Bangalore District Court
M/S.Rajesh Exports Ltd vs Mr.Sri Achappa on 25 March, 2021
IN THE COURT OF THE XXV ADDL. CHIEF
METROPOLITAN MAGISTRATE, AT BANGALORE
Dated this the 25th day of March , 2021
Present:
Sri H.K. Naveena, LL.M.
XXV Addl. Chief Metropolitan Magistrate,
Bangalore.
CC NO.6686/2015
Complainant : M/s.Rajesh Exports Ltd
Company Incorporated under the
Companies Act
and having its office at No.4,
Bhatavia Chambers
Kumara Krupa Road, Kumara Park
East,Bangalore 1.
Represented by its Authorized
representative
B.G.Mallikarjun
(By Sri KSK Advocate )
V/s
Accused : Mr.Sri Achappa
S/o Sri Ramamurthy
aged 48 years,
R/of # 283, 1st main, 15th A cross,
Sector 6
HSR Layout,
Bangalore 560 102 .
(By Sri SSK Advocate )
1. Date of 27.11.2014
Commencement of
offence
2 C.C.No.6686/2015
2. Date of report of 04.03.2015
offence
3. Name of the M/s. Rajesh Export Ltd,
Complainant
4. Date of recording of 12.03.2018
evidence
5. Date of closing of 19.01.2021
evidence
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused is Acquitted. .
8. Complainant KSK
Represented by
9. Accused defence by SSK
JUDGMENT
The complainant filed the complaint under Sec.200 Cr.P.C. against the accused for the offence punishable under Sec.138 Negotiable Instruments Act (For short N.I.Act).
2. The brief facts of the complainant case is as under:
The complainant company is engaged in the business of gold jewellery. That M/s.S.S.Jewellers was due to the complainant for a sum of Rs.3,40,00,000/ . The accused had 3 C.C.No.6686/2015 undertaken to pay the liability of M/s.S.S.Jewellers due to the complainant, accordingly provided a declaration and issued a cheque bearing No.055555 dt.27.11.2014 for Rs.3,40,00,000/ drawn on Allahabad Bank, BTM Layout branch, Bangalore in discharge of debt/liability towards the complainant company. As per the promise and assurance given by the accused, the complainant presented the cheque for realisation through its banker ie Canara Bank, Overseas Branch, Bangalore , said cheque returned dishonored for the reason "funds insufficient" on 09.12.2014. The complainant company consequently issued demand notice dt.22.12.2014 through RPAD to accused for payment of outstanding amount, demand notice was delivered on 24.12.2014. The accused inspite of receipt of legal notice neither replied to the notice nor paid said amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused.
Hence, this complaint.
4 C.C.No.6686/2015
3. After filing of the complaint, cognizance taken and recorded the sworn statement of the complainant. The complainant has complied all the statutory requirements under Sec.138 of N.I.Act. Thereafter, the case is registered against the accused and summons issued. The accused appeared through their Advocate and released on bail. Copy of the complaint furnished to the accused. Plea recorded and read out to the accused. The accused pleaded not guilty and claimed to be tried.
4. In support of the case, the Authorized Representative of the complainant is examined as PW 1 and got marked Eight documents as Ex.P.1 to Ex.P.8. After closure of the evidence of the complainant, 313 Cr.P.C statement of the accused has been recorded. The accused denied the version of the complainant evidence. The accused got himself examined as DW1 and got marked the documents as Ex.D.1 to D.49.
Heard arguments and perused the material on record.
5 C.C.No.6686/2015
5. On the basis of the contents of the complaint the following points arise for my consideration. :
1. Whether the complainant proves beyond reasonable doubt that the accused issued cheque bearing No. 055555 dt.27.11.2014 for Rs.3,40,00,000/ drawn on Allahabad Bank, BTM Layout branch, Bangalore to the complainant towards discharge of legal liability ?
2. Whether the complainant proves beyond reasonable doubt that the accused has committed the offence punishable under Sec.138 of N.I.Act?
[
3. What order ?
6. My findings to the above points are as follows:
Point No.1&2 :In the Negative.
Point.No.3 : As per final order for the following:
REASONS
7. Point Nos.1 & 2: Both these points are interconnected with each other. In order to avoid repetition of facts, both the points have been taken up together for consideration.
6 C.C.No.6686/2015
8. The complainant has filed complaint against the accused for the offences punishable under Sec.138 of N.I.Act.
It is the case of the complainant that M/s.S.S.Jewellers was due to the complainant for a sum of Rs.3,40,00,000/ . The accused had undertaken to pay the liability of M/s.S.S.Jewellers due to the complainant, accordingly provided a declaration and issued a cheque bearing No.055555 dt.27.11.2014 for Rs.3,40,00,000/ drawn on Allahabad Bank, BTM Layout branch, Bangalore in discharge of debt/liability towards the complainant company. As per the promise and assurance given by the accused, the complainant presented the cheque for realisation through its banker ie Canara Bank, Overseas Branch, Bangalore , said cheque returned dishonored for the reason "funds insufficient" on 09.12.2014. The complainant company consequently issued demand notice dt.22.12.2014 through RPAD to accused for payment of outstanding amount, demand notice was delivered on 7 C.C.No.6686/2015 24.12.2014. The accused inspite of receipt of legal notice neither replied to the notice nor paid said amount to the complainant.
9. The accused has taken specific defence that his son was the Proprietor of M/s.S.S.Jewelers and the franchise was opened on 01.05.2011 with signing an agreement, 3 mortgage deeds , declaration, GPA and bonds in favour of the complainant company. The said documents along with the registered mortgage deed was executed towards the gold of 17 kgs worth Rs.3,40,00,000/ received from the complainant. Three mortgage deeds were executed in favour of the complainant as security towards 17kgs of gold issued by the complainant. The complainant exports through on line portal and billing and inventory of stock which cannot be more than 17 kgs as per the agreement and over all issue of stock on on line portal was developed and handled by the complainant. The Log in portal ID was used by the complainant for billing and stock transfer. Every month the complainant's team used to audit the show 8 C.C.No.6686/2015 room of accused with value and detailed report given to both parties as per the agreement. The accused's son has intimated the complainant for closing of franchise agreement on December 2013 as the lock in period was about to finish in May ,2014 i.e three years of lock in period as per the agreement. That 3,647.7 gms of gold was returned to the complainant on 20.11.2014 and same is to be deducted from the stock and also returned 1,094.67 gms gold to the complainant authorised person by name Govindaraju on 25.11.2014 . The complainant has created false sale and stock transfer from their own on line plaftform to generate own cash balance and stock documents required in their own favourable month closing the franchise. Post dated cheque for Rs.3,40,00,000/ has been mentioned in the declaration and the same was issued as security at the time of agreement. The cheque has been misutilized and falsely posted to generate false cash balance in their account statement for Rs.6,80,00,000/. After the closing date of franchise, the stock of 22 carat 9 C.C.No.6686/2015 gold of 11,469 grams should be deducted in the total gold as alleged by the complainant . The accused's son was only liable for net weight of 6,726.63 gms of 22 carat gold.
10. In support of the complaint averments, the complainant has produced eight documents as ExP1 to P.8. Ex.P.1 is the Copy of Certificate of Incorporation . Ex.P.2 is Declaration. Ex.P.3 is the cheque. Ex.P.4 is the Cheque return memo. Ex.P.5 is the office copy of legal notice. Ex.P.6 is the postal receipt. Ex.P.7 is the letter issued by the Postal authority . Ex.P.8 is the C.C.of Board Resolution.
11. In support of accused contention, the accused has produced the documents which are marked as per Ex.D.1 to Ex.D 49. Ex.D.1 to 4 are the C.C. of the Diaries. Ex.D5 to D41 are the copies of consignment invoices. Ex.D42 is the C.C.of the Audit report. Ex.D.43 is E sugam form. Ex.D.44 to D46 are the Email copies. Ex.D.47 to D49 are C.C. of the orders of Commercial Tax Department. 10 C.C.No.6686/2015
12. On considering the averments of the complaint and the defence it is undisputed fact that the complainant and the accused's son A.Sunil Kumar who is the proprietor of SS Jewelers entered into franchise agreement dt.21.4.2011. It is also undisputed that the accused's son had executed a declaration in favour of the complainant for receipt of 17kgs of gold 22 carat gold from the complainant company. On the basis of declaration and agreement, the accused's son has received 17 kgs of gold from the complainant. As per the agreement between the complainant and the accused's son dt. 21.4.2011, the accused's son has to sell gold supplied by the complainant under the trade name Shubh Jewelers and deposit the sale proceeds into the bank account of the complainant. The accused's son was entitled for commission for sale of gold as per the agreement.
13. The accused has taken defence that his son has received 17 kgs of 22 carat gold from the complainant company as per the franchise agreement and declaration 11 C.C.No.6686/2015 and returned 3,647.7 gms of gold to the complainant on 20.11.2014 and also returned 1,094.67 gms to the complainant company and his son is only liable for 6,726.63 gms of 22 carat gold to the complainant company. The accused has issued a cheque only for security purpose and not for any debt or legal liability .
14. The Advocate for the complainant during the course of arguments fairly submits that the original franchise agreement is entered into between the complainant company - and the Proprietor of SS Jewelers by name Sunil Kumar , the complainant company has filed separate complaint against the SS Jewelers under Sec.200 Cr.P.C. for the offence punishable under Sec.138 of NIAct before this court in CC No.6687/2015 .
15. The Advocates for both sides have submitted that the court can take judicial notice of C.C.No.6687/2015 and C.C.No.6688/2015 which are connected to same transaction dt.21.4.2011. On perusal of the entire oral and documentary evidence of both the 12 C.C.No.6686/2015 sides, it is clear that the complainant and SS jewelers have entered into franchise agreement dt.21.4.2011. S.S.Jewelers is duly represented by its Proprietor by name A.Sunil Kumar. The complainant has presented separate case against S.S.Jewelers for the offence punishable under Sec.138 N.I. Act in relation to same transaction. All the cases are posted for judgment . Both the parties have lead evidence in all the cases. It is also undisputed fact that all three cheques produced by the complainant in three cases are also related to single transaction. Therefore, the oral and documentary evidence clearly disclose that all the three cases are related to single transaction..
16. It is pertinent to note that the accused in C.C.No.6687/2015 and in this case are the son and father. The accused has taken specific defence that he has issued the cheque only for security towards the gold received by his son under the franchise agreement dt.21.4.2011 . In this case the complainant has not produced the franchise 13 C.C.No.6686/2015 agreement. The complainant has produced the original franchise agreement in C.C. No.6687/2015 . On perusal of the franchise agreement , it is very clear that the accused in this case is neither guarantor nor surety to SS Jewelers. The complainant has produced Declaration executed by the accused which is marked as Ex.P.2 . The execution of the Declaration is not denied by the accused. On perusal of Ex.P2, the averments itself disclose that SS Jewelers have received 17 kgs of gold worth Rs.3,40,00,000/ . In the declaration no where it is stated that the accused has personally received the gold from the complainant company. Moreover, there is no averments about if the SS Jewelers fail to comply the terms and conditions of franchise agreement, the accused is liable for the said transaction and balance amount. The accused in CC No.6687/2015 has specifically admitted that he has received 17 kgs of gold from the complaint company under the franchise agreement . He also specifically deposed in that case that 14 C.C.No.6686/2015 he is liable to return remaining balance of gold to the complainant company.
17. In support of the accused contention, the accused himself examined as Dw 1 and reiterated his defence. In the cross examination , the Advocate for complainant has not cross examined about the cheque issued for security. In the examination in chief he has deposed that the complainant has taken cheque from the accused as security and also taken two cheques from his son . Admittedly, the accused has admitted issuance of cheque , execution of Declaration. Mere execution of Declaration and issuance of cheque is not sufficient to prove the existence of legal liability. The PW 1 in his cross examination specifically admits that three cheques are taken for same transaction. The real transaction is between the complainant company and SS Jewelers. The accused is not liable for any default committed by the Proprietor of SS Jewelers as per the terms and conditions . Mere issuance of cheque is also not sufficient. The 15 C.C.No.6686/2015 complainant has to prove existence of debt or legal liability. The complainant has not proved that the accused is personally liable for value of 17 kgs gold received by the his son.
18. The accused has successfully placed sufficient oral and documentary evidence to prove that he is not liable to pay value of 17 kgs of gold to the complainant . The accused also proved that the complainant has misused the cheque issued by the accused as security at the time of entering into franchise agreement between the complainant and his son. Therefore, the complainant has failed to prove the ingredients of Sec.138of NI Act.
19. The complainant has failed to discharge the initial burden which lies on him to prove the existing debt / liability for Rs.3,40,00,000/ . The accused has successfully rebutted the presumption as per Sec.139 of N.I.Act. Therefore, in the light of above discussion, the court is of the opinion that the complainant has failed to prove that there is existence of legally enforceable debt or liability to 16 C.C.No.6686/2015 the extent of the amount mentioned in the cheque. The complainant has utterly failed to prove his case beyond all reasonable doubt. The complainant has not placed sufficient oral and documentary evidence for convincing the court in order to convict the accused for the offences punishable under Sec.138 of N.I.Act. Hence, Point Nos.1 and 2 are answered in the Negative.
20. Point No.3 : In the light of the above findings on point Nos.1 & 2 I proceed to pass the following :
ORDER Exercising the powers conferred upon this court u/s.255(1) Cr.P.C., the accused is hereby Acquitted of the offence punishable under Sec.138 Negotiable Instrument Act.
The bail bond of the accused and that of the surety if any stand cancelled. [ (Dictated to the Stenographer , transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 25th day of March, 2021).
(H.K.NAVEENA ) XXV A.C.M.M., BANGALORE.17 C.C.No.6686/2015
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : B.G.Mallikarjun.
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : C.C. of Incorporation Certificate Ex.P2 : Declaration Ex.P3 : Cheque Ex.P3(a) : Signature of accused Ex.P4 : Bank memo Ex.P5 : Legal Notice.
Ex.P6 : Postal receipt
Ex.P7 : Letter issued by postal department
Ex.P8 : C.C. of Board Resolution.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED: D.W.1 : Achappa
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED:
Ex.D1to 4 : C.C. of ledgers reduced in writing in diaries for the year 2011 14 Ex.D541 : C.C.of Consignment Note Invoice Ex.D42 : C.C.of Audit Report Ex.D43 : E Sugam Form Ex.D4446 : C.C.of E mail copies Ex.D4749 : C.C. of the Orders.
(H.K.NAVEENA ) XXV A.C.M.M., BANGALORE.18 C.C.No.6686/2015 19 C.C.No.6686/2015 20 C.C.No.6686/2015