Bangalore District Court
M/S Reliance Capital Ltd vs Mr. Nagesh. B on 22 October, 2021
IN THE COURT OF THE XV ADDL.JUDGE, &
23rd ACMM, COURT OF SMALL CAUSES,
MAYO HALL UNIT, BENGALURU
Dated this the 22nd day of October 2021
Present: Smt.RajeshwariJPuranik,
B.A., LL.B., (Spl.,)
XV Addl. Small Causes Judge &
XXIII A.C.M.M., Member, M.A.C.T.,
Bengaluru.
CC.No.15071/2019
COMPLAINANT: M/s Reliance Capital ltd.,
Registered Office at:
# 37, 3rd floor,
Bharmananda Court,
Lalbagh road,
Bangalore-56 0027.
Represented by its duly
constituted
Attorney/authorized
representative
Mr. S. Mailnathan.
(By Pleader Smt.Poornima.S.)
V/s
ACCUSED: Mr. Nagesh. B.
Old No.28 New No.103,
Chandrappa Circle,
2 SCCH19
CC No.15071/2019
Ajjanahalli, Serve No.58,
Chunchunkuppe Post,
Tavrekere Hobli,
Near Govt. Hospital,
Bangalore 562 130.
(By Pleader Sri.Narasimhamurthy)
Date of offence 22122016
Date of report of offence 16032017
Date of arrest of the accused
Date of recording of evidence 06012021
Date of closing of evidence 15042021
Offence complained of U/sec. 138 of
N.I Act
Judgment Conviction
*****
JUDGMENT
The complainant filed this complaint against the accused under Section 200 of Cr.P.C for the offence punishable under Section 138 of N.I. Act.
2. The brief contents of the complaint stated as under:
3 SCCH19 CC No.15071/2019 The Complainant company is a limited company, incorporated as per companies Act and in the course of its financial services, the complainant company introduced various scheme for disbursing Personal loan / business loan etc. It is further stated that, the accused approached the Complainant for vehicle loan by submitting necessary documents and after utilizing the said loan, the accused failed to make the payment towards discharge of his part liability. It is further stated that, towards discharge of his part liability the accused issued one Cheque bearing No.208785 dated: 2012 2016 for a sum of Rs.31,407/ drawn on Canara Bank., in favour of the Complainant. It is further stated that, as per the instructions of the accused, the said cheque was presented through their banker HDFC Bank Ltd., Richmond Road, Bangalore, but the said cheque was dishonoured for the reasons "Insufficient Funds." Hence, the Complainant got issued legal notice to the accused on 19012017 by RPAD and the said 4 SCCH19 CC No.15071/2019 notice was served on 10.02.2017. Despite receipt of notice, the accused is failed to made any payment and not replied to the said notice. Thus the accused has committed an offence punishable U/sec.138 of N.I. Act. Therefore, the Complainant prayed for punishing the accused U/sec.138 of NI Act and also for grant of compensation to the complainant.
3. After presenting this complaint, sworn statement was recorded and cognizance was taken for offence punishable under section 138 of N.I Act. This Court registered the case against the accused by issuing process against the accused.
4. After service of summons, the accused appeared through his counsel and got released on bail. As the case is of summons trial, accusation read over and explained to the accused in his language for which, the accused 5 SCCH19 CC No.15071/2019 pleaded not guilty and claimed to be tried. Hence the matter was posted for trial.
5. In order to prove the case, the complainant was examined as PW.1 and produced in all 07 documents marked as Ex.P.1 to P.7. After completion of oral evidence of the complainant, the statement under Section 313 of Cr.P.C was recorded, in which accused denied all the incriminating evidence appearing against him and examined himself as DW.1 and also examined one witness as DW.2. The accused had not produced any documents on his behalf.
6. After completion of the oral evidence, I have heard the arguments and perused the materials available on record. Therefore the following points arise for my consideration:
1. Whether the complainant proves that the accused issued a cheque bearing No.208785 for a sum of Rs.31,407/ dated:20.12.2016 drawn on Canara Bank, in favour of the 6 SCCH19 CC No.15071/2019 Complainant towards payment of loan and when the said cheque was presented for realization which was dishonored for the reasons for "Insufficient funds" and even after issued the notice, the accused was failed to repay the said amount and thereby the accused has committed an offence punishable under Section 138 of N.I. Act?
2. Whether the complainant is entitled to claim the compensation amount under section 357 of Cr.P.C. from the accused?
3. What order?
7 My findings to the above raised points are as under:
Point No.1: In the Affirmative, Point No.2: In the Affirmative, Point No.3: As per final order for the following REASONS
8. POINT No.1 and 2: It is specific case of the complainant that, the accused borrowed the loan from the Complainant Company and towards 7 SCCH19 CC No.15071/2019 repayment of the dues amount, the accused issued one cheque bearing No. 208785 for a sum of Rs.31,407/ dated:20.12.2016 drawn on Canara Bank, in favour of the Complainant, but after presentation, the said cheque was dishonored for the reasons "Insufficient funds". Inspite of issuance of legal notice, the accused failed to pay the cheque amount.
9. Authorized representative of the Complainant company Mr.Javeed Hussain, examined as PW1 and filed affidavit inlieu of chief examination. In his affidavit he reiterated the entire averments of the complaint and got marked Ex.P.1 to Ex.P7 documents. Ex.P1 is the Notarized copy of one Power of Attorney, Ex.P2 is the Cheque, Ex.P3 is the Bank endorsement, Ex.P4 is the office copy of notice, Ex.P5 is the Postal Acknowledgement, Ex.P6 is the notarized copy of Power of Attorney and Ex.P7 is the notarized copy of Resolution.
8 SCCH19 CC No.15071/2019
10. Accused Sri.Nagesh .B. examined himself as Dw.1 and deposed that, himself and his brother one Shashikumar approached the complainant company to avail vehicle loan and the complainant company agreed to sanction the vehicle loan to him. before sanctioning of the vehicle loan the complainant company had taken Xerox copy of Aadhaar card, Bank pass book statement, Photos and five blank cheques duly signed by him as a security for the repayment of the vehicle loan and at that time, his brother one Shashikumar was present and he witnessed the said transaction. Further deposed that, the complainant company had not sanctioned the vehicle loan to him and the sanctioned vehicle loan was not disbursed to his account. Further deposed that, he purchased the vehicle Goods Auto bearing Reg.No.KA41/A8863 with cash and it was registered on 11112013. Hence, he had not received the legal notice dt:19012017 issued by the complainant company. Therefore, he is not at all liable to pay any amount to the 9 SCCH19 CC No.15071/2019 complainant as alleged in the complaint. Hence, prays to discharge and acquit him in the above case.
11. Another witness Sri.Shashikumar.B. examined as DW.2 and deposed that, himself and his brother i.e., accused in this case, approached the complainant company to avail vehicle loan. In the year January 2013 the complainant company agreed to sanction the vehicle loan to him. before sanctioning of the vehicle loan the complainant company had taken Xerox copy of Aadhaar card, Bank pass book statement, Photos and five blank cheques duly signed by the accused as a security for the repayment of the vehicle loan and at that time, he was present and he has witnessed the said transaction. Further deposed that, the complainant company had not sanctioned the vehicle loan to the accused and the sanctioned vehicle loan was not disbursed to the account of the accused. Further deposed that, the accused purchased the vehicle 10 SCCH19 CC No.15071/2019 Goods Auto bearing Reg.No.KA41/A8863 with cash and it was registered on 11112013.
12. In the Cross examination the DW.1 categorically admitted his signature on Ex.P2 Cheque. The words spelt out by the Dw.1 are reduced as under:
" ಪರರರದ ರಲಯನನನ ಕಕಪನಯಕದಗಗ ಏನನ ಸಕಬಕದ ಇರನತತದಗ ಎಕದರಗ ಸರಲವನನನ ಕಗಕಡನತಗತತನಗ ಎಕದನ ಹಗತಳದದರಕದ ಗಗಕತತರನತತದಗ. ನರನಗತ ಸರಲವನನನ ಕಗತಳ ಪರರರದ ಕಕಪನಗಗ ಹಗಕತಗದಗದನನ. ಈಗ ನನಗಗ ತಗಕತರಸನತತರನವಕತಹ ನಪಪ2 ರಕತರನವ ಚಗಕಕನ ಮತಲಗ ಇರನವಕತಹ ಸಹಯನ ನನನದನ ಆಗರನತತದಗ. ಸರಕಕಯನ ಗನರನತಸದಕತಹ ಸಹಯನನನ ನಪಪ2(ಎ) ಎಕದನ ಗನರನತಸಲರಯತನ. ಖರಲ ಚಗಕನಕಗಳನ ಸನಮಮನಗತ ಕಗಕಟಟರನತತತರರ ಎಕದರಗ ಸಹ ಮರಡ ಕಗಕಟಟರನತಗತತನಗ. "
So, the accused approached the complainant company for obtaining the loan, accordingly issued cheque as per Ex.P2 and signature is admitted by the accused in unequivocal terms.
13. DW.2 also admitted that he went to the company of the complainant along with his 11 SCCH19 CC No.15071/2019 brother accused to obtain the loan to purchase a Cab. So under these circumstances it is noticed from the testimony of Dw.1 and 2 that the accused approached the complainant company for borrowing the loan to purchase the vehicle and also issued one cheque. Though the accused took specific defence that he had purchased the vehicle by paying his own cash, but to that extent, he had not produced any document. Further as per admissions of Dw.1 he has approached the complainant company for obtaining the loan, hence, mere denial of accused without any cogent evidence his contentions cannot be accepted that, the loan is not disbursed to his account. When issuance of cheque and signature is admitted by the accused.
14. learned counsel for the accused argued that the signature at acknowledgment Ex.P5 is not the signature of accused and in the Cross examination the P.w.1 also admitted that, the signature appearing at Ex.P5 acknowledgment is 12 SCCH19 CC No.15071/2019 not the signature of accused. On the contrary the learned counsel for the complainant argued that the accused had admitted his signature at Ex.P2 Cheque and in order to avoid the liability he had put different signature at Ex.P5 acknowledgment.
15. At this juncture it is relevant to refer the observation of Hon'ble Apex court in the case of C.C. Alavi Haji V/s Palapetty Muhammed & Anr on 18 May, 2007.
7. The issue with regard to interpretation of the expression giving of notice used in Clause (b) of the proviso is no more res integra. In K. Bhaskaran Vs. Sankaran Vaidhyan Balan & Anr. the said expression came up for interpretation. Considering the question with particular reference to scheme of Section 138 of the Act, it was held that failure on the part of the drawer to pay the amount should be within fifteen days of the receipt of the said notice. Giving notice in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the 13 SCCH19 CC No.15071/2019 drawer at the correct address and for the drawer to comply with Clause (c) of the proviso. Emphasizing that the provisions contained in Section 138 of the Act required to be construed liberally, it was observed thus: If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure. In Maxwell's Interpretation of Statues the learned author has emphasized that "provisions relating to giving of notice often receive liberal interpretation," (vide page 99 of the 12th Edn.) The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature. The words in Claus 14 SCCH19 CC No.15071/2019
(b) of the proviso to Section 138 of the Act show that payee has the statutory obligation to make a demand ? by giving notice. The thrust in the clause is on the need to make a demand ? . It is only the mode for making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is dispatched his part is over and the next depends on what the sendee does.?
15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C. Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque. It is well settled that at the time 15 SCCH19 CC No.15071/2019 of taking cognizance of the complaint under Section 138 of the Act, the Court is required to be prima facie satisfied that a case under the said Section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends.
16. As noticed above, the entire purpose of requiring a notice is to give an opportunity to the drawer to pay the cheque amount within 15 days of service of notice and thereby free himself from the penal consequences of Section 138. In Vinod Shivappa (supra), this Court observed: One can also conceive of cases where a well intentioned drawer may have inadvertently missed to make 16 SCCH19 CC No.15071/2019 necessary arrangements for reasons beyond his control, even though he genuinely intended to honour the cheque drawn by him. The law treats such lapses induced by inadvertence or negligence to be pardonable, provided the drawer after notice makes amends and pays the amount within the prescribed period. It is for this reason that Clause (c) of proviso to Section 138 provides that the section shall not apply unless the drawer of the cheque fails to make the payment within 15 days of the receipt of the said notice. To repeat, the proviso is meant to protect honest drawers whose cheques may have been dishonoured for the fault of others, or who may have genuinely wanted to fulfil their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. The proviso is not meant to protect unscrupulous drawers who never intended to honour the cheques issued by them, it being a part of their modus operandi to cheat unsuspecting persons.?
17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not 17 SCCH19 CC No.15071/2019 receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice ? in the context of Clause (b) of the proviso was the same as the receipt of notice ? a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act.
18 SCCH19 CC No.15071/2019
18. In the instant case, the averment made in the complaint in this regard is:
Though the complainant issued lawyers notice intimating the dishonour of cheque and demanded payment on 4.8.2001, the same was returned on 10.8.2001 saying that the accused was out of station. ? True, there was no averment to the effect that the notice was sent at the correct address of the drawer of the cheque by registered post acknowledgement due. But the returned envelope was annexed to the complaint and it thus, formed a part of the complaint which showed that the notice was sent by registered post acknowledgement due to the correct address and was returned with an endorsement that the addressee was abroad. We are of the view that on facts in hand the requirements of Section 138 of the Act had been sufficiently complied with and the decision of the High Court does not call for interference.
Therefore, this court cannot make separate interpretation in respect of service of notice and it is held that, notice is issued by the complainant and Complainant complied all the mandatory requirements of section 138 and 142 of NI Act and the accused approached the complainant
19 SCCH19 CC No.15071/2019 company to obtain vehicle loan and issued cheque in favour of the complainant company and when it was presented for encashment same was returned as "Funds insufficient" so, the complainant company issued legal notice within stipulated period and the notice was served upon the accused.
16. In the chief examination the accused deposed that, complainant had not sanctioned the loan. But in the Cross examination of PW.1 the learned counsel for the accused suggested that, "when accused approached the complainant, they sanctioned the loan" The suggestion put by the defence side to the PW.1 is reduced as under:
"ಆರಗಕತಪಯನ ನಮಮ ಕಕಪನಗಗ ಬಕದನ ಸರಲ ಕಗತಳದ ಸಮಯದಲಲ ನಮಮ ಕಕಪನಯವರನ ವರಹನದ ಸರಲವನನನ ಮಕಜಕರನ ಮರಡರನತರತರಗ ಎಕದರಗ ಸರ."
Therefore as per this suggestion the loan is sanctioned by the complainant. Whereas, the 20 SCCH19 CC No.15071/2019 accused deposed that, no loan is sanctioned, but in the Cross examination the suggestion is put contrary to the chief examination of the accused.
17. It is pertain to note that when the accused admitted the cheque and also his signature, the initial burden of the Complainant to prove the issuance of cheque by the accused is discharged and automatically the onus shifts upon the accused to prove his defence and it is for the accused to rebut the legal presumption enumerated under Section 139 of N.I. Act. Further to rebut the legal presumption accused failed to adduce the cogent, convincing and acceptable evidence. In this regard the Hon'ble High Court of Karnataka was pleased to held in a decision reported in ILR 2006 Karnataka 4642.
" NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 138 - OFFENCES UNDERSECTIONS 139 - Presumption under ConvictionAppealed against Conviction Confirmed Revision Against Mere denial of issuing chequeswhether is sufficient to discharge the initial 21 SCCH19 CC No.15071/2019 burdenHELD, Mere denial of issuing cheques would not be sufficient as it is time and again noted that once the cheque is issued duly signed by the petitioner, the presumption goes against him as per section 139 of the Negotiable Instruments Act."
18. Further the Hon'ble Supreme Court was pleased to held in the judgment of K.N. Been V/s Muniyappan and another that;
"Negotiable Instruments Act (26 of 1881), Ss.138, 139, 118 cheque dis honourcomplaint Burden of proving that cheque had not been issued for any debt or liabilityis on the accused Denial/averments in reply by accused are not sufficient to shift burden of proof onto the complainantAccused has to prove in trial by leading cogent evidence that there was no debt or liabilitysetting aside of conviction on basis of some formal evidence led by accused not proper".
19. Herein though the accused himself examined as DW.1 and also examined one 22 SCCH19 CC No.15071/2019 witness as DW.2, but there are no sufficient materials to rebut the legal presumption that the cheque was not issued for repayment of the vehicle loan and the complainant has misused the same against the accused. In the Cross examination of the Complainant except bare suggestions nothing has been eliciting about misusing of the said alleged cheque.
20. Further learned counsel for the accused relied upon the judgment passed by Metropolitan Magistrate No.5, Dwarka Courts, Delhi in CC NO.3420/2012, I have gone through this judgment, the facts and circumstances are different and this judgment is not authoritative judgment to be considered and relied upon by this court. Hence, it cannot be considered.
21. If loan amount is not disbursed to the account of the accused, then why he did not give requisition to the bank for stoppage of payment. Atleast he could have given notice to the 23 SCCH19 CC No.15071/2019 complainant alleging that, though the loan is sanctioned, but it is not disbursed. Hence, it is clear that the accused was well known of issuance of cheque in favour of the complainant. Hence mere denial of sanctioning of vehicle loan, is not sufficient to rebut the presumption that the cheque was not issued for the purpose repayment of loan amount. The accused has not produced any piece of documentary evidence in order to substantiate the contentions. Further, nothing damaging the veracity of the evidence of the complainant as elicited through his cross examination. Hence, I answered Point No.1 in the Affirmative.
22. Point No.2: Under Sec.138 of N.I. Act, this court is also empowered to sentence the accused upto two years and also empowered to impose fine which may extend to twice of the Cheque amount or with both. The cheque is in case is dated: 20122016 for a sum fo Rs.31,407/ and said amount is not paid by the 24 SCCH19 CC No.15071/2019 accused, nearly 5 years lapsed. Therefore by considering the facts and circumstances and amount if the Complainant is awarded some compensation which would meet the ends of justice instead of awarding sentence of imprisonment as substantive sentence, at the same time, adequete default sentence shall have to be imposed for recovery of fine amount. Hence, I answered Point No.2 in the Affirmative.
23. Point No.3: For the foregoing reasons, I proceed to pass the following ORDER The Accused found guilty and convicted for the offence punishable under Section 138 of N.I. Act.
Accused is sentenced to pay fine of Rs.40,000/ (Rupees forty thousand only) In default to pay fine the accused shall undergo simple imprisonment for a period of 3 months.
25 SCCH19 CC No.15071/2019 Acting under Section 357(1)(b) of Cr.P.C. out of fine amount, a sum of Rs.37,000/ shall be paid as compensation to the complainant.
The Office is directed to supply the free copy of this judgment.
(Dictated partly to the Stenographer transcribed and computerized by him, then corrected by me and pronounced in open court on this the 22nd day of October 2021.) (RajeshwariJPuranik) XV Addl. Small Causes Judge & XXIII A.C.M.M., Bengaluru.
ANNEXURE:
LIST OF WITNESSES EXAMINED FOR COMPLAINANT:
P.W.1 : Mr. Javeed Hussain,
LIST OF DOCUMENTS EXHIBITED FOR
COMPLAINANT:
Ex.P.1 : Notarized copy of GPA
Ex.P.2 : one Cheque
Ex.P.3 : Copy of Bank Endorsement
26 SCCH19
CC No.15071/2019
Ex.P.4 : Office copy of legal notice
Ex.P.5 : Postal acknowledgement
Ex.P.6 : Notarized copy of GPA
Ex.P.7 : Notarized copy of Resolution
LIST OF WITNESSES EXAMINED FOR
ACCUSED:
DW.1 : Sri. Nagesh. B.
DW.2 : Sri.Shashikumar .B.
LIST OF DOCUMENTS EXHIBITED FOR
ACCUSED:
Nil
(RajeshwariJPuranik)
XV Addl. Small Causes Judge &
XXIII A.C.M.M., Bengaluru.