Bangalore District Court
Tribol Voice Communications vs S.Mohandas on 28 December, 2022
KABC010213762019
IN THE COURT OF THE LXIII ADDL.CITY CIVIL &
SESSIONS JUDGE (CCH-64) AT BENGALURU
Dated this the 28th day of December 2022
: PRESENT :
Sri.A.V.Patil, B.Com., LL.B.,
LXIII ADDL.CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY.
CRIMINAL APPEAL No.1464/2019
APPELLANTS : 1. Tribol Voice Communications
Private Limited,
Represented by its Managing
Director and Directors.
2. Sri Arun Kumar Bolar,
S/o Bhaskar,
Managing Director of Tribol Voice
Communications Private Limited.
3. Smt. Veena,
W/o. Arun Kumar Bolar,
Director of Tribol Voice
Communications Private Limited.
4. Mrs. Suhana Bolar,
D/o. Arun Kumar Bolar,
Tribol Voice Communications
Private Limited.
(By Sri K.R.Poorna Prasad, Advocate)
2 Crl.Apl.No.1464/2019
-V/s-
RESPONDENT : S.Mohandas
S/o Late.Srinivas Murthy,
Aged about 41 years,
C/o G.M.Controls LNC,
No.154/1, 1st Floor, 4th Main,
8th Cross, Chamarajapet,
Bengaluru - 560 018.
At present No.777, 9th Main Road,
Bhuvaneshwari Nagara,
Bengaluru - 560 085.
(By Sri.C.N.A.M., Advocate)
JUDGMENT
This appeal has been filed by the accused u/s 374(3) of Cr.P.C., being aggrieved by the conviction judgment passed in C.C.No.33517/2011 dated 10.06.2019 by learned XVIII ACMM, Bengaluru. Appellants No.1 to 4 were accused No.1 to 4 before the Trial Court filed by the respondent/complainant for an offence punishable u/s 138 of NI Act.
2. The parties will be referred as the complainant and accused No.1 to 4 as per their ranking given in the Trial Court.
3. The gist of the complainant's case is as under:
3 Crl.Apl.No.1464/2019Complainant is a business man. Accused No.1 is a Private Company registered in the office of the Registrar of the Companies, represented by its Directors. Accused Nos.2 to 5 are the Directors of the accused No.1/Company. Since a year accused No.2 is known to the complainant through one Subramanyam. The accused No.2 discussed with accused Nos.3 to 5 and had approached the complainant for loan of Rs.10,00,000/- in the name of accused No.1/company for its business upliftment. During 2010 the complainant paid an amount of Rs.10,00,000/- on loan and paid the said loan amount through RTGS. Upon several requests by the complainant to accused No.2 to repay the loan amount was of no avail. On several demand made by the complainant, accused No.2 assured to repay the principal amount within one month and made endorsement to that effect. As per the assurances, accused No.2 had issued cheque bearing No.196014 dated 20.04.2011 for Rs.10,00,000/- drawn on Vijaya Bank, Infantry Road, Bengaluru. Accused No.2 also executed a promissory note and loan agreement. As per the instructions of accused No.2, the complainant presented the said cheque through his banker i.e., Canara Bank, New Town Branch, 4 Crl.Apl.No.1464/2019 Yalahanka, Bengaluru. However, the said cheque was dishonored on the ground "Account Frozen" or "Account Closed". To that effect, the accused banker issued memo dated 28.04.2011. Thereafter, on 12.05.2011, complainant got issued legal notice to the accused calling upon the accused to make payment of the amount covered under the cheque in question. The said notice served upon the accused.
On receipt of the said legal notice, accused Nos.1 to 5 issued untenable reply. However, they failed to comply with the demand made in the said legal notice. As party No.6 to the legal notice issued reply stating that he is neither a Director nor have any connections, complaint filed against party No.6 referred in the legal notice is deleted. According to the complainant, accused Nos.2 to 5 being the Directors of accused No.1/Company have committed offence punishable u/s 138 of Negotiable Instruments Act. Therefore, the complainant has filed the complaint against the accused on 24.06.2011.
4. As per the Trial Court records, in pursuance of service of summons, accused appeared and got enlarged on bail. Plea read over and explained to the accused on 20.12.2017 and he pleaded not guilty 5 Crl.Apl.No.1464/2019 and claims to be tried.
5. In order to prove the guilt of accused, complainant has examined PW1 and got marked Ex.P1 to P21. The accused statement recorded. In order to disprove the case of the complainant, accused No.4 examined as DW1, accused No.2 examined as DW2, accused No.5 examined as DW3 and they got marked Ex.D1 to D14.
6. After hearing both sides and considering the evidence placed on record both oral and documentary, the learned Trial Judge has convicted the appellants/accused Nos.1 to 4 and passed the conviction judgment.
7. Being aggrieved by the said judgment the accused Nos.1 to 4/appellants have questioned the legality of the judgment in this appeal. The accused Nos.1 to 4 have challenged the judgment on several grounds. The Trial Court has not considered the Ex.D5/Articles of Association prohibiting the Managing Director of the Company by borrowing the money. In spite of that the Trial Court passed the conviction judgment to accused No.1 to 4. There was no Board Resolution passed by the accused/ 6 Crl.Apl.No.1464/2019 Company through its Board of Directors empowering accused No.2 to borrow on behalf of the Company. No specific allegations made against the accused No.3 and 4 and nothing has been shown that they are responsible for the day to day affairs of the Company and thereby the ingredients of Sec.141 of Negotiable Instruments Act was not made out against accused No.3 and 4. Non-executive Director not signing the cheque cannot he held vicariously liable u/s 141 of N.I. Act. Complainant failed to prove his source of income and lending of Rs.10,00,000/- as alleged in the complaint. The account statement produced by the complainant does not tallying with the income tax returns. The execution of the Promissory Note is denied by the accused and the same is incomplete. The Trial Court has erred in not considering the facts that Ex.P1 is signed blank cheque of the accused. Among other grounds prayed to set aside the conviction order passed by the Trial Court by allowing the appeal.
8. In pursuance of the service of notice, the respondent appeared through his Counsel.
9. The entire records of CC No.33517/2011 have been called for and perused.
7 Crl.Apl.No.1464/201910. The learned Counsel for the appellants filed written arguments and has reiterated the grounds urged in the appeal Memo. The appellants have challenged the conviction order passed by the Trial Court mainly on two grounds. According to the appellants/accused, complainant has not issued a mandatory statutory notice as contemplated under law, there is discrepancy in the date of sending the notice and receipt of notice sent by addressee. The said discrepancy clearly established that the complainant has concocted the documents and falsely implicated the accused persons without issuing statutory notice. The documents produced by the complainant disclose that the notice sent was returned with an endorsement as "No such person". Such being the facts, it cannot be said that the mandatory requirements of Section 138 of NI Act, are complied with. Secondly, according to the appellants/accused, the complainant has not made out a case against the accused No.3 & 4. As per well- settled law only a person in charge of day-to-day business activities and responsible for conducting the business at the time of commission of offence can be held liable. Any person at the time of commission of offence, was a Director cannot be held liable under 8 Crl.Apl.No.1464/2019 the provisions of the NI Act. At the time of commission of offence, the accused No.3 & 4 were not in charge of day-to-day affairs of the accused No.1/Company and therefore, they are not responsible for the conduct of Company's business. Despite of the evidence on record, the Trial court has ignored the same and has proceeded to convict the accused persons, which is contrary to the provisions of law. According to the learned Counsel for appellants, the conviction order passed by the Trial Court is illegal and liable to be set aside. Hence, prayed to allow the appeal and set aside the conviction judgment passed by the Trial court. In support of his arguments, the learned Counsel for appellants has placed reliance on the following citations:-
1. Crl. Appeal No.2463/2014 (SC) (Shailendra Swarup Vs. The Deputy director, Enforcement Directorate)
2. Crl. Appeal Nos.83-85/2004 (SC) (N.K. Wahi Vs. Shekhar Singh & Others)
3. Crl. Appeal No.592/2007 (SC) (N. Rangachari Vs. Bharat Sanchar Nigam Ltd.,) Reported in (2007) 5 SCC 108
11. Per contra, the learned Counsel for respondent has also filed written arguments and justified the 9 Crl.Apl.No.1464/2019 findings recorded by the Trial Court while passing the conviction judgment. According to him complainant paid the amount through RTGS to the tune of Rs.10,00,000/- to the account of accused No.1. The accused No.3 to 5 assured the payment of Rs.10,00,000/- within a month and executed Ex.P.7/ agreement dated 24.10.2010. In pursuance of the commitment made by the accused, the accused No.2 with knowledge of other two Directors, has issued a cheque in question. When the said cheque was presented for encashment, it was dishonored. Even after issuance of legal notice, the accused have failed to pay the amount covered under the disputed cheque. The cheque in question was issued by the accused No.2 for discharge of legally recoverable debt in favor of complainant. The ingredients of Section 138 of NI Act are duly complied with. The Trial Court by taking into consideration the material placed before it, has passed the conviction order. No materials placed on record to interfere with the findings recorded by Trial Court. Hence, prayed to dismiss the appeal. In support of his arguments the learned Counsel for respondent has placed the reliance on the following citations:
10 Crl.Apl.No.1464/20191. (2005) 8 SCC 89 (S.M.S. Pharmaceuticals Ltd., Vs. Neeta Bhalla & Another).
2. AIR 2007 SC 912 (Saroj Kumar Poddar Vs. State (NCT of Delhi) & Another).
3. AIR 2011 SC 1090 (Harshendra Kumar D Vs. Rebatilata Koley etc).
4. AIR SC 3086 (Sabitha Ramamurthy & Another Vs. R.B.S. Channabasavaradhya).
5. 2007(4) Crimes 235 (SC) (M/s Rahul Builders Vs. M/s Arihant Fertilizers & Chemical & Another).
6. AIR 2001 SC 518 (SC) (Rajneesh Aggarwal Vs. Amit J. Bhalla).
12. In view of the arguments submitted in this case the following points that arise for my consideration are:
1. Whether the learned Trial Judge has properly appreciated the orally and documentary evidence on record?
2. Whether the judgment of Trial Court calls for interference by this Court?
3. What order?
13. My answer to the above points are as under:
Points No.1 & 2 : in the partly affirmative Point No.3: As per final order for the following;
REASONS
14. Point No.1:- In order to prove his case, 11 Crl.Apl.No.1464/2019 complainant/S.Mohandas examined himself as PW1 on oath and has reiterated the allegations made in the complaint. He got marked documents Ex.P1 to
21. Ex.P1 is the cheque, Ex.P2 is the Bank memo, Ex.P3 is the office copy of demand notice, Ex.P4 is the reply notice, Ex.P5 is the postal receipts, Ex.P6 is the Company Registration Certificate, Ex.P7 is the Agreement of loan, Ex.P8 eight returned RPAD postal covers, Ex.P9 is the Demand Promissory Note, Ex.P10 to 13 are the postal receipts, Ex.P14 to 16 are the postal acknowledgments, Ex.P17 is the legal notice, Ex.P18 is the copy of evidence in CC No.24468/2011, Ex.P19 is the statement of account, Ex.P20 is the Income Tax return acknowledgment, Ex.P21 is the legal notice.
15. In order to disprove the case of the complainant, accused No.4 examined as DW1 and has stated on oath that she was Director of the Company and in the year 2003 has tendered the resignation. She is no way connected to the present case. Accused No.2 examined as DW2 and has stated on oath that he is Managing Director and accused No.3 to 5 were Director of the Company. In the year 1995 accused No.5, May 2003 accused No.4 tendered the 12 Crl.Apl.No.1464/2019 resignation and thereafter he alone looking after the affairs of the company. The complainant and his brothers shown interest in taking over business of accused No.1 and agreed to invest money for acquiring the business. Accordingly the complainant and others invested the amount in the accused No.1/ company, at that time towards security complainant obtained the signature of accused No.2/Managing Director on various balk papers and blank undated cheques. After issuance of notice he came to know about the cheques. Thereafter in the month of June he paid the amount to the complainant in cash.
Accused No.5 examined as DW3.
16. DW1 to 3 have got marked Ex.D1 to D14. Ex.D1 is Resignation letter, Ex.D2 is copy of Certificate of Incorporation, Ex.D3 is the copy of challen, Ex.D4 is the copy of acknowledgment, Ex.D5 is the copy of Memorandum of Association, Ex.D6 is the Resignation letter, Ex.D7 is the Resignation accept letter, Ex.D8 is the Intimation letter, Ex.D9 is the letter, Ex.D10 is the Relieving letter, Ex.D11 is the Letter of appointment, Ex.D12 is the Increment letter Ex.D13 is the letter and Ex.D14 is the Income Tax return Form.
13 Crl.Apl.No.1464/2019This is all the oral and documentary evidence placed on record by the complainant and accused in support of their respective contentions.
17. I have gone through the citatitions relied on by the learned Counsels for appellants and respondent, kept in mind the views taken in the said citations while re-appreciating the evidence on record and coming to the final conclusion. I respectfully agree with the views taken in the said citations.
18. Since the appellant No.3 and 4/accused No.3 and 4 claims that complainant fails to prove the ingredients of Se.141 of NI Act, let me first ascertain as to whether the complainant prove ingredients of Se.141 of NI Act.
19. According to the learned Counsel for appellant/ accused, accused No.3 and 4 were not in charge of and responsible to the Company for the conduct of business of the Company. The Trial Court without considering the contention taken by the accused No.3 and 4 erroneously convicted accused No.3 and 4.
20. In the light of the said submission perused the complaint and noticed that the complainant has filed complaint alleging that accused No.1 is the company 14 Crl.Apl.No.1464/2019 and accused No.2 to 4 are the Directors of the said company. There is no specific pleading in the complaint that all accused No.2 to 4 were in charge of the responsible in the conduct of the business of the company.
21. In the Negotiable Instruments Act, 1881 initially there was no provision regarding offences by Companies and by Act 66 of 1988 Section 141 was inserted in the Negotiable Instruments Act, 1881 which provision is to the following effect:
"Section 141. Offences by companies-
(1) If the person committing an offence u/s 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
(2) Notwithstanding anything contained in sub- section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is 15 Crl.Apl.No.1464/2019 attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.--For the purposes of this section, --
(a) "company" means anybody corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm."
22. The Hon'ble Apex Court had occasion to consider the requirements of Section 141 in a decision relied on by Advocate for respondent reported in 2005 (8) SCC 89 (S.M.S. Pharmaceuticals case). Paragraph 4 of the judgment, is relevant to resolve the dispute in question. For the sake of convenience the said paragraph is extracted and reproduced here under:
"4.....The normal rule in the cases involving criminal liability is against vicarious liability, that is, no one is to be held criminally liable for an act of another. This normal rule is, however, subject to exception on account of specific pro- vision being made in statutes extending liability to oth- ers. Section.141 of the Act is an instance of specific provi- sion which in case an offence under Section 138 is commit- ted by a Company, extends criminal liability for dishonour of cheque to officers of the Company. Section 141 contains conditions which have to be satisfied before the liability can be extended to officers of a company. Since the provision creates criminal liability, the conditions have to be strictly complied with. The conditions are intended to ensure that a person who is sought to be made vicariously liable for an of- fence of which the principal accused is the Company, had a role to play in relation to the incriminating act and further 16 Crl.Apl.No.1464/2019 that such a person should know what is attributed to him to make him liable. In other words, persons who had nothing to do with the matter need not be roped in. A company being a juristic person, all its deeds and functions are result of acts of others. Therefore, officers of a Company who are re- sponsible for acts done in the name of the Company are sought to be made personally liable for acts which result in criminal action being taken against the Company. It makes every person who, at the time the offence was committed, was in charge of and was responsible to the Company for the conduct of business of the Company, the Company, li- able for the offence. The proviso to the sub-section contains an escape route for persons who are able to prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence. "
23. From reading of Sec.141 of NI Act and the law laid doen by Hon'ble Apex Court in catena of decisions including the judgments relied on by both side Counsels it is very much clear that every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. It means the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person 17 Crl.Apl.No.1464/2019 liable.
24. Now the question is whether the complainant has proved the ingredients of Sec.141 of N.I. Act. In order to ascertain the same it is necessary to go through the allegations made in the complaint the document produced by the complainant. In the complaint, complainant has pleaded that accused No.1 is the company registered in the office of the Registrar represented by the Managing Director and Directors i.e., accused No.2 to 4.
25. In the present case from the stand taken by the accused No.2 to 4, it is evident that there is no dispute that accused No.2 is the Managing Director of the accused No.1/company. However, accused No.3 and 4 seriously disputed that at the relevant time they were in charge of the conduct of the business of company. In order to prove that accused No.3 and 4 were in charge of and responsible to the Company for the conduct of business of the Company the complainant has relied on Ex.P6/registered certificate of incorporate. On perusal of the said document it is noticed that the accused No.2 to 4 are shown as the Directors of the accused No.1/Company. In that 18 Crl.Apl.No.1464/2019 document nowhere there is mention that the accused No.3 and 4 are managing the affairs of the accused No.1/Company. As per the ratio laid down by Hon'ble Apex Court, the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company. It is also important to note that as per the allegations made in the complaint the accused No.2 approached the complainant and not accused No.3 and 4. The complainant also produced Ex.P7/agreement. On perusal of said Ex.P7 it is noticed that accused No.3 and 4 are not signatories to the said agreement and on accused No.2 as Managing Director is the signatory to it.
26. In the present case the entire burden is on the complainant to prove that at the relevant point of time accused No.3 and 4 were also in charge of and were responsible to the Company for the conduct of business of the accused No.1/Company along with accused No.2 as alleged in the complaint.
27. As discussed above in Ex.P6 nothing has been mentioned that at the relevant point of time accused No.3 and 4 were also managing the affairs of the 19 Crl.Apl.No.1464/2019 accused No.1/company. Even nothing has been produced by the complainant to establish the active participation of accused No.3 and 4 in the transaction alleged in the complaint. Even though DW1 and 2 are subjected to cross examination nothing has been elicited in that regard. In order to prove that accused No.3 and 4 are also responsible for commission of offence absolutely no positive admissible evidence has been produced by the complainant.
28. On re-appreciation of oral and documentary evidence produced on record by the parties to the case, in the opinion of this Court, complainant has miserably failed to prove that accused No.3 and 4 are also responsible for commission of offence as alleged in the complaint. The Trial Court basing on the entries made before the Registrar of the Companies reached to the conclusion about active participation by accused 3 and 4. The said conclusion is erroneous because as noted supra in that entry nowhere there is mention that accused No.3 and 4 are Managing Directors of the accused No.1/company. For the reasons discussed above the Trial Court has committed serious error in holding that accused No.3 20 Crl.Apl.No.1464/2019 and 4 have also actively participated in the business. Therefore, the finding of the Trial Court to the effect that accused No.3 and 4 have also actively participated in the business of accused No.1/company is without any base and same is liable to be set aside. In view of the above discussion complainant failed to prove that accused No.3 and 4 have committed the offence as alleged in the complaint.
29. Now let me consider the allegations made against accused No.1 and 2. Before considering the case on merits, it is necessary to note the ratio lay down by Hon'ble Apex Court reported in AIR 2010 SC 1898 (Rangappa Vs. Sri Mohan). In said citation the Hon'ble Apex Court discussed about the various citations and held as under:
"...............Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant............"
The above referred citation of Hon'ble Apex Court of India is decided by bench consisting of Three Judges.
21 Crl.Apl.No.1464/201930. In Ex.P4/reply notice at para No.4 accused have admitted about receipt of amount from the complainant to the tune of Rs.10,00,000/-. It is also necessary to note that in oral evidence DW1 has deposed that after receipt of legal notice, he paid the amount to the complainant in cash. This evidence is sufficient to prove the payment of money by the complainant to the accused No.2.
31. In this case accused No.2 has not disputed Ex.P1/cheque belongs to the account of accused No.1/company and his signature on it. In view of the principle lay down by the Hon'ble Apex Court of India in the above referred decision the complainant discharged his initial burden. By virtue of section 118 and 139 of Negotiable Instruments Act, the complainant being the holder of the cheque is entitled to invoke presumption that Ex.P1/cheque has been issued by accused No.2 on behalf of accused No.1/company for discharging the legally subsisting liability. In view of the principle laid down in the above referred citation of Hon'ble Apex Court, the burden lies on accused No.2 to lead the rebuttal evidence to disprove the fact that Ex.P1/cheque has not issued to the complainant for discharge of debt or 22 Crl.Apl.No.1464/2019 liability.
32. Now whether the said presumption is rebutted by the accused is to be seen. The evidence on record clearly discloses that after dishonor of cheque, the complainant got issued Ex.P3/legal notice to accused No.1 to 4 on 12.05.2011. On receipt of the legal notice, accused No.1 to 3 together got issued Ex.P4/reply and denied the allegations made in the legal notice. In the reply notice, the accused No.1 to 3 have specifically admitted about receipt of Rs.10,00,000/- under RTGS but specifically denied that it was towards loan but it was towards investment of money for acquiring business from accused, at that time pending transfer of shares by accused No.1 shareholder obtained signatures of accused No.2 on various blank papers and blank undated cheques taken as security.
33. In order to prove the said defence taken in the reply notice accused No.2 examined as DW2. Accused No.5 was acquitted by the Trial Court and therefore, the evidence given by accused No.5 as DW3 has no consequence on this appeal.
34. It is the contention of the accused No.2 that the said amount was not paid by the complainant 23 Crl.Apl.No.1464/2019 towards loan but it was paid for equity purpose and the cheques and bond papers collected from the complainant towards security by misusing the same has filed the false complaint. As per the rule of evidence, the entire burden is on the person who asserts in the affidavit. In the instant case the entire burden is on the accused to prove the above said assertion. Even though PW1 was subjected to cross- examination, nothing has been elicited in that regard. It is settled law that the suggestion made and denied by the witness is no evidence at all. In the instant case, no doubt it is true that the suggestions were made by the Advocate for accused in that regard but, those suggestions have been denied by the PW1. Therefore, the said suggestions have no legal sanctity. Except the interest testimony of accused No.2/DW2, absolutely nothing has been placed on record to prove the said defence taken by the accused No.2. Therefore, the said defence taken by the accused No.2 remains intact without any proof.
35. Another ground taken by the Advocate for Appellants that the complainant has not issued statutory notice as contemplated under law, there is discrepancy in the date of sending the notice and receipt of notice sent by addressee. The said 24 Crl.Apl.No.1464/2019 discrepancy clearly established that the complainant has concocted the documents and falsely implicated the accused persons without issuing statutory notice. In view of the discussion of the earlier paragraphs the complainant fails to prove the case against accused No.3 and 4. Therefore, the question for consideration is whether the complainant issued not legal notice to accused No.2 as required under law.
36. It is necessary to note that prior to filing of the complaint, the complainant has got issued legal notice to accused No.1 and 2. The postal receipts are produced at Ex.P11 and 12 dated 10.05.2011. The postal acknowledgments are produced at Ex.P14 and 15 dated 13.05.2011. Accused No.2 also got issued reply notice. In order to ascertain about service of legal notice Advocate for complainant/respondent drew the attention of the Court with regard to the evidence given by the DW2 wherein he has deposed that he repaid the amount to the complainant after receipt of legal notice. Though accused disputes service of notice, it is very much material to note that the summons issued by the Trial Court is served upon the accused No.1 and 2 on the very same address. Moreover, the appellants have mentioned 25 Crl.Apl.No.1464/2019 the very same address in the appeal memo. If the accused No.2/appellant No.2 is not residing in the address shown in legal notice, then why the very same mentioned in the appeal memo. That apart, the accused have not produced any documents to show their addresses and the address shown in the legal notice is not their addresses. In the light of principle laid down by the Hon'ble Apex Court of India in a decision reported in 2007 (3) Crimes 120 (SC) (C.C. Alavi Haji V/s Palapetty Muhammed & Anr), if notice sent through RPAD by correctly addressing drawer of the cheque, mandatory requirement of issue of notice in terms of (b) of proviso to u/s 138 of N.I. Act stands complied with. The evidence on record clearly establishes that the complainant sent the notice to the accused to the correct address through RPAD. Therefore, sending legal notice to the correct address of the accused is in compliance with u/s 138(b) of N.I. Act. Admittedly accused have not repaid the cheque amount as demanded in legal notice. Hence, I do not find any substance in the arguments of learned Counsel for appellants that no legal notice served upon the accused No.1 and 2.
37. At the same time, it is necessary to note that 26 Crl.Apl.No.1464/2019 according to the Ex.P4/reply notice the complainant and his other brothers pending transfer of share of accused No.1 company obtained signature of accused No.2 on various blank papers and blank undated cheques towards security and by filling the blank cheques, filed this false complaint. If really, the cheque was given to complainant and his brother soon after coming to know about the cheque in question was presented for encashment, as a prudent man, accused No.2 being the Managing Director of accused No.1/company would have initiated the legal action against the complainant and his brothers. Admittedly, no legal action initiated either against the complainant or against the bothers of the complainant.
38. It is also necessary to note that if really the accused have not given the cheque in question towards discharge of debt to the complainant, as a prudent man, accused No.2 is expected to intimate the banker to stop the payment, in case of presentation of alleged cheque for encashment. But in the instant case accused has not intimated her banker and this conduct show the falsity of the case of the accused.
27 Crl.Apl.No.1464/201939. Non-initiating the legal action and non- intimating to his banker are the strongest circumstances to draw adverse inference against the accused No.2. As noted supra it is settled law that the presumption has to be rebutted by cogent proof and not by a bare explanation which is merely plausible. On appreciation of material on record in the considered opinion of this Court, the evidence placed on record by the accused is not sufficient to rebut presumption. Hence, it cannot be said that the accused has rebutted the presumption.
40. The word 'unless contrary is proved' is discussed by the Hon'ble Apex Court in a decision reported in 2011 Crl.L.J 4647 (SC). It is observed that "the accused is under the obligation to prove his case in Trial by leading cogent evidence that there was no debt or liability to the satisfaction of the Court". 'Unless contrary is proved' means the presumption has to be rebutted by proof and not by a bare explanation which is mere plausible. The said fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that the reasonable man could act on the supposition that is 28 Crl.Apl.No.1464/2019 exist. Therefore, unless explanation is supported by proof, the presumption created by the provisions cannot be said to be rebutted. On appreciation of evidence on record the explanation of DW1 is not supported by proof. Hence, I have no hesitation to say that the accused fail to rebut presumption. Hence, it cannot be said that the accused have rebutted the presumption.
41. In this case the Court has to peruse whether mandatory requirement of Section 138 & 142 of N.I.Act are complied with or not to take cognizance of complaint for commission of crime punishable u/s 138 of N.I.Act. It should be ascertained from the date of issuance of cheque, presentation of cheque, communication of bank endorsement, issuance of legal notice for payment of cheque amount, service of notice and the date of institution of complaint. Ex.P1/cheque is dated 20.04.2011, presented the cheque for encashment and received intimation from the banker as per Ex.P2 on 28.04.2011 as "Account Frozen", got issued Ex.P3/legal notice on 12.05.2011 and it was served on the accused No.1 and 2 on 13.05.2011 as per Ex.P14 and 15. The complainant filed the complaint on 24.06.2011. It is evident from 29 Crl.Apl.No.1464/2019 the available material that the cheque presented for encashment within validity time, notice demanding the cheque amount and filing of complaint before the Court after service of notice are within the period specified by law. Even after issuance of legal notice to the correct address, accused has not paid the cheque amount. Hence, in the considered view of this Court, the complainant has proved that the accused No.1 and 2 have committed an offence punishable u/s 138 of N.I. Act. The complainant fails to prove that the accused No.3 and 4 have committed an offence punishable u/s 138 of N.I. Act as alleged in the complaint. Accordingly, I answer the above point No.1 partly in the affirmative.
42. Point No.2:- In view of my finding on point No.1, in the considered opinion of this Court, the Trial Court Judge has properly appreciated the oral and documentary evidence placed on record by complainant as well as accused and passed the conviction judgment against accused No.1 and 2 for the offence punishable u/s 138 of N I Act. The appellant No.1 and 2/accused No.1 and 2 are miserably fails to point out that the impugned finding of the Trial Court is illegal and erroneous. Looking 30 Crl.Apl.No.1464/2019 from any angle I do not find any substance in the arguments of learned Counsel for appellant No.1 and
2. Therefore, this Court is of the considered opinion that there is no need to interfere with the findings of the Trial Court with regard to the conviction order passed against the appellant No.1 and 2.
43. In view of my above discussion, I am of the considered view that the learned Trial Court Judge fails to appreciate the evidence on record in proper perspective and passed the conviction judgment against accused No.3 and 4 for the offence punishable u/s 138 of N I Act and erroneously comes to the conclusion that accused No.3 and 4 have committed an offence u/s 138 of N I Act without any evidence. The Order under attack against accused No.3 and 4 is illegal, erroneous, perverse and capricious. As such the interference with the impugned order passed against accused No.3 and 4 is absolutely necessary and the finding of the Trial Court passed against accused No.3 and 4 is hereby set aside. Accordingly, I answer point No.2 partly in the affirmative.
44. Point No.3 :- In view of my finding on point No.1 and 2, I proceed to pass the following:
31 Crl.Apl.No.1464/2019ORDER Appeal filed by the accused No.1 to 4/appellant No.1 to 4 u/s 374(3) of Cr.P.C. is hereby partly allowed.
The appeal filed by the appellant No.1 and 2/accused No.1 and 2 is hereby dismissed.
Judgment of conviction passed in CC No.33517/2011 dated 10.06.2019 by learned XVIII ACMM, Bengaluru, against appellant No.1 and 2/accused No.1 and 2 is hereby confirmed.
The appeal filed by the appellant No.3 and 4/accused No.3 and 4 is hereby allowed. Consequently, the impugned judgment and sentence passed in CC No.33517/2011 dated 10.06.2019 by learned XVIII ACMM, Bengaluru is set-aside for the offence punishable u/s 138 of NI Act and they are acquitted for the said offence.Appellant No.3 and 4/accused No.3 and 4
are entitled for refund of amount of fine deposited before the Trial Court if any for the offences punishable u/s 138 of NI Act.
Bail bond of the accused No.3 and 4 and 32 Crl.Apl.No.1464/2019 surety bond provided by them shall stands cancelled.
Office to send the Trial Court records along with copy of this judgment.
(Dictated to Stenographer, transcribed by her, taken out print corrected by me and then pronounced in the Open-Court on 28th day of December 2022) (A.V.PATIL) LXIII Addl. City Civil and Sessions Judge, (CCH-64), Benglauru City