Bangalore District Court
Laxmi Sagar Finance vs Sri.Jayanaik on 24 May, 2018
IN THE COURT OF XXVII ADDL. CHIEF
METROPOLITAN MAGISTRATE, BANGALORE.
Present: Sri. N.Muniraja B.A., LL.B.,
XXVII A.C.M.M Bangalore.
Dated: This the 24th day of May 2018.
C.C. NO.1102/2017
Complainant Laxmi Sagar Finance,
No.5, Garudadri Nilaya,
Bhoopasandra Main Road,
RMV II State,
Bengaluru-560 094.
Rep by its partner/GPA
Holder
Sri.H.M.Manjunath,
(Rep by Sri.S.S.Advocate)
Vs.
Accused Sri.Jayanaik
S/o.Revaniak,
No.7, UAS Staff Quarters,
Bellary Road,
Behind R.T.Nagar,
Traffic Police Station,
Hebbala,
Bengaluru-560 024.
Also:
Working as Professor,
VRI College,
Poulty Division,
Veterinary College,
Hebbala,
Hebbala Post,
Bengaluru- 560 024.
(Reptd by Sri.BPM.Adv)
*****
2 C.C.No.1102/2017
JUDGEMENT
The complainant filed this complaint against the accused for the offence punishable U/s.138 of the Negotiable Instruments Act.
2. Brief facts of the complainant case are as follows:
The complainant is a registered firm and carries financial business. The accused availed loan of Rs.2,00,000/- from the complainant on condition to repay the said amount along with interest within a short period. The accused has also agreed to pay panel interest, recovery expenditures and other incidental charges in case of default of repayment of the loan amount. The accused had paid interest for few months. When the complainant demanded the accused to repay the outstanding loan due amount, he issued cheque bg.No.195521 dated 30.5.2016 for a sum of Rs.2,00,000/- drawn on Bank of Baroda, Malleshwaram Branch, Bangalore to discharge his liability as full and final settlement. The complainant 3 C.C.No.1102/2017 presented the said cheque for encashment through State Bank of Mysore, RMB II Stage Branch, Bhoopasandra Bangalore and the said cheque returned on 31.5.2016 as funds insufficient. Thereafter, the complainant brought the said fact to the notice of the accused and demanded for payment. At the request of the accused, the complainant represented the cheque on 11.8.2016 and again the same was returned on 12.8.2016 as funds insufficient. Again the complainant brought the said fact to the accused and demanded to pay the cheque amount. But the accused has not made payment. Thereafter, the complainant got issued legal notice dated 12.9.2016 through RPAD calling upon the accused to pay the cheque amount within 15 days. But the said notice returned on 16.9.2016 and the has not paid the cheque amount. Hence, this complaint.4 C.C.No.1102/2017
3. The accused appeared through his advocate and he enlarged on bail. Substance of accusation read over to the accused and he pleads as false.
4. On behalf of the complainant firm examined its partner as PW1 and got marked 26 documents as per Ex.P.1 to P.26. On closure of the complainant side evidence, statement of the accused recorded as required U/s.313 of Cr.P.C. The accused has denied the incriminating circumstances, which appears against him in the complainant side evidence. The accused has led defence evidence as DW1 and examined one witness as DW2 and got marked Ex.D.1 document.
5. Heard the learned counsel for the complainant and accused and the learned counsel for the accused has also filed written arguments and I perused the records.
6. The points that would arise for my consideration are as follows:
5 C.C.No.1102/2017
(i) Whether the complainant proves that the accused issued Ex.P.5 cheque towards discharge of legally enforceable debt or liability and the said cheque dishonoured for want of sufficient funds in the account of the accused.?
(ii) Whether the complainant proves that after dishonour of cheque, issued demand notice to the accused in compliance of Sec.138(b) of N.I Act?
(iii) What order?
7. My answer to the above points are as follows:-
Point No.1 : In the Affirmative Point No.2: In the Affirmative Point No.3: As per the final order, for the following.
REASONS
8. Point No.1 : It is the case of the complainant that, the accused availed loan of Rs.2,00,000/- from the complainant agreeing to repay the said amount with interest within short period and the accused towards outstanding loan due amount and towards full and final settlement has issued Ex.P.5 cheque and the same was dishonored for want of sufficient 6 C.C.No.1102/2017 funds in the account of the accused. PW1 is one of the partner as well as GPA holder of the complainant, in his chief examination affidavit has reiterated the contents of the complaint averments.
9. The defence of the accused is that, he has not availed loan from the complainant. He stood as surety to the loan obtained by Sri.Suresh Kumar.J and at that time, he gave blank cheque to the complainant as security to the said loan. At the time of granting loan to the said Suresh Kumar.J, the complainant obtained signatures on some blank applications and by filing the blank applications and cheque filed false complaint against the accused. There is no legal liability on the part of the accused. The learned counsel for the accused has cited the decision reported in (2009) 2 SCC 513 (Kumar Exports Vs. Sharma Carpets) Wherein the Hon'ble Supreme Court of India held that, rebuttal of presumption U/s.139 of N.I Act by the accused does 7 C.C.No.1102/2017 not require proof beyond reasonable doubt. Something probable has to be brought on record.
10. On behalf of the complainant produced Ex.P.1 certified copy of partnership deed, Ex.P.2 Money lending license Ex.P.3 Registration Certificate of the complainant and Ex.P.4 GPA executed by the other partners of PW1. The above said Ex.P.1 to P.4 documents goes to show that, the accused is registered partnership firm and doing money lending business by obtaining licence from the Competent authority and other partners of the complainant in favour of the complainant firm have executed GPA infavour of PW1 to represent the complainant firm.
11. The learned counsel for the accused in the written arguments contended that, the complaint is not maintainable on the grounds that the complainant in Ex.P.5 cheque claiming Rs.2,00,000/- but in Ex.P.16 shown the loan amount of the accused at Rs.1,87,000/-. The complainant 8 C.C.No.1102/2017 claiming more money than actual liability from the accused. Further, the complainant has not issued notice to the accused within 30 days from the date of issuance of Ex.P.6. In support of the arguments, relied upon the decision of the Hon'ble High Court of Bombay reported in LAWS (BOM) 2010 35 (Vividha Urban Co-operative Credit Society Limited Vs. State Gurudas Krishna Patrekar) and decision of the Hon'ble Supreme Court of India, reported in (1998) 6 SCC 514 (Sadanandan Bhadran Vs. Mahadavan Sunil Kumar).
12. Ex.P.16 is the Income Tax Returns for the year 2016-17 of the complainant firm. It is true that, in the loan schedule annexed to Ex.P.16 at serial No.39 in front of the name of the accused shown at Rs.1,87,000/-. It is true that amount involved in Ex.P.5 cheque is of Rs.2 Lakhs. PW1 in the cross- examination has stated that, the accused paid Rs.10,000/- and Rs.3,000/-. As per the complaint 9 C.C.No.1102/2017 averments, the accused has issued Ex.P.5 cheque for Rs.2,00,000/- towards full and final settlement. It is seen from current assets group summary for the period of 1.4.2016 to 31.3.2017 annexed to Ex.P.17 Income Tax Returns for the year 2017-18, shown the amount payable by the accused is at Rs.2 Lakhs. Ex.P.5 cheque is dated 30.5.2016. So, Ex.P.5 cheque transaction comes in the financial year of 1.4.2016 to 31.3.2017. As noticed above in the current assets group summary for the period of 1.4.2016 to 31.3.2017 annexed to Ex.P.17 Income Tax Returns shown the amount of Rs.2 Lakhs payable the accused at Rs.2 Lakhs and the said amount tallies with Ex.P.5 cheque amount. Therefore, arguments of the accused that the complainant claiming more money under Ex.P.5 cheque cannot be accepted and the decision of the Hon'ble High Court of Bombay cited above will not come to the aid of the accused. 10 C.C.No.1102/2017
13. The arguments of the accused is that, the complainant not issued notice within 30 days from the date of Ex.P.6 bank endorsement. No doubt it is true that, the complainant not issued notice within 30 days from the date of Ex.P.6 bank endorsement. It is the specific case of the complainant that, the cheque in question presented for encashment and the same was returned on 31.5.2016 as funds insufficient. The said fact was brought to the notice of the accused and as per the request of the accused, the complainant represented the cheque on 11.8.2016 and the same was returned on 12.8.2016 as funds insufficient. Thereafter, the complainant issued notice to the accused on 2.9.2016 after second time dishonour of the cheque. It is well established principle of law that the cheque may be present to the bank at any number of times within its validity period. Here is a case, Ex.P.5 cheque is dated 30.5.2015, validity of Ex.P.5 cheque was 3 months and second time presentation of the cheque on 11 C.C.No.1102/2017 11.8.2016 comes within validity period. After second time return of the cheque on 12.8.2016 the complainant has issued notice to the accused on 2.9.2016 within 30 days. Therefore, the arguments of the accused that the complainant not issued notice to the accused within 30 days from the date of Ex.P.6 bank endorsement cannot be accepted. The facts and circumstances of the decision relied upon by the accused cited above, in the case of Sadanandan Bhadran Vs. Mahadevan Sunil Kumar are different to the present case. Because, in the cited case, after dishonour of the cheque notice was issued to the accused demanding to pay the dishonoured cheque amount and after issuance of notice once again the cheque was presented to the bank for encashment. But here is case, no such circumstances arisen.
14. The accused in his defence evidence denied the availment of loan from the complainant and 12 C.C.No.1102/2017 contended that, he stood as surety to one Suresh Kumar.J and at the time of granting loan to the said Suresh Kumar.J, the complainant obtained his signatures on some blank applications and blank cheque and the same are mis used by the complainant. The accused in support of his contention examined the said Suresh Kumar.J as DW2. DW2 has stated that in the year 2015-16 he availed loan from the complainant and at that time, the complainant insisted for Government official surety and then, he requested the accused to stand as surety and has agreed for the same. At the time of granting loan to the accused the complainant obtained the signatures of the accused on blank application and blank signed cheque. The complainant to prove the availment of loan by the accused produced Ex.P.19 membership application, Ex.P.20 loan application, Ex.P.13 form No.6 given by the accused. Ex.P.14 application issued by the accused for having issuance of cheque for discharge 13 C.C.No.1102/2017 of loan and Ex.P.15 payment receipt. The contention of the accused is that, the complainant obtained signatures of the accused on blank applications and obtained blank cheque.
15. The accused in the course of cross-examination admits that hand writings in Ex.P.19 application are belongs to him. No doubt, it is true that it has come in the cross-examination of PW1 that, Ex.P.13 to P.15 documents and Ex.P.5 cheque are filled by him and another partner. It is pertinent to note that the accused stated in the cross-examination that, he is Ph.d holder and working as professor in Veternary College, Hebbal, Bangalore. So the accused is well educated man and not a prudent man. The accused in his cross-examination stated that before signing Ex.P.13 to P.15 applications he gone through typed contents of the said applications. Ex.P.13 is the statement showing the details of conditions of loan. Ex.P.14 is the application for issuing cheque for discharge of loan and Ex.P.15 is the payment receipt. 14 C.C.No.1102/2017 Even accepts the contention of the accused that, he put signatures on blank applications of Ex.P.13 to P.15 but the typed contents of the said application goes to show that the applications are relates to lending of loan. The accused is not a layman to sign simply on the blank application he is well educated man and working as professor in the Veterinary College, Hebbal, Bangalore. Therefore, the accused knowing fully the contents and nature of Ex.P.13 to P.15, 19 & 20 signed on the said documents..
16. The accused in the cross-examination stated that, he does not know the date on which Suresh Kumar.J obtained loan and he could not able to say the dates on which his signatures obtained on blank papers. As could be seen from the evidence of DW2 that, he is running provision store. The accused is a Ph.d holder and he is working as professor in the recognized Veternary College, Hebbal, Bangalore. It is under these circumstances, the version of the 15 C.C.No.1102/2017 accused, that, he stood as a surety to a petty business man cannot be believed. DW2 has produced pass book as per Ex.D.1 to show that obtained loan from the complainant finance institution. In the cross-examination of DW2 on behalf of the complainant denied the transaction of DW2 with the complainant and contended that Ex.P.21 is created for the purpose of this case. DW2 in his chief examination affidavit has stated that the complainant granted loan of Rs.50,000/- to him. DW2 in his further chief examination stated and in Ex.D.1 pass book mentioned the loan amount as of Rs.1,00,000/-. DW2 is not definite how much loan amount availed by him from the complainant. To accept the version of the accused that DW2 availed loan from the complainant and the accused stood as a guarantor/surety to the loan availed by DW2 not placed any materials. Even on worst accepts the version of the accused that he stood as surety to DW2 while he availing loan from the complainant, as 16 C.C.No.1102/2017 noticed above, the accused in the cross-examination stated that, before signing Ex.P.13 to P.15 documents he gone through the typed contents of the said documents. Ex.P.13 to P.15 documents are relates to the borrower not the surety documents. The arguments of the accused is that, loan account number of DW2 is LFS-ND 95. In the Annexure of Ex.P.16 Income Tax Returns, the complainant intentionally left out and not produced the documents relates to LSF.No.95 to conceal the fact that DW2 has availed loan. And therefore, adverse inference has to be drawn for non production of documents relates to LSF.No.95. and in support of the said arguments relied upon the decision reported in (2015) 7 SCC 178 (Tomaso Bruno & anr Vs. State of Uttar Pradesh). The learned counsel for the complainant has argued that, the list annexed to Ex.P.16 is relates to the Defaulters of the loan and as loan availed under LSF No.95 is not a defaulter the said Number is not mentioned in Ex.P.16. There is 17 C.C.No.1102/2017 some force in the arguments of the learned counsel for the complainant because in the annexure of Ex.P.16 not only missed LSF No.95 and there are other LSF Nos. are missed. Moreover, normally in the income tax returns shown the debtors list.
17. On behalf of the complainant produced details of C.C.No.9940/2016, C.C.No.5879/2016 and C.C.No.9748/2016 and judgement in C.C.No.3620/2014 & C.C.No.3899/2015 obtained through on line as per Ex.P.21 & 25. Further, also produced certificate U/s.65 (B) of the Indian Evidence Act as per Ex.P.26 pertaining to the said Ex.P.21 to P.25 documents. The said Ex.P.21 to P.25 documents goes to show that Sri. Gaali Anjaneya Swamy Credit Co-operative Society Limited, in C.C.No.9746/2016 Sri.Mallikarjuna in C.C.No.3620/2014, the Bangalore Rural and Ramanagara Central Co-operative Bank Chamarajpet Branch, Bangalore in C.C.No.3899/2015 and 18 C.C.No.1102/2017 R.T.Ramaiah in C.C.No.2254/2016 filed cheque bounce cases against the accused. During the course of cross-examination of PW1 on behalf of the accused tried to contend that, Ex.P.26 certificate filed U/s.65(B) is not proper and device certificate in which Ex.P.21 to P.25 documents obtained is not furnished and as such, Ex.P.21 to P.25 documents cannot be considered. Even accepts the line of arguments of the learned counsel for the accused, but in the course of cross-examination the accused clearly admits that the Bangalore Rural and Ramanagar District Co-operative Bank Limited, Chamarajpet Branch in C.C.No.3899/2015. T.Mallikarjuna in C.C.No.3620/2014. Sri.Gali Anjaneya Swamy Credit Co-operative Society Limited in C.C.No.9946/2016, T.R.Ramaiah in C.C.No.5679/2016 and one Yognanda in C.C.No.9940/2016 filed cheque bounce cases against him. So, the accused clearly admits the cheque bounce cases filed against him as per Ex.P.21 to 19 C.C.No.1102/2017 P.25. As per Ex.P.23 & 24 in C.C.No.3620/2014 and C.C.No.3899/2015 filed by P.Mallikarjuna and The Bangalore Rural & Ramangar District & Central Co- operative Bank Limited, the accused is convicted for the offence punishable U/s.138 of N.I Act. But the accused is ready to admits the same and tried to plead ignorance. The above said cheque bounce cases filed against the accused lead to draw inference against the accused that, he is in the habit of availing loan from various persons and financial institutions and he availed loan from the complainant financial Institution and the said inference strengthened the Ex.P.13, 15 19 & 20 documents.
18. As observed above, the accused is not a prudent man and he is a Ph.d holder and professor in Veterinary College, Hebbal, Bangalore and he knows the consequences of suretyship and issuance of cheque. If the accused issued cheque in question to the complainant as a surety to Suresh Kumar.J, he 20 C.C.No.1102/2017 would have taken steps to get back the cheque. After discharge of the loan by the DW2 Suresh kumar.J, the accused could have got returned the cheque from the complainant. The accused could have issued notice to the complainant to return the cheque issued as security to the loan availed by Suresh kumar.J and in case the complainant fail to return the cheque, the accused could have issued stop payment instructions to the bank. In the cross- examination of PW1 and in the defence evidence of the accused no defence is put forth by the accused having taken steps against the complainant for return of the cheque. If really, the accused issued the cheque in question as security to the loan availed by Suresh Kumar.J he would not have kept quite without taking any steps to get back the cheque. In action on the part of the accused leads to draw adverse inference against him. The accused has relied upon the decision reported in LAWS (Ker)2016 910 (K.K.Divakaran Vs. State of Kerala) I have 21 C.C.No.1102/2017 gone through the above cited decision the facts and circumstances of the cited case are footing different to the case on hand. Therefore, the said decision will not come to the aid of the accused.
19. As per Ex.P.6 & P.7 Bank endorsements, the cheque in question dishonoured due to insufficiency of funds in the account of the accused. In the cross- examination of PW1 and in the defence evidence of the accused, it is not the defence of the accused that, there were sufficient funds in the account of the accused at the time of presentation of Ex.P.5 cheque for encashment. Absolutely, no such defence forth coming from the accused side. As per Sec.146 of N.I. Act there is presumption with respect to the bank endorsement. Though the accused cross-examined PW1 at length and led defence evidence, fails to probabalize his defence version and rebut the presumption U/s.139 of N.I Act. The complainant by adducing oral as well as documentary evidence 22 C.C.No.1102/2017 proved that the accused availed loan from the complainant and towards discharge of the outstanding loan amount has issued the cheque in question and the same was dishonoured for want of sufficient funds in the account of the accused. In view of the above discussion, I answer Point No.1 in the Affirmative.
20. Point No.2:- It is the case of the complainant that, after dishonour of the cheque, issued notice on 2.9.2016 through RPAD calling upon the accused to pay the cheque amount within 15 days and the said notice returned on 16.9.2016 as not claimed. The learned counsel for the accused has relied upon the decision reported in (2008) 2 SCC 321 (Rahul Builders Vs. Arihant Fertilizers & Chemicals and Anr) to contend that an Omnibus notice without specifying as to what was the amount due under the dishonoured cheque could not subserve the requirement of law. Here itself 23 C.C.No.1102/2017 mentioned that in the cited case, the cheque amount was Rs.1,00,000/- and notice issued to pay an amount of Rs.8,72,409/-. But here is a case, no such circumstances arisen. The complainant produced Ex.P.8 copy of the notice dated 2.9.2016, Ex.P.9 and 10 postal receipts and Ex.P.11 & P.12 unclaimed RPAD covers. As per Ex.P.11 & 12 postal covers the complainant sent notice to the accused to his residential address and working place address. Both the notices returned as not claimed. In the cross-examination of PW1 and defence evidence the accused has not disputes the address to which notices were sent to the accused. The accused in the course of cross-examination admits that, the address mentioned on Ex.P.11 & P.19 and in his chief examination affidavit are one and the same. Ex.P.11 postal cover sent to the residential address of the accused. It has come in the cross-examination of the accused that, he is a professor in veterinary college, Hebbal, Bangalore. As per Ex.P.12, notice sent to the 24 C.C.No.1102/2017 working place address of the accused. So there is no dispute about the address of the accused to which notices were sent by the complainant after dishonour of the cheque in question. It is well established principle of law that the notice sent through registered post to the correct address of the sendee returned as not claimed, such notice deemed to have been served to the sendee. Here is a case, there is no dispute about the address of the accused to which notices were sent. Therefore, the notices sent to the accused deemed to have been served on the accused. Moreover, there is no cross-examination of PW1 and defence evidence is silent regarding service of notice to the accused. The materials placed by the complainant clearly establishes after dishonour of the cheque the complainant sent notice to the accused in compliance of Sec.138(b) of N.I Act. Hence, I answer Point No2. in the Affirmative. 25 C.C.No.1102/2017
21. Point No.3 :- In view of my findings on Point No.1 & 2 the complainant proved that the accused has issued cheque in question towards discharge of liability and the said cheque dishonoured for want of sufficient funds in the account of the accused and inspite of demand notice by the complainant, the accused fails to pay the cheque amount. Therefore, the accused is liable for punishment for the offence punishable U/s.138 of N.I Act. In the cheque bounce case apart from punishment to the accused, compensation can also be awarded to the complainant with respect to dishonoured cheque. Ex.P.5 cheque is dated 30.5.2016 and the amount covered therein is of Rs.2,00,000/-. If the cheque honoured when it was presented for encashment, the complainant would have utilized the said money for its business purpose and would have got substantial profit. But the act of the accused caused loss to the complainant and dragged the complainant to the court. The complainant nearly spent two years for 26 C.C.No.1102/2017 redressal. It is under these circumstances the complainant has to be suitably in the matter. In the result, I proceed pass the following.....
ORDER
The complaint filed by the
complainant against Accused is allowed.
Acting U/s.255(2) of Cr.PC, the
accused convicted for the offence
punishable U/s.138 of N.I. Act and
sentenced him to pay fine of
Rs.2,50,000/-. In default of payment of said fine amount, the accused shall undergo simple imprisonment for a period of Six months.
Out of the said fine amount order to pay Rs.2,45,000/- to the complainant as compensation and the remaining amount of Rs.5,000/- shall go to the state.
(Dictated to the typist directly on computer, corrected and then pronounced in open court by me on this the 24th day of May, 2018) (N.Muniraja) XXVII A.C.M.M., Bangalore.
ANNEXURE Witnesses examined on behalf of the complainant:
PW1 : H.M.Manjunath.
Documents marked on behalf of the complainant:
Ex.P.1 : Cc. of Partnership deed
27 C.C.No.1102/2017
Ex.P.2 : Money lending license
Ex.P.3 : Registration acknowledgement
Ex.P.4 : GPA
Ex.P.5 : Cheque
Ex.P.5(a) : Signature of the accused
Ex.P.6 & 7 : Bank endorsements
Ex.P.8 : Office copy of Legal Notice
Ex.P.9 & 10 : Postal receipts
Ex.P.11 : Unserved Postal cover
Ex.P.11(a) : Unserved legal notice in cover
Ex.P.12 : Unserved Postal cover
Ex.P.12(a) : Unserved legal notice in cover
Ex.P.13 : Form No.6
Ex.P.14 : Letter
Ex.P.15 : Payment Receipt
Ex.P.16 & 17 : Copy of two income tax returnes Ex.P.18 : Certificate U/s.65(B) of Evidence Act Ex.P.19 : Membership Application Ex.P.20 : loan application Ex.P.21 : Case details of C.C.No.9940/16 Ex.P.22 : Case details of C.C.No.5679/16 Ex.P.23 : Case details of C.C.No.9746/16 Ex.P.24 : Judgement in C.C.No.3620/16 Ex.P.25 : Judgement in C.C.No.3899/16 Ex.P.26 : Certificate U/s.65(B) of Indian Evidence Act.
28 C.C.No.1102/2017Witnesses examined on behalf of the accused:
DW1 : Jayanaik DW2 : Suresh kumar.J
Documents marked on behalf of the accused:
Ex.D.1 : Loan pass book
XXVII A.C.M.M Bangalore.
29 C.C.No.1102/2017
Dt:24.05.2018
Complnt:Sri.S.S Adv.,
Accused:BPM Adv.,
For Judgement
(Order typed vide separate sheet)
ORDER
The complaint filed by the
complainant against Accused is allowed.
Acting U/s.255(2) of Cr.PC, the
accused convicted for the offence
punishable U/s.138 of N.I. Act and
sentenced him to pay fine of
Rs.2,50,000/-. In default of payment of said fine amount, the accused shall undergo simple imprisonment for a period of Six months.
Out of the said fine amount order to pay Rs.2,45,000/- to the complainant as compensation and the remaining amount of Rs.5,000/- shall go to the state.
(N.Muniraja) XXVII A.C.M.M., Bangalore 30 C.C.No.1102/2017