Bangalore District Court
M/S. V.R. Constructions vs M/S. Annapoorna Power on 1 February, 2023
KABC010224952021
Presented on : 21-10-2021
Registered on : 21-10-2021
Decided on : 01-02-2023
Duration : 1 years, 3 months,
11 days
IN THE COURT OF THE LXIV ADDL.CITY CIVIL &
SESSIONS JUDGE (CCH-65) AT BENGALURU.
Dated this 1 st day of February 2023
-: P R E S E N T :-
Smt. Kalpana M.S.,
B.Sc., LL.M.,PGD-CLCF.,
LXIV ADDL.CITY CIVIL & SESSIONS JUDGE,
CCH-65, BENGALURU CITY.
CRIMINAL APPEAL No.743/2021
APPELLANT : M/s. V.R. Constructions,
(ACCUSED - IN No.85, Narendra Nilaya,
TRIAL COURT) : Nagasandra Main Road,
T.R.Nagar,
Bengaluru-560 028.
Reptd.by its Proprietor,
Sri.K.V.Ranjith Kumar.
(By Sri.S.K. Mithun, Advocate)
/Vs/
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RESPONDENT/ M/s. Annapoorna Power
Tools, No.27,
(COMPLAINANT - Kadirenahalli Underpass,
IN TRIAL Bengaluru-560 070.
COURT) : Reptd.by its Proprietor,
Sri.Channaveeraswamy
(Nagraj)
(By Sri. M.K., Advocate.)
J UD GME N T
Appellant has filed this appeal U/s.374(3)
R/w.Sec.382 of Code of Criminal Procedure assailing
the judgment of conviction and order of sentence
passed in C.C.No.6714/2016 dated 07.04.2021 on the
file of XVI-Addl. Chief Metropolitan Magistrate,
Bengaluru.
2. Rank of the parties is referred to as per their
ranks assigned before the trial court.
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3. The facts of the case leading to this appeal
may be summarized as under;
The respondent is complainant before the trial
court. The complainant has filed a complaint U/s.200
of Code of Criminal Procedure alleging the offence
committed by the accused punishable U/s.138 of
Negotiable Instrument Act (herein after referred as
N.I.Act). According to the complainant, he is the
proprietor of M/s.Annapoorna Power Tools and
running the business of hiring the civil materials like
centering sheets, jacks, rods and other materials on a
daily or monthly basis. Accused No.2 is the proprietor
of the accused No.1 company being the civil contractor
had approached him for supply of centering materials
for construction on monthly rental basis and in this
regard an agreement of hiring dated 05.10.2013 was
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entered into by the accused with him. As per the
agreement of hiring dated 05.10.2013 the accused
failed to return the civil materials within the time
agreed. It was agreed that an amount of ₹.3,000/- per
day would be levied as idling charges and as on
01.06.2015 accrued is due for a sum of ₹.15,38,652/-
to the complainant. After repeated demands and
requests made by the complainant, towards part
payment of the amount due, accused issued two
cheques bearing No.535905 and 535906 dated
25.05.2015 and 21.05.2019 respectively drawn on
Karnataka Bank Ltd., BSK 2nd Stage Branch,
Bengaluru for a sum of ₹.4,50,000/-( four lakhs fifty
thousand rupees) each in favour of the complainant.
On presentation, the said cheques were returned
unpaid for the reason "Exceeds Arrangement".
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Statutory notice dated 11.06.2015 was issued to the
accused informing dishonour of the cheques and
requesting him to pay the amount covered under the
cheques. As the accused did not pay the amount
covered under the cheques within time prescribed by
law, complaint was filed. The trial court took
cognizance and after going through the materials found
the prima facie case against accused for the offence
punishable U/s.138 of Negotiable Instrument Act,
registered criminal case and issued summons.
4. Before the trial court, accused appeared, got
enlarged on bail. The substance of accusation was
recorded, he claimed trial. Proprietor of the
complainant company got examined himself as Pw.1
and got marked in 50 documents from Ex.C.1 to
Ex.C.50 and closed his side. The accused was
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examined U/s.313 of Code of Criminal Procedure. The
accused No.2 examined himself as Dw.1 and closed
his side. Trial court after hearing arguments on both
sides and on appreciation of oral and documentary
evidence, found accused No.1 and 2 committed offence
punishable U/s.138 of Negotiable Instrument Act,
convicting and sentenced accused No.2 to pay the fine
of ₹.9,25,000/-(Nine lakhs Twenty Five thousand). In
default to undergo simple imprisonment for three
months.
5. Feeling aggrieved by the said judgment,
accused persons are appeared before this court urging
the following grounds;
The judgment of the trial court is contrary to law
and evidence adduced by the parties. The trial court
has not considered that, the cheque was not issued
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towards discharge of any debt of liability. The trial
court erred in not taking into consideration the Hiring
Agreement dated 05.10.2013 marked as Ex.C.10. It is
clearly evident from the said agreement that, disputed
blank cheques were issued by the accused for security
purpose. It was mutually agreed between parties that,
cheques would be used for security purpose and not
for any other purpose. The complainant has also
admitted that, he was not in contact with the accused
in the year 2015 and also admitted the fact that,
accused had issued blank cheques on 05.10.2013 and
same were in his custody from that date. The trial
court has blatantly ignored the fact that, respondent
has not produced any invoice bill or any other
documents to prove that, appellant was due to a sum
of ₹.15,38,652/- as alleged by him in the complaint.
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The trial court has erred to consider the admissions
elicited by the accused. The respondent had not
challenged the statement of accused regarding
issuance of the blank cheques as security. The trial
court convicted the accused on imaginary grounds
which is not supported by the evidence. The entire
approach of the trial court is against the established
principles. The trial court has not properly appreciated
the evidence adduced by the accused which
probabalize his defence and it is sufficient to disprove
the case of the complainant. The trial court has not
considered the inconsistencies and major lacunas in
the case of the complainant. Therefore, on these
grounds, the accused prays to allow the appeal and to
acquit him for the offence U/s.138 of N.I.Act.
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6. After registration of the appeal, notice was
issued to the respondent. Respondent appeared
through counsel. The entire trial court records have
been secured.
7. Heard arguments. Perused the written
arguments filed by the appellant and respondent and
materials on record.
8. The following points that arise for my
consideration;
1. Whether cheques at Ex.C.1 and 2 were
issued by the accused persons in favour of
the complainant towards discharge of debt
or liability as alleged in the complaint?
2. Whether trial court is correct in holding
that, accused persons have committed
offence punishable U/s.138 of Negotiable
Instrument Act?
3. Whether interference of this court is
necessary in this appeal?
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4. What Order?
9. On re-appreciation of oral and documentary
evidence, in the light of the arguments advanced by the
learned advocates for both sides, my findings on the
aforesaid points as follows:-
Point No.1: In the Affirmative
Point No.2: In the Affirmative
Point No.3: In the Negative
Point No.4: As per final order,
for the following:-
R EAS O N S
10. POINTS NO.1 & 2:- These points are
interrelated, hence they are taken together for common
discussion in order to avoid repetition of facts and
evidence.
It is canvased in the written arguments of the
appellant that, as per the terms of the hire purchase
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agreement, the disputed cheques were issued in favour
of the complainant for security towards any loss or
damage that might be caused to the materials supplied
by him. In case, there is no damage to the materials at
the time of return, the respondent has to return the
cheques to the appellant. The appellant has settled the
entire claims of the respondent. Instead of returning
the security cheques, the complainant has misused the
same to file this false complaint, which is not
sustainable in the eye of law. It is further line of
argument that, complainant has not produced any
invoices or bills to establish the liability of the
appellant to pay the amount covered under the
cheques. The Trial Court has ignored this aspect and
jumped into the conclusion that, accused is liable to
pay the amount covered under the cheques and passed
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conviction order. The accused has rebutted the
statutory presumptions available to the complainant
and hence, onus shifts on the complainant to prove the
transaction and the alleged liability of the accused
beyond all reasonable doubt. Complainant has not
placed acceptable materials to discharge the burden.
Hence, the learned counsel submits that, the accused
is entitled for the acquittal by setting aside the order of
conviction.
11. The learned counsel for the respondent
canvassed in his written arguments that, the oral
testimony and the documents placed by the
complainant show the compliance of all the ingredients
of Sec.138 of the N.I.Act. Thus, the complainant is
entitled for statutory presumptions under Sec.139 r/w
Sec.118 of N.I.Act. In the present case, the accused
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has not disputed the subject cheques and the
signature present thereupon. Consequently, the
burden of rebuttal is upon the accused by way of
establishing his defense of payment of the agreed
amount and return of centring materials well within
the time. It is forthcoming from the admissions of
accused / DW.1 that, he has not complied the terms of
the hire purchase agreement. Thus, the cheques in
question were issued towards discharge of the liability.
Even otherwise, the security cheques attract penal
liability. Furthermore, it is contended that, Sec.20 of
N.I.Act empowers the complainant, who is holder in
due course of the negotiable instrument to complete
the inchoate cheque. The defense raised by the
accused is not acceptable. The trial Court has
considered all these aspects in proper perspective and
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rightly convicted the accused person. It need not
requires interference at the hands of this Court.
Accordingly, the learned counsel submits that, the
appeal deserves dismissal.
12. In the back drop of the rival submissions,
this court has meticulously appreciated complaint
averments, documents placed by the complainant.
Before proceedings further, it is relevant to reassert
proposition of law laid down by the Hon'ble Apex court
in connection with the cheque bounce cases. In the
celebrated decision reported in AIR 2010 SC 1898 in
a case of Rangappa Vs. Mohan, wherein it is held in
para No.9 that;
"Ordinarily in cheque bouncing cases,
what the courts have to consider is
whether the ingredients of the offence
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enumerated in Sec.138 of the Act have
been met if so, whether the accused was
able to rebut the statutory presumption
contemplated by Sec.139 of the Act.
The Hon'ble Court observed that, the presumptions
U/s.139 of Negotiable Instrument Act is a presumption
of law, it is not a presumption of fact. This presumption
shall be raised by the court in all cases once the factum
of dishonour is established. The onus of proof to rebut
this presumption lies on the accused. The standard of
rebuttal evidence depends on the facts and
circumstances of each case. The mere explanation is not
enough to repel this presumption of law, as reported in
AIR 2001 SC 3897; Hiten P:. Dalal V/s.
Bratinderanath Banerjee and (2006) 6 SCC 39;
M.S.Narayan Menon alias Mani V/s.State of Keral
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and another and ILR 2009 KAR 1633; Kumar
Exports V/s. Sharma Carpets.
13. As per the dictum of the Apex Court, in a
case of this nature, the Court shall consider the
compliance of ingredients of the offence punishable
U/s.138 of Negotiable Instrument Act.
Complainant has produced following documents;
1. Ex.C.1 and 2 - cheques dated:25.05.2015
and 21.05.2015
2. Ex.C.3 and 4 - Bank Memos
dated: 27.05.2015
3. Ex.C.7- Office copy of Legal Notice
dated:11.06.2015
4. Ex.C-8- Endorsement of Postal authority
dated:12.06.2015
5. Complaint filed on 13.07.2015
Perusal of these documents show that,
complainant has presented the cheques within validity
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period of 3 months. Cheques returned unpaid with
banker's memo for the reason "Exceeds
Arrangements". Within one month from the date of
bank endorsement, legal notice has been issued. After
expiry of 15 days period to comply the terms of notice,
present complaint filed within one month from the
date of cause of action. Accordingly, it is contended
that, the complainant complied all the ingredients of
Section 138(a) to (c) of Negotiable Instrument Act. The
accused has not disputed the signature present on the
disputed cheques and also admitted that, cheques in
question belong to the bank account maintained by
him. Therefore, it is claimed by the complainant that,
legal presumptions enshrined U/s.139 and 118 of
Negotiable Instrument Act could be raised in his
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favour, which includes the existence of legally
enforceable debt or liability.
14. The next point for consideration is whether
the accused has placed cogent material on record
sufficient to rebut the statutory presumption? In the
case of this nature, the defence of accused could be
gathered from the reply notice. Plea of defence,
suggestions and admissions in the cross-examination
of Pw.1. The contentions taken in the reply notice
acquires more credibility, as it is the first and foremost
opportunity to the accused to place his defence by
explaining the circumstances under which the
disputed cheques reached the custody of the
complainant. Admittedly, the accused has not issued
reply and hence, forgo the first opportunity to resist the
claim of the complainant.
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15. In this scenario, this Court has appreciated
the evidence before the Court to analyze the grounds
raised by the accused person. It is a specific defence of
the accused that, complainant has collected the
subject cheques as a security towards any loss or
damage that may be caused to the materials supplied
by him. The accused has not caused any damage to
the materials and they were returned in a good
condition by settling the claims of the respondent.
Hence, the security cheques does not attract penal
liability on the accused person.
16. Per contra, the complainant contends that,
the accused has not paid the entire amount claimed by
the complainant. Hence, disputed cheques were issued
towards discharge of the liability. If at all, the accused
has settled the entire claim of the complainant, he
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would have certainly taken proper steps to get back the
cheques allegedly issued as security, by way of
issuance of the legal notice and etc. Admittedly, the
accused has not taken any such steps. Thus, it is
argued that, this bald defense of the accused is not
acceptable.
17. It has come in the evidence of DW.1 that, he
has not kept separate ledger or accounts in respect of
the transaction with the complainant. He has no
documents to show the cash payment of Rs.6,80,000/-
to the complainant. He cannot say the dates of
payments of the alleged cash amounts in favour of the
complainant. Moreover, it is unequivocal admission
attributable to the accused that, the Supervisor of the
accused company had knowledge of the present
transaction between the parties. But the said person is
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not examined before the Court. To put it in otherway,
DW.1 has no personal knowledge about the transaction
in question. In the absence of the knowledge about the
transaction and bereft of documents to that effect, it is
difficult to accept the contention of the accused
regarding the payment of the entire amount under
Ex.C.10 hire purchase agreement dated 05.10.2013.
18. Further, accused seriously contends that,
the disputed cheques are the security cheques and the
complainant has misused the same to make this false
claim. On the other hand, the covenants of Ex.C.10-
hiring contract of centring and other items, at page
No.2 reads thus:
"For the purpose of securing the materials /
items provided to you for carrying out work
on site, which will be in your sole custody
and care for carrying out your work, you will
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be required to issue two no. cheques as
under which will be used/encashed if there
is any deviation or disturbance/damage etc.,
to our materials."
A cursory reading of above covenant connotes
that, any deviation or disturbance/damage to the
materials entitles complainant to encash the two
cheques issued by the accused. As stated earlier,
though the accused claims that, he has paid the entire
amount, but failed to establish the same through
cogent and acceptable evidence. Thus, it could be
safely taken that, there is a deviation from the agreed
covenants, which entitles the complainant to use/
encash the security cheques.
19. That apart, it has come in the evidence of
the accused that, he has returned the centring
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materials in the year 2014. Contrary to this statement,
DW.1 further voluntarily stated before the Court that,
the work for which complainant had supplied the
materials to us was completed by the end of 2018.
These contrary statements attributable to DW.1 that,
he has no personal knowledge about the transaction
and deposing falsehood. It is difficult to believe that,
accused has returned the materials in the year 2014,
but the work was completed in the year 2018. Thus,
the evidence of DW.1 does not inspires the confidence
of this Court.
20. Even otherwise , the Hon'ble courts have laid
down on the plethora of decisions that, the cheque
issued for security also attracts Section 138 of N.I.Act.
In the decision reported in 2015 (4) KCCR 2881 (SC)
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in a case of T.Vasanthkumar V/s.Vijayakumari
wherein the Hon'ble Apex court held that,
"NEGOTIABLE INSTRUMENT ACT, 1881-
Section 138 and 139 - acquittal- If justified-
Accused not disputing issuance of cheque
and his signature on it- Plea that it was
issued long back as security and that loan
amount was repaid- Not supported by any
evidence- Fact that date was printed, would
not lend any evidence to case of accused -
Acquittal not proper."
Similar to the cited decision, in the present case
also it is the main defence of the accused that the cheque
in dispute alleged to have been issued towards security to
the complainant-Bank and the complainant by misusing
the said cheque has filed this complaint. But, the accused
has admitted the issuance of cheque and his signature on
the said cheque and also taken defence that, the cheque
was issued towards security but no documents or proof
given by the accused to prove his defence. In such
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circumstances by applying the principles of law laid down
in the above decision, the defence of the accused cannot
be acceptable one.
21. In another decision reported in AIR 2018 SC
3601 in a case of T.P.Murugan (dead) their. Lrs. V/s.
Bhojan V/s. Posa Nandi, rep. their Lrs. PA holder
T.P.Murugan V. Bhojan, wherein the Hon'ble Apex court
held that;
"Negotiable Instruments Act (26 of 1881),
Ss.118, 138, 139 - Dishonour of cheque-
Presumption as to enforceable debt -
cheques allegedly issued by accused
towards repayment of debt - Defence of
accused that 10 cheques issued towards
repayment of loan back in 1995 -
behavior of accused in allegedly issuing
10 blank cheques back in 1995 and never
asking their return of 7 years, unnatural
- Accused admitting his signature on
cheques and pronote, presumption
U/s.139 would operate against him -
Complainant proving existence of legally
enforceable debt and issuance of cheques
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towards discharge of such debt -
Conviction, proper."
In the light of the ratio laid down in the cited decisions
under the facts and circumstances of the case, this
court opined that, at the first instance, accused has
not proved that, cheque in question was issued as
security even otherwise, when it is taken that, cheque
was issued as security for the loan also, it attracts
prosecution U/s.138 of N.I.Act.
22. Further, accused has taken contention that,
a blank cheque issued by the accused is misused by
the complainant. It is worth to mention that, accused
has not disputed that, cheque in question is belongs
to his account and it carries his signature. Section 20
of N.I.Act empowers the holder in due course of the
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Negotiable Instrument to complete the inchoate
document.
23. In this context, it is profitable to refer the
decision reported reported in Crl.A.No.230-231 of
2019 (SLP CCRL) Nos.9335-35 of 2018 (Birsingh
V/s.Mukeshkuma), The Hon'ble court has observed
that, the holder in due course of cheque i.e.,
complainant is permitted under law to fill up the
amount and other particulars in the blank cheque.
This will not invalidate the cheque. Even in case of
accused taking contention of the issuance of blank
cheque, then also the onus would still on the accused
that, the cheque was not issued towards discharge of
debt or liability by adducing evidence. Thus,
contentions of the accused regarding issuance of the
blank cheque, would not helpful to prove his defence.
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So also, the complainant has produced Ex.C.11 and
Ex.C.12 - Invoices and Ex.C.13-Delivery note. These
documents are not countered by the accused. In that
view of the matter, the defence taken by the accused is
not acceptable.
24. To sum up, on re-appreciation of pleadings,
evidence and documents placed before learned trial
court, it is crystal clear that, complainant has complied
the ingredients of Sec.138 of N.I.Act. Hence, statutory
presumptions are available to him. The accused has
not placed acceptable and cogent evidence to prove
his defence sufficient to rebut the statutory
presumptions available to the complainant. Therefore,
this court can safely opined that, complainant has
proved that Ex.C.1 and Ex.C.2 cheques were issued by
accused towards partial repayment of loan amount. On
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presentation, said cheques returned unpaid for
Exceeds Arrangements in the account of the accused
person. The learned trial court has considered all these
aspects in proper perspective and rightly held that,
accused has committed the offence punishable
U/s.138 of N.I.Act. Accordingly, points No.1 and 2
under consideration are answered in the Affirmative.
25. POINT NO.3:- The complainant has placed
cogent material to show compliance of all the
ingredients of Section 138 of Negotiable Instrument
Act, which envisages raising of statutory presumptions
in favour of the complainant. The accused is not
successful in placing acceptable contentions to rebut
the presumptions. Thus, the complainant has proved
the guilt of the accused punishable U/s.138 of
Negotiable Instrument Act.
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26. The trial court assigned proper reasons in
the impugned judgment of conviction as against the
allegations made in the memorandum of appeal and
proceeded to pass conviction and imposed sentence of
fine amount. No grounds are made out in the
memorandum of appeal to interfere with the Impugned
judgment of conviction.
27. So far as quantum of sentence is concerned,
trial court has imposed sentence of fine directing the
accused to pay compensation of ₹.9,25,000/-(Nine
lakhs twenty five thousand rupees only) to the
complainant for dishonour of two cheques for
₹.4,50,000/-(Four lakhs fifty thousand rupees only)
each. Out of fine amount of ₹.9,25,000/-(Nine lakhs
twenty five thousand rupees only), ₹.9,20,000/-(Nine
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lakhs twenty thousand) shall be paid to the
complainant by way of compensation and ₹.5,000/-
(Five thousand) shall be paid to State exchequer. In
default of payment of compensation amount, accused
shall undergo simple imprisonment for three months.
Fine amount imposed is within the purview of Section
138 of N.I.Act. Appellant failed to establish the fact
that, sentence imposed is exhorbitant.
Accused/appellant failed to show that, quantum of fine
imposed is excessive. There is no merit in the appeal.
Order under appeal is sustainable in law. Hence,
interference of this court is not necessary. Accordingly,
point No.3 under consideration is answered in the
Negative.
28. POINT NO.4 :- In view of findings on the
above points No.1 to 3, this criminal appeal is devoid of
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merits and the same is liable to be dismissed by
confirming impugned judgment of conviction and order
of sentence. Hence, this court proceed to pass the
following:
ORDER
This Criminal Appeal U/s.374(3) R/w.Sec.382 of Code of Criminal Procedure filed by the appellant is dismissed.
Consequently, the judgment of conviction and order of sentence dated 07.04.2021 passed in C.C.No.6714/2016 on the file of XVI-Addl.Chief Metropolitan Magistrate, Bengaluru is confirmed.
Appellant/accused is directed to appear before the Trial Court to deposit the fine amount or to serve the default sentence.
33Crl.A.No.743/2021 Office is directed to transmit T.C.R. along with copy of this Judgment to the trial court, forthwith.
(Dictated to the Judgment Writer, script typed by her and corrected, signed and then pronounced by me in the open court on this the 1st day of February, 2023.) (KALPANA M.S.) LXIV ADDL.CITY CIVIL & SESSIONS JUDGE, (CCH-65), BENGALURU CITY.
34Crl.A.No.743/2021 01.02.2023 35 Crl.A.No.743/2021 Judgment pronounced in the open court. Vide separate judgment ORDER This Criminal Appeal U/s.374(3) R/w.Sec.382 of Code of Criminal Procedure filed by the appellant is dismissed.
Consequently, the judgment of conviction and order of sentence dated 07.04.2021 passed in C.C.No.6714/2016 on the file of XVI- Addl.Chief Metropolitan Magistrate, Bengaluru is confirmed.
Appellant/accused is directed to appear before the Trial Court to deposit the fine amount or to serve the default sentence.
36Crl.A.No.743/2021 Office is directed to transmit T.C.R. along with copy of this Judgment to the trial court, forthwith.
LXIV ADDL.CITY CIVIL & SESSIONS JUDGE, (CCH-65), BENGALURU CITY.