Bangalore District Court
M/S Shriram Transport Finance Co. Ltd vs Ambarish C on 2 January, 2024
KABC030161032023
IN THE COURT OF THE XXV ADDL. CHIEF METROPOLITAN
MAGISTRATE, AT BANGALORE
Dated this the 2nd day of January, 2024
Present:
SMT SUJATA SIDAGOUDA PATIL,
B.SC.,LL.B.
XXV Addl. Chief Metropolitan Magistrate,
Bangalore.
CC NO.9424/2023
Complainant : M/s.Shriram Transport Finance Co.Ltd,
No. 29/A, II floor ,
KH Road,
Bengaluru 27.
Rep. By its GPA Holder
Mr.Prasanna N
S/o.Nagaraj
(By Sri GSK. Advocate )
V/s
Accused : Ambarish
S/o. Chikkmunishamappa
R/at.No.22, Muthukadahalli (V)
Post Begur , near Aswathkatte,
Hoskote, Bangalore Rural 562 122.
(By Sri BMR - Advocate)
1. Date of Commencement 03.03.2023
of offence
2. Date of report of offence 15.04.2023
3. Name of the M/s Shriram Transport Finance
Complainant Co.Ltd.
2
CC NO.9424/2023
4. Date of recording of 15.04.2023
evidence
5. Date of closing of 17.11.2023
evidence
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused is Convicted
8. Complainant Sri.GSK Advocate
Represented by
9. Accused defence by Sri.BMR - Advocate
JUDGMENT
The complainant filed the complaint under Sec.200 Cr.P.C. against the accused for the offence punishable under Sec.138 Negotiable Instruments Act (For short N.I.Act).
2. The brief facts of the case is as under:
The complainant company is engaged in the business of providing financial facilities under hire purchase scheme for vehicles. The accused is one of the customers of the complainant and entered into hire purchase agreement with the complainant for purchase of vehicle bearing No.KA 53 C 2399 vide agreement No.KPURMO5121600003 dt.16.12.2015. Subsequently, the accused defaulted in making payment to the complainant company and on repeated request from the complainant and in response to the demand made by the complainant, the accused issued a cheque bearing No.491533 dt.03.03.2023 for a sum of Rs.4,94,123/ drawn on Canara Bank, Kambaliupra in favour of 3 CC NO.9424/2023 the complainant. The complainant presented said cheque for realisation through its banker ie Standard Chartered Bank, Koramangala branch, Bangalore, same was dishonored for the reason "Funds Insufficient", subsequently, the complainant issued legal notice 14.03.2023 to pay the outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint.
3. After filing of the complaint, cognizance taken and recorded the sworn statement of the complainant. The complainant has complied all the statutory requirements under Sec.138 of N.I.Act. Thereafter, the case is registered against the accused and summons issued. The accused appeared with the Advocate and released on bail. Copy of the complaint furnished to the accused. Plea recorded and read out to the accused. The accused pleaded not guilty and claimed to be tried.
4. In support of the complainant's case, the General Power of Attorney Holder of the complainant company got examined as PW1 got marked Ex.P.1 to Ex.P.8. After closure of the evidence of the complainant, 313 Cr.P.C statement of the accused has been recorded. The accused denied the incriminating evidence placed 4 CC NO.9424/2023 by the complainant. The accused got examined as DW 1 and got marked Ex.D.1 .
5. Heard arguments and perused the material on record. The Learned Counsel for the accused has relied on the following judgments:
1. (2019) 5 SCC 418 (Basalingappa Vs Mudibasappa)
2. (2015) 0 SUPREME (BOM) 2328 (Karad Urban Co operative Bank Limited Vs Sunil Laxman Dalvi & Anr )
3. (2008) 4 SCC 54 (Krishna Janardhan Bhat Vs Dattatraya G Hegde)
6. On the basis of the contents of the complaint the following points arise for my consideration. :
1. Whether the complainant proves beyond reasonable doubt that the accused issued cheque bearing No.491533 dt.03.03.2023 for a sum of Rs.4,94,123/drawn on Canara Bank, Kambaliupra branch, Bangalore in favour of the complainant towards discharge of legal liability ?
2. Whether the complainant proves beyond reasonable doubt that the accused has committed the offence punishable under Sec.138 of N.I.Act?
3. What order ?
7. My findings to the above points are as follows:
Point No.1&2 In the Affirmative.
Point.No.3 : As per final order for the following:5
CC NO.9424/2023 REASONS
8. Point Nos.1 & 2: Both these points are interconnected with each other. In order to avoid repetition of facts, both the points have been taken up together for consideration.
9. The case of the complainant is that the complainant is engaged in the business of providing financial facilities under hire purchase scheme for vehicles. The accused is one of the customers of the complainant and entered into hire purchase agreement with the complainant for purchase of vehicle bearing No.KA 53 C 2399 vide agreement No.KPURMO5121600003 dt.16.12.2015. Subsequently, the accused defaulted in making payment to the complainant company and on repeated request from the complainant and in response to the demand made by the complainant, the accused issued a cheque bearing No.491533 dt.03.03.2023 for a sum of Rs.4,94,123/ drawn on Canara Bank, Kambaliupra in favour of the complainant. The complainant presented said cheque for realisation through its banker ie Standard Chartered Bank, Koramangala branch, Bangalore, same was dishonored for the reason "Funds Insufficient", subsequently, the complainant issued legal notice 14.03.2023 to pay the outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount to the complainant. 6
CC NO.9424/2023 Therefore, the complainant was constrained to file the complaint against the accused.
10. In order to create the legal presumption as per Sec.139 of NI Act, the Power of Attorney Holder of the complainant company got examined as PW1 by narrating entire complaint averments and got marked the documents as Ex.P.1 to Ex.P.8. Ex.P1 is Copy of the SPA. Ex.P.2 is the copy of the Authorization letter. Ex.P.3 is the cheque. Ex.P.4 is the bank endorsement. Ex.P.5 is the office copy of legal notice. Ex.P.6 is the postal receipt. Ex.P.7 is the returned postal cover. Ex.P.8 is the Statement of Account .
11. During his cross examination PW 1 explained that the alleged loan transaction took place at their office situated at K.R. Puram, but they presented the disputed cheque for encashment at Kormangala. At the time of loan transaction, accused executed loan agreement and other requisite documents. But same are not produced before this court. Further he agreed the acceptance of bank statement from the customers to verify if they have cheque book or not. Thereafter he denied acceptance of 6 blank cheques from the accused at the time of loan transaction. Further he denied alleged seizure process followed by their official with respect to the hypothecated vehicle by saying that they have not 7 CC NO.9424/2023 seized the vehicle. But it is specifically suggested that in the month of October 2017 ex employee of the complainant company by name Chowdappa has seized the hypothecated vehicle by taking the signature of the accused on seizure mahazar. But same is denied by the witness stating that there was no such process carried by the employee.
12. He explained that after availing the loan in the year 2016 they might have issued 20 reminder notices but there was no proper response from the accused towards repayment of the loan amount. Thereafter they tried to trace the hypothecated vehicle and went in vain. To that effect they have not produced reliable evidence before this court. Further defense counsel denied service of legal notice. But that has been denied by the witness. The defense counsel insisted for adducing oral evidence of above said exemployee Chowdappa. Witness agreed to adduce the same but not adduced evidence of said witness.
13. As per agreement the principal loan was of Rs.3,55,000/ with agreed rate of interest 18% and to that effect PW 1 has produced the account statement marked as Ex.P.8. As per the account statement in the year 2023 ie at the time of filing of the complaint accused was due of Rs.6,40,000/ but present cheque was presented only for Rs.4,94,123/ When witness was 8 CC NO.9424/2023 asked reason for above said difference of the amount, at that time, the witness explained that before filing the present case the accused approached their branch for OTS process at that time towards settlement effect they have reduced the amount and stuck to the cheque amount. Hence, defense counsel has taken specific defense that the cheque is of the year 2015 , therefore by using above said cheque they cannot claim any amount since the cheque is old document. Hence the amount mentioned under it seems to be time barred debt. Further they have highlighted part payment made by the accused on 3.3.2023 to the extent of Rs.51,912/ but the same is admitted by the witness and the said payment has been displayed in Ex.P.8. Despite defense counsel denied the contents of Ex.P.8 by saying that it is created in order to gain more profit from the accused. Finally it is suggested that after seizure of the hypothecated vehicle, the same is sold in public auction and on receiving the sale prize the entire loan amount has been paid off. Therefore there is no such due to be paid by the accused, but, same is denied by the witness by saying that there was no such seizure process carried by the complainant finance.
9
CC NO.9424/2023
14. In order to rebut the legal presumption, the accused himself got examined as DW 1 by filing of evidence affidavit in lieu of examinationinchief and narrated entire defence taken during cross examination of PW1. It is stated by DW 1 that after availing of loan he made part payment and for rest of due amount the complainant seized the hypothecated vehicle and sold it , therefore there is no such due amount which is legally recoverable against the accused. Further he deposed that the amount mentioned under the cheuqe is time barred debt. Hence, it is not legally recoverable debt and deposed that the approach of the complainant is itself not clean handed. To support his defense evidence he filed cheque book entirely marked as Ex.D.1..
15. During cross examination he admits the loan transaction through which the loan was availed by him in order to purchase Tata Ace vehicle bearing Reg.No.KA 53 C 2399 in the year 2015 accordingly on 16.12.2015 loan transaction was completed and further he agreed that at that time he agreed to pay Rs.4,94,000/ in installments. Accordingly he paid only 4 installments, later on he became defaulter. Entirely he ought to have made payment of 48 installments for Rs.10,280/ each. But he denied part payment alleged to be made by him to the extent of Rs.51,912/ but witness volunteers that after making payment 10 CC NO.9424/2023 they have not issued acknowledgements. He also denied issuance of cheque on 2.8.2018 in favour of the complainant finance towards discharge of balance loan amount. But he admits about possession of hypothecated vehicle which was used by him for his livelihood.
16. During further cross examination he admits about mentioning of seizure of hypothecated vehicle through the complainant official by name Chowdappa and Mohan and to prove this fact there is no reliable documentary evidence placed by the witness. Apart it there is no other material suggestion put by the complainant counsel. But rest of entire suggestion is denied by the witness by saying that there is no due amount to be paid by him.
17. After careful scrutiny of entire oral and documentary evidence placed by the parties it reveals that as per defence the complainant finance has seized the hypothicated vehicle in the year 2017. To prove this fact, there is no documentary evidence placed by the accused. Despite he admits during his cross examination that he is in possession of the hypothicated vehicle and through it he is having source of income. Therefore though he has made above said allegation of seizure of the hypothicated vehicle in his evidence affidavit but admits the exiting possession 11 CC NO.9424/2023 over the hypothecated vehicle. Hence, defence taken by the accused holds no water. He himself admits legal liability of payment of cheque amount in one angle, in another angle, he deposed that, he has issued cheque in dispute for security purpose. Therefore after considering the versions of the accused it creates doubt on the defence raised by the accused and in absence of any such rebuttal evidence it is legally presumed that the accused is due of amount of Rs.4,94,123/.
18. In other angle the defence has suggested that the claimed amount is time barred debt, but they themselves suggested to the PW.1 during his cross examination about last payment made by the accused on 03.03.2023 for Rs.51,912/, hence, from the date of last payment the present case is filed well within the limitation period and said payment has been duly reflected in Ex.P8. Further it is observed that the above said payment has been made prior to intimation of bank return memo to the complainant, hence, there is no chance for the defence to take shelter U/Sec.56 of N.I Act. Further it is observed that till today the accused had legal possession over the hypothecated vehicle and the RC is lying in the name of accused which shows that the complainant finance has not taken drastic step to seize 12 CC NO.9424/2023 the hypothecated vehicle. Under such proved circumstances, accused is liable to pay the cheque amount.
19. As per the terms of agreement, accused has agreed to repay said loan amount, thereafter became defaulter. In absence of any other alternative remedy complainant finance presented the cheque in dispute for encashment process. Accordingly, accused has failed to comply with Sec.138 (c) of N.I.Act. Therefore, the complainant has put up better effort in order to get created legal presumption in its favour as per Sec.118 and 139 of N.I.Act.
20. In this regard I would like to highlight the principles discussed by the Honble Apex Court reported in below mentioned judgment:
1. Sripathi Sing (since deceased) through his LR v/s State of Jharkhand and Anr. CRIMINAL APPEAL NOS. 1269 1270 OF 2021 in which Honble Apex Court has held that :
If as on the date of issuance of cheque liability or debt exist or the amount has become Legally recoverable the section is attracted and not otherwise. In other sense if cheque was issued for repayment of loan installments which had fallen due through such deposit of cheques towards repayment was also described as security in the loan agreement where the loan has actually been advanced and repayment due [ on date of issuance of cheque.13
CC NO.9424/2023
21. Therefore the cheque alleged to be issued as a security pursuant to financial transaction, cannot be considered as worthless piece of paper under every circumstances. "Security" in its true sense is a state of being safe and the security given for loan is something given as a pledge of payment. It is given , deposited or pledged to make certain fulfillment of obligation to which the parties to the transaction are bound. If in a transaction loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security.
22. For the sake of argument that blank signed cheques are given to the complainant, it is well settled principle of law that "even a blank cheque leaf signed and handed over by the accused which is towards some payment, would attract presumption u/s.139 of N.I.Act in absence of cogent evidence to show that cheque was not issued in discharge of debt". Thus no discrepancy had emerged out of the cross examination which may demolish complainant version even on the touch stone of preponderance of probabilities. Thus, accused has not disputed execution of loan hypothecation agreement. Further the accused admits becoming a defaulter. Hence, amount mentioned under the cheque is legally recoverable debt.
14
CC NO.9424/2023
23. If the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonored, the consequences contemplated under Sec.138 and other provisions of N.I.Act would flow. Under `the light of above said discussion it is crystal clear that burden shifts on the accused to rebut the legal presumption which exists in favour of the complainant by proving that the cheque in dispute was not issued towards discharge of amount claimed through cheque.
24. Further it is observed that when the cheque has been presented for encashment, at that time the bank authority issued an endorsement with note " Insufficient Funds ". Hence, the complainant finance has issued the legal notice and same has been duly served on the accused. Though the defense counsel denied service of notice, as per Section 27 of G.C.Act, the notice sent to the correct address of the accused is deemed to be served. So when there is issuance of blank cheque and the signature is not disputed, then burden lies on the accused to disprove the case of the complainant. That means initially the burden is on the 15 CC NO.9424/2023 complainant. Once burden is discharged by the complainant, then onus lies on the accused to disprove the case of the complainant. But, the accused has put better efforts in order to rebut the case of the complainant. But went in vain. Therefore, the object of 138 of N.I.Act is to infuse credibility to negotiable instruments including cheques and to encourage and use of negotiable instruments including cheques in financial transaction. The penal provisions of Sec.138 of N.I.Act is intended to be a deterrent to callus issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same.
25. Hence complainant has placed sufficient oral and documentary evidence to prove that the accused issued the cheque in discharge of legal liability. Therefore, the presumption under Sec.139 of N.I.Act remain intact. The complainant has proved the complaint averments by placing oral and documentary evidence. On the other hand, the accused failed to prove the defence by rebutting the above said presumption.
26. The complainant has proved that the cheque in question was issued by the accused towards discharge of legal liability. Therefore, the court can raise presumption mandated under Sec.139 of N.I.Act as per the ratio laid down by the Hon'ble 16 CC NO.9424/2023 Apex Court in 2010(11) SCC 441 (Rangappa V/s Mohan).
"Once the cheque relates to the account of accused and he accepts and admits the signature on said cheque, then initial presumption as contemplated under Sec.139 of N.I.Act has to be raised by the court in favour of the complainant". On the other hand, the accused failed to rebut the statutory presumption.
27. In the light of the above discussion and the material placed on record, the court is of the opinion that the complainant has proved existence of legal liability and also proved that the accused issued the cheque in question towards discharge of legal liability. The complainant has proved the ingredients of Sec.138 of N.I.Act. Therefore considering the entire facts and circumstances of the case and the available evidence on record, the court comes to the conclusion that the accused committed the offence punishable under Sec.138 of N.I.Act. The complainant is entitled for compensation under Sec.357 Cr.P.C. Therefore, the complainant has proved point No.1 beyond all reasonable doubt. Hence, Point No.1 & 2 are answered in the Affirmative.
28.Point No.3 : , In the light of the above finding on point No.1 , I proceed to pass the following:
17
CC NO.9424/2023 ORDER Acting u/s. 255(2) of Cr.p.c., the accused is convicted for the offence punishable under Sec.138 of N.I.Act.
The accused is sentenced to pay fine amount of Rs.5,04,123/ (Rupees Five Lakhs Four Thousand One Hundred & Twenty Three only ) In default of payment of fine, shall undergo SI for six months.
Acting under Sec.357(1)(b) of Cr.P.C., out of the fine amount, the complainant is entitled for Rs.4,99,123/ (Four Lakhs Ninety Nine Thousand One Hundred and Twenty Three only) towards compensation.
[[[ Acting under Sec.357(1) (a) of Cr.P.C., the remaining fine amount of Rs.5,000/ (Rupees Five Thousand only) is to be remitted to the state.
Copy of the judgment shall be furnished to the accused free of cost.
(Dictated to the Stenographer directly on the computer , transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 2nd day of January, 2024 ).
(SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Prasanna N.
18
CC NO.9424/2023
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Copy of SPA
Ex.P2 : Copy of the Authorization letter
Ex.P3 : Cheque
Ex.P4 : Bank Endorsement
Ex.P5 : Office copy of legal notice
Ex.P6 : Postal receipt
Ex.P7 : Returned Postal Cover
Ex.P8 : Statement of account.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED: D.W.1 : Ambarish
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: Ex.D1 : Cheque book.
Digitally signed
SUJATA by SUJATA
SIDAGOUDA
SIDAGOUDA PATIL
PATIL Date: 2024.01.03
16:47:02 +0530
(SUJATA SIDAGOUDA PATIL)
XXV A.C.M.M., BANGALORE.
19
CC NO.9424/2023