Bangalore District Court
M/S. Aisiri Arecanut Traders vs M/S. Mylari Agro Products on 29 February, 2020
IN THE COURT OF XXI ADDL.CHIEF METROPOLITON
MAGISTRATE, BENGALURU CITY
Present: Sri. V. NAGARAJA, LL.B., LL.M.,
XXI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Dated this the 29th day of February, 2020
C.C. No.2636/2019
COMPLAINANT: M/s. AISIRI ARECANUT TRADERS
No.P-7B, APMC Yard,
Shimoga.
Represented by its Partner
Sri. H.S. Amith Kumar
S/o. Suryanarayana H.N.
Aged about 35 years.
(Reptd. By: PHS., Advocate)
V/s.
ACCUSED: 1. M/s. MYLARI AGRO PRODUCTS
LIMITED
No.38/9, 1st Floor, 2nd Cross,
Lorry Godown Layout,
RMC Yard, Near Fire Station,
Yeshwanthapura,
Bengaluru - 560 022.
Represented by its Managing Director
2. Sri. MAHESH
Aged about 42 years,
Managing Director/
Authorized Signatory,
M/s. Mylari Agro Products Limited,
No.38/9, 1st Floor, 2nd Cross,
Lorry Godown Layout,
RMC Yard, Near Fire Station,
Yeshwanthapura,
Bengaluru - 560 022.
2 C.C.No.2636/2019
3. Mr. BHARATHA VADDARALALLI
KUMAR
Aged about 40 years,
Managing Director,
M/s. Mylari Agro Products Limited,
No.38/9, 1st Floor, 2nd Cross,
Lorry Godown Layout,
RMC Yard, Near Fire Station,
Yeshwanthapura,
Bengaluru - 560 022.
(Reptd. By NP., Advocate)
:JUDGMENT:
Complainant has filed this complaint under Section 200 of Cr.P.C. r/w Section 138 of N.I. Act, seeking for penalizing the both accused for the offence punishable under Section 138 of N.I. Act and also for awarding compensation to him.
2. Case of the complainant in a nutshell is that:
Complainant is partnership firm, represented by its of the partners. The complainant firm has been running business of trading of areca nut. On the other hand, accused No.1 is private limited company, represented by its Managing Director accused No.2 and another Director accused No.3, who are in-charge and responsible for day to day affairs of the accused No.1 company. Accused are also running a business of purchasing areca nuts. It is 3 C.C.No.2636/2019 further averred that in the course of business of the complainant, on 28.09.2018, accused have ordered for areca nut/beetle nut of 7000 KGs @ Rs.367/- per unit, which totally worth of Rs.25,69,009/-. So, on considering purchase order placed by accused, the complainant supplied above said goods to accused through VRL Logistics by raising invoice No.049 dated 29.09.2018 and also raised bill for the price of the areca nut, which totally Rs.25,69,009/- and gave 30 days credit limits for payment towards delivery of said goods, whereas accused have duly received above said goods and executed necessary documents regarding delivery of goods and assured to make payment within 30 days. But, even after lapse of 30 days, the accused have not paid above said amount. So, complainant started to demand for the same. So, in order to discharge the above said liability, accused No.2 Mahesh Managing Director of accused No.1 company, on his behalf as well as on behalf of accused No.1, he issued him a cheque bearing No.428968 dated 17.11.2018 for Rs.25,69,009/- drawn on Federal Bank, Rajajinagara Branch, Bengaluru and assured to honour the above said cheque. So, believing the words of the accused, he presented the above said cheque through his banker i.e., 4 C.C.No.2636/2019 Canara Bank, Contentment Branch, M.G. Road, Bengaluru. But said cheque was dishonoured for the reason of "Funds Insufficient" in the account of accused.
So, the bank authorities issued endorsement dated 19.11.2018. So, he got issued legal notices dated
03.12.2018 through RPAD by demanding above cheque amount, whereas said notices have been duly served on all accused, but accused have failed to pay the cheque amount. Hence, accused have committed offence punishable U/s.138 of NI Act. Hence, he is constrained to file this complaint seeking for penalizing the accused for the offence punishable under Section 138 of N.I. Act., and also seeking for awarding of compensation to him.
3. In pursuance of summons issued by this court, accused No.2 and 3 on their behalf as well as on behalf of accused No.1, made appearance through their counsel and obtained bail and now they are on bail.
4. As these proceedings are summary in nature, substance of accusation read over and explained to accused No.2 and 3 in language known to them whereas, they pleaded not guilty and claimed for trial. 5 C.C.No.2636/2019
5. In order to prove the case of the complainant's firm, its partner H.S. Amit Kumar has been examined as PW-1 and got documents marked Ex.P-1 to Ex.P-13, whereas accused have not chosen to cross-examine PW-1 and they remained absconded. So, complainant has filed application seeking for dispensing the statement of accused U/s.313(1)(b) of Cr.P.C. So, on considering his application, in view of guidelines given by Hon'ble Apex Court in the judgment reported in (2014)5 SCC 590 (Indian Bank Association and others V/s. Union of India) and in the Larger Bench Judgment reported in (2011)2 SCC 772 (TGN Kumar V/s. State of Kerala and others) this court dispensed the statement of accused No.2 and 3 as per order dated 15.02.2020. Even accused have not chosen to adduce any defence evidence and address arguments.
6. Hence, I have heard learned counsel for complainant.
7. Perused the records.
8. After perusal of records, the points arise for my consideration are:
1) Whether complainant proves beyond all reasonable doubt that accused No.2 being Managing Director and accused No.3 being Director of accused No.1, in order to 6 C.C.No.2636/2019 discharge legally enforceable debt of accused No.1 company, they have issued a cheque bearing No.428968 dated 17.11.2018 for Rs.25,69,009/- drawn on Federal Bank, Rajajinagara Branch, Bengaluru?
2) Whether complainant further proves that he has complied with mandatory requirements as specified under Section 138 r/w 141 of N.I. Act?
3) What Order?
9. My findings on the above points are:
Point No.1 : In the Affirmative
Point No.2 : In the Affirmative
Point No.3 : As per final order,
for the following:
REASONS
10. Point No.1: As I have already stated, in order to prove the case of the complainant, he has been examined as PW-1 and he filed his examination-in-chief by way of affidavit by reiterating entire complaint averments as stated above. In support of his oral testimony, he relied upon Ex.P-1 to Ex.P-13.
11. On the other hand, accused have not chosen to cross-examine PW-1 and adduce any defence evidence.
12. Before appreciation of evidence of the complainant, I am of the opinion, it is worth to note presumptions envisaged in N.I. Act as well as ratio laid 7 C.C.No.2636/2019 down by the Hon'ble Apex Court in Three Judges Bench Judgment reported in (2010) 11 SCC 441 (Rangappa V/s. Sri Mohan) wherein it is held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent /complainant."
It is further held:
Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
13. So in the light of above presumptions and ratio decidendi laid down by Hon'ble Apex Court, if the present facts and situations are analyzed, it is obvious that 8 C.C.No.2636/2019 according to complainant, accused have issued cheque for discharging of their liability. As I have already pointed out accused have not chosen to cross-examine PW-1 and adduce any defence evidence. So, it can be construed that they are not disputing the fact that cheque is belonged to account of accused No.1 company and it bears signature of Managing Director/Authorized Signatory i.e., accused No.2. So, as I have already stated in view of ratio laid down by Hon'ble Apex court in the Judgments stated supra, that as soon as accused admits his signature on cheque, the mandatory presumption u/S 139 of N.I. Act comes to the aid of complainant and he can rest upon said presumption.
Now the crucial question arises as to whether accused are able to rebut the said presumption or not?
14. It is significant to note as I have already stated that accused have not chosen to cross-examine PW-1 and even they have not adduced any defence evidence. So, I come to clear conclusion that accused have utterly failed to rebut the mandatory presumption raised in favour of complainant. Hence, I hold this point in Affirmative. 9 C.C.No.2636/2019
15. Point No.2: As I have already discussed in point No.1 that accused have issued cheque for discharging of their recoverable debt. Whereas, on perusal of bank endorsement given by bank authority clearly reveals that complainant had presented the said cheque within validity period, but said cheque was dishonoured due to "Funds Insufficient" in the account of accused. On perusal of Ex.P-3 which is legal notice issued to all accused clearly reveal that the complainant got issued said demand notice to all accused through RPAD within specified time of 30 days from the date of receiving of endorsement from bank. On perusal of Ex.P-5 to Ex.P-7 which are postal acknowledgements, clearly reveals that the said notices have been duly served on all accused, but they have failed to pay the cheque amount.
16. So on considering the oral coupled with the documentary evidence of the complainant, they clearly proved that complainant has complied with mandatory requirements as specified U/s.138(a) and (b) of N.I. Act. It is significant to note, accused No.1 being private limited company, represented by its Managing Director accused No.2 and another Director accused No.3, who are in- 10 C.C.No.2636/2019 charge and liable for day to day affairs of accused No.1 company and who are also responsible for issuance of present cheque fall within the ambit of Section 141 of NI Act, whereas inspite of service of demand notice, they failed to pay the cheque amount within specified time. Hence, accused have committed offence punishable U/s.138 r/w 141 of NI Act.
17. Whereas learned counsel for complainant argued that as this transaction is commercial transaction with respect to sale of goods i.e., agricultural/commercial i.e., areca nuts held on 29.09.2018 and due to non-payment of cheque amount, the complainant sustained huge financial loss. Hence, he may be compensated by awarding interest on principal @ 18% per annum as specified U/s.117 of NI Act and also award litigation expenses and impose fine double of the cheque amount.
18. In support of his arguments, he placed reliance upon the judgments of Hon'ble Apex Court as well as High Court reported in:
1. 2015(9) SCC 622 3. Crl.R.P. No.825/2010
2. 2001 Crl.L.J. 950 4. 2002(5) KLJ 516 11 C.C.No.2636/2019
19. Having regard to the arguments of learned counsel for complainant and on considering the facts and circumstances of the case and in view of Section 117 of NI Act and principle laid down by Hon'ble Apex Court as well as Hon'ble High Court in the above said judgments, I am of the opinion, it is fit case to award interest 18% per annum on principal i.e., cheque amount from the date of cheque for one year which comes to Rs.4,62,420/- and also award litigation expenses approximately Rs.9,000/- and add, while imposing fine. Hence, I hold point No.2 in Affirmative.
20. Point No.3: For the foregoing reasons discussed on points No.1 and 2, I proceed to pass the following:-
ORDER Acting under Section 255(2) r/w 264 of Cr.P.C., the accused No.1 to 3 are hereby convicted for the offence punishable u/S.138 of Negotiable Instruments Act.
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
On considering the facts and circumstances of the case, accused No.2 Managing Director and accused No.3 being Director of accused No.1 company, are hereby sentenced to pay fine Rs.30,50,000/- (Thirty Lakh and Fifty Thousand only). In default accused No.2 12 C.C.No.2636/2019 and 3 shall undergo simple imprisonment for a period of 6 (Six) months each.
In view of Section 357 of Cr.P.C., complainant is entitled for compensation of Rs.30,40,000/- (Thirty Lakhs and Forty Thousand only) out of above said fine amount.
After collecting the above fine amount, office is directed to pay Rs.30,40,000/- (Thirty Lakhs and Forty Thousand only) to complainant as compensation and defray remaining fine amount of Rs.10,000/- (Ten Thousand only) to state, after appeal period is over.
However, accused No.2 and 3 shall execute personal bond of Rs.30,50,000/- in view of Sec.437(A) of Cr.P.C.
The office is hereby directed to supply the copy of this Judgment to the accused on free of cost.
(Directly dictated to Stenographer on computer, computerized by him, corrected and then pronounced by me in the open court on this the 29th day of February, 2020) (V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW-1 : Amith Kumar H.S. LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P-1 : Cheque
Ex.P-2 : Bank Endorsement
Ex.P-3 : Copy of Legal Notice
Ex.P-4 : Postal Receipts
Ex.P-5 to 7 : Postal Acknowledgements
Ex.P-8 : Copy of License Certificate
13 C.C.No.2636/2019
Ex.P-9 : C.C. of VAT Registration Certificate
Ex.P-10 : Copy of Deed of Partnership
Ex.P-11 : Copy of Tax Invoice
Ex.P-12 : Copy of Form No.35-A
Ex.P-13 : Letter
LIST OF WITNESSES EXAMINED FOR THE DEFENCE:
- Nil -
LIST OF DOCUMENTS MARKED FOR THE DEFENCE:
- Nil -
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.