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Bangalore District Court
Mangalore Chemicals And Fertilizers … vs Dayanand Agro Services on 17 April, 2025
KABC0B0090792023
IN THE COURT OF THE XVII ADDL. JUDGE, COURT OF
SMALL CAUSES &
ADDL. CHIEF METROPOLITAN MAGISTRATE,
MAYO HALL UNIT, BENGALURU (SCCH-21).
PRESENT: Sri. VIJAYKUMAR S. HIREMATH, LL.B.,
XVII ADDL. JUDGE, Court of Small
Causes & ACJM, Bengaluru.
Dated: This the 17th Day of April-2025
C.C. No.53341/2022
Complainant : Mangalore Chemicals and Fertilizers Ltd.
A company incorporated under
Companies Act, 1956 having its
registered Level 11, UB Towers, UB City,
24, Vittal Mallya Road,
Bengaluru-560001.
Represented by Authorized signatory
Mr. Prasanna. K. P
(By Sri. Uday Shankar. R. M, Adv.,)
V/s.
Accused : 1. Dayanand Agro Services
Gadhinglaj, Gadhinglaj Tahsil,
Kolhapur District,
Maharastra - 416 502.
2. Kashinath Ramgonda Kanade
Proprietor,
Dayanand Agro Services,
Gadhinglaj, Gadhinglaj Tahsil,
Kolhapur District,
SCCH 21 2 C.C.No.53341/2022
Maharastra - 416 502.
(By Sri. S. H. Kazi, Adv.,)
Date of institution of the Complaint : 16.07.2021
Nature of the Complaint : U/Sec.138 of N. I. Act
Date of commencement of : 29.04.2024
recording of the evidence
Date on which the Judgment was : 17.04.2025
pronounced
Duration of the Complaint Year/s Month/s Day/s
03 09 01
JUDGMENT
The accused No.1 and 2 in this case are tried for the
offence punishable under Section 138 of Negotiable Instrument
Act 1881, on the complaint of the complainant.
2. The brief facts of the complainant’s case is that:
The complainant company is engaged in the business of
manufacturing and distribution of the fertilizers, agro
chemicals and other products and the complainant is dealing
in the sale of fertilizers and pesticides. The complainant herein
is represented by its authorized signatory Mr. Prasanna. K. P.
as per Board Resolution dated: 04.02.2021. The accused No.1
is a proprietorship concern and is a fertilizer dealer inter alia
engaged in the business of selling products manufactured by
the complainant. Accused No.2 is the Proprietor of accused
No.1 and all the transactions with the complainant have been
SCCH 21 3 C.C.No.53341/2022carried out by accused No.2. In furtherance of the same, the
complainant supplied various products and raised various
invoices against the supplies made. Towards the part payment
of outstanding amount payable to client, the accused issued
the present cheque bearing No. 747910 dated: 25.02.2021 for
sum of Rs.6,97,488/- drawn on Canara Bank, Gadhinglaj and
assured the complainant that the same would be honoured
upon presentation. The complainant presented the said cheque
for encashment through its bank, Axis Bank, M G Road
branch, Bangalore, but the said cheque came to be
dishonoured for the reason “Account Closed” on 26.02.2021.
Thereafter on 24.03.2021 complainant got issued legal notice
to accused through RPAD demanding for repayment of the
cheque amount within 15 days from the date of receipt of the
notice. The said notice is returned with as “Left Address”. But
the accused persons not paid the cheque amount. Therefore,
the complainant has filed this complaint.
3. On filing of the complaint cognizance was taken for
the offence punishable under section 138 of N. I. Act and
sworn statement was recorded. As there was sufficient ground
to proceed further, a criminal case has been registered against
the accused and was summoned. The substance of accusation
is stated to the accused No.2 and his plea was recorded.
Accused No.2 pleaded not guilty and submitted that he has
defence to make.
SCCH 21 4 C.C.No.53341/2022
4. In support of the complainant’s case, the sworn
statement of the complainant filed by its authorized signatory
during the pre-summoning stage is considered as evidence of
the complainant and Ex.P.1 to Ex.P.10 documents are marked.
The statement of the accused No.2 is recorded under Section
313 of Cr.P.C and his answers were recorded and accused
No.2 examined himself as DW.1, but no documents are
produced on his behalf, but during the course of cross-
examination counsel for complainant confronted two
documents and same are marked as Ex.P.11 and Ex.P.12
infavour of complainant.
5. Heard the arguments on both sides.
The learned counsel for complainant relied upon the
following citations:
1. (2001) 8 SCC 458: K. N. Beena Vs.
Muniyappan and Others.
2. AIR 1999 SC 1952: NEPC Micon Ltd. Vs.
Magma Leasing Ltd.,
3. 2004 Cri. L. J 414: Vathsan Vs. Japhari.
4. Criminal Appeal No. 2661/2012, Hon’ble
High Court of Karnataka: Meera M. Deshpande Vs.
Sandeep S. Chandagadkar.
5. Criminal Appeal No. 508/2015, Hon’ble High
Court of Karnataka : Parvathamma. M Vs.
Chandrakala. V
6. 2014(4) CRIMES 465 (SC) : H. Pukhraj Vs. D.
Parasmal.
SCCH 21 5 C.C.No.53341/2022
7. Suo Moto WP(c) No.3/2020, In Re :
Cognizance for extension of limitation period
decided by Hon’ble Supreme Court.
8. Cri. R. P. No. 814/2021: C. Niranjan Yadav
Vs. D. Ravi Kumar.
6. The points that arise for my consideration are:
1. Whether the complainant proves
that accused have committed an
offence punishable under Section
138 of N. I. Act 1881?
2. What order?
7. My answer to the above points is as follows:
Point No.1 : In the Affirmative,
Point No.2 : As per final order,
for the following:
REASONS
8. POINT No.1: In order to constitute an offence
under Section 138 of N. I. Act, the cheque shall be presented to
the bank within a period of 3 months from its date. On its
dishonor, the drawer or holder of the cheque as the case may
be shall cause demand notice within 30 days from the date of
dishonor, demanding to repay within 15 days from the date of
service of the notice. If the drawer of the cheque fails to repay
the amount mentioned in the cheque within 15 days from the
SCCH 21 6 C.C.No.53341/2022
date of service of notice, cause of action arises for filing
complaint.
9. The sworn statement of the complainant filed by its
authorized signatory during the pre-summoning stage is
considered as the evidence of the complainant. In his affidavit,
he has testified regarding the issuance of cheque, issuance of
demand notice and also failure of the accused to pay the
cheque amount. The complainant has produced cheque for
Rs.6,97,488/- bearing No.747910 dated 25.02.2021 alleged to
be issued by the accused. Ex.P.1 is the Board Resolution,
Ex.P.2 is the statement of account, Ex.P.3 is the GST Invoices,
Ex.P.4 is the cheque stands in the name of complainant,
Ex.P.5 is the endorsements issued by the bank stating
dishonor of Ex.P.4 cheque, Ex.P.6 is the office copy of legal
notice, Ex.P.7 & 8 are the postal receipt for having sent legal
notice to the accused, Ex.P.9 & Ex.P.10 are the postal
acknowledgments.
10. As stated in the averments in the complaint, it goes
to show that the complainant supplied various products and
raised various invoices against the supplies made. Towards the
part payment of outstanding amount payable to client, the
accused had issued a cheque bearing No. 747910 dated:
25.02.2021 drawn on Canara Bank, Gadhinglaj branch and
assured the complainant that the same would be honoured
upon presentation. The complainant presented the said cheque
for encashment through its bank, Axis Bank, M G Road
SCCH 21 7 C.C.No.53341/2022branch, Bangalore, but the said cheque came to be
dishonoured for the reason “Account Closed” on
01.03.20211. Thereafter on 24.03.2021 complainant got
issued legal notice. In support of the case, the complainant
himself examined as PW.1 and got marked Ex.P.1 to P.10 as
discussed above, it could be seen that the legal requirements
as contemplated U/Sec.138 of N. I. Act has been duly complied
for which it has been held that the complaint is maintainable
in the eyes of law.
11. Having gone through the defence raised by the
accused, he is not disputing that cheque in question and
signature thereon are not belongs to him. It is well settled that,
when once the issuance of the cheque and signature is
admitted, the presumption as contemplated U/s 139 of N. I.
Act has to be raised in favour of the complainant. The course
open to the accused is to rebut the said presumption by
raising a probable defence. In this context of matter, it is
useful to refer the decision of the Hon’ble Apex Court in APS
FOREX SERVICES PRIVATE LTD., V/S SHAKTHI
INTERNATIONAL FASHION LINKERS AND OTHERS
reported in AIR 2020 Supreme Court 945, wherein, it has
been observed and held that once the issuance and the
signature of the cheque/s is admitted, there is always
presumption in favour of complainant that there exists legally
enforceable debt or liability.
SCCH 21 8 C.C.No.53341/2022
12. It is also profitable to refer another decision of the
Hon’ble Apex Court in P.RASIYA V/S ABDUL NAZEER AND
ANOTHER reported in 2022 SCC Online Supreme Court
1131, wherein, it has been observed and held that once the
initial burden is discharged by the complainant, that the
cheque was issued by the accused and signature of the
accused on the cheque is not disputed, then in that case, the
onus will shift upon the accused to prove the contrary that the
cheque was not for discharge or any debt or other liability.
13. On the other hand, accused has taken defence that,
legal notice is not served upon the accused, complainant has
not mentioned invoice details and dates of delivery in the legal
notice and after though they have created the invoices, as such
invoices are not tallied with contents of notice as well as
complaint. Further, accused also taken defence that, the
cheque in question issued by him is only for the security
purpose. In support of his defence accused No.2 i.e., Proprietor
of accused No.1 firm examined himself as DW.1, but he has
not produced any documents.
14. On perusal of the document at Ex.P.1 submitted by
the complainant reveals that, PW.1 is authorized person to
adduce evidence before this Court. Further on perusal of
statement of accounts at Ex.P.2 it reveals that, outstanding
amount as on 31.03.2021 is Rs.6,97,488.40. Further, on
perusal of Tax Invoice at Ex.P.3 it reveals that, complainant
had supplied the materials mentioned in the Tax Invoice for an
SCCH 21 9 C.C.No.53341/2022
amount of Rs.8,20,673/-. Further, on perusal of Ex.P.11 and
Ex.P.12 i.e., the letter issued by the accused as well as letter
issued by the complainant to the accused reveals that, as on
31.03.2016 accused is liable to pay Rs.11,04,713.09. During
the course of arguments learned counsel for accused
contended that, invoices produced at Ex.P.3 does not contain
the seal and signature of the accused. But on going through
the cross-examination of PW.1, it reveals that, complainant
used to supply the materials to the accused from 2013.
Further, counsel for complainant himself during the cross-
examination of PW.1 suggested that, towards the materials
delivered accused has paid Rs.35,00,000/- to the complainant.
This itself shows that, there is a transaction between the
complainant and accused. Further, on perusal of Ex.P.11 i.e.,
Confirmation letter issued by the accused reveals that, as on
28.05.2016 accused is still liable to pay Rs.11,04,713.09. But
accused denied the contents of the said Ex.P.11, however, he
admitted his signature as well as letter head. Though accused
denied the contents of Ex.P.11 but in support of his denial he
has not taken any positive steps to show that, he has not
written anything on Ex.P.11. Further, in the cross-examination
itself accused himself admits that, on each and every time after
delivery of materials complainant company used to take blank
letter head. This itself shows that, there is transaction between
the complainant and accused. Moreover, accused himself in
his cross-examination admits that, as per Ex.P.12 the
outstanding amount payable by accused is Rs.11,04,713.09.
Further, he depose that, he has paid Rs.4 to 5 lakhs to the
SCCH 21 10 C.C.No.53341/2022
complainant. But in support of his defence accused failed to
produce statement of accounts as well as Bank statement
indicating payments made to the complainant. So, on going
through the above oral as well as documentary evidence this
Court opine that, accused is still liable to pay amount
mentioned in the cheque.
15. This court perused the citations produced by the
learned counsel for complainant. In the case between K. N.
Beena and Muniyappan, Hon’ble Apex court held that, the
burden of proving the cheque has not been issued for a debt or
liability is on accused. In the case between NEPC Micon Ltd
Vs. Magma Leasing Ltd., the Hon’ble Apex Court held that,
when the cheque is returned by the bank with endorsement
account closed, it would amount to returning the cheque
unpaid. In another case between P. M. Salim Vs. P. J.
Thomas, Hon’ble High Court of Kerala held that, if accused
closes the bank account but he retains unused cheque leaves
then in such circumstances, for the purpose of proceedings
Sec.138 of N. I. Act is maintainable. In another case between
Vathsan Vs. Japahari, Hon’ble High Court of Kerala held that,
if accused had issued a cheque then, he cannot take up
defence that, he did not have subsisting account on the date of
drawal of cheque. In the case between Meera M. Deshpande
Vs. Sandeep S. Chandagadkar, the Hon’ble High Court of
Karnataka held that, mere suggesting his defence to the
complainant during cross-examination and getting denial,
cannot be considered as probabilising the defence. In the case
SCCH 21 11 C.C.No.53341/2022
between Parvathamma. M Vs. Chandrakala, the Hon’ble
High Court of Karnataka, opined that, the standard of proof
which was to be discharged by the accused is heavy on
accused and also observed that, if the offence u/s 138 of N. I.
Act is duly proved the accused is to be sentenced with the fine
of twice the cheque amount. In the case between H. Pukhraj
Vs. D. Parasmal, the Hon’ble Apex Court held that, the court
should unless there are special circumstances, in all cases of
conviction, inform the exercise the power to lieu amount twice
the cheque amount keeping in view the cheque amount and
the simple interest thereon at 9% p.a.,
16. In this case, learned counsel for accused taken
defence that, complainant has not mentioned anything about
legal notice. There is no mandate under the law to mention
each and every aspect in the demand notice. Lastly, accused
has taken defence that, the said cheque in question is issued
by him is towards the security purpose. During his cross-
examination accused admits that, he does not have any
acknowledgment for having issued blank cheque. So, accused
failed to prove that, said cheque is issued by him for the
complainant for security purpose. Accused has taken defence
that, legal notice is not served upon him. On perusal of postal
endorsement at Ex.P.9 it reveals that, the said postal cover
returned with an endorsement ‘Addressee left’. During the
course of cross-examination accused depose that, the address
mentioned in the cause title of the complaint as well as notice
is wrong. But to substantiate the said contention accused has
SCCH 21 12 C.C.No.53341/2022
not furnished his correct address before the court. Moreover,
summons of this court also served upon the accused on the
same address. As such, defence taken by the accused in
respect of non-service of notice holds no water. Further,
accused also taken defence that, he has issued signed blank
cheque but he has not written amount, other things on
cheque. But as per Sec. 20 of N. I. Act, said defence is not
tenable.
17. On over all perusal of the materials on record, the
accused has not disputed the relationship and also the
transaction. As such, the complainant has proved that there
was business transaction between the accused and the
complainant and accused is liable to pay the cheque amount.
The accused has failed to raise his defence by replying to the
notice. The accused has not disputed with regard to the
issuance of cheque and signature thereon necessarily the
presumption as contemplated U/s 313 of Cr.P.C., has to be
raised in favour of the complainant. On perusal of the
materials on record, the accused has failed to show that he
has rebutted the presumption by raising probable defence. In
the absence of the sufficient evidence on record by the
accused, the benefit of presumption as contemplated U/s 118
and 139 of N. I. Act has to be drawn in favour of the
complainant. Accordingly, Point No.1 is answered in the
Affirmative.
SCCH 21 13 C.C.No.53341/2022
18. POINT No.2: Section 138 of N.I. Act empowers the
Court to sentence the accused upto two years and also to
impose fine which may extend to twice the amount of cheque
or with both. The cheque in question was issued on
25.02.2021 for Rs.6,97,488/-. The complainant was deprived
of money that was rightfully due to it for a period of almost 03
years 08 months. So, having considered above facts and
circumstances, if the interest is calculated at 9% p.a. on the
cheques amount for the above period certainly the complainant
is entitled for suitable compensation to the cheque amount as
per Sec.80 of N. I. Act. Hence, in this case Rs.6,97,488/- is
the cheque amount and interest at 9% for 03 years 08
months if calculated will amounts to Rs.2,30,164/- as the
case is pending about 44 months and as such the total
amount including interest will be of Rs.9,27,652/-.
19. However, having regard to the facts of the case and
the amount involved, there are no warranting circumstances to
award the sentence of imprisonment as substantive sentence.
Directing the accused No.2 to pay fine and also awarding
compensation to the complainant would meet the ends of
justice. But adequate default sentence shall have to be
imposed to ensure the recovery of fine imposed to the accused
No.2. Therefore, the complainant is required to be suitably
compensated as per Section 80 and 117 of the Negotiable
Instrument Act and also appropriate in default sentence.
Accordingly, I pass the following:
SCCH 21 14 C.C.No.53341/2022
ORDER
Acting U/Sec.255(1) of Cr.P.C. the
accused is found guilty for the offence
punishable under Sec.138 of N. I. Act and he
is sentenced to pay a fine of Rs.9,27,652/-
(Rupees Nine lakh twenty seven thousand six
hundred and fifty two Only).
In default to pay fine, the accused No.2
shall undergo simple imprisonment for a
period of six months.
Further, acting U/Sec.357(1)(b) of Cr.P.C.,
on recovery of entire fine amount, a sum of
Rs.9,27,652/- shall be paid as compensation
to the complainant.
The office is directed to supply a free
copy of judgment to the accused.
(Dictated to the Stenographer directly on computer, typed by her,
same is corrected, signed and then pronounced by me in the open court
on this the 17th day of April, 2025)
(VIJAYKUMAR S. HIREMATH)
XVII ADDL. JUDGE,
Court of Small Causes & A.C.M.M, Mayo
Hall Unit, Bengaluru.
ANNEXURE
List of witnesses examined on behalf of the complainant:
P.W. 1 : Sri. Prasanna K. P SCCH 21 15 C.C.No.53341/2022
List of documents exhibited on behalf of the complainant:
Ex.P.1 : Board Resolution
Ex.P.2 : Statement of Accounts
Ex.P.3 : GST Invoices
Ex.P.4 : Cheque
Ex.P.5 : Bank Endorsement
Ex.P.6 : Office copy of legal notice
Ex.P.7 & 8 : Postal Receipts
Ex.P.9 & 10 : Postal Acknowledgment
Ex.P.11 : Letter having accused company letter head
Ex.P.12 : Confirmation of sundry debtors balance
letter
List of witnesses examined on behalf of the defence:
DW.1 : Kashinath Kanade
List of documents exhibited on behalf of the defence:
-NIL-
(VIJAYKUMAR S. HIREMATH)
XVII ADDL. JUDGE,
Court of Small Causes &
A.C.M.M, Mayo Hall Unit, Bengaluru.
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