IN THE COURT OF THE SPL. JUDL. I CLASS MAGISTRATE FOR
PROHIBITION AND EXCISE, GUNTUR.
PRESENT :: SMT. Y. BINDU MADHAVI, V Addl. Junior Civil Judge,Guntur. FAC Spl. Judl. I Class Magistrate for Prohibition and Excise Court, Guntur. Tuesday, the 4th day of April, 2017.
Calendar Case No.650/2015
Between:
Bandlamudi Rosaiah, S/o Chenchaiah, 56 yrs, Hindu, 2nd line, SVN colony,
Guntur, Guntur District. ...Complainant.
AND Bondu Babu Rao, S/o Chennaiah, 58 yrs, Hindu, Prop. Sarovara Restaurant & Bar, Near Padmaja Petrol Bunk, Mangalagiri Road, Guntur, Guntur District.
... Accused.
This case is coming on 24.3.2017 before me for hearing in the presence of Sri C. Raghu Rami Reddy, learned Counsel for complainant and of Sri B. Sai Babu, learned Counsel for accused, and having stood over for consideration to this day and on, hearing both sides, this court delivers the following:
J U D G M E N T
This is a private complaint filed U/s 190 and 200 Cr.P.C by the complainant against the accused for the offence punishable U/s 138 and 142 of
Negotiable Instruments Act.
The contents of the complaint in brief are as follows:
2.The accused borrowed an amount of Rs.50,000/- and also another
Rs.50,000/- on 15.12.2011 from the complainant for the purpose of his business and also executed Promissory notes to that effect in favour of complainant. Subsequently, inspite of repeated demands made by the complainant, the accused issued two cheques bearing Nos. 003716 and 003717
dt: 7.5.2013 for an amount of Rs.50,000/- each drawn on Bank of India,
Autonagar Branch, Guntur towards the amount covered under the promissory notes. When the complainant presented the same for collection on 7.5.2013 through his banker ICICI Bank Ltd., Guntur, the same was dishonoured with an endorsement “Account Blocked” which was duly intimated to the complainant by way of a cheque return memos. Then the complainant got issued the legal notice on 30.5.2013 demanding the accused to make payment of the amount covered under the cheque within 15 days from the date of receipt of the said notice, which was returned as Intimation served on 4.6.2013.
Hence, the complaint.
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3.After recording Sworn statement, complaint was taken on file under section 138 of N.I. Act. The accused after receipt of summons appeared before this court and the copies furnished to him. He was examined under section 251 Cr.P.C.
and he denied all the allegations mentioned in the complaint and claimed to be tried.
4.On behalf of complainant, P.W.1 was examined and Exs.P1 to P9 were marked. P.W.1 Bandlamudi Rosaiah. Ex.P1 is the Original Promissory note dt:
15.12.2011 for a sum of Rs.50,000/-. Ex.P2 is the Original Promissory note dt:
15.12.2011 for a sum of Rs.50,000/-. Ex.P3 is the cheque dt: 7.5.2013, for a sum of
Rs.50,000/- issued in favour of P.W.1. Ex.P4 is the cheque dt: 7.5.2013, for a sum of Rs.50,000/- issued in favour of P.W.1. Ex.P5 is the cheque return memo dt:
10.5.2013. Ex.P6 is the cheque return memo dt: 10.5.2013. Ex.P7 is the dt:
30.5.2013 O/c of registered legal notice got issued by P.W.1 to the accused. Ex.P8 is the postal receipt dt: 30.5.2013. Ex.P9 is the Postal cover sent to the accused with acknowledgement which was returned with endorsement “intimation” on 4.6.2013.
5.Upon closure of complainants side evidence, accused was examined under Section 313 Cr.P.C., by explaining the incriminating evidence leveled against him from complainants side witnesses for which, he denied the same and reported defence evidence. On behalf of accused, D.W.1 was examined and no documents were marked. D.W.1 Dastapuram Nandi Sagar.
6.Heard arguments on both sides, perused the material on record.
7.Now the point for determination is, “Whether the complainant had proved the guilt of the accused for the offence punishable under section 138 and 142 of
Negotiable Instruments Act, 1881 beyond reasonable doubt?”
8.The evidence of P.W.1 is nothing but the replica of the contents of complaint. To prove the case against the accused under Section.138 of N.I. Act the oral testimony of P.W.1 is that the accused borrowed a sum of Rs.50,000/- and another sum of Rs.50,000/- on 15.12.2011 from him, but he failed to repay the amount. Subsequently, after repeated demands made by the complainant, the accused got issued two cheques dated. 7.5.2013 for a sum of Rs.50,000/- each, when the said cheques were presented for collection, the same were returned with an endorsement “Account Blocked”. P.W.1 got issued the legal notice on 30.5.2013 and the same was got returned by the accused on 4.6.2013 with an endorsement “intimation”.
9.To prove the guilt of the accused for the offence punishable under section 138 of Negotiable Instrument Act the complainant needs to prove:
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A) That the cheque, issued by the accused, was presented for collection within the period of its validity.
B) That the cheque was dishonored by the bank authorities for one of the reasons which attract the offence under section 138 of Negotiable Instruments Act, 1881.
C) That the drawee issued notice under section 138 of Negotiable Instruments Act, 1881 within the statutory period.
D) That the drawer received the said notice, but failed to make any payment covered by the dishonored cheque with in stipulated time as mentioned in section 138 of
Negotiable Instruments Act, 1881.
E) That the complaint was filed within the period of limitation in the court having jurisdiction.
F) A Prima facie proof that the cheque was issued in discharge of any legally enforceable subsisting debt.
10.Therefore, if all the ingredients were proved by the complainant or in other words if all the above points were answered positively in favour of the complainant and against the accused, the presumption under section 139 of
Negotiable Instruments Act, 1881 comes in to play and the burden of proving the case shifts to the accused and he has to rebut the presumption arises under section 139 of Negotiable Instruments Act, 1881 in favour of the complainant. To prove all the ingredients and to attract the provisions of 138 of Negotiable Instruments Act, 1881 the complainant adduced his evidence and the same is discussed here under points wise.
POINT A:Whether the Cheque that was issued by the accused presented for collection within the period of its validity?
11.As per the evidence of P.W.1, Exs.P3 and P4 cheques admittedly issued by the accused was presented in ICICI Bank Ltd., Guntur, and the same were returned under Exs.P5 and P6 Cheque return memos dated 10.5.2013 due to ‘Account Blocked'. Therefore, it can be safely presumed that complainant presented Exs.P3 and P4 cheque in the above said bank for collection with in the limitation period of three months from the date mentioned thereon.
POINT B:Whether the cheque was dishonored by the bank authorities for one of the reasons which attract the offence punishable under section 138 of Negotiable
Instruments Act, 1881?
12.In the present case the complainant presented the cheques for collection through his banker ICICI Bank Ltd., Guntur, and the same were returned under
Exs.P5 and P6 cheque return memos dated 7.1.2016 with an endorsement “Account Blocked”. The nomenclature mentioned in cheque return memo plays a vital role to make out the offence under section 138 of Negotiable Instruments Act, 1881. On a plain and literal reading of section 138 of Negotiable Instruments Act, 4 1881, it becomes clear that the section refers to dishonour of cheque on two grounds i.e.,
1) due to insufficiency of funds in the account to honour the cheque; and,
2) the amount of cheque exceeds the amount arranged to be paid from that account by an agreement made with the bank.
13.At this juncture learned defense counsel vehemently contended that account blocked does not come with in the ambit of section 138 N'I act. In this regard this court relied up on the decisions reported in Standard Charted Bank V
State of Maharastra and others 2016 (1) ALD 892 : 2016 (6) SCC 62 where in his lordships held that account blocked also comes with in the ambit of 138 NI Act if the accused has got the knowledge that the cheque issued would be dishonoured, the same would clearly meet the requisite test.
14. Further in a decision reported in Mrs Avneet Bedi vs Mr.Navin
Malik on 31 October, 2013 Hon'ble Karnataka High court held that
10. Admittedly on the date of return of the cheques the amount mentioned in the cheques was not available in the account. On the other hand the endorsement issued by the Bank specifies that the outstanding balance was only Rs.38,000/-. Though in the endorsement issued by the Bank it is stated as account blocked, on the face of it, there was insufficient fund in the account to honour the cheques issued to the respondents. Further at whose instance and for what reason the account was blocked is not forthcoming. Even if the account was blocked for any reason, then there was no legal impediment for the petitioner to pay the amount covered under the cheque to the respondents. It is not the case of petitioner that she had sufficient funds with her to honour the cheques and for the reason that the account was blocked, she was prevented from depositing the amount to bank account. Therefore, at this stage, I decline to accept the contention the learned counsel for the petitioner that in view of the remark contained in the endorsement issued by the Bank the same do not constitute an offence under Section 138 of the Act.
15.No doubt, it is argued by the learned Counsel for the accused that cheque in question returned unpaid for the reason 'ACCOUNT BLOCKED' and therefore according to the Learned Counsel for the accused, endorsement issued stating that 'ACCOUNT BLOCKED' does not come under the purview of Sec.138 of
NI Act. Therefore according to him, it is the officials of the bank who have blocked the account, as such accused cannot be held responsible for dishonour of the cheque. Therefore on this count, learned Counsel for the accused sought for acquittal. No doubt it is true that the cheque in question returned, unpaid for the reason 'ACCOUNT BLOCKED'. When it is alleged by the accused that bank officials 5 are responsible for dishonour of the cheque and accused is not at all held responsible for dishonour of the cheque, it is the duty of the accused to call far the bank officials to substantiate his defence that cheque was not dishonoured by the mistake of the accused. No such attempt was made by the accused. It is worthwhile to mention that even though, at the instance of the bank officials, account was blocked. It is the primary responsibility of the accused to see that cheque is
honoured when he has issued cheque after authorizing the complainant to withdraw
the amount. Merely because cheque was returned with an endorsement 'ACCOUNT
BLOCKED', it cannot be held that accused is not responsible. It is the duty of the accused to establish that on the date of the issuance of the cheque, there was amount lying in the bank account. In absence of these documents, it is difficulty to accept the suggestion that 'ACCOUNT BLOCKED' endorsement issued by the bank does not come under the purview of Sec.138 of NI Act. As such and in view of the above decisions, this arguments of the learned Counsel for the accused has no relevancy.
POINT C&D: Whether the notice as contemplated under section 138 of Negotiable
Instruments Act, 1881 was issued to the accused within the period prescribed by law? Whether the drawer received the said notice, but failed to make any payment covered by the dishonoured cheque within period provided under section 138 of
Negotiable Instruments Act, 1881?
16.In the present case the complainant presented the cheques for collection in ICICI Bank Ltd., Guntur, and the same is returned with Exs.P5 and P6 cheque return memos with an endorsement of “Account Blocked”. Later the complainant got issued a legal notice to the accused on 30.5.2013 and the same was got returned by the accused as 'intimation' and the accused failed to give reply and make any payment covered by dishonoured cheque within fifteen days from the date of receipt of the legal notice by him as contemplated under section 138 of Negotiable
Instruments Act, 1881. However it is the contention of the accused that no notice was served up on the accused and the same was stage managed by the complainant.
Per contra complainant contended that once the notice was sent to the accused and the same was returned with an endorsement ''Intimation'', the same amounts to deemed service and it is burden of the accused to prove the same.
17.In the light of the above rival contentions, the next question to be considered is whether the complainant failed to issue proper statutory notice to the accused in terms of the proviso 'b' of Section 138 of the N.I. Act as contended by the accused. For better appreciation of rival contentions, it is useful to reproduce the clauses in the proviso to Section 138 N.I.Act. Proviso to Section 138 of the N.I.
Act reads as follows:- “Provided that nothing contained in this section shall apply unless- 6
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice."
18.It is relevant to note that Chapter XVII of the N.I. Act, 1881, deals with the penalties in case of dishonour of certain cheques for insufficiency of funds or when the cheque amount exceeds the amount arranged to be paid from that account, by an arrangement made with that bank in the accounts. The caption of
Section 138 of the N.I. Act shows "Dishonour of cheque for insufficiency, etc., of funds in the account." Further, on a reading of the entire Section, it can be understood that, the clauses in the proviso to Section 138 of the N.I. Act are made as mandatory, by incorporating the words which reads "Provided that nothing contained in this section shall apply unless-"
19.Certainly, the object of issuing a notice, as contemplated under proviso
(b) of Section 138 of the N.I. Act, is to make the account holder and the drawer of the cheque, known the factum of dishonour of cheque and give him an opportunity to relieve him of his liability connected with the dishonour of such cheque in view of the penal clause of Section 138 of the N.I. Act. On realizing such facts, connected with the cheque which he issued, it is for the drawer of the cheque to make up his mind as to how the situation shall be dealt with, connected with such notice, either to dispute and contend against the proceedings contemplated or to admit the liability and take further steps to clear the liability, or to negotiate with the holder of such dishonoured cheque, etc. So, the issuance of a statutory notice, as contemplated by proviso (b) of Section 138 of the N.I. Act, is with a specific purpose.
Accordingly, the issuance of such a statutory notice is absolutely necessary and inevitable, since, if there is failure on the part of the drawer of the cheque in paying the money covered by the cheque in question within the time and in case the allegations are proved, he will be visited with civil and criminal consequences. So, giving a statutory notice as contemplated in proviso (b) to Section 138 of the N.I. Act, is an essential mandatory requirement, which should be complied with strictly.
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20.In this case admittedly the endorsement is “Intimation” and the same was addressed to the house of accused. It is the specific contention of the accused that the notice under Ex.P7 was not served upon the accused and Ex.P9 unserved returned cover clearly reveals that “'Intimation” the same was stage managed by the complainant. Ex.P7 was sent to the accused to his address. Even otherwise presuming a moment that the version of the accused has to be taken in to consideration that legal notice was not served upon him, he could appear before this court after receipt of the summons and could have attempted to show his bonafides that he is ready to discharge the amount.
21.In State of Madhya Pradesh versus Hiralal and others (1996) 7 SCC 523, Hon'ble Supreme Court has observed that when notices/letters are sent and are received back with the remarks "not available in the house", "house locked" or "shop closed" respectively, the notices should be deemed and treated to be served on the addressee.
22.Further in a decision reported in 2015 (2) ALD Crl 318 Murhyala bhushanam V Petinedi Srirama murthy and another. In para no.22 of it was held that if the notice was sent by registered post by correctly addressing the drawer of the cheque the mandatory requirement of issuance of notice in terms of sec 138 prov b of
NI act stands complied with. Then it is the drawer to rebut the presumption
about the service of notice and show that he had no knowledge that the
notice was brought to his address or that the address mentioned on the cover
was incorrect or that the letter was never tendered or that the report of the
post master was incorrect.
23.Further this court is of considered view it is pertinent to look in to the decisions reported in this regard. In the case of Indo Automobiles v. Jai Durga
Enterprises, (2008) 8 SCC 529, Hon'ble Supreme Court observed that once notice has been sent by registered post with acknowledgment due to a correct address, it must be presumed that the service has been made effective.
24.It is also pertinent to refer to Section 27 of the General Clauses Act, 1897: “27. Meaning of service by post.—Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression ‘serve’ or either of the expressions ‘give’ or ‘send’ or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.” 8
25.Honourable A.P.High Court in a decision reported in 2012(1) ALD (Crl)
166 AP in a case between G.K.Jaya Raman V.Nambur Laboratories and another
that the presumption of deemed service of notice on the accused under section 27 of
General Clauses Act is a rebuttable presumption and it is for the accused to rebut the same. In this case, the accused has taken no service of notice and the burden is on the accused to place material before the court to rebut the said presumption. In this case, the accused has not taken any steps to rebut the said presumption. Hence the said presumption would operate in favour of the complaint and it is to be treated as deemed service of notice.
26.Hon'ble Supreme Court held in the case of K. Bhaskaran v. Sankaran
Vaidhyan Balan, (1999) 7 SCC 510, as under:
“24. No doubt Section 138 of the Act does not require that the notice should be given only by “post”. Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice.” 27.Thus, if the complainant dispatches the notice by (registered) post with the correct address written on it, it can be deemed to have been served. Further more even presuming for a moment that the legal notice was not served upon the accused as contemplated U/s 138 NI Act, to show his bonafidies, the accused should within 15 days of the complainant, come forward to discharge the amount, then the liability of the accused will be discharged. But here in this case accused did not come forward with such an attempt, hence the contention of the accused cannot be taken in to consideration. In this regard this court relied upon a decision of
Hon'ble Supreme court Alavi Haji vs Palapetty Muhammed & Anr (2007) 6 SCC
555).
23. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under
Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, 9 therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under
Section 138, by ignoring statutory presumption to the contrary under
Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the #giving of notice# in the context of Clause (b) of the proviso was the same as the #receipt of notice# a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act.
28.In view of the aforesaid reasoning and the decisions, the contention of the accused that he was not served up on the statutory notice is of no merits.
Accordingly this point is answered in favour of the complainant.
POINT E:
Whether the complainant filed the complaint within the period of limitation prescribed by law in the court having jurisdiction?
29.The complainant filed this complaint before this Court on 15.7.2013 within stipulated time as required under law as the accused failed to pay the cheque amount within fifteen days after sending the notice i.e., from 4.6.2013. Further
Exs.P3 and P4 cheques were dishonored within the Jurisdiction of the court i.e.,
ICICI Bank Ltd., Guntur, Hence the complainant filed the complaint within time of the limitation before this court having Jurisdiction.
POINT F:
Whether the cheque was issued by the accused in discharge of legally enforceable debt or not?
30.To prove this aspect the complainant examined as P.W.1 and got marked Ex.P1 to P9 on his behalf. Further on careful perusal of the entire evidence on record, the accused admitted his signatures on Exs.P1 and P2 promissory notes and Exs.P3 and P4 cheques. However contended that at the time of borrowing amount, the accused gave Exs.P1 and P2 Promissory notes and Exs.P3 and P4 cheques towards security to the complainant. Though, Koya Suryanarayana he gave
Rs.1,50,000/- to the complainant in the year 2008 on behalf of accused towards full and final settlement, even then the complainant filed this complaint against the accused. Further contended that there is no legally enforceable debt subsisting between himself and accused. But to put forth the defense set by the accused, in support of the contentions of the accused, no oral or documentary evidence was 10 adduced on behalf of accused. Further to prove the contention of the accused, no iota of proof filed before the court and even the accused did not choose to give any complaint before police or before the court about the said matter. Accused did not furnish any clear picture what is the necessity for the complainant to file a case against the accused and what is the necessity for the complainant to file the present complaint when the accused never executed Exs.P1 and P2 promissory notes and never gave Exs.P3 and P4 cheques and there was no transaction between them at present. Furthermore there is no animosity attributed between the complainant and the accused. Hence the version of the accused cannot be believed which seems to be very vague and not believable. This point is further discussed at length in the succeeding paragraphs, while appreciating the evidence.
31.In general in criminal law, accused is presumed to be innocent and an un-shifted burden of proof beyond reasonable doubt is on the shoulders of the prosecution. But the offence punishable under section 138 of Negotiable
Instruments Act, 1881 is made under special enactment, wherein the mandatory presumption of law under section 118 and 139 of Negotiable Instruments Act, 1881 prescribed. Section 118-A of the Act says that there shall be a presumption until the contrary is proved 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. Section 139 of the Negotiable Instruments Act says 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 of the Negotiable Instruments Act, for the discharge, in whole or in part, of any debt or other liability. The term "cheque of the nature" referred to in Section 138 of the Negotiable Instruments Act appeared in Section 139 of Negotiable Instruments Act means any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from and out of that account for the discharge, in whole or in part, of any debt or other liability, which is returned unpaid by the bank either because the amount of money standing to the credit of that account is insufficient to
honour the cheque or that it exceeds the amount arranged to be paid from that
account by an agreement made with that bank. A conjoint reading of the three
Sections will show that whenever the drawer of the cheque is either admitted or proved his signature on the cheque, the presumption under Section 118-A of the
Negotiable Instruments Act will come into picture to say that the cheque is supported by consideration. The presumption under Section 139 of the Negotiable
Instruments Act is explanatory and supplementary to the presumption under
Section 118-A of the Act to show that the cheque was received by the holder for the discharge of debt or other liability. Therefore, this Court has to accept the 11 contention of the learned counsel for the complainant that in a case where in the signature of the drawer of the cheque is admitted or proved. Then there shall be a presumption in regard to the purpose for which the cheque was issued and the burden shall be cast upon the accused to rebut such presumption. In case of such rebuttal, the burden shall be again shifted on the complainant to prove the existence of debt or other liability for discharge of which the cheque was issued. Of course, there are a number of decisions of our Hon’ble Apex court to the effect that the evidence need to be adduced by the accused for rebutting such presumption shall not be comparable with the evidence required to be adduced on the side of the prosecution. The prosecution is expected to prove their case beyond reasonable doubt whereas the defence case can be proved by preponderance of probabilities.
32.Relating to statutory presumption is concerned this court relying on the following judgments. In a decision reported in 2001 (2) ALD (Crl) 234 (SC) between
Hiten P.Dala Vs Bratindranath Banerjee and another their Lordships reiterating the law written in AIR 1964 S.C. 575 between Banwantarai Desai Vs State of
Maharastra while dealing with the phrases ‘unless contrary is proved’ appeared in 139 of N.I. Act held that presumption has to be rebutted by proof and not by bare explanation which is merely plausible. Their Lord-ships also held “that fact is said
to be proved when existence is directly established or when upon the material
before it the Court found it is exists to be so probable that a reasonable man
would act on the supposition that it exists. Unless, therefore the explanation is
supported by proof the presumption created by the provision can not be said
to be rebutted.”
33. Further in a decision reported in 2001(2) (Crl) 824 S.C between
K.N.Beena Vs Muniyappa and another their Lord-ship reiterating the Law written in Hiten P.Dala Vs Bratindranath Banerjee and another held that “under section
139 of N.I Act the Court has to presume unless contrary was proved that
holder of cheque received the cheque for discharge in whole or in part of debt
or liability. It was further held in all complainants u/s 138 the Court has to
presume that cheque has been issued for a debt or liability. However, the
burden of proof that cheque has not been issued for a debt or liability is on the accused.”
34.In view of the above decisions, in a prosecution for the offence under
Section 138 of N.I. Act unless contrary is proved, the Court must statutorily presume;
a) that the cheque was drawn on an account maintained by the drawer with the banker,
b) that it was for the purpose of paying money to any other person out of that account; 12
c) that it was for discharge, in whole or in part, of any debt or any other liability; and
d) that it was received by the holder in discharge of any debt or any liability.
35.In the present case, it is the specific contention of the accused that accused never borrowed any amount from the complainant and there is no legally enforceable debt subsisting between him and the complainant. To prove the above contention, the accused did not adduce any evidence and reported no evidence on his behalf. But for the reasons best known to him, he did not enter into the witness box and also did not adduce any evidence on his behalf. No doubt there is no hard and fast rule that accused shall enter into the witness box and adduce his evidence.
It is settled law that if the accused could elicit the facts that no consideration was passed under Exs.P1 and P2 promissory notes and there is no legally enforcible debt between them, during the course of cross examination of PW.1, he need not enter in to the witness box and also need not adduce any defense evidence.
36.However to substantiate the contentions of the accused that though
Koya Suryanarayana, he repaid the debt of Rs.1,50,000/- to P.W.1 towards full and final settlement which was obtained by the accused from the complainant long back, none of the persons were examined before this court and no iota of proof was filed
before this court. Further there is no positive suggestion from the accused what
made the accused to keep Exs.P1 and P2 and Exs.P3 and P4 promissory notes and cheques in the hands of complainant when the entire debt amount was paid by the accused. Furthermore the important witness i.e neither the accused nor the Koya
Suryanarayana was examined by the accused before this court.
37.As discussed supra, if really the said contention is true, presuming a while that the Exs.P1 to P4 were in the custody of the complainant and that even after repayment of the amount the same were not handed over to the accused, no person would sit quite and certainly he would have informed the said fact to his bank authorities by giving instructions and also would lodge the report or would take appropriate steps. But to prove the said aspect the accused did not file any iota of evidence before this court and further no receipt showing that he lodged a complaint before the police was filed before the court. Presuming a while the version of accused is true also even after the receipt of legal notice also the accused did not take any steps against P.W.1. Even no notice was issued and no proceedings were initiated for the return of the said documents from the custody of the complainant.
Further no iota of proof to show the previous transaction between the accused and
P.W.1.
38.It is the nextly contended by the learned defence counsel that from the year 2006 till the date of examination of P.W.1, he has not filed civil suit against the accused. Further also contended that P.W.1 himself admitted that he cannot file a civil suit on the strength of Exs.P1 and P2 as the limitation was extinguished. Thus 13 contended that the time barred debt cannot be said to be the legally enforciable debt. It is true the time barred debt cannot be termed as a legally enforciable debt.
However it is to be seen whether there is limitation to file the case as on the date of the complainant. This complaint admittedly filed in the year 2013 and Ex.P1 and P2 promissory notes were executed in the year 2011, thus as on the date of filing the complainant, it is well within the limitation. Further the evidence of Pw.1 was adduced in the year 2014, thus Pw.1 might have admitted that as on the said date, he could not file the civil suit. Thus, this contention of the accused shall not be considered.
39.The learned defence counsel also contended that if really the accused is due of amounts, certainly the complainant would have lodged the civil suit. But he did not file any civil suit, that itself is suffice to show that there was no transaction between parties. In this regard this court is of view that filing the suit or initiating criminal proceedings is the exclusively prerogative of the complainant and no person can insist the complainant to choose for civil suit, since he being the dominus litis.
Further one way or the other accused admitted about the transaction with the complainant, though he contends that he repaid the entire amount through one
Koya Suryanarayana, no iota of proof filed before this court. In this regard, this court relied upon a decision reported in Pradip Tibrewal Vs State of Gujarat 1998(3)
CIVIL COURT CASES 190 (Guj.) Hon’ble court held that “It is open to the
aggrieved party to resort to either of the two or both, Pendency of dispute
before civil Court does not oust the Jurisdiction of the Criminal Court to take
cognizance of offence and issue process pursuant thereto.” The above decision is applicable to facts of the present case.
40.It is nextly contended by the learned defense counsel that there is no mention in Ex.P1 and P2 promissory notes that the amount was borrowed under the capacity of proprietor Sarovar Restaurant and Bar, where as on perusing Ex.P3 and
P4 the same were issued under the capacity of the proprietor Sarovar Restaurant and Bar but the complainant was filed in the individual capacity and not against the one who issued the cheque. It is true admittedly Ex.P1 and P2 promissory notes were executed by the accused in his personal capacity and Ex.P3 and P4 cheques were given as a proprietor of Sarovar Restaurant and bar. Further it is not the case of the accused that he was never acted as a proprietor to the said restaurant, it is his case that the same was transferred to some other person. Thus, it is clear that accused was the sole proprietor for the said Bar and Restaurant. Thus there is no legal impediment that if the accused was prosecuted in his individual capacity since he is not to be considered as a separate entity.
14
41.In this regard this court relied up on the decision of S.K. Real Estate and Ors. v. S. Ahmed Meeran II (2002) CCR 421, it is held, "Accused No. 1 is not a legal entity or juridical person and the prosecution cannot be maintained against it". Another decision was referred in the aforementioned decision, namely, N.
Vaidyanathan, etc. v. Dodla Dairy Limited, etc. I (2001) BC 458 : 1999 ILW
(Crl.) 395, wherein it is held: It is a settled position of law that the proprietorship concern by itself if not a legal entity apart from its proprietor; the proprietary concern and the proprietrix are one and the same person. His lordships further held that both proprietorship and proprietrix are one and the same and it can be put in the cause title of the complaint, while prosecuting the drawer either as proprietorship concern represented by proprietrix or the proprietor, representing the proprietorship concern, as both the things covey the same meaning.
42.P. Muthuraman v. Shree Padmavathi Finance (Regd.) I (1994) BC 165, wherein it is held "as the sole proprietary concern is not a company within the meaning of company as defined under explanation to Section 141 of the Negotiable
Instruments Act, 1881, sole proprietary concern need not be made as party in the complaint apart from the sole proprietor".
43.It is clear on a bare perusal of the section that vicarious liability can be attached by aid of Section 141 of the N.I.Act, to a person other than the signatory of the cheque, only when the entity in whose name the account is held and cheque drawn, is either a company, a firm or any other association of individuals. In the present case the cheque is drawn on an account maintained in the name not of a company, firm or any association of individuals but a proprietorship firm. It is trite law that section 141 of the N.I.Act is not attracted in case of a party which is not a corporation, company, association of individuals or firm. A Sole proprietorship firm is excluded from the purview of Section 141. In the eyes of law, a proprietorship firm is not a separate, legal and juristic entity and cannot be distinguished from its proprietor. A proprietorship firm is nothing but the proprietor. In case of a complaint against the proprietary concern, the complaint is maintainable against only the proprietor and nobody else. In this case the proprietor was made as an accused. In these circumstances, and for the foregoing reasons, no separate liability primary or vicarious can be attributed to Sarovar Restaurant and Bar. Under these circumstances, this court is of view that, the contention of the accused is of no use and is not tenable.
44.It is also contended that the said account of the Sarovar Restaurant and bar was closed long back i.e the said account was not active since 2009 and that the said Restaurant was also transferred in the name of one Srinivas Reddy, hence accused has nothing to do with the same and as such the complaint is liable to be 15 dismissed. In this regard, accused except the suggestions put forth to the complainant, he did not forth come with the relevant documents and also he did not file any iota of evidence to show that the said bar and restaurant was transferred in the name of V.Srinivas Reddy way back in the year 2011. Further on careful perusal of the record it reveals that accused is taking inconsistent pleas in the cross examination of Pw.1. At one stretch of time, it was suggested that that the Sarovar
Restaurant and Bar was in the name of one V.Srinivas Reddy since 2011 and to that effect, license was also changed. In the immediate stretch it was suggested to Pw.1 that the account of the Sarovar Restaurant was not active since 2009, further it was also suggested to Pw.1 that accused has nothing to do with the Sarovar Restaurant and Bar since 2012. Thus, if really the contention of the accused has to be taken in to consideration that the account of the said restaurant was not active since 2009 and that the license was also changed in the year 2011, how could the accused would be under the custody of said restaurant till 2012 was remained unexplained.
Furthermore it was vehemently contended by the learned defense counsel that the cheques in this case and other case are of pertaining to the year 2007 and 2008 and that complainant pressed in to service. But to substantiate the said contention of the accused, no iota of proof has been filed before this court. Further the accused suggested to Pw.1 that though he received the amounts in the year 2008, the present case was filed against the accused. But on the other stretch he contends that the accused paid an amount of Rs.1.5 lakhs through one Koya Suryanarana in the year 2012 towards full and final settlement. If really accused cleared the amount in the year 2008 itself, there is no necessity for him to again pay amounts in the year 2012 and even presuming a while, had the case of the accused is true, he would have taken the documents which are in the custody of complainant at least in the year 2012. Therefore, this contention of the accused is of no avail.
45.It is the specific contention of the accused that no consideration was passed under Exs.P1 and P2. In this regard this court relied up on First Learning
Quest Private Ltd. Vs M/s Tera Construction Private Ltd.) 2008(4) Civil Court
Cases 578 (Delhi) where in their lordships held that “The burden of proving that there was no existing debt or liability is on the accused which they have to discharge in the trial”. Furthermore accused did not deny the income source of the complainant and also did not file any iota of evidence to show how his cheque went in to the hands of the complainant, under these circumstances it is very clear that accused failed to rebut the presumption.
46. In view of the presumption under section 118-A and section 139 of N.I.
Act, comes in to play and it can be presumed that Ex.P.2 cheque was issued in discharge of legally enforceable debt and the burden shifts upon the shoulders of the accused to rebut the presumption rose under section 139 of Negotiable Instruments 16
Act, 1881. Further the burden is on the shoulders of accused/drawer of the cheque is as stated above not certainly as heavy and onerous as the initial paramount burden is on the prosecution case. But it is not sufficient to raise fanciful doubts, to give mere explanations or suggestions and there must be tangible evidence to inspire the confidence of the court.
47.Learned counsel for complainant contended that under Section 118 of
N.I. Act unless contrary is proved, it is to be presumed that Negotiable Instrument including a cheque has been made or drawn for consideration under Section 138 of
N.I. Act. The Court has to presume unless the contrary is proved that the holder of the cheque received the cheque for discharge of any holder or in part of a debt or liability. Thus, in complaints under Section.138 of N.I. Act the Court has to presume that the cheque has been issued for a debt or liability. This presumption is rebuttal.
However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.
48.As contended by the accused, there is no rebuttal evidence to disprove the case of the complainant and thereby the complainant is entitled to take advantage of the presumption under Section 118 and 139 of N.I. Act. To prove the above suggestions the accused did not file any piece of document such as accused gave cheque in connection with other money dealings between accused and complainant.
49.Further this court relied on a decision reported in 2007(2) Crimes) 318
SC between Kamala S. Vs. Vidyanadhan and another in which their Lordships held that “standard of proof in discharge of the burden in terms of Section 139 of
the N.I. Act being of preponderance of a probability, the inference thereof can
be drawn not only from the materials brought on record but also from the
reference to the circumstances upon which the accused relies upon. The
offence under section 138 of the N.I. Act can be completed only with the
concatenation of a number of the acts. Following are the acts which are the
components of the said offence. 1) Drawing of the cheque 2) Presentation of the
cheque into the Bank, 3) Returning of the cheque unpaid by the drawee bank,
4) Giving notice in writing to the drawer of the cheque demanding the payment
of the cheque amount and 5) Failure of the drawer to make payment within
fifteen days of the receipt of the notice”. Therefore in the light of above decision as and when the complainant able to prove the above said five points the offence under section 138 of Negotiable Instruments Act is completed and the burden shifts to the defendant to rebut the presumption raised under section 139 of Negotiable
Instruments Act.
50.In a decision reported in 2005 (2) A.L .D Crl. 840 A.P between Gorantla
Venkateswara rao Vs Kolla Veera Raghava rao and another their Lord-ships held- 17
“when once the signature on the demand promissory note as well as cheque
are not disputed by the accused the burden is on the accused to establish that
in what all circumstances he signed those documents and what circumstances
he gave those documents how those documents came in to possession of P.w.1
and what was necessity for P.W.1 to file the present case when there was not
borrowing money from P.W.1 to be answered by the accused”.
51.Thus, in the instant case the accused had not let in any strong evidence which would rebut the presumption drawn under section 139 of Negotiable
Instruments Act, 1881. In the light of above decisions and discussion this court is of considered view that the accused failed to put forth probable defence to rebut the presumption raised under section 139 of Negotiable Instruments Act, 1881 and on the other hand complainant proved all the essential ingredients to attract the provisions for the offence under section 138 and 142 of Negotiable Instruments Act, 1881. Under such circumstances, this Court comes to the conclusion that the accused has not made out even a prima facie case that the cheque was not issued in discharge of debt or other liability. Therefore, without any hesitation this Court holds that the accused has not rebutted the presumption raised under Section 139 of Negotiable Instruments Act, regarding the purpose for which the cheque was issued. Therefore, accused found guilty for the offence under section 138 and 142 of
Negotiable Instruments Act, 1881 and he is liable for conviction under section 255(2) Criminal Procedure Code.
52.In the result, the accused is found guilty for the offence punishable under Section 138 and 142 of Negotiable Instrument Act, accordingly, he is convicted under Section 255(2) Cr.P.C.
Directly typed to my dictation by the Personal Assistant, corrected and
pronounced by me in open Court, this the 4 th day of April, 2017.
Sd.Y. Bindu Madhavi
V Addl. Junior Civil Judge,Guntur.
FAC Spl. Judl. I Class Magistrate for Prohibition and Excise Court, Guntur.
53.The accused when questioned as to the quantum of sentence to be imposed against him, he stated that he got married and has children, he has to look after the family and children. He further submitted that if he is put in jail, his family would suffer immensely.
54.Considering nature of offence proved against the accused and as the accused deliberately issued the Exs.P3 and P4 cheque without having sufficient amount in his account, if the accused is released under Probation of Offenders Act, 18 it is nothing but traverse of justice and the very object of the legislative mandate of making bouncing of cheque will be ruined. Therefore, this court is of the view that it is a not fit case to invoke beneficial provisions of Probation of Offenders Act in favour of the accused.
55.Further our Hon’ble Apex Court in a decision reported in S.Suresh
Kumar Vs. Jagadeeshan (2002(1) ALD (Crl) 417) held that- “it should be the look
out of the trail court Magistrate that the sentence for the offence under
section 138 of Negotiable Instruments Act, 1881 should be of such a nature as
to give proper effect to the object of the legislation. No drawer of the cheque
can be allowed to take dishonor of the cheque issued by him light heartedly.
The very object of the enactment of the provisions like 138 of Negotiable
Instruments Act, 1881 would stand defeated if the sentence is flee bite in
nature. It is a different matter, if the accused is paid the amount at least
during the pendency of the case.” In view of the above decision and in the circumstances of this case, this court is of the opinion that this is not a fit case to take a lenient view.
56.Hence, the accused is sentenced to undergo Simple Imprisonment for
a period of SIX MONTHS and fine of rupees ten thousand in default, he shall
undergo for two months simple imprisonment for the offence punishable under
Section 138 and 142 of Negotiable Instrument Act. Further, accused is informed about his right of appeal before Hon’ble Sessions Court and also informed about his right to get free legal aid through Hon’ble Chairman, District Legal Services
Authority, Guntur, if he has no means.
Directly typed by the Personal Assistant to my dictation, corrected and
pronounced by me in open Court, this the 4 th day of April, 2017.
Sd.Y. Bindu Madhavi V Addl. Junior Civil Judge,Guntur. FAC Spl. Judl. I Class Magistrate for Prohibition and Excise Court, Guntur.
Appendix of Evidence
Witnesses Examined
For Complainant:For Accused
P.W.1 Bandlamudi RosaiahNone
Exhibits Marked
For Complainant:
Ex.P1 is the Original Promissory note dt: 15.12.2011 for a sum of Rs.50,000/-.
Ex.P2 is the Original Promissory note dt: 15.12.2011 for a sum of Rs.50,000/-.
19
Ex.P3 is the cheque dt: 7.5.2013, for a sum of Rs.50,000/- issued in favour of
P.W.1.
Ex.P4 is the cheque dt: 7.5.2013, for a sum of Rs.50,000/- issued in favour of
P.W.1.
Ex.P5 is the cheque return memo dt: 10.5.2013.
Ex.P6 is the cheque return memo dt: 10.5.2013.
Ex.P7 is the dt: 30.5.2013 O/c of registered legal notice got issued by P.W.1 to the accused.
Ex.P8 is the postal receipt dt: 30.5.2013.
Ex.P9 is the Postal cover sent to the accused with acknowledgement which was returned with endorsement “intimation” on 4.6.2013.
For Accused:
NIL Sd.Y.Bindu Madhavi
V Addl. Junior Civil Judge,Guntur. FAC Spl. Judl. I Class Magistrate for Prohibition and Excise Court, Guntur.
//True Copy//
V A.J.C.,Guntur. FAC. Spl. J.F.C.M., Guntur.
20
IN THE COURT OF THE SPL. JUDL. I CLASS MAGISTRATE FOR PROHIBITION
AND EXCISE, GUNTUR.
DISTRICT: GUNTUR. C.C.No.650/2015 DATES OF --------------------------------------------------------------------------------------------------------------- Offence :10.05.2013 Filing :13.01.2014 Appearance :24.02.2014 Released on bail : - Commencement of trial:24.06.2014 Closure of trial :20.12.2016 Sentence or order :04.04.2017 --------------------------------------------------------------------------------------------------------------- Explanation for the delay :- This complaint was taken on file on 13-1-15, and copies furnished to accused on 24.2.15, and on 8.5.14 accused was examined U/s.251 Cr.P.C. P.W.1 was examined on 24.6.14 and Exs.P1 to P9 were marked, Complainant side evidence closed on 8.2.16 after examining P.W.1. Accused was examined U/s.313 Cr.P.C. on 8-3-2016. Defence side evidence closed on 20.12.16. No oral or documentary evidence was adduced on behalf of accused. Heard arguments on 24.3.17 & Judgment pronounced on 4-4-2017. Hence the delay. --------------------------------------------------------------------------------------------------------------- Between: Bandlamudi Rosaiah, S/o Chenchaiah, 56 yrs, Hindu, 2nd line, SVN colony, Guntur,
Guntur District. ...Complainant.
AND Bondu Babu Rao, S/o Chennaiah, 58 yrs, Hindu, Prop. Sarovara Restaurant & Bar, Near
Padmaja Petrol Bunk, Mangalagiri Road, Guntur, Guntur District. ... Accused.
--------------------------------------------------------------------------------------------------------------- Nature of Offence :- U/s.138 and 142 of N.I.Act. Plea of accused :- Not Guilty. Finding:- Found Guilty.
SENTENCE OR ORDER:-
Accused is found guilty for the offence punishable under section 138 and 142 of Negotiable Instruments Act, 1881 and he is convicted under section 255(2) Criminal Procedure Code and sentenced to undergo Simple Imprisonment for a period of six months and fine of rupees ten thousand in default, he shall undergo for two months simple imprisonment. Further accused is informed about his right of appeal before Hon’ble Sessions Court and also informed about his right to get free legal aid through Hon’ble Chairman, District Legal Services Authority, Guntur, if he has no means.
Sd.Y.Bindu Madhavi. V Addl. Junior Civil Judge,Guntur. FAC Spl. Judl. I Class Magistrate for Prohibition and Excise Court, Guntur. Copy submitted to : The Hon’ble Chief Judicial Magistrate, Guntur.
Note:- Fine amount of Rs.10,000/- paid by the accused on 4/4/2017. Sentence suspended upto 4/5/2017 as per the orders of this court in Crl.M.P.No. /17 dt: 4/4/17 //True Copy//
V A.J.C.,Guntur. FAC. Spl. J.F.C.M., Guntur.