Bangalore District Court
M/S Shri Ram Transport Finance Co Ltd vs Manjunath. N on 2 May, 2024
KABC030245092023
IN THE COURT OF THE XXV ADDL. CHIEF METROPOLITAN
MAGISTRATE, AT BANGALORE
Dated this the 2nd day of MAY 2024
Present:
SMT SUJATA SIDAGOUDA PATIL,
B.SC.,LL.B.
XXV Addl. Chief Metropolitan Magistrate,
Bangalore.
CC NO.13580/2023
Complainant : M/s.Shriram Transport Finance Co.Ltd,
Regional Office at No. 29/A, II floor ,
KH Road,
Bengaluru 27.
Rep. By its GPA Holder
Mr.Prasanna.N
S/o Nagaraj,
Aged about 39 years,
R/at K.H.Road, Bangalore
(By Sri GS . Advocate )
V/s
Accused : Mr. Manjunath.N
S/o Nagaraja
R/at No.30 Maragondahalli
Krishnarajpuram, Mastrusri Layout,
Bangalore South, Bengaluru560 036.
(By Sri K.P.T- Advocate)
1. Date of Commencement 31.03.2023
of offence
2
CC.NO.13580/2023
2. Date of report of offence 07.06.2023
3. Name of the M/s Shriram Transport Finance
Complainant Co.Ltd.
4. Date of recording of 07.06.2023
evidence
5. Date of closing of 16.02.2024
evidence
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused is Acquitted
8. Complainant Sri.GS Advocate
Represented by
9. Accused defence by Sri.KPT - Advocate
JUDGMENT
The complainant filed the complaint under Sec.200 Cr.P.C. against the accused for the offence punishable under Sec.138 Negotiable Instruments Act (For short N.I.Act).
2. The brief facts of the case is as under:
The complainant finance is engaged in the business of providing financial facilities under hire purchase scheme for vehicles . The accused is one of the customers of the complainant and entered into a hire purchase agreement with complainant for purchase of vehicle bearing No. KA53B9518 vide agreement No.KPURM0507040007 dt 07.07.2015 WCL KPURMO607080010 dt 8.7.2016 for sum of Rs.4,04,581/. However, the accused failed to pay the monthly installments and became a chronic defaulter of payment of monthly installments. Hence, the complainant 3 CC.NO.13580/2023 demanded the accused to repay the outstanding loan amount. Thereupon, towards part payment, the accused issued two cheques ie cheque bearing No.327503 for Rs.4,04,581/ dt 31.03.2023 drawn on State Bank of India Ltd, , Ramamurthinagar Branch, Bangalore in favour of the complainant. As per the assurance of accused, the complainant presented said cheques for realisation through its banker ie Standard Chartered Bank, Koramangala branch, Bangalore, same was dishonored for the reason "Funds Insufficient", subsequently, the complainant issued legal notice 28.04.2023 to pay the outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint.
3. After filing of the complaint, cognizance taken and recorded the sworn statement of the complainant. The complainant has complied all the statutory requirements under Sec.138 of N.I.Act. Thereafter, the case is registered against the accused and summons issued. The accused appeared with the Advocate and released on bail. Copy of the complaint furnished to the accused. Plea recorded and read out to the accused. The accused pleaded not guilty and claimed to be tried. 4
CC.NO.13580/2023
4. In support of the complainant's case, the Power of Attorney Holder of the complainant company got examined as PW1 got marked Ex.P.1 to Ex.P.9. After closure of the evidence of the complainant, 313 Cr.P.C statement of the accused has been recorded. The accused denied the incriminating evidence placed by the complainant. The accused got examined as DW 1 and got marked Ex.D.1 to 3 .
5. Heard arguments and perused the material on record. The Learned Counsel for the accused has relied on the following citations :
1. 1964. AIR SC 136 Raghavamma and A.Chenchamma
2. AIR 1949 CAL 457 Bajranglal Poddar Vs Sitaram Kedia
6. On the basis of the contents of the complaint the following points arise for my consideration. :
1. Whether the complainant proves beyond reasonable doubt that the accused issued two cheque ie cheque bearing No.327503 dt.31.03.2023 drawn on State Bank of India Ltd, Yelahanka New Town Branch, Bangalore in favour of the complainant towards discharge of legal liability ?
2. Whether the complainant proves beyond reasonable doubt that the accused has committed the offence punishable under Sec.138 of N.I.Act?
3. What order ?
7. My findings to the above points are as follows:
Point No.1&2 In the Negative Point.No.3 : As per final order for the following:5
CC.NO.13580/2023 REASONS
8. Point Nos.1 & 2: Both these points are interconnected with each other. In order to avoid repetition of facts, both the points have been taken up together for consideration.
9. The case of the complainant is that;
The complainant finance is engaged in the business of providing financial facilities under hire purchase scheme for vehicles . The accused is one of the customers of the complainant and entered into a hire purchase agreement with complainant for purchase of vehicle bearing No. KA53B9518 vide agreement No.KPURM0507040007 dt 07.07.2015 WCL KPURMO607080010 dt 8.7.2016 for sum of Rs.4,04,581/. However, the accused failed to pay the monthly installments and became a chronic defaulter of payment of monthly installments. Hence, the complainant demanded the accused to repay the outstanding loan amount. Thereupon, towards part payment, the accused issued two cheques ie cheque bearing No.327503 for Rs.4,04,581/ dt 31.03.2023 drawn on State Bank of India Ltd, , Ramamurthinagar Branch, Bangalore in favour of the complainant. As per the assurance of accused, the complainant presented said cheques for realisation through its banker ie Standard Chartered Bank, Koramangala branch, Bangalore, same was dishonored for the 6 CC.NO.13580/2023 reason "Funds Insufficient", subsequently, the complainant issued legal notice 28.04.2023 to pay the outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint
10. In order to create the legal presumption as per Sec.139 of NI Act, the Power of Attorney Holder of the complainant company got examined as PW1 and got marked the documents as Ex.P.1 to Ex.P.9. Ex.P1 is certificate of registration, Ex.P.2 is the Special Power of attorney, Ex.P.3 is Letter of Authorization, Ex.P.4 is the cheque, Ex.P.5 is the bank endorsement. Ex.P.6 is the office copy of legal notice. Ex.P.7 is the postal receipt. Ex.P.8 is the postal cover . Ex.P.9 is the Statement of Account.
11. During cross examination PW1 described his designation as he is working as assistant credit Manager since the year 2008 but he had no personal information regarding the transaction pleaded under the complaint, based on documentary source he know about the transaction. He deposed that as per agreement dated 7.7.2015 Principal loan amount of Rs.3,10,000/ was sanctioned in favour of the accused with agreed interest @ 18% and penal interest at rate of 36%. Accordingly, accused has 7 CC.NO.13580/2023 agreed to repay the above said loan amount with agreed loan of interest in 36 EMIs for Rs.11,300/ each . Accused purchased TATA indica fresh car from the show room for Rs.4,50,000/ and complainant finance has paid Rs.3,10,000/. He deposed that after purchasing of vehicle he accused executed hypothicated agreement and paid 6 installments regularly . His specific defence on 2.6.2016 accused vehicle met with an accident and completely damaged to that effect he moved application before insurance authority and that has been rejected, same has been challenged before consumer forum for compensation same also came to be dismissed. The dismal order the consumer forum has been challenged before state commission. During further cross examination PW1 has narrated that as per contents of Ex.P.9 firs installment has been paid by the accused through cheque bearing NO. 327506 and that has been duly encahsed thereafter he issued 4 cheques towards payment of further EMIs. But out of them only two cheques bearing No 327509 and 327510 have been dishonoured and rest of two cheques have been duly encashed. He deposed that the present disputed cheques was issued by the accused on 31.3.2023 to the manager by name Shivarama Reddy working at K.R Puram Branch. But defence counsel has denied issuance of cheque and asked to produce loan agreement alleged 8 CC.NO.13580/2023 to be executed by the accused including agreed rate of interest, penal interest. During further cross examination they have produced legal notice dated 5.11.2019 which was received by the accused and on due admission same is marked under Ex.D.1.
12. On the contrary in order to rebut the presumption existing in favour of the complainant, the accused got himself examined as DW1. He deposed about availing of loan of Rs.3,10,000/ from the complainant finance in the year 2015. In order to purchase the TATA indica V2P from the complainant finance. But he denied the contentions of complaint and rate of interest. Further he deposed he met with the accident on 27.5.2016 and his vehicle fully get damaged. Consequently he registered case at Avalahalli Police Station and informed to Bharathi Axe Insurance company Ltd in order to claim damages. But the complainant finance has not given proper response towards this event. Accordingly, accused left the vehicle for repair purpose and the concerned service center gave estimation for sum of Rs.4,90,000/ and labour charge to the extent of Rs.1,15,710/. Subsequently, accused made before concerned insurance company through petition before District consumer forum and the very petition has been dismissed thereafter 9 CC.NO.13580/2023 accused has challenged that judgment before state commission. Accused further deposed that at the time of execution of loan documents he issued signed disputed cheque including other cheque in favour of the complainant finance and not on 31.3.2023. Further he deposed that much prior to filing of present case i.e., 5.11.2019 the complainant finance has issued demand notice by making claim of very cheuqe amount. But no notice he served on the accused as pleaded under the complaint.
13. To support his oral evidence he produced two documents the appeal memo and order sheet concerned to state commission are marked under Ex.D2 & 3 and the previous notice dated 5.11.2019 has already been marked under Ex.D1. During cross examination he has been asked about the loan transaction which was held between the complainant finance with respect to the hypothicated vehicle for principal loan amount of Rs.3,10,000/ dated 7.7.2015. Further it is suggested that after availing of loan accused made payment of only 4 EMIs thereafter complainant finance has issued several reminders . But this suggestion has been denied by the accused. Accused after due confrontation admits disputed cheque as well as his signature on it. But he denied date of issuance of cheque on 31.3.2023. Further 10 CC.NO.13580/2023 he admits liability of the insurance company in the event of accidents occurred with respect to the hypothicated vehicle he also admits the issuance of the demand notice as per Ex.D.1. But denied the service of legal notice prior to filing of present case. Apart of above said suggestion and admissions no material admissions have been culled out from the mouth of this witness in order to support the claim of the complainant finance.
After careful scrutiny of entire oral and documentary evidence placed by the both party it reveals that loan was sanctioned sanctioned on 7.7.2015 thereafter as per complainant's suggestion accused has paid 4 installments out of 36 agreed EMIs for Rs.11, 300/ per month. Thereafter, accused become defaulter complainant finance issued reminders for number of time but no such reliable documents have been produced by the complainant to show its legal efforts. But during cross examination of PW1 the defence counsel has highlighted about the issuance of demand notice dated 5.11.2019 by claiming very same amount which has been mentioned under the disputed cheques by calling him regularize his payments. The issuance of this notice is not in dispute and marked as per Ex.D1. Further I have gone through the account extract of the complainant finance 11 CC.NO.13580/2023 which is marked under Ex.P9 in which the accused has made last payment on 16.3.2016. Thereafter, the complainant finance issued notice as per Ex.D1 dt 5.11.2019 after expiry of 3 years period. Thereafter, the present legal notice has been issued by the complainant finance on 28.4.2023 that too after lapse of three years period from the date of issuance of reminder notice dated 5.11.2019. Hence, the approach of the complainant is deemed to be with a claim of time barred debt. By saying that the cheque was issued on 31.3.2023 but there is no such written agreement or execution of any legal instrument in support of disputed cheque towards claiming of time barred debt by the complainant finance. But as per defence the disputed cheque was issued as on date agreement ie., 7.7.2015 . That has been misused through this case. Further he denied service of legal notice but the address given under affidavit of the accused is the address in which accused is residing since long .
14. Further it is observed that at the time of lapse of 3 years or within 3 years, there is no such supplementary written agreement executed between the parties in order to make the time barred debt into regular legal debt. In absence of any such effort, complainant cannot claim time barred debt against the accused 12 CC.NO.13580/2023 though the cheque in dispute is issued by the accused towards security as per their defense. In this regard I have gone through the principles discussed by the Honble High Court of Karnataka in reported case 2021(1) AIR KAR 600 ( Bidar Urban Co operative Bank Ltd, Vs Girish ) in which loan was sanctioned by the complainant bank in the year 2001 and the claim was made by the complainant in the year 2007 and that has been registered in the year 2008 through C.C.No.826/2008 in which the principal borrower died in the year 2004 and concerned bank has not brought the legal heirs well within time. Therefore by invoking 25(3) of Indian Contract Act, trial court acquitted accused.
Also as per the principles discussed in reported case 2001 Crl.L.J 24 ( Sasseriyll Joseph V/s. Devassia ), it has been held that :
N.I.Act, Sec.138 - Section is attracted only if the cheque was issued in discharge of legally enforceable debt of other liability - A time barred debt is not legally enforceable debt.
25. Section 19 of Limitation Act reads as under
Effect of payment on account of debt or of interest on legacy.-- Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:13
CC.NO.13580/2023 Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
Explanation --For the purposes of this section,--"
(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment;
(b) "debt" does not include money payable under a decree or order of a court.
I have gone through the principles laid down in the above judgments .
15. The complainant has not taken any steps within three years from the date of service of notice dated 5.11.2019. There are no steps taken by the complainant finance by issuance of demand notice as accused failed to make payment of agreed installments before expiry of three years from the date of last payment or from the date of agreed last installment. Thus, Sec.138 is attracted only if the cheque is issued for discharge of a legally enforceable debt or other liability. It cannot be said that time barred debt is a legally enforceable debt.
16. It is also relevant to refer the judgment of the Hon'ble High Court of Karnataka in Crl.A No.545/2020 in the case of K.V.Subbareddy V/s Ragava Reddy. The Hon'ble High Court 14 CC.NO.13580/2023 of Karnataka also held that: 'A time barred debt cannot be held as a legally recoverable debt'. The principles of the above case are aptly applicable to the case on hand.
17. A bare perusal of the aforesaid provision of law clearly go to show that for analysing the limitation of liability behind period of 3 years, the acknowledgement if any must be there before the period of limitation is over which is not the case in hand. In view of the principles stated in the above referred decisions and discussion, it is evident that penal provision of Sec.138 of N I Act is applicable only to the cheques which are issued for discharge in whole or in part of any debt or liability, which according to explanation there must be a legally enforceable debt or other liability. A cheque given in discharge of time barred debt will not constitute an unconditional undertaking or promise in writing either expressly or impliedly so as to attract the criminal offence under Sec.138 of N.I.Act. These principles are also elaborately held in Sasseriyll Joseph case which is affirmed by the Hon'ble Supreme Court. The principles of the above case is amply applicable to this case. The cheque in question issued by the accused does not come within the period of limitation. The cheque issued after expiry of three years, the provisions of Sec.138 of N.I.Act is not attractable. In the light of above discussion 15 CC.NO.13580/2023 on the facts and guidelines of the Hon'ble Supreme Court and the Hon'ble High Court, I am of the considered opinion that claim of the complainant is a time barred debt not legally recoverable as per law. The complainant has failed to discharge the initial burden that lies on him. In such circumstances, the accused has successfully rebutted the presumption under Sec.139 of N.I.Act . Therefore, the complainant has failed to place sufficient evidence to raise presumption under Sec.139 of N.I. Act.
18. Therefore, in the light of above discussion, the court is of the opinion that the complainant has failed to prove that the debt is legally enforceable debt or liability. The complainant has utterly failed to prove its case beyond all reasonable doubt. The complainant has not placed sufficient oral and documentary evidence for convincing the court in order to convict the accused for the offences punishable under Sec.138 of N.I.Act Hence, Point Nos.1 and 2 are answered in the Negative.
19.Point No.3 :In the light of the above findings on point Nos.1 & 2, I proceed to pass the following :
ORDER Exercising the powers conferred upon this court u/s.255(1) Cr.P.C., the accused is hereby 16 CC.NO.13580/2023 Acquitted for the offence punishable under Sec.138 Negotiable Instrument Act.
The bail bond of the accused and that of the surety if any stand cancelled.
(Dictated to the Stenographer , transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 2nd Day of May 2024 ).
(SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Prasanna. N
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Certificate of Registration
Ex.P2 : Special Power of attorney
Ex.P3 : Letter of authorization
Ex.P4 : Cheque
Ex.P5 : Bank Endorsement
Ex.P6 : Office copy of legal notice
Ex.P7 : Postal receipt
Ex.P8 : Postal cover
Ex.P9 : Statement of account.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED: D.W1 : Manjunatha.N
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: Ex.D1 : Legal notice dt 5.11.2019 Ex.D2 : Copy of Appeal No.810/2019 Ex.D3 : Copy of order sheet in Appeal No.8.10.2019 (SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.
Digitally signed by
SUJATA SUJATA
SIDAGOUDA SIDAGOUDA PATIL
Date: 2024.05.04
PATIL 14:53:32 +0530
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