Bangalore District Court
Deputy Director (I/C) Esi Corporatioin vs Preethi R Rai on 22 January, 2025
1
CC No.26635/2024
KABC030463612024
IN THE COURT OF XXVII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU
Present: Sri. Maruthi.k B.A, LL.B.,
XXVII A.C.J.M Bengaluru.
Dated: This the 22nd day of January, 2025
C.C. NO.26635/2024
Complainant : Deputy Director (I/c),
ESI Corporation,
Sub Regional office Bangalore
North (Peenya)
Harini Towers, 3rd Cross,
Off Ring Road, (Near F.T.I),
IInd stage, Industrial Subrub,
Yeshwanthpur,
Bangalore-560022.
Represented by
Sri.Shekara Devadiga,
Social Security Officer,
E.S.I. Corporation,
BANGALORE-560022.
(Rep by Sri.K.K., Advocates)
V/s.
Accused : Smt.Preethi R Rai,
Proprietor of
M/s Dash Industries,
No.44/4, Mallasandra
Extension, Ayyappa layout,
Pipeline road, T.Dasarahalli,
Bangalore-560057.
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CC No.26635/2024
R/at No.146/3,
Coconut Avenue Road,
7th Cross, Malleshwaram,
Bangalore-560003.
(Rep Sri.I.G., Adv)
Offence : U/s.138 of Negotiable
Instruments Act.
Plea of the accused : Pleaded not guilty
Final Order : Convicted
Judgment Date : 22-01-2025
*****
JUDGMENT
The Complainant has filed complaint U/Sec.200 of
Code of Criminal Procedure against the Accused for the
offence punishable U/Sec.138 of Negotiable Instrument
Act.
2. The facts of the case in brief are as follows:-
The complainant is E.S.I Corporation and also a
Public Servant within the meaning of section 21 of the
Indian Penal Code read with section 93 of the E.S.I Act.
The accused is the Proprietor of the company M/s Dash
Industries which is a company covered under the
provisions of the employees State Insurance Act, 1948
and accused is in charge and responsible for conducting
business of the establishment. The accused failed to pay
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CC No.26635/2024
the arrears of contribution payable by them undersection 39 & 40 of the E.S.I Act and its Regulations made
there under in all totaling Rs.2,44,816/- towards
contribution, interest. Therefore, the complainant
requested to Recover Officer, ESI Corporation, Bangalore
to recover the said amount due from the accused under
section 45-C to 45-I of the E.S.I Act which empowers the
complainant to recover any arrears payable under this
Act as an arrear of Land Revenue. After 45-G order was
issued by the Recovery Officer for Rs.2,44,816/- (c-19
dated 16.06.2023 for (Rs.2,38,914+Recovery cost
Rs.200/-) and C-19(i) dated 15.06.2023 for
(Rs.5652+Recovery cost 50/-) the accused had paid
Rs.1,46,889/- against C-19 and the remaining due was
for Rs.97,927/-. For balance amount, the accused sent
one cheque bearing No.000086 dated 29.02.2024 for
Rs.48,963/- drawn on Bank of Baroda, Residency Road
Branch, Bangalore-560025 of their liability in favour of
ESI Corporation for which demand was issued by the
Recovery Officer, ESI Corporation SRO-Peenya,
Bangalore.
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CC No.26635/2024
3. It is stated that, the complainant presented the
said cheque for encashment through its banker in State
Bank of India and the same got dishonored and
returned with memo dated:02.03.2024 with endorsement
stating “FUNDS INSUFFICIENT”. Thereafter issued a Legal
Notice to the accused on through its counsel calling upon
the accused to pay the amount of the said cheque within
fifteen days of receipt of legal notice. The legal notice sent
to the accused through R.P.A.D is duly served in spite of
service of legal notice the accused never made any best
efforts to pay the cheque amount. Hence present
complaint filed.
4. The sworn statement of the Social Security
Officer of the complainant company by name Sri.Shekar
Devadiga was recorded as PW-1 and got marked 8
documents. As the complainant had complied the
mandatory requirements of Section 138 of Negotiable
Instrument Act, the Court issued summons to the
Accused. After service of summons, Accused entered
appearance and was enlarged on bail.
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CC No.26635/2024
5. The substance of accusation was read over and
explained to the accused in the language known to her to
which, she pleaded not guilty. The statement of Accused
under section 313 Code of Criminal Procedure was
recorded and case was posted for cross of PW-1. When
the case is posted for defence evidence, the accused
submitted no cross of PW-1 and no defence evidence and
both parties filed a joint memo reporting settlement and
prayed to pass judgment in terms of joint memo.
6. Heard the learned counsel for the complainant
and accused and perused the oral and documentary
evidence produced by both the parties.
7. The following points arise for my
determination:
(1) Whether the complainant proves
that the cheque bearing No.000086
dated:29-02-2024 for a sum of
Rs.48,963/- drawn on Bank of
Baroda, Residency Road Branch,
Bangalore issued by the accused has
been dishonored on the ground of
“Funds Insufficient” and the accused
even after receiving the intimation
regarding the dishonor of cheque failed
to pay the cheque amount within the
stipulated period and thereby accused
has committed an offence punishable
under Sec.138 of N.I. Act?
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CC No.26635/2024
(2) Whether the accused is liable to be
convicted in terms of compromise
memo dated 20-01-2025?
(3) What order?
8. My answer to the above points are as follows:-
Point No.1 & 2 : In the Affirmative
Point No.3: As per the final order,
for the following:
REASONS
9. Point No.1 : In-order to prove the case,
Social Security Officer of the complainant company by
name Sri.Shekara Devadiga got himself examined as
PW1 and the affidavit filed by his in lieu of sworn
statement was treated as examination in chief as per the
dictum laid down in the ruling of the Hon’ble Apex Court
of India, reported in (2014) 5 SCC 590 (Indian Bank
Association & Ors V/s. Union of India & Ors). The
complainant got marked Ex.P1 to P8 documents.
10. The complainant company has exhibited the
following Ex.P1 to P8 documents. Ex.P1 & 1(a) are
Cheque & signature of the accused. Ex.P2 is Bank
Endorsement. Ex.P3 is Legal Notice. Ex.P4 is Postal
Acknowledgment. Ex.P5 postal RPAD returned cover.
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CC No.26635/2024
Ex.P6 & 7 are two postal consignment. Ex.P8 is Copy of
gazette notification. As the accused submitted there is
no cross of PW-1 and no defence evidence, the above said
documentary evidences stood un-rebutted. Thus, the
complainant has discharged initial burden of proving
issuance and presentation of cheque, bouncing of
cheque, issuance of legal notice and its service. The
Hon’ble Apex Court in the case of Rangappa Vs. Sri.
Mohan reported in 2010(11) SCC 441 held that once the
complainant establishes the issuance and bouncing of
cheque, the presumption as to issuance of cheque
towards discharge of legally enforceable debt as
contemplated U/sec.139 of the Negotiable Instruments
Act would fall in favour of the complainant. It is for the
accused to rebut said presumption with probable
defence.
11. It is pertinent to note that, the accused has
neither chosen to cross-examine PW1 nor led any
defence evidences to rebut the said presumption. As
such the presumption in favour of the complainant stood
unrebutted and unchallenged.
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CC No.26635/2024
12. In view of all the above discussion it can be
concluded that the complainant has established through
cogent and convincing evidence the fact of issuance of
the cheque for discharge of legality enforceable debt,
which is dishonored for Funds Insufficient, Issuance of
legal notice within stipulated time, failure on the part of
accused to repay the amount within stipulated period.
On the other hand, the accused have failed to rebut the
presumption available to the complainant through
probable evidences that would preponderate upon the
evidence lead by the complainant. Therefore, the Accused
are held to have committed an offence punishable under
sec. 138 of the Negotiable Instrument Act. Accordingly
Point No.1 is answered in the Affirmative.
13. POINT NO.2:- In view of the finding on point
No.1 the accused is liable to be convicted for the offence
punishable U/sec. 138 of the Negotiable Instruments
Act. However, when the case is set down for defence
evidence, complainant and the accused have filed a joint
memo reporting some sort of settlement stating that
accused and complainant have settled the dispute
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CC No.26635/2024
amicably before this court and accused has agreed to pay
Rs.8,250/- (Rupees Eight Thousand Two Hundred Fifty
only) per month in six equal monthly installments by way
of DD/Bankers pay order starting from 20-02-2025.
Further the accused shall pay the aforesaid settlement
amount by way of mentioned mode of payment and there
shall be no further claim on the part of complainant.
Hence, prayed to pass the judgment accordingly as per
joint memo. Therefore, it appears proper not to convict
and sentence the accused for maximum punishment and
fine as contemplated U/sec. 138 of the Negotiable
Instruments Act. At this juncture, it appears proper to
consider the observations made by the Hon’ble Apex
Court in the case of Jimpex Pvt Ltd., V/s Manoj Goel,
reported in 2021 SCC Online SC 925, wherein, Hon’ble
Apex Court at para 38 has observed as follows:
when a complainant party enters in to a
compromise with the accused, it may be for a
multitude of reasons, higher compensation, faster
recovery of money, uncertainty of trial and strength
of the complainant among others. A complainant
enters in to a settlement with open eyes and
undertakes the risk of the accused failing to
honour the cheque issued pursuant to settlement,
based on certain benefits that the settlement
agreement postulates. Once parties have
voluntarily entered in to agreement and to abide by
the consequence of non compliance settlement
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CC No.26635/2024
agreement, they cannot be allowed to reverse the
effect of the agreement by pursuing the both
original complaint and the subsequent complaint
arising such non-compliance. The settlement
agreement subsumes original complaint.
14. In the light of the above observations, as the
complainant and accused have filed memo stating that
they have settled the matter, the accused cannot deviate
from her stand and she is liable to pay the amount as
agreed by her. Therefore, there appear no hurdle to
sentence the accused only for fine as per the compromise
memo instead of convicting with imprisonment and / or
fine. Accordingly, this point is answered in the
Affirmative.
15. POINT NO.3 :- In view of my findings to the
Points No.1 & 2, I proceed to pass the following:-
ORDER
In exercise of power conferred U/sec. 255(2) of
Code of Criminal Procedure, the accused is
convicted for the offence punishable U/s.138 of N.I.
Act and sentenced to pay fine of Rs.48,963/-.
The accused has agreed to pay sum of
Rs.8,250/- per month in six equal monthly
installments by way of DD/Bankers Pay Order
starting from 20-02-2025. In default, accused shall
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CC No.26635/2024
undergo simple imprisonment for a period of six
months.
Entire fine amount of Rs.48,963/- shall be paid
to the complainant as compensation as
contemplated U/sec. 357(1)(b) of Code of Criminal
Procedure.
(Dictated to the stenographer directly on computer, corrected and then pronounced
Digitally signedin open
court by me on this the 22nd day of January, 2025) MARUTHI by MARUTHI K
K Date: 2025.01.23
13:00:45 +0530(Maruthi.K)
XXVII A.C.J.M, Bengaluru.
ANNEXURE
Witnesses examined on behalf of the complainant:
PW1 : Shekara Devadiga
Documents marked on behalf of the complainant
Ex.P1 & 1(a) : Cheque & signature of the
accused
Ex.P2 : Bank Endorsement
Ex.P3 : Legal Notice
Ex.P4 : Postal Acknowledgment
Ex.P5 : Postal RPAD returned cover
Ex.P6 & 7 : Two postal consignment
Ex.P8 : Copy of gazette notificationWitnesses examined on behalf of the accused:
-NIL-
Documents marked on behalf of the accused:
-NIL- Digitally signed
MARUTHI by MARUTHI K
K Date: 2025.01.23
13:00:49 +0530
XXVII A.C.J.M, Bengaluru.
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