Bangalore District Court
Mr.Y.Venkateshwarulu Reddy vs Mr.N.Malyadri on 16 October, 2021
IN THE COURT OF THE IV ADDL. CITY CIVIL AND
SESSIONS JUDGE MAYOHALL UNIT, BENGALURU
(CCH-75)
Dated: This the 16th Day of October 2021
PRESENT:
SRI. MOHAMMED MUJEER ULLA C.G. B.A. LL.B.,
LXXIV Addl. City Civil and Sessions Judge, Bengaluru
CRL.APPEAL. NO. 25147/2019
APPELLANT/: Mr.Y.Venkateshwarulu Reddy,
S/o.Mr. Peddalakshmaniah,
Aged about 39 years,
R/at Sri.venkateshwara Nilaya,
No.37/A, 2nd Main Road,
Thalakaverinagar Layour,
Near Basavanagar Bus-stop,
Bangalore 560 037.
REP BY: Krishna Naik. ADVOCATE
.. Vs ..
RESPONDENT: Mr.N.Malyadri,
S/o.Mr. Narasimhulu,
Aged about 34 years,
R/at No.32, Punyabhoomi Layout,
Kalkere Horamavu Post,
Bangalore-560 043.
REP BY Sri.K.N.Krishna Rao, Advocate
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JUDGMENT
Appellant, the accused in C.C.No.53716/2015, being aggrieved by the judgment of Conviction and Sentence dated:08/04/2019 passed by the Learned LVIII Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru convicting him for the offence punishable U/Sec.138 of Negotiable Instruments Act (N.I Act) and imposing fine of Rs.6,04,000/-, in default of payment of fine directing him to undergo simple imprisonment for 3 months has filed the instant appeal U/Sec.374(3) of Cr.P.C.
2. For convenience the parties are referred to as per their ranking in the trial court.
FACTS OF THE CASE:-
3. Accused towards the discharge of loan availed from the complainant, issued Ex.P.1 cheque dated 28/01/2015, for a sum of Rs.5,00,000/- drawn on Andhra Bank, Ramagondanahalli Branch,, Bengaluru. On presentation of the said cheque for collection, it was dishonored in view of stop payment instructions given by accused. After receipt of Ex.P.2 bank endorsement, the 3 Crl.A.25147/2019 complainant issued Ex.P.3 legal notice dated: 18/04/2015 to accused through registered post and called upon him to make the payment of dishonored cheque within 15 days from the date of receipt of demand notice. The said notice was duly served to the accused. After receipt of notice, accused did not make the payment of dishonored cheque but issued Ex.P.6 reply dated:18.05.2015 raising untenable contentions. Therefore he committed offence punishable U/Sec.138 of N.I.Act. On these and other grounds stated in the complaint, the complainant prays to convict the accused for the offence punishable U/Sec.138 of N.I.Act.
4. A perusal of record would show that, the complainant presented the complaint on 28/05/2015. The Learned 14th Addl. Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru by perusing the complaint and the documents produced along with it, took the cognizance of the offence punishable U/Sec.138 of N.I Act, recorded the Sworn statement of the complainant and issued summons 4 Crl.A.25147/2019 to the accused. At this stage as per the notification dated:30.12.2016, the case was transferred to 58 th Addl. Chief Metropolitan Magistrate, Bengaluru. After service of summons, accused appeared before the court on 05.05.2017, he was released on bail, accusation was recorded and the accused pleaded not guilty and submitted that, he is having defence to make.
5. As per the judgment Hon'ble Supreme Court of India in the case of Indian Banks of Associations and others the sworn statement of the complainant was considered as his examination in chief. He produced documents marked at Ex.P.1 to Ex.P.6. After completion of the evidence of complainant, the statement of accused U/Sec.313 of Cr.P.C was recorded. Accused denied all the incriminating evidence found against him in the evidence of complainant. He opted to give defence evidence and examined himself as DW1 and witness as DW.2 and produced a document marked at Ex.D.1.
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6. After hearing the arguments on both side the trial court passed the impugned judgment holding the accused guilty for the offence punishable U/Sec.138 of N.I Act and imposed fine in a sum of Rs.6,04,000/- and in default of payment of fine, accused was directed to under to simple imprisonment for 3 months. Being aggrieved by the impugned judgment, the accused has filed the instant appeal.
7. In the instant appeal, inter-alia the accused raised the following grounds:
1. The judgment of the Trial Court is illegal, perverse, improper and contrary to the well established provisions of Law.
2. The trial court has not considered the effect of alteration of date in Ex.P.1 cheque.
3. The Trial court without appreciating the evidence of DW1 and 2 in the proper perspective has wrongly held 6 Crl.A.25147/2019 that Ex.D.1 receipt is of no assistance to accused to establish his defence.
4. The Trial Court has passed the judgment on assumption and presumption without considering the material on record.
8. Heard the arguments on both side and perused record. Counsel for respondent has filed written arguments
9. Having regard to the grounds of appeal and the points urged by the counsel on both side, the following points would arise for consideration:
1. Whether the Trial Court was justified in holding that, the accused committed an offence punishable U/Sec.138 of N.I.Act?
2. Whether the Trial Court was justified in imposing fine of Rs.6,04,000/- and compensation of Rs.5,99,000/- and default sentence?
3. What order?7
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10. My finding on the above points are as under:
Point No.1: In the Negative.
Point No.2: In the Negative.
Point No.3: As per the final order for the following:
REASONS
11. POINT NO.1: A perusal of Ex.P. 1 cheque would show that the date of cheque was altered by changing the year 2014 as 2015. The complainant who was examined as PW.1 in the cross-examination by admitting the alteration of the date in the cheque by changing the year 2014 as 2015 has stated that accused has made the said correction. In the cross-examination of PW.1, Ld Counsel for the accused has made a suggestion that accused has not made the said correction and without his consent, he (PW.1) made the said corection. PW.1 has denied the said suggestion.
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12. Section 87 of NI Act which deals regarding the effect of material alteration in the Negotiable Instrument reads thus:
Effect of material alteration.--Any material alteration of a negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties; Alteration by indorsee.--And any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respect of the consideration thereof. The provisions of this section are subject to those of sections 20, 49, 86 and 125.
13. On reading of section 87 of NI Act, it is clear that if a negotiable instrument is materially altered without the consent of the drawer, it renders the instrument void. Therefore, in a legal proceedings, launched on the basis of a materially altered negotiable instrument, the burden is on the holder of negotiable instrument, to prove that in order to carryout the common intention of the parties, the negotiable instrument was altered and it was altered with the consent of the parties. To prove the said contention, the complainant 9 Crl.A.25147/2019 has to lay foundation in the notice and also in the complaint.
14. Ex.P. 3 notice and the complaint filed by the complainant u/s 200 of Cr.P.C are silent regarding material alteration made in Ex.P. 1 cheque. The complainant in his sworn statement/examination in chief has also not stated anything about the material alteration. During the course of cross-examination of PW.1, by confronting Ex.P. 1 cheque, when the Ld Counsel for the accused asked a question that in Ex.P. 1 cheque the year 2014 was altered as 2015,PW.1 has denied the said suggestion. After denying the said suggestion, PW.1 has voluntarily stated that accused has made the said correction in Ex.P. 1 cheque. If the accused has made the said correction in the cheque, his signature could have been taken at the place where the correction was made. A perusal of Ex.P. 1 cheque would show that at the place where the year 2014 was corrected as 2015 accused has not put his signature . In the instant case, accused has led evidence. He examined himself as DW.1. He stated that in the year 2014 he borrowed a sum of Rs.50,000/- from the 10 Crl.A.25147/2019 complainant and at that time, Ex.P. 1 was given in blank as security for the repayment of the said amount. DW.1 has stated that in the year 2015 he repaid the loan of Rs.50,000/- to complainant. At that time, the complainant has given Ex.D. 1 receipt stating that he will return blank signed cheque to him. DW.1 has stated that he has not filled Ex.P1 cheque. In the cross-examination of DW.1 nothing has been elicited to prove that in Ex.P. 1 cheque, he altered the date by altering the year 2014 as 2015. It is needless to say that alteration of a date in a negotiable instrument is a material alteration. In the instant case, complainant has not laid foundation in the demand notice or in the complaint to prove that material alteration made in Ex.P. 1 cheque is to carryout the common intention of himself and accused. As I have already stated above, the complainant (PW.1) in the sworn statement/examination-in-chief has not stated anything about material alteration. In the cross-examination he denied the material alteration which is apparent on the face of the record. Thus, absolutely there is zero evidence to prove that accused voluntarily altered the date in the cheque 11 Crl.A.25147/2019 by altering the year 2014 as 2015. In view of the above I hold that the complainant failed to prove that to carryout common intention of himself and accused, Ex.P. 1 cheque was materially altered by the accused. Therefore, as per section 87 of NI Act Ex.P.1 cheque become void. The presumption u/s 139 of NI Act can be drawn if a valid cheque is dishonoured and the complainant fulfilled the requirement of section 138 of NI Act, Presumption u/s 139 cannot be drawn to a cheque which was materially altered and become void as per section 87 of NI Act.
15. Perusal of impugned judgment would show that though there is evidence on record regarding material alteration the trial court without considering the said evidence and without giving finding regarding material alteration has proceeded to pass the impugned judgment by holding that complainant has fulfilled the requirement of section 138 of NI Act, therefore, the presumption u/s 139 of NI Act is to be drawn and the accused failed to rebut the said presumption.
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16. In the instant case, the accused put-forth two fold contentions. Firstly, that Ex.P.1 cheque was materially altered without his consent. Therefore it became void and secondly that he issued Ex.P.1 cheque in blank to the complainant as security for the loan of Rs.50,000/- availed by him from the complainant in the year 2014, and he repaid the said amount, therefore he is not liable to pay any amount to the complainant. Accused has put-forth the defence of discharge of loan in Ex.P. 6 reply. Since, Ex.P. 3 notice is silent regarding alteration in the cheque, the accused has not stated anything about material alteration.
17. Accused who was examined as DW.1 has stated that in the year 2014, he availed loan of Rs.50,000/- from the complainant. At that time complainant has received a signed blank cheque from him as a security for the repayment of the loan amount. In the year 2015 he repaid the said amount to the complainant. At that time, the complainant by stating that he has not brought the blank signed cheque has issued Ex.D.1 receipt/endorsement stating that he will return the said blank cheque to him. 13
Crl.A.25147/2019 Accused to substantiate the said contention examined himself as DW.1 and also examined DW.2 Pullalacheruvu Pereddy.
18. DW.2 has stated that he know the accused and the complainant. In the year 2014 accused borrowed a sum of Rs.50,000/- from the complainant. At that time accused has given a blank signed cheque to the complainant for the security of repayment of the said loan. In the year 2015 accused repaid Rs.50,000/- to the complainant. At the time of repayment, the complainant told that he has not brought the signed cheque, therefore, he issued Ex.D. 1 endorsement/receipt stating that he will return the blank cheque to the accused. DW.2 has stated that Ex.D. 1 is in his hand-writing. Ex.D. 1 is in Telugu and its translation in english is produced. In the cross-examination of DW.2 except making a suggestion that he is the friend of accused and he was working under him, therefore, to help him he is giving false evidence which was denied by DW.2, nothing has been elicited to disbelieve his testimony that he written Ex.D.1 endorsement/receipt to evidence the transaction of 14 Crl.A.25147/2019 repayment of loan of Rs.50,000/- by the accused to the complainant and also undertaking of the complainant to return the blank signed cheque to accused.
19. In the written arguments the counsel for the complainant has stated that there is contradiction in the evidence of DW1. and 2 regarding whether the wife of DW.2 was working under DW.1 at the time of accident. Therefore, their evidence cannot be believed. Whether the wife of DW.2 was working under DW.1 when the accident was occurred is not a relevant point for consideration. Therefore the inconsistency in the evidence of Dw.1 to 2 stated above in respect of a fact which is not relevant to the dispute between the parties cannot be a ground to disbelieve their consistent testimony in respect of relevant fact. In view of the above I hold that accused by examining himself as DW.1 and a witness as DW.2 and producing Ex.D.1 has proved that he repaid the loan of Rs.50,000/- availed from the complainant. Therefore, he is not liable to pay any amount to the complainant.
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20. In the instant case it is not the contention of the complainant that the transaction and the cheque mentioned in Ex.D1 receipt and the transaction in question are different transactions. When such is the case there is no reason to disbelieve the testimony of DW.1 and 2 that accused repaid the loan availed from complainant and therefore he is not liable to pay any amount to the complainant and the complainant by misusing blank signed cheque filled it as per his convenience and also made material alteration to file false case against him though he is not liable to pay the amount mentioned in Ex.P.1 cheque. In view of my aforesaid finding I hold that the trial court without considering the effect of material alteration in Ex.P.1 cheque and appreciating the evidence DW1 and 2 regarding execution of Ex.D1 receipt in the right prospective has wrongly come to the conclusion that complainant proved his case and the accused committed the offence punishable U/Sec. 138 of NI Act.
21. I went through the judgments relied upon by the counsel for the complainant reported in 1. (2015) 8 Supreme 16 Crl.A.25147/2019 Court Cases-378, ii) 2104 Criminal Law Journal 3228 and,
iii) AIR 2010 Supreme Court 1898. Having regard to my finding regarding material alteration in Ex.P.1 cheque and discharge of liability by the accused the above cited judgments are not applicable to the case on hand. In view of my aforesaid findings I hold that the trial court was grossly erred in convicting the accused for the offence punishable U/Sec. 138 of NI Act. In view of the above hold that the order of conviction is to be set-aside. Accordingly Point No.1 in the Negative.
22. POINT NO.2: In view of my finding on point No.1, the sentence of fine and default sentence awarded by the trial court is not sustainable and it is liable to be set-aside. Accordingly I answer Point No.2 in the Negative.
23. POINT NO.3: In view of my findings on point No.1 & 2, I pass the following:
ORDER Appeal is allowed.
The Judgment passed by the
Learned LVII Addl. Chief Metropolitan
Magistrate, Mayo Hall Unit, Bengaluru in C.C.No.53716/2015, dated:08/04/2019, 17 Crl.A.25147/2019 convicting the accused for the offence punishable U/Sec.138 of N.I.Act is set-aside.
The accused is acquitted for the offence punishable u/s 138 of NI Act.
The fine and the compensation if any deposited by accused is ordered to be released to him.
Send Trial Court Record (TCR) to the Trial Court along with copy of judgment .
No order as to costs.
****** [Dictated to the Judgment Writer, after computerization, corrected, signed and then pronounced by me in the open Court on this the 16th day of October 2021].
[MOHAMMED MUJEER ULLA C.G] LXXIV Addl. City Civil & Sessions Judge, Mayo hall, Bengaluru.
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