IN THE COURT OF THE IV ADDDITIONAL METROPOLITAN SESSIONS JUDGE;
HYDERABAD.
Present: R.Thirupathi, IV Addl .Metropolitan Sessions Judge, Hyderabad. Friday, the 05 thday of July, 2019
CRIMINAL APPEAL No. 181 of 2016
From what court this appeal is preferred XI Special Magistrate
Number of the case in that CourtC.C No.19 of 2015
Number of the appealCrl. Appeal No.181 of 2016
Name and description of the Solipeta Srikanth, S/o.S.Ramchander, Age: 28 years, Appellant /accused Occ: Pvt.Employee, R/o.H.No.127 107/1, Pragathinagar, Moosapet, Hyderabad – 18.
Name and description of the 1. Golla Chinna Gangaraju, S/o.G.Pullanna, Age: 32 years, Respondents/Complainant Occ: Business, R/o.H.No.127134/92, Flat No.A2, Sridhar Enclave, Anjaneyanagar, Moosapet, Hyderabad.
2. The State of Telangana, Rep.by Additional Public Prosecutor
The sentence and law under which In the result, the accused is found guilty conviction was imposed in the lower of the offence punishable U/sec 138 of courtthe Negotiable Instruments Act and as such he is convicted of the said offence U/sec255(2) Cr.P.C and sentenced to suffer R.I for 9 months and to pay a fine of Rs.6,30,000/ and out of the fine amount to be realized an amount of Rs.6,25,000/ shall be paid to the complainant as compensation U/sec 357(1)(b) Cr.P.C in default of payment of fine he shall undergo S.I. for a period of 2 months.
Whether confirmed, modified or In the result, the appeal is allowed in Reversed, if modified the Modification: part and the judgment of conviction of the accused for the offence Under Section 138 of the Negotiable Instruments Act, in CC No.19 of 2015,
dated 01.02.2016 on the file of the
learnedXISpecialMagistrate, Hyderabad, is confirmed and the sentence of Rigorous Imprisonment for nine months is set aside, while the sentence of fine of Rs.6,30,000/ and the default sentence of two months simple imprisonment, imposed by the trial Court is confirmed, and the order of paymentofcompensationof Rs.6,25,000/ to the complainant is also confirmed and he shall pay the said compensation amount with interest at 12 percent per annum from the date of this judgment till payment or realization. The trial Court shall take steps for realization of the fine amount and for payment of compensation to the complainant by issuing NonBailable warrant and also warrant under Section 421 Criminal Procedure Code.
DATE ON WHICH
Presentation26022016
Filing27022016
Notice issued by the Court29022016
Appearance of the Appellant13122016
Hearing01072019
JUDGMENT05072019
This appeal is coming on for hearing before me, upon perusing the petition and record of evidence and proceedings and of appeal and upon duly considering the same after hearing the arguments of Sri.Ratan Singh, Advocate for the Appellant/accused and having stood over for consideration till this day this court delivered the following:
:: J U D G M E N T ::
This appeal is preferred by the accused challenging the judgment of conviction and sentence passed by the learned XI Special Magistrate, Hyderabad, in CC No.19 of 2015, dated 01.02.2016. The accused was convicted for the offence under Section 138 of the Negotiable Instruments Act, and sentenced to suffer Rigorous Imprisonment for nine months and to pay fine of Rs.6,30,000/, out of which a sum of Rs.6,25,000/ was ordered to be paid to the complainant as compensation under Section 357(1) Cr.P.C.
2.I will refer to the parties, as they are arrayed, in the trial Court for the sake of convenience.
3.The brief facts, leading to the prosecution of the accused, can be summarized as under:
The accused, due to close acquaintance and rapport, approached the complainant for a hand loan of Rs.3,00,000/ and considering his request, the complainant lent Rs.3,00,000/ on 01.07.2014, who executed hand loancum receipt dated 01.04.2014, promising to repay the same within three months. After repeated demands and requests, he had issued the chequeEx.P2 on 23.11.2014 by post dating it as 24.11.2014 for Rs.3 lakhs drawn on Axis Bank, Hanumantekdi,
Hyderabad, to discharge the said debt. On presentation of the said Ex.P2cheque through his banker, it was returned dishonoured with the endorsement as 'insufficient funds' as per the cheque return memoEx.P3. Later, he got issued legal noticeEx.P4, which was acknowledged by the accused under Ex.P6 acknowledgement. The accused failed to pay the amount nor gave any reply.
Hence, the complaint.
4.On the appearance of the accused before the trial Court, the learned
Magistrate furnished copies of documents, as contemplated under Section 207 of
the Criminal Procedure Code. He denied the substance of the accusation in
Section 251 Cr.P.C., examination for the offence under Section 138 of the
Negotiable Instruments Act, pleaded not guilty and claimed to be tried.
5.The complainant, in order to establish his case, has examined himself as PW.1 and marked Ex.P1 to P.6 documents.
6.After closure of the complainant evidence, the learned Magistrate examined the accused under Section 313 of the Criminal Procedure Code, with reference to the incriminating circumstances appearing against him in the evidence of PW.1 and the accused denied the incriminating material.
7.In his defence evidence, the accused examined himself as D.W.1 with the permission of the Court but he did not exhibit any documents.
8.After hearing both sides, the learned Special Magistrate found the accused guilty of the offence under Section 138 of the Negotiable Instruments Act, on being satisfied that the complainant has followed the requisite procedural formalities contemplated under Section 138 read with Section 142 of the
Negotiable Instruments Act, convicted the accused under Section 255(2) Cr.P.C.
for the offence under Section 138 of the Negotiable Instruments Act. Considering the mitigating circumstances putforth by the accused, the learned Magistrate sentenced the accused to undergo Rigorous imprisonment for nine months and to pay fine of Rs.6,30,000/, in default to suffer simple imprisonment for two months. He also awarded a sum of Rs.6,25,000/ from out of fine amount as compensation to the complainant.
9.Feeling aggrieved by the said judgment of conviction and sentence, the accused preferred this appeal.
10.Heard both sides. Perused the record.
11.The points that emerge for consideration are :
1) Whether the complainant is able to prove that the accused issued impugned cheque Ex.P2 for discharge of legally enforceable debt or liability?
2) Whether the complainant proved that Ex.P2 cheque was returned dishonoured for want of sufficient funds in the account of the accused?
3) Whether the complainant is able to prove that the accused failed to pay the amount covered by Ex.P2cheque, despite demand notice in writing, beyond all reasonable doubt?
4) Whether the complainant has followed the prescribed statutory procedure in filing the complaint?
5) Whether the Complainant has proved the ingredients of Section 138 of the Negotiable Instruments Act, beyond all reasonable doubt?
6) Whether the judgment of the trial Court is sustainable on facts and in law?
7) To What result?
12.POINT (1) : The case of the complainant is that, the accused borrowed
Rs.3 lakhs on 01.07.2014 as hand loan and executed an agreement, titled as ‘hand loancumreceipt’ promising to repay the same within three months. After repeated requests and demands, he issued cheque – Ex.P2 for Rs.3 lakhs on 23.11.2014 by postdating it as 24.11.2014 drawn on Axis Bank, Hanuman Tekdi, to discharge the said hand loan amount. When the said cheque was presented for payment, it was returned dishonoured for want of sufficient funds in his account as per the cheque return memo – Ex.P3 issued by the bank on 25.11.2014, and that he failed to pay the said amount, despite legal notice Ex.P4.
13.The plea of the accused, as can be seen, from the tenor of cross examination of PW.1 and also as argued by the learned counsel for the accused, is one of total denial and false implication. His specific plea and argument is that, the complainant failed to prove his capacity to lend Rs.3 lakhs, that he had issued the cheque in blank format as security to one Subramanyam when he borrowed
Rs.1 lakh from him, and that he also gave two signed blank nonjudicial stamp papers worth Rs.100/ in the presence of one K. Venkateswarlu and that he repaid the said amount to the said Subramanyam, but the said Subramanyam failed to return the signed cheques and stamp papers. Thus, according to him, there is no legally enforceable debt or liability under the cheque – Ex.P2.
14.Since the complainant is seeking punishment of the accused for the offence under Section 138 of the Negotiable Instruments Act, initial burden of proof lies upon him, to prove that the accused issued cheque – Ex.P2 to discharge a legally enforceable debt, and that the cheque bears the signature of the accused.
Once if the complainant is able to establish the factum of the accused signing on the cheque – Ex.P2, then burden of proof shifts on to the accused to prove as to under what circumstances he had issued the cheque to the complainant. If the complainant is able to establish that the signature on the cheque – Ex.P2 is that of the accused, then the presumption under Section 139 of the Negotiable
Instruments Act can be validly raised in favour of the complainant that he received the said cheque for discharge of legally enforceable debt. Of course, the said presumption is a rebuttable presumption and the accused can rebut the said presumption by leading cogent and convincing evidence or by establishing the circumstances under which he had to issue the cheque and the cheque went into the hands of the complainant, from the evidence let in by the complainant, and that there does exist any legally enforceable debt. Keeping the above principles in mind, let us now appreciate the evidence let in by the complainant as well as the accused.
15.The complainant examined himself as PW.1 His evidence, in the chief examination, is a replica of the averments in the complaint, which I have already extracted supra and they need not be reiterated again to avoid repetition.
Suffice to say, in a nut shell, his evidence in chief examination, is that the accused borrowed Rs.3 lakhs on 01.07.2014 by executing a document titled as hand loan cumreceipt Ex.P.1, on 01.08.2014 attested by T. Subramanyam and later issued the cheque – Ex.P2 and the same was dishonoured. He has proved Ex.P1 as the hand loancumreceipt dated 01.08.2014 and Ex.P2cheque dated 24.11.2014 issued by the accused. Though he was subjected to lengthy cross examination by the learned counsel for the accused, his evidence is not tilted or shaken. He has explained, in his cross examination, about the source of money lent to the accused by deposing that from out of his business, he arranged Rs. 2 lakhs, and had taken a sum of Rs.1 lakh from one Naveen. He deposed to have started business in pulleys for the last 1 ½ years. He has positively denied the suggestion of the accused about the accused issuing two blank cheques and blank signed stamp papers to one Subramanyam. He also deposed that he lent the amount in the denomination of rupees thousand and five hundred rupees currency notes in the presence of Naveen and Subramanyamn. Ex.P1 is the handloancum receipt while
Ex.P2 is the cheque issued by the accused. His signature on Ex.P1 and P2 tallies with each other and the accused, in his evidence, admits, about himself signing on two blank cheques and also nonjudicial stamp papers worth Rs.100/, but claims to have issued those documents to Mr K. Subramanyam when he borrowed
Rs.1 lakh from him in the presence of K. Venkateswarlu who did not return those documents even after payment of the amount to the said Subramnayam. Except his selfserving testimony, the accused did not lead any independent evidence to prove his plea of defence. Admittedly, the said Venkateswarlu, is his close friend but he did not choose to examine him in support of his defence. Even he did not choose to examine the said T. Subramanyam to whom he is alleged to have issued two signed blank cheques and also two signed blank nonjudicial stamp papers worth Rs.100/ in connection the transaction of borrowal of Rs.1 lakh. Even he did not issue any legal notice to the said Subramanyam demanding to return those documents. Even he did not choose to give complaint to the police when the said
Subramanyam failed to return those documents and when he is alleged to have repaid the said loan stating that those documents are misplaced. He did not even issue any letter to the Manager of his Bank to stop payment, in the event of presentation of those two cheques alleged to be issued to Subramanyam to prevent possible misuse. He is a M.B.A graduate and a highly educated person. He admits that he is not expected to sign on blank signed cheques and also non judicial stamp papers. He being a MBA graduate and a prudent person, well educated, we cannot expect him to have issued blank signed cheques and also nonjudicial stamp papers as deposed by him. Failure to take legal steps by issuing notice to the said Subramanyam and giving any complaint to the police against him or even issue of notice to his Bank to stop payment, has to be viewed against him and it can be safely inferred by his conduct that he borrowed Rs. 3 lakhs from the complainant on 01.07.2014 and executed Ex.P1hand loancum receipt acknowledging the said debt and later issued the cheque – Ex.P2 to discharge the said debt covered by Ex.P1. Now he has been making a false theory of defence of issuing blank signed cheques and nonjudicial stamp papers worth
Rs.100/, which he failed to establish his case, by examining the said
Subramanyam or Venkateswarlu who is admittedly one of close friends. The accused did not specifically deny his signature on Ex.P1handloancumreceipt and the cheque – Ex.P2. He did not even take steps to send the documents to handwriting expert, if he really did not sign on those documents. Therefore, it can be safely concluded that he had executed Ex.P1hand loancumreceipt acknowledging the debt and later issued the cheque – Ex.P2 as claimed and deposed by the complainant as PW.1 and later when the cheque was presented for payment, it was returned dishonoured. A presumption under Section 139 of the
Negotiable Instruments Act can be raised in favour of the complainant, he being the payee and holder of the cheque – Ex.P2, that he has received the same to discharge the said debt covered by Ex.P1hand loancumreceipt dated 01.07.2014, which is a legally enforceable debt.
16.The complainant has revealed his source of income to lend the said amount, which is not a huge amount and that the complainant being a business man can afford to lend such amount. Therefore, the contention of the counsel for the accused that the complainant has failed to prove the source of money lent to the accused, cannot be countenanced.
17.Therefore, I hold that the complainant has successfully proved that the accused issued the cheque – ExP2 for discharge of legally enforceable debt under Ex.P1 . This point is answered in favour of the complainant and against the accused.
18.POINT No.2: The evidence of PW.1 coupled with Ex.P2cheque and Ex.P3 cheque return memo clinchingly establishes that the said cheque was returned dishonoured as funds insufficient. The accused did not dispute the facts seriously in his evidence as D.W.1 or by way of suggestions to PW.1. It is not his plea and evidence that he has kept sufficient funds in his account on the date of presentation of the cheque by the complainant. The cheque – Ex.P2 was presented within the period of its validity and the same was returned dishonoured for want of sufficient funds as revealed through Ex.P3cheque return memo.
Drawing presumption under Section 146 of the Negotiable Instruments Act coupled with the evidence of Pw.1, it can, therefore, be held that Ex.P2cheque was dishonoured for want of sufficient funds in the account of the accused. This point is answered in favour of the complainant and against the accused.
19.POINT No.3: The complainant pleaded and deposed to have issued the original legal notice – Ex.P4 on 01.04.2014 after receipt of the cheque return memo Ex.P3 informing the dishonour of the cheque issued by the accused, by registered post under Ex.P5 postal receipt which was served upon the accused under Ex.P6postal acknowledgement and demanding payment of the amount covered by the chequeEx.P2. The accused did not take any specific plea, either in the examination under section 251 of the Criminal Procedure Code or statement under Section 313 Cr.P.C., that he did not receive the notice. Though it is suggested to PW.1 that he was not served with legal notice Ex.P4, he did not choose to examine the postman who tendered the legal notice. The endorsement on the postal acknowledgement Ex.P3 shows that it was served on the accused through P. Madhavi. The accused did not explain as to who is the said Madhavi.
The registered cover containing legal notice which was sufficiently stamped was addressed to the accused. Unless the accused gives any proper authorization to the postmaster or postman, such registered cover cannot be delivered to a third party. So, the said Madhavi must be a member of his family or authorised person on behalf of the accused, to whom the legal notice – Ex.P4 was served. He did not dispute the address mentioned in the said legal notice or the postal acknowledgement. The said notice was properly addressed and sufficiently stamped and the acknowledgement containing the signature of one Madhavi on behalf of the accused has been filed by the complainant as Ex.P6. Therefore, drawing a presumption under Section 27 of the General Clauses Act, in view of the catena of decisions of the Apex Court and our own High Court, including the decision of the Hon'ble Apex Court in CC Alavi Haji Vs. Palapetty Muhammed and another, ((2007) 6 Supreme Court Cases 555), Ex.P4 notice shall be deemed to have been served upon the accused. In the said decision, it was held by the
Apex Court as follows:
“para14: Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at thee time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement 'refused', or 'not available in the house' or 'house lock' or shop closed' or addressee not in station', due serve has to be presumed. (vide Jagdish Singh Vs. Natthu Singh: State of M.P. Vs. Hiralal & others, and V. Raja Kumar Vs. P. Subbarama Naidu @ Anr. It is, thereform, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved”
Further, it was observed in para17, as follows:
“Para17: 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 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 thereforem, 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), if the giving of notice in the context of clause (b) of the proviso was the same was the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act.”
20.It was also specifically held that any drawer, who claims that he did not receive the notice sent by post, within 15 days of receipt of the summons from the trial Court in respect of the complaint under Section 138 of the Negotiable
Instruments Act, can make payment of the cheque amount and submit to the
Court that he had made payment within 15 days of receipt of the summons and that therefore the complaint is liable to be rejected. The accused did not choose to pay or deposit the amount covered by the cheque into the Court within the 15 days after receipt of summons which he proved to have been received, by him through Madhavi following the said judgment. So, the decision of the Apex Court relied upon by the learned counsel for the accused in M.D. Thomas Vs. Jaleel (in
Indian Kanoon Crl.Appeal No.711 of 2009, dated 17.09.2009) cannot be held to be applicable, in the light of the earlier decision of the Apex Court in CC Alavi
Haji Vs. Palapetty Muhammed, referred to supra wherein it was specifically held that if a person who does not pay the amount covered by the cheque within 15 days of receipt of summons from the court, cannot be allowed to contend that there was no proper service of notice as required under Section 138 of the
Negotiable Instruments Act by ignoring the statutory presumption contained in
Section 27 of the General Clauses Act and Section 114 of the Evidence Act. The said decision of the Hon'ble Apex Court was not referred to and over ruled in the decision of the Apex Court in M.D. Thomas Vs. Jaleel, relied upon by the learned counsel for the accused and the decision in CC Alavi Haji Vs. Palapetty
Muhammed is delivered by Bench of Hon'ble Three Judges whereas the decision in M.D. Thomas Vs. Jaleel (Referred to Supra) was delivered by a Bench of
Honourable two Judges of the Apex Court. In the said facts and circumstances,
the contention of the learned counsel for the accused that he did not receive the notice under Section 138(b) of the Negotiable instruments Act cannot be countenanced as he failed to pay the amount covered by the cheque after receipt of summons from the court after filing of the case within 15 days, as has been held by the Apex Court in CC Alaviu Vs Palapetty Muhammed referred to supra.
Therefore, it can be safely concluded without hesitation that the complainant has issued legal notice Ex.P4 to the accused making a demand to pay the amount covered by the cheque Ex.P2 after dishonour of the cheque and the accused failed to pay the amount within the statutory period or atleast within 15 days even after receipt of summons from the trial Court. This point, therefore, is answered in favour of the complainant and against the accused.
21. POINTS 4 & 5: On a careful scrutiny and appreciation of the evidence of
PW.1 and D.W.1 coupled with Ex.P1 to P6, and in view of my findings on points 1 to 3, it can be safely held that the complainant has proved guilt of the accused for the offence under Section 138 of the Negotiable Instruments Act against the accused beyond all reasonable doubt, and that he has followed all the requisite procedural and statutory formalities contemplated under Section 138 read with
Section 142 of the Negotiable Instruments Act. These points are answered in favour of the complainant.
22.POINT No.6:In view of my findings, on points 1 to 5 and on a careful scrutiny and consideration of the judgment of the trial Court, the learned
Magistrate has properly and correctly appreciated the evidence let in by both the
parties in their right perspective and came to a right and correct conclusion and in my opinion, the finding of guilt and conviction of the accused for the offence under section 138 of the Negotiable Instruments Act, does not call for any interference and deserves to be confirmed. However, the sentence of imprisonment for nine (9) months appears to be harsh and disproportionate to the gravity and nature of the offence keeping in view the mitigating circumstances putforth by the accused, as recorded in the judgment, that his father is not keeping good health and his sister is yet to be married and that his entire family is depending upon him. Though it is not a fit case to invoke the benevolent provisions of the Probation of Offenders Act to the offenders of this nature, but having regard to the said mitigating circumstances and also the fact that the appellant is young man, aged 28 years, having bright future, and he has to support his family and perform the marriage of his sister, it is not desirable to sentence the accused to imprisonment at once, as his entire family members, who are depended upon him, would face starvation, he being the sole earning member in the family. The complainant did not dispute the said mitigation circumstances put forth by the accused. Therefore, I am of the opinion that the sentence of imprisonment imposed by the trial Court deserves to be set aside and the accused can be sentenced to pay fine of Rs.6,30,000/ as imposed by the trial Court, which is quite reasonable, just and adequate having regard to the said mitigating circumstances. The order of compensation awarded to the complainant does not call for any interference; however the appellant shall pay the compensation with interest @ 12 % per annum from the date of this judgment till payment or realisation. Therefore, the judgment of the trial Court has to be modified suitably.
23.In the result, the appeal is allowed in part and the judgment of conviction of the accused for the offence under Section 138 of the Negotiable Instruments
Act, in CC No. 19 of 2015, dated 01.02.2016 on the file of the learned XI Special
Magistrate, Hyderabad, is confirmed and the sentence of rigorous imprisonment
for nine months is set aside, while the sentence of fine of Rs.6,30,000/ and the default sentence of two months simple imprisonment, imposed by the trial Court is confirmed, and the order of payment of compensation of Rs.6,25,000/ to the complainant is also confirmed and he shall pay the said compensation amount with interest at 12 percent per annum from the date of this judgment till payment or realization. The trial Court shall take steps for realization of the fine amount and for payment of compensation to the complainant by issuing NonBailable warrant and also warrant under Section 421 Criminal Procedure Code.
Dictated to Stenographer Gr.1 of this Court, transcribed and typed by him,
corrected and pronounced by me in the open court on this the 5th day of July, 2019.
Sd/
IV ADDITIONAL METROPOLITAN SESSIONS
JUDGE, HYDERABAD
// T.C.F.B.O.//
SUPERINTENDENT
Copy to: The XI Special Magistrate, Hyderabad (Sending the case records in CC No.19 of 2015 on the file of your court along with copy of Judgment in Criminal Appeal No.181 of 2016 on the file of this court).