APAN100004532023 1
IN THE COURT OF ADDITIONAL JUDICIAL MAGISTRATE OF FIRST CLASS ::
PENUKONDA
Present: Sri Muzeeb Pasapala Syed,
Additional Judicial Magistrate of First Class, Penukonda,
Monday, the 24th day of March, 2025
CALENDER CASE No.292 of 2023
Between: C.Ram Prasad, age about 62 years, S/o Late Lingappa, Door No.1-542-5, Opposite to BSNL Office, Railway Station Road,
Penukonda Town, Sri Sathya Sai District.... Complainant
And:
M.V.V.Sathyanarayana, S/o Not known, Door No.6-1-136/3, Walkar Town, Padmarao Nagar,
Secunderabad-500025.... Accused
This case is coming before me on 19.03.2025 for final hearing in the presence of Sri G.Madan Mohan Reddy, Advocate for the complainant and of Sri R.Sreekanth Reddy, Advocate for the accused, and upon hearing on both sides and having stood over for consideration this court delivered the following:
:: J U D G M E N T ::
1) This case arises out of the private complaint, filed by the complainant against the accused for the offence punishable under Sec.138 of Negotiable
Instruments Act, 1881 (In short N.I. Act, 1881).
2. a) As glean from the complaint, it is the case of the complainant that the accused approached him through his relatives for the purpose of borrowing amount for his urgent need for family necessities and that the accused promised to repay the debt after three months from the date of borrowing and accordingly the accused borrowed Rs.10,00,000/- in cash from him with interest @ 24% p.a. and that on 14.11.2022 the accused met him and gave cheque bearing No.805006 drawn on account No.38407792899 of State Bank of India, (40617), RT Nagar, 2nd Main,
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No.48, 2nd cross, Muthappa Block, Ganganagar, R.T.Nagar Post, Bengaluru- 560032, IFSC Code SBIN0040617 and that on 04.02.2023 he had presented the said cheque in Andhra Pragathi Gramin Bank, Penukonda town and Mandal, Sri
Sathya Sai District and the said cheque was returned vide memo for funds insufficient in the account of accused.
b) The complainant submitted that the accused had issued the said cheque with fraudulent intention to defraud the complainant by not keeping sufficient funds in his account and that the accused issued the said cheque for discharging of legally enforceable debt but the accused did not maintain sufficient funds in the account to defraud and evade the payment of debt to him and that he issued legal notice on 11.02.2023 but the accused did not prefer to repay the legally enforceable debt amount and that there is no similar case filed or pending before any Court regarding this cheque. Hence the complaint.
3) This case was taken on file, for the offence punishable under Sec.138 r/w 142 of N.I. Act, 1881 against the accused and issued summons.
4) On appearance of the accused, the copies of documents, on which the complainant intends to rely upon, were furnished to the accused, in terms of
Section 207 Cr.P.C.
5) The accused was examined under Sec.251 Cr.P.C. for the offence punishable under Sec.138 of N.I. Act, 1881 and the same was read over and explained to the accused in Telugu language and having understood the same, he denied the offence and pleaded not guilty and claimed to be tried.
6) To prove his case, the complainant himself was examined as P.W.1 and also got marked Ex.P.1 to Ex.P.4. Ex.P1 is the cheque bearing No.805006 issued by the accused dt.14.11.2022. Ex.P2 is the return memo issued by the APGB,
Penukonda dt. 04.02.2023, Ex.P3 is the office copy of legal notice dt.11.02.2023 and Ex.P4 is the postal receipt dt.11.02.2023. On the other hand the accused himself is examined as R.W.1 and also got marked Exs.D1 and D2. Ex.D1 is the canceled cheque bearing No.805007 and Ex.D2 is the partnership amendment
APAN100004532023 3 deed changing partnership firm name from M/s Meher Engineerings to M/s M.V.V.
Sathyanarayana.
7) After closure of the complainant side evidence, the accused was examined under Sec.313 Cr.P.C., for the incriminating material evidence against him, in the evidence of complainant and for which he denied the same as false andreported defense evidence.
8) Heard arguments. Both the counsel have fervently argued in tune with their respective pleadings and evidence. For the sake of brevity felt expedient not to extract the arguments as it is as both counsel argued the matter with conscious of their pleadings and evidence. This Court has perused the Judgment of Smt
R.Venkatamma V/s State of A.P. rep. By Public Prosecutor Hyderabad and another, 2024 (3) ALT (Crl.) 311 (T.S.)relied by the learned counsel for complainant. This
Court has also perused the Judgments of 1) Jugesh Sehgal V/s Shamsher Singh
Gogi, 2009 (5) Supreme 320, Vinod Tanna V/s Zaheer Siddiqui, 2001 0 Supreme (SC) 1290 and Saroj Kumar Poddar V/s State (NCT of Delhi) and Another, 2007 0
Supreme (SC) 56relied by the learned counsel for accused.
9) Now, the point for determination is :
Whether the complainant brought home the guilt of accused for
the offence punishable under Sec.138 of Negotiable Instrument
Act, beyond all reasonable doubt?
POINT:
10. To fasten the liability of the accused, the complainant shall prove that he presented the Ex.P1 cheque for collection within the limitation period and after dishonor of the same he got issued statutory legal notice within the stipulated period under law to the accused and the accused received the said legal notice and he failed to pay the dishonored cheque amount within the stipulated period to the complainant. The complainant also shall prove that he filed this complaint before
APAN100004532023 4 the court having jurisdiction within the period of limitation and shall also prove that the accused issued Ex.P1 cheque for discharge of legally enforceable debt.
11. To prove the same, the complainant examined himself as P.W.1. He filed his chief affidavit in lieu of his examination in chief reiterating the contents of complaint. Through him Exs.P1 to P4 are received in evidence. In the cross examination P.W.1 deposed that he had seen the accused in the end of 2021.
P.W.1 deposed that the accused was working at Penukonda for Railway contract works. P.W.1 admitted that he do not have business transactions with accused.
P.W.1 admitted that he do not have blood relationship with accused. P.W.1 deposed that the name of the person who is standing in the Court hall as accused is M.V.V.Sathyanarayana. P.W.1 deposed that as per the cheque given by the accused his name is M.V.V. Sathyanarayana and he do not know the actual name or otherwise of the accused. P.W.1 deposed that he had filed this complaint against
M.V.V.Sathyanarayana. P.W.1 deposed that the signature on the cheque might be of M.V.V.Sathyanarayana. P.W.1 deposed that the Ex.P1/Cheque is current account cheque. P.W.1 deposed that the M.V.V.Sathyanarayana issued cheque on behalf of firm. P.W.1 admitted that the Bheema Shankar does Railway contract work on behalf of firm. P.W.1 deposed that he had issued legal notice in the name of M.V.V.Sathyanarayana as he do not know about the firm.
12) When Ex.P1/Cheque is confronted to the P.W.1 he admitted that the amount of Rs.10,00,000/- in words and letters is with one ink and the name of
Chandragiri Ramprasad is with another ink. P.W.1 deposed that Janardhan Reddy resident of Shapuram field. Ex.P1 cheque at Andhra Bank, Penukonda Branch.
P.W.1 admitted that State Bank of India and Andhra Bank are both separate entities. P.W.1 deposed that he had verified return memo issued by Bank authorities prior to sending of legal notice to accused. P.W.1 deposed that he had issued legal notice to the accused stating that cheque returned due to funds insufficient. When Ex.P3 is confronted to P.W.1, he admitted that he had mentioned son of Sathyanarayana as not known in it. P.W.1 deposed that the legal notice sent
APAN100004532023 5 to accused was not returned unserved and that he had received acknowledgment card. P.W.1 admitted that he had issued legal notice to the accused with insufficient address. P.W.1 admitted that M.Bheema Shankar engaged Prathap Reddy as site incharge in the Railway contract works. P.W.1 deposed that he had acquaintance with the Prathap Reddy during regular walk and apart from that he do not have business transactions with him. P.W.1 deposed that he do not have clarity about the name of the Bank of dishonored cheque and it might be of State Bank of India.
When Ex.P1 is confronted to P.W.1 he admitted that it is written on the back side of it as it is for security purpose.
13) In the cross examination P.W.1 deposed that the Andhra Pragathi
Grameena Bank issued Ex.P2 return memo as funds insufficient in the account of drawer of cheque. P.W.1 deposed that he is B.Com graduate. When Ex.P2 was confronted to P.W.1 he admitted that the bank authorities did not round off for any of the 20 reasons mentioned in the said memo and that it is written on it as kindly contact drawer, drawee bank please present again and having admitted the P.W.1 further stated that he had presented the cheque for three times and the bank authorities issued written memo with the above same reasons. P.W.1 admitted that he had not got mentioned in his complaint and chief affidavit that he had presented the cheque for three times. P.W.1 deposed that the bank authorities did not issue him the return memo of presentation of cheque for 2nd and 3rd times. P.W.1 deposed that he had issued legal notice to the accused after presentation of the cheque for the 3rd time. P.W.1 admitted to the suggestion that the Prathap Reddy gave Ex.D1 cheque to him in regard to their money transactions which was given to him by
Bheema Shankar for security purpose and that he filled up the said cheque after the death of Prathap Reddy and filed this false complaint against
M.V.V.Sathyanarayana.
14) During the Sec.313 Cr.P.C. examination the accused reported that there is evidence on his behalf and accordingly he had filed an application U/Sec.315 of
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Cr.P.C. and the same is allowed vide Crl.M.P.No.303/25 on 19.02.2025 granting permission for the accused to give his evidence.
15) The accused is examined himself as R.W.1. He deposed in his evidence in chief that the complainant had filed this complaint against him stating that he gave cheque to the complainant and infact he did not give any cheque to the complainant and that they have not received any amount from the complainant and that he is working as Railway contractor since 25 years in the name of the firm M/s
M.V.V.Sathyanarayana having 5 members as partners namely
1) M.V.V.Sathyanarayana, 2) M.Meher Mallikarjuna, 3) V.Parvathi, 4) M.Sathya
Kumari and 5) M.Bheema Shankar and that he is authorized signatory of their firm to sign the agreements between their firm and Indian Railways for executing contract works and to open the Bank accounts on behalf of their firm and that he had issued Ex.P1 cheque to Prathap Reddy who was site incharge for Railway works at Penukonda Railway Station as security and they give cheques to the material suppliers as part of their business and he gave another cheque also to
Prathap Reddy and that the said Prathap Reddy died about two years ago and that among said two cheques one was misplaced with Prathap Reddy and his wife returned Ex.D1 cheque to him and that the another cheque which was misplaced was not traced out and therefore he had made requisition with his bank to stop payment for Ex.P1 cheque and that he had seen complainant only on the date when the Prathap Reddy was died and that he had not received any amount from the complainant. Through him Exs.D1 and D2 are received in evidence.
16) In the cross examination R.W.1 deposed that their firm is partnership firm. R.W.1 admitted that the partners are himself, his father
M.V.V.Sathyanarayana, his mother M.Sathya Kumari, his paternal junior uncle
M.Meher Mallikarjuna and his grandmother V.Parvathi. R.W.1 admitted that he is the power of attorney holder of their firm. R.W.1 admitted that as per the said power of attorney he is authorized person to issue cheque and to receive cheque on behalf of their firm and also he appear on behalf of the firm if any cases before
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Courts of Law and before any authority for submitting bills. R.W.1 deposed that they have done Railway contract works at Penukonda Railway Station from 2017 to 2021-2022. R.W.1 admitted that the account No.38407792899 of State Bank of
India belongs to their firm and it is their actual account of State Bank of India,
R.T.Nagar, Bangalore. R.W.1 deposed that they are maintaining two current bank accounts for their firm one at R.T.Nagar and another at State Bank of India,
Secunderabad Branch and they showed the said two accounts in their audit. R.W.1 deposed that he had not shown the Ex.P1 and Ex.D1 cheques to their auditor in their audits. R.W.1 admitted that the signatures on Ex.P1 and Ex.D1 are of him.
R.W.1 admitted that the signature on the Vakalat filed on behalf of the accused is of him.
17) In the cross examination R.W.1 deposed that he know the cheque amount for cheque bearing No.805006. R.W.1 deposed that he do not know when was said cheque was presented and as to when it was bounced. R.W.1 admitted that there is no word M/s at the signatory column of the said Ex.P1 and Ex.D1 cheques when the same were confronted to him had further stated that they have opened the said account in the name of their firm and it is the bank who issued the cheque books as such it is not his fault if the Bank authorities had not printed M/s on the cheques. R.W.1 deposed that he had not filed any record before this Court to show that he gave Ex.P1 and Ex.D1 cheques to Prathap Reddy. R.W.1 denied to the suggestion that as M.V.V.Sathyanarayana is his father as such he is deposing false evidence about Ex.P1 cheque.
18) The counsel for the complainant argued that he had lent money to the accused and that the accused issued Ex.A1/Cheque to him and that the accused had not issued reply notice and that the wife of Prathap Reddy is not examined and that the complainant filed all the required documents within time and they clearly established the factum of legally enforceable debt and the failure of the accused in discharging the debt. The counsel for the complainant further argued that even considering that M.V.V.Sathyanarayana is a firm and that Sec.141 of N.I.Act is
APAN100004532023 8 applicable to this case as the Bheema Shankar who is representative of
M,V.V.Sathyanarayana firm had admitted his signature on the Ex.A1/Cheque as such he is liable U/Sec.138 of N.I. Act.
19) The counsel for the accused argued that this complaint is filed in individual capacity but not in representative capacity as such it is not accordance to
Sec.141 of N.I. Act. This complaint is filed against wrong person. The endorsement of kindly contact drawer, drawee bank please present again do not attract
U/Sec.138 of N.I. Act. That it is clearly written on the back side of Ex.A1/Cheque that it is issued for security purpose and that the legal notice was not properly served and the same is admitted by P.W.1. The counsel for the accused further argued that generally individual cheques will be issued for savings account but not current account. The counsel for the accused argued that Ex.P1 and Ex.D1 cheques were issued to site manager Prathap Reddy by Bheema Shankar as security in connection with Railway contract works and that the accused misused the said cheque after the death of Prathap Reddy. The counsel for the accused vehemently argued that the Sec.141 of N.I. Act is not complied with and that the ingredients of Sec.138 of N.I. Act are not been proved as such this complaint is liable to be dismissed and the accused herein is representative of M.V.V.
Sathyanarayana is entitled to be acquitted.
20) The main ingredients to attract offence U/Sec.138 of Negotiable
Instrument Act are that:
1) The drawing of a cheque by a person on an account maintained by him with the Banker for the payment of any amount of money to another from that account.
2) The cheque being drawn for the discharge in whole or in part of any debt or other liability.
3) Presentation of the cheque to the Bank,
4) The return of the cheque by the drawee bank as unpaid either because the amount of money standing to the credit of that amount is insufficient to
honour the cheque or that it exceeds the amount arranged to be paid from
that account,
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5)A notice by the payee or holder in due course making a demand for payment of the amount to the drawer of the cheque within 30 days of the receipt of the information from the Bank in regard to the return of cheque
and
6) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the receipt of the notice.
21) In the case on hand the very identity of the accused and association of the complainant with the accused is at doubt. The complainant in his complaint had mentioned that the accused M.V.V.Sathyanarayana had approached him through his relatives for the purpose of borrowing amount for his family necessities in urgency and thereby the accused M.V.V.Sathyanarayana had borrowed
Rs.10,00,000/- from him in cash. It is to be seen that the complainant is the resident of Penukonda Town and the accused is the resident of Hyderabad. The complainant failed to mention his relative through whom he got acquaintance with the accused. It has also come on record from the evidence of P.W.1 that he do not have business transactions with the accused. The complainant had not clarified and proved his acquaintance with the M.V.V.Sathyanarayana. It is so surprisingly that the complainant failed to identify M.V.V.Sathyanarayana. The complainant when asked about the identification of the person who is in the Court hall he had deposed that the name of the person who is standing in the Court hall as accused
M.V.V.Sathyanarayana. But infact the person who was standing at the Court hall deck was M.Bheema Shankar. Even much startling to this Court the complainant evidenced that he only know the name of the accused as M.V.V.Sathyanarayana from the cheque as it has come on record from the evidence of P.W.1 that as per the cheque given by the accused his name is M.V.V.Sathyanarayana and that he do not know the actual name or otherwise of the accused. The complainant had further deposed that the signature on the cheque might be of
M.V.V.Sathyanarayana. The complainant could not identify the person to whom he had lent a huge amount of Rs.10,00,000/-.
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22) The amount of Rs.10,00,000/- is not a small denomination to part away with. It is also not the case of the complainant that he is an uneducated person. If at all the complainant had lent such huge amount of Rs.10,00,000/- he would have definitely known the name of the person to whom he had lent and his address. The complainant would have had good association with the person to whom he had lent money as it is huge sum of Rs.10,00,000/-. The complainant had barely mentioned that the M.V.V.Sathyanarayana borrowed Rs.10,00,000/- from him for family necessities. The appearance of M.Bheema Shankar who is representative of
M.V.V.Sathyanarayana firm is not objected by the complainant or his counsel at the stage of his first appearance, Sec.251 Cr.P.C. examination, Trial, Sec.313 Cr.P.C.
examination and till posting the matter for the Judgment that he is not
M.V.V.Sathyanarayana. The counsel for the complainant had cross examined
Bheema Shankar at length during his evidence as R.W.1. This manifestly goes to show that the case of the complainant is of falsehood.
23)If the complainant had given amount to M.V.V.Sathyanarayana and if there were monetary transaction between both of them as evidenced by the complainant that the M.V.V.Sathyanarayana received money from him several times and returned to him, the complainant would have known
M.V.V.Sathyanarayana well and that the M.V.V.Sathyanarayana would have issued the cheque in his name.
24) The complainant and his learned counsel through complainant evidence, cross examination of R.W.1 and his argument had clearly admitted that the cheque was issued on behalf of firm but not by M.V.V.Sathyanarayana in his individual capacity. Therefore, the complainant failed to establish his acquaintance with
M.V.V.Sathyanarayana and M.V.V.Sathyanarayana said to have borrowed
Rs.10,00,000/- from him.
25)When the complainant had stated that the accused/
M.V.V.Sathyanarayana had issued cheque in his individual capacity, it is starling to hear from the complainant that the M.V.V.Sathyanarayana issued cheque on behalf
APAN100004532023 11 of firm. Even the counsel was not sure about the case that he filed. The counsel for the complainant having filed this complaint as the M.V.V.Sathyanarayana being the accused that too in the individual capacity, had drawn attention of this Court with his feeble way of his cross examination of R.W.1. The counsel for the complainant despite of culling out as the M.V.V.Sathyanarayana being signatory of cheque and he is the person who issued cheque to complainant had made M.Bheema Shankar to admit his signature on Ex.P1 to be of him and Bheema Shankar admission of signature on Ex.P1 goes contrary to the case of complainant. The way in which the complainant gave his evidence and the ineffective way of cross examination of counsel for complainant made this Court to believe the probable defense raised by the Bheema Shankar. The Bheema Shankar raised defense that he issued Ex.P1 and Ex.D1 cheques written in two cheques as security purpose to Prathap Reddy as security purpose. The acquaintance between complainant and Prathap Reddy is established. Admittedly the Bheema Shankar engaged Prathap Reddy to his firm contract works at Penukonda. The death of Prathap Reddy is admitted. The complainant could not establish as to who is M.V.V.Sathyanarayana and that it is given by M.V.V.Sathyanarayana. The defense of Bheema Shankar is more believed to be probable when on perusal of Ex.P1 and Ex.D1 cheques.
26) A perusal of Ex.P1 and Ex.D1 cheques it was written on the back sides as for security purpose. When M.V.V.Sathyanarayana gave the cheque in discharge of legally enforceable debt why would he issue the cheque as for security purpose. The complainant no where in his complaint or chief affidavit had tried to explain as to why security purpose was written on Ex.P1 cheque. Hence the issuance of cheque by M.V.V.Sathyanarayana for the legally enforceable debt stands not proved.
27) The complainant in his complaint and chief affidavit that the Bank authorities issued return memo as the Ex.P1/Cheque due to insufficient funds. But a perusal of return memo it is mentioned that kindly contact drawer, drawee bank please present again. The said writing prima-facie do not indicate that the cheque is
APAN100004532023 12 dishonored. Such endorsement on a return cheque indicates that the cheque needs to be re-represented after contacting the drawer or the drawee bank for clarification or processing. Undoubtedly the said endorsement would also indicate for insufficient funds. But in the present case it is no so. As admitted the Ex.P1 cheque is issued on behalf of firm. The Bheema Shankar who is representative of firm had also evidenced that he instructed his banker to stop payment for Ex.P1/Cheque as it is misplaced. There is every chance that the Bank authorities would have returned the cheque for two reasons (1) For incorrect information as the cheque belongs to the firm or (2) For stop payment as the Bheema Shankar instructed his banker to stop payment for Ex.P1/Cheque as it is misplaced. The complainant deposed that he had presented the Ex.P1/Cheque for thrice. But he did not produce the return memos for his previous two presentations. Leaving it apart for a while, considering that the complainant presented the cheque thrice and as that the bank authorities returned with the very same reason all the time, there is no evidence as to what are steps taken by the complainant for honoring the cheque when such an endorsement by made by the Bank authorities.
28) The complainant immediate action would be to contact the drawer and seek the drawer to rectify if there is any defect and resolve the issue so that the cheque can be processed. There is no evidence on record to show that soon after getting the said endorsement the complainant had approached
M.V.V.Sathyanarayana alleged to be drawer of cheque and informed the return of cheque with the said endorsement and get it rectified if there are any curable defects or that he had obtained fresh cheque for honour. It is also not the case of complainant that if the M.V.V.Sathyanarayana had declined to his request, the complainant had approached drawee bank of which the cheque is drawn to understand the reason for the return of cheque and had known the rectification to be done and that he acted accordingly. The complainant nowhere in his legal notice, complaint and chief affidavit had mentioned that the endorsement of kindly contact drawer, drawee bank please present again would amounts to funds
APAN100004532023 13 insufficient and that his banker returned the cheque with that endorsement as there were insufficient funds in the drawers account. The complainant had barely mentioned as the cheque/Ex.A1 was dishonored due to funds insufficient but it is not the case so. Since the Ex.P1/Cheque was misplaced and that the M.Bheema
Shankar evidenced that he had instructed his banker to stop payment for the said cheque, the said probable defense cannot be ruled out as the cheque belongs to the firm but not of M.V.V.Sathyanarayana personally. In Smt. R.Venkatamma V/s
State of A.P. rep. By Public Prosecutor Hyderabad and another, 2024 (3) ALT
(Crl.) 311 (T.S.) relied upon by the counsel for the complainant the crux of the matter was altogether different with the present factual matrix. In the above case all the cheques were returned with a clear endorsement of insufficient funds which is not the case in the present case. Further the presumption and genuinity of Bank slip and memo is discussed as contemplated U/Sec.146 of N.I. Act. Whereas in this case the Bank memo is not in question. Hence the Judgment relied upon by the counsel for the complainant is of no avail to the present case. In this way of the matter also the complainant failed to prove his case.
29) The case of the complainant is that the M.V.V.Sathyanarayana had issued Ex.P1 cheque in order to discharge his debt of Rs.10,00,000/-. No doubt the Bheema Shankar admitted his signature as drawer of the cheque. The contention of the Bheema Shankar is that the cheque is in the name of
M.V.V.Sathyanarayana firm and that he is representative of M.V.V.Sathyanarayana firm and that he issued the said cheque along with another cheque i.e., Ex.D1 to
Prathap Reddy who is site incharge during his Railway contract works at
Penukonda and that the said two cheques were misplaced with Prathap Reddy after his death and that one cheque i.e., Ex.D1 was returned to him by the wife of
Prathap Reddy and another cheque was not traced out and it is Ex.P1 cheque and that the complainant misplaced the said cheque. This probable defence raised by
Bheema Shankar.
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30) The point for consideration is that whether the Ex.P1 cheque is of
M.V.V.Sathyanarayana firm. The complainant himself deposed that the
M.V.V.Sathyanarayana issued cheque on behalf of firm. The P.W.1 deposed that he had issued legal notice in the name of M.V.V.Sathyanarayana as he do not know about the firm. The complainant admitted that M.Bheema Shankar engaged
Prathap Reddy as site incharge in Railway contract works. The acquaintance of the complainant with Prathap Reddy is admitted. The death of Prathap Reddy is also admitted. The Bheema Shankar engaging Prathap Reddy as site incharge in his
Railway contract works at Penukonda is also admitted. The Bheema Shankar had categorically deposed that he gave Ex.P1 and Ex.D1 cheques to Prathap Reddy.
The said factum could not be disproved by the complainant. The R.W.1 admitted that the account No.38407792899 of State Bank of India belongs to their firm and it is current account of State Bank of India, R.T.Nagar Branch, Bangalore. R.W.1 admitted that the signatures on Ex.P1 and Ex.D1 are of him. R.W.1 admitted that he is the Power of Attorney of their firm. R.W.1 admitted that as per the said Power of Attorney he is the authorized person to issue cheques and to receive cheques on behalf of their firms and also appearing on behalf of the firm for any cases before the Court of Law and before any authority for submitting bills. The way in which the counsel for the complainant had cross examined the Bheema Shankar it itself goes to show that the complainant admitted that the Ex.P1 cheque is of
M.V.V.Sathyanarayana firm. As has stated above the complainant himself deposed that M.V.V.Sathyanarayana issued cheque on behalf of the firm.
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138. Dishonour of cheque for insufficiency, etc., of funds in the account.— Where 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 out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of 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, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless—
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b)the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c)the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.— For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.]
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Section 141 in The Negotiable Instruments Act, 1881
141. Offences by companies. — (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the
Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State
Government, as the case may be, he shall not be liable for prosecution under this Chapter.
(2)Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.—
For the purposes of this section,—
(a)“company” means any body corporate and includes a firm or other
APAN100004532023 17 association of individuals; and
(b)“director”, in relation to a firm, means a partner in the firm.
31) From the conjoint reading of ss.138 and 141 of N.I. Act It is clear that if cheque is issued on behalf of the company/firm then primarily the company/firm should be prosecuted on fulfilling the condition mentioned U/Sec.138 of N.I. Act and if it is in the case of firm apart from the firm the partner who was incharge of and was responsible for the conduct of business of the firm may also be prosecuted vicariously for the prosecution of the company/firm U/Sec.138 of N.I.Act and firm should be arraigned as prime accused in the complaint and unless the firm/company arraignedin the complaint, cognizance of the complaint U/Sec.142 of
N.I. Act for the offence U/Sec.138 of N.I. Act cannot be taken. If the concerned
Court has mistakenly taken cognizance against Director of the company on the basis of complaint in which the company/firm was not impleaded as accused, then such cognizance U/Sec.142 of N.I.Act could be absolutely illegal as the proceedings cannot come on against the Director, partner or the employee of the company vicariously in the absence of the company as the cognizance of the offence can be taken against the drawer of the cheque and in case of cheque is issued on behalf of the company the drawer of the cheque would be company. The counsel for the complainant had also filed provision of Sec.141 of N.I. Act stating as to liability of companies clearly says that company includes a firm. Therefore going by his contention also it is culled out that the cheque is issued by the firm but not
M.V.V.Sathyanarayana in personal capacity and therefore the firm has to be made primary accused. The complainant neither made M.V.V.Sathyanarayana firm as an accused nor its representative as another accused for vicariously liability which amounts this complaint not to be maintainable.
APAN100004532023 18
In Aneeta Hada V/s Godfather Travels and Tours
Pvt., Ltd., 1 2012 5 SCC 661 it was held that the criminal liability on account of dishonor of cheque primarly falls on drawer of company and extends to its Officers only when the condition stated in Sec.141 of N.I. Act are fulfilled. The arraignmentof the company as accused U/Sec.141 of N.I. Act is mandatory.
In Himanshu V/s B.Shivamurthy, 2 2019 3 SCC
797 the Hon’ble Apex Court had held that in the absence of the company being arraignedas a accused, the prosecution of the Director of the company for the cheque bounce U/Sec.138 of N.I.
Act was not maintainable.
In Dilip Hariramani V/s Bank of Baroda 3
2002 SCC online SC579 wherein it was held by
the Hon’ble Supreme Court of India that a Director or partner cannot he held vicariously liable for a criminal offence U/Sec.138 of N.I. Act merely because of being a Director or Partner of company or firm, unless the company or firm is made an accused in the criminal proceedings and prevent to for committing offence of cheque bouncing as
principal accused.
1 2012 5 SCC 661 22019 3 SCC 797 32002 SCC online SC579
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32) In the case on hand the complainant had himself admitted that the
M.V.V.Sathyanarayana had issued cheque on behalf of firm. The complainant failed to arrive the M.V.V.Sathyanarayana firm as prime accused. Thus, this complaint is contrary not in accordance with Sec.141 of N.I.Act and it is not maintainable.
33) The complainant said to have issued legal notice to
M.V.V.Sathyanarayana which is marked under Ex.P3. As could be seen from Ex.P3 the same is issued to a person by name M.V.V.Sathyanarayana and without proper address and there is no father’s name of M.V.V.Sathyanarayana. The prime contention of the counsel for Bheema Shankar that the Bheema Shankar had not received the mandatory notice contemplated U/Sec.138 of N.I. Act. As could be seen from the record there is no evidence that the accused M.V.V.Sathyanarayana or M.V.V.Sathyanarayana firm had received legal notice. The counsel for the complainant had not filed any delivery acknowledgment card or any proof to show that the legal notice was served to M.V.V.Sathyanarayana. The counsel for the complainant had relied upon online copy of track consignment from India Post
Department. Even perusal of the same the consignment tract record dated 09.03.2023 shows that item redirected to Gandhi Nagar, Sub Post Office for the reason of insufficient address. The complainant himself admitted that he had issued legal notice to the accused with insufficient address. When a notice is returned with insufficient address it indicates that the Postal service could not locate or deliver the notice to the intended recipient, potentially due to an incorrect or incomplete address. Therefore there was no valid notice even to
M.V.V.Sathyanarayana as per Sec.138 of N.I. Act. As could be seen that the cheque is issued by M.V.V.Sathyanarayana firm. Hence it is also mandatory to issue notice to the firm U/Sec.138 of N.I. Act. In the very same Judgment of Aneeta
Hada case,4 the Hon’ble Supreme Court held that the notice contemplated
U/Sec.138 of N.I. Act is mandatory to firm as it being primary accused.
4Supra 1
APAN100004532023 20
34) Therefore from the above discussion the complainant failed to prove the legally enforceable debt, that the accused or the M.V.V.Sathyanarayana Firm issued cheque for discharge of any debt or liability, that the cheque dishonored for funds insufficient or that the cheque exceeded the amount arranged to be paid from that account, mandatory notice to the actual accused. The counsel for accused rightly relied upon Jugesh Sehgal V/s Shamsher Singh Gogi 2009 (5) Supreme 320 that all the ingredients are to be satisfied for the person who had drawn the cheque can be deemed to have committed an offence U/Sec.138 of N.I. Act. The complainant failed to prove all the ingredients against the accused to establish that he had committed offence punishable U/Sec.138 of N.I. Act. The complainant who should be vigilant of his rights had been careless by not following the procedure
U/Sec.141 of N.I. Act too. Resultantly, the complainant failed to establish the guilt of M.V.V.Sathyanarayana and also M.V.V.Sathyanarayana Firm for the offence punishable U/Sec.138 of N.I. Act.
35) IN THE RESULT, the complaint of the complainant is dismissed. The accused and M.Bheema Shankar representative of M.V.V.Sathyanarayana Firm are hereby acquitted U/Sec.255 (1) of Cr.P.C for the offence punishable U/Sec.138 of
N.I. Act.
Partly dictated and partly typed to my dictation by the Stenographer Gr.III, transcribed and typed by him, corrected and pronounced by me in open Court on this the 24th day of March, 2025
Addl. Judicial Magistrate of First Class Penukonda.
APPENDIX OF EVIDENCE
Complainant:Accused:
P.W.1: C.Ram PrasadR.W.1 Bheema Shankar
APAN100004532023 21
EXHIBITS MARKED ON BEHALF OF
Complainant :
Ex.P1: Cheque bearing No.805006 issued by accused dt.14.11.2022.
Ex.P2: Return memo issued by APGB, Penukonda dt.04.02.2023.
Ex.P3: Office copy of legal notice dt.11.02.2023.
Ex.P4: Postal receipt dt.11.02.2023.
EXHIBITS MARKED ON BEHALF OF
Defence:
Ex.D1 : Canceled cheque bearing No.805007. Ex.D2 : Partnership amendment deed changing partnership firm name from M/s Meher Engineerings to M/s M.V.V. Sathyanarayana.
AJMFC/Penukonda
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CALENDAR AND JUDGMENT
DISTRICT OF ANATHAPURAM
CALENDAR OF CASE TRIED BY THE ADDITIONAL JUDICIAL MAGISTRATE OF
FIRST CLASS AT PENUKONDA
Date ofDate ofAppreheDate ofDate ofDate ofDate of offencereport ornsion ofreleasedcommenceclose ofsentence complaintaccusedon bailment of trialtrialor order 1234567 14.11.2212.04.23----19.08.2419.03.2524.03.25
Explanation of delay and remarksNIL. JUDGMENT IN CALENDAR CASE NUMBER 292/2023 ON THE FILE OF
ADDITIONAL JUDICIAL MAGISTRATE OF FIRST CLASS AT PENUKONDA.
COMPLAINANTC.Ram Prasad, age about 62 years, S/o Late Lingappa, Door No.1-542-5, Opposite to BSNL Office, Railway Station Road, Penukonda Town, Sri Sathya Sai District. ----------------------------------------------------------------------------------------------------- Name of the Father’s Sex /Age Calling Village Mandal accused name ----------------------------------------------------------------------------------------------------- M.V.V.Sathyanarayana, S/o Not known, Door No.6-1-136/3, Walkar Town, Padmarao Nagar, Secunderabad-500025. ---------------------------------------------------------------------------------------------------- OFFENCEU/Sec. 138 of N.I.Act. FINDINGAccused found not guilty. IN THE RESULT, the complaint of the complainant is dismissed. SENTENCEThe accused and M.Bheema Shankar representative of M.V.V.Sathyanarayana Firm are hereby acquitted U/Sec.255 (1) of Cr.P.C for the offence punishable U/Sec.138 of N.I. Act.
SEAL: ADDL. JUDICIAL MAGISTRATE OF FIRST CLASS,
PENUKONDA.
Copy submitted to: The Hon’ble II Additional District & Sessions Judge, Hindupur . CALENDER CASE NUMBER292/2023 DATE OF JUDGMENT 24-03-2025 DATE OF DISPATCH OF CALENDAR 24-03-2025