Bangalore District Court
Sri.Shivaram G vs Sri.Junendra Kumar R on 11 January, 2023
KABC020172262020
IN THE COURT OF THE JUDGE COURT OF SMALL
CAUSES AND A.C.M.M, AT BENGALURU
DATED THIS THE 11th DAY OF JANUARY-2023
PRESENT:
SRI.SOMASHEKARA.A,B.A.,L, L.L.M.
SMALL CAUSES JUDGE & MACT
CC No.3565/2020
Complainant: Sri.Shivaram G
S/o Late Gangappa,
Aged about 49 years,
R/at No. 12, 6th Main,
8th 'D" Cross, Jnanajyothi Nagara,
Ullala Main Road,
Bangalore- 560056.
(By Sri. N.M.Parameswara- Adv.)
-Vs-
Accused: Sri.Junendra Kumar R,
S/o Krishnappa,
R/at NO. 285, Ganganadi Road,
Bhrundavana Nagara,
Bangalore- 560019.
(By Sri. Srinivasa Gowda -Adv)
Judge Sign
2 CC. No.3565/2020
Judgment
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;
The accused is known to the complainant. In the said background, during 2ND week of June-2019 the accused had approached the complainant and sought for financial assistance of Rs.3,50,000/- as hand loan for his immediate family and legal necessity and agreed to repay the same within six months. The complainant had obliged the accused request and paid an amount of Rs.3,40,000/- and on that day the accused had issued Judge Sign 3 CC. No.3565/2020 Judgment cheque bearing No.223218 dated 24.12.2019 for a sum of Rs.3,40,000/- drawn on HDFC Bank ltd., Airport Road, Bangalore, the complainant had presented the above said cheque for collection through Vijaya Bank, Hanumanthangara Branch, Bangalore, but the said cheque was returned unpaid with an endorsement "ACCOUNT CLOSED", dated 31.12.2019. Thereafter, complainant got issued legal notice on 29.01.2020 to accused. The notice was duly served to the accused on 31.10.2020. Accused neither complied nor replied the notice. It is contended that, accused intentionally closed the account and not maintained sufficient amount in his bank account to honour the cheque issued in favour of the complainant towards discharge of legally enforceable debt. On these allegations, present complaint is filed.
Judge Sign 4 CC. No.3565/2020 Judgment
03. After presentation of the complaint, this court perused the documents and taken cognizance for the offence under section 138 of Negotiable Instrument Act, sworn statement of complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, accused enlarged on bail and plea was recorded as per section 251of Cr.P.C. Accused has not stated the defence.
04. Learned Counsel for complainant prays to treat sworn statement as examination-in-chief and to consider the documents marked as Ex.P.1 to 5. The statement under section 313 of code of criminal procedure is recorded, read over and explained to the accused. Accused denied the incriminating circumstances and stated the defense that, in the year 2010 the complainant was running a chit business, one sheriff was Judge Sign 5 CC. No.3565/2020 Judgment the subscriber for the said chit and on his behalf the accused has issued blank cheque for security purpose, hence he is not liable to pay any amount to the complainant. Further, accused examined himself as DW.1 and got marked two documents as Ex.D.1. on his behalf he examined his Bank Manager as DW.2 and who marked Ex.D2.
06. Heard the Learned Counsel for the accused. Perused the and materials on record and cited decisions.
07. Accused relied on the following judgments
1. AIR 2009 SC 1983,
2. AIR 2018 1 Crimes(HC) 167,
3. ILR 2020(3) KCCR 2373
8. The points that arise for my consideration are as follows;
Judge Sign 6 CC. No.3565/2020 Judgment POINTS
1. Whether the complainant proves that, accused issued cheque for cheque bearing No.223218 dated 24.12.2019 for Rs.3,40,000/-, 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?
09. 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
10. POINT No.1: Complainant has filed this complaint alleging that accused has committed offence under section 138 of N.I.Act of N.I. Act. He pleads and asserts that, towards discharge of his liability, accused has issued a cheque for Rs.3,40,000/-. The said cheque Judge Sign 7 CC. No.3565/2020 Judgment came to be dishonoured on presentation. Complainant has issued notice within time stipulated calling upon the accused to pay the amount covered under cheque. In spite of service of notice, accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint. He further relied on the documents from Ex.P.1 to 5. This witness was subjected to cross examination.
11. In this scenario, let us scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138of N.I. Act. Ex.P.1 is cheque dated 05.07.2018, the said cheque returned with an endorsement "Funds Insufficient". Ex.P.1(a) is the signature of the accused, Ex.P.2 is bank endorsement dated 06.07.2018, Ex.P.3 is legal notice dated 13.07.2018, said notice was duly served to the accused, Ex.P.4 & 5 are the postal receipt, Judge Sign 8 CC. No.3565/2020 Judgment Ex.P.6 is the postal acknowledgement and Ex.P.7 is the reply notice and Ex.P.7(a) is the postal cover. This complaint came to be filed on 18.08.2018. 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 statutory presumptions enshrined under section 118 read with section 139 of N.I. Act.
12. 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 defense of the accused that, he was doing cable network business and also running garment factory out of which he was earning Rs.18,00,000/- per month and Judge Sign 9 CC. No.3565/2020 Judgment also getting Rs.38,000/- rent per month. He specifically stated that the complainant was doing chit transaction business, one of his friend by name Sharif was a chit subscriber of the complainant, towards security of the said chit transaction the accused had issued Ex.P1 cheque to the complainant on behalf of his friend Sharif after 10 years of the said chit transaction, the complainant got misused the said cheque and filed complaint. In support of his case he got examine the Bank Manager of HDFC Bank as DW2.
13. The DW2 in his oral evidence has stated that the account bearing No. 22751000115296 was in the name of accused, as per the bank record the said account was closed on 04.01.2010. In the cross examination the DW2 has categorically admitted that the accused was not requested the bank to close his account, due to not maintaining the average balance in the said account for Judge Sign 10 CC. No.3565/2020 Judgment continuing period of 3 months the said account went on temporary over draft. The sum and substance of evidence adduced by the DW2 makes it clear that the accused has not maintain average balance in his account and as such the said account was considered as over draft account.
14. In rebuttal evidence the accused has specifically taken a contention that the complainant was doing chit transaction business, one of his friend by name Sharif was a chit subscriber of the complainant, towards security of the said chit transaction the accused had issued Ex.P1 cheque to the complainant on behalf of his friend Sharif. Admittedly, the notice at Ex.P3 issued by the complainant to the accused is duly served on the accused as per Ex.P5. If the Ex.P1 cheque was issued by him towards security of said chit transaction of his firend, certainly, he would have reply the same to the Judge Sign 11 CC. No.3565/2020 Judgment notice issued by the complainant. But he has not done so, the option available to her is not utilized by the accused. Therefore, it creates doubt in the mind of this Court about the very defense taken by the accused. At this juncture, I would like to rely upon the decision of Gorantala Venkateshwara V/s Kolaveeraghava Rao reported in 2006 C.LJ Page 1, the Hon'ble Court held that failure of accused in giving reply to the legal notice issued by the complainant is on the of the strong circumstances to draw adverse inference against the accused and to believe that the cheque issued towards part payment of legally enforceable debt.
15. The next contention raised by the learned counsel for the accused that Ex.P1 cheque is old cheque and non CTS cheque and now a days the banks are issuing CTS cheque and as such the complaint is not liable to recover any amount under non CTS/Ex.P1- Judge Sign 12 CC. No.3565/2020 Judgment cheque amount. It is worth to mention here that after presentation of the said cheque to the bank it got bounced for the reasons " Account Closed" the said reason is falls under the category of dishonour of cheque. Therefore, it will attract Sec.138 of N.I. Act. Since the said cheque is old one and as such the bank has not issued endorsement stating that " Non CTS cheque not allowed". Now a short question that would arise before this court. Whether the amount covered under Ex.P1 cheque can be termed as legally recoverable debt. The standard cheque which were issued in circulation were not declared to be in valued by the bank. In view of the notification issued by the RBI dated 18.03.2013 that standards cheques were to be accepted which means there is no bar in presenting non CTS cheques for encashment, therefore the ground urged by the accused does not hold water.
Judge Sign 13 CC. No.3565/2020 Judgment
16. The next contention taken by the accused is that the cheque in question was issued towards security for the chit transaction of his friend by name Sharif, but the said Sharif is not examine by the accused. If really, the accused had issued the said cheque on behalf of Sharif, certainly he would have examine him before the court and true facts would have elicit before the court, But no such effort was made by the accused.
17. It is the specific defense of the accused that, he was doing cable network business and also running garment factory out of which he was earning Rs.18,00,000/- per month and also getting Rs.38,000/- rent per month. To prove his defence, the accused examined himself as DW1 and relied on the documents i.e., Ex.D.1- income tax return acknowledgment and Ex.D.2 - Bank statement. I have carefully perused the said document. As per Ex.D1 income tax returns the Judge Sign 14 CC. No.3565/2020 Judgment profit and gains of a business it shown Rs. 6,13,509/- and income from other source it shown as Rs.44,790/- and self assessment of Rs.48,180/- in order to substantiate his income tax return he has produced his banks statement runs from 09.08.2004 to 04.01.2010 his outstanding account balance of 0.00. Admittedly, this bank statement is now way concerned with the income tax returns relied by him. As per the say of the complainant the accused has availed loan of Rs.3,40,000/- from him on 26.06.2019. If the accused had sufficient source of financial income he would have produced the bank statement for the year 2019-2020 to establish his income and turn over, but no such documents are placed on record. To believe that as on the date of alleged loan transaction the accused had got sufficient financial source. Therefore, the defence Judge Sign 15 CC. No.3565/2020 Judgment taken by the accused is appears to be doubtful and not valid one.
18. On careful reading of the entire oral and documentary evidence on record is that the issuance of the cheque by the accused and siganture of the accused are not disputed by the accused. The accused has also not disputed there were transaction between the parties. It was the case on the behalf of the accused the cheque has bee issued by way of security and same was misused by the complainant. However, nothing is on record that the cheque was misused by the complainant. By considering the all these fact and circumstance, once the accused has admitted the issuance of cheque which bears the signature of accused, there is presumption that their exist a legal enforceable debt or liability U/Sec.139 of NI Act.
Judge Sign 16 CC. No.3565/2020 Judgment
19. When once issuance of cheque is admitted this Court is required to draw a presumption as envisaged Under Section 118 and Under Section 139 of N.I.Act. At this juncture, it is worth to place reliance on the following decision reported in (1999) 7 SCC 510 K.Bhaskaran V/s Shankaran Vaidhyan Balan and another decision reported in (2010) 11 SCC 441 Rangappa V/s. Mohan, (2020) 12 SCC 724 APS Forex Services Pvt. Ltd., - Versus - Shakti International Fashion linkers and ors." by reiterating the principles laid down in K.Bhaskaran V/s Shankaran Vaidhyan Balan's case and "Rangappa Vs. Mohan's" case. The Hon'ble Apex in APS Forex case has held that: "The fact that the accused has admitted the issuance of cheque and his signature on the cheque and that the cheque in question pertaining to the account, there is a presumption u/Sec. 139 of NI Act, that there exists a Judge Sign 17 CC. No.3565/2020 Judgment legally enforceable debt or liability." Even our Hon'ble High Court relying on the Hon'ble Apex Court decision recently in Criminal Appeal No.140/2011, dtd. 20 th November-2020 - Muralidhar Rao Vs. P. Nageshwar Rao" has held that "a person who signs a cheque and make it over to the payee remains liable unless he adduces the evidence and rebut the presumption that the cheque had been issued for payment of debt or in discharge of a liability and the onus shifts on the accused to establish a probable defence." Further recently the Hon'ble Apex Court in Triyambaka S Hedge v/s S.Sripad Cr.L.Appeal No.849-850/2011, dated 23.09.2021 reported in L.L (Live Law) 2021 SC 492 by reiterating the same principles as held - that applying the proposition of law that when once signature is admitted to be that of accused, the presumption envisaged in Sec.118 of the Act can Judge Sign 18 CC. No.3565/2020 Judgment legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Sec.139 of the Act enjoins on the court to presume that the holder of the cheque received it for discharge of any debt or liability. The question to be looked into is as to - whether any probable defense was raised by accused. As discussed above, the complainant has been successfully established his case beyond reasonable doubt that the accused had issued the cheque in question in discharge of legally enforceable debt of rent and other perks. Since there is no contrary evidence this court is required to draw presumption as envisaged U/Sec.118 of N.I. Act that the cheque was made or drawn for consideration on the date the cheque bears and further as per Sec. U/Sec.139 of N.I.Act this court is required to draw presumption that Judge Sign 19 CC. No.3565/2020 Judgment accused has issued the said cheque for due discharge of debt.
20. Therefore, considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of complainant, the complainant has successfully established beyond all reasonable doubt that he had had advanced loan to the accused and accused for due discharge of amount, she had issued cheque under Ex.P1. On the other hand, accused has failed to rebut the presumption available in favour of complainant with regard to the existence of legally recoverable debt under Ex.P1/ cheque. Thus, this Court is of the opinion that complainant has proved the ingredients of Sec.138 of N.I.Act and proved that accused has committed an offence punishable Under Section 138 of N.I.Act. Hence, Judge Sign 20 CC. No.3565/2020 Judgment for the above reasons, I answer Point No.1 in the Affirmative.
21. 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 along with cost of litigation. The amount covered under the disputed cheque is Rs.3,40,000/-. The date of cheque is, 24.12.2019. It is pertinent to note that, RBI monitory policy statement of the year 2018-2019 provides that, Judge Sign 21 CC. No.3565/2020 Judgment the prevailing bank rate of interest was 6.25%. By considering all these aspects, this court is of the opinion that, it is just and proper to imposed fine amount of Rs.4,00,000/-, which includes interest and cost of litigation, out of which compensation has to be awarded to the complainant. Accordingly, this court proceed to pass the following;
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 fine of Rs.4,00,000/- (Rupees Four Lakhs only).
In default there of accused shall undergo simple imprisonment for six months.
Judge Sign 22 CC. No.3565/2020 Judgment Acting under section 357(1) (b) of code of criminal procedure, it is ordered that, Rs.3,95,000/- (Rupees Three Lakhs ninety five Thousand), there from shall be paid to the complainant as a compensation, remaining fine amount of Rs.5,000/-(Rupees Five Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
The bail bond of the accused stands canceled.
Office to supply the copy of this Judgment to the accused immediately on free of cost.
(Dictated to the stenographer on computer, corrected and then pronounced by me in the open court on this the 11th day of January, 2023.) ( Somashekara A.) Judge & ACMM, Court of Small Causes Bengaluru.
Judge Sign 23 CC. No.3565/2020 Judgment ANNEXURE List of Witnesses examined on behalf of complainant:
PW1 Sri.Shivaram G List of Documents marked on behalf of complainant:
Ex.P1 Cheque Ex.P1(a) Signature of accused Ex.P2 Bank endorsement Ex.P3 Notice Ex.P4 Postal receipt Ex.P5 Postal acknowledgment
List of Witnesses examined on behalf of accused:
DW1 Sri.Junendra Kumar R DW2 Sri. Deepak Mahapathra
List of documents marked on behalf of accused:
Ex.D1 IT returns for the year 2019-20 Ex.D2 Certificate U/Sec. 65B of evidence Act Judge & ACMM, Court of Small Causes Bengaluru.
Judge Sign