:IN THE COURT OF THE JUDICIAL MAGISTRATE OF FIRST CLASS:
SPECIAL MOBILE COURT, GUNTUR.
Present : Smt G.Sravanthi,
Judicial Magistrate of First Class, Special Mobile Court, Guntur.
Tuesday, this the 25 th day of February, 2025.
C.C.No.698 of 2015
Between: Sri Chinmaya Trading Company, Represented by its Managing Partner Gonuguntla Anjaiah, S/o.Govinda Rajulu, A/46 years, R/o.Veera Venkateswara Cotton Mills, Kamma Seshaiah Ground, Etukuru road,Etukuru road.
.... Complainant.
AND
1. Kalyana Lakshmi Narasimha Traders, Represented by its Managing Partner, Chadalawada Sampath Kumari, W/o.Sankara Rao, A/55 years, R/o.D.No.3-1-188, Brundavan Gardens, Guntur.
2. Chadalawada Sampath Kumari, W/o.Sankara Rao, A/55 years, R/o.D.No.3-1-188, Brundavan Gardens, Guntur. …. Accused Nos. 1 and 2.
This calendar case is coming before me for final hearing on 18.02.2025 in the presence of Sri. C.Narendra Babu, learned counsel for complainant and of
Sri.SR.Anand, learned counsel for accused, upon hearing both sides, upon perusing the entire material on record and having stood over for consideration to this day, this court delivered the following:
:: J U D G M E N T ::
The Complainant filed this private complaint against the Accused No.1 and 2 under sections 138 and 142 of Negotiable Instrument Act,1881 (in short referred as "NI Act") praying to punish the accused according to law and also pass award of compensation under section 357 of Cr.P.C and to pass such other reliefs in the interest of justice.
2. The sum and substance of the complaint as follows:-
The 2nd accused being the managing partner of A1 company i.e., Kalyana
Lakshmi Narasimha Traders borrowed an amount of Rs.58,00,056/- from the complainant on 05.09.2014 and at the request of the accused the above said amount was transferred from the account of complainant i.e., SBI Main Branch,
Nagarampalem branch, Guntur through RTGS to the account of A1 firm at
Andhra Bank, SME Branch, Saibaba road, Guntur and further accused agreed to pay interest at 18% p.a., from 05-09-2014 and by 15-06-2015 the accused fell due of Rs.66,31,648/- and towards discharge of the said debt along with accrued interest A2 being the managing partner of A1 firm voluntarily issued three cheques in the name of A1 firm i.e., cheque bearing No.000007, dated 15-06- 2015 for Rs.30,00,000/- and cheque bearing No.000008, dated 15-06-2015 for
Rs.28,00,000/- and 3rd cheque bearing No.000009, dated18-06-2015 for
Rs.8,31,648/- and all the three cheques were drawn from HDFC Bank, Guntur.
Accused promised that they will arrange sufficient funds to honour the said cheques and accordingly the complainant presented the 1st cheque for
Rs.30,00,000/- on 27-06-2015 and 2nd cheque for Rs.28,00,000/- on 29-06-2015 for collection at State Bank of India and both the cheques were returned on 30- 06-2015 with an endorsement “funds insufficient” and 3rd cheque for
Rs.8,38,648/- was presented for collection on 30-06-2015 and the same was also returned on 02-07-2015 with an endorsement “payment stopped by the drawer”.
Thereafter, the complainant got issued a registered legal notice to both the accused on 15.07.2015 demanding them to pay the dishonoured cheque amount and the accused received the legal notices and kept quiet and did not pay any amount. Thus the complainant filed the present complaint for dishonour of cheque. Hence, this complaint.
3.Cognizance case was taken on file by my learned Predecessor under
Sec.138 of N.I.Act against accused No.1 and 2.
4. On appearance of the accused Nos.1 and 2, copies of documents were furnished to them as required under section 207 Cr.P.C and they were examined under section 251 Cr.P.C for the offence punishable under section 138 of the Act putting forth the substance of the accusation made against him for which the accused pleaded not guilty and claimed to be tried.
5. During the course of trial, the complainant himself examined as P.W.1 and got marked Exs.P.1 to P.19. Ex.P1 is the notarized attested copy of VAT registration certificate in the name of complainant firm dt.11.4.2005, Ex.P2 is the notarized copy of partnership deed of M/s.Sri Chinmaya Trading Company, dt.20.12.1996, Ex.P3 is the notarized copy of deed of admission-cum-retirement dt.31.03.2004, Ex.P4 is the cheque bearing No.000007 issued by the accused dt.15.06.2015 drawn on HDFC Bank, Guntur for Rs.30 lakhs, Ex.P5 is the cheque bearing No.000008 issued by the accused, dt.15.06.2015 drawn on
HDFC Bank, Guntur for Rs.28 lakhs, Ex.P6 is the cheque bearing No.000009 issued by the accused, dt.18.06.2015 drawn on HDFC Bank, Guntur for
Rs.8,31,648/-, Ex.P7 is the counter foil for deposit of cheque Rs.30 lakhs dt.27.06.2015, Ex.P8 is the counter foil for deposit of cheque Rs.28 lakhs dt.29.06.2015, Ex.P9 is the counter foil for deposit of cheque Rs.8,31,648/- dt.30.06.2015, Ex.P10 is the cheque return memo dt.30.06.2015 for return of cheque bearing No.000007 for Rs.30 lakhs, Ex.P11 is the cheque return memo dt.30.06.2015 for return of cheque bearing No.000008 for Rs.28 lakhs, Ex.P12 is the cheque return memo dt.02.07.2015 for return of cheque bearing No.000009 for Rs.8,31,648/- Ex.P13 is the office copy of legal notice dt.15.07.2015,Ex.P14 is the postal receipts (2 in number), Ex.P15 is the complaint for want of postal acknowledgment addressed to Superintendent of post office dt.08.08.2015,
Ex.P16 is the copy of acknowledgment issued by postal department,Ex.P17 is the statement of account of complainant firm issued by SBI, Kannavarithota,
Guntur from 01.09.2014 to 25.10.2014, Ex.P18 is the ledger account of Kalyani
Lakshmi Narasimha cotton traders maintained by complainant, Ex.P19 is the statement of account of accused. P.W.2/G.V.Chandra Sekhar who is the
Assistant Manager, SBI,Kannavarithota Branch, Guntur and P.W.3/Y.Srinivasa
Rao who is the Senir Branch Manager, Andhra Bank, SME Branch, Guntur were examined examined as PWs.2 and 3 in support of the contention of the complainant.
6.On closure of complainant side evidence, accused were examined
U/Sec.313 Cr.P.C putting forth the incriminating material that appears against them in the evidence of complainant, for which they pleaded not guilty by denying the same and reported defence evidence. Accused No.2 herself examined as
D.W.1 and no documents were marked on her behalf.
7. Heard both sides and perused the written arguments and the authorities relied by the defence counsel.
8. The learned counsel for the complainant submitted that complainant by examining himself as PW.1 and P.Ws.2 and 3 on his behalf and by producing
Ex.P.1 to P.19 has categorically established that all the ingredients of the offence punishable under section 138 of NI Act beyond reasonable doubt. It is further argued that the accused has taken false and baseless defences but there is no piece of evidence placed before the court to support the contention of accused.
The complainant successfully established the existing legally enforceable debt between him and accused, as such, the accused is liable for punishment under
Sec.138 of N.I.Act as she gave the 3 cheques in question without having sufficient funds in her account. It is further submitted by the learned counsel for
Complainant that the Accused has failed to rebut the presumption arising in favour of Complainant/PW1 in terms of sections 118(a) and 139 of the Negotiable
Instruments Act, 1881 hence accused is liable for punishment under section 138 of N.I Act and also that accused is liable to pay compensation to him as per law.
9. On the other hand, the learned defence counsel argued that there is no legally enforceable debt between complainant and accused as such the complainant did not file any civil suit against accused and it is barred by limitation. He further argued that when there is no bar for issuing one cheque why the accused issued three cheque and why the complainant accepted the same and there is no explanation for the same from the complainant. He further argued that complainant intentionally colluded with one Anne Narendra Kumar and presented all the cheques within a gap of 3 days and got returned all the cheque and filed the present complaint and further argued that the accused was not residing in the address mentioned in notice and the said fact having known to the complainant, he intentionally issued legal notice to the wrong address, as such, the complainant failed to prove the guilt of accused under section 138 of NI
Act and the accused is entitled for benefit of doubt, hence prayed the Hon’ble
Court to acquit the accused.
10. Now the point for consideration is:
“Whether the complainant established the essential ingredients of section 138 r/w.142 of N.I.Act, 1881 beyond reasonable doubt to the satisfaction of this Court”?
11. POINT :
Before appreciating the evidence and arguments of both parties, it
would be apt to refer to note the basic ingredients of Section 138 of the Act which are as follows :
(1) A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person out of that account; (2) The cheque should have been issued for the discharge in whole or in part of debt or other liability; (3) That cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (4) that the cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to
honour the cheque or that it exceeds the amount arranged to be paid from the
account by an agreement made with the bank; (5) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (6) The drawer of such cheque fails to make the payment of the said amount of money to the payee or to the holder in due course of the cheque within fifteen days of the receipt of the said notice; (7) the debt or other liability referred to under Sec.138 of N.I.Act means a “legally enforceable debt or other liability”.
It is on compliance of the above ingredients, the drawer of the cheque shall be deemed to have committed the offence under section 138 of the Act.
12.At first instance the complainant need to establish that the Ex.P.4 to P.6 cheques that were alleged to have been issued by the accused presented for collection within the period of its validity. As per the evidence of P.W.1 that the A2 being the managing partner of A1 firm voluntarily issued three cheques in the name of A1 firm i.e., cheque bearing No.000007, dt.15-06-2015 for
Rs.30,00,000/- and cheque bearing No.000008, dt.15-06-2015 for Rs.28,00,000/- and 3rd cheque bearing No.000009, dt.18-06-2015 for Rs.8,31,648/- and all the three cheques were drawn from HDFC Bank, Guntur. Accused promised that they will arrange sufficient funds to honour the said cheques and accordingly the complainant presented the 1st cheque for Rs.30,00,000/- on 27-06-2015 and 2nd cheque for Rs.28,00,000/- on 29-06-2015 for collection at State Bank of India and both the cheques were returned on 30-06-2015 with an endorsement “funds insufficient” and 3rd cheque for Rs.8,38,648/- was presented for collection on 30- 06-2015 and the same was also returned on 02-07-2015 with an endorsement “payment stopped by the drawer” from State Bank of India under Ex.P10 to P.12 to the P.W1. So as seen from all these facts that the complainant presented
Ex.P4 to P.6 cheques with in seven days from the date of issuance of the cheques, as such the complainant presented Ex.P.4 to P.6 cheques within the then limitation period of six months. The learned counsel argued that complainant did not even intimate about the presentation of cheques on the date of presentation. It is the contention of the complainant that at the time of issuing
Ex.P.4 to P.6 cheques, the accused promised that they will arrange sufficient funds to honour the said cheques. No intimation by PW.1 with regard to presentation of cheques prior to presentation of Ex.P.4 to P.6 cheques does not weaken the case of P.W.1 as it is not any of the mandates as contemplated under section 138 of N.I Act. At this juncture, this Court is of the opinion that the accused person who issued the cheques shall be vigilant to maintain her account with sufficient funds after issuance of Ex.P.4 to P.6 to complainant. Therefore, the defence taken by the accused that there is no prior intimation at the time of presentation of Ex.P.4 to P.6 holds no water. Hence, it can be safely presumed that complainant presented Ex.P.4 to P.6 cheques in the bank for collection within six months from the dates mentioned on it.
13. The second ingredient under section 138 NI Act that the complainant has to prove the Ex.P4 to P.6 cheques were dishonored by the bank authorities for one of the reasons which attract the offence under section 138 of Negotiable
Instruments Act, 1881. In order to substantiate the said fact and in pursuance of
Ex.P.4 to Ex.P.6 that A2 being the managing partner of A1 firm voluntarily issued three cheques in the name of A1 firm i.e., cheque bearing No.000007, dated 15-06-2015 for Rs.30,00,000/- and cheque bearing No.000008, dated 15-06- 2015 for Rs.28,00,000/- and 3rd cheque bearing No.000009, dated 18-06-2015 for Rs.8,31,648/- and all the three cheques were drawn from HDFC Bank,
Guntur. Accused promised that they will arrange sufficient funds to honour the said cheques and accordingly the complainant presented the 1st cheque for
Rs.30,00,000/- on 27-06-2015 and 2nd cheque for Rs.28,00,000/- on 29-06-2015 for collection at State Bank of India and both the cheques were returned on 30- 06-2015 with an endorsement “funds insufficient” and 3rd cheque for
Rs.8,38,648/- was presented for collection on 30-06-2015 and the same was also returned on 02-07-2015 with an endorsement “payment stopped by the drawer”.
The nomenclature mentioned in cheque return memo plays a vital role to make out the offence u/Sec.138 of N.I. Act. On a plain and strictly literal reading of
Sec.138 of N.I. Act, it becomes clear that the section refers to dishonour of cheques on two grounds i.e.
1) due to insufficiency of funds in the account to honour the cheque; and
2) the amount of cheque exceeds the amount arranged to be paid from that account by agreement made with the bank.
So in pursuance of Ex.P.10 cheque return memo dt.30.06.2015, Ex.P.11 cheque return memo dt.30.06.2015 and Ex.P.12 cheque return memo dt.02.07.2015, the Ex.P.4 and P.5 cheques were returned for the reason that the funds insufficient in the account of the accused and Ex.P6 cheque return for the reason that ‘payment stopped’ by the drawer, thus the said reasons attracts the provisions of section 138 of Negotiable Instruments Act, 1881. So, that it can be safely presumed that Ex.P.4 to P.6 cheques were returned for the reasons mentioned in Ex.P.10 to P.12 cheque returned memos.
14.Now the next aspect that the complainant has to prove that the drawee issued notice under section 138 of Negotiable Instruments Act, 1881 within the statutory period and that the drawer received the said notice, but failed to make any payment covered by the dishonored cheque. In order to substantiate the said fact that it is the case of the complainant that when Ex.P.4 to P.6 cheques were returned with cheque return memos under Ex.P.10 to P.11, the complainant got issued legal notice on 15.7.2015 under Ex.P.12 to the accused by informing about the dishonor of cheque which proved under Ex.P14 postal receipts two in number and the accused received the same which proved under Ex.P15 postal acknowledgment. On the other hand, it is argued by the learned counsel for accused that the complainant had not filed the acknowledgment of the accused and complainant clearly admitted that accused is not residing in the address given in legal notice and notice was sent to another address where the son-in- law of accused is residing, as such the statutory notice was not served on the accused, hence the present case is not maintainable and the learned counsel relied upon the decision in Md.Thamas vs.PS.Jaleel and another 2010(2) ALT (Crl.) 95 SC,wherein the Hon’ble Supreme Court held that when notice of demand served upon the wife of appellant and not on the appellant, there is no escape from the conclusion that the complainant had not complied with the requirement given notice in terms of clause (b) of provision to sec.138 of N.I.Act and the conviction of appellant cannot be sustained.
15. It is pertinent to note that during cross examination of D.W.1, she clearly admitted that her daughter by name Guntupalli Padmaja and her son-in-law
Guntupalli Srinivasarao were resided in D.No.3-1-188, Brundavan Gardens,
Guntur and further admitted that the address of A.1 firm is the above said address only. Accused No.2 further stated that she resided in krishna nagar, 9th line, Guntur on rent during the life time of her husband which is furlong distance from the house of her son-in-law situated in Brundavan Gardens. Accused No.2 further admitted that as they are residing in a rented house they mentioned their care of address is their son-in-law’s address. From the above admissions, it is clear that A.1 firm address is her son-in-law’s address i.e., D.No.3-1-188,
Brundavan Gardens, Guntur. Further, accused No.2 never denied that service of
Ex.P.14 legal notice to A.1 firm ie, to her son-in-law’s address. It is the only contention of accused is that when accused No.2 is not residing in the given address of A.1 firm, sending of legal notice to A.1 firm address for A.2 is not valid.
At this juncture, this Court is of the opinion that the complainant sent Ex.P.14 legal notice to A.2 as representative of A1 firm but not in individual capacity.
Further, A.2 clearly stated that her son-in-law’s address was shown as her address. It is settled law that the only requirement for the service of demand notice is that the notice should have been sent to the correct address of the drawer. Hence, the service of Ex.P.14 legal notice to A.1 firm address for A.2 as representative of A.1 firm is valid service. Therefore, the contention of defence counsel that statutory legal notice was not sent to the correct address of accused have no legs to stand and the decision relied upon by the learned defence counsel does not applicable to the facts of the present case. Moreover, when the accused failed to give reply after receiving Ex.P14 legal notice, it deemed to be admitted the contents of Ex.P14 legal notice by the accused and when that being so, it is sufficient to come conclusion that the complainant sent the statutory legal notice with in stipulated period of 30 days from the date of Ex.P10 to P.12 returned memos and the same was served to the accused, thereafter the accused neither issued reply nor pay the amount to the complainant.
16.Coming to the next aspect that the complaint was filed within the period of limitation and this court is having jurisdiction or not. On this aspect it is held that the complaint sent Ex.P14 legal notice to the accused on 15.07.2015 and that the accused received the same which was proved under Ex.P16 acknowledgment and the present complaint was filed on 28.8.2015 before this court with in stipulated time as required under law after issuing the legal notice to the accused. Further the Ex.P.4 to P.6 cheques were dishonored within the jurisdiction of this court. Hence, the complaint is filed by the complainant with in time before this court having jurisdiction.
17.In an offence under section 138 of the N.I. Act, the settled law is that the complainant has to discharge his burden that the cheque was issued by accused towards discharge of legally enforceable debt in whole or in part, and compliance of statutory notice and if his demand of payment of cheque amount was not complied by the accused after 15 days of notice, then the statutory presumptions under section 118 and 139 of N.I. Act will arise in favour of the complainant that the said the negotiable instruments has been drawn for consideration and Under section 139 of the Negotiable Instruments Act the court shall presume that the holder of the cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. This presumption is rebuttal. However, the burden of proving that Ex.P.4 to P.6/cheques had not been issued for discharge of debt or liability is on the accused. So, the accused has to prove his contention.
18.It is argued by the defence counsel that accused does not know the complainant and that the alleged cheques were given to her son-in-law by name
Guntupalli Srinivasarao. Due to disputes in between Guntupalli Srinivasarao and his partner Anne Narendra Kumar, the said Anne Narendra Kumar had taken possession of the entire business of her son-in-law ie, GSR cotton traders on 22- 12-2013 and later necked out the Guntupalli Srinivasarao, by that time the cheques belongs to the accused were lying in the said business concern and on finding the cheques of the accused, the complainant and said Anne Narendra
Kumar colluded together and brought the complaint into existence. Hence, no cheques were issued to complainant to discharge of legally enforceable debt as there is no acquaintance between the accused and the complainant and accused have seen the complainant for the first time in the Court only and admittedly the entire transaction was bank to bank transfer, hence the accused does not have knowledge about the receiving the money on 5-9-2014 and withdrawing the amount on the same day by GSR textiles and the said transactions were occurred without knowledge and consent of the accused.
During cross examination, D.W.1 clearly admitted that the complainant is the friend of her son-in-law Guntupalli Srinivasarao and the signatures on Ex.P.4 to P.6 are belongs to her and further she volunteers that she does not know any transactions with regard to A.1 firm and Guntupalli Srinivasarao used to look after the affairs of A.1 firm and on his request only she put her signatures on Ex.P.4 to
P.6. D.W.1 further stated that she does not know the particular date when one
Narendra Kumar was joined as partner in GSR cotton traders. If really the contention of accused No.2/D.W.1 is true, it is not known as what prevented accused No.2 to examine her son-in-law by name ie, Guntupalli Srinivasarao on her behalf to prove that the alleged cheques Ex.P.4 to P.6 were given to her son- in-law but not to complainant. Though the learned counsel for accused argued that accused No.2 has seen the complainant for the first time in the Court, she clearly admitted during her cross examination that the complainant is friend of her son-in-law Guntupalli Srinivasarao. As such, it is clear that D.W.1 has acquaintance with the complainant. Furthermore, if really the said contention of the accused to be true that the alleged cheques were left in GSR cotton traders which is her son-in-law’s firm, no person would sit quiet and certainly they would have informed the said fact to his bank authorities by giving instructions and also would lodge the report or would take appropriate steps but A2 did not do so for the best reasons known to her. To prove the contention of the accused, she did not place any iota of evidence before this Court and did not take any steps against the said Anne Narendra Kumar. On careful perusal of the entire evidence record, except the oral contention of the accused, no piece of evidence available on record in support of her contention that she never issued Ex.P.4 to
P.6 cheques to complainant to discharge of legally enforceable debt. For the above said reasons, it is difficult to believe the contention of the learned defence counsel to rebut the presumption available in favour the complainant. Hence, this court finds the probabilities are lying in favour of the complainant.
19. The learned counsel for defence further argued that the alleged debt was fictitious debt as such the complainant had not filed the civil suit and admittedly there is no proper receipt or pronote for the alleged debt, hence there is no legally enforceable debt between the complainant and accused. The learned defence counsel relied upon the decisions in Sri Haren Mudui Vs. Sri Don
Ayengia (2014)3 CCC 792- wherein the Hon’ble Gauhati High Court held that debt which cannot be recovered in civil suit cannot be allowed to be recovered by way of instituting criminal cases under Sec.138 of N.I.Act and in Sammeta Srihari vs. State of A.P (2015)CCC 724 wherein the Hon’ble High court held that when there is no proof for hand loan, regarding the source of amount available with him and acquaintance for lending amount without taking receipt or letter or undertaking or promissory note or the like, no foundation was laid to give credence to the version of complainant.
The preposition of law laid down in the above decisions does not applicable to the present case on hand as it can be seen from the record that it is undisputed fact that an amount of Rs.58,00,056/- from the account of complainant firm i.e., SBI Main Branch, Nagarampalem branch, Guntur through
RTGS to the account of A1 firm at Andhra Bank, SME Branch, Saibaba road,
Guntur and Ex.P.17 statement of account of complainant clearly shows the transfer of amount of Rs.58,00,056/- to the account of A1 firm from the complainant firm. Further, it is well settled law that the complaint for offence punishable under section 138 of N.I Act would be maintainable, notwithstanding recovery proceedings initiated by institution of civil suit, though both spring from the same cause of action. At this juncture, this court feels it is just and necessary to mention that filing of a civil suit is not prerequisite for initiating complaint under section 138 of N.I Act basing on cheque issued towards discharge of legally enforceable debt. Hence, the question whether there is any pronote or receipt for the transfer of amount to the account of A1 firm does not arise and it makes no difference or it will not exculpatethe accused of the offence under Sec.138 of
N.I.Act. If that is so, though the complainant had not filed civil suit, it cannot be said that the debt amount cannot be recovered in a civil suit when there is clear proof of transfer of debt amount to the account of A1 firm.
The learned defence counsel further argued that when the accused requested the complainant for amount was not mentioned in the complaint and there are no previous transactions exists in between the complainant and the accused No.2 who is a home maker and the entire business transactions were looked after by her son-in-law so that she never requested the complainant for lending amount.
By way of reply, the counsel for the complainant has submitted that it is clearly mentioned in the complaint that at the request of accused, the complainant transferred the amount of Rs.58,00,056/- to the account of A.1 firm on 05-09- 2014. In the present case on hand, it is an undisputed fact that A.1 firm is in the name of A.2 and an amount of Rs.58,00,056/- was transferred from the account of complainant firm i.e., SBI Main Branch, Nagarampalem branch, Guntur through RTGS to the account of A1 firm on 05-09-2014. If that is so, the question whether there are any previous transactions exists in between the complainant and the accused No.2 is irrelevant to this case. Further, this Court is of the opinion that when there is no dispute about the transfer of amount from the account of complainant to the account of A.1 firm on 05-09-2014, there is no necessity to mention particular date when the accused requested the complainant for amount. Moreover, except the oral evidence of accused there is no piece of evidence available on record to prove that the son-in-law of A.2 looked after the entire business transactions of A.1 firm. Admittedly, A.2 is the managing partner of A.1 firm ie, Kalyana Lakshmi Narasimha Traders. Hence, this Court does not find any merits in the contention of the learned defence counsel as accused did not adduce any probable evidence in support of their contention that A2 never requested complainant for lending amount and her son- in-law by name Guntupalli Srinivasa rao used to look after entire business transactions of A firm.
20. It is further argued by the learned counsel for accused that when there is no bar for issuing one cheque for the entire amount why the accused issued three cheques and why complainant accepted the same, there is no explanation for the same from the complainant and further the complainant presented 3 cheques on different dates within gap of 3 days and got returned all the cheques and filed the present complaint. The counsel for the complainant argued that the complainant presented 3 cheques on different dates with a hope that cheques may be honoured but not to get return those cheques. By considering the above rival submissions, this Court finds it necessary to mention that it is the burden of the accused to explain why A.2 has issued 3 cheques to complainant towards discharge of legally enforceable debt but it is not on the complainant. Further, there is no legal impediment for not to present remaining cheques by the complainant after the first cheque was dishonoured. Hence, the contention of the learned defence counsel has no legs stand to rebut the presumption available in favour of the complainant.
21. It is further argued by the learned defence counsel that during cross examination complainant stated that accused will return the amount in 10 days which reveals that there is no interest clause but contrary to the same the complainant claimed interest over the said amount and when there is no interest clause, the question of issuing 3rd cheque towards interest will not arise. By way of reply, the learned counsel for complainant submitted that due to acquaintance with the family of accused, the complainant transferred amount to the account of
A.1 firm at their request and when accused fell due A.2 voluntarily issued three cheques towards discharge of the said debt along with accrued interest. On perusal of the complainant, it is clearly mentioned that accused agreed to pay interest at 18% p.a from 05-09-2014 and by 15-06-2015 the accused fell due of
Rs.66,31,648/- and towards discharge of the said debt along with accrued interest the accused voluntarily issued three cheques. Further Ex.P.13 legal notice also shows that accused borrowed an amount of Rs.58,00,056/- from complainant and at her request only the said amount was transferred to the firm account of accused and further towards discharge of the said debt along with accrued interest accused voluntarily issued 3 cheques. Hence, it is clear that complainant nowhere stated that he lend amount to accused without any interest.
It can be seen from the cross-examination of P.W.1 that he stated at the request of accused he lend Rs.58,00,000/- and promised to pay the same within 10 days on that he transferred the said amount through RTGS but the complainant never stated he lend amount without any interest. As such, the defence counsel fails to elicit whether the complainant has lend money to Pw.1 for 10 days either with interest or interest free debt. Therefore, the contention of defence counsel that complainant claimed interest over the debt amount even there is no interest clause cannot be considered to discard his entire evidence which is trustworthy and credible. The accused No.2 has failed to put forth satisfactory evidence to rebut the statutory presumption raised under Sec.138 of N.I.Act in favour of complainant.
22.At this juncture, this court feels that it is necessary to mention that the Hon’ble Apex Court in full bench judgment of “Rangappa Vs Sri Mohan ”(2010 (3) Crimes (SC) 40), it was settled that “S.139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under
Section 139 , the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail.”
The Hon’ble Apex Court in its recent Full Bench Judgment between “M/s. Kalamani Tex Vs. P. Balasubramanian” dated 10.02.2021 reiterated that “ ‘reverse onus’ clauses under Section 118 and 139 of Negotiable Instruments Act become operative once the signature (s) of an accused on the cheque are established. Though, the presumptions raised under Section 118 and 139 are rebuttable in nature, a probable defence needs to be raised, which must meet the standard of “Preponderance of probability”, and not mere possibility”.
In present case on hand, as the complainant/PW1 has proved the essential ingredients of the offence under Section 138 of N.I. Act with respect to the drawing of cheques Exs.P4 to P6 towards legally existing debt and presentation of cheques into the bank, returning of cheques unpaid by the drawer bank for the reason ‘funds insufficient' under Ex.P1o to P12, giving notice in writing to the accused demanding the payment of cheque amount under Ex.P13 and its postal receipt under Exs.P14 to 16 and failure of the accused to make payment of the demanded cheque amount within the statutory period of 15 days, the presumption under Section 139 of NI Act is very much available to the complainant that the cheques Ex.P4 to 6 had been issued for the full payment of legally enforceable debt. The accused could not rebut the said statutory presumptions in favour of complainant under section 139 of NI Act by adducing acceptable evidence or by eliciting anything against the case of complainant in the cross-examination of P.W.1 or through his evidence as DW.1 even by preponderance of probability or by improbabalizing the case of the complainant.
Thus this court considering the evidence and material on record concludes that accused Nos.1 and 2 committed offence punishable under Section 138 of
Negotiable Instrument Act and the accused are liable for punishment under
Section 138 of N.I. Act. Accordingly Point is answered in favour of complainant and against accused.
23. In view of my forgoing discussion, this Court is of the considered view that the accused failed to put forth probable defence to rebut the presumption raised in favour of the complainant under section 139 of Negotiable Instruments Act, 1881 and on the other hand, the complainant proved all the essential ingredients to attract the provisions for the offence under section 138 of Negotiable
Instruments Act, 1881. Under such circumstances, this Court comes to the conclusion that the accused has not made out even a prima facie case that the cheques were not issued in discharge of debt or other liability. Hence, in view of the above circumstances accused are liable for punishment U/s.138 of N.I. Act.
24.In the result, accused Nos.1 and 2 are found guilty for the offence punishable under section 138 of N.I Act and as such the accused Nos.1 and 2 are convicted under section 255 (2) of Cr.P.C.
Typed to my dictation directly on computer to the Stenographer Gr.III, corrected and pronounced by me in open court, this the 25 th day of February,2025.
Sd/-G.Sravanthi
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
25.When questioned accused No.2 representing A.1 company on quantum of sentence to be imposed against her, she submitted that she is 70 years old and suffering with age old aliments and further submitted that she is widow and she has nobody to take care of her and requested the court to take lenient view while imposing sentence. As the offence proved against accused is economic offence, this court is not inclined to impose only fine in this case. In view of the nature of the offence and the facts and circumstances of the case, it is not a fit case to invoke the benevolent provisions of the Probation of Offenders Act or Sec.360 of
Cr.P.C. However, considering the submissions of the accused No.2, this court feels that the following sentence would meet the ends of Justice.
i) Accused No.2 representing A.1 companyis sentenced to undergo simple imprisonment for a period of three (3) months for the offence punishable under
Sec.138 of N.I Act and further accused Nos. 1 and 2 are directed to pay the total amount under three cheques i.e., Rs.,67,31,648/- (Rupees Sixty seven laks thirty one thousand six hundred and forty eight only/-) to the complainant towards compensation under Sec.357(3) Cr.P.C., ii) Accused Nos.1 and 2 are directed to deposit the said compensation amount of Rs.67,31,648/- (Rupees Sixty seven laks thirty one thousand six hundred and forty eight only/-) before the court within one month from this day, failing which the same shall be recovered as per the procedure envisaged under
Sec.421 of Cr.P.C and if it is not recoverable, and in default of payment of the compensation, the accused No.2 shall further undergo simple imprisonment for a period of two (2) months.
iii) The remand period of the accused No.2, if any, shall be given set off
U/Sec.428 Cr.P.C.
iv) Accused No.2 is informed that she has right to get free copy of
Judgment and she has right to approach the appellate Court to prefer appeal and also legal assistance from District Legal Services Authority, Guntur if she is entitled to Legal Aid for appeal.
Typed to my dictation directly on computer to the Stenographer, corrected and pronounced by me in open court, this the 25 th day of February,2025.
Sd/-G.Sravanthi
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Prosecution:
PW.1:Gonuguntla Anjaiah.
PW.2:G.V.Chandra Sekhar.
PW.3:Y.Srinivasa Rao.
For Defence : DW.1:Chadalawada Sampath Kumari.
DOCUMENTS MARKED
For Prosecution: Ex.P1:Notarized attested copy of VAT registration certificate in the name of complainant firm dt.11.4.2005.
Ex.P2:Notarized copy of partnership deed of M/s.Sri Chinmaya Trading Company, dt.20.12.1996.
Ex.P3:Notarized copy of deed of admission-cum-retirement dt.31.03.2004.
Ex.P4:Cheque bearing No.000007 issued by the accused dt.15.06.2015 drawn on HDFC Bank, Guntur for Rs.30 lakhs.
Ex.P5:Cheque bearing No.000008 issued by the accused, dt.15.06.2015 drawn on HDFC Bank, Guntur for Rs.28 lakhs.
Ex.P6:Cheque bearing No.000009 issued by the accused, dt.18.06.2015 drawn on HDFC Bank, Guntur for Rs.8,31,648/-. Ex.P7:Counter foil for deposit of cheque Rs.30 lakhs dt.27.06.2015.
Ex.P8:Counter foil for deposit of cheque Rs.28 lakhs dt.29.06.2015.
Ex.P9:Counter foil for deposit of cheque Rs.8,31,648/- dt.30.06.2015.
Ex.P10:Cheque return memo dt.30.06.2015 for return of cheque bearing No.000007 for Rs.30 lakhs.
Ex.P11:Cheque return memo dt.30.06.2015 for return of cheque bearing No.000008 for Rs.28 lakhs.
Ex.P12:Cheque return memo dt.02.07.2015 for return of cheque bearing No.000009 for Rs.8,31,648/-.
Ex.P13:Office copy of legal notice dt.15.07.2015.
Ex.P14:Postal receipts (2 in number).
Ex.P15:Complaint for want of postal acknowledgment addressed to Superintendent of post office dt.08.08.2015.
Ex.P16:Copy of acknowledgment issued by postal department.
Ex.P17:Statement of account of complainant firm issued by SBI, Kannavarithota, Guntur from 01.09.2014 to 25.10.2014.
Ex.P18:Ledger account of Kalyani Lakshmi Narasimha cotton traders maintained by complainant,
Ex.P19 is the statement of account of accused.
For Defence : --NIL--
Material objects marked
-- NIL –
Sd/-G.Sravanthi
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
//TRUE COPY //
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
CALENDAR AND JUDGMENT
: IN THE COURT OF THE JUDICIAL MAGISTRATE OF FIRST CLASS :
SPECIAL MOBILE COURT, GUNTUR.
C.C.No.698/2015
01. Date of offence: 02.07.2015
02. Date of Filing: 19.10.2015
03. Date of Apprehension of accused: --
04. Release on bail: --
05. Commencement of trial: 06.06.2016
06. Closure of trial: 21.09.2023
07. Date of Judgment : 25.02.2025
08. Explanation for delay: After appearance of the accused Nos.1 and 2,copies of case documents were furnished to them on 07.12.2015, on 08.02.2016, they were examined under Sec.251 of Cr.P.C for the offence under Sec.138 of N.I.Act. On 06.06.2016, PW.1 was examined and Exs.P1 to P18 marked, on 27.04.2017, PWs.2 and 3 were marked and Exs.P19 and prosecution evidence was closed on 21.09.2023. On 05.10.2023, they were examined under Sec.313 of Cr.P.C, by explaining the incriminating material in the evidence of prosecution witnesses, for which, he denied the same and reported defence evidence. On 06.08.2024, A2 examined as DW.1 and the defence evidence was closed on 22.08.2024. On 08.10.2024 heard arguments of learned counsel for complainant and on 16.10.2024, heard the arguments of learned counsel for accused. Judgment pronounced on 25.02.2025
09. Name of the complainant:
Sri Chinmaya Trading Company,Represented by its Managing Partner Gonuguntla Anjaiah, S/o.Govinda Rajulu,A/46 years, R/o.Veera Venkateswara Cotton Mills, Kamma Seshaiah Ground, Etukuru road,Etukuru road.
10. Name of the accused :
1. Kalyana Lakshmi Narasimha Traders, Represented by its Managing Partner, Chadalawada Sampath Kumari,W/o.Sankara Rao, A/55 years, R/o.D.No.3-1-188, Brundavan Gardens, Guntur.
2. Chadalawada Sampath Kumari, W/o.Sankara Rao, A/55 years, R/o.D.No.3-1-188, Brundavan Gardens, Guntur.
11. Offences : U/Sec.138 of N.I.Act.
12. Plea of the accused : Not guilty
13. Finding : Found guilty
14. Sentence : Accused Nos.1 and 2 are found guilty for the offence punishable under section 138 of N.I Act and as such the accused Nos.1 and 2 are convicted under section 255 (2) of Cr.P.C.Accused No.2 representing A.1 company is sentenced to undergo simple imprisonment for a period of three (3) months for the offence punishable under Sec.138 of N.I Act and further accused Nos. 1 and 2 are directed to pay the total amount under three cheques i.e.,Rs.,67,31,648/- (Rupees Sixty seven laks thirty one thousand six hundred and forty eight only/-) to the complainant towards compensation under Sec.357(3) Cr.P.C.,ii) Accused Nos.1 and 2 are directed to deposit the said compensation amount of Rs.67,31,648/- (Rupees Sixty seven laks thirty one thousand six hundred and forty eight only/-) before the court within one month from this day, failing which the same shall be recovered as per the procedure envisaged under Sec.421 of Cr.P.C and if it is not recoverable, and in default of payment of the compensation, the accused No.2 shall further undergo simple imprisonment for a period of two (2) months.iii) The remand period of the accused No.2, if any, shall be given set off U/Sec.428 Cr.P.C. iv) Accused No.2 is informed that she has right to get free copy of Judgment and she has right to approach the appellate Court to prefer appeal and also legal assistance from District Legal Services Authority, Guntur if she is entitled to Legal Aid for appeal. (As per the order in Crl.M.P.No.280/2025, dt.25.02.2025, sentence is suspended till 25.03.2025)
Sd/-G.Sravanthi
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
Copy submitted to: The Hon’ble Chief Judicial Magistrate, Guntur.