Bangalore District Court
Indusind Bank Limited vs M/S As Traders on 2 January, 2024
KABC030349422023
IN THE COURT OF THE XL ADDL. CHIEF
METROPOLITAN MAGISTRATE, AT: BENGALURU
Present : Sri. SYED ARFATH IBRAHIM M.,
B.A.L., LL.B.,
XL Addl., Chief Metropolitan
Magistrate, Bengaluru.
DATED THIS THE 2nd DAY OF JANUARY 2024
JUDGMENT U/S 355 OF Cr.P.C.1973
1. Serial number : C.C. No.19633/2023
. Name of the Indusind Bank Limited
complainant Having its office at No.87,
Indusind House, 2nd Floor, Bull
Temple Road, Basavanagudi,
Bengaluru-560 019.
Rep. by its Authorised
Signatory
(By Sri. S.M. Anees Ahmed,
Advocate)
3. Name of the : M/s. AS Traders
accused Represented by its Proprietrix
Ms. Shamshad Banu
Office at Behind Jyothi Theater,
Market Road, Chikkamagalur.
(By Sri. G.M. Jayakumar,
Advocate)
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C.C.No.19633/2023
4. The offence : Section 138 of the N. I. Act
complained of or
proved
5. Plea of the accused : Plead not guilty
6. Final order : Accused found guilty
7. Date of order : 02-01-2024
:J U D G M E N T:
The complainant has lodged this complaint against the accused alleging the commission of offence punishable under the Sec.138 of Negotiable Instruments Act.
2. The case of the the complainant in brief is as under:
The complainant is a registered banking company. It had given credit facility of Rs.50 Crores to M/s. Sanjay Chemicals (India)Pvt. Ltd. However, during the audit the bank officials came to know that there were illegal transactions of about Rs.16 crores sent to four bank accounts. One such bank account to 3 C.C.No.19633/2023 which Rs.4 Crores were sent belongs to the accused herein which was in the same of A.S. Traders. Immediately the complainant bank had requested Indian Overseas Bank to freeze the account and thereby they recovered Rs.3,35,00,000/-. The remaining amount was utilized by the accused. Thereafter the complainant had issued notices to the accused calling upon to return the amount. In order to repay the amount the accused has issued a cheque bearing No.198874 dated 10-11-2022 for a sum of Rs.45,00,000/- drawn on Indian Overseas Bank, Chickmangalur Branch, Bengaluru, in favour of the complainant.
3. The complainant has presented said cheque to the Bank for encashment and it was returned by the Bank unpaid on 31-12-2022 with an endorsement "Exceeds Arrangement". The complainant has issued a notice in writing to the accused on 07-01-2023 making 4 C.C.No.19633/2023 a demand for the said amount of money. The said notice has been served on the accused. Despite demand notice the accused has failed to make the payment of cheque amount. Hence, the accused has committed an offence punishable Sec.138 of Negotiable Instruments Act.
4. After preliminary inquiry, this Court has taken the cognizance of the offence punishable under section 138 of Negotiable Instruments Act against the accused. The accused has appeared through her learned counsel and got released on bail. Plea of the accused has been recorded. The accused has not pleaded guilty but claimed that she has defense to make.
5. The complainant society has got examined its authorised representative as PW-1 and got exhibited 11 documents at Exs.P-1 to P-11.
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C.C.No.19633/2023
6. The statement of accused as contemplated under section 313 of Cr.P.C., is recorded. The accused has denied all the incriminating evidence appearing against her in the evidence. Though she had stated that she is having defence evidence, but she has not adduced any evidence.
7. Heard arguments. During the course of arguments both the parties have filed memo praying to pass judgment on terms of memo. Perused materials placed on record.
8. Points that would arise for the consideration of this court are as under:
1. Whether the complainant proves beyond all reasonable doubts that, the accused in discharge of legally recoverable debt has issued a cheque bearing No.198874, dated 10-11-2022 for Rs.45,00,000/- and the same was dishonoured. Despite demand notice the accused has failed to make the payment 6 C.C.No.19633/2023 cheque amount and thereby committed an offence punishable U/Sec.138 of Negotiable Instruments Act ?
2) What Order?
9. My findings on the above said points as as under:
Point No.1: In the affirmative.
PointNo.2:As per final order, for the following...
REASONS
10. Point No.1: This is a case of the complainant that, it had given credit facility of Rs.50 Crores to M/s. Sanjay Chemicals (India)Pvt. Ltd. However, during the audit the bank officials came to know that there were illegal transactions of about Rs.16 crores sent to four bank accounts. One such bank account to which Rs.4 Crores were sent belongs to the accused herein which was in the same of A.S. Traders. Immediately the complainant bank had requested 7 C.C.No.19633/2023 Indian Overseas Bank to freeze the account and thereby they recovered Rs.3,35,00,000/-. The remaining amount was utilized by the accused. Thereafter the complainant had issued notices to the accused calling upon to return the amount. In order to repay the amount the accused has issued a cheque bearing No.198874, dated 10-11-2022 for Rs.45,00,000/-. Said cheque came to be dishonoured for a reason 'Exceed arrangement'. The demand notice has been served on the accused. Despite demand notice the accused has not paid the cheque amount and thereby committed an offence.
11. To constitute an offence punishable under section 138 of The Negotiable Instruments Act, there must be following ingredients:
1. drawing of the cheque in discharge of debt or liability;
2. presentation of the cheque to the bank; 8
C.C.No.19633/2023
3. returning the cheque unpaid by the drawee Bank;
4. giving notice in writing to the drawer of the cheque demanding payment of the cheque amount;
5. failure of the drawer to make payment within 15 days of receipt of the notice.
12. In order to prove the case, the complainant society has got examined its authorised representative, as P.W.1. He has deposed reiterating the averments of complaint. He has deposed that bank had given credit facility of Rs.50 Crores to M/s. Sanjay Chemicals (India)Pvt. Ltd. However, during the audit the bank officials came to know that there were illegal transactions of about Rs.16 crores sent to four bank accounts. One such bank account to which Rs.4 Crores were sent belongs to the accused herein which was in the same of A.S. Traders. Immediately the complainant bank had requested Indian Overseas 9 C.C.No.19633/2023 Bank to freeze the account and thereby they recovered Rs.3,35,00,000/-. The remaining amount was utilized by the accused. Thereafter the complainant had issued notices to the accused calling upon to return the amount. In order to repay the amount the accused has issued the cheque in favour of the complainant. He has got exhibited 11 documents i.e., the cheque, Bank memos, copy of Demand notice, Postal receipts, Postal acknowledgments and Special Power of Attorney at Ex.P-1 to Ex.P-11.
13. A perusal of Ex.P-1 shows the cheque was issued on 10-11-2022. A perusal of Ex.P-2 shows that it was presented to bank and returned unpaid on 02-01-2023. A perusal of Ex.P-3 shows that the complainant has made a demand for the payment of the cheque amount by giving notice on 07-01-2023, which is within thirty days from the receipt of Ex.P-3. A perusal of Ex.P-10 shows that the Demand Notice has been served on the 10 C.C.No.19633/2023 accused. The complainant has lodged the complaint on 04-02-2023. Therefore, a perusal of the dates of events on Ex.P-1 to P-10, it is clear that the complaint is well within the time of limitation as per the provisions of section 138 of Negotiable Instruments Act.
14. An essential ingredient of section 138 of Negotiable Instruments Act is that the cheque in question must have been issued towards a legally enforceable debt or liability. In this case the accused has not denied the cheque and signature on it. When the execution of cheque is admitted by the accused, by such admission, the presumption under section 118 (a) would arise that it is supported by a consideration. Even under section 139, a rebuttal presumption shall be raised that the cheque in question was issued towards discharge of a legally enforceable debt. These presumptions are rebuttable and the accused can prove non-existence of a consideration by raising a 11 C.C.No.19633/2023 probable defence. Therefore, the onus is on the accused to rebut the presumption available under section 118 and 139 of Negotiable Instruments Act and to show that the cheque in question was not issued towards any legally enforceable debt or liability.
15. Though the counsel for the accused had cross- examined P.W.1, but during the cross-examination the accused also admits that she has received Rs.4 Crores to her account. It was suggested to P.W.1 that Rs.4 Crores was sent to the account of accused due to the mistake of bank officials and she cannot be held responsible for the same. This contention of the accused cannot be considered for the reason that even if the amount was credited to her account due to the mischief or irresponsibility of complainant bank, it was the duty of the accused to intimate the illegal transaction to her banker, but on the other hand the accused utilized the said amount knowing that the 12 C.C.No.19633/2023 amount was not belonging to her. Hence, this contention of the accused cannot be considered. Going by the defense itself this court can come to a conclusion that accused was liable to pay the cheque amount and it was a legally recoverable debt.
16. The complainant by producing documents and through oral evidence has proved the existence of legally recoverable debt and the fact that the accused has issued a cheque at Ex.P-1 in discharge of said debt. On the other hand the accused has failed to rebut the presumption available in favour of the complainant U/s.118 and 139 of N.I.Act.
17. A perusal of documents on record shows that the complaint is presented within the time prescribed U/s.138 and 142 of Negotiable Instruments Act. The cheque at Ex.P-1 is returned by the bank unpaid because of the amount of money standing to the credit 13 C.C.No.19633/2023 of the account of accused is insufficient to honour the cheque. Despite the service of demand notice the accused has failed to make the payment of cheque amount and thereby committed an offence under section 138 of Negotiable Instruments Act.
18. At the time of arguments the complainant and accused have filed a memo stating that the matter has been settled and judgment may be passed in terms of settlement. It is stated that the accused has agreed to repay the amount of Rs.41,00,000/- to the complainant in 6 installments of Rs.3,00,000/-, Rs.2,00,000/-, Rs.7,00,000/-, Rs.9,00,000/-, Rs.10,00,000/- and Rs.10,00,000/- commencing from 05-12-2023 till 20-06-2025.
19. Considering the memo filed by the parties and submissions of learned counsels for complainant and the accused, I deem it proper to grant time to the 14 C.C.No.19633/2023 accused for payment of the amount to the complainant.
20. Therefore, looking to the facts and circumstances of the case I am of the considered view that the complainant has established that the accused has committed an offence punishable under section 138 of Negotiable Instrument Act. Hence, I proceed to answer point No.1 in the affirmative.
21. Point No.2: In view of findings on point No. 1 I proceed to pass the following:-
:O R D E R:
The accused is found guilty. Acting under section 255(2) of Cr.P.C, I hereby convict the accused for the offence punishable under section 138 of The Negotiable Instruments Act. 15
C.C.No.19633/2023 The accused is sentenced to pay fine of Rs.41,00,000/- (Rupees forty One Lakh only) as per the joint memo. In default of payment of fine she shall under go simple imprisonment for a period of six months.
On deposit, the same shall be paid to the complainant as a compensation.
The bail bond and surety bond of the accused stands canceled after appeal period is over.
The office to supply the copy of judgment to the accused forth with, free of cost.
(Dictated to the stenographer directly on the Computer, script revised, corrected and then signed and pronounced by me in the open court on this the 2nd day of January 2024.) Digitally signed by SYED SYED ARFATH ARFATH IBRAHIM MUKTHAR IBRAHIM MUKTHAR Date: 2024.01.02 17:38:35 +0530 (SYED ARFATH IBRAHIM M.) XL Addl., Chief Metropolitan Magistrate, Bengaluru.
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C.C.No.19633/2023 :A N N E X U R E:
List of witnesses examined on behalf of Complainant:
P.W-1. Aslam Pasha.
List of documents masrked on behalf of Complainant:
Ex.P-1 Cheque Ex,P-2 & 3 Bank Memos Ex.P-4 Copy of Demand notice Ex.P-5 to 7 Postal receipts Ex.P-8 to 10 Postal acknowledgments
Ex.P-11. Special Power of Attorney. List of witnesses examined on behalf of defence:
Nil.
List of documents marked on behalf of defence:
Nil.
XL Addl., Chief Metropolitan Magistrate, Bengaluru.