Karnataka High Court

M/S Light Mass Solutions Pvt Ltd vs M/S Gsr Travels on 21 October, 2024

Author: V Srishananda

Bench: V Srishananda

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                                                  NC: 2024:KHC:42138
                                              CRL.RP No. 315 of 2023




              IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                   DATED THIS THE 21ST DAY OF OCTOBER, 2024

                                   BEFORE
                    THE HON'BLE MR JUSTICE V SRISHANANDA
               CRIMINAL REVISION PETITION NO. 315 OF 2023
            BETWEEN:

               M/S LIGHT MASS SOLUTIONS PVT.LTD.,
               REP. BY ITS CEO
               MR. PRAMODH KUMAR,
               OFFICE AT NO. 171,
               FIRST FLOOR,
               DAYS GARDEN LAYOUT,
               KAMMASANDRA,
               ELECTRONIC CITY POST,
               BENGALURU 560 100

               COMMUNICATION ADDRESS:
               SRI. KRISHNA AKSHAYA MANSION,
               1ST FLOOR,
               NO .9, 27TH MAIN,
               1ST PHASE,
               100 FEET RING ROAD,
Digitally      BTM LAYOUT,
signed by      BENGALURU 560 068
MALATESH                                              ...PETITIONER
KC
            (BY SRI. KUMBAR VASANT FAKEERAPPA., ADVOCATE)
Location:
HIGH        AND:
COURT OF
KARNATAKA      M/S GSR TRAVELS,
               OFFICE AT NO. 02,
               JAYADEVA SIGNAL,
               BTM 2ND STAGE,
               BENGALURU 560 076,
               REP. BY ITS PROPRIETOR
               SMT. SREEDEVI LAD,
               W/O GANGADHAR RAO,
               AGED ABOUT 32 YEARS,
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                                          NC: 2024:KHC:42138
                                      CRL.RP No. 315 of 2023




    NO. 02, JAYADEVA SIGNAL,
    BTM 2ND STAGE,
    BENGALURU 560 076
                                              ...RESPONDENT
(BY SRI. MOHAMMED ALI, ADVOCATE FOR
    SRI. K.P. BHUVAN, ADVOCATE)

     THIS CRL.RP IS FILED U/S. 397 R/W 401 OF CR.P.C
PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT OF
CONVICTION AND SENTENCE DATED 07.04.2021 PASSED IN
C.C.NO.52272/2015 RENDERED BY XVII ADDITIONAL JUDGE
COURT OF SMALL CAUSES AND ADDITIONAL CHIEF
METROPOLITAN    MAGISTRATE,   MAYO    HALL     UNIT, AT
BENGALURU WHICH IS CONFIRMED IN CRL.A.NO.25066/2021
JUDGMENT DATED 14.12.2022 BY HONBLE LXXII ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE, MAYO HALL UNIT AT
BENGALURU (CCH-73) BY ACQUITTING THE PETITIONER FROM
THE ALLEGED OFFENCE P/U/S 138 OF THE N.I. ACT.

    THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM:    HON'BLE MR JUSTICE V SRISHANANDA


                       ORAL ORDER

Heard Sri.Kumbar Vasant Fakeerappa, learned

counsel for the revision petitioner and Sri.Mohammed Ali,

learned counsel appearing on behalf of Sri.K.P.Bhuvan,

learned counsel for the respondent.

2. The present revision petition is filed by the

accused/revision petitioner challenging the order of

conviction and sentence passed in CC No.52272/2015

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dated 07.04.2021 on the file of XVII Addl. Judge, Court of

Small Causes and Addl. ACMM, Bengaluru (SCCH-21) for

the offence punishable under Section 138 of the

Negotiable Instruments Act and ordered to pay fine in a

sum of Rs.10,00,000/- out of which sum of Rs.9,95,000/-

is to be paid as compensation to the complainant and

balance sum of Rs.5,000/- to be paid towards defraying

expenses of the State which was confirmed in Criminal

Appeal No.25066/2021 dated 14.12.2022 on the file of

LXXII Addl. City Civil and Sessions Judge, Mayo Hall,

Bangaluru (CCH-73).

3. Brief facts of the case which are utmost

necessary for disposal of the revision petition are as

under:

3.1. A complaint came to be filed under Section 200

of Cr.P.C. seeking action against the accused for the

offence punishable under Section 138 of the Negotiable

Instruments Act by contending that complainant provided

travel services to the accused and outstanding amount

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payable by the accused towards the utilization of the

travel services was to the tune of Rs.6,48,544/-. To

discharge the said amount, accused passed on three

cheques in a sum of Rs.1,50,000/-, 1,50,000/- and

3,48,544/- on 10.07.2014, 15.08.2014 and 20.09.2014

respectively. Those cheques on presentation came to be

dishonored and therefore, legal notice was issued. There

was no compliance to the callings of the legal notice nor

there was a reply. Therefore, complainant approached the

jurisdictional Magistrate for taking action.

4. The learned Trial Magistrate after completing

necessary formalities, took cognizance of the aforesaid

offences and secured the presence of the accused.

Thereafter, plea was recorded and accused pleaded not

guilty. Therefore, the trial was held.

5. In order to prove the case of the complainant,

complainant got examined himself as P.W.1 and relied on

twenty eight documents which were exhibited and marked

as Exs.P.1 to Ex.P.28 comprising of cheques, bank

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endorsements, copy of the demand notice, postal receipts,

postal acknowledgement, postal cover, certified copy of

the cheqye, certified copy of auditors report, balance sheet

and financials of financial year 2013-14 and 2014-15,

authorization letter, agreement dated 01.05.2013 and e-

mails.

6. Detailed cross-examination of P.W.1 did not

yield any positive material so as to disbelieve the version

of the complainant that complainant provided travel

services to the accused and there was an outstanding

amount to the tune of Rs.6,48,554/- nor was sufficient

enough to dislodge the presumption available to the

complainant under Section 139 of the Negotiable

Instruments Act.

7. Thereafter, learned Trial Magistrate recorded

the accused statement as is contemplated under Section

313 of Cr.P.C. wherein, accused has denied all the

incriminatory materials.

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8. To rebut the presumption available to the

complainant under Section 139 of the Negotiable

Instruments Act, on behalf of the accused company, one

Pramod Kumar is examined as D.W.1 and another witness

namely Leena Kavitha is examined as D.W.2. On behalf of

the accused, thirteen documents were placed on record

comprising of account statement, certified copy of the

complaint and acknowledgement, certified copy of FIS

report, certified copy of letter to Commissioner dated

13.11.2018, letter of Citi Bank, certified copy of Form

No.1, certified copy of Memorandum of Association,

certified copy of Articles of Association, Board Resolution

dated 22.05.2013 and 06.05.2013, rent agreement, rent

receipt, state of account of Citi bank.

9. On conclusion of recording of the evidence of

both the parties, learned Trial Judge heard the parties in

detail and convicted the accused interalia holding in

paragraph Nos.18 and 19 as under:

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"18. One of the contention raised by the accused is that all the directors of private limited company are not made as accused and therefore, the complaint against accused is not maintainable. As per the case of the accused, M/s. Light Mass Solutions Pvt., Ltd., had three directors and two other directors are not made as accused. It is needless to mention that even if there are several directors, the prosecution under section 138 of N.I. Act is maintainable only against those directors who are in charge of and responsible for the conduct of the business of the company.

Therefore, the directors who are not involved in the act of issuance of cheque cannot be made as accused Further, the law does not mandate that all the directors shall arrayed as accused. Hence, this contention is unsustainable.

19. The another contention raised by the accused is that there is no averments in the complaint to the effect that the accused was in charge of and responsible for the conduct of business of the company. In this regard, the learned counsel appearing for the accused also placed reliance on the decisions rendered in the case of Shaju K Nair Managing Director, M/s. Clariya Marketing Services Pvt. Ltd.. and another vs. M/s. S.L.V. Steels and Alloys Pvt. Ltd., (2019(2) Kar. L.R.6), M/s. Ramasita Finance and Investments Pvt. Ltd., vs. Smt. Meenakshi Nagappa Halamanavar (2004 Crl. L.J.1029), S.M.S. Pharmaceuticals Ltd., vs. Neeta Bhalla and another ((2005) 8 SCC 89). Himanshu vs. B.Shivamurthy and Anr. (AIR 2019 SC 3052), Basalingappa vs. Mudibasappa (AIR 2019 SC 1983). There is no dispute that when a complaint is filed against the directors of the company, complaint shall indicate that those directors were in charge and responsible for the day to day affairs of the company. Section 141 of N.I. Act mandates such an averment in the complaint with an object of avoiding implication of directors who are not yet all responsible for the dishonor of cheque. In other words, the averment is required to protect the

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directors from prosecution who are not yet all responsible in the day to day affairs of the company and liable to issue the cheque. This section is intended to make a distinguish between the responsible directors and the innocent directors."

10. As against the cheque amount of Rs.6,48,554/-,

learned Trial Magistrate imposed fine in a sum of

Rs.10,00,000/-, out of which sum of Rs.9,95,000/- is to be

paid as compensation to the complainant and balance sum

of Rs.5,000/- to be paid towards defraying expenses of the

State.

11. Being aggrieved by the same, the accused

preferred an appeal before the First Appellate Court in

Criminal Appeal No.25066/2021.

12. Learned Judge in the First Appellate Court after

securing the records and hearing the arguments of the

parties in detail, noted the material evidence on record

specifically, the contentions urged on behalf of the accused

that between May 2013 to December 2013, the services

rendered by the complainant to the accused was free of

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cost which has been denied by P.W.1 and has thus

concluded that the learned Trial Magistrate was justified in

convicting the accused for the offence punishable under

Section 138 of the Negotiable Instruments Act and rightly

dismissed the appeal.

13. Being further aggrieved by the same, accused

is before this Court, in this revision on following grounds:

 The judgment passed by the trial court and first appellate court is illegal, arbitrary, capricious, perverse, and against to the principle of natural justice totally without application of mind and patently perverse. Hence, the impugned judgment passed by the trial court which is confirmed by the 1st appellate court is liable to be set aside.

 The 1st Appellate court has not at all applied its mind while re-evaluating the evidence on record and finally rendered verdict dismissal in nature which is not considerable in the serious test of law.

 That, it is specific case of the petitioners that, accused has denied Ex.P15 agreement said to have been entered by the accused company with complainant company, further it is also elicited from the mouth of PW-1 that, at no point of time, complainant provided the service and the cheques obtained as security have been misused by the complainant, hence, same has not been considered by the trial court as well as first appellate court, same has lead to miscarriage of justice, hence the impugned judgment are liable to be set aside.

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 It is relevant to note that, the respondent have not complied with the mandatory requirements as envisaged under Section 138 of the N.I.Act, by issuing cause notice to the lonely to the petitioner company describing Accused as CEO and not in the individual notice to the Accused and not for the other directors of the Accused company, in other words no notice is issued other directors as per the provision envisaged Under Section 141 and 142 of the Negotiable Instruments Act, which fact is clearly admitted by the PW-1 at the time of cross examination, but both the courts taking shelter under the general clauses act, has rendered great injustice by convicting the petitioner which is not proper.

 That, it is the duty of the complainant to establish the case by producing the cogent documentary evidence, but complainant has not produced any piece of a document to corroborate the oral say to connect the accused for the alleged offence, but the trial court and first appellate court having found sufficient material and convicted the accused which is not proper.

 The learned court has observed that, the petitioners have not proved the defence by cogent evidence but it is trite impossible to accept that, the accused need has examined and also examined another independent witness and produced sufficient documents to disprove the case of the complainant to prove his innocence as also rebut the presumption from elucidating the crucial facts from the mouth of the PW-1 itself, hence the findings are not proper.

 Both the courts have not considered the oral and documentary evidence in a proper and perspective manner and there is absolutely no compliance of mandatory provisions of Section 138 of the Negotiable Instruments Act. Hence, the impugned judgments are liable to be set aside.

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 The Accused company is a registered company and there are other directors of the company. The other directors have not been issued with demand notice, nor made as party to the criminal case and therefore, complaint itself is not maintainable, this crucial facts has not been appreciated by both the courts, hence, the impugned judgments are liable to be set aside.

 Both the courts have failed to appreciate the fact that, the Accused has rebutted the presumption available infavour of the complainant Under Section 139 of the Negotiable Instruments Act by examining couple of witnesses, despite of same, convicted the accused which is not proper.

 It is crucial to note that, as elucidated from the mouth of the PW-1 one Ravi Shastri the Administrate Manager of the petitioner company was involved in mismanagement of affairs of the company and criminal case its registered against the said Ravi Shastri and the said fact was ignored by the trial court. The Respondent in totally with collusion with the said person has filed security cheques in this fashion. Hence, the impugned judgments are bad in eye law.

 Both the courts were completely failed in replying on Ex.P24 to hold that petitioner has issued the cheques towards legally dischargeable debt is absolutely erroneous.

 Both the courts were completely failed to appreciate the evidence of the DW-2 in a proper and perspective manner and has passed impugned judgments which are totally amounts to miscarriage of justice.

 Both the courts were erred in replying Ex.P14 and Ex.P15 which are totally invalid documents, hence the impugned judgments are bad in eye of law.

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 That, the Judgment passed by the Trial Court is wholly contrary to true facts and circumstances duly proved by the accused and the order of conviction, Sentence, direction for recovery of alleged amount from the petitioner/ accused are illegal and wholly contrary to the mandatory provisions of law and the same is based upon improbabilities of the case, surmises and conjectures. Hence, the impugned judgment passed by the trial court and 1st appellate court is liable to be set aside.

 That, the first appellate court which was expected to re-appreciate the ocular evidence and documents available on record has passed cryptic order of dismissal which is not proper.

 That, Petitioners have totally denied presence of legally recoverable debt, the alleged issuance of cheque in question infavour of the Respondent/complainant, alleged service of notice and the alleged committing of offence punishable under Section 138 of the Negotiable Instruments Act, inspite of it the trial court convicted the accused which is required to be set aside.

 That, the conclusion arrived at by the Trial Court has illegally expected the Accused to prove the negative thing instead of calling upon the respondent/complainant to prove the alleged positive thing, lending the amount and existence of legal recoverable debt from the accused. Hence, on this ground also the impugned judgment is required to be set aside.

 That, Trial Court has illegally shifted the burden of proving the existence of legally recoverable debt with respect to Cheque in question on the Accused and thereby has caused great injustice to the Petitioners. It is submitted that at the initial point, the duty to discharge the burden of proof for proving the existence of legally recoverable debt was required to be casted upon the Respondent/complainant. But,

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the Trial Court has illegally jumped to the conclusion that the Accused is required to prove the negative thing and the said conclusion arrived at by the Trial Court is wholly unjustified and is not sustainable. Hence, the impugned judgment is liable to be set aside.

 Both the courts illegally and erroneously shifted the burden of proof on the accused by blindly assuming and presuming that the burden is on the accused to rebut the case of the complainant and to rebut the presumption available to this complainant under Sec. 139 of Negotiable Instruments Act and further has illegally jumped to the wrong conclusion that the accused has utterly failed to rebut the presumption available to the complainant under Sec. 118 and 139 of the Negotiable Instruments Act, even though the complainant has not discharged his burden to prove at the initial point so as to attract and apply the presumptions under Sec. 118 and 139 of the Negotiable Instruments Act. Hence, the Trial Court has not understood the legal requirement and necessities to be proved before drawing presumptions infavour respondent/complainant of the and thereby has caused great injustice to the petitioner/accused. Hence, on this ground also the impugned judgment is required to be set aside.

 Both the courts passed the impugned judgment under the wrong understanding and main misconception by mis directing itself without examining the paramount important and necessary requirement regarding discharge of proof of "existence of legally recoverable debt" which is not at all permissible to be presumed but is mandatorily required to be proved in accordance with law by producing evidence so as to enable the Court to drawing presumption under Sec.118 and Sec.139 of the Act. In the above case, the respondent/complainant having utterly failed to discharge the burden of proof regarding existence of legally recoverable debt itself, has been given with

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the undue advantage of presumption under law for which the respondent/complainant is not at all legally entitled to. Hence, on this ground also the impugned judgment is required to be set aside.

 Both the courts erroneously jumped to the conclusion that the "the complainant by adducing oral and documentary evidence before this Court has proved the guilt of the accused beyond reasonable doubt" even though the complainant has miserably failed to discharge his burden of proof mandatorily required to be discharged by proving the existence of legally recoverable debt. The Trial Court has failed to take judicial note of the fact that the PW-1 witness has failed to depose before the Trail Court regarding the date of alleged transaction of lending loan and also the dates of issuance of alleged cheques by the petitioner/ accused. Hence, the Trial Court has illegally neglected the principles and guidelines laid down by the Hon'ble Supreme Court of India in several reported decisions.

 That, sessions Court instead of appreciating the available documentary evidence has illegally and erroneously brushed aside all the admissible documentary evidence and has illegally passed the impugned judgment.

 That, from the narration of wrong conclusions and illegal assumptions and presumptions drawn infavour unwarranted of the respondent/complainant, and has hopelessly failed to understanding the requirements and necessary ingredients to adjudicate the alleged claim of the respondent/complainant in the above mentioned case and thereby has caused great injustice to the petitioner/accused.

 That, in that event also the alleged amounts of loan transaction with respect to the petitioners cannot be considered as legally recoverable debt and as such the provision of Sec.138 of Negotiable Instruments Act is not attracted to the above mentioned case as

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against the petitioners. Hence, the Petitioners is legally entitled to an order of acquittal. On this ground also the impugned judgment is required to be set aside.

 Both the courts without appreciating the facts and without applying the propositions of law in the manner as required under law and without examining the case of the complainant on judicious principles has illegally convicted the accused and thereby has encouraged the complainant to continue with his illegal activities of mis-using the cheque which are not belonging to him and also to continue his illegal acts of money lending acts without having valid license and thereby doing illegal activities.

 Both the courts completely failed to appreciate material variations and contradictions in the pleading and evidence of the Respondent in respect of the alleged liability, the date, issuance of alleged cheques, alleged service of notice, alleged transaction, contradictions and omissions between the documents.

 Both the courts have erred under law by misapplying provisions of Section 118 &139 of Negotiable Instruments Act, without proper appreciation of the facts and the deposition of the respondent.

 Both the courts ought to have appreciated that the presumption as provided under Section 139 of the Negotiable Instruments Act has been duly rebutted by the petitioner but failed to take judicial note of the same.

 That, on the above facts and circumstances, the impugned order passed by the Hon'ble Trial Court is not a speaking order, and the same has been passed without application of mind, without perusing the evidence available on record, without examining the case of the complainant and defence of the petitioner on judicious principles, mandatory provisions of law,

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guide lines laid down by the Hon'ble Courts, and hence, the same is one sided, illegal, arbitrary, perverse, partial, biased, and therefore, the same is liable to be set aside.

 The petitioner submits that in view of the above mentioned true facts and circumstances and grounds, the impugned judgment/order requires to be interfered with and is required to be set aside by this Hon'ble Court.

 That, the impugned judgment of conviction has resulted in miscarriage of justice."

14. Sri.Kumbar Vasant Fakeerappa, learned counsel

for the revision petitioner reiterating the grounds urged in

the revision petition, vehemently contended that the

transaction and exact amount due between the

complainant and the accused is not properly established

by the complainant by placing necessary evidence on

record which has resulted in miscarriage of justice and

thus, sought for allowing the revision petition.

15. Per contra, learned counsel for the respondent

supports the impugned judgments.

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16. Having heard the parties in detail, this Court

perused the material on record meticulously and following

points would arise for consideration:

1. Whether the revision petitioner has made out a patent factual error or jurisdictional error in passing the order of conviction and thus, the impugned judgment is suffering from legal infirmity or perversity?

2. Whether sentence is excessive?

3. What order?

REG.POINT No.1:

17. In the case on hand, the transaction of the

complainant with the accused is not in dispute having

regard to the suggestion made to P.W.1 by learned

counsel for the accused that between May 2013 to

December 2013, complainant has rendered the travel

services free of cost.

18. Further, the outstanding amount that is there in

the account of the accused with the complainant is

established by placing statement of account. Admittedly,

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accused is a private limited company represented by

Sri.Pramod Kumar.

19. The oral evidence of D.W.1 and 2 was not

sufficient enough to rebut the presumption available to the

complainant under Section 139 of the Negotiable

Instruments Act.

20. On the contrary, P.W.1 having stepped into the

witness box and produced necessary oral and

documentary evidence on record and cheques which were

signed by D.W.1 formed on behalf of the accused

company, having not been disproved, P.W.1 has rightly

discharged initial burden. Material evidence placed on

record by the accused in the form of oral evidence of

D.W.1 and 2, coupled with the documentary evidence

marked at Exs.D.1 to D.13 was not sufficient enough to

rebut the presumption available to the complainant is the

opinion formed by the learned Trial Magistrate which was

confirmed by the learned Judge in the First Appellate

Court.

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21. Having regard to the scope of the revisional

jurisdiction, this Court cannot revisit into the factual

aspects in holding that the material evidence was not

properly rebutted by the accused.

22. Even assuming for the sake of arguments, the

contentions urged on behalf of the accused is to be

accepted, the question of providing the free service is to

be established by the accused by placing necessary

evidence on record.

23. Such an evidence is not forthcoming on record.

It is highly improbable to accept that for a long period of

May 2013 to December 2013, the complainant would have

given the free service to the accused.

24. Therefore, this Court is of the considered

opinion that recording of the order of conviction by the

learned Trial Magistrate confirmed by the First Appellate

Court needs no interference. Accordingly, point No.1 is

answered in negative.

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REG.POINT No.2:

25. Now coming to the question of sentence, as

against sum of Rs.6,48,554/-, learned Trial Magistrate has

imposed fine in a sum of Rs.10,00,000/-. Transaction is of

the year 2013 and criminal case itself is of the year 2015.

Taking note of the fact that amount is due to the

complainant, imposition of sum of Rs.10,00,000/- is to be

restricted from Rs.9,95,000/- as there was no State

machinery involved and lis is privy to the parties. To that

extent, the sentence needs interference. Accordingly,

point No.2 is answered in partly affirmative.

REG.POINT No.3:

26. In view of the findings of this Court on point

Nos.1 and 2 as above, following:

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ORDER

i. Criminal Revision Petition is allowed in part.

ii. While maintaining the conviction of the accused

for the offence punishable under Section 138 of

the Negotiable Instruments Act, the

compensation amount ordered by the learned

Trial Magistrate confirmed by the First Appellate

Court in a sum of Rs.10,00,000/- is modified to

sum of Rs.9,95,000/- and balance sum of

Rs.5,000/- imposed as fine towards the

defraying expenses of the State is hereby set

aside.

iii. Entire amount of Rs.9,95,000/- is to be paid as

compensation to the complainant.

iv. Time is granted for the accused to pay the

balance amount till 15.11.2024 failing which the

accused No.2 shall undergo simple

imprisonment for a period of six months as

ordered by the learned Trial Magistrate.