Bangalore District Court
V. Anil Kumar vs Sri. Naveen Sagi on 23 February, 2023
KABC020063962021
IN THE COURT OF ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY.
SCCH-6
PRESENT: SMT. K. LAKSHMI, B.A.L, LL.B.,
IV Addl., Small Cause Judge &
ACMM, Court of Small Causes,
BENGALURU.
C.C. No.1722/2021
Dated this the 23rd day of February 2023
COMPLAINANT : V. Anil Kumar
S/o Sri Velayudham,
Aged about 32 years,
Residing at No.B-14,
Minarva Mill,
Magadi Road,
Bengaluru-23.
(By Advocate Shri. Siddaraju N)
V/s
ACCUSED : Sri. Naveen Sagi
Residing in the house at No.4,
Fortune Valley Mariyappanapalya,
Dasarahalli Post,
C.C. No. 1722/ 221
Near Hebbal, Near Lumbini
Garden, Bengaluru-560 024.
(By Advocate Shri. Ganesh G G)
* * *
-: J U D G M E N T :-
The complainant has filed the present complaint
against the accused under section 200 of Cr.P.C for the
offence punishable under section 138 of Negotiable
Instrument Act.
2. According to the Complainant, the accused has
obtained the financial assistant from him in the July
2018. The complainant paid a sum of Rs. 3,50,000/- to
the accused on 10-07-2019. It is further alleged that the
accused has repaid a sum of Rs. 1,00,000/- to him.
Subsequently for repayment of the remaining amount of
Rs. 2,50,000/-, the accused has issued the impugned
cheque bearing No. 316616 dated 19-08-2020 for a
sum of Rs. 2,50,000/- drawn on ICICI Bank,
Sahakarnagar Branch, Bengaluru. Thereafter, the cheque
C.C. No. 1722/ 221
was presented for collection in the account of the
complainant and the said impugned cheque was
dishonored by the said Bank on 24-08-2020 on the
ground that the " funds insufficient ".
3. Thereafter, the complainant issued a statutory
notice dated 04-09-2020 under section 138 of the
Negotiable Instrument Act, to the accused. The accused
received the notice and acknowledged the same. The
accused did not even sent any reply to the said statutory
notice. Since the said notice was not complied with, the
above said complaint is preferred by the complainant.
4. In his pre-summoning evidence, complainant was
examined on affidavit. He reiterated the contents of
complainant and got marked five documents as per Ex.
P-1 to Ex. P-5. Upon appreciation of pre-summoning
evidence, accused was summoned for an offence
punishable under section 138 of the Negotiable
Instrument Act. After receipt of summons, the accused
appeared before this Court through his counsel and he
C.C. No. 1722/ 221
was enlarged on bail. Plea of accusation has been read
over and explained to the accused and he pleads not
guilty and claims to be tried. The accused was examined
u/Sec.313 of Cr.P.C. He totally denied the entire case
of the complainant.
5. The accused moved an application to cross
examine the complainant and said application came to be
allowed. The sufficient opportunity has given to the
accused to cross examine the complainant. The accused
has cross examined the complainant. On the other hand,
the accused has led evidence as DW-1. He relied on Ex.
D-1 to Ex. D-7. Thereafter, the case is posted for
arguments.
6. Heard the arguments.
7. On the basis of the above facts, the following
points arise for my consideration :-
1. Whether the complainant proves beyond all
the reasonable doubt that, the accused has
taken the hand loan of Rs.3,50,000/- and
C.C. No. 1722/ 221
issued a cheque bearing No. 316616 dated
19-08-2020 for a sum of Rs.2,50,000/-
drawn on ICIC Bank, Sahakarnagar Branch,
Bengaluru and when the complainant
presented the cheque for encashment and the
cheque was dishonored due to "funds
insufficient", for which the complainant has
issued a legal notice through RPAD and the
same was served, but the accused has not
repaid the said amount and thereby the accused
has committed the offence punishable under
section 138 of Negotiable Instruments Act?
2. Does the impugned cheque represent the
legally enforceable debt at the time of its
drawing ?
3. What order ?
8. My answers to the above points are as follows :
Point No.1 : In the Negative,
Point No.2 : In the Negative,
C.C. No. 1722/ 221
Point No.3 : As per final order,
for the following:
-: R E A S O N S :-
POINTS No. 1 and 2 :-
9. The complainant has filed his affidavit in lieu of
his oral chief examination. In his affidavit he has testified
regarding lending of amount, issuance of the cheque, its
dishonour, issuance of legal notice and failure of the
accused to pay the cheque amount. The complainant has
produced the cheque bearing No.316616 dated 19-08-
2020 for a sum of Rs. 2,50,000/- drawn on ICIIC Bank,
Sahakarnagar Branch, Bengaluru alleged to be issued by
the accused in favour of the complainant. Ex. P-1 stands
in the name of the complainant for a sum of Rs.
2,50,000/-. Ex. P-2 is the Banker's endorsement. Ex. P-
3 is the office copy of the legal notice, which is dated
04-09-2020. Ex. P- 4 is the postal receipt. Ex. P-5 is the
postal acknowledgment.
C.C. No. 1722/ 221
10. On the other hand, the accused led evidence as
DW-1. He deposed that the complainant forcibly secured
the cheque from him in respect of the transaction taken
place between one Smt. Ramaya and Dr. Kiran Kumar.
He never borrowed a loan form the complainant nor
issued the cheque in issue for the discharge of debt. He
further deposed that there is no transaction between
himself and the complainant. One Smt. Ramaya used to
visit the office of accused and she has introduced herself
as money lender. He has introduced one Dr. Kiran
Kumar to said Smt. Ramaya. The said Kiran Kumar
borrowed a loan of Rs. 1,30,00,000/- from Smt. Ramya
without his knowledge. The complainant is the president
of Dalitha Praja Samithi. The said Smt. Ramaya
approached the complainant in respect of the transaction
taken place between herself and Dr. Kiran Kumar. The
complainant secured his presence by threating him to
lodge a atrocity complaint against him in respect of the
alleged transaction. The complainant demanded the
amount of Rs. 10,00,000/- from him and threatened to
C.C. No. 1722/ 221
lodge atrocity case against him. The complainant forcibly
secured the four cheques from him and encashed two
cheques without his knowledge. The complainant has
approached the Court with unclean hand. He is not
liable to pay the cheque amount to the complainant.
11. Learned counsel for the complainant argued
that the complainant has discharged his initial burden of
proving the case by his oral as well as documentary
evidence. It is also contention of the complainant that the
accused has not initiated the legal action against the
complainant to recover the disputed cheque. The accused
was aware of the fact that the disputed cheque was with
the complainant. The accused has admitted the loan
transaction. He further contended that the accused and
his wife borrowed a loan of Rs. 25,00,000/- from the
complainant and executed the undertaking letter in
favour of complainant. The accused is liable to pay the
cheque amount to the complainant. The accused also
admitted the cheque and also signatures found in the
C.C. No. 1722/ 221
disputed documents. He has also contended that the
benefit of presumption under Sections 118 and 139 of
Negotiable Instruments Act is in favour of the
complainant, and therefore the accused has failed to rebut
the presumption. Hence, the accused is liable to be
convicted.
12. To counter these submissions, learned defence
Counsel submits that the accused never issued the cheque
in favour of the complainant. The accused never
borrowed a loan from the complainant. The accused is
not liable to pay the cheque amount to the complainant.
The complainant has approached the Court with
unclean hand. It is further alleged that the One Smt.
Ramaya used to visit the office of accused and she has
introduced herself as money lender. He has introduced
one Dr. Kiran Kumar to said Smt. Ramaya. The said
Kiran Kumar borrowed a loan of Rs. 1,30,00,000/- from
Smt. Ramya without his knowledge. The complainant is
the president of Dalitha Praja Samithi. The said Smt.
C.C. No. 1722/ 221
Ramaya approached the complainant in respect of the
transaction taken place between herself and Dr. Kiran
Kumar. The complainant secured his presence by
threating him to lodge a atrocity complaint against him
in respect of the alleged transaction. The complainant
demanded the amount of Rs. 10,00,000/- from the
accused and threatened to lodge atrocity case against
him. The complainant forcibly secured the four cheques
from him and encashed two cheques without his
knowledge. It is further contended that though there is
presumption under Sec.118 and 139 of Negotiable
Instruments Act, existence of legally enforceable debt is
not a matter of presumption u/Sec.139 of Negotiable
Instruments Act. In support of his contention, he relied
on the following citations :-
1. AIR 2019 SC 1983: Basalingappa Vs.
Mudibasappa.
2. ILR 2007 2709: M. Senguttuvan Vs.
Mahadevaswamy.
3. ILR 2014 KAR 6572: H. Manjunath Vs.
A. M. Basavaraju.
C.C. No. 1722/ 221
4. 2011 CRIMINAL LAW JOURNAL 552 :
Amzad Pasha Vs. H. N. Lakshmana.
5. (2008) 4 SCC 54: Krishna Janardhan
Bhat Vs. Dattatraya G. Hegde.
13.According to the accused, he never received the
financial help from the complainant. In this case, the
accused has not denied the cheque and also the signature
in the cheque. Section 20 of Negotiable Instrument Act,
1881, states that when a person signs and delivers blank
cheque to another, he thereby gives prima-facie authority
to holder thereof to make or complete it for any amount
specified therein and not exceeding the amount covered
by stamp. After combined reading of said section 20 and
138 of Negotiable Instrument Act, it appears that to
made out an offence in question against the accused, the
necessary ingredient is that the cheque should be drawn
on the account of the drawer and it is immaterial the
contents therein are in whose handwriting as per section
20 of the Negotiable Instruments Act. After perusal of
said section 20, it appears that the drawer of a cheque
C.C. No. 1722/ 221
can issue blank cheque to other person and by his said act
he gives an authority to said concern person to fill up it
contents. It enables the holder of the cheque to fill up the
incomplete cheque.
14. It is also settled law that the admission of
signature in a cheque leaf alone will not constitute
admission of execution of the cheque. It can be treated
only as a cheque containing admitted signature of cheque.
The mere production of a cheque or making same as an
exhibit in a case will not prove that the cheque is drawn
by accused. The factum of drawing or execution of
cheque has to be proved by evidence of person or persons
who can vouchsafe for the truth of the facts in issued.
15. The position of law which emerges is that once
issuance of cheque is admitted, the presumption under
Section 118 (a) of Negotiable Instrument Act would arise
that it is supported by a consideration. Such a
presumption is rebuttal. The accused can prove the non-
C.C. No. 1722/ 221
existence of a consideration by raising a probable defence.
If the accused is proved to have discharged the initial
onus of proof showing that the existence of debt was
improbable or doubtful or the same was illegal, the onus
would shift to the complainant who will be obliged to
prove it as a matter of fact and upon it failure to prove
would dis-entitle him to grant of relief on the basis of
the negotiable instrument. The burden upon the accused
of proving the non-existence of the consideration can be
either direct or by bringing on record the preponderance
of probability by reference to the circumstances upon
which he relies. In such event, the complainant is
entitled under law to rely upon all the evidence led in the
case. In case, where the accused fails to discharge the
initial onus of proof by showing the non-existence of the
consideration, the complainant would invariably be held
entitled to the benefit of presumption arising under
Section 118 (a) of Negotiable Instrument Act in his
favour. The Court may not insist upon the accused to
disprove the existence of consideration by leading direct
C.C. No. 1722/ 221
evidence as the existence of negative evidence. It is
neither possible not contemplated and even of led, is to
be seen with a doubt. The standard of proof evidently is
preponderance of probabilities. Inference of
preponderance of probabilities can be drawn not only
from the materials on records, but also by reference to
the circumstances upon which relies.
16. The complainant shall make clear to Court,
each of the circumstances which is relied upon by him,
to establish drawing of the cheque by accused. The mere
fact that the cheque produce in Court came from
possession of complainant alone will not sufficient to
prove execution, even though it may be one of the
circumstances. No law allows a Court to presume that
the cheque which is produced and marked in Court was
handed over or delivered to complainant by accused.
The Court, at best, can say that the cheque was in
possession of complainant. But, under what
circumstances it came to his possession is to be stated by
C.C. No. 1722/ 221
complainant. In the absence of such statement, Court
cannot proceed on any assumption that it was handed
over to complainant by the accused. The Court shall
consider whether each of the circumstances is proved by
complainant, as per law and whether each of the
circumstances lead to an irresistible conclusion that the
cheque was drawn by the accused, as alleged by
complainant. In case in which only circumstantial
evidence is produced before the Court to prove drawing
of cheque, Court shall follow the mode adopted for
appreciation of circumstantial evidence, to enter finding
whether cheque is drawn by accused, as alleged by
complainant. If any circumstance or circumstances
proved in the case can be explained on any hypothesis
which is inconsistence with the assertion of drawing of
cheque by accused, accused cannot be said to have drawn
the cheque. Hence, it is relevant to extract the provision
of section 58 of Negotiable Instrument Act,
"58. Instrument obtained by unlawful
means or for unlawful consideration --
When a negotiable instrument has been
C.C. No. 1722/ 221
lost, or has been obtained from any maker,
acceptor or holder thereof by means of an
offence or fraud, or for an unlawful
consideration, no possessor or indorsee
who claims through the person who found
or so obtained the instrument is entitled to
receive the amount due thereon from such
maker, acceptor or holder, or from any
party prior to such holder, unless such
possessor or indorsee is, or some person
through whom he claims was, a holder
thereof in due course."
17. Whether the cheque was handed over or
delivered to complainant by accused and whether it was
drawn by accused are independent facts, which requires
independent proof. The mere production of the cheque
in Court will not prove either of the above fact. The
Court must be satisfied from the allegations in the
complaint and from the evidence adduced that the cheque
was made, prepared or created by accused. The factum
of drawing or execution of cheque has to be proved by
evidence of person or persons who can vouchsafe for the
C.C. No. 1722/ 221
truth of the facts in issue. It can be proved by direct or
circumstantial evidence, which is admissible in law.
18. In the case of Rajendra Prasad -Vs- M.
Shivaraj, 2006 Criminal Law Journal 3737, our
Hon'ble Apex Court held that " when once the issuance
of the cheque is validly established, the presumption
would arise under Section 118 as well as Section 139 of
the Negotiable Instrument Act in favour of the
complainant. It was for accused to lead evidence to the
contrary to displace the presumption. Further in the case
of R. Sankaralingam -Vs- Union of India (1997) 1
BC 541(Mad) (DB), Hon'ble High Court of Madras
held that under Section 138 Negotiable Instrument Act,
when an action is taken against a particular person, there
are certain admitted facts and circumstances, the law
raises a presumption that the accused is guilty. Then the
burden shifts on to the accused to prove that he is not
guilty by establishing that the cheque was not supported
by any consideration and it was not in discharge of debt.
C.C. No. 1722/ 221
19. Thus, this Court has to consider whether the
complainant has to prove the existence of legally
recoverable debt. From the statement of the complainant
reveals that the accused has received the amount of Rs.
3,50,000/- and disputed cheque was issued in favour of
complainant. The accused has not denied the issuance
of cheque in favour of complainant. In the present case,
the complainant has presented the disputed cheque within
3 months from the date of the cheque as it could be seen
from endorsement. Ex. P-2 further reveal that the
cheque in question was dishonored. The demand notice
issued within a statutory period. Then the complainant
has filed this complaint within the statutory period. It is
specific defence of the learned counsel for defence that the
the address mentioned in the notice is incorrect. It is also
the defence of the accused that the complainant has no
financial capacity to lend such amount to the accused and
accused never borrowed a loan from the complainant. In
this regard, it is suggested to PW-1 as hereunder :-
C.C. No. 1722/ 221
"ನನಾನನು ಹಣ ಕಕಕೊಡಬಕಬೇಕನಾದರಕ ದಕಬೇವನಾ ಎಎಂಬನುವವರ ಬಳ
ವಿಚನಾರ ಮನಾಡಿರನುವವುದಿಲಲ. ವಿವನಾದಿತ ಹಣವನನುನ್ನು ಹಕಕೊರತನು ಪಡಿಸ
ನನಾನನು ಆರಕಕೊಬೇಪಿತರಿಗಕ ಬಕಬೇರಕ ಯನಾವವುದಕಬೇ ಹಣಕನಾಸನ ವವ್ಯವಹನಾರ
ಮನಾಡಿರನುವವುದಿಲಲ...
ಆರಕಕೊಬೇಪಿತರನು ನನನ್ನು ಖನಾತಕಗಕ 1 ಲಕ್ಷ ಹಣವನನುನ್ನು ಹನಾಕಿದನಾದ್ದಾರಕ.
ಸನಾಕ್ಷಿಗಕ ಒಎಂದನು ಪಪ್ರತಿಯನನುನ್ನು ತಕಕೊಬೇರಿಸ, ಆರಕಕೊಬೇಪಿತರನು 1 ಲಕ್ಷ
ಹಣಕಕಕ್ಕೆ ಜಮನಾ ಮನಾಡಿದಕಕಕ್ಕೆ ಸಎಂಬಎಂಧಪಟಟಎಂತ ದನಾಖಲನಾತಿಯ
ಪಪ್ರತಿಯನನುನ್ನು ನ.ಡಿ-2 ಎಎಂದನು ಗನುರನುತನು ಮನಾಡಲನಾಯಿತನು. ನನನ್ನು
ಖನಾತಕಗಕ ಹಣ ವಗನಾರ್ಗಾವಣಕ ಆದರಕ ಅದನು ನನನ್ನು ಬನಾವ್ಯಎಂಕ್ ಸಕಟಬೇಟ
ಮಎಂಟನಲಲ ನಮಕೊದನು ಆಗಿರನುತತ್ತದಕ ಎಎಂದರಕ ಸರಿ. ದಿದ
09.10.2021 ರಎಂದನು ಪವುನದ ನನನ್ನು ಖನಾತಕಗಕ ಆರಕಕೊಬೇಪಿತರನು 5 ಲಕ್ಷ
ಹಣವನನುನ್ನು ಹನಾಕಿದನಾದ್ದಾರಕ ಎಎಂದರಕ ಸರಿ. ಸದರಿ ದನಾಖಲನಾತಿಯನನುನ್ನು
ಸನಾಕ್ಷಿಯನು ಒಪಿಪ್ಪಿದ ಕನಾರಣ ಅದರ ಪಪ್ರತಿಯನನುನ್ನು ನ.ಡಿ-3 ಎಎಂದನು
ಗನುರನುತನು ಮನಾಡಲನಾಯಿತನು. ಪವುನದ ದಿದ 03.11.2022 ರಎಂದನು
ಆರಕಕೊಬೇಪಿತರನು ನನನ್ನು ಖನಾತಕಗಕ ರಕೊ.50,000/- ಹಣವನನುನ್ನು
ಹನಾಕಿದನಾದ್ದಾರಕ ಎಎಂದರಕ ಸರಿ. ಸದರಿ ದನಾಖಲನಾತಿಯನನುನ್ನು ಸನಾಕ್ಷಿಯನು
ಒಪಿಪ್ಪಿದ ಕನಾರಣ ಅದರ ಪಪ್ರತಿಯನನುನ್ನು ನ.ಡಿ-4 ಎಎಂದನು ಗನುರನುತನು
ಮನಾಡಲನಾಯಿತನು. 2020 ರಲಲ ಆರಕಕೊಬೇಪಿತರಿಎಂದ ನನನ್ನು ಖನಾತಕಗಕ
ರಕೊ.6,50,000/-ಗಳನು ಜಮನಾ ಆಗಿರನುತತ್ತದಕ ಎಎಂದರಕ ಸರಿ.
ಆರಕಕೊಬೇಪಿತರಿಎಂದ ನನಗಕ ರಕೊ.6,50,000/-ಗಳನು ಮರನುಪನಾವತಿ
ಆಗಿದಕ ಎಎಂದನು ನನನ್ನು ನಕಕೊಬೇಟಬೇಸ್ನಲನಾಲಗಲಬೇ ಫಿಯನಾರ್ಗಾದಿನಲನಾಲಗಲಬೇ
C.C. No. 1722/ 221
ಅಥವನಾ ನನನ್ನು ಸನಾಕ್ಷವ್ಯ ಪಪ್ರಮನಾಣ ಪತಪ್ರದಲನಾಲಗಲಬೇ ನಮಕೊದನು ಆಗಿಲಲ
ಎಎಂದರಕ ಸರಿ....
ನನಾನನು ಆರಕಕೊಬೇಪಿತರಿಗಕ ಕಕಕೊಟಕಟ ಎಎಂದನು ಹಕಬೇಳಲನಾದ
ರಕೊ.3,50,000/- ಹಣಕಿಕ್ಕೆಎಂತ ಹಕಚಚ್ಚಿಗಕ ಹಣವನನುನ್ನು ಬಎಂದಿರನುತತ್ತದಕ
ಎಎಂದರಕ ಸರಿ. ಸನಾಕ್ಷಿಯನು ಸಸ್ವತದ ಆರಕಕೊಬೇಪಿತರಕಬೇ ಪವುನದ ಬಎಂದನು
ಹಣವನನುನ್ನು ಪಡಕದನುಕಕಕೊಎಂಡಿರನುತನಾತ್ತರಕ ಎನನುನ್ನುತನಾತ್ತರಕ...
It is further suggested to PW-1 as hereunder :-
ದಿನನಾಎಂಕ 10.07.2019 ರಎಂದನು ನನನ್ನು ಬಳ ರಕೊ.3,50,000/-
ಹಣ ಇತನುತ್ತ ಎಎಂದನು ತಕಕೊಬೇರಿಸಲನು ದನಾಖಲನಾತಿ ಇರನುವವುದಿಲಲ ಎಎಂದರಕ
ಸರಿ. ದಿನನಾಎಂಕ 10.07.2019 ರಎಂದನು ಆರಕಕೊಬೇಪಿತರಿಗಕ ಕಕಕೊಟಟದಕದ್ದಾ
ಎಎಂದನು ಹಕಬೇಳಲನಾದ ರಕೊ.3,50,000/- ಹಣಕಕಕ್ಕೆ ಸಎಂಬಎಂಧ ಪಟಟಎಂತಕ
ಅವರಿಎಂದ ಯನಾವವುದಕಬೇ ದನಾಖಲನಾತಿಯನನುನ್ನು ಪಡಕದನುಕಕಕೊಎಂಡಿರನುವವುದಿಲಲ
ಎಎಂದರಕ ಸರಿ. ಆರಕಕೊಬೇಪಿತರನು ಕಕಕೊಟಟದನಾದ್ದಾರಕ ಎಎಂದನು ಹಕಬೇಳಲನಾದ ಬಡಿಡ್ಡಿಗಕ
ಸಎಂಬಎಂಧ ಪಟಟಎಂತಕ ಯನಾವವುದಕಬೇ ದನಾಖಲನಾತಿ ಇರನುವವುದಿಲಲ ಎಎಂದರಕ
ಸರಿ....
ಆರಕಕೊಬೇಪಿತರನು ಮನಾಸ್ಕ್ಕೆ ಗಳನನುನ್ನು ಎಲಲ ತಯನಾರನು ಮನಾಡನುತನಾತ್ತರಕ
ಎಎಂದನು ಅವರ ಫನಾವ್ಯಕಟರಿಯನನುನ್ನು ನಕಕೊಬೇಡಿರನುವವುದಿಲಲ. ಆರಕಕೊಬೇಪಿತರನು ಏನನು
ಓದಿರನುತನಾತ್ತರಕ ಎಎಂದನು ನನಗಕ ಗಕಕೊತಿತ್ತರನುವವುದಿಲಲ. ನನಾನನು ಆರಕಕೊಬೇಪಿತರ
ಪತಿನ್ನುಯನನುನ್ನು ನಕಕೊಬೇಡಿರನುವವುದಿಲಲ ಹನಾಗಕೊ ಅವರ ಪತಿನ್ನು ಏನನು ಕಕಲಸ
ಮನಾಡನುತನಾತ್ತರಕ ಎಎಂದನು ನನಗಕ ಗಕಕೊತಿತ್ತರನುವವುದಿಲಲ. ನನಗಕ ಆರಕಕೊಬೇಪಿತರ
ಕನುಟನುಎಂಬದ ಹಿನಕನ್ನುಲಕಯ ಬಗಕಗ್ಗೆ ವಕವೈಯಕಿತ್ತಕವನಾಗಿ ಮನಾಹಿತಿ ಇರನುವವುದಿಲಲ....
C.C. No. 1722/ 221
ನ.ಪಿ-1 ಚಕಕ್ನಲಲ ನಮಕೊದನು ಮನಾಡಿರನುವ ದಿನನಾಎಂಕದಲದ
ತಿದನುದ್ದಾಪಡಿ ಮನಾಡಲನಾಗಿರನುತತ್ತದಕ ಎಎಂದರಕ ಸರಿ...
5 ಲಕ್ಷದ ಮಕೊರನು ಚಕಕ್ಗಳನು ಹನಾಗಕೊ 10 ಲಕ್ಷದ ಒಎಂದನು ಚಕಕ್
ಅನನುನ್ನು ಆರಕಕೊಬೇಪಿತರಿಎಂದ ಯನಾವ ಕನಾರಣಕನಾಕ್ಕೆಗಿ ಪಡಕದನುಕಕಕೊಎಂಡಿದಿದ್ದಾಬೇರಿ
ಎಎಂದರಕ ಸನಾಕ್ಷಿಯನು ಸದನಾದ್ದಾಥರ್ಗಾ ಅವರನು ನನಗಕ ಹಣವನನುನ್ನು
ಕಕಕೊಡಬಕಬೇಕನಾಗಿದನುದ್ದಾ, ಸದರಿ ಹಣವನನುನ್ನು ಆರಕಕೊಬೇಪಿತರನು ತನಾವವು
ಕಕಕೊಡನುವವುದನಾಗಿ ಹಕಬೇಳ ಸದರಿ ಮಕೊರನು ಚಕಕ್ಗಳನನುನ್ನು ನನಗಕ
ಕಕಕೊಟಟರನುತನಾತ್ತರಕ ಎನನುನ್ನುತನಾತ್ತರಕ."
From the evidence of complainant reveals that the
alleged amount of Rs. 25,00,000/- given to the accused.
In this case, no evidence has been adduced by the
complainant to prove the transaction which had been
categorically denied by the accused. Further, the
complainant has not placed any material to prove his
financial capacity. No presumption can be drawn that
the complainant has capacity to lend to the tune of Rs.
25,00,000/- merely on the basis of self serving statement
of the complainant without the proof of income of the
complainant. There is a major contradiction in the
evidence of complainant. The statement of complainant
C.C. No. 1722/ 221
not corroborated by the material available on the record.
During the course of arguments, the complainant's
counsel produced the undertaking letter alleged to be
executed by the accused and his wife in favour of
complainant. As per this undertaking letter dated 29-09-
2020, the accused and his wife approached the
complainant and borrowed a loan of Rs. 25,00,000/-
from the complainant in the year 2018, but in the cross-
examination, he stated that he never seen the wife of
accused and he does not know the background of the
accused and his family. When the complainant stated that
he never seen the wife of accuse and he does not know
the backgrounds of accused and his family, the question
of approaching the complainant in the year 2018 does
not arise. It is also alleged that the accused borrowed a
loan of Rs. 25,00,000/- from the complainant in the year
2018 and again the complainant lend a amount of Rs.
3,50,000/- on 10-07-2019. Even according to the
complainant, the accused has not returned the amount of
Rs. 25,00,000/- alleged to be borrowed from him in the
C.C. No. 1722/ 221
year 2018, then what was the necessity for the
complainant again lend amount of Rs. 3,50,000/- to the
accused that too in the cash is not forthcoming in this
case. This definitely hampers the case of the complainant
especially in light of the fact that no other evidence has
been forthcoming in support of the loan transaction.
Considering the evidence on record, it does appear
improbable that a loan of Rs. 25,00,000/- was given in
cash to the accused without any interest or execution of
written document. Further, no proof of solvency has
been placed on record by the complainant in the form of
bank statements. It is well settled that the party who
pleads has also to prove his case. Section 101 of the
Indian Evidence Act, 1872 defines 'burden of proof',
which clearly lays down that whosoever desires any
Court to give judgment as to any legal right or law
dependent on the existence of facts which he asserts, must
prove that those facts exist. When a person is bound to
prove the existence of any fact it is said that the burden
of proof lies on that person. Mere production of the
C.C. No. 1722/ 221
undertaking letter is not sufficient to prove the contents
of the said documents. The testimony of complainant
merely prove the document, but the contents of those
documents were not proved. The particulars mentioned
in the undertaking letter has no evidentiary. Admittedly,
the complainant has not stated in the complaint that the
accused has executed the alleged undertaking letter dated
29-09-2020. Thus, the evidence available on record
falsify the case of complainant and the conduct of
complainant creates doubt in the mind of the court that
alleged undertaking letter is a created document.
20. The complainant has not examined any third
person who would have knowledge of the loan
transaction. It is a well settled principle of law that
prosecution has to stand on its own leg and prove its case
beyond reasonable doubt. Also it has been held by
Hon'ble Supreme Court in Rahul Builders vs. Arihant
Fertilizers and Chemicals and another [(2008) 2 SCC
321], NI Act envisages application of the penal
C.C. No. 1722/ 221
provisions which needs to be construed strictly.
Therefore, even if two views in the matter are possible,
the Court should lean in favour of the view which is
beneficial to the accused. This is more so, when such a
view will also advance the legislative intent, behind
enactment of this criminal liability.
21. In Ashok Baugh vs. Kamal Baugh and
another [2015 (4) JCC (NI) 269], the Hon'ble High
Court of Delhi held that the respondent has rebutted the
presumption under Section 139 of the NI Act of the
existence of a legally enforceable debt by establishing that
there was no receipt of the loan, such advance was not
shown in the ITR of the petitioner complainant and
paying capacity of the complainant being doubtful.
Similarly, in Kashyap and another [2017 (4) JCC (NI)
225], the Hon'ble High Court of Delhi held that the
absence of any evidence to show the solvency of the
respondent for him to have advances loan to the
petitioner leads to the presumption that there was no
C.C. No. 1722/ 221
existing debt. The Hon'ble High Court also observed
that it is difficult to accept the proposition that such
amount of loan would be paid on oral agreement. These
precedents are squarely applicable to the case in hand.
Despite various deficiencies in the version of the accused,
I am unable to overlook the fact that the loan transaction
itself is uncorroborated and unproved. The complainant
has failed to prove his case beyond all the reasonable
doubts and he has failed to fulfill all the ingredients of
offence under section 138 NI Act against the accused.
The accused has been able to rebut the presumption in
favour of the complainant as the standard of proof so as
to prove a defence on the part of the accused is only
'preponderance of probabilities' and inference of
preponderance of probabilities can be drawn not only
from the materials brought on record by the parties but
also by reference to the circumstances upon which he
relies as the same was held by Hon'ble Supreme Court
in M/s Indus Airways Private Limited and others vs.
M/s Magnum Aviation Private Limited and another
C.C. No. 1722/ 221
[CA No.830 of 2014]. In the light of the above
discussions and observations, this Court has no hitch to
hold that the complainant has failed in proving his case
beyond the shadow of reasonable doubts. This court
exonerates the accused for the offence punishable under
Section 138 of Negotiable Instrument Act.
22. It is also settled law that the admission of
signature in a cheque leaf alone will not constitute
admission of execution of the cheque. It can be treated
only as a cheque containing admitted signature of cheque.
The mere production of a cheque or making same as an
exhibit in a case will not prove that the cheque is drawn
by accused. The factum of drawing or execution of
cheque has to be proved by evidence of person or persons
who can vouchsafe for the truth of the facts in issued.
In this case, the statement of complainant not
corroborated by the material available on the record.
Mere production of the cheque is not sufficient to prove
the contents of the said documents. The testimony of
C.C. No. 1722/ 221
complainant merely prove the document, but the
contents of those documents were not proved. Thus, the
evidence available on record falsify the case of
complainant. Despite various deficiencies in the version
of the accused, I am unable to overlook the fact that the
loan transaction itself is uncorroborated and unproved.
The complainant has failed to prove his case beyond all
the reasonable doubts and he has failed to fulfill all the
ingredients of offence under section 138 NI Act against
the accused. The accused has been able to rebut the
presumption in favour of the complainant.
23. The main contention advanced by the defence
counsel is that the complainant collected the amount of
Rs. 6,50,000/- from the accused in the year 2020 itself
and he has not made any endorsement of that payment
in the complaint and no offence under Section 138 of the
N.I. Act will be attracted even though no endorsement
is made on the back side of the cheque leaf an offence will
attract against the accused. It is evident from the material
C.C. No. 1722/ 221
on record that the accused has transferred the amount of
Rs. 6,50,000/- to the account of complainant before the
presentation of complaint, but in the complaint, it is not
sated that the accused has paid a sum of Rs. 6,50,000/-
to him. Even though the complainant has stated that the
said payment made toward interest, there is no mention
in the complaint that the said payment was made towards
interest. According to the accused, he has transferred the
said amount towards the payment of cheque amount.
Admittedly, the complainant has not established the fact
that the accused has transferred the said amount towards
interest. In the absence of the any document and
pleadings in respect of payment of interest, then it is
difficult to accept the contention of the complainant that
the alleged payment made towards interest. Hence, it
can be taken into consideration that the said payment
made by the accused to the complainant towards debt.
The question that arise for consideration is that if the
debt amount is less than the cheque amount whether any
offence under Section 138 will be attracted against the
C.C. No. 1722/ 221
accused. According to Section 138 of the N.I. Act, where
any cheque drawn by a person on an account maintained
by him with a bank for payment of any money to
another person from, out of that account, for the
discharge of any debt or liability, in whole or in part is
returned by the bank, on the ground that the amount in
that account is insufficient to honor the cheque or it
exceeds the amount arranged to be paid from that
account by an agreement made with a bank, such person
shall be deemed to have committed an offence under
Section 138 of the N.I. Act. This deemed provision is
subject to the statutory condition that the cheque has to
be presented within the statutory period in which it is
drawn or within the period of its validity. Secondly, the
payee or holder in due course of the cheque makes a
demand for payment of such amount by giving a notice
in writing to the drawer of the cheque within 30 days on
receipt of information from the bank. If the drawer fails
to make payment of due amount within 15 days on
receipt of notice, the payee or the holder of the cheque
C.C. No. 1722/ 221
can file a complaint. The facts of the case show that the
amount covered by the cheque is bigger than the cheque
amount. A reading of the wordings of the Section shows
that the cheque should be given in discharge of a debt
either in whole or in part or any liability and if the
cheque amount is higher than the debt or liability,
Section 138 of the N.I. Act would not get attracted.
24. The position of part payment of the cheque
amount has been considered by the Division Bench of
Hon'ble High Court of Kerala in Joseph Sartho Vs.
Gopinathan and Another (2008(4) KHC 463), where
it was held as follows;
"Question arose for consideration in this case
was whether, when part payment due under a
cheque was paid, an offence under S.138 of the
Act will be made out or not. There was
conflicting decisions of the High Court on this
point and thus the matter was referred to the
Division Bench for a finality. Court considered
certain key issues regarding making of part
payment due under a cheque. Court concluded
that, if the drawee makes an endorsement
C.C. No. 1722/ 221
regarding the part payment on the cheque and
claimed only the balance amount and if it is
dishonoured, the offence under S.138 will be
made out. Such a pragmatic view was taken,
because any person who makes a part payment
which may be very small compared to the
amount due under the cheque can escape from
the liability."
The accepted connotation of interpretation is that
penal statute should be considered strictly and in case of
doubt, the benefit will go to the accused. The
presumption of law is that a person is innocent until
proved guilty. This means that there is always a
presumption of innocence in favour of an accused and the
burden to prove the case is on the prosecution. That
presumption is available to an accused who is prosecuted
under Section 138 of the Negotiable Instruments Act,
simply because a cheque happened to be dishonoured
itself is not a ground to say that the accused has
committed an offence. There may be exceptional cases
out side the purview of the Section 138. A debt is a
liquidated amount of money owed and payable to
C.C. No. 1722/ 221
another in present or in future which is a pecuniary
liability recoverable by action in respect of money or
demand. Therefore, Section 138 of the N.I. Act shows
not only the debt, but also the liability. A cheque have
been issued in discharge of a debt wholly or in part or of
any liability.
25. The Hon'ble Apex court in NEPC MICON
Ltd., Vs Magna Leasing Ltd., AIR 1999 SC 1952 and
M/s Dlamia Cement (Bharat) Ltd., -Vs- M/s Galaxy
Traders and Agencies Ltd., AIR 2001 SC 676 has
explained the position of law regarding strict
interpretation of penal statute. Apex court reiterated that
even though Section 138 of the N.I. Act is a penal
statute, it should be interpreted taking into consideration,
the legislative intent. However, in Rahul Builders -Vs--
Arihant Fertilizers and Chemicals 2007(4) KLT 977
(SC) Hon'ble Apex court reiterated the principle and
held that the penal provision under Section 138 of the
N.I. Act ought to be interpreted strictly. Therefore the
C.C. No. 1722/ 221
penal statute must be interpreted strictly and in case of
doubt, the benefit should go to the accused.
26. Even if it is assumed that the accused received a
the amount of Rs. 3,50,000/- from the complainant,
the evidence available on record reveals that the
complainant collected the amount of Rs. 6,50,000/- from
the accused and he has collected more than the disputed
amount. The complainant has stated that the said
payments are not related to the present case. Therefore,
in such circumstances, the onus is once again shifted to
the complainant to prove the existence of any other
transaction, in respect of which the said payments are
made by the accused. Even though the complainant stated
that the alleged payments are not related to the present
case, but in his cross examination he has stated that there
is no other transaction with the accused except the
disputed transaction. Further the complainant also
admitted that the cheque leaves belongs to the account of
the accused are in his possession. The point that arises in
C.C. No. 1722/ 221
this case is when a payment of the amount due under a
cheque is paid and if the payee or drawee fails to make an
endorsement and the holder claims the cheque amount
whether any offence under Section 138 of the N.I. Act
will be attracted in this context. Normally, admissions
are not conclusive proof of the matters admitted, but
they may operate as estoppal and one can prove that it
was made under mistake of law or fact or under threat or
inducement. In the absence of such proof of threat or
inducement or mistake of law, admission made by
persons constitutes good evidence against the party
making it. Thus, when there was no material to show
that the admission made by the complainant is not in
another transaction such admission is valuable in
connection with the transaction in this case. In this
context, I have examined the evidence of PW1, who is
the complainant in this case. His evidence shows that Ex.
P-1 was issued in discharge of a debt of Rs. 2,50,000/-.
When it was presented for encashment, it was
dishonoured for the reason of funds insufficient. Ex. P-2
C.C. No. 1722/ 221
is dishonour memo. During cross-examination, PW1
admitted that before institution of the complaint, he
received Rs. 6,50,000/- from the accused. In Ex. P-3
the statutory notice the amount claimed is Rs.
3,50,000/-. An admission is a voluntary acknowledgment
made by one party in legal interest of the existence of
certain facts which are relevant to the fact in issue in a
case. The important characteristic of this evidence is that
it is in the style of binding nature. When an admission is
made by a party during proceeding of a case, it is fully
binding on that party which is a judicial admission. An
indorsement on the back or face of the instrument is
valid under Section 15 of the N.I. Act, when the maker
or holder of a negotiable Instrument signs the same. If
the signature on the back side of the instrument or on the
face of the instrument is made by a third party, neither
the maker nor the holder made any indorsement within
the meaning of the Section. Section 15 of the N.I. Act
reads as follows :-
C.C. No. 1722/ 221
"When the maker or holder of a negotiable
instrument signs the same, otherwise than
such as maker, for the purpose of negotiation,
on the back or face thereof or on a slip of
paper annexed thereto, or so signs for the same
purpose a stamped paper intended to be
completed as a negotiable instrument, he is
said to indorse the same, and is called the
"indorser".
Therefore, a promissory note, bill of exchange or a
cheque can be negotiated by making an indorsement
either on the instrument or on a separate paper annexed
to it.
27. The indorsement for part payment of the
cheque was explained under Section 56 of the N.I. Act.
According to Section 56 of the Negotiable Instruments
Act,
"no writing on a negotiable instrument is
valid for the purpose of negotiation, if
such writing purports to transfer only a
part of the amount appearing to be due
on the instrument; but where such
amount has been partly paid , a note to
that effect may be indorsed on the
C.C. No. 1722/ 221
instrument, which may then be
negotiated for the balance."
The sections prohibit the transfer of an instrument
for a portion of the amount due under it. But the last
portion says that if the amount has been paid in part, the
fact of the part payment may be endorsed on the
instrument and negotiated for the balance amount. When
the maker of the payment makes a part payment, but
that amount is not endorsed and the note is fraudulently
negotiated by the payee without admitting the part
payment, the maker has to pay the full amount of the
instrument to the holder. When court considers part
payment due under a cheque and if drawee makes an
endorsement regarding the part payment on the
instrument and he claims the balance amount by
presenting the cheque for encashment through a bank
and if it is dishonoured, then an offence under Section
138 of the N.I. Act will be made out.
C.C. No. 1722/ 221
28. In Angu Parameshwari Textile (P) Ltd., and
others -Vs- Sri. Rajam and Co. 2001 Company Cases
Vol.(105) 186, the Hon'ble Madras High Court held
that;
"For the purposes of Section 138 of the
Negotiable Instruments Act, 1881, the
cheque should be towards the discharge
of either the whole debt or part of the
debt. If the cheque is for more than the
amount of the debt due, Section 138
cannot be attracted."
Here the more than the cheque amount was
collected by the complainant from the accused and such
payment is admitted by PW1 and no endorsement was
made on the back of the cheque or face thereof and on
prosecution complainant claimed cheque amount, no
offence under Section 138 of the N.I. Act is made out.
Further, the complainant has not stated in the cross
examination that he has collected the amount of
Rs.6,50,000/- from the accused. The evidence adduced in
this case is not sufficient to convict the accused under
Section 138 of the Negotiable Instrument Act.
C.C. No. 1722/ 221
29. Another contention of the defence counsel is
that the demand notice was not served to the accused.
The burden is on the complainant that the notice was
dispatched by post with correct address. Per contra,
Learned Counsel for complainant argued that the notice
was duly served on the accused. Admittedly, the
requirements of Section 138 (b) of the Negotiable
Instrument Act is that notice should be sent to the
drawer of the cheque. Clause (b) of the proviso to
Section 138 of the Negotiable Instrument Act lays down
that notice regarding dishonor of the cheque should be
sent to the drawer of the cheque within 15 days of the
receipt of intimation regarding the dishonor of the
cheque. Considering the provision contained in Section
27 of the General Clauses Act once the sender establishes
the fact that the notice was dispatched by post with
correct address written thereon, it should be deemed to
have been served on the sendee unless he establishes that
it was not really served and that he was not responsible
for such non-service.
C.C. No. 1722/ 221
30. The Statue stipulates that the holder of the
cheque makes a demand for the payment of money
covered by the cheque by issuing demand notice in
writing to the drawer of within thirty days of the receipt
of information by him from the bank regarding the
return of the cheque as unpaid. Notice in writing, which
is required under Section 138 (b) of Negotiable
Instrument Act, need not necessarily be only by a
registered post, and it can as well be by a telegram or by
a letter. Service of notice of demand in Clause (b) of
proviso t section 148 is a condition precedent for filing a
complaint under Section 138 of the Negotiable
Instrument Act. Whether the notice was severed or not
and how it was served and which service was effected on
the accused person namely, whether by registered post,
or by hand, or by courier, is a matter imposes burden
on the complainant to service of demand notice upon the
accused.
C.C. No. 1722/ 221
31. In the case of Harman Electronics (P) Ltd. v.
National Panasonic India (P) Ltd., AIR 2009 SC 1168
Hon'ble Apex Court held that as hereunder:-
' It is one thing to say that sending of a notice
is one of the ingredients for maintaining the
complaint but it is another thing to say that
dishonour of a cheque by itself constitutes an
offence. For the purpose of proving its case
that the accused had committed an offence
under Section 138 of the Negotiable
Instruments Act, the ingredients thereof are
required to be proved. What would constitute
an offence is stated in the main provision. The
proviso appended thereto, however, imposes
certain further conditions which are required
to be fulfilled before cognizance of the offence
can be taken. If the ingredients for constitution
of the offence laid down in provisos (a), (b) and
(c) appended to Section 138 of the Negotiable
Instruments Act are intended to be applied in
C.C. No. 1722/ 221
favour of the accused, there cannot be any
doubt that receipt of a notice would ultimately
give rise to the cause of action for filing a
complaint. As it is only on receipt of the notice
that the accused at his own peril may refuse to
pay the amount. Clauses (b) and (c) of the
proviso to Section 138 therefore must be read
together. Issuance of notice would not by itself
give rise to a cause of action but
communication of the notice would.'
32. The requirement of giving notice is mandatory
for maintaining a complaint, but there is no procedure
prescribed under Sec.138 of the NI Act for serving notice
on the accused. Notice means notice in writing and not a
verbal demand to the drawer. The Hon'ble Apex court
in K.Bhaskaran v. Sankaran Vaidhyan Balan [(1999) 7
Supreme Court Cases 510] held that once notice has
been sent by a registered post with acknowledgment due
in the correct address, it must be presumed that the
C.C. No. 1722/ 221
service has been made effective. In V. Rajakumari v. P.
Subbarama Naidu [(2004) 8 Supreme 774] it was held
that statutory notice under Section 138(b) of the NI Act
sent in the correct address of the drawer but returned
with endorsement must be presumed to be served on the
drawer and the burden to show that accused/drawer had
managed to get an incorrect postal acknowledgment letter
on the complainant have to be considered during trial
and on the background facts of the case.
33. The provision under Sec.138 of the NI Act
shows that where a cheque issued by a drawer in
discharge of any debt or liability, in whole or in part, is
returned by the bank unpaid, because of the amount of
money standing to the credit of that account is
insufficient to honor the cheque or that it exceeds the
amount arranged to be paid from that account, such
person shall be deemed to have committed an offence.
This is subject to the proviso to Section 138 that the
cheque should have been presented before the bank
C.C. No. 1722/ 221
within a period of six months from the date on which it
is drawn or within the period of its validity, whichever is
earlier. The payee must make a demand for the payment
of the said amount of money by giving a notice in
writing, to the drawer of the cheque, within thirty days
of the receipt of information by him from the bank
regarding the return of the cheque as unpaid. In spite of
the demand, if the drawer fails to make the payment of
the said amount of money to the payee within fifteen
days of the receipt of the notice, a cause of action would
arise for prosecuting him under Section 138 of the NI
Act. It is mentioned under Sec.142 of the NI Act that the
court shall take cognizance of an offence punishable
under Sec.138 of the NI Act upon receipt of a complaint
in writing by the payee or as the case may be, the holder
in due course of the cheque. Proviso to Sec.138(c) says
that such complaint must be made within one month of
the date on which the cause of action arises. However,
discretion has been given to the court to take cognizance
of the complaint after the expiry of the period of
C.C. No. 1722/ 221
limitation, if the complainant satisfies the court that he
had sufficient reason for not making the complaint
within the limitation period.
34. A bare reading of Sec.138 of the Negotiable
Instruments Act shows that the purport of Sec.138 is to
punish the dishonest drawers of cheque who evade and
avoid their liability. As stated in Clause(b) of the
proviso, the payee or the holder of the cheque in due
course is necessarily required to serve a written notice on
the drawer of the cheque within 15 days from the date of
intimation received from the bank about the dishonor of
the cheque. It is clear from Sec.27 of the General Clauses
Act, 1897 and Sec.114 of the Evidence Act, 1872, that
once a notice is sent by registered post by correctly
addressing to the drawer of the cheque, the service of
notice is deemed to have been completed. The
requirements under Sec.138(b) stand complied, if notice
is sent in the above prescribed manner. In this context, I
may refer an decision of the Hon'ble Apex court in
C.C. No. 1722/ 221
M/s. Dalmia Cement (Bharat) Ltd. v. M/s. Galaxy
Traders and Agencies Ltd. [AIR 2001 Supreme Court
676] in which it was held that the presumption is
rebuttable. But, in the subsequent decision M/s.
Harman Electronics (P) Ltd. and Anr. v. M/s.
National Panasonic India Ltd. [AIR 2009 Supreme
Court 1168] it was held that the presumption in support
of service of notice depends upon the facts and
circumstances of each case. In Jagdish Singh v. Natthu
Singh (1992) 1 SCC 647 , State of M.P. v. Hiralal
(1996) 7 SCC 523 , V. Rajkumari v. P. Subrama
Naidu 2005 SCC (Cri) 393 Hon'ble Apex court held
that when a notice is sent by registered post and is
returned with postal endorsement "refused" or "not
available in the house" or "house locked" or "shop
closed" or "addressee not in station", due service has to
be presumed. However, the drawer is at liberty to rebut
this presumption either by adducing evidence or on the
basis of evidence produced by the complainant.
C.C. No. 1722/ 221
35. The Hon'ble Apex court in New India Sugar
Mills Ltd. v. CST [AIR 1963 SC 1207 ] held that the
interpretation of the statute should be based on the object
which the intended legislation has sought to achieve,
which reads as follows:
"It is a recognized rule of interpretation
of statutes that expressions used therein
should ordinarily be understood in a sense
in which they best harmonise with the
object of the statute, and which effectuate
the object of the Legislature. If an
expression is susceptible of a narrow or
technical meaning, as well as popular
meaning, the Court would be justified in
assuming that the Legislature used the
expression in the sense which would carry
out its object and reject that which
renders exercise of its power invalid."
C.C. No. 1722/ 221
36. My attention has been drawn to the decision of
the Hon'ble Apex court reported in D. Vinod
Shivappa v. Nanda Belliappa [(2006) 6 Supreme Court
Cases 456] which reads as follows:
"14. If a notice is issued and served upon
the drawer of the cheque, no controversy
arises. Similarly if the notice is refused by
the addressee, it may be presumed to have
been served. This is also not disputed. This
leaves us with the third situation where the
notice could not be served on the addressee
for one or the other reason, such as his
non-availability at the time of delivery, or
premises remaining locked on account of
his having gone elsewhere, etc. etc. If in
each such case the law is understood to
mean that there has been no service of
notice, it would completely defeat the very
purpose of the Act. It would then be very
easy for an unscrupulous and dishonest
C.C. No. 1722/ 221
drawer of a cheque to make himself scarce
for some time after issuing the cheque so
that the requisite statutory notice can
never be served upon him and
consequently he can never be prosecuted.
There is good authority to support the
proposition that once the complainant, the
payee of the cheque, issues notice to the
drawer of the cheque, the cause of action to
file a complaint arises on the expiry of the
period prescribed for payment by the
drawer for the cheque. If he does not file a
complaint within one month of the date on
which the cause of action arises under
clause (c) of the proviso to Section 138 of
the Act, his complaint gets barred by time.
Thus, a person who can dodge the postman
for about a month or two, or a person who
can get a fake endorsement made regarding
his non-availability can successfully avoid
C.C. No. 1722/ 221
his prosecution because the payee is bound
to issue notice to him within a period of 30
days from the date of receipt of
information from the bank regarding the
return of the cheque as unpaid. He is,
therefore, bound to issue the legal notice
which may be returned with an
endorsement that the addressee is not
available on the given address.
37. We cannot also lose sight of the fact that the
drawer may by dubious means manage to get an incorrect
endorsement made on the envelope that the premises has
been found locked or that the addressee was not available
at the time when postman went for delivery of the letter.
It may be that the address is correct and even the
addressee is available but a wrong endorsement is
manipulated by the addressee. In such a case, if the facts
are proved, it may amount to refusal of the notice. If the
complainant is able to prove that the drawer of the
cheque knew about the notice and deliberately evaded
C.C. No. 1722/ 221
service and got a false endorsement made only to defeat
the process of law, the court shall presume service of
notice. This, however, is a matter of evidence and proof.
Thus even in a case where the notice is returned with the
endorsement that the premises has always been found
locked or the addressee was not available at the time of
postal delivery, it will be open to the complainant to
prove at the trial by evidence that the endorsement is not
correct and that the addressee, namely, the drawer of the
cheque, with the knowledge of the notice had
deliberately avoided to receive notice.
38. In the above decision, it is held that each
question with regard to the service of notice has to be
answered by reference to the facts of the case and no rule
of universal application can be laid down in all cases
when notice is not served on account of non availability
of the addressee in the given address. If notice is served
upon the drawer of the cheque, no controversy arises.
However, if the addressee refuses the notice it may be
C.C. No. 1722/ 221
presumed that the notice have been properly served.
Another situation is that the notice could not be served
on the addressee on the ground of his non availability at
the time of delivery or the house is remaining locked on
account of his non availability in the station or in India
or he has gone elsewhere permanently etc., in each such
cases it means that there has been no service of notice. If
there is no service of notice in the aforesaid grounds, it
would completely defeat the purpose of the Negotiable
Instrument Act. If complainant is able to prove that the
drawer of the cheque knew about the notice and
deliberately evaded from the premises making a false
endorsement, it will defeat the process of law and in such
situation the apex court held that the Court shall
presume that there was proper service of notice. This is
really a matter of evidence and proof. Therefore, if the
service of notice is fraudulently refused or avoided by the
accused in an unscrupulous manner, that is a matter of
evidence and that fact can be proved on the basis of
evidence.
C.C. No. 1722/ 221
39. In this case, the complainant knew that the
address of the accused is that Mariyappanapalya and not
Mariyannanpalya and he is not available in the said
address, even then, he issued a notice under Sec.138(b) of
the NI Act. The complainant has no case that the accused
deliberately evaded from his residence in order to avoid
service of notice. On the other hand, when complainant
issued notice under Section 138(b) of the NI Act, he
knew that the accused is not residing in the said address,
the question arises is whether the said service of notice in
the available address is sufficient for proper compliance of
Sec.138(b) of the Negotiable Instrument Act. If the
complainant is able to prove that the drawer of the
cheque deliberately evaded service, then the presumption
of service will attract. On the other hand, if the
registered notice as contemplated under Section 138(b) of
the Negotiable Instrument Act was issued by the
complainant and the complainant at the time of issuance
of notice knew that the accused is not residing in the said
address there is no deliberate avoidance of notice and it is
C.C. No. 1722/ 221
presumed that there is no notice under Section 138(b)
and no presumption of service can be drawn against the
drawer. In such a situation, prosecution under Section
138 of the Negotiable Instrument Act is not possible and
the complainant will have every right to approach the
civil court for proper remedies. However, no evidence
has been adduced by the complainant with regard to the
knowledge of the accused about notice. Therefore, the
endorsement made by the postal authorities in the notice
itself is not sufficient to draw a presumption of service of
notice. An enquiry with regard to the knowledge of non
availability at the residence is necessary in this matter.
The evidence in a case can be given of fact in issue and
relevant fact alone. The court is bound to prevent
admission of inadmissible evidence. When the relation of
a relevant fact to the fact in issue is proximate it is called
direct evidence and is admissible. The credibility of a fact
depend upon various factors. If one witness has no
knowledge of a fact the evidence given by that witness is
worthless. Section 27 of the General Clause Act gives a
C.C. No. 1722/ 221
presumption of service of notice sent by post and the
dispatcher of the notice can claim the benefit of
presumption of service and it is a rebuttable presumption.
If the evidence of the witness discloses his inability to
speak about the service of notice, it is difficult for the
court to accept that evidence for drawing the above
presumption.
40. The offence under Sec.138 of the NI Act is not
a natural crime like hurt or other offence under the
Indian Penal Code, but, it is an offence created by a legal
fiction in the statute, transformed civil liability into
criminal liability. The onus of proving all the ingredients
of the offence in a criminal case is on the prosecution.
When an accused person is charged with having
committed an offence, it is for the prosecution to prove
all the ingredients of the offence. It is only when this
burden is discharged, the accused has to explain the
essential elements in the prosecution case which would
negative it. Even after the civil liability transformed into
C.C. No. 1722/ 221
criminal liability under restricted conditions by
amendment of the Negotiable Instrument Act, by
introducing the relevant provisions, the strict liability
provided for criminal cases has not changed. In this
context, the decision of the Hon'ble Apex court in D.
Vinod Sivappa v. Nanda Belliappa [(2006) 6 Supreme
Court Cases 456] is relevant.
41. Undoubtedly, the accused has a right to pay the
money within 15 days from the date of the service of
notice and only when it fails to pay, it is open for the
complainant to file a case under Section 138 of the
Negotiable Instruments Act. That being the position and
in the complaint itself having not been mentioned that
the notice has been served, on the assertions made in the
complaint itself is not maintainable. Absolutely, there
is no an iota of evidence on the record to show that legal
notice has been served on the accused. Admittedly, the
complainant has not examined the official of the Postal
Authorities to show that the notice was served on the
C.C. No. 1722/ 221
accused. Non-examination of postman is fatal to the case
of the complainant. Further, the complainant has not
placed any material to show that the Mariyannan palya
and Mariyappana palys are one and the same location and
the mariyannan palya is also called as Mariyappana playa.
Therefore, the contention of complainant that the notice
was severed on accused cannot be acceptable.
42. Admittedly, once the cheque relates to the
account of the accused and he accepts and admits his
signature on the cheque, then initial presumption as
contemplated u/Sec.139 of N.I. Act has to be raised by
the court in favour of the complainant. The presumption
referred to u/Sec.139 of N.I. Act is a mandatory
presumption and not a general presumption. But, the
accused is entitled to rebut the said presumption by
probable and acceptable evidence. Admittedly, in this
case, the accused had also not taken any legal action
against the complainant after receipt of the summons to
recover the cheque in issue from him. Merely, the
C.C. No. 1722/ 221
accused has not taken any legal action against the
complainant is not sufficient to draw the presumption
against him, because in this case, the complainant failed
to prove and establish his case beyond all reasonable
doubt. In this case, the complainant failed to prove the
existence of legally enforceable debt. Hence, I answer
point No.1 and 2 in the "Negative".
POINT No.3:-
43. Section 139 of N.I. Act creates presumption
that the cheque received in the nature referred to Section
138 of N.I. Act is always issued in discharge of debt or
other liability. For a successful prosecution of offence
under section 138 of the Act, complainant must allege
and prove that the cheque was drawn or executed by the
accused. In the absence of proof of lending loan to the
accused, presumption cannot be drawn in favour of the
complainant. In this case, the accused had a probable
defence and complainant failed to prove and establish his
case beyond all reasonable doubt. Hence, the benefit of
C.C. No. 1722/ 221
doubt given to the accused. In view of my findings to the
above point, I proceed to pass the following :
ORDER
The accused is not found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is acquitted acting Under Section 255(1) of Cr.P.C of the charges leveled against her for the offence punishable under Section 138 of Negotiable Instruments Act.
Bail bond of accused is canceled and surety stands discharged.
(Dictated to the Stenographer, transcribed and typed on Lap-top, then corrected by me, Print out taken, signed and then pronounced by me in the open court on this the 23rd day of February 2023) (K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.
C.C. No. 1722/ 221ANNEXURE List of witnesses Examined for Prosecution:
PW.1 : V. Anil Kumar List of documents marked for prosecution :
Exp.1 : Cheque Exp.1(a) : Signature of accused Exp.2 : Banker's endorsement Exp.3 : Office copy of Legal notice Exp.4 : Postal receipt Exp.5 : Postals Endorsement List of witnesses examined for accused :
DW-1 : Naveen Sagi List of documents marked for accused :
ExD.1 : Copy of statement before police ExD.2 : Copy of transaction details ExD.3 : Copy of transaction details ExD.4 : Copy of transaction details ExD.5 : C/c of FIR C.C. No. 1722/ 221 ExD.6 : C/c of complaint ExD.7 : C/c of Charge-Sheet (K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.C.C. No. 1722/ 221
Dt: 23.02.2023 C-
A-
For Judgment (Order pronounced in open court vide separate judgment) ORDER The accused is not found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is acquitted acting Under Section 255(1) of Cr.P.C of the charges leveled against her for the offence punishable under Section 138 of Negotiable Instruments Act.
Bail bond of accused is canceled and surety stands discharged.
(K. LAKSHMI) IV Addl. SCJ & ACMM, Bengaluru.C.C. No. 1722/ 221 C.C. No. 1722/ 221 C.C. No. 1722/ 221 C.C. No. 1722/ 221 C.C. No. 1722/ 221 C.C. No. 1722/ 221