Bangalore District Court
Is Company Registered Un The Company'S ... vs Through Rpad Which Was Not Claimed By The ... on 25 July, 2015
IN THE COURT OF THE XLII ADDL.CHIEF METROPOLITON MAGISTRATE,
NRUPATHUNGA ROAD, BANGALURU CITY
Dated this the 25th day of July 2015
PRESENT: Annugouda. V. Patil., B.Com, LLB (Spl)
XLII A.C.C.M., Bangaluru City.
JUDGMENT UNDER SECTION 355 OF Cr.P.C.
1. Sl.No. of the case : CC.No.10349/2014
2. The date of commence : 16.04.2015
3. The date of Institution : 22.02.2014
4. Name of the Complainant : M/s Kalpetta Janakshema
Maruthi Chits (Karnataka)
Private Limited a Company
Registered under the Company's
Act of 1956 represented by its
GPA Holder and Zonal Manager
Sri. Devakumar having its
Registered office at No.20
Renuka Complex, 2nd A Main
New Thippasandra
Bangalore-560 075.
5. Name of the Accused : Sri. Ganesh B Shetty
Major in Age
S/o Boja Shetty
2 C.C.No.10349/2014
MSR Medical Canteen, MSR Campus
Mathikere, Bangalore-560 054.
6. The offence complained
of or proved : U/s.138 of N.I. Act
7. Plea of the accused on
his examination : Pleaded not guilty
8. Final Order : Accused found guilty
9. Date of such order : 25.07.2015.
JUDGMENT
1. This case has been registered against the accused on the basis of the complaint filed by the complainant u/s 200 of Cr.P.C. for the offence punishable u/s 138 and 142 of Negotiable Instrument Act.
2. The brief facts of the complainant's case are that:
Complainant is Company registered un the Company's Act and is engaged in the business of conducting chits including prize, auction, tender and other chits and generally to undertake the business of Chit Funds of all kinds allowed by law from time to time. The accused became subscriber to Chit Group No. MP 11 at Mathikere Branch, Bangalore and successful bidder of the said chit. Towards subscription dues and other charges the accused had issued a cheque bearing No.966146 dated: 23.12.2013 for Rs.73,160/- drawn on Corporation Bank, RMV Extension Branch, Bangalore. The 3 C.C.No.10349/2014 complainant presented the above cheque for payment through their banker i.e., the Federal Bank, R.T.Nagar Branch, Bangalore. The said cheque was returned with shara "Funds Insufficient". To that effect the complainant banker issued memo dated: 30.12.2014. Thereafter the complainant got issued legal notice on 18.01.2014 to the accused through RPAD which was not claimed by the accused and returned to the complainant's advocate on 29.01.2014. The accused deliberately not claimed the legal notice sent to him. The accused failed and neglected to pay the cheque amount within stipulated period as demanding in reply notice. According to the complainant, the accused has committed an offence punishable u/s 138 of N.I. Act. Accordingly the complainant filed the complaint on 22.02.2014.
3. In pursuance of the summons, the accused has appeared through Counsel and got enlarged on bail by executing necessary documents. The copy of the complaint was furnished to the accused, as required under law. As there is sufficient material, plea was recorded against the accused on 26.02.2015 and explained to the accused in his vernacular, for which the accused pleaded not guilty and claims to be tried.
4. In order to prove the case, the complainant examined as PW1 and got marked Ex.P1 to 12 and closed the side. Then the statement u/s 313 Cr.P.C came to be recorded on 08.07.2015, wherein the 4 C.C.No.10349/2014 incriminating evidence appearing against the accused was read over and explained. Accused denied the incriminating evidence readover to him. Accused neither adduced oral evidence nor got marked any documents on his behalf.
5. Heard the arguments and perused the records.
6. On the basis of the above facts, the following points arise for my consideration:
1) Whether the complainant proves that the accused towards discharge legal recoverable debt issued cheque No.966146 for Rs.73,160/- dated 23.12.2013 drawn on Corporation Bank, RMV Extension Branch, Bangalore in favour of complainant, on presentation for encashment it was returned as 'funds insufficient' and in spite of receipt of legal notice, the accused failed to pay the cheque amount within the statutory period and thereby the accused has committed an offence punishable u/s 138 of N.I. Act?
2) What order?
7. My findings on the above points are as under :
Point No.1: In the Affirmative Point No.2: As per final order, for the following:
REASONS
8. Point No.1:-
No.1 In order to prove the case, the General Power of Attorney Holder and Zonal Manager of the complainant Company Mr. 5 C.C.No.10349/2014 Devakumar H.D filed affidavit in lieu of examination-in-chief and has reiterated the complaint contents and oath. He also got marked documents Ex.P1 to P12. Ex.P1 is the Minutes Extract, Ex.P2 is the Notarized copy of General Power of Attorney, Ex.P3 is the cheque in question, Ex.P3(a) is the signature of accused, Ex.P4 is the cheque return memo, Ex.P5 is the sealed returned RPAD Cover, Ex.P5(a) is the Notice available in the sealed open cover which opened before this Court, Ex.P5(b) is the postal receipt, Ex.P6, Ex.P6(a) and (b) are the another three cheques said to have issued by accused, Ex.P7 is the statement of account of accused, Ex.P8 is the account extract, Ex.P8(a) is typed copy of the Ex.P8, Ex.P9 is the office copy of demand notice dated: 18.01.2014, Ex.P10 is the complaint, Ex.P11 is the Certified copy of the GPA, Ex.P12 is the resolution of the complainant company. In the cross-examination the accused has put up defence that, at the time of receiving the chit amount blank signed cheques where obtained and by misusing one of the cheque filed this false complaint. The complainant has not credited amount as per the payment made by the accused.
9. The accused has not entered into the witness box. However during the course of cross-examination of PW1 got marked Ex.D1/Pass book issued by the complainant.
10. The learned counsel for the complainant argued that, the 6 C.C.No.10349/2014 accused has not disputed that, he was subscriber of chit group No.MP11 at Mathikere Branch, Bangalore. The document Ex.D1 on which the accused placed reliance discloses that he is due to pay amount claimed made by the complainant. At page No.41 of Ex.D1 the accused himself entered last entry and shown that he paid Rs.10,000/-. The receipt number mentioned at 3rd transaction of page No.41 is similar of the receipt number shown at Sl.No.2. The accused has not produced any iota of evidence to show about on 15.09.2012 he made payment of Rs.10,000/-. The ingredients of Section 138 and 142 are duly complied with. No documents produced by the accused to establish that the complainant company, chit group MP11 at Mathikere Branch, Bangalore has not registered as claimed by the accused. Hence, according to him the complainant has proved the case against the accused.
11. Per contra, the learned counsel for the accused argued that, the complainant has not registered Mathikere Branch and not taken permission to run Chit Group No.MP11 by the complainant as required law. Prior sanction is required to run the chit company. In the instance case the complainant has not produced any document to show that, sanction is taken as required under law. According to the learned counsel for the accused the ingredients of Section 138 are complied with, but the claim made by the complainant is illegal. The 7 C.C.No.10349/2014 claim made by the complainant is not sanctioned by proper authority. There is violation of sections 4 and 9 of the Chit fund Act. If such claims are allowed it will encourage the illegal acts of the chit company. Hence, he prayed to acquit the accused. In support of his contention placed reliance following decisions.
1. 2008 CRI.L.J 895 ( Saraswathi Trading Company V/s State of Gujarat and another)
2. W.P.No.40215 of 2012 hand set (M/s Shriram Chits (K) Private Limited V/s The Additional Registrar of Co- Operative Societies.
I have gone through the decisions relied on by the learned counsel for the accused and kept in mind the observations made therein while appreciating the evidence and coming to the final conclusion.
12. In 1st decision Hon'ble High Court at Gujarath Court by taking into consideration the complainant company was neither registered partnership firm nor a company registered under the companies Act and also not registered under any other law so as to acquire a status of legal entity in eye of law. In the present case it is contention of the accused that, the sanction is not obtained as required under law. Therefore, the complainant company filed the complaint is not maintainable. It is necessary to keep in mind the accused has not produced any material to show that, the complainant company is not 8 C.C.No.10349/2014 registered as. In the second para of the complaint there is clear pleading that, the complainant company is registered under the companies Act. Accused has not denied the said allegation. That apart the accused has not produced any endorsement from the competent authority to show that, the complainant is not registered under the companies Act. In other wards on the instance case the complainant company is registered under the companies Act. Therefore, the observation made 1st citation is not applicable to the present facts of the case.
13. In 2nd decision the writ petitions were filed by the chit company stating that the subscribers are not complied with the repayment of future liability and raised disputes u/s 64 of the Chit Fund Act before the Deputy Registrar. On dismissal preferred appeal u/s 70 of Act. The appellate authority dismissed the appeals. Against those orders petitioners have filed the writ petitions before the Hon'ble High Court of Karnataka. The chit company being the petitioner fails to produce any acceptable material. Taking into consideration about the non complacence of the provisions of the chit funds Act the writ petitions were dismissed.
14. In the instance case, it is the contention of the accused that, the complainant has not complied with the Section 4 and 9 of the Chit Funds Act. Section 4 of the Chit funds Act provides for 9 C.C.No.10349/2014 prohibition of the chits not sanctioned or registered under the Act. Under this provisions no chit shall be commenced or conducted without obtaining previous sanction of the State Government and its registration in that State, in accordance with the Provisions of Act. Further provides that a sanction obtained under this section shall lapse if the chit is not registered within twelve months from the date of such sanction or within such period or periods not exceeding six months in the aggregate as the State Government may, on application made to it in this behalf allow. Section 9 provides for commencement of chit. Under Sub-Section (1) thereof every foreman shall, after all the tickets are fully subscribed, file a declaration to that effect with registrar. Sub-Section (2) empowers the Registrar, after satisfying himself about all requirements to grant a certificate of commencement to the foreman. Sub-Section (3) provides that no foreman shall commence any auction or the draw of any chit or appropriate any chit amount unless a certificate of commencement referred to sub-Section (2) is obtained by him.
15. Keeping in mind Section 4 and 9 of Chit Funds Act, if perused the present facts of the case except making suggestions to the PW1 nothing has been produced on record by the accused to show about non-compliance of the Section 4 and 9 of Chit Funds Act 1982. The accused not has made any efforts to take endorsement from proper 10 C.C.No.10349/2014 authority to establish about the non-compliance of the Section 4 and 9 of the Karnataka Chit Funds Act by the complainant.
16. It is settled law that a party who asserts the affirmative of an issue, the burden of proof lies on him to prove that fact. In the instant case it is the assertion of the accused that the complainant has not complied with Sec.4 and 9 of the Chit fund Act. The entire burden is on the accused to prove the said assertion. No efforts have been made by the accused to prove the said assertion. Except the contention taken by the accused absolutely nothing has been produced on record to show that complainant has conducted chit business in violation of the provisions of the chit funds Act. Therefore, in the considered opinion of this Court the present facts of the case are standing on different footing.
17. It is material to note that to substantiate the defence taken by the accused during the course of cross-examination of PW1 accused neither he entered the witness box nor examined any witnesses on his behalf. Nothing has been placed on record to show that complainant collected the cheque in question from the accused towards security. Non entering the witness box by the accused in fetal to his case. For the forgoing reasons on facts the citations relied on by learned counsel for accused is not applicable to the present facts of the case and I do not find any substance in the 11 C.C.No.10349/2014 arguments of the learned counsel for accused. Having regards to the facts and circumstances of the case and the material placed on record the contention taken by the accused the effect that the Ex.P3/cheque was issued towards security cannot be acceptable. In this case the accused admits the issuance of the cheque in favour of the complainant and his signature on cheque. Therefore, as per the settle law in a catena of decisions and as well as per the provision of Section 118 & 139 N.I. Act Court has to presume that the cheque has been issued for discharge of debt or liability. The said presumption is rebuttable presumption. The accused is at liberty to rebut by placing cogent and acceptable evidence. But accused has not placed any cogent material to rebut the presumption. Having regards to the facts and circumstances of the case, on appreciation of evidence placed on record it could be said that the accused fails to rebut the presumption.
18. Another contention taken by the accused is that, the complainant has misused the cheque which was taken for the purpose security. If really, the cheque was misused by the complainant taken for security purpose, in that case accused could have initiated the legal action against the complainant for the alleged mis-utilisation. At the same time it is necessary to note that, the complainant has not intimated his banker for stop payment in the 12 C.C.No.10349/2014 case the complainant presented for encashment. But in the instance case no such intimation is given by the accused to his banker for stop payment.
19. It is equally important to note that, prior to filing of the complaint; complainant got issued legal notice to the accused. Accused has not disputed the address mentioned in legal notice and postal cover. Moreover accused has not entered the witness box & stated that the address shown in the legal notice incorrect and notice is not served. Though during the course of cross-examination PW1 some hypothetical questions were posed by advocate for accused, nothing has been elicited from their mouth, so as to impeach the credibility of the said witness. The evidence on record reveals that the Ex.P9/legal notice was sent to the correct address of the accused. In the light of principle laid down by the Hon'ble Apex Court of India in a decision reported in 2007 (3) Crimes 120 (SC) (C.C. Alavi Haji V/s Palapetty Muhammed & Anr), if notice sent through RPAD by correctly addressing drawer of the cheque, mandatory requirement of issue of notice in terms of (b) of proviso to u/s 138 of N.I. Act stands complied with. The evidence on record clearly establishes that the complainant sent the notice to the accused to the correct address through RPAD. To disprove that notice is not received, accused has not entered the witness box. Therefore sending legal notice to the 13 C.C.No.10349/2014 correct address of the accused is in compliance with u/s 138(b) of N.I. Act. Admittedly accused has not repaid the cheque amount. Non initiation of legal action against the complainant for alleged misutilisation, non intimation to his banker for stop payment and non issuance of reply are sufficient to draw adverse inference against the accused.
20. The conduct of the accused could be seen from the manner in which accused has participated in the proceedings. The order sheet dated: 12.02.2015 discloses that the advocate for the accused submitted that the matter is settled for Rs.60,000/-. Taking into consideration the submission of learned Counsel for accused the case posted for settlement. That apart in the cross examination of PW1 a suggestion is made to the effect that accused is due to pay only Rs.30,000/-. This fact clearly goes to show that accused categorically admitted to the effect he is due to pay the debt to the complainant. If the complainant company is not conducting the chit business in accordance with law in that case he should not have participated in the chit business. The evidence on record discloses that the accused had received the prize amount without any objection. Now when he was asked to repay the amount received by him, accused wants to avoid payment by giving reason of violations of provisions of law that too without any acceptable cogent evidence. As noted supra accused 14 C.C.No.10349/2014 has not initiated any legal action for the alleged misutilization. Thus, the contention taken by the Advocate for accused cannot be acceptable.
21. In this case, the court has to peruse whether mandatory requirements of Sec.138 and 142 of N.I. Act are complied with or not to take cognizance of complaint for the commission of crime punishable u/s 138 of N.I. Act. It should be ascertained from the date of issuance of cheque, presentation of cheque, communication of Bank endorsement, issuance of legal notice for payment of cheque amount, service of notice and date of institution of complaint. Ex.P3/cheque is dtd. 23.12.2013, presented to the bank for encashment and received the intimation of dishonour of cheque for the reason 'Funds Insufficient' as per ExP4 dated 30.12.2013, complainant got issued notice as per Ex.P9 and served on accused on 18.01.2014. Complaint is filed on 22.02.2014. It is evident from the available material that the cheque presented for encashment within the validity time, notice demanding the cheque amount and filing of complaint before the court after service of notice are within the period of specified by law.
22. On appreciation of entire evidence, this Court is of the opinion that the accused has miserably failed to prove the fact that he has not issued cheque for discharge of legally enforceable debt. On the 15 C.C.No.10349/2014 contrary, the complainant has proved that the accused has issued cheque/ExP3 for sum of Rs.73,160/- towards discharge of legally enforceable debt and on presentation of the cheque, it was dishonored for the reasons 'Funds Insufficient'. Even after service of legal notice, the accused has not paid the cheque amount. Hence, in the considered view of this Court, the complainant has proved that the accused has committed an offence punishable u/s 138 of N.I. Act. Hence, I answer the above point No.1 in the affirmative.
23. Point No.2 No.2::- Under Section 138 of Negotiable Instruments Act if a person found guilty shall be punished with imprisonment for a term which may extend to 2 years or with fine which may extend to twice the amount of cheque or both. From the material on record, it appears that the accused is aged about 53 years. Considering the age, if the accused is sent to jail, it would cause problem to the accused as well as to his family members. Having regards to the quantum of cheque, age and occupation of the accused, the prevailing rate of interest, money value and litigation expenses, I proceed to pass the following:-
ORDER The accused is found guilty of the offence punishable u/s 138 of N.I. Act.16 C.C.No.10349/2014
Acting u/s 265 of Cr.P.C. the accused is hereby convicted and sentenced to pay fine of Rs.4,000/-, in default shall undergo simple imprisonment for 30 days.
Acting u/s 357(3) of Cr.P.C. Accused is directed to pay Rs.83,000/- to the complainant towards compensation, in default he shall undergo simple imprisonment for a period of two months.
Supply free copy of the judgment to the accused. The bail bond of the accused stands cancelled. (Dictated to Stenographer, transcribed and computerized by him, taken print out corrected, signed by me and then pronounced in the open court this the 25th day of July 2015) (Annugouda.
Annugouda. V. Patil) Patil XLII Addl. Chief Metropolitan Magistrate, Bangaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF BEHALF OF THE COMPLAINANT:-
COMPLAINANT:-
PW-1 : Devakumar H.D
COMPLAINANT:-
LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT: -
Ex.P1 : The Minutes Extract
Ex.P2 : The Notarized copy of General Power of Attorney
Ex.P3 : The cheque
Ex.P3(a) : The signature of accused
Ex.P4 : The cheque return memo
Ex.P5 : The sealed returned RPAD Cover
17 C.C.No.10349/2014
Ex.P5(a) : The Notice available in the sealed open cover
which opened before this Court
Ex.P5(b) : The postal receipt
Ex.P6, Ex.P6(a)
and Ex.P6(b) : Another three cheques issued by accused himself
Ex.P7 : The statement of account of accused
Ex.P8 : The account extract
Ex.P8(a) : Typed copy of the Ex.P8
Ex.P9 : The office copy of demand notice dated:
18.01.2014
Ex.P10 : The complaint
Ex.P11 : The Notarized copy of the General Power of
Attorney
Ex.P12 : The resolution of the complainant company
Ex.PD1 : Pass book
DEFENCE:-
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE: -Nil-
NIL
LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:-
DEFENCE -Nil-
NIL
(Annugouda.
Annugouda. V. Patil)
Patil
XLII Addl. Chief Metropolitan
Magistrate, Bangaluru.
18 C.C.No.10349/2014
Judgment pronounced in the open
court vide separate order.
ORDER
The accused is found guilty of the
offence punishable u/s 138 of N.I. Act.
Acting u/s 265 of Cr.P.C. the accused
is hereby convicted and sentenced to pay
fine of Rs.4,000/-, in default shall undergo simple imprisonment for 30 days.
Acting u/s 357(3) of Cr.P.C. Accused is
directed to pay Rs.83,000/- to the
complainant towards compensation, in
default he shall undergo simple
imprisonment for a period of two months.
Supply free copy of the judgment to
the accused.
The bail bond of the accused stands
cancelled.
XLII A.C.C.M, Bangaluru.