w w w . L a w y e r S e r v i c e s . i n



D. Vigneshwara Aithal v/s Krishna Automation & Software Solutions Pvt. Ltd. & Others


Company & Directors' Information:- G A S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC127546

Company & Directors' Information:- B B SOFTWARE LTD [Strike Off] CIN = L30009WB1995PLC072361

Company & Directors' Information:- R I SOLUTIONS PRIVATE LIMITED [Strike Off] CIN = U52392WB1999PTC088640

Company & Directors' Information:- G S AUTOMATION PRIVATE LIMITED [Strike Off] CIN = U52339HP2011PTC031734

Company & Directors' Information:- S M I T SOFTWARE COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL2006PTC144816

    Criminal Appeal Nos. 1049 & 1050 of 2011

    Decided On, 04 January 2021

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE H.P. SANDESH

    For the Appellant: Madhukar Nadig, Advocate. For the Respondent: R1 to R3, M.J. Alva, Nagaraja Hegde, Advocates.



Judgment Text

1. These two appeals are filed against the common judgment of acquittal passed in C.C. Nos. 26155/2005 and 5491/2006 dated 13.6.2011, on the file of XIII Additional Chief Metropolitan Magistrate, Bengaluru.

2. The parties are referred to as per their original rankings before the Trial Court as complainant and accused in order to avoid the confusion and for the convenience of the Court.

3. Heard the learned Counsel appearing for the appellant and learned Counsel appearing for the respondents.

4. The factual matrix of the case is that accused No. 1 is a Company and accused Nos. 2 and 3 are the Directors of accused No. 1-Company. During the month of January 2003, the accused approached the complainant and requested to lend an amount of Rs. 12,00,000/-. The complainant has lent an amount of Rs. 5,00,000/- and also an amount of Rs. 3,00,000/- in total a sum of Rs. 8,00,000/- to the accused and the accused agreed to repay the said amount within six months from the date of borrowing the said amount. But the accused failed to repay the said amount as agreed. On demand being made by the complainant, the accused issued the subject-matter of the cheque dated 20.6.2005 for an amount of Rs. 5,00,000/- and another cheque dated 20.10.2005 for an amount of Rs. 3,00,000/- and when the same were presented for encashment, those cheques returned with an endorsement “payment stopped by the drawer”. Thereafter, legal notices were issued against the accused on 11.7.2005 and 10.11.2005 respectively and those notices were served on the accused, for which the accused gave untenable replies. Hence, without any other alternative, the complainant has filed a separate complaints against the accused. The Trial Judge, after taking cognizance, issued summons against accused Nos. 2 and 3, who represented through their Counsel, but did not plead guilty and claimed trial. Hence, the complainant in order to substantiate the averments of the complaint in respect of both the complaints, examined himself as P.W.1 and got marked the documents Exs.P1 to P18. The accused also examined himself as D.W.1 and got marked documents Exs.D1 and D2.

5. The common evidence has been recorded in respect of both the cases. The statement of the accused was recorded under Section 313 of Cr.P.C. The Trial Judge, after hearing the respective Counsel, acquitted the accused persons and hence, the present appeals are filed before this Court by the complainant.

6. In both the appeals, common grounds are urged contending that the Trial Judge has committed an error in coming to the conclusion that the burden is on the complainant to establish the case against the accused beyond doubt. The Trial Judge failed to draw presumption under Section 139 of Negotiable Instruments Act (for short ‘the N.I. Act’). Admittedly, the cheques bear the signature of the accused. It is the defence of the accused that cheques were lost and in order to substantiate the said defence, the accused has not led any rebuttal evidence. But the Trial Judge has committed an error in coming to the conclusion that there is no resolution passed by the Directors in order to avail the loan in favour of the Company. Mere holding of the cheque is not a ground to convict the accused under Section 138 of the N.I. Act. It is also contended that except cheques, no other documents are produced and also there is no specific averments as contemplated under Section 141 of the N.I. Act.

7. Learned Counsel appearing for the appellant reiterating the grounds urged in the appeal would submit that accused Nos. 2 and 3 approached the complainant seeking hand loan for an amount of Rs. 12,00,000/-. But the complainant was not having sufficient amount of Rs. 12,00,000/- and hence, paid only an amount of Rs. 8,00,000/- to the accused as loan. The complainant is the financier and that accused Nos. 2 and 3 have signed the loan applications in terms of Ex.P15. Notices were served on the accused, for which untenable replies were given. The very contention of the accused is that the cheques were stolen. In support of the said contention, he relied upon Ex.D1 dated 8.1.2004 to substantiate the case of the accused and also filed another private complaint on 23.1.2006 after two years of Ex.D1.

8. In pursuance of the said private complaint, the Police have filed ‘B’ report, which has not been challenged. The cheque has been admitted by the accused and the defence taken by the accused that the same was stolen has not been proved. The cheques also bear the seal of the Company. Even though P.W.1 has produced cogent evidence before the Court, Trial Judge has committed an error in appreciating the same.

9. Learned Counsel would further submit that only in case of a Public Limited Company, the resolution is required to be passed and in case of a Private Limited Company, no such resolution is necessary. The accused failed to adduce any probable evidence and hence, the Trial Judge ought to have drawn presumption under Section 139 of N.I. Act in favour of the complainant. Accused No. 3 is arraigned as accused on the ground that she is a guarantor and accused No. 2 for having signed the cheques.

10. Per contra, learned Counsel appearing for the respondents would submit that the according to the complainant, the loan was availed in the year 2003 and the accused had agreed to repay the same within six months. But the claim of the complainant is that the cheques were issued in the year 2005. There is no explanation as to why there was a delay in making repayment, when he had agreed to repay the same within six months and also that no action has been taken.

11. Learned Counsel would further submit that under Section 269(ss) of the Income Tax Act, more than an amount of Rs. 20,000/- can be paid only through cheque. The accused has set up his defence in the reply notice in terms of Ex.P12. The complaint was given on 8.1.2004. According to the complainant, the cheques were issued in the year 2005. When the complaint was given in the year 2004 itself, the question of issuing the subject-matter of the cheques in the year 2005 does not arise.

12. Learned Counsel would also submit that it is elicited from the mouth of P.W.1 that he has not shown any payment of loan in favour of the accused in his Income Tax Returns. The accused rebutted the evidence of the complainant. There is no consistency in the evidence of the complainant and Ex.P4 as it does not say the year of availing loan. The oral evidence is contrary to the averments of the complaint and Ex.P4. When the accused has rebutted the presumption, the question of drawing the presumption in favour of the complainant does not arise.

13. Learned Counsel for the accused relying upon the judgment of the Apex Court in the case of Shree Daneshwari Traders v. Sanjay Jain, IV (2019) BC 20 (SC)=VII (2019) SLT 443=LAWS (SC) 2019(8) 82 brought to the notice of this Court para Nos. 19 and 20. Referring to these two paragraphs, learned Counsel would submit that when a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over and that to rebut the statutory presumptions, an accused is not expected to prove his defence beyond reasonable doubt as is expected of the Complainant in a criminal trial. The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated.

14. Learned Counsel also relying upon the judgment of this Court dated 7.10.2020 passed in Crl. A. No. 1271/2010, would submit that this Court referring to the judgment of Shree Daneshwari Traders (supra) dismissed the appeal under the similar circumstances, which had been filed against the very same accused.

15. In reply to the arguments of the learned Counsel for the accused, learned Counsel appearing for the complainant would submit that Section 269(ss) of the Income Tax Act is not applicable to the case on hand, as it has been held by the Apex Court in the case of Rangappa v. Sri. Mohan, II (2010) BC 693 (SC)=IV (2010) SLT 56=II (2010) DLT (CRL.) 699 (SC)=II (2010) CCR 433 (SC)=(2010) 11 SCC 441 that though the cheque amount is for a sum of Rs. 40,000/-, the presumption can be drawn.

16. Learned Counsel in support of his contention relying upon the judgment of this Court passed in Crl.A. No. 869/2008 dated 18.8.2010 would submit that similar defence has been taken in the said appeal, which came to be allowed and sentenced the accused for the offence punishable under Section 138 of N.I. Act. Learned Counsel would also submit that being aggrieved by the judgment of this Court, a special leave petition in S.L.P. No. 10660/2010 was filed and the said S.L.P. was dismissed vide order dated 10.1.2011.

17. Having heard the arguments of both the learned Counsel for the complainant and learned Counsel for the accused, the points that would arise for the consideration of this Court are:

1. Whether the Trial Judge has committed an error in acquitting the accused for the offence punishable under Section 138 of the N.I. Act?

2. What Order?

Point Nos. 1 and 2:

18. Before appreciating the oral and documentary evidence of the complainant and the accused, this Court would like to refer to the contents of the complaint. The complainant in para No. 2 of the complaint contended that accused No. 1 is a Company and accused Nos. 2 and 3 are the Directors of accused No. 1 and they are known persons to the complainant. During the month of January, 2003, accused had approached the complainant and requested to lend an amount of Rs. 12,00,000/-. The complaint lent an amount of Rs. 5,00,000/- and Rs. 3,00,000/- to meet the financial requirement for the purpose of business. As the complainant was having good relationship with accused, he paid the amount to the accused on a condition that the same should be repaid within a period of six months from the date of borrowing such amount, for which the accused agreed to repay the same and subsequently, failed to do so. On demand, the accused issued cheques towards repayment of the said amount. When the cheques were presented, they returned with an endorsement “payment stopped by drawer”.

19. The complainant in the oral evidence in the form of affidavit reiterated the averments of complaint and got marked documents Exs.P1 to 14 at the first instance. He was subjected to cross-examination and in the cross-examination, he admits that he is doing finance business in the name and style of Ganapathi Investment at Dr. Rajkumar Road, Rajajinagar, Bengaluru, since 20 years and the said finance is registered under the Karnataka Money Lenders Act. He admits that he has maintained the accounts pertaining to all his transactions and those books of accounts are in his custody and he could produce the same, if required. It is also elicited that the accused have filed complaint before Chamrajpet Police Station against him with regard to cheque in question and the Police have summoned and enquired him. He also admits that, he obtained the stay order from the High Court. The other accused persons in the said PCR are also known to him. The accused persons have executed loan application for having borrowed the loan amount and he could produce the same. It is also elicited that accused No. 1 is the Registered Company under the Companies Act, 1956. He does not know as to whether accused No. 1-Company passed the resolution to borrow loan from him or not. He paid the loan to accused Nos. 2 and 3 and not to the Company.

20. P.W.1 in the further cross-examination admits that he has not obtained any receipt from the accused persons for having paid the loan amount. Witness volunteers that he paid Rs. 8,00,000/- as against Rs. 12,00,000/- to them by way of cash as requested. He says that he has not maintained any accounts for having paid the loan amount to the accused persons. He further admits that in support of his returns, he has maintained the account and he has not shown the present transaction in his Income Tax Returns. He says that he does not remember date of payment of loan amount made to the accused persons. He paid the loan amount to the accused persons in cash by drawing the same from his wife’s SB account without interest. He could produce the documents to that effect. It is also elicited that there was no personal transaction between the accused persons and him about 8 years back. It is elicited that he got filled up the payees name and date in the cheque in question. The accused persons are his distant relative. It is elicited that number of cases are filed against the accused by his relatives and the Police have submitted ‘B’ report on the ground that the alleged stolen cheques which are the subject-matter before the Court and the Court has to give findings on those cheques. In the month of January 2003, he received the cheque involved in this case. He says that he is not aware that the loan of Rs. 20,000/- or more is to be paid by way of cheque only.

21. P.W.1 is also further examined after remanding the matter and filed the additional affidavit, wherein he has stated that the loan of Rs. 12,00,000/- was sanctioned in favour of his wife on 11.4.2002 and after sanction of the loan, his wife withdrew the amount and gave the amount to him for using the same in his business during the year 2002. During the month of December, 2002 and January, 2003, he himself and his wife received the amount and at that time, accused Nos. 2 and 3 have approached and requested to pay the amount. He paid the amount belong to him and his wife. He is the proprietor of Ganapathi Investment and he has produced licence - Ex.P17 in support of the same. He also produced the documents Exs.P15 and P16 and also got marked the documents Exs.P18 and P19. He was subjected to cross-examination.

22. In the cross-examination of P.W.1, it is elicited that Ex.P16 is in respect of making the payment to the accused and he cannot tell as to on what date, the amount has been withdrawn. He does not know why the same was withdrawn and his wife used to draw the money through cheque. He also does not remember how much amount he has received from his wife to pay the money to the accused. He has not kept the entire amount of Rs. 12,00,000/- in his house. He says that on 11.4.2002 an amount of Rs. 3,00,000/- was paid by way of cheque to the accused. He has given only an amount of Rs. 8,00,000/- to the accused and not Rs. 12,00,000/- as sought in the loan application. The loan application does not bear the date. In Ex.P15, there is no any mention as to whether the application was considered or rejected.

23. Accused No. 2 has been examined as D.W.1 and in his affidavit in the form of chief-evidence, he says that he had no transactions with the complainant. Ex.P1 is one of the several cheques, which was lost by the accused No. 1-Company and he had lodged the complaint on 8.1.2004 and given “stop payment” instruction. It is also his evidence that he has given the reply notice in terms of Ex.P12 and P.W.1 has admitted in the cross-examination that he had filled up the cheque-Ex.P1. D.W.1 in his chief stated that several cheque cases have been filed against him and got marked the documents at Exs. D1 and D2. He was subjected to cross-examination.

24. In the cross-examination of D.W.1, he admits that he purchased the house in Hanumanthanagar and for house warming ceremony, he had invited number of relatives. He also admits that in the said house warming ceremony, he had invited the complainant and he had attended. But he claims that he purchased the house from his own funds. It is suggested that he has not started the software company on his own funds and the same is denied. It is elicited that Ex.P1 in this case as well as Ex.P1 in C.C. No. 5491/2006 has been issued by him and the signatures appearing in the said cheques belong to him. He also admits that the contents of the said cheques have been written by him. It is suggested that he has borrowed the loan from the complainant and to discharge the said loan, he has issued the said cheques and the same has been denied. It is elicited that he has filed criminal petition before this Court seeking to quash cases filed at Bengaluru, Haveri and Kundapura. The said criminal case came to be dismissed.

25. In the further cross-examination of D.W.1, he admits that he had stopped the business 6 years ago. In order to start the first accused-Company, he had invested the amount of Rs. 5,00,000/- and the same is shown in the balance sheet. It is suggested that in order to develop the company, he had availed the loan of Rs. 5,00,000/- and Rs. 3,00,000/- and given the cheques and the same is denied. It is suggested that he has given false complaint that cheques were stolen and the said suggestion is denied. However, he admits that Police have filed ‘B’ report. He also admits that an ordinary prudent man would not sign and keep the cheque. But he says that he kept the said cheque ready to give the same to the suppliers.

26. Having perused the oral evidence and also the documentary evidence, the case of the complainant is that he had lent an amount of Rs. 5,00,000/- and Rs. 3,00,000/- to the accused and the accused in discharge of the said loan amount had issued the subject-matter of the cheques, which are marked as Ex.P1 in both the cases. The other documents are legal notices, postal receipts and postal acknowledgements and also the reply notices. The complainant also relied upon Ex.P15 - the loan application signed by accused No. 2 and accused No. 3 has signed as a guarantor. On perusal of Ex.P15, it is mentioned that he was in need of an amount of Rs. 12,00,000/-. The complainant also produced the document - Ex.P16 for having withdrawn the amount of Rs. 3,00,000/- from the account of his wife on 11.4.2002. This account extract also discloses that the loan amount of Rs. 12,00,000 was sanctioned in favour of the wife of accused on the very same day. It is important to note that the complainant also produced Ex.P17 - money lenders licence.

27. It is also pertinent to note that in the cross-examination of P.W.1, he categorically admits that he has maintained the account pertaining to his transactions and those books of accounts are in his custody and he could produce the same, if required. It is also emerged in the evidence of both P.W.1 and D.W.1 that complaint is given in terms of Ex.D1. P.W.1 also admits that in pursuance of the said complaint, he was called upon and enquired by the Police. This complaint is dated 8.1.2004 and in the complaint, it is mentioned that he lost some bundle of papers containing personal and official documents and some cheques and to inform him on the said address, if they find any of those documents. The accused also filed PCR on 23.1.2006 against the complainant. Accused No. 2 and other relatives of the accused are arraigned as accused persons and in the said complaint, it is mentioned that certain signed cheques are missing and that immediately, he had given stop payment instruction to the Bank and also the same was informed to the jurisdictional Police. The Police have not taken any action. In the result, accused issued notice to the complainant and started blackmailing the complainant. Accused Nos. 1 and 2 in the said complaint are brothers and the other accused persons are totally strangers to the complainant. The total claim made by the accused is to the tune of Rs. 38,00,000/-. The Company has not received any amount from the accused and they are making the false claim. It has to be noted that though this complaint is dated 9.11.2005, the same was presented on 23.1.2006 almost after lapse of 2 years of giving the letter to the Police Station vide Ex.D1, which is dated 8.1.2004.

28. It is also important to note that notices were exchanged between the complainant and the accused in terms of Ex.P4 on 11.7.2005 and in terms of Ex.P8 on 10.11.2005 in other case and reply was given in terms of Ex.P12 in both the cases. Hence, it is clear that the complaint was given after receipt of notice. There is no any explanation on the part of the accused as to why he kept quite for a period of more than 2 years even after coming to know that the cheques are lost. Since the complaint was given on 8.1.2004. It is also pertinent to note that D.W.1 in the cross-examination categorically admits the signature available in Ex.P1 in both the cases. It is further elicited that the same has been issued by him and the signatures appearing in the said cheques belong to him. He further admits that the contents of the said cheques have been written by him. It is also important to note that he categorically admits that an ordinary prudent man would not keep the cheques signed with him. No doubt, he denies the suggestion that he borrowed the loan and issued the subject-matter of the cheques. It is also admitted by him that after filing the private complaint against the complainant and the other accused persons, the Police have filed the ‘B’ report. No doubt, P.W.1 also admits in the cross-examination that he has maintained the accounts pertaining to his transactions, but he has not produced the same before the Court.

29. It is also important to note that D.W.1 also in the evidence has categorically admitted that he started his business by investing an amount of Rs. 5,00,000/- and he has maintained the balance sheet and he could produced the same. But he has not produced the same before the Court. It is the suggested in the cross-examination that he spent an amount of more than a crore for the said business. It is also important to note that Ex.P15 discloses that he gave the loan application to the complainant Ganapathi Investment and he also signed the said loan application. Though the learned Counsel appearing for the accused disputes that the said loan application is not given but has not denied the signature on the said loan application. Nothing has been suggested to P.W.1 that no such loan application was given to the complainant. There is no explanation on the part of the accused with regard to the document Ex.P15. No doubt, the said loan application does not bear his signature and it has been admitted by P.W.1. The accused has to explain as to when he was not in need of loan amount, why the said loan application has been submitted by him.

30. It is also the case of the accused that he lost the cheques and on perusal of Ex.D1, no where it is mentioned as to where he lost those cheques. Ex.D1 clearly depicts that he lost bundles of papers and some cheques and asked them to inform him if those papers and cheques are found. It has not been specifically stated by the accused as to when he lost the cheques and how it had gone to the custody of the complainant. He also not denied the fact that he started the business in the year 2001-2002. He further admits that he purchased the house at Hanumanthnagar and also invited the complainant to the house warming ceremony of his house. In the letter dated 8.1.2004, which the accused claims that the same is complaint, nothing is forthcoming against this complainant and there is also no explanation as to why private complaint was filed on 23.1.2006 that too almost after two years of Ex.D1.

31. I have already pointed out that notices were exchanged between the complainant and the accused before filing private complaint. It is also important to note that it is the claim of the complainant that his wife had availed loan of Rs. 12,00,000/- and out of Rs. 12,00,000/-, he had taken an amount of Rs. 3,00,000/- from the account of his wife and given the same to the accused. In order to substantiate the same, the complainant also produced the document Ex.P16 - Bank extract and the same discloses that an amount of Rs. 3,00,000/- was drawn on 11.4.2002. It is the claim of the complainant that loan amount was advanced in the month of January, 2003 and the accused issued the subject-matter of the cheques in discharge of the liability.

32. Having perused the unreported judgment of this Court in Crl. A. No. 869/2008, this Court considered the principles laid down in the judgments in Rangappa v. Mohan (supra); Kumar Exports v. Sharma Carpets, I (2009) BC 392 (SC)=IX (2008) SLT 674=I (2009) CCR 100 (SC) and so also Krishna Janardhan Bhat v. Dattatraya G. Hegde, II (2008) BC 44 (SC)=I (2008) SLT 593=I (2008) DLT (CRL.) 449 (SC)=I (2008) CCR 199 (SC), wherein an observation has been made with regard to drawing of presumption. Learned Counsel also relied upon the order passed in S.L.P. filed by the accused against the said order, which came to be dismissed.

33. Per contra, learned Counsel appearing for the respondent/accused relied upon the judgment of Shree Daneshwari Traders (supra) and vehemently brought to the notice of this Court para Nos. 19 and 20 with regard to the presumptions, wherein it is observed that the accused may also rely upon the presumptions of fact, for instance, those mentioned in Section 114 of the Indian Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the N.I. Act.

34. There is no dispute with regard to the presumption is concerned and the same is also a rebuttable presumption. This Court also in Crl. A. No. 1271/2010 taken note of the principles laid down in the judgment of the Apex Court in Shree Daneshwari Traders (supra) and acquitted the accused.

35. Having relied upon the principles laid down in the judgments referred supra, it is settled law that once the cheque is admitted and there is no dispute with regard to the signature and so also notice was issued, the Court has to draw mandatory presumption under Section 139 of the N.I. Act. No doubt, in the case on hand, the accused has given reply denying the issuance of the cheque. But in the cross-examination of D.W.1, he categorically admits that he issued the cheques and the contents of Ex.P1 cheques in both the cases are also written by him. It has to be noted that P.W.1 in the cross-examination admits that he filled up the contents of Ex.P1. It is also important to note that D.W.1 categorically admits that no ordinary prudent man would sign the cheque and keep it with him. It is the case of the accused that he lost bunch of papers and cheques and there is no any explanation as to why he singed the bunch of cheques and kept with him. It is also important to note that he relied upon Ex.D1, which does not specify the cheques that he lost. It appears that after the issuance of the cheques, he gave the letter to the Police, which is not the complaint. He had only requested the Police to inform him, if they find the documents and the cheques, which he had lost and to hand over.

36. The very contention of the accused is that they lost the cheque and there is no explanation as to where he lost the cheque. D.W.1 admitted that several cases are filed against him. Merely because he gave the letter to the Police in terms of Ex.D1, the Court cannot come to the conclusion that he lost the cheques and the onus is on the accused to rebut the case of the complainant by adducing the evidence on preponderance of probabilities, which has not been done. The Trial Judge has committed an error in coming to the conclusion that no resolution is passed by the Directors. I have already pointed out that Ex.P15 is the letter signed by accused Nos. 2 and 3 and that the same is not in the name of the Company and the fact that they are the Directors of the said Company is not in dispute. The Trial Judge has also committed an error in coming to the conclusion that no resolution has been passed. It is the specific case of the complainant that he advanced the loan amount in favour of accused Nos. 2 and 3, who are the Directors of the Company and the same has not been appreciated by the Trial Judge properly. The further contention is that the Trial Judge has erred in assigning the reason that the holding of the cheque itself is not a ground to draw the presumption. The accused has to rebut the evidence of the complainant as to how the cheque had gone into the hands of the complainant, but the same has not been done except relying upon Ex.D1 and Ex.D2.

37. This Court already pointed out that Ex.D2 came into existence after the issuance of the legal notice. The other observation made by the Trial Judge that except the cheques, no other documents are produced. P.W.1 has categorically stated that while advancing the loan, he has not collected any documents and also says they are distant relatives. When such being the case, the Court cannot also expect any other documents at the instance of the complainant. The other reasoning given by the Trial Court is that there is no specific averment in the complaint with regard to accused Nos. 1 and 2 discharging the duties as Directors and on perusal of the Complaint, the complainant in para No. 2 specifically mentioned that accused No. 1 is a Company, accused Nos. 2 and 3 are the Directors of accused No. 1 and they are the known persons to the complainant. When such pleadings has been made in the complaint and that the accused persons have approached the complainant to borrow the loan amount, it cannot be contended that Section 141 has not been pleaded. On perusal of para Nos. 6 and 8 of the complaint, it is specifically mentioned that as on the date of borrowing the loan amount and issuing of the cheques, accused Nos. 2 and 3 were in charge a

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nd responsible for the conduct of the business of the Company and they are responsible for all financial transactions of the Company. Hence, they are liable to be prosecuted under Section 138 of the N.I. Act. When a specific pleading has been made in para Nos. 6 and 8 of the complaint that these accused persons were looking after the affairs of the company, the Trial Court ought not to have come to the conclusion that Section 141 of the N.I. Act has not been complied. The cheque is also issued on behalf of the company. 38. It is also important to note that the Trial Judge failed to take note of the ‘B’ report filed by the Police against the complaint-Ex.D2 and the very theory of the cheques having been stolen has not been proved by leading any probable evidence before the Trial Court. The cheque - Ex.P1 also bears the common seal of the Company. When such being the case, the Trial Judge ought not to have come to the conclusion that accused has rebutted the case of the complainant relying upon the documents Ex.D1 and Ex.D2. This Court has pointed out that under what circumstances Exs.D1 and D2 came into existence and the theory of cheques having been stolen has not been proved. Hence, the Trial Court has committed an error in acquitting the accused instead of considering the material available on record. The very conclusion of the Trial Court that the accused has rebutted the case of the complainant is perverse as the Trial Judge has not considered the admission elicited from the mouth of D.W.1 with regard to the issuance of the cheques and the signature on the said cheques and so also that an ordinary prudent man would not sign and keep the cheque with him. He claims that not only the complaint on the cheques Ex.P1 and Ex.P2 has been filed, but also several other complaints have been filed. But there is no explanation to the effect that if he has not issued the said cheques, why he had signed and kept the bunch of cheques. Under the circumstances, it requires interference of this Court. 39. In view of the discussion made above, I pass the following: ORDER (i) The appeals are allowed. (ii) The impugned judgment of acquittal passed in C.C. Nos. 26155/2005 and 5491/2006 dated 13.6.2011, on the file of XIII Additional Chief Metropolitan Magistrate, Bengaluru, is hereby set aside. (iii) The accused Nos. 1 to 3 are convicted for the offence punishable under Section 138 of the NI Act. (iv) In Crl. A. No. 1049/2011, accused Nos. 2 and 3 are directed to pay the fine amount of Rs. 3,50,000/- to the complainant within eight weeks from today and in default of the payment of the fine amount, the accused Nos. 2 and 3 shall undergo simple imprisonment for a period of one year. (v) In Crl. A. No. 1050/2011, accused Nos. 2 and 3 are directed to pay the fine amount of Rs. 5,50,000/- to the complainant within eight weeks from today and in default of the payment of the fine amount, the accused Nos. 2 and 3 shall undergo simple imprisonment for a period of one year. (vi) The Trial Court is directed to secure the accused persons in both the cases, if they fail to pay the fine amount and subject them to serve the sentence. (vii) The Registry is directed to transmit the Trial Court records to the Trial Court, forthwith.
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