Sri P. Basavaraj vs D.N. Venkatachalapathy

K.N. Keshavanarayana

This appeal by the complainant is directed against the Judgment and Order dated 4.2.2006 passed by the XII Additional Chief Metropolitan Magistrate, Bangalore in C.C. No. 5168/2005 acuiitting the respondent/accused of the charge levelled against him for the offence punishable under section-138 of the N.I. Act.

The appellant filed complaint against the respondent alleging offence under section-138 of the N.I. Act infer alia contending that the accused borrowed a sum of Rs. 1,50,000/- by way of loan, agreeing to repay the same with interest at 21% per annum; that towards discharge of the said loan amount, the accused issued cheque bearing No. 959240 dated 2.11.2004 for Rs. 1,50,000/- drawn on Karnatake State Co-operative Apex Sank Limited, M.S. Building branch, Vidhana Veedhi, Bangalore; that when the said cheque was presented for encashment, the same was returned unpaid with banker''s endorsement, insufficient funds''; thai the complainant caused legal notice on the respondent/accused and though the said notice was received by the accused, he has failed to pay the amount covered under the cheque, thereby he is guilty of the offence under section-138 of the N.I Act

On his appearance before the learned Magistrate, the accused pleaded not guilty for the accusation made against him and claimed to be tried. The defence of the accused was that in order to meet his urgent legal necessity, he borrowed a sum of Rs. 1,50,000/- from the complaint on 10.11.2003, which was paid through a cheque issued by the complainant and as security for the repayment of the said loan the complainant got executed a nominal registered agreement of sale in respect of the house property agreeing to sell the property for a nominal value of Rs. 4,50,000/- and on the same day, the complainant also received the cheque in question mentioning the amount of Rs. 1,50,000/- and subsequently the said cheque has been misused by the complainant. It is his further defence that he repaid in all a sum of Rs. 1,62,000/- towards the loan received by him from the complainant in respect of which an areement has been executed and inspite of the same, the complainant instead of returning the cheque, presented the same for encashment. According to the accused he has not received loan of Rs. 1,50,000/- as seated in the complaint nor the cheque in question was issued for discharge of any such debt or liability.

The learned Magistrate after recording the evidence adduced by the parties and an assessment of oral and documantary evidence, by the judgment under appeal acquitted the accused holding that thecomplainant has failed to prove thet the cheque in question was issued for discharge of the debt and that the evidence placed by the accused clearly establishes that the complainant is a money lender without licence, therefore he is not entitled to invoke the provisions of section-138 of the N.I. Act in respect of the cheque in question.

Being aggrieved by the said judgment of acquittal, the appellant is in appeal before this Court I have heard the learned counsel for the appellant as well as the learned counsel for the respondent Perused the records.

It is an admitted fact that on 10.11.2003 an agreement of sate without possession as per the original of Ex. P9 came into existence between the complainant and the accused in respect of a residential house property bearing No. 59, 3rd ''A'' Main Road, Ramaiah lay-out, Corporation Division Ward No. 69, Bangalore, owned by the accused, thereunder the accused agreed to sell the property for a consideration of Rs. 4,50,000/- and received advance amount of Rs. 1,50,000/- by means of cheque bearing No. 690835 drawn on Bank of Barods, Srinivasanagar branch, Bangalore. As per the terms of this agreement, the transaction should be completed within a pariod of six months from the date of the agreement.

As noticed supra, it is the case of the complainant that the accused borrowed a sum of Rs. 1,50,000/-- from him and for the discharge of the said amount, the cheqes in question dated 2.11.2004 was issued, In the complaint, the complainant has not mentioned as to on what date the ban amount of Rs. 1,50,000/- was givem to the accused. In the examination-in-chief filed by way of affidavit also the complainant has not stated as to the date on which the loan amount was paid. In the cross-examination, PW-1 has stated that the loan amount was paid during March-2004. In the absence of any pleadings and assertions in the evidence, this answer in the cross-examination cannot ha the basis to hold that the complainant lent a sum of Rs. 1,50,000/- to the accused during March-2004. The complainant is not able to give the date on which the loan was paid, chough according to him it was paid during March-2004. In this connection, it is necessary to note that as per the agreement Ex.P9, the total consideration was Rs. 4,50,000/-, out of which Rs. 1,50,000/- had been paid leaving balance of Rs. 3/00,000/-, The time for completion of the transaction was to expire only on 10.5.2004. If according to the complainant, the loan was advanced in March-2004, as on that date the accused was to get a sum of Rs. 3,00,000/- from the complainant towards the balance sate consideration as per the agreement. When the accused was entitled to get balance amount of Rs. 3,00,000/- from the complainant as per the terms of the agreement, it is not forthcoming as to why he should ask for a loan of Rs. 1,50,000/-. Therefore the say of the complainant that the loan amount of Rs. 1,50,000/-was paid during March-2004 is highly absurd and unnatural. This circumstance substantiates the defence theory that at the time of availing the loan of Rs. 1,50,000/- on 10.11.2003 and executing the agreement as security document, the complainant also received the cheque in question as security, There was no need or occasion for the accused to request for e loan during March-2004 when he was entitled to get Rs. 3,00,000/- as per the terms of the agreement. At this stage it is necessary to note the answer elicited in the cross- examination of PW-1 which reads as under:

From the above evidence, it is clear that even the agreement said to have been executed by the accused was towards the loan of Rs. 1,50,000/- advanced fry the complainant. As per the contents of Ex. P9, Rs. 1,50,000/-was paid by way of cheque, From this, it is clear that the complainant knows that the substantial amount of Re, 1,50,000/- is required to be paid by means of cheque only. However according to the complainant, the loan of Rs. 1,50,000/- was paid by way of cash Section-269(ss) of the Income Tax Act directs that no person shall take or accept from any other person any loan or deposit exceeding Rs. 20,000/- otherwise than by an account payee cheque or account payee bank draft. From the evidence of PW-1 extracted a above, it is clear that the complainant while tending loan of Rs. 1,50,000/-, got an agreement of sale as security. He paid the amount by way of cheque. If that is so, it cannot be believed that the very complainant paid loan amount of Rs. 2,50,000/- by way of cash even without obtaining any contemporary documents to evidence the lending of substantial amount of Rs. 1,50,000/-

The learned counsel for the appellant vehemently contended that from the very defence of the accused, it is clear that accused has admitted the receipt of loan and since he has failed to prove the discharge, the Court below is not justified in acquitting the accused. I find no substance in this contention. If the suggestion put to PW-1 in the cross-examination and the evidence of DW-1 read as a whole, it is clear that it is the defence of the accused that he received only a loan of Rs. 1,50,000/- by means of cheque issued by the complainant as mentioned in the agreement Ex. P9 and on the same day as security, the cheque in question was also given to the complainant and towards that loan transaction, he repaid Rs. 1,62,000/-,The reading of the entire evidence on record does not indicate that the accused at any point of time admitted the receipt of ban of Rs. 1,50,000/- in addition to the amount received by him as per the agreement Ex.P9. Therefore it cannot be that the discharge pleaded by the accused was towards the loan purported to have been given by the complainant to the accused. In the absence of any documentary evidence to show that the complainant had tent a sum of Rs. 1,50,000/- apart from the amount covered under Ex.P9, the defence of the accused that the cheque in question was given to the complainant as security in addition to the agreement Ex.P9 is highly probable. Therefore the presumption under section-139 of the N.I. Act stood rebutted. The learned Magistrate Saving regard to the various documents produced by the accused has recorded a finding that the complainant is a money tender and he has been doing money lending activities without obtaining the licence which is prohibited as per the provisions of the Karnataka Money Lenders Act, as such, he is not entitled to invoke the provisions of Section-138 of the N.I. Act. Without going to the correctness of the said finding, in view of the above discussion I am of the considered opinion that the conclusion reached by the teamed Magistrate that the complainant has failed to prove the chargs levelled against the accused is sound and reasonable having regard to the facts and circumstances of the case.

Therefore the Judgment of acquittal recorded by the learned Magistrate; does not call for interference by this Court. The question as to whether the accused has repaid the sum of Rs. 1,62,000/- as sought to he contended by him will have to be considered by the Civil Court before which the suit said to have been filed by the complainant herein for relief of specific performance is pending. The said aspect cannot be considered in this case since it is not the case of the complainant that the cheque in question was issued for repayment of the amount covered under the agreement Ex. P9. But on the other hand the specific case of the complainant is that there was a loan transaction apart from the transaction under Ex. P9. Therefore I find no ground to interfere with this judgment of acquittal recorded by the learned Magistrate. Hence the appeal is dismissed.