Bangalore District Court
Smt. Smitha vs Smt. P.Meenakshi on 12 November, 2020
IN THE COURT OF THE JUDGE COURT OF SMALL
CAUSES AND XXVI A.C.M.M, AT BENGALURU
Present: Abdul Khadar, B.A., LL.B.,
JUDGE, Court Of Small Causes,
Bengaluru.
Dated this the 12th day of November 2020
C.C. No.6616/2015
Complainant: Smt. Smitha
W/o. Shivaraj,
Aged about 34years,
Residing at No.3, Ashirvada Nilaya,
7th 'B' Cross, Gokul 1st stage,
2nd Phase, Yeshwanthpuram,
Bangalore-560022.
(By Sri.B.Srinivasa-Advocate)
-Vs-
Accused : Smt. P.Meenakshi,
W/o Prakash
Aged about 35years,
Residing at No.964, 1st Main,
2nd Cross, K.N.Extension,
Karumariyamma Temple,
Yeshwanthpura,
Bangalore-560058.
(By Sri.Sharath Kumar Shetty -
Advocate)
JUDGMENT
The complainant has filed the private complaint under Sec. 200 of Cr.P.C., against the accused for having committed an offence punishable under Sec.138 of Negotiable Instruments Act.
SCH-9 2 CC No.6616/2015
2. It is the case of the complainant that the accused is well known to the complainant past from few years. The accused had approached the complainant in the 1 st week of July 2014 for financial assistance of Rs.7,00,000/- as a hand loan. The complainant paid Rs.7,00,000/- in the last week of July 2014 by way of cash and assured that she would repay the same in the month of December 2014. The complainant approached the accused in the month of December 2014 and demanded the said amount, to discharge the liability the accused issued cheque bearing No.026579 for Rs.7,00,000/-, dated 02.01.2015 drawn on The Shamrao Vittal Co-Op. Bank Ltd., Yeshwanthapura Branch, Bangalore. As per instructions of accused, complainant presented the said cheque for encashment through her banker, but the said cheque was returned for the reasons "Insufficient Funds" vide endorsement dated 05.01.2015. Immediately the complainant informed the accused about dishonoring of cheque, but she has not come forward to pay the dishonoured cheque amount. Hence, the complainant got issued legal notice dated 21.01.2015 through RPAD calling upon the accused to pay the dishonoured cheque amount within 15 days from the date of receipt of said notice. Inspite of legal notice intimation, accused has not paid the cheque amount and has not issued any reply to the complainant. Accordingly, complainant has filed the present complaint to take action SCH-9 3 CC No.6616/2015 against the accused in accordance with law and to award suitable compensation in the interest of justice and equity.
3. Being satisfied with the complaint averments, this Court has taken cognizance and after recording sworn statement being satisfied with the prima-facie case, issued summons to the accused compelling her appearance. Accused appeared through her counsel before this Court and got enlarged on bail. Substance of accusation was read over to the accused. Accused pleaded not guilty for the offence punishable u/s.138 of NI Act. Hence, this Court called upon the complainant to prove her case.
4. In support of the case, the complainant herself examined as P.W.1 and got marked 11 documents as per Ex.P1 to P.11. After closure of evidence of Complainant, the accused was examined as contemplated U/s.313 Cr.P.C and her statement was recorded. The accused, totally denied the case of the complainant and she has defense evidence. Accused herself examined as DW1 and got marked five documents at Exs.D1 to D.5 on his behalf.
5. Heard arguments canvassed by the learned counsel for the complainant and the accused.
6. Now the points that arise for my consideration are:
1.Whether the complainant proves that the cheque bearing No.026579 for Rs.7,00,000/-, dated 02.01.2015 drawn on The Shamrao Vittal Co-Op. Bank Ltd., Yeshwanthapura Branch, Bangalore. issued SCH-9 4 CC No.6616/2015 by the accused towards discharge of her legal liability and when the said cheque was presented for encashment, it came to be dishonoured with an endorsement as "Funds Insufficient" after issuance of legal notice, she fails to repay dishonoured cheques amount within the stipulated period and thereby committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
7. My findings on the above points are as under:
Point No.1 : In the Affirmative Point No.2 : As per the final order below for the following:
REASONS Point No.1:-
8. It is pertinent to note that, whenever a private complainant is filed seeking prosecution of the accused for an offence punishable under Section 138 of Negotiable Instrument Act, if the issuance of cheque and the signature on the cheque is accepted and admitted by the accused, an initial presumption has to be raised by the Court in favour of the complainant, that the cheque in question was issued towards legally recoverable debt or liability. Of course, this presumption is rebuttable presumption. Such rebuttable evidence has to be placed before the Court by the accused. It is well known that, the accused can rebut the said legal presumption either by cross-examination of complainant or by leading evidence. The complainant herself examined as SCH-9 5 CC No.6616/2015 PW.1 filed affidavit by way of chief examination has reiterated the versions of complaint. I would not like to reproduce the same to avoid repetition of facts since the complainant has explained the details of complaint averments in chief examination. The complainant has produced 11 documents at Ex.P1 to P11.
9. So far as the document is concerned Ex.P1 is the cheque bearing No.026579 for Rs.7,00,000/-, dated 02.01.2015 drawn on The Shamrao Vittal Co-Op. Bank Ltd., Yeshwanthapura Branch, Bangalore. Ex.P1(a) is the signature of accused. Ex.P2 is the Bank Endorsement, wherein Ex.P1-Cheque was presented by the complainant through her banker, which was returned for the reason "Insufficient Funds". Ex.P3 is the office copy of the legal notice, wherein the complainant called upon the accused to pay the amount of Rs.2,00,000/- covered under the Ex.P1- cheque within 15 days from the date of receipt of notice. Ex.P4 is the Postal receipt, Ex.P5 is the Postal acknowledgment. Ex.P6 is the 7th year annual function invitation. Ex.P7 is the gold pledge receipt. Ex.P8 to 11 are the payment receipts. According to the learned counsel for the complainant, when the issuance of cheque and her signature are admitted, then the presumption as required under Section 139 of N.I. Act comes to the aid of the complainant. It is the turn of the accused to explain or rebut the said presumption by raising a probable defence.
SCH-9 6 CC No.6616/2015
10. In this regard, the court has to see whether the accused has been successful in rebutting the presumption through cross-examination of PW-1 and her evidence. In support of her defence, the accused cross examined PW-1 in length, nothing has been elicited from the mouth of PW-1 that no debt is existing under Ex.P1. PW-1 deposed that she knows the accused from 7-8 years and the accused mother house and her house are in the same street. Accused having own house and running Canteen and she also the vice president of Karumariyamma Temple. She further stated that the accused approached her for hand loan in the month of July 2014. She paid Rs.7,00,000/- by cash on 29.07.2014 and the said fact was not pleaded in her notice, complaint and chief affidavit. PW.1 further stated that after one month of availment of loan the accused has given cheque as security towards the repayment of loan. PW.1 admits that she has not taken on demand pro-note from the accused and accused not given consideration receipt for having received the loan from her. The accused has stated that she would repay the loan along with 2% bank interest and the same was not pleaded in her notice, complaint and chief affidavit.
11. PW.1 further stated that the accused has borrowed loan for the purpose of purchase house. Accused also receiving rent from 4-5 houses. Accused husband working at E-Sanje paper. PW.1 deposed that she was not doing money lending business and not paying income tax. She SCH-9 7 CC No.6616/2015 mobilized Rs.3,50,000/- by pledging gold ornaments and her father was paid Rs.4,00,000/- in turn she paid it to the accused. She denied that she is doing money lending business at the time of advancement of loan she used to receive blank cheques and filled it in the name of others and filing complaint. She knows mother of accused Nagarathnamma, Brother Ramesh babu and his wife Shobha. They have not borrowed loan from her. She asked for repayment of loan from the accused in the month of December 2014. Accused and her sister in law were running Canteen at Yeshwanthapura. She denied that during the year 2013-14 they borrowed Rs.1,50,000/- from her to run canteen and the said amount was paid by her in 4 installments and every time she used to receive blank signed cheque from them.
12. PW.1. denied that the mother of accused by name Nagarathnamma was approached her and asked loan for the purpose of canteen, at that time she received alleged cheque in question from Nagarathnamma. She further denied that the accused repaid Rs.1,50,000/- along with interest to her, but she has not returned the cheque and it was used to file this complaint against accused by filling Rs.7,00,000/-. She denied that she filed cheque case for Rs.9,00,000/- in the name of Ramamurthy before 12th ACMM and another cheque presented for Rs.7,00,000/- in the name of Arun kumar it was given by Shobha. The cheque given by Babu has been presented in SCH-9 8 CC No.6616/2015 the name of Raghu for Rs.7,00,000/- The cheque given by Nagarathna presented for Rs.5,00,000/- in the name of Bhagyavathi and they filed cases against them through her advocate. She denied that accused not borrowed Rs.7,00,000/- for the purpose of temple and not issued Ex.P1 for repayment of loan.
13. PW.1 further stated that she pledged gold for the purpose of purchase site on 2.06.2014 and received Rs.5,00,000/- from her father. She denied that she had no source of income to lend loan to the accused since she herself borrowed loan by pledging ornaments on interest and she has given loan to the accused without interest. On perusal of Ex.P7 it appears that complainant has pledged 199 grams gold at The Karnataka State Co-Op. Apex Bank Ltd., Bangalore, on 2.06.2014 for Rs.5,15,012/-. Ex.P8 to 11 are the payment receipts it appears that for the purpose of purchase of site at Mysore Jilla employees house building Co-operative Society the complainant has deposited Rs.49,000/- each in 4 installments at Panjab National Bank Ltd.,
14. Admittedly, in the cross examination of PW-1, the accused has not elicited from the mouth of PW.1 that there is no existence of legally recoverable debt payable by the accused to the complainant as she has not taken any amount from her. Hence the complainant proved her case from four corners of NI Act. The accused has not at all disputed the issuance of cheque or signature on it. Hence it SCH-9 9 CC No.6616/2015 is crystal clear that the cheque in question was issued by the accused in favour of complainant towards discharge of her liability. If at all, the cheque was misused by the complainant, what prevented the accused to take legal action against the complainant immediately after the receipt of demand notice. To escape from the liability, the accused intentionally denied the transaction.
15. The statutory presumption under Sec.139 of N.I. Act explains initial presumption infavour of the producer of an instrument. It says court shall presume that one instrument is handed over infavour of another person only for the purpose of recover of existed debt. Therefore, the statutory presumption explained under Sec.139 of N.I. Act always provides presumption infavour of the complainant. But, it does not mean that the statutory presumption cannot be rebutted. The said presumption can be rebutted at the strength of strong oral and documentary evidence. Let us see the attempt of the accused to rebut the evidence of complainant.
16. To defeat the case of the complainant, accused herself examined as DW-1, wherein she deposed that she had no movable or immovable property in her name. She residing with her mother-in-law. Her husband is working in press and earning Rs.15,000/-p.m. She has not the vise president of Karumariyamma temple. She knows the complainant through her mother and complainant is doing money lending business. She had money transaction with SCH-9 10 CC No.6616/2015 the complainant as she was running Canteen during the year 2013-14, at that time she was borrowed Rs.1,50,000/- from the complainant for 5% interest p.m. The complainant has paid Rs.1,50,000/- to her in 4 installments. At that time the complainant was received cheque from her mother and also 4 blank cheques from her and one cheque from her brother and another cheque from her sister-in-law. After repayment of Rs.1,50,000/- hand loan to the complainant by her the complainant has not returned the cheques. She has not borrowed Rs.7,00,000/- from the complainant and not given cheque towards repayment of loan. She admits in Ex.P1 belongs to her account. Ex.P1(a) is her signature. She denied the contents of Ex.P1 written by her handwriting. She admits Ex.P1 cheque was issued by her in blank. Accused further deposed that the complainant herself filled the remaining cheques in the name of Ramamurthy for Rs.9,00,000/-, Raghu for Rs.6,00,000/-, Bhagyavathi for Rs.5,00,000/-, Arun kumar for Rs.7,00,000/- and filed case against her mother, brother and sister-in-law before 12 th and 15th ACMM courts. To substantiate the same she produced Ex.D1 to D5 documents, they are C/c of complaint in CC No.22419/2014, CC No. 18913/2015, CC No.14913/2106 and CC No.24397/2014 and consideration receipt. Hence she prays for acquittal by dismissing the complaint in accordance with law.
17. DW-1 in her cross-examination she categorically admits that Ex.P1 cheque belongs to her account and SCH-9 11 CC No.6616/2015 Ex.P1(a) is her signature. She has no documents to show that the complaint is doing money lending business. She do not remember the cheque number which was given by her to the complainant and she do not remember the cheque number which was issued by her brother and mother. Except her, complainant has not filed case against her family members. She has not taken any legal action against the complaint for misuse of cheque. Herself and her mother had not given complaint to the police. She produced Ex.D1 to 4 documents to show that 4 persons were filed case against her family members. She admits that there is no relation with complainant, Ramamurthy, Raghu and Bhagyavathi. She admits that she own Karumariyamma Temple. She denied that towards repayment of Rs.7,00,000/- she had given cheque to the complainant.
18. The above said evidence of DW-1 clearly corroborates the case of the complainant that, there is legally recoverable debt on Ex.P1 by the accused to the complainant. Accused has not made out a probable defence so as to shift the burden on the complainant. The accused has failed to establish his defence that the cheque was misused by the complainant which was taken from her as security to the hand loan of Rs.1,50,000/-. Thus, accused has failed to rebut the presumption arisen in favour of complainant under Sections 118(a) and 139 of N.I. Act.
19. On perusal of the evidence it reveals that after service of notice, the accused has not taken any legal SCH-9 12 CC No.6616/2015 action against complainant. This defence of DW-1 clearly establishes the fact that the story created by the accused is false. When the accused has admitted Ex.P1 cheque belongs to her and admits her signature on Ex.P1, it is sufficient to hold that the complainant has proved the existence of debt under Ex.P1 by the accused. Thus, it clearly goes to show that since the accused had issued the cheque in question to the complainant for consideration. The notice Ex.P3 issued by the complainant was duly served on accused. Hence, it is quite clear that she got knowledge about the contents of notice, but the accused has not taken any legal action against complainant there itself the accused has failed to raise the probable defence. The documents on record shows that the accused borrowed loan from the complainant for her necessities and the accused issued the cheque at Ex.P1 to the complainant to discharge her liability.
20. The learned counsel for the complainant argued that the accused has admits her signature on cheque, but she disputed that the cheque was issued by her for repayment of Rs.1,50,000/- not for Rs.7,00,000/- and the same was issued for the purpose of chit transaction. She failed to prove the same. The accused filed application U/Sec. 45 of Indian Evidence Act and same was allowed this Court and referred the document Ex.D5 and vakalath to the hand writing experts and called their opinion. The hand writing expert returned the document stating that the SCH-9 13 CC No.6616/2015 signature on the vakalath and Ex.D5 are not matching. On perusal of report it appears that the disputed signatures marked Q1 to Q7 are not like with like comparable with the standard signatures (Viz specimen signature marked S1 to S15 and admitted signatures marked A1 to A21) it has not been possible to express any opinion regarding their authorship or other wise and hence the document at Ex.D5 produced by the accused evidencing the payment made by the complainant in installments has not proved. It is the contention of the accused that she issued blank cheque and the effect of issuing a blank cheque is to consider where cheque is signed living blank all other particulars and handed over to the payee authorizing to fill up the blanks as agreed upon. The contention of the accused is that the cheque was issued for security also comes under the purview of Sec.138 of N.I. Act. The accused admits the money transaction with the complainant they are known to each for 7-8 years the accused mother house and the house of complainant are in same street and accused is running Karumariyamma temple. The complainant by pledging gold ornaments borrowed loan on 02.06.2014 and also by receiving Rs.5,00,000/- from her father she paid Rs.7,00,000/- to the accused in the month of July 2014. Inspite of service of legal notice the accused not repaid the amount. Hence he prayed to convict the accused in accordance with law and also relied upon decisions reported in:
SCH-9 14 CC No.6616/2015
1. 2015 AIR SCW 3040 in the case of
T.Vasantakumar Vs. Vijayakumari wherein it is held
that, complainant long back in 1999 issued cheque as a security to a loan; the loan was repaid but complainant did not return security cheque- is unworthy of credit, apart from being unsupported by any evidence- Mere printed date on cheque.
2. ILR 2001 KAR 4127 S.R. Muralidar Vs Ashok G.Y, wherein it is held that, In a cheque bounce case complainant has challenged the order of Acquittal accepting the defence of the drawer of the cheque that the complaint who is his business associate and was allowed to deal with the accounts and bank transactions has mis-used a cheque signed by him and the same is mis utilized to fasten the false liability. High Court set aside the acquittal on the ground that there is no positive version of defence and the accused has not examined himself and from pleas taken up by picking out of context the statements made in reply of the accused, a hazy defence theory is sought to be built up.
3. AIR 2004 SC 2528 Indian Bank Association and others -vs Union of India and others, wherein it is held that, Dishonour of cheque summary trial -directions given to trial court to follow procedures for speedy and expeditious disposal of cases falling under Section 138 of N.I. Act.
4. AIR 2002 SC 3014 in the case of ICDS Ltd., vs Beemna Shabeer and Another, wherein it is held that SCH-9 15 CC No.6616/2015 S.138 - dishonour of cheque -key expressions "any cheque"
and other liability in S.138 -Clarifies the legislative intent- issue regarding co-extensive liability of guarantor and principal.
21. The learned counsel for the accused filed written argument and contended that during the year 2013-14 the accused along with her sister-in-law started a road side canteen at Yeshwanthapura at that time they took hand loan of Rs.1,50,000/- on interest from the complainant who is a money lender known to her mother Nagarathnamma towards security the accused handed over blank signed cheque to the complainant out of aforesaid cheque 2 cheques have been issued by the accused, one by her sister
-in-law and other one her brother Ramesh Babu, apart from the above 4 cheques the complainant also insisted for a cheque from her mother as a guaranteer. Every time the repayment was made the complainant acknowledged the receipt by signing a consolidated receipt as per Ex.D5. The complainant retained all the cheque in her custody with a promise to return the same. The complainant presented the cheque bearing No.026579 filling it with an imaginary amount of Rs.7,00,000/- and got issued a notice and filed this complaint. Like wise at instigation of the complainant, R. Ramamurthy, Raghu, P.R. Arun kumar, Smt. Bhagyavathi were presented remaining cheques for Rs.9,00,000/-, Rs.6,00,000/- Rs,7,00,000/- and Rs.5,00,000/- and filed SCH-9 16 CC No.6616/2015 criminal cases against her mother, brother and sister-in-law through one advocate.
22. Further argued that the complainant has to prove beyond all reasonable doubt the existence of legally recoverable debt. Except the dishonour cheque the complainant has not proved any document to prove the existence of any legally recoverable debt. During course of cross examination the complainant admit that she has not taken any security document. Further the complainant not disclose the date on which the accused approached her for the loan, on which date she paid the amount, when she demanded for repay in the demand notice nor in the complaint. In absence of this vital information the case of the complainant cannot be believed. Further the complainant has not produced document to show that she had possessed for sum of Rs.7,00,000/- as on the date of advancement. During the course of cross examination PW-1 stated that she had pledged her Jewelery for Rs.3,50,000/- and had taken Rs.4,00,000/- from her father and said sum was advanced to the accused. She produced a receipt for having pledged on ornament. But she admitted that the gold loan was obtained for the purpose of getting a site property and not for purpose of lending money to the accused. Subsequently PW-1 stated that her father gave Rs.5,00,000/- to show that she has not produced document nor examined her father. No prudent person would pledge her ornaments and borrow money in order to advance a SCH-9 17 CC No.6616/2015 loan for mere to asking without charing any interest and without getting any documents executed for a period of over 6 months.
23. Further argued that the accused had handed over the cheque in question signed fill blank to the complainant entirely under a different circumstances and it is the complainant who got the same filled up and presented for payment. It is seen that the signature on the cheque is in Kannada and the other writing in English from the above it is very clear that the cheque in question was not filled up by the accused. Hence the complainant has utterly failed to prove the existence of the legally enforceable debt against the accused. Hence the question of drawing presumption U/Sec.139 of N.I. Act, does not arise and and prays to acquit the accused in accordance with law and also relied upon decisions reported in:
1. V(2006) BC 295 (SC) in the case of C.Antony vs K.G.Raghavan nair, wherein it is held that, the 3rd circumstances relied upon by the trial court is in regard to the difference in the ink found in the body of the cheque as well as in the signature of the appellant. It is case of the respondent that the appellant had filled up the cheque in it entirety including its signature and had brought the cheque to the office of Vijay kumar to be handed over to the respondent but the learned Magistrate on a perusal of the cheque, found that the ink used in the body of the SCH-9 18 CC No.6616/2015 cheque was different from the ink used in the signature on the cheque. Therefore he draw an inference that the case put forth by the respondent was doubtful. Hence could not be accepted.
2. IV(2006) BC 295(2013) I BC 101(Bom) Bombay High Court- in the case of shobha vs Gajanan, wherein it is held that, Defence evidence probable - Reasonable doubt created about genuineness of prosecution case - Accused denied transaction, that he never issued cheque in the sum of Rs.1lac - Accused defended that proceedings on ground that he had given blank cheque duly signed to A2 - Accused entered in defence after he put up his defence in statement under Sec. 313 Cr.P.C. - Explanation of accused held reasonable -
No perversity or unreasonableness in impugned judgment and order - View of trial court held probable under circumstances - No interference required in appeal against acquittal.
3. II (2009) BC 224 Karnataka High Court in the case of Shiva Murthy vs Amruthraj. wherein it is held that, Dishonour of cheque - Legally enforceable debt - Failure to prove considering conduct of accused to find out as to whether or not he has been able to rebut statutory presumption available under Sec. 139 of Act, Courts ought to have considered as to whether complainant has proved existence of legally enforceable debt - Accused entitled to acquittal - Judgment of conviction and sentence set aside.
SCH-9 19 CC No.6616/2015
4. II(2016) BC 493 (P&H) Punjab and Hariyana High Court, in he case of Suresh vs Narender Gautam, wherein it is held that, Dishonour of cheque - Nothing on record to show applicant advanced amount in question to respondent - nothing on record to show legal liability to respondent towards applicant - Allegations of applicant appears to be vague - finding of acquittal recorded by Trial Court not perverse or contrary to material on record.
5. 1 (2014) BC 3 (SC) in the case of John K.Abraham vs Simon C.Abrahm and another, whereinit is held that, Dishonour of cheque- Serious lacuna and defects in evidence of complainant - respondent - Strikes at the root of complaint under Sec. 138 of Act - Presumption under Sec. 118 and 139 of N.I. Act cannot be drawn - High Court was in error in reversing judgment of acquittal of trial Court - Vital defects in case of respondent- complainant as noted by Chief Judicial Magistrate - Respondent was not even aware of date when substantial amount of Rs.1.50lac was advanced by him to appellant, as to who wrote cheque, when and where transaction took place for which cheque issued by appellant - Conclusion of High Court perverse and unsustainable - Impugned order set aside - Conviction and sentence imposed on appellant also set aside.
6. II(2014) BC 349 (Bom) in the case of Vijaya Kundanlal Sharma vs Satyawan Bhikaji Jadhav & Anr.
where in it is held that, Dishonour of cheque - Legally SCH-9 20 CC No.6616/2015
enforceable debt - Appeal against acquittal - Complainant admitted that beside disputed cheque there was no other evidence to show that she had advanced an amount of Rs.5lacs in cash is a loan - Disputed cheque was a balnk cheque - amount was not mentioned - It cannot be believed that complainant had given an amount of Rs.5,80,000/- which she had received by way of chit funds
- Complainant had failed to establish date of extending the loan - Learned Magistrate rightly found that he complainant has failed to prove that disputed cheques were issued towards legally enforceable debt - No reasons for interference.
7. II (2008) BC44(SC) in the case of Krishna Janardhan Bhat vs Dhattathreya G.Hegde. wherein it is held that, Loan -advancement of - Amount exceeding Rs.20,000/- - Any advance taken by way of any loan of more than Rs.20,000/- to be made by way of account payee cheque only - Income Tax Act, 1961- Section 269SS, 271D.
On bare reading of above rulings relied by the counsel for the accused due respect it is not applicable to the facts and circumstances of the present case on hand and the same were delivered in different context.
24. On careful appreciation and evaluation of the evidence of PW,1 coupled with contents of Ex,P1 to P11 makes it clear that , the accused and complainant were known to each other very well. Herein this case the SCH-9 21 CC No.6616/2015 accused does not dispute issuance of cheque and her signature found on the cheque in question. But it is her contention that, the complainant misused the cheque which was given by her during the year 2013-14 when she was borrowed Rs,1,50,000/- from the complainant and hence, she is not liable to pay the said amount. But this contention of accused is not substantiated by any material on record. Further, If really the accused repaid the loan amount of Rs.1,50,000/- she would not have kept mum without insisting complaint for returning the said cheque soon after receipt of legal notice. As such the defence set up by the accused is not believable and natural one. Moreover when the accused admits her signature found on Ex.P1 and handling over the same to complainant, the presumption under Sec139 of N.I. Act would arise in favour of the complainant.
25. It is not in dispute that the cheque was drawn by the accused from her Bank account. It is not in dispute that the cheque returned unpaid when presented by the complainant for collection as Funds Insufficient in the bank of the accused. It is not in dispute that the complainant issued legal notice through registered post. The contention of the accused is that, the accused misused the blank cheque given to the complainant towards security of Rs.1,50,000/- . When accused admits her liability to the complainant and she had given the SCH-9 22 CC No.6616/2015 cheque to the complainant whether it is blank cheque or written cheque he is liable under Sec.138 of N.I. Act. Therefore, the complainant has proved that the accused has issued Ex.P1 -cheque to discharge of his liability. Then the burden shifts upon the accused to prove the non-existence of legally recoverable debt under the disputed cheque. The accused has not rebutted the presumption envisaged under Sec.118 and 139 of N.I. Act. Therefore, it cannot be said that, cheque was issued not for the discharge of legally enforceable debt.
26. It is pertinent to note that ordinarily in the cheque bounce cases, what the court has to consider is, whether ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Sec.139 of the Act. Once, the cheque relates to the account of the accused and he or she accepts and admits the signature on the said cheque, then initial presumption has contemplated under Sec.139 of the N.I. Act has to be raised by the court in favour of the complainant. The presumption referred in Sec.139 of N.I. Act is a mandatory presumption and not a general presumption.
SCH-9 23 CC No.6616/2015
27. On perusal of the evidence, it reveals that after service of notice or summons from the Court, the accused has not taken any legal action against complainant. During the cross examination, the accused has denied the source of income to lend loan to the accused, but the same has been suitably answered by the complainant by producing Ex.P8 to P11. Hence, the defence of accused clearly establishes the fact that the story created by the accused is false. When the accused has admitted Ex.P1 cheque belongs to her account and her signature, it is sufficient to hold that the complainant has proved the existence of debt under Ex.P1 by the accused. Thus it clearly goes to show that since the accused had issued the cheque in question to the complainant for consideration. The notice Ex.P3 issued by the complainant was duly served on accused, after that the accused has not taken any legal action against complainant, there, itself the accused has failed to raise the probable defence. The document at Ex.P1 show that the complainant had lent loan of Rs.7,00,000/- to the accused and the accused issued the cheque to the complainant to discharge her liability.
28. In view of the above principles evolved by the Hon'ble Supreme Court, the burden heavily casts upon the SCH-9 24 CC No.6616/2015 accused to prove the non-existence of legally recoverable debt or liability under Ex.P1 cheque. If the accused has succeeded in rebutting the presumption then definitely he will be entitled for an order of acquittal. It is pertinent to note that, the complainant has issued the demand notice as per Ex.P3 by calling upon the accused to repay the cheque amount within 15 days from the date of receipt of legal notice. Therefore, it is proved by the complainant that, she has sent the demand notice to the correct address of the accused.
29. It is well settled law that, when the signature in the cheque is admitted to be that of accused the presumption under Sec.118 of Negotiable Instruments Act is that the cheque was made or drawn for consideration on the date, which the cheque bears. In this case, the accused has admitted that she has issued cheque to the existing liability. Therefore, Sec.118 of Negotiable Instruments Act operates against the accused unless and until he is able to rebut that presumption. No such efforts are made to rebut the presumption.
30. Furthermore, the accused has not replied the legal notice which was issued to her. As per Ex.P3 appears from the records that the notice was issued through registered SCH-9 25 CC No.6616/2015 post and which was duly served on the accused. It shows that her action in keeping mum without replying the notice goes to show that she purposefully kept quiet since she issued Ex.P1 cheque towards repayment of loan amount. Herein this case the accused admits that the notice duly served on her . Such being the fact there is a deemed service of legal notice on the accused, who neither replied the same nor paid the cheque amount, Therefore the complainant has placed sufficient and ample materials on record to believe that the Ex.P1 cheque was issued by the accused towards repayment of loan amount of Rs.5,00,000/- which he borrowed to his personal commitment. There are no such circumstances wherein the case of complainant can be doubted.
31. In this regard I would like to rely upon the rulings of Hon'ble Apex Court reported in 2018 (8) SCC 165 in the case of Krishna Rao V/s Shankar wherein it is held that, Financial loss Monterey loss- Negotiable Instrument Act 1981-139- presumption under 139 does not probable summaries- accused liberty may adduce evidence to rebut the presumption U/s139- but mere denial regarding existence of debt was not serve any purpose in the event accused is able SCH-9 26 CC No.6616/2015 to raise probable defence which creates doubt with regard to existence of debt or liability presumption may fall.
2. AIR 2010 SC 1898 in the case of Rangappa V/s Mohan wherein it is held that, The presumption mandated by Sec.139 of the Act does indeed include the existence of legally enforceable debt or liability. This is of course in the nature of 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 there can be no doubt that there is an initial presumption which favours the complainant. Sec.139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Sec138 of the Act specifies a strong criminal remedy in relation to the dishonour of the cheque , the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Sec138 can be better described as regulatory offence since the bouncing of a cheque is largely in nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the SCH-9 27 CC No.6616/2015 test of proportionality should guide th construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden, Keeping this view it is settled position that when an accused has to rebut the presumption under Sec139 the standard of proof for doing so is that of preponderance of probabilities. Therefore, if the accused able to raise a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the presumption can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable t hat in some cases the accused may not need to adduce evidence of his /her own.
3. SLP(Crl)No.3858/2019 in the case of Pavana Dilip Rao Dike V/s Vishal Narendrabhai Parmar. Wherein it is, held that, we are of the opinion that, the High Court rightly reversed the order of Acquittal passed by the trial court, wherein the presumption U/sec 138 has not been taken in to account. The trial court committed an error in placing heavy burden on the complainant to prove the debt.
SCH-9 28 CC No.6616/2015
4. Criminal Appeal No.867/2016 (arising out of SLP(CRL) No. 5410 /2014) in the case of Sampelly Satyanarana Rao V/s. Indian Renewable Energy Development, wherein it is held that in "Rangappa V/s Mohan, this court held that once issuance of a cheque and signature thereon are admitted presumption of a legally enforceable debt in favour of the holder of the cheque arises, it is for the accused to rebut the said presumption, though accused need not adduce the own evidence and can rely upon the material submitted by the complainant. However mere statement of the accused may not be sufficient to rebut the said presumption.
32. On perusal of entire evidence of PW-1, it is quiet clear that the accused has admitted issuance of cheque and her signature. The defence theory of the accused in cross examination of PW.1 is impossible to believe. She being a normal prudent man did not take any legal action against the complainant for the act of misuse of cheque till today. Hence, the defence taken by the accused nowhere helps accused to rebut the presumption available under Sec.139 of N.I. Act. It is proved fact that, complainant and accused are known to each other and there were transaction in between accused and SCH-9 29 CC No.6616/2015 complainant. Therefore, the presumption available under section 139 of N.I. Act, drawn easily in favour of the complainant, because the accused failed to rebut the evidence of complainant with cogent evidence.
33. The oral and documentary evidence available on record are clearly and categorically established all the ingredients of Section 138 of N.1.Act and also proved the fact that the accused had issued the cheque in question in favour of the complainant for consideration towards the discharge of liability and the said cheque was dishonoured and then the accused failed to pay the amount of cheque within 15 days from the date of service of the demand notice. Hence, the dishonor of the cheque in question is clearly attracts the penal provision of Section 138 of the N.I. Act and the complainant has proved the guilt leveled against the accused for the offence P/u/s Section 138 of the N.I. Act. The accused has utterly failed to rebut the presumption under Sec.138 of N.I. Act infavour of the complainant. Hence, the complainant is entitled for benefit of statutory presumption as contemplated under Sec.139 of the Act. I did not find any informalities or contradictions elicited to render his evidence incredible. Therefore, the testimony of PW-1 inspires confidence to believe and to act upon the evidence of PW.1 and the documentary evidence at Ex.P1 to P11 are consistence, corroborative and supporting to each other and in accordance with the case of SCH-9 30 CC No.6616/2015 the complainant and which leads me to conclude that the complainant has proved beyond reasonable doubt against the accused for the alleged offence punishable under Sec.138 of N.I. Act. Accordingly, I answer Point No.1 in the Affirmative.
Point No.2:
34. In view of my above discussions and findings on Points No.1, I proceed to pass the following:
ORDER Acting under Section 255[2] of Cr.P.C, the accused is hereby convicted for the offence Punishable U/s. 138 of the N.I. Act.
The accused is sentenced to pay total fine amount of Rs.7,50,000/-. In default of payment of fine amount, the accused shall under go Simple Imprisonment for six months.
Out of the amount so realized, the accused shall pay a sum of Rs.7,45,000/- to the Complainant by way of compensation U/s.357 Cr.P.C. The balance amount of Rs.5,000/- shall be remitted to the State.
The bail bond of the accused hereby stand canceled and cash security of Rs.6000/- deposited by the accused is hereby forfeited to the state. Office is directed to furnish free copy of this judgment to the accused.
(Dictated to the stenographer on computer, corrected and then pronounced by me in the open court on this the 12 th day of November 2020.) (Abdul Khadar) Judge, Court of Small Causes & ACMM, Bengaluru.
SCH-9 1 CC No.6616/2015
ANNEXURE
List of Witnesses examined on behalf of omplainant:
PW1 Smitha List of Documents marked on behalf of complainant:
Ex.P1 Cheque Ex.P1(a) Signature of accused Ex.P2 Bank endorsements Ex.P3 Office copy of Legal Notice Ex.P4 Postal receipt Ex.P5 Postal acknowledgment Ex.P6 Invitation Ex.P7 pledged advance jewel loan receipt Ex.P8 Payment receipt
List of Witnesses examined on behalf of accused:
D.W.1 Meenakshi List of documents marked on behalf of accused:
Ex.D1 C/C of complaint in CC No.22419/2014 Ex.D2 C/C of complaint in CC No.18913/2015 Ex.D3 C/C of complaint in CC No.14513/2016 Ex.D4 C/C of complaint in CC No.24397/2014 Ex.D5 Payment receipt (Abdul Khadar) Judge , Court of Small Causes, & ACMM, Bengaluru.