Bangalore District Court
Mrs.Sree Devi.S vs Mr.Mohammed Suhail on 20 April, 2018
IN THE COURT OF THE XX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY
Dated this the 20th day of April 2018
PRESENT: KALPANA.M.S.,
B.Sc., LL.M.,
XX ADDL. C.M.M. Bengaluru.
C.C.No.20967/2012
Complainant : Mrs.Sree Devi.S
W/o N.I. Act.Sanjay Raju,
Aged about 39 years,
R/at No.9, 5th Main Road,
7th Cross, Krishnappa Block,
Ganganagar Extension,
Bengaluru - 560 032.
Vs.
Accused : 1. Mr.Mohammed Suhail,
S/o Mohammed Ismail,
Aged about 32 years,
R/at No.28/5, 5th Main,
10th Cross, 1st Sub-Cross,
Giddappa Block,
Ganganagar Extension,
Bengaluru- 560 032.
2. Mr.Dayal.S
As per court order dated 18.08.2012,
deleted.
Offence complied of : U/S. 138 of N.I. Act.,
2 C.C.20967/2012
Plea of accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of Order : 20-04-2018
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused alleging that, he has committed the offence.
02. The sum and substance of the complaint, is as follows;
On 09.08.2006, the complainant's husband by name Mr.N.Sanjay Raju along with one Mr.V.Murali Krishna have entered in to rental agreement for a commercial shop, situated at RT Nagar, Bengaluru with it's owner Mrs.C.Vimala to run a shop in the name and style M/s.The Photo Xpress Digital Color Lab & Studio. Subsequently, the complainant and V.Murali 3 C.C.20967/2012 Krishna has entered into a partnership and they have executed a partnership deed on 15.08.2006 for running the shop. The accused No.1 has approached the complainant and her partner to run the said shop which include 2 cameras, 4 computers, 2 printing machines, 1 developing machine, 4 umbrellas, instant printer, 4 furnishers, 1 air conditioner, rolls, batteries, DVC Cassatas, Albums etc, worth Rs.20,00,000/- on monthly lease cum rental basis and accordingly the complainant and her partner have entered into a lease/rental agreement with the accused No.1 on 15.01.2010 for period of 11 months. As per the said agreement, the accused No.1 shall pay a sum of Rs.74,150/- as monthly rent cum lease amount to the complainant. Accordingly, the complainant has received the monthly rental from 15.02.2010 to 14.01.2011, thereafter the accused No.1 failed to pay the monthly rentals to the complainant. It is came to the notice of the complainant that, with out their consent, accused No.2 has entered into an agreement with accused No.1 for running the said shop. Thereafter, the complainant and her partner have vacated both 4 C.C.20967/2012 the accused on 15.04.2011 by canceling the lease agreement. In discharge of their legally liability , the accused No.1 has issued a cheque bearing No.019507 dated 15.02.2012 for Rs.2,10,575/-, drawn on IDBI Bank, R.T.Nagar Branch, Bengaluru. Complainant presented the said cheque for encashment through his banker i.e., HDFC bank, R.T.Nagar Branch, Bengaluru and the said cheque returned with an endorsement "Payment Stopped By Drawer", dated 17.02.2012. Thereafter, complainant got issued legal notice on 12.03.2012 to accused. The said notice returned with an endorsement ' insufficient address'. Again notice sent through DTDC courier on 16.03.2012 to the same address and the said notice was duly served to the accused 17.03.2012. Accused neither replied the notice nor paid the cheque amount. Hence, this complaint.
03. On filing of complaint, this court has taken cognizance for the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of complainant was recorded. Being satisfied that there are prima-facie materials to proceed 5 C.C.20967/2012 against accused, summons was issued. After appearance, accused enlarged on bail and plea was recorded as per section 251 of Cr.P.C. Accused has not stated the defence.
04. In order to prove his case, complainant and one witness were examined as PW.1 & 2 and got marked documents from Ex.P.1 to 8. The statement under section 313 of code of criminal procedure is recorded, read over and explained to the accused. The defence of the accused is total denial. Further accused examined as DW.1 and got marked a documents as Ex.D.1.
05. In this case, the evidence on record shows that summons trial procedure was adopted instead of summary trial. As per the judgment passed by Supreme Court reported in 2014 Cr.L.J. 1953, in a case of Mehsana Nagarik Sahakari Bank Limited V/s. Shreeji CAB Company Limited and others, conducting Denova trial does not arises.
6 C.C.20967/2012
06. Heard the Learned Counsel for complainant and accused. Perused the citations and materials on record.
07. The points that arise for my consideration are as follows;
POINTS
1. Whether the complainant proves that, accused issued cheque for Rs. 2,10,575/- towards discharge of his liability, which was returned unpaid on presentation and also not complied the notice issued by the complainant and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
My answer to the above points is as follows;
1. Point No.1: In the Affirmative
2. Point No.2: As per final order for the following;
REASONS 7 C.C.20967/2012
08. POINT No.1: Complainant has filed this complaint alleging that accused has committed offence under section 138 of N.I. Act. He pleads and asserts that, towards discharge of his liability, accused has issued a cheque for Rs.2,10,575/-, drawn on IDBI Bank, R.T.Nagar Branch, Bengaluru. The said cheque came to be dishonoured on presentation. Complainant has issued notice within time stipulated calling upon the accused to pay the amount covered under cheque. Inspite of service of notice accused has not paid the amount within 15 days, which gave cause of action to file this complaint. He further relied on the documents from Ex.P.1 to 8. PW.1 and 2 witnesses were subjected to cross examination.
09. In this scenario, let us scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 is cheque dated 15.02.2012, Ex.P.2 is partnership deed, Ex.P.3 is authorization letter, Ex.P.4 is bank endorsement dated 17.02.2012, the bank endorsement that cheque returned 8 C.C.20967/2012 unpaid due to payment stopped, attracts section 138 of Negotiable Instrument Act. In the decision reported in, 2013 (2) KCCR SN 109, in a case of M.S.Srikara Rao V/s. H.C.Prakash, it is held that;
" Negotiable Instrument Act, 1881, Section 138
- Stop payment instruction - Accused not offering any explanation for- Implies insufficient funds in his account- Cannot be absolved of liability."
Thus, statutory requirements of section 138 of N.I. Act is complied.
Ex.P.5 legal notice dated 12.03.2012 and the said notice served on accused, Ex.P.6 is reply issued by the accused Ex.P.7 is postal receipt, Ex.P.8 is courier receipt. This complaint came to be filed on 30.04.2012. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act is complied with and this complaint is filed within time. Thus, complainant relied on the 9 C.C.20967/2012 statutory presumptions enshrined under section 118 read with section 139 of N.I. Act.
10. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence and rebut the presumption available to the complainant. Let us examine whether accused has successfully rebutted the presumptions of law. It is the specific defence of the accused that, one Murali Krishna was running a business under the name and style of M/s The Photo Xpress Digital Colour Lab & Studio at RT Nagar, Bengaluru. He offered to sell the equipments for Rs.4,00,000/-. As the accused did not show the interest to by for higher price, it was agreed that accused take over the business in the same premises till Murali Krishna found a buyer for a better deal and accused agreed to pay Rs.75,000/- towards lease of the photography equipments and rentals of Rs.24,150/- per month to the owner of the building. Accordingly, an agreement was entered between parties. Subsequently, Murali Krishna came forward to offer the equipments for sale for an amount of 10 C.C.20967/2012 Rs.2,85,575/-. After deducting already paid lease amount of Rs.75,000/-, accused issued cheque in question for a sum of Rs.2,10,575/- without mentioning the name, that the equipments would be delivered in a short period and under escrow that the cheque to be honoured after signing the sale receipt. Later on, Murali Krishna taken the possession of the studio and handed over to one Dayal, who was shown as accused No.2 in this case. Accused vacated the shop and handed over the possession to Muruli Krishna prior to the dates for which complainant is claiming the rents. He had demanded to return the cheque, said Murali Krishna gave some reasons and finally informed that, the cheque was missing. Thereafter, accused issued Stop Payment to his banker through letter dated 17.01.2011. When the said stop payment instructions was made to the bank on 17.01.2011, issuance of Ex.P.1 cheque in favour of complainant on 15.02.2012 does not arise at all. Complainant and Murali Krishna colluded with each other and misused the cheque in question to file the false complaint. To endorse this contention, accused examined as DW.1 and relied 11 C.C.20967/2012 on the "Stop Payment Intimation" issued to the bank. This witness was subjected to cross examination.
11. In the back drop of the rival contentions, this court has given anxious consideration to the case papers. The accused has admitted that disputed cheque belongs to his bank account and also admitted the signature present on the said cheque. Law is settled on this point that, when the disputed cheque and the signature present therein is admitted by the accused, the presumptions of law enshrined under section 118 read with section 139 of Negotiable Instrument Act would operate. Thus, the burden shifts on the accused to prove his defence by placing cogent and acceptable evidence countering the case put forth by the complainant.
12. This proposition of law is laid down in the Hon'ble Apex court relied on the decision reported in, 2001 CRI.L.J 4745 (Supreme Court), between K.N.Beena Vs. Muniyappan, it is held that;
12 C.C.20967/2012
" Negotiable Instrument Act -S- 138, 139, 118-
cheque dishonour complaint- Burden of proving that cheque had not been issued for any debt or liability - is on the accused - Denial/averments in reply by accused are not sufficient to shift burden of proof on to the complainant- Accused has to prove in trail by leading cogent evidence that there was no debt or liability - setting aside conviction on basis of some formal evidence led by accused - Not proper. "
In another decision reported in, 2004(3) KCCR 1816, between L.Mohan Vs. Mohan Naidu, it is held that;
" When once the issue of cheque and the signature of it is admitted, court has to presume that the cheque has been issued for discharging the debt or liability. The burden of proof shifts on the accused to prove that there was no liability/debt or that the cheque was issued to a different person. "13 C.C.20967/2012
Further, the decision reported in, (2002)1 Supreme Court cases 234 between M.M.T.C. Ltd and another Vs. Medchl Chemicals and Pharma (P) Ltd and another, it is held that;
" Negotiable Instrument Act S-138-
Complainant need not allege existing of
subsisting debt or liability against which
cheque issued - Burden of proving non-
existence of any debt or liability is on the
accused to be discharged at the trial- prior to that complaint cannot be quashed by the High Court under section 482 code of criminal procedure. "
In the above decisions, it is clearly laid down that, the burden is on the accused to prove the contrary.
13. It is forthcoming from the evidence on record that, accused has taken divergent defences. In the cross examination of complainant, it was suggested that, accused has given the cheque in question for security purpose in relation of the bulk printing contract of photos. Whereas, in his evidence, accused 14 C.C.20967/2012 has taken contrary defence that, cheque in question was issued in favour of Murali Krishna towards purchase of the equipments of photo express digital colour lab and studio. These divergent defences show that, accused is not consistent with his defence.
14. Nevertheless, accused has admitted that he was running the photo studio belongs to Murali Krishna under the lease agreement executed in the month of January 2010. But, for the reasons best known to him, accused has not produced the said lease agreement. However, from this admission attributable to the accused, it could be safely infer that accused has taken the photo studio on lease. No doubt, it is contended by the accused that, complainant is not at all concerned with the said transaction. However, Ex.P.2- partnership deed shows that, Muralikrishna and complainant are under partnership to run the said photo studio. As such, this contention of the accused that, complainant is not related to the impugned transaction with Muralikrishna, is not acceptable.
15 C.C.20967/2012
15. That apart, said Muralikrishna examined as PW.2 has admitted the case of the complainant and authorization in favour of the complainant to receive the arrears of the rent from the accused. At the cost of repetition, when the accused has admitted that, he was in possession of the photo studio under the lease agreement, it is for him to establish that, disputed cheque was not issued towards arrears of the rent. At the same time, court must not lost sight of the aspect that, Muralikrishna
-PW.2 unequivocally denied contention of the accused that, cheque was received by him towards sale of equipments of the photo studio. Thus, berect of suggestions to complainant and said Murali Krishna, accused has not placed cogent evidence to believe his case that the disputed cheque was issued either towards security for bulk printing order or towards purchase of the equipments of the studio. To put it other way, accused has not discharged the burden of rebutting the presumptions of law drawn in favour of complainant.
16 C.C.20967/2012
16. Moreover, accused has stated in his evidence that, he has not taken any positive steps to get back the cheque issued in favour of the Murali Krishna. If at all the disputed cheque was issued towards purchase of the equipments of the studio, for what reason accused has not taken steps against Murali Krishna demanding return of the cheque, even after sale of the studio in favour of the third person, is not satisfactorily explained. Though, it is contended that, Murali Krishna has failed to return the cheque due to misplacing, admittedly no written letter is obtained by the accused from the said Murali Krishna to that effect. For better appreciation, the relevant portion of evidence of DW.1 is reproduced as under;
É É ªÀÄÄgÀ½ PÀȵÀÚgÀªÀjUÉ PÉÆnÖzÀÝ ZÉPï PÀ¼ÉzÀÄ ºÉÆÃVzÉAiÉÄAzÀÄ DvÀ¤AzÀ °TvÀ ¥ÀvÀæ vÉUÉzÀÄPÉÆAr®è. ¸ÀȶÖvÀ «ZÁgÀªÁVgÀĪÀÅzÀjAzÀ ªÀÄÄgÀ« PÀȵÀÚgÀªÀgÀÄ ZÉPï PÀ¼ÉzÀÄ ºÉÆÃVgÀĪÀ §UÉÎ °TvÀªÁV §gÉzÀÄPÉÆnÖ®èJAzÀgÉ ¸ÀjAiÀÄ®è.É É 17 C.C.20967/2012 As such, this court is hesitant to believe this contention of accused.
17. Further more, accused contend that, he was paying the rent of the shop to the owner of the building, wherein the photo studio was housed. It is also stated that accused has got documents to show the payment of the shop rent to the owner. But, for the reasons best known to him, accused has not produced any such documents to show the payment of shop rent. For better appreciation, the relevant portion of evidence of DW.1 is reproduced as under;
É É zÀÆgÀÄzÁgÀjUÉ PÉÆqÀ¨ÉÃPÁVgÀĪÀ ¨ÁrUÉ ¨ÁQAiÀÄ ¥ÁªÀwAiÀÄ£ÀÄß vÀ¦à¹PÉƼÀÄîªÀ ¸À®ÄªÁV ¸ÀļÀÄî ¸ÁPÀëå £ÀÄrAiÀÄÄwÛzÉÝÃ£É JAzÀgÉ ¨ÁrUÉAiÀÄ£ÀÄß ªÀiÁ°ÃPÀjUÉ £ÉÃgÀªÁV PÉÆnÖgÀĪÀ ¨Á§ÄÛ zÁR¯É EzÉ. É É Thus, non production of the aforesaid documents leads to draw an adverse inference against accused . 18 C.C.20967/2012
18. From the overall consideration of the evidence on record that, it is forthcoming that, accused has not taken probable defence to rebut the statutory presumption. Mere denial is not sufficient to discharge the onus shifted on accused. To fortify this opinion, it is proper to refer the decision reported in, 2001 CRI.L.J. 4647, in a case of Hiten P.Dalal V/s. Bratindranath Banerjee, wherein it is held that;
"(B) Negotiable Instrument Act ( 26 of 1881), Ss.139, 138- Dishonour of cheque-
Presumption that cheque was drawn for discharge of liability of drawer- Is presumption of law- Ought to be raised by Court in every case- Rebuttal evidence- Nature- Mere plausible explanation is not sufficient- Proof of explanation is necessary.
Evidence Act (1 of 1872), Ss .114, 101-
104."
Further in another decision reported in, 2017(2) A.K.R. 527, Arjun Vs.E.Shekar, it is held that, S. 138, 139- Presentation of lawful consideration- Rebuttal of - Burden of proving that cheque has not been issued for any debt or liability - is on accused - mere plausible explanation not sufficient to disprove complainant' s case.
19 C.C.20967/2012From the gist of the ratio laid down in the above decisions, it is clear that, burden shift on the accused to rebut the statutory presumption through cogent evidence, which is not discharged by the accused in the present case.
19. The accused has taken a vague defence and not placed cogent evidence to prove the same. This aspect is discussed in detail in a decision reported in, 2014(4) AKR 98 between Sripad Vs.Ramadas M.Shet, Criminal Appeal No.2689 of 2009, wherein it is held that;
Negotiable Instrument Act (26 of 1881), Ss.138,139, 118- Dishonour of cheque-
Acquitted-Validity-Cheque issued by repay loan amount to complainant, was dishonoured-
Specific defence -However, accused failed to rebut initial presumption under sections 118 and 119- Mere distorted version or mere taking up defence by It means that he is not liable to pay any amount- Are not sufficient to put back the burden on to the complainant- Acquittal of accused- Not proper.
The ratio laid down in the cited decision is squarely applicable to the facts on hand.
20 C.C.20967/2012
20. As for as proof of existence of legally enforceable debt is concerned, it is profitable to refer the decision of larger bench of the Hon'ble Apex Court reported in Rangappa Vs. Mohan reported in AIR 2010 SC 1898 = 2010 AIR (SCW) 2946, Wherein their lordships pleased to observe that, "In the light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by section 139 of the Act does indeed include the existence of the legally enforceable debt or liability".
In view of the law laid by three judges bench of Hon'ble Apex Court, the presumption enshrined under section 139 of the N.I. Act is extendable to the existence of legally enforceable debt. Accused has not placed cogent material to rebut the said presumption. As such, this contention of the accused holds no water.
21. In another decision reported in, 2015 AIR SCW 3040, in a case of Criminal Appeal No.728 of 2015 between, T.Vasanthakumar Vs. Vijayakumari, it is held that;
21 C.C.20967/2012
'Cheque as well as signature on it not disputed by accused- Presumption under section 139 would be attracted story brought out by accused that cheque was given to complainant long back in 1999 as a security to a loan, the loan was repaid but complainant did not return security cheque- is unworthy of credit, apart from being unsupported by any evidence.' From the gist of the ratio in the afore said decisions it is clear that, cheques issued towards security falls within the purview of section 138 of Negotiable Instrument Act and does not absolve liability of the accused.
22. Lastly, the accused has taken bleak contention that, she has intimated the complainant that a stop payment direction was issued to her banker. Accordingly, endorsement issued by the banker as per Ex.P.4, which does not attracts penal provision under section 138 of N.I. Act. This contention of the accused is not acceptable, in view of the law laid down by the Hon'ble Apex Court, in the decisions cited here under; 22 C.C.20967/2012 It is for the accused to prove during the course of trial that such instructions were not issued for insufficiency of funds in his account. Relevant decision is AIR 2002 SC 182- M.M.T.C. Ltd Vs. Medchi Chemicals & Pharma (Pvt.) Ltd, It is also held that the complaint need not specifically allege that debt or liability existed. In this regard, the latest decision is reported in AIR 2010 SC 1898 = 2010 AIR (SCW) 2946 in a case of Rangappa Vs. Mohan, may be perused, wherein it is held in para No.9 that, - "Ordinarily in cheque bouncing cases, what the courts have to consider whether the ingredients of the offence enumerated in section 138 of the Act have been met if so, whether the accused was able to rebut the statutory presumption contemplated by section 139 of the Act. With respect to the facts of the present case, it must be clarified that contrary to the trial court's finding, section 138 of the Act indeed be attracted when a cheque is dishonoured on account of 'stop payment' instructions sent by accused to his bank in respect of a post dated cheque, irrespective of insufficiency of funds in the account. This position was clarified by this court in Goa Plast (Pvt Ltd) Vs. Chico Ursula D'Souza - AIR 2003 SC 2035".
23 C.C.20967/2012
23. In this case plea of the accused was recorded as per section 251 of Cr.P.C. Accused pleaded not guilty. As per section 251 of Cr.P.C. accused has to state about his defence. Here, except pleading not guilty accused has not stated his defence at the time of recording plea. As per the decision reported in AIR 2014 SC 2528 (Indian Bank Association V/s Union of India), Crl. Petition No.8943/2010 M/s.Mess Transgare Pvt V/s Dr .R. Parvathareddy and in Rajesh Agarwals case, Wherein, it is held that; " Accused cannot simply say " I am innocent " or " I pleaded not guilty ". The proposition of law laid down in the aforesaid decision is squarely applicable to the facts and circumstances of this case. As such, it cannot be taken that accused has rebutted the presumption of law enshrined under section 139 and 118 of N.I. Act, by mere pleading not guilty.
24. From the discussion made supra, it is clear that, accused has neither taken probable defence nor taken steps to prove the same. The contention of the repayment of the amount covered under the cheque is also not proved through cogent and 24 C.C.20967/2012 acceptable evidence. To put it other way, accused has not taken and proved probable defence to rebut the presumption of law available in favour of the complainant, envisaged under section 118 read with section 139 of N.I. Act. Accordingly, the case of the complainant is believable. Hence, this point No.1 under consideration is answered in the affirmative.
25. POINT NO.2: In view of the reasons stated and discussed above, the complainant has proved the guilt of the accused punishable under section 138 of N.I. Act It is worth to note that, the offence is of the nature of civil wrong. Hence, it is proper to award sentence of fine, instead of awarding sentence of imprisonment. Hon'ble Supreme Court of India in a decision reported in, (2015) 17 SCC 368, in a case of H.Pukhraj Vs. D.Parasmal, observed that, having regard to the length of trial and date of issuance of the cheque, it is necessary to award reasonable interest on the cheque amount. Considering all these aspects, this court proceed to pass the following;
25 C.C.20967/2012
ORDER
Acting under section 255 (2) of
Criminal Procedure Code, accused is
hereby convicted for the offence punishable under section 138 of Negotiable Instrument Act and sentenced to pay a fine of Rs.3,35,000/- (Three Lakh Thirty Five Thousand only). In default thereof accused shall undergo simple imprisonment for 3 (Three) months.
Acting under section 357(1) (b) of code of criminal procedure, it is ordered that, Rs.3,25,000/- ( Three Lakh Twenty Five Thousand only), there from shall be paid to the complainant as a compensation, remaining fine amount of Rs.10,000/-
( Ten Thousand only) is defrayed to the
state for the expenses incurred in the
prosecution.
The bail bond of the accused stands
cancelled.
26 C.C.20967/2012
Office to supply the copy of this
Judgment to the accused immediately on
free of cost.
{Dictated to the stenographer directly on computer, corrected and then signed by me and then pronounced in the open court on this 20th day of April 2018}.
(KALPANA.M.S.) XX ACMM, Bengaluru.
ANNEXURE List of witnesses examined on behalf of complainant:
P.W.1 Mrs.Sree Devi.S PW.2 Mohammed Suhail
List of documents produced on behalf of complainant:
Ex.P.1 Cheque
Ex.P. 1(a) Signature of the accused
Ex.P. 2 Partnership deed
Ex.P. 3 Authorization letter
Ex.P. 4 Bank endorsement
27 C.C.20967/2012
Ex.P. 5 Legal notice
Ex.P.6 Reply notice
Ex.P.7 Postal receipt
Ex.P.8 Courier receipt
List of witnesses examined on behalf of accused:
D.W.1 Suhail List of documents produced on behalf of accused:
Ex.D.1 Letter to bank
XX A.C.M.M.,
Bengaluru.