Bangalore District Court
M/S. Neogrowth Credit Pvt. Ltd vs Garden Green Deluxe on 1 March, 2023
1 C.C.NO.6938/2019
SCCH-10
KABC020311352019
BEFORE THE COURT OF XIV ADDITIONAL SCJ & ACMM,
MEMBER AND THE MOTOR ACCIDENT CLAIMS TRIBUNAL
(SCCH10) AT BENGALURU
DATED THIS THE 01st DAY OF MARCH 2023
PRESENT: Sri.Allappa.M.Badiger
B.A.L.L.B (Spl.)
XIV ADDL. SCJ & ACMM &,
MEMBER - MACT,
BENGALURU.
C.C No.6938/2019
COMPLAINANT : M/s. Neogrowth Credit Pvt. Ltd
Having its Registered office at
No.503, Tower 2B, One India
Bulls Centre, 841, S.B. Marg,
Mumbai400013
and Regional office at
No.14, Langford Avenue Building
3rd Floor, Richmond Circle,
Near Udupi Upachar,
Bangalore560027
Represented by its Power of
Attorney Holder
Mr.Raghavendra Rao G
(By Sri. S.B.G Advocate)
V/s
2 C.C.NO.6938/2019
SCCH-10
ACCUSED 1. Garden Green Deluxe
Represented by its proprietor
Mr.Danyananda Poojari
No.20/1 Old No.1Akatha
No.17/2,
Kaveri layout,
Sreenivagilu Begur hobli,
Bangalore560047
Karnataka, India
and also at
2.Mr.Danyananda Poojari
S/o Annaiah Pojari
J.R.Enclave, No.389.
Flot No.401, 4th floor, st Main
1st cross, 1st BL
Bangalore5600034,
Karnataka.
(By Sri.S.R.D. Advocate)
JUDGMENT
This is the complaint instituted by the complainant non banking finance company against the accused under section 200 of Cr.P.C. for the offence punishable under section 138 of Negotiable Instrument Act1881. 3 C.C.NO.6938/2019
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2. The averments of the complainant in brief is as follows:
The complainant is a company incorporated and registered under the provisions of Companies Act, 1956 and also registered with Reserve Bank of India as Non Banking Finance Company (NBFC) having its registered office at Mumbai and branch at Bengaluru. The complainant company is doing finance business to its customers. Further it is submitted by the complainant that, the second accused has informed to the complainant that, he is the authorized signatory to the first accused company and approached the complainant and requested for Loan. Accordingly, loan has been borrowed under loan application I.D.No.50000934. The accused became a chronic defaulter in repayment of loan amount and due a sum of Rs.2,01,600/. Further it is submitted by the complainant that, towards the repayment of the loan due amount, the accused had 4 C.C.NO.6938/2019 SCCH-10 issued a cheque bearing No.770670, dated 03102019 for a sum of Rs.2,01,600/ drawn on Karnataka Bank. The said cheque was presented by the complainant through its banker YES Bank, Kasturba Road Branch, Bengaluru, but the same has been returned with an endorsement as "Funds Insufficient" as per the bankers memo dated 14102019. Then, the complainant got issued a legal notice to the accused dated 05112019 demanding the payment of the cheque amount by RPAD and calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. But the said notice was returned unserved as Addressee left on 06112019. Therefore, the accused has committed an offence punishable U/Sec.138 and Sec.142 of Negotiable Instrument Act. Hence, the complainant prayed to punish the accused U/Sec.138 of N.I.Act and award compensation to the complainant. 5 C.C.NO.6938/2019
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3. After filing of the complaint, the cognizance of the offence was taken and registered criminal case against the accused and the summons was issued to the accused. Upon service of the summons, the accused has appeared before the court through his counsel and was enlarged on bail. Subsequently, plea was recorded and the substances of the accusation was read over and explained to him. He pleaded not guilty and claimed to be tried, then the case was posted for complainant evidence.
4. In order to prove the case, the G.P.A. holders of the complainant company got examined as PW1 and PW2 and got marked the documents as Ex.P.1 to Ex.P.11 respectively. Further, the Statement of the Accused U/Sec.313 of Cr.P.C was recorded and incriminating circumstances appeared in the evidence against the accused were read over to the accused and accused denied the all incriminating circumstance 6 C.C.NO.6938/2019 SCCH-10 appeared in the evidence. Then the case was set down for defence evidence. The accused has not lead oral evidence.
5. Heard the arguments from both sides. The complainant has relied the citations.
6. Now the points that would arise for my consideration are as follows:
1. Whether the complainant proves beyond all reasonable doubt that the accused No.2 had issued a cheque bearing No.770670 dated 03102019 for a sum of Rs.2,01,600/ drawn on Karnataka Bank, Koramangala extention, Bengaluru for discharge of legal debt and when the said cheque was presented to the Bank for encashment it was returned unpaid with remarks that "Funds Insufficient" and inspite of service of demand notice the accused has not paid the amount and thereby committed an offence punishable 7 C.C.NO.6938/2019 SCCH-10 under section 138 of Negotiable Instrument Act?
2. What order?
7. On the basis of the materials available on records, my finding to the above points as follows:
POINT NO.1: In the Affirmative POINT NO.2: As per the final order for the following:
REASONS
8. POINT NO.1: It is the case of the complainant that, the accused No.2 being a authorized signatory of the accused no.1 had availed the loan from the complainant under loan applicaiton I.D.No.50000934 and the accused failed to repay the loan amount, on request the accused No.2 has issued the cheque bearing No.770670 dated 3102019 for sum of Rs.2,01,600/ drawn on Karnataka Bank, for repayment of loan due amount. After presentation the cheque was dishonored. 8 C.C.NO.6938/2019
SCCH-10 Upon service of demand notice as per Sec.138 of N.I.Act the accused failed to pay the cheuqe amount. Therefore, the accused commited an offence under Section 138 of N.I.Act.
9. In order to substantiate the same, the G.P.A.Holder of the compalinant got examined as PW1 and got marked the doucments as Ex.P.1 to Ex.P.7a. Ex.P.1 is the cheque No.770670, Ex.P.1(a) is the signature of the accused, Ex.P.2 is the bank endorsement, ExP3 is the legal Notice, Ex.P.4 & 5 are the postal receipts, Ex.P.6 is the psotal acknowledgment, Ex.P.7 is the unserved RPAD cover and ExP7a is the copy of legal notice. The authorised representative of the complainant got examined as PW2 and produced the document as per ExP8 to 11. ExP8 is the authorisation letter, ExP9 is the loan application, ExP10 is the loan agreement and ExP11 is the account statement. 9 C.C.NO.6938/2019
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10. There is a presumption U/Sec.118 and 139 of Negotiable Instrument in favour of the holder of the Cheque as the cheque is issued for discharge of legal debt. The said presumption is rebuttable presumption. In this case, the defence of the accused is that, the accused has issued the cheque to the complainant at the time of loan as security purpose and complainant has misused the security cheque and filed false complaint. Therefore the accused is not liable to pay the cheque amount. The Pw2 admitted in his crossexamination that, he has not mentioned in legal notice when the disputed cheque was issued and also admitted that they have not mentioned total loan amount and payment made by the accused in legal notice and evidence, but the Pw2 stated that they have mentioned due amount. The Pw2 has denied suggestion made by the accused counsel that at the time of loan agreement the complainant collected the 10 blank cheques from the 10 C.C.NO.6938/2019 SCCH-10 accused including disputed cheque. The Pw2 has given evidence during the crossexamination that: "I have produced the account statement to show as on 03102019 there was due sum of Rs.2,01,600/. It is false to suggest that, there is no documents to show there is a due sum of Rs.2,01,600/ as on 03102019. It is true that, the account statement does not disclose the due amount of Rs.2,01,600/ as on 03102019."
In this case the complainant has produced the loan application as per Ex.P.9, loan agreement as per Ex.P.10 and account statement as per Ex.P.11. The Pw2 stated that Ex.P.11 does not discloses the due amount of Rs.2,01,600/ as on 03102019. On perusal of the account statement, it shows that, on 07022019 the amount of Rs.3,00,000/ was disbursed to the accused. The account statement as per Ex.P.11 discloses the transaction and the payment made via NACH and NACH 11 C.C.NO.6938/2019 SCCH-10 was returned and also NACH bounce charges. It is reflected in the through out account statement of the accused. The accused has not at all disputed the loan application, loan agreement except contending that the complainant has collected the 10 blank cheques as a security and same are misused by the complainant and filed false complaint. The accused contended that, the complainant also file another case at Chief Metropolitan Magistrate at Calcutta and produced the copy of the summons and complaint in Case No.CS2640/2020. The complainant has relied the decision of Sripathi Singh (since deceased) through his son Gaurav Singh V/s. The State of Jharkhand and another in Criminal Appeal Nos.12691270/2021 dated 28102021, wherein the Hon'ble Apex Court held that: "16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its 12 C.C.NO.6938/2019 SCCH-10 true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfillment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I.Act would flow."
In this case the accused contended that he had issued the cheques at the time of loan for security and 13 C.C.NO.6938/2019 SCCH-10 complainant has misused. Therefore the accused is not liable to pay the cheque amount. The accused has not disputed the loan avail from the complainant and issuance of cheque and signature thereon except contending that it is a security cheque. The accused nowhere contended that he has paid entire loan amount. It is the duty of the accused to rebute the presumption available U/Sec.118 and 139 of Negotiable Instrument Act. The complainant has produced the account statement as per Ex.P.11 to show the loan amount of Rs.3,00,000/ was disbursed to the accused and loan agreement was executed along with promissory note as per Ex.P.10. The accused has not shown or proved he has paid the loan availed from the complainant. Therefore though the accused contended that he has issued cheque for security. In view of the principle held in the above decision, though the cheque was issued for security, but it is matured for presentation and after 14 C.C.NO.6938/2019 SCCH-10 presentation it dishonor, the Sec.138 would attract. In this case the accused has not shown or proved he has paid the loan amount availed from the complainant. Therefore he was due to repay the loan due amount, certainly the cheque issued for security will get matured for presentation. The complainant has presented the cheque and it has been dishonored as per bank memo i.e., Ex.P.2. Therefore there is no probable defence by the accused to rebute the presumption available under section 138 of N.I.Act. Hence, I am of the opinion that, the complainant has proved that the accused has issued the cheque for payment of due amount and said cheque has been dishonored after presentation. Hence the accused has committed an offence and liable to be convicted for the offence punishable U/Sec.138 of N.I.Act. According, I answer the point No.1 in the affirmative.
15 C.C.NO.6938/2019
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11. Point no.2: The present case has been filed by the complainant against the accused for the offence punishable u/Sec.138 of N.I.Act and the complainant has proved by way of evidence that, the accused has issued a cheque for repayment of due. The said cheque has been dishonored and also proved that, the cheque is issued for legally enforceable debt. Hence, the accused is liable to be conviced. Hence, I proceed to pass the following:
ORDER Acting Under Section 255(2) of Cr.P.C the accused is hereby convicted for the offence pnishable U/Sec.138 of Negotiable Instrument Act.
Further the accused is hereby sentenced to pay fine sum of Rs.2,06,600/, in case of default he shall undergo simple imprisonment for a period of 6 months.
The entire fine amount is recover from the accused the amount of Rs.2,01,600/ shall be paid to the complainant for the compensation 16 C.C.NO.6938/2019 SCCH-10 under Section 357 of Cr.P.C. the remaining amount of Rs.5,000/ shall be appropriated to the government.
Office to furnish the free copy of this judgment to accused immediately. The bail bond shall stand cancelled. (Dictated to the stenographer directly on computer, typed by her and corrected by me and then pronounced in the open court on 01st day of March 2023) (ALLAPPA. M. BADIGER) XIV ADDL.SMALL CAUSES JUDGE & ACMM, BENGALURU.
::A N N E X U R E::
LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT: P.W.1 : Raghavendra Rao. G P.W.2 : Vishwanatha. M.T. LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT: Ex.P.1 : Cheque bearing no.770670 Ex.P.1(a) : Signature of the accused Ex.P.2 : Bank endorsement Ex.P.3 : Legal notice 17 C.C.NO.6938/2019 SCCH-10 Ex.P.4 & 5 : 2 Postal receipts Ex.P.6 : Postal acknowledgment Ex.P.7 : Unserved RPAD cover Ex.P.7a : Copy of legal notice Ex.P.8 : Authorisation letter Ex.P.9 : Loan application Ex.P.10 : Loan agreement Ex.P.11 : Account statement LIST OF WITNESSES EXAMINED ON BEHALF OF THE ACCUSED: None LIST OF DOCUMENTS MARKED ON BEHALF OF THE ACCUSED: Nil XIV ADDL.SMALL CAUSES JUDGE & ACMM.