Bangalore District Court
And To Proceed In Accordance With Law vs Has Committed An on 23 September, 2021
CC NO: 257-2018
IN THE COURT OF THE VI ADDL. SMALL CAUSES
JUDGE & XXXI ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY (SCCH-2)
DATED THIS THE 23rd DAY OF SEPTEMBER 2021.
PRESENT: Smt. Shainey. K.M., BAL.LLB
VI Addl. Small Causes Judge
& XXXI ACMM, Bengaluru.
C.C. NO.257 OF 2017
JUDGMENT U/S 355 OF Cr.P.C.1973
1. Sl. No. of the case : C. C. No.257 OF 2017
2. The date of commission of
the offence : 08.12.2016
3. Name of the Complainant: Sri. Rathnakar Shetty,
S/o Late Thejappa Shetty,
Aged about 54 years,
Residing at No. 37,
Thathaguni,
Kanakapura Main Road,
Bangalore-560078.
(By Sri. Aravind Reddy,
Advocate)
4. Name of the Accused: Sri. Surendra,
S/o Thejappa Shetty,
R/a, No.115, 2nd Main,
SCCH-2 2 CC.257 OF 2017
Royal Merdian Layout,
Begur, Bengaluru-560068.
(By Sri.Munegowda M.,
Advocate.)
5. The offence complained : U/sec 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 acquitted
8. Date of such order : 23-09-2021.
for the following;
JUDGMENT
This is the complaint 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 is 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.
SCCH-2 3 CC.257 OF 2017
2. The brief facts of the Complainant's case is as follows:
It is the contention of the Complainant that, both accused and complainant hails from Kundapura, South Canara District. Accused has borrowed hand loan of Rs.15,00,000/- in the month of June, 2016 to run his bakery and hotel business and promised to repay said amount within 2 months. After completion of 2 months accused did not repay the loan amount and pleaded for some more time till October, 2016.
The accused has issued a cheque bearing no: 387987 dtd: 17.10.2016 for Rs.15,00,000/- drawn on Vijaya Bank, M.S. Nagar Branch Bengaluru. That on 17.10.2016, the complainant has presented the cheque for encashment through his banker Indian Overseas Bank, but same was dishonoured with a memo dtd: 18.10.2016 stating "FUNDS SCCH-2 4 CC.257 OF 2017 INSUFFICIENT". That on 17.11.2016, the complainant has issued a legal notice to accused through RPAD and it was served on accused, however, the accused neither replied the legal notice nor repaid the loan.
With these averments the complaint is filed.
3. On being served the summons, the accused put appearance before the court through his counsel and got released on bail. Plea of the Accused was 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. Accordingly, the application was allowed and the permitted him to cross-examine Complainant/PW-1.
4. In support of his case, complainant got examined himself as PW-1 and documents were marked at SCCH-2 5 CC.257 OF 2017 Ex.P.1 to Ex.P.10. 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 has not led evidence on his behalf. ExD:1 and 2 are marked in cross examination of Pw:1.
5. Heard arguments of learned counsel for complainant. Learned counsel for Accused has submitted written argument with list of decisions. Perused the material placed on record.
6. Now, following points that arise for my consideration:
POINTS
1. Whether Complainant proves beyond all reasonable doubt that SCCH-2 6 CC.257 OF 2017 Accused has committed an offence punishable u/Sec.138 of N.I Act?
2. Whether the accused has rebutted presumption as contemplated in Sec.139 of N.I. Act?
3. What order?
7. My findings to the above points are:
Point No.1 : In the Negative.
Point No.2 : In the Affirmative Point No.3 : As per the final order for the following;
REASONS
8. Point No.1 and 2: To avoid repetition of facts and for sake of convenience, these points are taken up for common discussion as hereunder.
9. This is a private complaint against the accused for the offence punishable u/sec 138 of NI Act. SCCH-2 7 CC.257 OF 2017
10. The Complainant-Ratnakar Shetty in proof of his contention, got examined himself as P.W.1, who filed affidavit in-lieu of oral examination-in-chief. P.W.1 has deposed in consonance with the averments of the complaint. According to P.W.1, the cheque-Ex.P1 has been issued by the Accused towards repayment of hand loan. The cheque, on presentation returned as "Funds Insufficient" as per the bank endorsement produced at Ex.P-2. Hence, he got issued legal notice through RPAD which is produced at Ex.P-3, vide postal receipt marked at Ex.P-4, which was served on the Accused as per Ex.P-5 Postal Acknowledgment. Ex.P.6 reply notice of the accused and he denied the alleged loan transaction. In reply notice accused stated that complainant was running a Chit and accused herein is also one of the members in said Chit for total consideration of Rs 5 lakhs and cheque was issued to SCCH-2 8 CC.257 OF 2017 the complainant for the security of said transaction at the time of becoming member of Chit transaction. After the closure of chit, the cheque in question was retained by the complainant illegally and misused the same with an intention to extort money from the accused.
11. Another, defence set by the accused is that the complaint is not maintainable and second condition of sec 138 of NI Act is not complied by in this case.
12. Learned counsel for the accused relied following decision in support of his arguments:
1. 2014 (2) SCC 424, Kamalesh Kumar Vs State of Bihar.
2. Crl. Rev. 1441/2015, High court of Allahabad Surender BAnjara Vs State of UP.
3. 2013 (3) Crimes 246 SC. Vijay Vs Lakshman & another.SCCH-2 9 CC.257 OF 2017
4. Crl. Appeal no: 1147-2016. Abhay Kumar Jain Vs Pankaj R Makkanna.
5. 2009 Cr.L.J 3777. Sanjay Mishra Vs Kanishka Kapoor @ Nikki & another.
6. 2016 Crl.L.J 1267. Venkatesh SAdanand Pai Vs Kanchan A Kakodkar & another.
7. 2015 (1) DCR 642. B Shivaram Vs M.V Venkatesh.
8. AIR 2019 SC 1983 Basalingappa VS Mudibasappa.
9. 2015 AIR SCW 64. K.Subramani Vs K. DAmodara Naidu.
10. 2014 (3) Crimes 291 (SC). Ramadas Vs/ Krishnananda.
11. 2016 (5) KCCR 1341. Threja vs. Jayalaxmi.
13. In this case, the accused has not adduced evidence, however, Ex.D:1 and 2 are marked in cross examination of Pw:1 as he admitted the contents of those documents. Firstly, the accused has questioned the financial capacity of complainant to lend Rs 15 SCCH-2 10 CC.257 OF 2017 lakhs as contented in case. Secondly, it is the specific plea of accused that the case not maintainable as the demand notice has been issued to accused, 32 days after the receipt of intimation received by the bank regarding dishonour of cheque.
14. With this evidence of Complainant and defence of Accused, 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, SCCH-2 11 CC.257 OF 2017 the same has been issued for discharge of any debt or other liability.
15. On reading the law laid down in decision referred supra, it is necessary to point out the mandatory presumption to be raised in respect of negotiable instrument as contemplated under NI Act. Indisputably, a mandatory presumption is required to be raised in terms of Section 118 (b) and Section 139 of the Act. The proviso to section 138, however is all important and stipulates three distinct conditions precedent, which must be satisfied before the dishonor of a cheque ccan constitute an offence and become punishable. Section 138 of the Act has three conditions viz.:
1. The first condition is that the cheque ought to have been presented to the bank within a pe-
riod of 3 months from the date on which it is SCCH-2 12 CC.257 OF 2017 drawn or within the period of its validity which- ever is earlier.
2. The second condition is that the payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.
3. The third condition is that the drawer of such a cheque should have failed to make pay- ment of the said amount of money to the payee or as the case may, to the holder in due course of the cheque within 15 days of the receipt of the said notice.
SCCH-2 13 CC.257 OF 2017
16. it is only upon the satisfaction of all the 3 conditions mentioned above and enumerated under the proviso to section 138 as clauses (a) (b) and (c) thereof that an offence u/sec 138 can be said to have been committed by the person issuing the cheque.
17. 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 debt. These presumptions are mandatory provisions that are SCCH-2 14 CC.257 OF 2017 required to be raised in case of negotiable instruments.
18. 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?.
19. Keeping in mind the position of law as stated supra, let me deviate to appreciate the evidence of PW-1 deposed during cross-examination.
20. Limitation: For the purpose of limitation, in so far as legal notice is concerned, it is to be served within 30 days of the receipt of information by the drawee from the bank regarding the return of cheque as unpaid. Therefore, after the cheque is returned unpaid, notice has to be issued within 30 days of the receipt of information in this behalf. That is the period of limitation provided for issuance of legal notice SCCH-2 15 CC.257 OF 2017 calling upon the drawer of the cheque to make payment. After the sending of this notice 15 days time is to be given to the noticee from the date of receipt of the said notice to make the payment, if that is already not done. If noticee fails to make the payment, the offence can be said to have been committed and in that event cause of action for filing the complaint would accrue to the complainant and he is given one month time from the date of cause of action to file the complaint.
21. Applying aforesaid principles, in the present case, this court find that Ex.C:1 the cheque in question was presented to bank on 17.10.2016 and it has been dishonoured for funds insufficient as per memo dtd: 18.10.2016. However, the complainant sent the Demand notice on 17.11.2016 after the expiry of the 30 days and it is evident from perusal of SCCH-2 16 CC.257 OF 2017 Ex.C:4, the postal receipt. Admittedly, in Ex.C:3, the date of notice is mentioned as 15.11.2016, but was dispatched by complainant on 17.11.2016. October is the tenth month of the year in the Julian and Gregorian calendars to have a length of 31 days.
22. Pw:1 deposed that dishonour of cheque was intimated to him on 20.10.2016 and he received memo dtd: 18.20.2016 on 20.10.2016. The crucial question is as to on which date the complainant received the information about the dishonour of the cheque. As per the complainant he received the information about the dishonour of the cheque on 20.10.2016, however, the accused has disputed the same. To substantiate his contention complainant has not placed any positive evidence before the court, nor examined the bank official to substantiate his SCCH-2 17 CC.257 OF 2017 contention. Moreover, he himself does not know when he did receive the intimation from the bank.
23. The evidence of Pw:1 is reproduced here under:
¤¦ 2 ¨ÁåAPï ªÉĪÉÆzÀ°è ZÉPï ªÁ¥Á¸ÁìzÀ ¢£ÁAPÀ 18.10.2016 JAzÀÄ §gÉ ¢zÀÄÝ D zÁR¯ÉAiÀÄ£ÀÄß ¤ÃªÀÅ ¨ÁåAQ¤AzÀ AiÀiÁªÁUÀ ¹éPÀj¹¢Ýj JAzÀÄ PÉýzÀ ¥Àæ±ÉßUÉ ¸ÁQë AiÀiÁªÁUÀ ¹éÃPÀj¹zÉÝÃ£É JAzÀÄ ºÉüÀÄ £É£É¦®è J£ÀÄßvÁÛgÉ. ¨ÁåAPÀ ªÉĪÉÆzÀ°è £ÀªÀÄÆ¢¹gÀĪÀ ¢: 18/10/2016 gÀAzÀÄ £Á£ÀÄ D zÁR¯É ¹éÃPÀj¹zÉÝÃ£É JAzÀgÉ EgÀ§ºÀÄzÀÄ J£ÀÄßvÁÛgÉ. ಬಬಬಕ ªÉĪÉƪÀ£ÀÄß PÉÆlÖ ¨ÁåAPÀ C¢üPÁjAiÀÄ£ÀÄß PÀgɬĹ ¸ÁQëAiÀÄ£ÀÄß ºÉý¸À§ºÀÄzÁ JAzÀgÉ £Á£ÀÄ ¥ÀæAiÀÄw߸ÀÄvÉÛÃ£É J£ÀÄßvÁÛgÉ. ಬಬಬಕ ªÉĪÉƪÀ£ÀÄß ¹éÃPÀj¹zÀ 32 ¢£ÀUÀ¼À £ÀAvÀgÀ £Á£ÀÄ PÁ£ÀÆ£ÀÄ w¼ÀĪÀ½PÉ ¥ÀvÀæªÀ£ÀÄß CAzÀgÉ ¢: 17/11/2016 gÀAzÀÄ ¤¦:4 CAZÉ gÀ²Ã¢AiÀÄ ¥ÀæPÁgÀ PÀ½¹zÉÝÃ£É JAzÀgÉ £À£ÀUÉ £É£À¦®è.
24. Ex.C:2, memo clearly reveals that it was issued on 18.10.2016. I have calculated the days from 18.10.2016 to 17.11.2016. Thus, it is clear before the court that complainant has issued demand notice SCCH-2 18 CC.257 OF 2017 after expiry of 32 days, thus, he has not complied second condition of provision of sec 138 and 142 of NI Act and it is fatal to case of complainant. My reason is supported by the decision of hon'ble apex court of India reported in 2014 (2) SCC 424 in a case between Kamalesh Kumar Vs State of Bihar and Crl. Revision no: 4441-2015 of honble Allahabad High court in case between Surendra Banjara Vs State of UP and another.
25. Financial capacity: Another defence of the accused is that complainant has no sufficient means to lend amount of Rs. 15 lakhs to accused. Pw:1 has deposed that he had pledged his gold article to accumulate the money for the purpose of lending money to accused. To substantiate his contention he has produced ExP:10, the ledger book extract. The loan disbursement dated 8.8.2016 is not relevant to SCCH-2 19 CC.257 OF 2017 this case, because the loan transaction in dispute was took place in the month of June, 2016, which is much prior to 8.8.2016. Ex.P:10 are copy of 2 General ledgers from 1) 9.6.2016 to 6.4.2018 and 2) 8.8.2016 to 11.4.2017. The Account ID no: 1568034620000038 is not helpful to the complainant to prove his financial capacity as he took gold loan from the bank after the alleged loan transaction with the accused.
26. Another account no: 156803462000030, shows that he borrowed Rs 2,75,000/- from the bank by pledging his gold article. However, quantum of amount in the alleged loan transaction is Rs 15 lakhs.
27. In cross examination, Pw:1 admitted that after 2014 he did not file IT return nor paid income tax to Government. Further, his admission clearly reveals that he suffered heavy loss in his Potato business and so, he discontinued said business, thereafter. Accused SCCH-2 20 CC.257 OF 2017 herein sells Pan Beeda in a shop. Pw;1 clearly admitted that he did not enquire the personal background of the accused prior to alleged loan transaction. All these facts creates doubt in the case of complainant.
28. Oral and documentary evidence of Pw:1 is not sufficient to hold that, the complainant is financially sound enough to lend Rs 15 lakhs to accused. Moreover, the demand notice was also issued to accused herein 32 days after receipt of intimation from the bank regarding the dishonour of cheque. My reason is supported by the decision of Hon'ble Supreme Court reported in 2007 AIR SCW 6736 in the case between John K. John Vs. Tom Varghese and Another and the decision of hon'ble High court of Karnataka reported in a case between 1. Shankara Narayana V/ K. Annappa Prabhu in Crl. Appeal SCCH-2 21 CC.257 OF 2017 no:987-2011 dtd; 2.12.2019. 2) Smt. Shashikala Vs. Sri Nyatappa in Crl.A no: 901-2010 dtd:
22.9.2020. 3) Ashok Tatappa Kotiwale Vs. Sevantha Sukumar Bagi in Crl.A no: 100026-
2015 dtd; 2.12.2020. 4) Yallappa Basappa Hadapad Vs. Nabisab Rajesab Nadaf, in Crl.A no: 100059-2014 dtd: 20.11.2010. 5) T. Venkataramaiah Vs. Esha G S/o Gangadhar in Crl.A no: 498-2011 dtd. 25.9.2020, and 5) Basalingappa v. Mudibaappa, 2019 (5) SCC 418, AIR 2019 SC 1983.
29. Based on evidence led by defence and material placed on record, this court is inclined to hold that the accused has raised a probable defence and complainant failed to prove his financial capacity and also non compliance of second condition of sec 138 of NI Act. Therefore, the complainant is failed SCCH-2 22 CC.257 OF 2017 establish that the complaint is within time and also advancement of loan and his financial capacity to lend money by placing cogent and corroborative evidence. Hence Point no:1 is answered in the negative and point no:2 in the affirmative.
30. Point no:3 : For the reasons discussed above in Point no:1 and 2, I, proceed to pass the following:
ORDER Acting U/sec 255 (1) of Cr.P.C, the accused is not found guilty and therefore, acquitted him for the offence punishable under Section 138 of the Negotiable Instrument Act.
The bail bond of accused and that of surety is hereby stands cancelled. (Dictated to the stenographer through laptop, corrected and signed by me and then pronounced in open court on this the 23rd day of September 2021).
(SHAINEY K.M.) VI Addl. Small Causes Judge & XXXI ACMM, Bengaluru.SCCH-2 23 CC.257 OF 2017
ANNEXURE LIST OF WITNESS EXAMINED ON BEHALF OF THE COMPLAINANT:
PW1 : Sri. Rathnakar Shetty LIST OF DOCUMENTS MARKED ON BEHALF OF COMPLAINANT:
Ex.P.1 : Original Cheque dt:31.12.2017.
Ex.P1(a) : Signature of accused.
Ex.P.2 : Cheque Return Memo
Ex.P.3 : Copy of Legal notice
Ex.P.4 : Postal receipt
Ex.P.5 : Postal Acknowledgment.
Ex.P.6 : Reply notice issued by the
accused.
Ex.P.7 : Unserved courier cover.
Ex.P.8 : Unserved notice.
Ex.P.9 : Unserved postal cover.
Ex.P.10 : Bank statement
LIST OF WITNESS EXAMINED ON BEHALF OF THE ACCUSED:
-NIL-
LIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
Ex.D1 : Invoice
Ex.D2 : Note book
(SHAINEY K.M.)
VI Addl. Small Causes Judge
& XXXI ACMM, Bengaluru.