Bangalore District Court
Sri. V.V.Ramana vs Sri. Purushotham on 8 May, 2018
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 8th day of May 2018
Present: Smt. Saraswathi.K.N, B.A.L.,LL.M.,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C. No.20489/2016
Complainant : Sri. V.V.Ramana,
S/o Late Vengama Naidu,
Aged about 50 Yrs,
Auditor,
No.501/1,
Datta Complex,
12th Main Road,
Padmanabhanagar,
Bengaluru-560 070.
(Rep. by Sri.S.R.Sreeprasad.,
Adv.,)
- Vs -
Accused : Sri. Purushotham,
S/o Venkatappa Naidu,
Aged about 42 Yrs,
No.46, 2nd Cross,
1st Main, Sahyadri Layout,
4th Phase, J.P.Nagar,
Bengaluru-560 078.
(Rep.by Sri.M.V.Chandra Shekar,
Adv.,)
Case instituted : 3.8.2016
2 C.C.No.20489/2016 J
Offence complained of : U/s 138 of N.I. Act
Plea of accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 8.5.2018
JUDGMENT
The Complainant has filed this complaint against the accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant that, the Accused and he are known to each other. The Complainant is an Auditor and the Accused is a Builder and the former used to audit the accounts of the latter every year. Out of the said relationship, the Accused had requested him to lend a sum of Rs.8.00 Lakhs on 8.4.2016 to meet his immediate financial requirements. The Accused had also promised him that, he would repay the said loan amount to him within two months. Believing the words of the Accused, he arranged the money and paid a sum of Rs.8 Lakhs to him on 11.4.2016 and towards the repayment of the said amount, the Accused issued a cheque dated 9.6.2016 bearing No.932223 drawn on 3 C.C.No.20489/2016 J the Canara Bank, Padmanabhanagar Branch, Bengaluru, assuring that, the same would be honoured on it's presentation on it's due date.
3. The Complainant has further submitted that, as per the instructions of the Accused, when he presented the said cheque for encashment on 9.6.2016, the same came to be returned dishonored as "Funds Insufficient" vide bank endorsement dated 16.6.2016. Thereafter, left with no other alternative, he got issued a legal notice to the Accused through RPAD on 4.7.2016 calling upon him to pay the cheque amount within 15 days from the date of receipt of the said legal notice. Despite the receipt of the said legal notice, the Accused has neither replied nor has he paid the cheque amount to him. Hence the present case.
4. The Complainant has led his pre-summoning evidence on 7.9.2016 and he has filed his affidavit-in- lieu of his sworn statement in which he has reiterated the complaint averments.
4 C.C.No.20489/2016 J5. In support of his oral evidence, CW1 has produced and relied upon the documentary evidence as per Ex.C.1 to Ex.C.6, which are as follows:
Ex.C1 is the disputed cheque, in which, the signature is identified by P.W.1 as that of the Accused as per Ex.C1(a), the Bank memo is at Ex.C2, the office copy of the legal notice as per Ex.C3, the Postal Receipt as per Ex.C4, the Postal Acknowledgement as per Ex.C5 and the Reply Notice a per Ex.C6.
6. The certified copies of the chief-evidence and the cross-examination of the Accused in C.C.No.7608/2016 are marked as Ex.P8 and 9 respectively through D.W.1.
7. Prima-facie case has been made out against the Accused and he has been summoned vide the order of the same date.
8. The Accused has appeared before the court on 21.01.2017. He has been enlarged on bail and the substance of the accusation has been read over to him, to which he has pleaded not guilty and has stated that he has his defence to make.
5 C.C.No.20489/2016 J9. In his post-summoning evidence the Complainant is examined as P.W.1.he has filed his affidavit in which he has reiterated the complaint averments.
10. In support of his oral evidence, he has produced and relied upon the documentary evidence at Ex.P.7, being his statement of accounts.
11. The statement of Accused the under Sec.313 of the Cr.P.C., has been recorded on 28.12.2017. He has denied incriminating evidence found against him and has chosen to lead his rebuttal evidence.
12. The Accused has examined as DW1 and he has filed his affidavit, which has been accepted by this court by relying upon the decision of our Hon'ble High Court in Afzal Pasha Vs., Mohamed Ameerjan, reported in LAWS (KAR) 2016 (8) 131, by relying upon one of the directions of the Hon'ble Apex Court in the case of Indian Bank Association Vs., Union of India and others, reported in 2014 (5) SCC 590.
6 C.C.No.20489/2016 J13. The gist of the defence of the Accused in his affidavit is that, by profession, he is a Civil Contractor and he had hired the services of the Complainant as his Auditor and Tax Consultant. During the year 2011, as usual, he had instructed the Complainant to file his IT returns, for which, he had given his income details and a signed blank cheque i.e. the cheque in dispute for the payment of his income tax to the Complainant and after few days, the Complainant had asked him to do some interior and plumbing works in his building for a very low quotation, for which, it was not permissible for him to do the work. Hence, he refused to do the said work and for the said reason, the Complainant was angry with him and did not even talk to him for few months. Later, when he contacted the Complainant and asked the status of the filing of his IT returns, he gave him the ITR form and asked him to pay the tax paid amount and his fee. When he asked about his cheque, the Complainant had told him that due to overwriting by his staff, he has destroyed the said cheque and believing him he paid the amount to him in cash and returned.
7 C.C.No.20489/2016 J14. Thus according to the Accused, after 2013, when the Complainant had asked him to do plumbing works for his apartments, for which he did not agree, both of them separated from each other and as such he stopped taking the services of the Complainant as his Auditor.
15. It is the further defence of the Accused that, after the service of the legal notice, he caused a reply notice to the same calling upon the Complainant to return his cheque. Inspite of it, the Complainant has failed to do so and for the same reason, he approached the jurisdictional police for help, which also was refused. Hence he has filed a Private Complaint against the Complainant before the court of the IV ACMM, Bengaluru in P.C.R.No.531/2017 for the offences punishable under Sec.406 and 420 of IPC, which has been referred for investigation to the jurisdictional police.
16. In support of his oral evidence, D.W.1 has produced and relied upon the following documentary evidence:-
8 C.C.No.20489/2016 Ji) His IT Returns concerning the assessment years 2011-12 and 2012 -13 as per Ex.D1 and D2 respectively;
ii) The office copy of the reply notice as per ExD.3 and
iii) The Certified copies of the order sheet and the Private Complaint of PCR No.531/2017 as per Ex.D4 and D5 respectively.
17. Likewise, in the cross-examination of the Accused, the certified copies of his chief evidence and cross-examination of C.C.No.7608/2016 have been marked as Ex.P.8 and P9 respectively. Accordingly he has prayed for his acquittal.
18. The learned counsel for the Complainant has addressed his arguments, during the course of which, he has prayed for the conviction of the Accused on the ground that, the Accused has admitted his acquaintance with the Complainant, though he has denied the transaction in question. No doubt, the Accused has caused the Reply Notice to the Complainant as per Ex.C.6, which is the same as that of Ex.D3. Though the Accused has denied the 9 C.C.No.20489/2016 J transaction of loan as claimed by the Complainant in this case, the latter has proved the transaction with the documentary evidence as per Ex.P.7, which proves the withdrawal of the amount by the Complainant through which, he has advanced the loan amount to the Accused.
19. It is also argued that, though the Accused has relied upon the documentary evidence as per Ex.D1 to 5, he has failed to probabalize his defence version. Moreover, there is no probable and believable evidence lead by the Accused so as to disbelieve the case of the Complainant. On the contrary, the Complainant has been able to establish through documentary evidence at Ex.P.8 and 9 the conduct of the Accused that, he is a habitual borrower of loans from various persons and that he is in the habit of issuing the cheques and not honoring them. Accordingly, he has prayed for the conviction of the accused.
20. On the contrary, the learned Defence Counsel has addressed his arguments, during the course of which, he has prayed for the acquittal for the Accused 10 C.C.No.20489/2016 J on the ground that, though the complainant has relied upon the documentary Evidence at Ex.P.7 to prove that he had withdrawn Rs.8 Lakhs from his account on 11.4.2016, there is no proof of the fact that, the said amount has been in fact lent by him to the Accused. Further there are no Books of Accounts produced by the Complainant to show that there existed a transaction of the loan as claimed by the Complainant in this case.
21. Moreover, even in Ex.P.7, there is no balance of more than Rs.40,000/- in the account of the Complainant and he has also admitted in his cross- examination that, he has availed a housing loan. Moreover the Complainant is admittedly an Auditor and as such his alleged lending of Rs.8 Lakhs by way of cash that too without collecting any security documents from the Accused is highly unbelievable.
22. It is also argued that, after 2011-12, there was no contact between the Complainant and the Accused and except the evidence of the Complainant, there is no witness to the alleged loan transaction and the PCR as per Ex.D4 has been filed by the Accused 11 C.C.No.20489/2016 J the filing of the present case by the Complainant and the document at Ex.P.8 and 9 are not related to the accused. Hence it is clearly proved by the Accused that, the Complainant has misused the cheque in dispute that was given to him by the former in relation to his income tax purpose. As such the defence of the accused is probable.
23. In support of his arguments, the Learned Defence Counsel has relied upon the following decisions:-
i) Suresh Vs., Narender Gautam, reported in II (2016) BC 493 (P & H);
ii) L.Raju Vs., Gurappa Reddy, reported in Crl.A.No.13/2010, Hon'ble High Court of Karnataka;
iii) J.Kalegowda Vs., K.Venkatesh, reported in Crl.A.No.1640/2007,
iv) K.V.Subba Reddy Vs., K.Raghava Reddy, reported in LAWS (KAR) 2014 (2) 528;
v) Mukesh Garg Vs., Sunil Mehra, decided by the Delhi District Court;12 C.C.No.20489/2016 J
vi) B.Sunitha Vs., The State of Telangana & Others, reported in Crl.A.No.2068/2017, SC.
and accordingly, he has prayed for the acquittal of the Accused.
24. I have considered the submissions and perused the record carefully.
25. Sec.138 of the Negotiable Instruments Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence under Sec.138 of the Negotiable Instruments Act are:-
(i) Drawing up of a cheque by the Accused towards payment of an amount of money, for the discharge, in whole or in part, of any debt or any other liability;
(ii) Return of the cheque by the Bank as unpaid;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of the notice under the proviso (b) to Section 138.
The Explanation appended to the Section provides that, the "debt or other liability" for the 13 C.C.No.20489/2016 J purpose of this Section means a legally enforceable debt or other liability.
26. Apart from this, Sec. 139 of the Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms:-
"It shall be presumed, unless the contrary is proved, that:-
The holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, of any debt or other liability".
27. Also, Sec. 118 of the Negotiable Instruments Act states, "Until the contrary is proved, the following presumptions shall be made:-
(a) That every Negotiable Instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
28. Thus, the Act clearly lays down presumptions in favour of the Complainant with regard to the 14 C.C.No.20489/2016 J issuance of the cheque by the Accused towards the discharge of his liability in favour of the Complainant.
29. It is a well settled position of law that, the defence of the Accused, if in the nature of a mere denial of the case of the Complainant will not be sufficient to hold it as a probable defence. The bare denial of the passing of consideration apparently does not appear to be any defence. Something which is probable must be brought on record for getting the benefit of shifting the onus of proof to the Complainant.
30. It is also a well settled position of law that, once the cheque is proved to be relating to the Account of the Accused and he accepts and admits the signature on the said cheque, then the initial presumption as contemplated under Sec. 139 of the N.I.Act has to be raised by the courts in favour of the Complainant. The presumption referred to in Sec.139 of the N.I.Act is a mandatory presumption and not a general presumption, but the Accused is entitled to rebut the said presumption. What is required to be established by the Accused in order to rebut the 15 C.C.No.20489/2016 J presumption is different from each case under given circumstance. But the fact remains that a mere plausible explanation is not expected from the Accused and it must be more than a plausible explanation by way of rebuttal evidence. The defence raised by the Accused by way of rebuttal evidence must be probable and capable of being accepted by the court.
31. No doubt the initial mandatory statutory presumptions under Sec.118 and 139 of the N.I.Act are in favour of the Complainant. However they are rebuttable presumptions and the Accused is expected to rebut the presumptions by raising a probable defence.
32. Under the scheme of the Act, the onus is upon the Accused to rebut the presumptions in favour of the Complainant by raising a probable defence.
33. It is pertinent to note that, there is no dispute with regard to the fact that, the cheque in dispute belongs to the Accused with signature on it, and there is also no dispute with regard to the issuance of the same by the Accused in favour of the 16 C.C.No.20489/2016 J Complainant. However, there is a serious dispute on the part of the Accused with regard to the transaction of loan to the extent of Rs.8 Lakhs as alleged by the Complainant in this case. No doubt in such circumstance, the onus of proving the existence of such transaction is upon the Complainant.
34. In the light of the defence of the Accused with regard to the denial of the transaction in question, during the cross-examination of the Complainant, the Accused has firstly raised defence with regard to his financial capacity of the Complainant.
35. It is to be seen that, there is no dispute that the Complainant is an Auditor in profession and that he is residing in Pent House in an Apartment since 2013. It is also elicited from P.W.1 that, he was the Auditor of the Accused and that he used to file I.T.Returns on behalf of the Accused till the financial year 2012-13.
36. It is further pertinent to note that, according to the Complainant, he has lent Rs.8 Lakhs to the 17 C.C.No.20489/2016 J Accused by having withdrawn same from his Account on 11.4.2016. Though initially the Complainant had not produced any document to substantiate the said fact, subsequently he has produced his Bank Statement as per Ex.P.7 to show that, on 11.4.2016, he has withdrawn Rs.8 Lakhs from his account.
37. No doubt except, the said withdrawal of Rs.8 Lakhs by the Complainant from his bank account on 11.4.2016, there is no other document to corroborate his claim that, there existed transaction of loan to the extent of Rs.8 Lakhs between him and the Accused.
38. However, it is relevant to note that, whenever the Complainant able to establish before this court that, he had possessed the requisite funds with him as on the date of the transaction in question, there is no reason that, this court to disbelieve his claim that he had the source of funds, so as to lend the loan to the Accused.
39. No doubt, as per the relevant entry on 11.4.2016 at Ex.P.7, the amount of Rs.8 Lakhs has been withdrawn by the Complainant through self-
18 C.C.No.20489/2016 Jcheque and instead of doing, he could have very well lent same amount to the Accused through cheque, which could have helped him in proving his case easily. However, according to the Complainant, the Accused had pleaded urgency, due to which, he lent the loan to him through cash. Interestingly, when the Complainant has claimed so, there is no further suggestion put to him by denying such claim made by him by the Accused.
40. No doubt, it is also elicited from the Complainant that, the I.T. returns of the Accused for the Assessment years 2011-12 and 2012-13, as per Ex.D1 and D2 were the last returns filed by him on behalf of the Accused. But, solely for the said reason, it cannot be imagined that, after 2012-13, there was no contact between the parties and there was no cordial relationship between them as claimed by the Accused in this case.
41. However, it is pertinent to note that, according to the Accused, at the time of filing his I.T. returns for the assessment year 2012-13, the Complainant had collected the cheque in dispute from 19 C.C.No.20489/2016 J him, as a singed blank cheque for the purpose of the payment of his income tax and thereafter the Complainant collected the tax amount from him as well as his fees by way of cash and failed to return the cheque in dispute to him, on the pretext that, due to overwriting by his staff on the said cheque, the same had been destroyed by him during the year 2013.
42. However according to the Accused, as he didn't heed to the request of the Complainant to do some plumbing work the apartment of the latter at Nandakumar Layout, Bengaluru, at a very low quotation, the Complainant has misused the cheque in dispute and has falsely implicated him in this case.
43. However, it is pertinent to note that, in his cross-examination, the Accused has not been able to withstand to the suggestions that were put to him by the learned counsel for the Complainant. The Accused has claimed that, he has paid extra tax amount of about Rs.50,000/- to Rs.1,00,000/- during the period from 2008 to 2011, the payments of which, used to be made by him through Complainant by way of cash.
20 C.C.No.20489/2016 J44. However he has admitted the suggestion that, as per Ex.D.2, he has paid a sum of Rs.47,010/- for the Assessment year 2012-13 and that as per his I.T. returns at Ex.D1 and 2, apart from the TDS, he has not paid any extra tax for the Assessment Years 2011- 12 and 2012-13.
45. Likewise, it is also elicited from him D.W.1 that, presently, he is not doing any departmental works and that the payments which are made to him after 2011, have been made after deducting the TDS. As rightly pointed out by the learned counsel for the Complainant in his arguments, the entire defence theory put forth by the Accused is completely destroyed by the Accused himself with his admissions elicited in his cross-examination.
46. However, even otherwise, nothing prevented the Accused from pleading the said defence version in his Reply Notice at Ex.C6, in which, he has put forth his defence, at the earliest and he has also admitted that, he has not issued any stop payment instructions pertaining to the subject cheque to his banker and he 21 C.C.No.20489/2016 J has not caused any notice to the Complainant calling upon him to return his cheque to him.
47. Further the Accused has clearly admitted the suggestions that, during the Assessment Years 2011- 12 and 2012-13, he has not paid any extra tax, apart from the TDS shown in Ex.D1 and D2 and he used to make payment towards income tax through cash through his Auditor / Complainant. In such circumstance, there was absolutely no necessity for the Accused to issue his signed blank cheque to the Complainant for the purpose of his income tax payment. Thus, it is clearly established by the learned counsel for the Complainant that, the Accused has come up with a highly untenable and improbable defence, which cannot be accept and believe by this court.
48. Likewise by confronting the certified copies of his deposition as per Ex.P.8 and P9 to the Accused, the learned counsel for the Complainant has also emphasized before this court that, it is the habit of the Accused to avail loans from various persons and issue 22 C.C.No.20489/2016 J cheques towards their repayment and thereafter get them bounced.
49. No doubt, the findings given in a particular case has to be considered in the light of facts and circumstances of that particular case and the same will not have any binding effect on the courts in some other proceeding, even if it to be between the same parties. However, in the present case the Complainant has been successfully establish before this court that as per Ex.P.7, he had his requisite source of funds so as to lend to the Accused and that the Accused has issued subject cheque to him towards the repayments of the said loan to him.
50. Moreover, it is also pertinent to note that, though it is suggested to the Complainant that, he has misused the cheque in dispute, there is absolutely no cross-examination with regard to the contents of the subject cheque, though there is a suggestion put to PW1 that he has filled up the contents of the subject cheque and presented the same in the Bank. Even if it is true that, the Complainant has filled up the contents of the subject cheque, even the said defence 23 C.C.No.20489/2016 J is not available to the Accused, in view of the Sec.20 of the N.I.Act.
51. Moreover, the conduct of the Accused in having chosen to remain silent, despite being aware of the fact that, the alleged signed blank cheque was in the custody of the Complainant itself indicates the fact that, he is guilty of the offence punishable under Sec.138 of the N.I.Act. Even otherwise, the Accused, who is admittedly an educated person could have chosen to take appropriate action against the Complainant, at least after having appeared in this case. The omission on the part of the Accused in this regard also leads to an adverse inference against him.
52. No doubt, the Accused has filed a Private Complaint against the Complainant before the 4th ACMM, Bengaluru as per Ex.D4. But as rightly pointed out by the learned counsel for the Complainant, the said Private Complaint has been filed by the Accused against the Complainant after the present case came to be filed against him before this court and immediately after he having chosen to appear in this case through his counsel on 05.11.2017.
24 C.C.No.20489/2016 J53. Therefore, as could be seen from the order sheet, after the Accused has got filed vakalatnama on his behalf through his counsel on 5.11.2017, he has filed the Private Complaint against the Complainant as per Ex.D4 and D5 respectively. Therefore the conduct of the Accused for having done so also goes to show that, he has done so only with intention to take a false defence in this case.
54. Therefore, by appreciating the entire evidence on record, it clearly goes to show that the Complainant has successfully proved his case beyond reasonable doubt and on the contrary, the Accused has failed to probabalize his defence and thereby to rebut the presumptions available in favour of the Complainant under Sec.118 and 139 of the N.I.Act. Accordingly, I proceed to pass the following:-
ORDER By exercising the power-conferred u/s 255(2) of Cr.P.C., the Accused is hereby convicted for the offence punishable u/s 138 of the Negotiable Instruments Act.
He is sentenced to pay a fine of Rs.8,50,000/- (Rupees Eight Lakhs Fifty Thousand Only).25 C.C.No.20489/2016 J
Out of the fine amount so collected Rs.8,40,000/-(Rupees Eight Lakhs Forty Thousand Only) is ordered to be paid to the Complainant as Compensation and the balance of Rs.10,000/- (Rupees Ten Thousand only) is ordered to be adjusted towards cost to the State Exchequer.
In default of payment of such compensation, the Accused shall undergo Simple Imprisonment for one (1) year.
The bail bond of the Accused stands discharged.
Issue free copy of the Judgment to the Accused forthwith.
(Dictated to the Stenographer, transcript thereof is computerized and print out taken by her, verified, and then pronounced by me in the open Court on this the 8th day of May 2018).
(SARASWATHI.K.N), XVI Addl.CMM., Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri. V.V.Ramana
2. List of documents exhibited on behalf of the Complainant:-
Ex.C-1 : Original Cheque;
Ex.C-1(a) : Signature of the accused;
26 C.C.No.20489/2016 J
Ex.C-2 : Bank memo;
Ex.C-3 : Copy of the Legal Notice;
Ex.C-4 : Postal receipt;
Ex.C-5 : Postal acknowledgement;
Ex.C-6 : Reply Notice;
Ex.C-7 : Statement of Accounts.
Ex.P-8 and 9 : Certified copies of the chief evidence and cross-examination of the witness in CC No.7608/16 (Marked through D.W.1)
3. List of witness/s examined on behalf of the Accused:-
D.W.1 : Sri. Purushotham
4. List of documents exhibited on behalf of the Accused:-
Ex.D-1 and 2 : I.T.Returns for the Assessment Years 2011-12 and 2012-13;
Ex.D-3 : Office copy of the Reply Notice; Ex.D-4 and 5 : Certified copies of the Order sheet and the complaint of P.C.R.No.531/17.
(SARASWATHI.K.N), XVI ACMM, Bengaluru City.27 C.C.No.20489/2016 J
8.5.2018 Judgment pronounced in the open court vide separate order.
ORDER By exercising the power-
conferred u/s 255(2) of Cr.P.C., the Accused is hereby convicted for the offence punishable u/s 138 of the Negotiable Instruments Act.
He is sentenced to pay a fine of Rs.8,50,000/- (Rupees Eight Lakhs Fifty Thousand Only).
Out of the fine amount so collected Rs.8,40,000/-(Rupees Eight Lakhs Forty Thousand 28 C.C.No.20489/2016 J Only) is ordered to be paid to the Complainant as Compensation and the balance of Rs.10,000/- (Rupees Ten Thousand only) is ordered to be adjusted towards cost to the State Exchequer.
In default of payment of such compensation, the Accused shall undergo Simple Imprisonment for one (1) year.
The bail bond of the Accused stands discharged.
Issue free copy of the Judgment to the Accused forthwith.
(SARASWATHI.K.N), XVI ACMM, Bengaluru City.
29 C.C.No.20489/2016 J