Bangalore District Court
M/S Kodachadri Chits Private Limited vs Mr. Ananthakumar B.S on 21 April, 2021
IN THE COURT OF THE XX ADDITIONAL SMALL CAUSES
JUDGE AND ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE AND M.A.C.T., BENGALURU (SCCH-22)
PRESENT : Smt.Shakunthala.S.,
B.A.., LL.B.
XX Addl. Small Causes Judge
and A.C.M.M., Bengaluru.
DATED : This the 21st Day of April 2021.
C.C. NO.481/2020
Complainant - M/s Kodachadri Chits Private Limited,
No.17/1, MEC Road,
Marappana Palya,
Yeshwanthpura,
Bangalore-560 022, Rep. By its
POA holder ,
Sri. Nagaraj B, Director
S/o. Byrappa aged about 54 years.
(Rept: By Sri.H.A.Prabhakara, Advocate)
- Versus -
Accused - Mr. Ananthakumar B.S
S/o. Somegowda,
No.1/1, Shankaragatta,
Singanamanne
Badravathi Shimoga-577451.
(Rept: By Sri.M.G.Kantharajappa, Advocate)
Dated of Institution : 20.01.2020
The offences complied : Under Sec.138 of the
off or proved Negotiable Instrument Act
SCCH-22 2 CC No.481/2020
Plea of the accused : Pleaded not guilty
Date of commencement : 21.01.2020
of recording evidence.
Final Order : Accused is Convicted
Date of such order : 21.04.2021
(SHAKUNTHALA.S.)
XX ADDL.S.C.J. & A.C.M.M.,
BENGALURU.
:: JUDGMENT ::
The Complainant filed this complaint against the accused under Section 200 of Cr.PC for the offence punishable under Section 138 of Negotiable Instrument Act.
2. The brief facts of the complainant case are as follows; The accused subscribed for a chit bearing No. K30F4280718 TN No.-1006. He participated in the chit action and declared as a prize bidder and received the prize amount. At the time of prizing the said chit he issued a cheque bearing No.009534 dated 20.11.2019 for Rs.16,69,196/- drawn on State Bank of India, Shankarghatta Branch, Shimoga towards the arrears of subscription amount.
3. The said cheque was presented for encashement on 20.11.2019 through its banker Axes Bank Ltd, Yeshwanthapura branch, Bangalore SCCH-22 3 CC No.481/2020 but it was returned with a shara "Funds Insufficient" dated 21.11.2019. Thereafter he got issued demand notice on 04.12.2019 calling upon him for payment under dishonoured cheque. But he has failed comply the demand made within stipulated period and thereby committed an offence punishable under Section 138 of N.I. Act., therefore, the present complaint.
4. In response to the summons, accused appeared through his counsel and enlarged on bail. The substance of accusation was recorded and read over, accused pleaded not guilty and claims to be tried.
5. Complainant in order to establish its case the GPA holder of the complainant one Nagaraj.B got examined himself as PW1 and got marked 8 documents at Ex.P1 to Ex.P8. Thereafter accused raised his defence during cross-examination of PW.1. The statement of accused as required under Section 313 of Cr.P.C was recorded and read over to accused, for which he denied the incriminating materials as false and got examined himself as DW.1 and got produced 13 documents at Ex.D1 to Ex.D13.
6. Heard arguments. Notes of arguments filed by complainant. The accused in support of his argument filed memo with two judgments passed by this court in CC 5321/2018 and CC SCCH-22 4 CC No.481/2020 5466/2018 dated 25.11.2020.
7. On perusal of oral as well as documentary evidence the points that arise for my determination are as follows:
1) Whether the complainant proves that Ex.P2 cheque has been issued by the accused towards discharge of legal liability and the same was dishonored on its presentation for the reason "Funds Insufficient" and further complied the mandatory provisions of Sec. 138
(a) to (c) of N.I.Act and further the complainant proves beyond doubt that the accused without having sufficient funds in his account, issued cheque towards discharge of his liability and failed to make good to the complainant after its dishonour within the stipulated period and thereby, committed an offence punishable under section 138 of N.I.Act?
2. What Order?
8. My answer to the above points are under :
Point No.1 - In the Affirmative
Point No.2 - As per final order for the
following
:: REASONS ::
POINT No.1:-
9. Under Section 138 of the N.I Act the offence will complete SCCH-22 5 CC No.481/2020 only if the mandatory provisions of Sec. 138 (a) to (c) are complied, when the cheque was issued towards discharge of legal liability and it was dishonoured in the credit of the accused.
10. In this context, the complaint averments reveal that the accused subscribed for chit with the complainant Company and he participated in the chit auction and received prize money and at the time of prizing the said chit got issued a cheque bearing No. 009534 dated 20.11.2019 for Rs.16,69,196/- drawn on State Bank of India Shankaraghatta Branch, Shimoga. That as agreed he failed to make payment and became defaulter. When the said cheque presented for enchashment dishonoured for the reason funds insufficient. Accordingly got issued legal notice and filed dispute before the Deputy Registrar of chits for recovery of sum of Rs.19,19,576/- with interest at 18% and the said petition in which award was passed for Rs.18,19,576/-. Towards the payment of part amount he got issued cheque bearing No. 009534 dated 20.11.2019 for Rs.16,69,196/- drawn on State Bank of India Shankaraghatta Branch, Shimoga and on presentation for encashment it was returned with a shara "Funds Insufficient" and notice issued, in spite of it failed to make payment.
11. The same has been reiterated by the GPA holder of SCCH-22 6 CC No.481/2020 complainant Company as PW.1 in his affidavit filed in lieu of his examination in chief and got marked the documents board resolution at Ex.P1, cheque at Ex.P2 and the signature of the accused at Ex.P2a, Ex.P3 Endorsement, Ex.P4 Legal Notice, Ex.P5 Postal Receipt, Ex.P6 postal acknowledgment, Ex.P7 Voucher, Ex.P8 Chit Agreement.
12. The accused denied the case of complainant and raised his defence during cross-examination of PW.1 that the complainant obtained cheque from him as a security and there is no base for claiming the cheque amount and the award obtained was exparte award and he already paid Rs.7,99,233/-. PW.1 except admitted the receipt of Rs.7,99,233/- but he denied the other suggestion. Also made suggestion that the complainant at the time of prizing the chit obtained blank cheque and other documents, he paid the entire bid amount to the complainant, in spite of it got misused the cheque issued as a security and further also obtained blank cheque from his wife P.Deepa and also the guarantor Shivakumar with signature only and the said cheques also been misused and except Ex.P2 cheque issued as a security but not for repayment of any loan and the complainant also obtained the documents pertaining to immovable property and they have mortgaged the property as per the mortgage deed dated 30.01.2019 registered SCCH-22 7 CC No.481/2020 before Sub-Registrar Bhadravathi. The complainant already filed DRB-1 SFS 3/2020-21 before the Registrar Bangalore and obtained award which is exparte. Against which Execution petition was filed by them in execution 1861/2020 which is pending, as such this complaint is not maintainable as the complainant is claiming on double time. Even though he suggested the same but the PW.1 specifically denied the suggestion and specifically contended that though he admitted Rs.7,99,233/- according to learned counsel for complainant the said amount was paid prior to filing the petition before Deputy Registrar and after receipt of the same for the remaining balance the petition before Deputy Registrar of society was filed award passed which remained unchallenged.
13. Further the accused also raised his defence in his evidence that he know the complainant and is not disputing that he is the subscriber of chit with the complainant and he has not at all issued any documents at the time of prizing the bid nor issued the cheque but he participated in the chit auction and the entire bid he repaid to the complainant at that time the complainant obtained his signature on blank white papers and also obtained two cheques fully signed from his side and from his wife and also the guarantor and got misused the SCCH-22 8 CC No.481/2020 said cheques and the arbitration award obtained exparte there is no existence of enforceable debt and liability and in support of the same he got produced mortgage deed at Ex.D1, award at Ex.D2 order sheet at Ex.D3, chit agreement at Ex.D4, notice issued to him his wife and guarantor on 06.11.2019 at Ex.D5 to Ex.D7, the guarantor and security proposal form Ex.D8, track consignment of postal department at Ex.D9 to Ex.D11, execution petition notice of the Court and the petition at Ex.D12 and 13.
14. Even though he raised the said contention but during cross- examination but he denied the issuance of cheque and his signature Ex.P2a on the cheque. On perusal of the evidence of DW.1, the suggestion made to PW.1 during cross-examination and the cross- examination evidence of DW.1 wherein at the first stretch accused contended that he got issued the cheque as a security by putting his signature on the cheque and issued by blank and repaid the entire bid amount but during cross-examination he denied his signature on Ex.P2 cheque this stand of the accused contrary to his defence taken in his evidence as well as suggestion made to PW.1 moreover under 138 of NI Act whether the cheque issued as a security or for repayment makes no difference. Further it is the specific contention of accused that he SCCH-22 9 CC No.481/2020 repaid the bid amount and is not in arrears of any amount to the complainant and he paid Rs.7,99,233/- but nothing has been produced before the Court wherein he is not disputed that he participated in the chit auction as a prize bidder but according to him he repaid the entire bid amount if so he could have produced some documents to prove his defence. Further if he repaid the entire amount then what made him to taken back Ex.P2 cheque as he is not disputing that the property also been mortgaged with the complainant. On perusal of Ex.P7 the payment voucher in which the signature of accused finds a place and Ex.P8 also corroborate the case of complainant and the accused even not made any efforts to disprove Ex.P7 and Ex.P8 and also not made any efforts to stop payment of the account of Ex.P2 cheque if at all he repaid the cheque amount.
15. Further the learned counsel for accused vehemently argued that the complainant have already filed petition before Registrar of Co- operative Society of award was passed and on the basis of award they have filed execution 1861/2020 for recovery of award amount which includes the cheque amount and is claiming simultaneously, accordingly the present complaint is not maintainable and in support of his arguments relied upon the Judgment passed by this Court as cited SCCH-22 10 CC No.481/2020 supra wherein in the said cases the legal notice not at all been served and not complied the mandatory provisions of 138 (a) to (c) wherein the service of notice mandates under the provision of NI Act and also the award passed was exparte but in the present case the service of notice not been disputed by the accused and he clearly admitted service of notice and in spite of service of notice he has not replied and failed to rise the defence as contended by the learned counsel moreover according to learned counsel for accused not disputing the payment made by accused which is prior to filing the petition before Registrar of Society, such being the thing it is the specific contention of complainant that the amount paid only before filing the petition and for the remaining the petition before registrar of society was filed and award also obtained and execution petition also filed which includes the present cheque amount.
16. Though he contended that Execution petition already filed for recovery of the amount on the basis of award and also filed this complaint to recover the cheque amount but PW.1 specifically stated that before filing petition and before passing award and before filing execution the present cheque has already been issued. Moreover it is a SCCH-22 11 CC No.481/2020 settled law that the complainant is entitled to file both private complaint for bounced of the cheque as well as Civil suit for recovery of the amount due by the accused in view of the principle laid down in SC 69 between Sri Krishna Agencies Vs State of AP and another, wherein the accused not disputed the award and in discharge of the same got issued the present cheque and though he raised the contention it is only a security but in the existence of Ex.P7 and Ex.P8 which clearly establishes the transaction as well as execution of the documents moreover the award remained unchallenged and though suggestion made that the notice in the said award not at all been served but even after passing the award it remained unchallenged.
17. There is no dispute in respect of transaction nor the execution of Ex.P7 and Ex.P8 as well as issuance of cheque in the existence of Ex.P7 and Ex.P8 which clearly establishes the transaction as well as the out standing. Though he claimed that in respect of award he is not having any knowledge but admittedly he placed exparte moreover the award remained unchallenged such being the thing the defence raised by the accused which have not probable to disprove the case of complainant, on the other hand the suggestion made to PW.1 itself indicates that the accused having knowledge in respect of SCCH-22 12 CC No.481/2020 holding of instrument by the complainant issued by him in discharge of liability and though he claimed that he cleared the entire chit bid amount, if so what made him to taken back the cheque nor made any efforts in respect of Ex.P2 cheque nor he made demand to the complainant to return the instrument. Moreover when there is no dispute in respect of service of notice as such the complainant established its case by producing cogent, clear and convincing evidence and also established the circumstances under which it holds instrument as such the accused not made any efforts to cross the barrier neither during cross-examination of PW.1 nor in his evidence.
18. Therefore, no contra evidence in order to overcome or the point to cross the barrier of presumption as contemplated under Section 139 of N.I.Act. Since it is a statutory presumption, the Court bound to presume that when there is no dispute regarding the cheque relates to the accused and signature found on such cheque belongs to him as such the presumption has to be raised as provided under Section 139 of N.I Act regarding the fact that the complainant is a holder of the cheque. Therefore, the accused failed to raise a probable defense, which may create doubt in the prosecution case.
19. Further under Section 138 of N.I Act offence will complete SCCH-22 13 CC No.481/2020 only if the mandatory provisions of Section 138 (a) to (e) N.I Act are complied, that the cheque was issued towards discharge of legal liability and it was dishonoured for Insufficient funds in the account of the accused. Ex.P2 cheque dated 20.11.2019 and the said cheque returned for Funds Insufficient as per endorsement dated 21.11.2019 at Ex.P3. The documents reveal that the cheque has been presented within 3 months from the date of issue and legal notice was issued on 04.12.2019, which is within time limit from the date of dishonour. In spite of service of notice neither replied nor repaid the cheque amount and thereby committed an offence punishable under Section 138 of the N.I. Act.
20. On perusal of oral as well as documentary evidence and also suggestions made to PW.1 itself clearly indicates that there is no dispute in respect of signature on Ex.P2(a) cheque itself is a proof to hold that Ex.P2 belonged to accused and at the time of presentation of the cheque there was no sufficient fund in the account. If at all the cheque issued for security then what efforts made by him in respect of cheque and he has not made any efforts to stop payment of the account. The suggestion it self indicates that he is having knowledge in respect of Ex.P2 cheque. Such being the thing he has not made any efforts and SCCH-22 14 CC No.481/2020 failed to do so. More over under Section 138 of NI act the Instrument issued neither for security or for repayment makes no difference. Therefore, I am of the view that the complainant complied all the mandatory provisions of Section of 138 (a) to (c) of N.I.Act.
21. Since the accused having failed to make good to the complainant within stipulated period, has committed an offence punishable under Section 138 of the N.I Act. There is no contra evidence available on record to over come Section 118 and 139 of N.I.Act. Accordingly, I hold that the accused is found guilty of the offence punishable under Section 138 of N.I.Act, hence I answer point No.1 in the affirmative.
22. POINT No.2: In view of the above discussion, I proceed to pass the following:
:: ORDER ::
Accused is convicted for the offence punishable under section 138 of the N.I.Act by acting U/ sec. 255 (2) of Cr.P.C and accused is sentenced to pay a fine of Rs.
16,69,196/ (Sixteen Lakhs Sixty Nine Thousand One Hundred and Ninety Six only). In default to pay fine, accused shall undergo simple imprisonment for a period of 1 year.
SCCH-22 15 CC No.481/2020Further acting U/Sec. 357 (1) (b) of Cr.P.C on recovery of entire fine amount of Rs.16,69,196/ shall be paid to the complainant as compensation.
The bail bond and surety bond of the accused shall stand cancelled.
Supply a free copy of the judgment to the accused with due endorsement.
(Dictated to the stenographer, transcribed by her, corrected by me and then pronounced in the open court on this the 21th day of April 2021.) (SHAKUNTHALA.S) XX A.S.C.J. & A.C.M.M., Bengaluru.
:: ANNEXURE ::
List of witnesses examined on behalf of the complainant:
P.W.1 - Sri. Nagaraja.B List of witnesses examined on behalf of the accused:
D.W.1 - Sri. Anantha Kumar B.S List of documents marked on behalf of the complainant:
Ex.P.1 - Board Resolution
Ex.P.2 - Cheque
Ex.P.2a - Signature of accused on cheque
Ex.P.3 - Bank Endorsement.
SCCH-22 16 CC No.481/2020
Ex.P.4 - Legal notice.
Ex.P.5 - Postal Receipt
Ex.P.6 - Postal Acknowledgment
Ex.P.7 - Voucher
Ex.P.8 - Chit Agreement
List of documents marked on behalf of the accused:
Ex.D1 - Mortgaged Deed Ex.D2 - Award Ex.D3 - Order Sheet of Registrar Ex.D4 - Chit Agreement Ex.D5 to 7 - 3 Notices Ex.D8 - Guarantor and security proposal form
Ex.D9 to 11 - Three Track Consignment Letters of Postal department Ex.D12 - Cause notice in execution petition Ex.D13 - Execution petition in execution 6861/20 (SHAKUNTHALA.S.) XX A.S.C.J. & A.C.M.M., BENGALURU.