C.C.No.149 of 20141 J.M.F.C, Court, Gajapathinagaram
IN THE COURT OF THE JUDICIAL MAGISTRATE OF I CLASS AT GAJAPATHINAGARAM.
Present: Sri A. Krishna Prasad,
Judicial Magistrate of I Class,
Gajapathinagaram.
Monday this the 1st day of May, 2017.
CALENDAR CASE No.149 OF 2014
Between: Mandala Laxmu Naidu, S/o Venkatalu, 40 years Hindu, Tumkapalli Village, Gajapathinagaram Mandal, Vizianagaram District … Complainant.
A n d:
Bali Manganadha Sankar Sekhar Rao, S/o late Tatinaidu 43 years, Hindu, R/o Mudduru Village, Bondapalli Mandal, Vizianagaram District … Accused.
This Case coming on 25.04.2017 for final hearing before me in the presence of Sri R Srinivasa Naidu, learned counsel for the complainant and of Sri T Mutyalanaidu, learned counsel for the accused and having stood over for consideration till this day, the Court delivered the following
J U D G M E N T
1.The private complaint is filed under Sec. 200 Cr.P.C by the complainant by name M Laxmu Naidu against the accused B Manganadha Sankar Sekhar Rao for the offence punishable under Sec. 138 of NI Act alleging as follows:
2.The brief averments of the complaint is that accused borrowed an amount of Rs.2,30,000/ (Rupees Two Lakhs Thirty Thousand Only ) for his business purpose from the complainant on 17.04.2012, in evidence thereof, accused executed two promissory notes on the even date one for Rs.1,00,000/(Rupees One Lakh Only) and the other for Rs.1,30,000/ (Rupees One Lakh Thirty Thousand Only) respectively agreeing to repay the same together with interest @ 24% P.A. Subsequently, the accused failed to repay the said amounts to the complainant in spite of several demands made by him. Finally, accused issued two cheques on 07.06.2014 bearing No.s 1. 932109 for rupees One Lakh and 2. 932110 for rupees One Lakh Thirty Thousand in favour of complainant, both are drawn on Andhra Pradesh Grameena Vikas Bank, Bondapalli Branch. It is further averred that complainant presented the said cheques for collection on the same day at bank of accused. But the bank authorities returned the said cheques to the complainant on the same day with an endorsement that, Funds In sufficient. As such, the said cheques were dishonoured. The accused issued the said cheques knowing fully well that, there are no sufficient funds in his account. Hence, he is liable to be prosecuted under the provisions of N I Act. Hence, the complainant got issued legal notice through registered post with acknowledgement due on 16.06.2014. The accused received the said notice and got issued reply notice with all false allegations and also lodged a false complaint against the complainant before Station House Officer, Gajapathinagaram for the offences punishable under Sec. 420 IPC and the same was registered as a case in Crime NO. 91/2014 with a malafied intention to grab away the amounts due to the complainant. The
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accused knowing fully well about the dishonour of the above said cheques and though he received the notice he did not choose to pay any amounts to the complainant. Hence ,complainant filed this complaint.
3.On appearance of the complainant before this court, sworn affidavit was filed and recorded. Cognizance was taken for the offence under Sec. 138 of NI Act against the accused.
4.On appearance of the accused, copies of case documents were furnished to the accused as contemplated U/Sec.207 Cr.P.C.,
5.The accused was examined under section 251 Cr.P.C by explaining the substance of the acquisition for the offences under Sec. 138 of NIAct. The accused denied the same, pleaded not guilty and claimed to be tried.
6. Complainant in support of his case, he himself is examined as PW1 and got examined two third parties to the proceedings as Pws 2 and 3. Complainant also got marked Ex.P1 to P10 documents. After completion of the complainant side evidence, the accused was examined under Sec. 313 Cr.P.C explaining the incriminating circumstances against him in the evidence of the prosecution witnesses. The accused denied the same and stated that, he did not commit any offence and he reported he is having defence evidence.
7.On behalf of the accused, accused himself is examined as DW1 after obtaining permission U/s. 315 of Cr.P.C and also got examined two third parties to the proceedings as Dws 2 and 3. Ex.D1 and D2 are got marked on behalf of the accused.
8.Heard the arguments of learned counsel for the complainant as well as learned counsel for the accused and perused the record and written arguments filed by counsel for accused.
9. Now the points that arises for consideration are: 1.Whether the complainant has established that, Ex.P3 and P4 cheques were issued by the accused to him towards legally enforceable debt ?
2.Whether Ex.P3 and P4 cheques were dishonoured due to funds sufficient in the account of the accused?
3.Whether the complainant has established the guilt of the accused for the offences punishable under Sec. 138 of N I Act, beyond all reasonable doubt ?
Point No.1:Whether the complainant has established that, Ex.P3 and P4 cheques were issued by the accused to him towards legally enforceable debt ?
10. In order to prove the case of the complainant, he himself examined as PW1 and got examined scribe of Ex.P1 and P2 as PW2, and one of the attestors of Ex.P1 and P2 as PW3. Complainant got exhibited Ex.P1 to P10 documents.
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Ex.P1 is the certified copy of promissory note Dt. 17.04.2012, Ex.P2 is the Certified copy of promissory note Dt.17.04.2012, Ex.P3 is cheque bearing No. 932109 Dt. 07.06.2014, Ex.P4 is the cheque bearing No. 932110, Dt. 07.06.2014, Ex.P5 is the cheque return memo issued by the Andhra Pradesh Grameena Vikas Bank, Bondapalli Dt. 07.06.2014, Ex.P6 is the Office copy of legal notice Dt. 16.06.2014, Ex.P7 is the Postal Acknowledgement Dt. 19.06.2015, Ex.P8 is the reply notice Dt. 29.06.2014, Ex.P9 is deposition of one B. Jagadeeswara Rao in CC 297/2014, Ex.P10 is the deposition of one S Srinivasa Rao in CC 297/2014.
11. As seen from the evidence of PW.1 during his chief examination, he stated that, the accused borrowed an amount of Rs.2,30,000/ on 17.04.2012 for his business purpose and executed two promissory notes, i.e., one for Rs.1,00,000/ under Ex.P1 and the other is for Rs.1,30,000/ under Ex.P2, agreeing to repay the same together with interest @ 24% P.A. Subsequently, the accused failed to repay the said amounts to him in spite of his repeated demands. Finally, the accused issued two cheques on 07.06.2014, one is for rupees One lakh under Ex.P3 and another for rupees One lakh thirty thousand under Ex.P4. Both the cheques are drawn on Andhra Pradesh Grameena Vikas Bank, Bondapalli branch. PW1 further stated that, he presented the said cheques for encashment in the bank of accused on the same day and the same were dishonored with an endorsement that “FUNDS INSUFFICIENT” and the accused bank issued cheque return memo to that effect. Ex.P5 is the cheque return memo Dt. 07.06.2014. PW1 further stated that, since Ex.P.3 and Ex.P.4 were dishonored for insufficient funds, he got issued legal notice to the accused under Ex.P6 on 16.06.2014 within the stipulated time. On receipt of the Ex.P6 notice, accused got issued Ex.P8 reply notice with false allegations and lodged false complaint against him before Station House Officer, Gajapathinagaram under Sec. 420 of IPC in Crime NO. 91/2014 with intend to grab away amounts under Ex.P1 and P2 which were due to him. Accused knowing fully well about the dishonor of the cheques and in spite of receipt of Ex.P.6 notice, he did not choose to pay any amount to the PW1.
12.PW.2, who is scribe of Ex.P1 and P2 stated in his evidence that, he scribed Ex.P1 and P2 at the time of borrowing amounts by accused from complainant on 17.04.2012. He also stated that, at the time of Ex.P1 and Ex.P2, himself and attestors thereon, by name B. Rama Gopala Naidu and E.Kishore were present. PW2 further stated that, accused scribed his signature across the revenue stamps on the above promissory notes in their presence after receiving cash consideration from the complainant. PW3, one of the attestors of Ex.P1 and Ex.P2 stated in his evidence by corroborating the evidence of PW2 that, he attested Ex.P1 and Ex.P2 and in his presence, accused received amounts under Ex.P1 and P2 from complainant and accused put his signature on the same at the time of receiving cash consideration.
13.During the cross examination of PW1, he denied the suggestion that Ex.P3 and P4 were not written by the accused. PW1 categorically stated that, Ex.P3 and P4 brought by the
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accused to him already filled by some one. But he did not fille the blanks in Ex.P3 and P4. PW1 stated that, accused issued three cheques to him but he has not filed the another cheque in this case. PW1 denied the suggestion that, since he lost the said cheque, he has not mentioned the same in this compliant. He further denied that he was running chit business and obtaining three cheques from the accused in token of bidding of chit amount. He stated that, accused filed one criminal case against him alleging that, he is running chit business. PW1 stated that, he lent Ex.P1 and P2 amounts to the accused at Sub Treasury Office, Gajapathinagaram. He also stated that, accused issued the Ex.P3 and P4 cheques at his house. He denied that Ex.P1 and P2 are not drafted by one K. Tirupathi Naidu. He also denied the suggestion that, he fabricated Ex.P1 and P4 for the purpose of this case, and he is deposing false. He also denied the suggestion that, he cheated accused by keeping chit bidding amount with him though he took three cheques from the accused. He also denied the suggestion that at the time of bidding of 4th chit by the accused, one A. Appala Raju, S.Srinivasa Rao, B.K.Rao and one B Jagadeeswara Rao etc., members were present. PW.1 categorically stated accused executed two promissory notes at the time of borrowing amounts from him and he also issued three cheques subsequently. He also stated that, he gave Rs.2,30,000/ under Ex.P1 and P2 on the same day, i.e., on 17.04.2012. He arranged the said amounts from his personal savings.
14.PW.s 2 and 3 categorically denied the suggestion that, they were not present at the time of Ex.P1 and P2 and no consideration was passed to the accused from PW1. They also denied the suggestion that, accused gave blank cheques to PW1 for security purpose at the time of bidding of chit amount from PW1. PW.3 further stated that, the denomination of lent amount is of Rs.500/ notes. PWs 2 and 3 also denied the suggestion that accused running chit business at Padmaja Shoe Mart, Gajapathinagaram.
15.As seen from the cross examination of PWs.1 to 3 it is appears that the contention of the accused is that he was the member of the chit business maintained by the complainant and accordingly he participated in four chits and at the time of bidding of forth chit of Rs.2,00,000/ for the loss of Rs.15,000/ complainant failed to give his bidding amount and filed this false case basing on the blank cheques and promissory notes i.e. Ex.P.1 to Ex.P4 were obtained by the complainant at the time of bidding previous chits. However, PW.1 to 3 categorically denied the case of the accused during their cross examination.
16.On relying up on the evidence of PWs.1 to 3 learned counsel for the complainant argued that accused borrowed an amount of Rs.2,30,000/ from complainant on 17.04.2012 on executing Ex.P.1 and Ex.P.2 agreeing to repay the same together with interest at the rate of 24% p.a. Subsequently, accused failed to repay the same in spite of his repeated requests and finally issued Ex.P.3 and Ex.P4 cheques both for an amount of Rs.2,30,000/ on 07.06.2014 towards discharge of debt under Ex.P.1 and Ex.P.2. Complainant presented the said cheques for repayment in the bank of accused on the same day i.e. on 07.06.2014 the same were dishonored with an endorsement of 'FUNDS INSUFFICIENT' vide Ex.P.5 cheque return memo. Hence, he got issued Ex.P.6 statutory legal notice with in time calling accused to repay the amounts under Ex.P.3 and Ex.P4, but accused though issued Ex.P.8 legal notice
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on false allegations he did not choose to repay the amounts. He further argued that after receipt of the Ex.P8 notice accused lodged false report before SHO Gajapathinagaram against complainant under section 420 of IPC alleging that complainant cheated him by obtaining blank cheques and promissory notes at the of bidding chit which was alleged to be maintained by complainant and the same was registered as C.C.NO.297 of 2014 and ended in acquittal in favour of complainant herein with a finding that complainant had not maintained any chit business and accused herein did not subscribe any chits with complaint.
17.On the other hand learned counsel for the accused contended that this case was foisted against the accused basing on cheques which were issued by the accused to complainant towards security purpose for the debt i.e. chit bidding amount exists with complaint who maintained chit business.
18.In order to rebut the case of the complainant, accused himself is examined as DW1 with leave of the court and filed his chief affidavit. In his chief affidavit, accused categorically stated that, the complainant was running an Unauthorized chit business at Gajapathinagaram and he is one of the members in the said chit broups maintained by the complainant since 01.06.2011. He paid amounts for three chits each for rupees two lakhs, and complainant collected three blank promissory notes and three blank cheques towards security for the payment of chit amounts. He further stated that, accordingly, he gave three blank promissory notes and cheques for rupees one lakh, one lakh thirty thousand and another cheque for rupees fifty thousand. Even after clearing the chit amounts, the complainant did not return the blank promissory notes and cheques in spite of repeated demands. At the time of bidding of 4th chit for Rs.1,80,000/, again, the accused demanded the complainant to return the blank promissory notes and cheques, and at that time, the complainant threatened him that, he would file false case against him. Accordingly, this case was foisted against him. Hence, he gave report to station house officer, Gajapathinagaram and the same was registered as CC 297/2014 on the file of this court. He further stated that, on receipt of legal notice from the complainant, he got issued suitable reply on 29.06.2014 by denying the complainant allegations. He also stated that, he did not borrow any amounts from the complainant and he issued pro notes and cheques in favour of complainant towards security for payment of chit amounts. Hence, the offence under Sec. 138 of NI Act is not attracted as the cheques were issued towards security purpose. He further stated that, along with him some other subscribers were also maintained with the complainant, i.e., Alla Appalakonda, S Srinivasa Rao, M.Sankar.Rao, B.Jagadeeswar Rao, B.Srinivas Rao, K.Srinivas Rao, B.Kameswar Rao, one Kanaka Rao and some others and he issued the said cheques in the presence of the above said persons towards security purpose for the chit amounts and got marked Ex.D.1 is the certified copy of FIR in Cr.No.91 of 2014 dated 29.06.2014 of Gajapathinagaram P.S. along with report, Ex.D.2 is chit book.
19.DW. 2 and 3 stated by filing of their chief affidavits that, PW1 was running chit business and accused was one of the member along with them and he gave three cheques and three promissory notes at the time of bidding of 4th chit in their presence.
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20.As per the contention of counsel for the accused and as seen from the evidence of DW.1 to DW.3 it is abundantly clear that accused executed Ex.P.1 to P.3 in favour of complainant. Since accused admitted his execution of Ex.P.1 to P.4 in favour of complainant certainly presumption under section 139 of N.I.Act comes to the rescue of complainant in holding that accused issued Ex.P.3 and Ex.P4 towards discharge of legally enforceable debt under Ex.P.1 and Ex.P.2. Basing on the admission made of defence witnesses learned counsel
for complainant contended that since the accused admitted his signature on Ex.P.3 and Ex.P.4
that itself is sufficient in taking presumption under U/s.139 of NI Act and reverse burden lies on the accused to disprove such presumption. In supporting his above said contention learned counsel for complainant is also relied upon the following decisions:1.Hiten P. Dalal Vs Bratindranath Banarjee of Hon'ble Appex court, 2. Omprakash Vs L.Sunitha and another of
Hon'ble High Court of A.P, 3. Lillykutty Vs Lawarnace of Hon'ble Kerala High Court. In all the
above said decisions it is firmly held that when cheque is admittedly issued with blank date, and when the drawer has no objection with regard to the name, amount and signature, it can be presumed that there is an implied consent for putting the date as and when required by the payee and get it enchased unless the contrary is proved. Hence, in this back ground it is just and necessary to refer the following pronouncements for the better the understanding the legal position in taking presumption under section 139 of N.I.Act. In the decision reported in K.BHASKARAN vs. SANKARAN VAIDHYAN BALAN 1 the Hon’ble Apex Court at para9 held as follows:
“As the signature in the cheque is admitted to be that of
the accused, the presumptions envisaged in Section 118 of
the Act can legally be inferred that the cheque was made
or drawn for consideration on the date which the cheque
bears. Section 139 of the Act enjoins on the Court to
presume that the holder of the cheque received it for the
discharge of any debt or liability. The burden was on the
accused to rebut the aforesaid presumption.”
21.In the decision reported in HITEN P.DALA v. BRATINDRANATH BANERJEE 2 the
Hon’ble Apex Court while dealing with a similar case in para21 held as follows:
“Because both Sections 138 and 139 requires that the Court “shall
presume” the liability of the drawer of the cheques for the amounts for
which the cheques are drawn, as noted in State of Madras V.
A.Vaidyanatha Iyer , AIR 1958 SC 61, it is obligatory on the Court to
raise this presumption in every case where the factual basis for raising
of the presumption had been established. “It introduces an exception
to the general rule as to the burden of proof in criminal cases and
shifts the onus on to the accused? (ibid). Such a presumption is a
presumption of law, as distinguished from a presumption of fact which
describes provisions by which the Court “may presume” a certain state
of affairs. Presumptions are rules of evidence and do not conflict with
the presumption of innocence, because by the latter all that is meant is
that the prosecution is obliged to prove the case against the accused
beyond reasonable doubt. The obligation on the prosecution may be
discharged with the help of presumptions of law or fact unless the
accused adduces evidence showing the reasonable possibility of the
nonexistence of the presumed fact.”
1.2000 (1) ALT (Crl.) 42
2.2001 (2) ALD (Crl.) 234 (SC)
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22.In this case, the burden of proving the fact that Exs.P.3 and P.4 were not issued for discharge of a legally enforceable debt or liability is shifted to the accused. How to prove a fact the Supreme Court in HITEN P. DALA’s case (cited supra) gave a clarification at para22 by holding as follows:
“In other words, provided the facts required to form the basis of a
presumption of law exists, no discretion is left with the Court but to
draw that statutory conclusion, but this does not preclude the person
against whom the presumption is drawn from rebutting it and proving
the contrary. A fact is said to be proved when, “after considering the
matters before it, the Court either believes it to exist, or considers its
existence so probable that a prudent man ought, under the
circumstances of the particular case, to act upon the supposition that
it exists” Section 3 Evidence Act. Therefore, the rebuttal does not have
to be conclusively established but such evidence must be adduced
before the Court in support of the defence that the Court must either
believe the defence to exist or consider its existence to be reasonably
probable, the standard of reasonability being that of the ‘prudent
man’.”
23.In this case since the accused admits his signatures on Exs.P.1 to P4 and since he did not take any steps to disprove his signatures on Ex.P.1 to P.4. Therefore, in view of the ratio laid down in above discussed decisions the burden now is on accused to rebut the evidence of the complainant and to prove that he did not execute Exs.P.3 and P.4 in favour of the complainant towards discharge of any debt or liability.
24.As seen form the evidence of DW.1 and as per the suggestion put to PW.1 in his cross examination it is transpires that accused was the member of chit groups maintained by the complainant and accused succeeded in the fourth chit for Rs.85,000/ and at that time DW.2 and DW.3 and some others were present. But as per Ex.P.9 which is deposition of DW.1 herein being PW.2 in C.C.No.297 of 2014 it is transpires that DW.2 was not present either at the time of execution of Ex.P.1 to P.4 by the accused in favour of complainant or at the time of bidding of alleged fourth chit. DW.3 herein being PW.5 in C.C.No.297 of 2014 even stated that in his cross examination by APP he does not know whether accused herein issued blank cheques and promissory notes in favour of complainant herein. Whereas, in this case on hand both DW.2 and DW.3 deposed in their evidence that they were present at the time of execution of Ex.P1 to P.4 by accused herein in favour of the complainant herein which is quite contra with their previous version in C.C.No.297 of 2014. Therefore, for the above said reason it is crystal clear that both DW.2 and DW.3 purposefully deposing false at the behest of accused, hence theie evidence can be said to be untrustworthy of credit as the same is not inspires any confidence of this court and it cannot be basis to disbelieve the complainant version and that the evidence of DW.2 and DW.3 is liable to discarded.
25.As already adverted by me in the foregoing discussion since the evidence of DW.2 and DW.3 is discarded the evidence of DW.1/Accused has to be examined with great care and caution.
26.In his evidence DW.1 stated that he issued three cheques and three promissory notes in which two pronotes and two cheques are marked as Ex.P.1 to P.4 herein towards security purpose as he was maintained four chits with complainant each for Rs.2 Lakhs and complainant failed to give his fourth chit bid amount of Rs.1,85,000/ which was bidded by
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him for loss of an amount of Rs.15,000/ in the presence of DW.2 and DW.3 and some other members and got filed this case with the help of old pronotes and cheques when accused demanded to give his fourth chit bid amount. He further stated that since complaint failed to give his fourth chit bid amount of Rs.1,85000/ and when complainant threated him to file cases basing on old promissory notes and cheques he got filed criminal case against the complainant before SHO Gajapathinagaram and the same was registered as a C.C.297 of 2014 on the file of this court and he got issued suitable reply under Ex.P.8 for Ex.P.6 legal notice.
27.However, in his cross examination accused admitted that the signatures on Ex.P3 and P.4 are belongs to him. He further admitted that he did not issue any notice to complainant asking him to return blank promissory notes and cheques issued by him in the year 2011 till receipt of Ex.P.6 notice. He further admitted that he did not issue any letter to his banker intimating about issuance of Ex.P.3 and P.4 for security purpose. He also admitted that C.C.No.297 of 2014 which is filed by him against complainant is ended in acquittal. He further admitted that he did not mention in his report under Ex.D.1 about issuance of Ex.D.2 by the complainant herein to him. He also admitted that he did not mention in his chief affidavit that complainant issued Ex.D.2 in his favour. He further admitted that Ex.D.2 is pertaining to last chit and he used to pay amounts under Ex.D.2 on every day and one installment is for Rs.6,000/ and odd. He denied the suggestion that he fabricated Ex.D.2 for the purpose of defeating this case.
28.By marking Ex.D.2 accused made an attempt to support his contention of maintaining chits with complainant and in that regard complainant issued Ex.D.2 for payment of fourth chit. If it is true as admitted by DW.1 in his cross examination if the months installment is Rs.6000/ and odd and if used to pay said amount in daily basis under Ex.D.2 certainly he ought to have paid an of Rs.200/ and odd per day. But Ex.D.2 recitals clearly shows that payments made under the same for an amount of Rs.100/ per day. Therefore, in the above circumstances it cannot be said that Ex.D.2 was issued by complainant to accused with regard to payment of chit amounts. Moreover, though Ex.D.2 is marked through accused at the time of leading his evidence and though learned counsel for accused contended that Ex.D.2 was issued by complainant to accused with regard to payment of chit amounts nothing was mentioned in his chief affidavit with regard to issuance of Ex.D2 by complainant. Though counsel for accused contended that accused has preferred appeal against the judgment in C.C.No.297 of 2014 he did not file any peace of paper to that effect. Moreover, I am of the opinion that the finding in the above C.C.No.297 of 2014 is not binding in this case as offences under that case and in this case entirely different. Therefore, in the above mentioned circumstances it can be said that Ex.D.2 is created for defending this case and marked by accused beyond his evidence as such the same cannot be taken into consideration in believing the contention of accused.
29.In another contention by admitting the signatures on Ex.P.3 and P.4 as the same are belongs to accused learned counsel for accused contended that though he issued blank cheques containing signatures of accused on previous date other than the dates therein and
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complainant got filled the same and got filed this case though no consideration was passed to him. With regard to different writings on cheques and promissory notes Hon'ble High Court of A.P inD.Atchuta Naidu Vs. State of A.P3 held that
A question came up for consideration before this Court, whether the
body of the cheque was required to be in the hand writing of the
maker of it. In Gorantla Venkateswara Rao's case, a learned single
Judge of this Court after a detailed survey of various decisions of this
court has held that the legal position on this aspect is very clear that
the body of the cheque need not necessarily be written by the accused
and it can be in the handwriting of anybody else or typed on a type
machine, so long as the accused does not dispute the genuineness of
the signature on the cheque. What is material is signature of drawer or
maker and not the body writing, hence, the dispute relating to body
writing has no significance. It is not mandatory and no law prescribes
that the body of the cheque should also be written by the signatory to
the cheque. A cheque could be filled up by anybody if it is signed by
the account holder of the cheque.
Therefore, in view of the observation made by Hon'ble High Court of A.P in the above mentioned decisions more particularly in the decision of Lillykutty Vs Lawrance referred in Para 20 of this judgment I am of the considered opinion and held that consisting of different writings on negotiable instrument would not divest the liability of drawer of such negotiable instrument. Hence, the above contention of accused with regard to different writings on Ex.P.3 and P.4 is hereby negatived.
30.Admittedly accused did not issue any notice to complainant asking him to return his blank promissory notes and cheqes till he received Ex.P.6 legal notice nor he issued any letter to his banker to about intimating them that he issued Ex.P.3 and P.4 to complainant towards security purpose. The very contention of accused is that he issued cheques in dispute at the time of taking chit amount from complainant. That itself speaks that accused issued Ex.P3 and P.4 cheques to complainant towards existence of debt which is falls due by the time of issuance of such cheques. In this context with regard to issuance of post dated cheques towards existing debt or liability the Hon'ble Appex Court in Sampelly Satyanarayana Rao Vs Indian Energy Development Agency Ltd 4 . held as follows:
Reference to the facts of the present case clearly shows that though
the word "security" is used in clause 3.1(iii) of the agreement, the said
expression refers to the cheques being towards repayment of
installments. The repayment becomes due under the agreement, the
moment the loan is advanced and the installment falls due. It is
undisputed that the loan was duly disbursed on 28th February, 2002
which was prior to the date of the cheques. Once the loan was
disbursed and installments have fallen due on the date of the cheque
as per the agreement, dishonour of such cheques would fall under
Section 138 of the A ct. The cheques undoubtedly represent the
outstanding liability.
Judgment in Indus Airways is clearly distinguishable. A s already
noted, it was held therein that liability arising out of claim for breach
of contract under Section 138, which arises on account of dishonour of
cheque issued was not by itself at par with criminal liability towards
discharge of acknowledged and admitted debt under a loan
transaction. Dishonour of cheque issued for discharge of later liability
is clearly covered by the statute in question. Admittedly, on the date of
3. 2009 [3] ALT Crl. 286
4. 2016 (2) ALD (Criminal) SC 809
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the cheque there was a debt/liability in presenti in terms of the loan
agreement, as against the case of Indus Airways where the purchase
order had been cancelled and cheque issued towards advance payment
for the purchase order was dishonoured. In that case, it was found
that the cheque had not been issued for discharge of liability but as
advance for the purchase order which was canceled. Keeping in mind
this fine but real distinction, the said judgment cannot be applied to a
case of present nature where the cheque was for repayment of loan
installment which had fallen due though such deposit of cheques
towards repayment of installments was also described as "security" in
the loan agreement. In applying the judgment in Indus Airways, one
cannot lose sight of the difference between a transaction of purchase
order which is canceled and that of a loan transaction where loan has
actually been advanced and its repayment is due on the date of the
cheque.
31.In the present case on hand though accused contended that he subscribed chits with complainant he could not adduce any piece of documentary evidence to support his contention. Hence, it is crystal clear that accused issued Ex.P.3 and P.4 cheques to complainant towards money which is falls due to complainant. In refuting the contention of complainant learned counsel for accused relied upon on the following decisions: Sri. Vasanth Kumar Vs Sri Manoj V of Bangalore District Court, Jaipal Singh Rana Vs Swaraj Pal of Delhi District Court, M.Abdul Rasheed Vs S.Unnikrishnana of Hon'ble Kerala High Court and PL Varavan Vs AL Selvakumar of Hon'ble High Court of Madras. However, in the above said decisions on which learned counsel for accused has relied upon two or relating to Bangalore, Delhi District Courts as such they cannot be placed any reliance and remaining of are though relating to different High Courts the set of facts in the said decisions are quite different with the present set of facts in this case, hence the decisions relied upon by accused is of no useful to the case of the accused. Further more at the time of arguments learned counsel for accused filed memo containing the pass book of account under Ex.P.3 and P.4 and its statements to show that Ex.P.3 and P.4 are post dated cheques and issued in the year 2012. Though it is not relevant at this stage to remove doubts of accused I perused the same and found that cheque bearing No.932108 which is previous to Ex.P.3 was issued on 09.04.2012 was the last cheque issued encahed for the account under Ex.P.3 and P.4 and no further cheques were shown to be encahsed after serial numbers under Ex.P.3 and P.4. Hence, there may be every chance to issue Ex.P.3 and P.4 on its alleged date to complainant. As such contention of accused in saying that Ex.P.3 and P.4 are post dated cheques cannot be taken into consideration. Therefore, on considering the above said decision and in view of the foregoing discussion it is held that Ex.P.3 and Ex.P4 were issued by the accused towards legal enforceable debt and dishonor of such cheques would certainly create liability of accused. Accordingly, this point is answered against the accused and in favour of complainant.
Point No.2:Whether Ex.P3 and P4 cheques were dishonored due to funds sufficient in the account of the accused?
32.With regard to dishonor of Ex.P.3 and P.4 cheques the evidence of PW.1 is that the said cheques were dishonourd for funds insufficient and relied upon Ex.P.5 cheque return memo which transpires that Ex.P.3 and P.4 were dishonored for FUND INSUFFICIENT. However, it is contention of counsel for the accused is that Ex.P.3 and P.4 do not bear the
C.C.No.149 of 201411 J.M.F.C, Court, Gajapathinagaram
stamp of accused bank to show that they were presented for payment and that he disputed the genuineness of Ex.P.5 cheque return memo contending that complainant obtained Ex.P.5 by managing bank officials. If cheques were not issued by accused to complainant it is not possible for complainant to obtain cheque return memo by managing bank authorities. But accused himself admitted that he issued three cheques and three promissory notes to complainant. If really Ex.P.5 was issued by his banker accused is at liberty to examine to prove his contention, but for the reasons best known to him accused did not take any such steps to disprove the genuineness of Ex.P.5. Hence, the contention of accused with regard to non having of stamps on Ex.P.5 cannot be taken into consideration as it is not fatal to the case of the complainant.
33.The contention of learned accused is that complainant is not having financial source to lend such huge amounts, however complainant denied the suggestion he is not having financial source to lend amounts under this case and no concrete evidence was adduced by the accused in order to prima facie rebut the presumption raised in favour of the complainant in this case. Not only that, it is for the Authorities of Income Tax Department to take action if the complainant is liable to pay tax and then failed to pay such tax and the accused cannot, at this stage, be permitted to contend that he is not liable to pay any amount to the complainant on that flimsy ground. In view of the above Judgments, if such a flimsy plea of the accused is accepted, even for the sake of argument, the acceptability of cheques would not increase. Furthermore, in such a case, a trickster drawer of a cheque would easily escape from the criminal liability, which is not at all the purport and avowed object of the relevant provisions of the NI Act. Thus, the said contention of the learned counsel for the accused cannot be countenanced. At this stage, it is useful to refer to the Judgment of the Hon'ble Bombay High Court(Panaji Bench) rendered in KRISHNA P MORAJKAR v. JOE FERRAO, STATE OF GOA 5wherein it was inter alia held thus:
“Before I conclude, with all humility at my command, it has to
be noted that even after noticing the object of enacting Section 138 of
Negotiable Instruments Act, namely to enhance the acceptability of
cheques, Courts have been accepting virtually any argument advanced
to nullify the liability created, like ignoring or misreading presumption
under Section 139 of the Act, misreading provisions of Sections 269SS
and 271D of the Income Tax Act, unmindful of the consequence that
unscrupulous individuals go on signing cheques irresponsibly. When a
person signs a cheque and delivers it, even if it is a blank cheque or a
post dated cheque, presumptions under Section 118(b) and 139 of the
Negotiable Instruments Act would have to be raised and would have to
be rebutted by the accused, albeit by raising a probability. Unless the
Courts start discouraging flimsy defences, acceptability of cheques
would not increase. The problem of unaccounted money would be
reduced if transactions take place by cheques. Even a cash advance
when repaid by cheque gets accounted. Making it unrecoverable,
would only push the persons to extra judicial methods of recovery. The
Courts would thus not only be defeating the object of the provision but
also indirectly be party to increase lawlessness. This, in my humble
view, cannot be allowed by Courts.”
5. 2013 CrLJ 572
C.C.No.149 of 201412 J.M.F.C, Court, Gajapathinagaram
34.Furthermore, the learned counsel for the accused contended that empty cheque was given to the complainant by the accused and the same was misused in this case by the complainant. Except the ipse dixit of the accused, there is nothing brought on record to prove the said plea. It is now well settled principle of law that issuing a blank signed cheque is nothing but giving complete authority to the payee to do the needful in the matter and such issuance of blank signed cheque is knowingly at the risk of the drawer and later the drawer cannot complain anything in that regard, vide KRISHNA P MORAJKAR v. JOE FERRAO, STATE OF GOA (referred to supra). Hence, the said contention of the learned counsel for the accused has no legs to stand. Therefore, In view of the above mentioned circumstances, I have absolutely no scintilla of hesitation nor any traces of doubt to hold that Ex.P.3 and Ex.P.4 were dishonored for FUNDS INSUFFICIENT. Accordingly, this point is answered infavour of the complainant and against the accused.
Point No.3: Whether the complainant has established the guilt of the accused for the offences punishable under Sec. 138 of N I Act, beyond all reasonable doubt ?
35.In view of my foregoing discussion, I find that the complainant has successfully established the guilt for the offence U/s.138 of the Negotiable Instruments Act against the accused beyond all reasonable doubt. The point is accordingly answered.
36.In the result, the accused is found guilty of the offence U/s 138 of the Negotiable Instruments Act and he is accordingly convicted U/s 255(2) Cr.P.C.
Dictated to the Personal Assistant, transcribed by him, corrected the soft copy by me
in my official Laptop, signed and pronounced by me in the open court on this the 1st day of May 2017.
Sd/ A Krishna Prasad,
Judicial Magistrate of I Class,
Gajapathinagaram.
37.With regard to quantum of sentence accused is questioned for which he stated that he did not commit any offence and also stated that he is having family who are dependents on him. Having due regard to the nature of the offence proved against the accused, which is a socioeconomic offence affecting the very credibility of the business transactions being made through cheques which in turn also have great impact on the society at large, this Court is not inclined to invoke the provisions of Section 360 of the
Cr.P.C. or the provisions of the Probation of Offenders Act bearing in mind the avowed object of the provisions of the N.I.Act. Having due regard to the law laid down in the
Judgments of the Hon'ble Supreme Court rendered in R.VIJAYAN v. BABY and
MAINUDDIN ABDUL SATTAR SHAIKH VS VIJAY D SALVI and in view of the cheques
Ex.P.3 and Ex.P.4 issued by accused to complainant for Rs.1,00,000/(One Lakh Rupees),
Rs.1,30,000/ (One Lakh Thirty Thousand Rupees) respectively the accused is hereby
C.C.No.149 of 201413 J.M.F.C, Court, Gajapathinagaram
sentenced to undergo rigorous imprisonment for a period of one year and pay a sum of
Rs.4,60,000/(Four Lakh Sixty Thousand Rupees only) along with simple interest at the rate of 9% per anum to the complainant towards compensation U/sec 357 of Cr.P.C within one month from the date of this judgment. As the accused was not in judicial custody at any time during the pendency of this case, he is not entitled to claim any set off as contemplated under Section 428 of the Cr.P.C. The accused is hereby informed that he has got a right of appeal to assail this Judgment.
Dictated to the Personal Assistant, transcribed by him, corrected the soft copy by me
in my official Laptop, signed and pronounced by me in the open court on this the 1st day of May 2017.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
FOR PROSECUTION: FOR DEFENCE: PW1:M LaxmunaiduDW1 : BMS Sekhar Rao PW2:K Tirupathi NaiduDW2 : B Jagadeeswara Rao PW3: B Ram Gopal NaiduDW3 : S Srinivasa Rao
EXHIBITS MARKED
FOR PROSECUTION: Ex.P1 is the certified copy of promissory note Dt. 17.04.2012, Ex.P2 is the Certified copy of promissory note Dt. 17.04.2012, Ex.P3 is cheque bearing NO. 932109 Dt. 07.06.2014, Ex.P4 is the cheque bearing No. 932110, Dt. 07.06.2014, Ex.P5 is the cheque return memo issued by the Andhra Pradesh Grameena Vikas Bank, Bondapalli Dt. 07.06.2014, Ex.P6 is the Office copy of legal notice Dt. 16.06.2014, Ex.P7 is the Postal Acknowledgement Dt. 19.06.2015, Ex.P8 is the reply notice Dt. 29.06.2014, Ex.P9 is deposition of one B. Jagadeeswara Rao in CC 297/2014 Ex.P10 is the deposition of one S Srinivasa Rao in CC 297/2014. FOR DEFENCE:
Ex.D1 Certified copy of the FIR in Crime No. 91/2014 of Gajapathinagaram P.S Ex.D2 : Chit Book
Sd/ A Krishna Prasad,
Judicial Magistrate of I Class,
Gajapathinagaram.