Bangalore District Court
Rane T4U Private Limited vs M/S. Goodsmover Technologies on 4 January, 2021
IN THE COURT OF THE XX ADDITIONAL SMALL CAUSES
JUDGE AND ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE AND M.A.C.T., BENGALURU (SCCH-22)
PRESENT : Smt.Shakunthala.S.,
B.A.., LL.B.
XX Addl. Small Causes Judge
and A.C.M.M., Bengaluru.
DATED : This the 4th Day of January 2021.
C.C. NO.1250/2018
Complainant - Rane t4u Private Limited.,
Formely known as
'Telematics4u Services Private Limited',
A Company incorporated under the
Provisions of Companies Act,
having its registered office at No.9,
1 Main Road, New BEL Road,
Sanjaynagar,
Bangalore-560094,
Represented by its Legal
Counsel(Consultant) and duly
authorized signatory
Mr. Shiek Abdul Haseeb.
(Rept: By Sri.H.Mujtaba., Advocate)
- Versus -
Accused - 1. M/s. Goodsmover Technologies.,
A partnership firm, having its
Principal Place of business at
No.31, 'Nanda Arcade',
Shankar Mutt Road/ Vani vilas Road,
Basavanagudi,
Bangalore-560004.
Represented by its Managing Partner
Mr. N.Gopala Krishna
SCCH-22 2 CC No.1250/2018
2. Mr. N.Gopala Krishna.,
Partner,
M/s. Goodsmover Technologies,
Residing at 'Sri. Govinda Prasadam,
No.31, Shankar Mutt Road,
Basavanagudi,
Bangalore-560004.
3. Mrs. G.Nandini.,
Partner,
M/s. Goodsmover Technologies,
Residing at 'Sri. Govinda Prasadam,
No.31, Shankar Mutt Road,
Basavanagudi,
Bangalore-560004.
4. Mrs. G.Sudhir.,
Partner,
M/s. Goodsmover Technologies,
Residing at 'Sri. Govinda Prasadam,
No.31, Shankar Mutt Road,
Basavanagudi,
Bangalore-560004.
5. Mrs. C.V.Kumar,
Partner,
M/s. Goodsmover Technologies,
No.31, 'Sri. Nanda Arcade',
Shankar Mutt Road,
Vani Vilas Road, Basavanagudi,
Bangalore-560004.
(Rept :By Sri.Kashyap N. Naik, Advocate)
Dated of Institution : 02.03.2018
The offences complied : Under Sec.138 of the
off or proved Negotiable Instrument Act
SCCH-22 3 CC No.1250/2018
Plea of the accused : Pleaded not guilty
Date of commencement : 16.08.2019
of recording evidence.
Final Order : Accused is Convicted
Date of such order : 04.01.2021
(SHAKUNTHALA.S.)
XX ADDL.S.C.J. & A.C.M.M.,
BENGALURU.
:: JUDGMENT ::
Complainant filed this complaint against the accused under Section 200 of Cr.PC for the offence punishable under Section 138 of Negotiable Instrument Act.
2. The brief facts of the complainant case are as follows; Complainant being company engaged in the business of providing technology enabled software, services etc. Accused no.1 is a partnership firm. Accused no.2 and 3 to 5 are managing partners and are partners of accused no.1 company. Accused no. 2 to 5 being managing partners and partners of accused no.1 are being responsible for the day to day affairs, administration and business of the accused no.1 firm.
3. Accused no.1 company represented by its Manager Partner SCCH-22 4 CC No.1250/2018 accused no.2 entered in to memorandum of understanding dated 14.09.2007 with M/s. Vidwath consulting a partnership firm, where both the accused and the said M/s. Vidwath consulting agreed to collaborate for setting up a Telematics service provider business at Bangalore. The memorandum of understanding dated 14.09.2007 was assigned by the said M/s. Vidwath Consulting in favour of the complainant company with concurrence of accused no.1 firm by virtue of the business partnership agreement addendum dated 01.04.2009 to which the accused no.1 also a party.
4. From the date of said assignment complainant was providing the services to accused no.1 firm as enumerated under the memorandum of understanding which was duly assigned in its favour. In relation to the said services provided by it periodically every month, company used to issue invoices to the accused and accused have making payments in terms of the said invoices issued by the complainant company.
5. Since June 2015 abruptly they stopped making payments without any rhyme or reason though the invoices for every month were issued and being acknowledged. The total outstanding in relation to the services rendered for the period from June 2015 till October 2017 was SCCH-22 5 CC No.1250/2018 Rs.51,27,561/-. Though time and again the accused no.1 by its partners accused 2 to 5 assured that they would clear the said invoices by making payment of the said outstanding amount of Rs.51,27,561/-, payable by them in relation to the services rendered by the complainant in their favour but have not been paid the same.
6. On 10.02.2016 accused no.4 namely Mr. G.Sudhir partner of accused no.1 for and on behalf of accused no.1 firm attended a meeting with the officials of complainant and in the said meeting have admitted, confirmed and accepted that they have not paid the outstanding dues and as on February 2016 the total outstanding dues were Rs.35,63,532/-. In the said meeting they undertook to clear the entire outstanding and assured, the balance would be cleared in due course. Based on the said assurances and promises, continued to render its services with them, but accused persons never kept up their promises and assurances and continued default. There are total outstanding dues till October 2017 is Rs. 51,27,561/-.
7. They approached them with a request to clear the outstanding dues, but they used to postpone the same on one pretext or the other. After persistent request and follow up action ultimately, towards the part payment of total outstanding of Rs.51,27,561/- issued two cheque SCCH-22 6 CC No.1250/2018 bearing numbers 000915 dated 10.01.2018 for Rs.10,00,000/- and cheque bearing no. 000916 dated 10.01.2018 for Rs.5,00,000/- both cheque were drawn on HDFC Bank, R.V.Road, branch, V.V.Puram, Bangalore..
8. After accepting the said cheques presented through its banker HDFC Bank, RMV 2nd stage, Branch, Bangalore. But the said cheques were dishonoured for the reason 'Stop Payment' but failed to repay the cheque amount.
9. Thereafter got issued demand notice on 24.01.2018 calling upon them to pay the said sum covered under two cheques. The notice was duly served upon them, in spite of service of notice they failed to repay the cheque amount. On the contra issued a reply dated 09.02.2018 with an untenable contention. However they have not complied the demand made under the notice and thereby committed an offence punishable Under Sec.138 of N.I. Act. Hence, this complaint.
10. In response to the summons, they have appeared through counsel and enlarged on bail. The substance of accusation was recorded and read over by my learned predecessor, they pleaded not guilty and claim to be tried.
11. Complainant in order to establish its case one Sheik Abdul SCCH-22 7 CC No.1250/2018 Haseeb., legal consultant got examined himself as PW.1 and in support of oral evidence got marked 52 documents at Ex.P1 to Ex.P52. Thereafter accused have raised their defence during cross-examination of PW.1. The statement of accused persons as required under Section 313 of Cr.P.C was recorded and read over to them, for which they denied the incriminating materials as false and accused no.4 got examined on his behalf and on behalf of other accused persons as DW.1 and in support of oral evidence got marked 6 documents at Ex.D1 to Ex.D6.
12. Heard arguments. Notes of arguments also filed by complainant and in support of arguments relied upon the decisions reported in (2010) 3 SCC 83 between Mandvi Co-operative bank ltd Vs Nimesh B Thakore, 1971 (2) SCC 617 between M/s. between M/s. Bareilly Electricity Supply Co.Ltd versus The Workmen and others, AIR 1983 BOMBAY 1 between Om Prakash Berlia and another plaintiffs Vs Unit Trust of India and others defendants, (2015) 9 SCC 755 between , Umaswamy versus Ramanath reported in III (2007) BC 211 and (1998) 3 SCC 249 between M/s. Modi Cements limtied vs Shri Kuchil Kumar Nandi. So also, counsel for accused have filed memo with citations reported in (2013) 3 SCC 86 between Vijay Vs SCCH-22 8 CC No.1250/2018 Laxman and another, Afzal Pasha V Mohammed Ameerjan, passed by the Hon'ble High Court of Karnataka at Bengaluru in Criminal petition No. 1684 of 2016, in 2018 SCC online Mad 5124 between E.Dhanuskodi Vs D.Sreedhar, 2001 SCC online Mad 922: (2001) 105 Comp case 186: (2002) 1 BC 99 between Angu Parameshwari Textiles
(p) Ltd and others Vs Sri. Rajam and Co, 2003 SCC online AP 1208 between Avon Organics Ltd Vs Pioneer Products Ltd, 2008 SCC online Ker 254 between Joseph Sartho Vs G.Gopinathan.
13. On perusal of oral as well as documentary evidence the points that arise for my determination are as follows:
1) Whether the complainant proves that Ex.P35 and Ex.P36 cheques have been issued by the accused persons towards discharge of legal liability and the same were dishonored on their presentation for the reason "Stop payment" and further complied the mandatory provisions of Sec. 138 (a) to (c) of N.I.Act and further the complainant proves beyond doubt that the accused have without having sufficient funds in it's account, issued cheques towards discharge of liability and failed to make good to the complainant after its dishonour within stipulated period and thereby, committed an offence punishable under section 138 of N.I.Act?
2. What Order?
SCCH-22 9 CC No.1250/2018
14. My answer to the above points are under :
Point No.1 - In the Affirmative
Point No.2 - As per final order for the
following
:: REASONS ::
POINT No.1:-
15. Under Section 138 of the N.I Act the offence will complete only if the mandatory provisions of Sec. 138 (a) to (c) are complied, when the cheques was issued towards discharge of legal liability and it was dishonoured in the credit of the accused.
16. In this context, complaint averments reveal that the accused no.2 to 5 being managing partners and partners of the accused no.1 wherein the accused no.1 represented by its managing partners accused no.2 entered in to memorandum of understanding on 14.09.2017 with M/s. Vidwath consulting a partnership firm and the said M/s. Vidwath consulting firm agreed to collaborate for setting up a Telematics service provider business, accordingly the said memorandum of understanding dated 14.09.2007 was assigned by in favour of the complainant with concurrence of accused no.1 firm by virtue a business partnership agreement addendum dated 01.04.2009 to which accused no.1 is also a party. In relation to the service provider to SCCH-22 10 CC No.1250/2018 accused no.1 firm as per MOU complainant used to issue invoices wherein accused persons making payment in terms of invoices.
17. Since the month of June 2015 they abruptly stopped making payments without reasons and they are in total outstanding from June 2015 till October 2017 was Rs.51,27,561/-. Accused no.2-5 represented accused no.1 assured the clearance of said invoices by making payment, in this regard on 10.02.2016 the accused no.4 attended a meeting on behalf of accused no.1 there also admitted and confirmed the outstanding dues and also under took to clear the entire outstanding amount. But as agreed failed to make payments and after demand issued two cheques for Rs.10,00,000/- and Rs.5,00,000/- respectively and when presented the said cheques dishonoured for the reason stop payment. Thereafter got issued demand notice on 24.01.2018, it was served, they replied with untenable contentions but failed to make payment.
18. The same has been reiterated by the Legal consultant and the authorized signatory one Sheik Abdul Haseeb , as PW.1 in his affidavit filed in lieu of his examination-in-chief and in support of oral evidence got marked Board Resolution at Ex.P1, memorandum at Ex.P2, Partnership agreement at Ex.P3, 22 - Invoices at Ex.P4 to SCCH-22 11 CC No.1250/2018 Ex.P25, 4 -Statement of Accounts at Ex.P26 to Ex.P29, board decision at Ex.P30, Statements at Ex.P31 to Ex.P34, cheque at Ex.P35, signature of accused at Ex.P35(a), cheque at Ex.P36, signature of accused at Ex.P36(a), two Endorsements at Ex.P37 and Ex.P38, Notice at Ex.P39, 5-Postal receipts at Ex.P40 to Ex.P44, 3- endorsements at Ex.P45 to Ex.P47, 2-postal covers at Ex.P48 and Ex.P49, two legal notices at Ex.P48(a), Ex.P49(a), reply at Ex.P50, authorized letter at Ex.P51, incorporation certificate of the company at Ex.P52.
19. In order to rebut the case of complainant accused raised his defence during cross-examination of PW.1 as well as in his evidence that he is not disputing neither the transaction nor issuance of cheques but it is their contention that the cheques were issued during 2016 relating to the transaction entered in to between them during 2016 and the said transaction was already closed. Ex.P35 and Ex.P36 cheques were issued not for repayment of any debt, but only issued as a security in respect of the transaction that is the prior transaction of 2016 but it was already closed. Such being the thing there is no enforceable debt and existence of legally enforceable debt, under the said cheques. In spite of it the said cheques have been got misused by the complainant SCCH-22 12 CC No.1250/2018 which were issued as a security only accordingly no liability and the said cheques issued blank by putting signature without any date except mentioning the amount in figures. According to accused they have not denied the acknowledgment as well as issuance of invoices by the complainant. The same has been suggested to PW.1 which have been not admitted by PW.1.
20. Further it is the contention of accused that when Ex.P35, Ex.P36 cheques were issued as a security the complainant ought to have issued prior intimation and notice to be given to them but without such prior intimation or notice got presented the cheques. There is no transaction under Ex.P2 between them but it was between them and M/s. Vidwath consulting wherein complainant is not at all a party. Further as per Ex.P3 dated 01.04.2009 and in respect of Ex.P2 which is with M/s. Vidwath consulting, as such all the payments shall be made to M/s. Vidwath consulting only. Further the notice was replied and already informed that all the debts already cleared during 2017 itself and no documents produced to prove that they are liable to pay Rs.51,27,561/-. Though the complainant claimed such huge amount but they have paid Rs. 63,00,000/-. As provided under Section 141 of NI Act the partners are not liable as accused no.5 not at all residing at SCCH-22 13 CC No.1250/2018 Bangalore, as such there is no existence of recoverable debt and no rate fluctuation in invoices. Though it has been suggested to PW.1 which have also been denied by PW.1.
21. To rebut the case of complainant accused no.4 got examined himself as DW.1 and he also sworn to in his affidavit filed in lieu of his examination in chief and in support of his defence got marked 11 counter foil of the cheques at Ex.D1, email communication at Ex.D2, certificate under Section 65(4) of Indian Evidence Act, 1872 at Ex.D3, statement of account at Ex.D4, stop payment instructions at Ex.D5, ledger account at Ex.D6.
22. Even though raised the above contention but during cross-examination DW1 not denied the suggestion made to him by the complainant wherein the burden is on the accused persons to rebut the case of complainant particularly Ex.P35, Ex.P36 cheques have been issued in relation to the transaction mentioned in Ex.D2 wherein DW.1 specifically admitted that there is no reference of Ex.P35, Ex.P36 numbers in Ex.D2, accordingly accused failed to rebut Ex.P35 and Ex.P36 cheques have been issued in connection to Ex.D2.
23. Further the accused specifically and unequivocally admitted the suggestion made to him during cross-examination that SCCH-22 14 CC No.1250/2018 Ex.P35 and Ex.P36 have been issued in discharge of part payments in respect of the transaction and the outstanding with the complainant in page no. 3, para 5, and at this stage it is relevant to mention the same that;
"It is true to suggest that Ex.P35 and Ex.P36 have been issued in partial discharge of debt by the accused".
24. It is also admitted by DW.1 in respect of recovery of 51,27,561/- the complainant already lodged a commercial suit for which they have not taken any legal action nor issued any notice as according to accused persons complainant got misused Ex.P35 and Ex.P36 cheques which were issued as a security during 2016 wherein the said transaction was already cleared. If at all Ex.P35 and 36 cheques issued relating to the transaction of 2016 as contended by them and if the said transaction was cleared during 2016 itself then what made them to proceed against the complainant for holding the instruments on the other hand if at all the said cheques misused that to after clearance of the transaction can any body kept quit without taking any action and no documents produced by the accused persons to prove about the transaction if closed during 2016 and even not made any efforts in this regard. If at all Ex.P35 and Ex.P36 as per Ex.D2 SCCH-22 15 CC No.1250/2018 issued in 2016 but during cross-examination he admitted that there is no reference in respect of cheque numbers in Ex.D2 and what made the accused persons not mentioning the cheque number if at all Ex.P35 Ex.P36 are issued for which also nothing has been produced. On the contra when DW1 himself admitted that Ex.P35 and Ex.P36 issued in discharge of part payment of the debt. Such being the thing the contention of accused persons that the said cheques issued as a security in respect of the transaction which was cleared during 2016 not holds good.
25. According to accused they have made payment under Ex.D6. Even though they raised the said contention but complainant not denied the payment made by them under Ex.D6. On the contra it is their specific contention that till 2015 there is no dispute and only during 2015 they failed to make payment regularly. Moreover as per Ex.P30 a confirmation of outstanding as on 10.02.2016 and as per Ex.P30 on the assurance that to accused no.4 who represented accused no.1 firm agreed, accordingly the services also continued with the complainant company. Further as per Ex.P26 which clearly establishes the credit made to the complainant during August which clearly establishes the transaction continued between them. SCCH-22 16 CC No.1250/2018
26. Even though the accused persons contended that the account relating to Ex.P35 and Ex.P36 was stopped and about the same intimated to the complainant but during cross-examination admitted that they have not made any written communication to the complainant requesting to return Ex.P35 and Ex.P36 cheques and also admitted that they have no occasion to request to return the cheques during 2016 or 2017 and also admitted that the complainant has no any role in respect of alleged stop payment and also DW.1 admitted that the transaction between them and the complainant is continuing. Such being the thing the accused persons have failed to prove the circumstances under which the complainant holds the instrument on the other hand, even though Ex.P37 and Ex.P38 returned for the reason stop payment but the said stop payment made on 03.04.2018 as per Ex.D5 which is dated 14.03.2017 and the present complainant was filed on 02.03.2018 and Ex.P39 which is dated 24.01.2018 as such Ex.D5 issued after filing present complaint and after service of legal notice. If at all Ex.P35 and Ex.P36 are with the complainant who holding the said instruments but according to accused persons the transaction was continued with them. Such being thing can any body kept quiet by leaving blank cheques that to after completion of the transaction.
SCCH-22 17 CC No.1250/2018
27. Further more the payments also made to complainant even after issuance of the cheques accordingly accused have failed to rebut the case of complainant and on perusal of oral as well as documentary evidence the dispute between them is only from August 2017 and became defaulters and stop payment was made during 2018 and accused have failed to prove that as on the date of stop payment there was sufficient fund in the account. Hence accused also failed to prove that Ex.P35 and Ex.P36 cheques have been issued as a security in the existence of specific admission of DW.1 during cross-examination.
28. On the other hand the oral as well as documentary evidence Ex.P1 to P52 and the cross-examination of DW.1 when he specifically admitted the case of complainant which probabalises the case of complainant. Accordingly in the existence of documentary evidence as well as the suggestion made to PW.1 and the evidence of DW.1 as well as his admission, even though they raised the defence but not established nor rebuted their case by producing convincing evidence and though they raised their defence but under Section 138 of NI Act it is very clear that the cheques were issued in discharge of liability accordingly the defence raised by them is not probable to believe and failed to rebut the case of complainant. On the other hand Ex.D2, SCCH-22 18 CC No.1250/2018 Ex.P3 Ex.P2 Ex.P10, Ex.P26, Ex.D6 clearly discloses the transaction between them as well as issuance of cheques.
29. Further under Section 138 of N.I Act offence will complete only if the mandatory provisions of Section 138 (a) to (e) N.I Act are complied, that the cheques were issued towards discharge of legal liability and was dishonoured for stop payment. Ex.P35 and Ex.P36 cheques dated 10.01.2018 and the said cheques returned for the reason stop payment as per endorsement at Ex.P37 and Ex.P38. The documents reveal that the cheques have been presented within 3 months from the date of issue and legal notice was issued on 24.01.2018, which is within time limit from the date of dishonour. The said notice was dully served to them and from that date within the stipulated period the complaint came to be filed.
30. On perusal of oral as well as documentary evidence as well as the suggestions made to PW.1 itself clearly indicates that there is no dispute in respect of signature on Ex.P35(a), Ex.P36(a) cheques itself is a proof to hold that Ex.P35 and Ex.P36 belonged to accused and at the time of presentation of the cheques were returned for the reason stop payment without any sufficient fund to honour. Therefore, I am of the view that the complainant complied all the mandatory provisions SCCH-22 19 CC No.1250/2018 of Section of 138 (a) to (c) of N.I.Act.
31. Since the accused having failed to make good to the complainant within stipulated period, have committed an offence punishable under Section 138 of the N.I Act. There is no contra evidence available on record to over come Section 118 and 139 of N.I.Act. Accordingly, I hold that the accused have found guilty of the offence punishable under Section 138 of N.I.Act, hence I answer point No.1 in the affirmative.
32. POINT No.2: In view of the above discussion, I proceed to pass the following:
:: ORDER ::
Accused No.1 to 5 are convicted for the offence punishable under section 138 of the N.I.Act by acting U/ sec. 255 (2) of Cr.P.C and accused No. 2 to 5 are sentenced to pay a fine of Rs. 16,00,000/ (Sixteen Lakh only). In default to pay fine, accused No. 2 to 5 shall undergo simple imprisonment for a period of one year.
Further acting U/Sec. 357 (1)
(b) of Cr.P.C on recovery of entire fine amount of Rs.16,00,000/ shall be paid to the complainant as compensation.
The bail bond and surety bond of the accused No. 2 to 5 shall stand cancelled.
SCCH-22 20 CC No.1250/2018
Supply a free copy of the judgment to the accused No. 2 to 5 with due endorsement.
(Dictated to the stenographer, transcribed by her, corrected by me and then pronounced in the open court on this the 4th day of January 2021.) (SHAKUNTHALA.S) XX A.S.C.J. & A.C.M.M., Bengaluru.
:: ANNEXURE ::
List of witnesses examined on behalf of the complainant:
P.W.1 - Sri. Sheik Abdul Haseeb List of witnesses examined on behalf of the accused:
D.W.1 - Mr. Sudhir List of documents marked on behalf of the complainant:
Ex.P.1 - Board Resolution
Ex.P.2 - Memorandum
Ex.P.3 - Partnership agreement
Ex.P4 to 25 - 22 Invoices
Ex.P26 to 29 - 4 Statement of accounts
Ex.P30 - Board decision
Ex.P31 to 34 - Statement
Ex.P.35 - Cheque
Ex.P.35(a) - Signature of accused
Ex.P.36 - Cheque
Ex.P.36(a) - Signature of accused
Ex.P.37 & 38 - Two Bank Endorsements
Ex.P39 - Legal notice
Ex.P40 to 44 - 5 Postal receipts
Ex.P.45 to 47 - 3 Endorsements
Ex.P.48 & 49 - 2 postal covers
Ex.P.50 - Reply
Ex.P.51 - Authorized letter
SCCH-22 21 CC No.1250/2018
Ex.P.52 - Incorporation of certificate
List of documents marked on behalf of the accused:
Ex.D1 - 11 counter foil of the cheque
Ex.D2 - E-mail communication between accused and
complainant
Ex.D3 - Certificate under Section 65(4) of the Indian
Evidence Act, 1872
Ex.D4 - Bank account statement
Ex.D5 - Stop Payment instructions letter issued to HDFC
Bank issued the accused
Ex.D6 - Ledger account
(SHAKUNTHALA.S.)
XX A.S.C.J. & A.C.M.M.,
BENGALURU.