Bangalore District Court
Sri K.V.V. Giri @ Konada Varaha vs M/S. Poojitha Exports on 2 April, 2018
IN THE COURT OF THE XIX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY
Dated this the 2nd day of April , 2018
PRESENT: SRI MADHVESH DABER, B.COM., L.L.B(SPL).,
XIX ADDL.C.M.M., BENGALURU.
Case No: C.C.No.26941/2014
Complainant: Sri K.V.V. Giri @ Konada Varaha
Venkata Giri
S/o. K. Appatchi,
Aged about 42 years,
R/at H.No.2674, 2nd Floor,
25th 'B' Main, 16th Cross,
HSR Layout, Sector-1,
Bengaluru - 560 034.
Accused: M/s. Poojitha Exports
By its Proprietrix,
Smt. L. Latha,
W/o. Mahesh,
Aged about 35 years,
Office At, Old House No.51/8,
New No.978, 1st Main Road,
2nd Cross, Kamala Nehru Extension,
Yeshwantpur,
Bengaluru - 560 022.
Offence complained of: U/s.138 of N.I.Act
Plea of accused: Pleaded not guilty
Opinion of the Judge Accused found guilty
Date of order: 2nd April 2018
2 C.C.No.26941/2014
JUDGEMENT
The complainant has filed this complaint U/s.200 of Cr.P.C. against the accused for the offence punishable U/s.138 of N.I. Act.
2. The brief facts of the complaint are that;
The Complainant stated that he and Accused have decided to start a business venture of cashew nut export. The Accused is running M/s. Poojitha Exports which trades in export of cashew nut having its office at Yeshwanthpura, Bengaluru. The Complainant and the Accused have finally decided to start a partnership business wherein the Complainant was to invest Rs.10,00,000/- in the Accused propriety of M/s. Poojitha Exports in the month of May 2013.
3. It is further stated by the Complainant that he transferred the said amount of Rs.10,00,000/- via 3 RTGS (Time Gross Settlement) transactions on HDFC Bank, HSR Layout (Online transaction ) to M/s. Poojitha Exports on (a) 10.5.2013 a sum for Rs.6,00,000/-) with reference NO.0000000000732972 and
(b) on 11.5.2013 another sum of Rs.1,00,000/- via RTGS transaction, with reference No. 0000000000732973 and (c) on 3 C.C.No.26941/2014 3.6.2013 another sum of Rs.3,00,000/- via RTGS to M/s. Poojitha Exports duly for the purpose of the business partnership. Thereafter the Accused kept promising the Complainant of starting the said cashew nut export sooner than later.
4. The Complainant further states that the Accused delayed the business venture indefinitely and finally agreed that the said business cannot be fructified due to her inability to carry on the export business of cashew nut. Thereafter upon his repeated requests agreed to return the principal amount of Rs.10,00,000/- along with interest of Rs.2,90,000/- totally amounting to Rs.12,90,000/-. On 31.1.2014 the Accused had issued two duly signed cheques bearing No. 000189 and 000279 for Rs.6,45,000/- each both drawn on Bank of Baroda, New BEL Road branch, Bengaluru as a security to the legally enforceable debt of Complainant from Accused. When the Complainant demanded the Accused to make good the payment of the aforesaid Rs.12,90,000/- the Accused requested time as she had applied for loan and the bank persons are about to inspect her premises soon. Accused has unequivocally promised to pay this amount failing 4 C.C.No.26941/2014 which the Complainant was free to present the said cheques to his banker for collection and also requested the Complainant not to present the cheques as the amount available in the Accused account was for another transaction and if that is not kept, other business of M/s. Poojitha Exports will get affected and eventually even Complainant would suffer.
5. The Complainant has further stated that on 11.4.2014 the Accused taken back the said two cheques and issued 2 new duly signed cheques with interest as payable on 11.4.2014 bearing No. 000315 dtd.11.4.2014 and 000316 dtd.31.5.2014 for Rs.7,00,000/- each both drawn on Bank of Baroda, New BEL Road branch, Bengaluru as a security towards the legally recoverable debt.
6. It is further stated by the Complainant that having believed the Accused constraints, he gave her time to make good this amount of Rs.14,00,000/- till 3.6.2014. The Accused has postponed the same. Thus being fed up with the Accused stories, the Complainant has presented the said 2 cheques before his banker for encashment. But the said cheques were returned dishonoured with endorsements "funds insufficient" on 3.6.2014. The Complainant informed the same to the Accused. 5 C.C.No.26941/2014
7. The Complainant further stated that as the Accused has failed to make payment of the cheques amount, he got issued the Legal Notice to the accused on 24.06.2014 through his advocate by RPAD, calling upon her to make payment of the cheques amount within 15 days from the date of receipt of notice and the same was served on the accused on 25.6.2014. The Accused inspite of receipt of Legal Notice, has not chosen to make payment of the cheques amount, but she has sent an untenable reply notice on 3.7.2014. The Accused knowing fully well that she has no sufficient funds in her bank account, issued bogus cheques only with an intention to cheat this Complainant and thereby the Accused has committed an offence punishable u/Sec.138 of N.I. Act.
8. Soon after filing of the complaint, cognizance of the offence was taken. Matter was registered as P.C. After recording of sworn statement of the complainant, the Private Complaint lodged by the complainant was registered as a Criminal Case. Summons was issued as against the accused. The accused appeared through her Counsel and she was enlarged on bail. Substance of accusation was read over to the accused. The accused pleaded not guilty and claimed to be tried. 6 C.C.No.26941/2014
9. The complainant got examined himself as PW1 and he got produced 18 documents Ex.P1 to Ex.P18.
10. After closure of the complainant side evidence, Statement of the accused u/Sec.313 of Cr.P.C. was recorded. The accused denied the incriminating evidence in toto and chosen to lead her defence evidence. The Accused got examined herself as DW1 and no documents were marked from her side. She also got examined a witness from her side as DW2 and closed her side.
11. Arguments heard. I have perused the entire records. The learned Counsel for the Complainant has filed written arguments, which are part and parcel of the records.
12. Now, the points that arise for my consideration are as under:
i) Whether the Complainant proves that the accused in discharge of legally enforceable debt, issued two cheques for total sum of Rs.14,00,000/- which on presentation came to be dishonoured and she has failed to honour the notice and not paid the amount and thereby, committed an offence u/Sec.138 of N.I. Act?
ii) What order?7 C.C.No.26941/2014
13. My findings to the above points for consideration are as under:
Point No.1 : In the Affirmative
Point No.2 : As per final order
for the following:
:R E A S O N S:
14. Point No.1 :- In fact the Complainant
Sri K.V.V. Giri entered into the witness-box as PW1 and filed an affidavit and reiterated the complaint averments and got examined himself as P.W.1 and also got marked documents Ex.P1 to Ex.P18. Per contra, the Accused got examined herself as DW1 and no documents were marked from her end. The Accused also got examined a witness from her side as DW2.
15. During arguments, the learned Counsel for the Complainant filed written arguments and contended that as per RTGS Rs.10,00,000/-was paid to Accused. For repayment of the said amount, the Accused issued two cheques of Rs.6,45,000/- each including interest. Later those two cheques were taken back and Accused issued two cheques for Rs.7,00,000/- each including interest. Those two cheques on presentation came to be dishonoured for the reason "funds insufficient". It is contended 8 C.C.No.26941/2014 that with regard to payment of Rs.10,00,000/- to Accused the documents Ex.P.8 and Ex.P.9 clearly go to show that the Accused received Rs.10,00,000/- from the Complainant. Further Ex.P.10 to Ex.P.15 are the e-mail communications which also support the transaction taken place between Complainant and Accused. The Accused admitted receipt of Rs.10,00,000/-. If at all the cheques were misused, the Accused could have filed a complaint against the Complainant. If at all the cheques were forged the cheques could not have returned for the reason "funds insufficient". But they could have been returned for the reason signature differs.
16. Moreover, the Accused has not sent the signature for comparison and not examined the banker. There are so many infirmities in the cross-examination of DW1. The Accused has failed to prove her contention that the cheques were placed in the office of an Auditor Mr. Bhaskar. Even the evidence of driver Mr. Mani is full of contradictions and he himself has stated that the cheques which were given to an Auditor Mr. Bhaskar were not Ex.P.1 and Ex.P.2. So this clearly goes to show that the Accused has come up with a false case. Hence, learned Counsel for the 9 C.C.No.26941/2014 Complainant prayed to convict the Accused. In support of his arguments, he has relied upon the following rulings;
i) ILR 2007 Kar 936 H.M. Satish V/s. B.N. Ashok
ii) AIR 1999 SC 2222 L.C. Goyal V/s. Mrs. Suresh Joshi & others
iii) 2010 Cri.L.J. 2705 Smt. Kiran Yugalkishore Bhattad V/s. Smt. Sushila Ramcharan Kattamwar
iv) 2016 Cri.L.J. 1346 Don Ayengia V/s. State of Assam and Another.
17. On the other hand, the learned Counsel for the Accused has contended that the defence of the Accused is in the reply notice wherein it is clearly stated that the cheques were misused. The documents Ex.P.12, Ex.P.13, Ex.P.17 and Ex.P.18 are not supportive to the case of the Complainant. Even though it is admitted that Rs.10,00,000/- was paid by Complainant, but said amount was paid towards some other transaction. The payments made are all in respect of an old transaction. Moreover, MOU Ex.P.17 does not bear signature of both the parties. So it has no evidentiary value in the eyes of law. So alleged transaction had stopped in the stage M.O.U. only. There is no legally recoverable debt or liability. If the cross-examination of PW1 is perused, it goes to show that the question of payment does not arise with 10 C.C.No.26941/2014 regard to subsequent date. Moreover, with regard to misuse of the cheque is concerned, the Accused has examined Mr. Mani who is the Driver of the Accused whose evidence clearly goes to shows that he had left the cheques in the office of Auditor Mr. Bhaskar, which was later on misused by Complainant. So it is argued that the Accused by leading defence evidence and also by eliciting facts from the cross-examination of PW1, made her case probable. The Complainant has not established his case beyond reasonable doubt. Hence, Accused prayed to acquit her. In support of his arguments, he has relied upon the following rulings;
i) 2006 (6) SCC 39 M.S. Narayana Menon @ Mani V/s. State of Kerala & Another.
ii) 2008(1) SCC 258 K. Prakashan V/s. P.K.
Surenderan
iii) 1999 (1) SCC 1 Rickmers Verwaltung GMBH
V/s. Indian Oil Corporation Ltd.
18. I have carefully gone through the principles of above rulings relied upon by both the learned Counsels. Keeping in mind the principles of above rulings, I have examined the evidence on record.
11 C.C.No.26941/2014
19. It is trite principles of law that the presumption u/Sec.139 of N.I. Act is initially in favour of the Complainant that the cheque was issued for discharge of a legally recoverable debt or liability. However, the said presumption is rebuttable presumption. The Accused has to rebut the said presumption by taking a probable defence. The presumption can be rebutted even by eliciting facts from the cross-examination of PW1 or by leading defence evidence. For that Accused need not enter into the witness-box. Even the question of legally recoverable debt or liability can also be contested. Whether the presumption is rebutted or not? depends on facts and circumstances of each case. This principle is laid down by Hon'ble Supreme Court in AIR 2010 SC 1898 Rangappa V/s. V. Mohan. In the light of above principles of law now I have to see whether the presumption is rebutted or not? and Complainant has proved his case or not?
20. On conjoint reading of entire evidence and documents on record, the Complainant has come up with a case that the Complainant and Accused intended to start a business partnership in cashew nut wherein the Complainant has invested Rs.10,00,000/-. Even after expiry of so many days the Accused 12 C.C.No.26941/2014 could not start the said business. After negotiations the Accused agreed to repay Rs.6,45,000/- by way of two cheques, which included interest. Later on those two cheques were taken back and the cheques of the present case were issued which on presentation came to be dishonoured for the reason "funds insufficient".
21. On perusal of the cross-examination of PW1 and the evidence of Accused including the document produced by the Complainant, it transpires that as per the reply notice Accused admitted that she was a cashew nut exporter. But it is the case of the Accused as per the reply notice Ex.P.7 that she had given Rs.10,00,000/- to Complainant in January 2013 as a hand loan. The amount mentioned in the bank statement was in respect of repayment made by Complainant of Rs.10,00,000/- to the Accused. So it is the contention of the Accused that the amount of Rs.10,00,000/- was not in respect of the invested amount by the Complainant in the cashew nut business firm to be intended to set up by Complainant and Accused. But in fact in the reply notice it is contended that the hand loan was given in January 2013. But in the cross-examination the DW1 has contended that 13 C.C.No.26941/2014 she paid Rs.10,00,000/- to Complainant on 4.10.2012. She has no document to show that she paid Rs.10,00,000/- to the Complainant.
22. In the cross-examination the Accused has stated that she had no impediment for producing the bank statement and Income Tax Returns. So it is abundantly clear that the version of Accused that Rs.10,00,000/- was paid to Complainant as hand loan, which was repaid by Complainant subsequently, is unbelievable. In the cross-examination the Accused has admitted that she has no documents to show that she has handed over Rs.10,00,000/- to the Complainant. So the version of the Accused is unacceptable one. Moreover, the said contention is not stated by Accused in her evidence. But she has stated in detail that the cheques were misused by the Complainant.
23. In the Ex.P.7 it is stated that she had sent her Driver Mr. Mani (DW2) to the office of an Auditor Mr. Bhaskar along with Ex.P1 and Ex.P2 and Mr. Mani had placed those cheques in the hands of Complainant and instructed him to handover them to Auditor as soon as he comes. The Accused was under
impression that the cheques were received by Auditor Mr. 14 C.C.No.26941/2014 Bhaskar and same would be used for payment of Income Tax.
But on perusal of entire evidence of Mani, it goes to show that there are so many infirmities which render his version doubtful.
The important aspect is that Mr. Mani has admitted in his cross-
examination that Ex.P1 and Ex.P2 were not the cheques that he had handed over in Mr. Bhaskar's office.
24. Moreover, in the evidence of Mr. Mani it was elicited that he had given the cheques to the staff of auditor Mr. Bhaskar. Nowhere DW2 Mani has stated that he had handed over those cheques to Complainant. Moreover, his age is only 34 years. But he has stated that he worked as car driver of Accused for more than 22 years, which renders his version doubtful. So in the light of evidence given by Mr.Mani it is abundantly clear that Ex.P1 and Ex.P2 were not the cheques which were handed over to staff of Mr. Bhaskar. So there is variance in the evidence of DW2- Mr. Mani. The contents of reply notice Ex.P.7 which clearly goes to show that the version of Accused is unacceptable one.
25. Moreover, it is not forthcoming as to why the Accused sent blank signed cheques to her auditor for payment of Income Tax. In fact Income Tax would be determined and return should 15 C.C.No.26941/2014 be filed after a long gap of ending of financial year and assessment year. So there would be ample opportunity for the assessee to calculate Income Tax and pay the same to the Income Tax Department. So it is highly improbable that the Accused issued Ex.P1 and Ex.P2 to her auditor in blank form for payment of Income Tax. So the conduct of the Accused is not prudent and diligent. So I am of the opinion that the entire version of Accused is unacceptable one.
26. On the other hand, on perusal of the Ex.P.8 which is bank statement, Ex.P.9 which is Consideration Receipt, e-mail communications Ex.P.10 to Ex.P.15, it is abundantly clear that an amount of Rs.10,00,000/- was paid to Accused with regard to the starting up of cashew nut business. Since the E-mail messages are supported by affidavit u/Sec.65(b) of Indian Evidence Act and since bank statement is the statement issued by the banker, they have evidentiary value. These documents go to show that an amount of Rs.10,00,000/- was transferred to the Accused the Ex.P1 and Ex.P2 were issued for repayment of said Rs.10,00,000/- along with interest. So evidence of Complainant is supported by documentary evidence.
16 C.C.No.26941/2014
27. The Complainant has been cross-examined at length. It is true that there are so many infirmities in the cross-examination of PW1. But those infirmities are not so serious to discard the entire evidence given by Complainant. In fact the evidence of Complainant is supported by documentary evidence. The Accused has not taken probable defence and not rebutted the presumption u/Sec.139 of N.I. Act. The oral and documentary evidence on record with regard to the stand of the Accused are contradictory to each other. In fact both the Complainant and Accused are well-educated. The alleged transaction has taken place in regard to starting up of partnership firm. Moreover, the cheques were allegedly left in the office of Auditor Mr. Bhaskar. Nothing prevented the Accused from taking a legal action against the Complainant for misuse of the cheques. Even the Accused has not examined Mr. Bhaskar in support of her case. So it is crystal clear that the cheques Ex.P1 and Ex.P2 have not been forged or fabricated. The Accused admits that she has not filed any police complaint before the jurisdictional police station against the Complainant for misusing the cheques. The Ex.P.10 to Ex.P.15 are the E-mail messages, which clearly go to show that the Accused admits the liability to pay the amount. The bank 17 C.C.No.26941/2014 statement Ex.P.8 clearly goes to show about the transfer of money made from the account of Complainant. So these documents clearly support the case of the Complainant. Moreover, in the E- mail it is clearly stated that the Accused was due to Rs.12,90,000/- as on 30.1.2014.
28. It is true that the Ex.P.17 M.O.U. is unsigned by the parties. So that document is not admissible in evidence. However, the other documents are clearly supportive to the case of Complainant. The amount mentioned in the cheques was in respect of the amount payable by the Accused with interest. There is nothing to discard the evidence of the Complainant. Though it is contended that the MOU was unsigned by the Accused, but merely on basis of Ex.P.16 it cannot be said that no transaction has taken place between Complainant and Accused. So considering entire oral and documentary evidence, I am of the opinion that the Accused has not taken up a probable defence and not rebutted the presumption u/Sec.139 of N.I. Act. The cheques Ex.P1 and Ex.P2 were issued for discharge of 'liability', which was liable to be cleared by the Accused. For that the Accused issued the cheques mentioning therein principal 18 C.C.No.26941/2014 amount interest which on presentation came to be dishonoured for the reason "funds insufficient". Accordingly, after complying all the legal formalities, the present complaint came to be filed. Hence, I am of the opinion that the Complainant has established his case beyond reasonable doubt. On the other hand, the Accused has failed to prove her case to the satisfaction of the court and she failed to rebut the presumption u/Sec.139 of N.I. Act. Hence, Accused is liable for conviction. Accordingly, I answer point No.1 in the Affirmative.
29. Point No.2:- In view of my findings on the above point and the reasons stated therein, I proceed to pass the following:
ORDER Acting u/Sec.255 (2) of Cr.P.C., the accused is hereby convicted for the offence punishable u/Sec. 138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.25,00,000/- (Rupees Twenty-five Lakhs only), in default she shall undergo simple imprisonment for 3 (three) months.19 C.C.No.26941/2014
Out of fine amount, a sum of Rs.24,90,000/-
(Rupees Twenty-four Lakhs and Ninety Thousand Only) shall be paid to the complainant after appeal period is over. Remaining fine amount of Rs.10,000/- shall be forfeited to State.
The bail bond and surety bonds of the accused stand cancelled.
Office to furnish free copy of the judgement to the accused forthwith.
(Dictated to the Stenographer, transcript thereof is computerized and print out taken by her is verified and then pronounced by me in the Open Court on this the 2nd day of April, 2018) (MADHVESH DABER) XIX ADDL.C.M.M., Bengaluru.
ANNEXURE:
Witnesses examined on behalf of the Complainant:
PW.1 Sri K.V.V. Giri Witnesses examined on behalf of the Accused: D.W.1 Smt. L. Latha D.W.2 Sri Mani Documents marked on behalf of the Complainant:
Ex.P1 & Ex.P2 Cheques
Ex.P.1(a) & Signature of the Accused
Ex.P2(a)
Ex.P.3 & Ex.P4 Bank endorsements
Ex.P.5 Copy of Legal Notice
Ex.P.5(a)& Postal receipts
Ex.P.5(b)
Ex.P.6 Postal Acknowledgement Due Card
Ex.P.7 Reply notice
Ex.P.8 Bank statement
Ex.P.9 Consideration Receipt
20 C.C.No.26941/2014
Ex.P.10 to Ex.P.15
E-mail Communications
Ex.P.16 & Ex.P.17
Notarized copy of MOU
Ex.P.18 Affidavit
Ex.P.13 & Ex.P.14
Passbooks of Jeevan Suraksha Chits
Ex.P.15& Ex.P.16Form 32
Ex.P.17 Letter written by Complainant to Sri Vinayaka
Industries
Ex.P.18 Letter written by the Jeevan Suraksha Chits India Pvt.
Ltd.,
Documents marked on behalf of the Accused: Nil XIX ACMM, Bengaluru.