Bangalore District Court
O.N.Chandra Prakash vs Sri.B.K.Chandrashekar on 17 March, 2017
IN THE COURT OF LVII ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL UNIT, BENGALURU
-: PRESENT :-
SATHISH J. BALI, B.Com., LL.M.
LVII ADDL. CHIEF METROPOLITAN MAGISTRATE,
BENGALURU.
DATED THIS THE 17TH DAY OF MARCH, 2017.
C.C.No.52814/2016
COMPLAINANT : O.N.Chandra Prakash,
Aged about 63 years,
S/o.Late Sri.O.C.Narasimha Murthy,
R/at:No.1164/D, I Main, 2nd Cross,
Geethanjali Layout,
New Thippasandra Post,
Bangalore-560 075.
.Vs.
ACCUSED : Sri.B.K.Chandrashekar,
Aged about 52 years,
S/o.Sri H.K.Bheema Rao,
R/at:No.1982, I Cross,
Yellamma Renuka Temple Street,
New Thippasandra,
Bangalore-560 075.
****
JUDGMENT
The complainant has filed this complaint under Sec.200 of Cr.P.C., for the offence punishable under Sec.138 of Negotiable Instruments Act, 1881 as against the accused.
2 C.C.No.52814/20162. The brief facts of the complainant's case are as under;
The complainant and accused are known to each other and they are very close friends. The accused in order to meet out some urgent financial crisis, approached the complainant on 4th April 2015 and requested for financial assistance of Rs.4,00,000/-.
3. The complainant considering the acquaintance with the accused, on 04.04.2015 lent Rs.4,00,000/- to the accused by way of cash and on the date of receipt of the said amount, the accused executed on demand promissory note in favour of the complainant on the assurance that, the accused will repay the said loan amount within six months and also agreed to pay interest at the rate of 2% p.m. He has paid the monthly interest of Rs.8,000/- regularly till October 2015.
4. The accused has not repaid the above said amount within 6 months as promised even on several requests. In order to repay the above said amount, the accused has issued Cheque bearing No.738794 dtd:04.01.2016 for Rs.4,24,000/- including interest drawn on Syndicate Bank, Indiranagar Branch, Bengaluru. After receiving the intimation from the accused the complainant has presented the above said Cheque for payment through his banker i.e., State Bank of India, Jeevanbheema Nagar, Bengaluru, which returned with an 3 C.C.No.52814/2016 endorsement "Funds Insufficient" dtd:06.01.2016. The legal notice was issued on 22.01.2016 calling upon the accused to pay the Cheque amount. Inspite of receipt of legal notice, the accused neither paid the cheque amount nor replied to the said legal notice. Therefore, the complainant filed the present complaint.
5. On presentation of the complaint, the cognizance for the offence punishable under Sec.138 of N.I.Act taken, as there were sufficient materials to proceed against the accused. The accused in pursuance of summons appeared before the court and enlarged on bail. The prosecution papers were furnished to the accused in compliance of Sec.207 of Cr.P.C.
6. The substance of accusation for the offence punishable under Sec.138 of N.I.Act read over and explained to the accused in Kannada. The accused having understood the same did not pleaded guilty and claims to be tried.
7. The complainant examined himself as P.W.1 and got marked Exs.P.1 to P.6. The incriminating circumstances appearing in the evidence of the complainant read over to the accused in compliance of Sec.313 of Cr.P.C. The accused denied the same and not chosen to lead his evidence.
4 C.C.No.52814/20168. The learned counsel for the accused relied upon the following citations;
1. 2015 SAR (Criminal) 162 (K.Subramani .Vs. K.Damodar Naidu)
2. 1995 Crl.L.J. 560 (Shri Taher N. Khambati .Vs. Vinayak Enterprises
3. AIR 2008 (NOC) 702 (KER.) (G.Gopan .Vs. Tonny Varghese & Anr.)
4. 2011 Crl.L.J. 552 (Amzad Pasha .Vs. H.N.Lakshmana)
5. 2009 Crl.L.J. 3777 (Sanjay Mishra .Vs. Ms. Kanishka Kapoor @ Nikki and Anr.)
6. AIR 2008 SC 1325 (Krishna Janardhan Bhat .Vs. Dattatraya G. Hegde)
7. ILR 2008 Kar 4629 (Shivamurthy .Vs. Amruthraj)
9. Heard the arguments and perused the materials.
10. The points that would arise for my consideration are;
1. Whether, the complainant proves that, he has complied the provisions of Sec.138(a) to 138(c) of N.I.Act, 1881?
2. Whether, the complainant proves that, the accused has issued Cheque as per Ex.P.1 in order to discharge the legally recoverable debt?
5 C.C.No.52814/20163. Whether, the complainant proves that, the accused has committed the offence punishable under Sec.138 of N.I.Act?
4. What Order?
11. By considering the oral and documentary evidence on record and because of my below discussed reasons, I answer the above points in the followings;
POINT NO.1 : In the Affirmative.
POINT NO.2 : In the Affirmative.
POINT NO.3 : In the Affirmative.
POINT NO.4 : As per final Order.
REASONS
12. POINT NO.1: The complainant in order to punish the accused for the offence punishable under Sec.138 of N.I.Act has to show that, he has complied the provisions of Sec.138(a) to (c) of N.I.Act. Unless the complainant comply the said provisions, accused cannot be punished for the offence punishable under Sec.138 of N.I.Act.
13. As per Sec.138 of N.I.Act., the cheque has to be presented for payment within a period of 6 months or before the expiry of its validity whichever is earlier. Though, as per 6 C.C.No.52814/2016 the circular of Reserve Bank of India vide No.RBI/2011- 12/251 DBOD AML BC No.47/14.01.001/2011-12 dtd:04.11.2011 the cheque has to be presented within a period of 3 months but, no suitable amendment was made in consonance with the said circular to Sec.138 of N.I.Act. Hence, in the absence of suitable amendment the period of presentation of cheque is to be considered as 6 months. Secondly, the statutory notice is required to be issued within a period of 30 month from the date of receipt of information of dishonour of cheque. The cause of action for the complaint arises after the expiry of 15 days from the date of service of summons and complaint has to be filed within a period of 1 month after the lapse of the above said 15 days. In other words, the complaint has to be filed within 45 days from the date of service of statutory notice to the accused.
14. The complainant as P.W.1 has reiterated the complaint averments by way of examination in chief. He has deposed as to the lending of amount of Rs.4,00,000/- to the accused on 04.04.2015 and issuance of cheque as per Ex.P.1 for repayment of said loan with interest and its dishonour.
15. The alleged cheque was marked as Ex.P.1. The signature of the accused is at Ex.P.1(a) it was dtd:04.01.2016. The said cheque was returned unpaid for the reason "Funds 7 C.C.No.52814/2016 Insufficient" on 06.01.2016 as could be seen from Ex.P.2 bank return memo. From perusal of Ex.P.1 and Ex.P.2, it is quite clear that, the Ex.P.1 cheque was presented within a period of 6 months from its date. The statutory legal notice as per Ex.P.3 was issued on 22.01.2016 within a period of 1 month from the date of receipt of information of dishonour of cheque as per Ex.P.2. The said notice Ex.P.5 was served at the address on 24.01.2016. The present complaint is filed on 05.03.2016, if we recon a period of 45 days from the date of service of Ex.P.5 i.e., 24.01.2016 the present complaint is filed well within the period of limitation.
16. The learned counsel for the accused has submitted that, the statutory notice as per Ex.P.3 was not served on the accused and signature appearing on Ex.P.5 postal acknowledgment is not that of the accused and the complainant himself in his cross-examination admitted that, the signature on Ex.P.1 and Ex.P.5 are different. Hence, he argued that, the said statutory notice was not served on the accused. It is to be noted that, the accused appeared in pursuance of summons issued by this court. The summons was issued at the address shown in the cause title of the complaint which is same address shown in the statutory notice at Ex.P.3. When it is not in dispute that, the summons was served on the accused personally on the said address it 8 C.C.No.52814/2016 cannot be held that, the statutory notice issued as per Ex.P.3 on the same address is not served on the accused. Under Sec.27 of General Clauses Act., whenever a notice is dispatched to the correct address of the accused the presumption of its proper service has to be drawn. The accused has not disputed the address shown in Ex.P.3 as well as in the cause title of the complaint. It is for the accused to prove that, he was not residing in the said address when statutory notice was issued.
But, accused has not made such efforts. Such being the case, it cannot be held that, the statutory notice as contended by the learned counsel was not served on the accused. Accordingly, I answer this point in the "Affirmative".
17. POINT NOS.2 & 3: Since these 2 points are interconnected and in order to avoid repetition they are taken up together for common discussion.
The learned counsel for the accused argued that, the complainant has not produced either the loan agreement or any document except the Ex.P.1 cheque to show the alleged transaction. It is submitted that, even though as per the complaint and evidence of the complainant, the accused has agreed to repay the said loan with interest at the rate of 2% per month but, the complainant has not 9 C.C.No.52814/2016 produced any document to show that, accused has paid the interest as agreed. It is canvassed that, the complainant in his cross-examination has admitted that, he has not produced any document to show that, as on 04.04.2015, he had a sum of Rs.4,00,000/- and capacity to lend the same. It is also argued that, statutory notice as per Ex.P.3 was not served on the accused and the signature appearing on Ex.P.5 postal acknowledgment does not belong to the accused.
18. Per-contra, the learned counsel for the complainant argued that, the accused has not produced any documents to substantiate his defense nor stepped in to the witness box and when there is no dispute that, Ex.P.1 cheque and signature appearing on the said cheque belongs to the accused, it is for the accused to rebut the presumption available under Sec.139 of N.I.Act. It is argued that, the accused has not produced any document to substantiate his defense hence, the presumption available under Sec.139 is not rebutted. Therefore, prayed to convict the accused.
10 C.C.No.52814/201619. Section 139 of N.I.Act deals with presumption in favour of the holder. As per the said presumption, unless the contrary is proved, it is to be presumed that, the holder of the cheque received the cheque for the discharge in whole or in part of any debt or other liability. The presumption under Sec.139 of the Act is a presumption of law, it is not presumption of fact. This presumption has to be raised by the court in all cases filed under Sec.138 of N.I.Act once the factum of dishonour is established. The burden to rebut this presumption lies on the accused. The standard of such rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and clear. Therefore, a mere explanation is not enough to rebut this presumption of law. The Hon'ble Apex Court in a ruling reported in AIR 2001 SC 3897 between Hithen P. Dalal .Vs. Brathendranath Byanarjee held that, a mere explanation is not enough to rebut the presumption under Sec.139 available in favour of the complainant. The Hon'ble Apex Court in ruling reported in; AIR 2008 SC 1325 between Krishna Janardhan Bhat .Vs. Dattatreya G. Hegde was of the opinion that, the existence of legally recoverable debt is not a matter of presumption under Sec.139 and it has 11 C.C.No.52814/2016 to be proved by the complainant. But, the Hon'ble Apex Court clarified the said position of law in ruling reported in; AIR 2010 SC 1898 between Rangappa .Vs. Mohan and held that, the presumption under Sec.139 in deed extends as to the existence of legally recoverable debt and it is for the accused to rebut the said presumption. The Hon'ble Apex Court further held that, the accused in order to rebut the said presumption need not step in to the witness box and it is sufficient if the accused is able to establish his defense by preponderance of probabilities. In other words, unlike the prosecution, accused is not expected to prove his defense beyond reasonable doubt and it is sufficient if he is able to establish his defense by preponderance of probabilities. Therefore, if the accused is able to raise a probable defense, which creates doubt about the existence of legally recoverable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defense and it is conceivable that, in some cases, the accused may not need to adduce defense of his own.
12 C.C.No.52814/201620. Keeping in view the above said position of law, let me appreciate both oral as well as documentary evidence on record.
21. While discussing point No.1, this court has already held that, the complainant has complied, Sec.138(a) to (c) of N.I.Act. Once, the said provision is complied as per the above said position of law between Rangappa .Vs. Mohan, Sec.139 comes to the aid of the complainant which raises a presumption as to the existence of legally recoverable debt for the discharge of which the alleged cheque was issued.
22. I have carefully perused the materials on record. In the cross-examination, the complainant has admitted that, he has not entered in to loan agreement or produced any document to show that, as on 04.04.2015, he had Rs.4,00,000/- with him. The accused in entire cross- examination of the complainant has not put a single suggestion that, the Ex.P.1 cheque does not belong to him, so also, the signature appearing on the same. In other words, there is no dispute that, Ex.P.1 cheque and also the signature appearing on the said cheque belongs to the 13 C.C.No.52814/2016 accused. The defense of the accused as could be seen from the cross-examination of P.W.1 is that, the complainant is carrying on chit business and in connection with the same, the accused has issued apart from Ex.P.1, 2 cheques as a security.
23. In view of the fact that, the presumption as to the existence of legally recoverable debt is to be raised once Sec.138(a) to (c) of N.I. Act are complied, the admission of P.W.1 that, he has not produced documents to show that, on 04.04.2015, he had Rs.4,00,000/- and also a lending capacity will not rebut the presumption available in favour of the complainant under Sec.139 of N.I.Act. As already I have discussed, mere explanation by the accused is not sufficient to rebut the presumption available in favour of the complainant under Sec.139 of N.I.Act particularly when the accused does not dispute, Ex.P.1 cheque belongs to him so also, signature appearing on it. It is for the accused to explain the circumstances under which the Ex.P.1 cheque came in possession of the complainant. As already I have discussed mere explanation is not sufficient and defense of the accused has to be proved with cogent, clear evidence. The explanation offered by the accused in 14 C.C.No.52814/2016 defense should be plausible, probable. The accused while he was examined under Sec.313 of Cr.P.C. has stated that, Ex.P.1 cheque was issued at the time of chit transaction with the complainant and his 2 more cheques are in possession of the complainant. But, the accused has not produced any iota of material to show that, the complainant was carrying on chit business and Ex.P.1 cheque was issued as a security in connection with the same. It is to be noted that, the P.W.1 in his cross- examination stated that, he was retired from BEML in April 2004. Therefore, it cannot be ruled out that, the complainant had retirement benefits with him and out of the said retirement benefit the loan was lent to the accused. So far as the payment of interest and loan agreement is concerned, Ex.P.6 the promissory note and consideration receipt are vital documents. Though Ex.P.6 does not bear the signature of witness and scribe but, it is only a corroborative piece of evidence so as to prove the alleged transaction. It is not in dispute that, the Ex.P.6 bears the signature of the accused. Under Sec.118 of N.I.Act., there is a presumption as to consideration in case of promissory note and cheque. It is for the accused to rebut the said presumption. But, accused has not made 15 C.C.No.52814/2016 any efforts by offering plausible explanation to establish his defense.
24. It is to be noted that, the cheque issued by the accused was returned unpaid for the reason insufficient fund in the account of the accused as per Ex.P.2. If at all as per the defense of the accused Ex.P.1 cheque was issued as a security in connection with the chit transaction, the accused ought to have issued stop payment instruments to his banker in respect of Ex.P.1 cheque. But, as already I have stated Ex.P.1 cheque was dishonored for the reason "Insufficient Funds". Though, the P.W.1 admitted that, he has not entered in to an agreement of loan with the accused. But, Ex.P.6 on demand promissory note and consideration receipt is nothing but an agreement evidencing the alleged loan transaction. The accused has not disputed the execution of on demand promissory note and consideration receipt which makes this court to draw presumption as to passing of consideration.
25. So far as service of legal notice as per Ex.P.3 is considered, the complainant has produced postal acknowledgment as per Ex.P.5. Though, P.W.1 admitted that, signature appearing on Ex.P.5 is different from that of Ex.P.1(a). But, as already I have discussed, the summons issued from this court to the address shown in the statutory 16 C.C.No.52814/2016 notice Ex.P.3 was served personally on the accused. Such being the case, when notice was issued at the proper address of the accused the presumption as to its proper service has to be drawn. The accused has not replied to the said notice which makes this court to draw an adverse inference. If at all, the Ex.P.1 cheque was issued as a security in connection with the chit business, the accused should have replied to the said notice raising the said contention. Therefore, the non issuance of reply by the accused to the statutory notice makes this court to draw an adverse inference.
26. In the 1st ruling relied upon by the learned counsel for the accused reported in; 2015 SAR (Criminal) 162 (K.Subramani .Vs. K.Damodar Naidu) both the acc and comp were government servants and governed by government service conduct rules which prescribes the mode of lending and borrowing. Hence, as there is noting on record to show the prescribed mode was followed, the acc was acquitted. But, in this case neither the comp nor the accused are government officials and hence, the said facts are not applicable to the present case on hand.
27. In the 2nd ruling relied upon by the learned counsel for the accused reported in; 1995 Crl.L.J. 560 (Shri Taher N. Khambati .Vs. Vinayak Enterprises) the Hon'ble Court of 17 C.C.No.52814/2016 Andhra Pradesh acquitted the accused on the ground that, cheque was not issued by the accused voluntarily and comp was in the habit of obtaining blank cheques from the debtors. But, the facts of the present case are totally different. Hence, the same cannot be made applicable.
28. Thirdly, the ruling relied upon by the learned counsel for the accused reported in; AIR 2008 (NOC) 702 (KER.) (G.Gopan .Vs. Tonny Varghese & Anr.) the Hon'ble High Court of Kerala acquitted the accused on the ground that, the execution of the cheque and passing of consideration was not proved. But, the fats of the said case are not avialable. It is the opinion of the Hon'ble Hight Court of Kerala putting signature on blank cheque will not attract Sec.138. But, in this casd the accused failed to prove that, he has signed on blank cheque. Hence, the facts of the said case are not applicable to the present case on hand.
29. The 4th ruling relied upon by the learned counsel for the accused reported in; 2011 Crl.L.J. 552 (Amzad Pasha .Vs. H.N.Lakshmana) the Hon'ble High Court acqutited the accused on the ground that, there is no document evidencing the loan transaction but, in this case, the Ex.P.6 pronote was executed evidencing the alleged transaction. Hence, the said ruling is not applicable to the present case on hand.
18 C.C.No.52814/201630. The 5th ruling relied upon by the learned counsel for the accused reported in; 2009 Crl.L.J. 3777 (Sanjay Mishra .Vs. Ms. Kanishka Kapoor @ Nikki and Anr.) the Hon'ble Bombay High Court held that, failure of the comp to disclose the amount in income tax returns is sufficient to rebut the presumption. But, in this case there is no cross-examination of the complainant that, he is an income tax assesss and the amount lent to the accused is shown in the income tax returns. Hence, the said ruling cannot be made applicable to the present case on hand. Moreover, as per the complaint averments, the accused agreed to repay the said loan amount within 6 months hence, the question of showing the amount lent to the accused in income tax returns of the complainant does nto arises, as the accused himself assured to repay the loan within 6 months in the same financial year.
31. The 6th ruling relied upon by the learned counsel for the accused reported in; AIR 2008 SC 1325 (Krishna Janardhan Bhat .Vs. Dattatraya G. Hegde) the Hon'ble Apex Court was of the opinion that, the complainant has to prove the existence of legally recoverable debt but, the said position was clarified by the Hon'ble Apex Court in subsequent ruling reported in; (2010) 11 SC Cases 441 (Rangappa .Vs. Mohan) as per the said citation, the presumption has to be drawn in 19 C.C.No.52814/2016 favour of the complainant under Sec.139 as to the existence of legally recoverable debt.
32. The 7th ruling relied upon by the learned counsel for the accused reported in; ILR 2008 Kar 4629 (Shivamurthy .Vs. Amruthraj) the Hon'ble High Court of Karnataka relied upon the ruling reported in; Krishna Janardhan Bhat .Vs. Dattatreya G. Hegde the position of which is clarified in; (2010) 11 SC Cases 441 (Rangappa .Vs. Mohan) by the Hon'ble Apex Court.
33. I have carefully perused the facts of the said case which are totally different to the present case on hand. Hence, the same cannot be made applicable to the present case on hand. Accordingly, I answer both point Nos.2 and 3 in the Affirmative.
34. POINT NO.4: While discussing point Nos.2 and 3 this court has come to the conclusion that, complainant has proved her case that, accused has committed the offence punishable under Sec.138 of N.I.Act, which is punishable with fine of double the Cheque amount or with simple imprisonment for a period of 2 years or both. Considering the facts, circumstances, year of transaction 20 C.C.No.52814/2016 this court is of the view that, the accused should be sentenced to pay a fine of Rs.4,40,000/- out of which, Rs.5,000/- shall be defrayed in favour of the State as a prosecution expenses and remaining fine amount of Rs.4,35,000/- shall be paid to the complainant as a compensation under Sec.357(1) of Cr.P.C. Hence, I pass the following;
ORDER Acting under Sec.255(2) of Cr.P.C. the accused is hereby convicted for an offence punishable under Sec.138 of Negotiable Instrument Act and ordered to pay fine of Rs.4,40,000/-. In default the accused has to undergo Simple Imprisonment for 6 months.
Out of the said fine amount, a sum of Rs.5,000/- shall be defrayed in favour of the State as a prosecution expenses and acting under Sec.357(1) of Cr.P.C. a sum of Rs.4,35,000/- shall be paid as a compensation to the complainant.
21 C.C.No.52814/2016The bail bond executed by the accused stands cancelled and office is directed to supply free copy of the Judgment to the accused.
(Dictated to the Stenographer, transcript thereof is corrected and then pronounced by me in the open court on this the 17th day of March, 2017) (SATHISH J. BALI), LVII ACMM, BENGALURU.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 : O.N.Chandra Prakash
2. Documents marked on behalf of complainant:
Ex.P.1 : Original Cheque bearing
No.738794 dtd:04.01.2016
Ex.P.1(a) : Signature of the accused
Ex.P.2 : Bank Endorsement
Ex.P.3 : O/c. of the legal notice
dtd:22.01.2016
Ex.P.4 : Postal Receipt
Ex.P.5 : Postal Acknowledgment
Ex.P.6 : On Demand Promissory Note
22 C.C.No.52814/2016
3. Witnesses examined on behalf of Accused:
-Nil-
4. Documents marked on behalf of Accused:
-Nil-
(SATHISH J. BALI), LVII ACMM, BENGALURU.