Bangalore District Court
M/S. Aisiri CoOperative vs Sri.Veerakumar on 31 December, 2021
IN THE COURT OF THE XXVI ADDL. CHIEF
METROPOLITAN MAGISTRATE, AT BENGALURU
Dated this the 31st day of December 2021
Present: Sri.C.S.SHIVANAGOUDRA, B.COM., LLM
XXVI Addl. Chief Metropolitan Magistrate,
Bengaluru.
JUDGMENT U/S 355 OF Cr.P.C
Case No. : C.C No.11787/2018
Complainant : M/s. Aisiri Cooperative
Society Ltd.,
Registered office at
No.1359, Shravanti OnyxII,
1st Floor, 9th Block,
Jayanagar,
Bengaluru 560 069
Represented by its
President
Y.Umanath Shetty
(By Sri. S.Basavaraj- Adv.)
Vs.
Accused : Sri.Veerakumar
S/o.Sri.P.Ch.Sathyanarayana,
Aged about 57 years,
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CC No.11787/ 2018
R/at No.5C410,
H.R.B.R.Layout,
Bengaluru - 560 043
Also at
No.421, Proprietor,
R.K.Realtors,
3rd Main, 3rd Block,
H.R.B.R.Layout,
Bengaluru - 560 043
(By Sri.K.R.B.Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Final Order : Accused is convicted
Date of Judgment : 31.12.2021
********
JUDGMENT
This complaint is filed by the Complainant Society against the Accused for the offence punishable u/s 138 of Negotiable Instruments Act.
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CC No.11787/ 2018
2. The brief facts of Complainant case is that, the Complainant society Registered under the Societies Act and engaging in financing to their members to enable to develop their members business. It is further contended that, the accused is the member of the Complainant society and had applied for sanctioning of loan to an extent of Rs.25 lakhs the said application was made by the accused on 23.03.2016. The said application was considered by the Complainant society and requested the accused to subscribe for share amount in the Cooperative society to avail the loan to the applied extent. Further, the accused gave mandate to the Complainant to deduct the share amount of Rs.53,126/ out of the sanctioned amount. The sanctioned loan amount was credited to the SB account No.76 opened with Complainant society.
3. It is further case of the Complainant is that, as per the banking norms for cooperative societies the accused 4 CC No.11787/ 2018 had executed on demand promissory note, letter of repayment, loan documents in connection with the availing of the said loan in favour of the Complainant society. The accused is also executed and registered a memorandum of deed of deposit of title deed concerning the flat No. G2 in survey No.107 Ward No.54, Hoodi, Bhairatthi Village, Bidarahalli Hobli, Bengaluru East Taluk and the accused also agreed to repay the entire loan amount of Rs.25 lakhs along with applicable interest, penal interest, cost. Accordingly as on 31.12.2017 the accused is due a sum of Rs.31,63,626/, in order to repay the above loan in part the accused had issued a cheque bearing No.188550 dated 06.01.2018 for Rs.30 lakhs drawn on Union bank, Hennur Main Road Branch, Bangalore. On believing the words of the accused, the Complainant presented the said cheque, but the said cheque returned with dishonored for the reason "Account blocked" on 08.01.2018. Thereafter the Complainant through their advocate issued legal notice on 31.01.2018 to the accused 5 CC No.11787/ 2018 calling upon the accused for payment of the cheque amount, the said notice was served to the accused. However in spite of it, the accused failed to repay the loan amount, on expiry of 15 days from the date of receipt of notice. Hence, the Complainant filed this complaint against the accused for the alleged offence.
4. After filing this complaint, this court took cognizance of the offence and registered the criminal case against the accused and summons was issued to him. In response to summons, he appeared before the court through his counsel and he was enlarged on bail. Thereafter plea was recorded and accused pleaded not guilty and claimed to be tried.
5. Earlier the Complainant society CEO by name Dattathreya Hegde was examined as PW1 and got marked 17 documents as per Ex.P1. To P17. Later on he has resigned from the complainant society. Thereafter the Complainant society represented by its President by name Umanath Shetty s/o. Ganapaiah Shetty has been examined as PW2 and has produced 21 documents as per ExP1 to 21. After closure of 6 CC No.11787/ 2018 Complainant evidence, the statement of accused under Section 313 of Cr.P.C. was recorded, read over and explained to the accused the language known to him to which the accused has denied the entire incriminating evidence which appears against him. On the other hand the accused has examined himself as DW1 but not got marked any documents on his behalf.
6. On perusal of entire case file and evidence available on record the following points arise for my consideration are:
1) Whether the Complainant proves that, the accused to discharge of legally recoverable debt or other liability issued the alleged cheque bearing No.188550 dated 06.01.2018 for Rs.30 lakhs drawn on Union bank, Hennur Main Road Branch, Bangalore?
2) Whether the Complainant proves that, on presentation of said cheque, same was returned unpaid as "Account Blocked" and despite of giving legal notice, he failed to pay the cheque amount, thereby he 7 CC No.11787/ 2018 committed an offense punishable under section 138 of NI Act ?
3) What order?
7. Heard on complainant side and perused the written arguments submitted by the complainant. But inspite of given sufficient opportunity to the accused but accused side not addressed their arguments hence arguments by accused side taken as heard.
8. My findings on the above points are as under:
Point No.1: In the Affirmative, Point No.2: In the Affirmative, Point No.3: As per the final order for the following:
REASONS POINTS. NO.1 and 2 :
Both points No. 1 and 2 are taken up together for common discussion to avoid repetition 8 CC No.11787/ 2018
9. The Complainant has stated that, the accused has availed a mortgage loan of Rs.25,00,000/ from the Complainant bank. After availing the loan amount, the accused was not paying regularly installments as agreed, on demand made by the Complainant the accused has issued the alleged cheque i.e. Ex.P2 for repayment of installment of loan amount. The Complainant President by name Umanath Shetty has been examined as PW2 by way of affidavit which is replica of complaint averments. PW2 has produced the alleged ExP2 cheque, which was issued by the accused towards loan installment due of Rs.30,00,000/. On presentation of the said cheque it was returned as "Account Blocked" as per ExP3 banker memo dated 08.01.2018. Thereafter the Complainant issued legal notice on 31.01.2018 to the accused through RPAD, the same was served on accused, it can be seen from ExP4 to 7. Even the Complainant has also produced voluminous documents with regards to the loan obtained by the accused from the Complainant which are got marked as Ex.P8 to Ex.P19.
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10. Before going to the merits of this case, first of all I would like to glance over the law pertaining to the instant case. Admittedly the present case filed under section 138 of Negotiable Instruments Act to bring home guilt against the accused, the Complainant society must prove the following ingredients of Section 138 of Negotiable Instruments Act.
i) That, there is a legally enforceable debt.
ii) That the cheque was drawn from account of bank for discharge in whole or in part of any debt or other liability which presuppose a legally enforceable debt;
iii) Cheque so issued had been returned due to insufficiency of funds.
11. On going through the rival contentions of both the parties it is the specific case of the Complainant is that, the accused has availed mortgage loan of Rs 25 lakhs by mortgaging his immovable property mentioned in the mortgage deed i.e. Ex.P15 and his son by name Veerakumar is a guarantor of the said loan, in order to repay the said loan in part he has issued alleged cheque but it was dishonored as "Account Blocked".
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CC No.11787/ 2018
12. On the other hand, it is specific case of the accused is that, on 23.03.2016 the accused has obtained a loan of Rs.25 lakhs and also agreed to repay the said loan amount within 10 years but the Complainant society has not given EMI scheme to the accused, despite the accused has already paid Rs. 3,12,000/ interest to the above said loan. The accused further taken a contention that, he has issued alleged cheque for the purpose of security of the loan. It is further defence raised by the accused is that, the Complainant was doing private chit business, the accused was one of the member of the said chit business, at that time the Complainant has obtained blank signed cheque from the accused for the purpose of security, the same is misused by the Complainant and filed the present complaint.
13. On going through the rival contentions of both the parties one thing is clear that, the accused is admitted that Ex.P2 cheque is belongs to him even he has also admitted the signature appeared on Ex.P2 cheque i.e. Ex.P2(a) 11 CC No.11787/ 2018
14. It is true that, once the cheque relates to the accused and his signature on the said cheque is proved an initial presumption as contemplated u/s. 139 of Negotiable Instruments Act has to be raised by the court in favor of the Complainant. In a proceeding under section 138 of NI Act, the first and foremost ingredient is that, the alleged cheque must be drawn on account maintained by the accused and signature on alleged cheque belongs to him. Admittedly the alleged cheque and signature belongs to accused. The accused has not at all disputed about the signature as well as the cheque, i.e., which are not belongs to his account. Therefore the foremost ingredient of section 138 of NI Act is established by the Complainant society.
15. On perusal of Ex. P1 the Complainant society has initially authorized CEO of the society by name Dattathreya V.Hegde to file the complaint, afterwards the Complainant society has authorized its President by name Y. Umanath Shetty as per Ex.P18 and P19. On perusal of ExP2 and 12 CC No.11787/ 2018 bankers memo ExP3 it clear that, on presentation of said cheque it was returned as "Account Blocked" . The Complainant was issued notice through RPAD required under section 138 (b) & (c) of NI Act. The said notice was served. Thus, it is clear that, the Complainant has complied all the essential ingredients of Section 138 of NI Act to punish the accused for the alleged offense. Since the accused has not disputed the cheque and the signature the presumption u/s 139 of NI Act has to be drawn as held by the Hon'ble Supreme Court in Rangappa vs. Mohan reported in AIR 2010(11) SCC 441.
16. But the presumption available under the section is rebuttal in nature. In order to disprove the case of the Complainant, the accused has examined as DW1 but supporting of his oral defence he has not produced any single piece of document before the court.
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CC No.11787/ 2018
17. So according to the accused, he has clearly admitted that, he has availed a loan of Rs. 25 lakhs from the Complainant society on 23.03.2016 by mortgaging the immovable property as mentioned in Ex.P15. But it is the specific case of the accused is that, he has issued alleged cheque for the purpose of security of the loan and the Complainant was doing private chit business, the accused was one of the member of the said chit business, at that time the Complainant has obtained blank signed cheque from the accused for the purpose of security, the same is misused by the Complainant and filed the present complaint. However in order to prove the above defence raised by the accused, except oral testimony no piece of documents produced by the accused before this court, therefore without there being any materials, it cannot be hold that, the accused was issued a cheque in question for the purpose of security. On going through the entire crossexamination of DW1, wherein, the accused has clearly admitted that he has obtained a loan of Rs.25 lakhs by 14 CC No.11787/ 2018 mortgaging his immovable property as mentioned in the Ex.P15 Registered Mortgage Deed. Even during the course of cross examination of DW1 he has clearly admitted that, he has already sold out the mortgaged property to one Sannathi Srinivas as per Ex.P20, further he has admitted that, he has not paid the said sale consideration amount to the Complainant society towards his loan amount. Therefore looking into these all facts and circumstances and evidence of the accused it clearly shows that, accused had availed a mortgage loan of Rs.25 lakhs but he has not repaid the said loan amount to the Complainant society and he is due for the loan amount as claimed by the Complainant.
18. According to the accused the Complainant was doing private chit business, the accused was one of the member of the said chit business, at that time the Complainant has obtained blank signed cheque from the accused for the purpose of security. No doubt the Complainant has admitted that he was doing registered chit business however, the accused has 15 CC No.11787/ 2018 failed to prove that he was a member of the chit business of the Complainant and he had issued blank signed cheque for the purpose of security of the said chit amount. Therefore without there being any materials it cannot be hold that the accused has issued cheque in question for the purpose of the security of the said chit amount. Even during the course of chief examination of DW1 he has deposed that, the cheque in question was issued by him for the purpose of security of the loan amount. However, in this regard I would like to relied upon a recent judgment of our Hon'ble Supreme Court decided in Cril. Appeal No.12691270 of 2021 arising out of SLP (Criminal) No.252253 / 2020 in the matter of Sripati Singh (Since deceased) though his son Gourav Singh vs. The State of Jharkhand and another wherein the Hon'ble Supreme Court has observed that, the dishonour of cheque issued as a security can also attract offence under section 138 of Negotiable Instruments Act. Therefore the said defence raised by the accused is not tenable. 16
CC No.11787/ 2018
19. Contrary, the Complainant side has produced voluminous documents in order to prove the mortgage loan obtained by the accused, in this regard I would like to perused the Ex.P8 to 17 which are clearly established that, the accused himself filed a loan application before the complainant and seeking mortgage loan of Rs.25,00,000/ accordingly the Complainant society has sanctioned the said loan of Rs.25,00,000/ by deducting share amount of Rs.53,126/ in favour of the accused and the said loan amount was credited to the SB account of the accused. In order to prove the same the Complainant society has produced Loan application submitted by the accused i.e. Ex.P8 and also produced letter of repayment issued by the accused in favour of the Complainant society i.e. Ex.P9 and the Complainant society has also produced loan account statement of the accused i.e. Ex.P16 wherein it clearly shows that the accused has obtained a mortgage loan amount of Rs.25 lakhs on 23.03.2016 from the Complainant society. Even it is also depicts that, how much 17 CC No.11787/ 2018 amount accused has already paid and how much amount is due. Therefore on going through the Ex.P16 the accused is due the amount mentioned in the cheque in question. Even on going through Ex.P14 i.e. loan payment receipt it shows that, after sanctioning the loan of Rs.25 lakhs to the accused the Complainant society has paid the said loan amount to the accused. Even the accused has also received the said loan amount and put the signature to that effect in the Ex.P14. The Complainant society has also produced Demand Promissory Note and Pronote i.e. Ex.P10 and P11 executed by the accused in favour of the Complainant society wherein the accused has agreed to repay the above said loan amount of Rs.25 lakhs in favour of the Complainant society.
20. The Complainant society has also produced Ex.P12 and 13 which are executed by the son of the accused Puuvada Sandeep who is the guarantor of the said loan he has also executed that, if the accused i.e. principal borrower failed to repay the above said loan amount he was undertaken to repay 18 CC No.11787/ 2018 the said loan amount on behalf of his father. Even on going through the Ex.P15 memorandum of deposit of title deeds which have been executed by the accused and his son jointly in favour of the Complainant society stating that, the accused and his son have availed mortgage loan of Rs. 50 lakhs from the Complainant society by executing immovable property mentioned in the deed in favour of the Complainant society. It is also brought to the notice of this court that, the Ex.P15 executed by the accused and his son in respect of total loan amount of R. 50 lakhs from the Complainant society.
21. During course of crossexamination of PW1 the learned counsel for accused has taken a contention that, property schedule mentioned in the Ex.P15, the flat number is mentioned as G4 but in the complaint and other documents the flat number mentioned as G2, therefore the property No.G4 is not belongs to the accused, as such the accused has not mortgaged of his property bearing No.G2 in favour of the Complainant society. But PW1 has further clarified that, the 19 CC No.11787/ 2018 accused has executed mortgage deed in respect of his property flat No.G2 but in the schedule due to oversight it was wrongly mentioned as G4 instead of G2. In this regard I would like to perused the entire averments of the said Ex.P15, the said property bearing flat No.G2 is mentioned in the entire averments of the deed except schedule. Moreover during the course of crossexamination of DW1 the accused has clearly admitted that, the Ex.P15 was executed by him in favour of the Complainant society. Later on he has sold out the said property to the third party, even in this case the accused has not clarified or proved that the property mentioned in the ExP15 is not belongs to the accused. Therefore looking into these all facts and circumstances are clearly establish that, the property mentioned in the Ex.P15 is belongs to the accused and accused and his son both have mortgaged the said property in favour the Complainant society in respect of loan availed by the accused and his son. Therefore on going through the entire documentary evidence relied by the Complainant society are 20 CC No.11787/ 2018 clearly establish that, the accused has availed mortgage loan of Rs.25 lakhs from the Complainant society by mortgaging his immovable property and also establish that, the Ex.P2 cheque issued by the accused in favour of the Complainant society for discharge of legally recoverable debt.
22. Since the accused has not disputed the cheque and the signature the presumption u/s 139 of NI Act has to be drawn as held by the Hon'ble Supreme Court in the case reported in AIR 2020 Supreme Court 945 in the matter of APS Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers and others wherein their lordships held that, Negotiable Instruments Act (26 of 1881), S.138, S139 Dishonour of cheque - Legally enforceable debt or liability - Presumption as to -
Accused admitting issuance of cheque, his signature on cheque and that cheque in question was issued 21 CC No.11787/ 2018 for second time after the earlier cheques were dishonoured - Once the issuance and signature on cheque is admitted, there is always a presumption in favour of complaint that there exist legally enforceable debt or liability No evidence led by accused to rebut the presumption -
Plea by accused that cheque was given by way of security and same has been misused by complainant, not tenable - Accused liable to be convicted. .
23. So on going through the above judgment of our Hon'ble Supreme Court, when the accused admitted issuance of cheque and his signature on cheque there is always a presumption in favour of Complainant that their exist legally enforceable debt or liability when no sufficient evidence lead by accused to rebut the presumption. Even also cleared from the above ratio that once there is no rebuttal evidence, accept oral defence, presumption cannot be held to be rebutted. In the case 22 CC No.11787/ 2018 on hand, though the accused has examined as DW1, but it is not sufficient materials to rebut the case of the Complainant.
24. Therefore the materials placed by the Complainant society corroborates with each other with respect to the involvement of legally recoverable debt under Ex.P2. So in the absence of disproof of Complainant case, I have no hesitation to believe the case of the Complainant i.e. it has proved their case as per the standard of proof by producing relevant and cogent evidence. Even the entire materials indicates to the court that, Complainant society has filed the Complaint in a proper manner i.e. within the stipulated time under section 138 of Negotiable Instruments Act and further there is no endeavors on behalf of the accused to disprove the case of the Complainant by producing relevant and cogent evidence. Accordingly I am of the considered opinion that the accused is liable to convict for the offence punishable under section 138 of Negotiable Instruments Act and I answered these points No.1 and 2 in the affirmative.
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CC No.11787/ 2018 POINT No.3
25. In view of the findings on points No. 1 and 2 to compensate the holder in due course the accused who has issued cheque without having sufficient funds in his account has to be punished suitably. Therefore considering the facts and circumstances, the accused is liable to pay the loan amount with a reasonable interest thereon as compensation and expenses to Complainant society. Hence, I proceed to pass the following:
ORDER Acting u/s 255(2) of Cr.P.C., the accused is convicted for the offence punishable u/s 138 of Negotiable Instruments Act and sentenced to pay a fine of Rs.36,10,000/ (Rupees Thirty Six Lakhs Ten Thousand only).
In default of payment of fine amount he shall under go simple imprisonment for six months.
Further acting u/s 357(1) of Cr.P.C. a sum of Rs.36,05,000/ (Rupees Thirty Six Lakhs Five 24 CC No.11787/ 2018 Thousand only) is order to be paid to the Complainant as compensation and remaining amount of Rs.5,000/ (Rupees five Thousand only) shall go to the state.
It is made it clear that in view of section 421 of Cr.P.C. the liability of accused to pay the compensation will not be absolved even if he under go default sentence.
The bail bond executed by the accused and surety stand cancelled.
Supply free copy of this judgment to the accused immediately.
(Typed directly on computer to my dictation by the stenographer in the chamber, corrected and then pronounced by me in the open court on this the 31st December day of 2021) (C.S. SHIVANAGOUDRA) XXVIth ACMM, Bangalore.
ANNEXURE Witnesses examined for the Complainant:
PW.2 : Y. Umanath Shetty
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Witness examined for the accused:
DW1 : P.Veerakumar
List of Documents marked for the Complainant:
Ex. P1 Authorization letter. Ex. P2 Original Cheque. Ex. P2(a) Signature of the accused on the cheque. Ex. P3 Bank Endorsement. Ex. P4 Notice. Ex. P5 Postal Receipt - 2 Nos. Ex. P6 & 7 Postal Acknowledgements. Ex. P8 Loan Application. Ex. P9 Letter of repayment Ex. P10 On demand promissory note Ex. P11 Pronote Ex. P12 Guarantor letter Ex. P13 Guarantor Bond Ex. P14 Payment receipt Ex. P15 Mortgage deed Ex. P16 Loan account extract Ex. P17 SB Account Statement Ex. P18 Authorization letter Ex. P19 Board Resolution extract Ex. P20 Absolute sale deed Ex. P21 Encumbrance Certificate
List of Documents marked for the accused:
Nil XXVI ACMM, Bangalore.