Bangalore District Court
Durga Project Inc vs B.G.Narayanareddy on 9 August, 2024
1
C.C.NO.9213/2009
KABC030094712009
Presented on : 02-05-2009
Registered on : 02-05-2009
Decided on : 09-08-2024
Duration : 15 years, 3 months, 7 days
IN THE COURT OF THE XXII ADDL.CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
PRESENT : SRI.JAI SHANKAR.J,
B.A.L., LL.B
XXII ADDL.C.M.M., BENGALURU.
DATED: THIS THE 9TH DAY OF AUGUST 2024
JUDGMENT UNDER SECTION 355 OF CODE OF
CRIMINAL PROCEDURE
C.C.NO. : 9213/2009
COMPLAINANT : M/s. Durga Projects Inc.
A registered Partnership Firm,
At No.703, 10th 'A' Main Road,
4th Block, Jayanagar,
Bangalore - 560 011.
2
C.C.NO.9213/2009
Rept by its Managing Partner,
Sri. Niraj Jhunjhunwala
(By Sri. Ravi A. Belagatti., Adv.,)
V/s.
ACCUSED : Sri. B.G. Narayana Reddy,
S/o. Late Sri. Gurumurthy Reddy,
Aged about years,
No.59, 3rd Cross, 8th B Main Road,
4th 'C' Block, Koramangala,
Bangalore - 560 034.
And also at :
At No.300/2,
Bellandur Main Road,
Bangalore - 560 037.
(By Sri. H.Pavana Chandra Shetty., Adv.,)
Offence complained : U/s.138 of N.I.Act
of
Plea of the Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 09.08.2024
3
C.C.NO.9213/2009
JUDGMENT
The complainant firm has filed this complaint U/s. 200 of Cr. P C R/w sec. 138 of N.I.Act against the accused alleging that, he has committed an offence punishable U/s.138 of N.I.Act.
The brief facts of the present case are as under:-
2. It is contended that, the accused towards the discharge of legal liability, has issued the cheque bearing No.561587, dt:31.05.2008 for Rs.9 lakhs drawn on Syndicate Bank, Koramangala- J Block, Bengaluru - 34, assuring that, on presentation it would be honoured.
Believing the representation made by the accused, when the complainant firm rept, by its partner Niraj Jhunjhunwala presented the cheque through its banker Kotak Mahindra Bank Ltd., Jayanagar Branch, Bengaluru, it dishonoured with shara as "Funds Insufficient' by vide memo 4 C.C.NO.9213/2009 dt:26.11.2008. Immediately, the legal notice dt: 29.11.2008 is being issued to the accused, but the notice sent to the address bearing No.300/2, is being returned with shara as "No such person", but the notice issued to the another address bearing No. 59, has being returned with shara as "addressee refused" dt:02.12.2008. The UCP is not being returned. Thereby, contending that, though the accused is aware of the dishonour of the cheque and the issuance of the notice, he has intentionally avoided the payment of the cheque, the present complaint.
3. After filing of the complaint, my predecessor has taken cognizance of the offence punishable U/s.138 of N.I.Act. Sworn statement of the complainant is being recorded. Being satisfied that, there are primafacie materials to proceed against accused, summons is issued. After appearance of the accused, he is being enlarged on 5 C.C.NO.9213/2009 bail and plea is recorded. The accused has pleaded not guilty and claimed for the trial.
4. From the basis of the pleading, the following points that arise for my consideration are as follows:-
1. Whether the complainant proves that, the accused issued cheque bearing No. 561587 dt: 31.05.2008 for Rs.9 lakhs drawn on Syndicate Bank, Koramangala J Block, Bengaluru - 34, towards discharge of his liability which was returned unpaid on presentation for the reason "Funds Insufficient" and despite of the knowledge, he has not paid the said cheque amount and thereby, committed an offence punishable U/s.138 of N.I.Act?
2. What order?
5. In support of the complainant case, Sri. Niraj Jhunjhunwala as a partner of the complainant firm has entered into the witness box as PW.1 by filing his affidavit evidence and got marked Ex.P.1 to P.12 documents. At this 6 C.C.NO.9213/2009 stage, it is relevant to note that, the certified copy of the partnership deed dt: 24.01.2005 is being marked as Ex.P.12 as per the deposition dt:23.10.2013, but again by oversight the agreement dt: 27.01.2005 is also being marked at Ex.P.12 as per the deposition dt:25.11.2013. On the completion of the complainant evidence, the statement of the accused as required U/s. 313 of Cr.P.C. is being recorded and read over to the accused, wherein he has denied the incriminating evidence appeared against him. The accused is also being examined as DW.1 by filing his affidavit evidence, but no exhibits are being marked in support of his case. At this juncture, it is also relevant to note that, initially the accused is being acquitted by this court vide judgment dt:
11.04.2014 observing that, as there was a clause of arbitration in the agreement dt:27.01.2005, the present complaint is not being maintainable. The complainant being 7 C.C.NO.9213/2009 aggrieved by the acquittal judgment has preferred an appeal before the Hon'ble High Court in Crl.Appeal No. 433/2014 wherein the Hon'ble High Court has allowed the appeal by setting aside the judgment of this court by opining that, there is no bar to maintain the present complaint U/s. 138 of N.I. Act and has remanded for disposal of the same in accordance with law. In pursuance of the remand, both the parties with their respective counsels have appeared and the PW.1 was subjected for further cross examination.
6. Heard, arguments from both side.
7. The complainant counsel has relied upon the Judgment of Hon'ble Apex Court in Crl.Appeal No. 1020/2010 (arising out of SLP (Crl) No.407/2006, Rangappa Vs.Mohan,
2. Crl.Appeal No. 230-231/2019 (Arising out of SlP(Crl.) Nos. 9334-35 of 2018) - Birsingh Vs. Mukesh Kumar, 8 C.C.NO.9213/2009
3. CRA No. 488/1998 - Joseph Jose Vs. J. Baby and Ors. Passed by the Hon'ble High Court of Kerala,
4. Crl. Appeal No.3126/2023 ( Arising out of Special Leave Petition (Crl) No. 12802/2022) - Rajesh Jain Vs. Ajay Singh
5. Crl. Appeal No. 1233-1235 of 2022 ( Arising out of SLP (Crl.) Nos. 7430-7432/2022 (Arising out of Dairy No.13470/2019 - P. Rasiya Vs. Abdul Nazer and Ors., The defence counsel has also relied upon the following decisions : -
1. AIR 2024 SC 2105 - M/s. Rajco Steel Enterprises Vs. Kavita Saraff
2. 2024 ( 2) KCCR 1488 - - B.A. Abubakkar Saheb Vs. D.K. and udupi Dist. Fish Marketing Federation Ltd., Mangalore
3. 2024 (2) KCCR 1571 - C.M.Mallikarjunappa Vs. B.G. Sharanappa 9 C.C.NO.9213/2009
4. 2024 (2) KCCR 1131 - Khaleel Khan.P Vs. Shankarappa
5. Crl.A 868/2008 - P.B. Jayaprakash Rai Vs. Samson Tevence All these decisions are dealt on the point of burden of proof, presumption, rebuttable presumption, consequences of not replying the demand notice and the authority to file complaint and to depose on it.
8. Perused the materials available on record.
9. My answer to the aforesaid points are as under:-
Point No.1 :- In the Affirmative Point No.2 :- As per the final order, for the following:-
REASONS
10. Point No.1:- The complainant firm rept, by its partner Niraj Jhunjhunwala has filed the present complaint alleging that, the accused has committed an offence 10 C.C.NO.9213/2009 punishable U/s.138 of N.I.Act. He pleads and asserts that, the accused in discharge of his liability has issued cheque bearing No.561587, dt:31.05.2008 for Rs.9 lakhs drawn on Syndicate Bank, Koramangala J Block, Bengaluru - 34 which is being dishonoured for want of sufficient funds and inspite of he issuing the demand notice through RPAD and UCP, the accused has not chosen to comply the demand and thereby, putting forth the said cause of action, the present complaint.
11. To substantiate his case, he has stepped into the witness box as PW.1 and got produced almost 13 documents as Ex.P.1 to P.12. As said above, the certified copy of the partnership deed dt: 24.01.2005 is being marked as Ex.P.12 as per the deposition dt: 23.10.2013, but again by oversight the agreement dt: 27.01.2005 is also being marked at Ex.P.12 as per the deposition dt: 11
C.C.NO.9213/2009 25.11.2013 and by exhibiting these documents, the complainant contends that, he has discharged his initial burden so as to draw the presumption available under the law and sought for the conviction of the accused.
12. In this scenario, the documents placed by the complainant is scrutinized, the PW.1 in order to examine the compliance of statutory requirements as envisaged U/s. 138 of NI Act, he got produced the Ex.P.1 the cheque dt:31.05.2008. The said cheque is returned with an endorsement as "Funds Insufficient" dt:26.11.2008 as per Ex.P.2. The Ex.P.3 is the office copy of the legal notice dt:29.11.2008, Ex.P.5 is the UCP, Ex.P.6 & 7 are the postal receipts and Ex.P.8 to 10 are the returned RPAD covers dt:01.12.2008 and 02.12.2008 respectively. The present complaint is being filed on 03.01.2009. 12
C.C.NO.9213/2009
13. A careful scrutiny of the documents relied by the PW.1 goes to show that, a statutory requirement of Sec.138 of NI Act is being complied with and this complaint is filed well in time. The PW.1 has discharged his initial burden by examining and by producing the documents as referred above. Thus, PW.1 is entitled to rely on the statutory presumptions enshrined U/s.118 R/w. Sec. 138 of N.I.Act.
Sec. 118 of the Act reads as thus, that every Negotiable Instrument was made or drawn for consideration and that, every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
Further Sec.139 of Negotiable Instrument Act provides for presumption infavour of PA holder. It reads like this, it shall be presumed, unless the contrary is proved, that, the holder of a cheque received the cheque, of the nature referred 13 C.C.NO.9213/2009 to in Sec. 138, for the discharge, in whole or in part, or any debt or any other liability.
14. A combined reading of the referred sections raises a presumption infavour of the holder of the cheque that, he/she has received the same for discharge in whole or in part of any debt or other liability. No doubt, the said presumption of law are rebuttable in nature, the accused can take probable defense in the scale of preponderance of probabilities to rebut the presumption available to the complainant. It is need less to say that, the evidence of the complainant can be rebutted even by effectively cross- examining the witness, rather entering the witness box.
15. So here, it is relevant to note that, whether the accused by cross examining the PW.1 has really rebutted the presumption available under the law which requires due consideration. As said above, initially the accused was 14 C.C.NO.9213/2009 being acquitted by this court vide judgment dt: 11.04.2014 observing that, as there was a clause of arbitration in the agreement dt:27.01.2005, the present complaint is not maintainable. The complainant being aggrieved by the acquittal judgment has preferred an appeal before the Hon'ble High Court in Crl.Appeal No. 433/2014 wherein the Hon'ble High Court has allowed the appeal by setting aside the judgment of this court by observing that, there is no bar to maintain the present complaint U/s. 138 of N.I. Act and has remanded for disposal of the same in accordance with law. To put it in other word, the Hon'ble High Court has remanded the matter for disposal of the same in accordance with law and there is no specific order of denova proceeding. Therefore, the evidence available on record, ie., the evidence adduced earlier to the remand and 15 C.C.NO.9213/2009 the evidence adduced thereafter, is required to be considered.
16. In this back ground, if the rival claims of the parties are taken into considerations, the complainant claims that, the accused with two others by name B.G.Seenappa and B.G.Babu Reddy being the absolute owner of Sy.no.56, Devarabisanahalli Village, Varthur Hobli, Bengaluru East Taluk, measuring 43,923 sq. ft, had entered into a registered joint development agreement dt; 27.01.2005 with its firm and in pursuance of the said agreement, the complainant firm had made payment of Rs.9 lakhs ie., Rs.50,000/- by way of a cash on 24.05.2004, Rs.4,50,000/- through cheque bearing No.12369 dt:
24.05.2004 drawn on UTI Bank, Patna Branch, Rs.,2,50,000/- through cheque bearing No. 12455 dt; 23.10.2024 drawn on UTI Bank Patna branch and 16 C.C.NO.9213/2009 Rs.1,50,000/- by way of a cash on 23.10.2004 to the accused. The project was completed and the amount referred above being paid as security was required to be refunded by the accused and accordingly, he has issued the disputed cheque which is being dishonoured for want of sufficient funds. Thereby claiming that, as the accused was bounded to honour the cheque, has intentionally kept his account with insufficient funds has cheated it and thereby, claims that, he is to be penalized. On the other hand, the accused defended his case by contending that, the complainant firm has not disclosed its case in a clear facts, as to how the disputed cheque has come into its possession, no cause of action, the PW.1 has no authority to file the complaint or to depose as he has not produced the partnership deed or the resolution and as per Ex.P.12 the agreement dt; 27.01.2005, there is a clause which says 17 C.C.NO.9213/2009 that, in case of any dispute between the parties, they have to get appointed the arbitrator and the matter is to be referred to the arbitrator as per the act and thereby, contending that, the complainant firm has not complied the mandatory provision of issuing the demand notice, has sought for acquittal.
17. So by taking into consideration of the rival claims of the parties, it would not be wrong to say that, the accused has questioned the very maintainability of the complaint claiming that, no cause of action is being disclosed to file the complaint and that, the complainant has nowhere disclosed as to how the disputed cheque has come into his possession. Here, it would also not be wrong to say that, the deep root for filing the present complaint has arosen through the agreement dt: 27.01.2005. Though, the accused has questioned the very filing of the complaint 18 C.C.NO.9213/2009 through Niraj Jhunjhunwala as a partner of M/s. Durga Project Inc. the complainant firm, but he admits the fact of he entering with an agreement with one Sri. Navneet Jhunjhunwala for developing the residential plot. So, here though the accused denied the fact of he entering into the above referred agreement with the PW.1, but he never disputes the fact of he entering into an agreement with Navneet Jhunjhunwala. So, here the PW.1 has to establish that, he is also one of the partner and he has every authority to initiate the present complaint.
18. Here, the PW.1 has filed the present complain claiming that, he is the partner of M/s. Durga Projects Inc. a registered partnership firm. He has got produced the Ex.P.12 the certified copy of the partnership deed dt:
24.01.2005. On perusal of this document, it goes to indicate that, the PW.1 Niraj Jhunjhunwala with Manidevi 19 C.C.NO.9213/2009 Jhunjhunwala, Navrathan Jhunjhunwala and Navneet Jhunjhunwala are the partners of the complainant firm. It also goes to indicate that, each of the partners are having a right of net profits and losses at the rate of 25% and this partnership firm has come into existence from 24.01.2005.
This document also indicates that, it is unregistered document and it is being notarized before the Notary called Dilipkumar Basu, Kolkata. Here, it cannot be denied that, the Ex.P.12 the partnership deed is an unregistered document. Whether, the very defect of the firm not being registered would be a fatal to the case which requires due consideration. Because here, the complainant firm is not seeking any civil remedy by filing the present complaint. If, the complainant firm would have filed a civil suit for recovery of the money, then certainly the case of the accused could have been appreciated so far the 20 C.C.NO.9213/2009 maintainability of the complaint is concerned. But, here, the complainant is seeking a penal provision so as to initiate some action against the accused for allegedly issuing a cheque which is begin dishonoured. So, I do not find any force in the argument, so far the claim of the accused that, the firm is not registered and I do not find any ground that, this defence would go to the root of the case. In other words, I am of the considered view that, the present case is very well maintainable as the present complaint is filed invoking Sec.138 of N.I.Act and the question of the stamp duty or the registration as the case may be would noway defeat such type of complaints. So, in this back ground holding that, the present complaint is very well maintainable, it suffices that, the PW.1 being one of the managing partner of the complainant firm is having every right and liberty to file a complaint and also, to depose on behalf of the firm. 21
C.C.NO.9213/2009 Here, the PW.1 has not stepped into a witness box as an employee or the authorized signatory of the complainant firm, but he is being entered into the witness box as one of the partner of the firm. He has filed the complaint and has also deposed as a partner of the firm on his behalf and also, on behalf of the partnership firm. Perhaps, the PW.1 has also got produced the Ex.P.4 the resolution said to be passed by the partners of the firm. No doubt, on perusal of the Ex.P.4, it would not indicate that, it is the resolution said to be passed by the firm, but a careful perusal would go to indicate that, it is an authorization letter which would suffice that, the PW.1 is being permitted to proceed with the case. So, here the argument of the defence that, the PW.1 has no authority to file the complaint and also, to adduce evidence appears to hold no force. No doubt, the Judgment passed by the Hon'ble High Court of Karnataka in Crl. 22
C.C.NO.9213/2009 Appeal no.1780/2006, dt:05.06.2007, Director, Maruthi Feeds and farms Pvt. Ltd., Vs. Basanna Pattekar., which would indicate that, if the complaint is filed by the company, the company should authorize a person under the articles of association or by separate resolution to depose on behalf of the company, but with due respect the said decision is not applicable to the case in hand. Either the present complaint is filed by the director or by the company. When, the PW.1 claims that, he is one of the managing partner of the complainant firm, I do not find any force in the argument of the defence with regard to the right of the PW.1 in filing the present complaint.
19. The defence has also harped much upon the cause of action and also, the complainant having not disclosed as to how the disputed cheque at Ex.P.1 had come into the possession of the complainant firm. As said above, though 23 C.C.NO.9213/2009 the accused do deny the agreement at Ex.P.12 being entered with the PW.1, but he admits that, he had entered the agreement with Sri. Navneet Jhunjhunwala. As said above, the Ex.P.12 the agreement dt: 27.01.2005 is the base cause for filing the present complaint. As said, it is not under dispute that, Navneet Jhunjhunwala is also one of the partner of the complainant firm and also the accused, nowhere denies the due execution of Ex.P.12. It is an admitted fact that, the accused along with one Seenappa and Babu Reddy being the owner of the property bearing Sy.No.56 of Devarabisanahalli Village, have entered into an agreement at Ex.P.12, wherein the complainant firm has undertaken to construct a residential/ commercial complex in the said property at its own expenses and it is being agreed that, the accused along with the above referred two persons would be delivered with 37.5% of total saleable 24 C.C.NO.9213/2009 constructed super built up area along with 37.5% terrace rights, private garden area and covered area parking space. Likewise, the complainant firm share is being fixed at 62.5% ie., balance of total saleable constructed super build up area along with 62.5% car parking space , terrace rights and private garden areas with proportionate undivided share. Here, this document would also go to indicate that, the complainant firm has deposited Rs.27 Lakhs as a refundable security deposit which shall be refunded after the completion of the construction and after delivering the accused share with two others without expecting any interest. The Ex.P.12 would also indicate that, the accused is being deposited with Rs.9 lakhs ie., Rs.50,000/- by way of a cash on 24.05.2004, Rs.4,50,000/- through cheque bearing No.12369 dt: 24.05.2004 drawn on UTI Bank, Patna Branch, Rs.,2,50,000/- through cheque bearing No. 25 C.C.NO.9213/2009 12455 dt; 23.10.2024 drawn on UTI Bank Patna branch and Rs.1,50,000/- by way of a cash on 23.10.2004. Though, the accused do deny the receipt of these amounts, but to establish the said fact, either he has chosen to produce the un-encashed cheques as referred therein or he chosen to produce his bank statement of the particular year so as to hold that, the said cheques are not being encashed. When, the PW.1 has specifically pleaded and deposed about the fact of he depositing Rs.9 Lakhs to the accused as a refundable amount and when the accused has specifically denied the receipt of the said amount, it was incumbent upon him to establish the said defence which admittedly not forthcoming. Perhaps, the Ex.P.12 agreement dt; 27.01.2005 is an registered document. When, the document is being duly registered, it has to be construed that, the contents referred therein is being agreed and 26 C.C.NO.9213/2009 admitted by the party and then, he had signed it. Infact, the accused has categorically admitted his signature appearing in the said document. When, this document suffices that, the complainant firm had entered into a agreement with the accused and two others, it also suffices that, the complainant firm has deposited Rs.9 Lakhs with the accused and on the completion of the project, it was duty bound of the accused to return back the said refundable amount without any interest. Though, many questions were posed with regard to the complainant firm not completing the project within a time and so also, the BBMP not issuing the completion certificate, but while perusing the cross examination of DW.1, nowhere he denies the fact of the complainant firm completing the project, but he contends that, there are some cracks in the floor and and the doors are not working proper. Except, this defect, it 27 C.C.NO.9213/2009 appears there is no other complaints by the defence. Infact, there is a clause in the agreement at Ex.P.12 at No. 13 that, in case if there is a failure to complete the project in time, the accused shall have every right to give a notice by terminating the agreement and in such event, the accused shall refund the entire refundable security deposit and so also, if the complainant firm fails to deliver the owners share in time, the complainant firm was liable to pay Rs.85,000/- for each month delay as pre-liquidated damages. When, this clause suffices that, if there was a delay, the accused had every opportunity to terminate the agreement or to claim RS.85,000/- p.m. which admittedly is a conditional clause. For a moment, if it is construed that, the complainant firm has not completed the project in time and failed to hand over the possession as agreed therein, nothing had prevented the accused to make the above 28 C.C.NO.9213/2009 referred efforts which admittedly not forthcoming. In other words, it could be inferred that, the complainant firm has completed the project and has delivered the owner share as per Ex.P.12. Absolutely, there is no evidence placed on record by the defence to hold that, the complainant firm has breached the terms and conditions of the agreement at Ex.P.12, but rather, the evidence available on record suffices that, the complainant firm has performed its part of contract which cannot be brushed aside. No doubt, there is a clause in Ex.P.12 at clause no. 27 which says that, in case any dispute that would arose between the parties in respect of the said agreement, the dispute shall be referred to the arbitration as per the act, but it is also an admitted fact that, the complainant firm has filed the present complaint seeking the penal provision and it has not filed the present complaint seeking civil remedy. When, the law 29 C.C.NO.9213/2009 permits a party to initiate a parallel proceeding ie, one in civil and another one in criminal, certainly there is no impediment for the complainant firm to initiate the present complaint invoking U/s. 138 of N.I.Act. Merely the complainant firm not opting the arbitration proceeding would not preclude the complainant firm to initiate the present complaint. The Hon'ble Apex court in (2005) 10 SCC 626 - Gurucharan Singh and another Vs., Allied Motors Ltd., and another, (2009) 1 SCC 69 Sri. Krishna Agencies Vs. State of Andra Pradesh and another., and (1999) 8 SCC 686 - Trisuns Chemial Industry Vs. Rajesh Agarwal and others. Wherein the Hon'ble Apex Court has clearly held that, there is no bar to initiate a civil proceeding and also, criminal proceeding under sec. 138 of N.I.Act.
20. It is also relevant to note that, the present case being remanded by the Hon'ble High Court on the very same 30 C.C.NO.9213/2009 ground and therefore, even the defence raised by the accused that, the dispute ought to be referred to the arbitration and the present complaint is not maintainable cannot be appreciated. So, it suffices that, when there is a clear recitals that, on completion of the project the accused is required to return back the refund amount, it was his duty to return back the amount and the said amount is the disputed cheque amount which the complainant claims. When, the complainant has narrated the issuance of the cheque is towards the refund of the security amount and on the said cheque being dishonoured for want of sufficient funds which is being intimated through the demand notice, this is the cause of action which the complainant had relied to file the present complaint. When, the accused is aware of the entire transaction and the disputed cheque is being dishonoured for the reason referred above, this facts are 31 C.C.NO.9213/2009 sufficient to be brought to the knowledge of the accused which is being brought by the complainant firm which cannot be brushed aside. No doubt, the complaint averments would not disclose the narration of Ex.P.12, but the complainant firm has categorically indicated that, the disputed cheque is being issued towards the discharge of legally enforceable debt and in furtherance of the said narration, the PW.1 has also clearly narrated about the due execution of Ex.P.12 in his affidavit evidence which is being effectively and elaborately cross examined by the defence. So, therefore it cannot be said that, there is no cause of action to file the present complaint and so also, the present complaint is not maintainable in pursuance of the arbitration clause.
21. It is undisputed fact that, the disputed cheque at Ex.P.1 belongs to the accused and so also, the signature 32 C.C.NO.9213/2009 appearing therein. Here, nowhere the accused has specifically deposed as to how the disputed cheque has come into the possession of the complainant firm. Even, there is no evidence to that regard. When, the PW.1 has categorically deposed the fact of the accused issuing the disputed cheque towards the refund of the security amount under Ex.P.12 and the said evidence being not rebutted by the accused placing probable evidence, I am of the considered view that, the PW.1 has established his case to draw presumption that, the disputed cheque is being issued by the accused was only towards the discharge of the legally enforceable liability.
22. The Ex.P.3 is the demand notice issued by the complainant intimating the dishonour of the disputed cheque and calling upon the accused to discharge the legal liability under it. Ex.P.5 is the UCP, Ex.P.6 & 7 are the 33 C.C.NO.9213/2009 postal receipts and Ex.P.8 to 10 are the unserved RPAD covers. Though, the Ex.P.8 & 9 would indicate the non service of notice with shara as no such person, but the Ex.P.10 would go to indicate that, the notice is being returned with shara as "refused" by the addressee. This is the address which is also referred in the cause title of the complaint. Nowhere, the complaint would deny the address referred therein as incorrect, but the very address referred in his affidavit evidence would indicate that, the address referred therein is the address referred in the cause title. So, therefore it could be inferred that, the complainant firm has complied the mandatory provision of issuing the demand notice. Even the defence has not chosen to challenge the shara appearing in Ex.P.10. Perhaps, the very same address is also referred in UCP at Ex.P.5. When, the accused do not dispute the address referred therein, it has to be inferred 34 C.C.NO.9213/2009 that, the UCP is served on the accused. In the decision reported in 2019 SCC OnLine Kar.2117- V.R.Shresti Vs., Bhaskar.P., wherein the Hon'ble High court has opined that, if really the accused had no transaction with the complainant, he would have given reply to the notice and not replying the same would go to establish that, the defence made is false and the court should draw the presumption against the accused for not replying the legal notice. The decision aptly applies to the case in hand. Not replying the notice at the initial stage would hold no water so far the defence case is concerned and in this background, the case of the complainant has to be accepted by drawing presumption.
23. In the decision reported in (2021) 5 SCC 283 - Kalamani Tex and Another., Vs. P.Balasubramanian, (2010) 11 SCC 441- Rangappa Vs. Sri.Mohan., wherein 35 C.C.NO.9213/2009 it is held that, when once the signature of an accused on the cheque is established, than the reverse onus clauses become operative, also aptly applies to the case in hand. When the PW.1 has established the accused having issued the cheque at Ex.P.1 towards the discharge of legal liability and their existed a legally enforceable debt, the onus to disprove it, shifts on the accused which is not been proved by placing positive evidence. In this background, having the accused not disputed the complainant's case by placing positive evidence, I am of the considered view that, the cheque issued by the accused at Ex.P1 is for the legally enforceable debt and this fact is being established by the PW.1 by placing cogent and positive evidence which is not rebutted by the other side. When this fact is established, it has to be presumed that, the accused has issued the disputed cheque towards the discharge of legally 36 C.C.NO.9213/2009 enforceable debt. When the provisions U/s.118 and 139 of N.I. Act is looked into, it raises the presumption in favour of the holder of the cheque that, he has received the same for discharge in whole or in part of any debt or other liability.
24. It is worth to note that, Sec.106 of Indian Evidence Act postulates that, the burden is on the accused to establish the fact which is especially within its knowledge. This provision is exception to the general rule that, the burden of proof is always on the prosecution to establish its case beyond all reasonable doubt. In that view of matter, the burden is on the accused to prove that, the cheque in question was not issued for discharge of any liability. The principles enumerated in the decisions relied by the accused cannot be denied, but with due respect, the said decisions are not applicable to the case in hand. The 37 C.C.NO.9213/2009 principles enumerated in the decisions relied by the accused cannot be denied, but with due respect, the said decisions are not applicable to the case in hand.
25. From the discussion made supra, it could be said that, the PW.1 established its case by placing positive evidence. On the other hand, the accused failed to to establish his defence by placing probable defence and also, failed to elicit the said fact from the mouth of the PW.1. To put it in other way, the accused though taken a probable defence, but it is not been established by placing the positive evidence. The presumption of law lies in favour of the complainant firm as envisaged U/s.118 R/w. Sec. 139 of N.I.Act. In this back ground, the case of the PW.1 requires to be accepted. The evidence placed on record establishes that, the PW.1 has proved that, for discharge of the liability, the accused has issued Ex.P.1 cheque and it 38 C.C.NO.9213/2009 is being dishonored for want of sufficient funds. This evidence suffices the complainant firm has established its case and accordingly, Point No.1 is answered in the "Affirmative'.
26. Point No.2:- For the reasons discussed in the point No.1, the complainant firm has proved the guilt of the accused punishable U/s.138 of N.I.Act. The Hon'ble Apex Court also dealt in the decision reported in (2018) 1 SCC 560, M/s. Meters and Instrument Pvt. Ltd., Vs. Kanchana Mehta., wherein It is held that "the object of provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged, but is not debarred at the later stage subject to appropriate compensation has may be found acceptable to the parties or the court". By considering the decisions, it 39 C.C.NO.9213/2009 could be said that, the time when the transaction has taken place and the primary object of the provision being kept in mind, I am of the considered view that rather imposing punitive sentence, if sentence of fine is imposed with a direction to compensate the complainant for its monetary loss by awarding compensation U/s.357 of Cr.P.C., it would meet the ends of justice. By considering these aspects, I am of the considered view that, it would be just and proper to impose fine of Rs.9,10,000/-. Out of the compensation of Rs.9,10,000/-, an amount of Rs.9,00,000/- shall be awarded to the complainant U/s.357 of Cr.P.C. Accordingly I proceed to pass the following :
ORDER Acting under section 255(2) of Code of Criminal Procedure, the accused is convicted for the offence punishable under section 138 of the Negotiable Instruments Act, the accused is 40 C.C.NO.9213/2009 sentenced to pay fine of Rs.9,10,000/- (Rupees Nine Lakhs and Ten Thousand only).
In default thereof, the accused shall undergo simple imprisonment for the term of one year.
Acting U/s.357(1)(b) of Cr.P.C., it is ordered that, Rs.9,00,000/- (Rupees Nine Lakhs only), there from shall be paid to the complainant's firm as compensation. The remaining fine amount of Rs.10,000/- (Rupees Ten Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
The office is to furnish the free copy of this Judgment to the accused forthwith.
(Directly dictated to stenographer on computer, typed by her, revised by me and then pronounced by me in the open court on this the 9 th day of August 2024). JAI Digitally signed by JAI SHANKAR J SHANKAR Date: 2024.08.09 J 16:26:19 +0530 (JAI SHANKAR.J) XXII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of witnesses examined on behalf of complainant:-
PW.1 : Sri. Niraj Jhunjhunwala
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List of exhibits marked on behalf of complainant:-
Ex.P1 : Original cheque Ex.P1(a) : Signature of the accused Ex.P2 : Bank Memo Ex.P3 : Legal notice Ex.P4 : Resolution Ex.P5 to P7 : Postal receipts Ex.P8 to P10 : Returned RPAD Covers Ex.P11 : complaint Ex.P.12 : Agreement & partnership Deed Ex.P.12(a) to (q) : Signature of accused
List of witnesses examined on behalf of the accused:-
DW.1 : B.G. Narayanareddy List of exhibits marked on behalf of the accused:-
- Nil-Digitally signed
JAI by JAI SHANKAR
SHANKAR J
Date: 2024.08.09
J 16:26:13 +0530
(JAI SHANKAR.J)
XXII Addl. Chief Metropolitan
Magistrate, Bengaluru.
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C.C.NO.9213/2009