Bangalore District Court
Suresh Babu Chalorakandy vs Muddaiah on 1 August, 2024
1 CC.NO.3972/2020
KABC030150862020
IN THE COURT OF THE XII ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BENGALURU
Dated this the 1st day of August, 2024
Present:
Present: Smt. Gayathri S Kate,
B.Com., LL.B.
XII Addl. Chief Judicial Magistrate,
Bangalore.
CC.NO.3972/2020
Sri.Suresh Babu Chalorkandy,
S/o. C.K.P.Nair,
Aged about 48 years,
R/at: No.54,
Someshwara Layout,
M.S.Palya,
Vidyaranyapura Post,
Bangalore-97. .....COMPLAINANT
(Rep.By Sri D.P.,Adv.)
/Versus/
Sri.Muddaiah,
S/o. Veerachikkaiah,
Aged about 32 years,
R/at: Veerapura,
Gollarahatti-Udakunte,
Magadi Tq, Kudur.P.O.,
Ramanagara Dist-562127. .......ACCUSED
(Rep.By Sri.T.G.S., Adv.)
Date of offence : 07.11.2019
Date of report : 22.01.2020
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Arrest of the accused : Accused released on bail
Name of the complainant : Sri.Suresh Babu Chalorkandy
Date of recording of evidence : 25.02.2020
Offence alleged : S.138 of N.I.Act
Opinion of the Judge : Accused found guilty
JUDGMENT
The complainant has filed this complaint under section 200 of Cr.P.C. against the accused for the offence punishable under section 138 of Negotiable Instrument Act.
2. Factual Matrix of the complainant's case is as follows:
It is stated in the complaint that, the complainant and accused are friends. Due to the close friendship the accused has borrowed a total sum of Rs.3,00,000/- from the complainant for his business purpose with an assurance that he will repay the same with an interest at the rate of 24% P.A., and and issued 2 cheques and executed an agreement dated: 02.11.2018. Thereafter the complainant started to demand the accused to return the said amount and finally accused has issued cheque bearing No.000001 dated 07.11.2019 for a sum of Rs.3,50,000/-, drawn on HDFC Bank Dabaspet Circle Branch, Nelamangala Tq, Bangalore. As per assurance the Complainant presented above said cheque for encashment on 11.11.2019 through his banker at State Bank of India, AFS Jalahalli East, Bengaluru. The said cheque was returned with an endorsement as "Funds Insufficient" on 13.11.2019. Accused assured about honour of cheque but said cheque was dishonored. Thereafter, the 3 CC.NO.3972/2020 complainant issued legal notice dated: 07.12.2019 to the accused by calling upon him to pay the amount covered under the cheque within the stipulated period. Inspite of service of notice, accused failed to repay the amount covered under cheque. Hence, the complainant constrained to file the present complaint against the accused for the offence punishable under section 138 of Negotiable Instrument Act.
3. The court has perused the complaint and annexed documents and has recorded the sworn statement of the complainant and marked 6 documents as Ex.P-1 to Ex.P-6. As there were sufficient materials to constitute the offence, cognizance was taken and this court proceeded to pass an order for issuing process against the accused.
4. On finding a prima-facie case against the accused, he was summoned consequent to the service of summons, the accused has appeared through his counsel and offered bail. He was enlarged on bail. Then, the substance of accusation was read over and explained to the accused in the language known to him. The accused has not pleaded guilty and claimed to be tried.
5. As per the directions of Hon'ble Supreme Court of India in "Indian Bank Association V/s Union of India & Others reported in (2014) 5 SCC 590, this court has treated the sworn statement of the complainant as complainant evidence. Then, in compliance with the direction of Hon'ble Apex Court in the aforementioned ruling, the case was posted for defence evidence after recording the statement of the 4 CC.NO.3972/2020 accused under section 313 of Cr.P.C. The accused was given sufficient opportunity to conduct cross of PW.1, and also to lead his defence evidence. Since accused has failed to conduct cross of PW.1 and defence evidence on his behalf, the said cross of PW.1 and defence evidence was taken as nil. Hence, the case was posted for arguments.
6. By reserving the right to file the written arguments by both the parties, the case is posted for judgment. Perused entire materials available on record.
7. The points that would arise for my consideration are as under:
POINTS i. Whether the complainant proves beyond all reasonable doubt that, the accused has issued cheque bearing No.000001 dated 07.11.2019 for a sum of Rs.3,50,000/-, drawn on HDFC Bank Dabaspet Circle Branch, Nelamangala Tq, Bangalore, On presentation for encashment on 11.11.2019 through his banker at State Bank of India, AFS Jalahalli East, Bengaluru, it was dishonoured for "Funds Insufficient" on 13.11.2019, then in-spite of issuing demand notice to the accused in compliance of statutory requirement under Negotiable Instruments Act, accused did not repay the cheque amount, thereby he has committed an offence punishable under section 138 of Negotiable Instruments Act? ii. What order or sentence?
8. My answer to above points are as under:
5 CC.NO.3972/2020 Point No.1: In the affirmative.
Point No.2: As per final order
for the following:
REASONS
9. Point No.1: To substantiate the case of the complainant, complainant examined himself as PW-1 and got marked 6 documents as Ex.P-1 to Ex.P-6. In support of his testimony, he has produced the cheque issued by accused and the same is marked as Ex.P-1, signature of the accused on the cheque is marked as Ex.P-1(a), Bank return memos as "Funds Insufficient" is marked as Ex.P-2, a copy of legal notice issued to accused is marked as Ex.P-3, The postal receipt for having issued to the registered address of the accused is marked as Ex.P-4, Postal Acknowledgment is marked as per Ex.P-5, Loan Agreement is marked as Ex.P-6.
10. In the affidavit filed along with the complaint, the complainant has re-iterated the contents of complaint stating that he has lend money to the accused and about issuance of cheque by the accused towards repayment of legally enforceable debt. When the testimony of the complainant and supporting documents like Ex.P-1 & Ex.P-2 are looked into, prima-facie appears that, the accused has issued cheque in discharge of his legally enforceable debt and when the same was present, it was not bounced due to insufficient funds at accused bank account. The Ex.P-3 is the demand notice which was issued by the complainant to the accused, in compliance with statutory 6 CC.NO.3972/2020 requirement under section 138 of Negotiable Instruments Act, calling upon the accused to repay the cheque amount. On perusing Ex.P-4 & Ex.P-5, the demand notice was addressed to the accused and the same was duly served upon the accused.
11. On perusal of the documents relied by the complainant shall reveal that, statutory requirements under section 138 of NI Act is complied with. Thus, the complainant relied on the statutory presumptions enshrined under section 118 R/W Sec. 139 of NI act. Section 118 of NI Act reads as here:
"That every negotiable instrument was made or drawn for consideration and that every such instrument, negotiated, or transferred was accepted, endorsed, negotiated or transferred for consideration".
12. Further, Section 139 of NI Act speaks about presumption in favour of a holder. It reads as here:
"It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, or the nature referred to in Section 138, for the discharge, in whole or in part, or any debt or other liability".
13. Combined reading of above said sections raises a presumption in favour of the holder of the cheque that, he has received the same for discharge in whole or in part of any debt or other liability. However, it is settled principle of law that, 7 CC.NO.3972/2020 the presumption available under section 139 of NI act can be rebutted by the accused by raising a probable defence.
14. Presentation of the cheque in question for encashment and dishonour of the cheque for the reason "Funds Insufficient"
is not disputed as it is a matter of record proved by the return memo at Ex.P-2. Therefore, it has been proved that, the cheque was presented within the validity period and dishounoured by the banker of the accused. It is also not disputed that, the cheque was issued by the accused and was drawn on his bank account as he has not denied his signature on the cheque.
15. It is pertinent to note here that, though the accused has appeared before this court has not chosen to contest the case and though has claimed defence on his behalf. When such being the case an adverse inference has to be drawn against the accused and this court has to presumed that accused has admitted the allegation made in the complainant.
16. Hon'ble Apex Court in Rangappa V/s Mohan reported in AIR 2010 SC 1898 has laid down law with regard to presumption Under section 139 of N.I. Act. It was held at para 14 of Judgment that:
"However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the 8 CC.NO.3972/2020 credibility of negotiable instruments. while section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of the cheque, the rebuttable presumption under section 139 is a device took prevent undue delay in the course of litigation".
17. In this case, plea of the accused was recorded asper Section 251 of Cr.P.C. The accused pleaded not guilty. Asper section 251 of Cr.P.C, the accused has to state about his defence. Here accept pleading not guilty, the accused has not stated his defence at the time of recording of Plea. Asper the direction reported in AIR 2014 SC 2528 (Indian Bank Association V/s Union of India), criminal pet.NO.8943/2010 M/S Mess Transgare Pvt. Vs Dr.R.Parvathreddy and in Rajesh Agarwals Case, wherein, it is held that, accused cannot simply say "I am innocent" or " I pleaded not guilty". Here also the accused not stated any defence. He simply pleaded not guilty. Inspite of that, this court has given an opportunity to the accused to prove the case but the accused has failed to rebut the presumption.
18. Therefore, the complainant has successfully proved that, accused has issued cheque in question in discharge of legally enforceable debt. Per contra, the accused has failed to rebut the evidence of the complainant. When such being the case, it shall be presumed that, the complainant has received 9 CC.NO.3972/2020 the cheque in discharge of legally enforceable debt or other liability.
19. Having regard to facts and circumstances of the case, it is crystal clear that the complainant has proved his beyond reasonable doubt. Per contra, the accused has failed to rebut the evidence of the complainant. Accordingly, this court proceeds to answer point No.1 in the Affirmative.
20. Point No.2: The Hon'ble Apex Court in its recent decision in M/s Meters and Instruments Pvt., Ltd., V/s Kanchana Mehtha reported in (2018) 1 SCC 560 held that "the object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court.
21. Therefore, having regard to loan amount, time from which it is lying with the accused, I am of the opinion that, if accused is directed to pay fine of Rs.3,75,000/- and out of that, amount of Rs.3,70,000/- is ordered to be paid to the complainant as compensation under section 357 of Cr.P.C. for suffering monetary loss, would meet the ends of justice. Hence, this court proceed to pass the following:
ORDER In exercise of powers conferred under section 255(2) of Cr.P.C, the accused is convicted for the offence punishable under section 138 of 10 CC.NO.3972/2020 The Negotiable Instruments Act.
The accused is sentenced to pay fine of Rs.3,75,000/- and in default he shall undergo simple imprisonment for the term of six months.
Out of fine amount of Rs.3,75,000/- a sum of Rs.3,70,000/- is ordered to be paid to the complainant towards compensation under section 357 of Cr.P.C. and the balance amount of Rs.5,000/- shall be remitted to state as defraying expenses.
Office is directed to supply free copy of the judgment to the accused.
(Dictated to the stenographer on the computer, typed by her corrected and then pronounced by me in the open court this 1st day of August, 2024) (Smt. Gayathri S. Kate) XII A.C.J.M., BENGALURU.
ANNEXURES LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW 1 : Suresh Babu Chalorkandy LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P-1 : Cheque
Ex.P-1(a) : Signature of accused
Ex.P.2 : Endorsement
Ex.P-3 : Legal Notice
Ex.P-4 : Postal Receipt
Ex.P-5 : Postal Acknowledgment
Ex.P-6 : Loan Agreement
11 CC.NO.3972/2020
LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil LIST OF DOCUMENTS MARKED FOR THE ACCUSED:
Nil
Digitally signed
by GAYATHRI S
GAYATHRI KATE
S KATE Date:
2024.08.07
13:25:56 +0530
(Smt. Gayathri S. Kate)
XII A.C.J.M., BENGALURU.
12 CC.NO.3972/2020
13 CC.NO.3972/2020