Bangalore District Court
Shree Vijaya Co-Operative vs Sri.Chikkegowda on 3 November, 2016
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 3rd day of November 2016
:PRESENT:
SMT.SHEILA B.M. M.Com. LL.M.
XXVI Addl.C.M.M., Bangalore City.
JUDGMENT U/S 355 OF Cr.P.C
Case No. : C.C No.10236/2016
Complainant : Shree Vijaya Co-operative
Housing Society Ltd.
No.183, 12th Cross,
Mahalakshmipuram
WCR, 2nd Stage,
Bangalore - 86
Rep. by its Secretary
Sri.K Ningaiah
(By M/s.KLC - Adv.)
Accused : Sri.Chikkegowda
Residing at No.12,
11th Cross, BK Nagar,
Yeshwanthpura
Bangalore-22
(By Sri. HMG - Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Final Order : Accused is acquitted
Date of Order : 3.11.2016.
2 CC No 10236 of 2016
The complainant has filed this complaint against the
Accused for the offence punishable u/s 138 of Negotiable
Instruments Act.
2. The Complainant has stated that the accused wife
Smt.Jayamma availed surety loan of Rs.25,000/- on
13.11.2001. The accused had agreed to indemnify the said
loan and had executed indemnity bond. The accused wife
defaulted in repayment of loan After repeated request
having no alternative the Complainant had approached the
accused the accused issued cheque dated 04.02.2016 for
Rs.93,756/-. When the said cheques were presented it was
dishonoured as "Funds Insufficient" on 16.02.2016. Legal
notice was issued on 09.03.2016 which has been served on
12.03.2016. The accused has not paid the cheque amount.
Hence the complaint.
3. The accused appeared before the court through his
counsel and was enlarged on bail. Copies of the papers
3 CC No 10236 of 2016
were furnished to them as required u/s 207 of Cr.P.C. The
summons and the substance of the accusation for the
offence punishable u/s 138 of Negotiable Instruments Act
was read over and explained to the accused. The accused
pleaded not guilty and claimed trial.
4. The Complainant has examined its Secretary as
PW1 and got marked Ex-P1 to P14. After closing the
Complainant side, the statement of the accused u/s 313 of
Cr.P.C. was recorded and the accused has denied the
incriminating evidence. The accused has not chosen to led
his defence evidence.
5. Heard arguments.
1) Whether the complainant proves that the
cheque bearing No.616721 dated :
04.02.2016 for a sum of Rs.93756/-
drawn on Vijaya Bank, Bangalore
returned unpaid for the reason that the
funds insufficient in the account of the
Accused? If so whether the Complainant
proves that the Legal notice has been
served on the accused?
4 CC No 10236 of 2016
2) Whether the accused proves that, cheque
bearing No.616721 dated : 04.02.2016
was not issued in discharge of any legally
recoverable debt in favour of the
Complainant
3) Whether complaint is maintainable?
4) What order ?
6. My findings on the above points are as under:
Point No.1 : In the affirmative,
Point No.2 : In the affirmative,
Point No.3 : In the negative,
Point No.4 : As per the final order for the
following reasons
REASONS
POINT NO.1:
7. PW1 has stated that the accused wife
Smt.Jayamma availed surety loan of Rs.25,000/- on
13.11.2001. The accused wife defaulted in repayment of
loan After repeated request having no alternative the
Complainant had approached the accused. The accused
issued cheque dated 04.02.2016 for Rs.93,756/- as per Ex-
5 CC No 10236 of 2016
P2. When the said cheques were presented it was
dishonoured as "Funds Insufficient" on 16.02.2016 as per
Ex-P3.
8. It has been suggested to PW1 that they have
misused the cheque Ex-P2 which is of the year 2009. The
accused has not denied his signature in Ex-P2 nor it is
suggested that Ex-P2 cheque does not pertain to his
account. In the absence of any contrary evidence it can be
held that Ex-P2 cheque pertains to the account of the
accused and when presented it has been retuned for
"Insufficient Funds" in the account of the accused.
9. Legal notice has been issued to the accused on
19.03.2016 as per Ex-P4. It has been served to the
accused on 12.03.2016. Ex-P6 is a RPAD acknowledgement
which discloses that it has been signed by Jayamma.
Jayamma is wife of accused. It has been suggested to PW1
that notice has not been received by the accused. No
6 CC No 10236 of 2016
suggestion has been put to PW1 that the address
mentioned in the Legal notice is not correct.
10. The Hon'ble SC in K.Bhaskaran vs. Sankaran
Vaidhyan Balan and another 1999 SCC (Cri) 1284 has
observed
"nonetheless the principle incorporated in
sec. 27 can profitably be imported in a
case whether the sender the despatch the
notice by post with correct address written
on it. Then it can be deemed to have been
served on the sendee unless it proves that
it was really not served and that he was
not responsible for such non service".
11. Any other interpretation can be proved to lead to a
very tenuous position as a drawer of the cheque who is
liable to pay the amount would resort to the strategy of
subterfuge by successfully avoiding the notice.
12. The Hon'ble SC in Appeal Crl. 767 / 2007,
indiankanoon.org/doc/272690 at para 17 has held
It is also to be borne in mind that the
requirement of giving of notice is clear
7 CC No 10236 of 2016
departure from the rule of Criminal Law,
where there is no stipulation of giving of a
notice before filling a complaint. Any
drawer who claims that he did not receive
the notice sent by post, can, within 15
days of receipt of summons from the court
in respect of the complaint under section
138 of the Act, make payment of the
cheque amount and submit to the court
that he had made payment within 15
days of receipt of summons (by receiving
a copy of complaint with the summons)
and therefore, the complaint is liable to be
rejected. A person who does not pay
within 15 days of receipt of the summons
from the court along with the copy of the
complaint under section 138 of the act,
cannot obviously contend that there was
no proper service of notice as required
under section 138, by ignoring statutory
presumption to the contrary under section
27 of the GC Act and section 114 of the
evidence act. In our view, any other
interpretation of the proviso would defeat
the very object of the legislature. As
observed in Bhaskarana case (supra), if
the giving of notice in the context of Clause
(b) of the proviso was the same as the
receipt of notice a trickster cheque drawer
would get the premium to avoid receiving
the notice by adopting different strategies
and escape from legal consequences of
section 138 of the act.
8 CC No 10236 of 2016
13. The said decision applies to the case on hand.
The accused after receiving summons from the court has
not paid the cheque amount within 15 days and therefore
in view of the above decision he cannot contend that there
has been no proper service of notice. In view of the above
discussion point no. 1 is answered in affirmative.
POINT No.2
14. Once the cheque relates to the accused and his
signature on the said cheque is proved an initial
presumption as contemplated u/s. 138 of Negotiable
Instruments Act has to be raised by the court in favour 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 whole or in part any debt or liability. The presumption
referred to u/s 138 of Negotiable Instruments Act is
9 CC No 10236 of 2016
mandatory presumption and in general presumption. But
the accused is entitled to rebut the said presumption.
What is required to be established by the accused in order
to rebut the presumption is different from each case under
given circumstances. But the fact remains that mere
plausible explanation is not expected from the accused and
it must be more than plausible explanation by way of
rebuttal evidence. In other words the defence raised by
way of rebuttal evidence must be probable and capable of
being accepted by the court.
15. The defense of the accused is that he had money
transaction with Varadappa one of the Directors of the
society and there was misunderstanding between
Varadappa and accused with regard to interest; that
documents has been created in the name of the accused.
The accused has not produced any documents to show that
he had money transaction with Varadappa nor has
examined any witness in this regard. Accused has thus
10 CC No 10236 of 2016
failed to prove his defense. The accused had not denied the
signature in the impugned cheque Ex-P2. It has been
suggested that Ex-P2 cheque was given in the year 2009
by this suggestion it is admitted that that cheque belongs
to the accused. Once this fact has been acknowledged, sec.
139 of the Act mandates the presumption that the cheque
pertain to legally enforceable debt or liability. The defense
raised by the accused was not probable. Further more the
perusal of the record shows hat the accused had belated
taken up the defense the cheque has been misused at the
time of cross examination of PW1. Prior to the filing of the
Complainant the accused had not even replied to the notice
sent by the Complainant since that would have offered any
opportunity to raise the defense at earlier stage.
16. The Complainant in the pleadings has stated that
the wife of the Complainant had defaulted in repayment of
the loan and even on demand she had not paid the amount
so they had approached the accused as he had given
11 CC No 10236 of 2016
undertaking to indemnify the loan and the accused had
issued cheque. However during cross-examination PW1
has stated that the recovery officer had informed about the
award and for payment said award amount accused had
issued the cheque. It is seen that there is no pleading that
towards award amount the accused had issued cheque.
17. The materials before the court discloses that loan
for Rs.25,000/- was availed in of the year 2001. Ex-P13
account statement discloses that as on 14.07.2016 the loan
balance is Rs.24,000/- and interest is about Rs.64,465/-
total due is Rs.96,115/- No documents has been produced
by the Complainant to show that the debt has been
acknowledged during the period of limitation. The
Complainant also has not produced the documents to show
that they have obtained the award in this case.
18. The Hon'ble SC in SASSERIYIL Joseph vs.
Devassia, 2001 Cri.LJ 24 has held that,
12 CC No 10236 of 2016
Penal provision u/s 138 of NI Act is not
attracted when the cheque in question
have been issued by the accused for due
which was barred by limitation.
19. The said decision applies to the case on hand. In
the present case the cheque has been issued in respect of
debt which is time barred. Hence the complaint u/s 138 is
not maintainable.
20. In view of the discussion made in para No.17 the
accused is able to prove that the cheque has not been
issued in respect of legally recoverable debt. The
presumption u/s 118 and 139 of Act stands rebutted the
Complainant has not placed any other acceptable evidence.
In view of the above discussion point No.2 is answered in
the affirmative.
POINT NO.3
21. The complaint is filed by K Ningaiah Secretary of
the Complainant Housing Society and he has given
evidence in this case. Ex-P1 is the byelaw. Rule 73 deals
13 CC No 10236 of 2016
with the duties of Chief Executive Officer. Sub Rule 7
states
¸ÀAWÀPÁÌV ªÀÄvÀÄÛ EzÀgÀ ¥ÀgÀªÁV ¸ÀºÀPÁgÀ ¸ÀAWÀUÀ¼À J¯Áè
zÀ¸ÁÛªÉÃdÄUÀ½UÉ ¸À» ªÀiÁr CªÀÅUÀ¼À£ÀÄß C£ÀÄ¥ÀæªÀiÁtô¸ÀvÀPÀÌzÀÄ.
ªÀÄvÀÄÛ ¸ÀAWÀzÀ ±ÁSÁ PÀbÉÃjUÀ½UÉ ¨ÉÃn ¤Ãr ªÀgÀ¢UÀ¼À£ÀÄß
ªÀÄAqÀ°UÉ ¸À°è¸ÀĪÀÅzÀÄ.
Sub Rule 16 states
¸ÀAWÀzÀ ¥ÀgÀªÁV zÁªÉ ºÀÄÁqÀĪÀÅzÀÄ PÉÆÃmïð
PÀbÉÃj ªÀåªÀºÁgÀUÀ¼À°è ¥Àæw¤¢ü¸ÀĪÀÅzÀÄ ªÀÄvÀÄÛ
zÁªÉUÉ UÀÄjAiÀiÁUÀĪÀÅzÀÄ
22. From the byelaw it is seen that the byelaws does
not empower the Secretary to file complaint. No document
has been produced to show Secretary and Chief Executeive
Officer are one and the same.
23. In ILR 2014 page 2168 our Hon'ble High Court
has held "The complaint instituted by the appellant in the
Trial Court is not maintainable for the sole reason that X
who has signed the complaint has no authority in law to
14 CC No 10236 of 2016
represent the company as there is no resolution by the
company authorizing 'X' to file the complaint.
24. In ILR 2007 Kar 5162 - Om Shakti SC/ST And
Minority Credit Co-operative Society Ltd. vs.
Venkatesh. Our Hon'ble High Court has held that the
presentation of the complaint by the society through its
President without authorization is bad in law. The
complaint is not maintainable.
25. In CRRP No.129/2013 George Joseph vs. HMT
International Ltd. our Hon'ble High court has observed,
Delegations of power can only be by
resolution of board of directions. Hence
letter of authorization or POA executed by
the Chairman or other officers of the
company without delegation of the power
to institute such proceedings having
emanated from the board of directors
would invalidate any proceedings
brought without the necessary authority.
15 CC No 10236 of 2016
26. The principles laid down in the said decision apply
to the case on hand. The Complainant has not produced
the resolution of the board of directors so as to enable him
to present the complaint and tender evidence in court on
behalf of the society. As the complaint has been filed by
and evidence also has been given without proper
authorization the Complaint is bad in law and is not
maintainable. Hence the point for consideration is
answered in the negative.
POINT No.4
27. In view of the affirmative findings on point 2 and
negative findings on point No. 3 the Complainant is not
entitled for the relief sought for. In the result I proceed to
pass the following:
ORDER
Acting u/s 255(1) of Cr.P.C., the accused is acquitted for the offence u/s 138 of NI Act.
16 CC No 10236 of 2016 Bail bond shall be in force for the period of 6 months as provided u/s 437A Cr.P.C.
(Dictated to the Stenographer, transcribed and computerized by her, corrected and then pronounced by me in the open court on this the 3rd November day of 2016) (SHEILA B.M.) XXVI ACMM, Bangalore City.
ANNEXURE Witnesses examined for the Complainant:
PW.1 K Ningaiah Witness examined for the accused:
NIL List of Documents marked for the Complainant:
Ex. P1 By-law.
Ex. P2 Cheque.
Ex. P2(a) Signature of the accused on the cheque.
Ex. P3 Endorsement.
Ex. P4 Notice.
Ex. P5 RPAD receipt.
Ex. P6 RPAD acknowledgement.
Ex. P7 Membership application.
Ex. P8 Loan application.
Ex. P9 Consideration receipt.
17 CC No 10236 of 2016
Ex. P10 Pro-note.
Ex. P11 Acknowledgement of debt.
Ex. P12 Membership application.
Ex. P13 Account statement.
Ex. P14 Complaint.
List of Documents marked for the accused:
NIL XXVI ACMM, Bangalore