Bangalore District Court
M/S.Savex Technologies Pvt.Ltd vs M/S.C-Store on 14 March, 2023
KABC030493932020
Presented on : 14-10-2020
Registered on : 14-10-2020
Decided on : 14-03-2023
Duration : 2 years, 5 months, 0 days
IN THE COURT OF 36TH ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU.
Present:-
Sri. Hanamantarao R.Kulkarni
B.Com., LL.B.,
XXXVI Addl.Chief Metropolitan Magistrate,
Bengaluru.
C.C. No.12800/2020
Dated this the 14th day of March, 2023
Complainant: M/s.Savex Technologies Pvt.Ltd.,
No.755/9, 13th cross, 7th block, Jayanagar,
Bengaluru-560082 represented by its
Consultant Mahesh Shekar s/o
M.R.Narasimhaiah, Aged about 58 years.
(By Sri.S.Srinivas Murthy., Advocate)
Versus
Accused: 1. M/s.C-Store, represented by its
proprietor Naveen Kumar Ramalingam,
#39, 80 ft road, HAL 3rd stage, Indira
nagar, Bengaluru-560075.
2
C.C.No.12800/2020
2.Naveen Kumar Ramalingam,
#39, 80 ft road, HAL 3rd stage, Indira
nagar, Bengaluru-560075.
Residence: #398, 5th main, 12th cross,
Mahalakshmipuram layout,
Bengaluru-560086.
(By Sri.H.N.B., Advocate)
--------
1. Nature of the offence : Sec. 138 of N.I.Act
2. Commencement of evidence : 12/10/2020
3. Closing of evidence : 14/10/2022
4. Opinion of the Judge :Accused found guilty.
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JUDGEMENT
1. This is a private complaint filed by the Complainant under Section 200 of the Code of Criminal Procedure against the accused no.1 and 2 for the offence punishable under Section 138 of the Negotiable Instruments Act.
2. The brief facts of the case of the complainant are as under:
That, the accused no.2 is the proprietor of the accused no.1, a proprietor concern. The accused no.2 is responsible for the conduct of the business, its day to day affairs, administration and functioning at all 3 C.C.No.12800/2020 relevant times and at the time of commission of the offence.
The complainant is engaged in business of distributions, imports and resale of note books, desktops, smart phones, inkjet and laser printers, all in one printers, plotters, servers, storage products, TFT and LCD monitors, Cartridges, toners, mic key boards, hard disk drives, hard disk drives, mouse webcam, multi media speakers and other computer peripherals and telecom products.
On a request made by the accused, the complainant has sold, supplied and delivered various types of computers and their peripherals, software as per the orders placed by the accused and which were received by the accused in good conditions as mentioned in the private complaint and an amount of Rs.1,53,37,370.68/- is due and payable by the accused to the complainant against the invoices. The accused has issued a cheque to the complainant bearing no.456838 for Rs.1,53,37,370.68/- dated 29/07/2020 drawn on IndusInd bank, Thippasandra branch, Bengaluru towards the discharge of his liability.
The complainant has presented the afore said cheque through his banker and he has given an endorsement as Exceeds arrangement on 30/07/2020. The complainant has issued a legal notice on 11/08/2020 to the accused no.1 and 2 and it has been duly served on the accused no.1 and 2 on 13/08/2020.4
C.C.No.12800/2020 Inspite of the notice given, the accused no.2 neither paid the cheque amount nor issued any reply to the said notice, hence complainant is constrained to file this complaint.
3. After the presentation of the complaint, cognizance for the offence punishable under Section 138 of the N.I. Act was taken, sworn statement of the complainant was recorded and after perusal of the complaint, sworn statement and the relevant documents and upon prima facie case as made out by the complainant, case was registered and process was issued against the accused no.1 and 2 and in pursuance of the said process, accused no.2 entered his appearance before the Court and enlarged on bail and thereafter plea of the accused no.2 was recorded wherein he has pleaded not guilty and claimed to be tried.
4. In order to prove his case, complainant's consultant Mahesh Shekar has been examined as P.W.1 and has filed his affidavit and got marked Ex.P1 to Ex.P14 and closed his side. Thereafter, the statement of the accused no.2 as required u/s 313 of the Code of Criminal Procedure was recorded wherein the accused no.2 has denied the incriminating evidence appearing against him. On the contrary, the accused no.2 has himself examined as D.W.1 and got marked Ex.D1 to D4 and closed his side.
5C.C.No.12800/2020
5. I have heard both Counsel. The learned Counsel for the accused has submitted the written arguments. I have perused the written arguments submitted by the learned Counsel for the accused. The learned Counsel for the complainant has relied upon the citations reported in 1)Criminal Appeal no.1269-1270/2021, 2) Criminal Appeal no.230-231/2019, 3) Criminal Appeal no.123/2021, 4) AIR 2019 SC 1876, 5) 2019(1) KLR 171,
6) 1996 Criminal Law Journal 3099 Gujarat High Court and 7) Laws (KAR) 2017 378. I have perused the citations produced by the learned Counsel for the complainant. The learned Counsel for the accused has relied upon the citations reported in 1) 2008 SCC Online Ker 254, 2) 2001 SCC Online Mad 922 and 3) 2018 SCC Online Mad 5124. I have perused the citations produced by the learned Counsel for the accused.
6. After perusal of the records of the case, the following points would arise for my consideration:
1. Whether the complainant proves that the accused no.2 has issued a cheque i.e., Ex.P1 and the same is dishonoured by the Bank as "Exceeds Arrangement" and in spite of receiving statutory notice the accused no.2 has failed to make payment of the cheque within the statutory period and thereby committed an offence punishable under Section 138 of the Negotiable Instruments Act?6
C.C.No.12800/2020
2. To what order?
7. My findings to the above points are as under:
Point No.1: In the affirmative, Point No.2: As per final order for the following:
REASONS
8. Point No.1: P.W.1 in his affidavit evidence has reiterated the complaint averments and got marked as Ex.P1 to Ex.P14. Ex.P1 is the cheque dated 29/07/2020 bearing No.456838 for a sum of Rs.1,53,37,370.68/- issued by the accused no.2 in favour of the complainant. Ex.P2 is the cheque return memo. Ex.P3 to 6 are the tax invoices. Ex.P7 is the Office copy of Statutory Notice issued on behalf of the complainant to the accused no.1 and 2. Ex.P8 and 9 are the postal receipts. Ex.P10 and 11 are the track consignments. Ex.P12 and 13 are the complaints. Ex.P14 is the authorization letter. On behalf of the accused no.2, he has produced Ex.D1 to Ex.D4. Ex.D1 is the statement of account. Ex.D2 is the account statement. Ex.D3 is the E-mail copy. Ex.D4 is the Certificate under Sec.65B of Indian Evidence Act.
9. It is the case of the complainant that, the accused no.2 has issued the cheque bearing no.456838 for Rs.1,53,37,370.68/- dated 29/07/2020 to the complainant towards payment of the sum and the said cheque was presented in the Bank and the same was returned with an endorsement "Exceeds Arrangement"
on 30/07/2020 in the account of the accused no.2. The 7 C.C.No.12800/2020 complainant has issued statutory notice on 11/08/2020 to the accused no.1 and 2 and the notice was served on the accused no.1 and 2 on 13/08/2020 as per the track consignments. Though, the notice has been served on the accused no.1 and 2, the accused no.2 has neither paid the cheque amount nor given any reply to the said notice.
10. In order to attract the provisions of Section 138 of Negotiable Instruments Act, the complainant has to establish that he has complied with the conditions mentioned under Section 138 of Negotiable Instruments Act. The said cheque is presented to the bank by the complainant within the period of its validity and the cheque return memo dated 30/07/2020 issued by the bank with reasons "Exceeds arrangement" is received from the bank and the complainant has given the notice in writing to the accused no.1 and 2 on 11/08/2020 which is within the period of 30 days of the receipt of information from the bank. The said notice has been served on the accused no.1 and 2 on 13/08/2020. In spite of proper service of the statutory notice, the accused no.2 has failed to make payment of the said amount of money to the complainant within 15 days. Hence by producing Ex.P.1 and 2 and Ex.P7 to Ex.P11, the complainant has satisfactorily established that he has complied with the statutory requirements of the proviso to Section138 of Negotiable Instruments Act. The cause of action to the complainant arose after 8 C.C.No.12800/2020 expiry of period of 15 days of the receipt of the legal notice. The complainant has filed the complaint in writing under the provisions of Section 200 of Cr.P.C. on 14/09/2020 which is within the period of one month from which the date on which the cause of action arose and hence the complainant has complied with the provisions of Section 142 of Negotiable Instruments Act.
11. The accused no.2 has not disputed nor denied the issuance of the cheque to the complainant inasmuch initial statutory presumption attached to the cheque as per Sec.118(a) and 139 of N.I.Act has to be raised in favour of the complainant. Sec.139 of the N.I.Act reads as under:
Sec.139: Presumption in favour of holder: 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 for the discharge, in whole or in part, of any debt or other liability.
Insofar as the payment of the amount by the complainant in the context of the cheque having been signed by the accused, the presumption for passing of consideration would arise as provided under Sec.118(a) of N.I.Act which reads as under:
Sec.118: Presumption as to negotiable instruments - Until the contrary is proved, the following presumptions shall be made: (a) of consideration: that every negotiable instrument was made or drawn 9 C.C.No.12800/2020 for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
The above noted provisions are explicit to the effect that such presumptions would remain, until the contrary is proved. In the case on hand, it is clear that signature on the cheque having been admitted, a presumption shall be raised under Sec.139 of the Act that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused no.2. In Criminal Appeal no.123/2021 between M/s.Kalamani Tex and another and P.Balasubramanian it is held that the statute mandates that once the signature of the accused on the cheque is established, then reverse onus clause becomes operative and in such situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. In the case on hand, the accused no.2 has not disputed signature on the cheque and hence, the obligation shifts upon the accused to discharge the presumption imposed upon him.
12. The accused in a trial under Sec.138 of NI Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case non-existence of consideration and debt is so probable that a prudent 1 C.C.No.12800/2020 man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration and that 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 the 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 the bare denial of the passing of the consideration and 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. 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 shifts back to the complainant and thereafter, the presumptions under Sec.118 and 139 of the Act will not again come to the complainant's rescue.
13. Keeping afore said principles and relevant provisions of NI Act in mind, it is seen that in the case on hand, the accused no.2 has not disputed the factum of issuance of the cheque in question. It is not his 1 C.C.No.12800/2020 defence that the said cheque was not issued by him or had been misplaced or stolen from his possession. Similarly, he has not disputed that the cheque was drawn by him on an account maintained by him with his banker. It is not his stand that the bank account belonged to some other person. He has also not disputed his signature on the cheque in question and has not alleged any forgery of the same. Further, the accused no.2 has not denied the factum of dishonour of the cheque or the reason of dishonour as mentioned on the cheque returning memo. He never alleged that the cheque returning memo was forged document of falsely created.
14. The accused no.2 in his affidavit evidence has deposed that he has given the blank cheque to the complainant and he has filled the cheque. It is pertinent to note that under Sec.20 of the NI Act., it is perfectly possible for the drawer of the cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the payee. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused no.2 to prove that the cheque was not in discharge of a debt or liability by adducing evidence. It 1 C.C.No.12800/2020 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. This view is held in Criminal Appeal no.230-231/2019 between Bir Singh and Mukesh Kumar which was produced by the learned Counsel for the complainant. It is held that "a meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the 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 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 otherwise valid, the penal provisions of Sec.138 would be attracted". It is aptly applicable to the facts on hand. In the case also, it is not the case of the accused that he either signed the cheque or parted with it under threat or coercion. Nor is it the case of the accused that unfilled signed cheque had been stolen. Hence, the defence of the accused is not helpful to him to rebut the presumption under Sec.139 of the Negotiable Instruments Act. It is also held in 1996 Cri.L.J 3099 that entire body of cheque need not to write by maker or drawer and the only signature of the drawer is material.
1C.C.No.12800/2020
15. The accused no.2 has taken the specific defence that he has given the alleged cheque towards security purpose. It is pertinent to note that a cheque issued as a security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance and in a transaction a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same and on such a presentation, if the same is dishonoured, the consequences contemplated under Sec.138 and the other provisions of N.I.Act would flow and there cannot be a hard and fast rule that a cheque which is issued as a security can never be presented by the drawee of the cheque and my view is supported by the decision reported in Criminal Appeal No. 1269-1270 of 2021 by Hon'ble Supreme Court of India between Sripati Singh (since deceased) through his son Gaurav Singh and The state of Jharkhand and another.
16. The accused no.2 has taken another defence that the goods supplied by the complainant were faulty and damaged and he has informed the complainant company about damaged goods and sought for replacement, hence he is not liable to pay the amount involved in the cheque. He has also produced Ex.D3. Ex.D3 is the E-mail copy sent to the complainant 1 C.C.No.12800/2020 company. I have perused it. According to it, the accused no.2 has sent an E-mail to the complainant company. But, it is pertinent to note that there is no material before the court whether the accused no.2 has taken any action against the complainant company for damaged goods and even, he has not produced any documents before the court. It is pertinent to note that if the complainant company has supplied defective goods to the accused no.2, he would have given less amount than the invoice amount but, he has given whole invoice amount. It shows that the accused no.2 has created a cock and bull story to avoid the liability towards the complainant company. Further, the accused no.2 has admitted in the cross examination that the transaction in Ex.P3 to 6 is legally correct. It shows that there are no any defective goods and the accused no.2 has created a story to avoid the liability existence in favour of the complainant company. Further, the accused no.2 has admitted in his cross examination that he has knowledge about the payment of an amount of Rs.1,53,37,370.68/- is due. It shows that the accused no.2 has issued the alleged cheque in favour of the complainant company towards the payment of the sum towards the materials supplied by the complainant company as per invoices mentioned in the private complaint.
17. The learned Counsel for the accused has produced the citation reported in 2008 SCC online Ker 254 in 1 C.C.No.12800/2020 which it is held that if the accused has made part payment, then the complainant must have made an indorsement of the amount received and presented the cheque to collect the balance amount due. But, in the case on hand, it is not the case of the accused that he has paid part amount and so much amount is remaining and the accused has not produced any documents before the Court that he has paid part amount. Hence, this citation is not applicable to the facts on hand. The learned Counsel for the accused has also produced the citation reported in 2001 SCC online Mad 922 in which it is held that if the cheque is more than the amount of the debt due, Sec.138 cannot be attracted. In the case on hand, the accused has not shown that the cheque amount is more than the debt due. Hence, this citation is not applicable to facts on hand. The learned Counsel for the accused has also relied upon 2018 SCC Online Mad 5124 in which it is held that the complainant had utterly failed to satisfy the court that there was due execution of the cheque and the figure denoting the amount found to be written in different inks and the handwriting in as much as the digits and words also differs and the different ink, pen and manipulation of the amount would show that the complainant had failed to demonstrate due execution of the cheque. But, in the case on hand, the accused has not raised the defence as envisaged in the citation and mere producing the citation and not raising any 1 C.C.No.12800/2020 defence in his version do not hold any water. Further, in the case on hand, it is not the case of the accused that the complainant has manipulated the amount covered under the cheque. Hence, this citation is not helpful to the accused.
18. The accused no.2 in this case except the aforesaid defences, he has not taken any specific defence that the cheque does not belong to him and he does not have any account in the said bank. As per the cheque return memo, it is clear that the cheque has been returned by the bank for "Exceeds Arrangement". One of the conditions to constitute the offence under Section138 of Negotiable Instruments Act is that the cheque must have been drawn for the discharge in whole or in part of any debt or other liability. Explanation to Section 138 of Negotiable Instruments Act states that for the purpose of this section 'debt or other liability' means legally enforceable debt or liability. In order to prove the existence of the debt due from the accused the complainant's consultant examined as P.W.1 and in his chief examination he has deposed that the accused no.2 has issued the cheque for Rs.1,53,37,370.68/- bearing No.456838 dated 29/07/2020 which is marked at Ex.P.1. Hence by adducing the evidence of P.W.1 and by producing the documents the complainant has discharged his burden to prove the existence of the liability due from the accused. The careful analysis of oral and documentary 1 C.C.No.12800/2020 evidence of complainant would clearly establish that, the accused no.2 has issued a cheque at Ex.P1 to discharge his liability to the complainant. The complainant has established with beyond reasonable doubt that, the accused no.2 has issued the cheque towards amount due from him. The contents contained in Exs.P1 to Ex.P11 also go to show that, the complainant has complied with the statutory requirements as contemplated U/Ss.138 of N.I.Act. Though, P.W.1 was cross-examined at length by the learned Counsel for the accused no.1 and 2, nothing worth is elicited so as to discard his testimony given in the chief-examination.
19. It is pertinent to note that a holder of a cheque is entitled to the benefit of legal presumption under Sec.118(g) of the N.I.Act that he came into the possession of the instrument in due course unless it is shown to have come to the custody of the possessor by means of an offence, fraud or other unlawful means. In this case, the accused no.2 had not even put a suggestion to PW1 that the cheque came to his possession otherwise than by lawful means.
20. It is pertinent to note that in the case on hand, the accused no.2 has not given any reply to the statutory notice given by the complainant. It is worthy to note that no prudent person will keep quite without issuing reply to the legal notice, if he is not liable to pay such amount. In the case on hand, the accused no.2 has not 1 C.C.No.12800/2020 given any reply, it is presumed that he has given the cheque for the alleged liability towards the complainant.
21. In so far as the issuance of statutory notice is concerned, the complainant had sent the notice to the address of the accused no.1 and 2 and it has been served on the accused no.1 and 2 as per track consignments marked Ex.P10 and 11. It is to be noted that the address of the accused no.1 and 2 as shown in the cause title of the complaint and the address as shown in the statutory notice is one and the same. When the summons was duly served and when the accused no.2 entered appearance through his Counsel on the very next date of hearing when the summons was ordered to be issued against the accused no.1 and 2, it becomes crystal clear that statutory notice is served on the accused no.1 and 2 and the accused no.2 has deliberately not replied to the statutory notice.
22. As already observed, the entire materials on record clearly go to show that the accused no.2 had issued cheque towards payment of the sum. It is a settled position of law that the burden to prove the consideration for the cheque lies on the accused no.2. If not rebutted, the presumption is that the cheque was issued for consideration. It is for the accused no.2 to prove that the cheque was not issued towards a debt or liability. He has to lead credible evidence for rebuttal 1 C.C.No.12800/2020 of this presumption. Mere denial of averments will not suffice to shift this burden on the complainant. The presumption U/S 139 of the Act is a presumption of law and is not a presumption of fact. This presumption arises when once the factum of dishonour is established. Of course, the onus of proof to rebut this presumption lies on the accused no.2. The standard of such rebuttal evidence must be sufficient, cogent and should prove beyond any reasonable doubt. Therefore, a mere explanation given by the accused no.2 is not enough to repel this presumption of law.
23. Having regard to the entire materials on record, I am of the considered opinion that the accused no.2 has failed to prove that he had not issued Cheque for discharge of his liability and on the other hand the Complainant has convincingly proved that the cheque issued by the accused no.2 was in discharge of his legal liability and the same was dishonoured for insufficient of funds and the accused no.2 has purposefully not replied to the statutory notice and despite the knowledge of statutory notice, has failed to make the payment of the cheque amount within 15 days from the refusal of notice and thereby he has committed an offence punishable u/s 138 of the Negotiable Instruments Act. Accordingly, I answer this point in the Affirmative.
24. Point No.2: In view of my discussion made supra, I proceed to pass the following:
2C.C.No.12800/2020 ORDER Acting u/S.255 (2) of the Code of Criminal Procedure, I hereby convict the accused no.2 for the offence punishable under Section 138 of the Negotiable Instruments Act.
The accused no.2 shall undergo Simple Imprisonment for a period of six months and also to pay a fine of Rs. 3,000/- and in default thereof, he shall further undergo Simple Imprisonment for another one month. The accused no.2 is also directed to pay a sum of Rs.1,53,37,370.68/- as compensation to the complainant under section 357(1) of the Code of Criminal Procedure.
Free copy of the Judgement shall be furnished to the accused no.2 forthwith.
(Directly I have typed on my laptop, corrected by me and then pronounced in the open Court on this the 14 th day of March, 2023) (Hanamantarao R.Kulkarni) XXXVI ADDl.CMM, Bengaluru.
==== :ANNEXURE:
Witnesses examined on behalf of the
Complainant:
2
C.C.No.12800/2020
PW.1:Mahesh Shekar
Documents marked on behalf of the
Complainant:
Ex.P1: Cheque
Ex.P2: Bank endorsement
Ex.P3 to 6: Tax invoices.
Ex.P7: Office copy of Statutory Notice Ex.P8 and 9: Postal receipts.
Ex.P10 and 11: Track consignments. Ex.P12 and 13: Complaint copies.
Ex.P14: Authorization letter.
Witnesses examined on behalf of the accused:
D.W.1: Naveen R Documents marked on behalf of the accused:
Ex.D1: Statement of account.
Ex.D2: Account statement.
Ex.D3: E-mail copy.
Ex.D4:Certificate under Sec.65B of Indian Evidence Act.
(Hanamantarao R.Kulkarni) XXXVI ADDL.CMM, Bengaluru.2
C.C.No.12800/2020 (Judgment pronounced in Open Court) ORDER Acting u/S.255 (2) of the Code of Criminal Procedure, I hereby convict the accused no.2 for the offence punishable under Section 138 of the Negotiable Instruments Act.
The accused no.2 shall undergo Simple Imprisonment for a period of six months and also to pay a fine of Rs. 3,000/- and in default thereof, he shall further undergo Simple Imprisonment for another one month. The accused no.2 is also 2 C.C.No.12800/2020 directed to pay a sum of Rs.1,53,37,370.68/- as compensation to the complainant under section 357(1) of the Code of Criminal Procedure.
Free copy of the Judgement shall be furnished to the accused no.2 forthwith.
(Hanamantarao R.Kulkarni) XXXVI ADDL.CMM, Bengaluru.