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2023 DIGILAW 1046 (KAR)

Varavinayak Ventures v. Rajesh Sharma

2023-09-01

RAMACHANDRA D.HUDDAR

body2023
JUDGMENT 1. Appellants/accused Nos.1 to 5 have preferred this petition under Sec. 397 of Cr.P.C., challenging the judgment of conviction and sentence passed against them by the XX Additional Chief Metropolitan Magistrate, Bengaluru in C.C. No.173/2013 for the offence punishable under Sec. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'N.I. Act', for brevity) and affirmed by the LVIII Additional City Civil and Sessions Judge (CCH -59), Bengaluru in Criminal Appeal No.472/2015 dtd. 6/2/2019. 2. Parties to this appeal are referred to as per their rank before the Trial Court. Brief facts of the case are as under: 3. The respondent complainant filed a private complaint against the accused persons alleging that, complainant and one Shri. B.P. Ramesh were the partners of a partnership firm and were running a hotel under the name and style of 'M/s. Sonakshi Nati Hallimane'. Because of various reasons and financial constraints, they decided to stop their restaurant business and wanted to sell the same. Accordingly, accused Nos.1 to 5 being the partners of 'M/s. Vara Vinayak Ventures' have agreed to purchase the business set up of 'M/s. Sonakshi Nati Hallimane' situated at 65/1A, Kaikundrahalli, Sarjapura Main Road, Bengaluru-35, for a valuable consideration of Rs.25, 50, 000.00. Accused Nos.1 to 5 being the partners of the aforesaid venture entered into business purchase agreement dtd. 12/6/2012. 4. It is the case of the complainant that, as per the said agreement, accused Nos.1 to 5 initially were to pay Rs.17, 50, 000.00. Out of the said amount, Rs.12, 00, 000.00 was paid to another partner by name Shri. B.P. Ramesh by way of a D.D. and Rs.5, 50, 000.00 was paid to the complainant by way of cash. The amount remained was Rs.8, 00, 000.00. Towards payment of the said amount, accused have issued four post dated cheques for Rs.2, 00, 000.00 each mentioning the dates 15/7/2012, 15/8/2012, 15/9/2012 and 15/10/2012 respectively drawn on HDFC Bank Ltd., Chamarajpet Branch, Bengaluru. When the said cheques were presented for encashment they were dishonored with an endorsement "Payment Stopped". Therefore, the complainant was constrained to issue the statutory notice for which accused Nos.1 to 5 gave evasive reply. This complaint was filed in respect of a cheque bearing No.001614 for Rs.2, 00, 000.00 and with regard to the other cheques, separate complaints have been filed. 5. Therefore, the complainant was constrained to issue the statutory notice for which accused Nos.1 to 5 gave evasive reply. This complaint was filed in respect of a cheque bearing No.001614 for Rs.2, 00, 000.00 and with regard to the other cheques, separate complaints have been filed. 5. Learned Magistrate after following the procedure with regard to the filing of a private complaint, permitted the complainant to lead evidence to substantiate his allegations made in the complaint. 6. Accordingly, the complainant himself entered the witness box and was examined as PW.1. On his behalf Ex.P.1 to Ex.P.8 were marked. To rebut the evidence of the complainant, one Vinay representing accused Nos.1 to 5 was examined as DW.1 and on behalf of his evidence Ex.D.1 to Ex.D.17 are marked. 7. Learned Magistrate on hearing the arguments of both the side and on perusal of the records found the accused persons guilty of committing the offence under Sec. 138 of N.I. Act and sentenced all the accused persons to pay fine of Rs.3, 00, 000.00 and in default of payment of the same, it was ordered that they shall suffer simple imprisonment for three months. Out of the fine amount so realized, it was ordered to pay compensation of Rs.2, 90, 000.00 to the complainant and remaining amount of Rs.10, 000.00 was ordered to be deposited to the State towards the expenses incurred in the prosecution. 8. This judgment of conviction and sentence passed by the learned Magistrate was challenged by the accused persons before the learned LVIII Additional City Civil and Sessions Judge (CCH-59), Bengaluru in Criminal Appeal No.472/2015. The learned LVIII Additional City Civil and Sessions Judge (CCH-59), Bengaluru, by judgment dtd. 6/2/2019 dismissed the said appeal. This is how appellants are before this Court by way of revision petition. 9. It is argued by the learned counsel for the appellants Shri. Deepak B. R. that, it was a partnership firm, first of all the said partnership firm was not a registered partnership firm therefore, the complainant cannot maintain the complaint. There was no legally enforceable debt to be paid by the accused to the complainant. The notice was issued in the name of partnership firm and not in the individual capacity of the complainant. On perusal of the findings of the Trial Court it shows that, there is no application of mind by the Trial Court. There was no legally enforceable debt to be paid by the accused to the complainant. The notice was issued in the name of partnership firm and not in the individual capacity of the complainant. On perusal of the findings of the Trial Court it shows that, there is no application of mind by the Trial Court. The so called statutory notice issued by the complainant was properly replied by the accused persons. There was no business transaction with the complainant by these accused persons. It is submitted that the contents of the reply notice themselves answer the case of the complainant. The complainant has misused the cheque. Out of the total amount, Rs.17, 50, 000.00 was paid. The payment was stopped as the said cheques were issued by way of security. 10. In support of his submission, the learned counsel for appellants/accused persons relied upon the evidence so adduced by DW.1 and alleged admission of PW.1. It is submitted that the documents produced by the accused by way of defense evidence, clinchingly falsifies the case of the complainant. He relies upon the findings of the Trial Court and appellate Court which according to him are perverse and capricious and without application of mind. Therefore, he prays to allow the revision petition and to acquit all the accused persons. 11. As against this submission, the learned counsel for the complainant Smt. Priyanka Rao, also relies upon the admission of DW.1 and also the documents so produced by both the sides. It is her submission that, learned Trial Court and first appellate Court have rightly appreciated the evidence and have come to the conclusion that the accused persons have committed the offence as alleged in the complaint. 12. I have given my anxious consideration to the arguments of both sides. Meticulously perused the records. 13. This is a revision petition filed under Sec. 397 of Cr.P.C. The law is very much settled that in the Revision, the High Court cannot sit as an appellate Court and re-appreciate the evidence. 14. Before adverting to other aspects of the case, the admitted facts between both the sides have to be narrated in this judgment. 15. There was an agreement dtd. 12/6/2012 between the complainant and Shri. B.P. Ramesh as party of first part on behalf of 'M/s. Vara Vinayak Ventures' partnership firm, represented by accused Nos.1 to 5 as second party. 16. Before adverting to other aspects of the case, the admitted facts between both the sides have to be narrated in this judgment. 15. There was an agreement dtd. 12/6/2012 between the complainant and Shri. B.P. Ramesh as party of first part on behalf of 'M/s. Vara Vinayak Ventures' partnership firm, represented by accused Nos.1 to 5 as second party. 16. As per Ex.D.1, it was agreed by the accused persons to purchase the business of the complainant and another person Shri. B.P. Ramesh for Rs.25, 50, 000.00. At clause No.(iv) terms of the payment has been mentioned. It is stated that party of second part has agreed to pay the purchase consideration and accordingly Rs.17, 50, 000.00 was to be paid. Out of that amount, as per the adjustment, the said Shri. B.P. Ramesh has received Rs.12, 00, 000.00 by D.D. drawn on HDFC Bank Ltd., Chamrajpet, Bengaluru. It is recited that, the amount so paid to Shri. B.P. Ramesh would be taken into consideration as full and final settlement towards the share of Shri. B.P. Ramesh. It is further recited that, on that day, the complainant received Rs.5, 50, 000.00 by way of cash. It was agreed between the accused persons and the complainant that, the balance amount of Rs.8, 00, 000.00 was to be paid to the complainant/Rajesh Sharma by way of four cheques dtd. 15/7/2012, 15/8/2012, 15/9/2015 and 15/10/2012 as mentioned in the business purchase agreement. These factual features stated supra brought on record by both the sides are not disputed by the defense i.e., accused Nos.1 to 5. 17. The dispute lingers between the complainant and accused is to the effect that, when the complainant on receipt of the said cheques presented the same, they were dishonored with endorsement "Payment Stopped". 18. Because of the dishonour of cheques, the complainant was constrained to issue legal notice and which was evasively replied by the accused persons. 19. PW.1 being the complainant has reiterated the contents of the complaint in his evidence on oath. He has been directed with severe cross examination. He admits that the partnership firm in which himself and Shri. B.P. Ramesh are the partners is not a registered partnership firm. It is suggested that there was business agreement on 12/6/2012. Thus, Ex.D.1 is an admitted document between both the sides, with regard to the sale of restaurant business for Rs.25, 50, 000.00. He admits that the partnership firm in which himself and Shri. B.P. Ramesh are the partners is not a registered partnership firm. It is suggested that there was business agreement on 12/6/2012. Thus, Ex.D.1 is an admitted document between both the sides, with regard to the sale of restaurant business for Rs.25, 50, 000.00. It is further admitted that, out of that amount, Rs.17, 50, 000.00 was paid together to the complainant and Shri. B.P. Ramesh. It is denied that those four cheques were issued by way of security. 20. Ex.P.1 is a cheque signed by the authorized signatory one Pawan Kumar dtd. 15/10/2012. The said cheque was issued in the name of Rajesh Sharma i.e., complainant. Ex.P.3 is the copy of the notice issued to the accused persons. Ex.P.5 is the reply notice. 21. It is the defence of the accused persons that, as together the complainant and accused have received Rs.17, 50, 000.00 i.e., Rs.12, 00, 000.00 by Shri. B.P. Ramesh and Rs.5, 50, 000.00 by the complainant, therefore the complaint of the complainant cannot be maintained in his individual capacity. It is the further defence of the accused that, the amount to be paid was withheld for the reason that, the said partnership firm wherein, the complainant and Shri. B.P. Ramesh are the partners have to pay the demand of accused i.e., Rs.71, 644.00 towards electricity charges, Rs.75, 000.00 towards CCTV Camera, Rs.20, 000.00 towards new Tandoor, Rs.10, 000.00 towards projector, Rs.40, 000.00 towards two air condition equipments, Rs.5, 500.00 towards 32 inches Television, Rs.4, 500.00 towards TVS box and Rs.2, 000.00 towards Telephone bill. Unless the complainant pays the said amount, the claim of the said partnership firm cannot be settled. It is stated that, as the said partnership party No.1 deliberately avoided to pay the said amount therefore, as they were avoiding their duties and responsibilities, the accused had issued "stop payment" instructions. 22. On perusal of Ex.D.1, there is no recital about the duties and responsibilities as now stated by the accused in their reply notice. For the first time in the reply notice such a non performance of the duties and responsibilities by the said party No.1 have been stated by the accused persons. Both the complainant and accused persons are bound by the contents of Ex.D.1 which is "undisputed document". 23. For the first time in the reply notice such a non performance of the duties and responsibilities by the said party No.1 have been stated by the accused persons. Both the complainant and accused persons are bound by the contents of Ex.D.1 which is "undisputed document". 23. DW.1 - Vinay Krishnamurthy on behalf of the accused persons has come before the Trial Court and specifically admits with regard to the issuance of the cheque. According to his evidence, the complainant has to pay Rs.3, 00, 000.00 towards various liabilities stated supra. He has been thoroughly cross examined. He admits so many suggestions directed to him. It is stated by him that, the accused has issued four blank signed cheques. According to him those cheques were issued by way of security. It is suggested to PW.1 that they have paid Rs.5, 50, 000.00 to the complainant. But his answer was that, they have paid the said amount to both complainant and Shri. B.P. Ramesh. When recital in the business purchase agreement shows that, towards full and final settlement of the claim of Shri. B.P. Ramesh, Rs.12, 00, 000.00 was paid to him by way of a D.D. as mentioned in Ex.D.1. The question of paying Rs.5, 50, 000.00 to both the complainant and Shri. B.P. Ramesh do not arise at all. It may be an after thought defence of the accused persons which cannot be accepted. If really the amount which was to be settled to be paid to both the complainant and Shri.B.P.Ramesh, why cheque i.e., Ex.P.1 and other cheques were issued in the name of complainant is not explained by DW.1. When the complainant is entitled for his balance amount and had received Rs.5, 50, 000.00 by way of cash towards part payment and for remaining amount, the accused persons have issued four cheques with different dates, now the accused Nos.1 to 5 cannot give a go by to the recitals of the Ex.D.1 and falsify the case of the complainant. Ex.D.2 is the acknowledgement of registration forms of 'M/s. Vara Vinayak Ventures', Ex.D.3 is the authorization letter. Even if at all there is some amount due from the party No.1, a separate remedy is very much available to party No.2 for recovery of the same. For that, party No.2 i.e., accused have to take proper legal steps. Ex.D.2 is the acknowledgement of registration forms of 'M/s. Vara Vinayak Ventures', Ex.D.3 is the authorization letter. Even if at all there is some amount due from the party No.1, a separate remedy is very much available to party No.2 for recovery of the same. For that, party No.2 i.e., accused have to take proper legal steps. On the guise of such recovery from the said party No.1 i.e., amount so mentioned in the reply notice, they cannot escape the liability to pay the cheque amount and cannot instruct their Banker to "stop the payment" which clearly attracts the provision of Sec. 138 of the N.I. Act. 24. In this case the complaint was filed by the complainant by invoking the penal provisions of Sec. 138 of N.I. Act. 25. 24. In this case the complaint was filed by the complainant by invoking the penal provisions of Sec. 138 of N.I. Act. 25. Sec. 138 of N.I. Act reads as under: "Dishonour of cheque for insufficiency, etc., of funds in the accounts: Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years, ] or with fine which may extend to twice the amount of the cheque, or with both: PROVIDED that nothing contained in this Sec. shall apply unless- a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation: For the purpose of this Sec., "debt or other liability" means a legally enforceable debt or other liability." 26. On perusal of the provisions of Sec. 138 of N.I. Act, it is very much clear that, the ingredients with regard to the proof of offence under Sec. 138 of N.I. Act have been complied with by the complainant. Explanation: For the purpose of this Sec., "debt or other liability" means a legally enforceable debt or other liability." 26. On perusal of the provisions of Sec. 138 of N.I. Act, it is very much clear that, the ingredients with regard to the proof of offence under Sec. 138 of N.I. Act have been complied with by the complainant. Sec. 139 of N.I. Act speaks with regard to the presumption in favor of the holder of a cheque. The word 'i.e.' used shall be presumed, unless the contrary is proved. 27. Meaningful reading of provisions of N.I. Act particularly Ss. 20, 87 and 139 of N.I Act, make it amply clear that, a person who signs a cheque and makes it over, payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of debt or in discharge of a liability. 28. More so, accused Nos.1 to 5 have produced the copy of the judgment passed in O.S.No.196/2013 dtd. 21/10/2019 by the XIV Additional City Civil Judge, Bengaluru. It was a suit filed by the accused persons for recovery of money narrating all the factual features with regard to the purchase of business etc., and have claimed Rs.3, 00, 000.00 towards repair of various items by virtue of the business purchase agreement. But the said Court has dismissed the said suit denying the claim of the accused persons. 29. Transaction is admitted with regard to the sale of the restaurant for a valuable consideration of Rs.25, 50, 000.00. There was a part payment both by D.D. as well as cash to Shri. B.P. Ramesh and the complainant respectively. The balance amount which was to be paid to the complainant was paid by way of post dated cheques. When the said cheques were presented, the said cheques were dishonored with a endorsement "Payment Stopped". This itself goes to establish that, just for the sake of defense the accused must have taken such a defense which holds no water. 30. It is the defence of the accused that, blank cheques were issued towards security. If signed blank cheque was voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. As held in host of judgments this in itself would not invalidate the cheque. 30. It is the defence of the accused that, blank cheques were issued towards security. If signed blank cheque was voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. As held in host of judgments this in itself would not invalidate the cheque. Therefore, on scrupulous reading of the evidence of both complainant and accused, there is no force in the submission of the counsel for the accused Nos.1 to 5 that no such offence has been committed by them. Presumption is very much available to the complainant which is not rebutted by the accused. Therefore, there are no acceptable grounds to entertain the revision petition as prayed by the petitioners/accused persons. Thus petition merits no consideration and therefore, it is liable to be dismissed. 31. Resultantly, following order is passed: ORDER (i) Revision petition filed by the petitioners/accused Nos.1 to 5 under Sec. 397 of Cr.P.C. is dismissed. (ii) Judgment of conviction of sentence passed by the XX Additional Chief Metropolitan Magistrate, Bengaluru in C.C.No.173/2013 affirmed by the LVIII Additional City Civil and Sessions Judge, Bengaluru are hereby confirmed. (iii) Send back the Trial Court and appellate Court records forthwith along with copy of this judgment.