Bangalore District Court
H. M. Santhosh Kumar vs Mohammed Raziq on 3 January, 2022
IN THE COURT OF ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY.
SCCH-6
PRESENT: SMT. K. LAKSHMI, B.A.L, LL.B.,
IV Addl., Small Cause Judge &
ACMM, Court of Small Causes,
BENGALURU.
C.C. No.162/2016
Dated this the 03rd day of January 2022
COMPLAINANT : H. M. Santhosh kumar
S/o H. M. Virupakshaiah,
Aged about 30 years,
Marketing Director of Crudus
Power Technologies Pvt. Ltd.,
Residing at No.112, 1st N Block,
4th Cross, Rajajinagar,
Bengaluru.
(By Advocate Shri. Chethan. B)
V/s
ACCUSED Mohammed Raziq
S/o Mohammed Farooq,
Aged about 31 years,
No.53, MIG-1, Kalyanagirinagar,
Mysuru.
(By Advocate Shri. D. E.
Somashekara)
***
2 C.C. No. 162/ 2016
-: J U D G M E N T :-
The complainant has filed the present complaint
against the accused under section 200 of Cr. P. C for the
offence punishable under section 138 of Negotiable
Instrument Act.
2. According to the Complainant, the accused and
himself were the founder of the company by name M/s
Crudus Power Technologies Private Limited. The
complainant and accused is the managing director of the
said company. The accused was working as a managing
director of M/s Crudus Power Technologies Private
Limited from 2011 to 2014. It is further alleged that the
accused voluntarily resigned the post of managing director
on 12-11-2014. The accused has utilized the money
belonged to the company for his personal use without the
consent and approval of the Board. The accused has
misappropriated the company's fund for his personal use.
It is also alleged that the accused has also caused theft of
3 C.C. No. 162/ 2016
the movable and intellectual properties of the company
during his tenure as the managing director. The accused
admitted the misappropriation committed by him in
respect of company's fund as a managing director of the
company. It is further alleged that the accused has agreed
to pay the misappropriated fund and executed the
memorandum of understanding on 31-12-2014.
3. Subsequently for repayment of the
misappropriated amount the accused issued eights
cheques i.e., cheque bearing No. 351076 for a sum of
4,50,000/- dated 18-11-2014, cheque bearing No.
351077 for a sum of 6,00,000/- dated 19-11-2014,
cheque bearing No. 351078 for a sum of 3,85,000/- 20-
11-2014, cheque bearing 351079 dated 20-11-2014 for a
sum of Rs.5,00,000/-, cheque bearing No. 351080 dated
21-11-2014 for a sum of Rs.3,00,000/-, cheque bearing
No. 351081 dated 22-11-2014 for a sum of Rs.
3,00,000/-, cheque bearing No. 351082 for a sum of Rs.
5,00,000/- and cheque bearing No. 351083 dated 25-11-
4 C.C. No. 162/ 2016
2014 for sum of Rs. 2,00,000/- drawn on ICICI Bank,
main branch, Bengaluru. Thereafter, the impugned
cheques were presented for collection in the account of the
complainant on 10-01-2015 and the cheque were
dishonored by the said Bank on 12-01-2015 the ground
that the " cheque destroyed in system ". Thereafter, the
complainant approached the accused and informed about
the reason of the dishonor of cheques. He has made
demand for the repayment of the misappropriated amount
after the receipts of said endorsement by the bank. The
accused requested to accommodate three months times to
arrange the amount. Accordingly, the complainant
accommodated the accused to clear the cheque amount,
but the accused did not make payment. Thus, he has
again presented the disputed cheques for collection
through his banker on 17-04-2015. The impugned cheques
were dishonored by the said Bank on 20-04-2015 on
the ground that the "stale dated and cheque destroyed in
system". Thereafter, the complainant has issued a
statutory notice dated 16-05-2015 under section 138 of
5 C.C. No. 162/ 2016
the Negotiable Instrument Act, to the accused. The said
notice served to the accused on 23-05-2015. The accused
received the notice and acknowledged the same. The
accused has not given reply to the said statutory notice.
Since the said notice was not complied with, the above
said complaint is preferred by the complainant.
4. In his pre-summoning evidence, complainant was
examined on affidavit. He reiterated the contents of
complainant and got marked documents. Upon
appreciation of pre-summoning evidence, accused was
summoned for an offence punishable under section 138 of
the Negotiable Instrument Act. After receipt of summons,
the accused appeared before this Court through his
counsel and he was enlarged on bail. Plea of accusation
has been read over and explained to the accused and he
pleads not guilty and claims to be tried. The accused was
examined u/Sec.313 of Cr. P .C. He totally denied the
entire case of the complainant.
6 C.C. No. 162/ 2016
5. During the course of trial, the complainant
examined himself as PW-1 and got marked twenty-one
documents as per Ex. P-1 to Ex. P-21. On the contrary,
the accused has led evidence as DW-1. He relied on Ex.
D-1 to Ex. D-7. Thereafter, the case is posted for
arguments.
6. I have heard the arguments.
7. On the basis of the above facts, the following
points arise for my consideration :-
1. Whether the complainant proves beyond all the
reasonable doubt that, the accused has
misappropriated the company's fund and issued
the impugned cheques cheque bearing No.
351076 for a sum of 4,50,000/- dated 18-11-
2014, cheque bearing No. 351077 for a sum
of 6,00,000/- dated 19-11-2014, cheque
bearing No. 351078 for a sum of 3,85,000/-
20-11-2014, cheque bearing 351079 dated 20-
7 C.C. No. 162/ 2016
11-2014 for a sum of Rs.5,00,000/-, cheque
bearing No. 351080 dated 21-11-2014 for a
sum of Rs.3,00,000/-, cheque bearing No.
351081 dated 22-11-2014 for a sum of Rs.
3,00,000/-, cheque bearing No. 351082 for a
sum of Rs. 5,00,000/- and cheque bearing
No. 351083 dated 25-11-2014 for sum of Rs.
2,00,000/- drawn on ICICI Bank, main
branch, Bengaluru, for payment of
misappropriated amount by the accused and
when the complainant presented the cheques for
encashment and they were dishonoured due to
" cheque destroyed in system", for which the
complainant has issued a legal notice through
RPAD and the same was served, but the
accused has not repaid the said amount and
thereby the accused has committed the offence
punishable under section 138 of Negotiable
Instruments Act?
2. What order ?
8 C.C. No. 162/ 2016
8. My answers to the above points are as follows :
Point No.1 : In the Negative,
Point No.2 : As per final order,
for the following:
-: R E A S O N S :-
POINT No.1 :-
9. The complainant has filed his affidavit in lieu of
his oral chief examination. In his affidavit he has testified
regarding the issuance of the cheques, dishonour of
cheques, issuance of legal notice and failure of the accused
to pay the cheque amount. The complainant has produced
the impugned cheques. Ex. P-1 to Ex. P- 8 stand in the
name of the M/s Crudus Power Technologies private
Limited. Ex. P-9 to Ex. P-16 are the Banker's
endorsement. Ex. P-17 is the office copy of the legal
notice, which is dated 16-05-2015. Ex. P- 18 is the postal
receipt. Ex. P-19 is the postal acknowledgement. Ex. P-20
is the acknowledgment of debt alleged to be executed by
9 C.C. No. 162/ 2016
the accused in favour M/s Crudus Power Technologies
private Limited. Ex. P - 21 is the memorandum of
understanding alleged to be executed by the accused in
favour of M/s Crudus Power Technologies private
Limited. Ex. P-22 to Ex. P-24 are the endorsement issued
by the bank.
10. On the other hand, the accused led evidence as
DW-1. He relied on Ex. D-1 to Ex. D-7 . He stated that
the company under the name and style M/s Crudus
Power Technologies private Limited incorporated by him
along with Raju Ganjam, shivu and Ahmed. The said
company incorporated on 07-10-2011. The object and
purpose of the the said company was undertake to product
development of manufacturing street lighting equipment
and related software development and allied activities. It
is further stated that the complainant and his father had
evinced interest in making investment in the aforesaid
company and also taking up the responsibility of financial
investments and marketing of the company's product.
10 C.C. No. 162/ 2016
The complainant and his father made investment for a sum
of Rs.50,00,000/-.
11. He further stated that the earlier promoters of
the M/s Crudus Power Technologies private Limited,
had resigned to the directorship and membership of the
company upon the complainant and his father entering
into the business. The complainant and his father tried to
take the entire business of M/s Crudus Power
Technologies private Limited. He further stated that the
complainant and his father tried to downplay and progress
of the company. The complainant and his father stated
that it was difficult to market the product and and
expressed inability to invest further. The complainant and
his father arranged financial assistance by way of term loan
for a sum of Rs. 90,00,000/- and Rs. 5,00,000/- cash
credit from the Oriental Bank of Commerce, Richmond
road, Bengaluru. He further stated that the complainant
and his father started siphoning the funds from the
11 C.C. No. 162/ 2016
company and transferred the same to other accounts after
taking up the company's financial management.
12. He further stated that it became difficult to
perform the business related duties due to siphoning of the
funds from the complainant. He insisted and demanded
the complainant's father to resign from the company and
he also assured that their investment of Rs.50,00,000/-
would be returned. He further stated that the complainant
and his father along with Amit, Ashoka and Kapa
assaulted him and father of the complainant pointed the
gun on him and threatened to sign all the documents.
They obtained his signatures on the letter head of the
company, cheques, and also on the blank sheets and
stamp papers. The complainant and his father confined
him from 06-11-2014 to 26-11-2014. He further stated
that the complainant has forcibly took laptop, several hard
disks, passport, debit cards and car from his possession.
The complainant and his father made illegal demands and
threatened to facilitate in obtaining the personal loan to
12 C.C. No. 162/ 2016
them. Thus, he lodged complaint against the complainant
and his father before the Hulimavu Police Station. He
further stated that the complaisant and his father obtained
the blank cheques forcibly from him. He has not
misappropriated the company's fund. He is not liable to
pay the cheque amount to the complainant. Hence, he
prays for acquittal on the ground that the impugned
cheques never issued for the discharge of debt.
13. Learned Counsel for complainant argued that
the complainant has discharged his initial burden of
proving the case by his oral as well as documentary
evidence. It is also contention of the complainant that the
accused has not initiated the legal action against the
complainant to recover the disputed cheques. The accused
was aware of the fact that the disputed cheques were with
the complainant. It is also contended that the benefit of
presumption under Sections 118 and 139 of Negotiable
Instruments Act is in favour of the complainant, and
therefore the accused has failed to rebut the presumption.
13 C.C. No. 162/ 2016
Hence, the accused is liable to be convicted. In support of
his contention, he relied on the following citations :-
1. 2021(1) Kar.L.R 378(SC): Sumeti
Vij Vs. M/s Paramount Tech Fab
Industries
2. LAWS(P&H)-1999-10-45 :
Rama Alias Ram Kala Vs. Anil Kumar
Joshi
3. Crl. Appeal No. 123/2021: M/s
Kalamani Tex &Anr. Vs. P.
Balasubramanian.
14. To counter these submission, the learned defence
counsel argued that, there was no transaction between the
complainant and the accused, and the accused never
borrowed a loan from the complainant. The complainant
has forcefully obtained the impugned cheque from the
possession of the accused. The accused is not liable to pay
the cheque amount to the complainant. The complainant
has not approached the Court clean hands. It is further
14 C.C. No. 162/ 2016
contended that though there is presumption under Sec.118
and 139 of Negotiable Instruments Act, existence of
legally enforceable debt is not a matter of presumption
u/Sec.139 of Negotiable Instruments Act. In support of
his contention, he relied on the following citations :-
1. 2009 Cl.L.J. 4031: Suresh Sharma
Vs. M/s New Coolwell Industries and Ors.
2. 1996 Cri.L.J 3552: S.
Krishnamurthy Vs. A. R. Rajan
3. 2010 Cri.L.J 3323: M/s Jayaram
Finance, Kancheepuram and Anr. Vs.
Jayaprakash
15. In view of rival contentions raised by the
parties, it is necessary to consider the statutory provisions
in this regard and also proposition of law.
Section 118 of Negotiable Instrument Act lays
down that:
"Until the contrary is proved, it
shall be presumed that every
15 C.C. No. 162/ 2016
Negotiable instrument was made or
drawn for consideration."
Section 139 of N.I. Act contemplates that :
" Unless the contrary is proved, it shall
presume that holder of the cheque receive
the cheque of the nature referred to section
138 of the N.I. Act for the discharge, in
whole or in part, of any debt or other
liability."
Section 58 of Negotiable Instrument Act lays
down that:
Instrument obtained by unlawful
means or for unlawful consideration. When
a negotiable instrument has been lost, or has
been obtained from any maker, acceptor or
holder thereof by means of an offence or
fraud, or for an unlawful consideration, no
possessor or indorsee who claims through
the person who found or so obtained the
instrument is entitled to receive the amount
due thereon from such maker, acceptor or
holder, or from any party prior to such
holder, unless such possessor or indorsee is,
or some person through whom he claims
was, a holder thereof in due course.ﾵ"
16 C.C. No. 162/ 2016
It is also relevant to refer to Section 2
(d) of the Indian Contract Act, 1872, which
defines consideration as under:
"when at the desire of the promisor,
promisee or any other person has done or
abstained from doing or does or abstains
from doing or promises to do or to abstain
from doing something, such act or
abstinence, or promise is called a
consideration for the promise."
16. The presumption mandated by Section 139 of
N.I. Act does indeed show the existence of legally
enforceable debt or liability. It is a rebuttal presumption.
It is open to raise the defence, wherein the existence of
legally enforceable debt or liability can be contested. For
rebutting presumption accused is not required to adduce
evidence with unduly high standard of proof, but the
standard of proof for doing so is that preponderance of
probability. If the accused is able to raise probable defence,
which creates doubt about the existence of legally
enforceable debt or liability, then the onus shift back to
the complainant. It is also clear that for rebutting the
17 C.C. No. 162/ 2016
presumption accused can rely on the material submitted
by the complainant or his cross examination and he need
not necessarily adduce his defence evidence in all the cases.
17. The specific case of the complainant is that, the
accused has issued the disputed cheques for discharging of
debt and the said cheques were dishonored. Thereafter a
legal notice was issued and then she filed complaint. It is
further contended that once the cheque relates to the
account of the accused and the signature is admitted on the
cheque, then initial presumption as contemplated
u/Sec.139 of N.I. Act has to be raised by the court in
favour of the complainant. In order to prosecute the
drawer of the cheque for the offence punishable under
offence Sec.138 of Negotiable Instrument Act, the
following facts are required to be proved :
[a] That the cheque was drawn for payment
of money for discharging the of a debt or
liability,
[b] The cheque was dishonored,
18 C.C. No. 162/ 2016
[c] That the cheque was presented within the
prescribed period,
[d] The payee made a demand for payment of
the money by giving demand notice in
writing to the drawer within stipulated
period.
[e] That the drawer failed to make the
payment within 15 days of the receipt of
notice.
18. It is specific defence of the accused that the
disputed cheques were not issued towards the discharge of
debt. The complainant has forcefully obtained the
impugned blank cheques from the accused. The accused
has not misappropriated the company's fund. The accused
is not liable to pay said amount to the complainant.
Further, the complainant has presented the impugned
cheques after the validity of the cheques.
19 C.C. No. 162/ 2016
19. Section 20 of Negotiable Instrument Act, 1881,
states that when a person signs and delivers blank cheque
to another, he thereby gives prima facie authority to
holder thereof to make or complete it for any amount
specified therein and not exceeding the amount covered by
stamp. After combined reading of said section 20 and 138
of Negotiable Instrument Act, it appears that to made out
an offence in question against the accused, the necessary
ingredient is that the cheque should be drawn on the
account of the drawer and it is immaterial the contents
therein are in whose handwriting as per section 20 of the
Negotiable Instruments Act. After perusal of said section
20, it appears that the drawer of a cheque can issue blank
cheque to other person and by his said act he gives an
authority to said concern person to fill up it contents. It
enables the holder of the cheque to fill up the incomplete
cheque.
20. In the case of Rajendra Prasad -Vs- M.
Shivaraj, 2006 Criminal Law Journal 3737, our
20 C.C. No. 162/ 2016
Hon'ble Apex Court held that " when once the issuance
of the cheque is validly established, the presumption
would arise under Section 118 as well as Section 139 of
the Negotiable Instrument Act in favour of the
complainant. It was for accused to lead evidence to the
contrary to displace the presumption. Further in the case
of R. Sankaralingam -Vs- Union of India (1997) 1 BC
541(Mad) (DlB), Hon'ble High Court of Madras held
that under Section 138 Negotiable Instrument Act, when
an action is taken against a particular person, there are
certain admitted facts and circumstances, the law raises a
presumption that the accused is guilty. Then the burden
shifts on to the accused to prove that he is not guilty by
establishing that the cheque was not supported by any
consideration and it was not in discharge of debt.
21. Further, in the case of Rohitbahi Jivanlal Patel
-Vs- State of Gujarat and another, (2019) 18 supreme
Court Cases, wherein the Hon'ble Apex Court held
that to rebut statutory presumption, accused not expected
21 C.C. No. 162/ 2016
to prove his defence beyond reasonable doubt as is
expected of complainant in criminal trail. Accused may
adduce direct evidence to prove that note in question was
not supported by consideration and there was no debt or
liability to be discharged by him.
22. The position of law which emerges is that once
issuance of cheque is admitted, the presumption under
Section 118 (a) of Negotiable Instrument Act would arise
that it is supported by a consideration. Such a
presumption is rebuttable. The accused can prove the non-
existence of a consideration by raising a probable defence.
If the accused is proved to have discharged the initial onus
of proof showing that the existence of debt was
improbable or doubtful or the same was illegal, the onus
would shift to the complainant who will be obliged to
prove it as a matter of fact and upon it failure to prove
would dis-entitle him to grant of relief on the basis of the
negotiable instrument. The burden of upon the accused of
proving the non-existence of the consideration can be
22 C.C. No. 162/ 2016
either direct or by bringing on record the preponderance
of probability by reference to the circumstances upon
which he relies. In such event, the complainant is entitled
under law to rely upon all the evidence led in the case. In
case, where the accused fails to discharge the initial onus
of proof by showing the non-existence of the
consideration, the complainant would invariably be held
entitled to the benefit of presumption arising under
Section 118 (a) of Negotiable Instrument Act in his
favour. The Court may not insist upon the accused to
disprove the existence of consideration by leading direct
evidence as the existence of negative evidence. It is neither
possible not contemplated and even of led, is to be seen
with a doubt. The standard of proof evidently is
preponderance of probabilities. Inference of
preponderance of probabilities can be drawn not only
from the materials on records, but also by reference to the
circumstances upon which relies.
23. Admittedly, the cheques were presented to the
drawee bank after the period of expiry of its validity of
23 C.C. No. 162/ 2016
three months, which is to be calculated from the date
mentioned on the cheque. The Clause (a) of Proviso to
section 138 of N.I. Act stipulates that Section shall not be
applicable unless the cheque is presented to the bank
within a period of six months (the period has been reduced
from 6 months to 3 months vide the afore- mentioned RBI
notification dated 04.11.2011) from the date on which it is
drawn or within the period of its validity, whichever is
earlier.
24. In Shri. Ishar Alloys Steel Ltd -Vs- Jayaswals
NECO Ltd., (2001) 3 SCC 609, the Hon'ble Supreme
Court held that non-presentation of the cheque to the
drawee bank within the period specified in the section
would absolve the person issuing the cheque of his
criminal liability under section 138 of N.I. Act. 9. The
Hon'ble Supreme Court in MSR Leathers -Vs- S.
Palaniappan and Anr, s 2012 SCC OnLine SC 791, it
was held as under:-
". Presentation of the cheque and dishonor
thereof within the period of its validity or a
24 C.C. No. 162/ 2016
period of six months is just one of the three
requirements that constitutes 'cause of action'
within the meaning of Sections 138 and 142(b)
of the Act, an expression that is more
commonly used in civil law than in penal
statutes...."
. .....A careful reading of Sections 138 and 142,
as noticed above, makes it abundantly clear that
the cause of action to institute a complaint
comprises the three different factual
prerequisites for the institution of a complaint
to which we have already referred in the earlier
part of this order. None of these prerequisites is
in itself sufficient to constitute a complete cause
of action for an offence under Section 138. For
instance if a cheque is not presented within a
period of six months from the date on which it
is drawn or within the period of its validity,
whichever is earlier, no cause of action would
accrue to the holder of the cheque even when
the remaining two requirements, namely service
of a notice and failure of the drawer to make the
payment of the cheque amount are established
on facts......"
25. Ex. P- 1 to Ex. P-8 are the cheques and they
were returned with an endorsement 'stale cheques and
cheques destroyed in system'. Ex. P-22 to Ex. P-24 are
25 C.C. No. 162/ 2016
the banker's endorsement and they reveals that the
complainant presented the impugned cheques for the
second time on 20-04-2015 through his bank. The
complainant was presented the impugned cheques i.e., Ex.
P-1 to and Ex. P -8 for encashment on 20-04-2015. The
complainant has not produced any documents to show
that the drawee bank sent the said impugned cheques to
the drawer bank for clearance within the validity period
nor examined the officials of drawer bank. Non
examination of officials of the drawer bank fatal to the
case of complainant. For the purpose of proving the case
that the accused had committed an offence under Section
138 of the Negotiable Instrument Act, the ingredients
thereof are required to be prove. What would constitute
an offence is stated in the main provision. The proviso
appended thereto, however, imposes certain further
conditions which are required to be fulfilled before
cognizance of the offence can be taken. If the ingredients
for constitution of the offence laid down in provisos (a)
to (c) appended to Section 138 of the Negotiable
26 C.C. No. 162/ 2016
Instrument Act intended to be applied in favour of the
accused, there cannot be any doubt that receipt of a notice
would ultimately give rise to the cause of action for filing a
complaint. Issuance of cheque would not by itself give rise
to a cause of action, but the presentation of cheque within
a stipulated period from the date on which it is drawn or
withing the period of its validity, whichever is earlier and
also date of information about the bouncing of disputed
cheque. In this case, the date when the complainant
actually received information from his banker about the
bouncing of cheque is missing. Thus, non-presentation of
the cheque to the drawee bank within the period specified
in the section would absolve the person issuing the cheque
of his criminal liability under Section 138 N.I. Act.
26. It is specific defence of the accused that the
statutory notice required Under Section 138 (b) of
Negotiable Instrument Act was not issued within the
stipulated period. Per contra, the complainant alleged
that there was no delay in issuance of demand notice. The
27 C.C. No. 162/ 2016
information of dishonor of cheque was received by the
complainant at the first time on 12-01-2015. As such
demand notice clearly falls within a period of thirty days
as required by section 138(b) of Negotiable Instrument
Act. Thus it is relevant to extract the specific provisions
of Section 142 of Negotiable Instrument Act and also
Section 9 of General Clauses Act.
Section 142 of Negotiable Instrument Act lays
down that:
"[ 142 Cognizance of offences. --
Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 (2 of
1974)--
(a) no court shall take cognizance of any offence
punishable under section 138 except upon a
complaint, in writing, made by the payee or, as the
case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the
date on which the cause of action arises under clause
24
(c) of the proviso to section 138: [Provided that
the cognizance of a complaint may be taken by the
Court after the prescribed period, if the complainant
28 C.C. No. 162/ 2016
satisfies the Court that he had sufficient cause for not
making a complaint within such period.]
(d) no court inferior to that of a Metropolitan
Magistrate or a Judicial Magistrate of the first class
shall try any offence punishable under section 138.]
Section 9 of General Clauses. Act contemplates
that:
" 9 Commencement and termination of
time.
18
(1) In any [Central Act] or Regulation made after
the commencement of this Act, it shall be sufficient,
for the purpose of excluding the first in a series of
days or any other period of time, to use the word
from, and, for the purpose of including the last in
a series of days or any other period of time, to use
the word to.
(2) This section applies also to all [Central Acts]
made after the third day of January, 1868, and to all
Regulations made on or after the fourteenth day of
January, 1887.
In view of Section 9 of the General Clauses Act.
1897 while computing the notice period as prescribed
under Section 138 (b) of the Negotiable Instrument Act,
29 C.C. No. 162/ 2016
the day on which the information of dishonor of cheque is
received has to be excluded while calculating the limitation
of thirty days for the service of notice.
27. In the case of Haru Das Gupta -Vs- State of
W. B. 1972 SCC (cri) 368, the Hon'ble High Court of
Apex Court held that the rule is well established that
where a particular time is given from a certain date within
which an act is to be done, the day in which date is to be
excluded; the effect of defining the period from such a day
until such a day within which an act is to be done is to
exclude the first day and to induce the last day. Further in
the case of Econ Antri Ltd., -Vs- Rom Industries
Ltd., (2014) 11 SCC 769, the Hon'bel Apex Court held
that for the purpose of calculating the period of one
month, which is prescribed under Section 142 (b) of the
Negotiable Instrument Act, the period has to be reckoned
by excluding the date on which the cause of action arose.
30 C.C. No. 162/ 2016
28. Ex. P- 9 to Ex. P-16 are the endorsements
issued by the banker and they reveal that the complainant
received the intimation of dishonor of cheque from the
bank in respect of first presentation of cheques on 12-01-
2015 and demand notice dated 16-05-2015. From the
material available on record reveals that the complainant
sent a demand notice after the statutory period. Thus the
demand notice is not within the stipulated period.
31 C.C. No. 162/ 2016
29. It is also the defence of the accused that the
complaint is not maintainable. It is contended that the
disputed cheques stand in the name of company and not in
the name of complainant. The present complaint filed in
the individual capacity and not in the name of company.
The company is not a party to the proceedings. The
complainant is not authorized person of the said company.
Admittedly, in this case, the drawee of the cheque was a
company and it was the company who was the holder in
due. The cause of action arose necessarily in favour of the
company. A director of the company could not be said to
be a holder in due course since the company by itself was a
legal person. One of the directors can present a complaint
if there was a proper authorization in favour of such a
director. Undauntedly, the complainant has not produced
any authorization or any resolution was filed in this case,
authorizing the complainant to institute the proceedings.
Hence, the complaint is not maintainable. In this case, the
complaint was not filed in the the name of legal entity,
but in the name of the marketing director represting the
32 C.C. No. 162/ 2016
interest of legal entity. Since person who filed the
complaint was not the payee or holder in due course. As
prosecution was initiated by the complainant in his
personal capacity for and on behalf of the corporate body
and not in the name of the company, authorization was
required and ought to have been produced before the
Court. As no such authorization was produced before the
Court, the complaint was held as barred under Section
142 of the Act. Admittedly, the complainant has not
placed any material to show that the company was
authorized him to prosecute the case on its behalf and he
is one of the managing director of the company. Thus,
the complaint is not maintainable.
30. It is a settled position of the law that the case of
the complainant should stand on its own legs. It cannot
take advantage of the weakness of the defence, nor can the
court, on its own make out a new case for the prosecution
and convict the accused on that basis. If defence version is
incorrect, it does not mean that the prosecution version is
33 C.C. No. 162/ 2016
necessarily correct. Therefore, the contention of the
learned Counsel for the complainant regarding the deep
defence of the accused appears to be of no use in sailing
through the case of the complainant. The Hon'ble Apex
Court in the landmark judgment titled as "'Sharad Birdi
Chand Sarda vs State of Maharashtra' (1984) 4 SCC 116",
while discussing the principles of appreciation of
prosecution and defence evidence, has held that-
''It is well settled that the prosecution must
stand or fall on its own legs, and it cannot
derive any strength from the weakness of the
defence. This is trite law. However, where
various links in a chain are in themselves
complete, then a false plea or false defence may
be called into aid only to lend assurance to the
court. In other words, before using the
additional link it must be proved that all the
links in the chain are complete and do not suffer
from any infirmity. It is not the law that where
there is any infirmity or lacuna in the
prosecution case, the same could be cured or
supplied by a false defence or a plea which is not
accepted by a court''.
Thus, in view of the totality of the circumstance and
the settled legal positions as discussed above, the case
34 C.C. No. 162/ 2016
attempted to be built by the complainant, appears to be
suffering from fatal infirmities so much so, it goes directly
to the root of the case and shakes the very edifice on
which the case of the complainant rests. It is also relevant
to mention here that it is of paramount importance to
demand evidence of unambiguous, impeccable and of
unimpeachable in nature so as to entail criminal conviction
of the accused and which the complainant has failed to
bring.
31. In the case of Kulvinder Singh vs Kafeel
Ahmad', Crl L. P. 478 of 2011, decided on 04.01.2013,
Hon'ble Delhi High Court has held that the basic
principle in criminal law is that the guilt of the accused /
respondent, must be proved beyond reasonable doubt and
if there is any slightest doubt about the commission of an
offence, then the benefit has to accrue to him. Further in
the case of Sh. Naveen Sethi Vs. Sh. Pralok Kmar, it
was held as hereunder :-
35 C.C. No. 162/ 2016
" At the same time, it is important to
underscore the established canon of
criminal law that in order to pass a
conviction in a criminal case, the
accused ''must be'' guilty and not
merely ''may be'' guilty. The mental
distance between ''may be'' guilty to
''must be'' guilty is a long one and must
be travel not on surmises and
conjectures, but by co - gent evidence."
36 C.C. No. 162/ 2016
Accordingly, in view of the above discussions, this
court holds that the complainant has failed to prove his
case. Thus, in view of the totality of the circumstance and
the settled legal positions as discussed above, the case
attempted to be built by the complainant, appears to be
suffering from fatal infirmities so much so, it goes directly
to the root of the case and shakes the very edifice on
which the case of the complainant rests. It is also relevant
to mention here that it is of paramount importance to
demand evidence of unambiguous, impeccable and of
unimpeachable in nature so as to entail criminal conviction
of the accused and which the complainant has failed to
bring. In this case, there is a major contradiction in the
evidence of complainant. The statement of complainant
not corroborated by the material available on the record.
In such an event, it is difficult to accept the version of the
complainant. The above precedents are squarely applicable
to the case in hand. Despite various deficiencies in the
version of the accused, I am unable to overlook the fact
that the alleged transaction itself is uncorroborated and
37 C.C. No. 162/ 2016
unproved. The complainant has failed to prove his case
beyond all the reasonable doubts and it has failed to fulfill
all the ingredients of offence under Section 138 of
Negotiable Instrument Act against the accused. Further,
the complainant has not placed any material to show that
the accused misappropriated the company's fund. The
complainant has also not taken legal action against the
accused in respect of misappropriation of the company's
fund by the accused. The accused has been able to rebut
the presumption in favour of the complainant as the
standard of proof so as to prove a defence on the part of
the accused is only 'preponderance of probabilities' and
inference of preponderance of probabilities can be drawn
not only from the materials brought on record by the
parties but also by reference to the circumstances upon
which he relies as the same was held by Hon'ble Supreme
Court in M/s Indus Airway Private Limited and others
-Vs- Magnum Aviation Private Limited and another
( CA No.830 of 2014). In the light of the above
discussions and observations, this Court has no hitch to
38 C.C. No. 162/ 2016
hold that the complainant has failed in proving his case
beyond the shadow of reasonable doubts. This court
exonerates the accused for the offence punishable under
Section 138 of Negotiable Instrument Act.
32. Once the cheque relates to the account of the
accused and he accepts and admits his signature on the
cheque, then initial presumption as contemplated
u/Sec.139 of N.I. Act has to be raised by the court in
favour of the complainant. The presumption referred to
u/Sec.139 of N.I. Act is a mandatory presumption and
not a general presumption. But, the accused is entitled to
rebut the said presumption by probable and acceptable
evidence. The accused has not denied the issuance of
cheques in favour of complainant. In the instant case, the
complainant failed to prove that the existence of legally
enforceable debt. Hence, I answer point No.1 in the
Negative.
POINT No.2:-
39 C.C. No. 162/ 2016
33. Section 139 of N.I. Act creates presumption that
the cheque received in the nature referred to Section 138
of N.I. Act is always issued in discharge of debt or other
liability. For a successful prosecution of offence under
section 138 of the Act, complainant must allege and prove
that the cheque was drawn or executed by the accused. In
the absence of proof of existence of debt, presumption
cannot be drawn in favour of the complainant. In this
case, the accused had a probable defence and complainant
failed to prove and establish the existence of leglly
enforceable debt. Hence, the benefit of doubt given to
the accused. In view of my findings to the above point, I
proceed to pass the following :
ORDER
The accused is not found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is
acquitted acting Under Section
255(1) of Cr.P.C of the charges 40 C.C. No. 162/ 2016 leveled against her for the offence punishable under Section 138 of Negotiable Instruments Act.
Bail bond of accused is canceled and surety stands discharged.
(Dictated to the Stenographer, transcribed and typed on Lap-top, then corrected by me, Print out taken, signed and then pronounced by me in the open court on this the 03rd day of January 2022) (K. LAKSHMI) IV ADDL. S. C. J & ACMM ACMM, BENGALURU.
41 C.C. No. 162/ 2016ANNEXURE List of witnesses Examined for Prosecution:
PW.1. : H. M. Santhosh Kumar List of documents marked for prosecution :
Exp.1 to 8: Cheques (8 in Nos.) Exp.1 (a) : Signatures of accused to 8 (a) Exp.9 to 16 : Bankers Endorsements (8 in Nos.) Exp.17 : Office copy of legal notice Exp.18 : Postal Receipt Exp.19 : Postal Acknowledgement Exp.20 : Acknowledgement if debt dtd: 31.12.2014 Exp.21 : Memorandum of Understanding dtd: 01.01.2015 List of witnesses Examined for accused :
DW.1 : Mohammed Raziq List of documents marked for prosecution :
Ex.D.1 : Employment contract Ex.D.2 : C/c of letter dtd: 10.11.2014 42 C.C. No. 162/ 2016 Ex.D.3 : C/c of Notification dtd: 12.11.2014 Ex.D.4 : C/c of Form-12 Ex.D.5 : C/c of private complaint dtd: 10.01.2015 Ex.D.6 : C/c of FIR Ex.D.7 : C/c of audit report of the year 2013-14 IV ADDL. Small Causes Judge & ACMM, BENGALURU.43 C.C. No. 162/ 2016
Dt: 03-01-2022 C-
A-
For judgment (Order pronounced in open court vide separate judgment) ORDER The accused is not found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is acquitted acting Under Section 255(1) of Cr.P.C of the charges leveled against her for the offence punishable under Section 138 of Negotiable Instruments Act.
Bail bond of accused is canceled and surety stands discharged.
(K. LAKSHMI) IV Addl. SCJ & ACMM, Bengaluru.44 C.C. No. 162/ 2016 45 C.C. No. 162/ 2016 46 C.C. No. 162/ 2016 47 C.C. No. 162/ 2016 48 C.C. No. 162/ 2016