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IN THE COURT OF THE IV ADDL.METROPOLITAN SESSIONS JUDGE::
HYDERABAD
Present: Sambasivarao Naidu, IV Addl. Metropolitan Sessions Judge, Hyderabad.
Dated this the 21ST day of September, 2015
CRIMINAL APPEAL No. 918 OF 2014
From what court this appeal is XXV Special Magistrate, Hyderabad. preferred
Number of the case in that CourtC.C.NO.61 of 2013
Number of the appealC.A.No.918 of 2014
Name and description of the 1. Gangala Jagannadham Goud, Appellant / AccusedS/o. G.Saailoo Goud, Age : Major, Occ : Employee,
2. Smt. Savithri, W/o.Gangala Jagannadham Goud, Age : Major, Occ : House wife,
Both are R/o.H.No.1-9-239, Ramnagar, Hyderabad C/o.At R/o.H.No.1-7-924/1, Ramnagar, Zamisthanpur, Hyderabad -500 044.
Name and description of the P.B. Shyam Rao, S/o.Late P.B. Bhujanga respondent / complainant:Rao, Age : 69 years, Occ : Pensioner, R/o.H.No.13-2-959, Raheempura, Hyderabad – 500 006.
The sentence and law under In the result, Accused is found guilty for which conviction was imposed in the offence u/sec.138 of NI Act and the lower courtaccused is liable for conviction U/sec.255(2) Cr.PC. Accused-1 & 2 are sentencedtoundergoRigorous Imprisonment for one year and fine of Rs.5,000/- each in default Simple Imprisonment for 3 months each for the offence punishable U/sec.138 of NI Act.
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Whether confirmed, modified or In the result, the appeal is partly Reversed, if modified the allowed. The judgment of the trial Modification:court through which the second appellant who is convicted for the offence under section 138 of NI Act is set aside. But the finding of the trial court with regard to liability of first appellant to discharge the legally enforceable, debt in favour of the respondent/ complainant is confirmed and the conviction of the first appellant (A1) for the offence under section 138 of N.I. Act is hereby confirmed. The fine amount paid by second appellant shall be returned to her after appeal time is over.
DATE OR ON WHICH
Presentation22-09-2014
Filing22-09-2014
Notice issued by the Court24-09-2014
Bail bond if appellant is let out on - - - - - bail
Appellant is ordered to be appear 23-12-2014
Hearing19-08-2015
JUDGEMENT21-09-2015
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 D. Sanjeev Kumar, Advocate for the appellant / accused and Sri P.B. Shyam Rao, Party- in-person for the Respondent / Complainant and having stood over for consideration till this day this court delivered the following:
:: J U D G E M E N T ::
1.This is a criminal appeal filed by the appellants 1 and 2 under section 374 (3) Cr.P.C challenging the judgment in CC No.61 of 2013 on the file of XXV Special Magistrate, Hyderabad whereunder the appellants herein 3 were convicted for the offence under section 138 of N.I.Act and were sentenced to undergo rigorous imprisonment for a peirod of one year and to pay fine of Rs.5,000/- each with default sentence.
2.The appellants herein were accused in the above referred calender case and the trial court having found both the appellants guilty for the offence under section 138 of N.I.act recorded the convcition against both the appellants.
3.The present appeal has been filed on the following grounds.
The trial cout did not consider the issues raised by the defence and erred in convicting the appellants. The trial court did not consider the claim of appellants that the cheque on the basis of which the case was filed was fabricated for the purpose of extracting huge money from the appellants. The respondent failed to prove the liability of the appellants under the said cheque. The respondent/complainant claimed that he has advanced a sum of Rs. 7 lakhs at one time and Rs. 3 lakhs at another time to the first appellant herein under the agreement. The second appellant was shown to be a surety and Ex.P1 the alleged mortgage is a defective document. The trial court having considered Ex.P1 convicted both the appellant and as scuh the said conviction is bad in law. The second appellant is no way concerned with the cheque in question and she is not a signatory on the cheque which is marked as Ex.P.3. When once she is not a party to the cheque, she is not liable for any conviction for the offence under section 138 of N.I.Act. The respondent filed complaint against the appellants in their individual capacity but not as a representative of any company.
The appellants further pleaded that the trial court ignored their 4 claim about serivce of legal notices under Ex.P.7 to P10. The appellants did not receive any notice said to have been issued by the respondent/ compalianant. When there was no such legal notice, they cannot be convicted for the offence under section 138 of N.I.Act. The appellants have pleaded that the trial court wrongly presumed the service of Ex.P.9 notice on the appellants but there was no such proper service of notice, thereby the appellants have claimed that their conviction is not maintainable on two grounds namely, the second appellant is not a party to the cheque in question and that there was no service of statutory notice under section 138 of N.I.Act and thereby they prayed for setting aside the judgment of the trial court and for their acquittal in the above said case.
4.As per the records recieved from the trial court, it shows that the respondent/complainant has filed a private complaint before the Chief
Metropolitan Magistrate, Hyderabad with the following averments.
He has got acquiantance with the accused and the accused have approached him in December, 2010 and sought for money towards loan to meet the marriage expenses of their daughter. They sought for a sum of
Rs.7.00 lakhs and promised that they will return the amount within one year.
They have handeover their title deeds in respect of house property bearing document no.1250 of 2007. The respondent has paid an amount of
Rs.4,00,000/- incash and arranged Rs.3,00,000/- through a cheque drawn at
Panjab National Bank, Charminar Branch, Hyderabad. The first appellant herein executed a loan agreement cum undertaking dated 03-12-2010.
About 15 days thereafter both the appellants have again approached the respondent and sought for another sum of Rs.3,00,000/-. Accordingly he has arranged the said amount by way of cash on 27-2-2011. But the 5 appellants did not repay the amount, on his several demands. The first appellant herein issued a cheque bearing No.851311 dated 11-11-2012 drawn at Syndicate Bank, Jai Sanothoshnagar colony, Habsiguda branch,
Hyderabad. The appellants have assured the respondent that they will
honour the cheque without fail and requested him to wait for their indication.
The respondent got issued a notice on 16-11-2012 and demanded the appellants to arrange money. They requested the respondent to deposit the cheque in the first week of December. Accordingly, he has deposited the cheque at Punjab National Bank, Charminar branch, Hyderabad on 6-12- 2012. But the cheque was dishonoued and returned with an endorsement that the account was "blocked". When the respondent approached the first appellant herein and informed about the dishonour of the cheque, for which the first appellant requested him to deposit the cheque on 27-12-2012 and assured him that he will honour the cheque without fail. Accordingly, the respondent has deposited the cheque again in his bank but this time also the cheque was dishonoured with an endorsement that "account dormant". As such, the respondent got issued a legal notice on 9-1-2013 demanding his money, but the notice was returned stating that there was no such person at the given address. The respondent got issued another notice on 18-1-2013 to two different addresses. But the notices were retrurned unserved and respondent claims that the appellants with a malafide intention got the notice returned. However, the notice was sent to last known address of the appellants herein thereby the respondent filed complaint which was registered as C.C.No.293 of 2013. But subsequently the case was transferred to XXV Special Magistrate, Hyderabad and re-numbered as
C.C.No.61 of 2013.
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4.The trial court has furnished copies of documents to the appellants herein and they were examined under section 251 Cr.PC and they denied the accusation. During the course of trial, the respondent himself examined as PW1 and another witness was examined as PW2 and Ex.P.1 to
P13 were marked on behalf of the respondent. The appellant did not chose to examine any witness nor marked any documents on their behalf. After conclusion of trial, the accused were examined under section 313 Cr.P.C.
After completion of trial and after hearing both parties, the trial court found the accused 1 and 2 guilty for the offence under section 138 of N.I.Act and sentenced them as stated above.
5.The counsel for the appellants challenged the very conviction against two accused for an offence under section 138 of N.I.Act. For the sake of convenience I am re-producing the finding of the trial court hereunder:
"Therefore I have no hesitation to hold the point that the complainant has dishcarge his burden where as the accused fail to rebut the presumption. In the result accused found guilty for the offence punishable
U/S 138 of N.I.Act and accused "is" liable for conviction under section 255 (2) Cr.P.C." "When the accused was questioned with regard to the quantum of sentence accused submitted that he is suffering with BP and diabeties and he is the only person to look after the welfar of the family. A2 also submitted that she is a sugar patient and both pleaded for mercy." "Heard the accused with regard to the qunatum of sentence.
Considering the facts and circumstances and the nature of the offence 7 accused "is" convicted and sentenced to undergo rigorous imprisonment for one years and fine of Rs.5,000/- each. In default simple imprisonment for 3 months for A1 and A2 each for the offence punishable punishable under section 138 of N.I.Act."
6.I have heard the counsel for the appellants. The respondent/ complainant who is prosecuting the appeal in person filed written arguments and represented that the appellants herein are liable for severe punishment.
7.Now the pont for consideration in the present appeal:
1 Whether the finding of the trial court against both the appellants for offence U/s 138 of N.I.Act is maintainable inspite of the fct that the cheque vide Ex.P.3 was issued by the first appellant alone?
2 Whether the finding of the trial court against the appellants is incorrect?
3 If so, whether the appellants are entitled to an acquittal as prayed for and if so, to what relief?
POINTS 1 TO 3 ANSWERED:
8.The complaint has been field by the respondent/complainant with an allegation that the appellants herein have committed an offence under section 138 of N.I.Act. As per the averments of the complaint and even according to the evidence of PW1, it was specifically pleaded that both the appellants have approached the respondent and sought for financial assistance to meet the marriage expenses of their daughter. The respondent claims that he has arranged the amount of Rs.7.00 lakhs on one occasion and another sum of Rs.3.00 lakhs about three months thereafter. Both the appellants have executed an agreement/undertaking and agreed to repay the amount within one year but they failed to repay the amount.
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9.It is specifically pleaded that the first appellant herein has issued
Ex.P.3 cheque to discharge the above referred debt. It may be a fact that the respondent/complainant has calimed that both the appellants herein having depositing their title deed in respect of a particular immovable property executed an agreement/undertaking vide Ex.P.1 and agreed to repay the amount within one year. However, the present case of respondent is that both the appellants herein have issued Ex.P.3 cheque. I have verified
Ex.P.3 which was issued by the first appellant herein for Rs.10.00 lakhs. The respondent has filed the complaint against both the appellants for the offence under section 138 of N.I.Act. The trial court after recieving the complaint, recorded the sworn statement of the complainant on 12-03-2013.
In the said statement, the respondent has claimed that the accused to discharge the legally enforceable debt issued a cheque for Rs.10.00 lakhs but the cheque was dishonoured due to the account was blocked. I do not know how the trial court took the case against both the appellants on file for the offence under section 138 of N.I.Act when the cheque in question was issued by the first appellant alone. Even as per section 138 of N.I.Act, the person who indischarge of legally enforceable debt issued a cheque and failed to honour the cheque inspite of statutory notice from the drawer, is liable for punishment, thereby the second appellant cannot be made liable for the punishmment under section 138 of N.I.Act. Even as per the judgment of the trial court, it shows that the entire finding is against the sole accused but at the end of the judgment, the learned Special Magistrate convicted both the appellants for the offence under section 138 of N.I.Act for which I am of the sincere opinion that it is irregularity on the part of the trial court.
The second appellant who did not issue any cheque for discharge of a debt 9 and against whom no notice was issued cannot be made liable for the punishment and as such the judgment of the trial court to that extent is not maintainable and it can be set aside. The second appellant did not commit any offence under section 138 of N.I.Act, thereby she is enttiled to an acquittal. Therefore I answer the first point in favour of the appellants and against the respondent.
POINT NO.2:
10.The respondent who is examined as PW1 has claimed that he has got acquaintance with the first appellant and out of said acquaintance, both the appellants have approached the respondent and sought for an amount of
Rs.7.00 lakhs to meet the marriage expenses of their daughter and they agreed to repay the amount within one year. Pw1 further claimed that the appellants herein have deposited the title deed of their house property and executed an agreement/undertaking in his favour. Ex.P.1 is the agreement/ undertaking dated 3-12-2010. Ex.P.2 is the original sale deed in favour of the appellants. PW1 further pleaded that again the appellants have approached him and sought for another sum of Rs.3.00 lakhs to meet expenses of the engagement function of their daughter and in order to discharge the entire liability, the first appellant has issued Ex.P.3 cheque bearing no.851311 dated 11-11-2012 drawn at Syndicate Bank, Jai
Sanothoshnagar colony, Habsiguda branch, Hyderabad. It seems that the complainant deposited the cheque for collection, it was dishonoured on two occasions, thereby PW1 got issued notice under Ex.P.4. Ex.P7 is another notice dated 9-1-2013. But both the notices were returned unserved.
11.According to the learned counsel for the appellants this Ex.P.1 is 10 in valid document since it does sign by the respondent/complainant. In fact the present complaint is not filed on the basis of the Ex.P.1, but on the basis of Ex.P.3 dishonoured cheque. It is true Ex.P.1 does not bear the signature of PW1. Ex.P.2 is the original sale deed executed in favour of the first appellant on 31-3-2007. The appellants did not explain as to how the original sale deed is in the hands of the respondent. Even though they disputed the contents of Ex.P.1, there is no serious dispute about execution of Ex.P.1. This documents can be looked into only for the collateral purpose in the aid of the contention of PW1 that in view of taking money the appellants have executed this agreement. Both the appellants have cross examined PW1 at length. In the cross examination also it was suggested that he has obtained blank cheque and filled the columns for the purpose of wrongful gain. It was also suggested to PW1 that he has obtained a blank cheque along with Ex.P.1 agreement and later he filled the columns in
Ex.P.3. The first appellant did not dispute his signature on Ex.p.3. In view of the above suggestion, it can be inferred that the appellants have executed
Ex.p.1 and deposited their title deed with PW1 and obtained sum of Rs. 10 lakhs.
12.It is true in the cross examination it was elicited from Pw1 that the marriage of daughter of appellants here in was performed in February, 2013. However, there is no explanation from these appellants as to why they have deposited their title deed with the respondent and as to what made them to execute Ex.P.1 agreement. Since there is no serious dispute about issuance of Ex.P.1 and P3, the burden is heavily on the appellants to prove that Ex.P.3 was not issued for any legally enforceable debt. However, PW1 by way of his oral evidence and also by producing Ex.P.1, P2 and P3 is able to 11 show that he lend money to the appellants. They have executed agreement in his favour and later to discharge the liability the first appellant has issued
Ex.P.3 cheque.
13.In view of the above stated circumstances, the burden is on the first appellant to explain that he did not issue Ex.P.3. But in the cross examination itself it was suggested that Ex.P.3 was also delivered to the respondent along with Ex.P.1 a loan agreement. Therefore, the presumption under section 119 and 139 of N.I.Act stands in their way. Even though PW1 was cross examined at length the appellants could not elicit anything to show that they never borrowed any amount from PW1 and they are not able to establish that there was no legally enforceable debt between them. It is true PW1 was not able to show that he has got that much amount in his custody. But when once the execution of Ex.P.1, P2 and P3 is proved, the appellants cannot escape the liability. Unless they borrowed money from
PW1, there was no necessity for the first appellant to give a cheque in favour of the respondent. During the cross examination of PW1 an admission was made by counsel for the appellants that a blank cheque was obtained along with Ex.P1 and later PW1 has filled up the blank cheque. It is settled principle of law that the entire cheque need not be filled up by the appellants/accused and when once his signature is proved the burden is heavily on the appellant to show that there was no debt between him and the respondent/PW1.
14.The appellants have pleaded that there was no service of legal notice. In fact, PW1 has marked Ex.P.4 to P7 ie., office copy of his legal notice dated 15-11-2012 and 9-1-2013. As seen from Ex.P.2 sale deed, the appellant is show to be an RTC employee and resident of H.No.1-9-237, 12
Ramnagar, Hyderabad. Ex.P.2 is sale deed that was executed in respect of house property bearing no. 1-7-924/1, at Ramnagar, Hyderabad. The respondent/complainant got issued Ex.P.4 notice to the address mentioned in the sale deed under Ex.P.2. He has issued another notice vide Ex.P7 to the address mentioned in the sale deed and he has issued another notice under
Ex.P9 to both the addresses but the said notices were unserved. In fact while filing his complaint, the respondent has furnished both the addresses and summons sent from the court were served on the appellants herein.
Therefore, the respondent is able to show that he has issued legal notices to the known addresses of the appellant but they were returned unserved. This amounts to a valid service. The first appellant cannot escape from liability on the ground that there was no proper service of notice. They did not produce any evidence to believe that they are not residing in the above stated addresses or to show that they are available in any particular place which is not mentioned in Ex.P.7 and P9 notices. Therefore, there is proper service of legal notice. The appealants who have borrowed huge amount of Rs.10.00 lakhs from the respondent herein issued Ex.P.3 cheque. But the first appellant has issued this cheque and did not chose to honour the cheque.
Therefore, the first appellant is liable for the punishment for the offence under section 138 of N.I.Act. The finding of the trial court that both the appellants are liable for punishment is incorrect. The first appellant cannot be escape the liability and I answered this point accordingly.
15.In the result, the appeal is partly allowed. The judgment of the trial court through which the second appellant who is convicted for the offence under section 138 of N.I.Act is set aside. But the finding of the trial court with regard to liability of first appellant to discharge the legally 13 enforceable debt in favour of the respondent/complainant is confirmed and the conviction of the first appellant for the offence under section 138 of
N.I.Act is hereby confirmed. The fine amount paid by second appellant shall be returned to her after appeal time is over.
Dictated to the Steno Grade-I, transcribed and typed by him,
corrected and pronounced by me in the open court on this the 21ST day of September, 2015.
Sd/- Sambasivarao Naidu,
IV ADDL. METROPOLITAN SESSIONS JUDGE:
HYDERABAD.
// T.C.F.B.O. //
SUPERINTENDENT
Copy to:-
The XXV Special Magistrate, Hyderabad. (Sending the case records in C.C.NO.61 of 2013 on the file of your court along with copy of Judgment in Crl. Appeal No.918/2014 on the file of this Court).