Bangalore District Court
Sri. Venugopal.K vs Sri. Ashok Kumar H.S on 4 December, 2020
1
C.C.No.941/2019 J
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 4th day of December, 2020
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.941/2019
Complainant : Sri. Venugopal.K,
S/o. D.M.Kesavean,
Aged about 39 years,
R/at No.39,
Rajeev Gandhi Road,
Naidu Layout, Jaraganahalli,
Bengaluru 78.
(By Sri. Govinda H.G, Adv.,)
Vs
Accused : Sri. Ashok Kumar H.S,
Aged about Major,
Door No.157,
Sree Lakshmi Nilaya,
Dr. Ambedker Colony,
Yediyur, K.R. Road,
Bengaluru 560 028.
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C.C.No.941/2019 J
And also
Sri. Ashok Kumar H.S,
Aged about Major,
Haridasanahalli ( Village)
K.B.Cross Road,
Turuvekere Taluk,
Tumkur District 572227.
(By Sri.D.Harish Kumar., Adv.,)
Case instituted : 10.12.2018
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of order : 4.12.2020
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he and the accused are friends since long time and both were working in same office and he is a 3 C.C.No.941/2019 J plumbing contractor and accused is working as driver in the said office and on 20.8.2016 the accused approached and requested him for hand loan amount of Rs.15 Lakhs to discharge his liabilities and to purchase the agricultural land in Turuvekere Village, accordingly he paid sum of Rs.10 Lakhs on 27.8.2016 by way of cash to the accused and at the time of receiving the the said loan amount accused agreed to repay the said sum of Rs.10 Lakhs on or before 30.2.2017. The complainant further contends that, the accused did not repaid the said loan amount inspite of his approach and requests on several times but the accused went on postponing the same on one pretext or the other, finally the accused issued cheque bearing No. 204049 for Rs.10 lakhs, dt: 20.10.2018 for loan amount, drawn on State Bank of India, Jayanagar West, K.R.Road Branch, Bengaluru, in his favour and as per the instructions of the accused, he has presented the said cheque for encashment on 26.10.2018 through his banker i.e. Indian Overseas Bank, Jayanagar West, Bengaluru K.R. Road branch, 4 C.C.No.941/2019 J Bengaluru but the said cheque came to be returned dishonoured as "Payment Stopped by Drawer" from his banker with memo dt; 30.10.2018 and accused has failed to arrange for sufficient funds in his account for due to encashment for the cheque, thereafter he got issued legal notice on 12.11.2018 to the accused through RPAD calling upon him to repay the loan amount within 15 days from the date of receipt of the said notice and the said notice has been duly served on the accused on 13.11.2018 for which accused sent reply notice dt:16.11.2018 to him and has not complied the terms of his notice. Hence he has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
3. Before issuing process against the accused, the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments made in the complaint. In support of his evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to P.14 i.e, Original Cheque 5 C.C.No.941/2019 J dt: 20.10.2018 is as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Challan as per Ex.P.2, Bank Memo as per Ex.P.3, the office copy of Legal Notice as per Ex.P.4, postal receipts as per Ex.P.5 & P.6 respectively, Postal acknowledgement as per Ex.P.7, Reply Notice as per Ex.P.8, Statements of Accounts as per Ex.P.9 & P.10 respectively, relevant entry dt: 26.8.2016 as per Ex.P.9(a), returned legal notice as per Ex.P.11, postal envelope as per Ex.P.12, postal receipt as per Ex.P.13, Complaint as per Ex.P.14, signature of the complainant as per Ex.P.14(a).
4. Primafacie case has been made out against the accused and summons was issued against the accused in turn has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
5. As per the direction of the Hon'ble Apex 6 C.C.No.941/2019 J Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the Accused, as he intended to set out his defence, then the case was posted for crossexamination of the complainant.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence subsequently the Accused has examined as DW.1 and he has produced letter dt:
17.6.2019 issued by SBI bank which is marked as Ex.D.1 and closed his side.
7. Heard by learned counsel for the complainant and the Accused and perused the written arguments submitted by the learned counsels for the complainant and the accused and also the decisions relied upon by the learned counsels for the complainant i.e., 1) Crl. Appeal No.371/2020 in case of APS Forex Services Pvt. Ltd., Vs. Shakti 7 C.C.No.941/2019 J International Fashion Linkers and Ors., 2) AIR 2019 SC 1983 in case of Basalingappa Vs. Mudibasappa; 3) (201) 13 SCC 375 in case of Laxmi Dyechem Vs. State of Gujarat and Ors., and the accused has relied upon the decisions i.e.,
1) 2001 KCCR 437 2) 2006 KCCR 1779; 3) ILR 2008 Karnataka High Court 4629 4) 2011(5) KCCR 4223; 5) DCC Andhra Pradesh High Court page 231; 6) DCC Andhra Pradesh high Court page 600; 7) 2013(1) DCR 390 Kerala High Court, 8) 2010 (4) Civil C.J. Page 670; 9) 2010(5) KCCR.SN 435, page 455; 10) 2010 (4) Civil C.J.Page 670 on his behalf.
8. On the basis of complaint, evidence of complainant and accused and documents the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued cheque bearing No.204049 dated:
20.10.2018 for Rs.10,00,000/ 8 C.C.No.941/2019 J drawn on State Bank of India, Jjayanagar West, K.R.Road, Bengaluru to discharge legally recoverable debt to the complainant and when the complainant has presented cheque for encashment through his banker but the said cheque has been dishonoured for the reasons "Payment Stopped by Drawer" on 30.10.2018 and the complainant issued legal notice to the accused on 12.11.2018 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
9. The above points are answered as under:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
..
REASONS
10. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it 9 C.C.No.941/2019 J is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act presupposes conditions for prosecution of an offence which are as under:
1. Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
2. Cheque shall be presented for payment 10 C.C.No.941/2019 J within specified time i.e., from the date of issue before expiry of its validity.
3. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
4. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer in respect of bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
11. It is also one of the essential ingredient of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 presumption shall 11 C.C.No.941/2019 J be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and are rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
12. In the present case the complainant in his complaint and affidavit evidence has testified that, he and the accused are friends since long time and both were working in same office and he is a plumbing contractor and accused is working as driver in the said office and on 20.8.2016 the accused approached and requested him for hand loan amount of Rs.15 Lakhs to discharge his 12 C.C.No.941/2019 J liabilities and to purchase the agricultural land in Turuvekere Village at his request he paid sum of Rs.10 Lakhs on 27.8.2016 by way of cash to the accused and at the time of receiving the the said loan amount accused agreed to repay the said sum of Rs.10 Lakhs on or before 30.2.2017. The complainant/PW.1 further testified that, the accused did not repaid the said loan amount inspite of his approach and requests on several times but the accused went on postponing the same on one pretext or the other, finally the accused issued cheque bearing No. 204049 for Rs.10 lakhs, dt: 20.10.2018 for loan amount, drawn on State Bank of India, Jayanagar West, K.R.Road Branch, Bengaluru i.e.,, Ex.P.1 in question in his favour and as per the instructions of the accused, he has presented the said cheque for encashment on 26.10.2018 through bank challan ie. Ex.P.2 through his banker i.e. Indian Overseas Bank, Jayanagar West, Bengaluru K.R. Road branch, Bengaluru but the said cheque came to be returned dishonoured as "Payment Stopped by Drawer" from his banker with memo dt;
13C.C.No.941/2019 J 30.10.2018 i.e. as per Ex.P.3 and accused has failed to arrange for sufficient funds in his account for due to encashment for the cheque, thereafter he got issued legal notice on 12.11.2018 as per Ex.P.4 to the accused through RPAD calling upon him to repay the loan amount within 15 days from the date of receipt of the said notice and the said notice has been duly served on the accused on 13.11.2018 as per Ex.P.6 for which accused sent reply notice dt:
16.11.2018 as per Ex.P.8 to him. Hence he has filed this complaint against the accused.
13. In support of the oral evidence of the complainant, he produced and marked the documents as per Ex.P.1 to P.14 i.e, Original Cheque dt: 20.10.2018 is as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Challan as per Ex.P.2, Bank Memo as per Ex.P.3, the office copy of Legal Notice as per Ex.P.4, postal receipts as per Ex.P.5 & P.6 respectively, Postal acknowledgement as per Ex.P.7, Reply Notice as per 14 C.C.No.941/2019 J Ex.P.8, Statements of Accounts as per Ex.P.9 & P.10 respectively, relevant entry dt:26.8.2016 as per Ex.P.9(a), returned legal notice as per Ex.P.11, postal envelope as per Ex.P.12, postal receipt as per Ex.P.13, Complaint as per Ex.P.14, signature of the complainant as per Ex.P.14(a).
14. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance and their respective avocation as stated by the complainant and it is also not in dispute that, the cheque in question i.e. Ex.P.1 to belongs to the account of the accused and the Accused has also not disputed his signature which is appearing at Ex.P.1(a). The accused has also not disputed that, the cheque in question presented for encashment within its prescribed period and dishonoured for the reason of "Payment stopped by Drawer" on 30.10.2018 hence as a matter on record, proved by return memo dated: 30.10.2018 i.e. Ex.P3 issued by the concerned bank, therefore it is a matter on record and has been proved that, the cheque in 15 C.C.No.941/2019 J question was presented within its validity period and dishonoured as per the bank endorsement issued by the banker of accused. It is also not in dispute that, after dishonour of the cheque in question and receipt of bank memo within 30 days from the date of receipt of bank memo, legal notice was caused as per Ex.P4 to the Accused calling upon him to pay amount covered under the dishonoured cheque along with the cost of the notice within 15 days from the date of receipt of the notice. Inspite of service of the notice, the accused did not complied the claim made by the complainant but he gave reply notice to the complainant by denying the claim made by the complainant, hence it goes to show that, the legal notice issued by the complainant to the accused was duly served and thereafter this complaint is filed by the complainant within the prescribed time under the statute i.e.U/s.138 of N.I.Act. Hence, the complainant has complied the mandatory requirements as required U/s.138(a) to (c) of Negotiable Instruments Act.16
C.C.No.941/2019 J
15. The defence of the Accused discloses that, he and complainant were working in the same company during the year 2014 and during that time he has borrowed a hand loan of Rs.1 Lakh on interest at the rate of interest of Rs.6% p.m. on 2.8.2014 at that time the complainant had collected his two blank signed cheques including the cheque in question for security to the loan amount and though he has repaid the said loan amount along with interest to the complainant during the year 2015 despite of it the complainant has misused the cheques given to him as security to the loan amount, hence by misusing the cheque a false case is filed against him, hence it goes to show that, the accused has denied the transaction in question and issuance of cheque in question towards discharge of the loan transaction in question, on these back ground the oral and documentary evidence of the complainant and accused placed on record has to be examined.
16. The defence of the Accused discloses that, he has denied the transaction in question and source 17 C.C.No.941/2019 J of income i.e, financial capacity of the complainant and also denied the lending of loan amount to him. In order to prove the financial capacity of the complainant and transaction in question, the complainant has produced his Statement of Account pertaining to his bank accounts i.e., Indian Overseas Bank and State Bank of India which are at Ex.P.9 & P.10 respectively and the relevant entry in Ex.P.9 marked as Ex.P.9(a). On careful perusal of the Ex.P.9(a) it appears that, the complainant has withdrawn an amount of Rs.7 Lakhs on 26.8.2016 and it also seen from Ex.P.10 that, the complainant was having sufficient funds in his bank account as on the date of lending of loan amount as mentioned in the complaint. The accused during the course of crossexamination has not disputed the funds having in the bank account of the complainant, therefore the Ex.P.9 & P.10 are not in dispute by the accused. In addition to that, the accused himself admitted by suggesting that, complainant has withdrawn an amount of Rs.7 Lakhs in the year 2016 for his own purpose and same has not been given to the accused, 18 C.C.No.941/2019 J thus the very suggestion made by the accused draw an inference that the accused himself admitted that, the complainant was having sufficient source of funds in his bank account and also withdrawn by him. Apart from that, the accused during the course of crossexamination of the complainant has suggested that, he has borrowed an amount of Rs.1 Lakh from the complainant during the year 2014 and also suggested that, out of the said amount and a sum of Rs.2,77,000/ had taken from his relatives and has purchased a land at Turuvekere Village. In addition to that, the accused /DW.1 in his cross examination specifically admitted that, on 20.2.2016 a site has been purchased by his wife and on 11.1.2016 an agreement of Sale entered into by his wife with one Sri.T.N.Niranjan in respect of Sy.No.172 site No.1 and also admitted that, he has produced the xerox copy of the registered sale deed at the time of releasing on bail and the market value of the said site is of Rs.12,69,000/ but he contends that, the said site was purchased out of the funds from coconut business and amount received under 19 C.C.No.941/2019 J the chit transaction, but no documents have been produced by the accused to substantiate the said contention, therefore the very suggestions made to the complainant and admitted facts by the accused in his crossexamination clearly goes to show that, though the accused has disputed the quantum of amount received from the complainant but has admitted that, out of the loan amount received from the complainant has purchased a land in Turuvekere Village, in such circumstances it can be held that, the complainant has proved that, the accused has borrowed the amount from him for the purpose of purchasing the land at Turuvekere. The accused has also suggested that, the complainant used to lend the loan amounts to the other persons and having habit of filing the cases against them but in order to substantiate the suggestion accused has not produced any documents, in such circumstances in the absence of the documents an adverse inference can be drawn against the accused that, he has admitted the financial capacity of the complainant, therefore for the above said reasons the complainant 20 C.C.No.941/2019 J has proved his financial capacity and also the purpose of receiving the loan amount by the accused.
17. The learned counsel for the accused has cross examined the complainant in length but nothing has been elicited to discard or discredit the evidence of complainant. The complainant/PW.1 has stated in his crossexamination that, on 20.8.2016 the accused approached him and requested for financial help and on 28.7.2016 has paid the loan amount to the accused and at the time of lending of Rs.10 lakhs to the accused he has not collected any other documents from the accused and also lent the said amount out of his friendship and also faith on the accused. It is true that, the month of lending of loan amount is stated as 28.7.2016 but only on that ground entire evidence of PW.1 cannot be discarded. Evidence of PW.1 has to be read in it's entirity but not picking a particular word in the sentence. It is seen from the crossexamination of the accused that, the accused rather concentrated his defence on collection of documents by the complainant at the 21 C.C.No.941/2019 J time of lending the loan amount instead of eliciting anything material to discard the evidence of complainant. The complainant has denied the suggestions made to him that, on 2.8.2014 the accused has received an amount of Rs.1 Lakh at the rate of 6% interest p.m. from him and at the time of availing the said loan he has collected two blank signed cheques towards security of the said loan amount and the accused has paid entire loan amount of Rs.1 Lakh along with interest in the year 2015 by raising chit funds and thereafter the accused has requested for return of his blank signed cheques but he did not return the same for that, the accused issued stop payment instructions to his banker, hence it goes to show that, the accused has not elicited anything to accept his defence, in such circumstances the arguments canvassed by the learned counsel for the accused at para No.4 to 8 of his written argument cannot be acceptable one.
18. In addition to the above on careful perusal of the oral and documentary evidence of the 22 C.C.No.941/2019 J complainant and admitted facts by the accused in his crossexamination as it is already held that, the complainant complied the mandatory requirements as required u/s 138 of N.I. act, in such circumstances initial presumption can be drawn U/s 118a and 139 of N.I. Act that, the cheque in question issued by the accused towards discharge of legally recoverable debt as held by the Hon'ble Apex Court of India in "Rangappa Vs. Mohan", reported in (2010) 11 SCC 441 and in Crl.Appeal No.508/2018 dated:15.3.2018 between ROHITBHAI JIVANLAL PATEL VS. STATE OF GUJARATH AND ANR. It is true that, some minor discrepancies have been elicited by the accused during the course of crossexamination of the complainant with regard to the non securing of documents at the time of lending of the loan amount but only on the basis of said minor discrepancies the entire documentary evidence of the complainant cannot be thrown out unless and until the accused has been able to rebut the presumption available to 23 C.C.No.941/2019 J the complainant u/s 118a and 139 of NI Act. In this regard it is also relevant here to refer the decision of Hon'ble Apex Court decided in Crl.Appeal No. 1545/2019 dated:17.10.2019 in the case of Uttam Ram Vs. Devindar Singh Hudan and Anr." wherein the Hon'ble Apex Court held that "the burden is on the accused to rebut the presumption that, cheque was issued not for any debt or other liability and it is immaterial that, cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer" and also held that, "Complainant cannot be insisted to prove a debt in question as if it required to be proved before the Civil Court". Hence, in this case also the arguments canvassed by the learned counsel appears that, complainant is required to prove the existence of debt as if it required to be proved in Civil court, in such circumstances and in view of the principles of law laid down by the Hon'ble Apex Court of India in the above referred decisions the arguments 24 C.C.No.941/2019 J canvassed by the learned counsel for the accused in the written arguments cannot be acceptable one and in support of his arguments the decisions relied upon by him are not applicable to the defence of the accused since with due respect to the principles of law laid down by the Hon'ble Apex Court and High Court of Karnataka and Andra pradesh High court, and Kerala High court in the decisions relied upon by the learned counsel for the accused are not applicable to this case, as the facts and circumstances of the present case and facts and circumstances of the decided cases referred in para No.1 to 9 of important key points in the written argument are not one and the same.
19. In addition to the above, as it is held that, the complainant has successfully proved the transaction in question and his financial capacity by producing the documentary evidence along with his oral evidence. Apart from that, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' 25 C.C.No.941/2019 J and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was an adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that "
A. Negotiable Instruments Act, 1881 - S.139 -
Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally
enforceable debt or liability - However such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further 26 C.C.No.941/2019 J held that "Signature on the cheque was his, statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15032018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that " When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source 27 C.C.No.941/2019 J of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, " Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.138 of NI Act. It is also held that, 28 C.C.No.941/2019 J " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt". It is also held that, " the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The 29 C.C.No.941/2019 J holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated: 15.10.2019 wherein the Hon'ble High Court of Karnataka held 30 C.C.No.941/2019 J that "the Accused has not given any reply to the notice and also in the crossexamination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough".
Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, presumptions U/s.118a and 139 of N.I.Act indeed 31 C.C.No.941/2019 J does extend to the existence of legally recoverable debt and when such presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied the mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to his account and his signature on the cheque and complainant has proved that the legal notice issued by him was served on the Accused in such circumstances, presumptions have to be drawn even towards existence of legally enforceable debt as per Sec.118a and 139 of N.I.Act.
20. Therefore, for the above said reasons the defence taken by the Accused that, the complainant has not produced the documents to show that, he 32 C.C.No.941/2019 J was having source of income or funds to lend the loan amount to the Accused as on the date of lending of the loan amount and has not collected the documents for having advancing the loan amount to the Accused at the time of alleged lending of loan amount cannot be acceptable one. The defence taken by the Accused appears that, the complainant has to prove his claim by producing her evidence as if it is required for proving his debt before the Civil Court, but same cannot be permissible in proceeding initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decisions, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question was drawn for consideration as the Accused has admitted the cheque in question belongs to his account and the signature found on the cheque in question is of his signature. Therefore for the above said reasons the arguments canvassed by the learned counsel for the defence cannot be acceptable one, as the accused has miserably failed to rebut the presumptions available to the 33 C.C.No.941/2019 J complainant.
21. It is also relevant here to mention that, the complainant has admitted in his crossexamination that, he is an incomet tax assessee and has declared Income Tax Returns. The learned counsel for the Accused argued that, the complainant though he has admitted that, he has mentioned the loan transaction in question in his I.T. Returns and no hindrance for him to produce the said document before the court inspite of it, the complainant has not produced his I.T. Returns before the court that itself sufficient to hold that, the complainant was not having sufficient source of fund to lend the alleged loan amount to the Accused and has not advanced the loan amount. It is true that, the complainant in his crossexamination admitted that, he has declared the lending of loan amount in his I.T returns but he has not produced before the court. But mere non production of the I.T. returns before the court that by itself invalidates the transaction or not is to be taken into consideration, in this regard, it is necessary 34 C.C.No.941/2019 J here to refer the decision of our Hon'ble High court of Karnataka reported in 2019(1) Kar. L.R.185 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat in the said case the Hon'ble High Court of Karnataka held that " Negotiable Instruments Act, 1881 - Sections 138 and 139 Endorsement 'payment stopped by drawer' - The trial court in the instant case, merely considered a suggestion made from the Accused side in the cross examination of PW1 that the complainant was an income tax assessee and that he has not declared the alleged loan transaction in his returns and disbelieved the case of the complainant that too, ignoring that legal presumption under section 139 of the N.I. Act, was operating in favour of the complainant For these reasons, it has to be held that the complainant has beyond reasonable doubt proved the guilt of the Accused punishable under Section 138 of the N.I. Act. As such, the 35 C.C.No.941/2019 J impugned judgment of acquittal passed by the trial court deserves to be set aside and respondent/ Accused is liable to be convicted for the offence punishable under Section 138 of the N.I. Act. Hence in view of the principles of law laid down by the Hon'ble High court of Karnataka in the above referred decisions, in the present case also the complainant admitted that, he has not produced his I.T. Returns before the court, but as it is already held that, the complainant has discharged his primary burden by complying the mandatory provisions of Sec.138 of N.I. Act, therefore it is for the accused to rebut the presumption existing infavour of the complainant U/s.139 of Negotiable Instruments Act. Apart from that, the admissions of the complainant with regard to non production of I.T. Returns for the concerned year could not by itself draw an adverse inference and to hold that, there was no existence of legally enforceable debt or the presumption as envisaged U/s.139 of N.I.Act is successfully rebutted by the accused. In another 36 C.C.No.941/2019 J decision of Hon'ble Madhya Pradesh High Court decided in C.R.R No.5263/2018 dated: 7.3.2019 in the case of Smt. Ragini Gupta Vs. Piyush Dutt Sharma Gwalior., wherein the Hon'ble High Court held that, mere non filing of income tax return would not automatically dislodge the source of income of the complainant and non payment of income tax is a matter between the revenue and assessee and if the assessee has not disclosed his income in the income tax return, then the income tax department is well within its right to reopen the assessment of income of the assessee and to take action as per provisions of Income Tax Act, however non filing of income tax return by itself would not mean that, the complainant had no source of income and thus no adverse inference can be drawn in this regard only because of absence of income tax return. Hence in view of the principles of law laid down by Hon'ble High Court of Madya Pradesh in the above said decision in the present case also though the complainant has admitted that, he has not produced 37 C.C.No.941/2019 J his I.T. Returns before court, that itself would not automatically dislodge the source of income of the complainant. Therefore the admissions of the complainant which are elicited in her cross examination are not helpful for the accused to prove his defence that, in view of non production of I.T.Returns before court that itself sufficient to hold that, the complainant has no source of income cannot be acceptable one and the arguments canvassed by the learned counsel for the accused at para No. 10 of his written argument are not accepted.
22. It is relevant here to mention that, as it is already decided in the above that, the complainant has proved that the cheque in question i.e Ex.P1 belongs to the Accused and signature found at Ex.P.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and the same was dishonoured for the reason of "Payment Stopped by Drawer" as per Ex.P.3 and thereafter 38 C.C.No.941/2019 J the legal notice caused by him through RPAD to the Accused and the said notice was served on him, in such circumstances, it can be held that, the complainant has discharged her initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initially the presumptions are available in favour of the complainant U/s.118a and 139 of the N.I. Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even the said presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused, unless and until the said presumptions are rebutted by the Accused even though the documents are not produced by the complainant with regard to loan transaction in 39 C.C.No.941/2019 J question.
23. In order to rebut the presumption available to the complainant, the accused himself examined as DW.1 by stating that, the cheque in question was not at all issued on the date alleged in the complaint but the accused has borrowed a loan of Rs.1 Lakh on the interest at the rate of 6% p.m. on 2.8.2014 and at the time of availing the said loan the complainant had collected two blank signed cheque i.e. cheque in question and other cheque for the purpose of security and the accused has repaid the entire loan amount of Rs.1 Lakh along with interest during the year 2015 by raising a chit fund inspite of repayment the complainant failed to return the security cheques even after repeated request made by him postponing the same and even during the year 2016 also he requested for return of the cheques but the complainant stated that, but he did not return the said cheques thereafter on 22.2.2016 he has issued stop payment instructions to his banker and he has not borrowed any amount as alleged by the 40 C.C.No.941/2019 J complainant and has not issued the cheque in question towards discharge of the liability in question. The accused /DW.1 has also stated that, except the signature on cheque I.e Ex.P.1 the other writings are not of his hand writings and the complainant has filed false case against him by misusing his signed blank cheque. In support of his oral evidence has produced a letter issued by the State Bank of India, Kanakapura Road Branch, bengaluru which is at Ex.D.1.
24. It is important to note here that, the accused has not produced any documents or satisfactory evidence to show that, the cheque in dispute i.e. Ex.P.1 and other cheques were collected by the complainant on 2.8.2014 i.e. at the time of advancing alleged loan of Rs.1 Lakh to him as security to the said loan and also not produced the documents to show that, by raising the chit fund in the year 2015, the accused has repaid the alleged loan of Rs.1 Lakh along with interest to the complainant, except the oral evidence nothing has 41 C.C.No.941/2019 J been produced before the court. Even the entire perusal of the crossexamination of the complainant by the accused nothing has been elicited that, the cheque in question and another cheque were collected by the complainant on 2.8.2014 at the time of lending of alleged loan amount of Rs.1 Lakh as stated by the accused in his defence. In addition to that, the Accused himself has admitted that, the cheque in question issued to the complainant and signature found at Ex.P.1 (a) is that of his signature, therefore once signature on the Negotiable Instrument Act is admitted, in that circumstances sec. 20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he/she had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that " a reading of 42 C.C.No.941/2019 J sec.20 of the act which is extracted above reveals that, the words used are ' either wholly blank or having written therein an incomplete negotiable instrument'. The instrument may be wholly blank or incomplete in a particular in either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so vide that, the party so signing is bound to be a holder in due course.
Promissory notes are often executed in the name of the payer and left unfilled to be afterwards filled by the actual holder, the object being to enable the owner to pass it off to another without incurring the responsibility as an endorser. Thus, it is seen that, person in possession of an incomplete instrument in maternal particulars has the authority prima facie to fill it and thus the executants becomes liable to pay the amount due'. In another decision 43 C.C.No.941/2019 J of Hon'ble High Court of Madras reported in 2005 (1) DCR 85 in the case of P.A. Thamatharan Vs. Dalmia cements (B) Ltd., wherein it is held that "
Negotiable Instrument Act 1991 - Sec. 138 - dishonour of cheque - plea -body of cheque was not written by Accused - held it is not mandatory and no law prescribes that, the body of cheque should also be written by the signatory to the cheque, a cheque could be filled up anybody and if it is signed by the account holder of the cheque'. In another decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of 44 C.C.No.941/2019 J Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Appeal No.1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false 45 C.C.No.941/2019 J liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with 46 C.C.No.941/2019 J the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law laid down by Hon'ble Apex court of India and also Hon'ble High Court of Karnataka referred above and in the present case also the Accused has admitted his signature on Negotiable Instrument i.e. cheque and he also admitted issuance of the cheque to the complainant, it is primafacie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or fabricated the cheque in question given by him and the defence of the Accused cannot be acceptable one as the instrument i.e., cheque in question cannot be rendered unenforceable merely because the contents have been filled by 47 C.C.No.941/2019 J different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it.
25. In addition to that, the accused has miserably failed to prove that, the complainant has fabricated the cheque in question by writing the contents of the cheque as alleged by the accused. Even for sake of discussion if it is assumed that, Accused has given cheque in question without mentioning the name of the payee and date to the complainant in such circumstances also it attracts the penal liability as contemplated U/s.138 of N.I. Act. In this regard, it is relevant here to refer decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of 48 C.C.No.941/2019 J innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of presumed fact." In the present case though the Accused has denied the contents of the cheque in question except his signature but he did not proved his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I.Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden by complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars 49 C.C.No.941/2019 J and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, " Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is 50 C.C.No.941/2019 J held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In view of the principles of law laid down as above, even if it is assumed that, the complainant has written his name and date on the cheque in question in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the said cheque has been issued towards discharge of legally recoverable debt. It is also relevant here to refer the decision of Hon'ble Apex court held in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " (a) Negotiable Instrument Act 1881 - S.138 - If on the date of the cheque liability or debt exist or the amount has become legally recoverable S.138 will apply - not otherwise". In another decision of Hon'ble High Court of Bombay decided in CRMM No.2607/2018 (O & M) dated: 27.8.2019 in the case of Kailash vati Vs. M/s. Ludhiyana 51 C.C.No.941/2019 J Beverages., wherein the Hon'ble High Court held that " A. Negotiable Instrument Act 1881 - S.138 and 6 - Dishonour of cheque date of drawn - Determination of - The date on which the cheque is drawn has to be with reference to the date mentioned in the column in the cheque and not the date on which it is bar was signed Date when the cheque is drawn is not defined in the act - If date of singing cheque is accepted then all post dated cheques cannot be treated as valid cheques within and drawer of cheques would stand absolved from criminal prosecution if cheques are presented after three months of the date on which signature were appended". Hence in view of the principles of law laid down by the Hon'ble Apex Court of India, it can be held that, the liability of the debt existed as on the date mentioned on the cheque not as on the date of signature on the cheque, even for sake of discussion the arguments canvassed by the learned counsel for the Accused 52 C.C.No.941/2019 J taken into consideration but in view of the principles of law laid down by the Hon'ble Apex Court and High Court of Bombay it is to be considered that the date on which cheque is drawn has to be with reference to the date mentioned in the cheque but not the date on which it is or was signed., therefore the arguments canvassed by the learned counsel for the defence at para No.9, 12 to 14 and 18 cannot be acceptable one.
26. It is also relevant here to mention that, the Accused/DW.1 in his evidence has taken specific defence that, the cheque in question and other cheque were issued to the complainant as a security towards the loan amount of Rs.1 Lakh availed on 2.8.2014 and he had repaid the said loan amount along with interest to the complainant but the complainant did not return the said cheuqes to him and has filled the cheque in question and misused it. As it is already held in the above that, in support of his evidence nothing has been produced before the court to show that, he has given the cheque in 53 C.C.No.941/2019 J question on 2.8.2014 to the complainant, except the oral evidence nothing has been placed before the court. Even for sake of discussion, if the defence of the Accused i.e. the cheque in question has been given to the complainant towards security of the alleged loan amount of Rs.1 Lakh is taken into consideration, in such circumstances also it attracts the offence U/s.138 of N.I. Act, unless the accused proved his defence, in this regard, it is relevant here to refer the decision of Hon'ble Apex court of India reported in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " Even cheque issued as security for payment of loan installments also covered under the purview of sec. 138 of Negotiable Instruments Act" In another decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of Lale Patel Vs. Sharanabasappa., wherein the Hon'ble High Court held that " NEGOTIABLE INSTRUMENTS ACT, 54 C.C.No.941/2019 J 1881 section 138 - Dishonour of cheque for insufficiency of funds Plea of accused that he had given a blank cheque signed as security for a transaction and complainant filled up the contents and denied existence of any debt or loan - Conviction by Trial court Affirmed by Appellate Court - Revision against. Hence the Hon'ble High Court of Karnataka in the above decision clearly held that, if the Accused has taken defence that, blank signed cheque has been issued as a security for transaction and the complainant filled up the contents and the accused denied the existence of debt or loan in such circumstances it is for the accused to prove his/her defence by producing cogent and convincible evidence, if the Accused has not proved the same in such circumstances, it cannot be held that, the cheque in question was issued for the purpose of security in connection with the alleged transaction. In another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. Vijayakumari 55 C.C.No.941/2019 J wherein the Hon'ble Apex court held that "
NEGOTIABLE INSTRUMENTS Act, 1881 Section s138 and 139 - acquittal - If justified Accused not disputing issuance of cheque and his signature on it Plea that it was issued long back as security and that loan amount was repaid Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused Acquittal not proper. Hence in the present case also it is the main defence of the Accused that the cheque in dispute was given to the complainant as a security towards the loan amount of Rs.1 Lakh in the year 2014 but in this regard the accused has not produced documents or proof in such circumstances by applying the principles of law laid down in the above decision the defence of the Accused cannot be acceptable one. In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.271/2020 in the case of APS Forex Services Pvt. Ltd., Vs. Shakthi International Fashion Linkers and others., wherein the Hon'ble 56 C.C.No.941/2019 J Apex Court held that "the defence of the Accused that, cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption. It is also held that, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always presumption infavour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the Accused to rebut such presumption by leading evidence". In the present case the Accused has admitted that, the cheque was issued and signature is also admitted but it is the defence of the Accused that, it was issued towards security and complainant has fabricated the cheque, in such circumstances the defence of the Accused cannot be acceptable one in the absence of further proof of evidence to rebut the presumption.
27. It is also relevant here to mention that, the accused /DW.1 in his evidence has stated that, the 57 C.C.No.941/2019 J cheque in question was issued to the complainant as a security on 2.8.2014 towards loan amount of Rs.1 Lakh borrowed by him and he has signed on the cheque but the other writings on the cheques are not in his writings and the same have been fabricated by the complainant, hence the complainant has misused the cheque which was issued in the year 2014 by mentioning his name and putting the date on the cheque and has presented the same to the bank and has filed this case. If really the Accused has repaid the loan amount of Rs.1 Lakh to the complainant and the complainant has misused the cheque in question which was given to him in the year 2014, in such circumstances, definitely the Accused would have taken or initiate action against the complainant either by lodging the complaint before the police or court or at least by issuing notice to the complainant for return of his alleged signed cheque handed over to him as a security but no such efforts have been made by the Accused even after receipt of the legal notice by him and even after his appearance in this case, therefore except the bare denial of the 58 C.C.No.941/2019 J Accused is not sufficient to hold that, he has rebutted the presumptions available to the complainant U/s.118 and 139 of the N.I. Act. It is also relevant here to mention that, the conduct of the Accused in not taking the action against the complainant for alleged misuse of the cheque in question by the complainant may leads to draw an adverse inference against him that, the Accused has not initiated any action against the complainant since the cheque in question has been issued by the Accused to the complainant towards discharge of the liability in question but not for any other purpose. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt cheques allegedly issued by 59 C.C.No.941/2019 J accused towards repayment of debt Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt Conviction, Proper". Hence in view of the principles of law laid down by the Hon'ble Apex Court are aptly applicable to the case on hand since in the present case also the accused has not made any efforts to get return of cheque alleged to have been given to the complainant for security toward the loan amount of Rs.1 Lakh in the year 2014 itself and said amount has been repaid in the year 2015 itself under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference 60 C.C.No.941/2019 J can be drawn against the accused that, the cheque in question issued by the accused persons towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted the signature and cheque in question is belongs to Accused.
28. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and though he has taken the specific defence that, the cheque in question has been given to the complainant as security towards the loan amount of Rs.1 Lakh borrowed on 2.8.2014 and it has been misused by the complainant and has filed this false case against him, but the Accused has not proved the said defence by producing cogent and convincible evidence , in such circumstances it can be held that, the Accused has failed to explain and prove how the cheque in question has come to the possession of the complainant, this would also give rise to an adverse inference against him, this proposition of law finds 61 C.C.No.941/2019 J support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa" and in the decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the cheque entered into the hands of complainant". Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by producing cogent and convincible evidence.
29. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, he has lent loan amount of Rs.10,00,000/ to the Accused and in order to 62 C.C.No.941/2019 J discharge the said loan amount, the accused has issued the Ex.P.1 cheque in question for the said amount in favour of the complainant and thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Payment Stopped by Drawer" and thereafter he got issued legal notice to the accused and the said notice was served on him, inspite of it, the Accused did not paid the cheque amount, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 Cheque. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
30. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of 63 C.C.No.941/2019 J negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following : ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.10,15,000/= (Rupees Ten Lakhs and Fifteen Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
64C.C.No.941/2019 J Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.10,10,000/= (Rupees Ten Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
His Bail bond and surety bond stands cancelled after appeal period is over. . Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C. (Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 4h day of December 2020).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri.Venugopal.K;
65C.C.No.941/2019 J
2. List of documents exhibited on behalf of the Complainant: Ex.P1 : Original Cheque;
Ex.P1(a) : Signature of the Accused;
Ex.P2 : Bank Challan Ex.P3 : Bank Memo Ex.P4 : Office copy of the Legal Notice; Ex.P5 & 6 : postal receipts; Ex.P7 : Postal acknowledgement; Ex.P.8 : Reply Notice;
Ex.P.9 & P.10 : Statement of Accounts;
Ex.P.9(a) : Relevant entry dt. 26.8.2016 on Ex.P.9 Ex.P.11 : Returned Legal notice; Ex.P.12 : Postal Cover Ex.P.13 : Postal Receipt; Ex.P 14 : Complaint; Ex.P 14 (a) : Signature of the Complaint;
3. List of witness/s examined on behalf of the Accused: DW.1 : Sri. Ashok Kumar H.S
4. List of documents exhibited on behalf of the Accused: Ex.D.1 : Letter dt: 17.6.2019 issued by SBI bank (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
66C.C.No.941/2019 J 4.12.2020 Case called out, Both complainant and accused and counsels for the Complainant and accused absent, No representation. Judgment pronounced since the fine amount and default sentence is only imposed against the Accused, no separate sentence is imposed against the Accused vide separate order ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.10,15,000/= (Rupees Ten Lakhs and Fifteen Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.10,10,000/= (Rupees Ten Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five 67 C.C.No.941/2019 J Thousand only) shall be defrayed as prosecution expenses to the state.
His Bail bond and surety bond stands cancelled after appeal period is over.
. Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.