Bangalore District Court
M/S Go Activ International vs M/S Maruti Construction And Others on 14 November, 2024
C.C.NO.22909/2023
0
KABC030406802023
Presented on : 08-09-2023
Registered on : 08-09-2023
Decided on : 14-11-2024
Duration : 1 years, 2 months, 6 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M., Bangalore City.
DATED; THIS THE 14th DAY OF NOVEMBER-2024
C.C.NO.22909/2023
Complainant: M/s. Go Activ International,
Partnership firm, #16/1,
R.V.Road Cross, Near South End
Metro Station, Basavanagudi,
Bengaluru-560004.
R/by its Partner, Sri.Pavan.T.L.
Mobile No.9916880713.
Email: [email protected]
(By Sri.C.S.Surya Kanth.,Adv.,)
V/s
Accused: 1. M/s.Maruthi construction
Partnership firm, No.9/1-176,
Pipe Kurubarahalli, Mahalakshmipuram,
Bengaluru-560086.
R/by its Partners namely
Sri Sourav Holakallu & Sri.Gangaraju
Sanjeevappa Hollakallu.
Mobile No.932263942.
2. Sri.Sourav Holakallu,
C.C.NO.22909/2023
1
Partner of M/s. Maruthi Construction,
No.9/1-176, Pipe Kurubarahalli,
Mahalakshmipuram, Bengaluru-560086.
3. Sri.Gangaraju Sanjeevappa Holakallu,
Partner of M/s. Maruthi Construction,
No.9/1-176, Pipe Kurubarahalli,
Mahalakshmipuram, Bengaluru-560086.
(By Sri.Girish.D.S.,Adv,.)
:JUDGMENT:
This case arises out of the 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.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant is a partnership firm consisting two partners, engaged in manufacturing, trading and supply of outdoor fitness equipment and sports goods and a dealer registered under the Goods and Services Tax Act. Further stated that the accused No.1 is a partnership firm represented by the accused No.2 and 3. The accused placed an order for supply of outdoor fitness equipment such as Double Surf board, Double walking machine, Elliptical Cross Trainers, Leg press etc., to be install at BBMP Park, Basaveshwara Nagar, Bengaluru. Accordingly, the complainant submitted supply work order form/quotation No.071 dated: 07.12.2022 for total C.C.NO.22909/2023 2 value of Rs.5,00,000/- including GST amount. It was also mentioned that the equipment will be installed under the supervision of the accused and that they shall also provide sand, cement, Jelly, labours and supervision charges which will cost extra. Further stated that in pursuant to the same an amount of Rs.1,00,000/- was paid as advance vide cheque No.391303 dated:
07.12.2022. As per the quotation the complainant supplied and installed the required equipment vide tax invoice No.198 dated: 15.03.2023 along with E-way bill for transportation. The complainant supplied the equipment such as cycle, double surfboard, double walking Machine, elliptical cross trainer, leg press, shoulder press, ARM and pedal cycle, rower, fitness rider, air walker outdoor Gym Accessories for a total value of Rs.5,00,000/- including GST amount of Rs.76,270/-. The said equipment have been duly delivered, installed and duly acknowledged at Basaveshwara Nagar, Bengaluru.
3. It is further stated that after deliver of the goods the complainant has provided discount of Rs.20,000/- vide credit Note No.3 dated: 16.03.2023. After providing discount and deducting the advance amount the accused were liable to pay an amount of Rs.3,80,000/-. The accused had issued the cheque No.000063 dated:
16.03.2023 for Rs.3,80,000/- drawn on IDFC Bank, Basaveshwara Nagar branch, Bengaluru. After issuance C.C.NO.22909/2023 3 of the cheque the accused requested the complainant not to present the cheque for 2-3 weeks as they are arranging funds for the same. As per the request of the accused the complainant did not present the cheque for encashment. But however again after 03 weeks the accused again requested not to present the cheque as funds are yet to be arranged. The same went on for months. Thereafter finally the complainant had presented the said cheque on 13.06.2023 for encashment through its banker i.,e ICICI Bank, Basavanagudi Branch, Jayanagar 3rd block branch, Bangalore. But the said cheque was dishonored with an endorsement dated: 14.06.2023 as "Funds Insufficient"
in the account of the accused No.1. Thereafter, the complainant had sent a request letter on 23.06.2023 through RPAD for payment of the dishonored cheque, but the complainant did not get any response to the same. Thereafter, on 06.07.2023 the complainant got issued a legal notice to the accused through its counsel calling upon them to make payment of the said cheque within 15 days from the date of receipt of the said notice. The said notices were duly served to the accused on 08.07.2023. After service of the legal notice the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the C.C.NO.22909/2023 4 present complaint came to be filed before this court on 17.08.2023.
4. After the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 04.09.2023 to register the case in Register No.III and it was registered as a criminal case.
5. Thereafter, summonses were issued to the accused and the accused No.2 and 3 have appeared before the court through their counsel and secured bail. They have furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. They have pleaded not guilty and make a defence.
6. The complainant in support of its case, have examined its Partner as PW.1 and got marked 18 documents at Ex.P.1 to 18 and closed its side. PW.1 was fully cross examined by the counsel for the accused.
7. After closer of the evidence of the complainant, the statement of the accused under section 313 of Cr.P.C., was recorded. They have denied the incriminating evidence appearing against them. The accused initially did choose to enter the defence evidence. But later on, the learned counsel for the C.C.NO.22909/2023 5 accused submitted no defence evidence. Hence, the defence evidence taken as nil.
8. I have heard the arguments on both the sides and also perused the material placed on record.
9. The learned counsel for the complainant has relied upon the judgment in Crl.P.No.9909/2017.
10. The learned counsel for the accused has relied upon the citations reported in 2010 SC (Kar) 342, 2023 SC (Kar) 175, 2009 SC (SC) 564, 2009 SC (Del) 268 and 2008 SC (Raj) 1272.
11. 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/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-
Ex.P.1, towards the discharge of the said legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.1 was dishonored for the reasons "Funds Insufficient" in the account of the accused No.1 and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of the legal notice.?
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
C.C.NO.22909/2023 6
5.What order?
12. 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:
13. 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, I have taken these two points together for common discussion. The case of the complainant is that he was acquainted with the accused. Further the complainant is a partnership firm, engaged in manufacturing, trading and supply of outdoor fitness equipment and sports goods and a dealer registered under the Goods and Services Tax Act. The accused No.1 is a partnership firm represented by the accused No.2 and 3. The accused placed an order for supply of the outdoor fitness equipment such as Double Surf board, Double walking machine, Elliptical Cross Trainers, Leg press etc to be install at BBMP Park at Basaveshwara Nagar, Bengaluru. Accordingly, the complainant submitted supply work order form/quotation for total value of Rs.5,00,000/- including GST amount. It C.C.NO.22909/2023 7 was also mentioned that the equipment will be installed under the supervision of the accused and that they shall provide sand, cement, Jelly, labours and supervision charges which will cost extra. Further in pursuant to the same an amount of Rs.1,00,000/- was paid as advance through cheque. As per the quotation the complainant supplied and installed the required equipment along with the complainant also raised E-way bill for transportation. The complainant supplied the equipment such as cycle, double surfboard, double walking Machine, elliptical cross trainer, leg press, shoulder press, ARM and pedal cycle, rower, fitness rider, air walker outdoor Gym Accessories for a total value of Rs.5,00,000/- including GST amount of Rs.76,270/-. The said equipment have been duly delivered, installed and duly acknowledge at BBMP park at Basaveshwara Nagar, Bengaluru.
14. Further after deliver of the goods the complainant has provided discount of Rs.20,000/-. After providing discount and deducting the advance amount the accused were liable to pay an amount of Rs.3,80,000/-. The accused in order to repayment of the outstanding due had issued the cheque in question in favour of the complainant. After issuance of the cheque the accused requested the complainant not to present the cheque for 2-3 weeks as they are arranging funds for the same. As per the request of the accused the complainant did not present the cheque for encashment.
C.C.NO.22909/2023 8 But however again after 3 weeks the accused requested the complainant not to present the cheque as funds are yet to be arranged. The same went on for months. Thereafter the complainant finally had presented the said cheque for encashment through its banker. But the said cheque was dishonored with an endorsements "Funds Insufficient". Thereafter, the complainant had sent a request letter through RPAD for payment of the dishonored cheque, but the complainant did not get any response to the same. Thereafter, the complainant got issued a legal notice to the accused through its counsel calling upon them to make payment of the said cheque within 15 days from the date of receipt of the said notice. The said notices were duly served to the accused. Inspite of service of the legal notice the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
15. In support of the case, the complainant have examined its one of the partner as P.W.1 and 18 documents were marked at Ex.P.1 to 18. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the cheque issued by the accused in favour of the complainant dated: 16.03.2023 for Rs.3,80,000/-. Ex.P.1(a) is the signature of the accused No.2. Ex.P.2 is the bank memo C.C.NO.22909/2023 9 dated: 14.06.2023 informing the dishonor of the cheque as "Funds Insufficient" in the account of the accused No.1. Ex.P.3 is the office copy of legal notice dated:
06.07.2023. Ex.P.4 to 6 are the postal acknowledgments. Ex.P.7 is the GST registration certificate. Ex.P.8 is the Authorization. Ex.P.9 is the order form. Ex.P.10 is the receipt. Ex.P.11 is the tax invoice.
Ex.P.12 is the E-way bill. Ex.P.13 is the credit note. Ex.P.14 is the ledger account. Ex.P.15 is the letter issued by the complainant to the accused. Ex.P.16 is the postal acknowledgment. Ex.P.17 is the certificate under section 65(b) of Indian Evidence Act. Ex.P.18 is the complaint.
16. The main defence of the accused is that at the time of placing an order they had issued the cheque to the complainant for the purpose of security. Further contended that the complainant have not supplied the gym equipment. Further contended that the complainant instead of returning the cheque to the accused they have misused the same and filed this false complaint against them. Further contended that they have never admitted regarding repayment of amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused have specifically denied having agree to repay the amount of Rs.3,80,000/-. But the accused in their defence have not disputed Ex.P.1 being their cheque drawn on the account of the C.C.NO.22909/2023 10 accused No.1 and they also does not dispute the signature of the accused No.2.
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/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, it reveals that the accused placed an order for supply of the outdoor fitness equipment to be installed at BBMP Park at Basaveshwara Nagar, Bangalore. Accordingly the complainant submitted work order form on 07.12.2022 for total value of Rs.5,00,000/- including GST amount. It is further argued that it is also mentioned that equipment will be installed under the supervision of the accused and that the accused shall also provide sand, cement, jelly, labours and supervision charges which will cost etc. Further argued that in pursuant to the same an amount of Rs.1,00,000/- was paid as advance through cheque and the complainant is duly acknowledged the same. It is further argued that as per the quotation the complainant supplied and installed the required equipment and also raised tax invoice and e-way bill for total value of Rs.5,00,000/- including GST. The aforesaid equipment have been duly delivered, installed and also duly acknowledged for having C.C.NO.22909/2023 11 received the goods at BBMP park. It is further argued that after delivery of the goods the complainant has provided discount of Rs.20,000/-. After providing discount and deducting the advance amount the accused were liable to pay an amount of Rs.3,80,000/-.
18. It is further argued that for the outstanding amount the accused had issued the cheque in question in favour of the complainant. It is further argued that at the request of the accused, the complainant presented the said cheque for encashment through its banker. But the said cheque was dishonored as "Funds Insufficient"
in the account of the accused No.1. Thereafter the complainant intimated the fact of dishonor of the cheque to the accused through letter. But the accused failed to pay the cheque amount. Thereafter, the complainant had issued a legal notice to the accused through its counsel calling upon them to pay the cheque amount within 15 days from the date of receipts of the legal notice. Inspite of service of the legal notice the accused neither reply to the notice nor paid the cheque amount. Hence, the complainant have filed this case. The accused is still due the balance amounts covered under the cheque. He further argued that the accused have not denied Ex.P.1 being their cheque drawn on the account of the accused No.1 and signature of the accused No.2. When the signature of the accused is not disputed, the presumption under C.C.NO.22909/2023 12 section 139 N.I.Act is to be drawn in favour of the complainant. The accused have failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act. He further argued that the accused have failed to produce any believable evidence that they had issued the cheque for the purpose of security of at the time of placing an order and also why they have 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/liability. In the present case, the accused have not disputed Ex.P.1 being their cheque drawn on the account of the accused No.1. The said presumption is available to the complainant.
19. Further argued that the accused have failed to prove the very fact that the cheque-Ex.P.1 was given to the complainant for the purpose of security. 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 they had given the cheque to the complainant for the purpose of security. As such, the C.C.NO.22909/2023 13 very defence of the accused is not believable. He further argued that the defence of the accused is that they had issued the cheque to the complainant for the purpose of security and further taken up the defence that the complainant have not supplied gym equipment to the accused. Further taken up the defence that the complainant company misused the said security cheque to harass the accused and to make a wrongful gain. In order to prove their defence the accused have not produced any materials in support of the presumption under section 138 of N.I.Act. Therefore, the accused have committed an offence. Even though the issuance of cheque for security/guarantee, an offence under section 138 of N.I.Act is attracted. Further argued that the amount mentioned in the cheque is the amount payable by the accused of the invoice due by the accused. Hence, he prays to convict the accused.
20. The learned counsel for the accused has argued that there was no legally enforceable debt/liability to the complainant from the accused for which the cheque-Ex.P.1 was issued. Further argued that the accused had issued the cheque to the complainant for the purpose of security at the time of placing an order and it was misused by the complainant. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly C.C.NO.22909/2023 14 required to prove the existence of a legally enforceable debt/liability, for which the cheque came to be issued. It is further argued that the complainant is only in order to give trouble to the accused and with an intention to make illegal money from the accused filed false case. This is not permissible under the law. Further argued that the cheque was collected from the accused, as security measure. It is further argued that the accused placed an order for supply of the outdoor fitness equipment. As per the order placed by the accused the complainant not supplied and installed the required equipment. The complainant instead of returning the cheque to the accused they have misused the cheque and created all the documents and filed this false case against the accused. Further argued that the complainant instead of supply and installation of gym equipment they have misused the security cheque issued by the accused. When there is no supply and installation of gym equipment, question of issuance of the cheque does not arise at all. Further argued that there is no due from the accused to the complainant. Therefore, from the evidence placed on record, very due amount of the accused is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt. The cheque was issued as security purpose and it was C.C.NO.22909/2023 15 misused by the complainant. Hence, the accused is not liable to pay any amount as there is no legally recoverable debt.
21. It is further argued that the complainant presented the cheque to the bank for encashment. The said cheque was dishonored. Thereafter, the complainant had sent a request letter dated:
23.06.2023 through RPAD for payment of the dishonor cheque. Thereafter, on 06.07.2023 the complainant got issued a legal notice to the accused for demanding to make payment of cheque. The said notice was duly served to the accused on 08.07.2023. It is further argued that the complainant got issued a letter on 23.06.2023 to the accused and in this letter the complainant demanded the accused for repayment of the cheque amount within 03 days. Hence, this letter is considered as a demand notice. Thereafter, the complainant sent a demand notice to the accused.
Thereafter, the complainant has presented this case before this court on 17.08.2023 after lapse of stipulated period. But, the complainant at the time of presenting the case before this court, he has not filed any application for condonation of delay. On this ground also, case of the complainant is not maintainable. Hence, he prays to dismiss the case and acquit the accused.
22. In the case on hand the complainant and the C.C.NO.22909/2023 16 accused having some transaction has not been seriously disputed by the accused. Further the accused have not seriously disputed they had issued the cheque in favour of the complainant. Further it is not disputed that the cheque in question issued by the accused in the account of the accused No.1. It is not disputed that the complainant is a partnership firm and the accused No.1 is a partnership firm and the accused No.2 and 3 are the partners and representative of the accused No.1. The accused in order to repayment of said amount had issued the cheque in favour of the complainant. Whereas, the accused have contended that at the time of placing an order they had given the chaque to the complainant for the purpose of security. Further contended that as per the order placed by the accused the complainant not supplied gym equipment. Hence, the accused are not liable to pay the cheque amount. The accused have specifically denied having debt/liability had issued the cheque on 16.03.2023 towards the discharge of outstanding due amount. They contends that the cheque given by them to the complainant for the purpose of security as was misused by the complainant and a false complaint was filed against the accused.
23. 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/liability, for which the C.C.NO.22909/2023 17 cheque drawn on the account of the accused No.1 was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its one of the partner as PW.1 and 18 documents were marked at Ex.P.1 to 18. In chief examination, he has repeated the averments made by the complainant in the complaint. In the present case, the accused have not disputed Ex.P.1 being their cheque drawn on the account of the accused No.1. The said presumption is available to the complainant.
24. Under section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused have disputed the existence of legally enforceable debt/liability, for which cheque was issued. PW.1 during his cross-examination has specifically denied the suggestions made to him that the cheque was issued to the complainant for the purpose of security at the time of placing order. Further he has denied that the complainant not supplied gym equipment to the accused. He further denied all the suggestions made by the counsel for the accused.
25. In this case the counsel for the accused has C.C.NO.22909/2023 18 argued that consequences of sending two legal notices. On perusal of the documents it reveals that the complainant sent one letter to the accused demanding payment within 3 days and thereafter the complainant sent a legal notice through its counsel under section 138 of N.I.Act, demanding the accused for repayment of the dishonor of cheque amount within 15 days from the date of the service of the legal notice. The first notice is invalid notice. Because the 3 days notice may not comply with section 138(b)'s 15 days notice requirement. This notice may not be considered valid for prosecution under section 138 of the Act. The second notice if the demand notice complies with a section 138(b), it can be considered valid. The second notice may supersede the first notice, making it irrelevant. The court may consider the second notice (demand notice) as the valid notice for the purpose of section 138, provided it meets the statutory requirements. Further the letter sent by the complainant is not a statutory notice under section 138 of N.I.Act. Further the said letter may be considered an informal demand and not valid for triggering criminal liability under section 138 of N.I.Act. The complainant sent a demand notice after dishonor, within 30 days complies with section 138(b) requirements. Hence, the complainant has filed this complaint before this court within statutory period. So, such defence could not be C.C.NO.22909/2023 19 acceptable. Therefore, this court is of the opinion that the defence of the accused does not hold water .
26. 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 have to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused that they had given the cheque to the complainant for the purpose of security. Further the complainant not supplied gym equipment as per the order placed by them. Except, the said defence, the accused have not produced any materials to prove such defence. If the accused had given the cheque to the complainant for the purpose of security, 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 alleged cheque. On which date the accused came to knew about the alleged illegal act of the complainant, the accused did not whisper about on what date they came to know the alleged cheque illegally misused by the complainant. Admittedly the C.C.NO.22909/2023 20 accused are Businessmen and having knowledge of the financial transaction, why they have given the cheque to the complainant for the purpose of security without anticipating the consequence is not explained by them. So also, the accused have not stated anything as to what steps they took to receive back the cheque. Moreover, immediately after the alleged cheque misused by the complainant the accused have not lodge any complaint before concerned police station or court. No steps have been taken to receive back the cheque, after they came to know about the same.
27. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in the case of Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt/liability 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 C.C.NO.22909/2023 21 this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.1 the court has to draw the initial presumption that he 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's case.
28. Further the accused have taken defence that the cheque was given to the complainant for the purpose of security at the time of placing an order. Further taken the defence that the complainant not supplied gym equipment. Hence, an 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/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 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 C.C.NO.22909/2023 22 documents, then the accused have to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
29. 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 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.
30. In the present case also, as the accused No.2 never disputed his signature and did not deny issuing cheque from the account of the accused No.1. The accused did not dispute cheque return memo also. The C.C.NO.22909/2023 23 cheque was returned for the reasons "funds insufficient" in the account of the accused No.1. 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 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.
31. 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 their defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
32. It is not in dispute that bounced cheque belongs to the bank account of the accused No.1. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused No.2. 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 reasons stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to C.C.NO.22909/2023 24 the extent of probabilities, in this regard the accused have not produced any documents. It was also contended by the accused that they had given the cheque to the complainant for the purpose of security. The said cheque was misused by the complainant. In order to prove their defence, the accused have failed to produce any believable evidence before this court.
33. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing false case is not possible. The accused admittedly having knowledge of business. It is implies, they are conversant with financial transaction. If the complainant misused the said cheque and had not return the same, inspite of collecting cheque leaves from the accused, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because they did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.1. Further the accused could have issued a notice to their banker to stop payment or legal notice to the complainant or they could have given complaint to the police station immediately. No such steps were taken by the accused. They simply makes a bald allegation of misuse of security cheque against the C.C.NO.22909/2023 25 complainant. It appears, just to escape from their legal liability, the accused have taken such contentions without any valid basis.
34. Moreover, the complainant have got issued the legal notice to the accused by registered through its counsel calling upon them to make repayment of the said cheque amount within 15 days from the date of service of the notice. Before a person is held to be guilty of the offence punishable under 138 of N.I.Act, the complainant's have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.1 being their cheque drawn on account of the accused No.1. In view of the above discussions it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and also cheque return memo-Ex.P.2 it is established that the cheque is in the account of the accused No.1 and same was dishonored for the reasons "funds insufficient". A legal notice being issued as per Ex.P.3 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused have not disputed regarding notice sent by the complainant on their addresses. But the accused have not given any reply to the said notice. Thereby, the accused could have asserted their defence at an earliest available opportunity. When the accused have not seriously disputed the addresses, the C.C.NO.22909/2023 26 notice sent to the correct addresses is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
35. It is not the contention of the accused that thereafter they have repaid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients of section 138 N.I.Act, have been complied with. As the accused have not repaid the cheque amount within stipulated period. Hence, 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 the accused did not whisper anything about the defence while their 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 C.C.NO.22909/2023 27 what are the defences he want to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
36. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the 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 have not been able to make out a probable case on their behalf.
37. As per the version of the accused is that they have nowhere denied transaction. The accused themselves have admitted that the accused No.1 is the holder of alleged cheque and the accused No.2 has put his signature on the cheque. It is sufficient hold that the accused have issued the cheque and even after they have not repaid the cheque amount the getting of C.C.NO.22909/2023 28 receipt of notice. However, in any manner as the complainant 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 them to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant that the accused have issued the cheque-Ex.P.1 in order to pay the legally recoverable amount. Therefore, the accused have failed to probables the defence taken by them that Ex.P.1 was given to the complainant for the purpose of security. Therefore, the accused have failed to rebut the 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 financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
38. PW.1 in his evidence has specifically deposed that the accused No.1 is a partnership firm represented by the accused No.2 and 3. The accused placed an order for supply of the outdoor fitness equipment to be installed at BBMP park at Basaveshwara Nagar, Bangalore. It is further deposed that the complainant submitted quotation for total value of Rs.5,00,000/- including GST amount. Further deposed that as per the C.C.NO.22909/2023 29 quotation the complainant supplied and installed the required equipment and also raised e-way bill. Further deposed that the said equipment have been duly delivered, installed and also acknowledged for having received the goods at BBMP park. It is further deposed that after delivery of the goods the complainant provided discount amount of Rs.20,000/- and after providing discount and deducting the advance amount the accused were liable to pay an amount of Rs.3,80,000/-. Further deposed that for the outstanding amount the accused had issued the cheque-Ex.P.1 in favour of the complainant. The complainant presented the said cheque for encashment through its banker. But the said cheque was dishonored as "Funds Insufficient"
in the account of the accused No.1. The complainant intimated the fact of dishonor of the cheque to the accused and demanded them to pay the same. The accused are not paid the amounts covered under the cheque. 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 transaction. This factor will not affect case of the complainant to disbelieve the financial transaction between the complainant and the accused. When the accused have failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction C.C.NO.22909/2023 30 no consequences to disbelieve the case of the complainant. The accused have failed to probables their defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
39. POINT NO.3 AND 4: In order to avoid repetition of facts, these two points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant's have to prove all the requirements of section 138 of N.I.Act. Ex.P.1 being their cheque drawn on the account of the accused No.1 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.3 being sent by the complainant not seriously disputed. The accused have not taken up any contention that thereafter they had paid the cheque amount within stipulated time of 15 days, after service 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. When the accused immediately after receive the notice, they have not paid the cheque amount. The accused have not taken up the any contention that after they had paid the cheque amount within stipulated time of 15 days, after receipt of the notice. As such, in the present case on perusal of C.C.NO.22909/2023 31 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 the court on 17.08.2023 within the period of one month from the date cause action. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque 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.
40. 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 have failed to prove their 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:
C.C.NO.22909/2023 32 :ORDER:
Acting under section 255(2) of Cr.P.C., the accused are convicted for an offence punishable under section 138 of N.I.Act.
The bail bonds executed by the accused is hereby stands canceled.
The accused are sentence to pay fine of Rs.4,00,000/- (Rupees four lakhs only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.3,90,000/- (Rupees three lakhs ninety 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.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused No.2 and 3 shall undergo simple imprisonment of six months each.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 14th day of November 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date: 2024.11.16 17:53:28 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.22909/2023 33 ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.Pavan.T.L. List of documents marked on behalf of the complainant:
Ex.P.1 : Cheque. Ex.P.1(a) : Signature of the accused No.2. Ex.P.2 : Bank endorsement. Ex.P.3 : Office copy of legal notice. Ex.P.4 to 6 : Postal acknowledgments. Ex.P.7 : GST registration certificate. Ex.P.8 : Authorization. Ex.P.9 : Order form Ex.P.10 : Receipt. Ex.P.11 : Tax invoice. Ex.P.12 : E-way bill. Ex.P.13 : Credit note. Ex.P.14 : Ledger account. Ex.P.15 : Letter given to the accused. Ex.P.16 : Postal acknowledgment. Ex.P.17 : Certificate U/s.65(b) of I.E.Act. Ex.P.18 : Complaint.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
-Nil-
Digitally
signed by
SOUBHAGYA
SOUBHAGYA B BHUSHER
B BHUSHER Date:
2024.11.16
17:53:34
+0530
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
C.C.NO.22909/2023
34
14.11.2024 (Judgment pronounced in the Open
Court Vide Separate Sheet)
:ORDER:
Acting under section 255(2) of
Cr.P.C., the accused are convicted for an offence punishable under section 138 of N.I.Act.
The bail bonds executed by the accused is hereby stands canceled.
The accused are sentence to pay fine of Rs.4,00,000/- (Rupees four lakhs only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.3,90,000/- (Rupees three lakhs ninety 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.10,000/-
(Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused No.2 and 3 shall undergo simple imprisonment of six months each.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.