Karnataka High Court
Smt. Rajeshri M G vs Mr. Gayasuddin J on 18 December, 2023
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR
CRIMINAL APPEAL No.1756/2021
BETWEEN:
SMT. RAJESHRI .M.G,
W/O ANIL KUMAR,
AGED ABOUT 32 YEARS,
RESIDING AT FLAT NO.409,
4TH FLOOR, DS MAX SANVILL
APARTMENT, BALAJI LAYOUT,
MALLATHAHALLI,
BENGALURU-560 056.
....APPELLANT
(BY SMT. TAMILARASI .K, ADVOCATE FOR
SRI. VIJAYA KUMAR .K, ADVOCATE)
AND:
MR. GAYASUDDIN .J,
PROPRIETOR,
M/S. G.J. PROJECTS,
HAVING OFFICE AT NO.81/A,
2ND FLOOR, 32ND CROSS,
2ND BLOCK, RAJAJINAGAR,
BENGALURU-560 052
.... RESPONDENT
(BY SRI. V.S. RAVINDRA HOLLA, ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C.
PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND
ORDEROF ACQUITTAL IN C.C.NO.5795/2018 DATED 17.09.2021
PASSED BY THE IV ADDITIONAL SMALL CAUSES JUDGE AND
A.C.M.M., COURT OF SMALL CAUSES(SCCH-6), BENGALURU AND
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ALLOW THE ABOVE APPEAL AND CONVICT THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/UNDER SECTION
N.I.ACT AND COMPENSATE THE APPELLANT/COMPLAINANT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 06.12.2023, COMING ON FOR 'PRONOUNCEMENT
OF JUDGMENT' THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal is filed by the complainant/appellant under Section 378(4) of Cr.P.C. challenging the judgment of acquittal in C.C.No.5795/2018, dated 17.09.2021 passed by IV Additional Small Causes Judge and A.C.M.M., Court of Small Causes (SCCH-6), Bengaluru.
2. For the sake of convenience, the parties herein are referred with the original ranks occupied by them before the trial Court.
3. The brief factual matrix leading to the case are as under:
The accused is the proprietor of M/s. G.J. Projects and was carrying business of formation of layouts and 3 selling sites. He had appointed the complainant as a commission agent to promote his business in the year 2014-2015 and later on appointed the complainant as a marketing manager on 28.08.2015. The accused agreed to pay the commission to the complainant to promote his business. The accused failed to pay the commission amount as agreed by him and subsequently, towards repayment of the said amount, he has issued cheques dated 28.08.2018 bearing No.079681 for Rs.5,00,000/-, cheque bearing No.079682 for Rs.5,00,000/-, cheque bearing No.076983 for Rs.5,00,000/-, cheque bearing No.320734 for Rs.5,00,000/- as well as cheque bearing No.320374 for Rs.5,00,000/-, dated 29.08.2018 drawn on Union Bank of India, Gandinagar Branch, Bengaluru. When the said cheques were presented by the complainant for encashment, the cheques were dishonoured for "insufficient of funds". The complainant 4 has issued a statutory notice to the accused. The said notice was duly served on the accused and he gave a vague reply. Hence, the complainant claims to have filed a complaint under Section 200 of Cr.P.C. against the accused, alleging that he has committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'N.I. Act').
4. The learned Magistrate after recording the sworn statement and after appreciating the documents has taken cognizance for the offence punishable under Section 138 of the N.I. Act and issued a process against the accused. The accused appeared through his counsel and he was enlarged on bail. The plea under Section 138 of the N.I. Act is framed against the accused and he denied the same.
5. The complainant was got examined herself as PW1 and placed reliance on twenty one documents 5 marked at Ex.P1 to Ex.P21. After the conclusion of the evidence of the complainant, the statement of accused under Section 313 Cr.P.C. is recorded to enable the accused to explain the incriminating evidence appearing against him in the case of the complainant. The case of accused is of total denial. He got examined himself as DW1 and placed reliance on ten documents marked at Ex.D1 to Ex.D10.
6. After hearing the arguments and after appreciating the oral and documentary evidence, the learned Magistrate has acquitted the accused only on the ground that the complainant is not registered as real estate agent under Section 9 of the Real Estate (Regulation and Development) Act, 2016 (for short 'RERA Act') in view of the definition under Section 2(m) of the said Act. Though it is held that there is a legally enforceable debt, but since the transaction is hit by the provisions of RERA Act acquitted the accused. Being 6 aggrieved by this judgment of acquittal, the complainant is before this Court by way of this appeal.
7. Heard the arguments advanced by the learned counsel for the appellant and learned counsel for the respondent. Perused the records.
8. The learned counsel for the appellant would contend that there is no serious dispute of the fact that the complainant can be treated as real estate agent and acquittal is only on the ground of she is not registered under Section 9 of the RERA Act. It is submitted that the cheque belongs to the accused and the signature has been admitted. Further, it is admitted that accused has also worked as a commission agent and later on, marketing manager. He would contend that admittedly, the RERA Act came into effect in 2016 and the transaction has taken place prior to the same. Hence, he would contend that provisions of RERA Act are not 7 applicable. It is also asserted that Ex.P13 and Ex.P14 are documents executed by accused and they are in the form of acknowledgement admitting the debt and as such, the issue of limitation also does not come in the way. Hence, he would contend that when the cheques were issued towards repayment of commission, the accused is liable to pay the same and it amounts to legally enforceable liability. He would also contend that accused has taken inconsistent defences and Ex.P13 & Ex.P14 were not disputed and it amounts to continuous liability and hence, the provisions of RERA Act cannot be made applicable to the case in hand. Hence, he would seek for allowing the appeal and convicting the accused/respondent herein.
9. Per contra, the learned counsel for respondent would contend that there are five cheques each of Rs.5,00,000/- and complainant nowhere pleaded the nature of the transaction. He would also 8 contend that transaction is of 2014 & 2015 and cheque was issued in 2018 and debt is time barred as Ex.P13 and Ex.P14 are disputed documents. It is also asserted that in Ex.P14 two cheques referred with Sl.No.733 & 734 are not referred and the defence of accused is that while complainant was working, blank cheques were issued towards payment of bonus to staff and look after administration and they have been misused. Hence, he would contend that the legally enforceable debt is not established and as such, it is sought for dismissal of the appeal.
10. Having heard the arguments and after appreciating the oral and documentary evidence, now the following point would arise for my consideration:
"Whether the judgment of acquittal passed by the trial Court is perverse and arbitrary so as to call for any interference by this Court."9
11. At the outset, the disputed cheques are marked at Ex.P1 to Ex.P5. It is undisputed fact that the said cheques belong to accused and they bear the signatures of the accused. Ex.P11 is the legal notice issued to the accused and service of legal notice is also undisputed. Ex.P12 is the reply notice and in the reply notice, accused has nowhere disputed the status of the complainant. But it is asserted that the cheques were taken by the complainant while working with the accused as marketing manager and for showing the said cheques to her advertisers by way of guarantee and there is no legally enforceable debt. The defence taken by the accused in Ex.P12 is very specific that the cheques were given to show the advertisers by way of guarantee.
12. However, Ex.P13 and Ex.P14 are material documents and signatures on these documents are not disputed by the accused. Even on comparison of 10 signature on vakalath it is evident that they are one and the same. On perusal of Ex.P13 & Ex.P14, it is evident that the cheque numbers referred at Ex.P1 to Ex.P3 are specifically referred there. Further, there the commission, incentive etc., is specifically mentioned. Hence, prima facie there is no dispute of the fact that, the complainant was working under the accused as an agent and later on marketing manager.
13. Accused was examined himself as DW1 and in his examination-in-chief itself, he has admitted that the accused was working as commission agent in 2014 to June 2015 and she worked on commission. He has also admitted that the complainant used to receive Rs.60,000/- monthly salary along with Rs.12,000/- commission for each site registration and she was given a target of registration of 25 to 30 sites per month. However, in the further cross-examination, the accused asserts that from April-2016 last week to May first 11 week he had been to Mecca for pilgrimage. He asserts that in this period he has given complete authority to the complainant to look after the business and towards business promotion and advertisement, he has issued blank cheques to the accused.
14. Apart from that, he further admitted that during October-2016 he has undertaken the work of Sai Residency and provided the blank cheques in Deepavali 2016 towards bonus for executors. These stands are completely inconsistent and contrary. The accused asserts that the cheques were issued while he had been to Mecca in April 2016 and then in Deepavali 2016 towards payment of bonus, but why he has issued blank cheques is not at all explained. The burden is on the accused to rebut the presumption, as the cheques belongs to the accused and that they bear his signature, are admitted. Hence, the presumption under Section 139 of the N.I. Act is in favour of complainant. 12
15. Much cross-examination was made regarding complainant working different projects and details were sought. But accused himself in his examination-in-chief admitted the status of complainant as marketing manager and a commission agent. Hence, cross- examination of PW1 in this regard does not have much relevance in this regard.
16. The accused further admitted that in January- 2018 he has transferred Rs.1,00,000/- by way of account transfer to the complainant and he paid Rs.4,00,000/- by cash. But no such evidence is forthcoming. He has also admitted that the complainant has approached Rajajinagar Police Station, wherein the complainant has demanded Rs.50,00,000/- and it was settled for Rs.25,00,000/-. But he asserts that the settlement was not for Rs.25,00,000/- but for Rs.20,00,000/-. If this version is taken note, then it is 13 evident that the matter was settled for Rs.20,00,000/- and as per his own contention he paid Rs.5,00,000/-. But to substantiate the said contention he has not produced any records.
17. The documents produced by the accused are regarding transaction taken place before the Police and he has not disputed them. On the contrary, he admits that he himself voluntary states that he got it settled for Rs.20,00,000/-. But as per the case of the complainant, it was settled for Rs.25,00,000/-. Further, Ex.P13 and Ex.P14 completely demolish the defence of the accused and accused has not lead any piece of evidence to show that he issued the cheque either to promote his business to show the guarantee to the advertisers or by way of bonus to the other employees. As such, the contention of the accused in this regard cannot be accepted and presumption available in favour of complainant is not rebutted by the accused. 14
18. On perusal of Ex.P13 and Ex.P14, it is evident that they are dated 25.10.2017 and 14.05.2018. Though it is alleged that transaction is of 2014 and 2015, when exactly transactions or commission was due is not explained by the accused, as he is now taking up a new defence on limitation. This defence was not raised before the learned Magistrate and now it is asserted that the transaction is hit by the law of limitation. In that event, the accused is required to prove as to when he was exactly due to pay the amount to complainant. It is a continuing transaction and further, accused being the custodian of all the material records, has not produced any documents to substantiate his contention. Further, Ex.P13 and Ex.P14 clearly establish that it amounts to acknowledgement and hence, the arguments advanced that the claim is barred by law of limitation holds no water at all. Since the accused has raised this issue, it is for him to specify 15 when the amount was specifically due and from that day the limitation begins, but no such evidence is forthcoming. The learned counsel for respondent in this context has placed reliance on a decision of this Court in Crl.RP.287/2015 (S.S. Ramesh VS. K. Lokesh) dated 16.08.2023, but the facts and circumstances of the said case are entirely different and in the said case there was clear evidence that the loan was advanced in 2002 and the cheque was issued in 2007 and hence, the limitation was considered. But no such evidence is forthcoming in the instant case. Hence, the said principles cannot be made applicable to the facts and circumstances of the case in hand.
19. The learned counsel for respondent has further placed reliance on a decision reported in 2023 LiveLaw (SC) 752 (K.Hymavathi Vs. The State of Andhra Pradesh & Anr.). But the facts and circumstances are entirely different and in the instant 16 case, during the trial, the accused has nowhere raised an issue of limitation that the debt is barred by law of limitation and he has not even produced any documents to show that on which particular date the liability has arisen and the claim being barred by law of limitation. Under such circumstances, the principles enunciated in the above cited decision will not come to the aid of the appellant in anyway.
20. The learned counsel for respondent has further placed reliance on decision of Apex Court in 2021 SCC OnLine SC 1044 (Newtech promoters and developers Pvt. Ltd. Vs. State of UP & Ors. Etc.). He invited the attention of the Court to para 31, 32 and 54 and on the basis of this, he would contend that the RERA Act of 2016 is applicable and since complainant is not registered as an agent, question of she enforcing any liability against the accused does not arise at all. But in the said judgment itself in para 17 No.33 it is clearly held that registration of real estate projects become mandatory and without registering the real estate projects with the RERA Authority established under the act, no promoter is required to advertise marketing any plot or apartment or building etc. Admittedly, it is not the complainant who is a real estate agent, but complainant is working under accused as a marketing manager from 2015 as admitted. Unless the accused registers his project, he cannot take advantage of the said Act. Further, the transactions in this case were prior to 2015 and question of applying the provisions of RERA Act does not arise at all. Apart from that, in the said decision, it is mandated that under the said act, the on going project are required to be registered. Further in para No.54, the Apex Court has analyzed and held that the applicability of the Act of 2016 is retroactive in character and it is further observed that the projects already completed or to 18 which the completion certificate has been granted are not under its fold and therefore, the vested or accrued rights if any, in no manner are affected. Admittedly, the accused has taken the projects and it is for him to explain which projects are incomplete and which projects are completed so as to attract the provisions of RERA Act. The accused cannot put a negative onus on the complainant who is working under accused and under such circumstances, the bar under RERA Act will not come to the aid of the accused/respondent herein in any way. As observed above, Ex.P13 and Ex.P14 being undisputed documents, they revive the claim and it is in the form of acknowledgments.
21. In view of these facts and circumstances, the accused cannot escape his liability under the guise of non-registration under the RERA Act and infact when he employed the complainant as marketing manager, he is required to register the project and then he should 19 have asked the complainant to get registered. But instead of doing so he is attempting to take the benefit of RERA Act, which was given effect in 2016. But the complainant's right was accrued prior to 2016. Hence, the provisions under Section 9 of the RERA Act cannot be made applicable to the facts and circumstances of the case in hand.
22. The learned Magistrate has considered all these aspects and has rightly come to a conclusion that the accused is liable to pay a cheque amount to the complainant. But only on the ground of non-registration and in view of the bar under Section 9 of the RERA Act, he acquitted the accused. But however, as observed above, the learned Magistrate has erred in appreciating the provisions of RERA Act and applicability of the RERA Act, in view of the fact that the transactions were of 2014 & 2015, prior to implementation of RERA Act and accused has not disclosed whether the project is 20 completed or not and he would have been the best witness in the given circumstances. He has withheld material evidence in this regard and adverse inference is required to be drawn as against him and he cannot take advantage of his own wrong. As such, the said observation of the learned Magistrate in this regard is erroneous and calls for interference.
23. The cheque amount is for Rs.25,00,000/- and the complainant is fighting the litigation since 2018. The accused having availed the services of the complainant, now instead on paying the due to the complainant, he is taking untenable defence. The cheque was issued towards legally enforceable debt and hence, it is evident that the accused has committed the offence under Section 138 of the N.I. Act.
24. The offence under Section138 of the N.I. Act is punishable with imprisonment, which may extend to 21 two years or with the fine which may extend to double the cheque amount or both. In the instant case, it is exclusively commercial transaction between the parties and hence, imposition of sentence of imprisonment is not warranted. However, the complainant is fighting the litigation since 2018 and she was deprived for benefit pertaining to services rendered by her, though accused utilized her services in order to expand his business. Under such circumstances, looking to the facts and circumstances, in my considered opinion, the accused is required to be imposed with a fine of Rs.40,00,000/- which would serve the purpose and accordingly, the point under consideration is answered in the affirmative. As such, appeal needs to be allowed. Accordingly, I proceed to pass the following:
ORDER
(i) The appeal is allowed.22
(ii) The impugned judgment of acquittal passed by IV Additional Small Causes Court and ACMM, Bengaluru, in C.C.No.5795/2018, dated 17.09.2021, is set aside.
(iii) The accused is held guilty of the offence punishable under Section 138 of the N.I. Act.
(iv) The accused is sentenced to pay a fine of Rs.40,00,000/- (Rupees Forty Lakhs only) for the offence punishable under Section 138 of the N.I. Act and in default of payment of fine, he shall undergo imprisonment for a period of one year.
(v) Out of the fine amount, Rs.39,75,000/-
(Rupees Thirty Nine Lakhs Seventy Five Thousand only) shall be paid to the complainant by way of compensation and Rs.25,000/- (Rupees Twenty Five thousand only) shall be credited to the State.
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(vi) Send back the TCRs to the trial Court with a direction to the learned Magistrate to secure the presence of the accused and collect fine amount or execute default sentence.
Sd/-
JUDGE DS