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IN THE COURT OF THE IV ADDL. DISTRICT AND SESSIONS
JUDGE (II FTC) AT NALGONDA
Present : Smt M. Padmaja, IV Addl. District and Sessions Judge (II FTC), Nalgonda (DATED THIS THE 3rd DAY OF SEPTEMBER, 2021)
Criminal Appeal No. 145 of 2016
Between:
Chinnam Padmavathi W/o. Srisailam, Age: 61 years, Occ: Household, R/o. H.No.64130 B/45, Nagarjuna Colony, Nalgonda Town and District. … Appellant A N D
1.Boddupally Saidaiah @ Saidulu (since died) through LRs
2.Boddupally Sujatha, W/o Late Saidaiah @ Saidulu Aged: 43 years,
3.Boddupally Sravan Kumar, S/o. Saidaiah @ Saidulu, Aged: 38 years
4.G. Shobharani, W/o Srinivas, Aged: 40 years,
5.G. Sudha Rani, W/o Rajalingam, Aged: 36 years, R/o Kothapet of Hyderabad.
6.V.Sharadha, W/o Nagaraju, Aged: 34 years, Occ: House Hold.
7.B.Sushma, D/o Saidaiah @ Saidulu, Aged: 34 years, (Respondents No.2 to 4,6 & 7 are R/o Nalgonda Town & Dist.) (as amended as per order in Crl.M.P.No.09 of 2019 dated 10122019)
8. The State of Telangana, Rep. by Public Prosecutor, Prl. Sessions court, Nalgonda …Respondents/ Complainant and the State
ON APPEAL AGAINST THE JUDGMENT DATED 29082016
PASSED BY THE SPECIAL JUDL. MAGISTRATE OF FIRST CLASS
(PROH. & EXCISE OFFENCES) AT NALGONDA
IN
CC.NO.40/2014
1. Boddupally Saidaiah @ Saidulu (since died) through LRs
2.Boddupally Sujatha, w/o Late Saidaiah @ Saidulu Aged: 43 years,
3.Boddupally Sravan Kumar, S/o. Saidaiah @ Saidulu, Aged: 38 years
4.G. Shobharani, W/o Srinivas, Aged: 40 years,
5.G. Sudha Rani, W/o Rajalingam, Aged: 36 years, R/o Kothapet of Hyderabad.
6.V.Sharadha, W/o Nagaraju, Aged: 34 years, Occ: House Hold.
7.B.Sushma, D/o Saidaiah @ Saidulu, Aged: 34 years, (Respondents No.2 to 4,6 & 7 are R/o Nalgonda Town) …Complainant AND
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Chinnam Padmavathi …Accused
This case is coming before me for hearing and upon hearing the arguments of Sri Mereddy Narsimha Reddy counsel for the appellant and Sri T. Shekar, counsel for the LR of the deceased complainant/Respondent Nos. 2 to 7 and Sri Syed Jameel, Addl.P.P. for Respondent No.8 and having heard the matter and stood over for determination till this day, this court delivered the following:
J U D G M E N T
1.This appeal was preferred by sole accused aggrieved by the judgment of conviction passed by learned Special Judicial
Magistrate of First Class(Proh. & Excise Offences) at Nalgonda in
C.C.No.40/2014, dated 29082016. This appellant/accused was found guilty for the offence punishable U/s. 138 of the N.I Act and was sentenced to suffer till raising of the court and further to pay an amount of Rs.6,00,000/ to the complainant towards compensation
U/s. 357 Cr.P.C within 30 days from date of the Judgment of Trial
Court and in default to pay the compensation, he shall undergo simple imprisonment for a period of two months.
2. GROUNDS OF APPEAL SUBMITTED ARE AS FOLLOWS:
a. That the Judgment is against the evidence on record and probabilities of the case.
b. That the trial court failed to consider the contention of defence that there is no direct transaction between the accused and complainant and the alleged debt is not a legally enforceable debt.
c. That the trial court failed to appreciate the evidence on record and did not consider Ex.D1 Photo copy of passport of the son of appellant duly attested by attorney in USA, which clearly discloses as on the date of alleged execution of promissory note, the son of appellant who was shown as guarantor of promissory note was not present in India and was residing at America and hence the very existence and execution of Ex.P1 is highly doubtful.
d. That the trial court failed to consider the admission of Pw1 that he filed similar cases against son and
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3 husband of accused, which shows that Respondent No.1 filed a false case against the appellant also.
e. That the trial court failed to consider the plea of appellant that her son obtained bank loan in order to go to America by pledging the house of Respondent No.1 and that in that connection, Respondent No.1 had obtained blank signed promissory notes and cheques from appellant herein, her husband and also their son. In spite of clearing of loan, respondent did not return the said promissory note and cheque and filed case against appellant and two other cases against her husband and son.
f.That there is no existing legally enforceable debt. The case cheque was not issued towards discharge of any legally enforceable debt.
3.POINTS FOR DETERMINATION:
Now the points for determination are:
1. Whether Judgment of conviction passed by learned Spl. JFCM, Nalgonda in CC No. 40 of 2014 dated 29.08.2016 is sustainable?
2. Whether complainant established the case under Sec 138 of the N.I Act beyond all reasonable doubt?
3. Whether accused could show reasonable defence in all probabilities to rebut the presumptions of law under Sec 118 and 139 of the NI Act?
4.POINTS No. 1 TO 3:
As the above points No.1 to 3 are interconnected, to avoid repetition of facts, they are taken up together for discussion. Further appellant shall be referred as accused and Respondent No.1 will be referred as complainant for the sake of convenience.
5.At the outset, Mr. Boddupally Saidulu submitted in his complaint that he knows the accused for a long time and had very good acquaintance. Out of such acquaintance on 20092011 accused borrowed Rs.10,00,000/ (Rupees Ten Lakhs Only) from him by executing a promissory note agreeing to repay the same along with interest @ 24% per annum to meet her personal and family necessities. In spite of several demands for repayment of loan
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4 amount and its interest, accused used to postpone the matter on one or other pretext and finally she issued a cheque for
Rs.10,00,000/ dated 06082013 bearing No.036378 drawn on
ICICI Bank, Nalgonda Branch. On the same day i.e., on 06082013, he presented the said cheque with his banker UCO Bank, Nalgonda
Branch and the same was returned for the reason “FUNDS
INSUFFICIENT” under cheque return memo dated 29102013. On 05112013 he got issued a legal notice, accused received the same, but failed to make the payment under the cheque. Hence the complaint was filed to punish accused and also for a claim to grant compensation.
6.ASSESSMENT OF EVIDENCE ADDUCED ON RECORD:
Let us examine the defence raised by the accused in cross examination of Pw1 and Pw2. Pw1 is complainant himself. He deposed in the same lines of his complaint. He produced Exs.P1 to
P6.
7.Pw2 Boddupally Sujatha is wife of the Complainant and attestor of promissory note executed in her presence. It was suggested to Pw1 that husband of accused used to join in the private chits and Pw1 has collected empty signed pronote and cheque of accused and her husband. It is further suggested that accused is an illiterate, for which he denied. There is a correction against the column pertaining to the Rupees such as the word “Ten” and there is a correction on the date on cheque. Perused the subject cheque (Ex.P2), in the column of “Ten”, ‘e’ was over written and there is no apparent correction on date column. They are not material alterations. It is further denied that Ex.P2 cheque is a forged document and he fabricated document and filed a false case
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5 against the accused by forging her signatures. It is further suggested that, he filed a huge number of cases before this court. He received reply notice through advocate by name Shyam Sunder in response to legal notice dated 05112013. It was suggested that the son of accused by name Mallikarjun was not present at the time of Ex.P1 transaction, for which Pw1 denied.
8.The son of accused also put his signature as guarantor in guarantee portion on same promissory note printed form document for Rs.10,00,000/. It was clearly and consistently mentioned as
Rs.10,00,000/. It was suggested to complainant that he obtained blank pronote and cheque from accused, her husband and son regarding bank loan taken for sending her son to America. During cross examination of Pw2, it was suggested that receipt and jameen, dated 20092011 is concerned with Ex.P1 document. That impliedly indicate that accused admitted that she signed on pronote and also cheque. Son of accused also knows about this transaction as he signed as guarantor. In the grounds of appeal, accused stated that she got bank loan to send her son to America and at that time complainant and his wife got blank signed documents and filed similar type of cases against the respondent and son and they are pending. Pw1 admitted that he also filed similar case against the husband of accused. This will not give rise any presumption that this is a false case or Pw1 is in the habit of filing false cases.
9.Cumulative reading of all the evidence of both parties indicates that there are prior transactions between the parties, they had a habit of taking money and repaying. That was all because of acquaintance between them. During the course of cross examination of Pw1, he stated that he is not running any chits.
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10.The main contention of the appellant is that, complainant and his wife stood as sureties for the bank loan of her son and taken the blank signed promissory note and cheque from accused her husband and also her son. Further the contention of appellant is that her son Mallikarjun never stood as surety and he was not present in India and was staying at USA as on the date of Ex.P1 promissory note, receipt and jameen. In support of her contention, accused got examined herself as Dw1 and got marked Ex.D1. Ex.D1 is Photo copy of passport. It was suggested to the Dw1 that she borrowed Rs.10,00,000/ and executed a pronote in favour of complainant and the same was denied. Ex.D1 photo copy of passport only shows that her son is having passport to go to
America or to go to any other place. Except that, it is not useful to the purpose of defence to support her argument that her son was not present in India as on the date of Ex.P1. Had he really obtained a bank loan, what made accused give blank signed documents to complainant. It was rightly observed by the trial court that the transaction is genuine and Ex.P1 was issued towards a legally enforceable debt under the promissory note.
11.This is a case where accused is denying her signatures on case promissory note, receipt and cheque. Surprisingly during cross examination dated 05012016 on one hand she/Dw1 admitted the borrowing of Rs.10,00,000/ on 20092011 and executing promissory note. On the other hand she denied Ex.P1 dated 2009 2011. It shows that intentionally she deposed false to avoid her liablility.
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12.Further it is observed by this appellate court that no notice was issued to this complainant for not returning the alleged blank pronote and cheque signed by them after repayment of bank loan to support the contention of accused. If her contention is true that they were obtained towards security for bank loan; they cleared the loan and even after repayment of loan the complainant kept the so called blank cheques signed and pronote in his custody, she ought to have issued a legal notice or filed a compliant before police, but she did not do so. Further her contention that she is an illiterate and as such the contents were filled by the complainant, cannot prevail when the guarantor is no other than her son, who is well educated.
13.In the light of Sec.20 of N.I Act an inchoate stamped instruments, the court cannot allow the accused to say that he signed blank promissory note, receipt and cheque.
14.Complainant as Pw1 deposed that he is an income tax assessee. It is argued that no material was shown that complainant submitted income tax returns showing this alleged debt under case promissory note as due to him.
15.In this case there is supporting evidence given by Pw2, one of the attestors. During cross examination, she deposed that she kept her house as security to the loan of accused. She clearly deposed that at the time of transaction, son of accused was also present along with her. Pw2 further deposed that accused received
Rs.10,00,000/ and signed on the promissory note at the house of
Pw1. She further deposed that son of the accused stood as guarantor and also present at the time of transaction in Ex.P1 pronote. Nothing useful was elicited to raise any probable defence in
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8 cross examination of Pw1 and Pw2. Merely because Pw2 is wife of
Pw1 the court cannot see any reason to brush aside her evidence.
16.Accused as Dw1 deposed that she knows the complainant and her husband joined as subscriber in the chits business of complainant. She did not borrow Rs.10,00,000/ from Pw1 on any day much less on 20.09.2011, that she did not execute any pronote in favour of complainant and her son Mallikarjun went to America on 10082011 and presently her son is in America from 10082011 till date. She further deposed that her son never acted as guarantor of Ex.P1 pronote. She did not issue any cheque towards any transaction. They obtained bank loan from Narketpally bank to send her son to abroad. She never signed on Exs.P1 and P2 and they are forged documents. During cross examination she deposed that out of acquaintance, she borrowed Rs.10,00,000/ on 20092011 and executed a pronote. When promissory note was confronted to this witness, she denied her signature on Ex.P1 promissory note but admitted her signature on the memo of appearance. She also denied the signature on Ex.P2 cheque.
17.Basing on the oral evidence of Pw1 and 2, the court believes that she borrowed the cheque amount and executed promissory note(Ex.P1) and her son stood as guarantor. Her son’s signature on promissory note was not specifically denied, his presence only denied. When accused had taken forgery as defence, it is her burden to establish the forgery by sending Ex.P1 and Ex.P2 to expert and get opinion. No steps were taken by accused for sending the disputed cheque and pronote. On one hand her case is she had issued blank signed cheque and promissory note towards security for bank loan of his son and on the other hand, she denied the
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9 signatures in Ex.P1 and Ex.P2. She had taken different pleas from time to time without any consistency. It shows that in order to avoid her liability, she denied the transaction.
18.Accused alleged that Pw1 misutilized blank signed papers and cheque and that she is no way concerned with Ex.P1 pronote, that her son never stood as surety to any of her monitory transactions.
19.That her son Mallikarjun went to America for higher studies and that he came to know that complainant filed another case against him also for dishonour of cheque.
20.In order to show the acquaintance between the complainant and accused, it was elicited that accused borrowed education loan for her son by pledging the house of accused for which, this complainant and his wife stood as sureties. The careful evaluation of evidence of Dw1 make us understand that accused gave purely self supporting version to avoid herliability.
21.In the light of discussion above on evidence adduced by both sides; let us go into essential things to be proved by complainant.
22.Firstly, the subsistence of a legally enforceable debt/ liability.
Complainant produced promissory note and receipt in Ex.P1 dated 20092011 for Rs.10,00,000/ as foundation document to this complaint to show the borrowing transaction. Accused denied the subject promissory note and cheque(Ex.P1 and Ex.P2), but she did not take steps to send it to any expert to establish the alleged forgery. Her son stood as guarantor. Accused did not dispute the ownership Ex.P2 cheque leaf and its dishonour by drawee bank. As
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10 per the provisions of the N.I Act, every instrument is presumed to be drawn towards discharge of liability and passed in favour of the holder for discharge of loan unless contrary is proved. Further accused failed to explain any cogent reason as to why she issued
Ex.P2 cheque and as to how said cheque leaf was kept available with complainant. Further it is not the case of accused that Ex.P2 cheque leaf was stolen by accused. It shows that in order to avoid the liability, the accused gave false version. In the above context this court considering the oral evidence of Pws1 and 2 coupled with
Ex.P1 and Ex.P2 believes that petitioner proved that there exist a legally enforceable debt/liability and proved the execution of Ex.P1 promissory note. Once the execution is proved, the Court is duty bound to invoke presumptions of law under Sec 118 of the NI Act.
There is a presumption as to passing of consideration also.
23.Let us discuss about the liability of a person who gives an inchoate/ incomplete instrument as per the law. According to Sec 20 of the NI Act, the person so signing shall be liable to the contents when it is produced by a holder or holder in due course of said negotiable instrument. It is specifically laid down that signing and giving wholly blank or partly blank negotiable instrument means thereby giving authority to the holder thereof to make or complete upon it, a negotiable instrument, for any amount specified therein or not exceeding the amount covered by the stamp. Hence this defence cannot help accused when complainant as a holder for consideration had produced both promissory note and cheque.
24. Basing on this foundation, complainant shows that accused borrowed Rs. 10 lakhs from him. That he kept on asking accused to repay the debt under promissory note. Hence accused issued the
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11 case cheque dated 06082013 in Ex.P2 for Rs 10 lakhs drawn on her account. Her signature on case cheque was also denied. But as discussed in earlier paragraphs accused did not take steps to send it to expert to prove alleged forgery. She admitted that she is the owner of Ex.P2 cheque leaf. Hence the court believes that Ex.P2 cheque was issued towards discharge of legally enforceable debt. Hence, the court invokes legal presumptions under Sec. 118 and 139 of the NI
Act here.
25.Secondly, complainant had shown that he presented case cheque within its period of validity, but it was returned for ‘Funds
Insufficient’ by way of return memo dated 29102013, issued by the
ICICI. Thirdly, after return/ dishonour of case cheque, complainant issued legal notice dated 05112013. This demand was made within 30 days from the date of initial return as prescribed.
26. Fourthly, complainant can show that cause of action arose if he shows that accused/ drawer of case cheque failed to make the payment of the cheque amount to him (as payee) within 15 days of the receipt of the said notice. Complainant produced office copy of notice issued by him in Ex.P4 dated 05112013; one original postal receipt in Ex.P5 dated 05112013 and postal acknowledgment
dated 06112013 in Ex.P6 signed by accused. Accused received
notice and issued reply notice to complainant, but failed to make payment of cheque amount. Hence it has to be answered that there is proper service of notice in this case. Accused failed to make payment within time. Complainant got cause of action to file a complaint.
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27.Fifthly and lastly, complainant has shown that he filed this case within time as prescribed. Hence all essential ingredients are fulfilled. Thus complainant had discharged his initial burden to prove. As per law, the court invokes presumptions of law under Sec 118 of the NI Act on Ex P1 promissory note and the two presumptions of law under Sec 118 and Sec 139 of the NI Act on Ex
P2 case cheque.
28.CITATIONS REFERRED BY THE COURT:
Lafarge Aggrerates & Concrete India Pvt Ltd Vs. Sukarsh
Azad and another (2014) 5 SCC Cri 818 In this decision
Instructions to stop payment as return including above referred returns are held as returns amounting to dishonour under Sec 138 of the NI Act M/s Jayam Company, Chennai Vs T. Ravichandra, 2003 (2) DCR 145 by Madras High Court. In this case it is held presenting of complaint initially is consideration for limitation.
Number of returns etc and taking cognizance later will not effect limitation.
T. Vasantha Kumar Vs Vijaya Kumari AIR 2015 SC 2240
When cheque as well as signature are accepted by accused, burden shifts on him to rebut the presumption. When explanation given by accused is unacceptable, it is held he failed to rebut the presumption.
Kishan Rao Vs Shankargouda (2018) 8 SCC 165 In this case, it is held that mere denial is not sufficient. Accused has to make rebuttal by adducing evidence.
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13 Bir Singh Vs Mukhesh Kumar 2019 Supreme SC 126 Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Sec 139 of the NI Act, in the absence of any cogent evidence to show that cheque was not issued in discharge of a debt.
Rohitbhai Jivanlal Patel Vs State of Gujarat, 2019 (1)
Crimes SC 291 The result of presumption (once invoked) is that existence of a legally enforceable debt is to be presumed in favour of complainant. When such presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts, accounts etc., or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not.
29.In the present case on hand, there is foundation shown by way of case promissory note and receipt executed by accused guarantee by son of accused.
G. Nirmala Vs Syed Zahir Ahmed and another 2007 (1) ALT
Crl 138 AP In the year 2006, our composite honble High
Court held that once the requirements of Sec 138 and 141 of the Act are fulfilled, the irresistable conclusion is that the cheque was issued for a legally enforceable debt and the accused is liable under Sec 138 NI Act. It is not permissible for the court to go into the question whether the complainant was competent to advance the loan.
M. Vidyavathi Vs Chandraiah alias Chandra Babu 2010 (1)
ALT Crl 347 AP Our honble High Court held that capacity of complainant to lend is not an essential ingredient for the
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14 offence under Sec 138 of the NI Act. (Hence the complainant herein need not be put to strict proof of his income or the source for money advanced. Anyway there is only formal attack in cross examination by simple suggestion) Indo Automobiles Vs Jai Durga Enterprises (2008) 8 SCC 529 It is well settled that once notice has been sent by regd post with acknowledgment due to a correct address, it must be presumed that service has been made effective.
CC Alavi Haji Vs Palapetty Muhammed and another 2007 (5) Supreme 277 it is held that when notice is sent by regd post by correctly addressing the drawer of cheque, the mandatory requirement of issue of notice as per Clause (b) of the proviso under Sec 138 shall be treated as complied with.
Ragini Gupta Vs Piyush Dutt Sharma, 2019 (3) DCR 358
Non disclosure of source of income or non filing of Income Tax return would not automatically dislodge source of income of complainant.
Ravinder Paul Vs Ashwani Kumar CRAS2319SB2012
The alleged violation of the provisions of Income Tax Act,
Contract Act and Money Lenders Act does not bar continuation of proceedings under Sec 138 of the NI Act. He cannot be discharged on this ground (Samarendra Nath Das vs Supriyo Maitra 2006 (4) AICLR 337 referred. Other decisions on lending money without license were referred in this case.) R. Vijayan Vs Baby and another, 2012 (2) ALT Crl 233 SC
That if the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant as by
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15 the time criminal case is decided, the limitation for filing civil cases would have expired.
30. In the light of discussion above, the court finds no reason to set aside the conviction. In the result, accused is found guilty for the offence under Sec 138 of the NI Act.
ADEQUACY OF PUNISHMENT DISCUSSED:
31.Let us discuss whether appropriate sentence has been passed in this case or not. This Court observes while imposing sentence, the complainant also should not suffer loss and therefore if cheque amount and interest is ordered to be paid to the complainant as compensation, it would be appropriate. This Court already referred the decision in R.Vijayan Vs Baby and another, 2012 (2) ALT Crl 233 SC where Honb’le Supreme Court held that if the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant as by the time criminal case is decided, the limitation for filing civil cases would have expired. Had she approached the Civil Court, she gets interest @ 18% per annum as per Sec 80 of the NI Act. As per observation at para 18 in this cited case above to amend chapter XVII, so that a consequential levy of fine of an amount sufficient to cover the cheque amount and interest thereon at a fixed rate of 9% per annum, followed by award of such sum as compensation from the fine amount would be appropriate was suggested. Accordingly this court enhances the compensation amount to cheque amount+ 9% interest from the date of cheque till date of this Judgment payable within one month from the date of this Judgment. In default to pay compensation, accused shall undergo Simple Imprisonment for two months. The compensation amount of cheque amount+ 9% interest
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16 shall be paid to complainant. Accused being aged woman and her husband is suffering from severe paralysis and she is the only member to look after him, the learned trial court Judge imposed sentence only TILL RAISING OF COURT. This part was not challenged by revision by complainant on inadequacy of punishment. Hence this appellate Court is only modifying compensation amount and time given for payment. This appellate court is not interfering with sentence passed by Trial court judge
TILL RAISING OF COURT, that appears already undergone.
32.In the result, this appeal is dismissed confirming Judgment of conviction passed by learned Spl. JFCM (Proh & Excise Offences),
Nalgonda in CC.No.40 of 2014, dated 29.08.2016 and accused is found guilty for the offence under Sec. 138 of the NI Act and sentenced to suffer TILL RAISING OF THE COURT (that appears already undergone) and also sentenced to pay compensation of
Rs.17,27,016/ (Rupees Seventeen Lakhs Twenty Seven Thousand and Sixteen only), i.e., cheque amount and interest @ 9% p.a. from the date of Cheque. The said amount shall be paid to complainant as compensation under Sec 357 (1) (b) Cr.P.C. In default of payment of said compensation, within 30 days from the date of this
Judgment, accused shall suffer default sentence of simple imprisonment for a period of two months. The bail bonds of accused are ordered to be in force for a period of (6) months in terms of Sec 437A Cr.PC. Accused is at liberty to prefer appeal against this Judgment and the provision for free legal aid can be availed.
There is no remand period to give set off under Sec 428 Cr.P.C.
Dictated to the Stenographer, transcribed by him, corrected and
pronounced by me in the open court, on this the 3 rd day of September,
2021.
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IV ADDL. DISTRICT & SESSIONS JUDGE
(II FTC), NALGONDA.
APPENDIX OF EVIDENCE
NIL
IV ADDL. DISTRICT & SESSIONS JUDGE
(II FTC), NALGONDA.
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