Bangalore District Court
M/S. Lead Consultancy & vs Engineering Services (India) Pvt on 26 June, 2020
IN THE COURT OF THE IV ADDL. CITY CIVIL AND SESSIONS
JUDGE MAYOHALL UNIT, BENGALURU (CCH21)
Dated: This the 26th day of June 2020
PRESENT:
SRI. MOHAMMED MUJEER ULLA C.G. B.A. LL.B.,
LXXIV Addl. City Civil and Sessions Judge, Bengaluru.
(CONCURRENT CHARGE)
CRL.APPEAL. NO. 25041/2018
APPELLANTS/ 1 M/s. LEAD CONSULTANCY &
ACCUSED ENGINEERING SERVICES (INDIA) PVT
LTD.,
O/at: No.40, 1st Floor
10th A Main, 3rd Cross
2nd Stage, Indiranagar
Bengaluru - 560 038.
REP BY ITS DIRECTOR:
Mr. C.G. Krishna.
2 SRI. C.G. KRISHNA
S/o. Sri. C.V. Ganapathy
Aged about 47 years.
3 SRI. T. SELVARASU
S/o. Sri. K.Maruthachalam
Aged about 48 years.
BOTH ARE W/AT:
M/s. LEAD CONSULTANCY &
2
CRL.A.No.25041/2018
ENGINEERING SERVICES (INDIA) PVT
LTD.,
O/at: No.40, 1st Floor
10th A Main, 3rd Cross
2nd Stage, Indiranagar
Bengaluru - 560 038.
REP BY: SRI. A. SAMPATH
.. Vs ..
RESPONDENT/ SRI. N.R. LAKSHMINARAYANAN
COMPLAINANT: S/o. N.S. Ramabhadracharya
Aged about 54 years
R/at: No.132, Srirangavijayam
7th Main, 3rd Street, 2nd Block
New Income Tax Layout
Nagarabhavi
Bengaluru - 560 072.
JUDGMENT
Appellants, the accused No.1 to 3 in C.C.No.52958/2017, being aggrieved by the judgment of Conviction and Sentence dated:01.03.2018 passed by the Learned LVII Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru convicting them for the offence punishable U/Sec.138 of Negotiable Instruments Act (N.I Act) and imposing fine of Rs.2,500/ each, 3 CRL.A.No.25041/2018 in default of payment of fine, accused No.2 & 3 shall undergo simple imprisonment for 3 months and compensation of Rs.8,00,000/, in default of payment of compensation, accused No.2 & 3 shall undergo simple imprisonment for 1 year, have filed the instant appeal U/Sec.374(3) of Cr.P.C.
2. In this appeal, for convenience the parties are also referred to as per their ranking in the trial court. FACTS OF THE CASE:
3. Accused No.2 and 3 are the Directors of 1 st accused company. As per Ex.P.8 appointment order, accused No.2 and 3 appointed complainant as "Director, Technical" of 1 st accused company with effect from 01.11.2010. Since 01.11.2010 complainant discharged his duty as "Director, Technical" in the 1st accused company to the best of his ability. For discharging day to day official functions, the 1 st accused company has provided Apple Macbook Air laptop to the complainant. The said laptop was being stolen. In this regard, complaint was 4 CRL.A.No.25041/2018 lodged to the concerned police. After the said laptop was being stolen, 1st accusedcompany has provided new Apple Macbook Air laptop to the complainant. While the complainant was working in the 1 st accused company in his capacity as "DirectorTechnical" dispute/misunderstanding arose between him and accused No.2 and 3 on so many aspects. Therefore, the complainant decided to resign from his employment. Accordingly, on 01.8.2016 he submitted resignation letter to accused through mail. The accused accepted his resignation and agreed to relieve him on 31.08.2016. Accordingly, the accused relieved the complainant on 31.08.2016. At the time of relieving the accused asked the complainant to sign on Ex.P.11 final employment settlement letter by accepting Ex.P.1 and 2 two post dated cheques for a sum of Rs.2,00,000/ each towards the salary of the month of September and October 2016. The complainant received the said cheques by making endorsement on Ex.P.11 that, his gratuity and other benefits 5 CRL.A.No.25041/2018 are not settled. Before the complainant was relieved, he handed over the Apple Macbook Air laptop to the 1 st accused company. Complainant presented Ex.P.1 cheque for collection on 01.10.2016 and Ex.P.2 cheque on 31.10.2016. The said cheques were returned without payment with Ex.P.3 & 3 memos dated:01.10.2016 and 09.11.2016 respectively with an endorsement "STOP PAYMENT". After receipt of Ex.P.3 & 4 Memos, the complainant issued Ex.P.5 and 6 legal notices dated:28.10.2016 and 30.11.2016. The said notices were served to the accused on 03.11.2016 and 02.12.2016 respectively. After receipt of notices, accused issued Ex.P.18 replies dated:10.11.2016 and 03.12.2016 denying the liability. After receipt of demand notices, accused did not make the payment of dishonored cheques. Therefore they committed offence punishable U/Sec.138 of N.I.Act. On these and other grounds stated in the in the complaint, the complainant prayed 6 CRL.A.No.25041/2018 to convict the accused for the offence punishable U/Sec.138 of N.I.Act.
4. A perusal of record would show that, the complainant presented the complaint on 17.12.2016. The Learned 14th Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru by perusing the complaint and the documents produced along with it, took cognizance of the offence punishable U/Sec.138 of N.I Act. As per the notification No.ADM.(A).1/18dated:30.12.2016, the case was transferred to 57th Addl. Chief Metropolitan Magistrate, Bengaluru. The learned Magistrate recorded the Sworn statement of the complainant and issued summons to the accused. The accused No.2 & 3 after appearance, pleaded not guilty and submitted that, they are having defence to make.
5. Complainant examined himself as PW1 and produced documents marked at Ex.P.1 to Ex.P.19. After 7 CRL.A.No.25041/2018 completion of the evidence of complainant, the statement of accused No.2 and 3 U/Sec.313 of Cr.P.C was recorded. Accused No.2 and 3 denied all the incriminating evidence found against them in the evidence of complainant. They opted to give defence evidence. Accused No.2 was examined as DW1 and produced documents marked at Ex.D.1 & 2.
6. After hearing the arguments on both side, under the impugned judgment, the Learned 57 th Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru has held accused guilty for the offence punishable U/Sec.138 of N.I Act and imposed fine in a sum of Rs.2,500/ each, in default of payment of fine, accused No.2 & 3 are directed to undergo simple imprisonment for 3 months and compensation of Rs.8,00,000/ was awarded and in default of payment of compensation, accused No.2 & 3 are directed to undergo simple imprisonment for 1 year. Being aggrieved by the impugned judgment, the accused have filed the instant appeal. 8
CRL.A.No.25041/2018
7. In the instant appeal, interalia the accused raised the following grounds:
1. The judgment of the Trial Court is illegal, perverse, improper and contrary to the provisions of N.I.Act.
2. The Trial Court was erred in holding that, the cheques were issued towards the discharge of legally recoverable debt/ liability.
3. The Trial Court was erred in holding that, the complaint is in time.
4. The Trial Court has not appreciated the evidence of accused (DW1) regarding noncompleting of relieving formality by the complainant to receive Ex.P.1 & 2 cheques towards the salary of September and October 2016.9
CRL.A.No.25041/2018
8. Heard the arguments on both side. The counsel on both side in addition to oral arguments, have submitted written arguments.
9. Having regard to the grounds of appeal and the points urged by the counsel on both side in the written arguments, the following points would arise for consideration:
1. Whether the Trial Court was justified in holding that, the complaint is in time?
2. Whether the Trial Court was justified in holding that, Ex.P.1 & 2 cheques were issued towards the discharge of legally recoverable debt/ liability?
3. Whether the Trial Court was justified in convicting the accused for the offence punishable U/Sec.138 of N.I.Act?
4. Whether the fine and compensation awarded by the Trial Court is justifiable?10
CRL.A.No.25041/2018
5. What order?
10. My findings on the above points are as under:
Point No.1: In the Partly in Affirmative.
Point No.2: In the Affirmative.
Point No.3: In the Affirmative.
Point No.4: In the Negative.
Point No.5: As per the final order for the following:
REASONS UNDISPUTED FACTS
11. In the instant case, there is no dispute that, complainant was working as "Director - Technical" in the 1 st accused company since 01.11.2010; he voluntarily submitted resignation on 01.08.2016; on 31.08.2016 he was relieved; at the time of relieving, Ex.P.11 Final Employment Settlement Letter was made and the complainant by making an endorsement on the said letter has received Ex.P.1 & 2 two 11 CRL.A.No.25041/2018 post dated cheques towards the salary for the month of September & October 2016; the said 2 cheques were dishonored in view of "Stop Payment" instruction given by accused; after the cheques were dishonored, complainant has issued Ex.P.5 & 6 notices; after the receipt of said notices, accused sent reply dated:10.11.2016 & 03.12.2016 together marked at Ex.P.18 denying the liability.
12. POINT NO.1: The complainant has filed the instant complaint on the basis of two dishonored cheques marked at Ex.P.1 & 2. Ex.P.1 Cheque is dated:30.09.2016. It was presented for collection on 01.10.2016. On the same day, the bank has issued Ex.P.3 Memo stating that, the cheque was returned without payment in view of stop payment instructions given by the drawer. After receipt of Ex.P.3 Memo, the complainant has issued Ex.P.5 Notice dated:28.10.2016. Thus the demand notice was issued within a month after receipt of Ex.P.3 Memo. Hence the notice was issued in time. It was 12 CRL.A.No.25041/2018 served to the accused on 03.11.2016. After receipt of notice, accused sent Ex.P.18 Reply dated:10.11.2016 denying the liability. The complainant presented the complaint on 17.12.2016. Thus the complaint was filed within 45 days from the date of service of notice to the accused. Hence the complaint in respect of Ex.P.1 Cheque is in time.
13. Ex.P.2 Cheque is dated:31.10.2016. It was presented for collection on the same day. The bank has issued Ex.P.4 Memo dated:04.11.2016. The complainant has issued Ex.P.6 demand notice dated:30.11.2016. Thus the demand notice as contemplated U/Sec.138 of N.I.Act was issued within a month from the date of receipt of Ex.P.4 Memo. Hence the notice was issued in time. Ex.P.7 are the postal acknowledgment. A perusal of 3 postal endorsement pertaining to Ex.P.6 Demand notice would show that, the said notice was sent by registered post on 01.12.2016. The postman has not mentioned the date of service on postal 13 CRL.A.No.25041/2018 acknowledgment. The receiver of the registered post also not noted the date of receipt. Thus there is no documentary evidence to prove, on which date Ex.P.6 Notice was served to accused. During the course of cross examination, complainant by seeing the documents available on record has stated that, Ex.P.6 Notice was served to the accused on 02.12.2016. As stated above, Ex.P.6 Notice was posted on 01.12.2016. After process in the post office the register post will be handed over to the concerned postman for delivery. If it is served on the next day, it would be considered as fastest delivery. Therefore there is no reason to disbelieve the statement of PW1 that, the demand notice was served to accused on 02.12.2016. In Ex.P.6 Notice, as contemplated U/Sec.138 of N.I.Act accused were called upon to make the payment of dishonored cheque within 15 days from the date of receipt of the said notice. The said 15 days would expire on 17.12.2016. The complaint was presented on the very same day.
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14. The learned counsel for the accused/ appellant placing reliance on the judgment of Hon'ble Supreme Court of India, in the case of "YOGENDRA PRATAP SINGH V/S. SAVITRI PANDEY & ANOTHER - REPORTED IN (2014) 10 SCC 713", has strenuously contended that, the instant complaint filed before the expiry of 15 days from the date of service of Ex.P.6 Notice is not maintainable. In the said judgment, the 3 judge bench of Hon'ble Supreme Court of India has held as under:
"A. Debt, Financial and Monetary Laws - Negotiable Instruments Act, 1881 - S. 138 proviso (c) and S. 142(b) -
Dishonor of cheque - Complaint in respect of - Maintainability of -
Offence under S.138 - cheque before the expiry of 15 days from date of receipt of notice under S.138 proviso (c) because the drawer/accused cannot be said to have committed any offence until then nor is there any accrual of cause of action for filing of complaint under S.138 of the NI Act until then - Any complaint 15 CRL.A.No.25041/2018 filed before expiry of the said 15 days is non est - Hence, no cognizance of an offence can be taken on basis of such non est complaint - Thus, if a complaint at all in the eye of the law, it is not open to the court to take cognizance of such a non est complaint merely because on the date of consideration or taking cognizance thereof a period of 15 days from the date on which the notice has been served on the drawer/ accused has elapsed.
B. ............
C. Debt, Financial and Monetary Laws - Negotiable Instruments Act, 1881 - S. 138 -
Ingredients of offence under -
Held, for completion of an offence under S.138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all the three eventualities mentioned in cls.
(a), (b) and (c) of the proviso to S. 138 are satisfied."
15. The learned counsel for the complainant has strenuously contended that, after receipt of Ex.P.6 Notice, the accused have issued Ex.P.18 Reply dated:03.12.2016 denying 16 CRL.A.No.25041/2018 the liability. He submits that, the purpose of issuing statutory notice is to protect the honest drawer to make payment within 15 days from the date of receipt of notice to avoid prosecution. The said 15 days time is not available to the dishonest drawers to deny liability. In the instant case, accused issued Ex.P.18 Reply dated:03.12.2016 denying the liability. Therefore the cause of action to file the complaint would start from the date of service of Ex.P.18 reply to the complainant. Hence the instant complaint filed on 17.12.2016 is in time. He submits that, in the case of YOGENDRA PRATAP SINGH cited supra, there is no reply by the accused denying the liability. Therefore in the said case, it has been held that, the complaint filed before the expiry of 15 days from the date of service of notice is not maintainable. Therefore the said judgment is not applicable to the case on hand. In support of his arguments, the learned counsel for the complainant placed reliance on the following judgments:
17
CRL.A.No.25041/2018
1. SAGAYA AROCKIYA RAJ V/S. GANESH KUMAR - 2016 SCC ONLINE MAD 24157
2. RAJENDRAN V/S. DANAPAL PILLAI -
1997 SCC ONLINE MAD 1005.
16. In the case of "SHAM SUNDER V/s. STATE OF HARYANA" - reported in 1989 AIR 1982, the Hon'ble Supreme Court of India has held that, a clear language is needed to create a crime and a statute enacting an offence of imposing penalty is to be construed strictly. In the case of "M/S. VIRTUAL SOFT SYSTEM LIMITED V/S. COMMISSIONER OF INCOME TAX" - reported in APPEAL (CIVIL) 7115/2005, the Hon'ble Supreme court of India has held that, the statute provided for penal prosecution has to be construed strictly and narrowly and not widely or with the object of advancing the object and intention of the legislation. The statute creating the penalty is the first and the last consideration and must be construed within the term and language of the particular statute.
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17. Keeping in view the above said principle regarding interpretation of a statute enacting an offence, the Court has to appreciate the arguments advanced by the counsel on both side.
18. Sec.138 of N.I.Act reads thus:
"138. DISHONOR OF CHEQUE FOR INSUFFICIENCY, ETC., OF FUNDS IN THE ACCOUNT. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from the account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with 19 CRL.A.No.25041/2018 both: Provided that nothing contained in this section shall apply unless
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice."
19. A bare reading of Sec.138 of N.I.Act and its 3 provisos namely (a), (b) & (c), it is clear that, to constitute an offence U/Sec.138 of N.I.Act, the conditions stated in provisos
(a) to (c) shall have to be complied with. Proviso (a) to Sec.138 of N.I.Act says that, the cheque is to be presented within 6 20 CRL.A.No.25041/2018 months. Proviso (b) says that, after dishonor of cheque, demand notice is to be issued within 30 days from the date of receipt of information from the bank regarding dishonoring of cheque. Proviso (c) says that, the drawer of a cheque fails to make the payment to the payee/ the holder in due course of a cheque within 15 DAYS from the receipt of the demand notice. From the language employed in the provisos to Sec.138 of N.I.Act, it is clear that, all the above cited 3 provisos shall have to be complied with to constitute an offence punishable U/Sec.138 of N.I.Act. Otherwise it is not an offence. The language of Sec.138 of N.I.Act is clear and unambiguous. It is settled principle of law that, while interpreting a penal provision, when the language of the statute is clear and unambiguous, the Court cannot add or subtract the words. If the intention of the legislation is to give 15 days time for payment of amount of dishonored cheque only for the prompt drawers and not to the drawer who denies liability, the 21 CRL.A.No.25041/2018 legislation could have specifically stated the same in the proviso or would have given an explanation. In Sec.138 of N.I.Act nowhere it is stated that, after service of notice, if the drawer of a cheque issued reply denying the liability, there is no necessity for the payee or the holder in due course to wait for 15 days to file a complaint. The Hon'ble Supreme Court of India in the case of "YOGENDRA PRATAP SINGH" cited supra, while interpreting the provisions of Sec.138 of N.I.Act, has overruled the judgments wherein, it has been held that, in respect of premature complaints, if the Court takes the cognizance after expiry of 15 days from the date of service of notice, the complaint is maintainable. In the said judgment, the Hon'ble Supreme Court of India has clearly held that, if the complaint has been filed before the expiry of 15 days from the date of service of notice, it being no complaint at all in the eye of law. Therefore it is not open to the Court to take cognizance of such a nonest complaint merely because on the date of 22 CRL.A.No.25041/2018 taking cognizance, the period of 15 days from the date of service of notice has been elapsed. In view of the ratio laid down by 3 judge bench of Hon'ble Supreme Court of India, in the case of YOGENDRA PRATAP SINGH, I am of the view that, the judgments of the Hon'ble High Court of Madras, cited by the learned counsel for the complainant in the case of "SAGAYA AROCKIYA RAJ V/S. GANESH KUMAR" and "RAJENDRAN V/s. DANAPAL PILLAI", which are having persuasive value, cannot be relied upon. In view of the above, I hold that, the complaint in respect of Ex.P.2 Cheque is premature. It was filed without complying the proviso (c) to Sec.138 of N.I.Act. Therefore as on the date of presentation of complaint, there is no offence punishable U/Sec.138 of N.I.Act, in respect of Ex.P.2 Cheque. In view of the above, I hold that, the Trial Court is not justified in holding that, the complaint in respect of Ex.P.2 Cheque is in time. Accordingly, I answer Point No.1 PARTLY IN AFFIRMATIVE.
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20. POINT NO.2: While answering Point No.1 I have held that, in respect of Ex.P.1 cheque the complaint was presented by complying the requirements of Sec.138 of N.I.Act and the complaint is in time. In view of my said finding, as per the 3 judge bench judgment of Hon'ble Supreme Court of India in the case of "RANGAPPA V/S. MOHAN", the Court has to draw a presumption that, Ex.P.1 Cheque was drawn towards the discharge of legally recoverable debt or liability. It is settled principle of law that, the said presumption is a rebuttable one and the burden is on the accused to rebut the said presumption.
21. In the instant case, accused by producing Ex.D.1 & 2 bank statements contend that, as on the date of presentation of Ex.P.1 & 2 cheques sufficient funds were available in the bank account of 1 st accused company to honor Ex.P.1 & 2 cheques. Therefore Ex.P.1 & 2 cheques were not dishonored 24 CRL.A.No.25041/2018 for insufficiency of funds. Hence Sec.138 of N.I.Act would not attract.
22. The learned counsel for the complainant has placed reliance on the following judgments:
1. GOAPLAST (P) LTD V/S. CHICO URSULA D'SOUZA & ANOTHER (2003)3 SCC
232.In this judgment, it has been held as under:
"A. Negotiable Instruments Act, 1881 - Ss.138, 139 (Ch. XVII), 5 and 6 - Stop payment - Applicability of S.138 and nature of presumption under S.139 - Drawer issuing to a person a post-
dated cheque and then instructing the bank not to make payment - Consequently, cheque bouncing - In such circumstances, notwithstanding that payment was stopped prior to the due date of the cheque, held, S.138 became applicable."
2. LAXMI DYECHEM V/S. STATE OF GUJARAT & OTHERS - (2012) 13 SCC 375. In this judgment, it has been held as under:
"A. Debt, Financial and Monetary Laws - Negotiable Instruments Act, 1881 - Ss.138 and 142 - Applicability - Dishonour of cheque on ground that signatures of drawer did not match specimen signatures available with the bank - Endorsement "drawer's signature differ from specimen supplied" and/or "no image found- signature" and/or "incomplete signature/illegible" on return/dishonor of cheque, held, attracts S.138 - Plea for strict 25 CRL.A.No.25041/2018 construction of penal provision under S.138 where dishonor necessarily constitutes an offence for only one of the two contingencies envisaged under the provision, rejected - Words "amount of money standing to the credit of that account is insufficient to honor the cheque", interpreted - Hence, dishonor on ground that the payment has been stopped, regardless whether stoppage is with or without notice to the drawer, and regardless whether stoppage of payment is on ground that amount lying in the account was not sufficient to meet the requirement of the cheque, attracts S.138."
23. In the above cited judgments, it has been held that, Sec.138 of N.I.Act would attract, even if the cheque is dishonored in view of stop payment instructions given by the drawer of the cheque. Availability of insufficient funds in the bank account of accused or not, is not only the relevant point for consideration to decide, whether the provisions of Sec.138 of N.I.Act would attract or not. Despite there is sufficient funds in the bank account of accused, if he issue stop payment instructions or put signature on the cheque different from specimen signatures with a dishonest intention of not honoring the cheque are also the important factors for consideration. After issuance of cheque towards legally recoverable debt or 26 CRL.A.No.25041/2018 liability, to avoid payment, if stop payment instruction is given, despite sufficient funds are available in the bank account of accused, as per the ratio laid down by Hon'ble Supreme Court of India in the above cited judgment, the provisions of Sec.138 of N.I.Act would attract.
24. In the instant case, the complainant contends that, accused after issuance of Ex.P.1 & 2 post dated cheques towards the payment of salary for the month of September and October 2016, have given stop payment instruction to the bank with dishonest intention to avoid payment. On the other hand the accused contend that, as per the terms of employment, in view of complainant submitted resignation voluntarily, he is not entitled for 3 months salary. Therefore they are not liable to pay salary for the month of September & October 2016. Therefore either at the time of issuance of Ex.P.1 & 2 cheques or on the dates mentioned therein, accused were not in due or liability to pay Rs.4,00,000/ to the complainant. Hence Ex.P.1 27 CRL.A.No.25041/2018 & 2 cheques are not towards the discharge of any legally recoverable debt or liability.
25. The learned counsel for the appellants placing reliance on the judgment of Hon'ble High Court of Karnataka in the case of "PRABHAKAR MURTHY V/S. S.G.SHANKARAIAH" - reported in LAWS (KAR) 2015 1284 and "sHANTERI JEMA JEWELLARY V/S. T.K.PRABHAKARAN" - reported in LAWS (KAR) 2014 3326, has strenuously contended that, immediately after complainant taken away Ex.P.1 & 2 cheques and before the dates of honoring of the said post dated cheques, accused issued Notices and called upon the complainant to come to the 1 st accused company for complying the process of handing over of charge and not to present the cheques till the process of handing over of charge is completed. In the notices, it was also intimated to the complainant that, stop payment instructions was given to the bank. The counsel for the accused submits that, as per the terms of Ex.P.8 Letter 28 CRL.A.No.25041/2018 of Appointment, in view of complainant voluntarily submitted resignation, he is not entitled for 3 months salary. Therefore the burden is on the complainant to prove that, accused are liable to pay 2 months salary to him and therefore Ex.P.1 & 2 cheques were issued towards discharge of liability.
26. I went through the above cited judgments. There is no dispute that, in a prosecution for the offence punishable U/Sec.138 of N.I.Act, the burden of disproving the case of the complainant beyond reasonable doubt, cannot be placed upon the accused. The burden is on the complainant to prove his case. After receipt of demand notice, if the accused issued reply put forthing the grounds under which it appears to a prudent man that, there was no debt or liability and probabalise the same, the onus shifts on the complainant to prove that, the cheque in question was issued towards the discharge of legally recoverable debt. Keeping in view the ratio laid down in the above cited judgment regarding burden of 29 CRL.A.No.25041/2018 proof and onus of proof, let us consider the material on record to appreciate the rival contentions.
27. It is the definite case of the complainant that, accused have issued Ex.P.1 & 2 cheques towards the payment of salary for the month of September & October 2016. To prove the same, complainant is placing reliance on Ex.P.11 Final Employment Settlement Letter dated:30.08.2016. Ex.P.11 contains salary slips of complainant for the month of August to October 2016. The recitals of Ex.P.11 excluding salary slips are relevant to appreciate the rival contentions. Therefore they are extract below:
1. THE FIRST PARA OF EX.P.11 READS THUS:
"This refers to our various discussions and we would like to inform that your balance notice period payment will be paid in the form of post dated cheques as per the salary slips with break up shown below."
2. THE LAST 2 PARAS OF EX.P.11 READS THUS:
30
CRL.A.No.25041/2018 "As you are aware, your notice period of employment started on 01st August 2016 and ends on 31st October 2016. The August month salary is being credit to your HDFC account and the balance two months salary being issued in the form of the following post dated cheque for September and October 2016.
1) Cheque No.3386 dt.30/09/2016
Amt. 200,000/.
2) Cheque No.3387 dt.31/10/2016
Amt. 200,000/.
Your acceptance of this letter and
subject to the realization of the above 2 post dated cheques, it will be considered as a no payment dues from both sides and it is a full settlement in all respects."
28. From the above extracted recitals of Ex.P.11 admittedly issued by accused, it is clear that, after complainant submitted resignation, discussions took place between the complainant and accused and after discussions, accused consciously agreed to pay 3 months salary to the complainant. When such is the case, the recitals of Ex.P.8 Letter of employment which is silent regarding payment of 3 months salary on submission of resignation voluntarily by the 31 CRL.A.No.25041/2018 complainant is of no assistance to the accused to probabalise their defence that, in view of complainant voluntarily submitted resignation, they are not liable to pay 3 months salary to him. Therefore Ex.P.1 & 2 cheques were not issued towards the discharge of legally recoverable debt/ liability.
29. In Ex.P.18 Reply, it is stated that, complainant has forcibly taken away Ex.P.1 & 2 cheques. During the cross examination of complainant (PW1), no attempt was made to elicit that, complainant forcefully taken away Ex.P.1 & 2 cheques. 2Nd accused who was examined as DW1 in his evidence has not stated that, complainant forcibly taken away Ex.P.1 & 2 cheques. Thus there is zero evidence to probabalise the defence taken by accused in Ex.P.18 reply that, on 31.08.2016 complainant forcibly taken avay Ex.P.1 & 2 cheques.32
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30. Accused contend that, after submitting of resignation, complainant has not completed charge handing over process. He did not hand over another laptop which he claims to have lost and he handed over one laptop by deleting all the important data. The accused contend that, Ex.P.1 & 2 cheques were drawn with a good gesture subject to complainant handing over another laptop which he claims to have lost and complete the process of handing over of charge. In view of complainant not handed over another laptop and did not comply the process of handing over of charge, he is not entitled for encashment of Ex.P.1 & 2 cheques which were issued subject to complying the above process.
31. Accused have admitted Ex.P.11 Final Employment Settlement Letter. In Ex.P.11 nowhere it is stated that, Ex.P.1 & 2 cheques were issued subject to complainant returning another laptop which he claims to have lost and comply the process of handing over of charge. Complainant has produced 33 CRL.A.No.25041/2018 Ex.P.19. A perusal of the same would show that, he handed over one laptop and other materials to the concerned of 1 st accused company. 2nd accused who was examined as DW1 has admitted that, Account Manager Mr.Chethan B.H informed him about complainant taking Ex.P.1 & 2 cheques and handing over the laptop at the time of leaving the 1 st accused company. The above statement of accused No.2 would falsify the contention of the accused that, complainant forcibly taken away Ex.P.1 & 2 cheques.
32. In the instant case, the main contention of the accused is that, complainant has handed over a laptop by deleting the important data. Therefore the accused sustained loss. Hence the complainant is not entitled to encash Ex.P.1 & 2 cheques. As I have already stated above, the recitals of Ex.P.11 Final Employment Settlement Letter prepared by accused will not support their contention that, in view of complainant handed over laptop by deleting the data, he is not 34 CRL.A.No.25041/2018 entitled for encashment of Ex.P.1 & 2 cheques which were admittedly issued towards the payment of salary for the month of September & October 2016. DW1 in the cross examination has stated that, in 2013 1 st accused company has installed Centralized Server. He stated that, all the engineers of 1st accused company has the central storage unit to store all the data and designs. Data includes designs, drawing, technical specifications, client communications, marketing proposals, etc., Therefore the contention of the accused that, in view of complainant has deleted the data available in the laptop and handed over an empty laptop, heavy loss and inconvenience was caused to 1 st accused company, therefore the complainant is not entitled for encashment of Ex.P.1 & 2 cheques, is not sustainable.
33. Complainant has produced the Order passed by the Hon'ble High Court of Karnataka, in Crl.P.No.6828/2016. A perusal of the same would show that, on the basis of 35 CRL.A.No.25041/2018 complaint given by accused, FIR was registered against complainant for misappropriation while handing over charge on 31.08.2016. The Hon'ble High Court of Karnataka has quashed the said FIR registered in Indiranagar police station. The said order has reached finality. Therefore the contention of the accused that, the complainant has not complied the formality/ process of handing over of charge, therefore he is not entitled for encashment of Ex.P.1 & 2 cheques, hence the stop payment instruction was given, is not sustainable. For the sake of arguments, if the contention of the accused that, the complainant was guilty of misappropriation while handing over of charge is accepted, I am of the view that, on that count, the accused cannot escape from the liability of payment of amount covered in Ex.P.1 & 2 cheques. If any misappropriation by complainant while handing over charge & for that if the accused sustained loss, the accused have to take separate steps for that, in accordance with law. At the cost of repetition, 36 CRL.A.No.25041/2018 I would say that, from the recitals of Ex.P.11 Final Employment Settlement Letter it is clear that, Ex.P.1 & 2 cheques were not issued subject to complainant subject to complying the process of handing over of charge to the satisfaction of the accused. The only condition mentioned in Ex.P.11 is that, the complainant has to accept those cheques as full and final settlement. Complainant has received the said cheques by making endorsement that, except gratuity as per Act + IMR Rs.92,000/, he received the said cheques towards salary. Whether accepting of 2 cheques would be considered as full and final settlement in all respects or it is subject to gratuity and IMR are not the relevant points for consideration in this case. The parties are at liberty to raise their respective contentions on those aspects before the proper forum. But by raising the above ground or on any other grounds not mentioned in Ex.P.11 Final Employment Settlement Letter, the accused cannot deny payment of amount covered in Ex.P.1 & 37 CRL.A.No.25041/2018 2 cheques. After the complainant submitted resignation voluntarily and after due discussion, when the accused consciously issued Ex.P.1 & 2 cheques towards the payment of salary for the month of September and October 2016, they are estopped from making payment of the amount covered in the said cheques by raising contentions which are foreign to the terms and conditions of Ex.P.11 Final Employment Settlement Letter. In view of the above, I hold that, the contentions raised by accused for giving stop payment instruction to prevent honoring of Ex.P.1 & 2 cheques are not sustainable.
34. In view of the above, I hold that, the Trial Court by appreciating the evidence on record in the proper perspective has rightly held that, Ex.P.1 & 2 cheques were issued towards the discharge of legally recoverable liability. Accordingly, I answer Point No.2 in the AFFIRMATIVE.
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35. POINT NO.3: In view of my finding of Point No.1 that, the complainant filed in respect of Ex.P.1 cheque is in time and the said cheque was issued towards the discharge of legally recoverable liability, I am of the view that, the Trial Court was justified in holding that, the accused committed offence punishable U/Sec.138 of N.I.Act. In view of the above, I answer Point No.3 in the AFFIRMATIVE.
36. POINT NO.4: The Trial Court after holding the accused guilty of the offence punishable U/Sec.138 of N.I.Act, has imposed fine of Rs.2,500/ each and in default of payment of fine, accused No.2 & 3 were directed to undergo simple imprisonment for 3 months. Acting U/Sec.357 of Cr.P.C., the Trial Court has awarded compensation of Rs.8,00,000/ and in default of payment of compensation, accused No.2 & 3 were directed to undergo simple imprisonment for 1 year. In para No.42 of the impugned judgment, the Trial Court has referred to the judgment of Hon'ble Supreme court of India in the case 39 CRL.A.No.25041/2018 of "SUGINTHI SURESH KUMAR V/S. JAGADISHAN", wherein it has been held that, to enforce an order of compensation, the Court can impose sentence in default of payment compensation.
37. A perusal of the operative portion of the impugned judgment would show that, the Trial Court has awarded compensation by exercising powers U/Sec.357(3) of Cr.P.C. Sec.357 of Cr.P.C. reads thus:
"SECTION 357(1) IN THE CODE OF CRIMINAL PROCEDURE, 1973:
(1) When a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, when passing judgment, order the whole or any part of the fine recovered to be applied
(a) in defraying the expenses properly incurred in the prosecution;
(b) in the payment to any person of compensation for any loss or injury caused by the offence, when compensation is, in the opinion of the Court, recoverable by such person in a Civil Court;40
CRL.A.No.25041/2018
(c) when any person is convicted of any offence for having caused the death of another person or of having abetted the commission of such an offence, in paying compensation to the persons who are, under the Fatal Accidents Act, 1855 (13 of 1855 ), entitled to recover damages from the person sentenced for the loss resulting to them from such death;
(d) when any person is convicted of any offence which includes theft, criminal misappropriation, criminal breach of trust, or cheating, or of having dishonestly received or retained, or of having voluntarily assisted in disposing of, stolen property knowing or having reason to believe the same to be stolen in compensating any bona fide purchaser of such property for the loss of the same if such property is restored to the possession of the person entitled thereto.
(2) If the fine is imposed in a case which is subject to appeal, no such payment shall be made before the period allowed for presenting the appeal has elapsed, or, if an appeal be presented, before the decision of the appeal.
(3) When a Court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment, order the accused 41 CRL.A.No.25041/2018 person to pay, by way of compensation, such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced.
(4) .................
(5) ................."
38. As per Sec.357(1) of Cr.P.C., after convicting accused, if the court has imposed a sentence of fine or a sentence of imprisonment and fine, the Court may pass an order to pay the whole or a part of fine recovered as compensation for any loss or injury caused by the said offence. In the instant case, the substantive sentence awarded by the Trial Court for the offence punishable U/Sec.138 of N.I.Act is fine of Rs.5,000/. As per Sec.138 of N.I.Act, in addition to sentence of imprisonment, the Court is having power to impose fine double the cheque amount. Despite such vast power is given U/Sec.138 of N.I.Act, the Trial Court has awarded fine of Rs.5,000/ only despite the amount of dishonored cheques is 42 CRL.A.No.25041/2018 Rs.4,00,000/. In view of meager amount was imposed as fine having regard to the amount of dishonored cheque, the whole or part of the fine amount cannot be an adequate compensation to the complainant. Therefore it appears that, acting U/Sec.357(3) of Cr.P.C., the Trial Court has awarded compensation of Rs.8,00,000/ to the complainant. A reading of Sec.357(3) of Cr.P.C., it is clear that, when the substantive sentence does not include fine, then the Court can award compensation U/Sec.357(3) of Cr.P.C. In other words, if the substantive sentence is only imprisonment and not fine, then under Sec.357(3) of Cr.P.C., a separate sum can be awarded as compensation. In the instant case, in view of the substantive sentence is a fine, the Court cannot invoke Sec.357(3) of Cr.P.C. and grant compensation separately.
39. Sec.30 of Cr.P.C deals regarding sentence of imprisonment in default of fine. It reads thus: 43
CRL.A.No.25041/2018 "30. SENTENCES OF IMPRISONMENT IN DEFAULT OF FINE.
(1) The Court of a Magistrate may award such term of imprisonment in default of payment of fine as is authorised by law: Provided that the term
(a) is not in excess of the powers of the Magistrate under section 29;
(b) shall not, where imprisonment has been awarded as part of the substantive sentence, exceed one fourth of the term of imprisonment which the Magistrate is competent to inflict as punishment for the offence otherwise than as imprisonment in default of payment of the fine.
(2) The imprisonment awarded under this section may be in addition to a substantive sentence of imprisonment for the maximum term awardable by the Magistrate under section 29."
40. From Sec.30(1b) of Cr.P.C., it is clear that, the default sentence for nonpayment of fine shall not exceed ¼ th of the term of imprisonment which the magistrate is competent to award as a punishment for the offence. In the instant case, accused were held guilty for the offence punishable U/Sec.138 44 CRL.A.No.25041/2018 of N.I.Act. The maximum punishment for the said offence is 2 years. A perusal of impugned judgment would show that, the Trial Court has directed the accused No. 2 & 3 to undergo simple imprisonment for 1 year 3 months. Therefore the default sentence is not in accordance with Sec.30 of Cr.P.C. In addition to that, in view of my finding that, the complaint in respect of Ex.P.2 cheque is not in time, the Court cannot grant compensation by taking into consideration the amount covered in the said cheque. In view of the above, I hold that, granting compensation U/Sec.357(3) of Cr.P.C and default sentence of simple imprisonment for 1 year after awarding the substantive sentence as fine of Rs.2,500/ each on accused No.2 & 3 and default sentence of simple imprisonment for 3 months for nonpayment of fine is not in conformity with Sec.30 and Sec.357 of Cr.P.C. In view of the above, I hold that, the Trial Court is not justified in imposing meager sum of Rs.2,500/ 45 CRL.A.No.25041/2018 each as fine and default sentence of 3 months and compensation of Rs.8,00,000/ and default sentence of 1 year.
41. As I have already stated above, as per Sec.138 of N.I.Act, the Court is having power to grant fine double the amount of dishonored cheque. Ex.P.1 Cheque is dated:30.09.2016. Judgment was pronounced on 01.03.2018 i.e., 18 months after issuance of Ex.P.1 Cheque. The appeal is disposed off after 44 months of issuance of Ex.P.1 Cheque. U/Sec.80 of N.I.Act, the Court can grant interest at the rate of 18% per annum. Therefore if the interest of 44 months is calculated at the rate of 18% per annum, it comes to Rs.1,32,000/. The complainant by engaging counsel prosecuted the case in the Trial Court for 1½ years and defended this appeal for more than 2 years. If litigation expenses is included, I am of the view that, it would be just and reasonable to award fine of Rs.4,00,000/ i.e., double the amount of Ex.P.1 Cheque. Therefore having regard to the 46 CRL.A.No.25041/2018 amount covered under Ex.P.1 cheque, the duration of prosecution and other facts and circumstances of the case, it would be just and reasonable to impose fine of Rs.4,00,000/. In view of the above, I answer point No.4 in the NEGATIVE.
42. POINT NO.5: In view of my findings on point No.1 & 2, I pass the following:
ORDER Appeal is allowed in part.
The Judgment passed by the Learned LVII Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru in C.C.No.52958/2017, dated:01.03.2018, convicting the accused for the offence punishable U/Sec.138 of N.I.Act is confirmed.
The sentence of fine and compensation awarded by Trial Court is set aside and the following sentence is passed:
For the offence punishable U/Sec.138 of N.I.Act., accused No.2 & 3 is sentenced to 47 CRL.A.No.25041/2018 pay fine of Rs.4,00,000/ and in default of payment of fine, he is directed to undergo simple imprisonment for 6 months.
Out of fine amount, a sum of Rs.3,95,000/ is awarded as compensation to the complainant.
Send Trial Court Record (TCR) to the Trial Court.
No order as to costs.
****** [Dictated to the Stenographer, after computerization, corrected, signed and then pronounced by me in the open Court on this the 26th day of June 2020].
[MOHAMMED MUJEER ULLA C.G] C/C. IV Addl. City Civil & Sessions Judge, Mayo hall, Bengaluru.