Bangalore District Court
Shashvath Chits Pvt. Ltd vs Global Enterprises on 24 June, 2024
C.C.NO.4641/2019
0
KABC030139542019
Presented on : 23-02-2019
Registered on : 23-02-2019
Decided on : 24-06-2024
Duration : 5 years, 4 months, 1 days
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LL.B.,LL.M
XXVIII A.C.M.M, Bengaluru City.
DATED: THIS THE 24th DAY OF JUNE-2024
C.C.NO.4641/2019
Complainant: Shashvath Chits Private Limited,
No.24/25, Arunachala Road,
Papareddypalya, Nagarbhavi
2nd Stage, Bengaluru-560072,
R/by its Director, Sri.Ramachandra.H.
(By Sri.Dasharath.T.M.,Adv.,)
V/s
Accused: Global Enterprises,
No.4/2, Thunganagar Main Road,
1st Floor, Herohalli, Bangalore-560091.
R/by its Proprietor,
Sri.Umesha S/o Narasegowda.
(By Sri.G.M.Gadilingappa.,Adv.,)
:JUDGMENT:
C.C.NO.4641/2019 1 This case arises out of the private complaint filed by the complainant against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant is a private limited company and is doing the chit fund business. The accused is one of the member of the chit group SFTL-1 dated: 29.11.2012 for a sum of Rs.40,00,000/- and the duration of the said chit was 40 months comprising of 40 installments with monthly subscription of Rs.1,00,000/-. The termination of the said chit was on 10.03.2016. The accused being the member of the said chit group, was assigned with group code SFTL-1/8. Further before the termination of the said chit group, the accused has availed the benefit and he was one of the successful bidder. Accordingly the accused received the amount from the complainant on 09.10.2013, 26.10.2013, 13.11.2013 and 18.11.2013. After the receipt of the same, the accused was required to pay the monthly subscription of Rs.1,00,000/- till the date of termination of the said chit group. The accused was negligent in paying the monthly subscription and used to assign one or the other reasons to pay the subscription and used keep on postponing the same even after termination of the chit C.C.NO.4641/2019 2 group.
3. It is further stated that as on June 2018, the total outstanding due from the accused was at Rs.24,17,325/- and further on 14.06.2018 the complainant was given an intimation letter to the accused, called upon him to pay the outstanding due to the complainant at the earliest. The accused obliging to the request of the complainant on 14.06.2018 had issued an account payee cheque No.000095 dated:
14.06.2018 for Rs.24,17,325/- drawn on Bank Baroda, Peenya Industrial Area Branch, Bangalore-58 in favour of the complainant company. The complainant on the same day presented the said cheque for realization through its banker the State Bank of India, Papareddy Playa Branch, Bengaluru. But the said cheque was dishonored on 15.06.2018 as "Funds Insufficient". After receipt of the endorsement from the bank, the complainant had intimated the same to the accused, the accused advised the complainant to represent the cheque for payment on 25.07.2018. As per the request of the accused the complainant again represented the said cheque on 25.07.2018. But again the said cheque was dishonored on 26.07.2018 as "Funds Insufficient".
Thereafter, on 18.08.2018 the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon him to pay the cheque amount within 15 days from the date of receipt of the notice.
C.C.NO.4641/2019 3 The said notice was duly served to the accused on 20.08.2018 and he had issued an untenable reply. But he has failed to make payment of the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 01.10.2018.
4. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R No.15590/2018. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 22.02.2019 to register the case in Register No.III.
5. Thereafter, summons was issued to the accused and he appeared before the court through advocate and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
6. The complainant in support of its case, have examined its Director as PW.1 and got marked 15 documents at Ex.P.1 to 15 and closed its side.
7. After closer of the evidence of the complainant, the statement of the accused under section 313 of C.C.NO.4641/2019 4 Cr.P.C., was recorded. He has denied the incriminating evidence appeared against him. In his defense the accused has been examined himself as DW.1 and 37 documents were marked at Ex.D.3 to 39. During the cross examination of PW.1 two documents were marked at Ex.D.1 and 2.
8. I have heard the arguments on both the sides and perused the written arguments submitted by the learned counsel for the complainant and also perused the material placed n record.
9. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-
Ex.P.3, towards the discharge of the said legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.3 was dishonored for the reasons "Funds Insufficient" in the account of the accused and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
C.C.NO.4641/2019 5
5. What order?
10. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
11. POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken these two points together for common discussion. The case of the complainant is that he was acquainted with the accused. The complainant is doing the chit fund business. The accused is one of the member of the chit group SFTL-1 for Rs.40,00,000/- for the period of 40 months comprising with monthly subscription of Rs.1,00,000/-. The accused being the member of the said chit group, was assigned with group code SFTL- 1/8. The accused has availed the benefit and he was one of the successful bidder on the auction date and accordingly he has received the amount from the complainant on different dates. After the receipt of the amount, he was required to pay the monthly subscription of Rs.1,00,000/- till the date of termination of the said chit group. The accused was negligent in C.C.NO.4641/2019 6 paying the monthly subscription to the complainant.
12. Further as on June 2018 the accused was due of Rs.24,17,325/- and further the complainant was given an intimation letter to the accused, called upon him to pay the outstanding due to the complainant at the earliest. Further on the request of the complainant the accused had issued an account payee cheque in question in favour of the complainant. The complainant presented the said cheque for realization through its banker. But the said cheque was dishonored as "Funds Insufficient". After receipt of the endorsement from the bank, the complainant had intimated the same to the accused, the accused advised the complainant to represent the cheque for payment. As per the request of the accused the complainant again represented the said cheque for encashment. But again the said cheque was dishonored as "Funds Insufficient". Thereafter, the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. After receiving the legal notice the accused has failed to make payment of the cheque, but he had issued an untenable reply. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
C.C.NO.4641/2019 7
13. In support of the case, the complainant's have examined its one of the Director as P.W.1 and 15 documents were marked at Ex.P.1 to 15. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the Board resolution dated: 09.01.2018. Ex.P.2 is the Authorization. Ex.P.3 is the commencement of Chit sanction letter dated: 29.11.2017. Ex.P.4 is the Chit agreement. Ex.P.5 is the Chit ledger account. Ex.P.6 is the Intimation letter. Ex.P.7 is the cheque in question issued by the accused in favour of the complainant dated: 14.06.2018 for Rs.24,17,325/-. Ex.P.7(a) is the signature of the accused. Ex.P.8 and 9 are the bank memos informing the dishonor of the cheque as funds Insufficient dated:
15.06.2018 and 26.07.2018. Ex.P.10 is the office copy of legal notice dated: 18.08.2018. Ex.P.10(a) is the postal receipt. Ex.P.11 is the postal acknowledgment. Ex.P.12 is the reply notice. Ex.P.13 is the Complaint. Ex.P.14 are the 35 original duplicate receipts. Ex.P.15 are the 35 original office copy of receipts.
14. The accused has been examined himself as DW.1 by way of affidavit and 39 documents were marked at Ex.D.1 to 39. In the chief examination D.W.1 has repeated the defence taken by him. Ex.D.1 is the PW.1 signature document. Ex.D.2 is the receipt. Ex.P.3 to 39 are the receipts.
C.C.NO.4641/2019 8
15. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused is one of the chit member in the chit group SFTL-1 for Rs.40,00,000/- payable at Rs.1,00,000/- each in 40 months. The accused has availed the benefits and he was one of the successful bidder and he has received the amount from the complainant on different dates. After receiving the said amount the accused was neglected in paying the chit subscription to the complainant. After repeated request made by the complainant the accused postponing the same one or other reason. Further argued that the complainant got issued an intimation letter to the accused. After receipt of the said intimation letter the accused towards discharge of the said payment, had issued the cheque in favour of the complainant. He further argued that the accused has not denied Ex.P.7 being his cheque drawn on his account and signature appearing on the said cheque. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused have failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. The defence have failed C.C.NO.4641/2019 9 to rebut the presumption under section 139 N.I.Act. Further argued that the accused have failed to produce any believable evidence that he had issued three blank cheques in favour of the complainant for the purpose of security and also why he has not returned back the same is not clear. He further argued that the accused have failed to produce any documentary evidence regarding he had issued the blank cheques in favour of the complainant for the purpose of security. Further argued that under section 139 of N.I.Act, there is a presumption that the cheque have been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.7 being his cheque drawn on his account. The said presumption is available to the complainant.
16. Further argued that the accused had failed to prove the very fact that the cheque in question was given to the complainant for the purpose of security and it was blank when it was given to the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had given the blank cheques as security measure. As such, very defence of C.C.NO.4641/2019 10 the accused is not believable. The learned counsel for the complainant further argued that the accused have not produced any documentary evidence to prove his defence. Upon careful perusal of the entire evidence of records both oral as well as documentary evidence the complainant have proved their case.
17. The learned counsel for the complainant has filed written arguments. In his written argument he has reiterated the brief facts of the case. Further submits that it is crystal clear that the accused had issued the aforesaid cheque to clear the outstanding dues of the chit fund. The complainant sincere efforts to end the matter amicably but inspite of the best efforts, the accused did not come forward to settle the dispute amicably. As the accused didn't take necessary steps to clear the outstanding due, the complainant was constrained to issue a legal notice on 18.08.2018 to the accused through his counsel and the said notice came to be duly served on the accused on 20.08.2018. The accused pursuant to the receipt of the notice replied on 17.09.2018, which was served, wherein the accused has denied the demand made by the complainant. Hence, this complaint is filed before this court. Further the accused issued the cheque having full knowledge that there is insufficient amount in the account and as such the accused has committed the offence punishable under section 138 R/w 141 of Negotiable C.C.NO.4641/2019 11 Installments Act and as such the accused is liable to be punished. The complainant has examined himself as PW.1 and got marked 15 documents as Ex.P.1 to 15 and deposed that there was an outstanding due of Rs.24,17,325/- to the complainant. The accused has cross examined the complainant and he has failed to disprove the complaint.
18. It is further submits that the accused in the cross examination of PW.1 has stressed much on the point, that PW.1 had no right to institute the complaint and further that no clear authorization was given to PW.1 from the complainant company to prosecute the accused. The documents produced by the PW.1 viz., Ex.P.1 and 2, clearly shows that the complainant company had given necessary authorization to PW.1 to initiate the case against the accused. Further submits that without prejudice to the documents produced by PW.1 showing his authorization. PW.1 is the foreman of the complainant company and further he is the person, who is responsible for the proper conduct of the chit. That the chit fund act, tells about the rights of the foreman and further in section 21(1)(g) of the act it made clear that "the foreman of the chit company is entitled to do all acts that may be necessary for the due and proper conduct of the chit". Thereby in view of section 21 of the chit funds act and the documents produced by PW.1, it is clear that PW.1 is authorized C.C.NO.4641/2019 12 person of the complainant to do all acts for the proper conduct of the chit. It is further submits that the accused counsel during the course of cross examination confronted a document to the complainant and on admission of the document, the same came to be marked as Ex.D.1. The accused heavily relied upon the said document and cross examined the complainant and posed questions that the accused in furtherance to Ex.D.1 has given number of cheques to the complainant and also other connected documents as security and further has contented that the complainant has misused the one of the cheque. That the said contention cannot be taken in to consideration for the reason that in the letter i.e., Ex.D1 at point No.3, it is very clearly mentioned that the accused has to give only two cheques to the complainant and that accordingly, the accused has given only two cheques to the complainant in terms of Ex.D.1. That apart, the accused himself during the course of cross examination has admitted that only two cheques have been sought by the complainant as per Ex.D.1 and it was further stated by the accused that he cannot remember, as to how may cheques he has given to the complainant as per Ex.D.1. That when the accused itself is not having clear knowledge about the number of cheques given him to the complainant as per Ex.D.1, then the contention of the accused counsel on the number of C.C.NO.4641/2019 13 cheques and misuse of cheques cannot be considered. Further the accused has given Ex.P.7 cheque for clearance of the chit dues pursuant to the intimation letter dated: 14.06.2018 sent by the complainant and further the said cheque was never issued to the complainant as per Ex.D.1 as security.
19. It is further submits that during the course of cross examination of the complainant posed questions that the accused has not issued Ex.P.7-cheque and further also suggested to PW.1 that the signature on Ex.P.7-cheque does not belong to the accused and same is a forged one. But the accused during the course of his cross examination has specifically admitted that Ex.P.7-cheque is of his bank account and the cheque is issued bears his signature. The said admissions of the accused clearly shows that there was a valid transaction between the accused and the complainant company and further it is clear that the accused has issued the cheque for discharge of his liability. Further submits that the accused has not disputed the fact that Ex.P.7-cheque does not pertain to his bank account and further he has also not disputed the fact that the signature in the Ex.P.7-cheque is not his signature. That when such being the case, it's presumption certainly needs to be drawn in favour of the complainant that the cheque in question has been issued by the accused towards a legally enforceable C.C.NO.4641/2019 14 debt. Further the accused has not placed any satisfactory evidence on record to rebut the aforesaid presumption and further the accused has not disputed even the dishonor of cheque. Further submits that the accused has admitted that he was a member in the chit group SFTL-01-8 and further admitted that in pursuant to his bid, the complainant has paid the entire amount to the accused on different dates. But the accused instead of repaying the chit dues, has taken up a false contention that though he has repaid the entire chit amount, the complainant has misused a cheque given by him as security and has filed this case. Further the Ex.P.5 is the chit ledger maintained by the complainant company and further the bare perusal of the ledge, it reveals the payment made to the subscriber and further it reveals the payment made by the subscriber and it further reveals the amount pending from the subscriber. Thereby considering the contents/details in the ledger, it is clear that the accused is due to the complainant.
20. It is further submits that the accused examined himself as D.W.1 and produced certain created documents viz., Ex.D.3 to 39 before this court, stating that the said receipts have been issued by the complainant company in receipt of his payment for the chit. It is further submits that as soon as the accused produced the created receipts, the complainant verified the receipts produced by the accused with the C.C.NO.4641/2019 15 company documents and on verification, it was found that the accused forged and created the receipts. Thereby, P.W.1 again examined himself by producing the book containing the original receipts for the kind perusal of this court and the same were marked as Ex.P.15 and 16 series. It is clear from the receipts produced by the complainant that the receipts produced by the accused are created and further it is clear that the accused has played a fraud on this court. Thereby the accused is liable to be punished. The receipts produced by the accused have been issued by the complainant to its other customers for payment of their chit amount and further the said fact is evidence from the documents produced by the complainant. Further the logo of the complainant in the receipts viz Ex.D.3 to 39 produced by the accused is different to the receipts viz., Ex.P.15 and 16 series produced by the complainant and further the handwriting in the receipts viz., Ex.D.3 to 39 is uniform and written by a same person. Whereas in the Ex.P.15 and 16 series, it is different. Thereby, it could be well said that the receipts Ex.D.3 to 39 produced by the accused are created ones.
21. It is further submits that the accused has paid the installment No.1 to 21 only by means of cheque and online transfer and only one payment i.e., installment No.12 was paid by cash. But very strangely, C.C.NO.4641/2019 16 the accused puts up a defence by submitting the receipts viz Ex.D.22 to 39, which show that the accused has paid by way of cash. The accused has not produced any cogent documents to show that, he had the requisite cash at the time of the alleged payments and further in his cross examination, the accused admits to have not produced any documents before this court to show that he had cash on hand. The said alleged cash payments are not believable without there being any documents. Further the complainant counsel during the course of cross examining the accused showed the Whatsapp messages sent by the accused to the complainant and in the said cross cross examination, the accused admitted that the mobile number viz "9844666309" is pertaining to him and he also admits to use Whatsapp messenger. But when a question was posed to him regarding the message sent by him to the complainant on 03.12.2017, seeking time to pay he chit amount on the pretext of pending loan process, the accused stated that he does not remember about sending the said message. Further the accused has denied the question of the complainant counsel, thereby, the answer to the said query has to be taken as yes. It is further stated that multiples message was sent by the complainant and the accused has replied to the same. But in the cross, he states that he does not remember. Thereby, the C.C.NO.4641/2019 17 conduct of the accused to defraud the complainant also has to be taken into consideration in the above case. The contradictory statement of the accused and his counsel itself prove that the accused with an intention to cheat the complainant has issued Ex.P.7-cheque despite having complete knowledge that the cheque would be dishonored. It is submits that the accused contents that he has given signed blank cheques and that the complainant has misused the same and further also contents that the complainant has himself filled up the cheque. Though the accused has taken up such a contention, the accused failed to send Ex.P.7 to an expert and obtain a report to prove his contention. Further submits that the accused admits that Ex.P.7 cheque is signed by him and also admits that the cheque was delivered to the complainant. Thereby, it could be well said that the accused has given prima facie authority to the complainant. It is further submits that in the instant case, there is clear admission regarding the issuance of cheque towards the clearance of the legally enforceable debt and further the accused has utterly failed to rebut the presumption. Hence, he prays to convict the accused with fine and compensation.
22. The learned counsel for the accused argued that the accused had issued three blank cheques to the complainant at the time of receiving chit amount for the C.C.NO.4641/2019 18 purpose of security. Further the complainant have misused the one of the blank cheque and filed a false complaint against the accused. Further argued that the accused had issued the cheques in favour of the complainant for the purpose of security. When the cheques were given to the complainant its were blank. Further argued that the accused has never admitted regarding repayment of the said amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay the amount of Rs.24,17,325/- to the complainant. Further argued that the accused has paid all the installments, the only balance installment payable is a sum of Rs.99,800/- and not the amount covered under the cheque. Further argued that the complainant miserably failed to prove the complainant averments. The complainant unable to prove that subject cheque was issued in discharge of duly enforceable debt/liability. The complainant has not come with a clean hands before this court.
23. Further argued that the complainant has not produced any material to show when the accused defaulted monthly installment before presentation of the cheque. Thus the complainant failed to prove that the accused had issued the subject cheque for a sum of Rs.24,17,325/-. The complainant has misused the cheque obtained from the accused for security at the C.C.NO.4641/2019 19 time of receiving chit amount. Therefore, the complaint averments are concocted and the accused issuing the subject cheque is far from truth. The complainant unable to prove beyond reasonable doubt that the accused had issued the cheque to them in lieu of liability recoverable debt. Further argued that the accused created doubt against the story putforth by the complainant in the complaint. The pharse "debt or other liability" means a legally enforceable debt or other liability. There was no convincing evidence from the complainant's side as to existence of any existing debt or liability to be discharged by the accused. The accused has discharged the onus that the subject cheque was not received by the complainant for any existing debt/liability. The accused entitled to acquittal. The complainant having received the subject cheque as security at the time of receiving chit amount and it has misused the subject cheque by filing huge amount. The actual amount payable is less than the dishonored of the cheque amount and the accused has paid most of the installments. The complainant has miserably failed to prove the liability to the tune of the amount covered by the cheque. The offence is deemed to be committed if amount covered by cheuqe is either in discharge of the liability incurred by the accused either full or in part. It cannot be any way in excess of the liability incurred. Therefore, the section 138 of N.I.Act C.C.NO.4641/2019 20 cannot be said to be applicable.
24. The learned counsel for the accused further argued that at the time of making the last payment on 18.11.2013 the complainant had demanded the accused issue three cheques for the purpose of security towards the chit. As per the requirement made by the complainant the accused handed over three signed blank cheques No.000093, 000094 and 000095 of Bank of Baroda, Peenya Branch, Bangalore. It is further argued that towards the payment of the chit money the accused was regularly paying the installments to the complainant, the accused has paid the amount by way of cash, cheque and NEFT towards the chit amount. The complainant office staffs after receiving the amount have signed the voucher for having received the amount towards the installment of chit. The accused has paid total amount of Rs.32,75,285/- to the complainant. It is further argued that in the month of July 2016 the accused was not keeping good health and was bedridden, as such he was unable to concentrate on his business and had suffered financial loss. But the complainant has not sent any letter or notice to the accused regarding balance payable by the accused. It is further argued that the complainant after a lapse of two years had suddenly issued an intimation letter dated: 14.06.2018 with regard to outstanding balance of Rs.24,17,325/- to C.C.NO.4641/2019 21 the accused and same is payable by the accused, what prevented the complainant to issue intimation letter immediately when the accused failed to pay the amount or in the year 2017. At no point of time the accused has issued any post date cheque in question to the complainant towards payment of said amount as alleged in the notice as well as complaint. The complainant with an intention to cheat and extract money from the accused has misused the cheque issued by the accused as security purpose. Further argued that the cheque in question issued by the accused in favour of the complainant in the year 2013 for security purpose. As per the notice issued by the complainant the accused is not liable to pay the cheque amount. The accused has paid chit amount of Rs.32,75,285/- and only Rs.99,800/- is payable by the accused. The complainant is not entitled any relief sought in the complaint. Hence, he prays to dismiss the complaint and acquit the accused.
25. In order to attract the offence punishable under section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant's in order to prove its case, have examined its Director as PW.1 and 15 documents were marked at Ex.P.1 to 15. In chief examination, P.W.1 has C.C.NO.4641/2019 22 repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.7 being his cheque drawn on his account. The said presumption is available to the complainant.
26. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque-Ex.P.7 was issued. In order to prove his defence, the accused has failed to produce any documentary evidence before this court except Ex.D.1 to 39. PW.1 during his cross- examination has specifically denied the suggestions made to him that Ex.P.7-cheque was issued in favour of the complainant for the purpose of security at the time of receiving the chit amount and same was blank at the time of receiving the same.
27. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as C.C.NO.4641/2019 23 required for the complainant to prove the case. Further the accused has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that he had given three blank signed cheques to the complainant company for the purpose of security at the time of receiving chit amount. Except, the said defence, he has not produced any materials to prove such defence. If he had given the blank cheques to the complainant, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque. On which date he came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why he has given blank signed cheques to the complainant without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the blank signed cheques. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodge complaint before concerned police station or any courts. No steps have C.C.NO.4641/2019 24 been taken to receive back the blank signed cheques, after he came to know about the same.
28. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in the case of Rangappa V/S Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.7 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
29. The accused examined himself as DW.1 and produced documents and marked at Ex.D.3 to 39 C.C.NO.4641/2019 25 stating that the said receipts have been issued by the complainant in receipt of the payment for the chit. The complainant have also produced the documents and marked at Ex.P.14 and 15. On perusal and comparison of these documents it is clearly shows that the complainant issued the very same series receipts its other customers for payment of their chit amount. Further the accused not stated anything about this fact. Further if the accused has paid the amount to the complainant why he has not returned back his cheques. Further the accused has not taken any legal action against the complainant. The accused without taking any action against the complainant now he has stated that the complainant have misused his security cheque and filed false case against him. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
30. Further the accused has taken contention that the cheque was given as a security at the time of receiving the chit amount. Hence, offence under section 138 of N.I.Act is not attracted. In this regard once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and C.C.NO.4641/2019 26 another, reported in 2021 SCC online SC 1002, the Hon'ble Supreme court has categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, without producing any documents, then he has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
31. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to C.C.NO.4641/2019 27 the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
32. In the case of Kalamani Tex V/s P. Balasubramanian, reported in (2021) 5 SCC 283 has observed that section 138 read with 139 of N.I.Act, presumption as to legally enforceable debt, effect of admission regarding signature on the cheque, in such situation, court held that required to presume that the cheque was issued as consideration for legally enforceable debt.
"13. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under section 118 and 139 of N.I.Act. The statute mandates that once the signature(s) of an accused on the cheque/Negotiable Instruments are established, then these "reverse onus"
clauses become operative. In such situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallized by this court in Rohitbhai Jivanlal Patel V/s state of Gujrat, (2019) 18 SCC 106, Para 18: (2020) 3 SCC (Civil) 800:
(2020) 3 SCC (Cri) 575) in the following words:
(SCC pp. 120-21, para 18)".
"18. In case at hand, even after purportedly drawing the presumption under section 139 of the N.I.Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want to examination of relevant witness who allegedly extended him C.C.NO.4641/2019 28 money for advancing it to the accused. This approach of the trial court had been at variance with principle of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused".
33. In the present case also, as the accused never disputed his signature and did not deny issuing cheque from the account of the accused. The accused did not dispute cheque return memos also. The cheque was returned for the reasons funds insufficient in the account of the accused. Thus, the act clearly lays down presumptions in favour of the complainant with regard to the issuance of the cheque by the accused towards the discharge of the liability in favour of the complainant. Further under scheme of the Act, the onus is upon the accused to rebut the presumption in favour of the complainant by raising a probable defence. Such being the legal position, it would be pertinent to refer to the defences raised by the accused to rebut the presumptions in favour of the complainant in this case.
34. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it C.C.NO.4641/2019 29 is just and necessary to accumulate undisputed facts in this case.
35. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reason stated in the dishonor memos. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard. It was also contended by the accused that he had given the blank signed cheques to the complainant for the purpose of security at the time of receiving the chit amount. The said one of the blank cheque was misused by the complainant. But the accused has failed to produce any believable evidence before this court.
36. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing the false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said security cheque and had not return the same, inspite of collecting cheques leaves from him, as a prudent man, the accused should C.C.NO.4641/2019 30 have inquired with the complainant and demanded to return that cheque. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.7. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of security cheque against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
37. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment of amount to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to proved the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.7 is the cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability.
From the evidence of P.W.1 and also cheque return memos at Ex.P.8 and 9 it is established that the cheque C.C.NO.4641/2019 31 was dishonored for the reasons "Insufficient Funds'' in the account of the accused. A legal notice being issued as per Ex.P.10 within one month from the date of dishonour of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice sent by the complainant on his address. But he has given reply to the said notice. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
38. It is not the contention of the accused that thereafter he has repaid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed before this court after the accused failed to repay the cheque amount. Even he did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of the Hon'ble Supreme C.C.NO.4641/2019 32 Court in Indian Bank Association V/s Union of India and others, reported in (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he want to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
39. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make C.C.NO.4641/2019 33 out a probable case on his behalf.
40. As per the version of the accused is that the accused has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that the accused has issued the cheque-Ex.P.7 and even after he has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused has issued the cheque-Ex.P.7 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him that Ex.P.7 was the blank cheque given to the complainant for the purpose of security at the time of receiving the chit amount. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
C.C.NO.4641/2019 34
41. PW.1 in his evidence has specifically deposed that the accused is one of the member of the chit group SFTL-1 on 29.11.2012 for a sum of Rs.40,00,000/- and the duration of the said chit was 40 months comprising of 40 installments with monthly subscription of Rs.1,00,000/-. The termination of the said chit was on 10.03.2016. Further deposed that the accused being the member of the said chit group, was assigned with group code SFTL-1/8. Further before the termination of the said chit group, the accused has availed the benefit and he was one of the successful bidder. Accordingly the accused received the amount from the complainant on different dates. After the receipt of the same, the accused was required to pay the monthly subscription of Rs.1,00,000/- till the date of termination of the said chit group. The accused was negligent in paying the monthly subscription to the complainant and used keep on postponing the same even after termination of the chit group. It is further deposed that as on June 2018, the total outstanding due from the accused was at Rs.24,17,325/- and an intimation letter was given to the accused on 14.06.2018. Thereafter the accused had issued the cheque in question in favour of the complainant. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, the complainant is a private limited chits company and the accused was a C.C.NO.4641/2019 35 subscriber to the complainant company, this is not disputed by the accused. The accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused has failed to probables his defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
42.POINT NO.3 AND 4: In order to avoid repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.7 being his cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored for the reasons funds insufficient in the account of the accused, when it was presented by the complainant before the Bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused has issued three blank signed cheques in favour of the complainant for the purpose of C.C.NO.4641/2019 36 security and why he has not produced any documents. After service of notice the accused has not paid the said amount. Hence, the present complaint came to be filed before the court on 01.10.2018. While discussing the point No.1 and 2, this court has already observed that the complainant's have proved that the cheque- Ex.P.7 was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
43. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant's have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C., C.C.NO.4641/2019 37 the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.24,25,000/- (Rupees twenty four lakhs twenty five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.24,00,000/- (Rupees twenty four lakhs only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.25,000/- (Rupees twenty five thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 24th day of June 2024) Digitally signed by SOUBHAGYA B SOUBHAGYA BHUSHER B BHUSHER Date:
2024.06.25 17:00:49 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
C.C.NO.4641/2019 38 ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Ramachandra.H. List of documents marked on behalf of the complainant:
Ex.P.1 :Board resolution. Ex.P.2 :Authorization Ex.P.3 :Commencement Chit Sanction letter. Ex.P.4 :Chit agreement. Ex.P.5 :Chit ledger account. Ex.P.6 :Intimation letter. Ex.P.7 :Cheque. Ex.P.7(a) :Signature of the accused. Ex.P.8 & 9 :Bank endorsements. Ex.P.10 :Office copy of legal notice. Ex.P.10(a) :Postal receipt. Ex.P.12 :Reply notice. ExP.13 :Complaint. Ex.P.14 :35 Original duplicate receipts. Ex.P.15 :35 original office copy of receipts.
List of witnesses examined on behalf of the accused:
DW.1 : Mr.Umesh.
List of documents marked on behalf of the accused:
Ex.D.1 : PW.1 signature document.
Ex.D.2 : Receipt.
Ex.D.3 to 39 : 37 receipts.
Digitally
signed by
SOUBHAGYA
SOUBHAGYA B BHUSHER
B BHUSHER Date:
2024.06.25
17:00:56
+0530
XXVIII Addl. Chief Metropolitan
Magistrate, Bengaluru.
C.C.NO.4641/2019
39
24.06.2024 (Judgment pronounced in the Open Court Vide
Separate Sheet)
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.24,25,000/- (Rupees twenty four lakhs twenty five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.24,00,000/- (Rupees twenty four lakhs only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.25,000/- (Rupees twenty five thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.