Bangalore District Court
M/S.Rajesh Exports Ltd vs M/S.Chinna Jewellers on 19 July, 2018
IN THE COURT OF THE XXV ADDL. CHIEF
METROPOLITAN MAGISTRATE, AT BANGALORE
Dated this the 19th day of July, 2018.
Present: Smt Shirin Javeed Ansari -BA.LL.B(Hon's)LL.M
XXV Addl. Chief Metropolitan Magistrate
Bangalore.
C.C.No.18981/2012
Complainant: M/s.Rajesh Exports Ltd
Company Incorporated under the
Companies Act
and having its office at No.4,
Bhatavia Chambers
Kumara Krupa Road, Kumara Park
East
Bangalore 1.
Represented by its Authorized
representative
B.G.Mallikarjun
(By Sri Sampath Kumar K-Advocate )
- Vs -
Accused: 1. M/s.Chinna Jewellers
Proprietory Concern,
Door No.10-1-58D
9, Shyam Complex, Maruthi
Veethika,
Udup 576 101, Represented by its
Proprietor
Mr.Andar Devi Prasad Shetty.
2.Mr.Andar Devi Prasad Shetty
S/o.M.Sundar Shetty
aged 46 years,
Proprietor , M/s.Chinna Jewellers
No.140/4/A, 2B, Alevoor,
Near Corporation Bank,
Udupi 576 133.
(By Sri Rathnakar - Advocate )
2 C.C.No.18981/2012
Offence complained of: U/s. 138 of Negotiable Instruments
Act.
Plea of accused: Pleaded not guilty.
Final Order: Accused No.1 and 2 are Acquitted.
Date of order: 19.7.2018.
JUDGMENT UNDER SEC.355 OF CR.PC
This is a complaint filed by the complainant
u/s.200Cr.P.C.against the accused person for the
offence punishable u/s.138 Negotiable Instrument Act
. (Herein after called as the N.I.Act for reference).
2. The brief facts of the case of the complainant
are as under:
The complainant company is incorporated under
the Companies Act 1956 having its registered office at
Bangalore . Complainant company is represented by
its authorized officer Mr.Mayan K Mallik, who was
subsequently substituted by Sri Mallikarjun B.G. .
The complainant submits that complainant is
engaged in manufacture and sale of gold and gold
jewellery items through out the county. The head office
of the complainant company is located at Bangalore.
3 C.C.No.18981/2012
3. It is further submitted that the accused are
located in Udupi and accused No.1 is an exclusive
dealer of gold and gold jewellery items manufactured
and supplied to the accused by the complainant for
the purpose of sale by the accused on commission
basis.
The complainant further submits that the
accused approached the complainant for gold and
gold jewellery for sale to be conducted by the accused
in Udupi . The complainant and the accused agreed
and ultimately the said decision was reduced in
writing in the form of agreement on 19.12.2007.
4. The complainant further submits that in
pursuance of the said agreement, the complainant
had been supplying gold jewllery and gold coins to
the accused. After series of transaction, the accused
was holding 1393 pieces of 22 carat gold jewellery
weighing 12692.700 gms, and 14 pieces of 24 carrat
coins weighing 452 gms and cash balance of
Rs.36,17,792/- as on 26.5.2010 all belonging to the
complainant .
5. The complainant further submits that after
several persuasions, the accused returned part of the
4 C.C.No.18981/2012
gold and gold jewellery of 1134 pieces of 22 carat gold
weighing 10228.700 gms and 2 pieces of 22 carat gold
weigh 1 gm each. Thus , the accused was still due of
jewellery items of 22 carat of gold jewellery weighing
2464 gms and 24 carat gold jewellery weighing 450
gms . Apart from this , the accused was also due of
Rs.36,17,792/- as the value of the gold sold and the
proceeds of which has not been remitted to the
complainant . The value of the gold due and the cash
balance from the accused under this account as on
10.11.2010 was Rs.95,30,386/- .
6. The complainant further submits that the
accused was due for the wholesale department of
2812.3 gms of 22 carat gold valued at Rs.56,83,658/-
as on 10.11.2010 . The complainant has also
submitted that both the account put together the
accused became due of Rs.1,52,14,044/- In this
regard, the complainant had written letter
dt.4.11.2010 requesting the accused to clear the
entire balance. The complainant further submits
that towards discharge of the aforesaid debt, the
accused no.1 M/s.Chinna Jewellers through accused
no.2 as proprietor of accused no.1 issued cheque
5 C.C.No.18981/2012
bearing No.198132 dt.17.11.2010 for a sum of
Rs.1,50,00,000/- drawn on Canara Bank, Court Road,
Udupi on an assurance that the said cheque will be
honored in discharge of the debt/liability of the
complainant company. On receipt of the cheque, the
complainant issued letter dt.15.11.2010.
7. The complainant further submits that as per
the promise of the accused the cheque bearing No.
198132 dt.7.11.2010 for sum of RS.1,50,00,000/-
drawn on Canara Bank, Udupi was presented for
realization on 21.11.2010 through the complainant's
banker Canara Bank Overseas Branch, Bangalore.
8. The complainant further submits that the
said cheque returned unrealized with endorsement
"Funds Insufficient" on 22.11.2010 which attracts the
provisions of Sec.138 of Negotiable Instrument Act.
The act done by the accused is to defraud the
complainant company of the legitimate amount.
9. The complainant further submits that the
cheque in question had been issued by the accused for
the discharge of the liability. The accused had
impressed upon the complainant that the cheque
would be honored on presentation. The complainant
6 C.C.No.18981/2012
submits that the cheque had been returned for the
reason "Funds Insufficient", The accused have
consequently failed and neglected to pay the
outstanding amount which was due and payable .
10. The complainant further submits that the
complainant company had issued demand notice
dt.23.11.2010 to the accused No.1 and 2 for payment
of the outstanding due amount covered under the
cheque. The said notice is issued through RPAD and
under COP dt.25.11.2010. The complainant also
submits that the RPAD sent to the accused no.1 did
not return and as such the complainant had written
a letter to the postal authorities to give the status of
the RPAD. To the said letter, the postal authorities
have given reply that the same has been served on the
accused. The demand notice, addressed to accused
No.1 and 2 were served on 3.12.2010 . Despite, of this
the accused has issued vague reply dt.14.12.2010 to
the demand notice issued by the complainant .
11. The complainant further submits that the
accused had business transaction with the
complainant. The accused no.2 is Proprietor of
accused no.1 M/s. Chinna Jewellers and the accused
7 C.C.No.18981/2012
No.2 is responsible personally and incharge of day to
day business conduct of the accused No.1 . Accused
No.2 is the signatory of the cheque. Hence, accused
No.1and 2 are jointly responsible for the affairs of the
propreitory concern and the consequences of the
dishonor of the cheque. They are also liable to be
prosecuted u/s.141 of the Negotiable Instrument Act.
12. The complainant further submits that all
the ingredients of SEc.138 and 141 of Negotiable
Instrument Act are attracted in the instant case. The
cause of action of the dishonor of the said cheque and
the offence committed thereby when the cheque was
issued on 17.11.2010 and when the cheque was
returned unpaid on 22.11.2010, when the demand
notice pursuance of dishonor of the cheque was
issued on 22.11.2010, and the demand notice served
on accused no.1 and 2 on 3.12.2010 and the time for
payment expired consequently. Hence, prayed to
allow the complaint.
13. The complainant has lead his pre
summoning evidence on 23.8.2012 .and has filed his
affidavit in lieu of Sworn Statement. Prima-facie a
8 C.C.No.18981/2012
case has been made out against the accused and he
has been summoned vide order of this court.
14. The accused appeared before this court on
6.10.2016. and he has been enlarged on bail . The
substance of accusation has been read over to him to
which, he plead not guilty and claims to be tried.
15. In his post summoning evidence the
complainant has examined himself as PW 1 and filed
his affidavit, wherein, he has reiterated the averments
made in the complaint.
16. In support of the case, the complainant
has produced the documents marked at Ex.P.1 to
Ex.P.9 Ex.P.1 is Certificate of Incorporation. Ex.P.2 is
the Board Resolution. Ex..P.3 is the cheque in
question bearing No.198132 dt.17.11.2010 for
Rs.1,50,00,000/- Ex.P.4 is the cheque return memo
dt.22.11.2010. Ex.P.5 is the legal notice. Ex.P.6 is the
postal acknowledgement . Ex.P.7 is the letter issued
by the postal authorities dt.7.1.2011. Ex.P.8 is the
reply notice. Ex.P.9 is the board resolution
dt.14.8.2012.
9 C.C.No.18981/2012
17. The statement of accused u/s.313 Cr.P.C
has been recorded. The accused denied the
incriminating circumstances found against him and
lead his defence evidence and got marked Ex.D.1 to
Ex.D12 wherein Ex.D.1 and Ex.D2 are the
agreements dt. 19.12.2007 . Ex.D.3 are Ex.D4 are the
mortgage deeds dt.5.1.2008. Ex.D.5&D.6 are the
letters dt.26.5.2010 issued by the complainant to the
accused company requesting the accused company to
hand over all the goods belonging to the complainant
to authorized representatives Sri Bheemaiah. Ex.D.7
is the Certified copy of the receipt discharging
equitable mortgage by deposit of title deeds. Ex.D.8 is
the Certified copy of the order sheet in PCR
NO.23707/2010 . Ex.D.9 is the receipt of discharging
equitable mortgage by depositing of title deeds.
Ex.D.10 is the letter issued by the accused company to
the complainant company, stating hading over of the
goods to Bheemaiah weight of the goods approximately
10228.70 gms and also regarding termination of
franchise agreement on 26th May 2010 .Ex.D11 is the
reply notice issued by the accused person. Ex.D12 is
the Certified copy of the order dt.5.2.2018.
10 C.C.No.18981/2012
18. Both the sides have canvassed there
respective arguments before this court.
19. Upon hearing arguments, the following
points arise for my consideration:
1. Whether the complainant
proves that the accused has
committed an offence
punishable u/s. 138 Negotiable
Instrument Act ?
2. What order.
20. My answers to the above points are as
under:
Point No.1 : In the Negative.
Point No2 : As per final order for the
Following,
REASONS
21 Point No1.: The case of the complainant is
that the complainant company is incorporated under
the Companies Act 1956 having its registered office at
Bangalore .
The complainant company is incorporated under
the Companies Act 1956 having its registered office at
Bangalore . Complainant company is represented by
its authorized officer Mr.Mayan K Mallik, who was
subsequently substituted by Sri Mallikarjun B.G. .
11 C.C.No.18981/2012
The complainant submits that complainant is
engaged in manufacture and sale of gold and gold
jewellery items through out the county. The head office
of the complainant company is located at Bangalore.
22. It is further submitted that the accused
are located in Udupi and accused No.1 is an exclusive
dealer of gold and gold jewellery items manufactured
and supplied to the accused by the complainant for
the purpose of sale by the accused on commission
basis.
23. The complainant further submits that the
accused approached the complainant for gold and
gold jewellery for sale to be conducted by the accused
in Udupi . The complainant and the accused agreed
and ultimately the said decision was reduced in
writing in the form of agreement on 19.12.2007.
24. The complainant further submits that in
pursuance of the said agreement, the complainant
had been supplying gold jewllery and gold coins to
the accused. After series of transaction, the accused
was holding 1393 pieces of 22 carat gold jewellery
weighing 12692.700 gms, and 14 pieces of 24 carrat
coins weighing 452 gms and cash balance of
12 C.C.No.18981/2012
Rs.36,17,792/- as on 26.5.2010 all belonging to the
complainant .
25. The complainant further submits that after
several persuasions, the accused returned part of the
gold and gold jewellery of 1134 pieces of 22 carat gold
weighing 10228.700 gms and 2 pieces of 22 carat gold
weigh 1 gm each. Thus , the accused was still due of
jewellery items of 22 carat of gold jewellery weighing
2464 gms and 24 carat gold jewellery weighing 450
gms . Apart from this , the accused was also due of
Rs.36,17,792/- as the value of the gold sold and the
proceeds of which has not been remitted to the
complainant . The value of the gold due and the cash
balance from the accused under this account as on
10.11.2010 was Rs.95,30,386/- .
26. The complainant further submits that the
accused was due for the wholesale department of
2812.3 gms of 22 carat gold valued at Rs.56,83,658/-
as on 10.11.2010 . The complainant has also
submitted that both the account put together the
accused became due of Rs.1,52,14,044/- In this
regard, the complainant had written letter
13 C.C.No.18981/2012
dt.4.11.2010 requesting the accused to clear the
entire balance.
27. The complainant further submits that
towards discharge of the aforesaid debt, the accused
no.1 M/s.Chinna Jewellers through accused no.2 as
proprietor of accused no.1 issued cheque bearing
No.198132 dt.17.11.2010 for a sum of
Rs.1,50,00,000/- drawn on Canara Bank, Court Road,
Udupi on an assurance that the said cheque will be
honored in discharge of the debt/liability of the
complainant company. On receipt of the cheque, the
complainant issued letter dt.15.11.2010.
28. The complainant further submits that as
per the promise of the accused the cheque bearing No.
198132 dt.7.11.2010 for sum of RS.1,50,00,000/-
drawn on Canara Bank, Udupi was presented for
realization on 21.11.2010 through the complainant's
banker Canara Bank Overseas Branch, Bangalore.
29. The complainant further submits that the
said cheque returned unrealized with endorsement
"Funds Insufficient" on 22.11.2010 which attracts the
provisions of Sec.138 of Negotiable Instrument Act.
14 C.C.No.18981/2012
The act done by the accused is to defraud the
complainant company of the legitimate amount.
30. The complainant further submits that the
cheque in question had been issued by the accused for
the discharge of the liability. The accused had
impressed upon the complainant that the cheque
would be honored on presentation. The complainant
submits that the cheque had been returned for the
reason "Funds Insufficient", The accused have
consequently failed and neglected to pay the
outstanding amount which was due and payable .
31. The complainant further submits that the
complainant company had issued demand notice
dt.23.11.2010 to the accused No.1 and 2 for payment
of the outstanding due amount covered under the
cheque. The said notice is issued through RPAD and
under COP dt.25.11.2010. The complainant also
submits that the RPAD sent to the accused no.1 did
not return and as such the complainant had written
a letter to the postal authorities to give the status of
the RPAD. To the said letter, the postal authorities
have given reply that the same has been served on the
accused. The demand notice, addressed to accused
15 C.C.No.18981/2012
No.1 and 2 were served on 3.12.2010 . Despite, of this
the accused has issued vague reply dt.14.12.2010 to
the demand notice issued by the complainant .
32. The complainant further submits that the
accused had business transaction with the
complainant. The accused no.2 is Proprietor of
accused no.1 M/s. Chinna Jewellers and the accused
No.2 is responsible personally and incharge of day to
day business conduct of the accused No.1 . Accused
No.2 is the signatory of the cheque. Hence, accused
No.1and 2 are jointly responsible for the affairs of the
propreitory concern and the consequences of the
dishonor of the cheque. They are also liable to be
prosecuted u/s.141 of the Negotiable Instrument Act.
The complainant further submits that all the
ingredients of SEc.138 and 141 of Negotiable
Instrument Act are attracted in the instant case. The
cause of action of the dishonor of the said cheque and
the offence committed thereby when the cheque was
issued on 17.11.2010 and when the cheque was
returned unpaid on 22.11.2010, when the demand
notice pursuance of dishonor of the cheque was
issued on 22.11.2010, and the demand notice served
16 C.C.No.18981/2012
on accused no.1 and 2 on 3.12.2010 and the time for
payment expired consequently
33. On the other hand, it is the defence of the
accused person that the complaint filed by the
complainant is not maintainable either in the eyes of
law or on the basis of facts. The complainant by
holding the cheque with them had come up with
present complaint in order to enrich themselves in
unlawful way though the said cheque in question is
not issued by the accused towards clearance of
liability. Therefore, the complaint lacks bonafideness
and it is liable to be dismissed.
34. The accused further submits that the
cheque in question is not issued by him towards
clearance of liability and the complainant has
misused the cheque and approached this court in
order to gain wrongful amount. The accused is not
aware of presentation of the alleged cheque for
encashment on 21.11.2010 and return of the same on
22.11.2010 with endorsement "Funds Insufficient".
The accused has not committed an offence punishable
u/s.138 Negotiable Instrument Act
17 C.C.No.18981/2012
35. It is further submitted by the accused that
the complainant company is engaged in the business
of gold jewellery and other allied products.
M/s.Chinna Jewellers is also engaged in the business
of sale of gold jewellery. After negotiation and
discussion between the complainant and the accused
a franchise agreement, dt.19.12.2007 came to be
entered between the parties and according to the said
franchise agreement, the accused shall have to sell
the products and services of the complainant and
others as enshrined in the agreement of franchise.
According to the said agreement, the accused are
doing business with all due diligence.
36. It is submitted that at the time of entering
into franchise agreement on 19.12.2007 towards
security to run the business the accused paid sum of
Rs.15,00,000/-towards the deposit to the complainant
which carried interest at 18% p.a. a Mortgage deed in
respect of 2 properties bearing No.150-4A 2B situated
at Alevoor village Udupi measuring 9 cents and 6 cents
respectively with built area of about 3200 sq ft and
another mortgage deed in respect of property bearing
No.10-1- 58D8 and 10-1-58D9 measuring 450 sq ft
18 C.C.No.18981/2012
and 700 sq ft on the ground floor of commercial
complex for the goods supplied by the complainant.
That both the deeds have been registered as document
no.UDP-1-105379 /2007-08 book No.1 stored in CD
no.UDPD 50 and document No.UDP 1-1-5380-2007-
08 book No.1 stored in UDPD 50 in the office of the
Sub Registrar Udupi. At that juncture the cheque in
question was handed over to the complainant by the
accused which is well within the knowledge of the
complainant .
37. As per the terms of the agreement, the
complainant used to provide the stocks and the
accused were running the business as per the item to
item dictum of the complainant and the stocks so
supplied were meant for sale and it was dispatched on
consignment sale basis and it was the complainant
who controlled the price of day, designs of the jwelerry,
no of pieces to be supplied to the outlet and types of
products and the accused had no role in the trade
except to sell the stock so supplied by the
complainant. It is further submitted that subsequent
to the sale, the accused used to remit the value thereof
and it was centralized billing. The accused worked
19 C.C.No.18981/2012
upto the satisfaction of the complainant as per the
terms and conditions of the agreement, dt.19.12.2007.
38. It is further submitted by the accused that
during the course of business some
misunderstanding crept between the complainant and
the accused regarding non supply of the requisite
design, type of products, latest stock, which resulted
in ending up of the franchise business. It is submitted
that when the accused informed the complainant
about the termination of the agreement, the
complainant with malafide intention on false,
frivolous and fictitious grounds , a private complaint
came to be lodged against the accused on the file of
Hon'ble VIII ACMM for the alleged offence punishable
u/s.420 of IPC. Subsequently , the said PCR is
referred to High Grounds police station u/s.156(3) of
the Cr.P.C. and an application filed by the
complainant u/s.93(1) of Cr.P.C and it was ordered to
seize the goods in case if the Police Inspector feels
necessity of seizure of the goods for the purpose of
investigation. After filing the said complaint, the
complainant sent his authorized representative to
the place of business of the accused along with
20 C.C.No.18981/2012
gundas and under said order of the court, the
complainant succeeded in taking away all the
jewellery. At that point of time the accused insisted
for cancellation of mortgage deed and accordingly, the
complainant representative acting upon the
complainant's instructions executed the discharge
receipt on 22.6.2010.
39. It is submitted that the authorized
representatives acted upon the written instructions of
the complainant and the letter addressed to the
accused dt.26.5.2010. Accordingly , all the jewellery
and the cash have been returned and handed over to
the representative of the complainant company,
Sri.Bheemaiah .
40. It is further submitted that, in good faith
and to have cordial relationship, the accused has
handed over all the goods which were in the custody
and settled the amount payable by the accused to the
complainant reserving his right to claim the amount
due from the complainant . At that point of time the
complainant assured that the cheque in question
which remained with the Complainant would be
returned to the accused soon after the goods received
21 C.C.No.18981/2012
and also further assured to return all the other
documents. But, subsequently, the complainant
failed to return the cheque to the accused for the
reason that the said cheque has been misplaced and
could not be traced . The accused believed the version
of the complainant in this regard and in good faith
reposed the confidence with the complainant . The
accused kept quite hoping that the complainant
would return the said cheque in question to the
accused. But, the complainant as per their
assurance did not return the cheque in question nor
did they settle the outstanding amount to the
accused. In this regard the accused caused legal
notice dt.3.6.2010 calling upon the complainant to
pay sum of Rs.1,14,45,619/- to the accused and also
to comply with the demands made therein . The said
legal notice is duly acknowledge by the complainant .
41. It is further submitted that the accused has
also filed caveat petition before the Hon'ble City Civil
Judge, Bangalore in Caveat Petition No.2715/2010 on
18.6.2010 apprehending that the complainant may
approach the Civil Court of law with an application
u/s.9 of Arbitration and Conciliation Act for interim
22 C.C.No.18981/2012
relief. The accused has been agitating against the
complainant of the misdeeds and having lost the
reputation in the society, fighting legally , the
complainant by misusing the cheque in question had
initiated the malicious proceeding against the accused.
The questions of issuance of cheque bearing
No.198132 dt.17.11.2010 for Rs.1,50,00,000/- of
Canara bank does not arise at all . The complainant
has misused the cheque obtained at the time of
entering into the franchise agreement dt.19.12.2007
and under the declaration dt.3.1.2008. Without
returning the same and by inventing the story ,the
complainant has filed the present case against the
accused.
42. It is further submitted that the question of
issuing the cheque for discharge of debt/liability does
not arise for consideration because as per the letter
dt.22.6.2010, the representative of the complainant
Sri K. V. Bheemaiah has discharged the mortgage deed
and also issued the receipt for having received the gold
weighing 10228.70 gms . When entire settlement and
dispute, misunderstanding crept in have been settled,
the questions of accused issuing the cheque in
23 C.C.No.18981/2012
question dt.17.10.2010 does not arise at all. The
complainant without returning the cheque in
question has misused the same.
43. It is further submitted that, once the
criminal case instituted by the complainant on
frivolous grounds in PCR 23707/10 wherein the
jurisdictional police filed B report on 16.8.2010 after
investigation, the complainant by inventing the
story and misusing the cheque in question, filed the
present complaint without returning the cheque.
Therefore, the complainant is not fair in his approach
to this court. Hence, on all these grounds the
accused prayed to dismiss the complaint .
44. During the course of arguments, the
learned counsel for the complainant vehemently
argued before the court that the matter is admitted by
the accused that the complainant is manufacturer of
gold and gold jewellery. The franchise agreement, is
not yet terminated. Unless it is terminated, non
performance of the agreement is violation of the terms
of the said agreement. The performance of the
agreement is recurring. The liability of the accused
continues when the accused did not perform the
24 C.C.No.18981/2012
agreement. The complainant asked to return the
items as per Ex.D.5 which pertains to handing over of
the goods. Ex.D.5 and Ex.D6 are undisputed by the
accused.
45. The learned counsel for the complainant
argues that as per the averments of the accused he
has paid Rs.15,00,000/- in second part of Ex.D6 this
fact is admitted. The said Rs.15,00,000/- amount is
deposited under the franchise agreement. The
accused cannot claim it. He cannot take it into
consideration that the security deposit paid to the
complainant has to be returned to him. That can
be paid back to the complainant company if the
company does not suffer any loss. When mortgage
deed is executed, the liability of the accused extends.
The liability to return the market value of the gold is
upon the accused for which the accused has issued
the cheque in question . Therefore, there existed a
legally recoverable debt for which the accused is
liable to pay to the complainant . Hence, on all these
grounds learned counsel for the complainant prayed
to convict the accused person for having committed an
25 C.C.No.18981/2012
offence punishable u/s.138 Negotiable Instrument Act
and to award compensation to the complainant .
46. On the other hand, learned counsel for the
accused vehemently argued before the court, that as
per the allegations made by the complainant , Ex.P.3
the cheque was issued on 17.11.2010. But the
agreement entered into by the complainant and the
accused persons are dated 19.12.2007. The
complainant have obtained 2 declarations from the
accused person. In fact there are 3 declarations under
which the complainant have obtained 3 different
cheques from the accused. At that point of time, the
accused had given blank signed cheque to the
complainant in the year 2008 itself. But one among
the said cheques came to be filled in the year 2011.
47. Learned counsel for the accused further
vehemently argued that PW 1 has no knowledge about
the transaction. When an application u/s.91 Cr.P.C.
was filed by the accused seeking direction against the
complainant to produce the declarations entered into
between the complainant and the accused person ,
and though this court allowed the said application,
but the complainant did not produce it. The
26 C.C.No.18981/2012
complainant has withheld the documents which are
necessary for adjudication of the matter. Hence
adverse inference has to be drawn against the
complainant .
48. Learned counsel for the accused further
argued that Ex.D.5 is issued by the accused on
26.5.2010 as the transaction were closed. Ex.D.6 is
issued by the complainant on 26.5.2010. The
accused has returned all the gold and gold jewellery to
the complainant and the complainant has endorsed
on it. Soon after this, release deed is executed by the
complainant .
49. It is further argued by the accused counsel
that though the complainant states in his complaint
that they have lodged a complaint against the accused
person for the offence punishable u/s.420 IPC, but
failed to prove the same. The police have filed B
report against the said complaint and the
complainant has not challenged the said B report till
today. The case was closed on 9.12.2015 itself.
50. It is further argued by the learned counsel
for the accused that after lapse of 6 months of
franchise agreement, the complainant has presented
27 C.C.No.18981/2012
the cheque in question . IN demand notice, no details
of the transaction and the date of issuance of the
cheque are mentioned. The demand Notice is also
not in the required format /not in accordance with
the provisions of Sec. 138 Negotiable Instrument Act.
Therefore, the learned counsel for the accused
prayed to acquit the accused person by dismissing the
complaint.
51. IN reply to the arguments, canvassed by the
learned counsel for the accused , learned counsel for
the complainant argued that the mortgage agreement,
overseeds the franchise agreement. The accused has
to first terminate the mortgage deed. He should
discharge his liability first. There are correspondence
made by the complainant seeking for return of gold .
The accused admits that he has returned part of the
gold only. Hence, the cheque is issued in response to
the settlement arrived at by the parties . Therefore,
the liability of the accused is to pay the cheque
amount . Hence, the accused cannot escape from his
liability. Thus, the learned counsel for the
complainant again prayed to convict the accused
person .
28 C.C.No.18981/2012
52. In this back ground after consideration of
the arguments canvassed by both the sides an
important aspect which is required to be stated at the
outset is that the accused had filed an application
u/s.91 of Cr.P.C seeking direction against the
complainant to produce the declaration executed
into between the complainant and the accused
dt.3.1.2008 which was admitted by the complainant
during the course of cross examination. According to
the accused person, the said declaration is in the
possession of the complainant . The said document i.e
the declaration was necessary for adjudication of the
matter on merits. But, the complainant had opposed
said application, by way of objections stating the
accused has no matter of right to compel the
complainant to produce any document. The accused
has issued the cheque in question in discharge of his
liability and the said cheque is dishonored on
presentation. The complainant has duly issued and
served the notice upon the accused and despite of
service of notice the accused has not paid the cheque
amount. Hence. committed an offence punishable
u/s.138 Negotiable Instrument Act . But, on entire
29 C.C.No.18981/2012
perusal of the cross examination portion of PW 1, it is
found that PW1 in his cross examination dt.12.9.2017
admitted that there is declaration pertaining to this
case and they have failed to produce the said
declaration. The said declaration has been executed
into between the complainant and the accused
person. Having admitted this factual matter of the
case, the complainant has failed to produce the same
before the court inspite of issuance of direction vide
order dt.5.2.2018. On the subsequent dates of
hearing the complainant has filed memo stating that
all the documents are released in favour of the
accused at the initial level . They are searching the
same but unable to find it. This shows that the
complainant have not complied the orders made by
this court. They have withheld the material documents
from producing the same before the court . Therefore,
as per Sec.114 of Evidence Act, adverse inference has
to be drawn against the complainant for withholding
of relevant evidence / document
53. Further the presumption under the
Negotiable Instrument Act was drawn for
consideration. No doubt the court has to presume a
30 C.C.No.18981/2012
Negotiable Instrument to be for consideration unless
the existence of consideration is disproved i.e on
consideration of matter before it, the court either
believes that the consideration does not exist or
considers the non existence of consideration so
probable that a prudent man ought under the
circumstances of the particular case to act upon the
supposition that the consideration does not exists.
54. The presumption u/s.118 and 139 is with
regard to issuance of the cheque/instrument for
consideration and in discharge of debt. The initial
burden is upon the accused to rebut the said
presumption by raising a probable defence. If he
discharges the said burden, the onus thereafter
shifts on to the complainant to prove his case.
Whether the initial burden has been discharged by the
accused is a questions of fact. But, the burden of
proof on the accused is not heavy. He need not
disprove the case of the prosecution in its entirety. He
can discharge the burden on the basis of
preponderance of probabilities through direct or
circumstantial evidence. For the said purpose the
31 C.C.No.18981/2012
accused can rely upon the evidence adduced by the
complainant.
55. In the instant case as per the complaint
averments, the complainant and the accused entered
into franchise agreement that towards the discharge
of the said liability, the accused issued the cheque in
question and the said cheque got dishonored for the
reason "Funds Insufficient" in the account of the
accused. The complainant alleges that the cheque
was issued towards the amount due to the
complainant in relation to franchise agreement. The
accused defends his case on the grounds that he had
already returned all the gold and gold jewellery to the
complainant to its authorized person Sri Bheemaiah
and he has already handed over the sale proceeds to
the complainant. At the time of entering into the
agreement, the accused had deposited Rs.15,00,000/-
security deposit amount and he had no dues to be
paid to the complainant. At the time of entering into
the transaction, there were declaration executed
between the parties and under the said declaration,
the complainant obtained some security cheques from
the accused and even after termination of the
32 C.C.No.18981/2012
transaction, the complainant has misused the said
cheque obtained for the purpose of security. Despite
of admitting the fact that the declaration was executed
between the parties, complainant have failed to
produce the same. This itself is sufficient to rebut the
presumption u/s.118 of Evidence Act.
56. On careful perusal of cross examination of
PW 1, it is found that it appears that PW 1 is not
aware of the date when the alleged cheque came to be
issued in favour of the complainant . It is undisputed
by the complainant that there are other documents
pertaining to the transaction between the complainant
and the accused person. During the cross
examination the accused counsel got marked Ex.D.1
to Ex.D7 by way of confrontation. ExD.1 and Ex.D2
are the agreements dt.19.12.2007 entered into
between the complainant and the accused
proprietory concern. Ex.D3 and Ex.D4 are mortgage
deeds executed in favour of Mayank.K.M, the
representative of the complainant company. Further
the counsel for the accused produced the declaration
pertaining to the present transaction. But since the
said declaration are xerox , they are not marked
33 C.C.No.18981/2012
before the court. But this document is admitted by
PW1 in his cross examination. The declaration is
dt.18.12.2007, wherein, at para no. 6 it is clearly
mentioned that in discharge of the debt /liability,
M/s.Chinna Jewellers, the accused concern have
confirmed , declared and accepted the issuance of
post dated cheques in favour of the complainant
bearing No.198132 drawn on Canara Bank, Court
Road branch, Udupi for Rs.1,50,00,000/- duly signed
by Mr.Andar Devi Prasad Shetty the authorized
signatory of M/s.Chinna Jewellers. This aspect of
the matter clearly go to show that the accused has
issued a post dated cheque at the time of entering into
the transaction in favour of the complainant . This
aspect of the matter is clearly admitted by PW 1 in his
cross examination stating that they have not
produced the said declaration before the court and
that they have no hurdle to produce the same.
Admittedly, the accused had issued post dated cheque
in favour of the complainant in discharge of the
liability of the transaction between the complainant
and the accused. If this aspect of the mater is taken
into consideration, then the questions arises as to
34 C.C.No.18981/2012
whether there was a legally enforceable debt by the
accused person in favour of the complainant as on the
date mentioned in the cheque. Admittedly the said
declaration is of the year 2007 and the date mentioned
in the cheque is 17.11.2010. This aspect of the
matter itself creates doubt on the very case of the
complainant .
57. Admittedly the complainant had also got
executed a mortgage deed in his favour from the
accused person. It is clearly admitted by PW 1 in his
cross examination that the said mortgage deed and
the franchise deed are closed. After closure of said
mortgage deed and franchise deed ,there is no further
transaction between the complainant and the accused
person.
58. The accused has further produced Ex.D.7,
the Certified copy of the receipt discharging an
equitable mortgage by deposit of title deeds wherein at
page NO.2 it is clearly mentioned in the said deed
dt.22.6.2010 that the mortgager Sri. Andar Devi
Prasad Shetty i.e the accused in the instant case has
desired to close the mortgage deed . Under the said
equitable mortgage deed by paying the entire amount
35 C.C.No.18981/2012
of the mortgage and get the title deeds of the schedule
property freed from the charge of the said equitable
mortgage deed. It is further mentioned that the
mortgager has paid and the mortgagee received the
entire amount of the debt i.e 1,10,00,000/- and
accordingly the mortgagee agreed to execute receipt
thereof in favour of the mortgager i.e the accused
person. Said Ex.D.7 is a registered document
produced by the accused. The complainant has not
at all whispered about this document either in his
complaint or during the trial. This aspect of the
matter shows that the complainant has suppressed
the material facts before this court. When the
transaction, between the complainant and the
accused persons has itself been closed, and the
complainant has executed the receipt discharging
equitable mortgage by deposit of title deeds in favour
of the accused, the questions of existence of liability of
Rs.1,50,00,000/- in favour of the complainant does
not arise at all. It is necessary to repeat here that the
said agreement, ie receipt discharging equitable
mortgage by deposit of title deed is dt.22.6.2010 and
the cheque in question is dt. 17.11.2010. Therefore,
36 C.C.No.18981/2012
this aspect of the matter surrounds the case of the
complainant with suspicion. The complainant has not
at all tried to furnish explanation in this regard. But
PW 1 has clearly admitted the documents in his cross
examination, Further , Ex.D.5 further makes it clear
that the complainant themselves on 26.5.2010 asked
the accused concern to hand over the goods to their
authorized representative whose signature they have
attested in Ex.D.5. Further Ex.D.6 clearly go to show
that the complainant themselves asked the accused
to close down the franchise agreement. The contents
of Ex.D.6 clearly go to show that as per the mutual
agreement between the complainant and the
accused, the complainant have requested the
accused to hand over the jewellery as mentioned in
Ex.D.6 and it is also mentioned in Ex.D.6 that the
complainant are holding deposit of Rs.15,00,000/-
belonging to the accused person which the
complainant have offered the accused to deduct out
of the cash payable to them. It is further mentioned
in Ex.D6 that on receipt of the gold and cash
mentioned in Ex.D6, they have released the mortgage
of the property to the accused. It is also mentioned
37 C.C.No.18981/2012
that upon clearance of the gold items and the cash
mentioned in Ex.D.6, i.e
1. 14 piece weighing 452 gms of 24 carat gold coins.
2. 1393 pieces weighing 12692.7 gms of 22 carat gold
jewellery. .
3. Cash of 36,17,792/- , the complainant has
undertaken to sign any paper for release of the
mortgage .
This aspect of the matter shows that after clearing
the above mentioned gold and cash from the accused
person ,the complainant have undertaken to release
the mortgaged property. Accordingly, they have
released the mortgaged property on 22.6.2010. This
aspect of the matter further makes it clear that the
accused has cleared the above mentioned gold and
cash in favour of the complainant . Then only, they
have released the mortgaged property in favour of the
accused person. All these aspects of the matter
clearly go to show that as on the date mentioned in the
cheque, there exists no legally enforceable debt or
other liability in favour of the complainant from the
accused person .
38 C.C.No.18981/2012
59. Though the complainant have initiated a
criminal proceedings u/s.420 IPC against the accused
person ,but , on perusal of Ex.D.8 it is clear that after
due investigation the Investigation Officer has filed B
summary report before the court, and the Hon'ble
court accepted the said B summary report and closed
the matter. If at all there was any liability or amount
to be paid by the accused person, the complainant
would have contested or challenged the said B
summary report filed by the Investigation Officer. But,
absolutely no such efforts are done by the complainant
in this regard. The complainant has suppressed
many material facts before this court. The
complainant has also withheld many material
documents from being produced before this court.
Therefore, this aspect of the matter gives opportunity
to the court to draw adverse inference against the
complainant .
60. It appears that PW 1 the representatives of
the complainant company is not aware of any factual
matrix of the case. He has clearly stated in cross-
examination that he does not remember of the date of
statutory notice to the accused person as well as the
39 C.C.No.18981/2012
date of its service on the accused. PW 1 has also
shown his ignorance by saying that he does not know
whether the accused replied the said notice. All these
aspects of the matter show that PW 1 has failed to
depose the factual matrix of the case before this court.
PW 1 does not even remember that to which bank the
cheque was presented. He does not also remember the
cheque number and the branch of the bank of the
accused. Pw1 has absolutely failed to depose the
nature of all the documents that are produced by the
complainant in this case.
61. The complainant has utterly failed to
prove his case beyond reasonable doubt. On the
other hand, the accused by producing cogent and
convincing material document before this court, has
been successful in rebutting the case of the
complainant . Therefore, under these facts and
circumstances of the case , the court is of the opinion
that the complainant has utterly failed to prove the
charges leveled against the accused person. Therefore,
the complaint is liable to be dismissed. On the other
hand, the accused has been successful in
probabalizing his defence before this court by way of
40 C.C.No.18981/2012
leading defence evidence and producing Ex.D.1 to
Ex.D9. Hence, in view of this, I answer Point No.1 in
the negative.
62.Point No.2: In view of the reasons stated
and discussed above, the complainant has miserably
failed to prove the guilt of the accused punishable
u/s.138 Negotiable Instrument Act.
Hence, I proceed to pass the following :
ORDER
Exercising the powers conferred upon this court u/s.255(1) Cr.P.C., the accusedNo.1 and 2 are hereby Acquitted of the offence punishable under Sec.138 Negotiable Instrument Act.
The bail bond of the accused person and that of the surety if any stand cancelled.
(Dictated to the Stenographer directly on the computer, typed by her, corrected and signed then pronounced by me in the open court on this the 19th day of July , 2018).
( SHIRIN JAVEED ANSARI ) XXV A.C.M.M., BANGALORE.
41 C.C.No.18981/2012ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW1 : B.G.Mallikarjun.
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Certificate of Incorporation. Ex.P2 : Board Resolution.
Ex.P3 : Cheque.
Ex.P4 : Cheque return memo
Ex.P5 : Legal Notice.
Ex.P6 : Postal acknowledgement.
Ex.P7 : letter.
Ex.P8 : Reply notice.
Ex.P9 : Board Resolution.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
DW1 : Andar Devi Prasad Shetty.
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED:
Ex.D1&2 : Agreements. Ex.D3&4 : Mortgage Deeds Ex.D5&6 : Letters Ex.D7 : CC of receipt.
Ex.D8 : CC of the OS in PCR 23707/10.
Ex.D9 : CC of receipt.
Ex.D10 : Letter.
Ex.D11 : Reply Notice.
Ex.D12 : CC of the order dt.5.2.2018.
(SHIRIN JAVEED ANSARI) XXV A.C.M.M., BANGALORE.42 C.C.No.18981/2012
19.7.2018.
For judgment:
ORDER (Judgment pronounced in open court vide separate sheets) Exercising the powers conferred upon this court u/s.255(1) Cr.P.C., the accusedNo.1 and 2 are hereby Acquitted of the offence punishable under Sec.138 Negotiable Instrument Act.
The bail bond of the accused person and that of the surety if any stand cancelled.
XXV A.C.M.M., BANGALORE.43 C.C.No.18981/2012