Bangalore District Court
The Bangalore vs Mr.K Venkatesh on 7 December, 2016
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 7th day of December 2016
:PRESENT:
SMT.SHEILA B.M. M.Com. LL.M.
XXVI Addl.C.M.M., Bangalore City.
JUDGMENT U/S 355 OF Cr.P.C
Case No. : C.C No.9742 /2016
Complainant : The Bangalore, Bangalore Rural
and Ramanagaram Dsitrict,
Central Co-operative Bank Ltd.
Head Office Branch
Represented by its Supervisor
Sri. S C Gopalkrishna
(By Sri.TSC - Adv.)
Accused : Mr.K Venkatesh
Superident
1 Kar Armd SQN NCC
8, Cunningham Road,
Marketing Federation Building
Bangalore-52
(By Sri. KBG - Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Final Order : Accused is acquitted
Date of Order : 07.12.2016
2 C.C.No.9742 of 2016
The complainant has filed this complaint against the
Accused for the offence punishable u/s 138 of Negotiable
Instruments Act.
2. The Complainant has stated that the accused had
availed of Rs.1,30,000/- on 17.03.2011. The accused is the
chronic defaulter. When the Complainant demanded for
outstanding loan amount the accused issued cheque dated
22.01.2016for a sum of Rs.1,47,600/-. When the said cheque was presented it was returned dishonour as "Funds insufficient" on 27.01.2016. Legal notice was issued on 20.02.2016 the accused having received the notice has not replied nor paid the cheque amount. Hence the complaint.
3. On presentation of the complaint, cognizance and statement of the Complainant was recorded and case was ordered to register against the accused for the offence punishable u/s 138 of Negotiable Instruments Act. Notice was sent to the accused.
4. The accused appeared before the court through his counsel and was enlarged on bail. Copies of the papers were furnished to him as required u/s 207 of Cr.P.C. The 3 C.C.No.9742 of 2016 summons and the substance of the accusation for the offence punishable u/s 138 of Negotiable Instruments Act was read over and explained to the accused. The accused pleaded not guilty and claimed trial.
5. The Complainant has examined its authorized person as PW1 and got marked Ex-P1 to P10. After closing the Complainant side, the statement of the accused u/s 313 of Cr.P.C. was recorded and the accused has denied the incriminating evidence against him. The accused examined himself as DW1 and got marked Ex-D1 to D8.
6. Heard arguments.
7. The points that arise for consideration are as under:
1) Whether the accused proves that, cheque bearing No.651428 dated: 17.03.2011 was not issued in discharge of any legally recoverable debt in favour of the Complainant?
2) Whether complaint is maintainable?
3) What order?
8. My findings on the above points are as under:
Point No.1 : In the affirmative, Point No.2 : In the negative Point No.3 : As per the final order for the following: 4 C.C.No.9742 of 2016
REASONS POINT NO.1:
9. It is undisputed fact that Ex-P3 cheque pertain to the account of the accused and when the said cheque was presented it has been dishonoured as "Funds insufficient" in the account of the accused.
10. Once the cheque relates to the accused and his signature on the said cheque is proved an initial presumption as contemplated u/s. 138 of Negotiable Instruments Act has to be raised by the court in favour of the Complainant. Sec. 139 of the Negotiable Instrument Act contemplates that it shall be presumed unless contrary is proved that the holder of the cheque received the cheque of the nature referred to in the Sec.138 for the discharge of the whole or in part any debt or liability. The presumption referred to u/s 138 of Negotiable Instruments Act is mandatory presumption and in 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 circumstances. But the fact remains 5 C.C.No.9742 of 2016 that mere plausible explanation is not expected from the accused and it must be more than plausible explanation by way of rebuttal evidence. In other words the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court.
11. The accused has stated that he had not issued any cheque for the discharge of any loan or liability but the cheques were taken before sanction of the loan and he was assured that the cheques were for security purpose. The accused substantiate that the he had given Ex-P3 cheque as security before sanction of the loan has not produced any documents in this regard nor he has examined witness in support of his contention. Only on the oral say of the accused it is not possible to come to conclusion that Ex-P3 is the security cheque.
12. The accused has stated without prior intimation to him the Complainant has presented the cheque for clearance. The date of the cheque and the amount was not mentioned and they have been entered by the bank officials as per their convenience ; that on the date of cheque he was working in 6 C.C.No.9742 of 2016 the office and had not issued the above said cheque on that date.
13. The position in law has been explained in the judgment of the Division Bench of the Kerala High Court in Lillukutty v. Lawrance 2003(2) DCR 610 in the following words.
In the instant case, the signature is admitted. According to the drawer of the cheque, amount and the name has been written not by the drawer but by somebody else or by the payee and tried to get it encashed. We are of the view, by putting the amount and the name there is no material alternation on the cheque under section 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date. There is no rule in banking business that payee's name as well as the amount should be written by drawer himeslef. In the instant case bank has never found that the cheque was tampered with or forged or there is material alteration or that the handwriting by which the payees name and the amount was written was differed. The bank was willing to honour the cheque if sufficient funds were there in the account of the drawer even if the payees name 7 C.C.No.9742 of 2016 and the amount was written by somebody else other than the holder of the account or the drawer of the cheque. The mere fact that the payee's name and the amount shown are not in the handwriting of the drawer does not invalidate the cheque. No law provides in the case of cheques the entire body has to be written by the drawer only. What is material is the signature of the drawer and not the body of the instrument. Therefore when the drawer has issued the cheque whether the entire body was written by the drawer written beyond the instructions of the drawer, whether the amount is due or not, those and such matters are defenses which drawer has to raise and prove it. Therefore the mere fact that the payee's name and the amount shown in the cheque are in different handwriting is not a reason for not honouring the cheque by the bank.
Banks would normally see whether the instrument is that of the drawer and the cheque has been signed by the drawer himself. The burden is therefore entirely on the drawer of the cheque to establish that the date, amount and the payee's name are written by somebody else without the knowledge and consent of the drawer.
8 C.C.No.9742 of 2016
The said decision applies to the case on hand. In the instant case, the drawer of the cheque has not discharged the burden. Apart from the interested testimony of the drawer, no independent evidence was adduced to discharge the burden.
14. The accused has contended that at the time execution of the loan documents the bank had instructed him to get the undertaking letter from the drawing officer of his office. He got the undertaking letter from his office and submitted it to the Complainant and requested the bank to send the letter to his office to deduct the loan amount from his salary account and send it to the Complainant bank. However, during cross-examination it is elicited that he had orally requested to send the letter to the drawing officer to deduct the EMI from salary and remit it to Complainant's account. From the record it is clear that even though the loan availed is salary loan the amount of Installment was not deducted from the salary of the accused. Accused admits that in Ex-P8 loan application it is not specifically mentioned that the EMI will have to be deducted from his salary and remitted to Complainant's account. Merely because EMI has not been 9 C.C.No.9742 of 2016 deducted from the account of the accused it does not absolve the accused from the liability to pay the loan.
15. The accused has stated that Ex-P3 cheque is non CTS cheque ; that non CTS cheque is not allowed for clearance in all week days and the bank should clear these cheques weekly once through special account. It is stated that the Complainant has not followed the procedure of the RBI guidelines. Merely because Ex-P3 cheque is non CTS cheque it cannot be said that the said cheque is not presentable and is not negotiable.
16. It is argued that in loan application Ex-P8 page No.5 except the signature of the accused remaining columns are kept blank and page No.9 except the signature of the guarantor other contents have not been filled. It is seen that the Ex-P8 has not been completely filled but Ex-P8 page No.8 loan agreement has been executed by the accused and the accused in his evidence has admitted about the receipt of the loan amount.
17. The accused has stated that due to his daughters marriage he spent nearly Rs.10 lakhs for marriage expenses, 10 C.C.No.9742 of 2016 he borrowed loan from private person at 30% p.a. due to financial constraints he could not pay the Installment to the Complainant bank and so he defaulted in making payment. He had paid 60,000/- to 65,000/- to the bank but as per the loan account the total balance as on 06.04.2016 is shown to be Rs.1,47,600/-. In this regard the Complainant had produced receipt as per Ex-D1 to D8. As per the documents the accused had paid about Rs.65,300/-.
18. The case of the accused is that the account statement is not reflecting the correct picture. The statement is from 31.03.2014. As per documents produced by the accused upto 31.03.2014 the accused has paid Rs.42,300/-. Ex-P8 discloses the monthly installment is Rs.2,167/- with interest at 14.5% p.a. i.e. approximately it would be Rs.3737/- (2167+1570). Approximately the accused has paid 11 installments. The principle amount paid would be Rs.23,837/- and the interest paid would be Rs.17,270/-. The balance brought forward as on 31.03.2014 is Rs.1,13,787/-. As per Ex-P9 the balance ought to be approximately Rs.1,06,163/-. As the Complainant has not produced the entire account statement 11 C.C.No.9742 of 2016 nor has produced the statement with regard to the interest, it can be said that the Complainant failed to prove with cogent and convincing evidence there is legally recoverable debt of Rs.1,47,600/- as on 22.01.2016.
19. In (2014) 10 SCC 473 the Hon'ble SC in Anvar P V vs P K Shabeer and others has held "In the above case copy of the statement pertaining to electronic record in evidence not being the original electronic record was produced it was held such statement has to be accompanied by a certificate as specified in sec. 65B 4 - essential ingredients of such certificate enumerated. Hence the certificate accompanied electronic record VCD, pendrive, etc. which contains the statement which sought to be given as secondary evidence when the same is produced in evidence. I --in absence of such certificate secondary evidence of electronic record cannot admitted in evidence."
20. The said decisions applies to the case on hand. In the present case the account statement Ex-P9 is not accompanied with certificate as provided u/s 65B (4) of Indian Evidence Act. As such secondary evidence of the account statement which is a computer statement cannot be looked 12 C.C.No.9742 of 2016 into. The Complainant has failed to prove with cogent and convincing evidence that as on the date of cheque the accused was liable to pay Rs.1,47,600/-.
21. The presumption u/s 118 and 139 of the Act would stand rebutted in view of the discussion made in para no.17 to 20 The Complainant has not placed any other acceptable evidence hence point for consideration is answered in the affirmative. In view of the above discussion point no.1 is answered in the affirmative.
POINT No.2
22. The accused has stated that there is no board resolution authorizing the Complainant to file the complaint and so the complaint is not maintainable.
23. The complaint has been filed by Gopalkrishna SC, Branch Supervisor. He has given evidence in the case and has stated that he is authorized person. The Managing Director of the bank has been dully authorized by the board to take action to file criminal complaints. In support of the said contention he has produced the byelaw of the bank as per Ex- P1 and authorization as per Ex-P2. Ex-P2 discloses that the 13 C.C.No.9742 of 2016 Chief Executive Officer has authorized S C Gopalkrishna working as Supervisor to present complaint and represent the bank. The duties and powers of the Managing Director have been mentioned in page 42 of the byelaw. Sl.No.10 authorizes the Managing Director.
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24. In the present case the Managing Directors has not given authority to Gopalkrishna to conduct the case. The Chief Executive Officer has given authority to Gopalkrishna to conduct the case. No documents has been produced to show that the Managing Director or board has given power to Chief Executive Officer to sub delegate power to Gopalkrishna nor documents has been produced to show the Managing Director and Chief Executive Officer are one and the same person.
25. In ILR 2014 page 2168 our Hon'ble High Court has held "The complaint instituted by the appellant in the Trial 14 C.C.No.9742 of 2016 Court is not maintainable for the sole reason that X who has signed the complaint has no authority in law to represent the company as there is no resolution by the company authorizing 'X' to file the complaint.
26. In ILR 2007 Kar 5162 - Om Shakti SC/ST And Minority Credit Co-operative Society Ltd. vs. Venkatesh. Our Hon'ble High Court has held that the presentation of the complaint by the society through its President without authorization is bad in law. The complaint is not maintainable.
27. In CRRP No.129/2013 George Joseph vs. HMT International Ltd. our Hon'ble High court has observed, Delegations of power can only be by resolution of board of directions. Hence letter of authorization or POA executed by the Chairman or other officers of the company without delegation of the power to institute such proceedings having emanated from the board of directors would invalidate any proceedings brought without the necessary authority. This lack of authority could have been supplied even before the appellate court when the issue arose for consideration. 15 C.C.No.9742 of 2016
28. The principles laid down in the said decision apply to the case on hand. The Complainant has not produced the resolution of the Board of Directors authorizing the Chief Executive Officer to delegate power so as to enable him to present the complaint and tender evidence in court on behalf of the bank. As the complaint has been filed and evidence also has been given without proper authorization the Complaint is bad in law and is not maintainable. Hence the point for consideration is answered in the negative. POINT NO.3
29. In view of the affirmative finding on point No.1 and negative findings on point No.2 the complaint is not entitled for the relief sought for. In the result I proceed to pass the following ORDER.
Acting u/s 255(1) of Cr.PC the accused is acquitted for the offence u/s138 of NI Act..
Bail bonds shall be in force for a period of 6 months as provided u/s 437A Cr.Pc.
(Dictated to the Stenographer, transcribed and computerized by her, corrected and then pronounced by me in the open court on this the 7th day of December 2016) (SHEILA B.M.) XXVI ACMM, Bangalore City.
16 C.C.No.9742 of 2016ANNEXURE Witnesses examined for the Complainant:
PW.1 S C Gopalkrishnan Witness examined for the accused: DW1 K Venkatesh
List of Documents marked for the Complainant:
Ex. P1 Bye law. Ex. P2 Authorization. Ex. P3 Cheque. Ex. P3(a) Signature of the accused on the cheque. Ex. P4 Endorsement. Ex. P5 Notice. Ex. P6 RPAD receipt. Ex. P7 RPAD acknowledgement. Ex. P8 Loan application. Ex. P9 Account Statement. Ex. P10 Complaint.
List of Documents marked for the accused:
Ex-D1 to D8 : Receipts
XXVI ACMM, Bangalore