Bangalore District Court
Issued Statutory Notice Dated ... vs In His CrossExamination on 26 October, 2021
1 CC.16846/2019 (J)
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BANGALORE CITY.
Dated this the 26th Day of October2021
Present: Lokesh Dhanapal Havale. B.A.L.L.B.,
XV Addl.C.M.M., Bangalore.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case CC.No.16846/2019
2.Name of the Complainant: Sri.M.Govindaraj,
S/o.Late K.Murthy,
Aged about 45 years,
Residing at No.44/17,
2nd Cross, R.G.Nagar,
Bommanahalli,
Bengaluru560 068.
3.Name of the accused: Nithyananda P.S.
S/o.Chollan,
Aged about 43 years,
Residing at No.3033,
Shankarappa Building,
Sampige Nagara,
Kammasandra,
Bengaluru560 100.
4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(2) Cr.P.C., accused is
Convicted.
7.Date of final Order 26.10.2021.
***
2 CC.16846/2019 (J)
This complaint is filed U/Sec.200 of Cr.P.C. against the accused
for the offence punishable U/Sec.138 of the Negotiable Instruments
Act, 1881.
2. The facts of the complaint in brief are as under:
The complainant running the garage by name and style Balaji
Auto Garage, situated at NH7, Singasandra, Hosur Road, Bengaluru.
The accused is driver by profession and used to visit his garage to
repair his car. He is known from pat 56 years. In order to start petty
shop business of selling pan and cigarettes, the accused approached
him on 25.11.2018 and sought financial help of Rs.1,10,000/. He pai
the amount Rs.1,10,000/ to the accused by way of cash on
11.12.2018. The said amount was withdrawn from the bank account in
Karnataka Bank Ltd, Naganathpura branch, Bengaluru bearing
Ac.No.559250101002063301. A sum of Rs.20,000/ and Rs.10,000/
on 26.11.2018, a sum of Rs.20,000/ on 28.11.2018, a sum of
Rs.10,000/, Rs.10,000/ and Rs.10,000/ on 01.10.2018, a sum of
Rs.10,000/ and Rs.20,000/ on 10.12.2018. The amount was paid to
the accused by way of cash and the accused assured to repay it within 3
months. He approached the accused on 02.04.2019 for demanding
repayment and he issued post dated cheque bearing No.000007 dated
22.05.2019 for a sum of Rs.1,10,000/ drawn on Aandhra Bank,
Ananthnagar Branch, Bengaluru in favour of the complainant. He
presented the cheque for encashment through his Banker Karnataka
Bank Ltd., Naganathapura branch, Bengaluru on 22.05.2019 and it was
returned dishonored with endorsement "Funds Insufficient" on
23.05.2019. He issued the legal notice to the accused on 01.06.2019.
The notice was returned unserved on 11.06.2019 with shara
3 CC.16846/2019 (J)
Unclaimed/ Intimation Delivered. The accused issued cheque for
discharge of legal liability, which was dishonored and he failed to pay
the amount even after 15 days from the date of return of notice, which
was sent to the correct address of the accused. Hence prayed to punish
the accused and compensate the complainant.
3. After the institution of the complaint, cognizance was
taken and the case was registered as PCR No.8450/2019. The sworn
statement of the complainant was recorded and on the basis of sworn
statement and other materials on hand, criminal case was registered
against the accused and summons was issued to him. In response to the
service of summons the accused appeared through his learned counsel
and got enlarged on bail. The prosecution papers supplied to the
accused and the substance of accusation for the offence punishable
U/s.138 of Negotiable Instruments Act was read over to the accused.
She pleaded not guilty and claimed to be tried.
4. During trial the complainant examined as PW1 and got
marked Ex.P.1 to P.5. The statement of the accused U/s. 313 of Cr.P.C.
was recorded. The accused examined himself as DW1. He did not
mark any documents.
5. I have heard the argument of both learned counsels and
perused the entire materials. The following points would arise for my
consideration.
1. Whether the complainant proves that the accused
issued cheque bearing No.000007 dated 22.05.2019
4 CC.16846/2019 (J)
for a sum of Rs.1,10,000/ drawn on Aandhra Bank,
Ananthnagar Branch, Bengaluru in his favour
towards the discharge of legally enforceable
debt/liability and on its presentation for
encashment, it was dishonored with an
endorsement of "Funds Insufficient" in the account
maintained by the accused and the accused has not
paid the amount even after 15 days from the date of
return of notice, which was sent to his correct
address and thereby accused committed an offence
punishable U/Sec.138 of N.I. Act, 1881 ?
2. Whether the accused rebuts the presumption
U/s.139 of N.I.Act?
3. What order?
6. My answers to the above points are as under.
Point No.1 : In the Affirmative
Point No.2 : In the Negative
Point No.3 : As per final order for the following;
REASONS
7. Point No.1 & 2: The points are taken together for discussion
to avoid repetition of facts and evidence. At this juncture, it is necessary
to go through the provisions of N.I.Act before proceeding further. The
provisions under Section 118(a) and 139 of the Act., 1881 are
extracted and they reads thus;
"118. Presumptions as to negotiable
instruments. - Until the contrary is proved, the
following presumptions shall be made:
5 CC.16846/2019 (J)
(a) of consideration - that every negotiable
instrument was made or drawn for consideration,
and that every such instrument, when it has been
accepted, indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or transferred for
consideration.
(b) as to date: that every Negotiable
Instrument bearing date was made or drawn on
such date;
"139. Presumption in favour of holder. 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."
8. On plain perusal of the provisions under Section 118(a)
and 139 of the N.I.Act., as extracted herein above, it can be seen that
initially the presumptions constituted under these two provisions
favour the complainant. However, it is open to an accused to raise a
defence to rebut the statutory presumptions. An accused can raise a
defence, wherein the existence of legally enforceable debt or liability
can be contested.
9. It is also well established that an accused for discharging
the burden of proof placed upon him under a statute need not examine
himself. He may discharge his burden on the basis of the materials
6 CC.16846/2019 (J)
already brought on record. An accused has constitutional rights to
maintain silence. Standard of proof on part of the accused and that of
the prosecution in a Criminal case is different. The prosecution must
prove the guilt of an accused beyond all reasonable doubts, the
standard of proof so as to prove a defence on the part of an accused is
"Preponderance of probabilities".
10. Under the light of above extracted provisions of the Act, I
have perused the oral and documentary evidence on record. In order to
prove his case the complainant examined himself as PW.1 and got
marked Ex.P.1 to P.5. Ex.P.1 is the cheque dated 22.05.2019 for
Rs.1,10,000/ drawn on Andhra Bank, Ananthanagar Branch,
Bengaluru in favour of the complainant. Ex.P.1(a) is the signature of
the accused. Ex.P.2 is the Bank endorsement dated 23.05.2019, which
was received with shara "Funds Insufficient". Ex.P.3 is the office copy
of legal notice dated 01.06.2019. Ex.P.4 is the postal receipt for having
sent the legal notice to the accused. Ex.P.5 is the postal envelope,
which was returned unserved with shara "Intimation
Delivered/Unclaimed". Ex.P.6 is the Bank Pass Book of Karnataka Bank
Ltd. pertaining to the account of the complainant. It discloses that on
26.11.2018 an amount of Rs.20,000/, on 26.11.2018 an amount of
Rs.10,000/, on 28.11.2018 an amount of Rs.20,000/, on 01.12.2018
an amount of Rs.10,000/, on 01.12.2018 an amount of Rs.10,000/,
on 01.12.2018 an amount of Rs.10,000/, on 10.12.2018 an amount of
Rs.10,000/ and on 10.12.2018 an amount of Rs.20,000/ was
withdrawn by way of cash through ATM by the complainant.
7 CC.16846/2019 (J)
11. I have perused the exhibits on which the complainant has
placed his reliance. On perusal of the exhibits, it is clear that cheque at
ExP.1 bearing No.000007 dated 22.05.2019 drawn on Karnataka Bank
Ltd, Ananthnagar Branch, Bengaluru was presented through the Bank
within its validity for encashment and the Bank issued endorsement as
per Ex.P.2 on 23.05.2019 with shara "Funds Insufficient". The
complainant issued statutory notice dated 01.06.2019 as per Ex.P.3
within time from the date of receipt of Bank Memo. The notice was not
served on the accused and it was returned with shara "Intimation
Delivered/ Unclaimed" on 11.06.2019 as per postal envelope at Ex.P.5.
The service of notice was disputed. It was suggested in the cross
examination of PW.1 that the notice was not served. When the accused
was cross examined by the counsel for the complainant in respect of
the service of notice. DW.1 stated in his cross examination that he did
not receive the notice sent by the complainant. However he admitted
the address on Ex.P.5. It shows that the address mentioned in the
notice, complaint and envelope is the correct address of the accused.
The admission leads to draw presumption as per Section 27 of General
Clauses Act, which states that the notice sent through post shall be
deemed to be served, if it is properly addressed to a person to whom it
is sent. Therefore, in view of the admission of the address by the
accused in his crossexamination, the notice at Ex.P.3 is deemed to
have been served on him. Even otherwise as per the Judgment of the
Hon'ble Supreme Court of India in Crl.Appeal No.767 of 2007 (Arising
out of SLP (Crl) No.3910 of 2006 between CC Alavi Haji
Vs.Palapetty Muhammed and another decided on 18.5.2007, wherein it
has been held by the Hon'ble Supreme Court of India para No.17 as
under;
8 CC.16846/2019 (J)
17. It is also to be borne in mind that the
requirement of giving of notice is a clear departure from
the rule of Criminal Law, where there is no stipulation
of giving of a notice before filing a complaint. Any
drawer who claims that he did not receive the notice
sent by post, can, within 15 days of receipt of
summons from the court in respect of the complaint
U/s.138 of the Act, make payment of the cheque
amount and submit to the Court that he had made
payment within 15 days of receipt of summons (by
receiving a copy of complaint with the summons) and,
therefore, the complaint is liable to be rejected. A person
who does not pay within 15 days of receipt of the
summons from the Court along with the copy of
the complaint u/s.138 of the Act, cannot obviously
contend that there was no proper service of notice as
required u/s.138, by ignoring statutory presumption to
the contrary u/s.27 of the G.C. Act and Section 114 of
the Evidence Act. In our view, any other interpretation
of the proviso would defeat the very object of the
legislation. As observed in Bhaskaran's case (supra), if
the 'giving of notice' in the context of Clause (b) of the
proviso was the same as the 'receipt of notice'
a trickster cheque drawer would get the premium to
avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section
138 of the Act.
12. In a nutshell it can be said that the statutory notice is an
opportunity given to the accused to make payment and avoid the
consequences of 138 of N.I.Act. In the case on hand, the summons was
served on the accused on the said address, he appeared before the
Court and contested the case by taking all probable defences. Therefore
he cannot take the shelter of statutory requirement of service of notice
to avoid the consequences of Section 138 of N.I.Act. The complaint
9 CC.16846/2019 (J)
was filed on 06.07.2019, which is within limitation. Therefore the
presumptions U/s.118 and 139 of the N.I.Act arise in favour of the
complainant. The presumptions are rebuttable and the burden is on the
accused to rebut the presumptions. The accused can rebut the
presumptions by raising probable defences and proving it relying on the
evidence of the complainant or by leading his direct evidence.
13. The accused admitted the signature on the cheque at ExP.1
but he disputed the issuance of cheque. It is the defence of the accused
that he did not take any hand loan from the complainant and there is
no transaction between them as alleged. He knew the complainant as
he used to visit the garage of the complainant for repair of his vehicle.
The complainant is mechanic and he misused the blank signed cheque
kept in the vehicle of the accused. In order to prove his defence the
accused examined himself as DW1 but he did not get marked any
documents.
14. The counsel for the accused cross examined the PW.1 in
respect of alleged transaction of accused with the complainant. PW.1
answered all the questions and denied all the suggestions made by the
counsel for the accused in that regard. He clearly deposed that the
amount of Rs.1,10,000/ was given to the accused after drawing it from
the bank. The amount was given by way of cash. Nothing was elicited
in the cross examination of PW.1, except minor inconsistencies, in
support of the defence of the accused. The counsel for the accused did
not cross examine the PW.1 in respect of theft of cheque from the
vehicle, when it was left with him for repair. He made mere suggestion
in that regard and PW.1 denied the same. It is pertinent to note that no
10 CC.16846/2019 (J)
action was taken for misuse of stolen cheque. No prudent man would
have kept quiet, if his cheque was stolen and misused. Therefore the
defence of the accused is not believable.
15. On perusal of Ex.P.1, it makes clear that the writings on
the cheque and signature appears to have written with different ink.
However it is admitted by the accused that he signed the cheque in
question. He disputed the name and details written on the cheque.
PW.1 was cross examined in that regard and he clearly deposed that
the written cheque was given by the accused to him. Even though
cheque was blank and it was filled by the complainant, such aspects
have no bearing on the case because as per the presumption
U/s.118(b) of N.I.Act every Negotiable Instrument bearing a date was
made or drawn on such date and as per Section 20 of the N.I.Act, if the
person signs and delivers Negotiable Instrument and it is left
incomplete and thereby he authorizes the holder to complete the
Negotiable Instrument and thereby he is liable for the amount
mentioned in the Negotiable Instrument. Therefore, the defence of the
accused is not tenable. Further in view of the Judgment rendered by
the Hon'ble Supreme Court of lndia in Bir Singh V/s.Mukesh Kumar
reported in AIR 2019 SC 2446, also the above defence is not tenable.
The para No.38 and 40 of the said Judgment are extracted and the
paragraphs reads thus:
38. If a signed blank cheque is voluntarily
presented to a payee, towards some payment, the
payee may fill up the amount and other particulars.
This in itself would not invalidate the cheque. The
onus would still be on the accused to prove that the
11 CC.16846/2019 (J)
cheque was not in discharge of a debt or liability by
adducing evidence.
40. Even a blank cheque leaf, voluntarily
singed and handed over by the accused, which is
towards some payment, would attract presumption
under Section 139 of the Negotiable Instruments Act,
in the absence of any cogent evidence to show that the
cheque was not issued in discharge of a debt.
16. It is the specific defence of the accused that the cheque in
question was stolen by the complainant from his vehicle, when it was
left for repair. However the accused did not adduce any evidence to
show that the cheque in question was stolen by the complainant, except
making suggestions. Mere suggestions are not sufficient. The accused
has to prove his defence by adducing evidence. Moreover, unless and
until, the defence is able to prove that the cheque was stolen, mere
suggestion in that regard does not rebut the presumption under section
118 (a) of the Act. Therefore, the burden is on the accused to prove
that there was no legally recoverable debt or liability. Therefore the
defence of the accused that the signed blank cheque was stolen and
misused is not tenable.
17. The accused admitted the signature on the cheque and
issuance of the cheque is proved from the above discussion. Therefore
the presumption arises in favour of the complainant. The admission
attracts the ratio laid down by the Hon'ble Supreme Court of India in
its decisions reported in 2011 (11) SCC 441 - Rangappa V/s Mohan
and 2015 (8) SCC 378 - T.Vasanthakumar V/s.Vijayakumari. The ratio
12 CC.16846/2019 (J)
is that the cheque shall be presumed to be for consideration unless and
until the court forms a belief that the consideration does not exist or
considers the nonexistence of consideration so probable that a prudent
man ought under such circumstances act upon the supposition that it
does not exist. The documents on record clearly show that the
complainant has complied the ingredients of Section 138(a) to (c) of
the N.I.Act. In the case on hand the accused did not prove his defence
to rebut the presumption U/s 139 of NI Act raised in favour of the
complainant and therefore the onus has not shifted on the complainant.
In the case on hand no evidence was brought on record to show that
the cheque was not issued for the discharge of debt or liability.
18. As per decision of the Hon'ble Supreme Court of India
reported in AIR 2019 SC 1876 in the case of Rohitbhai Jivanala Patel
Vs. State of Gujarath and another, the Hon'ble Supreme Court observed
at para No.14 and 17 as under:
14. So far the question of existence of basic
ingredients for drawing of presumption under Sections 118
and 139 the NI Act is concerned, apparent it is that the
accusedappellant could not deny his signature on the
cheques in question that had been drawn in favour of the
complainant on a bank account maintained by the accused
for a sum of Rs. 3 lakhs each. The said cheques were
presented to the Bank concerned within the period of their
validity and were returned unpaid for the reason of either
the balance being insufficient or the account being closed.
All the basic ingredients of Section 138 as also of Sections
118 and 139 are apparent on the face of the record. The
Trial Court had also consciously taken note of these facts
and had drawn the requisite presumption. Therefore, it is
required to be presumed that the cheques in question were
13 CC.16846/2019 (J)
drawn for consideration and the holder of the cheques i.e.,
the complainant received the same in discharge of an
existing debt. The onus, therefore, shifts on the accused
appellant to establish a probable defence so as to rebut such
a presumption.
17. In the case at hand, even after purportedly
drawing the presumption under Section 139 of the NI 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 of
examination of relevant witnesses who allegedly extended
him money for advancing it to the accused. This approach
of the Trial Court had been at variance with the principles
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 accusedappellant. The
aspect relevant for consideration had been as to whether the
accusedappellant has brought on record such
facts/material/circumstances which could be of a
reasonably probable defence.
19. In the case on hand the accused did not prove his defence
to rebut the presumption U/s 139 of NI Act raised in favour of the
complainant and therefore the onus has not shifted on the complainant
to prove his case. In the case on hand no evidence was brought on
record to show that the cheque was not issued for the discharge of debt
or liability. Moreover the complainant produced the bank pass book of
his SB account as per ExP.6 to show that the amount of Rs.1,10,000/
was withdrawn from the bank through ATM on various dates
14 CC.16846/2019 (J)
immediately prior to the date lending. It is clear from ExP.6 that the
complainant has financial capacity to lend the loan. The counsel for the
accused pointed our variance in the complaint averments and the
evidence stating that it is averred in the complaint that the amount of
Rs.10,000/ was withdrawn thrice on 01.10.2018 but there is no
evidence to that effect. On perusal of the ExP.6, it is found that the
complainant withdrawn Rs.10,000/ thrice on 01.12.2018. It clearly
show that that the date i.e. 01.10.2018 appears to be a typographical
error and nothing else. The complainant clearly substantiated his case
by adducing the cogent evidence. The bank pass book at ExP.6 shows
that he withdrew an amount of Rs.1,10,000/ on various dates after the
date of asking loan and immediately before the date of lending the
amount. It also shows the financial capacity of the complainant. There
is no contrary evidence on record. Therefore the accused failed to prove
that there is no legally recoverable debt or liability.
20. The counsel for the accused relied on the Judgment of
Hon'ble High Court of Karnataka in the case of Veeraiah
Vs.G.K.Madivalar reported in 2012(3) KCCR 2057, wherein it was held
that "Mere issuance of cheque is not sufficient unless it is shown that said
cheque was issued towards discharge of legally recoverable debt. When the
financial capacity of the complainant is questioned, the complainant has
to establish his financial capacity". He also relied on the Judgment of
Hon'ble Supreme Court of India in the case of Basalingappa
Vs.Mudibasappa reported in (2019) 5 SCC 418, wherein it was held
that "when the accused disputed the financial capacity of the complainant
and led evidence to prove it to show the probable defence, the burden
would be on the complainant to establish his financial capacity". However
15 CC.16846/2019 (J)
as per the discussion made above, the accused did not lead any
evidence to prove his probable defence. He questioned the financial
capacity of the complainant and the complainant discharged the onus
by producing the Bank passbook at Ex.P.6, which clearly show the
financial capacity of the complainant. The accused failed to prove that
there is no legally recoverable debt. On the other hand the complainant
adduced supporting evidence apart from the cheque at Ex.P.1.
Therefore the Judgments relied on by the counsel of the accused are
not applicable to the facts of the case.
21. For the reasons mentioned herein above, it is crystallized
that the accused has utterly failed to prove that there was no existence
of legally enforceable debt between him and the complainant at the
given point of time and he has not at all issued the instant cheque
towards the discharge of legally enforceable debt of Rs.1,10,000/. On
the other hand, the complainant proved that the accused issued the
cheque for the legally enforceable debt; the cheque was dishonored
due to insufficiency of funds in his account and the notice issued to the
accused was sent to the correct address of the accused and even though
the envelope was returned, the notice is deemed to have been served.
The complainant proved his case beyond reasonable doubt. On the
other hand, the accused failed to rebut the statutory presumptions
U/s.118(a) & (b) and 139 of the N.I.Act. Accordingly the accused is
found guilty for the offence punishable U/s.138 of the N.I.Act. Hence, I
proceed to answer the point No.1 in Affirmative and Point No.2 in the
Negative.
16 CC.16846/2019 (J)
22. Point No.3 : In view of the reasons assigned on Point No.1
and 2, I proceed to pass the following:
ORDER
As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine of Rs.1,30,000/ (Rupees One Lakh Thirty Thousand Only). On deposit of fine amount the complainant is entitled for compensation of Rs.1,25,000/ (Rupees One Lakh Twenty Five Thousand Only). The remaining balance amount of Rs.5,000/ is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for two months.
The personal bond executed by the accused is hereby stands cancelled and cash surety of Rs.2,000/ furnished by the accused shall be refunded to her after expiry of appeal period.
Copy of the judgment shall be furnished to the accused at free of cost.
(Dictated to the Stenographer, transcript thereof is computerized and printout taken by him, is verified and then pronounced by me in Open Court on this the 26th day of October2021.) (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
17 CC.16846/2019 (J) ANNEXURE Witnesses examined for the Complainant: PW.1 M.Govindaraj Documents marked for the Complainant: Ex.P.1. Cheque Ex.P.1a Signature of the accused.
Ex.P.2 Bank endorsement.
Ex.P.3 Legal Notice.
Ex.P.4 Postal receipt.
Ex.P.5 Postal envelope.
Ex.P.6 Bank Passbook.
Witnesses examined For Defence: DW1 Nithyananda P.S. Documents marked for Defence: Nil (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.