Bangalore District Court
Sri. Yashavanth Raju.K vs Sri. Suresh Kumar on 9 October, 2015
IN THE COURT OF THE XVIII ADDL. CHIEF METROPOLITAN
MAGISTRATE, BANGALORE
DATED : THIS THE 9TH DAY OF OCTOBER 2015
PRESENT: LAKSHMINARAYANA BHAT.K., B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
C.C.NO: 11110/2013
Complainant: Sri. Yashavanth Raju.K,
S/o. C.G.Krishnappa,
Aged about 28 years,
Residing at No: 25,
Thippenahalli,
Nagasandra Post,
Yeshwanthapura Hobli,
Bangalore-560 073.
(Represented by Shri.K. Murthy,,
Advocate)
V/s.
Accused : Sri. Suresh Kumar,
S/o. Late. Hanume Gowda,
Aged about 28 years,
Residing at: Sree
Channakeshwavaswami Nilaya,
C/o. G. Veena and G.Mohan Kumar,
1st Main, 4th Cross, Avanuru
Badavane, Nagasandra Post,
Bangalore-560 073.
(Represented by Shri.C.P.Paveen.,
Advocate)
Offence complained of: U/s.138 of N.I.Act
Plea of accused: Pleaded not guilty
Final order Accused is found not guilty
Date of order: 9/10/2015
2 CC.No: 11110/2013
JUDGMENT
The complaint was filed against the accused for the offence punishable under Section 138 of Negotiable Instruments Act (hereinafter in short referred as N.I. Act.).
2. After filing of the complaint, cognizance of the offence was taken. After recording sworn statement in pursuance of summons, presence of the accused was secured and he was enlarged on bail. The substance of accusation was recorded and the accused pleaded not guilty.
3. To prove the complaint averments, the complainant was examined as P.W.1 and has produced documents marked as per Ex.P.1 to Ex.P.12. The statement of the accused under Section 313 of Cr.P.C was recorded. The accused entered his defence and was examined as D.W.1. He has produced documents marked as per Ex.D.1 to Ex.D.3.
4. Heard the arguments. The learned Advocate appearing for the accused has filed memorandum of written arguments. Both the parties have placed reliance on following reported Judgments.
Citations for the Complainant :-
(1) AIR 2001 S.C.3897(1) in Hitan P.Dalal V/s.
Bratindranath Banerjee
(2) AIR 2010 SC 1898 in Rangappa V/s. Mohan.
3 CC.No: 11110/2013
Citations for the Accused :-
(1) AIR 1977 SC 336 in Loonkaran Sethia etc., V/s. Ivan E. John and others.
(2) 2003(1) DCR 146 in C.Antony V/s. K.G.Ragavan Nair.
(3) II (2007) BC 388 in B.Krishna Reddy V/s.
B.K.Somashekara Reddy.
(4) 2014 (3) DCR 462 in K.Yashoda V/s. K.Venkatesh. (5) 2003(3) DCR 273 in Avon Organics Ltd., Hyd V/s. Poineer Products Ltd., New Delhi and others.
(6) ILR 2008 KAR 5175 In H.R.Halappa & others V/s.H.Devaraju.
(7) ILR 2006 KAR 3579 in M/s. Sathavahana Ispat Ltd V/s. Umesh Sharma and another.
(8) 2008(2) DCR 622 in Manjit Singh Obhan V/s. Satate of Maharashtra & Others.
.
(9) 2012(1) DCR 385 in Santhi V/s. Mary Sherly.
(10) 2009(1) DCR 314 in Gopan V/s. Tonny Varghese. (11) 2006 (2) DCR 305 in M.S.Narayana Menon alias Mani V/s. State of Kerala and another.
(12) ILR 2009 KAR 172 in A.Viswanatha Pai V/s.
Vivekananda.S.Bhat.
(13) 2004(2) DCR 574 in M/s.Ganesh Flour Mills V/s. Jeevan Kumar and another.
(14) (2015) Supreme Court Cases 99 in K.Subramani V/s. K.Damodara Naidu.
(15) AIR 2008 Supreme Court 1325 in Krishna Janardhan Bhat V/s. Dattatraya.G.Hegde.
(16) 2014(3) DCR 488 in Surjit Singh V/s. Amarpal Singh Tiwana.
4 CC.No: 11110/2013
(17) 2006 (3) DCR 494 in Kamalammal
V/s.C.K.Mohanan & another.
(18) AIR 1961 Supreme Court 1316(1) in Kundan Lal Rallaram V/s. Custodian, Evacuee Property, Bombay.
5. After analyzing the averments made in the complaint, oral and documentary evidence placed on record and after hearing the arguments, at this stage the points that arise for my determination are:-
1) Whether the complainant has proved in the month of January 2012 he had advanced Rs.7,80,000/-
hand loan to the accused and Ex.P.1 cheque issued in discharge of the said debt was dishonoured and even after service of notice, the accused had failed to pay the amount and thereby he is guilty of the offence punishable under Section 138 of N.I.Act?
2) What order?
6. My findings on the aforesaid points are as under:-
POINT NO.1 : In the Negative, POINT NO.2 : As per final order, for the following:-
REASONS
7. POINT NO.1:- As per the complaint averments, the complainant and accused are known to each other and in pursuance the accused approached the complainant in the month of January 2012 for his financial assistance and for family necessities. He alleged to have borrowed loan of Rs.7,80,000/- from the complainant by cash and 5 CC.No: 11110/2013 agreed to repay the said amount within one year with interest thereon at 24% per annum. It is further submitted the accused in discharge of the said debt issued a cheque in favour of the complainant dated 26/2/2013 for Rs.7,80,000/- drawn on Axis Bank, Peenya Branch, Bangalore. The complainant presented the said cheque but as per memo dated 26/2/2013 it was returned unpaid with an endorsement "Account closed". The complainant claimed issued legal notice dated 6/3/2013 and informed the accused regarding dishonour of the cheque and called upon him to make payment of the cheque amount. The said notice was duly served on the accused. The complainant in his affidavit filed in lieu of examination-in-chief deposed as per the averments made in the complaint.
8. The accused in his defence evidence admitted Ex.P.1 cheque pertains to his Bank account and his signature appearing in the said cheque. As per his evidence, the complainant is a stranger and he has denied borrowed loan from the complainant or in discharge of the said debt issued Ex.P.1 cheque in favour of the complainant. According to the accused, the contents of the cheque are not filled in his hand writing. The specific case of the accused is that one Muniraju is a money lender and he is also doing Real Estate business. The accused claimed about 4 years back he had handed over 2 blank signed cheques of his account to aforesaid Muniraju and Ex.P.1 cheque is one among them. The accused further claimed he had handed over original partition deed in favour of 6 CC.No: 11110/2013 the aforesaid Muniraju in order to sell the property allotted to the share of the accused in the family partition. It is further admitted Muniraju could not make any arrangements to sell the property. According to the accused, in order to make payment of commission to Muniraju for the sale of the property, he claimed to have handed over blank signed cheques. The accused further admitted even though Muniraju did not make any arrangements for the sale of property, he had failed to return blank signed cheques. It is alleged the aforesaid Muniraju in collusion with the complainant misused the cheque and filed a false complaint for wrongful gain. For the aforesaid reasons he has prayed for dismissal of the complaint.
9. From the documentary and oral evidence placed on record, In proof of advancement of Rs.7,80,000/- hand loan to the accused in the month of January 2012, the complainant has not produced any documentary evidence. As per the evidence placed on record, at the time of advancement of loan the complainant did not insist the accused to execute any documents in support of the transaction such as loan agreement or demand promissory note. The only documentary evidence produced by the complainant in respect of the alleged transaction is Ex.P.11 Diary for the year 2011 maintained by the complainant. According to the complainant, Ex.P.11(a) is the specific entry in respect of advancement of loan in favour of the accused. The contents of Ex.P.11(a) reads.
7 CC.No: 11110/2013
************************************************************ 2012 January Suresh Kumar.H. Amount = 7,80,000/-
Interest = 5,000/-
Interest = 8,000/-
************************************************************
10. It is not in dispute at the time of making Ex.P.11(a) entry the complainant did not obtain the signature of the accused. Even the complainant is not aware the date on which he appears to have filled the contents in Ex.P.11(a). Even regarding the aforesaid payment of interest on two occasion to an extent of Rs.5,000/- and Rs.8,000/- as shown in Ex.P.11(a), the date of payment is also not mentioned. During cross- examination of the complainant, the accused has disputed Ex.P.11(a) entry. It is further alleged the complainant has produced Ex.P.11 Diary in order to substantiate his case and the document has been concocted for the purpose of the case. In Ex.P.11, the entry made in the previous two pages shows over writing of the date as 22/1/2012 and 23/1/2012 has been corrected as 2/1/2012 and 3/1/2012. Therefore, the complainant in order to create Ex.P.11(a) entry pertaining to the complaint transaction appears to have made corrections in respect of the date in the previous pages of Ex.P.11 Diary is also probable. There is every possibility in a blank sheet as per Ex.P.11(a) the complainant has 8 CC.No: 11110/2013 filled the contents cannot be totally ruled out. Moreover, the entry made in the entire Ex.P.11 does not disclose it was entered in the day to day course of business transaction of the complainant. In the above circumstances, no evidentiary value can be attached to Ex.P.11 Diary and Ex.P.11(a) entry pertaining to the complaint alleged transaction. The accused during cross-examination of the complainant and in his defence evidence specifically disputed the financial capacity of the complainant to advance huge amount of Rs.7,80,000/-. As per the evidence of the complainant, he is a business man running garments factory. It was originally in the name and style of M/s. Sri Chowdeshwari Garments and presently in the name of Sri Lakshmi Venkateshwara Enterprises. As per the evidence of the complainant, himself and his brother are partners in the said firm. Ex.P.7 is the provisional registration certificate issued by Government of Karnataka, Directorate of Industries and Commerce in respect of Small Scare Industry. Ex.P.8 is the certificate of registration issued by Central Board of Excise and Customs.
11. During cross-examination, P.W.1 has admitted he is an Income tax assessee. But in this regard the complainant has deposed three inconsistent statements regarding payment of income tax and once he has also denied he is an assessee under the Income Tax Act. As per cross-examination of P.W.1 dated 6/11/2014, he has specifically admitted he had not disclosed advancement of Rs.7,80,000/- hand loan to the accused in the documents submitted to Income tax department. 9 CC.No: 11110/2013 Therefore, from the aforesaid admission, Court can arrive to the safe and definite conclusion that the complainant did not advance any such loan in favour of the accused. The legal presumption is that any person having income exceeding the income tax limits has to pay income tax and he is duty bound to disclose advancement of loan in the documents submitted to the said department. As per the evidence, the complainant claimed he had advanced Rs.7,80,000/- hand loan to the accused by cash. The complaint averments, contents of statutory demand notice and the affidavit evidence of P.W.1 filed in lieu of his examination-in-chief is absolutely silent regarding how the complainant had mobilized huge amount of Rs.7,80,000/-. In order to prove as on the date of transaction in the month of January 2012, the complainant had ready cash of Rs.7,80,000/-, he has not produced any documentary evidence. The complainant had ready cash of Rs.7,80,000/- as on the date of transaction is doubtful. Whether the amount was paid to the accused on the same day the accused had demanded loan or subsequently is not forth coming from the evidence. At this stage, the question arises for determination is whether any prudent man may advance huge amount of Rs.7,80,000/- hand loan with interest thereon at 24% per annum without obtaining any documents from the borrower. In this regard, the evidence of the complainant is unreliable and not trustworthy.
12. In Ex.P.3 statutory demand notice, complaint averments or in the contents of affidavit filed by P.W.1 in lieu of his examination-in-chief, 10 CC.No: 11110/2013 the complainant has not disclosed the date of advancement of loan. It is stated in the month of January 2012 the accused approached the complainant and demanded loan of Rs.7,80,000/-. Nothing prevented the complainant to disclose the date of advancement of loan since it is a huge amount. As per the evidence of the complainant, for family needs and necessities the accused had borrowed the aforesaid loan. Even during cross-examination of D.W.1, the learned Advocate appearing for the complainant had failed to make out the accused was in need of aforesaid money in the month of January 2012. In the absence, a bare statement in the complaint averments that for legal necessities the accused had borrowed Rs.7,80,000/- is unbelievable. The complainant has produced Ex.P.9 Bank account extract obtained from Axis Bank, Peenya Branch, Bangalore for the period 30/6/2010 to 31/3/2014. As per Ex.P.9, in the month of January 2012 the complainant was maintaining maximum Bank balance of Rs.2,73,287/- on 23/1/2012 and minimum balance of Rs.91.21 on 10/1/2012. Even though as on 23/1/2012 the complainant was maintaining Bank balance of Rs.2,73,000/-, the complainant has withdrawn the entire amount and the balance as on 31/1/2012 was only Rs.287/-. It is true the complainant had not claimed he had withdrawn amount advanced in favour of the accused from his Bank account. On perusal of Ex.P.9 Bank account extract, we can make out at no point of time the complainant had maintained substantial Bank balance through out the entire period 11 CC.No: 11110/2013 from 30/6/2010 till May 2014. Therefore, even by producing Ex.P.11 Bank account extract, the complainant was not able to establish his financial capacity to advance loan of Rs.7,80,000/- to the accused.
13. The defence of the accused is that he had handed over two blank signed cheques to Muniraju in connection with sale of his family property is also unbelievable. The accused admitted Muniraju did not make any arrangement for the sale of the said property. The accused has produced Ex.D.1 copy of the registered partition deed and it is also not in dispute in respect of the said property there is a civil litigation. The accused in his defence evidence has not specifically stated the date on which he claimed to have handed over signed blank cheques to Muniraju. In this regard as per the oral evidence of D.W.1, at one instance he has deposed about 4-5 years back he has handed over two blank signed cheques to Muniraju. The accused in this regard has not deposed the date on which he claimed to have handed over those cheques. The accused has also not produced his cheque book record slip or Bank passbook to substantiate his case and the probable date he claimed to have handed over those cheques to Muniraju. During cross- examination, D.W.1 has specifically admitted he is not even aware the serial number of the cheques claimed to have been handed over to Muniraju. The accused during his cross-examination shown ignorance regarding filing of complaint for the offence punishable under Section 12 CC.No: 11110/2013 138 of N.I. Act against him by Janardhan for Rs.6,50,000/- and Purushotham in respect of cheque for Rs.4 Lakhs. But he has admitted Muniraju has issued a notice in respect of dishonour of the cheque for Rs.10,52,000/- and accused claimed to have sent reply to the said demand notice. The accused has not placed any evidence to prove he had handed over Ex.P.1 signed blank cheque to Muniraju as contended in his defence.
14. The complainant has produced Ex.P.10 copy of the registered sale deed dated 15/3/2012 and as per the recitals, the accused had purchased the property from Gireesha.K.A. for a consideration of Rs.10,50,000/-. It appears the complainant has produced Ex.P.10 sale deed in order to purchase the property, the accused was in dire need of money and he had borrowed loan for his legal necessities. But as per the contents of Ex.P.10 registered sale deed, the accused had borrowed loan of Rs.8,80,238/- from Sundaram BNP Paribas Home Finance Limited, Jayanagar, Bangalore and the cheque issued was drawn on HDFC Bank, Anna Salai, Chennai. As per Ex.P.12 sale deed dated 11/3/2015, the accused had purchased the property for a consideration of Rs.14,06,000/- from Somana.M.Gowda, daughter of M.R.Manjunath. But Ex.P.12 document is not relevant for the complaint alleged transaction. Since the accused during his cross-examination denied purchased property, it appears the complainant has produced the said 13 CC.No: 11110/2013 sale deed. During cross-examination of D.W.1, the learned Advocate appearing for the complainant has made an attempt to prove the accused is also facing other complaints filed for the offence punishable under Section 138 of N.I. Act. By mere establishing this fact, the complainant is not able to establish the complaint alleged transaction or regarding advancement of Rs.7,80,000/- hand loan to the accused. As per the complaint averments, in January 2012 the complainant had advanced loan of Rs.7,80,000/- and the accused promised to repay the same within one year with interest thereon at 24% per annum. It appears that on 26/2/2013 the accused had issued Ex.P.1 cheque in favour of the complainant almost after 14 months from the date of transaction. Therefore, as per the admitted case, the complainant from the date of advancement of loan January 2012 till the accused appears to have issued Ex.P.1 cheque, he was not possessing any documents in proof of advancement of loan is unbelievable. Secondly, Ex.P.1 cheque amount not includes interest on loan of Rs.7,80,000/- at the rate of 24% per annum from January 2012 till the date of cheque 26/2/2013. In the event the accused had issued Ex.P.1 cheque in the month of February 2013, the complainant could have insisted the accused to issue cheque amount including interest for the said period. For the aforesaid period of 14 months the accused ought to have paid approximately interest of Rs.2,02,800/-. In the above circumstances, the aforesaid contention of the complainant also gives rise to suspicion regarding advancement of 14 CC.No: 11110/2013 loan and issuance of Ex.P.1 cheque in discharge of the said debt. Any prudent man may not advance huge amount of loan of Rs.7,80,000/- without obtaining any documents from the borrower or without charging any interest for more than 14 months. During cross-examination of D.W.1, the learned Advocate appearing for the complainant has miserably failed to elicit any damaging admission in regard to establish the complaint alleged transaction. Even the complainant has also failed to make out the accused was having acquaintance with the complainant and in pursuance of their relationship he had borrowed loan. The accused during cross-examination of the complainant in Ex.P.6 reply as well as in his defence evidence specifically alleged the complainant is a total stranger. Therefore, it is the burden of the complainant to prove the accused was having acquaintance and in pursuance loan was advanced in his favour.
15. As per Section 139 of N.I. Act, there is a presumption in favour of the complainant that unless the contrary is proved Court shall presume that the cheque had been issued in discharge of any debt or liability. Therefore, as per the aforesaid provision, it is the burden of the accused to rebut the presumption appearing in favour of the complainant. In order to rebut the presumption, the accused is expected to take a probable defence. The accused during cross-examination of the complainant and in his defence evidence has to establish there was 15 CC.No: 11110/2013 absence of consideration or passing of consideration was improbable or doubtful. In this regard, the Judgment relied on by the complainant referred supra in Rangappa V/s. Mohan case, Hon'ble Apex Court held it is a settled proposition that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubt about existence of legally enforceable debt or liability, the prosecution can fail. During cross- examination of the complainant and in his defence evidence the accused has specifically disputed the financial capacity of the complainant to advance huge amount of Rs.4 Lakhs. In addition, the accused has denied any financial transaction with the complainant or issuance of the cheque in discharge of any debt or liability and as per his evidence the complainant is a total stranger. In order to arrive conclusion whether the accused has discharged his burden by placing prima facie evidence or he has taken a probable defence, I have referred the Judgment of Hon'ble Apex Court reported in ILR 2009 KAR 1633 in Kumar Exports V/s. Sharma Carpets. In Para No.20 of the aforesaid Judgment it is held as below:-
"The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no 16 CC.No: 11110/2013 consideration and debt existed. To rebut the statutory presumption an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to de discharged by him. However, the Court need not insist in every case that the accused should disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, bare denial of the passing of consideration and existence of debt, apparently does not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act".17 CC.No: 11110/2013
The evidence of the complainant regarding advancement of loan of Rs.7,80,000/- to the accused is unbelievable. The accused has able to create doubt regarding complaint alleged transaction and he has prima facie proved his defence. Therefore, my findings on Point No.1 is in the Negative.
16. POINT NO.2:- In view of my findings on Point No.1., the accused is liable to be acquitted for the offence punishable under Section 138 of N.I. Act. Hence, I proceed to pass the following:-
ORDER Acting under Section 255 (1) of Cr.P.C, accused is acquitted for the offence punishable under Section 138 of Negotiable Instruments Act 1881. He is set at liberty. The bail bond and surety bonds hereby stands discharged.
(Dictated to the Stenographer, transcribed by her, corrected, revised and signed then pronounced by me in the open court on this the 9th day of October 2015).
(LAKSHMINARAYANA BHAT.K) XVIII A.C.M.M., BANGALORE.18 CC.No: 11110/2013
ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Sri. Yashavanth Raju.K.
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P.1 : Cheque No: 019944 dated 26/2/2013
for Rs.7,80,000/-.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Office copy of demand notice.
Ex.P.4 : Postal receipt.
Ex.P.5 : Postal acknowledgement.
Ex.P.6 : Reply notice.
Ex.P.7 : Small Scale Industry certificate.
Ex.P.8 : Sales Tax Certificate.
Ex.P.9 : Bank account extract.
Ex.P.10 : Certified copy of sale deed.
Ex.P.11 : Diary.
Ex.P.12 : Certified copy of sale deed.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
D.W.1 : Sri. Suresh Kumar.
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: -
Ex.D.1 : Certified copy of partition deed.
Ex.D.2 : Certified copy of agreement.
Ex.D.3 : Certified copy of loan agreement.
(LAKSHMINARAYANA BHAT.K)
XVIII A.C.M.M., BANGALORE.
19 CC.No: 11110/2013
(Judgment pronounced in Open Court vide a separate Order) ORDER Acting under Section 255 (1) of Cr.P.C, accused is acquitted for the offence punishable under Section 138 of Negotiable Instruments Act 1881. He is set at liberty. The bail bond and surety bonds hereby stands discharged.
XVIII A.C.M.M., BANGALORE.