Bangalore District Court
Sri. Bhaskar Roadlines vs Mr. Mukesh Kumar Mutha on 22 March, 2021
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Crl.A.No.922/2019
IN THE COURT OF LV ADDL. CITY CIVIL & SESSIONS
JUDGE, BENGALURU (CCH-56)
:Present :
Sri. Krishnamurthy R. Padasalgi,
B.Sc., LL.M., HDSE
LV Addl. City Civil & Sessions Judge,
Bengaluru.
Crl.A.No.922/2019
DATE: THE 22nd DAY OF MARCH 2021.
APPELLANT :: 1. Sri. Bhaskar Roadlines,
Head office at No.49, 2nd Cross,
Kalasipalya New Extension,
Bengaluru-560 002.
Represented by its Proprietor
Sri. Shantha Kumar C.D.
2. Sri. C.D.Shantha Kumar,
S/o Late Devaraj, Aged about 40 years,
No.49, 2nd Cross, Kalasipalya New
Extension, Bengaluru-560 002.
(Rep. By Sri. Nagesh.K.N., Advocate)
-V/s-
RESPONDENT :: Mr. Mukesh Kumar Mutha,
S/o. Madan Raj,
Aged about 42 years,
Proprietor of Kid Zone,
2nd Floor, R.T.O. Main Road,
Opp. Eshwar Temple, Yeshwanthapur,
Bengaluru-560 022.
(Rep. By Sri Adinarayana, Advocate)
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JUDGMENT
This is an appeal under Section 374(3) of Cr.P.C. by the the appellant/accused being aggrieved by the judgment and order passed by learned XII A.C.M.M., Bengaluru City in C.C.No.18690/2017 dated 19.03.2019 for convicting him for the offence punishable u/Sec.138 of N.I. Act sentencing him to pay fine of Rs.9,95,000/- to complainant/respondent in default simple imprisonment for six months.
2. The parties will be referred as per the Rank before the trial Court.
3. The facts of the case of complainant are that, the complainant is proprietor of Kid Zone and accused is running Bhaskar Roadlines and used to visit the proprietary concern of complainant to purchase cloths and they are acquainted to each other. In the first week of October 2016 the accused approached for financial assistance and also for production of film "Rang Bi Rangi". The complainant advanced the loan amount of Rs.15,00,000/- through cash on 22.10.2016. The accused assured 3 Crl.A.No.922/2019 that he repaid 3 installments within 6 months. He issued three cheques bearing No.251460 dated 22.02.2017 for Rs.3,00,000/-, cheque bearing No.251461 dated 22.02.2017 for Rs.2,00,000/- drawn on The Karnataka State Co-operative Apex Bank and another cheque bearing No.618263 dated 22.03.2017 for Rs.4,95,000/- drawn on Corporation Bank, totally for Rs.9,95,000/-. When the complainant presented the said cheques for encashment through his banker Vijay Bank, Yeshwanthpur Branch, Bengaluru, two cheques were dishonored with an endorsement "Payment stopped by the drawer" on 03.05.2017 and one cheque bearing No.619263 of Corporation Bank was dishonored with an endorsement "Funds insufficient" on 03.05.2017. The said fact was informed to accused, he has not responded then the respondent/complainant got issued the legal notice dated 31.05.2017 calling upon him to make payment the said notice was duly served upon the appellant on 02.06.2017, after lapse of 15 days accused has not paid the cheque amount. Hence, the private complaint was filed.
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4. The trial Court after taking cognizance issued the summons, the accused appeared enlarged on bail, plea was read over. The complainant was examined as P.W.1 and got marked 11 documents as Exs.P.1 to Ex.P.11 and statement under Section 313 of Cr.P.C was recorded. Accused got examined himself as D.W.1 and got marked 3 documents as Exs.D.1 to Ex.D.3 The learned magistrate after hearing both passed the impugned order.
5. The appellant/accused has following ground for the appeal.
"Grounds for Appeal."
That impugned order is improper illegal the respondent not produced VAT, GST certificate and IT returns to show he is proprietor of Kid Zone, the version of the respondent had kept and kept Rs.15,00,000/- in his shop but has not produced any documents such as cash book, account statement. The respondent is an Income Tax Assessee but he has not shown the lending of the amount in books of account and also has shown any source of income. The respondent admitted that the four disputed cheques 5 Crl.A.No.922/2019 were given in the month of October 2016 to November 2016. The two cheques bearing dated 22.02.2017 and another cheque dated 22.03.2017. But never stated the cheques were post dated this shows respondent has not come to Court with clean hands. The complainant is silent about date of issuance cheques and also admitted that ink of pen the contents of cheques are filled is different.
6. The respondent never explained about presentation of disputed cheques lately. There are materials alterations. The appellant instructed the bank about lost of cheque the bank as dishonored, the cheques bearing No.251460, 251461 with shara payment stopped by drawer. The respondent has not produced any documents to show that he has given financial assistance to Bhaskar Roadlines and taken any promissory note. The appellant not liable to pay Rs.9,95,000/-. It is falsely claimed appellant has not issued any cheque for the said amount.
7. The Court duly erred in not appreciating the evidence and arrived at wrong conclusion on assumption and presumption and 6 Crl.A.No.922/2019 failed to observe that there is no legally recoverable debt between appellant and respondent. No financial transaction are relationship between appellant and respondent is there. The trial Court failed to apply correct legal proportions about drawing of presumption and the same is rebuttable; for rebutting presumption it is not necessary for accused get into witness box on other hand if the accused is able to show materials available in the evidence adduced would improbabilise the case of complainant then burden is cast upon the complainant the prove. The learned judge came to wrong conclusion that appellant is liable to pay nominal fine. There are material illegalities and irregularities in impugned order and not based on the evidence and ignoring cross-examination and witnesses. Sentence passed by the trial Court is a exaggeration. Hence, prays for all the above to set aside an impugned order or judgment.
8. After issuance of notice respondent appeared, trial Court records were secured, heard counsels for the appellant and respondent. The counsel for the appellant filed written arguments, Perused.
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9. Based on the above points are that arise for consideration;
1. Whether the complainant/respondent has proved that the appellant/accused in discharge of legally enforceable debt issued cheques bearing No.251460 dated 22.02.2017 for Rs.3,00,000/-, cheque bearing No.251461 dated 22.02.2017 for Rs.2,00,000/- drawn on Karnataka State Co-operative Apex Bank Ltd., Banashakari Branch, Bengaluru and another cheque bearing No.618263 dated 22.03.2017 for Rs.4,95,000/- drawn on Corporation Bank, J.C. Road Branch, Bengaluru and those were dishonored?
2. Whether the appellant/accused proves that he has lost cheque leaves for which he has lodged the complaint before police station and the cheques bearing No.251460, 251461 and 618263 were same cheques. Therefore he issued stopped payment instructions to bank and no offence is committed?
3. Whether the appellant/accused proves that the complainant/respondent was not having Rs.15,00,000/- to be advanced and he is not at all acquainted with him?
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4. Whether the judgment and sentence passed by the trial Court requires interference by this Court?
5. What order ?
10. The above points are answered as under:
Point No.1 : In the Affirmative Point No.2 : In the Negative Point No.3 : In the Negative Point No.4 : In the Negative Point No.5 : As per final order for the following.......
REAS O NS
11. POINTS No.1 to 4 :: On perusal of the written arguments and also arguments the first and foremost point have to be seen the instructions issued for stop payment of cheques bearing No.251460, 251461 as drawn of Karantaka State Co-operative Apex Bank Ltd., Bengaluru as contended by accused. Those cheques are marked as Exs.P.1 and Ex.P.2 (Ex.P.1 is cheque bearing No.251460, Ex.P.2 is cheque bearing No.251461) which are drawn on Karnataka State Co-operative Apex Bank.
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12. The accused to prove the fact of stop payment instructions due to loss of cheques has examined himself as D.W.1, he has deposed at paragraph No.6 that totally 4 cheques were lost and he has given missing complaint before jurisdictional police and also intimated bank that the cheques are missing and issued stop payment instruction, accordingly payment was stopped. He further deposed that cheques bearing No.251460, 251461 and 618263 are the said cheques. Exs.P.3 and Ex.P.4 are the bank endorsements issued by the Karnataka State Co-operative Apex Bank Ltd., shows that the cheques were dishonored as the payment of stopped by the drawer.
13. In the cross-examination of D.W.1 admits that he has given police complaint in Chandra Layout police station about missing of cheques on 21.01.2017, although he says that, he has not produced any documents and no such documents are there. Even in the chief evidence he has not at all stated in which police station he has lodged the complaint about misplacing of 4 cheques. 10
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14. He in cross-examination admits that the request for stop payment was made through online to the bank. He has not produced said acknowledgment. He does not remember the cheques folio numbers which were lost and those were blank cheques and he cannot specifically say about cheques for which stop payment instructions were made.
15. In order to prove the communication of stop payment for the reason of mis-placed cheque no written copy of requisition allegedly given to bank is produced. The accused has also not produced the bank statement which would show that despite of sufficient balance, he issued the stop payment instruction on the mis-placing of cheques for which he allegedly lodged police complaint. He has not examined the Manager of Karnataka State Co-operative Apex Bank Ltd., to substantiate the stop payment instruction of those two cheques was issued, as those were lost and there were chances of mis-use. Accused has not issued such instructions despite of having having financial funds to honour the those cheques but to escape liability.
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16. For all the above it can be stated that the accused has taken the flimsy defense of mis-placement of cheques.
17. The accused has relied upon the notice allegedly issued by him. The said reply notice as marked Ex.D.1 it is dated 24.08.2017. The certified copy of postal receipt also bearing date 24.08.2017, it is served on advocate for respondent/complainant on 28.08.2017 as could be seen from certified copy of acknowledgment card. It is pertinent note that the private complaint was filed on 08.07.2017 and the trial Court has taken cognizance and issued process on 08.07.2017 which was to returnable by 29.08.2017 and Court endorsement shows that on 02.08.2017 the summons was issued. In the meantime the accused has issued the notice in other words after knowing the fact that summons is issued by trial Court . The summons was issued by speed post and was refused by accused and he has prepared the notice and addressed it to the counsel for complainant/respondent.
In the notice, at Ex.D1, nowhere he whispers about mis- placement of cheques and lodging of police complaint. According 12 Crl.A.No.922/2019 to his cross-examination, he has given police complaint before Chandra Layout police station on 21.01.2017 and this legal notice dated 24.08.2017. Then there was no impediment for him to say about lodging of complaint. Not only this in the cross of P.W.1 nothing worthwhile is elicited to prove the lost of cheques and misuse my P.W.1.
18. As per ruling reported in (1998) 3SCC 249 Modi Cement Ltd. Vs. Kuchil Kumar Nandi. It is stated if the cheque is issued towards an existing debt or liability, the drawer just cannot issue stop payment instructions to the bank, nor his penal liability be absolved by giving a notice to the payee not to present the cheque.
19. In AIR (2002) 1SCC 234 M.M.T.C. Ltd. and another Vs. Medchl Chemicals and Pharma Pvt. Ltd. and another "Negotiable Instruments Act, 1881 - Ss.138 and 139 - Stop payment cause of dishonour - Presumption under S.139 - Applicability - Cheque dishonoured on account of drawer's stop-payment instruction, held does draw the presumption under S.139 which can of course be rebutted by the drawer at the trial - To escape liability under S.139 accused has to show that dishonour was 13 Crl.A.No.922/2019 not due to insufficiency of funds and there was valid cause, including absence of any debt of liability, for the stop payment - Therefore complaint filed in such a case cannot be quashed before the trial".
20. In this case also the accused has made an attempt in justifying the instruction of all stop payment given, but failed.
21. The accused/appellant has failed to prove justifiable grounds for issuance of stop payment order. Hence, the fact that he has issued the stop payment order itself makes clear that issuance of those cheques was known and within knowledge of accused/appellant.
22. With respect to cheque bearing No.618263 is concerned, the said cheque is at Ex.P.5 it is drawn on Corporation Bank for Rs.4,95,000/-. The reason for dishonour is for insufficiency of funds and not because of any instruction of stop payment as alleged by accused/appellant. It clearly proves that the presumption available can be drawn and this cheque was issued for legally enforceable debt and was dishounoured for insufficient funds. 14
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23. The accused/appellant also contended that there are material alterations in cheques. Which allegedly are admitted by complainant, but two cheques in question were not dishonoured for material alterations but for the stopped payment instructions given by the accused.
24. The accused/appellant has taken the stand that he and complainant/respondent are not acquainted he was not having any transaction of purchase of cloths from his shop. But in the cross- examination at page No.13. It is suggested that the accused has not purchased the cloths no bills are there etc., but in Ex.D.1 reply notice marked as Ex.P.12 unequivocally show that the accused has admitted about he purchased the cloths from the shop of complainant. He also in his cross admits the same.
25. The accused/appellant has dispute is need and financial capacity to lend Rs.15,00,000/- by the complainant. It is case of the complainant that accused took hand loan of Rs.15,00,000/- being a financial assistance to produce Kannada film "Rang Bi Rangi". 15
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26. D.W.1 in the cross-examination admits about he produced the said film he also admitted that he started it in the year 2013 and took 5 years to release and spend amount of Rs.50,00,000/- although he has not produced any material for taking permission in the year 2013 but admits that in 2016 it was started i.e. film production work, which tallies with the complaint's version that in 2016 the accused approached for the financial assistance. The accused has not proved that he was not he need of money.
27. With regard the financial capacity of complainant/ respondent in lending of Rs.15,00,000/-; in concerned portion of cross-examination of P.W.1 the questions are asked about the source that is, to whether he was having Rs.15,00,000/- cash in his shop and whether any person was present while Rs.15,00,000/- was paid to the accused, is there any installed CCTV etc. by this no presumption or inference can be drawn that the complainant did not advanced the loan of Rs.15,00,000/-. Because the theory of mis- place of cheques was not proved by accused. 16
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28. In ruling reported in Rohitbhai Jivanlal Patel Vs State of Gujarath and Another in (2019) SCC On Line SC 389 equivalent AIR 2019 SC 1876 at paragraph No.14, it is held that:
"........The said cheques were presented to the Bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basis ingredients of Section 138 as also of Sections 118 and 139 are apparent on the face of the record. The Trial Court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused-appellant to establish a probable defence so as to rebut such a presumption...."
29. Mere denial of accused/appellant is not suffice, he has to adduce the positive evidence to rebut the presumption. In the same Rohitbhai Jivanlal Patel Vs State of Gujarath and Another ruling at para No.16, it is held that:
".........On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasized that though 17 Crl.A.No.922/2019 there may not be sufficient negative evidence which would be brought on record by the accused to discharge his burden, yet mere denial would not fulfill the requirements of rebuttal as envisaged under Section 118 and 139 of the NI Act....."
30. In Rohitbhai Jivanlal Patel Vs State of Gujarath and Another in the same decision at Para-19 the Hon'ble Supreme Court has held as follows;
".......Needless to reiterate that the result of such presumption is that existence of legally enforceable debt is to be presumed in favour of the complainant when such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not........"
Therefore, he cannot question the financial capacity of the complainant nor he has rebutted the presumption.
31. The appellant/accused has contended that the transaction of lending Rs.15,00,000/- was not shown in income tax returns. PW.1 also admits the same. He admits that lending of Rs.15,00,000/- is not shown in income tax return because the accused agreed to repay amount within 6 months. 18
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32. In this connection ruling reported in 2013 Crl.L.J. (NOC) 572 (BOM) Krishna P Morajkar Vs. Joe Ferro and another "A plain reading of Section 269SS of the Income- tax Act shows that no person can accept any loan or deposit of sum of Rs.20,000/- or more otherwise than by an account payee cheque or account payee bank draft. It does not say that a person cannot advance more than Rs.20,000/- in cash to another person. It is clear that the restriction on cash advances was in fact on the taker and not the person who makes the advance. The penalty for taking such advance or deposit in contravention of provisions of Section 269SS was to be suffered by one who takes the advance. Therefore, it was obviously impermissible to invoke these provisions for preventing a person from recovering the advance which he has made".
33. So, from the above view taken by Hon'ble High Court and on reading of Section 269SS of I.T. Act, it is crystal clear that it does not say that a person cannot advance more than Rs.20,000/- in cash to another person. It is clear that the restriction on cash advances was in fact on the taker/to accept said amount in cash and 19 Crl.A.No.922/2019 not the person who makes the advance. So there is no force any force in the contention of accused non showing in IT returns.
34. Moreover non disclosure of the said amount in income returns will attract penal provisions if any against the assessee and it is between the Income Tax Department and assessee. The accused being the defaulter indulging issuing non-payment instruction and making another cheque to bounce, in order to make loss and thereby has taken up irrelevant defence and failed to prove that and also the presumption envisaged under N.I. Act, cannot take such contention that the said transaction was not show in income tax returns. Per contra if he takes up such contention it is clear that impliedly he admits about receipt of said amount.
35. The trial Court has rightly appreciated the evidence and came to the right conclusion.
36. For all the above discussions. This Point No.1 is answered in Affirmative, Points No.2 to 4 is answered in Negative.
37. POINT No.5:- Hence, proceed to pass the following... 20
Crl.A.No.922/2019 ORDER This is an appeal under Section 374(3) of Cr.P.C. by the the appellant/accused by name Sri. C.D. Shantha Kumar being aggrieved by the judgment and sentence passed by learned XII A.C.M.M., Bengaluru City in C.C.No.18690/2017 dated 19.03.2019 is hereby rejected with costs.
In consequences the judgment and sentence of trial Court passed in C.C.No.18690/2017 dated 19.03.2019 by learned XII A.C.M.M., Bengaluru City is confirmed.
Office to send back the Trial Court Records with copy of this judgment.
[Dictated to the Stenographer, transcribed by her, transcription corrected and then pronounced by me in open court, dated this the 22nd day of March, 2021.] (Krishnamurthy R. Padasalgi) LV Addl. City Civil & Sessions Judge, Bengaluru.