Bangalore District Court
Steel Hypermart India Pvt. Ltd vs R Murugan on 17 September, 2024
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CC No.2048/2018
KABC030052052018
IN THE COURT OF XXVII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU
Present: Sri. Maruthi.K B.A., LL.B.,
XXVII A.C.J.M Bengaluru.
Dated: This the 17th day of September 2024
C.C. NO.2048/2018
Complainant : M/s Steel Hypermart India Ltd.,
Having its Registered office
at "Mannat" No.2/1A,
Nanjappa Road, Shanthinagar,
Bangalore-560027.
Also having its Branch office
at Survey No.28/2, DIE,
National Highway No.7,
Nallaganakothapalli village,
Shoolagiri. Hosur Taluk,
Pin Code-635117.
Rep by Mr.Mahindra Kumar
Singhi, Director
(Rep by Sri.M.R., Adv.)
V/s.
Accused : 1. Sri.R.Murugan,
Proprietor of
M/s Sri Thirumurguan Engineering
No.1/323-D, M.G.R Nagar,
(North)
Bharathiar Street,
Mookandpalli post, Hosur,
635126
Krishnagiri Dist(TN)
2. Sri.R.Murugan,
Proprietor of
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CC No.2048/2018
M/s Sri.Thirumurugan Engineering
No.2/4, Annisathyanagar,
Mookandapally Post,
Hosur-635126
Krishnagiri District,
Tamil Nadu.
3. MR.PANEER SELVAM,
MANAGER,
M/s Sri.Thirumurugan
Engineering
No.1/323-D, M.G.R Nagar
(North)
Bharathiar Street,
Mookandpalli Hosur-635126
Krishnagiri District(TN)
4. Mr.Paneer Selvam,
Manager,
M/s Sri Thirumurugan Engineering
No.2/4, Annaisathyanagar,
Mookandapally Post,
Hosur-635126
Krishnagiri District.
Tamil Nadu.
(Reptd by Sri. T.G.B.,Adv.,)
Offence : U/s.138 of Negotiable
Instruments Act.
Plea of the accused : Pleaded not guilty
Final Order : Convicted
Judgment Date : 17.09.2024
*****
JUDGMENT
The complainant company has filed complaint U/Sec.200 of Code of Criminal Procedure against the 3 CC No.2048/2018 Accused for the offence punishable U/Sec.138 of Negotiable Instrument Act.
2. The facts of the case in brief are as follows:-
It is the case of the Complainant Company that it is a private limited company incorporated under companies Act and carrying on its business in hot and cold rolled steel sheets, plates, pipes, tubes etc.., Further accused approached complainant to supply the above materials for manufacturing of automobiles components and fabrication work. Accordingly, complainant supplied the materials to accused company and accused as agreed to repay the said outstanding amount immediately after receiving goods and also agreed to pay the 24% interest if he failed to pay the amount within 30 days from the date of bills. The complainant regularly supplied materials to accused company and as per the complainant statement as on 31.08.2017 accused is liable to pay to complainant an amount of Rs.2,07,031/- including interest at the rate of 24% per annum and accused has also accepted the account confirmation of complainant. Further towards discharge of liability due and payable the accused issued 4 CC No.2048/2018 Cheque bearing No.136422 dated:17.08.2017 for Rs.1,13,326/- drawn on Corporation Bank, Hosur Branch, Bangalore. Out of the due amount accused had issued second cheque bearing No.136416 on 04.09.2017 for Rs.93,705/- drawn on the above said bank and assured that the same would be honored on its presentation.
3. It is stated that, the complainant presented the said cheque for encashment through its banker HDFC Bank Ltd., 103, K.H.Road Branch, Bangalore-560027 and the same got dishonored and returned with memo dated: 05.09.2017 stating "FUNDS INSUFFICIENT". Thereafter, the complainant got issued legal notice dated: 18.09.2017 to the accused through RPAD calling upon him to repay the amount covered under the aforesaid cheque within 15 days from the date of receipt of notice . But, the accused has neither replied to the notice nor paid the amount covered under the said cheque. Hence, this complaint.
4. Swron statement of Director of complainant company recorded as PW-1 and got marked 30 5 CC No.2048/2018 documents as Ex.P.1 to 30 and ordered summons to the accused. The accused appeared through their advocate and they enlarged on bail. Subtance of accusation readover to the accused and they pleaded the case of the complainant as false. In view of the decision of the Hon'ble Apex Court of India, in the case Indian Bank Association & Ors V/s. Union of India & Ors, reported in (2014) 5 SCC 590, the sworn statement of the complainant is treated as chief examinaiton of the complainant. The accused has filed application u/s 145(2) of the Negotiable Instruments Act seeking permission for cross examination of the complainant and allowed the same. The counsel for the accused cross examined PW-1 in fully. Then the case was posted for recording the Statement of accused under Sec.313 of Cr.P.C. In the statement under section 313 of Cr.P.C, the accused has denied all the incriminating evidences appearing against him. The accused got examined himself as DW1 and no documents are got marked on his behalf. Then, the matter was posted for Arguments.
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CC No.2048/2018
5. Heard the arguments of the advocate for the complainant and the counsel for the accused No.1 to 4. Perused the records.
6. The following points arise for my consideration:
1. Whether the complainant proves that the cheques bearing No.136422 for a sum of Rs.1,13,326/- dated: 17.08.2027 drawn on Karnataka Gramin Bank, Hemavathinagar, Hassan issued by the accused has been dishonored on the ground of "FUNDS INSUFFICIENT" and the accused even after receiving the intimation regarding the dishonor of cheque failed to pay the cheque amount within the stipulated period and thereby accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
7. My findings on the above points are as under Point No.1: In the Affirmative Point No.2: As per final order, for the following:
REASONS
8. Point No.1 : In view of the present legal position as held by our Hon'ble High Court as well as Apex Court of India in a catena of decisions as well as relevant provisions of the Act, this court has to see whether the complainant has complied all the requirements as contained in Sec.138 of NI Act so as to bring home the guilt of the accused for the alleged offence. If so, whether 7 CC No.2048/2018 the accused is able to rebut the legal presumption available to the complainant under Sec.139 of the Act by adducing probable defense or not. However, it is held by the full bench of our Apex Court in the case of Rangappa Vs. Mohan reported in 2010 (1) DCR 706 that ;
"The Statutory presumption mandated by sec.139 of the Act, does indeed include the existence of a legally enforceable debt or liability. However, the presumption U/S 139 of the Act is in the nature of a rebuttable presumption and it is open for the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested".
9. Therefore, in view of the above decision once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant that, the alleged cheque was issued for the discharge of an existing legally enforceable debt or liability against the accused and the burden will shift on to the accused to rebut the same.
10. The learned counsel for the complainant has submitted the arguments contending that the accused has admitted the cheque and his signature thereon. Though he has lead defence evidence, he has failed to 8 CC No.2048/2018 rebut the presumption U/sec. 139 of the Negotiable Instruments Act in favour of the complainant. Hence, he is liable to be convicted. In support of his arguments he has relied upon the following citations:-
1. 2023(10)SCC 148, Rajesh Jain V/s Ajay Singh
2. 2022 SCC Online SC 1131, P Rasiya V/s Abdul Nazer
3. 2010 11(SCC) 441, Rangappa V/s Mohan Kumari
4. 2015 8 SCC 378, Vasanth Kumar V/s Vijay Kumari
11. On the other the counsel for the accused have argued that, the accused was neither due for the complainant nor issued any cheque towards payment of any such due. Though the accused admitted the transaction with the complainant firm, he has deposed that he has paid all the money due and only Rs.5,000/- was outstanding. The cheque was issued to the complainant as security and the same is misused by the complainant to file false complaint against the accused. The accused use to pay the dues regularly as and when the goods are delivered to him. As such, accused was not liable for any outstanding due of Rs.1,13,326/- as claimed by the complainant under Ex.P25. Therefore, prayed to acquit the accused.
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CC No.2048/2018
12. I have gone through the rulings relied by the complainant and I have taken note of the principles laid down in the aforesaid rulings and I have adopted the same while deciding the instant case. On considering the arguments addressed by the learned counsel for the complainant and Accused, before adverting to the oral evidence let in by the complainant and also without touching upon the defence set up by the Accused, it is required to examine whether the complainant has complied with the provisions of Section 138 of N.I Act to get cause of action to file this complaint. The complainant besides his oral testimony has relied on the documents at Ex.P.2 to 6 in support of his contentions. Ex.P.2 is the cheque alleged to have been issued by the accused, Ex.P.3 to 5 are the bank endorsements, Ex.P.6 is the bank challen. All these documents corroborate the version of the complainant in his complaint as well as affidavit in lieu of chief examination and more over these documents are not at all disputed by the accused except service of notice and issuance of the cheque, which would be discussed in detail later. Thus, complainant 10 CC No.2048/2018 with the help of Ex.P.1 to 6 has conveniently proved to have complied the provisions of Section 138 i.e. presentation of cheque within the statutory period for encashment, issue of legal notice within prescribed period to the Accused and filing of complaint within limitation period as per section 142 of the Act.
13. The second aspect of the case is whether the accused has successfully rebutted the presumption available in favour of the complainant with probable and convincing evidences? It is well settled principle of law that, once the cheque is admitted there will be a statutory presumption in favour of the holder or holder in due course U/Ss. 118 and 139 of the Act. However, as held by our Hon'ble Apex Court and the High Court in a catena of decisions, the presumptions under the said sections are in the nature of rebuttable presumptions and hence, the accused can very well rebut the said presumptions by leading reasonable and probable defence. Let us examine the same on the basis of the materials available on record.
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CC No.2048/2018
14. It is the case of the complainant that, the accused pruchased the materials from the complainant company and as per the statement of account as on 31.08.2017, accused was liable to pay Rs.2,07,031/- to the complainant company including interest at the rate of 24% per annum. In support of the case of the complainant the Director of the complainant company examined as PW-1 and got produced tax invoices as per Ex.P.26 to 30 and also confirmation of accounts as per Ex.P.24 & 25. In the course of cross examination of PW-1, it was suggested that there is no agreement of interest @ 24% if payment is not made within one month of purchase of goods which was admitted by PW-1. But PW-1 deposed that there is a condition on invoice. On perusal of Ex.P.24 i.e., confirmation of accounts shows that there is a condition of interst @ 24% per annum charged by complainant company if there is a delay in payment which was duly signed and sealed by the accused No.1 & 2. Though the accused takes such a contention during the cross of PW-1 that there is no agreement of levying interest between complainant and 12 CC No.2048/2018 accused. As already discussed herein above, the said confirmation of accounts was given to the accused and the same bears signature of the accused. If at all, there is no agreement as to any such interest, the accused could have refused to receive said confirmation of account or he could have replied to said confirmation of accounts denying to pay said interest amount. But, for the reasons best known to them, the accused have not done so. Therefore, this contention of the accused cannot be accepted.
15. Further on perusal of the said Invoices Ex.P26 to 30, it is evident that as per the said invoices the complainant company supplied materials to accused company. As such he was due for an amount of Rs.2,07,031/-. On the other hand, the accused has not denied said Invoices as well as purchase of any goods under said invoices. However, on perusal of said invoices there is seal of the accused company and also signature of accused No.1 & some person at the column meant for signature of customers. Though the accused denies said invoices, the said invoices are addressed to the Agency of 13 CC No.2048/2018 the accused i.e., M/s.Sri Thirumurgan Engineering. In course of examination of DW-1, he deposed that he has paid payment to one Kumar who is the supervisor of the complainant company. For the payment made by the accused, the said Kumar used to mention the amount in the book maintained by him. He has given the said notebook to accused No.1. But he has lost the said book. As the accused deposed that he has lost the book the court may not accept the same as it was not supported by any documentary evidence. Though the accused has contended that he has made payment with one Kumar to the tune of Rs.10,000/-, 15,000/- and 20,000/- regularly, what prevented to the accused to call the said Kumar to depose in his favour. But he has not done so. Further at the time of cross examinaiton of DW-1 admitted that he had transaction with the complainant company for 10 years and also received receipt for the payment made by him. The said receipts also misplaced by him. Further accused also admitted that his signature is on left side of Ex.P.25 & 26 which clearly goes to show that he had transaction with the complainant company 14 CC No.2048/2018 not with the said Kumar in individual capacity. Therefore, mere contention of accused that he has made repayment to the complainant cannot be believed.
16. Further, the defence taken by the accused is with regard to issuance of said cheque Ex.P1 is given as security. In this regard, in the course of chief examination of DW1, the accused contended that said cheque Ex.P1 was given to the complainant as security. But, except mere suggestion, nothing was elicited to substantiate that said cheque was issued as security. More so, he has neither adduced any evidence nor produced any materials to show that there has been the practice of taking such cheque as security in the complainant company. As held by our Hon'ble High court in the case of Siddappa Vs. Smt. Chand bee Hyderabad Reported in 2014 Cr.R 646 (kant), " mere suggestion will not take place of proof even by means of preponderance of probabalities and something more is required to rebut the presumption". the accused has not placed any credible evidence before the court to establish that the Ex.P1 cheque was issued towards security and notably, the accused has not even explained in his statement 15 CC No.2048/2018 recorded U/sec. 313 of Cr.P.C., as to how the subject cheque came in to possession of the complainant company.
17. Further during the examination in chief, the accused deposed that he has not received the notice. On perusal of Ex.P15 & 16 Notice has been returned as "unclaimed" & "No such company found now" and as the accused has not disputed the address mentioned at Ex.P15 & 16, the same will have to be construed as deemed service and as the complainant has sent notice to the correct address of the accused, this court will have to raise presumption as contemplated U/sec. 27 of the General Clauses Act that as the notice is sent to the correct address the same is a deemed service. The said proposition of law is laid down in the ruling decided between C.C. ALAVI HAJI V/s. PALAPETTY MUHAMMED AND ANOTHER (Crl.Appeal No. 767/2007) decided on 18/05/2007, wherein, the Hon'ble Apex court at Paragraph No.14 held that:
"Sec.27 of General Clauses Act gives raise to a presumption that service of notice has been effected 16 CC No.2048/2018 when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed have been effected at the time at which the letter would have been delivered in the ordinary course of business. This court has already held that when a notice is sent by registered post and is returned with a postal endorsement refused or not available in the house or house lock or shop closed or addressee not in station due service has to be presumed".
In the light of the principle laid down above, the accused has not placed any credible evidence before the court to establish that the addresses mentioned at Ex.P15 to Ex.P.21 does not belongs to them. As such this court is of the view that, the accused had knowledge about 17 CC No.2048/2018 Ex.P15 to 21 notices and that after having knowledge about the same, the accused has neither replied to the notice nor initiated any action against the complainant company to establish that the Ex.P2 cheque was not issued towards legally enforceable debt. On the other hand on perusal of Ex.P.22 the legal notice sent to the accused No.3 Panneer Selvam was duly served to the address of accused No.3 and also accused No.3 had signed on the acknowledgment. When notice was served on the Manager of the company it was deemed that the said notice must have brought to the knowledge of accused who being the proprietor of said concern.
18. It is worth to note that, as discussed, the accused has admitted the transaction from the complainant company and though he claims that he has repaid the entire amount only Rs.5,000/- was due to complainant company cheque was issued by accused to the complainant company towards security, to establish the same the accused has not placed cogent materials. That apart, the materials placed by the complainant company establishes that it had complied mandatory 18 CC No.2048/2018 requirements of Sec.138 of the Negotiable Instruments Act and the accused has failed to rebut the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act by placing acceptable evidence. Accordingly, I answer the Point No.1 in the Affirmative.
19. POINT NO.2 :- In view of my findings to the Points No.1, I proceed to pass the following:-
ORDER In exercise of power conferred U/sec. 255(2) of Code of Criminal Procedure, the accused No.1 to 4 are convicted for the offence punishable U/s.138 of N.I. Act and sentenced to pay fine of Rs.1,75,000/-.
In default of payment of the said fine amount, the accused No.1 & 2 shall undergo simple imprisonment for a period of Six months.
Out of the fine amount Rs.1,70,000/- shall be paid to the complainant as compensation as contemplated U/sec. 357(1)(b) of Code of Criminal Procedure and the remaining fine amount of Rs.5,000/- shall be paid to the state.
(Dictated to the stenographer directly on computer, corrected and then pronounced in open court by me on this the 17th day of September, 2024) Digitally signed MARUTHI by MARUTHI K K Date: 2024.09.19 15:41:01 +0530 (Maruthi.K) XXVII A.C.J.M., Bengaluru.19
CC No.2048/2018 ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : Sri.Mahendra Kumar Documents marked on behalf of the complainant Ex.P1 : Board Resolution Ex.P2 : Cheque Ex.P2(a) : Signature of accused Ex.P3 to 5 : Bank Endorsements Ex.P6 : Bank Challan Ex.P7 to 14 : Postal Receipts Ex.P15 to 21 : Returned RPAD Covers Ex.P15(a) to 21(a): Copies of notices contained Ex.P15 to 21 RPAD covers Ex.P22 : Postal Acknowledgment having service of notice to accused No.3 Ex.P23 : Copy of notice with acknowledgment having service of notice to accused No.1 Ex.P24 to 26 : Confirmation of accounts Ex.P27 to 30 : Invoices Witnesses examined on behalf of the accused:
-NIL-
Documents marked on behalf of the accused: Digitally signed
-NIL- by MARUTHI K
MARUTHI Date:
K 2024.09.19
15:41:05
+0530
XXVII A.C.J.M
Bengaluru.