Bangalore District Court
Sri Niren R. Mehta (Huf) vs M/S. Vijay Steel Tubes & Fittings Pvt on 5 December, 2016
IN THE COURT OF THE XIX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BANGALORE CITY.
Dated this the 5th day of December, 2016
PRESENT: SMT. ISHRATH JAHAN ARA, B.A.L., L.L.B.,
XIX ADDL.C.M.M.BANGALORE.
Case No: CC No.3709/2012
Complainant: Sri Niren R. Mehta (HUF)
Aged about 41 years,
S/o. R.K. Mehta,
R/at No.258, 44th Cross,
9th Main, 5th Block, Jayanagar,
Bengaluru -560 041.
Accused: 1. M/s. Vijay Steel Tubes & Fittings Pvt.
Ltd.,
No.14, 1st Floor, 4th Cross, (Nala Cross)
Lalbagh Road,
Bengaluru -560 027.
Repesented by its authorized
representative,
2. Sri Pankaj D. Sanghvi
C/o. M/s. Vijay Steel Tubes & Fittings
Pvt. Ltd.,
No.14, 1st Floor,
4th Cross, (Nala Cross),
Lalbagh Road,
Bengaluru -560 027.
And also residing at:
Sri Pankaj D. Sanghvi
V-302, Mantri Paradise,
Next to I.I.M., Bannerghatta Road,
Bengaluru -560 076.
3. Sri Himanshu. D. Sanghvi,
M/s. Vijay Steel Tubes & Fittings Pvt.
Ltd., No.14 1st Floor , 4th Cross,
(Nala Cross) Lalbagh Road,
Bengaluru - 560 0 27.
2 CC No.3709/2012
And also residing at:
Sri Himanshu D. Sanghvi
No.1403 & 1404, 14th Floor,
'B' Wing, Mantri Tranquil Apartments,
Kanakapura Road, Gubala Village,
Uttara- Halli,
Bengaluru.
4. Sri Suryakant N. Doshi
M/s. Vijay Steel Tubes & Fittings Pvt.
Ltd.,
No.14, 1st Floor, 4th Cross (Nala Cross)
Lalbagh Road,
Bengaluru - 560 027.
And also R/at
Sri Suryakant N. Doshi,
No.535, 9th Main,
2nd Stage, Siddharth Layout,
Mysore - 570 011.
5. Sri Veerendra N. Doshi,
M/s. Vijay Steel Tubes & Fittings Pvt.
Ltd.,
No.14, 1st Floor, 4th Cross (Nala Cross)
Lalbagh Road,
Bengaluru 560 027.
And also r/at:
Sri Veerendra N. Doshi,
No.706, 7th Floor, Building No.5,
Shanthi Park Apartments,
22nd Main Road, 9th Block,
Jayanagar,
Bengaluru - 560 069.
Offence complained of: U/s.138 of N.I. Act
Plea of accused: Pleaded not guilty
Opinion of the Judge Accused found guilty
Date of order: 5th December 2016
3 CC No.3709/2012
JUDGEMENT
The complainant has filed this complaint u/s. 200 of Cr.P.C. against the accused for the offences punishable u/s. 138 of NI Act.
2. The brief fact of the complaint is that;
The Complainant stated that he is a dealer in steel products and likewise, accused are also dealers in steel products and as such, the Complainant and accused are known to each other as both of them are traders of the same business. The accused No.2 to 5 approached the Complainant by stating that they are the Directors of the accused No.1 and they required immediate financial assistance for development of their business and requested for the hand loan amount. The Complainant by considering the request of the accused persons, had advanced a sum of Rs.24,00,000/- by way of cheque bearing No.646422 dtd.6.8.2010 drawn at Indian Overseas Bank and the said sum would be paid by the accused in twelve equal installments of Rs.2,00,000/- each with interest at 1% per month. After receipt of the loan amount, the accused No.2 and 3 had executed a Promissory Note in favour of the Complainant by acknowledging the debt and also issued 12 post- dated cheques bearing Sl.No.942483 to 942494 dtd.10.9.2010 to 10.8.2011 respectively each for Rs.2,00,000/- all are drawn at Indian Overseas Bank and also issued a cheque for a sum of Rs.2,59,200/- towards the interest and promised to deduct the Income Tax at source 4 CC No.3709/2012 being a sum of Rs.28,800/- and consequently issued TDS certificate with a request to present the cheques for encashment on its due dates and it will be honoured on its presentation.
3. It is further submitted that the accused have honoured the first two installments cheques and thereafter defaulted the honouring of the remaining payment cheques in respect of cheque bearing No. 942486, 942487, 942488, 942489, 942490, 942491, 942492 and 945013 and subsequently the Complainant got issued the Demand Notice on 28.6.2011 and thereafter filed a complaint before 16th A.C.M.M. Court registered as PCR No.21176/2011. The Complainant further stated that in respect of two cheques bearing No.942493 and 942494 dtd. 10.7.2011 and 10.8.2011 for Rs.2,00,000/- each both drawn at Indian Overseas Bank were presented by this Complainant before his banker on 17.8.2011 for encashment but both the cheques were dishonoured for the reason "Insufficient Funds" on 18.8.2011 and 19.8.2011 respectively and the same was intimated to the accused persons.
4. The Complainant further stated that as the accused have failed to make payment of the Cheques amount, therefore the Complainant got issued the Legal Notice on 6.9.2011 through RPAD, calling upon all the Accused persons to pay the Cheques amount within 15 days from the date of receipt of Legal Notice and the said 5 CC No.3709/2012 notice was duly served on all the accused persons. The accused even inspite of receipt of Legal Notice, have neither chosen to make payment of the cheques amount nor they have replied the notice by denying the transaction. The Accused knowing fully well that they have no sufficient funds in their bank account, had issued their bogus Cheques and thereby accused have committed an offence punishable under Section 138 of N.I. Act.
5. After recording of sworn statement of the complainant, the Private Complaint lodged by the complainant was registered as a Criminal Case, summons was issued as against the accused. The accused No.1 to 5 have appeared through their Counsel and they were enlarged on bail. Plea of accusation was read over to the accused persons. All the accused persons pleaded not guilty and claims to be tried.
6. The Complainant got examined himself as PW1 and he got produced 26 documents marked as Ex.P.1 to Ex.P.26 and closed his side of evidence.
7. After closure of the complainant side evidence, accused Statement u/Sec.313 of Cr.P.C. recorded and read over to all the accused persons. The accused have denied the incriminating evidence in toto. The accused have not led any evidence from their side. 6 CC No.3709/2012
8. I have heard the arguments appearing for both the parties. I have perused the entire records.
9. The only point arise for my consideration is:
1. Whether the Complainant has proved the guilt of the accused u/s 138 of N.I.Act beyond all reasonable doubts?
2. What order?
10. My findings to the above point are as under:
Point No.1 : In the Affirmative
Point No.2 : As per final order
for the following:
REASONS:
11. Point No.1: The entire burden is on the complainant to prove his case and also to prove the above point. In order to prove the same, the complainant stepped into the witness box, got examined as PW-1 and he filed his affidavit in lieu of the oral evidence by reiterating the complaint averments.
12. PW1 deposed that he and the accused are the dealers in steel products and as such, they known to each other as both of them are traders of the same business and accordingly, the accused No.2 to 5 approached him by stating that they are the Directors of the accused No.1 and they required immediate financial assistance for development of their business and requested for the hand loan amount and borrowed a sum of Rs.24,00,000/- by way of cheque bearing No.646422 dtd.6.8.2010 drawn at Indian Overseas Bank and 7 CC No.3709/2012 the said sum would be paid by the accused in twelve equal installments of Rs.2,00,000/- each with interest at 1% per month. He deposed that after receipt of the loan amount, the accused No.2 and 3 had executed a Promissory Note in his favour by acknowledging the debt and also issued 12 post-dated cheques bearing Sl.No.942483 to 942494 dtd. 10.9.2010 to 10.8.2011 respectively each for Rs.2,00,000/- all are drawn at Indian Overseas Bank and also issued a cheque for a sum of Rs.2,59,200/- towards the interest and promised to deduct the Income Tax at source being a sum of Rs.28,800/- and consequently issued TDS Certificate with a request to present the cheques for encashment on its due dates and it will be honoured on its presentation.
13. He further deposed that the accused have honoured the first two installments cheques and thereafter defaulted the honouring of the remaining payment cheques in respect of cheque bearing No. 942486, 942487, 942488, 942489, 942490, 942491, 942492 and 945013 and subsequently he got issued the Demand Notice on 28.6.2011 and thereafter filed a complaint before 16th A.C.M.M.. Court registered as PCR No.21176/2011. He deposed that in respect of two cheques bearing No.942493 and 942494 dtd.10.7.2011 and 10.8.2011 for Rs.2,00,000/- each both drawn at Indian Overseas Bank were presented by him before his banker on 17.8.2011 for encashment but 8 CC No.3709/2012 both the cheques were dishonoured for the reason "Insufficient Funds" on 18.8.2011 and 19.8.2011 respectively and the same was intimated to the accused persons.
14. He further deposed that as the accused have failed to make payment of the Cheques amount, he got issued the Legal Notice on 6.9.2011 through RPAD, calling upon all the Accused persons to pay the Cheques amount and the said notice was duly served on all the accused persons. He deposed that the accused even inspite of receipt of Legal Notice, have neither chosen to make payment of the cheques amount nor they have replied the notice by denying the transaction. He deposed that the Accused knowing fully well that they have no sufficient funds in their bank account, had issued their bogus Cheques and thereby accused have committed an offence.
15. PW1 in order to prove his case, got produced two original cheques issued by the accused marked as Ex.P1 and Ex.P2. He deposed that the signature found on Ex.P1 and Ex.P2 is that of the accused and he got identified the signature found on the cheques marked as Ex.P1(a) and Ex.P2(a). He got produced the bank endorsement marked as Ex.P3. He got produced the On Demand Promissory Note and Consideration Receipt executed by the accused persons marked as Ex.P.4 and Ex.P5 respectively. He got identified by the signature of the accused found on Ex.P4 and Ex.P5 documents, 9 CC No.3709/2012 marked as Ex.P.4(a) and Ex.P5(a). He got produced the copy of the legal notice along with 9 RPAD receipts marked as Ex.P6 to Ex.P15 respectively. He got produced the 7 Postal Acknowledgement Due Cards for having served the notice to all the accused marked as Ex.P.16 to Ex.P22 respectively. He got identified the complaint marked as Ex.P.23. He got produced two PAN Cards issued by the Income Tax Department in his personal name as well as a Head of the HUF marked as Ex.P24 and Ex.P25 respectively. He got produced the Driving Licence issued by the Transport Department in his name marked as Ex.P.26.
16. Even though the accused have denied the case of the Complainant and denied the very fact that they have issued their Ex.P1 and Ex.P2 cheques in favour of this Complainant towards discharge of the loan amount and both their cheques were dishonoured on its presentation for encashment and accordingly, they were liable to pay the cheques amount. However, the accused have not chosen to deny the loan transaction and even they have not denied the fact that they have borrowed the loan from this Complainant for improvement of their business by way of cheque. The learned Counsel for the accused subjected PW1 for cross-examination and he extensively cross-examined PW1.
10 CC No.3709/2012
17. Though much has been put to PW1 during his cross- examination by denying his testimony with respect to issuance of cheques by these accused persons in his favour towards the repayment of the loan amount and also denied their liability to pay the cheques amount. However, PW1 in his cross-examination categorically deposed that the accused being the Directors of accused No.1 - Company approached him for the loan amount on 1.8.2010 and on the request of the accused persons, he advanced the loan amount after about one week of the request. He further deposed that the accused persons have requested him to advance a sum of Rs.50,00,000/- however, he advanced a sum of Rs.24,00,000/- by way of cheque and the same was encashed by the accused persons on 6.8.2010. PW1 further stated that after acknowledgement of the debt, the accused persons have executed On Demand Promissory Note and Consideration Receipt in his favour and subsequently they issued Ex.P1 and Ex.P2 cheques in his favour towards repayment of the loan amount. PW1 denied the suggestion that he himself for his convenience, written all the contents of Ex.P1 and Ex.P2 cheques by misusing the duly signed blank cheques of the accused.
18. Though much has been put to PW1 during his cross- examination by denying the financial transaction and also issuance of cheques by these accused persons. However, the accused have 11 CC No.3709/2012 categorically admitted the fact that the Ex.P1 and Ex.P2 cheques were belong to them and also admitted their signature found on Ex.P1 and Ex.P2 marked as Ex.P.1(a) and Ex.P2(a). The accused have admitted that they are all business persons having Steel Trading Business and they are all well-educated persons. The accused except putting some suggestions to PW1 by denying his testimony that they have not issued their Ex.P1 and Ex.P2 cheques towards repayment of the loan amount and even they are not liable to pay the cheques amount, which has been categorically denied by PW1, has failed to elicit any fruitful information regarding the custody of their cheques in the hands of PW1. Admittedly, the accused have not put forth any defence before this court how their duly signed cheques came into the hands of this Complainant and under what circumstances, they had issued their Ex.P1 and Ex.P2 cheques.
19. Even though a suggestion was put to PW1 that they have issued their duly signed blank cheques in his favour and subsequently, he with an intention to make a wrongful gain for himself from these accused and to cause monetary loss to the accused persons, created the cheques as Ex.P1 and Ex.P2 and for his convenience and based on the created cheques, presented the cheques for encashment. However, PW1 in his cross-examination denied the entire suggestions put to him 12 CC No.3709/2012 and denied that the accused were not liable to pay the cheques amount.
20. The accused during the cross-examination of PW1, denied their liability to pay the total cheques amount of Rs.4,00,000/-. He further denied the suggestion that the accused have not issued their Ex.P1 and Ex.P2 cheques towards repayment of the loan amount. He denied the suggestion that he himself for his convenience, written all the contents of the cheques and presented the cheques for encashment even though the accused have not instructed him to present the cheques for encashment.
21. The accused except putting some suggestions to PW1 during his cross-examination that they are not liable to pay the cheques amount, nothing has been elicited from his mouth to disbelieve his testimony or to discard his evidence. As I have discussed supra, the accused have failed to convince this court how their duly signed cheques came into the hands of this Complainant and under what circumstances, they have issued their signed cheques.
22. The accused even did not chosen to deny a fact that their Ex.P1 and Ex.P2 cheques were bounced on its presentation for encashment with a specific reason "funds insufficient". The accused even did not chosen to deny a fact that their Ex.P1 and Ex.P2 cheques 13 CC No.3709/2012 were produced before this court by PW1. Admittedly, there is no defence from the side of the accused and even they have not suggested to PW1 how their duly signed cheques came into the hands of this PW1. Likewise, the accused have not chosen to deny the execution of Ex.P4 and Ex.P5 documents in favour of PW1. However, PW1 categorically deposed that the accused after receipt of loan amount by acknowledging the receipt of the loan amount, had executed Ex.P4 and Ex.P5 documents in his favour and they have put their signature to Ex.P4 and Ex.P5 documents as per Ex.P4(a) and Ex.P5(a). These facts were not denied by the accused. No suggestion was put to PW1 either by denying the execution of Ex.P4 and Ex.P5 documents or by denying their signature found on the said documents marked as Ex.P.4(a) and Ex.P5(a).
23. Likewise, the accused have not chosen to deny the documentary evidence produced by the PW1 before this court marked as Ex.P.1 to Ex.P26. The accused have not chosen to deny a fact that immediately after the receipt of Ex.P3 bank endorsement, the Complainant got issued Ex.P6 notice and the same was duly served upon the accused as per Ex.P16 to Ex.P22. The accused have not chosen to deny the testimony of PW1 either with respect to issuance of Ex.P6 notice or with respect to service of notice. The accused have not chosen to deny their address either disclosed in Ex.P6 notice or in 14 CC No.3709/2012 Ex.P16 to Ex.P22 documents. No suggestion was put to PW1 either by denying the issuance of Ex.P6 notice to their correct address or receipt of Ex.P6 notice. These facts clearly prove that even though the address disclosed in Ex.P16 to Ex.P22 is relating to these accused and they have personally received the notice.
24. As I have discussed supra, the accused except denying the transaction and also by denying the issuance of cheques towards the repayment of the loan amount, have failed to convince the court why they have issued their Ex.P1 and Ex.P2 duly signed cheques in favour of this Complainant and what made them to issue their cheques. However, PW1 has deposed that the accused even after receipt of the Legal Notice issued as per Ex.P6, have neither chosen to make payment of the cheques amount nor they have sent their reply by denying the transaction and also by denying the contents of the notice.
25. The oral and documentary evidence adduced before this court by the Complainant clearly proves that the accused even inspite of receipt of Legal Notice, have failed to make payment of the cheques amount. In such situation, an adverse inference has to be drawn against the accused that the accused after receipt of Legal Notice by admitting the contents of Ex.P6 notice, did not resisted the claim of the Complainant.
15 CC No.3709/2012
26. The PW1 by adducing oral and documentary evidence before this court, proved that the notice issued u/Sec.138 (b) of N.I. Act was served on these accused and these accused have personally received the notice but they did not resisted the claim of the Complainant. Admittedly, the entire burden is on these accused to rebut the case of the Complainant and also to rebut the presumption available to this Complainant u/Sec.139 of N.I Act.
27. The accused in order to prove their defence and to rebut the presumption available to this Complainant u/Sec.139 of N.I. Act, have not chosen to lead their evidence from their side. As I have discussed supra, even after receipt of Legal Notice as per Ex.P6, the accused have not even sent their reply by denying the contents of the notice. These facts clearly prove that the accused only for the sake of defence during the stage of trial, have taken up the false defence before this court that their cheques were misused by this Complainant and created the cheques for Rs.2,00,000/- each and filed this false complaint.
28. As I have discussed supra, admittedly, there is no defence from the side of these accused. As I have discussed supra, PW1 in his cross-examination categorically denied the entire suggestions put to him and denied that the accused are not liable to pay the cheques amount. The accused have utterly failed to prove their defence by 16 CC No.3709/2012 adducing cogent and convincing evidence before this court. The accused have utterly failed to rebut the presumption available to this available to the Complainant u/Sec.139 of N.I. Act
29. The entire burden is on these accused to prove that their duly signed cheques were misused by this Complainant and created the same as Ex.P1 and Ex.P2 for the amount of Rs.2,00,000/- each. The accused have utterly failed to prove their defence to the satisfaction of the court by adducing cogent and convincing evidence before this court. In such situation, the defence taken by the accused during the course of trial, cannot be believable and acceptable. Likewise, the Accused have utterly failed to rebut the presumption available to this Complainant u/Sec.118 and also u/Sec.139 of N.I. Act it reads thus respectively.
30. As per the provisions of Sec.118, which reads thus:
a. Of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
b. As to date - that every negotiable instrument bearing a date was made or drawn on such date; c. As to time of acceptance - that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;17 CC No.3709/2012
d. As to time of transfer - that every transfer of a negotiable instrument was made before its maturity;
e. As to order of endorsements - that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
f. As to stamps - that a lost promissory note, bill of exchange or cheque was duly stamped; g. That holder is a holder in due course - that the holder of a negotiable instrument is a holder in due course;
31. Likewise, the accused also failed to rebut the presumption available to this Complainant u/s.139 of N.I. Act which reads:
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
32. The learned Counsel for the Complainant has vehemently argued that the Complainant before filing of this complaint, has followed all the procedures prescribed u/Sec.138 of N.I. Act and these Accused even after receipt of the Legal Notice, have neither chosen to make payment of the cheques amount nor they have sent their reply by denying the transaction and therefore, by drawing an adverse inference against these Accused, the Accused have to be convicted in accordance with law, is fully convinced this court. He has arguments that the notice issued as per Ex.P6 was duly served on these accused as 18 CC No.3709/2012 per Ex.P16 to Ex.P22 and even after receipt of Legal Notice, the accused have neither chosen to comply the notice by paying the cheques amount nor they have sent their reply by denying the transaction and their liability to pay the cheques amount. His arguments is fully convinced this court. .
33. Likewise, his arguments that the accused only with an intention to ran away from their liability to make payment of the cheques amount, have taken up the false defence during the stage of cross-examination of PW1 that they have not issued their Ex.P1 and Ex.P2 cheques towards repayment of the loan amount. The arguments canvassed by the learned Counsel for the Complainant, is fully convinced this court.
34. On the contrary, the arguments canvassed by the learned Counsel for the accused that there is no burden is on these accused to prove their defence beyond all reasonable doubts and these accused can very well discharge their burden by preponderance of probabilities and these accused persons by cross-examining PW1, have successfully rebutted the presumption available to this Complainant u/SEc.139 of N.I. Act and by considering all these facts and evidence available on record, the accused have to be acquitted for the offence 19 CC No.3709/2012 punishable U/Sec.138 of N.I. Act, is not convinced this court and it holds no merit.
35. As I have discussed supra, the accused have utterly failed to convince this court what made them to issue their Ex.P1 and Ex.P2 cheques and under what circumstances, they have issued their cheques in favour of Complainant. In such situation, mere suggestion to PW1 during his cross-examination is itself will not rebut the presumption available to this Complainant u/Sec.139 of N.I.Act. Therefore, the arguments canvassed by the learned Counsel for the accused, cannot be acceptable and it holds no merit.
36. The complainant by adducing oral and documentary evidence before this court, has proved the guilt of the accused beyond all reasonable doubt. There is no whatsoever doubt in the mind of court about the case of the complainant. The oral and documentary evidence adduced before this court by the complainant, is fully corroborating with each other and convinced this court about his case. The complainant by adducing oral and documentary evidence before this court, bring home the guilt of the accused beyond all reasonable doubt. Therefore, by taking into consideration the facts and circumstances and evidence available on record, I answer this Point No.1 in affirmative.
20 CC No.3709/2012
37. Point No.2. In view of my findings on the above point and the reasons stated therein, I proceed to pass the following:
ORDER Acting u/Sec.255 (2) of Cr.P.C., the accused No.1 to 5 are hereby convicted for the offence punishable u/Sec. 138 of N.I. Act.
The accused No.1 to 5 are jointly and severally sentenced to pay a fine of Rs.4,75,000/-(Rupees Four Lakhs and Seventy-five Thousand only). In any default to pay fine amount the accused No.2 to 5 shall undergo simple imprisonment for 6 months separately.
Out of fine amount recovered under Section 357 of Cr.P.C., a sum of Rs.4,70,000/- (Rupees Four Lakhs and Seventy Thousand only) shall be paid to the complainant which includes the cheques amount and also cost of the proceedings. Remaining fine amount of Rs.5,000/- shall be forfeited to State.
The bail bond and surety bond of the accused stands cancelled.
Office to furnish free copy of the judgement to the accused forthwith.
(Dictated to the Stenographer, transcript thereof is computerized and print out taken by her is verified and then pronounced by me in the Open Court on this the 5th day of December, 2016) (ISHRATH JAHAN ARA) XIX ADDL.C.M.M., Bengaluru.21 CC No.3709/2012
ANNEXURE:
Witnesses examined on behalf of the Complainant:
PW.1 Mr. Niren R. Mehta Witnesses examined on behalf of the Accused: Nil
Documents marked on behalf of the Complainant:
Ex.P.1 & Ex.P2 Cheques
Ex.P.1(a) & Ex.P2(a) Signature of the Accused
Ex.P.3 Bank endorsement
Ex.P.4 & Ex.P5 On Demand Promissory Note & Consideration Receipt
Ex.P4(a) & Ex.P5(a) Signature of the accused
Ex.P.6 Copy of the Legal Notice
Ex.P.7 to Ex.P15 RPAD Receipts
Ex.P.16 to Ex.P22 Postal Acknowledgement Due Cards
Ex.P.23 Complaint
Ex.P.24 & Ex.P25 PAN Cards
Ex.P.26 Driving Licence
Documents marked on behalf of the Accused:
Nil
XIX ACMM, B'lore.
22 CC No.3709/2012