Bangalore District Court
S.M.Computers & Technologies vs Sumuk International on 15 October, 2022
KABC030878622019
Presented on : 29-11-2019
Registered on : 29-11-2019
Decided on : 15-10-2022
Duration : 2 years, 10 months, 16 days
IN THE COURT OF THE XVIII ADDL.CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
PRESENT: MANJUNATHA M.S. B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
DATED : THIS THE 15 th DAY OF SEPTEMBER 2022
Criminal Case No. 28454/2019
COMPLAINANT: S.M.Computers & Technologies
Rep.by its Proprietor
Mr.K.S.Sandeep Shetty,
Office at #212,
Opp.Muneshwara Temple
Ground Floor, Nagashettyhalli,
Sanjaynagar, Bengaluru-560 094.
(By Sri.C.C.- Advocate)
// Versus //
ACCUSED: SUMUK INTERNATIONAL
TRADING INC
Rep.by tis Proprietor/Authorized
by Smt.Vinuta Pai,
D/o Late Rajeeva
office at No.19/2,
Shree Meena Residency
Akai Public School Road,
Nagashettyhalli, Sanjaynagar,
Bengaluru -560 094.
And also
2 Judgment C.C.28454/2019
Smt.Vinuta Pai,
D/o Late Rajeeva.
C/o Rithesh,
Aged about 43 years,
R/at No. 15, Meenakshi Residency,
Near Adarsha Public School,
Nagashetty Halli, Sanjaynagar,
Bengaluru -560 094
(By M/s PP Associates- Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Name of the complaint : S.M.Computers & Technologies
Proprietorship concern
Date of commencement
of evidence : 24-03-2022
Date of closing evidence : 03-09-2022
Opinion of the Judge : Accused found guilty.
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE.
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused 3 Judgment C.C.28454/2019 alleging that, she has committed the offence punishable under section 138 of NI Act.
02. The sum and substance of the complaint, is as follows; The accused is very well-known person and best friend of the complainant . In that acquaintance, the accused has approached the complainant for hand loan of Rs.4,00,000/- for purpose of her business and legal necessities and also promised to repay the same within a short period. Considering her request, the complainant has paid Rs.4,00,000/- to the accused through RTGS on 5.11.2018. But she has not kept up her promise. After several request and demand made by the complainant to repay the loan, the accused has issued cheque bearing No. 027085 for Rs.4,00,000/- dated 5.9.2019 drawn on Axis Bank, Ganganagar, Bengaluru and also promised that the cheque will be honoured on its presentation. The complainant has presented the said cheque for encashment on 05-09-2019 through its bank, but the said cheque was dishonoured for "20PAYMENT STOPPED BY DRAWER" dated 07.09.2019. Thereafter, the complainant has got issued demand notice on 16-09-2019 to the accused through RPAD by demanding the payment of cheque 4 Judgment C.C.28454/2019 amount. The accused has received the said notice. Despite of the demand notice the accused has not paid the cheque amount and thereby she has committed an offence punishable under section 138 of N I Act.
03. After filing of complaint, this court has taken cognizance of the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of the complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, accused enlarged on bail and plea was recorded as per section 251 of Cr.P.C. The accused has not pleaded guilty but submitted that she has defense to make.
04. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in (2014) 5 SCC 590, this court treated the sworn statement of the complainant as complainant evidence. The accused has filed application under section 145(2) of NI Act for recall of PW1 for the purpose of cross-examination. The said application came to be allowed. The defence counsel has fully cross-examined PW1. After 5 Judgment C.C.28454/2019 completion of complainant's evidence, statement of accused No.1 as contemplated under section 313 of code of criminal procedure was recorded. The accused has denied all the incriminating material appears against him in the complainant's evidence. Thereafter case was posted for defence evidence, but despite of giving sufficient opportunity the accused has not chosen to lead defence evidence. Hence defence evidence taken as Nil and posted the case for arguments vide order dated 15-09-2022.
05. Heard the arguments of the learned counsel for complainant and accused. The learned counsel for the accused has relied on decisions reported in (2020) 7 SCC 1 and (2014) 10 SCC 473. I have perused the materials available on record.
06. The points that arise for my consideration are as follows;
1. Whether the complainant proves that, accused being the proprietor of SUMUK INTERNATIONAL TRADING INC has issued cheque bearing No.027085 dated 05.09.2019 for Rs.4,00,000/- towards discharge of her liability, which was returned unpaid on presentation for the reason "Payment Stopped by drawer " and despite of service of notice she has not paid the cheque 6 Judgment C.C.28454/2019 amount and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
07. My answer to the above points is as follows;
Point No.1: In the Affirmative.
Point No.2: As per final order for the following;
REASONS
08. POINT No.1: The Complainant has filed this complaint alleging that the accused has committed offence punishable under section 138 of N.I. Act. The complainant pleads and asserts that, the accused being the proprietor of Sumuk International Trading INC in discharge of her liability has issued cheque bearing No.027085 dated 5.9.2019 for Rs.4,00,000/- . The complainant has presented the said cheque for encashment through its banker. But the said cheque was returned unpaid with an endorsement "Payment stopped by drawer"
on 07-09-2019. Thereafter, the complainant got issued demand notice on 16-09-2019 to the accused by demanding the payment of cheque amount. Despite of the service of notice the accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint.
7 Judgment C.C.28454/2019
09. To substantiate its case, the proprietor of the complainant has stepped into witness box and examined as PW.1 and got marked 8 documents as Ex.P-1 to Ex.P-8. PW1 has reiterated the contents of the complaint in his affidavit evidence about lending of loan to the accused, issuance of cheque by the accused towards discharge of her liability and its dishonour for "Payment stopped by drawer", issuance of legal notice to the accused calling upon her to pay the amount covered under cheque and her failure to comply the same.
10. In this scenario, let me scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 is cheque dated 05.09.2019. The said cheque was returned unpaid with an endorsement "Payment stopped by drawer" as per Ex.P.2 bank endorsement dated 06.09.2019, Ex.P.3 is legal notice dated 16-09-2019 under which the complainant has demanded the payment of cheque amount, Ex.P.4 is postal receipts, Ex.P5 is Unserved Postal covers, Ex.P.6 & 7 are Postal track consignment details and Ex.P.8 is Bank statement. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act have been complied with 8 Judgment C.C.28454/2019 and this complaint is filed within time. The proprietor of the complainant by examining as PW1 and by producing aforesaid documents has discharged his initial burden.
11. The accused has specifically denied the availing of hand loan of Rs.4,00,000/- from the complainant and issuance of cheque in question for repayment of alleged loan of Rs.4 lakhs. The accused has putforth her defence that during the earlier transaction the complainant has obtained cheque from her brother Ritesh Bangera for security purpose and same has been misused to file the present false case. There is no existence of legal enforceable debt as such section 138 of NI Act is not applicable to the cheque in question. The accused also contended that no notice was served on her as per section 138 (b) of NI Act.
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12. In the back drop of the aforesaid rival contentions this court has given anxious consideration to the materials on record and the submissions made by the learned counsel for complainant and the accused. At the outset, it is pertinent to state that the accused has not disputed the issuance of cheque in question and signature found in the said cheque. The only contention of the accused so far as 9 Judgment C.C.28454/2019 issuance of cheque is that during the earlier transaction the complainant has collected cheque from the brother of the accused for security purpose and misused the same to file false case. On perusal of the Ex.P.1 cheque, it appears that the said cheque was drawn on an account maintained by accused firm. The said firm is a proprietor concerned firm and represented by its proprietor/authorized signatory Smt.Vinta Pai. The proprietor of the accused firm Smt.Vinuta Pai has not disputed the issuance of cheque as well as her signature in the Ex.P.1 cheque. The Hon'ble Supreme Court in M/S Kalamani Tex and another V/s P. Balasubramanian (2021) 5 SCC 283 has held that the Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative, such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. Therefore once the drawer has admitted the issuance of cheque as well as on the signature present therein or it is established that signature in cheque belongs to accused, then the presumption envisaged under section 118 and 139 of NI Act, would operate in favour of the complainant. The said provision lays down a special 10 Judgment C.C.28454/2019 rule of evidence applicable to negotiable instrument. The presumption is one of law and thereunder court shall presume that the Negotiable instrument was endorsed for consideration. So, also in the absence of contrary evidence on behalf of the accused, the presumption under section 118 and 139 of NI Act goes in favour of the complainant.
13. In the present case as stated above the accused has not disputed her signatures in the Ex.P1 cheque. As such presumption under section 118 and 139 of NI Act has to be drawn in favour of the complainant. Section 118 reads as here: - "That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration". Further Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here:
- "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, or any debt or other liability." A combined reading of above said sections raises a 11 Judgment C.C.28454/2019 presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability. No doubt, the said statutory presumption are rebuttable in nature. It is for the accused to probable defence to rebut the presumption raised in favour of the complainant. It is worth to note that section 106 of Indian of Indian Evidence Act postulates the burden is on the accused to establish the fact which is especially within his special knowledge. This provision is except to the General Rule, that the burden of proof is always on the prosecution to establish their case beyond all reasonable doubt. In that view of the matter, the burden is on the accused to prove that the cheque in question was not issued for discharge of any debt or liability but it was issued during the earlier transaction for the purpose of security.
14. In order to rebut the said presumptions and to prove her defence, the accused has fully cross examined PW1, but she has neither led any defence evidence nor produced any documents.
During the cross-examination it was suggested to PW1 that during the earlier transaction he has obtained cheque from the accused for the purpose of security and misused the said cheque to file false. But 12 Judgment C.C.28454/2019 PW1 has denied the said suggestion in clear terms. Nothing worth has been elicited in the mouth of PW1 in support of the defence taken by the accused. Therefore, the evidence of complainant remained unchallenged. Apart from that the complainant has produced his Bank statement Ex.P.8 to prove that on 05.11.2018 has transferred Rs.4,00,000/- through RTGS to the account of accused. On perusal of Ex.P.8 it appears that the complainant has transferred Rs.4,00,000/- to the accused account through RTGS on 05.11.2018. The accused has not produced any evidence to say that she has repaid the said amount to the complainant. The learned counsel for the accused has argued that the complainant has not produced certicate under section 65B of Indian Evidence Act in respect of Ex.P8 bank statement as held by the Hon'ble Supreme court Arjun Panditrao Khotkar case (2020) 7 SCC1 and Anvar P V case (2014) 10 SCC 473. No doubt the Ex.P8 bank statement is not contained any seal or signature of Bank manager and the complainant has not field any certificate along with Ex.P8. But during the cross-examination the accused has not disputed the same. Only during the argument he has raised the said contention. Even the said Bank statement Kept aside as not complied section 65B of 13 Judgment C.C.28454/2019 Evidnece Act, there is presumption under section 139 of NI Act that the cheque in question was issued for discharge of legally enforceable debt or liability since the accused has not disputed the signature in the cheque. The said presumption has to be rebutted by raising probabale defence in the from of preponderance of probability. But the accused has not stepped into witness box to explain how and what manner the cheque in question was placed in hand of complainant. Hence, it is clear that the accused has issued Ex.P.1 cheque for repayment of the afore said debt. The said cheque came to be dishonoured for payment stopped by drawer. The accused has not produced her bank statement to show that as on the date of presentation of Ex.P.1 cheque there was a sufficient amount in her account to honour the cheque. Hence, even though the cheque in question was dishonored for payment stopped by drawer it attracts, section 138 of NI Act as held by the Hon'ble Supreme Court in Lakshmi Dyechem Vs. State of Gujarath and others, reported in (2012)13 SCC 375. The accused has neither stepped into witness box nor brought on record any circumstances to rebut the presumption envisaged under section 118 and 139 of NI Act. The said statutory presumption remained unrebutted.
14 Judgment C.C.28454/2019
15. During the cross examination of PW1, the defence counsel suggested that the demand notice sent to the accused was not severed on her. It is also suggested knowingly very well that the accused was not residing in the said address he has issued notice on the said address. The said suggestions have been denied by the complainant in clear terms. Regarding compliance under section 138(b) of NI Act, the complainant has produced Ex.P.3 copy of the demand notice, Ex.P.4 postal receipts, Ex.P.5 unserved postal cover and Ex.P.6 postal track consignment. On perusal of these documents it appears, that after dishonour of cheques, the complainant has sent demand notice as per Ex.P.3 on two addresses of accused through registered post acknowledgment due. The notice sent to the one address of the accused returned unserved as Ex.P.5 with postal endorsement addressee left. But as per Ex.P.6 postal track consignment the notice sent to the accused on her another address was duly served on 17.9.2019.
16. The learned counsel for the accused vehemently argued that Ex.P.6 postal track consignment can't be taken into consideration for proof of service of notice as same was is not accompanied certificate 15 Judgment C.C.28454/2019 under section 65B of Evidence Act. In K Bhaskaran Vs Sankaran Vaidhyan Balan & Anr [1999 (7) SCC 510], it has been held that the context of Section 138(b) of the Negotiable Instruments Act invites a liberal interpretation favouring the person who has the statutory obligation to give notice under the Act because he must be presumed to be the loser in the transaction and provision itself has been made in his interest and if a strict interpretation is asked for that would give a handle to the trickster cheque drawer. It is also well settled that once notice has been sent by registered post with acknowledgment due in a correct address, it must be presumed that the service has been made effective. We do not find from the endorsement of the postal peon that the postal peon was at all examined. In V. Raja Kumari Vs. P. Subbarama Naidu & Anr [2004 (8) SCC 774], Hon'ble Supreme court reiterated that statutory notice under section 138 and 142 of the Negotiable Instruments Act, 1881 sent to the correct address of the drawer but returning with the endorsement must be presumed to be served to the drawer and the burden to show that the accused drawee had managed to get an incorrect postal endorsement letter on the 16 Judgment C.C.28454/2019 complainant and affixed thereof have to be considered during trial on the background facts of the case.
17. In Madhu Vs Omega Pipes Ltd. [1994 (1) ALT (Crl.) 603 (Kerala)] the scope and ambit of Section 138 clauses (b) and
(c) of the Act were noted by the Hon'ble Kerala High Court and Justice K.T. Thomas (as His Lordship was then) observed as follows: "In Clause (c) of the proviso the drawer of the cheque is given fifteen days from the date 'of receipt of said notice' for making payment. This affords clear indication that 'giving notice' in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer in his correct address, if receipt or even tender of notice is indispensable for giving the notice in the context envisaged in Clause (b) an evader would successfully keep the postal article at bay at least till the period of fifteen days expires. Law shall not help the wrong doer to take advantage of his tactics. Hence the realistic interpretation for the expression 'giving notice' in the present context is that, if the payee has dispatched notice in the correct address of drawer reasonably ahead of the expiry of fifteen days, it can be regarded 17 Judgment C.C.28454/2019 that he made the demand by giving notice within the statutory period. Any other interpretation is likely to frustrate the purpose for providing such a notice." Therefore from the above proposition of law it is trite that once notice has been sent by registered post with acknowledgment due in a correct address of the accused is sufficient compliance of section 138(b) of NI Act. In the instance case though the accused contended that notice has been served on him and he was not residing in the address mentioned in Ex.P3 notice, but he has not produced any document to show his exact address as on the date of notice. Hence version of the complainant that he has sent notice on the correct address of the accused has to accepted. As such I am of the considered opinion that the complainant has complied section 138(b) of NI Act by issuing demand notice to the accused through registered post acknowledgement due to the correct address of the accused.
18. From the discussion made supra, it is clear that, the accused has neither taken probable defence nor taken steps to prove the same. To put it other way, the accused has not taken and proved probable defence to rebut the presumption of law available in favour 18 Judgment C.C.28454/2019 of the complainant under section 118 read with section 139 of N.I. Act. Accordingly, the case of the complainant is acceptable. The complainant has proved that, for discharge of liability the accused has issued Ex.P1 cheque and he has intentionally not maintained sufficient amount in his account to honour the said cheques. Hence, this point No.1 under consideration is answered in the Affirmative.
19. POINT NO.2: In view of the reasons stated and discussed above, the complainant has proved the guilt of the accused punishable under section 138 of N.I. Act. Hon'ble Supreme Court of India in a decision reported in, (2015) 17 SCC 368, in a case of H.Pukhraj Vs. D.Parasmal, observed that, having regard to the length of trial and date of issuance of the cheque, it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Further the Hon'ble Apex Court in its recent decision in M/s. Meters & instrument Pvt Ltd. Vs. Kanchana Mehta reported in (2018)1 SCC-560 held at para 18 that "The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not 19 Judgment C.C.28454/2019 debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the court. " Therefore, keeping in mind the time when the transaction has taken place and primary object of the provision, this court is of the opinion that, rather than imposing punitive sentence, if sentence of fine is imposed with a direction to compensate the complainant for its monitory loss, by awarding compensation U/Sec.357 of Cr.P.C, would meet the ends of justice. The accused has borrowed hand loan of Rs.4,00,000/- on 05-11-2018. The amount covered under the disputed cheque is Rs.4,00,000/-. The date of cheque is 05-09-2019. By considering all these aspects, this court is of the opinion that, it is just and proper to imposed fine amount of Rs.4,55,000/-, which includes interest and cost of litigation, out of which compensation of Rs.4,50,000/- has to be awarded to the complainant U/s 357 Cr.P.C. Accordingly, this court proceeds to pass the following;
ORDER Acting under section 255 (2) of Criminal Procedure Code, accused is here by convicted for the offence punishable under section 138 of Negotiable Instrument Act and the proprietor of 20 Judgment C.C.28454/2019 accused firm Smt Vinuta Pai is sentenced to pay fine of Rs.4,55,000/-(Rupees Four Lakhs and Fifty Five Thousand only). In default thereof accused shall undergo simple imprisonment for the term of One year.
Acting under section 357(1) (b) of code of criminal procedure, it is ordered that, Rs.4,50,000/-
(Rupees Four Lakhs and Fifty Thousand only), therefrom shall be paid to the complainant as a compensation, remaining fine amount of Rs.5,000/- (Rupees Five Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
Office is directed to supply free copy of the judgment to the accused.
(Directly dictated to the Stenographer on computer, typed by her, corrected by me and then judgment pronounced in the open court on this the 15 th day of October 2022).
(MANJUNATHA M.S.) XVIII A.C.M.M.,BANGALORE 21 Judgment C.C.28454/2019 ANNEXURE I. List of witnesses on behalf of complainant:
P.W.1: Sri. K.S.Sandeep Shetty .
II. List of documents on behalf of complainant:
Ex.P-1 : Original Cheque
Ex.P-2 : Bank memo.
Ex.P-3 : Legal notice.
Ex.P-4 : Postal receipts.
Ex.P-5 : Unserved Postal cover
Ex.P.6 & 7 : Postal track consignment details
Ex.P.8 : Bank statement
III. List of witnesses for the accused: Nil
IV. List of documents for accused:Nil
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE
Digitally signed
by MANJUNATHA
MANJUNATHA MS
MS Date: 2022.10.15
16:23:53 +0530
22 Judgment C.C.28454/2019