Bangalore District Court
Mamatha Makkala Mandira vs M/S Corporation Bank on 11 March, 2024
1
Crl.A.No.1043/2019
KABC010152552019
IN THE COURT OF THE LII ADDL. CITY CIVIL &
SESSIONS JUDGE, BANGALORE (CCH-53)
Dated this the 11th day of March, 2024
PRESENT
Sri.B.G.Pramoda, B.A.L., LL.B.,
LII Addl. City Civil & Sessions Judge,
Bangalore.
Crl.A.No.1043/2019
Appellant/ : 1) Mamatha Makkala Mandira,
Accused Represented by its Secretary
Mr.B.M.Doddaiah and President Smt.Jayamma,
R/at:No.2, BDA Road,
Nagarabavi 1st Phase,
Muneshwara Temple Road,
Bengaluru - 560072.
2) Sri B.M.Doddaiah,
S/o B.G.Marappa,
Aged 66 years,
r/at No.1, 1st Main, Kalyana Nagar,
Nagarbavi Main Road,
Bengaluru - 560072.
3) Smt.Jayamma,
W/o Narayanappa,
Aged 52 years,
R/at:No.30, Kammagondanahalli 3rd Cross,
Bengaluru - 560 072.
(By Sri.J.R.Jagadish - Advocate)
-V/S-
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Crl.A.No.1043/2019
Respondent/ : M/s Corporation Bank,
Complainant A body corporate constituted under the
Banking Companies (Acquisition and
Transfer of Undertakings) Act 1980
(Act V of 1980) Having its Head Office at
Mangala Devi Temple Road, Mangalore,
Karnataka State and Branches
Inter alia one at No.3, BDA Complex,
2nd Stage, 3rd Block, Nagarbavi,
Bengaluru - 560 072.
Mr.M.L.Ramesh.
(By Sri. V.B.R., Advocate)
JUDGMENT
This appeal is filed by the Appellants praying to set aside the judgment dated 04.04.2019 passed by learned XXIX ACMM(SCCH-18),Bengaluru, in C.C.No.50840/2010 and praying to acquit them in the said case.
2. The appellants of this appeal were the accused No.1 to 3 before the Trial Court. The respondent of this appeal was the complainant before the Trial court. The rank of the parties to this appeal will be hereinafter referred to with the same rank as assigned to them before the trial court for the sake of convenience.
3. The brief facts which leads to file this appeal in nutshell are as follows:
The complainant bank had filed private complaint before the trial court bearing PCR No.163/2010 against the accused No.1 to 3 by alleging that the accused No.1 to 3 have approached it 3 Crl.A.No.1043/2019 for certain credit facility for a sum of Rs.75 lakhs for the purpose of onward lending to self help groups to undertake various income generating activity by individual members of the self help groups. On the basis of documents produced by the accused, the complainant bank has sanctioned loan of Rs.75 lakhs to the accused under loan account No.DL80001 on 26.09.2008. The accused after receiving the said amount have agreed to repay the loan amount along with interest and executed various documents in favour of the complainant bank.
The accused having availed the loan facility have failed to adhere the terms and conditions of the loan agreement. Thereafter, in order to repay the dues in part, the accused have issued a cheque bearing No.230236 dated 10.09.2009 for a sum of Rs.5,00,000/- drawn on Corporation Bank, Nagarabavi, Bengaluru. As per the instructions of accused, the said cheque was presented for realization by the complainant through its banker. But the said cheque was dishonoured with bank endorsement "funds insufficient". Then representative of complainant approached the accused and informed about the dishonour of cheque and requested for repayment of loan amount. But the accused have not paid the loan dues. Thereafter, the complainant had issued a legal notice dated 07.11.2009 to the accused by informing about dishonour of cheque and by calling upon the accused to pay the aforesaid cheque amount. The said legal notice was duly served on accused No.3 on 23.11.2009. The legal notice issued to accused No.1 and 2 are returned with postal shara "Intimation 4 Crl.A.No.1043/2019 Delivered" on 20.11.2009. In spite of receipt of legal notice, the accused have not paid the cheque amount to the complainant. Hence, it is alleged in the complaint that accused No.1 to 3 have committed the offence punishable u/Sec.138 of N.I. Act.
4. After filing of the complaint, the trial court took cognizance for the offence punishable u/Sec.138 of N.I. Act against the accused. Thereafter the trial court has recorded the sworn statement of the authorized representative of the complainant bank. The trial court after perusing the private compliant, sworn statement and the documents produced by the complainant bank was pleased to register criminal case against the accused No.1 to 3 in C.C. No.50840/2010 for the offence punishable u/Sec.138 of N.I. Act and issued summons to the accused No.1 to 3.
5. The accused No.2 and 3 being the President and Secretary of accused No.1 have appeared before the trial court after the service of summons on their behalf and also on behalf of accused No.1 and they were enlarged on bail. On appearance of the accused No.2 and 3 before the trial court, the trial court had recorded the plea of accused No.2 and 3 for the offence u/Sec.138 of N.I. Act. The accused No.2 and 3 pleaded not guilty and claimed to be tried. Hence, trial court has posted the matter for evidence of the complainant.
6. In order to prove the allegations made in the complaint, the complainant bank has adduced the oral evidence 5 Crl.A.No.1043/2019 of it Senior Manager as P.W.1. Two witnesses are examined on behalf of P.W.1 as P.W.2 and P.W.3. The plaintiff bank has produced in all 15 documents and got marked them as Ex.P.1 to P.15 and closed its side. Thereafter, the trial court had recorded the statements of the accused No.2 and 3 u/Sec.313 of Cr.P.C. The accused No.2 has adduced his defence evidence as D.W.1. Accused No.2 and 3 have not produced any documents on their behalf. Thereafter, the trial court has posted the matter for arguments.
7. The trial court, after hearing the arguments and after perusing the oral and documentary evidence was pleased to pass the judgment dated 04.04.2019 by convicted the accused Nos.1 to 3 for the offence punishable u/Sec.138 of N.I. Act. The trial court has sentenced the accused to pay fine of Rs.10,00,000/-. The trial court has directed to pay Rs.9,80,000/- fine amount as compensation to the complainant bank. The trial court has directed that Rs.20,000/- shall be remitted to the state exchequer. The accused being aggrieved by the said judgment of the trial court has preferred this appeal.
8. Grounds of appeal in nutshell as urged in the appeal memorandum are as follows:-
(a) The judgment passed by the trial court is not maintainable either in law or on facts of the case.
(b) The trial court has failed to notice that there was no authorization letter produced by the complainant bank to show 6 Crl.A.No.1043/2019 that Manager Mr. V.C. Rao was given authorization to file the complaint and in the absence of the same the complaint was liable to be dismissed more so when the entire loan transaction in the complaint was under micro finance scheme and PW.3-
Seshachala clearly stated that the complainant bank had transferred all the loan recovery transactions to the recovery branch wherein he works and the recovery branch had initiated proceedings before the Debt recovery tribunal to recover the money.
(c) The trial court overlooked the fact that the cheque was never issued to the complainant at any point of time. The complainant had failed to prove the very existence of liability and hence the issuance of cheque towards the discharge of the liability would liable to be dismissed.
(d) The trial court failed to appreciate the cause of action. There is no document to show the issuance of legal notice to the accused except postal receipts. The complainant claimed to have issued the notice on 07.11.2009 itself, the date on postal receipts is 18.11.2009, the notice issued to the accused No.1 was returned with postal shara of intimation delivered on 19.11.2009 and as such the said date has to be considered as the date of service of notice and if the said date is concerned as the date of service notice then 15 days period expires on 04.12.2009, thus the complaint has to be filed within 03.01.2010. The complaint was barred by limitation. The court below wrongly held that the complaint was filed within the 7 Crl.A.No.1043/2019 period of limitation and hence the impugned judgment is liable to be aside.
(e) The trial court failed to notice that the essential requirements as contemplated u/Sec.138 of N.I. Act were not complied with. The accused specifically contended that there is manipulation in records pertaining to issuance of notice to the accused and that is the reason why there is total discrepancy in the date mentioned in the legal notice and the postal receipts and that is the reason why the complainant had chosen not to mention the cause of action date either in the complaint or in their evidence and hence complaint was not supported by any documentary evidence and hence the suit is liable to be dismissed.
(f) The trial court has failed to notice that the alleged loan was repayable by self-help groups through the accused No.1 organization to the complainant. Though the loan was initially transferred into account of accused No.1, it was immediately disbursed to the beneficiaries and the report was also submitted to the complainant bank. Hence, it was very much clear that the accused No.1 was only a mediator and not the borrower. When such being the case, there exists no legally recoverable debt from the accused organization.
(g) The trial court totally relied upon only the documents produced by P.W.3 to hold the accused guilty and hence the impugned order is liable to be set aside.
On these among other grounds as urged in the appeal memorandum, the appellant has prayed to allow the appeal and 8 Crl.A.No.1043/2019 prayed to set aside the impugned order of the trial court and prayed to dismiss the complaint filed by the respondent.
9. After filing of the appeal, it is registered as Crl.A.No.1043/2019 and notice was issued to the respondent. After service of the notice, the respondent has appeared before the court through its counsel. Thereafter, the lower court record was called for. After securing the lower court record, the matter was posted for arguments.
10. In spite of granting sufficient time, the learned counsel for the appellants and respondent have not addressed their arguments and they have also not filed their written arguments. Hence, their oral arguments was taken as nil. Perused the appeal memorandum, lower court records and other materials on record.
11. Having done so, the following points will arise for my consideration:
(1) Whether the appellants prove that the trial court is erred in convicting them for the offence punishable u/s.138 of N.I. Act ?
(2) Whether the appellants prove that the interference of this court is required with the impugned judgment of the trial court?
(3) Whether the appeal filed by the appellants is deserves to be allowed?9
Crl.A.No.1043/2019 (4) What order?
12. My findings on the above points are as under:
(1) Point No.1 .. In the Negative
(2) Point No.2 .. In the Negative
(3) Point No. 3 .. In the Negative
(4) Point No. 4 .. As per final order
for the following:
REASONS
13. Point No.1 to 3:- These three points are interrelated to each other and as such, they are taken together for discussion to avoid repetition of facts.
14. The complainant had filed private complaint before the trial court u/Sec.200 of Cr.P.C. by alleging the commission of offence u/Sec.138 of N.I. Act by the accused No.1 to 3. Since the complainant had alleged that the accused No.1 to 3 have committed the offence punishable u/Sec.138 of N.I.Act, it is for the complainant to prove all the essential ingredients of Sec.138 of N.I. Act. Hence, it is relevant to note down the provisions of Sec.138 of N.I. Act.
Sec.138 of N.I. Act provides as follows:
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of 10 Crl.A.No.1043/2019 money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for (a term which may be extended to two years), or with fine which may extend to twice the amount of the cheque or with both. "
15. Thus from reading the aforesaid section, it is clear that the complainant has to prove the following essential ingredients for holding the accused guilty of offence under the said section.
(a) The cheque has been drawn by the accused on Bank account which is maintained by him with a particular Banker.
(b) The amount of money mentioned in the cheque is for discharging the legal liability either wholly or partially and
(c) The cheque is dishonoured or it is returned unpaid due to insufficiency of funds
(d) cheque amount not paid inspite of service of demand notice etc.,
16. In order to prove the allegations made in the complaint, the complainant bank had initially adduced the oral evidence of its Senior Manager as P.W.1. P.W.1 has produced 7 documents and got them marked as P.W.1 to 7. Thereafter, the oral evidence of another Senior Manager was adduced as 11 Crl.A.No.1043/2019 P.W.2. The complainant bank has examined its Assistant General Manager as P.W.3. P.W.3 has produced Ex.P.8 to P.15 documents. PW.1 to PW.3 in their examination-in-chief filed by way of affidavit have stated that the complainant is a Bank, incorporated under the Banking Companies Act, 1980 and accused have approached the complainant bank for certain credit facility for a sum of Rs.75 lakhs for the purpose of onward lending to self help groups to undertake various income generating activity by individual members of the self help groups. P.W.1 to 3 in their examination-in-chief have further deposed that on the basis of documents produced by the accused, the complainant bank has sanctioned loan of Rs.75 lakhs to the accused on 26.09.2008 under loan account NO.DL80001 and the defendants have executed all necessary documents in favour of the complainant bank. P.W.1 to 3 in their examination-in-chief have further deposed that accused having availed the loan facility have failed to adhere the terms and conditions of the loan agreement. P.W.1 to 3 in their examination-in-chief have further deposed that thereafter, in order to repay the dues in part, the accused have issued a cheque bearing No.230236 dated 10.09.2009 for a sum of Rs.5,00,000/- drawn on Corporation Bank, Nagarabavi, Bengaluru. P.W.1 to 3 in their examination-in-chief have further deposed that the said cheque was presented for encashment by the complainant bank through its banker and the said cheque was dishonoured with an endorsement "Funds Insufficient". P.W.1 to 3 in their examination-in-chief have 12 Crl.A.No.1043/2019 further deposed that then representative of complainant bank approached the accused and informed about the dishonour of the cheque and requested for repayment of loan amount, but the accused have not paid the loan dues. P.W.1 to 3 in their examination-in-chief have further deposed that thereafter, the complainant bank had issued a legal notice dated 07.11.2009 to the accused calling upon the accused to pay the aforesaid cheque amount. P.W.1 to 3 in their examination-in-chief have further deposed that the said legal notice was duly served on accused No.3 on 23.11.2009 and the legal notice issued to accused No.1 and 2 are returned with postal shara "Intimation Delivered" on 20.11.2009. P.W.1 to 3 in their examination-in- chief have further deposed that in spite of receipt of legal notice, the accused have not paid the cheque amount to the complainant bank and hence, the accused have committed the offence punishable u/s. 138 of N.I Act.
17. P.W.1 to P.W.3 apart from adducing their oral evidence have produced certain documents. Ex.P.1 is the original cheque bearing No.230236 dated 10.09.2009, drawn on Corporation Bank, Nagarbavi Branch, Bengaluru. Ex.P.1(a) and 1(b) are the signatures of the accused No.2 and 3. Ex.P.2 is the Bank endorsement. In Ex.P.2, it is mentioned that Ex.P.1 cheque was dishonoured due to "Insufficient Funds". Ex.P.3 is the office copy of legal notice issued by complainant bank to the accused No.1 to 3 on 07.11.2009 by intimating about 13 Crl.A.No.1043/2019 dishonour of the cheque and by demanding payment of the cheque amount. Ex.P.4 is postal receipts. Ex.P.5 and P.6 are the returned postal covers. Ex.P.5(a) and P.6(a) containing copies legal notices. Ex.P.7 is the postal acknowledgment. Ex.P.8 is the office copy of resolution passed by accused No.1. Ex.P.9 is the demand promissory note executed by accused No.2 and 3 in favour of complainant bank. Ex.P.10 is the take delivery letter to DPN dated 26.09.2008. Ex.P.11 is the guarantee agreement. Ex.P.12 is the guarantors letter of consent. Ex.P.13 is the affidavit cum undertaking letter to be obtained from the borrower. Ex.P.14 is the letter of consent for disclosure of information and Ex.P.15 is the letter of authority.
18. The oral and documentary evidence adduced on behalf of the complainant bank supports the complaint averments. The complainant bank has adduced oral and documentary evidence before the trial court in order to prove its contention that the accused No.1 to 3 have obtained credit facility of Rs.75 lakhs for the purpose of onward lending to Self Help Groups to undertake various income generating activity by individual members of Self Help Groups and to prove that the accused No.2 and 3 have issued Ex.P.1 cheque towards part discharge of their liability and the cheque issued by the accused No.2 and 3 was dishonoured by the banker of accused due to "Funds Insufficient" and the accused No.2 and 3 have failed to pay the cheque amount insptie of service of demand notice. The accused No.2 and 3 have not disputed the 14 Crl.A.No.1043/2019 fact that they are the President and Secretary of accused No.1 organization and they have not disputed the fact that Ex.P.1 cheque is belonging to accused No.1 and it bears their signatures and it was drawn from the bank account maintained by accused No.1. It is the defence of D.W.1 in his chief- examination that the accused have only worked as mediators and they have not availed any loan for them from the complainant bank and there exist no legally recoverable debt or liability on their part towards the complainant bank and the bank authorities have forcibly took their signature on one cheque by stating that the said cheque is required for repayment of loan amount. Hence, from the defence of accused, it is clear that the accused have not denied the fact of issuance of cheque to the complainant. Whether the accused have proved their defence or not will be discussed in later paras. But the accused No.2 and 3 have admitted their signatures on the said Ex.P.1 cheque and they have admitted that Ex.P.1 cheque is belonging to accused No.1 and it is drawn from the bank account maintained by accused No.1. The complainant bank had presented the said cheque for encashment. As such, the complainant bank will became the holder of the cheque within the meaning of Sec.8 of N.I.Act. As such, I am of the opinion that, statutory and legal presumption under Sec.118(a) and Sec.139 of N.I. Act shall be drawn in favour of the complainant bank.
15Crl.A.No.1043/2019 Sec.118(a) of N.I.Act provides as follows:
"Until the contrary is proved, the following presumption shall be made
(a) That every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration."
Sec.139 of N.I. Act provides as follows:
"It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Sec.138 for the discharge, in whole or in part, of any debt or other liability.
19. Thus, u/s.139 of N.I. Act, the initial presumption arises in favour of the complainant that the said cheque was issued for discharge of legally enforceable debt. Once the cheque is proved to be relating to the account of the accused and he admits the signature on the said cheque, then the initial presumption as contemplated u/Sec.139 of N.I.Act has to be raised by the court in favour of the complainant. Further u/Sec.118(a) of N.I.Act there is presumption that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted for consideration. Presumption u/Sec.118(a) and 139 of N.I.Act is a legal presumption and it is a mandatory presumption. The 16 Crl.A.No.1043/2019 initial mandatory statutory presumption as provided u/Sec.118 r/w. S.139 of N.I. Act are in favour of the complainant bank.
20. In the recent decision of Hon'ble Supreme Court of India reported in (2021) 5 Supreme Court cases 283 : 2021 Online SC 75 (Kalamani Tex and another V/s P.Balasubramanian, rendered by Hon'ble three judges bench, the Hon'ble Supreme Court of India has discussed about the provisions of Sec.139 and 118 of N.I.Act. In the said judgment, the Hon'ble Supreme Court of India has held in Para No.13 while discussing the provisions of Sec.118 and 139 of N.I.Act, that the statute mandates that once the signature of an accused on the cheque is established, then these "reverse onus" clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him.
21. Further in the aforesaid judgment, the Hon'ble Supreme Court of India in Para No.15 has observed that the presumption raised u/Sec.118 and 139 of N.I. Act are rebuttable in nature. A probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not mere possibility. Further, a bare denial of passing of consideration would not aid the case of the accused. In Para No.17 of the judgment, the Hon'ble Supreme Court of India has held that even if the arguments raised by the appellants are taken at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet 17 Crl.A.No.1043/2019 the statutory presumption cannot be obliterated, because, legally, even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. In the aforesaid judgment, in Para No.14, the Hon'ble Supreme Court of India has held that when the accused has admitted his signature on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. It is further observed that the trial court fell in error when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. It is further observed that, such approach of the trial court was directly in the teeth of the established legal position and amounts to a patent error of law.
22. Thus from the aforesaid decision of Hon'ble Supreme Court of India in Kalamani Text case, it is clear that once the accused admits his signature on the cheque, it can be presumed u/Sec.139 of N.I.Act that the cheque was issued for discharge of legally enforceable debt. The court cannot insist the complainant to explain the circumstances under which the accused is liable to pay the cheque amount.
23. Thus from the provisions of Sec.118(a) and Sec.139 of N.I. Act, it is clear that the court shall raise presumption in favour of the complainant bank that it has 18 Crl.A.No.1043/2019 received the cheque in question for discharge of legal liabilities and cheque was made and drawn for said purpose. This principles is also clearly held by the Hon'ble Supreme Court of India in Kalamani Text case as discussed above. The burden is upon the accused to adduce satisfactory evidence to rebut the strong presumption as provided u/Sec.118 and Sec.139 of N.I. Act. Hence, the contention of the appellants that the burden is upon the complainant to prove the existence of legally enforceable debt or liability cannot be acceptable one.
24. The accused No.1 to 3 in order to rebut the presumption U/s 118(a) and 139 of NI Act have adduced the oral evidence of accused No.2 as D.W.1. D.W.1 in his examination-in-chief has stated that the Self Help Groups have approach him seeking help to obtain loan from the bank and as such, he has visited the complainant bank and requested to grant loan for the purpose of lending the same to Self Help Groups. D.W.1 has further deposed in his examination-in-chief that the bank authorities have met the members of each groups and after enquiring them, granted loan to them. D.W.1 has further deposed in his examination-in-chief that he and accused No.3 have acted as mediators only to facilitate the Self Help Groups to obtain loan. D.W.1 has further deposed in his examination-in-chief that they have not received any loan from the complainant bank. The self help group members have not repaid the loan amount and as such, bank authority has engaged some private persons for recovery of the loan and the 19 Crl.A.No.1043/2019 said persons have told the self help groups to pay the amount to them and not to the bank and recovered amount from the self help groups. D.W.1 has further deposed in his examination-in-chief that when he has asked the members of the self help group to repay the loan amount, they have told that they have already repaid the loan amount to the bank and as such, they will not make any payment to him. D.W.1 has further deposed in his examination-in-chief that the complainant bank have forced him to repay the loan amount and they have pressurized him to give cheque and forcibly obtained his signature on one cheque and misused the said cheque. D.W.1 has further deposed in his examination-in-chief that he and accused No.3 have not taken any loan from the complainant bank and they have not issued cheque in dispute for repayment of any loan amount and hence, he has prayed to dismiss the complaint.
25. From the evidence of D.W.1, the defence of the accused is clear that Ex.P.1 cheque was issued by accused No.2 and 3 under the pressure of the complainant bank and the complainant bank has obtained their signatures on the cheque forcibly. As such, the burden is upon the accused No.2 and 3 to prove the said defence. The said defence was suggested to the witnesses examined on behalf of the complainant. But the said suggestions are denied by the witnesses examined on behalf of the complainant. Further if Ex.P.1 cheque was obtained by the complainant bank from the 20 Crl.A.No.1043/2019 accused forcibly and the signatures of accused No.2 and 3 was obtained by force, the accused No.2 and 3 would have given police complaint against the persons who have obtained their signatures on the complaint by force and who have pressurized them to give the cheque. But no such complaint is given by the accused No.2 and 3. This fact is also clearly admitted by D.W.1 in the cross-examination.
26. D.W.1 in the cross-examination has stated that he has not given any any notice to the complainant to return the cheque obtained from him forcibly. D.W.1 in the cross- examination has further stated that Ex.P.1(a) and P.1(b) are the signatures of him and accused No.3. D.W.1 in the cross- examination has further stated that one Ganganna and four persons have came to his office and they have forcibly obtained Ex.P.1 cheque by threatening him and he has also intimating the said fact to the bank and he has not produced any written complaint given by him to the bank about the same. Further if Ex.P.1 cheque was really obtained by the complainant from the accused No.2 and 3 forcibly, accused No.2 and 3 would have given stop payment instructions to his banker stating that they have issued the cheque to the complainant or to any other persons under pressure and instructing his banker not to honour the said cheque if presented by the complainant or any persons on its behalf. But no such, application is given by the accused No.2 and 3 to their 21 Crl.A.No.1043/2019 banker. Ex.P.1 chqeue was returned with endorsement "Funds Insufficient" and not with shara payment stopped by drawer.
27. Absolutely there are sufficient materials on record to prove the defence of the accused No.2 and 3 that Ex.P.1 cheque was obtained by the complainant from accused No.2 and 3 under force and threat. The accused No.2 and 3 have failed to adduce any believable evidence to prove the said defence and to prove that Ex.P.1 cheque was not given by them for repayment of part loan amount. The oral evidence of D.W.1, regarding the defence taken by him is not supported by any documentary evidence. Further the accused No.2 and 3 have not examined any of the members of Self Help Group to prove that the loan was obtained by the self help group independently and accused have nothing to do with the said loan transaction and they have only acted a mediators to facilitate the self help group to obtain loan from the bank. Further the evidence of the members is also not adduced by the accused to prove that the members have already repaid the loan amount to the agency appointed by the complainant bank for collection of the loan amount from the self help group. Hence, the said defence of the accused also cannot be acceptable one.
28. D.W.1 in the cross-examination has admitted that the bank loan was credited to their account directly. D.W.1 in the cross-examination has admitted that they have executed 22 Crl.A.No.1043/2019 guarantee agreement to the bank. He has admitted in his cross-examination that in O.S.No.78/2005 filed by the bank against the accused No.1 before DRT, he and the President of accused No.1 are also made as parties and the said suit was filed for sum of Rs.83,87,613/-. Further the accused have not given any reply to the demand notice issued by the complainant bank by stating about their defence. The demand notice issued to the accused No.1 and 2 were returned with postal shara intimation delivered and notice to accused No.3 is served. It is not the defence of the accused that the notice is sent to incorrect address and they were not residing in the address mentioned in the demand notice as on the date of issuance of the same and they have not produced any documents to show that they were residing in some other address. When the notice is issued through registered post to the correct address, its due service has to be presumed u/Sec.27 of General Clauses Act.
29. The complainant has complied the provisions of Sec.138 (b) of N.I.Act and issued notice with thirty days from the date of acknowledgment of dishonour of cheque. After the service of the demand notice, the accused have 15 days time to make payment of cheque amount. As per Ex.P.7, the accused No.3 received on 23.11.2009. The notice sent to accused No.1 and 3 through registered post were intimated to the accused No.1 and 2 on 19.11.2009 and 20.11.2009 and they were returned as not claimed on 30.11.2009. The accused 23 Crl.A.No.1043/2019 No.3 has received the demand notice on 23.11.2009. Hence, I am of the opinion that the complaint filed by the complainant is within the period of limitation prescribed under the N.I.Act. As such, I do not find any merits of the contention of the appellant that the complaint filed by the complainant is time barred and as such, it is liable to be dismissed.
30. Inspite of service of demand notice, the accused have not make payment of the cheque amount to the complainant within the time. It is also not the case of the accused in their defence that they have made the payment of cheque amount to the complainant after the service of the demand notice. Hence, I am of the opinion that the complainant has complied all the essential requirements that are necessary to file the complaint u/Sec.138 of N.I.Act.
31. Further the complainant has produced the resolution of accused No.1 at Ex.P.8 authorizing accused No.2 and 3 to act on its behalf and to sign all the documents on its behalf. Further Ex.P.9 on demand promissory note are also jointly executed by accused No.2 and 3 for Rs.75,00,000/- in favour of the complainant bank under taking to pay the said amount on demand. Further take delivery letter is also executed by accused No.2 and 3 jointly. The accused No.2 and 3 have also executed guarantee agreement as per Ex.P.11 agreeing to indemnify the bank against all loss and to pay and to satisfy the bank on demand the general balance due from 24 Crl.A.No.1043/2019 the borrower. They have also executed affidavit cum undertaking letter. Thus from the aforesaid documents produced on behalf of the complainant bank, it is clear that there is liability on the part of the accused to repay the loan amount to the complainant bank which was obtained by them on behalf of self help group. The accused No.1 to 3 cannot escape from their liability only on the ground that the loan was given for the members of self help group. According to the complainant, Ex.P.1 cheque was issued by the accused No.2 and 3 towards payment of the part of the loan amount. As it is discussed earlier, the accused have failed to prove their defence with probable evidence and they have failed to prove that Ex.P.1 cheque was not issued by them for payment of the loan amount and it was forcibly obtained by them. As such, I am of the opinion that the accused have failed to adduce probable defence evidence to rebut the presumption existing in favour of the complainant u/Sec.118 and 139 of N.I.Act.
32. The complainant has adduced sufficient evidence before the trial court to prove all the essential ingredients that are necessary to constitute the offence punishable u/s.138 of N.I. Act. The trial court has properly and judiciously considered the oral and documentary evidence adduced on behalf of the both the parties. The trial court has applied proper provision of law to the facts of the case. Further the trial court has rightly come to the conclusion that the complainant has proved that the accused has committed the offence punishable u/s.138 of 25 Crl.A.No.1043/2019 N.I. Act. The reasons assigned by the trial court to arrive at such conclusion are proper and judicious. As such, the trial court has rightly convicted the accused for the offence punishable u/s.138 of N.I. Act. As such, I do not find any valid grounds to interfere with the said findings of the trial court. I do not find any merits in the various grounds urged by the appellants in the appeal memorandum. For the discussion made above, the impugned judgment of conviction passed by the trial court cannot be set aside on the various ground urged by the appellants in the appeal memorandum. As such, the judgment of conviction of the accused No.1 to 3/ appellant No.1 to 3 by the trial court for the offence punishable u/s.138 of N.I. Act is deserves to be confirmed.
33. The trial court has sentenced the accused No.1 to 3 to pay fine of Rs.10,00,000/-. As per Sec.138 of N.I.Act, the learned Magistrate has got discretion to sentence the accused to undergo imprisonment for the period up to two years or to impose fine which may extend to twice the amount of the cheque or with both. Ex.P.1 cheque is for Rs.5,00,000/-. The learned Magistrate by exercising his discretion has sentenced the accused No.1 to 3 only with fine of Rs.10,00,000/-. By considering the length of trial, date of issuance of cheque and interest on the cheque amount etc., the discretion exercised by the learned Magistrate is also seems to be proper and judicious. As such, I do not find any grounds to interfere with the sentence passed by the trial court. As such, I am of the 26 Crl.A.No.1043/2019 opinion that the impugned judgment of the trial court is deserves to confirmed and the appeal filed by the appellants is deserves to be dismissed. Accordingly, I answer Points No.1 to 3 in Negative.
34. Point No.4:- In view of my findings on point No.1 to 3, I proceed to pass the following:
ORDER The Appeal filed by the appellants u/s.374(3) of Cr.P.C., is hereby dismissed.
The order passed by learned XXIX ACMM (SCCH-18), Bengaluru, dated 04.04.2019 in C.C.No.50840/2010 is hereby confirmed.
Send back the lower court records along with copy of this order.
(Dictated to the Stenographer Grade-I, directly on computer, corrected and then pronounced by me in the open court on this the 11th day of March, 2024). Digitally signed PRAMODA by PRAMODA B G BG Date: 2024.03.15 11:01:20 +0530 (B.G.Pramoda) LII Addl. City Civil & Sessions Judge, Bengaluru.
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