IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF DECEMBER, 2019 BEFORE THE HON'BLE MR. JUSTICE H.P. SANDESH CRIMINAL APPEAL NO.776 OF 2018 BETWEEN:
G.RADHAKRISHNA, PROPRIETOR OF M/S. VISHAL ENTERPRISES, NO.2457, 17TH CROSS, 9TH MAIN, BANASHANKARI 2ND STAGE, BENGALURU-560 070.
...APPELLANT (BY SRI. P.PRASANNA KUMAR, ADVOCATE) AND:
MRS.LAKSHMI, PROPRIETOR OF M/S. ANJANA CEMENTS, SHOP NO.5, RAGHU BLDGS., NO.108/1, HORAMAVU MAIN ROAD, BANASWADI, BENGALURU-560 043.
…RESPONDENT (BY SRI. R.CHANDRASHEKAR, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT DATED 14.03.2018 PASSED BY THE XVI ADDL.C.M.M., BENGALURU IN C.C.NO.4180/2014 – ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT.
THIS CRIMINAL APPEAL COMING ON FOR FURTHER ARGUMENTS THIS DAY, THE COURT DELIVERED THE FOLLOWING:
J U D G M E N T This appeal is filed challenging dismissal of the complaint passed in C.C. No.4180/2014 dated 14.03.2018 on the file of 16th Additional Chief Metropolitan Magistrate, Bengaluru City.
2. The parties in this appeal will be referred to as the complainant and the accused for the convenience of the Court.
3. The complainant filed complaint under Section 138 of the Negotiable Instruments Act, 1881, (for short, ‘the Act’) contending that the complainant is a dealer in wholesale supply of cement of various brands. The accused is doing the business wherein, the complainant used to supply cement of various brands as per the requirement/order of the former. During the course of business, he has supplied to the accused on credit basis 9040 bags of KCP, Anjani, Bhavya Brands cement starting from 10.04.2013 to 04.06.2013 amounting to Rs.24,20,250/- as per the tax invoices which are 21 in number. Towards the payment of her liability and towards the supply of cement by the complainant, the accused has issued a cheque bearing No.000625 dated 23.10.2013 for the above said amount assuring that the same would be honoured on its presentation. The said cheque was presented and the same was dishonoured on 24.10.2013. The complainant left with no other alternative, caused the legal notice dated 13.11.2013. Despite service of the same, the accused has neither replied nor has she paid the cheque amount. Hence, the complaint is filed.
4. In pursuance of the complaint, notice was issued against the accused and he did not plead guilty and claimed trial. Hence, the complainant examined the special power of attorney holder of the complainant as PW.1 and he produced the documents as per Exs.P1 to P48. The statement of the accused was recorded under Section 313 of the Criminal Procedure Code, 1973. Thereafter, the accused also led his defence evidence and he got marked the documents as per Exs.D1 to D5. The Court below after recording the evidence and also considering the material on record, dismissed the complaint disbelieving the case of the complainant and hence, the present appeal is filed before this Court.
5. The grounds urged in the appeal are that the learned Magistrate failed to consider both oral and documentary evidence on record. The complainant had produced documentary evidence in the form of 21 tax invoices for having supplied the cement bags and the learned Magistrate has failed to appreciate the same. He has simply brushed aside the said documents, which resulted in miscarriage of justice.
6. It is stated that the learned Magistrate while accepting Ex.D4 indicating VAT registration of the accused, held that the accused commenced her business on 28.06.2011 and further held that the complainant could not have supplied the material to the accused on 19.06.2011 much prior to VAT registration. The learned Magistrate has failed to appreciate that the presence or absence of VAT registration certificate is never a consideration for supply of cement by the complainant to the accused. The said legal aspect has not been considered by the learned Magistrate while considering the material on record. The learned Magistrate also passed an order that the invoices which were produced by the complainant are not in series and the learned Magistrate has failed to appreciate that the bills drawn by the complainant, who is a wholesale supplier, will be plenty in number as the complainant would be supplying goods and drawing bills as and when orders are placed by different customers. Consequently, bills in respect of any one customer which are drawn over a period of time will not be in series. The learned Magistrate has failed to appreciate the tax invoices at Exs.P9 to P29 and stock statements at Exs.P36 to P38. This aspect has not been appreciated by the learned Magistrate properly. The learned Magistrate has relied upon Exs.D1 and D2 and has accepted the case of the accused that the payment was made to the tune of Rs.5,69,66,250/-, which includes the amount in question covered under the cheque. The learned Magistrate failed to appreciate that the tax invoices at Exs.P9 to P29 and other documents are in respect of supplies, which are not covered under Exs.D1 and D2. With regard to this aspect, the learned Magistrate has committed grave error and the same has resulted in miscarriage of justice. The Court below also did not draw the presumption under Section 139 of the Act. Viewed from any angle, the dismissal of the complaint is not sustainable in the eye of law.
7. The learned counsel appearing for the complainant in his argument, he vehemently contended that the cheque, which was presented was returned with an endorsement “insufficient funds”. The main contention of the accused is that the notice issued was not served on him and he has not clarified as to whether he has left the said address. The document - Ex.D5 is self-serving document and legal notice was sent to the same address as maintained by the accused. The transaction is only in between the period from 04.06.2013 to 14.06.2013. Exs.P9 to P29 shows that the cement bags were supplied to the accused and he did not pay the amount. The learned Magistrate proceeded on an erroneous approach accepting the evidence of the accused and not considering the evidence of the complainant and hence, the impugned judgment requires interference by this Court.
8. The learned counsel appearing for the accused in his argument, he vehemently contended that the accused was not carrying on the business in the address shown in the legal notice which is marked as Ex.P4. The complainant also has not placed any material for having served notice. Exs.P9 to P29 are all invoices and no separate bills are issued for having supplied the material in terms of Exs.P9 to P29. There is no acknowledgement for having supplied the material to the accused in terms of Exs.P9 to P29. These documents are fabricated documents. To substantiate that the material was supplied in terms of Exs.P9 to P29, the complainant has not placed any material before the Court. Ledger entries as per Ex.P39(a) and Ex.P46 varies from Exs.P9 to P29 and same are not in respect of any supply made to the accused. Exs.P9 and P10 mismatches with the documents which have been placed by the accused. The date of Exs.P9 to P29 also varies. The same is not in order and the invoice numbers also vary. On considering the dates of invoices, it is clear that the very transaction of the complainant with the accused cannot be believed and in the absence of any cogent material before the Court for having supplied cement to the accused, the Court below has rightly dismissed the complaint.
9. Learned counsel appearing for the accused in support of his argument has relied upon the judgment of the Hon`ble Apex Court in the case of Indus Airways Private Limited and Others vs. Magnum Aviation Private Limited and another reported in (2014) 12 Supreme Court Cases 539. The Apex Court in this judgment held that with regard to dishonor of post dated cheque made towards advance payment, existence of legally enforceable debt or other liability is an essential condition for constitution of offence under Section 138 of the Act. It was further held that the cheque issued for advance payment in the said case did not show any existing liability in failed transaction as agreed materials were not supplied and hence, no liability under Section 138 of the Act was made out. Learned counsel has also relied upon the judgment of High Court of Calcutta in the case of Shubra Mitra vs. Dipankar Saha reported in LAWS (CAL) 2012 7 72 and brought to my notice para Nos.9, 10 and 14 of the said judgment. Learned counsel would contend that the cheque was given for security and in the case on hand also, cheque was obtained by the complainant from the accused as security and the same was misused and hence, the principle laid down in the said judgment is applicable to the case on hand. Learned counsel also relied upon the judgment of the High Court of Gujarat in the case of Patel Amrutbhai Narayandas vs. State of Gujarat reported in LAWS (GJH) 2012 1 168 and brought to my notice paragraph No.8 of the said judgment and contended that no notice was served on the accused. Hence, the Gujarat High Court held that since the notice was not served on the accused, the Court cannot invoke Section 138 of the N.I. Act since the complainant has not complied with the requirement of giving notice in terms of clause (b) of the proviso to Section 138 of the Act. Hence, he prayed this Court to dismiss the appeal.
10. Having heard the arguments of the learned counsel for the complainant and also the learned counsel for the accused and also the grounds urged in the appeal as well as the rival contentions urged before this Court, the points that arise for consideration of this Court are as under:
1. Whether the Court below has committed an error in dismissing the complaint in coming to the conclusion that the transaction was not proved by the complainant ?
2. Whether the impugned judgment requires interference by this Court ?
3. What order?
11. On perusal of the complaint, it discloses that it is the case of the complainant that the complainant has supplied cement bags to the tune of Rs.24,20,250/- and in response to the supply, the accused has issued a cheque dated 23.10.2013 and when the same was presented for encashment, it was dishonoured with an endorsement “Funds Insufficient” on 24.10.2013. The legal notice was sent to the accused and in spite of service of notice, she did not pay the amount. The complainant in order to substantiate the contention of issuance of legal notice, relied upon the document Ex.P4 and also produced Exs.P5 and P6, postal receipts, and Exs.P7 and P8, postal envelopes. In order to substantiate the contention of the complainant that notice has been served on the accused, no postal acknowledgement has been produced before the Court. However, the learned counsel during the course of arguments, he brought to my notice that the address mentioned in the Bank statement is the very same address mentioned in the legal notice in Ex.D5 also. The accused would contend that no notice was served on him. When the accused disputed the service of notice and when the postal receipts are produced before the Court, the complainant at least ought to have obtained an endorsement from the postal authority that the notice was served on him and no such effort was made to produce the document before the Court to show that the notice issued against the accused was served on the accused. The learned counsel appearing for the accused also relied upon Ex.D4 i.e., Form VAT-1 to show that she commenced the business in the address mentioned in No.9, 389/1, new No.2, first main road, Chikkabanasawadi village, Kasthuri Nagar, Bengaluru-43. In column No.8 of Form-VAT 1, the date of commencement of business is shown as 28.06.2011 and the residential address is also mentioned as 834, 2nd cross, 1st block, Kalyan nagar, Bengaluru-43. The learned counsel appearing for the complainant relied upon the document Ex.P5 and also bank statement produced by the complainant which shows the address as shop No.5, Raghu buildings behind Bharat Motors, Banaswadi, Bengaluru. But the question before this Court is that when the VAT certificate produced as Ex.D4 discloses the commencement of business and the business address, the complainant has to discharge his burden to prove that notice was served on the accused. The same has not been done. I have already pointed out that even the complainant did not get the endorsement from the postal department to confirm that the legal notice was served on the accused and hence, first of all for having served the notice on the accused, there is no material before the Court.
12. The second contention of the complainant is that in respect of the material supplied in terms of Exs.P9 to P29, the accused did not put any amount. On perusal of Exs.P9 to P29, the invoices are issued for having supplied the material. Learned counsel appearing for the accused brought to my notice Ex.P9, invoice, dated 04.06.2013 bearing No.876. Learned counsel has also brought to my notice Ex.P10 the invoice dated 01.06.2013 that is prior to the invoice Ex.P9 and Sl. No. is mentioned as 879.
13. The learned counsel for accused also brought to my notice Ex.P11 dated 31.05.2013, but its bill number is 866 and the main contention of the learned counsel for the accused is that these are the invoices, which are created to claim the amount from the accused and also no documentary proof is placed for having supplied the material in terms of Exs.P9 to P11. No doubt, there is a discrepancy in the bill number and the date of transaction is also between 10.04.2013 to 04.06.2013. Then, Ex.P9 according to the complainant is with regard to last supply of cement bags. Exs.P9 and P28 are one and the same (but total amount varies). Having considered the invoices, it is seen that the bill number varies with regard to the transaction and the same is not in the ascending order. The complainant except showing the account has also not placed any material before the Court for having supplied the material to the accused and that she has acknowledged the supply of cement bags made to her. The Court below has considered all these aspects while considering the material on record, both oral and documentary evidence. Learned counsel also brought to my notice document Ex.P46 and also Exs.P9 to P29 and same do not match with each other and amounts mentioned therein also do not tally with each other. The learned Magistrate also discussed in detail with regard to the mismatch of the document Ex.P46 and also invoices. The accused has also produced the document Ex.D5 containing the cheque numbers. The subject matter of Ex.D5 is 000625. This document shows that it is dated 24.05.2013. In terms of the said letter, five cheques duly signed by the accused were handed over to Mr. Rajappa towards the advance cheque i.e., continuous cheques bearing Nos.000622, 000623, 000624, 000625 and 000626. Learned counsel appearing for the complainant would contend that the document Ex.D5 is created for the convenience of the accused and no such cheque was given to the complainant as advance cheque and the document Ex.D5 does not bear any endorsement for having delivered the cheques to the complainant. On perusal of Ex.D5, no doubt there is no endorsement of the accused on the said document for having received the same. The question before the Court is with regard to supply of cement bags by the complainant to the accused and the complainant except relying upon his own statement and only self-styled document to show that cement bags have been supplied to the accused, has not produced any material. In order to show that supply of cement bags was made by the complainant to the accused, there must be an acknowledgment on the part of the accused for having received the said bags. No such material is placed before the Court. In order to prove the same, the complainant has also not placed any document to show that 9040 cement bags were supplied to the accused. The claim is to the extent of Rs.24,20,250/- and only invoices of Exs.P9 to P29 are relied upon with regard to the supply of cement bags and when such being the case, the Court below after considering the oral and documentary evidence, has rightly come to the conclusion that the complainant has not proved the very supply of cement bags to the accused. Hence, I do not find any error committed by the Court below in dismissing the complaint. The burden is on the complainant to prove that cement bags were supplied to the accused and the same has not been discharged by him by placing the material before the Court. The records also reveals that the transaction took place between the complainant and the accused to the tune of more than Rs.5,00,00,000/- and when such huge transaction is said to have taken place, it is duty of the complainant to substantiate that cement bags were supplied to the accused between 10.04.2013 to 04.06.2013. The documents relied upon by the complainant i.e., Exs.P9 to Ex.P29 also varies in number and not in the same series. Also, it is to be noted that the transaction had taken place within a span of 1½ to two months and the complainant has not offered explanation with regard to the variance in the bills and in the invoices. Hence, I do not find any error committed by the Court below in appreciating both the oral and documentary evidence.
14. So far as the other contention of the complainant that the learned Magistrate ought to have drawn a presumption under Section 139 of the Act is concerned, no doubt, the Court can draw presumption, but in order to draw presumption, the complainant has to discharge his burden to prove the transaction between himself and the accused. When such being the case and when specific contention was taken by the accused that the cheque was taken as a security and the same has been misused, the complainant ought to have explained the same and the same has not been done. Hence, the question of drawing presumption under section 139 of the Act also does not arise.
In view of the discussion made above, I pass the following:
ORDER The Appeal is dismissed.
Sd/- JUDGE sma