Allowed

M/S Lumen Industries v. M/S Emmvee Solar Systems (P) Ltd.

Karnataka HC11 Oct 2023CRL.P/1415/2020

Case brief

AI extract

What is this about?

The High Court allowed the criminal petition quashing an order rejecting an application to summon documents. The court held the trial court erred in recording a statement under Section 313 CrPC without an order for summary trial and directed the summons of specific books of account and agreements.

What did the court decide?

The impugned order rejecting the application to summon documents is set aside; complainant directed to furnish specified audited books of account, invoices, subsidy statements, and commission agreemen

M/S Lumen Industries Vs M/S Emmvee Solar Systems (P) Ltd. — Cheque Dishonour | Karnataka HC (2023)

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NC: 2023:KHC:37606 CRL.P No. 1415 of 2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 11^TH DAY OF OCTOBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ CRIMINAL PETITION NO. 1415 OF 2020

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BETWEEN:

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M/S LUMEN INDUSTRIES NO.12.15, GOWDOWN, NO.1, 1^ST AVENUE BUSINESS PARK, OPP. FIRE STATION, DUGHADI CHOWK, KALYAN WEST DISTRICT, THANE-421 301 REP. BY ITS PARTNER AJITH MATHEW S/O M.M.MATHI, AGED 48 YEARS

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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SRI. AJITH MATHEW S/O M.M. MATHI, AGED ABOUT 48 YEARS, NO.12.15, GOWDOWN, NO.1, 1^ST AVENUE BUSINESS PARK, OPP. FIRE STATION, DUGHADI CHOWK, KALYAN WEST DISTRICT, THANE-421 301

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(BY SRI. CHANDRASHEKARA K., ADVOCATE)

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AND:

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…PETITIONERS

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M/S EMMVEE SOLAR SYSTEMS (P) LTD., OFFICE AT NO.55, 6^TH MAIN ROAD, 11^TH CROSS, LAKSHMIAH BLOCK, GANGANAGAR, BENGALURU-560024, DULY REPRESENTED BY ITS DEPUTY MANAGER RECOVERY SRI. NAVEEN RAFUGAR, S/O SRINIVASA RAFUGAR, AGED ABOUT 30 YEARS …RESPONDENT

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(BY SRI. K.N.HARISH BABU, ADVOCATE)

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THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ORDER DATED 21.01.2020 PASSED BY THE XXVII A.C.M.M., AT BENGALURU IN C.C.NO.9692/2016 AND ALLOW THE APPLICATION FILED BY THE PETITIONER.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioners/accused have challenged an order dated 21.01.2020 passed by the XXVII Additional Chief Metropolitan Magistrate, Bengaluru (henceforth referred to as 'Trial Court') in C.C.No.9692/2016 by which, an application filed by the accused/petitioners under Section 91 read with Section 243(2) of Cr.P.C. was rejected.

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The respondent/complainant initiated prosecution of the petitioners for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (henceforth referred to as 'Trial Court'). The accused pleaded not guilty and therefore, the case was set down for trial. The substance of the dispute was that the cheque was issued by the accused towards supply of solar equipments. The defence of the accused was that the cheque was given as security and that the respondent had

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agreed to pay commission on the solar equipments sold. He also claimed that subsidy allowed by the Government of India was not passed on to the customers. At the trial, the respondent examined one of its officials as PW.1. In the course of his cross-examination, PW.1 admitted an e-mail addressed

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to the accused No.2 which was marked as Exs.D1 and D2. He also admitted that the accused had addressed a letter dated 31.03.2011 demanding commission for the sales of solar water heaters amounting to a sum of Rs.1,18,800/-. He also admitted that there was an agreement relating to payment of commission to the accused for sales of solar water heater. PW.1 admitted that the total invoice against the accused was a sum of Rs.33,22,632/-. When a suggestion was put to PW.1 as to the amount of subsidy that had to be released as per the policy of the Government of India, this witness was unable to disclose the same. He also admitted that there was separate account maintained for the subsidy amount payable in respect of each sales. Following the admission in evidence of PW.1, the accused filed an application under Section 91 read with Section 243(2) of Cr.P.C. to summon the following documents:-

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1) Books of accounts

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2) Income tax returns

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3) Balance Sheets

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4) Audited Balance Sheet from 2008 to 2015

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5) Receivable and Payable book

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6) Invoices and subsidy statements accounts

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7) Sundry credit and sundry debt register

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8) Inward and outward register

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9) Agreements (as per PW.1 deposed in the Evidence) 10) Minutes of Meeting dated 08.06.2012

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11) Subsidiary Scheme benefits Statements pertaining to the Accused No.1.

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This application was opposed by the complainant who contended that the documents sought for by the accused was in no way related to the cheque in question and that the said documents were not required for deciding the case. It was also contended that the accused did not justify with proper reason to summon the document from the custody of the complainant. It also claimed that the accused had not disclosed the purpose for which the documents were necessary. It also claimed that the accused were asking colossal documents without disclosing their necessity.

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Based on these contentions, the Trial Court held

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that the accused had admitted the transaction between them

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and the complainant. It also held that the accused did not deny the receipt of the solar water heaters from the complainant. In his statement under Section 313 of Cr.P.C., the accused had admitted the receipt of solar water heater systems from the complainant and that payments were made to the complainant. Therefore, the Trial Court held that there was no dispute regarding the receipt of the Solar Water Heaters from the complainant and it was upon the accused to establish that the cheque in question was not issued against the supplies made. Consequently, the Trial Court rejected application in terms of the order dated 21.01.2020.

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Being aggrieved by the said order, the accused are before this Court.

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The learned counsel for the petitioners/accused submits that the arrangement between the accused and the complainant was that the complainant would supply the Solar Water Heaters to the accused and pass on the subsidy allowable on such supplies as per the policy of Government of India. The subsidy was to be passed on to the respective customers who got the Solar Water Heaters installed. Apart

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from this, the accused were entitled to commission on the sales brought about by them. Therefore, as admitted by PW.1 in the course of his cross-examination that there are documents to indicate the amount of subsidy payable and also there was an agreement between the accused and the complainant relating to the payment of commission. He contended that the Trial Court must have applied its mind to the request of the accused to summon the document. The Trial Court must have considered the application in the light of the admission made by PW.1 in the course of cross-examination and also having regard to the defence of the accused.

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Per contra, the learned counsel for the complainant/respondent contended that there was no agreement entered into between the parties regarding payment of commission. He contended that the proceedings were summary in nature and there was no jurisdiction in summoning such voluminous documents.

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I have considered the submissions made by the learned counsel for the petitioner and the learned counsel for the respondent.

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It is not in dispute that PW.1 admitted the issuance of Ex.P1. It is also not in dispute that PW.1 had admitted the existence of an agreement between the petitioner and the respondent regarding payment of commission on sale. He also admitted about certain subsidy payable on sales. The accused was therefore entitled to summon the concerned documents in exercise of their right under Section 63 of the Indian Evidence Act, 1872. Be that as it may, though the accused had summoned a whole set of documents, having regard to the evidence of PW.1, the only documents that may be relevant are the audited balance sheet from the year 2008 to 2015, invoices and subsidy statements account, the agreement under which the accused were appointed as a commission agents and the books of accounts of the complainant for the period from 2008 to 2015. These documents would sufficiently aid the accused to establish their defence and also to shift the onus to the complainant to establish the transaction leading up to the issuance of cheque in question.

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At the closing of the case, the learned counsel for the accused submitted that the Trial Court has committed an error in recording the statement under Section 313 of Cr.P.C.

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without trying it as a summary case under Section 143 of N.I. Act. He relied upon the judgment of the Hon'ble Apex Court In

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Re: Expeditious Trial of Cases under Section 138 of Negotiable Instruments Act, 1881 [(2021) SC Online SC 325] and submitted that the Court is not entitled to record a statement under Section 313 of Cr.P.C. unless an order under Section 143 of N.I. Act is passed.

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As rightly contended by the learned counsel for the accused, the Court could not have recorded the statement under Section 313 of Cr.P.C. having regard to the fact that the Trial Court has not felt it undesirable to try the case summarily and to try the case as the summons case. Therefore, unless the Trial Court passed an order to that effect, the provisions of Chapter XXIV of Cr.P.C. would not kick in. Therefore, the Trial Court is directed to henceforth not record the statement of the accused under Section 313 of Cr.P.C. unless a corresponding order under Section 143 of the Negotiable Instruments Act, 1881 is passed.

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In that view of the matter, this petition is allowed

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in part. The order dated 21.01.2020 passed by the XXVII

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Additional Chief Metropolitan Magistrate, Bengaluru in C.C.No.9692/2016 rejecting the application filed by the petitioners/accused under Section 91 read with Section 243(2) of Cr.P.C. is set aside. The respondent/complainant is directed

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to furnish the following documents:-

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