Bangalore District Court
M/S.Karnataka Slum Dwellers vs M/S.Durga Steels Now Changed As on 27 April, 2016
BEFORE THE MOTOR ACCIDENT CLAIMS TRIBUNAL
Court of Small Causes, Bengaluru, SCCH-3
DATED THIS THE 27TH APRIL 2016
PRESENT:
Smt.GOMATI RAGHAVENDRA
LL.M, D.I.P.R, D.C.L
VII Addl. Judge & XXXII ACMM,
Court of Small Causes, Bengaluru.
C.C.No.26240 OF 2011
Complainant: M/s.Karnataka Slum Dwellers
Development Multipurpose Co-
operative Society Ltd., represented
By its secretary Smt.Nalini Raju,
Office At No.903, 6th Block,
Kormangala Bengaluru-560 095.
(By Sri.N.G., Advocate)
-Vs-
Accused: 1. M/s.Durga Steels Now changed as,
M/s.Bharath Steel Corporation
S.No.63, (10/1, old khatha No.64,
New No.131), Represented by its
Proprietor Mrs.A.Begum,
Daughter of Late Amanulla Khan,
Doing business at Chokkanahalli,
Village, Hegde Nagar Main Road
Near Sophia College, Bengaluru-560
064, Aged about 34 years,
Residing at No.7-21/5, 3rd Cross,
Lingarajpuram Bengaluru-560 084.
2. Mrs.A.Begum,
Daughter of Late Amanulla Khan,
SCCH-3 2 CC NO.26240/2011
Doing business at Chokkanahalli
Village, Hegde Nagar Main Road,
Near Sophia College,
Bengaluru-560 064,
Aged about 34 years,
Residing at No.7-21/5, 3rd Cross,
Lingarajpuram,
Bengaluru-560 084.
(By Sri.V.B.S., Advocate)
JUDGMENT
The complainant has filed the case against the accused alleging that, the Accused have committed an offence punishable under section 138 of Negotiable Instruments Act.
2. The brief facts of the complainant case is as under:
<, That the accused approached complainant the Secretary of M/s.Karnataka Slum Dwellers Development Multipurpose Co- operative Society Limited, which is serving for the upliftment of weaker section people in the society. Said amount was given to the accused at different times for Rs.20,000/- 22 times on different dates, Rs.40,000/- 19 times on different dates, Rs.50,000/- 5 different dates, Rs.1,00,000/- at different times, Rs.5,00,000/- 2 times on different dates, Rs.3,00,000/- by way SCCH-3 3 CC NO.26240/2011 of cash and the total outstanding amount is Rs.31,50,000/-. The said amount was given in good faith and belief with the intention that public funds are routed and the benefits shall go to weaker section as per the norms and conditions of co- operative society. The complainant granted many opportunity for returning the said amount and in turn accused issued the Cheque bearing No.785799, dated 28.09.2010, drawn on The Bharath Co-operative Bank (Mumbai) Limited, Victoria Road Branch. The complainant presented the cheque to her banker on 28.09.2010 and as per the advise, the complainant presented the cheque to her banker State Bank of India, Austin Town branch and same was returned with endorsement that "Drawers Sign incomplete" on 29.09.2010. Consequently complainant issued legal notice and on receipt of UCP (Under Certificate of Posting), accused issued reply notice dated 29.10.2010, but did not pay the amount. Hence, this complaint.
3. After registration of the complaint, sworn statement of the complainant was recorded and as there were prima facie materials to proceed against the accused, a criminal case was SCCH-3 4 CC NO.26240/2011 ordered to be registered against the accused for the offence punishable under Section 138 N.I Act. After registration of the case, summons were ordered to be issued to the accused. In response to the summons/NBW issued, accused appeared through their counsels and got enlarged on bail.
4. Substance of accusation was recorded and read over to the accused. Accused pleaded not guilty and claimed trial.
5. During the course of trial, the complainant got examined herself as PW.1, got marked documents at Ex.P.1 to Ex.P.35, Asst. Manager of Co-operative Bank himself examined as PW.2 and got marked Ex.P.36 to 39 and closed the evidence.
6. Statement of the accused was recorded under Section 313 Cr.P.C. Accused denied each and every incriminating evidence appearing against them, and in defence, accused No.2 has got examined herself as DW.1 and got marked documents at Ex.D.1 to Ex.D.44 and closed his side.
7. Heard. Perused the materials available on record. SCCH-3 5 CC NO.26240/2011
8. The points that arise for my consideration are:-
1) Whether Complainant proves that the accused has issued the Cheque bearing No.785799, dated 28.09.2010 for Rs.31,50,000/-, in discharge of legally enforceable debt?
2) Whether complainant has complied the statutory provisions of Section 138 of N.I.Act?
3) Whether accused is guilty for the offence punishable under section 138 of N.I.Act?
4) What order?
9. My answers to the above points are as under:-
Point No.1 & 3 : In the Negative Point No.2 : Does not arise for consideration Point No.4 : As per the final order for the following:
REASONS
10. Point No.1 to 3: As these points are interrelated with each other, hence they are taken up together for common consideration.
SCCH-3 6 CC NO.26240/2011
11) According to the complainant, accused approached its Secretary and it advanced loan of Rs.31,50,000/- in favour of the accused on different dates. Complainant is Karnataka Slum Dwellers Multipurpose Co-op. Society Ltd., represented by its Secretary, Smt.Nalini Raju. It is the society said to be meant for serving for the upliftment of weaker section in the society and as such, complainant is said to have advanced loan of Rs.20,000/- on 22 times on different dates, Rs.10,000/- on 19 times on different dates and Rs.50,000/- 5 times, Rs.1,00,000/-, Rs.5,00,000/- 2 times and Rs.3,00,000/- by way of cash and that the complainant advanced the said amount to the accused in good faith that the accused would not cheat and also on the assurance made by the accused to return the said amount at the earliest. After several demands accused issued cheque in question for Rs.31,50,000/- bearing No.785799 dated 28.09.2010 drawn on Bharath Co-operative Bank Ltd., Victoria Road Branch and said cheque when presented for encashment returned as 'drawers signature incomplete' and that inspite of issuance of service accused failed to repay the amount covered under the cheque. To substantiate these contentions the SCCH-3 7 CC NO.26240/2011 Secretary of the complainant Bank Smt. Nalini Raju stepped into the witness box and adduced evidence as PW-1. In her affidavit evidence she has reiterated similar to complaint averments. In addition to her ocular evidence, PW-1 has got marked documentary evidence at Ex.P.1 to 35. He has also examined as Asst. Manager of Bharath Co-operative Bank Ltd., as PW-2 and got marked documentary evidence at Ex.P.36 to 39.
12) The cheque said to have been issued by the accused on 28.09.2010 for Rs.31,50,000/- marked as Ex.P.1. The signature of the accused at Ex.P.1(a). The endorsement issued by the bank at Ex.P.2. Two postal acknowledgments and three postal receipts at Ex.P.3 to Ex.P.7 respectively, copy of legal notice dated 12.10.2010 marked at Ex.P.8. The reply notice dated 29.10.2010 marked at Ex.P.9. The letter dated 03.05.2012 with audit report marked at Ex.P.10. The FIR and copy of complaint dated 10.12.2011 marked as Ex.P.13. The certified copy of registration certificate, appointment letter, the resolution dated 30.03.2006 marked as Ex.P.14, 15 & 16. The resolution copy dated 31.03.2007, four share certificates, letter of Durga Steels dated SCCH-3 8 CC NO.26240/2011 22.03.2010, three vouchers, three credit bills, evidence recorded in C.C.No.26241/11 with list of documents, account opening form, specimen signatures, saving account card with specimen signature are respectively marked at Ex.P.21 to Ex.P.39.
13. On the other hand, to counter the complainant evidence, Accused No.2 led evidence as DW-1 and relied upon documentary evidence at Ex.D.1 to Ex.D.44. The certified copy of C.C.No.26241/11, in which she is accused No.2, copy of plaint in O.S.No.26955/07, lease agreement copy, rental agreement, the complaint filed by DW.1, the letter issued by this accused to Bharath Co-operative Bank seeking stock payment of account, trade license, certificate issued by Bharath Society, the FIR, Divorce petition with her husband, have been marked on behalf of the accused.
14) It is her specific defence that, she never entered into any kind of transaction with the complainant or with Smt.Nalini Raju, the Secretary of the complainant. She has further stated that, she is not at all the member of complainant Society and her SCCH-3 9 CC NO.26240/2011 husband by name Venkatesh, who is the President of complainant society was looking after entire transaction of M/s. Durga Steels including the accounts and he was in possession of all the documents including cheque book pertaining to accused proprietary firm and that there were certain difference of opinion between herself and her husband which led to divorce and taking these things into consideration her husband in order to harass the accused No.2 colluded with Nalini Raju and filed this false complaint. When this accused questioned the activities of Smt. Nalini Raju, said false complaint came to be filed by the complainant. It is also the defence of this Accused that, the turnover of the accused business is less than the alleged cheque amount and immediately she gave complaint to the jurisdictional police station about missing of cheque and also informed the Manager, Bharath Co-operative Bank and that she never issued cheque to others without affixing seal of Durga Steels and husband of the Accused No.2, the President of complainant society was looking after business transactions of her proprietary concern Durga Steels, now changed as M/s.Bharath Steel Corporation.
SCCH-3 10 CC NO.26240/2011
15) As per the case of the complainant, accused taken loan on different intervals as Rs.20,000/- 22 times, Rs.10,000/- 19 times, Rs.50,000/- 5 times, Rs.1,00,000/-, Rs.5,00,000/- 2 times and Rs.3,00,000/- by way of cash and it is pertinent to note that, complainant has not mentioned the actual dates on which it has advanced such a huge loan amount to the accused. Complainant is not an ordinary person. It is the legal entity which is expected to make transactions of finance by maintaining proper ledger extract and proper accounts. Because complainant society has been registered under Societies Registration Act. Whatever Acts done by the complainant for so called upliftment of weaker sections in the society shall have to be reflected in the concerned registers meant for the purpose. Undoubtedly the society is having its own byelaws for the purpose of which it is formed. Unfortunately the complainant/PW-1 has failed to furnish the byelaws of the society for the reasons best known to them in spite of demands. Because alleged advance of loan amount of Rs.31,50,000/- is not a small amount. The crucial question that arises at this juncture is the powers of the society to advance the loan amount to its members and up to what SCCH-3 11 CC NO.26240/2011 extent it can advance the loans. According to the complainant, accused No.2 was member of the society and the same is reflected in the audit report. But, unfortunately the auditor who prepared the audit report at Ex.P.10 has not been examined by the complainant for the reasons best known to it. Because, as per the case of the complainant itself, it can advance loans to its members. Under such circumstances, the factum as to whether accused No.2 was member of the complainant society plays an important role. PW-1 during the course of her cross-examination admits that, she has not produced the membership form of the accused No.2. She has also admitted that, in order to avail the facilities or to borrow the loan, one has to be member in the society. When it is the specific case of the complainant that, it advance loans to the member, there was no hurdle for it to produce documents disclosing accused No.2 as a member of the society. PW-1 has further stated that, the complainant advances loan to the members in the form of cash and accused payment of loan was also made by way of cash. It is needless to state that, complainant being the society is not supposed to make financial transactions by way of cash. Even otherwise it shall have to SCCH-3 12 CC NO.26240/2011 maintain proper registers in this regard. PW-1 states that, the request by the accused for sanction of loan was made to the President of the Society by accused No.2 orally and it was made in her presence. According to this witness, she has taken signature of accused No.2 on vouchers for payment of loan amount as per Ex.P.27 to 29. She further admits that, accused No.2 has not put her signature in Ex.P.27 to 29. Ex.P.30 to 32 have been made by one Nithin Kumar for receipt of loan amount. She further admits that, accused No.2 has not signed Ex.P.30 to
32. The crucial point that arises before the Court is about the identity of one Nithin Kumar who is said to be Manager of Durga Steels, in whose favour complainant alleged to have advanced loan amount on behalf of the accused and who is said to have put his signature in Ex.P.30 to 32 for having received the loan amount. The suggestion was put to the witness that Nithin Kumar who is said to be the representative of accused No.1, on whose signature complainant has advanced such a huge amount, is her relative to which she has stated that her brothers son's name is Nithin but, he is not the person who signed in Ex.P.27 to 32. But further she states that, she does not know SCCH-3 13 CC NO.26240/2011 where Nithin is residing. If at all PW-1 brother's son name is Nithin, there was no hurdle for her to disclose his identity. It appears that, she is hiding something. It is significant that, said Nithin Kumar has not been made as an accused in this case. Because, accused have every doubt on the complaint that said false complaint came to be filed by the complainant by colluding with an unknown personality as Nithin Kumar along with the President of the complainant Society, the husband of the accused No.2. PW.1 must have cleared this aspect, but she has not done it.
16) PW-1 in the course of her cross-examination in categorical terms states the limit fixed for sanction of loan to the members. Rs.50,00,000/- of loan can be given to the member as stated by her and she states that same has been reflected in the byelaws of the society. But the byelaws of the society has not been produced by the complainant, even though PW-1 stated that, she has no difficulty to produce the same before the Court. Further, PW.1 states that the main object of the society to give loan is to facilitate members to get BPL cards and Yashaswini SCCH-3 14 CC NO.26240/2011 cards. This witness deposes that, the members of the complainant society can avail loan to the maximum extent of Rs.50,000/. This statement of the witness is contrary to her own evidence where she had earlier deposed to the effect that, society sanctions loan to the extent of Rs.50,00,000/- at the maximum to its members. She cannot give such inconsistent contradictory evidence. Because, there is lot of difference between these two figures. Presuming that, the complainant can grant its members the loan of Rs.50,000/- based on the requirements, the question arises as to what made the complainant to grant such a alleged huge loan amount covered under the cheque to the accused. This crucial aspect has not been explained that PW.1. She further states that, accused used to take loan amount whenever she required and the entire loan amount was released at one time. But quite contrary to this what is stated in the complaint is that the complainant has advanced loan amount to the accused on different dates amounting to Rs.31,50,000/-. It is material to note here itself that, any financial body or any companies/societies for that matter, in order to sanction such a huge loan amount to any individuals or the proprietary concern SCCH-3 15 CC NO.26240/2011 obtain hypothecation/mortgage of immovable properties. But in the case on hand, PW-1 in clear terms admits that, while advancing the loan amount they have not taken any surety from the accused. How can the complainant grant such huge sum to the accused without obtaining sufficient security is not explained by the complainant. It in turn leads to an adverse inference against the complainant itself that it is suppressing material aspects.
17) Perusal of Ex.P.27 to 29 are alleged three vouchers with regard to release of loan amount dated : 15.07.2009, 25.02.2009 and 22.03.2010 name of one Nithin Kumar who is said to have signed for Durga Steels as Manager for having received Rs.5,00,000/-, 15,00,000/- and 10,00,000/- respectively. Further, Ex.P.30 to 32 are said to be three purchase bills of M/s. Durga Steels for purchase of steels from M/s. Shiva Traders dated : 22.01.2002, 25.01.2002 and 31.01.2002 respectively. In all the three documents, said Nithin Kumar has signed as receiver for having received the said amount of Rs.15,00,000/-, 5,00,000/- and 10,00,000/- SCCH-3 16 CC NO.26240/2011 respectively. PW.1 admits that, the title of said documents pertaining to 'Shiva Traders'.
18) In all the aforesaid three documents at Ex.P.30 to 32, it contains two different handwritings. Admittedly, the Shiva Traders Company is nothing to do it the loan amount said to have been borrowed by the accused. Ex.P.32 are titled as Shiva Traders that too containing two different handwritings and different inks and one is in English and another one is in Kannada. The change of ink, handwriting as well as language in the aforesaid documents, which pertain to release of alleged loan amount itself makes the court to suspect the case of the complainant regarding sanction of the said amount and the activities of the complainant as pleaded in the complaint. PW.1 further states that, she does not know when did the accused give the cheque and the date in Ex.P.1 was filled by the lady who accompanied accused No.2, but she does not know her name.
19) As per Ex.P.33, the authorization letter, it was given by Nithin Kumar on 01.04.2010. But the alleged amount of loan SCCH-3 17 CC NO.26240/2011 was given to Nithin Kumar on 23.03.2010 as per Ex.P.26. It means to say that before obtaining authorization letter, complainant has sanctioned alleged loan amount to him. How can the complainant society grant such a huge loan amount to said Nithin Kumar without proper identity and without obtaining proper authorization letter and concerned documents. It in turn leads to an adverse inference, the authorization letter itself was created by the complainant with said Nithin Kumar because there is no explanation provided in this regard by PW.1. The suggestion was put to PW.1 stating that the contents mentioned in Ex.P.1 were written by Venkatesh to which witness deposed that, one person accompanied accused No.2 and that person might have filled the contents and signature in Ex.P.1 cheque, but she does not know his or her name. This evidence of PW.1 leads to an inference that, it is not accused No.2 who has filled the contents and signature in Ex.P.1.
20) Complainant in support of its evidence has also examined the Asst. Manager of Bharath Co-operative Bank from whose bank, the alleged cheque was drawn. The witness in his SCCH-3 18 CC NO.26240/2011 cross-examination deposes that, if cheque is presented for encashment, they will tally the signature of the drawer on the cheque with his specimen signature and only after comparing with the specimen signature of the drawer, they issue bank endorsement. In the case on hand also only after comparison, as the signature of the drawer did not tally with her specimen signature, they issued bank endorsement as per Ex.P.2 stating that, the signature found on Ex.P.1 as the signature found on Ex.P.1 as incomplete signature i.e., drawers sign incomplete. On this ground also, the case of the complainant is not tenable since it does not attract one of the ingredients of Section 138 of Act. Because, when such an endorsement was issued with the shara by the bank, how can the complainant establish that it is the accused who issued Ex.P.1 cheque as pleaded in the complaint.
21) As per Ex.P.10 the audit report, the transactions pertaining to complainant society was Rs.47,62,044/- and the share of the society was Rs.23,900/-. This aspect has been admitted by PW.1. Now the question arise before the Court is that whether complainant was capable of advancing such a SCCH-3 19 CC NO.26240/2011 huge loan amount to the accused. Because, nowhere in the complaint, the complainant has disclosed the dates on which it has advanced loan to the accused. Perusal of very complaint averments create doubt that the complainant has not approached the court with clean hands. Complainant has even failed to reveal necessary aspects such as date of the transaction as to when the accused requested it to sanction loan and the date on which the complainant advanced the alleged loan to the accused. When these essential ingredients are not disclosed by the complainant, it becomes very difficult to believe the case of the complainant itself, accused issued the cheque in discharge of the existing debt or liability. It appears that complainant has filed false complaint against the accused to patch-up the wrong committed by it. Because, no legal entity which is meant for safeguarding the interest of weaker sections will sanction loan for such a huge sum in favour of any individual or the Company without maintaining suitable registers and account extracts. Even perusal of complaint, it contents appear to be vague, suspicious and creates doubt in the mind of the court as to whether any such transaction has taken place much less alleged SCCH-3 20 CC NO.26240/2011 advancement of loan by the complainant to the accused within purview of its functioning. No single document has been produced by the complainant to show that accused obtained loan from it for the sum alleged by executing the document by affixing the signature. Complainant has utterly failed to prove that it has advanced the amount covered under Ex.P.1 to the accused and as such, question of considering the same as legally enforceable debt does not arise for consideration. It appears that in order to harass the accused present complaint came to be filed. Therefore in my opinion, accused have not committed the offence alleged against them in the complaint. When such being the case, compliance of the ingredients of Section 138 of N.I. Act does not survive for consideration. Accordingly point No.1 and 3 are answered in the Negative and point No.2 as does not survive for consideration.
22. Point No.3 : - In the light of foregoing discussion, I proceed to pass the following:
SCCH-3 21 CC NO.26240/2011
ORDER Acting U/s.255(1) of Cr.P.C., accused is acquitted for the offence punishable U/s.138 of N.I.Act.
Bail bond and surety bond executed by the accused and their surety shall stand cancelled. (Dictated online to the Stenographer, corrected and then pronounced by me in open court on this the 27th day of April 2016) (GOMATI RAGHAVENDRA) VII Addl. Judge & XXXII ACMM, Bengaluru.
ANNEXURE Witnesses examined on behalf of the Complainant:
PW.1 : Nalini Raju PW.2 : Gopal Poojari
Documents marked on behalf of the Complainant: SCCH-3 22 CC NO.26240/2011
Ex.P.1 : Original Cheque,
Ex.P.1(a) : Signature of the accused
Ex.P.2 : Endorsement
Ex.P.3 & 4 : Two postal acknowledgements
Ex.P.5 - 7 : Three postal receipts
Ex.P.8 : Copy of legal notice
Ex.P.9 : Reply notice dated : 29.10.2010
Ex.P.10 : Letter with audit report
Ex.P.11 : Letter of Durga Steels
Ex.P.12 : Certified copy of FIR
Ex.P.13 : Copy of complaint
Ex.P.14 : Certified copy of registration certificate
Ex.P.15 : Appointment order
Ex.P.16 : Resolution copy
Ex.P.17 : Certificate issued by DCC Bank, Bidar
Ex.P.18 : Copy of complaint
Ex.P.19 : Loan application
Ex.P.20 : Loan sanctioned letter
Ex.P.21 : Resolution copy
Ex.P.22-25 : Four share certificates
SCCH-3 23 CC NO.26240/2011
Ex.P.26 : Letter of Durga Steels
Ex.P.27-29 : Three vouchers
Ex.P.30-32 : Three credit bills
Ex.P.33 : Letter of A2
Ex.P.34 : CC of evidence
Ex.P.35 : CC of memo with list of documents.
Ex.P.36 : CC of Account opening form
Ex.P.37 : CC of Specimen Signatures
Ex.P.38 : CC of saving account card
Ex.P.39 : CC of specimen signature
Witnesses examined on behalf of the accused:
DW.1 : A. Begum Documents marked on behalf of the Accused:
Ex.D.1 : CC of Judgment
Ex.D.2 : CC of order in OS No.26955/2007
Ex.D.3 : CC of lease agreement
Ex.D.4 : CC of judgment in OS No.26955/2007
Ex.D.5 : CC of rental agreement
Ex.D.6 : Another certified copy of judgment in
OS No.26955/2007
SCCH-3 24 CC NO.26240/2011
Ex.D.7 : CC of complaint
Ex.D.8 : CC of another document
Ex.D.9 : Bank statement
Ex.D.10 & 11: Two credit bills issued by Durga Steel Suppliers Ex.D.12 : CC of Form 'C' Ex.D.13 : Endorsement given by HSR Station Ex.D.14 : CC of complaint Ex.D.15 & 16: Fee paid documents Ex.D.17-19: CC of paper publication Ex.D.20 : Bharath Co-operative Bank Stamp payment Ex.D.21 : CC of vehicle policy Ex.D.22-25: Four documents of Durga Constructor Ex.D.26 : CC of Statement of account Ex.D.27 : Document of Karnataka Slum Society Ex.D.28 : CC of receipts Ex.D.29 : CC of Application Ex.D.30 : CC of mortgage deed Ex.D.31 & 32: CC of two Trade licence Ex.D.33 : Certificate issued by Bharath Society SCCH-3 25 CC NO.26240/2011 Ex.D.34 : CC of death certificate Ex.D.35 : CC of identity card Ex.D.36 : CC of notice Ex.D.37 : Information letter Ex.D.38 : CC of FIR Ex.D.39 : CC of Auction sale-deed Ex.D.40 : Police endorsement Ex.D.41 : CC of complaint Ex.D.42-43: Two NCR's issued by the police Ex.D.44 : Inland letter (GOMATI RAGHAVENDRA) VII Addl. Judge & XXXII ACMM, Bengaluru.