Bangalore District Court
Sri. K.Nagaraj Shet vs Sri.Raghavendra Shet on 30 November, 2021
1
C.C.No.10567/2018 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 30th day of November 2021
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No. 10567/2018
Complainant : Sri. K.Nagaraj Shet,
S/o. Late Narahari Shet,
R/at Door No.47,
Main Road,
Thyagarajanagara,
Bengaluru 560 028.
Rep. by Sri. Kumar and Bhat.
Advs.,)
Vs
Accused : Sri.Raghavendra Shet,
S/o. Narashimha Shet,
Dhanalaxmi Jewellers,
College Road,
Byndoor 576214,
Udupi District.
(Rep. by Sri. Shivakumar,
G.Sridhara Murthy & others.. Adv.,)
Case instituted : 11.04.2018
Offence complained : U/s 138 of N.I Act
of
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C.C.No.10567/2018 J
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 30.11.2021
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, accused is well known to him since so many years and has approached him for financial assistance and he agreed and paid a sum of Rs.1,90,000/ to the accused on 18 th September 2015 to clear the loan of the Bydnoor Vyavasaya Seva Sahakari Sangha Niyamith wherein the accused has availed the loan, since the accused requested him to make the payment of Rs.1,90,000/=, he had taken gold loan of Rs.1 Lakh and remaining amount of Rs.90,000/= altogether Rs.1,90,000/= paid by him to clear the liability of the accused and accused has agreed to repay the above said amount along with interest within 2 years by executing the letter of undertaking dated:
3C.C.No.10567/2018 J 18.9.2015 in his favour. It is further contended by the complainant that, after repeated request and reminders made by him, the accused has issued a cheque bearing No.755971 dated: 18.12.2017 for a sum of Rs.1,90,000/= drawn on Syndicate Bank, Byndoor Branch, Byndoor in his favour and as per assurance, when he presented the said cheque for encashment through his banker, same came to be returned dishonoured as "Funds Insufficient' vide bank endorsement dated: 1.1.2018, immediately he intimated the same to the accsued but the accused requested him to represent the said cheque again and accordingly he represented the said cheque bearing No.755971 dated:19.2.2018 for encashment, again it returned dishonoured as "Funds Insufficient' vide bank endorsement dated:
22.2.2018, thereafter he got issued a legal notice to the accused on 1.3.2018 through RPAD calling upon the accused to pay the cheque amount to him within 15 days from the date of the receipt of the said legal notice and the said notice has been served on the accused on 8.3.2018 after receipt of the said notice, the accused has not paid the said amount, Hence the complainant has filed this present complainant 4 C.C.No.10567/2018 J against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
3. Before issuing process against the accused, the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his sworn statement, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to Ex.P.5 i.e, original Cheque dt:18.12.2017 as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Memo as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, the postal receipt as per Ex.P.4, Postal acknowledgement as per Ex.P.5, signature of the accused on Ex.P.5(a) ( marked through DW.1)
4. Primafacie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
5C.C.No.10567/2018 J
5. In view of the principles of law laid down and as per the directions of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the accused, as he intended to set out his defence, and the case was posted for cross examination of complainant.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence, subsequently the accused himself examined as DW1 and he has relied upon the documentary evidence as per Ex.D.1 i.e, Reply notice and postal acknowledgement as per Ex.D.1 and Ex.D.2.
7. Heard the arguments by learned counsel for the complainant and perused the written arguments relied upon by the learned counsel for the accused and the decisions relied upon by the learned counsel for the complainant ie., W.P.(Civl) No.18/2013 Indian Bank Association & Ors Vs/ 6 C.C.No.10567/2018 J Uniion of India & anr. 2) 2021 (4) RCR (Criinal ) 250, 3) AIR 2010 SC 1898. The learned counsel for the accused did not addressed arguments inspite of providing opportunity.
8. On the basis of complaint, evidence of complainant and documents and having heard the arguments of learned counsel for the complainant, and written argument submitted by the counsel for the accused, the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued cheque bearing No.755971 dated: 18.12.2017 for a sum of Rs.1,90,000/= drawn on Syndicate Bank, Byndoor Branch, Byndoor to discharge legally recoverable debt to the complainant and when the complainant has presented the above said cheques for encashment through his banker but the said cheques have been dishonoured for the reasons "Funds Insufficient" on 22.2.2018 and the complainant issued legal notice to the accused on 1.3.2018 and inspite of it the accused has not paid the cheques amount within prescribed period there by the accused 7 C.C.No.10567/2018 J has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
9. The above points are answered as under:
Point No.1: In the Affirmative Point No.2:As per final order for the following:
REASONS
10. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. 8 C.C.No.10567/2018 J Act presupposes three conditions for prosecution of an offence which are as under:
1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
11. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages 9 C.C.No.10567/2018 J certain presumptions i.e., U/s.118 a presumption shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
12. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, accused is well known to him since so many years and has approached him for financial assistance and he agreed and paid a sum of Rs.1,90,000/ to the accused on 18th September 2015 to clear the loan of the Bydnoor Vyavasaya Seva Sahakari Sangha 10 C.C.No.10567/2018 J Niyamith wherein the accused has availed the loan, since the accused requested him to make the payment of Rs.1,90,000/=, he had taken gold loan of Rs.1 Lakh and remaining amount of Rs.90,000/= altogether Rs.1,90,000/= paid by him to clear the liability of the accused and accused has agreed to repay the above said amount along with interest within 2 years by executing the letter of undertaking dated: 18.9.2015 in his favour. The complainant/PW.1 further testified that, after repeated request and reminders made by him, the accused has issued a cheque bearing No.755971 dated: 18.12.2017 for a sum of Rs.1,90,000/= drawn on Syndicate Bank, Byndoor Branch, Byndoor in his favour and as per assurance, when he presented the said cheque for encashment through his banker, same came to be returned dishonoured as "Funds Insufficient' vide bank endorsement dated:
1.1.2018, immediately he intimated the same to the accused but the accused requested him to re present the said cheque again and accordingly he represented the said cheque bearing No.755971 dated:19.2.2018 for encashment, again it returned 11 C.C.No.10567/2018 J dishonoured as "Funds Insufficient' vide bank endorsement dated: 22.2.2018, thereafter he got issued a legal notice to the accused on 1.3.2018 through RPAD calling upon the accused to pay the cheque amount to him within 15 days from the date of the receipt of the said legal notice and the said notice has been served on the accused on 8.3.2018 after receipt of the said notice, the accused has not paid the said amount,
13. In support of his oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to Ex.P.5 i.e, original Cheque dt:18.12.2017 as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Memo as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, the postal receipt as per Ex.P.4, Postal acknowledgement as per Ex.P.5, signature of the accused on Ex.P.5(a).
14. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not disputed by the accused that, the cheque in question ie Ex.P.1 12 C.C.No.10567/2018 J belongs to his account and signature found at Ex.P.1(a) is that of his signature. The accused has also not disputed that, the cheque in question was presented to the encashment within its validity period and the said cheque has been returned as dishonoured for the reason of "Funds Insufficient" as per the returned memo issued by the concerned bank i.e Ex.P.2, hence as a matter on record it is proved by the complainant that, the cheque in question was dishonoured for the reason of Funds Insufficient. It is also not in dispute by the accused that, the legal notice caused by the complainant was within 30 days from the date of receipt of bank memo but the accused has disputed the service of notice upon him. Hence, the complainant has complied the mandatory requirements as required U/s.138(a) to (c) of N.I.Act, therefore initial presumptions can be drawn in fvour of the complainant as required U/s.118(a) and 139 of N.I.Act
15. The accused in his defence has denied the lending of loan amount of Rs.1,90,000/ by the complainant to him and also issuance of cheque in 13 C.C.No.10567/2018 J question in favour of the complainant to discharge the loan amount. In this regard, the learned counsel for the accused has cross examined the complainant in length but nothing has been elicited either to discard or discredit the evidence of complainant, instead of eliciting materials on records the accused much concentrated on production of the documents with regard to pledging of the gold by the complainant. The complainant has denied the suggestion made to him that, the accused has borrowed Rs.40,000/ on 5.10.2016 from him and subsequently he has repaid the entire amount along with interest and at the time of receiving the loan amount he had collected the cheque in question as security to the said loan and inspite of requests made by the accused he did not return the cheque in question and has filed this false complaint against him. It is true that, complainant is admitted that, he is working as Gold Appraiser in Byndoor Vyavasaya Seva Sahakara Sanga but has denied the suggestion that, he has misused the cheque in question which was collected from the accused towards security of the loan amount, therefore on entire perusal of the cross examination of the complainant nothing has 14 C.C.No.10567/2018 J been elicited by the accused either to disbelieve the evidence of the complainant or to accept the defence of the accused.
16. It is also relevant here to mention that, though the accused has denied the lending of loan amount by the complainant and has taken specific defence that, the complainant has not produced the document to show that, he has lend the loan amounts in question to the accused and the cheque in question has been issued towards discharge of the debt in question. As it is held in the above that, the complainant has proved that, he has lend an amount of Rs.1,90,000/ to the accused and also issued the Ex.P.1 cheque towards discharge of the said loan amount. Apart from that, as it is already held in the above that, the complainant has complied the mandatory requirements as required U/s.138(a) to (c) N.I.Act by producing oral and documentary evidence and the accused has also admitted that, the cheque in question belongs to the account and the signature found on cheque in question is that of the signature of the accused and the cheque in question issued in favour of the 15 C.C.No.10567/2018 J complainant. It is also proved by the complainant that, the cheque in question has been presented to the bank within its validity period and same has been dishonored for want of sufficient funds and thereafter the complainant got issued legal notice to the accused and in turn the said notice was served on the accused, in such circumstance even in the absence of documentary evidence with regard to source of funds, a presumption can be drawn in favour of the complainant with regard to existence of debt or legally recoverable debt. In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s.
Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was an adequate proof 16 C.C.No.10567/2018 J of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque is statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory
- Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex 17 C.C.No.10567/2018 J Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15032018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that " When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "
Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other 18 C.C.No.10567/2018 J liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt". It is also held that, " the Trial 19 C.C.No.10567/2018 J court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however 20 C.C.No.10567/2018 J such presumption is rebuttable in nature". In another decision of Hon'ble Apex Court of India reported in ICL 2021(2) SC 529 in the case of M/s Kalamani Tex Vs. P. Balasubramanian, dt:
10.02.2021, wherein the Hon'ble Apex Court held that, "once the accused had admitted his signatures on the cheque and deed, the trial court ought to have presumed that, the cheque was issued as consideration for legally enforceable debt." In another decision of Hon'ble Apex Court of Indian in Crl. Appeal No.132/2020 in the case of D. K. Chandel Vs. M/s Wockhardt (L) wherein it is held that, "Production of account books / cash book may be relevant in the civil court, may not be so in the criminal case filed under Sec.138 of N.I. Act while restoring the trial court judgments, the High Court observed that "the reason given by the lower Appellate Court that, he did not bring the cash book or order book etc., could well be understood, if civil suit is tried." But may not be so in the criminal case filed under Sec.138 of N.I. Act. This is 21 C.C.No.10567/2018 J because of presumption raised in favour of holder of cheque. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to his account and 22 C.C.No.10567/2018 J signature appearing on the cheque is that of his signature, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the accused that, the complainant has not produced the documents to show that, he has lent an amount of Rs.1,90,000/ to him and the documents produced by the complainant are not sufficient to prove that, complainant was having financial capacity to lend the money and complainant has not examined any witnesses to prove that, he has lent the loan amount to the accused cannot be acceptable one. The defence taken by the Accused appears that, the complainant has to prove his claim by producing his evidence as if it is required for proving of his debt before the Civil Court, but same cannot be permissible in a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decision, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question was drawn for consideration as the Accused has 23 C.C.No.10567/2018 J admitted the cheque in question belongs to him and signature found on the cheque in question is that of his signature.
17. It is suggested by the learned counsel for the accused to the complainant that, there is differences in signature found on the cheque and rest of the contents of the cheque in question but the complainant ignored the said suggestion by stating that, at the time of handing over of the cheque the contents in the cheque were got written and in his presence the accused has signed to the cheque in question and handed over to the same but has denied the suggestions that, the said cheque has been collected for security as blank signed cheque. As it is already held in the above that, the accused has admitted issuance of cheque infavour of the complainant and his signature on the cheque, in such circumstances even for sake of discussion, if it is assumed that, the accused had given blank signed cheque, unless and until he proved that, the said cheque was not given towards discharge of any debt or liability, it can be presumed that, the cheque in question issued towards discharge of the liability or 24 C.C.No.10567/2018 J debt in question. In this regard it is relevant here to refer the decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Appeal No.1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 25 C.C.No.10567/2018 J 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars 26 C.C.No.10567/2018 J would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law laid down by Hon'ble Apex court of India and also Hon'ble High Court of Karnataka referred above and in the present case also the Accused has admitted his signature on Negotiable Instrument i.e. cheque and he also admitted issuance of the cheque to the complainant, it is primafacie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the 27 C.C.No.10567/2018 J mouth of the Accused that, the complainant had misused or fabricated the cheque in question given by him and the defence of the Accused cannot be acceptable one as the instrument i.e., cheque in question cannot be rendered unenforceable merely because the contents have been filled by different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it.
18. In addition to that, even for sake of discussion if it is assumed that, Accused has given cheque in question without mentioning the name of the payee and date to the complainant in such circumstances also it attracts the penal liability as contemplated U/s.138 of N.I. Act. In this regard, it is relevant here to refer decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not 28 C.C.No.10567/2018 J conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of presumed fact." In the present case though the Accused has denied the contents of the cheque in question except his signature but he did not proved his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I.Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden by complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars 29 C.C.No.10567/2018 J and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In view of the principles of law 30 C.C.No.10567/2018 J laid down as above, even if it is assumed that, the complainant has written his name and date on the cheque in question in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the said cheque has been issued towards discharge of legally recoverable debt, therefore the defence of the accused not sustainable in law and cannot be acceptable.
19. The accused in order to rebut the presumptions available to the complainant himself examined as DW.1, and in his evidence stated that, he and accused are hails from same village and known to each other since 10 years and on 5.10.2016 he had borrowed a sum of Rs.40,000/ as hand loan from the complainant at that time he had collected cheque in question towards security of the said loan amount and thereafter he has paid the aid loan amount along with interest by way of cash and requested for return of his blank signed cheque at that time the complainant informed him that, the said cheque was kept in his house and inspite of his 31 C.C.No.10567/2018 J repeated requests he did not return the same thereafter he received notice from the complainant at that time only he came to know that, the complainant has misused the cheque in question by filing this false complaint for sum of Rs.1,90,000/ and he had given reply to the said notice which is at Ex.D.1.
20. The accused in order to substantiate his defence except the oral evidence has not produced any documentary evidence to show that, he had borrowed a loan of Rs.40,000/ on 5.10.2016 from the complainant and at that time the complainant had collected his signed blank cheque as security and he has repaid the said amount to the complainant, therefore the oral evidence of the accused remained as allegations against the complainant but same has not been proved and the defence taken by the accused appears to be to evade payment of the cheque amount or to avoid the liability in question. It is important here to mention that, if really the accused has repaid the loan amount to the complainant and if the complainant did not return his blank signed cheque till receipt 32 C.C.No.10567/2018 J of legal notice, definitely the accused would have initiated legal action against the complainant but the accused has not made any efforts either to get return of his alleged blank signed cheque handed over to the complainant from the complainant, hence the conduct of accused in not initiating any action or efforts made by the accused to get return of his blank signed cheque may leads to draw an adverse inference against him that, the accused has taken such defence only to avoid repayment of the cheque amount or liability in question not for any other defence more specifically the defence taken by the accused in this case, therefore the defence of the accused appears to be denial in nature not plausible defence. In this regard, it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt cheques allegedly issued 33 C.C.No.10567/2018 J by accused towards repayment of debt Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt Conviction, Proper." Hence by applying the above principles of law to the present facts of the case in the present case the Accused has not produced any documents to prove his defence, under such circumstances, it can be held that, the accused has not made any effort to get return of the cheque in question alleged to have been given to the complainant, in such circumstances, the said unnatural conduct of the accused in non taking of action may leads to draw an adverse inference against the accused that, the cheques in question issued by the accused only towards discharge of the liability and presumption 34 C.C.No.10567/2018 J U/s.139 of N.I. Act would operate against him, as he has admitted the signature and cheque in question belongs to him.
21. The accused in his defence has stated that, he had given blank signed cheque to the complainant towards security of the loan amount of Rs.40,000/ borrowed from him on 5.10.2016 and he had repaid the entire loan amount along with interest to the complainant but the complainant failed to return the security cheque to him inspite of his repeated demands and the complainant misused the said cheque by filing this false complaint, but in order to prove the said defence except the oral defence accused has not produced single piece of paper to prove his defence but the defence of the accused remained as allegations against the complainant, in such circumstances it cannot be held that, the cheque in question was handed over to the complainant at the time of borrowing loan amount itself towards security of the alleged loan amount and the accused has repaid the said amount despite of it, the complainant did not return his security cheque and complainant has misused 35 C.C.No.10567/2018 J the same. In this regard, it is relevant here to refer the decision of Hon'ble Apex court of India decided in Crl Appeal No.271/2020 in the case of Forex Services Pvt. Ltd., Vs/ Shakthi International Fashion Linkers and Others., wherein the Hon'ble Apex Court held that " the defence of the accused that, cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption. It is also held that, once the issuance of cheque has been admitted and even in the signature on the cheque has been admitted, there is always presumption in favour of the complainant that, there exist legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence". In the present case the accused has failed to prove his defence and also failed to produce evidence to rebut the presumptions, but has admitted the issuance of cheque and also signature thereon is that of his signature, hence by applying the principles of law laid down in the above decisions the defence of the 36 C.C.No.10567/2018 J accused cannot be acceptable one. In another decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of Lale Patel Vs. Sharanabasappa., wherein the Hon'ble High Court held that : NEGOTIABLE INSTRUMENTS ACT, 1881 section 138 - Dishonour of cheque for insufficiency of funds Plea of accused that he had given a blank cheque signed as security for a transaction and complainant filled up the contents and denied existence of any debt or loan - Conviction by Trial court Affirmed by Appellate Court - Revision against. Hence the Hon'ble High Court of Karnataka in the above decision clearly held that, if the Accused has taken defence that, a blank signed cheque has been issued as a security for transaction and the complainant filled up the contents and the accused denied the existence of debt or loan in such circumstances it is for the accused to prove his defence by producing cogent and convincible evidence, if the Accused has not proved the same in such circumstances, it cannot be held that, the cheque in question was given at the time of receiving 37 C.C.No.10567/2018 J the loan amount. In the present case also the Accused has failed to establish his defence to show that, the cheque in question was handed over at the time of receiving the alleged loan amount from the complainant, under such circumstances the cheque so issued cannot be considered as the one issued as a security and the defence taken by the Accused is untenable one. In another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. Vijayakumari wherein the Hon'ble Apex court held that " NEGOTIABLE INSTRUMENTS ACT, 1881 Section 138 and 139
- acquittal - If justified Accused not disputing issuance of cheque and his signature on it Plea that it was issued long back as security and that loan amount was repaid Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused Acquittal not proper. Hence in the present case also it is the main defence of the Accused that the complainant has collected blank signed cheque at the time of receiving loan amount by the accused and the complainant by misusing the said cheque 38 C.C.No.10567/2018 J has filed this complaint but the Accused has admitted the issuance of cheque and his signature on the said cheque but no documents or proof produced by the Accused to prove his defence in such circumstances by applying the principles of law laid down in the above decision the defence of the Accused cannot be acceptable one.
22. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and he has failed to explain as to how his cheque has come to the possession of the Complainant, this would also give rise to an adverse inference against him. This preposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa". In another decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the cheque entered into the hands of complainant".39
C.C.No.10567/2018 J Hence in the present case also the Accused has failed to explain how the cheque in question was entered into the hands of complainant. Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
23. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, he has lent an amount of Rs.1,90,000/ to the accused as hand loan and the accused in turn has issued cheque in question ie Ex.P.1 towards discharge of the said loan amount and thereafter the complainant has presented the cheque ie Ex.P1 through his banker and same was returned dishonoured with an endorsement of "Funds Insufficient" and thereafter he got issued legal notice to the accused and inspite of service of the said notice, the Accused did not repaid loan 40 C.C.No.10567/2018 J amount borrowed by him, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 cheque. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
24. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is 41 C.C.No.10567/2018 J just and proper to pass the following : ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.2,05,000/= (Rupees Two Lakhs and Five Thousand only) within one month from the date of order, in default accused shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.2,00,000/= (Rupees Two Lakhs only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
42C.C.No.10567/2018 J Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 30th day of November 2021).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri. Nagaraj Shet
2. List of documents exhibited on behalf of the Complainant: Ex.P.1 : Original Cheque Ex.P.1(a) : Signature of the accused Ex.P.2 : Bank Memo Ex.P.3 : Office copy of the Legal Notice Ex.P.4 : Postal Receipt Ex.P.5 : Postal acknowledgement Ex.P.5(a) : Signature of the accused (Marked through DW.1) 43 C.C.No.10567/2018 J
3. List of witness/s examined on behalf of the Accused: DW.1 : Sri. Raghavendra Shet
4. List of documents exhibited on behalf of the Accused: Ex.D.1 : Reply Notice Ex.D.2 : postal acknowledgement (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
44C.C.No.10567/2018 J 30.11.2021 case called, Both complainant and counsel for complainant absent, accused absent and counsel for the accused present and has filed written argument on behalf of the accused.
Judgment pronounced in the open court, (vide separate judgment).
ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.2,05,000/= (Rupees Two Lakhs and Five Thousand only) within one month from the date of order, in default accused shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.2,00,000/= (Rupees Two Lakhs only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of 45 C.C.No.10567/2018 J Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.