Bangalore District Court
Sri. Sathish V vs Sri. Sadhik on 10 August, 2018
IN THE COURT OF XXI ADDL.CHIEF METROPOLITON
MAGISTRATE, BENGALURU CITY
Present: Sri. V. NAGARAJA, B.A., LL.B.,
XXI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Dated this the 10th day of August, 2018
C.C. No.15300/2017
COMPLAINANT: Sri. SATHISH V
S/o. Late. Veerappa,
Aged about 40 years,
R/at. No.61/1, R.V. Road,
2nd Cross, Chikkamavalli,
Bengaluru - 560 036.
(Reptd. By: KN., Advocate)
V/s.
ACCUSED: Sri. SADHIK
Father's name not known
to complainant,
Aged about 38 years,
SMW Sadhik Tinker Modify Works,
Shop No.20/1, 5th Cross,
Lalbagh Fort Road,
Doddamavalli,
Bengaluru - 560 004
(Reptd. By RSC., Advocate)
:JUDGMENT:
Complainant has filed this complaint under Section 200 of Cr.P.C. r/w Section 138 of N.I. Act, seeking for penalizing the accused for the offence punishable under Section 138 of N.I. Act and also for awarding compensation to him.
2 C.C.No.15300/2017
2. Case of the complainant in a nutshell is that:
He and accused are well acquainted with each other as they are close friends. He has been running garage, whereas accused also running SMW Sadhik Tinker Modify Works at Shop No.20/5, 5th Cross, Lalbagh Fort Road, Doddamavalli, Bengaluru. So, in that acquaintance, in the first week of July 2016, accused had approached him for hand loan of Rs.1,00,000/- to meet his domestic and business necessities. So, on considering his request, in the third week of July 2016, he advanced Rs.1,00,000/- to accused, whereas accused promised to repay the said amount within six months.
3. It is further averred that after expiry of six months, complainant demanded the accused to repay the said hand loan amount, whereas accused went on postponing the same on one or other pretext. However, ultimately in order to discharge his loan liability, he has issued him cheque bearing No.523016 dated 14.03.2017 for Rs.1,00,000/- drawn on State Bank of India, Wilson Garden Branch, Bengaluru and assured to honour the said cheque. So, believing the words of accused, he presented the above said cheque through his banker i.e., 3 C.C.No.15300/2017 Karnataka Bank Ltd., Minerva Circle Branch, Bengaluru. But said cheque was dishonoured for the reason "Funds Insufficient" in the account of accused. So, the bank authorities issued endorsement dated 15.03.2017. Hence, same fact has been intimated to accused, whereas accused requested him to re-present in the last week of March 2017. Accordingly, he once again re-presented the said cheque, but the once again the said cheque was dishonoured for the same reason of "Funds Insufficient" in the account of accused. So, the bank authorities issued endorsement dated 28.03.2017. So, he got issued legal notice through RPAD and speed post dated 27.04.2017 by demanding above cheque amount, whereas said notice has been returned with endorsement "Door Locked, Intimation Delivered". So, it has to be construed as deemed service, whereas accused has not paid the cheque amount. Hence, accused has committed offence punishable U/s.138 of NI Act. Hence, he is constrained to file this complaint seeking for penalizing the accused for the offence punishable under Section 138 of N.I. Act., and also seeking for awarding of compensation to him.
4 C.C.No.15300/2017
4. In pursuance of summons issued by this court, accused made appearance through his counsel and obtained bail and now he is on bail.
5. As these proceedings are summary in nature, substance of accusation read over and explained to accused in language known to him whereas, he pleaded not guilty and claimed for trial.
6. In order to prove the case of the complainant, he has been examined as PW-1 and got documents marked Ex.P-1 to Ex.P-7. After completion of evidence of the complainant, statement of accused as specified U/s.313 of Cr.P.C., has been recorded and he has not chosen to adduce any evidence.
7. I have heard arguments of both learned counsels, whereas learned counsel for accused also filed his written arguments.
8. Perused the records.
9. After perusal of records, the points arise for my consideration are:
1) Whether complainant proves beyond all reasonable doubt that accused in order to discharge his loan liability, he has issued him cheque bearing No.523016 dated 5 C.C.No.15300/2017 14.03.2017 for Rs.1,00,000/- drawn on State Bank of India, Wilson Garden Branch, Bengaluru?
2) Whether complainant further proves that he has complied with mandatory requirements as specified under Section 138 of N.I. Act?
3) What Order?
10. My findings on the above points are:
Point No.1 : In the Affirmative
Point No.2 : In the Affirmative
Point No.3 : As per final order,
for the following:
REASONS
11. Point No.1: As I have already stated, in order to prove the case of the complainant, he has been examined as PW-1 and he filed his examination-in-chief by way of affidavit by reiterating entire complaint averments as stated above. In support of his oral testimony, he relied upon Ex.P-1 to Ex.P-7.
12. On the other hand, accused has not chosen to adduce any evidence.
13. Before appreciation of evidence and contentions of the parties regarding their respective contentions, I am of the opinion, it is worth to note presumptions envisaged in N.I. Act as well as ratio laid 6 C.C.No.15300/2017 down by the Hon'ble Apex Court in Three Judges Bench Judgment reported in (2010) 11 SCC 441 (Rangappa V/s. Sri Mohan) wherein it is held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent /complainant."
It is further held:
Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
14. So in the light of above presumptions and ratio decidendi laid down by Hon'ble Apex Court, if the present facts and situations are analyzed, it is obvious that according to complainant, accused has issued Ex.P-1, cheque for discharging his loan liability. On the other hand, on considering the stand taken by accused in the cross-examination of PW-1 and also his answers given in 7 C.C.No.15300/2017 his statement recorded u/S.313 of Cr.P.C., it is obvious that though he disputes his liability as claimed by complainant, but he is not disputing the facts that Ex.P-1 cheque is belonged to his account and his signature thereon. So, as I have already stated in view of ratio laid down by Hon'ble Apex court in the Judgments stated supra, that as soon as accused admits his signature on cheque, the mandatory presumption u/S 139 of N.I. Act comes to the aid of complainant and he can rest upon said presumption.
15. Whereas, learned counsel for defence argued that in order to raise presumption U/s.138 of NI Act, the condition precedent is that complainant must prove the existence of legally recoverable debt or liability, if he is able to prove the same, then only presumption can be raised otherwise not.
16. Having regard to the arguments of learned counsel for accused, it is important to note as I have already pointed out Hon'ble Three-Judges Bench Judgment of Hon'ble Supreme Court in Rangappa's case stated supra, it is clearly held:
8 C.C.No.15300/2017
"The presumption mandated by Section 139 includes a presumption that there exists a legally recoverable debt or liability".
17. So when above ratio clearly states that presumption includes existence of legally enforceable debt or liability then further proof of that fact is not required that too in summary proceedings. Because Hon'ble Apex Court in the judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets) has clearly observed that:
Presumption literally means "taking as true without examination or proof"
18. Moreover, it is well settled law that the prime object of presumptions are to minimize or to avoid the leading of unnecessary evidence. So, the mandatory presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is to say the cheque was not issued for consideration and in discharge of any debt or liability, in other words, onus shifts on the accused to rebut the said mandatory presumption raised in favour of complainant as observed by Hon'ble Apex Court in the Judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets). 9 C.C.No.15300/2017
Now the crucial question arises as to whether accused is able to rebut the said presumption or not?
19. It is significant to note on considering the stand taken by the accused in the cross-examination of PW-1, he contended that there was no loan transaction between him and complainant as contended by complainant. In fact about two years back when accused requested for loan from him, the complainant had assured him to get loan from some other persons, on that pretext, he had obtained his signed blank cheque by stating that same has to be given for security purpose in order to avail loan from some other persons. Now, in order to grab money from him, the complainant misused the said cheque by filling up the contents of the same for his convenience and filed this false complaint. Hence, same is liable to be dismissed and he may be acquitted.
20. In support of above defence, learned counsel for accused in his oral as well as written arguments he argued that the complainant has no financial capacity to advance Rs.1,00,000/- to accused. Moreover, the complainant has not produced any documents to show his source of income to advance alleged amount of Rs.1,00,000/- to accused. 10 C.C.No.15300/2017 In fact, the present cheque has been obtained by complainant on the pretext of getting loan from some other persons, whereas the present cheque is an a old non CTS cheque. So, it substantiates the contention of the accused that complainant obtained said cheque for security purpose very long back and now he has misused the same by filling up the other contents of the said cheque. Hence, said cheque is not valid. He further argued that the alleged mandatory notice not at all served on accused. So, there is no cause of action to file present complaint. Hence, on this ground alone complaint is liable to be dismissed. On these main grounds and other grounds specified in his written arguments, he prayed for dismissal of the complaint and acquittal of the accused.
21. Having regard to the defence of the accused and arguments of his counsel, at this juncture, it is worth to note ratio laid down by Hon'ble Apex Court in Larger Bench judgment in the very Rangappa V/s. Sri. Mohan's case, it is clearly observed that:
"A mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the 11 C.C.No.15300/2017 defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court"
22. At this juncture, it is worth to note ratio decidendi laid down by the Constitutional Bench of Hon'ble Apex Court in the judgment reported in AIR 1964 SC 575 (Dhanvantrai Balwantrai Desai V/s. State of Maharashtra) which has been followed in the subsequent judgment reported in (2001)6 SCC 16 (Hiten P.Dalal V/s. Brathindranath Banerjee) wherein it is held that:
"That the distinction between the two kinds of presumption lay not only in the mandate to the court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused.
"On the other hand in the case of a mandatory presumption"
"The burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be 12 C.C.No.15300/2017 discharged merely by reason of the fact that the explanation is offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible"
23. At this juncture, it also worth to note in another judgment of Hon'ble Apex Court reported in (2010)8 SCC 383 (Meghmala and others V/s. Narasimha Reddy and others) wherein it is held that:
"It is not like any other criminal case where the accused is presumed to be innocent unless the guilt is proved. The presumption of innocence is a human right, however, subject to the statutory exceptions, the said principle forms the basis of criminal jurisprudence. For this purpose, the nature of offence, its seriousness and gravity thereof has to be taken into consideration. Statutes like the Negotiable Instruments Act, 1881; the Prevention of Corruption Act, 1998; and the Terrorist and Disruptive Activities (Prevention) Act, 1987, provide for presumption of guilt if the circumstances 13 C.C.No.15300/2017 provided in those statutes are found to be fulfilled and shift the burden of proof of innocence on the accused. Thus, the legislature has adopted a deviating course from ordinary criminal law shifting the burden on the accused to prove that he was not guilt"
24. Keeping in view of above ratio, if the present facts and situations are analyzed, though the accused took up above said contention, but he has not entered into witness box to substantiate his contention. Even otherwise, there is no cogent and convincing evidence on record to prove his contention to the satisfaction of the court.
25. At this juncture, it is also worth to note the conduct of the accused that he has not lodged any police complaint or initiated any court proceedings against complainant regarding alleged misuse of cheque by complainant. So, under such circumstances, I am of the opinion, if at all accused had not issued present cheque to complainant for discharging his loan liability, then definitely he would have lodged police complaint regarding alleged misuse of the cheque by complainant, because no prudent man will keep quite, when his cheque is misused by somebody else. It is further significant to note, if at all 14 C.C.No.15300/2017 the accused had not issued the cheque to the complainant as contended by him, then he could have given instructions to his banker for stop payment regarding the present cheque, but he did not do so. Under such circumstances, the defence raised by the accused is not probable and acceptable.
26. Coming to arguments of learned counsel for accused that complainant has no financial capacity to advance Rs.1,00,000/- to accused etc.
27. Having regard to the arguments of learned counsel for accused, at this juncture, it is worth to note in the cross-examination of PW-1, learned counsel for accused made suggestion to PW-1 that:
"¸ÀĪÀiÁgÀÄ 5-6 ªÀµÀðUÀ¼À »A¢¤AzÀ DgÉÆæAiÀÄÄ £À¤ßAzÀ 25 ¸Á«gÀjAzÀ ¸ÀĪÀiÁgÀÄ 50 ¸Á«gÀzÀªÀgÉUÀÆ ºÀt ¥ÀqÉzÀÄ CzÀ£ÀÄß »AwgÀÄV¸ÀÄvÁÛgÉ JAzÀÄ ¸ÀÆa¹zÀgÉ ¸Àj"
28. So, from the above suggestion, it is clear that from 5-6 years, the accused used to borrow Rs.25,000/- or Rs.50,000/- from the complainant and used to repay the said amounts. So, it indicates that the complainant was having financial capacity to advance Rs.50,000/-. It is 15 C.C.No.15300/2017 further significant to note admittedly the complainant has been running garage thereby earning Rs.500/- to Rs.1,000/- per day. So, under such circumstances, one can easily draw inference that he has financial capacity to advance Rs.1,00,000/-. Even otherwise, if the contention of the learned counsel for accused is viewed from another angle, I am of the opinion when accused's version itself is not probable and acceptable, then mere financial capacity of complainant will not rebut the mandatory presumption. Hence, I do not find any force in the arguments of learned counsel for accused.
29. Coming to another contention that the contents of the cheque has been filled by complainant, so it is not valid cheque etc.
30. Having regard to the arguments of learned counsel for accused at this juncture, it is worth to note ratio laid down by Hon'ble Apex Court in the judgment reported in (2002)7 SCC 150 (P.K. Manmadhan Kartha V/s. Sanjeev Raj and another) wherein it is held that:
"Difference of handwriting and ink on the cheque did not rebut the statutory presumption U/s.139 and 118 of NI Act"16 C.C.No.15300/2017
31. At this juncture it is also worth to note that view taken by Hon'ble High Court of Karnataka reported in ILR 2001 KAR 4127 (S.R. Muralidhar V/s. Ashok G.Y.) wherein it is held that:
Section 20 of NI Act - Inchoate stamped instruments "No law provides that in case of any negotiable instrument entire body has to be written by maker or drawer only. What is material is signature of drawer or maker and not the body writing hence question of body writing has no significance"
"It is not objectionable or illegal in law to receive a inchoate negotiate instrument duly singed 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 binds the maker of the Negotiable Instrument"
32. So, in the light of above principle if the present facts and situations are analyzed, as I have already pointed out accused is not disputing issuance of cheque and his signature thereon. Under such circumstances, filling up body of the cheque by complainant or somebody 17 C.C.No.15300/2017 else will not invalidate the cheque and that itself will not rebut the mandatory presumption raised in favour of complainant as observed by Hon'ble Apex Court in the judgment stated supra. Hence, I don't find any force in the arguments of learned counsel for accused.
33. Yet another contention of the learned counsel for accused that Ex.P-1 cheque is old non CTS cheque, so it indicates that it was issued long back for the purpose of security, cannot be accepted. Because there is no bar to issue old or non CTS cheque. Moreover, accused has not adduced any evidence as to when he issued the said cheque. So, in absence of such evidence, I do not find any force in the arguments of learned counsel for accused. So, the contention of the accused is not probable and acceptable, because as I have already pointed that Hon'ble Apex Court in the Constitutional Bench and Larger Bench Judgments stated supra, it is clearly held that presumption envisaged U/s.138 of NI Act is not general presumption but it is mandatory presumption, so the said presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible". So, I come to clear conclusion that accused has utterly failed to rebut 18 C.C.No.15300/2017 the mandatory presumption raised in favour of complainant. Hence, I hold this point in Affirmative.
34. Point No.2: As I have already discussed in point No.1 that accused has issued Ex.P-1 cheque for discharging of his legally recoverable debt. Whereas, on perusal of Ex.P-2 and Ex.P-3 which are bank endorsements given by bank authority clearly reveal that complainant had presented the said cheque within validity period, but said cheque was dishonoured due to "Funds Insufficient". On perusal of Ex.P-4 which is legal notice issued to accused clearly reveal that the complainant got issued said demand notice to accused through RPAD within specified time of 30 days from the date of receiving of endorsement from bank. On perusal of Ex.P-6 and Ex.P-7 which are returned postal covers reveals that the said notices were returned with endorsement "Door Locked, Intimation Delivered" and "No such person in the address".
35. It is important to note on perusal of address of the accused shown in notice as well as cause title of the complaint, they are properly addressed and sent through RPAD to the correct address of the accused. So in view of 19 C.C.No.15300/2017 Sec 27 of General Clauses Act 1897 as well as ratio laid down by Hon'ble Apex Court in the Judgment reported in (1999)7 SCC 510 (K. Bhaskaran Vs. Sankaran Vaidhyan Balan), (2017)5 SCC 373 (N. Paramesharan Unni V/s. G. Kannan) and another judgment (2004)8 SCC 774 (V. Raja Kumari V/s. P. Subbarama Naidu and another) wherein it is held that:
"Giving of notice is distinguished from receiving of the notice"
"On the part of the payee he has to make a demand by "giving a notice" in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such "giving", the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days "of the receipt" of the said notice. It is, therefore, clear that "giving notice" in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer at the correct address"20 C.C.No.15300/2017
"A payee can send the notice for doing his part for giving the notice. Once it is dispatches his part is over and the next depends on what the sendee does"
It is also held that:
"It is clear from Section 27 of General Clauses Act, 1897 and Section 114 of the Evidence Act, 1872, that once notice is sent by registered post by correctly addressing to the drawer of the cheque, the service of notice is deemed to have been effected. When a notice is sent by registered post and is returned with postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed. Then requirements under proviso (b) of Section 138 stand complied with if notice is sent in the prescribed manner. However, the drawer is at liberty to rebut his presumption"
36. So, in the light of above ratio, if the present facts and situations are analyzed, as I have already pointed out that complainant has given notice in writing and same is sent through RPAD to proper address of the accused. So, it is construed as deemed service. Moreover, accused has not placed any contrary evidence to prove that above said 21 C.C.No.15300/2017 notice was sent to wrong address and he is not liable for non-service of legal notice.
37. So on considering the oral coupled with the documentary evidence of the complainant, they clearly proved that complainant has complied with mandatory requirements as specified U/s.138(a) and (b) of N.I. Act. Whereas, accused has not paid the cheque amount within specified time, inspite of service of demand notice. Hence, accused has committed offence punishable U/s.138 of NI Act. Hence, I hold point No.2 in Affirmative.
38. Point No.3: For the foregoing reasons discussed on points No.1 and 2, I proceed to pass the following:-
ORDER Acting under Section 255(2) r/w 264 of Cr.P.C., the accused is hereby convicted for the offence punishable u/S.138 of Negotiable Instruments Act.
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
On considering the facts and circumstances of the case, accused is hereby sentenced to pay fine of Rs.1,05,000/- (One Lakh and Five Thousand only). In default he shall undergo simple imprisonment for a period of 2 (Two) months.
In view of Section 357 of Cr.P.C., complainant is entitled for compensation of 22 C.C.No.15300/2017 Rs.1,00,000/- (One Lakh only) out of above said fine amount.
After collecting the above fine amount, office is directed to pay Rs.1,00,000/- (One Lakh only) to complainant as compensation and defray remaining fine amount of Rs.5,000/-
(Five Thousand only) to state, after appeal period is over.
However, accused shall execute personal bond of Rs.1,05,000/- in view of Sec.437(A) of Cr.P.C.
The office is hereby directed to supply the copy of this Judgment to the accused on free of cost.
(Directly dictated to Stenographer on computer, computerized by him, corrected and then pronounced by me in the open court on this the 10th day of August, 2018) (V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW-1 : Satish V LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P-1 : Cheque
Ex.P-2 & 3 : Bank Endorsements
Ex.P-4 : Copy of Legal Notice
Ex.P-5 : Two Postal Receipts
Ex.P-6 & 7 : Returned Postal Covers
LIST OF WITNESSES EXAMINED FOR THE DEFENCE:
- Nil -
LIST OF DOCUMENTS MARKED FOR THE DEFENCE:
- Nil -
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.