Bangalore District Court
M/S.Basaveshwarnagar Co-Op vs Mr.Keshva Murthy on 22 April, 2017
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 22nd day of April 2017
:PRESENT:
SMT.SHEILA B.M. M.Com. LL.M.
XXVI Addl.C.M.M., Bangalore City.
JUDGMENT U/S 355 OF Cr.P.C
Case No. : C.C No.8592 /2015
Complainant : M/s.Basaveshwarnagar Co-op.
Credit Society Ltd. (Reg)
No. 159/J, 4th Main Road,
3rd Block, 3rd stage,
Basaveshwaranagar,
Bangalore - 79
Rep. by its Recovery Officer,
Mr.K B Eshwaraiah
(By Sri.SGS - Adv.)
Accused : Mr.Keshva Murthy
s/o. Channegowda,
No.1122, "Sai Nilaya"
Mahalakshmipuram,
10th 'D' Cross, 7th Main Road,
West of Chord Road,
2nd Stage,
Bangalore - 86
2 C.C.No.8592 of 2015
And Also available at,
Mr.Keshva Murthy,
Assistant Teacher,
Government Primay School,
Hoody, "Sarvagna Gudara School"
K R Puram,
Bangalore - 48
(By Sri.SGS Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Final Order : Accused is acquitted
Date of Order : 22.04.2017
3 C.C.No.8592 of 2015
The complainant has filed this complaint against
the Accused for the offence punishable u/s 138 of
Negotiable Instruments Act.
2. The Complainant has stated that One Gopalaiah
was sanctioned loan amount of Rs.40,000/- on
10.04.2005. He became a defaulter. Recently when the
Complainant approached Gopalaiah being friend and
surety to the said loan had issued cheque dated
10.09.2014 for Rs.1,07,000/- drawn on Centurian Bank.
When the said cheque was presented it was returned
endorsement on 23.9.2014 as "referred to drawer". Legal
notice was issued on 09.10.2014 through RPAD. RPAD
sent to the Complainant is returned as "not claimed" and
speed post sent is served on the accused. The accused
has not paid the amount. Hence the complaint.
3. On presentation of the complaint, cognizance
was taken statement of the Complainant was recorded
and case was ordered to register against the accused for
4 C.C.No.8592 of 2015
the offence punishable u/s 138 of Negotiable
Instruments Act. Notice was sent to the accused.
4. The accused appeared before the court through
his counsel and was enlarged on bail. Copies of the
papers were furnished to them as required u/s 207 of
Cr.P.C. The summons and the substance of the
accusation for the offence punishable u/s 138 of
Negotiable Instruments Act was read over and explained
to the accused. The accused pleaded not guilty and
claimed trial.
5. The Complainant has examined its Recovery
Officer as PW1 and got marked Ex-P1 to P9. After
closing the Complainant side, the statement of the
accused u/s 313 of Cr.P.C. was recorded and the
accused has denied the incriminating evidence against
him. The accused examined himself as DW1 and got
marked Ex-D1.
6. Heard arguments. The counsel for accused has
relied upon the decision reported in CC No.140/2012
5 C.C.No.8592 of 2015
and in CC No.232/2010. The principles laid down in the
said decision are not applicable to the case on hand.
7. The points that arise for consideration are as
under:
1) Whether the accused proves that,
cheque bearing No.472866 dated:
10.09.2014 was not issued in
discharge of any legally recoverable
debt in favour of the Complainant ?
2) What order?
8. My findings on the above points are as under:
Point No.1 : In the affirmative,
Point No.2 : As per the final order for the
following:
REASONS
POINT NO.1:
9. It is undisputed fact that Ex-P2 cheque pertain
to the account of the accused and when the said cheque
6 C.C.No.8592 of 2015
was presented it has been dishonoured as "Funds
insufficient" in the account of the accused.
10. Once the cheque relates to the accused and his
signature on the said cheque is proved an initial
presumption as contemplated u/s. 138 of Negotiable
Instruments Act has to be raised by the court in favour
of the Complainant. Sec. 139 of the Negotiable
Instrument Act contemplates that it shall be presumed
unless contrary is proved that the holder of the cheque
received the cheque of the nature referred to in the
Sec.138 for the discharge of the whole or in part any
debt or liability. The presumption referred to u/s 138 of
Negotiable Instruments Act is mandatory presumption
and in general presumption. But the accused is entitled
to rebut the said presumption. What is required to be
established by the accused in order to rebut the
presumption is different from each case under given
circumstances. But the fact remains that mere plausible
explanation is not expected from the accused and it
7 C.C.No.8592 of 2015
must be more than plausible explanation by way of
rebuttal evidence. In other words the defense raised by
way of rebuttal evidence must be probable and capable
of being accepted by the court.
11. It is undisputed that the accused and
Gopalaiah each borrowed loan in the year 2005 ; the
accused stood as guarantor for the loan of Rs.40,000/-
borrowed by Gopalaiah ; the accused had repaid his loan
where as Gopalaiah was defaulter.
12. The case of the accused is that he had given
three cheques to the Complainant when he borrowed.
After repaying the loan he had requested the
Complainant to return the cheques and bank officials
told that the cheque would be returned along with NOC.
The present cheque is one of the cheque given as
security. The Complainant bank had misused the
cheque given as security to the loan advanced to him.
He has never issued the cheque in the year 2014 to the
8 C.C.No.8592 of 2015
loan borrowed by Gopalaiah as claimed by Complainant
bank.
13. To substantiate that the Ex-P2 cheque was
given as security cheque to the loan borrowed by him the
accused has not produced any document nor examined
any witness. It is elicited from PW1 that the handwriting
and signature in Ex-P2 cheque differs.
14. The position in law has been explained in the
judgment of the Division Bench of the Kerala High
Court in Lillukutty v. Lawrance 2003(2) DCR 610 in
the following words.
In the instant case, the signature is
admitted. According to the drawer of
the cheque, amount and the name has
been written not by the drawer but by
somebody else or by the payee and
tried to get it encashed. We are of the
view, by putting the amount and the
name there is no material alternation
on the cheque under section 87 of the
Negotiable Instruments Act. In fact
9 C.C.No.8592 of 2015
there is no alteration but only adding
the amount and the date. There is no
rule in banking business that payee's
name as well as the amount should be
written by drawer himeslef. In the
instant case bank has never found
that the cheque was tampered with or
forged or there is material alteration or
that the handwriting by which the
payees name and the amount was
written was differed. The bank was
willing to honour the cheque if
sufficient funds were there in the
account of the drawer even if the
payees name and the amount was
written by somebody else other than
the holder of the account or the drawer
of the cheque. The mere fact that the
payee's name and the amount shown
are not in the handwriting of the
drawer does not invalidate the cheque.
No law provides in the case of
cheques the entire body has to be
written by the drawer only. What is
material is the signature of the drawer
and not the body of the instrument.
10 C.C.No.8592 of 2015
Therefore when the drawer has issued
the cheque whether the entire body
was written by the drawer written
beyond the instructions of the drawer,
whether the amount is due or not,
those and such matters are defenses
which drawer has to raise and prove
it. Therefore the mere fact that the
payee's name and the amount shown
in the cheque are in different
handwriting is not a reason for not
honouring the cheque by the bank.
Banks would normally see whether
the instrument is that of the drawer
and the cheque has been signed by
the drawer himself. The burden is
therefore entirely on the drawer of the
cheque to establish that the date,
amount and the payee's name are
written by somebody else without the
knowledge and consent of the drawer.
The said decision applies to the case on hand. In
the instant case, the drawer of the cheque has not
discharged the burden. Apart from the interested
11 C.C.No.8592 of 2015
testimony of the drawer, no independent evidence was
adduced to discharge the burden.
15. The accused has stated that in pursuance to
the arbitration award the Complainant bank had given
application to the department of Public Instructions for
deducting Rs.2000/- from his salary towards loan
obtained by Sri.Gopalaiah. From Feb 2105 to September
2016 totally 20 month have been deducted. In support
of contention he has produced Ex-D1 pay slips 19 in
Nos. It is admitted by the Complainant that
Rs.40,000/- has been recovered. However the said
payment is subsequent to the dishonour of the cheque.
16. Ex-P2 cheque is drawn on Centurion Bank.
The said Centurion Bank had merged with HDFC Bank
in the year 2008. Ex-P2 is a non CTS cheque. It is
argued by the defense advocate that Centurion Bank was
not existing from 2008. The disputed cheque is dated
10.09.2014 and it is dated subsequent to the date of
merger. Perusal of the material placed on record in the
12 C.C.No.8592 of 2015
context of defense raised by the accused it appears more
probable that the accused has taken a loan of
Rs.50,000/- as contended and at that time the
Centurion Bank cheque was given long prior to the date
of disputed cheque. Reliance is placed on the decision of
our Hon'ble High court in CC No.232/2010 HDFC Bank
Ltd. vs. Naveen kumar Bhola in this regard. This is one
of the circumstances which indicate that the cheque
might not have been issued on the date mentioned in the
cheque.
17. The counsel for the Complainant argued that
accused ought to have replied to the Legal notice by
taking specific contention with regard to the security
cheque given and about the merger of Centurion Bank
with HDFC Bank and so the decision of the Hon'ble High
court referred to above is not applicable. In my opinion
the settle legal position is that mere failure to send reply
to the notice will not take away the right of the party to
contest the case.
13 C.C.No.8592 of 2015
18. The case of the accused is that he had not
issued Ex-P2 cheque towards legally dischargeable debt
of Gopalaiah. It is undisputed fact that the
Complainant had raised dispute No.749/2011 and had
obtain an arbitration amount against the accused for
Rs.86,000/-. PW1 admits that he has not produced the
award passed by arbitrator ; that he has not produced
the statement pertaining to the loan account of the
borrower Gopalaiah. As arbitration award has not been
produced it is not possible to know the date when the
award is passed and the interest awarded. As the
statement of account has not been produced it is not
possible to know the amount due in the loan account of
the borrower Gopalaiah as on the date of the alleged
cheque. For the reasons best know to the Complainant,
the Complainant has not stated in the complaint or in
the notice about the arbitration award and the interest
awarded. The Complainant has also not produced the
loan documents which would have thrown light on the
interest agreed to be paid. Without stating the agreed
14 C.C.No.8592 of 2015
interest rate and furnishing calculation with regard to
the amount due it is not possible to hold that the
accused is liable to pay Rs.1,07,000/- towards legally
dischargeable debt.
19. The case put forward by the accused that the
cheque was not given for the discharge of the debt
appears to be probable and convincing. The
presumption u/s 118 and 139 of act would stand
rebutted. The Complainant has not placed any other
acceptable evidence. In view of the above discussion
point no.2 is answered in the affirmative.
POINT No.2
20. In view of the affirmative findings on point 1 the
Complainant is not entitled for the relief sought for. In
the result I proceed to pass the following:
ORDER
Acting u/s 255(1) of Cr.P.C., the accused is acquitted for the offence u/s 138 of NI Act.
15 C.C.No.8592 of 2015Bail bond shall be in force for the period of 6 months as provided u/s 437A Cr.P.C.
(Typed directly on computer to my dictation by the stenographer in the chamber, corrected and then pronounced by me in the open court on this the 22nd April day of 2017) (SHEILA B.M.) XXVI ACMM, Bangalore City. ANNEXURE Witnesses examined for the Complainant:
PW.1 K B Eshwaraiah Witness examined for the accused:
DW1 M Keshvamurthy List of Documents marked for the Complainant:
Ex. P1 Authorization. Ex. P2 Cheque. Ex. P2(a) Signature of the accused on the cheque. Ex. P3 Endorsement. Ex. P4 Notice. Ex. P5 RPAD receipts four in Number. Ex. P6 Returned RPAD cover (opened in open court) Ex. P6(a) Notice inside the cover. Ex. P7 RPAD acknowledgement. Ex. P8 Loan agreement. Ex. P9 Complaint.
List of Documents marked for the accused:
Ex.D1 : Salary Slips (19 Nos.) XXVI ACMM, Bangalore.