Bangalore District Court
No.16 vs Name Of Advocate For : Sri.Nc on 27 February, 2017
IN XLI ADDL. CHIEF METROPOLITAN
THE COURT OF THE
MAGISTRATE BANGALORE CITY
DATED THIS THE 27TH DAY OF FEBRUARY, 2017
PRESENT; SRI.A.SAMIULLA, B.Sc., LL.B.,
XIX Addl SCJ & MACT.
1. Sl.No. of the Case : C.C.No.18336/2014
2. The date of commission : 28.2.2014 the date of
of offence dishonour of cheque.
3. Name of the : Mahaveer Specialties,
Complainant No.16, 1st Floor, H.Siddaiah
Road, Bangalore-02. R/by his
partner Sri.OM Prakash,
S/o Deep Chand Bandari,
52 years.
4. Name of the Accused. : M/s. ECO-MAC Remedies
Private Limited, 11th Floor,
Tower No.1, India Bulls Finance,
Finance Centre, S.B. Road,
Eliphinstone, Mumbai,
Maharastra-13, R/by its
director Sri.Ratilal Raka.
5. The offence complained : u/S 138 of Negotiable
of or proved. Instruments Act.
6. Plea of the Accused. : Pleaded not guilty.
SCCH-17 2 C.C.NO.18336/14
7. Final order. : Accused is acquitted.
8. Date of such order. : 27.02.2017.
9. Name of Advocate for : Sri.NK.
accused.
10. Name of Advocate for : Sri.NC.
complainant.
J U D G M E N T
Complaint is filed under Section 200 of CrPc for the offences punishable under Section 138 & 142 of Negotiable Instruments Act, 1881.
2. The factual matrix leads to the filing of complaint is that, the accused issued a cheque bearing No.306115 for Rs.10,00,000/- dated 30.11.13 drawn on Union Bank of India, Abdul Rahaman Street Branch, Mumbai, Maharastra-03 towards the repayment of security deposit. On presentation of cheque for realization at ING Vysya Bank, VV Puram, SCCH-17 3 C.C.NO.18336/14 Bangalore-14, it returned unpaid as per return memo dated 28.2.14 for want of funds, which was orally intimated to the accused and also through legal notice dated 28.3.14 calling upon it to pay the cheque amount within 15 days from the date of receipt of notice. Said notice presumed to be served as the postal acknowledgment/RPAD cover did not return to the sender. Accused failed to discharge the cheque liability. Hence complaint is filed on 14.5.14 to take suitable action against the accused.
3. Having received the complaint in PCR 7786/14, the Predecessor in office took cognizance of the offence and having satisfied with the prima facie allegations, issued process to the accused. In response to it, accused appeared SCCH-17 4 C.C.NO.18336/14 and obtained bail. He denied accusation and offered to make defence.
4. To bring home the guilt of accused, the Partner of complainant was examined as Pw.1 and documents Ex.P1 to 7 were marked. On closure of evidence of complainant, the Director of accused Company was examined u/S 313 Crpc and he denied the complainant's evidence as false and adduced his evidence by examining himself as D.w.1 and document Ex.D1 was marked.
5. Heard arguments from both sides. Complainant filed written arguments.
6. Following points arise for consideration:
Point-1: Whether complainant proves beyond doubt that the accused issued a cheque dated 30.11.13 for a sum of Rs.10,00,000/-
drawn on Union Bank of India, Abdul Rahaman Street Branch, Mumbai, SCCH-17 5 C.C.NO.18336/14 Maharastra in order to discharge legally enforceable debt and on presentation of said cheque it returned for want of sufficient funds & despite receiving the notice, accused failed to make payment within stipulated time and thereby committed an offence punishable u/S 138 of NI Act?
Point-2: What order?
7. Answer to the above points is as follows;
Point-1: Negative.
Point-2: As per final order for the following;
REASONS
8. Point-1: This Court issued process to the accused and in response to it, he appeared and proceeds with the trial, as such there is no need to go back again to reconsider the compliance of provisions of Section 138 of NI Act.
9. It is worth to note that, whenever a private complaint is filed seeking prosecution of the accused for an offence SCCH-17 6 C.C.NO.18336/14 punishable u/S 138 of NI Act, if the issuance of cheque and the signature on the cheque is accepted and admitted by the accused, an initial presumption has to be raised by the Court in favour of the complainant that the cheque in question was issued towards legally recoverable debt or liability. Of course this presumption is a rebuttal presumption. Such rebuttal evidence has to be placed before the Court by the accused. It is well known that, the accused can rebut the said legal presumption either by cross-examination of the complainant or by leading evidence.
10. Learned advocate for complainant argued that, the complainant satisfied all the ingredients to attract the offence under Section 138 of NI Act. It is argued that, the accused admitted the issuance of cheque and the signature SCCH-17 7 C.C.NO.18336/14 forthcoming on it, as such initial presumption to be raised in favour of the complainant, which is left un-rebutted.
11. On the contrary the learned advocate for accused argued that, accused denied the very existence of legally recoverable debt and the complainant fails to prove the existence of legally recoverable debt and the defence raised by the accused is a probable one, thereby the presumption raised stands rebutted.
12. In the background of settled principles and the submissions made by the learned counsels let us analyze the proof made available by the parties to unearth whose contention holds the ground.
SCCH-17 8 C.C.NO.18336/14
13. On careful scrutiny of rival contentions one can see that absolutely there is no dispute that the accused is the manufacturer of medicine and the complainant is the stockiest, they entered into consignee sales agreement dated 26.4.13. It is also not in dispute that on 30.4.13 the complainant transferred ten lakh rupees towards security deposit for consignee sales agent.
14. The disputed fact emerges from the rival contentions is that, the complainant is asserting that the accused issued the cheque in question for repayment of security deposit, whereas accused is contending that the undated cheque was issued as a security at the time of execution of consignee sales agreement.
SCCH-17 9 C.C.NO.18336/14
15. In the instant case there is no dispute that the cheque in question (Ex.P1) belongs to the accused. In cross- examination of Pw.1 it is suggested that, the Ex.P1 was given as security at the time of execution of agreement. In examination-in-chief the accused stated that the undated cheque was issued for security purpose to the complainant. In cross-examination the Dw.1 admits that the signature on Ex.P1 belongs to him.
16. Discussion supra coupled with the admission of Dw.1 manifest that the cheque in question belongs to the accused and it bears the signature of Dw.1 and it is issued to the complainant. Since the accused admits the issuance of cheque and signature on the cheque, the initial presumption as envisaged u/S 139 of NI Act is to be raised in favour of the SCCH-17 10 C.C.NO.18336/14 complainant that the cheque in question is issued for discharge of legally recoverable debt. Accused has to rebut the said presumption.
17. It is significant to note that the specific defence of the accused is that the undated cheque was issued at the time of execution of agreement towards security purpose and it is not issued for any legally recoverable debt. On the contrary complainant stated that it is issued for repayment of security deposit.
18. To unveil the truth regarding the contentions raised by the respective parties, first let us glance the averments set out in the complaint. In complaint, not even a single word is whispered about entering of consignee sales agreement dated 26.04.13, its terms and conditions, its duration and SCCH-17 11 C.C.NO.18336/14 deposit of amount towards security. It is only stated that the accused issued the cheque in question towards the repayment of security deposit. But in affidavit filed in lieu of examination-in-chief it is stated about the execution of consignee sales agreement and payment of Rs.10,00,000/- as security deposit as per the terms of agreement. It is also stated that on cancellation/termination of the agreement, the accused had issued the cheque in question towards the repayment of security deposit.
19. The evidence supra reveals that after termination of consignee agreement the accused issued the cheque for repayment of security deposit and in this background complainant is asserting that the cheque in question is issued for legally recoverable debt.
SCCH-17 12 C.C.NO.18336/14
20. In the light of facts situation on hand the moot question arises is whether the agreement entered between the parties is lawfully terminated and in lieu of termination any legally enforceable debt arises in favour of the complainant.
21. In cross-examination the Pw.1 stated that, the agreement is valid up to five years and said agreement is still in force. Both complainant and accused produced consignee sales agreement dated 26.4.13, which is marked at Ex.P6 and Ex.D1. Said undisputed document depicts that it was entered on 26.4.13 and it is valid up to 31.3.18. Clause 12 of agreement reveals that, in the event of contract expiry or termination of the agreement or closing of the business by either party ECOMAC Remedies shall refund security deposit SCCH-17 13 C.C.NO.18336/14 and other dues after settlement of all account within sixty days from the date of contract expiry or termination of the agreement. This clause makes it crystal clear that the security deposit is refundable on contract expiry or termination of the agreement. Here, categorical admission of Pw.1 and the recitals of Ex.D1 show that the contract is valid up to 31.3.18 and it is still in force. When such being the fact the question of issuance of cheque for repayment of security deposit as asserted by the complainant does not arise and it renders the assertion of complainant that the cheque in question was issued after termination of agreement towards repayment of security deposit is not worth acceptable, thereby the version of defence that the undated cheque was issued towards security at the time of execution of agreement is probable and acceptable one. SCCH-17 14 C.C.NO.18336/14
22. The view expressed supra is further fortified from the contents of cheque and the signature of accused. The contents are written in different ink and the signature is made in different ink. Accused is a literate man and knows to read and write had not written cheque in his own writing. If really accused issued the cheque in question on 30.11.13 towards repayment of security deposit, he would have written the contents as well.
23. Facts stated above manifest that the accused issued undated cheque to the complainant at the time of entering into contract. When the agreement was entered into, no debt or liability was in existence.
SCCH-17 15 C.C.NO.18336/14
24. It is argued that no notice was served on accused. This contention is not tenable because notice is issued through RPAD to the correct address of accused. Section 114 of the Evidence Act enables the Court to presume that in common course of natural events the communication would have been delivered at the address of the addressee. Section 27 of General Clauses Act gives rise to presumption that service of notice has been affected when it is sent to the correct address by registered post. In addition to this the Ex.P14 depicts that the article has been delivered to the addressee on 2.4.14.
25. It is argued that the complainant firm is an unregistered partnership firm, as such, as per Section 69 of Partnership Act no suit can be filed or instituted in any Court SCCH-17 16 C.C.NO.18336/14 by an unregistered partnership firm, due to this complaint u/S 138 of NI Act is liable to be dismissed. This contention is not tenable because Section 69 of Partnership Act is has no bearings on this case. This view is supported by a decision reported in ILR 2003 Karnataka 4325 (Beacon Industries v/S Anupam Ghosh), wherein it is held that, the Section 69 (2) of Partnership Act has no application to the criminal cases. Section 69(2) is applicable only where the civil rights are invoked and not in criminal case. Non registration of the firm has no legal bearing on the criminal case.
26. It is worth to note even though the contention of accused about non service of legal notice and application of Section 69 (2) of Partnership Act are not acceptable but the SCCH-17 17 C.C.NO.18336/14 main defence raised by the accused about issuance of cheque in question as a security is duly established.
It is argued that there is no need of issuing cheque as security by the accused to the complainant because accused is the seller of stock of medicine and complainant is the purchaser of the medicine who has to make payment to the accused. This contention holds no water to the complainant because the complainant deposited ten lakh rupees as security deposit and for security of said deposit issuance of cheque as security cannot be ruled out, which is duly established herein.
27. Accused relied on decision viz., i) (2006) 6 SCC 39 (Narayan Memon v/s State of Kerala), wherein it is stated that the presumption both u/S 118 (a) and 139 of the Act are SCCH-17 18 C.C.NO.18336/14 rebuttable in nature. ii) (2013) 3 SCC 86 (Vijay v/s Laxman and another), wherein it is held that, standard of proof required for rebutting the presumption u/S 118 and 139 of the NI Act is not as high as that required of the prosecution and is rebuttable on the preponderance of probabilities. iii) (2009) 4 Kant LJ 26 (H.R. Nagarathna v/s Jayashree Prasad), wherein it is held that, in case of cheque issued as security, such cheque cannot be said to have been issued towards discharge of the existing debt.
28. The facts situation on hand, discussion of evidence coupled with the principles enunciated in the above decisions it can be safely conclude that the accused successfully rebutted the presumption raised in favour of the complainant, thereby shifted the onus on the complainant to SCCH-17 19 C.C.NO.18336/14 demonstrate that the cheque in question is issued towards legally enforceable debt, which the complainant miserably failed to discharge the shifted onus. In this background above point is answered in negative.
29. Point-2: In the result, Court proceeds to pass the following;
O R D E R Acting under Section 255(1) of CrPC the accused is acquitted for the offences punishable under Section 138 and 142 of Negotiable Instruments Act, 1881.
Bail and surety bonds discharged.
(Dictated to the Stenographer, transcribed by her corrected by me and then pronounced in the Open Court, this the 27th day of February, 2017) [ (A.SAMIULLA) XIX ADDL.SCJ & MACT, BANGALORE.
SCCH-17 20 C.C.NO.18336/14ANNEXURE Witnesses examined on behalf of the Complainant:
PW.1 : Sri. Om Prakash Witnesses examined on behalf of the accused:
DW.1: Sri. Rathilal Raka Documents marked on behalf of the Complainant:
Ex.P.1: Cheque Ex.P.2: Bank memo Ex.P.3: Postal receipt Ex.P.4: Postal endorsement Ex.P.5: Copy of legal notice Ex.P.6: Sale agent agreement Ex.P.7: Bank statements Documents marked on behalf of the Accused:
Ex.D.1 Consignee Sales Agreement
(A.SAMIULLA)
XIX ADDL.SCJ & MACT,
BANGALORE.