Bangalore District Court
Alam Venkat Naidu vs Smt. Vandhana Nerella on 1 December, 2015
IN THE COURT OF THE LX ADDITIONAL CITY
CIVIL & SESSIONS JUDGE, BENGALURU
(CCH-61)
Dated this the 1st day of December 2015
:Present :
Sri B.Jayantha Kumar, B.A.,Law, LL.M.
LX Addl. City Civil & Sessions Judge,
Bengaluru.
Crl. Appeal. No.442/2014
Appellant : Alam Venkat Naidu
S/o A.Narasappa
Aged about 66 years
No. 6/3/75 Ramanagar
Ananthapur town (A.P. )
(Rep by Sri.Narendra Raju G., Advocate)
Vs
Respondent Smt. Vandhana Nerella
W/o Yogendra
Aged about 36 years
C/o Krishna Kannamulapudi
Door No. 2049, 8th main, E-Block
II stage, Rajajinagar, Bengaluru -10
Represented by GPA holder
K.Rama Reddy
S/o Krishna Reddy
Aged about 44 years
c/o Maruthi Fab Tech
No.A-45, 2nd cross
Peenya 2nd stage, Bengaluru - 58
(Rep by Sri.S.V.Laxminarayana, Advocate)
Crl. A. No. 442/2014 2
JUDGMENT
This appeal is filed u/sec. 374 (3) of Cr.P.C. challenging the judgment dated 9.4.2014 passed by the 21st ACMM, Bengaluru in C.C.No.43620/2010 convicting the appellant/accused for the offence punishable u/s 138 of Negotiable Instruments Act and sentencing him to pay a fine of Rs.30.50 lakhs and in default to undergo simple imprisonment for 9 months.
2. The appellant was accused and respondent herein was the complainant before the lower court. Herein after wards, the parties are referred to as per their ranks assigned to them before the lower court.
3. The brief facts leading to this appeal are as follows:-
Complainant Smt.Vandana Nerella is the NRI in USA and accused is the GPA holder of N.Sunil has induced the complainant and his GPA to accept the offer of sale of land measuring 23.33 acres situated at Kenchanahalli village, Crl. A. No. 442/2014 3 Nelamangala taluk, Bengaluru. After negotiation, a sale agreement was drawn on 22.3.2007 and executed by GPA holder of the complainant and accused for total sale consideration of Rs.3,57,37,500/-. Complainant has paid Rs.40 lakhs and the GPA holder of the complainant K.Rama Reddy paid Rs.3,17,37,500/- to the accused. The said amount paid by cash and cheque to the accused as also to the persons suggested by the accused mentioned in the complaint. The accused did not complete the sale transaction and he had stealthily negotiated for the sale of land in favour of Kaviraj Urs and his wife Bharathi Urs of Lakshmi Minerals, Bengaluru. As such the complainant gave up his claim in the registration of the sale deed and demanded the money paid by the complainant to the accused. The accused paid Rs.1,40,00,000/- by way of RTGS from SBI Ananthpuram branch, A.P. to the complainant's GPA holder's account No. 5336 in Canara Bank, SME Peenya, Bengaluru and accused issued 3 cheques bearing No.838808 dated 3.12.2008, 838810 dated 31.1.2009 and 838813 dated 15.2.2009 for Rupees 10 lakhs each drawn on SBI, Crl. A. No. 442/2014 4 Ananthapuram Branch, A.P. On 27.6.2009, the complainant presented the cheques to her banker, SBI, Rajajinagar branch, Bengaluru. The cheques were returned unpaid as funds insufficient on 12.11.2009 and the complainant received the endorsement on 19.11.2009. The complainant got issued a legal notice to the accused on 11.12.2009 by RPAD and certificate of posting and the notice served to the accused on 20.12.2009 and the complainant sent reply and asked the complainant to send copies of document and accordingly, the complainant submitted copies of document, but the accused has not complied the demand made in the notice. Hence, the complainant presented the complaint alleging the offence punishable u/s 138 of Negotiable Instruments Act.
4. After filing of the private complaint, the learned Magistrate took cognizance of the offence and issued summons to the accused, who put in appearance and engaged a counsel to represent him. The learned Magistrate recorded the plea of Crl. A. No. 442/2014 5 the accused. Accused denied the offence and claimed to be tried. Hence, the trial was conducted by the lower court.
5. In the lower court, the GPA holder of the complainant was examined as P.w.1 and got marked Ex.P1 to 19. After conclusion of trial, statement of accused u/s 313 of Cr.P.C. was recorded. The accused denied all the incriminating circumstances appeared in the prosecution evidence. Accused has not adduced defence evidence, but got marked three documents as Ex.D1 to 3 on confrontation with P.w.1. On hearing the parties, learned Magistrate recorded the finding that the accused has committed offence u/s 138 of Negotiable Instruments Act and passed the sentenced against the accused as aforesaid.
6. Being aggrieved by the judgment and sentence passed, the accused preferred the appeal inter-alia contending that the impugned judgment is contrary to the facts and the law applicable to the facts of the case and hence not sustainable either on facts or in law. The lower court has failed to notice the Crl. A. No. 442/2014 6 GPA dated 10.12.2009 i.e. Ex.P1 said to have been executed by the original complainant Vandhana in favour of K.Ramareddy has not been proved in accordance with law. The lower court has failed to notice that the original complainant Smt. Vandhana is an NRI of USA and no document or material has been placed before the court that Smt. Vandhana was in Bangalore in the month of October to execute GPA. The lower court has failed to notice that neither the attesting witness nor the notary have been examined to prove the execution of GPA. The lower court has failed to notice that no sale agreement has taken place between the original complainant Vandhana and accused. The lower court has failed to notice that the evidence available on record would clearly establish the fact that the transaction is in between GPA holder of the complainant and accused and not in between the complainant and the accused. The lower court has committed an error in arriving at the conclusion that a sum of Rs.40 lakhs paid to Bheemeswar Rao for and on behalf of the accused. The lower court has not appreciated the facts in proper Crl. A. No. 442/2014 7 perspective and arrived at wrong conclusion and the lower court has wrongly arrived at conclusion that the sale deeds at Ex.D1 to D3 would show that there is a transaction in between the complainant and the accused. The lower court ought to have seen that the debt is not shown or proved and as such no presumption can be drawn about the issuance of cheques towards the discharge of legally recoverable debt. The lower court has failed to notice and appreciate the admission made by P.w.1 to the effect that the legal notice has been issued 3 to 5 months after having knowledge about the dishonour of the cheques. Hence, prayed for setting aside the judgment passed by the lower court.
7. After filing of this appeal, notice was served on the respondent/complainant who put in appearance along with learned counsel. Records of lower court are secured.
8. Heard the arguments of learned counsel for appellant and respondent.
Crl. A. No. 442/2014 8
9. In the light of the contentions taken up in the memorandum of appeal, the points that arise for my determination are as follows;
1) Whether the court below has
committed any error of law and facts in
convicting the appellant/accused for the
offence u/sec.138 of Negotiable
Instruments Act?
2) What order?
10. My findings on the above points are as follows:
Point No.1 : In the negative
Point No.2 : As per final order
REASONS
11. Point Nos.1 : Complainant Smt. Vandana Nerella is NRI in USA and accused is the GPA holder of N.Sunil has induced the complainant and his GPA to accept the offer of sale of land measuring 23.33 acres situated at Kenchanahalli village, Nelamangala taluk, Bengaluru. After negotiation, a sale agreement was drawn on 22.3.2007 and executed by GPA Crl. A. No. 442/2014 9 holder of the complainant and accused for total sale consideration of Rs.3,57,37,500/-. Complainant has paid Rs.40 lakhs and the GPA holder of the complainant K.Rama Reddy paid Rs.3,17,37,500/- to the accused. The said amount was paid by cash and cheque to the accused as also to the persons suggested by the accused mentioned in the complaint. The accused did not complete the sale transaction and he had stealthily negotiated for the sale of land in favour of Kaviraj Urs and his wife Bharathi Urs of Lakshmi Minerals, Bengaluru. As such, the complainant gave up his claim in the registration of the sale deed and demanded the money paid by the complainant to the accused. The accused paid Rs.1,40,00,000/- by way of RTGS from SBI Ananthpuram branch, A.P. to the complainant's GPA holder's account No. 5336 in Canara Bank, SME Peenya, Bengaluru and accused issued 3 cheques bearing No.838808 dated 3.12.2008, No.838810 dated 31.1.2009 and No.838813 dated 15.2.2009 for Rupees ten lakhs each drawn on SBI, Ananthapuram Branch, A.P. On 27.6.2009, the complainant presented the Crl. A. No. 442/2014 10 cheques to her banker, SBI, Rajajinagar branch, Bengaluru. The cheques were returned unpaid as funds insufficient on 12.11.2009 and the complainant received the endorsement on 19.11.2009. The complainant got issued legal notice to the accused on 11.12.2009 by RPAD and certificate of posting and the notice was served to the accused on 20.12.2009 and the complainant sent reply and asked the complainant to send copies of documents and accordingly, the complainant submitted copies of documents, but the accused has not complied the demand made in the notice. Hence, the complainant presented the complaint alleging the offence u/s 138 of Negotiable Instruments Act.
12. In order to prove the case of the complainant, the GPA holder of complainant himself examined as P.w.1. The GPA holder of complainant has filed his affidavit in lieu of his chief examination and in his affidavit, he has stated that the complainant entered into an agreement of sale with the accused for a sale consideration of Rs.3,57,37,500/- and the Crl. A. No. 442/2014 11 complainant paid Rs.40 lakhs to the accused and he has paid Rs.3,17,37,500/- to the accused as well as to the persons whom suggested by the accused. He has further stated that the accused sold the lands mentioned in the complaint to one Kaviraj Urs and his wife Bharathi Urs of Lakshmi Minerals, Bengaluru and hence, he was constrained to demand the accused to repay the amount and at that time, the accused repaid Rs.1,40,00,000/- by way of RTGS of SBI Ananthapuram branch, A.P. to the personal account of GPA holder of the complainant and issued 3 cheques for Rs.10 lakhs each in favour of complainant and when the complainant presented the said cheques, the same were returned unpaid as " insufficient funds" in the bank account of the accused.
13. In support of the case of the complainant, the complainant has produced the GPA executed by the complainant Vandhana to Ramareddy. Ex.P2 to 4 are the three cheques said to have been issued by the accused in favour of the complainant. Ex.P5, 7 and 9 are the return memos issued Crl. A. No. 442/2014 12 by SBI, Ananthapuram branch, A.P. dated 7.7.2009. Ex.P6, 8, 10 and 11 are the memos issued by SBI, Rajajinagar branch, Bengaluru stating that the cheques are returned as " insufficient funds" in the bank account of the accused. Ex.P12 is the copy of legal notice issued by the complainant to the accused. Ex.P13 is the postal receipt. Ex.P14 is the certificate of posting. Ex.P15 is the account extract issued by ICICI bank pertaining to complainant Vandhana Nerella. As per this account statement, the complainant paid Rs.40 lakhs to one Bheemeswara Rao on 31.3.2007. Ex.P16 is the account statement of Canara Bank, Peenya branch pertaining to GPA holder of complainant. As per this statement, Rs.1,40,00,000/- was transferred to the bank account of GPA holder of complainant through RTGS by accused on 15.10.2008. Ex.P17 is the pass book of GPA holder of complainant Ramareddy. Ex.P18 is the income tax statement of GPA holder of complainant. Ex.P19 is also the income tax statement of GPA holder of complainant. The accused has not stepped into the witness box, but got marked 3 sale deeds through confrontation of P.w.1 marked as Ex.D1 to 3. These Crl. A. No. 442/2014 13 sale deeds were executed by the accused as P.A. holder of N.Sunil in favour of Kaviraj Urs and Bharathi Urs. The GPA holder of the complainant has signed these three sale deeds as consenting witness.
14. Let me go through the cross-examination of P.w.1. During the course of cross-examination, P.w.1 has deposed that the complainant is residing in USA since 15 to 18 years. He cannot recollect as to when the complainant executed GPA. He has further deposed that the complainant executed GPA in his favour to conduct cheque bounce case. He has further deposed that the sale agreement was entered into between him and accused in the month of March 2007. He has further deposed that the complainant was not a party to the said agreement and he admits that there was no sale transaction between the complainant and accused. He has further deposed that he has paid Rs.3,57,37,500/- to the accused and he has further admitted that the complainant has not signed the agreement of sale. He has further deposed that he had Crl. A. No. 442/2014 14 enquired with the bank after 3-4 days of presenting the cheque as to whether the cheque has been honoured or not. He has further stated that there was no sufficient amount in the bank account of the accused to honour the cheques. He has further deposed that he issued notice after 3-5 months of dishonour of cheques. He has denied the suggestion that though the cheque was bounced on 7.7.2009, he obtained the endorsement from bank on 12.11.2009 and produced in this case. During the course of cross-examination, a suggestion was put to P.w.1 that Ex.P2 to 4 cheques were issued to the complainant Vandhana for the purpose of income tax. Another suggestion was put to P.w.1 that Ex.P2 to 4 cheques were issued to him when he signed the sale deeds as consenting witness. Another suggestion was put to P.w.1 that he has signed the sale deeds as consenting witness. So all these suggestions clearly establish that the issuance of cheques in favour of GPA holder of complainant on behalf of the complainant is admitted by the accused. The only question before this court is whether the cheques were issued for legally recoverable debt. The Crl. A. No. 442/2014 15 documents produced by the complainant clearly establishes that there was sale transaction between the complainant and the accused and the accused transferred Rs.1,40,00,000/- through RTGS to the account of the GPA holder of complainant. If really there was no transaction between the complainant and accused, question of transferring Rs.1,40,00,000/- does not arise. Further GPA holder of the complainant has signed Ex.D1 to 3 sale deeds as consenting witness. It is the case of the accused that the GPA holder of complainant signed the sale deeds as consenting witness admitting that he is not due to pay any amount to the accused. But there is no document produced by the accused in this regard. Further the complainant issued notice to the accused on 11.12.2009. The accused sent a reply, requesting the complainant to furnish the documents. Even though the complainant furnished the documents, the accused has not complied with legal notice. Accused has not stepped into the witness box and rebutted the presumption that the cheques were issued for legally recoverable debt. In the entire cross- Crl. A. No. 442/2014 16 examination, the accused has not denied the issuance of cheques Ex.P2 to 4 in favour of the complainant.
15. The learned counsel for the complainant has argued that the accused has not discharged the burden of rebutting the presumption u/s 118 and 139 of N.I.Act. In support of his argument, he has relied upon the decisions reported in AIR 2014 SC 630 (A.C.Narayanan Vs. State of Maharashtra), AIR 2010 SC 1898 (Rangappa Vs. Mohan), 2001 AIR SCW 3861 (Hiten P.Dalal Vs. Bratindranath Banerjee), ILR 2008 Kar 3922 (Suresh Kallappa Makavi Vs Madan Bindurao Desai and Another), (2006) 3 Supreme Court Cases (Cri) 30 (M.S.Narayana Menon @ Mani Vs.State of Kerala and another), 2004 Cri.L.J. 3177( L. Mohan Vs. V.Mohan Naidu)
16. The learned counsel for the appellant has relied upon a decision reported in AIR 2014 SC 660 (Kamlesh Kumar Vs.State of Bihar and another). Relying on this decision, he has argued that the non-issuance of demand notice within time prescribed would render complaint as not maintainable. Crl. A. No. 442/2014 17
17. Now let me go through the grounds urged by the complainant in the memorandum of appeal. One of the grounds urged by the accused is that the complainant has not proved the execution of GPA. The GPA holder of complainant produced the original GPA executed by the complainant. No doubt the complainant has not examined the attested witness of GPA and notary. Question of examining attested witness of GPA and notary does not arise because it is for the complainant to challenge the GPA if she has not executed it and not for the accused. Accused has issued cheques in favour of the complainant and the complainant executed Power of Attorney in favour of his attorney and Attorney gave evidence on behalf of the complainant. Therefore, accused cannot challenge the execution of GPA. The accused has contended that P.w.1 has admitted that there was no transaction between complainant and accused and therefore, question of issuing cheques in favour of complainant does not arise. P.w.1 has deposed that there was no transaction between the complainant and accused because agreement of sale was Crl. A. No. 442/2014 18 executed by GPA holder of the complainant and not complainant. In this context, the complainant might have said that there was no transaction between the complainant and accused. Therefore, the accused cannot take advantage of this evidence given by P.w.1. Merely because the GPA holder signed the sale deeds Ex.D1 to D3, it cannot be said that the accused is not due to pay any amount to the complainant. On the other hand, Ex.D1 to 3 establishes the case of the complainant that there was sale transaction between complainant and accused. In the meantime, the accused transferred Rs.1,40,00,000/- through RTGS to the account of GPA holder of complainant. If there was no transaction between the complainant and accused, question of transferring so much amount does not arise and the accused has not stepped into the witness box to rebut the presumption available in favour of the complainant. He has not issued any reply to the legal notice issued by the GPA holder of complainant. P.w.1 has deposed that cheques Ex.P2 to 4 have been presented to the account of the complainant on the dates of cheques and Crl. A. No. 442/2014 19 after 3-4 days of presentation of cheques for collection, he has enquired as to whether the cheques have been encashed or not and P.w.1 came to know about the dishonour within 3-4 days after cheques were presented for encashment. But in this case, the complainant produced memo issued by the bank marked as Ex.P11. This memo is dated 12.11.2009. Unless the complainant receives this memo, he cannot issue legal notice to the accused. He has to verify the reasons for dishonour of cheque and then only, he has to issue notice to the accused. After receipt of Ex.P11 from the bank, the complainant issued legal notice. Merely because P.w.1 had knowledge about the dishonour, it cannot be said that the notice was not issued within the stipulated period. The accused has not examined the Manager of SBI Rajajinagar to prove that P.w.1 had knowledge about the dishonour of cheque earlier to the date of issuance of Ex.P11. Therefore, only on this ground, this court cannot come to the conclusion that the complaint is not proper and not maintainable for non issuance of notice within the stipulated period and therefore, the complainant has proved that the Crl. A. No. 442/2014 20 accused issued cheques for Rs.30 lakhs to the complainant for discharge of repayment of sale consideration amount and when the complainant presented the said cheques, same were returned unpaid as "insufficient funds" in the bank account of the accused. Accused neither issued reply notice nor explained the circumstances in which he issued cheques to the complainant nor stepped into the witness box to prove that the cheques were issued not for discharge of legally recoverable debt and they were issued for the purpose of income tax and therefore, the complainant has proved that the accused has committed the offence punishable u/s 138 of Negotiable Instruments Act and the lower court after appreciating the oral as well as documentary evidence rightly come to the conclusion that the accused has committed an offence punishable u/s 138 of Negotiable Instruments Act. Accused has not made out grounds to set aside the judgment passed by the lower court and I find no grounds to interfere with the findings recorded by the lower court. Accordingly, I answer point no.1 in the negative.
Crl. A. No. 442/2014 21
18. Point no.2: In view of my findings on point No.1, I proceed to pass the following:
ORDER The appeal filed u/sec.374 (3) of Cr.P.C. by the appellant is hereby dismissed.
The judgment passed by the 21st ACMM, Bengaluru in C.C.No.43620/2010 dated 9.4.2014 convicting the appellant/ accused for the offence punishable u/s 138 of Negotiable Instruments Act and sentencing him to pay a fine of Rs.30.50 lakhs is hereby confirmed.
Send a copy of this judgment to the lower court along with L.C.R. (Dictated to the Judgment Writer, transcribed and typed by her, corrected and then pronounced by me in the open court on this the 1st day of December 2015) (B.Jayantha Kumar) LX Addl.City Civil & Sessions Judge, Bengaluru.