Bangalore District Court
Sri.Murthy.P vs Smt.Hemamalini on 2 June, 2016
IN THE COURT OF THE XX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BANGALORE CITY
Dated this the 2nd day of June 2016
PRESENT: B. DILEEP KUMAR B.Com., LL.B.,
XX ADDL. C.M.M. Bangalore.
C.C.No.23573/2014
Complainant : Sri.Murthy.P
S/o Sri.Pillaiah,
Aged about 60 years,
R/at No.34/1, CKC Garden,
2nd Cross, Lalbagh Road,
Bangalore- 560 057.
(Represented by Sri.Visweswaraiah.L - Advocate)
Vs.
Accused : Smt.Hemamalini,
W/o Ravikumar,
R/at Vinayaka Nagara,
Baashettihalli, Doddaballapura Taluk,
Bangalore Rural Diustrict.
(Represented by Sri. -Advocate)
Offence complied of : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of Order : 02-06-2016
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JUDGMENT
The complainant has filed this complaint U/S. 200 of Cr.P.C., against the accused alleging that the accused has committed the offence punishable U/S.138 of Negotiable Instruments Act ( in short for "N.I. Act").
2. The gist of the complaint is as follows;
Complainant and accused are knowing each other from past several years. They are close friends through one Mr.Venkatesh. Accused is running the Garment business and requested the complainant for financial assistance of Rs.5,00,000/- and agreed to repay the same within five months. Complainant paid hand loan of Rs.5,00,000/- to accused in the month of September first week 2013. After completion of five months complainant demanded to repay the amount. Accused issued a cheque for a sum of Rs.5,00,000/- bearing No.358648 dated 10.04.2014 in favour of the complainant, drawn on Canara Bank, Kalidasa Layout, Bangalore. Complainant presented the same for encashment through his banker i.e., Textile Co.Op Bank, Bangalore. The said cheque returned with endorsement "Funds Insufficient" on 30.06.2014. Complainant got issued legal notice to the accused, which returned with endorsement addressee not found. Hence, complainant filed this complaint.
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3. After filing this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded. After taking cognizance case was registered in Crl.Reg.No.III and summons was issued to accused. Accused appeared through counsel and released on bail. Plea was framed, accused pleaded not guilty and claims for trail and then case posted for complainant evidence.
4. In order to prove the case, complainant himself examined as PW.1 and marked in total six as Ex.P.1 to Ex.P.6 and closed his side. The statement of accused under section 313 is framed, read over and explained to the accused. The defence of the accused is of total denial. Further the accused and one witness examined as DW.1 & DW.2 and marked in total four documents as Ex.D.1 to Ex.D.4 and closed her side.
5. In this case, the evidence on record shows that summons trial procedure was adopted and not summary trial. As per the judgment passed by their lordships in Cr.R.P. No.1585/2009 on 12.03.2013 of Hon'ble High court of Karnataka, conducting Denova trial does not arises.
6. Both the counsels submitted their argument. Learned Counsel for the complainant and accused filed judgments of Hon'ble superior courts. The same was considered while appreciating the case.
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7. Now the points that arise for my consideration are as follows;
POINTS
1. Whether the complainant has made out that accused issued a cheque bearing No.358648 dated 10.04.2014 for a sum of Rs.5,00,000/- to discharge the legally enforceable debt due to the complainant and on presentation, it was dishonoured reported with an endorsement as "Funds Insufficient " and you do not make payment of the amount of the same within the time stipulated after issuance of statutory notice and thereby you have committed an offence punishable under section. 138 of N.I. Act.?
2. What Order?
Now my answer to the above points is as follows;
1. Point No.1: In the affirmative
2. Point No.2: As per final order for the following;
REASONS
8. POINT No.1: Complainant filed this complaint against the accused alleging that accused has committed offence punishable under section 138 of Negotiable Instrument Act. Complainant contended that, Complainant and accused are knowing each other and they are close friends through one Mr.Venkatesh. Accused requested the complainant for financial assistance of Rs.5,00,000/- and agreed to repay the same within five months. Complainant paid C.C.23573 of 14 hand loan of Rs.5,00,000/- to accused. After completion of five months complainant demanded to repay the amount. Accused issued a cheque for a sum of Rs.5,00,000/- bearing No.358648 dated 10.04.2014 in favour of the complainant. Complainant presented the same for encashment through his banker. The said cheque returned with endorsement "Funds Insufficient". Complainant got issued legal notice to the accused, which returned with endorsement addressee not found. Hence, complainant filed this complaint.
9. Accused cross examined PW.1 and also led evidence as DW.1. Accused deposed that, she know the complainant since 2013 and she borrowed loan of Rs.2,00,000/- and issued 4 signed blank cheques including Ex.P.1 cheque, two bond papers and two signed DP note for the purpose of security. Thereafter, she sustained loss in the factory hence, by selling the factory agreed to repay the loan amount to complainant. Complainant agreed to purchase the sewing machines and also the furnitures kept in the factory. Thereafter, he has taken costly furnitures and materials worth of Rs.4,00,000/-, but not returned the documents which obtained for the security purpose. Now by misusing the said documents filed this false complaint. Complainant has to pay amount of Rs.4,00,000/- to the accused. Hence, she prays to dismiss the complaint.
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10. The Learned Counsel for the complainant submits that, complainant proved the case both by the oral and documentary evidence brought on record. Complainant clearly establishes the ingredients of section of 138 of Negotiable Instrument Act. The oral and documentary evidence placed by complainant is fully corroborated with each other, it shows the guilt of accused. He submitted that he relied on the decisions and requested to consider while appreciating the case. Hence, prays to convict the accused.
11. Per contra, Learned Counsel for the accused submits that accused rebutted the presumption lies in favour of complainant. Apart from that accused clearly establishes the defence taken by him/her. The oral and documentary evidence of complainant is not corroborated and the same is consisting of number of variations, which shows that the case of complainant is false. Therefore, complainant failed to establish the case. He submitted that he relied on the decisions and requested to consider while appreciating the case. Hence, prays to acquit the accused.
12. As pointed out that accused has taken several defence in his/her support. It is burden on the accused to rebut the presumption. If accused succeeds in rebutting the evidence and presumption lies in favour of complainant, accused will entitle for acquittal. At the same time if accused failed to rebut the C.C.23573 of 14 presumption, then the benefit of presumption goes in favour of complainant and accused is liable for conviction. This court has carefully gone through the judgments relied by the complainant. Observation of Hon'ble courts taken for appreciating this case.
13. The complainant in order to prove his case examined himself as PW.1 and got marked in total six documents as Ex.P.1 to 6. Complainant in his evidence reiterated averments of complaint. He produced Ex.P.1 cheque alleged to be issued by the accused and signature of accused marked as Ex.P.1(a). Ex.P.2 is the endorsement issued by the bank, which reveals that the Ex.P.1 cheque dishonoured for the reason "Insufficient Funds". Ex.P.3 is the office copy of the demand notice, Ex.P.4 is the postal receipt, Ex.P.5 is unserved postal cover and Ex.P.6 is complaint.
14. Complainant in order to prove his case examined himself as PW.1 and reiterated the averments of complaint. Complainant contended that, Complainant and accused are knowing each other. Accused requested the complainant for financial assistance of Rs.5,00,000/- and agreed to repay the same within five months. Complainant paid hand loan of Rs.5,00,000/- to accused. After completion of five months complainant demanded to repay the amount. Accused issued a cheque for a sum of Rs.5,00,000/- in favour of the complainant. Complainant in support of his oral C.C.23573 of 14 evidence produced the cheque issued by accused. The said cheque is marked as Ex.P.1 and Ex.P.1(a) is the signature of accused. Accused in her examination in chief admitted that Ex.P.1 cheque belongs to her and Ex.P.1(a) is his signature. She has taken defence, but it is her burden to prove the same. At this stage, complainant prima-facie established that the accused issued Ex.P.1 cheque in favour of the complainant.
15. Complainant further deposed that, he presented the cheque for encashment through his bank and same returned with endorsement "Insufficient Funds". Thereafter, he intimated the same to accused, but accused not paid the amount. Hence, he issued legal notice to the accused through his counsel. The said notice served on accused. Accused not replied to the said notice. In support of his oral evidence complainant produced copy of the endorsement issued by bank which marked as Ex.P.2. In the said endorsement the reason for dishonor shown as "Insufficient Funds". Complainant produced copy of the legal notice which marked as Ex.P.3. In the said notice complainant requested the accused to pay the amount within 15 days otherwise he is going to lodge complaint. Complainant produced postal receipt which marked as Ex.P.4. Wherefore, the oral evidence of complainant is fully corroborated with the documentary evidence.
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16. On careful examination of all the documents of complainant it is very clear that complaint is filed well within time. He followed all the requirements of negotiable instrument act. The presumption under section 139 of the Act is a presumption of law; it is not a presumption of fact. This presumption has to be raised by the court in all the cases once the factum of dishonor is established. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttable evidence depends on the facts and circumstances of each case. Such evidence must be sufficient to prove the case. Therefore a mere explanation is not sufficient to repeat this presumption of law. Hence it can clearly hold that complainant clearly proved his case.
17. As per negotiable instrument act the presumption is in favour of holder of cheque. Here the holder of cheque is complainant and presumption is in favour of complainant. It is burden on the accused to rebut the above presumption. As per section 118 of Negotiable Instrument Act, presumption has to be raise by the Court in all the cases once the factum of dishonour is established, but it is rebuttal presumption. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and should prove beyond any reasonable doubt. Therefore, a mere explanation is not enough to repel this C.C.23573 of 14 presumption of law. Therefore, it is to appreciate whether accused rebut the evidence or not?
18. Accused has taken a specific stand that, she borrowed Rs.2,00,000/- from the complainant and issued four signed blank cheques including Ex.P.1 and two bond papers consisting signatures of accused and her husband and also two signed DP note. Accused sustained loss in the factory, hence she could not repaid the loan amount. Complainant come forward to purchase the sewing machines and other furnitures worth Rs.4,00,000/- and more. Complainant has to pay Rs.4,00,000/- to accused. It is burden on the accused to establish the said aspect.
19. Accused in order to prove her contention examined herself as DW.1 and also examine one witness as DW.2. She produced four documents which marked as Ex.D.1 to 4. Ex.D.1 is the registration certificate, Ex.D.2 is the LPG receipt, Ex.D.3 is the Aadhar Card and Ex.D.4 is ration card.
20. Accused in support of her case examined Sanjay.B.G. as DW.2. He deposed that, he worked as manager in the factory of accused. Complainant was visiting their factory in order to recover the loan from accused. When accused not repaid the loan amount, C.C.23573 of 14 complainant take away the items which was kept in the factory. Approximately he has taken properties wroth Rs.6,50,000/-.
21. Here, the defence of accused is, she borrowed Rs.2,00,000/- from accused and issued signed blank cheques, stamp paper and DP note. When she failed to repaid the loan amount, complainant has taken the items which was kept in her factory. To establish the said aspect accused has not produced any single document before the court. She has not produced any material to show that she borrowed Rs.2,00,000/- from the complainant and complainant has taken material worth Rs.6,50,000/- instead of the above said Rs.2,00,000/- . When such being the case, oral evidence of accused is not believable. There is no corroborative piece of evidence to accept the version of accused. Accused in her examination in chief deposed that, complainant has taken property worth Rs..4,00,000/-, but DW.2 in his evidence deposed that complainant has taken property wroth Rs.6,50,000/-. Therefore, there is a clear contradiction in the oral evidence. Accused failed to clarify this aspect.
22. The witness examined on behalf of accused contended that, he is the manager of factory. The said witness not produced any proof to show that he is the manager under accused factory. When such being the case, oral evidence that is the manager and complainant has taken material in front of him is not acceptable.
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23. Apart from the above defence accused contended that, she is not residing in the address which is mentioned in the legal notice and complaint. In the cross examination DW.1 admitted that, she is residing at Baashettihalli. The address mentioned in the legal notice and also in the complaint also discloses the same village. Wherefore, the stand of accused that, she was not residing in the said address is not acceptable. Accused herself produced documents to show her address. In Ex.D.2 LPG receipt address mentioned as chennamma building Baashettihalli. In Ex.D.3 Aadhar Card and Ex.D.4 ration card her address mentioned as Raghavendra Block, Srinagara, Bangalore. Wherefore, her own document not supported the case of accused. The said documents discloses that accused is habit of changing the address.
24. The Learned Counsel for complainant cross examined DW.2 wherein he admitted that, accused is residing in the address mentioned in the complaint. This aspect clearly establishes that, accused is deposing false before the court. Complainant inspite of having presumption in his favour proved that accused is residing in the address mentioned in the complaint.
25. DW.1 in her cross examination admitted that, no agreement or endorsement was executed when complainant has taken furniture C.C.23573 of 14 and machines, but at the time of taking the above said materials one Ramachandra was present. Accused not examined the said Ramachandra in this case. As per accused, complainant paid amount to accused through Ramachandra. Apart from that, the said Ramachandra was very much present when complainant has taken materials from the factory of accused. When such being the case, the evidence of Ramachandra is helpful for accused to prove her case. Accused has not taken any pain to examine the said Ramachandra. Wherefore, the version of accused is not acceptable.
26. DW.2 in his cross examination admitted that, he has not prepared any list of articles when complainant has taken material from the factory and he has no knowledge that what are all products kept in the factory. On perusal of this admission, this court is of the opinion that, accused without having any material deposed that complainant has taken material worth Rs.6,50,000/-. Wherefore, the sand taken by accused is not maintainable, she failed to rebut the presumption which lies in favour of the complainant.
27. DW.1 in her cross examination deposed that, complainant has taken ration card and Voter I.D. while taking material from the factory of accused. She has not lodged any police complaint in this regard. This aspect creates doubt about the case of accused. She produced copy of the ration card before the court. When C.C.23573 of 14 complainant has taken the ration card, how can she produce the same before the court is not explained. This aspect shows that, accused is deposing false before the court.
28. Accused contended that he issued blank cheque. What is the effect of issuing a blank cheque is to considered at this stage. Where the cheque is signed leaving blank all other particulars and handed over to the payee authorizing him to fill up the blanks as agreed upon, it is valid in law. Therefore, when such a cheque is dishonoured, Section 138 applies. "ILR 2001 Kar 4127 in the case of S.R.Muralidhar Vs G.Y.Ashok. In this regard Section 20 of the Act is very clear. Here the stand of the accused is not maintainable.
29. Accused contended that, the cheques issued for the purpose of security. The cheque issued as a surety is also comes under the purview of section 138 of N.I.Act. This aspect was observed in the decision which is reported in AIR 2002 SC 3014 ( ICDS Ltd., Vs Beena Shabeer and another ).
30. Further, I relied decision reported in, (2016) 3 SCC 1 (Don Ayengia V/s. State of Assam and another ) wherein it is held that;
C.C.23573 of 14 "Dishonor of cheque issued as a security for discharge of debt or other liability - conviction of guarantor/surety, who had issued cheques as security for payment of amount due by principal debtor, as principal debtor had defaulted and he is committed offence - Person who secondly liable, such as security or guarantor may also be convicted under section 138 of Negotiable Instrument Act. If the ingredients thereof or satisfied".
In this case accused also taken the same defence, that she issued cheque for the purpose of security. Therefore, she is liable to pay the amount.
31. In view of the above all aspect this court is of the firm opinion that, the complainant clearly proved his case both by oral and documentary evidence. Complainant fulfilled all the ingredients of section 138 of Negotiable Instrument Act. Once the said provision is complied, then the presumption U/S.139 of Negotiable Instrument Act supports him. It is rebuttal presumption, but the accused failed to rebut the same. Accused has taken defence in this case, but not proved the same. Her defence is consisting of contradiction. Therefore accused failed to establish her case. Hence complainant clearly proved point No.1. Wherefore I answer point No.1 in the affirmative.
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32. POINT NO.2: In view of the above observation this court proceed to pass the following;
ORDER Acting U/S 255(2) of Cr.P.C., accused is hereby convicted for the offence punishable U/S 138 of N.I. Act and accused is sentenced to pay a fine of Rs.8,10,000/- (Eight Lakhs ten Thousand only). In default thereof accused shall suffer simple imprisonment for 3 (Three) months.
The fine if realized, Rs.8,00,000/-
( Eight Lakhs Thousand only). there from
shall be paid to the complainant as a
compensation, remaining fine amount of
Rs.10,000/- (Ten Thousand only) is
defrayed to the state for the expenses incurred in the prosecution.
The bail bond of the accused stands cancelled after 6 months.
Office to supply the copy of this Judgment to the accused immediately on free of cost.
{Dictated to the stenographer directly on computer, corrected and then signed by me and then pronounced in the open court on this 2nd day of June 2016}.
(B.DILEEP KUMAR), XX ACMM, Bangalore.
C.C.23573 of 14 ANNEXURE List of witnesses examined on behalf of the prosecution:
P.W.1 Murthy.P List of Exhibits marked on behalf of the prosecution:
Ex.P.1 Cheque Ex.P. 1(a) Signature of the accused Ex.P. 2 Bank endorsement Ex.P. 3 Copy of the legal notice Ex.P. 4 Postal receipt Ex.P. 5 Unserved postal cover Ex.P.5(a) Notice Ex.P.6 Complaint
List of witnesses examined for the defence:
DW.1 Hemamalini DW.2 Sanjay.B.G.
List of documents marked on behalf of defence:
Ex.D.1 Registration certificate
Ex.D.2 LPG receipt
Ex.D.3 Aadhar Card
Ex.D.4 Ration card
XX A.C.M.M.,
Bangalore.
C.C.23573 of 14
02.06.2016
For judgment
Judgment pronounced in open court,
vide separate order;
ORDER
Acting U/S 255(2) of Cr.P.C., accused is
hereby convicted for the offence punishable U/S 138 of N.I. Act and accused is sentenced to pay a fine of Rs.8,10,000/- (Eight Lakhs ten Thousand only). In default thereof accused shall suffer simple imprisonment for 3 (Three) months.
The fine if Rs.8,00,000/-
realized, ( Eight Lakhs Thousand only). there from shall be paid to the complainant as a compensation, remaining fine amount of Rs.10,000/- (Ten Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
The bail bond of the accused stands cancelled after 6 months.
Office to supply the copy of this Judgment to the accused immediately on free of cost.
(B.DILEEP KUMAR), XX ACMM, Bangalore.
C.C.23573 of 14