Bangalore District Court
Sri. Sharath Kumar vs Fathi Raj R on 4 April, 2018
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 4th day of April, 2018
Present: Smt. Saraswathi.K.N, B.A.L., LL.M.,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.2041/2017
Complainant : SRI. SHARATH KUMAR,
S/o. Sampa,
Aged about 25 Years,
R/at No.558, 30th B Cross,
Tilaknagar, Jayanagar,
Bengaluru - 560 041.
(Rep. by SRI. BASEER AHMED
KHAN, Adv.,)
- Vs -
Accused : 1. FATHI RAJ R,
No.102, 1st Floor,
4th Cross,
Church Street,
Shanthinagar,
Bengaluru - 560 027.
And
2. SHASHI REKHA,
No. 102, 1st Floor,
Church Street,
Shanthinagar,
Bengaluru - 560 027.
(Rep. by Sri. Narji A.Sadananda.,
Adv.,)
2 C.C. No. 2041/2017 J
Case instituted : 06/01/2017
Offence complained : U/s 138 of N.I. Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused No.1 and 2 are
acquitted
Date of order : 04/04/2018
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, the Accused No.1 is well known to him as a friend for the past two years and working at G.S. Financial Services Personal Finance Pvt., Ltd., Due to the said acquaintance, the Accused No.1 approached him during the first week of February 2016 and availed financial assistance of Rs.5,00,000/= for her domestic purpose and other commitments. He had promised to repay the said loan amount within two months at the end of April 2016.
3. The Complainant has further submitted that the Accused No.1 did not repay the loan amount as promised and later when the former requested him to repay the amount, in April 2016, the Accused No.1 assured the 3 C.C. No. 2041/2017 J former that he would repay the entire loan amount in May 2016 as he was expecting some amount in the next month.
4. The Complainant has further submitted that the Accused No.1 did not repay the loan amount and on his persistent approach and demand, the Accused No.1 had issued 3 post dated cheques bearing No.000023 dated 22.6.2016 for a sum of Rs.2,00,000/=, cheque bearing No. 000024 dated 17.6.2016 for a sum of Rs.1,50,000/= and No.000025 dated 23.6.2016 for a sum of Rs.1,50,000/=, drawn on the HDFC Bank, World Trade Centre Branch, Rajajinagar, Bengaluru, for a total sum of Rs.5,00,000/= which was duly signed by him in favor of the former. Further the Accused No.1 had also assured him that the said cheques would be honored on their presentation on the respective dates found on them.
5. The Complainant has further submitted that, the Accused No.1 intimated to him in the second week of June 2016 that still the funds that were expected by him were not yet got and requested him to present the above said three cheques after three months. Thereafter the Accused No.1 intimated the former in the second week of September that the funds which were expected were not yet got so and hence he requested him to present only one 4 C.C. No. 2041/2017 J cheque bearing No.000025 dated 23.6.2016 for a sum of Rs.1,50,000/=. As per the assurance of the Accused No.1 when the said cheque was presented for encashment, it returned dishonored for the reason "Instrument Outdated/Stale" vide Bank Endorsement dated 26.9.2016.
6. The Complainant has further submitted that, thereafter when he approached the Accused No.1 and informed about the dishonor of the said cheque and demanded for the repayment of the entire loan amount, she expressed her financial problems and promised to repay the said amount within few days. But she failed to repay the amount as promised by her and hence the former was constrained to issue a legal notice to the Accused No.1 on 7.10.2016.
7. The Complainant has further submitted that, the legal notice sent to the Accused No.1 through RPAD came to be duly served on her on 00.00.2016. After the receipt of the said legal notice, the Accused No.1 along with her husband i.e., the Accused No.2 herein met the former and apologized and accepted their guilt and expressed their financial problems to him stating that they did not have sufficient funds and that they were ready to repay the said amount to him. At that time, the Accused No.2 issued a cheque bearing No.201186 for a sum of 5 C.C. No. 2041/2017 J Rs.1,80,000/= dated 8.11.2016 drawn on the Guardian Souharda Sahakari Bank Niyamitha, Infantry Road Branch, Bengaluru and both the Accused promised to pay the remaining amount of Rs.3,20,000/= as soon as they got the amount.
8. The Complainant has stated that as per the instructions of the Accused No.2, when he presented the said cheque for encashment through his banker, the same came to be returned dishonored as "Funds Insufficient"
vide Bank Endorsement dated 12.11.2016. Hence left with no other alternative, he got issued a legal notice to both the Accused calling upon them to pay the cheque amount to him within 15 days from the date of the receipt of the said legal notice. Though the said legal notice has been duly served upon the Accused, they have neither replied nor have they paid the cheques amount to him.
9. The Complainant submits that, the dishonour of the cheques by the Accused has been malafide, intentional and deliberate. Feeling aggrieved by the conduct of the Accused, he has filed the present complaint praying that the Accused be summoned, tried and punished in accordance with Sec.138 of the Negotiable Instruments Act.
6 C.C. No. 2041/2017 J10. The Complainant has led his pre-summoning evidence on 17.1.2017. He is examined as C.W.1 and he has filed his affidavit in lieu of his sworn statement. Prima-facie case has been made out against the Accused No.1 and 2 and they have been summoned vide the order of the same date.
11. In support of his oral evidence, C.W.1 has relied upon the following documentary evidence:-
Ex.P.1 is the cheque, Ex.P1(a) is the signature identified by P.W.1 as that of the Accused No.1, Ex.P.2 is the Bank Memo, Ex.P.3 is the cheque dated: 08/11/2016, in which Ex.P.3(a) is the signature identified by P.W.1 as that of the Accused No.2, Ex.P.4 is the office copy of the Legal Notice and Ex.P.5 is the Postal Receipt.
12. The Accused No.1 and 2 have appeared before the Court on 12.7.2017. They have been enlarged on bail and the substance of the accusation has been read over to them, to which they have pleaded not guilty and have claimed the trial.
13. As per the direction of the Hon'ble Apex Court in the decision of Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the Accused, as the Accused intended to set 7 C.C. No. 2041/2017 J out their defence, the case came to be posted for the cross-examination of the Complainant.
14. The statement of the Accused No.1 and 2 under Sec.313 of the Cr.P.C., has been recorded. They have denied the incriminating evidence found against them and have chosen not to lead their rebuttal evidence.
15. The learned counsel for the Complainant has addressed his arguments, during the course of which he has prayed for the conviction of the Accused on the ground that the Complainant has fulfilled the ingredients of Sec.138 of the N.I.Act. The Accused have failed to bring out a probable defence and as such they have failed to rebut the presumptions available in favour of the Complainant under Sec.118 and 139 of the N.I.Act. Accordingly he has prayed for the conviction of the Accused.
16. Per contra, the learned Defence Counsel has addressed his arguments during which he has prayed for the acquittal of the Accused on the ground that, the Accused No.2 maintains account with the HDFC Bank in respect of the cheque at Ex.C2, while the Accused No.1 in the Guardian Souharda Sahakari Bank in respect of the cheque at Ex.C1. However the marking of the said 8 C.C. No. 2041/2017 J cheques has been interchanged. Likewise the pleadings in the complaint are wrongly drafted.
17. It is also argued that there is no service of the legal notice on the Accused, which is admitted by the Complainant in his chief-examination affidavit. The legal notice is legally invalid because the amount claimed therein is Rs.5,00,000/=. Likewise the Complainant has failed to produce the legal notice dated 7.10.2016 said to have been issued by him to the Accused No.1. Therefore, it is argued that all the provisions of the N.I.Act have been violated by the Complainant and the Complainant has failed to prove his financial capacity before this court. As such there is no proof of the legally enforceable debt on the part of the Accused. Accordingly he has prayed for the acquittal of the Accused.
18. I have considered the submissions and perused the record carefully.
19. Sec.138 of the Negotiable Instruments Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence under Section 138 Negotiable Instruments Act are:-
(i) Drawing up of a cheque by the Accused towards the payment of the amount of money, for the 9 C.C. No. 2041/2017 J discharge, in whole or in part, of any debt or any other liability;
(ii) Return of the cheque by the bank as unpaid;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of the notice under the proviso (b) to Section 138.
The Explanation appended to the Section provides that, the "debt or other liability" for the purpose of this Section means a legally enforceable debt or other liability.
20. Apart from this, Sec.139 of the Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms:-
"It shall be presumed, unless the contrary is proved, that:-
The holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, of any debt or other liability".
21. Also, Sec. 118 of the Negotiable Instruments Act states, "Until the contrary is proved, the following presumptions shall be made:-
10 C.C. No. 2041/2017 J(a) That every Negotiable Instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
22. Thus, the Act clearly lays down the presumptions in favour of the Complainant with regard to the issuance of the cheque by the Accused, towards the discharge of his liability in favour of the Complainant.
23. Under the scheme of the Act, the onus is upon the Accused to rebut the presumptions in favour of the Complainant by raising a probable defence.
24. It is a well settled position of law that the defence of the Accused, if in the nature of a mere denial of the case of the Complainant will not be sufficient to hold it as a probable defence. The bare denial of the passing of consideration apparently does not appear to be any defence. Something which is probable must be brought on record for getting the benefit of shifting the onus of proof to the Complainant.
25. It is also a well settled position of law that, once the cheque is proved to be relating to the Account of the Accused and he accepts and admits the signature on the 11 C.C. No. 2041/2017 J said cheque, then the initial presumption as contemplated under Sec. 139 of the N.I.Act has to be raised by the courts in favour of the Complainant. The presumption referred to in Sec.139 of the N.I.Act is a mandatory presumption and not a 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 circumstance. But the fact remains that a mere plausible explanation is not expected from the Accused and it must be more than a plausible explanation by way of rebuttal evidence. The defence raised by the Accused by way of rebuttal evidence must be probable and capable of being accepted by the court.
26. No doubt, the initial mandatory statutory presumptions under Sec.118 and 139 of the N.I.Act are in favour of the Complainant. However they are rebuttal presumptions and the Accused is expected to rebut the presumptions by raising a probable defence.
27. Such being the legal position, it would be pertinent to refer to the defences raised by the Accused to rebut the presumptions in favour of the Complainant in this case.
12 C.C. No. 2041/2017 J28. Admittedly, there is no dispute with regard to the fact that the parties are well acquainted with each other and that the cheques in dispute belong to the Accused with their signatures on them.
29. However, as rightly pointed out by the learned defence counsel during the course of his arguments the legal notice said to have been got issued by the Complainant to the Accused is not legally valid, since the claim amount in Para No.4 of the legal notice at Ex.C5 is Rs.5,00,000/= which is the total loan amount alleged to have been lent by the Complainant to the Accused No.1 in February 2016. Whereas, as per the case of the Complainant his claim is on the basis of the cheque at Ex.C3 which is admittedly signed by the Accused No.1 only. In such circumstance when there is clear contradiction between the pleading and proof in the case of the Complainant, the entire case of the Complainant is liable to fail solely on this ground.
30. Moreover, as pointed by the learned defence counsel, apart from the legal notice being legally invalid, the complaint averments is also wrongly drafted, because through out the complaint, it is pleaded that the Complainant and the Accused No.1 were friends and they both were working at G.S.Financial Services Personal 13 C.C. No. 2041/2017 J Finance Ltd., and the Accused No.1 availed a loan of Rs.5,00,000/= from the Complainant in February 2016 and towards repayment of the said loan the Accused No.1 had issued her three cheques bearing No.000023, 000024 and 000025 for a total sum of Rs.1,50,000/= and admittedly the cheque bearing No.000025 which is at Ex.C1, upon presentation has returned dishonored as "INSTRUMENT OUT DATED/STALE" and though it is pleaded by the Complainant that the aforesaid three cheques were issued by the Accused No.1 to him, the cheque at Ex.C1, which is one among the said three cheques has been drawn by the Accused No.2 and not by the Accused No.1.
31. Likewise, though according to the Complainant, it is the Accused No.2, who has issued the cheque at Ex.C3 in his favour for Rs.1,80,000/=, on the basis of which, the present complaint is filed, it could be seen that the cheque at Ex.C3 is drawn on the Guardian Souharda Sahakari Bank Niyamitha by the Accused No.1 and not by the Accused No.2.
32. Moreover, as per the own admission of the Complainant though there was a legal notice caused to the Accused No.1 in respect of the cheque at Ex.C1, there is no legal proceedings initiated in respect of the said 14 C.C. No. 2041/2017 J cheque and on the contrary it is only after the cheque at Ex.C3 has returned dishonored as per Ex.C4 that the legal notice as per Ex.C5 has been caused by the Complainant to the Accused No.1 and 2. However, even in the said legal notice instead of claiming only the amount covered under the cheque at Ex.C3, the Complainant have claimed the total alleged loan amount of Rs.5,00,000/= thereby rendering his entire case ambiguous.
33. In this regard, it is pertinent to note that even during his cross-examination it is elicited from the Complainant that he has produced two cheques in the present case and he has filed this complaint against both the Accused on the basis of both the cheques. However, when as per the own admission of the Complainant the cheque at Ex.C1 was returned dishonored as "INSTURMENT OUT DATED/STALE" as per Ex.C2 and a legal notice was already caused to the Accused on the basis of the said cheque on 07/10/2016, there was no cause of action available to the Complainant to initiate this proceedings against the Accused on the basis of the said cheque.
34. Likewise, it is also elicited from the Complainant that the cheque at Ex.C1 does not belong to the Accused 15 C.C. No. 2041/2017 J No.1 and that it has not been signed by him and that the cheque at Ex.C3 does not belong to the Accused No.2 and that it has not been signed by her.
35. These admissions elicited from the Complainant are sufficient to come to the conclusion that the Complainant has miserably failed to come out with a case which could stand the test of the legal requirements and as such without even touching the merits of the case, it is sufficient to come to the conclusion that the case of the Complainant is liable to be dismissed in view of the discrepancy in the drafting of the complaint as well as the legal notice at Ex.C5 not having been legally valid. Therefore, on this sole ground the case of the Complainant is liable to be dismissed.
36. Even otherwise, considering the case on merits the Accused have denied the alleged loan transaction with the Complainant as claimed by the former. However, It is pertinent to note that though the Complainant has been cross-examined extensively with regard to his financial capacity, there is no cross-examination of the Complainant with regard to the source of the subject cheques in his possession. Therefore, it can be inferred that though the Complainant has failed to prove that he has lent Rs.5,00,000/= to the Accused as claimed by him, 16 C.C. No. 2041/2017 J the fact that the cheques belonging to the Accused are in his possession goes to show that there existed some transaction between the parties. However, this is not sufficient to lead to an inference that the case of the Complainant is proved merely because the cheques of the Accused are in his possession.
37. No doubt, the moment the Accused admit that the cheques in dispute belong to them with their signatures on them, the mandatory statutory presumptions U/sec. 118 and 139 of N.I. Act operate in favour of the Complainant. However, the said presumptions, being rebuttable in nature, the Accused are at liberty to adduce evidence which is sufficient to rebut the said presumptions. Moreover, when the Accused challenge the financial capacity of the Complainant, that factor also is sufficient to rebut the presumptions available in favour of the Complainant under the N.I. Act.
38. In this regard, it is pertinent to note that though the Complainant has claimed that he has lent Rs.5,00,000/= to Accused, during his cross-examination it is elicited from him that he could produce his Bank Statement to show that he had Rs.5,00,000/= with him in the year 2016 and that he could produce the documentary proof to prove the same. However, it is also 17 C.C. No. 2041/2017 J elicited from the Complainant that if he had any such documentary proof, he had no impediment to state about the same either in the legal notice or in the complaint or in his affidavit and that he has the documentary proof to show that the Accused have issued the subject cheques to him and that he has received the same from them.
39. Interestingly, till date except the subject cheques there is no other documentary proof produced by the Complainant to show that he had the requisite the source of funds with him at the relevant point of time so as to lend the same to the Accused, who are admittedly not his relatives. In such circumstance the claim of the Complainant that he has advanced a huge loan of Rs.5,00,000/= to the Accused without charging interest and without collecting any security documents from them is highly impossible to be believed.
40. Therefore, it could be seen that though the Accused have not explained the source of their cheques in the possession of the Complainant, before doubting the defence of the Accused, it is necessary for this court to keep in mind the fact that the Complainant has failed to discharge the initial burden of proving the existence of the legally payable debt by the Accused in his favour.
18 C.C. No. 2041/2017 J41. Therefore, even if it is considered by this court that the error in the drafting of the complaint as well as the affidavit of the Complainant need not be considered by this court technically, even on merits, the case of the Complainant is bound to fail since except his self serving testimony there is no cogent and reliable proof so as to hold that the case of the Complainant is proved beyond reasonable doubt. On the contrary it could be seen that the case of the Complainant suffers from serious doubts and in such circumstance the benefit of such doubt needs to be given to the Accused.
42. Moreover, the Accused have also taken up the technical defence of the non-service of the legal notice. In such circumstance the onus of proving the fact that the legal notice has been duly served upon them is shifted in favour of the Complainant. No doubt, under section 27 of the General Clauses Act when a notice is sent by registered post to the correct address of the addressee, then there is deemed service of the legal notice. However, in the present case as could be seen both in the complaint as well as in the affidavit filed by the Complainant it is stated that the legal notice sent through RPAD to the Accused No.1 and 2 is returned un-served on 17/12/2016 with a shara as "INSUFFICIENT ADDRESS" , returned to the sender. However, it could be seen that 19 C.C. No. 2041/2017 J except having produced the postal receipt as per Ex.C6, the Complainant has not produced either the un-served legal notice or any postal acknowledgment to show that the legal notice has been duly served upon the Accused.
43. In this regard, though in his cross-examination the Complainant has denied the suggestion that since he has not caused any legal notice to the Accused on 07/10/2016, it has not been possible for him to produce any postal acknowledgement before this court, the fact that remains is that when as per the complaint averments itself, the legal notice is returned with shara "INSUFFICIENT ADDRESS", the Complainant cannot avail the benefit of the presumptive service of the legal notice as per section 27 of the General Clauses Act.
44. It is further pertinent to note that it is elicited from the Complainant that as per the postal receipt at Ex.C6, the legal notice is sent only to the Accused No.2 and not to the Accused No.1. In such circumstance, it cannot be held that the mandatory compliance of section 138(b) of the N.I.Act has been fulfilled by the Complainant. This is also a fatal issue which results in the case of the Complainant being liable to be dismissed.
20 C.C. No. 2041/2017 J45. It is also important to note that there is also a serious omission on the part of the Complainant in not having pleaded about the details of the alleged loan transaction between him and the Accused either in the complaint or in his affidavits. Therefore this omission also supports the defence of the Accused.
46. Therefore, viewed from any angle, the case of the Complainant suffers from serious doubts and as such, I have no hesitation to hold that he has failed to discharge the existence of the legal payable debt by the Accused in his favour. Under such circumstances, as per the well settled principles of law, the benefit of the doubt needs to be given to the Accused and the case of the Complainant is bound to fail both on merits as well as on technicalities. Accordingly, I proceed to pass the following:-
ORDER By exercising the power conferred u/s 255(1) of Cr.P.C., the Accused No.1 and 2 are hereby acquitted of the offence punishable u/s 138 of the Negotiable Instruments Act.
Their bail bonds stand discharged.
The cash security of Rs.3,000/= each deposited by the Accused No.1 & 2 vide order dated 12.7.2017 is ordered to be refunded to them (if not lapsed or forfeited) after the expiry of the appeal period.
21 C.C. No. 2041/2017 J(Dictated to the Stenographer online, print out taken by her, verified, corrected and then pronounced by me in the open Court on this the 4th day of April, 2018).
(SARASWATHI.K.N), XVI ACMM., Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
PW.1 : Sharath Kumar;
2. List of documents exhibited on behalf of the Complainant:-
Ex.C-1 : Original cheque dated:23/06/2016; Ex.C-1(a) : Signature of the Accused No.1;
Ex.C-2 : Bank Memo; Ex.C-3 : Original Cheque dated: 08/11/2016; Ex.C-3(a) : Signature of the Accused No.2; Ex.C-4 : Bank Memo; Ex.C-5 : Office Copy of the Legal Notice; Ex.C-6 : Postal Receipt.
3. List of witness/s examined on behalf of the Accused:-
Nil -
4. List of documents exhibited on behalf of the Accused:-
Nil -
(SARASWATHI.K.N), XVI ACMM, Bengaluru City.22 C.C. No. 2041/2017 J
04/04/2018.
Judgment pronounced in the open court vide separate order.
ORDER By exercising the power conferred u/s 255(1) of Cr.P.C., the Accused No.1 and 2 are hereby acquitted of the offence punishable u/s 138 of the Negotiable Instruments Act.
Their bail bonds stand discharged.
The cash security of Rs.3,000/= each deposited by the Accused No.1 & 2 vide order dated 12.7.2017 is ordered to be refunded to them (if not lapsed or forfeited) after the expiry of the appeal period.
XVI ACMM, B'luru.