Bangalore District Court
Sri.P.Nagaraj vs Sri.A.V.Hemaraju on 12 May, 2023
KABC030303292018
Presented on : 28-04-2018
Registered on : 28-04-2018
Decided on : 12-05-2023
Duration : 5 years, 0 months, 14 days
IN THE COURT OF THE XVIII ADDL.CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
PRESENT: MANJUNATHA M.S. B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
DATED : THIS THE 12 th DAY OF MAY 2023
C.C. No.10413-2018
COMPLAINANT: Sri.P.Nagaraj,
S/o Pandurangan,
Aged about 37 yearsm
R/at No. 129, J.C.Nagara,
Yeshwanthapura Hobli,
Near Railway track, Akyappa
Garden, Bangalore-560022
(By Sri.R.R- Advocate)
// Versus //
ACCUSED: Sri.A.V.Hemaraju,
S/o A.V.Varadharaju
Aged about 50 years,
R/at No.1191, 2nd C Main
Road, BSK 3rd stage, 7th Block,
2nd Phase, Hosakerehalli,
Near Vittala Eye Hospital
Bangalore -560 085.
And also at
2 Judgment C.C.10413/2018
A.V.Hemaraju,
S/o A.V.Varadharaju
R/at Yedavani Village,
Yedavani Post, Amurthuru
Hobli, Kunigal Taluk,
Tumkuru District.
Karnataka-572111
(By Sri.T.M.)- Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Name of the complaint : P.Nagaraj
S/o Pandurangan
Date of commencement
of evidence : 06.07.2018
Date of closing evidence : 22.11.2022
Opinion of the Judge : Accused found not guilty.
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act (in short referred as "N.I. Act") alleging that the accused has committed the offence punishable under section 138 of NI Act.
3 Judgment C.C.10413/2018
02. The sum and substance of the complaint is as follows; The complainant and accused are known to each other since 10 years. Based on the friendship, in the month of June 2017 the accused has approached the complainant for hand loan of Rs.1,00,00,000/- ( Rupees One Crore only) for purpose of meet his urgent domestic and business problems. The complainant has arranged the said amount and paid to the accused by way of cash in the month of June 2017 and after received the said amount the accused has promised the complainant that the said amount will be paid within three months. But he has not kept up his promise. After several request and demand made by the complainant, the accused has issued four post dated cheques bearing No. 008604 dated 20.11.2017 for Rs.10,00,000/-, No. 008605 dated 27.11.2017 for Rs.10,00,000/-, No. 008606 for Rs.30,00,000/- dated 12.12.2017 and No.008607 for Rs.50,00,000/- dated 20.12.2017 drawn on NKGSB Bank, Hosakerehalli, Bengaluru towards repayment of the loan amount and also assured that cheques will be honoured on their presentation. As per the assurance of the accused, the complainant has present the said cheques for encashment through his banker i.e., State Bank of India, Vidyaranayapura Branch, Bengaluru on 16-02-2018, but the 4 Judgment C.C.10413/2018 said cheques were came to be dishonoured for "Funds Insufficient " on 17.2.2018. Therefore, the complainant has got issued demand notice on 05.03.2018 to the accused by demanding the payment of cheque amount. But the said notice was returned with an endorsement "un claimed" on 7.3.2018 in first address and notice was duly served on accused in his 2nd address on 19.3.2018. Despite of service legal notice, the accused has not paid the cheque amount and issued untenable reply notice dated 20.3.2018. Thereby he has committed offence punishable under section 138 of NI Act.
03. After filing of complaint, this court has taken cognizance of the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of the complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, the accused was enlarged on bail and his plea was recorded as per section 251 of Cr.P.C. The accused has not pleaded guilty and submitted that he has defense to make.
04. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in 5 Judgment C.C.10413/2018 (2014) 5 SCC 590, the sworn statement of the complainant treated as complainant evidence and complainant has examined himself as PW1 by filing affidavit of chief-examination and got marked Ex.P.1 to 14. The accused has filed application under section 145(2) of NI Act for recall of PW1 for the purpose of cross-examination. The said application came to be allowed and defence counsel has fully cross- examined PW1. The complainant also examined one witness as PW2 by name Mahesh. The statement of accused as contemplated under section 313 of code of criminal procedure was recorded. The accused has denied all the incriminating material appears against him in the complainant's evidence. To prove his defence the accused himself examined has DW1 and Ex.D.1 to 19 documents were marked on his behalf and he also examined three witness as DW2 to
4. The complainant counsel has fully cross examined DW1 to 4.
05. Heard the arguments of learned counsels for complainant and accused. The complainant has relied on decisions reported in (2001) 8 SCC 458 K N Been Vs. Muniyappa and another, AIR 2010 SC 1898 Rangappa Vs. Mohan, AIR 2018 SC 3601 T P Murugan Vs. Bojan Posa Nandhi, AIR 2018 SC 3173 Kishan Rao Vs Shankargouda, (2015) 8 SCC 378 T Vasanth Kumar Vs 6 Judgment C.C.10413/2018 Vijayakumari. The accused counsel has filed written arguments along with decisions reported in ILR 2007 KAR 2709 M.Senguttuvan Vs Mahadevaswamy, (2009) 2 SCC 513 Kumar exports Vs Sharma Carpets, Crl.L.P No.540-542 /2014 Inderjit Narula Vs Rohit Dua & anr , 2015 0 SCC (Del) 2643 Ashok Baugh Vs Kamal Baugh & anr, Crl.P.No.1387/2011 R.Parimala Bai Vs Bhaskar Narasimhaiah, Cr.A.No. 21/2010 Murali Vs Daya Sekar , Cr.A.No. 636/2019, AIR 2019 Supreme (KAR) 1768 Yeshwanth Kumar Vs Shanth Kumar.N, 2020 Supreme (Kar) 309 Vishal Vs Prakash Kadappa Hegannawar and (2013) 2 crimes (HC) 80(1) Kulwinder Singh Vs Kafeel Ahmed. I have perused the materials available on record.
06. The points that arise for my consideration are as follows;
1. Whether the complainant has proves that the accused has issued four cheques bearing No. 008604 dated 20.11.2017 for Rs.10,00,000/-, No. 008605 dated 27.11.2017 for Rs.10,00,000/-, No. 008606 for Rs.30,00,000/- dated 12.12.2017 and No. 008607 for Rs.50,00,000/- dated 20.12.2017 towards discharge of his debt, which were returned unpaid on presentation for the reason " Funds Insufficient" and despite of notice he has not paid the said cheque 7 Judgment C.C.10413/2018 amount and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
07. My answer to the above points is as follows;
Point No.1: In the Negative Point No.2: As per final order for the following REASONS
08. POINT No.1: The Complainant has filed this complaint alleging that the accused has committed offence punishable under section 138 of N.I. Act. The complainant has pleads and asserts that the accused has borrowed hand loan of Rs.1,00,00,000/-( Rupees One Crore only) from him and towards discharge of said debt he has issued four cheques in question bearing No. 008604 dated 20.11.2017 for Rs.10,00,000/-, No. 008605 dated 27.11.2017 for Rs.10,00,000/-, No. 008606 for Rs.30,00,000/- dated 12.12.2017 and No. 008607 for Rs.50,00,000/- dated 20.12.2017. He has presented the said cheques for encashment through his banker. The said cheques were returned unpaid with an endorsement "Funds sufficient" on 17.02.2018. Thereafter, he got issued demand notice 8 Judgment C.C.10413/2018 on 05.03.2018 to the accused by demanding the payment of said four cheques amount. The notice sent to the accused on his first address was returned unserved with endorsement unclaimed intimation delivered. The notice sent to the accused on his second address was duly served. Despite of notice the accused has not paid the four cheques amount within 15 days, which gave raise cause of action to file this complaint.
09. To substantiate his case, the complainant himself stepped into witness box and examined as PW.1 and got marked Ex.P-1 to 14 documents. The complainant has reiterated the contents of the complaint in his affidavit evidence about lending of hand loan of Rs.1,00,00,000/- to the accused, issuance of cheques by the accused towards repayment of loan amount and their dishonour for " Funds Insufficient ", issuance of legal notice to the accused calling upon him to pay the amount covered under four cheques and his failure to comply the same.
10. In this scenario, let me scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 to 4 9 Judgment C.C.10413/2018 are dated 20.11.2017 , 27.11.2017 , 12.12.2017 and 20.12.2017 respectively. The said cheques were returned unpaid with an endorsement "Funds Insufficient" as per Ex.P.5 to 8 bank endorsements dated 17.03.2018, Ex.P.9 is legal notice dated 05-03- 2018 under which the complainant has demanded the payment of four cheques amount, Ex.P.10 & 11 are Postal Receipts, Ex.P.12 is Postal acknowledgment, Ex.P.13 unserved postal cover and Ex.P.14 is Reply notice dated 20.3.2018. This complaint came to be filed on 06-04-2018. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act have been complied with and this complaint is filed within time. The complainant by examining himself as PW1 and by producing aforesaid documents has discharged his initial burden.
11. The accused has denied the borrowing of alleged hand loan of Rs.1 Crore from the complainant and issuance of cheques in question for repayment of said loan amount. The accused has putforth defence that one Smt. Arokya Mary and her children namely T.Suai, T.Selva Kumar, T.John Basko have entered in registered agreement of sale dated 08.11.2017 with the accused and 10 Judgment C.C.10413/2018 his friend Puttaswamy R. agreeing to sell their immovable property bearing Sy.No.284/1, measuring 2 acres 20.04. guntas including 9 guntas of Karab land situated at Halagevaddarahalli Village, Kengeri Hobli, Bangalore North Taluk for a sale consideration of Rs.690/- per Sq.ft. The complainant had financed some amount to the land owners as such he has mediated the above sale transaction and both parties of the agreement have agreed to conclude the sale transaction in the presence of complainant. To that effect there was a covenant in the agreement of sale that all the sale consideration amount shall be flown through the complainant. The complainant has signed the said agreement of sale as consenting witness. In the said sale agreement, the land owners have acknowledged the receipt of Rs.25,00,000/- as advance sale consideration amount and agreed to execute the sale deed by receiving the balance sale consideration amount. After executing sale agreement the aforesaid land owners have demanded additional amount of Rs.1 Crore as advance sale consideration. Therefore, the accused has issued four post dated cheques for Rs.1 Crore to the land owners with a condition that the said cheques were encahsed after obtaining revenue documents in their name from the appropriate authority. The complainant has 11 Judgment C.C.10413/2018 collected the said cheques in the said sale transaction from the land owners. To that effect on 9.11.2017 the land owner Smt. Arokya Mary, T, Suai, T Selva Kumar and T.John Bosko have executed one MOU acknowledging the receipt of cheques for Rs.1 Crore as advance sale consideration amount. Thereafter on the basis of GPA executed by land owners, the accused has applied the BBMP for changes of Khatha in the name of land owners. But BBMP has issued endorsement dated 18.11.2017 by stating that the conversion orders produced along with application was bogus one. After receipt of said endorsement he has brought to the notice of land owners and requested to return the advance sale consideration amount and four post dated cheques by canceling the sale agreement. The land owners have agreed to return the advance amount and cheques by collect the same from the complainant. But the complainant has failed to return the same. Therefore on 23.02.2018 he has issued legal notice to the complainant demanding to return the aforesaid cheques. But the complainant has refused to receive the said notice and by misusing the said cheques has presented the said cheques to the bank and initiated proceedings under section 138 of NI Act by issuing demand. After receipt of said notice he has replied the said 12 Judgment C.C.10413/2018 notice suitably and also lodge police complaint before Girinagar P.S. for misusing of his cheques on 24.4.2018. No loan transaction as alleged by the complainant never had taken place. The complainant had no financial capacity to lend such huge amount of Rs.1 Crore during the relevant point of time. The complainant by misusing the cheques which were issued in the aforesaid sale transaction has filed present false case against him. Hence, cheques in question were not issued for discharge of any legally enforceable debt or liability as such section 138 of NI Act is not attracted to the cheques in question. On the these grounds the accused prays to acquit him from the case.
12. In the back drop of aforesaid rival contentions, this court has given anxious consideration to the material on record and submissions made by both side. At the outset, it is pertinent to state that during the cross-examination the accused has admitted that Ex.P.1 to 4 cheques belong to his account and the signatures in the said cheques are his signatures. From the said admissions it goes without saying that the accused has not disputed the cheques in question and signatures in the said cheques. When the drawer has admitted the issuance of cheque as well as the signature present 13 Judgment C.C.10413/2018 therein, the presumption envisaged under section 118 read with section 139 of NI Act, would operate in favour of the complainant. The Hon'ble Supreme Court in M/S Kalamani Tex and another V/s P. Balasubramanian (2021) 5 SCC 283 has held that the Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative, such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. Therefore once the drawer has admitted the issuance of cheque as well as on the signature present therein or it is established that signature in cheque belongs to accused, then the presumption envisaged under section 118 and 139 of NI Act, would operate in favour of the complainant. The said provisions lays down a special rule of evidence applicable to negotiable instrument. The presumption is one of law and thereunder court shall presume that the Negotiable instrument was endorsed for consideration. So, also in the absence of contrary evidence on behalf of the accused, the presumption under section 118 and 139 of NI Act goes in favour of the complainant. In the present case also the accused has admitted his signatures in the cheques. As such presumption under section 14 Judgment C.C.10413/2018 118 and 139 of NI Act has to be drawn in favour of the complainant. Section 118 reads as here:- "That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration". Further Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here: - "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, or any debt or other liability." A combined reading of above said sections raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability.
13. No doubt, the said statutory presumptions are rebuttable in nature. It is for the accused to place cogent and probable defence to rebut presumption raised in favour of the complainant. As discussed above when the complainant has relied upon the statutory presumption enshrined under section 118 read with section 139 of NI Act. It is for the accused to rebut the said presumption with cogent and convincing evidence. To put it other way, the burden lies 15 Judgment C.C.10413/2018 upon the accused to prove that Ex.P.1 to 4 cheques were not issued for discharge of any debt but the complainant has misused his cheques which were issued in the sale transaction. It is worth to note that section 106 of Indian Evidence Act postulates that, the burden is on the accused to establish the fact which is especially within his special knowledge. This provision is exception to the General Rule that, the burden of proof is always on the prosecution to establish their case beyond all reasonable doubt. In that view of the matter the burden is on the accused to prove that the cheques in question were not issued for discharge of any legally enforceable debt or liability but same were issued in the sale transaction in favour of the land owners, the complainant has misused the said cheques to have unlawful gain. The learned counsel for the complainant has relied on decisions reported in (2001) 8 SCC 458 K N Beena Vs Muniyappan and another, AIR 2010 SC 1898 Rangappa Vs Mohan, AIR 2018 SC 3601 T P Murugan (dead) Thr. Lrs. Vs Bojan Posa Nandhi Rep. Thr. POA holder, AIR 2018 SC 3173 Kishan Rao Vs Shankargoda and (2015) 8 SCC 378 T Vasanth Kumar Vs. Vijakumari. I have gone through the said judgments, wherein the Hon'ble Supreme Court held that presumption mandated by section 139 of NI Act does 16 Judgment C.C.10413/2018 indeed include the existence of legally enforceable debt or liability and the said presumption is a rebuttable presumption. On the other hand the defence counsel has relied on decision reported in ILR 2007 KAR 2709 M Senguttuvan Vs Mahadevaswamy, wherein the Hon'ble High Court of Karnataka has held that the presumption under section 139 of NI Act need not be rebutted only by leading defence evidence, the said presumption can be rebutted even on the basis of the facts elicited in the cross-examination of the complainant.
14. To rebut the said statutory presumption and to prove his defence the accused led defence evidence by examining himself as DW1 and also examined three more witnesses as DW2 to 4. The accused in support of his oral testimony has produced as many as 19 documents and got marked Ex.D1 to 19. The accused in his chief examination has reiterated his defence that he and his friend Puttaswamy have entered into sale agreement with land owners Smt.Arokya Mary and her children. The complainant has mediated said sale transaction and signed the agreement of sale as consenting witness. Towards payment of advance sale consideration amount he has issued Ex.P.1 to 4 cheques to land owners. But the complainant 17 Judgment C.C.10413/2018 has collected the said cheuqes from the land owners and misused those cheques to file present case. There was no loan transaction had taken place with the complainant and cheques in question were not issued for discharge of any legally enforceable debt. DW2 Puttaswamy is the party to the Ex.D.3 sale agreement and he has also deposed same line as deposed by the accused. DW3 is the son of Arokya Mary who has also one of the executent of Ex.D3 agreement of sale in favour of accused. DW4 is the witness to the MOU Ex.P.7, DW3 and DW4 have deposed as deposed by the accused. During the cross-examination, DW1 to 4 have denied the suggestion that the accused has borrowed hand loan of Rs.1 Crore from the complainant and for repayment of said hand loan he has issued Ex.P.1 to 4 cheques.
15. It is the specific case of the complainant that he and accused have known to each other since 10 years. Based on the said friendship and acquaintance, in the month of June 2017 the accused has approached the complainant and borrowed hand loan of Rs.1,00,00,000/-(Rupees One Crore only) from him by way of cash as a hand loan for his urgent domestic and business problems with a promise that he will repay the said loan amount within 3 months.
18 Judgment C.C.10413/2018 But he has not kept up his promise and after demand to repay the loan amount the accused has issued 4 post dated cheques for Rs.1crore. The complainant has presented the said cheque for encashment, but said cheuqes were came to be dishonoured for Funds Insufficient.
16. The complainant has not stated the exact date of loan in the complaint, notice and chief examination affidavit. He has simply contended that he has paid loan amount in the month of June 2017. But during the cross- examination he has stated that he has lent loan to the accused on 18.6.2017. But the said date has not been stated in the complaint, notice and chief examination for the reason known to him. Rs.1 Crore is not small amount to forget the date of loan so easily. Furthermore no document such as DP Note, receipt or loan agreement were got executed at the time of alleged loan. Except oral testimony of PW1 and PW2 no documentary evidence is produced for evidencing the alleged loan transaction. Even the complainant has not produced any materials to show how he has arranged said Rs.1 Crore. The loan amount is very substantial and it is highly improbable that a person would lend such huge amount to the other person without executing any document to that effect or without 19 Judgment C.C.10413/2018 taking adequate security from the other person. Moreover, the complainant could not prove his financial capacity to advance such huge loan amount to the accused. In the absence of any document supporting the allegations of the complainant that the alleged loan amount was advanced to the accused, it cannot be believed that he might have advanced said amount to the accused.
17. The accused has taken specific defence that the cheques in question were issued in the sale transaction with the land owners under Ex.D.3 sale agreement. The complainant has collected the said cheques from the land owners since he has mediated the sale transaction and financed some amount to the land owners and misused the same to file false case. The accused specifically contended that no loan transaction had taken place between himself and complainant. Hence, question of issuing cheques for repayment of alleged hand loan amount does not arise at all.
18. In support of the said contention, the accused has produced as many as 19 documents and got marked those documents as Ex.D.1 to 19. Out of the said documents, Ex.D.3 is the certified copy of the agreement of sale dated 08.11.2017. On perusal of the recitals of the 20 Judgment C.C.10413/2018 said agreement of sale it appears that the accused and Puttaswamy have entered to sale agreement with one Arokya Mary and her children namely T.Susai, T Selva Kumar and T.John Bosko. The complainant has signed the said agreement as consenting witness. There was a specific covenant in the said sale agreement that ಲ ಕರ ಬಬಗಳಳರರ-560077, ಯಶವಬತಪರ ಹಳಹಬಳ ಜಸ ಬಬಗಳಳರರ ಉತತರ ತಲಳ ನಗರದ ಅಕಕಪಪ ಗರರನ, 129 ನಹ ನಬಬರ ಮನಯಲ ವಸವಗರರವ ಪಬರರರಬಗರವರ ಮಗನಗದ ಸರಮರರ 36 ವರರ ವಯಸರಳಳ ಶಶಹ .ಪ.ನಗರಜಆದ ಇವರರ ಶಶಹಮತ . ಆರಳಹಕಕ ಮಹರ ಮತರತ ಇವರ ಕರಟರಬಬದ ಸದಸಕರರ ಷರಳ ಕ ಲ ಸಸತತಹನ ನ ನಹಡದರ ಮತರತ ಇವರ ಕರಷಕಲಕಕ ನರವಗರವದರಬದ ವಚರದಲ ಹಣಕಸನ ನರವನರ ಶಶಹ.ಪ.ನಗರಜ ರವರ ಒಪಪಗ ಸಕಯನರ ನ ಈ ಪತ ತಕಕ ಹಕಸಕಳಟಷರರತತಹವ.
ಕ ಲ ಸಸತತಗ ಸಬಬಬದಪಟಷಬತ ವಕವಹರವನರ
ಕರಣವಹನಬದರ ಷರಳ ನ ನಡಸರವ ಬಗಗ
ಪ.ನಗರಜ ರವರನರ ಷ ಕಳಬರರ ಅವರ ಸಮಕಮದಲ ಸಸತತನ ವಕವಹರವನರ
ನ ಮರಬದಟರ ನ
ನಡಸಲರ ಒಪಪಕಳಬಡರರತತಹವ ಹಗಳ ಈ ಸಸತತನ ನಳಬದಣಯಬದ ಮಳಲ ಮಲಹಕರಗ ಬರತಕಕ ಹಣ ಶಶಹ ಪ. ನಗರಜ ರವರ ಖತಯಬದ ಹಳಹಗತಕಕದರ. ಇದಕಕ ಮಳಲ ಮಲಹಕರರ ಹಗಳ ಖರಹದದರರರ ಆದ ಇಬಬರಗಳ ಸಹ ಒಪಪರರತತರ.
19. On perusal of the aforesaid covenant, it is clear that the complainant has mediated the sale transaction since he had financed some amount to land owners Arokya Mary and her family and he was having possession of title deeds of said property. Therefore, both parties to the agreement have agreed to complete the sale 21 Judgment C.C.10413/2018 transaction in his presence and also agreed that sale consideration amount shall be flown through the account of the complainant. The accused contended that the because of the said covenant, the complainant has collected Ex.P.1 to 4 cheques from the land owners which were issued in the sale transaction and misused the same. The accused also contended that after issuing the Ex.P.1 to 4 cheques to the land owners, they have executed Ex.P.7 MOU dated 09.11.2017 by acknowledging the receipt of Ex.P.1 to 4 cheques towards payment of advance sale consideration amount. On perusal of Ex.D.7, it appears, Arokya Mary and her children have executed the said document in favour of the accused in the presence of witness Rita Kumar, Puttaswamy and T.S.Sundar Raj. The said witnesses have signed the Ex.D.7 MOU. Admittedly the complainant is not the signatory of the said MOU. The complainant contended that the accused, Puttaswamy, Arokya Mary and her children have colluded each other and created the said document for the purpose of this case in order to defraud him.
20. I have gone through the Ex.D7 MOU. The said MOU has been prepared on embossed stamp paper. There is an endorsement that the said embossing was done in the senior sub-Registrar office, Kengeri 22 Judgment C.C.10413/2018 on 09.11.2017. I do not find any reason to suspect said embossing regarding payment of stamp duty. In the Ex.D.7 MOU, there is a recital that the accused has issued Ex.P.1 to 4 cheques to the land owners towards the payment of advance sale consideration amount. By combined perusal of Ex.D.3 and D7 it appears that the defence taken by the accused appears to be probable one. Even during the cross- examination of DW1 to 4 the complainant counsel has suggested that the complainant has lent Rs.60 lakhs to Arokya Mary and her family members. In the cross-examination of PW1, he deposed that he has lent Rs.60 lakhs to Arokya Mary. In view of the said admissions and documentary evidence, I am of the considered view that the cheques in question were issued in the sale transaction to the land owners towards the payment of advance sale consideration amount and the complainant being the mediator of the said sale transaction and in the strength of covenant in the Ex.D.3 agreement of sale has collected the said cheques from the hands of land owners and make use of the said cheques to file present case.
21. As I stated above, the accused has taken defence that he never borrowed any loan from the complainant and also questioned financial capacity of the complainant to lend such a huge amount of 23 Judgment C.C.10413/2018 Rs.1 Crore. Regarding financial capacity of the complainant is concerned, it is appropriate to refer judgment reported in Rohitbhai Jivanlal Patel v. State of Gujarat : AIR 2019 SC 1876, Wherein the Hon'ble Supreme Court has observed that "The observations of the trial court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Section 118 and section 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant 24 Judgment C.C.10413/2018 consideration while examining if the accused has been able to rebut the presumption or not". In Basalingappa v. Mudibasappa : AIR 2019 SC 1983, the Hon'ble Apex Court observed that "During his cross-examination, when financial capacity to pay Rs.6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts". In APS Forex Service Private Limited v. Shakti International Fashion Linkers AIR 2020 SC 945, the Hon'ble Apex Court has clarified and explained the issue as follows "Now so far as the reliance is placed by Learned Counsel appearing on behalf of the accused on the decision of this Court in the case of Basalingappa (supra), on going through the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand and/or the same shall not be of any assistance to the accused. In that case before this Court, the defence by the accused was that the cheque amount was given by the complainant to the accused by way of loan. When the proceedings were initiated under Section 138 of the N.I. Act the accused denied the debt liability and the accused 25 Judgment C.C.10413/2018 raised the defence and questioned the financial capacity of the complainant. To that, the complainant failed to prove and establish his financial capacity. Therefore, this Court was satisfied that the accused had a probable defence and consequently in absence of complainant having failed to prove his financial capacity, this Court acquitted the accused. In the present case, the accused never questioned the financial capacity of the complainant. We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque".
22. The crux of the decisions referred to above is that the complainant has no obligation, in all cases under Section 138 of the Act, to prove his financial capacity. But, when the case of the 26 Judgment C.C.10413/2018 complainant is that he lent money to the accused by cash and that the accused issued the cheque in discharge of the liability, and if the accused challenges the financial capacity of the complainant to advance the money, despite the presumption under Section 139 of the Act, the complainant has the obligation to prove his financial capacity or the source of the money allegedly lent by him to the accused. The complainant has no initial burden to prove his financial capacity or the source of the money. The obligation in that regard would arise only when his capacity or capability to advance the money is challenged by the accused.
23. In the case in hand, the accused seriously disputed the financial capacity of the complainant to lend loan of Rs.1 Crore during the relevant point of time. In that regards that defence counsel has cross-examined PW1 and PW2. PW1 deposed that ನನರ ಈರರಳಳ ವಕವಹರ ಎಪಎಬಸ ಆರ ಎಬ ಸ ಯರರ ಮರರತತಹನ. ನನರ ಈರರಳಳ ರರತರಬದ ಟನಲಕಕದಲ ಕಳಬರರ ಕಳಬರರ ಮರಟ ಮರರತತಹನ. ನಮಮ ವಕವಹರದ ಬಗಗ ಲಕಕ ಪತ ತ ಇರರತತಹವ . ಇನ ಅಬರ ಕಬಪನ ನಮಮ ಅಬಗಡಯ ಹಸರರ, ಅದಕಕ ಮಹಹಶ, ನಗರಜ ಮತರತ ನನರ ಪಲರದರರರ. ಈ ಅಬಗಡಗಗ ಬಕಬಕ ಖತ ಇದ. ಹಣ ವಕಪರದಬದ ಬಬದತರತ. ನನನ ಬಳ ಆ ದನ ಹಣ ಇದದ ಬಗಗ ನಕ.ಯಲಯಕಕ ದಖಲತ ಕಳರಲರ ತಳಬದರ ಇಲಲ. ನಮಮ ಕಬಪನಯ ಹಸರನಲ ಐಟ ಪವತಸರತತಹವ . ಆರ.ಎಬ.ಸ ಯರರ ಗ ಶಹ 1 ರರರ ಷ ತತಹವ. ನನನ ಆದಯ ಮತರತ ವಕವಹರದ ಬಗಗ ದಖಲತ ಷ ಕಟರ 27 Judgment C.C.10413/2018 ನ ಕಳರಲರ ತಳಬದರ ಇಲಲ. Even during the cross-examination of ಯನರ defence witnesses, the complainant counsel suggested that the complainant is getting lakhs of Rupees income per day from his onion business. But the complainant has not produced his IT returns, Bank statement or documents relating to his so called onion business. The complainant claims that he is a wholesale onion merchant at APMC Yards, Yeshwanthapura. He also claims that he had document regarding onion business. But no piece of document produced to that effect. During the cross-examination, he deposed that he is having documents to that effect and there is no impediment to produce those documents. Despite of the same he has not produced any document. Therefore adverse inference under section 114 illustrate (g) of Evidence Act has to drawn that if he produced the said document it would be unfavorable to him. Therefore, he has not produced the same. Even PW2 also deposed that he is doing onion trading business with complainant and he used to pay profit to the complainant and having document to that effect. But no document has been produced. Therefore, the complainant has failed to prove his financial capacity to lend loan of Rs.1 Crore to the accused during the relevant point of time. Rs.1 Crore is a substantial 28 Judgment C.C.10413/2018 one. Hence, without any proof it is difficult to presume that the complainant had financial capacity or source of income to arrange such huge amount of Rs.1 Crore during the relevant point of time, which leads to the conclusion that there is no legally enforceable debt. As such the accused has successfully proved that the cheques in question were not issued for discharge of any legally enforceable debt or liability, but the complainant has misused the cheques which were issued in favour of the land owners in the sale transaction of immovable property as per Ex.D3 agreement of sale. Thereby, the accused has effectively displaces and successfully rebutted the presumption under section 118 and 139 of NI Act available in favour of the complainant regarding existence of debt or liability. There being no any further relevant believable evidence brought on record by the complainant in the form of independent proof of the fact of the loan transaction between him and accused, the complainant has miserably failed to prove the charges against the accused.
24. Hon'ble Apex court in the case of Kamala S Vs Vidhyadharan M J, reported in (2007) 5 SCC 264 has held that once the accused has discharged his burden, then onus shifts on the complainant to prove his case beyond reasonable doubt. On overall 29 Judgment C.C.10413/2018 appreciation of evidence, it is forthcoming that the complainant has failed to prove his case beyond reasonable doubt. In other words, the complainant has failed to put-forth acceptable and satisfactory evidence in support of the case, to show that the accused has issued Ex.P-1 to 4 cheques for legally recoverable debt or liability. In the result, I am of the considered opinion that the complainant has failed to prove that the accused has committed the offence punishable under Section 138 of Negotiable Instruments Act. In view above discussion this court proceeds to answer POINT NO.1 IN THE NEGATIVE.
25. POINT NO.2:- In view of above said reasons the allegation leveled against the accused is not proved beyond reasonable doubts. Accordingly, this court proceeds to pass following;
ORDER Acting under Section 255(1) of Cr.P.C., the accused is acquitted of the offence punishable under Section 138 of Negotiable Instruments Act. Bail bond of accused stand cancelled.
30 Judgment C.C.10413/2018 (Directly dictated to the Stenographer on computer, typed by her, corrected by me and then judgment pronounced in the open court on this the 12 th May 2023).
(MANJUNATHA M.S.) XVIII A.C.M.M.,BANGALORE.
ANNEXURE I. List of witnesses on behalf of complainant:
P.W.1: Sri.P.Nagaraj P.W.2: A.V.Hemaraj II. List of documents on behalf of complainant:
Ex.P-1 to 4 : Four Original Cheques.
Ex.P-5 to 8 : Bank memos.
Ex.P-9 : Legal notice.
Ex.P-10 &11 : Postal Receipts
Ex.P-12 : Postal Acknowledgment
Ex.P-13 : Unserved Postal cover
Ex.P-14 : Reply Notice
III. List of witnesses for the accused:
D.W.1: A.V.Hemaraju
D.W.2: Puttaswamy.R.
D.W.3: T.Selva Kumar
D.W.4: T.S.Sundar Raj
31 Judgment C.C.10413/2018
IV. List of documents for accused:
Ex.D-1 : Signature witness .
Ex.D-2 : Postal cover,
Ex.D-3 : Signatures of witness
Ex.D-4 : Copy of MOU
Ex.D-5 : Copy of GPA
Ex.D-6 : Agreement of sale
Ex.D-7 : Agreement letter
Ex.D-8 : Endorsement issued by BBMP
Ex.D-9 : Legal notice
Ex.D-10 : Postal receipt
Ex.D-11 : Legal notice
Ex.D-12& 13 : Postal receipt
Ex.D-14 : Postal acknowledgment
Ex.D-15 : Postal cover
Ex.D-16 : Acknowledgment issued by Police
Ex.D-17 : complaint
Ex.D-18 : FIR
Ex.D-19 : Acknowledgment issued by Police
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE
Digitally signed
by
MANJUNATHA MANJUNATHA
MS MS
Date: 2023.05.12
15:22:22 +0530