PVS Suryanarayana Murthy

IN THE COURT OF XVI ADDL.JUDGE-CUM-XX ADDL.CHIEF

METROPOLITAN MAGISTRATE AT SECUNDERABAD.

MONDAY, THE 3 rd DAY OF DECEMBER, 2018

Present : Sri P.V.S.Suryanarayana Murthy, XV Addl.Judge-cum-XIX ACMM, FAC XVI Addl.Judge-cum-XX ACMM, Secunderabad.

C.C.NO.67 OF 2015

BETWEEN:

M/s Agarwal Foundaries Pvt. Ltd., rep by its Manager and Liaison Officer E.B.Jairaj Naidu S/o late Narayan Rao Naidu, Age: 46 years, Occ: Manager and Liaison Officer situated at Rama Towers, 5-4-83, 2nd Floor, TSK Chambers, Opp. Ranigunj Bus Depot, M.G.Road, Secunderabad.

... Complainant

AND

1.M/s Sai Ganesh Traders rep by its Proprietrix D.S.Ujwala Kumari W/o D.S.Srinivas Murthy, Age: 35 years, Occ: Business, Shop No.19, 12thCross, 1stBlock, Akshayanagar, T.C.Palya Main Road, Ramamurthynagar, Banglore, Karnataka State.

2.D.S.Ujwala Kumari W/o D.S.Srinivas Murthy, Age: 35 years, Occ: Business, 57, 5th Main, SIR MV Nagar, R.M.Nagar, Banglore, Karnataka State.

... Accused

This C.C has been coming for final disposal before me on 30.11.2018 in the presence of Sri K.Naganatha Prasad, Counsel for the complainant and Sri M.Shiva Shekar, Counsel for accused 1 and 2 and having stood over for consideration till this day, this court delivered the following:

J U D G M E N T

1.This is a private complaint filed by the complainant against the accused for the offence punishable under section 138 of negotiable instruments act.

2.The case of the complainant in brief is as follows.

The complainant is a private limited company. Accused No.1 is proprietary firm which is represented by its proprietrix accused No.2.

2 C.C.67 of 2015

The complainant had supplied TMT steel bars on credit basis under various invoices to the accused and it is a running account. The accused in discharge of the said debt had issued a cheque bearing

No.504175 dated 03.06.2015 for Rs.7,29,049/- on behalf of accused

No.1 firm. The complainant has deposited the said cheque in its bank and the same was returned on 17.06.2015 as “Funds Insufficient”. The complainant had sent a notice dated 22.06.2015. The accused got it return the same knowing the contents of the legal notice. In fact, the accused No.2 was in the station and in order to evade the payment she has got the wrong endorsement. Subsequently, the accused No.2 has telephoned to the complainant company and promised to pay the cheque amount within 15 days, but failed to pay the same. Hence, this complaint.

3. This complainant was taken on file against the accused for the offence punishable under section 138 of NI Act by XI-ACMM Court,

Secunderabad. Latter as per the orders of Honorable Metropolitan

Sessions Judge, Hyderabad this complaint was transferred to this Court

and renumbered as C.C.No.67 of 2015.

4. After appearance of the accused copies of the documents were furnished to the accused as contemplated under section 207 Cr.P.C.

Latter the accused was examined under section 251 Cr.P.C. by explaining the substance of acquisition for the offence punishable under section 138 of NI Act for which she pleaded not guilty and claimed to be tried.

5.During trial, the Manager of the complainant company got examined as PW1 and got marked Exs.P1 to P9.

3 C.C.67 of 2015

6.After closure of the complainant's evidence the accused was examined under section 313 Cr.P.C. by explaining the incriminating material found against her for which she denied and stated that at the time of entering into agreement she gave two blank cheques and two blank signed letterheads. Subsequently, the accused counsel reported no defence evidence and hence defence evidence closed.

7. Heard the arguments. The accused counsel also filed written arguments.

The learned counsel for the complainant has submitted that there are business transactions between the complainant and accused and during the said transaction the accused fell due of the amount and for discharge of the said amount she gave Ex.P1 cheque. It is further submitted that the accused is not disputing the signature found on

Ex.P1 cheque and it is not the case of the accused that Ex.P1 cheque is not drawn from the account maintained by the accused. According to him, the presumption is in favour of the complainant. He has further submitted that Ex.P9 letter sent by the accused along with her husband, sought time for payment of the due amount itself shows that the accused fell due of the amount. He prays to convict the accused.

(a) The brief contentions in the written arguments of the accused is as follows:-

The complainant company got filed the complaint through its Manager/Liaison officer basing on the authorisation letter, Ex.P8.

Ex.P8 reveals that the said authorisation letter was not executed and not signed by all the directors of the complainant company and the 4 C.C.67 of 2015 complainant failed to file extract of minutes of meeting of the Board of

Directors of Company. The contents of Ex.P8 shows that PW1 is not having any locus standi to file the complaint and the same is not empowered to PW1 to file the complaint and it authorises PW1 to file civil case.Hence, PW1 is not having proper authorisation to represent the company. PW1 has stated that he has not filed any document to show that there was agreement between the complainant and the accused in respect of the sale and purchases and in the complaint, chief-examination and notice it is not specifically mentioned how much worth of material sold to the accused. The PW1 further admitted that he has not filed any record to show that payment of GST and E-Sugam and the complainant has filed civil suit vide O.S.No.84/2016 for recovery of Rs.7,14,673/-. It is not mentioned in the complaint about

Ex.P9. Thus, the complainant has not supplied any material as claimed under Ex.P7. The complainant failed to establish on what basis the complainant claimed the interest and the complainant claimed excess amount of Rs.14,376/- as the amount under Ex.P7 is Rs.7,14,673/- and in Ex.P1 Rs.7,29,049/-. Ex.P9 which is dated 10.07.2015 and the same is subsequent to Exs.P1 to P6. Ex.P9 does not contain the due amount of Rs.7,29,049/- and the complainant failed to prove the execution of

Ex.P9 and it is not mentioned in the complaint about the existence of

Ex.P9. The bank return memo does not contain the signature of bank officials, therefore the presumption U/s.146 cannot be relied upon. The notice sent by the complainant returned as addressee out of station as seen from Exs.P5 and P6. Thus, statutory notice was not served. It is prayed to dismiss the complaint.

5 C.C.67 of 2015

8. Now the point for determination is that whether the complainant could bring home the guilt of the accused for the offence punishable under section 138 of Negotiable Instruments Act?

9.POINT :- The facts of the case is stated supra. To prove the offence under section 138 of Negotiable Instruments Act the following aspects are to be established.

1. That there is an existing legally enforceable debt as on the date of issuance of the disputed cheques,

2. That the cheque was presented in the bank within the six months from the date of which it was drawn or within the period of its validity. As per section 35 A of Banking Regulation

Act 1949 the validity of cheque is reduced to 3 months from six months with effect from 1.04.2012.

3. Cheque was returned unpaid and the complainant herein gave notice in writing regarding the dishonor of cheques within 30 days from the date of receipt of the information by him.

4. That the accused failed to make payment within 15 days from the date of receipt of notice.

10. Before proceeding further it is beneficial to refer the provisions of Negotiable Instruments Act and chapter 17 of Negotiable

Instruments Act make a civil transaction to be an offence by fiction of law and that certain rebuttable presumptions that shall be drawn.

The object and intention of these penal provisions are to prevent the issuance of the cheques in a playful manner or with a dishonest intention or that no mind to honor or without sufficient funds in the accounts maintained by the drawer. The initial presumption is in favour 6 C.C.67 of 2015 of the complainant. The rebuttable presumption under section 139 of

Negotiable Instruments Act is a device to prevent undue delay in the course of litigation.

11.The case of the complainant is that the complainant is a private limited company and they have supplied TMT steel bars on credit basis under various invoices to the accused and the said account is a running account. The further version of the complainant is that the accused No.2 is the proprietrix of accused No.1 and for discharge of the liability she has issued the cheque bearing No.504175 dated 03.06.2015 and the same was bounced. The defense of the accused is total denial in 251 Cr.P.C. examination and in 313 Cr.P.C. examination it is stated that the accused gave the blank signed cheques. It was suggested to PW1 that the complainant has obtained the blank signed cheques.

12. PW1 is the Manager-cum-Liaison officer of the complainant. PW1 has reiterated the complaint averments in his chief-examination. Ex.P8 is the authorisation letter given by the director in favour of PW1 dated 16.01.2016. Ex.P8 discloses that PW1 was given authorisation by the

Director to prosecute the case.

13The accused counsel relied on the citation reported in

2015 (2) ALT (Crl.) 356 (AP)

in between

M/s.Brilliant Industries Ltd. Vs. M/s.Nayagara Industries Ltd.

and others

In the cited case his lordships has held that PW1 has filed 7 C.C.67 of 2015 authorisation given by one Srimannarayana to file the complaint and there was no material to show that the Board of Directors of the company delegated the said powers to Srimannarayana.

In this case on hand, in Ex.P8 it is specifically mentioned that in the minutes of meeting of Board of Directors of the company of

Agarwal Foundries Private Limited, authorised the PW1 Manager-cum-

Liaison officer to take all appropriate civil proceedings against the defaulter. Hence, the above citation is not helpful to the accused. Thus,

PW1 is authorised to prosecute the case on behalf of company in pursuance of Ex.P8.

14. PW1 reiterated the complaint averments in his chief-examination.

During the cross-examination PW1 has stated that there was no written agreement between the complainant and the accused with regard to the credit facility. He has further stated that he has not filed GST and E-

Sugam to show that they supplied the material. He has admitted that there is no written agreement with regard to interest. He has admitted that the complainant has filed a suit against the accused for recovery of Rs.7,14,673/- on 25.02.2016 vide O.S.No.84/2016 on the file of

III-Senior Civil Judge’s Court and accused is contesting in the said suit.

He has denied the suggestion that they have obtained two blank signed cheques and two blank letter heads from the accused. Further he has stated that he cannot say with regard to letter dated 16.02.2015 shown to him whether the complainant sales in-charge received the letter or not.

8 C.C.67 of 2015

15.The specific version of the complainant is that the complainant supplied the material i.e. TMT steel bars on credit basis to the accused.

Ex.P7 is the copy of the statement of account. In Ex.P7 the bill numbers mentioned in Column No.1 and the date is also noted. The accused counsel has submitted that in Ex.P7 the total amount is

Rs.7,14,673/-, but the cheque amount is Rs.7,29,049/-. No doubt as seen from Ex.P7 the total amount noted in the statement of account for the financial year, 2014 - 2015 is Rs.7,14,673/-. In the bottom of statement of account the date is noted as 4th February 2016. In the debit note page of Ex.P7 the date is also noted as 31.01.2016. As seen from Ex.P7 the statement of account prepared up to January, 2016.

Ex.P1 cheque is dated 03.06.2015. The complainant counsel has submitted that by the date of 03.06.2015 balance was Rs.7,29,049/- as per running account. Hence, the case of the complainant cannot be rejected as the amount is noted as Rs.7,14,673/- in Ex.P7 and

Rs.7,29,049/- in Ex.P1. In Ex.P7 the date of the bill, bill number and the amount also clearly mentioned. No doubt the signature of the accused is not obtained in Ex.P7. Thus, the evidence of PW1 coupled with Ex.P7 discloses that there were business transactions between the accused and the complainant.

16.Ex.P9 is the letter dated 10.07.2015. Ex.P9 letter is typed on the letter head of Sai Ganesh Traders, Banglore. The signature of the accused and one Srinivas Murthy found on Ex.P9. The accused is not disputing her signature found on Ex.P9. It was suggested to PW1 that basing on the blank letter head the complainant created Ex.P9. In

Ex.P9 it is specifically mentioned that the accused due amount and 9 C.C.67 of 2015 they would discharge the dues and continue the business. Except giving the suggestions to PW1 that Ex.P9 is a created document, nothing could be elicited. It is not the case of the accused that Ex.P9 is not typed on the letter head of the accused. It is not the case of the accused that the signature found on Ex.P9 is not that of the accused.

Assuming for a moment, if the accused gave the blank letter heads and cheques and the complainant did not supply the material, what prevented the accused to issue notice demanding the return of the blank letter heads and cheques.

17.It was suggested to PW1 that the complainant sales in-charge received the letter dated 16.02.2015. The accused has not entered into witness box nor produced the said letter to show that the accused has not received the material. If really the accused has not received the material and she gave the letter dated 16.02.2015, what prevented her to issue notice demanding return of the blank signed letter heads and cheques. Thus, all the above aspects improbablises the version of the accused. Thus, the evidence of PW1 coupled with Exs.P7 and P9 proves that the complainant supplied the material to the accused and for discharge of the said amount accused issued Ex.P1 cheque.

18.The accused counsel relied on the citation reported in

2007 (1) ALD (Crl.) 551 (AP)

in between

Sri Teja Benefit Fund Ltd., Hyderabad Vs. C.Dayananda Rao and

another

In the cited case the PW1 has admitted that there are three types of loans advanced to the accused and the cheque does not discloses 10 C.C.67 of 2015 the loan account No.OL160. Thus, the facts in the above case are not identical to the case on hand and not helpful to the accused. Moreover, it is not the case of the complainant that there are some other transactions apart from the business transactions.

19.The accused counsel relied on the citation reported in

2000 Cri.L.J. 257

in between

Narinder Kumar Vs. Harnam Singh

In the cited case his lordships has observed at para-7 that the complainant has filled the blanks in the cheques and accused produced

Ex.D5 reply notice to prove the defense.

In this case on hand PW1 has denied that they received the blank cheques. No material is produced to show that the accused gave the blank cheque. No documents exhibited by the accused to show that

Exs.P1 and P9 were blank at the time she signed. Hence, the above citation is not helpful to the accused.

20. The accused counsel relied on the citation reported in

2003 (2) ALD (Crl.) 219 (AP)= 2004 (1) Crimes 567

in between

Avon Organics Limited. Hyd. Vs. Poineer Products Limited, New

Delhi and others

In the cited case the complainant has produced Exs.P15 and P16 letters written by the accused, they show that the cheque was sent along with the letter and his lordships found that the cheque was blank. The facts in the above case are not identical to the case on hand and hence hot helpful to the accused.

11 C.C.67 of 2015

21.The accused counsel relied on the citation reported in

2005 (1) ALD (Crl.) (NOC) 39

in between

Sri Murugan Financiers Vs. P.V.Perumal

In the cited case his lordships has held that finance company failed to produce the account books and hence failed to prove the legally enforceable debt.

In this case on hand the accused wrote Ex.P9 letter, sought time to clear the dues. Hence, the above citation is not helpful to the accused.

22. The accused counsel relied on the citation reported in

2006 (1) ALD (Crl.) 300 (AP)

in between

Laxminivas Agarwal Vs. Andhra Semi Conductors Pvt. Ltd.,

Hyderabad abd others

In the cited case at para-14 his lordships has found that Exs.P14 to P16 shows that Exs.P1 and P2 cheques were taken by the accused on the date of the loan itself. Thus, the facts in the above case are not identical to the case on hand and hence not helpful to the accused.

23. The accused counsel also relied on the citation reported in

2017 (1) ALT (Crl.) 221 (AP)

in between

N.Narasamma Vs. Chinna Mukkiranna and another

for the proposition that once the accused taken plea that cheque was not issued for discharge of legally enforceable debt, the complainant is bound to prove the circumstances under which the cheque was given.

12 C.C.67 of 2015

In this case on hand the complainant has produced Ex.P7 statement of account. Ex.P9 letter given by the accused shows that the accused fell due of the amount and agreed to clear the dues. Hence, the above citation is not helpful to the accused.

24. The accused counsel relied on the citation reported in

2008 (2) ALT (Crl.) 170 (SC)

in between

Krishna Janardhan Bhat Vs.Dattatraya G.Hegde

In the cited case his lordships has held that for discharging the burden of proof, the accused need not examine himself. No doubt, the accused need not enter into witness box to rebut the presumption, but the reverse burden is on the accused, once the accused admitted the issuance of the cheque.

25.In the citation report in

2015 (3) Crimes 499

in between

Omprakash Vs. L.Sunitha and another

The Hon’ble High Court has held that “when the holder of the

cheque establishes that he legally received the cheque from

the drawer, the presumption U/s.139 follows to the effect that

there existed a legally enforceable debt, consequently reverse

burden will be on the accused to establish that there existed

no legally enforceable debt”.

26. In the citation reported in

2010 (2) ALD (Crl.) 734

in between

Rangappa Vs. Mohan

13 C.C.67 of 2015

The Hon’ble Apex Court full bench has held that “the

presumption mandated by Section 139 of Negotiable

Instruments Act indeed includes the existence of a legally

enforceable debt or liability”.

27.In the citation reported in

AIR 2015 SC 2240

in between

T.Vasanth Kumar Vs. Vijaya Kumari

The Hon’ble Apex Court has held that “once the maker of the

cheque admitted the signature on the cheque and issuance of

the cheque, the presumption U/s.139 would operate and the

burden is on the accused to disprove the cheque was not

issued for discharge of legally enforceable debt”.

28.In the light of the principles enunciated in the above judgments of Hon’ble Supreme Court i.e. in Rangappa Vs. Mohan and

T.Vasanth Kumar Vs. Vijaya Kumari the citations relied by the accused is not helpful to the accused in the present set of facts.

Further the accused is not disputing the signature found on Ex.P1 cheque and it is not the case of the accused that Ex.P1 cheque is not drawn from the account maintained by the accused. Further the version of the accused is that accused gave the blank signed cheque to the complainant. The accused failed to prove that the accused gave the blank signed cheque. Hence, the accused failed to rebut the presumption available in favour of the complainant.

29.Ex.P1 cheque is dated 03.06.2015. Ex.P2 is the return memo 14 C.C.67 of 2015

dated 17.06.2015. No doubt Ex.P2 does not contain signature of Bank

official. Ex.P2 is computer generated copy. In the light of the presumption U/s.146 of Negotiable Instrument Act, there is no need to examine the bank people to prove Ex.P2. The complainant has to issue notice within 30 days from the date of receipt of Ex.P2. Ex.P3 is the notice dated 22.06.2015. Ex.P4 is the postal receipts dated 24.06.2015. Ex.P4 discloses that Ex.P3 notice sent by RPAD on 24.06.2015. Exs.P5 and P6 are the returned postal covers. The version of the accused is that the accused has not received the notice as contemplated U/s.138(b) of Negotiable Instrument Act.

30.The accused counsel relied on the citation reported in

2010 (2) ALT (Crl.) 95 (SC)

in between

M.D.Thomas Vs. P.S.Jaleel and another

In the cited case the wife of the accused received the notice and his lordships has held that the notice was not duly served on the accused.

31.The accused counsel relied on the citation reported in

2005 (1) ALD (Crl.) 473 (AP)

in between

Yedlapalli Satyam Vs. K.Seetharamanjaneyulu and another

In the cited case his lordships has held that there was no proper service of the notice on the accused.

32.The accused counsel relied on the citation reported in

2011 (2) Crimes 287

in between

Kanhaiya Lal and another vs. State of U.P. and another

15 C.C.67 of 2015 for the proposition that in the absence of date of service of notice demanding payment of cheque amount, no offence is made out against the accused.

33.In the citation reported in

2007 (6) SCC 555

in between

C.C.Alvi Haji Vs. Palapetty Muhammed

The Hon’ble Apex Court full bench discussed regarding the issuance of the notice. Para-17 of above citation is extracted as follows:-

“It is also to be borne in mind that the requirement of

giving of notice is a clear departure from the rule of

Criminal Law. Where there is no stipulation of giving

of a notice before filing a complaint. Any drawer who

claims that he did not receive the notice sent by

post, can, within 15 days of receipt of summons from

the Court in respect of the complaint under Section

138 of the Act, make payment of the cheque amount

and submit to the Court that he had made payment

within 15 days of receipt of summons (by receiving a

copy of complaint with the summons) and,

therefore, the complaint is liable to be rejected. A

person who does not pay within 15 days of receipt of

the summons from the Court along with the copy of

the complaint under Section 138 of the Act, cannot

obviously contend that there was no proper service

of notice as required under Section 138, by ignoring

statutory presumption to the contrary under Section

27 of the G.C.Act and Section 114 of the Evidence

Act. In our view, any other interpretation of the

proviso would defeat the very object of the

legislation. As observed in Bhaskaran’s case (supra)

16 C.C.67 of 2015

if the giving of notice in the context of Clause(b) of

the proviso was the same as the ‘receipt of notice’

a trickster cheque drawer get the premium to avoid

receiving the notice by adopting different

strategies and escape from legal consequences of

Section 138 of the Act”.

34.In the citation reported in

AIR 2014 SC 3057

In between

M/s.Ajeet Seeds Ltd Vs. K.Gopalakrishnaiah

The Hon’ble Apex Court has held that “Section 27 of the General

Clauses Act gives rise to a presumption that the service of notice has been effected when it is sent to the correct address by registered post”.

In the light of the citations of Hon’ble Apex Court in C.C.Alvi

Haji Vs. Palapetty Muhammed and M/s.Ajeet Seeds Ltd Vs.

K.Gopalakrishnaiah supra, the citations relied by the accused are not helpful to the accused in the present set of facts. Furthermore, in this case on hand it is not the case of the accused that the address mentioned in Ex.P3 notice is incorrect. Once the notice is sent to the correct address, the presumption U/s.27 of General Clauses act is that the notice has been duly served though it was returned as addressee not in station. Hence, for the above reasons this Court is of the considered opinion that the complainant complied the mandatory provisions of Section 138(b) of Negotiable Instruments Act.

35.The accused counsel relied on the citation reported in 17 C.C.67 of 2015

2012 (3) ALT (Crl.) 14 (AP)

in between

G.Ashok Kumar Goud Vs. P.Anjili Bai and another

In the cited case his lordships has held that the accused need not adduce any positive evidence to rebut the presumption. No doubt, the accused need not adduce the evidence to rebut the presumption.

In this case on hand Ex.P9 supports the version of the complainant that the accused fell due of the amount. Further the accused failed to prove that the accused gave the blank signed cheques. Hence, for the above reasons this Court is of the considered opinion that the complainant could prove that Ex.P1 cheque was issued for discharge of legally enforceable debt and the accused failed to rebut the presumption available in favour of the complainant. This point is answered accordingly.

In the result, the accused is found guilty for the offence punishable U/s.138 of Negotiable Instruments Act and convicted

U/s.255(2) Cr.P.C.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open court on this the 3rd day of December, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

18 C.C.67 of 2015

36.The accused No.2 who is the proprietrix of accused No.1 is questioned regarding the quantum of sentence that can be awarded to her for the offence U/s.138 of Negotiable Instrument Act for which she has stated that there is a loss in the business and at present she is doing small job along with her husband and she has to maintain her only son. She has further submitted to take lenient view.

37.Considering the facts and circumstances of the case, this Court is not inclined to invoke the provisions of Probation of Offenders Act.

In this case on hand, the cheque amount is Rs.7,29,049/-. In the citation reported in

Crl.Rivision No.583 of 2012

in between

Meel Bai Vs. Rameshwara Prasad Chouhan

The Hon’ble Chattisgarh High Court after referring the Hon’ble

Apex Court’s judgments has held that “the punishment to be awarded in Section 138 of Negotiable Instrument Act cases are meant to ensure payment of money and threat of jail is only to ensure recovery and as such, imposition of jail sentence is not mandatory”.

38.In the citation reported in

2012 (1) ALD (Crl.) 803 (SC)

in between

R.Vijayan Vs. Baby and another

The Hon’ble Apex Court has held that “the apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation U/s.357(1)(b) of the Code”.

39.In the citation reported in 19 C.C.67 of 2015

2014 (1) ALT (Crl.) 145 (SC)

in between

Somnath Sarka Vs. Utpal Basu Mallick and another

The Hon’ble Apex Court has held that “the amount to be paid towards compensation U/s.357 Cr.P.C. to the complainant is not different or separate from the fine amount imposed U/s.138 of

Negotiable Instrument Act”. So, the compensation has to be awarded to the complainant out of fine amount.

Considering the cheque amount and also the circumstances of the case, this Court is of the considered opinion that sentencing the accused No.2 who is proprietrix of accused No.1 to undergo rigorous imprisonment for a period of six months and shall pay fine of

Rs.7,30,000/- would meet the ends of justice. Hence, the accused No.2 who is proprietrix of accused No.1 is sentenced to undergo rigorous imprisonment for a period of six months and to pay fine of

Rs.7,30,000/- (Rupees Seven Lakhs Thirty Thousand only). In default of payment of fine, she shall undergo simple imprisonment for a period of one month.Out of the fine amount of Rs.7,30,000/-,

Rs.7,25,000/- shall be paid to the complainant towards compensation

U/s.357(1)(b) Cr.P.C. after expiry of appeal time. Since accused No.2 is proprietrix of accused No.1 there is no difference between firm and proprietrix and proprietrix is responsible for the firm, no separate sentence need to be passed against accused No.1. There is no remand period to give set off Under Section 428 of Cr.P.C.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open Court on this 3rd day of December, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

20 C.C.67 of 2015

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR COMPLAINANT : FOR DEFENCE:

PW1 : Jai Raj Naidu - Nil -

DOCUMENTS MARKED

FOR COMPLAINANT:

Ex.P1 : Cheque No.504175 dated 03.06.2015 for Rs.7,29,049/-

Ex.P2 : Cheque return memo dated 17.06.2015

Ex.P3 : Office copy of legal notice dated 22.06.2015

Ex.P4 : Postal receipts (Nos.2)

Ex.P5 : Returned postal cover

Ex.P6 : Returned postal cover

Ex.P7 : Statement of account

Ex.P8 : Authorization letter dated 16.01.2016

Ex.P9 : letter dated 10.07.2015

DEFENCE :

- Nil -

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

IN THE COURT OF XVI ADDL.JUDGE-CUM-XX ADDL.CHIEF

METROPOLITAN MAGISTRATE AT SECUNDERABAD.

TUESDAY, THE 16 th DAY OF OCTOBER, 2018

Present : Sri P.V.S.Suryanarayana Murthy, XV Addl.Judge-cum-XIX ACMM, FAC XVI Addl.Judge-cum-XX ACMM, Secunderabad

C.C.NO.251 OF 2016

BETWEEN:

G.Ramesh S/o late G.Shankerappa, Occ: Business, R/o 57, Jerra, Secunderabad

... Complainant

AND

Pradeep Singh Bagga S/o Sujan Singh, Age: 55 years,Occ:Business,R/oH.No.72, ShantiniketanColony,MahendraHills, Secunderabad.

... Accused

This C.C has been coming for final disposal before me on 15.10.2018 in the presence of Sri J.Jeevan Babu, Counsel for the complainant and Sri V.S.Kirshnudu, Counsel for the accused and having stood over for consideration till this day, this court delivered the following:

J U D G M E N T

1.This is a private complaint filed by the complainant against the accused for the offence punishable U/s.138 of the Negotiable

Instruments Act.

2.The brief averments of the complaint are as follows:-

The accused is the friend of the complainant and having good acquaintance with each other and out of the said acquaintance the accused had approached the complainant and requested to advance a sum of Rs.11,00,000/-. The complainant has lent Rs.6,00,000/- initially and later also lent Rs.5,00,000/-. The accused agreed to pay the amount with interest at 2.25% per month. The accused was paying the 2 C.C.251 of 2016 interest as agreed and has not repaid the loan amount and dodged the matter. The accused has paid the interest until the end of November, 2014 and since December, 2014 accused stopped payment of monthly interest. Later on the request of the complainant the accused has issued two account payee cheques of Wayside Bar and Restaurant

dated 04.04.2015 drawn on SBI, Secunderabad branch. The

complainant presented the said two cheques on 04.04.2015 in his bank

A.P.Mahesh Co-operative Urban Bank Ltd., Secunderabad and the same were returned as “Funds Insufficient” on 07.04.2015. Later the complainant got issued a notice on 06.05.2015 and the accused has received the notice on 12.05.2015 and sent a reply on 04.06.2015.

Hence, this complaint.

3.This case was taken on file against the accused for the offence punishable U/s.138 of the Negotiable Instruments Act by the XI-

AdditionalChief Metropolitan Magistrate, Secunderabad. Later as per

the orders of the Honourable Metropolitan Sessions Judge, Hyderabad this case is transferred to this Court andrenumbered as

C.C.No.251/2016.

4.After appearance of the accused copies of the documents furnished to him as contemplated U/s.207 Cr.P.C. Later he was examined U/sec.251 Cr.P.C. by explaining the substance of accusation for the offence U/s.138 of Negotiable Instrument Act, for which he pleaded not guilty and claimed to be tried.

3 C.C.251 of 2016

5.During trial, the complainant himself got examined as PW1 and got marked Exs.P1 to P7.

6.After closure of the complainant's evidence, accused was examined U/s. 313 Cr.P.C. by explaining the incriminating material found against him, for which he denied and reported to have defence evidence. The accused himself got examined as DW1 and one Vinodini

Reddy as DW2 and got marked Exs.D1 to D3 and Ex.X1.

7.Heard the arguments. The accused counsel also filed written arguments.

The complainant counsel has submitted that the accused has received Rs.11,00,000/- from the complainant in two installments as hand loan and paid interest upto November, 2014 and committed default in payment of interest since December, 2014. According to him the evidence of PW1 coupled with Exs.P1 to P5 proves the version of the complainant. It is further submitted that the accused is not disputing his signatures found on Exs.P1 and P2 cheques and on the other hand he has admitted the receipt of Rs.11,00,000/-. According to him, the evidence of PW1 also supports the case of the complainant that the complainant advanced Rs.11,00,000/- to the accused and the accused issued the subject cheques for discharge of the said amount.

He prays to convict the accused.

(a)The brief contentions in the written arguments of the accused are as follows:- 4 C.C.251 of 2016

The cheque No.985871 was issued by the accused on 06.02.2010 to the complainant. All the other cheques in the said series i.e. prior to and subsequent to cheque Nos.985871 were used from 15.09.2009 to 13.03.2010 which is evident from the statement of account dated 06.08.2010 (Ex.D1). The cheque No.545831 was issued by the accused on 19.12.2012 to the complainant. All the other cheques in the said series i.e. prior to and subsequent to cheque No.545831 were used from 05.10.2012 to 27.07.2013 (Ex.D2). The accused has not issued the two cheques on 04.04.2015 as alleged by the complainant. The date of notice is 06.05.2015 and the complainant got knowledge about the dishonour of cheque on 07.04.2015 and the notice was served on the accused on 12.05.2015 and the notice was not served within 30 days from the date of knowledge of dishonour. The complainant has not stated when the said loan amounts were lent by him and he failed to examine Sri Suresh and brother of the complainant who were said to be present at the time of issue of the cheques. The accused in the reply notice dated 04.06.2015 has clearly mentioned that the cheques were issued on 06.02.2010 and 19.10.2012 at the time of taking the loan amount, except the signature and other columns were blank and the same were issued as security. The complainant intentionally not mentioned the date of the alleged loan. There are variations in the writings found in Exs.P1 and P2 cheques. If really both the cheques were issued on the same day, there is no need to issue two separate cheques and one can be issued.

(b)The accused himself examined as DW1 and he has clearly stated that he has borrowed the amount on 06.02.2010 and 19.12.2012 and 5 C.C.251 of 2016 paid Rs.5,00,000/- in the year, 2010 itself and balance amount was paid on 19.03.2015. There was no cross-examination to DW1 on the material aspects. The complainant has admitted that he lend the amount on interest and accused has paid the interest upto November, 2014 and from the evidence of PW1 it is very clear that he has been doing money lending business. The complainant does not have any money lending license and hence the complaint has to be dismissed.

The accused has discharged the initial burden that the subject cheques were not issued towards payment of any legally enforceable debt and hence the burden shifted on to the complainant to prove that the cheques were issued towards the discharge of legally enforceable debt.

If really there is any loan transaction the complainant should have filed civil suit for recovery. It is prayed to acquit the accused.

8.Now the point for determination is that whether the complainant could bring home the guilt of the accused for the offence U/s.138 of

Negotiable Instrument Act?

9.POINT :-The facts of the case are stated supra. To prove the offence U/s.138 of Negotiable Instrument Act, the following aspects are to be established:-

1. That there is existing legally enforceable debt as on the date of issuance of the disputed cheque.

2. That the cheque was presented in the bank within six months from the date of which it was drawn or within the period of its validity. As per Section 35(A) of Banking Regulation Act, 1949 the validity of cheque is reduced to three months from six months w.e.f. 01.04.2012.

6 C.C.251 of 2016

3. Cheque was returned unpaid and the complainant herein gave notice in writing regarding the dishonour of cheque within 30 days from the date of receipt of the information by him.

4. That the accused failed to make payment within 15 days from the date of receipt of notice.

10.Before proceeding further it is beneficial to refer the provision of the Negotiable Instrument Act and Chapter 17 of Negotiable

Instrument Act make a civil transaction to be an offence by fiction of law and that certain rebutable presumptions that shall be drawn. The object and intention of these penal provisions are to prevent issuance of cheques in a playful manner or with dishonest intention or that no mind to honour or without sufficient funds in the account maintained by the drawer. The initial presumption lays in favour of the complainant. The rebutable presumption U/s.139 is a devise to prevent undue delay in the course of litigation.

11.The case of the complainant is that the accused is his friend and out of acquaintance he has advanced Rs.11,00,000/- to the accused and initially he has advanced Rs.6,00,00/- and later a sum of

Rs.5,00,000/- and the accused agreed to pay the same with interest @ 2.25% per month and the accused has paid interest upto November, 2014.

12.The version of the accused is that he has borrowed Rs.6,00,000/- on 06.02.2010 and repaid Rs.5,00,000/- in the year 2010 and on 19.12.2012 he has borrowed Rs.5,00,000/- and he was paying the interest and he has repaid Rs.6,00,000/- on 19.03.2015.

7 C.C.251 of 2016

13.PW1 has deposed that he lent the accused initially a sum of

Rs.6,00,000/- by means of account payee cheque and later a sum of

Rs.5,00,000/- by means of account payee cheque and the accused had been paying the interest as agreed and he has not repaid the principal amount. No where in the complaint or in the chief-examination of PW1, it is mentioned the date and month, when PW1 has advanced

Rs.6,00,000/- and Rs.5,00,000/- respectively. PW1 in his cross- examination has stated that he cannot say on which date, month and year he has advanced Rs.6,00,000/- and Rs.5,00,000/-. Amount of

Rs.11,00,000/- is not a meager amount. No ordinary prudent man advances amount of Rs.6,00,000/- without knowing the date.

14.Curiously PW1 in his chief-examination has specifically stated that he had advanced the said amount by means of account payee cheque. When the amount was advanced by way of account payee cheque, PW1 bank statement contains the date when the cheque was encashed. PW1 did not mention in the complaint and notice the date when he advanced the amount and he stated in the chief that he has paid the amount by way of account payee cheque, during cross- examination he stated that he cannot say the date, month and year.

Thus, PW1 is not giving correct version.

15.No ordinary prudent man advances huge amount without obtaining any document. In general the creditor would obtain promissory note or receipt from the debtor.

8 C.C.251 of 2016

16.DW1 i.e. the accused has deposed that he has borrowed

Rs.6,00,000/- from the complainant on 06.02.2010 and executed a promissory note in favour of the complainant and the complainant also has taken blank signed cheque vide No.985871. He has further deposed that he has repaid Rs.5,00,000/- to the complainant in the year, 2010 itself and later on 19.12.2012 he has borrowed

Rs.5,00,000/- and executed the promissory note. He has further deposed that on 19.12.2012 the complainant has obtained blank signed cheque without mentioning the particulars and he has repaid the amount on 19.03.2015.

17.The DW1 issued the reply notice for the notice issued by the complainant under Ex.P5. Ex.P7 is the reply notice dated 04.06.2015.

In Ex.P7 reply notice the accused has specifically stated that he has borrowed the amount on 06.02.2010 and by then the complainant obtained the promissory note and blank signed cheque. He has further mentioned in the reply notice that he has borrowed the amount of

Rs.5,00,000/- on 19.12.2012 and by then the complainant obtained promissory note and cheque. Though in the reply notice the accused has specifically mentioned the dates, the complainant has not mentioned the date of advancement of amount in the complaint.

18.The counsel for the complainant has submitted that the accused himself has admitted the receipt of the amount and hence the burden is on the accused to establish the discharge. No doubt, the accused has admitted the receipt of amount, but the complainant himself 9 C.C.251 of 2016 denied the date of advancement as put forth by the accused. So, the complainant has to establish on which date he has advanced the amount. The DW2 is the Bank Manager who has produced the bank statement of the complainant. Ex.X1 statement discloses that on 06.02.2010 Rs.6,00,000/- was debited to the account of the complainant. Ex.X1 further discloses that on 19.12.2012 Rs.5,00,000/- debited to the account of the complainant. Thus, the evidence of DW2 and Ex.X1 discloses that the amount paid by the complainant to the accused on 06.02.2010 Rs.6,00,000/- and 19.12.2012 Rs.5,00,000/- respectively. Exs.D1 and D2 statements produced by the accused also discloses that the accused received the amount by way of account payee cheques.

19.The specific version of the accused is that the complainant has obtained blank cheques at the time of obtaining the loan on 06.02.2010 and on 19.12.2012. Exs.D1 and D2 are the statements of account of the accused. Ex.D1 discloses that most of the serial numbers of the cheque series No.985871 (Ex.P1) in the said series i.e.

prior to and subsequent to 985871 were presented before the bank in the year 2009 and 2010. Ex.D2 is the statement of account of the accused. Ex.D2 also discloses that the most of the cheques in serial numbers 545831 were presented in the year, 2012. Thus, Exs.D1 and

D2 discloses that Exs.P1 and P2 cheque series were utilized in the year 2010 and 2012 respectively.

20.The DW2 also stated that Exs.P1 and P2 are MICR cheques and in 10 C.C.251 of 2016 the year, 2012 all the banks introduced CTS cheques. The evidence of

Dws 1 and 2 coupled with Exs.P1 and P2 probablises the version of the accused that he gave the cheques in the year, 2010 and 2012 respectively.

21.As seen from Ex.P1 the signature of the accused is appears to be affixed by using black ink pen and the remaining matter i.e. payee name, amount and date were mentioned by using blue ink pen. As seen from Ex.P2 the signature of the accused was affixed by using black ink pen and the name of the payee and date in Ex.P2 were mentioned by using the blue ink pen. PW1 has stated that the accused himself written the matter in Exs.P1 and P2 cheques. He has further stated that at the time accused issued the cheques his brother and

Suresh were present. If the accused himself has written the matter in

Exs.P1 and P2 cheques, there is no need to use two pens for filling the blanks. Further if the cheques Exs.P1 and P2 were issued by the accused as put forth by the complainant, there is no need to issue two separate cheques on one and the same day for Rs.11,00,000/-. All the above aspects probablises the version of the accused that he gave blank cheque at the time of borrowing of amount and improbablises the version of the complainant.

22.The specific case of the accused is that on 06.02.2010 he has borrowed Rs.6,00,000/- from the complainant. As per the complaint averments and evidence of PW1, Ex.P1 cheque was issued on 04.04.2015. So, by the date of issuance of Ex.P1 cheque by the 11 C.C.251 of 2016 accused the claim of the complainant is barred by time. That is the reason, the complainant has not mentioned the date of advancement of the loan as rightly submitted by the accused counsel.

23.In the citation reported in

2014 (2) ALD (Crl.) 794

in between

Gerard Kollian Vs. Weis Electronics & Industrial Services (P)

Ltd.

The Hon’ble High Court has held that “if the cheque was

issued after completion of three years limitation period and in

the absence of acknowledgment U/Secs.18 and 19 of the

Limitation Act it cannot be stated that the cheque was issued

for legally enforceable debt”.

24.In the citation reported in

2003 (2) ALD Crl. 707

in between

A.Yesubabu Vs. D.Appala Swamy and another

The Hon’ble High Court has held that “if the cheque was

issued for a time barred debt, it cannot be stated that the

cheque was issued for legally enforceable debt”.

In the light of the principle enunciated in the above two citations, this Court is of the considered opinion that if the version of the complainant is taken into consideration, Ex.P1 cheque was not issued for legally enforceable debt as the debt of Rs.6,00,000/- dated 06.02.2010 is barred by time by 04.04.2015.

12 C.C.251 of 2016

25.The further version of the complainant is that the complainant has advanced Rs.5,00,000/- on 19.12.2012 to the accused. Admittedly the accused has repaid the amount to the complainant. PW1 himself has admitted that he cannot say without verifying the account how much amount paid by the accused. Thus, the accused had been paying amount to the complainant after receipt of the loan. So, the complainant has to establish how much amount paid by the accused and how much amount he fell due. PW1 has not explained how much amount paid by the accused. When PW1 failed to explain how much amount paid by the accused, the version of the accused that he has repaid the amount is probable. Ex.D3 is the statement of account of the son of the accused. DW1 stated that he has withdrawn the amount on 19.03.2015 from the account of his son.

26.The specific version of the complainant is that the accused has issued Exs.P1 and P2 cheques on 04.04.2015. PW1 further stated that at the time accused issued the cheques his brother and Suresh were present. The complainant has not examined his brother and Suresh to show that the accused issued the cheques on 04.04.2015. The evidence of DW1 probablises the version of the accused that he has borrowed the amount in the year 2010 and 2012 respectively and issued Exs.P1 and P2 as blank to the complainant. When the cheques were issued in the year 2010 and 2012, the version of the complainant that cheques were issued on 04.04.2015 for discharge of legally enforceable debt is not believable. Furthermore, the complainant has not mentioned the date when he advanced the amount, though he 13 C.C.251 of 2016 stated that he advanced the amount by way of account payee cheque.

Once the accused put forth probable defence the burden again shifts on to the complainant to establish that Exs.P1 and P2 cheques were issued for legally enforceable debt.

27.The accused counsel has relied on the citation reported in

2006 (1) ALD (Crl.) 300 (AP)

in between

Laxminivas Agarwal Vs. Andhra Semi Conductors Pvt. Ltd.,

Hyderabad and others

In the above citation the Hon’ble High Court has found that “the

cheques were taken only as security for proper repayment and

the cheques were not issued by the accused towards the

discharge of any debt or other liability”.

In this case on hand also this court found that Exs.P1 and P2 cheques were issued on the date of advancement of the loan, but not for discharge of the loan amount on 04.04.2015 as put forth by the complainant. Furthermore, the complainant himself has stated that he cannot say how much amount received by him from the accused.

When PW1 has received the amount from the accused, it is the bounden duty of the complainant to establish how much amount received by him and how much amount fell due by the accused.

28.The accused counsel has relied on so many citation reported in

Crl. A.No.1003 of 2016

in between

K.Ashok Kumar Goud Vs. Sree Ramulu and another

14 C.C.251 of 2016

In the cited case, the complainant failed to establish that he has advanced the amount. The facts in the above case are not identical to the case on hand, hence not help to the accused.

29.The accused counsel has relied on the citation reported in

2008 (1) ALD Crl. 485 SC

in between

Krishna Janardhan Bhat Vs. Dattatraya G Gedge

In the cited case his lordships has held that there was no written document pertaining to the transaction and there were no witnesses.

The facts in the above case are not identical to the case on hand, hence not help to the accused.

30.The accused counsel has relied on the citation reported in

2004 Cri.L.J. 4019

in between

M/s Krishnam Raju Finances, Hyderabad Vs. Abida Sultana and

another

and contended that the complainant failed to file the license. In the cited case, the complainant was doing finance business.

In this case on hand, the accused has not established that the complainant has been doing the finance business in his ordinary course of business. Hence, the above citation is not helpful to the accused.

31.The accused counsel has relied on the citation reported in

2014 (2) SCJ 134

in between

Vijay Vs. Laxman

15 C.C.251 of 2016

In the cited case the Hon’ble Apex Court has held that “the

standard of proof required for rebutting presumption U/s.139

of Negotiable Instrument Act is not as high as that required for

prosecution”.

In this case on hand, the complainant has not mentioned the date when he advanced the amount. He has not produced any material with regard to his bank transaction. On the other hand, the accused has produced the statement of the account of PW1 i.e. Ex.X1.

The complainant has stated during the evidence that he has paid the amount by way of account payee cheque, but he did not mention the date and during the cross-examination he stated that he cannot say the date, month and year. Thus, the complainant has not mentioned the correct particulars with regard to the loan transaction. Furthermore, the version of the accused that he has executed the promissory note and also gave the blank signed cheques is appears to be probable.

32.In this case on hand, the accused has issued the reply notice under Ex.P7 dated 04.06.2015 i.e. prior to filing of the complaint. In

Ex.P7 reply notice the accused has taken specific plea regarding the transactions. Since the beginning the accused contends that he has executed the promissory note and issued the blank signed cheques on 06.02.2010 and 19.12.2012. The defence of the accused since the beginning is consistent. The complainant did not mention in the complaint about the mode of payment of the amount and date when he advanced the amount and during the chief-examination he stated that he has advanced the amount by way of account payee cheque 16 C.C.251 of 2016 and he pleaded ignorance about the date. PW1 admitted that he has received amounts and stated that he cannot say how much amount paid by accused to himself. Thus, all the above factors probablises the version of the accused that the complainant has obtained blank signed cheques on 06.02.2010 and 19.12.2012 and received the amount of the loan. Thus, the accused could rebut the presumption available in favour of the complainant and the burden again shifts on to the complainant to prove that Exs.P1 and P2 were issued for legally enforceable debt, but the complainant failed to establish the same.

This point is answered accordingly.

In the result, the accused is found not guilty for the offence

U/Sec.138 of Negotiable Instruments Act and accordingly acquitted

U/s.255(1) Cr.P.C. The bail bonds of the accused shall be in force for a period of six months.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open court on this the 16th day of October, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

17 C.C.251 of 2016

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR PROSECUTION : FOR DEFENCE:

PW1 : G.Ramesh DW1 : Pradeep Singh Bagga DW2 : Vinodini Reddy

DOCUMENTS MARKED

FOR PROSECUTION:

Ex.P1 : Cheque No.985871 for Rs.6,00,000/- dated 04.04.2015

Ex.P2 : Cheque No.545831 for Rs.5,00,000/- dated 04.04.2015

Ex.P3 : Cheque return memo dated 07.04.2015

Ex.P4 : Cheque return memo dated 07.04.2015

Ex.P5 : Office copy of legal notice dated 06.05.2015

Ex.P6 : Postal acknowledgement

Ex.P7 : Reply notice dated

DEFENCE :

Ex.D1 : Bank statement from 01.04.2009 to 31.03.2010 Ex.D2 : Bank statement from 01.09.2012 to 28.02.2013 Ex.D3 : Bank statement from 01.03.2013 to 30.08.2013 Ex.X1 : Copy of account for A/c.No.10043476123

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

IN THE COURT OF XVI ADDL.JUDGE-CUM-XX ADDL.CHIEF

METROPOLITAN MAGISTRATE AT SECUNDERABAD.

TUESDAY, THE 16 th DAY OF OCTOBER, 2018

Present : Sri P.V.S.Suryanarayana Murthy, XV Addl.Judge-cum-XIX ACMM, FAC XVI Addl.Judge-cum-XX ACMM, Secunderabad

C.C.NO.251 OF 2016

BETWEEN:

G.Ramesh S/o late G.Shankerappa, Occ: Business, R/o 57, Jerra, Secunderabad

... Complainant

AND

Pradeep Singh Bagga S/o Sujan Singh, Age: 55 years,Occ:Business,R/oH.No.72, ShantiniketanColony,MahendraHills, Secunderabad.

... Accused

This C.C has been coming for final disposal before me on 15.10.2018 in the presence of Sri J.Jeevan Babu, Counsel for the complainant and Sri V.S.Kirshnudu, Counsel for the accused and having stood over for consideration till this day, this court delivered the following:

J U D G M E N T

1.This is a private complaint filed by the complainant against the accused for the offence punishable U/s.138 of the Negotiable

Instruments Act.

2.The brief averments of the complaint are as follows:-

The accused is the friend of the complainant and having good acquaintance with each other and out of the said acquaintance the accused had approached the complainant and requested to advance a sum of Rs.11,00,000/-. The complainant has lent Rs.6,00,000/- initially and later also lent Rs.5,00,000/-. The accused agreed to pay the amount with interest at 2.25% per month. The accused was paying the 2 C.C.251 of 2016 interest as agreed and has not repaid the loan amount and dodged the matter. The accused has paid the interest until the end of November, 2014 and since December, 2014 accused stopped payment of monthly interest. Later on the request of the complainant the accused has issued two account payee cheques of Wayside Bar and Restaurant

dated 04.04.2015 drawn on SBI, Secunderabad branch. The

complainant presented the said two cheques on 04.04.2015 in his bank

A.P.Mahesh Co-operative Urban Bank Ltd., Secunderabad and the same were returned as “Funds Insufficient” on 07.04.2015. Later the complainant got issued a notice on 06.05.2015 and the accused has received the notice on 12.05.2015 and sent a reply on 04.06.2015.

Hence, this complaint.

3.This case was taken on file against the accused for the offence punishable U/s.138 of the Negotiable Instruments Act by the XI-

AdditionalChief Metropolitan Magistrate, Secunderabad. Later as per

the orders of the Honourable Metropolitan Sessions Judge, Hyderabad this case is transferred to this Court andrenumbered as

C.C.No.251/2016.

4.After appearance of the accused copies of the documents furnished to him as contemplated U/s.207 Cr.P.C. Later he was examined U/sec.251 Cr.P.C. by explaining the substance of accusation for the offence U/s.138 of Negotiable Instrument Act, for which he pleaded not guilty and claimed to be tried.

3 C.C.251 of 2016

5.During trial, the complainant himself got examined as PW1 and got marked Exs.P1 to P7.

6.After closure of the complainant's evidence, accused was examined U/s. 313 Cr.P.C. by explaining the incriminating material found against him, for which he denied and reported to have defence evidence. The accused himself got examined as DW1 and one Vinodini

Reddy as DW2 and got marked Exs.D1 to D3 and Ex.X1.

7.Heard the arguments. The accused counsel also filed written arguments.

The complainant counsel has submitted that the accused has received Rs.11,00,000/- from the complainant in two installments as hand loan and paid interest upto November, 2014 and committed default in payment of interest since December, 2014. According to him the evidence of PW1 coupled with Exs.P1 to P5 proves the version of the complainant. It is further submitted that the accused is not disputing his signatures found on Exs.P1 and P2 cheques and on the other hand he has admitted the receipt of Rs.11,00,000/-. According to him, the evidence of PW1 also supports the case of the complainant that the complainant advanced Rs.11,00,000/- to the accused and the accused issued the subject cheques for discharge of the said amount.

He prays to convict the accused.

(a)The brief contentions in the written arguments of the accused are as follows:- 4 C.C.251 of 2016

The cheque No.985871 was issued by the accused on 06.02.2010 to the complainant. All the other cheques in the said series i.e. prior to and subsequent to cheque Nos.985871 were used from 15.09.2009 to 13.03.2010 which is evident from the statement of account dated 06.08.2010 (Ex.D1). The cheque No.545831 was issued by the accused on 19.12.2012 to the complainant. All the other cheques in the said series i.e. prior to and subsequent to cheque No.545831 were used from 05.10.2012 to 27.07.2013 (Ex.D2). The accused has not issued the two cheques on 04.04.2015 as alleged by the complainant. The date of notice is 06.05.2015 and the complainant got knowledge about the dishonour of cheque on 07.04.2015 and the notice was served on the accused on 12.05.2015 and the notice was not served within 30 days from the date of knowledge of dishonour. The complainant has not stated when the said loan amounts were lent by him and he failed to examine Sri Suresh and brother of the complainant who were said to be present at the time of issue of the cheques. The accused in the reply notice dated 04.06.2015 has clearly mentioned that the cheques were issued on 06.02.2010 and 19.10.2012 at the time of taking the loan amount, except the signature and other columns were blank and the same were issued as security. The complainant intentionally not mentioned the date of the alleged loan. There are variations in the writings found in Exs.P1 and P2 cheques. If really both the cheques were issued on the same day, there is no need to issue two separate cheques and one can be issued.

(b)The accused himself examined as DW1 and he has clearly stated that he has borrowed the amount on 06.02.2010 and 19.12.2012 and 5 C.C.251 of 2016 paid Rs.5,00,000/- in the year, 2010 itself and balance amount was paid on 19.03.2015. There was no cross-examination to DW1 on the material aspects. The complainant has admitted that he lend the amount on interest and accused has paid the interest upto November, 2014 and from the evidence of PW1 it is very clear that he has been doing money lending business. The complainant does not have any money lending license and hence the complaint has to be dismissed.

The accused has discharged the initial burden that the subject cheques were not issued towards payment of any legally enforceable debt and hence the burden shifted on to the complainant to prove that the cheques were issued towards the discharge of legally enforceable debt.

If really there is any loan transaction the complainant should have filed civil suit for recovery. It is prayed to acquit the accused.

8.Now the point for determination is that whether the complainant could bring home the guilt of the accused for the offence U/s.138 of

Negotiable Instrument Act?

9.POINT :-The facts of the case are stated supra. To prove the offence U/s.138 of Negotiable Instrument Act, the following aspects are to be established:-

1. That there is existing legally enforceable debt as on the date of issuance of the disputed cheque.

2. That the cheque was presented in the bank within six months from the date of which it was drawn or within the period of its validity. As per Section 35(A) of Banking Regulation Act, 1949 the validity of cheque is reduced to three months from six months w.e.f. 01.04.2012.

6 C.C.251 of 2016

3. Cheque was returned unpaid and the complainant herein gave notice in writing regarding the dishonour of cheque within 30 days from the date of receipt of the information by him.

4. That the accused failed to make payment within 15 days from the date of receipt of notice.

10.Before proceeding further it is beneficial to refer the provision of the Negotiable Instrument Act and Chapter 17 of Negotiable

Instrument Act make a civil transaction to be an offence by fiction of law and that certain rebutable presumptions that shall be drawn. The object and intention of these penal provisions are to prevent issuance of cheques in a playful manner or with dishonest intention or that no mind to honour or without sufficient funds in the account maintained by the drawer. The initial presumption lays in favour of the complainant. The rebutable presumption U/s.139 is a devise to prevent undue delay in the course of litigation.

11.The case of the complainant is that the accused is his friend and out of acquaintance he has advanced Rs.11,00,000/- to the accused and initially he has advanced Rs.6,00,00/- and later a sum of

Rs.5,00,000/- and the accused agreed to pay the same with interest @ 2.25% per month and the accused has paid interest upto November, 2014.

12.The version of the accused is that he has borrowed Rs.6,00,000/- on 06.02.2010 and repaid Rs.5,00,000/- in the year 2010 and on 19.12.2012 he has borrowed Rs.5,00,000/- and he was paying the interest and he has repaid Rs.6,00,000/- on 19.03.2015.

7 C.C.251 of 2016

13.PW1 has deposed that he lent the accused initially a sum of

Rs.6,00,000/- by means of account payee cheque and later a sum of

Rs.5,00,000/- by means of account payee cheque and the accused had been paying the interest as agreed and he has not repaid the principal amount. No where in the complaint or in the chief-examination of PW1, it is mentioned the date and month, when PW1 has advanced

Rs.6,00,000/- and Rs.5,00,000/- respectively. PW1 in his cross- examination has stated that he cannot say on which date, month and year he has advanced Rs.6,00,000/- and Rs.5,00,000/-. Amount of

Rs.11,00,000/- is not a meager amount. No ordinary prudent man advances amount of Rs.6,00,000/- without knowing the date.

14.Curiously PW1 in his chief-examination has specifically stated that he had advanced the said amount by means of account payee cheque. When the amount was advanced by way of account payee cheque, PW1 bank statement contains the date when the cheque was encashed. PW1 did not mention in the complaint and notice the date when he advanced the amount and he stated in the chief that he has paid the amount by way of account payee cheque, during cross- examination he stated that he cannot say the date, month and year.

Thus, PW1 is not giving correct version.

15.No ordinary prudent man advances huge amount without obtaining any document. In general the creditor would obtain promissory note or receipt from the debtor.

8 C.C.251 of 2016

16.DW1 i.e. the accused has deposed that he has borrowed

Rs.6,00,000/- from the complainant on 06.02.2010 and executed a promissory note in favour of the complainant and the complainant also has taken blank signed cheque vide No.985871. He has further deposed that he has repaid Rs.5,00,000/- to the complainant in the year, 2010 itself and later on 19.12.2012 he has borrowed

Rs.5,00,000/- and executed the promissory note. He has further deposed that on 19.12.2012 the complainant has obtained blank signed cheque without mentioning the particulars and he has repaid the amount on 19.03.2015.

17.The DW1 issued the reply notice for the notice issued by the complainant under Ex.P5. Ex.P7 is the reply notice dated 04.06.2015.

In Ex.P7 reply notice the accused has specifically stated that he has borrowed the amount on 06.02.2010 and by then the complainant obtained the promissory note and blank signed cheque. He has further mentioned in the reply notice that he has borrowed the amount of

Rs.5,00,000/- on 19.12.2012 and by then the complainant obtained promissory note and cheque. Though in the reply notice the accused has specifically mentioned the dates, the complainant has not mentioned the date of advancement of amount in the complaint.

18.The counsel for the complainant has submitted that the accused himself has admitted the receipt of the amount and hence the burden is on the accused to establish the discharge. No doubt, the accused has admitted the receipt of amount, but the complainant himself 9 C.C.251 of 2016 denied the date of advancement as put forth by the accused. So, the complainant has to establish on which date he has advanced the amount. The DW2 is the Bank Manager who has produced the bank statement of the complainant. Ex.X1 statement discloses that on 06.02.2010 Rs.6,00,000/- was debited to the account of the complainant. Ex.X1 further discloses that on 19.12.2012 Rs.5,00,000/- debited to the account of the complainant. Thus, the evidence of DW2 and Ex.X1 discloses that the amount paid by the complainant to the accused on 06.02.2010 Rs.6,00,000/- and 19.12.2012 Rs.5,00,000/- respectively. Exs.D1 and D2 statements produced by the accused also discloses that the accused received the amount by way of account payee cheques.

19.The specific version of the accused is that the complainant has obtained blank cheques at the time of obtaining the loan on 06.02.2010 and on 19.12.2012. Exs.D1 and D2 are the statements of account of the accused. Ex.D1 discloses that most of the serial numbers of the cheque series No.985871 (Ex.P1) in the said series i.e.

prior to and subsequent to 985871 were presented before the bank in the year 2009 and 2010. Ex.D2 is the statement of account of the accused. Ex.D2 also discloses that the most of the cheques in serial numbers 545831 were presented in the year, 2012. Thus, Exs.D1 and

D2 discloses that Exs.P1 and P2 cheque series were utilized in the year 2010 and 2012 respectively.

20.The DW2 also stated that Exs.P1 and P2 are MICR cheques and in 10 C.C.251 of 2016 the year, 2012 all the banks introduced CTS cheques. The evidence of

Dws 1 and 2 coupled with Exs.P1 and P2 probablises the version of the accused that he gave the cheques in the year, 2010 and 2012 respectively.

21.As seen from Ex.P1 the signature of the accused is appears to be affixed by using black ink pen and the remaining matter i.e. payee name, amount and date were mentioned by using blue ink pen. As seen from Ex.P2 the signature of the accused was affixed by using black ink pen and the name of the payee and date in Ex.P2 were mentioned by using the blue ink pen. PW1 has stated that the accused himself written the matter in Exs.P1 and P2 cheques. He has further stated that at the time accused issued the cheques his brother and

Suresh were present. If the accused himself has written the matter in

Exs.P1 and P2 cheques, there is no need to use two pens for filling the blanks. Further if the cheques Exs.P1 and P2 were issued by the accused as put forth by the complainant, there is no need to issue two separate cheques on one and the same day for Rs.11,00,000/-. All the above aspects probablises the version of the accused that he gave blank cheque at the time of borrowing of amount and improbablises the version of the complainant.

22.The specific case of the accused is that on 06.02.2010 he has borrowed Rs.6,00,000/- from the complainant. As per the complaint averments and evidence of PW1, Ex.P1 cheque was issued on 04.04.2015. So, by the date of issuance of Ex.P1 cheque by the 11 C.C.251 of 2016 accused the claim of the complainant is barred by time. That is the reason, the complainant has not mentioned the date of advancement of the loan as rightly submitted by the accused counsel.

23.In the citation reported in

2014 (2) ALD (Crl.) 794

in between

Gerard Kollian Vs. Weis Electronics & Industrial Services (P)

Ltd.

The Hon’ble High Court has held that “if the cheque was

issued after completion of three years limitation period and in

the absence of acknowledgment U/Secs.18 and 19 of the

Limitation Act it cannot be stated that the cheque was issued

for legally enforceable debt”.

24.In the citation reported in

2003 (2) ALD Crl. 707

in between

A.Yesubabu Vs. D.Appala Swamy and another

The Hon’ble High Court has held that “if the cheque was

issued for a time barred debt, it cannot be stated that the

cheque was issued for legally enforceable debt”.

In the light of the principle enunciated in the above two citations, this Court is of the considered opinion that if the version of the complainant is taken into consideration, Ex.P1 cheque was not issued for legally enforceable debt as the debt of Rs.6,00,000/- dated 06.02.2010 is barred by time by 04.04.2015.

12 C.C.251 of 2016

25.The further version of the complainant is that the complainant has advanced Rs.5,00,000/- on 19.12.2012 to the accused. Admittedly the accused has repaid the amount to the complainant. PW1 himself has admitted that he cannot say without verifying the account how much amount paid by the accused. Thus, the accused had been paying amount to the complainant after receipt of the loan. So, the complainant has to establish how much amount paid by the accused and how much amount he fell due. PW1 has not explained how much amount paid by the accused. When PW1 failed to explain how much amount paid by the accused, the version of the accused that he has repaid the amount is probable. Ex.D3 is the statement of account of the son of the accused. DW1 stated that he has withdrawn the amount on 19.03.2015 from the account of his son.

26.The specific version of the complainant is that the accused has issued Exs.P1 and P2 cheques on 04.04.2015. PW1 further stated that at the time accused issued the cheques his brother and Suresh were present. The complainant has not examined his brother and Suresh to show that the accused issued the cheques on 04.04.2015. The evidence of DW1 probablises the version of the accused that he has borrowed the amount in the year 2010 and 2012 respectively and issued Exs.P1 and P2 as blank to the complainant. When the cheques were issued in the year 2010 and 2012, the version of the complainant that cheques were issued on 04.04.2015 for discharge of legally enforceable debt is not believable. Furthermore, the complainant has not mentioned the date when he advanced the amount, though he 13 C.C.251 of 2016 stated that he advanced the amount by way of account payee cheque.

Once the accused put forth probable defence the burden again shifts on to the complainant to establish that Exs.P1 and P2 cheques were issued for legally enforceable debt.

27.The accused counsel has relied on the citation reported in

2006 (1) ALD (Crl.) 300 (AP)

in between

Laxminivas Agarwal Vs. Andhra Semi Conductors Pvt. Ltd.,

Hyderabad and others

In the above citation the Hon’ble High Court has found that “the

cheques were taken only as security for proper repayment and

the cheques were not issued by the accused towards the

discharge of any debt or other liability”.

In this case on hand also this court found that Exs.P1 and P2 cheques were issued on the date of advancement of the loan, but not for discharge of the loan amount on 04.04.2015 as put forth by the complainant. Furthermore, the complainant himself has stated that he cannot say how much amount received by him from the accused.

When PW1 has received the amount from the accused, it is the bounden duty of the complainant to establish how much amount received by him and how much amount fell due by the accused.

28.The accused counsel has relied on so many citation reported in

Crl. A.No.1003 of 2016

in between

K.Ashok Kumar Goud Vs. Sree Ramulu and another

14 C.C.251 of 2016

In the cited case, the complainant failed to establish that he has advanced the amount. The facts in the above case are not identical to the case on hand, hence not help to the accused.

29.The accused counsel has relied on the citation reported in

2008 (1) ALD Crl. 485 SC

in between

Krishna Janardhan Bhat Vs. Dattatraya G Gedge

In the cited case his lordships has held that there was no written document pertaining to the transaction and there were no witnesses.

The facts in the above case are not identical to the case on hand, hence not help to the accused.

30.The accused counsel has relied on the citation reported in

2004 Cri.L.J. 4019

in between

M/s Krishnam Raju Finances, Hyderabad Vs. Abida Sultana and

another

and contended that the complainant failed to file the license. In the cited case, the complainant was doing finance business.

In this case on hand, the accused has not established that the complainant has been doing the finance business in his ordinary course of business. Hence, the above citation is not helpful to the accused.

31.The accused counsel has relied on the citation reported in

2014 (2) SCJ 134

in between

Vijay Vs. Laxman

15 C.C.251 of 2016

In the cited case the Hon’ble Apex Court has held that “the

standard of proof required for rebutting presumption U/s.139

of Negotiable Instrument Act is not as high as that required for

prosecution”.

In this case on hand, the complainant has not mentioned the date when he advanced the amount. He has not produced any material with regard to his bank transaction. On the other hand, the accused has produced the statement of the account of PW1 i.e. Ex.X1.

The complainant has stated during the evidence that he has paid the amount by way of account payee cheque, but he did not mention the date and during the cross-examination he stated that he cannot say the date, month and year. Thus, the complainant has not mentioned the correct particulars with regard to the loan transaction. Furthermore, the version of the accused that he has executed the promissory note and also gave the blank signed cheques is appears to be probable.

32.In this case on hand, the accused has issued the reply notice under Ex.P7 dated 04.06.2015 i.e. prior to filing of the complaint. In

Ex.P7 reply notice the accused has taken specific plea regarding the transactions. Since the beginning the accused contends that he has executed the promissory note and issued the blank signed cheques on 06.02.2010 and 19.12.2012. The defence of the accused since the beginning is consistent. The complainant did not mention in the complaint about the mode of payment of the amount and date when he advanced the amount and during the chief-examination he stated that he has advanced the amount by way of account payee cheque 16 C.C.251 of 2016 and he pleaded ignorance about the date. PW1 admitted that he has received amounts and stated that he cannot say how much amount paid by accused to himself. Thus, all the above factors probablises the version of the accused that the complainant has obtained blank signed cheques on 06.02.2010 and 19.12.2012 and received the amount of the loan. Thus, the accused could rebut the presumption available in favour of the complainant and the burden again shifts on to the complainant to prove that Exs.P1 and P2 were issued for legally enforceable debt, but the complainant failed to establish the same.

This point is answered accordingly.

In the result, the accused is found not guilty for the offence

U/Sec.138 of Negotiable Instruments Act and accordingly acquitted

U/s.255(1) Cr.P.C. The bail bonds of the accused shall be in force for a period of six months.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open court on this the 16th day of October, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

17 C.C.251 of 2016

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR PROSECUTION : FOR DEFENCE:

PW1 : G.Ramesh DW1 : Pradeep Singh Bagga DW2 : Vinodini Reddy

DOCUMENTS MARKED

FOR PROSECUTION:

Ex.P1 : Cheque No.985871 for Rs.6,00,000/- dated 04.04.2015

Ex.P2 : Cheque No.545831 for Rs.5,00,000/- dated 04.04.2015

Ex.P3 : Cheque return memo dated 07.04.2015

Ex.P4 : Cheque return memo dated 07.04.2015

Ex.P5 : Office copy of legal notice dated 06.05.2015

Ex.P6 : Postal acknowledgement

Ex.P7 : Reply notice dated

DEFENCE :

Ex.D1 : Bank statement from 01.04.2009 to 31.03.2010 Ex.D2 : Bank statement from 01.09.2012 to 28.02.2013 Ex.D3 : Bank statement from 01.03.2013 to 30.08.2013 Ex.X1 : Copy of account for A/c.No.10043476123

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

IN THE COURT OF XVI ADDL.JUDGE-CUM-XX ADDL.CHIEF

METROPOLITAN MAGISTRATE AT SECUNDERABAD.

TUESDAY, THE 27 th DAY OF NOVEMBER, 2018

Present : Sri P.V.S.Suryanarayana Murthy, XV Addl.Judge-cum-XIX ACMM, FAC XVI Addl.Judge-cum-XX ACMM, Secunderabad

C.C.NO.363 OF 2016

BETWEEN:

Shakuntala Rathod W/o Ram Rathod, Age: 60 years, Occ: Business, R/o Flat No.502, Sri Durga Rajeev Residency,VijaypuriColony,Tarnaka, Secunderabad.

... Complainant

AND

R.Satish Babu S/o late R.Raja Lingam, Age: 39 years, Occ: Business, R/o Flat No.B-503, Om Sai Emerald Apartment, Vijaypuri Colony, Tarnaka, Secunderabad.

... Accused

This C.C has been coming for final disposal before me on 22.11.2018 in the presence of Sri Shreekanth Bangray, Counsel for the complainant and Sri K.Raghava Reddy, Counsel for the accused and having stood over for consideration till this day, this court delivered the following:

J U D G M E N T

1.This is a private complaint filed by the complainant against the accused for the offence punishable U/s.138 of the Negotiable

Instruments Act.

2.The brief averments of the complaint is as follows:-

The complainant and accused are known to each other since long time as both were used to reside in the same apartment. The husband of the complainant retired from South Central Railway in the month of February, 2013 and got retirement benefits. The complainant has requested the accused to show some good company or business to 2 C.C.363 of 2016 invest money. The accused was running Salon and Spa in various areas. Accused had induced the complainant by telling flimsy stories about good returns by investing and became a partner in accused saloon. Further the accused shown Franchise agreement dated 01.03.2013 by name M/s Jaweed Habib Hair and Beauty Ltd. The complainant further submitted that complainant believed sweet words of the accused and agreed to invest Rs.15,00,000/- and became partner in accused Salon by name “Golden Studio Salon and Spa”, situated at P.G.Road with condition to transfer the lease hold rights as well as Franchise rights of M/s Jaweed Habib Hair and Beauty Ltd. in the name of the complainant within one month. The complainant had paid the amount by way of RTGS through SBI, Lalaguda branch on 21.04.2014 by No.SBINH1411132369 for an amount of Rs.5,00,000/- and on 06.05.2014 through cheque bearing No.626458 for an amount of Rs.10,00,000/- in the account of “Golden Studio Salon and Spa”.

The complainant went to see the “Golden Studio Salon and Spa” situated at P.G.Road. After due enquiry the complainant came to know that the firm is a partnership firm and there are some other partners.

The complainant along with other partner Neha Batak took the possession of the salon and invested amount on renovation. After receipt of the amount and removal of other partners the accused had not shown any interest to transfer lease hold rights or Franchise rights.

As complainant refused to pay more amount as demanded by the accused, accused has started harassing the complainant. On the intervention of the elders accused has agreed to settle the issue for which on 28.11.2014 accused came to complainant business place, 3 C.C.363 of 2016 agreed to pay Rs.15,00,000/- invested by the complainant, but refused to pay other expenditure. On the same day accused has issued a cheque bearing No.000052 drawn on HDFC bank, Nacharam Branch

dated 24.12.2014 for Rs.15,00,000/-. The complainant has presented

the said cheque in her bank and the cheque was dishonoured with an endorsement “payment stopped by drawer”. The complainant issued notice on 07.01.2015 and the accused received the same on 12.01.2015. Hence, this complaint.

3.This case was taken on file against the accused for the offence punishable U/s.138 of the Negotiable Instruments Act by III – Special

Magistrate, Hasthinapuram.

4.After appearance of the accused copies of the documents furnished to him as contemplated U/s.207 Cr.P.C. Later the accused was examined U/sec.251 Cr.P.C. by explaining the substance of accusation for the offence punishable U/s. 138 of the Negotiable

Instruments Act, for which the accused denied, pleaded not guilty and claimed to tried.

5.During trial, the complainant herself got examined as PW1 and got marked Exs.P1 to P7. V.Venkateshwar Rao and G.Ravi Kanth were examined as Pws 2 and 3 and Exs.X1 to X3 are marked. Later complaint was returned and complaint presented before X-Addl. Chief

Metropolitan Magistrate, Secunderabad. Later, as per the orders of the

Hon’ble Metropolitan Sessions Judge, Hyderabad this case is

transferred to this Court andrenumbered as C.C.No.363/2016.

4 C.C.363 of 2016

6.After closure of the complainant's evidence, accused was examined U/s.313 Cr.P.C. by explaining the incriminating material found against him for which he denied and reported to have defence evidence. One P.Anitha and A.Sai Mallesh Reddy were examined as

Dws 1 and 2.

7.Heard the arguments. The complainant counsel also filed the written arguments. The brief averments in the written arguments is as follows:-

The complainant herself got examined as PW1 and the branch managers as Pws 2 and 3. Exs.P1 to P7 are marked through PW1 and

Exs.X1 to X3 are marked through PW2. The accused has set up the defanse that the complainant has taken hand loan of Rs.20,00,000/- to purchase the house. The accused has not filed any documentary proof to support his contention nor examined himself before the Court. The accused further contends that the cheque was stolen by Rakesh

Rathod. As per the version of the accused the galata took place on 30.10.2014 and he found missing of cheque on 03.11.2014 which cannot be believed. The accused has mentioned that he has lost the cheque book bearing cheque numbers from 000012, 23, 39, 40, 49, 52 to 72. The accused failed to establish that the cheque i.e. Ex.P1 was stolen by the complainant or any person. The accused has not denied the signature on Ex.P1 and if really the accused kept his cheque book in his Salon what made him to keep all his cheques signed for which there is no explanation. The accused filed suit for recovery of cheque which is pending before the XIX – Senior Civil Judge, Secunderabad vide O.S. No.139/2015. The another suit filed by the accused for 5 C.C.363 of 2016 injunction before the 1st- Junior Civil Judge is dismissed for default. After receipt of legal notice the accused filed suit for injunction. The drawer of the cheque should have drawn the cheque on an account maintained by him with the banker. The general rule of Criminal Law has no application for cases filing U/s.138 of Negotiable Instrument Act in view of statutory safe guard provided U/s.139 of the Act. The accused has to rebut the presumption. It is prayed to convict the accused.

(a)Per contra, the learned counsel for the accused has submitted that accused has not received any amount from the complainant nor issued the cheque for discharge of legally enforceable debt.

According to him “Golden Studio Salon and Spa” is not made as a party which is a partnership firm and hence the case of the complainant is not maintainable. He has further submitted that the PW1 in the written arguments stated that the complainant is doing the business and in possession of the “Golden Studio Salon and Spa” which is contrary to the complaint averments. According to him, there is no rejoinder for reply notice issued by the accused and no independent witness are examined. It is further contended that firm is a necessary party and in the absence of the partnership firm the complaint is not maintainable.

It is prayed to dismiss the complaint.

8.Now the point for determination is that whether the complainant could bring home the guilt of the accused for the offence U/s.138 of

Negotiable Instrument Act?

6 C.C.363 of 2016

9.POINT :-The facts of the case are stated supra. To prove the offence U/s.138 of Negotiable Instrument Act, the following aspects are to be established:-

1. That there is existing legally enforceable debt as on the date of issuance of the disputed cheque.

2. That the cheque was presented in the bank within six months from the date of which it was drawn or within the period of its validity. As per Section 35(A) of Banking Regulation Act, 1949 the validity of cheque is reduced to three months from six months w.e.f. 01.04.2012.

3. Cheque was returned unpaid and the complainant herein gave notice in writing regarding the dishonour of cheques within 30 days from the date of receipt of the information by him.

4. That the accused failed to make payment within 15 days from the date of receipt of notice.

10.Before proceeding further it is beneficial to refer the provisions of negotiable instruments act and chapter 17 of negotiable instrument act make a civil transaction to be an offence by fiction of law and that certain rebutable presumptions that shall be drawn. The object and intention of these penal provisions are to prevent the issuance of cheques in a playful manner or with a dishonest intention or that no mind to honor or without sufficient funds in the accounts maintained by the drawer. The initial presumption lays in favour of the complainant.

The rebuttable presumption under section 139 of negotiable instrument act is a device to prevent undue delay in the course of litigation.

11.The specific version of the complainant is that the complainant and accused are known to each other since long time as they resided in one apartment. The further version of the complainant is that the complainant has got the retirement benefits of her husband and 7 C.C.363 of 2016 requested the accused to show some good company and on the flimsy stories of the accused, she has invested the amount in Golden Studio

Salon and Spa. The further version of the complainant is that the complainant had paid Rs.5,00,000/- on 21.04.2014 through RTGS and

Rs.10,00,000/- on 06.05.2014 through cheque in the account of

Golden Studio Salon and Spa. The further version of the complainant is that the accused failed to transfer the lease hold rights and on the advise of elders he agreed to repay Rs.15,00,000/- and issued the subject cheque. The defense of the accused is that the complainant son was working as a manager and her son committed theft of the cheques and foisted the case.

12.PW1 who is the complainant reiterated the complaint averments in her chief-examination. She has denied the suggestion that herself,

Neha Batak and Rakesh Rathod on 30.10.2014 went to Saloon of the accused at Tarnaka and ransacked the premises. She has denied the suggestion that Rakesh Rathod by force stolen the cheque and she has misused the same. She has admitted that Golden Studio is not a party to the case and Ex.P1 related Golden Studio Saloon.

13.PW2 is Bank Manager of State Bank of India, Lalaguda branch testified that on 21.04.2014 Rs.5,00,000/- was transferred from the account of PW1 to Golden Studio Salon and Spa. PW3 is the Deputy

Manager has testified that on 06.05.2014 an amount of Rs.10,00,000/- debited to the account of the complainant and credited to HDFC Bank,

Nacharam Branch.

8 C.C.363 of 2016

14.Ex.P6 is the bank statement of the complainant. The specific version of the complainant is that she has transferred Rs.5,00,000/- on one day and issued cheque for Rs.10,00,000/- to the Golden Studio

Salon and Spa. The evidence of Pws 2 and 3 who are the branch managers supports the version of the complainant that Rs.5,00,000/- transferred on 21.04.2014 and Rs.10,00,000/- cheque was encashed on 06.05.2014. The accused is not disputing regarding the transfer of amount through RTGS. It was suggested to PW1 that she has borrowed the amount when she purchased the house and the said Rs.15,00,000/- towards discharge of the said amount. The accused has failed to substantiate his version that the complainant has borrowed

Rs.20,00,000/- from him. The date when she had borrowed is not mentioned.

15.Exs.X1 to X3 are the copy of application, copy of cheque and the statement of account copy. The evidence of Pws 2 and 3 coupled with

Exs.X1 to X3 supports the version of the complainant that she has transferred the amount of Rs.5,00,000/- to the account of Golden

Studio Salon and Spa and gave Rs.10,00,000/- by way of cheque.

16.The specific version of the accused is that the son of the complainant along with others visited his Saloon and stolen the cheques and foisted the present case. DW1 is the Manager in M/s

Jaweed Habib Hair and Beauty Ltd., Tarnaka branch of the accused. Her evidence is to the effect that on 31.10.2014 Rakesh Rathod along with others visited the shop and ransacked the shop. She has further testified that on 25.11.2014 the complainant and another created 9 C.C.363 of 2016 nuisance. DW2 is the senior Hair Stylist in the shop of the accused.

The evidence of Dws 1 and 2 is not of much use as they are the employees under the accused. Furthermore, the specific version of the accused is that he has advanced Rs.20,00,000/- to the complainant for which there is no material. Dws 1 and 2 have not spoken anything with regard to the said Rs.20,00,000/-. Hence, the evidence of Dws 1 and 2 is not of much use.

17.The complainant counsel has relied on the citation reported in

2010 (1) ALD (Crl.) (NOC) 10 (Kan)

in between

Amolak Textiles Vs. Uphar Fashions

In the cited case his lordships has held that “if the signature and writing in the cheque is admitted by the accused, the burden is on the accused to prove that the complainant got the cheque by unlawful means”.

In this case on hand, the accused is not disputing his signature on Ex.P1 cheque. No ordinary prudent man keep the signed blank cheques in the office. The accused failed to establish that he has kept the blank signed cheques in the office.

18.The complainant counsel has relied on the citation reported in

2012 (2) ALD (Crl.) 298 (AP)

in between

Liala Finance Ltd., Hyderabad Vs. S.A. Engineering Services,

Vijayawada and others

10 C.C.363 of 2016

In the cited case his lordships has held that the presumption

U/s.139 is a rebuttable presumption and the burden is on the accused to prove that the cheque has not been issued in discharge of debt or liability.

19.The complainant counsel has relied on the citation reported in

2015 (4) Crimes 163 (SC)

in between

T.Vasanthkumar Vs. Vijayakumari

In the cited case, the Hon’ble Apex Court has held that “once

the drawer of the cheque has admitted the signature on the

cheque and issuance of the cheque, the presumption U/s.139

of Negotiable Instrument Act is in favour of the complainant

and the burden is on the accused to rebut the said

presumption”.

20.The complainant counsel has relied on the citation reported in

2016 (1) ALD (Crl.)81

in between

Omprakash Vs. L.Sunitha and another

In the cited case his lordships has held that once the holder of the cheque establishes that the cheque was received legally from the drawer, the presumption U/s.139 falls to the effect that there existed a legally enforceable debt. The reverse burden will be on the accused.

In this case on hand, the accused failed to establish that the son of the complainant forcibly taken away the cheque and he has advanced Rs.20,00,000/- to the complainant. Thus, the accused failed to rebut the presumption available in favour of the complainant.

11 C.C.363 of 2016

21.The PW1 has stated that she has transferred Rs.5,00,000/- by way of RTGS and Rs.10,00,000/- by way of cheque. The evidence of

PW1 is supported by the evidence of Pws 2 and 3. Nothing could be elicited to discredit the testimony of Pws 2 and 3. Thus, the evidence of

Pws 1 to 3 coupled with Exs.P6, X1 to X3 proves that the complainant had advanced Rs.15,00,000/-.

22.The counsel for the accused has submitted that Ex.P1 cheque was drawn by the Golden Studio Salon and Spa and the said Golden

Studio Salon and Spa is not made as a party and hence this complaint is not maintainable. As seen from Ex.P1 it is mentioned that for Golden

Studio Salon and Spa authorised signatory. The accused during 313

Cr.P.C. examination has stated that hand loan amount received by him.

The version of the accused during 313 Cr.P.C. examination also reveals that they have received amount. The accused has not filed any record pertaining to partnership firm. The accused has not produced any material to show that the son of the complainant stolen the cheques.

23.The counsel for the accused has relied on the citation reported in

Criminal Appeal No.1001 of 2010

in between

Jitendra Vora Vs. Bhavana Y.Shah and another

and contends that the Golden Studio Salon and Spa is not impleaded as a party, hence the complaint is not maintainable.

In the cited case the appellant supplied the goods to M/s.Shah

Agencies and the cheque was issued by the respondent No.2 on an 12 C.C.363 of 2016 account maintained by Shah Enterprises. The facts are not identical to the case on hand and hence not helpful to the accused.

24.The accused counsel has relied on the citation reported in

Criminal Appeal No.1534 of 2017

in between

N.Harihara Krishnan Vs. J.Thomas

In the cited case somebody who claims as a director of Dakshin signed on the cheque and there is some dispute regarding the identity of the person who signed on the cheque. Thus, the facts in the above case are not identical to the case on hand and hence not helpful to the accused.

25.The complainant counsel has relied on the citation reported in

2015 (2) DCR 417

in between

Mainuddin Abdul Sattar Shaikh Vs. Vijay D.Salvi

In the cited case his lordships has held that to attract the provision of Section 138 of Negotiable Instruments Act there is no need to prove the status of the drawer.

In this case on hand, there is no concrete material produced by the accused to show that he is no way concerned with the transaction with the complainant. It is not the case of the accused that he is not maintaining the Golden Studio Saloon and Spa. It is not the case of the accused that the signature found on Ex.P1 is not that of him. Thus, the complainant could prove that Ex.P1 issued for discharge of legally 13 C.C.363 of 2016 enforceable debt. Hence, for the foregoing reasons, this Court is of the considered opinion that the accused failed to rebut the presumption available in favour of the complainant U/s.139 of Negotiable

Instrument Act. This point is answered accordingly.

In the result, the accused is found guilty for the offence punishable U/Sec.138 of Negotiable Instruments Act and accordingly convicted U/s.255(2) Cr.P.C.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open court on this the 27th day of November, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

14 C.C.363 of 2016

26.The accused is questioned regarding the quantum of sentence that can be awarded to him for the offence U/s.138 of Negotiable

Instrument Act for which he has stated that he is diabetic and taking insulin. He has further stated that he is having wife and children and they are depending on him and seeking to take lenient view.

27.Considering the facts and circumstances of the case and nature of the offence, this Court is not inclined to invoke the provisions of

Probation of Offenders Act.

In the citation reported in

Crl.Rivision No.583 of 2012

in between

Meel Bai Vs. Rameshwara Prasad Chouhan

The Hon’ble Chattisgarh High Court after referring the Hon’ble

Apex Court’s judgments has held that “the punishment to be awarded in Section 138 of Negotiable Instrument Act cases are meant to ensure payment of money and threat of jail is only to ensure recovery and as such, imposition of jail sentence is not mandatory”.

28.In the citation reported in

2012 (1) ALD (Crl.) 803 (SC)

in between

R.Vijayan Vs. Baby and another

The Hon’ble Apex Court has held that “the apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation U/s.357(1)(b) of the Code”.

15 C.C.363 of 2016

29.In the citation reported in

2014 (1) ALT (Crl.) 145 (SC)

in between

Somnath Sarka Vs. Utpal Basu Mallick and another

The Hon’ble Apex Court has held that “the amount to be paid towards compensation U/s.357 Cr.P.C. to the complainant is not different or separate from the fine amount imposed U/s.138 of

Negotiable Instrument Act”. So, the compensation has to be awarded to the complainant out of fine amount.

Considering Ex.P1 cheque amount and also the nature of the offence, this Court is of the considered opinion that sentencing the accused to undergo rigorous imprisonment for a period of six months and shall pay fine of Rs.15,05,000/- would meet the ends of justice.

Hence, the accused is sentenced to undergo rigorous imprisonment for a period of six months and to pay fine of Rs.15,05,000/- (Rupees

Fifteen Lakhs Five Thousand only).In default of payment of fine, he shall undergo simple imprisonment for a period of One month. Out of the fine amount of Rs.15,05,000/-, Rs.15,00,000/- shall be paid to the complainant towards compensation U/s.357(1)(b) Cr.P.C. after expiry of appeal time. There is no remand period to give set off Under

Section 428 of Cr.P.C.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open court on this the 27th day of November, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

16 C.C.363 of 2016

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR COMPLAINANT : FOR DEFENCE:

PW1 : Shakuntala Rathod DW1 : P.Anitha PW2 : V.Venketeswar Rao DW2 : A.Sai Mallesh Reddy PW3 : G.Ravi Kanth

DOCUMENTS MARKED

FOR COMPLAINANT:

Ex.P1 : Cheque No.00054 dated 24.12.2014 for Rs.15,00,000/-

Ex.P2 : Cheque return memo dated 26.12.2014

Ex.P3 : Office copy of legal notice dated 07.01.2015

Ex.P4 : Postal receipt dated 10.01.2015

Ex.P5 : Postal acknowledgement dated 12.01.2015

Ex.P6 : Bank statement

Ex.P7 : Reply from the accused dated 27.01.2015

Ex.X1 : Copy of Application for RTGS

Ex.X2 : Copy of cheque issued by PW1

Ex.X3 : Copy of Statement of account

DEFENCE : - Nil -

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl. Judge–Cum-XX ACMM, Secunderabad.

IN THE COURT OF XVI ADDL.JUDGE-CUM-XX ADDL.CHIEF

METROPOLITAN MAGISTRATE AT SECUNDERABAD.

MONDAY, THE 17 h DAY OF DECEMBER, 2018

Present : Sri P.V.S.Suryanarayana Murthy, XV Addl.Judge-cum-XIX ACMM, FAC XVI Addl.Judge-cum-XX ACMM, Secunderabad.

C.C.NO.283 OF 2016

BETWEEN:

M/s Gowra Leasing & Finance Ltd., a public limited company incorporated under the Companies Act, 1956 represented by its Recovery Officer V.Nageswar Rao S/o V.Keshav Rao, Age: 50 years, having its registered office at 501, 5th floor, Gowra Grand behind Gowra Plaza, 1-8-384 & 385, S.P.Road, Begumpet, Secunderabad.

... Complainant

AND

AnjaneyaSharmaJammulamadakaS/o Purnanandam Jammulamadaka, Age 65 years, Occ Business, R/o Plot No.16, Gunrock Enclave, Mud Fort, Secunderabad.

... Accused

This C.C has been coming for final disposal before me on 06.12.2018 and 14.12.2018 in the presence of Sri E.Ravinder Rao, Counsel for the complainant and Sri M.Ratan Singh, Counsel for the accused and having stood over for consideration till this day, this court delivered the following:

J U D G M E N T

1.This is a private complaint filed by the complainant against the accused for the offence punishable under Section 138 of Negotiable

Instruments Act.

2.The case of the complainant in brief is as follows.

The complainant is the public limited company dealing in leasing and finance business having its registered office at 501, Gowra Plaza,

S.P.Road, Secunderabad. M/s Mtare Engineering India Private Limited represented by its Managing Director M.Krishna had approached the 2 C.C.283 of 2016 complainant’s company and obtained loan amount of Rs.90,00,000/- from the complainant by executing a loan agreement dated 06.09.2013 and the accused has stood as guarantor for the said loan and the accused has executed a surety bond on 06.09.2013 and also executed undertaking letter dated 06.09.2013 along with cheque.

M/s Mtare Engineering India Private Limited failed to repay the outstanding loan amount of Rs.38,59,395/- within time and the complainant demanded the accused to pay the said amount as he stood as guarantor upon which the accused has asked the complainant to present the cheque and assured that the cheque would be

honoured. The complainant has presented the cheque bearing

No.695484 dated 04.08.2015 for Rs.38,59,395/- drawn on State Bank of India, Secunderabad. The said cheque was returned as payment stopped by drawer vide return memo dated 06.08.2015. The complainant got issued a notice dated 24.08.2015 and the accused received the said notice on 29.08.2015 and failed to pay the amount nor issued any reply. Hence, this complaint.

3. This complainant was taken on file against the accused for the offence punishable under section 138 of Negotiable Instruments Act by

XI-ACMM Court, Secunderabad. Later as per the orders of Honorable

Metropolitan Sessions Judge, Hyderabad this complaint was transferred to this Court and renumbered as C.C.No.283 of 2016.

4. After appearance of the accused copies of the documents were furnished to the accused as contemplated under Section 207

Cr.P.C. Later the accused was examined under Section 251 Cr.P.C. by 3 C.C.283 of 2016 explaining the substance of acquisition for the offence punishable under section 138 of Negotiable Instruments Act for which he pleaded not guilty and claimed to be tried.

5.During trial, the Recovery Agent of the complainant company got examined as PW1 and got marked Exs.P1 to P10.

6.After closure of the complainant's evidence the accused was examined under section 313 Cr.P.C. by explaining the incriminating material found against him for which he denied and reported to have no defence evidence. He has filed the written statement U/s.313 (5)

Cr.P.C.

The brief contentions in the written statement of the accused is that the complainant company had taken four number of cheques in question on the different dates, blank signed in nature and the complainant company had filed the false case. It is further contended that the accused has not issued the cheque in question nor consented the complainant company to fill up the contents of the cheque, but the complainant company without any consent had filled the cheque in question and filed the false case and committed an offence of breach of trust. It is prayed to dismiss the complaint.

7. Heard the arguments. Both counsels filed the written arguments.

The brief averments in the written arguments of the complainant is as follows:-

The complainant in order to prove its case examined PW1 and got marked Exs.P1 to P10. The accused stood as guarantor for the loan advanced to M/s Mtare Engineering India Private Limited and failed to 4 C.C.283 of 2016 repay the outstanding loan amount of Rs.38,59,395/- within the time and the accused asked the complainant to present the cheque and assured that the cheque will be honoured. Then the complainant has presented the cheque. The accused did not put forth any acceptable material evidence in support of his case. Once the issuance of the cheque is admitted, it is for the accused to rebut the presumption that the cheque was not issued for legally enforceable debt. The accused failed to put forth probable defence. The complainant has duly proved the ingredients required to prove the charge U/s.138 of Negotiable

Instruments Act. The complainant issued the notice U/s.138(b) of

Negotiable Instruments Act and the accused received the notice and failed to pay the amount nor issued any reply. Except putting inconsistent suggestions to PW1, the accused failed to rise probable defence. It is prayed to convict the accused and award compensation.

(a) The brief contentions in the written arguments of the accused is as follows:-

The complainant has recovered an amount of Rs.64,00,000/- prior to filing of the complaint and that is not disclosed in the complaint and what made the complainant not to disclose the rate of interest, accumulated figure appearing in the cheque. The complainant filled up the cheque at its whims and fancies and exceeding amount owed by Mtare company. The balance amount is only Rs.16,00,000/- and how the complainant entitled Rs.38,59,935/-. Thus, there is no legally enforceable debt or liability. PW1 in his cross-examination stated that in the year, 2015 the accused came forward and issued the cheque and undertaking letter, but the said undertaking letter is 5 C.C.283 of 2016 not filed. Contents of Ex.P5 proves the cheque was issued as a security.

Section 20 of Negotiable Instruments Act says the person in domain with inchoate instrument can only recover the amount. The PW1 in his cross-examination admitted that accused gave four cheques to the complainant affixing his signature on the cheques and gave to the complainant. PW1 in his cross-examination stated that cheque in question issued in the year, 2015. The complainant misused the cheque in question at his whims and fancies. The accused lodged a complaint with RBI because the complainant have taken blank signed cheques and passed on information to stop the payment. It is prayed to acquit the accused.

8. Now the point for determination is that whether the complainant could bring home the guilt of the accused for the offence punishable under section 138 of Negotiable Instruments Act?

9.POINT :- The facts of the case is stated supra. To prove the offence under section 138 of Negotiable Instruments Act the following aspects are to be established.

1. That there is an existing legally enforceable debt as on the date of issuance of the disputed cheque,

2. That the cheque was presented in the bank within the six months from the date of which it was drawn or within the period of its validity. As per section 35 A of Banking Regulation Act 1949 the validity of cheque is reduced to 3 months from six months with effect from 1.04.2012.

3. Cheque was returned unpaid and the complainant herein gave notice in writing regarding the dishonor of cheques within 30 days from the date of receipt of the information by him.

4. That the accused failed to make payment within 15 days from the date of receipt of notice.

6 C.C.283 of 2016

10. Before proceeding further it is beneficial to refer the provisions of Negotiable Instruments Act and chapter 17 of Negotiable

Instruments Act make a civil transaction to be an offence by fiction of law and that certain rebuttable presumptions that shall be drawn.

The object and intention of these penal provisions are to prevent the issuance of the cheques in a playful manner or with a dishonest intention or that no mind to honor or without sufficient funds in the accounts maintained by the drawer. The initial presumption is in favour of the complainant. The rebuttable presumption under Section 139 of

Negotiable Instruments Act is a device to prevent undue delay in the course of litigation.

11.The version of the complainant is that the complainant is a public limited company dealing in leasing and finance business and M/s Mtare

Engineering India Private Limited represented by its Managing Director has approached the complainant company and obtained loan of

Rs.90,00,000/- by executing loan agreement on 06.09.2013. The further version of the complainant is that the accused stood as surety and executed surety bond dated 06.09.2013 and also executed a undertaking letter dated 06.09.2013 and issued the cheque and M/s

Mtare Engineering India Private Limited committed default and outstanding loan amount was Rs.38,59,395/-. The further version of the complainant is that the complainant presented the subject cheque which was returned as payment stopped by drawer.

The defence of the accused in 251 Cr.P.C. examination is total denial. In 313 Cr.P.C. examination he has stated that he did not issue the cheque as a guarantor. The version of the accused in his 7 C.C.283 of 2016 written statement is that the complainant has taken four number of cheque in blank, but he did not give consent to the complainant to fill the cheque and file the case.

12. The recovery officer of the complainant examined as PW1. PW1 reiterated the complaint averments in his chief-examination. During the cross-examination PW1 has deposed that the entire Rs.90,00,000/- has given to M/s Mtare Engineering India Private Limited. He has admitted that they have obtained agreement for Rs.40,00,000/- for one property and Rs.24,00,000/- for another property. Those agreements are marked as Exs.D1 and D2. He has further stated that M/s Mtare

Engineering India Private Limited company paid Rs.5,00,000/- from 2013 to 2015. He has denied the suggestion that M/s Mtare

Engineering India Private Limited paid Rs.12,00,000/- to the complainant upto 2015. He has admitted that the accused gave complaint to RBI stating that complainant has taken four blank signed cheques. He has stated that the RBI asked the evidence and the complainant produced the evidence and then RBI held that the complaint filed by the accused is not tenable. He has denied the suggestion that Ex.P6 is not given by the accused.

13.Ex.P1 is the delegation of powers given by the complainant company to PW1. Ex.P2 is the articles of association. Ex.P3 is the loan agreement. The evidence of PW1 coupled with Ex.P3 discloses that the complainant company advanced loan to M/s Mtare Engineering India

Private Limited. The loan amount is Rs.90,00,000/-. Ex.P3 is dated 06.09.2013. Ex.P4 is the surety bond. The signature of the Managing 8 C.C.283 of 2016

Director of M/s Mtare Engineering India Private Limited and the signature of the accused as one of the directors of M/s Mtare

Engineering India Private Limited is found place on Exs.P3 and P4. The accused is not an illiterate person. It is admitted fact that the accused is one of the directos of M/s Mtare Engineering India Private Limited.

Furthermore, the accused during the cross of PW1 elicited that they have obtained agreement of sale under Exs.D1 and D2 for

Rs.24,00,000/- and Rs.40,00,000/- respectively. Thus, the accused is not disputing grant of loan to M/s Mtare Engineering India Private

Limited by the complainant. Thus, the material on record establishes that the complainant has advanced Rs.90,00,000/- to M/s Mtare

Engineering India Private Limited on 06.09.2013.

14.Ex.P5 is the undertaking given by the accused. In Ex.P5 it is specifically mentioned that the accused had issued four cheques and all the cheques are being kept blank as regard to the date of the cheque and the amount. The subject cheque number i.e. 695484 is found in Ex.P5. Thus, Ex.P5 document discloses that the complainant has obtained the blank signed cheques from the accused on 06.09.2013.

15.The specific version of the accused is that as per the contents of

Ex.P5 the cheques were issued towards security and he did not give consent to the complainant to fill the blanks. In Ex.P5 it is specifically mentioned that in accordance with the provisions of Section 20 of the

Negotiable Instruments Act, the holder of the cheques shall have the authority to complete the said cheque before presentation. It is further 9 C.C.283 of 2016 mentioned in Ex.P5 that dishonouring of the said cheque would make the accused liable under the provisions of Section 138 of Negotiable

Instrument Act. Ex.P5 contents reveals that the accused gave undertaking to the complainant to fill the blanks of the cheques and present the cheque and if the cheque is dishonoured he would be liable for prosecution U/s.138 of Negotiable Instruments Act. The accused is not disputing his signature in Ex.P5. It is not the case of the accused that he has not executed Ex.P5.

16The counsel for the accused has relied on the citation reported in

2006 Cri.LJ 2643

in between

Laxminivas Agarwal Vs.Andhra Semi Conductors Pvt. Ltd.

for the proposition that if the blank cheques taken at the time of loan towards security complaint U/s.138 of Negotiable Instruments Act is not maintainable.

17.The counsel for the accused has relied on the citation reported in

2004 (2) KLT 746

in between

Sudha Beevi Vs. State of Kerala on 2 nd April 2004

In the cited case post dated cheques were given to complainant towards future installments. The facts in the above case are not identical.

18.In the citation reported in

Criminal Appeal No.867 of 2016

in between

Sampelly Satyanarayana Rao Vs. Indian Renewable Energy

Development Agency Limited

10 C.C.283 of 2016

The Hon’ble Apex Court held that the dishonour of a post dated cheque given for repayment of loan installment which is also described as security in the loan agreement is covered by Section 138 of

Negotiable Instruments Act.

Ex.P5 undertaking recitals reveals that the accused has given the consent to the complainant to fill the blanks and present the cheque.

Hence, in the light of the principle enunciated in the latest judgment of the Hon’ble Apex Court the citation relied by the counsel for the accused is not helpful to the accused.

19.The complainant counsel relied on the citation reported in

2008 (1) ALD (Crl.) 300

in between

B.Raja Krishnaji Vs. Kadam Kandoji and another

for the proposition that if the cheques were handed over to the creditor towards security would attract liability U/s.138 of Negotiable

Instrument Act.

In this case on hand, the accused is not disputing the signature on Ex.P6 cheque. It is not the case of the accused that Ex.P6 is not drawn from the account maintained by the accused. The presumption

U/s.139 of Negotiable Instrument Act is in favour of the complainant.

20.In the citation reported in

2010 (1) ALD (Crl.) 59 (AP)

in between

D.Atchyutha Reddy Vs. State of Andhra Pradesh and another

His lordships has held that “the cheque need not be in the hand writing of the drawer’.

11 C.C.283 of 2016

21.The further version of the accused is that PW1 has admitted that

M/s Mtare Engineering India Private Limited company paid

Rs.90,00,000/- and as per Exs.D1 and D2 Rs.64,00,000/- were recovered and some amount paid to the complainant as admitted by

PW1 and the balance is only Rs.17,00,000/- and hence the complaint is not maintainable. As per the value mentioned in Exs.D1 and D2 the total sale consideration is Rs.64,00,000/-. The loan amount advanced on 06.09.2013 is Rs.90,00,000/-. The cheque is dated 04.08.2015. In

Ex.P3 loan agreement the rate of interest is specifically mentioned as 26% per annum. The counsel for the complainant has submitted that due amount with interest comes to Rs.38,59,395/- and on the consent of the accused only they presented the cheque. The version of the counsel for the accused is that due amount is only Rs.17,00,000/- is not tenable because the interest from 06.09.2013 to 04.08.2015 has to be calculated.

22.The cheque is dated 04.08.2015. As seen from Ex.P7 the cheque returned as payment stopped by drawer. In the citation reported in

2012 (2) Bankmann 591

In between

M/s.Laxmi Dyechem Vs. State of Gujarath and others

The Hon’ble Apex Court has held as under “the expression

amount of money is insufficient appearing in Section 138 of

the Act is a genus and dishonour for the reasons such as

account closed, payment stopped, referred to the drawer are

only spices of that genus. Just as a dishonour of the cheque on

the ground that the account has been closed is a dishonour

12 C.C.283 of 2016

falling in the first contingency referred to in Section 138, so

also dishonour on the ground that the signatures do not match

or that the image is not found which too implies that the

specimen signatures do not match, the signatures on the

cheque would constitute a dishonour within the meaning of

the Section 138 of the Negotiable Instrument Act”.

23.Ex.P8 is the notice dated 24.08.2015. The accused himself has admitted in 313 Cr.P.C. examination that he has received the notice and did not sent any reply. If really the accused did not fell due what prevented him to issue reply. The non issuance of the reply also fortifies the case of the complainant. Reliance is placed on the citation reported in

2010 (11) Supreme Court Cases 441

in between

Rangappa Vs. Sri Mohan

Though the accused elicited during the cross-examination of PW1 that the accused gave the complaint to the RBI he has not placed any material to that effect.

24.In the citation reported in

AIR 2015 SC 2240

in between

T.Vasanth Kumar Vs. Vijaya Kumari

The Hon’ble Apex Court has held that “once the drawer

of the cheque has admitted the signature on the cheque and

13 C.C.283 of 2016

issuance of the cheque, the presumption U/s.139 of Negotiable

Instrument Act is in favour of the complainant and the burden

is on the accused to rebut the said presumption”.

Hence, for the foregoing reasons this Court is of the considered opinion that the complainant could prove that there was legally enforceable debt and the accused failed to rebut the presumption available in favour of the complainant. This point is answered accordingly.

In the result, the accused is found guilty for the offence punishable U/s.138 of Negotiable Instruments Act and convicted

U/s.255(2) Cr.P.C.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open court on this the 17th day of December, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

14 C.C.283 of 2016

25.The accused is questioned regarding the quantum of sentence that can be awarded to him for the offence U/s.138 of Negotiable

Instrument Act for which he has stated that he is aged about 69 years and seeking to take lenient view.

26.Considering the facts and circumstances of the case, this Court is not inclined to invoke the provisions of Probation of Offenders Act.

In this case on hand, the cheque amount is Rs.38,59,395/-. In the citation reported in

Crl.Rivision No.583 of 2012

in between

Meel Bai Vs. Rameshwara Prasad Chouhan

The Hon’ble Chattisgarh High Court after referring the Hon’ble

Apex Court’s judgments has held that “the punishment to be awarded in Section 138 of Negotiable Instrument Act cases are meant to ensure payment of money and threat of jail is only to ensure recovery and as such, imposition of jail sentence is not mandatory”.

27.In the citation reported in

2012 (1) ALD (Crl.) 803 (SC)

in between

R.Vijayan Vs. Baby and another

The Hon’ble Apex Court has held that “the apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation U/s.357(1)(b) of the Code”.

15 C.C.283 of 2016

28.In the citation reported in

2014 (1) ALT (Crl.) 145 (SC)

in between

Somnath Sarka Vs. Utpal Basu Mallick and another

The Hon’ble Apex Court has held that “the amount to be paid towards compensation U/s.357 Cr.P.C. to the complainant is not different or separate from the fine amount imposed U/s.138 of

Negotiable Instrument Act”. So, the compensation has to be awarded to the complainant out of fine amount.

Considering the nature of the offence, circumstances of the case and also the cheque amount involved in this case, sentencing the accused to undergo rigorous imprisonment for a period of six months and shall pay fine of Rs.38,60,000/- would meet the ends of justice.

Hence, the accused is sentenced to undergo rigorous imprisonment for a period of six months and to pay fine of Rs.38,60,000/- (Rupees

Thirty Eight Lakhs Sixty Thousand only). In default of payment of fine, he shall undergo simple imprisonment for a period of one month.Out of the fine amount of Rs.38,60,000/-, Rs.38,55,000/- shall be paid to the complainant towards compensation U/s.357(1)(b) Cr.P.C.

after expiry of appeal time. There is no remand period to give set off

Under Section 428 of Cr.P.C.

Dictated to Personal Assistant, transcribed by her, corrected and

pronounced by me in the open Court on this 17th day of December, 2018.

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.

16 C.C.283 of 2016

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

FOR COMPLAINANT : FOR DEFENCE:

PW1 : V.Nageswar Rao - Nil -

DOCUMENTS MARKED

FOR COMPLAINANT:

Ex.P1 : Copy of letter of authorization

Ex.P2 : Memorandum of Association and Articles of Association

Ex.P3 : Loan agreement

Ex.P4 : Surety bond

Ex.P5 : Letter of undertaking dated 06.09.2015

Ex.P6 : Cheque No.695484 dated 04.08.2015 for Rs.38,59,395/-

Ex.P7 : Cheque return memo dated 06.08.2015

Ex.P8 : Office copy of legal notice dated 24.08.2015

Ex.P9 : Postal receipt

Ex.P10 : Postal acknowledgment

DEFENCE :

Ex.D1 : Copy of AGPA dated 12.09.2013

Ex.D2 : Copy of agreement of sale cum GPA dated 06.09.2013 (Marked during the cross of PW1)

XV Addl. Judge–Cum-XIX ACMM, FAC XVI Addl.Judge–Cum-XX ACMM, Secunderabad.