Bangalore District Court
Dairy Classic Ice Creams Pvt. Ltd vs Shri. V. Krishnasamy on 28 August, 2024
C.C.NO.15681/2020
0
KABC030570852020
Presented on : 20-11-2020
Registered on : 20-11-2020
Decided on : 28-08-2024
Duration : 3 years, 9 months, 8 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 28th DAY OF AUGUST-2024
C.C.NO.15681/2020
Complainant: Dairy Classic Ice Creams Pvt.,Ltd.,
A Private Limited Company incorporated
under the companies act and having
its Registered office at No.55, 8th Main,
J.C.Industrial Estate, Yelachenahalli,
Kanakapura Road, Bangalore-560062.
R/by Shri.Myluswamy.
(By Sri.Dinesh S.Kadlas and Associates.,)
V/s
Accused: Shri.V.Krishnaswamy,
Proprietor of Raghvenk Industries,
Having its Head office at 2,
Second Street, Co-operative colony,
Mettupalyam, Pin-641301.
Also at: No.156, West Sambandam Road,
R.S.Puram, Coimbatore. Pin-641002.
C.C.NO.15681/2020
1
Also at: No.3, Vilankurichi Road,
Ganapathy Manager, Coimbatore-641006.
Also at: 117. 4th Street,
Ponnaiya Rajapuram, Coimbatore.
Pin-641001.
(By Sri.J.Hudson Samuel.,Adv,.)
:JUDGMENT:
This case arises out of the complaint filed by the complainant against the accused under section 200 of Cr.P.C,. for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant are in the business of manufacturing and marketing of Ice creams and Frozen dessert products and the accused has been working as one of the distributor for the supply of the complainant's Ice creams and Frozen Desserts Products in Coimbatore and surrounding areas. Further stated that the business transaction with the accused started in the month of March 2017. The complainant gave maximum support to the accused for the business. The complainant has supplied goods to the accused on credit basis from time to time to the tune of Rs.12,52,00,000/- as against which a sum of Rs.5,56,71,208/- is outstanding and payable by the accused to the complainant, as on date. After several follow-ups and reminders by the complainant to clear the C.C.NO.15681/2020 2 outstanding amount, the accused had issued the cheque No.011226 dated: 07.12.2019 for Rs.5,56,71,208/- drawn on Kotak Mahindra Bank, Skanda Square, 727 Avinashi Road, Coimbatore-641018. As per the assurance of the accused the complainant had presented the said cheque for encashment through its banker Bank of India, J.P.Nagar Branch, Bangalore-78. But on 09.12.2019 the said cheque was dishonored as 'Account Blocked situation covered in 2125'. Thereafter, on 23.12.2019 the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. The said notice was acknowledged by the accused and other two address legal notice sent by way of RPAD has returned back with a sharas "door locked" and "No such addressee. After service of the notice the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 05.02.2020.
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R No.4125/2020. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was C.C.NO.15681/2020 3 passed on 19.11.2020 to register the case in Register No.III.
4. Thereafter, summons was issued to the accused and he has appeared before the court through his counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and make a defence.
5. The complainant in support of its case, have examined its Accounts Manager as PW.1 and got marked 23 documents at Ex.P.1 to 23 and the complainant have examined the Chief Manager, Bank of India, J.P.Nagara Branch as PW.2 and got marked 02 documents at Ex.P.24 and 25 and closed its side.
6. After closer of the evidence of the complainant, the statement of the accused under section 313 of Cr.P.C., was recorded. He denied the incriminating evidence appearing against him. In his defence the accused examined himself as DW.1 and 15 documents were marked at Ex.D.2 to 16. During the cross examination of PW.1 02 documents were marked at Ex.D.1 and 2.
7. The documents produced by the Kotak Mahindra Bank marked court documents at Ex.C.1 to 6.
C.C.NO.15681/2020 4
8. I have heard the arguments on both the sides and perused the written argument submitted by the learned counsel for the complainant and also perused the material placed on record.
9. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2. Whether the complainant further proves that the accused had issued the cheque-Ex.P.13, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that cheque-Ex.P.13 was dishonored for the reason "Account Blocked Situation covered in 2125" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
10. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
C.C.NO.15681/2020 5 :REASONS:
11. POINT NO.1 AND 2: These points are inter- related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken both points together for common discussion. The complainant are in the business of manufacturing and marketing of Ice creams and Frozen dessert products and the accused has been working as one of the distributor for the supply of complainant's Ice creams and Frozen Desserts Products in Coimbatore and surrounding areas. Further the business transaction with the accused started in the month of March 2017. The complainant has supplied goods to the accused on credit basis from time to time to the tune of Rs.12,52,00,000/- as against which a sum of Rs.5,56,71,208/- is outstanding, as on date. After several follow-ups and reminders by the complainant to clear the outstanding, the accused had issued the cheque in question. As per the assurance of the accused the complainant had presented the said cheque for encashment through its banker. But the said cheque was dishonored as 'Account Blocked situation covered in 2125'. Thereafter, the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon him to pay the cheque amount within 15 days from the date of receipt of the said C.C.NO.15681/2020 6 notice. After service of the notice the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
12. At this juncture, it is necessary to go through the provisions of N.I.Act before proceeding further. The provisions under Section 118(a) and 139 of the Act., 1881 are extracted and they reads thus;
"118. Presumptions as to negotiable instruments:- Until the contrary is proved, the following presumptions shall be made:-
(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 date was made or drawn on such date;
"139.Presumption in favour of holder:-
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."
C.C.NO.15681/2020 7
13. On plain perusal of the provisions under Section 118(a) and 139 of the N.I.Act., as extracted herein above, it can be seen that initially the presumptions constituted under these two provisions favour the complainant. However, it is open to an accused to raise a defence to rebut the statutory presumptions. An accused can raise a defence, wherein the existence of legally enforceable debt or liability can be contested.
14. It is also well established that an accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has constitutional rights to maintain silence. Standard of proof on part of the accused and that of the prosecution in a Criminal case is different. The prosecution must prove the guilt of an accused beyond all reasonable doubts, the standard of proof so as to prove a defence on the part of an accused is "Preponderance of probabilities".
15. Under the light of above extracted provisions of the Act, I have perused the oral and documentary evidence on record. In support of the case, the complainant have examined its Accounts Manager as P.W.1 and 23 documents were marked at Ex.P.1 to 23. In the chief examination P.W.1 has repeated the C.C.NO.15681/2020 8 contents taken by the complainant in the complaint. The complainant's have also examined the Chief Manager, J.P.Nagar Branch as PW.2 and 02 documents were marked at Ex.P.24 and 25. In the chief examination P.W.2 has deposed regarding issuance of bank memo as per Ex.P.14. Further deposed that due to oversight and rush of work they have not put seal and signature on the memo. He has produced bank memo along with bank statement of the accused. Ex.P.1 is the Authorization. Ex.P.2 is the computerized copy of summary invoice out standing. Ex.P.3 to 7 are the computerized copies of account statements for the period 01.04.2016 to 31.03.2017, 01.04.2017 to 30.03.2018, 01.04.2018 to 31.03.2019 and 01.04.2019 to 30.09.2019 respectively. Ex.P.8 is the balance confirmation. Ex.P.8(a) is the ledger account related to Ex.P.8. Ex.P.9 is the the complainant sent computerized copy of e-mail dated: 03.10.2018 to the accused company. Ex.P.10 is the accused company given the reply to the complainant company. Ex.P.11 is the complainant sent computerized copy of e-mail dated: 16.05.2019 to the accused company. Ex.P.12 is the accused company sent a email dated: 27.05.2019 and attached the document of account statement and balance confirmation. Ex.P.13 is the cheque in question issued by the accused in favour of the complainant on 07.12.2019 for Rs.5,56,71,208/-. Ex.P.13(a) is the C.C.NO.15681/2020 9 signature of the accused. Ex.P.14 the bank memo dated: 09.12.2019 informing of the dishonor of the cheque as "Account blocked situation covered in 2125". Ex.P.15 is the office copy of the legal notice dated:
23.12.2019. Ex.P.15(a) to 15(d) are the postal receipts.
Ex.P.16 and 17 are the returned legal notices. Ex.P.16(a) to 17(a) are the returned postal covers. Ex.P.18 and 19 are the postal acknowledgments. Ex.P.20 is the complaint. Ex.P.21 is the certificate under section 65(b) of Indian Evidence Act. Ex.P.22 is the certified copy of the incorporation certificate of the complainant company. Ex.P.23 is the certificate under section 65(b) of Indian Evidence Act. Ex.P.24 is the bank endorsement related to Ex.P.14. Ex.P.25 is the bank statement. (Ex.P.22 to 25 are marked subject to objection of the defence counsel).
16. I have perused the exhibits on which the complainant have placed their reliance. On perusal of the exhibits, it is clear that cheque in question was presented for encashment within its validity. The bank endorsement with a shara "Account blocked situation covered in 2125". The complainant issued the legal notice within one month from the date of receipt of memo. The two addresses of the accused notices were duly served and two addresses notices were returned as "door locked" and "No such addressee". The complaint was filed on 05.02.2020, which is within C.C.NO.15681/2020 10 limitation. The transaction with the complainant is not seriously disputed. The issuance of the cheque and the signature on the cheque at Ex.P.13 is admitted. Therefore, the documents on record clearly show that the complainant have complied the ingredients of section 138(a) to (c) of the N.I.Act. Therefore the presumptions under section 118 and 139 of the N.I.Act arise in favour of the complainant. The presumptions are rebuttable and the burden is on the accused to rebut the presumptions. The presumption is that the cheque was issued for legally enforceable debt/liability. However actual existence debt/liability can be contested. The accused can rebut the presumptions by raising probable defences and proving it relying on the evidence of the complainant or by leading his direct evidence.
17. The case was seriously contested by the accused and the service of notice was disputed. The notice was not served on the accused. It was returned with a shara '"door locked" and "No such addressee'. The accused also denied the service of notice. The counsel for the accused has submitted in respect of non service of notice. Further contended that the notice sent to the accused not served'; that the accused has no knowledge of the notice as it was not served on him; that the accused did not give reply notice as the notice was not served on him; that he did not produce any C.C.NO.15681/2020 11 documents to show that the accused was not residing and doing business at the said addresses and that the accused did not issue reply notice as he was not residing and doing business at the said addresses. The counsel for the accused argued that no legal presumption can be raised as the notice was sent to the wrong address. On the other hand, the counsel for the complainant has submitted that in respect of address of the accused, service of notice. When the notice at Ex.P.15, wherein the name of accused is appearing, was confronted.
18. On perusal of Ex.P.15, it is clear that the name of the accused is appearing in the notice. The same notice was sent to the accused in his all addresses. The accused not given reply. There is no evidence on record to show that the accused was residing and doing business at some other address other than the address mentioned in the notice at Ex.P.15. The above discussion clearly shows that the address mentioned in the notice is the correct address of the accused, the presumption as per section 27 of General Clauses Act can be drawn. It states that the notice sent through post shall be deemed to be served, if it is properly addressed to a person to whom it is sent. Therefore, even though the notice sent to the accused through RPAD in two address notices were duly served and two C.C.NO.15681/2020 12 addresses notices were returned with a postal shara "door locked" and "No such addressee", it is to be considered as deemed service of notice. Even otherwise as per the Judgment of the Hon'ble Supreme Court of India in Crl.Appeal No.767 of 2007 (Arising out of SLP (Crl) No.3910 of 2006 between CC Alavi Haji Vs. Palapetty Muhammed and another decided on 18.5.2007, wherein it has been held by the Hon'ble Supreme Court of India para No.17 as under;
17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint U/s.138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint u/s.138 of the Act, cannot obviously contend that there was no proper service of notice as required u/s.138, by ignoring statutory presumption to the contrary u/s.27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (supra), if the 'giving of notice' in the context of Clause (b) of the proviso was the same as the 'receipt of notice' a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different C.C.NO.15681/2020 13 strategies and escape from legal consequences of Section 138 of the Act.
19. In a nutshell it can be said that the statutory notice is an opportunity given to the accused to make payment and avoid the consequences of 138 of N.I.Act. In the case on hand, the summons was duly served on accused and he appeared through his counsel. The accused appeared before the Court and contested the case by taking all probable defences. Therefore he cannot take the shelter of statutory requirement of service of notice to avoid the consequences of section 138 of N.I.Act. The complaint was filed on 05.02.2020, which is within limitation. The accused admitted the issuance of cheque in favour of the complainant and signature in the cheque. It is his defence that he had given 20 signed blank cheques to the complainant in the month of March 2019. Therefore, the documents on record clearly show that the complainant have complied the ingredients of section 138(a) to (c) of the N.I.Act. Therefore the presumptions under 118 and 139 of the N.I.Act arise in favour of the complainant. The presumptions are rebuttable and the burden is on the accused to rebut the presumptions. Once the issuance of cheque and signature are proved, the presumption arises in respect of the fact that the cheque was issued for legally enforceable debt/liability. The accused can rebut the presumption by raising probable defence and C.C.NO.15681/2020 14 proving it relying on the evidence of the complainant or by leading his direct evidence.
20. In order to prove his defence, the accused is examined himself as DW.1 by way of affidavit and 15 documents were marked at Ex.D.2 to 16. In his chief examination affidavit he has repeated the defence taken by him. During the cross examination of PW.1 02 documents were marked at Ex.D.1 and 2. Ex.D.1 is the e-mail sent by one of the director of the complainant company Mr.M.N.Jagannath to the accused company. Ex.D.2 is the e-mail reply given by the accused. Ex.D.2 is the cheque book counter foil. Ex.D.3 is the Master facility agreement dated: 04.01.2017. Ex.D.4 is the outstanding invoice from 2017 to 2019. Ex.D.5 is the e- mail dated: 06.04.2022 in attach dated:01.01.2019 to 31.12.2019 the Kotak Mahindra Bank, Avinashi road Branch, Coimbatore related to the account statement marked subject to objection. Ex.D.6 is the certificate under section 65(b) of Indian Evidence Act. Ex.D.7 is the Bank statement from 01.04.2017 to 31.04.2017. Ex.D.8 is the GSTR-2 showing the records of purchase made by the accused from the registered supplier between 04.07.2017 to 28.03.2018 along with e-mail dated:
06.04.2023. Ex.D.9 is the GSTR from July 2017 to July 2018 showing the details of outward supplies of goods of service made by the accused along with e-mail dated:
C.C.NO.15681/2020 15 31.03.2023. Ex.D.10 is the GSTR-3B from July 2017 to March 2018 showing details of monthly taxes paid to the Commercial Tax Department along with e-mail dated: 01.04.2023. Ex.D.11 is the GSTR-3B from April 2018 to March 2019 showing details of monthly tax paid to the Commercial Tax Department along with e-mail dated: 01.04.2023. Ex.D.12 is the GSTR-3B from April 2019 to July 2019 showing details of monthly taxes paid to the Commercial Tax Department with e-mail dated: 01.04.2023. Ex.D.13 is the balance sheet of the accused for the year 2016-17, 2017-18, 2018-19 along with one e-mail. Ex.D.14 and 15 are the two e-mails related to 24.05.2023 and 26.05.2023. Ex.D.16 is the certificate under section 65(b) of Indian Evidence Act. (Ex.D.7 to 15 are marked subject objection of the learned counsel for the complainant).
21. The documents produced by the Manager of Kotak Mahindra Bank marked as court documents at Ex.C.1 to 6. Ex.C.1 is the letter address to the court.
Ex.C.2 is the copy of prohibitory order. Ex.C.3 is the copy of letter dated: 25.11.2019 issued by the Kotak Mahindra Bank to the accused regarding freezing amount. Ex.C.4 is the copy of the sanctioning letter dated: 04.01.2017. Ex.C.5 is the copy of the sanctioning letter dated: 26.10.2015 and Ex.C.6 is the copy of the C.C.NO.15681/2020 16 renewal letter dated: 20.01.2024. These documents marked subject to objection of the complainant counsel.
22. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the complainant and the accused are known to each other by business relationship since 2017. The complainant are in the business of manufacturing and marketing of Ice cream and frozen dessert products and the accused has been working as one of the distributor for the supply of complainant's Ice cream and frozen desserts products in Coimbatore and surrounding area. It is further argued that the accused started business in the month of March 2017. It is further argued that the complainant has supplied the goods to the accused on credit base from time to time to the tune of Rs.12,52,00,000/- as against the accused is outstanding balance of Rs.5,56,71,208/-. Further argued that after several follow ups and reminders by the complainant to the accused clear the outstanding dues, the accused failed to repay the same. Further argued that the accused towards discharge of the said payment, had issued the cheque in question in favour of the complainant. He further argued that the accused C.C.NO.15681/2020 17 has not denied Ex.P.13 being his cheque drawn on his account and signature appearing on the said cheque. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act. Further argued that the accused has failed to produce any believable evidence that he had issued 20 blank signed cheques in favour of the complainant and also why he has not returned back the same is not clear. He further argued that the accused have failed to produce any documentary evidence regarding he had issued the 20 blank signed cheques. Further argued that under section 139 of N.I.Act, there is a presumption that the cheque have been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.13 being his cheque drawn on his account. The said presumption is available to the complainant.
23. The learned counsel for the complainant has filed written argument. In his written argument it is submits that the accused has been working as one of the distributor. The accused has given a cheque of Rs.5,56,71,208/- towards the outstanding liability which C.C.NO.15681/2020 18 was dishonored. The complainant has produced and marked totally Ex.P.1 to 23 documents, such as ledger accounts, summary of outstanding bills, Balance confirmation endorsed by the accused, cheque and endorsement, copy of legal notice and postal receipts. Though the legal notice is served the accused has not given any reply. The accused has entered appearance and has led his evidence and has subjected himself to cross examination. The accused has produced and marked totally 16 documents. Further submits that undisputed facts of the case before this court: i. Business transaction is not disputed, ii. Issuance of cheque not disputed, iii. Signature on the cheque is not disputed, iv. Legally enforceable debt admitted in the cross examination and in their own document produced before this court as Ex.D.13. v. cheque dishonor. vi. Notice issued to all the 4 known address of the accused, two of the notices has been served and acknowledgment produced and marked before this court and the other two has been returned back as door locked and no such addressee. vii. There was no sufficient funds in the accused accounts, as could be seen in the Ex.D.5. Thus the requirement of the Section 138 are fulfilled.
24. Further submits that facts admitted by the accused during the course of cross examination:- The accused admits that in the year 2019, including the C.C.NO.15681/2020 19 cheque presented by the complainant nearly 270 times the cheque given by the accused is bounced (Ex.D.5). It means he is a habitual offender. The accused stated in para No.22 of the affidavit evidence, he has given 20 signed cheques, and has produced any documents to substantiate the same, even when confronted in the cross examination he has admitted that he has not produced any documents to substantiate the same. Ex.D.3 is produced by the accused to show the credit limit, it is to be noted that in Ex.D.3 it is stated that next facility review date is 3rd January 2018, the accused answers that he has not sought for extension of credit limit facility. Further he has stated in the affidavit evidence that as cheque amount was beyond 5 crores his account was blocked and he suffered finance laws and humiliation, but it is to be noted that the account was blocked on 30.11.2019 itself much prior to the presentation of cheque by the complainant. Thus the defence of the accused that as the cheque amount was beyond 5 crores the cheque got bounced stands exposed. The accused clearly admits in the cross examination that the amount in the cheque is legally enforceable debt (cross examination dated:
19.04.2023. The accused files application under section 91 Cr.P.C and seeks for production of documents from his banker, and files another application for the marking of it through the accused.
C.C.NO.15681/2020 20 The complainant files memo and states that he does not have objection of Section 91 but the documents relating to the banker cannot be marked by the accused. This court passes the order and states that the documents produced by the banker would be marked as C series. However, the banker has produced only the xerox copies of the same, thus the complainant counsel raised the objections, thus it was marked subject to objections. These documents are not testified under the evidence act and further these documents are not tested on the anvil of cross examination. It is for the accused to establish the contents of the documents in the manner know to law and he has failed to take such cautions and steps to prove these documents. Thus the accused himself has defeated the purpose of section 91 application, as originals are not produced adverse inference need to be drawn.
25. It is further submits that the documents produced by the banker is not of much-help to the accused, the banker has produced the documents which states that ESI corporation has issued a prohibitory order dated: 15.11.2019, this fact was not divulged at any point before summoning of the documents, neither the accused informed about the same to the complainant, after issuing the notice, or during evidence, though the copy of the same was also C.C.NO.15681/2020 21 sent to him on the same date. Further even the banker has issued a letter to the accused dated: 25.11.2019. The accused did not had any amount in his bank account. Thus adverse inference need to be drawn. If these two facts had happened without the accused knowledge, then the would have stated it in his evidence or even during the time of recording of Section 313 statement, the reasons of account block situation, he does not do so, thus adverse inference need to be drawn. Thus the accused has kept on shifting his defence, without substantiating the same. He relied upon the citation of the Hon'ble Apex Court in Lakshmi Dychem V/s. State of Gujarat, reported in (2012) 13 SCC 375 has held that two contingencies require to constitute offence under section 138-Scope first contingence either because of the amount of money standing to the credit to that account is sufficient to honor the cheque, held is a genus and dishonour for reasons such as account closed, payments stopped, referred to the drawer, signature do not match or image is not found or only pieces of that genus. The accused has failed to prove that as on the date of the presentation of the cheque in the account of the accused he was having sufficient amount for honor of the said cheque. The bank statement produced and marked as Ex.D.5 by the accused itself shows that the accused did not had balance to honor the cheque.
C.C.NO.15681/2020 22
26. Further submits that the accused has relied on internal department correspondence between the RBI and other banks, to show that the complainant does not enjoy the presumption under section 146 of N.I.Act, subsequently the complainant has established by cogent evidence by calling the bank manager to the witness box and bringing before this court regarding the factum of dishonor. It is to be noted that there is contradiction in the evidence of the accused, and the answers in the cross examination as well as 313 statement of the accused. Further it is to be noted that the accused states that he was working as Probationary officer in the State Bank of India and is having business experience of more than 34 years. The accused harped on bundle of lies, he is a chronic defaulter, time and again he has shifted the defence. Thus the complainant has fulfilled the requirement of section 138 of N.I.Act by establishing that the amount mentioned in the cheque is legally enforceable debt, by producing Ex.P.13 further it was also admitted by the accused during the course of cross examination and by their own documents (Ex.D.13). Further he has relied upon the citations reported in 2021(5) SCC 283 (Kalamani Tex and Anr V/s. P.Balasubramanian), 2019 (10) SCC 287, 2019(4) SCC 197, 2012 SCC (30) 375, Cri.A.No.292/2021 and SLP (Crl.No.12802 of 2022). Hence, he prays to punish the accused and allow the C.C.NO.15681/2020 23 complaint.
27. The learned counsel for the accused has argued that there was no legally enforceable debt/liability to the complainant from the accused for which the cheque was issued. Further argued that the accused had issued 20 blank signed cheques to the complainant in the month of March 2019 and one of the cheque was misused by the complainant. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the cheque came to be issued. It is further argued that the complainant is only in order give trouble to the accused and with an intention to make illegal money from the accused filed false case. This is not permissible under the law. Further argued that blank cheque was collected from the accused in the month of March 2019. On looking it Ex.P.13 the signature of the accused is admitted. Whereas, the writing part of the cheque amount in words and in figure are different hand writings. Therefore, the entire cheque was filled up by the complainant as their whims. The complainant created all the documents and filed this false case. Further argued that there is no due from the accused to the complainant. Further argued that the cheque in question was returned for the reasons "Account Blocked situation coverd under 2125". Hence, the said C.C.NO.15681/2020 24 reason is not comes under the provision of section 138 of N.I.Act. Hence, case filed by the complainant against the accused under section 138 of N.I.Act is not maintainable.
28. Further argued that the accused had started its business as a dealer for Yankee Doodle Ice cream and gradually appointed as the super stockists for Kwality Wall"s an ice cream making and distributing company, a brand owned by Industan Uniliver Limited. In the month of January 2003, M/s. Kwality Walls had appointed the accused as the super stockists, for the territories of Coimbatore and Nilgiri. The accused was the sole distributor of Kwality Walls for the territories of Coimbatore and Nilgiri. In the year 2003 the accused was doing business of Rs.78,00,000/- P.A for Kwality Walls in the said territories, the business increased by many folds. In month of March 2017, business went upto 12.56 crores in terms of purchase value. The accused has achieved compounded annual growth rate of 18%, which is a rare business achievement in the Ice cream and Frozen product Industries. It is further argued that after being appointed as the super stockists of Kwality Walls, as per their requirement the accused had created a huge infrastructures for them which included 04 cold storage rooms with 7,000 capacity storage, 07 delivery vehicles for carrying preserved and C.C.NO.15681/2020 25 stored Ice creams. The accused also hired a generator with a capacity of 45 KVA as alternative power supply for summer season. The accused had employed around 40 person as a salesmen, delivery boys, accountants for smooth and effective functioning of business. The accused had invested morethan two crores to have a huge infrastructures, accounting and management of product stocked in cold storage, cold chain logistic, freezers etc., to provide proper and adequate infrastructures as per the demands of Kwality Wall's. It is further argued that the accused to maintain huge infrastructures and big number of employees, he need huge investment and monies. Therefore, to overcome his expenses, Kwality Wall's was providing 21% margin on purchase value of products supplied to the accused managed to return 60% of customer days out of total market serviced by the accused.
29. It is further argued that the accused came to know that Kwality Wall's/Industan Uniliver Limited was using his infrastructure, investments and manpower to create their own brand value and was not adequately compensating the accused for the same. Therefore, the accused decided to move on from Kwality Wall's/Industan Uniliver Limited and decided to join with the complainant. It is further argued that one Mr.M.N.Jagannath, Authorized representative of the C.C.NO.15681/2020 26 complainant had approached the accused and proposed better business opportunities than Kwality Wall's. After discussion, the accused decided to join the complainant company on certain agreed terms and conditions. The complainant was agreed and accepted that the market created by the accused would not disturbed to other existing distributors of the complainant company in the said territories of Coimbatore and Tiruppura. The accused was the sole distributor to modern trade outlets, such as Reliance, Big Bazar, Spare Hyper Market, Nilgiri's in Coimbatore inrespect of Ice cream products. The complainant company annual turn over had increased from around Rs.2 crores to about 10 crores per annum, after doing business with the accused. It is further argued that the accused and the complainant were assuming that they would not be able to cover the entire market of the said territories, therefore the complainant had agreed and assured to the accused that any loss in net revenue, will be reimbursed to the accused by way of subsidies, discount and claims.
30. It is further argued the complainant had directed the accused that there should not be any shortfall of expenses towards operating costs, even though they were having less business. The complainant had assured and agreed that they would make good the shortfall in revenue deficit of the C.C.NO.15681/2020 27 accused. The during said period to return retailers with the accused, he had to offer extra days credit, extra margins on discretionary basis to the retailers to survive the brand product war. The accused had also exhorted their sales and delivery team to work harder for achievement of sales targets. In view of the continuing exposer to incentive, discount and other expanses over all annual expenses of the accused kept on increasing, on other hand gross revenue came down by more than half. The gross revenue loss in the 1st year of business was more than 1.50 crores. In 2 nd year over all sales came down up to Rs.7 crores. The accused found it very difficult to manage its business. Further argued that due to continues loss of business, the complainant has directed the accused to stay away from relatively distance territories. Due to such advise of the complainant the accused suffered further huge losses in annual sales. The complainant already had two existing distributors for the territories of Coimbatore and Tiruppura. At the time of entering into agreement between the complainant and the accused it was agreed and accepted by the parties that the existing distributors would continue to service and it would be serviced only by the accused.
31. It is further argued that the complainant company failed and neglected to the assurance given C.C.NO.15681/2020 28 by the accused. The complainant increased their business to multiple folds in Coimbatore. The accused business continuous suffered huge losses. The complainant's all other distributors managed to gain business and territory, due to the accused good will, contacts, infrastructure and investment. The complainant failed to make good the shortfall in revenue deficit incurred by the accused and did not recognized and gave credit to workers of the accused. Further argued that after being associated with the complainant company within 3 years the accused gross revenue came down by more than 4 crores. The retailers were not paying to the accused due to extended credit facility given to them as per advise of the complainant company. The accused was not able to procure the supply of ice creams products due to which its business came to stand still. The outstanding amount from retailers kept increasing and was not settled. Despite the same the complainant terminated the contract with the accused and was dealing with the retailers directly and through other distributors and as such the accused was not able to collect the outstanding due amount from the retailers. The total amount due from the retailers is Rs.1.5 crores. Further argued that in the month of March 2019 the as per the instructions of the complainant the accused given 20 signed blank cheques bearing No.011226 to 011245 of C.C.NO.15681/2020 29 Kotak Mahindra Bank and the cheques were not given for discharge of any liability.
32. It is further argued that the accused had bank account with the M/s. Kotak Mahindra Bank, Avanshi branch road, Coimbatore with an over draft facility limit of Rs.5 crores only. The complainant was aware of fact, the said cheques are of Kotak Mahindra Bank, which has over draft facility limit of Rs.5 crores. The complainant without any intimation to the accused has utilized one of the blank signed cheque by filling an amount of Rs.5,56,71,208/- and presented to the bank for encashment on 09.12.2019. Since the said cheque amount was beyond the over draft facility limit, the bank blocked the account of the accused and recalled entire cash credit facility of the accused. As result the accused was suffered huge loss and humiliation. Further argued that the accused has not issued the said cheque to the complainant towards discharge of any legally dischargeable debt. The complainant has misused the said cheque and presented to the bank for encashment with a malafide intention to defraud the accused. It is further argued that the complainant instead of returning the cheques they have misused the one of the cheque. When there is no due from the accused, then question of issuance of the cheque does not arise at all. Therefore, from the evidence placed on C.C.NO.15681/2020 30 record, very due amount of the accused is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act, regarding existence of legally enforceable debt/liability.
33. The learned counsel for the accused further argued that the complainant have misconceived his purported rights in filing the above complaint on the alleged issuance of cheque by the accused. The accused has issued the 20 blank signed cheques and the complainant have misused the one of the blank cheque. Hence, an offence under section 138 of N.I.Act is not attracted. There is no balance or any mismanagement from the accused. The complainant have filed false case against the accused. The complainant have not made out any case against the accused for the alleged payment of dues as claimed in its complaint. The complaint is also not in accordance with law. Further argued that in the month of March 2019, the disputed cheque was issued. Further argued that the complainant have not followed any mandatory procedure laid-down under law and that the claim of the complainant regarding legally recoverable debt is also not that of the amount claimed in the aforesaid cheque. By taking undue advantage of possession of the aforesaid cheque, the complainant have foisted a false complaint against the accused. On this ground alone C.C.NO.15681/2020 31 the complaint requires to be dismissed. The notice under section 138 purportedly issued by the complainant is not in accordance with law. As such, notice itself is not admissible in the eye of law. Hence, he prays to dismiss the complaint with exemplary costs and acquit the accused.
34. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque in question in favour of the complainant. It is not disputed that the complainant is a private limited company and the accused is a distributor, Proprietor and businessman and he had issued the cheque-Ex.P.13 in favour of the complainant. Whereas, the accused has contended that in the month of March 2019 he had issued 20 blank signed cheques in favour of the complainant. The accused has specifically denied having debt/liability issued the cheque-Ex.P.13 on 07.12.2019 towards the discharge of any debt/liability. He contends that one of the blank cheque as was misused by the complainant and a false complaint was filed.
35. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the C.C.NO.15681/2020 32 cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant's in order to prove its case, have examined its Accounts Manager as PW.1 and the Chief Manager examined as PW.2 and totally 25 documents were marked at Ex.P.1 to 25. In chief examination, P.W.1 has repeated the averments made by the complainant in the complaint and PW.2 deposed regarding dishonor of the cheque as Account blocked situation covered in 2125. In the present case, the accused has not disputed Ex.P.13 being his cheque drawn on the account of the accused. The said presumption is available to the complainant.
36. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which Ex.P.13 was issued. In order to prove his defence, the accused has failed to adduce any cogent evidence.
37. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut C.C.NO.15681/2020 33 the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further the accused has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that he had given 20 blank signed cheque in favour of the complainant and there is no due to the complainant. Further the complainant have misused the one of the blank cheque. Except, the said defence, he has not produced any materials to prove such defence. If he had issued 20 blank signed cheques in favour of the complainant, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque. On which date the accused came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is a businessman and having knowledge of the financial transaction, why he has given 20 blank signed cheques to the complainant without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the C.C.NO.15681/2020 34 blank signed cheques. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodge complaint before concerned police station or any court. No steps have been taken to receive back the blank cheques, after he came to know about the same.
38. Further the learned counsel for the accused at the time of argument has taken specific contention that the cheque was returned account blocked situation coverd in 2125. Hence, offence punishable under section 138 of N.I.Act is not attracted. The Hon'ble Supreme Court has held in Lakshmi Dychem V/s. State of Gujarat, reported in (2012) 13 SCC 375, Negotiable Instruments Act, 1881-S.138 Dishonour of cheque under- Two contingencies required to constitute offence under S.138-Scope- First contingency "either because of the amount of money standing to the credit of that account is insufficient to honour the cheque" held, is a genus and dishonour for reasons such "as account closed", "payment stopped", "referred to the drawer", "signatures do not match" or "image is not found", are only species of that genus-Further held, two contingencies envisaged under S.138 cannot be interpreted strictly or literally-So long as the change is brought about by a drawer of the cheque with a view to preventing the cheque from being honoured the dishonour would become an offence under S.138 C.C.NO.15681/2020 35 subject to other conditions prescribed being satisfied. The accused has failed to prove that as on the date of the presentation of the cheque he was having sufficient amount for honor of the said cheque. Therefore, the contention of the accused cannot be acceptable that offence under section 138 is not applicable.
39. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut C.C.NO.15681/2020 36 the complainant's case.
40. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
41. In the case of Kalamani Tex and another V/s P.Balasubramanian, reported in (2021) 5 SCC 283, the Hon'ble Supreme Court has observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable C.C.NO.15681/2020 37 instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
42. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
43. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reasons stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has failed to produce any documents in this regard. Further the accused has taken the defence that as the alleged cheque amount was beyond 5 crores his account was blocked and he suffered finance laws and humiliation, in order to prove his defence, the accused earlier not produced any documents, but it is to be noted that the accused produced the bank statement before the court, on C.C.NO.15681/2020 38 perusal of the same it reveals that the account was blocked on 30.11.2019 itself much prior to the presentation of the alleged cheque by the complainant. Thus the defence of the accused cannot accepted that cheque amount was beyond 5 crores. Hence, the same came to be dishonored as account blocked.
44. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing a false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and had not return the same, inspite of collecting cheques leaves from him, as a prudent man, the accused should have inquired with the complainant and demanded to return those cheques. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.13. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station or any court immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of blank cheque against the complainant. It appears, just to escape from his legal C.C.NO.15681/2020 39 liability, he has taken such contentions without any valid basis.
45. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.13 being his cheque drawn on the account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and 2 and also cheque return memos-Ex.P.14 and 24 it is established that the cheque was dishonored for the reasons "Account blocked situation covered in 2125''. The accused has taken another defence that the complainant produced the bank memo for dishonor of the alleged cheque. In the memo there is no seal and signature of the bank. Hence, the bank memo may be considered unauthenticated due to the absence of a seal and signature. The bank memo, though unauthenticated due to lack of seal and signature, is not entirely unreliable. The complainant examined the Chief Manager as P.W.2. The bank manager's testimony can C.C.NO.15681/2020 40 establish the authenticity of bank memo, despite the lack of seal and signature. The bank manager's evidence can corroborate the complainant's version of events, strengthening their case. Hence, memo is hereby accepted as evidence. A legal notice being issued as per Ex.P.15 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice send by the complainant on his addresses. But, the accused failed to reply to the notice, immediately after he received the demand notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his addresses. When the accused has not seriously disputed, the notice sent to the correct addresses is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice. Further the accused has produced Balance sheet for the year 2016-17, 2017-18, 2018-19. Wherein the accused it is specifically mentioned that he is due to the complainant for a sum of Rs.5,67,15,586/- as schedule-VII in Sundry Debtors list. It clear that the accused is due to the complainant and he has failed to repay the due amount to the complainant. Further in order to repayment of the due amount the accused had issued the cheque in question in favour of the C.C.NO.15681/2020 41 complainant.
46. It is not the contention of the accused that thereafter he has paid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period and failed to give reply to the notice, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed after the accused failed to repay the cheque amount. Even the accused did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of the Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, (2010(5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he want to take. As such, it has to be considered, C.C.NO.15681/2020 42 whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
47. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
48. The accused contended that except signature other writings on the cheque-Ex.P.13 is not in his handwriting, which were filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits his signature, he cannot take up a defence that other contents of cheque was filled up by the complainant and it amounts to material alteration. In this respect, C.C.NO.15681/2020 43 ruling reported in 2019 SCC On-line (SC) 138), between Bir Singh V/s Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 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, if cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. Even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment. Would attract presumption Under section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
49. The principles emerging from the above referred decision make it clear that it is not mandatory and no law prescribes that the contents of the cheque should be written by the signatory to the cheque. A C.C.NO.15681/2020 44 cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I.Act arises. The principle of law laid- down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
50. As per the version of the accused is that he has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that the accused has issued the cheque-Ex.P.13 in favour of the complainant and even after he has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of section 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused has issued the cheque-Ex.P.13 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him. Therefore, the accused has failed to rebut the C.C.NO.15681/2020 45 presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the business transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
51. PW.1 in his evidence has specifically deposed that the complainant are in business of manufacturing and marketing of Ice creams and frozen desserts products and the accused has been working as one of the distributor for the supply of the complainant company Ice creams and frozen desserts products. Further deposed that the business transaction with the accused started in March 2017. Further deposed the complainant has supplied goods to the accused on credit basis from time to time to the tune of Rs.12,52,00,000/- as against which a sum of Rs.5,56,71,208/- is outstanding, as on date. After several follow-ups and reminders by the complainant to clear the outstanding amount, the accused had issued cheque in question in favour of the complainant. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, this is not disputed by the accused. The accused has failed to probables his defence. Further the accused has failed to rebut the presumption under section 139 C.C.NO.15681/2020 46 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. With these reasons, I answer point No.1 and 2 in the Affirmative.
52. POINT NO.3 AND 4: In order to avoid repetition of facts, these two points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, he has to prove all the requirements of section 138 of N.I.Act. Ex.P.13 being his cheuqe drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. Thereafter, the notice-Ex.P.15 being issued by the complainant not seriously disputed. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. When the accused immediately after receive the notice, he has not reply to the notice and not paid the cheque amount. Further the accused earlier not produced any documents before this court. Hence, the present complaint came to be filed before C.C.NO.15681/2020 47 the court on 05.02.2020. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. Hence, the accused is found to have committed an offence punishable under section 138 of N.I.Act. With these observations, I answer point No.3 and 4 in the Affirmative.
53. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for the offence under section 138 of N.I. Act.
C.C.NO.15681/2020 48 The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.5,57,00,000/- (Rupees five crores fifty seven lakhs only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.5,56,85,000/- (Rupees five crores fifty six lakhs eighty five thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 28 th day of August- 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.08.30 11:04:56 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.15681/2020 49 ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Myluswamy. PW.2 : Sri.Nithin Kumar, Chief Manager,.
List of documents marked on behalf of the complainant:
Ex.P.1 : Authorization. Ex.P.2 : Computerized copy of summary invoice. Ex.P.3 to 7 : Computerized copies of account statements. Ex.P.8 : Balance confirmation. Ex.P.8(a) : Ledger account related to Ex.P.8. Ex.P.9 : The E-mail dated: 03.10.2018. Ex.P.10 : The reply given by the accused. Ex.P.11 : The E-mail dtd: 16.05.2019. Ex.P.12 : E-mail and attached the document. Ex.P.13 : Cheque. Ex.P.13(a) : Signature of the accused. Ex.P.14 : Bank memo. Ex.P.15 : Office copy of legal notice.
Ex.P.15(a) to 15(d) : Postal receipts. Ex.P.16 & 17 : Returned legal notices. Ex.P.16(a) & 17(a) : Returned postal covers. Ex.P.18 & 19 : Postal acknowledgments.
Ex.P.20 : Complaint.
Ex.P.21 : Certificate U/s.65(b) of I.E.Act.
Ex.P.22 : Certified copy of the incorporation
certificate.
Ex.P.23 : Certificate U/s.65(b) of I.E.Act.
Ex.P.24 : Bank endorsement related to Ex.P.14.
Ex.P.25 : Bank statement.
(Ex.P.22 to 25 marked subject to objection).
List of witnesses examined on behalf of the accused:
DW.1 : Sri.V.Krishna Swamy.
List of documents marked on behalf of the accused:
Ex.D.1 : E-mail.
Ex.D.2 : E-mail reply given by the accused.
Ex.D.2 : Cheque book counter foil.
Ex.D.3 : Master facility agreement dated: 04.01.2017.
Ex.D.4 : Out standing invoice from 2017 to 2019.
Ex.D.5 : E-mail dated: 06.04.2022 in attach.
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(marked subject to objection.
Ex.D.6 : Certificate U/s.65(b) of I.E.Act.
Ex.D.7 : Bank statement.
Ex.D.8 : GSTR-2 along with e-mail.
Ex.D.9 : GSTRalong with e-mail.
Ex.D.10 : GSTR-3B with e-mail dated: 01.04.2023.
Ex.D.11 : GSTR-3B along with e- mail.
Ex.D.12 : GSTR-3B with e-mail.
Ex.D.14 and 15 : E-mails.
Ex.D.16 : Certificate U/s.65(b) of I.E.Act.
(Ex.D.7 to 15 are marked subject objection.
List of documents marked on behalf of the court:
Ex.C.1 : Letter address to the court.
Ex.C.2 : Copy of prohibitory order.
Ex.C.3 : Copy of letter dated: 25.11.2019 issued by
Kotak Mahindra Bank to the accused
regarding freezing amount.
Ex.C.4 : Copy of the sanctioning letter dated:
04.01.2017.
Ex.C.5 : Copy of the sanctioning letter dated:
26.10.2015.
Ex.C.6 : Copy of the renewal letter dated:
20.01.2024.
Digitally
signed by
SOUBHAGYA
SOUBHAGYA B BHUSHER
B BHUSHER Date:
2024.08.30
11:05:04
+0530
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
C.C.NO.15681/2020
51
C.C.NO.15681/2020
52
28.08.2024 (Judgment pronounced in the Open
Court Vide Separate Sheet)
:ORDER:
Acting under section 255(2) of
Cr.P.C., the accused is convicted for the offence under section 138 of N.I. Act.
The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.5,57,00,000/- (Rupees five crores fifty seven lakhs only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.5,56,85,000/- (Rupees five crores fifty six lakhs eighty five thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.