Bangalore District Court
Son Of Late Chikkappaiah vs Son Of Rangappa on 29 July, 2022
SCH. No: 2 1 C.C No:17974/2017
KABC020148982017
IN THE COURT OF THE VI ADDL. JUDGE, COURT OF SMALL
CAUSES AND ADDL. CHIEF METROPOLITAN MAGISTRATE,
BENGALURU CITY.
C.C. NO.17974/2017
Present: Smt. Shainey. K.M. BAL.,LL.B.,
6th Addl. Judge, Court of Small
Causes and ACMM, Bengaluru.
Dated: On this 29th day of July, 2022.
JUDGMENT U/S 355 OF CR.P.C. 1973.
1. Sl. No. of the Case : C.C. No. 17974 of 2017
2. The date of : 08.06.2017
commission of the
offence
3. Name of the : Sri. H.P. Lakshmana Reddy,
Complainant
Son of Late Chikkappaiah,
Aged about 67 years,
R/at No.255, 5th Main,
36th Cross, 4th Block,
Jayanagara,
Bengaluru-560 011.
(By Sri. Malleshaiah, Advocate)
SCH. No: 2 2 C.C No:17974/2017
4. Name of the : Sri. T.R. Ramachandra,
Accused
Son of Rangappa,
Aged about 61 years,
R/at No.516/2,
Ranganatha Nilaya,
D.C. Halli Main Road,
Bilekahalli Post,
Bannerughatta Road,
Bengaluru-560 076.
(By Sri. T.S. Gurunath,Advocate)
5. The offence complained : U/ Section 138 of the
of or proves Negotiable Instrument Act.
6. Plea of the accused and : Pleaded not guilty.
his examination
7. Final Order : Accused is Convicted.
8. Date of such order for : 29.07.2022.
the following
JUDGMENT
This is a complaint against the accused filed under Sec. 200 of Cr. P. C. for the offence punishable under Section 138 of the Negotiable Instruments Act.
SCH. No: 2 3 C.C No:17974/2017
02. The brief facts of the complainant's case is as follows:
2.1. It is contended that, accused herein is complainant's friend and they are well known to each other for several years. Complainant is a businessman and he is doing real estate business in the name and style M/s S.G.P. Developers. The complainant has sold sites formed in Sy.No.128/1, 128/2, 128/3 and 128/4 situated at Nagondanahalli Village, K.R. Puram, Bengaluru East Taluk and he had sufficient funds with him out of sale of these properties and it was well within the knowledge of accused as well. It is contended that, during 1 st week of October-2016, the accused approached the complainant seeking for hand loan of Rs. 30,00,000/- for the purpose of his business and also to meet legal necessity of his family. That on 20.10.2016, in complainant's residence, he paid Rs. 30,00,000/- to the accused and on the very same day, the accused herein has issued 3 post dated SCH. No: 2 4 C.C No:17974/2017 cheques bearing No.111067, 111066 and 109728, dated:20.03.2017, dated:22.03.2017 and dated:27.03.2017, for Rs.10,00,000/- each drawn on Punjab National Bank, Bannergatta Road Branch in favour of the complainant.
2.2. The accused has assured the complainant that, cheques would be honored on its presentation, on the due dates. The complainant has presented the cheque bearing No.111067 to bank for encashment, but the bank has returned the cheques unpaid with a memo dated:
28.03.2017 with a shara "funds Insufficient".
Immediately, he approached and informed the accused about the dishonour of cheque and also demanded for payment of amount covered under the cheque. It is stated that, accused had procrastinated the repayment of loan for one or the other pretext. With no other alternative, the complainant got issued legal notice dated: 25.04.2017 to accused through registered post SCH. No: 2 5 C.C No:17974/2017 and same was served on him on 26.04.2017. However, the accused neither replied the notice nor repaid the loan to complainant. Hence, this complaint.
03. On filing of the private complaint, the Court has taken cognizance of the above offence and proceeded with the case as there was ground to proceed against the accused.
04. The accused has put appearance before the court through his counsel, filed bail application, and offered cash surety for his appearance before the court and enlarged on bail.
05. The plea of accused was recorded, read over and explained to the accused, for which, he has not pleaded guilty and claimed to be tried.
06. In support of his case, complainant was examined as P.W.1 and closed his evidence. Exhibits were marked as Ex-P:1 to 5. Learned counsel for accused has cross examined P.w.1.
SCH. No: 2 6 C.C No:17974/2017
07. Statement U/Sec. 313 of Cr.P.C., was recorded and read over, explained to accused and he has denied the contents of statement as false. Accused has examined himself as D.W.1 and one witness was examined as D.W.2. Exhibits were marked as Ex-D:1 to 5 on behalf of accused. Learned counsel for the complainant has cross examined D.w.1 and 2.
08. Heard the arguments of complainant and accused. The complainant has relied on decision reported in (1) 2001 Crl.L.J. 4745 SC, (2) 2015 part 4 KCCR 2881 SC, (3) 2018 Crl.L.J. 4315 SC and (4) 2017 part 2 AKR 527.
09. Accused has relied on decisions reported in (1) AIR 2019 SC 1983, (2) 2013 part 3 SCC 86, (3) 2008 part 4 SCC 54, (4) 2015 part 1 DCR 642, (5) 2012 part 3 KCCR 2057, (6) 2008 Crl.LJ. 2955, (7) 2014 part 1 DCR 547 and (8) 2014 part 4 KCCR 3661 (SC).
SCH. No: 2 7 C.C No:17974/2017 10. Perused the material placed on record, now,
following points arises of the consideration for the disposal of the case.
POINTS
1. Whether Complainant proves beyond all reasonable doubt that Accused has committed an offence punishable under Section 138 of Negotiable Instruments Act?
2. Whether accused has rebutted the presumption as contemplated u/sec 139 of N.I Act?
3. What order?
11. My answers to the above points are as follows:
Point no:1 : In the affirmative.
Point no:2: In the negative.
Point no.3: As per final order
for the following:
:REASONS:
12. Point no:1 & 2: This is a private complaint filed
against the accused for the offence punishable under sec.
SCH. No: 2 8 C.C No:17974/2017 138 read with Section 142 of N.I Act. On perusal of the oral and documentary evidence placed by the complainant, it reveals that the present complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with regard to taking cognizance of the offence punishable under Section 138 of N I Act.
13. At the outset, an essential ingredient of Section 138 of N.I Act is that the cheque in question must have been issued towards legal liability. Under Section 118 of the Act, a presumption shall be raised regarding consideration, date, transfer, endorsement and regarding holder in the case of negotiable instruments. Even under Section 139 of the Act, a rebuttable presumption shall be raised that, the cheque in question was issued regarding discharge of legally enforceable debt. These presumptions are mandatory provisions that are required to be raised in case of negotiable instruments.
SCH. No: 2 9 C.C No:17974/2017
14. It is the burden of the complainant to establish that, he paid the amount to accused as hand loan. On the other hand, it is the burden of accused to establish that, he issued cheques for Rs.10,00,000/- each in favour of complainant towards payment of advance amount in respect of the commercial building owned by the complainant to run hotel with lodges and party hall. It is the specific plea of the accused that, he agreed to take commercial building of the complainant on rent to do hotel and lodging business.
15. To prove his case, complainant has filed affidavit in lieu of examination in chief, examined as Pw:1 and reiterated the averments made in the complaint. He has produced disputed cheque bearing No.111067, memo issued by the bank, office copy of legal notice, postal receipt and postal acknowledgment at Ex-P:1 to 5, respectively. It is admitted fact that, parties to the case are known to each other.
SCH. No: 2 10 C.C No:17974/2017 16. To prove the alleged payment of loan, the
complainant has produced the cheque bearing No.111067 issued by the accused towards repayment of loan at Ex.P.1. The issuance of cheque in favour of complainant by the accused is not in dispute. The signature of accused appearing in Ex.P.1-Cheque is also not in dispute. Amount mentioned in cheque was written by accused himself and it is not in dispute.
17. It is the specific defence of the accused that, he issued total six cheques for each of Rs.10,00,000/- to complainant towards payment of deposit amount of Rs.60,00,000/- in respect of commercial building belonging to the complainant. It is the burden of the accused to establish the alleged rental transaction between the parties to the case.
18. To prove his contention, accused has filed affidavit in-lieu of examination in chief and examined himself as D.W.1. Accused has examined one witness namely Sri. SCH. No: 2 11 C.C No:17974/2017 Ramu H., as Dw:2. Accused deposed in evidence that, in the month of January-2017, he had gone to meet complainant and his son Surendranath through Sri. Ramu H.,-D.W.2 to take on their building for rent to run CL-7 Bar and Restaurant at 5th Block, Jayanagara, Bengaluru consisting of 7 floors. D.W.1 deposed that, complainant has agreed to lease out the entire building on monthly rent of Rs.6,00,000/- along with refundable deposit of Rs.60,00,000/-. The accused has agreed to pay deposit amount of Rs.60,00,000/- stage by stage and so, he issued six cheques in total by writing only amount on cheques as per the request of complainant and his son. D.W.1 deposed that, complainant has agreed to execute the rental agreement after encash of all the cheques.
19. However, to substantiate his contention accused has not produced any supportive evidence to show that, he issued cheque in question in the month of January-2017 towards payment of deposit amount of Rs.60,00,000/-.
SCH. No: 2 12 C.C No:17974/2017
20. D.W.1 deposed that, the complainant and his son got drafted the building plan as per the requirement of the accused and copy of the said plan was also given to him. However, to substantiate his contention, accused has not produced the copy of said building plan to prove alleged transaction.
21. D.W.1 deposed that, even a Mason namely Raju knew about the alleged rental transaction between the parties to the case and cheques issued by accused in favour of the complainant towards returnable security deposit for the said building and once he informed said Ramu about the delay in occurred in completion of construction of the rooms. To substantiate his contention, accused has not examined aforesaid mason namely Raju.
22. D.W.1 further deposed that, in the meantime since neighbour of said locality, wherein the commercial building of the complainant was located have raised objection and opposed to open a Bar and Restaurant in SCH. No: 2 13 C.C No:17974/2017 that place as it was a residential area, so, he dropped said plan of setting up bar and restaurant business in that area. To substantiate his contention, he has not placed any material before the Court. Even the accused has not placed any positive evidence before the court to show at least, that he had obtained any CL-7 licence to run Bar and Restaurant at any place including the locality where the commercial building in dispute was situated.
23. According to accused, cheque in dispute along with 5 other cheques were issued to complainant in the month of January-2017 towards payment of deposit amount of Rs.60,00,000/-. The case in hand has been filed before this court in the month of June 2017. The evidence of Ramu H., -D.W.2 reveals that, cheque in dispute was issued by the accused in the month of November-2016. The evidence of accused regarding date of issuing cheques in favour of the complainant and his son by accused is not corroborating with the evidence of D.W.2.
SCH. No: 2 14 C.C No:17974/2017 The accused has failed to establish by placing cogent and corroborative evidence that cheque in question was issued by him in the month of January, 2017.
24. Perused the averments of the complaint. In the complaint it is stated that, cheque in dispute was issued by the accused in favour of the complainant in the month of October-2016. The evidence of D.W.2 depicts that, cheque in dispute was also issued by the accused in the year 2016. On the other hand, accused has deposed that, he issued the cheque in favour of the complainant in the year 2017, which is completely contradicting with the evidence of D.W.2.
25. Counsel for the complainant has cross-examined D.W.1 in detail. It is admitted fact that, statutory notice issued by the complainant after dishonour of the cheque was duly served on the accused. In cross-examination D.W.1 deposed that, he lodged complaint with the police about the misuse of cheque in dispute by the complainant SCH. No: 2 15 C.C No:17974/2017 herein after receipt of statutory notice. To substantiate his contention he has produced Complaint lodged against the complainant herein with Deputy Police Commissioner, dated:30.08.2017 at Ex.D.1-The request for transfer of case to Jayanagara P.S. Again in the year 2019 the accused herein has lodged complaint with Deputy Commissioner of Police against the complainant herein as per Ex.D.2 and 3. On the basis of previous complaint, the police notice was issued to the complainant by IO on 18.07.2017 as per Ex.D.4. The complainant has appeared before the concerned police, but he refused to give any statement before IO regarding the allegation of accused as per Ex.D.5-the report submitted by police concerned.
26. In Ex.D.5 it is reported that, the conduct of complainant herein was appears to be suspicious as he refused to give statement before the police during course of investigation and I.O. has opined that, cheque was issued towards payment of deposit amount of SCH. No: 2 16 C.C No:17974/2017 Rs.60,00,000/-, accordingly I.O. has prayed for transfer of the case to Jayanagara Police Station for further investigation. It is just and proper to discuss the value of the report submitted by I.O. as per Ex.D.5. In said report it has been mentioned that, accused has already given 'stop payment' request to the bank since complainant refused to hand over the cheques back to accused. Admittedly, no request for stop payment has been given by the accused to the bank and it is not in dispute. But in Ex.D.5 it has been mentioned that, accused has given a request to the bank to make 'stop payment' in respect of cheque in dispute, which was incorrect on the part of I.O.
27. Thus, it is clear before the court that, 1st investigating officer has not at all clearly examined the documents produced by the parties during the course of investigation. As per Ex.D.5 it is clear that, investigation of case has been transferred to Jayanagara Police Station in the year 2017 itself. It is significant to note that, since SCH. No: 2 17 C.C No:17974/2017 2017 till today, investigating officer has not submitted final report against the complainant on the basis of Ex.D.1 to 3-the complaint of the accused. Till today, the investigating officers have not completed the investigation in respect of Ex.D.1 to 3. There is no positive evidence before the court to believe that, complainant has cheated upon the accused by not returning cheques to him.
28. That on 06.05.2019, again the accused has lodged complaint with Deputy Commissioner of Police, Bengaluru South against the complainant herein as per Ex.D.2 and
3. No final report has been submitted by I.O. against the complainant alleging that, he has cheated upon the accused by retaining the cheques illegally.
29. There is no supportive evidence before the court to believe that, cheque in dispute was issued to complainant and his son towards payment of deposit amount of Rs.60,00,000/- as contended by the accused.
SCH. No: 2 18 C.C No:17974/2017
30. Ex.P.3-Statutory Notice was duly served on the accused on 26.04.2017 as per Ex.P.5-Postal Acknowledgment. However, no reply was given by the accused denying the contents of legal notice issued by the complainant.
31. The accused was well aware of the fact that, cheques in dispute were in the possession of the complainant herein. It is not clear before the court that, as to why he has not taken any steps to secure back the cheques from the custody of the complainant. No notice was also issued to the complainant prior to 22.03.2017 seeking for return of cheques. No intimation was also given to bank by the accused to stop the payment in caution, in case if cheque is presented by anybody.
32. Financial Capacity:- Accused has challenged the financial capacity of the complainant to lend Rs.30,00,000/-. It is admitted fact that, complainant is one of the partner in S.G.P. Developers which deals with SCH. No: 2 19 C.C No:17974/2017 real estate business. Admittedly this case has not been filed on behalf of S.G.P. Developers. The complainant has filed this complaint in hand in personal capacity. Therefore, Partnership Deed in respect of aforesaid S.G.P. Developers is not required. It is not the case of complainant that, he has withdrawn the money from the bank in order to give the same to the accused. Pw:1 clearly deposed that sufficient cash was kept in house at the time of alleged loan transaction. Therefore, question of producing the bank statement of complainant to show the withdrawal of the amount on the date of alleged loan translation does not arise at all.
33. It is not the case of the complainant that, he gave the amount belonging to the S.G.P. Developers to the accused. Therefore, resolution of the S.G.P. Developers permitting the complainant to pay amount to accused is not at all required.
SCH. No: 2 20 C.C No:17974/2017
34. It is an admitted fact that, complainant herein is one of the partner of S.G.P. Developers. It is an admitted fact that, complainant herein is the owner of Commercial Buildings situated at 5th Block in Jayanagara at Bengaluru. All these facts are sufficient to hold that, complainant had sufficient source of income and he was financially strong enough to lend money to accused.
35. Learned counsel for accused argued that, amount was not paid through cheque or D.D. and complainant has violated Sec.269 -SS of Income Tax Act. It is significant to note that, prosecution under Sec.138 of N.I. Act cannot be stalled for non-compliance of Sec.269-SS of I.T. Act. Any cash transaction in violation of Sec.269-SS of Income Tax Act may give rise to an independent criminal offence, but on account of violation of said provision, the prosecution of the accused for the alleged dishonour of cheque under Sec.138 of N.I. Act does not become bad in law. Non- compliance of Sec.269-SS of I.T. Act does not render the SCH. No: 2 21 C.C No:17974/2017 said debt unenforceable or precludes the lender from recovering the same. My reason is supported by the decision of Hon'ble High Court of Delhi reported in a case between Guddodevi @ Guddi Vs. Boopendrakumar (Crl. Revision Petition 1246 of 2019 dated: 11.02.2020) and decision of Hon'ble High Court of Karnataka reported in a case between Dr. M. Krishnashetty Vs. H.R. Nagabushan (W.P. No.29144 of 2018 dated:29.08.2018).
36. Therefore, the decision relied by the accused reported in Krishna Janardhan Bhat Vs. Dattathreya G. Hegde is not helpful for him on these aspect. Specifically, the aforesaid decision relied by the accused has been overruled by Three Judges Bench of Hon'ble Supreme Court of India in a case between Rangappa VS/. Mohan (2010 (11) SCC 441). In this case Hon'ble Apex Court has clearly observed that, while recording statement under Sec.313 of Cr.P.C. accused has not even given any satisfactory explanation as to how the cheque executed SCH. No: 2 22 C.C No:17974/2017 and signed by the him and came into the hands of the complainant.
37. Here in this case also, while recording statement under sec 313 of Cr.PC, accused has not given any satisfactory explanation as to why he issued cheque in question to complainant, nor he stated anything about issuance of cheque towards deposit amount of Rs.60,00,000/- to have the commercial building of complainant on rent.
38. The accused has relied on decision reported in a case between Basalingappa Vs. Mudibasappa and 2014 (4) KCCR 3661 SC. In above case, (Basalingappa Vs. Mudibasappa) the complainant of that case was a retired employee and his financial capacity was challenged by the accused. On the other hand, in this case, the complainant herein is a businessman and also one of the partner of S.G.P. Developers. Admittedly complainant is the owner of commercial shopping complexes at SCH. No: 2 23 C.C No:17974/2017 Jayanagara, Bengaluru. The facts and circumstances of the case in hand and above case referred by the accused are entirely different. Therefore, above case relied by the accused is not helpful to him to prove his defence.
39. The complainant has not filed any civil suit against the accused for recovery of debt on the basis of cheque in dispute. Moreover, in the case in hand, It is not the case of the complainant that, he borrowed the loan from third party in order to give it to the accused. The amount mentioned in the cheque was duly filled up by the accused himself and it is not in dispute. Admittedly accused has issued post dated cheque. Such being the case, the decision relied by the accused reported in 2015 (1) DCR 642 and 2012 (3) KCCR 2057 are not helpful to him to prove his defence.
40. It is not the case of accused that, he borrowed loan from the complainant and later he repaid it entirely.
SCH. No: 2 24 C.C No:17974/2017 Therefore, decision relied by the accused reported in 2014 (1) DCR 547 is not helpful his case.
41. Perused oral and documentary evidence of both parties. The accused has issued cheques for Rs.10,00,000/- each including cheque bearing No.111067 in favour of complainant and his son and it is admitted fact.
42. It is significant to note that, complainant has never admitted the landlord and tenant relationship between himself and accused, nor he admitted that he agreed to make alteration in commercial building belonging to him as per the request of the accused to run Bar and Restaurant. The accused has failed to rebut the presumption available in favour of complainant under Sec.139 of N.I. Act.
43. Much discussion is not required in this case to hold that, accused is guilty of the offence punishable under Sce.138 of N.I. Act, because, signature of accused SCH. No: 2 25 C.C No:17974/2017 appearing in cheque has been admitted by the accused. Moreover, he failed to establish the alleged misuse of cheque by placing cogent and corroborative evidence. The positive evidence adduced by Pw:1 inspires the confidence of the Court. The oral evidence of complainant is supported with documentary evidence. Therefore, it is clear before the court that, accused has committed the offence under Sec.138 of N.I. Act.
44. There is no rebuttal evidence to disbelieve the evidence of Pw:1. Hence, the evidence of the complainant has to be believed. The accused has issued above cheque bearing No.111067 to complainant, and also he failed to prove the alleged rental transaction as contended by him. It indicates that he has failed to rebut the presumption, which is in favour of complainant. As appreciated and discussed supra, the complainant has proved by placing convincing evidence to show that accused is due of payment of cheque amount. In view of SCH. No: 2 26 C.C No:17974/2017 sec. 139 of NI Act, it has to be presumed that a cheque is issued in discharge of any debt or other liability. Coming back to the facts in the present case, this court is of the view that the accused did not raise a probable defence. Accordingly, I answer point No.1 in the affirmative and point No.2 in the negative.
45. POINT No.3:- The Negotiable Instruments Act is a special enactment, and the provisions of the Act prevail over the general provisions contained in Code of Criminal Procedure. Therefore, keeping the relevant provisions of the Act in mind the sentence is to be passed. In the light of the reasons on the point No.1, I proceed to pass the following;
ORDER The accused is convicted under Section 255 (2) of Cr.P.C., for the offence punishable under Section 138 of the Negotiable Instruments Act, and he is sentenced to pay a fine of Rs.10,05,000/- (Rupees Ten Lakh and SCH. No: 2 27 C.C No:17974/2017 Five Thousand only). In default to pay fine the accused shall undergo simple imprisonment for a period of three months.
Further, acting under Section 357(1)(a) of Cr.P.C., out of fine amount of Rs.10,05,000/- a sum of Rs. 5,000/- (Rupees five thousand only), shall be defrayed as prosecution expenses to the state.
Further, acting under Section 357(1)(b) of Cr.P.C., a sum of Rs.10,00,000/- (Rupees Ten Lakhs only), amount on recovery of fine shall be paid as compensation to the complainant.
Bail bond of the accused and that of surety shall stand cancelled.
Supply a free copy of this Judgment to the accused.
(Dictated to the stenographer on official laptop, typed by her, corrected, signed, then pronounced by me in open court on this the 29th July, 2022) (Shainey. K.M.) VI Addl. Judge and ACMM., Court of Small Causes, Bengaluru.
SCH. No: 2 28 C.C No:17974/2017
:ANNEXTURE:
LIST OF WITNESSES EXAMINED BY THE COMPLAINANT:
P.W.1 : Sri. H.P. Lakshmana Reddy.
LIST OF DOCUMENTS MARKED ON BEHALF OF COMPLAINANT:
Ex.P.1 : Original Cheque dt:20.03.2017.
Ex.P.1(a) : Signature of the accused. Ex.P.2 : Bank Memo dt:28.03.2017. Ex.P.3 : Copy of Legal Notice dt:25.04.2017. Ex.P.4 : Postal Receipt. Ex.P.5 : Postal Acknowledgment.
LIST OF WITNESSES EXAMINED BY THE ACCUSED:
D.W.1 : Sri. T.R. Ramachandra. D.W.2 : Sri. Ramu H.
LIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
Ex.D.1 : True copy of requisition dt:30.08.2017 issued by the Assistant Commissioner of police, Bengaluru.
Ex.D.2 : True copy of complaint lodged by the
accused against complainant and
Surendranath to Deputy Commissioner of Police, Bengaluru South Division, Bengaluru.
SCH. No: 2 29 C.C No:17974/2017
Ex.D.3 : True copy of complaint lodged by the
accused against complainant and
Surendranath to Assistant Commissioner of Police, Bengaluru.
Ex.D.4 : True copy of police notice issued by the Assistant Commissioner of Police, Myco Layout to complainant and Surendranath.
Ex.D.5 : True copy of requisition dt:30.08.2017 issued by the Assistant Commissioner of Police, Bengaluru.
(Shainey. K.M.) VI Addl. Judge and ACMM., Court of Small Causes, Bengaluru.