Dismissed

M/S. Crystal Computers v. M/S. Caps Computers India Private Limited

Karnataka HC4 Dec 2023CRL.RP/160/2016

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a criminal revision petition under Sections 397 and 401 Cr.P.C. The court held that lower courts correctly convicted the petitioner-accused for cheque dishonour under Section 138 NI Act, upholding the presumption of consideration and valid debt.

What did the court decide?

Revision petition dismissed; conviction and sentence under Section 138 NI Act confirmed and stand affirmed.

M/S. Crystal Computers Vs M/S. Caps Computers India… — Cheque Dishonour | Karnataka HC (2023)

¶1

¶2

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶3

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶4

DATED THIS THE 4^TH DAY OF DECEMBER, 2023

¶5

BEFORE

¶6

THE HON'BLE MR JUSTICE VENKATESH NAIK T CRIMINAL REVISION PETITION NO.160 OF 2016

¶7

BETWEEN:

¶8

M/S. CRYSTAL COMPUTERS NO.668/A, 17TH 'C' MAIN KORAMANGALA CLUB ROAD 6TH BLOCK, KORAMANGALA BENGALURU-560 095 REPRESENTED BY SMT. SHASHI PRABHA G.N.

¶9

SMT. SHASHI PRABHA G.N. W/O. VIJAYA KALOSE K. PROPRIETRIX OF CRYSTAL COMPUTERS AGED ABOUT 30 YEARS NO.668/A, 17TH 'C' MAIN KORAMANGALA CLUB ROAD 6TH BLOCK, KORAMANGALA BENGALURU-560 095.

¶10

…PETITIONERS

¶11

Digitally signed by VINUTHA M Location: HIGH COURT OF KARNATAKA

¶12

(BY SMT. VEENA BHAT, ADVOCATE)

¶13

AND:

¶14

M/S. CAPS COMPUTERS INDIA PRIVATE LIMITED HAVING ITS OFFICE AT NO.23/8 "CHRISTHA KRUA", 1ST FLOOR 1ST CROSS, CSI COMPOUND LALBAGH ROAD BENGALURU-560 027 REPRESENTED BY ITS AUTHORISED PERSON SRI VINOD RAJAN.

¶15

…RESPONDENT

¶16

(BY SRI GANESH BHAT Y.H., ADVOCATE)

¶17

¶18

¶19

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶20

THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 READ WITH SECTION 401 OF THE CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT OF CONVICTION AND ORDER ON SENTENCE DATED 7-11-2014 PASSED BY THE XLII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU, IN C.C. NO.14818/2012 AND CONFIRMED BY THE LXVI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, IN CRL.A. NO.1339/2014 DATED 4-12-2015.

¶21

THIS CRIMINAL REVISION PETITION IS COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

¶22

O R D E R

¶23

Heard Smt. Veena Bhat, learned counsel for the petitioners-accused Nos.1 and 2,

¶24

Sri Ganesh Bhat Y.H., learned counsel for the respondentcomplainant.

¶25

The petitioners have filed this revision petition

¶26

under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973 (for short, 'Cr.P.C.') praying to set aside the judgment of conviction and order on sentence dated 7-11-2014 passed by the XLII Additional Chief Metropolitan Magistrate, Bengaluru, in Criminal Case No.14818 of 2012 and confirmed by the LXVI Additional

¶27

¶28

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶29

City Civil and Sessions Judge, Bengaluru, in Criminal Appeal No.1339 of 2014 dated 4-12-2015.

¶30

For the sake of convenience, the parties are referred to as per their ranking before the trial Court. The petitioners are accused Nos.1 and 2 and the respondent is the complainant.

¶31

The brief facts of the complainant is that accused

¶32

No.1 is the Company carrying on business in sales and service of laptops, desktops and accessories. Accused Nos.2 and 3 being responsible for conduct of business of accused No.1 have placed order No.004 dated 7-1-2011 through telephone for supply of various computer related peripherals promising and undertaking to make prompt payment of the sale value within twenty-one days of supply. As per the said order, the complainant supplied

¶33

the products on credit basis, subject to the term that in case of delay in making payment of sale value within the

¶34

stipulated time, interest at 24% per annum will be charged. The accused have taken delivery, but failed to

¶35

¶36

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶37

make payment. After repeated demands, the accused have issued cheque bearing No.302392 dated 5-8-2011 for a sum of Rs.1,27,150/-, cheque bearing No.302403 dated 25-8-2011 for a sum of Rs.43,722/- and cheque bearing No.392379 dated 22-12-2011 for a sum of Rs.70,193/- drawn on Oriental Bank of Commerce, Koramangala Branch, Bengaluru, in favour of the complainant, but the said cheques when presented for realisation returned with shara 'exceeds arrangement'. In spite of issuance of legal notice, the accused failed to pay

¶38

the amount. Hence, the complainant filed a private complaint under Section 200 of the Cr.P.C. for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'N.I. Act').

¶39

Soon after registration of the complaint, the

¶40

Magistrate took cognizance of the offence and recorded the sworn statement of the complainant. In order to prove the case, the complainant examined its authorised person, Sri Vinod Rajan as PW.1 and got marked twenty-one

¶41

¶42

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶43

documents as per Exs.P1 to P21. Thereafter, the Magistrate recorded the statement of the accused persons under Section 313 of the Cr.P.C. The accused persons denied all the incriminating material against them and they have not led any defence evidence.

¶44

Based on oral and documentary evidence on record, the trial Court convicted accused Nos.1 and 2 for the offence punishable under Section 138 of the N.I. Act and acquitted accused No.3 of the offence. Accused No.2 was sentenced to pay a fine of Rs.3,00,000/- and in default of payment of fine, to undergo simple imprisonment for a period of two months.

¶45

Aggrieved by the judgment of conviction and order on sentence passed by the trial Court, accused Nos.1 and 2 preferred appeal. However, the First Appellate Court also confirmed the judgment passed by the trial Court. Hence, this revision petition.

¶46

¶47

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶48

Learned counsel for the petitioners-accused Nos.1 and 2 has contended that the judgments passed by the trial Court as well as the First Appellate Court are not in accordance with law; the complainant has failed to prove the requirements of Section 138 of the N.I. Act as the accused discharged the entire amount in favour of the complainant; the cheques were not issued for legal enforceable debt; the trial Court as well as the First Appellate Court did not consider its perspective manner, but convicted accused No.2 for the offence punishable under Section 138 of the N.I. Act. On all these grounds, she prays to allow the revision petition.

¶49

Learned counsel for the respondent-complainant has contended that the both the Courts below have given concurrent findings that the respondent has proved the requirements of Section 138 of the N.I. Act and has proved its case beyond reasonable doubt. He further contended that if the accused discharged the liability in question, they would have produced the documents before

¶50

¶51

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶52

the trial Court as well as the First Appellate Court and now, they cannot rely upon the statement of accounts, which would become self-serve statement. Hence, he prays to dismiss the revision petition.

¶53

Admittedly, the complainant filed a private

¶54

complaint under Section 200 of the Cr.P.C. against accused Nos.1 to 3 for the offence punishable under Section 138 of the N.I. Act. In order to establish its claim, the complainant examined its authorised person, Sri Vinod Rajan as PW.1 and in support of his oral testimony, he relied upon Ex.P1-Board Resolution of the Company, Ex.P2-Purchase Order dated 7-1-2011, Exs.P3 to P10eight invoices for having supplied the computer accessories, Exs.P11 to P13-three cheques, Exs.P14 to P16-Bank endorsements, Ex.P17-copy of legal notice and Exs.P18 to P20 are the postal acknowledgments for having served the legal notice to the accused persons. To rebut the claim, none of the accused persons entered the witness box and produced the documents.

¶55

8 - NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶56

On perusal of the oral testimony of PW.1 and documentary evidence as per Exs.P1 to 20, it establishes that the complainant supplied the computer related accessories to accused Nos.1 to 3 as per Exs.P3 to 10invoices. Accordingly, accused Nos.1 to 3 issued three cheques as per Exs.P11 to P13, i.e. cheque bearing No.302392 dated 5-8-2011 for a sum of Rs.1,27,150/-, cheque bearing No.302403 dated 25-8-2011 for a sum of Rs.43,722/and cheque bearing No.392379 22-12-2011 for a sum of Rs.70,193/- drawn on Oriental Bank of Commerce, Koramangala Branch, Bengaluru, in favour of the complainant and signature of accused No.2 is also mentioned in those cheques which are marked as Exs.P11(a) to P13(a). On being presentation to the Bank, the same were returned with shara 'exceeds arrangements'. In spite of issuance of legal notice as per Ex.P17, accused Nos.1 and 2 failed to repay the amount due under Exs.P11 to P13. Bank endorsements are marked at Exs.P14 to P16. From the above, it clearly establishes

¶57

¶58

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶59

that accused Nos.1 and 2 have not disputed the issuance of cheques and service of legal notice upon them. The transactions between the complainant and accused Nos.1 to 3 is not disputed by accused Nos.1 to 3. As per the presumption available under Section 118 of the N.I. Act, the complainant has proved the requirements under Section 138 of the N.I. Act.

¶60

Now the burden shifts upon the accused persons to disprove the case of the complainant.

¶61

On perusal of the evidence on record, the accused has taken up the contention that the cheques were issued in the year 2011, the complainant has misused it and there is material altercation as to Exs.P11 to P13-cheques. In order to substantiate this contention, the accused persons have not placed any document to show that they discharged the entire amount to the complainant. Therefore, the complainant proved that on the relevant date, it supplied computer related accessories to accused Nos.1 to 3 and in consideration thereof,

¶62

10 -

¶63

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶64

accused No.2 issued three cheques in favour of the complainant.

¶65

Learned counsel for the petitioners-accused Nos.1 and 2 has contended that Exs.P11 to P13-cheques were issued as a security/collateral transactions. However, accused Nos.1 and 2 have not placed any material before the Court to prove that under what circumstances three cheques were issued in favour of the complainant.

¶66

In the absence of such action against the complainant, it deems that, accused No.2 issued the cheques in question in favour of the complainant towards discharge of legally recoverable debt. Further, if the cheques were issued for security in relation to other transactions, it should be construed as the same were issued towards legally enforceable debt or liability. There is a presumption that, negotiable instruments is supported by consideration, and the cheques issued are in connection with discharge of liability.

¶67

11 -

¶68

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶69

Accused No.2 has clearly admitted her signature on Exs.P11 to P13-cheques and her signature on the cheques are marked at Exs.P11(a) to P13(a). When one person signs and delivers to another a negotiable instrument, either it is wholly blank or having written thereon an incomplete negotiable instrument, she thereby gives prima-facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp, the person so signing shall be liable upon such instrument under Section 20 of the N.I. Act. Therefore, the holder of the cheques by invoking Section 20 of the N.I. Act, filled up the cheques and presented for encashment. Hence, the trial Court as well as the First Appellate Court have drawn presumption under Section 118 of the N.I. Act, so as to consideration, as to date, as to time of acceptance, as to time of transfer and as to order of endorsements, as to stamps and that holder is a holder in due course.

¶70

12 -

¶71

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶72

Now, the burden lies on the accused persons to prove non-existence of consideration which would lead the Court to believe non-existence of consideration either by direct evidence or by probable to show that the existence of consideration was improbable, doubtful or illegal. But, the accused persons have not produced any kind of evidence to show that existence of consideration was improbable, doubtful or illegal. Therefore, the trial Court as well as the First Appellate Court have drawn presumption that the cheques were issued for legally enforceable debt, until contrary is established.

¶73

In the instant case, the trial Court as well as the First Appellate Court, considering the oral and documentary evidence on record and the peculiar facts and circumstances of the case, have convicted accused No.2 for the offence punishable under Section 138 of the N.I. Act. In the case of VIJAY MOHAN SINGH V. STATE

¶74

OF KARNATAKA reported in (2019) 5 SCC 436, the Hon’ble Supreme Court held that, if the complainant

¶75

13 -

¶76

NC: 2023:KHC:43662 CRL.RP No. 160 of 2016

¶77

proves the material on clinching aspect on the peculiar circumstances of the case, then the conviction under Section 138 of N.I. Act can be sustained.

¶78

Looking into any angle, the judgments of the trial Court as well as the First Appellate Court are in accordance with law. The trial Court and the First Appellate Court have passed well reasoned orders. Hence, no interference is called for and there is no error on the face of the record. Accordingly, the revision petition filed by the petitioners-accused Nos.1 and 2 is dismissed .

¶79

Sd/JUDGE

¶80

KVK List No.: 1 Sl No.: 16

M/S. Crystal Computers v. M/S. Caps Computers India Private Limited

Case brief

What is this about?

What did the court decide?

M/S. Crystal Computers v. M/S. Caps Computers India Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

State of Karnataka Vs Sri Sampath @ Santhosh

S Mastan Vs State of Karnataka

State of Karnataka Vs Murali Bolar

Muddumadaiah Vs B Jyothi

Smt. Parvathamma Vs the State of Karnataka

Shri B v Venkatesh Vs the Lokayukta Police Wing