Bangalore District Court
M/S.Kleanwell Polymers vs M/S.G.Das & Co. Pvt. Ltd on 12 March, 2021
Crl.Appeal No.704/2018
1
IN THE COURT OF LXVII ADDL CITY CIVIL AND
SESSIONS JUDGE; BENGALURU CITY (CCH.No.68)
PRESENT
SRI.K.SUBRAMANYA, B.Com., LL.M.
LXVII ADDL CITY CIVIL & SESSIONS JUDGE ,
BENGALURU.
Dated this the 12 th day of March 2021.
Crl. Appeal No.704/2018
APPELLANTS : 1. M/s.Kleanwell Polymers,
No.2372, 16th Main,
HAL 2nd Stage, Indiranagar,
Bengaluru.
Represented by its Partner,
Smt.Yamunarani Ramesh.
2. Smt.Yamunarani Ramesh,
Partner,
M/s.Kleanwell Polymers,
No.2372, 16th Main,
HAL 2nd Stage, Indiranagar,
Bengaluru.
(By Sri.B.C.S., Advocate)
.Vs.
RESPONDENT : M/s.G.Das & Co. Pvt. Ltd.,
Sri Balaji Complex, No.125, Sultanpet, Bengaluru.
Represented by Sri.Harsh Balchandani.
(By Sri.K.A., Advocate) Crl.Appeal No.704/2018 2 J UD GM E N T This appeal is preferred by the appellants under Section 374(3)(a) of Cr.P.C., challenging the conviction judgment passed by the learned XXIV Addl. Judge, Court of Small Causes & XXII Addl. C.M.M., Bengaluru in C.C.No.11638/2014, dated:23.03.2018 as to the alleged offence under Section 138 of N.I.Act.
2. The appellants herein were the accused and respondent herein was the complainant before the trial court. For the sake of convenience, parties would be referred to by the ranks they were assigned before the trial court.
3. Brief facts of the case are as under:
The complainant is a firm carrying business of supplying paper. The accused No.2 being the proprietrix of accused No.1 have purchased the paper from the complainant regularly and making periodical payments in instalments. As on 31.07.2013, there was outstanding balance of Rs.3,97,201/- along with interest. The accused had also agreed to repay the over due interest at the rate of 26% to 30% per annum. Towards discharge of the said outstanding amount, the accused had issued a cheque bearing No.892947, dated:28.11.2013 for Rs.3,97,201/-
Crl.Appeal No.704/2018 3 drawn on Punjab National Bank, Commercial Street Branch, Contonment, Bengaluru. When the complainant had presented the said cheque for encashment, it came to be returned dishonoured with an endorsement "Excees Arrangements" vide Banker's Memo, dated:30.11.2013. Thereafter, the complainant got issued the legal notice, dated:3.12.2013 calling upon the accused to pay the cheque amount. The accused has neither replied the said notice nor paid the cheque amount. Hence, the complainant has lodged the private complaint under Section 200 of Cr.P.C., against the accused for the offence punishable under Section 138 of N.I.Act. The trial court after due process and procedure, has passed the impugned order convicting the accused for the alleged offence.
4. In the grounds, the appellants have contended that the learned Magistrate has committed grave error in convicting the appellant/accused as to the offence under Section 138 of N.I.Act. The learned Magistrate has erred imposing the fine of Rs.5,00,000/- as against the manipulated cheque amount of Rs.3,97,201/- without there being such due being proved by the respondent. The learned Magistrate has failed to appreciate that the appellant had no liability of any kind to the respondent and the pleadings, alleged account statement, invoices were shown to be manipulated. The alleged account statement Crl.Appeal No.704/2018 4 had shown the RTGS payment of Rs.2,00,000/- on 13.06.2013, which the appellant had not remitted. The said statement also contained dishonour of cheque bearing No.892958, dated:23.08.2013 for Rs.3,97,201/-, which was not even pleaded by the respondent. Ex.P.2-cheque is dated:28.11.2013 for the same amount of Rs.3,97,201/-. Thus, it is clear that the respondent had foisted a false case against them by misusing the security cheques, which had been obtained at the inception of the business between themselves. The trial court has failed to appreciate that the alleged Tax Invoice-cum-Delivery Challans produced at Exs.P.6 and 7 to show the supply of papers in two truck loads, did not even noted the order number, truck number, which are mandatory to be shown in Tax Invoice. Even there was no acknowledgement or receipt of goods signed either by the accused or her representatives. The learned Magistrate has failed to consider the cheque had been issued by way of security in the year 2010 for credit transaction, had been misused by the complainant. The appellant/accused had shown that the said cheque has been drawn in the year 2010 with cogent evidence by producing subsequent serial number cheques statement. The subsequent cheques were encashed by the complainant in the year 2010 itself. Therefore, there is a doubtful circumstances as to the existence of debt or Crl.Appeal No.704/2018 5 liability to the transaction alleged by the complainant. The trial court has also not considered the statement of accounts, wherein the payments were regularly made by the accused in the course of business and the complainant himself has shown "NIL BALANCE". Therefore, the issuance of cheque towards discharge of the debt or liability for the last transaction without being supply of such materials is devoid of merit. The learned Magistrate has failed to notice that the appellant had not established the materials supplied by the respondent. The trial court has erred in not considering the fact that Ex.P.2 pertains to the year 2010 and the same was of Punjab National Bank, Contonment Branch, Bengaluru and the appellant had shifted her account on 14.10.2011 to Indiranagar Branch, Bengaluru, from where she had allegedly made payment to the respondent. The trial court has erred in considering the invoices as per Exs.P.6 and 7, which were fake and manipulated by the complainant. The truck name and who has received the delivery of goods is not shown in the invoice or with any other cogent documents. The course of business for which the cheque was issued is not established. Hence, sought for setting aside the impugned order by allowing this appeal.
5. The respondent has put his appearance through his counsel. The lower court records were secured.
Crl.Appeal No.704/2018 6
6. After hearing the arguments, the points raised for determination are as under:
1. Whether the appellants have made out grounds to intermeddle with the impugned order ?
2. What Order ?
7. My findings on the above points are as follows.
POINT No.1 - In the Affirmative, POINT No.2 - As per final order, for the following :
R E A SON S
8. POINT No.1 : The trial court after recording the evidence of P.W.1, relied upon the documentary evidence marked in "P" series such as Certified copy of Resolution, Cheque, signature of the accused, Bank Memo, Copy of Legal Notice, Postal Receipts, Courier Receipts, Postal Acknowledgments, Postal Cover, Notice under Section 138 of N.I.Act, Postal Cover, Notice under Section 138 of N.I.Act, Ledger Extract, Tax Invoice, Complaint and E-mail Record. The above said documents are reliable under Sections 62 to 65 of Indian Evidence Act. There is a presumption under special statute N.I.Act as to the debt or liability, which gives presumption that the cheque was issued in favour of the holder in due course for business and financial transaction and it is for the amount, which is due by the drawer. The Crl.Appeal No.704/2018 7 presumption drawn under Sections 118 and 139 of N.I.Act is sustainable and maintainable under law under the facts and circumstances of the case. The evidence must be sufficient cogent and correlative with the documents and the transaction in respect of which its authenticity is established. Therefore, the documents relied by the trial court is quite appreciable and reliable in nature.
9. Section 118 of N.I.Act reads thus :
"Until the contrary is proved, the following presumptions shall be made:-
(a) That every Negotiable Instrument was made or drawn for consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration".
10. It is also a well settled position of law that, once the cheque is proved to be relating to the account of the accused and he accepts and admits the signature on the said cheque, then the initial presumption as contemplated under Section 139 of N.I.Act has to be raised by the courts in favour of the complainant. The presumption referred to in Section 139 of N.I.Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be Crl.Appeal No.704/2018 8 established by the accused in order to rebut the presumption is different from each case under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence.
11. In the dictum reported in ILR 2009 Karnataka 1633 (Kumar Exports .Vs. Sharma Carpets) , Their Lordships in para No.18 of the said Judgment have clearly observed as under :
"Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Section 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act, a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument was executed by the accused, the rules of presumption under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumption ends only when the contrary is proved by the accused i.e., the cheque was not issued for consideration and in discharge of any debt or liability".
Crl.Appeal No.704/2018 9
12. Further, in the decision of the Hon'ble Apex Court in Criminal Appeal No.867/2016 (arising out of SLP (Crl) No.5410/2014) (Sampelly Satyanarayana Rao .Vs. Indian Renewable Energy Development) , wherein Their Lordships have pleased to held as under :
" In Rangappa .Vs. Mohan, this court held that once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises, it is for the accused to rebut the said presumption, though accused need not adduce the own evidence and can rely upon the material submitted by the complainant.
However, mere statement of the accused may not be sufficient to rebut the said presumption".
The principles enunciated therein by Their Lordships are observed while coming to the conclusion on the facts of this case.
13. It is the main contention of the defense that the transaction made on behalf of the complainant concern with accused concern and the accused No.2 being the Proprietrix of the accused No.1, had issued the cheque on behalf of the accused No.1 concern are to be establish with cogent oral as well documentary evidence. But, the complainant has failed to prove the supply of materials as Crl.Appeal No.704/2018 10 set out in Invoices. The main contention raised by the complainant is that the items described in Invoices Exs.P.6 and 7 are supplied to the accused. Therefore, the huge and bulk quantity of Tissue papers were allegedly supplied under invoices marked in Exs.P.6 and 7 to the accused by the complainant concern. But, the wagon or truck, in which the materials were transmitted and whether any Toll Receipts and Tax Paid Receipts and the Sales Tax documents is raised in respect of the transaction is not forthcoming in the testimony of the complainant.
14. It is the prime contention of the accused that in the invoices, the Wagon/Truck number is not mentioned so as to prove the supply of Tissue papers. It cannot be transmitted in any other mode other than the truck is an admitted fact. P.W.1 has also admitted in the cross examination that the truck number is not mentioned in the Invoices. Even the supply of such article to the accused and the person, who was authorised to take the delivery of such materials under invoice is also not acknowledged the receipt of the materials. Therefore, the learned counsel for the accused has vehemently contended that without being truck number and receipt of the materials by the accused concern, it is difficult to hold that there is supply of materials on credit basis and for which, the accused has issued the impugned cheque.
Crl.Appeal No.704/2018 11
15. Further, it is admitted in the cross examination of P.W.1 that there is a difference of amount mentioned in the cheque and it is not tallying with the total amount of invoices produced by him. Further, he has admitted that the cheque No.892958 for Rs.3,97,201/- was issued in respect of invoices Exs.P.6 and 7 and he do not know whereabout of that cheque. This is also proves the contention of the defense that there is misuse of the security cheque and it is to be re-appreciated in further trial.
16. It is also clearly contended that the cheque issued from the same cheque book and the series cheque numbers were encashed and transacted in the year 2010. It is also admitted in the evidence of P.W.1 as well as clearly deposed by D.W.1 in evidence. Even the statement produced by the complainant in Ex.P.5 pertaining to the company transaction clearly shows that the amounts were paid regularly during the course of business as per Section 16 of Indian Evidence Act. These factors are relevant to decide as to whether the impugned cheque has been issued to the last suspected transaction to the supply of materials and the supply was made on credit basis or not?. It is clearly contended by the defense counsel that as on 12.07.2013, Crl.Appeal No.704/2018 12 the ledger account of the complainant concern itself shows that there is "NIL BALANCE" and the accused concern is not due of any amount. Therefore, how the transaction riped on 31.07.2013 within a short period for the supply of these materials without being authenticated evidence of lorry receipts and tax paid receipts and delivery note is leading to suspicion. Hence, all these factors needs further evidence and appreciation under the facts and circumstances and the contention of both the parties.
17. Further more, the accused has clearly set out in the grounds of appeal that the cheque was issued to the earlier transaction as security and the account maintained by the accused proprietrix in Punjab National Bank had shifted to Indiranagar Branch on 14.10.2011 itself. Therefore, the issuance of cheque belonging to Punjab National Bank, Contonment Branch, Bengaluru in the year 2013 is also leads to some doubt and it require further evidence of the reliable witness, who can testify the issuance of the cheque in November 2013.
18. It is also pertinent to note that the supply was made in the month of July 2013, but the cheque was allegedly issued on 28.11.2013, which is belated and subsequent date. It is not the case of the complainant that Crl.Appeal No.704/2018 13 the post dated cheque was issued for the transaction. It is also pertinent to note that the Invoices is dated:31.07.2013 and the credit facility is usually given for one month i.e., up to 29.08.2013 and the rate of interest for default is mentioned as 26% per annum and from 30.08.2013, it is at 30%. Regarding this fact also, the evidence has been adduced and P.W.1 has stated that the interest is fixed as per the business in invoice. But, such exorbitant rate of interest is not permissible in the common course of business. As such, the learned counsel for accused has contended that the invoices are created and there is no supply of materials. Further more, in the evidence of P.W.1, he has denied the payment of Rs.2,00,000/- made by the accused through RTGS on 13.06.2013. But, it is shown in Ex.P.5-Ledger Extract of the complainant concern. It clearly authenticated the payment of Rs.2,00,000/-, which was denied by the complainant. Therefore, all these factors needs to be re-appreciated on cogent, consistent, correlative and conformative of evidence. Unless it is done, the order of conviction is not sustainable under the facts and circumstances of the case.
19. The presumption is to be drawn on material facts and adverting to the nature of transaction. Even though prima-facie presumption is to be drawn under Sections 118 Crl.Appeal No.704/2018 14 and 139 of N.I.Act, it is rebuttable presumption and rebuttal evidence needs to be appreciated under the facts and circumstances of the case. The infirmities and inconsistencies in the evidence of the complainant deserves to be re-appreciated afresh by giving opportunity to both the parties to lead further evidence on the vital aspects observed herein as to supply of huge quantity of Tissue papers by way of transport. Hence, the matter is deserves to be remanded exercising the power of the Appellate Court as provided under Section 386 of Cr.P.C., which reads thus :
Power of the Appellate Court:- After perusing such record and hearing the appellant or his pleader, if he appears, and the Public Prosecutor if he appears, and in case of an appeal under section 377 or section 378, the accused, if he appears, the Appellate Court may, if it considers that there is no sufficient ground for interfering, dismiss the appeal, or may-
(a) in an appeal from an order or acquittal, reverse such order and direct that further inquiry be made, or that the accused be re- tried or committed for trial, as the case may be, or find him guilty and pass sentence on him according to law;
(b) in an appeal from a conviction-
Crl.Appeal No.704/2018 15
(i) reverse the finding and sentence and acquit or discharge the accused, or order him to be re- tried by a Court of competent jurisdiction subordinate to such Appellate Court or committed for trial, or
(ii) alter the finding, maintaining the sentence, or
(iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the Same;
(c) in an appeal for enhancement of sentence-
(i) reverse the finding and sentence and acquit or discharge the accused or order him to be re- tried by a Court competent to try the offence, or
(ii) alter the finding maintaining the sentence, or
(iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, so as to enhance or reduce the same;
(d) in an appeal from any other order, alter or reverse such order;
Crl.Appeal No.704/2018 16
(e) make any amendment or any consequential or incidental order that may be just or proper; Provided that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement:
Provided further that the Appellate Court shall not inflict greater punishment for the offence which in its opinion the accused has committed, than might have been inflicted for that offence by the Court passing the order or sentence under appeal.
20. Further, in the dictum reported in AIR 2000 SC 361 (Padam Singh .Vs. State of Uttar Pradesh) , Their Lordships have clearly observed as under :
"It is duty of an Appellate Court to look into the evidence adduced in the case and arrive at an independent conclusion as to whether the said evidence can be relied upon or ot and even it can be relied upon then whether the prosecution can be said to have proved beyond reasonable doubt on the said evidence. The credibility of a witness has to be adjudged by Appellate Court in drawing inference from proved and admitted facts".
21. The learned counsel for appellants has relied upon the copy of order passed before the Hon'ble High Court of Crl.Appeal No.704/2018 17 Karnataka, Dharwad Bench, Dharwad in Criminal Appeal No.2784/2012, dated:11.11.2020, wherein Their Lordshisp have observed as under :
The learned counsel has relied upon the decision of the Hon'ble Supreme Court of India in the case of Bir Singh .Vs. Mukesh Kumar reported in (2019) 4 SCC 197.
Crl.Appeal No.704/2018 18 On a perusal of the complaint, it is seen that complainant has stated that accused took hand loan of Rs.1,60,000/- from him on or about 4.06.2006. It is further stated that accused had issued a cheque bearing No.359008, dated:2.09.2006 drawn on Syndicate Bank, Hubli, for Rs.1,60,000/- But, date of issuance of the cheque is not mentioned. Eve breakup of due amount was sought to be clarified in cross examination by stating that Rs.50,000/- was cash payment and Rs.1,10,000/- was credit towards supply of wood. It is also admitted that details of the wood supplied to accused are entered in a rough book. This fact is also not stated in the complaint. The rough book is not produced. It is also admitted that during August 2005, wood worth Rs.1,10,000/- was supplied to accused. When it is an admitted fact that both complainant as well as accused are timber merchants, failure on the part of complainant to produce account books showing dues in respect of accused is a material omission. Likewise, explanation for the sum of Rs.1,60,000/- as two sub-transactions, one in cash and another credit towards wood supplied not being stated in the complaint, is a material contradiction. There is also contradiction about the date of transaction. It is mentioned in the complaint as 'on or about 4.06.2006'. Whereas, in the cross Crl.Appeal No.704/2018 19 examination, it is stated to be of 'August 2005'.
On over all consideration of the entire evidence on record, omissions and contradictions with regard to the period of transaction and amount involved coupled with failure to produce books of accounts by the complainant, who is a businessman and the transaction being a part of his business, the trial court, in my opinion, has rightly come to the conclusion that the complainant has failed to prove that an offence under Section 138 of N.I.At was committed by the accused and therefore, acquittal of the accused for the offence is justified.
The observations made by Their Lordships is aptly and squarely applicable to the facts and circumstances of the case.
22. The purport and object of the special statute under N.I.Act is to ensure the financial transaction between the parties as well as financial institutions and the cheque is one instrument, which is governable by N.I.Act. But, the object is to be achieved to consider the genuine transaction rather than the mischievous transaction to cause loss to the person, who has promptly made payments in a business transaction. Here in this case, the course of business transaction and the statements shows the prompt Crl.Appeal No.704/2018 20 payment made by the accused and the statement of the complainant itself shows that there was a "NIL BALANCE"
couple of days before the alleged transaction of supply of Tissue papers. Therefore, there is some discrepancy as to the proof of placing order and supply of the materials in the absence of lorry receipts and lorry number and the place of delivery. Hence, the appellants have made out sufficient grounds to intermeddle with the impugned order. Accordingly, I answer the Point No.1 in the Affirmative.
23. POINT No.2 : My finding on this point is as per following :
O R DE R The Crl. Appeal filed by the appellants is hereby allowed. Consequently, the impugned judgment passed by the learned XXIV Addl. Judge, Court of Small Causes & XXII Addl. C.M.M., Bengaluru in C.C.No.11638/2014, dated:23.03.2018 is set aside and the matter is remanded back to the trial court for fresh disposal in accordance with law, by giving opportunity to both the parties to adduce their further evidence, as per the observations in the appeal.
Both the parties are directed to appear before the trial court on 19.04.2021 without awaiting fresh notice from the court.
Send back the records to the trial court along with the Crl.Appeal No.704/2018 21 copy of this judgment.
(Dictated to the Judgment-writer, transcript thereof is corrected and then pronounced by me in the open court on this the 12th day of March 2021) (K.SUBRAMANYA) LXVII Addl.City Civil and Sessions Judge, BENGALURU.