Bangalore District Court
Mrs. K. Jaya Ramesh vs Mr. Ajit R. Rao on 19 September, 2022
IN THE COURT OF XXXIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL UNIT, BENGALURU. (ACMM34)
PRESENT: Smt.PARVEEN A BANKAPUR,B.Com.LLB.
XXXIV ADDL. CHIEF METROPOLITAN
MAGISTRATE,
Dated : This the 19th day of September, 2022.
C.C.No.53913/2017
COMPLAINANT : Mrs. K. Jaya Ramesh
W/o. Sri Ramesh Kodi
Aged about 61 years,
R/at House No.33, "Sumukha" ,
Karthik Nagar, LRDE Layout, Outer
Ring Road, Marathahalli,
Bengaluru 560 037.
Rep. By her husband & GPA Holder
Sri Ramesh Kodi
S/o Late K. Krishna Murthy,
Aged about 67 years,
R/at H.No.33, "Sumukha" ,
Karthik Nagar LRDE Layout, Outer
Ring Road, Marathahalli,
Bengaluru 560 037.
(By Mr.Ganesh Bhat Y.H Advocates)
V/s
ACCUSED : Mr. Ajit R. Rao
S/o. Late Idya Raghu Rao
Aged about 62 years,
Proprietor of Life Sytle Projects,
GF4, Lifestyle Terrace,
No.804, 12th Main, Vinayaka Layout,
Nagarabhavi 2nd Stage,
Behind Dr. Ambedkar College,
Bengaluru 560 072.
Also at:
Mr. Ajit R. Rao
S/o. Late Idya Raghu Rao
Aged about 62 years,
2 C.C.No.53913/2017
Proprietor of Life Sytle Projects,
R/at Lifestyle Terrace,
No.804, 12th Main, Vinayaka Layout,
Nagarabhavi 2nd Stage,
Behind Dr. Ambedkar College,
Bengaluru 560 072.
(By Mr.R.S.Hegde, K.Venkatesh &
N.Gangadhar Advocates)
1 Date of Commencement 03.04.2017
of offence
2 Date of report of offence 10.05.2017
3 Presence of accused
3a. Before the Court 07.08.2017
3b. Released on bail 07.08.2017
4 Name of the Complainant Mrs.K.Jaya Ramesh
5 Date of recording of 10.05.2017
evidence
6 Date of closure of evidence 24.05.2022
7 Offences alleged U/s 138 of the Negotiable
Instruments Act.
8 Opinion of Judge Accused is not found guilty.
JUDGEMENT
The Private Complaint is filed under Section 200 of Cr.P.C against the accused alleging that he has committed the offence punishable under Section 138 of Negotiable Instruments Act.
2. The brief facts of the complaint are as follows:
The complainant submits that Accused is engaged in the business and commercial activities of construction of sale of 3 C.C.No.53913/2017 apartments, house/villas, real estate development, marketing and sale etc., It is further submitted that Accused is one of the relative of Complainant and her family members and as such, the Complainant and her family members had reposed utmost trust and faith on the Accused. It is further submitted that Complainant and her son by Sharath K Udupa and Hemanth K Udupa receiving gift in the year of 2006 in the form of monis from Sri Ranganatha Upadhya, being a land developer holding out premises, assurances and undertaking to sell transfer and convey a two bedroom apartment project named Lifestyle Terrace under construction at property situated in Bengaluru.
It is further submitted that the Accused had induced the Complainant and her son Sharath K to pay in all sum of Rs.31,51,000/ to him as detailed as under;
Sl. Cheque Date Chq. Reference Payment No. 1 319516 08.09.2006 HSBC Chq from Sharath Udupa Rs.10 lakhs 2 319517 07.12.2006 HSBC Chq from Sharath Udupa Rs.8.5 lakhs 3 319518 01.05.2007 HSBC Chq from Sharath Udupa Rs. 5 lakhs 4 319519 05.10.2007 HSBC Chq from Sharath Udupa Rs.5 lakhs
5. 319520 19.05.2008 HSBC Chq from Sharath Udupa Rs.1,01,000/- 6 133227 28.07.2008 HSBC Chq from Sharath Udupa Rs.1 lakh 7 225999 01.08.2008 HSBC Chq from Jaya Ramesh Rs. 1 lakh 4 C.C.No.53913/2017
3. It is further submitted that the Complainant and her family members having their own three floor independent house, believing in good faith that the Accused would honour to the promises transfer and convey the property to them had paid above said amount to the Accused. It is further submitted that it is learnt by the Complainant and her family members that the Accused had clandestinely disposed off the flat designed for them to third party for gains and thus, while Accused has made wrongful gains and unjustly enriched himself, caused wrongful loss to them. It is further submitted that the Complainant and her husband had confronted the Accused with the above fact and demanded of repayment of amount paid by her and her son with interest and compensation. In response to their demand, the Accused agreed and undertaken to repay the said amount received together with interest at 9.25% per annum. Accused has issued 18 Cheques in favour of Complainant and her son in his personal account bearing No.13731000009723 of HDFC Bank, Rajajinagar, Bengaluru. The said Cheques are as under;
Sl.No. Chq. No. In favour of Amount
1 000189 Sharath K Udupa Rs. 2 lakhs
5 C.C.No.53913/2017
2 000190 Sharath K Udupa Rs. 2 lakhs
3 000191 Sharath K Udupa Rs. 2 lakhs
4 000192 Sharath K Udupa Rs. 2 lakhs
5 000193 Sharath K Udupa Rs. 2 lakhs
6 000194 Sharath K Udupa Rs. 2 lakhs
7 000195 K Jaya Ramesh Rs. 2 lakhs
8 000196 K Jaya Ramesh Rs. 2 lakhs
9 000197 K Jaya Ramesh Rs. 2 lakhs
10 000198 K Jaya Ramesh Rs. 2 lakhs
11 000199 K Jaya Ramesh Rs. 2 lakhs
12 000200 K Jaya Ramesh Rs. 2 lakhs
13 000140 K Jaya Ramesh Rs. 2 lakhs
14 000141 K Jaya Ramesh Rs. 2 lakhs
15 000142 K Jaya Ramesh Rs. 2 lakhs
16 000143 K Jaya Ramesh Rs. 2 lakhs
17 000144 Hemanth K Udupa Rs. 2 lakhs
18 000145 Hemanth K Udupa Rs. 2 lakhs
4. It is further submitted that after issuing of Cheques, the Accused had assured that he will make arrangement to clear the Cheques amount within 2 3 months. Accordingly, the Complainant had presented the afore said Cheques mentioned at Sl.No.7 to 11 on 3.4.2017 and Sl.No.12 to 16 on 4.4.2017 through her banker Canara Bank, Marathahalli branch, Bengaluru for encashment and said Cheques were dishonoured with reason "Account closed" as intimated by the bank endorsement dtd.4.4.2017 and 5.4.2017. It is further 6 C.C.No.53913/2017 submitted that Complainant got issued statutory legal notice on 10.4.2017 to the Accused through Registered Post on his correct address and same is served upon the Accused on 13.4.2017, till date neither caused any reply to the legal notice or paid the amount covered under the aforesaid Cheques. Hence, the Accused has committed an offence punishable u/Sec.138 of N.I. Act.
5. After issuance of summons, accused appeared before the court and enlarged himself on bail. Plea was recorded, read over and explained to the accused, who pleads not guilty and claims to be tried. Hence, the case is posted for complainant's evidence.
6. The GPA Holder of complainant, who is husband of Complainant is examined PW1 and got marked documents Ex.P1 to Ex.P.36 and closed her side.
7. Accused was examined U/S 313 of Cr.P.C. Incriminating evidence appearing in the complainant's evidence was read over and explained to the accused who denies the same. Accused has examined Registrar of the Canara Bank as DW1, Manager of SBI Bank, Marathahalli examined as DW2, 7 C.C.No.53913/2017 Manger of HDFC Bank, Bengaluru examined as DW3, employee of Axis Bank, Bengaluru is examined as DW4 and got marked Ex.D1 to Ex.D6. Further, Accused examined himself as DW5 and closed his side.
8. Heard both counsels at length in great detail.
9. Upon hearing the arguments and on perusal of the materials placed on record, the following points arise for my consideration.
1) Whether complainant proves beyond all reasonable doubts that accused in discharge of legally recoverable debt has issued 10 Cheques bearing 1) No.000195, 2) No.000196,
3) No. No.000197 4) No. No.000198 5) No.000199 6) No.000200, 7) No.000140 8) No.000141 9) No.000142 and 10) No.000143 for sum of Rs.2 lakhs each all are dtd.3.4.2017 all drawn on HDFC Bank, Rajajinagar branch, Bengaluru in favour of the complainant which came to be dishonoured with an endorsement "Account closed" on 5.4.2017 and in spite of service of notice accused has not paid the Cheques amount and thereby committed an offence under Section 138 of N.I.Act?
2) What Order?
10. My findings on the above points is:
Point No.1: In the Negative 8 C.C.No.53913/2017 Point No.2: As per final order for the following:
REASONS Point No.1:
11. Existence of legally recoverable debt is a sine qua non for prosecuting the case under Section 138 of Negotiable Instruments Act. For convenient purpose the essential ingredients to constitute offence under section 138 of N.I.Act is summarized as below:
(i) That there must be a legally enforceable debt.
(ii) That the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes the legally enforceable debt.
(iii)That the cheque so issued had been returned due to "insufficient funds/ Account closed".
12. It is the core contention of the complainant that. Accused is land developer and had received from the complainant and her son Sharath K Udupa to pay in all sum of Rs.31,51000/ to his holding out promises, assurances and undertakings to sell, transfer and convey a two bed room apartment measuring 1228 sq.ft.of super built up area in the residential apartment project named "Lifestyle Terraces". Form 9 C.C.No.53913/2017 out of 10 apartments allocated to his share under the joint development agreement, he had sold 9 apartments including the apartment bearing No.GF1 and retained 1 Apartment. He has sold the GF1 to third parties instead of complainant and her son inspite of collecting amount of Rs.31,51,000/ from them and thus cheated them. When the complainant and her son asked for refund of their amount with interest, the accused had issued 18 cheque in favour of complainant and her son, which are dishonored with reasons that account closed.
13. In order to bring home the guilt of the accused, complainant examined her GPA holder none other then her husband as PW1 and reiterated the contents of complaint in his examinationinchief. He has also placed the original GPA executed by the complainant at Ex.P1, two receipts at Ex.P2 and 3, letter issued by the accused is at Ex.P4, Cheque bearing No.000195, 000196, 000197, 000198, 000199. 000200, 000140, 000141, 000142, and 000143 all are dated 03.04.2017 each cheque for Rs.2 lakhs at Ex.P5 to 14, Ex.P15 to 24 are the bank endorsements. Ex.P25 to 28 are the bank challens, Ex.P29 is the copy of legal notice. Ex.P30 is the 10 C.C.No.53913/2017 postal receipts, Ex.P31 and 32 are the postal acknowledgements, Ex.P33 is the email with affidavit, Ex.P34 is the certified copy of agreement of sale, Ex.P35 is the cancellation agreement, and Ex.P36 is the certified copy of sale deed.
14. The documents produced by the complainant of course established that complainant meets out the procedural requirements of Section 138 of Negotiable Instrument Act, but it is to be considered whether all these documents establish the offence committed by the accused.
15. The Negotiable Instruments Act raises two presumptions. One contained in Section 118 and the other in Sec. 139 thereof. For the sake of convenience Sec 118(1) of the N.I. Act is extracted here below:
118. Presumptions as to negotiable Instruments Until the contrary is proved, the following presumptions shall be made ;
(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was 11 C.C.No.53913/2017 accepted, indorsed, negotiated or transferred for consideration.
1. To (g) . . . . . . . . . . . .
Provided that where the instrument has been obtained from its lawful owner, or from an person in lawful custody thereof, by means of an offence of fraud, or has been obtained from the maker or acceptor thereof by means of an offence of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him".
16. Further Section 139 of the Negotiable Instruments Act reads as under:
"139, Presumption in favour of holder. 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, of any debt or other liability."
Scope and ambit and function of the presumption U/s 118(a) and Sec 139 of NI Act came to be considered by the Hon'ble Apex Court of Indian in Krishna Janardhan Bhat Vs Dattatraya G.Hegde (2008 AIAR (Criminal 151) The Supreme Court has laid down the law in the following phraseology.
" D Negotiable Instruments Act 1881, Secs 139, 138--Presumption undersame arises in regard to second aspect of the matter provided under Sec 138--12 C.C.No.53913/2017
Existence of legally enforceable debt is not a matter of presumption under Sec 139 It merely raises presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability - Merely an application of presumption contemplated under Section 139 of N.I.Act should not lead to injustice or mistaken conviction."
17. Further, said decision was followed by Hon'ble High Court of Karnataka in Kempanarasimhaiah Vs P.Rangaraju & Others ( 2008 (5) KCCR 3371). Relevant paragraph of the said judgment reads as under: "12. As to the provisions of Sections 138 of N.I.Act, the following principles emerge from the above observations of Hon'ble Supreme Court at para Nos 21, 23, 25, 26 and 34 of its Judgment in the above said case of Krishna Janardhan Bhat Vs Dattatraya G.Hegde, AIR 2008 SC 1325.
(i) Section 139 of the Act merely raises a presumption that the cheque was issued towards discharge in whole or in part in any debt or other liability, which presupposed legally enforceable debt. Existence of legally recoverable debt is not a matter of presumption under Section 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." ( para 21) 13 C.C.No.53913/2017
(ii) The question as to whether the presumption stood rebutted or not, must be determined keeping in view the other evidences on record. Where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. (para 26)
(iii) 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 records (para 23)
(iv) Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Further more where as prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is " preponderance of probabilities'" ( para 23 & 25)
(v) Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies ( para 25)
(vi) Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be deliberately balanced (para 34)
18. Factual matrix of the case is required to be tested on the anvil of principles emerging from the abovereferred decisions.
19. On perusal of the oral and documentary evidence placed by the complainant, it reveals that the present 14 C.C.No.53913/2017 complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with regard to taking cognizance of the offnece punishable under Section 138 of N I Act.
20. It is pertaining to note that the GPA holder of the complainant is examined as PW1 and he has been partly crossexamined by the learned counsel for accused. Thereafter, the further crossexamination is deferred. But after taking sufficient opportunity PW2 is not tendering crossexamination. After giving sufficient time and opportunity PW1 himself not available for cross examination. Hence, his evidence is discarded.
21. Even through the GPA holder of the complainant is examined as PW1, he has not available for further crossexamination by the accused, hence his evidence is discarded. Even though the complainant has filed present complaint against the accused for the offence punishable under section 138 of Negotiable Instrument Act, but he has not tendered crossexamination. Inspite of sufficient time 15 C.C.No.53913/2017 and opportunity PW1 is not available himself for cross examination by the accused and offered for further cross examination. Hence, his evidence is discarded as he is not available for further crossexamination.
22. On perusal of his his part crossexamination, he had admitted the statement confronted to him which is marked as Ex.D1, wherein PW1 admitted the Ex.D1, as per Ex.D1 accused has transferred Rs.5,00,000/ to the complainant on 21092016. Further in the same cross examination PW1 admits that accused had paid Rs.9,00,000/ to the complainant through cheque.
23. Further, accused has examined Registrar of the Canara Bank as DW1, Manager of SBI Bank, Marathahalli examined as DW2, Manger of HDFC Bank, Bengaluru examined as DW3, employee of Axis Bank, Bengaluru is examined as DW4 and got marked Ex.D3 to Ex.D6. It is deposed by the DW 5 that, as per mutual understanding between accused and complainant, commencing from 552011, accused had started 16 C.C.No.53913/2017 repayment of the the amounts received from the complainant and her son which are as follows;
1. On 552011, Rs.25,000/ paid by the cash to the complainant as per Ex.D1.
2. On 2052011, Rs.5,00,000/ paid by cheque to son of the complainant by name Sharath as per Ex.D1.
3. On 1072011, Rs.10,000/ by cash to the complainant as per Ex.D1.
4. On 1092011 Rs.1,00,000/ paid by cheque to the complainant as per Ex.D1.
5. On 27092011 Rs.10,000/ by cash to the complainant as per Ex.D1.
6. On 7102011, Rs.1,00,000/ paid by cheque to the complainant as per Ex.D1 and D5.
7. On 25112011, Rs.1,00,000/ paid by cheque to the complainant as per Ex.D1 and D4.
8. On 21012011, Rs.1,00,000/ paid by cheque to the complainant as per Ex.D1 and D4.
9. On 18052012, Rs.1,00,000/ paid by cheque to the complainant as per Ex.D1 and D5.
10. On 11102012, Rs.15,000/ by ECS to complainant as per Ex.D1.
11. On 262014, Rs.4,00,000/ paid by cheque to the complainant as per Ex.D1 and 4.
17 C.C.No.53913/2017
24. Therefore, from the documents at Ex.D1 to 5 it is clear that accused has paid Rs.14,60,000/ to the complainant and her son prior to the presentation of the cheques.
25. Further, the accused has deposed that, as per mutual understanding he had made repayment of the amount to complainant and her son as under;
1. On 25112014, Rs.1,00,000/ paid by cheque to the complainant as per Ex.D1.
2. On 422015, Rs.2,00,000/ paid by cheque to the son of complainant by name Hemanth as per Ex.D1.
3. On 822015, Rs.2,00,000/ paid by cheque to the son of complainant by name Hemanth as per Ex.D1.
4. On 10032015, Rs.25,000/ by cash paid to the complainant as per Ex.D1.
5. On 31052016, Rs.1,00,000/ paid by ECS transfer to complainant's account as per Ex.D1 and D6.
6. On 29062016, Rs.50,000/ paid by ECS transfer to the account of Hemanth as per Ex.D1.
7. On 21092016, Rs.5,00,000/ ECS transfer to complainant's account as per Ex.D1 and D6.
8. On 13022017, Rs.5,00,000/ paid by cheque to the complainant as per Ex.D1 and D5.
9. On 2322017, Rs.5,00,000/ paid by cheque to the complainant as per Ex.D1 and D5.
26. Therefore as per the Ex.D1 to 6 accused had made payment to the complainant and her son for sum of 18 C.C.No.53913/2017 Rs.21,75,000/. The accused has made payment more than cheque amount.
27. Considering all these aspects of the case and on perusal of evidence led by defence, it is clear that the accused had made payment to the complainant more than cheque amount. On the other hand, the Complainant has failed to establish that existence of legally enforceable debt which is prerequisite condition to prosecute u/Sec.138 of N.I.Act. Presumption u/Sec.113 and 118 (A) of N.I. Act cannot be extended to presume that there is exists legally enforceable debt. Hence, viewing from any angle the Complainant has failed to establish existence of legally recoverable debt. It is also right that mere issuance of Cheque without corresponding legally recoverable debt is not an offence. In the instant case also the Complainant has not established the existence of legally recoverable debt. Under these circumstances, the imperative conclusion is that Accused has not committed an offence punishable under Sec.138 of N.I. Act. This will entails in acquittal of the Accused. Therefore, I answer the Point No.1 in the Negative.
19 C.C.No.53913/2017Point No.2 :
28. For the discussion made above, I proceed to pass following:
:ORDER:
Acting U/S 255(1) of Cr.P.C., the accused is acquitted for the offence punishable Under Section 138 of Negotiable Instrument Act.
His personal bond stands cancelled.
(Dictated to the stenographer, transcribed by her, corrected by me and then pronounced in the open court on this 19th September, 2022) (PARVEEN A BANKAPUR) XXXIV ACMM, BENGALURU.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 Mr. Ramesh Kodi
2. Documents marked on behalf of complainant:
Ex.P.1 G.P.A.
Ex.P.2 & Ex.P3 Amount paid receipts
Ex.P.4 Letter issued by the Accused
Ex.P.5 to 10 Cheques
Ex.P14
Ex.P.5(a) to Signatures of the Accused
Ex.P.14(a)
Ex.P.15 to Bank endorsements
Ex.P.24
Ex.P.25 to Bank challans
Ex.P.28
Ex.P.29 Office copy of Legal Notice
Ex.P.30 Postal receipts
Ex.P.31 & Postal acknowledgements
Ex.P.32
Ex.P.33 Email correspondence
Ex.P.34 Certified copy of Agreement of sale
20 C.C.No.53913/2017
Ex.P.35 Certified copy of cancellation of Agreement
Ex.P.36 Certified copy of Sale Deed
3. Witnesses examined on behalf of Accused :
D.W.1 Mr. Karunya Murthy D.W.2 Mr. Devendrakumar Singh D.W.3 Mr. Pradeep D.W.4 Mr. Nagaraju D.W.5 Mr. Ajith R. Rao
4. Documents marked on behalf of Accused:
Ex.D.1 Payment receipt
Ex.D.2 Email correspondence
Ex.D.3 Account statement
Ex.D.4 Bank statement
Ex.D.5 Account Statement
Ex.D.6 Account Statement
(PARVEEN A BANKAPUR)
XXXIV ACMM, BENGALURU.