Bangalore District Court
M/S Bindu Ventures vs Paresh S Shah And Co., And Others on 10 September, 2024
C.C.NO.11251/2018
0
KABC030325192018
Presented on : 08-05-2018
Registered on : 08-05-2018
Decided on : 10-09-2024
Duration : 6 years, 4 months, 2 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 10th DAY OF SEPTEMBER-2024
C.C.NO.11251/2018
Complainant: M/s. Bindu Ventures,
O/at: 4th Floor, Bindu Galaxy Complex,
No.2, First Main Road, Industrial Town,
Rajajinagar, Bangalore-560010.
R/by its Managing Partner,
Sri.Jayesh.Z.Shah
(By Sri.Channappa.K & Ors.,Advs.,)
V/S
Accused: 1. Paresh S Shah & Co.,
Charted Accountant,
Having O/at No.303, III Floor,
Bindu Galaxy Commercial Complex,
No.2, 1st Main Road, Industrial Town,
Rajajinagar, Bengaluru-560010.
R/by Sri.Paresh.S.Shah.
2. Sri.Paresh.S.Shah,
No.29, 7th "B" Main, III Stage,
IV Block, Basaveshwaranagar,
C.C.NO.11251/2018
1
Bengaluru-560079.
3. Smt.Karishma.P.Shah
D/o Sri.Paresh S.Shah,
No.29, 7th "B" Main, III Stage,
IV Block, Basaveshwaranagar,
Bengaluru-560079.
(Case against her Set-aside).
(By Sri.Ajay Kadkol & Anr.,Advs.,)
:JUDGMENT:
This case arises out of the private 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 accused No.2 is the father of the accused No.3 and the accused are practicing as charted accountants in the name and style of the accused No.1. The accused No.2 had approached the complainant for purchase of office premises No.303 in 3rd Floor of Bindu Galaxy Commercial Complex, constructed on property No.2, 1st Main Road, Industrial Town, Rajajinagara, Bangalore-
10. After negotiations the sale price was fixed at Rs.86,25,000/-. The accused No.2 was familiar and he was meeting with the Managing partner of the complainant. The accused requested the complainant to execute the sale deed for Rs.41,00,000/-.
Accordingly the agreement was prepared for the said amount to enable the registration of the same at the C.C.NO.11251/2018 2 said price and Rs.41,00,000/- was requested to be mentioned in the sale deed and also save the stamp duty. The said sale price was to be mentioned in the sale deed and agreement to enable the accused No.3 to seek loan from the ICICI Bank. The accused had agreed to pay sale price of Rs.86,25,000/-. Though it was agreed to register by showing the price of Rs.41,00,000/- to save stamp duty and the accused have gained confidence of the complainant by paying a sum of Rs.16,25,000/- through cheques issued by the accused by way of part payment from 08.09.2017 till 11.12.2017. The sale deed was registered by receiving further sum of Rs.39,00,000/- in favour the accused No.3 by the complainant on 20.12.2017. As on dated of execution of sale deed the accused were in arrears of Rs.31,00,000/- which were required to be paid to complete the payment of sale transaction.
3. It is further stated that the accused have arranged to send Rs.6,00,000/- towards the said balance, through RTGS from the account of one Smt.Virali.K.Shah. Further stated that towards the payment of balance amount of Rs.25,00,000/- the accused No.2 representing the accused No.1 had issued the cheque No.185477 dated: 01.03.2018 drawn on Bank of India, Bangalore Main Branch, Bangalore. The complainant presented the said cheque for encashment through its banker i.,e Kotak Mahindra Bank, Malleshwaram branch, Bangalore, but the said C.C.NO.11251/2018 3 cheque was dishonored on 06.03.2018 with an endorsement "Exceeds Arrangement" in the account of the accused No.1. Thereafter on 09.03.2018 the complainant got issued a legal notice to the accused persons through its counsel by RPAD calling upon them to pay the said cheque amount within 15 days from the date of receipt of the legal notice. The said notice was duly served to the accused and the accused persons had issued an untenable reply on 23.03.2018. But they have failed to make payment of 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 21.04.2018.
4. After the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 21.04.2018 to register the case in Register No.III and it was registered as a criminal case.
5. Thereafter, summonses were issued to the accused persons and the accused No.2 has appeared through his counsel and secured bail on 05.09.2018. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused No.2 alone was recorded by the court. He has pleaded not guilty and claimed to be tried. Thereafter, C.C.NO.11251/2018 4 the case against the accused No.3 is set-aside as per the orders of the Hon'ble High Court of Karnataka in Crl.P.No.5142/2018 dated: 10.04.2023.
6. The complainant in support of its case, have examined its Managing Partner as PW.1 and got marked 13 documents at Ex.P.1 to 13 and closed its side. During the course of cross examination of D.W.1 06 documents were marked at Ex.P.14 to 19 by way of confrontation.
7. After closer of the evidence of the complainant, the statement of the accused No.2 under section 313 of Cr.P.C., was recorded. He has denied the incriminating evidence appeared against him. In their defence, the accused No.2 examined himself as DW.1 and got marked 05 documents at Ex.D.3 to 7. During the course of cross examination of P.W.1 02 documents were marked at Ex.D.1 and 2 by way of confrontation.
8. I have heard the arguments on the both sides and also perused the written arguments filed by the learned counsels for the complainant and the accused and also perused the material placed on record.
9. The learned counsel for the complainant has relied upon the citations reported in (2016) 3 SCC 1, Crl.A.No.1367/2005, (2010) 11 SCC 441 and 2023(1) Kar.L.R 18.
10. The learned counsel for the accused has relied upon the citations reported in (2013) 3 SCC 86, C.C.NO.11251/2018 5 (2019) 18 SCC 106, (2019) 5 SCC 418, (2008) 4 SCC 54, (2000) 2 SCC 380, (2002) 1 SCC 234 and (2021) 5 SCC 283.
11. 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.5, towards the discharge of the legally enforceable debt/liability.?
3. Whether the complainant further proves that the cheque-Ex.P.5 was dishonored for the reasons "Exceeds Arrangement" in the account of the accused No.1 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?
12. 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;
:REASONS:
13.POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one C.C.NO.11251/2018 6 point will bearing on the another. Hence, in order to avoid repetition of facts, I have taken these two points together for common discussion. The case of the complainant is that he was acquainted with the accused. Further the accused No.2 approached the complainant for purchase of office premises No.303. After negotiations the sale price was fixed at Rs.86,25,000/-. The accused No.2 was familiar and he was meeting with Managing partner of the complainant. Further the accused requested the complainant to execute the sale deed for Rs.41,00,000/-. Accordingly the agreement was prepared for the said amount to enable the registration of the same at the said price. The price of Rs.41,00,000/- was requested to be mentioned in the sale deed and also save the stamp duty. The said sale price was to be mentioned in the sale deed and agreement to enable the accused No.3 to seek loan from bank. The accused had agreed to pay aforesaid sale price in respect of aforesaid office premises. Though it was agreed to register by showing the price of Rs.41,00,000/- to save stamp duty and the accused have gained confidence of the complainant by paying a sum of Rs.16,25,000/- through cheques issued by the accused by way of part payment. The sale deed was registered by receiving further sum of Rs.39,00,000/- in favour the accused No.3 by the complainant. As on dated of execution of sale deed the accused were in arrears of Rs.31,00,000/- which were C.C.NO.11251/2018 7 required to be paid to complete the payment of sale transaction. Towards the said balance, the accused have arranged to send Rs.6,00,000/- through RTGS from the account of one of the family member. Further towards the payment of balance amount the accused No.2 had issued the cheque in question. The complainant presented the said cheque for encashment through its banker, but the said cheque was dishonored with an endorsement as "Exceeds Arrangement". Thereafter the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon them to pay the said cheque. The accused persons had issued an untenable reply. But the accused failed to make payment of 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.
14. In support of the case, the complainant have examined its Managing Partner as P.W.1 and totally 19 documents were marked at Ex.P.1 to 19. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the certified copy of the acknowledgment of registration firms of the complainant. Ex.P.2 is the certified copy of the complainant company office note dated: 29.10.2015. Ex.P.3 is the certified copy of the partnership deed dated: 21.10.2015. Ex.P.4 is the Karnataka State Gazette Notification dated: 31.03.2017. Ex.P.5 is the C.C.NO.11251/2018 8 cheque issued by the accused in favour of the complainant dated: 01.03.2018 for Rs.25,00,000/-. Ex.P.5(a) is the signature of the accused No.2. Ex.P.6 is the bank memo dated: 06.03.2018 for informing the dishonor of the cheque as "Exceeds Arrangement" in the account of the accused No.1. Ex.P.7 is the office copy of the legal notice dated: 09.03.2018. Ex.P.7(a) to 7(c) are the postal receipts. Ex.P.8 to 10 are the postal acknowledgments. Ex.P.11 is the reply notice. Ex.P.12 is the certified copy of the deed of absolute sale deed. Ex.P.13 is the complaint. Ex.P.14 and 15 are the certified copies of the plaint and order sheet in O.S No.3532/2018. Ex.P.16 and 17 are the certified copies of plaint and order sheet in O.S No.1318/2018. Ex.P.18 and 19 are the certified copies of the plaint and order sheet in S.C No.782/2018.
15. In order to prove their defence, the accused No.2 is examined himself as DW.1 by way of affidavit and totally 07 documents were marked at Ex.D.1 to 07. In his chief examination affidavit D.W.1 has repeated the defence taken by him. Ex.D.1 is the certified copy of the deed of absolute sale deed. Ex.D.2 is the certified copy of the plaint in O.S No.8180/2019. Ex.D.3 is the certified copy of the FIR against the complaint filed by the Karishma.P.Shah. Ex.D.4 and 5 are the certified copies of the FIR and complaints. Ex.D.6 is the certified copy of the written statement in O.S No.8180/2019. Ex.D.7 is the certified copy of the C.C.NO.11251/2018 9 adoption memo filed in O.S No.8180/2019.
16. 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 by the accused. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused No.2 had approached the complainant for purchase of office premises No.303. After negotiations the sale price was fixed at Rs.86,25,000/-. The accused No.2 was familiar and he was meeting with the Managing Partner of the complainant. It is further argued that the accused had requested the complainant to execute the sale deed for Rs.41,00,000/- to save the stamp duty. Accordingly the agreement was prepared for the said amount to enable the registration of the same at the said price. Further argued that the said sale price was to be mentioned in the sale deed and agreement to enable the accused No.3 to seek loan from the bank. Further argued that the accused had agreed to pay sale price of Rs.86,25,000/- in respect of the office premises No.303 and though it was agreed to register by showing the sale price of Rs.41,00,000/-. Further the accused have agreed to paying a sum of Rs.16,25,000/- through cheques issued by way of part payment. The sale deed was registered by receiving further sum of Rs.39,00,000/- in favour of the accused No.3 by the C.C.NO.11251/2018 10 complainant on 20.12.2017. Further argued that the accused were in arrears of Rs.31,00,000/- which were required to be paid to complete the payment of sale transaction. Further argued that towards the said balance the accused have arranged to send Rs.6,00,000/- through RTGS from their family member. Further argued that the accused No.2 had issued the cheque towards the discharge of the debt payable to the complainant. As per the instructions of the accused the complainant presented the said cheque for encashment. But the said cheque was dishonored.
17. He further argued that the accused No.2 has not denied Ex.P.5 being his cheque drawn on the account of the accused No.1. When the signature of the accused No.2 is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused have 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. He further argued that the accused have failed to produce any believable evidence that he had issued the blank signed cheque for the purpose of security in respect office space No.302 and also why he has not returned back the same is not clear. He 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, C.C.NO.11251/2018 11 the accused No.2 has not disputed Ex.P.5 being his cheque drawn on the account of the accused No.1. The said presumption is available to the complainant.
18.The learned counsel for the complainant has filed written arguments. In his written argument he has reiterated the brief facts of the case. Further submits that the complaint filed by the complainant is marked as Ex.P.13. Thus, as said above, the complaint is filed in accordance with the requirement of section 138 of N.I.Act. The accused have admitted the issue of cheque and also dishonoring of the cheque. The cheque is drawn by the accused on the account maintained by the accused with its bank. In view of law laid down by the Hon'ble Supreme Court of India in the judgments which are made available to the court, reported in 2016(3) SCC 1, Crl.A.No.1367/2005 dated:
26.10.2005, 2010 (11) SCC Page 441, 2023(1) KLJ 18.
In view of the law laid down by this court referred to above, the complainant has discharged the burden that the accused have issued a cheque drawn on the bank where the accused is holding the account and thus, presumption arises in favour of the complainant. Under the circumstances, whether the accused have discharged the onus of displacing the presumption, is the question that is to be considered by this court.
19. Further submits that section 19 of the partnership act only speaks about the implied authority.
C.C.NO.11251/2018 12 None of the provisions of section 19(2) (a) to (f) applies to the facts of the present case as they do not relate to the authority of partners to present a complaint before the court. Section 20 of the partnership act provides that by contract between the partners, the authority of the partner can be extended or restricted as the case may be. The complainant have produced the certificate of registration of firm at Ex.P.1, the complaint have also produced the extract of the register maintained by the registrar of firms as per Ex.P.2, Ex.P.3 is the partnership deed. Clause 7(iii) of Ex.P.3 empowers the first-partner (Sri.Jayesh.Z.Shah) to institute, prosecute and defend all legal and other proceedings on behalf of the firm. In view of the same, Sri.Jayesh.Z.Shah who is examined as PW.1 in the above case, is the authorized person empowered to file the above complaint and prosecute the same. Hence, the contentions advanced by the accused persons that Sir.Jayesh.Z.Sha is not empowered to maintain the complaint and that all the partners ought to have filed a complaint does not survive for consideration. Even otherwise, each partner is an agent of the other partner in terms of section 18 of the partnership act. Hence, also the said contention does not survive for consideration and the same is an untenable one and further, no such contentions were advanced by the accused in this case.
20. It is further submits that the office unit bearing No.303 forming part of the Commercial Complex known C.C.NO.11251/2018 13 'Bindu Galaxy' constructed on the property No.2, 1 st Main Road, Industrial Town, Rajajinagar, Bengaluru, was negotiated for sale between the parties. The accused has taken part in the negotiations and they agreed to pay the sale consideration of Rs.86,25,000/-. But the sale deed was registered for Rs.41,00,000/- in favour of Smt.Karishma.P.Shah, the daughter of the accused (Paresh.S.Shah) on 20.12.2017. Prior to the registration of the said sale deed, talks were concluded between the parties agreeing for the sale consideration of Rs.86,25,000/-. The consideration is paid admittedly in (a) In para-5 of Ex.P.11 it is stated by the accused as "no same person will agree for sale consideration more than the guidance value of the said property". (b). As per the Gazette Notification produced at Ex.P.4 dated:
31.03.2017, the guidance value is fixed for the property in question at Rs.1,13,400/- per Sqr.Mtrs of the super built-up area.
(i). The super-built-up area of the office space No.303 which is the subject matter of the sale under Ex.P.12. The super-built-up area of the office space No.303 is 725 Sqr.,ft. In the cross examination dated:
10.04.2024 DW.1 admits that the guidance value is fixed as per Ex.P.4 at the rate of Rs.1,13,400/- per sqr.,mtr of the super built up area. It is also admitted that the super built up area of the said office space is 725 sqr.,ft. or 67.35 sqr.,mtrs and therefore, the guidance value is 67.35 sqr.,mtrs X Rs.1,13,400/- = C.C.NO.11251/2018 14 Rs.79,28,928/-. In view of the same, the fact that the sale price of the said office space was fixed at Rs.86,25,000/- is acceptable evidence on behalf of PW.1. (ii). Prior to the execution of the sale deed, the accused has transferred Rs.14,25,000/- as admitted in the reply notice-Ex.P.11 also in the cross examination of DW.1 and further the accused has issued a cheque for Rs.25,00,000/- and a sum of Rs.6,00,000/- was transferred from the account of Virali.K.Shah on 29.12.2017. There is no dispute about the payment which are made. Rs.41,00,000/- was paid under Ex.P.12. Therefore, the total sale consideration agreed between the parties worth out to Rs.86,25,000/- for which sale deed is executed as per Ex.P.12 but the same is registered for Rs.41,00,000/-. If the sale price was not fixed at Rs.86,25,000/- the question of transferring of Rs.14,25,000/- prior to the registration of Ex.P.12 and issue of the cheque for Rs.25,00,000/-
would not have arise at all. Further immediately after the registration of Ex.P.12, the balance amount of Rs.6,00,000/- is transferred from the account of Virali Shah when no talks were held for sale premises No.302 in favour of Virali Shah. (iii). DW.1 in the course of cross examination dated: 10.04.2024 has admitted that he has issued the cheque for Rs.25,00,000/- and he further stated that the said cheque was issued towards the office space bearing No.302 and 303 as a guarantee.
C.C.NO.11251/2018 15
21. It is further submits that the defence of the accused that the cheque-Ex.P.5 for Rs.25 Lakhs was issued to guarantee the payment of the sale price payable in respect of office space No.302 for the benefit of Virali Shah is unbelievable for these reasons.
a). That the Accused has admitted in the cross- examination dated: 06.07.2024 for the sale price was fixed for office space No.303 before the registration of the Sale Deed at Ex.P.12 dated 20.12.2017. b). The Accused has admitted that as on the date of execution of Ex.P.12, no talks of sale transactions were held in regard to the office space No.302. He further admits that as on the date of execution of Ex.P.12, the price for the office space No.302 was not held and therefore, the question of issuing the cheque at Ex.P.5 in respect of office space No.302 does not arise at all. c). In para 8 of Ex.P.11 the portion marked as Ex.P.11(a) is relevant for being looked into. As per the said recitals in Ex.P.11(a) it is admitted that the cheque in question i.e, Ex.P.5 was issued at the time of negotiations of the sale price in the beginning itself. It is contended that the said cheque was issued in respect of office premises No.302 and 303. But as admitted by the accused himself in the cross-examination, no talks were held in regard to office space No.302 prior to the registration of the Ex.P.12. Under the circumstances, when negotiations were not held in respect of office space No.302 prior to the execution of Ex.P.12 in respect of C.C.NO.11251/2018 16 office space No.303, the plea that the cheque was issued in respect of office premises No.302 is a false plea raised by the Accused.
22. It is further submits that plea with regard to the issue of cheque towards the sale consideration of premises No.302 is an untenable plea raised by the accused for these reasons. a). The accused has admitted the filing of the suit by Smt.Virali.V.Shah as per the plaint in O.S No.3532/2018. The order sheet of the said suit is produced at Ex.P.14. The plaint is produced as Ex.P.15. In the plaint at Ex.P.15, it is not stated that Smt.Virali.V.Shah has paid a sum of Rs.6 Lakhs as advance amount towards the office space No.302. Further, she has not stated that the accused- Paresh Shah, has issued a cheque for Rs.25 lakhs towards the alleged guarantee of payment of consideration for office space No.302. b). The accused in the course of cross examination dated: 10.4.2024 has stated that Smt.Virali Shah and Mr.Kunal Shah are residing separately from March, 2017. It is also stated that from March 2017, till today the accused has not looked after any transaction of the said Virali Shah and Kunal Shah. It is further stated that from March 2017 the Accused is not looking after the financial transactions of Virali Shah and Kunal Shah. Therefore, the plea of the accused that he offered himself as a guarantor to make payment of the sale price in respect office premises No.302, is untenable.
C.C.NO.11251/2018 17
c). Smt.Karishma Shah, the daughter of the accused has filed O.S No.1318/2018 marked as Ex.P.16 and SC No.782/2018 marked as Ex.P.18. In both suits, no whisper is made that the accused was guarantor for the payment of the sale price on behalf of Virali Shah though the reference is made to the alleged transactions in regard to office space No.302 in para 8 of Ex.P.16 and Para 8 of Ex.P.18. d). The accused has produced the copy of the plaint filed by Virali Shah and her husband in O.S No.8180/2019. It is significant to notice that the said suit is filed after withdrawing O.S No.3532/2018. The plaint in O.S No.8180/2019 is produced by the accused and marked as Ex.D.2. In Ex.D.2 not even a whisper is made that the accused as a guarantor to make payment for the price of office space No.302 had issued the cheque for Rs.25 lakhs i.e., Ex.P.5. e). In the cross-examination dated:
06.07.2024, DW.1 stated that 'he does not know whether Virali Shah has the information about the issue of cheque for Rs.25 lakhs in regard to office space No.302". f). DW.1 further states in the cross-
examination dated: 06.07.2024 that "he does not know that Virali shah has filed O.S No.8180/2019 as per Ex.D.2. He further states that he does not know who has secured the certified copy of Ex.D.2. g). The contention in Ex.D.2 are advanced to suit the defence of the accused and to do so, the earlier suit filed in O.S No.3532/2018 is withdrawn and fresh suit as per C.C.NO.11251/2018 18 Ex.D.2 is filed. The comparison of the pleadings in the both the suits itself reveals that the contents in Ex.D.2 have vastly undergone change as compared to the contents in Ex.D.15.
23. It is further submits that the accused has filed a false complaint against the parents and employees of the complainant-firm. In the cross-examination dated:
06.07.2024, the accused states that "he does not want to answer about the filing of false complaints against the complaint-firm and its employees". The accused declines to answer to the question "that the copies of the complaints filed by the accused are all false complaints". Hence, he prays to allow the complaint and award a sentence directing the accused to pay double the amount of the cheque as compensation to the complainant apart from imposing from other penalties.
24. The learned counsel for the accused argued that the accused had issued a blank cheque to the complainant for the purpose of security the payment of sale price payable in respect of office space No.302. Further the complainant have misused the said blank cheque and filed false complaint against the accused. Further argued that the accused has never admitted regarding repayment of the said amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay the amount of C.C.NO.11251/2018 19 Rs.25,00,000/- to the complainant. He further argued that PW.1 in his chief examination reiterated the above narrated averments of the legal notice and the complaint. The accused denied the complaint averments. The accused took up contention that the complainant had collected the blank cheque from the accused for the security purpose. Further the accused took up a contention that his daughter already paid entire amount to the complainant, hence he is not liable to pay the amount covered under the cheque. Further argued that the complainant miserably failed to prove the complaint averments. The complainant unable to prove that the subject cheque was issued in discharge of duly enforceable debt/liability. The complainant have not come with a clean hands before this court. Indubitably, Ex.P.12, the document relied on by the complainant would indicate that as on the date of execution of the sale deed the complainant has received the entire amount. As on the date of the presentation of the cheque the accused is not liable to pay the amount covered in the subject cheque to the complainant. The complainant in order to harass the accused fill up the cheque and presented to the bank. Hence, the accused is not liable to pay the cheque amount.
25. Further argued that the complainant filed this false complaint against the accused for wrongful gain. Further argued that an offence punishable under C.C.NO.11251/2018 20 section 138 of N.I.Act is not attracted. The ingredients are not made out. Further argued that there is no existing legally enforceable debt/liability on the date of presentation of alleged cheque. He further argued that the accused No.2 has given the subject cheque to the complainant as security measure and the complainant have misused the same and presented the subject cheque to the bank. The complainant have deliberately with held the cheque issued by the accused, even after the complainant not executed the sale deed in respect of office space No.302, the complainant instead of returning the cheque to the accused, whereas the subject cheque by filing up the date in order to make wrongful gain by adopting arm twisting tactics. The accused have successfully rebutted the presumption under Section 139 of the Act by leading defence evidence to show that there is no legally enforceable debt/liability between the complainant and the accused. The complainant have failed to prove its case on any grounds. In fact there is no cause of action to file the complaint against the present accused. Further argued that the complainant have not produced any documents before this court to prove their case. Viewed from any angle, the complaint is misconceived not maintainable either in law or on facts and the same is liable to be dismissed with the costs.
26. The learned counsel for the accused has filed written argument. In the written argument it is submits C.C.NO.11251/2018 21 that the above case has been filed by the complainant alleging acts of dishonor of cheque, said to have been issued by the accused No.1 entity, which was signed by the accused No.2 in relation to a transaction of sale, which had allegedly materialized between the Complainant and one Karishma P.Shah. The sale deed dated: 20.12.2017, which has been marked as Ex.P.12 in the case has been executed between the complainant and the accused No.3, specifies a sale consideration of Rs.41,00,000/-. In terms of the sale deed, which document is marked as Ex.P.12 and which has been executed between the complainant and Ms. Karishma Shah who was earlier arraigned as the accused No.3, the entire sale consideration of Rs.41,00,000/- has been fully paid by Ms.Karishma Shah to the complainant. Hence, there is no outstanding debt or liability on the part of the purchaser under the said document i.e., Ms.Karishma Shah, that could justify the issuance of the cheque in question by the accused No.1 which is alleged to have been signed by the accused No.2. Further the complainant during the course of his cross examination is admitted that no other document whatsoever has been executed between the parties other than the said sale agreement and sale deed in relation to the alleged transaction. It has also been forthcoming from the deposition of the complainant that the agreed amount of Rs.41,00,000/- as per the sale deed referred to supra have been duly C.C.NO.11251/2018 22 received by the complainant entity. It is pertinent to note that the complaint filed by the complainant has been filed without any authorization on behalf of the complainant entity. When a company or partnership firm files a complaint under Section 138 of the Negotiable Instruments Act, the individual representing the entity on behalf of which he is filing the complaint must be duly authorized to do so. In the above case, the alleged representative of the complainant entity- one Mr.Jayesh.Z.Shah has not furnished any authorization letter, board resolution, or any other document to establish that the individual who filed the complaint was authorized to act on behalf of the complainant in the above case.
27. Further submits that such lack of authorization renders the complaint defective and unsustainable as it does not deserve consideration of this Court. Proceeding with the assumption that the individual who has presented the complaint is authorized to do so, though not conceding, the complainant has failed to prove the existence of any legally enforceable debt on the part of the accused. In the case of "Rangappa V/s. Sri.Mohan" reported in (2010) 11 SCC 441, the Hon'ble Supreme Court highlighted that the existence of a legally enforceable debt is a fundamental requirement for a complaint under Section 138 of the Negotiable Instruments Act and he has reiterated the para No.27 and 28 of the aforesaid citation. Further submits that C.C.NO.11251/2018 23 the complainant has alleged that the sale consideration for the property was Rs.86,25,000/- which is not borne out of any records let alone the registered sale deed agreement between the complainant and one Karishma Shah which categorically mentions the consideration as Rs.41,00,000/-. No document whatsoever has been produced/adduced by the complainant during the course of recording of evidence in the case that the sale consideration in relation to the subject matter of the above is Rs.86,25,000/-. The complainant's allegation of a higher sale consideration is not supported by any documentary evidence and appears to be an afterthought aimed at unjustly enriching themselves.
28. It is further submits that the sale deed is a registered and legally binding document, any claim beyond the sale consideration amount mentioned in the said document, which infact is produced and relied upon by the complainant, is not enforceable under the law and cannot not form the basis of any liability under Section 138 of Negotiable Instruments Act. Further in his written argument he has relied upon the citation of M.S. Narayan Menon @ Manvi V. State of Kerala & Anr. reported in (2006) 6 SCC 39, the Hon'ble Apex Court has held as follows;
"In view of the aforementioned backdrop of events, the questions of law which had been raised before us will have to be considered. Before we C.C.NO.11251/2018 24 advert to the said questions, we may notice the provisions of Sections 118(a) and 139 of the Act which read as under:
"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;
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."
Presumptions both under Sections 118(a) and 139 of the Act are rebuttable in nature.
29. In terms of section 4 of the Evidence Act whenever it is provided by the Act that the court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words"proved" and "disproved" have been defined in Section 3 of the Evidence Act (the interpretation clause) to mean:
"Proved'- A fact is said to be proved when, after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
'Disproved'- A fact is said to be disproved C.C.NO.11251/2018 25 when, after considering the matter before it, the court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist."
30. Applying the said definitions of "proved" or disproved" to the principle behind Sections 118(a) of the Act, the court shall presume a negotiable instrument to be for considerations unless and until after considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies."
29. The issuance of the said cheque was only a security towards the sale consideration for the purchase of the office premises until the completion of the sale transactions and registration of the Sale Deed pertaining to office premises bearing Nos.302 which was purchased by one of the family members of the accused No.2. The perusal of the categorical C.C.NO.11251/2018 26 admissions made by the authorized representative of the complainant who has been examined as PW.1 in the case could indicate that there is no evidence in support of the say that the accused No.1 had issued the subject cheque in relation to the transactions which had materialized between the complainant and one Karishma Shah. Infact, PW.1 has conceded to the fact that there are pending litigation's between the complainant and the family members of the accused No.2 in relation to which the accused No.1 had issued the subject cheque which was signed by the accused No.2. Knowingly fully well of the said fact, the complainant with a malafide intention of scuttling the rights of the family members of the accused No.2 in the property which they had purchased from the complainant has misused the same and painted it with a false narrative that the subject cheque was issued in relation to the transaction which the complainant had with one Karishma Shah, which transaction infact was concluded long ago.
30. Further submits that the statutory notice issued by the complainant which is the foundational document for the above case is defective in as much as the amounts which the complainant intends to claim against the accused is different from the amounts appearing in the subject cheque. In such view of the matter, the complaint filed by the complainant on the basis of such defective notice ought not to be C.C.NO.11251/2018 27 entertained and consequently, the accused are entitled for a judgment of acquittal at the hands of this court. Hence, he prays to pass judgment of acquittal of the accused No.1 and 2 from the alleged commission of an offence under section 138 of N.I.Act.
31. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused No.2 has not seriously disputed he had issued the cheque-Ex.P.5 in favour of the complainant. Further it is not disputed that the cheque in question issued by the accused No.2 in the account of the accused No.1 in favour of the complainant. It is not disputed that the complainant is a partnership firm and the accused No.2 is a charted accountant. The accused in order to repayment of said amount had issued the cheque- Ex.P.5 in favour of the complainant. Whereas, the accused No.2 has contended that he had given signed chaque to the complainant for the purpose of security. When he had given cheque which was blank. The accused has specifically denied having debt/liability had issued the cheque-Ex.P.5 on 01.03.2018 for repayment of the due amount. He contends that the blank cheque given by the accused to the complainant as was misused by the complainant and false complaint was filed against the accused.
32. In order to attract the offence punishable under section 138 of N.I.Act, the main ingredients of C.C.NO.11251/2018 28 the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused No.1 was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Managing Partner as PW.1 and 19 documents were marked at Ex.P.1 to 19. In chief examination, PW.1 has repeated the averments made by the complainant in the complaint. In the present case, the accused No.2 has not disputed Ex.P.5 being his cheque drawn on the account of the accused No.1. The said presumption is available to the complainant. In the complaint it is stated that the accused in order to clearing the outstanding due had issued the cheque in favour of the complainant. This fact is also stated in the notice as well as in the evidence. This fact is not disputed by the accused.
33. Under 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 have disputed the existence of legally enforceable debt/liability, for which the cheque in question was issued. PW.1 during his cross- examination has specifically denied the suggestions made to him that the cheque was issued to the complainant for the purpose of security of the sale price C.C.NO.11251/2018 29 payable in respect of office space No.302.
34. 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 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 have 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 No.2 that he had given signed cheque to the complainant for the purpose of security. Further his daughter already paid entire sale consideration amount to the complainant and there is no due to the complainant. Except, the said defence, he has not produced any materials to prove such defence. Further DW.1 in his cross examination has specifically admits that as on the date of execution of sale deed as per Ex.P.12, no talks of sale transactions were held in regard to the office space No.302. When the there is no talks of sale transaction was not held, then question of issuing the subject cheque in respect of the office space No.302 does not arise at all. Further if the accused had given signed cheque to the complainant for the purpose of security of the sale price payable in respect of office space No.302 and when the complainant not executed the any sale deed in respect of aforesaid property, what prevented the accused to C.C.NO.11251/2018 30 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 charted accountant and having knowledge of the financial transaction, why he has given blank signed cheque to the complainant for the purpose of security 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 cheque. Moreover, immediately after the alleged cheque-Ex.P.5 misused by the complainant he has not lodge any complaint before concerned police station. No steps have been taken to receive back the cheque, after he came to know about the same.
35. Further the learned counsel for the accused has taken the defence that the complaint filed by the complainant has been filed without any authorization on behalf of the complainant entity. When a company or partnership firm files a complaint under Section 138 of the Negotiable Instruments Act, the individual representing the entity on behalf of which he is filing the complaint must be duly authorized to do so. In the above case, the alleged representative of the C.C.NO.11251/2018 31 complainant entity one Mr.Jayesh.Z.Shah has not furnished any authorization letter, board resolution, or any other document to establish that the individual who filed the complaint was authorized to act on behalf of the complainant in the above case. Further contention that such lack of authorization renders the complaint defective and unsustainable as it does not deserve consideration of this Court. Proceeding with the assumption that the individual who has presented the complaint is authorized to do so. In this case the complainant have produced the certificate of registration of firm and marked at Ex.P.1, the complainant have also produced the extract of the register maintained by the registrar of firms as per Ex.P.2. Ex.P.3 is the partnership deed. In clause 7(iii) of the partneship deed empowers the first-partner i.e., Managing partner to institute, prosecute and defend all legal and other proceedings on behalf of the firm. In view of the same, Sri.Jayesh.Z.Shah who is examined as PW.1 in this case, is the authorized person empowered to file the above complaint and prosecute the same. Hence, the contentions advanced by the accused that PW.1 is not empowered to maintain the complaint and that all the partners ought to have filed a complaint does not survive for consideration. Even otherwise, each partner is an agent of the other partner in terms of section 18 of the partnership act. Hence, also the said contention does not survive for C.C.NO.11251/2018 32 consideration.
36. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that cheque was issued by the drawer for legally payable debt or 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-Ex.P.5 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 the complainant case.
37. Further the complaint filed within statutory period. That consequent to the non-payment of the cheque amount so demanded by the complainant within the statutory period, the complainant have filed C.C.NO.11251/2018 33 the present complaint, which is well within limitation. Hence, contention of the accused cannot be considered that the cheque in question was issued for the purpose of security. It is clear that there is no prohibition either in insolvency act or Negotiable Instruments Act for the complainant to approach the criminal court. The bar is extended to only civil detention and civil arrest, it would not cover under section 138 of the Negotiable Instruments Act.
38. Further the accused No.2 has taken contention that the cheque was given to the complainant for the purpose of security for the payment of the sale price payable in respect of the office space No.302. Further at the time of execution of sale deed the complainant have received entire sale consideration amount. Further the accused have no due to the complainant. Hence, an offence punishable under section 138 of N.I.Act is not attracted. In this regard once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is C.C.NO.11251/2018 34 dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
39. 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.
40. In the case of Kalamani Tex and another V/s C.C.NO.11251/2018 35 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 instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
41. 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 their defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
42. It is not in dispute that bounced cheque belongs to the bank account of the accused No.1. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused No.2. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused No.1 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 not produced any documents in this regard. It was also contended by the accused that he had given cheque to the complainant for the purpose of security. The said blank cheque was misused by the C.C.NO.11251/2018 36 complainant. In order to prove their defence have failed to produce any believable evidence before this court.
43. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing 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 cheque leaves from the accused, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque. 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.5-cheque. Further he could have issued notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of cheque against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
44. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment C.C.NO.11251/2018 37 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.5 being his cheque drawn on account of the accused No.1. 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 also cheque return memo- Ex.P.6 it is established that the cheque was dishonored for the reasons "Exceeds Arrangement'' in the account of the accused No.1. A legal notice being issued as per Ex.P.7 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused No.2 has not disputed regarding notice sent by the complainant on his address. The accused have given reply to the said notice. In the case on hand the notice is sent to the accused at their address. When the accused have not seriously disputed the address, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
45. It is not the contention of the accused that thereafter he has repaid 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 C.C.NO.11251/2018 38 under section 138 N.I.Act, have been complied with. As the accused No.2 has not paid the cheque amount within stipulated period, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even the accused No.2 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, they must explain what are the defences he wants to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
46. 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 C.C.NO.11251/2018 39 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.
47. The accused No.2 has contended that except signature other writings on cheque-Ex.P.5 is not in his hand writings, which were filled up by the complainant and it amounts to material alterations. As narrated above. When the accused admits his signature, he cannot take up a defence that other contents of cheque were filled up by the complainant and it amounts to material alteration. In this respect, 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 C.C.NO.11251/2018 40 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."
48. The principles emerging from the above referred decision make it clear that, it is not mandatory and no law prescribes that the contents of cheque should be written by the signatory to the cheque. A 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 laiddown in above decisions 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.
49. As per the version of the accused is that the accused has nowhere denied transaction. The accused C.C.NO.11251/2018 41 No.2 himself has admitted that the accused No.1 is the holder of alleged cheque. It is sufficient hold that the accused No.2 has issued the cheque-Ex.P.5 and even after the accused No.2 has not paid 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 138 of N.I.Act. 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. The accused is liable for dishonor of the cheque. Accordingly, PW.1 has established the case of the complainant, the accused No.2 has issued the cheque- Ex.P.5 in favour of the complainant in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him that the blank cheque given to the complainant for the purpose of security and there is no due amount to the complainant. Therefore, the accused have failed to rebut the 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 financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
50. PW.1 in his evidence has specifically stated that the accused in order to repayment of the due amount to the complainant, he had issued the C.C.NO.11251/2018 42 subjected cheque 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, the accused No.2 has issued the cheque in question in favour of the complainant for the purpose of payment of due. When the cheque was presented to the bank same was dishonored as "Exceeds Arrangement", this is not seriously disputed by the accused. The accused have failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused have failed to probables his defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
51. POINT NO.3 AND 4: These two 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, I have taken these two points together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.5 being his cheque drawn on the account of the accused No.1 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. The accused No.2 has not taken up any contention that thereafter he had paid the C.C.NO.11251/2018 43 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. In this case, if the accused had issued the blank cheque in favour of the complainant for the purpose of security of payment of the sale price in respect of office space No.302 and why he have not produced any documents. After service of notice the accused not paid the cheque amount to the complainant. Hence, the present complaint came to be filed before the court on 21.04.2018 within the period of one month from the date of cause of action. 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 under 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. With these reasons, I answer point No.3 and 4 in the Affirmative.
52. 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 C.C.NO.11251/2018 44 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 are convicted for the offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused No.2 is hereby stands canceled.
As per the order of the Hon'ble High Court of Karnataka, the case against the accused No.3 is set aside.
The accused No.1 and 2 are sentence to pay fine of Rs.26,00,000/- (Rupees twenty six lakhs only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.25,80,000/- (Rupees twenty five lakhs eighty 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.20,000/- (Rupees twenty thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused No.2 shall undergo C.C.NO.11251/2018 45 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 10 th day of September 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.09.11 16:10:00 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Jayesh.Z.Shah.
List of documents marked on behalf of the complainant:
Ex.P.1 : Certified copy of the acknowledgment of registration firms of the complainant. Ex.P.2 : Certified copy of the complainant company office note.
Ex.P.3 : Certified copy of the partnership deed. Ex.P.4 : Karnataka State Gazette Notification dated:
31.03.2017
Ex.P.5 : Cheque.
Ex.P.5(a) : Signature of the accused No.2.
Ex.P.6 : Bank memo.
Ex.P.7 : Office copy of the legal notice.
Ex.P.7(a) to 7(c) : Postal Receipts.
Ex.P.8 to 10 : Postal acknowledgments.
Ex.P.11 : Reply notice.
Ex.P.11(a) : Portion of reply notice.
Ex.P.12 : Certified copy of absolute sale deed.
Ex.P.13 : Complaint.
Ex.P.14 & 15 : Certified copies of the plaint and order sheet
in O.S No.3532/2018.
Ex.P.16 & 17 : Certified copies of plaint and order sheet of
O.S.No.1318/2018.
Ex.P.18 & 19 : Copies of the plaint and order sheet of
C.C.NO.11251/2018
46
S.C.No.782/2018.
List of witnesses examined on behalf of the accused:
DW.1 : Sri.Paresh.S.Shah.
List of documents marked on behalf of the accused:
Ex.D.1 : Certified copy of the deed of absolute sale deed. Ex.D.2 : Certified copy of the plaint in O.S.No.8180/2019.
Ex.D.3 : Certified copy of the FIR.
Ex.D.4 & 5 : Certified copies of the FIR and complaint.
Ex.D.6 : Certified copy of the written statement.
Ex.D.7 : Certified copy of the adoption memo.
Digitally
signed by
SOUBHAGYA
SOUBHAGYA B BHUSHER
B BHUSHER Date:
2024.09.11
16:10:07
+0530
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
C.C.NO.11251/2018
47
10.09.2024 (Judgment pronounced in the Open Court
Vide Separate Sheet)
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused are convicted for the offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused No.2 is hereby stands canceled.
As per the order of the Hon'ble High Court of Karnataka, the case against the accused No.3 is set aside.
The accused No.1 and 2 are sentence to pay fine of Rs.26,00,000/- (Rupees twenty six lakhs only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.25,80,000/- (Rupees twenty five lakhs eighty 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.20,000/- (Rupees twenty thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused No.2 shall undergo simple imprisonment of six months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.11251/2018 48 Case again called out 12.45 P.M. Accused No.2 and his counsel are present.
The learned counsel for the accused has filed application under section 389 of Cr.P.C, seeking suspension of execution of sentence on the ground that accused are willing to prefer an appeal against the conviction judgment passed by this court.
Heard and perused and I proceed to pass the following:
ORDER Application filed under section 389 of Cr.P.C is hereby allowed and the execution of sentence is suspended for a period of one month from the date of judgment subject to execution of personal bond of Rs.5,00,000/-.
At this stage the learned counsel for accused has submitted that at the time of enlarging the accused on bail he furnished the surety and the same surety to the accused till the date of appeal period. Hence, Office to take bond accordingly.
XXVIII ACJM, B'luru City.