Bangalore District Court
Sri. Vipul P. Parekh vs Sri. K.T. Goverdhan on 29 June, 2019
IN THE COURT OF XXI ADDL.CHIEF METROPOLITON
MAGISTRATE, BENGALURU CITY
Present: Sri. V. NAGARAJA, B.A., LL.B.,
XXI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Dated this the 29th day of June, 2019
C.C. No.9125/2015
COMPLAINANT: Sri. VIPUL P. PAREKH
S/o. Prataprai R. Parekh,
Aged about 44 years,
Shree Mahalakshmi Sales Corporation,
Shop No.G23, No.211/214,
Shankar Complex,
Sultanpet,
Bengaluru - 560 053.
(Reptd. By: TM., Advocate)
V/s.
ACCUSED: Sri. K.T. GOVERDHAN
S/o. K.G. Tulsiram,
Major,
R/at. No.2, 1st Main Road,
2nd Block, III Stage,
Basaveshwaranagara,
Bengaluru - 560 079.
(Reptd. By: PRH., Advocate)
:JUDGMENT:
Complainant has filed this complaint under Section 200 of Cr.P.C. r/w Section 138 of N.I. Act, seeking for penalizing the accused for the offence punishable under 2 C.C.No.9125/2015 Section 138 of N.I. Act and also for awarding compensation to him.
2. Case of the complainant in a nutshell is that:
Accused is the owner of the property bearing No.5, premises No.135/5, Tulsi Complex, Sulthanpet, Bengaluru and complainant is the tenant under the accused and they had entered into an agreement of lease dated 01.02.2005 and complainant had paid Rs.4,00,000/- to accused as advance lease amount. Thereafter, during the lease period, the complainant had vacated the said premises and handed over the possession to the accused and he requested the accused to return of advance amount of Rs.4,00,000/-. So, in order to discharge the above said liability, the accused has issued him cheque bearing No.000007 dated 06.10.2014 for Rs.2,25,320/- drawn on Kotak Mahindra Bank., Levelle Road Branch, Bengaluru towards part payment and assured to honour the said cheque and agreed to repay the balance amount by cash after encashment of the above said cheque. So, believing the words of accused, on 31.12.2014, he presented the above said cheque through his banker i.e., Corporation Bank, S.C. Road Branch, Bengaluru. But said cheque was 3 C.C.No.9125/2015 dishonoured for the reason "Funds Insufficient" in the account of accused. So, the bank authorities issued endorsement dated 02.01.2015. So, he got issued legal notice dated 21.01.2015 to accused regarding dishonour of cheque and calling upon the accused to pay cheque amount, whereas said notice has been duly served on accused on 23.01.2015, but accused has failed to pay the cheque amount. Hence, accused has committed offence punishable U/s.138 of NI Act. Hence, he is constrained to file this complaint seeking for penalizing the accused for the offence punishable under Section 138 of N.I. Act., and also seeking for awarding of compensation to him.
3. In pursuance of summons issued by this court, accused made appearance through his counsel and obtained bail and now he is on bail.
4. As these proceedings are summary in nature, substance of accusation read over and explained to accused in language known to him whereas, he pleaded not guilty and claimed for trial.
5. In order to prove the case of the complainant, he has been examined as PW-1 and got documents marked 4 C.C.No.9125/2015 Ex.P-1 to Ex.P-6. After completion of evidence of complainant, statement of accused as specified U/s.313 of Cr.P.C., has been recorded and he has been examined as DW-1.
6. I have heard arguments of both learned counsels, whereas learned counsel for complainant also filed written his arguments.
7. Perused the records.
8. After perusal of records, the points arise for my consideration are:
1) Whether complainant proves beyond all reasonable doubt that accused in order to discharge his legally enforceable debt that is to say towards part payment of lease amount of Rs.4,00,000/-, he has issued him a cheque bearing No.000007 dated 06.10.2014 for Rs.2,25,320/- drawn on Kotak Mahindra Bank., Levelle Road Branch, Bengaluru?
2) Whether complainant further proves that he has complied with mandatory requirements as specified under Section 138 of N.I. Act?
3) What Order?
9. My findings on the above points are:
Point No.1 : In the Affirmative
Point No.2 : In the Affirmative
Point No.3 : As per final order,
for the following:
5 C.C.No.9125/2015
REASONS
10. Point No.1: As I have already stated, in order to prove the case of the complainant, he has been examined as PW-1 and he filed his examination-in-chief by way of affidavit by reiterating entire complaint averments as stated above. In support of his oral testimony, he relied upon Ex.P-1 to Ex.P-6.
11. On the other hand, accused has been examined as DW-1.
12. Before appreciation of evidence of both parties, I am of the opinion, it is worth to note presumptions envisaged in N.I. Act as well as ratio laid down by the Hon'ble Apex Court in Three Judges Bench Judgment reported in (2010) 11 SCC 441 (Rangappa V/s. Sri Mohan) wherein it is held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent /complainant."
It is further held:
6 C.C.No.9125/2015
Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
13. So in the light of above presumptions and ratio decidendi laid down by Hon'ble Apex Court, if the present facts and situations are analyzed, it is obvious that according to complainant, accused has issued cheque for discharging of his lease liability. On the other hand, on considering the stand taken by the accused in his evidence, it is obvious that though he disputes his liability as claimed by complainant, but he is not disputing the facts that cheque is belonged to his account and it bears his signature. So, as I have already stated in view of ratio laid down by Hon'ble Apex court in the Judgments stated supra, that as soon as accused admits the facts that cheque is belonged to his account and it bears his signature, then the mandatory presumption u/S 139 of N.I. Act comes to the aid of complainant and he can rest upon said presumption.
7 C.C.No.9125/2015
14. Whereas, learned counsel for defence argued that in order to raise presumption U/s.138 of NI Act, the condition precedent is that complainant must prove the existence of legally recoverable debt or liability, if he is able to prove the same, then only presumption can be raised otherwise not.
15. Having regard to the arguments of learned counsel for accused, it is important to note as I have already pointed out Hon'ble Three-Judges Bench Judgment of Hon'ble Supreme Court in Rangappa's case stated supra, it is clearly held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally recoverable debt or liability"
16. So when above ratio clearly states that presumption includes existence of legally enforceable debt or liability then further proof of that fact is not required that too in summary proceedings. Because Hon'ble Apex Court in the judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets) has clearly observed that:
Presumption literally means "taking as true without examination or proof"8 C.C.No.9125/2015
17. At this juncture, it is also worth to note ratio laid down by Hon'ble Apex Court in the judgment reported in (2014)5 SCC 590 (Indian Bank Association and others V/s. Union of India and others) wherein it is held by reiterating Section 143 of Negotiable Instruments Act and Section 264 of Cr.P.C., that:
"Section 264, Judgments in cases tried summarily - In every case tried summarily in which the accused does not plead guilty, the Magistrate shall record the substance of the evidence and a judgment containing a brief statement of the reasons for the finding"
"Thus, the Magistrate is not expected to record full evidence which he would have been, otherwise required to record in a regular trial and his judgment should also contain a brief statement of the reasons for the finding and not elaborate reasons which otherwise he would have been required to record in regular trials"
18. So, in the light of above ratio decidendi and in view of Section 143 of Negotiable Instruments Act and Section 264 of Cr.P.C., as this case is summary case, I am of the opinion it is not necessary to discuss elaborately with respect to legally enforceable debt when presumption 9 C.C.No.9125/2015 includes existence of legally recoverable debt as held in the above said judgment of Hon'ble Apex Court. So, the mandatory presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is to say the cheque was not issued for consideration and in discharge of any debt or liability, in other words, onus shifts on the accused to rebut the said mandatory presumption raised in favour of complainant as observed by Hon'ble Apex Court in the Judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets).
Now the crucial question arises as to whether accused is able to rebut the said presumption or not?
19. It is significant to note on considering the defence of the accused, he contended that though the complainant entered into lease agreement on 01.02.2005 for ten years and deposited advance amount of Rs.4,00,000/- and agreed to pay monthly rent of Rs.8,000/- and rent will be enhanced 10% every three years. But, complainant was irregular in paying monthly rents and he was also irregular in paying electric bills. Moreover, he has not kept his premises in proper condition as agreed in the lease agreement, but he caused 10 C.C.No.9125/2015 damage to interiors of the building. So, he requested the complainant to vacate the premises and hand over the same to him after adjusting the due rents, due electricity bills and damage caused to his building. Whereas complainant refused to pay the same and he illegally demanded to pay entire lease security deposit amount of Rs.4,00,000/- though he was due of arrears of rents and electricity bills. So, he refused to give entire Rs.4,00,000/-. So, on the intervention of father of the complainant, negotiations had taken place and complainant had agreed to receive Rs.1,80,000/- as a full and final settlement after deducting balance arrears of rent, electricity bills and damage caused to his premises. But, later he demanded for issuance of cheque for Rs.2,25,320/- by assuring that he would return said cheque if accused pay settlement amount of Rs.1,80,000/- . Believing the words of the complainant, he issued cheque for Rs.2,25,320/-. Later the accused requested the complainant to return the cheque by receiving settlement amount of Rs.1,80,000/-, but complainant in order to grab more money and to harass him, he has misused said cheque and filed this false compliant. 11 C.C.No.9125/2015 Hence, said complaint is liable to be dismissed and he may be acquitted.
20. In support of above defence, learned counsel for accused argued that accused is still ready to agreed amount of Rs.1,80,000/- in installments, but the complainant only with an intention to harass the accused, he is persuating this case. Hence, accused may be acquitted.
21. Per contra, learned counsel for complainant in his written arguments as well as oral arguments, he submitted that that accused has already filed memo dated 15.12.2015, by admitting the lease liability amount and cheque amount. So, now in order to escape from the liability, he is taking such contrary contentions. Hence, his contention has to be rejected and he may be convicted and maximum sentence may be imposed as complainant suffered huge financial loss due to money held up in the hands of accused.
22. Having regard to the defence of the accused and arguments of his learned counsel, it is worth to note ratio 12 C.C.No.9125/2015 decidendi laid down Hon'ble Apex Court in very Rangappa V/s. Sri. Mohan's case, it is clearly observed 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. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court"
23. At this juncture, it is worth to note ratio decidendi laid down by the Constitution Bench of Hon'ble Apex Court in the judgment reported in AIR 1964 SC 575 (Dhanvantrai Balwantrai Desai V/s. State of Maharashtra) which has been followed in the subsequent judgment reported in (2001)6 SCC 16 (Hiten P.Dalal V/s. Brathindranath Banerjee) wherein it is held that:
"That the distinction between the two kinds of presumption lay not only in the mandate to the court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption 13 C.C.No.9125/2015 "The burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation is offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible"
24. At this juncture, it also worth to note in another judgment of Hon'ble Apex Court reported in (2010)8 SCC 383 (Meghmala and others V/s. Narasimha Reddy and others) wherein it is held that:
"It is not like any other criminal case where the accused is presumed to be innocent unless the guilt is proved. The presumption of innocence is a human right, however, subject to the statutory exceptions, the said principle forms the basis of criminal jurisprudence. For this purpose, the nature of offence, its seriousness and gravity thereof has to be taken into consideration. Statutes like the Negotiable Instruments Act, 1881; the Prevention of Corruption Act, 1998; and the Terrorist and Disruptive Activities (Prevention) Act, 1987, provide for 14 C.C.No.9125/2015 presumption of guilt if the circumstances provided in those statutes are found to be fulfilled and shift the burden of proof of innocence on the accused. Thus, the legislature has adopted a deviating course from ordinary criminal law shifting the burden on the accused to prove that he was not guilt"
25. So from the above ratio, it is crystal clear that proceedings U/s.138 of NI Act is not like any other criminal case where the accused is presumed to be innocent unless the guilt is proved. On the other hand the legislature has adopted a deviating course from ordinary criminal law by shifting the burden on the accused to prove that he is not guilty. So, the accused must rebut the mandatory presumption by raising probable and acceptable defence to the satisfaction of the court, because the presumption raised in favour of complainant is mandatory presumption, but not general presumption.
26. In the light of above ratio decedendi, if the present facts and situations are analyzed, as I have already pointed out accused is not disputing the fact that he has receiving Rs.4,00,000/- as a advance under lease agreement dated 01.02.2005. It is also not in dispute that he has issued present cheque for Rs.2,25,320/-, but his 15 C.C.No.9125/2015 only contention is that complainant was due of arrears of rent and electricity bills as well as building damages amount. So, after negotiations, the complainant agreed to receive Rs.1,80,000/- as full and final settlement amount out of Rs.4,00,000/- advance amount. So, he is not liable to pay cheque amount of Rs.2,25,320/-. It is significant to note though he contended so, that is complainant was due of arrears of rent, electricity bills and damages, so he agreed to receive only Rs.1,80,000/- as full and final settlement, but he has not placed any cogent and convincing evidence to prove his above said contention. On the other hand, admittedly the accused has filed memo dated 15.12.2015 stating that he is ready pay cheque amount of Rs.2,25,320/- to complainant in five monthly installments. So, this fact establishes that accused has admitted the cheque liability. So, under such circumstances, his version that he was liable to pay only Rs.1,80,000/- cannot be believable and acceptable.
27. As I have already pointed that Hon'ble Apex Court in the Constitution Bench and Larger Bench Judgments stated supra, it is clearly held that presumption envisaged U/s.138 of NI Act is not general 16 C.C.No.9125/2015 presumption but it is mandatory presumption, so the said presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible". So, I come to clear conclusion that accused has utterly failed to rebut the mandatory presumption raised in favour of complainant. Hence, I hold this point in Affirmative.
28. Point No.2: As I have already discussed in point No.1 that accused has issued cheque for discharging of his legally recoverable debt. Whereas, on perusal of bank endorsement given by bank authority clearly reveal that complainant had presented the said cheque within validity period, but said cheque was dishonoured with endorsement "Funds Insufficient" in the account of accused. On perusal of Ex.P-3 which is legal notice issued to accused clearly reveal that the complainant got issued said demand notice to accused within specified time of 30 days from the date of receiving of endorsement from bank. On perusal of postal document Ex.P-5, clearly reveals that the demand notice has been duly served on correct address of the accused.
29. So on considering the oral coupled with the documentary evidence of the complainant, they clearly 17 C.C.No.9125/2015 proved that complainant has complied with mandatory requirements as specified U/s.138(a) and (b) of N.I. Act. Whereas, accused has not paid the cheque amount within specified time, inspite of service of demand notice. Hence, accused has committed offence punishable U/s.138 of NI Act. Hence, I hold point No.2 in Affirmative.
30. Point No.3: For the foregoing reasons discussed on points No.1 and 2, I proceed to pass the following:-
ORDER Acting under Section 255(2) r/w 264 of Cr.P.C., the accused is hereby convicted for the offence punishable u/S.138 of Negotiable Instruments Act.
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
On considering the facts and circumstances of the case, accused is hereby sentenced to pay fine of Rs.2,30,000/- (Two Lakhs and Thirty Thousand only). In default he shall undergo simple imprisonment for a period of 2 (Two) months.
In view of Section 357 of Cr.P.C., complainant is entitled for compensation of Rs.2,26,000/- (Two Lakhs and Twenty Six Thousand only) out of above said fine amount.
After collecting the above fine amount, office is directed to pay Rs.2,26,000/- (Two Lakhs and Twenty Six Thousand only) to 18 C.C.No.9125/2015 complainant as compensation and defray remaining fine amount of Rs.4,000/- (Four Thousand only) to state, after appeal period is over.
However, accused shall execute personal bond of Rs.2,30,000/- in view of Sec.437(A) of Cr.P.C.
The office is hereby directed to supply the copy of this Judgment to the accused on free of cost.
(Directly dictated to Stenographer on computer, computerized by him, corrected and then pronounced by me in the open court on this the 29th day of June, 2019) (V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW-1 : Vipul P. Parekh LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P-1 : Cheque
Ex.P-2 : Bank Endorsement
Ex.P-3 : Copy of Legal Notice
Ex.P-4 : Postal Receipt
Ex.P-5 : Complaint-Settled Reply
Ex.P-6 : Lease Agreement
LIST OF WITNESSES EXAMINED FOR THE DEFENCE:
DW-1 : K.T. Goverdhan LIST OF DOCUMENTS MARKED FOR THE DEFENCE:
- Nil -
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.