Bangalore District Court
Promising That The Said Cheque Will Be ... vs He Has Pleaded Not Guilty. Hence on 23 June, 2016
IN THE COURT OF THE XL ADDL.CHIEF METROPOLITAN
MAGISTRATE, BANGALORE CITY.
SCCH-14
PRESENT: BASAVARAJ CHENGTI., B.Com.,LL.B.,(spl)
XL ACMM,
BANGALORE.
C.C.No. 21418/2013
Dated this the 23rd day of JUNE 2016
1. Sl.No. of the case
[
C.C. No.21418/2013
2. The date of Institution 04.03.2013
3. The date of commencement
of the evidence 05.05.2015
4. Name of the Complainant SRI CHATURBAHU CHITS
PVT.LTD.,
No.60, 1st floor,
19th main road,
2nd Block, Rajajinagar,
Bangalore-560 010.
Rep., by its Foreman,
P.Prakash,
(By pleader Sri BSN)
5. Name of the Accused : SRI.S.KUMARAVELU
Occupation Helper
Working at KSRTC,
Regional workshop,
Mysore road,
Kengeri,
Bangalore-560 060.
(By pleader Sri RVS)
6. The offence complained of or Under Sec.138 of N.I. Act.
proved
7. Plea of the accused on his Pleaded not guilty
examination
8. Final Order Accused is acquitted
9. Date of such order 23.06.2016
SCCH-14 2 CC No.21418/2013
JUDGMENT
This is a complaint filed by the complainant against the accused for the offence punishable U/Sec.138 of Negotiable Instruments Act (hereinafter called the Act).
2. Brief averments of the complaint are as under:
The complainant is one of the leading chit and finance companies. The accused is a member of the chit group SCD-1, which was commenced from 15.12.2008 to 21.03.2012 for a period of 40 months. On 20.08.2009, the accused has drawn the amount of Rs.1,20,000/- only agreeing to repay the amount @Rs.5,000/- per month for a period of 40 months. After borrowing the chit amount, the accused has not paid the monthly installments from 21.08.2010 to 21.03.2012 for a period of 20 months @ Rs.5,000/-
p.m., totally he was in due of Rs.1,00,000/- plus interest @ 18% p.a., and penal interest @3% p.a., totally a sum of Rs.1,73,948/- was due. The complainant has made the demand on several occasions. The accused has issued a cheque bearing No.049674 drawn on Syndicate Bank, K.H road, Branch, Bangalore on 10.01.2016 for a sum of Rs.1,73,948/- in favour of the complainant promising that the said cheque will be honored on presentation. The complainant has presented the cheque in Deepak Co-operative Bank Ltd., Bajajinagar Branch, Bangalore, but the cheque was returned with memo "Funds insufficient" on 18.01.2013. The matter was informed to the accused personally, but he did not come forward to pay the cheque amount. Therefore, SCCH-14 3 CC No.21418/2013 the complainant got issued a legal notice to the accused on 01.02.2013 calling upon him to pay the cheque amount. The notice was sent through RPAD and it was served on the accused. Inspite of receipt of notice, the accused has not paid amount of cheque to the complainant. Hence, the complainant has filed this complaint praying for convicting the accused, punishing him and for awarding compensation.
3. On the basis of the complaint, cognizance of offence was taken and the complaint was registered in PCR No.4730/2013. Then, sworn statement of the representative of the complainant was recorded. After hearing the counsel for the complainant, the court found sufficient material to issue process against the accused for the offence punishable U/s 138 of the Act. Accordingly, this criminal case was registered against the accused for the said offence and process was issued. Initially, the complaint was presented before 13th ACMM Bangalore and it was made over to 19th ACMM., Bangalore. Later, it came to be transferred to this court. In the pursuance of the process, the accused has appeared before court through his counsel and he is enlarged on bail. Then, substance of accusation was read over and explained to the accused. He has pleaded not guilty. Hence, the complainant was called upon to prove his case.
4. During evidence, the complainant has examined his representative as PW.1 and got marked documents as Ex.P1 to Ex.P6. Then, statement of accused was recorded. During the SCCH-14 4 CC No.21418/2013 cross examination of PW.1, the accused has got marked documents produced by the complainant as Ex.D1 to 3.
5. Heard the arguments. The counsel for the accused has relied upon ruling reported in II (2004) BC 698 (SC) :(Indus Airways Pvt., Ltd., & Ors., Vs., Magnum Aviation Pvt.Ltd.,). I have gone through the said ruling and perused the record.
6. Now the points arise for my consideration are:
1. Whether the complainant has proved that the accused has issued Ex.P-1 cheque in his favour towards discharge of legally enforceable liability without maintaining sufficient balance in his bank account and failed to pay the cheque amount within time inspite of service of demand notice?
2. What order?
7. My findings are:
POINT NO.1 : In Negative.
POINT NO.2 : As per final order.
REASONS
8. POINT NO.1: It is the case of the complainant that he was running chit group no.SCD-1 for Rs.2,00,000/- in which the accused was a subscriber, that the accused has received chit amount and agreed to pay future installments, that the accused has committed default in payment of installments after receiving SCCH-14 5 CC No.21418/2013 the chit amount, that he was in due of Rs.1,00,000/- towards chit installments by the end of chit, that the accused was liable to pay interest @18% p.a., and penal interest @3%p.a., that the total amount due on 10.1.2013 was Rs.1,73,948/- and the accused has issued Ex.P-1 cheque towards discharge of his liability under the chit, that the said cheque came to be dishonoured for insufficient funds in the account of the accused and in spite of service of demand notice, the accused has failed to pay the amount of cheque and thereby committed the offence punishable U/s 138 of the Act.
9. The admitted facts of the case are that the accused was a subscriber of the complainant in chit group no.SCD-1 for Rs.2,00,000/-, that the accused was the successful bidder in 9th month and has received Rs.1,20,000/- from the complainant on 20.8.2009, that the accused has agreed to pay the remaining installments of chit, that the cheque at Ex.P-1 belongs to the accused and it bears his signature, that Ex.P-1 was dishonoured by the banker of the accused for insufficiency of funds in his account on 18.1.2013, that on 1.2.2013, the complainant has got issued legal notice demanding the accused to pay the amount of cheque and it was duly served upon him, that the accused has not replied the notice and not paid the amount of cheque to the complainant.
10. The accused has admitted most of incriminating evidence appearing against him as true during statement.
SCCH-14 6 CC No.21418/2013However, he has denied that he has not paid 20 installments of Rs.5,000/- each from 21.8.2010 to 21.3.2012, that he was in due of Rs.1,00,000/- and interest @18%p.a., and penal interest @3% p.a., totally amounting to Rs.1,73,948/-. He has further denied the issuance of Ex.P-1 cheque in favour of the complainant for Rs.1,73,948/- towards discharge of his liability. He has stated that he is not liable to pay the amount of cheque to the complainant.
11. The complainant has to prove the existence of debt or liability, issuance of cheque towards such debt or liability, dishonour of cheque within time, making of demand in writing for payment of amount covered under the cheque within 30 days from date of dishonour of cheque, failure of the accused to comply the demand within 15 days, filing of the complaint within one month from the date of accrual of cause of action. In this case, the accused has denied the existence of debt or liability, issuance of cheque in favour of the complainant towards discharge of debt or liability, but he has admitted the dishonour of cheque for insufficient funds in his account, the issuance of demand notice and service of such notice upon him, non payment of amount of cheque to the complainant within time. Admitted facts need not be proved. However, evidence of PW-1 and contents of Ex.P-1 to 5 establish that the cheque is drawn on Syndicate bank in favour of the complainant for Rs.1,73,948/-, that the cheque bears the signature of the accused and it was dated 10.1.2013, that the said cheque came to be dishonoured for insufficient funds in the SCCH-14 7 CC No.21418/2013 account of the accused on 18.1.2013, that the complainant has got issued legal notice on 1.2.2013 calling upon the accused to pay the amount of cheque and sent it by RPAD, that the said notice was duly served upon the accused on 2.2.2013.
12. The cheque was presented within 8 days from the date on it. Notice was issued within 14 days after dishonour of cheque. The notice was duly served on the accused on 2.2.2013. There was 15 days time for the accused to pay the amount. Said time period expired on 17.2.2013. The accused has not paid the amount. Then, cause of action for filing the complaint arose on 18.2.2013. There was one month time till 18.3.2013 to file the complaint. This complaint came to be filed on 4.3.2013 which is well within time. Thus, the complainant has complied all requirements of Sec.138 and 142 of the Act. Since, the complainant has discharged his primary burden, legal presumptions U/s 118 and 139 of the Act come into play. This Court has to believe that the cheque at Ex.P-1 was issued for consideration and towards discharge of legally enforceable debt or liability. Hon'ble Supreme Court has held in RANGAPPA v/s MOHAN case that existence of debt or liability is also a matter of presumption U/s 139 of the Act.
13. It is settled law that the presumptions U/s 118 and 139 of the Act are rebuttable presumptions. The accused has to rebut the presumptions by probable defence. He has to prove his defence by preponderance or probability. In this case, the accused has not adduced oral evidence. He has not entered the witness box SCCH-14 8 CC No.21418/2013 to prove his defence. However, he has got marked 3 notarized documents produced by the complainant during the cross examination of PW-1 as Ex.D-1 to 3. He has relied upon ruling reported in II (2014) BC 698 (SC) (Indus Airways Pvt., Ltd., & Ors., Vs., Magnum Aviation Pvt.,Ltd., & Anr.,). There is no dispute about principle of law that the accused need not enter the witness box to prove his defence and that his failure to give evidence is not a ground to convict him. Secondly, the accused has admitted that legal notice was duly served upon him on 2.2.2013. He has not issued reply to such notice. His failure to issue reply will adversely affect his defence, but it can not be a sole ground to hold him guilty.
14. The counsel for the complainant has argued that the complainant has examined PW-1 who is authorized representative and his evidence is in consonance with the averments of the complaint, that the complainant has produced Ex.P-1 to 6 which corroborate the evidence of PW-1 and collectively establish the averments of the complaint, that the complainant has complied all requirements of Sec.138 of the Act and the Court has to draw presumptions U/s 118 and 139 of the Act, that the accused has not entered the witness box to prove his defence and to disprove the case of the complainant, that Ex.D-1 to 3 are not helpful to establish the defence of the accused and on the hand, the said documents disclose that the accused has received the chit amount and agreed to pay Rs.1,55,000/- to the complainant with interest and penal interest, that except bare denials, nothing is elicited SCCH-14 9 CC No.21418/2013 from PW-1, that oral and documentary evidence produced by the complainant establish the case of the complainant, that the accused has failed to prove his defence by producing legal evidence, that there is no evidence that the accused has paid all installments and discharged his liability under the chit. Hence, he has sought for convicting and sentencing the accused.
15. The counsel for the accused has argued that the complainant has not proved the existence of debt by producing ledger extract, that in order to conceal true facts, ledger extract is not produced, that there is difference between copies of resolution produced by the complainant, that no such resolution copy is produced before the Court while filing the complaint, that PW-1 was not authorized to file the complaint and to depose on behalf of the complainant and as such the complaint is not properly presented, that admittedly, the accused has paid installments upto the date of 9th bid, that the accused has bidden the 9th chit for Rs.80,000/- as per Ex.D-1, that the complainant has paid the chit amount of Rs.1,20,000/- on 10.9.2009 to the accused and obtained his signatures on blank pronote and obtained two blank signed cheques, that the accused was not in due of Rs.1,55,000/- as on the date of Ex.D-1 and said amount was the total amount of all future installments, that Ex.D-3 is not chit agreement as stated, but it is guarantee agreement, that the complainant had to issue notice to guarantors in writing if the subscriber commits default, that the complainant has not produced any notice or correspondence made by him with the accused or his guarantors SCCH-14 10 CC No.21418/2013 regarding default in payment of amount. He has pointed out the admissions of PW-1 as to amount due from the accused, issuance of cheque in the house of accused in the month of December 2012 and argued that as per PW-1, the accused was in due of Rs.1,00,000/- towards amount of 20 installments, that all the installments have not become due and payable on a single day, but became due on the date of each installment, that the chit was ended on 21.3.2012 and if dividend amount is considered, the amount of due at the end of chit shall be less than Rs.1,00,000/-, that there was no agreement regarding payment of interest and penal interest and even if interest is added as stated by PW-1, total amount of interest shall not be more than Rs.54,000/-. He has drawn my attention to the cheque and shown that the contents of it are type written and argued that if the cheque was issued in the house of the accused, question of type writing its contents does not arise, that the form of the cheque clearly supports the contention of the accused that the cheque was obtained in blank at the time of disbursement of chit amount, that it was type written before it was sent for collection, that the cheque is misused by the complainant, that another signed cheque of the accused is available with the complainant, that the accused was not liable to pay the amount of cheque, that he has not issued Ex.P-1 cheque to the complainant, that since, existence of debt is not proved, offence punishable U/s 138 of the Act is not attracted. Hence, he has sought for acquittal of the accused.
SCCH-14 11 CC No.21418/201316. PW.1 has stated that he is authorized representative of the complainant. Ex.P6 is copy of resolution which corroborates the oral evidence of PW.1 regarding such authorization. A copy of resolution is also produced before the court which is unmarked. It bears the same date as Ex.P6, but there is difference in contents of said documents. It is to be noted that the Ex.P6 and the other xerox document are copies of resolution. Mere difference of their contents is not sufficient to hold that PW.1 is not an authorized person and the complaint is not properly presented. The ruling relied upon by the accused is pertaining to a case of private persons. In this case, the complainant is a registered company. It shall be represented by a real person. Ex.P6 is sufficient to hold that PW.1 is authorized to file the complaint and to give evidence regarding the matter. Non production of copy of resolution at the time of filing complaint along with other document is not a ground to hold that the complaint is not properly presented. The complainant can issue any number of copies of resolution on a single day. Ex.P6 and xerox copy disclose that they are two different copies of resolution. Therefore, I am of the opinion that the argument of the counsel for the accused has no merit regarding authority of PW.1 to file complaint and to give evidence.
17. Evidence of PW-1, his admissions in cross examination and contents of Ex.D-1 disclose that the accused has paid 9 installments before he participated in the bid. The amount of each installment is Rs.5,000/-. The chit was for Rs.2,00,000/-. The chit was bidden for Rs.80,000/- and balance amount of SCCH-14 12 CC No.21418/2013 Rs.1,20,000/- were paid to the accused on 10.9.2009. Out of Rs.80,000/-, an amount of Rs.70,000/- was distributed as dividend among 40 members @Rs.1,750/-. The subscriber has to pay the next installment by deducting the dividend amount. PW-1 has specifically stated as under in his examination-in-chief in para No.4:
"I submit that after borrowing the chit amount of Rs.1,20,000/-(Rupees one lakh Twenty thousand only), the accused has not paid the monthly installments from the date on 21.08.2010 to 21.03.2012 for a period of 20 months at an installment of Rs.5,000/- per month. The accused is due of Rs.1,00,000/- plus interest at the rate of 18% p.a., and penal interest at the rate of 3% p.a., Totally a sum of Rs.1,73,948/- is due".
He has stated in cross examination as under:
"It is true to suggest that if a member has committed default in payment of a single installment, we will not allow him to participate in the bid".
"We have demanded the payment of amount in writing to the accused and his sureties. There is no impediment for me to produce such correspondences".
"The accused has issued Ex.P1 cheque in the end of December 2012 in his house situated near Ulsoor lake. One of our staff members went to the accused at that time. I don't remember his name, but I have record to that effect. The amount of cheque SCCH-14 13 CC No.21418/2013 includes the amount due and interest on it from the date of bidding till the date of cheque. Interest is calculated on the amount of Rs.1,00,000/-".
"We will submit a statement every year and every month to Registrar of chits in standard form. We have submitted statement in respect of accused also. I can produce copy of such statement before the court".
The above evidence, admissions and answers given by PW-1 clearly reveal that the accused has not paid 20 installments of Rs.5,000/- each for the period from 21.8.2010 to 21.3.2013 totally amounting to Rs.1,00,000/-. As per Ex.D-2, the accused has agreed to pay interest @18% p.a., There is no agreement as to payment of penal interest @3% p.a., Hence, evidence of PW-1 regarding payment of penal interest is unacceptable. However, the promissory note at Ex.D-2 authorizes the complainant to levy interest @18% p.a., on due amount. It is rightly argued by the counsel for the accused that Rs.1,00,000/- was not due since 21.8.2010, but total amount of installments due on 21.3.2012 was Rs.1,00,000/-. The accused has contended about distribution of dividend, but the accused being a defaulter, can not claim dividend as a matter of right. Then, total amount of installments due as on 21.3.2012 was Rs.1,00,000/-. Interest shall be calculated on the due amount and not on entire amount. The amount due on 21.3.2012 was Rs.5,000/- and on the next date, it will be Rs.10,000/- and so on. If we calculate interest on the due amount @18% p.a., total amount of interest upto 21.3.2012 comes to SCCH-14 14 CC No.21418/2013 Rs.15,000/-. So, gross amount payable by the accused as on 21.3.2012 was Rs.1,15,000/-. PW-1 has categorically stated that the cheque at Ex.P-1 was issued in the end of December 2012. The gap between 21.3.2012 and the alleged date of issuance of cheque is about 9 months. If we calculate interest @18% p.a., on Rs.1,15,000/- for 9 months, it comes to Rs.15,525/-. Then, total dues of the accused would be Rs.1,30,525/-. Even if the interest is calculated @21% p.a., the total dues of the accused shall not exceed Rs.1,50,000/-. This makes the Court to hold that the accused was not in due of Rs.1,73,948/- as on the date of cheque. The amount shown in the cheque is quite imaginary. Hence, I am of the opinion that the presumption U/s 139 of the Act stands rebutted.
18. The burden to establish the existence of debt or liability now shifts upon the complainant. He has not made any efforts to prove that the accused was in due of Rs.1,73,948/- as on the date of cheque by producing independent evidence. PW-1 was categorically asked regarding ledger extract and copies of previous notice and correspondence made with the accused and his sureties. The complainant has not produced ledger extract. He has not made out as to how the amount of cheque is arrived. Hence, I am of the opinion that the amount mentioned in the cheque is imaginary and the accused was not liable to pay the said amount to the complainant as on the date of cheque.
SCCH-14 15 CC No.21418/201319. Secondly, the cheque is type written. If it is stated that the cheque was issued in the office of the complainant, then the matter would be different. PW-1 has stated that the cheque was issued in the house of the accused. If that was so, question of contents of cheque being type written does not arise. This clearly indicates that the cheque was obtained in blank and it was filled up later. The contention of the accused that the complainant has obtained his two blank cheques at the time of payment of chit amount can not be brushed aside. Issuing a signed cheque is an authority to fill up the cheque, but there must be evidence to prove the existence of debt or liability. If the complainant were able to prove that the accused was liable to pay Rs.1,73,948/- as on the date of cheque by producing ledger extract, then the matter would be different. Here, the complainant has failed to produce material document even though he was reminded by the accused. It is contended by the accused that he has paid entire amount to the complainant. He has not produced any receipt or bank statement regarding payment all installments of chit. Hence, his defence as to discharge of entire liability is unbelievable. The calculation shown above clearly reveals that the accused was in due of Rs.1,30,525/- as on the date of issuance of cheque, but the cheque is for Rs.1,73,948/-. The accused can not be partially convicted like partial decree in civil suit. The failure of the complainant to prove the liability of the accused to pay the amount of cheque certainly goes in favour of the accused. When there was no liability on the accused to pay amount of cheque, dishonour of cheque, issuance of notice, its service and non payment of amount are of no avail.
SCCH-14 16 CC No.21418/2013Non payment of amount of cheque by the accused does not attract penal action U/s 138 of the Act. I am of the opinion that the complainant has failed to prove this point. The accused has succeeded to prove his defence by preponderance of probability. The legal presumptions U/s 118 and 139 of the Act are successfully rebutted by the accused. The act of the accused is not an offence within the meaning of Sec.138 of the Act. The complainant is at liberty to proceed against the accused for recovery of amount by appropriate proceeding subject to limitation. The accused has not committed the offence punishable U/s 138 of the Act and he is entitled for acquittal. Hence, I answer the point in negative.
20. POINT NO.2: In view of above discussion and finding, I pass following:
ORDER The accused is found not guilty and is acquitted U/s 255(1) of Cr.P.C. for the offence punishable U/s 138 of the Negotiable Instruments Act.
The bail bond of accused stands cancelled.
(Dictated to the Stenographer, directly on computer and then corrected by me and pronounced in the open court, on this the 23rd day of JUNE 2016.) BASAVARAJ CHENGTI XL ACMM, BANGALORE.SCCH-14 17 CC No.21418/2013
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:
PW.1 - P.Prakash
LIST OF DOCUMENT MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P.1 - Cheque
Ex.1(a) - Signature of the accused
Ex.P2 - Bank endorsement
Ex.P3 - Copy of legal notice
Ex.P4 - Postal receipt
Ex.P5 - Postal Acknowledgments
Ex.P6 - Complaint
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE: NIL LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:
Ex.D1 - Copy of chit auction minutes
Ex.D2 - Promissory note
Ex.D3 - Agreement executed
XL ACMM,
BANGALORE.
SCCH-14 18 CC No.21418/2013
Dt; 23.06.2016
Order pronounced in open court
vide separate judgment.
ORDER
The accused is found not guilty and
is acquitted U/s 255(1) of Cr.P.C. for the
offence punishable U/s 138 of the
Negotiable Instruments Act.
The bail bond of accused stands
cancelled.
XL ACMM,
BANGALORE.