Bangalore District Court
S.Rangaswamy S/O Seenappa vs Smt.T.Sandhya W/O K.Manjunatha on 15 November, 2018
IN THE COURT OF THE LX ADDITIONAL CITY CIVIL &
SESSIONS JUDGE, BENGALURU
(CCH-61)
Dated this the 15th day of November, 2018
:Present:
Sri Vidyadhar Shirahatti, LL.M
LX Addl. City Civil & Sessions Judge,
Bengaluru.
Crl. A. No. 733/2016,
APPELLANT S.Rangaswamy S/o Seenappa, Aged
about 42 years, R/at No.419, 9th E Main
road, Vijayanagar, Bengaluru.
(Sri V.Srinivas, Adv)
VS.
RESPONDENT Smt.T.Sandhya W/o K.Manjunatha, Aged
about 36 years, R/at No.37/2,
Vijaykumar building, Subbamma
Compound, Chandapura, Anekal Taluk,
Bengaluru.
(By Sri.K.M. Adv )
JUDGMENT
This appeal filed U/sec. 374(3) of Cr.P.C., by the appellant, being aggrieved by the judgment of conviction and sentence passed in C.C.No.23937/2012, dt.24/5/2016 for 2 Crl.A.No.733/2016 offence punishable u/s 138 of N.I.Act on the file of XXII ACMM, Bengaluru.
2. The appellant was the accused and respondent herein was the complainant before the trial Court and they are referred to as per the ranks assigned to them before the lower court.
3. The brief facts leading to this appeal can be stated as under:-
The accused entered into an agreement of sale dt:14.2.2011 with complainant situed at Dasanpaura Hobli, for sale consideration amount of Rs.5,25,000/-. The complainant paid a sum of Rs.2,00,000/- by way of cash towards the sale conditions amount. However, the said sale agreement was cancelled. Hence, towards the repayment of said amount, accused has issued two cheques for Rs.1,00,000/- each and out of the said cheques, the complainant presented one cheque for Rs.1,00,000/-. When the said cheque was presented for encashment it was 3 Crl.A.No.733/2016 dishonoured for the reasons 'insufficient funds '. Then the complainant got issued legal notice to the accused who neither replied the notice nor repaid the cheque amount.
4. Then the complainant presented the complaints under section.200 of Cr.P.C., for offence under Sec.138 of Negotiable Instruments Act. Learned Magistrate took cognizance and registered the case against the accused for offence punishable u/Sec. 138 of Negotiable Instruments Act and secured the presence of accused who after appearance, pleaded not guilty. Then the complainant examined himself as PW1 and got marked documents as per Ex.P.1 to Ex.P.7. After recording of statement of accused under Sec.313 of Cr.P.C., the accused himself examined as DW1 and got marked 4 documents as Ex.D1 to Ex.D4 on his behalf.
5. The learned Magistrate on hearing the arguments on both sides, found the accused guilty and proceeded to convict the accused for offence u/s. 138 of Negotiable Instruments Act and sentenced him to pay a fine of 4 Crl.A.No.733/2016 Rs.1,52,000/- and in default of payment of fine amount, the accused shall undergo S.I. for a period of two months. Besides, the trial Court awarded compensation of Rs.1,50,000/- out of the fine amount to the complainant acting u/s.357 of Cr.P.C., by passing the impugned judgment dt.27/6/2017.
6. This judgment of conviction and sentence which is now under challenge by the appellant/accused on the following grounds:-
The impugned judgment of conviction and sentence passed by the trial court is opposed to the settled principles of law, facts and probabilities of the case. The learned Magistrate grossly erred in not properly appreciating the oral and documentary evidence available on record in proper perspective. The learned Magistrate based on inadmissible documents and evidence has convicted the accused. The learned Magistrate failed to appreciate the evidence of DW1. The learned Magistrate failed to consider that, the no legal 5 Crl.A.No.733/2016 notice was served on him and when police called him he came to know about the alleged complaint. The impugned judgment of conviction is unsustainable and not tenable in the eye of law. Hence, prayed to set aside the impugned judgment of conviction and to acquit the accused by allowing the appeal.
7. After filing of this appeal, notice duly served on the respondent who made his appearance through a counsel. The trial Court records, have been secured.
8. Heard arguments of learned counsel for appellant and respondent and that apart, the learned counsel for appellant has also filed written arguments.
9. Perused the records.
10. In the light of the contentions taken up in the memorandum of appeals, the common points that arise for my determination are as follows;
6 Crl.A.No.733/2016
1) Whether the Court below erred in not properly appreciating the defense set up by the accused in proper perspective?
2) Whether the learned Magistrate erred in
convicting the appellant/accused for
offence punishable U/sec. 138 of
Negotiable Instruments Act?
3) Are there any grounds to interfere with the
order of conviction and sentence?
4) What order?
11. My findings on the above points are as follows:
Point No.1 : In the Negative
Point No.2 : In the Negative
Point No.3 : Partly in the affirmative
Point No.4 : As per final Order
REASONS
12. Point Nos.1 to 3:- All these points are taken together for discussion for the sake of convenience and to avoid repetition of facts.
7 Crl.A.No.733/2016
13. I have carefully gone through the contents of appeal memo, trial Court records and the impugned judgment.
14. It is the specific case of the complainant that accused received a sum of Rs.2,00,000/- for advance sale consideration amount out of Rs.5,25,000/- and when accused failed to execute the sale deed, issued the cheque in question i.e., Ex.P.1 towards repayment of said loan amount. It is the further case of the complainant that since the cheque which were issued by the accused came to be bounced back as insufficient funds, the accused is liable to be convicted for offence punishable u/Sec. 138 of Negotiable Instruments Act.
15. On the other hand, it is defense set up by the accused that the cheque in question was issued to the as a security while executing the agreement of sale and misused the said cheque for filing the complaint. It is further defense set up by the accused that he has received only Rs.1,00,000/- as a advance sale consideration amount and 8 Crl.A.No.733/2016 he further contended that, he has repaid the amount of Rs.25,000/- and hence, he is not liable to pay the said cheque amount.
16. Keeping in view the rival contentions of both the parties, I have carefully gone through the evidence let in by both the parties to answer the points in controversy.
17. Obviously, the burden is on the complainant to prove that the cheque in question were issued towards discharge of legally recoverable debt or liability. In this regard, the complainant examined himself as PW1 who in his evidence has reiterated the averments of the complaint and got marked original cheque, memo issued by the bank, receipt, copy of legal notice, postal receipt, postal acknowledgements, as per Ex.P.1 to 6.
18. In the cross examination on behalf of the accused, PW1 states that the accused received a Rs.2,00,000/- from him towards advance sale consideration 9 Crl.A.No.733/2016 amount and however he failed to execute the said sale deed and hence, to repayment of the said amount, the accused has issued cheque in question. He has stated all these facts in his notice. He denied the suggestion that he has paid Rs.1,00,000/- as advance and accused has repaid the amount of Rs.25,000/-. He denied the suggestion that the accused has issued the cheque in question for security till the registration of sale deed and he misused the same.
19. A careful appreciation and evaluation of the evidence of PW1 coupled with contents of Ex.P.1 to Ex.P. 6, makes it clear that the accused and complainant were known to each other very well. Herein this case the accused does not dispute issuance of cheque and his signature found on the cheque in question. But it is his contention that, he has issued the cheque in question to the complainant as a security towards advance received by him towards the sale consideration and complainant has misused the same. He further contended that, he contended that, he has repaid the 10 Crl.A.No.733/2016 amount of Rs.25,000/- and hence, he is liable to pay the said amount. To support his contention, the accused has produced the agreement of sale deed dt:14.2.2011. It is pertinent to note that, the execution of agreement of sale deed is not disputed by the both the parties. On careful perusal of the said agreement, it discloses that, the complainant has paid only Rs.1,00,000/- as advance sale consideration amount. Hence, the contention of the accused is probable one and believable. That apart, the accused contended that, the he has repaid the amount of Rs.25,000/- to the complainant. The complainant also admitted for receiving of Rs.25,000/- from the accused. But the complainant contended that, said amount of Rs.25,000/- is interest for Rs.2,00,000/- advance received by the accused. On perusal of the said agreement of Sale deed at Ex.D1 there is no mentioned that in case failure of execution of sale deed, the accused liable to pay the interest on the advance sale consideration. Hence, the contention of complainant that 11 Crl.A.No.733/2016 she received Rs.25,000/- towards the interest on the advance sale amount is not substantiated by any material on record.
20. Moreover, when the accused admits his signature found on Ex.P.1 and handing over the same to complainant while borrowing loan amount, the presumption under Sec.139 of Negotiable Instruments Act would arise in favour of the complainant.
21. In this regard I would like to rely upon the decisions of Hon'ble Apex court in Kishna Rao v/s Shankar Gowda in 2018(8) SCC 165 Financial loss Monterey loss - Negotiable Instrument Act 1981- 139- presumption under 139 does when may be fallen- ingredients and scope of Sec.139- does not - probable summaries- accused liberty may adduce evidence to rebut the presumption u/Sec.139- but mere denial regarding existence of debt was not serve any purpose in the event accused is able to raise probable defense which creates doubt with regard to existence of debt or liability presumption may fall.
22. In Rangappa Vs.Mohan in AIR 2010 SC 1898 wherein it is held that, 12 Crl.A.No.733/2016 The presumption mandated by S.139 of the Act does indeed include the existence of legally enforceable debt or liability. This is of course in the nature of rebuttable presumption and it is open to the accused to raise a defense wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. S.139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of the cheque, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by S.138 can be better described as regulatory offence since the bouncing of a cheque is largely in nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is settled position that when an accused has to rebut the presumption under Sec.139, the standard of proof for doing so is that of 13 Crl.A.No.733/2016 'preponderance of probabilities'. Therefore, if the accused is able to raise. Therefore, if the accused is able to raise a probable defense which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defense and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
23. Moreover, when the accused admits his signature found on Ex.P.1 and handing over the same to complainant while borrowing loan amount, the presumption under Sec.118 and 139 of Negotiable Instruments Act would arise in favour of the complainant. But the accused has not produced any materials to rebut the said presumption. As such, no material is produced appreciate the defense set up by accused with regard. Therefore, the learned Magistrate has rightly appreciated and evaluated the evidence of PW1 in proper perspective. As such there is no any illegality or error committed by the Court below in appreciating the evidence available on record.
14 Crl.A.No.733/2016
24. On careful appreciation of evidence of PW1 and the defense taken by the accused, it can be said that though he states that the cheque in question was issued only security purpose, his bald say itself cannot be relied upon. He has not offered any explanation as to why he left the cheque in the hands of complainant. So, this aspect of the case goes to show that defense set up by accused is not probable.
25. Having regard to all these facts and circumstances, I am of the considered view that the learned Magistrate has rightly appreciated the oral and documentary evidence available on record in proper perspective. The learned Magistrate committed no error or illegality in appreciating and evaluating the documents relied upon by both the parties. Herein this case, the accused failed to rebut the presumption available in favour of complainant under Sec.139 of Negotiable Instruments Act. A bald denial of the case of complainant does not amount to a defense. 15 Crl.A.No.733/2016
26. Furthermore, the accused has not replied the legal notice which was issued to him as per Ex.P.3. It appears from the records that the notice was issued through registered post and which was duly served on the accused. It shows that his action in keeping mum without replying the notice, goes to show that he purposefully kept quiet since he issued Ex.P1 towards repayment of loan amount.
27. Herein this case, the accused admits that the address shown in the legal notice at Ex.P.3 pertains to his residence. Such being the fact, there is a deemed service of legal notice on the accused, who neither replied the same nor paid the cheque amount. Therefore, the complainant has placed sufficient and ample materials on record to believe that the Ex.P.1 cheque was issued by accused towards repayment of loan amount of Rs.1,00,000/-, which he received the advance sale consideration, when he failed to execute the said sale deed. There are no such circumstances, wherein the case of complainant can be doubted. There are no grounds so as to interfere with the 16 Crl.A.No.733/2016 reasoning and findings of the Court below. As such the learned Magistrate committed no error or illegality in believing the case of complainant.
28. Having regard to the facts and circumstances of the case, I am of the view that the impugned judgment of conviction and sentence passed by the learned Magistrate is in accordance with settled principle of law, facts and probabilities of the case. Absolutely there are no grounds to interfere in the reasoning and findings given by the Court below so as to convict the accused. As such the impugned judgment of conviction is in accordance with the settled principles of law, facts and probabilities of the case. Hence, the impugned judgment of conviction deserves to be confirmed with.
29. However, the facts and circumstances involved in the case on hand, do warrant this Court to interfere with regarding imposing of sentence amount and requires to modify the sentence imposed on accused by trial Court. 17 Crl.A.No.733/2016 Because the transaction between the complainant and accused has taken place in view of the failure on the part of execution of project. The accused issued the cheque in question towards the repayment of the amount, which he received from the complainant towards advance sale consideration amount. But the learned Magistrate awarded compensation double the cheque amount without assigning any reasons and without any basis. Though it is permissible under law to impose fine to the tune of double the cheque amount, sufficient justifiable grounds need to be assigned by Court to impose fine or award compensation to the tune of double the cheque amount.
30. Herein this case, absolutely, no reasons are assigned by the learned Magistrate to award compensation double the cheque amount. It appears, the loan transaction has taken place under the close acquaintance of complainant with accused. Even there is no such agreement to pay interest on the loan amount. Even no document was obtained from the accused either as a security or with regard to 18 Crl.A.No.733/2016 payment of any interest. Therefore, these facts would go to show that the complainant had no intention to claim any interest on such amount. Such being the fact, the learned Magistrate is not justified in awarding compensation double the cheque amount.
31. Furthermore, the thing would have been different if the learned Magistrate assigned any reasons for awarding compensation double the cheque amount. As such, the learned Magistrate is not justified in awarding compensation double the cheque amount without assigning any reasons to that effect. So, on these facts, I am of the view that the impugned order of sentence deserves to be interfered so as to modify the quantum of compensation awarded to complainant. Therefore, considering the fact that the transaction has taken place between the complainant and the accused company with regard repayment of amount, which he received from the complainant towards execution of sale deed, 19 Crl.A.No.733/2016
32. It is relevant to note that instead of convicting and sentencing the accused U/Sec. 255(2) Cr.P.C, the trial court by invoking u/Sec.265 of Cr.P.C, has convicted and sentenced the accused, though the said provision does not empower the Magistrate to convict and sentence the accused. On going through impugned judgment, trial court without following Sec.138 of N.I Act, has imposed sentence on the accused to pay fine amount of Rs.2,000/-, in default he shall undergo simple imprisonment for a period of 2 months. More so, trial court while awarding compensation, has straightaway awarded compensation and thereby trial court has committed an error. Therefore, I am of the considered view that imposition of sentence on the accused and compensation awarded to the complainant, by the trial court, are to be modified. In my view, having regard to the facts and circumstances to the case, if the accused is convicted and sentenced to pay fine amount of Rs.77,000/- which would met the ends of justice and in default, if he is imposed with sentence of imprisonment for a period of two 20 Crl.A.No.733/2016 months, which would met the ends of justice. Further I am of the considered view that out of fine amount, acting u/Sec.357 of Cr.P.C. complainant is awarded with compensation of Rs.75,000/- and to remit remaining amount of Rs.2,000/- to the state exchequer, it would met the ends of justice. Hence, the impugned order of sentence deserves to be interfered only with regard to quantum of compensation awarded by learned Magistrate. Hence, impugned judgment of conviction deserves to be confirmed with by modifying the quantum of sentence as observed above. Accordingly, I answer point No.1 and 2 in the negative and point No.3 partly in the affirmative.
33. Point No.4: In view of my findings on point No.1 to 3, I proceed to pass the following:
ORDER The appeal filed by appellants U/sec. 374 of Code of Criminal Procedure is hereby allowed in part.21 Crl.A.No.733/2016
The impugned judgment of conviction
passed by the XXII ACMM, Bengaluru, in CC
No.23937/2012 dt.24/5/2017 is confirmed.
However the sentence stands modified as under:-
Acting u/s. 264 of Cr.P.C, the accused is hereby convicted and sentenced to pay fine of Rs.77,000/- for the offence punishable u/Sec.138 of Negotiable Instruments Act and in default of payment of fine amount, the accused shall undergo S.I. for a period of two months.
Out of the fine amount, a sum of Rs.75,000/- an amount of Rs.77,000/- is ordered to be paid as compensation to the complainant under Sec.357 of Cr.P.C., and remaining Rs.2,000/- shall be appropriated to the government.
Send a copy of this judgment to the lower Court along with LCR.
*** (Directly dictated to the stenographer on computer and then pronounced by me in the open court on this the 15th day of November, 2018) (Vidyadhar Shirahatti) LX Addl.City Civil & Sessions Judge, Bengaluru.22 Crl.A.No.733/2016 23 Crl.A.No.733/2016