Bangalore District Court
Sri.G.Sendil Kumar vs Sri. Vishal Patel on 5 November, 2015
IN THE COURT OF THE XVIII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BANGALORE
DATED : THIS THE 5TH DAY OF NOVEMBER 2015
PRESENT: LAKSHMINARAYANA BHAT.K., B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
C.C.NO: 12848/2009
Complainant: Sri.G.Sendil Kumar,
S/o. Sri. T.Gopal,
Aged about 29 years,
Residing at No: 678/1581,
Ganesh Tiles, Opposite to
S.B.T.Company,
Near Yelahanka Police Station,
Yelahanka,
Bangalore-560 064.
(Represented by Sri.Ranga Prasad.Y.P.,
Advocate)
V/s.
Accused : Sri. Vishal Patel,
Back-Bone Ceramic Junction,
No.130/1st Main, 1st Cross,
Pramod Layout, Pantara Palya,
Yelahanka,
Bangalore-560 039.
(Represented by Sri.Geetha.J.Kadur.,
Advocate)
Offence complained of: U/s.138 of N.I.Act
Plea of accused: Pleaded not guilty
Final order Accused is found not guilty
Date of order: 5/11/2015
2 CC.No:12848/09
JUDGMENT
The complaint was filed against the accused for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter in short referred as N.I. Act.).
2. After filing of the complaint, cognizance of the offence was taken. After recording sworn statement in pursuance of summons, presence of the accused was secured and he was enlarged on bail. The substance of accusation was recorded and the accused pleaded not guilty.
3. To prove the complaint averments, the complainant was examined as P.W.1 and has produced documents marked as per Ex.P.1 to Ex.P.7. The statement of the accused under Section 313 of Cr.P.C was recorded. The accused entered his defence and he was examined as D.W.1 and has produced only one document marked as per Ex.D.1.
4. Heard the arguments. The learned Advocate appearing for the accused has relied upon the following reported judgments.
1. 2009(2) DCR 70 Kerala High Court.(Ravi Vs., Ayyappa Roller Flour Mills Ltd., )
2. 2008(1) AIR Kar R 129(SUPREME COURT)(John K John Vs., Tom Varghese and Anr., )
3. 2006(1) ALD Cri.36 IV(2003) BC 464 3 CC.No:12848/09 2005(2) KLT 972, KERALA High Court(Anil Raj Vs., Integrated Finance Co., Ltd.,)
4. I (2013) BC 742(SUPREME COURT)(Vijay Vs., Laxman and Anr.)
5. 2009(2) DCR 66(BOMBAY HIGH COURT)(Shri Ramdas Hanumant Palankar Vs., Shri N. D. Vernekar and Anr.) 6.2015 AIR SCW 64(K.Subramani Vs. K.Damodas Naidu)
7. 2006(2) DCR 611(ANDHRA PRADESH HIGH COURT) (CS Madhusudhan Vs., Eswaramma and Anr.,)
8. 2007(2) DCR 334 (MADRAS HIGH COURT) (MA Nachimuthu Vs., Thiru N Ravichandran).
5. After analyzing the averments made in the complaint, oral and documentary evidence placed on record and after hearing the arguments, at this stage the points that arise for my determination are:-
1) Whether the complainant has proved in April 2008 he had advanced hand loan of Rs.4,00,000/- to the accused and Ex.P.1 cheque issued in discharge of the said debt was dishonoured and even after service of notice, the accused had failed to pay the amount and thereby he is guilty of the offence punishable under Section 138 of N. I. Act?
2) What order?
6. My findings on the aforesaid points are as under:-
POINT NO.1 : In the Negative, POINT NO.2 : As per final order, 4 CC.No:12848/09 for the following:-
REASONS
7. POINT NO.1:- As per the complaint averments, during April 2008, the accused for his financial crisis approached the complainant and demanded hand loan of Rs.4,00,000/- for his business commitments. He had promised to repay the said amount to the complainant within 6 months. The accused had failed to repay the said amount to the complainant as promised by him and he was postponing payment with one or other pretext. After repeated demands, the accused has issued a cheque in favour of the complainant dated 17.12.2008 for Rs.4,00,000/- drawn on Canara Bank, Banashankari 3rd Stage Branch, Bangalore. The complainant presented the said cheque on 17/12/2008, but as per the memo dated 19.12.2008 it was returned unpaid with an endorsement "Funds Insufficient". The complainant issued demand notice dated 3.1.2009 and the said notice was duly served upon the accused. After service of the notice, the accused has neither made payment nor sent any reply. The complainant in his affidavit filed in lieu of examination-in-chief deposed as per the averments made in the complaint.
8. As per the defence evidence it is alleged that, the complainant is totally stranger and he is not having acquaintance with the complainant. As per the oral evidence of the accused it is admitted from 2007 to 2009 5 CC.No:12848/09 he was the Proprietor of Vishal Ceramics. The accused further admitted he had business transaction in respect of Ceramics with the Mukesh Jain and used to purchase tiles and in connection with the said transaction was depositing blank signed cheques. It is further submitted after payment of money pertaining to the said transaction, he used to obtain back blank signed cheques from aforesaid Mukesh Jain. The accused has admitted Ex.P1 cheque pertains to his Bank account and Ex.P1a his signature appearing in the cheque. As per his evidence in the year 2007 he had handed over Ex.P1 blank signed cheque to Mukesh Jain in connection with the tiles business transaction. The accused further submitted contents of Ex.P1 Cheque such as date, amount and name of the payee are not filled in his handwriting. According to the accused, he had met the complainant for the first time before the Court while appearing in this proceeding. It is further submitted after February 2008 there was a dispute between accused and Mukesh Jain in connection with their business transaction. The accused has suspected Mukesh Jain had handed over Ex.P1 blank signed cheque to the complainant and they have filled the instrument for an imaginary amount, and filed a false complaint for wrongful gain. The accused has disputed his liability to make payment of Ex.P1 cheque amount to the complainant. For the aforesaid reasons he has prayed for dismissal of the complaint.
6 CC.No:12848/09
9.As per the complaint averments and oral evidence of PW.1, in the month of April 2008, the complainant claimed to have advanced Rs.4,00,000/- hand loan to the accused by cash. In Ex.P3 statutory demand notice, complaint averments and affidavit evidence of PW.1, the complainant had not disclosed the specific date of advancement of loan. In all these documents it is only stated in the month of April 2008 Rs.4,00,000/- was advanced in favour of the accused. As per the evidence of the complainant for the last 15 years he is running a retail shop and doing tiles business at Yelahanka in the name and style Ganesh Tiles. It is further admitted he has not registered his business under the Sales Tax Act. In order to prove the complainant is having tiles business as claimed by him, he has not produced any documentary evidence. During cross-examination of PW.1, it is elicited from the mouth of the witness that Rs.4,00,000/- hand loan amount advanced in favour of the accused was kept in the house of the complainant. During cross-examination PW.1 further deposed he is getting business of Rs.25,0000/- to Rs.30,000/- per day. The complainant further claimed even prior to the complaint alleged transaction, 4-5 times accused had borrowed loan of Rs.50,000/- to Rs.1,00,000/-. In order to substantiate the aforesaid contention, complainant has admitted there is no documentary evidence. It is appropriate to mention that at the time of advancement of huge amount of Rs.4,00,000/- hand loan to the accused, the complainant didn't insist the accused to execute any documents in 7 CC.No:12848/09 support of the transaction. It is further stated he had not asked the accused to execute loan agreement or a demand promissory note. Therefore, in proof of advancement of Rs.4,00,000/- hand loan to the accused, except the contents of Affidavit filed by PW.1 in lieu of his examination in chief there is no other documentary or oral evidence is placed on record.
10.As per Para No.3 of complaint averments, after lapse of six months from the date of advancement of loan, the complainant demanded with the accused to make repayment. It is further admitted at that time, the accused had issued Ex.P1 cheque in favour of the complainant for Rs.4,00,000/- principal loan amount. Therefore, from the aforesaid admitted facts from April 2008 date of advancement of loan till issuance of Ex.P1 appears to be on 17.12.2008 for more than 8 months, the complainant was not having any documents in proof of advancement of the loan. The question arises at this stage is whether any prudent man will advance Rs.4,00,000/- hand loan without obtaining any documents from the borrower and Ex.P1 cheque was issued at the time complainant demanded repayment is unbelievable. Ex.P1 cheque amount not includes interest for the period April 2008 to December 2008 is the other suspicious circumstance appearing in this case of the complainant. Accused is not a relative of the complainant and therefore, why he didn't charge interest on the loan amount of Rs.4,00,000/- for the aforesaid period is not made known. A prudent 8 CC.No:12848/09 man may not advance huge amount of Rs.4,00,000/- without charging interest almost for a period of 8 months. In this regard the complainant has failed to forward any satisfactory explanation.
11.Ex.P1 cheque was issued in favour of the complainant dtd., 17.12.2008 drawn on Canara Bank, Banashankari III Stage Branch, Bangalore. The accused in his oral evidence admitted from the year 2007 to 2009 he was the Proprietor of Vishal Ceramics. The accused in his defence evidence and during the cross-examination of the complainant has admitted Ex.P1 cheque pertains to his bank account and Ex.P1a as his signature. In Ex.P1 cheque as Proprietor of Vishal Ceramics accused had affixed his signature. According to the accused he had handed over Ex.P1 signed blank cheque in favour of Mukesh Jain in the year 2007. The accused has also not produced any documents to prove the date on which he claimed to have handed over Ex.P1 blank signed cheque to Mukesh Jain. He has also not produced any documentary evidence regarding the alleged tiles business with the Mukesh Jain. Therefore as on the date of issuance of Ex.P1 cheque dtd., 17.12.2008, the accused was the Proprietor of Vishal Ceramics is proved from the oral evidence of the accused. As per Sec.58 of Indian Evidence Act facts admitted need not be proved. Therefore, the arguments of the learned defence counsel that the complainant has failed to prove accused was the Proprietor of Vishal Ceramics cannot be accepted. 9 CC.No:12848/09
12.During the cross-examination of DW.1. Complainant has produced Ex.P7 Visiting Card and it was admitted in evidence. As per the document the said visiting card contains name of the accused and Mukesh Patel and their telephone numbers. It appears as per the contents of the document they were running business in the name and style Backbone Ceramic Junction at Pantharapalaya, Bangalore. From the evidence it is not made known whether the Mukesh Patel referred in Ex.P7 visiting card and Mukesh Jain as deposed by DW.1 is one and the same person. In order to prove the accused had handed over Ex.P1 blank signed cheque to Mukesh Jain in the year 2007 in connection with his tiles business, he could have produced cheque book record slip. From the said document we can ascertain the date of issuance of cheque, Serial Number of the cheque, amount and the name of the payee in favour of whom it was issued. The accused has also not forwarded any explanation how his name appeared in Ex.P7 visiting card along with Mukesh Patel. In the above circumstances, accused along with Mukesh Patel were running tiles business in the name and style Backbone Ceramic Junction cannot be totally ruled out.
13.Accused in his defence evidence contended non-service of demand notice sent on behalf of the complainant as per Ex.P3. As per Ex.P4 and P5, the complainant had sent notice to the accused through registered post and under certificate of posting. Ex.P6 is the postal acknowledgement in proof of the service of said notice on the addressee. 10 CC.No:12848/09 In the absence the accused was not working in Backbone Ceramic Junction in the address as shown in Ex.P7 visiting card, there was no possibility of receipt of notice sent to the said address. In Ex.P6 postal acknowledgement there is a office seal of Backbone Ceramic Junction along with signature and it appears any authorized signatory on behalf of the accused might have received the letter sent through registered post. Therefore, the arguments of the defence that non-service of Ex.P3 demand noticed is untenable. The accused has not produced any documentary evidence to prove his correct postal address. In Ex.D1 Account Extract the address of the accused is shown as Vishal Ceramics, Banashankari III Stage, Bangalore. Summons issued to the accused to the address as shown in the complaint returned with an endorsement refused. As per Sec.27 of General Clauses Act, there is a presumption regarding letters sent through registered post. As per Sec.138(b) of NI Act complainant expected to send demand notice to the accused to the last known correct address. In this regard I have referred the Judgment of Hon'ble Apex Court reported in 2007 AIR SCW 3578 in C.C.Alavi Haji V/s. Palapetty Muhammed and another. As per Para No:17 of the said Judgment, court held.
"It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive 11 CC.No:12848/09 the notice sent by post, can, within 15 days of receipt of summons from the Court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C.Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case, if the giving of notice in the context of Clause(b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act".
In view of the ratio laid down by the Hon'ble Apex Court in the aforesaid Judgment non-service of demand notice sent on behalf of the complainant is no longer a good defence. Therefore, the evidence of the 12 CC.No:12848/09 accused shows in order to escape from the liability he has put forwarded false defence regarding non service of Ex.P3 statutory notice.
14.The accused in his oral evidence and during the cross- examination of the complainant contended complainant is a totally stranger and for the first time he has seen him before the Court in this proceedings. During the cross-examination of DW.1 the learned advocate appearing for the complainant has failed elicit from the mouth of the accused that even prior to the date of complaint alleged transaction; the parties were acquainted with each other. It is suggested for the last 12 years the complainant is having acquainted with the accused, but the accused has deposed he came to Bangalore only about 10 years back. During the cross-examination, PW.1 has specifically deposed Mukesh Patel is his friend. It appears the Mukesh Patel referred in Ex.P7 visiting card and the Mukesh Jain as deposed by the complainant is the same person. It appears since the accused has also admitted after 2009 there was dispute between himself and Mukesh Jain in connection with their tiles business, there is every possibility he has misused Ex.P1 blank signed cheque and handed over to the complainant. Complainant further admitted there was business transaction between himself and Mukesh Patel. The contents of Ex.P1 cheque, such as date, name of the payee, amount in words and figures, is filled in one ink and accused has affixed his signature in a different 13 CC.No:12848/09 ink. Therefore, this is also one of the circumstances to hold a blank signed cheque was filled by some other person.
15.A prudent man before advancement of the loan ascertains the purpose for which the loan is borrowed, financial capacity of the borrower to make repayment within the stipulated period. The complainant has admitted he is not an income tax assessee. Therefore, how he had mobilized huge amount of Rs.4,00,000/- in the month of April 2008 has to be explained by him. An income of Rs.4,00,000/- was a taxable income under Income Tax Act for the financial year 2008-09. During cross-examination complainant further admitted he had not seen the tiles shop of the accused situated at Kathriguppe, Banashankari III Stage, Bangalore. This admission leads to an inference that the complainant was not having acquaintance with the accused and he had never visited the shop of the accused. In the above circumstances he had advanced Rs.4,00,000/- hand loan to the accused in the month of April 2008 is unbelievable. During the cross-examination of PW.1 and in his oral evidence the accused was able to create a doubt regarding passing of consideration of Rs.4,00,000/- from the complainant was absent, doubtful and highly improbable. The complainant has not produced any bank account extract, bank pass book or other documents to prove his financial capacity to advance Rs.4,00,000/- hand loan to the accused by cash in April 2008. During the cross-examination the 14 CC.No:12848/09 complainant further admitted he is not having any documents to show in April 2008 he had ready cash of Rs.4,00,000/-
16.Ex.D1 is the Bank Account extract of the accused. Ex.P1 cheque pertains to the very same account. It appears the accused has produced Ex.D1 Bank Account extract to prove in the month of April 2008 he was maintaining substantial bank balance. As per Ex.D1 as on 2.4.2008 there was bank balance of Rs.8,64,715/- and on 30.4.20008 he was maintaining balance of Rs.2,42,117/-. It is true in the month of April 2008 there was number of transaction and on considering the entire transaction for the month of April 2008 it appears there was no necessity or occasion for the accused to borrow a sum of Rs.4,00,000/- hand loan from the complainant. In Ex.D1 Bank Account Extract from the entries we can make out the date of presentation of following cheques Sl. No. Date Cheque Number Amount 1 19.05.2008 832729 Rs.4,25,000/-
2 22.05.2008 832739 Rs.15,000/-
3 20.06.2008 832740 Rs.10,000/-
4 30.10.2008 832743 Rs.10,000/-
Ex.P1 cheque bearing No.832726 dtd., 17.12.2008 issued for Rs.4,00,000/-. In the above circumstances, the accused had issued Ex.P1 cheque in favour of the complainant in the month of December 2008 is not probable, since cheque No.832729 was presented and encashed on 19.05.2008. There was every possibility Ex.P1 cheque was issued prior to 19.05.2008. During cross-examination at one breath 15 CC.No:12848/09 PW.1 has deposed at the time of advancement of hand loan he had obtained Ex.P1 cheque from the accused. In this regard the oral evidence of PW.1, complaint averments and affidavit in lieu of his examination chief are contradicting with one another.
17.As per Sec.139 of NI Act there is a presumption in favour of the complainant that unless the contrary is proved Court shall presume that the cheque had been issued in discharge of any debt or liability. Therefore, it is the burden of the accused to place evidence to rebut the presumption appearing in favour of the complainant. It is well settled law that the standard of proof to prove the defence is preponderance of probabilities. In this regard I have relied up on Judgment of the Hon'ble Apex Court reported in AIR 2010 Supreme Court 1898 in Rangappa V/s. Mohan case. As per the aforesaid Judgment Hon'ble Apex Court held "the prosecution under Section 138 of N.I. Act the accused had to take probable defence and the degree of proof required is preponderance of probabilities".
The accused can take advantage of the inconsistency of the evidence of the complainant to show there was no legally enforceable debt. I have also referred the Judgment of the Hon'ble Apex Court reported in ILR 2009 KAR 1633 in Kumar Exports V/s. Sharma Carpets case. In Para No.20 of the aforesaid Judgment it is held as below:-
"The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did 16 CC.No:12848/09 not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to de discharged by him. However, the Court need not insist in every case that the accused should disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, bare denial of the passing of consideration and existence of debt, apparently does not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the 17 CC.No:12848/09 case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act".
That on application of law laid down by the Hon'ble Apex Court in the above referred Judgments, during cross-examination of the complainant and the accused in his oral evidence successfully made out a probable defence that Ex.P1 cheque was not issued in discharge of any debt or liability. As per the evidence on record a doubt has been created regarding passing of consideration was absent or it is doubtful. The complainant has failed to prove he had advanced Rs.4,00,000/- hand loan to the accused and in discharge of the said debt the accused had issued Ex.P1 cheque in his favour. Therefore, for the aforesaid reasons my findings on Point No.1 is in the Negative.
18.POINT NO.2:- In view of my findings on Point No.1., the accused is liable to be acquitted for the offence punishable under Section 138 of N.I. Act. Hence, I proceed to pass the following:- 18 CC.No:12848/09
ORDER Acting under Section 255 (1) of Cr.P.C, accused is acquitted for the offence punishable under Section 138 of Negotiable Instruments Act 1881. He is set at liberty. The bail bond and surety bonds hereby stands discharged.
(Dictated to the Stenographer, transcribed by him, corrected, revised and signed then pronounced by me in the open court on this the 5th day of November 2015).
(LAKSHMINARAYANA BHAT.K) XVIII A.C.M.M., BANGALORE.
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Sendil Kumar.
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P.1 : Cheque No:832726 dated 17.12.2008
for Rs.4,00,000/-.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Office copy of demand notice.
Ex.P.4 : Postal receipt.
Ex.P.5 : Under Certificate of Posting.
Ex.P.6 : Postal acknowledgement
Ex.P7 : Visiting Card.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
DW.1 : Vishal Patel
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: -
Ex.D1 : Copy of the Account Extract.
(LAKSHMINARAYANA BHAT.K)
XVIII A.C.M.M., BANGALORE.