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Bangalore District Court

Sri.L.Chikkegowda vs Sri.Vishan Raj on 8 March, 2016

    IN THE COURT OF LVI ADDITIONAL CITY CIVIL &
      SESSIONS JUDGE, BENGALURU CITY (CCH 57)

             Dated this the 8th Day of March, 2016

          Present;- Sri. K.R. Nagaraja, B.A., L.L.B.
                    LVI Additional City Civil & Sessions
                    Judge, Bengaluru City.

                          Crl.A.No.1058/2015

Appellant     :                 Sri.L.Chikkegowda
                                Aged about 75 years
                                S/o Late Sri.Linganna
                                R/at No.512-A, 1st Main
                                8th Block
                                Koramangala
                                Bangalore-560 095

                          [By Sri.B.N.Jayadev, Advocate]

                                      --V/s--

Respondent :          :         Sri.Vishan Raj
                                Aged about 42 years
                                S/o Late Sri.Misrimal
                                R/at No.8, 4th Cross
                                Swimming Pool Extension
                                Malleswaram
                                Bangalore-560 003

                          [Rep by Sri.N.Srinivas, Advocate]

                          : ORDER:

This conviction appeal of accused is directed against judgment and order of sentence dated 31.07.2015 passed in CC.No.12827/2007 on the file of 20th ACMM, Bangalore City convicting accused for an offence punishable under Section 138 of N.I.Act and sentencing him for payment of fine of 2 Crl.A.No.1058/2015 Rs.8,05,000/- in default undergo simple imprisonment for one year for the said offence.

2. The essential material events lead to this appeal are as follows:

Respondent herein/complainant, who will be hereinafter referred as 'complainant' launched criminal prosecution against accused/appellant who will be herein after referred as 'accused' for the offence punishable U/s.138 of N.I.Act, through his private complaint maintained U/s.200 of Code of Criminal Procedure in C.C.No.12827/2013 on the file of trial court i.e., 20th Additional Chief Metropolitan Magistrate, Bangalore City with support of allegation that Ex.P.1 cheque bearing No.529578 dated 28.02.2012 for Rs.3,00,000/-, Ex.P.2 cheque bearing No.529579 dated 10.03.2012 for Rs.4,00,000/- issued by accused in favour of complainant to discharge the loan of Rs.7,00,000/-, which raised Rs.1,50,000/- in the last week of September 2011, Rs.4,00,000/-

during first week of October 2011, Rs.50,000/- 3 Crl.A.No.1058/2015

during last week of October 2011 and Rs.1,00,000/- during 3rd week of November 2011 were dishonoured on 05.04.2012 and 11.04.2012 on the ground that 'insufficient fund' in the account of accused as per Ex.P.5 and Ex.P.6 bank endorsements and accused, who received statutory legal notice dated 08.06.2012 as per Ex.P.7 through registered post acknowledgment due as per Ex.P.9 neither paid cheque amount nor replied said notice within the stipulated time and therefore complainant constrained to launch criminal prosecution against accused.

3. Hon'ble Court below after taking cognizance on the complaint, examination of complainant, its complaint and its supporting materials registered CC.12827/2013 to try the accused for the above offence. Accused appeared through his Advocate. Copies of complaint and its supporting materials were supplied to accused. Substance of accusation was read over and explained to accused on 12.03.2014. Accused pleaded not guilty and claimed to be tried. Complainant in order to bring home the above guilt of accused himself 4 Crl.A.No.1058/2015 examined as PW1, got examined bank official Smt.Anitha.D.S. as PW2 and got marked 15 documents exhibited as Ex.P.1 to P.15. After completion of evidence on behalf of complainant accused was examined under Section 313 of Code of Criminal Procedure on 16.04.2014. Accused denied incriminating evidence appeared against him through materials placed on behalf of complainant. Accused neither adduced evidence nor produced any documents despite of sufficient opportunity afforded to him. Hon'ble court below heard counsel for both parties. Counsel for both parties also placed their written arguments along with copies of citations, which relied upon by them. Hon'ble Court below through impugned judgment found accused guilt for the above offence with affirmative finding on the point addressed for decision making in the judgment and through order of sentence sentenced accused in the above manner. Hon'ble court below found that the difference of accused is not probabalized and accused failed to rebut statutory presumption of facts and material alteration i.e. erase of name of complainant in the impugned cheque. The impugned cheque is not material one as it has been occurred in the office of court. Hon'ble Court below amongst other incidental findings and observations believed the version 5 Crl.A.No.1058/2015 of complainant and disbelieved probability of the plea of accused.

4. The accused feeling aggrieved by above noted verdict of court below convicting him for the above offence and sentencing him in the above manner has preferred instant appeal under Section 374 of Code of Criminal Procedure. He has contended that Hon'ble Court below failed to appreciate the fact that the complainant did not produced valid Money Lender License despite of the fact he admitted that he is a money lender and also fact that alleged debt claimed by complainant is not a legally enforceable debt as it is barred under Section 11 of Money Lenders Act 1961. Hon'ble Court below failed to appreciate the fact that there was no service of statutory notice on dishonour of cheque against accused as required under law and there are no materials to show financial position and source of complainant to lend loan in question in favour of accused. Court below failed to appreciate the material alteration in Ex.P.1 impugned cheque as laid down by several decisions of Hon'ble High Courts. With these main contentions accused prays to allow his appeal by setting aside impugned judgment and order of sentence and acquit him for the above offence. 6 Crl.A.No.1058/2015

5. Lower court record has been secured.

Respondent/complainant is appeared through his advocate.

6. Heard counsels for both parties.

7. Learned counsel for accused while reiterating contentions urged in the appeal memo would vehemently contend that non-production of money lending license, which probablizes non-existence of legally enforceable debt to issue impugned cheque, which exonerated liability of accused for the offence punishable under Section 138 of N.I.Act. He would further contend that statutory notice as required under Section 138(d) of N.I.Act is not duly served on the accused as required under law, which also exonerate any old liability of accused for the offence under Section 138 of N.I.Act. He would further contend that accused did not signed Ex.P.9 and Ex.P.1 cheque does not contain name of complainant, which show that accused is not liable for punishment under Section 138 of N.I.Act. With these main contentions and also contentions urged in the appeal memo, counsel for accused sought to allow the appeal.

8. Counsel for accused sought to justify the impugned judgment and order of sentence on the main ground that accused admitted existence of impugned cheque through Ex.P.14 and P.15 and available materials on behalf of complainant abundantly established instant version of complainant.

9. Perused papers.

10. In the light of the above materials following points fall for decision making of this court:

1. Whether Ex.P.1 impugned cheque of accused was issued in favour of complainant to discharge legally enforceable debt?

2. Whether statutory notice on dishonour of impugned cheques as per Ex.P.1 and P.2 as required under Section 138(b) of N.I.Act 1881?

3. Whether court below has properly appreciated available materials with proper prospective?

4. Whether impugned judgment and order of sentence of court below call for interference of this court?

5. What order?

11. This court on re-appreciation of available materials with reference to prevailing legal aspects give finding to the above points as follows:-

POINT NO.1 - Affirmative POINT NO.2 - Negative POINT NO.3 - Partially affirmative POINT NO.4 - Affirmative POINT NO.5 - As per final order, on the following;

REASONS:

12. POINT NO.1 to 4: As these points are interconnected have been discussed together as hereunder:-

Allegation of complainant against accused need not be reiterated. Accused denied the above allegation of complainant. Complainant to bring home above guilt of accused with beyond reasonable doubt with production of cogent and satisfactory evidence. In the instant case, as noted supra complainant has relied on his self serving oral testimony and evidence of Smt.Anitha D.S. Bank official as PW2 and got marked 15 documents exhibited as Ex.P.1 to P.15.

13. Before re appreciate the available materials, it is necessary to straight away advert on the admitted facts. Though accused did not elect to adduce his evidence or produce any documents but his counsel suggested to complainant that ' DgÉÆæ £ÀªÀÄä §½ MqÀªÉ Rjâ¸À®Ä §A¢zÁÝUÀ D ªÀåªÀºÁgÀzÀ ¨Á§ÄÛ £ÀªÀÄUÉ ¸À» ªÀiÁrzÀ ¤¦1 ªÀÄvÀÄÛ 2 SÁ° ZÉPÀÄÌUÀ¼À£ÀÄß PÉÆnÖzÀÝgÀÄ. DzÀgÉ £Á£ÀÄ CªÀjUÉ MqÀªÉUÀ¼À£ÀÄß PÉÆnÖgÀĪÀÅ¢®è, C£ÀAvÀgÀ ZÉPïUÀ¼£À ÀÄß ¸ÀºÀ ªÁ¥À¸ï PÉÆnÖ®è JAzÀgÉ ¸ÀjAiÀÄ®è." This suggestion of counsel for accused shows that the accused admitted issuance of impugned cheques in favour of complainant. From the above admission of accused it is clear that the complainant is the holder of impugned cheques. As per the provision of Section 139 of N.I.Act, purport and spirit of which has been analyzed and incorporated by Hon'ble Supreme Court of India in case of Rangappa V/s Mohana reported in AIR 2010 SC 1898. Court of law has to raise presumption on the existence of fact that Ex.P.1 and P.2 impugned cheques were issued by accused in favour of complainant to discharge the legally enforceable liability as referred in the complaint. As per the above full bench decision of our Hon'ble Supreme Court of India, the accused can rebut the above presumption of existence of facts with probable evidence. It is well settled law that accused rebut 10 Crl.A.No.1058/2015 the presumption of facts either through his evidence or through the material available on record on behalf of complainant.

14. Hon'ble Court below rightly by raising initial presumption on existence of facts claimed by complainant casted burden on the accused to rebut the presumption of facts. Counsel for accused would vehemently contend that non-production of money lending license, which mandates production of same before court of law and Money Lenders Act shows that Ex.P.1 and P.2 cheques were not issued for legally enforceable debt. Our Hon'ble High Court of Karnataka was pleased to answer the above contention of accused in the above decision in case of S.Parameshwarappa and another V/s S.Choodappa. Our Hon'ble High Court of Karnataka was pleased to hold that production of money lending license before court of law would be insisted in a suit for recovery of money as a condition precedent and whereas there is no bar/initiation or action under Section 138 of N.I.Act and non- production of Money Lending License is of no effect to determine the liability under Section 138 of N.I.Act. In the light of decision of our Hon'ble High Court of Karnataka, above decision of Hon'ble High Court of Andhra Pradesh in 11 Crl.A.No.1058/2015 case of M/s Krishnaraju Finance Hyderabad will not prevail over. Hon'ble High Court of Andhra Pradesh was pleased to hold that when complainant failed to produce money lending license and liability of accused to pay in favour of complainant cannot be said as legally enforceable liability. This decision of Hon'ble High Court of Andhra Pradesh does not prevail on decision of our Hon'ble High Court of Karnataka. Therefore, the above contention of accused that non-production of money lending license on behalf of complainant exonerate liability of accused under Section 138 of N.I.Act as another liability of accused with complainant, who is a money lender cannot be considered as a legally enforceable liability is not sustainable.

15. It is further contention of counsel for accused that the since material alteration at Ex.P.1 impugned Cheque, which creates doubt on the fact that it was issued by accused to discharge the liability of complainant. It is important to note that accused neither adduced any evidence nor produced any documents to probable his above noted defence. As per the prevailing court of law has to appreciate whether available materials probable the above evidence of accused. Accused would contend that the impugned cheque were issued as a 12 Crl.A.No.1058/2015 security in favour of complainant at the time when accused placed order with complainant for preparation of gold ornaments. Complainant has produced VAT registration certificate as per Ex.P.12, it shows that complainant has been rendering the business under the name and style " M/s Ganesh Jewelers" at door No. 32, 4th Cross, Swimming pool extension, Malleshwaram, Bangalore-03. Complainant has produced account extract of its account maintained in HDFC Bank. This document shows that complainant has been doing business and he has sufficient source of income and he had financial capacity to lend the loan to the extent claimed in the present case. Accused has not disputed the relationship between complainant and himself. Complainant has claimed that accused borrowed amount of Rs.7,00,000/- as claimed in the complaint. The complainant has admitted that wife of accused purchased ornaments from complainant and several occasions. Complainant has admitted that he did not give any receipt in favour of wife of accused. Complainant has admitted that he has a money lendor and he has process the money lending business. Further, complainant has produced Ex.P.10 letter and of accused through which accused admitted liability and agreed to clear the liability in two installments on 1.4.2012. Learned Counsel for accused 13 Crl.A.No.1058/2015 would contend since Ex.P.10 was not addressed anybody and it cannot be said that it was given by accused in favour of complainant. Evidence of complainant with support of except Ex.P1 deserves to believe a corroboration piece of documents in the absence of any material to proper the plea of accused. Therefore, viewed from any angle it is to be held that the complainant had financial capacity to lend the loan in question in favour of accused and he had also source of income for that amount. Besides Ex.P.10 fortified the above established fact that accused issued Ex.P.1 and 2 cheques to discharge the legal enforceable debt of complainant.

16. Learned defence counsel would further contend that since there is a material alteration in Ex.P.1 impugned cheque, case of complainant to be doubted. Xerox copy of the Ex.P.1 impugned cheque is produced as per Ex.P.14. It shows that name of complainant was not erased. On careful examination of Ex.P.1 it cannot be said that script pertains the name has been erased. It clearly shows that the name in Ex.P.1 cheque was might ruined due to water fall on the cheque as rightly held by court below. It might occur due to water fall in the office. There is Ex.P.2 impugned cheque contains the name of complainant above natural ruination of 14 Crl.A.No.1058/2015 name of complainant in Ex.P.1 cheque due to some water fall in the office cannot be termed as material alterations and it does not give dries any suspicious on due existence at Ex.P.1. Therefore above defence counsel for accused does not hold water. The available materials abundantly established that impugned cheques were issued by accused to discharge the legal enforceable debt and accused failed to rebut the above noted presumption of fact that any proper evidence, non production of money lending licenses. In view of above decisions of Hon'ble High Court of Karnataka will not exonerate the liability of the accused for the impugned crime. Since the complainant had source of income to lend Rs.7,00,000/- in favour of accused, all the above noted decisions of Hon'ble Supreme Court of India except in case of M.D.Thomas will not render any assistance to accused to exonerate him for the above alleged guilt.

17. It is further made contention of accused that accused to be acquitted for the offence punishable under section 138 of Negotiable Instrument Act as there is no proper source of statutory notice against accused under section 138(b) of the Negotiable Instrument Act. The complainant has produced Ex.P.9 RPAD acknowledgment for having delivered 15 Crl.A.No.1058/2015 RPAD cover in the name of accused. Ex.P.9 acknowledgement contains the signatures of Ashoka, Bhakthi. There is no explanation to this fact. Complainant in his evidence has stated that " DgÉÆæ AiÀiÁªÀÅzÃÉ £ÉÆÃn¸ï eÁjAiÀiÁV®è JAzÀgÉ ¸ÀjAiÀÄ®è. ¤.¦.9gÀ°è CAZÉ ¹éÃPÀÊwAiÀÄ°ègÀĪÀ ¸À» DgÉÆæAiÀÄzÀ®è JAzÀgÉ CªÀgÀ ªÀÄ£ÉAiÀĪÀgÀÄ AiÀiÁgÉÆà ªÀiÁrgÀ§ºÀÄzÀÄ" This evidence of complainant shows that notice under section 138(b) of Negotiable Instrument Act was not served to accused. Based on this fact it is proper the divert on the decisions of Hon'ble Apex court of India. Our Hon'ble Apex Court in the above case M.D.Thomas was pleased to hold that service of notice to drawer/accused is sine-quo-non in terms of clause-b of provision of to section 138 of Negotiable Instrument Act and service of notice against wife of accused cannot be termed as authority service of notice as required as above provision. This decision has direct application to the case on hand. In the light of this decisions it is to be held that notice on dishonour of impugned cheque as per Ex.P.1 and 2 was duly served against accused under section 138(b) of Negotiable Instrument Act. In the result accused to be exonerated for the offence punishable under section 138 of Negotiable Instrument Act.

18. Hon'ble court below though properly appreciated materials on the point No.1 in question but erroneously held service of notice against accused is correct. The approach of court below is against to the above decisions of Hon'ble Supreme Court of India. Thus, Hon'ble court below failed to appreciate the materials fact in proper prospective. Although, complainant able to establish that Ex.P.1 and 2 were issued by accused to discharge legal enforceable debt but failed to establish the fact that dishonour of said cheques were notified to accused through non returned notice as contemplated under section 138(b) of Negotiable Instrument Act. In the result accused to be exonerated for the offence punishable under section 138 of Negotiable Instrument Act for want of due service of notice on dishonour of impugned cheque. In the result impugned judgment and order of sentence of court below to be reversed by allow this appeal. Accordingly, Point No.1 in the affirmative, Point No.2 in the Negative, Point No.3 in the partly affirmative and Point No.4 in the affirmative are answered.

19. Point No.5: In the light of findings of above points appeal on hand to be allowed. In the result, this court proceed to pass the following:

ORDER :

Appeal is allowed.

Impugned judgment and order of sentence dated 31/07/2015 passed in C.C.No.12827/2013 on the file of XX Additional Chief Metropolitan Magistrate; Bengaluru City is hereby set aside.

Accused is acquitted for the offence punishable u/S.138 of N.I. Act.

Accused shall comply provision of Section 437 A Code of Criminal Procedure within 10 days from today.

Find amount if any deposited by accused to be refunded to him.

Send copy of this judgment along with LCR to the lower court.

(Dictated to the Judgment Writer, transcribed by her, then corrected and pronounced by me in the open court on this the 9th day of March, 2016).

(K.R. Nagaraja,) LVI Addl.C.C. & Sessions Judge, Bengaluru.

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ @@@@@ It is further contention of counsel for accused that the since material alteration at Ex.P.1 impugned Cheque, which creates doubt on the fact that it was issued by 19 Crl.A.No.1058/2015 accused to discharge the liability of complainant. It is important to note that accused neither adduced any evidence nor produced any documents to probable his above noted defence. As per the prevailing court of law has to appreciate whether available materials probable the above evidence of accused. Accused would contend that the impugned cheque were issued as a security in favour of complainant at the time when accused placed order with complainant for preparation of gold ornaments. Complainant has produced VAT registration certificate as per Ex.P.12, it shows that complainant has been rendering the business under the name and style " M/s Ganesh Jewelers" at door No. 32, 4th Cross, Swimming pool extension, Malleshwaram, Bangalore-03. Complainant has produced account extract of its account maintained in HDFC Bank. This document shows that complainant has been doing business and he has sufficient source of income and he had financial capacity to lend the loan to the extent claimed in the present case. Accused has not disputed the relationship between complainant and himself. Complainant has claimed that accused borrowed amount of Rs.7,00,000/- as claimed in the complaint. The complainant has admitted that wife of accused purchased ornaments from complainant and several occasions. Complainant has admitted that he did not give any receipt in favour of wife of accused. Complainant has admitted that he has a money lendor and he has process the money lending business. Further, complainant has produced Ex.P.10 letter and of accused through which accused admitted liability 20 Crl.A.No.1058/2015 and agreed to clear the liability in two installments on 1.4.2012. Learned Counsel for accused would contend since Ex.P.10 was not addressed anybody and it cannot be said that it was given by accused in favour of complainant. Evidence of complainant with support of except P1 deserves to believe a corroboration piece of documents in the absence of any material to proper the plea of accused. Therefore, viewed from any angle it is to be held that the complainant had financial capacity to lend the loan in question in favour of accused and he had also source of income for that amount. Besides Ex.P.10 fortified the above established fact that accused issued Ex.P.1 and 2 cheques to discharge the legal enforceable debt of complainant.

Learned defence counsel would further contend that since there is a material alteration in Ex.P.1 impugned cheque, case of complainant to be doubted. Xerox copy of the Ex.P.1 impugned cheque is produced as per Ex.P.14. It shows that name of complainant was not erased. On careful examination of Ex.P.1 it cannot be said that script pertains the name has been erased. It clearly shows that the name in Ex.P.1 cheque was might ruined due to water fall on the cheque as rightly held by court below. It might occur due to water fall in the office. There is Ex.P.2 impugned cheque contains the name of complainant above natural ruination of name of complainant in Ex.P.1 cheque due to some water fall in the office cannot be termed as material alterations and it does not give dries any suspicious on due existence at Ex.P.1. Therefore above defence 21 Crl.A.No.1058/2015 counsel for accused does not hold water. The available materials abundantly established that impugned cheques were issued by accused to discharge the legal enforceable debt and accused failed to rebut the above noted presumption of fact that any proper evidence, non production of money lending licenses. In view of above decisions of Hon'ble High Court of Karnataka will not exonerate the liability of the accused for the impugned crime. Since the complainant had source of income to lend Rs.7,00,000/- in favour of accused, all the above noted decisions of Hon'ble Supreme Court of India except in case of M.D.Thomas will not render any assistance to accused to exonerate him for the above alleged guilt.

It is further made contention of accused that accused to be acquitted for the offence punishable under section 138 of Negotiable Instrument Act as there is no proper source of statutory notice against accused under section 138 (b) of the Negotiable Instrument Act. The complainant has produced Ex.P.9 RPAD acknowledgment for having delivered RPAD cover in the name of accused. Ex.P.9 acknowledgement contains the signatures of Ashoka, Bhakthi. There is no explanation to this fact. Complainant in his evidence has stated that " DgÉÆæ AiÀiÁªÀÅzÃÉ £ÉÆÃn¸ï eÁjAiÀiÁV®è JAzÀgÉ ¸ÀjAiÀÄ®è. ¤.¦.9gÀ°è CAZÉ ¹éÃPÀÊwAiÀÄ°ègÀĪÀ ¸À» DgÉÆæAiÀÄzÀ®è JAzÀgÉ CªÀgÀ ªÀÄ£ÉAiÀĪÀgÀÄ AiÀiÁgÉÆà ªÀiÁrgÀ§ºÀÄzÀÄ" This evidence of complainant shows that notice under section 138(b) of Negotiable Instrument Act was not served to accused. Based on this fact it is 22 Crl.A.No.1058/2015 proper the divert on the decisions of Hon'ble Apex court of India. Our Hon'ble Apex Court in the above case M.D.Thomas was pleased to hold that service of notice to drawer/accused is sign Conan in terms of clause-b of provision of to section 138 of Negotiable Instrument Act and service of notice against wife of accused cannot be termed as authority service of notice as required as above provision. This decision has direct application to the case on hand. In the light of this decisions it is to be held that notice on dishonour of impugned cheque as per Ex.P.1 and 2 was duly served against accused under section 138(b) of Negotiable Instrument Act. In the result accused to be exonerated for the offence punishable under section 138 of Negotiable Instrument Act.

Hon'ble court below though properly appreciated materials on the point No.1 in question but erroneously held service of notice against accused is correct. The approach of court below is against to the above decisions of Hon'ble Supreme Court of India. Thus, Hon'ble court below failed to appreciate the materials fact in proper prospective. Although, complainant able to establish that Ex.P.1 and 2 were issued by accused to discharge legal enforceable debt but failed to establish the fact that dishonor of said cheques were notified to accused through non returned notice as contemplated under section 138(b) of Negotiable Instrument Act. In the result accused to be exonerated for the offence punishable under section 138 of Negotiable Instrument Act for want of due service of 23 Crl.A.No.1058/2015 notice on dishonour of impugned cheque. In the result impugned judgment and order of sentence of court below to be reversed by allow this appeal. Accordingly, Point No.1 in the affirmative, Point No.2 in the Negative. Point No.3 in the partly affirmative and Point No.4 in the affirmative are answered.

Point No.5: In the light of findings of above point appeal on hand to be allowed. In the result this court proceed to pass the following:

ORDER