Bangalore District Court
Shri Augustine D'Lima vs A1: Shri M.N.Manohar on 7 January, 2015
IN THE COURT OF THE IV ADDL. C.M.M AT BANGALORE.
DATED THIS THE 7th DAY OF JANUARY 2015
PRESENT
Ms.S.L.Ladkhan, B.A., L.L.M.,
IV A.C.M.M. Bangalore
CC No. 8156/2005
Complainant : Shri Augustine D'lima,
S/o Shri John F. D'Lima,
R/a. No.307, Raheja Regent,
35, Coles Road, Bangalore - 5.
V/s.
Accused : A1: Shri M.N.Manohar,
S/o Sri. M.S.A. Narayan,
R/a. No.87, VI A Main,
Tata Silk Farm, Basavanagudi,
Bangalore - 560 004.
A2: N.G.Raman,
(Abated)
JUDGMENT
This is a private complaint filed by the complainant against the accused alleged to have committed the offences punishable u/s.406,420, 465, 506 of IPC.
2. The brief complaint averments reveals that, the complainant was a bank employee at Burgan, Kuwait. After his retirement he settled down at Bangalore. Accused No.1 and 2 were retired bank officials of Canara Bank, Grindlays Bank. They were introduced to
-2- CC 8156/2005 the complainant by one Mr.Kini who was also an employee of Syndicate Bank, Frazer Town branch for filing Income Tax returns. The accused persons had borrowed loan of Rs.13 Lakhs from the complainant agreeing to repay the same with the interest at the rate of 2 % to 2½ % per month and had executed on demand promissory note, consideration receipt, memorandum of transaction and a letter on 14.11.1998. That the accused No.1 had paid the interest till 31.12.2000 at the rate of 2% per month and again from 1.9.2000 to 31.12.2000 paid the interest at the rate of 2 ½ % per month. Subsequently accused No.1 failed to pay the interest and refused to pay the principal as well as the interest amount. On 1.4.2001 the complainant got issued a letter to accused No.1 to return the said loan and both of them agreed to settle their dispute before a common conciliator by name Sudhir Kaushik. Both the complainant and the accused approached the said conciliator and agreed for settlement. The terms of the settlement are reiterated in the complaint averments. Further it is pleaded that, the accused No.1 owns a palatial house at Basavanagudi measuring 40 x 50 feet, the boundary of the said property is also pleaded in the complaint. The accused No.1 had agreed to repay the said amount on or before 30.4.2002 but subsequently filed a frivolous suit against the complainant in OS No.8866/2001 before City Civil Court, Bangalore seeking for the relief of perpetual injunction against the complainant. Even the accused No.2 has house at Jayanagar and the complaint averments reveals that, the said property is morefully described as schedule 'B' property. Further it is avered in the complaint that, the accused had handed over 1750 shares of ITC company as a security to the personal loan
-3- CC 8156/2005 borrowed. When the accused failed to repay the said loan amount the complainant sent those shares to the ITC company for transferring the same to his name. The company in turn stated that, the said shares were bogus and got issued the letter on 17.10.2000. The accused No.1 and 2 have not co-operated and they are evasive, very cruel and rude. They are trying to dispose their properties to defeat the claim of the complainant. Further in the complaint it is avered that, the principal amount is Rs.13 Lakhs interest at the rate of 2½ % per month from 1.1.2001 to 31.1.2002 at the rate of 4,22,500/-, total amount due from the accused is 17,22,500/-. Cause of action arose to the complaint on 16.2.1999 when the accused persons gave the forged share certificates to the complainant and on 17.10.2000 when the complainant company refused to register the share certificate in the name of the complainant. As such this complaint is filed against the accused alleged to have committed the offences punishable u/s.406, 420, 465, 506 of IPC.
3. The matter was referred to the jurisdictional police station for investigation, who in turn had filed 'B' report. After the enquiry of the complainant my predecessor in office had accepted the 'b' report and had dismissed the complaint. The said order was challenged by the complainant in the Crl. R.P. No.221/2003 which came to be allowed and the matter came to be remanded back. Again the matter was taken on board, the arguments of the counsel for the complainant was heard and cognizance was taken against the accused for the offences punishable u/s.406, 420 r/w 34 of IPC.
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4. After the service of the summons accused No.1 and 2 appeared through their counsel and they were enlarged on bail. During the pendency of the case the accused No.2 was reported to be dead and the case against accused No.2 stood abated.
5. The counsel for the complainant filed a memo to adopt the sworn statement as evidence before charge. My predecessor in office has heard on charges. Charges for the offences punishable u/s.406, 420, 465, 506 r/w 34 of IPC was recorded. The certificate reveals that, charge was read over and explained to the accused No.1 in the Kannada language known to him. The accused No.1 has pleaded not guilty and claimed trial.
6. The complainant has led in his evidence as PW1 and got marked Ex.P.1 to Ex.P.9. After the conclusion of the complainant's evidence statement of the accused u/s.313 of Cr.P.C. was recorded by my predecessor in office. Accused has denied it and has led no defence evidence and got confronted the documents Ex.D.1 to Ex.D.5 in the cross-examination of PW1.
7. Heard counsel for the complainant and the accused. The counsel for the accused also has filed written arguments along with the memo with the following rulings :
1) Laws (SC) 2013-1-18
2) AIR 2001 SC 2960
3) (1974) 4 SCC 616
4) (1972) 3 SCC 661
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5) ILR 1986 Pg. 2970
6) 1976 Cri.L.J. 446
8. Though opportunity was given to the complainant's counsel to advance reply arguments, there was no representation and failed to advance the reply arguments.
9. Perused the materials on record.
10. The following points arise for my consideration :
1) Whether the complainant proves that, on 14.11.1998 the accused No.1 along with the deceased accused No.2 had borrowed loan of Rs.13 Lakhs agreeing to repay the same at the rate of 2% per month and executed on demand promissory note, memo of transaction, but subsequently failed to repay the loan amount and return the principal amount, misappropriated the said amount and thereby committed the offence punishable u/s.406 r/w 34 of IPC?
2) Whether the complainant further proves that, the accused having borrowed the above said loan amount failed to repay the loan amount with the interest and cheated the complainant and thereby committed the offence punishable u/s.420 r/w 34 of IPC ?
3) Whether the complainant further proves that, in order to cause wrongful loss to the complainant the accused persons got created the forged share certificates and thereby committed the offence punishable u/s.465 r/w 34 of IPC ?
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4) Whether the complainant further proves that, accused No.1 along with the accused No.2 in furtherance of their common intention had given live threat to the complainant and thereby committed the offence punishable u/s.506 r/w 34 of IPC ?
5) What order ?
11. My findings on the above points are as follows:
Point No.1 : In the negative. Point No.2 : In the negative. Point No.3 : In the negative. Point No.4 : In the negative. Point No.5 : As per the final order for the following:
REASONS
12. Point No.1 to 4 : As these points are inter-linked, in order to avoid repetition of discussion they are taken together for common consideration. It is the case of the complainant that, the accused no.1 and 2 who were the retired employees of the bank were introduced to him by one Mr.Kini. The accused persons had borrowed a loan of Rs.13 Lakhs agreeing to repay the same with the interest at the rate of 2 to 2½ % per month and executed on demand promissory note, consideration receipt, memo of transaction and a letter on 14.11.1998. For sometime the accused paid the interest at the rate of 2% and from 1.9.2000 to 31.12.2000 the accused paid the interest at the rate of 2½ %. But subsequently the accused failed to repay the interest and also failed to return the principal amount. As there was a dispute between them, they got the matter referred to
-7- CC 8156/2005 arbitration. In the said arbitration before the Arbitrator one Sudhir Koushik the accused No.1 had agreed to repay the said principal amount of Rs.13 Lakhs on or before 30.4.2002 and the said settlement was not final it was only with respect to the principal amount and from 1.1.2001 the accused had to pay the interest at the rate of 2½ % per month. Both the parties had agreed to the said settlement but subsequently the accused No.1 got filed the suit in OS 8866/2001 against the complainant seeking the relief for perpetual injunction. It is avered in the complaint that, accused No.1 and 2 had residential house. Further in the complaint it is avered that, the accused had handed over the share certificates bearing No.2256, 1784, 1675, 59933, 601250, 599328, 599331 altogether 1750 shares pertaining to Indian Tobacco company and the said shares were given to the complainant as a security to the personal loan. When the accused failed to repay the amount the complainant had transmitted those shares to the company to transfer them in his name and the letter was issued to the company. But the company in turn informed the complainant that the said shares were bogus and the shares were forfeited. As such this complaint is filed against the accused for the offences punishable u/s.406, 420, 465 and 506 of IPC.
13. The complainant has adopted his sworn statement as evidence before charge. Subsequently on the basis of the said sworn statement charges were framed. That the complainant later on led in his evidence as PW1 and has produced the documents. Evidence of PW1 is nothing but the reiteration of the complaint averments.
-8- CC 8156/2005 Further in the evidence PW1 has deposed that, he had given the loan of Rs.21 Lakhs to the accused persons. In the said amount till 2000 the accused persons had repaid the amount of Rs.8 Lakhs and the balance is Rs.13 Lakhs. But the complaint is silent. In the complaint averments PW1 i.e. the complainant has specifically avered that he had given the loan of Rs.13 Lakhs to the accused persons. Therefore, there is improvement in the version of the evidence of PW1.
14. PW1 also has deposed that, the matter was referred to the arbitration and it came to be settled between the accused and the complainant. He has produced the documents Ex.P.1 to Ex.P.9. In the cross-examination of PW1, it is elicited that, he has retired as senior Bank Manager has experience in the banking for about 27 years. PW1 has deposed that he knows the procedure i.e. to be followed while transferring the share certificates. PW1 has deposed that, he does not know in whose names the said share certificates were standing but he has deposed that the said share certificates were in fictitious name. PW1 has deposed that, in the claim statement given before the arbitrator he has mentioned that the said certificates were bogus. The said claim statement is marked as Ex.D.1 as it was relied on by the defence. But further he has deposed that, nowhere in the said Ex.D.1 it is mentioned that the said share certificates were bogus. PW1 has deposed that, he has produced the certified copies of the shares but he has not summoned the company to give evidence. PW1 also has deposed that, Ex.P.1
-9- CC 8156/2005 to Ex.P.4 do not contain the share numbers and even Ex.P.1 to Ex.P.4 do not bear the share certificate numbers that are mentioned in Ex.P.6. PW1 is not in a position to say to which of the accused, what was the loan given by him. PW1 admits that, he had filed the suit against the accused No.1 and 2 and the LRs of the accused No.2 were not made as a party in the civil suit. He has also identified his deposition in OS 1309/2002 as per Ex.D.2.
15. PW1 has deposed that, after filing of the suit in OS 1309/2002 he has filed this private complaint. He also admits that, accused had filed the suit in OS 8866/2001 against him. The order sheet and the award passed by conciliator were marked as per Ex.P.4 and Ex.P.5. PW1 has deposed that, he had issued the notice in writing to the accused persons. PW1 has admitted the suggestion that as per Ex.P.2 the accused had replaced 1350 shares. PW1 has deposed that, earlier 450 shares were given by the accused. Therefore 1350 and 450 shares would be 1750 shares altogether. That he has mentioned the total number of shares in the complaint. Further PW1 has deposed that, accused No.1 himself had taken the entire responsibility to repay the entire amount.
16. Ex.P.1 is the certified copy of memorandum of transaction which reveals that accused No.1 and 2 had borrowed a sum of Rs.10 Lakhs agreeing to repay the same with interest at the rate of 24% per annum. Ex.P.2 is the letter issued by accused No.1 and 2 revealing that 1750 shares were given to the complainant as a security for the loan of Rs.10 Lakhs. As per the oral evidence of PW1
- 10 - CC 8156/2005 and the complaint averments the loan given to the accused persons is Rs.13 Lakhs but as per the documentary evidence Ex.P.1 and Ex.P.2 the loan given to the accused persons is Rs.10 Lakhs. Therefore, there is a contradiction in the oral and documentary evidence produced by the complainant himself. Ex.P.3 is the letter issued jointly by accused No.1 and 2 to the complainant which reveals that, the accused persons have executed on demand promissory note, memo of transaction jointly for having borrowed sum of Rs.10 Lakhs. Further as per the said letter a fresh notice of minimum of 3 months for repayment was requested by the accused No.1 and 2. Ex.P.4 is another letter issued by the accused No.1 to the complainant wherein he has agreed that he would be paying the interest at the rate of 2 ½ % on the fresh loan of Rs.5 Lakhs.
17. Ex.P.5 is the certified copy of the final settlement arrived before the conciliator that reveals the accused No.1 having agreed to pay the amount of Rs.13 Lakhs to the complainant on or before 30.4.2002 and the settlement was only with respect to the principal amount and the said amount of Rs.13 Lakhs would be charged with the interest at the rate of 2.5% per month from 1.1.2001 and both the parties having confirmed that up to the date interest covering the month of December 2000 being paid to the complainant. That on the question of the interest the matter was kept pending.
18. Ex.P.6 is the letter issued by the Investor Services to the complainant stating that, the said share certificates are counterfeit and the company does not take any responsibility of compensation.
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19. Ex.D.1 is the certified copy of the claim statement of the complainant i.e. made before conciliator. Ex.D.2 is the certified copy of the deposition of the complainant in OS 1309/2002 and Ex.D.3 is the certified copy of the W.S. in the said suit i.e. filed by the accused No.1. Ex.D.4 is the certified copy of the order sheet in OS 8866/2001. Ex.D.5 is the certified copy of the complaint in the said suit. The filing of the original suit by the accused and by the complainant is not disputed.
20. The complainant has the burden to prove that the accused has misappropriated the amount and also has cheated the complainant. That accused has got created the false share certificate and gave him life threat. The burden is on the complainant to prove all these facts. The evidence of PW1 and the complaint averments clearly reveals that the complainant had given loan to the accused No.1 and 2. The quantum of loan is also varying as per the complaint averments, as per the oral evidence of PW1 and as per the documentary evidence. PW1 in his complaint as well as in his evidence has deposed that, for sometime the accused No.1 had paid the interest at the rate of 2%
- 12 - CC 8156/2005 per month. Therefore, it is clear that, the criminal intention of the accused No.1 not to pay the amount borrowed from the complainant is absent. If the accused had the intention of misappropriating the said amount then he would not have paid the interest to the complainant towards the loan borrowed. Even the oral evidence and the documents produced before the court clearly reveals that, the accused had agreed for a settlement before the arbitrator that he would return the entire amount of Rs.13 Lakhs. If there was a intention of accused to defraud the complainant then the accused would not have paid the interest. As such, under these circumstances the complainant has failed to prove the mensrea or the criminal intention of the accused no.1 to misappropriate the amount of the complainant. The documentary evidence produced before the court clearly reveals that complainant also has filed the suit seeking for the recovery of the said amount. As such it reveals that, the dispute between the complainant and the accused is of civil nature. Nowhere in the evidence PW1 has deposed that the accused No.1 had the criminal intention to defraud him or misappropriate his amount.
21. As per Ex.D.4 the suit in OS 8866/2001 came to be filed on 29.11.2001 by the accused No.1 against the complainant seeking for the relief of perpetual injunction from restraining the defendant / complainant from coming to his house, from molesting, intimidating, threaten or making phone calls to the plaintiff and his family members. That as per the arbitration clause the time was given to
- 13 - CC 8156/2005 the accused to return the said amount on or before 30.4.2002. There is an award passed by the arbitrator in this regard. Therefore, the said order is also an executable order.
22. Ex.D.2 and Ex.D.3 are the deposition of the complainant in OS 1309/2002 and also the WS of the accused No.1. These two documents reveals that, subsequently the complainant has filed the suit seeking for the recovery of the amount. That the evidence of PW1 is silent regarding the criminal intention of the accused. There are material contradictions in the evidence of PW1. Except the self serving evidence of PW1 none of the witnesses are examined to support the case of the complainant. As the complainant has failed to prove the criminal intention of the accused as such the complainant has failed to prove that the accused has misappropriated the amount borrowed from him.
23. In order to prove the offence punishable u/s.420 of IPC the complainant has the burden to prove that the complainant was dishonestly induced to deliver the property to the accused to cause damage to the complainant. In the evidence of PW1 nowhere he has deposed that he was induced by the accused No.1 and 2 to pay the loan amount to them. Therefore, the allegation of dishonest inducement is missing in the evidence of PW1. As such the provisions of Sec.420 of IPC are also not proved by the complainant. The counsel for the accused has relied on the ruling reported in Laws (SC) 2013-1-18 wherein the Hon'ble Supreme Court has held that, in
- 14 - CC 8156/2005 order to constitute an offence of cheating the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise to say that he committed an act of cheating. A mere failure to keep up terms subsequently cannot be presumed as an act leading to cheating. Further at para 17 it is held that, "..... Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie cannot notice the correspondence exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the court.
Superior Courts while exercising this power should also strive to serve the ends of justice."
This ratio is aptly applicable to the instant case.
24. Even in the ruling reported in AIR 2001 Supreme Court 2960 also the same ratio is laid down. This is also applicable to the instant case. Another ruling reported in 1974 (4) SCC page No.616 wherein the Hon'ble Supreme Court has held that mens rea is an essential ingredient to prove the charge of cheating. Even in the ruling reported in (1972) 3 SCC 661 it is held by the Hon'ble Supreme Court
- 15 - CC 8156/2005 that mens rea is essential to prove the offence of cheating punishable u/s.420 of IPC. These ratios are applicable to the instant case.
25. The complainant has urged in his complaint that the accused persons had given 1750 shares of ITC company as a security for the loan amount and when he presented those share certificates to the company they issued a letter stating that the said share certificates were counterfeit. As such it is the burden on the complainant to prove that the accused persons have committed forgery i.e. they have made a false document with the dishonest intention to defraud the complainant. Though the complainant has produced the certified copy of the letter issued by the company no original documents are produced neither the company is summoned to give the evidence to support the complainant. The said share certificates were not sent for expert analysis to verify whether they were created or the original share certificates. Except the evidence of PW1 none of the witnesses are examined to prove the forgery committed by the accused persons. Case of the complainant is that the accused No.1 and 2 had forged or created a false document i.e. 1750 shares but the said shares are not produced before the court. None of the witnesses are examined to prove that the shares were handed over to the complainant by accused No.1 and 2. PW1 also in his evidence has admitted the suggestions that the document Ex.P.1 to Ex.P.5 does not bear the folio numbers of the share certificates. Therefore, under these circumstances the complainant has failed to prove that the said share certificates were issued by the accused persons as a security to the loan transaction. The complainant also has failed to
- 16 - CC 8156/2005 prove that, the said share certificates were false or forged. Except the certified copy of the letter issued by the company no documents are produced before the court and even no evidence is led to prove that the said share certificates were forged. Even the said share certificates were not sent for analysis by the expert. Hence, under these circumstances the complainant has failed to prove that the accused has committed the offences punishable u/s.465 of IPC.
26. Though in the relief column of complaint it is alleged that, accused also has committed offence u/s.506 of IPC, entire complaint is silent regarding the date, time and place when the accused had given life threat or criminally intimidated the complainant. Even the evidence of PW1 is silent as to when the accused had given life threat to him. Therefore, under these circumstances the complainant has failed to prove that the accused has committed the offence punishable u/s.506 of IPC.
27. Counsel for the accused has relied on the ruling reported in ILR 1986 Kar 2970 regarding Sec.239 of Cr.P.C. This ratio is distinguishable from the facts of the case. In the ratio reported in 1976 Crl.L.J. 446 Hon'ble High Court of Orissa has held that if the complaint is not disclosing any criminal animus on the part of the accused offence u/s.406 and 420 of IPC was not made out and further it is held that, inability to pay the debt within the time stipulated does not amount to dishonest misappropriation. In the instant case also it can be seen that the allegation of the complainant and the evidence reveals that, accused No.1 and 2 have failed to repay the
- 17 - CC 8156/2005 loan amount and also have not paid the interest on the said amount. Therefore, under these circumstances as the complainant has failed to prove the criminal animus of the complainant the accused is entitled to be acquitted. Therefore, my finding on the above points are in the negative.
28. Point No.5 : For having answered the above points as per the above discussion, I proceed to pass this following :
ORDER Acting U/s. 248 (1) of Cr.P.C. accused No.1 is acquitted for the offences punishable U/s.406, 420, 465, 506 of IPC.
Bail bonds of the accused and surety stands cancelled.
(Dictated to the stenographer, transcribed and computerised by her, corrected by me and then pronounced in open court on this the 7th day of January 2015) (Ms. S.L.Ladkhan) IV Addl.Chief Metropolitan Magistrate, Bangalore.
ANNEXURE List of witnesses examined for complainant :
PW.1 : Augustine D'lima
List of exhibits marked for complainant :
Ex.P.1 : Certified copy of memorandum of transaction
Ex.P.2 : Letter issued by accused No.1 and 2
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Ex.P.3 : Letter dated 14.11.1998 issued jointly by accused No.1 and 2 Ex.P.4 : Letter dated 19.4.2000 issued by accused No.1 to complainant.
Ex.P.5 : Certified copy of the arbitration proceedings Ex.P.6 : Letter issued by Investor Services Ex.P.7 & 8 : Certificates issued by the Syndicate Bank. Ex.P.9 : Statement issued by Punjab National Bank List of M.O.s marked for complainant : NIL List of witnesses examined on behalf of accused : NIL List of documents marked on behalf of accused :
Ex.D.1 : Certified copy of Claim statement of complainant. Ex.D.2 : Certified copy of the deposition of the complainant in OS 1309/2002 Ex.D.3 : Certified copy of the WS in OS 1309/2002 Ex.D.4 : Certified copy of the order sheet in OS 8866/01 Ex.D.5 : Certified copy of the complaint in OS 8866/2001.
(Ms. S.L.Ladkhan) IV Addl.Chief Metropolitan Magistrate, Bangalore.
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07.01.2015
State by Sr.APP
Accused
For judgment
ORDER
(pronounced in open court vide separate order) Acting U/s. 248 (1) of Cr.P.C. accused No.1 is acquitted for the offences punishable U/s.406, 420, 465, 506 of IPC.
Bail bonds of the accused and surety stands cancelled.
(Dictated to the stenographer, transcribed and computerised by her, corrected by me and then pronounced in open court on this the 7th day of January 2015) (Ms. S.L.Ladkhan) IV Addl.Chief Metropolitan Magistrate, Bangalore.
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