Bangalore District Court
Banker vs Got Examined Him As Dw1 And No Documents ... on 26 April, 2019
IN THE COURT OF THE VI ADDL. SMALL CAUSES JUDGE &
XXXI ADDL. CHIEF METROPOLITAN MAGISTRATE,
BENGALURU CITY
DATED THIS THE 26th DAY OF APRIL 2019.
PRESENT: Smt. K. UMA., B.A.L.,LL.B.,.
VI Addl. Small Causes Judge &
XXXI ACMM, Bengaluru.
C C NO.683 OF 18
JUDGMENT U/S 355 OF Cr.P.C.1973
1. Sl. No. of the case : C.C. No. 683 of 2018
2. The date of commission of
the offence : -
3. Name of the Complainant : Sri.P. Abbai Raju.
Aged about 49 years,
S/o late Venkataraju,
R/at No.91,
Sahasra Grandeur Apartment,
Flat No.301, 'A' Sector,
2nd Cross, Amruthanagar,
Sahakaranagar Post,
Bengaluru-560092.
(By Sri.K.Kumar, Advocates)
4. Names of the Accused : 1. Bgrow Agro Tech (P) Ltd.
Represented by its Director
Sri.Avyaktha
Aged about 42 years,
S/o. Not known.
SCCH-2 2 CC.683 of 18
2. Sri.Avyaktha
Aged about 42 years
S/o Not known
Director of
Bgrow Agro Tech (P) Ltd.
Both having Business at:
"Melting Point",
22nd Cross, K.R.Road,
Banshankari 2nd stage,
Bengaluru-560070
Also at: Regd Office:
"Holiday House"
Kumbra-574210,
Puttur, D.K.
(By Sri.Thejas Rai.K, Advocate)
5. The offence complained : Under Section 138 of the
of or proves Negotiable Instruments
Act.
6. Plea of the accused : Pleaded not guilty
and his examination
7. Final order : Accused is convicted
8. Date of such order : On 26-04-2019
for the following;
SCCH-2 3 CC.683 of 18
JUDGMENT
This complaint is filed against the accused under Sec.200 of Cr. P. C. for the offence punishable under Section 138 of the Negotiable Instruments Act. Cognizance of the offence taken on presentation of the private complaint and ordered to register the criminal case, as there were prima facie materials to proceed against the accused.
2. The brief facts of the Complainant's case is that; It is the contention of the complainant that, he was aware of the accused, who approached him in the 3rd week of August 2016 for the financial assistance of Rs.3,00,000/- for the purpose of improvement of business. Accordingly, he paid said sum by way of cash to the accused in the 3rd week of August 2016. After receiving the receipt of loan amount, the accused had agreed to refund the same within 12 months from the date of borrowing along with interest at 2%, but he failed to keep up his promise, neither he paid interest nor refund the loan amount in spite of several requests and demands. However, finally, he issued a cheque bearing No.506252 dated 23.11.2017 SCCH-2 4 CC.683 of 18 for Rs.3,00,000/- drawn on Karnataka Bank, Basavangudi Branch, Bengaluru, in his favour towards principal amount and requested to pay the interest amount later.
3. On presentation of the said cheque through complainant's banker, the same came to be returned as dishonoured with an endorsement ''Account closed'' on 27.11.2017. Thereafter, the complainant got issued legal notice on 21.12.2017 through RPAD, as contemplated under Section 138(b) of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the NI Act"), to the accused to make payment of the cheque amount. Despite due notice, accused failed to pay the amount covered under cheque within statutory period of notice of demand. Hence, this complaint.
4. On being served the summons, the accused got released him on bail. Plea of the accused recorded by explaining the substances of accusation. Accused pleaded not guilty and claims to be tried. The Accused filed application under Section 145(2) of N I Act, seeking permission to cross-examine Complainant and to proceed in accordance with Law. SCCH-2 5 CC.683 of 18 Accordingly, the application is allowed and the Accused is permitted to cross-examine Complainant/PW-1.
5. The Complainant in support of the case got examined himself as PW-1 in pre-summons stage. Produced documents and are marked at Ex.P1 to Ex.P8. After closure of Complainant's evidence, the Accused was examined under Section 313 of Cr.P.C. by explaining the incriminating circumstances appearing in the evidence of the Complainant. The Accused has denied the prosecution version in toto. The Accused got examined him as DW1 and no documents got marked.
6. Heard arguments of both the parties.
7. The learned counsel for Accused has also relied on the following list of citations in support of the case.
• 2015 (2) KCCR 1115 (SC)
(Ramdas -vs- Krishnanand)
• (2015) 1 SCC 99
(K.Subramani -vs- K.Damodara Naidu)
• 2012 (3) KCCR 2057
(Veerayya -Vs- G K Madivalar)
SCCH-2 6 CC.683 of 18
• 2013 14 SCALE 589
(John K.Abraham -vs- Simon C.Abraham & ano.) • (2014)1 SCC (Cri) 791 • ILR 2008 KAR 4629 • AIR 2008 SC 1325 • 2011 (3) KCCR 1825 • 2009 (2) DCR 519 • 2013 (1) DCR 417
8. Following points that arise for my consideration;
1. Whether Complainant proves beyond all reasonable doubt that Accused has committed an offence punishable under Section 138 of Negotiable Instruments Act?
2. What order?
9. My findings to the above points are:
Point No.1 : In the Affirmative.
Point No.2 : As per the final order for the following;
REASONS
10. POINT NO.1: The Complainant - Mr.P. Abbai Raju. in proof of his contention, got examined himself as PW1, who filed affidavit in-lieu of oral examination. PW1 has deposed in SCCH-2 7 CC.683 of 18 consonance with the averments of the complaint. According to PW1 the cheque - Ex.P1 has been issued by the Accused towards repayment of hand loan. The cheque on presentation returned as "Account closed" as per the bank endorsement produced at Ex.P2. Hence, he got issued legal notice, which is produced at Ex.P3 through RPAD vide postal receipts marked at Ex.P3(a) to 3(d), which was served on the accused as per Ex.P4 and Ex.P5-postal acknowledgements and two returned postal covers marked at Ex.P6 and Ex.P7 and the notice in Exs.P6 and P7 are marked at Ex.P6(a) and P7(a). This is the evidence placed by the Complainant.
11. On perusal of the oral and documentary evidence placed by the complainant, it reveals that the complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with regard to taking cognizance of the offence punishable under Section 138 of N I Act.
SCCH-2 8 CC.683 of 18
12. With this evidence of Complainant, I shall examine the probability of defense put forth by the Accused in the light of principles enunciated in the dictum of Hon'ble Apex Court in Krishna Janardhan Bhat Vs. Dattatreya G Hegde, reported in 2008 (4) SCC 54. The Hon'ble Apex Court has observed thus; Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act.It merely raises a presumption in favour of a holder of the cheque that, the same has been issued for discharge of any debt or other liability.
13. The learned counsel for Accused during course of arguments has relied on following decisions; 2015(2) KCCR 1115 (SC) Ramdas Vs. Krishnanand.
The Hon'ble Apex Court in its decision has held thus;
"Complainant working as driver under accused cheque in question was for Rs.5,00,000/-. Complainant's stand was that he had given a hand loan of Rs.1,75,000/- to accused. No material on record in support of claim. Also no calculation of account or stipulation of any interest on alleged loan amount to show as to SCCH-2 9 CC.683 of 18 how amount of Rs.5,00,000/- was figured, in return of a hand loan of Rs.1,75,000/-. Whether there was sufficient balance amount or not in bank account of Accused when cheque was dishonoured. Not known. In absence of any authenticated and supporting evidence, court cannot believe that complainant has raised an amount of Rs.1,75,000/- that too by obtaining loan of Rs.1,50,000/- from a bank, only to give hand loan to his employer."
(2015) 1 Supreme Court Cases 99 K.Subramani Vs. K. Damodara Naidu.
The Hon'ble Apex Court in its decision has held thus;
"Legally recoverable debt not proved as complainant could not prove source of income from which alleged loan was made to accused."
2012 (3) KCCR 2057 Veerayya V/S G.K Madiwalar The Hon'ble High Court of Karnataka in its decision has held thus;
"The complainant does not say in his evidence as to on what date he gave the loan of Rs.2,00,000/- and the complainant did not take any document what so ever, neither a receipt nor a promissory note was obtained from the accused. As well the complainant did SCCH-2 10 CC.683 of 18 not place sufficient evidence to show that he had the financial capacity to advance Rs.2,00,000/- to the accused."
(2014) 2 SCC 236 John K. Abraham V.Simon C.Abraham and another The Hon'ble Apex Court in its decision has held thus;
"Complainant alleging that accused borrowed a sum of Rs.1,50,000/- from him and issued a cheque for said sum which was dishonored. From drawing presumption under S.118 R/w 139 N I Act, burden is heavily upon complainant, to show that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make payment as had been agreed while issuing the cheque in favour of the Complainant.
14. It is necessary to point out the mandatory presumption to be raised in respect of negotiable instrument as contemplated under Negotiable Instruments Act. Indisputably, a mandatory presumption is required to be raised in terms of Section 118 (b) and Section 139 of the Act. Section 138 of the Act has three ingredients viz.:
SCCH-2 11 CC.683 of 18
1. that there is 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 a legally enforceable debt; and
3. that the cheque so issued had been returned due to insufficiency of funds.
15. On going through the citations cited by the Accused and arguments canvassed by the Complainant and Accused, it is relevant to point out that in the present nature of cases the court has to determine whether version of Complainant is true or the theory put-forth by the Accused is true?.
16. At the outset, an essential ingredient of Section 138 of N I Act is that the cheque in question must have been issued towards legally enforceable debt. Under Section 118 of the Act, a presumption shall be raised regarding consideration, date, transfer, endorsement and regarding holder in the case of negotiable instruments. Even under Section 139 of the Act, a rebuttable presumption shall be raised that, the cheque in question was issued regarding discharge of legally enforceable SCCH-2 12 CC.683 of 18 debt. These presumptions are mandatory provisions that are required to be raised in case of negotiable instruments.
17. Keeping in mind the position of law as stated supra, let me deviate to appreciate the evidence of PW-1 deposed during cross-examination. On appreciation of the evidence of the complainant deposed during cross-examination, it indicates that, the Complainant met Accused No.2, namely Avyktha Ramakrishna at hospital through his friend Dr.Ramesh in the year 2016. He did not visit the firm of first Accused, which is situated at South Kannada District, Sulya Taluk. He did not issue legal notice to the address of first Accused at Sulya Taluk, however he sent legal notice to the first Accused firm as per the address shown in the visiting card. He has given information to his advocate to prepare legal notice. He did not know that, the first Accused firm has been stopped in the year 2013. He is not aware whether first Accused firm is doing work at Bengaluru or not. PW1 has deposed that, he is not aware of the fact whether, the first Accused firm was not doing work at Bengaluru either at the time of sending notice or at the time of filing case. The notice SCCH-2 13 CC.683 of 18 sent to the address of first Accused is returned as insufficient address.
18. On further appreciation of evidence of PW1 it is forth coming that, according to Complainant, he lent loan of Rs.3,00,000/- to the Accused at his office in the 3rd week of August 2016 as the Accused requested for financial help prior to 3 to 4 days of lending loan. He is doing travels business since 25 years and he will be having cash in hand every day. He did not get any documents from 2nd Accused at the time of lending loan of Rs.3,00,000/- as Accused assured that he would return the money within a short period and thereafter the duly filled cheque has been issued by the Accused at his office. He is an income tax assesse. He did not shown in the income tax returns for having paid Rs.3,00,000/- to the Accused. There is a different handwriting and ink compared to the signature and other handwritings appearing in the cheque. PW1 has deposed that, he is not aware the handwriting in the cheque is not that of Accused. He was not having any problem to pay loan to Accused through cheque prior to payment of loan. He had met SCCH-2 14 CC.683 of 18 Accused No.1 twice. He is not having information about the directors of first Accused firm and when the firm was established at Bengaluru. According to Complainant, the Accused issued Ex.P1 duly filled post dated cheque and had promised to pay interest.
19. On further appreciation of evidence of PW1, it is the defense of Accused that, he is one of the subscriber to the chit conducted by the Complainant for chit value of Rs.2,00,000/-, which commenced from November 2012. He had auctioned and bid the chit in the month of November 2013 and obtained chit amount and he had paid all the installments of chit. Thereafter, even on request the Complainant did not return the cheques. This particular defense has been denied by the complainant, which is put-forth by way of suggestions. PW1 has denied to the suggestion that, he is having custody of cheques of accused pertaining to Basavanagudi branch of Karnataka Branch cheques Nos 506253 and 506254. PW1 has denied to the specific suggestion for having misused the cheques, which was issued by the Accused towards security. PW1 has denied to SCCH-2 15 CC.683 of 18 the suggestion that, he was not conducting chit business and denied for having lodged false case against the Accused. PW1 has also denied to the suggestion that the Ex.P1 is not issued for refund of amount. All further possible suggestions with regard to receipt of loan of Rs.5,00,000/- have been denied by this witness.
20. On the other hand, the Accused to establish his defense got examined him as DW1. In chief examination affidavit, DW1 has deposed that, he is aware of Complainant through travels business as he had met complainant at the office of Complainant. Complainant was conducting chit business and had asked him to subscribe for chit. Accordingly, he subscribed for chit in the month of November 2012 for the chit value of Rs.2,00,000/- and the chit amount per month was Rs.20,000/-. In the month of January 2013 he auctioned and bid the chit and while obtaining the chit amount by way of cash to the tune of Rs.1,60,000/-, the Complainant had received 3 signed blank cheques from him. The Complainant had made note about chit amount received by him. He had issued the SCCH-2 16 CC.683 of 18 Ex.P1 as well as other 2 cheques. He paid all the installments of chits till the August 2013. He left Bengaluru in the month of August 2013, and shifted to Sulya, thereafter he had asked complainant to return the cheques, whereas the Complainant had informed him the cheques had misplaced and he would return the same but the Complainant did not return the cheques to him and filed the present case in the year 2018.
21. DW1 has deposed that, he did not receive loan of Rs.3,00,000/- from the complainant and he did not issued the disputed cheque for repayment of loan. The Ex.P1 cheque was issued by him in the month of January 2013. The handwriting appearing in the cheque is not that of him except the cheque. He is a director of Bgrow Agro Tech (P) Ltd. His father is one of the director. Since 2014-2015 he is having his firm at Sulya, South Kannada District. The Bengaluru address shown in the cause title of Complaint was the address of the firm and wherein he was doing work in the year 2012-13. DW1 has deposed that, he is innocent of the offence alleged against him and he is been SCCH-2 17 CC.683 of 18 fixed in this case. The Complainant has the custody of other 2 cheques of him.
22. On appreciation of evidence of DW1, deposed during cross examination, it indicates that, the complainant was conducting chit business at his office situated at Race Course Road. He was paying the chit amount personally by way of cash. But, he do not have any documents to establish payment of chit amount be him to the complainant. According to accused he closed his business at Bangalore. Accused did not ask Complainant to return the cheques by issuing notice. Accused admits the address mentioned in the legal notice is correct and the same is as per visiting card marked at Ex.P8. All further possible suggestions have been denied by this witness.
23. On over all appreciation of oral and documentary evidence of PW1 and DW-1, it indicates that the Ex.P.1 cheque has been issued by the accused himself. The contention of accused is that, the said cheque was issued in blank to the complainant towards security. Except put-forthing suggestions to the complainant, there is no supportive evidence in this SCCH-2 18 CC.683 of 18 regard. The Accused being a business man he did not take any precautions with regard to the cheques said to have been issued by him to the complainant towards security at the time of drawing chit amount.
24. It is relevant to point out that according to accused himself he is aware that the Ex.P.1 cheque is with the complainant. It is the defense of Accused that, he has paid all the chit installments to the Complainant and the complainant did not return the cheques of him. If that being so, he ought to have taken precautions by issuing stop payment instructions to his banker or at least he would have taken legal action against the complainant, if this version is true. But the accused did not take shelter under law. And in the cross examination of PW1 has only given suggestions about non issuance of cheque to the complainant for repayment of loan. As well accused has taken defense that he did not receive legal notice. But, the accused did not deny the address mentioned in the postal acknowledgment is not that of him. Therefore, an inference has to be drawn that the legal notice issued on accused has been served. Despite SCCH-2 19 CC.683 of 18 service of legal notice the accused did not reply to the same, by taking the defence at threshold.
25. At the outset it is necessary to point out that the accused has taken defense that the signed cheque was issued to the complainant in connection to security. But, as appreciated herein above the accused being a business man did not take legal action against the complainant for having misused the cheque. Therefore, on this point also the defense of accused is not acceptable. In this connection it is not out of place to refer a decision reported in 2006 Crl. L. J. 3760 in case of Smt. Umaswamy Vs- K. N. Ramaiah; wherein the Hon'ble High Court of Karnataka has observed at para 4 of its judgment that;
"The cheque whether issued for payment of debt or as security makes no distinction in law. The cheque is a negotiable instrument, it may be that sometimes the cheque is issued with a request on the part of the drawer to defer the presentation of the cheque for some time to enable the drawer to make payment by cash and take back the cheque or allow time to arrange funds for encashment of cheque. When the amount is not paid as per oral SCCH-2 20 CC.683 of 18 understanding the payee is well justified to present the cheque for encashment. The cheque even if it is issued as a security for payment, it is negotiable instrument and encashable security at the hands of payee. Therefore, merely because the drawer contends that it is issued as security is not a ground to exonerate the penal liability u/s. 138 of the N. I. Act."
26. As observed in the above citation, it has to be presumed that the cheque in question was issued by the accused to discharge the legally recoverable debt or liability. The accused can place rebuttal evidence so as to show that cheque was not issued for consideration. As appreciated supra accused has failed to put acceptable and satisfactory evidence to probabalise the defense. It is pertinent to note that the accused do not dispute that the complainant is having travel business. No doubt the complainant did not place any material to establish his financial capacity and no accounts submitted to that effect. However, the law is clear that the cheque is a primary document to prove the transactions. The Accused being prudent man did not reply to SCCH-2 21 CC.683 of 18 the legal notice and failed to take defense at first instance. Therefore, there is no question of saying that the cheque was not issued for liability. In the light of the discussion hereinabove, I am of the considered opinion that the complainant has proved that the accused has committed the offence punishable under Section 138 of Negotiable Instruments Act. Accordingly, I answer point No. 1 in the affirmative.
27. POINT No.2:- The Negotiable Instruments Act is a special enactment, the provisions of the Act prevail over the general provisions contained in Code of Criminal Procedure. Therefore, keeping the relevant provisions of the Act in mind the sentence is to be passed. In the light of the reasons on the point No.1, I proceed to pass the following;
ORDER The accused is convicted under Section 255(2) of Cr.P.C., for the offence punishable under Section 138 of the Negotiable Instruments Act, and he is sentenced to pay a fine of Rs.4,55,000/- (Rupees Four Lakhs SCCH-2 22 CC.683 of 18 Fifty Five Thousand only). In default to pay fine the accused shall undergo simple imprisonment for a period of three months. Further, acting under Section 357(1)(a) of Cr.P.C., out of fine amount of Rs.4,55,000/-
(Rupees Four Lakhs Fifty Five Thousand only), a sum of Rs.5,000/- (Rupees Five Thousand only), shall be defrayed as prosecution expenses to the state.
Further, acting under Section 357(1)(b) of Cr.P.C., a sum of Rs.4,50,000/- (Rupees Four Lakhs Fifty Thousand only), amount on recovery of fine shall be paid as compensation to the complainant.
Bail bond of the accused and that of surety shall stand cancelled.
Supply a free copy of this Judgment to the accused.
(Dictated to the stenographer through online, corrected by me and then pronounced in open court on this the 26th day of April 2019).
(K.UMA ) VI Addl. Small Causes Judge & XXXI ACMM, Bengaluru.
SCCH-2 23 CC.683 of 18ANNEXURE LIST OF WITNESS EXAMINED ON BEHALF OF THE COMPLAINANT:
PW1 Mr.P.Abbai Raju
LIST OF DOCUMENTS MARKED ON BEHALF OF
COMPLAINANT:
Ex.P.1 : Cheque
Ex.P1(a) : Signature of Accused
Ex.P.2 : Bank Memo
Ex.P.3 : Copy of Legal notice
Ex.P.3(a) - : Postal receipts
3(d)
Ex.P.4 & P5 : Postal acknowledgements
Ex.P.6 and 7 : Returned Postal covers
Ex.P.6(a) & : Notice in Ex.P6 & P7
7(a)
Ex.P.8 : Visiting card
LIST OF WITNESS EXAMINED ON BEHALF OF THE DEFENCE:
DW1 : Sri. Avyaktha Ramakrishna LIST OF DOCUMENTS MARKED ON BEHALF OF DEFENCE:
-NIL-
(K. UMA ) VI Addl. Small Causes Judge & XXXI ACMM, Bengaluru.