Bangalore District Court
M/S Girish Mango Products And Exports ... vs Raghupathy on 11 September, 2024
KABC0A0049422022
IN THE COURT OF THE LXXIV ADDL. CITY CIVIL AND
SESSIONS JUDGE, MAYOHALL UNIT, BENGALURU.
(CCH-75)
Dated: This the 11th day of September, 2024.
PRESENT:
Sri.PRAKASH CHANNAPPA KURABETT, B.Sc., LL.B.,(Spl.),
74th Addl. City Civil and Sessions Judge, Bengaluru.
CRL. APPEAL No.25315/2022
APPELLANTS/
ACCUSED PERSONS: 1 M/s.Girish Mango Products &
Exports Pvt. Ltd.,
A Company incorporated under
the Companies Act and having
its Office at SF.No.199/2, 3, 4, 5,
Padukombal Village,
Muthugapathi Post,
Namakka District,
Tamil Nadu - 651405.
Rep.by its Directors/
Authorized Signatories.
2 E.Prasanna,
aged about 45 yrs,
2
CRL.A. No.25315/2022
Director,
M/s.Girish Mango Products &
Exports Pvt. Ltd.,
At SF.No.199/2, 3, 4, 5,
Padukombal Village,
Muthugapathi Post,
Namakka District,
Tamil Nadu - 651405.
3 P.Ramesh Kumar,
aged about 46 yrs,
Director,
M/s.Girish Mango Products &
Exports Pvt. Ltd.,
At SF.No.199/2, 3, 4, 5,
Padukombal Village,
Muthugapathi Post,
Namakka District,
Tamil Nadu - 651405.
(Rep.by Sri.A.Swaminath, Advocate)
V/S
RESPONDENT/
COMPLAINANT: Raghupathy,
S/o.Ramachandra Naidu,
aged about 67 yrs,
R/at.No.76, Oil Mill Road,
St.Thomas Town Post,
Kammanahalli,
Bengaluru-560084.
(Rep.by Sri.Krishna Mohana Reddy.C., Advocate)
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CRL.A. No.25315/2022
JUDGMENT
This is an appeal filed by the appellants/accused persons aggrieved against the judgment passed by XXXIV ACMM, Bengaluru, in CC No.51266/2018 on 03.11.2022 convicting the appellants for the offence punishable u/S 138 of N.I. Act and sentencing them to pay a fine of Rs.24,80,994/- and in default to undergo simple imprisonment for a period of 6 months.
2. The appellants were the accused persons and respondent herein was the complainant before the trial court and hereinafter they are referred to as per the ranks assigned to them before the trial court.
3. In brief the appellants/accused persons have stated in the memorandum of appeal that the trial court has convicted them in C.C. No.51266/2018 for the offence punishable u/S 138 of N.I. Act by holding that they have issued two cheques bearing No.000151, dated 23.08.2017 4 CRL.A. No.25315/2022 for a sum of Rs.12,50,000/- and another cheque bearing No.518958, dated 05.08.2017 for a sum of Rs.6,58,457/- in favour of the complainant. The said judgment has been challenged by the accused on the following grounds:-
1. That the trial court judgment is totally perverse, illegal, unlawful and bad in law.
2. That the trial court erred in placing much reliance upon the evidence of P.W.1 when his evidence is totally unbelievable, unacceptable and throws great doubt upon his credibility and reasonability.
3. That the issuance of cheque is not at all admitted fact and therefore without corroborating the evidence of P.W.1 and in the special circumstances of this case for want of corroboration ought to have rejected the unbelievable story of P.W.1.
4. That no appreciation of evidence. Debt of liability not established. No cogent evidence for due of such huge amount.
Alleged charges not proved. If the Ex.P.1 was drawn by the accused without accepting liability of another in writing it would not attract Section 138 of N.I. Act. No witness produced to prove existing 5 CRL.A. No.25315/2022 debt or liability and No supporting material evidence were produced.
5. That the appellant never issued the cheques in question to the respondent towards any liability. Even though the respondent has failed to prove the legally enforceable debt. On receipt of notice the appellants have properly replied to the notice by bringing true facts.
6. That at the time of commencement of business between the complainant and the accused, both the parties have entered into agreement and the complainant blank signed cheques for the sake of security, which was admitted by P.W.1 and also admitted that on 4.9.2014 the accused No.2 alleged to have been wrote letter on behalf of accused No.1 company intimating to close the business transaction and requested to tender the documents, but avoided to return the documents and the contents of the cheque are in different ink with different handwriting.
7. That the cheque in question is a stale cheque issued for security while doing business till the year 2014.
6
CRL.A. No.25315/2022 Thereby on all these grounds the appellants have prayed for setting aside the judgment dated 03.11.2022 passed by XXXIV ACMM, Bengaluru,.
4. After filing of this appeal, the presence of the respondent was secured. The trial court record was called and received.
5. Heard arguments. The learned counsel for the appellants has submitted written arguments and perused the entire materials placed on record..
6. The points that would arise for my consideration are:
1. Whether the judgment passed by the trial court is in accordance with law and facts of the case?
2. If, not whether the interference of this court is required in the impugned 7 CRL.A. No.25315/2022 judgment passed by the trial court?
3. What order?
7. My answer on the aforesaid points are as under:-
Point No.1: In the Affirmative, Point No.2: In the Negative, Point No.3: As per the final order, for the following:-
REASONS
8. POINT Nos.1 & 2: Both these points are interrelated, they have been taken up for consideration together.
9. In brief it is the case of the complainant before the trial court that the accused No.1 is a registered company and accused Nos.2 & 3 are its Directors and in charge of day to day of the accused No.1. The accused No.1 towards exports business and the complainant appointed as 8 CRL.A. No.25315/2022 forwarding agent of the accused No.1 company by representing the territory of Karnataka in terms of the agreement dated 4.3.2010 and on mutual understanding, the same is renewed as per the agreement dated 22.10.2013. The accused No.1 closed the CNF office of which is located at complainant's jurisdiction on company feasible purpose and requested the complainant to forward the statement of accounts and the pending dues and agreed to be settled as per the terms of the agreement. The accused No.1 through its authorized signatory accused Nos.2 and 3 towards repayment of the dues to the complainant had issued two cheques bearing No.000151, dated 23.08.2017 for a sum of Rs.12,50,000/- and another cheque bearing No.518958, dated 05.08.2017 for a sum of Rs.6,58,457/-. When the said cheques were presented for encashment, but the first cheque was returned with an endorsement 'Debit stopped' and second cheque was returned with an endorsement 'funds insufficient' respectively. Thereafter the 9 CRL.A. No.25315/2022 complainant got issued a notice to the accused on 06.10.2017. The said notice was duly served on the accused on 12.10.2017. In spite of it, the accused persons failed to pay the amount. Thereby he filed the complaint against the accused persons on 02.11.2017 for the offence punishable u/S 138 of N.I. Act.
10. The trial court records would show that after filing of this complaint the court has taken the cognizance of the offence and has recorded the sworn statement, registered the case against the accused. Further the records would also show that after the presence of the accused has been secured, substance of accusation has been recorded, the accused has not pleaded guilt and thereafter the trial court has recorded the evidence of the complainant and the accused, on the basis of the material on record, the trial court has convicted the accused persons for the offence u/S 138 of N.I. Act sentencing them to pay a fine of 10 CRL.A. No.25315/2022 Rs.24,80,994/-, in default to undergo simple imprisonment for a period of 6 months. The said conviction judgment is challenged before this court.
11. This court being the appellate court is duty bound to look into the entire material and the evidence on record to come to conclusion whether interference of this court is required in the judgment passed by the trial court and to hold whether the judgment passed by the trial court is in accordance with the law or on facts or not.
12. The main ground of the accused in preferring this appeal is that no appreciation of evidence and debt of liability not established and no cogent evidence for due of such huge amount and alleged charges not proved and if the Ex.P.1 was drawn by the accused without accepting liability of another in writing it would not attract Section 138 of N.I. Act and no witness produced to prove existing debt or liability and no supporting material evidence were produced. 11
CRL.A. No.25315/2022
13. In the light of grounds urged by the accused if the trial court records are perused, it would show that the complainant has produced the documents such as Ex.P.1 the agreement, renewed agreement, cancellation of CNF agreement, cheques in issue, bank endorsements, copies of the notices, postal receipts and postal acknowledgements at Ex.P.17. These documents and the oral evidence of the complainant are sufficient for the court to raise the statutory presumption in favour of the complainant. There is nothing wrong on the part trial court in raising the presumption in favour of the complainant on the basis of the records and the evidence.
14. The question before the court is whether the accused has rebutted the presumption and has shifted the burden on the complainant to prove the case on the touch stone of preponderance of probabilities. 12
CRL.A. No.25315/2022
15. In respect of the proof of the fact that the cheques have been issued for discharge of legally enforceable debt, there is a presumption of law under Sec.139 of N.I. Act, in favour of the holder of the cheque, which reads as follows:-
'Sec.139 - Presumption in favour of holder: 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, of any debt or other liability.'
16. The presumption u/S 139 of N.I. Act is a presumption of law and not the presumption of fact. The presumption has to be raised in all the cases once the factum of issuance of cheques and its dishonour is established. U/S 118 (2) of N.I. Act, there is a presumption in respect of passing of consideration in favour of the complainant. The onus of proof to rebut the presumption lies on the accused persons. The accused persons need not rebut the presumption beyond all reasonable doubt. But, the accused 13 CRL.A. No.25315/2022 persons have to place sufficient materials to convince the court that their case is more probable when it is compared with the case of the complainant. Accused persons may adduce direct evidence to prove that the note in question was not supported by consideration or that they had not incurred any debt or liability. They may also rely upon the averments in the complaint, statutory notice and the circumstantial evidence adduced by the complainant during the trial. Accused persons need not enter into the witness box to rebut the presumption.
17. In the case on hand, the complainant has established the factum of issuance of cheques and its dishonour. Therefore, this court shall raise a presumption u/ S 139 of N.I. Act that the accused persons have issued cheques towards discharging the legally enforceable debt. After raising initial presumption it is for this court to consider whether the presumption has been rebutted by bringing in 14 CRL.A. No.25315/2022 cogent materials on record with reference to the defence raised by the accused persons that no existence of legally recoverable debt.
18. The defence of the accused that there are two legal notices issued by the complainant; i.e., Ex.P.8 dated 6.10.2017 is the first notice which is served on accused on 12.10.2017 and Ex.P.13 is the second notice dated 26.10.2017 which is posted on 31.10.2017 and as per the postal acknowledgements Ex.P.15 to P.17 second notice is served on 6.11.2017. Therefore, there are two cause of actions, therefore the complaint is not maintainable in two cause of actions and the complaint is filed on 2.11.2017 which on second cause of action.
19. The defence of the accused is that it is condition that Rs.12,50,000/- shall deposit to the complainant company. Accordingly the accused have deposited security cheque to the complainant company. The defence of the 15 CRL.A. No.25315/2022 accused is that the tax authority have asked all the documents with respect of accused company, but Prathap Singh was not supplied the said document. Thereafter, Tax Department, Karnataka was issued notice to Prathap Singh and complainant to produce the book of accounts and other documents, but the complainant has not produced documents and book of accounts to the Tax Department, Karnataka.
20. During the course of cross-examination of D.W.1, he admitted that Ex.P.1 and 2 agreements are in between complainant and accused and D.W.1 has been signed as a Director of the accused No.1 company and also admits that he has got every information and knowledge about Ex.P.1 & 2 and also admits that Ex.P.3 Cancellation of CNF agreement letter was issued by him by stating that they have closing office the CNF office at location of the complainant company and also mentioned that the stocks thereafter from now will 16 CRL.A. No.25315/2022 be directly billed to party against CST/VAT. The agreement dated 22.10.2013 between Grisy Mango Products and Exports, Tamil Nadu Pvt. Ltd., and K.Raghupathy is now canceled. It is further mentioned that requesting to send statement of accounts and the pending dues whatsoever will be settled as per the agreement terms in the agreements. Accordingly, the complainant have send the statement of accounts to the accused which discloses copy of the ledger account; i.e., statement of accounts for the year 1.4.2010 to 31.3.2015.
21. The defence of the accused is that both cheques were issued for the security purpose as per the agreements and the complainant has misused the said cheques. Further no legal action has been taken against the complainant for alleged misuse of cheques or non return of cheques to accused.
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CRL.A. No.25315/2022
22. The learned Magistrate has exhaustively discussed the entire contentions of the accused persons as well as the complainant and has given well reasons regarding the facts that the accused persons have failed to rebut the presumption which lies in favour of the complainant. Merely because, the accused persons have given evidence, it cannot be said that the burden shifts on the complainant. The defence shall be a probable defence, which any reasonable person can believe that such a thing has happened or believes in the probability. The defence taken by the accused persons is not at all a probable defence and it cannot be believed that the persons who were knowing the worldly affairs have given the signed cheques to the complainant without there being any liability. Hence, there is nothing on record to say that the accused persons have disproved the case of the complainant or raised any probable defence to shift the burden. Hence, the probabilities in the case of the complainant are more rather 18 CRL.A. No.25315/2022 than in the defence taken by the accused persons. The trial court has rightly come to conclusion and has convicted the accused persons.
23. The trial court by considering the entire materials on record has rightly come to the conclusion that the accused persons have failed to rebut the presumption, which lies in favour of the complainant and more over recently the Hon'ble Apex Court in Crl.Appeal at Special Leave Petition (Crl.) No.12802/2022, dated 09.10.2023 between Rajesh Jain v/s Ajay Singh has in detail discussed as to how the presumption operates and once the presumption operates, the onus rests on the accused to prove the non-existence of debt/liability. Wherein in the said above referred case, the accused was tried for the offence u/S 138 of N.I. Act. The trial court had acquitted the accused by considering that the onus of rebutting the presumption lay on the accused was discharged by raising a probable defence and the 19 CRL.A. No.25315/2022 complainant has failed to prove his case beyond reasonable doubt and the defence of the accused has created a doubt regarding the truthfulness of the complainant case. Against the order of acquittal passed by the trial court, the complainant had preferred the appeal before the Hon'ble High Court. Wherein the Hon'ble High Court also upheld the order of acquittal holding that the complainant has failed to prove that the cheque was issued in respect of legally enforceable debt. Wherein in the said case, it was the defence taken by the accused that the complainant had failed to mention the date, month and the year on which he advanced various sum of money towards the loan to the accused. The version of the complainant was doubtful, since the cheque was admittedly issued in part payment of outstanding dues and no where in the complaint or demand notice complainant disclosed the total amount loan to the accused. The court found that the complainant therein was an Orthopedic Surgeon could not have advance huge amount 20 CRL.A. No.25315/2022 to an accused who was a Class-IV employee without an agreement or acknowledgement of loan advance etc. When the matter went up to Hon'ble Apex Court, the Hon'ble Apex Court in detail have discussed as to when a presumption is raised, how the accused have to rebut the said presumption and when the burden shifts on the complainant and at para- 56, page-33 the Hon'ble Apex Court has observed;
'56. At the stage when the courts concluded that the signature had been admitted, the Court ought to have inquired into either of the two questions (depending on the method in which accused has chosen to rebut the presumption): Has the accused led any defense evidence to prove and conclusively establish that there existed no debt/liability at the time of issuance of cheque? In the absence of rebuttal evidence being led the inquiry would entail: Has the accused proved the nonexistence of debt/liability by a preponderance of probabilities by referring to the 'particular circumstances of the case'?'
24. Further Hon'ble Apex Court has clearly held as to when the presumption is rebutted and when the court has to 21 CRL.A. No.25315/2022 shift the burden on the complainant to prove the case and what are all the facts, which can be considered as rebuttal evidence. In the background of the discussion held by the Hon'ble Apex Court, if the facts and circumstances as well as the evidence led by the parties are perused carefully, they would show that the accused persons though had led the evidence, but the evidence is not satisfactory to say that there is a probability in their defence and to shift the burden on the complainant to prove the transaction. When such being the fact, I hold there is nothing on record to interfere in the judgment passed by the trial court. Accordingly, I hold point for consideration No.1 in Affirmative and No.2 in Negative and proceed to pass the following:-
ORDER Appeal is dismissed.
The Judgment passed by the
Learned XXXIV Addl. Chief
Metropolitan Magistrate, Mayo
22
CRL.A. No.25315/2022
Hall Unit, Bengaluru, in CC
No.51266/2018 dated:
03.11.2022, convicting the
appellants/accused persons for
the offence punishable U/Sec.138
of N.I.Act is confirmed.
Send back Trial Court
Record (TCR) to the Trial Court
along with copy of judgment.
No order as to costs.
[Dictated to the Stenographer directly on computer, corrected and then pronounced by me in the open court on this the 11th day of September, 2024].
[PRAKASH CHANNAPPA KURABETT] LXXIV Addl. City Civil & Sessions Judge, Mayohall, Bengaluru.23
CRL.A. No.25315/2022 Judgment pronounced in the open court (vide separate judgment).
ORDER Appeal is dismissed.
The Judgment passed by the Learned XXXIV Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru, in CC No.51266/2018 dated: 03.11.2022, convicting the appellants/accused persons for the offence punishable U/Sec.138 of N.I.Act is confirmed.
Send back Trial Court Record (TCR) to the Trial Court along with copy of judgment.
No order as to costs.
(PRAKASH CHANNAPPA KURABETT) LXXIV Addl. City Civil & Sessions Judge, Mayohall Unit, Bengaluru. (CCH - 75) 24 CRL.A. No.25315/2022 25 CRL.A. No.25315/2022