Bangalore District Court
M/S. Sri. Giri Traders vs S.R. Manjunath on 30 April, 2018
IN THE COURT OF THE XXVII ADDL., CHIEF
METROPOLITAN MAGISTRATE, BANGALORE.
Present: Sri.N.Muniraja. B.A., L.L.B.,
Dated: This the 30th Day of April 2018.
C.C.No.25045/2015
Complainant M/s. Sri. Giri Traders
Arecanot Merchants and
Commission Agents
A.P.M.C. Yard
Bheemsamudra
Chitradurga Taluk
Rep by its Partner and P.A
Holder
Mr.Giri M Janakal
S/o.G.S. Manjunath,
Aged about 32 years,
R/at Bheemsamudra Village
Hireguntanur Hobli
Chitradurga Taluk
(Reptd by Sri. R.A.,Adv)
Accused S.R. Manjunath
S/o Ramachandrappa
Aged about 45 years
Merchant
Door No.164, 4th Main
Fifth Cross, A.M.S. Layout
Vidyaranyapura
Bangalore
(Reptd by Sri.R.N.,Adv)
Offence U/s.138 of Negotiable
Instruments Act.
Plea of the accused Pleaded not guilty
Final Order Convicted
Judgement Date 30.04.2018
*****
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JUDGEMENT
The complainant filed this complaint u/s 200 of Cr.P.C. R/w sec.142 of the N.I. Act against the accused for the offence punishable U/s.138 of the Negotiable Instruments Act. At the first instance this complaint was filed before Chitradurga Court in CC No.773/2013. Subsequently on the point of jurisdiction transferred to this court.
2. Brief facts of the complainant case are as follows:
The complainant running business in the name of M/s Sri. Giri Traders, Partnership firm at A.P.M.C. Yard, Bheemasamudra village of Chitradurga Taluk. The partners of the complainant and accused are well known to each other since many years. In that connection on 29-04-2011 the accused had borrowed a sum of Rs.5,00,000/- from the complainant firm for business improvement and family necessities. For repayment of the said loan amount the accused issued post dated cheque 3 bearing No.151433 dt: 25-11-2011 for a sum of Rs.5,00,000/- drawn on State Bank of Mysore, Vidyaranyapura Branch, Bangalore. As per the instructions of the accused, the complainant presented the said cheque for encashment on 25-11- 2011 through State Bank of Mysore, Chitradurga Branch and the same was returned as per bank memo dt: 05-12-2011 as funds insufficient. The complainant contacted the accused about the dishonour of the cheque and he requested to present the cheque in the first week of January, 2012. As per the request of the accused, the complainant presented the cheque on 06-01-2012 at State Bank of Mysore, Chitradurga and on the same day the bank authority issued memo as funds insufficient. There after the complainant got issued notice on 21- 01-2012 through RPAD calling upon the accused to pay the cheque amount and the said notice served to the accused on 25-01-2011. But the accused has not 4 paid the cheque amount with in 15 days from the date of service of notice. Hence this complaint.
3. The accused appeared through his advocate and he enlarged on bail. Substance of accusation read over to the accused and he pleads as false.
4. On behalf of the complainant, to prove the guilt of the accused its partner and power of attorney holder examined as PW1 and got marked 11 documents as per Ex.P1 to 11 and closed its side evidence. On closure of the complainant side evidence, statement of the accused recorded as required u/s 313 of Cr.P.C. The accused denied the incriminating circumstances which appears against him in the complainant side evidence. The accused has led defence evidence as DW1 and got marked 3 documents as per Ex.D1 to 3 and closed his side evidence.
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5. Heard the learned counsel for the complainant. The learned counsel for the accused filed written arguments and perused the records.
6. The points that would arise for any consideration are as follows:
i) Whether the complainant proves that the accused issued Ex.P2 cheque towards discharge of legally enforceable debt or liability and the said cheque dishonoured due to insufficiency of funds in the account of the accused?
ii) Whether the complainant proves that after dishonour of the cheque served notice to the accused in compliance of sec.138(b) of the N.I. Act?
iii) What order?
7. My answer to the above points are as follows:
Point No.1 - Affirmative.
Point No.2 - Affirmative.
Point No.3 - As per final order for the following. 6
REASONS
8. Point No.1: It is the case of the complainant that the accused had borrowed a sum of Rs.5 lakhs on 29-04-2011 and towards repayment of the said amount the accused issued Ex.P2 cheque and the same was dishonoured for want of sufficient funds in the account of the accused. The complainant firm is represented by its partner and power of attorney holder by name Sri. Giri. M. Janakal i.e. PW1. PW1 in the affidavit filed in lieu of chief examination has reiterated the contents of the complaint averments. It is here itself noted that on behalf of the complainant produced Ex.P1 G.P.A, where in other partners of the complainant firm authorised the PW1 to represent the complainant firm. In the cross examination of PW1 or in the defence evidence the accused disputes the authority of PW1 to represent the complainant firm.
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9. As borne out from the cross examination of PW1 and defence evidence, the accused denied the transaction with the complainant and liability of payment of cheque amount. Further contended that uncle of PW1 by name Dr. G.S. Shivakumar got introduced to the accused through his colleague by name Ganesh Revankar. The said Dr. G.S. Shivakumar made investment with Civil Aviation Housing Co-operative Society to form layout near Kannamangala village of Devanahalli Taluk. The said G.S. Shivakumar asked the accused to find out his friends to purchase sites. When the accused got booked the sites for the members in the month of October 2007, he issued the cheque to the said Dr.G.S. Shivakumar for security purpose. In the year 2008 litigation was started between the said Dr. G.S. Shivakumar and Civil Aviation Housing Co-operative Society and in the year 2009 Arbitration proceedings were held among them. In the said Arbitration proceedings decided to give 12 acres of land to Dr. 8 G.S. Shivakumar and 15 acres of land to the society and further held that the said Shivakumar has to give sites to those who have booked, but he has not given sites to the members. Then the members have filed cases against the said Dr. G.S. Shivakumar. For that reason the said Dr. G.S. Shivakumar got filed this case against the accused. In other words the contention of the accused is that he had issued the cheque in question to Dr. G.S. Shivakumar for security purpose and not for the complainant.
10. The accused in the cross examination admits that the cheque in question pertaining to his account and his signature there on. In the cross examination of PW1 and behalf of the accused questioned about the non production of the documents pertaining to existence of Giri Traders firm i.e. complainant firm. But the accused in the course of cross examination admits about the existence of Sri. Giri Traders firm. PW1 in the cross examination stated that on 29-03- 9 2011 he paid Rs.5 lakhs to the accused and when he paid Rs.5 lakhs to the accused received cheque from him for security purpose and the accused mentioning the date as 25-11-2011 issued the cheque in the name of the complainant. In the very next sentence on behalf of the accused made suggestion that it is true that the accused issued the cheque on the said day. The said evidence of PW1 and suggestion made on behalf of the accused read together it falsifies the contention of the accused that he issued the cheque to Dr. G.S. Shivakumar in the month of October 2007. The accused has produced Ex.D1 passbook of State Bank of Mysore, Vidyaranyapura branch pertaining to the account of Ex.P2 cheque. The accused in the course of cross examination admits that in Ex.D1 passbook there is no reference about the previous members cheques of Ex.P2 cheque and the cheque is not in the name of G.S. Shivakumar. Neither in the cross examination of PW1 nor in the 10 defence evidence the accused whispered that he issued blank cheque to Dr. G.S. Shivakumar.
11. The accused produced the certified copies of compromise petition filed in the Arbitration proceedings and partition deed dt: 20-11-2009 taken place between Dr. G.S. Shivakumar representing M/s Bheemasamudra Land Developers and Builders and the Civil Aviation and Meteorological Department Employees Co-operative House Building Society Ltd. On behalf of the complainant not disputes the litigation arose between Dr. G.S. Shivakumar and the Civil Aviation Housing Co-operative Society. As stated by the accused himself in his defence evidence that in the year 2008 and 2009 the litigation was arose between Dr. G.S. Shivakumar and the Civil Aviation Housing Co-operative Society. If the accused issued the cheque in question to Dr. G.S. Shivakumar in the month of October 2007 after litigation started between Dr. G.S Shivakumar and Civil Aviation 11 Housing Co-operative Society the accused could have issued stop payment instructions to the bank with an apprehension of possibilities of misuse of cheque by Dr. G.S. Shivakumar. The accused in the cross examination stated that even after starting of disputes as per Ex.D2 and 3 he has not issued stop payment instructions to the bank. The accused in his defence evidence stated that after receipt of notice from the complainant in the month of January 2012 he approached the complainant and questioned about filing of the case, then the complainant stated that he will withdraw this case if the cases filed by the members are withdrawn and in the interest of members has not withdrawn the cases. The accused in the cross examination admits that the members introduced by him to Dr. G.S. Shivakumar namely D.K. Rajashree, Muniswamappa, Dr. Girish, Venkateshwaralu, Chandrashekhar and Balaji instituted suit No. 381/2015 against Shivakumar and Bheemasamudra Land Developers and Builders 12 and the said suit is pending. The accused during the course of cross examination admits the certified copies of order sheet and plaint in O.S. No.381/2015 as per Ex.P10 and 11. He further admits that except Ex.P10 and 11there are no other documents to show that cases filed against Shivakumar and Bheemasamudra Land Developers and Builders prior to 2015. The accused in the course of cross of examination admits that prior of filing of this complaint the members of the society were not filed cases against G.S. Shivakumar. From the above said evidence of the accused it is crystal clear that no cases were filed by the members of Civil Aviation Housing Co-operative Society prior to 2015. It is pertinent to note that at the first instance this complaint filed in the year 2012 before Chitradurga court. The members of Civil Aviation Housing Co-operative Society filed cases against Dr. G.S. Shivakumar in the year 2015. So as on the date of filing of this complaint there were no cases filed 13 against Dr. G.S. Shivakumar by the members of Civil Aviation Housing Co-operative Society. Therefore the question of withdrawal of the cases filed by the members of Civil Aviation Housing Co-operative Society does not arise. Therefore the evidence of the accused that when he approached the complainant after receipt of notice in the month of January 2012, the complainant insisted the accused for withdrawal of the cases filed by the members of the Civil Aviation Housing Co-operative Society for withdrawal of this case can not be accepted. Moreover by the time the accused alleged to approach the complainant this case was not filed.
12. Admittedly the accused received the notice issued by the complainant after dishonour of the cheque. If really the accused not borrowed the amount of Rs.5 lakhs from the complainant and had issued the cheque in question to Dr. G.S. Shivakumar as contended in the cross examination of PW1 and 14 defence evidence, the accused could have replied to the notice issued by the complainant by narrating his defence version. But the accused has not issued the reply notice for the reasons best known to him. It is seen from the cross examination of the accused that he is B.Com graduate and working as Development Officer in the National Insurance Company for the last 30 years. So the accused is not a prudent man and worldly knowledgeable person and he knows the consequences of issuance of cheque. If really the accused had issued the cheque to Dr. G.S. Shivakumar, after started disputes between the Civil Aviation Housing Co-operative Society and Dr. G.S. Shivakumar the accused could have issued stop payments instructions to the bank. Further if the accused not availed Rs.5 lakhs from the complainant and he had issued the cheque in question to Dr. G.S. Shivakumar, he could have issued reply notice to the notice issued by the complainant after dishonour of the cheque. But the accused has not issued stop 15 payment instructions to the bank and has not issued reply notice to the notice issued by the complainant after dishonour of the cheque. After receipt of the notice from the complainant the accused could have lodged complaint against the police as he has not issued the cheque in question to the complainant. But the accused has not done so. The above said inactions on the part of the accused leads to draw an adverse inference against the accused.
13. During the course of the cross examination of PW1 on behalf of the accused elicited about the payment of Income Tax for the year 2011 to the complainant firm and showing of Rs.5 lakhs paid to the accused in the income tax returns and no impediment to produce the said income tax returns. During the course of cross examination of the accused on behalf of the complainant got marked Ex.P9 Audit report and Income Tax balance sheet by way of confrontation. The accused in the cross 16 examination categorically admits about mentioning in Ex.P9 payment to be made by him to the complainant. So it is clear that the Audit and Income Tax records of the complainant firm reflects the amount of Rs.5 lakhs paid to the accused. The accused in the cross examination admits that the cheque is in the name of Sri. Giri Traders i.e. complainant. He further admits that there were no financial transactions between him and G.S. Shivakumar.
14. The accused in the written arguments contended that the complainant is a firm and any transaction of more than Rs.20,000/- should be made through cheque, DD or other instrument and therefore payment of Rs.5 lakhs to the accused by way of cash is doubt full. It is pertinent to note that as noticed above in the audit report and Income Tax documents of the complainant firm reflects the amount of Rs. 5 lakhs paid to the accused. If any violation on the part 17 of the complaint regarding payment of more than Rs.20,000/- by way of cash, the concerned authority is there to look into the matter. On that ground alone the case of the complainant cannot be doubted.
15. The accused in the written arguments contended that PW1 in the course of cross examination admits that Ex.P2 cheque taken towards security and therefore sec.138 of N.I. Act does not attracts. No doubt PW1 in the cross examination stated that on 29-03-2011 he paid Rs.5 lakhs to the accused and at that time he received the cheque from the accused for security purpose. It is pertinent to that there are catena of decisions of the various Hon'ble High Courts that the cheque issued for security also attracts sec.138 of N.I. Act. The Hon'ble Supreme Court of India, in the recent decision reported in (2016) 10 SCC 458 (Sampelly Sathyanarayana Rao Vs. Indian Renewable energy development agency Ltd.) held that, the cheques issued as security towards discharge of loan and dishonour of such cheques 18 would fall under Sec.138 of N.I Act. As observed above the accused admits that the cheque in question and signature there on belongs to him. The accused fails to substantiate his defence version that he issued the cheque to Dr. G.S. Shivakumar. The Hon'ble Supreme Court of India in the case of Rangappa V/s Mohan held that existence of legally enforceable debt or liability is also a matter of presumption u/s 139 of N.I. Act and burden is on the accused to rebut the said presumption. Though the accused cross examined the PW1 at Length and led defence evidence fails to probabalize his defence version. The accused has relied upon the following decisions:
i) 2015 (1) KCCR 235 (Lale Patel V/s
Sharanabasappa)
ii) ILR 2008 Kar 3635 (K Narayana Nayak
V/s Sri. M Shivaramashetty)
iii) (2015) SCC 99 (K Subramani V/s K
Damodara Naidu)
I have gone through the above cited decisions. As the facts and circumstances of the cited cases are 19 footing different to the facts of this case, the said decisions will not come to the aid of the accused. As per Ex.P5 Bank endorsement the cheque in question dishonoured for the reason funds insufficient in the account of the accused. It is not the defence of the accused that at the time of presentation of Ex.P2 cheque to the bank for encashment there were sufficient funds in the account of the accused. Under sec. 146 of the N.I. Act there is a presumption with respect to the bank endorsement. The complainant by adducing oral as well as documentary evidence proved that the accused issued the cheque towards discharge of legally enforceable debt and the said cheque dishonoured due to insufficiency of funds in the account of the accused. In view of my above discussion I answer point No.1 in the affirmative.
16. Point No.2: It is the case of the complainant that after dishonour of the cheque issued notice to the accused on 21-01-2012 through RPAD calling upon 20 the accused to pay the cheque amount within 15 days and the said notice served to the accused on 25-01-2012 but the accused has not paid the cheque of amount. The complainant to prove the factum issuance of notice and service of the same to the accused after dishonour of the cheque produced Ex.P6 office copy of notice dt:21-01-2012, Ex.P7 postal receipt and Ex.P8 Postal acknowledgment. There is no dispute about the issuance of notice and service of notice to the accused after dishonour of the cheque in question.
17. The accused in the written arguments contended that the complainant issued notice on 21-01-2012 and the accused received the said notice on 23-01- 2012 and the complainant presented the complaint on 09-03-2012 and there is 2 days delay in filing the complaint and without seeking condonation of delay the accused is entitle for acquittal. Per contra the learned counsel for the complainant has argued that 21 after dishonour of the cheque the complainant got issued notice to the accused on 21-01-2012 and the accused received the said notice on 24-01-2012 and the complainant filed this complaint on 09-03-2012 and the complaint filed on 45th day from the date of service of notice and therefore the complaint is in time.
18. When the case was set down for arguments on merits of the case, on 09-03-2012 the accused filed application u/s 258 of Cr.P.C to stop the proceedings against him as there is delay in filing the complaint. The complainant filed objections to the said application. This court as per the order sheet dt:12-03-2018 with the consent of both side as the case already set down for arguments on merits of the case ordered to consider the said application filed u/s 258 of Cr.P.C by the accused along with main complaint.
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19. It is not in dispute that after dishonour of Ex.P2 cheque the complainant issued Ex.P6 notice to the accused on 21-01-2012. No doubt it is true that the complainant in the complaint asserted and made suggestion in the cross examination of the accused that Ex.P6 notice served to the accused on 25-01-2012. The accused in the course of cross examination tried to contend that notice served to him on 23-01-2012. As noticed above it is not in dispute that on 21-01-2012 notice was issued to the accused. As could be seen from Ex.P7 postal receipt that on 21-01-2012 notice dispatched from the Chitradurga Post office. The accused produced the postal cover in support of his contention that he received notice on 23-01-2012. But the accused has not got marked the said postal cover in the evidence. Even on perusal of the date seal found on postal cover produced by the accused and Ex.P8 postal acknowledgment, it is clear that Vidyaranyapura Post office, Bangalore received the Postal article on 23 23-01-2012. It is seen from the date seal found on Ex.P8 Postal acknowledgment that Vidyaranyapura post office delivered notice to the accused on 24-01-2012. In the course of cross examination of PW1 on behalf of the accused by way of suggestion admits the service of notice to the accused on 24-01-2012 and receipt of postal acknowledgement by the counsel for the complainant on 25-01-2012. From the date seal found on Ex.P8 Postal acknowledgement it is clear that notice served to the accused on 24-01-2012.
20. It is pertinent to note that when the case was set down for accused side arguments, the accused filed application u/s 311 of Cr.P.C. seeking permission to examine the senior post officer Vidyaranyapura post office. This court after hearing both side as per the order dt:07-04-2018 dismissed the said application and this court made an observation that notice to the accused served on 24-01-2012. The accused have not 24 challenged the said order dt:07-04-2018. From the admission made on behalf of the accused in course of cross examination of PW1 in the form of suggestion coupled with date seal found on Ex.P8 postal acknowledgement it is clear that notice issued to the accused served on 24-01-2012. It is well settled principle of law that complaint should be filed within 45 days from the date of service of notice to the accused. Here is a case as discussed above the notice issued by the complainant after dishonour of the cheque served to the accused on 24-01-2012. From 24-01-2012 calculated 45 days comes to on 09-03-2012. Here is a case complaint filed on 09-03-2012 exactly on the 45th day from the date of service of notice to the accused. So the complaint is filed in time. Therefore the arguments of the accused that there is 2 days delay in filing this complaint can not be accepted.
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21. It may be mentioned that the accused filed application u/s 258 of Cr.P.C. to stop the proceedings on the ground of delay in filing the complaint. In view of my above discussion the complaint is filed with in prescribed time. Therefore this court is of opinion that further detailed discussion on the said application is not required and the application filed by the accused u/s 258 of Cr.P.C. to stop the proceedings is deserves to be dismissed. The materials placed by the complainant clearly establishes that after dishonour of the cheque in question the complainant served notice to the accused and thereby complied the mandatory requirement of sec. 138(b) of the N.I. Act. Hence I answer point No.2 in the affirmative.
22. Point No.3 :- In view of my findings on Point No.1 & 2 though the complainant proved that the accused issued Ex.P2 cheque towards discharge of liability and the said cheque dishonoured for want of sufficient funds in the account of the accused and in 26 spite of service of notice to the accused after dishonour of the cheque the accused fail to pay the cheque amount to the complainant. Therefore the accused is liable for punishment u/s 138 of N.I. Act. In cheque bounce cases apart from punishment to the accused, compensation can also be awarded to the complainant with respect to dishonoured cheque. Here is a case the accused borrowed sum of Rs.5 lakhs from the complainant on 29-04-2011. The cheque issued towards repayment of the said amount is dt: 25-11-2011. If the cheque honoured when it was presented to the bank for encashment the complainant firm would have utilized the said amount for its business purpose and would have got substantial profit. The act of the accused caused loss to the complainant and dragged the complainant to the court. The complainant spent more than 6 years for redressal. If the complainant made fixed deposit of Rs.5 lakhs in any Nationalized or Scheduled Bank in 6 years definitely it would have got substantial 27 interest. It is under these circumstances the complainant has to be suitably compensated in the matter. In the result, I proceed to pass the following.....
ORDER The complaint filed by the complainant firm is allowed.
Consequently, acting U/s.255(2) of Cr.P.C, the accused is Convicted for the offence punishable U/s.138 of the N.I. Act and sentenced him to pay fine of Rs.6,00,000/-. In default of payment of the said fine amount the accused shall undergo Simple Imprisonment for a period of 6 months.
Out of the above said fine amount ordered to pay Rs.5,90,000/- to the complainant as compensation and the remaining amount of Rs.10,000/- shall go to the state.
(Dictated to the typist directly on the computer and after corrected by me pronounced in open court by me on this 30th day of April, 2018) (N.Muniraja) XXVII A.C.M.M., Bangalore.
28ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : Giri M. Janakal Documents marked on behalf of the complainant:
Ex.P.1 : G.P.A.
Ex.P.2 : Cheque
Ex.P.2(a) : Signature of the accused.
Ex.P.3 to 5 : Bank endorsements.
Ex.P.6 : Office copy of notice.
Ex.P.7 : Postal receipt
Ex.P.8 : Postal acknowledgement
Ex.P.9 : Audit Report and Income Tax
Balance Sheet
Ex.P.10 & 11 : Certified copies of order sheet and plaint in O.S. No.381/2015 Witnesses examined on behalf of the accused:
DW1 : S.R. Manjunatha Documents marked on behalf of the accused:
Ex.D.1 : Pass Book.
Ex.D.2 : Cc of Compromise petition filed
in Arbitration case
Ex.D.3 : Partition Deed dt:20-11-2009
XXVII A.C.M.M Bangalore.
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Dt:30.4.2018
Complnt:Sri.RA Adv.,
Accused: Sri.RN Adv.,
For Judgement.
(Order typed vide separate sheet)
ORDER
The complaint filed by the
complainant firm is allowed.
Consequently, acting U/s.255(2)
of Cr.P.C, the accused is Convicted for the offence punishable U/s.138 of the N.I. Act and sentenced him to pay fine of Rs.6,00,000/-. In default of payment of the said fine amount the accused shall undergo Simple Imprisonment for a period of 6 months.
30Out of the above said fine amount ordered to pay Rs.5,90,000/- to the complainant as compensation and the remaining amount of Rs.10,000/- shall go to the state.
(N.Muniraja) XXVII A.C.M.M., Bangalore