Bangalore District Court
The Bangalore City Co-Operative Bank ... vs Narayana Mudaliyar on 5 February, 2016
IN THE COURT OF XXIX ACMM, BENGLAURU CITY
(SCCH-18)
Dated: This 5th day of February 2016.
Present: SRI.VEERANNA SOMASEKHARA
B.Com, LL.B.,
III ASCJ & XXIX ACMM
COURT OF SMALL CAUSES,
BANGALORE.
CC NO.21935/2012
Complainant: The Bangalore City Co-operative Bank Ltd.,
H.O.No.3, Pampamahakavi Road,
Chamarajapet,
Bangalore-18 and Branch office
At Jayanagar, Bangalore.
Rep.by its Asst.Manager
S.N.Shashikala W/o.Shivamadaiah.
(By pleader Sri.RP)
V/s
Accused : Narayana Mudaliyar
@ Narayana Raju,
S/o Late V.Krishnaiah,
Door No.150, 9th Main,
15th Cross, Wilson Garden,
Lakkasandra Extention,
Bengaluru-30.
(By pleader Sri.SVB)
2 C.C.No.21935/2012
SCCH-18
Offence complained of : U/s.138 of NI Act
Plea of the accused : Pleaded not guilty
Final order : Accused is convicted
Date of Order : 05-02-2016
JUDGMENT
The complainant's bank Assistant Manager has filed the complaint U/s.200 of Criminal Procedure Code against the accused for the offences punishable U/s.138 of NI Act.
2. After taking cognizance, the complaint is registered as PCR No.12726/2012 thereafter sworn statement of the Assistant Manager of complainant's bank was recorded. As a prima-facie case was made out, this criminal case (CC) was came to be registered and the summons were issued to the accused.
3. The brief contents of the complaint are as under:
The complainant's bank is a Co-operative bank, registered under the Co-operative Societies Act. 3 C.C.No.21935/2012
SCCH-18 On 6-11-1993, the father of the accused had raised a loan of Rs.1,00,000/- from the complainant's bank for his family needs. After availing the loan facility, the father of the accused had failed to pay the loan due amount as undertaken by him. Then the complainant bank has initiated the arbitration proceeding against the father of the accused before the Joint Registrar of Co-operative Society, Bangalore, vide JRD/UBR/T- 2732/2005-2006. Further the contention of the complainant is that, the accused has not intimated the death of his father to the complainant's bank. Further the contention of the complainant' Bank is that during the pendency of the arbitration case, the complainant bank came to know that, the father of the accused has died leaving behind the accused and others as his legal heirs and they have succeeded to his assets and liabilities. The contention of the complainant' Bank is that, after prolonged litigation, an arbitration award was passed on 12-1-2012 by the 4 C.C.No.21935/2012 SCCH-18 JRCs Bangalore. The contention of the complainant' Bank is that, during the course of availing the loan, the father of the accused has mortgaged his property to the complainant bank by executing mortgage deed and at present, the accused is residing in the said mortgaged property.
4. Further as per the award passed by the JRCS, the official of the complainant's bank visited the mortgaged property on 18-4-2012 to serve the notices for taking further action according to law to recover the loan due amount. Then the accused who is residing in the said mortgaged property has called the official of the bank inside the house and issued two cheques bearing No.213445 dated 28-4-2012 for Rs.50,000/- and another cheque bearing No.213446 dated 23-5-2012 for Rs.2,60,000/-drawn on Syndicate Bank, Wilson Garden branch, in favour of the complainant bank and the accused has issued the said cheques voluntarily for discharging the loan due amount. 5 C.C.No.21935/2012
SCCH-18
5. Thereafter in order to cheat the bank, the accused has lodged the complaint before the police against the bank official and after coming to know the said fact, the recovery officer of the complainant bank has given statement before the police by producing documents. Thereafter the complainant bank has presented the cheque bearing No.213446 for encashment through it's bank, but the said cheque has returned with an endorsement "payment stopped by drawer". Then, the complainant's bank has got issued notice dated 31-5-2012 to the accused through his counsel by way of RPAD and the same was not returned till filing of the complaint. In spite of service of notice, the accused neither paid the cheque amount to the complainant bank nor replied the said notice. Hence, after complying the provision U/s.138 & 142 of NI Act, the Assistant Manager of the complainant's bank has filed the complaint as against the accused.
6 C.C.No.21935/2012
SCCH-18
6. At the first instance, the Assistant Manager of complainant's bank has filed this case before the 16th ACMM Court who after registration of Criminal case, has issued the summons to the accused. In response to the summons, the accused has appeared before the court through his counsel and got enlarged on bail. Substance of accusation was read over and explained to the accused, for which, he pleaded not guilty and claims to be have defence.
7. In order to prove the case, the Assistant Manager of complainant's bank got examined herself as PW-1 and sale officer of the complainant's bank head office has been examined as PW-2 and got marked the documents as Ex-P-1 to 13, 20 and 21. Further during the course of cross- examination of accused, the complainant's bank got marked the documents as Ex-P-14 to 19.
7 C.C.No.21935/2012
SCCH-18
8. After the evidence, the statement of accused U/s.313(1)(B) Cr.P.C. was recorded and read over to the accused. The accused has denied the entire incriminating evidence appearing against him as false.
9. Thereafter to prove the defence, the accused has got examined himself as DW-1 and got marked the documents as Ex-D-2 to D6. He has got marked Ex-D1 during the cross- examination of PW-2. Thereafter the case was transferred to this court and afterwards, the complainant and accused have appeared before this court through their counsel. Thereafter the PW-1 has been further examined and got marked the documents as Ex-P-20 & 21.
10. On perusal of the evidence and documents available on record, the following points arise for consideration:
1. Whether the complainant bank has proved that the accused has issued cheque bearing No.213446 dated 23-5-2012 for Rs.2,60,000/- in its favour towards 8 C.C.No.21935/2012 SCCH-18 part payment of loan due amount without maintaining sufficient balance in his bank account?
2. Whether the complainant bank has proved that the accused has failed to pay the amount of cheque in spite of service of demand notice and thereby committed an offence U/Sec.138 of NI Act?
3. What order?
11. Heard the arguments and perused the records.
12. In support of the argument, the learned counsel for the complainant' bank relied upon the following citations:
1. 2012 (13) SCC 375 (Laxmi Dyechem V/s. State of Gujarat and others)
2. AIR 2002 SC 182 (M/s. M.M.T.C. Ltd. And another, V/s. M/s. Medchal Chemicals and Pharma (P) Ltd., and another)
3. AIR 2002 SC 985 (A.V.Murthy V/s. B.S.Nagabasavanna)
4. 2007 Cri.L.J. 583 (H.T.Nataraja V/s. Rajanna)
5. 2006 CRI.L.J.3111 (Narendra V.Kanekar V/s. The Bardez-Taluka Co-op Housing Mortgage Society Ltd. & anr) 9 C.C.No.21935/2012 SCCH-18
6. 2007 CRI.L.J.1486 (Ramakrishnan V/s.
Gangadharan Nair & another)
7. JR 2000 (2) SC 426 (M/s. Medchal Chemicals & Pharma Pvt.Ltd.)
8. 2009 CRI.L.J.787 (M/s. Sri.Krishna Agencies V/s. State of A.P and another)
13. My findings to the above points are as under:
Point No.1 & 2: In the affirmative Point No.3: As per final order for the Following:
REASONS
14. POINT No.1 & 2: Both these points are inter connected with each other. Hence, in order to avoid the repetition of facts, both these points are taken together for common consideration.
15. During the course of argument, the learned counsel for the complainant argued by reiterating the contents of 10 C.C.No.21935/2012 SCCH-18 complaint and also evidence put forth by PW-1 and 2. Further he argued that, admittedly, the father of the accused has availed the mortgage loan from the complainant's bank by mortgaging the property. Further he argued that, the defence of the accused is that, the loan due amount shown in the complaint is a time barred debt and as such, the complainant bank has no authority to recover the said amount. To prove the said fact, though the accused has examined himself as Pw-1, but he has not produced any proper documents. On the other hand, on perusal of Ex-P-19 i.e. copy of award passed by the Joint Registrar of Cooperative Society (JRCS), it shows that, on 12-1-2012, the JRCS has passed the award and as per the award, the official of the complainant's bank has visited the mortgaged property and then, he came to know that the accused is residing in the said property and at that time, to discharge the said debt, the accused has issued the Ex.P.2 i.e. cheque and another cheque 11 C.C.No.21935/2012 SCCH-18 towards full and final settlement of the award amount. Further he argued that, the defence of the accused is that, the officials of the complainant's bank have forcibly taken the cheques from him. To prove the said fact, though the accused has relied upon the copy of compliant filed by him before the concerned police. On the other hand, the official of the complainant's bank have submitted the letter to the concerned police and as such, the concerned police have not proceeded further on the basis of complaint filed by the accused. Further he argued that, the accused has admitted the loan transaction taken place between his father and the complainant bank and as such, he has issued the Ex-P-2 i.e. cheque in favour of complainant bank. Further he argued that, the complainant bank has proved its case as contended in the complaint by producing sufficient documents. Accordingly, he prays to convict the accused for the above said offence.
12 C.C.No.21935/2012
SCCH-18
16. Per contra, the learned counsel for the accused argued by reiterating the evidence put forth by D.W.1. Further he argued that, as per the version of the complainant, the accused has issued the cheque dated 18-4-2012 voluntarily. But copy of complaint produced by the complainant itself show that, the complainant's bank officials have taken the Ex-P-2 i.e. cheque from the accused forcibly. Further he argued that, on the basis of the award passed by the JRCS, the complainant bank has proceeded to recover the award amount from the accused. But on perusal of the records, it appears that, on the date of filing of complaint, the Hon'ble Karnataka Appellate tribunal has stayed the execution and award passed by the JRCS and as such, as on the date of issuance of cheque, there was no legally recoverable debt. Further he argued that, when the accused has not issued the cheque voluntarily, then the provisions of Sec.138 of NI Act are not applicable to the accused as contended in the 13 C.C.No.21935/2012 SCCH-18 complaint. Further he argued that, version of the complainant, itself shows that on the basis of the mortgage deed, the complainant bank has tried to recover the loan due amount from the accused in respect of mortgaged property. Hence, this court cannot decide the validity of the mortgage deed alleged to have been executed by the father of the accused. Further he argued that, to prove the case of the complainant bank, though the Asst.Manager of the complainant bank has examined herself as PW-1, but as on the date of deposing the evidence, she was not having authority to depose the evidence on behalf of complainant bank. Hence, the evidence of PW-1 is not acceptable one. Contending the above facts, the counsel for the accused argued that, the complainant bank has failed to prove the guilt of the accused beyond all reasonable doubt. Accordingly, he prays to acquit the accused from the alleged offence. 14 C.C.No.21935/2012
SCCH-18
17. On rival contention urged by both the counsel, I intend to discuss the merits of the case.
On perusal of the records, it shows that, to prove the case, the Asst.Manager of the complainant bank has examined herself as PW-1 and she has stated in her evidence by reiterating the contents of complaint. Further in support of her evidence, she has produced the documents and the same are marked as Ex-P-1 to 9. Further in support of her evidence, the sale officer of the head office of complainant's bank has been examined as PW-2, who has stated in his evidence that, as per the awarded passed by the JRCS dated 12-1-2012, he has visited the mortgaged property on 18-4-2012 to issue notice regarding execution of arbitration award and then the accused has voluntarily issued the Ex-P-2 and another cheque for discharge of loan due amount standing in the name of his late father. 15 C.C.No.21935/2012
SCCH-18 Further in support of his evidence, he has produced the documents and the same are marked as Ex-P-10 to 13.
18. Thereafter the counsel for the accused has cross- examined the PW-1 and 2 at length. In the cross-examination, dated 16-10-2014, the PW-1 has clearly stated that:
"It is true to suggest that, to execute the award passed by the JRC we went to collect the cheque from the accused It is false to suggest that, it is cheat the accused we have filed a false case.
It is true that, I was not present at the time of receipt of the cheque from the accused. It is true that, I am not having personal knowledge on what circumstances the accused had issued the cheque.16 C.C.No.21935/2012
SCCH-18 It is true to suggest that, on 18-4-2012 when cheque was collected from the accused I was not present.
It is true to suggest that, on the date of collection of cheque, sale officers went to the accused house with attachment order. Further she has stated in her cross-examination that:
I do not know whether the accused has issued the cheque voluntarily or our officials have collected forcibly. After receiving the endorsement of the Syndicate Bank regarding the dishonor or the cheque we have not enquired the accused why he had given instruction to his banker as stop payment.
"It is false to suggest that, accused is not liable to pay any amount to the complainant society." 17 C.C.No.21935/2012
SCCH-18 Further the PW-2 has also stated in his cross-examination dated 04-12-2014 that:
"It is false to suggest that, either our bank or myself having no right to execute to serve the form No.6. I have document to show that our bank has right to execute or serve the form No.6, in this regard I have produced Xerox copy.
It is false to suggest that, contents of my affidavit filed in chief examination are false and the contents are not within my knowledge."
On perusal of the above evidence of PW-1 and 2, it is clear that the defence of the accused is that, on the date of issuance of alleged cheque, the official of the complainant bank has taken the Ex-P-2 cheque from him forcibly.
Further another the defence of the accused is that, on the date of issuance of cheque, the Honb'le Karnataka Appellate 18 C.C.No.21935/2012 SCCH-18 Tribunal has stayed the execution of award passed by the JRCS and as such, there was no legally recoverable debt.
19. To prove the said defence, the accused has examined himself as DW-1 and he has stated in his evidence that, he was not aware of the award passed by the JRCS and he has not received any notice from the JRCS. Further he has stated in his evidence that, after coming to know about the award passed by the JRCS, he and his family members have preferred an appeal before the Hon'ble KAT and the Hon'ble KAT has set aside the order passed by the JRCS. Thereafter again the complainant bank has filed another false case against him and other his family members before the JRCS and then, the JRCS has passed the award. Further he has stated in his evidence that, as per the award passed by the JRCS, the sale officer of the complainant bank namely Shivashankar along with other 4 persons came to his house to execute the award passed by the 19 C.C.No.21935/2012 SCCH-18 JRCS, then he came to know about the said order, then the official of the complainant's bank have forcibly obtained the cheque from him and as such, he has issued the stop payment letter to his bank.
In support of his evidence, he has produced the documents and the same are marked as Ex-D2 to 6. Further during the course of cross-examination of PW-2, the accused has got marked one document as Ex-D1.
20. Thereafter the counsel for the complainant's bank has cross-examined the DW-1 at length. In the cross-examination dated 7-4-2015, the DW-1 has stated that:
"I have not filed any objection to the complainant society by stating that I am not liable to pay the loan amount availed by my father. I have not intimated the death of my father to the complainant bank since I am not aware of the loan transaction. 20 C.C.No.21935/2012
SCCH-18 It is true in which house, I am residing is standing in the name of my father.
It is false to suggest that, at the time of service of the notice in execution petition filed on the basis of the order passed in dispute No.2732/05-06 Ex-P-19, I have voluntarily issued the disputed cheque.
I do not know said complaint was closed by the police as there is no substance in the complaint".
On perusal of the above evidence, it appears that, the allegation of the accused is that, the officials of the complainant's bank have taken the Ex-P-2 cheque and another cheque from him forcibly and as such, he has lodged the complaint before the concerned police.
21 C.C.No.21935/2012
SCCH-18 On the other hand, the contention of the complainant's bank is that, to discharge the debt, the accused has issued the cheques voluntarily to its officials and thereafter to escape from the liability, he has lodged the false complaint against the officials of the bank.
21. On perusal of the evidence of PW-1 and 2, it appears that, though the counsel for the accused has cross-examined the Pw-1 & 2 at length, but nothing has been elicited from them to support the version of the accused that, the PW-2 has taken the Ex-P-2 i.e. cheque from him forcibly. Further on perusal of Ex-P-8 i.e. copy of complaint, it shows that, on 18-4-2012, the accused has lodged the complaint before the Adugodi police alleging that the PW-2 and others have taken 2 cheques from him forcibly. Further on perusal of Ex-P-9 i.e. copy of reply letter, it shows that, the PW-2 has submitted the letter before 22 C.C.No.21935/2012 SCCH-18 the concerned police contended that the accused has issued the cheques voluntarily to discharge the debt.
22. Considering the above facts and also on perusal of evidence of PW-2 coupled with Ex-P-8 and 9, it appears that, after submitting the explanation by the PW-2 before the police, the concerned police have not proceeded further against the PW-2 and other his official. Considering the above facts, I am of the opinion that, as per the version of the accused, if at all the official of the complainant's bank has taken the cheque from him forcibly and to that effect the concerned police have not proceeded against the bank officials, then it was the duty of the accused to take action against the officials of the complainant's bank in appropriate forum. But on perusal of evidence of DW-1, it shows that, admittedly till today, he has not taken any steps against the officials of the complainant's bank according to law. Considering the above facts, I am of the 23 C.C.No.21935/2012 SCCH-18 opinion that, the contention of the accused is not acceptable one.
23. Further as stated above that, the contention of the accused is that, on the date of presentation of complaint, there was no legally recoverable debt and as such, the complaint filed by the complainant bank is not maintainable one. To prove the said fact, the accused has relied upon the copy of appeal memo filed before the Hon'ble KAT. On perusal of copy of appeal memo, it shows that, the accused and other his family members have preferred an appeal before the Hon'ble KAT against the award dated 12-1-2012, passed by the JRCS. Further on perusal of copy of order sheet (unmarked) available in the file, it shows that, after hearing the parties, the Hon'ble KAT has passed the order dated: 27.04.2012 by staying the execution and award passed by the JRCS, with a condition that the Appellants shall deposit an amount of Rs.30,000/- before the Tribunal. On the 24 C.C.No.21935/2012 SCCH-18 other hand, as per the version of the complainant and accused itself shows that, the accused issued the Ex-P-2 cheque and another cheque on 18-4-2012. Considering the above facts and on perusal of copy of order passed by the Hon'ble KAT, it appears that, as on the date of issuance of cheque, there was no stay order in respect of award passed by the JRCS. Considering the above facts and for the above reason, I am of the opinion that, the contention of the accused is that, when the issuance of cheque there was no legally recoverable debt is not acceptable one.
24. Further on perusal of the evidence of PW-1 and 2 coupled with Ex-P-2 and 3 i.e. cheque and Bank memo, it shows that, the Ex-P-2 cheque is returned with an endorsement that "payment stopped by drawer". On the other hand, the contention of the accused is that, the officials of the complainant's bank has taken the Ex-P-2 cheque from him 25 C.C.No.21935/2012 SCCH-18 forcibly. But as already opined that, the above contention of the accused is not supported with proper documents and the accused has failed to prove the said fact by producing proper documents. Considering the above facts, I am of the opinion that, the accused has failed to prove that, he has issued the "stop payment instruction" to the bank for bonafide reason.
25. At this stage, I have gone through the citation relied by the counsel for the complainant reported in (2012) 13 SCC 375 (Laxmi Dyechem Vs. State of Gujarath and others), wherein the Hon'ble Apex Court has observed at para No.28 of the above Judgment is as under:
"What is wished to be emphasized is that maters arising out of "stop payment" instruction to the bank although would constitute an offence under Section 138 of the NI Act since this is no longer res integra, the same is an offence subject to the 26 C.C.No.21935/2012 SCCH-18 provisions of Section 139 of the Act and hence, where the accused fails to discharge his burden or rebuttal by proving that the cheque could be held to be a cheque only for discharge of a lawful debt, the offence would be made out. Therefore, the cases arising out of stop-payment situation where the drawer of cheques has sufficient funds in his account and yet stops payment for bona fide reasons, the same cannot be put on a par with other variety of cases where the cheque has bounced on account of insufficiency of funds or where it exceeds the amount arranged to be paid from that account, since Section 138 cannot be applied in isolation ignoring Section 139 which envisages a right of rebuttal before an offence could be made out U/s.138 of the Act as the legislature already 27 C.C.No.21935/2012 SCCH-18 incorporates the expression "unless the contrary is proved" which means that the presumption of law shall stand and unless it is rebutted or disproved, the holder of a cheque shall be presumed to have received the cheque of the nature referred to in Sec.138 of the NI Act, for the discharge of a debt or other liability. Hence, unless the contrary is proved, the presumption shall be made that the holder of a negotiable instrument is holder in due course."
On going through the above Judgment, the above mentioned observation of the Hon'ble Apex Court is aptly applicable to the case on hand.
Further it is the duty of the accused to prove that, he has not issued the Ex-P-2 cheque for nature referred U/s.138 of NI Act. As per Sec.139 of NI Act, unless the rebuttal evidence or 28 C.C.No.21935/2012 SCCH-18 contrary proved, the court shall presume that the cheque in question was issued towards part or full payment of the debt or liability.
On perusal of Ex-P-4 and Ex-P-4(a) i.e. copy of notice and postal receipts, it reveals that, the complainant has issued the notice to the accused demanding the payment of cheque amount and it was duly served upon him and the said notice was issued within the stipulated time.
26. Further as stated above that, in this case, the accused has not produced any rebuttal documents to disprove the version of the complainant bank. Under such circumstances, I am of the opinion that the presumption available U/s.139 of NI Act is fully available in favour of the complainant Bank.
Considering the above facts and circumstances of the case and on appreciation of evidence of PW-1 and 2 coupled with documents and for the above reason, I am of the opinion that, 29 C.C.No.21935/2012 SCCH-18 the complainant's bank has proved his version against the accused by producing cogent and corroborative evidence and thereby proved its case as contended in the complaint. For the above reason, I answer the point No.1 and 2 in the affirmative.
27. POINT No.3: In view of findings on point No.1 & 2, I proceed to pass the following:
O R D E R The accused is hereby convicted acting U/s.255(2) of Cr.P.C. for the offence punishable U/s.138 of NI Act.
The accused is sentenced to pay a fine of Rs.3,00,000/-. In default of payment of fine, he shall undergo simple imprisonment for a period of six months.
Out of the fine amount collected from the accused, an amount of Rs.2,95,000/- shall be paid to 30 C.C.No.21935/2012 SCCH-18 the complainant bank as a cheque amount and compensation and remaining amount of Rs.5,000/- shall be remitted to the state after appeal period.
Bail bond of the accused is stand cancelled. (Dictated to stenographer directly on computer, corrected, signed and then pronounced by me in open court on this 5th day of February 2016).
(VEERANNA SOMASEKHARA) XXIX ACMM, BANGALORE.
ANNEXURES List of witnesses examined on complainant's side:
P.W.1. S.N.Shashikala P.W.2. P.S.Shivashankar List of documents exhibited on complainant's side:
Ex-P1 Authorization letter
Ex-P2 Cheque
Ex-P2(a) Signature of the accused
Ex-P3 Memo issued by Syndicate Bank
Ex-P4 Office copy of legal notice
Ex-P4(a) Postal receipt
Ex-P5 Reply notice
31 C.C.No.21935/2012
SCCH-18
Ex-P5(a) Cover
Ex-P6 Copy of Statement of account
Ex-P7 Complaint
Ex-P8 Copy of complainant submitted before the SHO
Ex-P9 Letter submitted before PI, Adugodi PS
Ex-P10 Certified copy of Form No.1
Ex-P11 Certified copy of execution petition
Ex-P12 Certified copy of orders passed by ARCS
Ex-P13 Certified copy of Form No.6
Ex-P13(a) Endorsement on Ex-P-13
Ex-P14 Xerox copy of death certificate
Ex-P15 Certified copy of revision petition No.84/2006
Ex-P16 Certified copy of Orders passed by Hon'ble High Court
in WP.7275/2007
Ex-P17 Certified copy of rejoinder filed in WP.7275/2007
Ex-P18 Certified copy of Orders passed by Hon'ble High Court
in WP.6597/2002
Ex-P19 Certified copy of orders passed by JRCS
Ex-P20 Copy of resolution
Ex-P21 Mortgage deed
List of witnesses examined on accused side: D.W.1: K.Narayana Raju List of documents exhibited on accused side:
Ex-D1 Xerox copy of letter and cheques
Ex-D2 Copy of memorandum appeal
Ex-D3 Endorsement
Ex-D4 Certified copy of Orders passed by Hon'ble High Court
in WP.6597/2002
32 C.C.No.21935/2012
SCCH-18
Ex-D5 Certified copy of Orders passed by Hon'ble High Court in WA.1677/2009 dated 12-10-2009 Ex-D6 Certified copy of Orders passed by Hon'ble High Court in WP.7275/2007 (VEERANNA SOMASEKHARA) XXIX ACMM, BANGALORE.