Bangalore District Court
M/S Shri Ram Transport Finance Co Ltd vs Shivakumar.B.V on 3 May, 2024
KABC030073622021
IN THE COURT OF THE XXV ADDL. CHIEF METROPOLITAN
MAGISTRATE, AT BANGALORE
Dated this the 3rd day of MAY 2024
Present:
SMT SUJATA SIDAGOUDA PATIL,
B.SC.,LL.B.
XXV Addl. Chief Metropolitan Magistrate,
Bangalore.
CC NO.2187/2021
Complainant : M/s.Shriram Transport Finance Co.Ltd,
No. 29/A, II floor ,
KH Road,
Bengaluru 27.
Rep. By its Legal Executive PA Holder
Mr..Girish.K.V
(By Smt.SM Advocate )
V/s
Accused : Mr.Shivakumar.B.V
No.49, 11th Cross, Vidya Peeta
Road, Kengeri, Near Ganga
Bhavani Temple, Bangalore South
Bangalore South
Bengaluru
(By Sri VS - Advocate)
1. Date of Commencement 07.09.2019
of offence
2. Date of report of offence 04.11.2019
3. Name of the M/s Shriram Transport Finance Co.
Complainant Ltd.
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CC NO.2187/2021
4. Date of recording of 02.12.2023
evidence
5. Date of closing of 21.12.2023
evidence
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused is Convicted
8. Complainant Smt.SM Advocate
Represented by
9. Accused defence by Sri.VS- Advocate
JUDGMENT
The complainant filed the complaint under Sec.200 Cr.P.C. against the accused for the offence punishable under Sec.138 Negotiable Instruments Act (For short N.I.Act).
2. The brief facts of the case is as under:
The complainant company is engaged in the business of providing financial facilities under hire purchase scheme for vehicles. The accused is one of the customers of the complainant and entered into hire purchase agreement with the complainant for purchase of vehicle name TATA LPT 1109 FBTT bearing No.KA 417792 vide agreement No.THRKE0703270005 dt.28.03.2017. Subsequently, the accused defaulted in making payment to the complainant company and on repeated request from the complainant and in response to the demand made by the complainant, the accused issued a cheque bearing No.775522 dt.07.09.2019 for a sum of Rs.3,16,000/ drawn on Indian Bank, 3 CC NO.2187/2021 Kengeri Branch, Bengaluru in favour of the complainant. The complainant presented said cheque for realization through its banker i.e., Standard Chartered Bank, Koramangala branch, Bangalore, same was dishonored for the reason "Funds Insufficient", subsequently, the complainant issued legal notice 13.09.2019 to pay the outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused. Hence, this complaint.
3. After filing of the complaint, cognizance taken and recorded the sworn statement of the complainant. The complainant has complied all the statutory requirements under Sec.138 of N.I.Act. Thereafter, the case is registered against the accused and summons issued. The accused appeared with the Advocate and released on bail. Copy of the complaint furnished to the accused. Plea recorded and read out to the accused. The accused pleaded not guilty and claimed to be tried.
4. In support of the complainant's case, the General Power of Attorney Holder of the complainant company got examined as PW1 got marked Ex.P.1 to Ex.P.17. After closure of the evidence of the complainant, 313 Cr.P.C statement of the accused has been recorded. The accused denied the incriminating 4 CC NO.2187/2021 evidence placed by the complainant. The accused got examined as DW 1 and no documents were got marked on his behalf.
5. Heard arguments and perused the material on record.
6. On the basis of the contents of the complaint the following points arise for my consideration. :
1. Whether the complainant proves beyond reasonable doubt that the accused issued cheque bearing No.775522 dt.07.09.2019 for a sum of Rs.3,16,000/drawn on Indian Bank, Kengeri branch, Bangalore in favour of the complainant towards discharge of legal liability ?
2. Whether the complainant proves beyond reasonable doubt that the accused has committed the offence punishable under Sec.138 of N.I.Act?
3. What order ?
7. My findings to the above points are as follows:
Point No.1&2 In the Affirmative.
Point.No.3 : As per final order for the following:
REASONS
8. Point Nos.1 & 2: Both these points are interconnected with each other. In order to avoid repetition of facts, both the points have been taken up together for consideration.
9. The case of the complainant is that ;
The complainant company is engaged in the business of providing financial facilities under hire purchase scheme for vehicles. The accused is one of the customers of the complainant 5 CC NO.2187/2021 and entered into hire purchase agreement with the complainant for purchase of vehicle name TATA LPT 1109 FBTT bearing No.KA 417792 vide agreement No.THRKE0703270005 dt.28.03.2017. Subsequently, the accused defaulted in making payment to the complainant company and on repeated request from the complainant and in response to the demand made by the complainant, the accused issued a cheque bearing No.775522 dt.07.09.2019 for a sum of Rs.3,16,000/ drawn on Indian Bank, Kengeri Branch, Bengaluru in favour of the complainant. The complainant presented said cheque for realisation through its banker ie Standard Chartered Bank, Koramangala branch, Bangalore, same was dishonored for the reason "Funds Insufficient", subsequently, the complainant issued legal notice 13.09.2019 to pay the outstanding amount, inspite of service of notice, the accused failed to pay the outstanding amount to the complainant. Therefore, the complainant was constrained to file the complaint against the accused.
10. In order to create the legal presumption as per Sec.139 of NI Act, the Power of Attorney Holder of the complainant company got examined as PW1 by narrating entire complaint averments and got marked the documents as Ex.P.1 to Ex.P.17. Ex.P1 is Copy of the Power of Attorney. Ex.P.2 is the cheque. 6
CC NO.2187/2021 Ex.P.3 is the bank endorsement. Ex.P.4 is the office copy of legal notice. Ex.P.5 is the postal receipt and Ex.P.6 is the Postal acknowledgment. , Ex.P.7 is the Summary of Loans, Ex.P.8 is the Vehicle Loan application, Ex.P.9 is Hypothecation cum Loan agreement, Ex.P.10 to 17 are Photos
11. During his cross examination PW1 deposed that the loan was sanctioned by the complainant finance in favour of the accused on 28.3.2017 for Rs.3,16,000/ which agreed interest at the rate of 14.5%. But the defence counsel has suggested that the disputed cheque which was issued by the accused at the time of execution of loan hypothecation deed and that has been filled up and presented conveniently thereafter filed present case against the accused. Same suggestion has denied by the witness. Further it is suggested that accused has made part payment of Rs.70,000/ but that effect there is no documents produce by the either parties. During further cross examination of PW1 the defence counsel further suggested that accused has made payment of entire agreed installment and there is no due amount to be paid by him. Same is denied by the witness. Thereafter, PW1 has produced account extract original loan application and loan hypothecation agreement including 8 photos of hypothecated vehicle which have been marked under Ex.P.7 to 17. Thereafter 7 CC NO.2187/2021 the defence counsel has suggested that part payment shown under Ex.P.7 account statement has not been duly considered by the complainant finance and the cheque which was issued by the accused during the loan transaction towards security purpose has been misused by the complainant finance. Same has been denied by the witness by saying that towards part payment made by the accused finance has issued receipts but they have no carbon copies of those receipts. Hence, the defence counsel has denied the Ex.P.7 account statement document by saying that it is of created document and complainant finance never issued any receipts after receipt of part payment from the accused therefore, complainant finance has no carbon copies to that effect. The complainant has denied above said suggestions and not given material admissions in order to falsify his own claim.
12. In order to rebut the legal presumption, the accused himself got examined as DW 1 by filing of evidence affidavit in lieu of examinationinchief and narrated entire defence taken during cross examination of PW1. It is stated by DW 1 that after availing of loan he purchased TATA LPT vehicle bearing registration no. KA41 7792. He deposed that on 28.3.2017 he entered into loan agreement and availed principle loan amount of 8 CC NO.2187/2021 Rs.3,16,000/ for agreement value of Rs.4,31,249/ is to be paid in equated monthly installments. Further he deposed that he has issued disputed cheque on 7.9.2019 towards security purpose and he paid entire loan amount but complainant finance failed to return to disputed cheque Thereafter, it has been presented for encashment in order to file the fake case against the accused. But he deposed that Ex.P.7 and other all documents have been created conveniently against the accused. In another angle he dpeosed he has issued disputed cheque on the date of loan transaction that is on 28.3.2017
13. During cross examination he admits entire loan agreement and sanctioning loan amount of Rs.3,16,000/. Further he agreed by obtaining loan from the complainant finance he purchased 2nnd hand LPT lorry vehicle that has been hypothicated in favour of the complainant finance as per Ex.P.8 & 9. HE too admits the signatures on those documents which have been duly marked under Ex.P.8(a) and 9(a). Further he admits photos of hypothicated which have been marked under Ex.P.10 to 17. The accused has also admits issuance of cheque and signature on it. Further he admits due service of the legal notice but denies the claimed amount through the complaint. 9
CC NO.2187/2021 Further he denied issuance of receipts by the complainant finance for the part payment made by the accused. During further cross examination he explained that he has agreed to repay the loan amount in 30 EMI installments for Rs.16,800/. But deposed that he has paid entire amount through the agreed installments and to that effect he has produced account statement before this court, despite complainant finance officials have failed to return the cheque which was issued by the accused towards security purpose. Further he agreed non replying of the legal notice issued by the complainant finance. He denied the amount which was due of Rs.4,29,000/ which includes principles amount as well as interest on it. It is admitted that he has made part payment to the extend of Rs.74,000/.
14. After careful scrutiny of entire oral and documentary evidence placed by the parties it reveals that as per defence the complainant finance has sanctioned loan amount of Rs. 3,16,000/ on 28.3.2017. The defence counsel has suggested in one angle has the accused has made part payment of Rs.74,000/ and in another angle it has been defended that the accused has made part payment entire agreed installments and there is no due amount to be paid by the accused. To show this entire payment during cross examination of DW1 accused was ready to produce relevant 10 CC NO.2187/2021 document like account statement but not produced further more toward s part payment alleged to be done by th accused is also not proved properly accused failed to produced relevant documents like receipts to that effect. Further it is observed that the issuance of cheque is not disputed , but it was defended that the cheque was issued on the date of loan sanction on not on the date alleged under the complaint and that has been issued towards security purpose not for discharging of legal liability. Further, it is observed that accused never denied execution of documents like loan application loan hypothecation agreement as per Ex.P.8 &9 including his signatures. Further it is observed that the whatever part payment defended by the accused has been duly reflected in account statement Ex.P.7 produced by the complainant finance. Apart it accused has make payment of agreed interest on balance amount at the rate of 14.5%. Complainant finance is having legal money lending licenses to seek agreed rate of interest therefore, complainant finance is entitled to charge the agreed rate of interest on the balance loan amount to be paid by the accused. Furthermore the accused who executed voluntarily loan hypothication deed along with a loan application by agreeing to pay the agreed rate of interest then at this stage it can not denied the interest amount claimed through the complaint. Furthermore 11 CC NO.2187/2021 the hypothicated vehicle which was purchased by the accused is in the possession of the accused and he on road having its own income . Therefore, it is observed that complainant has not taken legal steps to wards seizure of the hypothicated vehicle in fact they have insisted the accused to regularize his repayment process by making payment of defaulted installments but accused not obliged the reminder issued by the complainant finance. Hence, defence taken by the accused holds no water. He himself admits legal liability of payment of cheque amount in one angle, in another angle, he deposed that, he has issued cheque in dispute for security purpose. Therefore after considering the versions of the accused it creates doubt on the defence raised by the accused and in absence of any such rebuttal evidence it is legally presumed that the accused is due of amount of Rs.3,16,000/. It is only defence that the cheque was issued by the accused at the time of execution of loan agreement towards security purpose and that has been misused by the complainant finance. Accused produced no reliable documents to show the entire payment of loan amount. Further it is observed that the hypothicated vehicle possessed by the accused and having income from the vehicle . Despite it he intentionally avoided making payment of agreed installments. On the contrary it is observed that the complainant 12 CC NO.2187/2021 finance has duly proved the execution of loan hypothication agreement by the accused. Further the entire documents produced by the complainant finance have been duly admitted by the accused .But to disprove the complainant case accused not produced reliable documentary evidence hence the amount shown under the cheque is legally recoverable debt. Despite it the defence has taken as the disputed cheque was issued towards security purpose but as on date of cheque the amount to be payable by the accused is entitled by the complainant finance through the disputed cheque.
15. As per the terms of agreement, accused has agreed to repay said loan amount, thereafter became defaulter. In absence of any other alternative remedy complainant finance presented the cheque in dispute for encashment process. Accordingly, accused has failed to comply with Sec.138 (c) of N.I.Act. Therefore, the complainant has put up better effort in order to prove the initial legal presumption in its favour as per Sec.118 and 139 of N.I.Act.
16. In this regard I would like to highlight the principles discussed by the Honble Apex Court reported in below mentioned judgment:
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CC NO.2187/2021
1. Sripathi Sing (since deceased) through his LR v/s State of Jharkhand and Anr. CRIMINAL APPEAL NOS. 1269 1270 OF 2021 in which Honble Apex Court has held that :
If as on the date of issuance of cheque liability or debt exist or the amount has become Legally recoverable the section is attracted and not otherwise. In other sense if cheque was issued for repayment of loan installments which had fallen due through such deposit of cheques towards repayment was also described as security in the loan agreement where the loan has actually been advanced and repayment due [ on date of issuance of cheque.
17. Therefore the cheque alleged to be issued as a security pursuant to financial transaction, cannot be considered as worthless piece of paper under every circumstances. "Security" in its true sense is a state of being safe and the security given for loan is something given as a pledge of payment. It is given , deposited or pledged to make certain fulfillment of obligation to which the parties to the transaction are bound. If in a transaction loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security.
18. For the sake of argument that blank signed cheques are given to the complainant, it is well settled principle of law that "even a blank cheque leaf signed and handed over by the accused which is towards some payment, would attract presumption u/s.139 of N.I.Act in absence of cogent evidence to 14 CC NO.2187/2021 show that cheque was not issued in discharge of debt". Thus no discrepancy had emerged out of the cross examination which may demolish complainant version even on the touch stone of preponderance of probabilities. Thus, accused has not disputed execution of loan hypothecation agreement. Further the accused admits becoming a defaulter. Hence, amount mentioned under the cheque is legally recoverable debt.
19. If the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonored, the consequences contemplated under Sec.138 and other provisions of N.I.Act would flow. Under `the light of above said discussion it is crystal clear that burden shifts on the accused to rebut the legal presumption which exists in favour of the complainant by proving that the cheque in dispute was not issued towards discharge of amount claimed through cheque.
20. Further it is observed that when the cheque has been presented for encashment, at that time the bank authority issued an endorsement with note " Insufficient Funds ". Hence, the 15 CC NO.2187/2021 complainant finance has issued the legal notice and same has been duly served on the accused. Though the defense counsel denied service of notice, as per Section 27 of G.C.Act, the notice sent to the correct address of the accused is deemed to be served. So when there is issuance of blank cheque and the signature is not disputed, then burden lies on the accused to disprove the case of the complainant. That means initially the burden is on the complainant. Once burden is discharged by the complainant, then onus lies on the accused to disprove the case of the complainant. But, the accused has put better efforts in order to rebut the case of the complainant. But went in vain. Therefore, the object of 138 of N.I.Act is to infuse credibility to negotiable instruments including cheques and to encourage and use of negotiable instruments including cheques in financial transaction. The penal provisions of Sec.138 of N.I.Act is intended to be a deterrent to callus issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same.
21. Hence complainant has placed sufficient oral and documentary evidence to prove that the accused issued the cheque in discharge of legal liability. Therefore, the presumption under Sec.139 of N.I.Act remain intact. The complainant has 16 CC NO.2187/2021 proved the complaint averments by placing oral and documentary evidence. On the other hand, the accused failed to prove the defence by rebutting the above said presumption.
22. The complainant has proved that the cheque in question was issued by the accused towards discharge of legal liability. Therefore, the court can raise presumption mandated under Sec.139 of N.I.Act as per the ratio laid down by the Hon'ble Apex Court in 2010(11) SCC 441 (Rangappa V/s Mohan).
"Once the cheque relates to the account of accused and he accepts and admits the signature on said cheque, then initial presumption as contemplated under Sec.139 of N.I.Act has to be raised by the court in favour of the complainant". On the other hand, the accused failed to rebut the statutory presumption.
23. In the light of the above discussion and the material placed on record, the court is of the opinion that the complainant has proved existence of legal liability and also proved that the accused issued the cheque in question towards discharge of legal liability. The complainant has proved the ingredients of Sec.138 of N.I.Act. Therefore considering the entire facts and circumstances of the case and the available evidence on record, the court comes to the conclusion that the accused committed the 17 CC NO.2187/2021 offence punishable under Sec.138 of N.I.Act. The complainant is entitled for compensation under Sec.357 Cr.P.C. Therefore, the complainant has proved point No.1 beyond all reasonable doubt. Hence, Point No.1 & 2 are answered in the Affirmative.
24.Point No.3 : , In the light of the above finding on point No.1 , I proceed to pass the following:
ORDER Acting u/s. 255(2) of Cr.p.c., the accused is convicted for the offence punishable under Sec.138 of N.I.Act.
The accused is sentenced to pay fine amount of Rs.3,26,000/ (Rupees Three Lakhs Twenty Six Thousand only ) In default of payment of fine, shall undergo SI for six months. Acting under Sec.357(1)(b) of Cr.P.C., out of the fine amount, the complainant is entitled for Rs.3,21,000/ (Three Lakhs Twenty One Thousand only) towards compensation. [[[ Acting under Sec.357(1) (a) of Cr.P.C., the remaining fine amount of Rs.5,000/ (Rupees Five Thousand only) is to be remitted to the state.
Copy of the judgment shall be furnished to the accused free of cost.
(Dictated to the Stenographer directly on the computer , transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 3rd day of May 2024 ).
(SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.18
CC NO.2187/2021 ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Girish.K.V
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Copy of Power of Attorney
Ex.P2 : Cheque
Ex.P2(a) : Signature of the accused.
Ex.P3 : Bank Endorsement
Ex.P4 : Office copy of legal notice
Ex.P5 : Postal receipt
Ex.P6 : Postal acknowledgment.
Ex.P7 : Summary of Loan
Ex.P8 : Vehicle Loan application
Ex.P9 : Hypothecation cum Loan agreement
Ex.P10 to 17 : Photos
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED: D.W.1 : Shivakumar B.V.
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: Nil (SUJATA SIDAGOUDA PATIL) XXV A.C.M.M., BANGALORE.
Digitally signed by SUJATA
SUJATA SIDAGOUDA
SIDAGOUDA PATIL
PATIL Date:
2024.05.04
16:46:27 +0530
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