Bangalore District Court
Is A Manufacturer Of Ready Mix Concrete vs Company Being In Charge And Responsible ... on 23 November, 2020
1 CC.No.1210/2017
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITON MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:- Sri. ABDUL RAHIM HUSSAIN SHAIKH
B.Sc, B.Ed, LLB(Spl)
XXVIII A.C.M.M
Bengaluru City.
Dated this the 23rd day of November, 2020
CC.No.1210/2017
JUDGMENT
1. Sl.No. of the case : C.C.No.1210/2019
2. The date of commence of Evidence : 10.04.2018
3. The date of Institution : 21.09.2016
4. Name of the Complainant :M/s Ultratech Cement Ltd Ltd, (Unit: Birla Ready Mix) A Company incorporated under the Companies Act, 1956 having its Registered office at B Wing, Ahura Centre, 2nd floor, Mahakali Caves Centre 2nd Floor, Mahakali Caves Road, Andheri (East), Mumbai- 400 093.
Regional Office at Industry House, 5th floor, 45, Race Course Road, Bangalore- 560 001 UNIT at Sy No.102/2A, 2B, Harlur Village, Vathur Hobli Koramangala post, Bangalore.
Rep by its Manager (Commercial) 2 CC.No.1210/2017 Sri. Suhil Singhania, S/o Late Sri. K.C Singhania,
5. Name of the Accused : 1.M/s. Sri Krishna Shelters Private Ltd, Managing Directors Mr. Raghavendra,
2. Mr. Raghavendra Managing Director of M/s Sri. Krishna Shelters Private Limited.
Regd. Office at No.59, Sri. Krishna Sudha, West Anjaneya Temple Street, Off: Basavangudi Main road, Gandhi Bazaar, Bangalore-560 004.,
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 Acquitted
9. Date of such order : 23.11.2020 JUDGMENT
1. This case has been registered against the accused on the basis of the complaint filed by the complainant u/s 200 of Cr.P.C 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 manufacturer of Ready Mix 3 CC.No.1210/2017 Concrete and the first accused is company involved in civil contract and is a customer of complainant company. The second accused is the Managing Director of the first accused company being in charge and responsible for the day to day affairs of the first accused company. It is the case of the complainant that the accused had placed orders at Bengaluru for supply of Ready Mix Concrete for construction of projects at Mysore, Mangalore and Vijayawada and the same had been supplied under various invoices for which the accused is due and liable to pay to the complainant a sum of Rs.21,19,500/- for Mysore project, Rs.28,47,259/- for Mangalore project and Rs.22,27,135/- for Vijayawada project respectively. The total amount due by the accused to the complainant is Rs.71,93,894/- towards principal along with interest at 24% P.A on the respective invoices. It is the further case of the complainant that the complainant company had issued a notice dt:07.03.2016 and when the accused failed to comply the demand the complainant had filed a petition No.131/2016 before the Hon'ble Court of 4 CC.No.1210/2017 Karnataka and it is pending for disposal. In discharge of said due for part payment accused No.2 had issued two cheques in his capacity as a Managing Director of the first accused company bearing Nos.000016 dt:17.06.2016 for Rs.25,00,0000/-drawn on Bank of Baroda, Jayanagar, Bengaluru and No.002732 dt:16.06.2016 for Rs.40,00,000/- drawn on Karnataka Bank Ltd, Vijayawada which on presentation for encashment was returned as dishnoured for the reason 'Funds Insufficient' on 18.06.2016. After receipt of bank memo on 23.06.2016 complainant got issued a legal notice to the accused through RPAD calling upon the accused to pay the cheque amount within 15 days from the date of receipt of the said notice and inspite of receipt of the said notice on 26.08.2016 the accused has not paid the cheque amount to the complainant nor issued any reply. Accordingly the complainant filed the complaint against the accused for having committed an offence punishable u/s 138 of N.I. Act on 21.09.2016.
3. In pursuance of the summons, the accused has 5 CC.No.1210/2017 appeared through Counsel and got enlarged on bail by executing necessary documents. The copy of the complaint was furnished to the accused, as required under law. As there is sufficient material, plea was recorded against the accused on 19.02.2018 and explained to the accused in his vernacular, for which the accused pleaded not guilty and claims to be tried.
4. In order to prove the case, the Officer with Special Power of Attorney for the complainant Company Mr. Nitin Guptal has examined as PW1 and got marked Ex.P1 to P14 and closed the side. Then the statement u/s 313 Cr.P.C was recorded on 26.06.2018, wherein the incriminating evidence appeared against the accused was read over and explained which was denied by the accused. Accused examined has DW1 and got marked Ex.D1 to D4.
5. The learned Counsel for complainant argued that complainant is a manufacturer of Ready Mix Concrete and the first accused is company involved in civil contract and is a customer of complainant company. 6 CC.No.1210/2017 The second accused is the Managing Director of the first accused company being in charge and responsible for the day to day affairs of the first accused company. It is the case of the complainant that the accused had placed orders at Bengaluru for supply of Ready Mix Concrete for construction of projects at Mysore, Mangalore and Vijayawada and the same had been supplied under various invoices for which the accused is due and liable to pay to the complainant a sum of Rs.21,19,500/- for Mysore project, Rs.28,47,259/- for Mangalore project and Rs.22,27,135/- for Vijayawada project respectively. Further the contention of the complainant that the total amount due by the accused to the complainant is Rs.71,93,894/- towards principal along with interest at 24% P.A on the respective invoices. It is the further case of the complainant that the complainant company had issued a notice dt:07.03.2016 and when the accused failed to comply the demand the complainant had filed a petition No.131/2016 before the Hon'ble Court of Karnataka and it is pending for disposal. In discharge of 7 CC.No.1210/2017 said due for part payment accused No.2 had issued two cheques in his capacity as a Managing Director of the first accused company bearing Nos.000016 dt:17.06.2016 for Rs.25,00,000/-drawn on Bank of Baroda, Jayanagar, Bengaluru and No.002732 dt:16.06.2016 for Rs.40,00,000/- drawn on Karnataka Bank Ltd, Vijayawada which on presentation for encashment was returned as dishnoured for the reason 'Funds Insufficient' on 18.06.2016. It is the contention of the complainant that on 26.08.2016 he had issued the demand notice to the accused and inspite of receipt of the said notice the accused had not complied to the said demand nor have made any payment on the said dues to the complainant. It is the case of the complainant that the ingredients of Sec.138 and 142 are duly complied with and prayed to convict the accused.
6. The learned Counsel for accused contended that the complainant had no locus standi to prosecute the case against the accused on behalf of the company without any board resolution as per Sec.291 of companies Act. It 8 CC.No.1210/2017 is the case of the accused that no document has been produced by the complainant to prove the supply of ready mix concrete on particular dates for an amount of Rs.71,93,894/- along with interest 24% per annum. It is also contended by the accused that complainant utterly failed to prove by cogent and convenient evidence that the accused was in due for the payment of Rs.71,93,894/- and in discharge of the said due the accused has issued the disputed cheque. It is contended that in the absence of legal debt and liability towards complainant the accused is entitle for acquitted.
7. Heard arguments and perused the material placed on record.
8. On the basis of the above facts, the following points arise for my consideration:
1) Whether the Complainant/PW1 proves that he had an authority to represent, depose and contest the case on behalf of the complainant company?
2.)Whether the complainant proves that the accused towards discharge of legal 9 CC.No.1210/2017 recoverable debt issued two cheques bearing Nos.bearing No.002732 dt:16.06.2016 for Rs.40,00,000/- drawn on Karnataka Bank Ltd, Vijayawada & cheque bearing No.000016 dt:17.06.2016 for Rs.25,00,000/- drawn on Bank of Baroda, Jayanagar Branch, Bengaluru in favour of complainant, on presentation for encashment the said cheques were returned as 'Funds Insufficient' and in spite of receipt of legal notice, the accused failed to pay the cheques amount within the statutory period and thereby the accused has committed an offence punishable u/s 138 of N.I. Act?
3. What order?
9. My findings on the above points are as under :
Point No.1 : In the Negative Point No.2: In the affirmative Point No.3: As per final order, for the following:
REASONS
10. Point No.1:- In order to prove the case, the authorised representative of the complainant Company Sri. Nitin Gupa filed affidavit by way of examination-in- 10 CC.No.1210/2017 chief and deposed that complainant is a manufacturer of Ready Mix Concrete and the first accused is company involved in civil contract and is a customer of complainant company. It is further evidence of PW1 that the second accused is the Managing Director of the first accused company being in charge and responsible for the day to day affairs of the first accused company. In the evidence the complainant deposed that the accused had placed orders at Bengaluru for supply of Ready Mix Concrete for construction of projects at Mysore for an amount Rs.21,19,500/-, for Mangalore project Rs.28,47,259/- and amount of Rs.22,27,135/- for Vijayawada project respectively. It is deposed by PW1 in his evidence that the material for the said amount had been supplied under various invoices and accordingly accused was in due total amount of Rs.71,93,894/- towards principal along with interest at 24% P.A on the respective invoices. It is also evidence of the complainant/PW1 that in discharge for the said amount accused No.2 had issued two cheques in his capacity as 11 CC.No.1210/2017 a Managing Director of the first accused company bearing Nos.000016 dt:17.06.2016 for Rs.25,00,000/-drawn on Bank of Baroda, Jayanagar, Bengaluru and No.002732 dt:16.06.2016 for Rs.40,00,000/- drawn on Karnataka Bank Ltd, Vijayawada which on presentation for encashment was returned as dishnoured for the reason 'Funds Insufficient' on 18.06.2016. It is deposed by PW1 that after receipt of bank memo on 23.06.2016 complainant got issued a legal notice to the accused through RPAD calling upon the accused to pay the cheque amount within 15 days from the date of receipt of the said notice and inspite of receipt the said notice on 26.08.2016 the accused has not paid the cheque amount to the complainant nor issued any reply. In order to prove the said facts the complainant had produced Ex.P1 to 14. Per contra, the accused/DW1 in his evidence and also in the cross examination of PW1 had taken the contention that the complainant had no locus standi to prosecute the case against the accused on behalf of the company. In the cross examination of PW1 it is 12 CC.No.1210/2017 specifically contended by the accused that the complainant had no authority as per Ex.P1 to represent the complainant which has been denied by the complainant PW1. The relevant portion of cross examination of PW1 at page -11 :
"ನಪ-1 ರರತ ಈ ಪ ಪಕರಣದಲ ಸಕಕ ನನಡಯಲನ ನನಗ ಯವದದ ಅಧಕರ ಇಲಲ ಎರದರ ಸರಯಲಲ. "
From this suggestion in the cross examination of DW1 it is crystal clear that the accused contended that in according to Ex.P1 the complainant had no authority to contest the case on behalf of the complainant company. In the written argument submitted by the accused it is the contention taken by the accused that PW1 by name Nitin Gupta without authority as represented and deposed on behalf of the complainant company as per Ex.P1 Special Power of attorney that has been executed by one Vivek Agarwal CMO of complainant company. It is argued and contended in the written argument by the accused counsel that in the absence of board of resolution passed in favour of Vivek Agarwal, CMO 13 CC.No.1210/2017 marketing to represent and contest the case on behalf of the complainant company. The said Vivek Agarwal had no authority and right to execute Ex.P1 Special Power of Attorney in favour of the complainant PW1 Nitin Gupta. It is further argued by the accused counsel that as per Sec.291 of companies Act there must be a resolution passed by the Directors of the company authorizing the managing Director or any other competent officer to prosecute the case in the competent court. It is also contention of the accused that the Managing Director under the memorandum of Association or Article of Association is to be authorised to file a complaint on behalf of the complainant company against the accused. Further it is also vehemently argued by the accused counsel and also contended in his written argument that the complaint Ex.P12 was filed by a person by name without any authority on behalf of the complainant company. It is pertinent to note that inspite of the contention of the accused regarding no authorisation for the complainant and PW1 Nitin Gupta to represent the 14 CC.No.1210/2017 complainant company, the counsel for the complainant has not argued on the said point nor have made any efforts to convince the court that Ex.P1 the Special Power of attorney was sufficient authorization for PW1 to represent the case on behalf of the complainant.
11. In order to support the case the accused counsel had produced the ruling reported in :
2015 (2) KCCR 1476 KARNATAKA HIGH COURT, George Joseph and another v/s HMT (International) Limited, Bangalore and another Criminal Revision Petition No.126 of 2013, decided on 28.10.2014.
NEGOTIALE INSTRUMENTS ACT, 1881, Sections 138 and 142-Conviction- Challenge to - Complaint on behalf of company- Prosecuted by person not duly authorized to do so - Though it was shown that person who had prosecuted complaint was said to have been acting under a Power of Attorney executed by Chairman of Board of Directors, he was not authorized to repreent company in manner known to law- Therefore, proceedings stood vitiated.
On going through the dictum of law laid down by 15 CC.No.1210/2017 Hon'ble High Court of Karnataka it is found that "A delegation of power can only be through the resolution of board directors. It is also clearly held that a letter of authorisation or a power of attorney executed by the Chairman or other officers of the company, without a delegation of the power to institute such proceedings having emanated from the board of directors, would invalidate any proceedings brought without the necessary authority. It is also held that for any person to represent and tender evidence in a court of law on behalf of the company, ought to be authorised under the article of association of company or by a separate resolution by the board of directors. The proceedings are held to be vitiated for want of authority to prosecute the complaint on behalf of the company by the power of attorney holder.
12. Further in this case accused has relied on another judgment reported in:
2014 (4) KCCR 3032 KARNATAKA HIGH COURT, CREF FINANCE LIMITED, KOLKATA V/S SREE SHANTHI HOMES PRIVATE LIMITED, BANGALORE CRIMINAL APPEAL NO.1419 OF 2006, DECIDED ON 30.08.2013 16 CC.No.1210/2017 A. NEGOTIABLE INSTRUMENTS ACT, 1882- Section 138- Dishonour of cheque- Complaint by company -
Complainant not authorised to represent company by passing a resolution- complaint not maintainable. On perusal of the ruling it is found that the Hon'ble High Court has clearly laid down the dictum of law that in para-7 of the said ruling it is held that :
"The board of directors of the company collectively entitle to exercise the powers and to do the Acts on behalf of the company. Sec.291 of the companies act confers the authority to the board of directors collectively. Therefore if the complaint is to be filed it is necessary for the board of directors to authorise any person to file a complaint or depose to the facts in a case and such an authority could be granted by the board of directors only under a resolution. Keeping in mind the dictum of law laid down by the Hon'ble High Court of Karnataka in the above referred decisions, it is better to appreciate the oral and documentary evidence adduce before the court. In the 17 CC.No.1210/2017 instant case the witness PW1 by name Sri. Nitin Gupta has never produce any document to show that the complainant Sushil Singhania was holding a authorisation to contest the case on behalf of the complainant company nor PW1 Sri. Nitin Gupta has produce any document to show that the person by name Vivek Agarwal had an authorisation through Board of Directors to execute Special Power of Attorney in his favour to contest the case on behalf of the complainant company. The document Ex.P1 that has been produce before the court discloses that it is a special power of attorney that has been executed by Sri.Vivek Agarwal Chief Marketing officer of the complainant company in favour of PW1 Sri. Nitin Gupta, the Deputy Manager. It is mentioned in the Ex.P1 that the said Vivek Agarwal is the holder of General Power of Attorney from the board of directors and he is duly authorise to delegate his power to Sri Nitin Gupta. It is very pertinent to note that other than Ex.P1 not a single document has been produce by the complainant to show that there was an resolution 18 CC.No.1210/2017 passed by the complainant company in favour of Sushil Singania to file an complaint Ex.P12 and a General Power of attorney in favour of Sri. Agarwal authorising to represent the complainant company. On perusal of the complaint Ex.P12 it reveals that the said complaint is signed by Sushil Singhania on behalf of the complainant company, but the letter of authority of Sushil Singania is not marked in this case so as to ascertain the evidentiay value of the said document. Further the Board resolution and the authorisation of the complainant company regarding General Power of Attorney executed in favour of Sri. Vivek Agarwal is not placed on record. In the absence of the same the contention of the accused that the complainant Sushil Singhania and the executant of Special Power of Attorney Ex.P1 Sri. Vivek Agarwal in favour of the complainant PW1 Sri. Nitin Gupta had no authority to contest and represent the case of the complainant company as to be accepted. It is equally important to note that inspite of the contention taken by the accused in the cross examination of PW1 that he is 19 CC.No.1210/2017 not duly authorise to contest the case on behalf of the complainant company no specific document that is the board of resolution nor the authority authorising the complainant /PW1 Nitin Gupta and Sri. Vivek Agarwal has been placed on record by the complainant. From this it is crystal clear that this case was prosecuted by the complainant Sri. Sushil Singhania, Sri. Vivek Agarwal and the complainant PW1 Nitin Gupta without any authorisation from board of directors to represent the company in manner known to law. On appreciation of the material on record, I have no hesitation to hold that the complainant, and their representatives Sri. Vivek Agarwal, PW1 Sri. Nitin Gupta miserably fail to prove that they had authority through the board resolution to contest and depose in this case on behalf of the complainant company. For the forgoing reasons I answer this point No.1 in the Negative.
13. POINT NO:2 In the instant case the complainant PW1 had deposed that complainant being a manufacturer of Ready Mix Concrete had supplied the 20 CC.No.1210/2017 said ready mix concrete for construction to the accused projects sites at Mysore for an amount Rs.21,19,500/-, for Mangalore project Rs.28,47,259/- and amount of Rs.22,27,135/- for Vijayawada project respectively. In the evidence PW1 deposed that for the above transaction accused was due for payment of Rs.71,93,894/- along with interest of 24% P.A and in discharge had issued two cheques bearing Nos.000016 dt:17.06.2016 for Rs.25,00,000/-drawn on Bank of Baroda, Jayanagar, Bengaluru and No.002732 dt:16.06.2016 for Rs.40,00,000/- drawn on Karnataka Bank Ltd, Vijayawada which on presentation for encashment was returned as dishnoured for the reason 'Funds Insufficient' on 18.06.2016. In order to prove the said fact the complainant /PW1 has produced Ex.P1 the account statement pertaining to the said transaction along with a certificate to show that the said accounts were regularly maintained and fed and stored in computers of the complainant firm. Further the complainant has also produce the ledger account 21 CC.No.1210/2017 pertaining to the said transaction Ex.P3 dated:01.12.2015 to 31.03.2016 disclosing that the out standing balance is Rs.97,47,259/- which was confirmed by accused company. Further PW1 has also produce balance confirmation letter Ex.P4 dated:01.02.2016 issued to the accused company for due balance of Rs.22,27,000/- to the accused company and the said amount that has been due has been confirmed by the General Manager of accused company. The document Ex.P4 it is crystal clear that the accused company has put their seal and signature confirming the balance of Rs.22,27,134.95. It is very important to note that accused DW1 in his chief examination has admitted that they are carrying the business of construction and they have purchase RMC from the complainant company. It is the contention of the accused that at the time of purchase of the said RMC the complainant company had taken two cheques as security and even after the entire payment has misuse the same and filed a false complaint against the accused. In the evidence of DW1 the 22 CC.No.1210/2017 accused had taken the contention that they had paid an amount of Rs.4,98,00,000 and after verification found that extra amount of Rs.8,04,517/- had been paid. They demanded the repayment of the said extra amount at that point of time the complainant had misuse the cheques issued for security and filed a false complaint against the accused. To prove his case accused has produce Ex.D1 letter dated:10.06.2016 regarding excess payment of money to the complainant company and Ex.D2 to D4 the account statement relating to Mysore, Mangalore and Vijayawada project. It is the main contention of the complainant that the said document Ex.D2 to D4 have been created by the accused in order to escape the liability of payment of due amount. In the cross examination of DW1 it is clearly admitted by the accused that the said document does not bear the acknowledgment signature of the complainant firm. It is pertinant to note that if at all the accused had issued Ex.D1 letter to the complainant, there was no impediment on the part of the accused to produce the 23 CC.No.1210/2017 postal or courier acknowledgment so as to show that the letter has been posted to the complainant company and the same has been duly acknowledged. In the cross examination of DW1 the complainant counsel has suggested that Ex.D1 does not bear the confirmation acknowledgement of the complainant company. Further on perusal of Ex.D1 it is crystal clear that the said document does not bear the signature of the complainant firm as regard to the receipt of the said letter. Further the account statement Ex.D2 to D4 that has been produce by the accused also does not bear any acknowledgment confirmation from the complainant company In view of the same the said document Ex.D1 to D4 produced by the accused does not inspire confidence regarding the argument of the accused that he had paid the entire amount to the complainant company and there was excess payment of Rs.8,04,517/- to the complainant company. It is equally important to note that in the cross examination of DW1 accused denied the balance confirmation seal endorsed by the accused 24 CC.No.1210/2017 company on the account statement Ex.P2 and 3 and the balance confirmation letter Ex.P4 contending that the accused company has never confirm the said account statement. On perusal of the document Ex.P2 to 4 it is found that the account statement regarding supply of ready mix concrete to the accused projects at Mysore, Mangalore and Vijayawada and the outstanding balance have been confirmed by the accused company. In the instant case as admitted by accused/DW1 in his cross examination he has not taken any legal action against the complainant company for having demanding more money for the supply of Ready mix concrete then mentioned in the agreement between the parties. It is equally important to note that if at all the accused company has not endorsed the signatures and seal on the balance confirmation and account statement Ex.P2 to 4 definitely the accused would have taken legal action against the complainant. On perusal of the records it is crystal clear that no documents have been produced by the accused to prove the fact that the complainant has 25 CC.No.1210/2017 concocted and created the document Ex.P1 to 4 to their convenience and inspite of obtaining excess amount of Rs. 8,04,517/- filed a false complaint against the accused.
14. It is the case of the complainant that they have filed a company petition No.131/2016 before the Hon'ble High Court which has been marked as ExP.13 and admitted by the accused. It is also the case of the complainant that soon after filing the objection Ex.P14 by the accused he had issued disputed cheque Ex.P7 & 8 for the discharge of legal debt and liability. In the cross examination of DW1 accused admitted the cheque Ex.P7 & 8 belongs to his company and also admitted his signature Ex.P7(a) and 8(a) on the said cheque. The relevant portion of cross examination of DW1 regarding the admission of cheque and his signature is as follows:-
ಸದರ ನಪ-7 ಮತನತ -8 ಚಕನ ಕ ಗಳಲರನವ ನಪ -7(ಎ ) ಮತನತ ನಪ -8 ( ಎ ) ಸಹಗಳನ ನನನವ ಎರದರ ಸರ .
This admission is sufficient to prove that the accused had issued the cheque Ex.P7 and 8 with signature on the said 26 CC.No.1210/2017 cheque. In the cross examination of PW1 the accused counsel had taken the contention that the cheque Ex.P7 & 8 which had been issued to the complainant for security has been misused to file a false complaint and the ink that has been used to write the content are different. The complainant has clearly deposed that though the ink varies but the said cheques have been issued by the accused in discharge of legal debt. The relevant portion of cross examination of PW1 is as follows:-
"ನಪ-7 ಮತನತ ನಪ -8 ರಲರನವ ಬರಹಗಳನನ ನ ನಮಮ ಅನನಕಕಲಕಕ ತಕಕರತ ನಮಮ ಸರಸಸಯವರನ ಭರರ ಮಡರನತತರ ಎರದರ ಸರಯಲಲ. ನಪ -7 ಮತನತ ನಪ-8 ರಲ ಬರಹ ಬರಯಲನ ಬಳಸಲದ ಶಹಗಳಲ ವಕತಕಸವದ ಎರದರ ಸಕಯನ ಆರಕದಪಯದ ಭರರ ಮಡಕಕಟಟರನತತನ ಎರದನ ನನಡಯನತತರ."
From this evidence it is crystal clear that according to the accused the cheques Ex.P7 & 8 and the signature on the said Ex.P7(a) & 8(a) belongs to him but the said cheque that has been issued for security is filled as per the convenience by the complainant. It is equally 27 CC.No.1210/2017 important to note that no document has been produce by the accused to prove that the said cheques have been issued for the purpose of security to the complainant. In the instant case accused contention that the cheque has been filled as their convenience by the complainant which had been furnished for security cannot be accepted with accused is in due for payment of the date of issuing the cheque.
15. To appreciate the evidence on hand and to apply dictum of law laid down by Hon'ble Supreme Court I would like to reproduce the ruling reported in:
2019 SAR 2446 (Criminal) 309 Supreme Court, ( Bir Singh v/s Mukesh Kumar).
(E) Negotiable Instruments Act (26 of 1881), S, 138, 139 - Dishonour of cheque - Presumption as to legally enforceable debt - Rebuttal - Onus to rebut presumption that cheque issued in discharge of debt or liability is on accused. (Para 36) (G)Negotiable Instruments Act, (26 of 1881), Ss.138, 139 - Presumption as to legally enforceable 28 CC.No.1210/2017 debt - Rebuttal - Signed blank cheque- If voluntarily presented to payee, towards payment, payee may fill up amount and other particulars and it in itself would not invalidate cheque - Onus would still be on accused to prove that cheque was not issued for discharge of debt or liability by adducing evidence. (Para-38).
(H) Negotiable Instruments Act (26 of 1881), Ss, 138- Dishonour of cheque - Complainant can fill up amount or particulars in blank cheque. (Para 38). (J)Negotiable Instrument Act 26 of 1881), Ss. 138, 139 - Dishonour of cheque - Absence of finding that cheque was not signed by accused or not voluntarily made over to payee- No evidence regarding circumstances in which blank signed cheque given to complainant - Cheque presumed to be filled in by complainant being payee in presence of accused, at his request or with his acquiescence- No change in amount, its date or name of payee- Subsequent filing in of an unfilled signed cheque is not alteration- Accused liable to be convicted.
29 CC.No.1210/2017This ruling is aptly applicable to the present facts and circumstances of the case since in para-36, 37, 38 & 40 the Hon'ble Supreme court has clearly laid down the dictum of law that the onus to rebut the presumption u/s 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque may be post dated does not absolve the drawer of the cheque of a penal consequences of sec.138 of the N.I Act.
16. On perusal of the said ruling the Hon'ble Supreme Court had made it very clear that if a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill of the amount and other particulars. This in itself would not invalidate the cheque. The Onus would still be on the accused to prove that the cheque was not in discharge of debt or liability by adducing evidence. It is further held that even blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption u/s 139 of the Negotiable Instrument Act, in 30 CC.No.1210/2017 the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. It is also held that the provisions of Sec.20, 87 and 139 makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. Further in para-36 the Hon'ble Supreme Court makes it clear that the burden is on the accused to rebut the presumption u/s 139 of N.I Act that the cheque/Ex.P7 & 8 with signature Ex.P7(a) & 8(a) in the instant case issued by the accused was not in discharge of legal debt and liability but in the instant case there is clear admission by the accused that the disputed cheques Ex.P7 & 8 and the signatures Ex.P7(a) & 8(a) on the said cheque belongs to him. In view of the dictum of law laid down in the above referred judgment and on appreciating the evidence of the accused and complainant 31 CC.No.1210/2017 it is crystal clear that the accused failed to rebut the presumption existing u/s 139 N.I Act in favour of the complainant.
17. Accused has produce a ruling reported in:
2011 (5) KCCR 4223 KARNATAKA HIGH COURT, M.B RAJASEKHAR V/S SAVITHRAMMA NEGOTIABLE INSTRUMENTS ACT, 1881- Section 138 Dishonour of cheque- offence of-Acquittal-Contents of Cheque id not reveal that she had filled it in her own hand-Inference can be drawn that either cheque was blank or some other person had filled its contents- Date on cheque found to be altered so as to validate it without any authentication- Accused pleading that she had issued a post date cheque as security-Also raising probable defence- It is sufficient to rebut presumption- Acquittal not liable to be interfered with. On perusal of the said ruling it is found that in the referred ruling there was alteration in the date of the cheque without any authentication and in view of the same the Hon'ble High Court has held that accused had 32 CC.No.1210/2017 rebutted the presumption but this dictum of law cannot be applied to the present case, since there is no alteration in the date of disputed cheques Ex.P7 and Ex.P8 produced by the accused. Further the dictum of law regarding the filling of the cheque is laid down by Hon'ble Supreme Court in the case discussed supra 2019 SAR 2446 (Criminal) 309 Supreme Court, ( Bir Singh v/s Mukesh Kumar). In view of the same the present ruling produced by the accused is not applicable to the present facts and circumstances of the case.
18. At this juncture I would also like to refer the ruling reported in:
AIR 2019 SUPREME COURT 1876 Rohitbhai Jivanlal Patel v/s State of Gujarat and another (A) Negotiable Instruments Act (26 of 1881), Ss. 138, 139 - Dishonour of cheque - Rule of Presumption of innocence of accused - Cannot be applied with same rigour to offence u/s 138, particularly where presumption is drawn that holder received the 33 CC.No.1210/2017 cheque for discharge, the debt or liability.
(B) Negotiable Instruments Act (26 of 1881), Ss.118, 138 - Dishonour of cheque - Presumption in favour of holder - All basic ingredients of Ss.138, 118 and 139 are apparent on fact of record - Therefore, it is required to be presumed that cheques in question were drawn for consideration and complainant received it is discharge of an existing debt. (D) Negotiable Instruments Act (26 of 1881), Ss. 138, 139 - Dishonour of cheque - Principles of presumption - Once presumption of existence of legally enforceable debt drawn in favour of complainant, onus is shifted on accused - unless onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused.
On perusal of the ruling it is found that the ruling is applicable to the present facts and circumstances of the 34 CC.No.1210/2017 case and all basic ingredients of Sec.138, 118 and 139 are apparent on actual record. In view of the same it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e a complainant had received the same in discharge of an existing debt. Though the onus shifts on the accused who has to establish by probable defense so as to rebut such a presumption but in this case the accused has utterly failed to produce probable defense that the cheques were not issued in discharge of legal debt and liability. It is clearly held in the said judgment that unless the onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised.
19. At this juncture I would also like to discuss the citation reported in AIR 2018 Hon'ble Supreme Court 3601 (T.P Murugan (Dead) Thr.Lrs.V Bojan AND Posa Nandhi Rep.Thr, POA Holder, T.P Murugan v. Bojan) In this ruling at para-8 the Hon'ble Supreme Court has laid down the dictum of law that u/s 139 of the N.I Act, once a 35 CC.No.1210/2017 cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability by referring to K.N.Beena v/s Muniyappan and Another, (2001) 8 SCC 458, para-6 and Rangappa v/s Shrimohan (2010) 11 SCC 411, para 26 . It is further held that the presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan.
The dictum of law laid down by Hon'ble Supreme Court in this case is aptly applicable to the fact and circumstances of the present case since accused has utterly failed to rebut the presumption u/s 139 of N.I Act existing in favour of the complainant that the cheques Ex.P7 & 8 issued by him is not for discharge of any legal debt or liability but only for security. Per contra, the complainant has proved the case by overwhelming evidence to establish that the accused has issued the cheques for discharge of his legal debt and liability. For 36 CC.No.1210/2017 the repayment of due amount regarding supply of ready mix concrete to different projects of accused company at Mysore, Mangalore and Vijayawada.
This ruling is also applicable to the facts and circumstances of the case wherein it is clearly held that the burden is on the accused to rebut the presumption that there exist no enforceable debt and if voluntarily the cheques are issued for payment, payee may fill up the amount and other particulars in the blank cheque. In the instant case also accused though had issued the cheques for payment of outstanding due amount but fails to prove the same was issued only for security. Per contra, the complainant has proved that the accused has issued the disputed cheque Ex.P7 & 8 with signature Ex.P7(a) and Ex.P8(a) in discharge of legal debt and liability.
20. It is equally important to note that the accused contended that he has issued the cheques for security and the same has been misuse by the complainant but not supported his claim by leading cogent evidence and 37 CC.No.1210/2017 relevant document. On this point the complainant has produce the ruling reported in:
2015 AIR SCW 3040 SUPREME COURT, T VASANTHAKUMAR V/S VIJAYAKUMARI Negotiable Instruments Act (26 of 1881) S.138.S.139- Dishnour of cheque- Appeal against acquittal-Cheque as well as signature on it not disputed by accused respondent- Presumption under S.139 would be attracted- Story brought out by accused that cheque was given to complainant long back in 1999 as a security to a loan; the loan was repaid but complainant did not return security cheque- Is unworthy of credit, apart from being unsupported by any evidence- Mere printed date on cheque by itself cannot be conclusive of fact that cheque was issued in 1999- Order of High Court in acquitting accused is erroneous and set aside.
This ruling is support the case of the complainant since the dictum of law laid down by Hon'ble Supreme Court in para-10 of the said judgment "it is crystal clear that 38 CC.No.1210/2017 when the cheque and the signature has been accepted by the accused the presumption under sec.139 would operate. The burden is on the accused to disprove the cheque or the existence of any legally recoverable debt or liability. But in this case accused has failed to prove that at the time of issuing the cheque there was no legal debt or liability to the amount mentioned in the cheque to be paid to complainant company per contra the document produced by the complainant is sufficient to prove that accused has acknowledged the receipt of Ready mix concrete to its projects at Mysore, Mangalore and Vijayawada and has acknowledged the outstanding balance as per Ex.P2 to 4.
21. Accused has produced a ruling reported in :
ILR 2709 M. Senguttuvan v/s Mahadevaswamy NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 138- Offence under-Section 139 -Presumption under- Rebuttal of - Order of acquittal-Appealed against- HELD, that the presumption under section 139 of 39 CC.No.1210/2017 the Act need not be rebutted only by leading defence evidence and the said presumption can be rebutted even on the basis on the facts elicited in the cross
-examination of the complainant as has been done in the present case-Judgment of acquittal is justified.
This ruling is not applicable to the present facts and circumstances of the case since accused has utterly failed to rebut the presumption under sec.139 though he has lead his evidence and produce the document Ex.D1 to Ex.D4 as per the reasons and discussions made above. Further in the instant case no material evidence was elicited by the accused in the cross examination of the complainant to disprove the transaction and outstanding due for the amount mentioned in the disputed cheque so as to apply the dictum of law referred in the ruling.
22. In the cross examination of PW1 accused denied the receipt of legal notice and contended that the said notice has not been received by him. The evidence of 40 CC.No.1210/2017 DW1 regarding the said aspect is as follows:-
"ನರತರ ಪಯರದ ಸರಸಸಯವರನ ನಪ -11 ರರತ ನನಗ ನಕದಟಸ ನದಡದದರನ ಎರದರ ಸಕಯನ ನನಗ ಅರತಹ ಯವದದ ನಕದಟಸಬರದಲಲ ಎರದನ ನನಡಯನತತರ . ನಪ 5 ರಲ ಕಣಸಲದ ನಮಮ ಸರಸಸಯ ವಳಸ ಸರ ಇರನತತದ. ನಪ-5 (ಎ) ನಲ ಕಣಸಲದ ವಳಸ ಸಹ ಸರ ಇರನತತದ. ಅದರರತ ನಪ- 6(ಬ ), ನಪ11 ನಕದಟಸನಲ, ಅರಚ ಸಸದಕಕರ ಪತ ತ ನಪ11(ಎ ) ಮತನತ ನಪ -11(ಬ )ಗಳಲ ಕಣಸಲದ ವಳಸ ನಮಮ ಸರಸಸ ದ ಸದರ ವಳಸಕಕ ಯವದದ ನಕದಟಸ ಬರದಲಲ ಯದ ಆಗದನ ಎರದನ ನನಡಯನತತರ."
From this evidence of the accused it is crystal clear that the address of the accused company that has been mentioned in the legal notice Ex.P11 and in the acknowledgment Ex.P11(a) & 11(b) is not denied by the accused. On perusal of the legal notice Ex.P11 and the acknowledgment Ex.P11(a) and 11(b) it is found that the said notice has been duly served to the accused company and the acknowledgment has been received with the seal and signature of the accused company. It is very pertinent to note that merely denial of the address by the accused in his evidence is not sufficient to prove that he is not residing in the said address. It is a burden of the 41 CC.No.1210/2017 accused to furnish a documentary evidence to show that at the time of the service of the notice Ex.P11 as per the acknowledgment Ex.P11(a) and 11(b) they were not residing in the said address and the notice has been not served due to his mistake. The documentary evidence produced by the complainant the legal notice Ex.P11 and the acknowledgment Ex.P11(a) and 11(b) clearly established that the notice has been sent to the proper address of the accused and inspite of receipt of the said notice accused has not replied the notice nor have made the payment of the due amount.
23. At this juncture on this point regarding service of notice I would like to reproduce the principle and dictum of law laid down by the Hon'ble Apex Court of India in a decision reported in 2007 (3) Crimes 120 (SC) (C.C. Alavi Haji V/s Palapetty Muhammed & Anr), 2007 AIR SCW 3578 (C.C.Avavi Haji v/s Palapetty Muhammed & Anor).
On perusal the said ruling it is found that the Hon'ble Supreme Court held at para- 8 that :
42 CC.No.1210/2017
Sec.138 of the act does not require that the notice should be given only by 'post', yet in a case where the sender as a dispatched the notice by post with correct address written on it, the principle incorporated in section 27 of the General Clause Act 1897 (for short GC Act) could profitably be imported in such a case. It was held that in this situation service of notice is deemed to have been affected on the sendee unless he proves that it was not really served and that he was not responsible for such non service. Further at para -
10 it is held that : The requirement of clause (b) of the provisions of Sec.138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in clause (c) of the said proviso to Sec.138 for payment by the drawer of the cheque. Nevertheless it would be without prejudice to the right of the drawer to show that he had no 43 CC.No.1210/2017 knowledge that the notice are brought to his address.
This ruling is aptly applicable to the present case on the hand since the notice Ex.P11 has been duly served to the accused as per the acknowledgment Ex.P11(a) and 11(b) and inspite of due service of notice he has failed to establish in his evidence that the notice has not been serve to proper address and he has no knowledge that the notice has been served to his address.
24. On appreciation of entire evidence, this Court is of the opinion that the accused has miserably failed to prove the fact that he has not issued cheque for discharge of legally enforceable debt. On the contrary, the complainant has proved that the accused towards discharge of legal recoverable debt issued two cheques Ex.P7 & 8 bearing Nos.002732 dt:16.06.2016 for Rs.40,00,000/- drawn on Karnataka Bank Ltd, Vijayawada & cheque bearing No.000016 dt:17.06.2016 for Rs.25,00,000/- drawn on Bank of Baroda, Jayanagar Branch, Bengaluru in favour of complainant and on presentation for encashment the said cheques were returned as 'Funds 44 CC.No.1210/2017 Insufficient'. Further the complainant has proved that in spite of receipt of legal notice Ex.P11, the accused failed to pay the cheques amount within the statutory period. 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. Accordingly, I answer the above point No.2 in the affirmative.
25. Point No.3:- On appreciation of entire evidence put forth by the complainant it is found that as per the reasons and discussions on point No.1 the complainant has miserably failed to establish that the complainant Sushil Singania, the legal representative Nitin Gupta and the person who has executed Ex.P1 Special Power of Attorney in favour of PW1 by name Sri. Vivek Agarwal were duly authorised as per the resolution passed by the board of directors of the accused company. It is pertinent to note that though the complainant was able to establish that the accused has issued Ex.P7 & 8/cheques towards the legally enforceable debt, but, in view of finding on point 45 CC.No.1210/2017 No.1 as negative that the complainant had no proper authorization as required under law, I proceed to pass the following:
ORDER Acting u/s 264 of Cr.P.C. the accused is hereby acquitted for the offense punishable u/s 138 of N.I. Act.
The Bail bond executed by the accused shall be in force for a period of six months as prescribed Under Sec.437 (a) of Cr.P.C.
(Dictated to Stenographer directly on the Computer, taken print out corrected, signed by me and then pronounced in the open court this the 23 rd day of November, 2020) (ABDUL RAHIM HUSSAIN SHAIKH) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT :
PW1 : Sri. Nitin Gupta LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE:
DW1 : Sri. Raghavendra K.A 46 CC.No.1210/2017 LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P1 : C/c of Power of attorney Ex.P2 : Account extract (Mysore Project) Ex.P3 : Account extract (Mangalore project) Ex.P4 : Balance confirmation letter Ex.P5 : Office copy of the notice dt:7.3.2016 Ex.P5(a) : Postal acknowledgement Ex.P6 : Office copy of the notice dt:23.06.2016 Ex.P6(a) : Postal receipts Ex.P6(b) : Postal acknowledgment Ex.P7 & 8 : Cheques Ex.P9 & 10 : Bank memos Ex.P11 : Legal notice
Ex.P11(a)(b) : Postal acknowledgements Ex.P12 : Complaint Ex.P13 : Company Petition copy No.131/2016 Ex.P14 : Statement of objection filed in company petition No.131/2016 LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:
Ex.D1 : Letter issued by the accused
company to the complainant
dt:10.06.2016
Ex.D2 : C/c of Ledger account pertaining
Mysore project dt:01.04.2015 to
31.03.2016
Ex.D3 : C/c of Ledger account pertaining
to Mangalore project
dt:01.04.2015 to 31.03.2016
Ex.D4 : C/c of Ledger account pertaining
to Vijayawada project
dt:01.04.2015 to 31.03.2016
XXVIII Addl. Chief Metropolitan
Magistrate, Bengaluru.
47 CC.No.1210/2017
48 CC.No.1210/2017