Bangalore District Court
Ahmed Ulla Sharief vs State Bank Of India Racpc Yelhanka on 18 March, 2024
1
Crl.A.No.1528/2022
KABC010336722022
IN THE COURT OF THE LX ADDITIONAL CITY CIVIL &
SESSIONS JUDGE, BENGALURU
(CCH-61)
DATED THIS THE 18th DAY OF MARCH, 2024
:PRESENT:
Sri. Narashimsa.M.V., B.Com., LL.B.,
LX Addl. City Civil & Sessions Judge,
Bengaluru.
CRIMINAL APPEAL NO. 1528/2022
APPELLANT :- Mr.Ahmed Ulla Sharief,
S/o Mr.Riyaz Ulla Sharief,
Aged about 29 years
R/at No.1108, 16th Cross,
1st Stage, HBR Layout,
3rd Block, Kalyan nagar,
Bengaluru 560 043
And also Office at
Raising Sun Interiors,
Raising Sun Group
# 102, 80 Feet Road,
HBR Layout,
Bengaluru 560 043
And also at
# 28, 3rd Cross, Anwar Layout,
VenugopalSwamy Temple Street,
Bengaluru 560 045
(Rep by Sri. S.A- Advocate)
V/s
RESPONDENT :- State Bank of India,
Retail Assets Central
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Crl.A.No.1528/2022
Processing Centre (RACPC),
No.5/1, Prestige Star Building,
1st Floor, Ring Road,
Near Mother Dairy,
Yelahanka New Town,
Bengaluru 560 065
Rep by its Authorized Officer /
Chief Manager
Ms Nagamani B,
(Rep by Sri G M R- Adv)
JUDGMENT
This appeal under Sec. 374(3) of Cr.P.C. is filed by accused in CC 1094/2021 on the file of XXVI ACMM, Bengaluru. Appellant/accused is aggrieved by Judgment dated 14.11.2022, convicting him for the offence punishable under Sec.138 of N.I.Act.
2. Briefly stated the case of Complainant is that :
(a) Accused has obtained vehicle (Car) loan of Rs.7,45,000/ under vehicle term loan account No.38156507851 from Complainant bank and the accused has taken said loan for the purpose of purchasing vehicle(car) grand I10 sportz 1.2, BS 4 and accused has executed loan cum hypothecation dated 31.12.2018 and executed arrangement letter dated 31.12.2018 other necessary term loan documents in favour of Complainant bank, accordingly Complainant bank had sanctioned loan and 3 Crl.A.No.1528/2022 disbursed said loan amount under said vehicle term loan account in favour of accused.
(b) It is further stated that accused purchased car, it was registered vide No.KA-50-Z-6335 and released in favour of accused. The accused has hypothecated said vehicle in the name of Complainant bank and agreed to repay the entire borrowed loan amount in 84 EMI of Rs.15,756/ each with minimum 9.8% interest p.a. and also agreed to pay additional 2% as penal interest. It is further stated that, after availing loan accused has failed to pay EMI towards sanctioned car loan amount and its become irregular therefore Complainant bank has declared his account as NPA, accused has outstanding balance amount of Rs.7,24,631/ as on 07.11.2019 + present interest and other expenses, whereas despite repeated reminders accused has not regularized loan account and in order to discharge his legal liability with regard to above said outstanding balance accused had issued a cheque bearing No.562736 dated 07.11.2019 for Rs.7,24,631 drawn on State Bank of India, Pillanna Garden, Nagawara Main Road, Bangalore.
(c) But when the said cheque was presented for encashment, the same was returned with an endorsement as 4 Crl.A.No.1528/2022 "Insufficient Funds" on 08.11.2019. Thereafter Complainant has issued legal notice on 14.11.2019 to three different addresses of accused, however notice sent to the 1st address has been returned on 15.11.2019 with a shara as 'addressee left', notice sent to 2nd address of the accused has been returned on the same day with a shara 'insufficient address' and notice issued to 3rd address of accused returned with a shara 'insufficient address' . Despite, receipt of notice accused failed to repay the cheque amount. Hence, private complaint was filed.
3. After filing of complaint, learned magistrate took cognizance of the offense and registered criminal case against accused and summons was issued to him. In response to summons, appellant / accused appeared before court through his counsel and he was enlarged on bail. Thereafter plea was recorded and accused pleaded not guilty.
4. The Complainant examined its Chief Manager by name Miss Nagamani B. as PW1 and she has produced 14 documents as per ExP1 to 14. Ex. P1 is Authorization letter. Ex.P2 is Original Cheque, Ex. P3 is the Bank Endorsement, Ex. P4 is the Copy of legal notice, Ex. P5 is the Postal receipts - 3 Nos. Ex. P6 to 8 are Returned RPAD Covers, Ex. P6(a) to 8(a) are Copy of notice 5 Crl.A.No.1528/2022 inside Ex.P6 to P8Ex. P9 is the Authorization letter. Ex.P10 is the Loan sanction letter. Ex. P11 is the Hypothecation agreement. Ex. P12 is the Arrangement letter. Ex. P13 is the Loan account statement and Ex. P14 is the Account Extract. On the other hand inspite of giving sufficient opportunities to accused he has not lead his defence evidence and no documents are got marked on his behalf.
5. After hearing both sides Vide Judgment dated 14.11.2022, appellant /accused has been convicted for the offence punishable u/S 138 of N I Act and has been sentenced to pay fine of Rs.9,25,000/-, in default, has been sentenced to undergo simple imprisonment for 3 months, out of the fine amount so realized Rs.9,23,000/ is awarded as compensation to appellant/complainant u/S 357(1) of Cr.P.C, Rs.2,000/- is ordered to be adjusted towards prosecution expenses. Being aggrieved by the Judgment and order of sentence Appellant/accused has filed this appeal.
6. Grounds urged in this appeal are :
(a) That the private complaint filed by respondent before Court below are all false, learned Magistrate had not given opportunity to appellant to prove his case, 6 Crl.A.No.1528/2022
(b) Plea was recorded, appellant pleaded not guilty and prays for evidence and claims for trail and then case posted for complainant evidence, appellant / accused has not stated the defence at the time of answering plea are all false, lower court has not given sufficient opportunity to appellant and also not appreciated his defence.
(c) Impugned judgment and order passed by learned Magistrate is totally perverse, illegal and bad in law and hence, same is liable to be set aside by this Court.
(d) Appellant/Accused is an illiterate, he has not taken any loan from complainant, he has not issued disputed cheque, said cheque was missing from the custody of accused,
(e) Learned Magistrate has committed a grave error in not exercising his judicial mind in appreciating the defence documents of accused.
(f) Learned Magistrate erred in placing much reliance upon chief examination of PW1, though evidence of DW1 have not taken, but learned Magistrate has not given sufficient opportunity to appellant to prove his case.7
Crl.A.No.1528/2022
(g) Learned Magistrate did not give opportunity for cross examination of PW1.
7. Along with this appeal appellant/accused filed IA under Sec. 148(1) of N.I. Act r/w Section 389(1) of Cr.P.C. seeking for stay of order of conviction. Vide orders dated 14.12.2022, conditional order of stay was granted subject to deposit of 20% of fine amount imposed by Magistrate.
8. On 15.2.2023, appellant filed application u/S 148 of N I Act seeking extension of time to comply the order of this court dated 14.12.2021, it was allowed, appellant was directed to comply order dated 14.12.2021 on or before 14.3.2023. On 14.3.2023, appellant filed application u/S 389(1) of Cr.P.C. to extend time for depositing 20% of fine amount, it was rejected,
9. Trial Court records have been received Respondent/complainant was served with notice of this appeal, it engaged counsel Sri. GMR, case was posted to 11.1.2024 for arguments of both parties, on 11.1.2024 respondent filed written arguments, case was adjourned to 24.1.2024 for appellant's arguments as last chance, Appellant and counsel remained absent, this appeal was posted for Judgment, appellant has not filed written arguments till date.
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Crl.A.No.1528/2022
10. Learned counsel for appellant filed memo with following citation:
(1) Crl.R.P No. 1323/2019 in the case of G.H.Abdul Kadri Vs. Mohammed Iqbal of Hon'ble High Court of Karnataka
11. Perused the trial court records, exhibits marked before Trial Court, impugned judgment, grounds urged in this appeal and written arguments filed by respondent.
12. The points that arise for my consideration are :-
(1) Whether the appellant / accused has rebutted the statutory presumption available u/S 20, 118 and 139 of N I Act is maintainable?
(2) Whether the appellant/accused has established that cheque was not issued towards a legally recoverable debt ?
(3) Whether the learned Magistrate has appreciated the evidence on record in the right in right perspective ? (4) What Order?
13. My findings to the above points are as follows:
Point No. 1 : In the Negative Point No. 2 : In the Negative Point No. 3 : In the Affirmative.
Point No. 4 : As per final Order for the following: 9
Crl.A.No.1528/2022 REASONS
14. Sec. 138 of the Negotiable Instruments Act has been enacted to lend credibility to financial transactions, more particularly to negotiable instruments.
15. The main ingredients of the offence punishable under Sec.138 of Negotiable Instruments Act are:-
(i) Drawing up of a cheque by Accused towards payment of an amount of money, for the discharge, in whole or in part, of any debt or any other liability;
(ii) Return of the cheque by the Bank as unpaid;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of the notice under the proviso (b) to Section 138.
The Explanation appended to the Section provides that, the "debt or other liability" for the purpose of this Section means a legally enforceable debt or other liability.
Apart from this, Sec. 139 of the Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms:-
"It shall be presumed, unless the contrary is proved, that:-
The holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, of any debt or other liability". 10
Crl.A.No.1528/2022 Also, Sec. 118 of the Negotiable Instruments Act states, "Until the contrary is proved, the following presumptions shall be made:-
(a) That every Negotiable Instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
16. Point. No. 1 : Ex.P10 dated 27.12.2018 is the letter addressed by complainant / State Bank of India, wherein appellant / accused has been intimated that the loan applied for purchase of Hyundai, Grand i10 Car, has been sanctioned. Hypothecation agreement at Ex.P11, arrangement letter (for financing cars) dated 31.12.2018, Ex.P14 is the loan account statement it discloses that as on 11.3.2022 a sum of Rs.7,08,652/- is due from appellant / accused. Specific case of complainant is that correspondence took place, appellant / accused was requested to regularize his account by paying outstanding balance or agree for a one time settlement. It is the specific case of complainant that cheque at Ex.P2 was dated 7.11.2019, it was issued for a sum of Rs.7,24,631/- by appellant / accused to complainant, Ex.P2 upon presentation was dishonoured as funds insufficient vide return memo at Ex.P3. 11
Crl.A.No.1528/2022
17. It is necessary to note that though legal notice at Ex.P4 was sent by RPAD to 3 addresses of appellant / accused, he has not sent any reply. Notice addressed to one of his addresses has been returned as door locked and other two addresses have been returned as left, return to sender, door locked, no such person. One of the defences raised by appellant / accused is with regard to non service of notice. In this context, it is necessary to refer to the decision of Hon'ble Supreme Court of India in the case of Dalmia Cement (Bharat) Ltd vs M/S. Galaxy Trades & Agencies Ltd., wherein Hon'ble Supreme Court has held as under:
In Black's Law Dictionary 'giving of notice' is distinguished from 'receiving of notice' (vide p.621): "A person notifies or gives notice to another by taking such steps as may be reasonably required to inform the other in the ordinary course, whether or not such other actually comes to know of it'. A person 'receives' a notice when it is duly delivered to him or at the place of his business. 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 the court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure".12
Crl.A.No.1528/2022
18. Applying the ratio laid down in the above case to the facts of this case, it is amply clear that dispatch of notice is the only burden cast upon respondent / complainant, which has been duly discharged. It is necessary to note that in this appeal as well, appellant / accused has reiterated the three addresses, which are mentioned in Ex.P4. Thus at any stretch of imagination it can be construed that appellant / accused was not served with legal notice. During cross examination of PW1, suggestions are put to the effect that appellant / accused never approached complainant bank to sanction loan and that with active collusion with Car dealer, false documents have been created and appellant / accused has been falsely implicated, which is denied by PW1. It is suggested to PW1 that after sanction of loan the Car was not at all delivered to appellant / accused, which is denied. It is suggested that appellant / accused immediately informed the Bank regarding non delivery of Car, which is denied. It is further suggested that without consent of appellant / accused, deduction have been made towards EMI from his bank account, which is denied.
19. It is further suggested that at the time of processing of loan, cheque at Ex.P2 was issued by appellant / accused and the said cheque has been misused for filing of private complaint, 13 Crl.A.No.1528/2022 which is denied by PW1. It is necessary to note here that suggestion put to PW1 are quite contrary to each other. Suggestion put to PW1 by appellant / accused are self contradictory, at one breath appellant / accused states that loan was never sanctioned, but, at another breath says that EMIs were being deducted from his bank account. If that be the case, nothing prevented appellant / accused to raise the issue of deduction of EMI at the earliest point of time. Absolute silence on the part of appellant / accused to question deduction of EMI from his bank account itself demonstrates that appellant / accused had taken a loan for purchase of Car and that he has not repaid the installments to complainant Bank.
20. Another suggestion is put to PW1 to the effect that the Car bearing No. KA-50-Z-6335 has been seized, which is denied by PW1. During the course of arguments, learned counsel for appellant / accused submitted that Bank has seized the Car, sold it in public auction, but, has not reflected the sale consideration amount in loan account statement or any other statement.
21. In this context, counsel for appellant / accused produced 'B' extract of Car bearing No. KA-50-A-6335, it discloses that the name of owner is Ahmed Ulla Sharief (Appellant 14 Crl.A.No.1528/2022 / accused) date of registration is 1.1.2019, owners serial number is 1 and there is a specific entry that the Car has been hypothecated to State Bank of India, Vidyaranyapura branch (respondent / complainant). Thus, 'B' extract produced by appellant / accused , infact strengthen the case of respondent / complainant that the Car has not been seized . Considering these aspects, I answer point No.1 and 2 in the negative.
22. Point No.3: Despite grant of opportunity, appellant / accused has not led defence evidence, nor got any document marked on his behalf. During cross examination of PW1, the following suggestion are made to the effect that soon after applying for Car loan, appellant/ accused approached respondent / complainant and requested to reject the application, no correspondence to that effect has been produced. One of the grounds urged in this appeal is that cheque at Ex.P3 was missing from the custody of accused and a complaint was lodged before jurisdiction police. If that be the case nothing prevented appellant / accused to confront the said complaint to PW1 during cross examination. It clearly appears that appellant / accused is attempting to improve his case, stage by stage, he is taking up alternative defence for the reasons best known to him. Considering these aspects, this Court is of the clear opinion that 15 Crl.A.No.1528/2022 all these aspects have been clearly dealt by the learned Magistrate, learned Magistrate has meticulously gone through the evidence, exhibits available on record and has written a well reasoned judgment, considering all these aspects, I answer point No.3 in the affirmative.
23. Point No.4: In view of my findings on point Nos.1 to 3, I proceed to pass the following:-
ORDER Appeal filed by Appellant under Sec. 374 (3) of Cr.P.C. is dismissed.
Judgment of Trial Court in CC No. 1094/2021 dated 14.11.2022 passed by the learned XXVI Addl. Chief Metropolitan Magistrate, Bengaluru, is confirmed.
Send back Trial Court records.
(Dictated to Stenographer-III, transcribed and typed by him, thereafter corrected and then pronounced by me in open court on this the 18th day of March, 2024).
(Narashimsa.M.V.) LX Addl.City Civil & Sessions Judge, Bengaluru.