Bangalore District Court
St Floor vs S/O. Syed Gulzar Ali on 21 December, 2019
1
IN THE COURT OF XIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL, BENGALURU
DATED THIS THE 21st DAY OF DECEMBER, 2019
PRESENT
Sri. K. GURUPRASAD, B.A., LL.B (Spl.)
XIV ADDL. C.M.M., BENGALURU
CASE NO C.C. NO.51999/2019
Mr. A. Zaheer Ahmed
S/o. Late A. Mohammed Khaleel
Aged about 53 years, No.24,
COMPLAINANT
1st Floor, 2nd Cross,
P & T Colony, Venkateshpuram,
Bengaluru - 560 045.
Mr. Syed Manzoor Ali
ACCUSED S/o. Syed Gulzar Ali
Aged about 32 years,
No.11, Bellahalli, Yelahanka,
Bengaluru - 560 064.
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 r/w 142 of Negotiable Instruments Act.
2. It is the case of the complainant that, the complainant and accused are known to each other and are family friends. In April 2018, the accused approached the complainant and requested Rs.30 lakhs assuring good profits. The accused also assured that the said amount is required for period of 45 days and also assured to pay Rs.1 lakh as profit. Accordingly, on 15.11.2018 complainant paid a sum of Rs.30 lakhs to the accused who executed loan agreement and promissory note both dtd.15.11.2018 for Rs.30 lakhs. The accused also issued two cheques bearing No.000076 dtd.25.12.2018 and No.000077 dtd.30.12.2018 for Rs.15 lakhs each, both drawn on Kotak Mahindra Bank, Kammanahalli branch, Bengaluru in favour of the complainant. When the complainant presented the said cheques to his banker i.e Indian Bank, Commercial Street branch, Bengaluru on 10.1.2019, said cheques came to be dishonoured with bank endorsement "drawer signature differs" on 11.1.2019. When the complainant got issued legal notice dtd.25.1.2019 to accused by registered post, calling upon the accused to pay the cheques amount, 3 the said notice came to be served on the accused on 30.1.2019. The accused failed to pay the cheques amount, but got issued untenable reply notice dtd.14.2.2019. Hence the accused who has failed to pay the cheques amount after service 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 his case, the complainant examined himself as CW.1 (PW.1) and got marked Ex.P1 to P10 and closed his 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 4 examined himself as DW.1 and got marked Ex.D1 and D2. However, subsequently the accused has remained absent and has not subjected himself for cross-examination and as such this court ordered that DW.1 has not offered for cross- examination and defence evidence was closed.
6. Heard arguments of counsel for the complainant. Counsel for the accused has not advanced any arguments and as such arguments on behalf of the accused taken as nil.
7. The following points arise for my consideration and determination;
1) Whether the complainant proves that the accused has issued two cheques in question in discharge of legally enforceable debt or liability as contended by him?
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?
58. 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.......
REASONS
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.P3 and P4 are the cheques dated 25.12.2018 and 30.12.2018 both drawn on Kotak Mahindra Bank, Kammanahalli branch, Bengaluru in favour of the complainant. Ex.P5 and P6 are the cheque return memos dated 11.1.2019 issued regarding dishonour of Ex.P3 and P4 - cheques. Ex.P7 is copy of legal notice dtd.25.1.2019 got issued by the complainant to the accused. Ex.P8 is postal window receipt dtd.25.1.2019 issued by postal department for having sent Ex.P7 notice by registered post to the accused. Ex.P9 is postal acknowledgement signed by the accused for having received Ex.P7 notice by registered post on 30.1.2019. Ex.P10 is reply notice dtd.14.2.2019 got issued by the accused in response to Ex.P7-notice. It is clear from Ex.P3 to P10 that when the 6 complainant presented said cheques to his banker i.e Indian Bank, Commercial Street branch, Bengaluru, the said cheques came to be dishonored on 11.1.2019 with bank shara "drawer signature differs" and that when the complainant got issued Ex.P7-notice to the accused by registered post on 25.1.2019, such notice was received by the accused on 30.1.2019 and replied by him on 14.2.2019.
11. In 2012 (13) SCC 375 (Laxmi Dyechem Vs State of Gujarat and others), it is held that dishonour of cheque on the ground that signatures of drawer did not match speciman signatures available with the bank attracts Sec.138 of N.I. Act. Hence, even though Ex.P3 and P4- cheques were dishonoured with bank shara "drawer signature differs" as per Ex.P5 and P6-bank memos, the provision of Sec.138 of N.I. Act are applicable in this case.
12. Hence, it is clear that when the complainant presented the cheques in question within three months from the date of said cheques, the said cheques came to be dishonored and that when the complainant got issued statutory notice U/s.138 of N.I. Act within 30 days from the date of intimation of dishonour of said cheques, the said notice came to be served on the accused. Hence, the present complaint filed on 7.3.2019 i.e after expiry of 15 7 days from the date of receipt of said notice and within 30 days thereafter is well within time.
13. 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 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".
14. In ILR 2006 KAR 234 (Dinesh Harakchand Sankla Vs Kurlon Ltd,.), it is held that even when the cheque is dishonored by the reason of "alteration in date and drawer's signature differs", the court has to presume by virtue of Sec.139 of N.I. Act that the cheques are received by the holder for the discharge, in whole or in part, of any 8 debt or liability. It is further held that if the drawer intentionally tampers the cheque with difference in signature etc, the cheques will be definitely returned. The drawer of the cheque will have to take abundant precaution while issuing the cheques so that cheques should be honoured and contractual obligations are fulfilled.
15. If the facts and circumstances of this case are considered in light of above said principles of law, it is clear that though Ex.P3 and P4-cheques are dishonored with bank shara "drawer signature differs", the accused has not disputed that Ex.P3 and P4-cheques are drawn on his bank account. Therefore, statutory presumption arises U/s.139 of N.I. Act in favour of the complainant that Ex.P3 and P4- cheques are drawn and issued in discharge of any debt or liability. The burden of rebutting the said presumption by probable defence is on the accused.
16. It is the case of the complainant that on 15.11.2018 the complainant lent Rs.30 lakhs to the accused and that the accused executed loan agreement as per Ex.P1 and promissory note as per Ex.P2 in favour of the complainant and also issued Ex.P3 & P4-cheques in favour of the complainant, which came to be dishonored. On the other hand, it is the defence of the accused that the accused has not borrowed Rs.30 lakhs from complainant in 9 2018 nor executed loan agreement as per Ex.P1 and promissory note as per Ex.P2 in favour of the complainant. It is further defence of the accused that he has not issued Ex.P3 and P4-cheques in favour of the complainant towards said alleged loan and that the signatures appearing on Ex.P3 and P4-cheques are not his signatures. It is further defence of the accused that in 2015 the complainant invested Rs.30 lakhs in Brand Mark Apperales company run by the accused who in turn paid Rs.1,20,000/- every month towards profits during the period from 2015 to 2017. It is further defence of the accused that in September or October 2017, the complainant came to the house of the accused and took the original documents of property of wife of the accused and borrowed loan of Rs.30 lakhs from financier and that on the same day, the complainant has taken two unsigned blank cheques from the accused by way of security. It is further defence of the accused that when the accused requested the complainant to return the original documents so that the said property in the name of wife of the accused can be sold, the complainant returned the original documents of said property and thereafter the accused sold the said property to one Iqbal Pasha for Rs.40 lakhs and accused transferred Rs.20 lakhs from bank account of Brand Mark Apperales Company to the bank account of Durga Agencies run by the 10 complainant. It is further defence of the accused that though accused is liable to pay only balance amount of Rs.10 lakhs, the complainant misused the said blank unsigned cheques and created Ex.P3 and P4-cheques and also created Ex.P1 and P2 and filed this false complaint.
17. 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 accused admitted during trial that the complainant paid Rs.30 lakhs to the accused. It is the case of the complainant that he paid said amount of Rs.30 lakhs to the accused in 2018, while the accused contends that the said amount of Rs.30 lakhs was paid by complainant to him in 2015 - 2016. Nevertheless, the fact remains that the complainant has paid Rs.30 lakhs to the accused. No doubt, it is clear from Ex.D2 and PW.1 has admitted during cross-examination that the accused has transferred total amount of Rs.20 lakhs to the bank account of Durga Agencies run by the complainant. However PW.1 has explained that the said payment of Rs.20 lakhs by the accused is not towards repayment of loan amount of Rs.30 lakhs. PW.1 has deposed by way of explnation that about three years back he has entered into agreement of sale with wife of accused and paid Rs.42 lakhs as advance amount, but since no sale deed was executed in favour of 11 complainant , the said amount of Rs.20 lakhs out of Rs.42 lakhs was repaid to the complainant. In other words, even though repayment of Rs.20 lakhs by the accused to the complainant is admitted, PW.1 has deposed that said payment is not towards repayment of the loan but towards refund of advance sale consideration which he had paid at the time of execution of agreement of sale. It is pertinent to note that during cross-examination of PW.1, counsel for accused confronted and got marked legal notice dtd.12.1.2019 got issued by the complainant to the accused and his wife. The said notice was admitted by PW.1 and was marked as Ex.D1. It is clear from the contents of Ex.D1 notice that, the complainant has claimed that wife of the accused has entered into an agreement of sale dtd.18.5.2017 with the complainant and that the complainant has paid advance amount of Rs.42 lakhs. It is further clear from Ex.D1 notice that since the accused and his wife did not execute the sale deed in favour of the complainant, the complainant has issued said notice calling upon the accused and his wife to execute the sale deed. This legal notice at Ex.D1 supports and substantiates the explanation offered by PW.1 during cross- examination that payment of Rs.20 lakhs is towards refund of advance sale consideration. It is pertinent to note that the accused has not seriously disputed execution of said 12 agreement and receipt of advance sale consideration. On the other hand, it is suggested by counsel for the accused on page 9 of cross-examination that there was condition in said agreement of sale that sale deed shall be executed within two months. PW.1 has admitted said suggestion. Therefore, it can be safely concluded that payment of Rs.20 lakhs made by the accused to the complainant during the period from 4.10.2018 to 17.11.2018 is not towards repayment of loan amount of Rs.30 lakhs but towards part refund of advance sale consideration. Therefore, it is further clear that since the complainant has paid Rs.30 lakhs to the accused and not yet received the same from accused, the accused is liable to pay said amount of Rs.30 lakhs to the complainant.
18. Secondly, the accused has denied his signatures on Ex.P3 and P4-cheques. It is defence of the accused that he has handed over two unsigned blank cheques to the complainant by way of security. However if at all the complainant intended to take any cheques from the accused by way of security, he would not have taken unsigned cheques from the accused. On the other hand, the complainant would have insisted and taken signed blank cheques from the accused. Unsigned blank cheques will not serve the purpose of the complainant. Therefore, it can be concluded that defence of the accused that the 13 complainant has taken unsigned cheques from the accused and misused the same does not inspire confidence of this court. Moreover, the accused has not taken any steps for appointment of any handwriting expert to refer the signatures on Ex.P3 and P4-cheques for expert opinion to ascertain whether the said signatures are signatures of the accused. The accused has not summoned Bank Manager to produce specimen signatures card in this regard. Even the accused has not given satisfactory explanation as to how Ex.P3 and P4-cheques came in possession of the complainant. The explanation offered by the accused that complainant has taken unsigned blank cheques by way of security is not probable nor does it inpsire confidence of this court. Therefore, it appears that the accused has signed differently on Ex.P3 and P4-cheques to avoid his liability to pay Rs.30 lakhs. Moreover, even though the accused has entered the witness box as DW.1 and denied his signatures on Ex.P3 and P4-cheques, he has not offered for cross-examination. It is settled principle of law that when any witness has not subjected and offered himself for cross-examination without any sufficient cause, evidence of such witness has to be discarded. In the present case on hand though sufficient opportunity has been given to the accused to offer himself for cross-examination, he has remained absent. Therefore evidence of DW.1 has to be 14 discarded. Therefore in effect the signatures on Ex.P3 and P4-cheques have not been denied by DW.1 on oath. Hence, the accused has utterly failed to prove that the signatures appearing on Ex.P3 and P4 are not his signatures.
19. Thirdly, the complainant has produced Ex.P1- loan agreement and Ex.P2-promissory note in support of loan transaction. Ex.P1 is loan agreement dtd.15.11.2018 executed between the complainant and accused. It shows that accused availed loan of Rs.30 lakhs and promised to return the same within 1½ months. It is further agreed that the accused shall not pay to complainant any interest for the loan amount but the accused agreed to share the profits and also agreed that the accused shall pay a consolidated sum of Rs.1 lakh to the complainant as profits for the said period of 1½ months. It is further clear from Ex.P1-loan agreement that the accused handed over two post dated cheques I.e Ex.P3 and P4 in favour of complainant towards principal amount. If the accused commits default in payment of principal amount or profits, the complainant can recover the said amount by presenting Ex.P3 and P4-cheques. If the accused repays the principal amount with profit the complainant shall return all the loan documents I.e agreement, promissory note etc., to the accused. Further Ex.P2 is on demand 15 promissory note with consideration receipt dtd.15.11.2018 executed by accused in favour of complainant. Ex.P2 discloses that the accused acknowledged receipt of Rs.30 lakhs from the complainant on 15.11.2018 and promised to pay on demand the said amount to the complainant. PW.1 has deposed regarding execution of Ex.P1 and P2 documents. Even though PW.1 has been cross-examined by accused at length, nothing has been elicited which damages veracity of evidence of PW.1 regarding Ex.P1 and P2-documents. Therefore, Ex.P1 and P2-documents are sufficient to prove loan transaction between the complainant and accused.
20. 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 afterthought without any basis. Unless and until the accused rebuts the statutory presumption with convincing and cogent evidence, burden cannot be shifted on the complainant. The complainant has placed sufficient materials on record to establish his contention. The evidence on record is sufficient to accept the case of the complainant that accused had issued the cheques in 16 question towards discharge of legally enforceable debt or liability 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.
21. Point No.3: As discussed in connection with Point Nos.1 & 2, the complainant has proved his 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.32,80,000/- 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.32,75,000/- 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.
1722. 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.32,80,000/- for the offence punishable U/s.138 of N.I. Act within one month. In default of payment of fine amount, the accused shall under go simple imprisonment for a period of 18 months.
By exercising the power conferred U/s.357(1) of Cr.PC., out of total fine amount of Rs.32,80,000/-, a sum of Rs.32,75,000/- 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 21st Day of December, 2019) (K. GURUPRASAD) XIV A.C.M.M., Bengaluru 18 ANNEXURE Witnesses examined for the complainant:
CW.1 : Mr. A. Zaheer Ahmed
Witnesses examined for the defence:
DW.1 : Mr. Syed Manzoor Ali
Documents marked for the complainant:
Ex.P1 : Loan Agreement
Ex.P2 : On Demand Promissory Note
Ex.P3 & P4 : Two Cheques
Ex.P5 & P6 : Bank endorsements
Ex.P7 : Legal notice
Ex.P8 : postal receipt
Ex.P9 : Postal acknowledgement
Ex.P10 : Reply notice
Documents marked for the defence:
Ex.D1 : Notice dtd.12.1.2019
Ex.D2 : Bank statement
(K. GURUPRASAD)
XIV A.C.M.M., BENGALURU