Bangalore District Court
Kothalam Finance And Chits vs R Manjunath on 29 May, 2024
KABC020178452022
IN THE COURT OF XXIV ADDITIONAL SMALL
CAUSES JUDGE & A.C.M.M. (SCCH-26)
AT : BENGALURU
DATED THIS THE 29th DAY OF MAY 2024
PRESENT: SRI. APPASAB NAIK
B.A.L.L.B.(Spl)
XXIV ADDL. SCJ & ACMM &
BENGALURU.
1. Sl. No. of the CC.No.8333 OF 2022
Case
2. The date of 17.06.2022
commencement
of evidence
3. The date of 03.04.2024
closing evidence
4. Name of the M/s. Sri.Kothalam Finance & Chits,
Complainant Represented by its Partner,
Sri. M.Venkataswamy @ M.Venkatesh,
S/o. Late Munivenkataswamy,
Aged about 58 years,
Office at No.2441, New Extension,
Gangadharapura, Near Kodimatta,
Rojipura Doddaballapura,
Bangalore Rural District - 561 203,
Also residing at No.41,
3rd Cross, Devaki Kumara Garden,
Vijayanagara, Bangalore - 560 040.
(By Sri. K.B.Naveen Kumar - Advocate.)
5. Name of the Sri. R.Manjunath,
Accused S/o. Sri. Ramanjinappa,
Employee at Rittal India Pvt. Ltd.,
SCCH - 26 2 CC No.8333/2022
No.3, 24, KIADB Industrial Area,
Veerapura, Doddaballapura - 561 203.
(By Sri.S.K.Prabhakara - Advocate)
6. The offence U/s.138 of the Negotiable Instruments
complained of Act
7. Opinion of the Accused found guilty
judge
JUDGMENT
The complainant has filed this complaint Under Section 200 of Cr.P.C against the accused alleging that he has committed an offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short N.I.Act).
2. The brief facts of the complainant's case are as under:-
The accused approached the complainant for financial assistance for a sum of Rs.4,00,000/- with assurance to return the amount within 18 months at the rate of interest of 16% per annum, but accused has not paid the same. The accused has issued a cheque bearing No.479772 dated 17.11.2021 drawn on HDFC Bank, Doddaballapura Branch for a sum of Rs.4,00,000/-. It has presented the said cheque for collection at his banker,but the same has been returned to him with SCCH - 26 3 CC No.8333/2022 endorsement "Non CTS Cheque" on 19.11.2021. In this regard he has issued legal notice to the accused on 16.12.2021. In spite of it, the accused has not paid the cheque amount. Hence, this complaint.
3. After filing of this complaint, the cognizance of the offence has been taken and the complaint has been registered as P.C.R. Thereafter, the sworn statement of the complainant has been recorded and also got marked 20 documents as Ex.P.1 to P.20. Thereafter, the case has been registered in Crl.Reg.No.III and summons has been issued to the accused. In response to summons, accused has appeared before this court through his counsel and obtained bail. The plea has been recorded, read over and explained to the accused. He has pleaded not guilty and claims to be tried. Hence, the case has been posted for complainant evidence. The complainant has adopted sworn statement and Ex-P1 to 20 as his evidence. Thereafter, statement of accused u/s 313 Cr.P.C. has been recorded. Thereafter, the statement of the accused u/s 313 Cr.P.C. has been recorded and he has denied the incriminating circumstances appearing in the SCCH - 26 4 CC No.8333/2022 complainant evidence and he has chosen to lead defence evidence as DW.1 and not got marked the documents on his behalf.
4. Heard the arguments from both sides. Perused the entire records. The learned counsel for accused has submitted his written argument.
5. The following points arise for my consideration:-
POINTS
1. Whether the complainant proves that the accused has issued cheque in question in discharge of the legally recoverable debt or any other liability as contended by him?
2. Whether complainant proves that the accused has committed the offence punishable under Sec.138 of NI Act?
3. Whether the complainant is entitled for the relief as prayed in the complaint?
4. What order?
6. My answers to the above points are as follows :-
Point No.1 to 3 : In the Affirmative.
Point No.4 : As per final order,
for the following .
REASONS
7. POINT NO.1 to 3:- These three points are taken together for common discussion in order to avoid facts SCCH - 26 5 CC No.8333/2022 and evidences.
It is the case of the complainant that the accused approached the complainant for financial assistance for a sum of Rs.4,00,000/- with assurance to return the amount within one year at the rate of interest of 16% per annum but accused has not paid the same. The accused has issued a cheque bearing No.479772 dated 17.11.2021 drawn on HDFC Bank, Doddaballapura Branch a sum of Rs.4,00,000/-. It has presented the said cheque for collection at his banker, but the same has been returned to him with endorsement "Non CTS Cheque" on 19.11.2021. In this regard he has issued legal notice to the accused on 16.12.2021. In spite of it, the accused has not paid the cheque amount.
8. As already stated supra, the proprietor of complainant finance has examined himself as PW-1 and got marked 20 documents as Ex-P1 to P.20. He has filed affidavit in lieu of his examination-in-chief reiterating the entire averments of the complaint. Ex-P4 is the cheque dated 17.11.2021 and Ex.P.5 is the Bank endorsement. From these documents, it discloses that the complainant SCCH - 26 6 CC No.8333/2022 has presented the cheque at his banker for collection, but the same has been returned to him with endorsement "NON CTS cheque". Ex-P6 is the legal notice dt.16.12.2021, Ex-P7 is the postal fee paid receipt, Ex.P.8 is the postal acknowledgment. These documents disclose that on 16.12.2021 the complainant has issued legal notice to the accused demanding him to pay the cheque amount. But the said notice has been returned to him with endorsement "NON CTS cheque".
9. The documents produced by PW-1 clearly shows that he has complied with the mandatory provisions of sec.138 of NI Act. Hence, it gives raise to presumption u/s 118 and 139 of NI Act in favour of complainant that he has received the cheques from the accused in discharge legally enforceable debt or other liability.
10. Therefore, it gives raise to statutory presumption u/s 118 r/w section 139 of NI Act in favour of the complainant. Section 118 of NI Act reads as under:-
That every Negotiable Instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for SCCH - 26 7 CC No.8333/2022 consideration.
11. Further Section 139 of NI Act provides for presumption in favour of holder. It reads as under:-
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part or any debt or other liability.
12. It is relevant to note that the presumption available u/s 118 of NI Act and u/s 139 of NI Act are rebuttable in nature. The accused has chosen to rebut the presumption by way of cross examination of PW-1. The learned counsel for the accused has cross examined PW1 at length. I have perused the entire cross-examination. From cross-examination of PW-1 it indicates that the accused has taken up a defence that the complainant obtained cheque from him for the purpose of security at the time of chit bid. Further he has taken up a defence that he has not been served with demand notice and not produced any documents respect of loan transactions. Further he has taken-up a defence that he has paid the entire balance amount to the complainant, but in spite of SCCH - 26 8 CC No.8333/2022 it, complainant by misusing his cheques given for security purpose has filed this false case against him. Further he has taken defence that, cheque is return as Non CTS Cheque, this ground is not attracted the u/sec.138 of NI Act. These defences are clearly denied by PW1.
13. It is relevant to note that the accused has denied the incriminating circumstances appearing against him in the evidence of complainant while recording his statement u/s 313 of Cr.P.C. He has chosen to lead defence evidence but he has stepped into witness box to adduce his evidence as Dw-1, but he has not got marked the documents.
14. Learned counsel for complainant argued that,the acused is admiited the cheque and his signature on the cheque.The complainant has proved the case on oral and documentary evidence, the accused has not produced any documents to taken his defence. The accused has not proved the complainant has running chit fund transactions. The accused has issued the cheque only for repayment of due loan amount.
15. Learned counsel for accused has filed written SCCH - 26 9 CC No.8333/2022 argument, it is contended that complainant was running chit fund and upon a successful bid he took the chit money and as per practice of the complainant firm he had to give a signed cheque while taking the chit money which was fully repaid, but due to the carona situation he could not take back the cheque from complainant, which cheque complainant has fraudulently misused. The cheque being of older form - non CTS itself is proof that it was issued long age, and complainant's Bank could not process it as such chequeq had become stale by the time complainant tried to make use of its. The complaint does not fall within the ambit of sec 138 of NIA as the cheque in question was not dishonored as claimed by the complainant. That the collecting banker could not present the cheque in question to the drawee bank through CTS clearing, the said cheque being non CTS cheque as revealed by the return memo marked as Ex.P.5. The said cheque was returned to the complainant with the cheque return memo stating that the cheque could not be presented to the drawee bank by the collecting banker through CTS clearing, when the cheque could not be SCCH - 26 10 CC No.8333/2022 presented at all to the drawee bank, the question of dishonor does not arise of. CTS means cheque transition system wherein the cheque when presented the physical movement of the cheque is transacted electronically to the drawee bank, the cheque is question could not be presented in the CTS clearing because the said cheque did not fit into the system of CTS clearing being of older version. Hence it is a non CTS cheque, even though it is a negotiable instrument. The accused could not have been charged for the offence punishable under sec 138 of NI Act without presentation and dishonor of a cheque. That the complainant ought to have filed a civil suit on the basis of the said cheque or else demanded CTS cheque from the accused returning the non CTS cheque to accused but the complainant in order to extract money which was not due from accused went ahead and filed a criminal case knowing fully well that the cheque is neither presented, nor dishonored but was returned by his banker as no presentable and mislead the Hon'ble court to register the case as CC. The accused had been wrongfully implicated in this criminal case, made to SCCH - 26 11 CC No.8333/2022 undergo hardship for seeking bail, attending court number of times for which complaint is liable to pay Rs.1,00,000/- as compensation for malicious Prosecution, Secondly as per the admission of the complainant in cross examination the accused if at allowed any money it could only be towards the partnership firm and not to the complaint as an individual, the cheque in question being in the name of the complainant is invalid as the payee is not the partnership firm. Also complainant firm has filed the case but not furnished Income Tax details of the firm.
16. I carefully examined the oral and documentary evidence, one thing it makes clear that the transactions between the complainant and accused is not in disputed by the accused. The signature of the accused found in Ex-P4-cheque is also not in dispute. The only contention and the defence of the accused is that, he already repaid the entire amount to the complainant. As per Ex-P19 and 20 chit ledger produced by the complainant shows that as on 09-12-2018, accused has obtained the loan of Rs.4,00,000/-. It is relevant to note that the learned counsel for the accused has not put any question to PW-
SCCH - 26 12 CC No.8333/2022 1 with respect to Ex-P19 and 20. Therefore, as on the date of issuance of cheque as per Ex-P4, the accused was due sum of Rs.4,00,000/- as mentioned in the cheque. From the cross-examination of PW-1, it clearly goes to show that, the accused approached the complainant for financial assistance. It is relevant to note that though the accused has taken up a defence that he handed over the cheque in question in favour of complainant as a security for the transaction, but he has not adduced any evidence in this regard. Hence, without any evidence this court is not inclined to accept the version of the accused that he has handed over the cheque in question in favour of complainant as a security for the transaction.
17. Further it is relevant to note that the accused has taken-up a defence that no notice has been served on him as per Section 138 of NI Act. But on perusal of Ex-P 8 to 12, it is clear that the complainant issued legal notice to the accused to the address as shown in the cause title of the complaint through RPAD. As per Ex- P11 and 12, addressee Left and insufficient address, but EX.P-2 and 4 the address of the accused is same with SCCH - 26 13 CC No.8333/2022 cause title of the complainant, in this case, the accused has not denied the EX.P-1 to P-5, hence the complainant has issued legal notice as per EX.P-8 to accused address furnished by the accused to the complainant at the time of execution of EX.P- 2 and 4. In view of Section 27 of General Clauses Act, if a letter is sent through Registered Post Acknowledgment Due, it is deemed to be served to the proper address, unless the contrary is proved. But in the instant case, the accused has not adduced any evidence to show that he has not been served with mandatory notice as required u/s 138 of NI Act. Therefore, the said defence taken-up by the accused holds no water. The accused has taken-up another defence that he has already repaid entire cheque amount in favour of complainant. But he has not produced single piece of document to show the same. Therefore, the defence taken-up by the accused that he has repaid the entire cheque amount holds no water. The accused has taken-up another defence that reasons for non CTS cheque is not fall U/sec.1385 of under NI Act, but the Hon'ble High court of Himachal Pradesh in Prem lal V/s SCCH - 26 14 CC No.8333/2022 State of Himachal Pradesh dated 12-01-2024, it is held that Non CTS cheque remains valid as negotiable Instruments and can be the basis for a complainant under section 138 of the NI Act.
18. In view of the above relied the judgment, the Non ,CTS Cheque is also fall under esec.138 of NI Act and the contention taken by the accused is not sustainable. Therefore, in my opinion, the accused has utterly failed to probable his defence so as to rebut the presumption available to the complainant under the law. On the other hand, the complainant has produced cogent documents to prove that the accused has issued cheque for discharge of legally enforceable debt or liability. Further the complainant has proved that the accused has committed the offence punishable u/s 138 of NI Act. Accordingly, I answer point No.1 to 3 in the Affirmative.
19. Point No.4: For the aforesaid reason, I proceed to pass the the following:-
SCCH - 26 15 CC No.8333/2022
-: O R D E R :-
Acting under Section 255(2) of Cr.PC, the accused is hereby convicted for the offence punishable under Section 138 of Negotiable Instrument Act and sentenced to pay fine of Rs.4,05,000/- (Rupees Four Lakh Five Thousand only).
In case of default to pay the aforesaid fine amount, the accused shall undergo simple imprisonment for six months.
Acting u/s 357(1) (b) of Cr.P.C. it is ordered that out of total fine amount, sum of Rs.4,00,000/- shall be paid to the Complainant as compensation. The remaining sum of Rs.5,000/- shall be defrayed as state expenses.
It is further made clear that if the accused opt to undergo imprisonment, it does not absolve him from his liability of paying compensation to the complainant.
Office is directed to supply free copy of judgment to the accused.
Bail bond stands cancelled.
(Dictated to the stenographer, directly over computer, typed by her, corrected by me and then pronounced in the open Court on this day 29th May 2024) (APPASAB NAIK) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
SCCH - 26 16 CC No.8333/2022
ANNEXURE
I. WITNESSES EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW.1 : Mr. M.Venkataswamy @
M. Venkatesh
II. DOCUMENTS MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P.1 Certified copy of partnership deed
Ex.P.2 Certified copy of certificate of
registration of firm
Ex.P.3 Certified copy of money lending license
Ex.P.4 Cheque, signature as Ex.P.4(a)
Ex.P.5 Bank endorsement
Ex.P.6 Legal notice
Ex.P.7 Postal fee paid receipt
Ex.P.8 Postal acknowledgment
Ex.P.9 Certified copy of bank statement
Ex.P.10 Certified copy of money lending license
Ex.P.11 Certified copy of IT returns for the year
2014-15
Ex.P.12 Certified copy of IT returns for the year
2015-16
Ex.P.13 Certified copy of IT returns for the year
2016-17
Ex.P.14 Certified copy of IT returns for the year
2018-19
Ex.P.15 Certified copy of IT returns for the year
2019-20
Ex.P.16 Certified copy of IT returns for the year
2020-2021
Ex.P.17 Certified copy of IT returns for the year
2021-2022
SCCH - 26 17 CC No.8333/2022
Ex.P.18 Certified copy of IT returns for the year
2022-2023
Ex.P.19 Notarized copy of form No.4
Ex.P.20 Notarized copy of form No.5
III. WITNESSES EXAMINED ON BEHALF OF THE ACCUSED :
DW.1 : Manjunath IV. DOCUMENTS MARKED ON BEHALF OF THE ACCUSED :
--NIL----
(APPASAB NAIK) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.