Bangalore District Court
Hdfc Bank Ltd vs Srikant Agarwal on 18 January, 2024
1
KABC0C0224662022
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
PRESENT
SRI.OONKAR MURTHY K.M.,
B.Sc., L.L.M.,
XIV Addl. C.M.M., Bengaluru
DATED ON THIS 18 th DAY OF JANUARY 2024
CASE NO C.C. NO.56583/2022
M/s. HDFC Bank Ltd.,
Regional Office situated at Ground Floor,
Rashtrotthana Bhavan, Municipal No.3/1,
Ward No.77, Nrupathunga Road, Bengaluru-
560 001.
COMPLAINANT
Reptd by its Authorized Signatory
Mrs. Anna Febronia Raymond
(By Sri. B.C. Avinash - Adv.,)
ACCUSED Sri. Srikant Agarwal
C/o. Kailash Chandra Agarwal
2
Aged about 35 years,
No.533, Barfa Nivas, Ground Floor, Hegde
Nagar Main Road, Thanisandra, Dr.
Shivarama Karanth, Bengaluru - 560 077
(By Sri. G. Venkataramasetty - Adv.,)
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused is convicted
Digitally signed by
ONKARMURTHY
ONKARMURTHY K M
KM
Date: 2024.01.18
15:44:57 +0530
(OONKAR MURTHY K.M)
XIV ADDL. C.M.M.,
BENGALURU
JUDGMENT
This is a private complaint filed by the complainant against the accused under Sec.200 Cr.PC alleging the offense punishable under Section 138 of the Negotiable Instruments Act, 1881.
3The brief facts of the complaint are as follows ;
2. The complainant company is a Banking Company within the meaning of Banking Regulation act, 1949, having its registered office at HDFC Bank Ltd., Ground Floor, Rashtrotthana Bhavan, Municipal No.3/1, Ward No.77, Nrupatunga Road, Bengaluru-560001. The complainant is engaged in the business of providing various types of financial facilities.
2.1) The case of the complainant is that, accused has applied for ARC UNSECURED LOANS-JUN21 and the complainant Bank has granted the loan vide Agreement bearing (Account) No.99456696. The accused has availed the said loan. Towards discharge of said loan liability, the accused has issued a cheque bearing No.006149 dtd.30.04.2022 for Rs.82,638/- drawn at ICICI Bank, RK Hegde Nagar branch, Bengaluru in favour of the complainant. Further as per the request of the accused, the complainant presented the said cheque for encashment through its banker i.e., HDFC Bank Ltd., Richmond Road branch, Bengaluru. But the said cheque was returned 4 dishonored for the reason " funds insufficient " vide return memo dated 5.5.2022. Thereafter the complainant got issued legal notice dtd.16.05.2022 to the accused calling upon him to repay the same within 15 days from the date of its receipt. The said notice returned unserved on 31.05.2022 with postal shara "unclaimed". The accused has not paid the cheque amount. Therefore, the accused has committed the offense punishable under Sec.138 of Negotiable Instruments Act, 1881. Hence this complaint.
3. On filing of the complaint, cognizance has been taken for the offense punishable under Sec.138 of Negotiable Instruments Act, 1881 and a private complaint was registered in PCR. No.56431/2022. Sworn statement of the complainant has been recorded by way of affidavit. On hearing the complainant and by considering the documents on record, summons was issued to the accused by registering the criminal case in C.C.No.56583/2022. Later in response to the summons issued, the accused has appeared before the court through his counsel. The accused has been enlarged on bail. Plea of the accused 5 has been recorded. The accused has pleaded not guilty and claims to be tried for which the matter was posted for trial.
4. The sworn statement of the representative of the complainant Mr.Hemanth Kumar.R which has been recorded as PW.1 is treated as his examination-in-chief in view of the decision of the Hon'ble Apex Court reported in (2014) 5 SCC 590 - Indian Bank Association and others Vs Union of India and others - [W.P. (civil) No.18/2013]. To prove the guilt against the accused, the complainant has relied on the documents marked at Ex.P1 to Ex.P6. Thereafter said legal representative has been substituted by another representative by name Mrs. Anna Febronia Raymond who has examined herself as PW.2 and got marked documents at Ex.P7 and P8. The incriminating circumstances in the evidence of the complainant have been brought to the notice of the accused and his statement under Sec.313 of Cr.PC was recorded. The accused has denied the incriminating circumstances. Further to substantiate his contention, the accused has 6 examined himself as DW.1 and got marked a document at Ex.D1 on his behalf.
5. Heard the arguments of counsel for the accused. The counsel for the complainant has not addressed his arguments.
6. The points that arise for my consideration are:-
1) Whether the complainant proves that the accused has issued a cheque bearing No.006149 dtd.30.04.2022 for Rs.82,638/-
drawn at ICICI Bank, RK Hegde Nagar branch, Bengaluru for discharge of legally recoverable debt and the said cheque was dishonored for the reason "funds insufficient". In spite of issuance of notice dated 16.05.2022, accused has failed to repay the loan amount and thereby the accused has committed the offense punishable under Sec.138 of N.I. Act, 1881?
2) What Order?
7. My findings on the above points are as under;
Point No.1 : In affirmative,
Point No.2 : As per final order,
for the following.,
7
REASONS
8. Point No.1: To substantiate his contentions, the representative of the complainant bank Sri.Hemanth Kumar.R has been examined himself as PW.1. In his chief-examination, he has reiterated the entire averments of the complaint. Also has produced the original cheque bearing No.006149 dtd.30.04.2022 for Rs.82,638/- drawn at ICICI Bank, RK Hegde Nagar branch, Bengaluru at Ex.P1. Ex.P2 is the bank endorsement dtd.5.5.2022 showing that the said cheque has been dishonoured for the reason "funds insufficient ". Ex.P3 is the legal notice dtd.16.05.2022 addressed to the accused demanding to pay the cheque amount within 15 days from the date of its receipt. Ex.P4 is the postal receipt showing dispatch of the said notice to the address of the accused on 17.05.2022. Ex.P5 is the postal cover showing that the said legal notice has been returned unserved as "intimation/unclaimed". Ex.P6 is the notarized copy of Power of Attorney showing that PW.1 has been authorized to prosecute this matter. Thereafter the said legal representative has been substituted by another 8 representative by name Mrs. Anna Febronia Raymond who has examined herself as PW.2. She has produced notarized copy of Power of Attorney showing her authority to prosecute the matter at Ex.P7. Also has produced loan account statement at Ex.P8 pertaining to the accused bearing loan account No.99456696 showing balance of Rs.1,49,099/- as on the date of the cheque i.e., 30.04.2022. PW.1 has not tendered for cross- examination. In the cross-examination, PW.2 states that she is aware of the transaction by looking into the documents. She has denied the suggestion that the alleged cheque was issued as a security during borrowing of the loan.
9. The accused to substantiate his case has also examined himself as DW.1. In his chief-examination, he has admitted borrowing of loan of Rs.10 lakhs. Further states that earlier to Covid-19 he has paid three EMIs and has paid Rs.5,000/- during March 2022. Loan tenure is about 36 to 40 months and still the tenure has not expired. He has issued the alleged cheque in blank as a security during borrowing of the loan. He has not issued 9 the alleged cheque for repayment of any loan amount. Legal notice in respect of bouncing of the alleged cheque is not received by him. After appearing in this matter, he has received the notice in respect of Arbitration Proceedings initiated by the complainant bank. Further has produced copy of the Award passed against him in Arbitration Proceedings No.1291/2022(HDFC), wherein the accused/respondent has been directed to pay a sum of Rs.14,06,606.46/- to the complainant bank.
10. By considering the arguments addressed by counsel for the accused, the suggestions made in the cross-examination of PW.1 and evidence of DW.1, the defense of the accused can be deduced as follows;
* Blank cheque issued as a security during borrowing of the loan has been misused.
* Legal notice is not served on the accused.
* PW.2 do not have knowledge of the transaction and she is not competent to depose on behalf of the complainant.
10* There is no signature of the representatives of complainant on the General Power of Attorney produced by them and hence are not valid.
* Cheque is not deposited in the loan account and hence, Sec.138 of N.I. Act is not attracted.
* Arbitration case has been filed and award is passed. Cheque amount is included in the said proceedings and therefore, the present complaint is not maintainable.
Principles:
11. In respect of the proof of the fact that the cheque has been issued for discharge of legally enforceable debt, there is a presumption of law under Sec.139 of Negotiable Instruments Act, 1881 in favour of the holder of the cheque which reads as follows:
Sec.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.
The presumption under Sec.139 of Negotiable Instruments Act is a presumption of law and not the 11 presumption of fact. The presumption has to be raised in all the cases once the factum of issuance of cheque and its dishonour is established. The onus of proof to rebut the presumption lies on the accused. The accused need not rebut the presumption beyond all reasonable doubt. But the accused has to place sufficient materials to convince the court that his case is more probable when it is compared with the case of the complainant. Accused may adduce direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability. Accused need not enter into witness box to discharge his burden. He may rely upon the averments in the complaint, statutory notice and the circumstantial evidence adduced by the complainant during the trial.
12. In the case on hand, the complainant has established the factum of issuance of cheque and its dishonour. Therefore, this court shall raise a presumption that the accused has issued cheque towards discharging the legally enforceable debt. After raising initial presumption it is for this court to consider 12 whether the accused has rebutted the presumption by bringing in cogent materials on record.
Admitted facts of the case:
13. Borrowing of the loan is admitted by the accused. Also issuance of the alleged cheque along with the signature has been admitted.
Defense - Blank cheque issued as a security during borrowing of the loan has been misused:
14. Counsel for the accused has vehemently argued that blank cheque was issued by the accused to the complainant bank during borrowing of the loan. The complainant has filled the other contents of the cheque including name, date and the amount. Date and name of the bank has been affixed with a seal on the cheque. The contents of the cheque have not been filled up by the accused. Still the tenure for repaying the loan is not yet expired. Hence offense U/s.138 of N.I. Act has not been made out against the accused. In the cross- examination, PW.2 has denied the suggestion that a blank cheque was issued by the accused during 13 borrowing of the loan. There is nothing on record to substantiate the said fact except oral assertions of the accused. Even otherwise if it is presumed that blank cheque was issued as a security during borrowing of the loan even then the offense U/s.138 of N.I. Act would be attracted if the balance due as on the date of the cheque is equal to the amount mentioned in the cheque. In support of the said proposition, I would like to rely upon the decision of The Hon'ble Supreme Court in the case of Oriental Bank of Commerce Vs Prabodh Kumar Tewari supra at para 14 and 18 has held as follows;
Para 14. In Bir Singh v. Mukesh Kumar,after discussing the settled line of precedent of this Court on this issue, a two-Judge Bench held:
33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal 14 provisions of Section 138 would be attracted.
34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
[...]
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
Para 18. For such a determination, the fact that the details in the cheque have been filled up not by the drawer, but by some other person would be immaterial. The presumption which arises on the signing of the cheque cannot be rebutted merely by the report of a hand-writing expert. Even if the details in the cheque have not been filled up by drawer but by another person, this is not relevant to the defense whether cheque was issued towards payment of a debt or in discharge of a liability.
(emphasis supplied) In view of the above ratio laid down by the Hon'ble Supreme Court, it is immaterial that the cheque may 15 have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. Under the circumstances, the contention that the contents of the cheque other than the signatures has been filled up by the complainant and has been misused finds no substantiation.
15. Even though it is contended that the alleged cheque was issued as a security while borrowing of the loan, there is nothing on record to substantiate the same except oral assertions. Hon'ble Supreme Court in the case of Sripati Sing Vs. State of Jharkhand and another, at para 17 and 18 has held as follows;
Para 17. "A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the 16 parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow".
Para 18. "When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' 17 the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation".
(Emphasis supplied)
16. In the above precedent, it is clearly held that if a loan is advanced and the borrower agree to repay the amount in a specified time frame and issues a cheque as security to secure such repayment, if the loan amount is not repaid, the cheque which is issued as a security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of Negotiable Instruments Act would flow.
17. In the case on hand, the accused has clearly admitted borrowing of the loan of Rs.10 lakhs from the complainant bank. Even though in his chief-examination, 18 the accused states that he has paid 3 EMIs earlier to Covid-19 and Rs.5,000/- during March 2022, he has not produced any materials to substantiate the same. On the other hand, the complainant has produced statement of loan account pertaining to the accused bearing Account No.99456696 showing that there is due of Rs.1,49,099/- as on the date of the cheque i.e., 30.04.2022. The accused has not disputed the correctness of loan account statement at Ex.P8. Under the circumstances, the complainant has clearly shown that installments due as on the date of the cheque is more than that of the cheque amount. Under the circumstances, by relying upon the above precedent, even though if it is to be considered as blank cheque issued as a security, the same would mature for presentation. When the said cheque has been dishonored for "Insufficient Funds", the contention that the cheque issued for security do not attract the provision of Sec.138 of N.I. Act holds no water.
Defense - Legal notice is not served on the accused:
1918. Accused/DW.1 contends that legal notice dtd.16.05.2022 produced at Ex.P3 is not served upon him. However, the complainant has produced the postal receipt at Ex.P4 showing that the said notice has been dispatched to the address of the accused on 17.05.2022. But postal cover at Ex.P5 shows that said legal notice has been returned unserved with postal shara as "intimation/unclaimed". In the cross-examination, DW.1 has admitted that the address mentioned in the cause title of the complaint is his correct address and the same address is also found to be mentioned in the legal notice at Ex.P3. Under the circumstances, the complainant has clearly shown that legal notice has been sent through registered post to the correct address of the accused and thereby has complied the mandatory requirement of sec.138 of N.I.Act. Furthermore, in adjudication of the said fact, I would like to rely upon the decision in the case of T.Kumar Vs K.Chennakeshavulu - (2021 (2) AKR 219) at para 16 our Hon'ble High Court has held as follows;
20Para 16. When the matter was referred to the Larger Bench of the Hon'ble Supreme Court in C.C.Alavi Haji V. Palapetty Muhammed and Anr.(2007) Cri LJ 3214 answering the reference in para 17 of the judgment it was held as follows:
"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (supra), if the 'giving of notice' in the context of Clause
(b) of the proviso was the same as the 'receipt of notice' a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
(Emphasis supplied by me) 21 In the case on hand, the accused has not repaid the cheque amount within 15 days of his appearing before the court. Under the circumstances, by relying upon the above precedent, the contention of the accused that he has not been served with legal notice and therefore no offense is made out against him holds no water.
Defense - PW.2 do not have knowledge of the transaction and therefore is not competent to depose on behalf of the complainant:
19. The counsel for the accused has argued that PW.2 in the cross-examination has not properly answered the questions and has expressed her ignorance. Therefore she has not competent to depose on behalf of the complainant and no weightage can be given to her evidence. On perusal of evidence of PW.2, in her chief- examination she has reiterated the entire averments of the complaint. In the cross-examination, PW.2 states that she do not know personally as to on what date the accused has approached the complainant bank seeking loan. Further PW.2 expressed her ignorance for a question whether the accused has signed the cheque 22 after filling its contents or earlier to it. She has expressed her ignorance in respect of the date of receiving of the cheque. Also she has expressed her ignorance in respect of date of which the demand notice has given in respect of loan dues. PW.2 has expressed her ignorance in respect of some questions of Arbitration proceedings. However, the suggestion that she do not have knowledge of the alleged loan transaction has been denied by PW.2. She clearly states that loan of Rs.10,08,024/- has been borrowed by the accused. Also states that an amount of Rs.1,49,099/- is due as on the date of the cheque i.e., on 30.04.2022. For a question whether she knows all the information in respect of the loan from the date of borrowing till date, PW.2 answered in affirmative. Also admits the suggestion that Arbitration case No.1291/2022 has been registered against the accused in respect of loan dues. She has also admitted the copy of award passed in the said Arbitration case which is marked at Ex.D1. She also states that complainant's representative by name Sri.Sreenidhi S.N has represented the Arbitration case.
23She also admits an amount claimed in the alleged cheque is also included in the Arbitration proceedings. She clearly states that unsecured loan has been granted to the accused. She has clearly stated that she has gathered due knowledge of the alleged transaction through records. For a suggestion that the alleged cheque issued as security earlier towards EMIs has been misused is denied by PW.2. No such material questions is shown to have remained unanswered which causes prejudice to the accused. Documents produced by the complainant substantiates its case. Under the circumstances, the contention of the counsel for the accused that PW.2 has no due knowledge of the transaction and therefore she is not competent holds no water.
Defense - Cheque amount is included in the Arbitration case where Award is passed and therefore offense U/s.138 of N.I. Act is not attracted:
20. The counsel for the accused has argued that the complainant has initiated Arbitration proceedings in respect of the entire loan amount which also covers the 24 amount claimed under the alleged cheque. Therefore, the present proceedings against the accused is not maintainable. For adjudicating the said issue, I would like to rely upon the decision of the Hon'ble Supreme Court in the case of Sri.Krishna Agencies Vs State of Andhra Pradesh and another , [(2009) 1 SCC 69] wherein at Para 5 and 7 it is observed has follows;
Para 5. In support of his submissions, Mr. Adhyaru referred to the decision of this court in Trisuns Chemical Industry Vs Rajesh Agarwal (1999) 8 SCC 686 - where the same question arose in relation to arbitration proceedings taken during the continuance of a complaint filed under Sections 415 and 420 of the Code of Criminal Procedure. In the said decision, it was held that merely because arbitration proceedings have been undertaken, the criminal proceedings could not be thwarted.
Para 7. We are also of the view that there can be no bar to the simultaneous continuance of a criminal proceeding and a civil proceeding if the two arise from separate causes of action. The decision in Trisuns Chemical Industry case appears to squarely cover this case as well.
(emphasis supplied)
21. In the case on hand, no doubt the complainant has initiated Arbitration proceedings in 25 Arbitration case No.1291/2022 and an Award is also passed on 07.11.2022 directing the accused/respondent to pay a sum of Rs.14,06,606.46/- to the complainant bank with future interest at the rate of 18% per annum from the date of termination till realization. However nothing is brought on record to show that the accused has paid the said amount to the complainant bank. Nothing has been brought on record to disprove the existence of legally recoverable debt to the tune of cheque amount as on the date of cheque. On the contrary, the accused has clearly admitted borrowing of the loan. The statement of loan account produced at Ex.P8 clearly show balance of Rs.1,49,099/- as on the date of the cheque i.e., on 30.04.2022. The cause of action for filing this complaint has arisen on issuance of cheque and its dishonor which amounts an offense U/s.138 of N.I. Act. Under the circumstances, by relying on the above precedent, arguments of the counsel for the accused that in view of the passing of award in Arbitration proceedings, the present complaint U/s.138 of N.I.Act is not maintainable cannot be appreciated.
26Defense - There is no signature of representative of the complainant on the General Power of Attorney produced at Ex.P6 and P7 and hence invalid:
22. No doubt in the cross-examination, PW.2 admits that General Power of Attorney produced at Ex.P7 authorizing her for prosecuting this matter do not contain her signature. Similarly, signature of PW.1 is not also found in the General Power of Attorney produced at Ex.P6. Now it is for this court to consider whether the said GPA's are valid. If the GPA is bipartite where reciprocal obligations are created then without the signature of attorney by way of acceptance, its validity may be under a cloud. However if the same is one sided document appointing some person/employee as attorney to perform some deligated functions, then question of consent do not arise and hence the attorney need not sign and the document remains valid. However, the accused has not disputed the identity of PWs.1 and 2 as the representatives of the complainant company. There is no dispute that Pws.1 and 2 27 employee code are the employees of the complainant company. The employee code of the said representatives is also mentioned in the power of attorney produced before the court. When the identities of PWs.1 and 2 as the representatives of the complainant company has not been disputed, the contention of the counsel for the accused that the General Power of Attorney's produced at Ex.P6 and P7 are invalid for want of signature of PWs.1 and 2 cannot be appreciated.
Defense - Cheque is not deposited in the loan account of the accused and hence offense U/s.138 of N.I. Act is not attracted:
23. The counsel for the accused argued that the disputed cheque at Ex.P1 has been presented to some other account of the complainant and not to the loan account. The cheque is presented only with an intention to bring the case within the jurisdiction of this court. Therefore, offense U/s.138 of N.I. Act is not attracted. Since there is no such statutory obligation on the complainant to present a cheque to particular account, the contention that an offense U/s. 138 of N.I. Act is 28 not attracted for the reason that cheque is not presented in the loan account of the accused inherently has no force.
Conclusion:
24. Under all the circumstances, the complainant has clearly shown that as on the date of the cheque, the loan due was Rs.1,49,099/-. The same is not disputed by the accused. The cheque amount mentioned at Ex.P1 is less than amount due as on the date of the cheque. It is also shown that the said cheque has been dishonored for the reason "funds insufficient". Legal notice is shown to have been issued to the correct address of the accused. Thereby complainant has complied all the mandatory ingredients of Sec.138 of N.I. Act. On the contrary, the accused has admitted borrowing of the loan. There is nothing on record brought by the accused in rebuttal of statutory presumption available to the complainant U/s.118(a) and 139 of N.I. Act in respect of passing of consideration and existence of legally recoverable debt. Hence, the accused is found guilty for the offense 29 punishable U/s.138 of N.I. Act. Accordingly, I hold Point No.1 in Affirmative.
25. Point No.2: The punishment prescribed for the offense U/s.138 of Negotiable Instruments Act is imprisonment for a period which may extend to two years or with fine which may extend to twice the amount of the cheque or with both. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), this court is of the considered view that it is just and desirable to impose fine of Rs.1,20,000/- and out of the said amount, it seems to be proper to award a sum of Rs.1,15,000/- as compensation to the complainant as provided U/s.357(1) (b) of Cr.PC and the remaining sum of Rs.5,000/- shall go to the State. In view of the discussions made while answering Point No.1, I proceed to pass the following.., 30 ORDER In exercise of power vested under section 255(2) of Cr.P.C., I hereby convict the accused for the offense punishable under Sec.138 of Negotiable Instruments Act, 1881.
The accused is sentenced to pay fine of Rs.1,20,000/- (One Lakh Twenty Thousand only) for the offense punishable U/s.138 of Negotiable Instruments Act, 1881. In default of payment of fine, the accused shall under go simple imprisonment for a period of two months.
In exercise of powers vested under section 357(1)(b) of Cr.P.C., out of fine amount a sum of Rs.1,15,000/- (One Lakh Fifteen Thousand only) is ordered to be paid to the complainant as compensation and the remaining Rs.5,000/-
(Five Thousand only) shall go to the State.
31The bail bond of the accused stands canceled. The cash security deposited by the accused is ordered to be continued till expiry of the appeal period.
Free copy of the judgment shall be supplied to the accused forthwith.
(Dictated to the stenographer, transcribed thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 18th day of January, 2024) Digitally signed by ONKARMURTHY ONKARMURTHY KM KM Date: 2024.01.18 15:45:14 +0530 (OONKAR MURTHY K.M) XIV ADDL. C.M.M., BENGALURU ANNEXURE List of witnesses examined by complainant:
PW.1 : Sri. Hemanth Kumar .R PW.2 : Mrs.Anna Febronia Raymond
List of Documents marked by complainant:
Ex.P1 : Cheque
Ex.P1(a) : Signature of the accused
32
Ex.P2 : Bank endorsement
Ex.P3 : Legal Notice
Ex.P4 : Postal receipt
Ex.P5 : Postal cover
Ex.P6 : Notarized Copy of Power of
Attorney dtd.19.07.2022
Ex.P7 : Notarized Copy of Power of
Attorney dtd.20.01.2023
Ex.P8 : Statement of Loan account
List of Witnesses examined by defence:
DW.1 : Sri.Srikant Agarwal List of Documents marked by defence:
Ex.D1 : Award passed in Arbitration Proceeding No.1291/2022(HDFC) dtd.07.11.2022 Digitally signed by ONKARMURTHY ONKARMURTHY KM KM Date: 2024.01.18 15:45:06 +0530 (OONKAR MURTHY K.M) XIV ADDL. C.M.M., BENGALURU