1 C.C N.I 1849/2022 in old C.C N.I 142/2019
IN THE COURT OF X JUDICIAL I CLASS MAGISTRATE, MANORANJAN
COMPLEX, HYDERABAD
Monday, this the 30th day of September, 2024
Present: Smt Rajitha Gopu, X Judicial Magistrate of First class cum Judicial I Class Magistrate, Manoranjan complex, Hyderabad
C.C N.I No.1849 of 2022
( Old C.C N.I. 142 of 2019 of IX ACMM) Between:-
D. Srinivas S/o. D. Mallaiah Aged 45 years, Occ: Business R/o.H.No. 1-2-56/32, Thallabasthi, Domalguda, Hyderabad
... Complainant
AND
1. Smt. C. Manorama, Flat No. 503, H.No. 12-2-417/23 & 24, Annapurna Arcade, Sharada Nagar, Mohidipatnam, Hyderabad
2. Smt. C. Neelima, Flat No. 503, H.No. 12-2-417/23 & 24, Annapurna Arcade, Sharada Nagar, Mohidipatnam, Hyderabad … Accused
This case has come before me for final hearing on 27-09-2024 in the presence of Sri Santosh Singh, learned counsel for the Complainant and of Smt Kandarpa Vani, learned counsel for the accused and after hearing both sides, perusing the case record and the matter having stood over for consideration till this day this court delivered the following:- 2 C.C N.I 1849/2022 in old C.C N.I 142/2019
JUDGMENT
This is a private complaint filed by the complainant against the accused for the offence punishable Under Section 138 of the Negotiable
Instruments Act, 1881.
Originally, it was filed in the Hon’ble court of IX A.C.M.M,
Hyderabad, wherein it was registered as CC N.I No. 142/2019, subsequently pursuant to the proceedings of the Hon’ble Metropolitan
Sessions Judge, Hyderabad dated vide dis no. 4177 of 2021, dt:
19.09.2019, it was transferred to this court and re-registered as CC
N.I.1849/2022 on the file of this court.
2.Brief facts of the complainant are that he and Accused No.1 and 2 are having acquaintance for the past 13 years. The Accused No.1 and 2 used to borrow money from the complainant whenever they needed and in that connection on 4-4-2015, the Accused No.1 and 2 along with Mr. C.
Rajeev who is the son of the Accused No.1 approached the complainant seeking had loan of Rs. 10,00,000/- to meet study expenses of son of A1 at USA and promised to repay the same within a year. He further stated that Accused No.1 and 2 constantly pursued and visited the complainant house, upon believing them, complainant advanced a sum of Rs.
10,00,000/- on 6-4-2015 to the Accused No.1 and 2.
(ii)Accused No.1 and 2 aware that he kept his Medchal land documents bearing No. 10958/2006 and 10959/2006 dated 10-10-2006 3 C.C N.I 1849/2022 in old C.C N.I 142/2019 with Smt. P. Saroja W/o P. Rajaiah and taken Rs. 5,00,000/- on 36% from her in the presence of Accused No.1 and 2 in order to help them and the said transaction was witnessed by G. Shankar, S/o. G. Rajaiah and while receiving said amount, Accused No.1 and 2 executed a demand promissory note in favour of the complainant for an amount of Rs.
10,00,000/- agreeing to repay the same with 30% interest per annum and that they will repay said amount together with interest within a year.
Thereafter, the Accused No.1 and 2 failed to repay the amount even after repeated requests made by the complainant. It is further case of the complainant is that the son of A1 went to USA for further studies and due to superannuation, Accused No.1 got retired from education department,
Government of Telangana and even after 4 years of her retirement,
Accused No.1 and 2 postponed the matter with one or other reason.
(iii) He further submitted that A1 retired on 31-1-2019 even after her retirement, she has not shown any interest to repay the amount to the complainant. Upon continuous persistence, the Accused No.1 and 2, agreed to repay the amount, for which A1 issued cheque bearing No.
966667 and 966668, dated 10-05-2018 for Rs. 3,00,000/- each of SBH/SBI
Near old liberty talkies Branch in favour of the Complainant towards part discharge of liability and requested some more time to pay further balance amount with interest.
4 C.C N.I 1849/2022 in old C.C N.I 142/2019
(iv) He further submitted that Accused No.1 and 2 neither responded nor repaid the balance amount even after more than 6 months, finally A1 sent Rs. 1,00,000/- on 11-3-2019 and another Rs. 1,00,000/- on 13-3-2019 through RTGS in favour of Vani who is the Wife of the complainant. On 1-4-2019, when the complainant demanded the balance of repayment, A1 issued cheque 965878, dated 3-4-2019 drawn on
SBH/SBI Near old liberty talkies Branchin favour of the complainant for a sum of Rs. 8,00,000/- and Accused No.1 and 2 requested the complainant towards full and final settlement of the loan amount.
(V) The complainant presented the said cheque through his Vijaya bank on 12-4-2019 and the same was returned as “EAB” cheque and when the complainant demanded the Accused No.1 and 2 to pay the dishonored cheque amount they were not responded. On 25-4-2019, complainant got issued legal notice to Accused No.1 and 2 demanding the dishonored cheque amount within 15 days from the date of receiving of notice. The accused neither replied nor paid any amount. The complainant further stated that he has filed the complaint within the period of limitation and prays to order the accused to pay compensation U/sec. 357
Cr.P.C to the complainant and also punish the accused. Hence, the complaint.
3.After perusal of sworn affidavit statement of the complainant and considering the facts and circumstances of this particular case, Court took 5 C.C N.I 1849/2022 in old C.C N.I 142/2019 cognizance of the case against the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and issued summons to the accused.
4.On receipt of the summons, the accused made their appearance
before the court, whereupon, copies of documents relied upon by the
complainant were furnished to the accused as contemplated under
Section 207 of Cr.P.C.
5.The accused were examined under Section 251 Cr.P.C. explaining the substance of accusation alleged against them for the offence under
Section 138 of the Negotiable Instruments Act, 1881 for which the accused denied the said offence, pleaded not guilty and claimed to be tried.
6.During the course of trial, to prove its case against the accused, the complainant got himself examined as PW.1 and got marked Exs.P1 to
P9. PW1 in his evidence has reiterated the averments in the complaint.
(ii) PW2 is one of the witness to the promissory note filed chief affidavit stating that and he knew complainant and accused and all of them are residing in the Domalguda, Hyderabad and he also knew P.
Saroja, W/o P. Rajaiah who accepted mortgage of Medchal Plot Documents of the complainant and given hand loan of Rs. 5,00,000/- on interest basis to the complainant who in turn gave the same amount along with 6 C.C N.I 1849/2022 in old C.C N.I 142/2019
additional amount of Rs. 5,00,000/- to A1 and A2 on interest basis during
the month of April 2015 to meetthe study expenses of son of A1 for further studies in USA.
(iii)PW3 is one of the witness to the promissory note filed chief affidavit stating that he was well acquainted with the facts and further deposed that he was the owner of the driving school at Domalguda,
Hyderabad. Accused No.1 and 2 are known to him as son of A1 trained in his driving school and further deposed that on 4-4-2015 Accused No.1 and 2 along with C. Rajeev who is the son of the Accused No.1 and bother of A2 approached the complainant with a request for hand loan of Rs.
10,00,000/- for future studies in USA, in this regard on the request of A1, he personally went to the complainant and recommended hand loan of Rs.
10,00,000/-., accordingly complainant gave hand loan of Rs. 10,00,000/- to the accused in the month of April 2015 and the subject transaction was taken place in his presence.
(iv)PW4 is the wife of the complainant deposed that she was a leader of DWACRA group and said group members started chits among themselves without any auction for their benefits and needs. She further stated that A1 and A2 are very close family friends who are residing in the same locality. Upon the request of A1, she allowed to take 2 chits amount and each chit consisting of Rs. 2 lakhs to pay the same within 20 months from 05.11.2016 to 5.6.2018, Rs. 10,000 per month before lifting and Rs.
7 C.C N.I 1849/2022 in old C.C N.I 142/2019 12,000/- per month after lifting. She further deposed that accused knew that her husband obtained loan of Rs. 5 lakhs @36% interest on 06.04.2015 by keeping Medchal land documents with one Saroja and gave hand loan amount of Rs. 10 lakhs to A1 and A2 and the same was witnessed by PW2/G.Shanker, PW3/Nanchari and while receiving said amount, A1 and A2 executed Ex.P1 promissory note and thereafter accused failed to repay the same, upon which a statutory legal notice issued on 25.4.2018 despite having been received by the accused, neither replied nor paid amount.
(v)PW4 further deposed that the transaction between the complainant and the accused and the transaction between her and the accused is entirely different and further stated that accused issued cheque bearing no.966667 and 966668, dt: 10.5.2018 for Rs 3 lakhs each towards discharge of part liability and requested further time to repay the balance amount with interest but they have not obliged to repay the same even after more than 6 months and later A1 sent Rs. 1 lakh on 11.3.2019 and another Rs. 1 lakh on 13.3.2019 through RTGS. When the complainant demanded for balance amount, A1 issued Ex.P4 cheque no.
965878, dt: 3.4.2019 for Rs. 8 lakhs towards full and final settlement of hand loan amount but the same was returned as “EAB” cheque.
7.After closure of complainant side evidence, the accused were examined under section 313 Cr.P.C. by explaining the incriminating 8 C.C N.I 1849/2022 in old C.C N.I 142/2019 circumstances appearing against them in the evidence of complainant/PW1 to PW4 for which they denied the same and filed documents no.1 to 19 to substantiate their case.
8.Heard both sides. Perused the record.
Reliance was placed by the learned complainant counsel upon the following decisions:
(I)In K. N Beena Vs Muniyappan and others in Crl. Appeal No.
1006 of 2001, Special leave petition (Crl) 969 of 2001 wherein Hon’ble
Supreme Court of India held that Under section 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under section 139 the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability, thus in complainants under section 138, the court has to presume that the cheque had been issued for a debt or liability.
(ii)In T. P. Murugan (Dead) thr L.Rs and others Vs Bojan in Crl
Appeal Nos. 950-951 of 2018, wherein Hon’ble Supreme Court of India held that the under section 139 of the NI Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability. This presumption is a rebuttable one, if the issuer of the cheque is able to discharge that burden that it was issued for some other purpose like security for a loan. In the present case, the respondent had failed to produce any credible evidence to rebut the statutory presumption .
9 C.C N.I 1849/2022 in old C.C N.I 142/2019
(iii)In Don Ayengia Vs The state of Assam and Others in Crl.
Appeal No. 82-89 of 2016, wherein Hon’ble Supreme Court of India held that the existence of the debt or liability was never in dispute on the contrary, it was acknowledged by Naximul Islam who simply sought one month’s time to pay up the amount. The cheque were posted dated, only to give to the drawer the specified one month’s time to pay the amount.
There is thus a direct relationship between the liability and the cheuqes issued in connection therewith.
(iv)In Bir Singh Vs Mukesh Kumar in Crl Appeal NO. 230 -231 of 2019 wherein Hon’ble Supreme Court of India held that the once a blank cheque is issued towards the discharge of some payment, then a presumption regarding its validity would arise against the accused. It is for the accused to disprove the said presumption
(v)In Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu
Firm and another in Civil Appeal No. 5597 of 2001, Wherein Hon’ble
Supreme Court held that, initial burden is on defendant to show that existence of consideration was improbable of doubtful or illegal. If this burden is discharged, onus shifts on plaintiff, If, however, defendant fails to discharge initial burden, the plaintiff in invariably entitled to benefit of the presumption, mere denial of consideration is not sufficient to discharge initial burden, Something probable has to be brought on record to prove non-existence of consideration, On facts, execution of pronote proved, Respondent failed to discharge initial burden either by direct evidence or preponderance of probabilities.
10 C.C N.I 1849/2022 in old C.C N.I 142/2019
(vi) In M. Vidyavathi Vs. Chandraiah @ Chandra Babu and another – 2010 (1) ALT (Crl) 347 (A.P), Wherein Hon’ble High Court of Judicature
Andhra Pradesh at Hyderabad held that in a case where admissible evidence is overlooked, inadmissible evidence taken into consideration in acquitting accused, a duty is cast upon appellate court to re-appreciate evidence.
(vii) In Rangappa Vs. Sri Mohan in Criminal Appeal No. 1020 of 2010 – 2010 (3) ALT (Crl) 339 (SC), Wherein Hon’ble Supreme Court of
India held that alleged discrepancies not material since accused failed to raise a probable defence to rebut the presumption under section 139 of
N.I Act.
(viii) In Upohar International Pvt. Ltd and another Vs. State of A.P and another in Criminal Appeal No. 1079 of 1995 - 1997 (1) ALD (Crl) 30 (A.P) (D.B), Wherein Hon’ble High Court of Judicature of Andhra Pradesh at
Hyderabad held that if the cheque is presented before instructions are issued to bank for “stop payment”, section 138 N.I Act gets attracted, if the notice is issued to the payee not to present the cheque for encashment but the cheque is presented and returned by bank on the instructions of the drawer, section 138 does not get attracted. The fact whether a notice is issued to the payee before the presentation of the cheque or not has to be decided on the evidence adduced in the Court of trial.
11 C.C N.I 1849/2022 in old C.C N.I 142/2019
(ix) In Goa Plast (P) Ltd Appellant Vs. Chico Ursula D’ Souza
Respondent and another in Criminal Appeal No. 1968 o 1996, Wherein
Hon’ble Supreme Court 408 held that Dishonour of cheque, for issuing
“Stop Payment” instructions there must be funds in the accounts, Reasons for stopping payment, however, can be manifold, Accused must have sufficient funds in account on date of signing presentation of cheque, dated of letter to complainant denying liability to pay sum and date on which stop payment instructions were issued to bank. Accused admitted of his liability but stated that he was not responsible for it, letter of accused denying liability and that some other person in liable for it, not sufficient to rebut presumption in absence of evidence.
(x) In MSR Leathers Vs. S. Palaniappan and another in Criminal
Appeal No. 261 – 264 of 2002 , Wherein Hon’ble Supreme Court, held that
Negotiable Instruments Act (26 of 1881) under Section 138 Provision (2)
Section 142(b), dishonour of cheque, Failure to prosecute on basis of first default in payment, does not result in forfeiture of right of holder/payee to prosecute. Nothing in the N.I Act that forbids holder/payee of cheque from issuing fresh demand notice and launching prosecution. Limitation of one month from accrual of cause of action for taking cognizance in section 142, does not militate against accrual of successive cause of action.
(xi) In Jogy David Vs. Babu and another in Criminal Appeal No. 294 of 1997, Wherein Hon’ble High Court of Kerala, held that cheque 12 C.C N.I 1849/2022 in old C.C N.I 142/2019 presented for collection within 6 months to another bank other than drawee bank, reaching drawee bank after 6 months, cannot be said to be a stale cheque, cehque returned for insufficiency of fund. Offence under section 138 Committed. The reason given by the bankers of the accused that it is a stale cheque cannot be accepted as the petitioner has presented the cheque 3 days prior to the expiry of the period of 6 months.
Annexure A3 shows that the cheque was returned on two grounds, Viz that is a stale cheque and the funds in the account were insufficient.
(xii) In Ravi Vs. Mohd Ismail and another in Criminal Misc C. 2128 of 1993, Wherein Hon’ble High Court of Kerala, held that Negotiable
Instrument Act, 1881 under Section 138 N.I Act, Cheque dishonored two cheques which were given in repayment of the debt were dishonoured with the endorsement refer to drawer that thereupon he issued notice intimating the dishonour and demanding payment. It was returned undelivered. This makes it clear that complaint is also, at any rate, one of the records to be looked into for the purpose of taking a decision under
Section 203 and 204 of the code. It cannot be said that Court can look into the sworn statement only and not the complainant itself, Petitioner is not entitled to get the complaint and the proceedings in the above case quashed Crl M.C. dismissed.
(xiii) In Paras Marketing Company Vs. Ruchira Papers Ltd in
Criminal M.M. No. 5 of 2003, Wherein Hon’ble High Court of Himachal 13 C.C N.I 1849/2022 in old C.C N.I 142/2019
Pradesh, held that there is nothing on the record to reveal a justifiable reason for stopping payment by the petitioners. They cannot claim immunity from prosecution for the commission of the offence alleged to have been committed by them.
9.Reliance was placed by the learned defense counsel upon the following decisions:
(i) In Meters and Instruments Private Limited and Another Vs.
Kanchan Mehta and another – Citation No. 2017 LawSuit (SC) 996,
Wherein Hon’ble Supreme Court of India (From Punjab & Haryana) held that offence under section 138 of the Act is primarily a civil wrong.
Burden of proof is on accused in view of presumption under section 139
N.I Act but the standard of such proof is “Preponderance of Probabilities”.
The same has to be normally tried summarily as per provision of summary trial under the Cr.P.C but with such variation as may be appropriate to proceedings under chapter XVII of the Act. Thus, read, Principle of Section 258 Cr.PC will apply and the court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect.
(a) The object of the provision being primarily compensatory,
Punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be 14 C.C N.I 1849/2022 in old C.C N.I 142/2019 encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the court.
(b) Though compounding requires consent of both parties, even in absence of such consent, the court, in the interest of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused.
(ii) In A Yesubabu Vs. D Appala Swamy and another – Citation No.
2003 LawSuit (AP) 900, Wherein Hon’ble High Court of Andhra Pradesh held that Section 138 is attracted only if the cheque is issued for the discharge of a legally enforceable debt or other liability. In this case, admittedly, the cheque in question was issued in discharge of a time- barred debt. It cannot be said that a time-barred debt is equally enforceable debt.
(iii) In Gerard Kollian Vs. Weis Electronics and Industrial services (P) Ltd and another – Citation No. 2014 LawSuit (Hyd) 52, Wherein
Hon’ble High Court of Telangana and Andhra Pradesh held that there must
be an acknowledgment of the time barred debt within the meaning of the section 25 of the Indian Contract Act to give life to the time barred debt to give legal enforceability. It is also because this Court earlier in decision cited and placed reliance upon by the accused of Y. Yesubabu V.
Appalaswamy, held that the transaction of dishonour of the cheque amount under section 138 of Negotiable Instruments Act is not 15 C.C N.I 1849/2022 in old C.C N.I 142/2019 sustainable once the amount covered by the cheque claim is barred by limitation.
(iv) In Kiran Finance Company Vs. Sukhdev Kishan and another –
Citation No. 2005 LawSuit (P & H) 672, Wherein Hon’ble High Court of
Punjab AND Haryana held that the payment which really extends the period of limitation under section 20 but the payment has got to be proved in a particular way and for reasons of policy the legislature insists on a written or signed acknowledgment as the only proof of payment and excludes oral testimony. Unless, therefore, there is a acknowledgment in the required form, the payment by itself is of no avail. However, while the section requires that the payment should be made within the period of limitation, it does not require that the acknowledgment should also be made within that period. It is essential that such acknowledgment whether made before or after the period of limitation must be existence prior to the institution of the suit.
(v) In Ashwini Satish Bhat Vs. D Jeevan Divakar Lolienkar and another – Citation No. 1999 LawSuit (Bom) 77, Wherein Hon’ble High
Court of Bombay (Panaji Bench) held that the dishonoured cheque in question cannot be treated as acknowledgment under section 18 of the
Limitation Act, since the acknowledgment should be before the period of limitation is over and that is should be in writing. The case loan was advanced in the year 1985 and the cheque was issued in the year 1990.
16 C.C N.I 1849/2022 in old C.C N.I 142/2019 by the time the cheque was obtained before the expiry of 3 years from the date of loan.
(vi) In Bharat Petroleum Corporation Ltd and Another Vs. Punjab
State Electricity Board and another – Citation No. 2018 LawSuit (P & H) 293, Wherein Hon’ble High Court of Punjab and Haryana held that there are two requirements before section 18 can be applied (1) The acknowledgment must be before the expiry of the prescribed period of limitation (2) Acknowledgment should be made in writing, signed by the party against whom such acknowledgment is to be used.
10.The points that arise for determination in the present case are:
(i)Whether the complainant is able to discharge its initial burden with regard to legally enforceable debt or liability for the subject cheque as pleaded in the complaint?
(ii)Whether the accused has successfully rebutted the presumption raised U/sec. 139 of N.I Act?
(iii)Whether accused is liable for the punishment under section 138 of N.I Act beyond reasonable doubt?
11. POINT NO.1 & 2:
To avoid repetition and for the sake of convenience and brevity, the point no.1 and 2 discussed together.
(i)The complainant stated that he obtained a loan of Rs. 5 lakhs @36% percent from one Saroja by mortgaging his Medchal land 17 C.C N.I 1849/2022 in old C.C N.I 142/2019 documents with her and Rs. 5 lakhs from his savings and thus he advanced hand loan of Rs. 10 lakhs to A1 and A2 for which A1 and A2 executed promissory note with a promise to the repay the same with interest 30% per annum and said transaction witnessed by PW2 and PW3 and in that connection, A1 issued cheque bearing no.966667 and 966668, dt: 10.5.2018 for Rs. 3 lakhs each towards part discharge of liability and Rs. 1 lakh on 11.3.2019 and another Rs. 1 lakh on 13.3.2019 through RTGS in favour of Vani who is the wife of the complainant and on 01.4.2019, when the complainant demanded repayment of the balance amount, A1 issued subject cheque no. 965878,
dt: 3.4.2019 for Rs. 8 lakhs towards a full and final settlement of the hand
loan amount, and the complainant presented the same for encashment on 12.4.2019 through his bank but the same was returned as EAB cheque.
(ii)A1 denied the promissory note and stated that she obtained loan of Rs. 8 lakhs from the wife of the complainant by keeping a blank signed promissory note and cheque towards security and paid Rs. 8 lakhs along with interest through RTGS and cash of Rs. 2,30,000/- to the wife of the complainant and she was no due any amount to the complainant.
In this case, the complainant relied on Ex.P1 Promissory
note, therefore the burden lies on him to prove the execution of
the promissory note.
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(iii)It is elicited from the cross-examination of the PW1 that the promissory note was executed by the accused on 6-4-2015 and the wife of the complainant filled the contents of the promissory note in the presence of PW2 and PW3 and further elicited that complainant/PW1 filled the date column in the promissory note and the signature of A2 is not
affixed in the promissory note either as executant or a witness or
a surety and the rate of interest 30% per month is mentioned in the
Ex.P1 promissory note and further elicited that he paid hand loan amount in cash to the accused for which he borrowed the amount of Rs. 5,00,000/- from P. Saroja on the same day on 6-4-2015 but the same is not specifically mentioned in the legal notice and further elicited that remaining Rs. 5,00,000/- was given from the funds available with him and except promissory note under Ex.P1, there is no other document with him to show that he has lent the amount to the accused.
(iv) It is further elicited that 3 cheques were given by the accused and out of them 2 cheques for Rs. 3,00,000/- each were honored and the other cheque for Rs. 8,00,000/- was dishonored. He gave cheque Nos.
966667 and 966668 to his brother-in-law Mr. Prakash both the cheques, a total amount of Rs. 6 lakhs were honored and further elicited that an amount of Rs. 1,00,000/- each on two occasions were transferred through
RTGS to his wife’s account on 11-3-2019 and 13-3-2019 towards the present debt.
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Further PW1 admitted that Ex.P3 bank statement reveals
that on 5-3-2019 an amount of Rs. 84,000/- was also received and witness said that Rs. 84,000/- related to some other transaction.
Witness/PW1 admitted that it is not mentioned either in the complaint, notice or the chief affidavit that cash was given by the accused on 2 occasions.
(v) It is elicited from the cross-examination of PW2 that he has no knowledge about the acquaintance between A1 and P. Saroja and further elicited that complainant obtained loan for an amount of Rs. 12,00,000/- from saroja by mortgaging his land documents as well as the documents of PW2 with and gave loan to A1. Witness adds that complainant obtained loan for an amount of Rs. 12,00,000/- out of whom Rs. 2,00,000/- given to
PW2 and Rs. 10,00,000/- was given to A1 and further elicited that the subject transaction took place in his presence in April 2017 but he did not remember on which date the loan transaction took place. Complainant brought Rs. 12,00,000/- from P. Saroja and gave Rs. 2,00,000/- to him and complainant told him that he will handover Rs. 10,00,000/- to A1 who was present on the same day. Witness adds that the complainant was not handover Rs. 10,00,000/- in his presence but the complainant told to him that he will hand over the same to A1 and further elicited that at the time of the transaction he along with the complainant and wife of the 20 C.C N.I 1849/2022 in old C.C N.I 142/2019 complainant, A1 was present and further elicited that the promissory note was not executed in his presence.
(vi) It is worthy to note that PW2 who is cited as one of the witnesses for the promissory note specifically admitted in the cross- examination that the promissory note was not executed in his presence.
(vii) PW2 admitted his signature on the promissory note but he did not remember when he put his signature and further elicited that he did not sign on the promissory note on 6-4-2015 as on the date of execution of promissory note and A1 was not kept her signature on the promissory note in his presence and A1 told PW2 that the cheques and the promissory note was necessary for getting hand loan from the complainant and specifically stated that A2 was not present at the time of loan transaction and further elicited that he did not have personal knowledge about the financial transaction between the complainant and
A1 and A1 informed that she gave a cheque for security purpose for said promissory note amount and he has no personal knowledge about the issuance of cheque by A2 to the complainant.
(viii) It is elicited from the cross-examination of PW3 that the complainant is his family friend and he resides in the above portion of the complainant on rent and he knows Accused No.1 and 2 and also the son of 21 C.C N.I 1849/2022 in old C.C N.I 142/2019
A1. A2 and the son of A1 learned driving in his driving school and A1 used to visit the house of the complainant for financial assistance whenever she required it, further elicited that he knows about the same since he was residing in the above portion of the complainant and further elicited that
A1 asked financial assistance from the complainant for her son’s future studies at USA and PW2 also asks financial assistance from the complainant whenever he required.
(ix)It is further elicited that the promissory note was not executed in his presence but the complainant obtained his signature later point in time and further elicited that on the next day he did his signature on the promissory note, wife of the complainant informed him that A1 borrowed the amount from the complainant and asked him to sign as a witness on filled promissory note, therefore, he signed as a witness, further elicited that wife of the complainant informed him that A1 paid some of the amounts after executing promissory note but did not specifically inform how much amount has been paid by A1 to the complainant, and further elicited that he knew about the cheque issued by
A1.
(x)It is elicited from the cross-examination of PW4 (wife of the complainant) that she does not know about promissory note and further elicited that she does not know the particulars about how much amount is 22 C.C N.I 1849/2022 in old C.C N.I 142/2019 advanced by her husband to the accused and further she does not know for what amount A1 executed promissory note in favour of the complainant/PW1 and on which date so also the name of the witnesses and witness denied all the formal suggestions posed by the learned counsel for the accused.
(xi)As it is elicited from the cross-examination of complainant/PW1 that the wife of the complainant filled the contents of the promissory note in the presence of PW2 and PW3 whereas as it is elicited from PW4 who is the wife of the complainant that she does not
know about promissory note so also she does not know the
particulars about how much amount is advanced by her husband
to the accused and further she does not know for what amount A1
executed a promissory note in favour of the complainant/PW1 and
on which date so also the name of the witnesses.Further, it is elicited that though A1 has taken amount from her through 2 chits, A1 did not pay the amount regularly.
(xii) As per the cross-examination of PW2 and PW3, they categorically stated that the promissory note was not executed in their presence. Though the complainant relied on Ex.P1 promissory note, PW2
and PW3 categorically stated that the promissory note was not
executed in their presence. Further, the complainant/PW1 stated that he obtained loan of Rs 5 lakhs from one Saroja and remaining Rs. 5 lakhs 23 C.C N.I 1849/2022 in old C.C N.I 142/2019 from out of his savings, whereas in the cross-examination of PW2, it is elicited that the complainant obtained loan of Rs. 10 lakhs from one
Saroja, furthermore, the wife of the complainant/PW4 filled the promissory note as the same has been elicited through cross-examination of the complainant/PW1 but as per evidence of PW4, she does not know how much amount advanced by her husband i.e., the complainant herein, therefore, the inconsistent versions made by PW1, PW2 and PW4 creates a doubt about execution of promissory note and subject cheque for an amount of Rs. 8 lakhs.
12.Section 139 of the Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability. Of course, this presumption is in the nature of rebuttal and the onus is on the accused thereafter to raise a probable defence.
13.The purpose of cross-examination is to elicit truth. After reading the complete testimonies of PW1, PW2, PW3, and PW4 in a whole and the statements of PWs1 to PW4 as discussed in the aforementioned paras, the entire story of the complainant seems suspicious.
14.It is contended by the accused counsel that A1 availed loan from the wife of the complainant for an amount of Rs. 8 lakhs by keeping her blank signed promissory note and blank signed cheque towards security and repaid the same with interest and so also paid cash of Rs. 2,30,000/- 24 C.C N.I 1849/2022 in old C.C N.I 142/2019
before filing of this case and when she asked to return the same, the
complainant without returning the same filed this false case.
15.PW1 admitted in his cross examination that the accused has given cash on two occasions but it remains unclear what amount on which date it has been paid by the accused.
16.It is contended by the complainant counsel that A1 availed amount under 2 chits @ Rs. 2 lakhs each and subject transactions and said chit transaction both are different one. Though he pleaded that the two transactions are different he has not adduced any evidence about the accused availed loan under two chits and each chit consists of Rs. 2 lakhs.
17.As seen from the evidence adduced by PW1 to PW4 along with documentary evidence under Ex.P1 to P9, it appears that the accused paid Rs. 3 lakhs through cheque no.966667 and also Rs. 3 lakhs through cheque no. 966668, dt: 10.5.2018 so also A1 paid Rs. 1 lakh on 11.3.2019 and Rs. 1 lakh on 13.3.2019 through RTGS in favour of Vani who is the wife of the complainant, thus Rs. 8 lakhs amount is paid by A1 to the account of Vani wife of the complainant.
18.In 313 Cr.P.C examination, the accused filed document no.1 to 19.
Upon perusal of said 19 documents, it appears that an amount of Rs 56,000/- paid by the accused no.1 on 22-03-2017, an amount of Rs. 24,000/- paid by the accused no.1 on 08-04-2017, an amount of Rs. 20,000/- paid by the accused no.1 on 22-05-2017, 25 C.C N.I 1849/2022 in old C.C N.I 142/2019 an amount of Rs. 28,000/- paid by the accused no.1 on 13-06-2017, an amount of Rs. 12,000/- paid by the accused no.1 on 07-10-2017, an amount of Rs. 12,000/- paid by the accused no.1 on 17-11-2017, an amount of Rs. 12,000/- paid by the accused no.1 on 24-12-2017, an amount of Rs. 12,000/- paid by the accused no.1 on 23-01-2018, an amount of Rs. 12,000/- paid by the accused no.1 on 21-02-2018, an amount of Rs. 50,000/- paid by the accused no.1 on 02-03-2018, an amount of Rs. 12,000/- paid by the accused no.1 on 12-03-2018, an amount of Rs. 12,000/- paid by the accused no.1 on 19-04-2018, an amount of Rs. 3,00,000/- paid by the accused no.1 on 11-05- 2018, an amount of Rs. 3,00,000/- paid by the accused no.1 on 14- 05-2018, an amount of Rs. 12,000/- paid by the accused no.1 on 17- 05-2018, an amount of Rs. 12,000/- paid by the accused no.1 on 11- 06-2018, an amount of Rs. 84,000/- paid by the accused no.1 On 08-03-2019, an amount of Rs. 1,00,000/- paid by the accused no.1 on 11-03-2019, an amount of Rs 1,00,000/- paid by the accused no.1 on 13-03-2019.
19.Counter filed by the complainant’s counsel denying all the payments made by the accused and further contended that the accused fabricated all the above documents as per her convenience and filed
before the court at a later point of time, therefore, the same may not be
considered.
26 C.C N.I 1849/2022 in old C.C N.I 142/2019
20.The accused no.1 paid all the above amounts to the wife of the complainant through RTGS (Real Time Gross Settlement).
21.As can be noted from the chronology of events and the material that has been placed before this Court, the accused paid Rs. 3 lakhs on 11-05- 2018, 3 lakhs on14-05-2018 and Rs. 1 lakh on 08-03-2019 and also Rs. 1 lakh on 11-03-2019 and interest nearly Rs.28,6000/-. Upon careful scrutiny of said interest amount, it appears that the accused paid @ 1.50% per month on Rs. 8 lakhs principal amount, and thereby the defense raised by the accused is that she paid Rs. 8 lakhs principal amount and the interest amount is probable one. Since the contents of
Ex.P1 is not proved, this Court presumes that there is no legally enforceable debt as on the date of presentation of the subject cheque.
As per the testimony of PW1, the signature of A2 is not
affixed in the promissory note either as executant or a witness or
a surety. In fact, accused no.2 is neither party to the subject transaction nor signatory of the cheque.
22.The complainant has failed to prove the existence of legally enforceable debt and lending of the amount of Rs.10,00,000/- to the accused beyond a reasonable doubt. In the said circumstances and in view of the above discussion, it cannot be held that the complainant lent
Rs.10,00,000/- and for repayment of said amount the accused had issued 27 C.C N.I 1849/2022 in old C.C N.I 142/2019
Ex.P4 cheque to the complainant. This point is therefore answered against the complainant and in favour of the accused.
Point No.3: In view of the above discussion, it can be concluded that the accused is able to establish the improbabilities of the case of the com- plainant and also to prove his defence by preponderance of probabilities and the complainant has not discharged his reverse burden of proving that the cheque was issued in his favour for a legally recoverable debt or liability.
(i)In the case on hand the complainant is able to prove the pre- sentation of cheque in the bank, its dishonour, his making a demand to the accused to pay the amount covered by said cheque, but the com- plainant as held in point No.1 failed to establish the essential ingredients that there was a legally enforceable debt and the accused has issued a cheque in discharge of the said cheque.
(ii) Since the complainant failed to prove that the accused has committed the offence punishable Under Section 138 of N.I.Act beyond reasonable doubt, accused cannot be held guilty of the offence Punish- able Under Section 138 of N.I.Act and the point is answered in favour of the accused and against the complainant holding that the complainant has failed to make out an offence U/s.138 of N.I.Act.
28 C.C N.I 1849/2022 in old C.C N.I 142/2019
IN THE RESULT, the accused No. 1 and 2 are found not guilty for the offence punishable U/ Sec. 138 N.I.Act and accordingly A1 and A2 are acquitted U/Sec. 255 (1) Cr.P.C. The bail bonds of accused shall be in force for a period of 6 months as envisaged U/sec.437-A Cr.P.C.
Typed to my dictation, corrected and pronounced by me in open court on this the 30th September, 2024.
Sd/-
X JUDICIAL MAGISTRATE OF FIRST CLASS,
HYDERABAD
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
FOR COMPLAINANTACCUSED
PW.1 : D. Srinivas None PW2: G. Shanker PW3: T. Nanchari PW4: D. Vani
EXHIBITS MARKED FOR COMPLAINANT
Ex.P1 – Original promissory note given by accused No.1 & 2
Ex.P2 – Payment through cheque No. 966667 and 966668, dated 10.05.2018 for Rs. 3,00,000/-
Ex.P3 – Original Bank statement showing the part payment given by accused No.1 & 2 through RTGS for Rs. 1,00,000/- on 11.03.2019 and 13.03.2019 to my wife bank account.
Ex.P4 – Original Dishonored cheque No. 965878, dated 03.04.2019 for Rs. 8,00,000/- given to me by account No. 1 & 2
Ex.P5 – Original dishonoured cheque returned memo, dated 15.04.2019 of Branch Manager, now Bank of Baroda 29 C.C N.I 1849/2022 in old C.C N.I 142/2019
Ex.P6 – Legal notice, dated 25.04.2019 issued accused No. 1 & 2
Ex.P7 – Original postal receipts, date 26.04.2019 and 3.05.2019 (4 Nos)
Ex.P8 – Original postal acknowledgment which duly signed by the accused No. 1 and 2 on 05.05.2019 and 06.05.2019
Ex.P9 – Copy of sale deeds No. 10958/2006 and 10959/2006 which was mortgaged by me for arranging hand loan amount to accused No. 1 & 2 and executed bond in favour of Smt. P. Saroja.
EXHIBITS MARKED FOR ACCUSED
NIL
Sd/-
X JUDICIAL MAGISTRATE OF FIRST CLASS,
HYDERABAD.