Bangalore District Court
C Lakshman Rao vs Godrej And Boyce Manufacturing Company … on 21 June, 2025
KABC0A0029332023 KABC0A0029342023
IN THE COURT OF THE LXXII ADDL. CITY CIVIL
& SESSIONS JUDGE AT MAYO HALL
BENGALURU, (CCH-73)
Present:
Sri. Sreepada N,
B.Com., L.L.M.,
LXXII Addl. City Civil & Sessions Judge, Bengaluru.
Dated this the 21st day of June 2025
Crl. Appeal. No.25210/2023
&
Crl. Appeal. No.25211/2023
Crl. Appeal. No.25210/2023
Appellant/ Mr. C. Sathyanarayana Rao,
Accused:- M/s. Sri. Raghavendra Furniture,
153/C, Anjali Complex,
Shop No.4, 5 and 6,
Near Vasavi School,
Infantry Road,
Cantonment, Bellary - 583 104.
(By Sri. Lakshmikanth K.B - Adv.,)
V/s
2 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Respondent/ 1. Godrej and Boyce Manufacturing
Complainant: Company Ltd.,
Having its Branch Office
at the Karnataka Film Chambers of
Commerce,
No.28, 1st Main Crescent Road,
High Grounds,
Bangalore-560 001.
Represented by its Commercial Branch
Manager.
2. M/s. Sri. Ranghavendra Furniture,
153/C, Anjali Complex,
Shop No.4, 5 and 6,
Near Vasavi School,
Infantry Road,
Cantonment, Bellary - 583 104.
Rept. By its Partner,
Sri. C. Satyanarayana.
3. Mr. C. Lakshman Rao,
S/o Raghavalu,
Aged 58 years,
R/o Ramanagar, Ward No.35,
Canal Road, Awambhavi,
Bellary-583 104.
(By Sri. R. Kiran - Adv., for R.1,
Sri. M. Anand Kumar - Adv., for R.2,
R.3 - Absent.)
3 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Crl. Appeal. No.25211/2023
Appellant/ Mr. C. Lakshman Rao,
Accused:- S/o Raghavalu,
Aged 58 years,
R/o Ramanagar, Ward No.35,
Canal Road, Awambhavi,
Bellary-583 104.
(By Sri. P.S. Malipatil - Adv.,)
V/s
Respondent/ 1. Godrej and Boyce Manufacturing
Complainant: Company Ltd.,
Having its Branch Office
at the Karnataka Film Chambers of
Commerce,
No.28, 1st Main Crescent Road,
High Grounds,
Bangalore-560 001.
Represented by its Commercial Branch
Manager.
2. M/s. Sri. Ranghavendra Furniture,
153/C, Anjali Complex,
Shop No.4, 5 and 6,
Near Vasavi School,
Infantry Road,
Cantonment, Bellary - 583 104.
Rept. By its Partner,
Sri. C. Satyanarayana.
3. Mr. C. Sathyanarayana Rao,
M/s. Sri. Raghavendra Furniture,
153/C, Anjali Complex,
4 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Shop No.4, 5 and 6,
Near Vasavi School,
Infantry Road,
Cantonment, Bellary - 583 104.
(By Sri. R. Kiran - Adv., for R.1)
COMMON JUDGMENT
These appeals are preferred by the Accused
No.2 & 3 are before the trial court, who suffered the
judgment of conviction for the offence punishable
U/Sec.138 of NI Act passed by XVII Addl. Judge,
Court of Small Causes & ACMM, Bengaluru, in
CC.No.15329/2018, dtd. 28.6.2023, challenging the
validity of the judgment.
2. For the sake of convenience the parties
hereinafter will be referred to with their ranking
assigned before the trial court.
3. The facts of the case:-
The Complainant initiated private complaint
under Section 200 of Cr.P.C., against the Accused
persons alleging that Accused No.1 is a Partnership
Firm carrying on its business under the name and
5 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
style Sri. Raghavendra Furnitures and Accused No.2
and 3 are the partners of the said firm have placed
orders to the Complainant for supply of goods. The
Accused No.2 and 3 being the partners of the
Accused No.1 are responsible for the day to day
affairs of the Accused No.1 firm and are also the
signatories to the cheque in question. It is further
submitted that the Accused persons have received
the goods without any dispute as to the quality or the
quantity of the goods as per the order accordingly,
the products and services were duly received by the
Accused No.2 and 3 on behalf of Accused No.1 for
which the Accused No.2 and 3 have also
acknowledged the receipt thereof and there were no
disputes either to the quality, quantity or the rates.
The Complainant has raised the invoices for the
transaction of Rs.21,85,141.81/- and the Accused
persons have received the commercial goods as per
the order with the invoice raised by the Complainant
but the Accused persons have not paid any payment
towards the aforesaid invoices. It is further stated
that inspite of several requests and reminders, the
accused persons has neglected to pay the
outstanding amount to the Complainant as per the
6 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
terms of payment agreed between themselves and
Accused persons that the outstanding payments
shall be made immediately after invoice is raised
and delivered. It is further stated that after great
persuasion, the Accused persons have issued a
cheque dtd: 05.07.2016 for an amount of
Rs.21,85,141.81/-. When the Complainant presented
the said cheque, it was returned with the bankers
endorsement "Funds Insufficient" on 07.07.2016 and
further got issued the legal notice to the Accused
persons which was duly served on them but they
have not made payment of the said cheque amount
and thereby, the Accused have committed the offense
punishable under Sec.138 of Negotiable Instruments
Act. Thereafter the Complainant approached the Trial
Court for appropriate legal action against the
Accused.
4. Pursuant to summons the Accused entered
appearance through their Counsels before the Trial
Court. The substance of the accusation was read
over and explained to the Accused Persons in the
language known to them. The Accused pleaded not
guilty and claimed to be tried. The Commercial
7 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Branch Manager of the Complainant got examined
himself as PW.1 and got marked Ex.P.1 to Ex.P.15
documents and closed his side. The Accused No.2 &
3 got examined themselves as DW.1 & DW.2 and got
marked Ex.D.1 to Ex.D.63 and closed their side.
5. The trial court after hearing the counsel for
Complainant and Accused persons, convicted the
Accused No.2 & 3 for the offence punishable
U/Sec.138 of NI Act vide Judgment dtd. 28.6.2023.
6. Feeling aggrieved by the said judgment of
conviction, the Appellant/Accused No.3 in Crl. Appeal
No.25210/2023 is in appeal on the following
grounds:
1. The order of the Trial Court is erroneous,
contrary to law facts and evidence of the
case. Therefore, the same is liable to set
aside.
2. The Trial Court failed to notice that the
Appellant is a sleeping partner and does
not have any knowledge of day to day
affairs of the firm. Moreover, the
Appellant has left the Respondent No.2
in the year 2005 and shifted to
8 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Bangalore. Merely by making Appellant
as party, who is innocent is improper
and contrary to law. Moreover, the
Appellant is not a signatory to the
Cheque at issue. The Trial Court ought
to have dismissed the complaint against
the Appellant on this ground alone as
the complaint is contrary to Section 141
of Negotiable Instruments Act.
3. The Trial Court has failed to notice the
Complainant has already instituted one
more complaint i.e., C.C.No.4642/2016
(Ex.D.56) for Rs.7,69,329/- and filed the
above complaint by suppressing this
case. Thus, the Complainant has
initiated two Cheque dishonor case for
the same cause of action, which leads to
doctrine of double jeopardy. Therefore,
the order of the Trial Court is liable to
be set aside as illegal. The complaint for
the offence under Section 139 of the
Negotiable Instruments Act is not
maintainable and they are ought to have
been dismissed. As there is a serious
dispute impending between
Complainant and Accused the Trial
Court ought to have dismissed the
complaint.
9 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
4. The Trial Court failed to notice the
Appellant has shifted to Bangalore as
per evidence produced at Ex.D.16 to
Ex.D.21. Moreover, the Complainant has
failed to explain when did they received
the Cheque in question from the
Respondent No.3, when the Appellant
has left the Partnership Firm in the year
2005 itself. Hence, the Trial Court
judgment is erroneous and therefore the
order of the Trial Court is liable to be set
aside as illegal.
5. The Accused has raised probable
defense and rebutted the statutory
presumption under Section 118 R/w
Section 139 of the Negotiable
Instruments Act. It is also a settled
proposition of law that the standard of
proof which is required from the Accused
to rebut the statutory presumption under
Section 118 R/w Section 139 of the
Negotiable Instruments Act is
preponderance of probabilities. The
Accused is not required to prove his case
beyond reasonable doubt. This onus on
the Accused can be discharged from the
materials available on record and from
the circumstantial evidence. The
Accused successfully creates doubt in
the Complainant's claim about the
10 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
existence of legally enforceable debt
then the burden of proof shifts back to
the Complainant who is required to
prove the guilt of the Accused beyond
reasonable doubt.
6. The Trial Court also failed to notice that
the Respondent No.3 has colluded with
the Complainant and has misused the
Cheque to harass the Appellant. Ex.D.23
the letter issued by the Axis Bank
clearly says that the Cheque at issue
was issued on 20.8.2013. This clearly
shows that the Appellant was not aware
of the transactions of the Complainant
and the Accused firm and hence it
cannot be said that the Appellant has
committed the offence under Section 139
of the Negotiable Instruments Act.
7. Under the above grounds the Appellant
sought for acquittal by allowing the appeal.
7. Feeling aggrieved by the said judgment of
conviction, the Appellant/Accused No.2 in Crl. Appeal
No.25211/2023 is in appeal on the following
grounds:
1. The Learned Magistrate without
considering the documents produced by
the Appellant Ex.D.61 Reply Notice
11 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
wherein the Appellant has clearly stated
that the Appellant and Respondent No.3
being the partners of the Respondent
No.2 firm have started the partnership
firm in the year 2005 and continued as
partners from 2005 to 2015 i.e.,
January 19th 2015. Thereafter
differences arose between the Appellant
and the Respondent No.3 in the
business, the Appellant had retired from
the Partnership Firm in the month of
March i.e., January 2015. The invoice
produced by the Respondent No.1 vide
Ex.P.12 series are related to the
transactions made by the Respondent
No.3 after January 2015 onwards and
all the invoices are produced by the
Respondent No.1 after March 2015. The
Learned Magistrate without considering
the Ex.D.61 has convicted the Appellant
for the offence punishable under Section
138 of the Negotiable Instruments Act is
illegal and unsustainable in law and is
liable to be set aside.
2. After retirement of the Appellant from the
Partnership Firm, the Respondent No.3
has continued the transaction with
Respondent No.1 company and all other
companies from January 2015 onwards.
There was no due of payment to the
12 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Respondent No.1 company as on
19.3.2015.
3. There is no connection between the
Appellant and the Respondent No.2
Partnership Firm and its transaction
since 2015 as all the transactions were
carried out by Respondent No.3 since
2015 onwards.
4. As per the Ex.D.15 letter dtd: 3.11.2015
issued by the Respondent No.2
Company, it is mentioned that the
statement of account in the month of
October 2015 showing the balance of
Rs.7,69,329/- due to them by M/s
Raghavendra Furnitures as on
31.10.2015. The complaint filed by the
Respondent No.1 is about
Rs.21,85,141/- and the invoice raised
by the Respondent No.1 in the year
2015-16 is concerned. Therefore, the
Respondent No.1 has not established
his case the Ex.P.1 is the legally
recoverable debt. Hence, the impugned
order of the Learned Magistrate is illegal
and unsustainable in law.
5. There is no tally with the Cheque amount
and the invoices raised by the
Respondent No.1. Therefore, the
13 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Respondent No.1 has not established
his case and legally recoverable debt.
Hence, the Learned Magistrate has
committed an error by convicting the
Appellant under Section 138 of the
Negotiable Instruments Act.
6. At the time of cross-examination, the
Respondent No.1 admits that he has not
produced the audit report before this
Court to show that in 2015-16 the goods
were supplied to M/s Raghavendra
Furnitures or Respondent No.2 and
there is no payment made by the Firm.
Any dues from M/s Raghavendra
Furnitures, the Respondent No.1's duty
is to mention in the audit report, which
is not done by the Respondent No.1
without producing the documents.
Therefore, the Learned Magistrate
without considering the deposition of the
CW.1, convicted the Appellant which is
not correct and liable to be set aside.
7. Under the above grounds the Appellant
sought for acquittal by allowing the appeal.
8. Heard both sides.
14 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
9. Perused the evidence, documents on record
and also impugned Judgment of conviction passed
by the Trial Court.
10. On re-appreciation of the evidence,
documents on record, the following points would
emerge for the consideration of this court.
1. Whether the Appellants in
Crl.A.No.25210/2023 &
Crl.A.No.252110/2023 proves
that the cheque in question
was not issued towards any
legally recoverable debt?
2. Whether the Judgment of
conviction passed by the Trial
Court calls for interference by
the hands of this court?
3. What Order?
11. My finding on the above points are as
under:
Point No.1 : In the Negative.
Point No.2 : In the Negative.
Point No.3 : As per final order for
the following :
15 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
REASONS
12. POINT NOs.1 and 2:-
Since the above two points are interlinked, in
order to avoid repetition of facts the above points
have been taken up together for consideration.
13. Before re-appreciating the evidence on
record, it is necessary to refer some of the latest
rulings of the Hon'ble Apex Court reported in 2019
(3) KCCR 2473 (SC) (Basalingappa V/s
Mudibasappa), the Hon'ble Apex Court while
considering several earlier rulings on the offence
U/Sec.138 of NI Act and also on the presumption
U/Sec.118 and 139 of NI Act, at Para 23 was
pleased to observe as follows:
23. We having noticed the ratio
laid down by this Court in above cases
on Sections 118(a) and 139, we now
summarise the principles enumerated
by this Court in following manner:-
(i) Once the execution of cheque is
admitted Section 139 of the Act
mandates a presumption that the
cheque was for the discharge of any
debt or other liability.
(ii) The presumption under
Section 139 is a rebuttable
16 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
presumption and the onus is on the
Accusedto raise the probable defence.
The standard of proof for rebutting
the presumption is that of
preponderance of probabilities.
(iii) To rebut the presumption, it
is open for the Accused to rely on
evidence led by him or Accused can
also rely on the materials submitted
by the Complainant in order to raise a
probable defence. Inference of
preponderance of probabilities can be
drawn not only from the materials
brought on record by the parties but
also by reference to the circumstances
upon which they rely.
(iv) That it is not necessary for the
Accused to come in the witness box in
support of his defence, Sec.139
imposed an evidentiary burden and
not a persuasive burden.
(v) It is not necessary for the
Accused to come in the witness box to
support his defence.
14. In another ruling reported in AIR 2010 SC
1898 (Rangappa V/s Mohan), observed as under:-
"Existence of legally recoverable
debt or liability- The presumption
mandated by Section 139 of the Act
does indeed include the existence of a
legally enforceable debt or liability.
This is of course in the nature of a
17 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
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 139 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 138 of the
Act specifies a strong criminal remedy
in relation to the dishonour of
cheques, the rebuttable presumption
under Section 139, is a device to
prevent undue delay in the course of
litigation. However, it must be
remembered that the offence made
punishable by Section 138 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
construction and interpretation of
reverse onus clauses and the Accused/
defendant cannot be expected to
discharge an unduly high standard or
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
18 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
that when an Accused has to rebut the
presumption under Section 139, 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 and it is conceivable that
in some cases the Accused may not
need to adduce evidence of his/her
own."
15. Keeping in view the broad principles laid
down by the Hon'ble Apex Court, let me re-appreciate
the evidence and documents on record.
16. The definite case of the
Complainant/Respondent is that the Accused No.1 is
a Partnership Firm and the Accused No.2 & 3 are the
Partners of the said Firm, have placed orders to the
Complainant for supply of goods. Accordingly, the
Accused have received goods on behalf of the
Accused No.1 and the Complainant has raised
invoices for the transaction of Rs.21,85,141.81/-.
These Accused have received goods as per the
invoices raised by the Complainant, but have failed
to make payment towards the said invoices.
19 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Thereafter, they have issued Cheque for
Rs.21,85,141.81/- for discharge of the said amount.
When the Cheque has been presented it came to be
dishonoured for "funds insufficient". Therefore, the
Complainant got issued legal notice to them and
inspite of service of the said notice, they did not pay
the Cheque amount, as such again issued legal
notice and even after service of notice also the
Accused failed to pay the Cheque amount. Therefore,
the Complainant has constrained to file the
complaint.
17. No doubt, in order to prove the averments of
the complaint, the Power of Attorney holder of the
Complainant Firm examined as PW.1 and got
marked documents at Ex.P.1 to Ex.P.15. On the other
hand, the Accused No.2 & 3 have examined
themselves as PW.1 & PW.2 and got marked
documents at Ex.D.1 to Ex.D.63.
18. The Complainant in order to prove the
averments of the complaint has relied upon Ex.P.1 to
Ex.P.15. Ex.P.1 is the Cheque issued on behalf of the
Accused No.1 Firm, signed by Accused No.2 dtd:
20 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
5.7.2016. Ex.P.2 is the Cheque Return Memo dtd:
7.7.2016. Ex.P.3 to Ex.P.5 are the Office copy of
Legal Notice dtd: 15.7.2016 separately issued in
favour of Accused No.1 to 3. Ex.P.6 to Ex.P.8 are the
RPAD Receipts. Ex.P.9 & Ex.P.10 are the Postal
Acknowledgment signed by the Accused No.2.
Ex.P.11 is the Postal Track Consignment. Ex.P.12 is
the Invoices raised by the Complainant in respect of
goods supplied to the Accused. Ex.P.13 is the
Delivery Receipts in respect of goods. Ex.P.14 is the
copy of Special Power of Attorney executed by the
Complainant Firm in favour of PW.1. Ex.P.15 is the
Board Resolution. The complaint has been presented
by the Complainant before the Trial Court on
27.9.2016. On perusal of all the above documents
with date of filing of the complaint, it is clear that
there is delay of 25 days in filing the complaint by
the Complainant, but it has been condoned as per
the order of the Trial Court dtd: 23.1.2018 and
hence, the Complainant has complied all the
mandatory requirements of Section 138 of the
Negotiable Instruments Act.
21 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
19. No doubt, the Trial Court after considering
the oral and documentary evidence placed by both
parties has convicted the Accused No.2 & 3 and
sentenced them to pay fine of Rs.30,91,975/- and in
default to pay fine, the Accused shall undergo simple
imprisonment for a period of 06 months. Even the
Trial Court convicted both the Accused No.2 & 3, but
these Accused have preferred separate appeal before
this Court.
20. It is the contention of Appellant in Crl.
Appeal No.25210/2023 is that he is not an active
Partner of the Accused No.1 Firm. But on the other
hand he was sleeping partner and does not have
any knowledge of day to day affairs of the Firm.
That apart, he left the Accused No.1 Firm in the year
2005 itself and shifted to Bangalore. Even he is not a
signatory to the Ex.P.1 Cheque at issue. The Trial
Court ought to have dismissed the complaint against
him on this ground alone. Even the Complainant has
instituted another Cheque bounce case i.e.,
C.C.No.4642/2016 as per Ex.D.56 for Rs.7,69,329/-.
Thus the Complainant has no right to file two Cheque
22 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
bounce cases in respect of single transaction. Further
it is the contention that already he has raised
probable defense and rebutted the statutory
presumption under Section 118 and 139 of the
Negotiable Instruments Act and discharged the
burden casted upon him. Therefore, again the burden
of proof shifted back on the Complainant, who is
required to prove the guilt of the Accused beyond all
reasonable doubt. The Complainant has misused the
Cheque by colluded with the Accused No.2 etc.
Therefore, he prayed to set aside the judgment of the
Trial Court by acquitting him for the offence
punishable under Section 138 of the Negotiable
Instruments Act.
21. The Appellant/Accused No.2 who is the
Appellant in Crl. Appeal No.25211/2023 also in his
appeal specifically contended that the Trial Court
without considering the documents produced by him
wrongly convicted him. Further contended that the
differences arose between him and the Accused No.3
in the business, he retired from the Partnership Firm
in the month of March i.e., January 2015. After
retirement from the Partnership Firm the Accused
23 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
No.3 has continued the transaction with the Accused
No.1 Company. Further contended that at the time of
retirement from the Partnership Firm by him, there
was no dues for payment of the Complainant
Company. After retirement of Accused No.3, the
Accused No.2 has paid more than 60-70 lakhs to the
other Companies and did independent transaction as
a sole partner of the Accused No.1 Firm. The present
Cheque i.e., Ex.P.1 was issued in the 2013 as a
security to the Complainant Company, but the
Complainant has presented the Cheque in the year
2016. The series of Cheques after Ex.P.1 was drawn
between 2013 - 2015. Further it is the case of the
Accused No.2 is that after 2013 the Accused No.3
has continued the transaction with the Respondent
No.1 Company, then there is no connection between
the him and the Complainant. Ex.D.15 clearly
discloses about the balance of Rs.7,69,329/- due to
them by the Accused No.1 Firm as on 31.10.2015.
The complaint filed by the Complainant is about
Rs.21,85,141/- and the invoice raised by the
Complainant in the year 2015-16 is concerned.
Therefore, the Complainant has not established his
case. The Ex.P.1 is not legally recoverable debt.
24 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Even, Ex.P.12 invoice series and the total amount are
calculated in 18 invoices are a sum of
Rs.25,12,305/-. But, the Ex.P.1 Cheque is amounting
to Rs.21,85,141/-. The amount of invoices are not
tallying with the amount of Ex.P.1 Cheque. The
Complainant has not established that the Cheque in
question has been issued for legally payable debt.
Further also taken up contention that the
Complainant has not produced audit report of the
Complainant Company. When the said audit report is
not produced, it cannot be said that there is a due of
Rs.21,85,141/- as on the date of issuance of Cheque
and for discharge of the said amount only Ex.P.1
Cheque has been issued. Accordingly, he prayed to
set aside the conviction judgment passed against
him by allowing the appeal.
22. No doubt, both the Appellants have mainly
contended in the appeal memos and as well as in
their oral evidence that the Complainant had not at
all proved that the Cheque in question had been
issued towards legally enforceable debt and the
amount of the Cheque is not corroborating with the
amount of the invoices.
25 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
23. It is the argument of the Learned Counsel
for the Complainant is that the Accused No.2 & 3 are
the Partners of the Accused No.1 Firm and the
Accused No.2 is the signatory of the Accused No.1
Firm. Though the Complainant has supplied the
goods of Rs.25,00,000/- to the Accused No.1 Firm,
out of which some amount has been settled and for
the remaining amount only Cheque of Rs.21,85,141/-
has been issued by the Accused No.1 Firm.
Therefore, when the Cheque has been presented for
encashment, it came to be dishonored.
24. Admittedly, Ex.P.1 Cheque given on behalf
of the Accused No.1 Firm, signed by Accused No.2.
Even Ex.P.12 Invoices and Ex.P.13 Delivery
Receipts/LR Copies shows that the Complainant has
raised invoices and supplied the said goods through
lorry to the Accused persons. Even Ex.D.1 to Ex.D.15
produced on behalf of the Accused are also goes to
show that the goods have been supplied to the
Accused No.1. Even though the signature of the
Accused No.3 is not found in Ex.P.1 Cheque, but it
does not mean that he is not responsible for the dues
of the Complainant.
26 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
25. It is an admitted fact that there is some
difference in the amount mentioned in Ex.D.15 i.e.,
the Confirmation of Balance, wherein the balance
amount is mentioned as Rs.7,69,329/- as on
31.10.2015. But, PW.1 has clearified in his evidence
that the invoices are only related to the goods
supplied to the Accused No.1 Firm and Ex.P.15 is
proving the transaction taken place between the
Complainant and the Accused persons.
26. It is pertinent to note here that, according to
PW.1 himself, except Ex.P.1 Cheque, other Cheques
issued on behalf of the Accused have been honoured.
27. The Cheque is dtd: 5.7.2016 and according
to Ex.P.2 it has been dishonored on 7.7.2016 itself.
Though the Accused No.3 contended that he is not a
signatory to the said Ex.P.1, he is a sleeping partner
and he has retired from the Partnership Firm, as
such the said transaction is not binding on him etc.
However, in this connection the Accused No.3 has not
placed any materials. Though number of documents
produced by the Accused No.3 to establish his case,
but those documents are no way helpful to him to
27 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
show that he is not liable to pay the amount of the
Cheque and the Accused No.2 is only liable for the
same. That apart, on careful perusal of evidence of
Accused No.2 & 3 it is clear that they stated that
amount involved in Ex.P.1 is already been paid to the
Complainant and the balance to be paid by them to
the Complainant is not at all tallying with the
invoices etc. However, as opined by the Trial Court
in its judgment, DW.1 & DW.2 in their cross-
examination have clearly admitted earlier transaction
with the Complainant Company about purchasing of
goods in the name of Accused No.1 Firm. So, it
manifestly establishes that there was transaction
between the Complainant and the Accused as per
Ex.P.12 invoices.
28. The Learned Counsel for the Accused No.3
in his arguments contended that the Accused No.3 is
not a signatory to the Cheque and he has left the
company of the Accused No.2 in the year 2005 itself
and shifted to Bangalore. Even the Complainant has
instituted two Cheque bounce cases for the same
cause of action. When the Accused No.3 left the
Partnership Firm in the year 2005 itself the alleged
28 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Cheque issued in the year 2016 is not at all binding
on the Accused No.3. Even though the Ex.D.23 also
discloses that the Cheque issued on 20.8.2013 and it
has been presented on 5.7.2016. Therefore, the
Accused No.3 is entitled for acquittal.
29. In support of his arguments he has relied
upon the following citations:
1) Crl.App.No.636/2019 passed by the Hon'ble Apex
Court.
2) Crl.App.No.302/2010 passed by the Hon'ble High
Court of Karnataka at Bengaluru.
3) 2023 (2) AKR 645.
30. On the other hand, the Learned Counsel for
the for the Complainant during the course of
arguments submitted that the Accused No.3 has not
placed any materials to show that he is retired from
the Partnership Firm in the year 2005. On the other
hand, it is clearly admitted that he is a sleeping
partner. Even if the contention of the Accused No.3 is
concerned, prior to the date of Ex.P.1 Cheque also the
Accused No.2 was operating the bank account in the
name of Accused No.1 Firm. Even after the date of
29 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Cheque also the Accused No.3 was operating the
Cheque in the name of Accused No.1 Firm. When the
Accused No.3 has no documents to show that he is
actually retired from the Firm as a partner, his
contention cannot be accepted. If there are only two
partners in the Firm and one partner retire from the
firm partnership will not be exists and it become
proprietorship concern. A single person cannot
operate and called as a Partnership Firm. The
documents available on record reveals that the
Accused No.1 Firm is still existed. Therefore, the
Accused No.3 cannot escape from his liability. Under
such circumstances, the Cheque issued by the
Accused No.2 on behalf of the Firm can be
considered as binding to all the partners of the Firm
and it is issued for legally enforceable debt. Further
contended that the Accused have not denied about
issuance of Cheque and signature found on Ex.P.1
Cheque. Hence, prayed to confirm the judgment of
the Trial Court.
31. In support of his arguments he has relied
upon the following decisions:
30 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
1) Kalmani Tex V/s P. Balasubramanian (2021) 5
SCC 283.
2) C. Lakshman Rao V/s Godrej & Boyce
Manufacturing Company Limited and others.
32. No doubt, in the first decision it is held as
under:
A. Debt, Financial and Monetary
Law - Negotiable Instrument Act,
1881 - Ss. 139 and 118 -
Presumption in case of
voluntarily signed blank Cheque
leaf - Presumption as to legally
enforceable debt, held, available
against the Accused even in case
when he voluntarily signed and
handed over a blank Cheque leaf
towards some payment.
B. Debt, Financial and Monetary
Laws - Negotiable Instruments
Act, 1881 - Ss.139 and 118 -
Presumption as to legally
enforceable debt - Effect of
admission regarding signature on
Cheque - In such situation, court
held, required to presume that
the Cheque was issued as
31 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
consideration for a legally
enforceable debt.
3. The principles of the above decision are aptly
applicable to the case on hand. In this case the
Appellants have disputed the issuance of Cheque
and the signature found on it. Therefore, according to
Section 118 and 139 of the Negotiable Instruments
Act, presumption as to legally enforceable debt is
liable even in cases when they voluntarily signed
and bank Cheque leaf towards some payment or for
any security etc. Therefore, the Accused cannot say
that there is no legally enforceable debt as on the
date of issuing of the Cheque. On the other hand, the
Court can required to presume that the Ex.P.1
Cheque was issued as consideration for a legally
enforceable debt.
34. In the second decision the Hon'ble High
Court of Karnataka has held that "there is no
document to show that this Petitioner retired from the
Firm. On the other hand, the Firm is continued by the
Accused No.3 said to be operated by the account.
When the account was operated by the Accused
No.3, even the documents available with the bank
32 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
shows the same. The case of the Petitioner is not
that, prior to his retirement, both partners operated
the bank account as a joint account and
subsequently, after his retirement, Accused No.3
along operated the bank account. Such being the
case, it is the burden on the Respondent No.3 to
produce the documents to show that the Firm has
been dissolved due to his retirement, and the
criminal case against him cannot be continued."
Further also held in this decision that "there is no
documents produced to show that the Accused No.3
alone operated the bank account in the name of the
Firm and after his retirement the Accused No.3 said
to be operated the said account in the name of Firm."
The principles of the above decision are also aptly
applicable to the case on hand. In this case also the
Accused No.3 has not placed any materials to show
that the transaction of Ex.P.1 Cheque is after his
retirement from the Firm. Even in the evidence also
the Accused No.3 contended that in the year 2016
itself the Partnership Firm of the Accused No.1 has
been closed and he is no way responsible to the
Accused No.1 Firm etc. On the other hand, in the
cross-examination he clearly admitted that he is the
33 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
sleeping partner of Accused No.1 Firm and in this
regard he has not produced any documents. On the
other hand, further admits that himself and Accused
No.2 have started the Accused No.1 Firm. Further
also admits the suggestion that he has no documents
to show that in the year 2016 itself the Accused No.1
Firm has been closed. So, such being the fact, the
Accused cannot say that he is no way liable for the
transaction between the Complainant Company and
the Accused No.1 Firm.
35. It is pertinent to note here that even in
further cross-examination also the Accused No.3
clearly admitted that since himself and Accused No.2
are partners of Accused No.1 Firm, as such they
jointly obtained loan from the Krishna Janardhana
Bank. Further denied that he is the partner of
Accused No.1 Firm and liable to pay the amount of
the Ex.P.1 Cheque. So, going through all the above
discussions and admissions, it is clear that there is
no interference is required in the judgment passed by
the Trial Court. On the other hand, the Trial Court
after considering all the materials convicted the
34 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Accused No.2 & 3 for the offence punishable under
Section 138 of the Negotiable Instruments Act.
36. It is another contention of the Appellant
herein is that the Accused No.1 Firm has been
dissolved. However, DW.2 has admitted some of the
documents in the cross-examination i.e., Rent
Agreement, Income Tax Returns etc. On careful
perusal of all these documents, further it is clear that
there is no documents produced before the Trial
Court to show that the Accused No.1 firm has been
dissolved by way of resolution or cancellation of
registered Firm. Even DW.1 also clearly admitted in
the cross-examination that he has no such
documents. Even further clear from the documents
and the evidence of DW.1 & DW.2 that the DW.2
produced some additional documents to show that
the Firm has been dissolved due to retirement of the
Accused No.3 etc. However, as opined by the Trial
Court and on perusal of the documents produced by
the Accused reveals that no such documents have
been placed by the Accused No.2 to show that the
Accused No.3 has left the Firm in the year 2015 after
dissolution of Firm for which he is not liable to pay
35 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
the Cheque amount. Even the Accused No.3 has not
proved by placing materials to show that he has not
continued as a partner of the Firm and he has
discharged by dissolution of the said Firm.
37. It is clear from the further evidence of DW.1
that he has clearly admitted that his son and himself
have continued the Partnership Firm and Accused
No.2 has left the company and also he has stated
that he was only sleeping partner, but the contention
and admission given by him itself as stated above is
not sufficient to come to conclusion that he is retired
from the Partnership Firm and the Accused No.3
continued the Partnership Firm after 2015. As
discussed above, there is no sufficient materials
produced by both the Accused before the Trial Court
that the Accused No.3 has been retired and there is a
dissolution of Partnership Firm among himself and
the Accused No.3, as such he is not liable to pay the
Cheque amount.
38. Similarly, as discussed above, the
contention of the Accused No.3 that as per Ex.D.16 to
Ex.D.21 he left the Partnership Firm and shifted to
36 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
Bangalore in the year 2015 itself and he is not liable
for Ex.P.1 Cheque, but he has not proved the same
by placing materials. Even if he has taken up
contention in his oral evidence that the Accused No.2
has colluded with the Complainant and had misused
the Cheque to harass him etc., also not been proved
by him by placing sufficient materials. On the other
hand, when there is no sufficient materials about the
dissolution of the Accused No.1 Partnership Firm and
retirement of the Accused No.3, both the Accused
No.2 & 3 are liable to pay the Ex.P.1 Cheque amount.
As opined by the Trial Court in its judgment, even
though DW.1 admitted in his cross-examination that
his son and himself have continued the Partnership
Firm and the Accused No.3 has left the Partnership
Firm and Accused No.3 is only the sleeping partner
are also not sufficient to come to conclusion that the
Accused No.3 is not liable to pay the Cheque amount
and he cannot be convicted. As aforesaid, there is no
dissolution of the Partnership Firm among the
Accused No.2 & 3. When there is no legal dissolution
of the Partnership Firm, both partners i.e., the
Accused No.2 & 3 are liable to pay the Cheque
amount to the Complainant.
37 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
39. Further on careful perusal of the materials
placed on record, it is further clear that even the
Appellant in Crl.A.No.25211/2023 also not at all
proved that he has been retired from the Partnership
Firm and thereafter the Accused No.3 has been
continued the transaction with the Complainant
Company from January 2015 onwards and there
was no due payment to the Complainant Company
on on 19.3.2015. Even the another contention of the
Accused No.2 that the balance as shown as per
Ex.D.15 on 3.11.2015 is only Rs.7,69,329/- and on
the other hand Cheque is for Rs.21,85,141/- and it
not tallying with Ex.D.15, so the Accused are entitled
for acquittal etc. As aforesaid, the balance as per
Ex.D.15 is no way connected to the Cheque amount
of Rs.21,95,141/-. However, the account statement
produced by the Complainant and invoices etc., are
duly corroborating with the Cheque amount.
Therefore, the Complainant has clearly established
his case that Ex.P.1 Cheque was issued only for
legally recoverable debt, therefore, the question of
dismissing the complaint does not arise.
38 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
40. It is the another contention of the Accused
No.2 is that the Complainant has not produced the
audit report before this Court to show that in the year
2015-2016 the goods were supplied to the Accused
No.1 Firm. So non-production of the audit report is
fatal to the case of the Complainant etc. However, on
careful perusal of the entire documentary evidence
placed by the Complainant it is clear that the Ex.P.1
Cheque amount is duly corroborating with the other
materials.
41. It is pertinent to note here that, even though
the legal notice issued by the Complainant is duly
served upon the Accused, they did not replied to the
said notice and not at all taken the contention which
they have been taken in the appeals and as well as
in the evidence before the Trial Court. Therefore,
looking from any angle, the Accused No.2 & 3 have
failed to prove that they are not liable to pay the
Ex.P.1 Cheque amount and they are entitled for
acquittal. On the other hand, the Complainant by
placing sufficient materials has proved its case.
Therefore, the question of interference by this Court
39 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
in the judgment passed by the Trial Court does not
arise.
42. On the other hand, on perusal of the Trial
Court judgment with the materials placed by both
Complainant and the Accused it is evident that the
Trial Court after properly appreciating the same,
rightly convicted the Accused No.2 & 3.
43. In so far as quantum of fine imposed by the
trial court is concerned, the Trial Court has imposed
total fine of Rs.30,91,975/- as against the Cheque
amount of Rs.21,85,141/-, keeping in view the year
of transaction, duration of litigation, cost of litigation
and interest on the outstanding amount etc. Since the
transaction between the parties was of the year
2015 and the above case was disposed of by the
Trial Court on 28.6.2023 and keeping in view of the
duration of litigation and cost of litigation etc., the
Trial Court has rightly awarded fine of
Rs.30,91,975/-. Hence, there is no reason to
interfere with the quantum of fine imposed by the
trial court.
40 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
44. Thus, looking from any angle, the Accused failed
to establish any probable defence even on the
materials produced by the Complainant. Having
regard to the facts and circumstances of the case, the
Accused failed to substantiate his defence by
producing cogent evidence before this court. The
Trial Court by appreciating the evidence and
documents in a proper perspective and while
referring to the rulings of Hon'ble Apex Court has
rightly convicted the Accused for the offence
punishable U/Sec.138 of NI Act. In the absence of
any perversity or capriciousness while convicting the
Accused, there is no reason to interfere with the
Judgment of the trial court. Therefore no grounds
made out by the Accused to interfere with the
Judgment of conviction passed by the trial court.
Hence, Point Nos.1 and 2 are answered in the
Negative.
45. Point No.3:
In view of the findings on the above points the
appeal filed by the Appellant deserves to be
dismissed. Accordingly, I proceed to pass the
following:-
41 Crl.Appeal No.25210/2023 &
Crl.Appeal No.25211/2023
ORDER
The appeals filed by the
Appellants in Crl.A.No.25210/2023 &
Crl.A.No.25211/2023 U/Sec.374 (3) of
Cr.P.C., are hereby dismissed with
costs.
The Judgment of conviction passed
by the Learned XVII Addl. Judge, Court
of Small Causes & ACMM, Bengaluru,
in CC.No.15329/2018, dtd. 28.6.2023,
is hereby confirmed.
Send back the records with a copy
of this Judgment to the Trial Court.
Keep the copy of this order in
Crl.A.No.25210/2023 and the original in
Crl.A.No.25211/2023.
(Dictated to the Stenographer, typed by her, corrected,
signed and then pronounced by me, in the open court on this
the 21st day of June 2025.)
[Sri. Sreepada N]
LXXII Addl.City Civil & Sessions
Judge, Bengaluru. (CCH-73).