Bangalore District Court
Examined Himself As Pw.1 And Got Marked ... vs No.1 And Mis-Using The Same. Since ... on 16 April, 2015
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE: BANGALORE CITY.
Dated this the 16th day of April 2015
Present: Sri.V.S.Pandit,B.A.,LL B.,
XV Addl.C.M.M., Bangalore.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case CC.No.8811/2011
2.Name of the Complainant: M/s.Thakurdas Dolumal,
Prop:Sri.Naraindas, No.109,
D.S.Lane, Chickpet Cross,
Bangalore-53.
3.Name of the accused: 1. Mar.Nagendra S.Iyers,
2. Mrs.Ambika N.Iyer, (abated)
W/o.Sri.Nagendra S.Iyer,
Both are Directors of M/s.Synergy
Information Management Services
Pvt Ltd., (@ SIMS Pvt.Ltd.,)
Office AT # "Acer Mall", No.1386,
37th A Cross, 11th Main, 4th 'T' block,
Jayanagar, Bangalore-41.
4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(1) Cr.P.C., accused
no.1 is Acquitted.
7.Date of final Order 16th day of April 2015
2 CC.No.8811/2011
1. The accused has been prosecuted by the complainant
for the offence punishable U/s.138 of Negotiable Instrument Act -
1881 (hereinafter referred as NI Act for brevity)
2. Case of the complainant in brief are as under -
a. Accused borrowed a sum of Rs.2,50,000/- on
20.10.2009 and executed an on demand promissory note and
consideration receipt thereof. Accused has agreed to repay the
amount with interest at 1.5% per month. Complainant has paid a
sum of 2,50,000/- to the accused by way of cheque bearing
No.8d69803 dtd 20.10.2009 drawn on M/s.Karur Vysya Bank Ltd.,
Avenue Road branch, Bangalore, The said amount was borrowed by
the accused for the purpose of running business in the name and
style of M/s.Synergy Information Management Services Pvt. Ltd., ( @
SIMS Pvt.Ltd.,) Accused no.1 being the Director of the firm, is
responsible for day today affairs of the company. It is further case of
the complainant that accused has agreed to repay the borrowed
amount in installments. As such, accused has issued ten cheques for
Rs.25,000/- each. Out of the ten cheques, three cheques were
honoured by the bank and amount of two cheques was paid by the
accused by way of cash, thereby two cheques have been returned to
the accused.
b. It is further case of the complainant that five cheques
issued by the accused for a sum of Rs.25,000/- each deposited to the
bank for collection but cheques were dishonoured for 'EXCEEDS
ARRANGEMENT". In this regard, bank has issued a memo dated
1.12.2010. Notice was issued on 11.12.2010, both by RPAD as well
as Certificate of Posting. Despite service of notice, accused did not
pay the amount and on the contrary, issued evasive and false reply.
3 CC.No.8811/2011
3. My learned Predecessor in the Office after taking cognizance,
issued summons to the accused. In response to the summons,
accused appeared and was enlarged on bail. Plea for the offence was
read over and explained to the accused. Accused pleaded not guilty
and pleads his innocence.
4. To sustain the charge leveled against the accused, the
complainant examined himself as PW.1 and got marked the
documents at Ex.P.1 to P.18 on behalf of the complainant.
5. After conclusion of the evidence of the complainant,
statement of the accused u/s.313 Cr.P.C., was recorded. Accused
denied the evidence and documents as false.
6. Heard both sides.
7. The points that arise for my consideration are as under:-
1) Whether the complainant has proved that cheque
was issued by the accused for discharge of legally
enforceable debt, the same was returned unpaid for
the reason ''EXCEEDS ARRNGEMENT' and notice was
not complied. Hence accused committed an offence
under Sec.138 of N.I. Act ? ?
2) What Order ?
8. My findings on the above points are as follows:
Point No.1 : In the Negative,
Point No.2 : As per final Order, for the following;
4 CC.No.8811/2011
REASONS
9. Point No.1 - It is the case of the complainant that a
sum of Rs.2,50,000/- was borrowed for the purpose of business and to
refund the amount in question, has issued the cheques, which on
presentation came to be dishonoured.
10. It is the case of the accused no.1 that he did not borrow
a sum of Rs.25,000/- as alleged. No cheques have been issued as
alleged. No amount is due. It is specific case of the accused no.1 that
one N.C.Ramachandran, was working as Managing Director of the
company, was running the day today affairs of the firm and for the
smooth function of the company, blank cheques were issued by the
accused no.1 and mis-using the same. Since N.C.Ramachandran
borrowed some amount from the complainant, a false complaint has
been filed against the accused no.1.
11. During the pendency of the proceedings, accused no.2,
expired and accordingly case against accused no.2 is abated. On
perusal of the order sheet, GPA Holder of the complainant has been
examined as PW.1 and he was cross-examined fully. But after that,
complainant was further examined and Ex.P.18 was marked on
behalf of the complainant. Ex.P.18 is the Power of attorney executed
by the complainant, therefore again, case was posted for cross-
examination of the PW.1. At that time, Counsel for the complainant
has filed an application U/s.319 of Cr.P.C. and sought for arraying
company as party to the proceedings, but this Court rejected the said
application. After that, again case was posted for cross-examination
of the complainant with reference to the late production of power of
5 CC.No.8811/2011
attorney. But order sheet dated 9.1.2015 discloses that PW.1 did not
turn up to face the cross-examination likely to be directed by the
Counsel for the accused no.1. Therefore order was passed to the
effect that PW.1 did not turn up to face the cross-examination.
Accordingly case was posted for statement of the accused U/s.313
Cr.P.C., accused denied evidence as false and did not choose to lead
any defence evidence. Order sheet further reveals that on several
occasions, case was adjourned for arguments. But neither
complainant appeared nor his Counsel was represented as such, in
the absence of the complainant, Counsel for the accused has
submitted arguments.
12. On perusal of the material placed on record by the
complainant, no doubt it is stated that a sum of Rs.3,50,000/- was
paid to the accused bearing Cheque No.869803 dated 20.10.2010,
drawn on M/s.Karur Vysya Bank, Avenue Road branch, Bangalore.
For the best reasons known to the complainant, no documents of
these effect is produced before the Court. This aspect of the matter is
crucial since PA holder of the complainant has admitted in his cross-
examination that accused did not come to his office. On behalf of
the accused, somebody else have collected the cheques. It is also
significant to note that PA holder of the complainant has admitted
that accused did not come to his office personally with regard to the
transaction. Therefore it is clear that the cheque in question is
alleged by the complainant is not directly handed over to the accused
no.1. Therefore non-production of the documents with regard to the
payment made through cheque to accused no.1 is of vital
importance and in my firm opinion, this is the major set back in the
case made out by the complainant.
6 CC.No.8811/2011
13. It is opt to place on record that complainant though
stated that out of the ten cheques issued by the accused for
discharge of debt, three cheques have been honoured and two
cheques have been returned since payment was made by way of
cash. In the reply notice at Ex.P.12, at para no.2, it is stated that
out of ten cheques, 5 cheques have been honoured. Therefore the
averments made in the complaint and averments made in the notice
at Ex.P.12 is in-conflict with each other. Therefore, it is obligatory on
the part of the complainant to prove which of those cheques issued
by the accused have been honoured and which of those cheques have
been returned in lieu of payment made by way of cash. In the
absence of these proof, it is virtually difficult to believe the case of the
complainant.
14. Heavy reliance is placed upon Ex.P.11 i.e. on demand
promissory note alleged to have been issued by the accused no.1. No
doubt, on perusal of Ex.P.11, there is a recital with regard to the
cheque number alleged to have been issued in favour of the accused
no.1. But in the cross-examination, PA Holder of the complainant
has admitted that accused no.1 and 2 did not signed on demand
promissory note in his presence and also pleaded ignorance with
regard to the question whether Ex.P.11 is the handwriting of the
accused. Apart from that, PW.1 has also admitted that promissory
note has sent to the Office address of the accused and there they
have signed and sent to the complainant. Therefore if this aspect of
the cross-examination and admission is taken into consideration,
execution of Ex.P.11 i.e. on demand promissory note is not at all
proved by the complainant. Ex.P.11 does not contain the signature
of the witnesses and also scribe who has written Ex.P.11. Apart
7 CC.No.8811/2011
from the self-serving evidence of the PW.1, none of the witnesses have
been examined to corroborate the contents of Ex.P.11. Merely stating
cheque number in Ex.P.11 with regard to the payment in the absence
of proof nullifies proper execution of Ex.P.11. The question before
the Court is in case, if the payment is made through cheques and
documents are available in the bank, under such circumstance, what
prevented the complainant to produce those documents. These are
the questions, in my firm opinion, is not answered by the
complainant.
15. It is significant to note that complainant has admitted
in his cross-examination that the person who had come to their office
to collect the cheques. Further it is also appears that no receipts
have been obtained with regard to the receipt of the cheque. Apart
from that, it is also admitted by the PW.1 that handwriting and the
signature contained in the cheques at Ex.P.1 to 5, are in different
handwriting, pleaded ignorance with regard to the question whether
the signature and writings made in the cheques is that of the
accused. Therefore if this cross-examination and admission is
taken into consideration, it is hard to believe the case of the
complainant that cheques were handed over to unknown person and
when the signature of the accused and other handwriting does not
tally with each other, case of the complainant that the cheques were
issued for discharge of liability cannot be entertained.
16. Apart from that, it is stated by the accused no.1 in his
cross-examination that loan lent to the accused has been disclosed in
his income tax returns and he has no difficulty in producing the
same. For the best reasons known to the complainant, the said
8 CC.No.8811/2011
document has not been produced. Thereby non-producing the
documents, the complainant has failed to establish that he has
sufficient source of income to advance the loan.
17. The complainant has produced Special Power of
Attorney alleged to have been executed by the complainant at a later
stage. Therefore opportunity was given to the accused to cross-
examine the PW.1 with regard to the contents of Ex.P.18. Order
sheet discloses that in spite of sufficient opportunity, PW.1 did not
tun up to face the cross-examination likely to be directed to the
genuninous of Ex.P.18. This aspect of the matter is crucial since in
the cross-examination, PW.1 has admitted that all the transaction
stated in the complaint has been done by the complainant himself.
After it is admitted that complainant has full knowledge about the
transaction. When the complainant did not turn up to face the cross-
examination, it is difficulty to believe the genuinous of execution of
Ex.P.18.
18. The learned Counsel for the accused apart from raising
merital aspect of the case, has also raised the issue with regard to
the maintainability of the case on the ground that company for whose
sake, the alleged amount was lent is not made as a party. Therefore
complaint itself is not maintainable. On the other hand, the learned
Counsel for the accused has submitted that earlier till 2012, Hon'ble
Supreme Court has held that "Arraigning Company as accused is
condition precedent for their prosecution." Therefore judgment is
delivered in the year 2012. Hence he could not made company as
accused so as to bring the Directors within the frame of Sec.138 of NI
Act.
9 CC.No.8811/2011
19. On perusal of the decision reported in 2012-SC 2795-
Aneeta Hada -Vs- M/s.Godfather Travels & Tours Pvt.Ltd., with
Anil Hada -Vs- M/s.Godfather Travels & Tours Pvt.Ltd., -Vs-
Avinash Bajaj -Vs- State and Ebay India Pvt.Ltd., State and
anr., wherein Hon'ble Apex court has held that "Directors or
other Officers cannot be prosecuted alone and therefore
arraigning company as accused is condition precedent for
their prosecution". Further in similar lines, the Hon'ble Kerala
High Court in 2012 (2) DCR 40-Shajahan T.M., -Vs- P.J.Abraham
& anr., has held that "Proceedings initiated only against the
Directors and not against the Company, complaint is not
maintainable". Likewise, in 2012(1) DCR 74 - Hon'ble Delhi
High Court, has held that "complaint should be specific with
regard to the role of the Directors and part played by the each
Directors in the transaction." Our own Hon'ble High Court of
Karnataka in the case of B.L.Boolani -Vs- Vasanth Kumar
Bangera - 2013(1) Kar L.J.524, has held that "Company having
not arraigned as accused, complaint is not maintainable". The
Hon'ble High Court of Karnataka has also relied upon the
judgment reported in AIR 2012 SC 2795. If the above decisions
are made applicable to the facts of the present case, in this case it is
categorically averred in the complaint that accused have borrowed
loan for the purpose of business improvement in the name and style
of M/s.Synergy Information Management Services Pvt Ltd., and
accused being the Directors and authorised signatories are
responsible for day today activities of the company. Therefore when
there is a specific allegation is made that loan was lent to the accused
being Directors of the company for improvement of the business, it is
mandatory on the part of the complainant to disclose in the
10 CC.No.8811/2011
complaint with regard to the role of the directors in managing day
today affairs of the company. Admittedly the impugned cheques as
per Ex.P.1 to 5 were issued on behalf of the company. The
submission of the learned counsel for the complainant that judgment
was delivered in 2012 by the Hon'ble Apex Court, therefore he was
not aware of the mandatory legal compliance with regard to the
arraigning company as accused is totally devoid of merits since
Sec.141 of the NI Act was incorporated w.e.f. 1.4.1999 and wherein
Clause (1) of the Sec.141 makes mandatory to make company as a
party. Therefore submission cannot be entertained. Under such
circumstances, apart from the defect in the merital aspect of the
case, as pointed, as above, technical hurdle in the form of not
making company as a party is also fatal to the case of the
complainant. As such, I am of the opinion that without making
company as a accused and without properly disclosing the role of the
accused in managing the affairs of the company, the complaint itself
is not maintainable. Therefore after over all examination of the
material placed on record, the complainant has miserably failed to
establish that it is a fit case to draw presumption and on the
contrary, accused has succeeded in establishing that presumption is
rebutted. Accordingly I answer Point No.1 in the Negative.
20. Point No.2 : In the result, I proceed to pass the following:
ORDER
Acting Under Sec.255(1) Cr.P.C., the accused no.1 is Acquitted for the offence punishable u/s.138 of the N.I.Act.
11 CC.No.8811/2011Bail bond and surety bonds of accused no.1 shall stand cancelled.
(Dictated to the Stenographer, transcript thereof is computerised and printout taken by her, is verified and then pronounced by me in Open Court on this the 16th day of April 2015.) (V.S.PANDIT), XV Addl. CMM., Bangalore.
ANNEXURE Witnesses examined for the Complainant:-
PW-1 Prem Kumar, Documents marked for the Complainant:-
Ex.P.1 to 5 Cheques, Ex.P.1a to 5a Signature, Ex.P.6 to 10 Bank Endorsements, Ex.P.11 On demand promissory note, Ex.P.12 Office copy of the legal notice, Ex.P.13 Two postal receipts, Ex.P.14 UCP Receipt, Ex.P.15&16 Postal A.D.Cards, Ex.P.17 Reply Notice, Ex.P.18 Authorisation letter.
Witnesses examined For Defence:- nil Documents marked for Defence:- nil XV Addl.CMM., Bangalore 12 CC.No.8811/2011 19.8.2014 Judgment pronounced in Open Court vide separate Order:
ORDER 13 CC.No.8811/2011 ORDER Acting Under Sec.255(2) Cr.P.C., the accused is convicted for the offence punishable u/s.138 of the N.I.Act and sentenced to pay fine amount of Rs.27,220/- (Rupees Twenty Seven thousand two hundred twenty only) as stated in the Joint Memo. If the said amount is deposited, same shall be paid to the complainant as compensation. In default, he shall undergo SI for a period of six months.
XV Addl.CMM., Bangalore