Bangalore District Court
Company Incorporated Under Company'S ... vs Limited on 24 March, 2021
BEFORE THE COURT OF XXIV ADDITIONAL SMALL CAUSES
JUDGE AND THE MOTOR ACCIDENT CLAIMS TRIBUNAL &
A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 24th DAY OF MARCH 2021
PRESENT: SRI.R.MAHESHA B.A.L., LLB.,
XXIV ADDL. SCJ &
ACMM & MEMBER - MACT
BENGALURU.
1. Sl. No. of the Case CC.No.2345 of 2017
2. The date of 05-12-2018
commencement of
evidence
3. The date of closing 06-02-2021
evidence
4. Name of the M/s Rajesh Exports Ltd.,
Complainant Company incorporated under company's Act
and having its office at No.4,
Batavia Chambers, Kumara Krupa road,
Kumara park East,
Bangalore-560001,
Represented by its authorized representative
R.M.Nanjundaswamy
(By Sri.P.N.-Advocate)
5. Name of the 1. M/s Sri.Rama IT Solutions Private
Accused Limited, No.402/1,
Sindu Nadhi Road,
Brindavan Nagar,
Bangalore-560050,
Rep. by its Director Sri.M.Gangadhar
2. Sri.M.Gangadhar, Director,
M/s Sri.Rama IT Solutions Private
Limited, No.402/1,
Sindu Nadhi Road,
2 C.C.No.2345 of 2017
SCCH-26
Brindavan Nagar,
Bangalore-560050.
(By Sri.M.R.S.-Advocate)
6. The offence U/s.138 of the Negotiable Instruments Act
complained of
7. Opinion of the Accused found guilty
judge
JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
The accused No.1 had sought or availed an inter corporate deposit of Rs.90,00,000/- from the complainant company. The accused No.1 represented by the Director accused No.2 in order to protect the interest of the complainant had executed a declaration. That in the declaration provided by the accused No.1 represented by its Director, accused No.2 or authorized signatory accused No.2, the accused No.1 has confirmed the receipt of the inter corporate deposit of Rs.90,00,000/-. The 3 C.C.No.2345 of 2017 SCCH-26 accused No.2 has also confirmed and taken responsibility to return the amount of Rs.90,00,000/- on behalf of accused No.1.
The accused No.1 against the debt/liability, has confirmed issuing of a cheque bearing No.180625 drawn on Canara Bank for Rs.99,00,000/-. The accused No.1 through the accused No.2 as Director are due and liable for the inter corporate deposit obtained from the complainant company. The accused towards the discharge of the debt/liability was presented for encashment by the complainant through their banker Canara Bank, Madhavanagar branch, Bangalore-560001 which has been returned by the bankers with an endorsement "Account Closed". That the demand notices dated 5-3-2016 came to be issued to the accused No.1 and 2 for payment of the outstanding due amount covered under the said cheque, but the said demand notice returned on 8-3-2016. Hence filed this complaint.
3. At first instance, the present complaint filed before the 27th ACMM, Bengalore on 20-04-2016 which was registered as PCR 4382/2016, thereafter sworn statement of the complainant by way of affidavit was received on 19-01- 4 C.C.No.2345 of 2017 SCCH-26 2017, the case was registered and summons was ordered to be issued, pursuant to which present CC number assigned. As per notification No.ADM 1(A)/19/2017 dated 20-11-2017 of CMM, Bengaluru, this case is transferred to 24th ASCJ & 22nd ACMM (SCCH-26), Bengaluru. Accused appeared before this court on 5.1.2019 and got enlarged on bail. Plea was also recorded. He denied and claims to be trial.
4. In order to establish his case, authorized representative of the complainant company himself i.e., R.M.Nanjundaswamy examined as PW-1 and got marked 12 documents as Ex-P1 to 12 and closed his side. During cross-examination of PW.1, accused got confronted one document and marked in his favour as Ex.D.1.
5. Accused was examined under section 313 of Cr.P.C. incriminating material appearing in the complainant evidence was read over and explained to the accused, who denied the same, he claims to lead defence evidence, but afterwards, accused orally submitted that he has no defence evidence. Hence accused did not lead any evidence and documents on his behalf.
5 C.C.No.2345 of 2017
SCCH-26
6. Heard oral arguments from both side.
7. Upon hearing the arguments and perusal of the material placed on record, the following points arise for my consideration :-
POINTS
1. Whether the complainant has made-out the case that the accused has issued a cheque bearing No.180625 dated 17-2-2016 for Rs.99.00,000/-
drawn on Canara Bank, Sampangiramnagar Bangalore-560027, to discharge the legally enforceable debt or liability due to the complainant and on presentation of cheque it was returned without encashment with an endorsement as "Account Closed'' and accused failed to make any payment within the stipulated period and thereby accused had committed an offence punishable under section 138 of N.I Act?
2. What order?
8. My answer to the above points is as follows :-
Point No.1 : In the Affirmative Point No.2 : As per final order for the following:6 C.C.No.2345 of 2017
SCCH-26 REASONS
9. Point No.1: The provision of Section 101 of the Indian Evidence Act provide that the burden of proof rests on the party who substantially asserts it and not on the party who denies it, in fact burden of proof means that a party has to prove an allegation before she is entitle to a judgment in her favour. Further law U/s 103 of Indian Evidence Act amplifies the general rule of Section 101 that the burden of proof lies on the person who asserts the affirmative of the fact in issue.
10. The burden lies on the complainant to prove the complainant complied with mandatory requirements of Section 138 of NI Act.
The three ingredients of offence U/s 138 NI Act are as under.
1. That there is a legally enforceable debt
2. That cheque was drawn from the account of bank for discharge in whole or in part of any debt or any other liability which presuppose legally enforceable debt
3. That the cheque so issued had been returned due to insufficiency of funds.
7 C.C.No.2345 of 2017
SCCH-26 The proviso appended to the said section provides for compliance with legal requirements before the complaint/petition can be acted upon by court of law.
Section 118A of N.I Act deals with special rule of evidence and stated that, every negotiable instrument act is deems to have been drawn for consideration. Section 139 of NI Act enables the court to presume, unless contrary is proved, that the holder of the cheque received the cheque of the nature referred in Section 138, in whole or in part, of any debt or other liability.
The presumption available U/s 118 and 139 of NI Act is rebuttal in nature, the accused can rebut the same by either entering into the witness box or effectively cross examine the complainant and his witness.
11. To prove the said facts, the complainant company authorized representative -R.M.Nanjundaswamy examined as PW-1 and produced documents as Ex-P1 to P12. On behalf of the accused, PW-1 having been cross examined. In the cross examination PW-1 clearly and categorically admitted that Ex.P12 executed by one Vasudeva Murthy and Puttamma. 8 C.C.No.2345 of 2017
SCCH-26 Further he denied that Ex-P1 gave in blank. Further he denied he filed cheque case against Puttamma and Vasudevamurthy for recovery of sum of Rs.99,00,000/-. Further PW-1 admitted the document which was PCR No.8212/2016, the present complainant company filed PCR against one Puttamma. It was marked as Ex-D1. Further PW-1 clearly and categorically admitted that the disputed cheque was handed over to possession of complainant company when they executed declaration. Further he contended that the accused was principle borrower, he denied Ex-P12 executed for cheque security purpose. Further he clarified Ex-P12 executed by surety. The present accused is principle borrower and further he denied the suggestion made by the accused the inter corporate deposit money transferred to Smt.Puttamma from accused company.
12. Upon careful scrutinizing rival parties, documents and oral evidence, it depicts that, Ex-P1 belongs to accused No.1. The accused No.2 is the authorized signatory and director of accused No.1 company. The disputed cheque handed over to complianant company on 17-2-2016 for the 9 C.C.No.2345 of 2017 SCCH-26 purpose of repayment of an inter-corporate deposit amount availed from the complainant company. As per the complaint averments, the accused No.1 had sought and availed an inter corporate deposit of Rs.90,00,000/- from complainant company. The accused No.2 being director of accused No.1 in order to protect the interest of the complainant had executed declaration and accused No.1 confirmed and taken responsibility to return the amount. The disputed cheque provided by accused towards the discharge of the debt, liability and the cheque was presented through their banker which has been returned by the bankers with an endorsement of account closed. There afterwards, they sent a legal notice the same were duly served on both accused, they did not repay the inter corporate deposit amount. To prove the above facts, the complainant company authorized representative produced some documents. On perusal of Ex-P1 to 5, the complainant company presented the disputed cheque through his banker, same was returned as unpaid for the reason of account closed and they sent a legal notice. The said legal notice returned Door Lock, intimation delivered, addressee refused. Hence 10 C.C.No.2345 of 2017 SCCH-26 returned to sender. So from this endorsement, the demand notice was deemed to served on both accused. They did not gave any reply nor payment. Admittedly Ex-P1 belongs to accused No.1 company and signature bears in Ex-P1 was belongs to accused No.2. On Ex-P7, it is forthcoming that the complainant company issued cheque No.311364 dt.3-9-2010 for sum of Rs.90,00,000/- which was issued from complainant bank account No.1833256005271 in favour of accused No.1, it was encashed on 9-9-2010. Ex-P8 is one declaration executed by accused No.1 and 2. He confirmed and admitted acknowledgment for availed debt of Rs.90,00,000/-. Further they stated to discharge their liability, debt, they having issued a post dated cheque bearing No.180625 in favour of complainant company for a sum of Rs.99,00,000/-. The said cheque was issued in favour of complainant company for the discharge of liability/debt along with the interest. The said document was executed on 3.9.2010. Further accused No.1 unconditionally undertake that in the end of non realization of the cheque bearing No.18625 he would be liable for legal action. Ex.P.9 is the certificate of incorporation, the 11 C.C.No.2345 of 2017 SCCH-26 complainant company registered under Company Act register No.08/17077/1985. Ex.P.10 is the certified copy of the board resolution dated 2.5.2009. The complainant company chairman authorized one Mr.Nanjundaswamy son of Mallappa to represent the company in all its courts proceedings initiated by the company, further Ex.P.10 authorised to sign the relevant complaint, vakalathnama lead evidence, execute necessary affidavit in the appropriate courts, and defend company in all respects in the said court proceedings. Ex.P.11 is the paper publication. The accused No.1 and 2 are remained absent before this court. The complainant took all coercive steps to secure the presence of accused. Hence, this court issued proclamation against both accused and this court permitted to take proclamation through paper publication, same was duly published. Then accused appeared before this court. Therefore, Ex.P.11 was published by the complainant company with the permission of the court. Ex.P.12 is the mortgage deed dated 3.9.2010 entered between one Vasudeva Murthy and Puttamma and complainant company. The said Vasudevamurthy and Puttamma are the mortgager. The 12 C.C.No.2345 of 2017 SCCH-26 complainant company is the mortgagee. On perusal of the recital of Ex.P.12, the mortgagers are the absolute owner and in possession of A & B schedule properties. The said properties have offered by the mortgager to mortgagee as a security towards the inter corporate deposit of Rs.90 lakhs received by complainant company. The complainant company gave a cheque bearing No.311364 dated 3.9.2010 for a sum of Rs.90 lakhs in favour of accused No.1. The accused No.1 is the receiver of inter corporate deposit of Rs.90 lakhs from complainant company. Vasudevamurthy and Puttamma have offered mortgage the A & B schedule property in favour of mortgagee out of their own will as a mortgage on security for the inter corporate deposit of Rs.90 lakhs which was received by the receiver. Vasudevamurthy and Puttamma have confirmed creation of mortgage in favour of complainant company. In Ex.P.12 clause 10 it is clear that the "mortgager" agrees and accept that if the "receiver" fails to repay the deposit amount of Rs.90 lakhs along with due interest within 30 days of demand by the "mortgagee". Then in the event the "mortagee" shall have the unilateral right to 13 C.C.No.2345 of 2017 SCCH-26 enforce the mortgage by communicating its intention. So from the recitals of Ex.P.12 mortgagers have consented and undertaking to mortgagee that mortgager and receiver both have liability to pay inter-corporate deposit of Rs.90 lakhs to complainant company. In case of fail mortgagee can initiate legal proceedings against both i.e., mortgager and receiver.
13. So, in this background it is appropriate to know about proper provision of Company Act.
Inter Corporate Deposit define in Company Act as follows:
An Inter-Corporate Deposit (ICD) is an unsecured borrowing by corporates and FIs from other corporate entities registered under the Companies Act 1956. The corporate having surplus funds would lend to another corporate in need of funds. This lending would be an uncollateralized basis and hence a higher rate of interest is demanded by the lender. The short term credit rating of the borrowing corporate would determine the rate at which it would be able to borrow funds. Further the credit spreads demanded even for the top rated corporate would be higher than similar rated banks and the rates on ICDs would higher than those in the Certificate of Deposit (CD) market. The tenor of ICD may range from 1 day to 1 year, but the most common tenor of borrowing is for 90 days.14 C.C.No.2345 of 2017
SCCH-26
14. What are the procedure to be followed before advancing inter-corporate deposits by the company.
Section 186 is NOT Applicable to Loan Made, guarantee given or security provided or investment made by Banking Company, or Insurance Company or Housing Finance Company in the ordinary course of its business or whose principal business is of lending of money to the general public.
Section 186 is also NOT Applicable To any Investment made by an investment company; made in shares allotted by way of rights issues made by a body corporate; Investment made by an NBFC company whose main business is to invest in the securities of the Company.
Inter-Corporate Loans and Investments As per section 186(1) of the Companies Act, 2013, a company shall make investment through not more than Inter-corporate two layer of investment Company 1 investment by the Company a. If an Indian Company acquire any other Company which incorporated outside India and if such subsidiary has Investment subsidiaries beyond two layers as per the law of such Country.
Exception to Section 2 186(1) b. A subsidiary having investment subsy for the purpose of fulfilling the requirements of any Law, Rule, Regulations for time being in force.
In case if company directly or indirectly- a. Giving any loan, or Limits for Loan, b. Provide any security in connection with loan , or 3 Guarantee, Security and Investment c. Giving any Guarantee, or d. making investment in any other body corporate or person, then as person 186(2) it shall not exceeding-60% of its paid up share capital, free reserve and security 15 C.C.No.2345 of 2017 SCCH-26 premium account, and 100% of its free reserve and securities premium account, Whichever is more, *Note- Person does not includes individual who is in the employment of the Company.
If the aggregate amount loan, guarantee, security, and investment the company exceeds the limit as prescribed Special Resolution in section 186(2) in such a case no investment or loan 4 Section 186(3) shall be made or guarantee shall be given or security shall be provided unless its authorized by special resolution passed in a general meeting.
The requirement of section 186(3) shall be apply, in case if Loan, Guarantee or security has provided by a Company-
a. to its wholly owned subsidiary Company; or 5 1st proviso to section 186(3) b. a Joint venture Company;
or acquisition made by holding company by any mode, of securities of its wholly owned subsidiary Company. Company shall disclosed the details of such loan, 2nd proviso to section Guarantee, Security, acquisition in the financial 6 186(3) statement.
Company shall disclose to the member in financial statements-
Disclosure to 7 Member Section 1. the full details of the Loan, Investment, Guarantee, 186(4)
2. Purpose of the same, Board resolution For every inter-corporate loan, investment, guarantee, 8 Section 186(5) security the board resolution required to be passed.
Where any term of the loan subsisting that the approval of financial institution shall be required then before Approval of financial giving any loan, guarantee, security, Investment the 9 Institutions Section approval of the financial Institutions shall be required; 186 (5) Exception:
16 C.C.No.2345 of 2017
SCCH-26 Approval of Public financial Institution shall not be required where the aggregate of the loans and investment so far made, amount for which guarantee and security so far provided along with any Investment, loan, security, Guarantee proposed to be made shall not exceed the limit under section 186(2) of the Act.
1. Company Registered under section 12 of the SEBI Act, 1992 and
2. such class of companies as may be notified by the CG in consultation with the SEBI, 10 Section 186(6) shall take inter-corporate loan and deposits, in excess of the limits specified under the regulations applicable to such company, pursuant to which it has obtained certificate of registration from the SEBI and such Company shall furnish in its financial statements the details of the loans or deposits;
The rate of Interest shall not be lower than the prevailing Rate of interest 11 of one year, three year, five year, ten year government Section 186(7) security closet to the tenure of the loan. In case any company made default in repayment of deposit accepted before or after this act or in payment of Defaulted companies 12 interest, shall not give any guarantee or provide any Section 186(8) security or make an acquisition till such default is subsisting.
Company giving loan, or providing security, giving guarantee, or making investment in securities in any body corporate shall from the date of its incorporate, shall maintain a register of loan, guarantee, security, investments,
2. The Register shall be in form MBP 2 Register to be 13 maintained Section 3. The entries in the register shall be made within 7 days 186 (9), (10) of making Loan, or giving guarantee, or providing security, making acquisition.
4. Each entries in the register shall be authenticated by the CS or any person authorized by the Board of directors.
5. Register can maintained either manually or in 17 C.C.No.2345 of 2017 SCCH-26 electronic mode.
6. The extracts of the register may be furnish to the member of the Company on payments of such fees as may be prescribed in the article which shall not exceed 10 rupees for each page.
1. Banking Company;
2. Insurance Company;
Non Applicability of 3. House Finance Company 14 section 186 Section 186(11) 4. NBFC If any such transactions doing in ordinary course of business If a company contravenes the provisions of this section, Fine;
Min- 25,000 Rupees Max- 5,00,000 Rupees Fine and Officer in default 15 Imprisonment Section 186(13) Imprisonment: 3 Years Fine;
Min- 25,000 Rupees Max- 1,00,000
15. In this background on perusal of Ex.P.8 & 12, the complainant company complied all the necessary legal requirements for advancing inter-corporate deposit to accused 18 C.C.No.2345 of 2017 SCCH-26 No.1 company. As per Section 186(3) of Company Act, the complainant company passed special resolution in a general meeting. The complainant company did not produce board resolution order but it was confirmed by the accused No.1. The accused No.1 company had received inter corporate deposit amount of Rs.90 lakhs from complainant company. He himself admitted to repay the interest at the rate of 28% p.a. Hence, accused No.1 gave disputed cheque for Rs.99 lakhs, it includes principal amount of Rs.90 lakhs and interest of 28% p.a. But during the course of arguments, learned complainant counsel failed to demonstrate how 9 lakhs increased. He orally argues that the accused himself agreed as per Ex.P.8 and he himself calculate the interest and he himself fill up cheque amount as Rs.99 lakhs. The complainant advocate fairly submitted before court, he did not specialized in mathematics. But in Ex.P.1 was issued for a sum of Rs.99 lakhs. It was supported by Ex.P.8 the accused No.1 received a sum of Rs.90 lakhs through cheque as an inter corporate deposit on trust with interest @ 28% p.a. Same was reflected in Ex.P.7 on 3.9.2010, the accused No.1 company 19 C.C.No.2345 of 2017 SCCH-26 encashed a amount of Rs.90 lakhs from the complainant account through cheque. So from these admission, this court can clearly come to the conclusion that the accused No.1 being the corporate company received a inter corporate deposit a sum of Rs.90 lakhs from complainant company. The accused No.2 is being the director of accused No.1 and signatory of Ex.P.1 handed over his negotiable instrument i.e., cheque for a sum of Rs.99 lakhs. Admittedly accused did not produce any document to show either accused No.1 and 2 or mortgagers have been repay the inter corporate deposit amount of Rs.90 lakhs along interest towards the complainant company. So it is clear from these facts there is existence of legally recoverable debt between parties. .The complainant company having right of recovery of inter-corporate deposit amount from both the accused. Hence apparently the documents speaks about there is a existence of liability by the both accused. Therefore the complainant company for enforcing his right, they filed present complaint.
16. At this stage it is pertinent to note the Apex court decision reported in -
20 C.C.No.2345 of 2017
SCCH-26 Hithin P Dalal Vs. Brathin Dranath Benerji
- Lakshmi Dyechem Vs. State of Gujarath and others- umar Exports Vs.Sharm Cerpets and K.N.Beena Vs. Muniyappa and others.
The Hon'ble Apex court clearly held that "onus of proving that the cheque issue was not in discharge of any debt or any liability is on the accused drawer of the cheque, it is obligatory on courts to raise the presumption provided U/s 139 of the NI Act. The said presumption is rebuttal and can be rebutted by accused by proving the contrary by needing cogent evidence that there was no debt or liability. The Supreme Court observed that it is immaterial that the cheque is filled by any person other than drawer provided it is duly signed by the drawer. The same would not invalidate the cheque and shall attract the presumption U/s 139 of NI Act.
A meaning full reading of the provisions of Negotiable Instrument Act including in particular section 20, 87 and 139 makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless, he adduced evidence to rebut the presumption that the cheque had been issued for payment of debt or in discharge of a liability, it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer, if the cheque is otherwise valid, the penal provision of Section 138 would be attracted.
If a signed cheque voluntarily presented to a payee towards sum payment, the payee may fill up the amount and other particulars, this in itself would not invalid the cheque. The onus would still 21 C.C.No.2345 of 2017 SCCH-26 be on the accused, to prove that the cheque was not indischarge of a debt or liability by adducing evidence.
17. It is profitable to refer Hon'ble Apex Court decision -
IN THE SUPREME COURT OF INDIA IN CRIMINAL APPEAL NO. 508 OF 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 2018) ROHITBHAI JIVANLAL PATEL VS. STATE OF GUJARAT & ANR In this case Hon'ble Supreme court held that the onus on the complainant to prove his case beyond reasonable doubt by trial court these consideration and observation do not standing conformity with the presumption existing infavour of the complainant by virtue of Section 118 and 139 of NI Act and presumption is that existence of legal enforceable debt is to be presumed in favour of the complainant. When such presumption is drawn the factor relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining the if the accused has been able to rebut the presumption or not. The other observation as regards any variance in the statement of complainant and witnesses or want of knowledge about dates and other particulars of cheques.
18. Further Hon'ble Apex court clearly held that the order of acquittal on the mere ground of creation of doubt it can misplaced the assumption by the trial court. Mere creation of 22 C.C.No.2345 of 2017 SCCH-26 doubt is not sufficient to rebutted the presumption as envisaged by Section 139 of NI Act.
19. Further this court relied Hon'ble Supreme Court of India recent decision in-
Crl.Appeal No.1545/2019 Uttam Ram Vs. Devender Singh Hudan and others, decided on 17/10/2019 by division bench. The Apex court held that -
once signed cheque issued court can presumed that cheque in question drawn for consideration to holder of the cheque. The complainant proves before court regarding existence of debt. Thereafter the onus shifted on accused to prove there is no existence of legally recoverable debt, then court can hold presumption in favour of complainant is proper. Under Negotiable Instrument Act, there is clear presumption about existence of legally enforceable debt.
20. It is profitable to refer and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.123/2021 arising out of special leave petition (criminal) 1876/2018 between M/s Kalamani Tex and another Vs P.Balasubramanian disposal date on 10-02-2021 (three judges bench). In this case, Apex court held that, once signature on cheque admitted by the accused, court ought 23 C.C.No.2345 of 2017 SCCH-26 to have presume that, cheque was issued as consideration for a legally enforceable debt.
21. It is pertinent to refer and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.292/21 between Sumethi Vij Vs. M/s Paramount Tech FAB Industries (Division Bench) disposed dated 9.3.2021 In this case Apex Court held that under Section 139 of the Act, a presumption is raised that holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut this presumption, facts must be adduced by the accused which on preponderance of probability (not beyond reasonable doubt as in the case of criminal offence. Must then be proved.
Further Apex court clarified that there is a mandate of presumption of consideration in terms of the provision of the act under Section 118 and 139 of Negotiable Instrument Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of section 138 of the NI Act.
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22. In present case on hand issuing of cheque is proved. In this case Ex.P1 belongs to accused and signature on Ex.P1(a) was not disputed. The case of complainant that the accused issued cheque towards repayment or discharge of inter corporate deposit amount purpose if accused violates terms of Ex.P.8 i.e., declaration and Ex.P.12 mortgage deed dated 3.9.2010 the accused himself authorized to complainant company for presenting cheque for withdrawal of inter corporate deposit amount from the both accused account. In order to show the said cheque was issued towards debt or liability. Therefore the court is of considered opinion that the complainant company has discharged his initial onus laid on complainant company. When complainant company has discharged his initial onus, presumption is raised U/S 118 A and 139 of N.I. Act and accused is obliged to rebut the statutory presumption available to the complainant. The accused has failed to raise probable defence which creates doubts about the existence of a legally enforceable debt or liability. The defence raised by the accused remains as defence only and does not take the place of proof. Though accused 25 C.C.No.2345 of 2017 SCCH-26 No..1 and 2 have tried to rebut the statutory presumptions, both have failed in their attempt for the reasons discussed supra. The accused has not rebutted the statutory presumption available to the complainant. The complainant company had substantially proved its contention that Ex-P1 cheque was issued by the accused towards discharge of debt i.e., repayment of inter corporate deposit principle amount and along interest and on presentation of the said cheque came to be dishonoured for the reason "account closed", thereafter having intimated about dishonour of the cheque, the accused No.1 and 2 having failed to make payment of the dishonour of the cheque amount, it had proved that accused has guilty of the offence punishable U/s 138 of NI Act. By allowing the cheque to be dishonoured without maintaining sufficient funds inspite of issuing cheque towards discharge of legally enforceable debt. Hence in the circumstance, the complainant having proved its case. Hence I answer Point No.1 in the Affirmative.
23. Point No.2: Since this court has already held that the cheque in question was issued towards discharge of legally 26 C.C.No.2345 of 2017 SCCH-26 enforceable debt and the accused has committed an offence U/s 138 of NI Act. This court has power to impose both sentence of imprisonment and fine on the accused. The court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Further accused has to compensate the complainant in terms of money. In the result, I proceed to pass the following:-
ORDER By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The both accused is hereby sentenced to pay fine of Rs.1,06,00,000/- (Rupees one crore six lakhs only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.1,05,90,000/- (One crore five lakhs ninety thousand only) shall be payable to the complainant as compensation and remaining amount of Rs.10,000/- shall be defrayed as state expense.
In default of payment of fine the accused No.2 being the Director of accused No.1 company shall under go simple imprisonment for a period of 6 months.27 C.C.No.2345 of 2017
SCCH-26 It is further made it clear that if the accused No.2 opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith.
(Dictated to the stenographer, through online computer, thereof is corrected and then pronounced by me in the open Court on this the 24th March 2021) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
ANNEXURE WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:
PW-1: R.M.Nanjundaswamy DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P-1: Cheque
Ex.P-1 (a): Signature of the accused
Ex.P-2: Bank memo
Ex.P-3: Legal Notice
Ex.P-4: Postal cover
Ex.P-5: Notice
Ex.P-6: Postal cover
Ex.P-7: Cheque encashment letter
Ex.P-8: Declaration
Ex.P-9: Certificate of incorporation
28 C.C.No.2345 of 2017
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Ex.P-10: Board resolution
Ex.P-11: Paper publication
Ex.P-12: Certified copy of the mortgage deed
WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
NIL DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
Ex.D.1 - Certified copy of the complaint copy of PCR.No.8212/2016.
(R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.