Bangalore District Court
Mr. V. Srinivasulu vs The Director on 6 April, 2022
IN THE COURT OF THE XV ADDL.JUDGE,
& 23rd ACMM, COURT OF SMALL CAUSES,
MAYO HALL UNIT, BENGALURU
Dated this the 6th day of April 2022
Present: Smt.RajeshwariJPuranik,
B.A., LL.B., (Spl.,)
XV Addl. Small Causes Judge &
XXIII A.C.M.M., Member, M.A.C.T.,
Bengaluru.
CC.No.55530/2016
Complainant: Mr. V. Srinivasulu,
S/o V.M. Bala Krishna
aged about 43 years,
R/at No.C203,
Nagarjuna Green Woods,
Kadubisanahalli, Varathur,
Bangalore-560087.
(By Pleader Sri.K. Suresh)
V/s
Accused :1. The Director,
M/s Dreamz Infra, India Ltd.,
O/at No.577/B, 2nd floor,
Outer Ring road,
Teacher's Colony,
Koramangala,
Bangalore 560034.
2
SCCH19
CC No.55530/2016
2. Disha Choudhary,
D/o Vasanth Choudhry,
R/at No.898, Basement,
ATNT Complex,
80 feet road,
6th block, Koramangala,
Bangalore - 560034.
(By Pleader Sri.Anand Muttalli)
*****
Date of offence : 09062016
Date of report of offence : 12082016
Date of arrest of the accused :
Date of recording of evidence : 10032021
Date of closing of evidence : 25022022
Offence complained of : U/sec. 138 of N.I Act
Judgment : Conviction
*****
JUDGMENT
The Complainant filed this complaint against the accused under Section 200 of Cr.P.C for the offence punishable under Section 138 of N.I. Act.
3SCCH19 CC No.55530/2016
2. The brief contents of the complaint stated as under:
The Complainant and the accused company are known to each other and he has booked a 3 BHK flat measuring 1500 square feet at an agreed price of Rs.34,00,000/ on 1312 2013 which was being constructed and developed by accused company in converted land bearing Sy.No.20/1B measuring an extent of 35 guntas situated at Kadubeesanahalli village, Varthur Hobli, Bangalour south Taluk. It is further stated that, the Complainant had paid an advance amount of Rs.10,20,000/ through three cheques, i.e., a) Cheque bearing No.950775 dated 13122013 for Rs.1,00,000/,
b) Cheque bearing No.950776 dt 13122013 for Rs.5,00,000/ and c) Cheque bearing No.950777 dated 27122013 for Rs.4,20,000/ drawn on HDFC bank.
3. It is further stated that, the accused agreed to refund the advance amount with interest for 4 SCCH19 CC No.55530/2016 26 months payable to the complainant. It is further stated that, since there was no progress in the project and that the accused is unable to deliver the flat to the Complainant as agreed in the memorandum of understanding dated 15 122013. Towards discharge of legal liability the accused had issued two Cheques bearing Nos. a) 748297 Dated: 08.06.2016 for a sum of Rs.11,46,058/ and b) 025050 Dated: 0906 2016 for a sum of Rs.59,928/ respectively drawn on the State Bank of India, HSR Layout Branch, Bangalore in favour of the complainant. On presentation of said cheques for encashment through his banker i.e., HDFC bank, Richmond road branch, Bangalore same were returned with an endorsements dated 962016 and 10 062016 for the reasons "Insufficient funds by Drawer."
4. It is further stated that, the accused No.2 being Managing Director of accused No.1 company, she alone entered into Memorandum 5 SCCH19 CC No.55530/2016 of Agreement and signed the cheques, hence the Accused No.2 alone is responsible to pay the Cheque amount. Hence, the Complainant got issued legal notice to the accused on 0807 2016 through RPAD and the said notice was duly served on the accused. For which the accused has given untenable reply on 272016. It is further stated that, inspite of service of demand notice, neither the accused paid the cheque amount not replied to the said notice. Thus the accused has committed an offence punishable U/sec.138 of N.I. Act. Therefore, the Complainant has prays for punish the accused U/sec.138 of NI Act and also grant compensation to the complainant.
5. In pursuance of the summons the accused appeared through her counsel and enlarged on bail. The Substance of accusation read over to the accused, accused pleaded not guilty and claimed to be tried.
6SCCH19 CC No.55530/2016
6. To prove the guilt of the accused, the complainant got examined himself as PW.1 and got marked Ex.P1 to Ex.P7 documents and closed his side. On the other hand, the accused not adduced any evidence on her behalf. In the Cross examination of PW.1, Signature on the Ex.P1 and 3 marked as Ex.D1(a) and Ex.D2(a) and produced two documents which are marked as Ex.D3 and 4.
7. Statement of the accused is recorded as required U/s.313 ofCr.P.C. The accused denied the incriminating material.
8. After completion of the oral evidence, Heard the arguments and perused the materials available on record.
9. The following points arise for my consideration:
7SCCH19 CC No.55530/2016
1. Whether the complainant proves beyond reasonable doubt that, the accused towards discharge of legal liability issued two Cheques bearing Nos. a) 748297 Dated: 08.06.2016 for a sum of Rs.11,46,058/ and b) 025050 Dated: 09062016 for a sum of Rs.59,928/ respectively drawn on the State Bank of India, HSR Layout Branch, Bangalore in favour of the complainant. On presentation of said cheques for encashment before HDFC bank, Richmond road branch, Bangalore same were returned with an endorsements dated 962016 and 10 062016 for the reasons "Insufficient funds by Drawer" and even after issued the notice, the accused failed to repay the said amount and thereby the accused committed an offence punishable under Section 138 of N.I. Act?
2. Whether the complainant is entitled to claim the compensation amount under section 357 of Cr.P.C. from the accused?
3. What order?
10 My findings to the above raised points are as under:
8SCCH19 CC No.55530/2016 Point No.1: In the Affirmative, Point No.2: In the Affirmative, Point No.3: As per final order for the following REASONS
11. POINT No.1 and 2: It is specific case of the complainant that, Complainant booked a 3 BHK flat measuring 1500 square feet at an agreed price of Rs.34,00,000/ on 13122013 which was being constructed and developed by accused company in converted land bearing Sy.No.20/1B measuring an extent of 35 guntas situated at Kadubeesanahalli village, Varthur Hobli, Bangalore South Taluk and the Complainant paid an advance amount of Rs.10,20,000/ through three cheques. The accused agreed to refund the advance amount with interest for 26 months payable to the complainant. Since there was no progress in the project and that the accused is unable to deliver the flat to the Complainant as agreed in the memorandum of understanding dated 1512 9 SCCH19 CC No.55530/2016 2013. Hence, towards discharge of legal liability the accused No.2 had issued two Cheques bearing Nos. a) 748297 Dated:
08.06.2016 for a sum of Rs.11,46,058/ and b) 025050 Dated: 09062016 for a sum of Rs.59,928/ respectively drawn on the State Bank of India, HSR Layout Branch, Bangalore in favour of the complainant. On presentation of said cheques for encashment through his banker i.e., HDFC bank, Richmond road branch, Bangalore same were returned with an endorsements dated 962016 and 10062016 for the reasons "Insufficient funds by Drawer."
The accused No.2 being Managing Director, entered into Memorandum of Agreements and signed the cheque, hence the Accused No.2 alone is responsible to pay the Cheque amount. Inspite of issued the legal notice, the accused has failed to pay the cheque amount, hence prays for punish the accused in accordance with 10 SCCH19 CC No.55530/2016 law and also direct the accused to pay the compensation U/Sec. 357 of Cr.P.C.
12. In order to prove the case of the complainant, the Complainant Sri.V.Srinivasulu examined as PW.1 and got marked Ex.P.1 to Ex.P7 documents. Ex.P1 is the original Cheque. Ex.P2 is the Bank endorsement. Ex.P3 is the original Cheque. Ex.P4 is the Bank endorsement. Ex.P5 is the copy of legal notice, Ex.P6 is the Postal receipt and Ex.P7 is the Postal acknowledgment.
13. As per case of the complainant, the accused company agreed to sell the flat and memorandum of understanding is executed by Accused No.2 in favour of the complainant. Towards payment of the advance amount, the Complainant has paid Rs.10,20,000/ through cheques, but the accused company did not complete the construction work within time, so the memorandum was canceled. For refund of 11 SCCH19 CC No.55530/2016 the earnest money the accused issued 2 cheques dated: 08.06.2016 and 09062016, then the complainant presented the said cheques for encashment, but the bank issued endorsements / memos stating that "funds insufficient" dated 09.062016 and 10062016. Accordingly, the complainant issued legal notice on 07082016. The notices were served upon the accused No.1 and 2, on 11072016 and 14 072016. Further the Complaint is filed on 12 082016 within one month. Therefore, the complainant presented the cheques within time and also the complainant issued legal notice within time and presented the complaint is within time. Therefore the Complainant complied the provisions U/sec.138 of N.I. Act
14. In the cross examination Counsel for the accused specifically suggested at page No.6 that, the accused No.2 is the Managing Director of Accused No.1 company. Further in the Cross examination at page No.11 the signature of 12 SCCH19 CC No.55530/2016 accused No.2 was shown to the PW.1 and same was admitted by the complainantPW.1, so the signature of Accused No.2 at Ex.P1 is marked as Ex.D1(a). It is evident to show that the Accused No.2 issued the cheque Ex.P1. So, issuance of cheque by the Accused No.2 on behalf of Accused No.1 company as a Managing director is established by the Complainant. Further in the Cross examination of PW.1 specific suggestion was put by the learned counsel for the accused in respect of MOU which is marked as Ex.D3 and it is also suggested that, MOU was executed by the accused and Complainant. The suggestions put to the PW.1 are reduced are as under: "The cheque was dishoured by SBI Bank, HSR Layout branch. I received two cheques from accused. Ex.P3 is the second cheque I received from the accused. The signature Appearing at Ex.P3 is of the Managing Director. Same is marked as Ex.D2 (a). Signature at Ex.P.1 and Ex.P.3 there is a some difference. Its true to suggest that, now I see MOU which is notarized copy (Produced by the complainant). Its true to suggest that, this MOU executed by accused company and me. Same is marked as Ex.D3. The property which was agreed 13 SCCH19 CC No.55530/2016 to sell to me was Swapnapoorti Apartment Flat. I received Ex.D3 from one employee from the accused company. Its true to suggest that, I had made all the payments as per Ex.D3. Remaining amount agreed to be paid at the time of registration of agreement of sale. Now I see cancellation letter issued by the accused company, which is produced by me in this case. Its true to suggest that, cancellation letter is issued by the accused company same is marked as Ex.D4. Ex.D4 is bears the signature of staff of the accused company. Its true to suggest that, apart from signature of one staff there is no others signatures at Ex.D4. Its true to suggest that , repayment schedule is not mentioned in Ex.D4. Witness voluntarily states that, it is mentioned in MOU. Its true to suggest that, there is no mention of cheque numbers of Ex.D4."
Therefore as per the suggestions of defence Counsel, the accused company agreed to sell flats as per MOU and MOU is also admitted and issuance of advance money to the tune of Rs.10,20,000/ paid to the accused company. Further as per Ex.D4 cancellation letter, it is also evident that, there was a transaction between Complainant and accused company and same was canceled. In turn, the accused No.2 issued Ex.P1 and 3 cheques in favour of 14 SCCH19 CC No.55530/2016 the Complainant for refund of advance amount, which is legally enforceable liability. On the contrary the accused failed to rebut presumption.
15. In the Cross examination the PW.1 admitted the signature of the accused on Ex.P1, which is marked as Ex.D1(a). Further the accused No.2 issued cheques in favour of the Complainant as Managing Director of Accused No.1 company. Hence the presumption can be drawn against the accused about issuance of cheques for discharging the legal liability.
16. Perused the material available on record one thing is clear that, the accused had not denied the cheques and signature which are marked as Ex.D1(a) and Ex.D2(a). Once the accused admitted the cheques and signatures, the initial burden of the Complainant to prove the cheques were issued in favour of the Complainant is discharged and automatically 15 SCCH19 CC No.55530/2016 the onus shifts upon the accused to prove her defence and it is for the accused to rebut the legal presumption enumerated under Section 139 of N.I. Act. As per the provision U/sec.139 of N.I. Act the presumption that, the cheques were issued for discharge the legal liability and it is for the accused to rebut the said presumption by adducing the cogent and convincing evidence. It is held in a decision reported in ILR 2006 Karnataka 4642.
"NEGOTIABLE INSTRUMENTS ACT, 1881
- SECTION 138 - OFFENCES UNDER SECTIONS 139 - Presumption under ConvictionAppealed againstConviction Confirmed Revision AgainstMere denial of issuing chequeswhether is sufficient to discharge the initial burdenHELD, Mere denial of issuing cheques would not be sufficient as it is time and again noted that once the cheque is issued duly signed by the petitioner, the presumption goes against him as per section 139 of the Negotiable Instruments Act."
17. Though the accused got marked two documents on her behalf, but which are not 16 SCCH19 CC No.55530/2016 helpful to disprove the case of the Complainant. Inspite of granting the sufficient opportunity, the accused failed to tender the evidence to rebut the legal presumption. Though the evidence of the accused not necessary to rebut the presumption, but to disprove the case of the Complainant, nothing has been elicited in the cross examination of the Complainant. Therefore, the Complainant proved that, the accused No.2 on behalf of Accused No.1 company, entered into Memorandum of understanding agreement with the Complainant and in this regard the accused received amount of Rs.10,20,000/ as advance amount for sale of flat, but failed to complete the flats work well in time and sell the same in favour of the complainant. Towards refund of sale consideration advance amount, the accused No.2 issued Ex.P1 & 3 cheques in favour of Complainant, which are legally enforceable liability and hence the accused No.1 & 2 are 17 SCCH19 CC No.55530/2016 liable to pay the said amount to the Complainant. Under these circumstances the Complainant established his case in compliance of Sec.139 of N.I. Act. Hence, the Accused No.1 and 2 are liable for punishment U/sec.138 of N.I. Act. After perusal of materials available on hand, the Complainant complied the provision U/sec.138 & 142 of the Negotiable Instruments Act and the accused utterly failed to discharge their onus and failed to rebut the legal presumption that the accused No. 1 and 2 have not issued the cheques in favour of the complainant for discharge the legal liability.
18. Further this court is also empowered to award compensation to the Complainant, if the facts and circumstances so exists. In this case the Complainant paid the advance amount of Rs.10,20,000/ in the year 2013 and the cheques were issued by the accused No.2 to the Complainant in the year 2016 with respect to the refund of advance amount. So the amount of 18 SCCH19 CC No.55530/2016 Complainant was held with accused since 2013. Therefore considering the duration and also the transaction between the accused and complainant, I am of the view that if the Complainant is awarded a sum of Rs.22,00,000/ then that would definitely meets the ends of justice. Hence the complainant is entitled to claim the compensation under sec.357 of Cr.P.C.
Accordingly, I answered to the Point No.1 and 2in the Affirmative.
19. POINT No.3: For the foregoing reasons, I proceed to pass the following ORDER Acting U/sec.265 of Cr.P.C R/w Sec. 143 of N.I. Act., I hereby convict the Accused No.1 & 2 for the offence punishable under Section 138 of N.I. Act.
Accused No.1 & 2 are sentenced to pay fine of Rs.22,00,000/. In default to pay fine, the accused No.2 shall undergo simple imprisonment for a period of One year.
19SCCH19 CC No.55530/2016 Acting under Section 357(1)(b) of Cr.P.C. out of fine amount, a sum of Rs.21,95,000/ (rupees Twenty one lakh and Ninety five thousand only) shall be paid as compensation to the Complainant.
The Office is directed to supply the free copy of this judgment to the accused.
(Dictated to the Stenographer directly on Computer and then corrected by me and pronounced in open court on this the 6 th day of April 2022.) (RajeshwariJPuranik) XV Addl. Small Causes Judge & XXIII A.C.M.M., Bengaluru.
ANNEXURE:
List of witnesses examined for Complainant:
P.W.1 : Sri. Srinivasulu List of documents exhibited for complainant:
Ex.P1 : Cheque.
Ex.P2 : Bank endorsement
Ex.P3 : Cheque.
Ex.P4 : Bank endorsement.
Ex.P5 : Copy of legal notice,
Ex.P6 : Postal receipt
Ex.P7 : Postal acknowledgment.
20
SCCH19
CC No.55530/2016
List of witnesses examined for accused:
Nil List of documents exhibited for accused:
Ex.D1(a) : Signature of accused No.2 on Ex.P1 Cheque.
Ex.D2(a) : Signature of accused No.2 on Ex.P3 Cheque.
Ex.D3 : Notarized Memorandum of
Understanding
Ex.D4 : Cancellation letter.
(RajeshwariJPuranik)
XV Addl. Small Causes Judge &
XXIII A.C.M.M., Bengaluru.