Bangalore District Court
Kesoram Industries Limited vs ). Pioneer Concrete Products on 29 September, 2022
C.C.NO.17528/2018
0
KABC030473452018
Presented on : 28-06-2018
Registered on : 28-06-2018
Decided on : 29-09-2022
Duration : 4 years, 3 months, 1 days
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LLB.,LL.M
XXVIII A.C.M.M, Bengaluru City.
DATED: THIS THE 29 TH DAY OF SEPTEMBER-2022
C.C.NO.17528/2018
Complainant: Kesoram Industries Limited,
(Cement Division)
Rep by its Authorized signatory
Sri.V.A.N Murthy,
R/o/at. Birla Building, 8th Floor,
9/1, R.N.Mukherjee Road,
Kolkata-700001, West Bengal.
Also at : Birla Shakti Cement
Kesoram Industries Limited,
(Cement Division), Unit-Vasavadatta
Cement Division, 4/A, Bharath Apartment,
44/1 Fair Field Layout, R.C.Road,
Bengaluru-560001.
(By Sri.Onkara.K.B.,Adv.,)
V/s
C.C.NO.17528/2018
1
Accused: 1). Pioneer Concrete Products
Rep by its Proprietor H.K.Annayappa.
Survey No.55/4, R/o: Samathanahalli
Village, Chikkathirupathi Road,
Anugondanahalli Hobli, Tq:Hoskote,
Dist:Bengaluru Rural.
2). H.K.Annayappa S/o Not Known
Major, Pioneer Concrete Products,
R/o: Samathanahalli Village,
Chikkathirupathi Road,
Anugondanahalli Hobli, Tq:Hoskote,
Dist:Bengaluru Rural.
(By Sri.R.A.Devanand.,Adv.,)
: JUDGMENT:
This case arises out of the complaint filed under section 200 of Cr.P.C., for the offence punishable under section 138 of N.I. Act.
2. The case of the complainant in brief is as under:
It is submitted by the complainant is that, the complainant company is one of the pioneer companies in India. It is under the flagship B.K.Birla Group of Companies. Since long the said company doing business in different areas. Out of that cement is one of the major manufacturing product and also marketing the same in public and private sector under the brand C.C.NO.17528/2018 2 name Birla Shakti Cement. It manufactures in two locations. One is at Sedam, Gulbarga District in State of Karnataka (the "Vasavadatta Cement Plant") and Basantnagar, Karimnagar District in state of Telangana (the "Kesoram Cement Plant"). The complainant has been established business office at Bangalore for convenient of smoothing running of the business.
3. It is further submitted that, the complainant has appointed Mr.C.K.Jain as Attorney under a General Power Attorney has been duly passed in the Board Resolution and executed a General Power Attorney on 01.08.2017. By virtue of the said General Power Attorney Mr.Vikram Kulkarni was appointed for representing the complainant company in the court of law and prosecuting the case on behalf of the complainant company. It is further submitted that, the accused No.2 is representative of the accused No.1 and he is sole responsible and functioning all business activates of the accused No.1 as being proprietor of the accused No.1. In the course of business the accused C.C.NO.17528/2018 3 No.2 has approached the complainant company office at Bangalore and requested to supply the cement. On his good faith and trust the company generated customer code in the name of the accused No.1. Accordingly the accused No.1 has been allotted the customer code P01369 as per the policy of the complainant company.
4. It is further stated that, during the course of business on the request of the accused No.2 the complainant company has supplied cement in the name of the accused No.1 through its Vasavadatta Cement Division at Bengaluru from the period 01.12.2016 to 09.03.2017 in total amounting of Rs.43,54,317/- (Rupees Forty Three Lakhs Fifty Four Thousand Three Hundred Seventeen) only. That, out of which the accused have so far made payment for a sum of Rs.25,05,614/- (Rupees Twenty Five Lakhs Five Thousand Six hundred Fourteen) only. It is further stated that, when the credit limit permissible as per its credit policy had crossed and their outstanding balance C.C.NO.17528/2018 4 arose to the tune of Rs.18,48,603/- (Rupees Eighteen Lakhs Forty Eight Thousand Six hundred Three) only the complainant was constrained to issue a reminder/notice to the accused. Further upon issuing the said reminder notice, as a part payment of the above outstanding liability, on 11.10.2017 the accused have issued a cheque bearing No.344201 payable at Syndicate Bank, Indira Nagar Branch, Bengaluru in favour of the complainant company for a sum of Rs.18,48,603/- (Rupees Eighteen Lakh Forty Eight Thousand Six Hundred Three) only. Further the accused had also promised at the time of issuing the said cheque that it will honor the same whenever the complainant presents the same for encashment. It is further stated that, the said cheque was presented by the complainant for encashment through their banker i.e., the HDFC Bank, Richmond Road Branch, Bengaluru. However the said cheque was dishonored and returned to the complainant with an endorsement "Funds Insufficient" and the same was intimated to the C.C.NO.17528/2018 5 complainant by its banker on 12.10.2017. Further the complainant tried to bring this fact to the notice of the accused but in vain. Thereafter on 09.11.2017 the complainant got issued a statutory demand notice through its counsel intimating him regarding dishonouring of the said cheque along with interest at the rate of 18% P.A from 19.04.2017 and Rs.5,000/- towards the cost of the notice. That, it was further demanded him to make the repayment of the cheque amount within 15 days from the date of receipt of the notice, failing which the complainant would initiate both Civil and Criminal legal actions. The said demand notice was served to the accused on 10.11.2017. In spite of serving the demand notice, the accused has neither paid the cheque amount within 15 days nor has replied to the said notice so far. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 21.12.2017.
5. After the complaint was filed, the cognizance of C.C.NO.17528/2018 6 the offence cited therein was taken and it was registered as P.C.R.No.7728/2018. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 27.06.2018 to register the case in Reg.No.III.
6. Thereafter, summons was issued to the accused and they have appeared before the court through counsel and secured bail. They were furnished it necessary papers as complied under section 208 of Cr.P.C,. Thereafter, the plea of the accused No.2 was recorded by the court. He has pleaded not guilty and claimed to be tried.
7. The complainant in support of its case, has examined its senior officer as PW.1 and got marked total 11 documents at Ex.P.1 to 11. The complainant examined one more witness as PW.2 and closed its side.
8. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C. was C.C.NO.17528/2018 7 recorded. He has denied the incriminating evidence appearing against him. In their defense the accused have not lead any evidence and no documents were marked on their behalf.
9. I have heard the arguments on both the sides and perused the written argument filed by the learned counsel for the accused on 22.09.2022 and also perused the material placed on record.
10. The learned counsel for the complainant has relied on the citations reported in (2002) 1 SCC 234, (2014) 11 SCC 790, (2001) 1 SCC 631, (2009)1 SCC 407, (1999) 3 SCC 35, (1996) 2 SCC 739, (1999) 8 SCC 221, AIR 2002 SC 1314, 1998 Cri.L.J 700, 2005 Cri.L.J 454 and LAWS (APH) 2006 115 (Andhara Pradesh HC).
11. The learned counsel for the accused has relied on the citation reported in AIR 1968 SC 1413.
12. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
C.C.NO.17528/2018 8
1.Whether the complainant proves the existence of legally enforceable debt/ liability.?
2. Whether the complainant further proves that the accused had issued the Cheque-Ex.P.4, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that, Ex.P.4 was dishonored for the reason "Payment stopped by drawer" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order or sentence?
13. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
14. POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one C.C.NO.17528/2018 9 point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken both points together for common discussion. The case of the complainant is that, he was acquainted with the accused. The complainant company is one of the pioneer companies in India. It is under the flagship B.K.Birla Group of Companies. Since long the said company doing business in different areas. Out of that cement is one of the major manufacturing product and also marketing the same in public and private sector under the brand name Birla Shakti Cement. It manufactures in two locations. One is at Sedam, Gulbarga District in the State of Karnataka (the "Vasavadatta Cement Plant") and Basantnagar, Karimnagar District in the State of Telangana (the "Kesoram Cement Plant"). The complainant has been established business office at Bangalore for convenient of smoothing running of the business.
15. Further the accused No.2 is representative of the accused No.1 and he is sole responsible and C.C.NO.17528/2018 10 functioning all business activates of the accused No.1 as being proprietor of the accused No.1. In the course of business the accused No.2 approached the complainant company office at Bangalore and requested to supply the cement. On his good faith and trust the company generated customer code in the name of the accused No.1. Accordingly the accused No.1 has been allotted the customer code P01369 as per the policy of the complainant company.
16. Further during the course of business on the request of the accused No.2 the complainant company has supplied cement in the name of the accused No.1 through its Vasavadatta Cement Division at Bengaluru from the period 01.12.2016 to 09.03.2017 in total amounting of Rs.43,54,317/- (Rupees Forty Three Lakhs Fifty Four Thousand Three Hundred Seventeen only), out of which the accused have so far made payment for Rs.25,05,614/- (Rupees Twenty Five Lakhs Five Thousand Six hundred Fourteen) only. Further when the credit limit permissible as per its C.C.NO.17528/2018 11 credit policy had crossed and their outstanding balance arose to the tune of Rs.18,48,603/- (Rupees Eighteen Lakhs Forty Eight Thousand Six hundred Three) only the complainant was constrained to issue a reminder/notice to the accused. Further upon issuing the said reminder notice, as a part payment of the above outstanding liability, the accused have issued a cheque bearing No.344201 payable at Syndicate Bank, Indira Nagar Branch, Bengaluru in favour of the complainant company for a sum of Rs.18,48,603/- (Rupees Eighteen Lakhs Forty Eight Thousand Six Hundred Three) only on 11.10.2017. Further the accused had also promised at the time of issuing the said cheque that he will honor the same whenever the complainant presents the same for encashment. The complainant was presented the said cheque for encashment through their banker i.e., HDFC Bank, Richmond Road Branch, Bengaluru. However the said cheque was dishonored and returned to the complainant with an endorsement "Funds Insufficient"
C.C.NO.17528/2018 12 and the same was intimated to the complainant by its banker on 12.10.2017. Further the complainant tried to bring this fact to the notice of the accused but in vain. Thereafter on 09.11.2017 the complainant got issued a statutory demand notice through its counsel intimating him regarding dishonouring of the said cheque along with interest at the rate of 18% P.A from 19.04.2017 and Rs.5,000/- towards the cost of the notice. Further demanded him to make the repayment of the cheque amount within 15 days from the date of receipt of the notice, failing which the complainant would initiate both Civil and Criminal legal actions. The said demand notice was served to the accused on 10.11.2017. In spite of issuance of notice the accused have failed to make any payment and failed to give reply to the said notice. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
C.C.NO.17528/2018 13
17. In support of the case, the complainant has examined its Senior Officer as P.W.1 and 11 documents were marked at Ex.P.1 to 11. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the Authorization letter. Ex.P.2 is the Certified copy of the Account Extract. Ex.P.3 is the Letter written to the accused by the complainant. Ex.P.4 is the Cheque issued by the accused in favour of the complainant dated 11.10.2017 for a sum of Rs.18,48,603/-. Ex.P4(a) is the signature of the accused. Ex.P.5 is the bank memo informing of the dishonor of the cheque for the reason payment stopped by drawer. Ex.P.6 is the office copy of legal notice. Ex.P.6(a) is the postal receipts. Ex.P.7 is the Postal acknowledgment. Ex.P.8 is the complaint. Ex.P.9 is the Computer downloaded copy of the Ledger account extract. Ex.P.9(a) is the debited statement. Ex.P.9(b) is the Re-debited statement. Ex.P.10 is the complainant company has given the power of attorney to the Mr.V.A.N.Murthy. Ex.P.11 is the C.C.NO.17528/2018 14 complainant company given the authority letter to PW.1 on 28.08.2019. The complainant on their behalf examined proprietor of Sri.Renuka Enterprises by name Sri.Sangayya V. Hirematha as PW2. In his evidence deposed that, "ನನನ ವವನಧಧವರರಯಗ ಸನಮರನ ಹತನತ ವರರಗಳಳದ ಬಳಗಳಳರನಲ ಶಶಶ ರಶಣನಕ ಎಳಟರ ಪಶಪಸಸವ ಎನನ ನ ವ ಹಸರನಲ ವಧವಹರ ಮರತದನ. ಸಮಳಟವ ವತರಕರಳದ ಗಶಹಕರಗ ಸವನಳಟವ ನನ ನ ಸರಬರಜನ ಮಡನವ ಮಧಧವರರಯಗ ನನನ ಕಲಸ ಮಡನರತದದ ನ, ಅದರಳತ ಪಯರದ ಸಳಸಸ ಮತನತ ಆರಳಶಪ ಸಳಸಸ ನಡನವ ಸನಮರನ 3-4 ವರರಗಳಳದ ಸಮಳಟವ ಸರಬರಜಗ ಸಳಬಳಧಸದಳತ ಮಧಧವರರಯಗ ಕಲಸ ಮಡದನ.
ಪಯರದ ಸಳಸಸಯಳದ ಆರಳಶಪ ಸಳಸಸ 2015-16 ರಳದ ಸಮಳಟವ ಖರಶದ ಮಡನರತದದ ನ ಸದರ ವಧವಹರಕಕ ನನನ ಮಧಧವರರಯಗದನ ದ , ಅದರ ಹಣವನನ ನ ಆರಳಶಪ ಸಳಸಸಯವರನ ಮರನಪವರ ಮಡರನತತರ. ನಳತರ 2016-17 ರಲ ಪಯರದ ಸಳಸಸ ಮತನತ ಆರಳಶಪ ನಡನವ ನಡದ ಸಮಳಟವ ವಹವಟಗ ನನನ ದ ಮಧಧವರರಯಗದನ ಮತನತ ಸದರ ಸಮಳಟನನ ನ ಪಯರದ ಸಳಸಸಯಳದ ಆರಳಶಪಗ ಸಗಟವನನ ನ ಸಹ ನನಶ ಮಡರನತತಶನ.
ಸದರ 2016-17 ನಶ ಸಲನ ವಹವಟಗ ನನನ ಮಧಧಸಸಕಯಲ ಸನಮರನ ರಳ.35 ರಳದ 40 ಲಕದ ವಧವಹರ ನಡದರನತತದ.
C.C.NO.17528/2018 15 ಪಯರದ ಸಳಸಸಯವರನ ರಳ.18 ಲಕದರನ ಷ ಆರಳಶಪಯಳದ ಬಕ ಬರಬಶಕನ ಎಳದನ ನನಗ ಮತನತ ಆರಳಶಪಗ ರಳಸದದರನ. ಆಗ ನನನ ಆರಳಶಪಯನನ ನ ಭಶಟ ಮಡ ಸದರ ಬಕ ಮರನಪವರ ಮಡಬಶಕದ ಹಣದ ಬಗಗ ವಚರಸದ. ಆ ಸಮಯದಲ ಆರಳಶಪ ತನನ ಸಳಸಸಯ ಸಳಡಕಶಟವ ಬಧಳಕವ ಚಕಕನಲ ರಳ.18,48,640 ಮತತ ನ ಬರದನ ಸಹ ಮಡ ಪಯರದ ಸಳಸಸಗ ಸದರ ನಮಳದಸ, ತರಶಖನನ ನ ತಲನಪಸಲನ ಹಶಳ ನನಗ ಕಳಟಷರನತತನ. ಸದರ ಚಕಕನನ ಚಕಕನನ ನ ನನನ ಆರಳಶಪ ಸಳಸಸ ಪರವಗ ಪಯರದ ಸಳಸಸಗ ಕಳಟಷರನತತಶನ. ಸಕಯನ ನಧಯಲಯದ ಕಡತದಲರನವ ನಪ-4 ರ ಚಕಕನನ ನ ನಳಶಡ ಸದರ ಚಕನ ಕ ಆರಳಶಪ ನಶಡದದ ಚಕನ ಳ ತತರ. ಸದರ ವಧವಹರಕಕ ಕ ಎಳದನ ಒಪಪಕಳಳನ ಸಳಬಳಧಸದಳತ ಆರಳಶಪ ಹಣ ಪವರ ಮಡದದಗ ಪಯರದ ಸಳಸಸಯವರನ ನನನ ಸಳಸಸ ಶಶಶ ರಶಣನಕ ಎಳಟರ ಪಶಪಸಸವಖತಯಳದ ರಳ.18,48,603 ಹಣವನನ ದ ನಪ.9 ದಖಲಯಲ ನ ಡಬಟವಮಡದನ ದನಳಕಕ 28.09.2017 ತರಶಖನಳದನ ಪಯರದ ಸಳಸದಯವರನ ಸದರ ಹಣ ಡಬಟವ ಮಡದ ಭಗವನನ ನ ನಪ.9(ಎ) ಎಳದನ ಗನರನರಸಕಳಳಡರನತತರ. ಆರಳಶಪ ಸಳಸಸಯವರನ ಸದರ ಹಣವನನ ನ ನನಗಗಲ, ಪಯರದ ಸಳಸಸಗಗಲ ಈವರಗಳ ಮರನಪವರ ಮಡಲಲ. ಆರಳಶಪ ಸಳಸಸ ಸದರ ಹಣವನನ ನ ಮರನಪವರ ಮಡದಲ ಪಯರದ ಸಳಸಸಯವರನ ನನನ ಖತಗ ಪನಕ ರಳ.18,48,603 ನ ಜಮ ಮಡನತತರ.
ಮತತವನನ C.C.NO.17528/2018 16
18. But, the accused have taken the contention that, they have issued a blank cheque for the purpose of security and handed over the same to representative of the complainant company. Further the complainant has misused the said blank cheque and filed this false complaint against the accused. The accused in their defense have not disputed Ex.P.4-Cheque having been issued by them. They also does not dispute his signature on the said Cheque. But, they have taken up the contention that, they have issued a blank signed cheque in favour of the representative of the complainant company. When the Cheque was given to the representative of the complainant company it was blank. But the complainant mis-used the said cheque. Further they contended that, they have never admitted regarding repayment of amount and there is no transaction between the complainant and the accused as alleged by the complainant. But the complainant mis-used the said cheque and filed this false complaint. The accused have specifically denied having agree to C.C.NO.17528/2018 17 repay the amount of Rs.18,48,603/- their outstanding balance. The complainant has mis-used the blank cheque and filed present complaint before this court.
19. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that, from the evidence placed on record, the fact that the accused towards of discharge of the said payment, had issued Ex.P.4 in favour of the complainant. Further argued that, after the repeated request made by the complainant, the accused has not paid any amount to the complainant. He further argued that the accused has not denied the cheque-Ex.P.4 being drawn on their account. When the signature is not disputed, the presumption under section 139 N.I. Act is to be drawn in favour of the complainant. The accused have failed to elicit anything in the cross examination of P.W.1 and 2 to disbelieve the said evidence of the complainant C.C.NO.17528/2018 18 and P.W.2. The defence have failed to rebut the presumption under section 139 N.I.Act. The counsel for the complainant further argued that the accused have failed to produce any believable evidence that, the accused had issued a blank cheque in favour of the complainant for the purpose of security at the time of beginning supply the cement on credit basis and also the defence how the cheque was got the complainant and why they have not returned back the same is not clear. He further argued that, under section 139 of N.I. Act, there is a presumption that, the Cheque has been issued for discharge of legally enforceable debt/liability. In the present case, the accused have not disputed the Ex.P.4 being their Cheque drawn on their account. The said presumption is available to the complainant.
20. Further he has argued that, the accused have failed to prove the very fact that Ex.P.4 was given to the representative of the complainant company for the purpose of security and it was blank when it was given to the complainant. Moreover, under section 118 of N.I C.C.NO.17528/2018 19 Act, there is a presumption that the Negotiable Instrument is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that they had given a blank signed cheque in the beginning to supply cement on credit basis as security measure. As such, very defence of the accused is not believable.
21. The main defense of the accused is that there was no legally enforceable debt/balance due to the complainant from the accused for which the cheque Ex.P.4 was issued. So also they have taken up the defence that they had issued a blank signed cheque to the complainant. In order to attract the offence punishable under section 138 of N.I. Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the Cheque came to be issued. It is further defence that the complainant is a company under the Indian Companies C.C.NO.17528/2018 20 Act any authorization on behalf company to conduct case is through board of resolution appointing a person. In this case, there is no production of GPA of C.K.Jain nor board resolution and therefore, it is a legally factual mistake, the above complaint is unsustainable. Further Ex.P.1 is produced which is authority letter executed by Chandra Kumar Jain in favour of Vikram Kulkurni on 15.12.2017. Ex.P.10 is the power of attorney dated: 22.04.2019 executed by Goutham Gangully in favour of V.A.N.Murthy. Ex.P.11 again another authority letter executed by V.A.N.Murthy in favour of Vikram Kulkarni dated: 28.08.2019. Under Ex.P.10 Sri.Goutham Gangully cannot Sub-deligate the power in favour of Sri.V.A.N.Murthy under the Indian Contract Act delegation of power under Indian Contract Act, under section 190 to 194 is permissible only if, main power of attorney holder is empowered sub- delegate and not otherwise. It is further argument by the counsel for the defence is that in order to find out sub-delegation original power of attorney dated:
C.C.NO.17528/2018 21 13.12.2011 has not been produced. So Ex.P.11 has no legal significance in the eye of law and it is to be overlooked or discarded as same as no evidentary value. Further argument is that Ex.P.6 is the legal notice on reading of it is issued by one Sri.Nawaz B.N Regional Head of the Bengaluru office what immediately strikes in law is, that the said Nawaz B.N under no authorization, being a employee of company has issued this legal notice and as such the said legal notice Ex.P.6 is a document, which is unsustainable and unrecognizable in law. Further, said Nawaz has no right to issue a legal notice. Further argued that Ex.P.4 cheque in question was collecting in the beginning from the accused to supply cement on credit basis, as security measure. On looking it Ex.P.4 the signature of the accused is admitted. Whereas, the writing part of the cheque amount in words and in figure is in a different ink and different handwriting. Therefore, the entire cheque was filled up by the complainant as there whims. The complainant created all the documents and C.C.NO.17528/2018 22 filed this false case against the accused. Therefore, from the evidence placed on record, the very supplying cement on credit basis not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N,I. Act regarding existence of legally enforceable debt.
22. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further, the accused have not seriously disputed they had issued the said cheque in favour of the complainant. It is not disputed that, the complainant and the accused are businessman. While according to the complainant, they have during the course of business on the request of the accused No.2 the complainant company supplied cement in the name of the accused No.1 through its Vasavadatta Cement Division at Bengaluru from the period 01.12.2016 to 09.03.2017 on the credit basis, the accused in order to outstanding balance as part payment of said outstanding liability have issued the C.C.NO.17528/2018 23 said cheque in favour of the complainant and towards discharge of said part payment debt/amount, they had issued Ex.P.4. Whereas, the accused have contended that, they had given a blank signed chaque to the complainant at the time of beginning to supply cement on credit basis as security measure. When they had given signed Cheque, which was blank. The accused have specifically denied having debt/liability and issued the Cheque Ex.P.4 in the year 2017 towards the discharge of any debt/liability. They contends that the blank Cheque given by them to the complainant as was misused by the complainant and a false complaint was filed.
23. In order to attract the offence of the section 138 of N.I. Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the Cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant in order to prove its case, has examined its Senior Office as PW.1 and 11 documents are C.C.NO.17528/2018 24 marked at Ex.P.1 to 11. In chief examination, he has repeated the averments made by him in the complaint. The complainant also examined one more wintess as P.W.2, he has also supported the case of the complainant. In the present case, the accused have not disputed the Ex.P.4 being their cheque drawn on their account. The said presumption is available to the complainant.
24. In order to attract the offence punishable under section 138 of N.I. Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the Cheque came to be issued. The learned counsel for the complainant has submitted that, from the evidence of PW.1 and 2 it is established that, the accused towards the discharge of the said amount Ex.P.4 came to be issued in favour of the complainant.
25. Under Section 139 of N.I. Act, there is a presumption regarding the existence of legally enforceable debt or liability. Such presumption is C.C.NO.17528/2018 25 rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforcible debt or liability. In the case on hand also the accused have disputed the existence of legally enforceable debt/liability, for which Ex.P.4 was issued. In order to prove their defense, the accused have not produced any oral as well as documentary evidence. PW.1 and 2 during their cross-examination have specifically denied the suggestions made to them that, Ex.P.4 was issued in favour of the complainant as the security and same was blank at the time of issuing the same.
26. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case, further he has to produce some probable evidence, which creates doubt about the existence of legally C.C.NO.17528/2018 26 enforceable debt/liability. In the present case, as per the defence taken the accused had given a signed blank Cheque to the complainant as security in the beginning to supply cement on credit basis. Except, said defence, they have not produced any materials to prove such defence. If they had given a blank signed cheque to the complainant, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of said cheque. On which date the accused came to knew about the alleged illegal act of the complainant, they did not whisper about on what date they came to know the alleged cheque illegally mis-used by the complainant. Admittedly accused is a businessman having knowledge of the financial transaction, why they have given signed blank Cheque to the complainant without anticipating the consequence is not explained by them. So also, they have not stated anything as to what steps C.C.NO.17528/2018 27 they took to receive back the blank signed Cheque. Moreover, immediately after the alleged blank cheque mis-used by the complainant they not lodge complaint before concerned police station. No steps have been taken to receive back the blank signed Cheque, after they came to know about the same.
27. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I. Act that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/S Mohan (2010 AIR SCW 296), the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I. Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary.
C.C.NO.17528/2018 28 The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of Cheque- Ex.P.4 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
28. In the defence there is no ill-will between the complainant and the accused. Hence, mis-use of cheque and filing false case is not possible. The accused admittedly is a businessman and having knowledge of business. It is implies, they are conversant with financial transaction. If the complainant mis-used the said cheque and had not return the same, inspite of collecting cheque leaves from them, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because they did not C.C.NO.17528/2018 29 take any legal action against the complainant, even after filing of the complaint based on Ex.P.4-cheque. Further in order to escape from their liability the accused could have issued notice to their banker to stop payment. The accused before issuing notice to their banker to stop payment not issued any legal notice to the complainant or they could have given complaint to the police station immediately. No such steps were taken by the accused. They simply makes a bald allegation of mis-use of a blank signed cheque against the complainant. It appears, just to escape from their legal liability, they have taken such contentions without any valid basis.
29. Moreover, the complainant has got issued the legal notice to the accused by registered through its counsel calling upon the accused to make repayment of said amount to the complainant. Before a person is held to be guilty of the offence punishable under 138 of N.I. Act, the complainant has to prove the compliance of the requirement under section 138 of N.I. Act. It is C.C.NO.17528/2018 30 not in dispute that the Ex.P.4 is the cheque drawn on account of the accused. In view of the above discussions it is also held to be proved that, it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and also cheque return memo Ex.P.5 it is established that the cheque was dishonored for the reason "Payment stopped by drawer'' in the account of the accused. A notice being issued as per Ex.P.6 within one month from the date of dishonour is also not in dispute. In the case on hand the accused have not disputed the receipt of the legal notice. The said notice was received by the accused. The accused failed to reply the notice, immediately after they received the demand notice. Thereby, they could have asserted their defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at their address. The same is shown to have been served on the accused as per Ex.P.7. When the accused have not disputed, the notice sent to the correct address is sufficient C.C.NO.17528/2018 31 compliance of under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
30. It is not the contention of the accused that thereafter they have repaid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore in the case on hand on perusal of the evidence placed on record, all the essential ingredients of section 138 N.I.Act, have been complied with. As the accused have not repaid the cheque amount within stipulated period, the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Further the said notice was received by the accused. The accused have not given any reply to the notice and they have failed to repay the amount. Even they did not whisper anything about the defence while their plea was recorded under section 251 of Cr.P.C. In view of C.C.NO.17528/2018 32 judgment of Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
31. In addition to this in the case of T.P. Murugan (Dead) through legal representatives V/s Bojan (2018 (8) SCC 469), the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such C.C.NO.17528/2018 33 presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I. Act cannot be discharged. The principle of law laiddown in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused have not been able to make out a probable case on their behalf.
32. The accused have taken defence that except signature other writings on Ex.P.4-cheque is not in their handwriting, which were filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. As narrated above, P.W.2 has specifically asserted that accused after putting their signature on Ex.P.4 to filled up other contents and then handed over it to them. When the accused admits their signatures, they cannot take up a defence that other contents of cheque were filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC) 138), C.C.NO.17528/2018 34 between Bir Singh V/s Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer, if cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. Even a blank cheque leaf, voluntarily C.C.NO.17528/2018 35 signed and handed over by the accused which is towards some payment. Would attract presumption Under section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
33. The principles emerging from the above referred decision make it clear that, it is not mandatory and no law prescribes that the contents of cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I Act arises. The principle of law laid- down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I Act, cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
34. The Hon'ble Apex Court in K.Bhaskaran V/s Sankaran Vaidhyan Balan and another (1999 Cri. L.J.4608) held that, if the accused denies issue of C.C.NO.17528/2018 36 cheque although owned his signature therein, the presumption arises that cheque was made or drawn for consideration on the date mentioned in cheque. The holder of cheque presumed to have received it for discharge of liability of the drawer.
35. As per the version of the accused they have nowhere denied transaction. The accused themselves have admitted that, they are the holder of alleged cheque. It is sufficient hold that the accused have issued cheque-Ex.P.4 and even after the accused have not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant has complied all the terms of ingredients of the provisions of 138 of N.I Act. The accused is liable for dishonor of cheque. As per the ruling reported in 2015 (2), Bankman 415, "Section 138 and 139 of N.I Act. 1881. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I Act. Accordingly, PW.1 C.C.NO.17528/2018 37 has established their case the accused have issued cheque-Ex.P.4 in order to pay the legally recoverable amount. Therefore, the accused have failed to probables the defence taken by them that the Cheque- Ex.P.4 was a blank signed Cheque and given to the complainant for the purpose of security. Therefore, the accused have failed to rebut the presumption under section 139 of N.I. Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
36. The complainant in his evidence has specifically stated that, the complainant had supplied the cement on the request of the accused No.2 on credit basis. When the credit limit permissible as per tis credit policy had crossed and their outstanding balance arose to the tune of Rs.18,48,603/- the complainant was constrained to issued reminder C.C.NO.17528/2018 38 notice to the accused. Upon issuing said reminder notice towards discharge of outstanding balance the accused issued a cheque-Ex.P.4 as a part payment in favour of the complainant this fact has sufficient to prove that the complainant having sufficient means. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, no documents could have been existence the evidencing financial transaction. This factor will not affect case of the complainant to disbelieve the financial transaction. When the accused have failed to rebut the presumption under section 139 of N.I. Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused have failed to probables their defense. When the accused have failed to rebut the presumption under section 139 of N.I.Act, none furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused have failed to probables C.C.NO.17528/2018 39 their defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
37.POINT NO.3 AND 4: In order to avoid repetition of facts, these two points are taken together for common discussion. Before a person is held to have committed the offence punishable under section 138 of N.I. Act, the complainant has to prove all the requirements of section 138 of N.I. Act. The Cheque- Ex.P.4 drawn on the account of the accused is not in dispute. The said Cheque having been dishonored, when it was presented by the complainant before the Bank for encashment is also not seriously disputed by the accused. Thereafter, the notice Ex.P.7 is received by the accused, but they have not given any reply to the said notice is further admitted. The accused have not taken up any contention that, thereafter they had paid the Cheque amount within stipulated time of 15 days, after given of the notice. As such in the present case from perusal of documents, the essential requirements of section 138 of N.I. Act, have been C.C.NO.17528/2018 40 complied with. When the accused immediately after given the notice, they have not paid the Cheque amount. In this case the accused why they have not replied the notice and initially why they have not produced any documents. After service of notice the accused have not paid the cheque amount and they did not reply the notice. Hence, the present complaint came to be filed before the court on 21.12.2017 within the period of one month from the date cause action.
38. While discussing the point No.1 and 2, this court has already observed that, the complainant has proved that, the Cheque was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements of section 138 of N.I. Act, being complied with the accused are found to have committed an offence punishable under section 138 of N.I Act. Accordingly, I answer point No.3 and 4 in the Affirmative.
39. POINT NO.5: The accused are held to have committed an offence punishable under section 138 of C.C.NO.17528/2018 41 N.I.Act. The complainant has proved its case. The accused have failed to prove their rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with the accused are found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused are not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following:
:ORDER:
Acting under section 255(2) of Cr.P.C. the accused are convicted for the offence punishable under section 138 of N.I. Act.
The Bail bond stands canceled. The accused are sentence to pay Rs.18,53,603/- (Eighteen Lakhs Fifty Three Thousand Six Hundred and Three) only to the complainant.
It is further ordered that, out of the said fine amount an amount of Rs.18,48,603/-/- (Eighteen Lakhs Forty C.C.NO.17528/2018 42 Eight Thousand Six Hundred and Three) only shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs. 5,000/- (Rupees Five Thousand) only shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of one year.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 29 th day of September 2022) (Soubhagya.B.Bhusher) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.Vikram Kulkarni PW.2 : Mr.Sangayya V. Hiremath.
List of documents marked on behalf of the complainant:
Ex.P.1 : Authorization letter
Ex.P.2 : Certified copy of the Account Extract.
Ex.P.3 : Letter written to the accused by the
complainant.
Ex.P.4 : Cheque.
Ex.P4(a) : Signature of the accused.
Ex.P.5 : Bank endorsements.
Ex.P.6 : Office copy of legal notice.
Ex.P.6(a) : Postal receipts.
Ex.P.7 : Postal Acknowledgment.
C.C.NO.17528/2018
43
Ex.P.8 : Complaint.
Ex.P.9 : Computer downloaded copy of the ledger
account extract.
Ex.P.9(a) : Debited statement.
Ex.P.9(b) : Re-debited statement.
Ex.P.10 : Complainant company has given the power of
attorney to the V.A.N.Murthy.
Ex.P.11 : Complainant company given the authority
letter to the PW1 on 28.08.2019.
List of witnesses examined on behalf of the accused:
Nil List of documents marked on behalf of the accused:
Nil XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
C.C.NO.17528/2018 44 29.09.2022 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused are convicted for the offence punishable under section 138 of N.I. Act.
C.C.NO.17528/2018 45 The bail bond stands canceled.
The accused are sentence to pay Rs.18,53,603/- (Eighteen Lakhs Fifty Three Thousand Six Hundred and Three) only to the complainant.
It is further ordered that, out of the said fine amount an amount of Rs.18,48,603/-/- (Eighteen Lakhs Forty Eight Thousand Six Hundred and Three) only shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs. 5,000/-
(Rupees Five Thousand) only shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of one year.
XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.