1
Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
APSR030001972015
IN THE COURT OF THE JUDICIAL MAGISTRATE OF FIRST CLASS
SPECIAL MOBILE COURT SRIKAKULAM
Present: SMT. CH. SRI VIDYA.
J UDICIAL M AGISTRATE OF I C LASS
SPECIAL MOBILE COURT SRIKAKULAM
Thursday, this the 6 th day of June, 2024.
CALENDER CASE NO.209/2015
Between:
Kintali Suman S/o. Venkata Ramana, aged about 24 years, Business,
Resident of P.B.N.Colony, Murapaka Village, Srikakulam District.
... Complainant.
And
1. M/s. P.Suryanarayana, represented by the Proprietor, Polaki
Suryanarayana Flat No. 203, Tirumala Residency, L.B.S.Colony,
Srikakulam Town and District.
2. Polaki Suryanarayana S/o. Bheema Rao (late), aged about 45 years, Resident of Flat No. 203, Tirumala Residency,
L.B.S.Colony, Srikakulam Town and District.
...Accused.
This Case is coming on 16-05-2024 before me for final hearing and disposal in the presence of the Sri. B.Srinivasa Satyanarayana,
Advocate for the Complainant and Sri. B.Murali Krishna, Advocate for the accused and having stood over for determination till this day, this
Court delivered the following :-
J U D G M E N T
1.The complainant filed the complaint against the accused for the offence punishable under section 138 of the Negotiable Instruments
Act, 1881, (hereinafter referred as N.I. Act for brevity).
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Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
02.The averments of the complaint in brief are that the 1st accused is the business firm rep by the proprietor 2nd accused. The 2nd accused approached the complainant and requested for loan and accordingly, the 2nd accused borrowed an amount of Rs. 1,50,000/- from the complainant on 05-08-2013 for the purpose of business development, by agreeing to repay the same together with interest @ 12% per annum, to the complainant or to his order on demand immediately. On repeated demands made by the complainant, the 2nd accused issued a cheque bearing No. 002594 dated 04-06-2014 for Rs.1,64,000/- (Rupees One Lakh Sixty Four Thousand only) of ICICI Bank,
Srikakulam branch in favour of the complainant towards payment of the above debt on behalf of the 1st accused. The said cheque was presented for collection on 16-06-2014 through his banker state bank of India, Srikakulam, but the same was returned due to
INSUFFICIENT FUNDS along with a memo dated 17-06-2014 issued by the Branch Manager, ICICI Bank, Srikakulam. The said fact was informed by the complainant to the accused and upon his request, the said cheque was presented for collection again on 20-08-2014 but the same was returned again due to INSUFFICIENT FUNDS along with the memo dated 21-08-2014 issued by the Branch Manager, ICICI
Bank, Srikakulam.
The complainant issued a registered legal notice dated 20-09- 2014 to the accused, by informing the fact of dishonour and with a demand to repay the above said debt amount. The accused received the said notice but neither gave any reply nor repaid the said amount.
Hence, this complaint is filed.
03.On perusal of the record, the I Addl. Judicial Magistrate of I
Class, Srikakulam cognizance is taken on 10-02.2015 for the offence punishable under section 138 of the N.I. Act against the accused.
Later, the case was transferred to this court as per the proceedings of the Hon’ble Prinicipal District Judge’s Court, Srikakulam vide in Dis No.
2157 dt. 14.05.2015.
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Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
04. On appearance of the accused on 05-10-2015, case copies are furnished to the accused under section 207 of the of Cr.P.C. and the accused was examined under section 251 of Cr.P.C., on 24-08-2016 explaining the substance of accusation for the offence punishable under section 138 of the N.I. Act, the accused pleaded not guilty and claimed to be tried.
05. To substantiate the case of the Complainant, the Complainant himself gave evidence as P.W.1 and Exs.P1 to P5 are marked through him. One Bratam Srinivasa Rao was examined as P.W.2 on behalf of the Complainant later basing on the memo filed by the learned
Counsel for the complainant submitting that to eschew the evidence of
P.W.2 and hence, the evidence of P.W.2 is eschewed.
06. After closure of complainant evidence, the accused is examined under section 313 Cr.P.C., explaining the incriminating evidence that has come on record through the complainant evidence, to which, the accused denied and reported he has defence evidence. However, no defence evidence was produced by the accused on several adjournments given by this court and hence, the same was treated as nil and closed.
07.Heard both parties.
08.The learned counsel for complainant submitted that the 1st accused is the business firm represented by the proprietor i.e., 2nd accused and the 2nd accused borrowed an amount of Rs.1,50,000/- from complainant and agreeing to repay the same with interest @12% per annum, and later on several demands made by the Complainant, the 2nd accused issued Ex.P1 and the same was presented by the complainant in his bank and the same was returned with endorsement i.e.,Funds Insufficient as per Exs.P2 and P3 and later the complainant got issued Ex.P4/Notice to the Accused, but the accused did not gave any reply nor paid any amount. He further argued that the 2nd accused intentionally avoided to pay the debt amount and it shows the malafied intention of the accused to avoid his liability. The learned counsel 4
Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
finally contended that the legal presumption u/s 139 N.I.Act shall be drawn in favour of complainant regarding the consideration under the cheque issued by the accused and on the other hand the accused failed to rebut the presumptions and further failed to disprove the case of complainant and hence the accused shall be convicted and sentenced.
09.The learned counsel for accused contended that there is no legally enforceable debt. Accused is a Class-I contractor and he has no necessity to the borrow amount from the complainant. He further argued that the false complaint was filed by the complainant. He further argued that the signature on the acknowledgment of legal notice is not that of the accused and the accused never received the legal notice and the complainant managed the courier services authorities and filed the same. He further argued that the complainant filed only cheque and he did not file the promissory note which is the
principal document. He further argued that amount exceeding
Rs.20,000/- must be given through Bank DD and the said transaction must be shown in Income Tax returns as per Section 269 of Income
Tax Act. He further argued that the complainant has no license for doing money lending business and only to harass the accused, this complaint is filed. He further argued that the blanks of the cheque are not filled by the accused. The complainant failed to prove the existence of the legally enforceable debt and hence presumption u/s 139 N.I.Act cannot be drawn and hence the complaint shall be dismissed.
10.Now, the point for determination is
Whether the complainant could bring home the guilt of the
accused for the offence punishable under section 138 of the
N.I. Act, beyond all reasonable doubt?
Point:-
11.In order to bring home the guilt of the Accused for the offence punishable under Section 138 of N.I. Act, it is for the Complainant to 5
Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
prove that the Accused issued a Cheque in order to discharge the legally enforceable debt and it was returned by the Banker of the
Accused for insufficient funds to honour the cheque and thereby, the
Accused committed an offence punishable under Section 138 of N.I.
Act.
12. In order to prove the same, the Complainant gave evidence as
P.W-1 by filing the chief affidavit as required under Section 145 of N.I.
Act. As per the evidence of P.W.1, the 1st accused is the business firm represented by the proprietor i.e., 2nd accused and the 2nd accused is the proprietor of the 1st accused. The 2nd accused borrowed an amount of Rs.1,50,000/- from the Complainant on 05.08.2013. As per the evidence of P.W.1 coupled with Ex.P1, on the demands made by complainant, the 2nd Accused issued the said cheque for Rs.1,64,000/- on 04.06.2014 to discharge the debt amount. As per the evidence of
P.W-1 coupled with Exs.P2 and P3, the cheque was returned on 17.06.2014 and 21.08.2014 by the Banker of the Complainant to him for insufficient funds in the account of the Accused. As per the evidence of P.W-1 coupled with Ex.P4 and P5, on receipt of Exs.P2 and
P3, he got issued the Registered Legal Notice on 20.09.2014 and it was served upon the Accused on 02.10.2014.
13.The learned Counsel for the Accused cross examined P.W.1. The entire cross examination of P.W.1 runs as follows:
Except the accused he has not lent any amount to any person. Prior to 6 months to the date of transaction, the accused asked him to lend amount. He has not obtained any document from the accused to show that he has capacity to repay the amount. He lent an amount of Rs.1,50,000/- to the accused personally.
He has not obtained any promissory note from the accused. He is earning
Rs.15,000/- per month. He has obtained two cheques from the accused. Initially, the accused given one cheque and it was bounced. Subsequently, on demand, the accused given Ex.P1 to him. The cheque bearing No.278451 issued by the accused.
14.In the cross examination, P.W-1 denied the suggestion that he has not lent any amount to the accused and that the accused also did 6
Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
not given Ex.P1 to him. But, the accused failed to explain how Ex.P1 came into the hands of the Complainant.
15.Except the above suggestion, nothing contra is elicited from the cross examination of the Complainant to disprove his evidence coupled with Exs. P1 to P5. Hence, this Court can safely draw the presumption under Section 139 of N.I. Act that the cheque under Ex.P1 was issued to discharge legally enforceable debt. Hence, as the Complainant discharged the burden of proof that lies upon him, now the onus shifts upon the Accused to prove otherwise.
16.The evidence placed on record by the complainant is apparent to show that the accused issued Ex.P1 cheque in discharge of his legally enforceable debt due to the complainant. As the complainant substantiated his case on record, it is the duty of the Court to raise presumption laid down u/s 139 N.I.Act which reads that ---
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
17.It is apparent to mention here a presumption stipulated u/s 118(a) of N.I.Act which reads that--- that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
The Hon'ble Supreme Court made it clear in several decisions that the Court shall draw legal presumption in appropriate cases much less when the fact of issue of the cheque by its drawer to the payee is placed on record. At this juncture, it is pertinent to go through the relevant observations of the Hon'ble Supreme Court made in Hiten P.
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Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
Dalal Vs. Bratindranath Banerjee; AIR 2001 SC 3897= (2001) 6
SCC 16 whereinHis Lord Shipsheld that ----
Both sections 138 and 139 require that the
Court “shall presume” the liability of the drawer of the cheques for the amounts for which the cheques are drawn. It is obligatory on court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused......... The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence shows the reasonable probability of the nonexistence of the presumed fact. (para-19)
In another decision in K.N.Beena Vs. Muniyappan AIR 2001
SC 2895 the Hon'ble Supreme Court observed in para 6 that
Section 139 deals with presumption of Law in favour of holder of the cheque. It provides that, unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque for the discharge, in whole or in part, of debt or any other liability. It is a rebuttable presumption of Law and the burden of proving that a cheque has not been issued for a debt or liability is on the accused.
In Rangappa Vs. Mohan; AIR 2010 SC 1898 the Hon'ble
Apex Court observed that the presumption mandated by section 139 8
Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
N.I.Act does indeed included the existence of a legally enforceable debt or liability.
18.With regard to the aspect of legally enforceable debt, the learned counsel for accused contended that the complainant failed to produce promissory note which is principal document and thereby failed to prove the existence of legally enforceable debt.
19.A careful perusal of the facts and circumstances, the complainant/P.W.1 admitted that has not obtained any promissory note from the accused. The complainant also did not mention neither in the complaint nor in his chief examination affidavit with regard to the execution of the promissory note by the accused at the time of borrowing amount. Hence, this contention of the accused cannot be accepted in favour of accused.
20.The accused counsel taken plea in the cross examination of
P.W.1 that the accused given Ex.P1 to his brother-in-law/Srinivasa Rao in respect of insurance policies and that the said Srinivasa Rao given
Ex.P1 to PW1 and that he filed this case. Admittedly, after receipt of
Ex.P4 the accused did not give any reply to the legal notice issued by the complainant. No doubt, the fact of non-issuing the reply or notice to complainant by itself is not a sole ground to believe that the accused committed the offence. But such facts reveal the conduct of the accused to some extent. The accused is not an uneducated person. Hence it is the general course for him to respond after he received legal notice with allegations levelled against him. But he choose to keep quiet and now he taken a plea that he gave the cheques to Srinivasa Rao in respect of insurance policies but not to the complainant. However, the said contention of the accused is not substantiated, as the said Srinivasa Rao was also not examined as a witness on behalf of the accused.
21.The another contention of the accused is that the Ex.P4/legal notice was not served to the accused and the signature on Ex.P5 /Acknowledgment is not the signature of the accused. The 9
Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
Complainant managed the courier services authorities and filed this false case against the accused. The complainant did not follow the mandatory procedure for sending of legal notice. The learned counsel
for accused taken another plea that the statutory legal notice was sent
through courier but not through Registered post, hence it is not sufficient service of notice. At this juncture it is trite to rely upon a decision of Hon'ble High Court of A.P. in Kore Gopal Vs. Jetti
Punnaiah 2004(2) ALD (Cri.) 197 wherein the Hon'ble High Court of Andhra Pradesh observed that in Sec. 138 N.I.Act, it has not specified the mode of service of legal notice. The Hon'ble High Court by holding the same relied upon a decision of Hon'ble Apex Court in
SIL Import, USA Vs. Exim Aides Silk exporters, Bangalore,
1999(2) ALD (Crl) 767. In addition to the abovesaid observations of
Hon'ble High Court of Andhra Pradesh and the Hon’ble Apex Court, it
is apparent upon going through the provisions u/s 138 N.I.Act that it does not specify particular mode of service of legal notice to drawer u/s 138 (b) of N.I.Act. The payee/complainant can select any approved modes for service of notice.
22.If really the legal notice was not served to the accused as per the contention of the accused counsel, this court observed that after filing of the complaint the court issued summons to the accused and later the accused appeared before this court on 05.10.2015, but the accused did not taken any steps with regard to the Ex.P1. Thus, the contention of the learned counsel for accused lost its relevance.
23.The evidence of complainant when read together with Ex.s P1 to
P5, the Court observed that the complainant successfully discharged his burden against the accused by way of legal evidence and presumptions laid down u/s 118 (a) and 139 N.I.Act. On the other hand, the accused failed to rebut the said presumptions, as the accused did not deny his signature on the cheque Ex. P1. Thus, the accused had failed to raise a probable defence and failed to rebut the presumption placed on him under Section 139 of the Act with cogent evidence. The plea raised by the accused regarding the non-existence 10
Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
of legally enforceable debt were found unsustainable and not tenable.
In these circumstances the Court is of the considered view that the complainant successfully proved that the accused issued Ex.P1 cheque to him in discharge of legally enforceable debt.
24.Considering the above discussed evidence, facts and circumstances of the case, the Court is of the opinion that the evidence produced by the complainant is cogent, clear and trustworthy and it was not shaken throughout the cross examination of P.W.1. In
Krishna Janardhan Bhat Vs. Dattatraya G. Hegde reported in
(2008) 2 SCC (Cri) 166 in Para No.s 22,23 and 25 the Hon'ble
Supreme Court made it clear that the accused need not be examined himself as a witness and for discharging the burden of proof placed upon him, he may rely upon the material already brought on record and the standard of proof on part of the accused is the preponderance of possibilities. However, the accused failed to probabilise his defence and he is unable to shake the material evidence placed on record by the complainant. The accused has taken several pleas in the course of discharging his burden but they were found to be untenable and unbelievable. The accused failed to substantiate his case by way of any reliable evidence. Thus, the complainant proved beyond all reasonable doubt that the accused committed the offence punishable
U/Sec.138 of Negotiable Instruments Act. Point is answered accordingly.
25.In this case Accused/A1 is M/s. P.Suryanarayana, represented by the Proprietor Accused/A2. Accused/A2 is the sole proprietor of the said company and he is having overall control of the day to day business of the company.
“Vicarious liability under Sub-Section (1) of Section 141 of the NI
Act can be pinned when the person is in overall control of the day to day business of the company or firm. Vicarious liability under Sub-
Section (2) to Section 141 of the NI Act can arise because of the director, manager, secretary, or other officer’s personal conduct, functional or transactional role, not with standing that the person was 11
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SPL.MOBILE COURT SRIKAKULAM
not in overall control of the day to day business of the company when the offence was committed. Vicarious liability under Sub-Section (2) is attracted when the offence is committed with the consent, connivance, or is attributable to the neglect on part of the director, manager, secretary, or other officer of the company”.
The accused/A2 is having the overall control of the firm and he committed the offence. The Accused/A1 and A2 are liable to punished.
26.In the result, Accused/A1 and A2 are found guilty for the offence punishable under Section 138 Negotiable Instrument Act and accordingly he is convicted under Section 255 (2) of Cr.P.C.
Typed by me on my laptop and pronounced by me in the
open Court, this the 6 th day of June, 2024.
Sd/- Smt. Ch. Sri Vidya
Judicial Magistrate of I Class,
Special Mobile Court, Srikakulam.
27.Since a company does not have a physical body, in the event of conviction, the Hon’ble Supreme court held that there is no hurdle for recovery of the covered by the sentence even from a sick company.
The relevant decision is reported in AIR 2000 SC 926-M/S.BSI Litd & Anr. Vs. Gift Holding Pvt. Litd & another. In the latest decision reported in 2012 AIR SCW 1098-CBI Vs Blue Sky Tie-up Pvt.
Ltd., it is held that while imposing substantial sentence. Court can impose fine on the corporate body besides punishing the officer in charge of the affairs of the company. Hence, quantum of sentence can be imposed against the accused/A2.
28. When the Accused/A2 is questioned about the quantum of sentence he submitted that he is having family and his entire family depends upon his earning and prayed to show lenient view against him. The counsel for accused also prayed to show lenient view against him.
29.Since the offence committed by accused/A2 is not of grave in nature and as it is a financial transaction, this court is not inclined to extend the benefit of Probation of Offenders Act or the provisions under Section 360 Cr.P.C to the accused. I considered the submissions 12
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SPL.MOBILE COURT SRIKAKULAM
made by the accused. In view of his family burden, the Court is inclined not to impose maximum sentence provided. However, if the accused is left unpunished, it may give wrong signals regarding sanctity of cheque transactions.
30.Hence, considering all these circumstances, the accused/A2 is sentenced to undergo simple imprisonment for a period of one year and also to pay cheque amount of Rs.1,64,000/- (Rupees one lakh sixty four thousand only) towards compensation to the Complainant under Section 357(3) of CrPC. In default of payment of compensation he shall undergo simple imprisonment for a period of one month.
31. IN THE RESULT, I find that the Accused/A2 is guilty for the offence Punishable under Section 138 of N.I. Act and he is convicted under Section 255(2) of Cr.P.C. Hence, he is sentenced to undergo simple imprisonment for a period of one year and also to pay cheque amount of Rs.1,64,000/- (Rupees one lakh sixty four thousand only) towards compensation to the Complainant under Section 357(3) of
CrPC . In default of payment of compensation, he shall undergo simple imprisonment for a period of one (01) month. The accused is in
Judicial Custody from 17.02.2020 to 05.12.2020 the said period is to be set off under Section 428 of Cr.P.C. The Accused is appraised about his right of appeal.A copy of judgment is furnished to the Accused at free of cost. The Accused is appraised about his right of appeal. A copy of judgment is furnished to Accused at free of cost.
Typed by me on my laptop and pronounced by me in the
open Court, this the 6 th day of June, 2024.
Sd/- Smt. Ch. Sri Vidya
Judicial Magistrate of I Class,
Special Mobile Court, Srikakulam.
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Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
Appendix of evidence
Witness examined
FOR PROSECUTION FOR DEFENCE
P.W.1:Kinthali Suman. None.
P.W.2:Baratam Srinivasa Rao (Eschewed).
Documents marked
FOR PROSECUTION :-
Ex. P1: Cheque bearing No.00259 dt.04.06.2014 drawn on ICICI Bank Limited, Srikakulam Branch for an amount of Rs.1,64,000/-
Ex.P2: Cheque return memo dt. 17.06.2014 with the reason “Funds Insufficient”.
Ex.P3: Cheque return memo dt. 21.08.2014 with the reason “Funds Insufficient”.
Ex. P4 : Office copy of Legal notice dt.20.09.2014.
Ex. P5:Courier acknowledgment, dt.02.10.2014.
FOR DEFENCE:
NIL.
MATERIAL OBJECTS:
NIL.
Sd/- Smt. Ch. Sri Vidya.
Judicial Magistrate of First Class,
Special Mobile Court, Srikaulam.
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Judgment in C.C.No.209/2015 of
SPL.MOBILE COURT SRIKAKULAM
CALENDAR AND JUDGMENT IN C.C. No. 209/2015
Calendar case tried by the Judicial Magistrate of I Class,
Special Mobile Court, Srikakulam.
Date of offence :04.06.2014
Date of filing :14.11.2014
Date of Apprehension :17.02.2020
Date of release on bail :05.12.2020
Date of commencement :15.02.2017
of trail
Date of closing of trial : 02.05.2024
Date of sentence : 06.06.2024
Explanation for delay: Delay due to the case was received from the I Additional Junior Civil Judge’s Court, Srikakulam as per the proceedings of the Hon’ble Prl. District Judge’s Court, Srikakulam communicated vide Dis No. 2157dt. 14.05.2015. Later, the Accused was appeared on 05.10.2015. The first examination was conducted on 24.08.2016. The trial was conducted from 15.02.2017 to 02.05.2024. Hence, the delay.
The Name of the Complainant :
Kintali Suman S/o. Venkata Ramana, aged about 24 years,
Business, Resident of P.B.N.Colony, Murapaka Village,
Srikakulam District.
The Name of the Accused :
1. M/s. P.Suryanarayana, represented by the Proprietor, Polaki
Suryanarayana Flat No. 203, Tirumala Residency, L.B.S.Colony,
Srikakulam Town and District.
2. Polaki Suryanarayana S/o. Bheema Rao (late), aged about 45 years, Business, Resident of Flat No. 203, Tirumala Residency, L.B.S.Colony, Srikakulam Town and District.
The offence complained of : Punishable under Section 138 of
Negotiable Instrument Act.
Offence under Section 138 of N.I.Act: The cheque issued by Accused was dishonoured on account of 15
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insufficient funds.
Finding: Found guilty.
Sentence or Order:IN THE RESULT, the Accused is found guilty for the offence Punishable under Section 138 of N.I. Act and he is convicted under Section 255(2) of Cr.P.C. Hence, he is sentenced to undergo simple imprisonment for a period of one year and also to pay cheque amount of Rs.1,64,000/- (Rupees one lakh sixty four thousand only) towards compensation to the Complainant under Section 357(3) of CrPC . In default of payment of compensation, he shall undergo simple imprisonment for a period of one (01) month.
The accused is in Judicial Custody from 17.02.2020 to 05.12.2020 the said period is to be set off under Section 428 of Cr.P.C. The Accused is appraised about his right of appeal.A copy of judgment is furnished to the Accused at free of cost. The Accused is appraised about his right of appeal. A copy of judgment is furnished to Accused at free of cost.
Sd/- Smt. Ch. Sri Vidya.
Judicial Magistrate of I Class,
Special Mobile Court, Srikakulam.
Note:
1) The period of sentence imposed against him is suspended until 05.07.2024 vide order in Crl.MP.194/2024 dated. 06.06.2024.
Copy submitted to the Hon'ble I Additional District & Sessions Judge, Srikakulam for perusal.
Copy submitted to the Hon’ble District Legal Services Authority, Srikakulam for perusal.
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