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IN THE COURT OF THE II-METROPOLITAN MAGISTRATE FOR
RAILWAYS, VIJAYAWADA.
Present:- Sri Shaik Meera Khasim Saheb, B.A., LL.M.,
II-Metropolitan Magistrate for Railways, Vijayawada.
Wednesday, this the 13th day of May, 2015
C.C.No.770 of 2010
Between:
Sri Venkata Durga Steel Enterprises, Rep. by its Managing Partner K.Krishna S/o. Kotaiah, Hindu, aged 50 years, Plot No.232 Iron Complex, Bhavanipuram,
Vijayawada. ...Complainant.
Vs.
Sri Boyapati Srinivasa Rao @ Raja, S/o. Rama Mohana Rao, Aged: 40 years, Viswanatha Iyyar Works at Tata Steel Co., Opp: Water Tank, B.B. Gudem, Near Gannavaram, Krishna District. … Accused.
This case coming before me on 7-05-2014 for final hearing in the presence of Sri Akula Bhaskara Rao, Sri Sultan Ahmed, Counsel for the Complainant and of Sri B. Jawaharlal David, Advocate for the Accused, upon perusing the material papers on record, on hearing both sides and having stood over for consideration till this day, the Court delivered the following :-
J U D G M E N T
The accusation levelled against the accused is that he issued three cheques bearing Nos.883440, dt.14.5.2008 for Rs.1,68,910/-; cheque No.
116767, dt.9.6.2008 for Rs.2,00,000/- and Cheque No.116768, dt.18.6.2008 for Rs.2,00,000/- drawn on ING Vysya Bank Ltd., M.G. Road,
Vijayawada Branch and the said cheques were returned unpaid due to ‘funds insufficient’ and the said three cheques were dishonoured and thereby the accused committed offence punishable U/s. 138 of
Negotiable Instruments Act.
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2. The necessary facts for disposal of the case in nutshell are stated as follows:-
The complainant is a registered firm and doing iron and steel business and that the accused purchased iron from the complainant on credit from time to time and making part payments acknowledging his debt and liability and all the transactions are duly entered in the accounts books maintained by the complainant and the accused has lastly paid
Rs.12,000/- on 12.01.2006, under receipt No.53 acknowledging his debt and liability. Later, the accused failed to pay the balance amount due along with interest at the rate of 24 % p.a., as per the trade custom and usage. Further, as per the instructions of accused, account is opened in the name of “Viswanadha Iyyar Works at Tata Steel Co.”, Gannavaram,
3. On repeated demands made by the complainant to pay the balance amount due under the above said Khata along with interest the accused issued cheques bearing Nos.883440, dt.14.5.2008 for Rs.1,68,910/-; cheque No.116767, dt.9.6.2008 for Rs.2,00,000/- and Cheque No.116768, dt.18.6.2008 for Rs.2,00,000/- drawn on ING Vysya Bank Ltd., M.G. Road,
Vijayawada Branch, towards the part payment of amount due under the above said Khata. The complainant has presented the said three cheques for collection through its banker, Tamilnadu Mercantile Bank Ltd.,
Vijayawada-1, but the said cheques were returned along with accused bankers memo dt.26.8.2008 with a specific endorsement “Funds
Insufficient.”Later, the complainant got issued a legal notice dt.1.09.2008 through registered post and certificate of post, accused received the same, but the accused did not give any reply nor paid the cheque amount to the complainant. Hence, the complainant filed this complaint U/s. 138 of Negotiable Instruments Act to punish the accused.
4. This case was originally filed on the file of I-Metropolitan
Magistrate at Vijayawada and assigned C.C.No.170/2009.
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5. During the pendency of this case, it was transferred from I-
Metropolitan Magistrate Court, Vijayawada to this court as per the proceedings of the Hon’ble Metropolitan Sessions Judge, Vijayawada in
Dis.No.4474, dt.1.11.2010 and this court renumbered the same as
C.C.No.770/2010.
6. On appearance of the accused, copies of case record furnished to the accused as per section 207 Cr.P.C., and the accused is examined u/s.251 Cr.P.C., by explaining the substance of the accusation constituting an offence punishable U/s.138 of Negotiable Instruments Act, for which he pleaded not guilty and claimed to be tried. Hence the matter was posted for trial.
7. In support of its claim, the Managing Partner of Sri Venkata Durga
Steel Enterprises i.e., Sri K.Krishna, S/o. Kotaiah got examined as P.W.1 and got marked Exs.P.1 to P.18. After closer of the complainant side evidence, the accused was examined U/s. 313 Cr.P.C., enabling him to explain the incriminating material available in the evidence of prosecution witnesses against him for which he denied the said evidence as false and adduced his evidence and himself examined as D.W.1 and no documents were marked.
8. Heard both sides.
9. Now the points that arise for consideration are –
1) Whether the complainant has proved the business transactions in between the complainant/firm and the accused in his individual capacity or on behalf of Viswanadha Iyyar Works at Tata Steel Co, Gannavaram? If so, whether the accused has to pay the debt covered under Ex.P.15 Account Copy?
2) Whether Exs.P.1 to P.3 cheques were issued by the accused to the complainant towards the existing or legally enforceable debt covered under Ex.P.15 Account copy?
3) Whether the complainant has proved the guilty of the accused for the offence punishable U/s.138 of Negotiable Instruments Act and whether the accused is liable for punishment of the same?
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10. POINTS 1 & 2:-
To prove the above case, the complainant/firm got examined one K.
Krishna as P.W.1 and got marked EXs.P.1 to P.18. Exs.P1 to P3 are the cheques dt.14.5.2006, 9.6.2008 and 18.6.2008 for Rs.1,68,910/-,
Rs.2,00,000/- and Rs.2,00,000/-, Exs.P.4 to P.6 are the return memos issued by the accused banker dt.26.8.2008, Ex.P.7 to P.9 are the debit advises issued by the complainant banker, Ex.P.10 is the office copy of the legal notice, Ex.P.11 is the C.O.P., receipt, Ex.P.12 is the certified copy of form ‘C’, Ex.P.13 is the certified copy of form ‘A’. Ex.P14 is the authorization, Ex.P.15 is the account copy, Ex.P.16 is the registered post receipt No.884, Ex.P.17 is the letter addressed to the Sub Post Master,
Civil Court Compound, Vijayawada, Ex.P.18 is the reply to the Ex.P.17 letter by the post master.
11. It is well settled proposition of law that the initial burden lies on the drawee i.e., complainant to prove that the cheque in question was issued for a legally enforceable debt or liability due to the complainant.
Once the complainant discharges from his initial burden, the onus of proof shifts on to the accused to rebut the presumption U/s 139 of N.I. Act that such cheque was not issued for legally enforceable debt or liability.
At this juncture, it is to be evaluated that whether the complainant could be discharged from his initial burden to prove that Exs.P.1 to P.3 cheques were issued for legally enforceable debt or liability.
12. To substantiate the case of the complainant, the complainant got examined its Managing Partner Sri K. Krishna as PW.1 and filed his chief affidavit, he reiterated the averments of the complaint filed by him.
According to his evidence the accused purchased iron from the complainant/firm on credit from time to time and making part payments acknowledging his debt and liability and all the transactions are duly entered in the account books maintained by the complainant and the accused has lastly paid Rs.12,000/- on 12.01.2006, under receipt No.53, acknowledging his debt and liability. Later on the accused failed to pay 5 the balance amount due, The accused is liable to pay the balance amount along with interest @ 24 % p.a., a per the trade custom and usage and further as per the instructions of accused, account is opened on the name of “Viswanadha Iyyar Works at Tata Steel Co.,” Gannavaram. On repeated demands made by the complainant to pay the balance amount the accused had issued Exs.P.1 to P.3 cheques drawn on ING Vysya Bank Ltd.,
M.G. Road, Vijayawada Branch, towards the part payment of amount due under Ex.P.15 Account copy. The complainant has presented the said three cheques for collection through its banker, Tamilnadu Mercantile
Bank Ltd., Vijayawada-1, and the said cheques were dishonoured vide
Ex.P.4 to P.6 memos dt.26.08.2008 with a specific endorsement as “Funds
Insufficient.”Later, the complainant got issued Ex.P.10 legal notice dt.1.09.2008 to the accused and he received the same and failed to pay the cheque amount. Hence, the complainant filed the complaint against the accused to punish him as per law.
13. To rebut the evidence adduced by the P.W.1, the accused has examined himself as D.W.1 and to substantiate his defence D.W.1 filed his chief affidavit, deposed in his evidence that he is not liable to pay any amount due to the complainant/firm and Viswanadha Iyyar Works at Tata
Steel Co, Gannavaram was not mentioned as a party in the complaint and further contended that there is no enforceable debt due to the complainant/firm and the complaint is barred by time and further submitted that he issued blank cheques to one M.M. Kishore as guarantor at the time of loan taken from the complainant by M.M. Kishore and
Ex.P.16 relates to Viswanadha Iyyar Works at Tata Steel Company, but not him and there is no legally enforceable debt due to the complainant/firm and he never issued cheques to the complainant. The complainant/firm filed the complaint to cause wrongful loss to him and he is not liable to pay any amount to the complainant/firm and Ex.P.15 account copy is no way concerned to him and requested the court to dismiss the complaint.
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14. As can be seen from the evidence of PW.1 and D.W.1, the admitted facts are that D.W.1 admitted that PW.1 is the Managing Partner of Sri
Venkata Durga Steel Enterprises.
15. The contention of the PW.1 is that the accused purchased iron material from the complainant/firm on credit basis and making part payments acknowledging the debt and liability and lastly he paid
Rs.12,000/- on 12.1.2006 under receipt No.53 acknowledging his debt and liability. Further, the contention of the PW.1 is that Ex.P.15 account was opened as per the instructions of the accused in the name of “Viswanadha Iyyar Works at Tata Steel Co.,” Gannavaram and the accused issued Exs.P.1 to P.3 cheques towards part payment of the debt covered under Ex.P.15 account copy and the said three cheques were dishonoured.
16. On the other hand, the contention of the defence is that D.W.1 not issued Exs.P.1 to P.3 towards discharge of debt covered under Ex.P.15 account copy, but Exs.P.1 to P.3 blank cheques were given to one M.M.
Kishore for security purpose for the debt incurred from the complainant/firm and the accused is no way concerned to the complainant/firm and he is never purchased the iron material and the complainant/firm did not file any single voucher or original ledger book
before this Court. Hence, he request the court to acquit him.
17. No doubt, there is a presumption U/s. 139 of Negotiable
Instruments Act that the cheques were issued by the accused to the complainant/firm for discharge of debt amount, the said presumption is a rebuttal one. The accused has to rebut it by placing evidence on record.
Since it is a criminal case, we cannot expect enter the accused into witness box to give his evidence in token to rebut his presumption. Even then, the accused examined as D.W.1 and adduced his evidence. The 7 accused could elicit favourble evidence during the cross-examination of the PW.1, to rebut the presumption or accused can adduce independent witness to rebut it as to consider whether the accused has rebutted the said presumption or not.
18. In this case, as stated supra the complaint/firm examined its one of the Managing Partner K. Krishna as PW.1 and got marked Exs.P.1 to P.18 and none other examined.
19. On behalf of the accused he examined as D.W.1. The evidence of
PW.1 and D.W.1 is available to the Court to scrutiny the points on hand, to come to a conclusion how far the accused is rebutted the said presumption. As per the contents of complaint and the evidence of PW.1, the accused himself purchased iron material from the complainant on credit basis and made part payments and the last payment of Rs.12,000/- was paid by the accused on 12.1.2006 and failed to pay the balance amount and the complainant opened the account in the name of “Viswanadha
Iyyar Works at Tata Steel Co.,” Gannavaram, as per the request made by the accused and that the accused had given cheques Exs.P.1 to P.3 to the complainant/firm towards discharge of said debt, the same is denied by the accused.
20. The complainant/firm/P.W.1 did not place any evidence that the accused was opened the account on the name of “Viswanadha Iyyar
Works at Tata Steel Co.,” Gannavaram as per the request made by the accused. The accused denied the transactions entered by him. The complainant/firm filed account copy i.e., loose sheets filed in the court and it was marked as Ex.P.15 by the PW.1 and Ex.P.15 did not contain the name of the accused or his signature acknowledging his debt or transactions. In fact, the complainant/firm is a registered firm and admittedly the maintaining of account books/ledgers/account sheets, day book ledger and receipt books. P.W.1 stated that Ex.P.15 account copy is 8 a loose sheet. So, Ex.P.15 is not a original or ledger or day book. PW.1 did not produce the original account of complainant/firm before the court, for verification with the account of the accused covered by Ex.P.15. No opportunity is given to the accused to cross-examine the PW.1 regarding entries mentioned in original account book of the complainant firm. So, it is fatal to the case of the complainant/firm.
21. This Court already pointed out above that Ex.P.15 copy of account relied on by P.W.1 do not contain the details of the accused, such as name or his signature to connect him with the entries or due mentioned under
Ex.P.15. It is not the case of the complainant firm that the accused issued Exs.P.1 to P.3 cheques on behalf of Viswanadha Iyyar Works at
Tata Steel Co, Gannavaram towards discharge of the debt covered under
Ex.P.15 account copy. A perusal of Exs.P.1 to P.3 cheques the three cheques were issued by the accused in his individual capacity but not represented by Viswanadha Iyyar Works at Tata Steel Co, Gannavaram.
22. It is not the case of the complainant/firm or evidence of PW.1 that the accused in his individual capacity due some amount to the complainant/firm. Moreover, no record of the firm is filed in this case showing that the accused in his individual capacity entered into transactions of purchase of iron material on credit basis and made some part payments and fell due some amount and as seen from Ex.P.15 account copy, there is no signature of the accused on it and as stated by PW.1 in his complaint that the accused made part payments acknowledging his debt liability and lastly he paid Rs.12,000/- on 12.1.2006 and acknowledged his debt and liability. A perusal of Ex.P.15 there is no endorsement of the accused or signature of the accused acknowledging the debt as stated by the PW.1 in his complaint or in his chief affidavit.
23. Here, it is a case where the accused made out his defence from the evidence of PW.1 and documents marked on their behalf and got 9 elicited favourable evidence, thereby the accused discharged the above presumption to prove that the accused is not fell due any amount in his individual capacity to the complainant/firm to consider that Exs.P.1 to P.3 cheques were issued to the accused to the complainant/firm towards discharge of legally enforceable debt. Besides that the accused himself entered into the witness box as D.W.1 and gave opportunity to the complainant/firm for cross-examination. Accordingly, D.W.1 was cross- examined by the PW.1, PW.1 did not elicit any favorable evidence during the cross-examination of D.W.1 to show that the accused in his individual capacity fell due some amount to the complainant firm and issued Exs.P.1 to P.3 cheques towards discharge of the said debt. The complainant/firm did not place any evidence except the self serving testimony of PW.1 i.e., chief affidavit of PW.1 in what way the accused is connected to
Viswanadha Iyyar Works at Tata Steel Co, Gannavaram.
24. If really, the accused purchased iron material from the complainant/firm on credit basis in the individual capacity or on behalf of
Viswanadha Iyyar Works at Tata Steel Co, Gannavaram, there should be record available with the complainant/firm, such as receipts or day book, payment vouchers, but no such record is placed by the complainant/firm for the reasons best known to the complainant/firm.
25. In this regard, the learned defense counsel relied on a decision in the case of:
M S NARAYANA MENON @ MANI V/S STATE OF KERALA
Reported in: 2006 Law Suit (SC) 504
I have gone through the above cited decision, wherein the Hon’ble
Apex Court elaborately discussed the presumptions U/s. 139 and 118
(a) of Negotiable Instruments Act and further at para No.44 drawn adverse inferences against the 2nd respondent in the above said decision and wherein he deliberately has not produced his books of 10 accounts and he had not been maintained the statutory books of accounts and other registers. In the instant case also the complainant has not produced books of accounts and the said decision is squarely applicable to the instant case and this Court also taken adverse inference against the complainant/firm, as he failed to produce original books of accounts.
26. PW.1 stated in his evidence that his accounts were audited, but no audit account copy is produced before this court. Therefore, the evidence of PW.1 remains oral version without supported by any record much less account books, vouchers, thereby, it carry no importance for consideration.
27. Even Ex.P.15 account copy is concerned, it is a criminal case, which is not based on recovery of amount and at best Ex.P.15 discloses that
Viswanadha Iyyar Works at Tata Steel Co, Gannavaram fell due to the complainant/firm but not by the accused in his individual capacity.
28. It is not the case of the complainant/firm that the accused in his individual capacity issued Exs.P.1 to P.3 cheques towards discharge of debt of Viswanadha Iyyar Works at Tata Steel Co, Gannavaram. On the other hand, the accused by himself came as witness examined as D.W.1 and placed his evidence that he issued blank cheques as a guarantor/security for the debt entered by one M.M.Kishore. It I not the case of the complainant/firm that the accused gave cheques not to discharge the debt of M.M. Kishore, in any angle mentioned so far supra the accused rebutted the presumption. Therefore, the complainant failed to produce admissible evidence to show that the accused gave Exs.P.1 to
P.3 cheques towards legally enforceable debt. On this point alone the case of the complainant is failed.
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29. P.W.1 also admitted in his cross-examination that he is getting the records audited every year and he used to mention the account of each party in a loose sheet and the defence counsel relied upon a decision reported in the case of: Central Bureau of Investigation, Appellant Vs.
V.C. Shukla and others, Respondents reported in A.I.R. 1998 Supreme
Court 1406, wherein it was held at para No.18 that “18. ‘Book’ ordinarily means a collection of sheets of paper or other
material, blank, written, or printed, fastened or bound together so
as to form a material whole. Loose sheets or scraps of paper
cannot be termed as ‘book’ for they can be easily detached and
replaced. The unbound sheets of paper in whatever quantity, though
filled up with one continuous account, are not a book of account
within the purview of Section 34.”
And further held that –
“The two spiral note books (MR 68/91 and MR 70/91) are ‘books’
within the meaning of Section 34, but notd the loose sheets of
papers contained in the two files (MR 72/91 and 73/91).”
So, in the instant case, P.W.1 filed an account copy and as admitted by
P.W.1 himself, it is a loose sheet, so it will not comes under section 34 of
Evidence Act.
30. The defence counsel also relied on another decision in the case of:
Laxminivas Agarwal, Vs. Andhra Semi Conductors Pvt., Ltd.,
Hyderabad and others, reported in 2006(1) A.L.D. (Crl.) 300 (A.P.),
Wherein the Hon’ble High Court held in para No.17 that
“17. In the instant case also this Court found on question
of fact that three cheques Exs.P-1 to P-3 were taken
only as security for prompt repayment and those cheques
were not issued by the accused towards the discharge of
any debt or other liability and further held that the
Legislature intends to punish only those who knowing fully
well that they have no amount in the bank and yet issued
any cheque in discharge of debt or liability already
borrowed/incurred which amounts to cheating and not to
punish those who could not discharge the debts borrowed
or the liability incurred on account of financial
stringency. If Section 138 of the Act can be made
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applicable to all the debts borrowed or the liability
incurred by furnishing blank cheques as security, every
borrower under a Negotiable Instrument who fails to
repay the same can be prosecuted. Merely because the
signatures in the cheques are admitted, it cannot be said
in all cases that the drawer of the said cheque is liable
for punishment under section 138 of the Negotiable
Instruments Act in the event of dishonor of those
cheques.”
31. The above decision is squarely applicable to the present facts and circumstances of the case on hand, as the Exs.P.1 to P.3 blank cheque were issued by D.W.1 to P.W.1 as a security for the loan amount of M.M.
Kishore.
32. POINT No.3:
In view of my above foregoing discussion on point Nos.1 and 2 and considering the above legal decisions, P.W.1 failed to establish that
Exs.P.1 to P.3 cheques were issued by the accused on behalf of
Viswanadha Iyyar Works at Tata Steel Co, Gannavaram towards discharge of legally enforceable debt or other liability covered under
Ex.P.15 account copy and on the other hand, Accused/D.W.1 adduced acceptable evidence and the said defence has been accepted as probable than the evidence adduced by the P.W.1/Complainant, thereby the accused is entitled for benefit of doubt.
33. In the result, the accused is found not guilty for the offence punishable u/s.138 of Negotiable Instruments Act and he is acquitted u/s.255 (1) Cr.P.C., for the said offence, the bail bonds of the accused shall stand cancelled.
Dictated to the Personal Assistant, transcribed by him, corrected
and pronounced by me in the open Court on this the 13th day of May, 2015.
Sd/- Shaik Meera Khasim Saheb,
II-Metropolitan Magistrate for Railways. Vijayawada.
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Appendix of Evidence
Witnesses Examined
For Complainant: For Defence:
PW.1: K. Krishna. DW.1: B. Srinivasa Rao.
Exhibits Marked for Complainant
Ex.P.1 14.05.2008 Ch.No.883440 for Rs.1,68,910/-. Ex.P.2 09.06.2008 Ch.No.116767 for Rs.2,00,000/-. Ex.P.3 18.06.2008 Ch.No.116768 for Rs.2,00,000/-. Ex.P.4 26.08.2008 Return Memo of ING Vysya Bank. Ex.P.5 26.08.2008 Return Memo of ING Vysya Bank. Ex.P.6 26.08.2008 Return Memo of ING Vysya Bank. Ex.P.7 26.08.2008 Debit advise. Ex.P.8 26.08.2008 Debit advise Ex.P.9 26.08.2008 Debit advise. Ex.P.10 01.09.2008 Office copy of legal notice. Ex.P.11 01.09.2008 Certificate of Posting Receipt. Ex.P.12 15.05.1997 Certified copy of Form C. Ex.P.13 15.05.1997 Certified copy of Form A. Ex.P.14 01.07.2007 Authorization. Ex.P.15 Account copy. Ex.P.16 01.09.2008 Registered post receipt No.884. Ex.P.17 Letter addressed to Sub Post Master Civil Court Compound, Vijayawada. Ex.P.18 Reply to Ex.P.17 letter by Post master.
Exhibits Marked for Defence
-N I L –
Sd/- S.M.K.S.
II M.M (Rlys.) VJA
// True Copy //
II Metropolitan Magistrate for Railways,
Vijayawada.
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CALENDAR AND JUDGMENT
IN THE COURT OF II METROPOLITAN MAGISTRATE FOR
RAILWAYS, VIJAYAWADA
C.C. 770 / 2010
Date of:
Offence : 14.05.08, 9.6.08, 18.6.08
Complaint : 20-10-2008
Apprehension of the accused : -
Commencement of Trial : 07-04-2010
Closure of Trial : 05-05-2015
Judgment : 13-05-2015
Complainant: Sri Venkata Durga Steel Enterprises, Rep. by its Managing Partner K.Krishna S/o. Kotaiah, Hindu, aged 50 years, Plot No.232 Iron Complex, Bhavanipuram, Vijayawada.
Accused: Sri Boyapati Srinivasa Rao @ Raja, S/o. Rama Mohana Rao, Aged: 40 years, Viswanatha Iyyar Works at Tata Steel Co., Opp: Water Tank, B.B. Gudem, Near Gannavaram, Krishna District.
Provision of Law: U/S.138 N.I. Act.
Finding: Found not guilty
Result: In the result, the accused is found not guilty for the offence punishable u/s.138 of Negotiable Instruments Act and he is acquitted u/s.255 (1) Cr.P.C., for the said offence, the bail bonds of the accused shall stand cancelled.
Explanation for delay:- This case was originally taken on the file by the
I-Metropolitan Magistrate, Vijayawada and numbered as C.C.No.170/2009 and subsequently this case was transferred to this court as per the proceedings of Hon’ble Metropolitan Sessions Judge, Vijayawada and the same was renumbered as present C.C.770/2010. On 17.03.2010 case 15 copies were furnished to the accused U/s.207 Cr.P.C. On 22-4-2010 the accused was examined u/s.251 Cr.P.C. The trial was commenced on 7-04- 2010 and during the course of trial, PW.1 is examined and got marked
Exs.P.1 to P.17 and complainant’s side evidence is closed on 05-5-2015. On 3-2-2012 the accused was examined U/s.313 Cr.P.C, On 7-05-2015 heard the arguments on both sides. On 13.05.2015 Judgment was pronounced.
Hence, the delay.
Sd/- Shaik Meera Khasim Saheb,
II-METROPOLITAN MAGISTRATE,
FOR RAILWAYS, VIJAYAWADA
Copy submitted to –
The Honourable Metropolitan Sessions Judge,
Vijayawada.
// True Copy //
II-Metropolitan Magistrate for Railways,
Vijayawada.