Bangalore District Court
M/S Delton Control And Switch Gears vs M/S Phase Electric Systems on 30 December, 2024
KABC0B0081682023
IN THE COURT OF THE V ADDL. SMALL CAUSES
JUDGE & XXIVth ADDL. CHIEF JUDICIAL
MAGISTRATE, Court of Small Causes, Mayo Hall Unit,
Bangalore (SCCH-20)
Present : Sri. P. Shivaraj,
B.Com. LL.B.
V Addl. Small Causes Judge,
& XXIV A.C.J.M.
Dated this the 30th day of December 2024
C.C. NO : 59769/2018
Complainant:- M/s Delton Control and Switch
Gears., proprietorship No.63/3, Arham
Towers, A K Colony, Near SBI Bank, Off
KR Road, Jayanagar 7th block,
Bengaluru-560082
Rep prop:
Sri.Chandmal Kantilal S/o Chandmal,
Aged about 71 years, represented
herein by his power of attorney holder
Sri.Shanth Kumar.K s/o
Kodandapani.C
Aged about 34 years,
(Sri.AMS., Advocate)
// VS //
Accused persons:- 1. M/s Phase Electric Systems
Partnership firm having its office at plot
No.1,2,3,4,5. Surety No.77,
Beereshwara Complex,
Karihobanahalli main road,
Peenya 2nd stage, Bengaluru-560058
2. Sri.Vijay Krishna S/o Sambhashiva
Rao, S/o Sambhashiva Rao
Aged about 38 years,
No.13, 5th B Cross, MES Road
Sharadamba Nagar, Near St.Claret
School, Jalahalli, Bangalore -560013
2 C.C.No.59769/2018
3. Sri.Sathyendra Samaga
S/o Sridhar Samaga
Aged about 38 years,
No.1/1, EWS Block,
Nandini Layout, Bangalore - 560096
4.Sri.Raghavendra Singh.S
s/o late Sathyanarayan Singh,
Aged about 38 years,
No.250/1, 26th Cross, 2nd block,
Rajajinagar, Bangalore - 560010
(Sri.O.Rajanna, Advocate)
Offence : U/s/ 138 of N.I Act of 1881.
Plea of accused : Pleaded not guilty
Final Order : Accused No.1, 2 and 4 are convicted
Date of judgment : 30.12.2024
(P. SHIVARAJ)
V Addl. Small Causes Judge,
& XXIV A.C.J.M.
-: J U D G E M E N T :-
The GPA holder of the complainant Sri.Shanta
Kumar S/o Kodandapani has filed the private complaint
U/s 200 of Cr.P.C. against the accused persons alleging
that, they have committed the offence punishable under
section 138 of Negotiable Instrument Act, 1881 (For short
N.I.Act,1881).
3 C.C.No.59769/2018
2. Complainant case is as follows:
Complainant Sri.Chandmal Kantilal S/o Chandmal
is the proprietor of M/s Delton Control and Switch Gears,
a proprietary concern. Complainant is engaged in the
business of distribution of electrical products.
Accused No.1 is the partnership firm, accused No.2
to 4 are the partners of accused No.1 firm and they are
responsible for conducting the business and day to day
affairs of the accused no.1 firm.
Complainant has supplied and delivered the RK
Cable to the accused persons on credit basis from 2015 to
2017 as per their purchase order. After delivering the
goods complainant has raised the invoices in the name of
the accused No.1 firm and due to their continues
transaction Complainant has maintained the running
account of the accused No.1 firm. As per accounts
maintained by the complainant, Accused persons were
due to pay Rs.9,75,933,61 /-. complainant has issued
letter dated 19.08.2017 seeking confirmation of the ledger
account balance which was payable by the accused
persons and its correctness was confirmed by the accused
persons. In order to pay the due amount, accused persons
have issued the cheque bearing No.000721 dated
20.08.2018 for Rs.9,75,934/- in favour of the
complainant which is drawn on ICICI Bank, Peenya
Industrial area branch, Bangalore.
4 C.C.No.59769/2018
3. As per the instructions of the accused persons,
complainant presented the aforesaid cheque for en
cashment through his banker. The aforesaid cheque was
returned dishonor with an endorsement "Funds
insufficient", to that effect complainant received the
cheque return memo from his banker on 23.07.2018.
Complainant intimated the said fact to the accused
persons and he has issued legal notice on 18.08.2018 and
it was served to the accused persons on 18.08.2018.
Further, accused persons have failed to repay the cheque
amount. Complainant alleged that, accused persons have
intentionally not maintained sufficient balance in their
bank account with an intention to dishonor the cheque.
Inasmuch, accused persons have committed the offence
punishable under section 138 of N.I. Act. On the aforesaid
allegations, the complainant approached this court and
prays this court to punish the accused and to award the
compensation.
4. Originally the private complaint was filed before
the Hon'ble LVIIIth ACMM court mayo hall unit,
Bangalore. The learned preceding officer of that court
took the cognizance for the offence punishable u/s 138 of
N.I.Act and recorded the sown statement of the
complainant. On finding prima facie case process was
issued to the accused persons.
5. Later as per the special notification
No.ADM/1/A/8/23, case transferred to this court.
5 C.C.No.59769/2018
6. After service of summons to the accused persons
they appeared before this court and they got released on
bail. Papers of the prosecution were supplied to the
accused persons. The substance of the accusation is
readout to accused persons, in the language known to
them, they pleaded not guilty and submit that they are
having defense to make.
7. In order to prove the guilt of the accused persons,
complainant adopted the evidence led by him at
pre-summoning stage as his Examination-in-chief
affidavit, produced and marked 16 documents which are
at Ex.P.1 to P.16, and is fully cross examined.
8. Accused no. 2,4 statement is recorded as per
Sec.313 of Cr.P.C. they denied and submit that they are
having evidence to lead. Case against accused No.3 is
split up and separate case is registered in
CC No.15180/2024, Accused No.2 examined himself as
DW-1, produced and marked 3 documents which are at
Ex.D1 to D.3, and is fully cross examined.
9. I have heard the arguments from the counsels
appearing for both the sides. Counsel appearing for the
accused on record has filed the written arguments. I have
perused the same along with entire record.
Counsel appearing for the complainant has relied on
the following authorities;
1. S.P.Mani and Mohan Dairy Vs Dr.Snehalatha
Elangovan- (2023) 10 SCC 685.
6 C.C.No.59769/2018
2. Rallis India Limited Vs Poduru Vidya Bhushan and
others - (2011) 13 SCC 88.
3. Samant Vs M/s KGN Traders - ILR 1994 KAR 2991
10. The following points that arise for my
determination:-
-:P O I N T S:-
1. Whether the complainant proves beyond
reasonable doubt that, the accused has
committed the offence punishable U/s
138 of the N.I Act, as alleged in the
Complaint?
2. What Order?
11. After carefully going through the materials
available on record and taking into consideration of facts
and circumstances of the case, my finding to the above
points are as follows:
Point No.1: In the Affirmative.
Point No.2: As per final order, for the following:
REASONS
12. Point No.1: PW1 being the complainant, he
reiterated the complaint averments in his sworn statement,
which is treated as his examination-in-chief affidavit.
Ex.P2 is the copy of GPA, its recitals reveals that the
PW-1 is the authorized person to represent the complainant
and to depose on his behalf. The said document has not
disputed nor denied by the accused persons.
13. Complainant has relied on original cheque as per
Ex.P5, cheque return memo as per Ex.P.6, he has issued
7 C.C.No.59769/2018
mandatory legal notice as per Ex.P.7 within 30 days from
date of receipt of Ex.P6 and the complainant has filed
complaint within stipulated period of time and he has
complied all the ingredients of section 138 of N.I.Act.
14. Accused persons have not disputed nor denied
the issuance of the cheque as per Ex.P.5 and the signature
thereon. Inasmuch complainant has established the fact of
issuance of cheque by the accused persons for the
discharge of their liability, inasmuch the initial statutory
presumption attached to the cheque has to be raised in
favour of the complainant as per Section 118 and 139 of
N.I.Act.
15. In order to rebut the initial statutory presumption
attached to the cheque, accused persons have cross
examined the PW-1. In the cross examination of PW-1, he
clearly deposed that, they have delivered the goods as per
the purchase order placed by the accused persons. He
deposed that he do not remember the details of the
purchase order. He deposed that he has tender the invoices
as per Ex.P.3 and he denied the suggestion that he has
created the invoices, he deposed that accused No.3 has
signed the account confirmation letter and other partners
have not signed as they are un-availabale at that point. He
denied the suggestion that he has created Ex.P.4 colluding
with accused No.3. He deposed that he came to know about
the dissolution of accused No.1 firm in the year 2017-18. He
denied the suggestion that the accused No.1 firm was
8 C.C.No.59769/2018
dissolved in the year 2016. He deposed that the accused
persons have not paid the earlier invoices amount as such
amount stated in Ex.P.3 does not tally with the cheque
amount that is as stated in Ex.P.5. He clearly deposed that
the accused persons were due to pay the cheque amount.
He clearly deposed that as the accused No.1 firm was
dissolved he has issued mandatory legal notice to the
residential address of the partners. He denied the
suggestion that the accused No.3 had transacted with
complainant even after the dissolution of accused No.1 firm.
16. Accused No.2 in his examination-in-chief affidavit,
he contended that their partner ship firm was dissolved in
the month of January 2016 and accused No.3 was the
custodian of cheque book, pass book, license, partnership
deed and others important documents. He contended that
accused no.3 was a tenant with complainant and he had
transacted with the complainant even after dissolution of
the firm and he came to know the said fact after obtaining
the process in the present case. He contended that the
accused No.3 in collusion with the complainant has created
Ex.P.4 and they have misused the cheque in question and
they have come up with false case with an intention to
harass the accused persons and he contended that the
accused No.2 has signed Ex.P.4 and 5 without their
knowledge and consent, accordingly they are not liable to
pay the amount.
9 C.C.No.59769/2018
17. In the cross examination, he admitted that he was
looking after the purchase department in their firm. He
admitted that he has not tender any document to show that
the accused No.1 firm was dissolved in the month of
January 2016. He deposed that he has not transacted with
the complainant. He admitted that he do not know the
details of transaction transacted by the accused No.3 with
the complainant that too after the dissolution of accused
No.1 firm. He further admitted that he has not issued public
notice intimating the public at large that accused No.1 firm
is dissolved.
18. On careful perusal and analysis of the evidence
placed on record it is evident that the accused persons have
not disputed the alleged transaction transacted with the
complainant as per the invoice and they have not disputed
the invoices which is at Ex.P3, ledger account confirmation
letter which is at Ex.P.4, and issuance of cheque as per
Ex.P.5 and signatures thereon. Ex.P.3 is the carbon copy of
computerised invoices (7 pages) which are raised in the
name of accused No.1 firm. It is true that the accused No.1
partnership firm seal, partner signature is affixed on the
said invoices which is at Ex.P3. The ledger account of the
accused persons, maintained by the complainant during the
course of his business is at Ex.P16. The details of the
invoices which is at Ex.P.3 are reflected/entered in Ex.P.16.
In the cross examination of PW-1, nothing worth has been
elicited to disprove the Ex.P.3, 4 and 16. Accused persons
10 C.C.No.59769/2018
have utterly failed to probabilised their defence that
complainant has created Ex.P.3, 4 and he has misused the
cheque in collusion with accused No.3 and Accused no.3
transacted with the complainant with out their consent and
knowledge.
It is settled principles of Law that the fact of creation
of a document has to be specially pleaded and proved by
placing positive evidence. The oral testimony of PW-1,
complaint allegations corroborates with Ex.P3, 4 and 16.
Accordingly the aforesaid contention of the accused persons
which are inconsistent to their own partnership deed
cannot be accepted as probable. Added to it, accused
persons have not elicited any material fact from the mouth
of PW-1 that A3 has transacted independently with the
complainant without their consent and knowledge. If the
aforesaid contention is true, they could have taken lawful
action against the A3. Further more accused persons could
have given stop payment instructions to their banker in
respect of the cheque in question or they could have
established before this court that they are having sufficient
balance in their bank account as on the date of the cheque.
Admittedly they have not made any effort for the same.
Their conduct falsify and crumbles the feeble improbable
contention and it cannot be accepted.
19. The copy of partnership deed is at Ex.D1.
Admittedly accused no. 1 firm is not a limited liability firm.
As per its recitals A2 to 4 are the active working partners of
11 C.C.No.59769/2018
A1 firm and all the partners could operate the bank account
individually. Apparently there is no details regarding the
manner and mode of dissolution of their partnership firm as
per their deed which is at Ex.D1. Admittedly accused
persons have not tendered documents/ evidence to show
that their firm was dissolved in January 2016. Accordingly
the aforesaid contention cannot be accepted. Counsel
appearing for the complainant has rightly argued that in
view of Section 45 of the Partnership Act, partners are liable
to pay the debts of the firm even after the dissolution of the
partnership firm. Further he argued that all the partners of
the partnership firm are vicariously liable for the debt of
firm in the capacity of partners of the firm. No contrary
arguments is canvassed by the other side on the aforesaid
points.
20. One of the contention of the accused persons is
that complainant has issued legal notice to their residential
address. In the cross examination of PW-1, he clearly
deposed that he came to know about the dissolution of firm,
accordingly he has issued mandatory legal notice to the
residential address of A2 to 4. It is not the case of the
accused persons that they are not residing in the address to
which the complainant has issued the mandatory legal
notice nor they have challenged the postal shara.
Accordingly court can safely hold and infer that
complainant has issued the mandatory notice to the last
known address of the accused persons and he has complied
12 C.C.No.59769/2018
the mandate of section 138(b) of N.I.Act. It is true that no
prudent man will issue the cheque without any justifiable
cause and no person will keep mum without taking action
for misusing the cheque belongs to the firm. In I.C.D.S Ltd
Vs Bina Shabeer and another - Crl Appeal No.797/2002-
wherein the Hon'ble Supreme of India has interpreted the
phrase "any cheque"
21. Accused has not placed acceptable cogent and
probable evidence to convince the court that, the alleged
debt does not exist or it is illegal and they fails to
probabilise the fact that the presumed facts does not exist.
Accused persons have not placed the probable evidence nor
elicited any material facts from the mouth of PW1 to rebut
or to dislodge the statutory presumption attached to the
cheque and which is raised in favour of complainant. In
other words accused persons have not placed acceptable
evidence to show that, alleged debt as alleged by the
complainant does not exist. Inasmuch the initial statuary
presumption attached to cheque, cannot be said to have
been rebutted by the accused persons . Furthermore the
suggestions made by the accused persons are not sufficient
to revert the onus on the complainant to prove his case
beyond reasonable doubt. The oral testimony of the accused
and his bare suggestions categorically shows and
establishes that they have accepted the transaction and
their guilt, liability to wards the complainant. Such being
13 C.C.No.59769/2018
the case, the version of the complainant based on the
evidence cannot be doubted and ignored.
In the authorities relied on by the counsel appearing
for the complainant, wherein the concept of rising the initial
statuary presumption, reverse onus and concept of
vicarious liability are categorically discussed. With great
respect to the aforesaid authorities and by considering and
applying the principles laid down therein, to the present
case and with the aforesaid discussion based on the
evidence placed on record and by considering the facts, and
attending circumstance of the case, I am answering this
point in the affirmative.
22. POINT NO.2:- For the foregoing reason and
discussion, on point No.1, I proceed to pass the following:
ORDER
Exercising the power conferred U/sec
255(2) of Cr.p.c. accused No.2 and 4 being
the partners of Accused No.1 firm are
convicted for the offence punishable
U/s.138 of the Negotiable Instrument
Act,1881.
Accused No.2 and 4 are together
sentenced to pay a fine amount of
Rs.10,54,130/- to the complainant within two
months from the date of this order, in default
they have to under go simple imprisonment for
a period of one year.
Out of the said fine amount, an amount of
Rs.10,49,130/- is ordered to be paid to the
complainant as compensation. The remaining
14 C.C.No.59769/2018
amount of Rs.5,000/- shall be confiscated to
the state towards litigation expenses.
The bail bond and surety bond of the
accused No.2 and 4 shall continue for next 6
months as per Sec.437-A of Cr.P.C.
{{
All the interim applications pending if any
stands disposed of.
Office is directed to supply the copy of
this judgment, at free of cost to the accused
persons forthwith.
(Dictated to the stenographer, transcribed and computerized by him, corrected
by me on computer and then pronounced by me in the open court on this the 30th
day of December -2024)
(P. SHIVARAJ)
V Addl. Small Causes Judge,
& XXIV A.C.J.M.
ANNEXURES:
1) List of Witnesses Examined on behalf of Complainant:
PW.1 : Sri.Shantha Kumar.K
2) List of exhibits marked on behalf of Complainant:
Ex.P.1 : GST certificate Ex.P.2 : Authorization letter Ex.P.3 : Invoices Ex.P.4 : Notices Ex.P.5 : Cheque Ex.P.6 : Cheque return memo Ex.P.7 : office copy of legal notice Ex.P.8 : Postal receipt Ex.P.9-12 : RPAD track 4 in nos Ex.P.13 : Postal acknowledgment Ex.P.14-15 : RPAD covers Ex.P.16 : Statement of accounts
3) List of Witnesses Examined on behalf of Accused:
DW.1 : Sri.Vijayakrishna
15 C.C.No.59769/2018
4) List of exhibits marked on behalf of Accused :
Ex.D.1-2 : Copy of partnership deed, and its
registration copy
Ex.D.3 : Copy of rent AgreementSd/-
(P. SHIVARAJ)
V Addl. Small Causes Judge,
& XXIV A.C.J.M.
