Bangalore District Court
Sri. K. Nagaraja Reddy vs Sri. P. Gangadhar on 27 April, 2016
IN THE COURT OF THE XVIII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BANGALORE
DATED : THIS THE 27TH DAY OF APRIL 2016
PRESENT: LAKSHMINARAYANA BHAT.K., B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
C.C.NO: 9670/2014
Complainant: Sri. K. Nagaraja Reddy,
S/o. Kondappa,
Aged about 52 years,
Residing at No: 31/2,
5th Main,
5th 2nd "C" Cross,
Vasanthappa Block,
Ganganagar,
Bangalore-560 032.
(Represented by Shri.K. Narahari.,
Advocate)
V/s.
Accused : Sri. P. Gangadhar,
S/o. Pillaraju,
Aged about 45 years,
Residing at No: 2,
10th Cross, 4th Main,
Vasanthappa Block,
Ganganagar,
Bangalore-560 032.
Also residing at
No:37, 1st Floor, 13th Cross,
RBI Colony, Papanna Block,
Bengaluru - 560 024.
(Represented by Ms. Shwetha
Ravishankar., Advocate)
Offence complained of: U/s.138 of N.I.Act
Plea of accused: Pleaded not guilty
2 CC.No: 9670/2014
Final order Accused is found guilty
Date of order: 27/4/2016
JUDGMENT
The complaint was filed against the accused for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter in short referred as N.I. Act.).
2. After filing of the complaint, cognizance of the offence was taken. After recording sworn statement in pursuance of summons, presence of the accused was secured and he was enlarged on bail. The substance of accusation was recorded and the accused pleaded not guilty.
3. To prove the complaint averments, the complainant was examined as P.W.1 and has produced documents marked as per Ex.P.1 to Ex.P.8. The statement of the accused under Section 313 of Cr.P.C was recorded. The accused entered his defence and was examined as D.W.1. He has produced documents marked as per Ex.D.1 to Ex.D.3.
4. Heard the arguments. The learned advocate appearing for the complainant has filed memorandum of written arguments.
5. After analyzing the averments made in the complaint, oral and documentary evidence placed on record and after hearing the arguments, 3 CC.No: 9670/2014 at this stage the points that arise for my determination are:-
1) Whether the complainant has proved on
20/11/2013 he had advanced hand loan of
Rs.2,50,000/- to the accused and Ex.P.1 cheque issued in discharge of the said debt was dishonoured and even after service of notice, the accused had failed to pay the amount and thereby he is guilty of the offence punishable under Section 138 of N.I.Act?
2) What order?
6. My findings on the aforesaid points are as under:-
POINT NO.1 : Partly in the Affirmative, POINT NO.2 : As per final order, for the following:-
REASONS
7. POINT NO.1:- As per the complaint averments, the accused is known to the complainant for the past several years. In the second week of November 2013, the accused approached the complainant for hand loan of Rs.2,50,000/- for his legal and family necessities. That on 20/11/2013, the complainant claimed to have advanced Rs.2,50,000/- hand loan to the accused by cash. The accused had agreed to repay the said amount within two months with interest thereon at 21% per annum. It is submitted the accused in discharge of the aforesaid debt issued a cheque in favour of the complainant dated 27/1/2014 for Rs.2,50,000/- 4 CC.No: 9670/2014 drawn on State Bank of India, Hebbal, Ganganagar Branch, Bengaluru. The complainant presented the said cheque, but as per memo dated 4/2/2014 it was returned unpaid with an endorsement "Funds Insufficient". The complainant issued statutory demand notice dated 12/2/2014 and the said notice sent through registered post returned to the sender with an endorsement "unclaimed". The complainant in his affidavit filed in lieu of examination-in-chief deposed as per the averments made in the complaint.
8. The accused has alleged, the complainant is doing money lending business. He has specifically admitted he had borrowed Rs.50,000/- from the complainant on two occasions and at the time of advancement of loan, the complainant had charged interest on the said transaction at the rate of 5% per month. He has deposed after borrowing loan, he was making payment of interest on the loan amount for a period of 8 months to 1 year. It is stated at the time of receiving interest, the complainant was not issuing any receipt for the payment. According to the case of the accused, at the time he had borrowed loan from the complainant, he had deposited 2 blank signed cheques drawn on State Bank of India, Hebbal, Ganganagar Branch, Bengaluru as a security for the transaction. The other defence of the accused is that Ex.P.3 notice sent on behalf of the complainant was not served on him. The accused has specifically denied borrowed loan of Rs.2,50,000/- from the 5 CC.No: 9670/2014 complainant or in discharge of the said debt he had issued Ex.P.1 cheque. According to the accused, he had not filled the contents of Ex.P.1 cheque. The accused has admitted he is still in due for payment of Rs.1,00,000/- hand loan borrowed from the complainant. For the aforesaid reasons he has prayed for dismissal of the complaint.
9. Before going into the merits of the case, the accused in his defence evidence specifically admitted borrowed loan of Rs.1,00,000/- from the complainant and so far he has not repaid the said amount. The accused further deposed he is ready to make payment of the said amount. As per Section 58 of Indian Evidence Act, facts admitted need not be proved. Therefore, the question remains for determination is whether the complainant has advanced loan of Rs.1,00,000/- or Rs.2,50,000/- in favour of the accused. The accused has further submitted Ex.P.1 cheque pertains to his Bank account and also his signature appearing in the said cheque marked as per Ex.P.1(a). As per the complaint averments, on 20/11/2013 he had advanced Rs.2,50,000/- hand loan to the accused by way of cash. In proof of advancement of loan of Rs.2,50,000/- as on 20/11/2013, the complainant has not produced any documentary evidence. Moreover, at the time of advancement of loan, the complainant had not insisted the accused to execute any documents such as demand promissory note or consideration receipt from the accused. As per Ex.P.3 statutory demand 6 CC.No: 9670/2014 notice, complaint allegations and affidavit of P.W.1, the complainant has claimed advanced Rs.2,00,000/- hand loan to the accused. But during cross-examination, P.W.1 specifically admitted on 20/11/2013 he had advanced Rs.2,50,000/- hand loan to the accused. Similarly, as per the contents of Ex.P.3 notice, complaint averments and affidavit evidence of P.W.1, it is claimed the accused had agreed to repay the loan amount with interest thereon at 21% per annum. But during cross-examination, the complainant contrary to the aforesaid contention claimed he had advanced loan in favour of the accused without charging any interest. In this regard, the oral evidence of P.W.1 is inconsistent and contradicting with the complaint allegations.
10. After securing the presence of the accused and when the substance of accusation was recorded, the accused has specifically admitted he is in due for payment of Rs.1,00,000/- loan borrowed from the complainant. The accused in his oral evidence specifically deposed he was making payment of Rs.5,000/- per month to the complainant towards interest on the aforesaid sum of Rs.1,00,000/-. In proof of payment of interest to the complainant as claimed in his evidence, has not produced any documentary evidence. Since the accused has specifically admitted borrowed loan of Rs.1,00,000/- from the complainant, the cross-examination of the complainant disputing his financial capacity to advance Rs.2,50,000/- is insignificant. Moreover, 7 CC.No: 9670/2014 the accused in his examination-in-chief specifically alleged the complainant is doing money lending business. In the above circumstances, no much importance can be attached to the cross- examination made by the accused disputing the financial capacity of the complainant to advance Rs.2,50,000/-. A money lender who is having capacity to advance Rs.1,00,000/- as hand loan definitely may advance Rs.2,50,000/-. Whether the complainant had advanced Rs.2,50,000/- to the accused as on 20/11/2013 is a fact in issue to be decided by this Court.
11. Ex.P.1 cheque is issued in favour of the complainant bearing No: 540771 dated 27/1/2014 for Rs.2,50,000/- drawn on State Bank of India, Hebbal, Ganganagar Branch, Bengaluru. As per Ex.P.2 memo issued by the Bank dated 4/2/2014, Ex.P.1 cheque returned unpaid with an endorsement "Funds Insufficient". That on 12/2/2014 the complainant got issued statutory demand notice to the accused in compliance to Section 138(b) of N.I. Act. The accused has produced Ex.D.1 demand notice sent on behalf of the complainant addressed to the accused dated 19/12/2014. As per the contents of Ex.D.1, it is alleged on 25/6/2014 the accused had borrowed loan of Rs.1,50,000/- from the complainant and in discharge of the said debt he had issued cheque No: 540772 dated 24/11/2014 drawn on State Bank of India, Hebbal, Ganganagar Branch, Bengaluru in favour of the complainant. 8 CC.No: 9670/2014 The contention taken in Ex.D.1 demand notice is apparently false and unbelievable. When the accused alleged to have borrowed loan of Rs.2,50,000/- from the complainant on 20/11/2013 and in discharge of the said debt issued Ex.P.1 cheque dated 27/1/2014, the said cheque was returned dishonoured as per Ex.P.2 memo dated 4/2/2014, the complainant had already initiated legal action by sending demand notice as per Ex.P.3 and filed this false complaint on 13/3/2014, therefore, the complainant claimed to have advanced Rs.1,50,000/- to the accused on 25/6/2014 as alleged in Ex.D.1 is highly improbable and it is not a prudent transaction. By producing Ex.D.1, the accused was able to make out he had deposited 2 blank signed cheques in favour of the complainant drawn on State Bank of India, Hebbal, Ganganagar Branch, Bengaluru. Ex.P.1 cheque bearing No: 540771 and the cheque referred in Ex.D.1 notice 540772 are drawn on the same Bank having consecutive serial numbers. Therefore, the complainant has filled Ex.P.1 cheque and another cheque No:540772 for Rs.2,50,000/- and Rs.1,50,000/- respectively presented for encashment and got issued 2 demand notice dated 12/2/2014 and 19/12/2014 as per Ex.P.3 and Ex.D.1 is more probable. The accused has not produced any documentary evidence to prove on the basis of Ex.D.1 notice he had already initiated legal action against the accused by filing complaint for the offence punishable under Section 138 of N.I. Act. The accused has placed probable evidence to 9 CC.No: 9670/2014 prove the complainant has filled Ex.P.1 blank signed cheque for an imaginary amount of Rs.2,50,000/-.
12. As per the admitted case of the accused as deposed in his examination-in-chief, in November 2013 he had borrowed Rs.1,00,000/- hand loan from the complainant. He has failed to place any evidence to show he has made repayment of interest on the said amount to the complainant for a period of 8 months or 1 year. Therefore, from the date of alleged transaction November 2013, already 29 months have been lapsed. The accused further admitted he had agreed to repay the loan amount with interest thereon at 5% per month to the complainant. The defence of the accused regarding non-service of Ex.P.3 notice is apparently false. The accused has produced Ex.D.1 notice sent on behalf of the complainant and for the said notice he has sent reply as per Ex.D.2. The address written on Ex.D.1 notice and Ex.P.3 notice is similar. As per Ex.P.5 and Ex.P.6 unclaimed postal envelope, there is an endorsement "intimation delivered, unclaimed". Therefore, the accused has deliberately evaded service of Ex.P.3 notice can be gathered from the facts and circumstances of the case. During cross-examination of P.W.1, it is suggested that the complainant in collusion with the postal authority got false endorsement in Ex.P.5 and Ex.P.6 postal envelope is unbelievable and has to be discarded. As per Section 27 of General Clauses Act, there is a presumption in favour of the complainant 10 CC.No: 9670/2014 regarding service of letter sent through registered post. In this regard, I have referred the Judgment of Hon'ble Apex Court reported in 2007 AIR SCW 3578 in C.C.Alavi Haji V/s. Palapetty Muhammed and another. In Para No.17, Hon'ble Court held "It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C.Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case, if the giving of notice in the context of Clause(b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act".
11 CC.No: 9670/2014
13. As per Section 139 of N.I. Act, there is a presumption in favour of the complainant that unless the contrary is proved Court shall presume that the cheque had been issued in discharge of any debt or liability. It is the burden of the accused to rebut the presumption by placing contra evidence. In the case on hand, the accused has admitted he had borrowed loan of Rs.1 lakh and still in due for repayment of the said amount to the complainant. The complainant has fulfilled all the ingredients of Section 138 and 142 of the Act. The complainant has failed to prove on 20/11/2013 he had advanced Rs.2,50,000/- hand loan to the accused. Therefore, my findings on Point No.1 is partly in the affirmative.
14 POINT NO.2:- In view of my findings on Point No.1., the accused is liable to be convicted for the offence punishable under Section 138 of N.I. Act. As per Section 138 of N.I. Act, the Court is having discretion to impose fine which may extend to twice the amount of the cheque or with imprisonment which may be extended to two years, or with both. As per the aforesaid provision, the Court is having discretion to impose fine less than the cheque amount. After considering the facts and circumstances of the case and evidence placed on record, it is just and proper to sentence the accused to pay fine of Rs.1,40,000/-. Hence, I proceed to pass the following:-
12 CC.No: 9670/2014
ORDER Acting under Section 255 (2) of Cr.P.C, accused is convicted for the offence punishable under Section 138 of Negotiable Instruments Act 1881. He is sentenced to pay fine of Rs.1,40,000/- (Rupees One Lakh Forty Thousand Only) and in default he ll undergo simple imprisonment for 6 (Six) months.
Acting under Section 357 (1) (b) of Cr.P.C, out of the fine amount the complainant is entitled for Rs.1,30,000/- (Rupees One Lakh Thirty Thousand Only) as compensation.
Acting under Section 357 (1) (a) of Cr.P.C, the balance amount of Rs.10,000/- (Rupees Ten Thousand Only) is defrayed to the State for the expenses incurred in the prosecution. (Dictated to the Stenographer, transcribed by her, corrected, revised and signed then pronounced by me in the open court on this the 27th day of April 2016).
(LAKSHMINARAYANA BHAT.K) XVIII A.C.M.M., BANGALORE.13 CC.No: 9670/2014
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Sri. K. Nagaraja Reddy.
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P.1 : Cheque No: 540771 dated 27/1/2014
for Rs.2,50,000/-.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Office copy of demand notice.
Ex.P.4 : Two postal receipts.
Ex.P.5 and Ex.P.6 : Two postal covers.
Ex.P.7 and Ex.P.8 : Postal acknowledgements.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
D.W.1 : Sri. P. Gangadhar.
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: -
Ex.D.1 : Demand notice.
Ex.D.2 : Reply notice.
Ex.D.3 : Postal receipt.
(LAKSHMINARAYANA BHAT.K)
XVIII A.C.M.M., BANGALORE.
14 CC.No: 9670/2014
(Judgment pronounced in Open Court vide a separate Order) ORDER Acting under Section 255 (2) of Cr.P.C, accused is convicted for the offence punishable under Section 138 of Negotiable Instruments Act 1881. He is sentenced to pay fine of Rs.1,40,000/- (Rupees One Lakh Forty Thousand Only) and in default he ll undergo simple imprisonment for 6 (Six) months.
Acting under Section 357 (1) (b) of Cr.P.C, out of the fine amount the complainant is entitled for Rs.1,30,000/- (Rupees One Lakh Thirty Thousand Only) as compensation.
Acting under Section 357 (1) (a) of Cr.P.C, the balance amount of Rs.10,000/- (Rupees Ten Thousand Only) is defrayed to the State for the expenses incurred in the prosecution.
The office is hereby directed to supply the copy of this Judgment to the accused on free of cost.
XVIII A.C.M.M., BANGALORE.