Bangalore District Court
Muniyappa G vs Ramesh S.R on 16 November, 2024
KABC0C0163842023
IN THE COURT OF XIV ADDL.CHIEF JUDICIAL
MAGISTRATE, MAYOHALL UNIT, BENGALURU.
Dated this the 16th day of November, 2024
Present : Sri.SANTHOSH S.KUNDER., B.A.,LLM,
XIV Addl. C.J.M., Bengaluru.
JUDGMENT UNDER SECTION 355 of Cr.P.C
C.C.No.55283/2023
Complainant Muniyappa.G,
S/o Gangaiah,
Aged about 64 years,
Residing at No.199, 1st 'G' Cross,
3rd Phase, 4th Block,
Basaveshwaranagara,
BENGALURU-560 079.
(By Sri.Shiva Sharanappa.M., Advocate)
V/s
Accused Ramesh S.R,
Aged about 56 years,
Residing at No.990, 3rd Phase,
3rd Block, Basaveshwarnagar,
Bengaluru-560 079.
(By Sri.Govindappa.K., Advocate)
Offence U/s 138 of Negotiable Instruments Act
Plea of the Pleaded not guilty
accused
Final Order Acquitted
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C.C.No.55283/2023
This complaint is filed under Section 200 of Cr.P.C
for the offence punishable under Section 138 of the
Negotiable Instruments Act, 1881.
2. Complaint averments in brief:
2.1. The complainant and accused are known to each
other for past several years. In the month of February
2018, accused has approached the complainant seeking
financial help of ₹5,00,000/- for meeting his necessities.
Considering the relationship, the complainant agreed to
pay the money to the accused and on 26.02.2018,
advanced a sum of ₹5,00,000/- by way of cash. Accused in
turn executed hand loan agreement assuring that he would
repay the money within a year.
2.2. At the time of execution of agreement, the
accused has issued two post-dated cheques bearing
No.891750 and 395976, both dated 13.06.2022 for a sum
of ₹2,50,000/- each, drawn on Vijaya Bank, West of Chord
Road branch, Bengaluru in favour of the complainant.
Since the accused has failed to keep up his words, the
complainant has presented the cheques for encashment
through his banker, viz., State bank of India, Lady Curzon
Road Branch, Shivajinagar, Bengaluru for encashment. On
22.06.2022, the complainant learnt that both the cheques
were dishonoured for the reason "Kindly provide new
cheque and cheque leave is invalid/cheque excluded".
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2.3. Immediately, the complainant got issued a
registered legal notice dated 24.06.2022 (sent on
27.06.2022) to the accused through his advocate calling
upon him to pay the dishonoured cheques' amount. The
said notice was returned with the endorsement
'unclaimed'. The accused intentionally evaded service of
legal notice.
2.4. The accused knowing fully well that the banks
are merged, issued the cheques and same were
dishonoured. Therefore, he has committed the offences
punishable under Section. Hence, this complaint.
3. This court took cognizance of the offence under
Section 138 of N.I.Act and case was registered in the
register of private complaint. Sworn statement of the
complainant recorded by way of affidavit. As prima facie
case was made out, the accused was summoned.
4. In response to the summons, the accused
appeared and got enlarged on bail. After compliance of
Sec.207 of Cr.P.C, this court recorded his plea by reading
over the substances of accusation. He has pleaded not
guilty and claimed to be tried.
5. Sworn statement of the complainant treated his
evidence and he was examined as PW.1. Chief Manager of
State Bank of India, Lady Curzon Road branch is examined
as P.W-2. Another independent witness by name, Puneeth
Kumar is examined as P.W-3. Documents at Ex.P.1 to 8
marked for the complainant.
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6. After closure of evidence of the complainant,
incriminating evidence put to the accused by examining
him under Section 313 of Cr.P.C. He has denied the
incriminating evidence.
7. By way of defence, the accused has examined
himself as DW-1 and got marked Ex.D-1 to 6.
8. Heard both side. Advocate for the complainant
filed written argument.
9. Points for consideration are :
1. Whether the dishonor of the cheques for
the reason "Kindly provide new cheque
and cheque leave is invalid/cheque
excluded" due to merger of banks would
attract the offence punishable under
Section 138 of N.I.Act?
2. Whether the complainant proved that
accused has issued cheques bearing
891750 and 395976, both dated
13.06.2022 for a sum of ₹2,50,000/-
each, drawn on Vijaya Bank, West of
Chord Road branch, Bengaluru, towards
discharge of legally recoverable debt and
the said cheque was dishonoured and in
spite of issuance of statutory notice dated
24.06.2022 (sent on 27.06.2022), the
accused has failed to repay the amount
covered under the cheques and thereby he
has committed the offence punishable
under Section 138 of N.I.Act?
3. What order?
10. The above points are answered as under:-
Point No.1: In the Negative.
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C.C.No.55283/2023
Point No.2: In the Negative.
Point No.3: As per final order; for the following:
REASONS
11. Point Nos.1 and 2:- Both points are taken up
together for discussion. In order to prove the case, the
complainant examined himself as PW-1 by filing affidavit in
lieu of oral examination-in-chief, reiterating the complaint
averments. He has got marked as many as eight
documents. Ex.P-1 and 2 are cheques; Ex.P-3 and 4 are
bank endorsements; Ex.P-5 is the copy of legal notice
dated 24.06.2022; Ex.P-6 is postal receipt; Ex.P-7 is
unserved postal cover; and Ex.P.8 is copy of circular dated
31.03.2021, issued by Bank of Baroda to all its Zonal
Heads/Regional Heads.
12. PW-2, the Chief Manager of State Bank of India,
Lady Curzon Road branch. She has deposed in her
examination-in-chief that the cheques at Ex.P.1 and 2 were
dishonoured with an endorsement reason "Kindly provide
new cheque and cheque leaf is invalid/cheque excluded".
She has stated that Vijaya Bank was merged with the Bank
of Baroda during the year 2019 and the alleged cheques
were presented during the year 2022. By that time, the
alleged cheques were discontinued by Bank of Baroda
through its circular. The witness produced said circular
along with e-mail is marked at Ex.P-8. PW-2 has further
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C.C.No.55283/2023
deposed that the after the merger of Vijaya Bank with Bank
of Baroda, old cheques of Vijaya Bank were discontinued.
13. Indisputably, the cheques in question were
returned unpaid for the reason 'cheque leaf is invalid'. The
complainant has produced two bank endorsements at
Ex.P-3 and 4. It is forthcoming that the cheques were
returned unpaid for the reason 'Kindly provide new cheque
and; cheque leave is invalid'. It is evident from cheques at
Ex.P.1 and 2 that those cheques pertaining to Vijaya Bank,
West of Chord Road branch, Bengaluru. As per the version
of P.W-2, Vijaya Bank was merged with Bank of Baroda in
2019 and as such, as on the date of presentation of the
cheques for encashment, those cheques were invalid. To
substantiate the same, PW-2 has produced Circular dated
31.03.2021, issued by Bank of Baroda to all its Zonal
Heads/Regional Heads, which is appended to Ex.P-8.
Relevant portion of Circular is extracted as under:-
"HO: OPS:113:198 Date: 31.03.2021
Letters to all Zonal Heads/Regional heads
Dear Sir,
Re: Replacement of old cheque books bearing old
MICR & IFSC codes with new Cheque books
bearing new MICR & IFSC codes to the
customers of e-Dena an de-Vijaya Banks.
As you are aware that in terms of Gazette
notification dated 02.01.2019 issued by
Government of India, Bank of Baroda, Dena
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C.C.No.55283/2023
Bank and Vijaya Bank got amalgamated
from 01st April 2019. Accordingly uniform
IFSC codes and MICR codes have been
allotted to all the branches of the Bank.
As per NPCI and RBI directives amalgamated
entity Bank of Baroda is issuing new CTS
cheques to all the customers of e Vijaya and
e Dena Bank w.e.f. 01.04.2020. RBI has
allowed us to use existing (old) IFSC & MICR
codes of all e VB & e DB branches till
31.03.2021 vide letter
DPSS:CO:RPPD:18412/03.06.2020-21 dated
09.03.2021 with the condition that no further
extension shall be grated after June 30,
2021.
In this regard we refer to our earlier circular
letter HO:OPS:112:1309 dated 11.11.2020
and subsequent letter no.HO:OPS:113:147
dated 10.03.2021 conveying guidelines for
replacement of cheque books in order to
avoid any disruptions/difficulties to our
valued customers of e-Dena Bank and e-
Vijaya Bank (post amalgamation) w.e.f.
01.07.2021. The old cheques books bearing
old IFSC & MICR codes are mandatorily to be
replaced with new cheques books bearing
new IFSC & MICR codes by 31.05.2021 to
ensure strict compliance with the extended
time line stipulated by RBI. XXXXX"
14. Thus, it is evident that as per Gazette
Notification dated 02.011.2019, issued by Government of
India, three banks, viz., Bank of Baroda, Dena Bank and
Vijaya Bank are amalgamated with effect from 01.04.2019.
In this regard, guidelines were also issued by Bank of
Baroda requiring customers of erstwhile Dena Bank and
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C.C.No.55283/2023
Vijaya Bank to issue new cheque books in order to avoid
inconvenience to them. Therefore, it was instructed to
replace new cheque books for old cheques with new IFSC &
MICR Codes. Thus, from the date of issuance of circular at
Ex.P.8, the old cheque books/cheques issued by erstwhile
Vijaya Bank and Dena Bank were discontinued with effect
from 01.07.2021.
15. Accused has produced record slips of cheques
in question which are marked at Ex.D-1 and 2. Entries at
ExD.1(a) and Ex.D-2(a) indicate that Ex.P-1 and 2 were
drawn and issued to the complainant on 26.02.2018. This
is also finding support from Ex.D-6 - hand loan agreement
dated 26.02.2018, executed by the accused in favour of the
complainant. It is useful to extract the relevant portion of
Ex.D-6 which reads as under:-
" ಕೈ ಸಾಲದ ಕರಾರು ಪತ್ರ
ಸನ್ ಎರಡು ಸಾವಿರದ ಹದಿನೆಂಟನೇ ಇಸವಿ ಪಬ್ರವರಿ ಮಾಹೇ
ತಾರೀಖು ಇಪ್ಪತ್ತಾರರಲ್ಲೂ (26.02.2018) ರಂದು
ಬೆಂಗಳೂರು-560 079, ಬಸವೇಶ್ವರನಗರ, 4 ನೇ ಬ್ಲಾಕ್, 3 ನೇ
ಹಂತ 1 ನೇ ಜಿ ಕ್ರಾಸ್, ನಂ.199 ರಲ್ಲಿ ವಾಸವಾಗಿರುವ
ಶ್ರೀ.ಗಂಗಯ್ಯ ರವರ ಮಗನಾದ ಸುಮಾರು 60 ವರ್ಷ ವಯಸ್ಸುಳ
ಶ್ರೀ.ಮುನಿಯಪ್ಪ (ಹಣ ಕೊಟ್ಟವರು) ಆದ ನಿಮಗೆ- ಇದೇ
ಬೆಂಗಳೂರು-560079, ಬಸವೇಶ್ವರನಗರ, 3 ನೕ ಹಂತ,
ನಂ.990 ರಲ್ಲಿ ವಾಸವಾಗಿರುವ ಶ್ರೀ.ರಾಮಯ್ಯರವರ ಮಗನಾದ
ಸುಮಾರು 52 ವರ್ಷ ವಯಸ್ಸುಳ್ಳ ಶ್ರೀ.ರಮೇಶ್ ಎಸ್.ಆರ್ (ಹಣ
ಪಡೆದವರು) ಆದ ನಾನು ಒಪ್ಪಿ ಬರೆದುಕೊಟ್ಟ ಕೈ ಸಾಲದ ಕರಾರು
ಪತ್ರದ ಕ್ರಮವೇನೆಂದರೆಃ-
ಶ್ರೀ.ರಮೇಶ್ ಎಸ್.ಆರ್. ಆದ ನಾನು ಶ್ರೀ ಮುನಿಯಪ್ಪ
ರವರಿಂದ ನನ್ನ ಹಣಕಾಸಿನ ತೊಂದರೆಯಿಂದ ದಿನಾಂಕ
26.02.2018 ರಂದು ರೂ.5,00,000/- (ಐದು ಲಕ್ಷ
ರೂಪಾಯಿ ಮಾತ್ರ) ಗಳನ್ನು ಕೈಸಾಲದ ರೂಪದಲ್ಲಿ ಪಡೆದಿರುತ್ತೇನೆ.
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C.C.No.55283/2023
ಇದಕ್ಕೆ ಆಧಾರವಾಗಿ 2 ಚೆಕ್ಗಳನ್ನು ಕೊಟ್ಟಿರುತೇನೆ. (1) ಚೆಕ್
ನಂ.891750, ವಿಜಯ ಬ್ಯಾಂಕ್, ವೆಸ್ಟ್ ಆಫ್ ಕಾರ್ಡ್ ರಸ್ತೆ,
ಬೆಂಗಳೂರು ಶಾಖೆ ರೂ.2,50,000/- (ಎರಡು ಲಕ್ಷದ ಐವತ್ತು
ಸಾವಿರ ರೂಪಾಯಿಗಳು ಮಾತ್ರ) ಮತ್ತು (2) ಚೆಕ್ ನಂ.395976,
ವಿಜಯ ಬ್ಯಾಂಕ್, ವೆಸ್ಟ್ ಆಫ್ ಕಾರ್ಡ್ ರಸ್ತೆ, ಬೆಂಗಳೂರು ಶಾಖೆ
ರೂ.2,50,000/- (ಎರಡು ಲಕ್ಷದ ಐವತ್ತು ಸಾವಿರ
ರೂಪಾಯಿಗಳು ಮಾತ್ರ) ಕೊಟ್ಟಿರುತ್ತೇನೆ. ನಾನು ತೆಗೆದುಕೊಂಡ ಸಾಲ
ರೂ.5,00,000/- (ಐದು ಲಕ್ಷ ರೂಪಾಯಿ ಮಾತ್ರ) ಗಳನ್ನು ಸಾಲ
ತೀರಿಸಿದ ನಂತರ ನಾನು ಕೊಟ್ಟ 2 ಚೆಕ್ಗಳನುನ ನನಗೆ ವಾಪಸ್ಸು
ಕೊಡತಕ್ಕದ್ದು. ಒಂದು ಪಕ್ಷ ಒಂದು ವರ್ಷದ ಒಳಗೆ ನಾನು
ಪಡೆದಿರುವ ಸಾಲವನ್ನು ತೀರಿಸದೆ ಇದ್ದರೆ, ನೀವು ಕಾನೂನಿನ ಪ್ರಕಾರ
ಕ್ರಮವನ್ನು ತೆಗೆದುಕೊಳ್ಳಬಹುದು.
ಈ ಕೈ ಸಾಲದ ಕರಾರು ಪತ್ರಕ್ಕೆ ಇಬ್ಬರೂ ಒಪ್ಪಿ ಈ
ಕಳಕಂಡ ಸಾಕ್ಷಿಗಳ ಸಮಕ್ಷಮದಲ್ಲಿ ಸಹಿ ಮಾಡಿರುತ್ತೇವೆ.
ಸಾಕ್ಷಿಗಳು:
1. ಹಣ ಕೊಟ್ಟವರು
( ಶ್ರೀ ಮುನಿಯಪ್ಪ)
ಹಣ ಪಡೆದವರು
2. ( ಶ್ರೀ ರಮೇಶ್ಎಸ್.ಆರ್)
(underlined for emphasis)
16. It is very pertinent to note the complainant does not
dispute Ex.D-6. In fact, he admits the said document.
Factum of drawing of the cheques by the accused in favour
of the complainant on 26.08.2018 has been deposed to by
the accused-D.W-1 in his examination-in-chief. This piece
of evidence of D.W-1 has not been successfully
controverted by the complainant so as to disbelieve the
entries in Ex.D-1 and 2, more particularly ExD.1(a) and
Ex.D-2(a). Thus, ExD.1, Ex.D-2 and Ex.D-6 prove that the
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C.C.No.55283/2023
disputed cheques were issued way back on 26.02.2018,
i.e., much prior to the amalgamation of Vijaya Bank with
Bank of Baroda, towards security for the loan. Subsequent
to issuance of those cheques, by virtue of Gazette
notification of Government of India, Vijaya Bank merged
with Bank of Baroda. Therefore, no malafide can be
attributed to the accused for having issued the cheques to
the complainant on 26.02.2018. The complainant without
getting the new cheques from the accused, presented the
invalid cheques of erstwhile Vijaya Bank to his banker and
his banker, Viz., State Bank of India, rightly returned the
cheques with endorsements 'cheque leaf is invalid, kindly
provide new cheque'.
17. Now the question is whether the cheques of a
bank issued prior to its amalgamation if dishonoured for
the reason that 'cheque leaf is invalid', would attract the
offence under Section 138 of N.I.Act.
18. In this regard, it is useful to refer the very
recent judgment by Hon'ble High court of Allahabad
rendered in the case of Smt.Archana Singh Gautham Vs
State of UP and Another (Neutral Citation
No.2024:AHC:102434; Application No.9536 of 2024;
Date of disposal 05.06.2024), where it was observed
thus:-
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C.C.No.55283/2023
"6. After hearing the rival submission of the
counsel for the parties and perused the
record, it is clear that the Allahabad Bank
had merged into the Indian Bank on
01.04.2020. Thereafter, a wide circular was
made by the Indian Bank in newspapers
mentioning the fact that all the cheques
issued by Allahabad Bank can be exchanged
with the cheques of Indian Bank by
30.09.2021, and the cheque from Allahabad
Bank will be honoured by 30.09.2021.
Therefore, the cheque issued by the
Allahabad Bank was valid till 30.09.2021,
and all the cheques of Allahabad Bank which
were presented before the Indian Bank till
30.09.2021, were honoured by the Indian
Bank, and after 30.09.2021, cheques issued
from the account maintained by the
erstwhile Allahabad Bank were declared
invalid for honouring. Section 138 N.I.Act
prescribes the condition for initiation of
proceeding on bouncing the cheque in the
proviso (a) of Section 138 N.I.Act. As per the
proviso (a) of Section 138 N.I.Act, cheque
must be presented to the Bank during its
validity. Section 138 N.I.Act is being quoted
as under:-
"138. Dishonour of cheque for
insufficiency, etc., of funds in the
account.- Where any cheque drawn
by a person or an account
maintained by him with a banker
for payment of any amount of
money to another person from out
of that account for the discharge, in
whole or in part, of any debt or
other liability, is returned by the
Bank unpaid, either because of the
amount of money standing to the
credit of that account is insufficient
12
C.C.No.55283/2023
to honour the cheque or that it
exceeds the amount arranged to be
paid from that account by an
agreement made with that Bank,
such person shall be deemed to
have committed an offence and
shall, without prejudice to any other
provision of this Act, be punished
with imprisonment for (a term
which may be extended to two
years'), or with fine which may
extend to twice the amount of the
cheque, or with both: Provided that
nothing contained in this section
shall apply unless-
(a) the cheque has been presented
to the Bank within a period of six
months from the date on which it is
drawn or within the period of its
validity, whichever is earlier;
(b) the payee or the holder in due
course of the cheque, as the case
may be, makes a demand for the
payment of the said amount of
money by giving a notice; in writing,
to the drawer of the cheque, (within
thirty days) of the receipt of
information by him from the Bank
regarding the return of the cheque
as unpaid; and
(c) the drawer of such cheque fails
to make the payment of the said
amount of money to the payeee or,
as the case may be, to the holder in
due course of the cheque, within
fifteen days of the receipt of the said
notice."
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C.C.No.55283/2023
7. From the perusal of Section 138 N.I.Act, it
is clear that if any invalid cheque is
presented before the Bank and the same was
dishonoured, then there is no liability under
Section 138 N.I.Act would be attracted, and
the cheque of Allahabad Bank is invalid after
30.09.2021 after merging the Allahabad
Bank into the Indian Bank on 01.04.2020.
Therefore, dishonouring such cheques after
30.09.2021 will not attract liability u/s 138
N.I.Act.
XXXXX
11. In view of the above analysis, the cheque
in question, which was issued from the
account maintained in erstwhile Allahabad
Bank after its merger with Indian Bank, was
not the valid cheque on the date of
presentation before the Indian Bank as
required by proviso (a) of Section 138 of
N.I.Act; therefore, dishonouring the same will
not attract the liability u/s 138 N.I.Act.
12. This court is also of the view that the
above analogy will also applicable to the
cheques of all banks which has merged with
other banks."
19. In view of the Circular at Ex.P-8 and the
observation made in the above judgment, this court holds
that cheques (Ex.P-1 and 2) pertaining to erstwhile Vijaya
Bank after its merger with Bank of Baroda were invalid as
on the date of its presentation. Since the cheques are
invalid due to institutional changes, such as mergers, do
not meet the criteria for prosecution under Section 138 of
N.I.Act and thus, its dishonor will not attract the offence
14
C.C.No.55283/2023
under the Act. It is pertinent to note that after the receipt
of intimation from the bank about the dishonor of the
cheques, the complainant has not asked the accused to
issue new cheque(s). Under these circumstances, it cannot
be said that the accused has committed the offence under
Section 138 of N.I.Act. Therefore, I answer Point Nos.1
and 2 in the Negative.
20. Point No.3:-In view of findings recorded on
Point No.1 and 2, I proceed to pass the following:-
ORDER
Acting under Section 255(1) of Cr.P.C., accused is acquitted of the offence punishable under Section 138 of Negotiable Instruments Act.
Bail bonds executed by accused shall stand cancelled.
Acting under Section 437-A Cr.P.C., accused is directed to execute fresh bail bond for ₹2,00,000/- and one surety for like sum, to appear before the higher court as and when such court issues notice in respect of any appeal that would be preferred by the complainant.
(Dictated to the Stenographer, transcript computerized by him, revised, corrected and then pronounced by me in the open Court on 16th day of November, 2024) ( SANTHOSH S.KUNDER ) XIV Addl. C.J.M., Bengaluru.
15C.C.No.55283/2023 ANNEXURES List of witness examined for the complainant:
PW.1 Muniyappa.G PW.2 M.D.Kamal Habeebi PW.3 Puneeth Kumar.
List of documents marked for the complainant:
Ex.P.1 and 2 Cheques Ex.P.3 and 4 Bank endorsements Ex.P.5 Copy of legal notice Ex.P.6 Postal receipt Ex.P.7 Returned postal cover Ex.P.8 e.mail dated 17.04.2023
List of witness examined for the defense:
DW.1 Ramesh S.R. List of documents marked for the defense:
Ex.D.1 and 2 Cheque books record slip Ex.D.3 and 4 Bus tickets Ex.D.5 Section 65(B)Certificate XIV Addl.C.J.M., Bengaluru.