Bangalore District Court
M/S. S.N.P. Builders And Developers vs K.M. Sohukaiah on 19 November, 2015
IN THE COURT OF THE XXVII ADDL. CHIEF
METROPOLITON MAGISTRATE, NRUPATHUNGA
ROAD, BENGALURU CITY.
Dated this the 19th day of November-2015
:: PRESENT ::
SRI. MALLANAGOUDA, B.Com., LL.B.,
XXVII Addl. C.M.M., Bengaluru City.
C.C. NO.5731/2014
COMPLAINANT:
M/s. S.N.P. Builders and Developers,
No.54/1, 4th Cross,
Link Road, Malleshwaram,
Bangalore - 560 003
Rep. by its Managing Partner
Sri. K. Rajashekar (dead by his Lr's)
Theerthak Rajashekar.
(Rept. by Sri. M. Sivappa Associates, Advs.)
V/S
ACCUSED:
K.M. Sohukaiah,
S/o Late. Madaiah,
No.43/44, F & F Colony,
Laggere Bridge (Ring Road),
Mahalakshmipura,
Bangalore - 560 058.
(Rept. by Sri. V. Ravi Prakash. Adv.)
Judgment 2 C.C.5731/2014
OFFENCE COMPLAINED OF : U/Sec. 138 of Negotiable
Instruments Act.
PLEAD OF THE ACCUSED : Not guilty.
FINAL ORDER : Accused is acquitted
DATE OF ORDER : 19-11-2015
(MALLANAGOUDA)
XXVII Addl.CMM.,
Bengaluru.
***
:: JUDGMENT ::
This is the case in which the complainant has filed the complaint against the accused under Section.200 Criminal Procedure Code 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 is doing business as estate agent and property developers, it is also under taking forming of layout as builder and developer, accused is one of the authorized Judgment 3 C.C.5731/2014 person of Bangalore District Economically Weaker and Backward People Association (Regd). In 2009 accused and others have approached the complainant seeking financial assistance for development of the association and also for forming layout in the land of the association. By seeing the project and believing the accused, complainant has lent Rs.50,00,000/- to accused as loan to the said project, at the time of advancing the loan accused has agreed to repay the same after completion of the project i.e., forming layout and he has executed documents and agreement. Further accused has issued cheque bearing No.633844, dated: 27-07-2012 drawn on State Bank of Mysore, Market Yard Branch, Yeshwanthapura, Bangalore, for repayment of loan borrowed by him, subsequently after persistent approach accused has informed the complainant to present the cheque to bank, accordingly complainant has presented the cheque to the bank for encashment, but the same is returned with an endorsement as 'Funds Insufficient' as per the endorsement dated: 30-07-2012. When complainant issued notice to Judgment 4 C.C.5731/2014 accused, accused has once again requested the complainant to present the cheque for another time, therefore on 18-10- 2012 complainant once again presented the said cheque to bank but at that time also cheque is dishonoured with endorsement 'Funds Insufficient', after that once again complainant has issued notice dated: 05-11-2012, and accused has issued evasive reply to the said notice, after issuance of notice also accused has not paid the cheque amount. Therefore, accused has committed an offence punishable under Section.138 of Negotiable Instruments Act.
3. After service of summons, accused has appeared before this court and pleaded not guilty for the offence under Section.138 Negotiable Instruments Act. Hence, the trial has been conducted against him for the said offence.
4. On the basis of the above facts, following points have arisen for my consideration:
Judgment 5 C.C.5731/2014
POINTS
1. Whether complainant proves beyond reasonable doubt that accused has borrowed Rs.50,00,000/- from complainant and to repay the said amount accused has issued cheque bearing No.633844, dated: 27-07-2012 drawn on State Bank of Mysore, Market Yard Branch, Yeshwanthapura, Bangalore, but on presentation the said cheque has been returned with an endorsement as "Funds Insufficient", after that complainant got issued notice dated: 05-11-2012 to accused, even after issuance of notice accused has not paid the cheque amount. Thereby the accused is liable for conviction for the offence punishable under Section.138 of Negotiable Instruments Act?
2. What order?
5. In support of its case, in the beginning complainant examined its Managing Partner K. Rajashekar as P.W.1, but when matter was posted for cross-examination P.W.1 has died, accordingly complainant examined another witness namely Theerthak Rajashekar as P.W.2 and got marked Judgment 6 C.C.5731/2014 documents at Exs.P1 to P8 on its behalf. On the other hand, the accused examined himself as D.W.1 and got marked documents at Ex.D1 and D2 on his behalf.
6. Heard arguments.
7. My findings on the above points are as under:
Point No.1: In the Negative
Point No.2: As per final order, for the following:
REASONS
8. POINT NO.1: It is the case of the complainant that complainant is a partnership firm engaged in business of estate agency and property developer, accused is the authorized person of Bangalore District Economically Weaker and Backward People Association (Regd). In 2009 accused and other persons have approached the complainant seeking financial assistance for development of their association and form layout agreeing to repay the same after formation of layout, accordingly complainant has paid Judgment 7 C.C.5731/2014 Rs.50,00,000/- to accused, at the time of receipt of the said loan accused has executed documents and agreement, and to repay the said amount accused has issued cheque bearing No.633844, dated: 27-07-2012 drawn on State Bank of Mysore, Market Yard Branch, Yeshwanthapura, Bangalore, but the said cheque is dishonoured for two times with endorsement 'Funds endorsement', after dishonour of cheque complainant got issued legal notice dated: 05-11- 2012, even after issuance of notice also accused has not paid the cheque amount to complainant. Hence, he has committed the offence punishable under Section.138 of Negotiable Instruments Act.
9. During evidence P.W.2 namely Theerthak Rajashekar has filed his affidavit as chief-examination in which he once again restated the facts alleged in the complaint as discussed above. In cross-examination he deposed that he is deposing on the basis of the documents only, he has no knowledge about for which layout accused has borrowed money, as to Judgment 8 C.C.5731/2014 whether his father has paid the said amount from his personal account or from account of complainant firm, as to whether he paid the said amount through cheque or in cash, he has no knowledge about amounts spent by his father for forming the layout. He denied suggestions regarding issuance of cheque by the accused for security for forming layout by the complainant.
10. The complainant has produced documents like cheque, bank endorsement, notice copy etc.
11. The accused has deposed that he is one of the Director of Bangalore District Economically Weaker and Backward People Society, Government has granted 39 acres 2 guntas of land of Chikkatoguru village to their society, they entered into an agreement with complainant firm for development of the said land, as per the said agreement complainant was expected to complete layout within 2 (two) years, at the time of said agreement as per the requests of the complainant Judgment 9 C.C.5731/2014 they issued their personal cheques for security, but subsequently they have not formed the layout as per agreement, they issued notice to complainant for which they have not replied, he has not borrowed Rs.50,00,000/- from complainant. In cross-examination though he admitted about suggestions stating that the cheque belongs to his account, he denied suggestions about borrowing loan from complainant and issuance of cheque for payment of the amount due infavour of complainant.
12. During arguments learned counsel for complainant has argued that as the complainant has produced evidence to show that accused has borrowed Rs.50,00,000/- from complainant and to repay the said amount he has issued cheque in question and as per Section.139 of Negotiable Instruments Act, when accused himself admitted that cheque in question belongs to him, it is necessary to presume that accused has issued cheque in question for payment of legally dischargeable debt and accused has failed to rebut the said Judgment 10 C.C.5731/2014 presumption, hence he is liable for conviction. In support of his said arguments he has relied upon the following judgments:
2014 (3) DCR 770 Smt. Shakuntala Devappa V/s.
B.R. Ravishankar Negotiable Instruments Act, 1881 - Section.138 and 118 - Presumption - Rebuttal thereof - Scope - Held - Where accused has failed to rebut the presumption, passed conviction is not liable to any interference - Petition as dismissed.
*** 2011 (2) DCR 337 Anil Sachar & Anr V/s.
M/s. Shree Nath Spinners P. Ltd & Ors. etc. Negotiable Instruments Act, 1881 - Section.138 and 139 - Presumption under - Assessment - Held - According to provision of Section.139 of N.I. Act there is a presumption with regard to consideration in favour of holder of cheque when a cheque has been issued by a drawer.
*** 2011 (2) DCR 469 Judgment 11 C.C.5731/2014 A. Palanisamy V/s.
R. Murugesen Negotiable Instruments Act, 1881 - Section.139 - Presumption - Entitled to invoke
- Held - Once the issuance of cheque has not been disputed, the holder of cheque is entitled to invoke the presumption under Sections.118 and 139 of N.I. Act which is rebuttable on account of accused.
*** 2011 (2) DCR 473 K. Raja V/s.
P. G. Rajendran (Died) Negotiable Instruments Act, 1881 -
Section.138 - Dismissal of appeal as 'steps not taken' - Legality - Held - Dismissal of appeal for default or non-prosecution without going into the merits of case is illegal and the appellate court must dispose of the appeal on merits after perusal and scrutiny of record.
*** 2011 (2) DCR 223 A. Victor V/s.
M. Jayaprakash Negotiable Instruments Act, 1881 -
Section.138 and 139 - Presumption -
Determination - Held - Once - Issuance of Judgment 12 C.C.5731/2014 cheque and signature in cheque are proved by complainant than he is entitled to invoke presumption under Section.138 of N.I. Act.
*** 2006 (3) KCCR 1948 M/s. S.T.P. Limited V/s.
M/s. Usha Paints and Decorators and Another Negotiable Instruments Act, 1881 -
Section.138 - The distinction between issuance of cheque for repayment of debt and issuance of cheque as a security for repayment of debt is illusory in law - Any cheque, whether issued towards repayment of debt or liability, or as a security, if dishonoured, the drawer of a cheque incurs liability of prosecution under Section.138 of the N.I. Act.
*** 2003 (1) DCR 540 H. Shivaraj V/s.
Sree Rayalseema Hi-Strength Hypo Limited Gondiparla Kurnool & Another.
Negotiable Instruments Act, 1881 -
Section.138 - Dishonour of cheque - Pleas - Issued blank cheque with signature only - Question has to be decided on the basis of evidence.
Negotiable Instruments Act, 181 -
Section.138 - Dishonour of cheque - Question - Judgment 13 C.C.5731/2014 Debt of liability - Cheque had been issued for discharging a debt of liability - Accused has to prove that there was no debt or liability - And that the averments in the reply or denied by the accused per se do not shift the burden of proof to the complainant.
Negotiable Instruments Act, 1881 -
Dishonour of Cheque - Question - Alternation in the cheques - question has to be decided on the basis of evidence to be adduced by parties at the time of trial.
*** 2003 (1) DCR 515 Surendar Sumer Singh V/s.
Amit Enterprises Negotiable Instruments Act, 1881 -
Section.138 and 141 - Cheque dishonoured - Offence committed by Company - It is no where provided in section.141 that in absence of the company the persons who was responsible to the company and for the conduct of the business of the company would not be liable.
Negotiable Instruments Act, 1881 -
Section.139 - Unless the contrary is proved - Burden to show that cheque was not issued for a debt or liability lies only on accused.
*** AIR 2002 Supreme Court 3014 I.C.D.S. Ltd., Judgment 14 C.C.5731/2014 V/s.
Beemna Shabeer and another Negotiable Instruments Act (26 of 1881) - S.138 - Dishonour of cheque - Key expressions 'any cheque' and other liability in S.138 - Clarifies the legislative intent - Issue regarding co-extensive liability of guarantor and principal debtor - Is totally out of purview of S.138 - Cheque issued by guarantor - Cannot be said to have not been issued for purpose of discharging any debt or liability - Complaint under S.138 for its dishonour - Maintainable.
***
13. On the other hand counsel for accused has argued that though admittedly cheque in question belongs to accused and on presentation the said cheque is dishonoured for want of funds, as the complainant has failed to produce evidence regarding lending Rs.50,00,000/- to accused that itself is sufficient to rebut the presumption and accused is entitled for acquittal.
14. On perusal of evidence of both the parties and arguments of their counsel it appears that as rightly argued by the counsel for accused even if as per Section.139 of N.I. Judgment 15 C.C.5731/2014 Act, when accused admits that cheque in question is belongs to him, it is necessary to presume that accused has issued cheque for payment of legally dischargeable debt and burden lies on the accused to rebut the said presumption, accused is entitled to rebut the presumption from the evidence produced by complainant also. Further more, degree of proof required for rebuttal is preponderance of probabilities but not beyond reasonable doubt. Here in this case though complainant is a partnership firm and it is alleged that it has lent Rs.50,00,000/- to accused, complainant has not produced documents like account extract of the complainant firm. Further more amount in dispute is Rs.50,00,000/- which is not a small amount to say that the complainant has paid the said amount in cash, neither complainant has produced its bank account extract to show that as on the date of alleged loan transaction there was deposit of Rs.50,00,000/- in its account nor it has produced any documents to show that Rs.50,00,000/- has been transferred to the account belongs to accused. Further more even if in Judgment 16 C.C.5731/2014 complaint and evidence of P.W.2 it is stated that on the date of loan accused has executed some documents and agreement, complainant has not at all produced any such documents and agreement, therefore it appears that there is no primary evidence is available on record to show that complainant has lent Rs.50,00,000/- to accused at any time. Therefore contention of the accused that as there was agreement between complainant and association to which accused is one of the Director for formation of layout, accused has issued cheque in question for security purpose appears to be probable. Therefore as there is no evidence available on record to show that as on the date of cheque accused was liable to pay Rs.50,00,000/- to complainant, though admittedly the cheque in question belongs to accused, same is dishonoured for want of funds, accused is not liable for conviction for the offence punishable under Section.138 of Negotiable Instruments Act. Therefore, it is decided to acquit the accused for the said offence. Hence, I answered Point No.1 in the Negative. Judgment 17 C.C.5731/2014
15. POINT NO.2: In view of my findings on Point No.1, I proceed to pass the following:
ORDER Acting under Section.265 of Cr.P.C., accused is acquitted for the offence punishable under Section.138 of Negotiable Instruments Act.
Accused is set at liberty and his bail bond stands cancelled.
(Dictated to Stenographer, transcribed and computerized by him, corrected and then pronounced by me in the open court on this the 19th day of November-2015.) (MALLANA GOUDA) XXVII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of Witnesses examined on behalf of Complainant:
PW.1 as P.W.2 : Theerthak Rajashekar List of Exhibits marked on behalf of Complainant:
Ex.P1 : Cheque
Ex.P2 : Letter
Ex.P3 : Legal Notice
Ex.P4 : Postal receipt
Judgment 18 C.C.5731/2014
Ex.P5 : RPAD
Ex.P6 : C/c of Death Certificate
Ex.P7 : C/c of Re-Constitution Deed
Ex.P8 : Minutes of metting
List of Witnesses examined on behalf of the defence:
D.W.1 : Ashok Seetharam Mannur List of Exhibits marked on behalf of defence:
Ex.D1 : Copy of Agreement
Ex.D2 : Copy of reply notice
(MALLANA GOUDA)
XXVII Addl. Chief Metropolitan,
Magistrate, Bengaluru.