Bangalore District Court
560 027 vs Reptd By Proprietor - A Vijaya Laxmi on 5 April, 2022
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 5th DAY OF APRIL, 2022
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.54790/2019
M/s. Reliance Commercial Finance Ltd.,
Registered Office at No.37, 3rd Floor,
Bharmananda Court, Lalbagh Road, Bengaluru
COMPLAINANT - 560 027
Reptd by its duly constituted Attorney/
Authorized Representative - Deblin Mitra
M/s. Om Chandi Art
ACCUSED Reptd by Proprietor - A Vijaya Laxmi
No.69, 5A, Next to Bhanu Nursing Home, Virat
Nagar, Bommanahalli, Bengaluru - 560068.
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused is convicted
(K. GURUPRASAD)
XIV ADDL. C.M.M., BENGALURU
JUDGMENT
The present complaint is filed under Sec.200 Cr.PC against the accused for the offence punishable under Section 138 r/w 142 of Negotiable Instruments Act.
2. It is the case of the complainant that, the complainant sanctioned and lent SME Secured Loan to the accused. The accused utilized the said loan but failed to make payment towards discharge of her liability. Towards said liability, the accused issued cheque bearing No.701708 dtd.12.3.2019 for Rs.7,93,528/- drawn on Karnataka Bank, HSR Layout branch, Bengaluru in favour of the complainant. When the complainant presented the said cheque for encashment to its banker i.e., HDFC Bank, Richmond Road branch, Bengaluru, same was returned on 21.3.2019 with endorsement "drawers signature differs". Thereafter, when the complainant got issued legal notice by registered post on 3.4.2019 calling upon the accused to pay the cheque amount within 15 days, the legal notice sent by RPAD., was served on the accused on 15.4.2019 while the notice sent by registered post at another address was returned with postal shara "insufficient address" dtd.16.4.2019. The accused has utterly failed to pay the cheque amount in spite of service of said notice and as such accused is guilty of the offence punishable under Section 138 of N.I. Act. Hence this complaint.
3. After filing of this complaint, cognizance was taken for the offence punishable U/s.138 of N.I. Act. Sworn statement of the Authorized Representative of the complainant was recorded. This court was satisfied as to prima facie case made out by the complainant for issuance of the summons. Accordingly, criminal case was registered against the accused for the offence punishable U/s.138 of N.I. Act and summons was ordered to be issued to the accused.
4. In pursuance of court process issued by this court, the accused appeared through her counsel and got enlarged on bail. Thereafter plea was recorded. The accused denied the substance of accusation and claimed for trial.
5. In order to prove case of the complainant, substituted authorized representative of the complainant company has examined herself as PW.1 and got marked Ex.P1 to P9 and closed her side of evidence. After closure of the complainant's side of evidence, statement of the accused U/s.313 of Cr.PC was recorded. The accused denied incriminating materials in the evidence of complainant against her. The accused examined herself as DW.1 but got marked no documents.
6. Heard both counsels. Perused the complaint, evidence on record and court records.
7. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused has issued cheque in question in discharge of legally enforceable debt or liability as contended by it?
2) Whether the complainant further proves that the accused has committed the offence punishable under Section 138 of Negotiable Instruments Act?
3) Whether the complainant is entitled for the relief's as prayed in the complaint?
4) What Order?
8. The above points are answered as under;
Point No.1 to 3 : In affirmative,
Point No.4 : As per the final order,
for the following.......
REASONS
9. Point Nos. 1 and 2: Since these two points are inter linked and to avoid repetition they are taken together for discussion.
10. As regard to limitation to file this complaint, it is clear from Ex.P2 to P8 that when the complainant presented the cheque in question to its banker within three months from the date of such cheque, it came to be dishonoured and that when the complainant got issued statutory notice U/s. 138 of N.I. Act (within 30 days from the date of intimation of dishonor of such cheque) by registered post calling upon the accused to pay cheque amount within 15 days from the date of receipt of said notice, said notice sent by registered post at one address is served on the accused while the said notice sent at another address by RPAD., was returned with postal shara "insufficient address". The accused has not seriously disputed service of statutory notice on her. Therefore, it can be concluded that the statutory notice is duly served on the accused. Hence, the present complaint which is filed after expiry of 15 days from the date of service of such notice and within one month thereafter is in time.
11. As regard to legally enforceable debt or liability, in 2010 (11) SCC 441 - (Rangappa Vs Sri. Mohan), it is held that " The presumption mandated by Sec.139 of the Act includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebutable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the complainant"..............."when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own".
12. If the facts and circumstances of this case are considered in light of above said principle of law, it is clear that the accused has not disputed her signature on the cheque in question. Therefore, statutory presumption arises U/s.139 of N.I. Act in favour of the complainant that Ex.P2-cheque is issued in discharge of debt or liability. The burden of rebutting the said presumption by probable defence is on the accused.
13. It is the case of the complainant that the complainant bank has lent Rs.35 lakhs to the accused and that the accused has issued Ex.P2 cheque towards repayment of the said loan but the said cheque came to be dishonoured. On the other hand, it is specific defence of the accused that she has availed loan of Rs.35 lakhs from the complainant company for Flex Printing Press business. It is further defence of the accused that after Government Ban on Flexes, the Flex Printing Press business has been stopped. It is further defence of the accused that she had given three blank signed cheques to the complainant by way of security, at the time of sanction of said loan. It is specific defence of the accused that she has already paid total sum of Rs.18,37,000/- to the complainant company towards said loan. But the complainant has wrongly disclosed in account statement that accused is still liable to pay Rs.39,67,064/-. It is specific defence of the accused that the complainant bank has misused one of said three cheques and created Ex.P2 and filed this false complaint instead of approaching Debt Tribunal Recovery for recovery of the loan amount.
14. On careful perusal of evidence on record, it is clear that the defence of the accused is not probable nor does it inspire confidence of this court. It is because, it is clear from Ex.P4 to P8 that when the complainant got issued statutory notice U/s. 138 of N.I. Act calling upon the accused to pay the cheque amount, the said notice sent by RPAD., has been served on the accused. In fact accused has not disputed service of notice during trial. It is pertinent to note that even though the accused has received the said notice, the accused has not got issued any reply notice to the said statutory notice by denying his liability to pay the cheque amount and putting forth defence at the earliest that she has given three blank signed cheques to the complainant at the time of sanction of the loan by way of security and that Ex.P2 is one of such cheques misused by the complainant. Any prudent person under similar circumstances would have promptly replied to the said statutory notice denying his liability to pay cheque amount and putting forth such defence at earliest point of time. No explanation is offered by the accused as to why she has not issued reply notice to the said Ex.P4 statutory notice. This inaction on the part of the accused to issue reply notice to Ex.P4 notice raises serious doubt regarding defence of the accused.
15. Further, no doubt DW.1 has admitted during cross- examination (recorded on 9.12.2021) that generally complainant bank takes cheques by way of security from the borrowers at the time of sanction of any loan. Counsel for the accused has relied upon this statement of PW.1 to contend that Ex.P2 is security cheque taken from the accused by the complainant bank at the time of sanctioning the loan of Rs.35 lakhs. However it is settled principle of law that any admission should be clear and unambigious and stray sentence cannot be considered as admission. It is also settled principle of law that at the time of appreciation of evidence of witness, entire evidence has to be considered to ascertain whether any statement is admission or not. In the present case on hand, PW.1 has deposed during cross-examination (recorded on 21.10.2021) that it is false to say that complainant received blank signed cheques from the accused by way of security at the time of disbursing loan to the accused. If this statement of PW.1 is considered along with the statement of PW.1 (which is considered by the counsel for the accused as an admission), it is clear that generally complainant bank takes security cheques from the borrowers at the time of sanction of loan but complainant bank has not received any blank signed cheques from the accused by way of security at the time of disbursing loan to the accused. Therefore on the basis of statement of PW.1, it cannot be concluded that PW.1 has admitted that complainant bank has taken blank signed cheques from the accused by way of security at the time of the loan. Hence statements of PW.1 during cross-examination are not useful to the accused to prove her defence.
16. Furthermore, complainant has produced Ex.P9 loan account statement of the accused mentioned by the complainant. It discloses that the complainant has regularly maintained said loan account by debiting the interest from time to time and crediting the payments made by the accused towards the loan from time to time. It is further clear that accused has already paid Rs.6,78,710.33 towards principal amount and Rs.7,09,963.67 towards interest amount. Therefore, the defence of the accused that though accused has paid amounts towards loan amount, the complainant has not disclosed the same in the loan account cannot be accepted.
17. Counsel for the accused has relied upon decisions in Joseph Vilangadan Vs Phenomenal Health Care Services, (2019) 5 SCC 418 - (Basalingappa Vs Mudibasappa), Ram Kewal Mahto Vs Shiv Kumar Mahto, Sh. Deen Dayal Vs Sh. Sunder Lal, Sh. Balwant Singh Vs Sh. Angad Makol, Krishna Janardhan Bhat Vs Dattatraya G. Hegde, Vijay Vs Laxman & another, M.S. Narayana Menon Vs State of Kerala, M/s.Shankara Building Products Ltd., Vs M/s. SVR Steel Suppliers, Zeeshan Khan Vs Basruddin Malik, Canara Bank Vs Canara Sales Corporation & others and 2022 LiveLaw (SC) 275
- (Tedhi Singh Vs Narayan Dass Mahant) and contended that accused has issued blank signed cheques to the complainant by way of security at the time of loan and that complainant has misused the said cheques and filed this complaint and that there is no legally enforceable debt or liability from the accused to complainant and that instead of approaching appropriate forum, the complainant has misused this forum which is misuse of process of law.
18. There is no dispute regarding principles of law laid down in the above said decisions. However the accused has utterly failed to prove that Ex.P2 is security cheque given by the accused to the complainant at the time of the loan. Even though accused has entered the witness box and examined in chief as DW.1, she has not subsequently offered herself for cross-examination and as such evidence of DW.1 cannot be considered in proof of the defence because complainant did not get an opportunity to cross examine DW.1 and test the veracity of evidence of DW.1. Even otherwise it is held in 2016 (10) SCC 458 (Sampelly Satyanarayan Rao vs Indian Renewable Energy), that the question whether a post-dated cheque is for discharge of debt or liability depends on the nature of the transaction. If on the date of the cheque, liability or debt exists or the amount has become legally recoverable, the section 138 is attracted. Post dated cheque disbursed as security towards repayment of installment of already disbursed loan amount will come under scope of Sec.138 of N.I. Act. Similarly in 2019 (4) SCC 197 - (Beersingh Vs Mukesh Kumar), it is held that even if blank signed cheque is given duly signed and voluntary made over to payee, the presumption under Section 139 of the Negotiable Instruments Act arises irrespective of whether the cheque was post dated cheque or blank cheque for filling up by payee or any other person in absence of evidence of exercise of undue influence or coercion. Therefore, in view of above said two decisions of Hon'ble Supreme Court, the decisions relied upon by counsel for the accused is not helpful. The arguments of accused also cannot be accepted.
19. In view of my above discussion, I am of considered opinion that the accused has utterly failed to prove or probabalize her defence and thereby to rebut statutory presumption under Sec.139 of N.I. Act in favour of the complainant. It appears from the evidence on record that defence put up by the accused is only an afterthought without any basis. Unless and until the accused rebuts the statutory presumption with convincing and cogent evidence, burden cannot be shifted on the complainant. As discussed, the complainant has placed sufficient materials on record to establish its contention put up by it. The evidence on record is sufficient to accept the case of the complainant that accused had issued Ex.P2-cheque towards discharge of legally enforceable debt or liability. The complainant has proved all the requirements of Sec.138 of N.I. Act, so as to constitute the offence against the accused. Therefore, Point Nos.1 & 2 are in affirmative and answered accordingly.
20. Point No.3: As discussed in connection with Point Nos.1 & 2, the complainant has proved its case as to commission of the offence punishable U/s.138 of N.I. Act by the accused. The punishment prescribed for the said offence is imprisonment for a period which may extend to two years or with fine. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, provisions of Sec.117 of N.I. Act, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), etc., this court is of the considered view that it is just and desirable to impose fine of Rs.10,00,000/- and out of the said amount a sum of Rs.10,000/- has to be remitted to the State and the remaining amount of Rs.9,90,000/- is to be given to the complainant as compensation as provided U/s.357(1) of Cr.PC and accordingly Point No.3 is answered in Affirmative.
21. Point No.4: For the reasons discussed in connection with Point Nos.1 to 3 this court proceed to pass the following......
ORDER Acting under Section 255(2) of Cr.PC accused is hereby convicted for the offence punishable under Section 138 of Negotiable Instruments Act. The accused shall pay a fine of Rs.10,00,000/- for the offence punishable U/s.138 of N.I. Act. In default of payment of fine amount, the accused shall under go simple imprisonment for a period of nine months.
By exercising the power conferred U/s.357(1) of Cr.PC., out of total fine amount of Rs.10,00,000/-, a sum of Rs.9,90,000/- is ordered to be paid to the complainant as compensation and Rs.10,000/- is ordered to be remitted to the State.
The bail bond of the accused stands cancelled. The cash security deposited by the accused is ordered to be continued till expiry of the appeal period.
Supply the free copy of this judgment to the accused forth with.
(Dictated to the stenographer, transcript thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 5th Day of April, 2022) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru ANNEXURE Witnesses examined for the complainant:
CW.1 : Deblin Mitra
Witnesses examined for the defence:
DW.1 : Vijaya Laxmi
Documents marked for the complainant:
Ex.P1 : Notarized copy of Power of Attorney
Ex.P2 : Cheque
Ex.P2(a) : Signature of the accused
Ex.P3 : Bank endorsement
Ex.P4 : Legal notice
Ex.P5 & 6 : Postal receipts
Ex.P7 : Postal acknowledgment
Ex.P8 : Returned postal cover
Ex.P9 : Loan account statement
Documents marked for the defence:
NIL
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU