Bangalore District Court
Kuruhina Setty Souharda Credit ... vs Dr.Jayanna on 31 October, 2022
1
KABC030383922019
Presented on : 30-05-2019
Registered on : 30-05-2019
Decided on : 31-10-2022
Duration : 3 years, 5 months, 1 days
IN THE COURT OF THE XL ADDL.CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
Present : Sri. P. Shivaraj,
B.Com. LL.B.
XXXVIII A.C.M.M Bengaluru
C/c.XL A.C.M.M., Bengaluru
Dated this the 31st day of October2022
C.C.NO:11850/2019
COMPLAINANT: Kuruhina Setty Souharda Credit Cooperative
Society Limited
No.13, 1st A Main Road, Maruthinagar
Bengaluru560 068
Reptd. By its Recovery Officer
Smt.Nanda Kumari
(Sri.V.B.Ravi Shankar, Advocate)
`
// VS //
[
ACCUSED: Dr.Jayanna
S/o.Channaveeraya
r/a.No.365, 2nd Cross Road,
3rd Main Road, III Stage, 3rd Block
Basaveshwaranagar,
Bengaluru560 079.
[Sri.Smt.Sindhu.V, Advocate]
Offence : U/s/ 138 of N.I Act of 1881
2 C.C.No.11850/2019
Plea of accused : Pleaded not guilty
Final Order : Accused is acquitted
Date of judgment : 31/10/2022
Sd/-
(P. SHIVARAJ)
C/c.XL A.C.M.M.,
Bengaluru.
: J U D G E M E N T :
The complainant is a registered Souharda Credit
Cooperative society and its authorized person
Smt.Nanda Kumari has filed the private complaint U/s
200 of Cr.P.C. against the accused alleging that accused
has committed the offence punishable under section 138
of Negotiable Instrument Act, 1881.(For short
N.I.Act,1881).
02. Complainant case is as follows:
The complainant society is enaged in financial
business. One Subramani S/o.late Ramachandra Reddy
had availed property loan of Rs.90,00,000/ under loan
account bearing No.IPL69 by mortgaging his property.
Accused and his wife Dr.Rashmi are the gurantors for the
loan borrowed by Subramani and they have executed the
gurantee agreement in favour of Complainant Souharda
Credit Cooperative Society Limited on 12/5/2017.
Principle borrower Subramani and accused have failed to
pay the loan amount. In order to pay the loan amount
accused has issued cheque bearing No.551076 dated
3 C.C.No.11850/2019
21/12/2019 for Rs.41,98,942/ in favour of the
complainant society which is drawn on Tumkur Grain
Merchants Cooperative Bank Ltd. Bengaluru branch.
3. As per the instructions of the accused,
complainant society presented the aforesaid cheque for
encashment through its banker. The aforesaid cheque
was returned dishonoured with an endorsement "Funds
Insufficient", to that effect, complainant society received
the cheque return memo from its banker on 2/3/2019.
Complainant society informed the aforesaid fact to the
accused and issued legal notice by way of RPAD to the
accused on 06/03/2019 and the same served to the
accused on 09/03/2019. Accused has failed to pay the
cheque amount. Complainant Society alleged that
accused has intentionally not maintained sufficient
amount in his bank account to honour the cheque.
Inasmuch, accused has committed the offence punishable
under section 138 of N.I. Act. On the aforesaid allegations,
the complainant society approached this court and prays
this court to punish the accused and to award the
compensation.
4. Originally the private complaint was filed before
Hon'ble XXVI ACMM court Bengaluru. The learned
presiding officer of that court, took the cognizance for the
offence punishable U/s 138 of N.I.Act and recorded the
sworn statement of the authorized person of complainant
4 C.C.No.11850/2019
society. On finding primafacie case, process was issued to
the accused.
5. After service of the summons to the accused,
accused has appeared before the court through his
counsel, and he got released on bail. In compliance with
provision of section of 207 of Cr.P.C. papers of the
prosecution was supplied to the accused, substance of the
accusation is readout to accused, in the language known
to him, he pleaded not guilty and submitted that, he is
having no defence to make.
Later as per special notification no. ADM/1/5/2020
dt:26.05.2020, case transferred to this court.
6. In order to prove the guilt of the accused, PW.2
has filed her examinationinchief affidavit and she got
marked 10 documents which are at Ex.P1 to 10 and she is
fully cross examined.
Accused statement under Sec.313 of Cr.P.C. is
recorded, he denied the same and submit that he is having
evidence to lead. Accused examined himself as DW.1 and
got marked one document as Ex.D.1. Complainant has not
chosen to cross examine the DW.1 accordingly, as per
ordersheet noted 10/2/2022 cross examination of DW.1 is
taken as nil.
7. Both the parties are permitted to file their written
arguments. Complainant has not chosen to comply the
same, accordingly complainant arguments is taken as not
5 C.C.No.11850/2019
addressed/canvassed. Counsel appearing for the accused
has filed the written arguments and authorities as per the
list. I have verfied the same along with materials available
on record.
8. The following points that arise for my
determination:
:P O I N T S:
1. Whether the complainant society proves
that, the accused has committed the
offence punishable U/s 138 of the N.I
Act, as alleged in the Complaint?
2. What Order?
9. After carefully going through the materials
available on record and taking into consideration of facts
and circumstances of the case, my finding to the above
points are as follows:
Point No.1: In the Negative,
Point No.2: As per final order, for the following:
REASONS
10. Point No.1: PW.2 being the authorized person of
complainant society, she reiterated the complaint
averments in her sworn statement affidavit which is treated
as her examinationinchief affidavit.
11. Considering and looking into the suggestions made
by the accused to the PW.2 duing the cross examination, it
gives an indication that accused has not disputed nor
denied the issuance of cheque as per Ex.P1 and his
6 C.C.No.11850/2019
signature as per Ex.P1(a). Complainant society has
established the fact that cheque in question is issued by the
accused for the discharge of his liability towards
complainant society, inasmuch the intitial statutory
presumption attached to the cheque has to be raised in
favour of the complainant society as per Sec.118, and 139
of NI Act.
Added to it, accused has not given the reply to the
mandatory notice issued by the complainant society to the
accused as per Ex.P.3 and it is one of the strongest ground
to hold and infer that cheque in question belongs to the
accused and he has issued the same for the discharge his
liability towards the complainant society.
12. The complainant society has relied on the cheque
as per Ex.P.1, cheque return memo dated 2/3/2019 as per
Ex.P2, Notice is issued to the accused within 30 days from
the date of receiving of the Memo as per Ex.P.3 and it is
served to the accused as per Ex.P.5 and complainant
society has filed the complaint within the stipulated period
of time. The aforesaid documents estblishes that
complainant society has complied all the ingredients of
Section 138 of N.I.Act. Complainant has also relied on
Ex.P.6, 7 Loan application, application for loan on surety of
immovable property, Ex.P.8 loan sanction memorandum,
Ex.P.9 gurantee agreement.
7 C.C.No.11850/2019
13. In order to rebut the initial statutory presumption
attached to the cheque, accused cross examined the PW.2.
In the cross examination it is elicited from the mouth of
PW.2 that PW.2 is having the knowledge of the loan
transaction with the accused and the details of gurantor
agreement executed by the accused and his guaranors and
accused has not barrowed the loan from the complainant
society. PW.2 deposed that accused is one of the gurantor
for the loan amount borrowed by Sri.Subramani S/o.late
Ramachandra Reddy and they have recovered about
Rs.10,00,000/. She deposed that the proceedings filed by
them under SARFAESI Act is pending along with the
proceedings initiated on the mortgage deed executed by the
principle borrower in respect of the loan amount. She
categorically deposed that she is having no document and
she has not tendered any document to show that she has
intimated/informed the accused regarding the loan amount
due from the principal borrower. She clearly deposed that
she is unaware of the whereabouts of principle borrower
and they could not redeem the mortgage deed due to some
technical aspects i.e., the property of the principle borrower
is situated on the main Kaluve.
14. Accused in his examinationinchief contended
that complainant society has filed false complaint by
making use of his cheque given as security for the earllier
loan which he has cleared. He further contended that in
8 C.C.No.11850/2019
the year 2015 he had borrowed Rs.30,00,000/ from the
complainant society for the upgradation of his hospital and
he had issued six signed blank cheques to the society as a
security for the said loan. Further he contended that he
had repaid the entire loan amount but complainant society
has failed to return his cheques given as security. The
complainant society assured him that they have destroyed
his cheques given as surety. Further, he contended that
there was a dispute regarding the interest portion in respect
of his earlier loan and for that fact he had issued his three
signed blank cheques to the complainant society at their
request. Such being the case, they have filed this false case
by making use of his earlier cheques.
15. On careful perusal of the evidence brought on
record it is an admitted fact that, the accused has not
barrowed the alleged loan amount and one Sri.Subrmani
S/o.late Ramachandra Reddy has availed the loan of
Rs.90,00,000/ from the complainant society by mortgaging
the property, bearing site No. 389, Asst. No. 164/1, situated
at Kacharakanahalli village, Bengaluru north as stated in
Ex.P.6. It is also true that as per Ex.P.9, accused, his wife
Dr.Rashmi Jayanna and one B.Srinivasan have jointly
guranteed the loan amount borrowed by Sri.Subramani
S/o.late Ramachandra Reddy and they have jointly
executed the said document along with the principal
borrower.
9 C.C.No.11850/2019
16. The learned counsel apppearing for the accused
in his written argument specifically contended that there is
no legally enforceable debt against the accused and he has
not issued the cheque in question for discharging the
alleged liability. He further contended that PW.2 is having
no lawfull authority to depose before this court inrespect of
the alleged loan transaction as per Ex.P.10 and complainant
society is not the the holder in due course of the cheque.
Added to it, he specifically and strongly contended that
Sri.Subramani S/o.late Ramachandra Reddy has borrowed
the loan amount against his property by motgaging it under
the register document and complainant has not sanctioned
the loan amount aganist the security of the cheque alleged
to has given by the accused to the complainant society as
per Ex.P.1. Further, he contended that complainant society
has not informed/demanded the due loan amount of
Sri.Subramani S/o.late Ramachandra Reddy from the
accused as per the terms of the guarantee agreement i.e.,
particularly in compliance with condition No.9 of the said
agreement. The learned counsel appearing for the accused
has also relied on authorities as noted in his written
arguments in respect of the aforesaid points of his written
arugments.
17. On the contrary complainant has not chosen to file
any contradictory arguments/views for the aforesaid written
10 C.C.No.11850/2019
arguments of the accused and the authorities relied on by
the counsel appearing for the accused.
According to PW.2, Ex.P.10 is the authorization letter
given to him by the complainant society. On careful perusal
of Ex.P.10 its recitals clearly reveals that PW.2 is not
authorized to depose on behalf of the complainant society
and PW.2 has not tendered the document to show that the
power to depose is lawfully delegated to her by the
complainant society. The power/authority to prosecute the
case against the accused and power to depose on behalf of
the complainant society is not lawfully conferred by the
complainat society to PW.2 such being the case the lawful
authority of PW.2 cannot be presumed by the court without
cogent documents and no sanctity/evidentiary value can be
attatched to the oral tesrimony of PW.2 .
18. No doubt the aforesaid defect is a curable defect
and complainant society has not attempted to correct the
same. It is true that the Hon'ble Supreme Court of India has
consistently held that "for a person to represent and tender
evidence in the court of law on behalf of the another person
ought to be authorised law fully as observed by the Hon'ble
High Court of Karnataka in the following authorities;
a). Dundavva /vs. Smt.Kenchavva W.P.No.208508/2017(GM
CPC) dt. 5/9/2018
b). George Joseph /vs/ HMT (International Ltd.) Crl.Revision
Petn.No.129/2013 dt. 28/10/2014
11 C.C.No.11850/2019
c). M/s.Canara Workshop Ltd. /vs/ Mahesh Crl.Appeal
No.2653/2008 dt. 27/9/2013.
d). M/s.C.C.I. Ltd. /vs./ Suresh.M - Crl.Appeal No.975/2010 dt.
12/07/2019.
19. Complainant society has failed to discharge it's
burden of proof, so far as establishing the lawfull authority
of PW.2 to procecute the case aganist the accused and to
depose before the court on be half of the complainant
society and regarding the existence of legally enforceable
debt aganist the accused alone is concerned and it could
not prove it's case beyond reasonable doubt, accordingly,
accused is able to establish the fact that PW.2 has no lawful
authority to depose on behalf of the complainant society.
Ex.P.9 is the (unstamped) gurantee agreement
executed by the accused, his wife Dr.Rashmi Jayanna and
one D.Srinivasan in favour of the complainant society and
thereby they have jointly guranteed for the loan amount
borrowed by Sri.Subramani S/o.late Ramachandra Reddy
and the said fact is accepted by the accused and the
complainant society. Patently, complainant society has not
arrayed Dr.Rashmi Jayanna and one D.Srinivasan as
parties to the proceedings.
20. On careful and harmonious reading of Ex.P.9 and
its conditions and condition No.9 of the said document, it
gives a clear indication that parties there too have agreed
that, in case if the principle borrower fails/default to pay
the borrowed loan amount as per the agreed terms and
12 C.C.No.11850/2019
conditions of the society, then society has to
inform/demand the due amount of the principle borrower
from the gurantors so as to invoke the gurantee agreement
and to take action against the gurantors.
21. Apparently and admittedly as admitted by PW.2,
that she has not tendered any document to show that they
have informed (either in oral or in wiring) to all the
gurantors of the principal borrower, that the principle
borrower has defaulted in repayment of loan amount and
has failed to pay the same. Such being the case, the
complainant society is estopped from invoking the gurantee
agreement against the accused and its claim against the
sole gurantor i.e., A.1 is perverse and inconsistent to its
own conditions contemplated under Ex.P.9. The said glaring
lacuna is rightly highlighted by the counsel appearing for
the accused. Complainant has faid to disprove the aforesaid
fact. Accordingly it is deserved to be accepted.
22. On the other hand, one of the contention of the
accused in his witten argument is that complainant has
come up with this false case by making use of the earlier
cheque given by him as security for his earlier loan amount
and no enforceable debt is existed against him and he has
not issued the cheque in question for the same. As per the
entry in page No.7 of undisputed Ex.D.1, it is evident that
accused has borrowed the loan of Rs.30,00,000/ in the
year 2015 from the complainant society. The aforesaid
13 C.C.No.11850/2019
probable contention of the accused corroborates with the
aforesaid entry. In the cross examination of PW.2 she clear
deposed that they have not taken lawful action against the
mortgaged property of the principle borrower as the
mortgaged property is located on Raja Kaluve. Considering
the oral testimony of PW.2, terms and conditions of Ex.P.8,
9 and the contention of accused it appears that
complainant has come up with this case by using the
cheque of the accused secured by them as a security for his
earlier loan. If the contention of the accused is false and
faraway from the truth, complainant could have effortlessly
cross examined the DW.1 to destroy his probaboe
contention that the accused has requested/demanded the
complainant society to return his cheque given as security
for his earlier loan and another contention that they have
destroyed his cheque given as security for his earlier loan
transaction. But complainant has not disputed the
aforesaid probable contentions of the accused and
complainant has not chosen to cross examine the DW.1 to
butress the probable contentions inasmuch the oral
testimony and documentary evidence, written arguments
relied on by the accused remains unimpeached and its
probability cannot be doubted. The conduct of the PW.2 i.e.,
not choosing for cross examining the DW.1 and not taking
steps against the registered mortgaged deed executed by the
principle borrower fortifies and probabilize the contentions
14 C.C.No.11850/2019
of the accused that complainant society has come up with
this case by wrongly invoking the condition No.9 of the
guranteee agreement and by making use of earlier cheque
given by the accused as a security for his earlier loan and
another contention that no legal enforceable debt is existed
against the accused.
23. So far as the arguments of the learned counsel
appearing for the accused on the point of holder in due
course is concerned and inview of section 8 of the N.I.Act
1881 the cheque in question is alleged to have issued in the
name of the complainant society and no doubt in view of
gurantee agreement complainant society is entitled to
recover the loan amount from the gurantors of the principle
borrower of the loan amount only if the principle borrower
fails/default to pay the loan amount.
24. Added to it, in view of condition No.9 of the
gurantee agreement in Ex.P.9 accused has established the
fact that the complainant society has ignored and not
complied the condition No.9, accordingly complianant
society has not taken reasonable care and caution while
invoking the aforesaid condition of Ex.P.9 accordingly it can
be hold and inferred that the act of the complainant society
is not in good faith.
Complainant society has not specifically pleaded and
deposed the actual date and defaulted amount of the
principle borrower Sri.Subramni and complainant society
15 C.C.No.11850/2019
has not tendered any document to substantiate the above
said fact in order to fortify his claim on the strength of the
condition No.9 as contemplated in Ex.P.9, inasmuch the
version of the complainant cannot be accepted.
25. Inasmuch, accused is able to create the doubt
regarding the existence of debt and his sole liability towards
the complainant society and the presumed facts as on the
date of the cheque by leading his evidence and by eliciting
some of the material facts from the mouth of PW.2 and also
by tendering his written arguments on the legal flaws/
infirmities on the part of complainant society.
It is also true that rebuttal of initial statuary
presumption which is raised in favour to the complainant
society under the N.I. Act can be done by the accused by
pointing out the material legal infirmities in complainant
story and can successfully displace, dislodge the said
presumption. The accused has complied the same in the
present case as there is no straight jacket formula to rebut
the presumption. Accordingly considering and looking into
the evidence and arguments putforht on record, this court
has come to the firm conclusion that accused has
succussfully rebutted the initial presumtion raised in favour
of the complaiant society.
26. It is true that presumption itself is not a
substantial evidence. When the accused has succesfully
rebutted the same and the said presumptions will not come
16 C.C.No.11850/2019
to the aid of the complainant society. Inasmuch, as per the
aforesaid discussed, patent glaring infirmities on the part of
the complainant society, accused has established the flaws
and technical errors committed by the complainant
company as discussed above. Accordingly, the contention of
the accused is probable and is sufficient to revert back the
burden on the complainant society to establish the fact that
PW.2 is having lawful authority to depose and to establish
its case beyond reasonable doubt, by tendering the positive
and independent evidence before the court. Complainant
society has faid to comply the same. Hence with the
aforesaid discussion based on the materials available on
record and by considering the facts and attending
circumstances of the case, I am answering this point in
the Negative.
27. POINT NO.2: For the foregoing reason and
discussion, on point No.1, I proceed to pass the following:
ORDER
Exercising the power conferred U/sec 255(1) of Cr.p.c. accused is acquitted of the offence punishable U/s.138 of the Negotiable Instrument Act,1881.
All the interim applications pending if any stands disposed off.
17 C.C.No.11850/2019The bail bond and surety bond of accused shall continue for next 6 months as per Sec.437A of Cr.P.C. (Dictated to the stenographer, transcribed and computerized by him, corrected by me on computer and then pronounced by me in the open court on this the 31st day of October 2022) S d/- (P. SHIVARAJ) C/c.XL A.C.M.M., Bengaluru.
ANNEXURES
1) List of Witnesses Examined on behalf of complainant society:
PW.1 : Sri.Raja Naik.
PW.2 : Smt.Nanda Kumari.
2) List of exhibits marked on be half of complainant society:
Ex.P.1 : Original cheque.
Ex.P.2 : Cheque return memo.
Ex.P.3 : Office copy of legal notice.
Ex.P.4 : Postal Receipt.
Ex.P.5 : Postal acknowledgement
Ex.P.6, 7 : Loan applications
Ex.P.8 : Sanction Memorandum
Ex.P.9 : Guarantee Agreement.
Ex.P.10 : Authorization letter.
3) List of witness examined on behalf of the Accused: DW.1 : Dr.Jayanna.18 C.C.No.11850/2019
4) List of exhibits marked on behalf of the Accused: Ex.D.1 : Loan account statement of accused.
(P. SHIVARAJ) C/c.XL A.C.M.M., Bengaluru.
19 C.C.No.11850/2019(Judgment pronounced in Open Court vide separate order) ORDER Exercising the power conferred U/sec 255(1) of Cr.p.c. accused is acquitted of the offence punishable U/s.138 of the Negotiable Instrument Act,1881.
All the interim applications pending if any stands disposed off.
The bail bond and surety bond of accused shall continue for next 6 months as per Sec.437A of Cr.P.C.
(P. SHIVARAJ) C/c.XL A.C.M.M., Bengaluru.
20 C.C.No.11850/2019