Bangalore District Court
M/S Rallis India Ltd vs Mr.Sundar Kumar Gupta on 8 April, 2022
KABC020157212018
Before the Court of Addl.Chief Metropolitan
Magistrate at Bangalore
(SCCH-12)
Present: Shri. Mohamed Arifulla, B.Sc LL.B.,
.,
ACMM, Bangalore.
Dated this the 8th day of April, 2022.
C.C.No.3062/2018
Complainant M/s Rallis India Ltd,
Plot No.3, KIADB, 4th Phase,
Bommasandra, Bangalore99
Represented by its Authority
Letter holder
Sri.Probal Dutta
(Sri.jayaramaiah,
Advocate)
V/s.
Accused Mr.Sundar Kumar Gupta,
Keredari, Chattibariatu,
Hazaribagh, Jharkhand825321
(Sri. K.Shridhara,
Advocate)
1. Date of commencement of offence : 23.06.2018
2. Name of the complainant : M/s Rallis India Ltd
3. Date of recording of the evidence : 05.07.2018
SCCH-12 2 CC.3062/2018
4. Date of closing of evidence : 23.02.2022
5. Offence complained of : 138 of N.I. Act
6. Opinion of the Judge : Accused not found guilty
7. complainant represented by : Sri.Jayaramaiah
8. accused defence by : Sri.K.Shridhara
JUDGMENT
The complainant company has filed present private complaint case under Section 200 of Cr.P.C against the accused for the offence punishable U/s 138 of Negotiable Instruments Act.
2. The brief facts of the complaint are as under:
It is the case of the complainant that, both the complainant and M/s Dhaanya Seeds Limited were engaged in the business of production, distribution and marketing of hybrid seeds. M/s Dhaanya Seeds Limited is a company incorporated under the provisions of the companies act 1956. The said company was having a registered office at Plot No.3, KIADB 4th Phase, Bommasandra, Bengaluru-560099 and M/s Dhaanya Seeds Limited has merged and amalgamated with M/s.Metahelix Life Sciences Limited, Plot No.3, KIADB 4 th Phase, Bommasandra, Bengaluru-560099. The accused had placed orders with the complainant for supply of hybrid seeds. As per the statement of accounts maintained by them, the accused is due to them in a sum of Rs.5,05,870.44/-.SCCH-12 3 CC.3062/2018
3. In order to discharge the aforesaid liability, the accused had issued a cheque bearing No.000775 dated 19.04.2018 for Rs.5,05,870/-, drawn on Union Bank, Chaittibariatu Branch, Chaittibariatu-835221, in favour of complainant towards the repayment of the said due amount. The complainant presented the above said cheque through their banker for collection but, the said cheque was dishonored due to 'Funds insufficient" on 23.04.2018. The complainant approached the accused and orally informed the accused about the fact of dishonor of cheque. The complainant also got issued legal notice, dated 03.05.2018. Inspite of issuance of legal notice to the accused, he has not complied the demand made by the complainant regarding the payment.
4. After filing of the complaint, sworn statement of the complainant was recorded and after hearing the arguments and on considering the materials on record a criminal case was registered for the offence punishable under Section 138 of N.I. Act and summons has been issued to the accused for the said offence.
5. In pursuance of the process of the court, the accused appeared before this court through his counsel and got enlarged on bail. Thereafter, accusation was read over to the accused for the offence punishable under Section 138 of N.I.Act. The accused did not plead guilty and claimed to be tried.
SCCH-12 4 CC.3062/20186. The authorized person of complainant got examined himself as P.W.1 and got marked Ex.P.1 to 30, i.e., Ex.P.1 cheque, Ex.P.1(a) Signature of accused on Ex.P.1, Ex.P.2 Bank memo, Ex.P.3 Office copy of legal notice, Ex.P.4 Postal receipts, Ex.P.5 Copy of complaint given to the Postal Department dated:19.06.2018, Ex.P.6 Postal track consignment, Ex.P.7 Certified copy of judgment of Company petition No.193/13 and 194/13, Ex.P.8 Board Resolution, Ex.P.9 General Power of Attorney and Ex.P.10 Account statement. Ex.P.11 to 14 Invoices, Ex.P.15 to 19 Delivery Challans, Ex.P.20 to 23 LR Receipts, Ex.P.24 Account statement with Certificate and Ex.P.25 Account statement conformation, Ex.P.26 Certified copy of Amalgamation order of NCLT Bengaluru, Ex.P.27 Certified copy of Amalgamation order of NCLT Bombay, Ex.P.28 Certified copy of Scheme of Merger by Absorption, Ex.P.29 Authorization letter, Ex.P.30 Board Resolution. The statement of accused U/s 313 of Cr.PC recorded. He denied incriminating circumstances and submitted that he has defense evidence.
7. On the other hand the accused has got himself examined as DW-1 and marked Ex.D.1 to 11(a), Ex.D.1 Bank Statement, Ex.D.2 to 8 Invoice, Ex.D.2(a) to 8(a) English translation copy, Ex.D.9 Notice, Ex.D.9(a) English translation copy, Ex.D.10 Order of Panchayath, Ex.D.10(a) English translation copy, Ex.D.11 Copy of Complaint, Ex.D.11(a) English translation copy, Ex.D.12 to 18 Copies of the SCCH-12 5 CC.3062/2018 complaints, Ex.D12(a) to 18(a) English Translation copy., Ex.D.19 Reply notice and Ex.D.19(a) English translation copy got marked. Sufficient opportunities have been given to the accused to argue the matter but, he and his counsel remained absent and there is no bonafide reason to adjourn the case. Hence, it is taken as defense arguments heard and the case was posted for judgment.
8. Heard.
9. I have perused materials available on record.
10. The points that would arose for my consideration are as follows:-
1) Whether the complainant proves that, accused had issued bearing N0.000775 for Rs.5,05,870/- dated 19.04.2018 drawn on Union Bank, Chattibariatu Branch, Chattibariatu-
835221, in favour of complainant towards the repayment of due amount. inspite of issuance of legal notice dated 03.05.2018 the accused has not paid the cheque amount and thereby he committed an offence punishable under Section 138 of N.I.Act?
2) What order?
11. My answer to the above points are as follows:
[ Point No.1: In the Affirmative
Point No.2: As per final order
for the following:
SCCH-12 6 CC.3062/2018
REASONS
12. Point No.1: According to the complainant, the
complainant and M/s Dhaanya Seeds Limited engaged in the business of production, distribution and marketing of hybrid seeds and M/s Dhaanya Seeds Limited has merged and amalgamated with M/s.Metahelix Life Sciences Limited. The accused had placed orders with the complainant for the supply of hybrid seeds. As per the statement of accounts maintained by them, the accused is due to them in a sum of Rs.5,05,870.44/-.
13. The accused in order to discharge the aforesaid liability had issued a cheque bearing No.000775 dated 19.04.2018 for Rs.5,05,870/-, drawn on Union Bank, Chaittibariatu Branch, Chaittibariatu-835221, in favour of complainant towards the repayment of the said due amount. It is further stated that, the complainant presented the above said cheque through their banker for collection but, the said cheque were dishonored due to 'Funds insufficient" on 23.04.2018. The complainant got issued legal notice, dated 03.05.2018. Inspite of issuance of legal notice to the accused, he has not complied the demand made by the complainant regarding the payment.
14. In the examination in chief, the entire complaint averments have been reiterated. The oral evidence of P.W.1 goes to show that, the accused had placed orders for the supply of hybrid seeds from the complainant company. To SCCH-12 7 CC.3062/2018 repay the said due amount, the accused issued cheque in favour of complainant and same was dishonored with an endorsement 'Funds Insufficient" on 23.04.2018. Apart from that, the complainant relied upon Ex.P.1 to 10, i.e., Ex.P.1 cheque, Ex.P.1(a) Signature of accused on Ex.P.1, Ex.P.2 Bank memo, Ex.P.3 Office copy of legal notice, Ex.P.4 Postal receipts, Ex.P.5 Copy of complaint given to the Postal Department dated:19.06.2018, Ex.P.6 Postal track consignment, Ex.P.7 Certified copy of judgment of Company petition No.193/13 and 194/13, Ex.P.8 Board Resolution, Ex.P.9 General Power of Attorney and Ex.P.10 Account statement, Ex.P.11 to 25, i.e., Ex.P.11 to 14 Invoices, Ex.P.15 to 19 Delivery Challans, Ex.P.20 to 23 LR Receipts, Ex.P.24 Account statement with Certificate and Ex.P.25 Account statement conformation and Ex.P.26 Certified copy of Amalgamation order of NCLT Bengaluru, Ex.P.27 Certified copy of Amalgamation order of NCLT Bombay, Ex.P.28 Certified copy of Scheme of Merger by Absorption, Ex.P.29 Authorization letter, Ex.P.30 Board Resolution.
15. It is the specific case of the complainant that, accused had placed order for the supply of hybrid seeds from the complainant company and he had issued Ex.P.1 cheque in favour of complainant. I have perused oral and documentary evidence submitted by the complainant and also the Ex.P.1 Cheque. On careful consideration of oral evidence of P.W.1 and the signature of accused on Ex.P.1 cheque it can be said that, the said Ex.P.1 cheque is relating to the account SCCH-12 8 CC.3062/2018 maintained by the accused. In the examination-in-chief the P.W.1 identified the signature appearing on Ex.P.1(a) cheque is belong to him. On the other hand, the accused got examined himself as DW-1 and produced Ex.D.1 to 19 documents. However, the accused has admitted that the Ex.P.1 cheque is belonging to him and also admitted his signature on the cheque. Though the accused denied the transaction between him and complainant company but he has admitted in the cross examination that the seal bearing in the Ex.P.25 account statement belongs to his office. Though the accused has denied the signature on Ex.P.25, but he has admitted that it is the signature of his relative. He has also admitted that he received the Ex.P.3 notice and he has stated that he issued reply notice to the said notice and he has produce the same before the court as per Ex.P.19 and the translated copy is marked as Ex.P.19(a). In the reply notice he has admitted the transaction between him and the complainant company and also M/s.Dhaanya Seeds though he has denied that he was due to the complainant for a sum of Rs.5,05,870.44/-. This fact clearly discloses that there was a business transaction between the complainant, M/s.Dhaanya Seeds and accused.
16. The main defense taken by the accused is that the complainant has not supplied good quality seeds and due to this he suffered a loss. In this regard he has produced Ex.D.2 to Ex.D.18 documents. It is the say of the accused that the Panchayath has made complaint against him as per Ex.D.9 to 18 by alleging that he supplied shoddy paddy seeds to the SCCH-12 9 CC.3062/2018 farmers. Except these documents the accused has not filed any document to say that any case was registered against him to that effect. These are documents are looking to be self serving documents without any material. On the basis of these documents, it cannot be said that the complainant company supplied shoddy seeds to the accused.
17. The other defense taken by the accused is that he has not issued Ex.P.1 cheque for the discharge of liability but the complainant company collected the cheque as security. Once the accused admits the cheque, the burden casts on accused to disprove the case of the complainant and he is bound to prove that he had not issued the said cheque for the discharge of liability. But in the present case on hand, the accused has not at all placed any material before this court to come to the conclusion that the complainant collected the cheque for security. Though the learned counsel for the accused has cross examined the PW-1 at a length but he has not at all produced any material before the court in support of defense of the accused.
18. The complainant has produced Ex.P.11 to Ex.P.14 Tax invoices, Ex.P.15 to Ex.P.19 Delivery Challans, Ex.P.20 to Ex.P.23 Transport receipts, these documents disclose that the complainant supplied the material to the accused as stated in the complaint. The Ex.P.24 and 25 documents show that the accused was due to the complainant in a sum of Rs.5,05,870/- as on the date of issuance of cheque. Though in some SCCH-12 10 CC.3062/2018 documents such as Ex.P.11 to 18 and 20 there was no signature and seal of the accused but it doesn't mean that there was no transaction between the accused and complainant company. The complainant has produced relevant document to prove that there was a transaction between complainant, M/s.Dhaanya seeds and accused and moreover, accused himself has admitted that there were several transaction between complainant, M/s.Dhaanya seeds and accused and such been the case, the accused cannot deny the said transactions.
19. As already discussed, the accused has taken a defence that, the complainant collected Ex.P.1 cheque as security. Even though, the cheque collected by the complainant as security could be presented and there is no bar to prosecute the case against the accused and in such cases also the provision of section 138 of N.I.Act attracts. The Hon'ble Supreme Court has made a proposition of law in the judgment reported in (2016)10 SCC 458 between Sampelly Satyanaraya Rao V/s Indian Renewable Energy Development Agency Limited, wherein, it is held that;
(A) Debt, Financial and Monetary Laws Negotiable Instruments Act, 1881-
S. 138-Post dated cheque described as 'security' towards repayment of installment of already disbursed loan amount- Dishonour of Proceedings under S.138, held, maintainable in case of dishonour of such cheque.
SCCH-12 11 CC.3062/2018-Held, crucial point is whether cheque represents discharge of existing enforceable debt or liability or whether it represent advance payment without there being any subsisting liability- Once loan amount was disbursed and as per agreement, installments had fallen due on date of issuance of cheque, dishonour of such cheque would fall under S. 138- Such issuance of cheque undoubtedly represents outstanding liability- Contract Act, 1872, S.128.
In the supra judgment, the Hon'ble Supreme Court has made a preposition of law that, if the accused issued a post dated cheque described as security towards payment of due and in such case also the complaint is maintainable under section 138 of N.I.Act against the accused. Even though it is considered that the cheque was given for security purpose as suggested by the learned counsel for the accused and in such case also, the provisions of section 138 o f N.I. act attracts.
20. As far as the presumption available under Section 138 of N.I.Act is considered, it can be drawn only after discharge of initial burden by the complainant by proving before the Court that complainant has complied all the necessary ingredients of Section 138 of N.I. Act before filing the complaint and the accused has issued cheque in favour of the complainant for discharge of his liability.
SCCH-12 12 CC.3062/201821. Further, on careful consideration of Ex.P.1 cheque it appears that, the said cheque has been issued in favour of complainant for a sum of Rs.5,05,870/-. The Ex.P.2 is a Bank Memo. This document clearly go to show that, Ex.P.1 cheque dishonored for the reason 'Funds Insufficient'. Regarding issuance of cheque in favour of complainant is not denied by the accused. At the same time, complainant is able to establish the fact that, Ex.P.1 cheque relating to the accused and same has been issued in favour of complainant towards discharge of legally enforceable debt.
22. The learned counsel for the accused has canvassed the judgment of Hon'ble Supreme Court reported in (2008) AIR (SCW) 738 between Krishna Janardhan Bhat V/s Dattatraya G.Hegde and also canvassed the judgment of Hon'ble Supreme Court reported in (2009) AIR (SCW) 1018 between Kumar Exports V/s Sharma Carpets. Wherein. It is held that the court need not insist in every case that the accused should disprove non existence of consideration and debt a leading direct evidence because existence of negative evidence is neither possible nor contemplated. However, the present case on hand, the accused has lead evidence in his defense and though he has lead his evidence but he has not disproved the case of the complainant. The accused has failed to rebut the presumption. As such he cannot take shelter of proposition of law laid down in the Supra Judgments of Hon'ble Supreme Court.
SCCH-12 13 CC.3062/201823. He has also canvassed the judgment of Hon'ble High Court of Karnataka reported in (2012) CriLJ 804 between H.R.Mudlappa V/s C.A.Chowrappa. He has also canvassed the judgment of our Honb'le High Court reported in the judgment (2012) 5 KantLJ 665 between Super Cassettes Industries Ltd, Bangalore V/s G.M.Hulbanni. The facts and circumstances in the above judgments and the facts and circumstances in the present case are entirely different. In the present case on hand, the complainant has proved that there was a legally enforeceble debt and the accused has failed to rebut the presumption.
24. The learned counsel has also canvassed the judgment of Hon'ble Andra Pradesh High Court between Satish and Company V/s S.R.Traders and others. In the above reported judgment, it is held that the complaint is not maintainable if a manager of a company having no proper authorization. However, in the present case on hand, the complainant has produced Ex.P.8 Board of Resolution, Ex.P.9 Power of attorney and Ex.P.30 Board Resolution and Ex.P.29 Authority letter. These documents discloses that the previous company and subsequent complainant company that is Rallis India Ltd has give authorization letter to the PW-1 to prosecute the case. There is no any material before the court to doubt these documents and therefore the proposition of law laid down in the above reported judgment is not helpful to the accused.
SCCH-12 14 CC.3062/201825. As already discussed, Ex.P.1 is relating to the account of the accused and the signature appearing on Ex.P.1(a) cheque is not denied by the accused. Ex.P.2 Bank memo goes to show that, the Ex.P.1 cheque has been presented for encashment. It means the said cheque has been presented within its validity period as well as within three months period. The Ex.P.2 goes to show that, the said cheque has been dishonored for above said reasons. The Ex.P.3 is the copy of Legal Notice. Ex.P.4 is a postal receipt. These document goes to show that, the legal notice was issued on 03.05.2018 and delivered to the accused on 08.05.2018. The legal notice has been issued within 30 days from the date of receipt of information regarding dishonor of the Ex.P.1 cheque. On careful consideration of these documents, it appears that, the complainant has fulfilled the requirements and complaint is also filed within limitation period.
26. As stated above, the complainant has established the fact that, the accused had issued cheque for the repayment of loan and same has been bounced for above said reason. The complainant also established all required ingredients to constitute an offence punishable under Section 138 of N.I.Act.
27. The complainant has got marked Ex.P.26 to 28 documents which are the amalgamation order of NCLT Bengaluru, Bombay and also scheme of merger by SCCH-12 15 CC.3062/2018 absorption. These documents discloses that the complainant Metahilx Company has been merged in Rallis India Ltd and in case of such merger the subsequent company steps upto the shoes of the previous company to prosecute the case. As such the present Rallis India Limited has got jurisdiction to prosecute the case against the accused.
28. By considering oral and documentary evidence and statutory presumption available under Section 118 and 139 of N.I. Act, I am of the opinion that, the complainant has proved the fact that the accused has committed an offence punishable under Section 138 of N.I. Act. At the same time the accused failed to rebut the statutory presumption which are available to the complainant and disprove the case of the complainant. Hence, I answer Point No.1 in the Affirmative.
29. Point No.2: Under Section 138 of N.I.Act, if a person is convicted of the offence shall be punished with imprisonment for the term which may extent to two years or fine and it may extent the twice of amount of cheque or both. In the instant case on hand, the cheque issued for a sum of Rs.5,05,870/-. Before punishing the accused for the alleged offence i.e., the offence punishable under Section 138 of N.I.Act, the object of this provision is also has to be considered and the object of bringing Section 138 of N.I.Act into the statute is to inculcate faith in the efficacy SCCH-12 16 CC.3062/2018 of banking operations and credibility in transacting business of negotiable instruments. It was to enhance the acceptability of cheque in settlement of liability by making the drawer liable for penalty in case of bouncing of cheque due to insufficient funds. Hence, keeping in view of the object of this provision and under the facts and circumstances of the instant case, I am of the view that, it is just and fair to grant 9% interest on the cheque amount which will meet the ends of justice. Therefore, the accused is required to be sentenced to pay a fine of Rs.6,85,000/-. Out of which Rs.6,82,000/- is awarded in favour of the complainant as compensation and the remaining fine amount of Rs.3,000/- shall be paid to the state. In default of payment of fine, it is ordered to undergo simple imprisonment for six months it would meet the ends of justice. Hence, I proceed to pass the following;
ORDER Acting U/s 255(2) of Cr.P.C. the accused is convicted for the offence punishable u/s 138 of N.I. Act.
Further, the accused shall pay fine an amount of Rs.6,85,000/-.
In default the accused shall undergo Simple Imprisonment for a period of six months.
Further, acting under section 357(3) of Cr.P.C Rs.6,82,000/- is awarded as compensation to the complainant out of the fine amount. The remaining fine SCCH-12 17 CC.3062/2018 amount of Rs.3,000/- to the state.
Office is to furnish the copy of judgment to the accused at free of cost immediately.
The Bail bond and surety bond executed by the accused stands cancelled.
Office to refund cash surety of Rs.5,000/- to the accused after taking proper identification.
(Dictated to the stenographer, transcript thereof, corrected by me and then pronounced in the open court this the 8th day of April, 2021) (Mohamed Arifulla C.F), XI Addl. Small Causes Judge and ACMM, Bangalore.
ANNEXURE List of the witnesses examined on behalf of complainant:
PW1 Probal Dutta
List of the documents exhibited on behalf of
complainant:
Ex.P.1 Cheque
Ex.P.1(a) Signature of accused on Ex.P.1
Ex.P.2 Bank memo
Ex.P.3 Office copy of legal notice
Ex.P.4 Postal receipt
Ex.P.5 Complaint given to the Postal department
dated:19.06.2018
Ex.P.6 Postal track consignment
Ex.P.7 Certified copy of Judgment in company
petition No.193/13 and 194/13
SCCH-12 18 CC.3062/2018
Ex.P.8 Board resolution
Ex.P.9 GPA
Ex.P.10 Account statement
Ex.P.11 to 14 Invoices (4 in no's)
Ex.P.15 to 19 Delivery Challans (5 in no's)
Ex.P.20 to 23 LR Receipts
Ex.P.24 Account Statement with Certificate
Ex.P.25 Account statement conformation
Ex.P.26 Certified copy of Amalgamation order of
NCLT Bengaluru
Ex.P.27 Certified copy of Amalgamation order of
NCLT Bombay
Ex.P.28 Certified copy of Scheme of Merger by
Absorption
Ex.P.29 Authorization Letter
Ex.P.30 Board resolution
List of the witnesses examined on behalf of accused:
DW-1 Sundar Kumar Gupta List of the documents marked on behalf of accused:
Ex.D.1 Bank Statement Ex.D.2 to 8 Invoices Ex.D.2(a) to 8(a) English translation copy Ex.D.9 Notice Ex.D.10 Order of Panchayath Ex.D.10(a) English translation copy Ex.D.11 Copy of Complaint Ex.D.11(a) English translation copy Ex.D.12 to 18 Copies of the complaints
Ex.D.12(A) to 18(A) English translation of complaints Ex.D.19 Reply notice Ex.D.19(A) English translation copy (Mohamed Arifulla C.F), XI Addl. Small Causes Judge and ACMM, Bangalore.