Bangalore District Court
M/S. Shree Manjunathaswamy vs Sri. Manjunatha on 29 December, 2021
IN THE COURT OF THE XII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
Dated: This the 29th day of December 2021
Present : Sri Siddaramappa Kalyan Rao, B.A., LL.B.,
XII Addl. Chief Metropolitan Magistrate,
Bengaluru.
CC.No.1618 of 2017
COMPLAINANT/S: M/s. Shree Manjunathaswamy
Finance,
Maruthi Complex,
Kattigenahalli Bus Stand,
Bagalur Road,
Bengaluru - 560 064.
Represented by its Proprietor
Sri. R. Kashinath.
(Represented by
Sri. D.A.Shivakumar., Advocate)
- Vs -
ACCUSED: Sri. Manjunatha,
S/o. Muniyappa,
R/at: No:E-367,
Thimmarayaswamy Provision
Store,
5th Cross, 1st Main Road,
Maruthinagara, Yelahanka,
Bengaluru - 560 064.
(Represented by Sri.
Puttaswamy., Advocate)
Offence Under Section 138 of Negotiable
Instruments Act
2 CC.No.1618/2017
Plea of the accused Pleaded not guilty
Final Order Convicted
******
JUDGMENT
This complaint is filed under section 200 of Cr.P.C for the offence punishable under section 138 of Negotiable Instruments Act. 1881.
2. The brief facts of the complainant case is that:
Complainant is a firm carrying finance business lending money to needy person on prescribed rate of interest with valid Licence. Accused is known person to complainant and approached the complainant to lend a loan of Rs.1,00,000/- for interest to meet his financial and family commitments.
3. Complainant, knowing bonafide requirements of accused paid a sum of Rs.1,00,000/- on 03/06/2014 by way of cash. At the time of receipt of amount, accused has agreed to repay the said amount with interest and other 3 CC.No.1618/2017 incidental charges within short period and also issued an amount received receipt.
4. The accused is a defaulter and not paid the amount as agreed and liable to pay balance amount of Rs.1,60,040/-. When the complainant demanded to pay the amount, accused issued a cheque bearing No:762668 dated 22/11/2016 drawn on City Union Bank Limited, Yelahanka Branch, Bengaluru in favour of the complainant for a sum of Rs.1,60,040/- and assured to complainant that the said cheque will be honoured on its presentation. The said cheque is issued towards discharge of legally enforceable debt which includes interest, penal interest and other charges.
5. Hence, the complainant presented the said cheque through his Banker Corporation Bank, Gokula Branch, Yelahanka, Bengaluru on 22/11/2016, but it is dishonoured for the reasons "Funds insufficient" vide memo dated 24/11/2016. Thereafter, the complainant 4 CC.No.1618/2017 having no other choice issued legal notice to the accused through his counsel on 17/12/2016 and the said notice was duly served on the accused on 19/12/2016. The accused failed to issue reply notice. Hence, the present complaint is filed on 11/01/2017.
6. After filing of the complaint, this court has taken the cognizance of offence under section 138 of N.I Act and registered a Private complaint. After recording the sworn statement of the complainant, this court has registered the criminal case against the accused for the offence punishable under Section 138 of Negotiable Instruments Act. Summons issued to the accused. The accused appeared through his counsel and enlarged on bail. There afterwards, plea of accusation was read over and explained to accused in the language known to him and he pleaded not guilty and claims to be tried.
7. When the case was posted for recording of statement of the accused under section 313 of Cr.P.C., the 5 CC.No.1618/2017 accused has denied the entire incriminating evidence appearing against him. The accused is examined as D.W.1 and lead his side evidence, but not got marked any documents in support of his defence.
8. In order to prove the case, the Proprietor of complainant finance is examined as PW-1 and got marked documents from Ex.P.1 to Ex.P.8.
9. It is the specific defence of the accused that during the year 2015, one Jagadish has asked for a sum of Rs.1,00,000/- to accused, hence, accused has taken the said Jagadish to the finance of complainant and Rs.1,00,000/- loan was granted by complainant to said Jagadish. At that time, complainant finance had insisted for issuance of cheque for security purpose. Hence, on behalf of Jagadish, accused has issued the cheque for security purpose and at that time complainant has obtained the signature of accused on 5 to 6 blank papers. Accused has not obtained any loan amount from complainant and Ex.P.1 cheque is not issued for discharge 6 CC.No.1618/2017 of debt or liability and Ex.P.1 cheque has been misused by complainant which has been issued for security purpose and the complainant has filled the cheque according to his convenience and filed a false complaint against the accused. Hence, on the above said grounds prays to dismiss the complaint.
10. Heard the arguments of complainant counsel on 04/12/2021. The accused counsel remained absent. Hence, the arguments of accused counsel is taken as nil as per order dated 07/12/2021. Perused the entire oral and documentary evidence placed on record.
11. The following points arose for my consideration:
1. Whether the complainant proves that there is existence of legally recoverable debt as stated in the complaint?
2. If so, whether the complainant proves that Ex.P.1 cheque is issued towards discharge of legally recoverable debt by the accused?
3. Whether the complainant proves that the accused has committed an offence under 7 CC.No.1618/2017 Section 138 of Negotiable Instruments Act?
4. What order?
12. My findings to the above points are as under:
Point No.1 : In the affirmative;
Point No.2 : In the affirmative;
Point No.3 : In the Affirmative;
Point No 4 : As per final order,
for the following:
REASONS
POINTS NO.1 AND 2:
13. These points are taken together for common discussion in order to avoid repetition of facts.
14. It is the specific case of the complainant that complainant is a firm carrying finance business lending money to needy person on prescribed rate of interest with valid Licence. Hence, in view of the above said fact and since accused is known person to complainant, the accused approached the complainant to lend a loan of Rs.1,00,000/- for interest to meet his financial and family 8 CC.No.1618/2017 commitments. After complainant knowing bonafide requirements of accused, paid a sum of Rs.1,00,000/- on 03/06/2014 by way of cash. At the time of lending of money, accused has agreed to repay the said amount with interest and other incidental charges within short period and also issued an amount received receipt. The accused failed to repay the same and became defaulter and not paid the amount as agreed and liable to pay balance amount of Rs.1,60,040/-. When the complainant demanded to pay the amount, accused issued Ex.P.1 cheque bearing No:762668 dated 22/11/2016 drawn on City Union Bank Limited, Yelahanka Branch, Bengaluru in favour of the complainant for a sum of Rs.1,60,040/- and assured to complainant that the said cheque will be honoured on its presentation. The said cheque is issued towards discharge of legally enforceable debt which includes interest, penal interest and other charges. When the complainant presented the said cheque through his Banker Corporation Bank, Gokula Branch, Yelahanka, Bengaluru on 22/11/2016, however the said cheque is came to be 9 CC.No.1618/2017 dishonoured for the reasons "Funds insufficient" as per Ex.P.2 memo dated 24/11/2016.
15. To substantiate the above said contention, the Proprietor of complainant finance is examined as PW-1 and has marked the documents from Ex.P.1 to Ex.P.8.
Ex.P.1 is the cheque of City Union Bank Limited dated 22/11/2016 bearing No:762668 for a sum of Rs.1,60,040/- issued to Sri Manjunatha Swamy Finance. Ex.P.2 is the memo of Corporation Bank with respect to cheque bearing No:762668 for a sum of Rs.1,60,040/- and the above said cheque is came to be dishonoured for the reasons "Funds insufficient" on 24/11/2016. Ex.P.3 is the office copy of legal notice issued to accused dated 17/12/2016. Ex.P.4 is the postal receipt bearing No:RK3460335161IN. Ex.P.5 is the Postal Track consignment dated 19/12/2016 wherein the "Item is delivered" with respect to receipt bearing No:RK3460335161IN. Ex.P.6 is the consideration receipt executed by accused dated 03/06/2014 wherein the 10 CC.No.1618/2017 accused has issued a receipt for Rs.1,00,000/- from complainant finance and agreed to pay interest at the rate of 18 % per annum and undertaken to pay amount on daily basis. Ex.P.7 is the receipt executed by accused dated 22/11/2016. Ex.P.8 is the Licence issued by Co- Operative Department, Government of Karnataka in favour of the complainant finance dated 25/04/2013, wherein, the above said Licence is granted to complainant finance from 25/04/2013 to 31/03/2018.
16. To substantiate the above said contention, Proprietor of the complainant company is examined as PW-1, and he has reiterated the complaint averments in his affidavit evidence and he during his cross-examination has deposed that there are totally 4 members working in the complainant finance and he is known to complainant since from the last five years and accused is running a Provisional Store at Maruti Nagar and also doing real estate work. He has further deposed that accused has obtained loan on 03/06/2014 for business purpose. Further, on 11 CC.No.1618/2017 perusal of the complaint averments also the same fact has been stated by the complainant in his complaint averments that he has lent a sum of Rs.1,00,000/- on 03/06/2014 and the same is corroborated on perusal of Ex.P.6 which is the consideration receipt executed by accused, wherein the accused has agreed to pay a sum of Rs.1,00,000/- which is obtained from complainant finance with interest at the rate of 18% per annum and undertaken to pay the amount on daily basis. He has further denied to the suggestion that when the accused has brought another person to complainant finance, at that time accused has given Ex.P.1 cheque as security. Hence, to substantiate the above said contention, Ex.P.7 which is the receipt executed by the accused dated 22/11/2016, it reveals that accused has issued the cheque bearing No:762668 i.e., Ex.P.1 cheque for a sum of Rs.1,60,040/- which has been availed by him on 03/06/2014 for a sum of Rs.1,00,000/-. That means, the above said Ex.P.1 cheque has been not taken on 03/06/2014, but it has been taken on 22/11/2016 and on perusal of Ex.P.7, it is very much clear that Ex.P.1 cheque 12 CC.No.1618/2017 is not issued on 03/06/2014, but it is issued on 22/11/2016 in view of obtaining of loan amount of Rs.1,00,000/- from the complainant finance.
17. Further, he has deposed that the loan amount is given to accused on 03/06/2014 and at that time complainant has taken the signature of the accused on papers and further deposed that no any surety has been taken from the accused at the time of lending of money to accused. He further deposed that complainant finance will give money to the extent of Rs.1,00,000/- to persons who are in business and also they will lend up to the extent of Rs.2,00,000/- to the customers based upon the repaying capacity. He further deposed that Ex.P.1 cheque has been issued by accused when he has failed to repay. Hence,. discharge of the same, Ex.P.1 cheque has been issued by the accused. He has further denied to the suggestion that Ex.P.1 cheque has been filled by the complainant. He further denied to the suggestion that Ex.P.1 cheque has been issued by the accused which includes interest up to 13 CC.No.1618/2017 22/11/2016. He further denied to the suggestion that Ex.P.1 cheque is issued by the accused as security purpose in view of obtaining of loan by one Jagadish. Hence, on perusal of the above said cross-examination of PW-1, it reveals that complainant has stood by the complaint averments. He during his cross-examination has specifically deposed before the court saying that he has lent a sum of Rs.1,00,000/- to the accused on 03/06/2014 and at the time of availing of the loan amount, accused has agreed to pay interest along with incidental charges on daily basis. When he has failed to repay the loan amount along with accrued interest, complainant demanded to repay the loan amount and at that time accused has issued Ex.P.1 cheque and has executed Ex.P.7 receipt in favour of complainant for issuance of Ex.P.1 cheque for obtaining of loan amount of Rs.1,00,000/- from the complainant on 03/06/2014. Further, to show that complainant is running finance business, among all the documents produced by the complainant from Ex.P.1 to Ex.P.8, on perusal of Ex.P.8 it reveals that the Licence 14 CC.No.1618/2017 which has been taken by the complainant finance from Co- operative Department, Government of Karnataka which is valid from 25/04/2013 to 31/03/2018. That means as on the date of lending of money i.e., 03/06/2014 complainant is holding valid Licence for lending money in favour of his customers.
18. Further, the accused who is examined as D.W.1 in the present case also admits that Ex.P.1 cheque is belonging to the accused and it given in favour of complainant and also admits that his signature is appearing on Ex.P.1(a) and also admits that accused is running business as mentioned at Ex.P.3 notice address. On perusal of the Ex.P.5 which is the Postal Track consignment dated 19/12/2016, it goes to show that the notice at Ex.P.3 is came to be delivered on the accused as per Ex.P.5 Postal Track consignment as "Item delivered". That means notice issued by the complainant is duly served on accused and as per the Circular issued by Hon'ble High Court of Karnataka vide Ref.No:126/2021 15 CC.No.1618/2017 dated 25/11/2021, the Postal Track consignment showing as "Item Delivery" is deemed to be served. That means the notice issued as per Ex.P.3 is duly served on the accused as per Ex.P.5 track consignment details and Section 138(b) of N.I.Act is also complied by the counsel for complainant. Further, the accused also admits that the signature is appearing at Ex.P.6(a) and Ex.P.7(a) is the consideration receipt executed by accused dated 03/06/2014 in view of issuance of loan by the complainant for a sum of Rs.1,00,000/- and agreed to pay interest at the rate of 18% per annum and Ex.P.7 receipt executed by accused on 22/22/2016 wherein accused has issued Ex.P.1 cheque for discharge of debt which has been obtained by him on 03/06/2014 for a sum of Rs.1,00,000/-. Hence, the only defence which has been taken by the accused is that during the year 2015 one Jagadish has taken an amount of Rs.1,00,000/- from the complainant finance and accused has issued Ex.P.1 cheque as a security in favour of complainant finance and it is not issued for discharge of any debt or liability and it has been misused by the 16 CC.No.1618/2017 complainant and filled the cheque according to his convenience and filed a false complaint against the accused. If that is the defence of the accused that Ex.P.1 cheque has been obtained for security purpose and loan has been availed by Jagadish, to this effect no any documentary evidence are forthcoming from the side of the accused to substantiate the contention that Ex.P.1 cheque is belonging to accused and it has been issued in favour of complainant finance as security purpose. Hence, the above said defence which has been taken by the accused is without any documentary evidence and it is just a plausible explanation given by the accused only to avoid from the payment of the cheque amount. On the other hand, on perusal of the complaint averments clubbed with the documentary evidence and the admission by the accused who is examined as D.W.1, it goes to show that accused has taken loan amount of Rs.1,00,000/- from complainant on 03/06/2014 and agreed to pay interest along with incidental charges in favour of complainant and got executed Ex.P.7 receipt in favour of complainant and 17 CC.No.1618/2017 issued Ex.P.1 cheque in favour of the complainant and the above said debt which has been obtained by the accused is with regard to meet the financial and family commitments of accused and the above said debt is a legally enforceable debt.
19. Further, I rely upon the decision reported in Crl. Appeal No:230-31 of 2019, decided between Bir Singh V/s. Mukesh Kumar dated 06/02/2019 wherein at Para No:40 it has been clearly held that :-
"Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt".
Hence, the complainant has proved that Ex.P.1 cheque is issued by accused in favour of complainant for discharge of debt. Hence, in view of my above discussion, I answer Point No.1 and 2 in the "Affirmative". 18 CC.No.1618/2017 POINT No.3:-
20. It is the specific contention of the complainant that complainant is a firm carrying finance business lending money to needy person on prescribed rate of interest with valid Licence. Accused is known person to complainant and approached the complainant to lend a loan of Rs.1,00,000/- for interest to meet his financial and family commitments. Complainant knowing bonafide requirements of accused paid a sum of Rs.1,00,000/- on 03/06/2014 by way of cash. Thereafter, the accused became defaulter and not paid the amount as agreed and liable to pay balance amount of Rs.1,60,040/-. When the complainant demanded to pay the amount, accused in discharge of his liability issued Ex.P.1 cheque bearing No:762668 dated 22/11/2016 drawn on City Union Bank Limited, Yelahanka Branch, Bengaluru in favour of the complainant for a sum of Rs.1,60,040/- and assured to complainant that the said cheque will be honoured on its presentation. The said cheque is issued towards discharge of legally enforceable debt which includes interest, penal 19 CC.No.1618/2017 interest and other charges. When the complainant presented the said cheque through his Banker Corporation Bank, Gokula Branch, Yelahanka, Bengaluru on 22/11/2016, it was dishonoured for the reasons "Funds insufficient" as per Ex.P.2 memo dated 24/11/2016. Thereafter, the complainant having no other choice issued legal notice to the accused through his counsel on 17/12/2016 as per Ex.P.3 and the said notice was sent to the accused through RPAD as per Ex.P.4 postal receipt. The notice is duly served on the accused on 19/12/2016 as per Ex.P.5 Postal Track consignment. The accused failed to issue reply notice. Hence, the present complaint is filed on 11/01/2017.
21. In this regard, it is relevant to peruse Section 138 of the Negotiable Instrument Act, which reads as under:-
"Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on 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 20 CC.No.1618/2017 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 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:
22. 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 payee or, as the case may be, to the holder in due course of 21 CC.No.1618/2017 the cheque, within fifteen days of the receipt of the said notice.
23. Explanation.--For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability.
24. On going through the said provision of law, it is clear that in order to establish and to prove the fact that the accused has committed an offence under section 138 of N.I.Act, the essential requirements i.e., legally recoverable debt, issuance of the cheque, presentation of the said cheque within the stipulated period for encashment, the dishonour of the said cheque and the issuance of the legal notice within the stipulated period calling upon the accused in making the payment of the said cheque amount is within the stipulated period are to be proved by the complainant.
25. On going through the facts and circumstances of the case, it is clear that the accused has issued Ex.P.1 22 CC.No.1618/2017 cheque bearing No:762668 for a sum of Rs.1,60,040/- dated 22/11/2016. When the said cheque was presented to the Bank for encashment, the said cheque was dishonoured for the reasons "Funds insufficient" as per Ex.P.2 memo dated 24/11/2016. Thereafter, the complainant has issued legal notice through his advocate as per Ex.P.3 on 17/12/2016 and the said notice is sent by RPAD as per Ex.P.4 postal receipt and the said notice is duly served on the accused on 19/12/2016 as per Ex.P.5 Postal Track consignment as "Item delivered". Hence, as per Circular issued by Hon'ble High Court of Karnataka vide Ref.No:126/2021 dated 25/11/2021, the Postal Track consignment showing as "Item Delivery confirmed" is deemed to be served. That means the notice issued as per Ex.P.3 is duly served on the accused as per Ex.P.5 track consignment details and Section 138(b) of N.I.Act is also complied by the counsel for complainant. The evidence placed on record shows the failure of the accused to pay the above said cheque amount within stipulated period as per section 138(c) of the Act. The present complaint has 23 CC.No.1618/2017 been filed on 11/01/2017 which is well within the period of limitation. In view of this, the complainant has satisfied the entire requirements of section 138 of N.I.Act.
26. On going through the entire oral and documentary evidence and as observed supra, the complainant has proved the existence of legally recoverable debt and issuance of cheque towards discharge of the said debt and also issuance of the legal notice within stipulated period and the failure of the accused to make payment of the said cheque amount within stipulated period. Under such circumstances, I hold that the complainant has clearly proved the existence of legally recoverable debt and also the issuance of cheque towards the discharge of said debt.
27. When the complainant proved that accused has issued Ex.P.1 cheque towards discharge of his liability, he is liable to pay the money as provided U/Sec.138 of N.I.Act. The accused can be punishable with imprisonment for a term which may be extended upto 2 years or with fine 24 CC.No.1618/2017 which may be extended to twice the amount of the cheque or with both. The accused is liable to pay the cheque amount of Rs.1,60,040/- in discharge of his liability in favour of complainant. Hence in view of my above discussion, I answer Point No.3 in "Affirmative". POINT No.4:-
28. In the result I proceed to pass the following:
ORDER Acting under Section 255(2) of Cr.P.C., the accused is hereby convicted for the offence punishable under Section 138 of N.I. Act.
Accused is sentenced to pay a fine of Rs.1,60,040/- (Rupees One Lakh Sixty Thousand and Forty Only) for the offence punishable under Section 138 of N.I. Act. The same shall be paid by the accused within a period of 30 days from the date of this order.
Out of the said fine amount, a sum of Rs.1,55,000/- (Rupees One Lakh Lakh Fifty Five Thousand Only) has been 25 CC.No.1618/2017 awarded to the complainant as compensation under Section 357 of Cr.P.C.
In default of payment of fine amount, the accused shall undergo simple imprisonment for 6 (Six) months.
The rest of Rs.5,040/- (Rupees Five Thousand and Forty only) is ordered to be adjusted to the State as fine.
The cash surety amount of
Rs.2,000/- already deposited by the
accused on 05/05/2017 is forfeited to the State.
Office is directed to supply copy of Judgment to the accused free of cost forthwith. (Dictated to the Stenographer on computer, print out taken by her is verified, corrected and then Pronounced by me in the Open Court on this the 29th day of December 2021).
(Siddaramappa Kalyan Rao) XII Addl. Chief Metropolitan Magistrate, Bengaluru City.
26 CC.No.1618/2017ANNEXURE List of witnesses examined on behalf of the complainant:
PW.1 : Sri. R. Kashinath.
List of documents exhibited on behalf of the complainant:
Ex.P.1 : Cheque.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Legal notice.
Ex.P.4 : Postal receipt.
Ex.P.5 : Postal Track consignment.
Ex.P.6 : Consideration receipt executed
by accused.
Ex.P.6(a) : Signature of the accused.
Ex.P.7 : Loan repayment receipt.
Ex.P.7(a) : Signature of the accused.
Ex.P.8 : License issued by Co-Operative
Department.
List of witnesses examined on behalf of the accused :
DW.1 : Sri. Manjunatha List of documents exhibited on behalf of the accused :
- Nil -
XII Addl. Chief Metropolitan Magistrate, Bengaluru City.27 CC.No.1618/2017
Date: 29/12/2021 Complainant - SI Accused - P Judgment Judgment pronounced in the open court vide separate order) ORDER Acting under Section 255(2) of Cr.P.C., the accused is hereby convicted for the offence punishable under Section 138 of N.I. Act.
Accused is sentenced to pay a fine of Rs.1,60,040/- (Rupees One Lakh Sixty Thousand and Forty Only) for the offence punishable under Section 138 of N.I. Act. The same shall be paid by the accused 28 CC.No.1618/2017 within a period of 30 days from the date of this order.
Out of the said fine amount, a sum of Rs.1,55,000/- (Rupees One Lakh Lakh Fifty Five Thousand Only) has been awarded to the complainant as compensation under Section 357 of Cr.P.C.
In default of payment of fine amount, the accused shall undergo simple imprisonment for 6 (Six) months.
The rest of Rs.5,040/- (Rupees Five Thousand and Forty only) is ordered to be adjusted to the State as fine.
The cash surety amount of Rs.2,000/- already deposited by the
accused on 05/05/2017 is forfeited to the State.
Office is directed to supply copy of Judgment to the accused free of cost forthwith.
XII A.C.M.M., Bengaluru.
29 CC.No.1618/2017