Bangalore District Court
Manager Examined Himself As Pw1 And Got vs And Perused The Materials On Record on 30 August, 2022
IN THE COURT OF THE V ADDL. SMALL CAUSES JUDGE &
24th ADDL. CHIEF METROPOLITAN MAGISTRATE, Court of
Small Causes, Mayo Hall Unit, Bangalore(SCCH20)
Present:Smt.Sharmila C.S. BA.L., LL.M
V Addl. Small Causes Judge,
& XXIV A.C.M.M.
Dated this the 30th day of August 2022
C.C.No.58857/2018
1. Sl.No. of the case C.C. No.58857/2018
2. The date of Institution 26.10.2018
3. The date of commencement
of the evidence 26.10.2018
4. Name of the Complainant : Deutsche Bank.A.G
Reheja Towers,
# 2627, West wing,
M.G.Road,
Bangalore
Represented by Mr.Ajay Singh,
Aged about 39 years,
Manager Debt management
and Power of Attorney holder
(By Pleader MGC and co)
5. Name of the Accused : 1. Mr.Sun Sports Pvt Ltd.,
Rep by its Directors,
Mrs.Vandana Karamcheti &
Mr.Vinay Karamcheti
No.1936, 20th main, 5th cross,
JP Nagar, 2nd phase,
N.R.Ranga Shankar
Bangalore - 560078
SCCH-20. 2 CC. No.58857/2018
2.Mr.Vinay Karamcheti
S/o Smt.Krishna Chandra Bhotla,
Director,
Mr.Sun sports private Ltd.,
No.1936, 20th main, 5th cross,
JP Nagar, 2nd phase,
Nr.Ranga shankar
Bangalore - 560078
Also at
D.005, Charged Beverly Hills,
Servey NO.55, 6A, 55, 6B
Uttarahalli, Subramanyapura,
Bangalore - 560061
3. Vandana Karamcheti
W/o Mr.Vinay Karamcheti
Director,
Mr.Sun sports private Ltd.,
No.1936, 20th main, 5th cross,
JP Nagar, 2nd phase,
Nr.Ranga shankar
Bangalore - 560078
Also at
D.005, Charged Beverly Hills,
Servey NO.55, 6A, 55, 6B
Uttarahalli, Subramanyapura,
Bangalore - 560061
(A1 Company,
A2 & A3 By pleader Srinatha.H)
6.The offence complained of or proved: Under Sec.138 of N.I. Act.
SCCH-20. 3 CC. No.58857/2018
7.Plea of the accused on examination: Pleaded not guilty
8. Final Order Accused No.1 is acquitted
Accused No.2 and 3 are
Convicted
9.Date of such order 30.08.2022
JUDGMENT
This complaint is filed under section 200 of Cr.P.C alleging the offence punishable Under section 138 of the Negotiable instruments Act 1881.
2. Brief facts of the complainant case is that; That for repayment of the loan amount, the accused has issued a cheque bearing No.000730 dated 29.06.2018 for a sum of Rs.90,000/, which on presentation was returned dishonored as payment stopped by the drawer. That the legal notice was sent which were returned as addressee left. Hence the present complaint is filed.
3. The accused No.2 and 3 appeared through their counsel SCCH-20. 4 CC. No.58857/2018 and were enlarged on bail. Substance of accusation read over to the accused and statement under section 313 of Cr.P.C was also recorded, where the accused No.2 and 3 both have pleaded not guilty and claimed to be tried. Though the accused appeared through their counsel and every time submitted that they are going to settle the matter. Finally when the case was posted for arguments submitted that the accused No.2 and 3 have paid total amount of Rs.40,000/. Apart from this the accused did not make any effort in order to set up their defence, though they pleaded not guilty of the alleged offence. The complainant's manager examined himself as PW1 and got marked 10 documents on his behalf. The Accused did not lead any evidence on their behalf.
4. Heard from the counsel for the complainant and accused and perused the materials on record.
5. The following points arise for my determination:
1. Whether the complainant has made out sufficient grounds to punish the accused for the offence punishable under Section 138 of N.I.Act?
SCCH-20. 5 CC. No.58857/2018
2. What order?
6. My answers to the above points are as follows:
Point No.1: in the affirmative Point No.2: As per the final order for the following:
REASONS
7. POINT NO.1: It is the case of the complainant that the complainant is a bank and has raised facility for loan to its customers. That the accused availed loan from the complainant agreeing to repay the same in equal installment. That for repayment of one such installment, the accused issued a cheque bearing No.000730 dated 29.06.2018, drawn on ICICI Bank, JP Nagar Branch, for a sum of Rs.90,000/ which on presentation got dishonored as "stop payment" on 03.06.2018.
The legal demand notice which were sent to the accused were returned as addressee left. Hence with no other option the present complaint is filed.
8. In order to prove the allegation, the manager of the SCCH-20. 6 CC. No.58857/2018 complainant bank got examined himself as PW1 and has produced 10 documents on his behalf. The Ex.P.1 is the copy of the GPA in favour of the complainant, which is executed in favour of the PW1 to proceed with the case, Ex.P.2 is the cheque bearing No.000730 dated 29.06.2018 for Rs.90,000/ drawn on ICICI Bank, JP Nagar branch, Bangalore, issued by he accused No.2 and 3 in favour of the complainant bank. The said cheque has been dishonored on 30.06.2018 as per Ex.P.3 as "Payment stopped by the drawer". Ex.P.4 is the copy of the legal notice dated 18.07.2018, demanding the payment of cheque amount from the accused and is sent as per Ex.P5 postal receipt and unserved postal coveres as per Ex.P.6 to Ex.P.8, and the acknowledgment marked as per Ex.P.9 & P.10. All these documents are in support of the transaction in between the complainant and the accused. The complaint is filed on 26.10.2018, which is absolutely in time as stipulated under section 138 of the NI Act. All these documents comply with section 138 of the Negotiable instruments Act and depict that the accused had transaction with the complainant and accused SCCH-20. 7 CC. No.58857/2018 are in due to the complainant, for which the Ex.P2 cheque is issued, which came to be dishonored and thus the present complaint is filed. Therefore, the complainant has complied with the requirements as enumerated under section 138 of the NI Act.
9. There is a presumption under section 139 of the NI Act that the cheque was issued for discharging of an antecedent liability. But this is a rebuttable presumption. Thus, it is to be seen now that whether the accused rebuts the said presumption or not by raising a probable defence.
10. The cheque is issued by the accused No.2 and 3 in favour of the complainant bank company. The accused No.1 is the Sun Sports Pvt Ltd., of which the accused No.2 and 3 are the directors. The cheque is issued by the accused No.2 and 3 and not by the accused No.1. On going through the averments of the complaint, I notice that the complainant has submitted that it is banking company and introduced business installment SCCH-20. 8 CC. No.58857/2018 loan facility for benefit of its customers and upon executing requisite security taken by them. Further has submitted that the accused has applied for grant of such business installment loan under the above scheme and the accused had agreed to repay the loan amount in equated monthly installments and towards part payment of the said debt, the accused had issued cheque No.000730 i.e., involved in the case. No document is produced by the complainant to show that the accused No.2 and 3 have issued the cheque on behalf of the accused No.1 i.e., Sun sports pvt ltd., Even no documents are produced in order to clarify this court regarding the loan payable by the accused No.1. The demand notice is issued infavour of all the accused. It is also important to note that cheque bears name of two persons, but signed by only accused No.2, Sri.Vinay Karamacheti. The complainant ought to had brought to the clear notice of this court regarding the loan which is availed by the accused No.1 to 3. Nothing is produced in order to proceed against the accused No.1 in the instant case. Though the presumption is raised in favour of the complainant, it is also SCCH-20. 9 CC. No.58857/2018 available for accused to rebut the said presumption. However the complainant/ PW1 has not been cross examined by the counsel for the accused. But the documents are very much clear that the cheque has been issued only by the accused No.2 on behalf of the accused No.2 and 3 and not on behalf of the accused No.1. Therefore in my opinion there are no grounds made out by the complainant in order to convict the accused No.1 which it has no role to play in the instant case on hand.
11. The law is very much settled that if any payment is made through the course of the case same needs to be considered before this court. The cheque is for Rs.90,000/ issued by the accused No.2 in favour of the complainant bank, where the accused No.3 is also named in the said cheque, but has not signed the same. The counsel for the complainant has clearly admitted the receipt of Rs.40,000/ from the accused, who was always ready for settlement with the accused in respect of balance amount. However in view of the matter being SCCH-20. 10 CC. No.58857/2018 of 2018, this court proceeded after providing several opportunity by considering defence evidence as nil. This amount i.e., the payment made can be clearly deducted from the cheque amount and off course there is balance of Rs.50,000/ to be paid by the accused No.2 and in favour of the complainant. Therefore issuance of cheque being unrebutted, there are grounds made out in order to hold that the accused No.2 and 3 have committed offence punishable under section 138 of N.I.Act. Accordingly the above point is answered partly in affirmative.
12. POINT NO.2: Therefore, for the reasons discussed above, I proceed to pass the following:
ORDER Acting under powers conferred under Section 255(1) of Cr.P.C., the accused No.1 is acquitted of the offence punishable under Section 138 of Negotiable Instrument Act.
Acting under powers conferred under Section 255(2) of Cr.P.C., the accused No.2 and SCCH-20. 11 CC. No.58857/2018 accused No.3 are convicted for the offence punishable under Section 138 of Negotiable Instrument Act.
The accused No.2 and 3 are jointly and
severally sentenced to pay the fine of
Rs.65,000/.
The accused No.2 and 3 shall pay
Rs.60,000/(sixty thousand Rupees Only) out of the said fine amount to the complainant as compensation under Section 357(3) of Cr.P.C by deducting any amount paid earlier if any.
The accused No.2 and 3 in default of payment of fine amount shall undergo simple imprisonment for 2 months.
Office is directed to supply copy of judgment to the accused free of cost. [Dictated to the stenographer, transcribed by him corrected and then pronounced by me in the open court on this the 30 th day of August 2022.] (SHARMILA C.S.) V ASCJ & XXIV ACMM, Court of Small Causes, Mayo Hall Unit, Bangalore.
SCCH-20. 12 CC. No.58857/2018
ANNEXURE
LIST OF WITNESS EXAMINED FOR PROSECUTION :
PW.1: Ajay Singh
LIST OF WITNESS EXAMINED ON BEHALF OF THE
ACCUSED: NIL
LIST OF DOCUMENTS MARKED FOR COMPLAINANT :
Ex.P.1 Copy of GPA
Ex.P.2 Cheque
Ex.P.3 endorsement
Ex.P.4 Legal notice
Ex.P.5 Postal receipt
Ex.P.68 unserved postal covers
Ex.P.910 Postal receipts
LIST OF DOCUMENTS MARKED ON BEHALF OF
ACCUSED: NIL
(SHARMILA C.S.)
V ASCJ & XXIV ACMM,
Court of Small Causes,
Mayo Hall Unit, Bangalore.
SCCH-20. 13 CC. No.58857/2018
30.08.2022 ( Order pronounced in the open court
vide separate Judgment)
ORDER
Acting under powers conferred under Section 255(1) of Cr.P.C., the accused No.1 is acquitted of the offence punishable under Section 138 of Negotiable Instrument Act.
Acting under powers conferred under Section 255(2) of Cr.P.C., the accused No.2 and accused No.3 are convicted for the offence punishable under Section 138 of Negotiable Instrument Act.
The accused No.2 and 3 are jointly and severally sentenced to pay the fine of Rs.65,000/.
The accused No.2 and 3 shall pay Rs.60,000/ (sixty thousand Rupees Only) out of the said fine amount to the complainant as compensation under Section 357(3) of Cr.P.C by deducting any amount paid earlier if any.
The accused No.2 and 3 in default of payment of fine amount shall undergo simple imprisonment for 2 months.
Office is directed to supply copy of judgment to the accused free of cost.
V ASCJ & XXIV ACMM,
SCCH-20. 14 CC. No.58857/2018
SCCH-20. 15 CC. No.58857/2018
The learned counsel for the accused No.2 and 3
vehemently argued that amongst 5 cheques which cheque is pertaining to which of the bill is not explained by complainant. The cheques are issued for security purpose only and Ex.P1 to 5 are tampered to file this complainant. Upon considering aforesaid submission coupled with oral and documentary evidence, the accused No.1 to 3 definitely admitted the issuance of cheques Ex.P1 to 5 be it for security purpose. The accused did not lead probable defence evidence. Even otherwise, the learned counsel, for all Accused submitted no defence evidence. The company has legal entity & it is represented by Accused No.2 & 3. The Accused No.2 and 3 were doing business and both are coobligants. The accused No.2 issued the cheque for purchase of materials to complainant. Therefore, notice is issued by the complainant to responsible persons to the firm i.e., Accused No.2 &3 is valued. The cheques said to be issued in the month of August 2013. The accused No.3 is said to have resigned on 31.03.2013. In this respect, the accused No.3 did not produce an iota of evidence for having discharged herself SCCH-20. 16 CC. No.58857/2018 from responsibilities of the company. Be that as it may, the Accused No.3 did not dispute that she is partner of accused company. Therefore, without cogent evidence, the accused No.3 is estoped from denying now that there was no partner of firm as on the date of issuing the cheque. Therefore, in this case notice is issued by the complainant to the responsible persons to the firm i.e., the accused No.2 and 3 is valid. The legal notice is served on accused No.2 and 3. in the capacity of both managing partners of the business and incharge of daily transaction. The accused no.2 and 3 does not give proper evidence or accounts for repayment of due amount to the complainant. In this circumstances, both the accused No.2 and 3 are responsible persons as the case may be. 2006 (6) KAR.L.J 217 ( Smt.Umaswamy Vs K.N.Ramanath) "It is held Sec.138 and 139 dishonor of cheque -prosecution of drawer for acquittal of accused drawer on ground that cheque was issued as security for repayment of amount that may become due and not in settlement of any preexisting liability, is held, bad in law cheque whether issued as security or in settlement of any debt SCCH-20. 17 CC. No.58857/2018 or liability makes no difference when amount due is not paid, holder of cheque which he had received as security, is entitled to present cheque for encashmentstatutory presumption is that holder of cheque received cheque for discharge of any debt or other liabilitywhere drawer accused has not been able to rebut presumption he is liable to be convicted for offence". 12. The accused No.2 and 3 did not deny the service of notice on them. They could have given evidence of probable defence by examining themselves and produce documentary evidence for retirement of accused No.3 or full repayment. Now the accused No.2 and 3 can not take such defence that cheque was issued blank and amount fill in it is tampered. If at all the accused No.2 and 3 payment is made to the complainant, they would not have kept silent until the complaint was filed. No legal recourse is taken either to honor the contract or legal action initiated to recover the cheques. Under the circumstances, it can be implied that, Accused No.2 signed and both issued cheques in the capacity of partner in the firm. The accused No.2 and 3 are is well aware of their liability towards issuing the cheque in favour SCCH-20. 18 CC. No.58857/2018 of the complainant firm. The Accused does not place probable evidence to believe the payment for goods. It is not established the Ex.P1 to 5 are tampered. The Accused No.2 and 3 failed to raise probable defence. The presumption existing in favour of the complainant Under Section 139 of NI Act could not be rebutted. Even though bills and documents sought by the accused during crossexamination of PW1 is not forthcoming, the cheques are most sufficient to honor claim of complainant. Therefore, Accused No.1 to 3 are held guilty for committing offence punishable Under Section 138 of NI Act. (1999) 7 SCC 510 : 1999 SCC (Cri) 1284 : AIR 1999 SC 3762 (K.Bhaskaran Vs Sankaran Vaidhyan Balan) Criminal Procedure Code, 1973 Sec. 357(3), 386 second proviso and 29(2) order to pay compensation instead of fine N.I.Act 1881 Sec.138Even the High Court when functioning as a court of appeal held, has to confirm to the second proviso to S.386 and thus can not impose greater punishment or fine than might have been inflicted by the trial court. Howevere, the magistrate or other trial court can award any sum as compensation U/s 357(3) and compensation SCCH-20. 19 CC. No.58857/2018 for the loss to the complainantThus held, in respect of a cheque which covered an amount exceeding Rs.5,000/ such court has the power to award appropriate compensation to the complainant High court in appeal erred in imposing a fine of Rs.1,00,000/mater remanded to trial court on question of sentenceDebt, financial and monetary laws. N.I.Act 1881 Sec.,138 Award of compensation and imposition of fine by appellate court. The appellate court can not obviate the jurisdiction limit prescribed in Sec.386 of the code. Though the said provision confers power on the court of appeal to reverse an order of acquittal and finds the accused guilty and pass sentence on him according to law, even the high court when it is the court of appeal has to confirm to the second proviso to sec. 386 of the code. The trial in this case was held before a judicial magistrate of the first class who could not have imposed a fine exceeding Rs.5,000/ besides imprisonment. The high court while convicting the accused in the same case could not impose a sentence of fine exceeding the said limit. If a judicial magistrate of the first class were to order compensation to be SCCH-20. 20 CC. No.58857/2018 paid to the complainant from out of the fine realized the complainant will the loser when the cheque amount exceeded the said limit. In such a case a complainant would get only the maximum amount of Rs.5,000/. But the magistrate in such cases can alleviate the grievance of the complainant by making resort to sec.357(3) CR.P.C. The supreme court has emphasized the need for making liberal use of that provision. No limit is mentioned in the sub section and therefore a magistrate can award any sum as compensation. Of course while fixing the quantum of such compensation the magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. Thus, Even if the trial was before a court of a magistrate of the first class in respect of a cheque which covers on amount exceeding Rs.5,000/ the court has power to award compensation to be paid to the complainant. Therefore, the question of sentence and award of compensation must be considered by the trial court. The magistrate shall hear the prosecution and accused on those accepts. Of course if the complainant and the accused settled their disputes regarding SCCH-20. 21 CC. No.58857/2018 this cheque, In the meanwhile that fact can certainly be taken in to consideration. In determining the extent or quantum of sentence. 14. The cheque being the issued in the year 2013, that the complaint is filed on 22.02.2014, there is lapse of 4 years for prosecution. Hence, complainant firm is entitled for the compensation of Rs.6,00,000/. This can be given towards all expenses caused by the dishonor and non payment due under the cheque.