Bangalore District Court
M/S Mahaveer Electro Mech vs M/S Banavathy And Co on 30 March, 2016
BEFORE THE LXVI ADDL.CITY CIVIL & SESSIONS
JUDGE, BANGALORE CITY.
(CCH-67)
DATED THIS THE 30th DAY OF April 2016.
PRESENT
SRI.VIJAYAN.A., B.A.(LAW), LL.M.
LXVI Addl.City Civil & Sessions Judge
Crl.A.No.968/2014
APPELLANT 1. M/s Mahaveer Electro Mech
Pvt.Ltd.
Company incorporated
under the Companies Act 1956
Having its present office at
No.1592, I Floor, I A Cross,
3rd A Main Road,
Chandralayout,
Bangalore.560 040.
Rep.by its Managing Director,
Sharath Kumar.K.H.
S/o K.N.Halappa,
Aged about 48 years.
2. Rajendra Prasad,
S/o K.N.Halappa,
Aged about 45 years,
R/at No.1592, I Floor,
I A Cross, 3rd A Main Road,
I Stage, 2nd Phase,
Chandralayout,
Bangalore.40.
(Rept. By Sri.Dinesh Gaonkar, Adv.)
VS.
2 Crl.A.No.968/2014
RESPONDENT 1. M/s Banavathy and Co.
Rep by its Proprietor
V.N.Kalyanasundaram,
S/o V.Narayana Rao,
Aged about 63 years,
R/o B-238, 6th Cross,
I Stage, Peenya Industrial
Estate, Bangalore.58.
(Rept. By Sri.SV, Adv.)
2. Sharath Prasad,
No.606, 4th B Cross,
8th Main, RPC Layout,
Vijayanagar, Bangalore.40.
(Rept. By Sri.W, Adv.)
JUDGMENT
Appellant has preferred this appeal under Sec.374(3)(a) of Cr.P.C. being aggrieved by order of conviction passed in CC.No.25343/2010 dated:6.8.2014 by the learned 20th ACMM, Bengaluru.
2. Brief facts of the appellant's case are that:-
The respondent No.1 being proprietor of reputed firm dealing in manufacture of electrical requirements and is an approved vendor to various government undertakings and 3 Crl.A.No.968/2014 also private companies and had supplied appellant NO.1 firm station battery chargers, LTAC Panels and DEDB's as per KPTCL specifications for the projects at Haradanahalli and Bheriya substations under purchaser orders dated:
9.1.2007 as per invoice NO.039 dated: 3.8.2009 for a sum of Rs.5,68,194/-. The appellant had issued two cheques No.550385 dated: 25.8.2009 for Rs.3,88,017/- and 550387 dated: 10.8.2009 for Rs.79,151/- drawn on SBI, Rajajinagar Industrial Estate. When the said cheques were presented for realization the cheques returned with an endorsement ' Not arranged for'. Inspite of issuance of legal notice appellants have not paid the cheque amount.
Hence, complaint.
3. The learned magistrate was pleased to take cognizance and sworn statement of complainant was recorded and issued summons to the accused. Thereafter, the complainant has examined as P.W.1 and got marked Ex.P.1 to P.15 and closed his side of evidence. The 4 Crl.A.No.968/2014 statement of accused under Sec. 313 of Cr.P.C. was recorded and accused denied all incriminating evidence against them and accused No.2 examined as DW.1 and got marked documents as per Ex.D1 to D18. The trial court after hearing the arguments on both sides passed the impugned judgment dated 6.8.2014 convicting the accused/appellant for the offence punishable under Sec.138 of N.I. Act and sentenced to pay a fine of Rs.7,10,000/- and in default he shall undergo S.I. for a period of one year.
4. Aggrieved by order of conviction the appellants herein have approached this court for the following among other grounds:-
i. The accused No.1 is a private limited incorporated company and not a firm. The respondent No.3 is not a Director of the accused company. The Director of accused No.1 Sharath Kumar.K.H. S/o K.N.Halappa who is the signatory of the cheques is not a party before the court below and as such the complaint is not maintainable. The judgment being against wrong person is liable to be set 5 Crl.A.No.968/2014 aside against respondent No.2 accused No.3. It is an enforceable and not binding on the Managing Director Sharath Kumar K.H. and hence, liable to be set aside.
ii. There is no legally enforceable debt to the extent of the cheque amounts as the respondent No.1 was liable to 10% penalty for delayed supply and non performance of the testing and commissioning the equipment supplied ;under the respective purchase orders. The penalty deduction would be made by the main clients of the appellant No.1 against their respective bills on being submitted.
iii. The Trial court has failed to note that there is no such person as Sharath Prasad accused No.3 who is Director of the accused No.1. company. As such complaint against accused No.3 is not maintainable.
iv. No demand notice was issued to Director Mr.Sharath Kumar K.H. and he was not arrayed as party to the complaint. Hence, sentence would not have been passed against the Sharath Kumar K.H. v. The Trial court has failed to look in to the documentary evidence available on record as to the terms of supply, penalty available in the purchase orders produced by the complainant and the accuse and has given perverse findings that, no evidence has been placed by the accused regarding the defence.6 Crl.A.No.968/2014
vi. The Trial court has failed to note the terms and conditions of the purchase orders produced by the complainant and accused. The delivery challans produced by the accused are also not looked in to. There has been delay in delivery of the goods. The delay is clear from the admission of PW1 on comparison of the purchase orders with the delivery challans.
vii. The Trial court has failed to note that the accused produced documents at Ex.D13 to 16 which are the bills raised by the accused company with its clients HESCOM and KPTCL and behind these bills 10% of the bill value has been deducted as penalty due to delay in completing the work order. As such the judgment is perverse erratic and contrary to the material on record and is liable to be set aside.
viii. The trail court failed to note that the complainant was not entitled to full payments on mere supply of goods under the respective purchase orders. The balance payments were subject to the terms and conditions.
Hence, learned advocate for appellant prayed this court to set aside the judgment of conviction and sentence 7 Crl.A.No.968/2014 passed and acquit the appellant in the interest of justice and equity.
5. Heard.
6. On the basis of case made out, following points arise for my determination:
1. Has Appellant prove that Director of accused No.1 who is signatory of cheques not made as party before the Trial Court, hence, complaint not maintainable?
2. Has appellant prove that there is no legally recoverable debt as alleged in the appeal?
3. Has sentence passed by learned Trial Judge requires interference?
4. What Order?
7. My findings to the above points are:
Point No.1 : In the Negative Point No.2 : In the Negative Point No.3 : Partly in Affirmative Point No.4 : As per Order, for the following:
REASONS
8. POINT No.1 : The respondent No.1 being proprietor of reputed firm dealing in manufacture of 8 Crl.A.No.968/2014 electrical requirements and is an approved vendor to various government undertakings and also private companies and had supplied appellant NO.1 firm station battery chargers, LTAC Panels and DEDB's as per KPTCL specifications for the projects at Haradanahalli and Bheriya substations under purchaser orders dated: 9.1.2007 as per invoice NO.039 dated: 3.8.2009 for a sum of Rs.5,68,194/-. The appellant had issued two cheques No.550385 dated:
25.8.2009 for Rs.3,88,017/- and 550387 dated: 10.8.2009 for Rs.79,151/- drawn on SBI, Rajajinagar Industrial Estate.
When the said cheques were presented for realization the cheques returned with an endorsement ' Not arranged for'. Inspite of issuance of legal notice appellants have not paid the cheque amount.
9. Based on the complaint Trial court after taking cognizance recorded sworn statement of complainant and issued summons to the accused. Thereafter, the complainant has examined as P.W.1 and got marked Ex.P.1 9 Crl.A.No.968/2014 to P.15 and closed his side of evidence. The statement of accused under Sec. 313 of Cr.P.C. was recorded and accused denied all incriminating evidence against them and accused No.2 examined as DW.1 and got marked documents as per Ex.D1 to D18. The trial court after hearing the arguments on both sides passed the impugned judgment dated 6.8.2014 convicting the accused/appellant for the offence punishable under Sec.138 of N.I. Act and sentenced to pay a fine of Rs.7,10,000/- and in default he shall undergo S.I. for a period of one year.
10. In appeal the appellant/accused raised two points that the cheque drawn by Sri.Sharathkumar K.H. whose signature is found in the cheque not made as party and there is no legally recoverable debt as on the date of filing the complaint. Accused in his cross examination deposed that himself and Sharath Kumar are two Directors in Mahaveer Electromech Pvt.Ltd., Sharath Kumar is his brother , but he is not called as Sharath Kumar as well as 10 Crl.A.No.968/2014 Sharath Prasad. He also clearly admitted that after cheque got bounced complainant has sent notice to them, notice Ex.P.6 sent in the name of Director Sharath Prasad and another notice in the name of Company same has been received in the name of Sharath Prasad, but they have not sent reply notice to the complainant. Even they have not replied that notice sent to Sharath Prasad is wrong one. Hence, it is clear that accused has not agitated the notice sent to Sharath Prasad though he is Sharath Kumar , but he had received notice of Sharath Prasad as well as notice sent to company. But there was ample time for accused to send reply notice alleging the same. But accused failed to do so. Hence, there is implied admission that Sharath Kumar and Sharath Prasad are one and the same person. The admitted fact need not be proved. Under these circumstances, this court hold point No.1 in the Negative.
11. POINT No.2 : It is alleged that there is no legally recoverable debt. DW1 in his cross examination 11 Crl.A.No.968/2014 deposed that there is no previty of contract between complainant and KPTCL and HESCOM, it is between accused and KPTCL company. Complainant manufacture panel boards and inform accused and there is no relationship between manufacturer of panel boards and building control room because for constructing sub station 30 to 40 persons supply goods to construct sub station. KPTCL and HESCOM having direct transaction with accused in turn accused will inform complainant but in this case they have not sent any written requisition for manufacture of panel boards, since they have not informed about manufacturing of panel boards for both the transactions he has to pay fees Rs.5,68,194/-. Further he clearly admitted that after supply of panel boards they have issued cheque as per Ex.P1 and P2. They have not sent any reply notice to the complainant. Hence, it is clear that the construction of sub station and control room is not mainly depending on supply of panel boards by the complainant as per admission of 12 Crl.A.No.968/2014 accused 30 to 40 persons supply different kinds of goods by assembling the same they are constructing control room as well as sub station. The loss occurred due to delay in supply of goods by complainant is a myth and it is remota causa. There is also clear admission that there is legally recoverable debt by complainant as on the date of filing this complaint. Further accused has not adduced or produced rebuttal evidence to rebut presumption available to complainant under law. Mere denial and suggestion by adducing evidence have no probative force unless there is specific denial to disprove the same. For the afore said this court hold point NO.2 in the Negative.
12. POINT No.3 : DW1 in his cross examination clearly admitted that with regard to two transactions he has to pay Rs.5,68,194/- to the complainant, but he had issued two cheques in Ex.P1 and P2. Though complainant examined in this case as PW1 but not cross examined by accused. But court below has relied on cross examination 13 Crl.A.No.968/2014 of DW1 that accused has to pay Rs.5,68,194/- and imposed interest of 18% on the amount which will come around more than six lakhs and hence, convicted accused under Sec.138 of NI Act and sentenced to pay a fine of Rs.7,10,000/- out of which Rs.7,00,000/- to be paid as compensation to complainant and remaining Rs.10,000/- is taken as fine to the state for the expenses incurred by prosecution.
13. In normal course of transaction in all cheque bouncing cases court have adopted to impose fine equivalent to cheque amount and pay compensation to complainant by taking major portion of fine amount to the complainant and remaining smaller amount will be taken as fine to state for prosecuting the case at the expense of State machinery. But in this case imposing 18% of interest on the cheque amount is exorbitant and against the normal course administered by court of law in providing justice to aggrieved party in accordance with law. Hence, this court 14 Crl.A.No.968/2014 find that if sentence passed by learned Trial Judge not altered it may cause prejudice to the case of the accused. Further in this case accused has not given chance of cross examining PW1. It is also fatal to the case of accused in putforthing his case if any in cross examination of PW1. Accordingly, this court hold point NO.3 partly in the Affirmative.
14. POINT No:4 In view of my finding to the point No.1 to 3 and for reasons discussed above, I proceed to pass following ORDER The Criminal Appeal filed by the appellant under Sec.374 Cr.P.C. is hereby partly allowed. Order of conviction passed by trial court is confirmed and accused is sentenced to pay fine of Rs.4,70,000/- for the offence committed under Sec.138 of NI Act. Out of the said fine amount Rs.4,67,200/- is paid as compensation to the complainant and remaining amount is defrayed to state. 15 Crl.A.No.968/2014
Send LCR along with the copy of this order forthwith to the trial court.
(Dictated to the Judgment writer on Computer, corrected by me and pronounced by me in the open court on this 30th day of March 2016) (A.VIJAYAN), LXVI Addl.CC & SJ, Bangalore.
16 Crl.A.No.968/2014