Bangalore District Court
Filed The Complaint On 12.06.2013 vs On 08.07.2015 And Explained To The ... on 3 November, 2016
IN THE COURT OF THE XLII ADDL. CHIEF METROPOLITON MAGISTRATE
NRUPATHUNGA ROAD, BENGALURU CITY
Present:-
Present:- Sri. A.V. Patil, B.Com., LL.B.(Spl)
XLII A C M M,
Bengaluru City.
Dated this the 3rd day of November, 2016
JUDGMENT U/S 355 OF Cr.P.C.
CASE NO.29250 OF 2014
1. Sl.No. of the case : C.C.No.29250/2014
2. The date of commence of Evidence: 17.07.2015
3. The date of Institution : 12.06.2013
4. Name of the Complainant : M/s Chandan films
No.29, 5th Main road,
Gandhinagar,
Bangalore-560009.
Rep by its Proprietor
Sri. Chandanmal Bafna
Aged about 73 years
(Dead)
by his LR's
(i) Sri. Suresh Bafna
S/o late Chandanmal Bafna
Aged about 53 years
Partner M/s Chandan films
No.29, 5th main road,
Gandhinagar,
Bengaluru-560009.
2 CC No.29250/2014
(ii) Sri. Hasmukh Bafna
S/o late Chandanmal Bafna
Aged about 50 years,
Partner M/s Chandan films
No.29, 5th main road,
Gandhinagar,
Bengaluru-560009.
Vs.
5. Name of the accused : Sri. A. Narasimha Murthy
Proprietor,
Aged about 60 years,
M/s SLN Movie Makers,
No.4/1, 4th Main road,
Gandhinagar,
Bengaluru- 560009.
6. The offence complained
of or proved : U/s.138 of N.I. Act
7. Plea of the accused on
his examination : Pleaded not guilty
8. Final Order : Accused is acquitted
9. Date of such order : 03.11.2016.
*****
JUDGMENT
1. This case has been registered against the accused on the basis of the complaint filed by the complainant u/s 200 of Cr.P.C for the offence punishable u/s 138 r/w 142 of N.I. Act.
2. The brief facts of the complainant's case is that : 3 CC No.29250/2014
The accused and complainant are businessmen engaged in the business of films/cinema and are having a good business relationship. The accused approached the complainant for purposes of financial assistance for the production of a Kannada film titled 'LOVE LAVIKE' starring Naveen Mayur Chaitra and others. The accused entered into an agreement dated 20.02.2002 with the complainant and in terms of the said agreement complainant had paid an amount of Rs.3,00,000/- to the accused. The accused approached the complainant in the month of March 2013 and requested to bear with him and not to demand interest till release of the film and promised that he will pay principal amount of Rs.3,00,000/-. Accordingly issued 3 cheques bearing No.220456 dated 21.03.2013, 220457 dated:25.03.2013 and cheque bearing No.220458 dated:25.03.2013 each for sum of Rs.1,00,000/- drawn on Vijaya Bank, City Market Branch, Bengaluru. The complainant presented the said cheque for encashment through his banker Corporation Bank, SC Road, Bangalore. But to the utter shock of the complainant the said cheques were returned by the bankers of the accused with an endorsement "contact the accused". There after the complainant contacted the accused and informed him about the bouncing of the said cheques. At that time the accused asked the complainant to present the said cheques again for encashment. Believing the words of the accused on 25.03.2013 complainant again presented the said cheques for encashment. But the said cheques were returned back with an shara 4 CC No.29250/2014 'Not Drawn on us'. There after on 14.05.2013 complainant got issued legal notice to the accused through RPAD calling upon the accused to pay the cheque amount within 15 days from the date of receipt of the notice. The accused managed to send back the same with a Shara 'No such address in 4th Main Bangalore-9' and the same was returned on 17.05.2013. Accused even after having knowledge of the above said notice has not paid any amount to the complainant. Accordingly, the complainant filed the complaint on 12.06.2013.
3. In pursuance of the summons, the accused has appeared through counsel and got enlarged on bail by executing necessary documents. The copy of the complaint was furnished to the accused, as required under law. As there is sufficient material, plea was recorded against the accused on 08.07.2015 and explained to the accused in his vernacular, for which the accused pleaded not guilty and claims to be tried.
4. In order to prove the case, the Proprietor of the complainant company examined as PW1 and got marked Ex.P1 to 12 and closed the side. Then the statement u/s 313 Cr.P.C. came to be recorded on 11.09.2015, wherein the incriminating evidence appearing against the accused was read over the explained to the accused. Accused got examined himself as DW1 and got marked Ex.D1.
5. When the matter posted for final arguments the complainant reported as dead and his legal representatives brought on record as complainant (i) and (ii). The complainant (i) also examined as PW2 and 5 CC No.29250/2014 marked as Ex.P13.
6. Heard the arguments and perused the records.
7. On the basis of the above facts, the following points arise for my consideration:
1) Whether the complainant proves that the accused towards discharge legal recoverable debt issued cheques No.(1) 220456 dated 21.03.2013 (2)220457 dated 25.03.2013 & (3)220458 dated 24.03.2013 each for Rs.1,00,000/- drawn on Vijaya Bank, City Market Branch, Bengaluru in favour of complainant on presentation for encashment it was returned as "Not Drawn on us" and in spite of receipt of legal notice, the accused failed to pay the cheques amount within the statutory period and thereby the accused has committed an offence punishable u/s 138 of N.I.Act?
2) What Order?
8. My findings on the above points are as under :
Point No.1 : In the negative Point No.2 : As per final order, for the following REASONS
9. Point No.1:-
No.1 In order to prove the case, the Proprietor of the complaint filed affidavit in lieu of examination-in-chief and examined himself as PW1. He has reiterated the complaint allegations on oath. He also got marked documents Ex.P1 to 12. Ex.P1 is the complaint, Ex.P2 to 4 are the cheques, Ex.P2(a) to Ex.P4(a) are the signatures of the 6 CC No.29250/2014 accused, Ex.P5 to Ex.P10 are the Bank memo's, Ex.P11 is the office copy of the legal notice, Ex.P11(a) is the Postal receipts, Ex.P11(b) is the returned postal receipt, Ex.P11(bb) is the legal notice found in returned postal cover, Ex.P12 is the agreement. In the cross examination accused has put up specific defence that, he requested the complainant for financial assistance. The complainant agreed to pay the amount and collected the three blank signed cheques and two blank singed bond papers and four letter heads. Even after collecting the said documents the complainant fails to pay the amount to the complainant saying the negative rights of the film is given to Gemini Laboratories. The accused is not due to pay any amount to the complainant. The cheques which were collected in the year 2002 have been misused and filed false case.
10. To substantiate his contention accused examined himself as DW1. He has deposed the stand taken during the course of cross examination of PW1 and got marked his Bank statement as Ex.D1.
11. This is all the oral and documentary evidence placed on record by the complainant and the accused.
12. The learned counsel for complainant argued that in the year 2002 accused approached the complainant for the purpose of financial assistance for the production of Kannada film Lava Lavike. The accused entered into an agreement on 20.02.2002, placed the negative rights of the said film with the complainant and borrowed an amount of Rs.3 7 CC No.29250/2014 lakhs from the complainant. As per the agreement complainant had paid Rs.1 lakh by way of cheque and Rs.2 lakh by way of cash. To substantiate the said contention the accused has produced the pass book at Ex.P13. The accused has not disputed his signature on agreement, cheques pertains to his account and his signature on it. It is the contention of the accused that the complainant took signatures on blank stamp paper and the cheques. But no action is taken by the accused against the complainant for the filing up of the said stamp paper and the cheques. The legal notice is sent to the correct address of the accused. The summons of this case is served upon the accused on the very same address. Accused has not placed any rebuttal evidence. The ingredients of Sec.138 and 142 are duly complied with. Hence, prayed to convict the accused.
13. The learned counsel for accused argued that the evidence placed on record clearly discloses that the accused has no liability to pay any amount to the complainant. The dispute between the parties is civil in nature and it cannot be adjudicate in quasi juridical proceedings. The film referred by the complainant is not at all released. The account of the accused maintained in the bank was closed in the year 2007. Though PW1 has stated that the amount paid to the accused is reflected in his Income Tax returns has not produced in this case. Non production of said documents creates doubt about the case of the complainant. As per the complainant allegations accused entered into 8 CC No.29250/2014 agreement on 20.02.2002 and borrowed an amount of Rs.3,00,000/-. But nothing has been produced on record to show that he had actually lent Rs.3 lakh to the accused. Since then no correspondence between them and after lapse of more than 11 years all of a sudden how it is possible to issue a cheque by the accused in favour of the complainant. The claim made by the complainant is clearly time barred and does not fall within the purview of legally recoverable debt. The 3 cheques, blank signed stamp paper collected by the complainant by saying the accused would provide the financial assistance and subsequently refused pay the money saying negative right of the film given to the Jemeni Lab. Then accused requested to return the cheques and documents collected by the complainant, but fail to return and after lapses of more than 11 years filed this case. The Ex.D1 produced by the accused clearly reveals that other cheques were encashed in the year 2002 itself. This fact presupposes that the complainant collected the cheque in the year 2002 itself. More over the account of the accused was closed in the year 2007 itself. In view of the same the cheque dishonored on the ground that 'no such account'. To prove the case against the accused u/s138 of N I Act the ingredients as required under law are not strictly complied with. No legal notice served upon the accused. Hence, he prayed to dismiss the compliant. In support of his contention he placed reliance on the following citations:
1. (2008) 2 SCC (Cri) 166 (Krishna Janardhan Bhat v/s 9 CC No.29250/2014 Dattatraya G Hegde)
2. (2013) 3 SCC 86 ( Vijay v/s Laxman and another)
3. 2008(6) Kar. L.J 756 (K. Narayana Nayak v/s M. Shivarama Shetty)
4. ILR 2009 KAR 2331 (B. Indramma v/s Sri Eshwar)
5. ILR 2008 KAR 4629 (Shiva Murthy v/s Amruthraj)
6. AIR 2008 SC 278 (John K John v/s Tom Varghese & Anr)
7. Crl.A.No.1757/01 D.D 13.08.2002 Hon'ble High Court of Karnataka (Mrs.J. Kanchana v/s Smt.K.Indrani)
14. I have gone through the citations relied on by the learned counsel for the accused and kept in mind the ratio laid down in the said citations while appreciating the evidence on record and coming to the final conclusion.
15. In the light of the arguments the question before the Court is whether the complainant proved that the accused issued Ex.P2 to 4/cheques towards the repayment of the legally enforceable debt. If the answer is in affirmative then the question arises for consideration whether accused rebuts the presumption? If the accused successfully able to rebut the presumption then he is entitle for acquittal. If the accused fails to establish the presumption, he shall have to be convicted. To ascertain the same the oral & documentary evidence placed on record by the parties to the present case has to be taken into consideration.
16. The accused has not disputed Ex.P2 to 4/cheques belongs to his 10 CC No.29250/2014 account and signature on it. In view of the principle lay down in catena of decisions the complainant discharged his initial burden. By virtue of section 118 and 139 of Negotiable Instruments Act, the presumption is in favour of the holder of the cheques i.e., complainant. The burden lies on accused to lead the rebuttal evidence to disprove the fact that he has not issued Ex.P2 to 4/cheques to the complainant for discharge of debt or liability.
17. The accused sought acquittal on several grounds viz., the claim made by the complainant is not legally recoverable debt or other liability and it is a time barred debt, the complainant has no capacity to lend such huge amount and the material elicited in the cross examination of PW1 is sufficient to rebut the presumption, the reason for dishonour of cheques does not attract Sec.138 of the N.I Act and according to him the cheque which was collected in the year 2002 with a assurance to lend a money has been misused by the complainant and the without lending money filed this false case.
18. Before considering the material on record let me note the ratio lay down by Hon'ble High Court of Karnataka with regard to the claim of time barred debt rendered in Criminal Appeal No.545/2010 (K V Subba Reddy Vs N Raghava Reddym) disposed on 28.02.2014. In the said decision, Hon'ble High Court of Karnataka placed reliance on a Judgment of Hon'ble Kerala High Court reported in 2001 Crl.J.24 (Sasseriyil Josseph V/s Devassia) wherein it has held that "Sec.138 of 11 CC No.29250/2014 Negotiable Instrument Act is attracted only if there is legally recoverable debt and it cannot be said that time barred debt is is legally recoverable debt".
19. In the said decision, Hon'ble High Court of Karnataka further noticed that the Judgment of Hon'ble Kerala High Court referred above was challenged before the Hon'ble Supreme Court of India in Special Leave Appeal (Crl) No.1785/2001 (Sasseriyil Josseph V/s Devassia) and extracted the observation made by the Hon'ble Apex Court which reads as under :
"We have heard learned counsel for the petitioner. We have perused the judgment of the High Court of Kerala in Criminal Appeal No.161 of 1994 confirming the judgment/order of acquittal passed by the Addl. Sessions Judge, Thalassery in Criminal Appeal No.212 of 1992 holding inter alia that the cheque in question having been issued by the accused for due which was barred by limitation limitation the penal provision under Section 138 of the Negotiable Instrument Act is not attracted in the case.
On the facts of the case as available on the records and the clear and unambiguous provision in the explanation of Sec.138 of the Negotiable Instrument Instrument Act the judgment of the lower appellate court as confirmed by the High Court is unassailed.
Therefore, the special leave petition is dismissed".
20. On consideration of Judgment of Hon'ble High Court of Karnataka, Hon'ble Kerala High Court and Hon'ble Apex Court, in considered view of this Court, view taken by the Hon'ble High Court of 12 CC No.29250/2014 Kerala has been confirmed by Hon'ble Supreme Court and placing reliance on both the Judgments, the Hon'ble High Court of Karnataka held that "the time barred debt cannot be said as legally recoverable debt"
21. In light of the views taken in above referred decisions let me consider the case on hand. As per the complaint allegations the accused had issued disputed cheques in the month of March 2013 towards payment of the amount alleged to have received as per agreement dated 20.02.2002. The said agreement is produced at Ex.P12. On careful perusal of the said agreement it is noticed that the agreement is dated 25.02.2002 and not 20.02.2002 as alleged in the complaint. Even otherwise also the clause stated in page No.2 with regard to the repayment of the amount is very relevant which goes to the root of the defence taken by the accused. Therefore, the relevant clause which is mentioned in page No.2 is extracted and reproduced here:
(2) "For the finance received by the FIRST PARTY, the FIRST PARTY shall pay a commission of Rs.30,000/- (Rs.
Thirty Thousand Only) per month or part thereof to the SECOND PARTY and shall pay the entire Principal and Commission to the the SECOND PARTY within SIXTY DAYS from this date or at least Five years ahead of the premier release of the 'Said Picture' whichever is earlier.
earlier It is evident from the above reproduced clause accused shall pay the principal amount along with the commission within 60 days or 5 days earlier to the release of the picture whichever is earlier. It means if 13 CC No.29250/2014 the picture is released within sixty days from the date of agreement 5 days earlier to the release of the picture accused shall pay the amount and in case picture is not released within sixty accused shall pay the amount in 60 days. In the instant case, the evidence on record discloses that so far picture has not released. Then the other clause applies which states that within 60 days from 25.05.2002 the complainant shall pay the amount i.e., on or before 25.07.2002.
22. The material placed on record clearly reveals that the disputed cheques are issued in 2013 in respect of the transaction took place in 2002. The decisions referred above squarely applicable to the facts of the case on hand. Therefore, I have no hesitation to hold that the disputed cheques were issued towards discharge of time barred debt. No doubt, the promise to pay time barred debt is valid and enforceable, if it is made in writing and signed by the person to be charged there with. But, it is clear that the penal provision under Section 138 of the Negotiable Instrument Act that in order to attract the penal previsions in bouncing of cheque in chapter XVII, it is essential that the dishonored cheque should have been issued in discharge, wholly or in part or any other debt or liability of the drawer to the payee. The explanation of said section defines that debt or other liability means legally enforceable debt or other liability. In the instant case cheques in question was alleged to have issued by the accused in discharge of time barred debt. Therefore, it cannot be said that cheques in question 14 CC No.29250/2014 issued for legally enforceable debt. In the light of view taken by the Hon'ble Apex Court, Hon'ble High Court of Karnataka and Kerala, the material placed on record is sufficient to hold that the claim made by the complainant is not legally recoverable debt. Hence, the complainant for the offence u/s 138 is not maintainable.
23. Secondly, it is the contention of the accused is that the material placed on record by the accused is sufficient to rebut the presumption. As noted supra in view of the principle lay down in catena of decisions and by virtue of section 118 and 139 of Negotiable Instruments Act, the complainant discharged his initial burden and the presumption is in favour of the holder of the cheques i.e., complainant.
24. Whether the said presumption is rebutted by the accused is to be seen. To substantiate his contention accused has examined himself as DW1 and got marked Ex.D1. Now the question is whether the evidence placed on record by the accused is sufficient to rebut the presumption?
25. Before appreciating the evidence on record, it is necessary to note the ratio laid down by Hon'ble Apex Court of India in a decision reported in ILR 2009 Kar 1633 (Kumar Exports V/s Sharma Carpets). In the said decision the has held that the word "proved" in section 3 of the Evidence Act to the provisions of Section 118 and 139 of N.I. Act, in a trial u/s 138 of N I Act a presumption will have to be made that every negotiable instrument was drawn for consideration and that was executed for discharge of debt or liability. However, the presumption is 15 CC No.29250/2014 rebuttable. Further, it has held that in trial, the accused can show that consideration and debt did not exist. To rebut the statutory presumption, the accused is not expected to prove his defence beyond reasonable doubt as is expected by the complainant in criminal trial. The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration. Further, it has held that court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated.
26. Yet another decision reported in (2010) 11 S C C 441 (Rangappa Vs. Sri Mohan) has held that "it is settled position that when an accused has to rebut the presumption u/s 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of 'legally enforceable debt or liability, the prosecution can fail."
27. The first citation referred above is rendered by bench consisting of Hon'ble two judges and the second citation referred above is rendered by bench consisting of Hon'ble three judges. As per the observations made by Hon'ble Apex Court the accused in a trail u/s 138 of the N I Act has two options. He can either show that consideration and debt did not exist or that under particular circumstances of the 16 CC No.29250/2014 case the non existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the debt in question was not supported by consideration and that there was no debt or a liability to be discharged by him. However, the Court need not insist in every case that accused should disprove the non existence of consideration and debt by leading direct evidence. At the same time, bare denial of passing of consideration and existence of debt, apparently does not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the considerations, upon consideration of which, the Court may either believe the consideration and debt did not exist or their non existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. The accused may also rely upon the circumstantial evidence and if the circumstances so relied upon are compelling, the burden may like wise shift again on the complainant. The accused may also rely upon the presumption of fact those 17 CC No.29250/2014 mentioned under Sec.114 of the Evidence Act to rebut the presumption arising Under Sec.139 of the NI Act.
28. Keeping in mind the observations made by the Hon'ble Apex Court in the above referred decisions let me see the facts of the case on hand. In this case the defence of the accused is total denial. In the light of the ratio lay down in the above citations to rebut the statutory presumption, the accused is not expected to prove his defence beyond reasonable doubt as is expected by the complainant in criminal trial. However, accused may is entitle to prove that the cheques in question were not supported by consideration either by direct evidence or circumstantial evidence.
29. Accused has denied the issuance of the cheques in question in favor of complainant for legally dischargeable debt as alleged in the complaint. Further accused seriously disputed the transaction alleged in the complaint. According to the accused the material elicited in the cross examination of PW1 is sufficient to rebut the presumption. To ascertain as to whether the material elicited in the cross examination of PW1 is sufficient to rebut the presumption it is necessary to go through the evidence of PW1.
30. The complainant has filed this complaint with allegation that the accused had entered into an agreement dated 20.02.2002 with him and in terms of the said agreement, complainant had paid an amount of Rs.3,00,000/- to the accused. Further it is case of the complainant that 18 CC No.29250/2014 accused approached him in the month of March 2013 and towards payment of principal amount of Rs.3,00,000/- issued three cheques in question. Per contra, accused disputed the receipt of financial assistance from the complainant. In this regard PW1 has cross examined by Advocate for accused. The material elicited in the cross examination of PW1 assist the Court to resolve the dispute. For the sake of convenience some relevant portion of cross examination of PW1 is extracted as reproduced here. At page No.5 PW1 has stated as under:
" 2002 gÀ°è £Á£ÀÄ DgÉÆæUÉ ºÀt ¤ÃrzÀ §UÉÎ £Á£ÀÄ £À£Àß CzÁAiÀÄ vÉjUÉ E¯ÁSÉUÉ ¸À°è¹zÀ ¯ÉPÀÌ¥ÀvÀæzÀ°è ªÀiÁ»w ¤ÃrgÀÄvÉÛãÉ. ¸ÀzÀj zÁR¯ÉAiÀÄ£ÀÄß ºÁdj¸À®Ä AiÀiÁªÀÅzÉà vÉÆAzÀgÉ E®è. DgÉÆæ gÀÆ. 3,000,00/- ¹éÃPÀj¹zÀ §UÉÎ ¹éÃPÀÈw ¥ÀvÀæ ¥ÀqÉ¢gÀÄvÉÛãÉ. CzÀ£ÀÄß ºÁdj¸À®Ä AiÀiÁªÀÅzÉà vÉÆAzÀgÉ E®è ....."
It is evident from the above evidence that he disclosed the lending money to the accused in the returns submitted to the Income Tax Department and obtained the endorsement from the accused for having received an amount of Rs.3 lakhs. He has no difficulty to produce the said documents. As per the above reproduced evidence of PW1 it is evident he is in possession of acknowledgement for having made payment of Rs.3 lakhs to the accused and the lending of money to the accused in the year 2002 has disclosed in the returns to the Income Tax Department. Even after admitting the fact that he has no difficulty to produce the said documents has not made any efforts to produce the said documents for the best reasons known to him. If 19 CC No.29250/2014 really such a huge amount was lent by the complainant, obviously he could have disclosed the same in the returns submitted to the Tax Department for the relevant period. In the light of serious dispute of lending the money, the returns submitted by the complainant to the Income Tax Department plays vital role to find out the liability. If really accused is due to pay the amount to the complainant as claimed in the complaint, certainly that will reflect in the said document. Non production of said document creates serious doubt in the mind of the Court about the lending of money to the accused and transaction took place as alleged in the complaint. No doubt it is true that merely because amount advanced is not shown in the returns submitted to the Income Tax Department in every case, one cannot jump to the conclusion that the presumption U/s.139 of the N.I.Act stands rebutted. There may be a cases where the small amount less than Rs.20,000/- is advanced in cash by way of loan which may be repayable within few days. Such transaction may not show in the returns submitted to the Tax Department as it is repayable within few days in the same financial year. In such a case the failure to show that amount in returns submitted to the Tax Department may not by itself amount to rebuttal of presumption U/s.139 of N.I.Act. In the present case the amount said to have advanced by the complainant to the accused is not a small amount, but huge amount of Rs.3 lakhs that too in the year 2002, but fails to produce the returns submitted to Tax Department which reflects 20 CC No.29250/2014 the disputed entry.
31. It is equally important to note that complainant has not offered any explanation for non production of the returns submitted to the Income Tax Department. A party in possession of best evidence which would throw light on the issue in controversy withholding it, Court ought to draw an adverse inference against him. In this regard reference may be made of a decision of Hon'ble Apex Court reported in AIR 1968 S C 1413 (Gopala Krishnaji Ketkar V/s. Mohamed Haji Latif and others). Yet in another decision reported in ILR 1994 KAR 2728 (Management of State Bank of India V/s. V.M. Mahapurush) the Division Bench of Hon'ble High Court of Karnataka has held that non-production of documentary evidence in possession of party, adverse inference should be drawn. In the instant case since the complainant fails to produce the returns submitted to the Income Tax Department for the relevant year in which the amount lent to the accused even though he is in possession of the same. Therefore, in the light of the ratio laid down in the above referred decisions an adverse inference shall have to be drawn against the complainant. Non production of returns submitted to the Income Tax Department and acknowledgement for having paid the amount to the accused is sufficient to draw the inference against the complainant and sufficient to rebut the presumption. In this regard reference may be made of a decision relied on by the Accused rendered by Hon'ble Apex Court of India reported in AIR 2006 SC 3366 (M.S 21 CC No.29250/2014 Narayana Menon alias Mani V/s State of Kerala & Anr.) and 2009 CRL L.J 3777 (Sanjay Mishra V/s Ms. Kanishka Kapoor @ Nikki and Anr)
32. Thus, the accused has discharged the onus of proving that the cheque was not received by the holder for discharge of debt or liability. Under such circumstances, the defence of the accused that blank cheque obtained by the complainant becomes probable and the onus of burden would shift on the complainant. As noted supra the complainant did not produce the returns submitted to the Income Tax Department for the relevant period to establish that as a matter of fact the accused is due to pay the amount of Rs.3 lakhs. Moreover, no acceptable evidence is placed on record by the complainant to show that the accused is due to pay an amount mentioned in the cheques in question. On appreciation of material on record in the considered opinion of this Court the allegations made in the complainant against the accused remain in tact without sufficient proof.
33. Thirdly, it is the contention of the accused that the reason for which the cheques are dishonoured does not attract Sec.138 of the N.I Act. The complainant has produced the disputed cheque at Ex.P2 to 4, three bankers memo dated 23.03.2013 at Ex.P5 to 7 which are dishonoured for the reason 'Kindly contact Drawer Drawee Bank and pleas present again' and three bankers memo dated 02.05.2013 at Ex.P8 to 10 which are dishonoured for the reason 'Not drawn on us'.
34. No doubt, as per Sec. 146 of the N.I Act the presumption is to be 22 CC No.29250/2014 drawn in respect of the endorsement given by the banker unless contrary is proved. The banker's memo produced at Ex.P5 to 7 are not relevant to this case because the complainant got issued legal notice to the accused only on the basis of the banker's memo produced at Ex.P8 to 10. The said banker's memo reveals that the cheques in question are dishonoured for the reason that the said cheques are not drawn on the Vijaya Bank. As per Sec.146 of the N.I Act there is a presumption in respect of Ex.P8 to 10 to the effect that the disputed cheques are dishonoured for the reason mentioned in the banker's memo that cheques are not drawn on the Vijaya Bank. Now the question is whether the reason for dishonour of cheques in question is sufficient to commit an offence punishable u/s 138 of N I Act.
35. In order to resolve the dispute I find it necessary to read the relevant provision 138 of the Act. Therefore, for the sake of convenience section 138 is extracted and reproduced here.
Sec.138. Dishonour of cheque for insufficiency, etc., of funds in the account.-
account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 6[a term which may be extended 23 CC No.29250/2014 to two year], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
c) The drawer of such cheuqe fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.-For Explanation. the purpose of this section, "debt or other liability" means a legally enforceable debt of other liability.
36. On plain reading of section 138 of the Act, it is only when all the ingredients are satisfied, that a person issued a cheque on an account maintained by him with a banker & in case said cheque dishonoured for the reasons stated in the said section can be deemed to have committed an offence under section 138 of the Act.
37. In the present case the evidence on record clearly reveals that as 24 CC No.29250/2014 per the banker's memo produced at Ex.P8 to 10 the cheques in question are dishonoured not for the reasons mentioned in the section 138 of N I Act but are dishonoured for the reason that the said cheques are not drawn on the Vijaya Bank. The complainant has not made any effort to examine the banker of the accused to demonstrate that at the time when the cheques presented for encashment the accused maintained the account in their bank and there was no sufficient to funds in that account so as to honour the cheques. Since complainant miserably fails to prove important ingredients of section 138 of the Act to the effect that, the cheques in question belong to account of accused and said account has no sufficient funds when the cheques were presented for encashment, in the considered view of this Court it cannot be said that the accused has committed any offence as alleged by the complainant.
38. Non production of relevant documents is fatal to the case of complainant. The material brought on record by the accused it becomes evident that the debt claimed by the complainant did not exist. When there was no existing debt the question of issuing the cheque in discharge of such debt does not arise. Thus the accused have discharged the onus of proving that the cheque in question was not received by the complainant for discharge of debt or liability. Once the presumption is rebutted by the accused the burden shifts on the complainant to prove that he paid Rs.3 lakhs to the accused as pleaded 25 CC No.29250/2014 in the complainant. As noted supra to substantiate the claim made by the complainant absolutely no iota of evidence is produced. In the absence of production of the documents which is in the possession of the complainant it is difficult to accept the allegation made in the complaint to the effect that the accused is due to pay an amount of Rs.3 lakhs. Under these circumstances, the defence of the accused to the effect that the disputed cheques collected by the complainant during the year 2002 appears to be probable. Looking from any angle the allegations made by the complainant in the complaint remains in tact without any proof. Having regard to the material on record, the considered opinion of this Court the complainant miserably fails to establish its case u/s 138 of the N I Act as required under law. Hence, I answer this point in the negative.
39. No.2:- In view of my finding on point No.1, I proceed to Point No.2 pass the following:
ORDER Acting u/s 264 of Cr.P.C. the accused are hereby acquitted for the offence punishable u/s 138 of N.I. Act.
The bail bond executed by the accused shall stands cancelled. (Dictated to Stenographer, transcribed and computerized by her, taken print out corrected, signed by me and then pronounced in the open court this the 3rd day of November, 2016) (A.V.Patil) XLII Addl. Chief Metropolitan Magistrate, Bengaluru.26 CC No.29250/2014
ANNEXURE Witnesses Witnesses examined for the Complainant :
PW1 : Chandanmal Bafna
PW2 : Suresh Bafna
Witnesses examined for the accused:
DW1 : Narasimhamurthy
Documents exhibited by the Complainant:
Ex.P1 : Complaint
Ex.P2 to 4 : Cheques
Ex.P2(a) to 4(a) : Signatures of the accused
Ex.P5 to10 : Bank Memos
Ex.P11 : Office copy of the legal notice
Ex.P11(a) : Postal receipt
Ex.P11(b) : Returned postal cover
Ex.P11(bb) : Legal notice found in returned postal cover
Ex.P12 : Agreement
Ex.P13 : Pass book
Documents
Documents exhibited by the Accused:-
Accused:
Ex.D1 : Bank Statement
,,
XLII Addl. Chief Metropolitan
Magistrate, Bengaluru.
27 CC No.29250/2014
Judgment pronounced in the open
court vide separate order.
O R D E R
Acting u/s 264 of Cr.P.C. the
accused are hereby acquitted for the
offence punishable u/s 138 of N.I. Act.
The bail bond executed by the
accused shall stands cancelled.
XLII A.C.M.M, Bangaluru.