Bangalore District Court
Branch Office At No.103 vs No.V52 on 6 January, 2020
1
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 6th DAY OF JANUARY, 2020
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.50673/2019
M/s. Mafatlal Industries Limited,
A Company incorporated under the Provisions of
Companies Act 1956,
Havings its Registered Office at No.301-302,
Heritage Horizon, 3rd Floor, Off C.G. Road,
Navarangapura,
Ahmedabad - 380009.
COMPLAINANT
Branch Office at No.103, 1st Floor,
Prestige Tower, Residency Road,
Bengaluru - 560 025,
Reptd by its Deputy General Manager -
Mr.Rajkant Shetty,
S/o. Mr. Prathap Shetty,
Aged about 44 years.
1) M/s. Goldrush Clothings
A Registered Partnership Firm,
ACCUSED No.V52, 7th Main Road, Peenya 2nd Stage,
Bengaluru - 560 058.
Reptd by accused No.2
2
Also at No.139/2, 6th Cross,
Ganapathi Nagar, Rajgopalnagar Main Road,
Laggere,
Bengaluru 560 058.
2) Smt. Veena .N - Partner
D/o. V. Nagaraja
M/s. Goldrush Clothings
No.139/2, 6th Cross, Ganapathi Nagar,
Rajgopalnagar Main Road, Laggere,
Bengaluru 560 058.
Also at No.41, 5th Cross, Ganapathi Nagar,
Rajgopalnagar Main Road, Laggere,
Bengaluru 560 058.
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused are acquitted
(K. GURUPRASAD)
XIV ADDL. C.M.M., BENGALURU
3
JUDGMENT
The present complaint is filed under Sec.200 Cr.PC for the offence punishable under Section 138 r/w 142 of Negotiable Instruments Act.
2. It is the case of the complainant that, the complainant company is engaged in business of manufacture, sale and dealings in various Textiles and Denim products including yarns, fabrics and garments etc. The accused no.1 is a partnership firm of which accused no.2 is partner and authorized signatory. The accused no.2 is looking after day-to-day affairs of accused no.1 firm. The accused purchased different types of clothes worth of Rs.22,65,507/- from the complainant company and agreed to make payment of invoice amount to the complainant within 30 days from the date of receipt of invoices. As per ledger account of the complainant, a sum of Rs.22,65,507/- is due from the accused no.1 to the complainant towards purchase of goods apart from other due payments towards over due interest, costs and other charges. Towards said liability, the accused issued six cheques bearing Nos.560613, 560614, 560615, 560616, 560617 and 560618 all dtd.10.12.2018 for Rs.4,00,000/-, Rs.4,00,000/-, Rs.4,00,000/-, Rs.4,00,000/-, Rs.4,20,000/- and 4 Rs.4,28,762/- respectively drawn on Canara Bank, SME Peenya branch, Bengaluru in favour of the complainant. When the complainant presented the said cheques to its banker i.e Axis Bank Ltd., Richmond Road branch, Bengaluru on 11.12.2018 for clearance, the said cheques came to be dishonoured with bank endorsement "payment stopped by drawer" on 12.12.2018. When the complainant got issued legal notice to the accused on 26.12.2018 calling upon the accused to pay the cheques amount, the said notice sent by registered post is returned unserved with postal shara "firm left" on 31.12.2018. Since the accused have failed to pay the cheques amount in spite of issuance of said notice, the accused are guilty of the offence punishable under Section 138 of N.I. Act. Hence this complaint.
3. After filing of this complaint, cognizance was taken for the offence punishable U/s.138 of N.I. Act. Sworn statement of the complainant was recorded. This court was satisfied as to prima facie case made out by the complainant for issuance of the summons. Accordingly, criminal case was registered against the accused and summons was ordered to be issued.
54. In pursuance of court process issued by this court, the accused appeared through her counsel and got enlarged on bail. Thereafter plea was recorded. The accused pleaded not guilty and claimed for trial.
5. In order to prove the case of the complainant, its Deputy General Manager and Authorized Person examined himself as CW.1 (PW.1) and got marked Ex.P1 to P37 and closed his side of evidence. Thereafter, statement of the accused U/s.313 of Cr.PC was recorded. The accused denied the incriminating circumstances in the evidence of the complainant as against the accused. The accused herself examined as DW.1 and got marked Ex.D1 to D7 and closed defence side of evidence.
6. Heard both sides. Perused the complaint, evidence on record and court records.
7. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused have committed the offence punishable U/s.138 of N.I. Act?
2) Whether the complainant is entitled for the relief's as prayed in the complaint?
63) What Order?
8. The above points are answered as under;
Point No.1 : In negative,
Point No.2 : In negative,
Point No.3 : As per the final order,
for the following.......
REASONS
9. Point Nos. 1 and 2: Since these two points are inter linked and to avoid repetition they are taken together for discussion.
10. As regard to limitation to file this complaint, Ex.P2 to P7 are the cheques dated 10.12.2018 drawn on Canara Bank, SME Peenya branch, Bengaluru in favour of the complainant. Ex.P8 to P13 are the cheque return memos dated 12.12.2018 issued by Axis Bank, Richmond Road, Bengaluru. Ex.P14 is copy of legal notice dtd.24.12.2018 got issued by the complainant to the accused. Ex.P13 to P19 are the postal window receipts dtd.26.12.2018 issued by postal department for having sent Ex.P14 notice by registered post to the accused persons at different addresses. Ex.P20 and P21 are the 7 postal covers in which Ex.P14-notice was sent by registered post but which have returned unserved with shara dtd.31.12.2018 as "left". Ex.P22 to P24 are the postal covers in which Ex.P14 notice was sent to the accused by registered post but which have returned unserved with postal shara dtd.1.1.2019 as "door locked". There is presumption under Sec.27 of General Clauses Act that when notice is issued by registered post at correct address, the said notice is presumed to have been served on the addressee. The burden of rebutting said presumption is on the person who disputes service of said notice. In the present case on hand, the accused has not adduced any evidence to show that the addresses shown in the notices or postal covers are incorrect or that such notices have not been actually served on her. Hence, it can be concluded that the accused have failed to rebut the presumption U/s.27 of General Clauses Act and as such Ex.P14 notice is deemed to have been served on the accused.
11. Therefore, it is clear from Ex.P2 to P24 that when the complainant presented the cheques in question within three months from the date of said cheques, the said cheques came to be dishonored and that when the complainant got issued Ex.P14-notice by registered post within 30 days from the date of intimation of dishonour of 8 said cheques, it was duly served on the accused. Hence, the present complaint filed on 1.2.2019 i.e after expiry of 15 days from the date of receipt of said notice and within 30 days thereafter is well within time.
12. As regard to legally enforceable debt or liability, in 2010 (11) SCC 441 - (Rangappa Vs Sri. Mohan), it is held that;
" The presumption mandated by Sec.139 of the Act includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebutable 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 complainant"..............."when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own".9
13. In 2019 (5) SCC 418 - (Basalingappa Vs Mudibasappa), it is held that applying the definitions of "proved" or "disproved" in Sec.4 of Evidence Act to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. It is further held that whereas prosecution must prove the guilty of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". Inference of preponderance of probabilities can be drawn not only from the materials on record by the parties but also by reference to the circumstances upon which accused relies."
14. It is the case of the complainant that the accused purchased goods from the complainant company worth of Rs.22,65,507/- and that towards said liability of 10 part payment, the accused issued Ex.P2 to P7-cheques in favour of the complainant. On the other hand, it is the defence of the accused that she has not issued Ex.P2 to P7-cheques and that said cheques do not bear her signatures. It is further defence of the accused that her husband signed on Ex.P2 to P7-cheques during his life time. It is further defence of the accused that accused no.1 firm purchased goods from the complainant company on credit basis and such due amount was paid within 30 days. It is further defence of the accused that after her husband died in road traffic accident on 1.1.2018, she discontinued going to her office till June 2018. It is further defence of the accused that when she started going to office in June 2018, the complainant company approached her and disclosed her that a sum of Rs.30 lakhs was outstanding from the accused firm and that the complainant company would present the cheques which were with complainant company. It is further defence of the accused that she replied that she can give only Rs.5 lakhs to the complainant company and handed over three signed blank cheques to the complainant company and agreed to pay said sum of Rs.5 lakhs in three installments i.e in August 2018, September 2018 and October 2018. It is further defence of the accused that on 1.9.2018, she transferred a sum of Rs.2,50,000/- to complainant 11 company through RTGs. However, the complainant company presented one of such cheques without intimation to her and the said cheque came to be dishonored and the complainant company filed complaint in C.C. No.58549/2018 against her on the basis of said cheque. It is further defence of the accused that since the complainant filed such case against her, she did not pay balance amount of Rs.2,50,000/- to the complainant, but she is bound to pay the said sum of Rs.2,50,000/- only.
15. I have meticulously gone through the complaint and evidence on record. It is specific case of the complainant (as can be made out from the statutory notice, complaint and examination-in-chief of CW.1) that the accused no.1 firm purchased different types of clothes worth Rs.22,65,507/-. However the complainant has produced Ex.P25 to P33-invoices and if sum total of said invoices is calculated, it comes to Rs.28,19,503/-. Further CW.1 has deposed on page 12 of his cross-examination that as per Ex.P34 Ledger Account Statement, a sum of Rs.26,65,507/- was outstanding from accused as on 7.3.2018. CW.1 has further deposed that a sum of Rs.22,65,507/- was outstanding from the accused as on 20.8.2018. CW.1 has volunteered to state that since the accused had made some payments during the said period, the outstanding amount was Rs.22,65,507/- in August 12 2018. But It is pertinent to note that such payments made by the accused during said period are not disclosed in Ex.P34 Ledger Account Statement. Furthermore, it is clear from discussion made in Ex.D7-judgment in C.C.No.58549/2018 that this court has held that the accused paid Rs.2,50,000/- to the complainant company on 1.9.2018 through RTGs. However the payment of Rs.2,50,000/- made on 1.9.2018 is not taken into consideration in Ex.P34 Ledger Account Statement. Hence Ex.P34 account ledger statement produced by the complainant does not inspire confidence of this court and is not sufficient to prove the claim of the complainant.
16. Even though total sum of Ex.P2 to P7-cheques comes to Rs.24,48,762/-, it is not disclosed in Ex.P34 ledger account statement that a sum of Rs.24,48,762/- was outstanding from the accused. Even Ex.P35 and P37-e-mail correspondence between the complainant company and accused do not disclose that a sum of Rs.24,48,762/- is outstanding to complainant company from the accused. On the other hand, Ex.P35 communication particularly e- mail dtd.20.8.2018 addressed by representative of the complainant company shows that a sum of Rs.22,65,507/- was outstanding from the accused to the complainant in August 2018. Cw.1 has tried to explain in para 13 of his cross-examination that after calculating overdue interest 13 on outstanding amount, it comes to Rs.24,48,762/-. However there is no entry in Ex.P34-ledger account statement regarding charging of any overdue interest on the delayed payments. On the other hand Ex.P34 register account statement shows that amount are credited to the account of accused on the basis of purchases etc., while amounts are debited on the said account on the basis of payments made by the accused firm and on the basis of debit note etc. There is no entry regarding charging of overdue interest or penalty on the outstanding amount in the said account ledger statement. Even Ex.P35 and P37 e-mail communications do not show that accused and complainant had agreed that any overdue interest or penalty would be imposed or charged on the outstanding amount. The complainant company also not produced any other documentary evidence to show that complainant company and accused firm agreed that overdue interest or penalty will be charged or imposed on the outstanding amount, if there is any delay in payment of invoice amounts. Even Ex.P25 to P33-invoices do not contain any term or condition that interest or penalty will be charged or imposed on the invoice amount if there is any delay in payment of such amounts. Therefore the complainant company has utterly failed to prove that it is entitled to impose or charge overdue interest or penalty on the 14 oustanding amount for the delayed payments of invoice amounts. Hence, when as per the complainant company itself, the outstanding amount from the accused is Rs.22,65,507/- in August 2018, there is no legally enforceable debt or liability in favour of the complainant from the accused to the extent of Rs.24,48,762/-. Hence Ex.P2 to P7-cheques for total sum of Rs.24,48,762/- cannot be maintained under law.
17. It is specific defence of the accused that the signatures on Ex.P2 to P7-cheques are not her signatures and that she has not given said cheques to the complainant company. The accused has produced Ex.D1- cheque which is subject matter of C.C No.58549/2018 filed by the complainant company against the accused. On comparing the signature on Ex.D1-cheque with the signatures on Ex.P2 to P7-cheques through bare eyes, it is clear that signatures on Ex.P2 to P7-cheques are entirely different from the signature on Ex.D1-cheque. Further it is clear from para 12 of complaint and para 10 of examination-in-chief of Cw.1 that it is the case of complainant that accused issued Ex.P2 to P7-cheques on 10.12.2018. However it is clear from e-mail dtd.24.1.2018 addressed by representative of the complainant company (Ex.P37) that the complainant company admitted that the complainant company was in possession and custody of 15 Ex.P2 to P7-cheques in January 2018 itself and it is communicated to accused that the complainant company has not deposited the said cheques. Therefore it is clear that the accused has not issued Ex.P2 to P7-cheques on 10.12.2018 as claimed by the complainant but the complainant company was in possession and custody of these cheques in January 2018 itself. CW.1 has also admitted during cross-examination that husband of accused No.2 died in road traffic accident on 1.1.2018. Therefore the difference in signatures in Ex.D1 and Ex.P2 to P7-cheques and the possession and custody of Ex.P2 to P7-cheques with complainant company in January 2018, probabalizes the defence of the accused that the husband of accused no.2 signed on Ex.P2 to P7-cheques and handed over the same to the complainant company during his life time I.e before 1.1.2018. It is not clear if the complainant company is in possession and custody of Ex.P2 to P7-cheques in January 2018 itself, what prevented the complainant company to file this complaint on the basis of these cheques till February 2019. It is pertinent to note that the complainant company had already filed C.C.No.58549/2018 against the accused before this court and that the said complaint came to be dismissed on 1.4.2019. It is also clear that the said C.C.No.58549/2018 was filed on 12.10.2018 on the basis of another cheque of 16 the accused. If the complainant company can file C.C.No.58549/2018 against the accused on the basis of cheque of the accused, nothing prevented the complainant company to file complaint on the basis of Ex.P2 to P7- cheques at the earliest, at least at the time of filing C.C.No.58549/2018. It is highly imprabable that when the complainant company has filed C.C.No.58549/2018 on 12.10.2018, the accused issued Ex.P2 to P7-cheques on 10.12.2018. Therefore the materials on record and discrepancy in the case of the complainant are sufficient to probabalize the defence of the accused and to rebut the presumption U/s. 139 of N.I. Act .
18. Counsel for accused has contended that CW.1 is not duly authorized by the complainant company to file this complaint and to give evidence in this case and as such the present complaint is not maintainable and that complainant company is not entitled to recover the cheque amount in this case. In this regard, counsel for accused relied upon decision in Crl. Appeal No.2653/2008 - (M/s.Canara Workshops Ltd., Vs Mantesh).
19. However above said contention of counsel for the accused cannot be accepted because the complainant has produced Ex.P1 which is copy of Resolution passed by the Board of Directors of the complainant company on 9.10.2018. It shows that the said Board of Directors in the 17 said meeting authorized CW.1 -Rajkant Shetty for handling all the matters for recovery of dues by or against the complainant company and to represent complainant company in all Courts/Tribunals of India (Civil and Criminal). No doubt the case number of the present complaint is not specifically mentioned in Ex.P1 and even the name of present accused is not specifically mentioned. However Ex.P1 Resolution is general in nature and includes all cases, criminal or civil, by complainant company for recovery of oustanding amount. Therefore the present complaint is also included in those cases. Hence, it can be concluded that CW.1 is authorized by the Board of Directors in the said meeting to file and conduct the present complaint against the accused. Therefore contention of the accused does not hold any water and the above said decision is not helpful to the accused.
20. In view of my above discussion, I am of considered opinion that the accused has established probable defence and successfully rebutted the statutory presumption in favour of the complainant. The evidence on record clearly shows that there is no legally recoverable debt or liability to the extent of cheque amounts I.e Rs.24,48,762/-. The accused also has made out probable defence that the husband of the accused signed and handed over Ex.P2 to P7 cheques to the complainant 18 company prior to his death I.e before 1.1.2018 and that the complainant has not issued Ex.P2 to P7-cheques. As a result, the initial burden of proof is shifted on the complainant who thereafter should establish his case independently. However the complainant has utterly failed to prove his case that the accused are liable to pay to the extent of Rs.24,48,762/-. The evidence on record clearly indicates that the accused are not liable to pay to the extent of the cheque amounts under Ex.P2 to P7. Therefore evidence on record is sufficient to accept the defence of the accused, but is not sufficient to accept the case of the complainant. The complainant has utterly failed to prove that the accused issued cheques in question towards discharge of legally enforceable debt or liability. The complainant has also failed to prove the ingredients of Sec.138 of N.I. Act. Hence the complainant is not entitled any reliefs prayed for in this complaint and accused are entitled to acquittal in this case. Accordingly, I answer point nos.1 & 2 in negative.
21. Point No.3: For the reasons discussed in connection with Point Nos.1 and 2, this court proceed to pass the following......
19
ORDER
Acting under Section 255(1) of Cr.PC
accused are hereby acquitted of the
offence punishable under Section 138 of Negotiable Instrument Act.
The bail bond of accused stands cancelled. Cash security deposited by the accused is ordered to be refunded in her favour through account payee cheque with proper identification in accordance with law, if refund voucher is furnished.
(Dictated to the stenographer, transcript thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 6th Day of January, 2020) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru 20 ANNEXURE Witnesses examined for the complainant:
CW.1 : Mr. Rajkant Shetty
Witnesses examined for the defence:
DW.1 : Smt. Veena
Documents marked for the complainant:
Ex.P1 : Board of Resolution
Ex.P2 to P7 : Cheques
Ex.P8 to P13 : Bank endorsements
Ex.P14 : Legal notice
Ex.P15 to P19 : Postal receipts
Ex.P20 to P24 : Returned postal covers
Ex.P25 to P33 : Tax invoices
Ex.P34 : Ledger account
Ex.P35 : E-mail copy dtd.11.6.2018
Ex.P36 : Certificate U/s.65-B of I.E Act
Ex.P37 : E-mail copy dtd.18.10.2017
Documents marked for the defence:
Ex.D1 : Certified copy of cheque dtd.24.8.18
Ex.D2 : Certified copy of order sheet
Ex.D3 : Certified copy of CC No.58549/18
Ex.D4 : Certified copy of CTS return memo
Ex.D5 : Certified copy of notice
Ex.D6 : Certified copy of returned postal cover
Ex.D7 : Certified copy of judgment dtd.1.4.19.
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU