Bangalore District Court
Sri.Krishna Nayak vs Sri.Suresh on 15 September, 2018
1 C.C.No.1427/2017 J C.C.No.1427/2
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated:- This the 15th day of September, 2018
Present:- Smt. Saraswathi.K.N, B.A.L., LL.M.,
XVI Addl.C.M.M. Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.1427/2017
Complainant : Sri.Krishna Nayak,
S/o. Madu Nayak,
Aged about 42 years,
R/at No.28/C,
3rd Cross, 1st Main,
Sharadha Nagara,
Vasanthapura Main Road,
Subramanyapura Post,
Bengaluru -560 062.
(Rep.by Prajwala. S.H.Gowda.,
Adv.,)
- Vs -
Accused : Sri.Suresh,
Major,
R/at No.17,
Manjushree Condiments,
Canara Bank Road,
Konnankunte Cross,
Bengaluru -560 062.
(Rep. by Sri.M.Y.Nagaraj., Adv.,)
Case instituted : 22.8.2016
Offence complained : U/s 138 of N.I. Act
of
2 C.C.No.1427/2017 J C.C.No.1427/2
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 15.9.2018
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, by profession he is a civil contractor. As per the request made by the Accused, he has constructed a building for the Accused and the Accused was due in a sum of Rs.1,70,000/= and that towards the payment of the said amount, the Accused has issued a cheque bearing No.271430 dated 25.5.2016 for a sum of Rs.1,70,000/= drawn on the Canara Bank, Konanakunte Branch, Bengaluru, in his favor, assuring that the same would be duly honored on its presentation on the due date.
3. The Complainant has submitted that, as per the instructions of the Accused, when he presented the said cheque for encashment through his Banker, to his shock and surprise, the said cheque came to be returned as dishonored with a Bank Endorsement dated 30.6.2016 as "Funds Insufficient". Though he immediately he contacted the Accused and informed him about the same, the 3 C.C.No.1427/2017 J C.C.No.1427/2 Accused expressed his financial and failed to pay the cheque amount to him.
4. The Complainant has further submitted that, thereafter without any alternative, he got issued a legal notice to the Accused on 11.7.2016 through RPAD calling upon him to pay the cheque amount to him within fifteen days from the date of the receipt of the said legal notice, which came to be duly served on him. Though after the service of the said legal notice, the Accused has caused an untenable reply, he has failed to comply with the demand made in the said notice. Hence the present complaint.
5. Thus it is alleged by the Complainant that the dishonor of the cheque by the Accused has been malafide, intentional and deliberate. Feeling aggrieved by the conduct of the Accused, he has filed the present complaint praying that the Accused be summoned, tried and punished in accordance with Sec.138 of the Negotiable Instruments Act.
6. The Complainant has led his pre-summoning evidence and he has filed his affidavit-in-lieu of his sworn statement, in which, he has reiterated the complaint averments.
4 C.C.No.1427/2017 J C.C.No.1427/27. In support of his case, C.W.1 has produced and relied upon the following documentary evidence as per Ex.C1 to C6:-
Ex.C1 is the Original Cheque dated:-25.5.2016, in which, the signature is identified by P.W.1 as that of the Accused as per Ex.C1(a), the Bank Memo as per Ex.C2, the Agreement dated: 28.10.2014 as per Ex.C.3, the office copy of the Legal Notice as per Ex.C4, the Reply Notice as per Ex.C.5 and the Track Result as per Ex.C.6.
8. Prima-facie case has been made out against the Accused and he has been summoned vide the order of the same date.
9. The Accused has appeared before the court and he has been enlarged on bail. The substance of the accusation has been read over and explained to him, to which, he has pleaded not guilty and has claimed the trial.
10. As per the direction of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the Accused, as he intended to set out his defence, the case came to be posted for the cross-examination of the Complainant.
5 C.C.No.1427/2017 J C.C.No.1427/211. P.W.1 has been cross-examined by the learned Defence Counsel.
During the cross-examination of the Complainant, the following documents are marked through him by having confronted the same to him:
i) The Printouts of the photographs as per Ex.D1;
ii) The CD as per Ex.D2;
iii) The print out of the photograph as per Ex.N1.
12. The statement of the Accused as required under Sec.313 of the Cr.P.C. is recorded. The Accused has denied the incriminating evidence found against him and has chosen to lead his rebuttal evidence.
13. The Accused has led his rebuttal evidence by examining him as D.W.1 and he has filed his affidavit-in- lieu of his chief-examination, which has been accepted by this court as per the direction of our Hon'ble High Court in Afzal Pasha V/s. Mohamed Ameer Jan, reported in LAWS (KAR) 2016 (8) 131, in which, the acceptance of the affidavit of the Accused is permitted by our Hon'ble High Court in accordance with the direction of the Hon'ble Apex Court in the case of the Indian Bank Association Vs., Union of India, reported in (2014) 4 SCC 590.
6 C.C.No.1427/2017 J C.C.No.1427/214. The gist of the defence of the Accused in his affidavit is as follows:-
i) That the Complainant has filed his false case against him;
ii) That the Complainant had undertaken the construction of the building on the property of the former;
iv) That at the time of the house warming ceremony there were several civil works which were required to be completed by the Complainant;
v) That the Complainant had undertaken to complete the said works but requested him to issue post dated cheque for the balance amount of Rs.1,70,000/= to enable him to show the same to his suppliers to obtain goods from them on credit basis;
vi) That the Complainant has collected such cheque from him to hand over the keys of the property to enable him to take up the house warming ceremony;
vii) That in terms of the Agreement dated 28.10.2014, the Complainant was required to use the original sand for use on sanitary 7 C.C.No.1427/2017 J C.C.No.1427/2 construction and hole sand for the construction work, but he has used the robo sand for the entire construction work, inspite of objections by him;
viii) That the Complainant has used the poor quality materials including the inferior pipes other than the agreed supreme brand pipes;
ix) That the Complainant has failed to rectify the same and he has failed to complete the construction of the compound wall for which he received Rs.50,000/= from him;
x) That the cheque in question is part of the contract and that until and unless, the contractual obligations were performed by the Complainant, he was barred and prohibited from presenting the subject cheque;
xi) That the cheque in question was a security cheque and not for presentation until the balance work was completed;
xii) That the Complainant has misused the said security cheque;
Accordingly, he has prayed for his acquittal.
8 C.C.No.1427/2017 J C.C.No.1427/215. D.W.1 has been cross-examined by the learned counsel for the Complainant.
16. The learned counsel for the Complainant has addressed his arguments, during which, he has prayed for the conviction of the Accused on the following grounds:-
i) That the Complainant has proved his case by relying upon the documentary evidence as per Ex.C1 to C6;
ii) That the claim of the Complainant is for Rs.1,70,000/=;
iii) That the Accused has issued the cheque in question after his house warming ceremony;
iv) That there is no complaint lodged by the Accused against the Complainant till the issuance of the legal notice by the latter to the former;
v) That the only defence of the Accused is that the Complainant has used the robo sand instead of the river sand;
vi) That if as per the version of the Accused, if any
work was pending from the side of the
9 C.C.No.1427/2017 J C.C.No.1427/2
Complainant, the former would not have issued the cheque to him for Rs.1,70,000/=;
vii) That the Accused issued a Post dated cheque;
viii) That the Accused alleges that the Complainant has not constructed the compound wall, but it was not included in the agreement and the same is admitted even by the Accused in his cross-
examination;
ix) That the allegation of poor quality of work not tenable;
x) That if the Complainant had really used the robo sand for the construction work, then there was no impediment to the Accused to have taken legal action against him in this regard;
xi) That the Accused has admitted that the photographs at Ex.D1 are the present photos and not the photos of the period prior to the case;
xii) That there is no probable defence put forth by the Accused.
Accordingly, the Accused is liable to be convicted. Accordingly he has prayed for the conviction of the Accused.
10 C.C.No.1427/2017 J C.C.No.1427/217. Per contra, the learned Defence Counsel has addressed his arguments, during which, he has prayed for the acquittal of the Accused on the following grounds:-
i) That the Complainant has collected the cheque in question from the Accused forcibly;
ii) That when the Accused asked the Complainant about the robo sand, the latter had told him that he would discuss about it after the completion of the construction;
iii) That the Accused decided to go for 3 floors as against 4 floors because of his financial condition;
iv) That the Accused has spent Rs.3 Lakhs after the incomplete work left over by the Complainant unattended;
v) That the cheque ought to have been presented for encashment by the Complainant, only after the completion of the pending works by him;
.
vi) That there is a breach of contractual obligation by the Complainant and as such there is no liability which could be legally enforced by the Complainant as against the Accused.
11 C.C.No.1427/2017 J C.C.No.1427/2Accordingly, he has prayed for the acquittal of the Accused.
18. I have considered the submissions and perused the record carefully.
19. Sec.138 of the Negotiable Instruments Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence under Sec.138 of the Negotiable Instruments Act are:-
(i) Drawing up of a cheque by the Accused towards payment of an amount of money, for the discharge, in whole or in part, of any debt or any other liability;
(ii) Return of the cheque by the Bank as unpaid;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of the notice under the proviso (b) to Sec.138.
The Explanation appended to the Section provides that, the "debt or other liability" for the purpose of this Section means a legally enforceable debt or other liability.
20. Apart from this, Sec. 139 of the Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms:-
12 C.C.No.1427/2017 J C.C.No.1427/2"It shall be presumed, unless the contrary is proved, that:-
The holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, of any debt or other liability".
21. Also, Sec. 118 of the Negotiable Instruments Act states, "Until the contrary is proved, the following presumptions shall be made:-
(a) That every Negotiable Instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
22. Thus, the Act clearly lays down presumptions in favour of the Complainant with regard to the issuance of the cheque by the Accused towards the discharge of his liability in favour of the Complainant.
23. Under the scheme of the Act, the onus is upon the Accused to rebut the presumptions in favour of the Complainant by raising a probable defence.
13 C.C.No.1427/2017 J C.C.No.1427/224. It is a well settled position of law that the defence of the Accused, if in the nature of a mere denial of the case of the Complainant will not be sufficient to hold it as a probable defence. The bare denial of the passing of consideration apparently does not appear to be any defence. Something which is probable must be brought on record for getting the benefit of shifting the onus of proof to the Complainant.
25. It is also a well settled position of law that, once the cheque is proved to be relating to the Account of the Accused and he accepts and admits the signature on the said cheque, then the initial presumption as contemplated under Sec. 139 of the N.I.Act has to be raised by the courts in favour of the Complainant. The presumption referred to in Sec.139 of the N.I.Act is a mandatory presumption and not a general presumption, but the Accused is entitled to rebut the said presumption. What is required to be established by the Accused in order to rebut the presumption is different from each case under given circumstance. But the fact remains that a mere plausible explanation is not expected from the Accused and it must be more than a plausible explanation by way of rebuttal evidence. The defence raised by the Accused by way of rebuttal evidence must be probable and capable of being accepted by the court.
14 C.C.No.1427/2017 J C.C.No.1427/226. No doubt the initial mandatory statutory presumptions under Sec.118 and 139 of the N.I.Act are in favour of the Complainant. However they are rebuttable presumptions and the Accused is expected to rebut the presumptions by raising a probable defence.
27. Such being the legal position, it would be pertinent to refer to the defences raised by the Accused to rebut the presumptions in favour of the Complainant in this case.
28. Admittedly, there is also no dispute with regard to the fact that the parties are acquainted to each other and also with regard to the existence of the transaction in question as claimed by the Complainant in this case. Likewise there is no dispute with regard to the fact that the cheque in dispute belongs to the Accused with his signature on it and that he has issued the same in favor of the Complainant. However, there is a dispute with regard to the alleged liability of the Accused under the subject cheque in favor of the Complainant and the purpose for which, the cheque in question has been issued by the Complainant to the Accused. according to the Complainant, the Accused has issued the cheque in question to him towards his outstanding due in connection with the construction of the building by him, while according to the Accused, it was issued only for security 15 C.C.No.1427/2017 J C.C.No.1427/2 purpose to enable the Complainant to complete some of the incomplete works and subject to the condition that, the same would be presented only after the completion of the incomplete works by the Complainant.
29. In view of such serious dispute between the parties, it is necessary on the part of the part of the Complainant to plead and prove his case beyond reasonable doubt.
30. In this regard, it is relevant to note that, it is an undisputed fact that though as per the agreement between the parties, the Complainant was supposed to construct a four floored building to the Accused, but due to the financial constraints of the latter, the same was restricted to three floored building. Therefore there can be no dispute in this regard.
31. It could be seen that, the Accused has put forth his defence first in point of time by causing a reply notice as per Ex.C5. However the only defence of the Accused which is evident from his Reply Notice is the alleged poor quality of materials used by the Complainant in the construction of his building and the alleged breach of conditions of the Agreement by the Complainant. Hence it is alleged in the reply notice that, the Complainant has committed the breach of the contractual obligation and as 16 C.C.No.1427/2017 J C.C.No.1427/2 such the Accused has claimed that there is no legally enforceable liability on the part of the Complainant as against him.
32. It could be seen in the same line of defence the Complainant has been cross-examined by the learned Defence Counsel.
33. However it is pertinent to note that the only defence of the Accused which is evident even in the stage of the cross-examination of the Complainant is that, the latter has not used the river sand and that he has used the robo sand and that the quality of the materials used by him in the construction is very poor and not standard and that he has not done the compound work and the flooring, though the same was to be done as per the agreement at Ex.P3.
34. It is interesting to note that, as rightly pointed out by the learned counsel for the Complainant in her arguments, the Accused has come up the defence of allegations against the Complainant only after the service of the legal notice on him in respect of the subject cheque and not prior to it.
35. Moreover, even if it is assumed for a moment that, there was breach of contractual obligation on the part of 17 C.C.No.1427/2017 J C.C.No.1427/2 the Complainant, the Accused had the remedy to have taken appropriate legal action against the former before the competent forum. However there is no explanation offered by the Accused as to why he has not chosen to do so.
36. It is further pertinent to note that, though during the cross-examination of the Complainant, the photographs as per Ex.D1 came to be confronted to him and he has admitted the suggestion that, the building which is visible in the said photographs is the one which is constructed by him, during the cross-examination of the Complainant, it is elicited from him that the said photographs at Ex.D1 are recent ones and not prior to the issuance of the legal notice by the Complainant to him.
37. Therefore the defence of the Accused is in no way strengthened with the help of the said photographs at Ex.D1, since the said photographs do not depict the actual prevailing situation, since they are taken recently, while the liability of the Accused under the subject cheque is as on 25.5.2016.
38. Therefore, when admittedly the Accused is in possession of the said building, since 2016, till date, then obviously, there is bound to be normal wear and tear and deterioration in the quality of the materials due to passage of time and in such circumstance, by relying upon the 18 C.C.No.1427/2017 J C.C.No.1427/2 photographs at Ex.D1, which are admittedly taken recently, it can be concluded that, there is a breach of the contractual obligation by the Complainant.
39. Even otherwise, this is not the competent forum to adjudicate regarding the breach or otherwise of the contractual obligation by the Complainant as against the Accused.
40. Moreover during the cross-examination of the Accused, it is elicited from him that, he has performed the house warming ceremony of his house on 17.5.2016 and 18.5.2016, while he has issued the subject to the Complainant on 25.5.2016, that means if is only after the performance of the house warming ceremony of his house that the Accused has issued the subject cheque to the Complainant. in such circumstance, if the defence of the Accused that there were several pending works from the side of the Complainant were due, then there was no necessity for the former to issue a cheque for Rs.1,70,000/=. In this regard there is absolutely no explanation offered by the Accused.
41. Moreover it could be seen that, in his chief examination affidavit, it is claimed by the Accused that, the Complainant had requested him to issue a post dated cheque to him so as to show the same to his suppliers to 19 C.C.No.1427/2017 J C.C.No.1427/2 obtain goods on credit basis and to enable him to take the keys of his house to perform the house warming ceremony. That means, as per this version of the Accused, he is said to have issued the subject cheque to the Complainant at his request prior to his house warming ceremony. However this is clearly contradictory to what is claimed by the Accused in his cross-examination, as per which, the cheque in question was issued by him after his house warming ceremony. This contradiction in the defence version of the Accused also renders the same a doubtful one.
42. Moreover it is pertinent to note that, during the cross-examination of the Complainant, it is also suggested to him that, he had handed over the keys to the Accused only to enable him to perform his house warming ceremony and that, while handing over the keys to the Accused, he had informed the Accused that, there were some works pending and that the keys of the building would be handed over to him, only if he handed over the cheque to him.
43. Though this defence version is denied by the Complainant, with this suggestion, it can be inferred that, the Accused has alleged that there was force and compulsion exerted on the Accused to issue his cheque to the Complainant. However this would also go contrary to 20 C.C.No.1427/2017 J C.C.No.1427/2 the defence of the Accused as put forth in his chief- examination affidavit that he has handed over the cheque to the Complainant at his request. Thus these contradictory stands also render the defence of the Accused a highly improbable one.
44. Moreover it could be seen that, though the Accused has alleged that the Complainant has not done the compound work and that he has collected the extra amount of Rs.50,000/= towards the construction of the compound, in his cross-examination, the Accused has clearly admitted that, it was not agreed in the agreement at Ex.C3 that the compound had to be constructed by the Complainant. This admission on the part of the Accused leads to an inference that he has not been able to probabalize his defence in any manner on any ground.
45. Further the admissions elicited from the Accused that, he has not taken any legal action against the Complainant alleging that there was some balance work on his part clearly leads to an inference that the Accused is liable towards the Complainant under the subject cheque.
46. Even otherwise, if the defence of the Accused that, his cheque was misused by the Complainant was really true, then he had no impediment to issue the stop 21 C.C.No.1427/2017 J C.C.No.1427/2 payment instructions to his banker in respect of the subject cheque or to initiate appropriate legal action against the Complainant in this regard. The inaction on the part of the Accused in this regard also leads to an adverse inference against him.
47. Therefore, the materials on record clearly indicates the fact that, the Complainant has successfully established his case beyond reasonable doubt as against the Accused, while the Accused has failed to probabalize his defence and consequently, to rebut the presumptions available in favour of the Complainant u/Sec. 118 and 139 of the N.I.Act. Accordingly, I proceed to pass the following:-
ORDER By exercising the power-conferred u/s 255(2) of Cr.P.C. the Accused is hereby convicted of the offence punishable u/s 138 of the Negotiable Instruments Act.
He is sentenced to pay a fine of Rs.2,00,000/= (Rupees Two Lakhs Only).
Out of the fine amount so collected Rs.1,90,000/= (Rupees One Lakh and Ninety Thousand Only) is ordered to be paid to the Complainant as Compensation and the balance of Rs.10,000/= (Rupees Ten Thousand only) is ordered to be adjusted towards cost to the State Exchequer.22 C.C.No.1427/2017 J C.C.No.1427/2
In default of payment of such compensation, the Accused shall undergo Simple Imprisonment for 6 (Six) Months.
His bail bond stands discharged.
Issue free copy of the Judgment to the Accused forthwith.
(Dictated to the Stenographer online, print out taken by her, verified, corrected and then pronounced by me in the open Court on this the 15thday of September, 2018).
(SARASWATHI.K.N), XVI ACMM., Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
PW.1 : Sri. Krishna Nayak; 2. List of documents exhibited on behalf of the Complainant:- Ex.C.1 : Original Cheque; Ex.C.1(a) : Signature of the Accused; Ex.C.2 : Bank Memo; Ex.C.3 : Agreement dated 28.10.2014; Ex.C.4 : Office copy of the Legal Notice; Ex.C.5 : Reply Notice; Ex.C.6 : Track Result.
3. List of witnesses examined on behalf of the Accused:-
DW-1 : Sri. Suresh
4. List of documents exhibited on behalf of the Accused:-23 C.C.No.1427/2017 J C.C.No.1427/2
(Marked through P.W.1):
Ex.D.1 : The Printouts of the Photographs;
Ex.D.2 : The C.D;
Ex.N.1 : The Printout of the Photograph
(SARASWATHI.K.N),
XVI ACMM., Bengaluru City.
24 C.C.No.1427/2017 J C.C.No.1427/2
15.9.2018 Judgment pronounced in the open court
vide separate order.
ORDER
By exercising the power-conferred
u/s 255(2) of Cr.P.C. the Accused is
hereby convicted of the offence
punishable u/s 138 of the Negotiable Instruments Act.
He is sentenced to pay a fine of Rs.2,00,000/= (Rupees Two Lakhs Only).
Out of the fine amount so collected Rs.1,90,000/= (Rupees One Lakh and Ninety Thousand Only) is ordered to be paid to the Complainant as Compensation and the balance of Rs.10,000/= (Rupees Ten Thousand only) is ordered to be adjusted towards cost to the State Exchequer.
In default of payment of such compensation, the Accused shall undergo Simple Imprisonment for 6 (Six) Months.
His bail bond stands discharged.
Issue free copy of the Judgment to the Accused forthwith.
XVI ACMM, B'luru.