Karnataka High Court
M/S Wavetech Telecom Private Limited vs Unitel Media Private Limited on 22 February, 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22 N D DAY OF FEBRUARY, 2022
BEFORE
THE HON'BLE MR. JUSTICE SREENIVAS HARISH KUMAR
CRIMINAL PETITION NO.790/2021 C/W
CRIMINAL PETITION NO.798/2021,
CRIMINAL REVISION PETITION NO.594/2021 AND
CRIMINAL REVISION PETITION NO.896/2021
In Crl.P.No.790/2021
BETWEEN:
M/s. Wavetech Telecom Private Limited,
No.447, 1 s t A Main, 5 t h Cross,
Rajarajeswari Layout,
Gnana Bharathi, Nag ad evanahalli,
Beng aluru-560056
Represented by its Director
C.H.Srinivasa Raju.
Now at No.12,
Ground Floor, Sumukha Enclave,
Near KLE Law College,
Hirohalli, Visweswara Layout,
7 t h Block, Beng aluru-560091.
...Petitioner
(By Sri Rameshchandra, Advocate)
AND:
1. UNITEL MEDIA Private Limited
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064
Represented by its Director
Sri G.Suresh Bab u
:: 2 ::
2. Sri G.Suresh Bab u,
S/o Mahad evaiah,
Aged about 50 years,
Director,
UNITEL MEDIA Private Limited,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
3. Lakshmi Radhika
Wife of G.Suresh Bab u,
Aged about 45 years,
Director
UNITEL MEDIA Private Limited,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
...Respondents
(By Sri Dayanand a Patil S.M., Ad vocate for R1 to R3)
This Criminal Petition is filed under Section 482
of Cr.P.C. p raying to revise and modify the ord er
dated 21.04.2018 of the XLII A.C.M.M., Beng aluru in
C.C.No.8455/2017 and enhance the fine amount to
more than the double the cheq ue amount and direct
payment of double the amount of the cheque to the
petitioner herein out of fine amount imposed and to
revise the sentence and allow the petition.
In Crl.P.No.798/2021
BETWEEN:
M/s. Wavetech Telecom
Private Limited,
No.447, 1 s t A Main, 5 t h Cross,
Rajarajeswari Layout,
Gnana Bharathi, Nag ad evanahalli,
Beng aluru-560056
:: 3 ::
Represented by its Director
C.H.Srinivasa Raju.
Now at No.12,
Ground Floor, Sumukha Enclave,
Near KLE Law College,
Hirohalli, Visweswara Layout,
7 t h Block, Beng aluru-560091.
...Petitioner
(By Sri Rameshchandra, Advocate)
AND:
1. Universal Telecommunications
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064
Represented by its Prop rietor
Sri G.Suresh Bab u
2. Sri G.Suresh Bab u,
S/o Mahad evaiah,
Aged about 50 years,
Proprietor
Universal Telecommunications,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
3. Lakshmi Radhika
Wife of G.Suresh Bab u,
Aged about 45 years,
Proprietor, Universal Telecommunications,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
...Respondents
(By Sri Dayanand a Patil S.M., Ad vocate for R1 to R3)
:: 4 ::
This Criminal Petition is filed under Section 482
of Cr.P.C. praying to allow this p etition and revise and
modify the ord er dated 21.04.2018 of the XLII
A.C.M.M., Beng aluru in C.C.No.8458/2017 and
enhance the fine amount to more than the double the
cheque amount and direct payment of double the
amount of the cheque to the petitioner herein out of
fine amount imposed and to revise the sentence.
In Crl.RP.No.594/2021
BETWEEN:
1. M/s. UNIVERSAL TELECOMMUNICATIONS,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064
Represented by its Prop rietor
Sri G.Suresh Bab u
2. Sri G.Suresh Bab u,
S/o Mahad evaiah,
Aged about 47 years,
Proprietor,
M/s. Universal Telecommunications,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
3. Smt. Lakshmi Radhika
Wife of G.Suresh Bab u,
Aged about 37 years,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
...Petitioners
(By Sri Dayanand a Patil S.M., Ad vocate)
:: 5 ::
AND:
M/s. Wavetech Telecom Private Limited,
No.447, 1 s t A Main, 5 t h Cross,
Rajarajeswari Layout,
Gnana Bharathi,
Nag adevanahalli,
Beng aluru-560056
Represented by its Director
C.H.Srinivasa Raju.
...Respondent
(By Sri Rameshchandra, Advocate)
This Criminal Revision Petition is filed under
Section 397 read with 401 of Cr.P.C., praying to set
aside the imp ugned order d ated 21.04.2018 p assed by
the XLII A.C.M.M., Nrup athung a Road, Beng aluru in
C.C.No.8458/2017 at Annexure-A and other order
dated 21.10.2020 passed by the LXVIII Additional City
Civil and Sessions Judge, Beng aluru in
Crl.A.No.904/2018 marked at Annexure-B of this
petition and acq uit the p etitioners/accused from the
said false charg es under p rovisions of N.I.Act.
In Crl.RP.No.896/2021
BETWEEN:
1. M/s. UNITEL MEDIA Private Limited ,
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064
Represented by its Director
Sri G.Suresh Bab u
2. Sri G.Suresh Bab u,
S/o Mahad evaiah,
Aged about 47 years,
Director,
Unitel Med ia Private Limited
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
:: 6 ::
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
3. Smt. Lakshmi Radhika
Wife of G.Suresh Bab u,
Aged about 37 years,
Director,
Unitel Med ia Private Limited
No.32, Next to S-HIG B-6,
4 t h Cross, 3 r d Main Road ,
KHB 5 t h Phase, Yelahanka New Town,
Beng aluru-560064.
...Petitioners
(By Sri Dayanand a Patil S.M., Ad vocate)
AND:
M/s. Wavetech Telecom Private Limited,
No.447, 1 s t A Main, 5 t h Cross,
Rajarajeswari Layout,
Gnana Bharathi, Nag ad evanahalli,
Beng aluru-560056
Represented by its Director
C.H.Srinivasa Raju.
...Respondent
(By Sri Rameshchandra, Advocate)
This Criminal Revision Petition is filed under
Section 397 read with 401 of Cr.P.C., praying to set
aside the imp ugned order p assed by both trial court in
C.C.No.8455/2017 on 21.04.2018 on the file of the
XLII ACMM., Nrup athung a Road, Beng aluru City at
Annexure-A and other d ated 21.10.2020 p assed in
Crl.A.No.903/2018 by the LXVIII Additional City Civil
and Sessions Judge, at Beng aluru City marked at
Annexure-B of this petition.
These Petitions having been heard and reserved
on 28.01.2022, coming on for pronouncement this
day, the court p ronounced the following:
:: 7 ::
ORDER
The judgments of conviction in two proceedings namely C.C.8455/2017 and 8458/2017 on the file of XLII ACMM, Bengaluru, gave rise to two Criminal Appeals No. 903/2018 and 904/2018 and two Criminal Revision Petitions No.356/2018 and 357/2018 being filed before the Additional City Civil and Sessions Judge, Bengaluru. The orders dated 21.10.2020 in the Criminal Revision Petitions have led to Criminal Petitions 790/2021 and 798/2021, the judgments dated 21.10.2020 in the Criminal Appeals have given rise to Criminal Revision Petitions 594/2021 and 896/2021 being filed before this court. The factual background in both the criminal cases briefly stated is as follows:
2. For the sake of convenience, the parties will be referred with respect to their names while narrating the facts.
:: 8 ::
3. In C.C.8455/2017 the complainant is M/s Wavetech Telecom Private Limited (for short 'Wavetech'), and the first respondent is a private limited company namely Unitel Media Private Limited (for short 'Unitel') and accused 2 and 3 namely Sri G.Suresh Babu and Smt. Lakshmi Radhika are its directors. It is the case of Wavetech that Sri G.Suresh Babu and Smt. Lakshmi Radhika being the directors of Unitel used to place orders with it for purchasing telecom and IBS components and that it used to supply the components to Unitel. In connection with these transactions, Unitel was found due in a sum of Rs.9,60,235/-. In order to discharge this liability, Unitel issued a cheque dated 14.8.2014 bearing 126189 drawn on HDFC Bank for a sum of Rs.8,04,497/-. When Wavetech presented this cheque for encashment, it was returned as Unitel had given 'stop payment' instructions to the bank.
Then Wavetech issued a demand notice on :: 9 ::
27.8.2014. The same was served on Unitel and its Directors. Payment was not made and therefore, Wavetech initiated criminal action under section 138 of the Negotiable Instruments Act (for short 'the Act').
4. Likewise, Wavetech initiated another action under section 138 of the Act against a proprietorship concern, namely Universal Telecommunications (for short 'Universal). Sri G.Suresh Babu and Lakshmi Radhika are its proprietors. The transaction is that the proprietors were found due in a sum of Rs.10,27,105/- for the purchases made by them from Wavetech from 11.1.2013 onwards under different bills. For discharging this liability, totally three cheques were issued by Universal. Two cheques were dated 10.8.2014 and drawn for sum of Rs.1,00,000/- and other for Rs.22,475/-. The third cheque was dated 14.8.2014 for Rs.
:: 10 ::
Rs.6,75,769/- These cheques were also not honoured as payments had been stopped by the drawers. Therefore on 27.8.2014 Wavetech issued demand notice and initiated action under section 138 as the drawers of the cheque did not comply with the demand.
5. After trial of these two cases, the learned ACMM found the first accused Unitel in C.C.8455/2017 guilty of the offence under section 138 of the Act and sentenced all the three accused to fine of Rs.11,09,000/- with a default sentence of four months simple imprisonment to be undergone by its directors. In C.C.8458/2017, the first accused Universal was found guilty and its proprietors were sentenced to fine of Rs.11,09,000/- with default sentence of four months simple imprisonment.
6. Aggrieved by the judgment of conviction, the accused preferred two appeals to the Sessions :: 11 ::
court. The complainant also filed revision petitions to the Sessions court questioning inadequacy of sentence imposed by the ACMM. The Sessions Court dismissed the Criminal Appeals and the Criminal Revision Petitions and hence the parties are before this court now.
7. The trial court has recorded findings that the accused do not dispute the cheques in question and the signatures on them, and in view of this, presumption under section 118 and section 139 of N.I.Act could be drawn. The complainant also issued legal notice to the accused and it was served on the accused. The accused do not dispute this and that they did not issue reply.
Moreover the accused do not dispute the case of the complainant that the latter supplied telecom and IBS components and this was the transaction in respect of which they were due to pay a certain sum of money to the complainant. Further it is :: 12 ::
held by the trial court that there is no consistency in the defence put forward by the accused, in this regard what is observed is that the accused issued stop payment instructions to the bank giving reason that there was dispute in regard to the bills issued by the complainant, but whereas in the application filed by accused No.3 for discharge, it was stated that the complainant collected the cheque by way of security. If really the accused had issued the cheques for security purpose, the same reason could have been given in the stop payment instructions. In another stop payment instruction, it is stated that the cheques were lost, but the accused did not go to police station to lodge complaint with regard to the lost cheques. Therefore in view of these inconsistencies, defence versions cannot be believed.
8. So far as the settlement is concerned, it is held by the trial court that while cross-examining :: 13 ::
PW.1, she was not questioned about the settlement at all or at least a suggestion was also not given. If really there had taken place a settlement, soon after the accused received the demand notice, nothing prevented the accused from coming out with the fact of settlement having taken place so as to say that there was probability in her defence version. In view of this, the accused have utterly failed to rebut the evidence of the complainant and hence, the accused can be held guilty of the offence under section 138 of N.I.Act.
9. It is not necessary to refer to the judgment of the appellate court in detail as it has just confirmed the findings of the trial court.
10. Assailing the judgments of the trial court and the appellate court, Sri. Dayananda Patil, learned counsel for the petitioners / accused argued that both the courts below have utterly :: 14 ::
failed to understand the actual contentions of the parties. No doubt the accused do not dispute to have purchased certain items from the complainant, but the burden was on the complainant to prove that there existed legally enforceable debt for prosecuting the accused. The trial court has failed to notice that the accused relied upon a document as per Ex.D.7 to prove that there had taken place a settlement between them and the complainant according to which the accused were to pay a sum of Rs.13,22,475/- and out of this sum, the accused made payment of Rs.8,00,000/- as evidenced by Ex.D.3 to D.5 and that the balance of Rs.5,00,000/- was paid by way of cash. The judgment of the trial court very well discloses that it has just considered the evidence given by the complainant and totally ignored the defence evidence. He argued that non consideration of the evidence given by the accused has seriously resulted in the accused being :: 15 ::
convicted even though they were not due to pay any amount to the complainant. Merely for the reason that the accused did not reply to the legal notice issued by the accused, that itself cannot be a ground for totally disbelieving the defence version. When the accused are entitled to lead evidence, and accordingly the second accused entered the witness box, his evidence should have been given due weightage. The invoices produced by the complainant should not have been relied upon by the trial court to come to conclusion that the accused issued the cheques under question to clear the liability in connection with purchase of goods as depicted in the invoices. In the VAT 100 forms, there was no reference to invoice numbers and in this view the entire transaction between the complainant and the accused was doubtful. Thus seen, there did not exist a legally enforceable debt for prosecuting the accused under section 138 of N.I.Act. Instead of returning the cheques after :: 16 ::
the accused cleared the entire outstanding amount as per the settlement, the complainant misused the cheques which were issued by way of security. The trial court has wrongly held that the accused have taken inconsistent defences. In this regard it was his argument that, the accused can take any defence, but unless the initial burden of proving the existence of legally enforceable debt is discharged by a complainant, presumption cannot be drawn. The trial court has wrongly drawn the presumption without appreciating the defence evidence. Therefore there is perversity in appreciation of evidence. The appellate court has also mechanically confirmed the judgment of the trial court. For this reason revision petitions deserve to be allowed.
11. Sri. Ramesh Chandra for the complainant/ respondent submitted that the accused do not dispute the actual transaction of purchasing :: 17 ::
components from the complainant and that the invoices produced by the complainant prove the transaction between the parties. The entire transaction depicted in the invoices cannot be disbelieved merely for the reason that in some of the VAT 100 forms, the invoice numbers are not mentioned. The accused cannot question the VAT 100 forms when they admit the purchases made from the complainant.
12. It is further argued by Sri. Ramesh Chandra that the accused do not dispute the signature on the cheques. Therefore the burden is on them to rebut the complainant's case. They refer to a settlement as per Ex.D.7. It was argued that the accused cannot refer to a settlement deed because the trial court actually did not mark any settlement deed. The accused are relying upon the documents which were not marked in the trial :: 18 ::
court. Rightly the trial court has disbelieved the existence of any settlement.
13. It was his further submission that one Mr. Gupta was the common auditor for the complainant and the accused. It is the case of accused that settlement was finalized in the presence of Gupta, in that view the accused should have examined Mr. Gupta. Moreover while cross-
examining the complainant i.e., PW.1, he was not at all questioned about the agreement. For the first time while leading defence evidence, the theory of settlement was introduced, and that the trial court did not think of considering it as it should have been disclosed at the earliest point of time i.e., by issuing a reply to the demand notice. In this view both the courts below have come to right conclusion to convict the accused and that there are no grounds to allow the revision petitions.
:: 19 ::
14. In regard to two criminal petitions filed by the complainant under section 482 Cr.P.C., it was the argument of Sri. Ramesh Chandra that the trial court and the appellate court have failed to sentence the accused adequately in accordance with the sentencing structure found in section 138 of N.I.Act. The accused should have been subjected to fine equal to double the cheque amount. The transaction was commercial. The complainant has suffered a great loss on account of dishonour of cheque and initiating criminal action against the accused. The complainant has to be suitably compensated. The appellate court failed to notice the error committed by the trial court. In this view criminal petitions have to be allowed and the sentence enhanced.
15. Sri. Dayananda Patil replied that the criminal petitions filed by the complainant have to be dismissed. The sentencing structure provided :: 20 ::
in section 138 of N.I.Act does not mandate that in all the cases fine equal to double the cheque amount should be levied. It lies within the discretion of the court. When the complainant has already received the entire balance due from the accused, he cannot insist on enhancing the sentence. Therefore these petitions under section 482 Cr.P.C. are to be dismissed.
16. I have examined the points that the learned counsel for the parties raised while arguing. The tenor of argument of Sri. Dayananda Patil shows that the trial court has utterly failed to appreciate the evidence, especially the defence evidence and thus the interest of the accused have been affected. In the revision petition, there is no scope for re-appreciation of evidence, but when it is pointed out that the trial court as also the appellate court have committed serious errors leading to failure of justice, the revisional court :: 21 ::
should take cognizance of it. Now with this back ground, if the case is analyzed, it appears very well that the trial court has just proceeded on the premise of drawing presumption under section 139 of N.I.Act, as the petitioner being the accused did not reply to the demand notice and that the defence version is just an after thought. The judgment of appellate court just appears to be mechanical affirmation of trial court's findings without application of mind.
17. The transaction which gave rise to dispute between the parties is not disputed, but what is disputed is actual sum of money due by the accused to the complainant. It is in this connection that the accused speak about a settlement in the presence of one Gupta, who ought to have been examined, but was not examined. However the accused refer to Ex.D.7, an email correspondence which was marked subject to objection perhaps :: 22 ::
taken by counsel for the respondent / complainant. What was the objection taken, is not forthcoming and the trial court has not referred to it. Even while arguing in revision, Sri. Ramesh Chandra seriously objected to considering Ex.D.7. Therefore even if Ex.D.7 is ignored and if it is examined whether an agreement might have taken place between the parties, an inkling to it can be obtained from the manner in which DW.1 is cross- examined. Yes, at one stage DW.1 has answered in cross-examination that there had not taken place any settlement as stated by him in the examination-in-chief. But when DW.1 gave further evidence on 31.10.2017, an answer was elicited from him in the cross-examination that he was due to pay Rs.13,00,000/- to the respondent- complainant as per settlement.
18. There are two more documents which the trial court as also the appellate court have :: 23 ::
completely ignored and upon which there is no cross-examination at all. They are bank statements of the accused, marked Ex.D.3 to D.5 which disclose payment of totally a sum of Rs.8,00,000/- to the respondent/complainant on different dates. To put it more specifically, there are entries showing two cheque payment of Rs.1,00,000/- each on 17.5.2014 to Wavetech, again Rs.1,00,000/- each on 31.5.2014 and 7.6.2014, and Rs.4,00,000/- on 1.7.2014 to Wavetech Telecom Pvt. Ltd., i.e., 1 s t complainant company. Ex.D.6 is another defence document which is not disputed as there was no objection at the time of marking it and that there is no cross-
examination on it. Ex.D.6 is an email correspondence with attachment generated on 13.5.2014 and it clearly indicates that the actual sum due by Suresh Babu i.e., accused No.2 to Srinivasa Raju, (who represents complainant company) was Rs.13,22,475/-. Now if Exs.D.2 to :: 24 ::
D.6 are considered in juxtaposition to the dates that the cheques in question bear, certain inferences as to existence of probability in the defence version may be drawn. Of the three dishonoured cheques marked as Ex.P.2 to P.4 in C.C.No.8458/2017, two cheques bear the date 10.8.2014 and one cheque bears the date
14.8.2014. The cheque marked as Ex.P.2 in C.C.No.8455/2017 also bears the date 14.8.2014. The total sum of all the four cheques is Rs.16,02,741/-, whereas total sum agreed to be paid by the accused was Rs.13,22,475/-. Exs. D.3 to D.5 evidence payment of Rs.8,00,000/-. The accused contend to have made payment of balance of Rs.5,00,000/- by cash, and of course as admitted by DW1 there is no documentary proof for cash payment. Even if cash payment of Rs.5,00,000/- is not possible to be believed, the respondent was to be paid only Rs.5,22,475/-. Looked in this view, the defence stand about the :: 25 ::
settlement is probable to be accepted. Therefore though Ex.D7 can be ignored, and even though Mr. Gupta was not examined for proving the settlement, the circumstances indicate possibility of settlement.
19. It is true that the accused did not reply to the demand notices and that while cross examining PW1, questions pertaining to settlement were not put. If reply had been given to the demand notice and PW1 had been questioned in the cross-
examination effectively, they would have strengthened the defence, but nevertheless, when DW1 entered the witness box and introduced specific defences, and if he was not questioned at all on some documents which have the effect of destabilizing the respondent/complainant's case, it may be stated that his evidence is suitably rebutted. The defence evidence should also receive equal weightage while appreciating :: 26 ::
evidence. Mere failure to reply to the demand notice cannot always be viewed negatively against the accused; facts and circumstances of every case must be considered to arrive at conclusions.
20. It is true that as has been observed by the trial court, there is inconsistency in the other defences put forward by DW1 and I do not think it necessary to delve on those aspects in detail as the findings cannot be disturbed, but not withstanding those inconsistencies, from the discussion made above as to actual sum due by the accused, a clear inference may be drawn that it was doubtful that DW1 would have issued the cheques for clearing the amount outstanding in connection with purchases depicted in the invoices produced by the respondent/complainant.
Possibility of misusing the cheques signed by DW1 in the given set of circumstances cannot be ruled out. Therefore the findings of the trial court and :: 27 ::
the appellate court just appear to be perfunctory, there is no serious appreciation of evidence, all that is forth coming is just one sided evaluation of evidence.
21. There is another legal infirmity. In C.C.No.8455/2017, the first accused is a company.
The third accused i.e., petitioner No.3 is shown as a Director, but in the complaint, there is no averment that she was also responsible for the day-to-day business of the company, and that she is not a signatory to cheque. Likewise, in C.C.No.8458/2017, 1 s t accused is a proprietary concern, and accused No.3 is also shown as a proprietor. The cheque in question in this case has not been signed by her. It is doubtful that there can be more than one proprietor to a business concern. Her role in the business of the firm is not specifically stated. In this view, she :: 28 ::
could not have been prosecuted at all. Both the courts below have lost sight of this aspect.
22. Therefore from the above discussion I find that both the revision petitions deserve to be allowed and the judgments of the court below, set aside to record acquittal of the accused.
Accordingly ordered, and the petitioners are acquitted of the offence under Section 138 of N.I. Act.
23. In view of the criminal revision petitions being allowed, the criminal petitions No.790/2021 and 798/2021 are dismissed as they do not survive for consideration.
Sd/-
JUDGE ckl/sd