1
IN THE COURT OF THE SPECIAL JUDICIAL MAGISTRATE OF FIRST CLASS FOR
PROHIBITION & EXCISE: GUNTUR.
PRESENT : Smt M.Venkata Seshamma,
Judicial Magistrate of First Class,
Special Mobile court, Guntur FAC/Special Judicial Magistrate of I Class for Prohibition& Excise, Guntur
Tuesday, this the 23rd day of February, 2021.
C.C.No.103/2015
Between: Nomula Prasada Rao, S/o.Krishna Murthy, aged about 43 years, Hindu, R/o. Door No.4-5-61/4, G.V.R Mahila College Road, Said Baba Road, Guntur,
.... Complainant
And:
Palakolu Rajeswara Rao, S/o.Raghavaiah, aged about 49 years,
Hindu, r/o. D.No.5-19-4, 2/17, Brodipet, Guntur. …..Accused
This case coming on 08.02.2021for final hearing before me in the presence of Smt.M.Charu Latha, Advocate for the Complainant and of Sri P.Vijay Kumar, Advocate for the accused and having stood over for consideration to this date, this Court delivered the following:
J U D G M E N T
01.The complainant filed this complaint against accused for the offence under Section 138 r/w 142 of Negotiable Instrument Act.
02.The brief averments of the complaint are that:
The accused approached for his business purpose borrowed an amount of Rs.50,00,000/- (Rupees Fifty Lakhs only) from the complainant on 20.06.2012 and agreeing to repay the same with interest @ 24% p.a either to complainant or to his order on demand and executed promissory note on the same day in favour of the complainant and subsequently on 23.03.2013, he issued cheque bearing No.
598050 for Rs.48,00,000/- drawn on Andhra Bank, Chandramoulinagar branch on his account No. 125110027000157 in partial discharge of legally enforceable debt.
When the complainant has presented the said cheque bearing No. 598050 with his banker drawn on State Bank of India, then the Andhra Bank authorities returned the cheque with cheque return memo dt. 26.03.2013. So, the complainant got issued registered legal notice on 09.04.2013 demanding the accused to pay cheque amount within 15 days informing him that cheque issued by him is bounced and accused got issued reply notice with all false allegations. Hence, knowing fully well 2 that there are no grounds, he issued the above said cheque which was bounded on presentation, hence the accused committed an offence U/sec. 138 r/w 142 of
Negotiable Instruments Act.
03.On consideration of sworn affidavit and other material, cognizance has taken for the offence U/s.138 of Negotiable Instrument Act against the accused and registered the same as C.C No. 340/2014 on the file of the V Additional Judicial First
Class Magistrate, Guntur and on appearance of accused, copies of case documents have been furnished to the accused u/s 207 Cr.P.C.
04. The accused has been examined u/s 251 Cr.P.C, for the offence u/s.138 of NI Act for which he pleaded not guilty and claimed to be tried. At this stage, the case was transferred to this court and renumbered as C.C No. 103/2015. During the course of trial, the Complainant himself was examined as P.W.1, one of the attestor as P.W2 and scribe as P.W3 and got marked Exs.P1 to P15. During the course of trial as P.W3 evidence was eschewed on 17.07.2017.
05. After closure of complainant side evidence, the accused has been examined u/s 313 Cr.P.C. and he denied the incriminating evidence against him.
With the permission of the court, the accused adduced the evidence by examining himself as D.W1 and got marked Exs.D1 to D23.
06. Heard oral arguments on both sides. Both parties filed their written arguments along with the citations relied by them.
07. The complainant argument is that the accused borrowed an amount of
Rs.50,00,000/- from the complainant on 20.06.2012 and duly executed Ex.P1 promissory note with agreed terms and issued cheque bearing No. 598050 towards partial discharge of said debt and on its presentation the said cheque was bounced with cheque return memo by banker of accused, hence statutory notice was issued to accused and he got issued reply notice with false allegations, and he complied all the statutory compliance and filed this complaint against accused to punish as per law and also for grant of compensation as per law.
08.The defence counsel argued that there is no legally enforceable debt between the complainant and accused for issuance of any cheque filed in this case and that complainant used to be an employee in accused firm and at that time 3 complainant might have misappropriated of cheque of accused which was signed by him and available in his office of the firm, and he fabricated the same and got filed this false case against accused for his wrongful gain, and that complainant has no financial capacity to lend such huge amount of Rs.50,00,000/-, hence to dismiss the complaint and to acquit the accused.
09.Heard arguments on both sides and also perused the written arguments of both parties and also relied judgments by them respectively.
10. Now, the points for determination are :
1.Whether the accused issued Ex.P2-cheque bearing No. 598050
dated: 22.03.2013 for Rs.48,00,000/- to the complainant
towards discharge of the legally enforceable debt?
2.Whether the complainant has proved the ingredients of the offence under Section 138 of Negotiable Instruments Act against the accused beyond reasonable doubt ?
3.Whether the accused has rebutted the presumption under section 139 of Negotiable Instruments Act ?
4.Whether the accused is liable for punishment under section 138 of Negotiable Instruments Act ?
5.To what relief?
11. Point Nos.1 to 3 :- As points No.1 to 3 are inter-linked with each other, hence they were discussed simultaneously in order to avoid the repetition of the evidence and its marshaling. The evidence on record is oral evidence of
PW.1/complainant and PW.2/attestor and documentary evidence of Exs.P1 to P15 and oral evidence of accused as D.W1 and documents on his behalf as Exs.D1 to
D23.
12.In the present case, the complainant himself examined as P.W.1 and reiterated the contents of complaint in his chief-affidavit to prove the legally enforceable debt between the complainant and the accused, he got exhibited promissory note in his favour by accused for Rs.50,00,000/- dt. 20.06.2012 as
Ex.P1, he got exhibited cheque bearing 598050 dated: 22.03.2013 for
Rs.48,00,000/- as Ex.P2. To prove the presentation of said cheque and bouncing of the same by the drawer bank unpaid he got marked cheque return memo with 4 reason “Funds Insufficient” dt. 26.03.2013 as Ex.P3. For marking statutory demand of accused required under Section 138 of Negotiable Instrument Act he got marked office copy of registered lawyer notice dt. 09.04.2013 issued to accused as Ex.P4 and postal acknowledgment as Ex.P5. Reply notice issued by the accused on 26.03.2013 is marked as Ex.P6. As Exs.P7 to P13 are copies of cheques and their respective counter foils and State Bank of India Pass book, savings bank account
No. 31355069854. Ex.P14 income tax return verification form for the year 2013 to 2014, Ex.P15 statement of total income for assessment year 2013 to 2014 for P.W1.
So in view of evidence of PW.1 coupled with evidence of P.W2 who is attestor and
Exs.P1 to P6 documents in his support, this court has to raise the statutory presumptions under sections 118 and 139 of Negotiable Instruments Act in favour of the complainant that the said negotiable instruments of cheque Ex.P2 has been drawn for consideration and Under section 139 of the Negotiable Instrument Act, the court shall presume that the holder of the cheque in this case received the said cheque Ex.P2 towards partial discharge of legally enforceable debt.
13. The defence counsel argued that as complainant worked as Office in- charge in his firm M/s. Krishna Pavan Constructions and Infrastructures Private
Limited, Guntur and used to be custodian of all documents relating to said firm, and during course of employment the complainant misused his position and colluded with one G. Sridhar Reddy and misappropriated the funds of Firm, so a case in C.C
No. 147/2016 was filed against complainant and one G. Sridhar Reddy which is pending before this court, and that complainant has no financial capacity to lend such huge amount of Rs.48 lakhs to accused under Ex.P1. Further as P.W1 misused his employment and fraudulently taken blanked pronotes and signed cheques containing signatures on Ex.P1 and P2 and filed this false case, as such Ex.P1 does not create any legally enforceable debt between him and P.W1, and that complainant booked a plot, but subsequently cancelled the same, as such Ex.P2 cheque was issued to complainant for refund of amount, as such there is no cause of action to file this complaint, hence this complaint is liable for dismissal and thereby for acquittal of accused.
14. In an offence under section 138 of the N.I. Act, once the complainant has proved the drawing of the cheque towards legally enforceable debt by accused, 5 presentation of the cheque into the Bank, return of the cheque unpaid by the drawer bank, giving notice in writing to the drawer of the cheque demanding the payment of the cheque amount and, failure of the drawer to make payment within 15 days of receipt of the notice, the statutory presumptions under section 118 and 139 of N.I. Act will arise in favour of the complainant. As per section 118 (a) of the
N.I. Act the court shall presume that the negotiable instrument has been drawn for consideration. Even in cross-examination of P.W1 also there is no suggestion as to denying the signature of the accused on the cheque Ex.P2 or in promissory note
Ex.P1. The mere denials will not rebut the presumptions under Section 139 of N.I Act in favour of complainant. Under section 139 of the N.I. 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. In this case the complainant as PW1 and PW.2 with corroborative evidence of Exs.P1 to P15, positively established the presumption under S.139 of NI Act. As per settled law and Section 139 of N,I Act presumption shall be raised in favour of complainant once the accused admitted his signatures on subject cheques however, he can rebut the presumption probabalizing his defence. PW.1 specifically denied that he has no financial capacity to lend Rs.50 lakhs on 20.06.2012. He testified that he borrowed some amounts from his relatives and friends under promissory notes and those amounts were used for lending amount under Ex.P1. In PW.1 cross it was elicited that already there was a debt between them in the year 2010 for which money recovery suit was filed, and that was suggested by accused to PW.1. So admittedly there are debt transactions from complainant to accused. Further if the earlier admitted debt basing on which suit was filed, is meager one, then the accused can prove it by filing relevant suit documents before this court, but the same was not adopted by the accused to prove that PW.1 has no financial capacity to lend huge amount of Rs.50,00,000/- under Ex.P1. However PW.1 admitted that his income tax returns never exceeded
Rs.4 lakhs. From cross of DW1 it was elicited that wife of complainant is working as
Deputy Commercial Tax Officer. The complainant counsel argued that PW.1 accumulated the debt amount out of his real estate and finance business, some amount were debts from friends and near relatives, some amounts from savings of salaries of his wife who is Deputy Commercial Tax Officer. So from all these 6 complainant could discharge his initial burden as to financial capacity to lend debt of Rs.50 lakhs under Ex.P1, as the signature on same was not specifically denied by the accused.
15.As all the basic ingredients of Section 138 of N.I Act as also of Section 118 and Section 139 of N.I Act are apparent on the face of the record. Thus, the onus shifts on the accused to establish a probable defence so as to rebut such presumption. So the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. Though, there may not be sufficient negative evidence which could be brought on record by the accused, who discharge his burden by mere denial would not fulfill the requirements of rebuttal as envisaged under 118 and 139 of the N.I
Act.
16.The same was reiterated bytheHon’ble Apex Courtin“Rohit Bhai
Jevanlal Patel Vs State of Gujarat and another” dt. 15.03.2019, in which it was upheld that mere creation of doubt by accused is not suffice to rebut the presumption Section 139 of N.I Act. Admittedly in this case, even from cross- examination of D.W1/accused there are some financial transactions in relation with some plot in view of his admission that “he is having ledger entries between in respect of the plot that was intended to be purchased by the complainant and for which the complainant was given pass book and receipt in respect of the transaction and the property which was agreed to be transferred to the complainant was entered into approximately in the year 2011 to 2012 and it is a property situated at Pothuru which was agreed to be conveyed to the complainant.”
17.The Hon’ble Apex Court in Full Bench judgment of “Rangappa Vs Sri
Mohan ”(2010 (3) Crimes (SC) 40), it was held “…..because both sections 138 and 139 require that the Court ‘shall presume’ the liability of the drawer of the cheques for the amounts for which the cheques are drawn,…, it is obligatory on the
Court to raise this presumption in every case where the factual basis for the raising of the presumption has been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the 7 accused (…). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs”. Further it was also held 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 same was reiterated by the Hon’ble Apex Court in Division
Bench judgment in “Kishan Rao Vs Shankar Gouda” dt. 2.7.2018 and in Division
Bench judgment “Bir Singh Vs. Mukesh Kumar” dt. 06.02.2019.
18.The Hon’ble Supreme Court in its recent Full Bench Judgment between “M/s. Kalamani Tex Vs. P. Balasubramanian” dated 10.02.2021, reiterated that “ ‘reverse onus’ clause 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”.
19. The specific defence of the accused is that there is no legally enforceable debt between accused and complainant nor he issued cheque under 8
Ex.P2 in discharge of Ex.P1 and Ex.P1 promissory note to the complainant, that complainant have no financial capacity to lend huge amount of Rs.50,00,000/-, hence only It was not shown in his IT returns though he is an income tax assessee, but as complainant worked as Office In-charge in M/s. Krishna Pavan Constructions and Infrastructures Private Limited, Guntur and used to be custodian all documents relating to said accused Firm, and during course of employment the complainant misused his possession and colluded with one G. Sridhar Reddy and misappropriated the funds of firm, hence on his report to Pattabhipuram P.S for the same, a case was registered vide C.C No. 147/2016 and same is pending before this court against this complainant and said Sridhar Reddy and that complainant misused his employment and fraudulently taken blanked pronotes and signed cheques containing signatures on Ex.P1 and P2 and filed this false case as such
Ex.P1 does not create any legally enforceable debt between him and P.W1 and that complainant booked a plot but subsequently cancelled the same, as such, Ex.P2 cheque was issued to complainant for refund of amount and the complainant did not invest his amounts in said Krishna Pavan Constructions and Infrastructures Pvt
Ex.P8 and P10, but P.W1 made excess drawings under Ex.P8 and P10, hence there is no cause of action for complainant to file this case based on Ex.P1 and P2 which are fabricated, as such accused could rebut the presumption under Section 139 of N.I
Act by preponderance of probability for his defence, hence to dismiss the complaint and acquit the accused from criminal liability.
20.The another specific defence of accused is that complainant is custodian of documents of empty promissory notes, cheques and receipt books with his signatures scribed on them and used to have keys of such locker with him, as such he committed theft of him for which case was registered against complainant and one G. Sridhar Reddy in Cr.No. 209/13. This court has perused the relevant documents Exs.D20 and D21. As per Ex.D20 report was given on 13.04.2013 and
FIR was received in said crime by the concerned court on 15.04.2013. Charge sheet under D21 was filed on 28.12.2015 after completion of investigation.
Statutory notice under Ex.P4 was issued on 09.04.2013 and acknowledgment under
Ex.P5 is with 12.04.2013. The accused did not deny the signature on acknowledgment Ex.P5. But he issued reply notice on 26.04.2013 Ex.P5 that too 9 requesting for photo identity of said Prasadarao mentioned in statutory notice under
Ex.P4. But in his cross-examination D.W1 admitted that he knew complainant since 1994 and even before the complaint lodged in this case he had sent the legal notice
Ex.P4 to him and that he did not know any other person by name Nomula Prasada
Rao except this complaint. There is no plausible or acceptable explanation from accused for not issuing reply notice immediately and also for issuing reply notice under Ex.P6 seeking for photo identity of complainant by name Nomula Prasada
Rao, in view of his categoric admission that except complainant he do not know any other person by name Nomula Prasada Rao and also his admitted acquittance with complainant since 1994.
21.The documents Exs.D1 to D19 are the vouchers of M/s Krishna Pavan
Constructions and Infrastructures Pvt Ltd., which was said to be issued towards salaries of complainant and other employees for their respective salaries of relevant periods mentioned in respective vouchers for their employment in said firm. As per those documents the complainant also was paid salary of Rs.10,000/- for summons from July 2011 to November 2011 under Exs.D1 to D5 and even they were signed by complainant at receiver column as well as accountant column also. The defence of accused is that complainant has no financial capacity to lend huge amount of
Rs.50 lakhs to accused as he is only employee in their firm of M/s Krishna Pavan
Constructions and Infrastructures Pvt Ltd., Accused as D.W1 admitted that wife of complainant is working as Deputy Commercial Tax Officer. In his cross-examination, though he denied that cheques under ExP8, P10 and P12 of Rs.5 lakhs each were not given by him to the complainant and also he did not remember the names of persons to whom the cheques were given, but, he admitted the signatures on them as that of him only. He explained that in respect of plots purchased by complainant from him when the complainant could not pay the remaining amount and when he asked to return the amounts in that connection, accused had given cheques Exs.P8,
P10 and P12 to the complainant. Accused voluntarily stated that the excess drawings under Ex.P8 and P10 were given to the complainant as hand loan. The above admission with regard to his signatures on Ex.P8, P10 and P12 and explanation with regard to some major financial transactions between him and complainant in relation with some plots clearly goes to show that there are financial 10 transactions between accused and complainant and also the financial capacity of complainant , which was totally denied by the accused.
22.The defence counsel argued that even as per complainant document of
IT Return verification form for a period 2011 to 2012 under Ex.P14, the debt amount of Rs.50 lakhs under Ex.P1 was not reflected, which supports accused contention that P.W1 has no financial capacity to lend such huge amount of Rs.50 lakhs, as such accused rebutted the presumption with preponderance as required under
Section 139 of N.I Act. He relied upon a decision in the case of ‘Kanakamedala
Venkata Krishna Prasad vs. Peram Sai Swarupa and another’ reported in 2017(2)
ALD(Crl) 981, for proposition that as the complainant did not mention the said debt in his income tax returns hence, the debt not comes under legally enforceable debt. In reply to the said defence of non-mentioning of debt amount in IT returns of complainant, his counsel submitted that mere non-reflecting of debt amount in his
IT returns would not dis-entitle the complainant from presumption under Section 139 of N.I Act, because the non-mentioning of amounts properly in IT returns is the subject matter of IT Department persons and assessee. In support fof their contention complainant relied on judgment between “Krishna P. Morajkar Vs Joe
Ferro and another”, in which it was reiterated that “….the entire scheme of the
Income Tax Act is to say that an amount not disclosed in the Income Tax returns becomes irrecoverable, would itself defeat the provisions of Section 138 of the
Negotiable Instruments Act”. In this case also, even if the debt amount under Ex.P1 was not reflected in IT returns of relevant period would not dis-entitle him from recovering the same, if he was entitled to recover the said debt otherwise.
23.The defence counsel argued that as there is no legally enforcible debt under Ex.P1 promissory note as it was fraudulently taken away by complainant from office of M/s. Krishna Pavan constructions and Infrastructures Pvt Ltd., as he is custodian of the documents being office in-charge hence, the accused rebutted the presumption under section 139 of N.I Act. In support of his argument they relied on
Judgment of the Hon’ble Supreme Court in “G. Pankajakhiamma Vs. Mathai Mathew” (2004 CJ (SC) 392) wherein it was held that “… during evidence the respondent/complainant did not produce any books of accounts, this transactions were to be unaccounted transactions and if they are illegal transactions no court 11 can come to the aid of the party”. In said case, the facts are that 1st respondent admitted some chit fund transactions were there between parties, however relevant books of accounts were not produced before the court and both parties agreed that these transactions would be unaccounted transactions. But in this case-in-hand, the facts are different and the complainant got exhibited Ex.P1 pronote in support of debt between him and accused. Thus, this case facts are totally different than that of “Pankajakshamma” case, hence the ratio of that judgment is not applicable to the present case in hand.
24. The accused counsel also relied on judgment of the Hon’ble Apex
Court in “Basalingappa Vs Mudibasappa” (2019 ALT SC 62) for proposition, that when complainant could not prove his financial capacity, not necessary for accused to disprove existence of consideration by way of direct evidence, then accused is entitled for acquittal. At para No.27, ‘thus there is a contradiction in what was initially stated by the complainant in the complaint and in his examination in chief regarding date on which loan was given on one side and what was said in cross examination in other side, which has not been satisfactorily explained. Even before the trial court appellant/accused has not denied his signature on the cheque’. But that case facts are totally different than that of the case in hand, as the date of lending amount of Rs.50,00,000/- on 20.06.2012 and execution of promissory note
Ex.P1 on same day by accused in proof of same was mentioned in complaint and also the same was maintained by him in his evidence without any deviation. Thus the ratio in Basalingappa’ case is not applicable to this case.
25.The accused counsel relied on judgment of Hon’ble Supreme Court in “K. Subramani Vs. K. Damodara Naidu” on 13.11.2014, wherein it was held that as the complainant had no source of income to lend some of Rs.14 lakhs to the accused and he failed to prove that there is legally recoverable debt payable by the accused to him.” But in that case, it was observed that admittedly both parties are lecturers in Government college, as such they are governed by Government servants conduct Rule, which prescribes the mode and lending and borrowing, and also there is no averment either in his complaint or in chief-examination with regard to sale price of site No.45 nor sale-deed of same was produced, and also that sale income of said site was not shown in his income-tax returns. Considering all these 12 facts the Hon’ble Court restored the judgment of the acquittal passed by the trial court. But in the present case-in-hand, neither of the parties are governed by any rules with regard to lending and borrowing of amounts, and also other facts of non mentioning of sale of site in his IT returns etc., as such ratio of that case is not applicable to this present case.
26. Further the accused relied on judgment of the Hon’ble A.P High Court “R. Chennakesava Rao Vs. P. Lakshmi Narasaiah and another”(2017 (2) ALD (Crl) 471,). The case facts are that complainant is money lender and he did not obtain any piece of paper evidencing between him and accused, and that accused was not his friend nor his relative, in such case without any proof of borrowal transaction, that too when complainant is money lender and that he is governed by Telangana
Moneylenders’ Act, but he is not having valid license under that Act, hence debt is not proved. Thus that case has no applicability to the present facts in hand.
27. The defence counsel relied on judgment of Hon’ble Bombay High Court in “Sanjay Mishra Vs. Ms. Kanishka Kapoor @ Nikki.”2010 (1) ALD Criminal (NOC), for proposition that the failure to disclose the amount in income tax return or books of accounts of the complainant may be rebutt the presumption under Section 139 of
N.I Act. In this case, the judgment of Hon’ble Supreme Court in “Krishna Janardhan
Bhat Vs. Dattatraya G. Hegde” ( 2008 (1) ALD Criminal 485 S.C. ), in which it was held that ‘for proving defence, accused not required to step into witness box, he may discharge his burden on basis of material already brought on record and standard of proof on part of accused and that of prosecution in a criminal case is different, and once accused found to have discharged his initial burden, it shifts to complainant. Section 139 of N.I Act merely raises a presumption in favour of holder of cheque that same has been issued for discharge of any debt or other liability, but existence of legally recoverable debt, not a matter of presumption under Section 139.” However the judgment in ‘Krishna Janadhan Bhatt’ case was almost overruled in Full bench judgment of the Hon’ble Supreme Court in ‘Rangappa Vs Sri Mohan’ case. So the ratios decided in Krishna Janardhan Bhatt case and Sanjay Misra case are no more precedents with regard to principles laid down in them.
28.In support of complainant’s contentions and case, he relied on Division bench judgment of the Hon’ble Supreme Court in “M/s. Shree Daneswari Traders Vs.
13
Sanjay Jain and another” (2019 (3) DCR). In this judgment also the Hon’ble Supreme
Court held that, ‘it is for accused to adduce evidence to prove that cheques were not supported by consideration and that there was no debt or liability to be discharged by him’. He also relied on the Hon’ble Supreme Court in Division bench judgment of “T. Vasanthakumar Vs Vijayakumari” (2015 (2) DCR). In that judgment ‘Rangappa case’ was referred by the Hon’ble Court. The Hon’ble Supreme Court in ‘T. Vasanthakumari’ case upheld that, ‘once the signature on the cheque has been accepted by accused, presumption under Section 139 of N.I Act would operate and burden was accused to disprove the cheque or existence of any legally recoverable debt or liability’. Against this judgment, the accused counsel relied on Supreme
Court judgment in “John K. Abraham Vs. Simon C. Abraham and another” (2014 (2)
ALD Criminal 61 S.C) for proposition that if the cheque is not in writings of accused, which strikes to root of complaint, hence accused is entitled for acquittal, because in the present case in hand also except signature on Ex.P2 cheuqe all other writings are not that of him. But in said case as per respondent/complainant the cheque was in handwriting of the accused himself and the very ext moment he made a diametrically opposite and contradictory statement that the cheque was not in the hand-writing of the appellant and complainant wrote the same. He also stated that the amount in words was written by him. Further that in cross examination he stated he was to aware of the date when he paid sum of Rs.1,50,000/- to accused.
But in this case there are no such lacunas or any contradictory statements with regard to cheque issuance or its writings on it.
29.Complainant also relied on the Hon’ble Supreme Court in Division
Bench judgment of “Rahul Sudhakar Anantwar Vs Shiv Kumar Kanhiyalal Shrivastav”
dated 21.10.2019, held that if the accused has not satisfactorily rebutted the
statutory presumption then accused is liable for conviction under Section 138 N.I
Act. The Hon’ble Supreme Court in Division Bench judgment of “Aps Forex Services
Pvt Ltd., Vs Shakti International Fashion Linkers and others” dated 14.02.2020, the cases of ‘Rangappa vs Sri Mohan’ and ‘Kishan Rao vs Shankar Goud’ were referred.
The Hon’ble Court observed that ... “It appears that both the Learned Trial Court as well as the High court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption 14 under Section 139 of N.I Act. As observed above, Section 139 of the Act is an example of revere onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.”
30. Thus, this court concludes that the accused could not rebut the presumptions under Sec. 139 of N.I Act which were raised in complainant’s favour except some mere denials and weak piece of evidence probabalising his defence pleas. Further there is no plausible explanation from accused for not complying the complainant's demand of arranging the cheque amount within 15 days from date of receipt of the statutory notice Ex.P4. In present case, since the complainant/PW1 has proved the essential ingredients of the offence under Section 138 of N.I. Act with respect to the drawing of cheque/Ex.P2 towards legally existing debt with promissory note Ex.P1, and presentation of cheque into the bank, returning of cheque unpaid by the drawer bank for the reason ‘funds insufficient' under Ex.P3, giving notice in writing to the accused demanding the payment of cheque amount under Ex.P4 and failure of the accused to make payment of the demanded cheque amount within the statutory period of 15 days inspite of receiving it under Ex.P5 though gave reply notice under Ex.P6, thus, the statutory presumptions under
Section 139 of NI Act is very much available to the complainant that the cheque
Ex.P2 has been issued by accused for the discharge of debt or liability under Ex.P1 promissory note. The accused has not been able to rebut the said statutory presumptions by adducing acceptable evidence or by eliciting anything against the case of complainant from the cross-examination of P.W.1 or PW.2, by preponderance of probability or by improbabalizing the case of the complainant as his elicitations could not meet the standards of ‘preponderance of probability, and not mere possibility, in view of reverse onus clauses enunciated in the Act. So from the discussion made supra, this court holds that the complainant has proved the guilty of the accused for the offence under Section 138 of Negotiable Instrument Act and the accused is liable for punishment under Section 138 of N.I. Act. Accordingly
Points No.1 to 3 are answered in favour of complainant and against accused.
15
POINT No.4:
“4) Whether the accused is liable for punishment under section 138 of
Negotiable Instrument Act ?” 31. In view of deciding points No. 1 to 3 in favour of complainant and against accused, this court concludes that the accused is liable for punishment under section 138 of NI Act. Accordingly Point No.4 is decided in favour of complainant and against accused.
POINT NO.5 : “To what relief?'
32. In the result, the accused is found guilty for the offence punishable under Section 138 of NI Act. Accordingly, he is convicted under Section 255 (2)
Cr.P.C.
Dictated to the Stenographer Grade-III, transcribed by her, corrected, signed and pronounced by
me in the open court, this the 23rd day of February, 2021.
Sd/- M. Venkata Seshamma
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
FAC/SPL.JUDL.MAGISTRATE OF FIRST CLASS FOR PROHIBITION & EXCISE: GUNTUR.
33.Complainant present. Accused present. Heard the learned Counsels for complainant as well as accused with regard to quantum of sentence for proved offence under section 138 of Negotiable Instrument Act against Accused. The complainant counsel submitted that accused intentionally issued cheque having knowledge of insufficient funds in his account which makes him liable for criminal liability and thereby for punishment as provided under section 138 of Negotiable
Instrument Act and also that complainant is also entitled for compensation for acts of the accused upto twice of the cheue amount as per law and as per judicial precedents. Accused submitted that he is sole bread winner for his family including his 90 years old aged father, and his children not yet settled, he is suffering with health problems, hence to consider his position while imposing the sentence by taking lenient view. The accused counsel also submitted the same and requested this Court to take lenient view considering his poor financial condition.
34. “....“As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should,unless there are special circumstances, in all cases of conviction, uniformly 16 exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonor of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate.
Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”
35. The Hon’ble Apex Court in its recent judgment between ‘M/s. Kalamani Tex
Vs.P. Balasubramanian’ for offence U/sec. 138 of N.I Act, the granting of compensation was reiterated also. The relevant extract is hereunder: “We are conscious of the settled principles that the object of Chapter XVII of the NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision, a single window for criminal liability for dishonour of cheque as well as civil liability for realization of the cheque amount. It is also well settled that there needs to be consistent approach towards awarding compensation and unless there exist special circumstances, the Courts should uniformly levy fine up to twice the cheque amount along with simple interest at the rate of 9% per annum.” 36. The Hon'ble Apex Court in “Mainuddin Abdul Sattar Shaikh vs Vijay D
Savli” on 6 July, 2015 wherein it was held that 'The problem is aggravated having regard to the fact that in spite of Section 143(3) of the Act requiring the complaints in regard to cheque dishonour cases under Section 138 of the Act to be concluded within six months from the date of the filing of the complaint, such cases seldom reach finality before three or four years let alone six months. These cases give rise to complications where civil suits have not been filed within three years on account of the pendency of the criminal cases'. So basing on above judgments of Hon’ble
Supreme Court and also the facts and circumstances of case this court is under obligation to award compensation to the victim/complainant in this cases as guilt of accused U/sec. 138 of N.I Act is proved before the court, Thus the accused is sentenced to undergo imprisonment for a period of one year six months, and to pay a fine of Rs.48,10,000/- (Rupees Forty eight lakhs ten thousand only), in default to 17 undergo simple imprisonment for a period of six months. The part of fine amount of
Rs.48,00,000/- (Rupees Forty eight lakhs only) is to be paid to the complainant towards compensation. The accused is appraised of his right to appeal. Conviction recorded in open Court. Copy of judgment is herewith furnished to the accused.
Dictated to the Stenographer Grade-III, transcribed by him, corrected and pronounced by me in
the open court on this the 23rd day of February, 2021.
Sd/- M. Venkata Seshamma,
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
FAC/SPL.JUDL.MAGISTRATE OF FIRST CLASS FOR PROHIBITION & EXCISE: GUNTUR.
Appendix of Evidence Witnesses Examined
For Complainant For Accused
P.W.1: Nomula Prasada Rao.D.W1: Palakollu Rajeswara Rao. PW.2: Bandamaneni Srinivasa Rao. P.W.3: Patchipulusu Gopala Krishna (Eschewed).
Exhibits Marked
For complainant:
Ex.P1: Promissory Note dt. 20.06.2012 for an amount of Rs.50,00,000/-. Ex.P2: Cheque Bearing No. 598050 dt. 22.03.2013 for an amount of Rs.48,00,000/-. Ex.P3: Cheque Return Memo dt. 26.03.2013. Ex.P4: Office copy of legal notice dt. 09.04.2013 Ex.P5: Postal Acknowledgement, dt.12.04.2013. Ex.P6: Reply noticed issued by the accused, Dt.26.04.2013. Ex.P7:The counterfoil for cheque number.301704, dt.04.06.2012. Ex.P8: Xerox copy of the cheque bearing Number.301704. Ex.P9: counterfoil for cheque number.301705, dt.04.06.2012 Ex.P10: xerox copy of the cheque bearing No.301705. Ex.P11: counterfoil for cheque number.075999, dt.04.06.2012. Ex.P12: Xerox copy of the cheque bearing No.075999. Ex.P13: SBI passbook saving bank account No.3135506854, dt.04.06.2012. Ex.P14: Income tax return verification form for the assessment year 2013-2014. Ex.P.15: statement of total income for the assessment year 2013-2014 for PW.1 PAN Card AAYPN 6260 B.
For defence: Ex.D 1 voucher, Dt.02.11.2011. Ex.D 2 voucher, Dt.001.08.2011. Ex.D 3 voucher, Dt.01.10.2011. Ex.D 4 voucher, Dt.04.11.2011. Ex.D 5 voucher, Dt.03.09.2011. Ex.D6 voucher, Dt.0201.12.2011. Ex.D 7 voucher, Dt.02.12.2011. Ex.D 8 voucher, Dt.31.12.2011. Ex.D 9 voucher, Dt.08.12.2011. Ex.D 10 voucher, Dt.31.12.2011. Ex.D 11 voucher, Dt.02.12.2011. Ex.D 12 voucher, Dt.17.12.2011. Ex.D 13 voucher, Dt.17.12.2011. Ex.D 14 voucher, Dt.18.12.2011. Ex.D 15 voucher, Dt.18.12.2011. Ex.D 16 voucher, Dt.13.01.2012. Ex.D 17 voucher, Dt.28.12.2011.
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Ex.D 18 voucher, Dt.28.12.2011. Ex.D 19 voucher, Dt.31.12.2011. Ex.D.20 Certified copy of FIR in Cr.No. 209/13 of Pattabhipuram P.S, Guntur. Ex.D.21 Certified copy of Charge sheet in C.C No. 147/16 on the file of this court. Ex.D.22 Certified copy of decree in O.S No. 369/11. Ex.D23 Certified copy of judgment in O.S No. 369/11.
Sd/- M. Venkata Seshamma,
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
FAC/SPL.JUDL.MAGISTRATE OF FIRST CLASS FOR PROHIBITION & EXCISE: GUNTUR.
//True copy//
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
FAC/SPL.JUDL.MAGISTRATE OF FIRST CLASS FOR PROHIBITION & EXCISE: GUNTUR.
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CALENDAR AND JUDGMENT
IN THE COURT OF THE SPECIAL JUDICIAL MAGISTRATE OF FIRST CLASS FOR
PROHIBITION & EXCISE: GUNTUR.
C.C No. 103/2015
01Date of offence::22-03-2013
02. Date of Report or complaint: 29-11-2013
03. Date of apprehension of accused : 20-08-2014
04. Date of release on bail if any,: –
05. Date of commencement of trial: 19-04-2016
06. Date of closure of trial :08-02-2021
07. Date of sentence or other order :23.02.2021 Explanation for delay and remarks: Several Adjournments were taken by both the parties for producing their evidence.
Complainant: Nomula Prasada Rao, S/o Krishna Murthy, G.V.R Mahila college Road, Saibaba Road, Guntur.
Name of theAge Father's’Calling ReligionResidence Taluk accused name Palakollu49Raghavaiah BusinessHinduD.No.5-91-18/5,Guntur. Rajeswara Rao4thlane, Lakshmipuram, Guntur
Offence:Dishonour of cheque for the reason of insufficient funds punishable u/section 138 of Negotiable Instrument Act Finding : Accused is found guilty for the offence punishable under Section 138 of Negotiable Instrument Act.
Sentence or is In the result, the accused is found guilty for the offence punishable under: order Section 138 of Negotiable Instruments Act. Accordingly, he is convicted under Section 255 (2) Cr.P.C and the accused is sentenced to undergo imprisonment for a period of one year six months and to pay a fine of Rs.48,10,000/- (Rupees Forty eight lakhs ten thousand only), in default of payment of fine amount to undergo simple imprisonment for a period of six months. The part of fine amount of Rs.48,00,000/- (Rupees Forty eight lakhs only) is to be paid to the complainant towards compensation. The accused is appraised of his right to appeal. Conviction recorded in open court. Copy of judgment is herewith furnished to the accused.
Sd/- M. Venkata Seshamma,
JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, GUNTUR.
FAC/SPL.JUDL.MAGISTRATE OF FIRST CLASS FOR PROHIBITION & EXCISE: GUNTUR. Copy to: The Hon’ble Chief Judicial Magistrate, Guntur. //True copy//
FAC/SPL.JUDL.MAGISTRATE OF FIRST CLASS FOR PROHIBITION & EXCISE: GUNTUR.
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