Bangalore District Court
Shivalingaiah vs Anand on 15 March, 2024
1
C.C.No. 3671/2019
KABC030106782019
Presented on : 11-02-2019
Registered on : 11-02-2019
Decided on : 15-03-2024
Duration : 5 years, 1 months, 4 days
IN THE COURT OF THE XXII ADDL.CHIEF METROPOLITAN
MAGISTRATE, BENGALURU
PRESENT: SRI.JAI SHANKAR.J,
B.A.L., LL.B
XXII ADDL.C.M.M., BENGALURU.
DATED: THIS THE 15TH DAY OF MARCH 2024
JUDGMENT UNDER SECTION 355 OF CODE OF
CRIMINAL PROCEDURE
C.C.NO. : 3671/2019
COMPLAINANT : Sri. B.S. Shivalingaiah,
S/o. Sidda Veeraiah, Major,
Resident of No.5,
22nd Main Road, 1st Cross,
Aralimarada Road,
Virushabharathi Nagar,
Kamakshipalya,
Bengaluru - 560 079.
(By Sri. Balaraj.A.C., Adv.,)
V/S.
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C.C.No. 3671/2019
ACCUSED : Sri. Anand,
S/o. Shivanna, Major,
R/o.No.47,
Meenakshinagar Garden,
Muddanna Road,
Kamakshipalya,
Bengaluru - 560 079.
(By Sri. M.Chidananda Murthy, Adv.,)
Offence complained : U/s.138 of N.I.Act
of
Plea of the Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 15.03.2024
JUDGMENT
This is a private complaint filed by the complainant against the accused for the offence punishable under Section 138 of Negotiable Instruments Act.
2. The brief facts of the complainant's case are as under:
The complainant and the accused were known to each other. The accused was carrying a milk vending business which is supplied by Nandini Milk at Prashanth Nagar, Bengaluru and towards the investment and development of 3 C.C.No. 3671/2019 the business, the accused has raised hand loan from time to time since February 2016 to September 2018 to an amount of Rs.9,50,000/-. The accused has assured to repay the said amount and accordingly, he had issued the cheque bearing No.016091, dt:29.10.2018 for Rs.9,20,000/- drawn at Federal Bank, Gandinagar Branch, Bengaluru, with an assurance that, it would be honored. However, on its presentation, it is being dishonored and after bringing the fact of the dishonor to the accused, he has issued another cheque bearing No.549450, dt:15.12.2018 for Rs.9,20,000/- drawn on Bank of India, Basaveshwaranagara, Bengaluru with an assurance that, it would be honored. Again on its presentation, it again dishonored with shara as "Account Closed' vide memo dt:17.12.2018. The complainant has got issued legal notice dt:07.01.2019 to the accused through RPAD calling upon the accused to pay the cheque amount within 15 days from the date of receipt of notice. The said notice was served on accused, but the accused has not chosen to pay the cheque amount. Hence, this present complaint. 4
C.C.No. 3671/2019
3. After filing of the complaint, this court has taken cognizance of the offence punishable U/s.138 of N.I.Act. Sworn statement of the complainant was recorded. Being satisfied that, there are prima-facie materials to proceed against accused, summons was issued. After appearance of the accused, he was enlarged on bail and plea was recorded. The accused has not pleaded guilty, but submitted that, he would go for the trial.
4. From the basis of the pleadings, the following points that arise for my consideration are as follows:-
1. Whether the complainant proves that, the accused issued a cheque bearing No.549450 dt:15.12.2018 for Rs.9,20,000/- drawn on Bank of India, Basaveshwanagar Branch, Bengaluru, towards discharge of his liability which was returned unpaid on presentation for the reason "Account Closed" and despite of knowledge of the notice, he has not paid the said cheque amount and thereby, committed an offence punishable U/s.138 of N.I.Act?
2. What order?5
C.C.No. 3671/2019
5. The sworn statement and the documents marked at Ex.P.1 to P.7 of the complainant is being treated as the complainant evidence as per the decision rendered by the Hon'ble Apex Court in Indian Bank Association Vs. Union of India and Ors., reported in 2010 (5) SCC 590. The statement of accused as required U/s.313 of Cr.P.C. is recorded and he has denied the incriminating evidence appeared against him and has submitted that, he has the evidence, but however he has not chosen to adduce evidence.
6. Heard the argument from the both side and perused the materials available on record.
7. The complainant counsel also relied upon the decisions reported in,
1. (2020) 13 SCC 471 - D.K. Chandel Vs. Wockhardt Ltd., and another.,
2. (2021) 5 SCC 283 - Kalamani Tex and another., Vs. P. Balasubramanian 6 C.C.No. 3671/2019
3. 2021 SCC Online SC 1174 - Sunil Todi and others., Vs. State of Gujarat and another.,
4. 2018) 8 SCC 165 - Krishan Rao Vs. Shankargouda The accused has also relied upon the following decisions:
1 2004 (2) Bankmann 475 : 2004 2 DCR 511 - Abdul Nazar Vs. Dileep Kumar
2. 2009 0 Supreme (Bom) 268 - Shri. Prabhakar Rauji Shet Vs. Ms. Shrikanti M. Arolkar & Anr.,
3. 2006 6 SCC 39 - M.S. Narayana Menon Alias Mani Vs. State of Kerala and another
4. 2008 Crl. L.J. 2955 Bombay High Court
-Rajendraprasad Gangabishen Porwal Vs. Santaoshkumar Parasmal Saklecha and another.,
5. ILR 2007 KAR 2709 - V.G. Sabhahit.J Vs. M. Senguttuvan Vs. Mahadevaswamy
6. AIR 2008 SC 1325 - Krishna Janardhan Bhat Vs. Dattatraya G. Hegde,
7. (2007) 5 SCC 264 - Kamala.S Vs. Vidhyadharan M.J. and another
8. (2009) 2 SCC 513 - Kumar Exports Vs. Sharma Carpets
9. 2011 0 SCC (Ker) 579 - K. Hema, C.Santhi Vs. Mary Sherly and another., 7 C.C.No. 3671/2019
10. ILR 2008 KAR 3635 - K. Narayana Nayak Vs. Sri. M. Shivarama Shetty
11. Crl.Appeal No. 532/2022- Rahiya Vs. Jasna and another The decisions relied by both side deals on the point of presumption, rebuttable presumption and on the point of financial capacity.
8. Perused the materials available on record.
9. My answer to the aforesaid points are as under:-
Point No.1 :- In the Affirmative Point No.2 :-As per the final order, for the following:-
REASONS
10. Point No.1:- The complainant has filed this complaint alleging that, the accused has committed an offence punishable U/s.138 of N.I.Act. He pleads and asserts that, the accused in discharge of his liability has issued the cheque bearing No.549450 dt:15.12.2018 for Rs.9,20,000/- drawn on Bank of India, Basaveshwanagar Branch, Bengaluru. The complainant has presented the said cheque for encashment 8 C.C.No. 3671/2019 through his banker. The said cheque was returned unpaid with an endorsement "Account closed" on 17.12.2018.
Thereafter, the complainant has got issued demand notice on 07.01.2019 to the accused by demanding the payment of the cheque amount, but inspite of the receipt of notice, he has not chosen to comply the demand, which gave raise to the cause of action to file this complaint.
11. In this scenario, if the documents placed by the complainant is scrutinized, the complainant in order to examine the compliance of statutory requirements as envisaged U/s.138 of NI Act, he got produced the Ex.P.1 cheque dt: 29.10.2018 and Ex.P.3 cheque dt:15.12.2018. The Ex.P.1 cheque is returned with an endorsement as Non CTS cheque as per Ex.P.2 and Ex.P.3 is being returned with shara as Account closed as per Ex.P.4, the return advise dt:17.12.2018. The Ex.P.5 is the office copy of the legal notice dt:07.01.2019, Ex.P.6 is the postal receipt and Ex.P.7 is the track consignment which indicates the delivery of the the legal 9 C.C.No. 3671/2019 notice as dt: 18.01.2019. The present complaint is filed on 05.02.2019. A careful scrutiny of the documents relied by the complainant goes to show that, a statutory requirement of Sec.138 of NI Act is being complied with and this complaint is filed well in time. The complainant has discharged his initial burden by examining him as PW.1 and by producing the documents as referred above. Thus, complainant is entitled to rely on the statutory presumptions enshrined U/s.118 R/w. Sec. 138 of N.I.Act.
Sec. 118 of the Act reads as thus, that every Negotiable Instrument was made or drawn for consideration and that, every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
Further Sec.139 of Negotiable Instrument Act provides for presumption infavour of PA holder. It reads like this, it shall be presumed, unless the contrary is proved, that, the holder of a cheque received the cheque, of the nature referred to 10 C.C.No. 3671/2019 in Sec. 138, for the discharge, in whole or in part, or any debt or any other liability.
12. A combined reading of the referred sections raises a presumption infavour of the holder of the cheque that, he has received the same for discharge in whole or in part of any debt or other liability. No doubt, the said presumptions of law are rebuttable in nature, the accused can take probable defense in the scale of preponderance of probabilities to rebut the presumption available to the complainant. It is need less to say that, the evidence of the PW.1 can be rebutted even by effectively cross-examining the PW.1, rather entering the witness box.
13. So here, it is relevant to note that, whether the accused by cross examining the PW.1 has really rebutted the presumption available under the law which requires due consideration. Here, it is undisputed fact that, the complainant and the accused are known to each other and it is also undisputed fact that, the cheques at Ex.P.1 and P.3 11 C.C.No. 3671/2019 belongs to the accused and also, signature appearing therein. It is also, undisputed fact that the cheque at Ex.P.1 is returned with shara as "Non CTS cheque as per Ex.P.2 and the cheque Ex.P3 is being returned with shara as "Account closed" at Ex.P.4. Here, the complainant by adducing his evidence has deposed about the accused approaching him and availing the hand loan of Rs.9,20,000/- from time to time ie., from the month of February 2016 to September 2018 for the development of his milk vending business and he issuing the cheques at Ex.P.1 and P.3 towards the discharge of the loan liability. But, here though the accused admits the relationship and so also, of he carrying on the business of milk vending, he totally denies the fact of he acknowledging Rs.9,20,000/- from the complainant, rather he claims that, he used to raise small amount of loan from Rs.50,000/- to Rs.1,00,000/- and he used to repay it with interest. He also claims that, while he raising a small amount of the loan, the complainant used to take two blank cheques, one for the principle amount and another for the interest. Thereby, 12 C.C.No. 3671/2019 contending that, the accused is due only at Rs.1,00,000/- and questioning the financial capacity of the complainant, prayed to dismiss the complaint.
14. In this back ground, if the rival claims of the parties are taken into consideration, heavy burden is upon the complainant to establish the loan transaction of Rs.9,20,000/- and also, the issuance of the cheques by the accused was only towards the discharge of the loan liability. Here, though the complainant has not produced any documentary proof with regard to his income, but he claims that, he was working as a car driver and he was getting income not only through his earning, but also through the rent as well as the through the agriculture. No doubt, the complainant except adducing his oral evidence with regard to his income proof has not produced any documentary evidence, but again it is also relevant to note that, when the accused has taken a specific defence that, he never borrowed Rs.9,20,000/- from the complainant, rather he has raised hand loan of Rs.1 Lakh only and handed over the disputed 13 C.C.No. 3671/2019 cheques towards the security, unless the accused establishes this fact, a presumption could be drawn that, the accused would have not issued the disputed cheques unless there was a liability of Rs.9,20,000/-. Because, no prudent man would issue the cheques unless there is a liability under it. Here, the disputed cheques at Ex.P.1 & P3 does belongs to the accused is not in dispute and so also, the signatures appearing therein also pertains to the accused is not in dispute. When, the accused claims that, he had raised only Rs.1 Lakh from the complainant and had handed over the disputed cheques as a security towards the principle amount and the interest, nothing had prevented the accused to get reduced the said fact through the document.
15. Perhaps, when he claims that, he had issued one cheque for the principle amount and another cheque for the interest amount, again a burden was casted upon the accused to establish as to when he had raised the loan of Rs.50,000/- to Rs.1,00,000/- and what was the interest that 14 C.C.No. 3671/2019 was agreed to be paid. It is an admitted fact that, the accused nowhere posed a single suggestion with regard to the period of raising the loan and what was the interest fixed. Infact, the accused also claims that, he was raising only Rs.50,000 to Rs.1,00,000/- from the complainant and he used to repay the said amount with interest. Even, there is no documentary evidence to establish this fact. Perhaps, the the accused at the another breath admits the fact of he being due of Rs.1 Lakh. When the very admission of the defence goes to indicate that, he is due only for Rs.1 Lakh, nothing had prevented the accused to reply the legal notice by taking this stand. Even, he has not produced any document to show that, he had got closed the bank account for the particular reason at a particular point of time. Moreso, if really the accused had handed over one of the disputed cheque towards the principle amount, he could have mentioned the said amount in the cheque, rather the Ex.P.1 & 3 would go to indicate as Rs.9,20,000/- which itself goes to indicate that, the stand taken by the accused appears to be a false claim. 15
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16. Admittedly, if the case of the defence was required to be accepted, he ought to have made some efforts by replying the notice or ought to have demanded the complainant to return the disputed cheques at the particular point of time when he happens to have repaid the receipt amount or ought to have initiated some action before the jurisdictional police for not returning the disputed cheques. Absolutely there is no evidence placed by the accused to appreciate his defence. When, the very evidence available on record goes to indicate that, having the accused not made any sincere efforts as referred above, taking the above defence at this stage would certainly hold no force. It would not be wrong to say that, the defence raised by the accused appears only to avoid the liability under the cheques. Infact, when the accused claims that, he had issued the Ex.P.1 & P3 the disputed cheques towards the receipt of the principle amount of Rs.1 Lakh and another cheque towards the interest, he was supposed to establish this defence by placing the positive evidence, but by gathering the Ex.P1. & P3 the cheques alone, it again falsifies 16 C.C.No. 3671/2019 the defence case. Because, if the accused had issued Ex.P.1 & P3 at a particular point of time, it should be either the CTS cheque or a Non CTS cheque. Because, there might be no possibility to issue one cheque as a CTS cheque and another as a Non CTS cheque. The issuance of Non CTS cheque is being discontinued from 31.12.2018.
17. Here, the Ex.P.1 the cheque dt: 29.10.2018 is being dishonored for the reason of it being "Non CTS cheque" and Ex.P.3 the cheque dt: 15.12.2018 is being returned with shara as "The captioned cheque deposited by you has been presented in CTS clearing and is returned by Bank of India for the reason 50 Account closed". So, again this evidence goes contrary to the defence case. Because, as said above, if the accused had issued the disputed cheques at a particular point of time towards the principle amount and towards the interest, he would have issued both the cheques which pertains to Non CTS cheque or the CTS cheque, but not one cheque which pertains to the Non CTS cheque and another 17 C.C.No. 3671/2019 with CTS Cheque. Again, the defence raised by accused goes contrary to his case. Perhaps, the complainant has specifically deposed that, towards the discharge of the receipt amount, the accused happens to have issued the Ex.P.1 cheque dt: 29.10.2018 which is being dishonored for the reason as Non CTS cheque and on bringing the said fact to the accused, he happens to have issued the Ex.P.3 the cheque dt; 15.12.2018 which is being dishonored for the reason Account closed. To any stretch of the evidence placed by the accused, it cannot be construed that, the accused has issued both the cheques towards the security for the receipt of an amount of Rs.50,000/- to Rs.1,00,000/-. Therefore, by gathering the evidence available on record, it suffices that, the defence raised by the accused is not acceptable. When, the accused has utterly failed to establish the fact of he handing over the disputed cheques towards the principle and interest security purpose for the payment of Rs.50,000/-to Rs.1,00,000/-, an inference could be drawn that, unless there was a liability of Rs.9,20,000/- the accused could have not 18 C.C.No. 3671/2019 issued the disputed cheques. By issuing the disputed cheques, the accused has admitted the liability of the amount referred therein. If this fact is taken into consideration, again an inference could be drawn that, unless the accused has acknowledged Rs.9,20,000/-, he would have not issued the cheques. If that is the case, a presumption could be drawn that, the complainant was able enough to lend Rs.9,20,000/- to the accused.
18. Now coming to the statutory notice is concerned, the complainant has got produced Ex.P.5 the office copy of legal notice dt:07.01.2019 and Ex.P.7 the postal track consignment for having delivered the notice. Though, the accused denies the receipt of notice, but nowhere he denies the address referred in the cause title. Moreso, when, the very cause title indicates that, the address referred therein is the address referred in legal notice at Ex.P.5 and he being represented through the counsel on the service of court process to the said address, I am of the considered view that, the accused is 19 C.C.No. 3671/2019 residing in the address referred in the cause title and the complainant has complied the mandatory provision of issuing the notice. In other words, it suffices that, the notice issued at Ex.P.5 is being served on accused as per Ex.P.7. As said above no probable evidence are placed on record as to why he has not opted to reply the notice at the initial stage. In the decision reported in 2019 SCC OnLine Kar.2117- V.R.Shresti Vs., Bhaskar.P., wherein the Hon'ble High court has opined that, if really the accused had no transaction with the complainant, he would have given reply to the notice and not replying the same would go to establish that, the defence made is false and the court should draw the presumption against the accused for not replying the legal notice. The decision aptly applies to the case in hand. Not replying the notice at the initial stage would hold no water so far the defence case is concerned and in this background, the case of the complainant has to be accepted by drawing presumption and the decisions relied by both side on the point of presumption aptly applies to the case in hand. 20
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19. In this back ground, it could be said that, though, the accused has taken a probable defence to disprove the complainant case, but that is not being established by placing the positive evidence. The very oral evidence available on record, totally contradictory to the documentary evidence. It is need less to say that, documentary evidence do prevail on the oral evidence. Absolutely, there is no evidence available on record, to hold that, the disputed cheques were handed over to the complainant towards the security purpose for availing Rs.1 Lakh ie. one cheque towards principle and another one towards interest. So, in this back ground, when the provisions U/s.118 and 139 of N.I. Act is looked into, it raises the presumption in favour of the holder of the cheque that, he has received the same for discharge in whole or in part of any debt or other liability. It also permits the complainant to fill the cheques having established the Ex.P.1 & P.3 being issued towards the discharge of loan liability.
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20. In the decision reported in (2021) 5 SCC 283 - Kalamani Tex and Another., Vs. P.Balasubramanian, (2010) 11 SCC 441- Rangappa Vs. Sri. Mohan., wherein it is held that, when once the signature of an accused on the cheque is established, than the reverse onus clauses become operative, aptly applies to the case in hand. In the case in hand, the accused has admitted the disputed cheques pertains to him and also signature appearing therein belongs to him. When the complainant has established the accused having issued the cheque at Ex.P.1 & 3 towards the discharge of loan liability and their existed a legally enforceable debt, the onus to disprove it, shifts on the accused which is not been proved by placing positive evidence. In this background, having the accused not disputed the complainant case by placing positive evidence, I am of the considered view that, the cheques issued by the accused at Ex.P 1 & 3 is for the legally enforceable debt and this fact is being established by the complainant by placing cogent and positive evidence which is not rebutted by the other side.
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21. As said above, the accused has not disputed the cheques does pertains to him. It could be said that, the accused has not disputed the cheques in question and signatures found therein. When the drawer has admitted the issuance of cheques as well as the signature present therein, the presumption envisaged U/s.118 R/w.139 of N.I.Act would operate infavour of the complainant. The said provisions lies on a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder the court shall presume that, the instrument was endorsed for consideration. So also, in the absence of contrary evidence on behalf of the accused, the presumption U/s.118 of N.I.Act goes in favour of the complainant. No doubt, as said statutory presumptions are rebuttable in nature, but when the complainant has relied upon the statutory presumptions enshrined U/s.118 R/w.Sec.139 of N.I.Act, it is for the accused to rebut the presumption with cogent and convincing evidence. To put it in other way, the burden lies upon the accused to prove the cheques in question at Ex.P. 1 & 3 were 23 C.C.No. 3671/2019 not issued for the discharge of debt or liability. The principles laid down in the decisions relied by the accused cannot be denied, but with due respect, it does not come to his rescue, rather it supports the complainant case.
22. It is worth to note that, Sec.106 of Indian Evidence Act postulates that, the burden is on the accused to establish the fact which is especially within its knowledge. This provision is exception to the general rule that, the burden of proof is always on the prosecution to establish its case beyond all reasonable doubt. In that view of matter, the burden is on the accused to prove that, the cheques in question were not issued for discharge of any liability. But, despite the accused has taken the defence that, the Ex.P.1 & P3 were not issued towards the legal liability, but the said fact and the version is not been established.
23. From the discussion made supra, it could be said that, the complainant has established him case by placing positive evidence. On the other hand, the accused failed to to 24 C.C.No. 3671/2019 establish his defence by placing probable defence and also, failed to elicit the said fact from the mouth of the PW.1. To put it in other way, the accused though taken a probable defence, but it is not been established by placing the positive evidence. The presumption of law lies in favour of the complainant as envisaged U/s.118 R/w. Sec. 139 of N.I.Act. In this back ground, the case of the complainant requires to be accepted. The evidence placed on record establishes that, the complainant has proved that, for discharge of the liability, the accused has issued Ex.P.1 & P.3 and he has issued the Ex.P.3 inspite of he having the knowledge of the account closed. Therefore, Point No.1 is answered in the "Affirmative'.
24. Point No.2:- For the reasons discussed in the point No.1, the complainant has proved the guilt of the accused punishable U/s.138 of N.I.Act. The Hon'ble Apex Court also dealt in the decision reported in (2018) 1 SCC 560, M/s. Meters and Instrument Pvt. Ltd., Vs. Kanchana Mehta., wherein, It is held that "the object of provision being 25 C.C.No. 3671/2019 primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged, but is not debarred at the later stage subject to appropriate compensation has may be found acceptable to the parties or the court". By considering the decision, it could be said that, the time when the transaction has taken place and the primary object of the provision being kept in mind, I am of the considered view that rather imposing punitive sentence, if sentence of fine is imposed with a direction to compensate the complainant for its monetary loss by awarding compensation U/s.357 of Cr.P.C., it would meet the ends of justice. By considering these aspects, I am of the considered view that, it would be just and proper to impose fine of Rs.9,25,000/-. Out of the compensation of Rs.9,25,000 -, an amount of Rs.9,20,000/- shall be awarded to the complainant U/s.357 of Cr.P.C. Accordingly I proceed to pass the following : 26
C.C.No. 3671/2019 ORDER Acting under section 255(2) of Code of Criminal Procedure, the accused is convicted for the offence punishable under section 138 of the Negotiable Instruments Act, the accused is sentenced to pay fine of Rs.9,25,000/- (Rupees Nine Lakhs and Twenty Five Thousand only).
In default thereof, the accused shall undergo simple imprisonment for the term of one year.
Acting U/s.357(1)(b) of Cr.P.C., it is ordered that, Rs.9,20,000/- (Rupees Nine Lakhs and Twenty Thousand only). there from shall be paid to the complainant as compensation. The remaining fine amount of Rs.5,000/-(Rupees Five Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
The office is to furnish the free copy of this Judgment to the accused forthwith. (Directly dictated to stenographer on computer, typed by her, revised by me and then pronounced by me in the open court on this the 15th day of March 2024). Digitally signed by
JAI JAI SHANKAR J
SHANKAR J Date: 2024.03.15
17:52:24 +0530
(JAI SHANKAR.J)
XXII Addl. Chief Metropolitan
Magistrate, Bengaluru.
ANNEXURE
List of witnesses examined on behalf of complainant:-
PW.1 : Sri. B.S. Shivalingaiah
27
C.C.No. 3671/2019
List of exhibits marked on behalf of complainant:-
Ex.P1 & P3 : Original cheques Ex.P1(a) & P3(a) : Signatures of the accused Ex.P2 & 4 : Bank Memos Ex.P5 : Legal notice Ex.P6 : Postal receipt Ex.P7 : Postal Track consignment List of witnesses examined on behalf of the accused :-
- Nil-
List of exhibits marked on behalf of the accused:-
-Nil- Digitally signed
JAI by JAI
SHANKAR J
SHANKAR Date:
J 2024.03.15
17:52:30 +0530
(JAI SHANKAR.J)
XXII Addl. Chief Metropolitan
Magistrate, Bengaluru.
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