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2012 DIGILAW 42 (KAR)

C. Boregowda and Company v. K. M. Basavaraju

2012-01-12

K.N.KESHAVANARAYANA

body2012
JUDGMENT K.N. KESHAVANARAYANA, J.—This appeal by the complainant is directed against the judgment and order dated 3.6.2006 passed by the Principal Civil Judge (Jr.Dn.) and JMFC at Maedya In C.C. No. 877/2008 acquitting the respondent-accused of the charge levelled against him for the offence punishable under Section 138 of the Negotiable Instrument Act, (for short, ‘N.I. Act’). 2. The appellant filed a private complaint under Section 200 of Cr.P.C. alleging offence punishable under Section 138 of the N.I. Act against the respondent inter alia contending that the complainant is the wholesale dealer of fertilizers; that the accused was a regular customer of the complainant being a retail dealer of the fertilizer, carrying on business at Bettadapura in Periyapatna Taluk of Mysore District; that during the course of the regular business transaction, the accused purchased certain quantity of fertilizer from the complainant on credit basis on 7.7.2011 vide Invoice/Bill No. 960 and again on 14.7.2001, vide Bill No. 973 and after payment of the part of the amount by way of cash, a sum of Rs. 87,250/- was due and outstanding from the accused to the complainant as per the books of account maintained by the complainant during the regular course of business; that after several reminders for discharge of the amount due and outstanding, the accused issued cheque bearing No. 124203 dated 11.10.2001 for Rs. 87,250/- drawn on Andhra Bank, Devaraja Urs Road, Mysore, in favour of the complainant for the discharge of the entire amount due and outstanding by him to the complainant; that on presentation of the said cheque, the same was returned unpaid with the Banker’s endorsement ‘Funds Insufficient’ that the complainant on receipt of the intimation from his banker about the dishonour of the cheque, issued notice to the accused informing him about the dishonour of cheque and called upon him to pay the amount covered under the cheque within the statutory period. However, since there was an error in mentioning the balance amount covered under one of the Invoices/Bills, No. 960 In notice Issued on 27.10.2001, a corrigendum notice was issued on 3.1.12001; that though the respondent- accused received the said notice, has failed to comply with the demands made therein, thereby the accused is guilty of the offence punishable under Section 138 of the N.I. Act. 3. 3. On his appearance before the learned Magistrate, the accused pleaded not guilty for the accusation made against him and claimed to be tried. In support of its case, the complainant examined its Managing Partner as P.W. 1 and got marked Exs. P1 to P18 and in support of his defence, the accused examined himself as DW. 1 and got marked Exs. D1 to D5, which are the documents produced by this very complainant in C.C. 455/2005 filed against this very accused alleging the offence under Section 138 of the N.I. Act In respect of another cheque. 4. As could be seen from the tenor of the cross-examination of P.W. 1 and also the assertion on the part of the accused in his evidence, the defence of the accused was that he commenced business transaction with the complainant during the year 1997-98 and at that time, as insisted by the complainant, he delivered two signed blank cheques, viz., cheque bearing Nos. 124202 and 124203 drawn on Andhra Bank, Devaraj Urs Road, Mysore, as security and subsequently in the year 1999 he stopped transacting with the complainant and in spite of his repeated requests and demands, the complainant did not return the signed blank cheques and those cheques have been subsequently misused and one of those two cheques is the subject matter of this proceeding. Thus, according to him, he was not due any amount to the complainant towards the value of the fertilizer and that the cheque in question was not issued for discharge of any liability due by him to the complainant. 5. On hearing both sides and on assessment of oral as well as documentary evidence, the learned Magistrate by the judgment under appeal acquitted the accused of the charge levelled against him. Aggrieved by the said judgment of acquittal, the complainant is in appeal before this Court. 6. I have heard the learned counsel appearing for the appellant as well as the learned counsel for the respondent. Perused the records secured from the Court below as well as the judgment under appeal. 7. Aggrieved by the said judgment of acquittal, the complainant is in appeal before this Court. 6. I have heard the learned counsel appearing for the appellant as well as the learned counsel for the respondent. Perused the records secured from the Court below as well as the judgment under appeal. 7. It is the submission of the learned counsel for the appellant that the judgment under appeal is perverse and illegal inasmuch as the learned Magistrate has failed to consider the material evidence on record which dearly establishes that the cheque in question could not have been delivered to the complainant as stated by the accused in the year 1997-98 since the apparent tenor of the cheque itself indicates that the cheque leaf was printed by the concerned bank only in the year 2000. It is his further submission that the learned Magistrate has failed to draw presumption under Section 139 of the N.I. Act that the complainant being the drawee of the cheque received the same for discharge of liability due by the accused, who was the drawer of the cheque and such presumption would extend even to the existence of the liability. It Is his further submission that the learned Magistrate has completely omitted to take into consideration the effect of document marked as Ex. P18 admitted by the accused, wherein he in categorical terms, has admitted the business transaction with the complainant and towards the amount due and outstanding, he having issued the cheque in question and the same having been dishonoured and sought for time to repay the amount covered under the cheque and that non-consideration of this material document has resulted in erroneous judgment of acquittal. It is also his submission that the findings recorded by the learned Magistrate that the documents produced by the complainant do not establish the supply of fertilizer to the accused under the two Invoices/Bills-Exs. P11 and P12 on the ground that those invoices/bills do not contain the signature of the accused, is erroneous and contrary to the very document, since those two documents contain the signature of the receiver of the goods and the evidence on record would indicate that the accused has been in the habit of subscribing his signatures differently at different stages. It is his further submission that the finding of the learned Magistrate that there is no proper sendee of notice of demand is also erroneous and contrary to the evidence on record, since the postal acknowledgement marked as Ex. P7 would clearly establish that the notice sent as per the original of Ex. P3, has been served on the accused and it is only the corrigendum issued as per the original of Ex. P4 dated 3.11.2001 which has been returned un-served with postal shara ‘not found during delivery time’ as evidenced by Ex. P8, According to him, on this basis, the learned Magistrate could not have held that there is no service of notice on the accused as required by Section 138 of the N.I. Act. Under these circumstances, the learned counsel submitted that the judgment under appeal is liable to be set aside and the accused is liable to be convicted for the offence for which he has been charged. 8. Per contra, learned counsel for the respondent sought to justify the judgment under appeal and contend that the judgment under appeal does not suffer from any perversity or illegality and therefore, it does not call for interference by this Court, It is his submission that the learned Magistrate on proper appreciation of oral and documentary evidence has recorded a finding that the case of the complainant regarding supply of fertilizer to the accused under two Invoices/Bills-Exs. P11 and P12 is not established and that the defence plea that the cheque in question had been delivered to the complainant during 1997-98 is highly probable and there is absolutely no perversity in the said finding. It is his further submission that the finding recorded by the learned Magistrate with regard to the legality of the notice and its service on the accused are In accordance with the evidence and therefore, it does not call for interference by this Court, Therefore, the learned counsel sought for dismissal of the appeal. 9. In the facts and circumstances of the case and in the light of the submissions made by the learned counsel on both sides, the points that arise for my consideration are,— (i) Whether the judgment under appeal suffers from perversity or illegality calling for interference by this Court? (ii) Whether the learned Magistrate is justified in acquitting the accused? 10. In the facts and circumstances of the case and in the light of the submissions made by the learned counsel on both sides, the points that arise for my consideration are,— (i) Whether the judgment under appeal suffers from perversity or illegality calling for interference by this Court? (ii) Whether the learned Magistrate is justified in acquitting the accused? 10. I have bestowed my serious considerations to the submissions made on both sides. As could be seen from the evidence on record, the accused has not disputed the fact that the cheque in question relates to the account held by him in Andhra Bank, Devaraja Urs Road Branch, Mysore and it bears his signature. It is also not in dispute that the cheque in question when presented for encashment was returned with the Banker’s endorsement ‘Insufficient Fund’. Under Section 189 of the N.I. Act, the Court has to draw a presumption that the holder of the cheque has received the same for discharge in whole or part of any debt or liability due to him from the drawer of the cheque. Of course the said presumption is rebuttable one. It is for the drawer of the cheque to rebut the presumption either by positive evidence led by him or by the circumstances brought out on record even in the evidence of the complainant. 11. As noticed supra, the defence of the accused was that, the cheque in question was delivered in the blank state to the complainant when the accused commenced his business transaction with the complainant. From this defence it is clear that the accused has admitted that he had business transaction with the complainant and such business transaction was commenced in the year 1997-98. As could be seen from the judgment under appeal, the learned Magistrate acquitted the accused mainly on three grounds, namely,— (i) the evidence placed by the complainant does not establish the delivery of fertilizer mentioned In Exs. P11 and P12 to the accused; (ii) The defence plea that the cheque in question had been delivered to the complainant in the year 1997-98 is highly probable: and (iii) there was no proper sendee of notice as required by law. As noticed supra, the accused admits that he had business transaction with the complainant. P11 and P12 to the accused; (ii) The defence plea that the cheque in question had been delivered to the complainant in the year 1997-98 is highly probable: and (iii) there was no proper sendee of notice as required by law. As noticed supra, the accused admits that he had business transaction with the complainant. The complainant is the wholesale dealer in fertilizer whereas, the accused is the retailer carrying on his business in Bettadapura of Periyapatna Taluk. Mysore District, P.W. 1, who is the Managing Partner of the complainant-firm in his evidence has reiterated the facts stated in the complaint. According to P.W. 1, in the beginning the accused was purchasing fertilizer from the complainant against payment, but after some time he was allowed to purchase fertilizer on credit basis. The said evidence on the part of P.W. 1 has not been seriously challenged in the cross-examination. Exs. P11 and P12 are the copies of the invoices/bills raised by the complainant favouring the accused for supply of certain quantity of fertilizer. The bill book is maietaieed in the regular course of business. Exs. P11 & P12 bears some signature at the relevant place meant for the signature of the customer. According to P.W. 1, the signature found on Exs. P11 and P12 at the place provided for customers signature are that of the accused. Of course, the accused has denied the same. However, according to P.W. 1. the accused put his signatures on Exs. P11 and P12 in his presence. The learned Magistrate by comparing those signatures with the admitted signature of the complainant has found that they are not similar. On that basis, the learned Magistrate has proceeded to hold that the signatures found on Exs. P11 and P12 are not that of the accused. In this regard, the learned Magistrate has failed to consider the evidence of P.W. 1 that the accused is in the habit of subscribing his signatures differently at different stages, Ex. P13 is the account book maintained by the complainant in the usual course of business. The entries found in Ex. P13 in respect of the accused would show that, on 7.7.2001 goods worth of Rs. 1,57,750/- as mentioned in Ex. P11 and goods worth Rs. 69,000/- on 14.1.2001 as mentioned in Ex. P13 is the account book maintained by the complainant in the usual course of business. The entries found in Ex. P13 in respect of the accused would show that, on 7.7.2001 goods worth of Rs. 1,57,750/- as mentioned in Ex. P11 and goods worth Rs. 69,000/- on 14.1.2001 as mentioned in Ex. P12 were supplied to the accused on credit basis and upon part payment made by the accused by way of cash, he was found due and outstanding Rs. 1,57,850/-. Ex. P14 is the certified extract of the relevant entries in Ex. PIS concerning the accused. According to P.W. 1, even Ex. P14 bears signature of the accused. The very document, produced by the accused and marked as Ex. D1 to D4 would falsifies his contention that he stopped transacting business with the complainant in 1999 itself since even in the year 2004 as evidenced by Exs. D1 to D4, the accused had business transaction with the complainant. Therefore, there are no reasons for discarding the evidence of P.W. 1 with regard to supply of fertilizer to the accused on. credit basis as per the Invoices/Bills-Exs. P11 & P12, The say of the accused, that the cheque in question had been delivered to the complainant in blank state in the year 1997-98 cannot be accepted since the apparent tenor of Ex. P1 would indicate that the said cheque leaf had not even been printed by the Banker in the year 1997-98, since the said cheque leaf has been printed in the year 2000 onwards. The learned Magistrate has omitted to take into consideration this inherent evidence available in Ex. P1 itself which completely negates the defence plea about delivery of cheque to the complainant in the year1997-98. This omission on the part of the learned Magistrate has resulted in recording an erroneous finding of accepting the defence plea regarding delivery of the blank cheque in the year 1997-98. If the defence plea in this behalf can not be accepted, then It has to be held that the presumption available under Section 139 of the N.I. Act in favour of the complainant that the complainant, as drawee of the cheque received the same for discharge of liability due by the drawer has not been rebutted. If the defence plea in this behalf can not be accepted, then It has to be held that the presumption available under Section 139 of the N.I. Act in favour of the complainant that the complainant, as drawee of the cheque received the same for discharge of liability due by the drawer has not been rebutted. Therefore, even If there is some deficiency in the evidence of the complainant with regard to the delivery of the goods, the presumption would come to the aid of the complainant and in the absence of any acceptable evidence by the accused as drawer of the cheque, as to under what circumstances the cheque relating to the account held by him with the Banker was found in the custody of the complainant, it has to be held that it was delivered to the complainant towards the discharge of liability due by the accused to the complainant, The accused also admits that the name of the payee on Ex. P1 has been written by him. Therefore, there is sufficient evidence to indicate that the cheque-Ex. P1 was issued by the accused for discharge of liability due by him to the complainant on account of the supply of fertilizer on credit basis. Admittedly this cheque was dishonoured when presented for encashment. 12. The last ground on which the learned Magistrate has acquitted the accused is with regard to the service of notice, Ex. P3 is the copy of the legal notice issued on 27.10.2001, Ex. P2 is the memo issued by the Andhra Bank, Devraja Urs Road Breach to Indian Bank, Mysore, through which the cheque in question was sent for collection. This memo is dated 16.10.2001. Assuming for the purpose of argument, Memo-Ex. P2 issued by Andhra Bank, the Banker of the accused, was received by the complainant on the very same day, the notice issued on 27.10.2001 was within the period of limitation provided under law, which was in force as on that date. As per the law in force as on that, date, the notice was required to be issued within 15 days from the date of receipt of intimation from the Banker, Ex. P5 Is the postal receipt for having sent the notice by registered post, which establishes that it was posted on 29.10.2001, therefore, the notice was in time. Ex. As per the law in force as on that, date, the notice was required to be issued within 15 days from the date of receipt of intimation from the Banker, Ex. P5 Is the postal receipt for having sent the notice by registered post, which establishes that it was posted on 29.10.2001, therefore, the notice was in time. Ex. P7 is the postal acknowledgement for having served the notice as per original of Ex. P3 on the accused, on 30.10.2001. As could be seen from the contents of Ex. P3, there is a clear mention about the accused having issued the cheque in question for Rs. 87,250/- on 11.10.2001 and It is dishonoured when presented for encashment on account of Insufficiency of fund and the accused has been called upon to pay the amount covered under the cheque within 15 days from the date of sendee of notice. Ex. P4 is the copy of the corrigendum notice to correct certain typographical error that had crept-in in the notice dated 27.10.2001. In the notice dated 27.10.2001 while mentioning the amount due towards the supplies made under Invoice/Bill No. 960 it had been mentioned as Rs. 8,250/- instead of Rs. 18,250/- and that was sought to be correctly stated in the notice-Ex. P4. Therefore, notice issued as per the original of Ex. P4 cannot be termed as the notice as required by Clause (b) of Section 138 of the N.I. Act. The learned Magistrate holding that Ex. P4 is the notice of demand and since admittedly, the original of Ex. P4 has not been served on the accused, has held that there is no service of notice of demand on the accused. This finding is erroneous and contrary to the contents of the document-Ex. P7. Merely because the accused has denied having received the notice, the learned Magistrate could not have refused to place reliance on Ex. P7. The notice has been properly addressed to the accused and in normal course of the official duties, the postal authorities presumed to have delivered the same to the addressee and it bears the signature of the addressee. As per Section 114(e) of the Indian Evidence Act, there is presumption as to the regularity of the judicial and official acts. Of course, it is a rebuttable presumption. The accused has not placed any rebuttable evidence to show that the acknowledgement-Ex. As per Section 114(e) of the Indian Evidence Act, there is presumption as to the regularity of the judicial and official acts. Of course, it is a rebuttable presumption. The accused has not placed any rebuttable evidence to show that the acknowledgement-Ex. P7 does not bear his signature. Therefore, the learned Magistrate is not justified in holding that there was no proof regarding service of notice on the accused. The said finding is perverse being contrary to the material evidence on record and therefore, it cannot be sustained, Ex. P18 is stated to be an acknowledgement of debt made by the accused and duly signed by him. Ex. P18 was confronted to him during his cross-examination and he admits the signature appearing on the revenue stamp found on Ex. P18. However, in further examination-in-chief, he has stated that his signature was obtained on a blank paper and the same has been subsequently filled-up. In further cross-examination he has admitted that he is not in the habit of subscribing signatures on the blank papers. As per the contents of Ex. P18, he admits the amounts due by him to the complainant to the extent of Rs. 87,250/- and he having issued the cheque in question for the discharge of the said liability and the dishonour of the cheque. No doubt, this document has come into existence on 24.2.2008 by which date the complainant had already presented the complaint, but the accused had not yet been served with the summons, as the earlier summons issued to the accused had been returned un-served. Having regard to the fact that the accused has admitted his signature found on Ex. P18 and in the light of his admission that he is not in the habit of subscribing his signature to any blank papers, there is no difficulty in accepting Ex. P18 as an undertaking given by the accused, wherein he has admitted his liability, issuance of the cheque and his obligation to pay amount covered under the cheque. Perusal of the judgment under appeal indicates that the learned Magistrate has not even made any reference to this document-Ex. P18. The effect of Ex. P18 has not at all been taken into consideration. Thus, the learned Magistrate has omitted to take into consideration the material document produced on record before recording the findings of acquittal. Perusal of the judgment under appeal indicates that the learned Magistrate has not even made any reference to this document-Ex. P18. The effect of Ex. P18 has not at all been taken into consideration. Thus, the learned Magistrate has omitted to take into consideration the material document produced on record before recording the findings of acquittal. Thus, the findings recorded by the learned Magistrate are contrary to the material documents on record and on account of non-consideration of the material evidence, as such, the judgment of acquittal is perverse. 13. Having regard to the above discussion 1 am of the considered opinion that the learned Magistrate is not justified in acquitting the accused, therefore, the accused is liable to be convicted for the offence punishable under Section 138 of the N.I. Act in respect of the cheque in question. 14. In the result, the appeal is allowed. The judgment and order dated 3.6.2006 passed by the Principal Civil Judge (Jr. Dn.) and JMFC, Mandya, acquitting the respondent-accused is hereby set-aside. The respondent-accused is convicted for the offence punishable under Section 138 of the N.I. Act. 15. The cheque in question is dated 11.10.2001. 16. More than 10 years have elapsed from the date of the cheque. Even on the basis of the moderate interest at the rate of 7 to 8% paid by the banks on long terms deposit, the interest on the amount covered under the cheque up to this date would works-out to approximately Rs. 62,000/-. Therefore, the respondent-accused is sentenced to pay fine of Rs. 1,50,000/- (Rupees one lakh fifty thousand only) and in default to pay, to undergo simple imprisonment for six months. On realisation of the fine amount, a sum of Rs. 1,40,000/- (Rupees one lakh forty thousand only) shall be paid to the complainant as compensation.