Bangalore District Court
Is Dealing With The Chit Fund Business ... vs In His Vernacular on 26 November, 2016
IN THE COURT OF THE XLII ADDL.CHIEF METROPOLITON MAGISTRATE,
NRUPATHUNGA ROAD, BENGALURU CITY
Dated this the 26th day of November, 2016
PRESENT: A. V. Patil., B.Com, LLB (Spl)
XLII A.C.M.M.,
Bengaluru City.
C.C NO.2
NO.27299/201
299/2015
2015
JUDGMENT UNDER SECTION 355 OF Cr.P.C.
1. Sl.No. of the case : CC.No.27299/2015
2. The date of commence of evidence: 20.09.2016
3. The date of Institution : 17.10.2015
4. Name of the Complainant : Mysore Sales International Limited,
Chit Funds Divisions,
Having its registered Office at MSIL
House, No.36, Cunningham road,
Bangalore-52.
Having its Branch at Basavanagudi,
Represented by its authorized
signatory Smt. S. Geetha,
Aged about 54 years.
5. Name of the Accused : Pradeep Kumar K
S/o Keesar Sing, major
No.160, 1st Main, 2nd cross,
Opp Indian Statistical Institute,
R.V Nikethan,
Muthuruya Naga,
2 C.C.No.27299/2015
Kenchenahalli,
Bangalore- 560059.
6. The offence complained of : U/s.138 of N.I. Act
7. Plea of the accused on
his examination : Pleaded not guilty
8. Final Order : Accused is acquitted
9. Date of such order : 26.11.2016.
JUDGMENT
1. This case has been registered against the accused on the basis of the complaint filed by the complainant u/s 200 of Cr.P.C. for the offence punishable u/s 138 and 142 of Negotiable Instrument Act.
2. The gist of the complainant's case are that:
The Complainant is a Company incorporated under the Company's Act 1956 and is registered in accordance with Law. The complainant is dealing with the Chit Fund business under the provisions of Chit Fund Act. The accused became a chit subscriber of Complainant No.DL-07/13. The accused bid the chit and received the prize amount on 30.07.2014. Accused fails to pay the monthly installments as agreed and is due for sum of Rs.3,61,750/- along with interest and other charges. On repeated requests from the complainant, accused had issued a cheque bearing No.934199 dated 08.07.2015 drawn on Syndicate Bank, Chamarajpet, Bangalore for a 3 C.C.No.27299/2015 sum of Rs.3,61,750/- towards repayment of chit amount. The complainant presented said cheque for enchashment through his banker i.e. Vijaya Bank Ltd., Gandhibazar, Bangalore. However, the said cheque was dishonoured for the reason 'insufficient funds'. To that effect the banker issued memo dated 28.08.2015. Thereafter on 09.09.2015 the complainant got issued legal notice through RPAD to the accused. It was served upon the accused. Even after receipt of the notice, the accused fails to pay the cheque amount. According to the complainant, the accused has committed an offence punishable u/s 138 of N.I. Act. Accordingly the complainant filed the complaint on 17.10.2015.
3. In pursuance of the summons, the accused has appeared through Counsel and got enlarged on bail by executing necessary documents. The copy of the complaint was furnished to the accused, as required under law. As there is sufficient material, plea was recorded against the accused on 09.08.2016 and explained to the accused in his vernacular, for which the accused pleaded not guilty and claims to be tried.
4. In order to prove the case, the authorized person of the complainant Company examined as PW1 and got marked Ex.P1 to 6 and closed the side. In the cross examination of PW1, Advocate for accused got marked Ex.D1 to 6. Then the statement u/s 313 Cr.P.C 4 C.C.No.27299/2015 came to be recorded on 05.10.2016, wherein the incriminating evidence appearing against the accused was read over and explained. Accused denied the incriminating evidence read over to him. Accused not adduced any defence evidence.
5. Heard the arguments and perused the records.
6. On the basis of the above facts, the following points arise for my consideration:
1) Whether the complainant proves that the accused towards discharge legal recoverable debt issued cheque bearing No.934199 for Rs.3,61,750/- dated 08.07.2015 drawn on Syndicate Bank, Chamarajpet Branch, Bangalore in favour of complainant, on presentation for encashment it was returned as 'insufficient funds' and in spite of receipt of legal notice, the accused failed to pay the cheque amount within the statutory period and thereby the accused has committed an offence punishable u/s 138 of N.I. Act?
2) What order?
7. My findings on the above points are as under :
Point No.1: In the Negative Point No.2: As per final order, for the following:
REASONS
8. Point No.1:-
No.1 In order to prove the case, the authorized person of the complainant Company filed affidavit in lieu of examination-in- 5 C.C.No.27299/2015 chief and has reiterated the allegations made in the complaint and oath. She also got marked documents Ex.P1 to P6. Ex.P1 is the letter of authority, Ex.P2 is the cheque, Ex.P2(a) is the signature of accused, Ex.P3 is the bank memo, Ex.P4 is the office copy of the legal notice, Ex.P4(a) is the postal receipt, Ex.P4(b) is the postal acknowledgement, Ex.P5 is the account extract, Ex.P6 is the complaint. In the cross-examination accused has put up the specific defence that he paid the entire chit amount, accused is also member of other two chits and in those chits accused has deposited Rs.70,000/- each, inspite of payment of entire chit amount the cheque collected towards the security has been misused and filed false complaint. No legal notice served upon the accused.
9. Accused has not entered the witness box. However, in the cross examination of PW1 got marked Ex.D1 to 6. Ex.D1 to D4 are the Challans for remittance, Ex.D5 is the Chit pass book, Ex.D6 is the Final notice dt:27.06.2016.
10. This is all the oral and documentary evidence placed on by the complainant and accused in support of their respective contention.
11. The learned Counsel for the complainant argued that, the accused not disputed that he is the member of the chit, receipt of the prize amount, cheque in question pertains to his account and his signature on it. It is the contention of the accused that he has paid 6 C.C.No.27299/2015 the entire chit amount. The said contention is not supported by any admissible evidence. The ingredients of Sec.138 and 142 are duly complied with. Hence, prayed to convict the accused.
12. Per contra, the learned Counsel for the accused submits that complainant has not produced any documents to show that accused is due to pay an amount as claimed in the cheque. The amount deposited by the accused has not taken into consideration by the complainant. The pass book supplied by the complainant discloses the amount deposited by the accused. On 29.07.2016 complainant got issued final notice to the accused and as per the said notice accused is due to pay an amount of Rs.1,78,031/-only. The cheque amount is much more than the claim made in the Ex.D6/final notice. PW1 does not know the exact date on which the legal notice was issued. The accused has not received any legal notice from the complainant. The documents produced by the accused in support of his contention falsify the claim made by the complainant. Hence, prayed to acquit the accused.
13. Before considering the case on merits, it is necessary to note that in a ratio lay down by Hon'ble Apex Court in a citation reported in (2010) 11 SCC 441 (Rangappa Vs. Sri Mohan). In said citation the Hon'ble Apex Court discussed about the various citations including the above referred citation and in para No.15 held that; 7 C.C.No.27299/2015
".........Furthermore, Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the interference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability...............Since ...............Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant............"
14. In the light of principle laid down in the above case let me appreciate the present facts of the case.
15. The accused has not disputed the chit transaction with the complainant, Ex.P2/cheque belongs to his account and signature on it. In view of the principle lay down by the Hon'ble Apex Court of India in the above referred decision the complainant discharged his initial burden. By virtue of section 118 and 139 of Negotiable Instruments Act and in view of the ratio laid down in the above referred decision the presumption is in favour of the holder of the cheque i.e., complainant. Now the burden lies on accused to lead the rebuttal evidence to disprove the fact that he has not issued Ex.P2/cheque to the complainant for discharge of debt or liability. 8 C.C.No.27299/2015
16. Now whether the said presumption is rebutted by the accused is to be seen. To substantiate the defence accused has placed entire reliance on the material elicited in the cross examination of PW1 and the documents produced at Ex.D1 to 6.
17. In the light of the arguments of complainant and accused now the question is whether the evidence placed on record by the accused is sufficient to rebut the presumption?
18. Before appreciating the evidence on record, it is necessary to note the law laid down by Hon'ble Apex Court of India referred above in Rangappa V/s Mohan case as to how the drawer of the cheque rebut the presumption. For the sake of convenience the observation made by the Hon'ble Court is reproduced "it is settled position that when an accused has to rebut the presumption u/s 139, the standard of proof for doing so is that of 'preponderance of probabilities'." Therefore, if the accused/drawer of the cheque is able to raise a probable defence which creates doubts about the existence of 'legally enforceable debt or liability, the prosecution can fail."
19. Keeping in mind the observations made by the Hon'ble Apex Court in the above referred decision let me see the facts of the case on hand. As per the complainant allegations accused is the subscriber of Chit No. DL-07/13 and did not remit the monthly subscription and on repeated request from the complainant towards 9 C.C.No.27299/2015 repayment of the amount issued the cheque in question. Per contra, the defence of the accused is that he is not due to pay any amount as claimed by the complainant and no cogent material placed by the complainant to show that as on the date of the issuance of the cheque there was a due of amount mentioned in the cheque. The statement of account produced by the complainant discloses that the date of termination of chit as 16.07.2017 and the cheque collected towards the security has been misused by the complainant and filed false complaint.
20. At out set it is necessary to note that complainant has not produced chit agreement said to have entered between complainant and accused. It is the definite case of the accused that Ex.P2/cheque has not given to the complainant for discharge of any debt or liability. The cheque which was collected by the complainant towards security has been misused and filed this false complaint. Accused was not due to pay the amount mention in the cheques as on 08.07.2015. In order to prove the said defence accused has placed the reliance on the material elicited during the course of cross examination of PW1 and on the documents produced at Ex.D1 and 6.
21. Now the question is whether the documentary evidence placed on Ex.D1 to 6 and material elicited during the course of cross examination of PW1 is sufficient to rebut the presumption. Ex.D1 10 C.C.No.27299/2015 and D2 are the receipts are not in respect of the chit of the subject matter of the case. Therefore, those two documents are no way helpful to the accused. Ex.D3 is the receipt dated 15.12.2014 through which the accused had deposited Rs.25,000/- on 15.12.2014 and Ex.D4 is the receipt dated 19.12.2015 through which accused had deposited sum of Rs.35,200/-. Ex.D6 is the final notice issued by the complainant to the accused in respect of the subject matter of the chit on 27.06.2016 calling upon the accused to pay the installment due to the tune of Rs.1,78,031/-.
22. As noted supra in the instant case, it is alleged that as accused fails to remit the regular subscription complainant insisted for payment, at that time accused issued the disputed cheque. In the memo dated 10.11.2016 filed by the complainant it is alleged that as on 28.10.2016 accused was due to pay an amount of Rs.2,39,288/- in addition to the future liability of Rs.1,00,000/-. According to the learned Counsel for complainant as on 28.10.2016 the accused was due to pay an amount of Rs.2,39,288/-. Admittedly the cheque in question is dated 08.07.2015 and the cheque amount is Rs.3,61,750/-. The learned Counsel for complainant submits that Sec.32 of the Chit Fund Act empowered the complainant to claim consolidated payment for all future subscription in case the subscriber fails to pay the subscription as and when fell due. No 11 C.C.No.27299/2015 doubt as per the said provision in case the subscriber fails to pay the subscription regularly as alleged in the chit agreement the subscriber shall be liable to pay the consolidated payment of all future subscriptions forthwith provided the Foreman has to demand the future subscription by writing. It is not the case of the complainant that due to failure to pay the subscriptions regularly the Foreman called the accused to pay the future subscriptions by issuing notice as required u/s 33 of Chit Fund Act. Without following the procedure prescribed under the Chit Fund Act the complainant has no right to call the subscriber to pay the future subscription in consolidated manner. In view of non following the procedure the argument of learned Counsel for complainant to the effect that the accused issued the cheque for present and future liability can not be accepted.
23. If the memo filed by the complainant dated 10.11.2016 has taken into consideration the complainant has included the future liability in the disputed cheque. In the absence of following the prescribed procedure by the Foreman the complainant has no right to call the subscriber to make the payment of future subscriptions forthwith. If the future liability alleged to have claimed by the complainant to the tune of Rs.1,00,000/- is excluded in that case absolutely no material placed by the complainant to show that 12 C.C.No.27299/2015 accused is due to pay the amount covered under the disputed cheque.
24. It is also worth to note that the ledger extract is produced at Ex.P5. As per the said ledger extract the date of commencement of chit is 29.03.2014 and termination of chit is 16.06.2017, the duration is shown as 40 months. The complainant has not produced the agreement said to have entered into between the complainant and accused. There is no whisper in the complaint to what amount the accused bid the chit, how much installments have been deposited and how much installment have not been paid even after become due and how much interest has been charged. On this point the learned Counsel for accused cross examine PW1. We found the said cross examination at page No.3. For the sake of convenience the same is extracted and reproduced here:
"ÀDgÉiÁ¦ JµÀÄÖ ºÀtPÉÌ aÃn ©qï ªÀiÁrgÀÄvÁÛ£É, JµÀÄÖ PÀAvÀ£ÀÄß PÀnÖgÀÄvÁÛ£É, JµÀÄÖ PÀAvÀ£ÀÄß PÀlÖ®Ä ¨ÁQ G½¹PÉÆAqÀrgÀÄvÁÛ£É ªÀÄvÀÄÛ JµÀÄÖ §rØ ºÁPÀ¯ÁUÀĪÀÅzÀÄ JA§ «µÀAiÀĪÀ£ÀÄß £ÉÆÃn¸ï, zÀÆgÀi ªÀÄvÀÄÛ ªÀÄÄRå «ZÁgÀuÉAiÀÄ°è ºÉý®è JAzÀgÉ EgÀ§ºÀÄzÀÄ JAzÀÄ £ÀÄrAiÀÄÄvÁÛgÉ. .. . . . ."
It is evident from the above reproduced evidence that no details with regard to the bid amount, payment of installments made by the accused, due installments and the rate of interest has disclosed either in 13 C.C.No.27299/2015 the legal notice or complaint. Even nothing has been stated in that regard in the examination in chief.
Further has stated as under:
"¦gÁå¢ DgÉiÁæUÉ ¢£ÁAPÀ27.06.2016 gÀAzÀÄ ¤ÃrzÀ ¥ÉÊ£À¯ï £ÉÆÃn¸ï £ÉÆÃr M¦àPÉÆArzÀÝjAzÀ zÁR¯ÉAiÀÄ£ÀÄß ¤r-6 JAzÀÄ UÀÄgÀÄw¸À¯Á¬ÄvÀÄ. amï CVæªÉÄAmï£ÀÄß ºÁdj¹¢ÝgÁ JAzÀgÉ UÉÆwÛ®è JAzÀÄ £ÀÄrAiÀÄÄvÁÛgÉ. ¢£ÁAPÀ 30.07.2014 gÀAzÀÄ DgÉiÁæUÉ ZÉPï ªÀÄÆ®PÀ gÀÆ.3,67,192 ºÀtªÀ£ÀÄß ¥ÁªÀw¸À¯Á¬ÄvÀÄ. F §UÉÎ AiÀiÁªÀÅzÉà zÁR¯É ºÁdj¹®è. DgÉÆæUÉ £Á£ÀÄ ºÉüÀĪÀAvÉ ZÉPï ªÀÄÆ®PÀ gÀÆ.3,67,192 ºÀt ¥ÁªÀw¹®è JAzÀgÉ ¸ÀjAiÀÄ®è. . . . . . ."
It is evident from the above reproduced evidence that complainant got issued final notice as per Ex.D6, he has no knowledge as to whether chit agreement is produced in this case and has not produced any documents to show the payment of amount through cheque.
25. It is an undisputed fact that the accused is the member of chit alleged in the complaint, but the accused seriously disputed the claim made by the accused under disputed cheque. The above reproduced evidence makes it clear that complainant fails to plead the particulars with regard to the bid amount, payment of installments made by the accused, due installments and agreed rate of interest either in the legal notice or complaint. Even nothing has been stated in that regard in the oral evidence. In the light of the said evidence perused Ex.D6. It is final notice issued by the complainant to the accused on 27.06.2016 i.e., during the pendency of the present case. Through said final notice the 14 C.C.No.27299/2015 accused called upon to pay Rs.1,78,031/- with interest at 18% . In complaint, the complainant claims that the accused is due to pay an amount of Rs.3,61,750/- as on 08.07.2015. The Ex.D5/account extract discloses that as on 08.07.2015 the accused was due to pay an amount of Rs.3,60,562/-. In the Memo filed by the Complainant it has stated that complainant claimed future liability to the tune of Rs.1,00,000/-. The materials placed on record by the complainant are inconsistent to each other. In the absence of any explanation Ex.D6/final notice falsifies the entire case of the complainant.
26. At the same time it is necessary to note that the complainant has not stated about the payment made by the accused after issuance of the legal notice and before filing of the complaint i.e., in respect of Ex.D3. The authorized signatory of the complainant has been examined as PW1 on 20.09.2016. Even in examination in chief PW1 has not stated about payment made by the accused after filing of the complaint before adducing the oral evidence i.e., in respect of Ex.D4. During trial no where has disclosed about the payment made by the accused to the complainant in respect of Ex.D3 and 4. After completion of final arguments from the accused side the learned Counsel for complainant filed memo on 10.11.2016 stating that during the pendency of the case the accused has deposited an amount of Rs.19,000/- on 21.09.2015 and an amount of Rs.35,200/- on 19.12.2015. No explanation is 15 C.C.No.27299/2015 offered by the complainant why he has not disclosed the amount paid by the accused during the course of oral evidence.
27. The complainant is a registered Company and is under obligation to maintain the accounts in the regular course of business. On appreciation of material placed on record by the complainant it appears that he has not maintained the accounts in the regular course of business as required under law and approached the Court by suppressing true facts.
28. It is the case of accused that cheque was not issued for discharge of debt, which arose in terms of contract. Complainant had not produced the agreement said to have entered into between him and accused. Non production of relevant piece of document i.e., agreement is sufficient to draw the adverse inference against the complainant. In the absence of any cogent evidence about the dues as on the date of issuance of the cheque the defence of accused to the effect that cheque was issued towards security appears to be probable and is sufficient to rebut the presumption. In the light of the evidence on record it cannot be said that the accused issued the disputed cheque for discharge of debt and would not come within the purview of section 138 of the Act.
29. The evidence on record is sufficient to rebut the presumption and to prove that the cheque in question was not received by the complainant for discharge of debt or liability as alleged in the complaint. 16 C.C.No.27299/2015 The accused adduced probable defence which creates doubt about the existence of 'legally enforceable debt or liability' as claimed by the complainant. Therefore, the burden shifts on the complainant to prove that accused due to pay an amount of Rs.3,61,750/- as on 08.07.2015. To substantiate the claim made by the complainant absolutely nothing has been produced on record. On appreciation of material on record in the considered opinion of this Court the allegations made in the complainant against the accused remain in tact without any proof. No iota of evidence placed on record by the complainant to establish that accused was due to pay an amount of Rs.3,61,750/- as on 08.07.2015. The complainant unable to demonstrate the claim made under cheque in question falls within the purview of legally recoverable debt or liability.
30. Basically, insertion of the panel provision under section 138 of Negotiable Instrument Act 1881, is to maintain the healthy business transaction between the people based on faith, belief and understanding. That is why, the drawer of a cheque should not be allowed to abuse the accommodation given to him by creditor. At the same time, the payee or holder of a cheque cannot be permitted to use the penal provision under law as a weapon for unlawful gain or to harass the debtor. To initiate a penal action under section 138 of N.I. Act against a drawer of a cheque, there should not be any kind of lapse on lacuna on the part of the holder of the cheque. Because, the proceedings 17 C.C.No.27299/2015 under section 138 of the Act is not for recovery of money but to punish a dishonest and incredible debtor, who intentionally tries to escape from his liability. That is why, it is the duty after complainant in a given case under the N.I. Act to place a stable and firm case on his behalf before the court. When the case of the complainant itself is shaky, unstable, untrustworthy and doubtful one, then in the opinion of this court, no presumption that is available under law will come to his help. Having regards to the material placed on record, the considered opinion of this Court looking from any angle the complainant miserably fails to establish its case u/s 138 of the N I Act as required under law. Hence, it cannot be accepted. Accordingly, I answer the point No.1 in the negative.
31. No.2 In view of my finding on point No.1 and 2, I proceed Point No.2:-
to pass the following:
ORDER Acting u/s 264 of Cr.P.C. the accused is hereby acquitted for the offence punishable u/s 138 of N.I. Act.
The bail bond executed by the accused shall stands cancelled. (Dictated to Stenographer, transcribed and computerized by her, taken print out corrected, signed by me and then pronounced in the open court this the 26th day of November, 2016) (A. A. V. Patil) Patil XLII Addl. Chief Metropolitan Magistrate, Bangaluru.18 C.C.No.27299/2015
ANNEXURE COMPLAINANT:-
LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT PW1 : Smt. Geetha LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:-
COMPLAINANT
Ex.P1 : Letter of authority
Ex.P2 : Cheque
Ex.P2(a) : The signature of accused
Ex.P3 : Bank memo
Ex.P4 : Office copy of the legal notice
Ex.P4a : Postal receipt
Ex.P4b : Postal acknowledgement
Ex.P5 : Account extract
Ex.P6 : Complaint
DEFENCE:- -Nil-
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE: Nil- LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:-
DEFENCE
Ex.D1 to 4 : Challans for remittance
Ex.D5 : Chit pass book
Ex.D6 : Final notice
(A.
A. V. Patil)
Patil
XLII Addl. Chief Metropolitan
Magistrate, Bengaluru.
19 C.C.No.27299/2015
Judgment pronounced in the open
court vide separate order.
ORDER
Acting u/s 264 of Cr.P.C. the
accused is hereby acquitted for the offence
punishable u/s 138 of N.I. Act.
The bail bond executed by the accused
shall stands cancelled.
XLII A.C.M.M, Bangaluru.