Bangalore District Court
Vijaya Bank Employee Housing vs ) Mr.Thimmegowda on 30 January, 2021
1 CC No. 23951/2014
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 30th day of January 2021
:PRESENT:
SMT.ROOPA K., BAL, LLB.
XXVI Addl.C.M.M., Bangalore City.
JUDGMENT U/S 355 OF Cr.P.C
Case No. : C.C No. 23951 of 2014
Complainant : Vijaya Bank Employee Housing
Co-operative Society Ltd.,
No.999A, 1st Floor MSRS Nagar,
Bilekahalli,
Bangalore 560 076.
Represented by authorized rep.
Mr. P.Ramakanth Shetty.
(By Sri.Shashi Kiran Shetty- Adv.)
Vs.
Accused : 1) Mr.Thimmegowda,
R/a. 65 Vanivilas Road,
Basavanagudi,
Bangalore - 4.
2) Mr. T Suresh Gowda,
R/at No.65,
Vani Vilas Road,
Basavanagudi,
Bangalore.
2 CC No. 23951/2014
3) Mr.Prasanna Gowda,
R/at No.65,
Vani Vilas Road,
Basavanagudi,
Bangalore
4) Mr.Raghavendra Gowda,
R/at No.65,
Vani Vilas Road,
Basavanagudi,
Bangalore.
(Abetted)
5) Smt.K.Leelavathi,
w/o. Thimme Gowda
R/at No.65,
Vani Vilas Road,
Basavanagudi,
Bangalore-4.
(Abetted)
6) Mr.Dasappa,
s/o.Singraiah,
Aged about 68 years,
R/A Kanchagaranahalli,
Badadi Post
7) M.N. Manjunath,
aged about 59 years,
s/o. Narayanaswamy
3 CC No. 23951/2014
R/at Manchanayakanahalli,
Bidadi post.
8) M/s. SPR Developers,
No.34/2, 5th Main,
Gandhinagar,
Bangalore - 560 009.
Represented by its
Managing Director,
Mr. Thimmedgowda.
9) Sharath Thimme Gowda,
R/at No.65,
Vani Vilas Road,
Basavanagudi,
Bangalore.
10) G-Corp Estates Pvt. Ltd.
No.19/3, Dodamane, 2nd floor,
Vittal Malya Road,
Bangalore 560 001.
Represented by its
Managing Director,
Mr.Sharath Thimme Gowda
(By Sri.N.Sharath- Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Date of Order : 30.01.2021
****
4 CC No. 23951/2014
JUDGMENT
This complaint is filed by the Complainant society against the Accused for the offence punishable u/s 138 of Negotiable Instruments Act.
2. The brief facts of Complainant case is that: The complainant is the registered Co-operative Society duly registered under Karnataka Co-operative Societies Act. The accused No.1 is the Managing Director of Accused No.8 Company which is engaged in the business of forming layout and distributing residential sites. The Accused No. 2 to 7 are the partners of Accused No.8 company. The Complainant society in order to allot sites to its member entered into a contract with the accused No. 1 to 8 herein to develop 110 acres of land for forming residential sites and to sell the same to the Complainant at the rate of 276 per sq.ft. sital area. The accused were absolute owners in respect of 110 acres of land of Bidadi Hobli, Ramanagar Taluk and District. In this regard the accused and the Complainant executed memorandum of understanding dated 06.10.2005 and supplementary 5 CC No. 23951/2014 agreements dated 23.11.2005, 09.06.2006, 01.03.2007, 28.07.2007 and 14.04.2011. The Complainant had paid an amount of Rs.86 crores to accused for forming residential sites and to sell the same to the Complainant. But the same was not performed within time set out in the MOU and supplementary agreement. Hence the Complainant with no option inclined to file CMP No.94/2012 and a sole Arbitrator was appointed. The accused no.1 as a managing Director of accused No.8 company and the Power of attorney holder of accused No.2 to 7 requested for mediation of the said matter. Accordingly the same was referred to mediation and there was an amicably settlement between the Complainant and accused No. 1 to 8. The terms and conditions of the settlement were set out in the Memorandum of agreement dated 08.04.2013. Accordingly an arbitration award was passed as per the terms of mediation agreement.
3. It is further stated that, as per the terms and conditions of the award, the accused No. 1 to 8 shall pay Rs.185 crores as full and final settlement. As per the terms of 6 CC No. 23951/2014 award the accused No.1 to 8 have agreed to pay the above said amount on different dates through cheques.
4. The Complainant further states that, in order to discharge a part of arbitration award amount, the accused No.9 who is son of Accused No.1 and being the authorized signatory of the accused No.10 company issued a post dated cheque bearing No. 000213 dated 20.05.2013 for Rs.10 crores drawn on HDFC Bank, Kasturba Road, Bangalore before the Arbitrator on behalf of accused No. 1 to 8 and the accused No.9 had also assured that the cheque will be honoured on its presentation. After receiving the said cheque, the Complainant presented the same for encashment through Vijaya Bank, but the cheque was returned with an endorsement as "stop payment by the drawer" with bankers memo dated 21.08.2013. After receiving the endorsement, the Complainant intimated the same to accused No. 1 to 10, they have promised to repay the amount within a week, but they have not repaid the amount. Hence the Complainant issued legal notice on 19.09.2013 through RPAD. The notice has 7 CC No. 23951/2014 been duly served on 20.09.2013. In-spite of service of notice, the accused persons neither replied nor complied the notice. Hence the complaint.
5. The Complainant represented by its - President by name Mr. P. Ramakanth Shetty, in his pre-summons stage filed an affidavit in lieu of sworn statement and examined as PW1. This court took cognizance of the offence and registered the criminal case against the accused and summons was issued to them. In response to summons, they appeared before the court through their counsel and they were enlarged on bail. Thereafter plea was recorded and accused No.1, 2,3, 6, 7 and 9 pleaded not guilty and claimed to be tried, accused No. 4 and 5 are reported as dead, hence case against them was abetted. The accused No.8 and 10 are legal entity represented by accused No.1 and 9 respectively.
6. The complainant represented by its authorized representative/director by name Mr.P.Ramakanth Shetty has filed affidavit in lieu of examination in chief on 26.09.2018 and he has produced 16 documents as per Ex.P1 to P16. 8 CC No. 23951/2014 After closure of Complainant evidence, the statement of accused No. 1,2,3,6,7 and 9 under section 313 of Cr.P.C. was recorded and explained incriminating evidence appeared against them. The accused denied the incriminating evidence and not adduced any defense evidence and produced one document i.e., copy of deposition in CC 18594/2014, which was confronted to Complainant and marked as per Ex.D1.
7. I have heard the arguments on both sides. The advocate for Complainant has filed memo with reported decisions and the advocate for accused has also filed memo with reported decisions.
8. After hearing the arguments and on perusal of entire evidence available on record, the following points arise for consideration.
1) Whether the Complainant society proves that, the accused No.9 to discharge of legally recoverable debt or other liability on behalf of accused No.1 to 8 has issued the alleged cheque bearing No.000213 dated 20.05.2013 for Rs.10 crores drawn on HDFC Bank, Kasturba Road, Bangalore ?9 CC No. 23951/2014
2) Whether the Complainant society proves that, on presentation of said cheque, same was returned unpaid as "stop payment by the drawer" and despite of giving legal notice, they failed to pay the cheque amount, thereby they committed an offense punishable under section 138 of NI Act ?
3) What order?
9. My findings on the above points are as under:
Point No.1: In the Negative, Point No.2: In the Negative, Point No.3: As per the final order for the following:
REASONS POINT NO.1 and 2 :
Both points no.1 and 2 are taken up together for common discussion to avoid repetition.
10. In this case the Complainant has produced the alleged Ex.P3 cheque, contending that the same was issued by accused No.9 as an authorized signatory of Accused No.10, undertaking to repay the alleged amount on behalf of accused 10 CC No. 23951/2014 No.1 to 8. On presentation of the alleged cheque for encashment, the same was dishonoured as 'stop payment of the drawer'. Thereafter the Complainant has got issued legal notice as per Ex.P5 to all accused No.1 to 10 through RPAD. The Complainant has also produced postal acknowledgments as per Ex.P7 to P13 to show that the said legal notice was served on them. Further inspite of service of notice, the accused failed to pay the cheque amount, hence the complaint.
11. On the other hand, the accused have raised a defence in the cross-examination of PW1 that, firstly legal notice was not served; there was no proper service of notice. Secondly, the alleged cheque was not given by accused No.9 and 10 on behalf of accused No. 1 to 8 as per Arbitration award. Thirdly, PW1 has no authority to depose in this case. Fourthly the accused No.9 and 10 are not parties to arbitration award ; therefore they contends that the accused No.9 and 10 are not liable to pay the cheque amount to Complainant society ; there was no legally recoverable debt or liability.
11 CC No. 23951/2014
12. Before discussion of evidence and documents on record, it is necessary to mention that, what is the legal position of law u/s 138 of NI Act. Because it is true that, once the cheque relates to the accused and his signature on the said cheque is proved, an initial presumption as contemplated u/s. 139 of Negotiable Instruments Act has to be raised by the court in favor of the Complainant. Sec. 139 of the Negotiable Instrument Act contemplates that, it shall be presumed unless contrary is proved that, the holder of the cheque received the cheque of the nature referred to in the Sec.138 for the discharge of the whole or in part of any debt or liability.
13. Further the presumption referred to u/s 138 of Negotiable Instruments Act is mandatory presumption and in general presumption. But the fact remains that mere plausible explanation is not expected from the accused and it must be more than plausible explanation.
14. In a proceeding under section 138 of NI Act, the first and foremost ingredient is that the alleged cheque must be drawn on account maintained by the accused and signature on alleged cheque belongs to him. Admittedly the alleged 12 CC No. 23951/2014 cheque and signature belongs to accused No.9 and 10.
15. Firstly, on presentation of said cheque, the same was returned unpaid as "payment stopped by the drawer" on 19.08.2013. It could be seen from Ex.P3 and 4. Thereafter Complainant bank issued the demand notice to the address of accused and same was served to accused No.1, to 5, 9 and 10. It is stated in the complaint that the legal notice was issued to the correct address of the accused. Therefore when the notice issued to the correct address which was available with the complainant, then it shall presume the notice addressed to the correct address of the accused as per Section 27 of General Clauses Act.
16. On perusal of Ex.P7 to P13 Postal acknowledgment, it appears that the said notices were served. Further the accused have raised the defense that there was no proper service of legal notice. The legal notice to accused no.1 to 5 addressed to the same address and the postal acknowledgment bears the same receiver signature. Therefore learned advocate for accused has submitted in his argument 13 CC No. 23951/2014 that the legal notice not served in person to all accused and the accused persons were not aware about the notice, all the notices were received by one single person. They are not aware that who has received the notice. Further Ex.P12 and 13 are the postal acknowledgment which were addressed to accused No.9 and 10, which bears the signature and seal of accused No. 10 company.
17. It is pertinent to note that, on perusal of entire cross examination of PW1, the accused no where disputed the address mentioned on alleged Ex.P5 to 13 and the address mentioned in the cause title. The address mentioned in the cause title of the compliant and address to which the legal notice was sent are one and the same. That apart the legal notice was addressed to the same address which was mentioned in the cause title of the complaint. The complainant has produced ten postal receipt as per Ex.P6, which shows that the legal notice sent to the correct address of all accused through registered post.
14 CC No. 23951/2014
18. Further the learned advocate for Complainant relied upon the decision of Hon'ble Supreme Court in N Parameshwaran Unni vs. G.Kannan and others - AIR 2017 SC 1681 in this case the Hon'ble Apex Court observed that as per Section 27 of General Clauses Act 1897 and Section 114 of the Indian Evidence Act 1872, that once notice is sent by registered post by correctly addressing to the drawer of the cheque, the service of notice is deemed to have been affected. Then the requirements under proviso(b) of Section 138 stands complied, if notice is sent in the prescribed manner.
19. Further, in a decision reported in 2007(6) SCC 555 in between C C Alavi Hajai vs. Palapetty Muhammed and another- wherein the Hon'ble Apex Court held that, once the notice is sent by registered post by correcting addressing the drawer of the cheque, the notice deemed to have been effected. Further the Hon'ble Apex Court has also observed that as per Section 138 proviso (b) & (c) course opened to the drawer where he claims not to have received the notice sent by post, but received copy of complaint with the summons held that, he can within 15 days of the receipt of summons make 15 CC No. 23951/2014 payment of the cheque amount and on that basis submit to the court that the complaint be rejected and if he failed to make payment then he cannot contend that there was no proper service of notice. Thus, it is clear that notice was issued in compliance of Section 138 (a) and (b). However, the drawer is at liberty to rebut the presumption available u/s 27 of General Clauses Act and Section 114 of Indian Evidence Act, but in this present case on hand the accused failed to place any iota of documents to show that the address to which the notice sent was incorrect or they are not residing in that address. Therefore mere raising a defence that the receiver signature on Ex.P7 to P11 was by one single person is not acceptable to held that there was no proper service of the legal notice as contended by the accused.
20. Secondly, the they have contended that, the Complainant /PW1 has no valid authority to depose in this case. The case was filed in the year 2013, but Ex.P2 the authorization letter is dated 26.09.2018. Hence the learned advocate for accused while submitting his arguments has taken the attention of this court that as on date of filing of 16 CC No. 23951/2014 complaint, he has no valid authorization. Hence the complaint is not maintainable.
21. On the other hand in response to this contention, the learned advocate for Complainant has submitted that, the Complainant was represented by its President Ramakanth Shetty who was the President of the Complainant society has filed this case and after that when he became a director, a fresh authorization was given to him by the succeeding President of the society to continue the proceedings. Therefore he contends that though the Ex.P1 authorization letter is dated 26.09.2018; but the Complainant Ramakanth Shetty who was the President at the time of filing of the case was having authority to file the case.
22. On perusal of copy of Arbitration award, copy of CMP No.94/2012 which was filed before Hon'ble Hogh Court of Karnataka, it appears that the Ramakanth Shetty who is Complainant herein himself represented the society in those cases. That apart he himself was the President of Complainant society at the time of filing of this case, on that 17 CC No. 23951/2014 basis he has filed this case before this court. Thereafter at the time of recording of evidence, the Complainant has produced Ex.P1 - Authorization issued by the succeeding President of the society to continue the proceedings in this case and another case in CC No.18594/2014 . Therefore the contention of the accused that PW1 has no valid authorization holds no water.
23. Further the accused No. 9 who is authorized signatory to accused No. 10 company has taken a contention that, the entire transaction took place between Complainant and accused No. 1 to 8 ; accused No. 9 and 10 are not the parties to Arbitration award. Therefore, the learned advocate for accused vehemently submitted in his argument that, accused No.9 is only a nominee to accused No. 8 Company to facilitate and to get sale deeds of the land which was standing in the name of Complainant to adjust the amount as agreed by accused No. 1 to 8 in the arbitration proceedings. Therefore the accused No.9 and 10 are not at all liable to pay the cheque amount. They have not issued any cheque agreeing to repay the amount so claimed by the Complainant. 18 CC No. 23951/2014
24. Further argued that, as per the terms of arbitration award, the Complainant society has to execute special Power of Attorney to nominee of accused No. 1 to 8 to facilitate the transaction. But the Complainant society without executing special Power of Attorney in favour of accused No.9 who is the nominee, but claiming the amount to make wrongful gain. In this regard he takes the attention of this court to terms of arbitration award at Ex.P15 para 6, wherein it was clearly mentioned that "simultaneously, petitioner shall execute a Special Power of Attorney in favor of the respondent or his nominee to sign and execute relevant sale deeds in faovur of prospective purchasers. The respondents shall be entitled to deal with the aforesaid lands in any manner of their choice without any interruption or obstruction from the petitioner or any one claiming under it. The petitioner undertakes to execute sale deed in respect of the aforesaid lands in such portions as the respondents may require in favour of respondents and or in favour of any persons that the respondents may designate or nominate. The respondent shall be entitled, at their option, to direct prospective purchasers of the aforesaid lands to make 19 CC No. 23951/2014 payment of the sale consideration directly to the petitioner. In such event the payment so received by the petitioner shall be appropriated towards the amounts then outstanding and due to petitioner by the respondents....." . Thus, the advocate for accused submits that even if they have obtained PDC cheque from accused No. 1 to 8 as per the schedule dates mentioned in the award, simultaneously the Complainant society has to execute SPA in favour of respondent or its nominee to deal with the lands which were in the name of Complainant society.
25. As against this, the learned advocate for Complainant has also submitted in his reply argument that the accused No.9 who is none other than the accused No.1 has issued alleged Ex.P3 cheque by undertaking to repay the amount of Rs.10 crores as per arbitration award. Therefore he states that in the arbitration award the date and amount was clearly mentioned as Rs.10 crores through PDC cheque dated 20.05.2013. Therefore he submits that to repay the amount as agreed by accused No.1 to 8, the accused No.9 has issued the alleged cheque.
20 CC No. 23951/2014
26. I have gone through the arbitration award as well as the appointment of nominee letter-Ex.P16. It is true that in the arbitration award the Complainant, accused No. 1to 8 herein are the only parties. Ex.P9 and P10 are not the parties. Pw1 has also clearly admitted in his cross-examination that accused No.9 and 10 are not the parties to arbitration proceedings and they have not signed the arbitration award.
27. Further as per arbitration award, the accused No.1 to 8 agreed to pay Rs. 185 crores through cheque drawn in name of petitioner in the following manner.
(a) On or before 10.04.2013 Rs. 5 Crores
(b) through a PDC cheque payable Rs.10 Crores on 20.05.2013
(c) through a PDC cheque payable Rs.10 Crores on 20.07.2013
(d) On or before 31.12.2013 Rs.20 Crores
(e) On or before 10.04.2013 Ra.35 Crores
28. In total the respondent undertaken to repay the said amount of Rs.80 Crores through the cheque which shall be honoured on presentation, failing which in liability in respect thereof shall be deemed to be admitted and the petitioner shall 21 CC No. 23951/2014 be entitled to initiate appropriate proceeding under the law against the respondents.
29. From the above terms of arbitration award the said payment of amount shall be made by the respondents i.e. the accused No.1 to 8 herein. It is an admitted fact that in the arbitration award there was no mention about the serial number of alleged PDC cheques which were given. The Complainant/PW1 has stated in cross examination that the alleged Ex.P3 cheque was given by the accused No.9 on behalf of accused No.1 to 8 at the arbitration proceedings. If it was so, certainly, they could have mention the particulars of alleged cheque. But unfortunately there was no details mentioned in the arbitration award. Mere on the fact that accused No.9 is none other than the son of accused No.1 itself is not sufficient to paste the criminal liability. Moreover the alleged cheque belongs to accused No.10 company which is a separate legal entity.
30. However the learned advocate for Complainant has submitted that the accused No.9 is the authorized signatory to 22 CC No. 23951/2014 accused No.1 company and the Hon'ble High court of Karnataka has also observed in Criminal Petition No.4211/2015 which was filed by accused No.1 to 10 to quash the proceedings of this case that, "the terms of settlement make it abundantly clear that the petitioner have taken up the liability in respect of the cheques issued towards repayment of Rs.185 Crores; therefore the petitioner cannot seek to escape from their liability on the ground that they are not the signatories to the aforesaid cheque". Therefore the learned advocate for Complainant submits that the Hon'ble High Court of Karnataka has also observed that the accused persons cannot be escape from the liability on the ground that they are not the signatories to alleged cheque and arbitration award as contended by accused No.9 and 10 as well.
31. The learned advocate for accused has also submitted that the Hon'ble High court of Karnataka has also observed in Criminal Petition cited (supra) that, "the petitioners have given stop payment instruction to honour the said cheque on account of failure of the parties to perform their respective part of the agreement". Hence observed that, "that could be a 23 CC No. 23951/2014 valid defence to rebut the presumption attached to the cheque , but cannot be a reason to quash the proceedings". Thus, he submits that the findings given by the Hon'ble High Court in said petition are with respect to the quash proceedings, it does not mean to accept the case of the Complainant to fix the liability on accused No.9 and 10.
32. As rightly submitted by the learned counsel for accused and with due respect to the findings given by the Hon'ble High Court of Karnataka in said Criminal Petition, which are only with respect to the quash proceedings, the same are not conclusive trial to take away the defence of accused.
33. Further the learned advocate for accused relied upon the decision of Hon'ble Apex Court reported in AIR 2010 SC 2596 in between P J Agrotech Limited and others vs. Water Base Limited - and submits as per this decision the accused No.9 and 10 are not the parties to the arbitration award could not be made liable to discharge the terms of agreement entered among Complainant and accused No.1 to 8.
24 CC No. 23951/2014
34. I have gone through the above cited supra of Apex Court, it was held that "In order to attract provisions of section 138 of NI Act, the cheque which was dishonored had to be drawn by person on account maintained by him with banker; it must be for payment of any amount of moneyto another person from out of that account for discharge, in whole or in part of any debt or other liability". The proceedings in such matter are in personam and cannot be used to foist an offence on some other person who under the statute was not liable for commission of such offence.
35. In the present case on hand also the arbitration agreements took place between complainant and accused No. 1 as a GPA holder on behalf of accused No.2 to 7 . If any dues arose on such agreement the Complainant has to recover the same from accused No.1 to 8. The accused No. 9 and 10 are no way concerned to discharge the criminal liability of accused No.1 to 8. The Complainant failed to produce a bit of evidence to show that accused No.9 being a authorized signatory to accused No.10 company has under taken to repay the amount 25 CC No. 23951/2014 as per terms of arbitration award on behalf of accused No.1 to
8. This is a strong circumstance which leads to create shadow on the case of Complainant.
36. Of-course the learned advocate for Complainant has vehemently argued and submitted that if the cheque was not issued by the accused No.9 on behalf of accused No. 1 to 8 to pay the agreed amount, then they should show for what purpose they have issued the alleged cheque herein in favour of the Complainant.
37. It is true that the cheque bears that signature of Accused No. 9 and also indicates the drawee name is Complainant society, but which itself does not mean that the accused should explain the circumstances for which it was issued. But at the same time the burden is on the Complainant to clear the cloud to show that the accused No.9 has issued the alleged cheque as per the terms of arbitration award on behalf of accused No.1 to 8. But as I already stated above the Complainant failed to produce any peace of document to remove the shadow which was created on their case. 26 CC No. 23951/2014
38. Further the alleged cheque was returned for the reason payment stopped by the drawer, therefore the learned advocate for Complainant has relied upon decisions of Hon'ble Supreme Court of India reported in AIR 2002 SC 182, AIR 1996 SC 2339, and submits that if the cheque is dishonoured for the reason stop payment instructions, Section 138 of NI Act get attracted.
39. It is true that if the cheque is dishonored for the reason payment stopped by the drawer, certainly the offence under section 138 of NI Act get attracts. But the cites supra decision are not applicable to the case on hand, because in the present case the Complainant has to show the accused No. 9 and 10 have committed an offence alleged against them. Because they are not parties to the arbitration award and proceedings, Though the PW1 has stated in his cross- examination that the accused No.9 as a GPA holder of accused No.1 to 8, had participated in the arbitration proceedings and given the alleged cheque. But the Complainant failed to produce the document to discharge its initial burden. 27 CC No. 23951/2014
40. In the present case the question to be determined is that the liability of accused No. 9 and 10 and not the maintainability of the Complainant for stop payment instructions given by accused No.9.
41. If at all for the sake of arguments, if it is accepted for a while that the accused No.9 as a facilitator has issued the cheque for security purpose while getting sale deeds of the lands to the prospective purchasers and to get the money from the prospective purchaser as agreed in the terms of arbitration award at para 6, even then the Complainant society has to execute Special Power of Attorney to the nominee of accused No.1 to 8 i.e., accused No.9 to execute relevant sale deeds in favour of prospective purchasers.
42. Further, as per the terms of agreement the accused persons who are the respondent in the arbitration proceedings are entitle to deal with the said lands in any manner of their choice without any interruption or obstruction from the petitioner i.e. the Complainant herein. The accused herein are entitled at their option to direct the prospective purchaser 28 CC No. 23951/2014 of said lands to make payment of the said sale consideration directly to the petitioner society.
43. It also in the terms of the agreement that, in such an event the amount so received by the petitioner shall be appropriated to towards the amount due to the petitioners by the respondent. Thus the said execution of special Power of Attorney in faouvr of respondent or its nominee has took place simultaneously. But as per Ex.P16 the respondents have given letter to the Director of Complainant society on 28.05.2013 about appointment of nominee and informed the Complainant company to execute a special Power of Attorney in favour of G-Corp Estate Private Ltd. as its nominee for the purpose of arbitration award No.SK/1/2013-14.
44. It is pertinent to note that the said nominee appointment letter is dated 28.05.2013, the cheque is dated 20.05.2013, the same was presented to the bank on 19.08.2013 i.e., after two and half months the cheque was presented for encashment, but as per the terms of arbitration award and agreement, the Complainant society should 29 CC No. 23951/2014 executed Special power of attorney in favour of nominee of respondent i.e. Accused No.10, but the Complainant society failed to abide the terms as agreed in the award.
45. Under such circumstances the Complainant society cannot demand for payment of amount. Therefore as observed above even if the cheque is obtained during arbitration proceedings, the encashment of the same depends upon the fulfillment of terms incorporated in the award. The Complainant society no where stated that they have executed Special power of attorney in favour of Accused No.10 company to facilitate them to execute sale deed in respect of land in favour of prospective purchaser to accumulate the funds to repay the amount as per arbitration award.
46. Under such circumstances, it is highly impossible to accept the case of the Complainant that the accused No.9 is liable to pay the cheque amount in discharge of liability of accused No. 1 to 8. The Complainant society instead of getting smooth execution of arbitration award has rushed to this court to file a criminal proceeding though there was no liability on 30 CC No. 23951/2014 accused No. 9 and 10. Therefore viewed from any angle the Complainant failed to establish its case, on the other hand the accused No.9 and 10 succeed to probablise their defence. Hence the presumption under section 118 and 139 of NI Act stands rebutted. Under such circumstances, the benefit of doubt should be given to the accused. Hence, I answer point No.1 and 2 in the Negative.
POINT No.3
47. In view of the findings on point No. 1 and 2 the accused needs to be acquitted for the alleged offence. Hence, I proceed to pass the following:
ORDER Acting u/s 255(1) of Cr.P.C., the accused No.1 to 3 and accused No. 6 to 10 are acquitted from the alleged offence punishable u/s 138 of N.I.Act.Accused No. No.1 to 3 and accused No. 6
to 10 are set at liberty and their bail bond and surety bond shall stand cancelled. (Typed directly on computer to my dictation by the stenographer in the chamber , corrected and then pronounced by me in the open court on this the 30th day of January 2021) (ROOPA K.) XXVIth ACMM, Bangalore City.31 CC No. 23951/2014
ANNEXURE Witnesses examined for the Complainant:
PW.1 : P. Ramakanth Shetty Witness examined for the accused: NIL
List of Documents marked for the Complainant:
Ex. P1 Authorization letter
Ex. P2 Society bylaw
Ex. P3 Cheque
Ex. P3(a) Signature of the accused.
Ex. P4 Endorsement.
Ex. P5 Notice.
Ex. P6 Postal receipt - 10 Nos.
Ex. P7 to 13 Postal acknowledgment.
Ex. P14 Certified copy of order of CMP No.94/2012
Ex. P15 Arbitration award.
Ex. P15(a) Certified copy of Arbitration award.
Ex. P16 Nominee appointment letter dated 28.05.2013
List of Documents marked for the accused:
Ex.D1 Copy of deposition in CC 18594/2014
XXVI ACMM, Bangalore.