Bangalore District Court
S/O Late. Kapanaiah vs S/O N.A. Venkatappa on 29 April, 2022
CC No: 3128/2018
KABC020160602018
IN THE COURT OF THE VI ADDL. SMALL CAUSES
JUDGE & XXXI ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY
C.C. NO:3128/2018
Present: Smt. Shainey K.M., BAL.,LL.B.,
6th Addl. Judge, Court of Small
Causes and ACMM, Bengaluru.
Dated: On this 29th day of April, 2022.
JUDGMENT U/S 355 OF CR.P.C. 1973.
1. Sl.No. of the Case : C.C.No.3128 of 2018
2. The date of : 06.07.2018
commission of
the offence
3. Name of the : K. Ramakrishna,
Complainant
S/o Late. Kapanaiah,
Aged about 56 years,
Residing at No.951,
3rd Cross, 3rd Phase,
BSK III Stage, Kathriguppe,
SCCH-2 2 C.C.3128/2018
Bangalore-560085.
(By Sri. B.M. Narayana, Advocate)
4. Name of the : V. Lakshman,
Accused
S/o N.A. Venkatappa,
Aged about 45 years,
Residing at No.272,
Ground Floor,
Sri. Rajarajeshwari Nilaya,
4th Main 'D' Main Road,
6th Cross, Sri Maruthi
Layout,
Vasanthapura Ward 197,
Subramanyapura Post,
Bangalore-560 061.
(By Sri. Venkatram, Advocate)
5. The offence : Under Section 138 of the
complained of or Negotiable Instrument
proves Act.
6. Plea of the accused : Pleaded not guilty.
and his examination
7. Final Order : Accused is acquitted
8. Date of such order for : 29.04.2022.
the following
SCCH-2 3 C.C.3128/2018
: JUDGMENT :
This is a complaint under Sec. 200 of Cr. P. C. for the offence punishable under Section 138 of the Negotiable Instruments Act.
02. The essence of the complainant's case is:
2.1 The complainant is a permanent resident of Bengaluru. The accused is known to the complainant since 15 years. It is contended that, accused used to borrow loan from the complainant from time to time.
It is contended that, from 30.04.2012 to 15.09.2016, the complainant has lend amount in total a sum of Rs.18,00,000/- to accused by way of cheques as well as cash as per the details given herein below.
Sl. Particulars Date Amount
No.
1. CH.No.176747 30.04.2012 Rs.1,00,000/-
2. CH.No.17143 22.10.2013 Rs. 50,000/-
SCCH-2 4 C.C.3128/2018
3. CH.No.27949 23.04.2014 Rs.1,00,000/-
4. CH.No.290737 11.06.2014 Rs.1,00,000/-
5. CH.No.27946 20.06.2014 Rs.2,00,000/-
6. CH.No.31654 12.08.2014 Rs.1,00,000/-
7. CH.No.31668 10.09.2014 Rs. 85,000/-
8. CH.No.31673 17.09.2014 Rs.1,00,000/-
9. CH.No.34056 15.10.2014 Rs. 50,000/-
10. CH.No.34057 15.10.2014 Rs. 50,000/-
11. CH.No.39468 24.01.2014 Rs.2,50,000/-
12. CH.No.33915 10.07.2014 Rs.1,00,000/-
13. CH.No.10017 15.09.2016 Rs.1,80,000/-
14. Cash 25.03.2015 Rs.3,35,000/-
Total Rs.18,00,000
/-
2.2. It is contended that, accused has assured the complainant at the time of availing loan that he would repay the loan amount within one year. Thereafter accused did not chosen to repay the said loan SCCH-2 5 C.C.3128/2018 amount. The complainant had approached and demanded the accused for repayment of Rs.18,00,000/- and then the accused has issued cheque bearing No. 969285 dated: 27.04.2018 for Rs. 9,00,000/- and cheque bearing No.969289 dated:27.04.2018 for Rs. 9,00,000/- drawn on SBI, ISRO Layout Branch, towards repayment of debt. 2.3. On presentation of above said cheques, through his banker by the complainant, cheques were returned with an endorsement dated: 01.05.2018 stating "Funds Insufficient". Thereafter, the complainant got issued legal notice on 31.05.2018 through RPAD, as contemplated under Section 138 (b) of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the NI Act"), to the accused to make payment of the cheque amount. The statutory notice was duly served on the accused on 01.06.2018. SCCH-2 6 C.C.3128/2018 Despite service of notice regarding dishonour of cheque, accused failed to pay the amount covered under the cheque within statutory period of notice of demand. Hence, this complaint.
03. Cognizance of the offence was taken on presentation of the private complaint and ordered to register the criminal case, as there were prima facie materials to proceed against the accused.
04. On being served the summons, the accused appeared through his counsel and released on bail. Plea of the accused was recorded by explaining the substances of accusation. Accused pleaded not guilty and claims to be tried. The Accused has filed application under Section 145 (2) of N.I Act, seeking permission to cross-examine Complainant and to proceed in accordance with Law. Accordingly, the SCCH-2 7 C.C.3128/2018 application was allowed and the Accused was permitted to cross-examine Complainant/Pw-1.
05. In proof his contention, complainant got examined himself as Pw:1 by filing affidavit in lieu of examination in chief and exhibits were marked as Exs.P.1 to P-9. One witness namely Swamygowda was examined as P.w.2. Accused has cross-examined P.w.1 and 2 in detail.
06. After closure of complainant's side evidence, statement of the accused as required U/Sec. 313 of Cr.P.C. has been recorded and explained incriminating evidence appearing against him. The accused has denied the contents of statement as false.
07. Accused has examined himself as D.w.1 and exhibits were marked as Ex.D-1 to 5 in defence SCCH-2 8 C.C.3128/2018 evidence. Counsel for the complainant has cross- examined D.w.1.
08. Heard counsel for the complainant and accused. Learned counsel for accused relied on decision of Hon'ble Apex Court reported in 2011 Crl.LJ.552 (Amzad Pasha Vs. H.N. Lakshmana), 2015 (1) SCC 99 (K.Subramani Vs. K. Dhamodhara Naidu), Crl.Appeal No.636 of 2019 of Hon'ble Supreme Court of India in a case between Basalingappa Vs. Mudibasappa. Perused the materials placed on record. Now, following points that arise for my consideration;
POINTS
1. Whether Complainant proves beyond all reasonable doubt that Accused has committed an offence punishable under Section 138 of Negotiable Instruments Act?
SCCH-2 9 C.C.3128/2018
2. Whether accused has rebutted the presumption as contemplated u/sec 139 of N.I Act?
3. What order?
09. My findings to the above points are:
Point No.1 : In the Negative.
Point no:2 : In the Affirmative. Point No.3 : As per the final order for the following;
REASONS
10. Point No.1 & 2:- In proof of his contention, the complainant was examined as Pw:1, who filed affidavit evidence in lieu of examination in chief. In chief examination affidavit Pw:1 has deposed in consonance with the averments of the complaint. In chief examination affidavit, Pw:1 has deposed that, accused has borrowed amount of Rs.18,00,000/- during the period between 30.04.2012 and SCCH-2 10 C.C.3128/2018 15.09.2016. The first date of loan transaction is 30.04.2012 and last date of loan transaction is 15.09.2016.
11. P.W.1 deposed that, he paid aforesaid amount to accused through cheque as well as cash on different dates as stated above. P.W.1 further deposed that, accused has issued two cheques bearing No.969285 and 969287 for a sum of Rs.9,00,000/- each drawn on SBI, ISRO Layout Branch in favour of the complainant, which were marked as Ex.P.1 and 2 respectively.
12. Accordingly, PW-1 has presented the said cheques for encashment and those cheques were returned unpaid as "Funds Insufficient" on 01.05.2018, as per the Bank Memo produced at Ex.P.3 and 4. Hence, he got issued legal notices through RPAD, which is produced at Ex.P.5 and the postal receipt was marked as Ex.P.5(a). The notice issued SCCH-2 11 C.C.3128/2018 through RPAD is duly served on accused as per Ex.P.6
-the track consignment issued by the concerned postal department.
13. To prove the alleged payment of loan amount to accused on different dates as stated above through cheques, the complainant has produced statement of account extract for the period from 01.08.2016 to 01.10.2016 in respect of the Bangalore City Co- Operative Bank Ltd., Avalahalli Branch at Ex.P.7 and statement of account extracts in respect of Sree. Charan Souhardha Co-Operative Bank Ltd., for the period from 01.01.2012 to 31.12.2016 at Ex.P.8 and 9.
14. To substantiate his contention and to prove the source of money to lend amount, the complainant has examined a witness namely Swamy Gowda as P.W.2. This witness has filed affidavit in lieu of examination- in-chief and deposed that, complainant has taken a SCCH-2 12 C.C.3128/2018 sum of Rs.2,00,000/- from him on 25.03.2015 and said amount was paid to the accused later. The financial capacity of P.W.2 to pay Rs. 2,00,000/- as stated in evidence is seriously challenged by the accused and counsel for accused has cross-examined the witness in detail in this regard. No positive evidence has been placed on record to believe that, P.w.2 has been retired from the service in the month of June-2014 and he received retirement benefit in above said period. Added to this, P.W.2 has not even produced his bank pass book or other document to prove the receipt of alleged retirement benefit in the year 2014. So, it is unsafe to believe that complainant has received a sum of Rs 2 lakhs from this witness prior to lend amount to accused.
15. It is the specific plea of the accused that, he did not receive the cash as mentioned in Ex.P.7 to 9 as SCCH-2 13 C.C.3128/2018 loan as contended by the complainant. It is the specific plea of the accused that, he and one Dilip have been working in Paper Agency of the complainant herein as his employees. The legal notice issued by the complainant not at all served on him. The suggestion made by the counsel for the complainant in the cross-examination of D.W.1 itself clearly reveals that, accused herein was working with complainant in the news agency. The suggestion made to Dw:1 is reproduced here under:
"£Á£ÀÄ ¦üAiÀiÁð¢AiÀÄ £ÀÆå¸ï Keɤì AiÀÄ°è PÉ®¸À ªÀiÁqÀÄwÛgÀĪÀÅzÀjAzÀ ¥ÀgÀ¸ÀàgÀ ¥ÀjZÀAiÀÄ«zÉ CAzÀgÉ ¤d"
16. It is specific plea of accused that, the payment mentioned in Ex.P.7 to 9 have been paid to the accused through cheques are only for the purpose of SCCH-2 14 C.C.3128/2018 making payment to Kannada Prabha Agency on behalf of S.L.V. Agency belonging to complainant.
17. The accused has opened an account with Sree Charan Souhardha Co-Operative Bank Ltd., on the instruction of the complainant to facilitate his transaction. Accused herein was introduced to aforesaid Co-Operative Bank through the complainant herein and it is not in dispute. D.W.1 deposed that, complainant has collected 4 blank signed cheques and blank signed demand promissory note from the accused when he was working under the complainant. In the year 2017, the accused has opened his own paper agency and thereupon the complainant has asked accused to hand over his agency to him. The complainant did not like running a separate paper agency independently by the accused and in order to SCCH-2 15 C.C.3128/2018 take revenge he has misused the cheques already given by the accused and filed the false case.
18. Accused has produced Ex.D.1 to 4- The pass book, S.L.V. News Agency invoices 3 in numbers and attested copy of accused's Aadhaar Card to prove his defence. D.W.1 deposed in evidence that, the amount paid by the complainant through cheque have been repaid by the accused through cheque to Kannada Prabha Agency on behalf of S.L.V. Agency belonging to complainant. To prove his contention, accused relied on entries made in the pass book i.e., Ex.D.1.
19. Perusal of Ex.D.1 discloses that, Rs.1,90,674/-, Rs.2,04,088/-, Rs.2,18,305, Rs.2,68,581, Rs.2,68,581, Rs.5,100/-, Rs.2,85,319/- were paid through cheques to Kannada Prabha Publication Ltd., on 17.10.2014, 12.11.2014, 12.12.2014, 13.01.2015, 03.03.2015, 18.03.2015 and 18.03.2015. Apart from the SCCH-2 16 C.C.3128/2018 documentary evidence accused has adduced oral evidence and also cross-examined P.W.1 in detail in this regard. It is admitted fact that, complainant herein is a dealer of S.L.V. Agency, Kannada Prabha Agency and R.K. News Agency.
20. The oral and documentary evidence adduced by the accused clearly discloses that, he has paid amount to Kannada Prabha Publications Ltd owned by complainant on aforesaid dates as mentioned in Ex.D.1. So the burden shifts back to complainant to establish that, the amount mentioned in Ex.D.1 is not transferred by accused to his bank account. Firstly, to discharge the reverse burden, the complainant has not produced his bank statement to establish that, he did not receive the amount mentioned in Ex.D.1. This is fatal to complainant's case.
SCCH-2 17 C.C.3128/2018
21. Secondly, there is no positive evidence placed on record by complainant to show that, the payments made by the accused as shown in Ex.D.1 has been paid to some other person or some other paper agency. No valid explanation is given by complainant in this regard.
22. On perusal of oral and documentary evidence placed by the complainant, it reveals that the complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with regard to taking cognizance of the offence punishable under Section 138 of N I Act.
23. The accused has denied the existence of liability to pay the amount mentioned in cheque. In the present nature of cases the court has to determine SCCH-2 18 C.C.3128/2018 whether version of complainant is true or the theory put-forth by the accused is true?.
24. At the outset, an essential ingredient of Section 138 of N.I Act is that the cheque in question must have been issued towards legally enforceable debt. Under Section 118 of the Act, a presumption shall be raised regarding consideration, date, transfer, endorsement and regarding holder in the case of negotiable instruments. Even under Section 139 of the Act, a rebuttable presumption shall be raised that, the cheque in question was issued regarding discharge of legally enforceable debt. These presumptions are mandatory provisions that are required to be raised in case of negotiable instruments.
25. Thirdly, the material placed on record clearly discloses that, cheque in question was issued towards SCCH-2 19 C.C.3128/2018 repayment of time barred liability. In the complaint, it is averred that, accused had agreed to repay the loan within a year but he did not repay the loan within the agreed period and he voluntarily issued Ex.P.1 and 2 cheques dated: 27.04.2018 in favour of complainant. Perusal of materials placed on records including the pleadings and evidence of complainant discloses that, loan transaction in dispute between the parties was took place on 30.04.2012 for the first time. The last date of loan transaction took place between the parties was on 15.09.2016 in respect of a sum of Rs.1,80,000/-.
26. According to P.W.1 cheques in question were issued by the accused in the month of April-2018. On the other hand accused contended that, he issued cheques in dispute including blank on demand pro- SCCH-2 20 C.C.3128/2018 note in favour of complainant when he was working under the complainant in his paper agency.
27. The materials placed on record clearly discloses that, loan transaction in dispute has been started between the parties to the case from 30.04.2012. P.W.1 deposed that, in the year 2014, 2015 and also in the year 2016 complainant has paid money to accused on various dates. The cheques in question were issued in the month of April-2018 particularly after expiry of 3 years in respect of 13 money transactions took place between 2012 and 2015, except the money transaction dated:15.09.2016 for a sum of Rs.1,80,000/-. Moreover, it is not the case of the complainant that, accused issued the cheque in question towards the repayment of amount of Rs.1,80,000/- in respect of last loan transaction which was allegedly took place on 15.09.2016. According to SCCH-2 21 C.C.3128/2018 the complainant cheque in question was issued towards payment of debt in respect of all loan transactions allegedly took place in the period between 30.04.2012 and 15.09.2016.
28. The complainant has presented the cheques in question to bank same were returned unpaid on 01.05.2018. The materials placed on record clearly discloses that, more than 3 years after the alleged loan transaction, Ex.P.1 and 2 cheques were issued by the accused.
29. The only question that arises for consideration in this case is whether the accused who issued the cheque in question in discharge of time barred debt is liable U/Sec.138 of N.I. Act.
30. According to P.W.1 the loan amount of Rs.1,00,000/- was paid to accused for the first time in the year 2012. According to complainant, again he SCCH-2 22 C.C.3128/2018 paid loan to accused in the year 2013, 2014, 2015 and 2016 on different dates. The cheques in question were issued in the month of April-2018. Thus, by the time the cheque was issued, the debt was barred by limitation since there is no valid acknowledgment of the liability within the period of limitation.
31. The promise made by the accused to repay the time barred debt would come within the purview of Sec.25 (3) of Indian Contract Act. P.W.1 deposed in cross-examination that, he had lent money to the accused between 2012 and 2016 without obtaining any documents from the accused each and every time of alleged loan transaction for the purpose of security.
32. No doubt, the promise to pay a time barred cheque (debt) is valid and enforceable, if it is made in writing and signed by the person to be charged SCCH-2 23 C.C.3128/2018 therewith. But it is clear from Sec.138 of N.I. Act that, in order to attract the penal provisions in bouncing of a cheque in chapter 17, it is essential that the dishonoured cheque should have been issued in discharge, wholly or in part or any debt or other liability of the drawer of the payee.
33. The explanation to Sec.138 of N.I. Act defines the expression debt or other liability as a legally enforceable debt or other liability. The explanation to Sec.138 of N.I. Act reads as under:
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
34. Thus, Sec.138 of N.I. Act is attracted only if the cheque is issued for the discharge of a legally enforceable debt or other liability. In this case, admittedly, the cheques in question were issued in SCCH-2 24 C.C.3128/2018 discharge of a time barred debt or liability. It cannot be said that a time barred debt is a legally enforceable debt.
35. In this connection, it is also relevant to note the decision of Hon'ble High Court of Andhra Pradesh reported in Girdhari Lal Rathi Vs. P.T.B. Ramanujachari, 1997 (2) Crimes 658. It has been held in that case that, if a cheque is issued for a time barred debt and it is dishonoured, the accused cannot be convicted U/Sec.138 of N.I. Act simply on the ground that, the debt was legally recoverable.
36. No material is placed on record to show that, accused has paid interest on various dates and thereby the loan agreement has not become time barred. No material is placed on record to show that, the accused has executed any AOD between 2012 and 2016 and thereby loan liability has not become SCCH-2 25 C.C.3128/2018 time barred. It is significant to notice that, not even a legal notice also been issued to the accused calling upon him to repay the loan amount mentioned in the complaint within 3 years.
37. As noticed above, since there is no acknowledgment of the debt before expiry of 3 years from the date of loan, the debt is not legally enforceable at the time of issuance of cheque.
38. In the case on hand, even if the averments of complaint and evidence of complainant are accepted at their face value, dishonoured cheque was issued on in the month of April-2018 to discharge the debt, which had become due on 26.03.2018 in respect of 13 transactions, except the transaction dated:15.09.2016. Therefore, this court holds that dishonoured cheque is issued to discharge of time barred debt or liability. Having regarded to question SCCH-2 26 C.C.3128/2018 of limitation the complainant has failed to prove the case beyond reasonable doubt.
39. Under these circumstances, this court has come to the conclusion that, a time barred debt and cheque issued for clearance of time barred debt cannot be entertained. My reason is support by the decision of Hon'ble High Court of Karnataka reported in Cr.L.Appeal No.473/2019 in a case between Purandara Rai Vs. Naveendra Naik dated:10.02.2021, Crl.Appeal No.545/2010 in a case between K.V. Subba Reddy Vs. N. Raghavendra Reddy dated:28.02.2014. In the circumstance, I answer the above point No.1 in the Negative and Point No.2 in the Affirmative.
40. Point No.3: In view of the finding on the point No.1 and 2, I proceed to pass following: SCCH-2 27 C.C.3128/2018
:: ORDER ::
Acting under Section 255(1) of Cr.P.C. the accused is hereby acquitted for the offence punishable under Section 138 of Negotiable Instruments Act.
The bail bond and surety bond of the accused is hereby stand cancelled and he is set at liberty. Ordered accordingly.
(Dictated to the stenographer on official laptop, typed by her, corrected, signed, then pronounced by me in open court on this the 29th day of April, 2022) (SMT. SHAINEY.K.M ) VI Addl. Small Causes Judge & XXXI ACMM, Bengaluru.
:ANNEXTURE:
LIST OF WITNESSES EXAMINED BY THE COMPLAINANT:
P.W.1 : Sri. K. Ramakrishna.
P.W.2 : Sri. Swamy Gowda.
SCCH-2 28 C.C.3128/2018
LIST OF DOCUMENTS MARKED ON BEHALF OF COMPLAINANT:
Ex.P.1 : Original Cheque dated:27.04.2018. Ex.P.1(a) : Signature of accused. Ex.P.2 : Original Cheque dated:27.04.2018. Ex.P.2(a) : Signatures of accused. Ex.P.3 : Cheque return memo dt:01.05.2018 Ex.P.4 : Cheque return memo dt:01.05.2018 Ex.P.5 : Copy of legal notice dt:31.05.2018. Ex.P.5(a) : Postal Receipt.
Ex.P.6 : Postal Track Consignment.
Ex.P.7 : Statement of Account of Bangalore
City Co-Operative Bank Ltd., of
complainant.
Ex.P.8 : Statement of S.B. Account of Sree
Charan Souhardha Co-Operative
Bank Ltd., of complainant.
Ex.P.9 : Statement of Current Account of
Sree Charan Souhardha Co-
Operative Bank Ltd., of
complainant.
LIST OF WITNESSES EXAMINED BY THE ACCUSED:
D.W.1 : Sri. V. Lakshman.SCCH-2 29 C.C.3128/2018
LIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
Ex.D.1 : Sree Charan Souhardha Co-
Operative Bank Pass Book.
Ex.D.1(a) : Relevant entries made in Ex.D.1. to (1f) Ex.D.2 : 3 Bills issued by Kannada Prabha to 4 Publications Limited to SLV News Agency.
Ex.D.5 : Notarized copy of Aadhaar Card of accused.
(SMT. SHAINEY.K.M ) VI Addl. Small Causes Judge & XXXI ACMM, Bengaluru.