Bangalore District Court
Sri.R.N.Nanjegowda vs Sri.Sabu on 13 February, 2017
IN THE COURT OF THE LVIII ADDL. CHIEF
METROPOLITIAN MAGISTRATE, MAYO HALL UNIT,
BENGALURU
Dated this the 13th day of February 2017
PRESENT:
Sri. Nataraj.S. B.A.L, LLB.,
LVIII Addl. Chief Metropolitan Magistrate
Bengaluru.
CASE NO C.C.No.52120/2014
COMPLAINANT Sri.R.N.Nanjegowda,
Aged about 35 years,
S/o Late G.N.Ramaiah,
Residing at No.Doddagubbi Village & Post,
Bidrahalli Hobli,
Bangalore East Taluk,
Bangalore-562 149
ACCUSED Sri.Sabu, T.Varghese
Aged about 40 years,
S/o Late T.Varghese,
No.418, 7th 'A' Main, 1st Block,
HRBR Layout, Kalyan Nagar,
Bangalore-560 043.
OFFENCE U/s 138 of Negotiable Instruments Act
PLEA OF THE Pleaded not guilty
ACCUSED
FINAL ORDER Accused is convicted
(NATARAJ.S.)
LVIII ADDL.C.M.M.BENGALURU
2 CC.No.52120/2014
JUDGMENT
The complainant filed a complaint Under Section 200 of Cr.P.C for the offence punishable Under Section 138 of Negotiable Instrument Act.
2. The case of the complainant is that:
The accused is a business friend. The complainant had paid amount to the accused for the formation of layout. After completion of layout, the accused liable to pay total sum of Rs.2,75,00,000/- to the complainant, towards the investment and profits and said project. Towards dues, the accused had made part payment and had agreed to pay sum of Rs.97,50,000/- as full settlement and entered into agreement of settlement on 14.9.2013. Towards discharge of debt the accused had issued 6 cheques totally amounting to Rs.81,00,000/- as per agreement of settlement. The complainant has presented the cheque bearing No.014708 dated 25.10.2013 for Rs.10,00,000/- drawn on Corporation Bank, HRBR Layout, Bangalore. The said cheque presented on 25.10.2013 through his banker Federal Bank, Banaswadi Branch, Bangalore, the said cheque was returned with Bank endorsement "funds insufficient' dated 26.10.2013. The complainant issued legal notice on 8.11.2013 demanding the 3 CC.No.52120/2014 accused to pay the cheque amount. The notice sent through RPAD to the accused residence the said notice served on 9.11.2013. 15 days time was granted to make payment, in spite of the same accused has not paid cheque amount of Rs.10,00,000/- accordingly within one month after expiry of 15 days from receipt of notice, the complaint has been filed for the offence punishable under section 138 of Negotiable Instrument Act.
3. The Cognizance was taken, summons was issued to the accused. He has appeared through his counsel. The copy of the complaint was furnished to him. The accusation was read over and explained to him, he pleaded not guilty and claimed to be tried.
4. The complainant in prove of his case examined himself as P.W.1 in his support Ex.P.1 to P.6 documents are marked.
5. The statement of accused Under section 313 Cr.P.C. has been recorded. The accused denied the incriminating evidence appeared against him and he had also filed further statement U/s 313 Cr.P.C. The accused not adduced evidence. 4 CC.No.52120/2014
6. The learned counsel for complainant filed memo with list of citations on 21.1.2017. The accused counsel also filed memo with 10 citations on 16.1.2017.
7. Heard both sides.
8. On consideration of contention of both sides and material on records, the following points that arise for consideration are as follows:
1. Whether accused rebuts the presumption under section 118, 139 of Negotiable Instrument Act?
2. Whether the complainant prove that accused has committed an offence Punishable Under Section 138 of NI Act?
3. What order?
9. My answers to the above points are as follows:
Point No.1: In the Negative Point No.2: In the Affirmative Point No.3: As per final order For the following;
REASONS:
10. Point No.1 & 2 :- Both points interconnected to avoid repetitions of fact both points are taken together. 5 CC.No.52120/2014
11. The complainant in his complaint and oral evidence alleged that he and accused are known to each other. They are the business friends. The complainant had paid amounts to accused for the formation of layout. After completion of layout the accused was liable to pay a sum of Rs.2,75,00,000/- towards the investment and profits and the said project. There was a memorandum of settlement entered into between them on 14.9.2013 and issued six cheques. Ex.P.1 cheque was presented amounting to Rs.10,00,000/- . The same was returned as "funds insufficient". The notice were issued to the accused he has received the notice but not paid the amount within 15 days he failed to make payment, accordingly, filed the complaint.
12. The accused has denied the case of the complainant, the complainant marked Ex.P.1 cheque. Ex.P.1a is the signature of accused. The said cheque was presented on 25.10.2013 and returned on 26.10.2013 as 'funds insufficient' as per bank endorsement at Ex.P.2. Ex.P.3 is the notice dated 8.11.2013 issued to the accused. Ex.P.5 is the postal receipt, Ex.P.5 is the postal acknowledgment.
6 CC.No.52120/2014
13. The receipt of notice by the accused is not disputed nor he has replied the notice or paid amount within 15 days from receipt of notice. Therefore, the complainant after expiry of 15 days from receipt of notice thereafter within 30 days the complaint has been filed . Thereby to constitute an offence U/S 138 of NI Act the complainant has fulfilled the ingredients that the cheque in question admittedly belongs to accused, the signature thereon is also belongs to him, the cheque was returned for the reasons 'funds insufficient' as per Ex.P.2. The notice has been issued thereafter, the complainant has complied all the ingredients as held in JUGESH SEHGAL Vs SHAMSHER SINGH GOGI reported in (2009) 14 SCC 683, as follows:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) the cheque should have been issued for the discharge, in whole or on part, of any debt or other liability.
(iii) That cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 7 CC.No.52120/2014 account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.
(vi) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
14. Once the complainant fulfilled the ingredients of section 138 of NI Act, the mandatory presumption U/S 118 and 139 of NI Act has to be raised. It is for the accused to rebut the presumption and passing of consideration by either adducing evidence before the court or elicit the material on record through cross examination of PW1. The accused need not entered the witness box to rebut the presumption he can rely upon the material available on record to rebut the presumption.
15. The learned counsel for the complainant argued that the complainant and accused are business partners. The complainant 8 CC.No.52120/2014 has paid amount to the accused for the formation of layout. The accused has liable to pay 2,75,00,000/- towards investment and profits after completion of formation of layout. It is also argued that towards dues there was a memorandum of settlement the accused towards discharge of liability he had issued a 6 cheques and made part payment. Ex.P.1 cheque was dishonoured on presentation. On issuance of notice the accused failed to make payment, he is guilty of the offence U/S 138 of NI Act. The learned counsel has relied following rulings dated 21.1.2017.
1. Rangaappa Vs Sri.Mohan 7-5-2010 Supreme Court SLP (Crl.) No.407/2006
2. T.Vasanthkumar Vs Vijayakumari 28.4.2015 Supreme Court SLP. Crl.No.8091/2011
3. Sri.Raosaheb Satya Gouda Patil Vs Sri.Vilas 17-3-2015 Supreme Court Crl. Apl.No.2813/2009
4. Santosh Mittal Vs Sudha Dayal 2-09-2014 Delhi High Court Crl.A.No.1262/2013
5. Lekh Raj Sharma Vs Yash Pal Gupta 30-6-2015 Delhi High Court Crl.A.No.567/2014
6. R.Vijayan Vs Baby & Anr 11-10-2011 Supreme Court SLP. Crl.No.1902/2011
7. C.C.Alavi Haji Vs Palapetty Muhammed & Anr Supreme Court SLP. Crl.No.767/2007 9 CC.No.52120/2014
16. The counsel for accused denied the case of the complainant, according to him the complainant has no financial capacity to pay alleged huge amount. On the other hand the learned counsel referred the further statement U/S 313 of Cr.P.C filed by him as defence. According to him there was no existing enforceable debt or liability, the cheques in question were collected by the complainant as a security after receipt of amount the complainant has not returned the cheques. The complainant by giving threat to accused he has collect blank papers, blank cheques, the accused has made Rs.1,08,54,000/- to the complainant as a cash. The accused also executed a sale deed in favour of complainant wife towards settlement, who in turn sold in favour of Manjunath under two registered sale deeds. The complainant case is not acceptable. The accused rebutted the presumption, for which he has relied list with following citations:
1. 1995 CRI.L.J.560(A.P) By Hon'ble M.Rangag Reddy J. In Shri Taher N.Khambati Vs M/s Vinayak Enterprises & ors.
2. 1998 CRI.L.J.906 (A.P) by Hon'ble B.SA.Swamy J. In a Bhoosanarao Vs Purushothaamdas & Other
3. (2006) 3 Supreme Court cases (Cri) 30, By Hon'ble S.B.Sinha And P.P.Naolekar, JJ in M.S.Narayna Menon Alias Mani Vs State of Kerala 10 CC.No.52120/2014
4. 2008 AIR SCW 738 (KAR) by Hon'ble S.B.Sinha & H.S.Bedu, JJ In Krishna Janardhana Bhat Vs Dattarrya G.Hegde.
5. ILR 2008 KAR 4629, By Hon'ble Keshavaa Narayana J, in Shivamurthy Vs Amrutharaj
6. ILR 2009 KAR 1633 (Supreme Court) by Hon'ble R.V.Raveendran & J.M.Panchal JJ, In kumar Exports Vs Sharma Carpets
7. 2009 CRI.L.J.37777 (Bombay) by Hon'ble A.S Oka J. IN SANJAY MISHRA Vs Kanishka Kapoor
8. 2012 (2) DCR 342 (Gujara HC) by Hon'ble Bankim N.Mehta J, in Dilwar Singh Modubha Zala Vs State of Gujarat & another
9. 2013 (3) KCCR 1940 (KARNATAKA) by Hon'ble Shri K.N.Keshavanarayana J, in Lakshmi Subramanya Vs B.V.Nagesh
10. 2015 AIR SCW 64 (KARANTAKA) by Hon'ble V.Gopala Gowda and C.Nagappa .N JJ, In K.Subramani Vs K.Damodra Naidu
17. After careful consideration of rival submission of learned counsels for both sides, I have perused the oral and documentary evidence on record and also the list of citations relied by the respective parties, keeping in minds the principles laid down in the above said rulings, in the present case in the cross examination of PW1 elicited since 2004 accused is known to complainant, they are doing real estate business, more than Rs.1,75,00,000/- was 11 CC.No.52120/2014 invested with accused. The said amount was paid at different dates, in the year 2006 two times entire amount was paid, first time he has paid 75,00,000/- lakhs and second time he had paid 1,00,00,000/- to the accused in cash.
18. It is further elicited that he has not collected documents from the accused. However, as per Ex.P.6 the memorandum of settlement was executed by the accused in favour of complainant. It is elicited the complainant is agriculturist and doing real estate business. The amount was invested towards formation of layout. His family owns 10 acres of land in the year 2006, he is having 6 acres of land, his wife had also purchased sites which were sold it. He is not income tax assesses. Similarly in PW1 cross examination elicited as per Ex.P.6 memorandum Rs.2,75,00,000/- was due by the accused and he had paid Rs.2,00,00,000/- remaining Rs.56,00,000/- is due. He admits in memorandum of understanding it is mention Rs.81,00,000/- is due amount, but subsequently the accused had paid Rs.25,00,000/-. He denied Ex.P.6 memorandum of understanding executed in Banasawadi Police Station.
12 CC.No.52120/2014
19. Further in the cross examination of PW1 elicited accused had paid Rs.1,00,00,000/- at once. However, he had paid in 2-3 installments, whereas the complainant had paid amount out of sale of landed property. In the year 2003-04 he had sold sites and he has also collected amount from his father, brother and sister and remaining amount was with him. The said amount was paid to the accused. It is also elicited in page-8 once he had given Rs.75,00,000/- to the accused in the year 2009, he had sold three sites and kept amount in Federal Bank, Banasawadi Branch. From the above said material elicited through evidence of PW1 makes it clear that there was a business transaction in respect of real estate business between the complainant and accused. The complainant has paid amounts at different point of time to the accused for formation of layout, the complainant had mobilized amount out of sale of landed properties and paid amount to the accused . The above said circumstances would establishes the financial capacity of the complainant to pay the amount to the accused in respect of formation of layout. The suggestion made by the accused that he had paid amount Rs.1,00,00,000/- to the complainant would also indicate there was a payment of amount by the complainant to the accused. If the complainant had no financial capacity to pay the 13 CC.No.52120/2014 payment to the accused towards formation of layout as a investment. The accused would not have paid Rs.1,00,00,000/- as suggested and elicited in the cross examination of PW1. Therefore, the complainant had financial capacity to pay amount to the accused for formation of layout.
20. The complainant mainly relied Ex.P.6 memorandum of settlement executed by the accused on 14.9.2013. In the cross examination of PW1 suggested that it was written in the Banaswadi Police station, by putting above said suggestion the existence of settlement is admitted. It is for the accused to show that it was executed by misrepresentation, coercion. However, no material placed by the accused if really the Ex.P.6 settlement deed was prepared in the police station, no action taken by the accused against the complainant and police for having prepared Ex.P.6 in the police station. No ordinary prudent man under the circumstances would keep quite if the documents is obtained in the police station with threat or coercion. The accused also suggested in the cross examination of PW1 that the complainant assured the accused to return the security cheques and original memorandum of settlement in favour of accused, by suggesting 14 CC.No.52120/2014 so, the execution and existence of Ex.P.6 memorandum of settlement is admitted. The accused in the 313 statement filed on 29.8.2015 had contended because of fear he gave 6 signed blank cheques drawn on YES Bank, M.G.Road Branch, and 10 blank cheques signed drawn on corporation bank on 12 blank papers were given as a security to the complainant and further contended that there was a threat from the complainant and his fellow anti social elements, accused had paid Rs.13,54,000/- on 15.7.2012, Rs.20,00,000/- on 9.9.2012, Rs.25,00,000/- on 7.11.2012 and Rs.25,00,000/- on 14.11.2013 in total Rs.1,08,54,000/- as a cash. If really blank documents and cheques were given to the complainant and made alleged huge amount to the complainant due to threat. No ordinary prudent man in the circumstances after payment of such huge amount and handing over blank signed cheques and signed blank documents would keep quite without taking any action against complainant and his alleged anti social elements. There is no reference on behalf of accused that he has filed the complaint against the complainant for having collected huge amounts illegally and blank cheques and documents from him. The accused had knowledge about contents of notice sent by the complainant but he has not 15 CC.No.52120/2014 chosen to reply it. The contentions of statement filed U/s 313 statement is not suggested to PW1 in the cross examination. Therefore, above said circumstances would establish the accused had executed Ex.P.6 memorandum of settlement with complainant in respect of due to the complainant as a investment and copy after formation of layout, Subsequently the accused had paid Rs.25,00,000/- as per endorsement made in back of page No.2 of memorandum of settlement and remaining balance amount he had issued Ex.P.1 cheque in question and other cheques amounts in respect of connected two cases. Therefore, there existence legal enforceable debt as on the date of issuance of cheques and also on presentation of cheques to the bank. The said cheques were returned 'funds insufficient'. After receipt of notice the accused within 15 days failed to make payment. The sale deeds between complainant wife and Manjunath in respect of old site No.225/1 are nothing to do with the present transaction. There is no reference in the recitals of sale deed dated 14.11.2013 that accused executed above said sale deed in favour of complainant wife without receiving amount as a sale consideration from her and it was towards settlement of amount in favour of complainant 16 CC.No.52120/2014 .In absence any such material in those documents are not at all helpful to accused to rebut the presumption.
21. The accused has contended the amount given by the complainant to the accused is not shown in the income tax return. Therefore, it is not legally enforceable debt. On the contrary the complainant has relied ruling of Delhi High court in Lekh Raj Sharma Vs Yash Pal Gupta on 30-6-2015 in Crl.A.No.567/2014. Wherein relied the ruling of Mr.Krishna P.Morajkar Vs Mr. Joe Ferrao 2013 CRIJ (NOC) 572 Bombay held that The underlined observation do no disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which make an amount not shown in the income tax return unrecoverable. The entire scheme of the income tax act is for ensuring that all amounts are accounted for, if some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income Tax Act. Infraction of provisions of Income Tax would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of section 138 of Negotiable Instrument Act. Apart from the purpose of this Act, which has been outlined by the learned single judge in Shri Deelip Apte 17 CC.No.52120/2014 (supra) as well as Sanjay Mishra (supra), it ought to be seen that the moment a person seeks to recover through a cheque an amount advanced in cash it gets amounted for in the system and the revenue authorities can keep a track of that and if necessary tax the person. To brand an amount which is not shown in Income Tax Act as unaccounted money would be too farfetched and, therefore, I am in respectful disagreement with the observations in Sanjay Mishra (supra), which in fact amounts to reading an additional requirement in Section 138 of the Negotiable Instrument Act, and legislating that such amounts become irrecoverable. At the cost of repetition, for saying that an amount not disclosed in income tax return cannot be legally recoverable liability, some provisions of law to that effect would have to be shown. Such provision was not noticed by me and even the learned counsel for the respondent could not show any provision to me"
22. In view of above said ruling even if the amount paid by the complainant to the accused is not shown in the income tax return cannot be said it is irrecoverable U/S 138 of NI Act. The accused having admitted the issuance of cheque and signature thereon, as on the date of presentation of cheque he had not maintained sufficient amount in his account. The defense taken by the accused is inconsistent and contrary to each other, his defense is not probable and acceptable. In the cross examination of PW1 suggested that £ÀªÀÄä JAMAiÀÄÄzÀAvÉ 2013gÀ°è DgÉÆæ ºÀt ¥ÁªÀw ªÀiÁqÀ¨ÉÃQvÀÄÛ J£ÀÄߪÀÅzÀÄ ¸Àj. The above said suggestion is an 18 CC.No.52120/2014 admission regarding existence and execution of Ex.P.6 memorandum of settlement and also the existence of enforceable debt in the year 2013 as per Ex.P.6. On the other hand the complainant case is acceptable and he proved commission of offence by the accused punishable U/S 138 of NI Act. The accused is liable to be convicted for the above said offence. The punishment prescribed for the offence is imprisonment for a period which may extended to 2 years or with fine which may extended by twice the cheque amount or both. Considering the facts and circumstances of the case, nature and year of transaction, The considered view of this court is just and desirable to impose fine instead of imprisonment. The cheque amount is Rs.10,00,000/- Accordingly if fine of Rs.13,05,000/- is imposed out of which Rs.13,00,000/- is ordered to be paid as a compensation U/S 357 (1) Cr.P.C to the complainant, in default of payment of fine simple imprisonment of 3 months is order it would meets ends of justice. Accordingly, I answer Point No.1 in the negative and Point No.2 in the affirmative.
23. Point No.3: For the aforesaid reasons and findings I proceed to pass the following;
19 CC.No.52120/2014
ORDER Acting Under Section 255(2) of Cr.P.C accused is hereby convicted for the offence punishable under section 138 of Negotiable Instrument Act;
and he is sentenced to pay a fine of Rs.13,05,000/-, of which Rs.13,00,000/- shall be paid as compensation to the complainant in term of section 357(1) of Cr.P.C In default of payment of fine by the accused he shall suffers simple imprisonment for a period of 3 months The bail bond shall be cancelled after payment of amount and cash security deposited shall be ordered to be refunded to the accused (if not forfeited ) after payment of fine amount. Supply the free copy of this judgment to the accused forthwith.
(Dictated to the stenographer, transcribe and typed by her, corrected by me and pronounced in the open court on this 13th day of February 2017) (NATARAJ.S.) LVIII ADDL.C.M.M.BENGALURU ANNEXURE Witness examined for the complainant:
P.W.1: R.Nanjegowda Witness examined for the defence:
Nil 20 CC.No.52120/2014 Document marked by the complainant:
Ex.P.1 Cheque dated 25.10.2013
Ex.P.2 bank endorsement
Ex.P.3 Memorandum of Settlement
Ex.P.4 Legal notice
Ex.P.5 Postal Receipt
Ex.P.6 Unserved postal receipt
Document marked by the defence :-
Nil
(NATARAJ.S.)
LVIII ADDL.C.M.M.BENGALURU