Bangalore District Court
M/S. Mannapuram Chits (K) vs Mr. H.P. Mohan Kumar on 3 March, 2020
IN THE COURT OF XXVII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BANGALORE.
Present: Sri. N.Muniraja B.A., LL.M.,
XXVII A.C.M.M Bangalore.
Dated: This the 3rd day of March 2020.
C.C. NO.9343/2018
Complainant M/s. MANNAPURAM CHITS (K)
PVT LTD.
No.881/F, 1st Floor,
V.S. Arcade,
II Stage, Sankarmutt Bus Stop,
Bengaluru 560079.
Branch : Basaveshwar Nagar
Represented by its
Assistant Legal Manager,
Sri. Ramesha D.K,
(Rep by Sri. P.P. Jayakumara
Adv.)
V/s.
Accused MR. H.P. Mohan Kumar,
S/o. B. Parvatha Basaiah,
No.202, Ground Floor,
1st Main, Near Medical Store,
ITI Layout, Nayandanahalli,
Bengaluru 560039.
Also at:
Mr. H.P. Mohan Kumar,
S/o. B. Parvatha Basaiah,
R/at No.61/1, Ground Floor,
HBCS 1st Main, ITI Layout,
Behind Raghavendra Medical,
Store, Nayandahalli,
Bengaluru 560039.
(Reptd by Sri. B.H. Shamanna
Adv.,)
2 C.C. No. 9343/2018
Offence U/s.138 of Negotiable
Instruments Act.
Plea of the accused Pleaded not guilty
Final Order Convicted
Judgment Date 03/03/2020
****
JUDGMENT
The complainant chit company filed this complaint against the accused for the offence punishable U/s.138 of the Negotiable Instruments Act.
2. Brief facts of the complainant case are as follows:-
The complainant company is a reputed Chit Company registered under the companies Act and it is in the business of promoting and conducting Chits as per the provisions of the Chit Funds Act. The accused subscribed Chit bearing No. BSN001LG-32 for Chit value of Rs.10,00,000/- payable at Rs.20,000/- per month for 50 months from the complainant company. The accused participated in the Chit auction and he was declared as 3 C.C. No. 9343/2018 prize bidder and received prize money of Rs.7,00,000/-
after deducting Bid amount on 21/01/2015. The accused along with his guarantors executed On demand promissory note, Surety Form, Guarantee Bond and other relevant documents for the amount received from the complainant company. After receiving prize money the accused was not regular in payment of the Chit installments and he has paid 21 installments and thereafter he became defaulter. The complainant company filed Dispute No.104/2016-17 before the Deputy Registrar of Chits, Bengaluru for recovery of balance amount of Rs.7,42,298/- and in the said proceedings passed award directing the accused and his guarantors to pay an amount Rs.7,42,298/- with interest and costs. The Deputy Registrar of Chits attached the property bearing No.32, VP Khatha No.161, situated at Kadabagere Village of the accused. At that time the accused issued cheque bearing No.000106 dated:
09/12/2017 for a sum of Rs.7,00,000/- drawn on HDFC 4 C.C. No. 9343/2018 Bank, Chandra Layout Branch, Bengaluru infavour of the complainant as a part of dispute claim. The complainant presented the said cheque for encashment on 12/12/2017 through their banker Karur Vyshya Bank, Rajaji Nagar Branch, Bengaluru and the said cheque returned with an endorsement dated:
13/12/2017 for the reason "Funds Insufficient". The complainant issued demand notice dated : 02/01/2018 through RPAD calling upon the accused for payment of the cheque amount within 15 days from the date of receipt of notice and the said notice returned with postal shara No such person. The accused has not paid the cheque amount. Hence this complaint.
3. Sworn Statement of the Authorized Representative of the complainant company recorded as PW1 and got marked 12 documents as per Ex.P.1 to 12 and ordered summons to the accused. The accused appeared through his advocate and he enlarged on bail. 5 C.C. No. 9343/2018 Substance of accusation readover to the accused and he pleads the case of the complainant as false. In view of the decision of the Hon'ble Supreme Court of India, reported in (2014) 5 SCC 590 (Indian Bank Association & Ors V/s. Union of India & Ors), sworn statement of the complainant is treated as chief- examination of the complainant. PW1 led further chief- examination and got marked Ex.P13 to 22 documents. The accused has filed application U/sec. 145(2) of the Negotiable Instruments Act seeking permission for cross- examination of the complainant and allowed the same. On behalf of the accused cross-examined the PW1. On closure of the complainant side evidence, Statement of the accused recorded U/sec. 313 of Cr.P.C. The accused has led defense evidence as DW1 and got examined one witness as DW2 and on behalf of the accused no documents are got marked.
6 C.C. No. 9343/2018
4. Heard the learned counsels for the complainant and accused. After the case posted for judgment the learned counsel for the accused submitted synopsis of arguments and I perused the records.
5. The points that would arise for my consideration are as follows:
(i) Whether the complainant proves that the accused issued Ex.P.3 cheque towards discharge of legally enforceable debt or liability and the said cheque dishonoured for the reason "Funds Insufficient" ?
(ii) Whether the complainant proves that after dishonour of cheque, served notice to the accused in compliance of Sec.138(b) of N.I Act?
(iii) What order?
6. 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.7 C.C. No. 9343/2018
REASONS
7. Point No.1 : It is the case of the complainant company that the accused subscribed Chit bearing No. BSN001LG-32 for Chit value of Rs.10,00,000/- payable at Rs.20,000/- per month for 50 months and the accused participated in the Chit auction and received prize money of Rs.7,00,000/- after deducting the Bid amount on 21/01/2015 and after receiving the prize money the accused was not regular in payment of the Chit installments and he paid 21 installments and thereafter he became defaulter. The complainant company filed Dispute No. 104/2016-17 before the Deputy Registrar, for recovery of balance amount of Rs.7,42,298/- and in the said proceedings passed an award against the accused and his guarantors to pay an amount of Rs.7,42,298/- with costs and interest. The accused came to know about the said fact issued the cheque in question in-favour of the complainant as a part claim of the said Dispute 8 C.C. No. 9343/2018 amount and on presentation the said cheque dishonoured for the reason "Funds Insufficient" and in spite of demand notice by the complainant the accused has not paid the cheque amount. PW1 who is the authorized representative of the complainant company in his evidence affidavit has reiterated the contents of the complaint averments.
8. As borne out from the cross-examination of PW1 and defense evidence, contention of the accused is that the accused auctioned the chit on 21/09/2014 and the complainant company paid prize money on 10/01/2015 after the accused filing case before the Consumer Forum against the complainant company. The accused has paid entire Chit installments. At the time of subscription of Chit the complainant obtained 4 blank signed cheques from the accused for security purpose and misused one among them. The complainant company run the Chit without obtaining the permission.
9 C.C. No. 9343/2018
9. Before-adverting the contentions of the accused let me appreciate the undisputed facts and admissions on the part of the accused. The complainant produced Ex.P10 Cash voucher, Ex.P11 On demand pro-note, Ex.P12 Chit Agreement and Ex.P15 & 16 Certified copies of Award and Recovery certificate passed in Dispute No. 104/2016-17 to substantiate the factum of subscription of Chit and receipt of prize money by the accused and initiating the proceedings against the accused before Deputy Registrar of Chits, for recovery of the balance amount. The accused neither in the cross-examination of PW1 nor in the defense evidence disputes the subscription of Chit bearing No. BSN001LG-32 for Chit value of Rs.10,00,000/- payable at Rs.20,000/- per month for 50 months and auction of the said Chit and receipt of prize money of Rs.7,00,000/- on 21/01/2015 from the complainant company. Rather, the accused in 10 C.C. No. 9343/2018 his defense evidence stated that he subscribed Chit value of Rs.10,00,000/- payable at Rs.20,000/- per month for 50 months. Further, the accused in the course of cross- examination also admits that as per the Ex.P10 on 10/01/2015 he received an amount of Rs.7,00,000/- from the complainant company. The accused during the course of recording of Statement U/sec. 313 of Cr.P.C also admits the factum of subscription of Chit bearing No. BSN001LG-32 for Chit value of Rs.10,00,000/- payable at Rs.20,000/- per month for 50 months and participated in the Chit auction and receipt of prize money of Rs.7,00,000/- from the complainant. Further on behalf of the accused in the course of cross-examination of PW1 by way of suggestion admits the passing of Award by the Registrar of Chits against the accused. The learned counsel for the accused has cited the decision of the Hon'ble Supreme Court of India Reported in Laws (SC) 2013 5 18 (Rajkumar Singh @ Raju @ Batya Vs. State of Rajasthan to contend that, the statement made by the 11 C.C. No. 9343/2018 accused U/s.313 of Cr.P.C. is not a substantitive peace of evidence and it can be used only for appreciating the evidence led by the prosecution, through it cannot be a substitute for the evidence of the prosecution. Here is a case as noticed above the accused neither in the cross examinaiton nor in the defence evidence denied the fact that, he was the subscriber of chit group No.BSN001LG conducted by the complainant company and receipt of prise money of Rs.7,00,000/- from the complainant company. Therefore, there is no dispute with regard to the subscription of Chit bearing No. BSN001LG-32 for Chit value of Rs.10,00,000/- payable at Rs.20,000/- per month for 50 months from the complainant company and auction of the said Chit and receipt of prize money of Rs.7,00,000/- by the accused and passing of the award by the Deputy Registrar of Chits against the accused for recovery of balance Chit amount.
12 C.C. No. 9343/2018
10. The learned counsel for the accused referring to Ex.P17 Minutes of Meeting held on 03/09/2016 in which Mr. K.G. Ravy, Managing Director of the complainant company authorized to represent the complainant company and to delegate his powers to the employes of the complainant company. Ex.P1 Extract of Minutes of Meeting under which the complainant claims that Mr. K.G. Ravy, Managing Director of the complainant company is authorized to represent the complainant company and delegate his powers to employees is dated 25/08/2016. Since, Ex.P17 Minutes of Meeting held on 03/09/2016 under Ex.P1 Mr. K.G. Ravy, Managing Director has not authorized to represent the complainant company and as the said Mr. K.G. Ravy, Managing Director has not authorized to represent the complainant company he had no authority to issue Authorization, Letter to PW1 and therefore PW1 is not authorized to represent the complainant company. He further argued that Ex.P17 Minutes of Meeting is not certified by the 13 C.C. No. 9343/2018 Registrar of Companies as per Sec. 118 of the Companies Act. The learned counsel for the accused has cited the judgment of Hon'ble High Court of Karnataka reported in LAWs (KAR) 2013 9 262 (Canara Worksshop Limited V/s Sri. Mahanthesh) to contended that the complaint filed without authorization is not maintainable.
11. Per-contra, the learned counsle for the complainant has argued that Ex.P17 Minutes of Meeting held on 25/08/2016 and not on 03/09/2016 and Ex.P1 is the extract of Ex.P17 Minutes of Meeting and in the Minutes of Meeting of the complainant company held on 25/08/2016 Mr. K.G. Ravy, Managing Director of the authorized to represent the complainant company and delegate his powers to other employees of the complainant company and the said Mr. K.G. Ravy, Managing Director has authorized PW1 to represent the complainant company by giving Ex.P2 Authorization 14 C.C. No. 9343/2018 Letter and therefore PW1 is duly authorized to represent the complainant company.
12. On behalf of the complainant company produced Ex.P1 Extract of Minutes of Meeting of the Board of Directors of the complainant company held on 25/08/2016 and Ex.P2 Authorization Letter to show that PW1 is Authorized to represent the complainant company. Ex.P17 is the Minutes of Meeting of the Board of Directors of the complainant company. No doubt, it is true that in the last page of Ex.P17 document date is shown as 03/09/2016 but in the first page of Ex.P17 document at the caption itself mentioned as Minutes of meeting of the Board of Directors of the complainant company held on 25/08/2016. It is seen from Ex.P17 document that under item No. 9 of the said meeting the Board of Directors of the complainant company resolved to Authorize to Mr. K.G. Ravy, Managing Director to represent the complainant company in all the cases filed 15 C.C. No. 9343/2018 by and against the company and delegate his powers to other employees of the complainant company. Ex.P1 is the Extract of Ex.P17 Minutes of Meeting held on 25/08/2016. In Ex.P17 as well as Ex.P1 documents clearly mentioned the date of meeting of the Board of Directors of the complainant company held on 25/08/2016. Therefore, the date mentioned as 03/09/2016 in the last page of Ex.P17 document will not confirmed the Board of Meeting of the Director of the complainant company held on 03/09/2016. As per Sec. 179 of the companies Act 2013 Board of Directors of the company entitled to exercise all powers. Here is a case, as per Ex.P17 Board of Directors of the complainant company in the Board Meeting held on 25/08/2016 Resolved to authorize Mr. K.G. Ravy, Managing Director of the complainant company to represent the company and delegate his powers to other employees of the company. As noticed above, Ex.P1 is the Extract of the said Ex.P17 Minutes of Meeting. Ex.P1 & 17 documents 16 C.C. No. 9343/2018 clearly goes to show that the Board of Directors of the complainant company authorized Mr. K.G. Ravy, Managing Director to represent the complainant company before the court of law and further authorized him to delegate his powers to some other employees. Therefore, Mr. K.G. Ravy, Managing Director of the complainant company is duly authorized by the Board of Directors of the complainant company to represent the complainant company. As could be seen from Ex.P2 document that the said Mr. K.G. Ravy, Managing Director of the complainant company authorized PW1 to represent the complainant company. Ex.P1, 2 and 17 documents clearly establishes that Mr. K.G. Ravy, Managing Director is duly authorized by the Board of Directors of the complainant company to represent the company before the court of law and PW1 is authorized by the said Mr. K.G. Ravy, Managing Director to represent the complainant company. Therefore the 17 C.C. No. 9343/2018 decision relied upon by the learned counsel for the accused will not come to the aid of the accused.
13. The arguments of the learned counsel for the accused is that Ex.P17 Minutes of Meeting is not certified by the Registrar of Companies as per Sec. 118 of the Companies Act. Sec. 118 of the Companies Act 2013 deals with Minutes of proceedings of General Meeting, Meeting of Board of Directors and other Meetings Resolution passed by the Postal ballet. In fact Sec. 117 of the Companies Act deals with filing of Resolution and Agreement with the Registrar within 30 days. It may be mentioned that as per Notification dated: 05/06/2015 of the Ministry of Corporate Affairs New Delhi, Chapter 7 Clause (g) of Sub Sec. (3) of Sec.117 of the Companies Act not applies to the private Companies. Here is a case, the complainant Chit company is a private Ltd., Company. In view of the above said Notification certification of the 18 C.C. No. 9343/2018 Registrar of Companies not required to Ex.P17 Minutes of Meeting.
14. The learned counsel for the accused has argued that the complainant company has charged 24% interest p.a. against the provisions of the Karnataka Prohibition of Charging Exorbitant Interest Act and also relied upon the judgment dated: 20/01/2015 passed in Crl.Appeal No. 348/2013 C/w 349/2013 by the Hon'ble High Court of Karnataka, Bengaluru. I have gone through the said judgment. The Hon'ble High Court of Karnataka in view of the Notification dated: 28/03/2013 issued by the Government of Karnataka discussed that maximum rate of interest is fixed to secured loan @ 14% p.a. and unsecured loan for 16% per annum. It may be mentioned that the said rate of interest applies to Money Lending Business. Here is a case the complainant has not lent loan to the accused for interest. Therefore the said judgment and provisions of the Karnataka Prohibition of 19 C.C. No. 9343/2018 Charging Exorbitant interest Act not applies to this case. As could be seen from the terms of Ex.P12 Chit Agreement that if subscriber defaulted continuously for a period of 3 months, such subscriber is liable for payment of interest at 24% per annum on the defaulted installments and future subscriptions. Therefore the accused is liable to pay the contractual rate of interest at 24% to the defaulted subscription amount. Here itself mentioned that the learned counsel for the accused by reling upon the decision of the Hon'ble Supreme Court of India reported in LAWs (SC) 2019 4 12 (Pioneer Urban Land and Infrastructure V/s. Govindan Raghavendra) contended that one sided agreement is unfair and party cannot seek to bind the party with such one sided agreement. Here is a case Ex.P12 Chit Agreement is entered between the complainant company and accused. Foreman of the complainant company and accused are signatries to the said Chit Agreement and the said Agreement is Registered with the Deputy Registrar of 20 C.C. No. 9343/2018 Chits, North Range, Bengaluru City, Bengaluru. Therefore, it cannot be said that Ex.P12 Chit Agreement is one sided agreement. Therefore the above cited decision relied upon by the learned counsel for the accused will not come to the aid of the accused.
15. The learned counsel for the accused has argued that the complainant Chit Company run the Chit business illegally without obtaining permission. During the course of cross-examination, PW1 has clearly denied the suggestion made on behalf of the accused to the effect that the complainant company run the Chit illegally without obtaining permission. On behalf of the complainant produced Ex.P13 Chit prior sanction order and Ex.P14 Chit commencement Certificate issued by the Deputy Registrar of Chits, North Range, Bengaluru City, Bengaluru. The said Ex.P13 & 14 documents goes to show that the complainant Chit company by obtaining necessary permission from the competent authority 21 C.C. No. 9343/2018 conducted the Chit Group No. BSN001LG in which the accused was one of the Subscriber. The learned counsel for the accused has contended that fixed deposit receipt Numbers mentioned in Ex.P13 Chit Agreement and Ex.P13 Chit prior sanction order does not tallies to each other and on the said aspect of the matter cross- examined the PW1. No doubt it is true that the fixed deposit receipt Number mentioned in Ex.P12 Chit agreement and Ex.P13 Chit prior sanction order are different. It may be mentioned that the said mistake itself does not invalidate the Chit prior sanction order as well as Chit agreement.
16. The learned counsel for the accused referring to the provisions of the Chit Funds Act has argued that the complainant Chit company has not followed the mandatory provisions in conducting the Chit business. It is pertinent to note that as noticed above, the complainant produced Ex.P13 Chit prior sanction order 22 C.C. No. 9343/2018 and Ex.P14 Chit commencement Certificate. The said documents goes to show that the complainant obtained permission to conduct the Chit Group No. BSN001LG. As could be seen from Ex.P12 Chit Agreement that the complainant company and the accused have entered into the Chit Agreement and the said Chit agreement is registered with the Deputy Registrar of Chits, North Range, Bengaluru City, Bengaluru and the complainant Chit company made fixed deposit to run the Chit. It is seen from Ex.P22 document that the complainant company has maintained the Chit ledger Extract as per Sec.23 of the Chit Funds Act. Therefore all these documents goes to show that the complainant Chit company has conducted the Chit business by following provisions of the Chit Funds Act.
17. During the course of cross-examination of PW1 it is elicited that the amount payable by the accused is not mentioned in the income Tax returns of the 23 C.C. No. 9343/2018 complainant company. On the application of the accused the complainant company produced Ex.P18 to 21 Income Tax Returns for the Assessment year 2015-16, 2016-17, 2017-18 and 2018-19. It may be mentioned that in the said Ex.P18 to 21 Income Tax Returns mentioned the total amount payable to the complainant company and not mentioned the amount payable by each subscribers to the complainant company.
18. The contention of the accused is that he auctioned the Chit on 21/09/2014 and the complainant paid prize money on 10/01/2015 after filing of complaint by him before the Consumer Forum. The accused has paid the entire Chit installments and at the time of subscription of Chit the complainant obtained 4 blank cheques for security purpose and misused one cheque among the said 4 cheques. The accused to prove his contention that, at the time of subscription of chit he had issued 4 blank cheuqes to the complainant examined 24 C.C. No. 9343/2018 DW.2. DW.2 has stated that, he accompanid the accused to subscribe chit from the complainant company and at that time complainant obtained 4 blank cheuqes for security purpose. It is here itself relevant to note that, on behalf of the complainant cross examined the DW.2 and denied the statement of DW.2 that the complainant obtained cheques from the accused for security purpose. DW.2 in the course of cross examination has stated that, the accused at the time of receiving prize money has issued 4 blank cheques to the complainant for security purpose and he does not know the said cheques belongs to which bank. The DW.2 in the course of cross examinaiton made contrary statement to his chief examination. Because DW.2 in his chief examination has stated that, the complainant obtained 4 blank cheuqes from the accused at the time of subscription of chit by the accused. In such cicumstances how for the evidence of DW.2 is believable. No doubt on behalf of the complainant not much disputes the filing of complaint by 25 C.C. No. 9343/2018 the accused before the Consumer Forum against the complainant company. But, the accused in the course of cross-examination as well as at the time of recording of Statement U/sec. 313 of Cr.P.C admits the receipt of prize money of Rs.7,00,000/- from the complainant company. The accused in his cross-examination has stated that the complaint filed by him against the complainant company before the Consumer Forum is dismissed.
19. It is the case of the complainant that the accused has paid 21 Chit installments and thereafter he became defaulter and in proof of the same the complainant produced Chit ledger Extract as per Ex.P22. During the course of cross-examination of PW1 on behalf of the accused made suggestion to the effect that the accused has paid entire Chit installments and the complainant issued receipts up to 21 Chit installments and after the accused filing of case before the District 26 C.C. No. 9343/2018 Consumer Forum the complainant not issued the receipts for payment of the remaining installments. Of course PW1 has specifically denied the said suggestion made on behalf of the accused. The accused in the course of cross-examination has stated that he is having documents to show the payment of 27 installments and the complainant not issued the receipts for payment of the remaining 23 installments and he has given the documents to his Advocate having paid 27 installments. On behalf of the accused not produced any documents to show the payment of 27 Chit installments. As noticed above, as per the suggestion made on behalf of the accused in the course of cross-examination of PW1, the complainant issued receipts for payment of 21 installments and thereafter not issued the receipts for the payment of the remaining Chit installments. When the complainant issued receipts to the accused for payment of 21 installments there were no reasons for the complainant for not issuing receipts for payment of the 27 C.C. No. 9343/2018 remaining Chit installments and the accused could have insisted the complainant for issuance of the receipts for payment of the remaining installments. If the accused paid entire chit installments and he issued the cheques for security purpose, the accused could have issued notice to the complainant for return of the cheques issued for alleged security purpose or issued stop payment instructions to the bank. But the accused has not taken any such steps for the reason best known to him and there were no reasons for the accused for not taking of such steps. Inaction on the part of the accused leads to draw an adverse inference against him.
20. As noticed above, it is an undisputed fact that, the accused was the subscriber of Chit Group No.BSN001LG-32 for chit value of Rs.10,00,000/- conducted by the complainant company and the accused participated in the said chit and received price money of Rs.7,00,000/- from the complainant company. In the 28 C.C. No. 9343/2018 course of cross-examination of PW1 by way of suggestion on behalf of the accused admits about the passing of award of the Deputy Registrar of Chits against the accused. The complainant produced the certificated copies of award and recovery certificate passed in dispute No.104/2016-17 by the Deputy Registrar of Chits, Bengaluru as per Ex.P.15 and 16. The said Ex.P.15 and 16 documents goes to show that, in dispute No.104/2016-17 filed by the complainant company passed an award against the accused and he is guarantors for sum of Rs.7,42,298/- with interest at 24% p.a. and costs of Rs.21,544/-. The accused during the course of recording of Statement U/sec. 313 of Cr.P.C., clearly admits the issuance of cheque towards discharge of the outstanding amount. As per Ex.P4 Bank endorsement the cheque in question dishonoured for the reason "Funds Insufficient" in the account of the accused. It is not the defence of the accused that at the time of presentation of Ex.P3 cheque for encashment there were 29 C.C. No. 9343/2018 sufficient funds in his account. More over there is a presumption U/sec. 146 of the Negotiable Instruments Act with regard to the bank endorsement. The complainant by adducing oral coupled with documentary evidence proved that the accused subscribed Chit from the complainant company and he participated in the Chit auction and received prize money and he is due of installments of the Chit to the complainant company and issued cheque in question towards discharge of the outstanding Chit amount and the said cheque dishonoured. Though the accused cross-examined the PW1 at length and led defense evidence but fails to probablize his defense version that he has paid the entire chit installments and he had issued the cheque for security purpose and thereby the accused fails to rebut the presumption U/sec. 139 of the Negotiable Instruments Act. In view of my above discussion, I answer Point No.1 in the Affirmative.
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21. Point No.2 :- It is the case of the complainant that after dishonour of the cheque issued demand notice dated: 02/01/2018 through RPAD calling upon the accused to make payment of cheque amount within 15 days from the date of receipt of notice and the said notice returned on 03/01/2018 with postal shara "No such Person". On behalf of the complainant to prove the factum of issuance of notice to the accused through RPAD after dishonour of the cheque produced Ex.P5 Office copy of notice, Ex.P6 & 7 Postal receipts and Ex.P8 & 9 Returned Postal covers. As could be seen from the Postal shara made on Ex.P8 & 9 Returned Postal Covers that the notice sent to the accused returned as No such person. During the course of cross-examination, the accused admits that the address mentioned in the cause title of the complaint, Ex.P11 on Demand promissory note and Ex.P9 Postal cover belongs to him and if any post sent to the said address the same will be reached to him. 31 C.C. No. 9343/2018 So it is crystal clear that the complainant after dishonour of the cheque sent notice to the correct address of the accused. The accused might have evaded service of notice. Since, the complainant sent notice to the correct address of the accused through Registered Post. The said notice deemed to have been served on the accused. Therefore the complainant after dishonour of the cheque by issuing notice to the correct address of the accused through RPAD complied the mandatory requirement of Sec.138(b) of the Negotiable Instruments Act. Hence, I answer Point No.2 in the Affirmative.
22. Point No.3 :- In view of my findings on Point No.1 & 2 the complainant proved that the accused subscribed Chit from the complainant company and bid the Chit and received prize money and he has issued Ex.P3 Cheque towards discharge of the outstanding Chit amount and the said cheque dishonored. The complainant company after dishonour of the cheque by 32 C.C. No. 9343/2018 issuing demand notice to the accused complied the mandatory requirement of Sec. 138(b) of the Negotiable Instruments Act. Therefore the accused is liable for punishment for the offence punishable U/sec. 138 of the Negotiable Instruments Act. Here is a case Ex.P3 Cheque is dated: 09/12/2017 and amount covered there under is of Rs.7,00,000/-. The cheque amount involved in this case is public money payable by the complainant company to the subscribers of the Chit. But the act of the accused dragged the complainant to the court and the complainant has spent more than 2 years for redressal. It is under these circumstances the complainant has to be suitably compensated in the matter. It is the case of the complainant that the accused issued the cheque towards part discharge of the award amount passed in Dispute No. 104/2016-17 by the Deputy Registrar Chits. It is come in the evidence that the complainant company based on the said award filed Execution Petition for recovery of the award amount. Under these 33 C.C. No. 9343/2018 circumstances, the compensation amount payable by the accused to the complainant in this case is liable to the deducted from the amount which may recovered in the Execution Petition filed by the complainant company. In the result, I proceed to pass the following:-
ORDER The complaint filed by the complainant Chit company against the accused is allowed.
Acting U/s.255(2) of Cr.PC, the accused is convicted for the offence punishable U/s.138 of N.I. Act and sentenced him to pay fine of Rs.7,25,000/-. In default of payment of the said fine amount, the accused shall undergo simple imprisonment for a period of Six months.
Out of the said fine amount ordered to pay Rs.7,20,000/- to the complainant as compensation and the remaining amount of Rs.5,000/- shall go to the state. (Dictated to the stenographer, transcribed by her, corrected and then pronounced in open court by me on this the 3 rd day of March, 2020) (N.Muniraja) XXVII A.C.M.M., Bengaluru.34 C.C. No. 9343/2018
ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : SRI. RAMESH. D.K Documents marked on behalf of the complainant Ex.P1 : Extract of minutes of Meeting of the Board of Directors of the complainant company held on 25/08/2016 Ex.P2 : Authorization letter Ex.P3 : Cheque Ex.P3(a) : Signature of the accused Ex.P4 : Bank Endorsement Ex.P5 : Office copy of Legal notice Ex.P6 & 7 : Postal receipts Ex.P8 & 9 : Returned RPAD Covers Ex.P8(a) & 9(a) : Copy of notice contained in Ex.P8 & 9 RPAD Covers Ex.P10 : Cash Voucher Ex.P11 : On demand Promissory Note Ex.P12 : Chit Agreement Ex.P13 : Chit prior sanction order Ex.P14 : Chit commencement certificate Ex.P15 : C/c of Award passed in Dispute No.104/16-17 35 C.C. No. 9343/2018 Ex.P16 : C/c of Recovery Certificate in Dispute No. 104/16-17 Ex.P17 : True copy of Minutes of Meeting of the Board of Directors of the complainant company held on 25/08/2019 Ex.P18 to 21 : True copies of Income Tax Returns for the Assessment year 2015-16 to 2018-19 Ex.P22 : Chit Ledger Extract pertaining to the Chit transaction of the accused.
Witnesses examined on behalf of the accused:
DW1 : H.P. Mohan Kumar DW2 : T.L. Arun Kumar
Documents marked on behalf of the accused:
Nil XXVII A.C.M.M Bengaluru.36 C.C. No. 9343/2018
(Order typed vide separate sheet) ORDER The complaint filed by the complainant Chit company against the accused is allowed.
Acting U/s.255(2) of Cr.PC, the accused is convicted for the offence punishable U/s.138 of N.I. Act and sentenced him to pay fine of Rs.7,25,000/-. In default of payment of the said fine amount, the accused shall undergo simple imprisonment for a period of Six months.
Out of the said fine amount ordered to pay Rs.7,20,000/- to the complainant as compensation and the remaining amount of Rs.5,000/- shall go to the state.
(N.Muniraja) XXVII A.C.M.M., Bangalore.