Bangalore District Court
Sri. M. Munikrishna vs Sri. Siddappa on 6 May, 2019
IN THE COURT OF THE XXXIII ADDL. CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY.
(SCCH5)
DATED THIS THE 6TH DAY OF MAY 2019
PRESENT: SMT. SHARMILA S. B.Com, LLB.,
VIII ADDL. SCJ & XXXIII ACMM
MEMBER MACT
BENGALURU.
C.C No.27482/2012
COMPLAINANT : Sri. M. Munikrishna
S/o. Late. Munibyrappa
No.29, 1st Cross,
Nagappa Street, P.G.Halli,
Bangalore 560 003.
(By Sri.Jayaramaiah, Adv.)
V/s
ACCUSED : Sri. Siddappa
S/o. Late. Hiriyanna Gowda
'Brundavan Paradise',
No.188, 2nd Floor,
2nd Cross, Viveknagar,
Bengaluru 560 047.
Previously at:
Sri. Siddappa
S/o.Late. Hiriyanna Gowda
No.1, Channappa Building,
Dolgappa Block,
14th Cross, Egipura
Viveknagar Post,
Bengaluru 560 047.
(By Sri.Taji George, Adv.,)
*****
2 CC NO.27482/2012
SCCH5
::JUDGMENT::
The Complainant has filed a private complaint under Section 200 of Cr.P.C. against the Accused for the offence punishable under Section 138 of Negotiable Instrument Act [in short NI Act].
2. The case of the Complainant is that, the Accused approached the Complainant and had taken hand loan of Rs.10,00,000/ on 24.12.2009 for his urgent requirements and agreed to pay the interest at the rate of 1.5% per month. The Accused to discharge the part of the liability has issued a cheque bearing No.143069 dated 25.05.2012 for Rs.3,00,000/ drawn on Canara Bank, Neelasandra, Bengaluru drawn in favour of the Complainant. The said Cheque on presentation with his Banker's viz., Corporation Bank, Banaswadi Branch, 3 CC NO.27482/2012 SCCH5 Bengaluru was dishonoured with the Bank Endorsement 'Funds insufficient' dated 13.06.2012.
3. The Complainant immediately after receipt of the said intimation about the dishonor of the cheques got issued a legal notice dated 26.06.2012 calling upon the Accused to make good the cheque amount within 15 days from the date of receipt of the legal notice. The legal notice sent by RPAD has returned on 29.06.2012 with the postal remark "Addressee refused" dated 27.06.2012. The Accused inspite of receipt of the legal notice, even after lapse of 15 days from the date of receipt of the legal notice has failed to make good the cheque amount.
4. Further the Complainant contends that, the Accused has issued the said cheque knowing fully well that his account did not contain sufficient amount to honour the cheque issued by him to discharge his 4 CC NO.27482/2012 SCCH5 liability. The Accused has issued the said cheque with the deliberate intention to cheat the Complainant. The Accused has not paid the cheque amount in spite of receipt of the legal notice and even after the lapse of 15 days from the date of receipt of notice and thereby committed an offence U/Sec.138 of N.I.Act. Hence, the Complainant filed a private complaint against the Accused.
5. After perusal of the material available on record and on primafacia material grounds, this Court took cognizance and thereafter sworn statement was recorded and summons was issued to Accused person. The Accused appeared through his counsel and got enlarged himself on bail and substance of accusation was recorded as to the alleged offence under Section 138 of 5 CC NO.27482/2012 SCCH5 Negotiable Instrument Act. The Accused pleaded not guilty and claimed to be tried.
6. The Complainant - Munikrishna himself examined as PW1 and got marked Ex.P.1 to Ex.P.14 documents on his behalf and three witnesses as PW2 to PW4 and got marked Ex.P.15 documents. Per contra, the Accused himself examined as DW1 and got marked Ex.D.1 to D.8 documents.
7. The statement of the Accused under Section 313 of Cr.P.C. was recorded. The Accused denied all the incriminating evidence appearing against him. The Accused has chosen to lead defence evidence on his side.
8. Heard the arguments on both side. Learned counsel for the complainant relied on a reportable decision in Criminal Appeal No.508 of 2019 in between 6 CC NO.27482/2012 SCCH5 Rohitbhai Jivanlal Patel V/s. State of Gujarat and Anr.
9. From the above facts of the case, the points that arise for my consideration are: ::POINTS FOR CONSIDERATION::
1. Whether Complainant proves that the Accused had approached and borrowed hand loan of Rs.10 lakhs from him on 24.12.2009 for urgent requirements and agreed to repay with interest @ 1.5% per month. When the Complainant demanded, the Accused had issued a cheque bearing No.143069 dated 25.05.2012 for Rs.3,00,000/ drawn on Canara Bank, Neelasandra Branch, Bangalore and on presentation, it was dishonoured for the reason "Funds Insufficient" and despite receipt of legal notice, the accused did not make payment of the cheque amount within the stipulated period, but replied with false allegations. Thereby the accused had committed the offence punishable U/Sec.138 of NI Act?
2. What Order?7 CC NO.27482/2012
SCCH5
10. My findings to the above points are:
Point No.1: In the Affirmative Point No.2: As per final order for the following: :REASONS::
11. Point No.1: Existence of legally recoverable debt is a sine qua non for prosecuting the case under Section 138 of Negotiable Instruments Act. For convenient purpose the essential ingredients to constitute offence under Section 138 of N.I.Act is summarized as below:
(1) That there must be a legally enforceable debt.
(2) That the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes the legally enforceable debt.8 CC NO.27482/2012
SCCH5 (3) That the cheque so issued had been returned due to insufficiency of funds.
12. It is the core contention of the Complainant that the accused issued a cheque for Rs.3,00,000/ in order to discharge the hand loan borrowed by the accused.
13. In order to bring home the guilt of the Accused, Complainant examined himself as PW1 and reiterated the contents of complaint in his examination inchief. He has also placed on record Loan Agreement, Original Cheque, Endorsements issued by the Bank, Legal Notice, Postal Receipts, Unserved RPAD Postal Cover and Speed Postal Covers and Notices. The Accused's counsel crossexamined the Complainant wherein he deposed that, he is residing in the address mentioned in the complaint, he is doing liquor business, 9 CC NO.27482/2012 SCCH5 he know the Accused person from the past 6 to 7 years. But there is no business transaction between them. He lent Rs.10 lakhs to the Accused as loan by way of cash. The said amount was come from business. He has not filed income tax returns and the amount said to be borrowed by the Accused was not shown in the income tax returns. The Complainant and one Rathnakar were Accused in CC No.55811/2014 and they were acquitted in the said case.
14. Further one Mohanan, the Bank Manager, Canara Bank examined himself as PW2 and in his chief examination he admitted that, Ex.P.2 cheque in question belongs to one Siddappa, he has produced Specimen Signature Card and the same is marked at Ex.P.14 and two Specimen Signatures are marked at Ex.P.14(a) & (b). He admitted signatures on Ex.P.14 with that of disputed 10 CC NO.27482/2012 SCCH5 signature on Ex.P.2 cheque, Ex.P.3 is the Memo issued by their Bank for having returned the cheque in question. On presentation of the cheque for encashment they use to verify the signature as well as funds in the account of the concerned person. During the course of crossexamination he deposed that, he know the Accused Siddappa. Accused has furnished an endorsement to the bank for having lodged complaint in respect of missing of cheque, he might have furnished the same before his predecessor in office.
15. Further the Complainant has examined the witness in Ex.P.1 ie., Venkatesh as PW3 who deposed in his chiefexamination that, he know the Complainant and Accused. The Accused had taken hand loan of Rs.10,00,000/ from the Complainant and executed a loan agreement and he was present at that time and 11 CC NO.27482/2012 SCCH5 affixed his signature to the loan agreement as a witness and he can identify his signature on the loan agreement. During the course of crossexamination he deposed that, at the time of lending money to the Accused himself, Accused, Complainant and Rathnakar were present. The Complainant had lent Rs.10,00,000/ for the face value of Rs.500/. Further he denied the other suggestions made by the learned counsel for the Accused.
16. Further one Rathnakar, who was also one of the witness to Ex.P.1 examined himself as PW4 and in the chiefexamination he deposed that, he know the Complainant and the Accused and both of them were his friends. Accused had taken hand loan of Rs.10,00,000/ from the Complainant and executed a Loan Agreement and he was present at that time. He affixed his signature to the loan agreement as a witness. In the cross 12 CC NO.27482/2012 SCCH5 examination he deposed that, at the time of lending money to the Accused, himself, Complainant, Accused and Venkatesh were present. Further he denied the other suggestions made by the learned counsel for the Accused.
17. From the above evidence, the Accused took a defence that the Complainant is doing money lending business and there is no financial capacity to lend money to the Accused. The Complainant had not filed Income Tax Returns and he has not shown the amount which was said to be lent to the Accused. The Accused had issued cheques in favour of the Complainant in order to purchase soft drinks to his Bar and restaurant.
18. With regard to filing of IT returns is concerned on March 25, 2019 Hon'ble High Court of Madhya 13 CC NO.27482/2012 SCCH5 Pradesh in the case Shrimati Ragini Gupta Vs Piyush Dutt Sharma, has categorically stated that, "non filing of Income Tax return by itself would not mean that the complainant had no source of income and thus no adverse inference can be drawn in this regard only because of absence of Income Tax return'.
The instant criminal revision has been lodged lower court's order, whereby the revisionist has been convicted under Section 138 of NI Act. In revision, the Reviosionist has averred that the respondent has failed to prove his source of income.
The High Court of Madhya Pradesh in view of the facts and circumstances of the case affirmed the Lower court's order and made the following observations in the case: Non filing of IT returns does not mean complainant had no source of incomeThat the Revisionist's contention that the respondent had not disclosed his source of income in the income tax return cannot be a solitary basis for rejecting his evidence That mere non filing of Income Tax return would not automatically dislodge the source of income of the complainant. Non payment of income tax is a matter between the revenue and the assessee. If the assessee has not disclosed his 14 CC NO.27482/2012 SCCH5 income in the Income Tax return, then the Income tax department is well within its rights to reopen the assessment of income of the assessee and to take action as per the provisions of Income Tax Act.
That non filing of Income Tax return by itself would not mean that the complainant had no source of income and thus, no adverse inference can be drawn in this regard only because of absence of income tax return. Whether there was any loan transaction between the parties or not and whether there was any legally recoverable debt or not is the subject matter which can be ascertained in the light of entire case led by the parties.
When can presumption Under Section 139 of NI Act can be drawn against the accusedIt was also noted by the court that where issuance of cheque is proved beyond reasonable doubt and where the signature is not disputed by the revisionist at the very initial stage, then a presumption under Section 139 of the NI Act can be drawn against the accused In view of the facts of the case, the court noted that the revisionist had failed to rebut the presumption under section 139 of NI Act.
19. At the time of arguments learned counsel for the Complainant relied on a reportable decision decided on 15.03.2019 in Criminal Appeal No.508 of 2019 15 CC NO.27482/2012 SCCH5 between Rohitbhai Jivanlal Patel Vs State of Gujarat and another wherein Hon'ble Supreme Court of India observed that:
"The High Court observed that if the transaction in question was not reflected in the accounts and income tax returns, that would at best hold the assesse or lender liable for action under the income tax laws but, if the complainant succeeds in showing the lending amount, the existence of legally enforceable debt cannot be denied".
20. During the course of crossexamination it was suggested by the learned counsel for the Accused, that the Accused had issued cheques to the Complainant in order to purchase the soft drinks and by misusing the said cheques, the Complainant had filed false case against the Accused. According to the Accused, he had lodged complaint for missing of the cheques of Uco Bank 16 CC NO.27482/2012 SCCH5 and Canara Bank and in that regard he had lodged complaint on 06.05.2012 before the jurisdictional Police.
21. In order to substantiate his contention, the Accused himself examined as DW1 and got marked Ex.D.1 to Ex.D.8 documents i.e., IT Returns for the year 2008 to 201415, certified copy of the Sale Deed executed by the fatherinlaw and motherinlaw of the Accused in favour of his wife, certified copy of the Sale Deed for having purchased the flat by the Accused, Mortgage Deed, compliant lodged for missing of cheques, complaint lodged by the wife of the Accused against the Complainant and one Rathnakar, charge sheet filed against the complainant and certified copy of the Judgment and decree in OS No.6451/2012.
22. On perusal of Ex.D.5 wherein the Accused had lodged complaint before the Vivek Nagar Police Station, 17 CC NO.27482/2012 SCCH5 for missing of documents while travelling from Residency Road to Vivek Nagar and contends that on 06.05.2012 at about 11.00 in the night, he was travelling by Auto from his restaurant in Residency Road to his house in Vivek Nagar upon closing his restaurant when he was near the Viveknagar Bus Stand, he realized that the documents that he was carrying with him were missing and searched in the Auto that he was travelling by. He was carrying a plastic bag containing cheque books of UCO Bank and Canara Bank and also some estamp papers.
23. During the course of crossexamination he deposed that, he is doing hotel business. He do run Bar and Restaurant. He also admits that the Complainant also run Bar and Restaurant. He know the Complainant about 6 months prior to the date of filing this complaint. He admits his signature on his vakalath. But denies his 18 CC NO.27482/2012 SCCH5 signature on Ex.P.1 and Ex.P.2(a) and admits his signature on bail bond. Further he admits that he was a 2nd party in Ex.P.1, he has lodged complaint on 06.05.2012 with Vivek Nagar Police stating that he has lost some document and a cheque, he did not observed at the time of lodging complaint as to whether even he lost Ex.P1. He has not taken any steps to register a criminal case against the Complainant for misusing the documents and cheque leafs by forging his signatures. The Complainant had filed a suit against him in respect of this same loan amount and in that suit he obtained an Order of Attachment before judgment in respect of his flat. Immediately after coming to know about losing his cheque book, he did not informed the bank in writing to stop payment, he informed the Bank Manager orally and even handed over the copy of the Police compliant to the 19 CC NO.27482/2012 SCCH5 Bank Manager. He did not had any difficulty to intimate the bank in writing for stop payment.
24. From this evidence the Accused has taken a defense at the time of crossexamination of PW1 that, he had issued cheques to the Complainant for purchasing of soft drinks to the Bar, on the other hand he had taken a stand that he lost some documents while traveling i.e., cheques of UCO Bank and Canara Bank. He has also disputed his signatures on Ex.P.2 cheque. After service of notice, the Accused has not given any reply to the said notice by denying the contention of the Complainant nor taking the above defence.
25. The Accused in his evidence contended that, the signature in Ex.P.2 is not his signatures. I have gone through the entire evidence of PW1, wherein no suggestion was put to the Complainant by denying the 20 CC NO.27482/2012 SCCH5 signatures of cheques in Ex.P.2 and no suggestion was put stating that the signatures in the cheques in question were forged by the Complainant. Further the Accused has not given any reply by taking a defence that he has not signed the cheque and the Complainant had forged the signature of the Accused. Since the contention of the alleged forgery not raised, the arguments of the Accused's counsel does not sustained.
26. The Hon'ble High Court of Karnataka in Sri.H.M.Sathish Vs D.N.Ashok reported in 2008(1) Civil Law Journal 248 at page No.249 held that:
"Where the cheque dishonoured for insufficient funds in the account and where signature on dishonor of cheque is disputed, the best witness to prove the signature or otherwise is the Bank Manager and referring of signature to the hand writing expert held not sustainable".21 CC NO.27482/2012
SCCH5
27. It is relevant to note that, cheques mentioned in Ex.P.2 Bank Endorsement returned with 'funds insufficient'. It is relevant to note that none of the cheques were returned with endorsement "signatures differs". In view of the aforesaid precedent of Hon'ble High Court of Karnataka, if at all the Accused disputes the signature, he could have examined the Bank Manager. But on the other hand, the Complainant had examined the Bank Manager as PW2 wherein he admits the signatures found on the Ex.P.2 belongs to Accused. Moreover, the Court is competent to compare disputed and admitted signature of the Accused to arrive at its own conclusion. The Court is entitled to compare the disputed and admitted signature under Section 73 of the Indian Evidence Act. Moreover, the Accused admitted his signature on his vakalath and bail bond, wherein the 22 CC NO.27482/2012 SCCH5 Court can come to the conclusion that both the signatures are belongs to Accused himself.
28. It is evidence from the facts and from his inconsistent stand taken by him reveals that, he has requested money for the his urgent need and he has received Rs.10 lakhs from the Complainant as hand loan by promising to repay the said sum to him within and thereafter 2 cheques were issued in order to discharge the legally enforceable debt to the Complainant and those cheques were dishonorued. Though he has given complaint about missing of cheque leafs but no where in the complaint it was mentioned that whether this particular cheque was missing or not.
29. In the present case the Accused raised the defence that he had not executed any documents in favour of the Complainant. The Accused case was no 23 CC NO.27482/2012 SCCH5 legally enforceable debt or liability between the parties since he had not asked for a hand loan. During the course of his crossxamination the Accused denied all the suggestions made by the Complainant's counsel.
30. On perusal of the cheques it reveals that, the Accused has borrowed loan from the Complainant and executed those documents. Moreover, PW2 also identifies that both signature of the Accused at the cheques and specimen signature on the Bank documents are one and the same. Once this fact has been acknowledged, Section 139 of the Act mandates a presumption that the cheque pertained to a legally enforceable debt or liability. This presumption is of a rebuttal nature and the onus is then on the Accused to raise a probable defence. All these circumstances led this 24 CC NO.27482/2012 SCCH5 Court to conclude that the Accused had not raised a probable defence to rebut the statutory presumption.
31. Once the cheque relates to the account of the Accused and the signatures on the said cheque are of Accused, then initial presumption as contemplated U/s. 139 of the NI Act has to be raised by the Court in favour of the Complainant. The presumption referred in Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the Accused is entitled to rebut the said presumption. The defence raised by the Accused was that he has not issued any cheque nor executed any loan agreement which was made use of by the Complainant. Unless this barrier is crossed by the Accused, the other defence raised by him whether the cheque was issued towards hand loan or towards the amount spent by the Complainant need to be considered. 25 CC NO.27482/2012
SCCH5
32. According to the provisions of Sec.94 of Negotiable Instrument Act, if the notice of dishonour of cheque is sent by post intimating the drawer of cheque that instrument has been dishonoured within a reasonable time after the dishonour of cheque, it would be sufficient compliance of requirement of notice to be given. In the present case, notice at Ex.P.4 has been sent by PW1 to the Accused by Registered Post as per Ex.P.5 to 13, which has been returned with shara 'adressee refused returned to sender'. Therefore, it can be held that there is sufficient compliance with regard to the said requirement of Sec.94 of Negotiable Instrument Act.
33. Thereafter, by assessing the entire oral evidence and the documentary evidence of PW1, it shows that the cheque was issued by the Accused on 26 CC NO.27482/2012 SCCH5 Ex.P.2 for the amount shown in Ex.P.2 in discharge of liability in favour of PW1 is found to be true. So presumption under Section 139 of Negotiable Instrument Act operates against the Accused and it is for the Accused to prove his contention that the said cheque at Ex.P.2 was not issued for discharge, in whole or any part of any debt or other liability due by him which has not been established by the Accused and the presumption operates under Sec.139 of Negotiable Instrument Act in favour of the Complainant who is the holder of the cheque and has received the cheque at Ex.P.2 of the nature referred to in Sec.138 of Negotiable Instrument Act for the discharge, in whole or any part of any debt or other liability. The Accused has failed to rebut the said presumption by not adducing any cogent evidence to establish that he did not issue the cheque towards the 27 CC NO.27482/2012 SCCH5 discharge of antecedent liability. Moreover, at the time of recording of statement U/Sec.313 of Cr.P.C, the Accused has not taken any defence as stated in his defence and he simply denied the incriminating evidence made by the Complainant.
34. The Accused has disputed his signature at Ex.P.2. But he has not adduced any cogent evidence to rebut the presumption under Section 139 of Negotiable Instrument Act that he did not issue the cheque at Ex.P.2 towards the discharge of antecedent liability, which is proved by the Complainant by production of the Bank Endorsement at Ex.P.3 & 4, Loan Agreement at Ex.P.1, from Ex.P.5 Legal Notice issued by the Complainant in this case within 15 days from the receipt of Ex.P.5 regarding the dishonour of the cheque at Ex.P.2 and intimated the same to the Accused as per Ex.P.5 28 CC NO.27482/2012 SCCH5 which was returned as addressee refused as per Ex.P.7 to 14. It is also not disputed that the Complainant files the complaint within the prescribed period from the date on which the cause of action arose. In the result, I am of the opinion that the Complainant has proved the commission of the offence by the Accused for the offence punishable under Section 138 of Negotiable Instrument Act. Accordingly, Point No.1 is answered in the Affirmative.
35. Point No.2: In view of my findings on point No.1, I proceed to pass the following:
::ORDER::
Acting U/s.255(2) of Cr.P.C the Accused is convicted for the offence punishable under Section 138 of Negotiable Instrument Act and sentenced to pay a fine of Rs.10,000/ in 29 CC NO.27482/2012 SCCH5 default to undergo simple imprisonment for 6 months.
Further, it is made clear that an amount of Rs.3,00,000/ is to be paid to the Complainant as compensation as provided under Section 357[3] of Cr.P.C.
In default of payment of compensation amount, the Accused shall undergo Simple Imprisonment for a period of three months.
Office is directed to supply certified copy of this judgment to the Accused on free of cost in compliance of Sec.363(1) of Cr.P.C. (Dictated to the Stenographer directly on the computer, typed by her, transcript revised corrected and then pronounced by me in the Open Court on this the 6th day of May, 2019) (SHARMILA S.) VIII ADDL. SCJ & XXXIII ACMM MEMBER - MACT, BENGALURU.30 CC NO.27482/2012
SCCH5 ::A N N E X U R E::
LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:
PW1 : Sri. Munikrishna PW2 : Sri.Mohanan PW3 : Sri. H.N. Venkatesh PW4 : Sri. Rathnakar
LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P.1 : Loan Agreement
Ex.P.1(a) & : Signatures
(b)
Ex.P.2 : Original Cheque dated 01.06.2012
Ex.P.2(a) : Signature
Ex.P.3 : Memorandum of Cheques Unpaid
Ex.P.4 : Cheque Return Memo
Ex.P.5 : Copy of Legal Notice
Ex.P.6 : Postal Receipts
Ex.P.7 to : Postal Covers
Ex.P.10
Ex.P.11 to : Copy of Legal Notice
Ex.P.14
Ex.P.15 : Copy of Specimen Signature Card
Ex.P.15(a) & : Signatures
(b)
31 CC NO.27482/2012
SCCH5
LIST OF WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
DW1 : Sri. Siddappa LIST OF DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
Ex.D.1 : Copy of Income Tax Returns
Ex.D.2 : Copy of Sale Deed
Ex.D.3 : Copy of Absolute Sale Deed
Ex.D.4 : Copy of Equitable Mortgage by way of
Deposit of Title Deeds
Ex.D.5 : Letter to SI, Vivek Nagar Police
Station
Ex.D.6 : Copy of FIR
Ex.D.7 : Copy of Charge Sheet
Ex.D.8 : Judgement and Decree in OS
No.6451/2012
(SHARMILA S.)
VIII ADDL. SCJ & XXXIII ACMM
MEMBER - MACT,
BENGALURU.