Bangalore District Court
Represented By Its Smt.D.V.Shailaja vs S/O Sri.Sadashiva Rao N.K on 12 April, 2021
BEFORE THE COURT OF XXIV ADDITIONAL SMALL
CAUSES JUDGE AND THE MOTOR ACCIDENT CLAIMS
TRIBUNAL & A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 12th DAY OF APRIL 2021
PRESENT: SRI.R.MAHESHA B.A.L. LLB.,
XXIV ADDL. SCJ &
ACMM & MEMBER - MACT
BENGALURU.
1. Sl. No. of the Case CC.No.6104 of 2018
2. The date of 06-12-2018
commencement of
evidence
3. The date of closing 06-03-2021
evidence
4. Name of the Mysore Sales International Limited,
Complainant Represented by its Smt.D.V.Shailaja
W/o M.R.Srinivas,
Aged about 57 years, Foremen,
Chit Fund Division, Mysore Sales
International Limited, No.15,
2nd floor, 5th cross, Gandhinagar,
Bangalore-560 009.
(By Sri.M.V.V., Adv.,)
5. Name of the Sri.Nagaraja Rao Pawar K.S.
Accused S/o Sri.Sadashiva Rao N.K.,
Aged about 56 years,
R/at No.19, 1st Floor, 4th C cross,
Maruthi Nagara, Madiwala,
Bangalore-560 068.
(By Sri.S.V.)
2 C.C.No.6104 OF 2018
SCCH-26
6. The offence U/s.138 of the Negotiable Instruments Act
complained of
7. Opinion of the Accused found guilty
judge
JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
The MSIL has been running the chit funds business since last 13 years. At present MSIL has got 22 number of chit fund units across the state 16 numbers of units in Bengaluru. When matter stood thus, the accused became a chit subscriber in chit bearing No.020DL-06/39 on a monthly subscription of Rs.50,000/- with a tenure of payment of 50 months in Gandhinagar branch of Bangalore. That the accused participated in the auction conducted on 24-10-2016 and bid the chit and after completion of formalities, the prize 3 C.C.No.6104 OF 2018 SCCH-26 money of Rs.18,08,875/- was paid to him as per the chit agreement and provisions of chit funds Act. That subsequent to receiving the prize money of Rs.18,08,875/- the accused was under legal obligation to pay the monthly installment but the accused has not paid the monthly amount of the chit installments. The chit bearing No.020DL-06/39 will get terminated on 18-5-2020 and in view of default payment of the regular installments of chit bearing No.020DL-06/39.That the complainant was constrained to recall the entire amount due as per the provisions of chit funds Act and accused is due of Rs.15,36,409/- including 18% interest. That the accused as on 10-10-2018 is due to pay the complainant company the amount of Rs.15,36,409/- including 18% interest i.e., principle amount of Rs.14,97,180/- plus 18% interest of Rs.39,229/-. That the accused has issued cheque dated 10- 10-2018 bearing No.073444 for a sum of Rs.15,36,409/- drawn on State Bank of India, Rajajinagar branch, Bengaluru. That the complainant presented the cheque for encashment, but the said cheque was returned with a banker's memo dated 12-10-2018 for the reason "Funds Insufficient". That 4 C.C.No.6104 OF 2018 SCCH-26 the complainant company got issued legal notice dated 02.11.2018 calling upon the accused to make payment of the amount due, but neither the accused has replied the notice nor made payment of the amount due. Hence complainant filed this complaint.
3. After filing of this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded.
Thereafter cognizance was taken and registered in Crl.Reg.No.III and summons issued to the accused. In response of summons, accused appeared through his counsel and got enlarged on bail. The plea was recorded, read over and explained to accused, he pleaded not guilty and claims to be tried. Hence, the case is posted for complainant evidence.
4. In order to establish his case, the Foremen of the complainant company himself examined as PW-1 and got marked 6 documents as Ex-P1 to 6 and closed his side.
5. Accused was examined under section 313 of Cr.P.C. incriminating material appearing in the complainant evidence was read over and explained to the accused, who denied the 5 C.C.No.6104 OF 2018 SCCH-26 same, he claims to lead defence evidence. In order to establish his case, the accused examined himself as DW-1, but no documents marked.
6. Heard oral arguments from both counsel and both counsels have filed written arguments.
7. Perused. The learned counsel for complainant would submitted in his written arguments that the MSIL is a government company having registered office in Cunningam road at Bangalore. In addition to various other projects, the MSIL has undertaken the business of chit funds by following the due process of law since last 13 years. At present MSIL has got 22 number of chit fund units across the state. 16 units are in Bangalore only. In the present case on hand, the accused was subscriber in chit bearing No.20DL/06/39 on monthly subscription of Rs.50,000/- with a tenure of payment 50 months in Gandhinagar branch, Bangalore. Whenever person subscribed chit he would be given a pass book, it contain photo of the subscriber, address of the subscriber, date of the commencement of the chit, date of expiry of the chit, payment details, dividend etc., will be mentioned. For 6 C.C.No.6104 OF 2018 SCCH-26 every remittance by the subscriber a challan will be issued with chit number and subscriber number challan number and date. The present accused has submitted the application for enrolment of chit bearing No.DL6/39 for Rs.25,00,000/- with an installment of Rs.50,000/- for 50 months. In pursuance of the registration, agreement came to be entered between accused and MSIL. The accused having taken the amount of Rs.18,08,875/- on 24-10-2016. The accused has not paid the subsequent monthly installments. The duration of the said chit term expired on 18-5-2020. The accused is liable to pay the amount of Rs.15,36,409/- including interest 18% i.e., Rs.39,239/- as on 10-10-2018. On demand for repayment, the accused has issued the cheque bearing No.73444 drawn on SBI, Rajajinagar for Rs.15,36,409/- towards the discharge of his legal liability. On presentation the said cheque returned as Funds Insufficient. The present accused has issued the said cheque with the deliberate intention of chit in the complainant and thereby caused financial loss to MSIL which is government owned company. Being left with no other alternative, the complainant got issued statutory notice on 2- 7 C.C.No.6104 OF 2018 SCCH-26 11-2018 calling upon accused to pay the balance amount. Inspite the said notice served on accused, he did not repaid. So he has committed offence U/s 138 of NI Act and he is liable to pay the double the cheque amount as contemplated U/s 357 Cr.P.C. R/w Section 177 of NI Act. All the relevant document i.e., a copy of the chit pass book and copy of the challan for remittance and copy of the payment voucher, copy of the aadhar card, pan card, minutes book, auction proceedings registered consisting the signature of the accused in the minutes book. A true copy of the ledger copy were produced. Hence praying for convict the accused and ordered to pay the double the cheque amount.
8. On the other hand, learned counsel for accused filed detailed written arguments. In his written argument, he stated that the accused has been falsely implicated by the complainant company, he has not committed any offence as alleged by the complainant. The complainant is a stranger to accused, he never borrowed any loan. Further he stated in his written argument that he know the complainant company, 8 C.C.No.6104 OF 2018 SCCH-26 they running a chit business, he was one of the prized subscriber chits bearing No.020DL/6/39 during the year 2016. In connection to the said chit transaction, he use to make payment some times by cash and some times through cheque in respect of every installment on the date and time at Gandhinagar branch, Bangalore. At the time of subscription, he has given four blank cheques to the complainant for security purpose, it was clearly admitted by PW-1 during cross examination dt.10-02-2021. He has not participated in the chit auction on 24-10-2016. He has not placed bid in the chit, he was the non prized subscriber in the said chit. The disputed cheque was issued to the complainant as a security to chit transaction, he cleared all the chit related payment as non prized subscriber. Inspite of clearing the entire chit amount, the compliannt have misused his cheque which was given as security to the said chit transaction. Further he stated in his written argument that he has paid the chit amount through cheque to complainant by his father bank A/c as detailed mentioned in written arguments from 16-2- 2017 to 12-7-2017. He produced one bank A/c statement of 9 C.C.No.6104 OF 2018 SCCH-26 accused i.e., SBI, Rajajinagar, 5th Block, Bangalore A/c No.10193837191. This statement contains from 12-02-2017 to 15-07-2017. The complainant has filed a false case with an intention to harass the accused. The accused never instructed the complainant to present the cheque . The complainant herself filled cheques and presented it and same was admitted by the complainant during cross examination. Hence he prays for acquit the case and he further seek direction from court that initiate the case against the complainant U/s 250 Cr.P.C. for a filing a false complaint and thereby harassing the accused.
9. After hearing the arguments and perusal of the material placed on record, the following points arise for my consideration :-
POINTS
1. Whether the complainant has made-out the case that the accused has issued the cheque bearing No.073444 dated 10-10-2018 for Rs.15,36,409/- drawn on State Bank of India, Rajajinagar branch, Bengaluru, to discharge 10 C.C.No.6104 OF 2018 SCCH-26 the legally enforceable debt or liability due to the complainant and on presentation of cheque it was returned without encashment with an endorsement as "Funds Insufficient'' and accused failed to make any payment within the stipulated period and thereby accused had committed an offence punishable under section 138 of N.I Act?
2. What order?
10. My answer to the above points is as follows :-
Point No.1 : Affirmative
Point No.2 : As per final order for the
following :-
REASONS
11. POINT NO.1 :- The provision of Section 101 of the Indian Evidence Act provide that the burden of proof rests on the party who substantially asserts it and not on the party who denies it, in fact burden of proof means that a party has to prove an allegation before he is entitle to a judgment in her favour. Further law U/s 103 of Indian Evidence Act amplifies 11 C.C.No.6104 OF 2018 SCCH-26 the general rule of Section 101 that the burden of proof lies on the person who asserts the affirmative of the fact in issue.
12. The burden lies on the complainant to prove the complainant complied with mandatory requirements of Section 138 of NI Act.
The three ingredients of offence U/s 138 NI Act are as under.
1. That there is a legally enforceable debt
2. That cheque was drawn from the account of bank for discharge in whole or in part of any debt or any other liability which presuppose legally enforceable debt
3. That the cheque so issued had been returned due to insufficiency of funds.
The proviso appended to the said section provides for compliance with legal requirements before the complaint/petition can be acted upon by court of law.
13. Section 118A of NI Act deals with special rule of evidence and stated that, every negotiable instrument act is deems to have been drawn for consideration. Section 139 of NI Act enables the court to presume, unless contrary is proved, 12 C.C.No.6104 OF 2018 SCCH-26 that the holder of the cheque received the cheque of the nature referred in Section 138, in whole or in part, of any debt or other liability.
The presumption available U/s 118 and 139 of NI Act is rebuttal in nature, the accused can rebut the same by either entering into the witness box or effectively cross examine the complainant and his witness.
14. The complainant filed this complaint against the accused alleged that the accused has committed offence punishable under section 138 of N.I.Act. The complainant contended that, accused has not paid monthly amount of the chit installments and he is due of Rs.15,36,409/- including 18% interest i.e., principle amount of Rs.14,97,180/- plus 18% interest of Rs.39,229/-. Thereafter accused issued the cheque for sum of Rs.15,36,409/- in favour of the complainant. The complainant presented the same for encashment through his banker, but the said cheque returned with endorsement, " Funds Insufficient ". Thereafter the complainant issued legal notice, the said notice 13 C.C.No.6104 OF 2018 SCCH-26 was duly served on 6-11-2018. Hence this complaint filed by the complainant.
15. During the cross examination of PW-1 clearly and categorically admitted that she is working as Foreman of complainant company since 2016 and she knew all the rules and regulations of MSIL. She further stated during cross examination that, while participating chit subscriber, they collected document of income proof, Adhar card and two passport size photos. Then they entered agreement, they normally done two original agreement, one copy keep in the company, another copy handed over to chit subscriber. Further she admitted during cross examination that while getting prized subscribed amount, they normally get the equalent amount of FD lien and LIC assigned. The accused gave 3rd party immovable property as a mortgage to complainant company. Before we got mortgage 3rd party property they verify documents. If documents are found correct, then company would accept said mortgage. Further the accused attacked PW-1 during cross examiantiondt.27-1- 2021 regarding what are all legal formalities company ought to 14 C.C.No.6104 OF 2018 SCCH-26 follow and what are all documents to be maintained in chit business. PW-1 agreed they maintained all legal formalities and she would produce all documents before this court. Accordingly she has produced all documents in the next hearing dates and also along with written arguments. Further during cross examination, she stated that the present accused paid 34 chit premium and balance of 16 chit premium in 50 lakhs chit number. In 5 lakh chit, accused had paid 22 chit premium installments. The complainant company sent a notice U/S 32 and 33 of chit funds Act. Notice U/s 32 not served on accused in 5 lakh chit. Notice U/s 32 duly served on accused in 50 lakhs chit. Notice U/s 33 duly served in all the chits. Further she undertakes they not produced said notice and acknowledgment, they would produce before court. She admitted that, after bid the cheque gave by the accused for security purpose. Further she explained that the said cheque gave for paying further future premium amount in blank. The disputed cheque was issued by the accused after they sent legal notice. Further she denied they themselves filled 15 C.C.No.6104 OF 2018 SCCH-26 particulars of cheque and other suggestions putforth by accused clearly denied.
16. To disprove the case of the complainant company the accused himself orally examined before this court as DW-1, he stated before court on oath that he was the member of chit, he regularly paying all the premium amount while he entered chit the complainant company get 4 signed blank cheques and address proof documents for security purpose. He did not participated in bid, he did not took any amount from complainant company. He did not received any notice from complainant company. He regularly paying chit premium amount, but he did not took receipt because he had confidence with complainant company. The complainant company has filed false case against this accused by misusing his blank signed cheque. So he pray for dismissal of the complaint. He subjected cross examination by complainant advocate. He admitted during cross examination that he has been working as clerk in B.ED college and the complaint averments of page 3 to 6 he admitted as true. But denied during cross examination that he did not participated in the 16 C.C.No.6104 OF 2018 SCCH-26 bid held on 24-10-2016 and he has no legal obligation to repay Rs.15,36,409/-, principle amount and interest. He clearly admitted that Ex-P1 belongs to his bank A/c and signature on Ex-P1 is also belongs to him. The said Ex-P1 dishonoured when complainant company presented for encashment. Further he denied that Ex-P3 did not served on accused on 6-11-2018 and he denied he has not signed attendance register and he has not participated in bid and he has not received any amount from complainant company and he did not due any amount from complainant company. Further he admitted that he offered one surety for chit and he denied other suggestions.
17. Further it is pertinent to scrutinize the documents produced by the complainant, Ex-P1 is the cheque, the accused himself admitted it belongs to him and signature also belongs to him. He admitted para 2 to 5 of the complaint averments. Admittedly Ex-P1 dishonoured for the reasons stated in Ex-P2. The accused denied Ex-P3 has been not served personally. The complainant produced Ex-P5 postal 17 C.C.No.6104 OF 2018 SCCH-26 track consignment. On perusal of consignment number on Ex-P4 and number in Ex-P5, it shows the said baggage was delivered on accused personally on 6-11-2018 at about 13.40.38 sec. through Bommanahalli S.O, Bangalore. To disprove Ex-P5 accused did not produced any document. So it is proved by the documents that Ex-P3 duly served on accused. So remaining burden lies on the complainant, the accused has been participated in bid and took the amount from complainant company and thereafterwards he was defaulter in paying future subscription amount. This fact was questioned by the accused during cross examination of PW-1. They produced Xerox copy of the documents on 10-02-2021 and 12-03-2021. On perusal of copies furnished by complainant firm copy of the annexure dt.4-2-2016. It shows that he accused subscriber of chit No.20DL/6/39 and he gave nominee details and other particulars of chit and it contains accused signature and foremen signature and another document chit payment voucher, it shows the accused was successful subscriber of chit of Rs.25,00,000/-. He received amount on 3-12-2016 through cheque bearing No.721549 for 18 C.C.No.6104 OF 2018 SCCH-26 a sum of Rs.18,88,075/-. On perusal of another document, auction proceedings register, the said auction conducted on 18-10-2016 at about 4.30 p.m. in the registered office of complainant firm, Cunningham road, Bangalore. In this accused participated in bid and he was the successful bidder on 18-10-2016. It contains signature of auctioner, foreman and other names of subscriber and subscriber number and bid amount bid by other subscriber and highest bid amount. It also contains signature of accused. further on perusal of minutes book, it contains all the particulars who were all participated in bid on 04-02-2016. The accused also put his signature in minute book. The accused get prized amount of Rs.18,22,000/-. Further the complainant produced notice U/s 32 of chit funds Act, it was duly posted to accused address on 25-07-2018. Admittedly it was not served on accused in present case. On perusal of notice U/s 33 of chit funds Act, it was addressed to accused and posted on 31-08- 2018, it was duly served on accused on 3-9-2018. The accused himself acknowledged notice U/s 33, the copy of the same sent to one guarantor/mortgagor Smt.Venkatalakshmi, 19 C.C.No.6104 OF 2018 SCCH-26 No.26, 12th main road, Raghavendra block, Srinagar, Gavipura, Bangalore-50. The said notice duly served on guarantor on 6-9-2018. The complainant firm has produced Xerox copy of the application for enrolment of chit of accused and annexure I and chit payment voucher and Vijaya bank statement showing the release of prize amount to accused dt.9-12-2016 through cheque 26721569 a sum of Rs.18,08,875/- and same day through cheque No.267215560 and Xerox copy of the pay slip of accused. On perusal of agreement, it was registered on 29-1-2016, chit was commenced from 21-4-2016 and chit termination dt.18-5- 2020 and complainant company produced self attested Xerox copy of aadhar card and pan card. Further on perusal of chit ledger subscriber copy of the accused. He has received prized amount of Rs.18,08,875/- through cheque, but afterwards, he was defaulter in paying subscription amount.
18. On careful examination of all the documents of complainant, it is very clear that the complainant filed this complaint well within time and complied all the ingredients of N.I. Act 1881. The presumption Under Section 139 of the Act 20 C.C.No.6104 OF 2018 SCCH-26 is a presumption of law, it is not a presumption of fact. This presumption has to be raised by the court in all the cases once the factum of dishonor is established. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttable evidence depends on the facts and circumstances of each case. Such evidence must be sufficient to prove the case. Therefore a mere explanation is not sufficient to rebut this presumption of law. It is profitable to refer and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.123/2021 arising out of special leave petition (criminal) 1876/2018 between M/s Kalamani Tex and another Vs P.Balasubramanian disposal date on 10-02-2021 (three judges bench). In this case, Apex court held that, once signature on cheque admitted by the accused, court ought to have presume that, cheque was issued as consideration for a legally enforceable debt.
19. As per N.I. Act, the presumption is in favour of holder of cheque. Here, the holder of cheque is complainant and presumption is in favour of complainant. It is burden on the accused to rebut the above presumption. As per Section 118 21 C.C.No.6104 OF 2018 SCCH-26 of N.I Act, presumption has to be raised by the court in all the cases once the factum of dishonour is established, but it is rebuttal presumption. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and should prove beyond any reasonable doubt. The accused has not taken and proved defence to rebut the presumption of law available in favour of the complainant envisaged U/s 118 r/w section 139 of NI Act. Accordingly the case of the complainant is acceptable as the complainant has proved that accused has intentionally not maintained sufficient amount in his account to honour the disputed cheque. Therefore, a mere explanation is not enough to repel this presumption of law.
20. Therefore in my considered view, the complainant established his case by way of documentary as well as oral evidence. Hence my answer to point No.1 in the Affirmative.
22 C.C.No.6104 OF 2018
SCCH-26
21. Point No.2: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. It is worth to note that the offence is of the nature of civil wrong. This court has power to impose both sentence of imprisonment and fine on the accused. The court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Hon'ble supreme court of India in a decision reported in 2015(17) SCC 368 in a case of H.K.Pukhraj Vs D.Parsmal observed that having regard to the length of trial and date of issuance of cheque it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Further accused has to compensate the complainant in terms of money. In the result, I proceed to pass the following:-
ORDER By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.19,75,000/- (Rupees Nineteen lakhs Seventy Five 23 C.C.No.6104 OF 2018 SCCH-26 thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.19,70,000/- shall be payable to the complainant as compensation and remaining amount of Rs.5,000/- shall be defrayed as state expense.
In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith. (Dictated to the stenographer, typed by her directly on the computer, the same is corrected and then pronounced by me in the open court on this the 12th April 2021) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
ANNEXURE
WITNESSES EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW-1: D.V.Shailaja
DOCUMENTS MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P-1: Cheque
24 C.C.No.6104 OF 2018
SCCH-26
Ex.P-1(a): Signature of the accused
Ex.P-2: Bank memo
Ex.P-3: Legal notice
Ex.P-4: Postal receipt
Ex.P-5 : Postal track
Ex.P-6: Letter of authority
WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
DW.1 Nagaraja Rao Pawar DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
NIL (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.