Bangalore District Court
/ Accused : 1 M/S.Jatti Projects Inc vs / : Mrs.Jyothi P.Gera on 13 August, 2021
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Crl.A. No.871/2018
IN THE COURT OF THE LXI ADDL. CITY CIVIL AND
SESSIONS JUDGE, BENGALURU CITY (CCH-62)
Dated this the 13 th day of August, 2021
PRESENT :-
Sri S.R.MANIKYA, B.Sc., LL.B.,
LXI Addl. City Civil & Sessions Judge,
Bangalore, (CCH-62)
Criminal Appeal No.871/2018
Appellant / Accused : 1 M/s.Jatti Projects Inc
Survey No.51
Pattandur Agrahara
Whitefield
Bengaluru-560 066
Rep. by D.B.Jatti
2 D.B.Jatti
S/o.Late B.D.Jatti
M/s.Jatti Projects Inch
Aged about 73 years
Presently R/a.Dwarakamai
Survey No.51, ECC Road
Whitefiled
Bengaluru-560 066
3 Jatti Engineering India Pvt. Ltd.,
Survey No.51
Pattandur Agrahara
Whitefield
Bengaluru-560 066.
Rep. by D.B.Jatti.
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Crl.A. No.871/2018
4 Mr.D.B.Jatti
Director
Jatti Engineering India Pvt. Ltd.,
Survery No.51
Pattandur Agrahara
Whitefield
Bengaluru-560 066.
5 Mrs.Rani Danappa
W/o.Mr.D.B.Jatti
Director
Jatti Engineering India Pvt. Ltd.,
Survey No.51
Pattandur Agrahara
White Field
Bengaluru-560 066.
(By Sri.NPBM., Advocate)
V/s.
Respondent / : Mrs.Jyothi P.Gera
Complainant W/o.Mr.Prakash Gera
Aged about 41 years
No.8/2, I Cross,
Lakshmi-560 027.
(By Sri.GPA., Advocate)
JUDGMENT
This is an Appeal preferred against the judgment dated 21.04.2018 passed by the learned XX ADDL ACMM, Bangalore in C.C. No.16123/2010 wherein the learned XX ACMM has convicted the accused for an offence punishable 3 Crl.A. No.871/2018 under Section 138 of N.I. Act and directed to pay fine of Rs.4,60,000/- and out of that Rs.10,000/- has been ordered to be paid to the state and Rs.4,50,000/- as compensation to the complainant.
2. The brief facts of the appellant case is that; The appellant No.2 has approached the respondent and sought for loan of Rs.3 Lakhs in the month of March 2008 for the purpose of business and agreed to pay the amount with interest @ 2% p.m., The amount was paid by the complainant to appellant No.1 by way of cheque. Though the accused undertook to pay the amount he has not paid the amount. Appellant No.2 being the Director, appellant No.3 being the company issued the cheque for Rs.2,50,000/- for the repayment of the loan borrowed and assured the complainant that the same will be honoured when it is presented for encahment, believing the version of the accused, the complainant presented the cheque on 07.12.2009 which was dishonoured on 08.12.2009 as insufficient funds. Though notice was issued the accused has not paid the amount. Hence, the complaint has been filed.
3. Inorder to prove the case of the complainant, Pw-1 was examined and got marked documents at Ex.P.1 to Ex.P.37. On behalf of the accused, DW-1 and 2 have been examined and Ex.D.1 to EX.D.13 are marked.
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4. After hearing the arguments of both the counsels, the learned Magistrate has convicted the accused for the offence punishable under Section 138 of N.I. Act.
5. Against this judgment and conviction order, now this appeal has been preferred and contended that the judgment passed by the learned Trail Judge is improper and liable to be set aside. The learned Magistrate has wrongly come to the conclusion that by not considering the arguments of appellant, submitted before the court. Though there is no liability for issue of cheque, the learned Magistrate has wrongly come to the conclusion that the accused has issued the cheque for the legally recoverable debt. The argument of appellant about the power of attorney is not properly considered by the court. Though in the cross-examination the PW-2 specifically states that the power of attorney holder is not well versed with the facts of the case that is completely ignored by the learned Magistrate.
The learned Magistrate has wrongly come to the conclusion that the three installments has been paid towards the loan transaction. The appellant No.2 though he is not authorized signatory to the cheque, the learned Magistrate has held that he is the authorized signatory of the cheque. Though notice has not been served and Ex.P.1, 4 to 20 does not prove the service of notice though complainant admits 5 Crl.A. No.871/2018 that he has shown the transaction in income tax returns and failed to produce the same that is completely ignored by the learned Trail Court. The cross-examination of PW-1 where he has admitted the transaction with Raja Rathnam and the documents related to the transaction Ex.D.2 to 5 have been marked which is not considered by the Court.
Now in the course of cross-examination of Pw-1 has specifically admitted about receiving of Rs.1,25,000/- on 30.06.2018 and also few cheques in respect of the interest. The learned Magistrate has not considered the fact that the cheque for Rs.2,50,000/- was issued for another transaction. Though the appellant has successfully adduced the evidence and rebutted the presumption drawn in favour of the complainant, that is not properly considered by the court. The learned Magistrate has wrongly come to the conclusion that Ex.D.4 was issued towards the legally recoverable debt. The respondent has not proved about the liability and about existence of debt. The admissions given in the course of cross-examination by the PW-1 has not been properly considered by the court. Under these circumstances, the appellant counsel prays to allow the appeal and to set aside the judgment passed by the learned Trail Court. Hence, prayed for allowing the appeal.
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6. The appellant counsel has filed written argument and the respondent counsel has submitted his argument before the court.
7. Inview of the rival contention taken by both the parties and by re-appreciating and reassessing the evidence on record adduced by both the parties and the contention taken by both the parties, now the following points are arose for consideration;
1. Whether the appellant proves that there was no existing liability as on the date of issue of cheque?
2. Whether the appellant has rebutted the presumption drawn under Section 139 of N.I. Act?
3. Whether the judgment passed by the trial court is erroneous and calls for interference by this court?
4. What Order?
8. Inview of the written arguments submitted by the appellant counsel and arguments canvassed by the learned respondent counsel, my answer to the above points are as follows;
Point No.1 to 3 : In the Negative, Point No.4 : As per the final order for the following:
7Crl.A. No.871/2018 REASONS
9. Point No.1:- Now, a specific contention has been taken by the appellant in this appeal and as well as before the trial court that there was no existing legally recoverable debt and the one cheque which is presented by the complainant for encashment, was given for a different transaction wherein the complainant and the accused are having series of transactions and for earlier transaction this cheque was issued and even though there is not liability on behalf of the accused and there was no issue of cheque as contended by the complainant the learned Magistrate has wrongly held that there exists a legally recoverable debt and he has also wrongly drawn the presumption under section 139 of NI Act holding that the cheque was issued for a legally recoverable debt. Further it is contended in the written arguments that there is a specific admission given by the PW-1 in the course of cross-examination that there is a transaction between the complainant and the accused on earlier occasion also and the accused has borrowed the money from the complainant on various occasions and repaid the amount. But the cheque which was issued towards the other liability has been mis-utilized by the complainant.
10. The learned appellant counsel has also submitted in the written argument that though a specific contention has been taken by the complainant that the interest has been 8 Crl.A. No.871/2018 paid to the loan and it is admitted fact in the course of cross- examination that the cheque was issued for interest purpose under such circumstances the question of considering the fact that there exists a legally recoverable debt is of no consequence. Accordingly, the learned appellant counsel has contended that the point No.1 has to be answered to affirmative.
11. The learned Respondent counsel has vehemently contended in the argument that now it is to be specifically noted though lengthy cross-examination has been made to the PW-1, but nothing has been elicited from the mouth of PW-1 to disbelieve the case of the complainant. Further, the Ex.P.37 clearly establishes about the payment made by the complainant through cheque. Now Ex.P.36 also establishes the fact that there was a Joint Development Agreement. Now, it is to be specifically noted no where in the cross- examination either DW-1 or DW-2 has specifically denied the cheque was not belonging to the accused. On the other hand, they have specifically admitted about the cheque is belonging to the accused.
12. Now it is to be specifically noted Ex.P.2 clearly establishes about the liability of the accused because no where Ex.P.2 has been denied by the accused, either by way 9 Crl.A. No.871/2018 of cross-examination or by way of defence evidence. Now it is also not in dispute according to Ex.P.32 and Ex.P.34 they are the Directors of the company and they are the authorized persons to sign the cheque and accordingly they have issued the cheque. Under such circumstances, the learned respondent counsel has vehemently contended that the respondent has established the existence of a legally recoverable debt and by looking into the cross-examination portion of DW-2 it is clearly established that there exists a liability and hence he contended that point No.1 has to be answered in negative.
13. It is to be specifically noted though the specific contention has been taken by the accused with regard to the non issue of cheque, but as rightly contended by the respondent counsel no where the accused has denied the fact of the cheque is belonging to his account and cheque is signed by the accused persons and the accused are also authorized persons to sign the document.
14. Now in the cross-examination portion the accused has contended that Ex.P.2 which is a on demand promissory note which was executed blank document in favour of Prakash Gera and that has been mis-utilized. But inorder to establish the fact that he was having a transaction with 10 Crl.A. No.871/2018 Prakash Gera or the amount which has been borrowed from Prakash Gera has been paid by the accused, no material is placed on record. Further, it is to be specifically noted even though the accused has specifically took up a contention that he has repaid the entire amount but to corroborate the fact no document has been produced. Now it has to be specifically noted it is not in dispute the cheque was dishonoured for insufficient funds. Though a specific contention has been taken by the accused that no notice has been served, but it is to be specifically noted the Ex.P.22, Ex.P.24, 26 and 27 clearly establishes the fact that the accused are the authorized persons in the company to issue the cheque and sign the cheque and also to make payment. Now as rightly contended by the respondent counsel, a account opening form will also establishes the signature of the accused and the address mentioned in the notice.
15. Now Ex.P.14 to 20 clearly establishes about the fact of service of notice though it has been denied stating that he was not having a address in No.73 Millar Road, hence notice was not served on the accused. But as rightly contended by the respondent counsel under Section 27 of General Clauses Act 1897, it is specifically held that - 'When a Registered Post Acknowledgment Due has been sent through post and acknowledgment has been received it has to be considered as a deemed service', until the contrary is proved by the person 11 Crl.A. No.871/2018 who denies the service of notice. Now it is not in dispute, because in the course of cross-examination of DW-1 he has specifically admitted about the mentioning of address of Pattandur Agrahara for opening of bank account and according to the decision reported in N.Parameshwaran Unni V/s. G.Kannan wherein the Hon'ble Apex Court has specifically held that - Whenever the notice has been sent to the correct address returned as intimation delivered or not claimed, it will have to be considered as a service of notice'. When a notice is issued to the address and acknowledgment has been served it is to be considered as service held sufficient.
16. Now when the complainant has established the issue of cheque dishonour of cheque for insufficient funds and issue of notice and by producing Ex.P.14 to 20 the service of notice is also established then the burden shifts on the accused to establish the fact that the address mentioned in the notice was not the address where the accused was carrying the business. But by specific admission given in the course of cross-examination by DW-1 and 2 and by producing the corroborative documents such as account opening form and other relevant document such as Ex.P.32 and Ex.P.34 clearly establishes the fact that the notice was issued to the correct address and it was served on the accused and compliance of Section 138(a)(b) of N.I. Act has 12 Crl.A. No.871/2018 been made by the complainant and the law mandates to draw the presumption under Section 139 of N.I. Act in favour of the complainant holding that the cheque was issued for a legally recoverable debt and he has also established the existence of a legally recoverable debt and in the presence of Ex.P.2 where in it is admitted that it was given blank and it is signed by the accused even under Section 118 of N.I. Act and also the presumption can be drawn that the document was duly executed and consideration was also passed. Further, the amount was paid through the cheque which is corroborated by Ex.P.37 in my opinion when there is no contrary evidence adduced by the accused with regard to the non existing of liability though he has examined DW-1 and 2 and got marked document Ex.D.1 to Ex.D.13, but he has failed to establish the non existing of a legally recoverable debt. Hence, I have no hesitation to answer Point No.1 in the negative.
17. POINT No.2:- Now this is a point to be proved by the accused that is appellant. Because it is a well established principle of law that when a initial burden of discharging the existence of a legally recoverable debt has been established by the complainant and when the complainant has established about the existence of a legally recoverable debt and issue of cheque and compliance of Section 138(A)(b) of N.I. Act, the burden shifts on the accused to rebut that 13 Crl.A. No.871/2018 presumption and he has to rebut that presumption by placing a cogent and specific evidence. Now the appellant counsel in the written argument and as well as in the appeal memorandum has vehemently contended that by examining DW-1 and 2, the accused has established the rebuttable evidence and he has been able to establish his defence in such a way that in all probability the case of the complainant is not acceptable one. He has further contended in the appeal memorandum that though the complainant has specifically contended in the complaint that the accused has issued the cheque, but DW-1 and 2 evidence will clearly establishes about the execution of On Demand Promissory Note in favour of one Prakash Gera and it is also admitted fact by PW-1 in the course of cross-examination that there was various transactions between the complainant and the accused and for all these transactions the cheques were issued to the complainant and when such a fact has been admitted by PW- 1 it is clearly established that the presumption drawn in favour of the complainant has been successfully rebutted by the accused according to the written argument submitted by the appellant counsel.
18. Now on the contrary the learned Respondent Counsel has vehemently contended that now according to Section 104 and 106 of Indian Evidence Act and when the initial burden of proving the existence of a legally recoverable 14 Crl.A. No.871/2018 debt has been discharged by the complainant, then the burden shifts on the accused to rebut that presumption. Though DW-1 and 2 have been examined to prove his defence, but the evidence of DW-1 and 2 will not inspire any confidence to consider the fact of rebutting the presumption. On the other hand, the specific admissions given in the course of cross-examination of DW-1 and 2 will clearly corroborates the case of the respondent with regard to the address of the accused, capacity of the accused and the liability of the accused and when it is coupled with the documents Ex.P.37, 22, 24, 26 and 27 the question of considering the fact that the accused has rebutted the presumption drawn in favour of the complainant is of no consequence. Hence, he contended that the point No.2 has to be answered in negative.
19. Now, it is to be specifically noted, according to the contention of the accused, the DW-1 and 2 have been examined to establish the fact of his defence and he got marked document Ex.D.1 to Ex.D.13. But now it is to be specifically noted in the course of cross-examination of DW-1 and 2, he has specifically admitted that they are the Directors of the Company and except these two persons there are no other persons having no right in the company. The 2 nd accused is the Director and DW-2 who is an accused No.3 is the Managing director of the company and they are the 15 Crl.A. No.871/2018 persons having authority to issue the cheque and sign the cheque. Now though the specific contention has been taken that Ex.P.2 was executed in favour of Prakash Gere and the cheque was also issued to him as a security purpose and it is also admitted fact that there was a series of transaction for which the cheque was issued. In such a circumstances, the question of considering the fact that the accused has rebutted the presumption is of no consequence. According to the decision reported in ILR 2018 SC 3601 D.P.Murugan V/s. Rajan wherein the Hon'ble Apex Court has specifically held that -
"When the accused has taken a defence that cheque was issued for security and there was no action for return of the cheque for a long period same will have to be considered as unnatural".
20. When a cheque has been issued as a security for earlier transaction and even after completion of earlier transaction if he has not taken any action for recovery of the cheque or for return of the cheque, then it creates doubt with regard to the case of the accused and such conduct will gives rise to draw an inference for non considering the defence of the accused is not a probable one. Because it is also well established principle of law that according to the decision 16 Crl.A. No.871/2018 reported in Crl.A. No.1545/2019 Uttam Ram vs Devinder Singh Hudan and another wherein the Hon'ble Apex Court has been specifically held that the accused has two options (i) he can either show the consideration and debt did not exist or (ii) that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. The Hon'ble Apex Court has specifically held that the defence taken by the accused must be in the form of acceptable defence for a ordinary prudent man or in another way in all probability the accused has to establish that the case of the complainant cannot be believed.
21. But where as in this case though DW-1 and 2 have been examined and Pw-1 has cross-examined in length nothing has been elicited from the mouth of PW-1 during the course of cross-examination to disbelieve the version of the complainant or the evidence of DW-1 and 2 will establish the fact that the case of the complainant cannot be believable one. Further, though a specific defence has been taken by the accused that is not established convincingly before the court. Under such circumstances, according to the decision reported in Kishan Rao V/s. Shankare Gowda and in Crl. A. No.508 of 2019 wherein the Hon'ble Apex Court has specifically held that - "Unless and until the accused has successfully rebutted the presumption drawn in favour of the 17 Crl.A. No.871/2018 complainant by a cogent and specific evidence, the question of passing of acquittal does not arise at all". By virtue of the principles laid down in the above said decision it is the burden on the accused to rebut the presumption drawn in favour of the complainant. The Hon'ble Apex Court has held in the following fashion. Unless until the accused has successfully rebutted the presumption by adducing the cogent and specific evidence to establish his defence the question of considering the fact that the accused has rebutted the presumption drawn in favour of the complainant is of no consequence. Under such circumstances I have no hesitation to answer Point No.2 in the negative.
22. POINT No.3:- Now, the specific contention has been taken by the appellant in the written argument that the evidence of Power of Attorney Holder produced in this case is not a proper and unreliable. It is also contended that though income tax returns mentioned about the accused and complainant transaction that is also not produced. The power of Attorney produced while filing the complaint and in the sworn statement, has stated that he is well versed with the facts of the case, but later on the person who has filed affidavit by way of examination in chief has admitted in the course of cross-examination that the Power of Attorney Holder was not having any knowledge with regard to the transaction which clearly disprove the case of the 18 Crl.A. No.871/2018 complainant. Even in the absence of accused defence evidence. Hence, he contended that the appeal is liable to be allowed.
23. Further, it is also contended in the written argument that though the accused No.5 is not a signatory to the cheque he has been made as a party and Ex.D.4 clearly indicated that the cheque was issued towards another transaction of Rs.25 Lakhs wherein the repayment schedule is established by the evidence of DW-1 and 2. hence, appeal is to be allowed and all these facts have not been considered by the trial court. Hence, appeal is to be allowed.
24. On the other hand the respondent counsel has vehemently contended that Ex.P.34 clearly establishes about the Board Resolution and authorizes a person to give evidence. Now the cross-examination of PW-1 about admitting the fact that Power of Attorney holder is not having knowledge about the transaction is only a stray admission and merely on the basis of stray admission in a case the other corroborative documents and other corroborative evidence which is produced by the complainant cannot be disregarded and more particularly he has contended that when the complainant has established by way of documentary evidence about the liability the question of 19 Crl.A. No.871/2018 considering the stray admission is a fatal to the complainant case is of no consequence and in such a circumstances the question of allowing the appeal does not arise at all. Hence, he prayed for answering the Point No.3 in the negative.
25. Now it is to be specifically noted as rightly contended by the respondent counsel there are corroborative documents produced by the complainant to establish his case and as well as the facts which have been stated by the complainant and inorder to disprove the defence taken by the accused also the complainant has produced the documents. Now as rightly contended by the respondent counsel when there are corroborative documentary evidence with regard to the liability of the accused mere stray admission given by PW-1 in the course of cross-examination loses its importance for not considering the case of the complainant. Further, it is also to be noted inorder to allow the appeal or inorder to consider the case of the accused it has become necessary to produce the cogent and specific evidence by the accused with regard to the rebutting of presumption and he must establish in such a way that the trial court has wrongly appreciated the materials produced on record and not properly consider the evidence on record and there by come to a wrong conclusion. But inorder to establish such a fact no specific material is placed on record by the appellant.
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26. On the other hand as a appellate court I have gone through the judgment passed by the learned trial judge and I have also gone through the evidence of respective parties and by re-appreciating and re-assessing the evidence on record in my opinion also the respondent has successfully established his case before the trial court and the accused has miserably failed to establish his defence before the trial court and even in the appellate court also the appellant has miserably failed to establish the specific fact that the trial court has committed an error while coming to the conclusion with regard to the offence punishable under Section 138 of N.I. Act.
27. On the other hand, by reassessing and by re- appreciating the evidence on record and by proper analyzing the judgment passed by the learned trial judge I am of the opinion that that the finding given by the trial court is absolutely in accordance with law and the learned trial judge has properly considered all the relevant facts, circumstances and evidence on record and come to the proper conclusion with regard to the commission of the offence under Section 138 of N.I. Act. In the same way I have also come to a specific opinion with regard to the commission of the offence under Section 138 of N.I. Act and holding that the accused has 21 Crl.A. No.871/2018 committed the offence punishable under Section 138 of N.I Act. As there is a specific proof of existence of a legally recoverable debt, issue of cheque, dishonour of cheque and proper placing of materials on record, to consider the case of the complainant and the accused has miserably failed to place sufficient material to draw an interference in favour of the accused holding that the accused has established the fact about non consideration of material facts by the trial court.
28. In such a circumstances as a appellate court I have also concurred with the opinion of the learned trial judge the question of allowing the appeal or setting aside the judgment of the trial court is of no consequence and in my opinion the appellant has miserably failed to establish the grounds urged in the appeal memorandum to allow the appeal. Under such circumstances, I have no hesitation to answer Point No.3 in the negative.
29. Point No.4:- Having regard to my above observations and findings on point No.1 to 3, I proceed to pass the following:-
ORDER The appeal preferred by the appellant/accused under Sec.374(3) of Cr.P.C is hereby dismissed as no merits.22
Crl.A. No.871/2018 Consequently, the judgment and conviction order passed by the trial Court in C.C. No.16123/2010 dated 21.04.2018 under the appeal is hereby confirmed.
Send back the trial court record with the copy of this judgment to the Court below forthwith.
(Dictated to the stenographer on the computer, corrected and then pronounced by me in the open Court on this the 13th day of August, 2021) .
(S.R.MANIKYA) LXI Addl. City Civil & Sessions Judge, Bangalore City.
23 Crl.A. No.871/2018 Judgment pronounced in the Open Court (vide separate order) ORDER The appeal preferred by the appellant/accused under Sec.374(3) of Cr.P.C is hereby dismissed as no merits.
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Crl.A. No.871/2018
Consequently, the judgment
and conviction order passed by
the trial Court in C.C.
No.16123/2010 dated
21.04.2018 under the appeal is
hereby confirmed.
Send back the trial court record
with the copy of this judgment to
the Court below forthwith.
LXI Addl. City Civil & Sessions Judge,
Bengaluru City.
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Crl.A. No.871/2018