Bangalore District Court
M/S L.A.Providence Systems Reptd By vs M/S M.Tech Solution (I) Pvt Ltd on 18 November, 2019
IN THE COURT OF THE LX ADDITIONAL CITY CIVIL &
SESSIONS JUDGE, BENGALURU
(CCH-61)
Dated this the 18th day of November, 2019
:Present:
Sri Vidyadhar Shirahatti, LL.M
LX Addl. City Civil & Sessions Judge,
Bengaluru.
Crl. A. No. 1053/2017,
APPELLANTS: 1. M/s L.A.Providence Systems reptd by
its Managing Director Mr.Jaya
Prakash, No.3/5, Apex Plaza,
Nungambakkam, High Court road,
Chennai-60034.
2. Jaya Prakash, Managing Director, ,
M/s L.A. Providence Systems, No.3/5,
Apex Plaza, Nungambakkam, High
Court road, Chennai-60034.
(Sri Shaik Saoud, Adv)
V/S.
RESPONDENT M/s M.Tech Solution (I) Pvt Ltd., reptd by
its Regional Business Managing and
Authorised Signatory, Mr.Senthil Kumar,
Having its office at Sri.Narayani NPSR
Plaza, No.25, 3rd Floor, 7th Cross road,
Vasanthanagara Extension, Bengaluru.
(By Sri.S.S.L. Adv )
2 Crl.A.No.1053/2017
JUDGMENT
This appeal filed u/Sec. 374(3) of Cr.P.C., by the appellant, being aggrieved by the judgment of conviction and sentence passed in C.C.No.4605/2017, dt.28/6/207 for offence punishable u/Sec.138 of N.I.Act on the file of XXVII ACMM, Bengaluru.
2. The appellant was the accused and respondent herein was the complainant before the trial Court and they are referred to as per the ranks assigned to them before the lower court.
3. The brief facts leading to this appeal can be stated as under:-
The complainant involved in the business of sales of software security systems. The accused No.1 company placed purchase order dt:7/10/2014 to purchase certain software security systems along with its peripherals. As per the purchase order, the complainant company supplied the goods to the accused under the various invoices. As such, 3 Crl.A.No.1053/2017 the accused No.1 company became due to Rs.1,64,84,618.18/-. The accused clear the said outstanding due amount issued two cheques for sum of Rs.82,42,309/- each. For repayment of partial liability, the accused issued cheques. When the said cheques were presented for encashment it was dishonoured for the reasons 'Payment stopped by drawer '. Then the complainant got issued legal notice to the accused who replied to the notice. However, he has not repaid the cheques amount.
4. Then the complainant presented the complaints under Section.200 of Cr.P.C., for offence under Sec.138 of Negotiable Instruments Act. Learned Magistrate took cognizance and registered the case against the accused for offence punishable u/Sec. 138 of Negotiable Instruments Act and secured the presence of accused who after appearance, pleaded not guilty. Then the complainant examined himself as PW1 and got marked documents as per Ex.P.1 to Ex.P.3. After recording of statement of accused under Sec.313 of 4 Crl.A.No.1053/2017 Cr.P.C., the accused neither examined nor produced documents on his behalf.
5. The learned Magistrate on hearing the arguments on both sides, found the accused guilty and proceeded to convict the accused for offence u/Sec. 138 of Negotiable Instruments Act and sentenced him to pay a fine of Rs.2,00,00,000/- and in default of payment of fine amount, the accused shall undergo S.I. for a period of six months. Besides, the trial Court awarded compensation of Rs.1,99,90,000/- out of the fine amount to the complainant acting u/Sec.357 of Cr.P.C., by passing the impugned judgment dt.28/6/2017.
6. This judgment of conviction and sentence which is now under challenge by the appellant/accused on the following grounds:-
The impugned judgment of conviction and sentence passed by the trial court is opposed to the settled principles of law, facts and probabilities of the case. That on 21/3/2015 5 Crl.A.No.1053/2017 the respondent filed a false complaint XIV Metropolitan Magistrate Egmore at Chennai by its regional Business Manager and authorised signaturory Mr.S.Senthil Kumar. On 21/7/2015, the compliant was returned to file it before jurisdictional court within 30 days. The said direction was not complied by the respondent. On 12/8/2015 another fresh complaint PCR No.10576/2015 was field by the respondent without referring the earlier complaint by one Mr.Venogopal M.Asst Office Manager of the respondent company. In XXVII ACMM court, Bengaluru, cognizance was taken and it was converted to CC.No.20323/2015 pending on the file XXVII ACMM, Bengaluru. The appellant challenged the same in Crl.R.P.No.145/2016 in City Civil and Sessions Judge Court (CCH-65) and on 21/1/2016 order was passed and directing the lower court to proceed with the matter afresh on the basis of the first complaint, which is field before the Chennai Court. The fist complaint was field against two accused and second complaint was filed only one accused and the lower court did not noticed this important fact. On 31/1/2017 one Venugopal 6 Crl.A.No.1053/2017 M.Asst.office Manager of the respondent company was present in the lower court, he filed an affidavit u/Sec.45 of N.I.Act, containing the sworn statement and on the same day, the lower court even without looking the directions of the revisional court on the basis of the 2nd complaint which was field in Bengaluru Court only passed an order saying "office is directed to register a criminal case against the accused for the offence u/Sec.138 of N.I.Act and process were issued to the appellant and after recording the evidence and hearing on the arguments on both sides, the learned trial court has passed the impugned judgment and convicted the accused. The lower court is wrong for not mentioning of the civil suit at O.S.No.689/2017 pending between the same parties for the same issue in LXVI Addl.City Civil and Sessions Judge, Bengaluru. The learned Magistrate grossly erred in not properly appreciating the oral and documentary evidence available on record in proper perspective. The impugned judgment of conviction is unsustainable and not tenable in the eye of law. Hence, prayed to set aside the impugned 7 Crl.A.No.1053/2017 judgment of conviction and to acquit the accused by allowing the appeal.
7. After filing of this appeal, notice duly served on the respondent who made his appearance through a counsel. The trial Court records, have been secured.
8. Heard arguments of learned counsel for appellant and respondent.
9. Perused the records.
10. In the light of the contentions taken up in the memorandum of appeals, the common points that arise for my determination are as follows;
1) Whether the Court below erred in not properly appreciating the defense set up by the accused in proper perspective?
2) Whether the learned Magistrate erred in
convicting the appellant/accused for
offence punishable U/sec. 138 of
Negotiable Instruments Act?
8 Crl.A.No.1053/2017
3) Are there any grounds to interfere with the
order of conviction and sentence?
4) What order?
11. My findings on the above points are as follows:
Point No.1 : In the Negative
Point No.2 : In the Negative
Point No.3 : in the Negative
Point No.4 : As per final Order
REASONS
12. Point Nos.1 to 3:- All these points are taken together for discussion for the sake of convenience and to avoid repetition of facts.
13. I have carefully gone through the contents of appeal memo, trial Court records and the impugned judgment.
14. It is the specific case of the complainant that The accused No.1 company placed purchase order dt:7/10/2014 to purchase certain software security systems along with its peripherals. As per the purchase order, the complainant 9 Crl.A.No.1053/2017 company supplied the goods to the accused under the various invoices. As such, the accused No.1 company became due to Rs.1,64,84,618.18/-. The accused clear the said outstanding due amount issued two cheques for sum of Rs.82,42,309/- each. For repayment of partial liability, the accused issued cheques. It is further case of the complainant that, since the cheque which was issued by the accused came to be bounced back as 'Payment stopped by drawer '. Thus, the accused is liable to be convicted for offence punishable u/Sec. 138 of Negotiable Instruments Act.
15. On the other hand, it is defense set up by the accused that the complainant is the distributor of Palo Alto Company, the accused is RC holder of the Electronic Corporation of Tamilnadu (ECOT) has purchased the materials from the complainant to supply to the said ELCOT and it is the responsibility of the complainant for installation and demonstration of the supplied goods and after satisfaction of the performance of the goods by the ELCOT, 10 Crl.A.No.1053/2017 the amount will be paid to the complainant. However, the complainant has not installed and demonstrated the supplied goods and committed breach of contract. It is further defense set up by the accused that he has issued the cheques in favour of the complainant as a security and hence, he is not liable to pay the said cheques amount.
16. Keeping in view the rival contentions of both the parties, I have carefully gone through the evidence let in by both the parties to answer the points in controversy.
17. Obviously, the burden is on the complainant to prove that the cheques in question were issued towards discharge of legally recoverable debt or liability. In this regard, the complainant examined himself as PW1 who in his evidence has reiterated the averments of the complaint and got marked authorization letter, tax invoices, original cheque, memo issued by the bank, receipt, copy of legal notice, postal receipt, postal acknowledgements, reply notice, purchaser order as per Ex.P.1 to 13.
11 Crl.A.No.1053/2017
18. In the cross examination on behalf of the accused, PW1 states that the accused has purchased the ELCOT and for repayment of the said liability, the accused has issued cheques in question. He has stated all these facts in his notice. He denied the suggestion that the accused has issued to the cheques in favour of the complainant as a security and he misused the same.
19. A careful appreciation and evaluation of the evidence of PW1 coupled with contents of Ex.P.1 to Ex.P.13, makes it clear that the accused and complainant were known to each other very well. Herein this case the accused does not dispute issuance of cheques and his signature found on the cheques in question. But it is his contention that, he has issued the cheques in question to the complainant as a security and complainant has misused the same. He further contended that, it is the responsibility of the complainant for installation and demonstration of the supplied goods and after satisfaction of the performance of the goods by the 12 Crl.A.No.1053/2017 ELCOT, the amount will be paid to the complainant. However, the complainant has not installed and demonstrated the supplied goods and committed breach of contract and hence, he is liable to pay the said amount. But this contention of accused is not substantiated by any material on record.
20. Further, if really the accused had issued said cheques as a security and complainant has committed the breach of contract, accused has not caused any notice to the complainant for calling upon to install and demonstrate the supplied goods. That apart on perusing of the purchase order there is no clause with regard to installation and demonstration and payment clause. As such the defense set up by the accused is not believable and natural one.
21. Moreover, when the accused admits his signature found on Ex.P.5 & 6 and handing over the same to complainant, the presumption under Sec.139 of Negotiable Instruments Act would arise in favour of the complainant. 13 Crl.A.No.1053/2017
22. In this regard I would like to rely upon the decisions of Hon'ble Apex court in Kishna Rao v/s Shankar Gowda in 2018(8) SCC 165 Financial loss Monterey loss - Negotiable Instrument Act 1981- 139- presumption under 139 does when may be fallen- ingredients and scope of Sec.139- does not - probable summaries- accused liberty may adduce evidence to rebut the presumption u/Sec.139- but mere denial regarding existence of debt was not serve any purpose in the event accused is able to raise probable defense which creates doubt with regard to existence of debt or liability presumption may fall.
23. In Rangappa Vs.Mohan in AIR 2010 SC 1898 wherein it is held that, The presumption mandated by S.139 of the Act does indeed include the existence of legally enforceable debt or liability. This is of course in the nature of rebuttable presumption and it is open to the accused to raise a defense wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. S.139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal 14 Crl.A.No.1053/2017 remedy in relation to the dishonour of the cheque, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by S.138 can be better described as regulatory offence since the bouncing of a cheque is largely in nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is settled position that when an accused has to rebut the presumption under Sec.139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise. Therefore, if the accused is able to raise a probable defense which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defense and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
15 Crl.A.No.1053/2017
24. Moreover, when the accused admits his signature found on Ex.P.5 and 6 and handing over the same to complainant while borrowing loan amount, the presumption under Sec.118 and 139 of Negotiable Instruments Act would arise in favour of the complainant. But the accused has not produced any materials to rebut the said presumption. As such, no material is produced appreciate the defense set up by accused with regard. Therefore, the learned Magistrate has rightly appreciated and evaluated the evidence of PW1 in proper perspective. As such there is no any illegality or error committed by the Court below in appreciating the evidence available on record.
25. On careful appreciation of evidence of PW1 and the defense taken by the accused, it can be said that though he states that the cheques in question was issued as a security and it is the responsibility of the complainant for installation and demonstration of the supplied goods and after satisfaction of the performance of the goods by the ELCOT, the amount will be paid to the complainant. 16 Crl.A.No.1053/2017 However, the complainant has not installed and demonstrated the supplied goods and committed breach of contract, his bald say itself cannot be relied upon. Because, if really accused has issued the said cheques as a security and there is clause with regard to installation and demonstration and payment cause, he would not have left the signed cheques in the hands of complainant. Moreover, the accused has not offered any explanation as to why he left the cheques in the hands of complainant. So, this aspect of the case goes to show that defense set up by accused is not probable.
26. Having regard to all these facts and circumstances, I am of the considered view that the learned Magistrate has rightly appreciated the oral and documentary evidence available on record in proper perspective. The learned Magistrate committed no error or illegality in appreciating and evaluating the documents relied upon by both the parties. Herein this case, the accused failed to rebut the presumption available in favour of complainant under 17 Crl.A.No.1053/2017 Sec.139 of Negotiable Instruments Act. A bald denial of the case of complainant does not amount to a defense.
27. It is relevant to note that, the accused has taken contention that, the complainant has not field the complaint within time and also not filed an application for condonation of delay as per Sec.142 of N.I.Act. Further he has taken contention that, the original PCR filed before XIV Metropolitan Magistrate Egmore At Chennai against two accused. After transferring of the complaint from Chennai to Bengaluru, the complainant has not filed same fist complaint before the XXVII ACMM, Bengaluru. Further complainant was failed to represent the original complaint before the trail court. Hence, the complainant is not maintainable and trial court was wrongly erred by allowing the complaint and convicting the accused. On perusing the records, it is clear that, originally the complaint was presented before the Chennai Court and the Chennai court were passed an order to return the complaint to the complainant and directed to represent the said complaint within 30 days to the 18 Crl.A.No.1053/2017 Jurisdictional Magistrate, Bengaluru. However, the complainant has not presented the original complaint before the trial court and filed a fresh complaint. The accused has filed a revision petition before the Hon'ble LXIV Addl.City Civil and Sessions Judge, (CCH-65) Bengaluru and the said court was allowed the petition and directed the trial court to proceed with the matter a afresh on the basis of the complaint filed before the Chennai Court. On the observation, made by the Hon'ble CCH-65, the contention of the appellant will not sustainable and the complainant made party only one or two, as the matter was already decided by the Hon'ble CCH-65 and the same was not challenged by the either party and now at this stage, the contention of the accused is not sustainable. Therefore, the complainant has placed sufficient and ample materials on record to believe that the Ex.P.5 and 6 cheque was issued by accused towards repayment, which he due from the complainant for purchase of ELCOT. There are no such circumstances, wherein the case of complainant can be doubted. There are no grounds so as to interfere with 19 Crl.A.No.1053/2017 the reasoning and findings of the Court below. As such the learned Magistrate committed no error or illegality in believing the case of complainant.
28. Having regard to the facts and circumstances of the case, I am of the view that the impugned judgment of conviction and sentence passed by the learned Magistrate is in accordance with settled principle of law, facts and probabilities of the case. Absolutely there are no grounds to interfere in the impugned judgment of conviction and sentence passed by the Court below. The impugned judgment passed by the Court below deserves to be confirmed with. Accordingly, I answer point No.1 to 3 in the negatively.
29. Point No.4: In view of my findings on point No.1 to 3, I proceed to pass the following:
ORDER The appeal filed by appellant U/sec.374(3) of Code of Criminal Procedure is hereby dismissed. 20 Crl.A.No.1053/2017
The impugned judgment of conviction passed by XXVII ACMM, Bengaluru in CC No.4605/2017 dt.28/6/2017 for offence u/Sec.138 of Negotiable Instruments Act is hereby confirmed.
Send a copy of this judgment to the lower Court along with LCR.
(Directly dictated to the stenographer on computer and then pronounced by me in the open court on this the 18th day of November, 2019) (Vidyadhar Shirahatti) LX Addl.City Civil & Sessions Judge, Bengaluru.21 Crl.A.No.1053/2017
Order pronounced in the open court. Vide separately ORDER The appeal filed by appellant U/sec.374(3) of Code of Criminal Procedure is hereby dismissed.
The impugned judgment of conviction passed by XXVII ACMM, Bengaluru in CC No.4605/2017 dt.28/6/2017 for offence u/Sec.138 of Negotiable Instruments Act is hereby confirmed.
Send a copy of this judgment to the lower Court along with LCR.
(Vidyadhar Shirahatti) LX Addl.City Civil & Sessions Judge, Bengaluru.