Bangalore District Court
Indus Fila Ltd vs Ms Gauge Sewing Machines Spares on 30 January, 2024
KABC010299022016
IN THE COURT OF THE LXII ADDL.CITY CIVIL &
SESSIONS JUDGE (CCH-63), BENGALURU.
DATED: THIS THE 30 th DAY OF JANUARY, 2024
PRESENT
Sri A. EARANNA, M.Com., LL.M.,
LXII Addl. City Civil & Sessions Judge,
Bengaluru.
CRIMINAL APPEAL No. 1522/2016
APPELLANT/ 1. Indus Fila Ltd.,
ACCUSED : Represented by its Directors
2. Hansaraj Rathore
EFO & Company secretary
3. Shashikanth Mandana
Director/authorized signatory
All are situated at No.107,
Industrial Sub-Urb,
II stage, Yeshwanthpur,
Bengaluru-560 022
By B N Prakash, Advocate.
VS
RESPONDENT/ M/s Gauge Sewing Machines Spares
COMPLAINANT: Proprietor - Mr. M.Lakshmichand
Jain
No.1023/140, 20th Main, V Block,
West of Chord road, Rajajinagra,
Bengaluru-560 043
Represented by its
Power of attorney holder
D. Anand Kumar
S/o Sri. Dhananraj
51 years
R/at No. 13, 2nd Cross,
Subbannapalya,
Banasawadi main road,
Bengaluru-560 043.
(By Sri. B.N.N., Advocate)
2 Crl.A.No. 1522/2016
JUDGMENT
This is a criminal appeal preferred by the appellants/accused persons under Section 374(3) of Cr.P.C., being aggrieved by the conviction judgment passed by the learned XXXII Addl. Chief Metropolitan Magistrate, Bengaluru, dated 15.11.2016 in C.C.No.24611/2012.
2. For the sake of convenience, the appellants and respondent of the present case will be referred by their original status before the Trial Court. The appellants are the accused persons and respondent is the complainant before the Trial Court.
3. The brief facts of the case are as under:
Accused No. 1 is a Company represented by its Directors, Accused No.2 is the CFO and Company Secretary and Accused No.3 is the Director of Accused No.1 respectively. The directors of the accused No.1 company had cordial relation with the complainant for the urgent business necessities and requirement of the Industrial Sewing Machines etc. The accused during August 2010, persuaded the complainant to procure the same from their known exporter M/s.Zhejiang Founder Electricity and 3 Crl.A.No. 1522/2016 Machinery Co., Ltd., China, where the required machines of accused were manufactured. When the complainant assisted the accused to procure the same from the manufacturer and the accused got the required machines from them by importing the same in the month of August 2010 vide their three invoices 10F116-001, dated 15.08.2010 for USD 84,000/-, No.10F114-003, dated 15.08.2010 for USD 36,000/- and No.10F114-001, dated 25.09.2010 for USD 49,270/- totaling to USD 1,69,270/-, out of which the accused made only a small payment of USD 25,000/- only on 25.08.2011. The accused has not made entire payment and there was an outstanding of USD 1,44,270/-. Since the accused did not make payments due by them to the principal exporter as agreed and came out with a payment schedule and accordingly the accused had issued three cheques during 2011 which got dishonored and later after a long gap the accused had made another small payment of USD 20,000/- the accused were still due USD 1,24,270/- to their exporter. Accused came out with another payment schedule and towards discharge of their part payment, the accused issued cheque bearing No.366335, dated 31.07.2012 for Rs.10,32,000/- duly 4 Crl.A.No. 1522/2016 signed by the accused No.2 being the CFO and Company Secretary and the Accused No.3 being the Director and authorized persons jointly. The cheque was drawn on Standard Chartered Bank, Raheja Towers 26, M.G.Road Branch, Bengaluru drawn in favour of the complainant towards discharge of liability of the accused persons. The accused instructed the complainant to present the cheque on 01.08.2012 and accordingly complainant presented the said cheque with his banker Union Bank of India, Rajajinagar Branch, Bengaluru on 01.08.2012 and to the surprise of the complainant the same came to be dishonored for the reason "Funds Insufficient". As per the cheque return memo of the complainant banker dated 03.08.2012 complainant constrained to issue Legal Notice dated 14.08.2012 to all the three accused. The legal notice sent to the accused have been duly served on them on 14.08.2012. Inspite of the same, accused failed to repay the amount covered under the cheque to the complainant within stipulated time. Hence, present complaint.
4. Thereafter, the learned Magistrate has taken cognizance of the offence and recorded sworn-statement of the complainant. The Trial Court after finding a prima-facie 5 Crl.A.No. 1522/2016 case against the accused registered the case and issued process. The accused on service of summons appeared before the Trial Court and was enlarged on bail. Plea was read over and explained to the accused. Accused pleaded not guilty and claimed to be tired. The case was posted for trial of the accused.
5. In order to bring home the guilt of the accused, one Sri. Yogesh B, examined himself as PW.1 and got marked documents at Exs.P.1 to P.11.After closing the evidence of complainant's side, the accused persons has cross-examined the PW1. Accused persons were examined U/s 313 of Cr.P.C. statement, in which they have totally denied the entire case of the complainant. In support of their defence, accused persons have not produced any evidence but marked Ex.D1 and Ex.D1(a).
6. After hearing both the parties, on appreciation of oral and documentary evidence on record, the learned Magistrate has convicted the accused persons/appellants for the offence punishable under Section 138 of N.I Act and sentenced them to pay Rs.10,32,000/- to the complainant as a cheque amount and accused persons shall pay compensation amount of Rs. 10,000/- to the state and 6 Crl.A.No. 1522/2016 Rs.50,000/- to the complainant in addition to the cheque amount of Rs. 10,32,000/-. In default of payment of fine to undergo S.I. for one year.
7. Aggrieved by the impugned Judgment of the Trial Court, the appellants/accused persons is before this Court with this appeal. The accused persons/ appellants have contended that the Judgment of the Trial Court is perverse, illegal and unsustainable under law. The Trial Court erred in law in accepting and acting upon the evidence of P.W.1 which is being inadmissible. Therefore, the appellant pray to set aside the judgment and sentence passed by the trial Court and acquit the accused persons for the alleged offence.
8. Trial Court record was called for. The respondent appeared before the Court through his counsel on service of notice.
9. Heard arguments. Perused the records.
10. The following points arise for the consideration of the court :-
1) Whether the appellants have made out grounds to allow the appeal ?
2) What order?7 Crl.A.No. 1522/2016
11. The findings of the Court on the aforesaid points are as under :
Point No.1 :- In the Negative
Point No.2 :- As per final order for the
following:
REASONS
12. POINT NO.1:- Counsel for the appellants argued that there is no transaction between the appellants and respondent and respondent is not manufacturer nor supplier of sewing machines. As per the averments of the complaint that M/s Zhegiang founder electricity and machinery company limited, China were manufacturer and exporter, that there is no transaction between the respondents. The respondents have mis used the cheque and presented for encashment and cheque bearing No.366335 was returned as "Funds Insufficient", that the respondent is not manufacturer or exporters of sewing machines. Inspite of it they have taken the said cheque and filed the complaint to harass the appellants. The court has not considered the said facts and evidence on records and passed the impugned judgment which is contrary to law. Therefore, he prays to allow the appeal and prays to set aside the judgment passed by the trail court. Counsel for 8 Crl.A.No. 1522/2016 the respondent argued that court has considered the entire facts and records and passed the judgment. Inspite of paying the compensation amount, they have preferred the appeal. No grounds are made out by the appellants. Therefore, he prays to dismiss the appeal and confirm the judgment passed by the XXXII ACMM Court.
13. On perusal of the averments of the complaint as well as evidence of PW1 who is the GPA holder of complainant that the accused No.1 M/s Indus Fila limited, accused No.2 Hamsaraj Rathore and accused No.3 Shashikanth Mandana. The accused No.1 is the company, accused No.2 is CFO and company secretary of the accused No.1 and accused No.3 is the director of accused No.1. Accused No.1 for its urgent business necessities and requirement of sewing machines, during August-2010 pursueded the complainant to procure the same from their one exporter M/s Zhegiang founder electricity and machinery company limited, China. As per the requirements, during the month of August-2010 vide their three invoices 10F116-001, dated 15.08.2010 for USD 84,000/-, No.10F114-003, dated 15.08.2010 for USD 36,000/- and No.10F114-001, dated 25.09.2010 for USD 9 Crl.A.No. 1522/2016 49,270/- totaling to USD 1,69,270/-, out of which the accused made only a small payment of USD 25,000/- only on 25.08.2011. The accused has not made entire payment and there was an outstanding of USD 1,44,270/-. Since the accused did not make payments due by them to the principal exporter as agreed and came out with a payment schedule and accordingly the accused had issued cheque during 2011 which got dishonored and later after a long gap the accused had made another small payment of USD 20,000/- the accused were still due USD 1,24,270/- to their exporter. Accused came out with another payment schedule and towards discharge of their part payment, the accused issued three cheque bearing No.366335, dated 31.07.2012 for Rs.10,32,000/- duly signed by the accused No.2 being the CFO and Company Secretary and the Accused No.3 being the Director and authorized persons jointly. After presenting the said cheque, same came to be dishonored for the reason "Funds Insufficient". Then the complainant has presented the complaint after issuance of legal notice.
14. On perusal of the documents placed by the respondent that one Yogesh B has examined as PW1. In 10 Crl.A.No. 1522/2016 support of his case produced Ex.P1 to Ex.P11. On the other hand appellants have not examined any witness but they have got marked Ex.D1 i.e., copy of O.S. No.5859/2013. No doubt that the Ex.P3 is the cheque belongs to the accused No.1. Accused Nos. 2 and 3 have signed on the said documents. Appellants have not denied the said cheque belongs to accused No.1 and they have signed on the said documents. As per the arguments of counsel for the appellants the said cheque is not at all issued for discharge of debt as there is no transaction between appellants and respondent. The said cheque was taken by the respondent and same is mis used. It is not disputed the said cheque belongs to accused Nos. 1 to 3. On going through the Ex.P11 i.e., issued by the appellants mentioning the above said invoices and amount in USD and issued the five cheques in favour of M/s Gauge Sewing machines and spares as security deposit. The Ex.P11 reveals that there is a transaction between the appellants and respondent. If there is no any transaction between the appellants and respondent then they may not issue said cheque in favour of respondent. In this regard counsel for the appellants have not at all submitted any arguments.
11 Crl.A.No. 1522/2016
15. Counsel for the appellants have taken contention that M/s Zhegiang founder electricity and machinery company limited, China has filed the O.S.No. 5859/2013 before City Civil Court, Bengaluru against M/s Indus Fila Limited claiming the amount and in the said document it has marked Ex.D1(a) same is not considered by the trail court and passed the impugned judgment. On going through the Ex.D1 M/s Zhegiang founder electricity and machinery company limited, China has claiming the amount in US dollar from the appellant No.1. Civil suit is entirely different from criminal liability. If a person files civil suit that is a different nature rather than criminal case. In the present case, that the respondent have filed the complaint U/s 200 r/w 138 of N.I.Act stating that appellants have issued the cheque, same are/is dishonored for funds insufficient. But the civil case may be pending for adjudication. Mere filing the civil case there is no bar file the criminal case for the criminal offence. Section 138 of N.I. Act is summary in nature, if court comes to conclusion that accused has committed the offence, court may impose penalty as well as sentence. In the civil case, no such provision is available to sentence the parties. M/s Zhegiang 12 Crl.A.No. 1522/2016 founder electricity and machinery company limited, China represented by PW1 may be filed for raising the commercial invoice bearing No.10F114-003 dated 15.08.2010 but in the present case respondent claiming said amount for three invoices which are mentioned in the complaint. Therefore civil case cannot be taken into consideration while deciding the cases criminal in nature. Therefore the contention taken by the appellants cannot be taken into consideration.
16. Counsel for the appellants argued that said cheque is mis used by the respondent by filling the cheque presented for encashment. For the sake of argument that no prudent man will give the signed the blank cheque for unknown person. In the present case, it is not the defence of the appellants those cheque which was lost by the appellants, same was mis used nor the said cheque was issued for M/s Zhegiang founder electricity and machinery company limited, China, then same are mis used by the respondent. On going through the contents of cross examination of appellant, accused No.1 is the company, accused No.2 is the CFO of accused NO.1, accused No.3 is the director of the accused No.1, they are also doing business in Bengaluru. Normally business persons will not 13 Crl.A.No. 1522/2016 give any signed blank cheque to unknown person nor who were not concerned to the transactions. Appellants have taken contention said cheque was mis used by the respondents. It is not the defence of the appellants that the notice issued by the respondent are not served on them and it is not the defence of the appellants after receiving the notice that they have issued reply to the said notice stating that, they have not paid the cheque to the respondent, they have paid the cheque to M/s Zhegiang founder electricity and machinery company limited, China. In the present case except Ex.D1 appellants have not at all placed any document to come to conclusion that cheque was not issued to the respondent. Even they have not produced the rebuttal evidence U/s 118 and 139 of N.I. Act that they have not at all issued cheque to the respondent. Even though they have not at all issued stop payments to his banker. After getting the notice appellants have not approached the competent forum stating that said cheque were not issued to the respondent, same are mis used by the respondent. In this regard appellants have not at all placed any rebuttal evidence. Mere taking the defence that 14 Crl.A.No. 1522/2016 said cheque was not issued to the respondent cannot be taken into consideration.
17. Respondent got issued the legal notice calling upon the appellants stating the entire facts and also payments ought to be made by the appellants. In the said notice cheque number, amount and date of cheque has mentioned and issued to the appellants, same is not denied by the appellants. In order to corroborate the same, respondent had produced the document, same was issued by the appellants mentioning the invoice number, invoice date and buyer so also amount. If the appellants are not liable to pay the amount, then he may not issue said document. Even in order disbelieve the said document, appellants have not at all placed any documents as well as evidence. As already stated above, appellants are business persons, after receiving the legal notice then they may replay to the said notice. In this case no such reply has issued by the appellants. Therefore, court may draw adverse inference that after issuing the cheque, to escape from liability appellants have taken contention.
18. PW1 was cross-examined stating that no demand notice received by the appellant Nos. 2 and 3. On the other 15 Crl.A.No. 1522/2016 hand PW1 denied suggestion put forth by appellants. Appellants have not produced any document to show that they are not resided in the address mentioned in the notice and they have resided somewhere else, notice was not served on them. Mere cross of PW1 is not sufficient to come to conclusion no notice has been served on the appellants.
19. Appellants have taken contention that cheque was issued to the China company but not to respondent. Accused put suggestion to PW1, he deposed it is not true to suggest that cheque was issued to China company at the time of placing purchase order without filling the name and amount only by way of security. If respondent no way concerned to the appellants then why they have issued those cheque to the respondent was not brought from the PW1 nor explained by the appellants. Suggestion put forth to the PW1 itself reveals that the said cheque was given to the respondent. Appellants have taken contention that respondent has concocted the documents for the purpose of the case. Even appellants have got opportunity to prove which documents were concocted, who have concocted, in this regard there is no evidence brought by the appellants. Mere putting the suggestions, the respondent concocted the 16 Crl.A.No. 1522/2016 document, cannot be taken into consideration. As already stated above, respondent has concocted the document nor fill the cheque without the consent or permission of the appellants nor mis use the cheque, in this regard no rebuttal evidence placed by the appellants. Even though appellants have gave the cheque to the respondents without filing the same, then the respondent has got right to fill the cheque and present before proper forum. At this stage this Court has relied the decision reported in AIR 2019 SC 2446
- Crl. Appeal No.230-31 of 2019, decided between Bir Singh V/s. Mukesh Kumar dated 6.2.2019 wherein at para No.40, it has been clearly held that:
"Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt".
20. Ratio laid down in the above said judgment that who receive the cheque may write and present for encashment. On the other hand appellants have not at all placed any single document to come to conclusion without 17 Crl.A.No. 1522/2016 filing the cheque same is handed over to the respondent. Even they have not made any efforts to send the said cheque for handwriting experts to know that they have not written the same, after signing the said cheque mis used by the respondent. On perusal of the cheque appellant No.2 who is the CFO and company secretary of accused No.1 company and accused No.3 is the director of accused No.1. accused Nos. 2 and 3 have signed on the cheque and same is mis used by the respondent. Normally when cheque was issued to some other person as security purpose then only one person may sign the cheque and same is handed over to the other person. Herein this case, appellant Nos. 2 and 3 signed the cheque. They have not at all made any grounds to come to conclusion that they are not liable to pay the amount to the respondent, then they may not sign on the cheque. In this case appellant Nos. 2 and 3 have not denied signature on the cheque. Inspite of it they have taken contention cheque was mis used by the respondent. Even appellants have not at all made out any reasons to disbelieve the evidence of PW1 nor disbelieve the averments of the complaint i.e., three invoices and also amount in USD and they ought to pay remaining USD 1,24,270/- to 18 Crl.A.No. 1522/2016 their exporter. By considering all the facts that the appellants have not at all made out grounds to allow the appeal. With due respect to the ratio laid down in the above judgment, is applicable to the present case on hand. The respondent may fill up the cheque and present for encashment. Then burden is to appellants to prove said cheque was not issued for discharge of debt nor liability.
21. In this case appellant No.1 is the company, appellant Nos.2 are CFO and company secretary and appellant No.3 is the director of the company. Appellants have not denied the cheque belongs to their account and signature appearing on the said cheque belongs to them. When they admitted these two things then burden is on the appellants to prove that they have had not issued the cheque for discharge of debt and same is for security purpose. In the present case no such efforts has been made by the appellants. These are all circumstances shows that in order to escape from the payment of compensation amount appellants have filed the above said appeal. Under such circumstances, appellants have not made out any grounds to interfere in the judgment passed by the trail Court.
19 Crl.A.No. 1522/2016
22. In the case of 2010 AIR SCO 296 Rangappa Vs Mohan wherein the Hon'ble Supreme Court has held that the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case. Accused has failed to produce the presumption available under section 118 and 139 of N.I. Act.
23. In addition to this in the case of T.P. Murugan (Dead) Through legal representatives Vs Bojan (2018 (8) SCC 469), the Hon'ble Court has held that "once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability". In the present case the appellant has not denied the issuance of cheque and signature on the said cheque. When the accused admitted the issuance of the cheque then burden lies on the appellant to prove that he has not issued cheque for discharge of liability. Therefore with due respect ratio laid down in the above said judgments are applicable to the present case on hand. However based on the above said judgments the accused has not produced the rebuttal evidence, therefore the accused has not proved 20 Crl.A.No. 1522/2016 his defence. Therefore there is no need to interfere in the judgment passed by the XXXII ACMM Court, Bengaluru. Accordingly, Point No.1 is answered in the Negative.
24. POINT NO.2 :- In view of the discussions made on Points No.1, I proceed to pass the following:
ORDER The Criminal Appeal preferred by the appellant/accused U/Sec.374 (3) of Cr.P.C is hereby dismissed.
The impugned judgment of conviction and sentence passed by the learned XXXII Addl. Chief Metropolitan Magistrate, Bengaluru, dated 15.11.2016 in C.C.No.24611/2012 is hereby confirmed.
Send back the Trial Court records along with copy of this Judgment to the Trial Court forthwith.
(Dictated to the Stenographer typed by her directly on computer, corrected by me and then pronounced in the Open Court on this the 30 th day of January, 2024) sd/-
(A. EARANNA) LXII Addl.City Civil & Sessions Judge, (CCH-63), Bengaluru.