1 C.C.No.
425 of 2015, Dated:29-12-2017
IN THE COURT OF THE JUDICIAL MAGISTRATE OF I CLASS,
SPECIAL MOBILE COURT : NELLORE.
Present : Sri Shaik Atheeque Ahmad,
Judicial Magistrate of I Class,
Special Mobile Court, Nellore.
Friday, the Twenty Ninth (29th) day of December, Two thousand
and Seventeen
CALENDAR CASE No.425 of 2015
M/s Shriram City Union Finance Ltd., Rep., by its Authorized Signatory, Sd.Rafee,
S/o Khader Basha, aged 30 years, Nellore.
.. Complainant ..
-Versus-
Amarapu Sathish, s/o Raghu Ramaiah, Residing at D.No.11/253, Ashok
Nagar, Gudur, Gudur Mandal, Nellore District.
.. Accused ..
This case is coming on 26-12-2017 for final hearing before me in
the presence of Sri V.Jayarama Rao, Advocate for the Complainant
and of Sri V.Sankara Narayana, Advocate for the accused, having
stood over for consideration till this day, this Court delivered the
following:-
:: J U D G M E N T ::
This is a complaint filed on behalf of the complainant against
the accused for the offence punishable under Section 138 of Negotiable
Instruments Act (hereinafter it is referred as N.I. Act)
2. The case of the complainant is as follows:- The
complainant company is providing consumer and personal loans for
purchase of vehicles and for business to the general public. In the said
transaction, the accused availed Trade Finance of an amount of
Rs.4,00,000/- from the complainant company on 31-7-2012 by executing
the Loan Agreement bearing No.VENKGTF207310012 and agreed to
2 C.C.No.425 of 2015, Dated:29-12-2017
repay the loan amount with interest at 15.89% per annum in 36 monthly
installments at the rate of Rs.16,411/- per month and issued post dated
cheques each for Rs.16,411/- commencing from 15-8-2012 to 15-7-2015
to discharge the loan amount. Later, the accused has paid 21 full and
part of 22nd monthly installment and became defaulter. Hence, the
complainant company referred the dispute to the sole arbitrator Sri
T.Sundara Ramaiah on 15-10-2014 for a sum of Rs.2,64,779/- in
Arbitration case No.825/2014 against the accused. After knowing the
said fact, the accused approached the complainant company and issued
a cheque bearing No.090848, dated: 17-7-2015 for Rs.2,64,000/- in
favour of complainant company towards discharge of loan amount.
When the complainant company presented the said cheque for collection
on 20-7-2015 in its bank i.e., City Union Bank, Nellore, the same was
dishonoured on the ground that ‘the account of accused closed’ and
issued memo dated: 24-7-2015 to that effect. Then, the complainant
company got issued a legal notice, dated: 8-8-2015 calling upon the
accused to pay the bounced cheque amount of Rs.2,64,000/- within 15
days from the date of receipt of the notice, and the said notice was
served to him on 10-8-2015. But he did not comply the same. Thus, the
accused knowing fully well issued the above said cheque without having
sufficient funds in his bank account. Hence, the complaint.
3. This case was taken on file by my learned predecessor for
the offence punishable under section 138 of N.I. Act against the accused.
4. On appearance of the accused before this Court, copies of
the documents were furnished to him as contemplated under Section
207 of Criminal Procedure Code (herein after referred as Cr.P.C.,). The
accused was examined under Section 251 Cr.P.C., by explaining the
substance of accusation U/sec.138 of N.I. Act made against him in
3 C.C.No.425 of 2015, Dated:29-12-2017
Telugu, for which he denied the same and pleaded not guilty and
claimed to be tried.
5. On appearance of accused before this Court, the Assistant
Manager of complainant company was examined as P.W.1 and got
marked Ex.P1 to Ex.P13.
6. Ex.P.1 is the original cheque bearing No.090848, dated:
17-7-2015 for an amount of Rs.2,64,000/- drawn on HDFC Bank, Gudur.
Ex.P.2 is the Cheque return memo. Dated: 24-7-2015. Ex.P.3 is the Office
copy of legal notice, dated: 6-8-2015 along with postal receipt. Ex.P.4 is
the served postal acknowledgment card. Ex.P.5 is the notarized copy of
incorporation. Ex.P.6 is notarized copy of authorization. Ex.P.7 is the copy
of statement of account. Ex.P.8 is the certified copy of Loan application
dated: 1-7-2012 issued by sole arbitrator, Hyderabad, Ex.P.9 is certified
copy of Loan Agreement, dated: 27.7.2012 issued by Sole Arbitrator,
Hyderabad. Ex.P.10 is certified copy of promissory note, dated:
27.7.2012 issued by sole Arbitrator, Hyderabad. Ex.P.11 is certified copy
of claim Petition in Arbitration Case No.825/2014 issued by Sole
Arbitrator, Hyderabad. Ex.P.12 is certified copy of Award in Arbitration
Case No.825/2014 issued by sole Arbitrator, Hyderabad. Ex.P.13 is
certified copy of receipt, dated 27-7-2012 issued by sole Arbitrator,
Hyderabad.
7. After closure of the complainant’s side evidence, the accused
was examined under Section 313 Cr.P.C., by explaining the incriminating
material stood against him in the evidence of complainant, to which the
accused denied and reported that he has defence evidence on his
behalf. The accused got examined himself as D.W.1 and got marked
Ex.D1 to Ex.D7. Ex.D1 is the receipt, dated: 16-12-2013 issued by
Complainant Company. Ex.D2 is office copy of reply notice, dated:
4 C.C.No.425 of 2015, Dated:29-12-2017
21-8-2015 got issued by the accused to the Counsel of Complainant
Company. Ex.D3 is the served postal acknowledgment. Ex.D4 is the
served copy of notice, dated: 6-8-2015 got issued by Complainant
Company to the accused. Ex.D5 is the office copy of reply notice, dated:
29-9-2014 got issued by the accused. Ex.D6 is office copy of counter
filed by the accused in Arbitration Case. Ex.D7 is copy of written
arguments filed by the accused before the Arbitrator in Arbitration Case
No.825/2014.
8. Heard arguments on both sides. Perused the entire material
available on record.
9. The counsel for the complainant company argued that by
examining P.W.1 and got marking Exs.P1 to P13, the complainant
company has proved its case. The counsel for the complainant company
further argued that as the accused admitted his signature on Ex.P1 the
presumption U/Sec.139 of N.I. Act comes in favour of complainant
company and the burden is on the accused to rebut the said
presumption. The accused/D.W.1 in his cross-examination categorically
admitted that in Ex.P7 the payments made by him under Ex.D1 and
other payments are shown and they were deducted. This admission of
accused clearly shows that the complainant company has maintained its
accounts properly and the accused issued Ex.P1 cheque for the legally
enforceable debt due by him to the complainant company. The accused
failed to rebut the presumption in favour of complainant company and
hence the accused is liable for the offence U/Sec.138 of N.I. Act.
10. On the other hand the counsel for the accused argued that
the accused is due only Rs.1,00,220/- to the complainant company. The
accused never issued Ex.P1 cheque as claimed by the complainant
company. The complainant company filed this case basing on blank
5 C.C.No.425 of 2015, Dated:29-12-2017
signed cheque issued by the accused as security at the time he
borrowing loan from the complainant company. The accused has
rebutted the presumption U/Sec.139 of N.I. Act and the complaint is
liable to be dismissed.
11. Now the points for determination are:-
1) Whether the accused issued the Ex.P1 cheque in
favour of complainant company for discharging a
legally enforceable debt or other liability?
2) Whether the complainant company has complied
with all the legal formalities as per the provisions of
Sec.138 r/w 142 of Negotiable Instruments Act?
3) Whether the complainant company proved the case
against the accused for the offence Punishable
U/Sec.138 of Negotiable Instruments Act, 1881
beyond reasonable doubt?
12. Point No.1:- The case of the complainant company is that
the accused borrowed loan of Rs.4,00,000/- from their company and paid
some installments. As the accused failed to pay some installments the
complainant company referred the case to Arbitration and an award was
passed. On that the accused approached the complainant company and
issued Ex.P1 cheque for discharging the legally enforceable debt due to
the complainant company. When the complainant company presented
Ex.P1 in its Bank the same was dishonoured. Hence the accused is liable
for the offence U/Sec.138 of N.I. Act. To prove its case, as stated supra,
the complainant company got examined P.W.1 and got marked Exs.P1 to
P13.
6 C.C.No.425 of 2015, Dated:29-12-2017
13. The contention of the accused is that he is due only
Rs.1,00,220/- to the complainant company and he did not issue Ex.P1
cheque as stated by the complainant company. When he borrowed loan
from the complainant company, the company obtained signed blank
cheques from him as security and by using one of the cheques created
Ex.P1. To prove his contention and to disprove the case of complainant
company, the accused got examined himself as D.W.1 and got marked
Exs.D1 to D7 apart from cross-examining P.W.1.
14. A perusal of evidence on record, P.W.1 in his chief-examination
affidavit re-iterated the contents of complaint. In his cross-examination
he admitted that the complainant company referred the debt involved in
this case to Arbitration. He further admitted that they issued a notice to
the accused before referring the matter to Arbitrator. He further
admitted that the accused issued reply notice to their notice on 29-9-
2014. They filed reply notice of the accused in Arbitration Case. They
have not filed the reply notice given by the accused in this case. He
admitted that they have not filed in this case all the documents filed in
the Arbitration Case. He stated that he does not remember whether the
accused got mentioned in his reply notice that he was due only
Rs.1,00,220/- and the complainant company need not go for Arbitration
Case and he was ready to pay that amount. He further stated that he
does not know whether the complainant Company got issued any
rejoinder to the reply notice got issued by the accused. They have not
mentioned in the Arbitration Proceedings that the accused already
issued a Cheque during the pendency of Arbitration Proceedings. They
have not filed the postdated Cheques issued by the accused to them
either in the Arbitration Case or in this Case. He denied the suggestion
that by using the blank signed postdated Cheques issued by accused
they created Ex.P1. He does not remember whether the complainant
7 C.C.No.425 of 2015, Dated:29-12-2017
Company issued any receipt to the accused when he gave Ex.P1 Cheque
to them. He can't not say whether they mentioned in any proceedings
that the receipt was issued subject to realisation of Cheque. He denied
the suggestion that by using one of the postdated Cheques given by the
accused, the complainant Company created Ex.P1 to have wrongful gain
and there is no cause of action to file this case and the accused has not
committed any offence. He admitted that in Ex.P9 loan agreement there
are certain blanks. He denied the suggestion that Ex.P9 is not complete
agreement as it contains page No.15 and page No.32 and as such the
same is not valid. He denied the suggestion that the documents filed by
them are not legally valid and as such the Complaint is liable to be
dismissed. He denied the suggestion that they have not shown all the
payments made by the accused in their account statement.
15. The accused/D.W.1 deposed in his chief-examination that in
the year 2014 he received a notice from the Arbitrator basing on the
case filed by M/s Sriram City Union Finance Limited, Venkatagiri and he
sent reply notice to the said notice stating that he was due only
Rs.1,00,220/- and contested the case before the Arbitrator. But the
Arbitrator passed the Decree for Rs.2,60,000/-. He further deposed that
he has not issued a Cheque for Rs.2,60,000/- to the Complainant
Company. When he borrowed loan from Sriram City Union Finance
Company, they obtained 4 signed blank Cheques from him as security
and by using one of said cheques, they filed this Case. The complainant
company filed this case basing on blank signed cheque issued by him as
a security. Before filing this case the Complainant got issued a legal
notice to him, for which he issued a reply notice by mentioning all the
facts stating that he issued a signed blank Cheque to the Complainant
Company and some times he paid installment amounts by cash and
some times by Cheque. The amount paid by him by Cheques were
8 C.C.No.425 of 2015, Dated:29-12-2017
credited to his account, but the amount paid by him in cash is not
credited to his account. He further deposed that he paid Rs.18,000/- on
one occasion by cash, Rs.60,000/- by cash on one occasion, Rs.50,000/-
by cash on one occasion and Rs.1,00,000/- by cash on one occasion and
obtained receipts from the Complainant Company. He got marked Exs.D1
to D7 described above. In his cross-examination he admitted that in
Ex.P7 the payments made by him under Ex.D1 and other payments are
shown and they were deducted. He further admitted that the
Complainant company also filed Arbitration Case No.825/2014. He
denied the suggestion that after deducting the amount covered under
the two receipts i.e., for Rs.18,000/- and for Rs.1,00,000/- the Arbitrator
passed the Award and shown those two receipts as Exhibit B3 and B4 in
Exhibit P12. He also denied the suggestion that he issued Ex.P1 Cheque
only after knowing all the contents in Ex.P12 and thereafter only he
issued Ex.P1. He admitted that Ex.P1 contains his signature. He denied
the suggestion that he purposefully defending this case with a
contention that the Complainant company by using one of his signed
blank Cheques created Ex.P1. He has not filed any appeal or any other
case challenging Ex.P12 Award.
16. In this case the accused admitted his signature on Ex.P1. But
he is denying that he issued the same for discharging legally enforceable
debt as claimed by the complainant company. His contention is that
when he borrowed loan from the complainant company, the complainant
company obtained signed blank cheques and by using one the said
cheques the complainant company created Ex.P1. The main contention
of the accused is that he is due only Rs.1,00,220/- to the complainant
company and as such this complaint is not maintainable. When once the
accused admitted his signature on Ex.P1 cheque, presumption U/Sec.139
of N.I. Act comes in favour of the complainant company. Now the burden
9 C.C.No.425 of 2015, Dated:29-12-2017
is on the accused to rebut the said presumption. A perusal of evidence
on record, there is no dispute that the accused borrowed loan from
complainant company. In his evidence the accused stated that the
payments made by him in cash were not deducted from his account and
the entires in Ex.P7 are not correct. He also filed Ex.D1 receipt to support
his contention But in his cross-examination the accused/D.W.1
categorically admitted that in Ex.P7 statement of account, the payments
made by him under Ex.D1 and other payments were shown and they
were deducted. This admission of D.W.1 clearly establishes the
correctness of entires in Ex.P7 statement of account. Admittedly the
complainant company filed Arbitration case against the accused in
Arbitration case No.825/2014. As per the contents in Ex.P12 Arbitration
Award the said case was filed by the complainant company on
15-10-2014. The accused also contested the said case. As per Ex.P12
award the complainant company claimed Rs.2,64,779/- with future
interest. The Award was passed in favour of complainant company
directing the accused and his guarantors to pay Rs.2,64,779/- with future
interest at 10% P.A., and costs. The accused has got complete
knowledge about the arbitration proceedings as he contested the same.
The accused in his cross-examination categorically admitted that he has
not filed any appeal or any other case challenging Ex.P12 Award. It
clearly shows that the accused accepted the Award in which the
complainant company claimed Rs.2,64,779/- with interest even as on
15-10-2014. The material on record clearly proves that even as on
15-10-2014 the accused was due more than Rs.2,64,7779/- to the
complainant company, which is a legally enforceable debt. It leads to
prove beyond doubt that the Ex.P1 cheque was issued by the accused
for the amount mentioned therein i.e., Rs.2,64,000/- to discharge legally
enforceable debt and on the other hand it disproves the contention of
10 C.C.No.425 of 2015, Dated:29-12-2017
the accused. Further it is well settled principle of law that when the
cheque is returned by the bank with endorsement “Account closed” it
also attracts the offence U/Sec.138 of N.I. Act.
17. From the above discussion and in the facts and circumstances
of the case, I am of the considered opinion that the complainant
company has proved its case beyond reasonable doubt and the accused
failed to rebut the presumption U/Sec.139 of N.I. Act in favour of the
complainant company. It is established that the accused issued Ex.P1
cheque to discharge legally enforceable debt. The point is answered
accordingly in favour of the complainant company and against the
accused.
18. Point No.2:- When once it is proved that the accused issued
Ex.P1 cheque in favour of complainant to discharge legally enforceable
debt or other liability, the next question that has to be decided is
whether the complainant has followed all the legal formalities before
filing of this complaint and whether this complaint is within the
provisions laid down under Section 138 r/w 142 of N.I. Act.
19. A perusal of material on record, Ex.P1 cheque is dated:17-07-
2015. It was presented in the Bank of the complainant i.e., City Union
Bank, Nellore on 24-07-2015 as per Ex.P2. The same was returned by
the Bank of accused i.e., HDFC Bank Limited, Nellore on the same day
with an endorsement “Account Closed” as per Ex.P2. The complainant
got issued legal notice to the accused on 06-08-2015 through Registered
Post as per Ex.P3. The same was served on the accused on 10-08-2015
as per Ex.P4. The cause of action arose on 25-08-2015. The complaint
was filed in the court on 15-09-2015. Considering the dates mentioned
above and the material on record, I am of the opinion that the
complainant has followed all the legal formalities as contemplated under
11 C.C.No.425 of 2015, Dated:29-12-2017
the provisions of Sec.138 r/w 142 of N.I.Act. This point is answered
accordingly in favour of complainant and against the accused.
20. POINT NO.3:- In view of my discussion on point Nos.1 and
2 and in the facts and circumstances of the case, I am of the considered
opinion that the complainant has proved his case against the accused
for the offence U/Sec.138 of Negotiable Instruments Act, 1881 beyond
reasonable doubt. This point is answered accordingly in favour of the
complainant and against the accused.
21. In the result, the accused is found guilty for the offence
punishable U/sec.138 of Negotiable Instruments Act, 1881 and he
is convicted U/Sec.255 (2) Cr.P.C.,
Typed to my dictation by the personal Assistant, corrected and
pronounced by me in the open court on this the 29 th day of December, 2017.
Sd/-Sk.Atheeque Ahmand
Judicial Magistrate of I Class,
Special Mobile Court, Nellore.
22. Keeping in view of the nature of the offence that it is a
financial transaction and in the facts and circumstances of the case, I am
of the opinion that this is not a fit case for applying the provisions of
Sec.360 Cr.P.C., or the provisions of probation of offenders Act, 1958.
23. The accused is questioned with regard to quantum of
sentence to be imposed against him. He stated that he got wife and a
child of four months. He further stated that he is maintaining his family
by working as a painter and getting meager amount. He further stated
that if he is in jail, his family will suffer. He pleaded mercy of this court.
Considering the submissions of the accused, considering his family
conditions and in the facts and circumstances of the case, I feel that
lenient view can be taken in this case. I take lenient view.
12 C.C.No.425 of 2015, Dated:29-12-2017
24. The accused is sentenced to undergo Simple
imprisonment for a period of Six (6) months for the offence
Punishable U/sec.138 of Negotiable Instruments Act, 1881.
Further the accused shall pay an amount of Rs.2,64,000/-, being
the cheque amount, to the complainant company towards
compensation U/Sec.357(3) Cr.P.C., within two months from
today; in default of payment of compensation to undergo simple
imprisonment for a period of three (3) months.
25. The Accused was never in judicial custody in this case.
Hence set off U/Sec.428 Cr.P.C., does not arise.
26. The accused is appraised of his right of appeal and also
availability of free legal aid for the purpose of appeal.
Typed to my dictation by the personal Assistant, corrected and
pronounced by me in the open court, on this the 29 th day of December, 2017.
Sd/-Sk.Atheeque Ahmad
Judicial Magistrate of I Class,
Special Mobile Court, Nellore.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant:
P.W1: Syed Rafee.
For Accused: -
D.W.1: A.Sateesh Babu.
DOCUMENTS MARKED
For Complainant:-
Ex.P1 : Original cheque bearing No.090848, dated: 17-7-2015 for
an amount of Rs.2,64,000/- drawn on HDFC Bank, Gudur
Ex.P2 : Cheque return memo. Dated: 24-7-2015
Ex.P3 : Office copy of legal notice, dated: 6-8-2015 along with
postal receipt.
13 C.C.No.425 of 2015, Dated:29-12-2017
Ex.P4 : Served postal acknowledgment card
Ex.P5 : Notarized copy of incorporation
Ex.P6 : Notarized copy of authorization
Ex.P7 : Copy of statement of account
Ex.P8 : Certified copy of Loan application dated: 1-7-2012 issued
by sole arbitrator, Hyderabad
Ex.P9 : Certified copy of Loan Agreement, dated: 27.7.2012 issued
by Sole Arbitrator, Hyderabad
Ex.P10 : Certified copy of promissory note, dated: 27.7.2012 issued
by sole Arbitrator, Hyderabad
Ex.P11 : Certified copy of claim Petition in Arbitration Case
No.825/2014 issued by Sole Arbitrator, Hyderabad
Ex.P12 : Certified copy of Award in Arbitration Case No.825/2014
issued by sole Arbitrator, Hyderabad
Ex.P13 : Certified copy of receipt, dated 27-7-2012 issued by sole
Arbitrator, Hyderabad.
For Accused:-
Ex.D1 : Receipt, dated 16-12-2013 issued by Complainant
Company
Ex.D2 : Office copy of reply notice, dated 21-8-2015 got issued by
me to the Counsel of Complainant Company.
Ex.D3 : Served postal acknowledgment.
Ex.D4 : Served copy of notice, dated 6-8-2015 got issued by
Complainant Company
Ex.D5 : Office copy of reply notice, dated 29-9-2014 got issued by
accused
Ex.D6 : Office copy of counter filed in Arbitration Case by accused
Ex.D7 : copy of written arguments filed by accused before the
Arbitrator in Arbitration Case No.825/2014.
MATERIAL OBJECTS MARKED:- -NIL-
Sd/-S.A.A.
J.M.F.C.,
// True copy // Spl. M.C., NLR.,
Judicial Magistrate of I Class,
Special Mobile Court, Nellore.
