Bangalore District Court
W/O. V.N. Krishnamurthy vs Aged About 35 Years on 17 January, 2020
1
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 17th DAY OF JANUARY, 2020
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.56457/2018
S.L.N FUELS - Proprietor
Smt. Lakshmi H.R
COMPLAINANT W/o. V.N. Krishnamurthy
Aged about 43 years, R/at No.105, 1 st 'C' Main
Road, Manjunathanagar, Ittamadu, BSK 3rd Stage,
Bengaluru - 560 085.
Sri. S. PRATHEEP - Advocate
S/o. Subramani
ACCUSED Aged about 35 years, Alexandria Building, Librity
Theater Road, Udhagamandalam - 643 001,
And also
R/at No.726/1, Wats Gate, Denaducombai (post),
The Nilgiris.
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused is convicted
(K. GURUPRASAD)
XIV ADDL. C.M.M., BENGALURU
2
JUDGMENT
The present complaint is filed under Sec.200 Cr.PC for the offence punishable under Section 138 of Negotiable Instruments Act.
2. It is the case of the complainant that, the complainant is running business in name and style of SLN FUELS. The accused has been introduced to complainant by her husband namely V.N. Krishnamurthy. In 2017, the accused availed financial assistance to the extent of Rs.25 lakhs from the complainant for his real estate business and his personal expenses etc and agreed to repay the entire loan amount within one year. Towards said liability, the accused issued a cheque bearing No.295750 dtd.26.5.2018 for Rs.25 lakhs drawn on Canara Bank, Denadukombai in favour of the complainant. When the complainant presented the said cheque through her banker i.e Central Bank of India, Brigade Road branch, Bengaluru on 28.5.2018, said cheque came to be dishonoured with bank endorsement "funds insufficient" on 29.5.2018. When the complainant got issued legal notice dtd.13.6.2018 to accused by registered post at two addresses, the notice was served on the accused at one address and another notice was returned with postal shara "left return to the sendor". Therefore, the accused who has failed to pay the cheque amount in spite of service 3 of the notice is guilty of the offence punishable under Section 138 of N.I. Act. Hence this complaint.
3. After filing of this complaint, cognizance was taken for the offence punishable U/s.138 of N.I. Act. Sworn statement of the complainant was recorded. This court was satisfied as to prima facie case made out by the complainant for issuance of the summons. Accordingly, criminal case was registered against the accused and summons was ordered to be issued.
4. In pursuance of court process issued by this court, the accused appeared through his counsel and got enlarged on bail. Thereafter plea was recorded. The accused pleaded not guilty and claimed for trial.
5. In order to prove her case, the complainant has examined herself as CW.1 (PW.1) and got marked Ex.P1 to P11 and closed her side of evidence. Thereafter, statement of the accused U/s.313 of Cr.PC was recorded. The accused denied incriminating materials in the evidence of complainant against him. Thereafter, the accused examined himself as DW.2 and also examined another witness as DW.1 and got marked Ex.D1 and closed his side of defence evidence.
46. Heard both sides. Both counsels filed written arguments. Perused the complaint, evidence on record, written arguments and court records.
7. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused has issued a cheque in question in discharge of legally enforceable debt or liability as contended by her?
2) Whether the complainant further proves that the accused committed the offence punishable under Section 138 of Negotiable Instruments Act?
3) Whether the complainant is entitled for the relief's as prayed in the complaint?
4) What Order?
8. The above points are answered as under;
Point No.1 to 3 : In affirmative, Point No.4 : As per the final order, for the following.......
5REASONS
9. Point Nos. 1 and 2: Since these two points are inter linked and to avoid repetition they are taken together for discussion.
10. As regard to limitation to file this complaint, Ex.P1 is cheque dated 26.5.2018 drawn on Canara Bank, Denadukombai in favour of the complainant. Ex.P2 is cheque return memo dated 29.5.2018 issued by Central Bank of India, Brigade Road branch, Bengaluru regarding dishonour of Ex.P1-cheque. Ex.P3 is copy of legal notice dtd.13.6.2018 got issued by the complainant to the accused calling upon the accused to pay the cheque amount within 15 days from the date of receipt of said notice. Ex.P5 and P6 are the postal window receipts dtd.13.6.2018 issued by postal department for having sent Ex.P3 notice by registered post to the accused at two addresses. Ex.P4 is postal acknowledgement signed by the accused for having received Ex.P3 notice by registered post on 18.6.2018. Ex.P7 is postal cover in which Ex.P3-notice was sent by registered post at another address of the accused but which has returned unserved with postal shara as "left" dtd.18.6.2018. Ex.D1 is copy of reply notice dtd.6.7.2018 got issued by the accused in response to Ex.P3- notice.
611. It is clear from Ex.P1 to P7 and Ex.D1 that when the complainant presented Ex.P1-cheque to her banker, it was returned with bank shara "funds insufficient" on 29.5.2018 and that when the complainant got issued legal notice to the accused on 13.6.2018 by registered post at two addresses, notice sent to one address is served on the accused on 18.6.2018 while another notice sent to accused at his another address is returned with postal shara "left" dtd.18.6.2018. In fact the accused has got issued reply notice to Ex.P3-notice as per Ex.D1. Therefore, when the complainant presented the cheque in question within three months from the date of said cheque, it was dishonored and that when the complainant got issued statutory notice U/s. 138 of N.I. Act, it came to be served on the accused. Hence, the present complaint filed on 6.7.2018 is well within time.
12. As regard to legally enforceable debt or liability, in 2010 (11) SCC 441 - (Rangappa Vs Sri. Mohan), it is held that;
" The presumption mandated by Sec.139 of the Act includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebutable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the 7 complainant"..............."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 doubts about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own".
13. If the facts and circumstances of this case are considered in light of above said principle of law, it is clear that DW.2 has admitted during cross-examination that Ex.P1- cheque is drawn on his bank account and that it bears his signature. Therefore, statutory presumption arises U/s.139 of N.I. Act in favour of the complainant that Ex.P1-cheque is issued in discharge of any debt or liability. The burden of rebutting the said presumption by probable defence is on the accused.
14. It is the case of the complainant that she lent loan of Rs.25 lakhs to the accused in 2017 and towards said liability, the accused issued Ex.P1-cheque, which came to be dishonored. On the other hand, it is the defence of the accused that he has not borrowed loan of Rs.25 lakhs from the complainant nor has he issued Ex.P1-cheque towards repayment of said loan. It is specific defence of the accused that the complainant who is friend of accused, intended to 8 purchase Fortune Car and that one Bhagavathi @ Pooja whom the accused knew wanted to sell her Fortune Car. It is further defence of the accused that the accused introduced the complainant to said Bhagavathi and after negotiations between the complainant and said Bhagavathi in absence of accused, the complainant paid token advance amount to said Bhagavathi for purchase of said car. It is further defence of the accused that since there was delay in sale of said car, the complainant approached the accused and disclosed that her husband is insisting her to take cheque by way of security. It is further defence of the accused that on such insistence by the complainant, the accused issued blank signed cheque to the complainant to show the same to her husband and the complainant also promised to return the said cheque after delivery of Fortune Car. It is further defence of the accused that the complainant misused the said cheque and filed this complaint on the basis of Ex.P1- cheque which had been given to her by way of security.
15. On careful perusal of evidence on record, it is clear that defence of the accused is not probable nor does it inspire confidence of this court. It is because, the evidence of DW.2-Pratheep (accused) is vague and uncertain and devoid of necessary details. No doubt, the accused has raised this defence in Ex.D1-reply notice got issued by him. However the accused has not disclosed in Ex.D1-reply notice or in his 9 evidence, date, month or the year on or in which he introduced complainant to said Bhagavathi and when such negotiations between complainant and Bhagavathi took place, date on which the complainant paid token advance amount to said Bhagavathi. It is also not disclosed how much money the complainant paid by way of token advance and what was Registration number of said Fortune Car which was agreed to be sold. No doubt, Dw.2 has deposed that he was not present at the time of negotiation talks between the complainant and said Bhagavathi. However, when both complainant and Bhagavathi are his close friends and he issued blank signed cheque towards said transaction between said persons, he is expected to know the basic details of the transaction such as total amount for which the Fortune Car was agreed to be sold, amount of token advance paid by the complainant, dates of such transaction and negotiation and Registration number of said Fortune Car etc. The ommission to depose these basic facts raises serious doubt regarding the defence of the accused.
16. Secondly, DW.2 has also pleaded ignorance regarding name of parents of said Bhagavathi whom he claims to have known since many years. Dw.2 has also not disclosed name of husband of said Bhagavathi in his evidence. DW.2 has deposed that said Bhagavathi who is his friend resides in Bengaluru but surprisignly, he deposed that 10 he does not remember the address of said Bhagavathi in Bengaluru. If the said Bhagavathi had really been friend of accused, he should have been aware of the personal details of said Bhagavathi. Therefore, evidence of DW.2 appears to be vague and ellusive in nature and also it appears that DW.2 is avoiding to give answers to such important question during his cross-examination. Therefore such evidence DW.2 is not reliable and sufficient to prove the defence of the accused.
17. Thirdly, DW.2 has deposed that he has issued blank signed cheque to the complainant to show the same to her husband who had insisted to get some security for token advance amount paid by complainant to Bhagavathi. However, it is pertinent to note that the accused has not disclosed in Ex.D1-reply notice that the cheque issued by him to complainant was blank signed cheque. There is nothing in Ex.D1 reply notice to show that the cheque handed over by the accused to the complainant was blank at the time it was handed over to complainant. Moreover, when token advance amount which was alleged to have been paid by complainant to Bhagavathi is fixed sum of money, it is not clear why the accused handed over blank signed cheque to the complainant instead of issuing cheque for sum of token advance amount, for security of which such cheque is issued. It is also not clear from evidence of DW.2, why accused did 11 not insist Bhagavathi to issue such cheque instead. These circumstances also raise serious doubt regarding defence of the accused.
18. Fourthly, even though DW.2 has deposed that he has lodged police complaint against said Bhagavathi after dishonour of Ex.P1-cheque, the accused has not produced copy of such police complaint in this case. The production of said copy of police complaint would have supported the defence of the accused and said document is material document. No explanation is offered by the accused regarding non-production of such material document. Even DW.2 has deposed that he doe not remember on which date he lodged such police complaint against said Bhagavathi. Even said Bhagavathi is not summoned and examined in this case to prove the defence of the accused. Moreover, DW.2 admitted during cross-examination that he has not entered into any written agreement with complainant at the time of handing over of blank signed cheque by way of security to the complainant. It is pertinent to note that DW.2 is not layman ignorant of legal consequences of handing over of blank signed cheque to the complainant. In fact DW.2 is practicing advocate. Therefore, if the accused had really handed over blank signed cheque to the complainant by way of security towards transaction of Fortune Car between complainant and Bhagavathi, he would have entered into 12 written agreement with complainant regarding the purpose for which such cheque is given to the complainant. These circumstances raise serious doubt regarding the defence of the accused.
19. Fifthly, DW.2 has deposed that the token advance amount was given by the complainant from bank account of the company of her husband. However DW.2 has admitted during cross-examination that the husband of the complainant is Government Servant. Therefore, it is not permissable for the husband of the complainant to run any business in the name of company in his name. Even the accused has not disclosed the name of such company of husband of the complainant. Therefore defence of the accused that the token advance amount was paid out of account of company of the husband and as such the husband of the complainant insisted to get cheque by way of security is not probable.
20. The counsel for accused has argued in written arguments that Ex.P1-cheque is issued in the name of SLN FUELS while it is the case of complainant that she has lent Rs.25 lakhs to the accused in her individual capacity. It is further argued that there is no transaction or any relationship between SLN FUELS and accused and there is no nothing on the record to show that the accused has to pay Rs.25 lakhs to SLN FUELS. It is argued that there is no relationship of 13 drawer and drawee between the accused and SLN FUELS and said SLN FUELS has not given any loan to the accused. It is further argued that the complainant has not produced documents to prove the existence of SLN FUELS and that she is proprietor thereof. Therefore it is argued that SLN FUELS not in existence and as such the Provisions of Sec.138 of N.I. Act are not attracted and accused is to be acquitted.
21. However above said arguments of counsel for the accused cannot be accepted, because it is clear from Ex.P9- letter dtd.23.8.2018 that NAYARA Energy has issued said letter to complainant I.e H.R. Lakshmi who is proprietor of SLN FUELS and it is clear from the said letter that the said NAYARA Energy has entered into Franchise Agreement dtd.29.1.2018 with SLN FUELS of which the complainant is proprietor. Therefore it is sufficiently proved that the said SLN FUELS is in existence and that complainant - H.R. Lakshmi is proprietor thereof. It is further clear from evidence on record that SLN FUELS is proprietory concern. It is settled principle of law that unlike Company registered under Companies Act, 1956, proprietory concern has no independent legal entity and as such proprietor can file complaint on the basis of cheque issued in favour of proprietory concern. There is no legal bar in that regard. Moreover, this contention was taken by accused for the first time at the stage of arguments itself. No suggestion has 14 been put by counsel for the accused to CW.1 that there is no relationship of drawer and drawee between accused and SLN FUELS. No explanation was sought by the accused during cross-examination of CW.1 as to why Ex.P1-cheque was issued in the name of SLN FUELS instead of complainant I.e Smt.H.R.Lakshmi. If such question had been put to CW.1 during cross-examination, witness would have an opportunity to give explanation to the same. Instead of putting such suggestion and question to CW.1 during cross-examination , this contention was taken by accused during arguments itself. Even DW.2 has not deposed that there is no relationship of drawer and drawee between accused and SLN FUELS. Therefore when SLN FUELS is proprietory concern and Smt.H.R. Lakshmi is proprietor thereof, the present complaint filed by the complainant Smt.H.R. Lakshmi on basis of the cheque issued in favour of SLN FUELS regarding the transaction between the accused and Smt.H.R. Lakshmi is maintainable under law.
22. Counsel for the accused has argued that the complainant has no financial capacity to lend huge amount of Rs.25 lakhs in 2017 and that the complainant has not disclosed the source of funds of lending such huge amount. It is further argued that Ex.P11-Income Tax Returns show that accused has annual income of only Rs.12,21,042/- in 2018 - 2019 and as such she could not have paid amount of Rs.25 15 lakhs to the accused as claimed by her. It is further argued that Ex.P11 cannot be relied upon since same are not original documents. It is further argued that the complainant has not produced any evidence to prove that she has paid to the accused Rs.25 lakhs. In this regard, the accused has relied upon decisions in Basalingappa Vs Mudibasappa, John K. Abraham Vs Simon C. Abraham and another, K. Subramani Vs K. Damodara Naidu and Veerayya V.G.K Madivalari case etc.
23. The above said arguments advanced by the counsel for the accused cannot be accepted because the accused has utterly failed to prove his defence that he has given Ex.P1-cheque in blank by way of security to the transaction between complainant and Bhagavathi @ Pooja. In view of the decision of Hon'ble Supreme Court in 2019 SCC On line SC 389 (Rohitbhai Jivanlal Patel Vs State of Gujarat and another, since the accused has utterly failed to prove his defence that Ex.P1-cheque was given by way of security to the transaction between the complainant and Bhagavathi @ Pooja, the complainant need not prove source of fund and the accused cannot be acquitted only on the ground that the complainant has failed to prove source of funds to pay the amount to the accused. As regard to financial capacity of the complainant, CW.1 has deposed during cross- examination that she gets rental of Rs.1 lakh per month from 16 the tenants and that there is turn over of Rs.6 lakhs per day from her petrol bunk. Even DW.1 has admitted on page 3 of his cross-examination that complainant has financial capacity to purchase Fortune Car. It is clear from Ex.P9 letter that the complainant is running petrol bunk in the name and style of SLN FUELS on the Franchiseship with Nayara Energy. Even Ex.P8 passbook, Ex.P10 bank statement and Ex.P11 Income Tax Returns lend support to the claim of the complainant that the complainant has financial capacity to lend amount of Rs.25 lakhs to the accused. Merely because the complainant has not produced documentary evidence to show that she has paid Rs.25 lakhs to the accused or merely because the loan transaction is not disclosed in Ex.P11- Income Tax Returns, the loan transaction between the complainant and accused cannot be disbelieved, particularly when the accused has failed to prove his defence. Therefore the contention of the accused does not hold any water and decisions relied upon counsel for the accused are not applicable to the present case on hand.
24. Counsel for the accused also relied upon decisions in Reverend Mother M Arykutty Vs Reni C Kottaram and another, Kumar Exports Vs Sharma Carpets and ILR 2008 KAR 3635 - (K. Narayana Nayak Vs M. Shivarama Shetty). There is no disputed regarding principles of law laid down in those decisions. However the said decisions are not helpful 17 to the accused, because the accused has utterly failed to prove his defence that Ex.P1-cheque was given to complainant in blank with regard to transaction between complainant and Bhagavathi @ Pooja.
25. In view of my above discussion, I am of considered opinion that the accused has utterly failed to prove or probablize his defence and thereby to rebut the said statutory presumption available in favour of the complainant. It clearly appears from the evidence on record that the defence put up by the accused is only an afterthought without any basis. There is no need for the complainant to prove the loan transaction between the complainant and accused as if complainant is to prove debt before Civil Court wherein plaintiff is required to prove his claim on the evidence to be laid in support of his claim for recovery of the amount due, as held in 2019 (10) SCC 287 (Uttam Rao Vs Devinder Singh Hudan and another). The complainant can only rely upon the statutory presumption U/s. 139 of N.I. Act unless and until the such presumption is rebutted by the accused by probable defence. As discussed, unless and until the accused rebuts the statutory presumption with convincing and cogent evidence, burden cannot be shifted on the complainant. As discussed above, the complainant has placed sufficient materials on record to established her contention as put up by her. The evidence on record is 18 sufficient to accept the case of the complainant that accused had issued the cheque in question towards discharge of legally enforceable debt and the complainant has proved all the requirements of Sec.138 of N.I. Act, so as to constitute the offence against the accused. Therefore, Point Nos.1 & 2 are answered in affirmative.
26. Point No.3: As discussed in connection with Point Nos.1 & 2, the complainant has proved her case as to commission of the offence punishable U/s.138 of N.I. Act by the accused. The punishment prescribed for the said offence is imprisonment for a period which may extent to two years or with fine. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, provisions of Sec.117 of N.I. Act, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), etc., this court is of the considered view that it is just and desirable to impose fine of Rs.28,70,000/- and out of the said amount a sum of Rs.5,000/- has to be remitted to the State and the remaining amount of Rs.28,65,000/- is to be given to the complainant as compensation as provided U/s.357(1) of Cr.PC and accordingly Point No.3 is answered in Affirmative.
1927. Point No.4: For the reasons discussed in connection with Point Nos.1 to 3 this court proceed to pass the following......
ORDER Acting under Section 255(2) of Cr.PC accused is hereby convicted for the offence punishable under Section 138 of Negotiable Instruments Act. The accused shall pay a fine of Rs.28,70,000/- for the offence punishable U/s.138 of N.I. Act. In default of payment of fine amount, the accused shall under go simple imprisonment for a period of 20 months.
By exercising the power conferred U/s.357(1) of Cr.PC., out of total fine amount of Rs.28,70,000/-, a sum of Rs.28,65,000/- is ordered to be paid to the complainant as compensation and Rs.5,000/- is ordered to be remitted to the State.
The bail bond of the accused stands cancelled. The cash security deposited by the accused is ordered to be continued till expiry of the appeal period.
Supply the free copy of this judgment to the accused forth with.
(Dictated to the stenographer, transcript thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 17th Day of January, 2020) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru 20 ANNEXURE Witnesses examined for the complainant:
CW.1 : Smt. Lakshmi H.R
Witnesses examined for the defence:
DW.1 : Mr. K.V. Balasubramanyam
DW.2 : Mr. Pratheep
Documents marked for the complainant:
Ex.P1 : Cheque
Ex.P2 : Bank endorsement
Ex.P3 : Legal notice
Ex.P4 : Postal acknowledgment
Ex.P5 & 6 : Postal receipts
Ex.P7 : Returned postal envelop
Ex.P8 : Bank passbook
Ex.P9 : Franchise agreement letter
Ex.P10 : Bank statement
Ex.P11 : Income Tax Return
Documents marked for the defence:
Ex.D1 : Reply Notice dtd.6.7.2018
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU