Bangalore District Court
Sri.S.P.Jayaram vs Sri. K.Kemparaj on 22 December, 2021
1
C.C.No. 25070/16 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 22nd day of December, 2021
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.25070/2016
Complainant : Sri.S.P.Jayaram,
Aged about 36 years,
S/o. Sri.Puttaiah,
Residing at No.60,
Hari Nilaya, K.E.B. Road,
Behind Shanimahatma Temple,
V.N.Post, Magadi Main Road,
Anjananagar,
Bangalore 560 091.
Rep. by Sri.Ravi Prakash, Adv.,)
Vs
Accused : Sri. K.Kemparaj,
S/o. Kempaiah,
Aged about 33 years,
R/at Kalapalya,
Tavarekere Post,
Huliyurdurga Hobli,
Kunigal Taluk,
Tumkur District 562 123
(Rep. by Sri. Muralidhar.S, Adv.,)
2
C.C.No. 25070/16 J
Case instituted : 26.10.2016
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 22.12.2021
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he and the accused were close relatives and in order to improve the family status of the accused and to purchase an auto and also to fulfil the family commitment, accused approached him in the month of September/October 2011 for a hand loan of Rs.5 Lakhs and considering the need and necessity and also the urgency of the accused, he paid sum of Rs.1,31,000/= to the accused by way of two cheques dated: 15.3.2011 bearing Nos.087739 for a sum of Rs.60,000/= drawn on Axis Bank, Basaveshwaranagar Branch, Bengaluru and another 3 C.C.No. 25070/16 J cheque bearing Nos.292769 dated: 10.12.2011 for a sum of Rs.71,000/= drawn on Thyagaraja Co operative Bank, Kamakshipalya Branch, Bengaluru and the remaining amount of Rs.3,69,000/= was given to the accused by way of cash in the month of December 2011 and the accused promised to return the said amount within 6 months. The complainant further contends that, even after lapse of 6 months, the accused did not shown any interest to return the amount, after continuous and persistent demand made by him to the accused to repay the amount, in the 2nd week of June 2013, the accused issued a post dated cheque dated: 26.6.2013 bearing No.566023 for Rs.5 Lakhs drawn on Vijaya Bank, Halevoor Branch, Kunigal Taluk, Tumkur district in his favour. and believing the words of the accused, he presented the said cheque for encashment through his banker ie M/s.Bank of India, Basaveshwaranagar Branch, Bangalore on 26.6.2013 but the said cheque was came to be returned dishonoured as "Funds Insufficient", vide bank endorsement dated: 27.6.2013, thereafter he got issued legal notice to the accused 6.7.2013 4 C.C.No. 25070/16 J through RPAD calling upon him to pay the cheque amount to him within 15 days from the date of the receipt of the said legal notice and the said notice was duly served upon the accused on 15.07.2013, inspite of that, accused has not come forward to comply the demand made in the notice. Hence the complainant has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
3. Before issuing process against the accused, the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his evidence, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.6, i.e., Original Cheque dated:26.6.2013 as per Ex.C.1, the signature on the said cheque identified by P.W.1 are that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C.2, office copy of the Legal Notice as per Ex.C.3, Postal Receipt as per Ex.C.4, Postal acknowledgement as per Ex.C.5.
5C.C.No. 25070/16 J
4. Primafacie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
5. As per the direction of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the Accused, as he intended to set out his defence, the case came to be posted for the Crossexamination of complainant.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence subsequently he has not led his rebuttal evidence.
7. The learned counsel for the complainant has not addressed arguments on behalf of the 6 C.C.No. 25070/16 J complainant and at the first instance the learned counsel for the accused has also not addressed arguments but subsequently filed written argument on behalf of the accused. The learned counsel for the accused in the written argument relied upon the decisions., ie 1) Crl.Appeal No.2043/2013 decided by Hon'ble Apex Court 2) AIR 2019 SC 1983 in the case of Basalingappa V/s. Mudibasappa, 3) 2020 (3) KCCR in the case of Vishal V/s. Prakash Kadappa Hegannawar; 4) 2007 Cri.L.J 3846 Andra Pradesh High Court in the case of G.Veeresham V/s. Shivashankar and Another., 5) AIR 2008 SC 1325 in the cse of Krishna Janardhana Bhat V/s. Dattatreya G. Hegde and perused the materials produced by the complainant and accused.
8. On the basis of complaint, evidence of complainant and documents and having heard the arguments of learned counsel for the accused, the following points that are arise for consideration are: 7 C.C.No. 25070/16 J
1. Whether the complainant proves that the accused has issued cheque bearing no. 566023 dated:
26.6.2013 for Rs.5,00,000/= drawn on Vijaya Bank, Halevoor Branch, Kunigal Taluk, Tumkur District, Bangalore to discharge legally recoverable debt to the complainant and when the complainant has presented a cheque for encashment through his banker but the said cheque has been dishonoured for the reasons "Funds Insufficient" on 27.06.2013 and the complainant issued legal notice to the accused on 06.07.2013 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
9. The above points are answered as under:
Point No.1: In the Affirmative Point No.2:As per final order for the following:
REASONS
10. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal 8 C.C.No. 25070/16 J jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act presupposes three conditions for prosecution of an offence which are as under:
1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced 9 C.C.No. 25070/16 J cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
11. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 a presumption shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are 10 C.C.No. 25070/16 J required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
12. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, he and the accused were close relatives and in order to improve the family status of the accused and to purchase an auto and also to fulfill the family commitment, accused approached him in the month of September/October 2011 for a hand loan of Rs.5 Lakhs and considering the need and necessity and also the urgency of the accused, he paid sum of Rs.1,31,000/= to the accused by way of two cheques dated: 15.3.2011 bearing Nos.087739 for a sum of Rs.60,000/= drawn on Axis Bank, Basaveshwaranagar Branch, Bengaluru and another cheque bearing Nos.292769 dated: 10.12.2011 for a sum of Rs.71,000/= drawn on Thyagaraja Co 11 C.C.No. 25070/16 J operative Bank, Kamakshipalya Branch, Bengaluru and the remaining amount of Rs.3,69,000/= was given to the accused by way of cash in the month of December 2011 and the accused promised to return the said amount within 6 months. The complainant/PW.1 further testified that, even after lapse of 6 months, the accused did not shown any interest to return the amount, after continuous and persistent demand made by him to the accused to repay the amount, in the 2nd week of June 2013, the accused issued a post dated cheque dated:
26.6.2013 bearing No.566023 for Rs.5 Lakhs drawn on Vijaya Bank, Halevoor Branch, Kunigal Taluk, Tumkur district in his favour. and believing the words of the accused, he presented the said cheque for encashment through his banker ie., M/s.Bank of India, Basaveshwaranagar Branch, Bangalore on 26.6.2013 but the said cheque was came to be returned dishonoured as "Funds Insufficient", vide bank endorsement dated: 27.6.2013. The complainant/PW.1 further testified that, thereafter he got issued legal notice to the accused 6.7.2013 through RPAD calling upon him to pay the cheque 12 C.C.No. 25070/16 J amount to him within 15 days from the date of the receipt of the said legal notice and the said notice was duly served upon the accused on 15.07.2013, inspite of that, accused has not come forward to comply the demand made in the notice.
13. In support of his evidence, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.6, i.e., Original Cheque dated:26.6.2013 as per Ex.C.1, the signature on the said cheque identified by P.W.1 are that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C.2, office copy of the Legal Notice as per Ex.C.3, Postal Receipt as per Ex.C.4, Postal acknowledgement as per Ex.C.5.
14. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not in dispute by the accused that, the cheque in question belong to his account and signature found at Ex.C.1(a) is that of his signature. It is also not in dispute that, the cheque in question was presented to the encashment 13 C.C.No. 25070/16 J within its validity period and the said cheque has been returned as dishonoured for want of sufficient funds as per the returned memo issued by the concerned bank i.e Ex.C.2 dt: 27.06.2013,, hence as a matter on record it is proved by the complainant that, the cheque in question was dishonoured for want of sufficient fund.
15. The accused in his defence has specifically denied the service of legal notice upon him. The complainant in order to prove the service of notice upon the Accused, has produced the documents i.e copy of the legal notice, postal receipt, and postal acknowledgement which are at Ex.C.3 to C.5 respectively. On perusal of the Ex.C.3 it appears that, the complainant has issued legal notice dt:
6.7.2013 within 30 days from the date of receipt of endorsement of the bank and the said notice was sent through RPAD and the said RPAD was duly served on the accused. The counsel for the accused during the course of cross examination of the complainant has suggested that, no notice has been issued to the accused and same has not been served on him but the complainant denied the suggestion 14 C.C.No. 25070/16 J and stated that, the accused has received the legal notice. Except the said suggestion nothing has been produced be fore the court to show that, the legal notice ie Ex.C.3 sent through RPAD was not served upon the accused. In addition to that, accused has not denied the fact of sending the legal notice by the complainant through RPAD and same has been received by affixing signature on Ex.C.5 ie postal acknowledgement and also not denied the documents which are produced by the complainant and same are issued by the concerned postal authorities and it is not the defence of the accused that, the complainant got created Ex.C.5 by colluding with the postal authorities and even the accused has not examined any postal authorities to prove that, Ex.C.5 is got created by the complainant , therefore mere making a suggestion that no notice has been issued to the accused and not served on the accused does not holds any water in the defence. In addition to that, the accused though he has denied service of notice upon him but has not denied his name and address shown by the complainant in Ex.C.3 to C.5 and even accused 15 C.C.No. 25070/16 J has not produced any documents or led rebuttal evidence to disprove his address as shown by the complainant in Ex.C.3 to C.5, therefore in view of non denial of name and address of the accused in Ex.C. 3 to C.5 it can be held that, the legal notice caused by the complainant was sent to the correct adders of the accused by RPAD, in such circumstances, it can be held that, the notice sent by the complainant to the correct address of the Accused is presumed to have been served on him U/s.27 of General Clauses Act. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. Lingamma, wherein the Hon'ble High Court held that, "Notice sent at correct address returned unclaimed - is deemed to be served. It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s.
Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, "notice sent by registered post with acknowledgement to a 16 C.C.No. 25070/16 J correct addressservice of notice has to be presumed". Therefore in view of the principles of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on him since in this case also the complainant has issued notice to the accused to his correct address through registered post and the said notice was served on the accused, hence the notice issued by the complainant through registered post is held to be proper. In addition to that, it is relevant here to refer the decision reported in 2007 AIR SCW 3578 in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and another., wherein the Hon'ble Apex court held that " the drawer of the cheque is permitted to deposit the cheque amount within 15 days from the date of his appearance before the court in pursuance of the service of summons on him and in such situation, his defence of non service of the legal notice cannot be available to him'. Hence, in view of the said principles of law, even for sake of discussion, though there is no cogent and reliable 17 C.C.No. 25070/16 J documentary proof to substantiate the claim of the complainant with regard to address of the Accused to show there is due service of the legal notice on the Accused, in view of settled position of law by virtue of the above said decision of Hon'ble Apex Court of India, the Accused is not entitled to the technical defence of the alleged non service of the legal notice. Therefore, the argument convassed by the learned counsel for the accused that, the notice issued by the complainant was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable and are not sustainable in law. Hence, the complainant has complied all the mandatory requirements as required U/s.138(a) to (c) of N.I.Act and initial presumptions can be drawn in favour of the complainant as required U/s.118 (a) and 139 of N.I.Act.
16. The accused in his defence has denied the lending of loan amount of Rs.5,00,000/ by the complainant to him and also issuance of cheque in question in favour of the complainant to discharge the loan amount and the accused has also disputed 18 C.C.No. 25070/16 J financial capacity of the complainant to lend the loan amount in question. In this regard, the accused has cross examined the complainant in length but nothing has been elicited by the accused to discard or discredit the evidence of complainant. The accused during the cross examination of complainant himself suggested that, the complainant is proprietor and running industry in the name of M/s.Vinayaka Industries and Manufacturing Arcylic Gift Items and also suggested that, accused is owner cum driver of Auto and he used to supplying the manufacturing gift items from the complainant's factory to the customers by his auto on monthly rental basis and also admitted that, he has received an amount of Rs.60,000/ and Rs.71,000/ from the complainant by way of cheque but he denied the receipt of Rs.3,69,000/ from the complainant by way of cash, hence in view of admitted facts by the accused ie., complainant is the proprietor and running M/s.Vinayaka Industries and also receipt of Rs.1,31,000/ from the complainant itself goes to show that, the complainant is having sufficient funds and capable 19 C.C.No. 25070/16 J to lend the loan amount in question, therefore though the accused has questioned financial capacity of the complainant but the admitted facts of the accused itself negativates the said defence.
17. It is also relevant here to mention that, the complainant during his cross examination has admitted that, at the time of lending of the loan amount to the accused he has not collected any documents from the accused like pronote and other documents for having lend the loan amount to the accused but the complainant specifically stated that, he had not collected the documents from the accused since the accused is his relative and denied the suggestion that, he had not lend the loan amount to the accused since he has not collected the documents. It is true that, the complainant has admitted in his cross examination that, he has not mentioned date of lending of Rs.3,69,000/ by way of cash to the accused in his complaint but the complainant has stated that, he has stated the date of lending of Rs.71,000/ to the accused and on the same day he has paid Rs.3,69,000/ to the accused , therefore he has not stated the date of lending of 20 C.C.No. 25070/16 J Rs.3,69,000/ to the accused by way of cash, therefore though the complainant has not stated the date of lending of cash amount of Rs.3,69,000/ to the accused in the complaint but the complainant has clearly stated that, he has paid the cash amount of Rs.3,69,000/ on the date of lending of Rs.71,000/ by way of cheque to the accused. It is also true that, the complainant admitted that, there was no impediment for him to pay Rs.3,69,000/ to the accused by way of cheque or to transfer from the bank but mere paying of Rs.3,69,000/ in cash does not mean that, the complainant has not lent the loan amount to the accused. In addition to that, it is also important here to mention that, mere non mentioning of date of lending of Rs.3,69,000/ to the accused by way of cash in the complaint and evidence of the complainant is not fatal to the claim made by the complainant, as it is already stated in the above that, complainant has complied the mandatory requirements as required U/s.138(a) to
(c) of N.I.Act and initial presumptions can be drawn infavour of the complainant as required U/s.118(a) and 139 of N.I.Act. No doubt, the complainant has 21 C.C.No. 25070/16 J not mentioned in his complaint and evidence with regard to date of lending of cash payment of Rs.3,69,000/ and the said omission on the part of the complainant might be a lapse only, however it cannot be a ground to disbelieve the entire case of the complainant. If this court were to doubt the case of the complainant only on the because he had not pleaded the above fact ie., the date of lending of cash amount of Rs.3,69,000/ paid to the accused, then the very purpose of inserting the presumptions u/s.118(a) and 139 of N.I.Act would become purposeless and futile, therefore when the statute has already provided the presumptive value in respect of a cheque which is admittedly issued by the accused to the complainant, the court cannot interpret the other facts in a way round so as to takes away the very object of inserting such presumptions in the statue. Therefore there are no reasons for this court to doubt the case of the complainant only by relying on the facts that, complainant has not pleaded the date of lending of cash amount of Rs.3,69,000/. Apart from that, as it is already held in the above that, the complainant 22 C.C.No. 25070/16 J has produced sufficient documents to show about his financial capacity.
18. It is true that, the accused during the cross examination of the complainant has suggested that, since the complainant is doing bank transaction and he is aware that, if any amount of more than Rs.20,000/ was lent as a loan and the same shall have to be given by way of cheque but the complainant stated that, there were no such rule as on the date of lending of the loan amount to the accused. It is also true that, the complainant in his cross examination has admitted that, he is an income tax payee and has not produced his income tax records before the court and has declared his income and expenditure in his I.T. returns and has not declared the lending of loan amount in question in his I.T. returns. The learned counsel for the accused at para No.12 of written argument stated that, the complainant admits that, he being an income tax assessee but has not at all shown the loan transaction in his income tax returns and he has not produced his income tax returns before the court , therefore if really the complainant advanced a 23 C.C.No. 25070/16 J loan to the accused he would have produced the said documents. On careful considering the arguments canvassed by learned counsel for the accused and admitted facts by the complainant in his cross examination it is relevant here to mention that, though the complainant admitted that, he has not paid the cash amount of Rs.3,69,000/ to the accused by way of cheque or bank transfer but the law does not mandates to pay the loan amount to the accused only through cheque or bank transfer even if the loan amount paid is more than Rs.20,000/ in cash that itself would not invalidates the transaction in question. In this regard it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2008 (5) KCCR 3371 in a case of Kempanarasimhaiah Vs. P. Rangaraju and others., wherein it is held that, "on careful reading of the above observations and also all other observations in the said judgment I could not find the Hon'ble Supreme Court having laid down that, the transactions in contravention of the said provision of Income Tax Act could be termed as the transactions 24 C.C.No. 25070/16 J opposed to the public policy so as to bring within the ambit of nonenforceable transactions. The Hon'ble Supreme Court has not laid down in the said decision that, the transactions of this nature could be termed as opposed to pubic policy and as such the same would be became legally not enforceable." Hence in the light of principal of law laid down by the Hon'ble High Court of Karnataka in the above said decision it is for the income tax authority to take the action against the person who had transacted in contravention to Sec.269 SS of Income Tax Act, but the transaction cannot be termed as opposed to public policy and legally not enforceable. In another decision of Hon'ble Bomby High Court in Crl. Appeal No.322 of 2017 decided on 25.11.2020 in a case of Pushpa Sanchala Kothari Vs. Aarti Uttam Chavan wherein it is held that, Negotiable Instrument Act 1881, Sec.138 - Income Tax Act 1961, Sec.269 SS - Criminal Procedure Code 1973, Sec.378 (4) - Cheque dishonored - Appeal against acquittal - the complainant has not 25 C.C.No. 25070/16 J shown the transaction in her income tax returns
- no provision in Income Tax Act which makes an amount not shown in the Income Tax Returns unrecovarable - Sec.269 SS of Act 1961, does not declare all transactions of loan, by cash in excess of Rs.20,000/ as invalid, illegal or null and void - the accused cannot take benefit of such infraction by complainant to show the transaction in income tax returns - The judgment of acquittal rendered by the learned Trial Court is perverse - The impugned judgment needs to set aside - Appeal deserves to be allowed." Hence in the light of principal of law laid down by the Hon'ble High Court of Bombay, the defence of the accused in the present case cannot be acceptable one as under Sec.269 SS of the Income Tax Act does not declare all the transactions of the loan by cash in excess of Rs.20,000/ as invalid, illegal or null and void and the accused cannot take benefit of the same to escape from the liability in question. Therefore for the above said reasons though the complainant has paid the cash amount 26 C.C.No. 25070/16 J of Rs.3,69,000/ to the accused that itself cannot be termed as the transaction in question is not enforceable.
19. In respect of admissions of the complainant with regard to non declaration of loan transaction in question in his I.T. returns and non production of the I.T. return documents, though the complainant has not produced the I.T. returns documents, but only on the said admissions of the complainant it cannot be held that, the transaction in question becomes invalidate. In this regard, it is necessary here to refer the decision of our Hon'ble High court of Karnataka reported in 2019(1) Kar. L.R.185 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat in the said case the Hon'ble High Court of Karnataka held that " Negotiable Instruments Act, 1881 - Sections 138 and 139 - Endorsement 'payment stopped by drawer' - The trial court in the instant case, merely considered a suggestion made from the Accused side in the crossexamination of PW1 that the complainant was an income tax assessee and 27 C.C.No. 25070/16 J that he has not declared the alleged loan transaction in his returns and disbelieved the case of the complainant that too, ignoring that legal presumption under section 139 of the N.I. Act, was operating in favour of the complainant For these reasons, it has to be held that the complainant has beyond reasonable doubt proved the guilt of the Accused punishable under Section 138 of the N.I. Act. As such, the impugned judgment of acquittal passed by the trial court deserves to be set aside and respondent/Accused is liable to be convicted for the offence punishable under Section 138 of the N.I. Act. Hence in view of the principles of law laid down by the Hon'ble High court of Karnataka in the above referred decision, in the present case the complainant has admitted that, he is an income tax assessee and has not declared transaction in question in his I.T. returns but as it is already held in the above that, the complainant has discharged his primary burden by complying the mandatory provisions of Sec.138 of N.I. Act, therefore it is for 28 C.C.No. 25070/16 J the accused to rebut the presumption existing infavour of the complainant U/s.139 of Negotiable Instruments Act. Apart from that, the admissions of the complainant with regard to non declaration of transaction in question in his I.T. returns, could not by itself draw an adverse inference and to hold that, there was no existence of legally enforceable debt or the presumption as envisaged U/s.139 of N.I.Act is successfully rebutted by the accused. In another decision of Hon'ble Madhya Pradesh High Court decided in C.R.R No.5263/2018 dated: 7.3.2019 in the case of Smt. Ragini Gupta Vs. Piyush Dutt Sharma Gwalior., wherein the Hon'ble High Court held that, "mere non filing of income tax return would not automatically dislodge the source of income of the complainant and non payment of income tax is a matter between the revenue and assessee and if the assessee has not disclosed his income in the income tax return, then the income tax department is well within its right to reopen the assessment of income of the assessee and to take action as per 29 C.C.No. 25070/16 J provisions of Income Tax Act, however non filing of income tax return by itself would not mean that, the complainant had no source of income and thus no adverse inference can be drawn in this regard only because of absence of income tax return". Hence in view of the principles of law laid down by Hon'ble High Court of Madya Pradesh in the above said decision in the present case also though the complainant has admitted that, he is an income tax assessee and has not declared in his I.T. returns that itself would not automatically dislodge the source of income of the complainant. Therefore the admissions of the complainant which are elicited in his cross examination are not helpful for the accused to prove his defence that, in view of non declaration of transaction in question in his I.T. returns that itself sufficient to hold that, the complainant has no source of income cannot be acceptable one and the arguments canvassed by the learned counsel for the accused cannot be acceptable one.
20. The learned counsel for the accused during 30 C.C.No. 25070/16 J the cross examination of the complainant has suggested that, there is difference in ink in respect of signature found on the cheque and rest of the contents of the cheque and also suggested that, the complainant himself got filled the contents of cheque in his own hand writing but the said suggestions were denied by the complainant. Though the accused has suggested that, there is difference in ink in respect of signature and rest of the contents of the cheque in question but it is an admitted fact that, the cheque in question issued by the accused and the cheque belongs to the account of the accused and signature found on the cheque is that of his signature and the accused has issued the cheque in question in favour of the complainant, in such circumstances it cannot be held that, the cheque in question has not been issued by the accused. Therefore the defence of the accused cannot be acceptable one, even for sake of discussion the suggestions are to be taken into consideration, in such circumstances also it can be held that, once signature on the negotiable instrument act is admitted sec. 20 of N.I. Act comes 31 C.C.No. 25070/16 J into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he/she had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that " a reading of sec.20 of the act which is extracted above reveals that, the words used are ' either wholly blank or having written therein an incomplete negotiable instrument' . The instrument may be wholly blank or incomplete in a particular in either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so vide that, the party so signing is bound to be a holder in due course. Promissory notes are often executed in the name of the payer and left unfilled to be afterwards filled by the actual 32 C.C.No. 25070/16 J holder, the object being to enable the owner to pass it off to another without incurring the responsibility as an endorser. Thus, it is seen that, person in possession of an incomplete instrument in maternal particulars has the authority prima facie to fill it and thus the executants becomes liable to pay the amount due'. In another decision of Hon'ble High Court of Madras reported in 2005 (1) DCR 85 in the case of P.A.Thamatharan Vs. Dalmia cements (B) Ltd., wherein it is held that " Negotiable Instrument Act 1991 - Sec. 138 - dishonour of cheque - plea
-body of cheque was not written by Accused - held it is not mandatory and no law prescribes that, the body of cheque should also be written by the signatory to the cheque, a cheque could be filled up anybody and if it is signed by the account holder of the cheque'. In another decision reported in 1996 Cri. L.J.3099( Guj) :
1997 II Crimes : 1997 (I) CCR 603 wherein the Hon'ble High Court held that "no law provides 33 C.C.No. 25070/16 J that, in any case of any negotiable instrument entire body has to be written by maker or drawer only". It is further held that, " when a cheque is admittedly issued blank are incomplete and there is no dispute regarding the signature, it can be presumed that, there is an implied consent for filling up the cheque as when requried by holder and get it encashed. Complaint of dishonour of such cheque cannot be held to be beyond the scope of penal provisions of Sec.138". In another decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of Hon'ble High Court of Karnataka at 34 C.C.No. 25070/16 J Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Appeal No.1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a 35 C.C.No. 25070/16 J inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by 36 C.C.No. 25070/16 J conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law of Hon'ble Apex court of India and also Hon'ble High Court of Karnataka and Madras referred above, In the present case the Accused has admitted the signature on Negotiable Instrument i.e. cheque and he also admitted issuance of the cheque, it is prima facie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or fabricated the cheque in question given by him and the defence of the Accused cannot be acceptable one as the instrument i.e., cheque in question cannot be rendered unenforceable merely because the contents have been filled by different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it. Therefore the defence of the accused that, except the signature on the subject cheque and has not filled up the rest of the contents in it cannot 37 C.C.No. 25070/16 J be acceptable one.
21. In addition to that, even for sake of discussion if it is assumed that, Accused has given cheque in question without mentioning the name of the payee to the complainant in such circumstances also it attracts the penal liability as contemplated U/s.138 of N.I. Act. In this regard, it is relevant here to refer decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble Apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of 38 C.C.No. 25070/16 J presumed fact." In the present case though the Accused has denied the contents of the cheque in question except his signature but he did not proved his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I.Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden by complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of 39 C.C.No. 25070/16 J Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In view of the principles of law laid down as above, even if it is assumed that, the cheque was issued as blank cheque, in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the said cheque has been issued towards discharge of legally recoverable debt, 40 C.C.No. 25070/16 J therefore for the above said reasons the arguments canvassed by the learned counsel for the accused are not sustainable in law and cannot be acceptable.
22. It is also relevant here to mention that, during the cross examination of complainant the accused has suggested that, accused is having two vehicles bearing registration No. KA 05 AC 6215 and KA4 1143, therefore there was no necessity for him to borrow the loan amount from him but the complainant has denied the said suggestion. If really the accused owned two vehicles as suggested to the complainant and there was no need for the accused to borrow the loan amount for purchase of the vehicle as stated by him, definitely the accused would have produced the documentary evidence to show that, he owned two vehicles as on the date of transaction in question, therefore there was no need for him to purchase vehicle and obtain loans, but no such documents have been produced by the accused, mere suggestions are not sufficient to hold that, the accused owned two vehicles in his name and there was no necessity for him to obtain the loan amount from the complainant. Therefore on 41 C.C.No. 25070/16 J entire perusal of the cross examination of the complainant nothing has been elicited to disbelieve or discard the evidence of the complainant or to accept the defence of the accused. In addition to the above, it is also relevant here to mention that, the learned counsel for the accused in the written argument at para No. 9 to 16 has specifically contended that, the complainant has admitted that, the exact date of loan has not stated in the legal notice, complaint and in his evidence and has no impediment to get the security documents for the loan amount in question from the accused and he has not made any agreement between him and the accused in respect of the loan amount and has not produced his bank statement to show that, on what date he has withdrawn the amount of Rs.3,69,000/ from his bank and paid to the accused and has admitted that, he has not stated the exact date of issuance of cheque in question in the complaint and evidence and in the legal notice, therefore the complainant has failed to prove that, he has lend the loan amount of Rs.5 Lakhs to the accused and in turn the accused has issued the cheque in question 42 C.C.No. 25070/16 J towards discharge of the loan amount. So far as considering the written argument submitted by the learned counsel for the accused it is relevant here to mention that, as it is already held in the above that, the complainant has complied the mandatory requirements as required U/s.138(a) to (c) N.I.Act by producing oral and documentary evidence and the accused has also admitted that, the cheque in question belongs to his account and the signature found on cheque in question is that of the signature of the accused and the cheque in question issued in favour of the complainant. It is also proved by the complainant that, the cheque in question has been presented to the bank within its validity period and same has been dishonored for want of sufficient funds and thereafter the complainant got issued legal notice to the accused and in turn the said notice was served on the accused, despite of that, the accused has not issued reply to the said notice, in such circumstance even in the absence of documentary evidence with regard to source of funds, a presumption can be drawn in favour of the complainant with regard to existence of debt or 43 C.C.No. 25070/16 J legally recoverable debt. In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was an adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However 44 C.C.No. 25070/16 J such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque is statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15032018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that "
When such a presumption is drawn, the facts relating to the want of documentary evidence in 45 C.C.No. 25070/16 J the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for 46 C.C.No. 25070/16 J an offence U/s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt". It is also held that, " the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of 47 C.C.No. 25070/16 J consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble Apex Court of India reported in ICL 2021(2) SC 529 in the case of M/s Kalamani Tex Vs. P. Balasubramanian, dt:
10.02.2021, wherein the Hon'ble Apex Court held that, "once the accused had admitted his 48 C.C.No. 25070/16 J signatures on the cheque and deed, the trial court ought to have presumed that, the cheque was issued as consideration for legally enforceable debt." In another decision of Hon'ble Apex Court of Indian in Crl. Appeal No.132/2020 in the case of D. K. Chandel Vs. M/s Wockhardt (L) wherein it is held that, "Production of account books / cash book may be relevant in the civil court, may not be so in the criminal case filed under Sec.138 of N.I. Act while restoring the trial court judgments, the High Court observed that "the reason given by the lower Appellate Court that, he did not bring the cash book or order book etc., could well be understood, if civil suit is tried." But may not be so in the criminal case filed under Sec.138 of N.I. Act. This is because of presumption raised in favour of holder of cheque. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant 49 C.C.No. 25070/16 J proved that, the cheque in question belongs to the drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, presumptions U/s.118(a) and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to his account and signature appearing on the cheque is that of his signature, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act. Therefore, for the above said reasons the arguments canvassed 50 C.C.No. 25070/16 J by the learned counsel for the accused that, the complainant has not produced the documents to show that, he has lent an amount of Rs.5,00,000/ to the accused and the complainant has not produced the documents to prove that, complainant was having financial capacity to lend the money and has lent the loan amount to the accused and has not examined any witness to prove the claim of the complainant cannot be acceptable one. The defence taken by the Accused appears that, the complainant has to prove his claim by producing his evidence as if it is required for proving of his debt before the Civil Court, but same cannot be permissible in a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decision, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question was drawn for consideration as the Accused has admitted the cheque in question belongs to him and signature found on the cheque in question is that of his signature. Therefore for the above said reasons and findings given by this court, the arguments 51 C.C.No. 25070/16 J canvassed by the learned counsel for the accused in the written argument cannot be acceptable one and are not sustainable in law and on careful reading of the principles of law laid down by the Hon'ble Apex court of India and High Court of Karnataka and Andra Pradesh relied upon by the learned counsel for the accused with due respect to the principles law laid down by the Hon'ble Apex Court and High Courts are not applicable to the defence of the accused in the present case, since in the present case the complainant though he has not stated the date of lending of Rs.3,69,000/ in his complaint and evidence but in the cross examination he has clearly stated on which date he has lend the said amount to the accused and in the present case though the legal notice was served upon the accused but he did not issued any reply to the said notice and the facts and circumstances of the present case and the facts and circumstances of the decided case relied upon by the learned counsel for the accused are not one and the same.
23. It is the specific defence of the accused that, the complainant is proprietor of M/s. Vinayaka 52 C.C.No. 25070/16 J Industries and Manufacturing Arcylic Gift Items and he was brought the raw materials and manufacturing the gift items and the gift items were supplying to his customer and the accused is a owner cum auto driver and was supplying gift items from the complainant factory to his customers by his auto on monthly rental basis and the amount of Rs.60,000/ and Rs.71,000/ paid by the complainant through cheque to the accused is a auto rent amount not as a loan, except the said amount complainant has not at all advanced further loan and when the accused was supplying the materials from the complainant's company to his customers, the complainant has obtained the disputed signed blank cheque for the purpose of security to the said business and subsequently the accused demanded to raise auto rent but the complainant produced the same then the accused stopped supply of manufacturing items of the complainant to his customer and subsequently many times the accused approached the complainant and requested him to return signed blank cheque issued by him as security but the 53 C.C.No. 25070/16 J complainant informed him that, cheque was misplaced in his office and same will be returned when it was traced out but subsequently has not return the cheque and by misusing blank signed cheque has filed this false complaint. In this regard, the learned counsel for the accused has made suggestions to the complainant but the complainant has denied the said suggestions, except the suggestions nothing has been elicited during the cross examination of the complainant to believe the defence of the accused.
24. In order to rebut the presumptions raised in favour of the complainant, the Accused has not entered into witness box and examined before the court, except the suggestions made to the complainant during the course of crossexamination, the Accused has not produced any documentary proof to show that, the cheque in question was given or handed over to the complainant as security towards supply of manufacturing items of the complainant's company. It is settled law that, the accused can rebut the presumption only on the 54 C.C.No. 25070/16 J basis of materials produced by the complainant even without entering into the witness box but in the present case the Accused has failed to substantiate his defence version in order to rebut the presumption available to the complainant and to prove the defense of the accused, under such circumstance, it is for the accused to disprove the case of the complainant or rebut the presumption then only the onus will be shifted on the complainant to prove his case. Admittedly the accused did not entered in to the witness box, therefore an adverse inference can be drawn against the accused that he has failed to rebut the presumption available to the complainant. Therefore it is clear that, except having denial of the case of the Complainant in the cross examination of complainant, the Accused has not taken any interest so as to prove his defence. In this regard, it is relevant here to refer a decision of Hon'ble Apex Court of India reported in "AIR 2018 SC 3173 in a case of Kishan Rao Vs. Shankargouda" wherein the Hon'ble Apex Court held that " Negotiable Instruments Act (26 of 1881), Ss. 138, 139 55 C.C.No. 25070/16 J Dishonour of cheque - Presumption as to - Accused issuing cheque of Rs.2 Lakhs towards repayment of loan to Complainant said cheque dishonoured on account of insufficiency of funds Complainant proving issuance of cheque having signatures of Accused - Accused failing to rebut presumption raised against him and no evidence led by him in his support - Acquittal of Accused by High Court in revisional jurisdiction on ground of doubt in mind of Court with regard to existence of loan, improper Accused, liable to be convicted. In another decision decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that 56 C.C.No. 25070/16 J the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt. Therefore the principles of law 57 C.C.No. 25070/16 J laid down in the above decisions are aptly applicable to the case on hand, since in this case also the complainant proved the fact that he has lent an amount of Rs.5,00,000/= to the Accused and the accused in turn issued cheque for discharge of the said amount as per Ex.C.1. The accused has also failed to enter into witness box to rebut the statutory presumption in support of his defense in such circumstances the defense taken by the accused counsel during the course of crossexamination and argument canvassed by his counsel cannot be acceptable one.
25. It is also relevant here to mention that, the accused during the course of cross examination of the complainant suggested that, he was supplying manufacturing gift items from the complainant's factory by his auto on monthly rental basis at that time the complainant had collected the cheque in dispute as blank signed cheque for the purpose of security to the said business, subsequently the accused requested to raise the auto rent then the complainant refused to raise the said rent for that, the accused stopped the supply of manufacturing 58 C.C.No. 25070/16 J items of the complainant to his customer and subsequently requested for return of his blank signed cheque but the complainant informed him that, the said cheque was misplaced and it will be returned when it was traced out but he has not return the signed blank cheque and has misused the same by filing this false case against him. As it is already held in the above that, accused has failed to prove that, the complainant had collected his signed blank cheque at the time of supplying of manufacture gift items of the complainant's company, in such circumstances the defence of the accused cannot be acceptable one. However, for sake of discussion if it is assumed that, the accused had given the cheque in question to the complainant towards security of the alleged business but after stopping the supply of manufacturing items and even after requesting the complainant of return of his cheque and complainant did not return his cheque, in such circumstances, definitely accused would have taken or initiate action against the complainant either by lodging the complaint before the police or court or at least by issuing reply to the 59 C.C.No. 25070/16 J complainant for return of his alleged blank cheque handed over to the complainant as a security or by issuing stop payment instructions to his banker, but no such efforts have been made by the Accused even after receipt of the legal notice by him and even after his appearance in this case, therefore except the bare denial of the Accused is not sufficient to hold that, he has rebutted the presumptions available to the complainant U/s.118 and 139 of the N.I. Act. It is also relevant here to mention that, the conduct of the Accused in not taking the action against the complainant for alleged misuse of the cheque in question by the complainant may leads to draw an adverse inference against him that, the Accused has not initiated any action against the complainant since the cheque in question has been issued by the Accused to the complainant towards discharge of the liability in question but not for any other reasons. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan (dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. 60 C.C.No. 25070/16 J Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt cheques allegedly issued by accused towards repayment of debt Defence of accused that 10 cheques issued towards repayment of loan back in 1995
- behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt Conviction, Proper". Hence in view of the principles of law laid down by the Hon'ble Apex Court are aptly applicable to the case on hand since in the present case also the accused has not made any efforts to get return of cheque alleged to have been given to the complainant for security towards supply of manufacturing gift items from the complainant's 61 C.C.No. 25070/16 J company, under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused that, the cheque in question issued by the accused towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted his signature and the cheque in question belongs to his account.
26. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and he has failed to explain as to how his cheque has come to the possession of the Complainant, this would also give rise to an adverse inference against him. This preposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa". In another decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the 62 C.C.No. 25070/16 J cheque entered into the hands of complainant".
Hence in the present case also the Accused has failed to explain how the cheque in question was entered into the hands of complainant. Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
27. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, he has lent a sum of Rs 5,00,000/= to the accused as a hand loan and the accused in turn has issued cheque in question i.e. Ex.C.1 to the complainant towards repayment of the hand loan, thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Funds Insufficient" and thereafter he got issued 63 C.C.No. 25070/16 J legal notice to the accused and inspite of service of the said notice, the Accused did not repaid loan amount borrowed by him, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.C.1 Cheque. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
28. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the 64 C.C.No. 25070/16 J complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following : ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.5,15,000/= (Rupees Five Lakhs and Fifteen Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.5,10,000/= (Rupees Five Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
65C.C.No. 25070/16 J The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 22nd day of December 2021).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri.S.P.Jayaram
2. List of documents exhibited on behalf of the Complainant: Ex.C.1 : Original Cheque;
Ex.C.1(a) : Signature of the Accused;
Ex.C.2 : Bank Memo;
Ex.C.3 : Office copy of the Legal Notice;
Ex.C.4 : Postal Receipt;
Ex.C.5 : Postal Acknowledgement;
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C.C.No. 25070/16 J
3. List of witness/s examined on behalf of the Accused: Nil
4. List of documents exhibited on behalf of the Accused: Nil (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
67C.C.No. 25070/16 J 22.12.2021 Case called out, Both complainant and counsel for the Complainant absent and accused, counsel for accused present Judgment pronounced,vide separate order, ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.5,15,000/= (Rupees Five Lakhs and Fifteen Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.5,10,000/= (Rupees Five Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
68C.C.No. 25070/16 J The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.