Bangalore District Court
Bhoosiri Chits Pvt. Ltd vs Denzil Jose on 9 September, 2024
C.C.NO.10141/2023
0
KABC030171572023
Presented on : 26-04-2023
Registered on : 26-04-2023
Decided on : 09-09-2024
Duration : 1 years, 4 months, 13 days.
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED: THIS THE 09th DAY OF SEPTEMBER-2024
C.C.NO.10141/2023
Complainant: Bhoosiri Chits Private Limited,
Having its registered office at No.11,
1st Floor, Dattatreya Road, Near
National Co-operative Bank Limited,
Basavanagudi, Bengaluru-560004.
R/by its Managing Director,
B.Y.Thimmegowda,
Mobile No.9448535219.
(By Sri.R.Madhusudhana Reddy.,Adv.,)
V/s
Accused: Denzil Jost S/o. O.D.Joseph,
Age: 52 years, #H-12, Casa
Heights, Opposite AET College,
Doddakanahalli,
Bengaluru South - 560035.
Mobile No.9036162170.
(By Sri.Dilip Kumar.I.S & Associates.,)
C.C.NO.10141/2023
1
:JUDGMENT:
This case arises out of the private complaint filed by the complainant against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant company is involved in chit funds business. The accused is subscribe in two chits bearing reference No.BT/ST/17-6 and BT/ST/17-7. The face value of chits are Rs.30,00,000/- each. The accused successfully bid the above chits and received a sum of Rs.20,84,250/- for the 1st chit and Rs.21,49,500/- for the 2nd chit after deducting the service tax towards the successful bid. Further stated that the accused had paid chit premium for the above mentioned chits till the bidding of the chit. Subsequently, the accused has willfully and intentionally defaulter in payment of monthly chit installments. It is further stated that the complainant company informed the accused it is the obligation of the chit subscriber or guarantor on their behalf to pay the chit premium regularly but the accused failed to do the same thereby, the accused has became a chit defaulter. Further stated that the complainant approached the accused to clear the pending amount in the month of November 2022, then C.C.NO.10141/2023 2 the accused had issued the cheque No.000073 dated:
14.11.2022 for Rs.44,73,915/- drawn on Kotak Mahindra Bank, New Thippasandra Branch, Bangalore. The complainant presented the said cheque on 19.12.2022 for encashment through its banker viz., Karur Vysya Bank, Basavangudi branch, Bangalore.
But the said cheque was dishonored on 21.12.2022 with an endorsement "Funds Insufficient". Thereafter, on 13.01.2023 the complainant got issued a legal notice to the accused calling upon him to pay the cheque amount within 15 days from the date of receipt of the notice. The said notice was returned as insufficient address. Inspite of issuance of the notice, the accused neither reply to the notice nor paid the cheque amount to the complainant. 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 21.02.2023.
3. After the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 30.03.2023 to register the case in Register No.III and it was registered as a criminal case.
4.Thereafter, summons was issued to the accused and he appeared before the court through advocate and secured bail. He was furnished its C.C.NO.10141/2023 3 necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant in support of its case, have examined its Managing Director as PW.1 and got marked 27 documents at Ex.P.1 to 27 and closed its side.
6. After closer of the evidence of the complainant, the statement of the accused under section 313 of Cr.P.C., was recorded. He has denied the incriminating evidence appeared against him. The learned counsel for the accused has submitted no defence evidence. Hence, the defence evidence taken as nil.
7. I have heard the arguments on both the sides and perused the written argument submitted by the learned counsel for the accused and also perused the material placed on record.
8. The learned counsel for the complainant has relied upon the citations reported in (2009) 5 SCC 608, (2003) 2 SCC 349 and (1977) 1 SCC 431.
9. The learned counsel for the accused has relied upon the citations in Cri.A.No.767/2022 and 2012 AIR (SC) (Cri) 892.
C.C.NO.10141/2023 4
10. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1. Whether the complainant proves that the cheque-Ex.P.1 was issued by the accused towards discharge of a legally enforceable debt/liability?
2. Whether the complainant further proves that the complainant have complied with all the mandatory provisions of section 138 of N.I.Act?
3.Whether the complainant proves beyond reasonable doubt that the accused inspite of not having sufficient funds he had issued the cheque-Ex.P.1 and thereafter failed to repay the amount within stipulated period inspite of receipt of the notice-Ex.P.3 and thus have committed offence punishable under section 138 of N.I.Act?
4. What order?
11. My answers to the above points are as under:
Point No.1: In the Negative.
Point No.2: In the Negative.
Point No.3: In the Negative.
Point No.4:As per final order, for the following;
:REASONS:
12.POINT NO.1: The case of the complainant is that she was acquainted with the accused. The complainant company is a involved in chit fund business. The accused is subscribe in two chits bearing reference No.BT/ST/17-6 and BT/ST/17-7. The face C.C.NO.10141/2023 5 value of chits are Rs.30,00,000/- each. The accused successfully bid the above chits and received a sum of Rs.20,84,250/- for the 1st chit and Rs.21,49,500/- for the 2nd chit after deducting the service tax towards the successful bid. The accused had paid chit premium for the above mentioned chits till the bidding of the chit. Subsequently, the accused has willfully and intentionally defaulter in payment of monthly chit installments. Thereafter the complainant company informed the accused it is the obligation to pay the chit premium regularly but the accused failed to do the same and thereby, the accused has became a chit defaulter. The complainant approached the accused to clear the pending amount in the month of November 2022, the accused had issued the cheque in question in favour of the complainant. The complainant presented the said cheque for encashment through its banker. But the said cheque was dishonored with an endorsement "Funds Insufficient". Thereafter, the complainant got issued a legal notice to the accused calling upon him to pay the cheque amount within 15 days from the date of receipt of the notice. Inspite of issuance of the notice, the accused neither reply to the notice nor paid the cheque amount to the complainant. 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.10141/2023 6
13. I have perused the oral and documentary evidence on record. In support of the case, the complainant's have examined its Managing Director as P.W.1 and 27 documents were marked at Ex.P.1 to 27. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the cheque in question issued by the accused along with another signatory Anil Sharma in favour of the complainant dated: 14.11.2022 for Rs.44,73,915/-. Ex.P.1(a) is the signature of the accused. Ex.P.2 is the bank memo dated: 21.12.2022 informing the dishonor of the cheque as Funds Insufficient. Ex.P.3 is the office copy of legal notice dated:13.01.2023. Ex.P.4 is the postal receipt. Ex.P.5 the returned postal cover. Ex.P.5(a) is the returned notice. Ex.P.6 is the application Form for enrollment. Ex.P.7 is the chit agreement. Ex.P.8 is the voucher. Ex.P.9 is the cash receipt. Ex.P.10 is the party ledger. Ex.P.11 is the authorization/confirmation of correspondence of A/C. Ex.P.12 is the surety form. Ex.P.13 is the guarantee. Ex.P.14 is the On demand promissory note. Ex.P.15 is the agreement creating lien in favour of the foreman. Ex.P.16 is the application form for enrollment. Ex.P.17 is the chit agreement. Ex.P.18 is the voucher. Ex.19 is the cash receipt. Ex.P.20 is the authorization/ confirmation of correspondence of A/C. Ex.P.21 is the surety form. Ex.P.22 is the guarantee. Ex.P.23 is the On C.C.NO.10141/2023 7 demand promissory note. Ex.P.24 is the agreement creating lien in favour of the foreman. Ex.P.25 are the RTGS slips. Ex.P.26 is the board resolution. Ex.P.27 is the complaint.
14. 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 is a subscriber in two chits bearing No.BT/ST/17-6 and BT/ST/17-7. The face of the value of the chits are Rs.30,00,000/- each. Further argued that the accused successfully bid the said chits and received for Rs.20,84,250/- for the 1st chit and Rs.21,49,500/- for the 2nd chit after deducting the service tax towards the successful bid. Further argued that the accused has paid the chit premium till bidding of the chit. Subsequently, he willfully and intentionally defaulted in payment of monthly chit installments. Thereafter the complainant informed the accused to pay the chit premium regularly. But the accused failed to do the same and thereby he became a chit defaulter. It is further argued that after the repeated request made by the complainant, the accused has not paid any amount to the complainant. Thereafter, the complainant approached the accused to clear the pending amount C.C.NO.10141/2023 8 in the month of November 2022, the accused towards the discharge of the said payment, had issued the cheque-Ex.P.1. He further argued that the accused has not denied Ex.P.1 being his cheque drawn on his account and signature on the said cheque. 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 has failed to elicit anything in the cross examination of P.W.1 to disbelieve the case of the complainant. The defence have failed to rebut the presumption under section 139 N.I.Act. The counsel for the complainant further argued that the accused has failed to produce any believable evidence that he has not issued the cheque in favour of the complainant and also how the cheque reached the hands of the complainant and why he has not returned back the same is not clear. He further argued that the accused has failed to produce any oral or documentary evidence regarding repayment of amount to the complainant.
15. Further argued that to prove 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 has not disputed Ex.P.1 being his cheque drawn on the account of the accused. The said presumption is available to the complainant. Further he has argued that the C.C.NO.10141/2023 9 accused has failed to disprove the case of the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount 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 he is no due to the complainant. As such, very defence of the accused is not believable. He further argued that the complainant have examined its Managing Director as P.W.1 and he was fully cross examined by the accused, but nothing has been elicited in his the mouth. It is further argued that the accused not adduced oral as well as documentary evidence to prove his defence and further he has not produced any documents. The complainant proved its case on beyond reasonable doubt. It is further argued that the accused himself has signed and delivered the cheque in favour of the complainant on repayment of chit installments due. After dishonor of the cheque the complainant issued a legal notice to the accused, inspite of this the accused has not taken any legal action nor produced any documents before this court to disprove the same. It is further argued that the accused was a chit subscriber and he has singed the necessary documents as prescribed under the chit funds act as such for rebuttal, C.C.NO.10141/2023 10 the accused not produced any documentary evidence to disprove the case of the complainant. The complainant proved the case to in all the ingredients of section 138 of N.I.Act. Further the complainant proved that there was a legal due amount standing as on the date of the issuance of cheque and also the cheque was dishonored and the complainant has duly issued a legal notice to the accused. The accused only to escape the liability has taken false defence. Hence, he prays to convict the accused.
16. The learned counsel for the accused has argued that there was no any legally enforceable debt/liability to the complainant from the accused for which the cheque was issued. Further argued that the accused is not liable/due to pay any amount to the complainant as alleged in the complaint. It is further argued that the accused has not issued the alleged cheque in favour of the complainant to discharge any liability. The complainant is not entitled for any of the reliefs as sought in the complaint. It is further argued that the complainant has falsely stated in the complaint that the accused became a chit subscriber and he was a successful bidder and he had received prize amount from the complainant. It is further argued that the complainant has created a false story only for the purpose of this complaint and to harass the accused. It is further argued that the accused has not issued C.C.NO.10141/2023 11 cheque in question in favour of the complainant with an assurance that the said cheque would be honored on its presentation. It is further argued that the accused has not issued any cheque for payment of any due amount in favour of the complainant. The complainant has misused the cheque and presented the same through its banker and filed false case. It is further argued that no notice was issued to the accused and no notice was served on the accused as alleged in the complaint. The complainant intentionally send a legal notice to the wrong address of the accused.
17. The learned counsel for the accused has filed written argument. In his written argument he has reiterated the brief facts of the case. Further submits that the proviso (b) of section 138 of the N.I.Act states that notice must be given by the payee or the holder in due course, must be in writing, must be given within thirty days from the date of receipt of information of dishonor and must make a demand for payment of the amount of the cheque dishonored and it is very clear from proviso (b) to section 138 of the N.I.Act and that the notice has to be given to the drawer of the cheque and none-else, and thus required no interpretation. Further submits that at the present case the alleged cheque which is marked as Ex.P.1 is issued by a partnership concern i.e., "Denann Interior Solutions"
represented by its partners name Denzil Jose and Anil C.C.NO.10141/2023 12 Sharma and the said fact has not been disputed and even in cross examination the complainant has admitted that the alleged cheque belongs to "Denann Interior Solution" a partnership firm and signed by its partners and no notice were issued to the drawer of the cheque which clearly violates the primary condition to constitute an offence under section 138 of N.I.Act and that complaint is liable to be dismissed on this ground alone. Further the accused has never received the legal demand notice from the complainant and hence, the essential ingredients of the offence under section 138 of N.I.Act are not made out and legal demand notice was sent on the incorrect address and even as per the tracking reports the legal demand notice is undelivered for reason Insufficient Address, it has been admitted by the complainant during his cross examination that he know the correct address of the drawer of the cheque and he has not sent any notice to the said address and has admitted the fact that the complainant has never verified if the accused lives at the address mentioned in the legal demand notice or not the accused has categorically denied the receipt of the legal demand notice from the complainant in his statement U/s.313 Cr.P.C and that the addresses mentioned on the legal demand notice are his incomplete address and no proof has been furnished by the complainant for stating that the same are his C.C.NO.10141/2023 13 correct address and since the accused has not received the legal notice there is non comply of section 138 (b) of the N.I.Act. Further it is an established law that the legal presumption pertaining to the service of the legal demand notice is raised only if the same is sent at the correct address of the accused. If the legal demand notice is sent at the incorrect and incomplete address of the accused, then the service of legal demand notice is not deemed to be complete and the ingredients of offence under section 138 N.I.Act are not fulfilled.
18. It is further submits that the present complaint is bad in law as having not been drafted in terms of section 141 of the N.I.Act as the cheque in question has been issued by the partnership concern and not be the accused and the partnership concern has not been made party and this is a plea pertaining to a pure question of law, it has been categorically held in various judgment that when the company or partnership concern on whose account the cheque has been drawn, is not made an accused, then the complaint under section 138 of N.I.Act is liable to be quashed/dismissed. Further submits that it is an established law that in a case under section 138 N.I.Act, it is mandatory for the complainant to implead the drawer of the cheque. It is also an established law that when such drawer of the cheque is a juristic entity, C.C.NO.10141/2023 14 i.e., a company, a partnership firm or other association of individuals, then the same has to be arrayed as an accused separately in terms of section 138 N.I.Act and its directors are to be arrayed in terms of the provisions of section 141 N.I.Act. In the present matter, bare perusal of the cheque in question, Ex.P.1 reveal that the drawer of the cheque in question is "Denann Interior Solution" and the said partnership concern has not been made an accused and in view of established law and in view of the fact that the drawer of the cheque has not been made an accused in the present matter and also because the present complaint has not been drafted in terms of the provisions of section 141 N.I.Act, hence, the accused cannot be held liable in absence of prosecution of the drawer of the cheque. Further submits that it has successfully proved on the basis of law and the record of the case that the accused cannot be held liable for the offence under section 138 N.I.Act in respect of the dishonor of the cheque in question as the same has not been issued/drawn by him and the same has been issued/drawn by "Denann Interior Solution" who has not been made an accused in the present matter.
19. Further submits that in the present case the complainant has admitted during the course of his cross examination that the alleged cheque-Ex.P.1 is drawn and issued by "Denann Interior Solution" which C.C.NO.10141/2023 15 is partnership concern and represented by its partners and no notice was issued nor the drawer of the cheque has been made as the party to the case and that the accused cannot be held liable for the offence under section 138 of N.I.Act in respect of the dishonor the cheque in question as the same has not been issued/drawn by him and the same has been issued/drawn by "Denann Interior Solution", who has not been made an accused in the present matter. Even though the clear transactions were between "Denann Interior Solution" and the complaint as the complainant has admitted during the course of his cross examination that the chit amount is bid in the name of the company "Denann Interior Solution" and as per Ex.P.6 to 16 the agreement has been entered by the company "Denann Interior Solution" and the complainant company as per Ex.P.7 to 17 and not the accused. It is further submits that it is held in Dilip Hariramani V/s. Bank of Baroda: (2022 SCC SC 579) that in para 16 and 17 that "The provisions of section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub- section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of N.I.Act extends C.C.NO.10141/2023 16 vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of section 141 has been satisfied, which persons then, they deeming fiction, is made vicariously liable and punished, However, such vicarious liability arises only when the company or firm commits the offence as the primary offender. This view has been subsequently followed in Sharad Kumar Sanghi V/s Sangita Rane, Himanshu V/s B.Shivamurthy, and Hindustan Unilever Limited V/s. State of Madhya Pradesh.19 The exception carved out in Aneeta Hada (Supra), 20 which applies when there is a legal bar for prosecuting a company or a firm, is not felicitous for the present case. No such plea or assertion is made by the respondent. And "Given the discussion above, we allow the present appeal and set aside the appellant's conviction under section 138 read with section 141 of the N.I.Act. The impugned judgment of the High Court confirming the conviction and order of sentence passed by the Sessions Court, and the order of conviction passed by the judicial Magistrate first class are set aside. Bail bonds, if any, executed by the appellant shall be cancelled. The appellant is acquitted. However, there would be no order as to costs".
20. Further the Apex Court has held in the decision in Aneeta Hada V/s M/s. Godfather Travels and Tours Pvt.,Ltd., that in para 32 to 39, the dishonor C.C.NO.10141/2023 17 of the cheque issued by a company-criminal liability on account of dishonor of the cheque primarily falls on the drawee company and is extended to the officer of the company and as there is a specific provision extending the liability to the officers, the conditions incorporated in section 141 are to be satisfied. 2005(4)(RCR) (Criminal) 141: 2005 (3) Apex (Crl.)229, relied;
[Para No.33] H.Negotiable Instrument Act, 1881- Section 141 - Scope of section 141- dishonor of the cheque issued by a company - section 141 of act is concerned with the offences by the company - it makes the other person vicariously liable for commission of an offence on the part of the company - The Vicarious liability gets attracted with the condition precedent laid down in section 141 of the act stands satisfied - as the liability is penal in nature, a strict construction of the provision would be necessitous and in a way the warrant.
[Para 39] I. Negotiable Instrument Act, 1881, Section 141- Dishonor of the cheque issued by a company meaning of words, "as well as the company in section 141 explained-Held:-
(i). These make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof.
(ii). The company is a juristic person and it has its own respectability-if a finding is recorded against it, would create a concavity in its reputation there can be situation when the corporate reputation is affected when a director is indicated. Hence, he prays to acquit the accused.
C.C.NO.10141/2023 18
21. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he along with one Anil Sharma had issued the cheque-Ex.P.1 in favour of the complainant. Further it is not disputed that the cheque in question issued by the accused in the account of the Denann Interior Solutions in favour of the complainant. It is not disputed that the complainant is a private limited chit company and the accused is one of the partner of the Denann Interior Solutions and businessman. The accused and Anil Sharma had issued the cheque in favour of the complainant. Whereas, the accused has contended that there is no due to the complainant and the complainant not made the Anil Sharma and partnership firm as an accused in this case. The accused has specifically denied having debt/liability had issued the cheque-Ex.P.1 on 14.11.2022. He contends that the blank cheque as was misused by the complainant and false complaint was filed against the accused.
22. In the proceedings for dishonor of cheque under section 139 of N.I.Act a presumption can be raised that when a cheque is issued, it was drawn for discharge of legally enforceable debt/liability. The presumption under section 139 of the act does include the existence of legally enforceable debt/liability. This is C.C.NO.10141/2023 19 in the nature of a rebuttable presumption and it is opened to the accused to raise a defence wherein the existence of a legally enforceable debt/liability can be contested. However, there is initial presumption which favours the complainant. The test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused cannot be excepted to discharge an unduly high standard of proof. In the absence of the compelling justifications, revers onus clauses usually impose an evidentiary burden and not a persuasive burden. It is settled position that when an accused has to rebut the presumption under section 139 of the Act, the standard of proof for doing so is that of preponderance of probabilities. Therefore, if the accused is able raise a probable defence which creates doubts about the existence of a legally enforceable debt/liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence on his own.
23. In the case on hand the very liability of the accused to pay an amount to the complainant is seriously disputed. The accused has contended that in the disputed cheque there is two authorized signatories. Further he has contended that the C.C.NO.10141/2023 20 complainant not made another signatory as an accused. Further the complainant have misused the cheque and filed this false case against the present accused only. He denies any amount being due by him. He also denies issuance of the cheque for repayment of the amount on 14.11.2022.
24. To prove the factum of the case the complainant produced oral evidence of PW.1 alone and produced Ex.P.1 to 27 only. The facts of the case of the complainant is that the alleging dishonor of cheque was dishonored for the reasons funds insufficient. Thereafter the complainant got issued a legal notice to the accused. Inspite of issuance of the legal notice, the accused neither reply to the notice nor paid the cheque amount. On perusal of the documents it reveals that the alleged cheque had two authorized signatories i.e., the present accused and one Anil Sharma, but the complainant made only Denzil Jose an accused in the complaint and not made another signatory as an accused. The contention of the complainant's is that the accused signed the cheque as an authorized signatory and the cheque was dishonored due to insufficient fund. The contentions of the accused's that the complainant failed to prove the accused's liability and the other authorized signatory i.e., Anil Sharma was not joined as a co-accused. Hence, the complaint only against the present accused in not maintainable.
C.C.NO.10141/2023 21
25. After considering the evidence and arguments on both the sides, this court finds that the complainant failed to prove the accused liability for the dishonored cheque. Further the another authorized signatory i.e., Anil Sharma was not made a joined as a co-accused. The complainant case was incomplete. Further this court finds that non-joinder of necessary parties, incomplete cause of action and failure to prove the liability against the accused. The entire proceeding initiated against the present accused are vitiated since admittedly even according to the complaint and documents the authorized signatories/partners of Denann Interior Solutions issued the cheque which is alleged to have been dishonored. Despite the legal requirement of arraying the other signatory of the cheque as an accused, the complaint and proceedings had initiated only against the present accused, who is one of the partner of the Denann Interior Solutions is not maintainable. If the person committing an offence under section 138 of N.I.Act, every person who, at the time of offence was committed, was signatory of the cheque and was responsible to the liability would have to be arrayed as an accused and more importantly, the other partner/authorized signatory i.e., Anil Sharma is also deemed to be guilt of the offence and it is therefore clear that the said Anil Sharma would also have to be arrayed as an accused and in the absence C.C.NO.10141/2023 22 of arraying the Anil Sharma as an accused, the entire proceedings would stand vitiated. In this case, admittedly the complainant is not arrayed the other signatory of the cheque i.e., Anil Sharma as an accused and the proceedings have been initiated only against the present accused i.e., one of the signatory of the alleged cheque, which would be contrary to the requirement of Section 138 of N.I.Act. Hence, the proceedings cannot be sustained against the present accused only.
26. The complainant's have examined its Managing Director as PW.1. In his evidence has repeated the contentions taken by the complainant in the complaint. In all 27 documents are produced at Ex.P.1 to 27. The accused has denied issuance of the cheque-Ex.P.1 in favour of the complainant for discharge any legally enforceable debt/due. Therefore, it is necessary to discuss the evidence regarding the due amount by the accused to the complainant and the said amount still due from the accused. Since the complainant claims that the accused in order to repayment of debt/due had issued the cheque-Ex.P.1 on 14.11.2022 in favour of the complainant, he is firstly required to produce evidence in this regard. But as above discussed no material is placed on record to established the said facts by producing the documents.
C.C.NO.10141/2023 23
27. On perusal of the documents at the present case it reveals that the alleged cheque which is marked as Ex.P.1 is issued by a partnership concerned i.e., Denann Interior Solutions represented by its partners namely Denzil Jose and Anil Sharma and the said fact has not been disputed by the complainant and even in the cross examination of PW.1 has specifically admitted that the alleged cheque belongs to Denann Interior Solutions and signed by its partners and no notice were issued to the drawer of the cheque. Further it is an established law that in a case under section 138 of N.I.Act, it is mandatory for the complainant to implead the drawer of the cheque. In the present case, on bare perusal of the cheque in question would reveals that drawer of the cheque in question is Denann Interior Solution and the said partners have signed the cheque and the said another partner is not made an accused. Hence, the present accused cannot be held liable for the offence under section 138 of N.I.Act in respect of the dishonor cheque in question as the same has not been signed by the present accused only and the complainant has not been made another authorized signatory of the cheque as an accused. Further the complainant have failed to produce any documents regarding the present accused is only responsible for the debt and also the cheque being issued for the amount due by the accused has not been C.C.NO.10141/2023 24 established. Though there is an initial presumption under section 139 of N.I.Act, if the accused from the cross examination raise some reasonable doubt, the said presumption can be held to have been rebutted.
28. In proceedings under section 138 of N.I.Act the standard of proof required by the accused to rebut the presumption is not so high. It is sufficient, if the accused by way of preponderance of probabilities creates doubt regarding very existence legally enforceable debt or liability. The learned counsel for the accused has submitted that when the cheque is issued for uncertain liabilities and the complainant not made the drawer of the cheque for an offence under section 138 of N.I.Act, is not attracted.
29. The accused if reasonably produces evidence to probables his defence, it is sufficient to discharge presumption. Then the burden is on the complainant to produce probables evidence. But in the case on hand as already above discussed except producing some documents and his oral evidence no material is produced by the complainant to prove the issuance of the cheque in order to discharge of liability by the present accused only. While on the other hand the accused has show that the cheque was not given to the complainant for repayment of the due and the complainant not made the another authorized signatory of the cheque as an accused.
C.C.NO.10141/2023 25
30. In the judgment reported in 2011 ALL MR (Crl) 1922, in the case of "Bhalla Automobiles V/s Rajesh S/o Rambhau Maurya", the Hon'ble court has discussed that the complainant has to take all grounds available to him at the filing of the complaint and he cannot be permitted to change his stand at different times. In such circumstances the accused is entitled for benefit of doubt.
31. In the case of Krishna Janardhana Bhat V/s Dattatreya Hegde, reported in AIR 2008 SC 1325, the Hon'ble Apex Court held that the accused not required to step into witnesses box, he may discharge his burden on the basis of materials already bought on record. He can rely on the materials already on record. It was further observed that the standard of proof to prove the defence is preponderance of probabilities. Thus from the above discussion and placing reliance on the judgments noted above this court is of the opinion that the accused has succeeded in rebutting the initial presumption available to the complainant under section 139 of N.I.Act. When there is no other material produced by the complainant to support its contention for repayment of amount the present accused only had issued the cheque-Ex.P.1, he has failed to prove the material ingredients of legally enforceable debt. Question whether statutory C.C.NO.10141/2023 26 presumption rebutted or not, must be determined in view of other evidence on record.
32. If the accused succeeds in rebutting the presumption, the onus of proving the existence of legally enforceable debt for which the cheque was issued will be on the complainant. But in the case on hand the complainant's have failed to produce any evidence in order to prove that the cheque-Ex.P.1 was issued for discharge of legally enforceable debt by the present accused only. Whereas the accused has succeeded, in rebutting the initial presumption available in favour of the complainant. In the said circumstances the defence has succeeded in discharging his burden of rebutting the said presumption. Thus from the above discussion and placing reliance on the judgment noted above this court is of the opinion that the accused has succeeded in rebutting the presumption available to the complainant under section 139 of N.I.Act. When there is no other material produced by the complainant to support of their contention, he has failed to prove the material ingredients of existence of legally enforceable debt by the present accused only. The discussion supra manifest that the version of defence is a probable one and worth acceptable. Thus by raising a probable defence the accused successfully rebutted the legal presumption raised in favour of the complainant and thereby shifted the anus of proof to the complainant to C.C.NO.10141/2023 27 demonstrate the existence of legally recoverable debt as claimed, but in the instant case the complainant utterly failed to discharge the shifted onus. In this background, I answer point No.1 in the Negative.
33. POINT NO.2: According to the complainant the cheque-Ex.P.1 when it was presented the bank for encashment same was dishonored for the reasons "Funds Insufficient" in the account of the accused. To prove this fact the complainant's have produced the cheque-Ex.P.1, the bank memo-Ex.P.2 and also notice- Ex.P.3. On perusal of the bank memo-Ex.P.2 it is disclosed that the cheque-Ex.P.1 was dishonored for the reasons "Funds Insufficient" in the account of the drawer namely the accused. These facts are also stated in the legal notice-Ex.P.3 and the oral evidence of PW.1. The accused has not seriously disputed the dishonor of the cheque for the reasons "Funds Insufficient". What has been disputed is the fact that the cheque-Ex.P.1 was not issued by the accused for discharge of any legally enforceable debt/liability. On perusal of the documents clearly shows that the accused and another signatory Anil Sharma had issued the cheque in question in favour of the complainant. Therefore, from the evidence of PW.1 and the documents placed on record, the fact that the cheque- Ex.P.1 came to be dishonored for the reasons "Funds Insufficient" has been proved by the complainant.
C.C.NO.10141/2023 28
34. In order to attract the offence under section 138 of N.I.Act a cheque has to be issued by the accused which was drawn on an account maintained by him for discharge, in whole or in part of any debt or other liability. Further it is required that the said cheque when presented by the complainant was returned unpaid by the bank for any of the reasons enumerated in section 138 of N.I.Act. Thereafter the accused had failed to repay the cheque amount inspite of having received a notice demanding such payment within a period of 15 days on receipt of the legal notice. In the present case it is the case of the complainant that the cheque-Ex.P.1 was issued to them on 14.11.2022 for clearance of the due amount. The said cheque was presented on 19.12.2022 to the Karur Vysya Bank Ltd., Basavangudi branch, Bangalore for encashment. Thereafter, the complainant have received the bank memo as per Ex.P.2 on 21.12.2022 informing them that the cheque was dishonored for the reasons that there was "Funds insufficient" of the accused/drawer. Thereafter within statutory period of receipt the said information the complainant has got issued the legal notice as per Ex.P.3 calling upon the accused to make payment of the cheque amount. The said notice is shown to have been returned as delivered, enquiry and insufficient address as per Ex.P.5.
C.C.NO.10141/2023 29
35. The accused has seriously denied the service of notice. However, he does not dispute the address shown on the notice. The requirement of section 138 of N.I.Act is that notice has to be sent to the last known address of the accused. In the case on hand admittedly the notice is sent to the said address furnished by the accused. In the present case the first essential requirement of the existence of legally enforceable debt or liability to the complainant by the accused has not been proved. Hence, the complainant have failed to comply the required mandatory provision of section 138 of N.I.Act. The basic requirement is not established. Accordingly, I answer Point No.2 in the Negative.
36. POINT NO.3: In view of the findings of this court, the essential requirements to attract the offence of section 138 of N.I.Act has not been proved by the complainant and also as there is no sufficient evidence to hold the accused liable for any offence in the present case. Hence, I answer point No.3 in the Negative.
37. POINT NO.4: The complainant has been held to have failed to prove the very transaction with the accused and issuance of the cheque by the present accused only. Hence, the accused is found to be not guilty of the offence charged. In the said circumstances, the accused cannot be directed to pay C.C.NO.10141/2023 30 any compensation. In view of the above discussion, I proceed to pass the following:
:ORDER:
Acting under section 255(1) of Cr.P.C., the accused is acquitted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 09th day of September 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.09.11 12:24:54 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.B.Y.Thimmegowda. List of documents marked on behalf of the complainant:
Ex.P.1 : Cheque.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Office copy of the legal notice.
Ex.P.4 : Postal receipt.
Ex.P.5 : Returned postal cover.
C.C.NO.10141/2023
31
Ex.P.5(a) : Returned legal notice.
Ex.P.6 : Application form for enrollment.
Ex.P.7 : Chit agreement.
Ex.P.8 : Voucher.
Ex.P.9 : Cash receipt.
Ex.P.10 : Party ledger.
Ex.P.11 : Authorization/Confirmation of
Correspondent of A/C.
Ex.P.12 : Surety form.
Ex.P.13 : Guarantee.
Ex.P.14 : Ondemand promissory note.
Ex.P.15 : Agreement creating lien in favour of the
foreman.
Ex.P.16 : Application form for enrollment.
Ex.P.17 : Chit agreement.
Ex.P.18 : Voucher.
Ex.P.19 : Cash receipt.
Ex.P.20 : Authorization/Confirmation of Correspondence
of A/C.
Ex.P.21 : Surety form.
Ex.P.22 : Guarantee.
Ex.P.23 : Ondemand promissory note.
Ex.P.24 : Agreement creating lien in favour of the
foreman.
Ex.P.25 : RTGS slips.
Ex.P.26 : Board resolution.
Ex.P.27 : Complaint.
List of witnesses examined on behalf of the accused:
-Nil-.
List of documents marked on behalf of the accused:
-Nil-.Digitally signed by SOUBHAGYA B
SOUBHAGYA BHUSHER B BHUSHER Date:
2024.09.11 12:25:03 +0530 XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.10141/2023 32 09.09.2024 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(1) of Cr.P.C., the accused is acquitted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.