Bangalore District Court
Manish Aluminium Pvt. Ltd vs Anupam Seals Pvt. Ltd on 7 May, 2024
1 CC.No.20264/2017
KABC030886982017
IN THE COURT OF THE XV ADDL. CHIEF METROPOLITAN
MAGISTRATE, AT BANGALORE
Dated this the 7th day of MAY 2024
Present:
SMT SUJATA SIDAGOUDA PATIL,
B.SC.,LL.B.
C/c XV Addl. Chief Metropolitan Magistrate,
Bangalore.
CC NO.20264/2017
Complainant : MANISH ALUMINIUM PVT LTD.,
No.96, KIADB, 1st Phase,
Bommasandra Industrial Area,
Bangalore-560 099
Rep.by its Director
Prakashchand Jain,
S/o Sri.Late Jethmal Jain,
Aged about 53 years,
Administrative Office,
Manish Aluminium Pvt Ltd.,
No.175/3A, Bharat Complex,
Arcot Srinivasa Char Street,
Bengaluru-560 053.
Letter of Authority Holder for
Sukhraj Bhandari
S/o Late Dhanaji Bhandari,
Aged about 60 years,
No.64/01, Model House Street,
Basavanagudi,
Bengaluru-560 004.
(By Sri T.Raamaanjinappa -Advocate )
V/s
2 CC.No.20264/2017
Accused : 1.ANUPAM SEALS Pvt Ltd.,
Gala No.5 & 65
Surya Kirti Industrial Estate,
Plot No.8, Off: National Highway
No.8 Vasai Phata, Opp.Prakash Dal Mill,
VASAI(EAST)401 208
Rep.by its Director/CEO
General Manager,
KETAN L.SHAH
S/o Sri.Laxmikant Shah
2.KETAN.L.SHAH
S/o Sri.Laxmikatn Shah
Director/CEO
General Manager,
ANUPAM SEALS Pvt Ltd.,
Gala No.5 & 65
Surya Kirti Industrial Estate,
Plot No.8, Off: National Highway
No.8 Vasai Phata, Opp.Prakash Dal Mill,
VASAI(EAST)401 208
3.VANDANA KETAN SHAH
W/o Sri.Ketan Shah
Director of
ANUPAM SEALS Pvt Ltd.,
Gala No.5 & 65
Surya Kirti Industrial Estate,
Plot No.8, Off: National Highway
No.8 Vasai Phata, Opp.Prakash Dal Mill,
VASAI(EAST)401 208
(Accused No.2&3 deleted as per order
dated 3.6.2019)
4.KIRIT CHEDDA
S/o Umershi,
Aged about 57 years,
Proprietor of
Chirag Corporation
No.05, Old Amant Bhutan,
No.263/65, Narshinatha Street,
Bhaat Bazar, Mumbai-400 009
(By Sri Santhosh Kumar.H.S- Advocate)
3 CC.No.20264/2017
1. Date of Commencement 22.05.2017
of offence
2. Date of report of offence 20.07.2017
3. Name of the MANISH ALUMINIUM PVT LTD.,
Complainant
4. Date of recording of 19.09.2018
evidence
5. Date of closing of 27.02.2024
evidence
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused No.1&4 are Convicted
8. Complainant TR- Advocate
Represented by
9. Accused defense by SK - Advocate
JUDGMENT
The complainant filed the complaint under Sec.200 Cr.P.C. against the accused for the offence punishable under Sec.138 Negotiable Instruments Act (For short N.I.Act).
2. The brief facts of the case is as under:
The complainant company is private company duly registered and incorporated under the company Act 1956. The accused company including its directors accused No.2 & 3 have placed purchase order for suppliance of steel materials. Accordingly, complainant company has supplied the claimed materials. Towards payment the accused persons issued cheque in dispute. Hence, the amount mentioned under the cheque is legally dischargeable debt which is towards a part payment. On behalf of accused No.2&3 the accused No.4 accepting their liability issued cheque bearing No.354905 dt 4 CC.No.20264/2017 22.05.2017 for Rs.3,10,440/- drawn on The Shamrao Vittal Co-
operative Bank Ltd., SVC Bank, Mulund (West) Mumbai . The complainant presented said cheque though its banker and the same returned dishonored for the reason "Funds Insufficient ". On receipt of said intimation, the complainant got issued legal notice dt.20.06.2017 to pay the due amount. Despite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint.
3. After filing of the complaint, cognizance taken and recorded the sworn statement of the complainant. The complainant has complied all the statutory requirements under Sec.138 of N.I.Act. Thereafter, the case is registered against the accused and summons issued to all accused No.1 to 4. Accused No.2 to 4 appeared through their counsel and obtained bail. Later on at the time of recording of plea with respect to the accused No.2 & 3 PW1 has filed memo to delete the name of the accused No.2 & 3 from the cause title. Thereafter court has passed order on 3.6.2019 and deleted the names of the accused NO.2 & 3 and proceed only against accused No.1 & 4 by setting aside the objections raised by the accused No.4. Copy of the complaint furnished to the accused No.4. Plea recorded and read out to the accused No.4. The accused No.4 pleaded not guilty and claimed to be tried.
4. In support of the complainant's case, the Authorized signatory of the complainant company got examined as PW1 got 5 CC.No.20264/2017 marked Ex.P.1 to Ex.P.8. After closure of the evidence of the complainant, 313 Cr.P.C statement of the accused No.4 has been recorded. The accused denied the incriminating evidence placed by the complainant. The accused No.4 has not chosen to lead defense evidence. Hence, defense evidence taken as Nil.
5. Heard arguments and perused the material on record.
6. On the basis of the contents of the complaint the following points arise for my consideration. :
1. Whether the complainant proves beyond reasonable doubt that the accused issued cheque ie cheque bearing No.354905 dt 22.05.2017 Rs.3,10,440/-
drawn on The Shamrao Vittal Co-operative Bank Ltd., SVC Bank, Mulund (West) Mumbai in favour of the complainant towards discharge of legal liability ?
2. Whether the complainant proves beyond reasonable doubt that the accused has committed the offence punishable under Sec.138 of N.I.Act?
3. What order ?
7. My findings to the above points are as follows:
Point No.1&2 In the Affirmative Point.No.3 : As per final order for the following REASONS
8. Point Nos.1 & 2: Both these points are interconnected with each other. In order to avoid repetition of facts, both the points have been taken up together for consideration.
9. The case of the complainant is that :The complainant company is private company duly registered and incorporated under the company Act 1956. The accused company including its directors 6 CC.No.20264/2017 accused No.2 & 3 have placed purchase order for suppliance of steel materials. Accordingly, complainant company has supplied the claimed materials. Towards payment the accused persons issued cheque in dispute. Hence, the amount mentioned under the cheque is legally dischargeable debt which is towards a part payment. On behalf of accused No.2&3 the accused No.4 accepting their liability issued cheque bearing No.354905 dt 22.05.2017 for Rs.3,10,440/- drawn on The Shamrao Vittal Co-operative Bank Ltd., SVC Bank, Mulund (West) Mumbai . The complainant presented said cheque though its banker and the same returned dishonored for the reason "Funds Insufficient ". On receipt of said intimation, the complainant got issued legal notice dt.20.06.2017 to pay the due amount. Despite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint.
10. In order to create the legal presumption as per Sec.139 of N.I. Act, the Authorized person of the complainant company got examined as PW1 by narrating entire complaint averments and got marked the documents as Ex.P.1 to Ex.P.8. Ex.P1 is the Letter of Authorization, Ex.P.2 is the Cheque, Ex.P.3 is the Bank endorsement. Ex.P.4 is office copy of legal notice. Ex.P.5 is the postal receipt. Ex.P6 to 8 are the Postal acknowledgments,
11. During his cross examination PW1 has been asked about his designation and tenure of his service in complainant company, accordingly, the PW1 is working as a accountant since the month of 7 CC.No.20264/2017 February 2012 and he has awareness about alleged transaction. He too identified the photo of the accused No.4. Based on GPA document executed by the managing director of the complainant company the present complaint was filed through PW1. Further he has been asked to produce the documents concerned to board resolution passed by the concerned company in order to deleget the authority to file the present complaint. The defense counsel has denied the service of the legal notice by saying that there was no cause of action arose as alleged in the complaint because the complainant company has closed before filing of the present complaint same suggestion has been denied by the witness. The material question highlighted that the disputed cheque which is belongs to Chirag Cooperation Company but that company has not made party to this case. But witness explained that he has made party to accused No.1 & 4 who are connected to the above said company to which the disputed cheque is belongs. Further it is suggested the blank signed cheque has been filled by the c complainant company in order to file fake case against the accused No.4 as there was strained relationship existing between accused No.4 and complainant company's director. Very suggestion denied by the witness by explaining that the accused No.4 come forward to discharge the legal liability which was existing against the accused NO.1 to 3. Further he has been asked to produce sale tax document concerned to complainant company. Also it is suggested that the disputed cheque is not belongs to personal account of the accused 8 CC.No.20264/2017 NO.4, but witness has explained that the accused No.4 is the whole and sole owner of the Chirag Corporation company hence he issued cheque belongs to the above said company. During cross examination PW1 has explained in the year 2015 the Manish Aluminium Pvt Ltd company has closed but instead of this name same company is working under Ora Aluminium company. Hence it is specifically suggested that there is no such transaction held between Manish Aluminium Pvt Ltd company and Chirga corporation company. But witness denied the suggestion by saying that there was continuous transaction held between complainant company with accused No.1 company . Therefore, defense counsel has denied the entire transaction as alleged in the complaint by saying that by colluding with accused No.1 to 3 after closing of original complainant company the cheques have been misused against the accused No.4 in order to have wrongful gain from the accused No.4. Apart it there is no such material admission culled out from the mouth of the PW1 towards falsifying of his case.
In order to rebut the initial presumption which is existing in favour of the complainant accused not stepped into the witness box to lead defense evidence nor produced any relevant document to create doubt behind the registration of the present case against the accused. Further, it is observed that at the time of recording of statement of the accused as per provision mentioned under 313 of cr.p.,c accused denied entire incriminatory evidence placed by the complainant but 9 CC.No.20264/2017 not filed any written statement. But shows to lead defense evidence later on not led defense evidence.
12. During arguments the defense counsel has produced citation reported in 2000 (I) SCC 1 reported judgment held between Anil Hada Vs Indian Acrylic Ltd., through which he took shelter and highlighted that without making party to the company on behalf of which accused No.4 has issued disputed cheque under company name Chirag Corporation Ltd. For which the present accused No.4 working as a proprietor and he being sole owner has issued the cheque on behalf of accused No.1 to 3 as a guarantor. But the defense counsel has argued the without making party to the above said Chirag Corporation Ltd the present complaint is not tenable hence prayed for dismissal of the complaint by acquitting the accused.
13. The citation which was produced by the defense counsel has already been overruled through reported judgment of Hon'ble Apex court held between Anitha Hada Vs Godfather Travels and Tours Pvt Ltd. Furthermore, I have gone through the principles discussed in report case of Hon'ble Apex court held between Dilip Hariramani Vs Bank of Baroda in Crl.A.No. 767/2022 dt 9.5.2022 in which Hon'ble Apex court has discussed in detail particularly section 141 of NI Act offences by the companies. In which section 141 (1) read that if the person committing the offence under section 138 of NI Act is a company every person who at the time of offence was committed was in charge of and was responsible to the 10 CC.No.20264/2017 company for the conduct of the business of the company , as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
Provided nothing has been contained in this sub section shall under any person liable to punishment if he proves that the offence was committed without his knowledge or that he has exercised in all due diligence to prevent the commission of such offence.
Furthermore, as per sub section of 141 (2) of NI act which read
- not withstanding anything contained in subsection (1) were any offence under this act has been committed by the company and it is proved that the offence has been committed with the consent of convenience , or his attributable to, any neglect on the part of the any director, manager, secretary or other officer of the company , such director, manager, secretary or any other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. After discussing the entire case file it has been held that the trial court district court and Hon'ble High court have deemed fiction of vicarious liability and punishment against the accused has been duly confirmed but that has been challenged by the accused by saying that by concerned company or firm has not been made party . Therefore, the vicarious liability has not applicable under such circumstance accordingly case has been acquitted without touching the principles discussed in Anitha Hada's case. By saying that the ratio laid down in C.V. Parekh case thorugh larger bench by binding precedent and the decision of Anil Hada has to be treated as 11 CC.No.20264/2017 not laying down the correct law as far as its stated that the director any any other offence can be prosecuted without implemented of the company. Needless to emphasis, the mater would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted.
14. In view of aforesaid analysis the Hon' ble Apex court has concluded that for maintaining the prosecution under section 141 of the Act arraying of company as an accused is imperative. The other categories of offenders can only be brought in the drag net on the touch stone of vicarious liability as the same has been stipulated in the provision itself. Hence, in absence of such plea or assertion in the complaint the accused has not made culprit accordingly he has been acquitted.
In the present case there is no such offence has been committed by the Chirag Corporation Ltd and in pleading also there is no specific role Chirag corporation Ltd pleaded by the complainant. In absence of such pleading or evidence it is deemed that the above said company has played no role in alleged transaction and towards issuance of the disputed cheque in favour of the complainant company. Hence, under such circumstances it is clearly observed that during execution of decree of recovery suit that is OS.No.4823/2013 the present accused NO.4 has issued cheque in dispute on behalf of all other accused. In which the role of the accused No.1 to 3 has been duly considered in above said suit and decreed accordingly. During execution of Decree the present accused 12 CC.No.20264/2017 No.4 stood as a guarantor for the liability pending against the accused No.1 to 3 in that Execution petition. After filing of cheque bounce case the accused No.2& 3 have challenged the order issuance of process in which the proceedings against them has been quashed out. The present accused No.4 was not party to the above said recovery suit but stood as a guarantor and issued cheque which has been bounced therefore, the vicarious liability has highlighted by the defense counsel during his arguments is not at all applied. Furthermore the decision which was cited by him is also not aptly applicable to the present case.
15. After careful scrutiny of the entire oral evidence placed by the complainant is it observed that the defense counsel has tried to put hamper on the authorization document which was issued by the complainant company in favour of the PW1 but nothing has been culled out from the mouth of the witness. Furthermore he has answered every question posed by the defense counsel by saying that he has personal information regarding alleged transaction. It is specific defense of the accused that the disputed cheque has been misused by the complainant company but there is no such legal steps taken by the accused No.4 to resist the misusing of the disputed cheque. Therefore as per section 141 of NI Act which provides as to who shall be deemed as a guilty and it is mentioned the person concerned not a company or the firm. Therefore, the compliant filed against the present accused NO.4 was not against the provision of 13 CC.No.20264/2017 law or against the provision under mentioned under section 141 of NI Act. Hence, without making party to the Chirag Corporation Ltd the present complaint is tenable against the accused NO.4. As per defense the vicarious liability can be inferred against the company registered or incorporated under the companies act 1956 only if the the requisite statements, which are required to be averred in the complaint or petition, or made so as to make the accused therein vicarious liable for offence committed by the company along with the averments in the petition containing that the accused were incharge of and responsible fro the business of the company and by virtue of their position they are liable to the proceed with. The vicarious liability on the party of the person must be pleaded or proved and not inferred as per defense taken by the defense counsel during his argument. Hence, there is no deemed liability of the accused NO.4 in the present case in absence of any role played by the Chirag Corporation Ltd at the time of issuance of the disputed cheque. Furthermore it is observed that Chirag corporation ltd owned by the accused NO.4 who is whole and sole owner of the present company issued disputed cheque towards discharge of legal liability hence accused NO.4 being a guarantor is liable to pay the debt mentioned under the disputed cheque. Therefore, the amount mentioned under the cheque is legally recoverable debt. The citation produced by the defense counsel is not aptly applicable in the present case. Further it is observed that during pendent of case court has passed interim order against the accused by directing him to make payment of 10% 14 CC.No.20264/2017 of cheque amount but not only in present case but in all connected cases accused not complied with the interim order . But matters have been dragged successfully and become more than five years old cases.
16. In order to rebut the initial presumption and complaint facts the accused not chose to lead the defense evidence nor produced any documents during recording of 313 statement also he denied entire incriminatory evidence placed by the complainant by stating that the complainant company has misused issued cheque. Apart it, he claimed to lead the defense evidence but not led the defense evidence.
17. For the sake of argument that blank signed cheques are given to the complainant, it is well settled principle of law that "even a blank cheque leaf signed and handed over by the accused which is towards some payment, would attract presumption u/s.139 of N.I.Act in absence of cogent evidence to show that cheque was not issued in discharge of debt". Thus no discrepancy had emerged out of the cross examination which may demolish complainant version even on the touch stone of preponderance of probabilities. Thus, accused has not disputed execution of loan hypothecation agreement. Further the accused admits becoming a defaulter. Hence, amount mentioned under the cheque is legally recoverable debt.
18. If the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque issued as security would mature for presentation and the drawee of 15 CC.No.20264/2017 the cheque would be entitled to present the same. On such presentation, if the same is dishonored, the consequences contemplated under Sec.138 and other provisions of N.I.Act would flow. Under `the light of above said discussion it is crystal clear that burden shifts on the accused to rebut the legal presumption which exists in favour of the complainant by proving that the cheque in dispute was not issued towards discharge of amount claimed through cheque.
19. Further it is observed that when the cheque has been presented for encashment, at that time the bank authority issued an endorsement with note " Insufficient Funds ". Hence, the complainant finance has issued the legal notice and same has been duly served on the accused. Though the defense counsel denied service of notice, as per Section 27 of G.C.Act, the notice sent to the correct address of the accused is deemed to be served. So when there is issuance of blank cheque and the signature is not disputed, then burden lies on the accused to disprove the case of the complainant. That means initially the burden is on the complainant. Once burden is discharged by the complainant, then onus lies on the accused to disprove the case of the complainant. But, the accused has put better efforts in order to rebut the case of the complainant. But went in vain. Therefore, the object of 138 of N.I.Act is to infuse credibility to negotiable instruments including cheques and to encourage and use of negotiable instruments including cheques in financial transaction. The penal provisions of Sec.138 of N.I.Act is 16 CC.No.20264/2017 intended to be a deterrent to callus issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same.
20. Hence complainant has placed sufficient oral and documentary evidence to prove that the accused issued the cheque in discharge of legal liability. Therefore, the presumption under Sec.139 of N.I.Act remain intact. The complainant has proved the complaint averments by placing oral and documentary evidence. On the other hand, the accused failed to prove the defense by rebutting the above said presumption.
21. The complainant has proved that the cheque in question was issued by the accused towards discharge of legal liability. Therefore, the court can raise presumption mandated under Sec.139 of N.I.Act as per the ratio laid down by the Hon'ble Apex Court in 2010(11) SCC 441 (Rangappa V/s Mohan). "Once the cheque relates to the account of accused and he accepts and admits the signature on said cheque, then initial presumption as contemplated under Sec.139 of N.I.Act has to be raised by the court in favour of the complainant". On the other hand, the accused failed to rebut the statutory presumption.
22. In the light of the above discussion and the material placed on record, the court is of the opinion that the complainant has proved existence of legal liability and also proved that the accused issued the cheque in question towards discharge of legal liability. The complainant has proved the ingredients of Sec.138 of N.I.Act. 17 CC.No.20264/2017 Therefore considering the entire facts and circumstances of the case and the available evidence on record, the court comes to the conclusion that the accused committed the offence punishable under Sec.138 of N.I.Act. The complainant is entitled for compensation under Sec.357 Cr.P.C. Therefore, the complainant has proved point No.1 beyond all reasonable doubt. Hence, Point No.1 & 2 are answered in the Affirmative.
23.Point No.3 : , In the light of the above finding on point No.1 , I proceed to pass the following:
ORDER Acting u/s. 255(2) of Cr.p.c., the accused No.1& 4 are convicted for the offence punishable under Sec.138 of N.I.Act.
The accused No.1&4 are sentenced to pay fine amount of Rs.3,20,440 /- (Rupees Three Lakhs Twenty Thousand Four Hundred Forty only ) In default of payment of fine, shall undergo SI for six months.
Acting under Sec.357(1)(b) of Cr.P.C., out of the fine amount, the complainant is entitled for Rs.3,15,440/- (Rupees Three Lakhs Fifteen Thousand Four Hundred Forty only ) towards compensation.
Acting under Sec.357(1) (a) of Cr.P.C., the remaining fine amount of Rs.5,000/- (Rupees Five Thousand only) is to be remitted to the state. Copy of the judgment shall be furnished to the accused free of cost.
(Dictated to the Stenographer directly on the computer , transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 7th day of May 2024 ).
(SUJATA SIDAGOUDA PATIL) C/c XV A.C.M.M., BANGALORE.18 CC.No.20264/2017
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Sukhraj Bhandari
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Letter of Authorization
Ex.P2 : Cheque
Ex.P2(a) : Signature of the accused
Ex.P3 : Bank Endorsements
Ex.P4 : Legal Notice
Ex.P5 : Postal receipts
Ex.P6 to 8 : Speed Post acknowledgments
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED:-
Nil (SUJATA SIDAGOUDA PATIL) C/c XV A.C.M.M., BANGALORE.19 CC.No.20264/2017 20 CC.No.20264/2017