Bangalore District Court
M/S Megacity (Bangalore) vs Persons: H.N.Purushotham on 16 April, 2018
IN THE COURT OF THE XXV ADDL. CHIEF
METROPOLITAN MAGISTRATE, AT BANGALORE
Dated this 16th day of April , 2018.
Present: Smt Shirin Javeed Ansari, BA LL.B(Hon's)LL.M
XXV Addl. Chief Metropolitan Magistrate,
Bangalore.
C.C.No. 3095/2013
Complainant: M/s MEGACITY (Bangalore)
Developers & Builders Ltd.,
a company Registered under the
Companies Act 1956
No.1, Chandralok, 5th Cross,
Gandhinagar, Bangalore-560 009,
Rep by its authorized Representative
& one of the Director of the
complainant company,
Mr.Gangadhareswara C.P.
S/o Puttamadegowda,
Aged about 48 years.
( By Sri K.A.Chandrashekara
Advocate )
- Vs -
Accused persons: H.N.Purushotham,
S/o Late H.N.Nanje Gowda,
Major in age,
R/at No.1189/A,
35th "C' Cross, East End Road,
4th T Block, Jayanagar,
Bengaluru-560 041.
(By Sri Vishnu Hegde-Advocate )
Offence complained of: U/s. 138 of Negotiable Instruments
Act.
2 C.C.No.3095/2013
Plea of accused persons: Pleaded not guilty.
Final Order: Accused is Convicted.
Date of order: 16.04.2018
JUDGMENT UNDER SEC.355 OF CR.P.C
This is the complaint filed under section 200 of
Cr.P.C by the complainant against the accused person
for the offence punishable under section 138 of
Negotiable Instrument Act.
2. The brief facts of the complainant case is
that:
The complainant is a registered company incorporated
under the companies Act 1956, having the registered
office at Bangalore. The complainant company is
represented by one of its director who is duly
authorized by the complainant company to prosecute
the present matter.
3. It is submitted that, the complainant knows
the accused person for the last 8 years. During the
first week of April 2012 the accused approached the
complainant seeking financial assistance of
3 C.C.No.3095/2013
Rs.5,00,00,000/-(Rupees Five crores only) for his
family necessities i.e., to purchase a residential
property at Pampamahakavi Road, Chamarajpet,
Bengaluru with an assurance to repay the same
within 15 days along with bank interest. Taking into
consideration of the long standing acquaintance with
the accused and assurance made by him to repay, the
complainant agreed to pay the said sum to the
accused. Accordingly, on 10.4.2012 the accused and
the complainant entered into an agreement viz., hand
loan agreement, and on the said date the accused
collected Rs.5,00,00,000/-from the complainant in
presence of the witnesses in cash. It is submitted that
on the date of entering into hand loan agreement
dated 10.2.2012 the accused had deposited the
following cheques.
1. The cheque bearing No.346149 dated
20.10.2012 for Rs.1.00 Crore.
2. Cheque bearing No.346148 dated
30.10.2012 for Rs.2 crores.
3. Cheque bearing 346147 dated 9.11.2012
for Rs.2 crores.
4 C.C.No.3095/2013
4. All the cheques drawn on State Bank of India,
Jayanagara 4th Block, Bengaluru with the
complainant. The accused had agreed that if he fails to
pay the same within the time stipulated, the
complainant is at liberty to present the aforesaid
cheques towards the discharge of the aforesaid liability
in favour of the complainant.
5. It is further averred by the complainant that
when the complainant approached the accused on
19.10.2012 i.e., prior to the date of cheque bearing
No.346149 and 346148 the accused requested the
complainant to represent all the three cheques on
9.11.2012 and assured that upon presentation of the
aforesaid cheques the same would be honored.
6. It is submitted that believing and
representation and assurance given by the accused,
the complainant the presented the aforesaid for
collecting through its banker state Bank of Mysore,
SPB Gandhinagara Branch, Bengaluru on 9.11.2012.
However the said cheques returned unpaid with an
endorsement payment stopped by drawer as per the
5 C.C.No.3095/2013
cheques return memo dated 13.11.2012. The same
were intimated to the complainant on 15.11.2012.
7. It is further averred by the complainant that
the complainant issued a legal notice dated
17.11.2012 to the accused informing the said fact of
dishonour and calling upon him to pay the cheque
amount within 15 days from the date of receipt of the
notice. The legal notice 17.11.2012 issued by the
complainant through RPAD sent to the accused has
been received by the accused on 20.11.2012 . After
service of the notice the accused on the very same day
i.e., on 20.11.2012 approached the complainant and
requested the complainant not to initiate any
proceedings and promised that he would comply the
demand made in the notice on or before 5.12.2012. In
spite of the same the accused has not complied the
demand made by the complainant in the said notice as
agreed upon. Hence, the complainant being aggrieved
by the conduct of the accused has filed the present
case and prayed to convict the accused person for the
offence punishable under section 138 of Negotiable
6 C.C.No.3095/2013
Instrument Act and to award the compensation to the
complainant. Hence, this complaint.
8. In pursuance of the process issued, the
accused person appeared before the court on
19.1.2016 and is on bail.
9. Copy of the prosecution papers are furnished
to the accused person as required under law.
10. Plea under Sec.138 N.I.Act is framed , read
over and explained to the accused person in
vernacular. The accused person pleaded not guilty
and claimed the trial.
11. PW1- got examined and got marked the
documents at Ex.P.1 to Ex.P.13 for the complainant .
The complainant also examined one Mr.Balaram C as
PW2.
12 . The incriminating circumstances found in
the case of prosecution against the accused is read
over and explained to them in vernacular. The accused
persons denied the same. The accused got
7 C.C.No.3095/2013
examined himself as DW1 but did not produce any
documents
13. Heard arguments and perused the material
on record.
14. 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 is/are guilty of
alleged offence?
2. What order ?
15. My findings to the above points
are as follows"
Point No.1 :In the Negative.
Point.No.2 :As per final order for
the following:
REASONS
16.Point No.1: It is case of the complainant
that the accused and the complainant having
acquaintance with each for about 8 years, when the
accused has approached the complainant for want of
financial assistances to purchase a residential
8 C.C.No.3095/2013
property at Pampa Mahakavi Road, Chamarajpet,
Bengaluru, the complainant agreed to pay the same
and accordingly the complainant paid Rs.5 crores to
the accused with a condition to repay the same along
with bank interest. accordingly on 10.4.2012 the
complainant and the accused entered into an
agreement i.e., hand loan agreement wherein the
accused person received Rs.5,00,00,000/-from the
complainant and also deposited three cheques
1. The cheque bearing No.346149 dated
20.10.2012 for Rs.1.00 Crore.
2. Cheque bearing No.346148 dated
30.10.2012 for Rs.2 crores.
3. Cheque bearing 346147 dated 9.11.2012
for Rs.2 crores.
17. Towards payment of the above mentioned
hand loan amount within the period of 15 days but the
accused failed to repay the said amount for which the
complainant presented above mentioned cheques
through his banker for collection on 9.11.2012 but by
said cheques returned with an endorsement "payment
stopped by drawer" as per the cheque return memo
13.11.2012. Accordingly, legal notice dated
9 C.C.No.3095/2013
17.11.2012 came to be issued against the accused
which is duly served upon the accused 20.12.2012.
Despite of that the accused has neither paid the
cheque nor reply to the said notice. Hence, being
aggrieved by the conduct of the accused the compliant
has filed the present complaint.
18. On the other hand it is the specific defense of
the accused that he has not received any hand loan
from the complainant. The accused has disputed the
very transaction and that he was in financial need
during said period. The accused has submitted that
he has not purchased any residential property at
Pamampa Mahakavi Road, Bengaluru and has not
assured for payment of any amount to the
complainant within 15 days. He has also not agreed
to pay the bank interest since he has not received any
hand loan amount. There is no question of repayment
of the same. The accused has not issued disputed 3
cheques to the complainant for discharge of any legal
liability and the said disputed agreement dt.10.4.2012
as well as the said disputed 3 cheques are
10 C.C.No.3095/2013
manipulated by the complainant with dishonest
intention to make false claim even though there is no
contractual relationship of any kind between the
complainant and the accused. The disputed cheques
are sham documents and the complainant through
his persons manipulated the said cheques and the
agreement. In fact, the accused has also found
recently that the complainant company has no
financial capacity and literally, the company had
stopped its function long back.
19. It is further contended by the accused that
the complainant has no right to present the disputed
3 cheques for encashment since there is no legally
enforceable debt or dues. To avoid misuse as well as
with bonafide intention, the accused has given
instructions to the bank for stop payment. In fact ,
the accused has also given reply to the notice
dt.17.11.2012 . The accused has not at all requested
the complainant to not to initiate any proceedings or
not agreed about the unlawful demands of the
complainant. The accused has disputed the entire
11 C.C.No.3095/2013
claim of the complainant and contended that the said
disputed cheques are not issued to the complainant .
The accused is not liable to pay any amount to the
complainant The accused further contends that he has
not committed an offence punishable u/s.138
Negotiable Instrument Act . The persons of the
complainant manipulated the said cheques.
20. It is further contended by the accused that
he had approached C.P.Yogeshwar who is brother of
complainant Gangadareshwara. Said C.P.Yogeshwar
was the minister at Government of Karnataka and
under these circumstances, was forced to approach to
take service in accordance with law. Said
C.P.Yogeshwar promised to the service, but, later he
has failed to provide service after some days. At the
time of the assurance of C.P.Yogeshwar, he had
collected the blank signed 3 cheques and signed on
the blank stamp papers as security. In fact,
C.P.Yogeshwar promised to provide the service in
accordance with law. He has demanded
Rs.1,00,000/- as his service charges. Since no service
12 C.C.No.3095/2013
was provided and the said C.P.Yogeshwar failed to
keep his promises, the accused asked him to return
the said disputed instruments i.e the cheques and
blank signed stamp papers. The said C.P.Yogeshwar
did not return the disputed cheques. Hence, the
accused has given stop payment instructions to his
banker by intimating the same to C.P.Yogeshwar.
Subsequently, the complainant raised a false claim
against the accused by manipulating the 3 signed
blank cheques and blank signed stamp papers . The
said documents are sham and manipulated.
Therefore, on all these grounds the accused prayed to
dismiss the complaint with costs.
21. During the course of arguments, the
learned counsel for complainant vehemently argued
before this court that the accused has issued 3
disputed cheques in favour of the complainant for
having received the hand loan amount from the
complainant for the purpose of purchasing the
property . Despite of receipt of hand loan the accused
could not repay the said hand loan within the period
13 C.C.No.3095/2013
stipulated and deliberately given stop payment
instruction to his banker. Therefore, the intention of
the accused to give stop payment instruction is in
order to avoid the liability and payment to the
complainant. The complainant has duly issued a
notice in favour of the accused on 17.11.2012 and the
same is duly served upon the accused on 20.11.2012.
In the cross examination portion the accused / DW 1
had admitted that upon the cover of the statutory
notice issued by the complainant the residential
address of the accused is mentioned.
22. It is further argued by the learned counsel
for the complainant that Ex.P.12 plays an important
role in the present case wherein Ex.P.12 is the notice
dt.8.4.2014 issued by the accused to the
Sri.C.P.Yogeshwar, Sri.C.P.Gangadareshwara and
M/s.Megacity, Bangalore, the Developers & Builders
ltd. According to the complainant the accused has
issued Ex.P.12, the notice against the above
mentioned persons merely after lapse of 1 ½ years.
In the said notice the accused has admitted issuance
14 C.C.No.3095/2013
of the present 3 disputed cheques. But, has also
stated that the complainant has not paid any loan of
Rs.5 crores to the accused. The accused has also
admitted the loan agreement dt.10.4.2012 in the said
notice. But, it is contended that the said cheques and
agreement was issued to the complainant for the
purpose of completion of the legal problems in the
property bearing municipal No.88, 88/1, 88/2, 88/3,
88/4, 88/10 and 89 (CTS No.44 measuring 2 acres
and 34 guntas at Chikkanna Garden, Bangalore).
Therefore, the complainant's counsel argued before the
court that the accused himself admitted issuance of
the cheques in dispute in favour of the complainant.
Despite, of admitting the same in the said notice, the
accused /DW1 himself denies this aspect of the matter
in the cross examination.
23. The learned counsel for the complainant
further argued before this court that both the
attesting witnesses to the loan agreement have been
clearly mentioned before the court. The complainant
has examined his witness Sri Sampath Kumar , but,
15 C.C.No.3095/2013
the accused has not offered to examine his witness
Sri.Balram. This aspect of the matter creates doubt
on the very conduct of the accused. It is further
argued that the accused had received hand loan of
Rs.5 Crores from the complainant for the purchase of
property at Pampamahakavi road, Bangalore. Further
the accused failed to repay the said loan amount
within the stipulated period of time, hence, the
cheques came to be issued in favour of the
complainant as mentioned above. The said cheques
issued by the accused were dishonored for the reason
"payment stopped by the drawer". The accused
deliberately stopped the payment in order to avoid the
liability. Hence, the learned counsel for the
complainant argued that in totality the complainant
has proved his case by way of Ex.P.4 to Ex.P7. The
accused has not rebutted the evidence of the
complainant. Therefore, the accused is liable to be
convicted for the offence punishable u/s.138
Negotiable Instrument Act. The learned counsel also
16 C.C.No.3095/2013
argued that the complainant is entitled for
compensation as prayed for .
24. On the other hand, the learned counsel for
the accused vehemently argued before the court that
the entire case of the complainant is dependent on 3
aspects.
1. Whether there is hand loan transaction
or whether Rs.5 crores of hand loan is
paid to the accused by the complainant ?
2. If any hand loan transaction is taken
place, whether the said amount of Rs.5
Crores was handed over to the accused
person ?
3. Whether there is legally recoverable
debt under the cheques in dispute?
25. The learned counsel further argued that the
complainant has to prove that he has paid Rs.5 crores
to the accused person. The complainant is a limited
company . Every transaction must be assessed and
must be done through, the bank . transparency is
very much necessary in the transaction of the
complainant .
17 C.C.No.3095/2013
26. It is further argued by the learned counsel
for the accused that in para No.2 of the complaint ,
the complainant has stated that loan was issued to
the accused to purchase the property and it was
agreed by the accused that the same will be repaid to
the complainant within 15 days. This shows that the
complainant is a money lender. Therefore, the
learned counsel for the accused raised a question as
to whether the complainant company, has got valid
licence to lend money as per Ex.P1 , the Certificate Of
Incorporation and Memorandum of Association, of the
complainant company. The object of the complainant
company is not to lend money or do money lending
business. This object itself is not contemplated in
the Memorandum of Association, pertaining to money
lending business. But the object of the complainant
company is construction and development of layouts.
According to the complainant , the complainant lent
Rs.5 crores to the accused in cash. Therefore, Sec.20
(a)(f) of Income Tax Act has been violated. The
exclusive burden is casted upon the complainant to
18 C.C.No.3095/2013
prove that he has lent Rs.5 crores to the accused by
way of cash since there was a condition to repay the
amount of Rs.5 crores within a period of 15 days.
Therefore, this aspect of the matter creates doubt on
the very case of the complainant .
27. The learned counsel for the accused further
argued that the ink used in 3 cheque is different. PW1
has not at all transacted with the accused person but
it is Sri.C.P.Yogeshwar who has made the
transactions. Said Sri.C.P.Yogeshwar is none other
than the brother of the Director of the present
complainant company,
28. It is further argued by the defence counsel
that since 2012, the complainant company is not
working. The complainant has not produced any
documents to show that the company is working
since 2012. It is further argued by the learned
counsel for the accused that the father of the accused
purchased the property and the same was claimed by
the muzarai department. The brother of the
complainant was the minister in Karnataka Ministry
19 C.C.No.3095/2013
and to solve the litigation, the complainant collected
the cheques of the accused and the said cheques have
been misused by the complainant . The accused has
not issued any cheques to the complainant at any
point of time. It was the brother of the complainant
who involved in the matter of the accused and took
the cheques of the accused person to resolve the
dispute between the father of the accused and the
muzarai department. Therefore, there exists no legally
enforceable debt. Hence, on all these grounds the
learned counsel for the accused prayed to dismiss the
complaint with costs.
29. In this back ground on careful and
meticulous perusal of the entire material available on
record, it is found that Ex.P.1 is the certificate of
incorporation . Ex.P.2 is Form No.32 issued by the
Deputy Registrar of Companies, Karnataka, Bangalore.
Ex.P.3 is the extract of Board resolution
dt.15.11.2012. Ex.P.4 is the hand loan agreement,
Ex.P.5 is the cheque bearing No.346149 of rs.1 crore,
Ex.P.6 is the cheque bearing No. 346148 for Rs.2
20 C.C.No.3095/2013
crores, Ex.P.7 is the cheque bearing No. 346147 for
Rs.2 crores. Ex.P.8 to Ex.P.10 are the cheque return
memos. Ex.P.11 is the legal notice issued by the
complainant against the accused person
dt.17.11.2012. P11(a) is the postal receipt. Ex.P11(b)
is the courier receipt, Ex.P.11(c) is the postal
acknowledgement . Ex.P.12 is the notice issued by the
accused against Sri.C.P.Yogeshwar,
Sri.C.P.Gangadareshwara, and M/s.Megacity,
Bangalore . Ex.P.13 is the reply notice issued by the
complainant to the notice issued by the accused
person. Ex.P.13(a) (b) are the postal receipts. P13(c)(d)
are the postal acknowledgements.
30. On the other hand, the accused examined
himself as DW 1 but did not mark any documents.
31. The parties have not disputed their
acquaintance with each other in the present case.
The learned counsel for the accused has raised some
basic questions with regard to the transaction alleged
to have been entered into between the complainant
and the accused. The 1st question is whether the
21 C.C.No.3095/2013
complainant has got valid licence to lend money as
per the Memorandum and Articles of Association. On
careful perusal of the Memorandum and Articles of
Association, it is found that no such clause is
included in Memorandum or Articles of Association,
to lend money by the complainant company to any
other person.
32. The learned counsel for the accused has
challenged the financial capacity of the complainant
to lend such huge amount of money to the accused
person . Admittedly, the complainant is the brother
of sri.C.P.Yogeshwara known to the accused person .
This aspect of the matter has been admitted by PW1
in his cross examination. It is again necessary to
make it clear at this point of time that as per the
complainant, he has lent Rs.5 crores to the accused
person to be repaid by the accused within the period of
15 days. The documents alleged to have been entered
into by the complainant and the accused is only
Ex.P.4 , the hand loan agreement. On meticulous
perusal of said hand loan agreement, it is found that
22 C.C.No.3095/2013
the 1st party M/s.Megacity Developers and Builders
ltd., have entered into an agreement, with
Sri.H.N.Purushotham the 2nd party wherein, said
H.N.Purushotham was in dire need of financial
assistance to the tune of Rs.5 crores for his family
necessity and accordingly approached the complainant
for financial, assistance for which the complainant
agreed to lend sum of Rs.5 crores to the accused. The
terms and conditions of the said agreement further go
to state that the accused borrowed sum of Rs.5 crores
from the complainant as hand loan on10.4.2012 and
promised to return the same within 15 days from the
date of execution of hand loan agreement. But, the
important aspect here at this juncture is that the
cheque is not given within the period of said 15 days.
Further it is naratted in the conditions of the said
agreement that the accused has received a sum of
Rs.5 crores from the complainant and hereby
acknowledged receipt of said sum before the
witnessess. It means that the complainant has paid
23 C.C.No.3095/2013
amount of Rs.5 crores the accused person by way of
cash.
33. It is also mentioned in the said agreement,
that the accused has deposited 3 cheques bearing
no.346147 for Rs. 2 crores, cheque no.346148 for Rs.2
crores and cheque no.346149 for Rs.1 crore. All
cheques drawn on State Bank of India 4th block
Jayanagar, Bangalore in favour of the complainant .
The complainant has acknowledged the documents
as mentioned in the agreement.
34. In the back ground of the condition
mentioned above that the complainant has paid cash
of Rs.5 crores to the accused person as hand loan, the
same has to be proved by the complainant . In that
back ground on careful and meticulous perusal of the
cross examination of PW 1, it is found that PW 1 has
clearly admitted in his cross examination that they
have submitted the annual returns to the Registrar Of
Companies and submitted the Income Tax Returns
pertaining to the complainant company. It is further
admitted by PW 1 that they have no hurdle to produce
24 C.C.No.3095/2013
both the returns pertaining to the period from 2010 -
13. But, despite of admitting the same in his cross
examination, till today the complainant has not
produced the said returns. This aspect of the matter
showers the case of the complainant with suspicion.
35. The complainant has admitted in his cross
examination that one C.P.Yogeshwar is his brother.
the complainant and his brother C.P.Yogeshwar
knew the accused person since 8 -9 yrs . They also
know the father of the accused. Having expressed his
acquitance with the father of the accused , PW 1 has
denied the suggestion that there was an agreement of
sale between the father of the accused and the owner
of the property situated in Pampamahakavi road,
Chamrajpet, Bangalore in the year 2008. He has also
denied the suggestion that the muzarai department
claimed that property to be belonging to the
government and there was litigation of muzarai
department in respect of the said property. But it is
admitted by the complainant that his brother
25 C.C.No.3095/2013
C.P.Yogeshwar was the minister of Forest Department
in the year 2012.
36. The complainant PW 1 has clearly admitted
in his cross examination that said amount of Rs.5
crores shown in Ex.P.4 is given by the complainant
company. It means that the amount of the company
has been used in this transaction. If the amount of
the company has been utilized, then there must be
record which should have been reflected into the
statement of company .Generally it is not possible for
any person to keep cash of Rs.5 crores at home or at
the office. Therefore, the complainant should have
withdrawn the said amount either from the account
of the company or from his account. But, the
complainant has not at all produced any statement of
account pertaining to either of the company or of his
personal account. Though the complainant admits
in cross examination that the source of said amount is
from the funds of the complainant company and the
complainant company gave said amount to them in
the form of cash, the complainant company generated
26 C.C.No.3095/2013
said amount from various bank accounts. But the
complainant company has utterly failed to provide the
particulars of the accounts of various banks from
which said amount was generated. If this is so, the
complainant has to produce the source of such
income to the company since every transaction of the
complainant company has to be made in writing and
when the company is lending such huge amount of
Rs.5 crores , then the consent of the other Directors
should have been obtained and the same should have
been made in writing. But, no such document is
coming forth in this regard from the complainant side.
Admittedly, the source of the amount of Rs.5 crores
is not mentioned in Ex.P.4. All the directors of the
company are the income tax assessees. The
complainant has not filed the Income Tax Returns of
any of the Directors in the present case. The
complainant himself has clearly admitted in cross
examination that he has not shown in his personal
Income Tax Returns about the alleged receipt of cash
amount from the complainant company. If at all such
27 C.C.No.3095/2013
huge amount of Rs.5 crores existed as funds of the
complainant company from the year 2010 -13 , then
the complainant should have produced atleast single
piece of document to substantiate his case and to
show his financial capacity to lent such huge amount
of 5 crores to the accused.
37. Though PW 1 admits in his cross
examination that their company has advanced such
loan to other companies such as Co Priya Farm and
Resorts, Fashion Forum Pvt Ltd, etc, but, nowhere it is
forthcoming that the complainant has got valid
licence to advance such huge loans. PW 1 has also
shown his ignorance by saying that he does not know
whether the complainant company has got valid
licence for advancing loans. PW 1 being the Managing
Director of the company does not know about this
aspect of the matter .
38. PW 1 has clearly admitted in his cross
examination that the cheques involved in this case i.e
the disputed cheques are given as security cheques.
Though PW 1 voluntarily admits in his cross
28 C.C.No.3095/2013
examination that the said amount in cash was in the
custody of the company directors , but, absolutely no
single source has been produced in this regard before
the court.
39. Though there was a clause in the alleged
Ex.P.4 - agreement, that the accused has to repay the
alleged amount of Rs.5 crores to the complainant
within 15 days from the date of receipt, but, no any
intimation or notice has been issued to the accused
person prior to the issuance of demand notice in the
present case. This aspect of the matter again showers
the case of the complainant with suspicion. Since
there was a clause in Ex.P.4 that the accused is
required to repay the alleged amount within 15 days,
the complainant should have made atleast some effort
to issue notice or demand the claim prior to the
issuance of legal notice in the present case. But, no
such efforts have been done by the complainant in
this regard. Admittedly, the accused issued Ex.P.12,
notice and has also filed PCR No.9589/14 which is
pending before other court for consideration. All these
29 C.C.No.3095/2013
aspects of the matter creates a doubt on the very
financial capacity of the complainant to lend hand
loan of Rs.5 crores by taking the same from the
company Directors. Absolutely no documents are
produced by the complainant to show that either the
company or the company Directors were possessing
such huge amount of money with them. Absolutely no
documents have been produced by the complainant to
show that from where such huge amount was brought
or withdrawn. The complainant has not even taken
trouble to examine any of the other Directors to show
that such huge amount of 5 crores was lent by the
company Directors.
40. The complainant has also examined one
Mr.Balram C who is none other than the signatory
witness to Ex.P.4 . This witness was summoned by
the court and has identified his signature on Ex.P.4
which came to be marked at Ex.P.4(b). This witness
has shown his acquaintance with the complainant
and the accused. He has deposed before the court
that he knows the complainant and its Directors since
30 C.C.No.3095/2013
15 years. They all belong to one and the same district.
They came to know each other by virtue of real estate
business. This witness has also shown his
acquaintance with the accused person since 15 years.
PW 2 has clearly admitted in cross examination that at
the time of executing Ex.P.4, the hand loan agreement,
the Directors of the complainant were present and
they have signed the said document. But on careful
perusal of Ex.P.4, it is found that except
Sri.C.P.Gangadereshwara and the accused and the
witnesses Sri Sampath Kumar and PW 2 Balaram C.
no other persons have signed Ex.P.4. If at all other
Directors of the complainant company were present at
the time of execution of Ex.P.4, they should have
signed the said document. But, none of the directors
except Sri C.P.Gangadareshwara have signed the
same. This witness has shown his ignorance as to
when and who purchased the stamp paper for Ex.P4.
He has also shown his ignorance as to where it was
typed. On careful perusal of the entire evidence of this
witness PW 2 , it is found that the witness nowhere
31 C.C.No.3095/2013
deposes the mode of payment alleged to have been
made to the accused person . Therefore, this aspect of
the matter creates heavy cloud on the case of the
complainant. Generally no ordinary prudent man will
possess such huge amount of Rs.5 crores in cash. If at
all the company Directors had given such huge
amount of Rs.5 crores , what made the complainant
not to file the Income Tax Returns either of the
company directors or of the company to substantiate
his case. The non production of the Income Tax
Returns either of the company directors or of the
company gives an opportunity to the court to draw
adverse inference against the complainant. The
complainant has absolutely failed to produce any
documents before the court showing their turnover or
income .
41. In this back ground this court has carefully
gone through the defence raised by the accused
person in order to rebut the case of the complainant. It
is the defence of the accused that he has not raised
any hand loan from the complainant. There exists no
32 C.C.No.3095/2013
legally enforceable debt. The accused has not issued
the disputed cheques in discharge of the legal liability.
In fact, there was a dispute pertaining to the property
of the father of the accused and muzarai department
and since the brother of the complainant was the
Minister of Forest in the Government of Karnataka for
the said period, he promised to resolve the said
dispute as per the advice made by the complainant
himself. Accordingly the accused was forced to
approach said C.P.Yogeshwara to take the service .
Accordingly as per the assurance of C.P.Yogeshwara,
said C.P.Gangadareshwara collected 3 blank signed
cheques and also the signatures on blank stamp
papers as security and promised to provide service to
the accused in accordance with law. Apart from this
said C.P.Yogeshwara also demanded Rs.1,00,000/- as
his service charge. Since C.P.Yogeshwara failed to
keep his promise, the accused asked him to return
the cheques and the stamp papers. But, said
C.P.Yogeshwara did not return the cheques and the
stamp papers, therefore, the accused has given stop
33 C.C.No.3095/2013
payment instruction to his banker pertaining to the
disputed cheques.
42. In this back ground it is pertinent to note
the well established principle of law before
considering the conduct of the accused to find out as
to whether or not he has been able to rebut the
statutory presumption available u/s.139 Negotiable
Instrument Act. It is to be considered that whether
the complainant has proved the existence of legally
enforceable debt. It is only after satisfying that the
complainant has proved the existence of legally
enforceable debt or other liability , the court has to
proceed to draw a presumption u/s.139 of the
Negotiable Instrument Act and thereafter find out as
to whether or not the accused has rebutted the said
presumption.
43. In the light of the above , it is necessary to
find out as to what is the position in law about the
presumption u/s.139 of Negotiable Instrument Act
and to what extent the presumption u/s.139 of
Negotiable Instrument Act extends.
34 C.C.No.3095/2013
44. The Hon'ble Supreme Court in the case of
Krishna Janardhan Bhat v/s Dattatraya Hegde
reported in 2008 AIR SCW 738 had an occasion to
consider this aspect of the matter. The brief of the
ratio laid down by the Hon'ble Apex Court of India is
as under :
"---------- indisputably a mandatory presumption is
required to be raised in terms of Sec.118 (b) and
Sec.139 of the Act. Sec.13 (1) of the Act defines
"Negotiable Instruments" to mean a promissory note,
bill of exchange or cheque payable either to order or to
the bearer --------"
Sec.138 of the Act has got 3 ingredients
namely:
1. that there is legally enforceable debt or
2. that the cheque was drawn from the account of the
bank for dishonor in whole or in part of any debt or
other liability which pre supposes a legally enforceable
debt
3. that the cheque so issued had been returned due to
insufficiency of funds.
35 C.C.No.3095/2013
The proviso appended to the said section provides for
compliance with legal requirements before a
complaint petition can be acted upon by a court of
law. Sec. 139 of the Act merely raises a presumption
in regard to the second aspect of the matter. Existence
of legally enforceable debt is not a matter of
presumption under Sec.139 of the Act. It merely
raises a presumption in favour of a holder of the
cheque that the same has been issued for discharge of
any debt or other liability.
45. Thus from the observations extracted above,
it is clear that the presumption under Sec.139 of the
Negotiable Instrument Act is only to an extent that
the cheque was drawn for discharge in full or in part of
any debt or other liability and the said presumption do
not relate to the existence of legally enforceable debt
or other liability. Therefore, before drawing the
presumption under Sec.139 of Negotiable Instrument
Act , it has to be seen that whether or not the
complainant has discharged his initial burden as to
existence of legally enforceable debt . No doubt as per
36 C.C.No.3095/2013
Sec.118(a) of the Act, there is a rebuttable
presumption that every negotiable instrument was
made or drawn for consideration and when such
instrument is accepted, it shall be presumed that it
was accepted for consideration. According to Clause
(b) of Sec.118, there is a presumption that every
Negotiable Instrument bearing a date was made or
drawn on such date.
46. Reading of both clauses (a) and (b) of
Sec.118 together makes it clear that as per the
presumption under these clauses, the consideration is
supposed to have been received on the date of the
cheque . If in a given case from the apparent
averment or from the evidence of the drawee of the
cheque it can be gathered that on the apparent date
of the cheque no consideration was paid or in other
words if according to the specific case of the drawee or
holder in due course of a cheque, loan was taken on a
particular day and for the discharge of the same, on
a later date the loanee issued the cheque, the
presumption under Sec.118(a) stands rebutted. In
37 C.C.No.3095/2013
that event, the drawee of the cheque has to prove as a
matter of fact the existence of legally enforceable
debt or other liability as held by the Hon'ble Supreme
Court in Krishna Janardhan Bhat's case referred
supra . In this reported decision, the Hon'ble Supreme
Court has held in Para 32 that:
" An accused for discharging the burden of proof
placed upon him under a statute need not examine
himself. He may discharge his burden on the basis of
the materials already brought on record . An accused
has a constitutional right to maintain silence.
Standard of proof on the part of an accused and that
of the prosecution in a criminal case is different".
47. In this back ground if the cross examination
portion of PW 1 is considered wherein PW 1 has
clearly admitted before the court that such huge
amount of 5 crores was given by the complainant
Directors to the complainant and in turn it was paid to
the accused person. But, absolutely no any document
has been produced before this court to show that the
amount alleged to have been paid to the accused
38 C.C.No.3095/2013
person was received from the company Directors.
Whether the said amount was withdrawn from any of
the bank accounts of either the company Directors or
from the account of the company has not at all been
made clear by the complainant. Unless the
complainant shows the source of said Rs.5 crores
with him ,it cannot be believed that the complainant
has lent Rs.5 crores to the accused person. Under
these circumstances of the case, though a
presumption is raised in favour of the complainant as
per Sec.139 Negotiable Instrument Act as stated
supra, but, the accused has rebutted the said
presumption by raising probable defence before the
court that the said cheque in question is given by the
accused person to the brother of the complainant in
order to resolve the dispute between the Muzarai
department and his father pertaining to the property
belong to the accused person. It is also clearly
admitted by PW 1 that before lending such huge
amount of Rs.5crorers to the accused person , the
complainant have not at all verified as to whether the
39 C.C.No.3095/2013
accused is owing any moveable or immovable property
or not. Without verifying the financial, back ground of
the accused , the complainant has alleged to have
lent Rs.5 crores to the accused . This aspect of the
matter cannot be believed since no person nowadays
lends any money to any other person without
verifying the financial back ground of the person to
whom the money is to be lent. Hence, the
complainant has failed to discharge the reverse
burden casted upon him. Absolutely, the complainant
has not produced any documents to show that from
where did they collect such huge amount of Rs.5
crores. Mere saying that the amount was collected
from the company Directors in his examination-in-
chief affidavit and in the pleading will not be
sufficient. It is the exclusive burden casted upon the
complainant to prove these aspects of the matter by
leading cogent and convincing oral as well as
documentary evidence on his behalf.
48. Admittedly, as stated supra, the accused in
this regard need not even entered into the witness box
40 C.C.No.3095/2013
and prove his debt. The accused need not even
produce any documents. By relying upon the
documents produced by the complainant himself, the
accused can state his defence before the court. By
way of stating the defence before the court the
accused has shaken the very presumption raised in
favour of the complainant in the present case. The
complainant has utterly failed to prove the reverse
burden casted upon him in order to state that the
defence raised by the accused person is false. The
complainant has utterly failed to prove the case
beyond reasonable doubt. It is beyond the
imagination as to any ordinary prudent man will have
an amount of Rs.5 crores in cash with them.
Therefore, the court is of the opinion that the
complainant has utterly failed to prove his case
beyond reasonable doubt and the accused has very
well rebutted the case of the complainant by raising
proable defence. Hence, in view of this I answer
Point No.1 in the negative.
41 C.C.No.3095/2013
49. Point No.2: In view of the reasons stated
and discussed above, the complainant has miserably
failed to prove the guilt of the accused person for the
offence punishable under Sec.138 Negotiable
Instruments Act . Hence, I proceed to pass the
following :
ORDER
Exercising the powers conferred upon this court u/s.255(1) Cr.P.C., the accused is hereby Acquitted of the offence punishable under Sec.138 Negotiable Instrument Act.
The bail bond of the accused and that of the surety if any stand cancelled.
(Dictated to the Stenographer partly transcribed and partly direct on the computer, typed by her , corrected and signed then pronounced by me in the open court on this the 16th day of April , 2018).
(SHIRIN JAVEED ANSARI ) XXV A.C.M.M., BANGALORE.
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Mr.Gangadhareswara C.P. P.W.2 : Balaram.C 42 C.C.No.3095/2013
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P.1 : Memorandum of Article Ex.P.2 : Form No.32 Ex.P.3 : Board Resolution Ex.P.4 : Hand Loan agreement Ex.P.5 to 7 : Three cheques Ex.P.8 to 10 : Bank return memos Ex.P.11 : Acknowledgment Ex.P.12 : Reply of Accused Ex.P.13 : Reply copy Ex.P.13(a)&(b) : RPAD Receipt : Ex.P.13 © & (d) : Acknowledgments
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:- -
DW1 : H.N.Purushotham.
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED
-Nil-
( SHIRIN JAVEED ANSARI ) XXV A.C.M.M.,BANGALORE.
43 C.C.No.3095/201316.4.2018.
For judgment:
ORDER (Judgment pronounced in open court vide separate sheets) Exercising the powers conferred upon this court u/s.255(1) Cr.P.C., the accused is hereby Acquitted of the offence punishable under Sec.138 Negotiable Instrument Act.
The bail bond of the accused person and that of the surety if any stands cancelled.
XXV A.C.M.M., BANGALORE.