Bangalore District Court
M/S.The Giftz vs Beknownst Ecormmerce Pvt Ltd on 28 March, 2018
IN THE COURT OF THE XXVII ADDL., CHIEF
METROPOLITAN MAGISTRATE, BANGALORE.
Present: Sri.N.Muniraja. B.A., L.L.B.,
Dated: This the 28th Day of March 2018.
C.C.No.21816/2017
Complainant M/s.The Giftz,
Charan Nivas,
No.68/1, 4th Cross,
Nehru Nagar,
Bengaluru-560020
A Partnership Firm,
Rep by its partner,
Sri. Deepen Praful Shah,
Aged about 33 years,
S/o.late Sri.Praful P Shah,
(Reptd by Sri.VPM.,Adv)
Accused 1. Beknownst Ecormmerce Pvt Ltd.,
Rep by its Managing Director,
M/s. Subhas Kumar,
The accused No.2
2. Sri.Subhash Kumar,
Major Managing Director of
M/s.Beknonst Ecommerce Pvt Ltd.,
And Prop; of M/s. Lytron Dynamic,
Both at:
No.355/7, 2nd Cross,
Raviprakash Nagar,
Konena Agrahara,
Bengaluru-560 017.
(Reptd by Sri.AR.Adv)
Offence U/s.138 of Negotiable Instruments
Act.
Plea of the accused Pleaded not guilty
Final Order Convicted
Judgement Date 28.03.2018
*****
2 C.C.No.21816/2017
JUDGEMENT
The complainant partnership firm filed this complaint against the accused for the offence punishable U/s.138 of the Negotiable Instruments Act.
2. Brief facts of the complainant case are as follows:
The complainant is a partnership firm dealing in corporate gift items at Bengaluru. The accused No.1 is a company and Accused No.2 is its Managing Director and he is incharge and responsible for conduct of day to day business affairs of the accused No.1 company. The accused No.1 company manufactures and dealing in gift items. The complainant had placed an order to the accused No.1 company for supply of FUZO LYTE Books and paid an advance amount of Rs.8,25,000/- on various dates by way of transfer of money through bank and accused No.1 company duly acknowledged the said amount. But the accused No.1 company did not 3 C.C.No.21816/2017 execute the whole order placed by the complainant. The accused No.1 company had belatedly supplied the goods to the complainant worth of Rs.4,92,604/- only, between 7.12.2016 to 26.12.2016 under various invoices and failed to supply the remaining goods as ordered by the complainant. The accused No.1 company had performed only part performance of contract and neglected to perform the remaining part of contract. Due to non performance of contract by the accused No.1 company, the complainant has suffered huge loss in the business and demanded to refund the balance advance amount holding by the accused No.1 together with interest thereon at Rs.24% and damages for loss suffered by the complainant. Out of the balance advance amount of Rs.3,32,396/- the accused No.1 company had repaid Rs.1,00,000/- by way of RTGS it is still due to the complainant for a sum of Rs.2,32,396/- towards principle amount. After persistent demands by the complainant, the accused No.2 who is the Managing 4 C.C.No.21816/2017 Director of the accused No.1 company issued cheques bg.Nos.000286 dated 8.5.2017, 000287 dated 25.5.2017 & 000289 dated 2.7.2017 for a sum of Rs.50,000/- each and cheque bg.No.000288 dated 18.6.2017 for a sum of Rs.1,00,000/- drawn on ICICI Bank, Domlur Branch, Bangalore infavour of the complainant. The complainant presented the said cheques on 3.7.2017 for collection through State Bank of India, Vyalikaval Branch, Bangalore and the said cheques dishonoured on 5.7.2017 as funds insufficient. After dishonour of the cheques the complainant got issued notice dated 10.7.2017 to the accused through registered post demanding to pay the cheques amount within 15 days from the date of receipt of the notice and the said notice served to the accused on 13.7.2017. Despite of service of notice, the accused has not paid the cheques amount.
Hence, this complaint.
5 C.C.No.21816/2017
3. The accused No.1 is the company and accused No.2 is Managing Director of the accused No.1 company. The accused appeared through their advocate and enlarged on bail. Substance of accusation read over to the accused and he pleaded not guilty and claims to be tried. The complainant along with complaint filed evidence affidavit and got marked 25 documents as per Ex.P.1 to P.25. In view of the decision of the Hon'ble Supreme Court of India reported in (2014) 5 SCC 590 (Indian Bank Association and Ors Vs. Union Bank of India and Ors) The said evidence holds good. In view of the application filed U/s.145(2) of N.I Act, the accused permitted for cross-examination of the complainant. On closure of the complainant evidence, statement of the accused recorded as required U/s.313 of Cr.P.C. but he has denied the incriminating circumstances which appears against him in the complainant side evidence. The accused not led any defence evidence nor got marked any documents.
6 C.C.No.21816/2017
4. Heard the learned counsel for the complainant and accused and I perused the records.
5. The points that would arise for my consideration are as follows:
(i) Whether the complainant proves that the accused issued Ex.P.15 to 18 cheques towards discharge of any debt or liability and the said cheques dishonoured for want of sufficient funds in the account of the accused.?
(ii) Whether the complainant proves that after dishonour of cheques, issued notice to the accused in compliance of Sec.138(b) of N.I Act?
(iii) What order?
6. My answer to the above points are as follows:-
Point No.1 : In the Affirmative Point No.2: In the Affirmative Point No.3: As per the final order, for the following.7 C.C.No.21816/2017
REASONS
7. Point No.1 : It is the case of the complainant that, an order was placed to the accused No.1 company for supply of FUZO LYTE Books and paid an advance amount of Rs.8,25,000/- and the accused No.1 company supplied the goods worth of Rs.4,92,604/- and failed to supply the remaining goods as ordered by the complainant. The accused No.1 company repaid a sum of Rs.1,00,000/- and still due of Rs.2,32,396/- towards principle and accused No.2 being the Managing Director of the accused No.1 company issued Ex.P.15 to P.18 cheques and on presentation the said cheques dishonoured as funds insufficient. PW1 who is the partner of the complainant firm in his chief examination affidavit has reiterated the contents of the complaint averments.
8 C.C.No.21816/2017
8. As borne out from the cross-examination of PW1, defence of the accused is that, he has not issued Ex.P.1 to P.18 cheques for this transaction and they were issued for the earlier transaction. The accused is liable to pay only Rs.2,32,396/- and not Rs.2,50,000/- and false case is filed against the accused to extract Rs.2,50,000/- from him.
9. On behalf of the accused in the cross- examination of PW1 not denied that Ex.P.15 to P.18 cheques drawn from the account of the accused and his signatures thereon. Further, the accused also not denied the issuance of Ex.P.15 to P.18 cheques to the complainant. Since the accused not denied the issuance of cheques and his signatures thereon, presumption U/s.139 of N.I Act raises infavour of the complainant that, the accused has issued the cheques infavour of the complainant towards discharge of any debt or liability. However the said presumption is rebuttable in nature and onus shifts 9 C.C.No.21816/2017 on the accused to rebut the said presumption. The Hon'ble Supreme Court of India, in the decision reported in (2009) 2 SCC 513 (Kumar Exports Vs. Sharma Carpets) has clearly observed that, presumption literally means taking as true without examination or proof and also held that, the mandatory presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is to say that cheque was not issued for consideration and in discharge of any debt or liability. In other words, onus shifts on the accused to rebut the mandatory presumption raised in favour of the complainant.
10. The learned counsel for the complainant has relied upon the following decisions:
1. 1999 Cri.L.J 4606 (SC) (K.Bhaskaran Vs. Sankaran Vaidhyam Balan & Anr).
2. (2001) 8 SCC 458 (K.N.Beena Vs. Muniyappan & Anr) 10 C.C.No.21816/2017
3. 2001 SCC (Cri) 960 (Hiten P Dalal Vs. Bratindranath Bannerjee).
4. ILR 2013 Kar. 1201 (Sri.M.Prakash Vs. Sri.Murugarajendra Co-op Bank Ltd.
Reptd by its Manager, Davangere).
5. 2015 AIR SCW 3040 (T.Vasanthkumar Vs. Vijayakumari).
6. 2004 (3) KCCR 1816 (L.Mohan Vs. V.Mohan Naidu) I have gone through the above cited decisions. In the above said decisions the Hon'ble Courts held that issuance of cheques and signature of the accused on the cheque not in dispute, presumption U/s.139 of N.I Act raises in favour of the complainant that, the accused drawn the cheque towards discharge of debt or liability and burden shifts on the accused to rebut the said presumption. The learned counsel for the complainant cited the decision reported in 2010 AIR SCW 2946 (Rangappa Vs. Mohan) wherein the Hon'ble Supreme Court of India held that existence of legally 11 C.C.No.21816/2017 recoverable debt or liability is also matter of presumption U/s.139 of N.I Act. With this background of the preposition of law, let me appreciate whether the accused is able to rebut the presumption available U/s.139 of N.I Act in favour of the complainant.
11. The complainant produced Ex.P.1 certified copy of partnership deed to show that the complainant is partnership firm. During the course of cross- examination of PW1 on behalf of the accused not disputes the said Ex.P.1 document and the complainant is a partnership firm. On behalf of the complainant produced Ex.P.2 to 11 invoices and Ex.P.12 to P.14 E-sugam forms to show the transaction between the complainant and accused. In the entire cross-examination of PW1 on behalf of the accused not disputes the fact that the complainant placed an order to the accused company for supply of FUZO LYTE Books and payment of 12 C.C.No.21816/2017 advance amount of Rs.8,25,000/- and supply of the materials worth of Rs.4,92,604/- and repayment of Rs.1,00,000/- by the accused. To the complainant. Therefore, there is no dispute between the complainant and accused about the transaction narrated in the complaint.
12. The contention of the accused is that, the accused is liable to pay only Rs.2,32,396/- to the complainant and not of Rs.2,50,000/-. Ofcourse PW1 has specifically denied the suggestion in this regard. No doubt it is true that the complainant in the complaint asserted that the accused No.1 company is due of Rs.2,32,396/- towards principle amount. But it is pertinent to note that, in para No.6 of the complaint, it is clearly averred that, due to non performance of contract by accused No.1 company, the complainant has suffered loss in its business and the complainant demanded the accused No.1 company to refund the balance advance payment 13 C.C.No.21816/2017 together with interest thereon at Rs.24% p.a. PW1 in the cross-examination also stated that the outstanding due from the accused is of Rs.2,32,396/- towards principle and the accused has issued the cheques for Rs.2,50,000/- towards principle as well as interest amount. In the course of cross-examination of PW1 on behalf of the accused not denied the factum of demand made by the complainant for refund of the balance advance amount of Rs.2,32,396/- with interest at the rate of Rs.24% p.a and issuance of cheques in question to the complainant towards principle as well as interest amount. Therefore, it is clear that the accused issued Ex.P.15 to P.18 cheques to the complainant towards outstanding principle amount of Rs.2,32,396/- and interest thereon.
13. In the course of cross-examination of PW1 on behalf of the accused contended that, the accused has not issued Ex.P.15 toP.18 cheques for this 14 C.C.No.21816/2017 transaction and they were issued for the earlier transaction. Ofcourse, PW1 has specifically denied the suggestion in this regard. It is pertinent to note that on behalf of the accused in the cross- examination of PW1 not whispered about the earlier transaction to which Ex.P.15 to P.18 cheques were issued. Further, the accused has not placed any materials to show the earlier transaction with the complainant.
14. The learned counsel for the complainant relied upon the decision of the Hon'ble High Court of Andhra Pradesh reported in 2006 Cri.L.J Gorantla Venkateshwara Rao Vs. Kolla Veera Raghava Rao & Anr) wherein it is held that failure of accused in giving reply to legal notice issued by the complainant is one of strong circumstances to draw an inference that, the accused borrowed amount from the complainant and cheque was issued towards part payment of legally enforceable debt. 15 C.C.No.21816/2017 Here is a case the accused in the cross-examination of PW1 not denied the service of notice issued by the complainant after dishonour of the cheque. If the accused not issued Ex.P.15 to P.18 cheques for this transaction and they were issued for earlier transaction and he is liable to pay Rs.2,32,396/- and not of Rs.2,50,000/- to the complainant, the accused could have issued reply notice to the notice issued by the complainant by raising the above said contentions. But the accused has not issued any such reply notice for the reasons best known to him. Therefore, adverse inference can be drawn against the accused.
15. The learned counsel for the complainant has relied upon the decision reported in 2001 (4) Kar.L.J 122 (S.R.Muralidar Vs. Ashok.G.Y). As per the above said decision of the Hon'ble High Court of Karnataka Sec.20 of the Negotiable Instruments Act gives an authority to the holder of the Negotiable 16 C.C.No.21816/2017 Instrument to fill the incomplete Instrument. He relied upon another decision reported in 2006 Cri.L.J 3760 (Smt.Umaswamy Vs. K.N.Ramanath). As per the said decision of the Hon'ble High Court of Karnataka even cheque issued for security purpose, Sec.138 of N.I Act attracts. Here is a case, it is not the defence of the accused he had issued blank cheques and the complainant filled the amount in the cheques and the cheques were issued for security purpose.
16. As noticed above, there is no dispute about the transaction between the complainant and accused. Even as admitted in the cross-examination of PW1 by the accused that the accused is due of Rs.2,32,396/- to the complainant. PW1 has specifically stated that the accused is due of Rs.2,32,396/- towards principle amount and the accused issued the cheques for Rs.2,50,000/- towards principle as well as interest amount. Therefore, the complainant by 17 C.C.No.21816/2017 adducing oral as well as documentary evidence proved that the accused has issued Ex.P.15 toP.18 cheques towards discharge of the liability.
17. As per Ex.P.19 to 22 bank endorsement the cheques in question dishonoured for want of sufficient funds in the account of the accused. It is not the defence of the accused that, at the time of presentation of Ex.P.15 to P.18 cheques for realization there were sufficient funds in the account of the accused. As per Sec.146 of N.I Act there is a presumption with respect to the bank endorsements. In view of my above discussion. In view of my above discussion, I answer Point No.1 in the affirmative.
18. Point No.2:- It is the case of the complainant that, after dishonour of the cheques, issued notice to the accused on 10.7.2017 through RPAD demanding the accused to pay the cheques amount and the said notice served to the accused on 13.7.2017 and inspite of service of notice, the accused failed to pay 18 C.C.No.21816/2017 the cheques amount. The complainant to prove the factum of issuance of notice to the accused through RPAD and service of the said notice has produced Ex.P.23 office copy of the legal notice dated 10.7.2013, Ex.P.24 and 25 postal acknowledgements. In the cross-examination of PW1 on behalf of the accused not denied the service of notice to the accused issued by the complainant after dishonour of the cheques. The learned counsel for the complainant cited the decision reported in (2007) 6 SCC 555 (C.C.Alavihaji Vs. Palapatty Muhammed & Anr) wherein the Hon'ble Supreme Court of India held that, there is no need to make averments in the complaint to the effect that service of notice evaded by the accused or the accused had a role to play in the return of the notice unserved for raising of presumption as to service of notice. Here is a case as observed above, the accused not denied the service of notice. The materials placed on record by the complainant clearly establishes that, after 19 C.C.No.21816/2017 dishonour of the cheques the complainant issued notice to the accused and the said notice served to the accused. Therefore, the complainant has complied the mandatory requirement of Sec.138(b) of the Negotiable Instruments Act. Hence, I answer Point No2. in the Affirmative.
19. Point No.3 :- In view of my findings on Point No.1 & 2 the complainant proved that the accused issued cheques to the complainant towards discharge of the liability and the said cheques were dishonoured for want of sufficient funds in the account of the accused and the complainant has complied the mandatory requirements of Sec.138(b) of N.I Act. It is not in dispute that the accused No.2 is the managing Director of the accused No.1 company and he is responsible for conduct of day to day business of the accused No.1 company. Therefore, the accused liable for punishment for the offence punishable U/s.138 of N.I Act. The learned 20 C.C.No.21816/2017 counsel for the complainant has cited the decision reported in 2002 (5) Kar.L.J 560 (Smt. Bhavani Vs. D.C.Doddarangaiah & Anr) wherein the Hon'ble High Court of Karnataka held that, amount of fine cannot below amount of dishonoured cheque and cost incurred by the drawee subject to limit of twice amount of dishonour cheque. The learned counsel for the complainant has relied upon the decision reported in ILR 2001 Kar. 3399 (Pankaj Bhai Nagji Bhai Patel Vs. State of Gujarat and Anr) wherein the Hon'ble Supreme court of India held that, in cheque bounce cases the Magistrate has power U/s.357 of Cr.P.C toward compensation to the complainant for which no limit is prescribed. The amount involved in Ex.P.15 to P.18 cheques is of Rs.2,50,000/-. If when the cheques were presented for encashment they were honoured the complainant would have utilized the said amount for its business purpose and would have got substantial profit. The act of the accused caused loss to the complainant 21 C.C.No.21816/2017 and dragged the complainant to the court. It is under these circumstances, the complainant has to be suitably compensated in the matter. In the result, I pass the following.....
ORDER
The complaint filed by the
complainant firm is allowed.
Acting U/s.255(2) of Cr.PC, the
accused convicted for the offence
punishable U/s.138 of N.I.Act and
sentenced them to pay fine of
Rs.2,75,000/-. In default of payment of said fine amount, the accused No.2 shall undergo simple imprisonment for a period of Six months.
Out of the said fine amount ordered to pay Rs.2,70,000/- to the complainant as compensation and the remaining amount of Rs.5,000/- shall go to the state.
(Dictated to the stenographer, transcribed by him, corrected and then pronounced in open court by me on this the 24th day of March, 2018) (N.Muniraja) XXVII A.C.M.M., Bangalore.
22 C.C.No.21816/2017ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : Deepen Praful Shah Documents marked on behalf of the complainant:
Ex.P.1 : Cc.of Partnership Deed Ex.P.2 to 11 : Invoices Ex.P.12 to 14 : E-sugam forms Ex.P.15 to 18 : Cheques
Ex.P.15(a) to 18(a) : Signatures of accused Ex.P.19 to 22 : Bank endorsements Ex.P.23 : Office copy of notice Ex.P.24 & 25 : Postal acknowledgements Witnesses examined on behalf of the accused:
Nil Documents marked on behalf of the accused:
Nil XXVII A.C.M.M Bangalore.23 C.C.No.21816/2017
Dt:28.03.2018 Complainant-VP adv., Accd-AR Adv.
For Judgement.
(Order typed vide separate sheet)
ORDER
The complaint filed by the
complainant firm is allowed.
Acting U/s.255(2) of Cr.PC, the
accused convicted for the offence
punishable U/s.138 of N.I.Act and
sentenced them to pay fine of
Rs.2,75,000/-. In default of payment of said fine amount, the accused No.2 shall undergo simple imprisonment for a period of Six months.
Out of the said fine amount ordered to pay Rs.2,70,000/- to the complainant as compensation and the remaining amount of Rs.5,000/- shall go to the state.
(N.Muniraja) XXVII A.C.M.M., Bangalore.24 C.C.No.21816/2017