Bangalore District Court
Vasavi Productions India Ltd. Rep By L. R ... vs All In Picture Rep By Vijaya Raghavendra ... on 23 November, 2024
1
CC No.30281/2022
KABC030758002022
IN THE COURT OF XXVII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU
Present: Sri. Maruthi.K B.A., LL.B.,
XXVII A.C.J.M Bengaluru.
Dated: This the 23rd day of November, 2024
C.C. NO.30281/2022
Complainant : M/s Vasavi Productions
India Pvt.Ltd.,
Represented by its Director
Mr.L.R Someshwar
No.728, 3rd Stage,
4th block, Basaveshwar Nagar,
Bangalore-560079.
And also available
M/s Vasavi Productions(I) Pvt.Ltd.,
No.18, Someshwar Temple Street,
Ulsoor, Bangalore-560008.
(Rep by Sri.Gopiprakash &
associates, Adv.)
V/s.
Accused : 1. All in Pictures,
Mr.Vijaya Raghavendra,
Film Producer,
S/o Thirumalai,
Aged about 33 years,
having its office,
Loganathan Nagar,
1st Street, Choolaimedu,
Chennai-600094.
And also available
Bajaj Apartment,
Block II, Door No.3C,
5th Cross Street,
2
CC No.30281/2022
Nandanam Extension,
Chennai-600035.
(Reptd by Sri.Srinivas,Adv.,)
Offence : U/s.138 of Negotiable
Instruments Act.
Plea of the accused : Pleaded not guilty
Final Order : Convicted
Judgment Date : 23.11.2024
*****
JUDGMENT
The complainant company has filed complaint U/Sec.200 of Code of Criminal Procedure against the Accused for the offence punishable U/Sec.138 of Negotiable Instrument Act.
2. The facts of the case in brief are as follows:-
It is the case of the Complainant Company that complainant is a company registered under companies Act of 2013. The aim and object of the company is to acquire filming rights, dubbing rights and film fraternity in making of film production, Distribution, Exhibition.
Further accused No.1 is a film producer and having sufficient knowledge about the film making in such a context and he has started a film named "GORILLA" in the name and style of all in pictures. Further accused 3 CC No.30281/2022 No.1 is a partnership firm represented by its Managing Partner Sri.Vijay Raghvendra. A common friend introduced complainant to accused for a financial help Sri.Urumanathar Pictures and conzept films release are the Distributors of the Schedule film named "Gorilla".
Further in the 1st week of January 2017 a meeting was organized by a common friend with the accused No.1 in the said meeting accused No.1 introduced a person named Don Sandy as a film Director in Kolly hood industry with its Debit Director venture named Mahalabipuram which was released in 2015 the said Director narrated the story to the complainant as well as accused No.1 after the detailed discussion complainant and accused decided to make that script into silver screen in that effect 4 to 5 meeting were taken place an budget was fixed at Rs.8,68,00,000/- but shortage of funds forced the accused No.1 to request complainant to extend financial support to make said film to the silver screen. In that effect an agreement was signed between complainant and accused.4
CC No.30281/2022
3. In the complaint it is further alleged that as per the terms and conditions of the said agreement the complainant has to contribute sum of Rs.1,50,00,000/- and he may get stay at the rate of 22.5 on the total profit from the revenue achieved by the film through theatrical collections overseas right, dubbing rights, satellite rights and other mode where said film earns revenue and if project fails to gain any profit from the film the accused entitle to pay the complainant a royalty of 2.5% on the quantum of total investment from the complainant through every month and on the other hand the accused must have to take consent and approval from the complainant throughout the pre-production and post- production of his film named "Gorilla" and accused agreed to give all accounts time to time to the complainant and also further agreed to keep the satellite rights and overseas rights of Tamil film "Gorilla" and accused agreed to give all accounts time to time to the complainant and also further agreed to keep the satellite rights and overseas rights of Tamil film "Gorilla" as a collateral security in favour of complainant in this regard 5 CC No.30281/2022 a deed on indemnity was taken place between complainant and accused on 09.02.2018.
4. It is further submitted that, as agreed by the complainant he had extended financial support to the accused project through bank payment and cash payment. After completion of the Pre-Production work such as scripting, song recording, engaged artist and technicians for shooting, initially project started in a constructive manner. Later lack of knowledge making the production team fall on big financial risk and it amount some delay in film production. Hence both the party again entered deed of indemnity and ratified the earlier agreement as well as collateral of Tamil satellite rights and Tamil overseas rights of his film named "Gorilla". Further it is contended in the complaint that when complainant met accused for his money, accused avoided him and assured to give a cheque along with the RTGS form and advised the complainant not to present the cheque in bank certainly Rs.35,00,000/- will be transferred to complainant account. When complainant visited along with the cheque and RTGS form which was 6 CC No.30281/2022 signed by accused along with the manager of production company, the bank people told complainant that there is no sufficient money to honour the cheque and RTGS in such circumstances the complainant is very much worried about his money and investment of the accused film. Further accused had sold the overseas right of his film to the Zee Entertainment Enterprises, Chennai company who is well versed in the field of Distribution of the film in overseas areas, in such a situation accused more or less violating each and every conditions according to the agreement. Accused caused some fear about his money , when the complainant came to the knowledge that film will be going to release on 12.07.2019 at that time complainant get ready for legal steps finally after lengthy discussion sugar coated words and assurances by the accused and also given undertaking letter and a security cheque for his compliance and accused but even after the release of the film he did not keep up his words as per his undertaking words he should honour entire words on or before 18.07.2019 failing which complainant having a liberty to 7 CC No.30281/2022 approach Hon'ble Court of Law in recovering his money. Further complainant presented the said cheque which was issued for the clearance of legally enforceable debt. Complainant presented the cheque bearing No.626283 dated 24.07.2019 drawn in YES Prosperity of Yes Bank Ltd., Ashok Nagar Branch, Chennai-600083 which is issued by the accused and the said cheque was returned with a bankers shara "PAYMENT STOPPED BY THE DRAWER" on 25.07.2019. Hence complainant was very much shocked and surprised at accused conducts and acts by not honoring the above said cheque given by the accused for clearing of existing debts and cheated the complainant. Hence complainant preferred an Original Suit against accused for permanent injunction and money recovery suit before the Hon'ble City Civil Court at Bangalore in O.S.No.5478/2019 on 25.07.2019. Thereafter, the complainant got issued legal notice dated: 24.08.2019 to the accused through RPAD & courier calling upon him to repay the amount covered under the aforesaid cheque within 15 days from the date of receipt of notice. The notice was served to accused on 8 CC No.30281/2022 28.08.2019. But, the accused has neither replied to the notice nor paid the amount covered under the said cheque. Hence, this complaint.
5. Sworn statement of Sri.L.R.Someshwar, Authorized Signatory of M/s Vasavi Productions India Pvt. Ltd., recorded as PW-1 and got marked 31 documents as Ex.P.1 to 31 and ordered summons to the accused. The accused appeared through his advocate and he enlarged on bail. Substance of accusation read over to the accused and he pleaded the case of the complainant as false. In view of the decision of the Hon'ble Apex Court of India, in the case Indian Bank Association & Ors V/s. Union of India & Ors, reported in (2014) 5 SCC 590, the sworn statement of the complainant is treated as chief examination of the complainant. The accused has filed application u/s 145(2) of the Negotiable Instruments Act seeking permission for cross examination of the complainant and allowed the same. The counsel for the accused cross examined PW-1 in fully. Then the case was posted for recording the Statement of accused under Sec.313 of Cr.P.C. In the statement under section 313 of Cr.P.C, 9 CC No.30281/2022 the accused has denied all the incriminating evidences appearing against him. Further counsel for the complainant filed application u/s 311 Cr.P.C., and filed application u/s 143(A) of NI ACT seeking interim compensation. As per the order dated 27.06.2023, the application filed u/s 143(A) of NI ACT was kept in abeyance and case was posted for cross of PW-1. In support of the defence, the accused himself examined as DW-1 and got marked Ex.D.1 to Ex.D6 to prove his probable defence and DW-1 was subjected for cross examination by the advocate for the complainant.
5. Heard the arguments of the advocate for the complainant and the counsel for the accused. Perused the records.
6. The following points arise for my consideration:
1. Whether the complainant proves that the cheque bearing No.626283 for a sum of Rs.2,45,00,000/- dated: 24.07.2019 drawn on Yes Prosperity, Yes Bank Ltd., 34, ground floor, Avenue Road, Ashok nagar issued by the accused has been dishonored on the ground of "PAYMENT STOPPED BY THE DRAWER" and the accused even after receiving the intimation regarding the dishonor of cheque failed to pay the cheque amount within the stipulated period and thereby accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?10
CC No.30281/2022
7. My findings on the above points are as under Point No.1: In the Affirmative Point No.2: As per final order, for the following:
REASONS
8. Point No.1 : The case of the complainant is that complainant company registered under companies act having its office mentioned in the cause title engaged in acquiring filming rights, dubbing rights and film fraternity in making of film production, Distribution, Exhibition and the accused is a film producer extended financial support to make "Gorilla" film to silver screen. As such complainant was contributed sum of Rs.1,50,00,000/- with a condition that he may get profit @ 22.5% on the total profit from the revenue achieved by the film if the project fails to gain any profit accused is entitle to pay the complainant a royalty of 2.5% on the quantum of total investment every month and also agreed to keep the satellite rights and overseas rights of Tamil film "Gorilla" as a collateral Security in favour of complainant. Accused caused some fear about his money which was due from him and when complainant 11 CC No.30281/2022 came to know that film will be going to release on 12.07.2019, after making several efforts, complainant was ready for legal steps, at that time accused was given an undertaking letter and security cheque for his compliance as per the terms and conditions of the agreement between complainant and accused but even after release of the film he did not keep up his words as per his undertaking words. Further complainant presented the cheque bearing No.626283 dated 24.07.2019 drawn in Ashok Nagar Branch, Chennai but the said cheque was returned with stop payment along with bankers endorsement dated 25.07.2019. Thereafter, on 22.02.2012 got issued a legal notice to the accused under R.P.A.D & couriers calling upon him to pay the cheque amount within 15 days from the date of receipt of the legal notice. The said notice has been duly served on the accused on 28.08.2019. As such accused has committed offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
12
CC No.30281/2022
9. In support of the case, the complainant/Authorized signatory of M/s Vasavi Productions India Pvt.Ltd., has examined as PW.1 and got marked 30 documents at Ex.P.1 to 30. In chief examination of PW.1 has repeated the contents of complaint. Ex.P.1 is the Authorization letter. Ex.P2 is the cheque. Ex.P.3 is the return memo. Ex.P4 is the Legal notice. Ex.P5 is the postal receipt. Ex.P6 & 7 are the two postal acknowledgments. Ex.P8 & 9 are the courier receipts. Ex.P10 & Ex.P11 are the postal track consignment. Ex.P12 is the Joint Agreement. Ex.P13 is Deed of Indemnity. Ex.14 is the Statement of account. Ex.P15 is the Undertaking letter by the accused. Ex.P16 is the email. Ex.P17 is the Certificate u/s 65(B) of Indian Evidence Act 1872. Board resolution is also marked as Ex.P17. Ex.P18 is the whatsapp messages. Ex.P.19 is the purchase order. Ex.P20 is the Certificate u/s 65B of Indian Evidence Act. Ex.P21 is the Board meeting resolution. Ex.P22 is the Certificate of Incorporation. Ex.P23 is the Form No INC-22. Ex.P24 is the MOA. Ex.P25 is the AOA. Ex.P26 is the Form No.MGT-7. Ex.P27 is the Directors/Signatory details. 13
CC No.30281/2022 Ex.P28 is the certificate u/s 65(B) of Indian Evidence Act. Ex.P29 & 30 are the Email. Ex.P31 is the Deed of indemnity bond. (The same document is marked as Ex.P13). (Ex.P17 is marked twice on Board resolution and Certificate u/s 65(B) of Indian Evidence Act. Therefore, Certificate u/s 65 (B) and Certified copy of Board Resolution is marked as Ex.P17. Board Resolution is to be treated as Ex.P17(a) for the purpose of analysis and discussions.
10. The accused in order to prove his defence himself examined as DW-1 and got marked 5 documents. Ex.D.1 is CC of deposition led in Com.O.S.253/2019. Ex.D.2 is the CC of Profit and loss account for the period 31.03.2020. Ex.D3 is the CC of Balance Sheet as on 31.03.2020. Ex.D4 is the Depreciation statements as on 31.03.2020. Ex.D5 & Ex.P6 are the CC of Judgment and decree passed in Com.O.S253/2019.
11. The learned counsel for the complainant vehemently argued that accused has admitted the transaction in question and he has also admitted the cheque at Ex.P2 belongs to him and signature thereon 14 CC No.30281/2022 belongs to him and also argued complainant and accused entered into joint venture agreement and later on the accused has executed undertaking letter for indemnifying the risk. Further argued that payment made by the complainant is not in dispute and the cheque in question was replaced from Indian bank cheque to Yes bank by the accused. Legal Notice was duly served on accused which was duly acknowledged by the accused company at Ex.P10. Even though notice served accused did not return the money nor made any reply under notice. During the course of chief examination of DW-1 stated that cheque given as a security was misused by the complainant but complaint has not lodged in this regard and accused was not a chit bidder. Moreover the complainant company is not the chit company. Hence sought to convict the accused. In support of his argument he has also relied upon the citation as under:-
1. Bhupesh Rathod V. Dayashankar Prasad Chaurasia & Anr. (2022) 2 SCC 355
2. Rangappa V.Sri.Mohan (2010) 11 SCC 441
3. M.M.T.C Ltd., & Anr.V.Medchi Chemicals and Pharma (P) Ltd. & Anr (2002) 1 SCC 234 15 CC No.30281/2022
12. Per contra learned counsel for the accused argued that complainant has not placed any substantial materials to establish that Ex.P2 cheque was issued by the accused towards discharge of legal liability. He has contended that the cheque in question is dated 24.07.2019 and the said cheque was returned on 25.07.2019 the complainant has to issue notice within 30 days to the accused i.e., on or before 24.08.2019. Ex.P3 is the notice dated 24.08.2019 but RPAD receipts discloses that the said notice was sent to the accused on 26.08.2019 and contended that mandatory requirements as provided u/s 138 of NI Act not complied. Further he has contended that the notice sent through courier does not have presumptive value of deemed service. Sec.94 of the NI Act discuss about mode of service of notice. In order to get the presumptive value of service of notice section 94 of NI Act is to be read along with section 27 of General Clauses Act and contended that the courier service is not the deemed mode of service. Therefore, no offene has been committed by the accused. Further he has contended that complainant is not the competent 16 CC No.30281/2022 person to file this complaint. Present complaint is filed by unauthorized person. In order to substantiate his argument he has read Ex.P1 wherein in the body of said document it is mentioned as firm and not company. In this regard, he has relied upon citation reported in 2011 (11) SCC 524 and contended that when the complaint is not filed by the authorized person the complaint is not tenable in the eye of law. It is another contention of the accused that the present complainant has also filed commercial suit in Com.OS No.253/2019 it was got exhibited at Ex.D5 and the said suit was came to be dismissed on 27.09.2023. The complainant has been chief examined 4 times during that period the complainant has not produced authorization letter marked. The said document got created after dismissal of commercial suit. On these grounds and on the other grounds urged at the time of argument prays to acquit the accused by dismissing the complaint. In support of his arguments he has relied upon the citation as mentioned under:-
1. 2020 SCC Online ALL 96 - Udain Sengar Vs State of UP 17 CC No.30281/2022
2. 2024 SCC Online All 4829- Jajiv Malhotra Vs.State of IP.
3. Manu/AP/2354/2022- Venugopal Reddy and ors.
Vs.Nagappa.
13. By considering the arguments addressed by the learned counsel for the complainant and accused, before adverting to the oral evidence led in by the complainant and accused and also without touching upon the defence set up by the accused, the documents produced by the complainant company at Ex.P.2 to Ex.P11 prima facie discloses that the complainant company has discharged initial burden of proving issuance and presentation of Ex.P2 cheque, bouncing of cheque, issuance of notice and its service. At this juncture, I find it relevant to quote ruling reported in 2010(11) SCC 441, decided between Rangappa Vs. Sri. Mohan wherein the Hon'ble Apex Court held that:
"Presumption under section 139 of Negotiable Instrument Act, 1881 includes the presumption of the existence of legally enforceable debt or liability. That presumption is required to be honoured and if it is not so done, the entire basis of making these provision will be lost. Therefore, it has been held that, it is for the Accused to explain his case and defend it once the fact of cheque bouncing is prima-facie established. The 18 CC No.30281/2022 brain is on him to disprove the allegations once a prima-facie case is made out by the complainant".
In the aforesaid ruling the Hon'ble Apex court has held that, once the complainant establishes bouncing of cheque, then it is for the accused to disprove the allegations and also it is for him to rebut the presumption as contemplated under section 139 of Negotiable Instrument Act by placing acceptable evidence. In the ruling decided by the Hon'ble Apex Court in Crl.Appeal No. 1233 - 1235 of 2022 decided on 12/08/2022 between Rasiya V/s Abdul Nazar the Hon'ble Apex court at paragraph 7 held that as per Sec.139 of the Negotiable Instruments Act, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Sec.138 of the Negotiable Instruments Act for discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the complainant that the cheque was issued by the accused and the signature and the issuance of cheque is not disputed by the accused, in that case, the onus will 19 CC No.30281/2022 shift on the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption U/sec. 139 of the Negotiable Instruments Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant / Holder of cheque, in that case, it is for the accused to prove the contrary.
14. In the light of the principle laid down above, it is worth to note that, the accused /DW.1 in his examination in chief has deposed Ex.P.2 cheque belongs to the accused and the signature found at Ex.P.2 cheque belongs to him. The accused has taken a defence that the subject cheque was issued as a security. Therefore in view of the said deposition, a presumption u/s 139 of Negotiable Instruments Act can be drawn in favour of complainant that the said cheque was issued for a valid consideration. Before going into the stand taken by the accused, the said admission of DW.1 makes it clear that the accused/DW.1 is admitting his signature at Ex.P.2 cheque. Therefore, this court will have to raise 20 CC No.30281/2022 presumption as contemplated U/sec.139 of Negotiable Instruments Act that Ex.P.2 cheque was issued by the accused towards discharge of debt.
15. At this juncture, I find it appropriate to quote the ruling reported in (2009) 2 SCC 513 decided between Kumar Exports V/s. Sharma Carpets, the Hon'ble Apex Court at paragraph 20 & 21 has explained the course to be adopted by the accused to disprove the case of the complainant and to rebut the presumption as envisaged U/sec. 139 of the Negotiable Instruments Act. At paragraph 20, it is held that, the accused in a trial U/sec. 138 of the Negotiable Instruments Act has two options. He can either show that consideration and debt did not exist or that under the particulars circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existence. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as his expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not 21 CC No.30281/2022 supported by consideration and there was no debt or liability to be discharged by him. However, the court need not insist in every case, that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that, bare denial of the passing of the consideration and the existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of prove shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration which, the court may either believe that the consideration and debt did not exist or there non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by the consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the 22 CC No.30281/2022 circumstances, so relied upon or compelling, the burden may like wise, shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Sec.114 of the Evidence Act, to rebut the presumption U/sec. 118 & 139 of the Negotiable Instruments Act.
At paragraph 21, the Hon'ble Apex Court held that the accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases from the case set out by the complainant, that is the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shift back to the complainant and, therefore, the presumption U/sec. 118 and 139 of the Negotiable Instruments Act will not again come to the complainant's rescue.
23
CC No.30281/2022
16. In this backdrop, now I entered into the domain of defense set up by the accused to ascertain whether he has been able to rebut the presumption as contemplated U/sec.139 of the Negotiable Instruments Act, for which I find it appropriate to examine each and every aspect in detail.
17. It is contended by accused that the complainant has issued notice to the accused through registered post after lapse of mandatory period of 30 days as per section 138(b) of NI act. The notice sent by complainant through courier service is not recognized under Negotiable Instrument Act. In order to presume the service of notice through courier section 94 of NI act is to be read along with section 27 of General Clauses Act wherein the mode of service of notice by courier service is not recognized. Therefore it cannot be presumed that the notice sent by complainant through courier presumed to be deemed service. In support of his argument he has relied upon the citation reported in 2024 SCC online Allahabad 4829 between Rajeev Malhotra Vs. State of UP and another and 2020 SCC online Alahabad 96 in the case of Udainsenjiar 24 CC No.30281/2022 Vs. State of UP and another and contended that the wordings of section of the General Clauses Act indicates that this section deals only with service by post and that too registered service. No other mode of service is embraced in section 27. Hence contended that the notice issued by complainant is not the proper mode of service. Hence prays to acquit the accused on this ground. On the basis of this rival contention on perusal of the record i.e., Legal notice marked at Ex.P4 discloses that the legal notice was kept ready to dispatch the same on 24.08.2019 i.e., on the last day of statuary period of 30th day. However, the said notice was sent through registered post on 26.08.2019. However, the said notice have been served on accused persons on 28.08.2019. The complainant has also sent legal notice to the accused on 24.08.2019 by way of courier service which can be evidenced at Ex.P8 & 9. The said notices which are sent through courier service are served and return with an endorsement stating "item delivered to the addressee" in order to prove the same complainant has produced track and trace report issued by professional courier marked at Ex.P10 & 11. It is the contention of accused that the notice 25 CC No.30281/2022 sent through courier service to the accused is not the deemed service. Hence prays to acquit the accused on this ground. In the citation relied by counsel for accused i.e., reported in 2024 SCC online Alahabad 4829 wherein the Hon'ble High Court of Alahabad has observed that section 94 mode in which notice of dishonor may be given to a duly authorized agent of a person to whom it is required to be given or where he has died, to his legal representative or where he has been declared an insolvent to his assignee, may be by oral or written, may if written be sent by post and may be in any form but it must inform the party to whom it is given either in express terms or by reasonable intendment that the instrument has been dishonored and in what way and that he will be held liable there on and it must given within a reasonable time after dishonor at the place of business or at the residence of the party for whom it is intended. The Hon'ble High court of Allahabad further held that on conjoint reading of section 138 and 94 of NI Act it is clear that the notice of dishonoring of cheque should be given in writing and if it is given in writing then as per section 94 of NI Act it may be given through post for 26 CC No.30281/2022 getting benefit of second limb of section 94 of the Act. If it is duly addressed then despite miscarriage, the notice will not be deemed to be invalid. In section 94 of NI Act the word used 'may' for sending the written notice through post is directory and not mandatory. Therefore, option of sending the written notice through courier service is not barred u/s 94 of NI Act. The only advantage of the sending through post is provided in the second part of section 94 of NI act which means if the notice is sent through post at correct address, even if the same could not reach at the destination, it will not be deemed to be invalid. The word service through post has been defined in the section 27 of General Clauses Act which provides for getting the benefit of presumption of service of notice it should be sent through registered post. From the above analysis it is clear that courier service has not been excluded u/s 94 of NI Act, but to get the benefit under section 27 General Clauses Act, a notice must be delivered through registered post. The Hon'ble Apex Court in the citation reported in (1999) 4 SCC 567 in the case of Sil import evase Vs.EXIM AIDES SILK Exporters, Bengaluru wherein the Hon'ble 27 CC No.30281/2022 Apex Court held that negotiable instrument act 1881 section 138(b) notice in writing modes of giving sending notice by facts held permissible words and phrases giving notice in writing interpretation of statuses. Held that the mode of making such a demand is also prescribed in the clause, that it should be by giving notice in writing to the drawer of the cheque. No where it is said that such notice must be sent by registered post or that it should be dispatched through a messenger of any other modes. In view of dictum laid down by Hon'ble Apex Court as well as the Hon'ble High Court of Allahabad the sending of written notice through courier is service is not barred u/s 94 of NI Act. Moreover the notices sent through registered post to the accused persons was duly served upon them 28.08.2019 as per Ex.P6 & 7. Therefore in view of dictum laid down by Apex court, the arguments advanced by counsel for accused not tenable in the eye of law and the mode of issuance of written notice through courier service is also one of the recognized mode of service.
18. It is the another contention of the accused that the complaint filed by unauthorized person and the language 28 CC No.30281/2022 used in Ex.P1 is vague which contains firm instead of company and the authorization was not the outcome of the Board Resolution. It is further contained by the accused that the complainant has not produced the resolution before the Hon'ble Commercial court in Commercial original suit 259/2019 which resulted in the dismissal of suit and that complainant to rectify the mistake has produced the authorization letter and consequently, the resolution. In contention of the argument he has relied upon the citation (2011) 11 SCC 524 in the case of State Bank of Travncore Vs. Kingston computer India Pvt.Ltd., and argued that when the complainant is not authorized by the Board of Directors then the complaint filed by the complainant is without authority. Hence prays to dismiss the complaint on this ground. On the other hand counsel for complainant does submitted that the counsel for the complainant representing the present case was not the advocate before Honb'le Commercial court on behalf of complainant. The counsel representing complainant before commercial court may have not advised the complainant to produce the said letter and resolution but however in the 29 CC No.30281/2022 instant case the counsel appearing for the complainant advised the complainant to produce appropriate letter and resolution which was issued at appropriate point of time. The Board meeting was held followed by the notice and Minutes of Meeting was recorded and was circulated Board resolution no.3 is dated 08.10.2017 same is marked as Ex.P23. The documents pertaining to the Board Resolution is not created by the complainant has not produced the same in commercial court as the document never asked in the suit. The complainant was innocent in not producing them but when the suit was dismissed for that reason then he produced all the documents pertaining to authorization which were in the possession of complainant. In order to substantiate his argument he has relied upon citation reported in (2022) 2 SCC 355 in the case of Bhupesh Rathod Vs. Dayashankar prasad chourasia and anthor and contended that even if there was no authority initially, the defect can be rectified at any stage of the proceedings by sending the competent person. With this rival contention coming to the oral evidence of PW1 he has stated that in Ex.P23 Board Resolution No.3 was conducted on 30 CC No.30281/2022 08.10.2017 . In order to substantiate the oral evidence the complainant has produced Board Resolution dated 03.01.2018 which was marked at Ex.P17(a) and the extract of annual report of the complainant company came to be marked as Ex.P26 which indicates the number of Board Meetings which took place as per the records at Board meeting serial number 3 as on 03.01.2018. Further Ex.P26 discloses both the directors of the company attended the board meeting since there were only two directors of the company during that period. Therefore, Ex.p17(a) Board resolution dated 03.01.2018 is a proper resolution which was passed as per Ex.P26. In the citation relied by counsel for complainant reported in (2022) 2 SCC 355 the Hon'ble Apex Court held that negotiable instrument act 1881 section 138 and 142 (a) complaint on behalf of the company manner and form in which to be filed. Complaint filed by Managing Director on behalf of company held cannot be dismissed only on the ground that the name of the Managing Director is mentioned followed by post held in company. There could be a format where companies name is described first, suing through Managing Director 31 CC No.30281/2022 but merely because name of Managing Director is stated first followed by post held in company, held would not amount to a fundamental defect warranting dismissal of the complaint at the threshold. Further held that the only eligibility criteria prescribed u/s 142 1(a) of the Negotiable instrument Act 1981 is the complaint must be by the payee or holder in due course. Plea of accused is that the complaint was not filed by the competent complainant as it is the case that the loan was advanced by the company. Not only that even if there was initially no authority the company can at any stage rectify that defect by sending a competent person". In the present case in hand the complainant has produced Board Meeting Notice dated 03.01.2018 marked at Ex.P21, Board Resolution dated 03.01.2018 at Ex.P17(a) and authorization letter dated 23.09.2019 marked at Ex.P1 are the sufficient documents issued by company authorizing the complainant to prosecute the complaint. Therefore, in view of settled preposition of law it can be held that the complainant is the person has been authorized by the company to prosecute the case against accused persons. The 32 CC No.30281/2022 contention of accused that the complainant was not the authorized person was cured by the complainant by producing appropriate documents. Therefore, the argument advanced by counsel for accused not tenable in the eye of law and the arguments advanced by counsel for complainant appears to be reasonable.
19. It is the specific case of the complainant that accused has availed financial support of Rs.1,50,00,000/- to make the film named "Gorilla" from the complainant and entered into an agreement on 08.12.2017 with the terms and conditions that the complainant should stay at the rate of 22.5% on the total profit from the revenue achieved from the film or if project fails to gain any profit the accused No.1 is entitled to pay the complainant a royalty of 2.5% on the quantum of total investment from the complainant through every month. To establish the same the complainant produced joint venture agreement, Deed of Indemnity, Statement of Account and E-mail communication and 65(B) certificates as per Ex.P12 to 16. In this regard, on perusal of the evidence during the course of cross examination of PW-1 deposed that "ನಮ್ಮ ಕಂಪನಿ 33 CC No.30281/2022 ಇಂದ ಆರೋಪಿ ಕಂಪನಿಗೆ ಹೂಡಿಕೆ ರೂಪದಲ್ಲಿ ಹಣ ಕೊಟ್ಟಿ ರುತ್ತೇವೆ. ನಿಪಿ-12 ರ ಕರಾರು ಇನ್ನು ಊರ್ಜಿತವಾಗಿರುತ್ತ ದೆ. ನಿಪಿ-12 ರ 4 ನೇ ಖಂಡಿಕೆ ಪ್ರ ಕಾರ ಪಿರ್ಯಾದಿ ಕಂಪನಿ Associate Producer ಮಾತ್ರ ಇತ್ತು ಎಂದರೆ ಸರಿ. On perusal of the examination of DW-1 he deposed that complainant company approached him for investing in the said movie and they were involved in the whole movie process. Their name came as Associate Producer in official records. On perusal of the evidence led by both the parties as well as the documents produced by the complainant are corroborating the version of the complainant that he had invested Rs.1,50,00,000/- to the movie named Gorilla produced by the accused and also entered into an agreement. There is no dispute with regard to the investment and agreement. Further the suggestion of the accused to PW-1 that ನಿಪಿ-12 ರ 4 ನೇ ಖಂಡಿಕೆ ಪ್ರ ಕಾರ ಪಿರ್ಯಾದಿ ಕಂಪನಿ Associate Producer ಮಾತ್ರ ಇತ್ತು ಎಂದರೆ ಸರಿ. On perusal of the suggestion made by the counsel for the accused to complainant at the time of cross examination reveals that both the party entered into an agreement and also the second party i.e., complainant company treated as Co-Producer only. Further during the examination in chief 34 CC No.30281/2022 of DW-1 also deposed that complainant company is treated as Associate Producer. Even this suggestion made by the counsel for the accused is acceptable and there is no doubt arise that the complainant company is the the co- producer for the movie as he invested the amount. But on perusal of the joint venture agreement at point No.7 there is a term that "It is further agreed by the first party that the invested amount of Rs.1.5 crores made by the second party will be returned before the release of the movie and revenue will be first given to the second party". No question is posed by the counsel for the accused in this regard or any repayment with regard to the said investment is done. This point mentioned in the agreement is not disputed by the counsel for the accused at any point of time. Even he has not shown any repayment except barely saying he had huge loss in the said film. Further the accused also suggested to PW-1 that "ಚಿತ್ರ ಬಿಡುಗಡೆ ಸಮಯಕ್ಕೆ ನಾವು ಹುಾಡಿಕೆ ಮಾಡಿದ ಹಣವನ್ನು ಆರೋಪಿ ಹಿಂತಿರುಗಿಸಬೇಕು ಎಂದು ಕರಾರು ಇತ್ತು ಎಂದರೆ ಸಾಕ್ಷಿ ಹೂಡಿಕೆ ಮಾಡಿದ ಹಣ ಮತ್ತು ಗಳಿಕೆ ಹಣದ ಭಾಗವನ್ನು ಪಾವತಿಸಬೇಕು ಎಂದು ಕರಾರು ಇತ್ತು ಎನ್ನು ತ್ತಾ ರೆ. This version of PW-1 is believable as there is a term in the 35 CC No.30281/2022 joint venture agreement at Ex.P12 that second party i.e.,complainant company is entitled as partner for the profits only with stake percentage of 22.5% on the total profits. On perusal of the cross examination of DW-1 dated 31.01.2024, the accused has denied the suggestion that to arrange the budget he had approached the complainant for financial help but on perusal of the further cross of DW-1 he admitted that "It is true to suggest that when I was asking the complainant for investment in the said movie I have furnished the above said revenue projection document to the complainant". The deposition made by the DW-1 is contradictory as firstly he denied that he did not approach the complainant to invest in the said movie and again he admits the fact that he has sent the revenue document to the complainant as he was asking the complainant for investment in the said movie. Further he also admitted the fact that with regards to the investment of complainant he had entered into a joint venture agreement with the complainant on 08.12.2017. Furthermore he also admitted the fact that as the budget of the movie was Rs.8.6 crores and he is looking for other 36 CC No.30281/2022 parties to join the venture as associate producers and also admitted the schedule of the payment mentioned in para 2 sub para 6 of the said agreement made by the complainant towards the investment. Further on perusal of the evidence led by the accused during his cross examination that he admits that he had sent mail on 24.06.2019 from their mail id i.e., [email protected] to [email protected] and also admitted along with said mail he had attached a letter dated 22.06.2019 regarding return of investment in the movie Gorilla. On perusal of the above said mail at Ex.P16 along with attached document reveals that the accused agreed to return the invested amount according to the terms in the agreement signed between both the parties in the week of release on or before the release date of the movie. On perusal of the Ex.P19 dated 10.06.2019 that is purchase order of the said film it discloses that the said film was sold for Rs.1,50,00,000/- by the accused to Zee Tamil. Therefore it can be seen that the said movie was sold to Zee Tamil on 10.06.2019 for an amount of Rs.1,50,00,000/- i.e., before issuance of cheque in question to the accused. 37
CC No.30281/2022 Therefore it can be seen that before issuance of cheque in question to the accused the accused has already received revenue of Rs.1,50,00,000/- for having sold Gorilla movie in question. Further contention of the accused is cheque in issue was issued for the purpose of security. Now let me analyse the rival contentions urged by both the parties in the light of the above point. During the cross examination of PW1 denied the suggestion of counsel for the accused that the cheque in issue was issued towards security and also admitted that towards the investment the accused had pledged the Tamil Satellite right Overseas rights. Further also posed the question that towards the above said agreement, took cheque and also letter head from the accused for the purpose of security for that he denied the suggestion. Further another suggestion of the accused counsel that the accused had not issued cheque towards the profit of the said movie rather the cheque in question was issued for security which was filled by complainant side, for the said suggestion PW1 also denied the same. Further during the course of examination of DW1 he admitted the fact that he started the production of the 38 CC No.30281/2022 movie named Gorilla, the complainant company approached him for investing in the said movie. The complainant name came as associate producer in official records. Further deposed that the budget of the movie was 11 corers, at the time of investment, the complainant company took his cheques and letter heads as security the same documents were misused. Further deposed that before investment the Director Mr.Someshwar told us the complainant company is a chit fund company as such requested for cheques and letter heads as security. After the huge loss, he filled up the security cheque and misused the same to file the present case. Further deposed that except the signature of the said cheque the other hand writings are not made by him and also no account in Indian bank as stated in Ex.P15. On perusal of the oral evidence and also documentary evidence the complainant had invested Rs.1,50,00,000/- to the above film named Gorilla which was produced by the accused. The said fact also admitted by the accused during his examination in chief. Even the statement of accounts produced by the complainant at Ex.P14 corroborate the same that he has 39 CC No.30281/2022 transferred the amount to the account of accused on various dates. There is no dispute with regards to the transaction of Rs.1,50,00,000/-. By taking the testimony of DW1 and suggestion putforth by the accused to PW1 and answers elicited to goes to show that accused is admitting that the Ex.P2 cheque belongs to him and signature appearing thereon belongs to him. Further there is contradiction evidence that cheque was issued for the purpose of security as the complainant company is chit fund company and also counsel for the accused posed question that at the time of pledging the title overseas rights and executing the agreement, complainant took the said cheque and letter heads for security. The version of the accused creates doubt that when the said cheque was issued to the complainant. Further in the normal course of chit transactions any security would be insisted only at the time of chit auction and payment of the chit prize money to the successful bidder. But in this case accused deposed that as the complainant company is a chit company he issued his cheque and letter head for the purpose of security. In this case the accused neither the subscriber for 40 CC No.30281/2022 the chit nor he establish the complainant company is a chit fund company. In the normal course of chit transactions, no such security would be obtained in the beginning. If at all this contention of accused is true, he could have produced any document to show that he is the subscriber or the complainant company is chit fund company. Therefore, this contention of the accused cannot be believed. Further the accused could have insisted the complainant to return the cheque in issue but the accused neither nor insisted or demanded for the said security cheque. Moreover he has executed Ex.P15 i.e., letter of undertaking in respect of clearing of financial commitment of Rs.2,45,00,000/- to the complainant. Though he has denied the execution of Ex.P15 but he does not disputed the signature of himself appearing on the said document rather he has admitted his signature on Ex.P15. Therefore, men may speak lie but not the document. However, in Ex.P15 there is a recital that two cheques of Indian Bank issued for clearing the loan in favour of complainant but on perusal of the cheque in question it belongs to 'Yes' bank. Why in Ex.P15 it is mentioned as Indian bank it is not 41 CC No.30281/2022 made clear by the accused. It is the version of that he has invested Rs.1,50,00,000/- towards production of movie 'Gorilla' produced by accused. For that as per the agreed terms he has to get 22.5% stake on the total profit achieved from the movie and if the project fails to gave any profit the accused entitle to pay the complainant a royalty of 2.25% on the quntam of total investment made by the complainant every month. But as per contention of accused the movie suffered huge loss. Therefore the complainant is not entitle to get the amount in question. Assuming for the sake of discussion the movie produced by the accused named Gorilla suffered huge loss but as per agreed terms i.e., Ex.P12 Joint Venture Agreement the accused agreed to pay royalty of 2.5% on the quntum of total investment made by complainant every month. If the said 2.5% on the quantum of total investment calculated every month on and after 08.07.2017 till filing of the present complaint it will comes around Rs.2,25,00,000/- and plus the investment of Rs.1,50,00,000/- which total comes to Rs.3,75,00,000/-. However the complaint has restricted his claim to the extent of Rs.2,45,00,000/- only. 42
CC No.30281/2022 This was legal recovery debt which is payable by the accused to the complainant. Moreover it is not the case of the accused he has already paid the amount invested by the complainant in producing the movie. Therefore the contention of the accused is not acceptable.
20. The materials placed by the complainant company establishes that it had complied mandatory requirements of Sec.138 of the Negotiable Instruments Act and the accused has failed to rebut the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act by placing acceptable evidence. Accordingly, I answer the Point No.1 in the Affirmative.
19. POINT NO.2 :- In view of my findings to the Points No.1, I proceed to pass the following:-
ORDER In exercise of power conferred U/sec. 255(2) of Code of Criminal Procedure, the accused is convicted for the offence punishable U/s.138 of N.I. Act and sentenced to pay fine of Rs.2,60,05,000/-.
In default of payment of the said fine amount, the accused hall undergo simple imprisonment for a period of one year.
Out of the fine amount Rs.2,60,000,00/- shall be paid to the complainant as compensation as contemplated U/sec. 357(1) 43 CC No.30281/2022
(b) of Code of Criminal Procedure and the remaining fine amount of Rs.5,000/- shall be paid to the state towards defraying expenses.
(Dictated to the stenographer directly on computer, corrected and then pronounced in open court by me on this the 23 rd day of November, 2024) Digitally signed MARUTHI by MARUTHI K Date:
K 2024.11.28
13:24:31 +0530
(Maruthi.K)
XXVII A.C.J.M., Bengaluru.
ANNEXURE
Witnesses examined on behalf of the complainant:
PW1 : L.R.Someshwar Documents marked on behalf of the complainant Ex.P1 : Authorization Letter Ex.P2 : Cheque Ex.P2(a) : Signature of accused Ex.P3 : Return memo Ex.P4 : Legal Notice Ex.P5 : Two Postal Receipts Ex.P6 & 7 : Two postal Acknowledgments Ex.P8 & 9 : Two Courier receipts Ex.P10 & 11 : Courier receipts Ex.P12 : Joint Venture Agreement Ex.P13 : Deed of Indemnity Ex.P14 : Statement of Account Ex.P15 : Undertaking Letter Ex.P16 : E-mail communication Ex.P17 : 65(B) certificate Ex.P17 : Board of Resolution (Considered as Ex.P17(a)) Ex.P18 : Whatsup messages Ex.P19 : Purchase order Ex.P20 : Certificate u/s 65(B) Ex.P21 : Board meeting resolution Ex.P22 : Certificate of Incorporation Ex.P23 : Form No.INC-22 Ex.P24 : MOA 44 CC No.30281/2022 Ex.P25 : AOA Ex.P26 : Form No.MGT-7 Ex.P27 : Director/signatory details Ex.P28 : Certificate u/s 65(B) of IE Act Ex.P29 & 30 : E-mail communication Ex.P31 : Deed of Indemnity (Same document is marked at Ex.P13) Witnesses examined on behalf of the accused:
DW-1 : Vijay Raghavendra Documents marked on behalf of the accused:
Ex.D1 : CC of evidence led in
COM.O.S.No.253/2019
Ex.D2 : Profit and Loss statement
Ex.D3 : Balance sheet as on 31 March 2020
Ex.D4 : Depreciation statement on fixed
assets
Ex.D5 : CC of Judgement in
Com.O.S.No.253/2019
Ex.D6 : Decree
Digitally signed
MARUTHI by MARUTHI K
K Date: 2024.11.28
13:24:35 +0530
XXVII A.C.J.M
Bengaluru.