Bangalore District Court
And Its Executive Office At Prestige ... vs Delhi - 110 027 on 15 April, 2021
1
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 15th DAY OF APRIL, 2021
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.51619/2018
M/s. Britannia Industries Limited,
A Company incorporated under the Companies
Act, 1913,
Having its Registered Office at No.5/1-A,
Hungerford Street, Kolkata - 700 017.
COMPLAINANT
And its Executive Office at Prestige Shantiniketan,
The Business Precinct, Tower C, 16 th and 17th
Floors, Whitefield Main Road, Mahadevapura Post,
Bengaluru - 560 048.
Reptd by its Power of Attorney - Mr.Mohd,
Mohsin Beg. S/o. Basheer Mohd. Beg
M/s. Chirag Enterprises
No.3/1, Block - 41, Singh Sabha Road,
ACCUSED Delhi - 110 027
Also at No.22/7, Shastri Nagar, Delhi - 110 007.
Reptd by its Partners 1) Sri. Amit Gupta,
S/o. Daya Kishan Gupta, Aged about 38 years.
2) Smt. Nishi Gupta (deleted)
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused is convicted
(K. GURUPRASAD)
XIV ADDL. C.M.M., BENGALURU
2
JUDGMENT
The present complaint is filed under Sec.200 Cr.PC for the offence punishable under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act.
2. It is the case of the complainant that, the accused is partnership firm which was appointed as wholesaler of products of the complainant company under Distributor Agreement dated 2.4.2013 entered into between the accused and complainant. In pursuance of said agreement, complainant has supplied products to the accused and raised 14 invoices totally worth Rs.35,02,025.07. In acknowledgement of said liability to clear invoice amounts, accused issued a mandate to its banker namely Allahabad Bank for processing the payment request raised by complainant vide National Automated Clearance House (NACH) dated 15.3.2016. Accordingly complainant deposited the following payment requests vide NACH through its bank namely HDFC Bank, Richmond Road, Bengaluru.
Sl.No. Instrument Number Date deposited Amount (Rs.) 1 NC0000000550471 30.10.2017 2,18,959.61 2 NC0000000553455 30.10.2017 1,41,112.77 (not claimed under this complaint) 3 NC0000000566301 30.10.2017 3,13,633.24 3 4 NC0000000566017 30.10.2017 1,47,231.00 5 NC0000000566024 30.10.2017 1,16,840.41 6 NC0000000567367 31.10.2017 3,09,039.40 7 NC0000000567369 31.10.2017 1,99,308.29 8 NC0000000567370 31.10.2017 1,36,160.98 9 NC0000000568516 31.10.2017 3,84,919.60 10 NC0000000568534 31.10.2017 2,13,695.61 11 NC0000000568536 31.10.2017 96,126.25 12 NC0000000570294 03.11.2017 2,88,436.79 13 NC0000000570296 03.11.2017 4,11,134.93 14 NC0000000572026 03.11.2017 3,43,300.46 15 NC0000000572042 03.11.2017 3,23,238.50 TOTAL 35,02,025.07 It is further claimed that above said payment requests have been dishonored for the reason "balance insufficient" as per banker's return statement dtd.7.11.2017. When the complainant got issued legal notice dtd.17.11.2017 to the accused calling upon the accused to pay the amounts covered under NACH mandate, said notice which was sent by registered post as well as through professional courier was served on the accused on 24.11.2017. After issuance of legal notice, complainant reconciled its accounts of the accused before filing the complaint and it was found that goods pertaining to GST Invoice No.DE0113007089 DTD.14.10.2017 worth Rs.1,41,112.77 were returned and as such complainant does not claim the amount pertaining to said invoice in the present complaint. The accused got issued untenable reply 4 notice dtd.8.12.2017 but failed to pay the amount covered under NACH payment mandate. Hence, the accused is guilty of the offence punishable under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act. Hence this complaint.
3. After filing of this complaint, cognizance was taken for the offence punishable under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments 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 his counsel and got enlarged on bail. Thereafter plea was recorded. The accused pleaded not guilty and claimed for trial.
5. In order to prove case of the complainant, P.A. Holder of the complainant company has been examined himself as CW.1 (PW.1) and got marked Ex.P1 to P14 and closed its side of evidence. Thereafter, statement of the accused U/s.313 of Cr.PC was recorded. The accused denied incriminating materials in the evidence of complainant against him. The accused examined himself as DW.1 but got 5 marked no documents. Counsel for the complainant has filed written arguments.
6. Heard both sides. Perused the complaint, evidence on record, written arguments and court records.
7. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused has issued NACH mandate in question in discharge of legally enforceable debt or liability as contended by it?
2) Whether the complainant further proves that the accused has committed the offence punishable under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act.?
3) Whether the complainant is entitled for the relief's as prayed in the complaint?
4) What Order?
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.......
6REASONS
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, it is clear from Ex.P4 to P12 that when the complainant bank deposited NACH mandate payment requests vide NACH through its banker namely HDFC Bank, Richmond Road, Bengaluru as per NACH mandate dtd.15.3.2016 issued by the accused to its banker namely Allahabad Bank, said payment requests came to be dishonored on 7.11.2017 for the reason "balance insufficient" and that when the complainant got issued statutory notice under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act to the accused by registered post as well as through professional courier (within 30 days from the date of receipt of information of such dishonour), calling upon the accused to pay the amount covered under NACH mandate within 15 days from the date of receipt of said notice, said notice came to be served on the accused on 24.11.2017 and got replied by the accused. Hence the present complaint which is filed after expiry of 15 days from the date of service of said notice and within one month thereafter is in time.
711. Sec.25 (1) of the Payment and Settlement Systems Act, 2007 provides that where an electronic funds transfer initiated by a person from an account maintained by him cannot be executed on the ground that the amount of money standing to the credit of that account is insufficient to honour the transfer instruction or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the electronic funds transfer, or with both. Sec.25 (2) of said Act provides that it shall be presumed, unless the contrary is proved, that the electronic funds transfer was initiated for the discharge, in whole or in part, of any debt or other liability. Explanation to Sec.25 of said Act provides that for the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability, as the case may be. In other words, it is clear that presumption U/s.25 (2) of said Act is similar to statutory presumption contemplated U/s. 139 of N.I. Act. Sec.25 (5) of said Act provides that the provisions of Chapter XVII of the N.I. Act, 1881 (26 of 1881) shall apply to the dishonour of electronic funds transfer to the extent the circumstances admit.
812. Since provisions of Sec.25(1) and 25(2) of Payment and Settlement Systems Act, 2007 r/w explanation are similar to the provisions of Secs.138 and 139 of N.I. Act, it is just and proper to consider principle of law laid down in 2010 (11) SCC 441 - (Rangappa Vs Sri. Mohan), in which 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 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 provisions of law and principles of law, it is clear that the accused has not disputed that accused has issued NACH mandate dated 15.3.2016 to its banker namely Allahabad Bank for processing payment request raised by the complainant. This fact is also clear from Ex.P4 and admission of accused in para 3 (page 2) of Ex.P12- 9 reply notice. Therefore, statutory presumption arises under Section 25 (2) of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act that electronic fund transfer i.e., NACH mandate in the present case was initiated by the accused for the discharge of any debt or other 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 complainant company and accused have entered into Ex.P2- Distributor Agreement dtd.2.4.2013 under which accused became distributor of products of the complainant company. It is further case of the complainant that accused issued NACH mandate in favour of the complainant company to its banker i.e., Allahabad Bank on 15.3.2016. It is further case of the complainant that complainant company supplied products to the accused under 14 invoices worth Rs.35,02,025.07 as per Ex.P3-invoice. It is further case of the complainant that when the complainant deposited payment requests vide NACH mandate through its banker, said payment requests came to be dishonored. On the other hand, though accused has admitted that he is distributor of the complainant company under Ex.P2-Distributor Agreement and that accused issued NACH mandate dtd.15.3.2016 in favour of the complainant bank, it is specific defence of the accused that the complainant company has not supplied goods to the accused as specified in Ex.P3-invoice. It is specific defence of 10 the accused that one Amit Khanna - Sales Manager and Sanjeev Goswamy- Representative of the complainant company were co-ordinating with accused regarding the business transaction. There was misunderstanding between above said persons and accused regarding business transaction, said Amit Khanna and Sanjeev Goswamy created Ex.P3 - invoices though no products have been supplied to the accused as per said invoices and accused is not liable to pay the amount mentioned in NACH mandate payment requests and present false complaint is filed against the accused to harass the accused.
15. On careful perusal of evidence on record, it is clear that the defence of the accused is not reliable and probable nor does it inspire confidence of this court. It is because, though it is defence of the accused that officials of complainant company by name Amit Khanna and Sanjeev Goswamy have created Ex.P3-invoices though no goods were actually delivered by complainant company to the accused as per Ex.P3, the accused who has entered into witness box as DW.1 has not at all whispered anything regarding role of said officials of the complainant company in creation of Ex.P3- documents. In other words, DW.1 has not at all made any allegation in his evidence against said officials of the complainant company. Further even though accused has stated in para 9 of his Ex.P12 reply notice that accused had sent detailed e-mail on 3.11.2017 to Vice President and other 11 officials of the complainant company making allegations against Sanjeev Goswamy and his team, no such e-mail communication is produced in this case to prove harassment of accused by Sanjeev Goswamy and his team, as alleged by the accused. Therefore, defence of the accused that said Amit Khanna and Sanjeev Goswamy, officials of the complainant company have created and fabricated Ex.P3 invoices in view of their misunderstanding with accused cannot be believed.
16. On the other hand, the complainant has produced Ex.P3-invoices which clearly show that complainant company has supplied products to the accused. PW.1 has deposed regarding Ex.P3 invoices and nothing has been elicited during cross-examination of PW.1 by counsel for the accused which damages veracity of evidence of PW.1 regarding Ex.P3- invoices. PW.1 has denied suggestion by counsel for the accused that Ex.P3-invoices have been created and fabricated by Amit Khanna and Sanjeev Goswamy, officials of complainant company. It is pertinent to note that there is seal of accused on one of the invoices while they are signatures of the accused on the other invoices for having received goods under said invoices. The genuineness of Ex.P3-invoices cannot be disbelieved only because there is no seal of the accused on all invoices except one invoice. Furthermore, mere non-production of documentary evidence to show that accused placed purchase orders in connection with Ex.P3- 12 invoices is also not a ground to disbelieve Ex.P3-invoices, particularly when Ex.P3-invoices are otherwise trustworthy and oral evidence of PW.1 corroborates and supports documentary evidence of Ex.P3-invoices. Therefore, documentary evidence of Ex.P3-invoices supported by oral evidence of PW.1 is sufficient to disprove the defence of the accused and to establish claim of the accused. On the other hand, accused has not produced any documentary evidence to show that he has made payments towards purchase of goods under Ex.P3-invoices. Therefore, accused who has failed to make such payments towards goods under Ex.P3- invoices is liable to make payment to the complainant and there is legally enforceable debt or liability in favour of the complainant.
17. 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. Unless and until the accused rebuts the statutory presumption with convincing and cogent evidence, burden cannot be shifted on the complainant. The statutory presumption under Section 25 (2) of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act has remained unrebutted and it can be said that the evidence on record is sufficient to accept the case of the complainant that the accused had issued NACH mandate in question towards discharge of legally enforceable debt and the complainant has 13 proved all the requirements of under Section 25 (2) of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act, so as to constitute the offence against the accused. Therefore, I answer Point Nos.1 & 2 in affirmative.
18. Point No.3: As discussed in connection with Point Nos.1 & 2, the complainant has proved its case as to commission of the offence punishable under Section 25 (2) of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act by the accused. The punishment prescribed for the said offence is imprisonment for a period which may extend 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.46,00,000/- and out of the said amount a sum of Rs.10,000/- has to be remitted to the State and the remaining amount of Rs.45,90,000/- 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.
1419. 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 is hereby convicted for the offence punishable under Section 25 (2) of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act. The accused shall pay a fine of Rs.46,00,000/- for the offence punishable under Section 25 (2) of the Payment and Settlement Systems Act, 2007 r/w Sec.138 of Negotiable Instruments Act. In default of payment of fine amount, the accused shall under go simple imprisonment for a period of 18 months.
By exercising the power conferred U/s.357(1) of Cr.PC., out of total fine amount of Rs.46,00,000/-, a sum of Rs.45,90,000/- is ordered to be paid to the complainant as compensation and Rs.10,000/- is ordered to be remitted to the State.
The bail bond of the accused stands canceled. 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 15th Day of April, 2021) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru 15 ANNEXURE Witnesses examined for the complainant:
CW.1 : Mohd. Mohsin Beg
Witnesses examined for the defence:
DW.1 : Amit Gupta
Documents marked for the complainant:
Ex.P1 : Copy of Power of Attorney
Ex.P2 : Distributor Agreement
Ex.P3a to 3n : Tax Invoices along with delivery receipts
Ex.P4 : Letter dtd.7.11.2017 of HDFC Bank
Ex.P5 & 6 : NACH return statement
Ex.P7 : Legal notice
Ex.P8 & 9 : Two postal receipts
Ex.P10 & 11 : Two professional courier receipts
Ex.P12 : Reply notice
Ex.P13 & 14 : Two returned notices
Documents marked for the defence:
NIL
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU