Bangalore District Court
State Bank Of India, Racpc Yelahanka vs Ramesh on 16 January, 2024
1 CC No. 1093 / 2021
KABC030040482021
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 16th day of January 2024
: PRESENT :
Sri.C.S. SHIVANAGOUDRA, B.COM., LLM
XXVI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Case No. : C.C No. 1093 / 2021
Complainant : State Bank of India
Retail Assets Central
Processing Centre (RACPC),
No.5/1, Prestige Star Building
1st Floor, Ring Road,
Near Mother Dairy,
Yelahanka New Town,
Bengaluru - 560 065
Represented by its
2 CC No. 1093 / 2021
Authorized Officer /
Manager S.Sarvanan
(By Sri.G.M.R. Adv.)
Vs.
Accused : Mr.Ramesh,
s/o.Mr.Padma Ram
Aged about 27 years
# Bashettihalli village
and post,
Doddaballapur,
Bangalore Rural - 561 203
Mobile : 9844321703
Mr.Ramesh
S/o.Mr.Padma Ram,
Aged about 27 years,
Office at M/s Mahalakshmi
Hardware and Electricals,
#Basavaraj Building,
Scout Camp Road,
Opp. Railway Station,
3 CC No. 1093 / 2021
Doddaballapur,
Bangalore Rural - 561 203
Mobile 9844321703
(By Sri.HRM Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Date of Order : 16.01.2024
Final order : Accused is convicted
*********
4 CC No. 1093 / 2021
JUDGMENT
This complaint is filed by the Complainant bank against the Accused for the offense punishable u/s 138 of Negotiable Instruments Act.
2. The brief facts of complaint case is that, the accused has obtained vehicle (Car) loan in sum of Rs. 8,75,000/ under loan account No.37743705967 from the Complainant bank and the accused had taken said loan for the purpose of purchase of vehicle (Car) and he has executed loan cum Hypothecation agreement dated 08.06.2018 and other necessary loan documents in favour of the Complainant bank. Accordingly the Complainant bank has sanctioned above said loan in favour of the accused and disbursed the loan amount to the accused and accused had purchased vehicle - Maruti Vitara Breeza ZDI bearing No.KA 50 Z 3796 and released in the name of accused. 5 CC No. 1093 / 2021
3. It is further stated that, after availing the car loan by the accused he become irregular and accused has not repaid total loan amount as agreed hence as on 28.10.2016 the accused has outstanding balance amount of Rs.9,11,104/ plus interest and other exepences. It is further stated that in order to repay the outstanding due amount the accused had issued a cheque bearing No.000009 dated 28.10.2019 for Rs.9,11,104/ drawn onRBL Bank ltd. (Formerly Ratnakar Bank Ltd.), D Cross Main Road, Doddaballapura Bangalore Rural in favour of the complainant. But when the said cheque was presented for encashment, the same was returned as "funds insufficient" on 29.10.2019. Thereafter the Complainant issued legal notice on 14.11.2019 through RPAD, the said notice issued to the accused was duly serve on the accused. Despite, the 6 CC No. 1093 / 2021 accused failed to repay the cheque amount. Hence, the complaint.
4. After filing this complaint, this court took cognizance of the offense and registered the criminal case against the accused and summons was issued to him. In response to summons, he appeared before the court through his counsel and he was enlarged on bail. Thereafter plea was recorded and accused pleaded not guilty.
5. Earlier the Complainant bank has represented by its Chief Manager by name Brajesh Kumar and subsequently the bank has substituted its been another Chief Manager by name Smt.Nagamani B and she has been examined as PW1 and she has produced 13 documents as per ExP1 to 13. Subsequently the bank has been substituted its another Chief Manager by name S Sarvanan and he has been examined as PW2 and he has got marked 7 CC No. 1093 / 2021 one document as per Ex.P14 along with earlier Ex.P1 to P13. On the other hand this court has given sufficient opportunities to the accused but accused has not chosen to lead his defense evidence and no documents got marked on his behalf.
6. On perusal of entire case file and evidence available on record the following points would arise for my consideration are:
1) Whether the Complainant bank proves that, the accused to discharge of legally recoverable debt or other liability had issued alleged cheque bearing No.000009 dated 28.10.2019 for Rs.9,11,104/ drawn on RBL Bank ltd.
(Formerly Ratnakar Bank Ltd.), D Cross 8 CC No. 1093 / 2021 Main Road, Doddaballapura Bangalore Rural ?
2) Whether the Complainant further proves that, on presentation of said cheque, same was returned unpaid as "Insufficient funds" and despite of giving legal notice, he failed to pay the cheque amount, thereby he committed an offense punishable under section 138 of NI Act ?
3) What order?
7. Heard on both sides and perused written arguments submitted by the learned counsel for Complainant and I perused the materials available on record.
8. My findings on the above points are as under:
Point No.1 : In the Affirmative, Point No.2 : In the Affirmative, 9 CC No. 1093 / 2021 Point No.3 : As per the final order for the following:
REASONS POINTS. NO.1 and 2 :
Both points 1 and 2 are taken up together for common discussion to avoid repetition.
9. The Complainant has stated that, the accused has borrowed a vehicle loan of Rs.8,75,000/ in the year 2018 from the Complainant bank by executing necessary loan documents. After obtaining the loan amount the accused became defaulter in paying loan amount. In order to repay the outstanding amount the accused has issued alleged cheque. The Complainant Chief Managers have been examined as PW1 & PW2 by way of affidavits which are replica of complaint averments and the PW1 & PW2 have also produced authorization letters i.e. Ex.P1, 8 & 14 10 CC No. 1093 / 2021 issued by the Complainant bank, wherein, the Complainant bank has given an authority to the Chief Managers to file the present complaint and deposed on behalf of the Complainant bank. Therefore the Complainant is having an authority to represent the case on behalf of the Complainant bank. The PW1 has also produced ExP2 cheque, which was issued by the accused towards repayment of outstanding amount of Rs.9,11,104/. On presentation of the said cheque it was returned as "Funds insufficient" as per ExP3 banker memo dated 29.10.2019. Thereafter the Complainant issued legal notice on 14.11.2019 through RPAD, the notice sent through RPAD has been duly served on accused it can be seen from ExP4 to 7, notice, postal receipt, postal acknowledgment and postal track report.
10. As far as service of legal notice is concerned, the complainant has produced Ex.P4 legal notice, Ex.P5 Postal 11 CC No. 1093 / 2021 receipt and Ex.P6 postal acknowledgment. In this regard if we go through the materials on record, the address as mentioned in the legal notice as well as cause title of the complaint are one and the same. Thus, it is abundantly clear that, the legal notice sent by way of registered post acknowledgment due to the proper and correct address of the accused. Therefore, section 27 of General Clauses Act and 114 of Indian Evidence Act, comes into play and thereby court can safely presume the service of legal notice. As such, it can be conveniently infer that, there is service of legal notice to the address of the accused as mentioned in the legal notice as well as cause title of the complaint. Hence it can be taken that the legal notice served on accused.
11. Before going to the merits of this case first of all I would like to glance over the law pertaining to the instant case. Admittedly the present case filed under section 138 of 12 CC No. 1093 / 2021 Negotiable Instruments Act to bring home guilt against the accused, the Complainant society must prove the following ingredients of Section 138 of Negotiable Instruments Act.
i) That, there is a legally enforceable debt.
ii) That the cheque was drawn from account of bank for discharge in whole or in part of any debt or other liability which presuppose a legally enforceable debt;
iii) Cheque so issued had been returned due to insufficiency of funds.
12. It is true that, once the cheque relates to the accused and his signature on the said cheque is proved, an initial presumption as contemplated u/s. 139 of Negotiable Instruments Act has to be raised by the court in favor of the Complainant. Sec. 139 of the Negotiable Instrument Act contemplates that it shall be presumed unless contrary is proved that the holder of the cheque received the cheque of the nature referred to in the Sec.138 for the discharge of the 13 CC No. 1093 / 2021 whole or in part any debt or liability. The presumption referred to u/s 138 of Negotiable Instruments Act is mandatory presumption and in general presumption.
13. In a proceeding under section 138 of NI Act, the first and foremost ingredient is that the alleged cheque must be drawn on account maintained by the accused and signature on alleged cheque belongs to him. Admittedly the alleged cheque and signature belongs to accused. The accused has not at all disputed about the signature as well as the cheque. Thus, it is clear that the Complainant has complied all the essential ingredients of Section 138 of NI Act to punish the accused for the alleged offense. Since the accused has not disputed the cheque and the signature, the presumption u/s 139 of NI Act has to be drawn as held by the Hon'ble Supreme Court in Rangappa vs. Mohan reported in AIR 2010(11) SCC 441. But the presumption 14 CC No. 1093 / 2021 available under the section is rebuttal in nature but the accused failed to rebut the evidence of PW1 and PW2. Though the accused has made crossexamination of PW2 but nothing has been elicited from the mouth of the complainant.
14. Herein this case the defense of the accused is that, though he has admitted alleged loan availed by him for purchase of vehicle Maruti Vitara Breeza ZDI plus bearing Regn No. KA 50 Z 3796, accordingly even the accused has admitted that, he has purchased the above said vehicle by using alleged loan amount. However it is the specific defense of the accused is that, the complainant bank has already sold out the said car and utilized the said sale consideration amount to the loan account of the accused, hence, now the accused is not liable to pay any loan amount to the complainant bank. It is further case of the accused is 15 CC No. 1093 / 2021 that, at the time of availing alleged loan the complainant bank officials have obtained blank signed cheque of the accused and misused the same in the instant case.
15. On going through the rival contentions of either side, there is no dispute with regards to vehicle loan availed by the accused from the complainant and purchased the car by using alleged loan amount. Even, in order to prove the same the complainant bank has produced all necessary loan documents which are got marked as Ex.P9, 10, 12 and 13 loan application, loan agreement, loan account statements, these all documents are also established the alleged loan availed by the accused. However, according to the accused the complainant bank has already sold out the car and utilized sale proceeds amount to the loan account hence accused is not liable to pay the loan amount. As far as vehicle sold out by complainant bank, the complainant bank 16 CC No. 1093 / 2021 has also produced certificate of sale which is got marked as Ex.P11 wherein it is clearly mentioned that, on 16.03.2020 that too, after filing of this case, the complainant bank has sold out the said car to one Ramesh s/o. Padma Ram for Rs.6,90,000/. Even the said amount is also reflected in the loan account statement of the accused i.e. Ex.P12. At the same time, I would like to perused entire loan account statement, no doubt as on the date of issuance of alleged cheque the accused was due the cheque amount. However after the sale of the said car the amount of Rs.6,90,000/ was adjusted to the loan account. However, according to the accused the complainant bank has already recovered the entire loan amount by selling the said car, hence accused is not liable to repay the loan amount. But in order to prove the same the accused has not produced any materials before the court. If at all the accused has repaid the entire loan 17 CC No. 1093 / 2021 amount, what prevented him to produce the documents for the same, contrary to that, the complainant has filed in his additional affidavit on 15.07.2023 wherein he has clearly disclosed that, after adjusting sale proceeds amount of Rs.6,90,000/ the accused was due an amount of Rs.4,33,187/ even in order to prove the same the complainant bank has produced further loan account details which is got marked as Ex.P13 wherein it is mentioned that, as on 08.07.2022 the accused was due Rs.4,33,187/ pertaining to the alleged loan account. Therefore the complainant bank has successfully proved that the accused was due the loan amount by producing relevant documents but the accused has failed to prove that he has already repaid entire loan amount. Hence I am of the considerable opinion that, the amount as mentioned in the alleged cheque 18 CC No. 1093 / 2021 is a legally recoverable debt and accused had issued alleged cheque for repayment of legally recoverable debt.
16. It is another defense of the accused is that, at the time of availing alleged loan amount the complainant bank officials have obtained blank signed cheque of the accused and misused the same in the instant case. Hence according to the accused he has issued alleged cheque only for the purpose of the security of the loan amount.
17. In this regard I would like to relied upon a judgment of our Hon'ble Supreme Court decided in Cril. Appeal No.12691270 of 2021 arising out of SLP (Criminal) No.252253 / 2020 in the matter of Sripati Singh (Since deceased) though his son Gourav Singh vs. The State of Jharkhand and another wherein the Hon'ble Supreme Court has observed that, the dishonour 19 CC No. 1093 / 2021 of cheque issued as a security can also attract offence under section 138 of Negotiable Instruments Act. Therefore the said defence raised by the accused with regards to cheque issued for the purpose of security is not attract under sec 138 of NI act is not tenable.
18. Therefore it is well settled principles of law is that, when the accused admitted cheque and signature it shall be presumed that he has issued cheque for repayment of legally recoverable debt unless contrary is proved. In this regard, I relied upon a recent judgment of our Hon'ble Supreme Court in Crl.A.Nos.12331235 of 2022 (Arising out of SLP (Crl) Nos.74307432/22 @ D.No.13470/2019 in the matter of P.Rasiya V/s Abdul Nazer and another, wherein their lordships have held that, " in a cheque bounce case U/Sec.138 of the NI Act the 20 CC No. 1093 / 2021 complainant is not required to spell out in the complaint, the nature of transaction or source of funds since the onus is on the accused to prove that the cheque was issued not towards a debt or liability."
Therefore in view of the above recent ratio of our Hon'ble Apex Court, when the accused admitted the cheque in dispute and signature on it is belongs to him, it shall be presumed that the said cheque was issued by the accused for discharge of legally recoverable debt.
19. Therefore as on date of cheque he was due of loan amount which was legally enforceable debt and it also presumed that, the Ex.P2 cheque was issued by the accused for repayment of legally recoverable debt. Therefore the 21 CC No. 1093 / 2021 presumption has to be raised in favor of the complainant as contemplated under section 139 of N.I. Act.
20. Thus, it is clear that, the Complainant has complied all the essential ingredients of Section 138 of NI Act to punish the accused for the alleged offense. Since the accused has not disputed the cheque and the signature the presumption u/s 139 of NI Act has to be drawn as held by the Hon'ble Supreme Court in the case reported in AIR 2020 Supreme Court 945 in the matter of APS Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers and others wherein their lordships held that, Negotiable Instruments Act (26 of 1881), S.138, S139 Dishonour of cheque - Legally enforceable debt or liability - Presumption as to -
Accused admitting issuance of cheque, his signature on cheque 22 CC No. 1093 / 2021 and that cheque in question was issued for second time after the earlier cheques were dishonoured -
Once the issuance and signature on cheque is admitted, there is always a presumption in favour of complaint that there exist legally enforceable debt or liability No evidence led by accused to rebut the presumption - Plea by accused that cheque was given by way of security and same has been misused by complainant, not tenable - Accused liable to be convicted. .
21. So on going through the above judgment of our Hon'ble Supreme Court, when the accused admitted issuance of cheque and his signature on cheque there is always a presumption in favor of Complainant that their exist legally enforceable debt or liability when no evidence 23 CC No. 1093 / 2021 lead by accused to rebut the presumption. Even also cleared from the above ratio that once there is no rebuttal evidence, accept oral defence, presumption cannot be held to be rebutted. In the case on hand, in spite of given sufficient opportunities to the accused but the accused has not adduced either his oral or documentary evidence to rebut the case of the Complainant.
22. Therefore the materials placed by the Complainant corroborates with each other with respect to the involvement of legally recoverable debt under Ex.P2. So in the absence of disproof of Complainant case, I have no hesitation to believe the case of the Complainant i.e. it has proved their case as per the standard of proof by producing relevant and cogent evidence. Even the entire materials indicates to the court that, Complainant has filed the Complaint in a proper manner i.e. within the stipulated time under section 138 of 24 CC No. 1093 / 2021 Negotiable Instruments Act and further there is no endeavors on behalf of the accused to disprove the case of the Complainant by producing relevant and cogent evidence. Accordingly I am of the considered opinion that the accused is liable to be convicted for the offence punishable under section 138 of Negotiable Instruments Act and I answered these points No.1 and 2 in the affirmative. POINT No.3
23. In view of the findings on points No. 1 and 2 to compensate the holder in due course the accused who has issued cheque without having sufficient funds in him account has to be punished suitably. As I have already discussed above, after filing of this case the complainant bank has sold out the car which was purchased by availing alleged loan amount and adjusted the said sale consideration amount of 25 CC No. 1093 / 2021 Rs.6,90,000/ to the loan account. The alleged cheque amount of Rs.9,11,104/ therefore sale consideration amount of Rs.6,90,000/ should be deducted in the cheque amount i.e. (Rs.9,11,104 - Rs.6,90,000/ = Rs.2,21,104/) Therefore now the cheque amount is Rs.2,21,104/. Considering the facts and circumstances, the accused is liable to pay the cheque amount with a reasonable interest thereon as compensation and expenses to Complainant bank. Hence, I proceed to pass the following:
ORDER Acting u/s 255(2) of Cr.P.C., the accused is convicted for the offense punishable u/s 138 of Negotiable Instruments Act and sentenced to pay a fine of Rs.3,06,000/( Rupees Three Lakhs Six Thousand only) 26 CC No. 1093 / 2021 In default of payment of fine amount he shall under go simple imprisonment for 3 (three ) months.
Further acting u/s 357(1) of Cr.P.C. a sum of Rs.3,04,000/( Rupees Three Lakhs Four Thousand only) is order to be paid to Complainant as compensation and remaining amount of Rs.2,000/(Rupees Two Thousand only) shall go to the state.
It is made it clear that in view of section 421 of Cr.P.C. the liability of accused to pay the compensation will not be absolved even if he under go default sentence.
The bail bond executed by the accused and surety stand canceled.
Supply free copy of judgment to the accused.
(Typed directly on computer to my dictation by the stenographer in the chamber, corrected and then pronounced by me in the open court on this the 16th day of January 2024) (C.S.Shivanagoudra) XXVIth ACMM, Bangalore.
27 CC No. 1093 / 2021ANNEXURE Witnesses examined for the Complainant:
PW.1 : Nagamani B PW.2 : S. Saravanan Witness examined for the accused: DW.1 : Nil
List of Documents marked for the Complainant:
Ex. P1 Authorization letter Ex. P2 Cheque. Ex. P2(a) Signature of the accused. Ex. P3 Bank Endorsement. Ex. P4 Office copy of Legal Notice. Ex. P5 Postal Receipt - 2 Nos. Ex. P6 Postal acknowledgment. Ex. P7 Track Report. Ex. P8 Authorization letter. Ex. P9 Loan application. Ex. P10 Agreement. Ex. P11 Certificate of sale. Ex. P12 Account statement. Ex. P13 Enquiry report. Ex. P14 Authorization letter.
List of Documents marked for the accused:
NIL XXVI ACMM, Bangalore.