Bangalore District Court
M/S. Reddy'S Chits Private vs Mr. Madan. R on 9 March, 2023
1 C.C. No. 6473/2021
KABC030192182021
Presented on : 16-03-2021
Registered on : 16-03-2021
Decided on : 09-03-2023
Duration : 1 years, 11 months, 24 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 9 th day of March, 2023
C.C. NO.6473/2021
Complainant M/s. REDDY'S CHITS Private
Limited,
Registered office at
No.85, South End Road,
Basavanagudi,
BENGALURU 560004.
Represented by its Managing
Director / Foreman
Sri. Rajeev Reddy. V
(Rep by Sri. P.P. Jayakumara
Adv.)
V/s.
Accused Mr. MADAN. R
S/o. Rohithashwa. H.V
No.19th, 9th Main Cross,
Krishna Nagar,
J.P. Nagar, 8th Phase,
BENGALURU 560078.
Also at:
2 C.C. No. 6473/2021
MR.MADAN. R
S/o. Rohithashwa. H.V
Coral Aquarium
No.527, 17th Cross,
35th Main, J.P. Nagar,
6th Phase,
BENGALURU 560078.
(Reptd by Sri. S. G Adv.,)
Offence U/s.138 of Negotiable
Instruments Act.
Plea of the Accused claims to be tried
accused
Final Order CONVICTED
Judgment Date 09/03/2023
****
JUDGMENT
The Complainant Company has filed complaint U/Sec.200 of Code of Criminal Procedure against the Accused for the offence punishable U/Sec.138 of Negotiable Instrument Act.
2. The facts germane for disposal of the instant complaint can be summarized as per following:-
3 C.C. No. 6473/2021
It is the case of the Complainant Company that it is registered under the Company's Act of 1956 and it is engaged in the business of promoting and conducting chit business as per the provisions of Chit Funds Act of 1982 and accused is the subscriber to the chit group bearing No 10L6, Ticket No.05 for the chit value of Rs.10,00,000/- and amount of Rs. 40,000/- was to be paid for a period of 25 months. It is stated that the accused participated in the Chit auction held on 15/07/2019 and was declared as prize bidder and received prize money of Rs.7,00,000/- on 30/07/2019 from the complainant company after deducting bid amount and standard deductions.
3. It is also stated that the accused along with others executed On demand promissory note, surety form, guarantee bond and other relevant documents in favour of Complainant company towards the amount received by the accused and the accused paid only Rs.5,86,600/- as against Rs.10,00,000/- as per Chit 4 C.C. No. 6473/2021 agreement and thereafter, he defaulted in making balance payment, which constrained the complainant company to cause notice dated: 21/10/2020 against the accused and his guarantors. Thereafter, the accused personally visited office of the complainant company and towards discharge of liability due and payable, the accused issued cheque bearing No.836640 dated : 10/11/2020 for Rs.2,50,000/- in the name of complainant company, drawn on Corporation Bank, Konankunte Branch, Bengaluru in favour of the complainant company towards part chit dues.
4. It is stated that the complainant company presented the said cheque for encashment on 11/11/2020 through its banker Punjab and Sind Bank(PSB), J.C.Road Branch, Bengaluru and the same got dishonoured and returned with an endorsement dated: 11/11/2020 stating " FUNDS INSUFFICIENT " . Thereafter, the complainant company got issued legal notice dated: 30/11/2020 to the accused calling upon 5 C.C. No. 6473/2021 him to repay the amount covered under the aforesaid cheque within 15 days from the date of receipt of notice and the same was served upon the accused on 03/12/2020. After receipt of notice, the accused has neither repaid the amount covered under the aforesaid cheque nor replied to the said notice and thereby accused committed offence punishable U/Sec.138 of Negotiable Instrument Act. Hence, this complaint.
5. The sworn statement of the Managing Director of the complainant company by name Rajeev Reddy. V was recorded. As the complainant company had complied the mandatory requirements of Section 138 of Negotiable Instrument Act, the Court issued summons to the Accused. After service of summons, Accused entered appearance and was enlarged on bail.
6. 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 6 C.C. No. 6473/2021 explained, to which, accused pleaded not guilty and submitted he has defense to make.
7. In order to prove the case, the Managing Director of the complainant company by name Rajeev Reddy. V got himself examined as PW.1 and got marked Ex.P1 to Ex.P18 documents.
8. 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 has not let in oral evidence and no documents are marked on his behalf.
9. Heard arguments on both sides. I have perused the materials on record.
10. The following points arise for my determination:
7 C.C. No. 6473/2021
(1) Whether the complainant
company proves that towards
discharge of liability due and
payable the accused issued cheque bearing No. 836640 dated :
10/11/2020 for Rs.2,50,000/- in the name of complainant company, drawn on Corporation Bank, Konankunte Branch, Bengaluru in favour of the complainant company?
(2) Whether the complainant
company proves that accused has
committed offence punishable
U/Sec.138 of Negotiable Instrument Act?
(3) What order?
11. My answer to the above points is as per following:-
Point No.1 & 2 : In the Affirmative Point No.3 : As per the final order, for the following:-
REA S ON S
12. Point No.1 & 2:- In-order to prove the case, the Managing Director of the complainant company by name Rajeev Reddy V got himself examined as PW1 and the affidavit filed by her 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 8 C.C. No. 6473/2021 India, reported in (2014) 5 SCC 590 (Indian Bank Association & Ors V/s. Union of India & Ors). The complainant firm got marked Ex.P1 to P18 documents through PW1.
13. The complainant company has exhibited the following Ex.P1 to P18 documents. Ex.P1 is the True copy of Certificate of Incorporation, Ex.P2 is the Extract of Minutes of Meeting of the Board of Directors of the complainant company held on 30/12/2019, Ex.P3 is the Authorization Letter dated: 04/01/2020, Ex.P4 is the True copy of Chit Prior Sanction order, Ex.P5 is the True copy of the Chit Commencement Certificate, Ex.P6 is the On demand promissory note, Ex.P7 is the Cash Voucher, Ex.P8 is the Chit Agreement, Ex.P9 is the Guarantee Bond, Ex.P10 is the Surety Proposal Form, Ex.P11 is the True copy of Chit Ledger Extract, Ex.P12 is the Cheque dated:
10/11/2020, Ex.P13 is the Bank endorsement dated:
11/11/2020, Ex.P14 is the copy of Legal notice dated:9 C.C. No. 6473/2021
30/11/2020, Ex.P14(a) & (b) are the Postal receipts, Ex.P15 & 16 are the Postal acknowledgements, Ex.P17 is the Returned RPAD Cover, Ex.P17(a) is the copy of notice contained in Ex.P17 RPAD cover, Ex.P18 is the True copy of legal notice dated: 21/10/2020.
14. On careful scrutiny of the documents produced by the complainant company, prima-facie it goes to show that the complainant company has discharged initial burden of proving issuance of cheque, presentation of Ex.P12 cheque, bouncing of cheque, issuance of notice and its service. 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 10 C.C. No. 6473/2021 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 ".
15. In the aforesaid ruling the Hon'ble Apex court has held that once the complainant establishes the bouncing of cheque, then it is for the accused to disprove the allegations and also it is for him/her to rebut the presumption as contemplated under section 139 of Negotiable Instrument Act by placing acceptable evidence.
16. It is to be noted that, accused has not stepped into the witness box to disprove the case of the complainant company. The Hon'ble Apex court in the ruling reported in 2019 SCC Online SC 491 decided between Basalingappa V/s Mudibasappa at para 25(3) (4) and (5) has categorically held that :
to rebut the presentation, it is open for the accused to rely on evidence led by him or the accused can rely on the material submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the material brought on record by the parties, but also by reference to the circumstances which 11 C.C. No. 6473/2021 they rely and also held, it is not necessary for the accused to come in the witness box in support of defence, section 139 imposes an evidenciary burden and not a persuasive burden.
In the light of the principle laid down above, it is not necessary for the accused to step into the witness box to disprove the case of the complainant.
17. It is required to be noted that, the complainant company has produced Ex.P4 to 11 documents to establish the transaction in question. The accused has not cross examined PW1 and he has not disputed the said documents and the transaction in question and the accused has not disputed his signature at Ex.P12 cheque and he has also not disputed that Ex.P12 cheque does not belongs to him. That apart, the accused has not even produced any materials before the court to disprove the transaction in question.
18. The complainant company has issued Ex.P14 Legal notice to the accused and the same was served 12 C.C. No. 6473/2021 as per Ex.P15 & 16 and the accused has not disputed issuance of Ex.P14 notice or that the address mentioned at Ex.P14 Legal notice, Ex.P15 & 16 Postal acknowledgement does not belongs to him. It is required to be noted that, on 09/03/2023, both the complainant and accused filed Joint Memo and submitted that parties have settled the matter. As per the joint memo, the accused has agreed to pay sum of Rs.2,10,000/- to the complainant in 15 installments. That apart, both parties and counsel submitted that they do not have objection to pronounce judgment for the amount agreed.
19. It is to noted that, in the ruling reported in 2021 SCC Online SC 925 decided between Jimpex Pvt Ltd., V/s Manoj Goel decided on 08/10/2021, the Hon'ble Apex Court at para 38 has held that:
when a complainant party enters in to a compromise with the accused, it may be for a multitude of reasons, higher compensation, faster recovery of money, uncertainty of trial and strength of the complainant among others. A complainant enters in to a settlement with open eyes and undertakes the 13 C.C. No. 6473/2021 risk of the accused failing to honour the cheque issued pursuant to settlement, based on certain benefits that the settlement agreement postulates. Once parties have voluntarily entered in to agreement and to abide by the consequence of non compliance settlement agreement, they cannot be allowed to reverse the effect of the agreement by pursuing the both original complaint and the subsequent complaint arising such non-compliance. The settlement agreement subsumes original complaint.
In the light of the principle laid down above, as the complainant and accused have filed memo stating that they have settled the matter, the accused cannot deviate from his stand and he is liable pay the amount as agreed by him.
20. That apart, the material placed on record by the complainant company discloses that the complainant company has complied the mandatory requirements of section 138 of Negotiable Instrument Act and as the accused has not cross examined PW1 to disprove the case of the complainant and also taking note of the joint memo filed by accused, it could be concluded that accused has failed to rebut the presumption as contemplated U/sec 139 of Negotiable 14 C.C. No. 6473/2021 Instrument Act by placing acceptable evidence. However, taking note of the settlement arrived between the parties as per Joint Memo dated: 09/03/2023, this court is of the view that there is no impediment for this court to direct the accused to make the payment as agreed by him. Accordingly, I answer the Point No.1 & 2 in the Affirmative.
21. Point No.3 :- In view of my findings to the Points No.1 & 2, I proceed to pass the following:-
O R DE R In exercise of power conferred U/sec. 255(2) of Code of Criminal Procedure, the accused is convicted for the offence punishable U/s.138 of N.I. Act and sentenced to pay fine of Rs.2,10,000/-.
In default of payment of the said fine amount, the accused shall undergo simple imprisonment for a period of Three months.15 C.C. No. 6473/2021
Out of the said fine amount, an amount of Rs.2,10,000/- shall be paid to the complainant.
(Dictated to the stenographer directly on computer, corrected and then pronounced in open court by me on this the 9th day of March, 2023) (H. Satish) XXVII A.C.M.M., Bengaluru.
ANNEXURE Witnesses examined on behalf of the complainant:
PW2 : RAJEEV REDDY. V Documents marked on behalf of the complainant Ex. P1 True copy of Incorporation certificate. Ex. P2 Extract of Minutes of Meeting of the Board of Directors of the complainant company held on 30-12-2019.
Ex. P3 Authorization Letter.
Ex. P4 True copy of Chit prior sanction order.
Ex. P5 True copy of Chit commencement
certificate.
Ex. P6 On demand promissory note.
Ex. P7 Cash voucher.
Ex. P8 Chit agreement.
Ex. P9 Guarantee Bond.
Ex. P10 Surety proposal form.
Ex. P11 Chit Ledger extract.
Ex. P12 Cheque.
Ex. P12(a) Signature of the accused.
Ex. P13 Bank Endorsement.
Ex. P14 Copy of Legal notice dt:30-11-2020.
16 C.C. No. 6473/2021
Ex.P14(a) Postal receipts
& (b)
Ex. P15 & Postal acknowledgements
16
Ex.P17 Returned RPAD Cover
Ex.P17(a) copy of notice contained in Ex.P17
RPAD cover
Ex.P18 True copy of legal notice dated:
21/10/2020.
Witnesses examined on behalf of the accused:
-NIL-
Documents marked on behalf of the accused:
-Nil-
XXVII A.C.M.M Bengaluru.17 C.C. No. 6473/2021
Again case is called out. Complainant and counsel absent.
Accused and counsel absent.
By virtue of provision contained in Sec.353(6) of Cr.P.C., judgment can be pronounced in the absence of accused if it is of Acquittal or fine.
(Order typed vide separate sheet) O RD ER In exercise of power conferred U/sec. 255(2) of Code of Criminal Procedure, the accused is convicted for the offence punishable U/s.138 of N.I. Act and sentenced to pay fine of Rs.2,10,000/-.
In default of payment of the said fine amount, the accused shall undergo simple imprisonment for a period of Three months.
Out of the said fine amount, an amount of Rs.2,10,000/- shall be paid to the complainant.
(H. Satish) XXVII A.C.M.M., Bengaluru.