Bangalore District Court
Sri Prasad Sr vs Sri. Sk Basavarajan on 7 November, 2015
IN THE COURT OF THE XVIII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BANGALORE
DATED : THIS THE 7TH DAY OF NOVEMBER 2015
PRESENT: LAKSHMINARAYANA BHAT.K., B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
C.C.NO.6935/2013
Complainant: Sri Prasad SR
S/o Late RLS Shetty, 47 Yrs.,
R/a No.178, 2nd Cross, 3rd Main,
AECS Layout,
Sanjaynagar, Bangalore-560 094.
(Represented by Shri.GS Venkat
Subbarao, Advocate)
V/s.
Accused : Sri. SK Basavarajan
S/o Sri Gurusiddaiah, 48 Yrs.,
Member of Legislative Assembly,
R/a BL Gowda Layout,
Chitradurga Town, Chitradurga
District
Also at Room No.148, Legislative
Home, Bangalore-560 01.
(Represented by Sri.KNK, Advocate)
Offence complained of: U/s.138 of N.I.Act
Plea of accused: Pleaded not guilty
Final order Accused is found guilty
Date of order: 7th November 2015
2 CC.No:6935/2013
JUDGMENT
The complaint was filed against the accused for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter in short referred as N.I. Act.).
2. After filing of the complaint, cognizance of the offence was taken. After recording sworn statement in pursuance of summons, presence of the accused was secured and he was enlarged on bail. The substance of accusation was recorded and the accused pleaded not guilty.
3. To prove the complaint averments, the complainant was examined as P.W.1 and has produced documents marked as per Ex.P.1 to Ex.P.11. The statement of the accused under Section 313 of Cr.P.C was recorded. Accused entered his defence and was examined as DW.1. He has not produced documentary evidence. One witness has been examined on behalf of the accused as DW.2.
4. Heard the arguments. The Learned Advocate appearing for the parties have relied up on the following judgments.
For Accused:-
1.AIR 2003 SUPREME COURT 182(C Antony Vs., KG Raghavan Nair) 3 CC.No:6935/2013
2.AIR 2009 SUPREME COURT 1518(M/s. Kumar Exports Vs., M/s.Sharma Carpets) 3.2013(3) KCCR 1940 (Smt. Lakshmi Subramanya Vs., BV Nagesh)
4.Judgment in Criminal Appeal No.261 of 2013(Vijay Vs., Laxman and Anr., (Supreme Court of India) For complainant:-
1.2015 SAR(Criminal) 655 Supreme Court(T. Vasanthakumar Vs., Vijayalakshmi)
5. After analyzing the averments made in the complaint, oral and documentary evidence placed on record and after hearing the arguments, at this stage the points that arise for my determination are:-
1) Whether the complainant has proved he had advanced loan of Rs.1,00,00,000/- to the accused and Ex.P1 cheque issued by the accused in discharge of the part payment of the aforesaid loan amount was dishonoured and even after service of notice, the accused had failed to make repayment and thereby he is guilty of the offence punishable under Section 138 of N.I.Act?
2) What order?
6. My findings on the aforesaid points are as under:-
POINT NO.1 : In the Affirmative, POINT NO.2 : As per final order, for the following:-4 CC.No:6935/2013
REASONS
7. POINT NO.1:- As per the complaint averments, the accused was alleged to be having close acquaintance with the complainant for the last several years. On account of his close proximity, he had approached the complainant for financial assistance of Rs.1,00,00,000/- from the complainant to discharge his legal necessity. He had agreed to repay the said loan amount within a short time. The complainant submitted in pursuance of the request of the accused, on 21.11.2010 he had advanced Rs.50,00,000/- and on 28.06.2012 advanced the balance amount of Rs.50,00,000/- to the accused by cash. It is further claimed after receiving total amount of Rs.1,00,00,000/- from the complainant on 28.6.2012 the accused had executed a receipt and acknowledgement in favour of the complainant. He had agreed to repay the said amount with interest there on 18% p.a. on or before 10.07.2012. It is further stated after borrowing the loan, the accused had failed to make repayment as promised by him. After persistent demand made by the complainant, accused alleged to have issued a cheque for Rs.54,50,000/- dtd., 05.12.2012 towards part payment of the loan amount drawn on State Bank of Mysore, Vidhana Soudha Branch, Bangalore. He has also promised to pay the balance amount within a short time. The complainant claimed to have presented the said cheque to the bank for realisation of the amount, but as per memo dtd., 14.12.2012 it was 5 CC.No:6935/2013 returned unpaid with an endorsement "Insufficient Funds". The complainant had sent demand notice to the accused dtd., 24.12.2012 in compliance to Sec.138(b) of NI Act. After service of the notice, the accused has neither made payment nor sent any reply. The complainant in his affidavit filed in lieu of examination-in-chief deposed as per the averments made in the complaint.
8. The accused in his defence evidence admitted in the month of July 2012, he had went to the house of the complainant along with DW.2 Santhosh KR in order to borrow loan of Rs.25,00,000/-. DW.2 Santhosh alleged to have introduced the accused to the complainant. The complainant in order to advance the loan, asked the accused to deposit two blank signed cheques and one blank signed stamp paper. Complainant had assured to advance the loan within 15 days. The accused in his oral evidence has admitted signature appearing in Ex.P1 cheque and Ex.P11 receipt. According to the accused, the contents of the Ex.P1 cheque was not filled in his handwriting. He further alleged at the time he had affixed his signature to Ex.P11 Stamp Paper, the contents of the document were not filled. Accused claimed he had handed over two blank signed cheques to DW.2 in order to hand over those documents to the complainant. Accused has specifically disputed the complainant had advanced loan of Rs.1,00,00,000/- or in discharge of the said debt the accused had issued Ex.P1 cheque. According to the 6 CC.No:6935/2013 defence of the accused, after obtaining the blank signed cheque and stamp paper, the complainant had failed to advance loan of Rs.25,00,000/-. He had failed to return blank signed cheque and stamp paper even after repeated demands made by DW.2. Accused has submitted he has repeatedly demanded with DW.2 Santhosh to obtain back those documents from the complainant. For the aforesaid reasons the accused has disputed Ex.P1 cheque was issued in favour of the complainant in discharge of any debt or other liability. For the aforesaid reasons he had prayed for dismissal of the complaint.
9.Before adverting to the merits of the case and evidence on record, it is appropriate to mention, the accused has admitted his signature appearing in Ex.P1 cheque and Ex.P11 receipt and acknowledgement. Ex.P1 cheque pertains to the bank account of the accused is also not disputed. But as per the defence of the accused at the time he had affixed his signature to Ex.P1 cheque and Ex.P11 stamp paper the contents of the documents were not filled. He further alleged the complainant has filled the contents of Ex.P1 cheque and Ex.P11 stamp paper in order to suit the circumstances of the case to put forward a false contention and filed complaint for wrongful gain. The accused has specifically admitted along with DW.2 he had approached the complainant demanding hand loan of Rs.25,00,000/-. It is also admitted in connection with the said loan transaction he had deposited Ex.P1 blank signed cheque and one blank signed stamp paper as per Ex.P11 to 7 CC.No:6935/2013 the custody of the complainant. Therefore, in respect of a financial transaction the complainant had received Ex.P1 cheque and Ex.P11 stamp paper from the accused is not in dispute. In view of the aforesaid defence, it is the burden of the accused to prove consideration of Rs.1,00,00,000/- was not passed from the complainant. It is further his burden to prove Ex.P1 cheque was not issued towards the part payment of the loan amount of Rs.1,00,00,000/- alleged to have been advanced by the complainant. The accused in his oral evidence or during cross- examination of the complainant has not specifically stated the purpose for which he had demanded loan of Rs.25,00,000/- from the complainant and date on which he went to the house of the complainant in connection with the said loan transaction. The complainant in proof of advancement of Rs.50,00,000/- hand loan to the accused on 21.11.2010 and the balance amount of Rs.50,00,000/- on 28.06.2012 has not produced any documentary evidence. Ex.P11 document is titled as receipt and acknowledgement and as per the recitals accused had specifically admitted borrowed Rs.50,00,000/- from the complainant by cash on 21.11.2010 and balance amount of Rs.50,00,000/- on 28.06.2012. As per the complaint averments and contents of Ex.P11 documentary evidence, the loan amount was advanced in favour of the accused by cash naturally there is no documentary evidence in support of the transaction. According to the complainant, the accused had assured to repay the loan amount with interest there on at 18 % p.a. on 8 CC.No:6935/2013 before 10.07.2012. Both parties to the case have not placed any evidence the reasons behind accused had executed Ex.P11 document on 28.6.2012 even though he had assured to make repayment on 10.07.2012. It appears since the accused had already borrowed the loan and since he had failed to make repayment as promised by him Ex.P11 document appears to have been executed. Secondly, even though accused assured to make repayment of the loan amount before 10.07.2012 Ex.P1 cheque is dtd., 5.12.2012 and in Ex.P11 document there is no reference regarding issuance of Ex.P1 cheque. That on considering the stamp paper purchased on 28.06.2012 we can draw an inference that it was executed on and after 28.06.2012. The accused has not disputed his three signatures appearing in Ex.P11 stamp paper.
10.As per the contents of Ex.P11 E-stamp was purchased by the accused Basavarajan SK and he was shown as first party and complainant is shown as second party. The accused had paid the stamp duty of Rs.200/- and description of the document is shown as agreement. As per the recitals of Ex.P11 there is no reference regarding issuance of cheque in favour of the complainant towards repayment of the loan amount. Now the question arises at this juncture for the determination of the Court is whether at the time the accused had affixed his signature to Ex.P11 document, it was filled or it was blank. It is not in dispute accused was an Ex.MLA of Chitradurga Assembly Constituency. The accused during his cross-examination has specifically 9 CC.No:6935/2013 admitted his fathers' name as Karisiddaiah.
The contents of Ex.P11 document print out taken through the Computer. As per the contents originally name of the father of the accused was shown as Kariyappa. It appears at the time of affixing the signature to the document, the accused has noticed his fathers' name has been wrongfully mentioned and has made correction in the document fathers' name as Karisiddappa and affixed his signature to the correction as well as in the bottom of the page No.1 and also in page No.2. The evidence of DW.1 and 2 that the complainant had requested to affix signature in page No.1 and thereafter he has explained that the contents of the documents will be written on the first page and thereafter obtained signature on bottom of page No.1 is unbelievable and unacceptable. The accused and DW.2 in order to overcome the situation having made an initial (small signature) in Page No.1 marked as per Ex.P11b has forwarded aforesaid explanation to substantiate his contention that at the time he had affixed his signature the document was blank. That on perusal of Ex.P11 documentary evidence, signature of the accused, complainant and two witnesses, we can make out witness may lie, but not the circumstances is applicable to the aforesaid document. In the above circumstance, Court can arrive to the safe conclusion that after reading the contents of Ex.P11 receipt and acknowledgement, accused had affixed his signature and his defence that he had handed over blank signed stamp paper to the complainant is utterly false and unbelievable. 10 CC.No:6935/2013 More over as on the date of transaction and execution of Ex.P11 receipt and acknowledgement, the accused was the sitting MLA and his evidence to the extent that he had handed over two blank signed cheques and one blank signed stamp paper is unworthy of credit.
11.During the cross-examination of PW.1, the learned advocate appearing for the accused had disputed the financial capacity of the complainant to advance loan of Rs.1,00,00,000/- to the accused by cash. Ex.P9 is the copy of Income Tax return Form ITR_V for the assessment year 2013-14. As per the document for the financial year 2012-13 gross total income of the complainant was Rs.11,26,081/- and he had paid Tax of Rs.1,46,182/-. From the aforesaid document we can infer the complainant had not disclosed advancement of Rs.50,00,000/- hand loan to the accused on 21.11.2010. The present complaint was filed on 24.01.2013. As per Ex.P9 the complainant had filed his returns to the Income Tax Department on 28.03.2014 subsequent to filing of the complaint. Along with Ex.P9 returns the complainant has also produced Ex.P10 copy of the statement of income and balance sheet, and Loans and Advances during the period 1.4.2012 to 31.03.2013. As per Ex.P10 in Loans and Advances the complainant has disclosed advancement of Rs.50,00,000/- to SK Basavarajan and another loan of Rs.4,18,050/-. Therefore, from the evidence placed on record it appears the complainant didn't made payment of income tax on the complaint alleged loan amount of Rs.50,00,000/- for the assessment year 2011-12 and 11 CC.No:6935/2013 2012-13. The complainant has also not produced any documentary evidence to prove his financial capacity and how he had mobilized huge amount of Rs.50,00,000/- each as on 21.11.2010 and 28.06.2012. The complainant could have produced his bank account extract to prove his financial capacity in order to show as on the date of transaction, he was maintaining substantial bank balance. During the cross-examination of PW.1 it is elicited and the complainant has admitted he had with drawn a portion of the amount from his bank account in order to advance loan in favour of the accused. In the above circumstances, nothing prevented the complainant to produce his bank account extract or pass book. Even though the accused has disputed financial capacity of the complainant, the accused and DW.2 went to the house of the complainant demanding loan of 25,00,000/- itself shows the complainant is financially capable to advance the said amount. The complainant has not paid the income tax on the alleged loan amount of Rs.1,00,00,000/- is a matter to be decided by the concerned Income Tax Department and recover the tax along with penalty in accordance with law. The declaration of advancement of loan and evidence deposed by the complainant regarding the said transaction is admissible evidence and if the accused is so interested in the State revenue he is at liberty to inform the concerned Income tax Authority. By mere forwarding a defence regarding financial capacity of the complainant and also non-payment of tax by the complainant, accused is not eligible to seek his acquittal on this sole ground from the accusation 12 CC.No:6935/2013 made against him. In the case on hand by producing Ex.P11 documentary evidence complainant has proved advancement of Rs.1,00,00,000/- hand loan to the accused. The evidence and other attending circumstances shows the accused in discharge of the aforesaid debt towards part payment had issued Ex.P1 cheque in favour of the complainant.
12.The accused in his defence evidence and during cross- examination of PW.1 contended he had handed over two blank signed cheques in connection with the aforesaid loan transaction. In order to substantiate the claim, the accused could have produced his cheque book record slip or bank account extract. Evidence of DW.2 is in no way helpful to the defence of the accused to disprove the complaint alleged transaction. DW.2 has appeared before the Court in order to help the case of the accused and has deposed false evidence. The allegation regarding handing over of two blank signed cheques and blank signed stamp paper is not made out from the evidence of DW.1. The accused being the member of Legislative Constituency had borrowed loan from the complainant without giving any document in favour of the complainant is probable. In order to prove the complainant had filled the contents of Ex.P1 cheque, accused had not produced any material or elicited any damaging admission during the cross-examination of PW.1. The accused got filled the contents of Ex.P1 cheque through any others is also cannot be totally ruled out. In the above circumstances, contents of 13 CC.No:6935/2013 Ex.P1 cheque, such as signature and remaining entries was filled in different ink and handwriting is not a ground to suspect the conduct of the complainant that he has filled the instrument. The learned advocate appearing for the accused vehemently argued the complainant has not forwarded any explanation why Ex.P1 cheque amount includes excess amount of Rs.4,50,000/-. As per Ex.P11 the accused had borrowed loan of Rs.1,00,00,000/- from the complainant is proved and also he had assured to repay the said amount with interest thereon at 18% p.a. Therefore, towards payment of interest there is every possibility the accused had issued Ex.P1 cheque for Rs.54,50,000/-. The complainant has admitted he has filed a suit against the accused for recovery of Rs.1,00,00,000/- loan amount and the accused has also not disputed this fact. In the complaint averments and in Ex.P3 statutory demand notice complainant has claimed the accused had issued Ex.P1 cheque towards part repayment of the loan.
13.As per Ex.P2 Bank Memo Ex.P1 cheque returned with an endorsement "Funds Insufficient". Even though accused was aware Ex.P1 cheque was in the custody of the complainant from June 2012 till presentation of Ex.P1 cheque before the bank by the complainant, the accused has not given any intimation to the bank for stop payment. In the event the complainant had failed to advance the loan of Rs.25,00,000/- as contended by the accused, he could have obtained back the blank signed cheque and blank signed stamp paper from the 14 CC.No:6935/2013 complainant. Even after complainant has failed to return those documents, accused has not made any sincere efforts to obtain back those documents by issuing any demand notice to the complainant. Even till this day accused has not initiated any legal action against the complainant for the alleged misuse of Ex.P1 cheque and Ex.P11 blank signed stamp paper. The accused has also not deposed the details such as the serial number of another blank signed cheque alleged to be in the custody of the complainant. He has further not deposed any evidence whether he had given any instructions to the bank for stop payment in the event the said cheque is presented for encashment. The accused has not taken any precautionary measures to obtain back Ex.P1 cheque from the complainant is one of the ground to hold it was within the knowledge of the accused that he had issued the said cheque in favour of the complainant in discharge of the debt.
14.The accused in his defence evidence has put forwarded other contention regarding non service of Ex.P3 statutory demand notice sent on behalf of the complainant. As per Ex.P4 to P6 the complainant had sent notice to the accused through registered post and also through courier service. Ex.P7 and P8 are the postal acknowledgements received by the complainant after service of the letters to the addressee. In Ex.P7 one Bijjalla has received the notice and Ex.P8 from the initial it is not possible to ascertain the name of the signatory. But the short signature appearing in Ex.P8 is similar to the signature of accused appearing in 15 CC.No:6935/2013 Ex.P1 cheque and Ex.P11 receipt. During the cross-examination, the accused has specifically admitted Bijjala is his son. Therefore, from Ex.P7 and P8 documentary evidence, unless the contrary is proved Court can hold the demand notice sent on behalf of the complainant as per Ex.P3 was received by the son of the accused as per Ex.P7 and personally received by accused as per Ex.P8 postal acknowledgement. As per Sec.27 of General Clauses Act there is a presumption in favour of the complainant in respect of letter sent through registered post. In the above circumstances, it is the burden of the accused to prove non service of notice and to rebut the presumption appearing in favour of the complainant by placing evidence. The accused has not made any efforts to rebut the presumption as required under Law. In this regard I have relied up on the Judgment of Hon'ble Apex Court reported in 2007 AIR SCW 3578 in C.C.Alavi Haji V/s. Palapetty Muhammed and another. As per Para No:17 of the said Judgment, court held.
"It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 16 CC.No:6935/2013
15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C.Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case, if the giving of notice in the context of Clause(b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act".
15.As per Sec.139 of NI Act there is a presumption in favour of the complainant that unless the contrary is proved Court shall presume that the cheque had been issued in discharge of any debt or liability. Therefore, it is the burden of the accused to rebut the presumption. During the cross-examination of the complainant and in his defence the accused had miserably failed to prove that the cheque was not issued in discharge of any debt or other liability. In this regard I have also relied 17 CC.No:6935/2013 up on Judgment of Hon'ble Apex Court reported in AIR 2010 Supreme Court 1898 in Rangappa V/s. Mohan case. In this Judgment the Hon'ble Apex Court has held "The presemption mandeated by S.139 of the Act does indeed include the existence of legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested".
In the case on hand during cross-examination of the complainant and in his defence evidence, the accused has failed to take probable defence and place prima facie evidence to prove the said defence. The defence put forwarded by the accused that he had handed over two blank signed cheques and one blank signed paper to the complainant is utterly false and unbelievable. The accused being an sitting MLA during the alleged transaction and he didn't act as a prudent man and has put forwarded such a defence in his evidence is unbelievable. The facts of the case on hand and the facts of the Judgment relied on by the learned advocate for the accused is not applicable to the case on hand. Therefore, for the aforesaid reasons my findings on Point No.1 is in the affirmative.
16.POINT NO.2:- In view of my findings on Point No.1, the accused is liable to be convicted for the offence punishable under Section 138 of N.I. Act. Accordingly, I proceed to pass the following:- 18 CC.No:6935/2013
ORDER Acting under Section 255 (2) of Cr.P.C, accused is convicted for the offence punishable under Section 138 of Negotiable Instruments Act 1881. He is sentenced to pay fine of Rs.55,00,000/- (Rupees fiftyfive Lakhs Only) and in default shall undergo simple imprisonment for one year.
Acting under Section 357 (1) (b) of Cr.P.C, out of the fine amount the complainant is entitled for Rs.54,50,000/- (Rupees Fiftyfour lakhs fifty thousand only) as compensation.
Acting under Section 357 (1) (a) of Cr.P.C, the balance amount of Rs.50,000/- (Rupees fifty thousand only) is defrayed to the State for the expenses incurred in the prosecution. (Dictated to the Stenographer, transcribed by him, corrected, revised and signed then pronounced by me in the open court on this the 7th day of November 2015).
(LAKSHMINARAYANA BHAT.K) XVIII A.C.M.M., BANGALORE.19 CC.No:6935/2013
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Sri. Prasad
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P.1 : Cheque No:896133 dated 5.12.2012 for
Rs.54,50,000/-.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Office copy of demand notice.
Ex.P.4 : Postal receipt.
Ex.P.5 and 6 : Courier Receipts
Ex.P7 and 8 : Postal acknowledgement due
Ex.P.9 : Income Tax Returns Form ITR-V
For the year 2013-14.
Ex.P10 : Statement of Income
Ex.P11 : Copy of Receipt and Acknowledgement.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
DW.1 : Sri SK Basavarajan
DW.2 : Sri Santhosh SR
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: -
NIL
(LAKSHMINARAYANA BHAT.K)
XVIII A.C.M.M., BANGALORE.