Bangalore District Court
M/S. Gulf Oil Lubricants vs M/S. E. Madhusudhan Rao on 7 January, 2023
KABC030336912015
Presented on : 30-04-2015
Registered on : 30-04-2015
Decided on : 07-01-2023
Duration : 7 years, 8 months, 7 days
IN THE COURT OF XXVII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
Present: Sri. H. Satish B.A.L, LL.B., LL.M.,
XXVII A.C.M.M Bengaluru.
Dated: This the 7 th day of January 2023.
C.C. NO.12079/2015
Complainant M/s. GULF OIL LUBRICANTS
INDIA LTD.,
Having its Registered Office at
Kukatpally, Post Bag No.1,
Sanathnagar (IE) P.O.,
Hyderabad 500018.
and its Regional Office at
RUB Plaza, 1st Floor,
43/1, Tumkur Road,
Yeshwantpur,
BANGALORE 560022.
through its Authorized Signatory,
Mr. K. Manjunath
(By Sri.M. Santhosh, Adv.,)
V/s.
Accused 1.M/s. E. Madhusudhan Rao
Engineers & Contractors,
Flat No.103, 'B' Block,
1st Floor, Jaya Mansion,
S.D. Road, Opp Kamat Hotel,
Secunderabad - 500 003.
2. Sri. E. Madhusudhan Rao,
Partner & Authorized Signatory,
M/s. E. Madhusudhan Rao
Engineers & Contractors,
Flat No.103, 'B' Block,
1st Floor, Jaya Mansion,
S.D. Road, Opp Kamat Hotel,
Secunderabad - 500 003.
(By Sri. Srikanth Patil. K Adv.,)
2 C.C. No. 12079/2015
Offence U/s.138 of Negotiable
Instruments Act.
Plea of the accused Accused submitted he has
defence to make
Final Order ACQUITTED
Judgment Date 07/01/2023
****
JUDGMENT
The complainant company has filed complaint U/Sec.200 of Code of Criminal Procedure against the Accused No.1 & 2 for the offence punishable U/Sec.138 of the Negotiable Instrument Act.
2. The facts germane for disposal of the instant complaint can be summarized as per following:-
It is the case of the complainant company that, it is engaged in the business of manufacturing and sale of Lubricants and Oil and the accused No.1 is a partnership firm and accused No.2 is the partner of the accused No.1 firm and the accused had placed orders with the 3 C.C. No. 12079/2015 complainant company for supply of lubricants and oil and the same was supplied to the accused by the complainant company. It is stated that, towards discharge of liability due and payable, the accused issued three cheques i.e., cheque bearing No. 081454 dated:
18/03/2014 drawn on Axis Bank Ltd., Ramagundam 505215 (AP) for a sum of Rs.6,00,000/-, cheque bearing No. 081456 dated: 30/03/2014 drawn on Axis Bank Ltd., Ramagundam 505215 (AP) for a sum of Rs.4,23,935/- and cheque bearing No. 000988 dated: 11/06/2014 drawn on HDFC Bank, Krishnanagar, Ramagundam 505215 (AP) for a sum of Rs.9,00,000/- totally amounting to Rs.19,23,935/- in favour of the complainant company.
3. It is stated that, the complainant company presented the said cheques through its Banker i.e., Corporation Bank, CAPS Branch, Mission Road, Bengaluru and the same got dishonoured and the cheques dated: 18/03/2014 and 13/03/2014 were 4 C.C. No. 12079/2015 returned with an endorsement dated: 10/06/2014 and 12/06/2014 stating " FUNDS INSUFFICIENT " and the cheque dated: 11/06/2014 was returned with an endorsement dated: 12/06/2014 stating "ACCOUNT CLOSED". Thereafter, the complainant company got issued legal notice dated: 05/07/2014 to the accused through RPAD calling upon to repay the cheque amount within 15 days from the date of receipt of notice and the said notice was returned as "NOT CLAIMED" on 16/07/2014. Thereafter, the accused has neither repaid the amount covered under the aforesaid cheques nor replied to the said notice. Hence, this complaint.
4. The sworn statement of the Authorized Signatory of the complainant company by name K. Manjunath was recorded. As the complainant company had complied the mandatory requirements of Section 138 of Negotiable Instrument Act, this Court issued summons to the 5 C.C. No. 12079/2015 Accused. After service of summons, Accused entered appearance and was enlarged on bail.
5. The plea of the Accused was recorded and the substance of accusation was read over to the accused in the language known to him and the same was explained, to which, accused pleaded not guilty and submitted he has defense to make.
6. In order to prove the case, the Authorized Signatory of the complainant company by name K. MANJUNATH got himself examined as PW.1 and got marked Ex.P1 to Ex.P20 documents.
7. The statement of Accused under section 313 Code of Criminal Procedure was recorded and the accused denied the incriminating evidence appearing against him. The accused got himself got examined as DW.1 and got marked Ex.D1 document.
6 C.C. No. 12079/2015
8. Heard arguments on both sides. I have perused the materials on record.
9. The following points arise for my determination:
(i) Whether the complainant company proves that towards discharge of liability due and payable, accused issued cheque bearing No. 081454 dated: 18/03/2014 drawn on Axis Bank Ltd., Ramagundam 505215 (AP) for a sum of Rs.6,00,000/-, cheque bearing No. 081456 dated:
30/03/2014 drawn on Axis Bank Ltd., Ramagundam 505215 (AP) for a sum of Rs.4,23,935/- and cheque bearing No. 000988 dated: 11/06/2014 drawn on HDFC Bank, Krishnanagar, Ramagundam 505215 (AP) for a sum of Rs.9,00,000/- totally amounting to Rs.19,23,935/- ?
(ii) Whether the complainant company proves that accused has committed an offence punishable U/Sec.138 of Negotiable Instrument Act?
(iii) What order?
10. My answer to the above points are as follows:-
Point No.1 & 2 : In the Negative
7 C.C. No. 12079/2015
Point No.3 : As per the final order,
for the following:-
REA S ON S
11. Point Nos.1 & 2 : In-order to prove the
case, the Authorized Signatory of the complainant
company by name K. Manjunath got himself examined as PW1 and the affidavit filed by him in lieu of sworn statement was treated as examination in chief as per the dictum laid down in the ruling of the Hon'ble Apex Court of India, reported in (2014) 5 SCC 590 (Indian Bank Association & Ors V/s. Union of India & Ors).
12. The complainant has exhibited the following Ex.P1 to P20 documents. Ex.P1 is the Board Resolution dated: 12/08/2021, Ex.P2 to 4 are the Cheques, Ex.P5 & 6 are the Bank endorsements, Ex.P7 is the Copy of Notice dated: 05/07/2014, Ex.P8 is the Postal receipts, Ex.P9 & 10 are the Returned RPAD Covers, Ex.P9(a) P10(a) are the Copies of notices contained in Ex.P9 & 10, 8 C.C. No. 12079/2015 Ex.P11 to 19 are the Tax Invoices and Ex.P20 is the Account Statement.
13. The learned counsel for the complainant has filed written arguments and vehemently argued that, the accused has admitted his signature at Ex.P2 to P4 Cheques and he has also admitted the business transaction and argued once the accused admits his signature at Ex.P2 to P4 cheques and its issuance, the court will have to draw presumption as contemplated U/sec. 139 of the Negotiable Instruments Act in favour of the complainant that the subject cheques were issued by the accused in discharge of legally enforceable debt and also argued the accused though he claims that he has repaid the entire amount by way of cash, cheque and RTGS for having paid amount through cash, the accused has not produced any documents before the court and he has admitted the same and argued no positive evidence is 9 C.C. No. 12079/2015 placed on record by the accused to establish that the accused had issued subject cheques towards security and argued by examining PW1 and by producing all relevant documents and also by eliciting materials answers from DW1, the complainant has ably established that the subject cheques were issued by the accused in discharge of liability and sought to convict the accused. In support of his arguments the learned counsel for the complainant relied on the following rulings:
1. (2020) 12 SCC 724 decided between APS Forex service private limited V/s Shakthi International Fashion Linkers and others
2. 2019 SCC Online SC 138 decided between Birsingh V/s Mukesh Kumar
3. 2022 SCC Online SC 1131 decided between P Rasiya V/s Abdul Nazar and Another
4. 2010 SCC 287 decided between Uttam Ram V/s Devendar Singh Hudan
14. Per-contra, the learned counsel for the accused stoutly argued that there was no transaction between the accused and the complainant company and argued the accused had business transaction with 'Gulf Oil 10 C.C. No. 12079/2015 Corporation Ltd.,' and no documents are produced by the complainant company to establish that the name of 'Gulf Oil Corporation Ltd.,' was changed to 'Gulf Oil Lubricants India Ltd.,' and argued even at Ex.P11 to P19 the name of 'Gulf Oil Lubricants India Ltd.,' is forthcoming and the said documents are created documents and argued, the accused has repaid the entire amount to the complainant company and no question has been posed to DW1 / accused in respect of the same and the amounts paid by the accused as per Ex.D1 is not reflected at Ex.P20 and argued the subject cheques were issued as security to One Jayakumar of the complainant company towards transaction in question and PW1 has admitted that the accused had issued the said cheques to the said Jayakumar and the said person has not been examined by the complainant company and argued PW1 is not having proper Authorization to depose on behalf of the complainant company and argued the cheques in question have been misused by the complainant company 11 C.C. No. 12079/2015 and argued by examining DW1 and producing Ex.D1 document and also by eliciting material answers from PW1, the accused has disproved the case of the complainant company and he has rebutted the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act and sought to acquit the accused. In support of his arguments the learned counsel for the accused relied on the ruling reported in (2022) 7 SCC 612 decided between TRL KROSAKI Refactories Ltd., V/s SMS Asia Pvt Ltd., and Another.
15. I have gone through the rulings relied on by the learned counsel for the complainant and the accused and I have taken note of the principles laid down in the aforesaid rulings and I have applied the same while deciding the instant case. That apart, on considering the arguments addressed by the learned counsel for the complainant and accused, before adverting to the oral 12 C.C. No. 12079/2015 evidence let in by the complainant and accused and also without touching upon the defence set up by the accused, the documents produced by the complainant company which are at Ex.P2 to 10(a) prima-facie discloses that the complainant company has discharged initial burden of proving presentation of Ex.P2 to 4 cheques, bouncing of cheques, issuance of notice. At this juncture, I find it relevant to quote ruling reported in 2010(11) SCC 441, decided between Rangappa Vs. Sri. Mohan wherein the Hon'ble Apex Court held that:
" Presumption under section 139 of Negotiable Instrument Act, 1881 includes the presumption of the existence of legally enforceable debt or liability. That presumption is required to be honoured and if it is not so done, the entire basis of making these provision will be lost. Therefore, it has been held that, it is for the Accused to explain his case and defend it once the fact of cheque bouncing is prima-facie established. The brain is on him to disprove the allegations once a prima-facie case is made out by the complainant ".
13 C.C. No. 12079/2015
16. In the aforesaid ruling the Hon'ble Apex court has held that, once the complainant establishes bouncing of cheque, then it is for the accused to disprove the allegations and also it is for him to rebut the presumption as contemplated under section 139 of Negotiable Instrument Act by placing acceptable evidence. In the ruling relied on by the complainant company decided by the Hon'ble Apex Court in:
Crl.Appeal No. 1233 - 1235 of 2022 decided on 12/08/2022 between Rasiya V/s Abdul Nazar reported in 2022 SCC Online SC 1131 the Hon'ble Apex court at paragraph 7 held that as per Sec.139 of the Negotiable Instruments Act, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Sec.138 of the Negotiable Instruments Act for discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the complainant that the cheque was issued by the accused and the signature and the issuance of cheque is not disputed by the accused, in that case, the onus will shift on the accused to prove the contrary that the cheque was not for any debt or other liability.
The presumption U/sec. 139 of the Negotiable Instruments Act is a statutory presumption and thereafter, once it is 14 C.C. No. 12079/2015 presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant / Holder of cheque, in that case, it is for the accused to prove the contrary.
In the ruling relied on by the complainant company (2020) 12 SCC 724 decided between APS Forex service private limited V/s Shakthi International Fashion Linkers and others. The Hon'ble Apex Court at paragraph 9, held that :
Sec.139 of the Negotiable Instruments Act is an example of reverse onus clause and therefore, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always presumption in favour of the complainant that their exists legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.
17. In the light of the principle laid down above, it is worth to note that, DW1 in his examination in chief at paragraph 2, has categorically admitted that Ex.P2 to 4 cheques belongs to the accused No.1 firm and the signature appearing thereon belongs to him. DW1 has deposed that he had given Ex.P2 to 4 signed blank cheques to the 15 C.C. No. 12079/2015 complainant company in respect of the transaction in question. Be that as it may, as the accused has admitted his signatures at Ex.P2 to P4 cheques and also as he has admitted that the same belongs to him and its issuance, this court will have to raise presumption as contemplated U/sec. 139 of the Negotiable Instruments Act that Ex.P2 to P4 cheques were issued by the accused towards discharge of debt.
18. At this juncture, I find it appropriate to quote the ruling reported in:
(2009) 2 SCC 513 decided between Kumar Exports V/s. Sharma Carpets, the Hon'ble Apex Court at paragraph 20 & 21 has explained the course to be adopted by the accused to disprove the case of the complainant and to rebut the presumption as envisaged U/sec. 139 of the Negotiable Instruments Act. At paragraph 20, it is held that, the accused in a trial U/sec. 138 of the Negotiable Instruments Act has two options.
He can either show that consideration and debt did not exist or that under the particulars circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt exist. 16 C.C. No. 12079/2015 To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as his expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and there was no debt or liability to be discharged by him. However, the court need not insist in every case, that the accused should disprove the non-
existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that, bare denial of the passing of the consideration and the existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration which, the court may either believe that the consideration and debt did not exist or there non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by the consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances, so relied upon or compelling, the burden may like wise, shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, 17 C.C. No. 12079/2015 those mentioned in Sec.114 of the Evidence Act, to rebut the presumption U/sec. 118 & 139 of the Negotiable Instruments Act. At paragraph 21, the Hon'ble Apex Court held that the accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases from the case set out by the complainant, that is the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shift back to the complainant and, therefore, the presumption U/sec. 118 and 139 of the Negotiable Instruments Act will not again come to the complainant's rescue. In the light of the principle laid down above, now I find it appropriate to enter in to the domain of defence set up by the accused to ascertain whether accused has been able to rebut the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act. Let me discuss each and every aspect in detail.
18 C.C. No. 12079/2015(I) TRANSACTION:
19. It is to be noted that, it is the case of the complainant company, that it had supplied Lubricants and oils to the accused firm. In order to establish the same the complainant company has produced Ex.P11 to P19 Tax Invoices and has also produced Ex.P20 Account statement to establish the liability payable by the accused. The accused No.2 got himself examined as DW1 and he in his examination in chief deposed that, complainant company is known to him and accused No.1 is the partnership firm and he is the partner of accused No.1 firm and deposed he had oil and lubricants business transaction with the complainant company from 2011 to March 2014. DW1 also deposed during that period he had transacted with the complainant company to the tune of Rs.60,00,000/- to Rs.70,00,000/- and he has repaid all the dues through RTGS, cheque and cash and deposed he has not transacted with 'Gulf Oil Lubricants India Ltd.,' and that he has only transacted with 'Gulf Oil Corporation Ltd.,'. DW1 also deposed that Ex.P11 19 C.C. No. 12079/2015 to 20 documents are created documents. DW1 also deposed "ಫರರಧ ಕಕಪನಯಲರರವ ಜಯಕರಮರ ಎಕಬ ವವಕಕ ಮತ ತ ನನನನಕದಗ ವವವಹರಸರತಕದದರರ".
20. It is to be noted that, Ex.P2 to P4 cheques are drawn in the name of 'Gulf Oil Corporation Ltd.,' and Ex.P7 notice is issued on behalf of 'Gulf Oil Lubricants India Ltd.,' and the complaint is filed in the name of 'Gulf Oil Lubricants India Ltd.,'. PW1 has produced Ex.P1 Board Resolution dated: 12/08/2021 and the same is issued by the 'Gulf Oil Lubricants India Ltd.,' and in the said documents, it is mentioned that PW1 and other officials of the said company have been Authorized to represent the company to file cases U/sec. 138 of the Negotiable Instruments Act including matters of erstwhile 'Gulf Oil India Ltd.,' and Gulf Oil Corporation Ltd., and any matter of the company. It is required to be noted that, the complainant company has not produced incorporation certificate or any other document to establish that the erstwhile name of the complainant company 20 C.C. No. 12079/2015 was 'Gulf Oil Corporation Ltd.,'. Even in the Ex.P7 notice or in the complaint there is no specific averments that the erstwhile name of the complainant company was 'Gulf Oil Corporation Ltd.,'.
21. Be that as it may, DW1 in his examination in chief has specifically deposed that, he transacted with the 'Gulf Oil Corporation Ltd.,' between 2011 to 2014. On careful scrutiny of the Ex.P11 to P19 Tax Invoices it discloses the name of 'Gulf Oil Lubricants India Ltd.,' and the said documents pertains to year 2013 and the name of the accused is shown as Consignee. During cross-examination dated:
01/09/2022 PW1 admitted that Ex.P11 to P19 documents are in the name of 'Gulf Oil Lubricants India Ltd.,' and admitted that on the date of generating the said documents, the very same date will forthcome in the said documents and admitted as Ex.P11 to P19 documents are in the name of 'Gulf Oil Lubricants India Ltd.,', the accused will have to issue cheques in the name of very same company and 21 C.C. No. 12079/2015 admitted at Ex.P2 to P4 cheques, the name of 'Gulf Oil Corporation Ltd.,' is forthcoming. PW1 voluntarily deposed that, 'Gulf Oil Lubricants India Ltd.,' and 'Gulf Oil Corporation Ltd.,' are one and the same and deposed in the month of July 2014 the name 'Gulf Oil Corporation Ltd.,' was changed to 'Gulf Oil Lubricants Ltd.,' and deposed 'Gulf Oil Corporation Ltd.,' ಎಕಬ ಹಸರರ 'Gulf Oil Lubricants India Ltd.,' ಎಕದರ ದನಕಕಕ 01/04/2014 ರಕದ ಬದಲಗರರತಕದ ಎಕದರ ಸರ.
22. That apart, PW1 also admitted that on 12/09/2013, it was decided by the complainant company to change the name of 'Gulf Oil Corporation Ltd.,' as 'Gulf Oil Lubricants India Ltd.,' and admitted there was no constraint for the complainant company to show the name of 'Gulf Oil Corporation Ltd.,' at Ex.P11 to P19 invoices. At paragraph 10 PW1 admitted that it is for the first time he is deposing before the court that, the name of 'Gulf Oil Corporation Ltd.,' was changed as 'Gulf Oil Lubricants 22 C.C. No. 12079/2015 India Ltd.,' in the year 2014. That apart, during cross-
examination, the complainant company has suggested to DW1/ accused that 'Gulf Oil Lubricants India Ltd.,' and 'Gulf Oil Corporation Ltd.,' are one and the same and the same is denied by DW1. It is to be noted that, though the complainant company has not produced any document to show that the name of the complainant company was changed from the name of 'Gulf Oil Corporation Ltd.,' to 'Gulf Oil Lubricants India Ltd.,' on 01/04/2014 and that a meeting was held in respect of the same on 12/09/2013, the suggestion put forth by the accused to PW1 itself is sufficient to hold that the accused is admitting and that he was aware about the change of name of the complainant company from 'Gulf Oil Corporation Ltd.,' to 'Gulf Oil Lubricants India Ltd.,' .
23. That apart, DW1 in his cross-examination dated:
17/09/2022, at paragraph 1 deposed he has transacted with the complainant company for the last time in the month 23 C.C. No. 12079/2015 September 2013 and admitted there was no dispute between himself and the complainant company. DW1 admitted he use to make payment to the complainant on the basis of invoices issued by the complainant company and also admitted he use to make payment to the complainant company through cheque and RTGS. DW1 voluntarily deposed that he has made payment to the complainant company through cash and that he has paid amount in cash to One Jayakumar of the complainant company and deposed the said Jayakumar has issued receipt for the same and notably, the same has not been deposed by DW1 in his examination in chief and the receipts alleged to have been issued by the Jayakumar has not been produced by the accused before the court and the same is admitted by DW1.
24. That apart, during cross-examination dated:
16/07/2022 at paragraph 1 PW1 deposed that accused has contacted one Jayakumar of the complainant company for supply of Oil and admitted that the said Jayakumar was 24 C.C. No. 12079/2015 looking after the business transaction of the instant case and admitted at Ex.P11 the name of Jayakumar is forthcoming. At paragraph 2 PW1 deposed ಸದರ ಜಯಕರಮರ ರವರರ ಆರನರಪತನನರ ನ ಸಕಪಕರಸ ಎಷರ ಷ ಆಯಲ ದಸಕನರ ಬರಕಕದರ ಹರಳ ಅವರಕದ ಪರರರಸಆರರರ ಪಡದರ ನಕತರ ಫರರಧ ಕಕಪನ ಆರನರಪಗ ಆಯಲದಸಕನರ ಸರಬರಜರ ಮರರತಕದದರರ ಎಕದರ ಸರ. ನಪ11 ರಕದ ನಪ19 ರ ಪ ಪಕರ ಆರನರಪಗ ಫರರಧ ಕಕಪನ ಆಯಲ ದಸಕನರ ಸರಬರಜರ ಮಡದವ ಎಕದರ ಸರ. ನಪ 11 ರಕದ 19 ಇನ ವಯಯ ಗಳ ಪ ಪಕರ ಫಯರರಧ ಕಕಪನಯ ಜಯಕರಮರ ರವರನಕದಗ ವವವಹರಸದರ ಎಕದರ ಸರ. ಈ ಪ ಪಕರಣ ವವವಹರ ಸಕಕದರ ಬದ ಮತರಕ ನಗಪರದಲ ನಡದದ ಎಕದರ ಸರ. At paragraph 3 ಆರನರಪಗ ನ ಫರರಧ ಕಕಪನಗ ಸಕಕದರ ಬದ ಮತರಕ ನಗಪರದಲ ಆಯಲ ದಸಕನನರ ಸರಬರಜರ ಮಡದವ ಎಕದರ ಸರ. PW1 also deposed as per Ex.P20 the accused is liable to pay sum of Rs. 19,24,000/- and it is suggested by the accused to PW1 that on 17/04/2013 the accused has made payment of Rs.3,65,501/- to the complainant company through RTGS and it is also suggested by the accused to PW1 that, on 31/12/2016 the accused has made payment of Rs.2,00,000/- by cash and on 31/03/2012 25 C.C. No. 12079/2015 the accused has returned oil to the complainant company to the tune of Rs.2,04,108/- and the same is denied by PW1.
25. On careful scrutiny of the aforesaid testimony of DW1, PW1 and the suggestion put forth by the accused to PW1, though Ex.P11 to P19 Invoices and Ex.P7 notice are issued in the name of 'Gulf Oil Lubricants India Ltd.,' to the accused and though the name of 'Gulf Oil Corporation Ltd.,' is forthcoming at Ex.P2 to P4 documents, the same manifest that the accused had business transaction with the 'Gulf Oil Corporation Ltd.,' which is presently known as 'Gulf Oil Lubricants Ltd.,'. As such it could be concluded that there was a business transaction between the accused and the complainant company which was previously known as 'Gulf Oil Corporation Ltd.,' with respect to purchase of Oil and lubricants.
26 C.C. No. 12079/2015(II) SERVICE OF NOTICE AND CONTENTS OF NOTICE:
26. It is required to be noted that, the accused has taken defence that Ex.P7 Notice was not served upon him. The accused in his examination in chief, at paragraph 3 deposed that he has not received any notice from the complainant company. During cross-examination, at paragraph 4, DW1 deposed ನಪ7 ರಲ ಕಣಸರರವ ವಳಸ ಅದರ ನನನ ಕರರರಯ ವಳಸ. ಸಕ ದ , ಅದನರ ಮರಕದರವರದರ ಸದರ ಕರರರ ಬಡಗ ಕರರರರಗದರ ನ ನನರ 2014 ರಲ ಮರಕಚರರತಕರನಕದರ ನರಡಯರತಕರ. ಆ ಬಗಗ ನವರಲಯದಲ ರವದರ ನ ಹಜರಸಲಲ ಎಕದರ ಸರ. ನಪ 7 ನನರಟಸನರ ದಖಲಗಳನರ ನ ನನರ ಸಸರಕರಸಲರ ನರಕರಸದ ಎಕದರ ಸರಯಲಲ. It is to be noted that, in order to establish issuance of Ex.P7 Legal notice to the accused through RPAD and its Non service, the complainant company has produced Ex.P8 Postal receipts, Ex.P9 & 10 Postal cover and notably, Ex.P7 Notice sent through Ex.P9 & 10 was returned as "Not claimed" by the accused. As discussed DW1 admitted that the Address mentioned in the Ex.P7 Legal notice is the address of his office and though he has deposed that it is a rented premises and he vacated the same in year 27 C.C. No. 12079/2015 2014, to establish the same the accused has not produced any documents before the court.
27. That apart, even though Ex.P7 Notice has been returned as "Not claimed" and as the accused has not disputed the address mentioned at Ex.P7, the same will have to be construed as deemed service and as the complainant has sent notice to the correct address of the accused, this court will have to raise presumption as contemplated U/sec. 27 of the General Clauses Act that if, the notice is sent to the correct address through Registered post, the same is a deemed service. The said proposition of law is laid down in the ruling decided between C.C. ALAVI HAJI V/s. PALAPETTY MUHAMMED AND ANOTHER (Crl.Appeal No. 767/2007) decided on 18/05/2007, wherein, the Hon'ble Apex court at Paragraph No.14 held that:
"Sec.27 of General Clauses Act gives raise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is 28 C.C. No. 12079/2015 unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed have been effected at the time at which the letter would have been delivered in the ordinary course of business. This court has already held that when a notice is sent by registered post and is returned with a postal endorsement refused or not available in the house or house lock or shop closed or addressee not in station due service has to be presumed".
In the light of the principle laid down above and taking note of the admission of DW1, it cannot be said that Ex.P7 notice was not served upon the accused. That apart, the accused has also taken a defence that Ex.P7 notice does not contain the details of invoice under which Oil was supplied to the accused. PW1 in his cross-examination dated: 16/07/2022 at paragraph 4, admitted that there is no mention at Ex.P7 notice about under which invoices and the date of supply of oil by the complainant company to the accused. The said admission of PW1 and non mentioning of the details of invoices at Ex.P7 Legal notice is of no consequence as accused himself has suggested to PW1 that the complainant company 29 C.C. No. 12079/2015 has supplied Oil to the accused as per Ex.P11 to P19. Just because the details of invoices are not mentioned in the Ex.P7 legal notice, the same cannot be construed as defective in nature.
III. STATEMENT OF ACCOUNT:
28. It is to be noted that, the accused has taken a defence that he has repaid the entire amount to the complainant company and that he is not liable to pay amount covered under the Ex.P2 to P4 cheques to the complainant company. DW1 in his examination in chief deposed, that he has repaid entire amount to the complainant company and to establish the same, the accused has produced Ex.D1 Account statement for the period from 31/07/2012 to 30/06/2013. On careful scrutiny of highlighted dates Ex.D1 it discloses that, the accused has made payment to 'Gulf Oil Corporation Ltd.,' on 31/07/2012, 04/01/2013, two payments on 01/03/2013, 17/04/2013 and two payments on 22/06/2013 and notably, the complainant company has not 30 C.C. No. 12079/2015 posed any question to DW1 in respect of the Ex.D1 document nor the complainant company has not disputed the payments made by the accused under Ex.D1 document.
29. It is to be noted that, the complainant company has produced Ex.P20 Account statement and the same is for the period 01/04/2012 to 31/01/2015. As per Ex.P20 the complainant company claims that the accused was due to the tune of Rs.19,23,935/- and notably, on which date the accused was due to the said sum is not mentioned in the Ex.P7 notice, complaint and in the affidavit filed by PW1 in lieu of examination in chief and even Ex.P20 is also silent in respect of the same and there is no averment in the complaint about the details of the last payment made by the accused and also about the total outstanding amount payable by the accused and Ex.P2 to P4 cheques are dated: 18/03/2014, 30/03/2014 & 12/06/2014 and Ex.P20 Account statement is only for the period 01/04/2012 to 31/03/2015 and the complainant company has not produced complete account 31 C.C. No. 12079/2015 statement to show that accused was due to them the amount mentioned in the Ex.P2 to P4 cheques. It is to be noted that, though the accused / DW1 in his cross-examination, deposed that he has paid amount to one Jayakumar of the complainant company by way of cash and that the said Jayakumar has issued receipt, admittedly the accused has not produced the receipt for having paid the said amount and he has not deposed how much amount he has paid in cash. Though the accused has suggested to PW1 that the accused has made payment of Rs.2,00,000/- by way of cash on 31/12/2016, the same is not supported by any documents.
30. That apart, Ex.P20 document also reveals that on 08/01/2015, the accused has made payment of Rs.2,00,000/- through RTGS. It is to be noted that, PW1 was examined on 28/04/2022 and the affidavit filed by PW1 in lieu of sworn statement was considered as examination in chief and notably, the complainant company has not let in further examination in chief of PW1 and adduced evidence in 32 C.C. No. 12079/2015 respect of the payment received on 08/01/2015 by the accused. Be that as it may, it is to be noted that, during cross-examination dated: 01/09/2022 at paragraph 12, PW1 deposed ನಪ11 ರಕದ 20 ದಖಲಗಳನರ ನ ಈ ಪ ಪಕರಣದ ಸಲರವಗ ಸಸಷಷಸದನಕದರ ಸರಯಲಲ. ಆರನರರಪಗ ಎಷರ ಷ ಆಯಲ ಸರಬರಜರ ಮಡದವ ಮತರಕ ಎಷರ ಷ ಆಯಲ ಹಕಪಡದದವಕಬ ಬಗಗ ನಖರವಗ ನಪ10 ರಲ ನಮನದರ ಇಲಲ ಎಕದರ ಸರಯಲಲ. Therefore, when the accused has questioned PW1 and disputed Ex.P20 document the complainant company ought to have made an attempt to explain Ex.P20 document in detail about the actual payments made by the accused and the actual amount due to be paid by the accused. Without which it cannot be said that the claim made by the complainant company is valid and proper. (IV) CHEQUE ISSUED TOWARDS SECURITY:
31. It is to be noted that, the accused has also taken defence that the Ex.P2 to 4 cheques are issued towards security in respect of the transaction in question. DW1 in his 33 C.C. No. 12079/2015 examination in chief at paragraph 2 deposed, that Ex.P2 to P4 cheques belongs to the accused No.1 firm and the signature found at Ex.P2 to P4 cheques belongs to him and deposed that he had issued the signed blank cheques to the complainant in the year 2012 towards security. During cross-examination, at paragraph 2 DW1 admitted for having issued Ex.P2 to P4 cheques to the complainant in the year 2012 as a security, he has not obtained any endorsement from the complainant company. At paragraph 3, DW1 also deposed 2012 ರಕದ 2015 ರ ವರಗ ನಪ 2 ರಕದ ನಪ4 ರಕರ ಕ ಗಳನರ ಯ ನ ವಪಸರ ಯ ಕನಡ ಎಕದರ ಹರಳ ನನರ ಫರರಧಗ ಲಖತ ರನಪದಲ ರವದರ ನನರಟಸರ ಕನಟಷಲಲ. ಸಕ ಮರಕದರವರದರ ಸದರ ರಕರ ಕ ಗಳನರ ಯ ಕನಡ ಎಕದರ ನನರ ನ ವಪಸರ ಮಖಕವಗ ಜಯಕರಮರ ರವರಲ ತಳಸದ ಎಕದರ ನರಡಯರತಕರ .
ಫರರಧರವರರ ನಪ2 ರಕದ 4 ರಕರ ಕ ಗಳನರ ನ ದರರರಪಯರರಗ ಪಡಸರರತಕರಕದರ ಹರಳ 2012 ರಕದ ಇಲಯವರಗನ ಅವರ ವರರದದ ರವದರ ಕ ತಮ ತಗದರಕನಕಡಲಲ.
32. It is required to be noted that, though the accused has taken a defence that he had issued Ex.P2 to P4 signed blank cheques in the year 2012 to the complainant company 34 C.C. No. 12079/2015 towards security in respect of transaction in question, as deposed by DW1 he has transacted with the complainant company from 2011 to 2014 and as per his testimony he has repaid entire amount to the complainant company through RTGS, cheque and cash and to establish the same the accused has produced Bank account statement covering the period 31/07/2012 to 30/06/2013. If it was so, the accused ought to have issued notice to the complainant company seeking return of cheques or the accused ought to have initiated legal action against the complainant company for not returning the cheques and also for misusing the cheques. That apart, DW1 voluntarily deposed that he had asked JAYAKUMAR of the complainant company orally for return of cheques. PW1 in his cross-examination has admitted that accused had transacted with Jayakumar of the complainant company as per Ex.P11 to P19 invoices. In such an event the accused ought to have summon the said person and examined him before the court to prove his stand. 35 C.C. No. 12079/2015
33. It is to be noted that, during cross-examination dated: 16/07/2022 at paragraph 5, PW1 deposed that accused has issued Ex.P2 to P4 cheques to one Jayakumar of the complainant company and denied that the accused has issued Ex.P2 to P4 cheques towards security. If at all, the accused had issued subject cheques to the said Jayakumar towards security in respect of the transaction in question, as discussed the accused ought to have summon and examined the said Jayakumar to establish the same and also as admitted by DW1 he has not obtained any endorsement from the complainant company or by Jayakumar in respect of issuance of Ex.P2 to P4 cheques towards security. It is to be noted that, in the ruling relied on by the complainant company 2019 SCC Online SC 138 decided between Birsingh V/s Mukesh Kumar. At paragraph 37 & 38 the Hon'ble Apex Court held that, a meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sec.28, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to a 36 C.C. No. 12079/2015 payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer, if the cheque is other wise valid, the penal provisions of Sec.138 would be attracted. At paragraph 38, the Hon'ble Apex Court held if a signed blank cheque is voluntarily presented to a payee, towards some payments, the payee may fil-up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence". In the light of the principle laid down above, though the accused has taken a contention that the Ex.P2 to P4 cheques were issued to the complainant company towards discharge of security and though he has not examined the Jayakumar belonging to the complainant company and though he has not 37 C.C. No. 12079/2015 initiated action against the complainant company seeking return of cheque or for not returning the cheques and also for misusing the cheque, the answer elicited by PW1 by the accused would be relevant and place a vital role in arriving at a conclusion whether the accused had issued subject cheques towards security.
34. It is to be noted that, during cross-examination, dated:
16/07/2022 at paragraph 6, PW1 deposed that he has not enquired the said Jayakumar whether the accused had issued Ex.P2 to P4 signed blank cheques towards security or not and deposed he could not enquire with the said Jayakumar as the said Jayakumar has left the job. PW1 deposed as the Ex.P2 to P4 cheques are issued by the accused to Jayakumar, he has no personal information whether the said cheques were blank or not and that whether the same was issued towards security in respect of the transaction in question and also he as no personal knowledge has to the place of issuance of cheque. That apart, it is required to be noted that, the 38 C.C. No. 12079/2015 cheques Ex.P2 to P4 are dated as 30/03/2014, 18/03/2014 and 11/06/2014. It is the case of the complainant company that accused had issued three cheques towards discharge of liability and it is not the case of the complainant company that the accused had issued post dated cheques. As admitted by PW1, the complainant company got changed its name from Gulf Oil Corporation Ltd., to Gulf Oil India Lubricants Ltd., on 01/04/2014. PW1 in his cross-examination has admitted that Ex.P11 to P19 documents as they are in the name of Gulf Oil India Lubricants Ltd., the accused will have to issue cheques in the name of very same company. It is to be noted that, as discussed Ex.P2 and P3 cheques are dated: 30/03/2014 & 18/03/2014 and Ex.P4 cheque is dated: 11/06/2014. As the name of the complainant company was changed from Gulf Oil Corporation Ltd., to Gulf Oil India Lubricants Ltd., on 01/04/2014, why the complainant company has received Ex.P4 cheque which is in the name of Gulf Oil Corporation Ltd., is not explained by the complainant company. That apart, PW1 in his cross- 39 C.C. No. 12079/2015 examination, dated: 16/07/2022 at paragraph 5, deposed ಈ ಪ ಪಕರಣದ ವವವಹರದ ಸಕಬಕಧವಗ ನಪ 2 ರಕದ 4 ರಕರ ಕ ಗಳನರ ನ ಭದಪತಗಗ ಪಡದರರತಕರವಕದರ ಸರಯಲಲ. ಸಕ ಮರಕದರವರದರ ಆರನರಪತನರ ಫರರಧ ಕಕಪನಯ direct customer ಆದ ಕರಣ ಆತನಕದ ಭದಪತಗಗ ರಕರ ಕ ಗಳನರ ನ ಪಡದರಕನಕಡಲಲ ಆದರ, ಫರರಧ ಕಕಪನಯ distributors ಗಳಕದ ಮತ ತ ರಕರ ಕ ಗಳನರ ನ ಭದಪತಗಗ ಪಡದರರತಕರವಕದರ ನರಡದರರತಕರ. The said testimony of PW1, goes to show that complainant company is in the habit of obtaining cheques from its customrs /distributors towards security. Therefore, stand taken by the accused that the subject cheques were issued to the complainant company in the year 2022, becomes more probable. As such it could be concluded that the accused had issued Ex.P2 to P4 cheques to the complainant company towards security.
V. AUTHORITY OF PW1:
35. It is to be noted that, in order to establish that PW1 K. MANJUNATH is the Authorized Signatory of the complainant company and that he is authorized to file the 40 C.C. No. 12079/2015 complaint and also depose on behalf of the complainant company, he has produced Ex.P1 Board Resolution dated:
12/08/2021. It is to be noted that, during cross- examination dated: 01/09/2022 at paragraph 11, PW1 admitted that Ex.P1 is signed by One Shwetha Gupta on 15/11/2021 and pleaded ignorance that he has not produced any document to show that he is the Authorized Representative of the complainant company. That apart, PW1 admitted that no Directors of the complainant company have signed at Ex.P1 and he voluntarily deposed that Company Secretary is authorized to sign at Ex.P1 document and notably, no such document is produced by PW1. That apart, at paragraph 12, PW1 admitted, that whenever he signs any document on behalf of the complainant company there should be seal of the complainant company along with his signature and admitted there is no seal of the complainant company in complaint and in his affidavit filed in lieu of examination in chief. PW1 denied that he is not having proper authority to depose on behalf of the complainant company. 41 C.C. No. 12079/2015
36. It is to be noted that, there is no seal of the complainant company forthcoming in the complaint as well as affidavit of PW1 filed in lieu of examination in chief and though Ex.P1 Resolution dated: 12/08/2021 is signed on 15/11/2021, the complaint is filed on 23/07/2014 by the very same PW1 and on careful scrutiny of Ex.P1 it is clearly mentioned that the complainant company has resolved that in supersession of the earlier resolution passed by the board at its meeting dated:06/06/2014 & 06/11/2017 and in that regard with the consent of the Board of Directors of the complainant company PW1 was authorized to file complaint against the accused. The complainant company has not produced resolution dated: 06/06/2014 or any other documents to establish its company secretary by name Swetha Guptha was authorized to sign Ex.P1 document and notably, Ex.P1 is not signed by any of the Directors of the complainant company.
42 C.C. No. 12079/2015
37. That apart, as discussed, PW1 in his cross- examination, dated: 16/07/2022, at paragraph 6, PW1 deposed that he has not enquired the said Jayakumar whether the accused had issued Ex.P2 to P4 signed blank cheques towards security or not and deposed he could not enquire with the said Jayakumar as the said Jayakumar has left the job. PW1 deposed as the Ex.P2 to P4 cheques are issued by the accused to Jayakumar, he has no personal information whether the said cheques were blank or not and that whether the same was issued towards security in respect of the transaction in question and the place where the Ex.P2 to P4 cheques were issued. It is to be noted that, PW1 is the Representative of the complainant company and at paragraph 3 he has deposed that he is deposing before the court on the basis of the documents and admitted that he has no personal information about the transaction in question. The said testimony of PW1 makes it clear that PW1 is only deposing before the court on the documents available on record and that he has no personal knowledge about the case. 43 C.C. No. 12079/2015
38. In the ruling relied on by the accused reported in (2022) AIR (SC) 1315 decided between M/s. TRL KROSAKI REFRACTORIES LTD., V/s M/s. SMS Asia Private Ltd., and another, the Hon'ble Apex Court at paragraph 17, held that "the position that would emerge is that when a company is the payee of the cheque based on which a complaint is filed U/sec. 138 of the Negotiable Instruments Act, the complainant necessarily should be the company which would be represented by an employee who is authorized. Prima-facie, in such a situation the indication in the complaint and the sworn statement (either orally or by a affidavit) to the effect that the complainant (Company) is represented by an authorized person who has knowledge, would be sufficient. The employment of the terms "specific assertion as to the knowledge of the Power of attorney holder" and such assertion about knowledge should be "said explicitly" as stated in A.C. Narayanan V/s State of Maharastra and Another (2014) 11 SCC 790 cannot be understood to mean that the asertion should be in any particular manner, much less only in the manner understood by the accused in the case. All that is necessary is to demonstrate before the learned Magistrate that the complaint filed is in 44 C.C. No. 12079/2015 the name of the "Payee" and if the person who is prosecuting the complaint is different from the payee, the authorization there for and that the contents of the complaint or within his knowledge. When the complainant / Payee his company, an authorized employee can represent the company. Such averment and prima-facie averment is sufficient for the learned Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person procecuting the complaint not being authorized or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial".
In the light of the principle laid down above, it is required to be noted that, in the affidavit filed by PW-1 in lieu of sworn statement / examination in chief, there is no assertion about the knowledge of PW1 about the transaction in question. It is only in the complaint at the bottom, it is mentioned that the statements made at paragraph 1 to 11 are true to the best of his knowledge.
45 C.C. No. 12079/2015
39. That apart, in the ruling reported in A.C. Narayanan V/s State of Maharastra and Another reported in (2014) 11 SCC 790, the Hon'ble Apex Court has held that there is no mention in the complaint or affidavit as to when and what manner the company had authorized its General Manager (Accounting) to represent the company to file the complaint. It is further held that, there is no averment in the complaint as to whether the General Manager (Accounting) had knowledge about the transaction or he was a witness to the transaction. It was also held that, neither any resolution of the Board of the Directors of the complainant company nor any authorization of the company in favour of the person representing it in the complaint was filed for perusal of the Magistrate. In the said ruling the Hon'ble Apex Court at paragraph 26, has held that, it is required by the complainant to make specific assertion as to the knowledge of Power of Attorney Holder in the said transaction explicitly in the complaint and the Power of 46 C.C. No. 12079/2015 Attorney Holder who has no knowledge regarding the transaction cannot be examined as a witness in the case. In the light of the principle laid down above, on careful scrutiny of the complaint, though there is mention that PW1 is authorized to file the complaint, there is no specific assertion either in the complaint or in the affidavit filed by PW1 in lieu of sworn statement that PW1 had knowledge about the transaction in question or that he had witnessed the transaction.
40. That apart, PW1 in his cross-examination has specifically admitted that he has no personal information about the transaction in question. It is worth to note that, Ex.P1 Authorization letter is dated: 12/08/2021 and the instant complaint was filed on 23/03/2014 and notably, on the said date the complainant company has produced copy of the Resolution dated: 25/05/2013 and for the best reasons known to the complainant company, the certified true copy of the said document was not marked by the complainant 47 C.C. No. 12079/2015 company. As such it could be concluded that, PW1 is not having proper Authority to depose on behalf of the complainant company as he had no personal knowledge about the transaction in question and also as there is no specific assertion in his affidavit filed in lieu of sworn statement / examination in chief about his knowledge in respect of the transaction in question. As such it could be concluded that the accused has raised a probable defence that the subject cheques were not issued by him to the complainant company, towards discharge of legally enforceable debt and thereby he has successfully rebutted the presumption as contemplated U/sec. 139 of the Negotiable Instruments Act by placing acceptable evidence. Accordingly, I answer Point No.1 & 2 in the Negative.
41. Point No.3 :- For the foregoing reasons, I proceed to pass the following:-
48 C.C. No. 12079/2015
OR D E R In exercise of power conferred U/sec. 255(1) of Code of Criminal Procedure the accused No.1 & 2 are acquitted for the offence punishable U/s.138 of N.I. Act.
Bail bonds of accused No.1 & 2 shall be in force for a period of Six months.
(Dictated to the stenographer, directly on computer , corrected and then pronounced in open court by me on this the 7 th day of January, 2023) (H. Satish) XXVII A.C.M.M., Bengaluru.
ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : SRI. K. MANJUNATH Documents marked on behalf of the complainant Ex.P1 : Authorization letter Ex.P2 to 4 : Cheques Ex.P5 & 6 : Bank endorsement Ex.P7 : Copy of Notice Ex.P8 : Postal receipts Ex.P9 & 10 : Postal acknowledgments Ex.P9 (a) P10(a): Copies of notices contained in Ex.P9 & 10, Ex.P11 to 19 : Invoices Ex.P20 : Account Statement.
49 C.C. No. 12079/2015Witnesses examined on behalf of the accused:
DW1 : E. Madhusudhan Rao Documents marked on behalf of the accused:
Ex.D1 : Account Statement
XXVII A.C.M.M
Bengaluru.
50 C.C. No. 12079/2015
07/01/2023
Comp: Sri. S.S Adv.,
Accd: Sri. SPK Adv.,
For Judgment.
Complainant and counsel
absent.
No representation
Accused and counsel
absent.
(Order typed vide separate sheet)
OR DE R
In exercise of power conferred U/sec. 255(1) of Code of Criminal Procedure the accused No.1 & 2 51 C.C. No. 12079/2015 are acquitted for the offence punishable U/s.138 of N.I. Act.
Bail bonds of accused No.1 & 2 shall be in force for a period of Six months.
(H. Satish) XXVII A.C.M.M., B engaluru.