Bangalore District Court
Santhosh A vs Nagarau Y on 5 April, 2024
KABC0C0157502019
IN THE COURT OF XXXIII ADDL. CHIEF
METROPOLITAN MAGISTRATE, MAYO HALL UNIT,
BENGALURU
-: PRESENT :-
P.S. Santhosh Kumar, M.Com., LL.M.,
XXXIII ADDL.CHIEF METROPOLITAN MAGISTRATE,
BENGALURU.
DATED THIS THE 5TH DAY OF APRIL, 2024.
C.C.NO.54214/2019
COMPLAINANT : Sri. Santhosh
S/o Ananthappa
Aged about 35 years,
No.13, 22nd Cross, J.C.
Nagar, Shiva Temple,
Bangalore-86.
Vs.
ACCUSED 1 Sri. Nagaraju Y.
S/o Yallappa
Aged about 41 years
2. Smt. Nagaveni N.
W/o Nagaraju Y
Aged about 34 years
Both are residing at
88/F 1st Main Kaveri
Badavane Lakshmi Nagar,
Bangalore North,
Basaveshwaranagar,
Bangalore-560079.
2
C.C.No.54214//2019
J U D G M E N T
The complainant has filed this private complaint U/s.200 of Cr.P.C., against the accused for the offence punishable U/s 138 of Negotiable Instrument Act.
2. The factual matrix of the case are as follows:-
The accused is known to the complainant since several years and out of the said friendship the accused had borrowed a sum of Rs.5,00,000/- from the complainant to meet his urgent financial commitments. The accused had assured that they would return the said loan within 6 months. The complainant approached the accused after 6 months demanding repayment of the said loan but, the accused did not show any interest to make repayment and after several requests and demands, the accused had issued cheque bearing No.075576 drawn on State Bank of India, Basaveshwara Nagar branch, Bangalore, dated 15.02.2019 for a sum of Rs.5,00,000/-. On its presentation with his banker ICICI Bank Limited, RPC Branch, Bangalore, it came to be dishonored for the 3 C.C.No.54214//2019 reason "funds insufficient" on 18.02.2019. Thereafter, the complainant got issued legal notice to the accused on 05.03.2019 calling upon them to pay the cheque amount, but, the accused did not claim the said notice. The accused had issued cheque with an intention to defraud a complainant. Hence, the accused has committed the offence punishable U/s.138 of Negotiable Instruments Act.
3. Based on the complaint, the sworn statement affidavit, the documents etc., the court took cognizance of an offence punishable under Sec.138 of the Negotiable Instruments Act by following the guidelines of Apex Court issued in Indian Bank Association case and ordered to register a criminal case against the accused for the offence punishable U/s.138 of Negotiable Instruments Act.
4. In pursuance of summons, the accused appeared through their counsel, they were enlarged on court bail, further, substance of plea was recorded, the 4 C.C.No.54214//2019 accused pleaded not guilty and they claimed to be tried. The complainant in order to prove his case, got examined himself as P.W.1 and one witness as PW2 and got marked Ex.P1 to P8. Upon closure of complainant's side evidence, the court examined the accused U/s 313 of Cr.P.C, the accused denied the incriminating materials appearing against them and the accused No.2 got herself examined as DW1 and one witness as DW2 and got marked Ex.D1 to 3 and closed their side evidence.
5. Heard both the sides. I have gone through the written arguments filed by the complainant as well as the accused. I have also gone through the following decisions relied upon by the accused in support of his case. Perused the materials on record.
1. Crl.Appeal No.1978/2013, dated 18.01.2023, between Bajaram s/o Sriramulu Naidu vs. Maruthichalam of Hon'ble Supreme Court
2. Crl. Appeal No.636/2019, dated 09.04.2019, between Basalingappa vs. Mudibasappa of Hon'ble Supreme Court
3. Crl.L.P.No.353/2017, dated 09.04.2019 between Subhash vs. State of Kerala of Hon'ble High Court of Kerala 5 C.C.No.54214//2019
4. Crl.Appeal No.232/2014, dated 16.01.2018, between Sri Sudharshan Industries vs. Sri Durga Trading Company of Hon'ble High Court of Bambay
5. Criminal Rev.Ptn.No.679/2015, dated 06.10.2015 between Devendra Kumar vs. Khem Chand of Hon'ble Delhi High Court
6. Crl.Appeal No.2317/2009, dated 07.02.2012, between Amith Chandbhan Sigla vs. Rehaman Mohammad Ishahak Shaik of Hon'ble High Court of Bambay
7. Crl. Leave to Appeal No.1/2017, dated 29.05.2017, between of Hon'ble High Court of Rajasthan
8. Cr.R.P.No.1517/2010 dated 30.11.2011 between Veerayya vs. G.K.Madivalar of Hon'ble High Court of Karnataka.
6. The following points would arise for my consideration:-
1. Whether the complainant proves beyond all reasonable doubts that the accused has committed an o/p/u/s 138 of the Negotiable Instruments Act?
2. What Order?
7. My findings on the above points are as follows;
Point No1: In the Affirmative, Point No.2: As per final order, for the following, 6 C.C.No.54214//2019 R E A S O N S
8. POINT No.1: I have gone through the materials available on record. The complainant who has been examined as PW1 has reiterated the facts stated in his complaint in his chief examination also and in addition to it, his mother is examined before this court as PW2 and got marked Ex.P1 to 8.
9. The learned counsel for the accused has argued that the accused had availed loan of Rs.5,00,000/- from him agreeing to repay it within 6 months and they have failed to repay it as agreed and inspite of several demands, the accused have issued the cheque in question in favour of complainant towards repayment of the said debt, but it came to be dishonored for the reason "Funds Insufficient" and inspite of intimating the said fact of dishonour by issuing legal notice as per Ex.P4, the accused did not pay the cheque amount and hence, they are liable to be convicted for the alleged offence punishable U/Sec.138 of N.I. Act. On the other hand, the counsel 7 C.C.No.54214//2019 for the accused has argued that the complainant has misused the cheque given towards security and that the mother of the accused had assured accused No.2 to get her a job in Anganavadi School and demanded Rs.2,00,000/- from her and the Accused No.2 had paid Rs.50,000/- to her in cash in the month of May 2015 and for the remaining amount of Rs.1,50,000/-, she insisted her and her husband to subscribe to a chit fund scheme that was being run by her and in the month of December 2015 the mother of the complainant collected the bid amount of Rs.1,80,000/- of the chits so subscribed by them instead of paying it to the accused and inspite of the consistent demand by the accused for return of the security cheque and money, she did not return it and instead by misusing the said cheque has filed this false complaint and accordingly prayed for their acquittal.
10. Ex.P1 is the Original cheque which is said to have been issued by the accused No.1 in favour of the complainant in respect of the above said loan said to 8 C.C.No.54214//2019 have been availed by the accused and it is dated 15.02.2019 for Rs.5,00,000/-. Ex.P2 and 3 are the bank endorsements dated 18.02.2019 which go to show that the said cheque came to be dishonored for the reason "Funds Insufficient". Ex.P4 is the copy of statutory notice dated 05.03.2019 said to have been issued by the complainant to the accused intimating the fact of dishonour of cheque and demanding payment of cheque at Ex.P1. Ex.P5 are the postal receipts for having sent legal notice as per Ex.P4 to the accused and Ex.P6 and 7 are the returned postal covers.
11. It is relevant to mention here that the accused have not disputed the issuance of Ex.P1 in favour of complainant and their signature on it. Further they have categorically admitted the said fact during the cross examination of DW1. Such being the case, once the accused accept and admit their signatures on the cheque in question, the initial presumption as contemplated U/S 139 of the N.I Act has to be raised 9 C.C.No.54214//2019 by the court in favour of the complainant, however, the accused are entitled to rebut the said presumption as held in the case of Sri Rangappa Vs. Sri Mohan by the Hon'ble Supreme Court reported in AIR 2010 SC 1898.
12. Once the presumption U/S 139 and 118 of the N.I Act is raised, it is for the accused to rebut the said presumption by adducing cogent evidence in support of their defence. Upon going through cross examination of PW1 and other materials available on record, it is relevant to mention here that the accused No.1 and 2 are not disputing the financial capacity of the complainant as no single direct suggestion is made to that effect either in the cross- examination of PW1 or in the cross-examination of PW2. However, the leaned counsel for the accused has argued during the course of his arguments that the complainant had no financial capacity to lend so much of amount to the accused at any point of time and he has also not produced any ITR showing any 10 C.C.No.54214//2019 entry in relation to lending the amount of Rs.5,00,000/- before this court. Merely because, he has not produced any income tax returns or not shown the alleged entry of the loan lent to the accused in his ITR is not a ground to believe that he has not lent any amount to the accused as he has categorically stated that he had lent the said amount in the month of August 2018 thrice and moreover, it is not a forum where the accused can question the said fact. Further when the PW1 has himself stated during his cross-examination that he had monthly income of Rs.60,000/- as he is working as a Project Administrator in Arcadis Consulting India Private Limited, it cannot be believed that the complainant had no financial capacity to lend such amount and further Ex.P8 supports the version of PW1 that he has salary income of more than Rs.60,000/- p.m. and in the circumstances, non-production of ITRs by the complainant is not fatal to his case. In the circumstances, it is worth to make note of a decision of the Hon'ble Bombay High Court in Criminal Appeal 11 C.C.No.54214//2019 No.268/2009, dated 03.03.2010 between Gaurav Omprakash Jaju vs. Srishakti Fabrics wherein it is held that "non-filing of tax return or evidence of it's non payment cannot help the case of the accused while we consider such defence in the light of Evidence led at the trial. One cannot jump to the conclusion that complainant cannot recover amount of hand loan; merely for the reason that the complainant did not file income tax return. Absence of or non- production of such evidence was not sufficient to rebut statutory presumption that the cheque was issued for consideration by the accused."
13. Further it is relevant to mention here that it is the specific defence of the accused that the mother of the complainant was running a chit business and they had subscribed to 2 chits of Rs.1,00,000/- each and that his mother had demanded Rs.2,00,000/- saying that she would get the accused No.2 a job in a Anganavadi School and as such, she had given Rs.50,000/- cash to her and his mother had taken the 12 C.C.No.54214//2019 bid amount of Rs.1,80,000/- pertaining to their chits and the complainant has misused the security cheque given to her by the accused and filed this false complaint. It is relevant to mention here that during the cross examination of PW1 the counsel for the accused has put a suggestion that the cheque at Ex.P1 was given as security towards the chit subscribed with his mother and the said suggestion was categorically denied by the PW1. Further PW1 has categorically stated that his mother is a home maker and she is not running any chit fund. Similarly PW2 who is said to be the mother of the complainant has also deposed supporting the complainant and during her cross- examination also nothing contrary to the case of the complainant is elicited. But, the counsel for the accused who has put the above said suggestion to the PW1 has put another suggestion contrary to it during the cross examination of PW2 that the complainant was running the chit fund and used to collect monthly premium from the accused. However, the said suggestion was categorically denied by the PW2.
13C.C.No.54214//2019 Further PW2 has categorically stated during her cross examination that she never promised the accused No.2 to get her any Anganavadi teacher job and further she has categorically denied that she had obtained the cheque in question from the accused with the promise to get her the said job. She has further denied that she has received any chit amount from the accused stating that she would get her the said job. It is further relevant to mention here that the DW1 has produced a book said to be containing details of payments of chit premiums that was being paid by the accused to the complainant. But PW1 has categorically denied the signatures appearing on the said Ex.D3 as they do not belong to him and except the said document there is nothing on record which would go to show that the accused had subscribed to any chit with the mother of the complainant and were paying any premium in that respect. But in view of the categorical denial of the PW1 regarding said entries of Ex.D3, in my opinion, in no way it would help the accused to establish that they had subscribed 14 C.C.No.54214//2019 to any chits with the mother of the accused or accordingly they have made payments of premiums to the complainant. Further as regards the another defence of the accused that the mother of the complainant had stated to the accused No.2 that she would get her Anganavadi teacher job and took Rs.50,000/- in cash, except the oral evidence of the accused No.2 there is nothing on record which would make this court to believe the said version. No doubt, DW2, who is said to be one of the subscribers of the chit that was said to be being conducted by the mother of the complainant, has deposed that she had subscribed to a chit for the prize amount of Rs.1,50,000/- and was paying Rs.5,000/- per month towards premium for 30 months. But, she also did not produce any documentary evidence to show that she had subscribed to any chit with the mother of the complainant. But, in her cross examination she has categorically stated that she does not know the other chit members except the accused and nowhere in her chief examination she has stated that she used to pay 15 C.C.No.54214//2019 premiums to the complainant as stated by the accused. If at all the accused were paying premiums to the complainant, DW2 would have also stated in her oral evidence that she also used to pay premiums to the complainant. But she has not stated so for the best reasons known to her and she did not also produce any chit book like Ex.D3 before this court. It is really astonishing that the DW2 knows only the accused though there were 30 other subscribers to the said chit. In view of the discrepancies observed in the oral evidence of DW1 and 2, I am of the opinion that the oral evidence of DW2 is not trustworthy to believe. In the above facts and circumstances of the case, it is crystal clear that the accused is trying to avoid making payment of the cheque amount though in receipt of the amount mentioned in the cheque in question. If at all the defence taken by the accused were true, what prevented them from issuing suitable reply to the legal notice sent by the complainant is not forthcoming from the materials on record. Considering the entire materials on record and in the 16 C.C.No.54214//2019 facts and circumstances of the case, it is crystal clear that the accused have failed to rebut the presumptions that are available in favour of the complainant either by raising a probable defence or by adducing cogent oral and documentary evidence in support of their defence and thereby to shift the onus of proof on the complainant. On the other hand, in my opinion, the complainant has successfully established his case beyond all reasonable doubts and as such, in my opinion the accused No.1 and 2 are liable to be convicted for the alleged offence punishable under Sec.138 of N.I Act and the complainant is to be suitably compensated. Further I am of the opinion that the ratio laid down in the above said decisions relied upon by the counsel for the accused are not applicable to the present facts and circumstances of the case.
14. It is relevant to mention here that the accused having issued cheque at Ex.P1 towards a legally enforceable debt in favour of the complainant have 17 C.C.No.54214//2019 failed to pay the cheque amount and hence, the complainant is to be suitably compensated for the delay caused by the accused in its repayment. Further the punishment prescribed for the offence U/s.138 of Negotiable Instruments Act is imprisonment for a period which may extend to two years or with fine which may extend to twice the amount of the cheque or with both. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), I am of the opinion that it is just and desirable to impose fine of Rs.3,65,000/- each and out of the said amount, it seems to be proper to award a sum of Rs.7,25,000/- as compensation to the complainant as provided U/s.357(1) of Cr.P.C and the remaining sum of Rs.5,000/- shall go to the State towards expenses. With these observations, my findings on Point No.1 is in the Affirmative.
18C.C.No.54214//2019
15. Point No.2: In view of my above findings on Point No.1, I proceed to pass following;
O R D E R
Acting u/s. 255(2) of Cr.P.C., the
accused No.1 and 2 are hereby
convicted for the offence punishable u/s.138 of Negotiable Instrument Act,1881.
The accused No.1 and 2 are hereby sentenced to pay a fine of Rs.3,65,000/- each. In default, the accused No.1 and 2 shall undergo simple imprisonment for 6 months.
Out of the fine amount, Rs.5,000/-
shall be paid to the State towards expenses and remaining amount of Rs.7,25,000/- to the complainant as compensation as per the provisions of u/Sec.357(1) of Cr.P.C..
19
C.C.No.54214//2019
Further, it is made clear that in
view of proviso to Sec.421(1) of
Cr.P.C, the accused No.1 and 2 would not be absolved from their liability to pay compensation amount of Rs.7,25,000/- awarded u/s. 357 of Cr.P.C. even if they undergo the default sentence.
The bail bond and surety bond of the accused No.1 and 2 shall stand canceled after appeal period is over.
Office is directed to furnish free copy of this judgment to the accused forthwith.
(Dictated to the Stenographer transcribed and typed by her, corrected, signed and then pronounced by me in the open court, on this the 5th day of April 2024) SANTHOSH Digitally signed by SANTHOSH KUMAR P S KUMAR P S Date: 2024.04.18 10:40:44 +0530 (P.S. Santhosh Kumar), XXXIII ACMM, BENGALURU.
20C.C.No.54214//2019 A N N E X U R E
1. Witnesses examined on behalf of Complainant:
P.W.1 : Sri. Santhosh P.W.2 : Smt. N.C. Suvarna
2. Documents marked on behalf of complainant:
Ex.P.1 : Original cheque Ex.P.1(a) : Signature of the accused Ex.P.2 & 3 : Bank returned memos Ex.P.4 : Office copy of legal notice Ex.P.5 : Postal receipts Ex.P.6 & 7 : Returned postal covers Ex.P.6(a) & 7(a) : Returned postal covers opened in the
open court and notice therein marked Ex.P.8 : Salary Slips
3. Witnesses examined on behalf of Accused:
DW.1 : Smt. Nagaveni DW.2 : Smt. Sampathamma
4. Documents marked on behalf of Accused:
Ex.D1 : Notarized copy of Passbook
Ex.D2 : Notarized copy of Bhagyalakshmi
certificate
Ex.D3 : Chit Book
Digitally signed by
SANTHOSH SANTHOSH KUMAR P S
KUMAR P S Date: 2024.04.18
10:40:34 +0530
(P.S. Santhosh Kumar),
XXXIII ACMM, BENGALURU.