Bangalore District Court
Reddy Chits Pvt. Ltd vs Harshita on 2 February, 2024
KABC030473332023
Presented on : 18-10-2023
Registered on : 18-10-2023
Decided on : 02-02-2024
Duration : 0 years, 3 months, 15 days
IN THE COURT OF XXVII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
Present: Sri. K.N. SHIVAKUMAR B.Sc (Agri), LL.M.,
XXVII A.C.M.M Bengaluru.
Dated: This the 2 nd day of February, 2024
C.C. NO.26906/2023
Complainant M/s.REDDYS CHITS PRIVATE
LTD.,
office at
No. 19, 2nd floor, BKM plaza,
5th B main road Tata silk farm,
K.R.Road,
BENGALURU 560070.
Represented by its Manager
Mr. V.Rajeev Reddy,
s/o.late.G.Venkatarama Reddy,
46 yrs
(Rep by Mr.C.N.Raghavendra, Adv.)
V/s.
Accused HARSHITHA.G,
d/o.Gunashekar.K, 31 yrs
No.3/1, Chandra bhavan,
Chikkaadugodi,
BENALURU 560029.
(Reptd by Sri.P.V.Raghupathi
Adv.,)
2 C.C. No.26906/2023
Offence U/s.138 of Negotiable Instruments
Act.
Plea of the accused Claims to be tried
Final Order CONVICTED
Judgment Date 02/02/2024
JUDGMENT
This is a complaint filed by the complainant U/Sec. 200 of Cr.P.C for the offence punishable under Sec.138 R/w Sec. 142 of N.I. Act as against the accused praying to punish the accused for the said offence.
2. The case of the complainant is that, it is engaged in the business of conducting chit transaction. Smt.Ramani Guna is the subscriber of chit group No.25L25M3, ticket No.11 for a sum of Rs.25 lakhs and chit group No.5L5 ticket No.23 for a sum of Rs.5 lakhs. The accused is a guarantor to said Smt.Ramani Guna for said chit groups and also she is also a subscriber of chit group bearing NO.10L25M3, ticket No.24 for a sum of Rs.10 lakhs with monthly installment of Rs.40,000/- for 25 months. The accused became successful bider at 3 C.C. No.26906/2023 the chit auction and received Rs.7,60,000/- as prize money after executing necessary documents. Thereafter, the accused became defaulter in payment of future installments and as such she was due for a total amount of Rs.7,69,000/-. Upon request made by the complainant, she has issued 3 cheques for Rs.2,75,000/-, Rs.7,69,000/- and Rs.7,81,000/- respectively, which were dishonoured for want of sufficient funds in the account of the accused. As such, the complainant filed complaints against the accused in CC.17633/21, CC.17636/21 and 17637/21. Similarly the complainant also filed complaints against the mother of the accused Smt.Ramani Guna under CC.No.17643/21 and 17640/21 for the similar offences. In the said proceedings, the present accused and her mother negotiated with the complainant and decided to compromise said cases and accordingly the complainant, the accused and her mother have filed a joint memo agreeing to settle all the said 5 cases for a 4 C.C. No.26906/2023 total sum of Rs.18 lakhs. As per the joint memo, the accused has to clear the said settlement amount on or before 16/4/22. But they have paid only Rs.3 lakhs and became defaulters in making payment of the remaining Rs.15 lakhs. Thereafter, the complainant obtained FLW from the court for recovery of said money and when he had been to the accused for execution of the FLW, the accused and her mother negotiated with the complainant and agreed to pay Rs.19,90,500/- including the said balance of Rs.15 lakhs along with accrued interest. Towards part discharge of the same, the accused had issued the cheque bearing no.068763 for a sum of Rs.9,90,500/- on 28/8/23 drawn on State Bank of India, Thavarekere branch, Bengaluru, in favour of the complainant company. As such, the complainant had presented the said cheque for encashment through his banker Punjab and Sind Bank, JC road Branch, Bangalore for encashment. But, the same was returned on 29/8/23 with an endorsement 5 C.C. No.26906/2023 stating " FUNDS INSUFFICIENT " . Thereafter, the complainant got issued a legal notice dated: 30/8/23 calling upon the accused to pay the cheque amount within 15 days and the said notice was served upon the accused. But, the accused has neither made the payment covered under the said cheque nor replied to said notice. Accordingly, the accused has committed an offence punishable under Sec.138 and 142 of N.I Act. Hence, this complaint.
3. After recording the sworn statement of the authorized representative of complainant company and also verifying the documents, cognizance was taken against the accused for the offence punishable under Sec. 138 R/w 142 of N.I. Act. The accused on receiving the summons appeared before the Court through her counsel and was enlarged on bail and her plea was recorded. The accused pleaded not guilty and claimed to 6 C.C. No.26906/2023 have defence. Hence, the case was posted for evidence of the complainant.
4. The representative of the complainant company got examined himself as PW.1 by adopting the affidavit filed in lieu of his sworn statement as per the guidelines of Hon'ble Apex Court of India, in the case (2014) 5 SCC 590 (Indian Bank Association & Ors V/s. Union of India & Ors) and got marked 9 documents as Ex.P.1 to 9. Then the case was posted for recording the Statement of accused under Sec.313 of Cr.P.C. In the statement under section 313 of Cr.P.C, the accused has denied all the incriminating evidences appearing against her. The accused got examined herself as DW1 & got marked Ex.D.1 to D8 on her behalf. Then, the matter was posted for Arguments.
5. Heard the arguments of the advocate for the complainant and the counsel for the accused. Perused 7 C.C. No.26906/2023 the records. Both the counsel have filed their written arguments.
6. The following points that arise for my consideration:
1. Whether the complainant proves that the cheque bearing No.068763, dated:28/8/23 for Rs.9,90,500/- drawn on State Bank of India, Tavarekere branch, Bengaluru, issued by the accused has been dishonored on the ground of " INSUFFICIENT FUNDS " and the accused even after receiving the intimation regarding the dis-
honor of cheque failed to pay the cheque amount within the stipulated period and thereby accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
7 . My findings on the above points are as under Point No.1: I n t he A f f i r m a t i v e Point No.2: As per final order, for the following:
REA S ON S 8 C.C. No.26906/2023
8. Point No.1 : In view of the present legal position as held by our Hon'ble High Court as well as Apex Court of India in a catena of decisions as well as relevant provisions of the Act, this court has to see whether the complainant has complied all the requirements as contained in Sec.138 of NI Act so as to bring home the guilt of the accused for the alleged offence. If so, whether the accused is able to rebut the legal presumption available to the complainant under Sec.139 of the Act by adducing probable defense or not. However, it is held by the full bench of our Apex Court in the case of Rangappa Vs. Mohan reported in 2010 (1) DCR 706 that ;
"The Statutory presumption mandated by sec.139 of the Act, does indeed include the existence of a legally enforceable debt or lia- bility. However, the presumption U/sec. 139 of the Act is in the nature of a rebuttable presumption and it is open for the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested" .9 C.C. No.26906/2023
9. Therefore, in view of the above decision once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant that, the alleged cheque was issued for the discharge of an exist- ing legally enforceable debt or liability against the ac- cused and the burden will shift on to the accused to re- but the same.
10. The learned counsel for the complainant has submitted the arguments contending that the accused has admitted the cheque and her signature thereon. Though she has cross examined PW 1 and also led de- fence evidence, nothing was proved so as to rebut the presumption available to the complainant U/s 139 of the act. Therefore he prayed for conviction of the ac- cused.
1 1 . On the other hand advocate for the accused has argued that, the accused has not issued any such cheque towards discharge of any such liability. The said 10 C.C. No.26906/2023 cheque Ex.P.5 is one of the 9 cheques issued by the ac- cused to the complainant as security at the time of bid of the chit. Though the accused has paid the entire amount as agreed under the joint memo, the com- plainant instead of returning those cheques taken as se- curity, misused one of them to file this false complaint against the accused in order to make illegal gain. As such, the complaint is liable to be dismissed.
12. Now, on the basis of the materials available on record, it is required to examine whether the com- plainant has complied with the provisions of Section 138 of N.I Act to get cause of action to file this complaint. The complainant besides his oral testimony has relied on the documents at Ex.P5 to 9 in support of his con- tentions. Ex.P.5 is the cheque alleged to have been is- sued by the accused, Ex.P.6 is the Bank endorsement, Ex.P7 is the copy of legal notice issued by the com- plainant, Ex.P8 is the postal receipt and Ex.P9 is the 11 C.C. No.26906/2023 postal envelope. All these documents corroborate the version of the complainant in his complaint as well as affidavit in lieu of his chief examination and more over these documents are not at all disputed by the accused, except service of notice & issuance of the cheque, which would be discussed in detail later. Thus, complainant with the help of Ex.P.5 to 9 has conveniently proved to have complied the provisions of Section 138 i.e. presen- tation of cheque within the statutory period for encash- ment, issue of legal notice within prescribed period to the Accused and filing of complaint within limitation pe- riod as per section 142 of the Act.
13. Regarding the service of notice, it is stated by the complainant that the legal notice sent to the address of the accused through RPAD was returned unserved on the ground that the same was unclaimed by the ad- dressee as per postal endorsement at Ex.P.9. The ac- cused in the course of cross-examination of PW1 or her 12 C.C. No.26906/2023 defence evidence, neither denied nor disputed the en- dorsement on Ex.P9. Though in the course of cross ex- amination of PW1, the accused simply denied the ser- vice of notice, she has neither disputed the postal shara nor denied the address therein. As such, it can be held that the complainant has issued the statutory notice to the correct and last known address of the accused. 'When the statutory notice is sent to the correct ad - dress of the addressee, even if the same is returned unserved on the grounds of either refusal or not claim or absence of the addressee, the same amounts to deemed service' as held by Hon'ble Apex Court in the case of M/S Indo Automobiles Vs. M/S. Jaidurga Enterprises reported in 2008 (2) DCR 499 and also as provided under Sec.27 of the Mysore general clauses Act, 1897. More over, the entire purpose of giving notice is to give an opportunity to the drawer to pay the cheque amount within 15 days and there by free himself from the penal consequences of Sec.138 of the Act as ob- served by our Hon'ble High Court in the case of Sri. 13 C.C. No.26906/2023 Prakash @ Gnana Prakash v/s Miss. T.S. Susheela re - ported in ILR 2012 KAR 4815. Thus, the legal notice is deemed to have been served.
14. The second aspect of the case is whether the ac- cused has successfully rebutted the presumption avail- able in favour of the complainant with probable and con- vincing evidences? It is well settled principle of law that, once the cheque is admitted there will be a statutory presumption in favour of the holder or holder in due course U/Ss 118 and 139 of the Act. However, as held by our Hon'ble Apex Court and the High Court in a catena of decisions, the presumptions under the said sections are in the nature of rebuttable presumptions and hence, the accused can very well rebut the said pre- sumptions by leading reasonable and probable defence. Let us examine the same on the basis of the materials available on record.
14 C.C. No.26906/2023
15. With regard to the merits of the case, it is the specific case of the complainant that the accused, her fa- ther and her mother have subscribed to different chit groups with the complainant company. As they have be- came defaulters in payment of chit installments, and is- sued cheques towards payment of outstanding dues, the complainant had instituted three cases against the ac- cused and 2 cases against her mother -Ramani Guna u/s.138 of N.I.Act. In the course of trial of those cases, the complainant and the accused and her mother have entered into a compromise and accordingly, they have filed a joint memo agreeing to pay a sum of Rs.18,00,000/- in total towards the amounts covered under said 5 cases. But the accused have not complied the terms of Joint memo and not made payments as per the schedule. They have paid only Rs.3,00,000/- on 16/4/22 and failed to pay the remaining Rs.15,00,000/-. As such, the complainant had obtained FLW against the accused from the court. When the 15 C.C. No.26906/2023 complainant approached the accused for execution of FLW, the accused have agreed to pay the balance amount along with accrued interest as per the joint memo to the tune of Rs.19,90,500/-. Towards part pay- ment of the said amount, the accused has issued the cheque Ex.P.5. In support of the case of the com- plainant, the representative of the complainant company was examined as PW 1 and got produced the alleged joint memo dtd: 18/12/21 filed in CC.17633/21 and connected cases as per Ex.P.4.
16. On the other hand, the accused has admitted fil- ing of said 5 cases against the accused & her mother and also said joint memo of compromise filed in the said cases as per Ex.P.4. But it is the specific defence of the accused that entire amount agreed under the said joint memo was paid to the complainant, but the complainant has not returned the 27 cheques which were taken at the time of bidding said chits and misused 2 cheques 16 C.C. No.26906/2023 out of them to file this false complaint. In the course of cross examination of the PW 1 as well as the cross ex- amination of the DW 1, it is alleged by the complainant that after filing the joint memo and compromising said 5 cases, the accused have paid only Rs.3,00,000/- through RTGS and failed to pay the remaining balance of Rs.15,00,000/-.
17. Though the accused has contended that they have issued in total 27 cheques ie., 9 cheques each of the accused, her father and her mother, they have not produced any materials to show that the complainant company had obtained such cheques during the alleged chit transactions. More so, the accused have neither ad- duced any evidences nor produced any materials to show that the complainant company used to take any such cheques as security during chit transactions. Even if this contention of the accused could be accepted, a genuine question would arise as to why the accused 17 C.C. No.26906/2023 have agreed for the compromise of said 5 cases by filing a joint memo, when it is their allegation that they have issued those cheques as security. More so, if at all any such cheques were issued as security and they were in possession of the complainant company, the same should have been mentioned in the joint memo filed dur- ing compromise of the said cases. Admittedly there is no mention in the joint memo at Ex.P.4 regarding such cheques. The DW 1 in her cross examination categori- cally admitted that there is a clear mention in the joint memo at paragraph no.4 that there are no undated cheques of the accused with the complainant. Though the DW 1 states that, that was a false, she has not stated anything as to why she has not questioned it while entering into said settlement and signing said joint memo. Similarly the DW 1 though denied that in the said joint memo there is no mention as to returning of 27 cheques after payment of 4th and final installment, she categorically admitted that in the said joint memo it 18 C.C. No.26906/2023 is mentioned that the cheques pertaining to the said 5 cases under compromise shall be returned after pay- ment of the 4th and final installment. That apart it is per- tinent to note that though the accused has taken such a contention that they have issued 27 cheques to the com- plainant during alleged chit transactions, she could not say any details about those cheques. Though it was suggested that said cheques are of the year 2016 and 2018, she has not produced any document in support of the same. If at all this contention of the accused is true, the accused could have produced the counter-foil of cheque books from which those 27 cheques were drawn to substantiate said contention. In the absence of any such materials or evidences and moreover in the ab- sence of any mention about the same in the said joint memo, it is highly impossible to accept this version of the accused only on the basis of mere suggestions. 19 C.C. No.26906/2023
18. Further, it is the contention of the accused that they have paid Rs.3,00,000/- through RTGS and Rs.15 lakhs by cash towards the liability under said joint memo. The PW1 also admitted payment of Rs.3 lakhs. But he has categorically denied and disputed payment of Rs.15 lakhs by cash. In this regard, the DW 1 in her cross examination stated that said Rs.15 lakhs was ar- ranged by her mother, but she don't know as to how her mother had arranged the said money. More so, she has neither stated as to when said money was paid in cash nor produced any proof as to payment of said money to the complainant. Rs.15 lakhs is not a meager amount, rather in the normal circumstances that is a huge sum of money. Normally when such huge sum of money is paid, any prudent man would keep any docu- ment in proof of the same, but the accused herein has not produced any such document in proof of payment of such huge sum of money in cash to the complainant. Therefore, this contention of the accused cannot be ac- 20 C.C. No.26906/2023 cepted. For this proposition this court is fortified by the decision of Hon'ble High Court of Karnataka in the case of B.Girish Vs. S.Ramaiah reported in 2010 (2) Kar.L.J 284, wherein it was held at para7 as follows;
"When a substantial amount of Rs.50,000/- was lent, it is reasonable to ex- pect that the creditor would insists upon the debtor to execute some document evidencing the transaction." ............
19. That apart the DW 1 herself categorically admit- ted that as per the Banking Regulations any transac- tions involving more than Rs.2 lakhs, should be done through cheque, DD or Account payments, but not by cash. If so, why the accused have paid Rs.15 lakhs in cash to the complainant. There is no explanation for the same by the accused. When the accused herself stated that they have paid Rs.3 lakhs through RTGS, what pre- vented them to pay said Rs.15 lakhs also through RTGS or any other online payment methods. Similarly, it is pertinent to note that after alleged payment, the accused appears to have not demanded for returning of said 27 21 C.C. No.26906/2023 cheques which were alleged to be in the possession of the complainant. If at all, the accused have really made said payment and cleared all the dues under the joint memo, definitely they would have insisted the com- plainant to return those cheques, if at all, they were with the complainant . Though the accused simply stated in her cross examination that they have asked the com- plainant to return the cheques and they have postponed the same by giving one or the other reasons, the accused appears to have not taken any action or steps against the complainant to get back their cheques. If at all said contention of the accused is true, they could have at least issued a demand notice demanding for returning of said cheques. In the absence of any such recourses be- ing adopted by the accused , it is not possible to accept said version of the DW 1. Therefore, there are no mate- rials to accept this contention of the accused as to pay- ment of alleged Rs.15 lakhs in cash.
22 C.C. No.26906/2023
20. Further, in the course of cross examination of the PW1, it was suggested by the defence counsel that the execution of NBW and FLW was not reported to the court, which was admitted by the PW1. It is also admit- ted that as per the order sheet dtd: 19/8/23, said NBW and FLW issued against the accused were not executed. In this regard, the defence counsel has argued that if at all the accused have issued alleged cheques when the complainant went with the NBW and FLW against them, the same should have been reported to the court on the subsequent date of hearing. In this regard, on perusal of the order sheet produced by the accused as per Ex.D1, it appears that upon the accused becoming de- faulters, the court had issued FLW on 7/7/23. On 19/8/23 the court has re-issued FLW as the earlier one was not executed. But as per the complainant version when they went to execute NBW and FLW, the accused issued said cheque in July 2023. As such, on 19/8/23 the same fact should have been reported to the court. 23 C.C. No.26906/2023 But, non-reporting the same would not render the case of the complainant untenable, because the chances of complainant intending to report the same after realizing the said cheques cannot be brushed away. That being the case, only because the complainant has not reported issuance of said cheques, it cannot be held that said cheques were not issued by the accused, when the ac- cused has utterly failed to prove the payment towards the joint memo even by way of preponderance of proba- bilities. Therefore, it appears very clear that when the accused became defaulter in payment of the amount agreed under Joint memo, the complainant approached the court and obtained NBW and FLW against the ac- cused . When the complainant approached the accused for execution of NBW and FLW, the accused might have negotiated with the complainant and issued said cheque towards payment of balance of Rs.15 lakhs along with accrued interest as per the joint memo.
24 C.C. No.26906/2023
21. In-view of all the above discussed facts and circumstances, the version of the complainant that the alleged cheque-Ex.P.5 was issued by the accused to- wards part payment of Rs.9,90,500/- to the com- plainant appears more probable than the defense of the accused that said cheque is one of the 9 cheques issued by her as security to the complainant company.
22. In view of all the above discussion, it can be concluded that the complainant has established through cogent and convincing evidence, the fact of issuance of the cheque for discharge of legally enforceable debt, which is dishonor for want of sufficient funds, issuance of legal notice within stipulated time, failure on the part of Accused to repay the amount within stipulated pe- riod. On the other hand, the accused has failed to rebutt the presumption available to the complainant through probable evidences, that would preponderate upon the evidence lead by the complainant. Therefore, the Ac- 25 C.C. No.26906/2023 cused is held to have committed an offence punishable under sec. 138 of N.I. Act. Accordingly Point No.1 is an- swered in the Affirmative.
23. POINT NO.2:- In view of my answer to Point No.1, I proceed to pass the following:-
: O R D E R : Acting U/sec.255(2) of Cr.P.C. the accused is hereby held guilty of the offence P/U/S 138 of N.I.Act and sentenced to fine of Rs.11 ,15,000/-. In default of payment of fine the accused shall undergo simple imprisonment for One year.
Acting u/s 357(1)(b) of Cr.P.C it is hereby directed to pay Rs.11,10,000/ to the complainant towards the compensation, and the remaining fine amount of Rs.5,000/ shall be paid to the State.
(Dictated to the stenographer directly on computer, corrected and then pronounced in open court by me on this the 2 nd day of February, 2024) (K.N. SHIVAKUMAR) XXVII A.C.M.M., Bengaluru.
ANNEXURE Witnesses examined on behalf of the complainant:26 C.C. No.26906/2023
PW1 : V.RAJEEV REDDY Documents marked on behalf of the complainant Ex.P1&2 : Authorization letter and Resolution Ex.P3 : Certificate of Incorporation Ex.P4 : Joint memo Ex.P.5 : Cheque Ex.P5(a) : Signature of the accused Ex.P6 : Bank Endorsement Ex.P7 : Office copy of legal notice Ex.P8 : Postal receipt Ex.P9 : Postal envelope Witnesses examined on behalf of the accused:
DW1 : HARSHITHA Documents marked on behalf of the accused:
Ex.D1-8 : Orders sheets and Joint memos XXVII A.C.M.M , Bengaluru.27 C.C. No.26906/2023
02/02/2024 Comp: Sri.CNR Adv., Accd: Sri. PVR Adv., For Judgment.
(Judgment pronounced in open court vide a separate judgment) O RD ER Acting U/sec.255(2) of Cr.P.C. the accused is hereby held guilty of the offence P/U/S 138 of N.I.Act and sentenced to fine of Rs.11 ,15,000/-. In default of payment of fine the accused shall undergo simple imprisonment for One year. Acting u/s 357(1)(b) of Cr.P.C it is hereby directed to pay Rs.11,10,000/ to the complainant towards the compensation, and the remaining fine amount of Rs.5,000/ shall be paid to the State.
XXVII A.C.M.M., Bengaluru.