Bangalore District Court
Axis Bank Ltd vs G R Ramachandraiah on 16 July, 2016
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 16th day of July 2016
: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.2522/2015
Complainant : Axis Bank Ltd.
Branch Office at plot No.41,
Seshadri Road,
Bangalore - 560 009
Represented by its
Deputy Manager
Ms.Benazir Afshan
(By Sri.SA - Adv.)
Accused : G R Ramachandraiah
No.95, Gavinagamangala Post
Magadi Taluk,,
Ramanagar District - 562120
(By Sri. BR- 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 : 16.07.2016.
2 CC No.2522 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 accused had applied
for agricultural loan and same was sanctioned to the accused
bearing loan in No.94010300002660. The accused agreed to
abide by the terms and conditions. The accused has issued the
cheque dated 02.07.2014 for Rs.5,64,531.35. The said cheque
was presented and was dishonoured for reason "Funds
Insufficient" on 02.07.2014. Legal notice was issued on
18.07.2014 through RPAD. The said notice was served on
21.07.2014 the accused has not paid the amount even after
expiry of 15 days hence the complaint
3. On presentation of the complaint, cognizance and
statement of the Complainant was recorded and case was
ordered to register against the accused for the offence
punishable u/s 138 of Negotiable Instruments Act. Notice was
sent to the accused.
3 CC No.2522 of 2015
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 Deputy Manager 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 got marked Ex-
D1.
6. Heard arguments.
7. The points that arise for consideration are as under:
1) Whether the complainant proves that the
cheque bearing No.013147 dated : 02.07.2014
of Rs.5,64,531.35/- drawn on Axis Bank,
Bangalore returned unpaid for the reason that
the funds insufficient in the account of the
Accused?
4 CC No.2522 of 2015
2) Whether the accused proves that, cheque
bearing No.013147 dated : 02.07.2014 was not
issued in discharge of any legally recoverable
debt in favour of the Complainant
3) What order ?
8. My findings on the above points are as under:
Point No.1: In the affirmative,
Point No.2: In the Affirmative,
Point No.3: As per the final order for the following:
REASONS
POINT NO.1:
9. PW1 has stated that accused had applied for agricultural
loan and same was sanctioned to the accused bearing loan in
No.94010300002660. The accused agreed to abide by the terms
and conditions. the accused has issued the cheque dated
02.07.2014 for Rs.5,64,531.35 as per Ex-P2. The said cheque
was presented and was dishonoured for reason "Insufficient
Funds" on 02.07.2014 as per Ex-P3.
10. The accused during cross-examination has admitted
that Ex-P2 cheque pertains to his account and he has signed it.
From the evidence it could be held that Ex-P2 cheque pertain to
the account of the accused and the said cheque when presented
5 CC No.2522 of 2015
has been dishonoured with reason "Insufficient Funds". In view
of the above discussion point no. 1 is answered in affirmative.
POINT NO.2
11. 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
must be more than plausible explanation by way of rebuttal
evidence. In other words the defence raised by way of rebuttal
6 CC No.2522 of 2015
evidence must be probable and capable of being accepted by the
court.
12. It is specific case of the Complainant that the accused
had applied for agricultural loan and same was sanctioned to
the accused bearing loan in No.94010300002600 and the
accused had agreed to abide by the terms. The accused after
availing the said facility had issued cheque. During course of
cross-examination of PW1 it is elicited that the accused had
defaulted in all the three loans; that for 3 loans one customer ID
is given; that in the legal notice they have mentioned one loan
account numbers that there are 3 loan account numbers. She
admits that notice is not specifically sent to the customer in
respect of loan which he has defaulted. She has stated that
cheque is issued in respect of one customer ID which includes all
the three loans and that it is not mentioned in the notice that
cheque was given in respect of which customer ID. She has
stated that the total outstanding amount for the three loan
account is Rs.5,64,531.35 ; that there is loan of 75000/-
towards cash credit, Rs.3,00000/- towards terms loan and
Rs.1,55,000/- towards another term loan. In Ex-P4 notice the
7 CC No.2522 of 2015
same fact have been stated. The Ex-P7 is a account ledger
enquiry in respect of account ID 094010300002660 INR 094 G R
Ramachandraiah.
13. On 16.09.2014 in particulars it is mentioned Dr
operative account and credit amount is mentioned as 83418.75.
The Complainant has also produced the account ledger enquiry
account ID 09410600018920 INR 094 on 16.09.2014 in
particular it is mentioned 09410600016920 pay of demand
satisfaction Rs.3,22,024/-. The Complainant has produced
account ledger enquiry in respect of account ID
094010600018939 INR094 G R Ramachanrdaraih. In particular
on 04.09.2014 it is mentioned 094010600018939 pay of demand
satisfaction 1,59,087/-. The Complainant has produced account
ledger enquiry account ID No.001012910117 INR 001SL funds
in transit account. On 23.09.2015 G R Ramachandraiah credit
amount is mentioned as 49,000/- 2000/-, 49,000/-. These
entries discloses that sum of Rs.1 lakh has been paid by the
accused and this entry has not been reflected in the loan
account statement. From the above ledgers it is seen that there
are three different loan account ID number i.e.
094010300002660, 094010600018920, 094010600018939. The
8 CC No.2522 of 2015
balance due has also not been mentioned in the account
statement. The pleadings and notice u/s 138 disclose that the
cheque is in respect of account ID No. 094010300002660. The
amount due is 83,418/- there is no pleading that cheque has
been given in respect of all three loans. In the absence of
pleadings it cannot be inferred that cheque has been given in
respect of all the three loan. The accused has specifically
contended that on the date of sanction of loan the Complainant
bank had executed simple mortgage deed and have sanctioned
the loan that Complainant bank had instructed him to open SB
account in the same bank and issued cheque book to him and
had taken several cheques from him for the purpose of security.
The alleged cheque was not issued towards discharge of the loan.
Accused has stated that in the account statement produced by
PW1 transaction enquiry Ex-P9. Cheque bearing No.13141
dated 16.04.2009 for sum of Rs.80,000/- was presented as per
Ex-P9a another cheque bearing No.13142 dated 05.03.2009
issued in the name of P N Shivanna has been honoured Ex-P9b.
The cheque in question in this case is in the same seires as the
cheque which are issued in the year 2009. It is stated that
9 CC No.2522 of 2015
the Complainant has misused the blank cheque by filling name,
amount and date. Ex-P2 cheque is for Rs.5,64,531/- The last
entry as per account ID 94010300002660 is Rs.83,418/-. PW1
plead ignorance as to whether cheques were received at the time
of sanction of the loan. PW1 is an official witness who has
deposed on the basis of record. She ought to have given specific
answer instead of giving evasive answer. No prudent person
would issue cheque for more than the amount due. This is one
of the circumstances which indicate that cheque might not have
been issued by the accused as contended by the Complainant.
14. From the evidence and the argument it is clear that the
contention of the accused is that the dishonour cheque was not
issued towards legally enforceable debt Blank signed cheque was
issued as security. The learned counsel for the Complainant
relying upon the decision reported in ILR 2003 Kar 4373 ICDS
Ltd. vs. Beena Shabir and another contended that when the
cheque is issued as security complaint will lie u/s 138 of NI Act.
15. In the decision reported in AIR 1992 Madras 346 has
been held,
10 CC No.2522 of 2015
"Delivery of signed blank stamp paper to
party - party receiving it, authorize to
complete but party is not entitle to recovery
said amount by filing suit, as by completing
inchoate document he does not become
holder in due course of that document.
Therefore the amount reflected in the cheque
is not enforceable legal liability".
In ILR 2006 Kar 3597 it has been held that,
cheque issued in respect of uncertain future
liabilities would not attract prosecution u/s
138 of NI Act
16. The counsel for accused has relied upon the decision
reported in ILR 2008 Kar 3635 in K Narayana Nayak vs.
Sri.M.Shivarama Shetty wherein our Hon'ble High Court has
held that,
"That the cheque issued by the respondent
to the appellant is only as a security and
not for discharge of any existing debt. So
far as the presumption as to issuance of the
cheque for consideration and in discharge of
the debt, the respondent / accused need not
disprove the appellant's case in its entirety.
11 CC No.2522 of 2015
He can discharge his burden on the basis of
preponderance or probabilities through
direct or circumstantial evidence, for which
he can also rely on the evidence adduced by
the Complainant - Evidence on record
clearly establishes that the cheque was not
issued towards discharge of any legally
enforceable debt, but the blank signed
cheque was issued as security - order of
acquittal is justified".
16. 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.1 is answered in the affirmative.
POINT No.2
17. In view of the affirmative findings on point 1 and 2 the
Complainant is not entitled for the relief sought for. Accordingly
the point for consideration is answered in the affirmative. In the
result I proceed to pass the following:
12 CC No.2522 of 2015
ORDER
Acting u/s 255(1) of Cr.P.C., the accused is acquitted for the offence u/s 138 of NI Act.
Bail bond shall be in force for the period of 6 months as provided u/s 437A Cr.P.C.
(Dictated to the Stenographer, transcribed and computerized by her, corrected and then pronounced by me in the open court on this the 16th July day of 2016) (SHEILA B.M.) XXVI ACMM, Bangalore City.
ANNEXURE Witnesses examined for the Complainant:
PW.1 Benazir Afshan Witness examined for the accused:
DW1 G R Ramachandraiah List of Documents marked for the Complainant:
Ex. P1 Letter of authority.
Ex. P2 Cheque.
Ex. P2(a) Signature of the accused on the cheque.
Ex. P3 Endorsement.
Ex. P4 Notice.
Ex. P5 RPAD receipt.
Ex. P6 RPAD acknowledgement.
Ex. P7 Account Statement.
13 CC No.2522 of 2015
Ex. P8 Complainant.
Ex.P9 Account statement
List of Documents marked for the accused:
Ex. D1 Reply notice
XXVI ACMM, Bangalore