Bangalore District Court
M/S Maba Corporate Services Pvt. Ltd vs S. Seshadri Kumar on 9 January, 2024
C.C.NO.29895/2018
0
KABC030812072018
Presented on : 09-11-2018
Registered on : 09-11-2018
Decided on : 09-01-2024
Duration : 5 years, 2 months, 0 days
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LL.B.,LL.M
XXVIII A.C.M.M, Bengaluru City.
DATED; THIS THE 09 th DAY OF JANUARY-2024
C.C.NO.29895/2018
Complainant: M/s. Maba Coprorate Services Pvt.,Ltd.,
R/o at No.186/1, J.C.Complex Annex,
Sirur Park Road, Sheshadripuram,
Bangalore-560020.
R/by its Managing Director,
Sri.C.M.Narayana,
R/by its its power of Attorney holder,
Smt.Hema Prabhu W/o S.Prabhu.
(By Sri.V.Krishna Murthy.,Adv.,)
V/s
Accused: Sri.S.Seshadri Kumar S/o Sri.S.Shamanna,
R/at No.162, 6th Main, 4th Block,
Jayanagar, Bengaluru-560011.
Also At: M/s.Shree Balaji Enterprises,
No.7/5, Rudrappa Garden,
Near Mulkattamma Temple, Vittal Nagar,
Bengaluru-560026. R/by its Proprietor
and Authorized Signatory,
Sri.S.Seshadri Kumar S/o. Sri.S.Shamanna.
(By Sri.A.Feroze Nizam.,Adv.,)
C.C.NO.29895/2018
1
:JUDGMENT:
This case arises out of the private complaint filed by the complainant against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act against the accused.
2. The case of the complainant's in brief is as under:
It is case of the complainant is that the complainant company is a private limited company registered under the Indian Companies Act and RBI registered company and doing financial business. Further stated that the accused know the complainant company from last several years, the accuses used to borrow money from the complainant's company for the purpose of improvement of the business and liquidate some of the debts. The accused has approached the complainant's company once again in the second week of March 2018 and requested and demanded to lend a sum of Rs.15,00,000/- as loan to meet the urgent requirements. The complainant's company taking into the difficulties of the accused, has sanctioned the loan of Rs.15,00,000/-. The complainant's company has advanced the said loan through cheque bearing No.225997 on 19.03.2018 of Rs.5,00,000/- and the cheque bearing No.226000 on 26.03.2018 of Rs.10,00,000/-, both the cheques were drawn on Karnataka Bank, Malleswaram Branch, Bangalore-
C.C.NO.29895/2018 2 560055, accordingly to the convenience and requirement the accused has encashed the said cheques. At the time of availing the said loan, the accused has executed advance application and on- demand promissory note. The accused further agreed to repay the above said loan amount within short period along with interest at the rate of 2% per month. The accused has agreed and promised the complainant's company that he would not dodge the complainant's company in making the payment, as did in the earlier occasion, which forced the complainant's company to institute the proceedings under section 138 of Negotiable Instruments Act.
3. It is further stated that on demand and request, towards the part payment, on 10.07.2018 the accused has issued the cheque bearing No.000068 for a sum of Rs.16,25,000/- drawn on the ICICI Bank, Jayanagar 7 th Block, Bangalore in favour of the complainant. As per the instructions and request made by the accused the complainant was presented the said cheque for encashment before its banker the Karnataka Bank Ltd., Malleshwaram, Bangalore. But the said cheque was dishonored on 10.07.2018 with an endorsement dated:
11.07.2018 for the reasons "Funds Insufficient" in the account of the accused. Thereafter, the complainant got issued a legal notice to the accused on 24.07.2018 through its counsel by RPAD calling upon him to pay the cheque amount within 15 days from the receipt of C.C.NO.29895/2018 3 the said notice. The accused has personally received the said notice on 26.07.2018. Inspite of service of the notice, the accused neither reply to the notice nor paid the cheque amount to the complainant. As such, the accused has committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 27.08.2018.
4. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R.No.12609/2018. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 02.11.2018 to register the case in Register No.III.
5. Thereafter, summons was issued to the accused and he has appeared before the court through his counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C,. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
6. The complainant in support of its case, have examined its Assistant Manager as PW.1 and got marked 11 documents at Ex.P.1 to 11 and closed its side.
7. After closer of the evidence of the complainant, the statement of the accused under section 313 of C.C.NO.29895/2018 4 Cr.P.C., was recorded. He has denied the incriminating evidence appearing against him. In his defence, the accused examined himself as DW.1 and 08 documents were marked at Ex.D.1 to 08.
8. I have heard the arguments on both the sides and perused the written argument filed by the leaned counsel for the accused and also perused the material placed on record.
9. The learned counsel for the complainant has relied upon the citations reported in 2005 (1) DCR 356, 2005 (1) DCR 359, 2007 AIR SCW 3578, (2015) 8 SCC 378, (2006) 6 SCC 39, (2008)1 SCC 258, AIR 2010 SC 1898, (2008) 4 SCC 54, AIR 2019 SC 2446, 2013 AIR SCW 597, AIR 2018 SC 3601, (2001) 8 SCC 458 and (2010) 11 SCC 441.
10. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt or liability.?
2.Whether the complainant further proves that the accused had issued the cheque-Ex.P.6, towards the discharge of the said legally enforceable debt or liability.?
3.Whether the complainant further proves that the cheque-Ex.P.6 was dishonored for the reasons "Funds Insufficient" in the account of the accused and thereafter the accused had failed to repay the same within the statutory C.C.NO.29895/2018 5 period, inspite of receipt of legal notice.?
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
11. My answers to the above points are as under:
Point No.1: In the Affirmative.
Point No.2: In the Affirmative.
Point No.3: In the Affirmative.
Point No.4: In the Affirmative.
Point No.5: As per final order, for the following:
:REASONS:
12. POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken these points together for common discussion. Further the complainant's company is a private limited company registered under the Indian Companies Act and RBI registered company and doing financial business. Further the accused know the complainant company from last several years, the accuses used to borrow money from the complainant's company for the purpose of improvement of the accused business and liquidate some of the debts. The accused has approached the complainant's company once again in the second week of March 2018 and requested and C.C.NO.29895/2018 6 demanded to lend a sum of Rs.15,00,000/- as loan to meet the urgent requirements. The complainant's company taking into the difficulties of the accused, has sanctioned the loan of Rs.15,00,000/-. The complainant's company has advanced the said loan through cheques, accordingly to the convenience and requirement the accused has encashed the said cheques. At the time of availing the said loan, the accused has executed advance application and on- demand promissory note. The accused further agreed to repay the above said loan amount within short period along with interest at 2% per month. The accused has agreed and promised the complainant's company that he would not dodge the complainant's company in making the payment, as did in the earlier occasion, which forced the complainant's company to institute the proceedings under section 138 of Negotiable Instruments Act.
13. Further on demand and request, towards the part payment the accused had issued the cheque in question in favour of the complainant. As per the instructions of the accused the complainant was presented the said cheque for encashment before its banker. But the said cheque was dishonored with an endorsement "Funds Insufficient" in the account of the accused. Thereafter, the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon him to pay the cheque amount within 15 C.C.NO.29895/2018 7 days from the receipt of the said notice. The accused has personally received the said notice. Inspite of service of the notice, the accused neither reply to the notice nor paid the cheque amount to the complainant. As such, the accused has committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
14. In support of the case, the complainant have examined its Assistant Manager as P.W.1 and 11 documents were marked at Ex.P.1 to 11. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the Resolution/Board Meeting dated: 11.08.2018 passed by the complainant company. Ex.P.2 is the Power of attorney dated: 11.08.2018 executed by the complainant company in favour of PW.1 for represent the company in all legal matters. Ex.P.3 is the advance application dated: 18.03.2018 executed by the accused in favour of the complainant company. Ex.P.4 is the On demand promissory note dated: 18.03.2018 executed by the accused in favour of the complainant for a sum of Rs.15,00,000/-. Ex.P.5 is the certified copy of the account extract dated: 11.01.2018 to 02.04.2018. Ex.P.6 the cheque issued by the accused in favour of the complainant on 10.07.2018 for a sum of Rs.16,25,000/-. Ex.P.6(a) is the signature of the accused. Ex.P.7 is the bank memo dated 10.07.2018 informing of the dishonor of the cheque for the reasons C.C.NO.29895/2018 8 Funds Insufficient in the account of the accused. Ex.P.7(a) is the receipt related to Ex.P.7. Ex.P.8 is the office copy of legal notice dated 24.07.2018. Ex.P.8(a) and 8(b) are the postal receipts. Ex.P.9 and 10 are the postal acknowledgements. Ex.P.11 is the complaint.
15. The accused is examined himself as DW.1 by way of affidavit and 08 documents were marked on his behalf at Ex.D.1 to 8. In the chief examination D.W.1 has repeated the defence taken by him. Ex.D.1 is the Car insurance. Ex.D.2 and 3 are the complaint's given to the Commissioner of Police, Bangalore and the Jayanagara P.S. Ex.D.4 and 5 are the Postal receipts. Ex.D.6 is the bank statement of Sree Charana Co- operative for the period 2017-18 to 2023-24. Ex.D.7 is the ICICI Bank statement for the period 2016-17 to 2023-24. Ex.D.8 is the Certificate under section 65(b) of Indian Evidence Act.
16. The accused has taken the contention that in the year 2016 the accused his business necessities had applied for personal loan for a sum of Rs.6,00,000/- in the complainant company and after due verification of the application the complainant had disbursed a sum of Rs.6,00,000/- only to the accused and not Rs.15,00,000/-. Further contended that at the time of sanctioning the loan the complainant company had collected several blank signed cheques as a security and signed blank on demand promissory C.C.NO.29895/2018 9 notes, blank agreement papers, original RC book and Form No.29/30 and related papers pertaining to the his Hundai i20 car as security and he had signed the hypothecation papers. Further the staff of the complainant company had assured the accused that they will return back the said cheques and other documents. But they are not returned the same. Further the accused already paid the entire loan amount monthly EMI on time to the complainant. The complainant was misused the security cheque and other documents and filed this false complaint. The accused in his defence has not disputed cheque-Ex.P.6 has been issued by him. He also does not dispute his signature appearing on the said cheque. But, he has taken up the contention that the complainant without knowledge of the accused misused the cheque and other documents. Further contended that he has never admitted regarding repayment of the amount as contended by the complainant.
17. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt or liability, for which the cheque came to be issued by the accused. The learned counsel for the complainant has argued that from the evidence placed on record, after the repeated requests made by the complainant, the accused has not paid any amount to the complainant. Further argued that the accused C.C.NO.29895/2018 10 approached the complainant company in the second week of March 2018 and requested to lend a sum of Rs.15,00,000/- as a loan to meet the urgent requirements of the accused. Accordingly, the complainant has sanctioned the loan of Rs.15,00,000/- to the accused through cheques. The accused has encashed the said cheques. At the time of availing the loan the accused has executed the advance application and on demand promissory note in favour of the complainant. Thereafter, the accused has failed to repay the said loan amount. Further argued that the accused in order to part payment of debt/liability had issued the cheque-Ex.P.6 in favour of the complainant. He further argued that the accused has not denied the cheque-Ex.P.6 being his cheque and drawn on the account of the accused. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. Further agrued that the complainant demanded the said amount to the accused. In this regard the accused had issued the cheque. The defence have failed to rebut the presumption under section 139 N.I.Act. The learned counsel for the complainant further argued that the accused has failed to produce any believable evidence that the blank cheque and other documents was taken by the complainant and misused the said cheque and C.C.NO.29895/2018 11 other documents and also why he has not returned back the same is not clear. He further argued that under section 139 of N.I.Act, there is a presumption that the cheque have been issued for discharge of legally enforceable debt or liability. In the present case, the accused has not disputed the cheque-Ex.P.6 being his cheque drawn on the account of the accused. The said presumption is available to the complainant.
18. The learned counsel for the complainant has further argued that the accused has failed to prove the very fact that cheque and other documents was taken by the complainant for the purpose of security and its were blank when its were taken by the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had issued the blank cheque and other documents to the complainant for the purpose of security and he has already paid entire amount monthly through EMI. As such, very defence of the accused is not believable. Further argued that the accused herein after issuance of the cheque in question has deliberately avoided the repayment. Further during recording of plea of the accused, the accused has not at all whispered anything C.C.NO.29895/2018 12 about the cheque-Ex.P.6 the same was taken by the complainant and apart from that the accused has not even whispered about taking any legal action against the complainant. To substantiate the said narration of the accused he has not produced any cogent evidence nor placed any materials before this court to establish the defence of the accused. Mere say clearly shows that the accused has intentionally in order to escape from the clutches of liability has cooked up a false cock and bull story in order to get sympathy from the hands of this court, which does not yield any result as the accused has failed to rebut the presumption.
19. It is further argued that the admission of issuance of the cheque and other documents and also the signature is sufficient to prove that the cheque in question must have been issued in discharge of legal liability/debt. From the oral as well as documentary evidence it is found that when the accused signature is proved on the cheque by the complainant virtue of section 118 and 139 of N.I.Act. As such, the complainant herein beyond all reasonable doubt have proved its case and discharged their initial burden. As such the accused has failed to prove his defence and if at all the complainant have misused the cheque and other documents, the accused as a prudent men he could have initiated legal action against the complainant. If really the accused is not due to pay the amount claimed in the cheque, he could have issued C.C.NO.29895/2018 13 reply notice. Further argued that non initiating any legal action for alleged mis-utilization, non issuance of reply are the strongest circumstances to draw adverse inference against the accused. On appreciation of evidence placed by the complainant by the accused is not supported by proof/documents as such the accused herein has failed to rebut the presumption. Hence, he prays to punished the accused.
20. The learned counsel for the accused has argued that the accused only advanced loan of Rs.6,00,000/- from the complainant. Further at the time of availing the loan the complainant has taken several blank cheques and taken the signatures on the blank on demand promissory note and advance application and other documents relating to the accused car for the purpose of security. Further argued that the accused has already paid entire amount to the complainant. The complainant instead of returning the cheque and other documents they have misused the same and filed the false case against the accused. Further argued that there was no legally enforceable debt/liability/due to the complainant from the accused for which the cheque- Ex.P.6 was issued. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to proves the existence of a legally enforceable debt or liability, for which the cheque came to be issued. The complainant created all the documents and filed this false case against the C.C.NO.29895/2018 14 accused.
21. The learned counsel for the accused has filed written argument. In his argument he has reiterated the brief facts of the case. Further submitted that the complainant has deposed before this court and marked Ex.P.1 to 11. The accused has also deposed before this court and was duly cross examined by the complainant counsel. The documents marked as Ex.D.1 to 8. The main contention taken by the accused is that the complainant had alleged in the complaint that he had lend a sum of Rs.15,00,000/- to the accused by way of cheque bearing No.225997 dated: 19.03.2018 of Rs.5,00,000/- and the cheque bearing No.226000 dated: 26.03.2018 of Rs.10,00,000/- total of Rs.15,00,000/-. It is to be noted that at the time of sanctioning the amount, the complainant had produced the advance application i.e., Ex.P.3, wherein the exhibits, the complainant had failed to fill up the repayment schedule is for how many months, which itself proves that the complainant with a malafide intention had cheated the accused for his wrongful gains. Further the complainant had taken contention that the above mentioned cheques have been drawn in the name of "S.Kumar, as per Ex.P.5, but none of the above mentioned cheques have been passed through the account of the accused and all the documents of the accused posses the name as "S.Sheshadri Kumar". The complainant had falsified the documents and had C.C.NO.29895/2018 15 produced the concocted bank statement. Further, the complainant had claimed that the legal notice i.e., Ex.P.8 has been served to the accused, but it can be seen in Ex.P.9 and 10, the signature in the RPAD does not belongs to the accused, and the complainant had wrongly came to the conclusion that the notice has been served to the accused.
22. It is further submitted that the complainant had taken the above mentioned cheque as security at the time of sanctioning the loan amount of Rs.6,00,000/-. At no point of time the accused in the year 2018 had issued the above cheque in question to the complainant. The complainant had alleged that he had sanctioned an amount of Rs.15,00,000/- in the month of March 2018, even if it is true, the complainant had claimed a sum of Rs.16,25,000/- only for a period of 3 months and the complainant has failed to prove on what basis, the complainant had charged interest. Further the complainant along-with the above mentioned cheque have collected original RC Book of the car, RC book and Form 29/30 and related papers pertaining to the accused Hundai i20 Car bearing No.KA53N9288 in model No.I20 ASTA 1.4 DSL DSIV. It is also the case of the accused that no consideration was ever paid or received under Ex.P.6 and in view of the categorical stand of the accused, the burden of proving that Ex.P.6 is supported by consideration is on the complainant which was not been discharged. In his C.C.NO.29895/2018 16 written argument he relied upon the citation reported in 2008 Cri.L.J (NOC) 409 Keral "........Negotiable Instruments Act (26 of 1881) Section 138, 118(a), 139, Dishonor of cheque-presumption as to consideration- ..........the complainant has miserably failed to prove passing of any legally enforceable debt or liability- Presumption under section 118 (a) regarding consideration is not available to complainant. Acquittal of the accused proper.
23. He has also relied upon the citation reported in ILR 2009 Kar 1633 (SC): (D) Negotiable Instruments Act, 1881- Sections 118, 139 and 138-Presumption under sections 118 and 139-how to be rebutted- standard of proof required for rebuttal-held, Rebuttal does not require proof beyond reasonable doubt- Something probable has to be brought on record- burden of proof can be shifted back to the complainant by producing convincing circumstantial evidence. Thereafter the said presumptions arising under sections 118 and 139 case to operate - to rebut said presumption accused can also rely upon presumption under evidence act, 1872 section 114 (common course of natural; events human conduct and public and private business)-Evidence Act, 1872 section 114 presumption of fact under.
24. Further submitted that from the foregoing and on the material on record, the complainant has not C.C.NO.29895/2018 17 established the ingredients of Section 138 of the Negotiable Instruments Act and the presumption under section 139 of the Negotiable Instruments Act has been rebutted and therefore the complaint does not survive. Further submitted that in order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly requires to prove the existence of a legally enforceable debt or liability, for which the cheque came to be issued by the accused. Further, there is no due from the accused to the complainant. Hence, cheque was not given by the accused for the payment of any legally recoverable debt. The complainant, with a malafide intention and to illegally extract money from the accused, have filed a case against the accused. He has further relied upon the citation of Jagadish Sehgal Vs.Shamshi Singh Gogi, 2009(4) SCC 683, it was held:
"All ingredients needs to be satisfied before a person who had drawn the cheque can be deemed to have committed the offence under section 138 of N.I.Act. The main defence of the accused is that there was no legally enforceable debt or due to the complainant from the accused for which the cheque was issued. Further the complainant has not produced any material to disclose the alleged due amount of Rs.16,25,000/- by the accused. Thus, there arises no liability against the accused under the said provision, which may be further substantiated as follows:
In Shriram Transport Finance Co.,Ltd., Vs. State of Kerala, 2017 (3) DCR 680 (Ker) it was held as C.C.NO.29895/2018 18 follows:
6....The failure of the appellant to disclose the material particulars in his complaint is fatal as held by the Supreme Court in Vijay V/s. Laxman [(2013) 3 SCC 86].
25. In a similar case of Shriram Transport Finance Company Ltd., V/s State of Kerala, 2017 SCC Online Ker 33024, the court opined, "the complainant as well as the evidence of PW.1 are lacking the details relating to the loan transaction as to what exactly was the agreed rate of interest, the number of loan repayment installments paid by the accused, the details as to how the total outstanding liability was arrived at, so as to justify the amount shown in the cheque, etc,. The omission to state these details in the complaint causes serious prejudice to the accused in as much as he will be denied the opportunity of reasonable defence in the conduct of the criminal trial. This court in the decision in K.K.Divakara Vs. State of Kerala, reported in 2016 (4) KLT 233 has held that in a criminal case, the accused should be informed before the trial not only of the nature of the offence, but also regarding the material particulars of the transaction which are necessary for him to effectively meet and rebut the case against him. But, unscrupulous complainants very often refused to do so with the ulterior objective of denying the accused a fair trial, which is fundamental right guaranteed to him under article 21 of the Constitution of India and that the C.C.NO.29895/2018 19 accused in a complaint case filed under section 142 of the Negotiable Instruments Act is also entitled to know before the trial the particulars of the accusation and the allegations against him. Suppression of these particulars in the complaint alone is sufficient to order his acquittal."
26. Where an accused has raised a probable defence, thereby raising reasonable doubts on the complainant's case, acquittal was held to be justified, in Man Singh Vs. Ranveer Singh 2020 (3) DCR 581 (MP), wherein it was held:
"4. Learned trail court after hearing both the parties delivered judgment on 12.04.2017 and has not found proved that the respondent received Rs.12,50,000/- from the appellant and also not found proved that the cheque provided by the respondent is for the legal enforceable debt, however, ultimately has not found proved the case beyond reasonable doubt against the respondent and extended the benefit of doubt in favour of the respondent, acquitted the respondent of the offence of section 138 of N.I.Act.
24. There should be legally enforceable debt between parties and this court is of the view that when the complainant failed to prove these ingredients, no offence is made out against the respondent for the offence punishable under section 138 of N.I.Act."
27. Furthermore, if the complainant does not produce sufficient evidence, it is only justified to acquit C.C.NO.29895/2018 20 the accused and this reasoning was upheld in Virupaxagouda V/s. Basavaraj, 2020 (2) DCR 574 as follows:
"12. In a criminal case, facts and circumstances of each case have to be borne in mind before applying any citations. Therefore, I shall advert to the doubts entertained by the learned judge of the trail court who held that existence of legal recoverable debt is not proved. Advancement of loan of Rs.1,50,000/- is not proved. Therefore, the learned trail court judge came to a conclusion that the complainant had no capacity to pay the same and there is no existence of legal recoverable debt by the complainant from the accused. It is finding that lead to the acquittal of the accused.
13. It is the specific case of the complainant that he knew the accused and had advanced the loan amount of Rs.1,50,000/- to the accused on his request in the month of June 2004 repayable on demand. To substantiate this contention, not a single scrap of paper has been produced except the cheque which was issued on 20.01.2005".
28. Further submits that the various courts and the Hon'ble Apex Court itself have held that when a cheque is issued bank as security for availing loan, as is also the case of the accused, it can be presumed that there was no existing liability, consequently leading to the accused's acquittal. Significantly, in the Supreme Court decision of M.S.Narayan Menon @ Mani V/s. State of Kerala & Anr., (2006) 6 SCC 39, the court C.C.NO.29895/2018 21 opined that if a cheque is issued for "security or for any other purpose" then it would not come within the purview of section 138 of the N.I.Act.
29. Further, in Taher.N.Khambati V/s Vinayak Enterprises & Ors., 1994 (2) Alt Cri 681 it was held as follows:
"If this sort of practice is allowed, every creditor should abuse the provisions of section 138 of the act by obtaining blank cheques and putting the debtors in the fear of presentation insist on discharge of the debts at any time. I do not think that would have been intention of the legislature while incorporation section 138 in the Negotiation Instruments Act. Though, the appellant did not state the circumstances under which he obtained the pronote and the cheque in his complaint yet it is clear from the evidence the circumstance under which the complaint obtained a signed blank cheque from the respondent. So, the appellant has obtained this blank signed cheque with a view to make use of it, as a threat to the respondents for realization of the amount. So, it cannot be construed that the respondent had issued the cheque voluntarily for discharge of any debt or legal liability as envisaged under section 138. I, therefore, find that the facts and circumstances of the case are not attracted by the provisions of section 138 of the Act and that the learned Magistrate was justified in acquitting the accused".
30.This decision was cited by the Andhra Pradesh C.C.NO.29895/2018 22 High Court in Laxminivas Agarwal V/s. Andhra Semi conductors Pvt., Ltd., 2006 Cri.L.J 2643, where it held"
"In support of his finding the learned Magistrate relied upon a decision of this court in Shri Taher N.Khambati V.s Vinayak Enterprises, Secunderabad and Ors. 1994 Cri.L.J. 560, wherein this court held that in the event or creditor advancing certain sum debtor and obtaining a singed blank cheque with a view to make use of it, for realization of amount, such cheque cannot be said to have been issued voluntarily for discharge of any debt and therefore, the provisions of section 138 of the Negotiable Instruments Act does not attract for such cheques obtained by the creditor from the debtor without putting the date for the same amount. On the said finding the learned magistrate found all the accused not guilty of the offence punishable under section 138 of the Negotiable Instruments Act and acquitted all of them."
31. It is submitted that in the instant case, the complainant has failed to submit any proof regarding the amount of Rs.16,25,000/- that is allegedly owed to them by the accused. Therefore, it is also true to state that the accused has discharged his burden under the said provision. In fact, the accused had taken a loan of only Rs.6,00,000/- and had given his car documents and singed blank cheques as security. The complainant has already ceased his car, thereby discharging him from any liability of repayment. Thus, there existed no legally payable debt in the first instance as claimed by C.C.NO.29895/2018 23 the complainant, and subsequently, no offence under section 138 of N.I.Act. Arises owing to non-satisfaction of the essentials of that provision. The above is further strengthened by the holding in Anil V/s. M/s.Nawab Agri. Engineering workshop and Anr., CRA-AS- 183/2022 (O&M), which is as follows:
"The appellant-complainant cannot be permitted to contend that he has proved the liability of the cheque on the basis of showing certain financial transactions amongst the parties. The circumstances surrounding the issuance of the cheque and the debt/liability against which said cheque is claimed to be issued must co-relate. If the appellant-complainant fails to estblish the liability qua the amount written in the cheque that has been dishonoured, there is no presumption attached to the existence of the liability and legally enforceable debt qua the amount mentioned in the cheque. A complainant cannot be permitted to fill any amount in an instrument that has been handed over to him blank and singed and to claim that there would be a presumption regarding the existence of the liability mentioned in the cheque irrespective of the proven liability."
32. Similarly, in Indiabulls Financial Services Ltd., V/s.Jagdish Prasad Sharma, C.C.581/14 it was held:
"The complainant failed to prove the basic ingredient of the offence U/s.138 of N.I.Act that the cheque in question was issued by the accused in discharge of his liability as it has not been proved on record that the liability of the accused on the relevant C.C.NO.29895/2018 24 date was to the extent of cheque amount. Due to this reason, there is no reason to delve further into the other ingredients of section 138 of N.I.Act in this case. In view of the above discussion, the evidence, the facts and circumstance of the case this court is of the considered opinion that the complainant has failed to prove its case against the accused beyond reasonable doubt."
33. It must be emphasized that, the complainant is claiming an amount which substantially exceeds the amount of debt advanced by them to the accused. The Kerala High Court discussed this issue in Joseph Sartho V/s. G.Gopinathan, 2008 SCC online Ker 254 as follows:
"14. Going by the above provision, a cheque must be for payment of any amount of money to another person for discharging in whole or in part of any debt or other liability. In this case, once part payment was received, the cheque no longer was one for payment of money for discharging in whole or in part of any debt or other liability. In fact, the amount covered by the cheque was admittedly larger than the amount of debt or liability. The whole amount of debt or liability was lesser than the amount represented by the cheque. So, if the cheque for such as amount was dishonoured, the same will not be an offence under section 138 of the Act. Normally, a penal law has to be interpreted strictly. If there is any vagueness in the law, the benefit of the same should go to the accused".
C.C.NO.29895/2018 25
34. It is further submitted that it is the burden of holder of the cheque to prove that the cheque was issued in discharge of a debt or legally enforceable debt. During the cross examination of the complainant, he has made several contradictory statement which are different from the version of the complaint. In the instant case, no evidence is adduced proving that a legally enforceable debt by the accused or the liability in existence is not proved. The complainant has not proved the contentions taken in the complaint and has not adduced any documentary evidence to prove his debt or liability to be paid by the accused. Hence, this complaint is false and has been filed with a malafide intention to harass the accused. In the instant case, no evidence is adduced proving the consideration. A legally enforceable debt by the accused or the liability in existence is nor proved. When the subject cheque is not shown to have been issued in discharge of any subsisting liability, the accused cannot be prosecuted for dishonor of the cheque. The complainant has not adduced any independent witness in support of his case. Further the presumption under section 139 is rebuttable and in the instant case, the contradiction in legal notice and the complaint and in the cross examination the admission made and the statement made in chief clearly rebuts the presumption and the complainant has not prima facie established the existence of any legally recoverable debt or liability.
C.C.NO.29895/2018 26
35. He has also relied upon the citation reported in ILR 2007 KAR 2709.
"............That the presumption can be rebutted eve on the basis of the facts elicited in the cross examination of the complainant as has been done in the present case-judgment of acquittal is justified.......".
36. Further submits that the foregoing and on the material on record, the complainant has not established the ingredients of section 138 of the Negotiable Instruments Act and the presumption under section 139 of the Negotiable Instruments Act has been rebutted and therefore the complaint does not survive. Therefore, in light of the aforementioned precedents, the essential requirements to attract the offence of section 138 of N.I.Act have not been proved by the complainant and also as there is no sufficient proof advanced by the complainant to hold the accused liable for any offence in the present case. Hence, he prays to acquit the accused for the alleged offence.
37. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque- Ex.P.6 in favour of the complainant. It is not disputed that the complainant company is a private limited company and the accused company is a Proprietorship C.C.NO.29895/2018 27 firm and the accused is a proprietor of the accused firm. The accused in order to repayment of said amount had issued the cheque-Ex.P.6 in favour of the complainant. Whereas, the accused in his defence has contended that he has already paid entire amount to the complainant company. Further there is no due amount from the accused. Further he has taken the contention that he had issued the blank cheque and other documents in favour of the complainant. The accused has specifically denied having debt or liability and issued the cheque-Ex.P.6 on 10.07.2018 towards the discharge of any debt or liability. He contends that the blank cheque and other documents as was misused by the complainant and a false complaint was filed against the accused.
38. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt or liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Assistant Manager as PW.1 and 11 documents were marked at Ex.P.1 to 11. In the present case, the accused has not disputed Ex.P.6 being his cheque drawn on the account of the accused. The said presumption is available to the complainant. Under section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt or liability.
C.C.NO.29895/2018 28 Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforcible debt or liability. In the case on hand also the accused has disputed the existence of legally enforceable debt or liability, for which cheque-Ex.P.6 was issued.
39. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case, further the accused has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, the accused has taken up the defence that he had issued several blank cheques and other relevant documents to the complainant for the purpose security at the time of availing the loan of Rs.6,00,000/- and same was misused by the complainant. Except, said defence, he has not produced any materials to prove such defence. If he had given blank cheques and other documents to the complainant and same was misused by the complainant, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque and documents. On C.C.NO.29895/2018 29 which date the accused came to knew about the alleged illegal act of the complainant company, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is a businessman and having a knowledge of the financial transaction, why he has given the blank cheques and other documents without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the blank cheques and other documents. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodged complaint before concerned police station. But on 17.10.2023 the accused has lodged a complaint to the Commissioner of Police and the Jayanagara P.S as per Ex.D.4 and 5. Except this no steps have been taken to receive back the said cheque and documents, after he came to know about the same. Further in this case the accused has produced the statement of account as per Ex.D.6 from 01.04.2017 to 31.03.2018. On perusal of the same, it reveals that the accused has produced only statement from 01.02.2018 to 22.02.2018. But the accused has not produced statement of account for the period of 01.03.2018 to 31.03.2018. Further the accused has produced statement of account of the ICICI Bank it reveals that on 31.10.2017, 28.11.2017, 01.01.2018 and 01.02.2018 the accused has paid total of Rs.20,005.90 C.C.NO.29895/2018 30 to the complainant. On further perusal of the same it reveals that the accused has paid the said amount before sanctioning personal loan by the complainant. After advancing the loan the accused has not paid the amount to the complainant. Further the accused in order to escape from his liability has not produced entire bank statement before this court.
40. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 139 and 118 of the N.I.Act that cheque was issued by the drawer for legally payable debt or liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque- Ex.P.6 the court has to draw the initial presumption that the complainant is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant C.C.NO.29895/2018 31 case.
41. Further the accused has taken contention that the cheque was given to the complainant for the purpose of security. Hence, offence under section 138 of N.I.Act is not attracted. In this regard once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that cheque was issued by the drawer for legally payable debt or liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
42. Further in considering the scope of the presumption to be raised under section 139 of the Act and nature of evidence to be adduced by the accused to rebut the presumption, in Kumar Exports V/s Sharma Carpets, reported in (2009) 2 SCC 513 held as under;
C.C.NO.29895/2018 32 "14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mention in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The terms "presumption" is used to designate an inference, affirmative or dis-affirmative of the existence of a fact, conveniently called the "presumed fact"
drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means 'taking as true without examination or proof.'
18. Applying the definition of the word "proved" in section 3 of the Evidence Act to the provisions of section 118 and 139 of the Act, it becomes evident that in a trial under section 138 of the act a presumption will have to be made that every Negotiable Instruments was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of Negotiable Instruments is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumption under sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for C.C.NO.29895/2018 33 whose benefit it exists.
19.The use of the phrase "until the contrary is proved" in section 118 of the Act and use of the words "unless the contrary is proved" in section 139 of the act read with definitions of "May presume" and "Shall presume" as give in section 4 of the Evidence Act, makes it at once clear that presumption to be raised under both the provisions are rebuttable. When a presumptions is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not presumed, the purpose of the presumption is over.
20. The accused in a trial under section 138 of the act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the 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 is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the 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. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would 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 presumption, the accused should bring on record such facts and circumstances, upon consideration C.C.NO.29895/2018 34 of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstance of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstance so relied upon are compelling the burden may likewise shift again on to the complainant. The accused may also rely upon presumption of fact, for instance, those mentioned in section 114 of the evidence act to rebut the presumptions arising under section 118 and 139 of the Act".
43. In the present case of the complainant is that, the accused has approached the complainant second week of March 2018 and requested to lend sum of Rs.15,00,000/- as a loan to meet the urgent requirements. Accordingly the complainant had sanctioned the said loan. Ex.P.3 and 4 are the advance application and demand promissory note. In token of their acceptance of said loan, the accused had issued the cheque in question. However, it has been contended by the accused in his defence that the complainant has taken the several cheques and documents for the purpose of security and he has not issued for repayment of the said amount. The oral and documentary evidence adduced by the complainant are sufficient to prove that the cheque was issued for legally enforceable debt. An evidence adduced by the complainant/P.W.1 there would be presumption under C.C.NO.29895/2018 35 section 139 of N.I.Act. Further the accused did not adduced any cogent and reliable evidence, it is not sufficient to rebut the presumption raised under section 139 of the N.I.Act. It is quite unbelievable that in a business/mercantile transaction the accused even after making payment towards loan did not insist for the return of the cheques and documents. It is quite improbable that the accused did not take any steps to get back that cheques and documents.
44. Further the complaint filed within statutory period. That consequent to the non-payment of the cheque amount so demanded by the complainant within the statutory period, the complainant have filed the present complaint, which is well within limitation. Hence, contention of the accused cannot be considered that the cheques and other documents was issued to the complainant for the purpose of security. It is clear that there is no prohibition either in insolvency act or Negotiable Instruments Act for the complainant to approach the criminal court. The bar is extended to only civil detention and civil arrest, it would not cover under section 138 of the Negotiable Instruments Act.
45. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be C.C.NO.29895/2018 36 inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
46. In the case of Kalamani Tex V/s P. Balasubramanian, reported in (2021) 5 SCC 283 has observed that section 138 read with 139 of N.I.Act, presumption as to legally enforceable debt, effect of admission regarding signature on the cheque, in such situation, court held that required to presume that the cheque was issued as consideration for legally enforceable debt.
"13. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under section 118 and 139 of N.I.Act. The statute mandates that once the signature(s) of an accused on the cheque/Negotiable Instruments are established, then these "reverse onus"
clauses become operative. In such situation, the C.C.NO.29895/2018 37 obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallized by this court in Rohitbhai Jivanlal Patel V/s state of Gujrat, (2019) 18 SCC 106, Para 18: (2020) 3 SCC (Civil) 800:
(2020) 3 SCC (Cri) 575) in the following words:
(SCC pp. 120-21, para 18)".
"18. In case at hand, even after purportedly drawing the presumption under section 139 of the N.I.Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want to examination of relevant witness who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with principle of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused".
47. In the present case also, as the accused never disputed his signature and did not deny issuing cheque from the account of the accused company. The accused did not dispute cheque return memo also. The cheque was returned for the reasons Funds Insufficient in the account of the accused. Thus, the act clearly lays down presumptions in favour of the complainant with regard to the issuance of the cheque by the accused towards the discharge of the liability in favour of the complainant. Further under scheme of the Act, the onus is upon the accused to rebut the presumption in favour C.C.NO.29895/2018 38 of the complainant by raising a probable defence. Such being the legal position, it would be pertinent to refer to the defences raised by the accused to rebut the presumptions in favour of the complainant in this case.
48. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
49. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reason stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard. It was also contended by the accused that he had issued the blank cheques and documents to the complainant for the purpose of security. The said blank cheque and documents was misused by the complainant.
50. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of C.C.NO.29895/2018 39 cheque and filing false case against the accused is not possible. The accused is a businessman. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and other documents and had not return the same, inspite of collecting cheques leaves from him, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheques. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.6. After receiving demand notice issued by the complainant, the accused not given reply to the notice. While the accused did not issue the cheque and what prevented the accused to lodge complaint before concerned police station. The act of the accused shows that with a malafide intention to gulp-up the cheque amount and also with an intention to harass the complainant issued the cheque-
Ex.P.6 in favour of the complainant. But no such steps were taken by the accused. He simply makes a bald allegation of misuse of the cheque against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
51. Moreover, the complainant have got issued a legal notice to the accused by registered through its C.C.NO.29895/2018 40 counsel calling upon him to make repayment of said due amount to the complainant within 15 days from the date of receipt of notice. Before a person is held to be guilty of the offence punishable under 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that at Ex.P.6 is the cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt or liability. From the evidence of P.W.1 and also cheque return memo at Ex.P.7 it is established that the cheque was dishonored for the reasons "Funds Insufficient''. A legal notice being issued as per Ex.P.8 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not disputed the receipt of the legal notice. But the accused has not given reply to the said notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed the address, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
52. It is not the contention of the accused that thereafter he has repaid the cheque amount within stipulated time of 15 days on receiving the notice.
C.C.NO.29895/2018 41 Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients of section 138 N.I.Act, has been complied with. As the accused has not paid the cheque amount within stipulated period, the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even he did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, reported in 2010 (5) SCC 590, it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike Section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such, it has to be considered, whatever defences raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
53. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan (2018 (8) SCC 469), the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the C.C.NO.29895/2018 42 holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
54. As per the version of the accused he has nowhere seriously denied transaction. Further the accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that he had issued the cheque-Ex.P.6 and even after the accused has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant's have complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Therefore, the accused has failed to probables the defence taken by him that Ex.P.6 was the blank cheque and same was issued to the complainant for the purpose of security. Therefore, the accused has failed to rebut the C.C.NO.29895/2018 43 presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the transactions between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Since the initial presumption is still available, when there is no rebuttal evidence.
55. PW.1 in his evidence has specifically stated that the accused know the complainant company from last several years, the accuses used to borrow money from the complainant's company for the purpose of improvement of the accused business and liquidate some of the accused debts. The accused has approached the complainant's company once again in the second week of March 2018 and requested and demanded to lend a sum of Rs.15,00,000/- as loan to meet the urgent requirements of the accused. The complainant's company taking into the difficulties of the accused, has sanctioned the loan of Rs.15,00,000/-. The complainant's company has advanced the said loan through the cheque bearing No.225997 dated:
19.03.2018 of Rs.5,00,000/- and the cheque bearing No.226000 dated: 26.03.2018 of Rs.10,00,000/-, according to the convenience and requirement the accused has encashed the said cheques. At the time of C.C.NO.29895/2018 44 availing the said loan, the accused has executed advance application and on-demand promissory note.
The accused further agreed to repay the above said loan amount within short period along with interest at 2% per month. The accused has agreed and promised the complainant's company that the accused would not dodge the complainant's company in making the payment. Further stated that on demand, towards the part payment the accused has issued the cheque in question in favour of the complainant. As per the instructions and request made by the accused the complainant was presented the said cheque for encashment. When said cheque was presented by the complainant same was returned as funds insufficient, this is not seriously disputed by the accused. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, no documents could have been existence the evidencing financial transactions. This factor will not affect case of the complainant to disbelieve the financial transaction. The accused has failed to rebut the presumption under section 139 of N.I.Act. The accused has failed to probables his defence. Hence, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. With these reasons, I answer point No.1 and 2 in the Affirmative.
56.POINT NO.3 AND 4: In order to avoid repetition of facts, these two points are taken together C.C.NO.29895/2018 45 for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, they have to prove all the requirements of section 138 of N.I.Act. The cheque-Ex.P.6 being drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. Thereafter, the notice-Ex.P.8 being received by the accused not seriously disputed. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. After service of notice the accused neither paid the cheque amount nor reply to the said notice. Further the accused has not taken up the any contention that after he had paid the cheque amount within stipulated time of 15 days, after receipt of the notice. Hence, the accused is liable for dishonor of cheque. As such in the present case on perusal of the documents, the essential requirements of section 138 of N.I.Act have been complied with. Hence, the present complaint came to be filed before this court on 27.08.2018 within the period of one month from the date cause action.
57. While discussing the point No.1 and 2, this C.C.NO.29895/2018 46 court has already observed that the complainant have proved that the cheque-Ex.P.6 was issued for discharge of legally enforceable liability or debt and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. Hence, the accused is found to have committed an offence punishable under section 138 of N.I.Act. With these observations, I answer point No.3 and 4 in the Affirmative.
58. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following:
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused is hereby stands canceled.
C.C.NO.29895/2018
47
The accused is sentence to pay fine of
Rs.16,75,000/- (Rupees sixteen lakhs
seventy five thousand only) to the
complainant.
It is further ordered that out of the said fine amount an amount of Rs.16,60,000/- (Rupees sixteen lakhs sixty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment for the period of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 09 th day of January 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.01.11 16:09:32 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Smt.Hema Prabhu.
C.C.NO.29895/2018
48
List of documents marked on behalf of the complainant:
Ex.P.1 : Resolution/Board meeting. Ex.P.2 : Power of attorney. Ex.P.3 : Advance application. Ex.P.4 : Ondemand promissory note. Ex.P.5 : Certified copy of the account extract. Ex.P.6 : Cheque. Ex.P.6(a) : Signature of the accused. Ex.P.7 : Bank endorsement. Ex.P.7(a) : Receipt related to Ex.P.7. Ex.P.8 : Office copy of the legal notice. Ex.P.8(a) & 8(b) : Postal receipts. Ex.P.9 & 10 : Postal acknowledgements. Ex.P.11 : Complaint.
List of witnesses examined on behalf of the accused:
DW.1 : Sri.S.Sheshadri Kumar List of documents marked on behalf of the accused:
Ex.D.1 : Car insurance. Ex.D.2 & 3 : Complaint's given to the Commissioner
of Police, Benaluru and Jayanagar P.S. Ex.D.4 & 5 : Postal receipts.
Ex.D.6 : Sree Charan Co-operative Bank statement .
Ex.D.7 : ICICI Bank statement. Ex.D.8 : Certificate under section 65(b) of I.E.Act. Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date: 2024.01.11 16:10:03 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru. C.C.NO.29895/2018 49 09.01.2024 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER: Acting under section 255(2) of
Cr.P.C., the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.16,75,000/- (Rupees sixteen lakhs seventy five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.16,60,000/- (Rupees sixteen lakhs sixty thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.15,000/-
(Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment for the period of six months.
XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.