Smt. K.Vani, AJCJ

DISTRICT OF ANANTAPUR

Calender cases tried by the Addl. Judicial First Class Magistrate, Anantapur.

Date of:

Offence Report or Apprehension Released Commence­ Close Sen­ Re­

Complaint of accused on bail ment of of tence marks

trial tria

15­9­07 10­12­07 ­­ ­­ 23­9­11 4­1­12 1­2­2012 ­­

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

Judgment in Calender Case No. 570/2009 on the file of the Addl. Judl. I Class 

Magistrate, Anantapur.

Complainant: M/s Shriram City Union Finance Limited, Represented by its

General Power of Attorney Holder, K.Shafiullah, S/o.K.Khasim 

Peera, Aged about 40 years, Residing at D.No.9/57, Guljar Pet,

Anantapur.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

S.No. Name of Father’s AgeReligion Calling Residence 

the accused name

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ ­­ K.Jagan Mohan Reddy, S/o Jayarami Reddy, Hindu, Aged about 42 years

Residing at D.No.1-647, Rudrampeta, Anantapur Rural. --------------------------------------------------------------------------------------------------------------

Offence: U/s 138 of Negotiable Instruments Act.

Finding: Found guilty.

Sentence: Accused is found guilty for the offence punishable under section 138 of Negotiable Instrument Act and he is convicted for the same under section 255(2) Cr.P.C. and he is ordered to pay fine of cheque amount i.e., Rs.53,336­00 in two instalments in one month and complainant is directed to take the cheque amount after expiry of appeal time. In default of payment of fine he will undergo simple imprisonment for a period of one month (as per the Judgment in Hari Singh (Vs) Subkhbir Singh (AIR 1988 (S.C) 2127)). The already undergone period will be set off under Section 428 Cr.P.C. The accused is informed about his right of appeal against this judgment and he stated that he has means to contest the case at appellate stage.

Addl. Judicial Magistrate of I Class,

Anantapur. 

Date of Dispatch

Date of Receipt

Copy submitted the I Addl. District Judge, Anantapur.

Copy to the Superintendent of Police, Anantapur.

2

IN THE COURT OF THE ADDL. JUDICIAL MAGISTRATE OF I CLASS,

ANANTAPUR.

Present : Smt. K.Vani, B.A., LL.B., Addl. Judicial Magistrate of I Class,

Anantapur.

Wednesday, the 1 st day of February, 2012.

CALENDER CASE No. 570/2009

Between:-

M/s Shriram City Union Finance Limited, Represented by its General Power of Attorney Holder, K.Shafiullah, S/o.K.Khasim Peera, Aged about 40 years, Residing at D.No.9/57, Guljar Pet, Anantapur. … Complainant.

And

K.Jagan Mohan Reddy, S/o Jayarami Reddy, Hindu, Aged about 42 years, Residing at D.No.1-647, Rudrampeta, Anantapur Rural. … Accused.

This case is coming on 27-1-2012 for final hearing before me in the presence of Sri L.K.Sudheendranath, Advocate for the complainant and of Sri G.Sreedhar Reddy, Advocate for the accused and upon hearing on both sides, and on perusing the material on record and the matter having stood over for consideration till this day, and this Court delivered the following:-

J U D G M E N T

The complainant filed a complaint against the accused under Section 200 of Cr.P.C. under Section 138 and 142 of the Negotiable Instruments Act, r/w section 420 of I.P.C.

2. The brief facts of the complaint are as follows:

The complainant is M/s.Shriram City Union Finance Limited, a company registered under Companies Act, 1956, having its registered office at 123,

Angappa Naicken Street, Chennai 600001, and branches spread all over India, including one such branch at No.15,16 and 17, Sri Vishnupriya Complex,

Subash road, Anantapur, represented by its General Power of Attorney Holder

K.Shafiullah, son of K.Khasim Peera, aged about 40 years, residing at

D.No.9/57, Guljar Pet, Anantapur. The complainant-company is engaged in the business of financing consumer loans for the acquisition of consumer articles.

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The accused obtained a loan from the Complainant-company for the purpose of purchasing consumer articles TATA TRUCK 407 as per the terms and conditions of the loan Agreement dated.27-12-2005 bearing No.110. As per the terms and conditions of Loan Agreement and Letter of offer, dated.27-12-2005 the accused has to repay the loan amount by way of monthly instalment post dated cheques and accordingly when the complaint company demanded the accused for payment of due under the loan account, the accused issued the cheque bearing No.611541, dated.15-9-2007 drawn on Karur Vysya Bank,

Anantapur for Rs.53,336-00 towards discharge of part of his liability under the above said loan agreement. The complainant presented the said cheques to its banker ING Vysya Bank Limited, Anantapur within the period of the validity i.e., on 25-9-2007. The complainant company received the information from its Banker, that the said cheques were dishonoured for the reason insufficient funds vide banker’s memo dated.25-9-2007. The complainant submits that the accused knowing fully well that he had no sufficient amount in his account to honour the cheque and the cheque was issued by him would be dishonoured has dishonestly issued the same to the complainant. The accused owes liability to the complainant company as per the terms and conditions of the loan agreement and the loan contracted by the accused from the complainant company, is a legally enforceable debt or liability. He has got issued legal notice dated.19-10-2007 by registered post with acknowledgment due, to the accused appraising the accused of the above said fact of return of the cheques as unpaid and calling upon him to make the payment of the amount covered by the cheques within fifteen days of its receipt, and as otherwise about the initiation of private complaint against the accused under

Section 138 of Negotiable Instruments Act. The said notice was not served and returned on 31-10-2007 and the accused failed to make payment of the said amount of cheques till today. Thus, the accused committed offences punishable under Section 138 and 142 Negotiable Instruments Act r/w 420 of

I.P.C and is liable to be prosecuted for the same. Hence, the complainant has filed the complaint. It is therefore, prayed that the court may be pleased to punish the accused for the offence under Section 138 of Negotiable

Instruments Act and order for payment of compensation out of the fine amount 4 to the complainant company under Section 357 of Cr.P.C and thus render justice.

3.The Court perused the contents in the complaint and recorded the sworn statement of the complainant and took cognizance of offence under section 138 of Negotiable Instrument Act against the accused.

4. On appearance of accused, he was furnished with all the copies of documents under section 207 of Cr.P.C. on which the complainant relies his case.

5. The accused was examined under Section 251 Cr.P.C and the substance of accusation for the offence under Section 138 of Negotiable Instruments Act against the accused was read over and explained to him in Telugu, to which he pleaded not guilty and claimed to be tried.

6.To prove the case of the complainant, the complainant himself examined as P.W.1 and also examined P.W.2 and marked Exs.P.1 to P.8 on his behalf.

7.After closure of complainant’s side evidence, the accused was examined under Section 313 Cr.P.C and explained the incriminating evidence found against him in the evidence adduced by the complainant’s witnesses, for which he denied the same and reported no defence evidence on his behalf.

8. Heard the arguments both sides and perused the entire material on record.

9. Now the point for determination is:

“ Whether the complainant has proved the guilt of the accused for the offence punishable under section 138 of

Negotiable Instruments Act beyond all reasonable doubt ”

10. POINT:­

To prove the case of the complainant, the complainant got himself examined as P.W.1 and also examined P.W.2.U.V.K.Kishore Varma who is Manager of Karur Vysya Bank and exhibited Exs.P.1 to P.8. Ex.P.1 is the certified copy of General Power of Attorney, Ex.P.2 is the authorization letter given in the name of P.W.1, Ex.P.3 is the cheque, Ex.P.4 is the Bank returned memo, Ex.P.5 is the office copy of legal notice and Ex.P.6 is the unserved registered postal cover, Ex.P.7 is the attested copy of CLRC extract and Ex.P.8 is the attested copy of account extract of accused.

5

11.As it is a case under Section 138 of Negotiable Instrument Act, to prove the guilt of the accused, the complainant has to prove the following ingredients:

(1)That the cheque issued by the accused was presented for collection within the period of its validity ? (2) That the cheque was dishonoured by the bank authorities for one of the reasons which attracts the offence Under Sec. 138 of N.I.Act ? (3) That the drawer issued notice to the accused Under Sec 138 of N.I. Act within the statutory period ? (4) That the drawer received the said notice but failed to make any payments covered by the dishonoured cheque within the stipulated time as mentioned in Section 138 of N.I.Act 1881 ? (5) That the complaint was filed within the period of limitation of prescribed by law in the court having jurisdiction ? (6) That a prima facie proves that the cheque was issued in discharge of any legally enforceable existing debt ?

12.POINT No.1:-

As per the evidence of P.W.1, accused obtained loan from the complainant company for purchasing the consumer articles Tata truck-407 and entered into an agreement bearing No.110/05 with the complainant company dated.27-12-2005. As per the terms and conditions of loan agreement and letter of offer dated.27-12-2005, the accused has to repay the loan amount by way of monthly installment post dated cheques. Accordingly, on demand the accused has issued the following cheque out of four cheques.

The cheque bearing No.611541, dated.15-9-2007. The same was presented by the complainant through its bank ING Vysya Bank, Anantapur on 25-9-2007.

So it means within the period of validity. The said cheque i.e., Ex.P.3 was presented into the court for collection. Hence, Ex.P.3 is presented within the limitation prescribed by the Act. Hence, this point is answered in favour of the complainant and against the accused.

13.PONIT No.2:-

As per the evidence of P.W.1, accused issued post dated cheques for the discharge of loan amount and that cheque was presented

before bank for collection on 25-9-2007. The said cheque was returned with an

endorsement insufficient funds. Accordingly, memo also issued on 25-9-2007.

On careful perusal of Ex.P.4 it was returned as insufficient funds. As the bare 6 reading of nomenclature of section 138 of Act there are only two grounds i.e., (1) When the cheque was returned with funds insufficient and (2) When the amount not arranged for. In those circumstances only the cheque returned and section 138 of Negotiable Instruments Act and attracts. In this case Ex.P.3 returned as funds insufficient in the accused account.. So in this case it clearly attracts the 1st limb of the definition. This point is answered in favour of the complainant and against the accused.

14.POINT Nos.3 to 5:-

As per the evidence of P.W.1, after return of Ex.P.3 as funds insufficient in accused account, complainant has got issued legally notice dt.19-10-2007 by registered post with acknowledgment due to the accused, but the same was returned as unserved on refusal on 31-10-2007.

It means the complainant got issued legal notice within the stipulated period prescribed by the Act and the same was returned as undelivered on 31-10- 2007. On careful perusal of Ex.P.5 i.e., legal notice issued to the accused. As per Ex.P.6 it is an unserved postal cover returned as refused. It is a fact that when the person refuses to receive legal notice it is presumed to be served on that person. In this case also Ex.P.6 discloses that it was returned as refused.

On careful perusal of complaint the accused address also mentioned correctly and in that Calender Case summons also served to the same address, after receipt of the summons the accused appeared before this court. So it means the accused wantonly refused to receive the legal notice. As per General

Clauses Act it should be presumed that legal notice was served on the accused. Hence, the complainant got filed the present complaint on 10-12- 2007 i.e., within the stipulated period prescribed by the Act. The complainant filed the present complaint before Addl. Judicial First Class Magistrate Court,

Anantapur where Ex.P.3 was returned from Karur Vysya Bank, Anantapur within the jurisdiction of this court. Hence, this court is having jurisdiction to try the present complaint. Hence, this point is answered in favour of the complainant and against the accused.

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15.POINT No.6:-

As per the evidence of P.W.1, he is a General Power of

Attorney Holder to represent the complainant’s complaint. To that effect, true copy of authorization also filed i.e., Ex.P.2. As per his evidence accused obtained loan from the complainant company for purchasing the consumer articles Tata truck-407 and entered into an agreement bearing No.110/05 with the complainant company dated.27-12-2005. As per the terms and conditions of the agreement the accused has to pay loan installments monthly. But has not repaid the same and made default in payment of the same. For that loan amount accused also issued post dated cheques. Ex.P.1 is one of that cheque.

The same was presented on 25-9-2007 and the same was returned as insufficient funds in accused account. The complainant also issued Ex.P.5 legal notice to the accused, but the same was refused, then the present complaint filed. The counsel for the complainant argued that the accused obtained loan from complainant company and executed an agreement in favour of the complainant and also agreeing to repay the same in monthly instalments to the loan amount and also issued cheques. When one of the cheque was presented before the Bank the same was returned as funds insufficient. Then he got issued a legal notice dated.19-10-2007, but the same was returned as unserved. Further argued that, they proved the ingredients of Section 138 of

Negotiable Instruments Act and further argued that Ex.P.3 was issued only for legally enforceable debt towards loan amount. Further argued that accused knowingly fully well that he has no sufficient amount in his account to honour the cheques issued and the cheques issued by him would be dishonoured.

Further argued that accused owes liability to the complainant as per the terms and conditions of loan agreement and the loan obtained by the accused is legally enforceable debt or other liability and prays to punish the accused according to law.

16. On the other side, the counsel for the accused argued that, accused not issued cheques for legally enforceable debt and the date and month was not mentioned in the complaint when loan transaction was took place. Agreement not produced before this court. Further argued that during the cross- examination of P.W.1 they have elicited that at the time of issuance of cheque 8 there is no legally enforceable debt and complainant not filed relevant documents before this court and prays to acquit the accused.

17.As per the contention of the counsel for the accused they have not filed relevant documents. They have not mentioned the date and time of the loan and there is no legally enforceable debt and Ex.P.3 was not issued for legally enforceable debt. It is not the case of the accused that he has not obtained loan from the complainant company and it is not the case that he has paid entire loan amount to the complainant company. As per the contention of counsel for the accused, Ex.P.1 was not issued for legally enforceable debt.

cheques were obtained prior to granting of loan. So there were no legally enforceable debt. As per the Contract Act, debt are three types past, present and future debts. It can be assumed Ex.P.3 was given for future debt. But during cross-examination of P.W.1, P.W.1 deposed that Ex.P.1 was not given at the time of granting loan to the accused. It was given when they went for collection of instalments amount, at that time the accused given the same. So it means Ex.P.3 was not issued prior to the sanction of loan amount. It was issued when the representative of complainant company went to the accused for collection of installment amount. On careful perusal of complaint it is clearly mentioned that accused obtained loan from the complainant company and also executed loan agreement dated.27-12-2005 bearing No.110/05. So it is clearly mentioned when the accused entered into agreement with the complainant company. Moreover, in this case no reply of legal notice issued to the complainant company. Ex.P.6 was returned as refused. Moreover, accused not filed receipts into the Court. What prevented the accused to file receipts if really he had made payments to the entire loan. When the issuance of cheque is admitted by the accused, the presumption under Section 118 and 139 of Negotiable Instruments Act will come to the rescue of P.W.1.

18.In general law the accused is presumed to be innocent and an unshifted burden of proof beyond reasonable doubt is on the shoulders of the prosecution. But the offence punishable under Section 138 of Negotiable

Instruments Act, 1881 which is made under special enactment, wherein the mandatory presumption of law under Section 118 and 139 of Negotiable

Instruments Act, 1881 prescribed. Section 118-A of the Act says that there shall 9 be a presumption until the contrary is proved that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred was accepted endorsed negotiated or transferred for consideration. Section 139 of the Negotiable

Instruments Act says that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in

Section 138 of the Negotiable Instruments Act, for the discharge, in whole or in part, of any debt or other liability. The term of “cheque of the nature” referred to in Section 138 of the Negotiable Instruments Act appeared in Section 139 of

Negotiable Instruments Act means any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from and out of that account for the discharge, in whole or in part, of any debt or other liability, which is returned unpaid by the bank either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank. Hence, the presumption under Section 118-A of the Negotiable Instruments Act will come into picture to say that the cheque is supported by consideration. The presumption under Section 139 of Negotiable Instruments Act is explanatory and supplementary to the presumption under Section 118-A of the Act to show that the cheque was received by the holder for the discharge of debt or other liability. Therefore, this Court has to draw presumption that Ex.P.3 was issued for legally and enforceable debt when the accused not denying the issuance of the same and that all the accused not rebutted the presumption under Section 118 and 139 of Negotiable Instruments Act as the burden always cast upon the accused to rebut the such presumption. When accused rebutted such presumption again the burden shifted on the shoulders of the complainant to prove the existence of debt or other liability for discharge of which the cheque was issued. The same principle is discussed in a decision reported in 2001 (2)

ALD (Crl) 234 (SC) between Hiten P.Dala Vs Bratindranath Banerjee

and another clearly discussed unless the contrary is proved appeared

in Section 139 of Negotiable Instruments Act held that presumption

has to be rebutted by proof and not by bare explanation which is

10 merely plausible. Further, decision reported in 2001(2) (Crl) 824, S.C

between K.N.Beena Vs Muniyappa and another their Lordship

reiterating the Law written in above decision “ under section 139 of

N.I.Act the Court has to presume unless contrary was proved that

holder of the cheque received the cheque for discharge in whole or in

part of debt or liability. It was further held in all complaints u/s 138 the

Court has to presume that cheque has been issued for a debt or

liability. However, the burden of proof that cheque has not been

issued for a debt or liability on the accused. ”

It is no doubt the said presumption is rebutted by placing any evidence or material on record or any other evidence. But in this case accused not rebutted the said presumption available under Section 118 and 139 of

Negotiable Instruments Act by placing cogent and clinching evidence and also by showing any other material on record. Hence, it can be presumed that

Ex.P.3 was issued for legally enforceable debt towards loan amount dated.27- 2-2005. This point is answered in favour of the complainant and against the accused. As all the points are answered in favour of the complainant, the complainant proved the case beyond all reasonable doubt and proved that

Ex.P.3 was issued for legally enforceable debt and therefore, the accused is convicted.

Dictated to the Personal Assistant, transcribed by her, corrected and

pronounced by me in open court, this the 1stday of February, 2012.

Addl. Judicial Magistrate of I Class,

Anantapur.

19. Accused is questioned with regard to quantum of sentence he stated that he is having wife and children and he is driver and he is the sole bread winner for entire his family. He is also suffering from ailments and prays to take a lenient view. As there is clear evidence of P.Ws.1 and 2, I am not inclined to apply the Probation of Offenders Act to the present case as it is a economical offence.

20.In the result, the accused is found guilty for the offence punishable under Section 138 of Negotiable Instruments Act and he is convicted for the 11 same under Section 255(2) Cr.P.C. and he is ordered to pay fine of cheque amount i.e., Rs.53,336-00 in two instalments in one month and complainant is directed to take the cheque amount after expiry of appeal time. In default of payment of fine he will undergo simple imprisonment for a period of one month (as per the Judgment in Hari Singh (Vs) Subkhbir Singh (AIR 1988 (S.C) 2127))

The already undergone period will be set off under Section 428 Cr.P.C. The accused is informed about his right of appeal against this judgment and he stated that he has means to contest the case at appellate stage.

Dictated to the Personal Assistant, transcribed by her, corrected and

pronounced by me in open court, this the 1stday of February, 2012.

Addl. Judicial Magistrate of I Class, Anantapur.

Appendix of evidence

Witnesses examined for

Complainant Accused

1. P.W.1: T.Hanumanna None.

2. P.W.2: U.V.Kishorevarma

Exhibits marked on behalf of Complainant

1. Ex.P.1: Certified copy of General Power of Attorney, dated.31-5-2004 Stands in the name of K.Shafiulla, Son of Kasimpeera.

2. Ex.P.2: Attested true copy of Authorisation letter certified copy of General Power of Attorney, dated.24-12-2010 stands in the name of G.Venkataramudu, Son of G.Peddanagamuni.

3. Ex.P.3: Original cheque dated. 15-9-2007 bearing No.611641 issued by the accused in favour of complainant-company for an amount Rs.53,336-00.

4. Ex.P.4: Original Banker’s memo, dated.25-9-2007 issued by Indian Bank, addressing to ING Vysya Bank.

5. Ex.P.5: Office copy of the legal notice, dated.19-10-2007 issued by the Complainant-company to the accused.

6. Ex.P.6: Unserved RPAD postal cover returned to sender dated.31-10-2007.

7. Ex.P.7: Attested xerox copy of CLRC chitta pertaining to the Ex.P.3.

8. Ex.P.8: Attested copy of account extract of accused.

Exhibits marked on behalf of Accused

- Nil –

A.J.M.F.C.

12 13

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