Bangalore District Court
M/S Mangalore Chemicals And ... vs Pandian Fertilizer Depot And Another on 22 April, 2024
1 C.C No.11624/2022
KABC030300962022
Presented on : 16-04-2022
Registered on : 16-04-2022
Decided on : 22-04-2024
Duration : 2 years, 0 months, 6 days
IN THE COURT OF XXXVI ADDL. CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Present: SRI. NITIN YESHWANTH RAO
B.Com. L.L.B(Spl.),
XXXVI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Dated this 22nd day of April 2023
C.C.No. 11624/2022
Complainant : M/s.Mangalore Chemicals
& Fertilizers Ltd.,
A Company incorporated
under Company's Act having
its registered Business at
Level 11, UB Towers,
UB City, 24,
Vittal Malya Road,
2 C.C No.11624/2022
Bengaluru.
Rep: by its Authorised Signatory:
Sri.Prasanna K.P.
(By M/s. US Associations Adv.,)
V/S
Accused : : 1.Pandian Fertilizer Depot,
No.132, Gingee Road,
Tindivanam,
Viluppuram.
2. R.Pandian,
Pandian Fertilizer Depot,
No.132, Gingee Road,
Tindivanam,
Viluppuram.
(By Sri.PPK Adv.,)
Date of Institution of case 2022
Nature of case Private complaint
Date of recording of 25/3/2022
evidence
Date of Judgment 22/4/2024
Offences complained of U/Sec.138 of Negotiable
Instrument Act.
3 C.C No.11624/2022
::JUDGMENT::
This is a case arising out of the private complaint filed by the Complainant Company represented by it's authorised signatory Sri.Prasanna K.P. U/Sec.200 Cr.PC against the accused No.1 Company represented by it's proprietor Sri.R.Pandiyan who is the accused No.2 herein alleging the offence punishable U/Sec.138 of Negotiable Instruments Act.
2. It is the case of the Complainant Company that it is engaged in the business of Manufacturing and Distribution of Fertilizers, Agro Chemicals and other products and also dealing in the sale of Fertilizers and Pesticides. The accused No.1 is a Proprietorship concern engaged in the business of Selling products manufactured by the Complainant Company. The Complainant Company supplied various products and raised various invoices against the supplies made to the accused Company.
The accused No.2 on behalf of the accused No.1 issued a cheque bearing No.503179 dated: 12/6/2020 for a 4 C.C No.11624/2022 sum of Rs.16,50,169/- drawn on Indian Bank Tindivanam Branch and assured the complainant that the same would be honoured on presentation. Believing his words, Complainant Company presented the said cheque for collection through it's banker i.e. Axis Bank, Queens Road Branch, Bengaluru. The cheque however, was dishonoured and returned unpaid with the remark 'funds insufficient' in the bank account of the accused. The same was intimated to the Complainant Company through the Bank Memo dated: 2/7/2020. Pursuant to the same, Complainant Company issued legal notice to the accused on 7/8/2020 calling upon them to pay the cheque amount. The notice was duly served on the accused on 17/8/2020. The accused issued reply on 31/8/2020 wherein he admitted his liability to pay the cheque amount and so also the issuance of the cheque. Despite the same, he did not come forward to pay the cheque amount. Complainant Company was thus constrained to file this private complaint against the accused.
5 C.C No.11624/2022
3. After recording the sworn statement of the complainant Company's authorised signatory and on perusal of the documents produced by him, the presence of the accused was secured. Plea was recorded. As the accused pleaded not guilty and claimed to be tried, the case was posted for cross examination of PW1.
4. As per guidelines of Hon'ble Apex Court issued in the case of Indian Bank Association V/s. Union of India reported in (2014) 5 SCC 590, sworn statement affidavit of the complainant is treated as his examination in chief. In order to prove its case, complainant Company got its authorised signatory examined as PW1 and got marked 26 documents as Ex.P1 to 26.
5. Then, the case was posted for recording the statement of accused U/Sec.313 Cr.P.C. In the statement U/sec.313 Cr.P.C, the accused denied all the incriminating evidence appearing against him and did not choose to lead defence evidence.
6 C.C No.11624/2022
6. Heard the arguments of learned Counsels for the complainant and the accused. Meticulously perused the materials available on record.
7. The following points arise for my consideration:
POINTS
1) Whether the complainant proves that the accused committed an offence punishable U/Sec.138 of N.I. Act?
2) What order ?
8. My findings on the above points are as following:
Point No.1:- In the Affirmative.
Point No.2:- As per final order for the
following:
REASONS
9. Point No.1:- In support of it's case, the
complainant Company got it's authorised signatory examined as PW1 and got marked 26 documents as Ex.P1 to P26. Sri.Prasanna K.P. who is examined as 7 C.C No.11624/2022 PW1 reiterated the complaint averments in h is affi davit fi led in lieu of chief-examination. The true copy of Resolution passed by the Board of Directors of the Complainant Company is marked as Ex.P1. The Statement of Account pertaining to the Accused No.1 Company maintained by the Complainant Company is marked as Ex.P2. Sixteen GST Invoices are marked as Ex.P3 to 18 respectively. The Indian Bank cheque bearing No. 503179 for Rs.16.50,169/- is marked as Ex.P19. Bank memo is marked at Ex.P20. The offi ce copy of the Legal Notice dated:7/8/2020, 2 acknowledgement cards & 2 Postal receipts are marked as Ex.P 21 to 25 respectively. The Reply notice dated: 31/8/2020 issued by the accused is marked as Ex.P26.
10. On careful perusal of these documents, it is revealed that complainant has complied with all the essentials enshrined in Sec.138 of NI Act. Complainant presented the cheque within time for 8 C.C No.11624/2022 collection. After it's dishonor, it also issued legal notice to the accused. Pursuant to the receipt of the legal notice, the accused issued reply wherein he admitted his liability to pay the cheque amount. However, he did not come forward to pay the cheque amount within the stipulated period.
11. When accused failed to repay the amount, complainant fi led this complaint. Hence, records reveal that complainant is entitled to the presumption available under sec 118(a) and 139 of the NI Act.
12. In Rangappa Vs. Mohan reported in 2010 (1) DCR 706 the Hon'ble Apex court has that ;
"The Statutory presumption man- dated by sec.139 of the Act, does in- deed include the existence of a legally enforceable debt or liability. However, the presumption U/S 139 of the Act is in the nature of a rebuttable presumption and it is open for the accused to raise a defence wherein the existence of a 9 C.C No.11624/2022 legally enforceable debt or liability can be contested".
13. Therefore, in view of the above decision, once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant to the effect that, the alleged cheque was issued for discharge of an ex- isting legally enforceable debt or liability against the ac- cused and the burden will shift on to the accused to rebut the same.
14. The learned Counsel for the complainant force- fully argued that accused issued the cheque in order to dis- charge his liability. As the accused admitted the signature on the cheque and issuance of the same, the learned Counsel prayed for convicting the accused.
15. Let me now consider whether accused success- fully rebutted the presumption available in favour of the complainant with probable and convincing evidences. It is well settled principle of law that, once the cheque is admit- ted there will be a statutory presumption in favour of the 10 C.C No.11624/2022 holder or holder in due course U/Secs. 118 and 139 of the Act as observed supra. However, as held by the Hon'ble Apex Court and our own Hon'ble High Court in a catena of decisions, the presumptions under the said sections are in the nature of rebuttable presumptions and hence, the ac- cused can very well rebut the said presumptions by lead- ing reasonable and probable defence. Let us examine, the same on the basis of the materials available on record.
16. The accused tried to establish through the cross ex- amination of PW1 that the Complainant Company did not supply it's products to him as reflected in Ex.P3 to 18 in- voices as there are inconsistencies in the said invoices with regard to the purchase order numbers, Consignee names and billed customer names. The accused also tried to es- tablish that the instant case is not maintainable as the cheque in question was issued in respect of a time barred debt.
17. It is the specific defence of the accused that the Complainant Company never supplied it's products to him 11 C.C No.11624/2022 and therefore he is not liable to pay the cheque amount. A careful perusal of the invoices would reveal that there in- deed exist some inconsistencies in respect of the mention- ing of purchase order numbers, consignee address and billed customer address. This is also admitted by PW-1 dur- ing the cross-examination but, he blamed it on typographi- cal error. Be that as it may, what is pertinent to note here is that the accused himself admitted in the Reply notice marked as Ex.P26, his liability to pay the outstanding bal- ance of Rs.16,50,169/- to the Complainant Company and so also the issuance of the Ex.P19 cheque towards pay- ment of the outstanding balance. Such being the case, it cannot be said that the Complainant Company did not sup- ply it's products and that the accused is not liable to pay the cheque amount.
18. As far as the other contention of the accused with regard to limitation is concerned, it is pertinent to note that the invoices relied upon by the complainant are admit- tedly of the year 2017 and 2018 and the cheque in ques- 12 C.C No.11624/2022 tion was presented to the bank by the complainant on 1/7/2020 i.e. before the expiry of 3 years limitation period from the date of the first invoice. As such, it cannot be said that the cheque in question was issued in respect of time barred debt.
19. So far as regards to the delay in presenting this complaint, it is apposite to note that Legal Notice was served on the accused on 17/8/2020 and the accused is- sued his reply on 31/8/2020 wherein he sought for two months time for full settlement of the outstanding amount. Believing his words, the Complainant Company held back for two months and filed this complaint only on 2/11/2020 which resulted in delay. Nonetheless, it is hugely relevant to note here that due to the COVID-19 pandemic and the consequent lockdown imposed by the Government, the Hon'ble Supreme Court vide orders passed in Misc. Appli- cation No.21/2022, 665/2021 and Suo Motu Writ Pet. (C) No.3/2020 issued directions that the period from 15/3/2020 till 28/2/2022 shall stand excluded for the purposes of limi- 13 C.C No.11624/2022 tation as may be prescribed under any general or special laws in respect of all Judicial or quasi Judicial proceedings.
20. Therefore, the delay caused in filing this complaint is covered by the extension of the limitation period by the Hon'ble Apex Court in the aforecited orders. Therefore, considering all the aforementioned circumstances and the orders of the Hon'ble Apex Court this Court has come to the conclusion that the contention raised by the accused with regard to limitation is devoid of merits and untenable.
21. As observed supra, the presumption U/s.139 of NI Act is rebuttable in nature and the standard of proof re- quired to rebut the said presentation is preponderance of probabilities. On a probable defence which creates doubts about existence of a legally enforceable debt or liability, prosecution will fail. While prosecution must establish it's case beyond all reasonable doubt, accused to prove his de- fence, must only meet standard of preponderance of prob- abilities. It is not necessary for the accused to disprove the 14 C.C No.11624/2022 existence of consideration by way of direct evidence. He has to only discharge initial onus of proof.
22. However, in the instant case, accused did not ad- duce any probable evidence which would create doubts in the mind of this Court in respect of the legally enforceable debt. As far as the defence of the accused is concerned, the accused merely put suggestions to PW1 that goods were not delivered to him as per the Ex.P3 to 18 Invoices and that he is not liable to pay the cheque amount. As the said suggestions were categorically denied by the com- plainant, they cannot be taken as proof of the defence of the accused in the absence of corroborative evidence ei- ther oral or documentary that the accused failed to place before the Court. It is very much apposite at this juncture to take note of the following decisions of the Hon'ble Apex Court and our own Hon'ble High Court.
1. ILR 2019 KAR 493 between Sri.Yogesh Poojari V/s Sri.K.Shankar Bhat.
15 C.C No.11624/2022
2. The decision of the Hon'ble Apex Court rendered in Crl.Appeals No.849-850/2011 be- tween Triyambak S.Hegde V/s Sripad.
3. 2014 (4) AIR (KAR) 98 between Sripad V/s Ramdas Shet.
4. (2001) 8 SCC 460 between S.Pitchai Ganapathi and others V/s Commissioner, Hindu Religious and Charitable Endowments Department and others.
23. The ratio laid down in the same, can be summed up as under:
'A mere distorted version or mere taking of the plea or the defence that he is not liable to any amount is not suffi-
cient to put back the burden on the complainant to prove his case beyond reasonable doubt. The accused to rebut the presumption should place corroborative evidence as proof of his defence'.
24. Reverting to the case on hand, the accused herein merely put suggestions to the complainant without placing 16 C.C No.11624/2022 on record corroborative evidence due to which his defence cannot be accepted. Therefore, I am of the humble opinion that the afore cited decisions are very much applicable to the facts and circumstances of the case on hand.
25. Considering all the aforementioned circum- stances and the evidence both oral and documentary placed on record by both sides, this Court has arrived at the conclusion that the accused miserably failed to rebut the presumption available in favour of the complainant. Complainant on the other hand, successfully established the factum of issuance of cheque by the accused towards discharge of his legally enforceable debt. Accordingly, I an- swer Point No.1 in the Affirmative.
26. Point No.2:- Complainant Company supplied it's products to the accused No.1 Company on credit basis and in return the accused issued Ex.P19 cheque dated:
12/6/2020 which came to be dishonoured. Complainant Co pany has been deprived of it's money for all these years.17 C.C No.11624/2022
Hence, accused shall compensate the complainant for the same.
27. At the argument stage, the learned Counsel for the complainant relied upon the decision of the Hon'ble Apex Court rendered on 6/8/2014 in Crl. Appeal No.1789/2014 between H.Pukhraj V/s D.Parasmal. The Hon'ble Apex Court in the said case, took note of the earlier decision rendered in the case of R.Vijayan V/s Baby and another reported in (2012) 1 SCC 260 wherein it was observed thus "as the provisions Chapter: XVII of the NI Act strongly lean towards grant of reimbursement of the loss by way of compensa- tion, the Courts should, unless there are special circum- stances, in all cases of conviction, uniformly exercised the power to levy fine up to twice the cheque amount keeping in view the cheque amount and the simple interest thereon at 9% p.a. as the reasonable quantum of loss and direct payment of such amount as compensation". Taking note of the same, the Hon'ble Supreme Court modified the im- 18 C.C No.11624/2022 pugned order and directed the accused/respondent to pay higher compensation to the complainant.
28. Relying upon the aforecited authority, the learned counsel for the complainant pleaded for levying fine twice the cheque amount. However, having regard to the observations of the Hon'ble Supreme Court made in the aforecited authority and taking note of the fact that due to the COVID-19 pandemic and the consequent lock- down imposed by the Government, there was no business for a period of almost two years, this Court is of the consid- ered opinion that levying fine upto twice the cheque amount would be unfair and that ends of Justice would meet if the accused is directed to pay fine of Rs.25,00,000/-.
29. In view of my answer to Point No.1 and for myr- iad reasons, this Court has come to the conclusion that the accused committed the offence punishable U/Sec.138 of NI Act. Accordingly, I proceed to pass the following: 19 C.C No.11624/2022
ORDER Accused No.1 and 2 are found guilty of the offence punishable U/Sec.138 of Negotiable Instruments Act 1881.
Acting U/sec.255(2) of Cr.P.C accused are hereby convicted for the offence punishable U/Sec.138 of Negotiable Instruments Act 1881 and they are sentenced to pay fine of Rs.25,00,000/-. In default, accused shall undergo simple imprisonment for a period of six months.
Out of the total fine amount, a sum of Rs.24,90,000/- shall be paid to the complainant as compensation under section 357 of Cr.P.C. and Rs.10,000/- shall be remitted to the State exchequer.
Further, it is also made clear that in view of proviso to Sec.421(1), the accused No.2 shall not be absolved of his liability to pay compensation amount of Rs.24,90,000/- awarded 20 C.C No.11624/2022 U/Sec.357 of Cr.P.C even if he under goes the default sentence.
The bail bonds of the accused stands cancelled.
Office is directed to supply free copy of this judgment to the accused forthwith.
(Dictated to the Stenographer on on-line, transcribed and typed by her, then corrected and pronounced by me in the open Court on this the 22nd day of April 2024 ).
(Nitin Yeshwanth Rao), XXXVI ACMM., Bengaluru.
:: A N N E X U R E::
1. List of Witnesses examined on behalf of the prosecution :
P.W.1 : Sri.Prasanna K.P.
2. List of exhibited documents for complainant :
Ex.P1 : The true copy of Resolution passed by the Board of Directors of the Complainant Company 21 C.C No.11624/2022 Ex.P2 : The Statement of Account pertaining to the Accused No.1 Company maintained by the Complainant Company Ex.P3 : Sixteen GST Invoices to 18 Ex.P19 The Indian Bank cheque bearing No.503179 for Rs.16.50,169/-
Ex.P20 Bank memo
Ex.P21 The offi ce copy of the Legal Notice
to 25
dated:7/8/2020, 2 acknowledgement
cards & 2 Postal receipts
Ex.P26 The Reply notice dated: 31/8/2020
issued by the accused
3. List of defence Witnesses :
- NIL-
4. List of documents exhibited for defence :
-NIL-
(Nitin Yeshwanth Rao), XXXVI ACMM., Bengaluru.22 C.C No.11624/2022
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