Bangalore District Court
Srinivas Naidu vs State By Central Crime Branch on 30 May, 2020
1
Crl.Appl No.1093/2016
IN THE COURT OF LXIX ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE (CCH 70)
Present: Sri Gururaj Somakkalavar, M.A.,LL.B.,
LXIX Additional City Civil and
Sessions Judge, Bengaluru.
Dated this the 30th day of May, 2020
Crl.Appeal No.1093/2016
Appellant : Srinivas Naidu
S/o Muniswamy,
Aged about 51 years,
R/at No.20, Pavithra Apartments,
8th Main, 9th Cross, Malleshwaram,
Bengaluru.
[By Sri.Venkatramana, Advocate]
V/s
Respondent : State by Central Crime Branch
(Fraud and Mischief) N.T. Pete,
Bengaluru.
Represented by P.P. Bangalore.
: JUDGMENT:
Appellant/accused has assailed the legality and correctness of his conviction for the offence punishable U/Secs.38, 39 and 41 of Karnataka Money Lenders Act and U/secs 3 and 4 of Prohibition of Charging Exorbitant Interest Act, 2004 and his sentence to undergo SI for three months for the offence 38 of KML Act and to pay fine of Rs.5,000/- and if 2 Crl.Appl No.1093/2016 he fails to deposit the said fine amount, then he shall under SI for one month and SI for one month for the offence u/sec 39 of KML Act and he shall deposit amount of Rs.1,000 and if he fails to deposit the fine amont, he shall under go SI for 15 days, and further he shall undergoe SI for one year for the offence u/sec 4 of Charging Exorbitant Interest Act, 2004 and he shall deposit fine amount of Rs.10,000 and if he fails to deposit the said amount, then he shall under go SI for one month through judgment dated 24.08.2011 in C.C.No.31110/2011, on the file of CMM-I, Bengaluru City.
The parties are referred to their original ranks.
2. Essential material facts lead to this appeal succinctly is as follow:-
Respondent/complainant police who will be herein after referred as 'complainant' registered criminal case against accused for the offence punishable u/secs. 38, 39 and 41 of Karnataka Money Lenders Act and U/secs 3 and 4 of Prohibition of Charging Exorbitant Interest Act, 2004. It is the case of the prosecution that on 01.08.2011 by Mr. Praveen bin Late Shivaji, 38 years, resident of 1 st Main, Harappana Halli, Jigani Post, Bengaluru against the appellant, before the Joint Commissioner of Police, Bengaluru City, Bengaluru, alleging that he know the appellent since last 8 years and last 2 years back, he has taken loan of Rs.10,00,000/- from appellant for interst at 10% per month and for security he has 3 Crl.Appl No.1093/2016 given 10 to 15 blanks signed cheques of him and his brother S Mohan drawn on Federal Bank and ING Vysya Bank and taken blank signed on stamps paper and till date of complaint he has repaid approaximately Rs.15,00,000/- to the appellant, the appellant has gone to his house and harassed him for exhorbitent interest. Hence filed complaint beofore joint commissioner of Police, Bangalore City, Bangalore, and in turn it has been referred to Respondent police for investing, during the investigation, the respondent policle has arrested the appellant and thereby searched the his house and seized certain letters, Carola Car bearing No.KA-04-MC 7553 and Cash of Rs.75,000/- and reported the same befor the trial court. The Hon'ble 1st ACMM Bangalore conviction order dated 24.08.2016 passed CC No.31110/2011 acting u/sec 248(2) of the Criminal Procedure Code, the appellant has convicted for the offence punishable under sec 38 and 39 of Karnataka Money Lenders Act and Under Sec 4 of Prohibition of Charging Exorbitant Interest Act, 2004, that the appellant shall undergo SI for three months for the offence punishable u/sec 38 of Karnataka Money Lenders Act and he shall deposit fine amount of Rs.5,000/-and if he fails to deposit the said fine amount, thenhe shall undergo SI for one month for the offence punishable u/sec 39 of Karnataka Money Lenders Act and he shall deposit fine amount of Rs.1,000/- and if he fails to deposit the said fine amount, then he shall undergo SI for 15 days. That the appellant shall undergo SI for one year 4 Crl.Appl No.1093/2016 for the punishable u/sec 4 of Prohibition of Charging Exorbitant Interest Act, 2004 and he shall deposit fine amont of Rs.10,000/- and if he fails to deposit the said amount, then he hall undergo SI for one month. The Trial Court after full pledged trial has passed the impugned judgment and convicted the accused in the above manner through impugned order of sentence.
3. Feeling aggrieved and dissatisfied with the above nature of verdict of court below, accused has preferred instant appeal. Accused in his appeal memo specifically contended that the conviction order dated 24.08.2016 passed in CC No.31110/2011 by the 1 st ACMM Bangalore, deserves to be set aside as the same is against law. The respondent police has not produced nor exhibited any document to show that the appellant was doing money lending business without obtaining proper licence and thereby he is collecting 10% monthly interest as alleged exhorbitent interest. These aspect has been fully ignored by the Trial court while passing impugned order. Hence the same is liable to be set aside by this Hon'ble Court by allowing the above Appeal. The trial court has recorded only three witness i.e. Mr.S Praveen C.W- 1 (PW-1), Chetan Rao Jadav C.W-4 (PW-2), Srinivasamurthy C.W.-2(P.W-3) the witness Mr.Chetan Rao Jadav C.W-4 (P.W-
2) has not supported the prosecution and turned as hostile witness, as the prosecution has failed to get the other witness including police witness. The learned Magistrate has not 5 Crl.Appl No.1093/2016 looked into the cross examination of PW. 1 who has clarly admitted in his cross-examination that he do not know when he has obtained the loan from the appellant, there is no document to show that the complainant has repaid the amount to the extent of Rs. 15 lakhs and he do not have any receipt for having paid interest at 10% p.a. and loan amount. The fact is that PW. 1 availed loan of Rs. 10 lakhs and executed the documents in favor of the appellant and when the appellant has demanded for repayment, he has filed false case against him in order to avoid the repayment of said amount. The trial court has erred in coming to conclusion and passing the impugned judgment. Trial Court has not appreciated the evidence and documents on record in its proper perspective, the trial court passed the judgment without assigning any proper reasons. With these amongst other grounds the appellant prays to set aside the impugned judgment and acquit him as per law.
4. Heard the argument and perused the papers and also perused the citation relied by the counsel for the appellant.
5. In the light of challenge of impugned judgment by accused and above noted materials, following points fall for decision making of this court:-
1. Whether the complainant has proved that 6 Crl.Appl No.1093/2016 the accused has committed the offence punishable u/sec. U/Secs. 38, 39 and 41 of KML Act and u/secs. 3 and 4 of Prohibition of Charging Exorbitant Interest Act, 2004 ?
2. Whether the impugned judgment and order of sentence passed by the learned Magistrate is called for interference?
3. What order?
6. This court upon re-appreciation of available materials in the file with reference to prevailing law of land, give finding to the above points as follow:-
POINT NO.1 In negative
POINT NO.2 In affirmative.
POINT NO.3 As per final order, on the
following;
:REASONS:
7. POINT NO.1 AND 2 : I have perused the entire material placed before this court. The respondent police filed charge sheet against present appellant for the offence punishable u/sec. 38 and 39 of Karnataka Money Lenders Act and u/sec. 3 and 4 of the Karnataka Prohibition of Charging Exorbitant Interest Act 2004 on the basis of the complaint filed by one Praveen/CW.1 before the Joint Commissioner of Police, Bengaluru. It is alleged in the complaint that CW. 1 know the accused since last 8 years and around 2 years back he took loan of Rs. 10 lakhs from the 7 Crl.Appl No.1093/2016 accused, the accused lend said amount with interest at the rate of 10% p.m and as a security he has given 10-15 blank signed cheques and he has also given the stamp papers of his brother S.Mohan and the complainant had paid Rs. 15 lakhs to the accused, but inspite of that the appellant went to complainant`s house and harassed him for exorbitant interest. Hence he filed the complaint against the accused.
8. On the very complaint the CCB fraud and Mischief investigated the matter and filed the charge sheet against the accused for the above offences and cited 14 witnesses, out of which 3 witnesses were examined to prove the case of the prosecution and Ex.P.1 to P.23 were marked. Subsequently 313 statement of the accused is recorded and there is no evidence on behalf ot he accused. After the trial the trial court convicted the accused for the offence u/sec. 38 and 39 of KML Act and section 41 of Karnataka Prohibition of Charging Exorbitant Interest Act 2004 and he was sentenced to undergo punishment as stated above.
9. The prosecution examined CW. 1 complainant to prove its case and he was cross examined at length by the counsel for the accused where PW. 2 the witness to the recovery panchanama turned hostile. PW. 3 another witness for recovery panchanama has supported the case of the prosecution. The main allegation is that the accused lend money to the complainant on exorbitant interest at 10% and to 8 Crl.Appl No.1093/2016 recover the said amount he has harassed the complainant. It is also alleged that the accused has no proper license for money lending and without the licence he has illegally lending money for interest. As per the allegation the prosecution has to prove that the accused lending money for interest without proper licence. Subsequently he is charging exorbitant interest in violation to the provisions enshrined under Karnataka Prohibition of Charging Exorbitant Interest Act 2004. Firstly to attract sec 38 and 39 of KML Act, he has molested or harassed C.W-1. The entire case of the prosecution rests on the evidence of CW-1 and the recovery from the house of accused. On these factors whether the prosecution has been able to prove the case as held by the trial court is to be discussed herein. The trial court has completely rests its finding on all suggestions put up by the counsel for the accused during the cross examination of PW-1 and drawn interference on these suggestions that accused is doing money lending business without any proper license and also charged the exorbitant interest. Since the complete case relied on the evidence of C.W-1 the evidence of CW-1 has to be appreciated in this appeal. It is relevant here to mention that during the raid on the house of the accused the police has recovered some of the material documents which are marked as Exhibits mainly Ex.P4, 5 to 7, 10, 11, 12 and 18 to 22. These were the material documents on which the trial court comes to conclusion that the accused is doing 9 Crl.Appl No.1093/2016 money lending business. However during the cross examination, CW-2 as deposed some of the important admissions. Those are relevant to be appreciated in this appeal. PW1 deposed that he came to know about the accused from one lady and he has came to know all these from the lady when he was purchasing vegetable in the market and he does not know whereabouts of that lady. Further he has admitted that there are some corrections in Ex.P.4 but he does not know who has done those corrections in Ex.P4 and he has specifically admitted that there is no loan document to show that there is a transaction between accused and PW-1 and he has specifically admitted the fact that there is no record or document to show that he has returned the said amount which he borrowed from the accused and he deposed that he does not remember the date on which he has borrowed the said amount. Further he has also deposed that he does not remember when he has bought the stamp paper. One of the important admission during the cross examination is that complainant borrowing money from the accused since 2002 and he has no record to show that he has borrowed money of Rs.6,00,000 and 9,00,000 from the accused. He also counters that Ex.P.10 wherein is specifically admits he does not know when he has signed Ex.P10. He has admitted the fact that he has not given any blank cheque or on Demand Promissory Note and signed stamp papers in the year 2010 to the accused.
10Crl.Appl No.1093/2016
10. He has specifically admitted that Ex.P5 and 8 are not related to the present transaction and these documents do not contain the name of accused. He also admitted the fact that he has not given any notice through his advocate regarding charging of exorbitant interest by the accused. The another important admission is regarding Ex.P10. He has admitted the fact that there is no mention of address in Ex.P10 and Ex.P10 was purchased on 05.08.2003 and he has admitted the fact that it is not possible to use the said stamp paper which is bought in 2003 can be used in 2010. Further he has deposed that he does not know the name of three boys who has threatened him, he has no document to show that he has paid money to the said boys. He has no document to that extent. Further he admitted that he has not lodged any complaint before the police against those three boys. He has admitted the fact that PW.3 is his friend.
11. On perusal of evidence of PW. 1 and on appreciation of the records alongwith the documentary evidence, the prosecution has not specifically proved the fact that the accused has charged exorbitant interest. Further the prosecution also failed to prove the fact that the accused has lend said amount to PW. 1 since there is no document produced by the complainant to show lending of money in the name of PW. 1 and the said fact is also admitted by PW. 1 during the cross examination. Apart from the statement or evidence of PW. 1 who himself has stated about borrowing 11 Crl.Appl No.1093/2016 loan several times from the accused, except the bare statement, there is no material that the accused lending money and charged 10% interest. On scanning of the entire material there is no specific piece of evidence except the statement of PW. 1 that accused has charged 10% interest.
12. Another important fact is the complainant admitted the fact that he is borrowing money from the accused since 2003. If the version of PW. 1 is believed that the accused is charging exorbitant interest, why he has not complained regarding the charging of exorbitant interest and the complainant kept quite for a long period of 8 years. This very fact creates doubt in the prosecution case. Further, first of all there is no material to show that the accused lend loan to the complainant and the complainant has no document to show that he has returned the said amount to the accused with interest except the piece of small dairy which has no conclusive proof that the accused has lend loan with exorbitant interest.
13. It is also relevant to mention here that the prosecution examined 3 witnesses to prove the fact that the accused has lend money to the complainant and he has no valid money lending licence. Further the prosecution also fails to prove this fact. Because there is no satisfactory evidence regarding this fact. But the trial court come to the conclusion only on the suggestion put during cross examination by PW.
1. It is the burden on the prosecution to prove the alleged fact 12 Crl.Appl No.1093/2016 and only the suggestion and the answer will not prove the guilt of the accused. The suggestion made should corroborate to the evidence, but those cannot be the conclusive proof to come to the conclusion regarding guilt of the accused. Further though exhibits are marked, none of the documents speaks that the accused was charging exorbitant interest.
14. The another important aspect is that to attract section 38, the molestation has to be proved by the creditor to the debtor. Here in this case except the bare statement of PW.1 there is no material or evidence to show that the accused sent 3 persons to harass and molest the complainant for recovery of the loan amount and interest. Further more the evidence in this regard by the complainant mainly during the cross examination is not create confidence regarding the harassment given by the accused to the complainant. Since he does not know the name of the 3 boys who harassed him and he has not identified those persons inspite of the fact that he has given Rs. 2 lakhs to the said persons. The discrepancy in the evidence of PW. 1 will not create confidence regarding the prosecution case and also the prosecution has failed to prove the guilt of the accused beyond reasonable doubt.
15. Further another important aspect is that PW. 2 who is the recovery pancha to the recovery panchanama has turned hostile. It is very relevant, because the entire case of the prosecution rests on the recovery of the documents from 13 Crl.Appl No.1093/2016 the house of the accused, which will prove the fact that those recovered articles or documents prove that the accused doing unauthorized money lending business, but here since PW. 2 turned hostile, the prosecution failed to prove the recovery itself.
16. Further more the evidence of PW. 3 who is the recovery pancha at the time of raid supports the case of the prosecution. He deposed that he was present at the time of raid and the police recovered the said document which are marked as exhibits. It is necessary to mention here that since the case of the prosecution entirely stands on the statement of the complainant and PW. 3 who is the friend of PW.1, hence the evidence of this witness has to be tested. This fact is specifically admitted by PW. 1 during the cross examination. Further this PW. 3 has specifically admitted during the cross examination that he came to know that accused charging 10% interest on the say of PW. 1 and he has no personal information regarding the same. He does not know that how much the accused has lend money to the complainant. If the evidence of PW. 3 is appreciated and tested that will not create any confidence in the prosecution case to come to the conclusion that the accused has committed the offence.
17. Now coming to the legal aspect in the present case where the the accused held guilty by the trial court and convicted the accused for the offences stated above. To 14 Crl.Appl No.1093/2016 attract sec 38 of KML Act, there must be a molestation by the creditor to the debtor. During the appreciation of entire material the prosecution failed to prove that the accused molested the complainant. Further PW-1 states that 3 persons harassed him at the instigation of accused. But there is no eye witness and no material evidence to prove the fact that when the 3 persons approached the complainant and harassed him and molested him. Except the bare statement of PW.1 there is no substantive evidence to prove the said fact and it is also admitted by PW.1 that he has not filed any complaint against these 3 persons. Under such circumstances the accused cannot be held guilty u/sec 38 of KML Act.
18. Now coming to sec 4 of Prohibition of Charging Exorbitant Interest Act 2004. This section has to be read in conjunction with sec 38 of KML Act. Wherein it is specifically stated that who ever contravene sec 3 of the Act or malice the debtor for recovery of loan, he will be held guilty u/sec 34 of the Act. As discussed earlier there is no evidence to show that the accused has molested the complainant. Hence without any hesitation it can be held that the accused cannot be held guilty for the offence u/sec 4 of the Act.
19. Now coming to Sec 39 of the KML Act, Sec 39 provides that whoever contravene or violates the provisions of KML Act, will be held guilty. Since the prosecution fails to prove the fact regarding the recovery and it has consequently 15 Crl.Appl No.1093/2016 fails to prove that the accused is doing money lending in violation of provisions of KML Act, hence he cannot be held guilty in that provision also. The trial court has not properly appreciated the oral and documentary evidence on record. This court find irregularity and error committed by the learned Magistrate. Therefore, impugned judgment and order of conviction of trial court needs interference of this court and the accused has to be acquitted. Thus I answer point No.1 in negative and point No.2 in affirmative.
20. Point No.3; In the light of finding on above point, appeal of accused to be allowed. Accordingly this court proceeds to pass the following;
:ORDER :
Appeal filed by the Appellant is hereby allowed.
Impugned judgment and order of sentence of trial court passed in C.C.No.31110/2011 dated 24.8.2016 by MMTC VI, Bengaluru is hereby set aside.
The accused is hereby acquitted for the offences punishable U/Secs.38, 39 and 41 of Karnataka Money Lenders Act and U/secs 3 and 4 of Prohibition of Charging Exorbitant Interest Act, 2004.
16Crl.Appl No.1093/2016 Send copy of this judgment to the trial court for needful.
(Dictated to the Judgment Writer, script thereof is corrected, signed and pronounced by me in open court on this the 30 th day of May, 2020) (Gururaj Somakkalavar) LXIX Addl.C.C. & Sessions Judge, Bengaluru.