER
SRI GANESH IYER
S/O SRI R VENKATESH
AGED ABOUT 38 YEARS
RESIDING AT: E-104
NAGARJUNA GREEN RIDGE
HSR LAYOUT, SECTOR -2
19TH MAIN, 27TH CROSS
BANGALORE-560 102 ..APPELLANT
(BY SRI.C.K.NANDA KUMAR, ADVOCATE)
AND:
1 . M/s.WIDER HORIZONS
SOFTWARE SOLUTIONS (P) LTD.,
NO.15/2, 2ND FLOOR
ABOVE PICK N SAVE
OPPOSITE GRAND KRISNA HOTEL
MADIWALA
BANGALORE-560 068
2
2 . MR B THIMAREDDY
MANAGING DIRECTOR
M/s.WIDER HORIZONS
SOFTWARE SOLUTIONS (P) LTD
HAVING OFFICE AT NO.15/2
2ND FLOOR,
ABOVE PICK N SAVE
OPPOSITE GRAND KRISNA HOTEL
MADIWALA
BANGALOER-560 068
RESIDING AT
SURAKAPALLI
DENKANIKOTTA
HOSUR, KRISHNAGIRI (DIST.)
TAMIL NADU-635 114
3 . MR T SREEKANTHA
DIRECTOR,
WIDER HORIZONS SOFTWARE
SOLUTIONS PRIVATE LIMITED,
NO.15/2, 2ND FLOOR
ABOVE PICK N SAVE
OPPOSITE GRAND KRISHNA HOTEL
MADIWALA
BANGALORE-560 068
ALSO AT
GOLDMAN SACHS SERVICES
PRIVATE LIMITED
CRYSTAL DOWNS
EMBASSY GOLF LINKS BUSINESS PARK
DOMLUR
BANGALORE-560 071
RESIDING AT: K V MEADOWS
HSR LAYOUT, 6TH CROSS
TEACHERS COLONY
BANGALORE-560 034 ..RESPONDENTS
(BY SRI.CHOKKA REDDY, ADVOCATE)
3
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF THE CRIMINAL PROCEDURE CODE, 1973
PRAYING TO SET ASIDE THE JUDGMENT DATED
23.02.2016 PASSED BY XIII ACMM, BENGALURU IN
C.C.NO.23401/2014 ACQUITTING THE
RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE
UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT.
THIS CRIMINAL APPEAL COMING ON FOR FINAL
HEARING THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
Appeal is directed against the Judgment dated 23.02.2016 passed in C.C.No.23401/2014 by the XIII ACMM, Bengaluru, wherein accused came to be acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act. Being aggrieved by the said Judgment complainant has come in appeal.
2. In order to avoid confusion and overlapping parties are referred in accordance with the ranks held by them before the trial court.
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3. The substance of the complaint is that accused No.1 is a private limited company which runs business in the name and style of M/s.Wider Horizons Software Solutions (P) Ltd., Accused No.2 is the Managing Director and Accused No.3 is the Director of accused No.1-company and signatory to the cheque. Complainant entered into an agreement with accused company dated 15.08.2012 for setting up `Wider Horizons Spoken English Institute Branch at Banashankari, Bengaluru. As a part of the agreement complainant had invested an amount of Rs.15,00,000/- and in turn the complainant was entitled to get returns of 10% of net revenue and at the Banashankari Branch or 12% p.a. on the amount invested whichever is higher. As per the agreement, the complainant had made some electronic transfer of Rs.5,00,000/- on 30.07.2011, Rs.2,00,000/- on 08.08.2012 and Rs.8,00,000/- on 13.08.2012 to the 5 account of accused. Towards 12% minimum return of investment as per the agreement the accused had issued two cheques bearing No.138029 dated 15.08.2013 for Rs.1,35,000/- and cheque bearing No.138031 dated 15.08.2013 for Rs.4,5000/- drawn on ICICI Bank, Koramangala branch, Bengaluru. Cheques were presented for payment but dishonoured and returned with shara "funds insufficient" on 14.09.2013 and 19.09.2013. Complainant presented both the cheques again on 12.11.2013 through his banker but those cheques again dishonoured for the reason "funds insufficient". Legal notice was issued on 27.11.2013 and it was returned with shara as "addressee left". On 10.12.2013 second legal notice was issued within limitation period and it was served on accused No.3 on 12.12.2013. Accordingly 15 days lapsed by 27.12.2013 and complaint was filed on 21.01.2014.
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4. Learned counsel Sri.Nandakumar C.K. for appellant would submit that issuance of cheque, presentation or dishonour are not disputed. Further receipt of money by accused from the complainant is not disputed. As a matter of fact it cannot be disputed as it was done through online transfer.
5. Learned counsel Sri.Chokka Reddy for respondents would submit that complainant was represented by power of attorney holder. However on the date of presentation of the complaint it was not produced. Mr.Reddy would also submit that the very complaint is against the language of Section 142(b) of the Negotiable Instruments Act and that provides for filing of the complaint within one month from the date of arising of cause of action. He would also submit that there is an agreement that within two years no investor can take a case against the company. 7
6. In the overall circumstances of the case offence of a cheque which is a negotiable instrument is contemplated under the Negotiable Instruments Act and it is considered as offence under Section 138 of the Negotiable Instruments Act provided where accused fails to honour a cheque that was duly presented earlier issued by him in discharge of monetary obligation. In such circumstances complainant has to comply with certain formalities such as issuance of notice within 15 days from the date of communication of dishonour and when demand notice is issued giving 15 days time for payment of money in default of which within 30 days from the date of arising of cause of action i.e., after expiry of the period of 15 days given to the accused, complaint is presented.
7. With all this, validity of the cheque earlier is six months now banks have converted to three months 8 from the date of issuance of cheque for the period of presentation it would be valid for three months within which cheque has to be presented. As a matter of fact, if the cheque is presented after three months it would be returned as stale cheque. There is no question of insufficiency of funds. Further procedure to be followed by complainant is that he has to issue notice at any point of time before the cheque gets expired. In this connection the date mentioned on the cheque is 15.08.2013 and that was first presented and dishonoured on 14.09.2013. Incidentally complainant did not pursue further.
8. Sri C.K.Nanda Kumar learned counsel for appellant would submit as it was a question of service of notice to accused or to bring it to their knowledge such steps were not taken. However cheques were presented for the second time on 12.11.2013. Firstly 9 cheque was presented and was dishonoured on 14.09.2013 and second presentation was on 12.11.2013 and legal notice issued on 27.11.2013 and second notice was issued on 10.12.2013 to respondent No.3 only. Complaint was presented. Learned counsel Sri.Nanda Kumar for appellant in support of his submissions relied on the following decisions.
1. MSR Leathers Vs S.Palaniappan and anr - (2013) 1 SCC 177
2. Sicagen India Limited Vs Mahindra Vadineni and others -(2019) 4 SCC 271
3. Kalaselvi Vs B.G.Patil -2009 SCC Online Kar 757
4. S.M.S.Pharmaceuticals Limited Vs Neeta Bhalla and others -(2005) 8 SCC 89.
9. Now the scope of Section 142(b) to be understood by reading the same which is as under:
142 Cognizance of offences. --
Notwithstanding anything contained in the 10 Code of Criminal Procedure, 1973 (2 of 1974)--
(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138:
Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.]
10. The proviso to Section 142 provides that cognizance of complaint may be taken by court after the prescribed period if the complainant satisfies the 11 court that he had sufficient cause for not making a complaint within such period.
11. With all that is submitted one question would arise is presentation of the cheque must be within validity period of cheque whether it is first presentation, second presentation and delayed prosecution is permitted subject to filing reasons, though permission has to be provided separately. The Judgment relied has its direct mandate on the applicability of law in the present case. Thus, the question of limitation or non presentation of the cheque as urged by accused cannot be accepted nor finding of the trial Judge to be appreciated.
12. Learned counsel Sri.Chokka Reddy for respondents has raised one more point that the legal notice first time when it was issued it was addressed 12 to all the three accused persons and last notice that was issued was given to accused No.3 alone. Thus, that cannot be accepted. In the constructive imputation, notice to be considered as they are in the same cluster of management of the company. Accused No.3 is the authorized signatory to cheque. In the second notice issued address, names are there but notice is addressed to accused No.3. In the light of first presentation due knowledge of impugned notice have thereunder the impact and hyper technicality cannot be allowed to veto the regular process of law. In the context and circumstances I find there is no lacunae in presentation of the cheque. Another point that was submitted by learned counsel Sri.Chokka Reddy for respondents is that there is an agreement not to take action for first two years on the face of it which defence neither was raised nor could be accepted to exonerate the accused. Learned 13 counsel for appellant submits the complainant is not affluent and it is very difficult for him to tolerate the financial burden. I find the cheque admittedly is issued in respect of existing legally recoverable debt and there was mandatory obligation and accused had issued the cheques in discharge of the obligation and that came to be dishonoured and tried to raise hyper technical issues against the substantive rights which cannot be accepted and on the other hand for the reasons morefully stated above I find the accused has committed offence punishable under Section 138 of the Negotiable Instruments Act and is liable to face punishment. In the process Judgment passed by the learned trial Judge is liable to be set aside.
Hence, I proceed to pass the following:
ORDER Appeal is allowed. Judgment dated 23.02.2016 passed in C.C.No.23401/2014 is set aside. Accused is 14 convicted for the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to pay a fine of Rs.2,00,000/-. Out of which complainant be given compensation of Rs.1,90,000/-
payable by the accused and Rs.10,000/- is ordered to be adjusted to the State Exchequer. In default of payment of fine, accused No.2 shall undergo simple imprisonment for six months.
Sd/-
JUDGE SBN