Bangalore District Court
Mr.Ajay.Y.J vs Mrs. G.S.Bhagya on 12 May, 2023
KABC030706502019
IN THE COURT OF XX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY
PRESENT: BHOLA PANDIT,
B.Com.,LL.M.,
XX ADDL. C.M.M.
Bengaluru.
Dated this the 12th day of May 2023
C.C.No.22813/2019
Complainant : Mr.Ajay.Y.J.
S/o Mr.Yellappa,
Age 29 years,
R/at.No.284, 6th Cross,
Bagalagunte, Nagasandra Post,
Bengaluru- 560 073.
{ By Mr.L.Mallesh - Advocate }
Vs.
Accused : Mrs. G.S.Bhagya,
W/o Mr.S.M.Lokesh,
Age 40 years,
R/at.No.850, "Lokesh Building"
6th Cross, Bagalagunte,
Nagasandra Post,
Bengaluru- 560 073.
{ By Sri.Surendra.Y.S. - Advocate }
2 C.C.22813/2019
Offence complained : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final Order : Accused is Acquitted
Date of Order : 12-05-2023
JUDGMENT
The present complaint is filed under section 2(d) read with section 200 of code of criminal procedure against the accused seeking to punish her for the offence punishable under section 138 of the Negotiable Instruments Act ( in short referred as "N.I. Act").
02. The facts which leads to present complaint are under;
It is averred in the complaint that, the accused is known to the complainant for the last ten years. On 05.12.2018, the accused had availed hand loan of Rs.15,00,000/- by way of cash for completing the 3 C.C.22813/2019 construction of her house and also to discharge her other family necessities and agreed to repay the said amount within a period of three months. After expiry of the said period, accused did not keep up her promise. On consistent demands and requests made by the complainant, towards her discharge of his liability, the accused has issued a cheque bearing No.120822 dated 02.03.2019 for a sum of Rs.15,00,000/- drawn on Karnataka Bank, Hesaraghatta Main Road Branch, Bengaluru in favour of the complainant. The complainant has presented the said cheque for encashment through his banker i.e., Canara bank, Bagalagunte Branch, Bengaluru, but it returned unpaid with banker's endorsement dated 12.03.2019 as " Cheque is not a C.T.S. Cheque". On18.03.2019, demand notice was issued to the accused by RPAD. The demand notice issued by RPAD has been duly served on accused on 21.03.2019. In spite of service of legal notice, the accused neither has paid the cheque amount nor has given any reply. On these grounds, it is sought to convict the accused 4 C.C.22813/2019 for the offence punishable under section 138 of NI Act and grant compensation as per section 357 of Code of Criminal Procedure.
03. On presentation of complaint, this court has verified the averments of complaint along with records and thereby had taken cognizance for the offence punishable under section 138 of NI Act. Thereby, as per the verdict of the Hon'ble Apex court reported in AIR 2014 SC 1983 in the case of Indian Bank Association and others V/s Union of India and others, the sworn statement of the complainant has been recorded as PW.1 and got exhibited Six documents at Ex.P.01 to 06. Having been made out the prima-facie case, the complaint has been registered in Register No. III and issued process against the accused.
04. In response to the summons, the accused put her appearance before the court through her counsel and filed bail application under section 436 of Code of Criminal Procedure, the accused has been enlarged on bail. The 5 C.C.22813/2019 substance of accusation has been recorded and read over to the accused, he pleaded not guilty and intends to put forth her defense. On filing application by the complainant under section 145(1) of NI Act, sworn statement of the complainant has been treated as examination in chief. Similarly, on filing application under section 145(2) of NI Act, the accused has been permitted to cross examine PW.1. On completion of the trial of the complainant's side, the statement of accused under section 313 of Code of Criminal Procedure has been recorded and read over to the accused, the incriminating material found in the trial of the case of the complainant. The accused has denied the same in toto and gave explanation that, complainant is stranger to the accused and has filed false case against her. The accused also wants to lead her defense evidence. In order to disprove the case of the complainant, the accused did not enter into the witness box and the defense evidence taken as nil.
6 C.C.22813/2019
05. Complainant side oral agreement taken as not advanced, giving liberty to file written argument. Heard the oral and written argument of Learned counsel for the accused.
In support of his oral and written arguments, the Learned counsel for the accused relied the following verdicts;
1. 2019(5) Supreme Court Case 418
2. AIR 2023 Supreme Court 471
3. 2015(1) Supreme Court Cases 99 I have carefully and meticulously gone through the above relied precedents.
06. The following points that arise for my consideration are as under;
POINTS
1. Does the complainant proves beyond reasonable doubts that, the accused has issued a cheque bearing No.120822 dated 02.03.2019 for a sum of Rs.15,00,000/- towards the discharge of his lawful liability of the 7 C.C.22813/2019 complainant and when the said cheque was presented for encashment, it was returned unpaid due to " Cheque is not a C.T.S. Cheque" in the account of the drawer as per banker's memo and inspite of issuance of demand notice , the accused has failed to pay the cheque amount, thereby has committed the offence punishable under section 138 of NI Act?
2. What Order or sentence ?
07. My findings to the above points is as follows;
1. Point No.1: In the negative
2. Point No.2: As per final order for the following;
REASONS
08. POINT No.1: It is the specific case of the complainant that, the accused had borrowed hand loan of Rs.15,00,000/- in cash from the complainant for completing the construction of her house and also to discharge her other family necessities and towards discharge of the said hand loan amount, the accused has issued the disputed cheque and when the said cheque was presented for encashment, it returned unpaid due to 8 C.C.22813/2019 "Cheque is not a C.T.S. Cheque" in the account of the drawer and inspite of receipt of demand notice, the accused has failed to make the payment of the cheque amount.
09. To substantiate and establish this fact before the court beyond reasonable doubts as per the verdict of the Hon'ble Apex court in the case of Indian Bank Association and others V/s Union of India and others , the sworn statement of the complainant has been treated as affidavit evidence. In his affidavit evidence, PW.1 has replicated the averments of the complainant. To corroborate the evidence of PW.1, the complainant has placed on record in all six documents as per Ex.P.01 to 06. Ex.P.1 is the disputed cheque dated 02.03.2019, Ex.P.1 (a) is the signature of accused, Ex.P.2 is the bank challan, Ex.P.3 is the banker's memo dated 12.03.2019, which shows the reasons for the return of the cheque at Ex.P.1 for unpaid is as ""Cheque is not a C.T.S. Cheque" , Ex.P.4 is the legal notice dated 18.03.2019 demanding for payment of cheque amount by replicating the averments 9 C.C.22813/2019 of complaint and which was duly served to the accused on 21.03.2019. Ex.P.5 is the the postal receipt about sending legal notice at Ex.P.4, Ex.P.6 is the internet copy of the postal tracking report and Ex.P.6(a) is the certificate in compliance of section 65-B of the Indian Evidence Act. PW.1 has been substantially cross examined by the counsel of accused.
10. To disprove the case of the complainant and also to rebut the mandatory presumptions which could be drawn under section 139 of NI Act, the accused did not entered in the witness box, so also not produced any documentary evidence.
11. The Learned Prosecuting Counsel Complainant not advanced oral argument, so also not filed written argument inspite of giving sufficient time.
12. Per contra, the Learned Defense Counsel vehemently argued that, PW.1 has admitted in his cross 10 C.C.22813/2019 examination about he is not produced counter file for having presented the cheque for encashment to his bank account. It is further argued that, Ex.P.2, the return memo neither bears the signature of the bank authority nor the seal, thus the said document shall not be considered as documentary evidence. It is further argued that, the complainant not adduced the evidence of any bank authority in support of the document at Ex.P.2. It is further contended that, the notice sent to the address of accused, did not served upon her as such, since 2017 she has not been residing with her husband due to decree of dissolution of her marriage and service of notice as per Ex.P.6 is not proved. Accordingly, the complainant has failed to establish the service of legal notice. It is contended that, as per his own case of complainant and as per Ex.P.2, the cheque returned as "Cheque is not a CTS cheque", but in the demand notice at Ex.P.4, the reason mentioned for the return of cheque as "Funds Insufficient", this fact itself very much disprove the case of the complainant. Rest of the written argument is replication of case of the 11 C.C.22813/2019 complainant. Accordingly, it is sought to dismiss the complaint, thereby to acquit the accused. In support of his written argument, the Learned Defense Counsel has relied the judgments as listed above.
13. Before to appreciate the oral and documentary evidences produced by the complainant and also to consider the written argument filed the Learned Defense Counsel, it is necessary to find out whether the present complaint has been filed in consonance with the provisions of section 138 of NI Act or not?.
14. On perusal of the cheque at Ex.P.1, deposit slip at Ex.P.2, alleged return memo at Ex.P.3, demand notice at Ex.P.4 and so also the postal records at Ex.P. 5 to 6(a) it appears that, the cheque produced at Ex.P.1 bears the date as 02.03.2019. As per the deposit slip produced at Ex.P.2, the cheque at Ex.P.1 has been presented to the bank on the same day i.e., on 02.03.2019. The accused has very much disputed this document at Ex.P.2 during the 12 C.C.22813/2019 argument as well as during the cross examination of PW.1. Even PW.1 himself admitted in his cross examination that, Ex.P.2 do not bears any seal. This deposit slip produced at Ex.P.2 neither bears the signature of bank authority nor the seal of the said bank. It is further observed in Ex.P.2 that, as per the procedure of the bank, once the deposit slip is submitted with the bank, the bank authorities will put the serial number, its seal and signature of the officer who passed this deposit slip and thereafter the left side portion of the copy of deposit slip would be issued to the customer who deposit this slip. But, looking to Ex.P.2, the customer copy along with copy of the bank are found in Ex.P.2 itself and it neither bears the signature of bank authority nor its seal. That apart, looking to the back side entry made on Ex.P.1 - cheque where in the Bank Manager has put his signature and mentioned the date as 27.03.2019. Which means, as per the date shown in deposit slip in Ex.P.2, the cheque at Ex.P.1 was not presented with the bank on 02.03.2019. Therefore, the deposit slip produced at Ex.P.2 seems to be created and 13 C.C.22813/2019 concocted just to file the present complaint and Ex.P.2 shall not be reliable even though it has been marked. Further, the complainant has produced Ex.P.3 treating the same as bank return memo, but on careful perusal of the same, it can be clearly seen that, which bank authority this Ex.P.2 has been issued is not shown. Further, no date, month or year is found on Ex.P.3. That apart, Ex.P.3 do not reflect cheque bearing No.120822 dated 02.03.2019 for Rs.15,00,000/-. This Ex.P.3 simply found as common unsigned receipt and as per this receipt, HO No.335/2018 DT 29.06.2018 clearance of NON CTS cheque has been discontinued from December 21, 2018. It is not made known of this receipt whether it has been issued by the Canara Bank Authority or whether this receipt has been in respect of Ex.P.1 is all about silent in this receipt. Therefore, when this receipt do not discloses the cheque number, date, amount and drawer of the cheque, this Ex.P.3 would not be treated and considered as bank return memo issued by the Canara Bank authority as pleaded in the complaint. Therefore, this Ex.P.3 also cannot be 14 C.C.22813/2019 reliable as evidence in support of the case of the complainant, even though it has been marked as Ex.P.3. On further scrutiny of demand notice produced at Ex.P.4, as rightly contended by the Learned Defense Counsel that, in the demand notice at Ex.P.4, the reason for dishonor of Ex.P.1 cheque has been mentioned as "Funds Insufficient" as per return memo dated 12.03.2019, but no such return memo dated 12.03.2019 is produced before the court by the complainant. That apart, in the alleged return memo produced at Ex.P.3, it is only mentioned that, the clearance of non CTS cheque has been discontinued. Even assuming for the sake of discussion that, the cheque at Ex.P.1 has been returned as NON CTS cheque, even the same reason ought to have been shown in the demand notice at Ex.P.4 instead to showing the reason for the return of cheque as "Funds Insufficient" and contrary to provisions of section 138 of NI Act. The demand notice a Ex.P.4 containing such facts and it do not full fill the requirements of section 138 of NI Act. 15 C.C.22813/2019
15. Further, the complainant has not produced the acknowledgement copy before the court in order to establish that, the demand notice sent under Ex.P.4 was personally served upon the accused. The complainant has produced internet copy of postal track consignment report along with certificate under section 65B of Evidence Act. But, since the accused has denied the service of demand notice, the complainant ought to have produced the acknowledgement slip. Further, there is no pleadings about the production of secondary evidence, under such circumstances, I am of the considered opinion that, there is no proper and personal service of demand notice to the accused.
16. In order to attract the penal provision of section 138 of NI Act, the drawing of cheque from the account of drawer and issuance of the same for some consideration towards the payment of fully or partly the legally recoverable debt or liability of other person and that the return of the said cheque unpaid by the bank either because of the amount 16 C.C.22813/2019 of money standing to the credit of that account is in sufficient to honour the cheque or that, it exceeds the amount arranged to be paid to that account. Here, in the case on hand, as per the own pleadings of the complainant and also as per his own document at Ex.P.2, when the cheque at Ex.P.1 is Non CTS cheque, as per the circular of the RBI, all the non CTS cheques have been withdrawn from their circulation from 31 st March 2013 and it has been directed to all the banker's and its customers for the submission of non CTS cheques and getting exchange of CTS-2010 cheques. CTS means 'CHEQUE TRUNCATION SYSTEM', which means transfer of money electronically which is hassle a free process on the eve of rapid increase in respect of cheque transactions. The cheque book which do not contain a CTS-2010 cheque leaf are known as NON CTS cheque books. As per Ex.P.2 and his own pleadings of complainant, when the cheque at Ex.P.1 was returned as a NON CTS cheque, which means the cheque is invalid cheque which cannot be presented to the bank for encashment. Here, in the case on hand, as per the cross 17 C.C.22813/2019 examination made to PW.1 stating that, the complainant has misused one of the old cheque of the accused and thereby has filed the present complaint against her. Though, this suggestion has been denied by PW.1, but looking to the cheque at Ex.P.1 and Ex.P.3 it appears that, the non CTS cheque of the accused which might have issued long ago, has been misused by the complainant and presented with the bank. When the non CTS cheque itself has been declared as invalid by the RBI, under such circumstances, I am of the considered opinion that, the reasons shown in Ex.P.3 for the alleged return of cheque and the Ex.P.1 as unpaid do not attract the offence under section 138 of NI Act. Therefore, I am of the considered opinion that, the present complaint has been filed without observing the requirements of section 138 of NI Act.
17. The Learned Defense Counsel has relied the judgments of Hon'ble Apex Court reported in 2015(1) Supreme Court Cases 99, in the case of 18 C.C.22813/2019 K.Subramaniyan Vs. Damodara Naidu, wherein it is held that;
" When the complainant cannot prove source of income from which the alleged loan was issued to accused, the presumption in favour of holder of cheque stood rebutted and acquittal passed by the trial court has been restored."
The Learned Defense Counsel also relied the recent judgment of the Hon'ble Apex Court reported in AIR 2023 Supreme Court 471, in the case of Rajaram Sriramulu Naidu (Since Deceased) through L.Rs. Vs. Maruthachalam (Since Deceased) Through L.Rs, wherein the Hon'ble Apex Court held that,;
" When the complainant has not disclosed in the IT returns, the amount lent to the accused and not declared income. Further held that, when the complainant also failed to establish his agriculture income, under such circumstances, the defense put forth by the accused to be possible defense which satisfied the standard of preponderance of probabilities."19 C.C.22813/2019
The Learned Defense Counsel also relied the recent judgment of the Hon'ble Apex Court reported in (2019) 5 Supreme Court Cases 418 in the case of BASALINGAPPA Vs. MUDIBASAPPA, wherein the Hon'ble Apex Court held that,;
" As to how the legal presumption shall be drawn and how the said presumptions can be rebutted and what is the standard of proof required by the complainant to establish his case and also what is the standard of proof required by the accused to establish his defense."
In the light of the ratio in the above relied judgments, now it is well settled law that, once the accused admits issuance of cheque and signature thereon, the legal presumption shall goes in favour of the complainant and it is for the accused to rebut the statutory presumption under section 118(a) & 139 of NI Act. In the case on hand, though the accused did not enter into the witness box to adduce his side evidence , but it is well settled law that, he can rebut the legal presumption by using material evidence culled out during the cross examination of PW.1. In the case on hand, it is the defense of the accused 20 C.C.22813/2019 that, there was a chit transaction between the mother of complainant and accused and by misusing the cheque of accused with the mother of complainant, the complainant has misused the cheque of the accused and has filed this present complaint. In order to prove this defense, the accused has cross examined PW.1 at length and during cross examination of PW.1 in para No.1 of page No.10 PW.1 has clearly admitted that, there was a chit transaction between mother of complainant and the accused. For the sake of discussion, the relevant portion of the cross examination of the PW.1, is reproduced as under;
"ನಮಮ ತಯವತತತ ಆರರರಪ ಇವರ ಮಧಧ ಚರಟ ಹಣದ ವಧವಹರ ಇತತತ ಎಎದರ ಸರ."
Though, during further cross examination of PW.1, he has denied about the suggestion made to him that, having the custody of cheques of accused with his mother, the complainant had misused the same and to benefit of his mother, has filed the present complaint. On the other hand, PW.1 has stated before the court that, he has monthly income of Rs.40,000/- and also paying 21 C.C.22813/2019 income tax, but to prove and substantiate his income, he has not produced his salary certificate, even he further admitted that, he has not produced any documents before the court to show that, in the month of December 2018, he had a an amount of Rs.15,00,000/- with him. He further gave explanation stating that, he used to grow ragi crop in his village. But, to substantiate that fact also, the complainant not produced before the court any records of his landed property. He further admitted that, he has not obtained any document from the accused as a security for repayment of the alleged hand loan amount. Undoubtedly, an amount of Rs.15,00,000/- is very huge and no one would be expected to advance such a huge amount without obtaining any security document. Apart from that, as per the say of complainant, it gives very surprise and unbelievable facts that, after obtaining the alleged hand loan amount, the accused has agreed to repay the same within three months. When the complainant has totally failed to produce before the court any records of his income, his IT returns and also his bank 22 C.C.22813/2019 account statement to show that, on the alleged dates of lending the money, he had an amount of Rs.15,00,000/- with him, under such circumstances, the defense put forth by the accused appears to be probable and believable, hence by his own evidence of PW.1, I am of the considered opinion that, the accused has elicited the material evidence from the mouth of PW.1 that itself stoods rebutted the legal presumption which favours the complainant. The judgments relied by the defense counsel are aptly applicable to the case on hand. On the other hand, the complaint has totally failed to prove before the court beyond all reasonable doubts that he has sufficient money of Rs.15,00,000/- to lend the same to the accused, further also failed to establish his lending disputed hand loan of Rs.15,00,000/- to the accused on 15.12.2018. Hence, I answered Point No.1 in the Negative.
18. POINT NO.2: In view of the above findings, this court proceed to pass the following;
23 C.C.22813/2019
O R DE R
Acting under Section 255(1) of code
of criminal procedure, the accused is
acquitted for the offence punishable under Section 138 of Negotiable Instruments Act.
The bail bond of accused stands canceled subject to appeal period.
{Dictated to the stenographer, transcribed and computerized by her, revised corrected and then pronounced in the open court on this 12th day of May 2023}.
(BHOLA PANDIT) XX ACMM, Bengaluru.
ANNEXURE List of witnesses examined on behalf of complainant:
P.W.1 Y.J.Ajay 24 C.C.22813/2019 List of documents produced on behalf of complainant:
Ex.P.1 Cheque
Ex.P. 1(a) Signature of the accused
Ex.P. 2 Challan
Ex.P.3 Bank endorsement
Ex.P. 4 Copy of the legal notice
Ex.P. 5 Postal receipt
Ex.P. 6 Internet copy of the Postal
tracking report.
Ex.P.6(a) Certificate in compliance of
section 65-B of the Indian
Evidence Act.
List of witnesses examined on behalf of accused:
-Nil-
List of documents produced on behalf of accused:
-Nil-
PANDIT Digitally signed by PANDIT S BHOLA S BHOLA Date: 2023.05.12 18:03:51 +0530 XX A.C.M.M., Bengaluru.