C.C.No.1993/201[SECTION] IN THE COURT OF THE XXII ADDL.CHIEF METROPOLITAN MAGISTRATE, BENGALURU Present: Smt. HEMA PASTAPUR B.A., LL.B., XXII Addl. Chief Metropolitan Magistrate, Bengaluru. Dated this the 14th day of September 2018 C.C.No.1993/201[SECTION] Judgment under [SECTION] of [ACT] Complainant : MEENAKSHI ENTERPRISES, No.[SECTION], 1st Cross, 1st Main, Vinayaka Layout, Nandahalli Post, Mysore Road, Bengaluru - 560 039. By its proprietor [ENTITY], Aged about 52 years, Represented by [ENTITY], Sri. [ENTITY], s/o Late [ENTITY], 1 C.C.No.1993/201[SECTION] Aged about 61 years, Occupation:- Business. (By Shri [ENTITY], Advocate) V/s Accused : M.S. VINAYAKA ENTERPRISES, No.4[SECTION]3/A, 12th Cross, Peenya Industrial Area, 4th Phase, Bengaluru - 58, Rep. by its Proprietor [ENTITY]. (By Shri [ENTITY], Advocate) JUDGMENT
That, the complainant has filed the private complaint under [SECTION] of [ACT], through her husband and General Power of Attorney Holder Shri [ENTITY] s/o Late [ENTITY] for taking action against the accused for the offence punishable under [SECTION] of the [ACT].
C.C.No.1993/201[SECTION] That, the brief facts of the present case are as under:-
1. That, the complainant and accused are know to each other since several years. That, the accused was involved in Wood business and for several times had purchased the wood from the complainant and there was a running account. That, the accused had issued in favour of the complainant a Cheque bearing No.[SECTION][SECTION]65[SECTION]9 dated:-03.08.2016 for a sum of Rs.[SECTION],65,02[SECTION]/- drawn on Corporation Bank, Peenya Industrial Estate branch, Bengaluru - 58.
That, the complainant had presented the said cheque for encashment in bank and on 10.10.2016 the State Bank of Mysore, Rajarajeshwarinagar branch, Bengaluru, returned the said cheque with an endorsement as 'Funds Insufficient'. That, the complainant for the aforesaid acts of the accused on 02.11.2016 had issued the legal notice to him and the said notice was duly served upon him on 0[SECTION].11.2016. That, as the accused in spite of receiving the said notice failed to comply with the terms of the same the complainant has constrained to knock the doors of justice.
2. That, on complaint being lodged by the complainant, this court registered the case in concerned register and took the cognizance C.C.No.1993/201[SECTION] for the offence punishable under [SECTION] of the [ACT] and thereafter, recorded the sworn statement of the General power of attorney holder of the complainant and after satisfying with the materials placed on record registered the case against the accused in Register No. III and issued summons to him. That, the accused in pursuance of said summons appeared before this court through his Learned counsel and he was enlarged on bail. That, the substance of accusation of the accused has recorded and read over him in language known to him and he has not pleaded guilty and claimed to tried. That, after completion of complainant side evidence the statement of the accused as contemplated under [SECTION] of the [ACT], has recorded and read over him and he denied all incriminating evidence appearing against him.
3. That, I have heard the arguments and perused the materials placed on record. That, the following points arise for My consideration and determination:-
1. Whether the complainant has proved that, the accused to discharge his legally enforceable debt had issued in her favour a Cheque bearing C.C.No.1993/201[SECTION] No.[SECTION][SECTION]65[SECTION]9 dated:-03.08.2016 for a sum of Rs.[SECTION],65,02[SECTION]/- drawn on Corporation Bank, Peenya Industrial Estate branch, Bengaluru - 58?
2. Whether the complainant has further proved that, the said cheque was dishonoured as 'Funds Insufficient' in the account of the accused and thereby the accused has committed the offence punishable under [SECTION] of the [ACT]?
3. What order?
4. That, the complainant to substantiate her aforesaid contentions has got examined her husband and General Power of Attorney Holder Shri [ENTITY] as PW1 and got marked the documents at EXs.P1 to 10 and closed her side.
That, the accused to substantiate his aforesaid contentions has deposed himself as DW1 and got marked the documents at EXs.D1 to 3 and closed his side.
5. That, My answer to the aforesaid points are as under:-
Point No.1 :- In the [ACT] Point No.2 :- In the [ACT] Point No.3 :- As per the final order for the following:-
C.C.No.1993/201[SECTION] REASONS
6. Point No.1:- It is to be noted here that, the Learned counsel for the accused has vehemently canvassed the arguments that from perusal of EX.P1 it appears that the complainant has not given any specific authority to PW1 to file the present complaint under [SECTION] of the [ACT] and in view of the same present complaint is not maintainable.
[SECTION]. It is pertinent to note here that, the Learned counsel for the accused in support of his contentions has placed his reliance on following decisions:-
1. [ENTITY] -vs- [ENTITY] and another, reported in (2015) 12 Supreme Court Cases 203 wherein it has held that Debt, Financial and Monetary Laws
- [ACT] - Ss.[SECTION], 142 and 145
- Complaint on behalf of company - who can filed complaint under 1881 Act and can depose and verify complaint on oath before the Court - Complaint filed by S claiming to be general power of attorney of the complainant Company - Maintainability.
C.C.No.1993/201[SECTION]
2. [PRECEDENT] wherein in para No.5 the Hon'ble court has held that it is found as a fact by the Trial Court that a general power of attorney Exhibit P 14, by one [ENTITY], the Executive Director of the complainant, executed in favour of PW1 was sought to be produced as a proof of authorization. The Trial Court has observed that the said power of attorney was in respect of civil litigation and there was no specific authority to file a complaint under [SECTION] of the [ACT] and that there was no proof of the fact that the said [ENTITY] was the Executive 19[SECTION] Directors of the company and that he himself had any authority to file a complaint or execute a power of attorney in terms of Exhibit P.14 in favour of PW1 and hence held that the complaint filed through the medium of PW1 and sought to be prosecuted through the said Guruva, was not maintainable.
8. It is pertinent to note here that, in instant case from perusal of EX.P1 it clearly appears that the complainant has not given any C.C.No.1993/201[SECTION] specific authority to PW1 to file the present complaint under [SECTION] of the [ACT] and in view of the same the present complainant is not maintainable.
9. It is specific contention of the complainant that, the accused is liable to pay her a sum of Rs.[SECTION],65,02[SECTION]/-.
10. It is pertinent to note here that, the complainant in support of her contentions has placed her reliance on following decisions:-
1. [PRECEDENT], rep. by its manager, [ENTITY], reported in [CASE NUMBER] wherein it has held that as the issuance of the cheque is not in dispute, the presumption envisaged in [SECTION] of the Act can be legally inferred that the cheque was made and drawn for consideration on the date which the cheque bears. [SECTION] of the Act enjoins the Court to presume that the holder of the cheque received it for discharge of any debt or liability.
2. [PRECEDENT] wherein it has held that the presumption mandated by [SECTION] of the Act does indeed C.C.No.1993/201[SECTION] include the existence of legally enforceable debt or liability.
This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However there can be no doubt that there is an initial presumption which favours the complainant. [SECTION] of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While [SECTION] of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under [SECTION] is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by [SECTION] can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the C.C.No.1993/201[SECTION] construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard of proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under [SECTION], the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
3. Smt. [ENTITY] -vs- Smt. [ENTITY], reported in 2010 Crl. L. J. 2[SECTION]05 wherein it has held that it is true that accused is not required to lead evidence beyond all reasonable doubts, but C.C.No.1993/201[SECTION] satisfactory evidence of rebuttal must be such which would satisfy the minds of prudent person upon preponderance of probability in respect of case in defence.
4. Shri [ENTITY] -vs- Shri [ENTITY], reported in [PRECEDENT] wherein it has held that [ACT]
- [SECTION] - Complaint under - Dishonour of cheque for Rs.48,000/- for insufficient funds' - Notice sent by Registered post was received by some other person - Postman was not examined - Accused denied receipt of notice and legally enforceable debt - Cheque was Type written - Signature of accused was verified with Banker before presumption - Trial Court though held that service of notice as sufficient dismissed the complaint on ground of not proving the legally enforceable debt.
11. It is pertinent to note here that, the accused has contended that he is not liable to pay any amount to the complainant.
12. It is significant to note here that, the entire burden lies upon the complainant to substantiate that the accused is liable to pay him C.C.No.1993/201[SECTION] a sum of Rs.[SECTION],65,02[SECTION]/-. It is pertinent to note here that, the complainant in her complaint and in EX.P4 - the Legal notice issued to the accused has not specifically mentioned when the accused had placed order for purchasing the materials. It is significant to note here that, the PW1 in his examination-in-chief has also not deposed that when the accused had placed the purchase order.It is pertinent to note here that, in absence of any material particulars the contentions of the complainant and PW1 that the accused is liable to pay them a sum of Rs.[SECTION],65,02[SECTION]/- cannot be believed and accepted.
It is pertinent to note here that, the PW1 has got marked the Letter issued by the accused company to him dated:-
11.11.2016 at EX.P9 to substantiate that there was a financial transaction between the complainant company and accused company and elicited from the accused that one Shri [ENTITY] had signed on it. It is pertinent to note here that, the complainant in her complainant and in EX.P4 has not mentioned anything about EX.P9. It is significant to note here that, from perusal of EX.P9 it is not forthcoming when the accused had placed the purchase order.
It is pertinent to note here that the EX.P9 will not come to the aid C.C.No.1993/201[SECTION] of the complainant. It is pertinent to note here that, the complainant except EX.P9 has not produced before the Court any other document such Tax invoice, Ledger extract, etc., to substantiate that the accused had placed the purchase order and he is liable to pay her the alleged amount. It is pertinent to note here that, in absence of any cogent, reliable and material evidence the contentions of the complainant and PW1 cannot be believed and accepted.
It is pertinent to note here that, the complainant in her complaint and in EXP4 has not specifically mentioned when the accused had transacted with her company. It is pertinent to note here that, PW1 in his examination - in - chief has also not mentioned when the accused had transacted with the complainant. It is significant PW1 in his cross-examination in page No.6 at 6th line has specifically deposed that, QU FU zj, R ZguAi U DgU Pg wP vz Dg PAAiAU J vz g irgwgAz z irgAz C.C.No.1993/201[SECTION] zP Q z irgzV vg. Aii APAz Aii APzgU DgAi PAAiAU g irgvAz zj z irgAzg jAi.
It is significant to note here that, the PW1 in his cross- examination in page No.2 at 5th line has deposed that, QU FU gAsAz EAigU DgAi PAAiAU J vz g irgwj JAz PzP Q z 5 PAz 6 P vzgU JAz Azgz, 20 P gU l JAz vg.
It is further significant to note here that, the PW1 in his cross-examination in page No.2 at 16th line has further deposed that, QU FU Pg DgAi zj 20 P gU U J t wgvgAz C.C.No.1993/201[SECTION] PzP Q DgAi ig t vU Pnz Dzg, jAiiV gAz vg.
It is pertinent to note here that, from said evidence of the PW1 it clearly appears that he is not aware of the facts of the present case and has falsely deposed before the Court. It is pertinent to note here that, as stated above in absence of any material particulars the contentions of the complainant and PW1 that the accused is liable to pay them a sum of Rs.[SECTION],65,02[SECTION]/- cannot be believed and accepted.
It is pertinent to note here that, as stated above the accused in his examination-in-chief has specifically contended that he is not liable to pay any amount to the complainant and in cross- examination of the PW1 has taken a defense that he had paid a sum of Rs.3[SECTION],00,000/- to the complainant. It is pertinent to note here that, the accused in support of his contentions has mainly relied upon EXs.D1 to 3. It is pertinent to note here that, EX.D1 is the Account statement of the accused company - M/s. Vinayaka Enterprises pertaining to Corporation Bank from 01.11.2013 to C.C.No.1993/201[SECTION] 31.01.201[SECTION], EX.D2 is the Account statement of the accused company M/s. Vinayaka Enterprises pertaining to Punjab National Bank from 19.0[SECTION].2012 to 30.05.2014 and EX.D3 is the Account statement of the accused company pertaining to Punjab National Bank. It is pertinent to note here that, from perusal of EXs.D1 to 3 it clearly appears that the accused on various dates had transferred the amount to the account of the complainant company. It is significant to note here that, the accused with cogent evidence has rebutted the case of the complainant. It is significant to note here that, the complainant has failed to prove the existence of legally recoverable debt.
13. It is significant to note here that, the complainant has specifically contended that the accused to discharge his legally enforceable debt had issued in her favour a Cheque bearing No.[SECTION][SECTION]65[SECTION]9 dated:-03.08.2016 for a sum of Rs.[SECTION],65,02[SECTION]/- drawn on Corporation Bank, Peenya Industrial Estate branch, Bengaluru - 58
- EX.P2.
14. It is pertinent to note here that, the accused in cross - examination of PW1 has specifically contended that, he issued the C.C.No.1993/201[SECTION] cheque question in favour of PW1 as a security. It is to be noted here that, from perusal of EX.P9 it clearly appears that the accused company had issued the cheque in question in favour of the complainant company as a security and the said fact has been admitted by the PW1 in his cross-examination in page No.9 at 6th line has specifically admitted the said fact. It is pertinent to note here that, for the sake of convenience the said admission of PW1 has re-iterated as under:-
QU FU -9 g m l Am UgAm ZP JAz z iqVgvz JAz zP Q z JAz vg.
It is pertinent to note here that, from the said admission of PW1 it clearly appears that the accused had not issued the cheque in question in favour of the complainant to discharge his legally enforceable debt. It is pertinent to note here that, from overall evidence of the PW1 it clearly appears that the accused had paid the entire amount to the complainant and he is not liable to pay her a sum of Rs.[SECTION],65,02[SECTION]/-. It is pertinent to note here that, C.C.No.1993/201[SECTION] the complainant has failed to prove the existence of legally recoverable debt. It is pertinent to note here that, in view of My above all findings and without much discussion I hold that, the complainant has failed to prove that the accused to discharge his legally enforceable debt had issued in her favour EX.P2. In view of the same, point No.1 is answered in the [ACT].
15. Point No.2:- It is specific contention of the complainant that, she presented the EX.P2 for encashment in bank and on 10.10.2016 the State Bank of Mysore, Rajarajeshwarinagar branch, Bengaluru had returned with the shara as 'Funds Insufficient'.
It is pertinent to note here that, the PW1 in his evidence has got marked the Cheque return memo issued by the said Bank at EX.P3.
It is significant to note here that, as discussed on point No.1, the complainant has failed to prove that the accused to discharge his legally enforceable debt had issued in her favour EX.P2 and if such being the case, the question of committing the offence by the accused under [SECTION] of the [ACT], do not arise at all. It is pertinent to note here that, in view of My C.C.No.1993/201[SECTION] above all findings and without much discussion I hold that, the complainant has failed to prove that the accused has committed the offence punishable under [SECTION] of the [ACT]. In view of the same, point no.2 is answered in the [ACT].
16. It is pertinent to note here that, the Learned counsel for the accused has vehemently canvassed the arguments that the complainant in present case has not impleaded his company Vinayaka Enterprises and it's other directors as a parties and in view of the same the present complaint is not maintainable.
1[SECTION]. It is pertinent to note here that, the Learned counsel for the accused in view of his aforesaid contentions has mainly relied upon the following decisions:-
1. N. Harihara Krishnan -vs- J. Thomas, reported in AIR 201[SECTION] Supreme Court 4125 wherein it has held that [ACT] (26 of 1881), [SECTION], [SECTION] -
Offence by company - Directors/other officers of company cannot be prosecuted alone - Arraigning company as accused is condition precedent for their prosecution.
C.C.No.1993/201[SECTION]
2. [PRECEDENT] wherein it has held that [ACT] - [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] and [SECTION] - Criminal liability for dishonour of cheque drawn by company - Officers of company when may be implicated - Extent of deeming fiction in [SECTION] - Mandatory requirement of impleading company as one of the accused - Director or authorized signatory of cheque - Prosecution against, without arraigning of company as accused, held, not maintainable.
18. It is pertinent to note here that, in the instant case from perusal of EX.P2 it appears that it was issued on behalf of Vinayaka Enterprises. It is further significant to note here that, the accused in his cross - examination in page no.4 has specifically deposed one Shri [ENTITY] is one of the partner of his said company. It is pertinent to note here that, in the instant case the complainant has not impleaded the said Vinayaka Enterprises and the said partner as a parties to the present case and in view of the same the present complaint is not maintainable.
C.C.No.1993/201[SECTION]
19. Point No.4:-That, as discussed on points No.1 and 2, I proceed to pass the following:-
ORDER That, acting under [SECTION] of [ACT], the accused is acquitted for the offence punishable under [SECTION] of the [ACT].
That, the accused shall comply with provisions of [SECTION] of [ACT].
(Dictated to stenographer, transcribed by her, revised by me and then pronounced by me in the open court on this the 14th day of September 2018) ([ENTITY]) XXII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of witnesses examined on behalf of complainant:-
PW.1 : Shri. [ENTITY] s/o Late [ENTITY].
List of exhibits marked on behalf of complainant:-
C.C.No.1993/201[SECTION] Ex.P1 : General Power of Attorney;
Ex.P2 : Original cheque; Ex.P2(a) : Signature of the accused; Ex.P3 Cheque return memo; Ex.P4 : Legal notice dated:-02.11.2016; Ex.P5 : Postal receipt; Ex.P6 : Postal acknowledgement; Ex.P[SECTION] : Form VAT [SECTION]; Ex.P8 : Registration certificate; Ex.P9 : Letter dated:-11.11.2016 and Ex.P10 : RPAD cover.
List of witnesses examined on behalf of the accused:- DW.1 : Shri [ENTITY] s/o [ENTITY].
List of exhibits marked on behalf of the accused:-
Ex.D1 : Account statement pertaining to Corporation Bank; Ex.D2 : Account statement pertaining to Punjab National Bank and Ex.D3 : Account statement pertaining to Punjab National Bank. C.C.No.1993/201[SECTION]
XXII Addl. Chief Metropolitan Magistrate, Bengaluru.