Bangalore District Court
Investors And Realtors Private vs In Favour Of The Complainant Were Not ... on 12 April, 2022
1 CC NO.3445/2019
SCCH-26
KABC020160092019
BEFORE THE COURT OF XXIV ADDITIONAL SMALL CAUSES JUDGE AND
THE MOTOR ACCIDENT CLAIMS TRIBUNAL & A.C.M.M. (SCCH26)
AT BENGALURU
DATED THIS THE 12th DAY OF APRIL 2022
PRESENT: SRI.R.MAHESHA. B.A.,L, LLB.,
XXIV ADDL. SCJ &
ACMM & MEMBER MACT
BENGALURU.
1. Sl. No. of the Case CC.No.3445 of 2019
2. The date of 25042019
commencement of
evidence
3. The date of closing 08022022
evidence
4. Name of the M/s Sachin Khimji Nuvo
Complainant Investors and Realtors Private
limited
A company registered under
the Indian companies Act
1956, having its registered
office at Binny cresent
apartments, 16A Block D,
Benson cross road, Bangalore
560 046
Represented by its Director
Mr.Sachin Khimji
2 CC NO.3445/2019
SCCH-26
(By Sri.A.K.Advocate)
5. Name of the Accused Mr.Guruprasad R
R/a No.1855,
5th A main road,
Vijayanagar 2nd stage,
Bangalore560040.
(By Sri.P.H.Advocate)
6. The offence U/s.138 of the Negotiable
complained of Instruments Act
7. Opinion of the judge Accused found guilty
JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
That the complainant is a private limited company located in Bangalore and is primarily associated in the real estate sector. That the accused is the founder director of V3 engineers private limited which is a furniture solutions company based in Bangalore. That the complainant had extended financial assistance to the company and invested in the company in convertible preference 3 CC NO.3445/2019 SCCH-26 shares which were subsequently converted into equity shares of the company and complainant is holding 29,32,308/ equity shares of Rs.10/ amounting to 30% of the paid up capital of the company. That the accused along with the other promotor directors of the company are holding 70% of the paid up capital of the company, one of the conditions of the financial assistance extended by the complainant was that the promoter directors will enable the exit of the complainant form the company with the agreed return on investment and therefore the complainant was desirous of existing by disposing its entire equity shares in the company proportionately in favour of the accused and other promoter directors as agreed by the accused and the other promoter directors of the company. That the complainant entered into a shareholders agreement dated 2332018 (SHA) along with the accused and other promoter directors of the company to dispose off its shareholding in the company on the agreed terms and conditions as incorporated int eh said SHA. That the accused along with the other promoter directors of the company had agreed to purchase the entire shareholding of the complainant in proportion to their shareholding in the company to provide the agreed exit to the complainant. That as per the SHA, the accused had issued post dated cheques dated 342018 in favour of the complainant for his share of the total sale consideration to be paid to the 4 CC NO.3445/2019 SCCH-26 complainant and deposited the same with an escrow agent as agreed between the parties. That in terms of the said addendum, the promoter directors of the company including the accused had issued fresh undated cheques in favour of the complainant and deposited the cheques with the escrow agent. That after discussing with the accused, all the cheques were dated 11102018 and other two directors of the company instructed the complainant to present all the cheques on 29102018. That the complainant presented the cheques with his banker, but the same has been returned with endorsement Funds Insufficient. That the complainant agreed and both the accused and complainant entered into a settlement agreement dt.10122018 that the accused would settle his portion of the entire liability amounting to Rs.2,70,00,000/ within a period of one year from the date of execution of the agreement. That as per the terms of the said agreement, the accused had agreed to pay Rs.60 lakhs on 3132019 and had also issued post dated cheque bearing No.14378 dt.3132019 of Rs.60 lakhs drawn on ICIC Bank, Vyalikaval branch. That the accused failed to make the payment of the said amount within the time specified. That the complainant issued legal notice dt.1052019 to the accused, but the accused failed to make the payment of the cheque amount to the complainant. Hence filed this complaint.5 CC NO.3445/2019
SCCH-26
3. After filing of this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded. Thereafter cognizance was taken and registered in Crl.Reg.No.III and summons issued to the accused. In response of summons, accused appeared through his counsel and got enlarged him on bail. The plea was recorded, read over and explained to the accused he pleaded not guilty and claims to be tried. Hence the case is posted for complainant evidence.
4. In order to establish his case, Sachin B. KhimjiDirector of the complainant company himself examined as PW1 and got marked 14 documents as ExP1 to 7. Guruprasad R got examined as DW1 and got marked ExD1 to 12.
5. Heard oral arguments from complainant counsel. The counsel for accused has filed detailed written arguments along some decisions of higher courts. The complainant counsel placed reliance on below decisions:
1. Boopesh Rathod Vs Dayashankar Prasad Chaurasia and others AIR 2021 SC 5726 (DB)
2. Modi Cements Ltd., Vs Kuchilkumar Nandi 1998 (3) SCC 249
3. K.N.Beena Vs Muniyappan and others 2001 (8) SCC 458
4. Jayam company Vs T.Ravichandran 2003 CR.L.J. 2890 6 CC NO.3445/2019 SCCH-26
5. Rangappa Vs Mohan 2010 (11) SCC 441
6. Kalamani Tex and another Vs P.Balasubramaniyan 2021 (5) SCC 283
7.Triyambak S.Hegde Vs Sripad 2021 SCC online SC 788
8. Lakshmi Dychem Vs State of Gujarath and others 2012(3) SCC 375
9. Birsingh Vs Mukesh Kumar 2019 (4) SCC 197
10. Ripudaman Singh Vs Balakrishna 2019 (4) SCC 767
11. T.R.Srinivasaiah Vs Chikkamagalur District cooperative Central Bank Ltd., (Criminal Revision No.109/2017)
12. Sri.Dhaneshwari Traders Vs Sanjay Jain and another 2019 (16) SCC 83
6. On the other hand, the counsel for accused placed his reliance on below decisions :
1. 2007(2) Bankman 306 Bombay High courtAshok Bampto pagui Vs Agencia real canacona pvt., Ltd., and others
2. 2009 (3) KLJ 253 Govindaram Chanani Vs Latha and another
3. 2010 Cr.L.J. 1061 Hon'ble Karnataka High court Venkatesh Bhat A. Vs Rohidas Shenoy
4. 2012 (2) AIR Karnataka 649 Hon'ble Karnataka High court T.T.Naveen Kumar Vs T.Somegowda 7 CC NO.3445/2019 SCCH-26
7. Upon perusal of the material placed on record, the following points arise for my consideration: POINTS
1. Whether the complainant proves that the accused had issued cheques in question in discharge of the legally recoverable debt as contended by him?
2. Whether complainant proves that the accused has committed the offence punishable under Sec.138 of NI Act?
3. Whether the complainant is entitled for the relief as prayed in the complaint?
4. What order?
8. My answer to the above points is as follows : Point No.1 to 3 :In the Affirmative Point No.4 : As per final order for the following : REASONS
9. POINT NO.1 to 3 : Since these points are interlinked and to avoid repetition they are taken together for common discussion. Before peeping the disputed facts it is appropriate to refer the undisputed facts, which can be gathered from the material placed before this court. On going through the rival contention of the parties, oral and documentary evidence, it is clear that the 8 CC NO.3445/2019 SCCH-26 complainant company is a registered private limited company and accused is the founder director of V3 engineers pvt., Ltd., company. The complainant company primarily associated in the real estate sector. The accused company furniture solutions company based in Bangalore. The complainant company represented by its director Mr.Sachin Khimji. The complainant had invested in the company in convertible preference shares which were subsequently converted into equity shares of the company and complainant was holding Rs.29,32,308/ equity shares of Rs.10/ amounting to 30% of paidup capital of the company. Accused along with other promotor director of the company were holding 70% of the paidup capital of the company. The complainant wanted to exit from the company and was desirous of disposing his entire equity share in the company in favour of the accused and other promoters. The complainant entered into a share holders agreement dt.2332018 along with the accused and other promotor directors of the company to dispose of his share holding in the company. Accused and other promotor directors of the company had agreed to purchase the share holding of the complainant in proportion to share holding of the company. As per the share holders agreement, accused has issued post dated cheques dt.342018 in favour of complainant for his share of the total sale consideration to the escrow agent as agreed between the parties. Due to various 9 CC NO.3445/2019 SCCH-26 reasons the transaction could not be completed and cheques issued by the accused in favour of the complainant were not deposited. All the cheques issued by the accused and other promoter director of the company had expired an addendum to the share holders agreement was entered between the complainant and promoter directors of the company dt.2762018. Accused, accused wife and complainant had entered into settlement agreement dt.10122018 and accused agreed to settle his portion of the entire liability amounting to Rs.2,70,00,000/ from the date of execution of the agreement. As per the terms accused agreed to pay sum of Rs.60 lakhs by 3132019 and issued disputed cheque bearing No.14378 dt.3132019 for a sum of Rs.60 lakhs for repayment of amount. On presentation of the disputed cheque to the complainant bank for payment, its got dishonoured for the reason Funds Insufficient on 952019. the complainant immediately caused legal notice dt.1052019 and calling upon the accused to pay disputed cheque amount to the complainant within 15 days from the receipt of the statutory notice. The said legal notice duly served on accused,despite issuing the statutory notice to the accused, the accused failed to make the payment of the cheque amount to the complainant within 15 days nor as he issued a reply to the notice sent by the complainant. The accused sent reply notice dt.28112019 to the complainant when this court issued NBW against 10 CC NO.3445/2019 SCCH-26 accused and again accused sent reply notice dt.10122019 to the complainant. The complainant replied to the reply notice to accused on 12122019. The cheque in question belongs to accused and bear signature is also belongs to accused.
10. With above admitted facts, now the facts in issue are analyzed, as already stated the accused has denied the entire case of the complainant company as to commission of the offence punishable under section 138 of NI Act. While recording his plea for the said offence and also accused has denied the incriminating circumstance found in the evidence of the complainant. At the time of recording of his statement under section 313 of Cr.P.C., The accused mainly denied the claim of complainant company, on going through the cross examination of PW1, it is clear that in addition to the total denial of the case of the complainant company, the accused has specifically contended that he know the complainant and his company. He did a interior project for his house (Sachin Khimji), hence he came to contact to the accused. The complainant company was purchased 30% of equity shares worth about around Rs.30 lakhs in accused company i.e., V3 engineers private limited company. The accused company i.e., V3 engineers private limited company has paid dividend to Sachin Khimji as a share holders. In the year 20152016 onwards V3 engineers private 11 CC NO.3445/2019 SCCH-26 limited company had suffered financial losses and lot of pressure from financial institution, statutory authorities due to loss and financial problems. Therefore V 3 engineers private limited company decided to dispose company assets which is stood in the name of company. V3 engineers pvt., Ltc., company is a registered company, it has its registered office near Nelamangala. Thereafter V3 engineers company identified some buyers and they wanted special resolution from all the share holders from the company. Then Sachin Khimji has insisted to buy the shares at a higher value, he did not cooperate for pass special resolution until to done share purchase agreement and collected cheques. Sachin Khimji advocate had prepared share purchase agreement. V3 engineers pvt., Ltd., company and other directors signed on share purchase agreement, shares pertaining to V3 engineers still stands in the name of Sachin Khimji. The directors of V3 engineers company did not purchase back shares from Sachin Khimji. V3 engineers company got loss the accused wanted to do separate business. Sachin Khimji also came as partners to separate business of present accused. The accused started separate partnership firm by name Neoalchemi Build India LLP. Accused and Sachin Khimji had advanced Rs.30 lakhs as working capital for the new business. The accused had been cleared entire Rs.30 lakhs in the month of July 2021 to Sachin Khimji and Sachin Khimji decided to 12 CC NO.3445/2019 SCCH-26 discontinue in new business as a partner in the year 2019 of February Sanchin Khimji had been retired in the year February 2019. After the accused made partner his own wife to his business. The Sachin Khimji again retaining the share purchase agreement term, he made another agreement as per ExP1 and collected cheques by complainant. The accused came to know about this case after received summons by this Hon'ble court and accused upheld through his counsel, later he requested Sachin Khimji through in writing by way of RPAD for return of his cheques. The complainant did not received first notice issued by accused. Again accused had sent another notice, then complainant received. Complainant did not replied or return accused original cheque, later complainant sent reply through his Email. The accused had no any liability towards Sachin Khimji. Therefore, on the above objections the accused seeking the present complaint is not maintainable and liable to be dismissed in limine.
11. It is needless to say that the proceeding under section 138 of NI Act is an exception to the general principle that the accused is presumed to be innocent until the guilty is proved beyond all reasonable doubt. In the proceedings initiated under section 138 of NI Act, proof beyond all reasonable doubt is subjected to presumption envisaged under section 139 of NI Act. Once the requirement of Sec.138 of NI Act is fulfilled, then it has to be presumed that the 13 CC NO.3445/2019 SCCH-26 cheque was issued for discharge of the legally recoverable debt or liability. The presumption envisaged under Sec.139 of NI Act is mandatory in nature and it has to be raised in all the cases on fulfillment of the requirements of Sec.138 of NI Act. In the ruling rendered by Hon'ble Apex Court in the case of Rangappa V/s Mohan reported in AIR 2010 SC (1898) by relying on several rulings rendered by the Hon'ble Apex Court including the case of Krishnajanardhana Bhat V/s Dattareya G. Hegde reported in AIR 2008 SC (1325) it was held that "existence of legally recoverable debt or liability is a matter of presumption under section 139 of NI Act". The Hon'ble Apex Court disapproved the principle laid down in Krishnajanardhana Bhat case that "initial burden of proving existence of the liability lies upon the complainant". In the case of Sri.B.H.Lakshmi Naryana V/s Smt. Girijamma reported in 2010(4) KCCR 2637 it is held that "the presumption that the cheque was issued for legally recoverable debt is to be presumed". Further the Hon'ble Apex Court in Crl. Appeal No.803/2018 Krishna Rao V/s Shankare Gowda reported in 2018(7) SCJ 300 reiterated the above principle further as provided under Sec.118 it is to be presumed that the cheque in question was issued for consideration on the date found therein.
14 CC NO.3445/2019
SCCH-26
12. In the light of the rival contention of the parties at the outset it is to be determined as to whether the complainant had complied with all the requirements of Sec.138 of NI Act as contended. In order to prove the case of the complainant company while precognizance stage, one Sachin Khimji director of the complainant company examined before this court as PW1 and he produced ExP1 to 12 documents. After post cognizance stage, the evidence lead by PW1 treated as evidence of complainant. On the other hand the accused himself orally examined as DW1 and he produced ExD1 to 12. On perusal of complainant exhibits i.e., ExP1 to 12. ExP1settlement agreement dt.1012 2018 between complainant company and one Guruprasad and his wife Smt.Jayashree. ExP2cheque bearing No.014378 dt.3132019 which is issued by accused and payee name mentioned as M/s SachinKhimji Nuvo investors and realtors Pvt., Ltd., for a sum of Rs.60 lakhs. ExP3bank endorsement dt.95 2019. ExP2 returned for the reasons mentioned in ExP3 i.e., Funds Insufficient. ExP4legal notice dt.1052019 to accused upon the instruction of complainant company. ExP5postal receipt dt.1152019. ExP6postal acknowledgment, the notice sent by complainant company duly served on accused. ExP7postal track report. The notice issued by complainant company duly delivered on 1352019 to the accused. ExP8agreement dt.2952010 entered between M/s V3 15 CC NO.3445/2019 SCCH-26 Engineers pvt., Ltd., Bangalore Vs Sachin Bharath Khimji. ExP9Agreement dt.972010 between M/s V3 Engineers pvt., Ltd., vs Mr.Sachin Bharath Khimji. ExP10Email correspondence dt.1632018 at about 11.47 a.m. from one Smt.Jayashree Muraliadvocate for complainant and between one Sampath Raghavan. ExP11Email correspondence pertaining to draft agreement dt.28 112018 at about 5.30p.m. between One Jayashree Murali and R.Guruprasad. ExP12Email correspondence dt.2062018 at about 12.40p.m. between Guruprasad and Smt.Jayashree Murali. On the other hand accused himself orally examined as DW1 and produced 12 documents. ExD1 share purchase agreement dt.2332018 between Guruprasad, Sampath Raghavan N.Vasu and M/s Sachin Khimji Nova investors and realtors pvt., Ltd.,co., ExD2addedum to share purchase agreement dt.27062018 entered between Guruprasad, Sampath Raghavan N.Vasu and M/s Sachin Khimji Nova investors and realtors pvt., Ltd.,co.,ExD3LLP agreement entered between Neo alchemi build India LLP and M/s Sachin Khimji Nova investors and realtors pvt., Ltd.,co., and Guruprasad Ramachar. ExD4LLP agreement entered between Neo alchemi build India LLP and M/s Sachin Khimji Nova investors and realtors pvt., Ltd.,co., and Guruprasad Ramachar and Jayashree Guruprasad.ExD5notice dated 2811 2019 issued by Guruprasad and Smt.Jayashree to Sachin Khimji. ExD6postal 16 CC NO.3445/2019 SCCH-26 receipt d.30112019, ExD7unopened RPAD cover, ExD8legal notice dt.1012 2019 which is issued by Guruprasad and Smt.Jayashree to Sachin Khimji. ExD9 postal receipt dt.10122019. ExD10served postal acknowledgment. ExD11 reply notice to notice dt.10122019 from Sachin Khimji advocate by name Ashwin K on 12122019. ExD1265 B certificate.
13. On perusal of complainant oral and documentary evidence, it is clear that the complainant had presented the cheque for encashment within its validity, got issued statutory notice in time and presented the complaint within the prescribed period. So it is clear that complainant complied statutory requirements of presenting cheque, issuing notice and presenting complaint well in time.
14. In order to prove the case of complainant company, director of M/s Sachin Khimji Nova investors and realtors pvt., Ltd.,co., examined as PW1 and he produced ExP1 to 12 and he subjected cross examination by accused. During course of cross examination PW1 has stated that his company doing investment. The complainant company had two directors, they are Sachin Khimji and his wife Muditha Khimji. The complainant company board of directors called meeting for purchase of shares in the year 2018. PW1 denied the suggestion of accused that he had no authority to file complaint against this accused. PW1 17 CC NO.3445/2019 SCCH-26 contended during course of cross examination that he being director of company had authority to file this complaint against accused. Further PW1 admitted during course of cross examination that he did not called meeting of board of directors and no resolution passed before filing this complaint against accused. Further PW1 deposed that the present accused knew since 2008, the accused company i.e., V3 engineers company had 3 directors, he purchased preferential shares of V3 engineers company in the year 2010 or 2011. He purchased said preferential shares by paying Rs.11 crores from V3 engineers company and he contended he had eligibility to get income from V3 engineers company for his investment made in V3 engineers company. But he unable to explain before court how much amount i.e., income received from V3 engineers company. Though accused counsel suggested the PW1 that PW1 had received Rs.5,90,00,000/ from accused, but he expressed as he had no remember. Further PW1 admitted that he had transaction with V3 engineers company. He had not transact with accused in individual capacity. Further PW1 admitted that he was director of 8 to 10 companies and he admitted that he personally lookafter all the companies accounts and further he deposed that he regularly paying all the companies IT returns to IT department. The said IT documents were with possession of his Chartered Accountant. The PW1 was not sure from which company amount he 18 CC NO.3445/2019 SCCH-26 paid amount to V3 engineers company. Further PW1 deposed that he had written document i.e., share purchase agreement for show before this court, he purchased preferential shares of V3 engineers company. The said share purchase agreement prepared by his advocate i.e., one Jayashree Murali. Further PW1 clearly and categorically admitted that the said Jayashree Murali appointed as Escrow agent and the directors of V3 engineers company i.e., N.Vasu, Guruprasad, Sampath Raghavan cheques and shares of V3 engineers company were handed over to the possession of Escrow. Further PW1 admitted that still shares stood in the name of complainant company. Further PW1 stated during cross examination that if any company hold 30% of share the said company director should attend all meetings i.e., general body meeting, special meeting. The present complainant company had hold 30% of preferential shares of V3 engineers company in his name. The present complainant use to always attend all the meeting which is called from V3 engineers company. But present PW1 unable to express the details of meeting, the number of directors attending details etc., Further PW1 stated during course of cross examination that at the time of investing his company amount in V3 engineers company, the V3 engineers company economic status was good. Further PW1 denied the suggestions of accused that as per share purchase agreement Article 2 (2).1 the 19 CC NO.3445/2019 SCCH-26 V3 engineers company economic status was in bad and V3 engineers company in financial crises. Further PW1 admitted that he did not escrow agent for returning of share certificate to PW1. Further PW1 stated that there is a mutual discussion between PW1 and directors of V3 engineers company regarding purchase of share certificate. Therefore he agreed to purchase share certificate of V3 engineers company. Further he stated that the V3 engineers company had immovable property at Boodhihal village, Nelamangala Taluk, but he did not know actual extent of said immovable property. The V3 engineers company find purchasers to sell their immovable property in the year 20172018 due to V3 engineers company faced financial loss. Further PW1 clearly and categorically admitted that to sell assets of V3 engineers company, the consent of PW1 was necessary. The V3 engineers company called meeting for to get consent of PW1 for selling their assets to 3rd parties and he denied the suggestion of accused that unless they executed share purchase agreement in favour of complainant, he did not sign/not gave consent to sell assets of V3 engineers company. Further PW1 denied the suggestion of accused that due to financial constrainment by directors of V3 engineers company, they executed share purchase agreement in favour of PW1. Further PW1 contending that both parties mutually talks together and then they entered share purchase agreement, there is no force from the side of 20 CC NO.3445/2019 SCCH-26 complainant to sign on share purchase agreement. Further PW1 admitted that he did not took any legal action till date against escrow for keeping share purchase agreement with possession of escrow agent. Further PW1 clearly admitted that the cheque in question handed over from escrow agent to the possession of Pw1. PW1 denied the suggestion of accused that there is no liability from V3 engineers company and accused towards complainant company. Further PW1 denied the suggestion of accused that he did not know who were witnesses to the document share purchase agreement and further stated that share purchase agreement handed over to PW1 by accused and his wife by signing witness. Therefore he did not aware about witness of ExP1. Further PW 1 clearly and categorically admitted that he did not aware about whether the signature on ExP1 taken on blank paper or typed document. Further PW1 clearly admitted that he signed on ExP1 in the office of Smt.Jayashree. The said share purchase agreement prepared by Smt.Jayashree. He did not seen who were signed on ExP1. Further PW1 stated during course of cross examination that the cheque in question had accused person has not handover to complainant. But he stated he did not remember. Further it is elicited during course of cross examination that the present accused gave 7 cheques to complainant, out of 7 cheques, he presented only cheque in question for encashment, remaining 6 21 CC NO.3445/2019 SCCH-26 cheques still with the possession of escrow agent. Further PW1 contending that cheque in question filledup by accused and then handed over to PW1. Further PW1 admitted that the legal notice sent by advocate Smt.Jayashree and escrow agent also advocate for complainant Smt.Jayashree. Further PW1 clearly and categorically denied formal suggestions of accused.
15. It is well settled principle of law through catena of decisions that though the statutory presumptions available under Sec.118 and 139 of NI Act are mandatory in nature, they are the rebuttal one. It is needless to say that when the complainant proves the requirement of Sec.138 of NI Act the onus of proof shifts and lies on the shoulder of the accused to rebut the presumptions available in favour of the complainant. It is the accused who has to rebut the presumptions with all preponderance of probability with clear, cogent and convincing evidence though not beyond all reasonable doubt. The accused has to make out probable defence by producing convincing acceptable evidence and thereafter only burden shifts on the shoulder of the complainant. It is also settled law that to rebut the presumption, the accused can also rely upon presumptions available under the Evidence Act. It is also set in rest that in order to rebut the presumption it is not imperative on the part of the accused to step into the witness box and he may discharge his burden on the basis of the Acts elicited in the crossexamination of 22 CC NO.3445/2019 SCCH-26 the complainant. It is also equally true that, if the accused places such evidence so as to disbelieve the case of the complainant, then the presumptions stand rebutted. This view is also supported with the decisions of the Hon'ble Apex Court reported in 2006(3) SCC (CRL) 30 Tamilnadu Marcantile Bank Limited V/s M/s Subbaiah Gas Agency and others. ILR 2009 (2) 1633 Kumar Exports V/s Sharma Carpets, AIR 2008 SCC 1325 Krishnajanardhana V/s Dattareya G. Hegde, 2013 SCR (SAR) CRI 373 Vijay V/s Lakshman & another and AIR 2010 SC 1898 Rangappa V/s Mohan and Crl. Appeal No.230 & 231/2019 Bir Singh V/s Mukesh Kumar. Now the question that would arise is whether the accused has rebutted the statutory presumptions available in favour of the complaint.
16. In order to disprove the case of complainant company and prove his defence the accused orally examined before this court as DW1 and he specifically deposed before this court that he know the complainant and his company. He did a interior project for his house (Sachin Khimji), hence he came to contact to the accused. The complainant company was purchased 30% of equity shares worth about around Rs.30 lakhs in accused company i.e., V3 engineers private limited company. The accused company i.e., V3 engineers private limited company has paid dividend to Sachin Khimji as a share holders. 23 CC NO.3445/2019
SCCH-26 In the year 20152016 onwards V3 engineers private limited company had suffered financial losses and lot of pressure from financial institution, statutory authorities due to loss and financial problems. Therefore V 3 engineers private limited company decided to dispose company assets which is stood in the name of company. V3 engineers pvt., Ltc., company is a registered company, it has its registered office near Nelamangala. Thereafter V3 engineers company identified some buyers and they wanted special resolution from all the share holders from the company. Then Sachin Khimji has insisted to buy the shares at a higher value, he did not cooperate for pass special resolution until to done share purchase agreement and collected cheques. Sachin Khimji advocate had prepared share purchase agreement. V3 engineers pvt., Ltd., company and other directors signed on share purchase agreement, shares pertaining to V3 engineers still stands in the name of Sachin Khimji. The directors of V3 engineers company did not purchase back shares from Sachin Khimji. V3 engineers company got loss the accused wanted to do separate business. Sachin Khimji also came as partners to separate business of present accused. The accused started separate partnership firm by name Neoalchemi Build India LLP. Accused and Sachin Khimji had advanced Rs.30 lakhs as working capital for the new business. The accused had been cleared entire Rs.30 lakhs in the month of July 2021 to Sachin Khimji and 24 CC NO.3445/2019 SCCH-26 Sachin Khimji decided to discontinue in new business as a partner in the year 2019 of February Sanchin Khimji had been retired in the year February 2019. After the accused made partner his own wife to his business. The Sachin Khiji again retaining the share purchase agreement term, he made another agreement as per ExP1 and collected cheques by complainant. The accused came to know about this case after received summons by this Hon'ble court and accused upheld through his counsel,later he requested Sachin Khimji through in writing by way of RPAD for return of his cheques. The complainant did not received first notice issued by accused. Again accused had sent another notice, then complainant received. Complainant did not replied or return accused original cheque, later complainant sent reply through his Email. The accused had no any liability towards Sachin Khimji. In addition to that he produced some documents which are marked as ExD1 to 12. He has been subjected cross examination by complainant counsel. During course of cross examination, it is elicited from the mouth of DW1 that the accused was director since 1990 of V3 engineers Pvt., Ltd., company. He well aware about day today activities of V3 engineers company. Further he stated that he mainly concentrate financial activities of V3 engineers company but he did not aware about entire sections of V3 engineers company. Further DW1 contending that all the directors of V3 engineers 25 CC NO.3445/2019 SCCH-26 company are liable on behalf of company. Further he stated during course of cross examination that V3 engineers company was debt base company, there is no funding from complainant company. Further he stated that after purchase of share, shares allocate PW1 and same purchased by PW1 in the year 2010 2011. They purchased worth of Rs.30 lakhs at the time of investment. Further DW1 stated during course of cross examination that the PW1 came to contact to V3 engineers company after the V3 engineers company did some other work to complainant company. Further he denied the suggestion of complainant that at the time of exit from complainant company, accused along other promotor directors of company had agreed to purchase entire share holding of the complainant company in proportion to their share holding in the company. Further DW1 admitted that the V3 engineers company took decision in the year 2015, 2016 for sell assets of V3 engineers company. Further DW1 clearly and categorically admitted that the assets of V3 engineers company sold in the year 2017 i.e., land and building, machineries. Further DW1 admitted that they not produced sale deed of said assets before this court. Further DW1 undertook he would produce the said sale deed before this court and further DW1 voluntarily deposed before court that the V3 engineers company liquidated by the order of NCLT. Further it is admitted by DW1 that V3 engineers company had cleared 26 CC NO.3445/2019 SCCH-26 loan raised from the SBI bank and Exim bank. Further dW1 clearly admitted that he did not produced NOC given by SBI bank. Further he stated that the said NOC not in possession of accused. Further it is elicited during course of cross examination that he did not remember when company cleared loan of Exim bank. Further DW1 stated during course of cross examination that NOC given by Exim bank not produced before this court and voluntarily DW1 stated that the said NOC not with the possession of accused. Further it is elicited during course of cross examination that the complainant company invested money in the year 2010 and denied at the time of investing agreement entered between both parties. During course of cross examination, ExP8 to 12 documents marked through confrontation i.e., sale agreement dt.2952010 and 972010.Email conversation between accused and complainant. Further DW1 denied the suggestion of complainant that before signing ExD2, he withdrawn cheques given at the time of execution of ExD1 and then accused issued fresh cheques to complainant, but accused stated as no remember. Further it is elicited during course of cross examination that at the time of execution of ExD1 the complainant took signatures of accused on ExD1 forcefully and they did not took any legal action against for the act committed by complainant. Further DW 1 denied the suggestion of accused that he signed on ExD1 out of freewill. 27 CC NO.3445/2019
SCCH-26 Therefore they did not took any legal action against PW1. Further DW1 denied the suggestion of complainant that after registered this case against accused, he took false defence i.e., PW1 took signature on ExD1 on force. Further DW1 admitted during course of cross examination that in the year 2017, he started Neo alchemi build India LLP. In that company accused and PW1 had designated partners. He changed his email address after establishment of neo alchemi build India LLP as [email protected]. Further it is elicited during course of cross examination that at the time of execution of ExP1 get all the opinion from directors of accused company. But DW1 answered not remember. Further it is elicited during course of cross examination that before signing ExP1, draft copy of the same forwarded to all, they verified personally, then finalized by all the parties, but witness stated no remember. Further it is elicited during course of cross examination that accused did not remember after sign on ExP1 when Ex D5 and 8 sent by PW1 to accused. Further he stated that it could not possible to him what are all contents contained in reply notice. Further it is admitted by DW1 that in ExD8 date mentioned as 10122019.
ನಪ 1 ಕಕ ಸಹ ಮಡದ 10 ತತಗಳ ನತತರ ನಪ1 ತಪಪ ಎತದದ ನನನಟನಸ ಕನಟಟದವ ಎತದರ ಸರ. ಈ ಪ ಪಕರಣದಲ ವರತಟಆದ ನತತರ ನಡ 8 ನದ ನ after thought ಕನಟಟದನ ಎತದರ ಜಪನ ಇಲಲ.
28 CC NO.3445/2019
SCCH-26
17. Further DW1 clearly admitted that ExP2 belongs to his bank account and bear signature on ExP2 was belongs to accused and the signature found on ExP1 in all the pages belongs to accused. So there is no dispute regarding signatures found on ExP1 and 2. Further DW1 denied other formal suggestions of complainant.
18. The main defence of the accused in this case that the complainant had no locusstandi to lodge complaint against this accused,there is no order of board of resolution from the company and no authorization from the company to prosecute this case through PW1 against accused. The accused counsel mainly stress during course of argument regarding admission of PW1 in cross examination page 1, 10th line i.e., ನ ದಖಲಸದವ ಪವರದಲ board of directors ರ ವದನಟತಗನನ ದ ನಡಸಲಲ ಈ ಪ ಪಕರಣವನದ ನ ಪಸಮಡಲಲ.
ಮತದತ ಯವದನ ನಡವಳಗಳನದ
19. So as per this admission, the accused counsel mainly prayed before this court the PW1 had no locusstandi to proceed with this complaint. Hence pray for dismissal of complaint on this score only. To the contrary, the counsel for complainant took this court attention regarding board resolution passed by the company dated 2452019 which has been filed by complainant at the time of filing of complaint. The said document was in the file but not marked on behalf 29 CC NO.3445/2019 SCCH-26 of complainant. On perusal of document, i.e., "extract of the minutes of the meeting of the board of directors of Sachin Khimji Nuvo investors and realtors pvt., Ltd., held on friday 24 th day of May 2019 at the registered office of the company at 11.00 a.m." The said above document clearly indicates that the Sachin Khimji director of the company authorised by the company to institute, commence, prosecute, carry on, or defend or resist ....... to appoint and engage any solicitor, pleader, counsel or advocate and to sign and execute warrant of attachment or agreements or other authority to act and plead and to incur all necessary expenses in that behalf. Further learned complainant counsel placed reliance on Hon'ble Apex court decision in case between Bhupesh Rathod Vs Dayashankar prasad chaurasia and others AIR 2021 SC 5726 wherein Apex court held in that the complaint was accompanied by board of resolution of the company dt.1752006 authorising Mr.Bhupesh Rathod to initiate legal action agaisnt the respondent on behalf of the company. On 24122017, the company filed an affidavit through its Managing director i.e., Mr.Bhupesh Rathod stating that it had authorised him through the above mentioned board resolution to file a complaint case against this respondent. Further Apex court stated that "if a complaint was made in the name of company it is necessary that a natural person represents such juristic person in the court and court 30 CC NO.3445/2019 SCCH-26 looks upon the natural person for all practical purposes. It is in this context that observation were made that the body corporate is a dejure complaint while the human being is a defacto complaint to represent the person whose statement was taken on oath alone can continue to represent the company till the end of the proceedings. Thus, no magistrate could insist that the particular person whose statement was taken on oath alone can continue to represent the company till the end of the proceedings. Not only that even if there was initially no authority, the company can at any stage rectify that defect by sending a competent person". In view of the position of law laid down by the Hon'ble Apex court dt.10112021 the authority for prosecuting in the court on behalf of company is a rectifiable defect it can rectify at any stage of proceedings. So in the instant case, the complainant produced board of resolution dt.2452019, the said document clearly authorised and board of directors resolved PW1 to prosecute this case against accused on behalf of company. The PW1 clearly stated in his affidavit he has been authorised by the complainant company. The PW1 was director of complainant company. In this background, there is a clear authority from complainant company to prosecute this case. Hon'ble Apex court also held non production of authority can be 31 CC NO.3445/2019 SCCH-26 rectified at any stage of proceedings. Therefore the defence took by accused in view of the above discussion cannot be sustainable.
20. Further the second limb of defence of accused that as per section 138 of N.I Act whether preexistence of debt appears and documents relied by complainant are void agreement, there is no free consent from accused. Therefore this complaint not maintainable on this score also. During course of arguments, learned accused advocate vehemently submitted that the complainant company invested in V3 engineers company as per ExD1, the execution of ExD1 is under cloud. The complainant has habit of taking signatures of many persons on blank papers. PW1 suppressed material facts and preferred this complaint against this accused to claim illegally. ExP8 and 9 confronted through DW1 as per complaint they first entered settlement agreement on 10122018, some of the signed cheques handed over to Escrow agent, what is the necessity to enter ExP8 and 9. V3 engineers company liquidated due to financial crises the complainant company taking undue advantage of the situation and circumstances share holder was to sign the special resolution to facilitate the sale transaction of the company assets, the complainant company director compelled the directors of V3 engineers company to sign on agreement in the name and style of share purchase agreement through 32 CC NO.3445/2019 SCCH-26 his advocate and obtained signed blank cheques from directors of the company V3 engineers pvt., Ltd., it was duly intimated complainant company director on 10122019 as per ExD8, but complainant intentionally refused to receive the same. Therefore ExD1 and D2 are created by complainant under duress. In this background, peruse the oral evidence and documentary evidence of both parties it is forthcoming that ExD1 entered between complainant company and directors of V3 engineers company on 2332018, some signed cheques of directors of V3 engineers company and shares of V3 engineers company handed over to one Escrow agent as per terms and conditions prescribed in ExD1. Further it is relevant to mention in ExD1 Article 3 in 3.5 and 3.6 the escrow agent shall act under the instructions of the seller only and shall not use his discretion in any manner whatsoever. So as per this term escrow agent act upon the instructions of seller i.e., complainant company. Therefore signed blank cheques of directors of V3 engineers company handed over to complainant company director and escrow agent having preferential shares of V3 engineers company till date. Admittedly preferential shares of V3 engineers company which was hold by complainant company director still stood in the name of complainant company director. The cheque in question of this case handed over by the escrow agent to complainant company director. As per ExD2 the earlier 33 CC NO.3445/2019 SCCH-26 agreement entered between complainant company and directors of V3 engineers company was not acted upon for the various reasons. Therefore they again entered another agreement as per ExD2 on 2762018. The directors of V3 engineers company again issued fresh cheques as details mentioned in ExD2 by all the 3 directors of V3 engineers company. Again as per ExD2 fresh signed cheques of all the directors of V3 engineers company handed over to escrow agent Mrs.Jayashree Murali. As per ExD2 at page 3 at para 3 share holders 1 to 3/directors of V3 engineers company acknowledge the return of their earlier cheques deposited with the escrow agent as returned by the escrow to them. Further it is pertinent to mention the content of ExD2 para 2 at page 3 " the share holders 1 to 3 agree, accept and acknowledge that the seller is entitle to present the cheques for realization at any time by putting the dates as deemed fit by the seller if the share holders 1 to 3 herein do not complete the transaction of acquisition of the shares held by the seller in the company on or before". So as per this terms the seller/director of complainant company had right to present cheques which were deposited with escrow agent at any point of time as deemed fit by the seller if the share holders i.e., directors of V3 engineers company do not complete the transaction of acquisition of shares of 34 CC NO.3445/2019 SCCH-26 complainant. The accused himself suggested PW1 during course of cross examination that in page 8 at 9th line ನನದ ವ3 ಇತಜನಯರರ ಕತಪನಯ 30 ಪರರತಟಶನರದ ಪ ಪಮಣ ಪತ ತ ಹನತದದದರತದ ವ3 ಇತಜನಯರರ assets ನದ ನ ಮರಟ ಮಡಲದ ನನನ ಸಮಮ ತ ಅಗತತ ಎತದರ ಸರ. ಆ ಸತದರಭದಲ ವ3 ಇತಜನಯರರ ಕತಪನಯ ಎಲ ಲ ಡಡರಕಟರ ಗಳದ ನನನನದ ನ ಒಳಗನತಡದ ಮನಲ ತಳಸರದವ ವಚರದ ಬಗಗ ಚರರಸಲದ ಮನಟತಗ ಕರದದದರದ ಎತದರ ಸರ. ಸದರ ಮನಟತಗ ನಲ ಶನರದ certificates ಪತ ತ ಬರದದಕನಡದನ ಇದದ ಪಕದಲ ನನದ ವ3 ಇತಜನಯರರ ಕತಪನಯ ಸಸರಸತಯನದ ನ ಮರಟ ಮಡಲದ ಸಮಮ ತ ಕನಡದವದಲಲ ಎತದದ ಹನಳದನ ಎತದರ ಸರಯಲಲ . ವ3 ಲ ನದನರಶಕರದಗಳದ ಕತಪನ ಹನತದದದ ಆರರಕ ಇತಜನಯರರ ಕತಪನಯ ಎಲ ಪರಸಸತಯತದ ಹನರಬರಲದ ಲ ನದನರಶಕರದಗಳದ ಕತಪನ ಹನತದದದ ಆರರಕ ಪರಸ.ತಯತದ ಕತಪನಯ ಎಲ ಹನರಬರಲದ ಕತಪನಯ assets ನದ ನ ಮರಟ ಮಡಲದ ನನನ ಅನದಮತ ಪಡದದಕನಳದ ಳ ವ ಉದಶಕಕಗ share purchase agreement ಗ ಸಹ ಮಡ ಕನಟಟರದ ಎತದರ ಸಕ ನನದ ನದನರಶಕರದಗಳಗ ಒತತಡ ಮಡರಲಲಲ ಎತದದ ಹನಳದತತರ. share purchase agreement ಗ ಸಹ ಮಡದ ನದನರಶಕರದಗಳಗ ಮನವ ಮಡದರ ಎತದರ ಸಕ ಪರಸಪರ ಮತದಕತ ಮಡಕನತಡದದರತದ share purchase agreement ಗ ಸಹ ಮಡ ಕನಟಟರದ ಎತದದ ಹನಳದತತರ . share purchase agreement dated 2332018 ಶನರದಗಳನದ ನ ಖರನದ ಮಡಲದ ಆಗರದವ ಕರರದ ಪತ ತ ಎತದರ ಸರ . ವ3 ಇತಜನಯರರ ಕತಪನಯ 30 ಪರರತಟequity shares ನನನ ಬಳ ಇವ ಎತದರ ಸರ. ನನನ ಮದಖತತರ 30% of original equity shares certificates escrow ಸಸಧನನಕಕ ಕನಟಟದ ಎತದರ ಸರ. ವ3 ಇತಜನಯರರ ಕತಪನಯ ಇತರ ನದನರಶಕರದಗಳದ 35 CC NO.3445/2019 SCCH-26 ಗದರದಪಪಸದಮತದತ ಇತರರದ ಮನಲ equity shares certificates ಗಳನದ ನ escrow ಕಡಯತದ ಪಡದದಕನತಡಲಲ ಮತದತ ಅವರ ಹಸರಗ ವಗವರಣ ಮಡಕನತಡಲಲ ಎತದರ ಸರ. ಇಲಯವರಗನ ನದನರಶಕರದಗಳಗ ವ3 ಇತಜನಯರರ ಕತಪನಯ 30% equity shares ನನನ ಹಸರನಲ ಇವ ಎತದರ ಸರ . Equity shares certificates dated 2332018 ಇಲಯವರಗನ acted upon ಆಗಲಲ ಎತದರ ಸರ .
21. So as per above suggestions made by accused, it is proved before this court that the accused is the founder director of V3 engineers private limited company, the complainant company had invested money in the company in convertible preference shares which were subsequently converted into equity shares of the company. The complainant holding 30% of paidup capital of the company. The present accused and other directors of V3 engineers company were holding 70% of paidup capital of the company. Further it is also relevant to mention the suggestion of accused. In page 8 at 14 th line the V3 engineers company called special meeting for getting consent of all the board of directors for sell assets of V3 engineers company. The complainant also consented for selling assets of V3 engineers company. Accordingly share purchase agreement prepared and draft copy of share purchase agreement circulated or shared through Email between escrow agent and directors of V3 engineers company. The accused also made some suggestions for preparing share purchase 36 CC NO.3445/2019 SCCH-26 agreement. Further it is pertinent to mention condition prescribed in settlement agreement i.e., ExP1 that at page 2 in para 1, 2 nd line "The company had extended financial assistance to the tune of Rs.11 crores only (Eleven crores only) as preference capital which was subsequently converted in equity capital of V3 engineers whereas one of the terms on which the financial assistance was extended by the company was that the promoters of V3 engineers including the purchaser herein would proportionately buyback the equity shares held by the company in V3 engineers at the rate to ensure that a minimum sum of Rs.6,87,00,000/ is repaid to the company on the equity shares held by the company in V3 engineers and the directors of V3 engineers company have agreed exit to the complainant".
22. Accordingly complainant and accused entered ExP1, the accused issued some post dated cheques to the possession of escrow agent. Due to various reasons, the accused did not arranged money for settle the complainant company amount. Therefore accused and complainant company again entered ExD2. The complainant company escrow agent returned earlier blank signed cheques to accused and other directors of V3 engineers company have issued fresh signed cheques to the complainant company as per terms and conditions of 37 CC NO.3445/2019 SCCH-26 ExD2. It is elicited during course of cross examination from the mouth of DW1 that ವ3 ಇತಜನಯರರ ಕತಪನಗ ಇದದತತಹ assets ಗಳಲಲವನನ ನ ಮರಟ ಮಡದವ.
assets ಗಳತದರ land and building machineries. ವ3 ಇತಜನಯರರ ಕತಪನಯ assets
ಗಳನದ
ನ ನ ನತಯಲಯಕಕ ಕನಟಟಲಲ .
ಮರಟ ಮಡರದವ ಪತ ತವನದ ಅದನದ
ನ ನತಯಲಯಕಕ
ಕನಡಲದ ತನತದರ ಇಲಲ . ಸಕ ಸಸತತ NCLT ಇತದ liquidate ಆಗದ ಎತದದ ಹನಳದತತರ. ವ3 ಇತಜನಯರಪರ ಕತಪನ SBI ಬತಕತದ ಮತದತ Exium ಬತತಕನತದ ಸಲ ಪಡದತದತ . ಎರಡನ ಬತತಕದಗಳಗ ಸಲ ಮರದಪವತ ಮಡಲಯತದತ. ಪವತ ಮಡದ ಖರತ ದನತಕಗಳದ ನನಗ ಗನತತಲಲ. ಸಲ ತನರದವಳ ಆಗರದವ ಬಗಗ ಎಸ.ಬ.ಐ. ನವರದ NOC ಕನಟಟದದರದ. ಅದನದ ನ ನತಯಲಯಕಕ ಕನಟಟಲಲ. Exium ಬತತಕನತದ ಪಡದದಕನತಡ ಸಲ ಯವಗ ತನರದವಳ ಮಡದವತದದ ಹನಳಲದ ನನಗ ಜಪಕ ಇಲಲ. Exium ಬತತಕನ NOC ದಖಲ ನತಯಲಯಕಕ ಕನಡಲದ ತನತದರ ಇದ ಯ ಎತದರ ಸಕ ನಮಮ ಬಳ ಇಲಲ ಎತದದ ಹನಳದತತರ.
23. Further it is confronted through DW1 during course of cross examination by the complainant, ExP8 to 12, the accused himself admitted his Email ID and Email conversation made between accused and escrow agent and with complainant. The accused gave evasive answer during course of cross examination, the same has been extracted below: ನಪ 1 ಆಗದವಗ ನಮಮ ಅಭಪಪಯಗಳನದ ನ ಪಡದದ ನತತರ ಸಹ ಮಡದವ ಎತದರ ಸಕ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ . ನಪ1 ಕಕ ಸಹ ಮಡದವ ಮದಲದ draft ಗಳನದ ನ ತಯರಸ ಅದರ 38 CC NO.3445/2019 SCCH-26 ನ ಎಲಲರಗನ ಕಳದಹಸ ಅದನದ ನಕಲದಗಳನದ ನ ಒದ ಸಹ ಮಡಕನಟಟ ದರ ಎತದರ ಸಕ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ. ನಪ 1 ಕಕ ಸಹ ಮಡಕನತಡ ನತತರ ನಡ 5 ಮತದತ 8 ನದ ನ ಸರನಕಮಮ ರವರದ ಯವಗ ಕಳದಹಸದದ ರತದದ ಈಗ ಹನಳಲದ ಜಪಕ ಇಲಲ . ನಡ8 ರಲ 10122019 ಎತದದ ಬರದದ . ನಪ 1 ಕಕ ಸಹ ಮಡದ 10 ತತಗಳ ನತತರ ನಪ 1 ತಪಪ ಎತದದ ನನನಟನಸದ ಕನಟಟದವ ಎತದರ ಸರ . ಈ ಪ ಪಕರಣದಲ ವರತಟಆದ ನತತರ ನಡ 8 ನದ ನ After thought ಕನಟಟದನ ಎತದರ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ .
24. Further during course of cross examination, DW1 clearly and categorically admitted cross examination dated 822022 that the DW1 himself verifying ExP1 and 2, he admitted signature found on ExP1 and 2 belongs to him and the bank account pertaining to ExP2 is belongs to him.
25. The main defence of the accused that the V3 engineers company faced financial problem, due to this situation, the complainant get signatures on ExP1 under duress The complainant company had 30% of capital share in V3 engineers company, the complainant had dominate position to dominate directors. Therefore the accused signed on ExP1 and complainant collected signed cheques of accused, thereby he misused signed cheques of accused and filed false case against accused. To substantiate his defence the accused himself 39 CC NO.3445/2019 SCCH-26 examined as DW1 and produced 12 documents. It is elicited during course of cross examination by the complainant that ನಡ 1 ನದ ನ ಮಡದವಗ ನಮ ನ ಒತತಯ ಪನವಕರವಗ ಮತದತ ಸಹ ಮಡರದವ ಮ ಸಹಗಳನದ ಖಲ ಚಕದ ನ ತಗದದಕನತಡರತದದ Sachin khimji ವರದದದ ಯವದನ ಕ ತಮ ಕಡಗನತಡಲಲ.
ಕ ಗಳನದ Further it is relevant to mention another portion of cross examination that ನಪ 1 ಆಗದವಗ ನಮಮ ಅಭಪಪಯಗಳನದ ನ ಪಡದದ ನತತರ ಸಹ ಮಡದವ ಎತದರ ಸಕ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ . ನಪ1 ಕಕ ಸಹ ಮಡದವ ಮದಲದ draft ಗಳನದ ನ ತಯರಸ ಅದರ ನ ಎಲಲರಗನ ಕಳದಹಸ ಅದನದ ನಕಲದಗಳನದ ನ ಒದ ಸಹ ಮಡಕನಟಟದರ ಎತದರ ಸಕ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ. ನಪ 1 ಕಕ ಸಹ ಮಡಕನತಡ ನತತರ ನಡ 5 ಮತದತ 8 ನದ ನ ಸರನಕಮಮ ರವರದ ಯವಗ ಕಳದಹಸದರದ ಎತದದ ಈಗ ಹನಳಲದ ಜಪಕ ಇಲಲ . ನಡ8 ರಲ 10122019 ಎತದದ ಬರದದ . ನಪ 1 ಕಕ ಸಹ ಮಡದ 10 ತತಗಳ ನತತರ ನಪ 1 ತಪಪ ಎತದದ ನನನಟನಸದ ಕನಟಟದವ ಎತದರ ಸರ . ಈ ಪ ಪಕರಣದಲ ವರತಟ ಆದ ನತತರ ನಡ 8 ನದ ನ After thought ಕನಟಟದನ ಎತದರ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ .
26. Further DW1 clearly admitted his official Email ID during course of cross examination at page 6 in 7 th line guru@v3india.com and admitted he conversant with complainant through this email since 2016. The DW1 gave evasive answers during course of crossexamination.
ನಡ 1 ರ draft ನದ
ನ official email ID ಗ ಕಳಹಸದ ನತತರ ಪರಶನಲನ ಮಡ ನತತರ
finalise ಆಗತದತ ಎತದರ ಸಕ ನನಗ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ. ನಡ 1 ನದ ನ ಮಡದವ 40 CC NO.3445/2019 SCCH-26 ಸಮಯದಲ ನನಡದದ ಚಕದ ನ ಹತದಕಕ ಪಡದದಕನತಡದ ನಶನ ಡ 2 ನದ ಕ ಗಳನದ ನ ಮಡದವಗ ಹನಸ ಚಕದ ನ Sachin Khimji ರವರಗ ಕನಟಟದರ ಎತದರ ಸಕ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ . ಕ ಗಳನದ ನಪ 1 ಕಕ ಸಹ ಮಡಕನತಡ ನತತರ ನಡ 5 ಮತದತ 8 ನದ ನ Sachin Khimji ಯವರದ ಯವಗ ಕಳದಹಸದದರದ ಎತದದ ಈಗ ಹನಳಲದ ಜಪಕ ಇಲಲ . ನಮಮ ವಕನಲರದ ತಯರದ ಮಡದ ಪ ಪತತ ದತತರ ನನನಟನಸ ನ ಒಳತಶಗಳ ಬಗಗ ನನಗ ಹನಳಲದ ಜಪಕ ಇಲಲ . ನಪ 1 ತಪಪ ಎತದದ ನಪ1 ಕಕ ಸಹ ಮಡದ 10 ತತಗಳ ನತತರ ನನನಟನಸಕನಟಟದವ ಎತದರ ಸರ . ಈ ಪ ಪಕರಣದಲ ವರತಟಆದ ನತತರ ನಡ 8 ನದ ನ after thought ಕನಟಟದನ ಎತದರ ಜಪಕ ಇಲಲ ಎತದದ ಹನಳದತತರ.
27. On careful analyze entire evidence and documents, it is clear that the complainant company and accused had entered ExD1 on 10122018 by agreeing terms and conditions. Before conclude ExD1 both have expressed their opinion for preparing ExD1. As per ExD1 terms and conditions accused and other directors of V3 engineers company has handed over their signed cheques to complainant and cheques have been kept in the custody of escrow agent. For various reasons, the terms and conditions of ExD1 not performed. Thereafter accused and other directors of V3 engineers company entered ExD2, they have issued signed cheques. The present accused and wife executed ExP1 in favour of complainant. He issued 10 cheques as duly described in article 2 of ExP1 for collateral and security for acquisition of balance shares for sum of 41 CC NO.3445/2019 SCCH-26 Rs.2,30,00,000/. ExP2 was a cheque bearing No.14378 dt.3132019. ExP2 number clearly mentioned in ExP1. The complainant issued legal notice after dishonour of cheque i.e., ExP2 through his advocate on 1052019. The said legal notice duly delivered on accused on 1352019 as per ExP6 & 7. No reply given by the accused within its statutory time. This complaint presented before this court on 3052019 and cognizance taken by this court on 2462019. Accordingly this court issued process against accused. ExD5 issued by accused to complainant on 28112019. The 2nd notice i.e., ExD8 issued by the advocate for accused to complainant on 10122019. DW1 did not explained during course of cross examination, what he instructed to his advocate for sending notice to complainant. Further DW1 clearly admitted the said notice issued after 10 months issuance of legal notice by the complainant. Though DW1 denied the suggestion of complainant ExD5 and 8 issued after thought but it is clearly demonstrate through admission by the accused that though he received statutory notice which is sent by complainant on 1352019 when he received process by this court, he sent evasive reply or notice to complainant after thought. The accused absolutely failed to prove before this court, the complainant get signatures on ExP1 and signed cheques under duress. It is not possible to accept defence of the accused, no prudent man kept without answering notice sent by 42 CC NO.3445/2019 SCCH-26 complainant though he received on 1352019. If complainant get accused signatures on ExP1 and took signed cheques under duress for what reason accused prevented to took necessary legal action against complainant and his company. The DW1 clearly admitted before this court, the signature found on ExP1 and 2 was belongs to him and the bank a/c pertaining to ExP2 belongs to accused. It is not a case of accused that he has been not served any notice from complainant. Though accused received statutory notice which is issued by complainant on 1352019, after thought he sent ExD5 and 8 on 10122019 and 28112019. The defence of accused does not sustainable because the accused himself clearly and categorically admitted he did not replied at appropriate time to the notice sent by complainant and he did not took any legal action against complainant well in time for misusing his signed cheques and got signature of accused on ExP1 under duress. DW1 clearly and categorically admitted signatures on ExP1 and 2. During course of argument, the learned counsel for accused placed much reliance on decision rendered by Hon'ble High court of Karnataka in Venkatesh Bhat Vs Rohidas Shenoy 2010 Cr.LJ 1061, T.T.Naveen Kumar Vs B.Some Gowda 2012 (2) AIR KAR R649, wherein held in this case that " transaction between accused and claimant was of civil nature and cheque issued with respect to agreement to sell not issued in 43 CC NO.3445/2019 SCCH-26 discharge of any legal liability". Wherein Venkatesh Bhat Vs Rohidas Shenoy case held that "the alleged cheque issued by accused to complainant under an agreement entered between them if there any violation of terms of agreement by accused, remedy open to complainant to take appropriate steps before civil court and not criminal court". This court meticulously gone through the facts and circumstance and proposition of law laid down by the Hon'ble High court of Karnataka. In the instant case, the accused and complainant entered share purchase agreement and they themselves put some terms and conditions, in agreement itself the accused issued cheques, in default of payment as agreed by accused, the complainant got right for presentation of signed cheque for collection. Taking legal action against accused on the basis of negotiable instrument and taking steps on agreement both are parallel proceedings, there is no bar under law to take action under NI Act on Negotiable Instrument. In the instant case accused issued signed cheques to the possession of complainant and accused himself permitted complainant for presenting cheque under the agreement. Therefore from this court opinion the complainant got remedy before this court on ExP2. Under these facts and circumstances, the decision relied by accused not helpful to the case of accused. To the contrary the counsel for complainant much placed reliance on decisions of Hon'ble 44 CC NO.3445/2019 SCCH-26 Apex court in case between Modi Cements Ltd., Vs Kuchil Kumar Nandi 1998 (3) SCC 249 wherein Apex court held "that even if a cheque dishonoured because of stop payment instructions to bank Section 138 would get attracted". In case between K.N.Beena Vs Muniyappan and another 2001(8) Scc 458 wherein Apex court "held that the burden of proving that a cheque has not been issued for debt or liability is an accused". In case between J.M.Company Vs T.Ravichandran 2003 Crl.J. 2890 Hon'ble Madras High court held that "presumption of liability as provided u/s 138 in favour of holder of cheque is that unless contrary proved which shall be presumed that holder received cheque of nature referred in section 138 for discharging whole or in part of any debt or other liability". In case between Rangappa Vs Mohan 2010 (11) SCC 441 wherein Apex court held that "presumption mandated by Section 139 includes a presumption that there is exists a legally enforciable debt or liability. However such presumption is rebuttal in nature". In case between Kalamani Vs P.Balasubramaniyan 2021 (5) SCC 283 wherein Apex court held that "once signature on cheque admitted court ought to have presumed that the cheque was issued as consideration for a legally 45 CC NO.3445/2019 SCCH-26 enforciable debt. Though accused took defence that only a blank cheque and signed blank stamp papers were given to the respondent held immaterial". In case between Triyamabk S.Hegde Vs Sripad wherein Apex court held that "once the execution of cheque admitted section 139 of the Act mandates a presumption that the cheque for the discharge of any debt or other liability. The gravity of complaint under NI Act cannot be equated with an offence under the provisions of Indian Penal code 1860 or other criminal offence". In case between Ripudaman Singh Vs Balakrishna 2019(4) SCC 767 wherein Apex court held that "cheques were issued under and in pursuance of the agreement to sell though it is a well settled that an agreement to sell does not create any interest in immovable property it nonetheless constitutes a legally enforciable contract between parties to it. A payment which is made in pursuance of such an agreement is hence a payment made in pursuance of a duly enforceable debt or liability for the purpose of section 138". In case between T.R.Srinivasaiah Vs Chikkamangalore district cooperative central bank Ltd., Chikkamangalore Hon'ble single bench High court of Karnataka held that "once signature on cheque 46 CC NO.3445/2019 SCCH-26 admitted presumption should draw in favour of holder of the cheque u/s 118 and 139 of the Act to the effect that the cheque was issued for consideration and towards discharge of debt or liability. Therefore the burden was on the accused to discharge the said presumption".
In case between Sri.Dhaneshwari Traders Vs Sanjay Jain and another 2019 (16) SCC 83 wherein Apex court held that presumption u/s 139 of NI Act rebuttal though accused took defence that subject cheques were issued as security towards goods supplied for which payment was subsequently made by cash could not be estbalished, as sum purchases were paid for in cash and others by cheque. Evidence produced by the complainant was sufficient to raise presumption u/s 139 in respect of cheques.
22. The cheque is an instrument comes under the N.I Act holder in due course of the cheque, has got good title over the cheque. Therefore on the basis of evidence of PW1 and documentary evidence it clearly establish that the accused issued the disputed cheque to the complainant for legally dischargeable debt. The complainant has complied all essential ingredients of Sec.138 of NI Act. When 47 CC NO.3445/2019 SCCH-26 complainant complied all essential ingredients of Sec.138, as per Sec.139 of NI Act the cheque is issued for legally recoverable debt.
23. On careful examination of all the documents of complainant, it is very clear that the complainant filed this complaint well within time and complied all the ingredients of Section 138 of N.I. Act 1881. The presumption Under Section 139 of the NI Act is a presumption of law, it is not a presumption of fact. This presumption has to be raised by the court in all the cases once the factum of dishonor is established. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttable evidence depends on the facts and circumstances of each case. Such evidence must be sufficient to prove the case. Therefore a mere explanation is not sufficient to rebut this presumption of law. This court being guided by the preposition of law laid down by Hon'ble Apex court which is relied by the complainant which are as follows; Modi Cements Ltd., Vs Kuchilkumar Nandi 1998 (3) SCC 249 K.N.Beena Vs Muniyappan and others 2001 (8) SCC 458 Rangappa Vs Mohan 2010 (11) SCC 441 48 CC NO.3445/2019 SCCH-26 Kalamani Tex and another Vs P.Balasubramaniyan 2021 (5) SCC 283 Triyambak S.Hegde Vs Sripad 2021 SCC online SC 788 Birsingh Vs Mukesh Kumar 2019 (4) SCC 197 Ripudaman Singh Vs Balakrishna 2019 (4) SCC 767 T.R.Srinivasaiah Vs Chikkamagalur District cooperative Central Bank Ltd., (Criminal Revision No.109/2017) Sri.Dhaneshwari Traders Vs Sanjay Jain and another 2019 (16) SCC 83 Jayam company Vs T.Ravichandran 2003 CR.L.J. 2890High court of Madras It is profitable to refer the decision relied by the complainant and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.123/2021 arising out of special leave petition (criminal) 1876/2018 between M/s Kalamani Tex and another Vs P.Balasubramanian disposal date on 10022021 (three judges bench). In this case, Apex court held that, "once signature on cheque 49 CC NO.3445/2019 SCCH-26 admitted by the accused, court ought to have presume that, cheque was issued as consideration for a legally enforceable debt."
24. It is pertinent to refer and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.292/21 between Sumethi Vij Vs. M/s Paramount Tech FAB Industries (Division Bench) disposed dated 9.3.2021 In this case Apex Court held that under Section 139 of the Act, a presumption is raised that holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut this presumption, facts must be adduced by the accused which on preponderance of probability (not beyond reasonable doubt as in the case of criminal offence. Must then be proved.
25. Further Apex court clarified that there is a mandate of presumption of consideration in terms of the provision of the Act under Section 118 and 139 of Negotiable Instrument Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of section 138 of the NI Act. 50 CC NO.3445/2019
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26. As per N.I. Act, the presumption is in favour of holder of cheque. Here, the holder of cheque is complainant and presumption is in favour of complainant. It is burden on the accused to rebut the above presumption. As per Section 118 of N.I Act, presumption has to be raised by the court in all the cases once the factum of dishonour is established, but it is rebuttal presumption. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and should prove beyond any reasonable doubt. The accused has not taken and proved defence to rebut the presumption of law available in favour of the complainant envisaged U/s 118 r/w section 139 of NI Act. Accordingly the case of the complainant is acceptable as the complainant has proved that accused has intentionally without having sufficient money in his account and issued disputed cheque. Therefore, a mere explanation is not enough to repel this presumption of law. Further it is burden on accused to prove or explained before court in what circumstances, his 51 CC NO.3445/2019 SCCH-26 signed cheque goes to possession of complainant, but in the instant case, accused failed in discharge his onus and burden to explain above facts.
27. Therefore in my considered view, the complainant has established his case by way of documentary as well as oral evidence. Being accused liable to pay outstanding due amount of Rs.60,00,000/ to the complainant. Hence my answer to point No.1 to 3 in the Affirmative.
28. Point No.4: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. It is worth to note that the offence is of the nature of civil wrong. This court has power to impose both sentence of imprisonment and fine on the accused. This court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Hon'ble supreme court of India in a decision reported in 2015(17) SCC 368 in a case of H.K.Pukhraj Vs D.Parsmal observed that having regard to the length of trial and date of issuance of cheque it is necessary to award reasonable interest on the cheque amount along with cost of 52 CC NO.3445/2019 SCCH-26 litigation. By considering this case, length of trial and nature of business, this court came to conclusion, it is just and proper to grant reasonable interest along cheque amount in favour of complainant, it would meets ends of justice. In the result, I proceed to pass the the following: : ORDER : By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.70,05,000/ (Rupees Seventy lakhs five thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.70,00,000/ shall be payable to the complainant as compensation and remaining amount of Rs.5,000/ shall be defrayed as state expense.
In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
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SCCH-26 Office is hereby directed to supply free certified copy of this judgment to the accused forthwith.
(Dictated to the stenographer, transcript thereof is corrected and then pronounced by me in the open Court on this the 12th April 2022) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
ANNEXURE WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:
PW1: Sachin B.Khimji
DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P1 Settlement agrement
Ex.P2 Cheque, Signature as ExP2(a)
Ex.P3 Bank Memo
Ex.P4 Legal notice
Ex.P5 Postal receipt
Ex.P6 Postal acknowledgment
Ex.P7 Postal track
Ex.P8 and 9 Two agreements
Ex.P11 Email
Ex.P12 Email Scan copy
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WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
DW1 : Guruprasad R
DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
Ex.D.1 Certified copy of Share purchase agreement
dated 23032018
Ex.D.2 Certified copy of Addendum share purchase
agreement dated 27062018
Ex.D.3 Notarized copy of LLP agreement
dated 25102017 (original produced, verified and returned back) Ex.D.4 Notarized copy of the supplementary LLP agreement dated 11022019 (original produced, verified and returned back) Ex.D.5 Office copy of the legal notice dated 28112019 Ex.D.6 Original postal receipt Ex.D.7 Unopened postal cover Ex.D.8 Office copy of the legal notice dated 10122019 Ex.D.9 Postal receipt Ex.D.10 Postal acknowledgment Ex.D.11 Office copy of the reply notice through Email dt.12122019 Ex.D12 : Certificate u/s 65B of Evidence Act (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
55 CC NO.3445/2019SCCH-26 56 CC NO.3445/2019 SCCH-26 Dt 1242022 Judgment pronounced in the Open Court vide separate order:
ORDER By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.70,05,000/ (Rupees Seventy lakhs five thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.70,00,000/ shall be payable to the complainant as compensation and remaining amount of Rs.5,000/ shall be defrayed as state expense.
In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith.
(R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE 57 CC NO.3445/2019 SCCH-26 & A.C.M.M. BENGALURU.58 CC NO.3445/2019
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