Virendra N. Doshi and another vs Aphelion Services Ltd.

L. Narayana Swamy, J. - These criminal revision petitions are filed by the petitioners accused in CC Nos. 27657/2011 and 25140/2012 on the File of the XVII Additional Chief Metropolitan Magistrate, Bangalore being aggrieved of the concurrent judgment of conviction and sentence passed against them. The judgments and sentences dated 5.2.2014. passed in the above criminal cases are confirmed by the Fast Track Sessions Judge III at Mayohall, Bangalore by judgments dated 23.12.2014. in Criminal Appeal Nos. 25042-25043/2014. The petitioners are directed to undergo simple imprisonment for one year and pay fine of Rs. 3 lakhs and Rs. 11 lakhs each respectively in both the cases.

The facts of the case are that the complainant company at the instance of the petitioners had lent a sum of Rs. 20 lakhs by way of two cheque Nos. 864014 and 261177 dated 5.6.2010. and 30.9.2010. for Rs. 10 lakhs each. In turn the petitioners have executed on demand promissory notes agreeing to return the said amount with interest at 12% p.a. The petitioners have repaid Rs. 6 lakhs and they were due Rs. 14 lakhs and in payment thereof, they issued cheques as many as 14 cheques of Rs. 1 lakh each. When the cheques were presented for encashment, they were returned with endorsement "Funds Insufficient". The complainant got issued legal notice but in spite of service of said notice, the petitioners did not pay the cheque amounts and therefore the complainant filed complaints.

The complainant-respondent examined one of its Director Krishnan N as PW-1 and got marked Ex.PI to P21. On behalf of the petitioners-accused, petitioner No. 2, who was Accused No. 3 got examined as DW-1. No documents were marked on their behalf.

I have heard the learned counsel for the petitioners and learned counsel for the respondent and perused the impugned judgments. The contentions in both the revision petitions are the and the same and thereby both the petitions are disposed of by this common order.

The learned counsel for the petitioners submits that the fine imposed is double the amount alleged to be due. The learned Sessions Judge without looking into the matter just endorsed the conviction passed by the tried court. The ink and pen used in the cheques are different which shows misuse of the cheques. Admittedly the legal notice is not served and therefore Section 138 of Negotiable Instruments Act is not attracted. There are contradictions in the evidence of PW-1 thereby the complainant has failed to prove the initial burden. The promissory note is not at all a legal document as there are no witnesses to the said document. The complainant is not authorised to give hand loan or financial assistance and with the connivance of Mr. Menda a false case has been filed.

On the other hand, the learned counsel for the respondent-complainant supports the judgment of conviction passed by the two courts below and submits to dismiss the revision petitions.

It is not in dispute that the two cheques issued by the respondent-complainant are put into the account of M/s. Mandya Pipe Centre. DW-1 who is accused No. 3 has deposed that he is the mandate of first accused company and he has deposed on behalf of accused No. 2 also. There is no dispute as to transfer of amount to the account of Accused No. 1 company. Ex. P47 in connected matter speaks of the same.

DW-1 has also admitted in evidence the signatures in the cheques. The contention of the petitioners is that one Mr. Menda had collected the cheques on the assurance of getting loan but loan was given and the cheques were not returned on the guise that they are misplaced, which are misused by the complainant at the connivance of Mr. Menda. This contention the petitioners have utterly failed to substantiate. No one is examined in this behalf. Therefore, it is but natural to conclude that the cheques issued by the accused were towards repayment of the legally recoverable debt and not as sought to be contended by the petitioners to get loan. Thus the respondent has discharged the initial burden and the petitioners have failed to rebut the same.

It is the contention of the petitioners that the notice issued by the complainant is admittedly not served on the petitioners and Section 138 of the Act itself is not attracted. It is on record, the notices were sent by registered post with acknowledgment due. DW-1 has 4 admitted that there is no change in their address and it is as shown in the complaint itself. It is, thus clear that the notice is got issued to accused persons and the same are served to them. The trial court is right in holding, issuing notice is to give opportunity to drawer to pay cheque amount within 15 days, when accused has not made payment within 15 days after receipt of summons or appearance before the court, defence regarding validity of service of notice is improper relying upon decision reported in 2012 (4) AIR Kar R 119.

It is also contended by the petitioners that the fine amount is double the amount said to be due by them. The said contention cannot be countenanced because provision prescribes the fine double the cheque amount.

In the instant case, having borrowed Rs. 20 lakhs, the petitioners have repaid Rs. 6 lakhs and in respect of balance payment, cheques are issued by the petitioners. Therefore, it does not lie in the mouth of the petitioners raising one or the other contentions including competency of the complainant to lend money, different ink and pen used to fill up the cheques etc. All the contentions raised by the petitioners have no merit consideration.

The learned counsel for the petitioners has placed reliance on the following judgments:

(i) Nishant Aggarwal v. Kailash Kumar Sharma (2013) 10 SCC 72 to advance the contention that "only on service of notice and failure on part of accused to pay demanded amount within a period of 15 days thereafter, does commission of offence under Section 138, NI Act stand completed." In the said case, the question that fell for consideration was whether by mere issuance of notice from a particular place will give rise to cause of action in that place, when all other transaction has taken place outside that particular place. Therefore, the said decision is of no help to the petitioners.

(ii) Sarav Investment and Financial Consultancy Private Ltd., and another v. Llyods Register of Shipping Indian Office Staff Provident Fund and another, (2007) 14 SCC 753, to advance the submission that "communication to drawer of cheque about the fact of dishonouring of cheque and calling upon him to pay the amount within 15 days of the service of the notice is imperative in character." There the contention was accused deliberately avoided receipt of the notice. In the instant case, registered post acknowledgment due was sent to the correct address of the accused, which address is admitted to be true and correct by one of the petitioners. Therefore, the said decision also is of no assistance to the petitioners.

(iii) John K John v. Tom Verghese and another (2007) 12 SCC 714 to contend that "taking note of the facts that neither any instrument was executed nor any interest charged although a huge amount was allegedly paid to respondent, took the view that appellant did not approach the court with clean hands and his conduct was not of a prudent man." The question that was dealt in that case was, whether the finding of fact could be interfered under Article 136. It depends on facts and circumstances of each case and as such the petitioners cannot draw any help from this decision.

(iv) Revrend Mother Marykutty v. Reni C. Kottaram and another (2013) 1 SCC 327 to contend, "fact that cheque was not in handwriting of appellant-accused strengthened her defence that it was not issued in favour of respondent-complainant." If other circumstances exist in the case, the cheque which is not in handwriting of the drawer, it would strengthen the said defence. But that cannot alone be a conclusive proof that the cheque is not issued to the respondent.

For the foregoing reasons, I am of the view that the petitioners have failed to make out a case for interference. The courts below have properly assessed the materials available on record and have drawn proper inferences and have reached correct conclusions and passed orders of conviction. The impugned judgments are sound and proper and there is no ground to interfere.

Accordingly, both the revision petitions are dismissed.