Bangalore District Court
Prays To Punish The Accused Under vs The Accused Examined Himself As Dw1 And on 27 November, 2021
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present: Sri. MANJUNATHA, B.A, LL.B.,
XXVIII A.C.M.M
Bengaluru City.
Dated this the 27th day of November, 2021
CC.No.6939/2019
JUDGMENT
1. Sl.No. of the case : C.C.No.6939/2019
2. The date of commence of Evidence : 21.03.2019
3. The date of Institution : 07.12.2018
4. Name of the Complainant :M/s Switching Power Conversion Pvt Ltd No.8 first Main, Government PU College road, BDA Industrial Suburban, Peenya, Bangalore560058.
Rep by its Manager, Sri. G Venkatesh.
5. Name of the Accused : M/s All Tech Digitals, No.7/5, Kalburgi Complex, Magadi Main road, Bangalore Urban Bangalore560023.
CC.No.6939 /2019 2 Rep by its Proprietor Mr. Chinna Reddy.
6. The offence complained : U/s.138 of N.I. Act
7. Plea of the accused on his examination : Pleaded not guilty
8. Final Order : Accused is Convicted
9. Date of such order : 27.11.2021 JUDGMENT
1. The complainant has filed this complaint against the accused for the offence punishable u/s 138 r/w 142 of N.I. Act.
2. The gist of the complainant's case is that :
The complainant is a company registered under the provisions of companies Act, 1956 and they are doing business of production, sales and service of uninterupted power supply systems (UPS Systems) represented by its Manager. The accused is a customer of complainant and the accused has purchased from complainant 12 Volts 26 AH Quanta CC.No.6939 /2019 3 SMF Batteries (24 in numbers) on 25.05.2018 for a total sum of Rs.86,016/ (Rupees Eighty Six thousand and sixteen only) as per invoice No.101/18 and on the same day the batteries were delivered to accused as per delivery note No.084/18. The accused had purchased one Switcher 7.5 KVA NL752AG UPS system from them for a sum of rs.68,440/ (rupees sixty eight thousand four hundred forty only) on 31.05.2018 as per Invoice No.128/18 and a battery stand for Rs.3,540/ (rupees three thousand five hundred and forty only) on 31.05.2018 as per invoice No.120/18 and both these items were delivered to the accused on 31.05.2018 as per the delivery note No.98/18. As per the above said three invoices accused was supposed to pay the complainant a sum of Rs.1,57,996/ (rupees one lakh fifty seven thousand nine hundred and ninetysix only). The complainant bought back old batteries from accused, it got a CC.No.6939 /2019 4 buyback offer of Rs.3,000/ (rupees three thousand only). After deducting the said amount the accused were liable to pay complainant a sum of Rs.1,55,000/ (rupees one lakh fifty five thousand only). The accused had paid a sum of Rs.80,000/ (rupees eighty thousand only) through online transfer and accused had issued a cheque for the balance amount of Rs.75,000/ (rupees seventy five thousand only) dated 30.07.2018 bearing No.331696 drawn on Karnataka Bank Ltd, Rajajinagar branch, Bengaluru and accused had assured that on presentation of the said cheque the same will be honored. The complainant on 02.08.2018 had presented the said cheque through its banker, State Bank of India, SSI branch, Peenya and the said cheque got dishonored for the reasons 'Funds Insufficient'. The complainant had informed the accused, the accused apologized for the mistake and requested the complainant not to initiate any action CC.No.6939 /2019 5 and represent the cheque in the first week of October 2018 and promised that by that time the accused would maintain a sufficient amount in their account to honour the said cheque. The complainant believing the words of accused and in the interest of keeping healthy relationship agreed to wait until the first week of October and they had represented the said cheque for the second time on 04.10.2018. However accused did not keep his words and failed to maintain sufficient amount in his account to honour the said cheque and the cheque was once again dishonoured on 05.10.2018 as per the return memo for the reasons 'Funds Insufficient'. The complainant had issued statutory notice dated 24.10.2018 by RPAD to the accused calling upon accused to pay the amount covered under the cheque within 15 days from the date of receipt of the legal notice. The said notice was served to accused on 25.10.2018. Even after the lapse of 15 CC.No.6939 /2019 6 days from the date of receipt of the legal notice, the accused have not made any attempt to comply with the demand made in the notice, nor the accused had sent any reply to the said notice. The act of issuing cheque in discharge of debt or liability and failing to maintain sufficient funds in account and thereby causing dishonour of cheque and after receiving the demand notice not complying the same would amounts to an offence punishable U/s 138 of N.I Act. Hence, the complainant prays to punish the accused under sec.138 of N.I Act with suitable compensation as contemplated under N.I Act.
3. In pursuance of the court summons, the accused has appeared through his Counsel and got enlarged on bail by executing necessary documents. Copy of the complaint was furnished to the accused, as required under law. As there was sufficient material, plea was recorded against the accused on 15.05.2019 and CC.No.6939 /2019 7 explained in his vernacular, for which the accused pleaded not guilty and claims to be tried.
4. In order to prove the case, the Manager of the complainant Company Sri. G Venkatesh S/o P. Govindaraj examined as PW1 and got marked documents at Ex.P1 to 9. Then the statement u/s 313 Cr.P.C was recorded on 31.07.2019, wherein the incriminating evidence appeared against the accused was read over and explained which was denied by the accused. The accused examined himself as DW1 and got marked Ex.D1 and Ex.D2 document on his behalf.
5. Heard the arguments and perused the material placed on record.
6. On the basis of the above facts, the following points arise for my consideration:
1. Whether the complainant proves that the accused towards discharge of CC.No.6939 /2019 8 legal recoverable debt issued cheque bearing No.331696 dt:30.07.2018 for Rs.75,000/ (Rupees Seventy Five Thousand only) drawn on Karnataka Bank Ltd, Rajajinagar branch, Bangalore, in favour of complainant, on presentation for encashment it was returned as 'Funds Insufficient' and in spite of receipt of legal notice, the accused failed to pay the cheque amount within the statutory period and thereby the accused has committed an offence punishable u/s 138 of N.I. Act?
2. What order?
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 complainant in order to prove CC.No.6939 /2019 9 its case got examined the Manager of complainant company Sri. G. Venkatesh S/o P. Govindaraj as PW1 and Ex.P1 to Ex.P9 documents are marked to prove his case. PW1 Sri. G Venkatesh filed affidavit in lieu of his examination in chief and deposed in his evidence that he is the Manager and authorised representative of the complainant company and he was conversant with the facts and circumstances of the case. The accused is a customer of complainant and the accused had purchased from complainant 12 Volts 26 AH Quanta SMF Batteries (24 in numbers) on 25.05.2018 for a total sum of Rs.86,016/ (Rupees Eighty Six thousand and sixteen only) as per invoice No.101/18 and on the same day the batteries were delivered to accused as per delivery note No.084/18. The accused had purchased one Switcher 7.5 KVA NL 752AG UPS system from them for a sum of Rs.68,440/ (rupees sixty eight thousand four hundred CC.No.6939 /2019 10 fourty only) on 31.05.2018 as per Invoice No.128/18 and a battery stand for Rs.3,540/ (rupees three thousand five hundred and forty only) on 31.05.2018 as per invoice No.120/18 and both these items were delivered to the accused on 31.05.2018 as per the delivery note No.98/18. As per the above said three invoices accused was supposed to pay the complainant a sum of Rs.1,57,996/ (rupees one lakh fifty seven thousand nine hundred and ninetysix only). The complainant bought back old batteries from accused, it got a buyback offer of Rs.3,000/ (rupees three thousand only). After deducting the said amount the accused were liable to pay complainant a sum of Rs.1,55,000/ (rupees one lakh fifty five thousand only). The accused had paid a sum of Rs.80,000/ (rupees eighty thousand only) through online transfer and accused had issued a cheque for the balance amount of Rs.75,000/ (rupees seventy five thousand CC.No.6939 /2019 11 only) dated 30.07.2018 bearing No.331696 drawn on Karnataka Bank Ltd, Rajajinagar branch, Bengaluru and accused had assured that on presentation of the said cheque the same will be honoured. The complainant on 02.08.2018 had presented the said cheque through its banker, State Bank of India, SSI branch, Peenya and the said cheque got dishonored for the reasons 'Funds Insufficient'. The complainant had informed the accused, the accused apologized for the mistake and requested the complainant not to initiate any action and represent the cheque in the first week of October 2018 and promised that by that time the accused would maintain a sufficient amount in their account to honour the said cheque. The complainant believing the words of accused and in the interest of keeping the healthy relationship agreed to wait until the first week of October and they had represented the said cheque for the second time on 04.10.2018.
CC.No.6939 /2019 12 However accused did not keep his words and failed to maintain sufficient amount in his account to honour the said cheque and the cheque was once again dishonored on 05.10.2018 as per the return memo for the reasons 'Funds Insufficient'.
9. The complainant also produced authorization letter issued by the complainant company as per Ex.P1, 3 invoices Ex.P2, purchase order Ex.P3, delivery note Ex.P4, cheque issued by the accused Ex.P5, signature of the accused Ex.P5(a), two bank endorsements Ex.P 5(b) and Ex.P5(c), legal notice dated 24.10.2018 marked as Ex.P6, postal receipts Ex.P6(a), postal acknowledgement Ex.P7, track consignment Ex.P8 and complaint is marked as Ex.P9.
10. The learned counsel for the accused subjected the PW1 for cross examination and PW1 admits that he personally did not visit to the shop of the accused to deliver the goods. However, employees of the CC.No.6939 /2019 13 complainant company who are dealing with delivery work have visited the shop of the accused and delivered the materials purchased by the accused. One Divya employee of the complainant signed Ex.P2 to 4 documents, the employee who visited the shop of the accused has not signed Ex.P2 to 4 documents. Admittedly the accused has not signed delivery challan, one Ananth Rao Jadav has signed Ex.P2 invoices. The said Anantha Rao Jadav transferred Rs.80,000/(rupees eighty thousand only) to the complainant companies account through Online. Ex.D1 account statement has been admitted by PW1. Name of the accused has not been shown in Ex.P2 to 4 documents. Cheque Number is not mentioned in Ex.P2 to 4, Ex.P2 to 4 documents are prepared and signed the employees of complainant company. The accused has questioned the very authority of the PW1 who deposed before the court on behalf of the CC.No.6939 /2019 14 complainant company. PW1 further deposed that the complainant is a private limited company who has given authorisation in his favour through board resolution. But he does not remember the date of resolution passed by the complainant company. He has not produced copy of board resolution except authorisation marked as Ex.P1. He has not produced any documents to show the board resolution passed by the complainant company. He does not know how many directors are there in the complainant company. One R. Srinivas is working as Managing Director and the said R. Srinivas duly signed Ex.P1 authorisation letter.
11. The learned counsel for the accused relied on a decision reported in :
ILR 2007 KAR 3155 DIRECTOR Maruthi Feeds & Farms Pvt Ltd v/s Basanna Pattekar wherein Hon'ble High Court held that:
CC.No.6939 /2019 15 " The company is a juristic person, any person on behalf of the company has to be authorised by the company under the Articles of Association or by a seperate resolution to depose on behalf of the company Dismissal of the complaint under sec.138 of N.I Act is sound and proper that the director of the complainant company depose on behalf of company without production of resolution".
12. The complainant company in this case produced Ex.P1 letter of authorisation which reads as follows: LETTER OF AUTHORISATION It has been resolved to authorise Mr. G Venkatesh, Service Manager to represent our company in the intended cases to be filed against Mr. Chinna Reddy Proprietor of M/s All Tech Digitals towards dishonour of cheque issued by him and to recovery of dues of the company.
Mr. G Venkatesh is authorised to engage the CC.No.6939 /2019 16 counsel sign, vakalathama, pleadings, affidavits, memos and compromise petition & to give evidence, produce documents and participate any settlement discussion and receive any settled amount on behalf of the company.
Thanking you, for Switchine Power Conversion Pvt Ltd . Signature Director R. Srinivas.
13. The learned counsel for the accused relied on a decision of Hon'ble Supreme Court reported in:
2015 SUPREME COURT 1198 A.C NARAYANAN V/S STATE OF MAHARASHTRA & Anr. Wherein Hon'ble Supreme Court held that:
" Section 138 of N.I Act Dishonour of chequecomplaint allegedly filed by emplyee of company claiming to be General Power of Attorney of complainant company and complaint was not singed either by Managing CC.No.6939 /2019 17 Director or Director of company Subsequently 'R' Deputy General Manager of Company gave evidence on behalf of company though he does not know anything. Nothing on record to suggest that he was authorised by Managing Director or an Director Acquital of accused, held in facts, was proper".
It is pertinent to note that Hon'ble High Court in Director Maruti Feeds & Farms Pvt Ltd v/s Basanna Pattekar held that:
14. Director of the company has deposed on behalf of the company without production of resolution by way of documentary evidence can not be appreciated and the acquittal of the accused is on that ground is proper'.
15. Hon'ble Supreme court in the decision referred above held that:
Compliant filed by the employee of the company claiming to be General Power of Attorney holder of the CC.No.6939 /2019 18 complainant company, complaint was not signed by either by Managing Director or Director of the company, however Deputy General Manager of company gave evidence on behalf of company though he does not know anything about the facts of the case, Acquittal of accused held in facts and proper".
16. But in the case on hand the complainant is a private limited company represented by its Manager who produced letter of authorisation duly executed by the Director of the company Sri. R. Srinivas based on said authorization the Manger of the company filed the complaint on behalf of the company and prosecuted the accused for the offence punishable under Sec.138 of N.I Act. Therefore the decisions referred above can not be made applicable to the facts on hand.
17. PW1 further deposed in his evidence that the battery supplied to the accused was installed by one Nataraj and Sumesh. Complainant has not produced CC.No.6939 /2019 19 installment reports, cheque issued from the accused was entered in the ledger extract of the complainant company. Ledger extract has not been produced before this court. It has been suggested to PW1 that in the year 2016 the accused has sold his Proprietary Firm M/s All Tech Digitals to one Anantha Rao Jadhav. But PW1 denied such suggestions and further deposed that the accused is liable to pay the amount covered under the cheque and the same is legally recoverable.
18. The learned counsel for the accused vehemently argued that the accused had sold All Tech Digitals firms to one Anantha Rao Jadhav who paid Rs.80,000/ (rupees eighty thousand only) to the complainant. It means to say that supply of goods to the M/s All Tech Digitals and in discharge of part liability Rs.80,000/ (rupees eighty thousand only) was paid by one Anantha Rao Jadhav which is entered in Ex.D1 ledger extract produced by the accused. The CC.No.6939 /2019 20 complainant has admitted in the complaint itself that the accused has paid Rs.80,000/ (rupees eight thousand only) in the name of the complainant in respect of part of the amount due, as such accused has issued Ex.P7 cheque to discharge his liability. Therefore Ex.D1 produced by the accused nothing to do with case on hand.
19. Hon'ble Supreme Court in A.C Narayanan V/s State of Maharashtra & Anr case discussed that the complainant was not signed either by Managing Director or Director of company. PW1 is the only the employee of the company as per resolution of the company, Managing director and director are the authorized to file suits, criminal complaint against the debtor for recover of money and for prosecution. Directors and Managing Director authorise to appoint or nominate any other persons to appear on their behalf in the court and engage lawyer etc. But nothing CC.No.6939 /2019 21 on the record to suggest that an employee is empowered to file the complaint on behalf of the company. At best the said persons can nominate any persons or company before the court, an employee of the company sign the complaint, General Manager of the company examined as witness who does not know anything about the facts of the case. Therefore Hon'ble Supreme court upheld is acquittal of the appellant in such a situation.
20. In the case on hand, Manager of the complainant company Sri. G Venkatesh authorised by the director as per Ex.P1 letter of authorisation, PW1 himself has signed the complaint on behalf of the complainant company. Therefore the decision referred by the learned counsel for the accused can not be made applicable to the facts on hand.
21. Ex.D2 is a letter addressed to one K.N Sriram, wherein the accused Chinna Reddy has stated as CC.No.6939 /2019 22 follows: Dec,26, 2015 To:
Sri. K.N Sriram, No.7/5, Kalburgi Complex, Magadi road, Bangalore.
Dear Sriram, This is to inform you that I sold the Photography business which is running in your complex to Mr. Anantha Rao Jadhav, residing at No.824/7, 6 th D cross, 3rd Main road, Prakashnagar, Bangalore560 021, along with Machinery, Fixture & Fixture, Stock and other related items with effect from December, 2015. Therefore I request you to cancel the Rent Agreement made in my favour and execute fresh rent agreement with Mr. Anantha Rao Jadhav. Also I request you to transfer the security deposit of Rs.4,75,00000 which is paid by me as the same is included in sale value. Kindly do the needful.
Thanking you, Yours truly, signature (CHINNA REDDY)
22. Accused deposed in his evidence that he has not CC.No.6939 /2019 23 engaged with the business of the complainant company, he sold M/s All Tech Digitals Labs in favour of one Anantha Rao Jadhav on 26.12.2015, he gave a letter to one K.N Sriram owner of the premises of the company of the accused was installed and accused addressed the letter to the said K.N Sriram as per Ex.D2 Anantha Rao Jadhav continued the bank account pertaining to All Tech Digitals, Ex.P2 invoice does not belongs to him, he had handed over the blank cheque duly signed by him to Anantha Rao Jadhav to pay the electricity bills, he has not received legal notice etc.
23. It is pertinent to note that the accused has not initiated any action against the Anantha Rao Jadhav regarding misuse of the cheque alleged to have handed over, during cross examination he further deposed that he did not give purchase order on 31.05.2018 to the complainant company. He denies issuance of cheque CC.No.6939 /2019 24 in favour of the complainant to discharge his part liability. But delivery note produced by complainant marked as Ex.P4 reveals that the complainant has supplied the goods as per purchase order to accused company i.e., All Tech Digitals on 26.12.2015 . Mere production of Ex.D1 account extract of the accused company as well as Ex.D2 letter addressed to one K.N Sriram itself is not sufficient to show that one Anantha Rao Jadhav was the owner of the All Tech Degitals as on the date of supply of goods. The complainant is able to establish that the complainant supplied 12 Volts 26 AH Quanta SMF Battereis (24 in numbers) on 25.05.2018. The accused had purchased one Switcher 7.5 KVA NL752AG UPS System from the complainant. The accused firm had paid a sum of Rs.80,000/ (rupees eighty thousand only) to the complainant through Online transfer and accused issued a cheque for the balance amount of Rs.75,000/(rupees seventy CC.No.6939 /2019 25 five thousand only) dated 30.07.2018 bearing No.331696 drawn on Karnataka Bank Ltd, Rajajingar branch, Bengaluru in discharge of legally recoverable liability. Therefore accused should be held liable for the offence committed under sec.138 of N.I Act.
24. On appreciation of entire evidence, this court is of the opinion that the accused miserably failed to challenge the oral and documentary evidence produced by the complainant. Accused has utterly fails to prove the defence that he has not issued the cheque for discharge of legally enforceable debt. On the contrary, the complainant has proved through overwhelming evidence that the accused has issued Ex.P5/cheque for a total sum of Rs.75,000/ towards discharge of legally enforceable debt and on presentation of the cheques, the same were dishonored for the reasons 'Funds Insufficient' and even after service of legal notice, the accused has not paid the amount covered CC.No.6939 /2019 26 under the cheques. Hence, in the considered view of this court, the complainant has proved that the accused has committed an offence punishable u/s 138 of N.I. Act. Hence, I answer the above point No.1 in the affirmative.
25. Point No.2: From the material on record and considering the age, avocation of accused and quantum of the cheques, if the accused is sent to jail, it would cause problem to the accused as well as to her family members. Having regard to the facts and circumstances, prevailing rate of interest in the nationalized Bank and litigation expenses, I proceed to pass the following:
ORDER The accused is found guilty of the offence punishable u/s 138 of N.I. Act.
Acting u/s 255(2) of Cr.P.C. the accused is hereby convicted and sentenced to pay fine of CC.No.6939 /2019 27 Rs.85,000/(Rupees Eighty Five Thousand only) in default he shall undergo simple imprisonment for six months.
Out of fine amount of Rs.85,000/ (Rupees Eighty Five Thousand only) a sum of Rs.80,000/ (Rupees Eighty Thousand only) is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/ (Rupees Five Thousand01 only) shall be remitted to the State.
The bail bond executed by the accused stand canceled.
Supply free copy of the judgment to the accused. (Dictated to Stenographer directly on the Computer, taken print out corrected, signed by me and then pronounced in the open court this the 27 th day of November, 2021) (MANJUNATHA) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
CC.No.6939 /2019 28 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT :
PW1 : Sri. G Venkatesh LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE:
DW1 : Sri. Chinna Reddy LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P1 : Authorisation letter Ex.P2 : 3 invoices Ex.P3 : Purchase order Ex.P4 : Delivery note Ex.P5 : Cheque Ex.P5(a) : Signature of the accused
Ex.P5(b)&(c) : Bank endorsements Ex.P6 : Legal notice Ex.P6(a) : Postal receipt Ex.P7 : Postal Acknowledgement Ex.P8 : Track consignment Ex.P9 : Compliant LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:
Ex.D1 : Account statement
Ex.D1(a) : Transaction details
Ex.D2 : Letter
Ex.D2(a) : Signature of the Proprietor of
accused firm
Mr. Chinna Reddy in the letter
XXVIII Addl. Chief Metropolitan
Magistrate, Bengaluru.
CC.No.6939 /2019
29
27.10.2021
Judgment pronounced in the open court vide separate order.
ORDER The accused is found guilty of the offence punishable u/s 138 of N.I. Act. Acting u/s 255(2) of Cr.P.C. the accused CC.No.6939 /2019 30 is hereby convicted and sentenced to pay fine of Rs.85,000/(Rupees Eighty Five Thousand only) in default he shall undergo simple imprisonment for six months.
Out of fine amount of Rs.85,000/ (Rupees Eighty Five Thousand only) a sum of Rs.80,000/ (Rupees Eighty Thousand only) is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/ (Rupees Five Thousand only) shall be remitted to the State.
The bail bond executed by the accused stand canceled.
Supply free copy of the judgment to the accused.
XXVIII A.C.M.M, Bangaluru.
CC.No.6939 /2019 31