Bangalore District Court
Chennai - 600 017 And Its Branch Office At vs W. No.2 on 2 January, 2020
1
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 2nd DAY OF JANUARY, 2020
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.58868/2017
SDS RAMCIDES CROP SCIENCE PVT. LTD.,
Having its Registered Office at No.47 and 49, VBC
Solitaire, 7th Floor, Bazullah Road,Taluk Nagar,
COMPLAINANT Chennai - 600 017 and its Branch Office at
No.71/1, 1st Floor, New Timber Yard Layout,
Mysuru Road, Near Satellite Bus Stand,
Bengaluru - 560 026.
Reptd by its Authorized Representative -
Mr.S.Muttanagouda
Mr. JAGADISHA - Proprietor
ABHI ENTERPRISES
ACCUSED W. No.2, Handhihal Village and Post, Bellary Taluk
and District - 583 103.
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused is convicted
(K. GURUPRASAD)
XIV ADDL. C.M.M., BENGALURU
2
JUDGMENT
The present complaint is filed under Sec.200 Cr.PC for the offence punishable under Section 138 r/w 142 of Negotiable Instruments Act.
2. It is the case of the complainant that, the complainant is company which deals in Herbicides, Fungicides, Insecticides and Plant Nutrients etc., while the accused is dealer/distributor of complainant company. As a distributor, the accused purchased Pesticides etc., on running account basis. For supply of goods by the complainant company, the accused issued a cheque bearing No.555 dtd.30.8.2017 for Rs.2,46,517 drawn on Pragathi gramin Bank, Bellary in favour of the complainant. When the complainant presented the said cheque to its banker i.e HDFC Bank, Richmond Road branch, Bengaluru on 30.8.2017, said cheque came to be dishonoured with bank endorsement "funds insufficient" on 31.8.2017. When the complainant got issued legal notice dtd.9.9.2017 to accused by registered post, calling upon the accused to pay the cheque amount, the said notice issued by the complainant to the accused was returned with postal shara "insufficient address" on 21.9.2017. Since the accused has not paid the cheque amount in spite of issuance of legal 3 notice, the accused is guilty of the offence punishable under Section 138 of N.I. Act. Hence this complaint.
3. After filing of this complaint, cognizance was taken for the offence punishable U/s.138 of N.I. Act. Sworn statement of the complainant was recorded. This court was satisfied as to prima facie case made out by the complainant for issuance of the summons. Accordingly, criminal case was registered against the accused and summons was ordered to be issued.
4. In pursuance of court process issued by this court, the accused appeared through his counsel and got enlarged on bail. Thereafter plea was recorded. The accused pleaded not guilty and claimed for trial.
5. In order to prove the case of the complainant, the Assistant Manager and Power of Attorney holder of the complainant company examined himself as CW.1 (PW.1) and got marked Ex.P1 to P10 and closed his side of evidence. Thereafter, statement of the accused U/s.313 of Cr.PC was recorded. The accused denied incriminating materials in the evidence of complainant against him. Thereafter, the accused examined himself as DW.1 and got marked Ex.D1 and D2 and closed his side of evidence.
46. Heard both sides. Counsel for the accused has filed written arguments. Perused the complaint, evidence on record, written arguments and court records.
7. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused has issued a cheque in question in discharge of legally enforceable debt or liability as contended by it?
2) Whether the complainant further proves that the accused committed the offence punishable under Section 138 of Negotiable Instruments Act?
3) Whether the complainant is entitled for the relief's as prayed in the complaint?
4) What Order?
8. The above points are answered as under;
Point No.1 to 3 : In affirmative, Point No.4 : As per the final order, for the following.......
5REASONS
9. Point Nos. 1 and 2: Since these two points are inter linked and to avoid repetition they are taken together for discussion.
10. As regard to limitation to file this complaint, Ex.P1 is cheque dated 30.8.2017 drawn on Pragathi Gramin Bank, Kondagundi branch, Bellary in favour of the complainant. Ex.P2 is cheque return memo dated 31.8.2017 issued by HDFC Bank. Ex.P3 is copy of legal notice dtd.9.9.2017 got issued by the complainant to the accused calling upon the accused to pay the cheque amount within 15 days from the date of receipt of said notice. Ex.P4 is postal window receipt dtd.11.9.2017 issued by postal department for having sent Ex.P3 notice by registered post to the accused. Ex.P5 is postal cover in which Ex.P3-notice was sent by registered post to the accused but which has returned unserved with shara dtd.21.9.2017.
11. The accused has contended that he was not residing or carrying of business in the address shown in Ex.P3 notice and Ex.P5 postal cover and that he has been residing in 18th Cross, Renuka Nagar, Taloor Road, Bellary. It is further contended that LPG Gas Bill of the accused issued by Parimala Bharat Gas and got marked as Ex.D2 6 clearly shows that the accused has been residng in 18 th Cross, Renuka Nagar, Taloor Road, Bellary and as such it is clear that no notice was served on the accused. It is further contended that even PW.1 has admitted that Ex.P3- notice is not served on the accused. When Ex.P3-notice is sent at the wrong address and he has not served on the accused, the present complaint for the offence punishable U/s. 138 of N.I. Act is not maintainable against the accused and deserves to be dismissed. In this regard, the counsel for the accused relied upon decision in 2012 (1) AIR Kar R
19.
12. No doubt, it is clear from Ex.P5-postal cover that when Ex.P3-notice was sent by registered post to the accused at the address of W.No.2, Handihal Village and Post, Bellary Taluk & District - 583103, it was returned unserved with postal shara "ಈ ವಳಳಸದವರರ ಬಳಳಳರಯಲಲ ವಳಸವಳಗದಳದರರ. ವಳಳಸ ಇಲಲದ ಕಳರಣ ದದ21.9.17 ರರದರ ವಳಪಸಸ ಕಳಸಲಳಗದರ." However DW.1 has admitted on page 2 of his cross- examination that he was running business (as proprietor) in the name and style of Abhi Enterprises in Handihal Village, Bellary Taluk & District. Therefore, it cannot be said that the said address of Handihal Village is wrong address. No doubt, it is clear from postal endorsement at Ex.P5 and the contents of Ex.D2 receipt that the accused is residing in Renuka Nagar, Bellary. However It is pertinent 7 to note that the address shown in Ex.P3 notice and Ex.P5 postal cover is address of place business of the accused while the address shown in Ex.D2-receipt is residential address of the accused.
13. In 2007 (6) SCC 555 ( C C Alavi Haji Vs Palapetty Muhamed and another), it is held that in view of Sec.27 of General Clauses Act and Sec.114 of Evidence Act, once notice is sent by registered post by correctly addressing to the drawer of the cheque, the service of notice is deemed to have been effected. The mandatory requirement of issue of notice in terms of Sec.138 Proviso (b) stands complied with. When the notice is sent in the said manner. However the drawer can rebut the presumption about the service of notice by showing that he had no knowledge that the notice was brought to his address or the address mentioned on the cover was incorrect or the letter was never tendered or report of postman was incorrect. It is further held that when the accused claim not to have received the notice sent by post but received copy of complaint with summons, he can within 15 days of receipt of summons make payment of the cheque amount and on that basis submit to the court that the complaint be rejected. He then cannot contend that there was no proper service of notice.
814. The above said principle of law laid down the Hon'ble Supreme Court is aptly applicable to the present case on hand. Admittedly, the accused was running his business in the address of Handihal Village shown in Ex.P3 notice and Ex.P5 postal cover. The accused has not produced any documents to show that he discontinued such business in the said address on the date when Ex.P5- postal cover came to the said address. When the complainant has sent Ex.P3-notice by registered post at the said address of Handihal Village where the accused was carrying on business, it cannot be said that Ex.P3- notice was sent to wrong address. Therefore, when Ex.P3- notice was sent by registered post at the correct address, such notice is presumed to have been served on the accused. Merely because, there is postal endorsement in Ex.P5-postal cover that the accused is residing in Bellary, it cannot be said that the address shown in Ex.P3 and P5 is incorrect. In fact, the accused is residing in Renuka Nagar, Bellary in the address shown in Ex.D2 while the accused was carrying on his business in Handihal Village in the address shown in Ex.P3 notice and Ex.P5 postal cover. The place of business is different from the place of residence. It is not the case of the accused that he was carrying on business and residing in one and the same address. Therefore, the presumption U/s.27 of General Clauses Act 9 is applicable in the present case on hand. On the other hand, the accused has utterly failed to prove that Ex.P3- notice was sent to incorrect address or that he had no knowledge of Ex.P3-notice. Hence, it can be concluded that Ex.P3-notice is duly served on the accused. The decision relied upon by the counsel for the accused is not applicable to the present case on hand.
15. It is clear from Ex.P1 to P5 that when the complainant presented Ex.P1-cheque to its banker, it was returned with bank shara "funds insufficient" on 31.8.2017 and that when the complainant got issued Ex.P3-notice by registered post, it was presumed to have been served on 21.9.2017. In other words, when the complainant presented the cheque in question within three months from the date of said cheque, it was dishonored and that when the complainant got issued statutory notice U/s. 138 of N.I. Act, it was deemed to have been served on the accused. Hence, the present complaint filed on 17.10.2017 is well within time.
16. As regard to legally enforceable debt or liability, in 2010 (11) SCC 441 - (Rangappa Vs Sri. Mohan), it is held that;
" The presumption mandated by Sec.139 of the Act includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebutable presumption and it is open to the accused to raise a defence wherein the existence 10 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 complainant"..............."when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own".
17. In ILR 2006 KAR 2958 (Rajendraprasad Vs M. Shivaraj), it is held that Bank Manager of accused is more competent person to say whether it is the signature of the accused or not with reference to the specimen signature. In the bank's intimation, the discrepancy of the signature with the specimen signature is not the ground for dishonour. In the instant case, the banker does not mention that the signature is discrepant and does not tally with the specimen signature. Therefore, the self -serving denial of signature in the cheque cannot be a good evidence to come to the conclusion that the signature on the cheque is not that of the accused. The banker's no objection for the signature in the cheque is one of the strongest circumstance to corroborate that the signature on the cheque is that of the accused. The possession of the loose 11 cheque with the complainant suggests an inference of endorsement and delivery of incohate instrument which impliedly admits the issuance of cheque in favour of the complainant.
18. The principles of law laid down in the above said decisions are applicable to the present case on hand. DW.1 has admitted on page 2 of his cross-examination that Ex.P1-cheque is drawn on his bank account. But the accused has denied his signature on Ex.P1-cheque. However, it is clear from Ex.P2-cheque return memo issued by banker that Ex.P1-cheque is dishonored for the reason "
funds insufficient". In other words, it is clear that Ex.P1- cheque is not dishonored for the reason "drawer signature differs". The banker of the accused is more competent to say whether it is the signature of the accused or not with reference to specimen signature. When the banker does not mention in Ex.P2-cheque return memo that the signature does not tally with specimen signature, self serving denial of signature in the cheque by the accused cannot be good evidence to come to conclusion that the signature of the cheque is not that of the accused. Furthermore, the very possession of Ex.P1-cheque with complainant leads an inference of endorsement and delivery of incohate instrument which impliedly admits the issuance of cheque in favour of the complainant.12
Therefore statutory presumption arises U/s. 139 of N.I. Act in favour of the complainant that Ex.P1-cheque is issued in discharge of legally enforceable debt or liability. The burden of rebutting the said presumption by probable defence is on the accused.
19. It is the case of the complainant that the complainant supplied insecticides etc., to the accused who was distributor of the complainant company on credit basis and towards said liability, the accused issued Ex.P1-cheque which came to be dishonored. On the other hand, it is the defence of the accused that he is not distributor of the complainant company nor purchased any insecticides etc., from the complainant company. It is further defence of the accused that he is not liable to pay any amount to the complainant company nor has he issued Ex.P1-cheque towards said liability. It is specific defence of the accused that in 2016 when he was away from his shop, one Jadiyappa who is salesman of complainant company came to the said shop and stolen blank unsigned cheques from the shop. It is further defence of the accused that thereafter accused approached his banker and submitted complaint to the banker who in turn issued acknowledgment as per Ex.D1 that the cheques are destroyed. It is further defence of the accused that the 13 complainant company has misused one of such stolen cheques and filed this false complaint against the accused.
20. On careful perusal of evidence on record, it is clear that defence of the accused is not probable nor does it inspire confidence of this court. It is because, even though the accused has produced Ex.D1, it is clear from the said document that while the said document is computerized copy, the date of 6.7.2017 is written in blue ink. It is also further clear that there is no printed date on Ex.D1. Further if the accused had really submitted the complaint to his banker that cheques No.551 to 558 (including Ex.P1-cheque) were stolen or lost, the banker would have endorsed that said cheques are stopped by the accused. However there is nothing in Ex.D1 to show that the accused has given stop payment instruction to the banker. On the other hand, Ex.D1 discloses that the said cheques were destroyed. It is not clear from Ex.D1 on what grounds the banker has endorsed as "destroyed". In fact the accused should have produced copy of complaint which he had submitted to his banker after alleged theft or loss of cheques. Even though Ex.P1-cheque is not destroyed, it is disclosed in Ex.D1 that cheque No.555 I.e Ex.P1-cheque and seven other cheques have been destroyed. There is nothing in the said document to show that payment of said cheques have been stopped by the 14 accused. Therefore only the banker of accused is competent to clarfiy and explain why Ex.D1 shows that Ex.P1-cheque and other seven cheques have been shown as "destroyed" in Ex.D1, instead of "payment stopped by the drawer". However the accused has not summoned and examined his banker to explain and clarify the meaning of endorsment in Ex.D1. In absence of such evidence, it is not proper and safe to reply upon the documentary evidence at Ex.D1. Hence Ex.D1 is not helpful to prove the defence of the accused.
21. Secondly, even oral evidence of DW.1 is not sufficient nor reliable to prove the defence of the accused. It is because DW.1 has deposed that in 2016 when he was not in his shop, one Jadiyappa, salesman of complainant company stole blank unsigned cheque of the accused which had been kept in the said shop. However, it is not clear from evidence of DW.1 as to whether the said shop of the accused was closed or whether any other employee of the accused was present in the shop when said Jadiyappa came to the shop of the accused. If the shop was closed at that time, it is not clear how said Jadiyappa could steal cheque from the shop. If any employee of the accused was present in the shop at that time, the accused has not examined such employee to prove the defence of the accused. Even the name of the employee or other person 15 who was present in the shop when said Jadiyappa came to shop of the accused is not stated in the evidence of DW.1. DW.1 has also not disclosed the date or month on or in which the said Jadiyappa came to the shop of accused and stole the cheques. Therefore evidence of DW.1 is vague and uncertain regarding material facts. Furthermore, the accused has not produced any evidence to show that one Jadiyappa was salesman or employee of complainant company. The accused has also not explained how the alleged unsigned blank cheque came into the possession of the complainant company. It is pertinent to note that even though the accused contends that he has submitted complaint before his banker regarding loss of cheques, the accused has not lodged any police complaint against said Jadiyappa or complainant company. The accused has also not got issued any notice to the complainant company calling upon the complainant company to return Ex.P1- cheque. Any pruden person in the place of accused would have lodged police complaint against person who had stolen his cheque or misused his cheque or such prudent person would have got issued legal notice to return such cheque. Such inaction on the part of the accused raises serious doubt regarding the defence of the accused.
22. Thirdly, the complainant has produced Ex.P6 which is account statement of accused maintained by 16 complainant company. Ex.P7 are the tax invoices of goods supplied by complainant company to the accused company. These documents clearly show that the complainant company supplied the goods to the accused who is distributor of the complainant company and that cheque amount was due as on the date of cheque. Even though the accused has disputed these documents, the accused has not produced any evidence on record to rebut this documentary evidence. Hence the complainant has proved his case by producing Ex.P6 and P7-documents.
23. Counsel for accused has argued in the written arguments that the complainant has admitted that there is no specific averment in the letter of authority regarding entrusting the complainant to conduct the case. Even the complainant is not specific how many Board of Directors in the company and also admitted that no resolution has been passed for conducting the case of the complainant. Hence, it is further argued that complainant I.e CW.1 is not competent to conduct this case. It is further argued that the complainant has further admitted that person who was earlier representing the complainant company has quit the job and come on record no substitute application has not been mentioned by the complainant. Even the complainant has not at all mentioned in the evidence and in the substitution application since when the complainant 17 is discharging the duties in the above said complainant company. In this regard, counsel for accused relied upon decisions in ILR 2014 KAR 2168, ILR 2007 KAR 3155 and 2014 (1) KAR. L.J. 449, in which it was held that when no resolution has been passed on behalf of the company authorizing any person to conduct the case or when no documentary evidence is produced to show that the person who signed the complaint or who conducted the case has authority in law to represent the company, such complaint is not maintainable.
24. However above said contentions of the accused cannot be accepted because the complainant has produced Ex.P8 to P10 authority letters which clearly show that complainant company has authorized CW.1 to conduct this case. Hence it cannot be said that there is no documentary evidence to show that the person who is conducting the case has no authority from the complainant company to conduct the case. Moreover, contention of the accused that complainant admitted that no resolution has been passed for conducting the case by the company is not correct. In fact, it is clear from page 6 of cross- examination that CW.1 has denied the suggestions that no resolution was passed in the meeting of Board of Directors of the complainant company authorizing him to conduct this case. Therefore it can be inferred that there was 18 resolution passed in the meeting of Board of Directors authorizing CW.1 to conduct this case. Therefore, when complainant has produced the documentary evidence of Ex.P8 to P10 and CW.1 denied suggestion that there was no resolution, the complaint cannot be dismissed on the technical ground that no copy of resolution is produced in this case. The above said decisions relied upon by the counsel for the complainant are not applicable in the present case on hand because CW.1 has denied that there was no resolution passed by the complainant company authorizing him to conduct this case. These decisions are also not applicable to the present case on hand because documentary evidence of Ex.P8 to P10 clearly show that the complainant company has authorized CW.1 to conduct this case. Hence above said decisions and Sec.291 of Companies Act are not applicable to the present case on hand.
25. Counsel for accused has argued in the written arguments that the complainant has admitted that there is difference of signatures on cheque, vakalath of accused and signature of plea. It is further argued that there is no seal and signature of the accused on the invoices produced by the complainant. It is further argued that registration number of the vehicle which transported the goods is not mentioned in the L.R. It is further argued that it is not 19 stated in the legal notice or in complaint or in the evidence as to which type of materials were supplied to the accused. Therefore it is argued that the complainant has not at all established prima facie case against the accused.
26. However above said facts by themselves are not sufficient to rebut the statutory presumption U/s.139 of N.I. Act, particularly when the accused has utterly failed to prove his defence that blank unsigned cheques was stolen from shop by one Jadiyappa, salesman of the complainant company and misused by the complainant company. The accused has not adduced sufficient evidence to rebut the statutory presumption in favour of the complainant. Merely because there is difference of signatures of accused in cheque, vakalath or plea, the case of the complainant cannot be disbelieved. The chance of accused intentionally signing in different manner to avoid his liability cannot be overruled. Therefore above said contentions do not hold any water.
27. The counsel for the accused has argued that CW.1 has admitted during cross-examination that cheque has been issued during the year 2014. It is further argued that this complaint is filed during the year 2017 and as such it is barred by limitation.
28. However above said contention of the accused also does not hold any water because though CW.1 has 20 admitted on page 11 of his cross-examination that accused has given Ex.P1-cheque to the complainant company in 2014, it is clear from Ex.P1-cheque that it bears date of 30.8.2017. The limitation commences from the date mentioned on the cheque and not from the date of handing over of the cheque. The post dated cheque is in the nature of bill of exchange and it becomes cheque only when the date mentioned on the cheque has expired. Therefore even though CW.1 has admitted the said cheque was given by the accused to the complainant company in 2014, the said cheque bears the date 30.8.2017 I.e post dated cheque and as such the limitation commences only on the date mentioned in the said cheque and not from the year 2014. Hence it cannot be said that this complaint is barred by limitation.
29. In view of my above discussion, I am of considered opinion that the accused has utterly failed to prove or probablize his defence and thereby to rebut the said statutory presumption available in favour of the complainant. It clearly appears from the evidence on record that the defence put up by the accused is only afterthought without any basis. Unless and until the accused rebuts the statutory presumption with convincing and cogent evidence, burden cannot be shifted on the complainant. The complainant has placed sufficient 21 materials on record to establish his contention. The evidence on record is sufficient to accept the case of the complainant that accused had issued the cheque in question towards discharge of legally enforceable debt or liability and the complainant has proved all the requirements of Sec.138 of N.I. Act, so as to constitute the offence against the accused. Therefore, Point Nos.1 & 2 are answered in affirmative.
30. Point No.3: As discussed in connection with Point Nos.1 & 2, the complainant has proved his case as to commission of the offence punishable U/s.138 of N.I. Act by the accused. The punishment prescribed for the said offence is imprisonment for a period which may extent to two years or with fine. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, provisions of Sec.117 of N.I. Act, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), etc., this court is of the considered view that it is just and desirable to impose fine of Rs.3,00,000/- and out of the said amount a sum of Rs.5,000/- has to be remitted to the State and the remaining amount of Rs.2,95,000/- is to be given to the complainant as compensation as provided U/s.357(1) of Cr.PC and accordingly Point No.3 is answered in Affirmative.
2231. Point No.4: For the reasons discussed in connection with Point Nos.1 to 3 this court proceed to pass the following......
ORDER Acting under Section 255(2) of Cr.PC accused is hereby convicted for the offence punishable under Section 138 of Negotiable Instruments Act. The accused shall pay a fine of Rs.3,00,000/- for the offence punishable U/s.138 of N.I. Act within one month. In default of payment of fine amount, the accused shall under go simple imprisonment for a period of four months.
By exercising the power conferred U/s.357(1) of Cr.PC., out of total fine amount of Rs.3,00,000/-, a sum of Rs.2,95,000/- is ordered to be paid to the complainant as compensation and Rs.5,000/- is ordered to be remitted to the State.
The bail bond of the accused stands
cancelled.
Supply the free copy of this judgment to the accused forth with.
(Dictated to the stenographer, transcript thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 2nd Day of January, 2020) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru 23 ANNEXURE Witnesses examined for the complainant:
PW.1 : Mr. Muttanagouda .S
Witnesses examined for the defence:
DW.1 : Mr. Jagadish
Documents marked for the complainant:
Ex.P1 : Cheque
Ex.P1(a) : Signature of the accused
Ex.P2 : Bank endorsement
Ex.P3 : Legal notice
Ex.P4 : Postal receipt
Ex.P5 : Returned postal cover
Ex.P6 : Customer Statement of Account
Ex.P7 : L.R. No.9066
Ex.P8 : Notarized copy of letter of Authority
Ex.P9 : Letter of Authority
Ex.P10 : Letter of Authorization
Documents marked for the defence:
Ex.D1 : Cheque leaf status inquiry
Ex.D2 : GST Invoice
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU