Bangalore District Court
Sri.Satish vs V.Suresh Babu on 8 May, 2017
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 8th day of May, 2017
Present: Smt. Saraswathi.K.N, B.A.L., LL.M.,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.21384/2011
Complainant : Sri.Satish,
S/o.S.V.Shivarudraiah,
R/at.No.160, 9th Cross,
N.R.Colony,
Basavanagudi,
Bengaluru-19.
(Rep. by Sri.Pradeep.C.S..,
Adv.,)
- Vs -
Accused : V.Suresh Babu,
S/o.Vasudev,
R/at.No.94/36, 4th Floor,
23rd B Cross, 14th Main,
3rd Block, Jayanagar East,
Bengaluru-11.
Office address:-
Welt Management Services
Pvt., Ltd.,
No.439/30, Ground Floor,
3rd Cross, Wilson Garden,
Bengaluru-27.
2 C.C. No.21384/2011 J
(Rep. by Sri.Bharath Babu., Adv.,)
Case instituted : 29.4.2011
Offence complained : U/s 138 of N.I. Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of order : 8.5.2017
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he knows the Accused since several years, as both of them are good friends. The Accused approached him in the month of January 2010 for a hand loan of 6.5 Lakhs on the ground that he was in financial crisis and believing him, he paid the said loan amount to the Accused in the month of January 2010 by way of cash and as such the Accused is liable to pay him a sum of Rs.6.5 lakhs.
3 C.C. No.21384/2011 J3. The Complainant has further submitted that, as agreed by him, the Accused did not repay the loan amount of Rs.6.5 Lakhs and in discharge of the said loan, after repeated requests made by him, the Accused issued a post dated cheque bearing No.072279 dated 5.1.2011 drawn on the Bank of Baroda, Jayanagar, Bengaluru. The Accused called him in the month of January 2011 and requested him not to present the said cheque for realization, since he did not have sufficient balance in his account and requested him to give him some more time and requested him to present the cheque in the month of March 2011.
4. Accordingly as per the requested of the Accused, when he presented the said cheque for encashment through his Banker, the same came to be returned dishonoured for the reason "Opening Balance Insufficient" on 16.3.2011 vide bank endorsement of the same date.
5. The Complainant has further submitted that, thereafter left with no other option, he got issued a legal notice to both the addresses of the Accused on 24.3.2011 through RPAD calling upon him to repay the cheque 4 C.C. No.21384/2011 J amount within 15 days from the date of the receipt of the legal notice. Though the Accused has sent a reply notice, he has not complied with the demand made in the said legal notice. Hence the present complaint.
6. The Complainant submits that, the dishonour of the cheque by the Accused has been malafide, intentional and deliberate. Feeling aggrieved by the conduct of the Accused, he has filed the present complaint praying that the Accused be summoned, tried and punished in accordance with Sec.138 of the Negotiable Instruments Act.
7. The Complainant has led the Pre-summoning evidence on 5.7.2011. Prima-facie case has been made out against the Accused and he has been summoned vide order of the same date.
8. The Accused has appeared before the Court on 29.9.2011, he has been enlarged on bail, the substance of the accusation has been read over to him on 31.01.2012, he has pleaded not guilty and claimed the trial.
5 C.C. No.21384/2011 J9. In his post-summoning evidence, the Complainant has examined himself as PW1 and has filed his affidavit, wherein he has reiterated the averments made in the complaint.
P.W.1 has produced and also relied upon the following documentary evidence:-
Ex.P1 is the cheque, in which, the signature is identified by P.W.1 as that of the Accused as per Ex.P1(a), the Bank Memo as per Ex.P2, the office copy of the Legal Notice as per Ex.P3, the Postal Receipt as per Ex.P4, two Postal Acknowledgements as per Ex.P5 and 6 respectively, the un-served Legal Notice as per Ex.P7, the complaint as per Ex.P8.
10. The statement of the Accused under Sec.313 of Cr.P.C., has been recorded on 27.7.2012.
11. The Accused has led his rebuttal evidence by examining himself on oath and he has deposed in his evidence that that he is a BBM Graduate and he started his Company in the year 2006 and after the completion of his education, he worked in 3 companies and worked as a Relationship Officer, dealing with Mutual funds and Stock Exchanges and after gaining experience from the 6 C.C. No.21384/2011 J said 4 companies, he started his own company. According to him, his company deals with Stocks, Equities, Bonds and all financial products and that he is working as a Sub-broker in the ITI Financial Services Ltd., and that he has obtained license from the Security Exchange Board of India and National Stock Exchange and Bombay Stock Exchange.
12. He has further deposed that, the Complainant and he were classmates in the PUC and that the Complainant is doing the profession of a priest and in addition to the said profession, the Complainant does money lending business on small scale and that, when he started his company, the Complainant was visiting his office occasionally and the latter had intended to become a partner or an Investor in the said company.
13. DW1 has further deposed that, when the Complainant used to visit his company, he was making use of his office staff for the purpose of recovery of the loans from the borrowers, from which, he came to know that the Complainant was doing money lending business.
7 C.C. No.21384/2011 J14. The chief defence of the Accused is that his father's friend by name Lingegowda was in need of a financial assistance of Rs.1.5 Lakhs and when the said Lingegowda sought for the same from his father, his father in turn had asked for the said money from him and at that time, there was discussion in his office among himself, his father, Lingegowda and the Complainant and at that time he requested the Complainant to lend the said loan to Lingegowda, who agreed for the same and this was during the year 2009 and 2010.
15. According to DW1, the Complainant lent Rs.50,000/= once and thereafter Rs.30,000/=, and Rs.50,000/= to Lingegowda during the month of January 2010 in his office and as a security for the said lending, the Complainant had demanded for a cheque from Lingegowda and as the said Lingegowda did not have any cheque and likewise even his father did not possess any cheque, as per the instructions of his father, he gave his signed blank cheque to the Complainant as per the demand made by the latter.
8 C.C. No.21384/2011 J16. It is the defence of the Accused that it is the cheque in dispute which had been given by him to the Complainant as a security for the loan amount of Rs.1.5 Lakhs alleged to have been availed by Lingegowda from the Complainant.
17. According to the Accused, 5 to 6 months from the date of lending, the said Lingegowda repaid the entire loan amount along with interest to the Complainant and at that time, when he was present in his office along with his father and demanded for the return of his cheque from the Complainant, the latter came up with a new plan that, he would retain the said cheque for the purpose of security towards the amount that was invested by him in Equities through his company.
18. The Accused has further deposed that prior to 2009 itself, the Complainant was investing the amounts in Shares and Equities, but it was only in the year 2009 that he had invested the amount through his company and during the year 2010, as the value of the shares and equity got deteriorated and on the same pretext, the Complainant retained the cheque in dispute with him.
9 C.C. No.21384/2011 J19. Though in this regard, initially the Accused had not produced any documents before the court, subsequent to his cross-examination, he has produced the documentary evidence at Ex.D1 to 15 which are as follows:-
The Attested copies of the following documents:-
The Certificate of Incorporation as per Ex.D1, the Memorandum of Association as per Ex.D2, the Certificate of Registration as per Ex.D3, the Certificate of Registration Securities and Exchange Board of India as per Ex.D4, the Certificate of Members as per Ex.D5, the NCDS as per Ex.P6, the General Body Meeting and Annul General Body Meeting as per Ex.D7 and 8 respectively, the Director Report as per Ex.D9, the Auditor Report as per Ex.D10, the Bank Statement as per Ex.D11, the Annual Report and Balance Sheet for the years 2008-09 to 2010-11 as per Ex.P12 to Ex.P14 respectively, the Telephone Bills as per Ex.D15.
20. During his cross-examination, the Accused has admitted that, the cheque in dispute belongs to his account and that it bears his signature. However he has denied the entire case of the Complainant as suggested to him by the learned counsel for the Complainant.
10 C.C. No.21384/2011 J21. It is elicited from the Accused that, as per the contents of his Reply Notice at Ex.P7, no where it is stated in the Reply Notice that the Complainant had lent Rs.1.5 Lakhs to Lingegowda and it is stated in the Reply Notice that, it is he, who had availed the loan of Rs.1.5 Lakhs from the Complainant. Likewise in his cross- examination, the Accused has claimed that, except the transaction in question there has been no other transaction between the Complainant and himself and it is also elicited from him that the Complainant had invested the amounts in his company. However he has denied the suggestion that, he has issued the cheque in dispute in favour of the Complainant towards the repayment of his loan for Rs.6.5 Lakhs and that he has not issued the said cheque on behalf of his father's friend Lingegowda, who had allegedly availed a loan of Rs.1.5 Lakhs.
22. In support of the defence of the Accused, his father by name Vasudeva is examined as DW2, who has deposed in his evidence that, the Complainant and the Accused are friends and that he knows the Complainant since 10 to 12 years in 2014 and that the Complainant does finance business.
11 C.C. No.21384/2011 J23. According to DW2 as his friend by name Lingegowda was in need of Rs.1.5 Lakhs, he got the said amount lent to his friend Lingegowda, through his son from the Complainant in the year 2010, for the purpose of which, as per the demand of the Complainant, his son i.e., the Accused had issued a signed blank cheque to the Complainant for the purpose of security and that the said Lingegowda repaid the said loan amount after 3 to 4 months from the date of it's borrowing.
24. According to DW2, after 15 days from the date of the issuance of the cheque by his son, the Complainant lent Rs.1.5 Lakhs to Lingegowda in 2 to 3 installments and he was present on 2 such occasions, but during the third time, he had instructed his friend Lingegowda to collect the amount from the Complainant directly.
25. According to DW2, when his son sought for the return of the cheque after the repayment of the loan by Lingegowda, the Complainant had informed him that he had not brought the said cheque and that he would return it later. However he has pleaded ignorance as to if 12 C.C. No.21384/2011 J the Complainant has returned the cheque to his son or not.
26. DW2 has been cross-examined by the learned counsel for the Complainant, which will be discussed subsequently.
27. The Accused has examined the material witness in this case viz., Lingegowda, by taking whose name the Accused has taken his entire defence version.
No doubt even the said witness has deposed in his chief-examination consistently as that of DW1 and 2 and he has been cross-examined extensively by the learned counsel for the Complainant.
28. Likewise two other witnesses have been examined in support of the defence of the Accused as DW4 and 5 respectively, who are admittedly the Ex- employees who were working in the company of the Accused. Even though these witnesses have been cross- examined, their evidence is not of much help to the defence of the Accused.
29. The learned counsels representing both the sides advanced final arguments at length.
13 C.C. No.21384/2011 J30. The learned counsel for the Complainant has prayed for the conviction of the Accused on the ground that, the acquaintance between the parties is admitted. The Complainant has proved that he has lent a loan of Rs.6.5 Lakhs having arranged the same from out of his earnings and from out of the funds given to him by his brother and sister.
31. It is further argued that the Accused has issued the Reply Notice in which the defence of the Accused is entirely distinct from that taken by him in his chief evidence before the court.
32. The Accused admits the financial capacity of the Complainant by admitting that the latter has invested the amounts in shares and mutual funds through his company and that the latter has financial capacity as a result of which he used to lend loans to various persons, though it is claimed it is only small sums of money.
33. It is further argued that the Complainant does not dispute the documentary evidence relied upon by the Accused at Ex.D1 to D15. The evidence of D.W.2 is not reliable since he is an interested witness. Likewise the 14 C.C. No.21384/2011 J evidence of D.W.3 to D.W.5 is also not reliable since they are all interested witnesses.
34. It is further argued that the defence of the Accused is improbable since the same suffers from serious contradictions and inconsistencies and moreover the presumption under Sec.118 r/w.Sec.139 of the N.I. Act is in favour of the Complainant and thus the Accused be convicted for the offence punishable under Sec.138 of the N.I. Act.
35. On the other hand, the learned counsel for the Accused has prayed for the acquittal of the Accused on the following grounds:-
At the outset the acquaintance between the parties is admitted. But there is no loan transaction between them as alleged in the complaint. The Accused issued the cheque only as a security for the purpose of the loan of his father's friend Lingegowda/D.W.3.
36. It is further argued that the Complainant had invested in the mutual funds and equities much prior to the transaction of loan between himself and D.W.3. Therefore even after the clearance of the loan by 15 C.C. No.21384/2011 J Lingegowda/D.W.3, instead of returning the cheque in question, the Complainant retained the same as a security for the amount that he had invested in the mutual funds through the Accused. Hence it is argued that there is no loan transaction as alleged and he has misused the cheque issued by the Accused for security purpose.
37. It is further argued that the Complainant has utterly failed to prove his financial capacity before the court. The Complainant has failed to prove the alleged loan transaction as well as the existence of the legally enforceable debt. The alleged loan transaction is in clear violation of Sec.269 SS of the Income Tax Act. It is further argued that as per the well-settled principles of law, unaccounted money is not a legally recoverable debt.
38. It is next argued that the defence of the Accused is corroborated by the consistent and independent evidence of D.W.2 to D.W.5 and though all of them are cross-examined, nothing worth is elicited from them so as to discredit their evidence.
16 C.C. No.21384/2011 J39. It is lastly argued that the Accused has successfully rebutted the presumptions available in favour of the Complainant under Sec.118 and 139 of the N.I.Act, while the Complainant has failed to prove his case beyond reasonable doubt, while the defence of the Accused is probable and believable and thus prayed for the acquittal of the Accused.
40. I have considered the submissions and perused the record carefully.
41. Sec.138 of the Negotiable Instruments Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence under Section 138 Negotiable Instruments Act are:-
(i) Drawing up of a cheque by the Accused towards the payment of the amount of money, for the discharge, in whole or in part, of any debt or any other liability;
(ii) Return of the cheque by the bank as unpaid;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 17 C.C. No.21384/2011 J days of the receipt of the notice under the proviso
(b) to Section 138.
42. The Explanation appended to the Section provides that, the "debt or other liability" for the purpose of this Section means a legally enforceable debt or other liability.
43. Apart from this, Sec. 139 of the Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms:-
"It shall be presumed, unless the contrary is proved, that:-
The holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, of any debt or other liability".
44. Also, Sec. 118 of the Negotiable Instruments Act states, "Until the contrary is proved, the following presumptions shall be made:-
(a) That every Negotiable Instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or 18 C.C. No.21384/2011 J transferred, was accepted, indorsed, negotiated or transferred for consideration;"
45. Thus, the Act clearly lays down the presumptions in favour of the Complainant with regard to the issuance of the cheque by the Accused, towards the discharge of his liability in favour of the Complainant.
46. Under the scheme of the Act, the onus is upon the Accused to rebut the presumptions in favour of the Complainant by raising a probable defence.
47. Such being the legal position, it would be pertinent to refer to the defences raised by the Accused to rebut the presumptions in favour of the Complainant in this case.
48. Before discussing about the dispute facts in the present case, it is necessary to refer the admitted facts between the parties.
The acquaintance between the parties is admitted and likewise it is also an admitted fact that the Accused and the Complainant are schoolmates knowing each other since 10 to 12 years. It is also an admitted fact that the Accused has been running a Company in the 19 C.C. No.21384/2011 J business of shares and equities. Likewise it is also an admitted fact that, the cheque in dispute and the signature on the said cheque is that of the Accused. Likewise it is also an admitted fact that the cheque in dispute has been issued by the Accused in favour of the Complainant.
49. In the background of these admitted facts, it is necessary to note here that, there is a serious dispute between the parties with regard to the purpose for which the cheque in question has been issued by the Accused in favour of the Complainant.
Admittedly it is the specific case of the Complainant that the cheque in dispute has been issued by the Accused in his favour as a post dated cheque towards the repayment of the hand loan of Rs.6.5 Lakhs, which the former had allegedly availed from him for the purpose of establishing his Company.
50. On the contrary, it is the specific defence of the Accused that, there has been no such financial transaction between the Complainant and himself as alleged in the present complaint and that there was a loan transaction between his father's friend by name 20 C.C. No.21384/2011 J Lingegowda/DW3 and the Complainant to the tune of Rs.1.5 Lakhs during the year 2009-10 and as a security for the said loan, he had to issue the cheque in question as a singed blank cheque to the Complainant, since neither his father nor his friend Lingegowda/DW3 had any cheque of their own.
51. Therefore as per the defence version of the Accused as set out in the cross-examination of the Complainant as well as in his rebuttal evidence, the cheque in question had been issued by him to the Complainant only for the purpose of security on the loan of Rs.1.5 Lakhs which his father's friend Lingegowda/D.W.3 had availed from the Complainant at his intervention.
52. Interestingly it is seen that, the Complainant has produced and relied upon the Reply Notice given by the Accused as per Ex.P7, which is admittedly the defence set out by the Accused first in point of time.
53. In the said Reply Notice, the Accused has admitted the acquaintance between himself and the Complainant as well as his establishing a company by 21 C.C. No.21384/2011 J name Welt Management Services Pvt., Ltd., and he has alleged that the Complainant intended to become a partner in the said business with him, which the latter refused and for the same reason, the Complainant has issued the legal notice to him with a malafide intention.
54. Further the defence of the Accused as set out in Para 3 of the Reply Notice is that, he had borrowed a loan of Rs.1.5 Lakhs from the Complainant in the month of January 2009 and not in the month of January 2010 and not a loan of Rs.6.5 Lakhs as alleged by the Complainant in his legal notice. According to the Accused he had borrowed the said loan of Rs.1.5 Lakhs from the Complainant for monthly installments basis i.e., Rs.10,000/= as per month along with interest and as per the agreement between them, he repaid the entire loan amount with interest which was closed in April 2010.
55. It is further stated in Para No.5 of the Reply Notice that, at the time of the Accused borrowing the said loan amount from the Complainant, the former had given his 6 blank cheques for security purpose and after the repayment of the said loan together with interest, though he sought for the return of his cheques, the Complainant 22 C.C. No.21384/2011 J was avoiding and finally failed to return them and that the Complainant is in the habit of taking blank cheques from the parties and harassing them with an intention to cheat innocent persons like him. Therefore in the Reply Notice, the Complainant has been called upon to return back his 6 blank cheques and that otherwise he would have to face legal action.
56. Now in the background of the defence of the Accused in his Reply Notice at Ex.P7, it is necessary to note that, it is a well settled principle of law that the presumptions under Sec.118 and 139 of the N.I.Act comes into play in favour of the Complainant, the moment the Accused admits that the cheque in dispute belongs to him and that it bears his signature. Then immediately the onus of proof is shifted in favour of the Accused to rebut the said presumptions by raising probable defence. Moreover the defence taken by the Accused in the Reply Notice will have a great strength since it will be the defence taken first in point of time. Therefore the entire defence of the Accused during the subsequent course of the proceedings will be considered in the light of the defence set up by him in his Reply Notice.
23 C.C. No.21384/2011 J57. In such circumstance when the defence of the Accused is from the moment he issues a Reply Notice till his rebuttal evidence before the court, there should not be an inconsistency, which create a doubt thereby making the entire defence highly improbable and unbelievable. Interestingly in the present case, the Accused has utterly failed to satisfy this requirement since he has come up one defence in his Reply Notice at Ex.P7, while a total inconsistent defence while cross- examining the Complainant and while leading his rebuttal evidence. In view of the same, it is considered necessary to discuss the evidence of the parties before this court in detail.
58. In order to prove his case, the Complainant has produced and relied upon the documentary evidence at Ex.P1 to P7. Admittedly the Complainant has also fulfilled all the ingredients of Sec.138 of the N.I.Act. Thereafter the Complainant has been cross-examined by the learned Defence Counsel, wherein it is elicited from him about the acquaintance between the parties as well as the businesses of the Accused. As admitted by the Accused himself, the Complainant has also admitted in his cross-examination that, he is a Purohit/Priest by 24 C.C. No.21384/2011 J profession and that except the said profession he does not have any other business.
59. According to the Complainant, the Accused sought for a financial assistance of Rs.6.5 lakhs from him on the ground that, the latter had incurred loss in his business. No doubt it is elicited from the Complainant that, he had invested the amount in mutual funds through the Accused in the year 2010 and that prior to 2010, the Accused has never approached him seeking any financial assistance.
60. It is pertinent to note that the cross- examination of the Complainant has been initially focused on the financial capacity of the latter, so as to have arranged a huge amount of Rs.6.5 Lakhs, which he claims to have lent to the Accused in January 2010. Though in this regard, it is elicited from the Complainant that, he has not lent the amount to the Accused for interest and that, he has lent it only in friendship, and that he has not declared about his lending of Rs.6.5 Lakhs to the Accused in his IT returns.
25 C.C. No.21384/2011 J61. According to the learned Defence Counsel, the case of the Complainant is highly doubtful in view of there being no proof of the financial capacity of the latter for having arranged Rs.6.5 Lakhs for the purpose of lending the same to the Accused, but it is pertinent to note, during the course of his evidence before the court, the Accused himself has admitted that, the Complainant does money lending business in addition to the priest profession, though according to him it is done by the Complainant only on small scale.
62. However according to the Accused, during the year 2009-10, the Complainant had lent Rs.1.5 Lakhs to his father's friend Lingegowda /DW3, the version which is supported by the D.W.2 and 3, consistently. Moreover the Accused and his witnesses have deposed that, the Complainant does money lending business, though according to them, it is only for a small amount and the Accused having admitted that the Complainant has also invested the amount in the shares through his company, these consistent versions of the Accused which is corroborated by the evidence of DW2 to 5, it is needless for the Complainant to prove his financial capacity in as 26 C.C. No.21384/2011 J much as the same has become an admitted fact, which need not be proved by any separate evidence.
63. No doubt as rightly pointed out by the learned Defence Counsel during the course of his arguments, admittedly the Complainant has not declared about the alleged loan transaction in his IT returns nor has he produced any documents to prove his financial capacity etc., but the same are considered as not relevant in view of the admission on the part of the Accused about the financial capacity of the Complainant. Therefore it could be seen that, though during the course of his arguments, the learned counsel for the Accused has laid stress upon the financial capacity of the Complainant, the same has not been seriously challenged while cross-examining the Complainant.
64. In this regard, this court places reliance upon the following decisions:-
i) Shankar Siddappa Kurbar Vs., Sri.Basavaraj S.Tarale, decided in Cri.Appeal No. 2763/2009, wherein it is held that:
"The initial burden was on the Accused to establish that there was no legally 27 C.C. No.21384/2011 J enforceable debt, which he may do so either by tendering independent evidence or by relying upon the evidence of the Complainant".
65. It was further held that the Trial Court in the said case was in error in proceeding to hold that there was a burden cast on the Complainant to establish that he had funds in the first place to have lent monies to the Accused. It was further held that there was no liability on the Complainant to establish that he had funds as on the date of the transaction to have lent money to the Accused and it was sufficient for the Complainant to establish that the cheque in question was issued on the account of the Accused and that it was duly signed by him.
ii) Rangappa Vs., Mohan, reported in (2010) 11 SCC 441, wherein it has been held that:-
"The presumption mandated by
Sec.139 of the N.I.Act includes a
presumption that there exists a legally enforceable debt or liability".
28 C.C. No.21384/2011 Jiii) Lekh Raj Sharma Vs., Yash Pal Gupta decided by the Hon'ble High Court of Bombay, wherein it is held that, "When the signature on the cheque is admitted by the Accused to be his own, the non-production of the witnesses by the Complainant, from whom he claims to have arranged the funds so as to lend to the Accused is immaterial".
It is further observed in this judgment that, "To say that any amount not disclosed in the IT returns would become irrecoverable would itself defeat the provisions of Sec.138 of the N.I.Act.
66. Now coming to the defence version of the Accused as pointed earlier, though the Accused has set up his defence theory in his Reply Notice, interestingly he has failed to make even a single suggestion to the Complainant while cross-examining him in the light of the defence as set out by him in his Reply Notice.
29 C.C. No.21384/2011 J67. Likewise for the first time, during his chief evidence, the Accused has come up with a total inconsistent defence to the effect that a loan of Rs.1.5 Lakhs was availed from the Complainant by his father's friend Lingegowda/DW3, that too during the year 2009 and 2010. Even with regard to this defence version, it could be seen that, even while cross-examining the Complainant, it is suggested to him that, the Accused had availed a loan from him in the year 2009 and for the said purpose, he had issued his signed blank cheque to him, by misusing it he has filed this false case. This is also totally contrary to what is stated by the Accused in his Reply Notice at Ex.P7.
68. Likewise it is seen that, during his chief- evidence, the Accused has claimed that, he had got lent a loan of Rs.1.5 lakhs to Lingegowda/DW3 during 2009- 2010 with his intervention and the same has been lent to D.W.3 on 3 to 4 occasions, by way of part payments on 4 occasions. According to the Accused, while getting advanced such loan amounts, as per the demand of the Complainant, he had issued his signed blank cheque i.e., the cheque in dispute to the Complainant and after 5 to 6 months from then, the said Lingegowda /DW3 repaid the 30 C.C. No.21384/2011 J entire loan amount together with interest to the Complainant.
69. In this regard, the father of the Accused who has examined as D.W.2, though has supported the version of his son i.e., the Accused, he has claimed in his chief-evidence that, the Complainant does finance business and that he got lent Rs.1.5 Lakhs to his friend Lingegowda from the Complainant in the year 2010, which his friend repaid 3 to 4 months from the date of borrowing. According to D.W.2, the Complainant had lent Rs.1.5 Lakhs in 2 to 3 installments to D.W.3 after 15 days from the date of the issuance of the cheque by his son and according to him, he was present on 2 occasions when the Complainant lent the partial loan amounts to his friend Lingegowda and during the third time, he was not present.
70. It is pertinent to note that when the defence version of the Accused with regard to the period during which the cheque in question is said to have been issued by him to the Complainant is compared with the version of D.W.2, it could be observed that, there is a serious contradiction. According to the Accused, he issued the 31 C.C. No.21384/2011 J cheque in dispute to the Complainant father the Complainant lent Rs.1.5 Lakhs to Lingegowda, while according to the version of D.W.2, his son issued the cheque to the Complainant 15 days prior to the alleged lending of Rs.1.5 Lakhs by the latter to D.W.3.
71. Moreover D.W.2, being the father of the Accused has pleaded ignorance as to if the Complainant has returned the cheque of his son or not? This ignorance on the part of D.W.2 creates a serious doubt about the veracity of his evidence, since he is said to be one of the witnesses to the entire transaction as alleged by the Accused.
72. It is to be noted that there are also contradictions in the evidence of the Accused and that of D.W.2 with regard to the alleged payments made by the Complainant to Lingegowda.
Though in his chief-evidence D.W.2 has claimed that, he was present only on the first two occasions during which the Complainant had lent the amounts to D.W.3, in his cross-examination he has come up with a contrary version that, he was present on all the 4 occasions when the Complainant lent the amount to 32 C.C. No.21384/2011 J D.W.3. However according to D.W.2, the Complainant has lent the amount to D.W.3 on 5 occasions, which is also contrary to what is deposed by D.W.2 earlier on the same day of his cross-examination and in his chief- evidence before the court.
73. In this regard now coming to the version of the materials witness of this case viz., Lingegowda/D.W.3 though he has supported the defence of the Accused, he has come up with a totally new version that, the loan was lent in the house of the Accused on 3 occasions and once near the Nettakallappa Circle by the Complainant during the span of 2 to 2 ½ months by way of part payments.
74. Though D.W.3 has supported the defence of the Accused, there is no proof by him so as to prove his alleged loan transaction of Rs.1.5 lakhs from the Complainant as well as his alleged repayment of the said loan amount together with interest.
75. Likewise it is seen that, there is a serious contradiction in the evidence of D.W.3, wherein he has claimed that the Accused has issued the cheque to the Complainant as per the say of D.W.2 after a span of 33 C.C. No.21384/2011 J normally 1 ¾ months, after the lending of the amount by the Accused to him in 3 installments.
76. Therefore the serious contradictions in the evidence of D.W.1 to D.W.3 with regard to the time during which the cheque in question came to be issued by the Accused in favour of the Complainant and in the absence of proof with regard to the alleged loan transaction of Rs.1.5 Lakhs between the Complainant and D.W.3, the same cannot be considered as a probable defence, which could be believed by this court.
77. Even otherwise when the evidence of D.W.1 to D.W.3 is carefully analyzed, it goes to show that, the same is entirely contrary to the one as set out in the Reply Notice by the Accused. Therefore if the defence of the Accused were to be really true, then nothing prevented him from relying upon the same defence while cross-examining the Complainant as well as during his evidence before the court. But for the reasons best known to him, the Accused has taken up inconsistent defences thereby creating a serious doubt about the same.
34 C.C. No.21384/2011 J78. Moreover when the Accused has claimed in his Reply Notice that, the Complainant had collected his 6 blank cheques as a security for the loan of Rs.1.5 Lakhs and the cheque in dispute is one among them, then the minimum action that could have been taken by him against the Complainant was by way of issuing a notice calling upon the latter to return his cheques or issuing Stop Payment Instructions to his banker. Though in the Reply Notice, the Accused has demanded for the return of his alleged 6 blank chequs, no where the Accused has mentioned the numbers of 5 other cheques which he claims to have issued as blank cheques to the Complainant. Therefore this also raises a serious doubt about the defence version of the Accused.
79. Hence the Accused has miserably failed to prove that, the Complainant is in possession of his 5 other cheques, which he has cited in his Reply Notice at Ex.P7. In this regard, it is not the defence of the Accused that, he has either issued stop payment instructions to his Bank or taken any legal action against the Complainant. The Accused, being an educated, having failed to do so, an adverse inference is liable to be drawn against him in this regard.
35 C.C. No.21384/2011 J80. Likewise the defence of the Accused with regard to the cheque in dispute is that, even after the repayment of the entire loan together with interest by D.W.3 in favour of the Complainant, though he had sought for the return of his 6 blank cheques from the Complainant, the latter did not comply with the same on the ground that, he would retain the said cheques towards security for the investment of the amount made by the Complainant in the mutual fund through his company.
81. No doubt by relying upon the documentary evidence as per Ex.D1 to 15, the Accused has proved that the Complainant has invested in the mutual funds through his company, there is no proof to show that the cheque in dispute had been retained by the Complainant only for the purpose of security of his investment amount. Therefore this bald defence raised by the Accused cannot be believed by this court.
82. In support of his arguments the learned counsel for the Accused has relied upon the following decisions:-
1. In Prabhakar Murthy Vs., S.G.Shankaraiah, reported in 2016 STPL 2318 Kar, 36 C.C. No.21384/2011 J
2. In Smt.Threja Vs., Smt.Jayalaxmi, reported in 2016 STPL 3872,
3. In John K.Abraham Vs., Simon C.Abraham & ano., reported in 2014 STPL 3987 SC,
4. In K.Subramani Vs., K.Damodara Naidu, reported in 2015 I SCC 99,
5. In Mukesh Garg Vs., Sunil Mehra, decided in Delhi Distinct Court,
6. In Kulvinder Singh Vs., Kafeel Ahmed, reported in 2014(2) CCC 017,
7. In Vipula Kumar Gupta Vs., Vipin Gupta, reported in 2014 ACD 383,
8. In Sanjay Mishra Vs., M/s.Kanishka Kapoor @ Nikki & ano., reported in 2009 STPL 5585 Bombay,
9. In Krishna Janardhan Bhat Vs., Dattatraya G.Hegde, reported in 2008 STPL 2464 SC,
10. In K.Prakashan Vs., P.K.Surendran, reported in 2007 STPL 19605 SC,
11. In Vijay Vs., Lazman and ano., reported in (2013)3 SCC 86, 37 C.C. No.21384/2011 J
12. In Rev.Mother Marykutty Vs., Reni C.Kottaram & ano., reported in (2013) I SCC 327,
13. In Shaikh Farooq Vs., Shaikh Rafiq, decided in High Court of Bombay,
14. In Credential Leasing & Credits Ltd., Vs., Shruti Investments & Ano., reported in (2016 STPL 6954 Delhi,
15. M.S.Narayana Menon @ Mani Vs., State of Kerala and ano., reported in (2006 STPL 7179 SC.
83. In the result, I wish to conclude that the Accused is obliged to set up a probable defence and the defence cannot be only a "Possible" defence. It cannot be premised on the mere ipse-dixit of the Accused. There should be some credible material or circumstance available on record, which should lead the court to conclude that the defence/explanation for issuance of the dishonored cheque is a probable one.
84. IN the present case, as discussed above the Accused has miserably failed to probabalise his defence and on the contrary, by taking contradictory defences, he 38 C.C. No.21384/2011 J has created serious doubts in the mind of this court about his defence theory. On the other hand the Complainant has proved his case beyond reasonable doubt and as such he is entitled to the presumptions under Sec.118 and 139 of the N.I.Act.
85. Thus for the reasons discussed above, I proceed to pass the following:-
ORDER By exercising the power-conferred u/s 265 of Cr.P.C., the Accused is hereby convicted of the offence punishable u/s 138 of the Negotiable Instruments Act.
He is sentenced to pay a fine of Rs.6,75,000/- (Rupees Six Lakhs Seventy Five Thousand only) and in default of payment of fine, he shall undergo simple imprisonment for 6 (Six) months.
Out of the fine amount so collected Rs.6,65,000/-(Rupees Six Lakhs Sixty Five Thousand Only) is ordered to be paid to the Complainant as Compensation and the balance of Rs.10,000/- (Rupees Ten Thousand only) is ordered to be adjusted towards cost to the State Exchequer.
The bail bond and surety bond of the Accused stands cancelled.
39 C.C. No.21384/2011 JIssue free copy of the Judgment to the Accused forthwith.
(Dictated to the Stenographer, transcript thereof is computerized and print out taken by her, verified, corrected and then pronounced by me in the open Court on this the 8th day of May, 2017).
(SARASWATHI.K.N), XVI Addl.CMM., Bengaluru City.
ANNEXURE
1. List of witnesses examined on behalf of the Complainant:
PW.1 : Sri.Satish
2. List of documents exhibited on behalf of the Complainant:
Ex.P-1 : Original Cheque; Ex.P-1(a) : Signature of the Accused; Ex.P-2 : Bank memo; Ex.P-3 : Copy of the Legal Notice; Ex.P-4 : Postal Receipt; Ex.P-5 & 6 : Postal Acknowledgements; Ex.P-7 : Un-served legal notice; Ex.P-8 : Complaint.
3. List of witnesses examined on behalf of the Accused:
DW-1 : Suresh Babu;
40 C.C. No.21384/2011 J
DW-2 : Vasudeva;
DW-3 : Lingegowda;
DW-4 : Radhakrishna Hebbar;
DW-5 : Ashok Kumar;
4. List of documents exhibited on behalf of the Accused:- (Attested Copies) Ex.D-1 : The Certificate of Incorporation; Ex.D-2 : Memorandum of Association;
Ex.D-3 : the Certificate of Registration; Ex.D-4 : Certificate of Registration Securities and Exchange Board of India;
Ex.D5 : Certificate of Members;
Ex.D6 : NCDS;
Ex.D7 & 8 : General Body Meeting and Annul
General Body Meeting;
Ex.D9 : Director Report;
Ex.D10 : Auditor Report;
Ex.D11 : Bank Statement;
Ex.D12 to 14 : Annual Report and Balance Sheet for the years 2008-09 to 2010-11;
Ex.D15 : Telephone Bills.
(SARASWATHI.K.N),
XVI ACMM, Bengaluru City.
41 C.C. No.21384/2011 J
8.05.2017
Judgment pronounced in the open court vide separate order.
ORDER By exercising the power conferred u/s 265 of Cr.P.C., the Accused is hereby convicted of the offence punishable u/s 138 of Negotiable Instruments Act.
He is sentenced to pay a
fine of Rs.6,75,000/- (Rupees
Six Lakhs Seventy Five
Thousand only) and in default
of payment of fine, he shall
undergo simple imprisonment for
6 (Six) months.
Out of the fine amount so
collected Rs.6,65,000/-(Rupees
Six Lakhs Sixty Five Thousand
Only) is ordered to be paid to the
Complainant as Compensation
and the balance of Rs.10,000/-
(Rupees Ten Thousand only) is
ordered to be adjusted towards
cost to the State Exchequer.
The bail bond and surety
bond of the Accused stands
cancelled.
42 C.C. No.21384/2011 J
Issue free copy of the
Judgment to the Accused
forthwith.
XVI A.C.M.M., B'luru.