Bangalore District Court
Branch Office At No.103 vs No.V52 on 6 January, 2020
1
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 6th DAY OF JANUARY, 2020
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.50589/2019
M/s. Mafatlal Industries Limited,
A Company incorporated under the Provisions of
Companies Act 1956,
Havings its Registered Office at No.301-302,
Heritage Horizon, 3rd Floor, Off C.G. Road,
Navarangapura,
Ahmedabad - 380009.
COMPLAINANT
Branch Office at No.103, 1st Floor,
Prestige Tower, Residency Road,
Bengaluru - 560 025,
Reptd by its Deputy General Manager -
Mr.Rajkant Shetty,
S/o. Mr. Prathap Shetty,
Aged about 44 years.
1) M/s. Goldrush Clothings
A Registered Partnership Firm,
ACCUSED No.V52, 7th Main Road, Peenya 2nd Stage,
Bengaluru - 560 058.
Reptd by accused No.2
2
Also at No.139/2, 6th Cross,
Ganapathi Nagar, Rajgopalnagar Main Road,
Laggere,
Bengaluru 560 058.
2) Smt. Veena .N - Partner
D/o. V. Nagaraja
M/s. Goldrush Clothings
No.139/2, 6th Cross, Ganapathi Nagar,
Rajgopalnagar Main Road, Laggere,
Bengaluru 560 058.
Also at No.41, 5th Cross, Ganapathi Nagar,
Rajgopalnagar Main Road, Laggere,
Bengaluru 560 058.
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused are convicted
(K. GURUPRASAD)
XIV ADDL. C.M.M., BENGALURU
3
JUDGMENT
The present complaint is filed under Sec.200 Cr.PC for the offence punishable under Section 138 r/w 142 of Negotiable Instruments Act.
2. It is the case of the complainant that, the complainant company is engaged in business of manufacture, sale and dealings in various Textiles and Denim products including yarns, fabrics and garments etc. The accused no.1 is a partnership firm of which accused no.2 is partner and authorized signatory. The accused no.2 is looking after day-to-day affairs of accused no.1 firm. The accused purchased different types of clothes worth of Rs.22,65,507/- from the complainant company and agreed to pay the amount within 30 days. As per ledger account of the complainant, a sum of Rs.22,65,507/- is due from the accused towards purchase of goods apart from other due payments towards over due interest, costs and other charges. Towards said liability, the accused issued a cheque bearing No.924546 dtd.25.10.2018 for Rs.2,50,000/- drawn on Canara Bank, SME Peenya branch, Bengaluru in favour of the complainant. When the complainant presented the said cheque to its banker i.e Axis Bank Ltd., Richmond Road branch, Bengaluru on 4 11.12.2018 for clearance, the said cheque came to be dishonoured with bank endorsement "funds insufficient" on 12.12.2018. When the complainant got issued legal notice to the accused on 12.12.2018 calling upon the accused to pay the cheque amount, the said notice sent by registered post is returned unserved with postal shara "not claimed"
on 15.12.2018. The accused failed to pay the cheque amount in spite of issuance of said notice and as such, the accused is guilty of the offence punishable under Section 138 of N.I. Act. Hence this complaint.
3. After filing of this complaint, cognizance was taken for the offence punishable U/s.138 of N.I. Act. Sworn statement of the complainant was recorded. This court was satisfied as to prima facie case made out by the complainant for issuance of the summons. Accordingly, criminal case was registered against the accused and summons was ordered to be issued.
4. In pursuance of court process issued by this court, the accused appeared through her counsel and got enlarged on bail. Thereafter plea was recorded. The accused pleaded not guilty and claimed for trial.
5. In order to prove the case of the complainant, its Deputy General Manager and Authorized Person has 5 examined himself as CW.1 (PW.1) and got marked Ex.P1 to P18 and closed his side of evidence. Thereafter, statement of the accused U/s.313 of Cr.PC was recorded. The accused examined herself as DW.1, but got marked no documents and closed her side of defence evidence.
6. Heard both sides. Perused the complaint, evidence on record and court records.
7. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused has issued a cheque in question in discharge of legally enforceable debt or liability as contended by the complainant?
2) Whether the complainant further proves that the accused committed the offence punishable under Section 138 of Negotiable Instruments Act?
3) Whether the complainant is entitled for the relief's as prayed in the complaint?
4) What Order?6
8. The above points are answered as under;
Point No.1 to 3 : In affirmative, Point No.4 : As per the final order, for the following.......
REASONS
9. Point Nos. 1 and 2: Since these two points are inter linked and to avoid repetition they are taken together for discussion.
10. As regard to limitation to file this complaint, Ex.P1 is cheque dated 25.10.2018 drawn on Canara Bank, SME Peenya branch, Bengaluru in favour of the complainant. Ex.P2 is cheque return memo dated 12.12.2018 issued by Axis Bank, Richmond Road, Bengaluru. Ex.P3 is copy of legal notice dtd.12.12.2018 got issued by the complainant to the accused. Ex.P4 to P8 are the postal window receipts issued by postal department for having sent Ex.P3 notice to accused at different addresses on 12.12.2018. Ex.P9 to P13 are the postal covers in which Ex.P3-notice was sent by registered post to the accused at different addresses but which have returned unserved with different postal endorsements. It is clear from Ex.P9 and P13 and the said postal covers have 7 returned with postal endorsement as "left" on 15.12.2018. It is clear from Ex.P10 and Ex.P11 that the such postal covers have returned with postal endorsement dtd.15.12.2018 as "addressee refused". It is clear from Ex.P12 that the such postal cover has returned with postal endorsement dtd.17.12.2018 as "no such firm in this address". It is clear from Ex.P1 to P13 that when the complainant presented said cheque to its banker i.e Axis Bank, Bengaluru, the said cheque came to be dishonored on 12.12.2018 with bank shara "funds insufficient" and that when the complainant got issued Ex.P3-notice to the accused by registered post on 12.12.2018, it was returned with postal endorsements "left" dtd.15.12.2018, "refused" dtd.17.12.2018 and "no such firm in this address"
dtd.17.12.2018. As per Sec.27 of General Clauses Act that when notice is issued by registered post at correct address, the said notice is presumed to have been served on the addressee. The burden of rebutting said presumption is on the person who disputes service of said notice. In the present case on hand, the accused has not adduced any evidence on record to show that the addresses shown in the notices or postal covers are incorrect or that such notices have not been actually served on her. In other words, the accused has utterly failed to said presumption.8
Hence, it can be concluded that Ex.P3-legal notice is duly served on the accused.
11. Hence, it is clear that when the complainant presented the cheque in question within three months from the date of said cheque, the said cheque came to be dishonored and that when the complainant got issued statutory notice U/s.138 of N.I. Act within 30 days from the date of intimation of dishonour of said cheque, it was duly served on the accused. Hence, the present complaint filed on 29.1.2019 i.e after expiry of 15 days from the date of receipt of said notice and within 30 days thereafter is well within time.
12. As regard to legally enforceable debt or liability, in 2010 (11) SCC 441 - (Rangappa Vs Sri. Mohan), it is held that;
" The presumption mandated by Sec.139 of the Act includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebutable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the complainant"..............."when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the 9 accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own".
13. If the facts and circumstances of this case are considered in light of above said principles of law, it is clear that DW.1 has admitted during cross-examination that Ex.P1-cheque bears her signature. Therefore, statutory presumption arises U/s.139 of N.I. Act in favour of the complainant that Ex.P1-cheque is issued in discharge of debt or liability. The burden of rebutting the said presumption by probable defence is on the accused.
14. It is the case of the complainant that the accused purchased goods from the complainant company worth of Rs.22,65,507/- under Ex.P14 to P17-invoices and that towards said liability of part payment, the accused issued Ex.P1-cheque in favour of the complainant. On the other hand, it is the defence of the accused that accused no.1 firm purchased goods from the complainant company on credit basis and such due amount was paid within 30 days. It is further defence of the accused that after her husband died in road traffic accident on 1.1.2018, she 10 discontinued going to her office till June 2018. It is further defence of the accused that when she started going to office in June 2018, the complainant company approached her and disclosed her that a sum of Rs.30 lakhs was outstanding from the accused firm and that the complainant company would present the cheques which were with complainant company. It is further defence of the accused that she replied that she can give only Rs.5 lakhs to the complainant company and handed over three signed blank cheques to the complainant company and agreed to pay said sum of Rs.5 lakhs in three installments i.e in August 2018, September 2018 and October 2018. It is further defence of the accused that on 1.9.2018, she transferred a sum of Rs.2,50,000/- to complainant company through RTGs. However, the complainant company presented one of such cheques without intimation to her and the said cheque came to be dishonored and the complainant company filed complaint in C.C. No.58549/2018 against her on the basis of said cheque. It is further defence of the accused that since the complainant filed such case against her, she did not pay balance amount of Rs.2,50,000/- to the complainant, but she is bound to pay the said sum of Rs.2,50,000/- only.
1115. I have meticulously gone through the complaint and evidence on record. No doubt complainant company has not produced account statement or ledger account statement etc., of the accused maintained by the complainant company to show that a sum of Rs.22,65,507/- was outstanding from the accused to the complainant company. Even though the complainant company has produced Ex.P14 to P17 tax invoices to show that the accused firm purchased goods worth of Rs.22,65,507/-, if total amount such four invoices are calculated, it comes to Rs.22,51,377/- and not Rs.22,65,507/-. The complainant has not produced any documentary evidence to show that over due interest, costs and other charges can be added to said invoice amount under Ex.P14 to P17. However the accused has admitted in this case that she is liable to pay Rs.2,50,000/- to the complainant company and towards said liability, she has issued Ex.P1-cheque in favour of the complainant. Therefore when she is liable to pay Rs.2,50,000/- to the complainant company and Ex.P1-cheque which was issued by her towards said liability came to be dishonored, she is liable to pay the cheque amount and is guilty of an offence U/s. 138 of N.I. Act. Therefore, statutory presumption U/s. 139 of N.I. Act is not rebutted by the accused. In fact the 12 accused has admitted her liability to pay the cheque amount of Rs.2,50,000/- under Ex.P1-cheque. Merely because the complainant has filed another complaint in C.C. No.58549/2018 against her, she cannot avoid to pay the cheque amount of Rs.2,50,000/- under Ex.P1-cheque in this case. Therefore the complainant is entitled to recover the cheque amount in this case.
16. Counsel for accused has contended that CW.1 is not duly authorized by the complainant company to file this complaint and to give evidence in this case and as such the present complaint is not maintainable and that complainant company is not entitled to recover the cheque amount in this case though the accused is liable to pay the cheque amount. In this regard, counsel for accused relied upon decision in Crl. Appeal No.2653/2008 - (M/s.Canara Workshops Ltd., Vs Mantesh).
17. However above said contention of counsel for the accused cannot be accepted because the complainant has produced Ex.P18 which is copy of Resolution passed by the Board of Directors of the complainant company on 9.10.2018. It shows that the said Board of Directors in the said meeting authorized CW.1 -Rajkant Shetty for handling all the matters for recovery of dues by or against the complainant company and to represent complainant 13 company in all Courts/Tribunals of India (Civil and Criminal). No doubt the case number of the present complaint is not specifically mentioned in Ex.P18 and even the name of present accused is not specifically mentioned. However Ex.P18 Resolution is general in nature and includes all cases, criminal or civil, by complainant company for recovery of oustanding amount. Therefore the present complaint is also included in those cases. Hence, it can be concluded that CW.1 is authorized by the Board of Directors in the said meeting to file and conduct the present complaint against the accused. Therefore contention of the accused does not hold any water and the above said decision is not helpful to the accused.
18. In view of my above discussion, I am of considered opinion that the accused has utterly failed to rebut the statutory presumption in favour of the complainant. In fact the accused has admitted her liability to pay the cheque amount to the complainant company. Unless and until the accused rebuts the statutory presumption with convincing and cogent evidence, burden cannot be shifted on the complainant. Since the accused has admitted her liability to pay the cheque amount and as the statutory presumption U/s. 139 of N.I. Act has remained unrebutted, it can be said that the evidence on 14 record is sufficient to accept the case of the complainant that the accused had issued cheque in question towards discharge of legally enforceable debt or liability though the complainant has not produced evidence to show that a sum of Rs.22,65,507/- is outstanding to the complainant company from the accused. Therefore, I answer Point Nos.1 & 2 in affirmative.
19. Point No.3: As discussed in connection with Point Nos.1 & 2, the complainant has proved his case as to commission of the offence punishable U/s.138 of N.I. Act by the accused. The punishment prescribed for the said offence is imprisonment for a period which may extent to two years or with fine. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, provisions of Sec.117 of N.I. Act, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), etc., this court is of the considered view that it is just and desirable to impose fine of Rs.2,80,000/- and out of the said amount a sum of Rs.5,000/- has to be remitted to the State and the remaining amount of Rs.2,75,000/- is to be given to the complainant as compensation as provided U/s.357(1) of Cr.PC and accordingly Point No.3 is answered in Affirmative.
1520. Point No.4: For the reasons discussed in connection with Point Nos.1 to 3 this court proceed to pass the following......
ORDER Acting under Section 255(2) of Cr.PC accused are hereby convicted for the offence punishable under Section 138 of Negotiable Instruments Act. The accused shall pay a fine of Rs.2,80,000/- for the offence punishable U/s.138 of N.I. Act within one month. In default of payment of fine amount, the accused No.2 shall under go simple imprisonment for a period of three months.
By exercising the power conferred U/s.357(1) of Cr.PC., out of total fine amount of Rs.2,80,000/-, a sum of Rs.2,75,000/- is ordered to be paid to the complainant as compensation and Rs.5,000/- is ordered to be remitted to the State.
The bail bond of the accused stands cancelled. The cash security deposited by the accused is ordered to be continued till expiry of the appeal period.
Supply the free copy of this judgment to the accused forth with.
(Dictated to the stenographer, transcript thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 6th Day of January, 2020) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru 16 ANNEXURE Witnesses examined for the complainant:
CW.1 : Mr. Rajkant Shetty
Witnesses examined for the defence:
DW.1 : Smt. Veena
Documents marked for the complainant:
Ex.P1 : Cheque
Ex.P2 : Bank endorsement
Ex.P3 : Legal notice
Ex.P4 to P8 : Postal receipts
Ex.P9 to P13 : Returned postal covers
Ex.P14 to P17 : Four tax invoices
Ex.P18 : True copy of the Resolution
Documents marked for the defence:
NIL
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU