Bangalore District Court
Represented By Its Smt.D.V.Shailaja vs S/O Sri.Sadashiva Rao N.K on 12 April, 2021
BEFORE THE COURT OF XXIV ADDITIONAL SMALL
CAUSES JUDGE AND THE MOTOR ACCIDENT CLAIMS
TRIBUNAL & A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 12th DAY OF APRIL 2021
PRESENT: SRI.R.MAHESHA B.A.L. LLB.,
XXIV ADDL. SCJ &
ACMM & MEMBER - MACT
BENGALURU.
1. Sl. No. of the Case CC.No.6335 of 2018
2. The date of 06-12-2018
commencement of
evidence
3. The date of closing 06-03-2021
evidence
4. Name of the Mysore Sales International Limited,
Complainant Represented by its Smt.D.V.Shailaja
W/o M.R.Srinivas,
Aged about 57 years, Foremen,
Chit Fund Division,
Mysore Sales International Limited,
No.15, 2nd floor, 5th cross,
Gandhinagar,
Bangalore-560 009.
(By Sri.M.V.V., Adv.,)
5. Name of the Sri.Nagaraja Rao Pawar K.S.
Accused S/o Sri.Sadashiva Rao N.K.,
Aged about 56 years,
R/at No.19, 1st Floor, 4th C cross,
Maruthi Nagara, Madiwala,
Bangalore-560 068.
(By Sri.S.V.)
2 C.C.No.6335 OF 2018
SCCH-26
6. The offence U/s.138 of the Negotiable Instruments Act
complained of
7. Opinion of the Accused found guilty
judge
JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
The MSIL has been running the chit funds business since last 13 years. At present MSIL has got 22 number of chit fund units across the state 16 numbers of units in Bengaluru. When matter stood thus, the accused became a chit subscriber in chit bearing No.020DL-07/09 on a monthly subscription of Rs.12,500/- with a tenure of payment of 40 months in Gandhinagar branch of Bangalore. That the accused participated in the auction conducted on 24-10-2016 and bid the chit and after completion of formalities, the prize 3 C.C.No.6335 OF 2018 SCCH-26 money of Rs.4,02,175/- was paid to him as per the chit agreement and provisions of chit funds Act. That subsequent to receiving the prize money of Rs.4,02,175/- the accused was under legal obligation to pay the monthly installment but the accused has not paid the monthly amount of the chit installments. The chit bearing No.020DL-07/09 will get terminated on 15-11-2019 and in view of default payment of the regular installments of chit bearing No.020DL-07/09.That the complainant was constrained to recall the entire amount due as per the provisions of chit funds Act and accused is due of Rs.3,38,821/- including 18% interest. That the accused as on 10-10-2018 is due to pay the complainant company the amount of Rs.3,38,821/- including 18% interest i.e., principle amount of Rs.3,24,595/- plus 18% interest of Rs.14,226/-. That the accused has issued cheque dated 10-10-2018 bearing No.073441 for a sum of Rs.3,38,821/- drawn on State Bank of India, Rajajinagar branch, Bengaluru. That the complainant presented the cheque for encashment, but the said cheque was returned with a banker's memo dated 12-10- 2018 for the reason "Funds Insufficient". That the 4 C.C.No.6335 OF 2018 SCCH-26 complainant company got issued legal notice dated 02.11.2018 calling upon the accused to make payment of the amount due, but neither the accused has replied the notice nor made payment of the amount due. Hence complainant filed this complaint.
3. After filing of this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded.
Thereafter cognizance was taken and registered in Crl.Reg.No.III and summons issued to the accused. In response of summons, accused appeared through his counsel and got enlarged on bail. The plea was recorded, read over and explained to accused, he pleaded not guilty and claims to be tried. Hence, the case is posted for complainant evidence.
4. In order to establish his case, the Foremen of the complainant company himself examined as PW-1 and got marked 6 documents as Ex-P1 to 6 and closed his side.
5. Accused was examined under section 313 of Cr.P.C. incriminating material appearing in the complainant evidence was read over and explained to the accused, who denied the 5 C.C.No.6335 OF 2018 SCCH-26 same, he claims to lead defence evidence. In order to establish his case, the accused examined himself as DW-1, but no documents marked.
6. Heard oral arguments from both counsel.
7. After hearing the arguments and perusal of the material placed on record, the following points arise for my consideration :-
POINTS
1. Whether the complainant has made-out the case that the accused has issued the cheque bearing No.073441 dated 10-10-2018 for Rs.3,38,821/- drawn on State Bank of India, Rajajinagar branch, Bengaluru, to discharge the legally enforceable debt or liability due to the complainant and on presentation of cheque it was returned without encashment with an endorsement as "Funds Insufficient'' and accused failed to make any payment within the stipulated period and thereby accused had committed an offence punishable under section 138 of N.I Act?
2. What order?6 C.C.No.6335 OF 2018
SCCH-26
8. My answer to the above points is as follows :-
Point No.1 : Affirmative
Point No.2 : As per final order for the
following :-
REASONS
9. POINT NO.1 :- The provision of Section 101 of the Indian Evidence Act provide that the burden of proof rests on the party who substantially asserts it and not on the party who denies it, in fact burden of proof means that a party has to prove an allegation before he is entitle to a judgment in her favour. Further law U/s 103 of Indian Evidence Act amplifies the general rule of Section 101 that the burden of proof lies on the person who asserts the affirmative of the fact in issue.
10. The burden lies on the complainant to prove the complainant complied with mandatory requirements of Section 138 of NI Act.
The three ingredients of offence U/s 138 NI Act are as under.
1. That there is a legally enforceable debt 7 C.C.No.6335 OF 2018 SCCH-26
2. That cheque was drawn from the account of bank for discharge in whole or in part of any debt or any other liability which presuppose legally enforceable debt
3. That the cheque so issued had been returned due to insufficiency of funds.
The proviso appended to the said section provides for compliance with legal requirements before the complaint/petition can be acted upon by court of law.
11. Section 118A of NI Act deals with special rule of evidence and stated that, every negotiable instrument act is deems to have been drawn for consideration. Section 139 of NI Act enables the court to presume, unless contrary is proved, that the holder of the cheque received the cheque of the nature referred in Section 138, in whole or in part, of any debt or other liability.
The presumption available U/s 118 and 139 of NI Act is rebuttal in nature, the accused can rebut the same by either entering into the witness box or effectively cross examine the complainant and his witness.
8 C.C.No.6335 OF 2018
SCCH-26
12. The complainant filed this complaint against the accused alleged that the accused has committed offence punishable under section 138 of N.I.Act. The complainant contended that, accused has not paid monthly amount of the chit installments and he is due of Rs.3,38,821/- including 18% interest i.e., principle amount of Rs.3,24,595/- plus 18% interest of Rs.14,226/-. Thereafter accused issued the cheque for sum of Rs.3,38,821/- in favour of the complainant. The complainant presented the same for encashment through his banker, but the said cheque returned with endorsement, " Funds Insufficient ''. Thereafter the complainant issued legal notice, the said notice was duly served on 6-11-2018. Hence this complaint filed by the complainant.
13. During the cross examination of PW-1 clearly and categorically admitted that she is working as Foreman of complainant company since 2016 and she knew all the rules and regulations of MSIL. She further stated during cross examination that, while participating chit subscriber, they collected document of income proof, Adhar card and two 9 C.C.No.6335 OF 2018 SCCH-26 passport size photos. Then they entered agreement, they normally done two original agreement, one copy keep in the company, another copy handed over to chit subscriber. Further she admitted during cross examination that while getting prized subscribed amount, they normally get the equalent amount of FD lien and LIC assigned. The accused gave 3rd party immovable property as a mortgage to complainant company. Before we got mortgage 3rd party property they verify documents. If documents are found correct, then company would accept said mortgage. Further the accused attacked PW-1 during cross examination dt.27-1- 2021 regarding what are all legal formalities company ought to follow and what are all documents to be maintained in chit business. PW-1 agreed they maintained all legal formalities and she would produce all documents before this court. Accordingly she has produced all documents in the next hearing dates and also along with written arguments. Further during cross examination, she stated that the present accused paid 34 chit premium and balance of 16 chit premium in 50 lakhs chit number. In 5 lakh chit, accused had paid 22 chit 10 C.C.No.6335 OF 2018 SCCH-26 premium installments. The complainant company sent a notice U/S 32 and 33 of chit funds Act. Notice U/s 32 not served on accused in 5 lakh chit. Notice U/s 32 duly served on accused in 50 lakhs chit. Notice U/s 33 duly served in all the chits. Further she undertakes they not produced said notice and acknowledgment, they would produce before court. She admitted that, after bid the cheque gave by the accused for security purpose. Further she explained that the said cheque gave for paying further future premium amount in blank. The disputed cheque was issued by the accused after they sent legal notice. Further she denied they themselves filled particulars of cheque and other suggestions putforth by accused clearly denied.
14. To disprove the case of the complainant company the accused himself orally examined before this court as DW-1, he stated before court on oath that he was the member of chit, he regularly paying all the premium amount while he entered chit the complainant company get 4 signed blank cheques and address proof documents for security purpose. He did not participated in bid, he did not took any amount from 11 C.C.No.6335 OF 2018 SCCH-26 complainant company. He did not received any notice from complainant company. He regularly paying chit premium amount, but he did not took receipt because he had confidence with complainant company. The complainant company has filed false case against this accused by misusing his blank signed cheque. So he pray for dismissal of the complaint. He subjected cross examination by complainant advocate. He admitted during cross examination that he has been working as clerk in B.ED college and the complaint averments of page 3 to 6 he admitted as true. But denied during cross examination that he did not participated in the bid held on 17-10-2016 and he has no legal obligation to repay Rs.3,38,821/-, principle amount and interest. He clearly admitted that Ex-P1 belongs to his bank A/c and signature on Ex-P1 is also belongs to him. The said Ex-P1 dishonoured when complainant company presented for encashment. Further he denied that Ex-P3 did not served on accused on 6-11-2018 and he denied he has not signed attendance register and he has not participated in bid and he has not received any amount from complainant company and he did 12 C.C.No.6335 OF 2018 SCCH-26 not due any amount from complainant company. Further he admitted that he offered one surety for chit and he denied other suggestions.
15. Further it is pertinent to scrutinize the documents produced by the complainant, Ex-P1 is the cheque, the accused himself admitted it belongs to him and signature also belongs to him. He admitted para 2 to 5 of the complaint averments. Admittedly Ex-P1-cheque was dishonoured for the reasons stated in Ex-P2-endorsement. The accused denied Ex- P3-legal notice has been not served personally. The complainant produced Ex-P5 postal track consignment. On perusal of consignment number on Ex-P4-postal receipt and number in Ex-P5-postal track report, it shows the said baggage was delivered on accused personally on 6-11-2018 at about 13.40.38 sec. through Bommanahalli S.O, Bangalore. To disprove Ex-P5 accused did not produced any document. So it is proved by the documents that Ex-P3 duly served on accused. So remaining burden lies on the complainant, the accused has been participated in bid and took the amount from complainant company and thereafterwards he was 13 C.C.No.6335 OF 2018 SCCH-26 defaulter in paying future subscription amount. This fact was questioned by the accused during cross examination of PW-1, they produced Xerox copy of the documents on 10-02-2021 and 12-03-2021. On perusal of copies furnished by complainant firm copy of the annexure dt.5-7-2016. It shows that he accused subscriber of chit No.020DL/7 and he gave nominee details and other particulars of chit and it contains accused signature and foremen signature and another document chit payment voucher, it shows the accused was successful subscriber of chit value of Rs.5,00,000/-. He received amount on 3-12-2016 through cheque bearing No.721550 for a sum of Rs.4,02,175/-. The said amount credited to accused a/c on 9-12-20016. On perusal of another document, auction proceedings register, the said auction conducted on 17-10-2016 at about 4.00 p.m. in the registered office of complainant firm, Cunningham road, Bangalore. In this accused participated in bid and he was the successful bidder on 17-10-2016. It contains signature of auctioner, foreman and other names of subscriber and subscriber number and bid amount bid by other subscriber and highest 14 C.C.No.6335 OF 2018 SCCH-26 bid amount. It also contains signature of accused. further on perusal of minutes book, it contains all the particulars who were all participated in bid on 17-10-2016. The accused also put his signature in minute book. The accused get prized amount of Rs.4,02,175/-. Further the complainant produced notice U/s 32 of Chit Funds Act, it was duly posted to accused address on 31-08-2018. Admittedly it was not served on accused in present case. On perusal of notice U/s 33 of chit funds Act, it was addressed to accused and posted on 31-08- 2018, it was duly served on accused on 3-9-2018. The accused himself acknowledged notice U/s 33, the copy of the same sent to one guarantor/mortgagor Smt.Venkatalakshmi, No.26, 12th main road, Raghavendra block, Srinagar, Gavipura, Bangalore-50. The said notice duly served on guarantor on 6-9-2018. The complainant firm has produced xerox copy of the application for enrolment of chit of accused and annexure I and chit payment voucher and Vijaya bank statement showing the release of prize amount to accused dt.9-12-2016 through cheque 721550 for a sum of Rs.4,02,175/- and xerox copy of the pay slip of accused. On 15 C.C.No.6335 OF 2018 SCCH-26 perusal of agreement, it was registered on 5-7-2016, chit was commenced from 31-08-2016 and chit termination dt.15-11- 2019 and complainant company produced self attested Xerox copy of aadhar card and pan card. On perusal of document, memorandum by deposit of title deed dt.28-11-2016 one Smt.Venkatalakshmi W/o Gangachikkaiah C.C. had executed title deeds of immovable property as security for the chit liability and standing in the name of accused. chit group No.020DL6/39 future liability Rs.21,00,000/- and chit group No.020DL 7/2008 future liability Rs.4,50,000/- and chit group No.020DL7/2009, future liability Rs.4,50,000/- total sum of Rs.30,00,000/-. The title deeds of property bearing No.BBMP No.New 26 old No.66, Eastern portion of property NO.66, 2nd cross, 12th main, Raghavendra block, Gavipuram property No.24/1/66, Bangalore PID No.53/73/26 BBMP ward No.53 Srinagara measuring extent east to west 15 feet and north to south 45 feet. In all total measuring 675 sq.ft. and bounded by east by private property, west by western portion of same property, north by road, south by government property. The said property mortgaged in favour of MSIL (Chit 16 C.C.No.6335 OF 2018 SCCH-26 funds division) No.36, Cunningham road, Bangalore-52 represented by its Foreman, Gandhinagar branch Sri.R.G.Lakshman. Further on perusal of chit ledger subscriber copy of the accused. He has received prized amount of Rs.4,02,175/- through cheque, but afterwards, he was defaulter in paying subscription amount.
16. On careful examination of all the documents of complainant, it is very clear that the complainant filed this complaint well within time and complied all the ingredients of N.I. Act 1881. The presumption Under Section 139 of the Act is a presumption of law, it is not a presumption of fact. This presumption has to be raised by the court in all the cases once the factum of dishonor is established. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttable evidence depends on the facts and circumstances of each case. Such evidence must be sufficient to prove the case. Therefore a mere explanation is not sufficient to rebut this presumption of law. It is profitable to refer and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.123/2021 arising out of special leave 17 C.C.No.6335 OF 2018 SCCH-26 petition (criminal) 1876/2018 between M/s Kalamani Tex and another Vs P.Balasubramanian disposal date on 10-02-2021 (three judges bench). In this case, Apex court held that, once signature on cheque admitted by the accused, court ought to have presume that, cheque was issued as consideration for a legally enforceable debt.
17. As per N.I. Act, the presumption is in favour of holder of cheque. Here, the holder of cheque is complainant and presumption is in favour of complainant. It is burden on the accused to rebut the above presumption. As per Section 118 of N.I Act, presumption has to be raised by the court in all the cases once the factum of dishonour is established, but it is rebuttal presumption. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and should prove beyond any reasonable doubt. The accused has not taken and proved defence to rebut the presumption of law available in favour of the complainant envisaged U/s 118 r/w section 139 of NI Act. Accordingly the case of the complainant 18 C.C.No.6335 OF 2018 SCCH-26 is acceptable as the complainant has proved that accused has intentionally not maintained sufficient amount in his account to honour the disputed cheque. Therefore, a mere explanation is not enough to repel this presumption of law.
18. Therefore in my considered view, the complainant established his case by way of documentary as well as oral evidence. Hence my answer to point No.1 in the Affirmative.
19. Point No.2: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. It is worth to note that the offence is of the nature of civil wrong. This court has power to impose both sentence of imprisonment and fine on the accused. The court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Hon'ble supreme court of India in a decision reported in 2015(17) SCC 368 in a case of H.K.Pukhraj Vs D.Parsmal observed that having regard to the length of trial and date of issuance of cheque it is necessary to 19 C.C.No.6335 OF 2018 SCCH-26 award reasonable interest on the cheque amount along with cost of litigation. Further accused has to compensate the complainant in terms of money. In the result, I proceed to pass the following:-
ORDER By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.4,30,000/- (Rupees Four Lakhs Thirty thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.4,25,000/- shall be payable to the complainant as compensation and remaining amount of Rs.5,000/- shall be defrayed as state expense.
In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith. (Dictated to the stenographer, typed by her directly on the computer, the same is corrected and then pronounced by me in the open court on this the 12th April 2021) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
20 C.C.No.6335 OF 2018
SCCH-26
ANNEXURE
WITNESSES EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW-1: D.V.Shailaja
DOCUMENTS MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P-1: Cheque
Ex.P-1(a): Signature of the accused
Ex.P-2: Bank memo
Ex.P-3: Legal notice
Ex.P-4: Postal receipt
Ex.P-5 : Postal track
Ex.P-6: Letter of authority
WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
DW.1 Nagaraja Rao Pawar DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
NIL (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.