Bangalore District Court
Godrej & Boyce Manufacturing vs M/S.Sri. Raghavendra Furniture on 17 December, 2021
IN THE COURT OF THE XXVII ADDL.,
CHIEF METROPOLITAN MAGISTRATE, BANGALORE.
Present: Sri. T. GOVINDAIAH. B.Com., LLB.,
Dated: This the 17th Day of December 2021
C.C.No.4642/2016
Complainant GODREJ & BOYCE MANUFACTURING
COMPANY LIMITED
Having its branch office at
The karnataka Film Chambers of
Commerce, No.28,
1st Main, Crescent Road,
High Grounds,
BENGALURU 560001.
Represented by Commercial Branch Manager
Mr.Vipin Das
(Reptd by Sri.KSM Adv.,)
Accused 1. M/S.SRI. RAGHAVENDRA FURNITURE
153/C, Anjali Complex
Shop No.4, 5 and 6
Near Vasavi School,
Infantry Road,
Cantonment
Bellary 583104.
2. M/S.SRI. RAGHAVENDRA FURNITURE
M/S.SRI. RAGHAVENDRA FURNITURE
153/C, Anjali Complex
Shop No.4, 5 and 6
Near Vasavi School,
Infantry Road,
Cantonment
Bellary 583104.
2 C.C.No. 4642/2016
3. MR. C. SATHYANARAYANA RAO
M/S.SRI. RAGHAVENDRA FURNITURE
153/C, Anjali Complex
Shop No.4, 5 and 6
Near Vasavi School,
Infantry Road,
Cantonment
Bellary 583104.
(Rep by Sri. M.D. Adv.,)
Offence U/s.138 of Negotiable Instruments Act.
Plea of the Pleaded not guilty
accused
Final Order Convicted
Judgment Date 17/12/2021
*****
JUDGMENT
The complainant company filed present complaint against the accused for the offense punishable U/s.138 of the Negotiable Instruments Act.
2. Brief facts of the complainant case are as follows:-
The complainant company is a incorporated under the Indian companies Act and complainant is 3 C.C.No. 4642/2016 a reputed company dealing with various commercial and commodity goods for the last so many decades and enormous reputation in the market. The accused No.1 is a Partnership Firm carrying on its business. The accused No.2 & 3 are the partners of the said Firm and have placed orders on the complainant for supply of goods. The accused No.2 & 3 are the Partners of the accused No.1 and they are looking for day to day affairs of the accused No.1. As per order placed by accused to the complainant and the products services were duly received and there were no disputes either to the quality, quantity or the rates. The accused have received the commercial goods as per the order along with the Invoice No. GZI/31033522 dated: 25/06/2015 for a sum of Rs.7,69,329/- raised by the complainant company. But the accused have not paid any payment towards the above said invoice. In spite of several requests and reminders, the accused have 4 C.C.No. 4642/2016 neglected to pay the outstanding amount as per the payment terms agreed. After great persuasion the accused have issued cheque bearing No. 500695 dated: 25/11/2015 for Rs.7,69,330/- drawn on Pragathi Krishna Gramin Bank, S.G. Nagar Bellary Branch. When the said cheque presented for encashment through its Banker, the same was dishonoured on 01/12/2015 for the reason "FUNDS INSUFFICIENT" Thereafter, the complainant got issued legal notice to the accused on 26/12/2015 through RPAD and same have been duly served to the accused. In-spite of service of notices, the accused neither replied to the notices nor paid the cheque amount. Hence, the present complaint.
3. The accused No.2 & 3 have appeared through their advocate and they enlarged on bail. Substance of accusation read over to the accused and they pleads not guilty and claims to be tried. 5 C.C.No. 4642/2016
4. On behalf of the complainant company its Power of Attorney Holder himself examined as PW1 and got marked Ex.P.1 to 16 documents and closed its side evidence. On behalf of the accused cross- examined the PW1. Further, 20 documents have been confrontation to PW1 and got marked Ex.D1 to 20 documents. On closure of the complainant side evidence, Statement of the accused recorded U/sec. 313 of Cr.P.C.,. The accused has denied the incriminating circumstances which appears against him in the complainant side evidence. The accused No.3 & 2 themselves examined as DW1 & DW2 and closed their side.
5. Heard the arguments of learned counsels for the complainant and accused. Perused the oral and documentary evidence produced by both the parties.
6 C.C.No. 4642/2016
6. The points that would arise for my consideration are as follows:
(i) Whether the complainant proves that the accused issued Ex.P.2 cheque towards discharge of any debt or liability and the said cheque dishonoured for the reason "Funds Insufficient" ?
(ii) Whether the complainant proves that after dishonour of cheques, served notice to the accused in compliance of Sec.138(b) of N.I Act?
(iii) What order?
7. My answer to the above points are as follows:-
Point No.1 : In the Affirmative Point No.2 : In the Affirmative Point No.3 : As per the final order, for the following:-
REASONS
8. Point Nos.1 & 2 : These two points are taken together for common discussion to avoid reputation of facts. It is the case of the complainant 7 C.C.No. 4642/2016 that, the complainant company is a incorporated under the Indian companies Act and complainant is a reputed company dealing with various commercial and commodity goods for the last so many decades and enormous reputation in the market. The accused No.1 is a Partnership Firm carrying on its business. The accused No.2 & 3 are the partners of the said Firm and have placed orders on the complainant for supply of goods. The accused No.2 & 3 are the Partners of the accused No.1 and they are looking for day to day affairs of the accused No.1. As per order placed by accused to the complainant and the products services were duly received and there were no disputes either to the quality, quantity or the rates. The accused have received the commercial goods as per the order along with the Invoice No. GZI/31033522 dated: 25/06/2015 for a sum of Rs.7,69,329/- raised by the complainant company. But the accused have not paid any 8 C.C.No. 4642/2016 payment towards the above said invoice. In spite of several requests and reminders, the accused have neglected to pay the outstanding amount as per the payment terms agreed. After great persuasion the accused have issued cheque bearing No. 500695 dated: 25/11/2015 for Rs.7,69,330/- drawn on Pragathi Krishna Gramin Bank, S.G. Nagar Bellary Branch. When the said cheque presented for encashment through its Banker, the same was dishonoured on 01/12/2015 for the reason "FUNDS INSUFFICIENT" Thereafter, the complainant got issued legal notice to the accused on 26/12/2015 through RPAD and same have been duly served to the accused. In-spite of service of notices, the accused neither replied to the notices nor paid the cheque amount. The accused by knowing the real fact that there is no sufficient balance in their Bank account, they issued cheque only with an intention to cheat the complainant company.
9 C.C.No. 4642/2016
9. PW1 in his chief examination affidavit has reiterated all the averments of the complaint. In support of the say of PW1, he produced copy of Invoice as per Ex.P1. Which is go to show that, complainant company and accused Firm have done the business. Ex.P2 is the cheque towards payment of the commercial goods supplied to the accused and the said cheque dishonoured for the reason "Funds Insufficient", Ex.P3 is the Bank endorsement issued by the bank for the reason "Funds Insufficient".
10. Further, the complainant produced the receipt for having acceptance of cheque, statement of accounts, Postal receipts & acknowledgements to show that after dishonour of the cheque complainant got issued notice to the accused and same are served on the accused as per Ex.P4 to 11. Further, PW1 has produced the Resolution passed by the 10 C.C.No. 4642/2016 complainant company dated: 24/04/2015, copy of Power of Attorney, copies of notices dated:
26/12/2015 the same are marked at Ex.P12 to 16.
11. In order to disprove the case of the complainant, the accused No.3 has been examined as DW1. In the evidence of DW1, he says that in the year March 2015 he left the partnership in the accused No.1 Firm. Thereafter, he unaware about the transaction of accused No.1 Firm. The accused No.3 is not the signatory to Ex.P2 cheque. Further, he unaware about the transaction between accused No.1 & 2 with the complainant company. He further contended that when he was not the signatory to the Ex.P2 cheque, he is not responsible for the cheque amount.
12. Further, accused No.2 examined as DW2. In the evidence of DW2 he contended that in the year 2005 his Furniture Shop was closed. Thereafter he 11 C.C.No. 4642/2016 shifted to Bengaluru. Thereafter, all the transaction of accused No.1 Firm is looked by children of accused No.3. He unaware about the cheque produced in this case. He was not done the business with complainant company. Therefore, he was not responsible for the cheque amount.
13. Here in this case, it is an admitted fact that accused No.2 & 3 being the partners of accused No.1 Firm, they have commenced Furniture business jointly. Accused No.1 to 3 together used to purchase the furniture from the complainant company. It is also an admitted fact that accused No.1 to 3 are the customers of complainant company. Now the accused No.3 contended that he is not the signatory to Ex.P2 Cheque. The accused No.2 contended that now he is residing at Bengaluru and he is no way concerned to the transaction of accused No.1 Firm. It is important to note that, in the course of cross- 12 C.C.No. 4642/2016 examination of DW2 & 3 they have clearly admits that both are own brothers and they are the partners of accused No.1 Firm. They further admits that both are jointly started Furniture business and they used to purchase the Furnitures from the complainant company.
14. Further, PW1 produced the Invoice as per Ex.P1 which clearly shows that the accused have raised invoice from the complainant company and purchased Furnitures. Accordingly, accused No. 2 & 3 being the partners of accused No.1 Firm, they have conducting the business of selling the Furnitures, which are purchased from complainant company. In that regard accused No.1 to 3 together conducting Furnitures business and issued Ex.P2 Cheque in favour of the complainant company.
15. It is important to note that, now the accused No.3 contended that he is not the signatory 13 C.C.No. 4642/2016 to the Ex.P2 cheque. However, his brother being the one of the partner of accused No.1 Firm he put his signature to the Ex.P2 Cheque and issued in favour of the complainant company. Accordingly, accused No.1 to 3 are responsible to pay the debts in favour of complainant company. It is settled position of law that, when the accused admits the issuance of cheque and signature, the presumption U/sec. 139 of the N.I Act and raises in favour the complainant that the one of the accused issued Ex.P2 Cheque to the complainant company towards discharge of debts or liability of accused No.1 Firm. The burden shifts on the accused to rebut the said presumption. With this background let the court appreciate the evidence on record, whether the accused are able to rebut the presumption U/sec. 139 of the N.I. Act raises infavour of the complainant.
14 C.C.No. 4642/2016
16. The accused took various contentions regarding issuance of Cheque. But, admittedly accused No.2 & 3 are the Partners of accused No.1 Firm. Therefore, accused No.1 to 3 being the Firm and partners all are responsible for pay the debts in favour of the complainant company. Under such circumstances the contentions of the accused are unbelievable.
17. It is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance 15 C.C.No. 4642/2016 of cheque itself was adequate proof of existence of debt or liability. The Hon'ble Apex Court has also held in the decision referred above, the Hon'ble Apex Court in 2010 SC 1898 in case of 'Rangappa Vs. Mohan' that, presumptions U/sec.118(a) and 139 of N.I. Act indeed does extend to the existence of legally recoverable debt, of course the said presumption is rebuttable one, the accused has to rebut the presumption by taking probable defence. In another decision of Hon'ble Apex court of India reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15-03-2018 between ROHITBHAI JIVANLAL PATEL Vs STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that "When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of 16 C.C.No. 4642/2016 evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated: 15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the cross- examination, he categorically admits that, the cheque has bounced on account of no sufficient 17 C.C.No. 4642/2016 fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough". In another decision of Hon'ble Apex Court of India reported in ICL 2021(2) SC 529 in the case of M/s. Kalamani Tex Vs. P.Balasubramanian , dt: 10.02.2021 wherein the Hon'ble Apex court held that " once the accused had admitted his signatures on the cheque and deed, the trial court ought to have presumed that, the cheque was issued as consideration for legally enforceable debt". Hence the principles of law laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in the above referred decisions are aptly applicable to the case on 18 C.C.No. 4642/2016 hand, since in the present case also the complainant has proved that, the cheques in question belonging to the account of the Accused and signatures appearing on the cheques is that of the Accused and it was issued to the complainant, in such circumstances, this court has drawn presumption of existence of legally enforceable debt as per Sec.139 of N.I. Act.
18. Therefore, considering all these aspects of the case and totality of the circumstances and careful perusal of the evidence adduced by both the parties, the court is of the opinion that the accused has started business with complainant company and fails to pay the balance amount. In view of balance amount they issued Ex.P2 chrque for discharge of legal debt of Rs.7,69,330/-. Therefore complainant has successfully established beyond all reasonable doubts that the accused have started 19 C.C.No. 4642/2016 business with complainant company and fails to pay the balance amount and issued Ex.P2 cheque for discharge of legal debt of Rs.7,69,330/-. But, in spite of service of notice accused have fails to pay the cheque amount infavour of the complainant company. Thereafter, complainant got issued legal notice to the accused on 26/12/2015 through RPAD and same have been served to the accused on 31/11/2015. In-spite of service of notice, the accused neither replied to the notice nor paid the cheque amount. Therefore, the accused have committed an offence punishable U/sec. 138 of the N.I. Act. Accordingly, this court answered Points No1 & 2 in the Affirmative.
19. Point No.3 :- In view of my findings on Point No.1 & 2 the complainant proved that the accused has issued Ex.P2 cheque for discharge of legal debt of Rs7,69,330/- and the said cheque 20 C.C.No. 4642/2016 dishonoured and the complainant has complied the mandatory requirement of Sec.138(b) of N.I Act, by issuing demand notice to the accused, after dishonour of the cheque. Therefore, the accused are liable for punishment for the offence punishable U/s.138 of N.I Act. In the cheque bounce cases apart from the punishment to the accused, compensation can also be awarded to the complainant with respect to the dishonoured cheque. The accused have issued Ex.P2 cheque in favour of the complainant towards discharge of legal debts. The transaction between the complainant company and the accused is commercial transaction. If the cheque was honoured on the day when it was presented for encashment, the complainant would have utilized the said amount for its business purpose and would have got substantial profits. The act of the accused caused loss to the complainant and dragged the complainant to the court for 21 C.C.No. 4642/2016 redressal. Therefore, the complainant has to be suitably compensated in the matter. In the result, this court proceed to pass the following:-
ORDER The complaint filed by the complainant company is allowed.
Acting U/s.255(2) of Cr.PC, the accused No.1 to 3 are convicted for the offence punishable U/s.138 of N.I. Act.
The accused No.2 & 3 are sentenced to pay a fine of Rs.7,75,000/-. (Rupees Seven Lakhs and Seventy five Thousand Only). In default of payment of said fine amount, the accused No.2 & 3 shall undergo simple imprisonment for a period of (6) Six months.
Further, acting U/sec. 357 (1) of Cr.P.C., out of the fine amount on recovery, a sum of Rs.7,70,000/-. (Rupees Seven Lakhs and Seventy Thousand Only) shall be paid as compensation to the complainant.
Further, acting U/sec. 357(1) (a) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.5,000/- (Rupees Five 22 C.C.No. 4642/2016 Thousand Only) shall be defrayed as expenses to the state.
The bail bonds and surety bonds of the accused No.2 & 3 shall cancelled after appeal period is over.
Office is directed to furnish a free Certified copy of this judgment to the Accused incompliance of Section 363(1) of Cr.P.C.,.
(Dictated to the stenographer on computer , corrected and then pronounced in open court by me on this the 17th day of December, 2021) (T.Govindaiah) XXVII A.C.M.M., Bengaluru.
ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : VIPIN DAS Documents marked on behalf of the complainant:
Ex.P.1 : Invoice pertaining to the transaction of the accused Ex.P.2 : Cheque Ex.P.2(a) : Signature of the accused No.3 Ex.P.3 : Bank endorsements Ex.P.4 : Receipt for having acceptance of the cheque 23 C.C.No. 4642/2016 Ex.P.5 : Statement of Accounts Ex.P6 to 8 : Postal acknowledgements Ex.P9 to 11 : Postal receipts Ex.P12 : Certified true copy of Resolution passed in the meeting of the Board of Directors of the complainant company held on 24/04/2015 Ex.P13 : Special Power of Attorney Ex.P14 to 16 : Copies of notices dt:
26/12/2015 Witnesses examined on behalf of the accused:
DW1 : LAKSHMANA RAO .C
DW2 : P. SATHYANARAYANA
Documents marked through PW1
Ex.D1 : Copy of application for
dealership (marked through
PW1)
Ex.D2 : C/c of Agreement (marked
through PW1)
Ex.D3 to 6 : C/c of certificates (4 in Nos)
Ex.D7 to 14 : C/c of the letters of Renewal of
Dealership Agreement
Ex.D15 : C/c of complaint in CC No.
15329/2018
Ex.D16 : The confirmation of balance
24 C.C.No. 4642/2016
Ex.D17 to 20 : C/c of Rental Agreement, LPG Receipt & Bank Statements XXVII A.C.M.M Bengaluru.25 C.C.No. 4642/2016
17/12/2021 Comp: Sri. K.S.M Adv., Accd: Sri. M.D Adv., For Judgment (Order typed vide separate sheet) ORDER The complaint filed by the complainant company is allowed.
Acting U/s.255(2) of Cr.PC, the accused No.1 to 3 are convicted for the offence punishable U/s.138 of N.I. Act.
The accused No.2 & 3 are sentenced to pay a fine of Rs.7,75,000/-. (Rupees Seven Lakhs and Seventy five Thousand Only). In default of payment of said fine amount, the accused No.2 & 3 shall undergo simple imprisonment for a period of (6) Six months.
Further, acting U/sec. 357 (1) of Cr.P.C., out of the fine amount on recovery, a sum of Rs.7,70,000/-. (Rupees Seven Lakhs and Seventy Thousand Only) shall be paid as compensation to the complainant.1 C.C.No. 4642/2016
Further, acting U/sec. 357(1) (a) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.5,000/- (Rupees Five Thousand Only) shall be defrayed as expenses to the state.
The bail bonds and surety bonds of the accused No.2 & 3 shall cancelled after appeal period is over.
Office is directed to furnish a free Certified copy of this judgment to the Accused incompliance of Section 363(1) of Cr.P.C.,.
XXVII A.C.M.M, Bengaluru.