Bangalore District Court
Sri. M.D.Mukundan vs Sri. S.G. Bharath Reddy on 20 April, 2018
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 20th day of April, 2018
Present: Smt. Saraswathi.K.N, B.A.L., LL.M.,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.25185/2016
C/w
CC. No. 25186/2016
CC. No. 25187/2016
CC. No. 27206/2016
CC. No. 27209/2016
CC. No. 6265/2017
CC. No. 6266/2017
CC. No. 8273/2017
CC. No. 11537/2017
CC. No. 13700/2017
Complainant : Sri. M.D.MUKUNDAN,
S/o. Sri. Damodaran,
Aged about 81 Years,
R/at No.548, 14th Cross,
26th Main, 1st Phase,
Jayaprakash Narayan Nagar,
Bengaluru - 560 078.
(Rep. by Sri.C.G. Gopalaswamy, Adv.,)
- Vs -
Accused : Sri. S.G. BHARATH REDDY,
Managing Director,
M/s. Aryan Home Tech Pvt., Ltd.,
No.95, 'Mani Building',
4th Main, Dollars Colony,
Opp. to M/s. M.K. Ahmed Stores,
4th Phase, J.P. Nagar,
Bengaluru - 560 078.
(Rep. by Sri. R. Srinivas, Adv.,)
Cases : CC No. 25185/2016 - 11/11/2016
instituted CC No. 25186/2016 - 11/11/2016
CC. No. 25187/2016 - 11/11/2016
CC. No. 27206/2016 - 07/12/2016
CC. No. 27209/2016 - 07/12/2016
CC. No. 6265/2017 - 10/02/2017
CC. No. 6266/2017 - 10/02/2017
CC. No. 8273/2017 - 10/03/2017
CC. No. 11537/2017 - 18/04/2017
CC. No. 13700/2017 - 15/05/2017
Offence : U/s 138 of N.I. Act
complained of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 20/4/2018
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Before the proceeding with the judgment, it is necessary to mention here that the 9 other connected matters between the same parties in respect of the same cause of action in C.C.No.25187/2016, C.C. No.25186/2016, C.C.No.27206/2016, C.C.No. 27209/2016, C.C.No.1153/2017, C.C.No.8273/2017 C.C.No.6265/2017, C.C.No.6266/2017 and C.C.No. 13700/2017 have been clubbed with the present case and the common cross-examination in respect of the said 9 cases has been recorded in the present case, since both parties and their learned counsels filed a memo to the said effect in order to avoid conflicting judgments.
3. Briefly stated the case of the Complainant is that, the Accused is the Managing Director and the majority share holder of M/s. Aryan Home Tech Pvt., Ltd., which is engaged in the business of developing properties, constructions of apartments and allied activities. To the best of his knowledge, the said company has the wife of the Accused Smt.Rashmi Bharath as the only other Director and the share holder. Leading him to believe that the company was flourishing and that he needed some infusion of capital to expand its activities, the Accused borrowed a sum of Rs.20,00,000/= as loan from quite some time ago and he was paying interest month to month and after some time he stopped so paying. When he asked for the repayment of the principal and the payment of interest amount, the Accused offered to repay the outstanding loan and the accumulated interest and issued some cheques drawn on the Bank Account of the company.
4. The Complainant has further submitted that, as he has crossed 80 years of age and was in for a shock when all the cheques were dishonored for the reason that the account on which those were drawn had been closed and it was clear a case of fraud and deception, he did not pursue it, as he has no physical capacity to follow up. However, he kept on requesting the Accused to repay at least the principal of the loan and after great deal of requests and entreaties from him, the Accused issued ten cheques bearing Nos. 194032 to 194041 for Rs.2,00,000/= each, dated at monthly intervals starting from July 10, 2016, on the his personal account in the Bank of India, Jayaprakash Narayan Nagar Branch, Bengaluru.
5. The Complainant has further submitted that when he was presented all the ten cheques on the following dates they returned dishonored and for the purpose of clarity the details of the said cheques and the reason for the dishonor as well as the dates of their dishonor is shown in the table below:-
Sl. Cheque No. and Reason for Date of Cheque C.C. No. No. Date of cheque Dishonor Return Memo 194034 dated Funds
1. 25185/2016 14/9/2016 10/9/2016 Insufficient 194033 dated Funds
2. 25186/2016 28/9/2016 10/8/2016 Insufficient 194032 dated Funds
3. 25187/2016 14/9/2016 10/9/2016 Insufficient 194035 dated Funds
4. 27206/2016 14/10/2016 10/10/2016 Insufficient 194036 dated Funds
5. 27209/2016 14/11/2016 10/11/2016 Insufficient 194038 dated Funds
6. 6265/2017 13/01/2017 10/01/2017 Insufficient 194037 dated Funds
7. 6266/2017 15/12/2016 10/12/2016 Insufficient 194041 dated Funds
8. 8273/2017 14/02/2017 10/02/2017 Insufficient 194042 dated Funds
9. 11537/2017 14/03/2017 10/03/2017 Insufficient 194033 dated Funds
10. 13700/2017 15/04/2017 10/04/2017 Insufficient
6. The Complainant has further submitted that thereafter he got issued the legal notices to the Accused in respect of all the aforesaid 10 cheques through his counsel calling upon him to pay the cheques amount to him within 15 days from the date of the from the date of the receipt of the said legal notices. Though the said legal notices have been duly served upon the Accused, he has neither replied to the notice nor has he paid the cheques amount to him. Thereafter he caused a rejoinder notice to the Accused dated: 1/10/2016 through RPAD as some inadvertent typographical error had crept in the legal notice. Inspite of the service of the same, the Accused has not made any payment or caused any reply to the said rejoinder notice as well. Hence, the present complaint.
7. The Complainant submits that, the dishonour of the cheques by the Accused has been malafide, intentional and deliberate. Feeling aggrieved by the conduct of the Accused, he has filed the complaints praying that the Accused be summoned, tried and punished in accordance with Sec.138 of the Negotiable Instruments Act.
8. The Complainant has led his pre-summoning evidence and he is examined on oath as C.W.1 and he has filed his affidavits-in-lieu of his sworn-statements in all the 10 cases, wherein, he has reiterated the complaint averments of all the 10 respective cases.
9. In support of his oral evidence C.W.1 has relied upon the following documentary evidence in these cases:-
a) In C.C.No.25185/2016, the documentary evidence as per Ex.C1 to C8 is as follows:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt, Ex.C5 is the Postal Acknowledgment, Ex.C6 is the office copy of the Rejoinder Notice, Ex.C7 is the Postal Receipt and Ex.C8 is the Postal Acknowledgement.
In his post summoning evidence, in C.C.No.25185/2016, P.W.1 has produced and relied upon the following documentary evidence:-
The Pass Book of the joint account of P.W.1 and his wife as per Ex.P9, the Bond as per Ex.P10, the Letter as per Ex.P11, the Registration Certificate as per Ex.P12, the Sale deed as per Ex.P13, Acknowledgment as per Ex.P14, the Allotment Advises as per Ex.P15 and P16 respectively and the Business Transfer Agreement as per Ex.P17.
b) In C.C.No.25186/2016, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C7:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Acknowledgment, Ex.C5 is the office copy of the Rejoinder notice, Ex.C6 is the Postal Receipt and Ex.C7 is the Postal Acknowledgement.
c) In C.C.No.25187/2016, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C8:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt, Ex.C5 is the Postal Acknowledgment, Ex.C6 is the office copy of the Rejoinder Notice, Ex.C7 is the Postal Receipt and Ex.C8 is the Postal Acknowledgement.
d) In C.C.No.27206/2016, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C5:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt and Ex.C5 is the Postal Acknowledgment.
e) In C.C.No.27209/2016, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C5:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt and Ex.C5 is the Postal Acknowledgment.
f) In C.C.No.6265/2017, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C5:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt and Ex.C5 is the Postal Acknowledgment.
g) In C.C.No.6266/2017, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C5:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt and Ex.C5 is the Postal Acknowledgment.
h) In C.C.No.8273/2017, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C5:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt and Ex.C5 is the Postal Acknowledgment.
i) In C.C.No.11537/2017, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C5:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt and Ex.C5 is the Postal Acknowledgment.
j) In C.C.No.13700/2017, C.W.1 has relied upon the following documentary evidence as per Ex.C1 to C5:-
Ex.C1 is the cheque, Ex.C1(a) is the signature identified by P.W.1 as that of the Accused, Ex.C2 is the Bank memo, Ex.C3 is the office copy of the Legal Notice, Ex.C4 is the Postal Receipt and Ex.C5 is the Postal Acknowledgment.
10. The Accused has appeared before the court and he has been enlarged on bail in all these cases. The substance of the accusation has been read over to over to him in all the cases, to which, he has pleaded not guilty and has stated that he has the defence to make.
11. The Complainant has led his post summoning evidence by examining himself as PW1 and he has filed his affidavits in lieu of his chief examination in all the cases.
12. It is pertinent to note that, after the Complainant had been examined by the learned Defence Counsel in C.C.No.25185/2016, he has produced additional documentary evidence as per Ex.P9 to P17 and it was at the stage of his further cross-examination in respect of the said documentary evidence that, the learned Defence Counsel filed a memo seeking the clubbing of the remaining 9 cases with the present case and in view of there being no objection for the clubbing of all these cases by the learned counsel for the Complainant and also taking into consideration the fact that, all the 10 cases have arisen out of the same cause of action, the remaining 9 cases came to be clubbed with the present case and the further cross-examination of P.W.1 which has been done on 8/12/2017 has been treated as common cross-examination in all the remaining 9 cases.
13. Therefore to avoid the repetition of facts and the evidence, the evidence of the Complainant which has been recorded by this court in C.C.No.25185/2016 has been discussed by this court in this common judgment.
14. The statements of the Accused under Sec.313 of the Cr.P.C., has been recorded in all the 10 cases by explaining to him the incriminating evidence found against him. He has denied the incriminating evidence found against him and has chosen not to lead his rebuttal evidence. As such there is no rebuttal evidence led by the Accused.
15. The learned counsel for the Complainant has filed his written arguments, as common arguments, in respect of all the 10 cases, in which, he has prayed for the conviction of the Accused on the ground that, the Complainant has examined him as P.W.1 and got marked the documentary evidence as per Ex.P1 to P17. The Accused has not led his evidence and he has not produced any documents from his side. In his statements recorded U/sec. 313 of Cr.P.C., the Accused has not taken the stand that the loan is time barred and that it is for the first time in his arguments the learned Defence Counsel has come up with the said claim and as such the same is not tenable.
16. It is further argued that, the subject cheques have been drawn by the Accused towards the discharge of his existing debt or liability and as such the same will fall under the purview of the legally enforceable debt or liability.
17. It is further argued that, the Accused has admitted his loan transaction with the Complainant as well as the issuance of the subject cheques by him in favour of the Complainant, though he has claimed that, the loan that was availed from the Complainant by him was only Rs.5,00,000/= in the year 2011 and that the subject cheques were issued by him to the Complainant in the year 2011 as security cheques. But there is absolutely no evidence led by the Accused in this regard.
18. It is further argued that, as per the Special rules of Evidence under the Act and the presumptions under Sec.118 and 138 of the N.I.Act, the Complainant has been provided with a shelter and unless the contrary is proved by the Accused, the presumption shall be the subject cheques were drawn by the Accused in favour of the Complainant for the discharge of debt or liability.
19. It is further argued that, there is no requirement that the complaint must specifically state in his complaint that there was subsisting liability and the burden of proving that there was a subsisting debt or liability is on the Accused, which he has to discharge during the trial, which he has failed to do so in these cases. Therefore, the Accused has failed to discharge the burden of rebutting the presumption U/Sec.139 of the N.I. Act though the standard of proof for doing so on his part is that of preponderance of probabilities.
20. It is further argued that, the Accused has tried to suggest that, the subject cheques were blank have been filed up by the Complainant, but the same has been denied by the latter. There is no denial of his signatures on the cheques by the Accused and admittedly the subject cheques have not been dishonored for the reasons "Signature differs". Therefore, assuming, but not admitting that the subject cheques were blank, as per the decision of the Hon'ble Supreme Court of India and that of several High Courts which have observed that, insertion of such dates does not amount to tampering or alteration. But by delivery of such undated cheque the drawer authorizes the holder to insert date. Therefore, even on this ground, the Accused cannot try to escape from his liability U/Sec.138 of the N.I. Act.
21. It is further argued that, though the Accused has taken up the defence that, the subject cheques were issued only for the security of a loan, implying the fact that the subject cheques were issued by him, the said defence is not a ground to exonerate him from the penal liability U/Sec.138 of the N.I. Act.
22. It is also argued that, the defence of the Accused that the debt is time-barred is an after- thought defence, since the Complainant in his cross- examination has deposed that, he came to know the Accused in the year 2014, which means that, the debt can be only after that point. In the later part, the Complainant has stated that the loan was given in the year 2011. This mistake is due to the old age and infirmity due to impaired hearing on the part of the Complainant. Therefore, the said defence that the debt is time barred is also not available to the Accused.
23. It is further argued that, the Complainant has proved his financial capacity, through the documentary evidence at Ex.P9 to P17 and he is not obliged to prove the original transaction or original consideration, as is expected in a suit for recovery of money.
24. It is argued that, the Complainant has produced the original sale deed at Ex.P13, which belongs to the Accused and the fact that the said document is in the custody of the Complainant till date, in respect of which, the Accused has not taken any action against the Complainant is a proof of the fact of the existence is liability on the part of the Accused toward the Complainant. In such circumstance, the debt due from the Accused can also be construed as debt secured by deposit of title deeds and in such event, the limitation for the recovery of the debt is twelve years.
25. It is also further argued that, the Complainant has fulfilled ingredients of Sec.138 of the N.I. Act and the presumptions U/Sec.118 and 139 of the N.I. Act are in favour of the Complainant. On the contrary the Accused has failed to rebut the said presumptions.
26. In support of his arguments, the learned counsel for the Complainant has relied upon the following decisions:-
1. Joseph Jose V/s Baby Puthuval Puravidom Poothoppu and another, reported in 2002 Cri. L. J. 4392;
2. M/s. M.M.T.C. Ltd., and another V/s M/s.
Medchi Chemicals and Pharma (P) Ltd. And another, reported in AIR 2002 SC 182;
3. Johnson Scaria V/s State of Kerala, reported in LAWS (KAR) 2006 (8) 48;
4. Umaswamy V/s K.N. Ramanath, reported in LAWS (KAR) 2006 (6) 96;
5. S.T.P Limited, Bengaluru V/s Usha Paints and Decorators, Bengaluru and another, reported in (2006) 5 KANT LJ 323;
6. T.N.Unnikrishnan V/s T.K. Ramankutty and Anr., reported in 2006 CRL. L. J. 4700;
7. Lingaraj V.s Babu Narayan Shetty, reported in Crl.A.254/2008
27. Per contra, the learned Defence counsel has filed written arguments, in which, he has mainly focused on the aspect of the maintainability of the complaint in view of the time barred debt. In this regard, he has argued that there is no pleading with regard to the date of approach as well as the date of the alleged lending of the loan by the Complainant to the Accused. For the first time, in his cross- examination, the Complainant has stated that the financial assistance was given by him to the Accused in the year 2011, while the cheques have been presented in the month of July 2016. That means the cheques have been presented after the lapse of 5 years from the date of the alleged transaction. Hence, the debt, even if existed is barred by the limitation. Therefore, he has argued that the complaint itself is not maintainable.
28. In support of this argument, the learned Defence Counsel has relied upon the following decisions:-
1. Sasseriyil Joseph V/s Devassala, reported in the Hon'ble High Court of Kerala, reported in 2001 Crl.L.J. page 24;
2. K.V. Subba Reddy V/s Raghava Reddy, reported in the Hon'ble High Court of Karnataka in Crl. Appeal No. 545/2010;
3. Girdhari Lal Rathi V/s P.T.V Ramanuja Chari and Another, reported in 1197 (2) Crimes 658;
Andhra Pradesh High Court.
29. It is further argued that, the Complainant has miserably failed to establish his financial capacity before this court.
30. It is also argued that the Complainant has failed to produce the alleged agreement that he claims that the Accused had executed in his favour while receiving the amount from him. As such an adverse inference is liable to be drawn against him in this regard.
31. It is also argued that the defence of the Accused is that the disputed cheques were issued by him in the year 2011 as a matter of security to one Raghu, who was the mediator and thus the cheques reached the Complainant afterwards false cases have been filed against him by the Complainant. This fact has been admitted by the Complainant in his cross- examination. Thus the defence of the Accused that he had availed a loan of Rs.5 Lakhs from the Complainant in the year 2011 through Raghu is established with the admission of the Complainant in his cross- examination.
32. Hence it is lastly argued that, the Accused has rebutted the presumption under Sec.139 of the N.I.Act by cross-examining P.W.1 and discrediting his version. Accordingly, he has prayed for the acquittal of the Accused.
33. I have also considered the submissions and perused the record carefully.
34. Sec.138 of the Negotiable Instruments Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence under Section 138 Negotiable Instruments Act are:-
(i) Drawing up of a cheque by the Accused towards the payment of the amount of money, for the discharge, in whole or in part, of any debt or any other liability;
(ii) Return of the cheque by the bank as unpaid;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of the notice under the proviso
(b) to Section 138.
The Explanation appended to the Section provides that, the "debt or other liability" for the purpose of this Section means a legally enforceable debt or other liability.
35. Apart from this, Sec.139 of the Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms:-
"It shall be presumed, unless the contrary is proved, that:-
The holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, of any debt or other liability".
36. Also, Sec. 118 of the Negotiable Instruments Act states, "Until the contrary is proved, the following presumptions shall be made:-
(a) That every Negotiable Instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
37. Thus, the Act clearly lays down the presumptions in favour of the Complainant with regard to the issuance of the cheque by the Accused, towards the discharge of his liability in favour of the Complainant.
38. Under the scheme of the Act, the onus is upon the Accused to rebut the presumptions in favour of the Complainant by raising a probable defence.
39. It is a well settled position of law that the defence of the Accused, if in the nature of a mere denial of the case of the Complainant will not be sufficient to hold it as a probable defence. The bare denial of the passing of consideration apparently does not appear to be any defence. Something which is probable must be brought on record for getting the benefit of shifting the onus of proof to the Complainant.
40. It is also a well settled position of law that, once the cheque is proved to be relating to the Account of the Accused and he accepts and admits the signature on the said cheque, then the initial presumption as contemplated under Sec.139 of the N.I.Act has to be raised by the courts in favour of the Complainant. The presumption referred to in Sec.139 of the N.I.Act is a mandatory presumption and not a general presumption, but the Accused is entitled to rebut the said presumption. What is required to be established by the Accused in order to rebut the presumption is different from each case under given circumstance. But the fact remains that a mere plausible explanation is not expected from the Accused and it must be more than a plausible explanation by way of rebuttal evidence. The defence raised by the Accused by way of rebuttal evidence must be probable and capable of being accepted by the court.
41. No doubt the initial mandatory statutory presumptions under Sec.118 and 139 of the N.I.Act are in favour of the Complainant. However they are rebuttable presumptions and the Accused is expected to rebut the presumptions by raising a probable defence.
42. Such being the legal position, it would be pertinent to refer to the defences raised by the Accused to rebut the presumptions in favour of the Complainant in this case.
43. Admittedly, there is no dispute with regard to the fact that the parties are well acquainted with each other and that the cheques in dispute belong to the Accused with his signatures on them. Likewise there is no dispute with regard to the fact that there existed loan transaction between the parties and that the Accused has issued the subject cheques to the Complainant. However there is a serious dispute between the parties with regard to the extent of the loan and the purpose for which the cheques in dispute were issued by the Accused in favour of the Complainant.
44. According to the Complainant, he has lent Rs.20 Lakhs to the Accused by way of Rs.10 Lakhs each on two occasions and that towards the discharge of the said liability, the Accused is said to have issued the subject cheques to him.
45. On the contrary, the defence of the Accused is that though his loan transaction with the Complainant is admitted, the quantum of loan according to him was only Rs.5 Lakhs, that too in the year 2011 and that it was in respect of the said loan transaction that he had issued the subject cheques to the Complainant for security purpose.
46. Now with this specific defence raised by the Accused, the dispute between the parties is watered down to consider the existence of the liability of the Accused to the tune of Rs.20 Lakhs and the fact as to if the subject cheques were issued by the Accused to the Complainant towards the discharge of the said legally enforceable debt and liability.
47. No doubt the moment the Accused admits that the cheques in dispute belong to him with his signatures on them, the mandatory statutory presumptions operate in favour of the Complainant. But it is equally a well settled position of law that the said presumptions are rebuttable in nature and the Accused has the right to place on record a probable defence to rebut the said presumptions, thereby disproving the case of the Complainant.
48. However, before raising the said presumptions in favour of the Complainant, it is the burden cast upon the Complainant to establish beyond reasonable doubt that in deed there exist a legally enforceable debt as against the Accused and that towards the discharge of the said legal debt and liability the Accused has issued the disputed cheques to him. Moreover the degree of proof which is expected from the Complainant is proof beyond reasonable doubt and if the Accused is able to raise even a small doubt in the case of the Complainant, then the benefit of the said doubt should go to the Accused. Therefore, the Complainant is expected to plead and prove his case without giving room for any suspicion in his case.
49. In this regard, it could be seen that, during the course of the cross-examination of the Complainant as well as in his arguments, the learned Defence Counsel has emphasized on the point that the complaint is not maintainable, since the alleged debt of Rs.20 Lakhs as claimed by the Complainant to be due to him from the Accused is barred by limitation and the same is not saved by Sec. 25(3) of the Indian Contract Act.
50. As the said point touches the very maintainability of the complaint it is necessary to give a finding in respect of the same.
51. In this regard, it is pertinent to note that, no doubt as rightly pointed out by the learned Defence Counsel, there is no pleading either in the legal notice or in the complaint with regard to the date of approach or the date of the lending of the loan by the Complainant to the Accused. It is only averred in the complaint that as the Accused needed some infusion of capital to expand the activities of the company, he borrowed a sum of Rs.20 Lakhs as loan quite some time ago, for which the Accused was said to have been paying interest for some time.
52. It is seen that for the first time in his cross- examination, the Complainant has deposed that, he might have met the Accused during the year 2014 and that the Accused was introduced to him through one Raghu, the PA of Nataraj and that the Accused had sought for loan from him approximately in the month of April 2014.
53. During the further cross-examination of the Complainant, it is elicited by the learned Defence Counsel from him that he has lent the remaining balance of Rs.10 Lakhs to the Accused in the same year i.e., in the year 2011 and that he has not filed any case against the Accused within three years from 2011 and that he is claiming that he has lent Rs.20 Lakhs to the Accused in the year 2011 based on his memory.
54. In view of the specific claim of the Complainant that he has lent Rs.20 Lakhs to the Accused in the year 2011, it is the defence of the Accused that the cheques in dispute which are presented in the year 2016, the complaints are not at all maintainable.
55. However the defence of the Accused that the cheques are barred by time and as such the complaints are not maintainable is not available to the Accused in these cases, because the Accused has also admitted that he had loan transaction with the Complainant in the year 2011 and that he had issued the subject cheques to the Complainant in the year 2011 itself as security cheques with only his signatures on them. In such circumstance, the onus of proving the alleged loan transaction of Rs.5 Lakhs as claimed by the Accused is upon him. However except his self serving defence in this regard, there is absolutely no proof in respect of the same. Therefore even if the claim of the Complainant that the cheques in dispute were issued to him by the Accused in the year 2014 is assumed for a moment to be false, then as per the very defence theory raised by the Accused, the cheques in dispute cannot be termed as those issued towards a time barred debt.
56. The Accused has admitted having issued the cheques in dispute to the Complainant, though according to him it was in the year 2011. However the Complainant has denied the suggestion to him that he has misused the subject cheques by filling them without the authorization of the Accused to him to do so. IN such circumstance the onus of proving the said defence version is shifted in favour of the Accused, which he has failed to do in the present case.
57. Moreover as per the own defence of the Accused, even if the cheques were issued by him to the Complainant in the year 2011 itself, then taking into consideration the fact that they were issued by the Accused to him as signed blank cheques goes to show that they were undated. In such circumstance, the said cheques become valid cheques from the dates written on them. Therefore it cannot be accepted that the defence of the Accused that the cheques are towards time barred debt cannot be accepted by this court. Moreover the stray answer given by the Complainant in his cross-examination that he came in contact with the Accused in the year 2014 and then claiming immediately that the Accused had approached him seeking loan in the year 2011 is indicative of the fact that it is because of his advanced age that the Complainant has not been able to be clear in giving answers in his cross-examination by the learned Defence Counsel. However this cannot be taken advantage of by the Accused. Therefore the defence of the Accused that the cheques are barred by time is wholly misconceived and as such the Accused is not entitled to the said defence version.
58. Now coming to a lapse in the case of the Complainant i.e., the non-production of the alleged agreement said to have been executed by the Accused in favour of the former. Though the Complainant has claimed that he is in possession of the said document and that he has no impediment to produce it before this court, the non-production of the said document by him cannot be viewed with suspicion by this court, since there is no suggestion put to the Complainant in his cross-examination that there was no such agreement executed by the Accused in his favour. As a result the claim of the Complainant with regard to such agreement said to have been executed by the Accused in his favor has been proved with the non denial of the same by the Accused.
59. Moreover when the Complainant has deposed that he is in possession of the said Agreement, the Accused did not take any steps so as to secure the said document before the court from the Complainant. This conduct of the Accused leads to an adverse inference against him.
60. Now coming to another serious defence of the Accused is with regard to the financial capacity of the Complainant.
61. It is seen that during the initial stage of the proceedings, except having produced the basis documentary proof required in a proceeding under Sec.138 of the N.I.Act viz., the cheques, return memos, the office copy of the legal notices and the postal receipts etc., the Complainant had not produced any documentary evidence in support of his source of funds. Therefore when he was questioned by the learned Defence Counsel as to if he has any documents to show that he had a hard cash of Rs.20 Lakhs with him, he has answered that he has documents in this regard and according to P.W.1, the source of funds of Rs.20 Lakhs to him was that he had received Rs.43 Lakhs by having sold his cable network business and that apart from that he had his savings which he had accumulated it during his service. P.W.1 has further deposed that he had deposited the amount of Rs.43 Lakhs to his account.
62. Thereafter P.W.1 has produced the documentary evidence as per Ex.P9 to P17 in order to substantiate the fact that he had the source of funds so as to lend the loan to the Accused.
63. According to P.W.1, he has produced the documentary evidence at Ex.P17 i.e., the Business Transfer Agreement dated 2.4.2008 to show that he had received Rs.43 Lakhs by having sold his Cable Network Business. However he has admitted the suggestion that there is no recital in Ex.P17 to show that he has received Rs.43 Lakhs under the said agreement.
64. According to P.W.1, he was paid Rs.43 Lakhs by the Purchaser of Space Vision by way of two cheques for Rs.26,10,000/= and Rs.9,41,000/= and that as on 2.4.2008, he was paid Rs.35,51,000/= by the purchaser.
65. It is the defence of the Accused that, the document at Ex.P17 has been created by P.W.1 only for the purpose of establishing his financial capacity in this case. However it is pertinent to note that only because it is suggested to P.W.1 that Ex.P17 is a created document by him, it cannot be inferred that it is a created document, since the Accused has not seriously disputed its genuineness.
66. Now coming to the documentary evidence at Ex.P14, which is titled as an "ACKNOWLEDGMENT" dated 13.2.2008, according to the Complainant by virtue of this document, he has acknowledged the receipt of Rs.26,10,000/= vide Pay Order bearing No.002393 of YES BANK dated 20/2/2008 from M/s. YOU TELECOM PVT., LTD., Bengaluru.
67. It is this documentary evidence, in respect of which, the Defence Counsel has taken serious objections by claiming that it is a concocted and created document as the date of the said document discloses it as 13.2.2008, while the date of the receipt of the amount is shown as 20.2.2008.
68. No doubt the said anomaly is evident on a prima-facie observation of the said document. However the reason assigned by P.W.1 for this anomaly is that it has occurred by mistake and he has denied the suggestion that as he has created the said document, the said mistake has crept in.
69. No doubt, the said anomaly creates a doubt about the said document, but it is not untrue that as per Ex.P17, P.W.1 has sold his cable network business and in Ex.P17, there is reference to the amount of Rs.26,10,000/= as advance amount. Therefore when the documentary evidence at Ex.P14 and P17 are considered together, they corroborate with each other. As such only because of the date mentioned on the document at Ex.P14, I do not find any reason to suspect the said documentary evidence at Ex.P14 and P17.
70. It is further pertinent to note that, P.W.1 has deposed that he might not have paid any amount to the Accused from out of Rs.31 Lakhs, which was credited to his account on 30.6.2011 and that as per the relevant entries found in Ex.P9, which is his Bank Passbook, he has deposited Rs.30 Lakhs in 3 FD's of Rs.10 Lakhs each in respect of which he has been receiving an interest of Rs.16,500/= per month.
71. However it is pertinent to note that by relying upon the documentary evidence at Ex.P9 to P17, it is the defence of the Accused that, even if it is taken into account that P.W.1 had received the amount under Ex.P17, he did not retain the same with him in hard cash, instead he has deposited them in 3 FD's and as such as on the relevant date, he had no source of funds so as to lend any loan to the Accused.
72. However this argument and the defence of the Accused cannot be accepted by this court, in view of the fact that, when the Accused admits his loan from P.W.1 in the year 2011, though to the tune of Rs.5 Lakhs, then as per the own defence of the Accused, if the documentary evidence at Ex.P9 to P17 does not help the Complainant so as to prove his financial capacity, then the claim of the Accused that P.W.1 had lent Rs.5 Lakhs to him in the year 2011 also cannot be believed by this court.
73. Therefore the Accused cannot be permitted to plead that the Complainant could lend him Rs.5 Lakhs, though in this regard, the Accused has no grievance with regard to the source of Rs.5 Lakhs with P.W.1 at the relevant point of time, when he could have grievance with regard to the claim of Rs.20 Lakhs by P.W.1.
74. No doubt the amount of Rs.20 Lakhs is a huge amount when compared to Rs.5 Lakhs. But when the Accused admits that P.W.1 could lend him Rs.5 Lakhs to him, without there being any such source of funds having been questioned by the Accused, there is no reason for this court to disbelieve the claim of the Complainant that he has advanced Rs.20 Lakhs to the Accused.
75. It is further pertinent to note that there is no dispute with regard to the fact that the amount of loan has been advanced by the Complainant to the Accused not as interest free loan, but by charging interest. This fact has been admitted even by the Accused when he himself has suggested to P.W.1 that the former had been paying interest on the loan to the latter.
76. One more circumstance which is elicited from P.W.1 is that there was no direct transaction between him and the Accused and that it was through the mediation of one Raghu. No doubt it is proved with the admission of the Accused that the transaction of loan between him and the Complainant was not direct and that it was through one Raghu. But there is no reason to disbelieve the case of the Complainant only on this ground because there is no difference if the transaction between the parties was either direct or indirect. It makes no difference when all the other factors constituting the offence punishable under Sec.138 of the N.I.Act are fulfilled by the Complainant.
77. Therefore only because the transaction between the parties was not direct, it does not create any doubt about the existence of the loan transaction.
78. Likewise it is true that, P.W.1 has admitted that, the subject cheques came to his possession not directly from the Accused to him, but through Raghu. But this factor also by itself is not a ground to doubt the genuineness of the transaction between the parties.
79. Now coming to another vital piece of documentary evidence at Ex.P13, which is the original registered sale deed of the Accused dated 12.9.2005, which according to P.W.1 came to his possession from the Accused, while the latter receiving the loan of Rs.20 Lakhs from him and that along with the said document, the Accused had also issued his 14 cheques to him.
80. Interestingly there is no cross-examination of P.W.1 in respect of the documentary evidence at Ex.P13 and the claim of P.W.1 that the said document was given to him by the Accused as security along with his 14 cheques while receiving the loan of Rs.20 Lakhs from him has remained undisputed by the Accused. Therefore there is no evidence to the contrary led by the Accused to explain the circumstance under which his original document at Ex.P13 came to the custody of P.W.1. Therefore this also leads to an inference that the Accused has admitted having handed over his title document to P.W.1 so as to secure a loan from the latter.
81. At this stage, it is to be noted that the conduct of the Accused in not having any steps against the Complainant so as to take return of his original title deed as well as his 14 cheques, knowing full well that they were in the custody of the latter also leads to an adverse inference against him.
82. Moreover the Accused has claimed that he had issued his 14 cheques to the Complainant only as security cheques for his loan of Rs.5 Lakhs from him in the year 2011. But when admittedly the original title deed of the Accused at Ex.P13 was handed over to the Complainant for security purpose, then there was no necessity for the Accused to issue any security cheques for the alleged loan of Rs.5 Lakhs, since the document at Ex.P13 itself served the purpose of being a security document.
83. Even otherwise, the law is well settled that there is no difference between the cheques issued towards security or otherwise for the purpose of imputing liability under Sec.138 of the N.I.Act.
84. In this regard the argument canvassed by the learned counsel for the Complainant is correct. Likewise the decision of our Hon'ble High Court in Umaswamy Vs., K.N.Ramanath, reported in LAWS (KAR) 2006 96 is also clearly applicable to the case on hand and as such even on this ground the Accused cannot escape from his liability under the subject cheques.
85. Likewise the decisions relied upon by the learned Counsel for the Complainant cited supra is aptly applicable to the cases on hand and they support the case of the Complainant. As such I have no impediment to come to the conclusion that the case of the Complainant is proved beyond reasonable doubt. On the contrary, the Accused has failed to probabalize his defence, though he has made his best efforts to do so.
86. In view of my aforesaid reasons and discussions, I have no impediment to come to the conclusion that, the Complainant has proved his case beyond shadow of doubt and on the other hand, the defence of the Accused is improbable and in view of the same, I proceed to pass the following:-
ORDER By exercising the power-conferred u/s 255(2) of Cr.P.C., the Accused is hereby convicted of the offence punishable u/s 138 of the Negotiable Instruments Act in C.C.No.25185/2016, C.C.No.25186/2016, C.C.No.25187/2016, C.C.No.27206/2016, C.C.No.27209/2016, C.C.No.6265/2017, C.C. No.6266/2017, C.C.No.8273/2017, C.C.No. 11537/2017 and C.C.No.13700/2017.
He is sentenced to pay a fine of Rs.2,25,000/- (Rupees Two Lakhs and Twenty Five Thousand only) in each of the above ten cases.
If the fine amount is so realized, Rs.22,00,000/- (Rupees Twenty Two Lakhs Only) is ordered to be paid to the Complainant as Compensation and the balance of Rs.50,000/- (Rupees Fifty Thousand only) is ordered to be adjusted towards cost to the State Exchequer.
In default of payment of such compensation, the Accused shall undergo simple imprisonment for 6 (Six) months in respect of each case.
His bail bonds and surety bonds stand discharged.
Issue free copies of the Judgments to the Accused forthwith.
Office is directed to keep the original copies of the judgments in all the ten cases.
(Dictated to the Stenographer, transcribed and print out taken by her, verified, corrected and then pronounced by me in the open Court on this the 20th day of April, 2018).
(SARASWATHI.K.N), XVI ACMM., Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant in C.C.No.25185/2016, C.C.No. 25186/2016, C.C.No.25187/2016, C.C.No. 27206/2016, C.C.No.27209/2016, C.C.No. 6265/2017, C.C.No.6266/2017, C.C.No.8273/2017, C.C.No.11537/2017 and C.C.No.13700/2017:-
PW.1 : M.D.Mukundan;
2. List of documents exhibited on behalf of the Complainant:-
i) In C.C.No.25185/2016:-
Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office Copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment; Ex.C-6 : Office copy of the Rejoinder Notice; Ex.C-7 : Postal Receipt; Ex.C-8 : Postal Acknowledgment; Ex.P-9 : Joint Account Bank Pass Book; Ex.P-10 : Bond; Ex.P-11 : Letter; Ex.P-12 : Registration Certificate; Ex.P-13 : Sale Deed; Ex.P-14 : Acknowledgment; Ex.P-15 : Allotment Advise; Ex.P-16 : Allotment Advise; Ex.P-17 : Business Transfer Agreement. ii) In C.C.No.25186/2016:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office Copy of the Legal Notice; Ex.C-4 : Postal Acknowledgment; Ex.C-5 : Office copy of the Rejoinder Notice; Ex.C-6 : Postal Receipt; Ex.C-7 : Postal Acknowledgment. iii) In C.C.No.25187/2016:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment; Ex.C-6 : Office copy of the Rejoinder Notice; Ex.C-7 : Postal Receipt; Ex.C-8 : Postal Acknowledgment. iv) In C.C.No.27206/2016:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment. v) In C.C.No.27209/2016:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment; vi) In C.C.No.6265/2017:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment. vii) C.C.No.6266/2017:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment. viii) In C.C.No.8273/2017:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment. ix) In C.C.No.11537/2017:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment. x) In C.C.No.13700/2017:- Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 : Postal Receipt; Ex.C-5 : Postal Acknowledgment.
13. List of witness/s examined on behalf of the Accused:-
- Nil -
14. List of documents exhibited on behalf of the Accused:-
- Nil -
(SARASWATHI.K.N), XVI ACMM, Bengaluru City.
20/4/2018 Complainant-
Accused-
For judgment Judgment pronounced in the open court vide separate order.
ORDER By exercising the power-
conferred u/s 255(2) of Cr.P.C., the Accused is hereby convicted of the offence punishable u/s 138 of the Negotiable Instruments Act in C.C.No.25185/2016, C.C.No. 25186/2016, C.C.No.25187/2016, C.C.No.27206/2016, C.C.No. 27209/2016, CC.No.6265/2017, C.C.No.6266/2017, C.C.No. 8273/2017, C.C.No.11537/2017 and C.C.No.13700/2017.
He is sentenced to pay a fine of Rs.2,25,000/- (Rupees Two Lakhs and Twenty Five Thousand only) in each of the above ten case.
If the fine amount is so realized, Rs.22,00,000/- (Rupees Twenty Two Lakhs Only) is ordered to be paid to the Complainant as Compensation and the balance of Rs.50,000/- (Rupees Fifty Thousand only) is ordered to be adjusted towards cost to the State Exchequer.
In default of payment of such compensation, the Accused shall undergo simple imprisonment for 6 (Six) months in respect of each case.
His bail bonds and surety bonds stand discharged.
Issue free copies of the
Judgments to the Accused
forthwith.
Office is directed to keep the
original copies of the judgments in all the ten cases.
(SARASWATHI.K.N), XVI ACMM, Bengaluru City.