Bangalore District Court
Amaresh Honnagudi vs Kns Constructions on 20 June, 2015
IN THE COURT OF THE XII ADDL. CHIEF
METROPOLITAN MAGISTRATE, AT BENGALURU
Dated this the 20th day of June 2015.
Present: Sri. K.M.Radhakrishna, B.A., LL.B.,
XII Addl. Chief Metropolitan Magistrate,
Bengaluru.
C.C.No.5187/2010
Complainant: Amaresh Honnagudi,
S/o. Ayyappa Honnagudi,
Aged about 39 years,
Proprietor of M/s. ABK Electricals,
No.792/B, 16th Main,
Gokula 1st Stage, 1st Phase,
HMT Layout, Mathikere, B'lore-54.
(By Sri.H.Pavana Chandra Shetty,
Adv.)
- Vs -
Accused: 1. KNS Constructions,
No.668, 10th D Main,
Rajajinagar, 6th Block, B'lore-10.
Rep. by its Partners.
2. Narasimhaswamy,
S/o. Narasimhaiah,
Aged about 39 years,
No.5, 1st Cross, Garden Villa,
Maruthinagar, Nagarabhavi,
Bengaluru-72.
3. R.T.Kumar,
S/o. Ramaiah,
Aged about 38 years,
No.152, 1st A Cross,
Central Excise Layout, B'lore-40.
(By Sri.Mahesh, Adv.)
******
2 CC No.5187/2010
JUDGMENT
This is a complaint under Sec.200 of Cr.PC against accused persons for the offence punishable under Sec.138 of the Negotiable Instruments Act.
2. Facts of the complaint in brief are that, the complainant is the registered proprietor of ABK Electricals and Class-I Electrical Contractor. A2 and A3 are the partners of A1 M/s.KNS Constructions company involving in the business of constructing of apartments and buildings. The accused persons have entrusted the work of internal and external electrification of the KNS Sannidhi Apartments at No.1969/1660/1-1-8 at Nelamangala Town vide work order at the cost of Rs.49,47,000/- and have entered into an agreement dated 5.1.2007. As per the work order, the complainant has started the work in the said constructing apartments on the basis of drawing of M/s.Archventure, Architects, Interior Designers, electrical consultant and civil contractor. On 18.9.2008, the accused persons have paid Rs.4,94,335/- to the complainant after deduction of TDS through the cheque bearing No.016115 drawn on the Bharath Co-operative Bank (Mumbai) Ltd., K.H.Road, Bengaluru to the complainant. Towards further payment of the first running bill, the accused persons have issued two cheques bearing No.022287 and 022288 both are dated 15.5.2009 for Rs.5,00,000/- each drawn on the Bharath Co-operative Bank (Mumbai) Ltd., in favour of the complainant. On their presentment to the bank of the accused for encashment, both the cheques were dishonoured with a shara "funds insufficient"
dated 11.7.2009. The legal notice dated 28.7.2009 sent by UCP was served to the accused and the notice sent by RPAD was 3 CC No.5187/2010 returned with the postal shara "not claimed" dated 1.8.2009. Accused persons instead of paying the cheques amount, have sent an untenable reply and committed an offence punishable under Sec.138 of the Negotiable Instruments Act.
3. Wherefore, it is prayed to punish the accused in accordance with law and compensate the complainant under Sec.357 of Cr.PC to meet the ends of justice.
4. After taking cognizance and registration of the case, process were ordered against accused persons. On receipt of the same, accused persons have put their appearance through an Advocate and were got enlarged on bail. The accusation for the aforesaid offence was recorded and explained the same to the accused in the language known to them. They pleaded not guilty and claims to be tried.
5. To prove the case, the complainant has been examined as PW.1 and got marked documents as Ex.P.1 to Ex.P.16. After the evidence, the statement under Sec.313 of Cr.PC has been recorded, read over and explained the same to accused persons. They denied the incriminating evidence appearing against them. Per contra, A2 on his behalf and on behalf of the other accused has been examined as DW.1 and got marked documents as Ex.D.1 to Ex.D.7.
6. Heard oral and written arguments from both side.
7. Points for consideration are;
1. Whether accused persons prove that, the cheques Ex.P.1 and Ex.P.2 in question were not issued by them in favour of the complainant in 4 CC No.5187/2010 discharge of any legally enforceable debt or liability ?
2. Whether the complainant proves, the offence punishable under Sec.138 of the Negotiable Instruments Act against accused persons ?
3. What order ?
8. My answer to the above points are;
Point No.1 : Negative,
Point No.2 : Affirmative,
Point No.3 : As per the final order for the
following;
REASONS
9. POINT NOS.1 & 2: Before discussing the evidence on
real controversy, it is useful to narrate the undisputed facts in this case as hereunder to avoid repetitions:-
The complainant is a class-I Electrical Contractor running in the name and style of M/s.ABK Electricals. A2 and A3 are the registered partners of A1 M/s.KNS Constructions involving in the business of constructions of apartments and buildings. They have built up KNS Sannidhi Apartments at No.1969/1660/1-1-8 at Nelamangala Town as per the approved plan Ex.P.15. They have entrusted the work of interior and external electrification of the said project to the complainant at the cost of Rs.49,47,000/- in the year 2007 as per the quotation Ex.P.11. A2 and A3 have raised the loan of Rs.2.5 Crore from the Bharath Co-operative Bank (Bombay), K.H.Road Branch, Bengaluru as per the documents at Ex.D.4 to Ex.D.7. In view of the longstanding 5 CC No.5187/2010 acquaintance for more than 14 years, the complainant stood as a surety for the said loan.
10. Here, in the examination-in-chief, PW.1 has reiterated the complaint averments and asserts the issuance of cheques Ex.P.1 and Ex.P.2 by the Accused for Rs.5,00,000/- each to him to pay towards the electrical work done at the Nelamangala project.
PW.1 has produced the agreement Ex.P.9 dated 5.1.2007 and the work order Ex.P.10 dated 10.12.2007 asserting the execution by the accused and claims to have carried out the work by him thereunder. It is noteworthy that, giving of cheques Ex.P.1 & 2 for Rs.5,00,000/- each by A2 and A3 in favour of the complainant, the dishonour of cheques by their banker as per endorsements Ex.P.3 and Ex.P.4 for the reason "funds insufficient", non-payment of cheques amount by the accused despite service of the demand notice Ex.P.5 etc., are not in dispute. Therefore, no need to discuss on these admitted facts.
11. In the defence evidence, accused persons denies their liability under Ex.P.1 and Ex.P.2 and the claim putforth by the complainant as false. DW.1 contends that, prior to the commencement of electrical work in the apartments, fully filled up cheques Ex.P.1 and Ex.P.2, a signed blank stamp paper and a signed blank letter head were given to the complainant on his demand for security to the work supposed to be done in the Nelamangala Project. The accused denies the execution of the agreement Ex.P.9 and the work order Ex.P.10 in favour of the complainant. With this background, accused persons alleged as if the complainant has misused their cheques and converted the 6 CC No.5187/2010 blank papers into Ex.P.9 and Ex.P.10 by way of fabrication for the purpose of this case. Endorsing the said defence, the learned defence counsel argued that, misusing of signed blank papers by way of fabrication amounts to material alteration and such documents would have no sanctity under the law. Reliance is placed on the following authorities to support his arguments:
• 2014 (1) DCR 278 - in the case of M/s.Dorairaj Mills Ltd. -Vs- M/s.Siruvanee Clothing Company.
"Held - Under Sec.87 of N.I.Act - When a material portion of a promissory note is a forgery, the whole note is invalid as there is no difference in principle between alteration after execution and the creation of a forged note."
• 2014 (2) DCR 760 (Karnataka High Court) -
Lalit B Jain -Vs- Narendra Kumar.
"Held - If there is undisputed material alteration of an instrument under N.I.Act, the benefit of doubt should be given to the accused and acquittal in such a case is just and proper."
Also referred:
• 2014 (1) DCR 9 - John K Abraham Vs Simon C
Abraham and another.
• 2006 (1) DCR 161 (Delhi High Court) - PCS Kanaujia
Vs Madan Mohan Chitkara.
12. Here, inspite of the contention as such, the defence of the accused is totally uncertain, vague and appears to be misleading. It is noteworthy that, Ex.P.13 is the reply given by the accused to the demand notice Ex.P.5 of the complainant. Wherein, cheques at Ex.P.1 and Ex.P.2 are noticed to have given 7 CC No.5187/2010 to the complainant for security in respect of the work carried out by him at Maddur Project. Contra thereto, in the defence evidence, DW.1 claims that, Ex.P.1 and Ex.P.2 were given for security in respect of the work supposed to be done at Nelamangala Project. Whereas, in the cross-examination of PW.1, the defence counsel took a stand as if the cheques at Ex.P.1 and Ex.P.2 were taken by the complainant to stand as a surety to the loan of Rs.2.5 Crore borrowed by the accused in the Bharath Co-operative Bank. The above contraversions indicates that, accused persons are making all possible efforts to withheld the real truth and derail the prosecution track as rightly pointed out by the complainant. In fact, the value of the work supposed to be done by the complainant at Nelamangala Project was admittedly Rs.49,47,000/- as per the quotation Ex.P.11. Therefore, giving Ex.P.1 and Ex.P.2 for meger amount of Rs.10,00,000/- for security is unbelievable.
13. It is not in dispute that, apart from the Nelamangala Project, accused persons have also entrusted the electrification work of M/s.Pranav International knitwear at Maddur, Mandya District to the complainant under a separate quotation for a sum of Rs.30,87,500/-. The work of both the projects were admittedly under the progress simultaneously. DW.1 contends that, though the complainant did the electrical work at Nelamangala Project from January 2008 to August 2008, he has not provided the running bills. In contra thereto, in his cross- examination, his admission that, the complainant has commenced the work in the year 2007 at Nelamangala Project is quite evident to believe the case of PW.1 that, he has done the work for a period of one year from 2007 to 2008. It is correct as 8 CC No.5187/2010 rightly noticed by the defence counsel that, the stamp paper at Ex.P.9 was purchased by the accused on 1.8.2008 and it's execution is shown on 5.1.2007. That means, the execution of document is prior to the purchase of the stamp paper. Based on the same, DW.1 contends that, Ex.P.9 and Ex.P.10 are fabricated and materially altered by the complainant.
14. Close observation of the documents at Ex.P.9 and Ex.P.10 indicates no circumstance to believe the fabrication or material alteration as alleged. Because, looking at the document makes it clear that, the portion of the signatures of accused persons are upon the typed matter on these documents. It is a strong piece of evidence to strengthen my view that, the allegation of fabrication and creation of the documents is baseless. Above circumstances reflects the purchase of stamp paper at Exp.9 by the accused on 01.08.2008 subsequent to the commencement of the electrical work by PW.1 in the year 2007 at Nelamangala Project. This could be the reason for execution of the document Ex.P.9 by quoting the advance date belatedly as per their convenience and understandings. IN the light of the above discussion, I find no reason to believe the fabrication of the document and question of material alteration would not arise. Therefore, the principles laid down in the authorities relied on by the accused cannot be made applicable on this count.
15. As admitted by DW.1, accused persons have given the electrification work to the complainant in respect of 3-4 projects prior to the work in dispute. It is undisputed that, PW.1 used to start the work only after giving the work order by the accused persons. In the instant case, the accused persons denies the 9 CC No.5187/2010 giving of the work order as per Ex.P.10. It is not their case that, the complainant has commenced the work and continued it till August 2008 without the work order. These facts are sufficient to draw an inference that, the complainant has commenced the work at Nelamangala Project only after the accused persons have given the work order as per Ex.P.10.
16. As admitted by both parties, the KSFC has seized the Nelamangala Apartments before its final completion and consequently, PW.1 had to stop the further electrical work. In the evidence, it is not the defence of the accused that, they have cleared the amount to the complainant in as much as the work done by the complainant. In the cross-examination, PW.1 admits the initial receipt of Rs.4,94,335/- cash from the accused. Whereas, the learned defence counsel has suggested PW.1 as if he had received Rs.48,00,000/- from the accused towards work done by him at Nelamangala and Maddur Projects from time to time as and when required. But so far, no evidence is forthcoming in this regard. Therefore, the suggestion as such is not worthy to believe. DW.1 has taken up a defence that, the complainant has not furnished the running bills and there is no existing legal liability to discharge under the cheques in question. On this count, reliance is placed on the following authorities by the accused.
• 2013 (3) DCR 783 (Karnataka High Court) -
Mr.N.Srihari Vs Mr.Babu Shetty.
"Held - the failure of the complainant to prove the legal obligation of the accused to discharge the debt due to him, disentitles the complainant from 10 CC No.5187/2010 getting the benefit of the presumption under Sec.139 of the N.I.Act."
• 2014 (2) DCR 608 - Rameshchandra Naik Vs M/s.Shivam Finance.
"Held - Mere bald statement in the complaint is not sufficient to entertain the prosecution under Sec.138 of the N.I.Act."
• 2013 (1) DCR 270 - Kapadvanj People's Co-
operative Bank Ltd. Vs Jayanthibhai Talasaji Marawadi and another.
"Held - Acquittal of the accused is just and proper on complete failure of the complainant to prove the issuance of the cheque and liability thereunder."
Also referred:
• 2013 (1) DCR 625 - Vijay Vs Laxman and another.
• 2013 (2) DCR 34 - Vinod Kumar Singh Vs Lal Saheb Singh and another.
Here, if really the contention of DW.1 with regard to failure of the complainant to provide the running bills and prove the liability of the accused persons is true, the circumstances under which the previous alleged payments made by them to the complainant without furnishing such bills is not explained. This ambiguity is quite evident to disbelieve the defence as such. Thus, no need to say that, the principles laid down in the authorities relied on by the accused has no application.
17. In the examination-in-chief, DW.1 asserts as if the complainant is a co-borrower of the loan of Rs.2.5 Crore 11 CC No.5187/2010 borrowed by the accused persons from the Bharath Co-operative Bank. DW.1 contends that, when the accused persons have demanded the complainant to pay his part of loan liability, he has misused the cheques Ex.P.1 and Ex.P.2, another blank cheque and filed the case on hand as well as C.C.No.5226/2010. In the cross-examination, DW.1 has contradicted the same stating that, PW.1 was not the joint borrower of the loan but he stood as a surety therefor only. It is the case of PW.1 that, after he had received the default notice from the bank in the capacity of a surety, he has sent the personal letter Ex.D.2 to the accused persons asking them to clear the loan amount to the bank. It is quite natural too. In response thereto, the accused have sent a reply Ex.D.3 stating as if, PW.1 had borrowed 30% of the total loan of Rs.2.5 Crore and to clear it to the bank. In fact, as admitted by DW.1, the complainant was only a surety and not taken the amount as alleged at Ex.D.3. Therefore, the contents of replies at Ex.D.3 and Ex.p.13 are obviously baseless. The divergent defence of the accused persons not only indicates their misleading conduct, but also reflects their efforts made with the help of the story over story to suppress the truth of issuing the cheques in discharge of the existing liability as rightly pointed out by the complainant.
18. Inspite of the above circumstances, the defence counsel has argued that, the failure of the complainant to prove the existence of liability entitles the accused for the benefit of doubt. Reliance is placed on the following authorities 2013 (1) DCR 417 in the case of Kulvinder Singh Vs Kafeel Ahmed.
"Held - The guilt of the accused under criminal law must be proved beyond all reasonable doubt and even a slightest 12 CC No.5187/2010 doubt about commission of an offence entitles the accused to get benefit of acquittal."
Referred 2014 (1) DCR 9 SC. 2014(3) DCR 488.
19. Having evaluated the material and evidence on record, I hold that, there is nothing to support the defence stand nor any probability be seen therein to suspect the case of the complainant. The accused persons failed to prove their stand that, Ex.P.1, Ex.P.2 and another signed blank cheque with signed blank stamp paper and letterhead were given to the complainant for security purpose. Even there appears no necessity for the accused to give as such. Of course, there may have been minor discrepancies in the cross-examination version of PW.1 as enlightened by the defence counsel in his written arguments. But they are nothing to do with the truth forthcoming from the evidence on record. The complainant has contended that, the burden of proving that, the cheques had not been issued for any debt or liability is on the accused and relied on 2001 AIR SCW 4344 in the case of KN Beena Vs Muniyappa and another. In the light of the foregoing discussion, I am forced to say that, accused persons failed to prove their defence and the presumption under Sec.139 of the Negotiable Instruments Act available to the complainant is remained unshakened. Thus, undoubtedly the complainant being the holder of the cheques in question and having complied with the statutory requirements under Secs.138(a) to (c) has established the offence against the accused beyond the doubt. With this conclusion, point No.1 is answered in the negative and point No.2 in the affirmative.
13 CC No.5187/201020. Point No.3: Having taken into consideration the nature of the transaction, its age, background of the parties, the facts and circumstances of the case in the light of my findings on Point Nos.1 & 2, I pass the following;
ORDER
Acting under Sec.255(2) of Cr.PC, A2
Narasimhaswamy and A3 R.T.Kumar being the partners of A1 KNS Constructions are convicted for the offence punishable under Sec.138 of the Negotiable Instruments Act and sentenced them to pay a fine of Rs.17,00,000/-.
In default to pay the fine amount, A2 and A3 shall undergo simple imprisonment for a period of four months each.
It is further ordered that, out of the fine amount, a sum of Rs.16,80,000/- shall be paid to the complainant as compensation under Sec.357 of Cr.PC.
The bail bonds of A2 and A3 shall stands cancelled forthwith.
Supply a free copy of this judgment to A2 and A3.
(Dictated to the Stenographer on computer, transcript thereof is computerized and print out taken by her is verified, corrected and then pronounced by me in the open Court on this the 20th day of June 2015).
(K.M.Radhakrishna) XII Addl. Chief Metropolitan Magistrate, Bengaluru City.
14 CC No.5187/2010ANNEXURE List of witnesses examined on behalf of the complainant:
PW.1 Amaresh Honnagudi.
List of documents exhibited on behalf of the complainant:
Exs.P.1 & 2 Two Cheques. Exs.P1(a) & 2(a) Signatures of the accused. Exs.P.3 & 4 Bank Endorsements. Ex.P.5 Copy of the legal notice issued to the accused.
Ex.P.5(a) to 5(c) Three postal receipts.
Ex.P.5(d) Postal acknowledgement.
Ex.P.6 UCP receipt.
Exs.P.7 & 8 Legal notices kept inside the returned postal
cover.
Ex.P.7(a) & 8(a) Postal covers.
Ex.P.9 Agreement.
Ex.P.10 Work Card.
Ex.P.11 Project plan consisting of 14 pages.
Ex.P.12 Reply letter.
Ex.P.13 Reply notice.
Ex.P.14 Bank statement.
Ex.P.15 Approval Plan.
Ex.P.16 Complaint.
List of witnesses examined on behalf of the accused :
DW.1 Narasimha Swamy List of documents exhibited on behalf of the accused :
Ex.D.1 Agreement.
Ex.D.2 Letter addressed to KNS construction from
Amaresh Honnagudi.
Ex.D.2(a) Signature of PW.1.
Ex.D.3 Another letter dated 2.9.2009.
Ex.D.3(a) Signaturen of PW.1.
Ex.D.3(b) Postal Cover.
Ex.D.4 OD account statement from 1.5.2006 to
15 CC No.5187/2010
13.6.2013 in respect of KNS Constructions. Ex.D.5 The term loan account statement in respect of KNS Constructions from 1.4.2008 to 13.6.2013.
Ex.D.6 Personal loan account statement in respect of N.Narasimhaswamy from 1.9.2006 to 13.6.2013.
Ex.D.7 Housing loan Statement in respect of
N.Narasimhaswamy from 1.10.2007 to
13.6.2013.
XII Addl. Chief Metropolitan Magistrate, Bengaluru City.