Bangalore District Court
Sri. M/S. Annapoorna Power vs M/S. V.R. Constructions on 7 April, 2021
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C.C.No. 6714/2016 J
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 7th day of April, 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.6714/2016
Complainant : Sri. M/s. Annapoorna Power
Tools,
No.27, Kadirenahalli underpass,
Bangalore 560 070.
Rep. By its Proprietor,
Sri.Channaveeraswamy
(Nagaraj)
(By Sri.D.Bhanu Pradeep, Adv.,)
Vs
Accused : 1. M/s. V.R. Constructions,
No.85, Narendra Nilaya,
Nagasandra Main Road,
T.R.Nagar,
Bangalore 560 028.
Rep. By its Proprietor,
Sri.K.V.Ranjith Kumar.
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C.C.No. 6714/2016 J
2. Sri. K.V.Ranjith Kumar,
Aged Major,
No.85, Narendra Nilaya,
Nagasandra Main Road,
T.R.Nagar,
Bangalore 560 028.
(By Sri. S.K.Mithun., Adv.)
Case instituted : 13.07.2015
Offence : U/s 138 of N.I Act
complained of
Plea of Accused : Pleaded not guilty
Final Order : Accused No.1 and 2 are
convicted
Date of order : 7.4.2021
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 is the proprietor of M/s. Annapoorna Power Tools., situated in the address shown in the cause title and his proprietorship concern is running the business of hiring the civil materials like centering 3 C.C.No. 6714/2016 J sheets, jacks, rods and other materials on a daily or monthly basis and the second accused is the proprietor of the 1st Accused proprietorship concern and being the civil contractor had approached him asking him to supply the centering materials for construction on monthly rental basis and in this regard an agreement of hiring dated: 5.10.2013 was entered into by the accused with him, accordingly the accused used to place the orders and as per the orders, he used to supply the civil materials to the construction site of the accused. The complainant further contends that, as per the agreement of hiring dated:5.10.2013 if the accused failed to return the civil materials within the time agreed, then, it was agreed that an amount of Rs.3,000/= per day would be levied as idling charges and as on 1.6.2015 the accused is due for a sum of Rs.15,38,652/= to him and he requested time and again over the phone to the accused and through letters/ notices/ emails to pay the outstanding due amount to him, finally towards the part payment of the amount due to him accused had directed him to present the two cheques bearing No.535905 and 535906, both cheques were 4 C.C.No. 6714/2016 J drawn on the Karnataka Bank, Banashankari 2 nd stage, Bengaluru, for encashment which were given at the time of entering into an agreement of hiring dated: 5.10.2013 and when he presented the aforesaid cheques for encashment through his banker, they came to be returned dishonoured as "Exceeds Arrangements" vide two bank different memos dt: 27.5.2015, thereafter he got issued a legal notice to the accused through RPAD on 11.6.2015 calling upon the accused to pay the cheques amount to him within 15 days from the date of the receipt of the said legal notice and despite the receipt of the same,the accused have neither replied nor have paid the said cheques amount to him, though accused promised to pay him amount within a week, but he did not paid the same and inspite of knowing well that, the cheques were issued in lieu of part payment of legally enforceable debt. Hence he 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, 5 C.C.No. 6714/2016 J the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments made in the complaint. In support of his evidence, P.W.1 has relied upon the documentary evidence as per C.1 to C.7, i.e, Original Cheques dated: 25.05.2015 and 21.05.2015 is as per Ex.C.1 and C.2 respectively, the signatures on the said cheques identified by P.W.1 as those of the accused as per Ex.C.1(a) and C.2(a) respectively, the Bank Memos as per Ex.C.3 and C.4 respectively, bank challans as per Ex.C.5 and C.6 respectively, the office copy of Legal Notice as per Ex.C.7, subsequently has produced the endorsement given by postal authority as per Ex.C.8, and true copy of the delivery slip as per Ex.C.9, Original Hiring Agreement dt: 5.10.2013 as per Ex.C.10, two Invoices dt: 07.10.2013 as per Ex.C.11 and C.12, Delivery Note dt: 07.10.2013 as per Ex.C.13, Quotation letter dt: 08.10.2013 issued by the accused to the complainant as per Ex.C.14, Letter dt: 28.10.2014 sent by the complainant to the accused as per Ex.C.15 and Postal receipt as per Ex.C.16. Copies of Emails as per Ex.C.17 to C.49 respectively, and certificate U/s.65(b) of Indian 6 C.C.No. 6714/2016 J Evidence Act as per Ex.C.50.
4. Primafacie case has been made out against the accused No.1 and 2 and summons were issued against them, accused No.2 in turn has appeared before the court on his behalf and also on behalf of the accused No.1 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. In view of the principles of law laid down and as per the directions 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, and the case was posted for cross examination 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 7 C.C.No. 6714/2016 J rebuttal evidence subsequently the Accused has examined as DW.1 and has produced Statement of Accounts of Karnataka Bank as per Ex.D.1 to D.3 respectively and the relevant entries as per Ex.D.1(a) to D.3(a) respectively.
7. Heard by learned counsel for the complainant and the Accused and perused the written arguments submitted by the learned counsel for the complainant and accused and the decision relied upon by the learned counsel for the accused I.e
1) MANU/KA/3848/2015 in case of Shriram transport Finance Company Implied Vs. Mahadevaiah; 2) MANU/KA/0257/2009 in case of Smt.H.R. Nagarathna Vs. Smt. Jayashree Prasad; 3) (2006) 6 SCC 39 4) AIR 1992 P& H 252 in case of Mahant Mela Ram Chela Mahant Inder Dass Vs. Shiromani Gurudwara Parbhandhak Committee, Amritsar.
8. On the basis of complaint, evidence of complainant and accused and documents the following points that are arise for consideration are: 8 C.C.No. 6714/2016 J
1. Whether the complainant proves that the accused has issued two cheques i.e. 1) cheque bearing No.535905 dt" 25.05.2015 for Rs.4,50,000/
2) cheuqe bearing No. 535906 dt:
21.05.2015 for Rs.4,50,000/ drawn on Karnataka Bank Ltd., BSK 2nd Stage Branch, Bangalore to discharge legally recoverable debt to the complainant and when the complainant has presented cheque for encashment through his banker but the said cheque has been dishonoured for the reasons "Exceeds Arrangement" on 27.05.2015 and the complainant issued legal notice to the accused on 11.6.2015 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:
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C.C.No. 6714/2016 J 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 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.10
C.C.No. 6714/2016 J
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 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 11 C.C.No. 6714/2016 J 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 required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and are 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 proprietor of complainant's proprietory concern has examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire contents of the complaint. The PW.1 testified that, he is the proprietor of M/s. Annapoorna Power Tools., situated in the address shown in the cause title and his proprietorship concern is running the business of hiring the civil materials like centering sheets, jacks, rods and other materials on a daily or monthly basis and the second accused is the proprietor of the 1 st Accused proprietorship concern and being the civil contractor 12 C.C.No. 6714/2016 J had approached him asking him to supply the centering materials for construction on monthly rental basis and in this regard an agreement of hiring dated: 5.10.2013 was entered into by the accused with him, accordingly the accused used to place the orders and as per the orders, he used to supply the civil materials to the construction site of the accused. The PW.1 further testified that, as per the agreement of hiring dated:5.10.2013 if the accused failed to return the civil materials within the time agreed, then, it was agreed that an amount of Rs.3,000/= per day would be levied as idling charges and as on 1.6.2015 the accused is due for a sum of Rs.15,38,652/= to him and he requested time and again over the phone to the accused and through letters/ notices/ emails to pay the outstanding due amount to him, finally towards the part payment of the amount due to him you had directed him to present the two cheques bearing No.535905 and 535906, both drawn on the Karnataka Bank, Banashankari 2nd stage, Bengaluru, for encashment which were given at the time of entering into an agreement of hiring dated: 5.10.2013 and when he 13 C.C.No. 6714/2016 J presented the aforesaid cheques for encashment through his banker, they came to be returned dishonoured as "Exceeds Arrangement" vide two bank different memos dt: 27.5.2015., thereafter he got issued a legal notice to the accused through RPAD on 11.6.2015 calling upon the accused to pay the cheques amount to him within 15 days from the date of the receipt of the said legal notice and despite the receipt of the same,the accused have neither replied nor have he paid the said cheques amount to him, though you promised to pay him amount within a week.
13. In support of his evidence, P.W.1 has relied upon the documentary evidence as per C.1 to C.7, i.e, Original Cheques dated: 25.05.2015 and 21.05.2015 is as per Ex.C.1 and C.2 respectively, the signatures on the said cheques identified by P.W.1 as those of the accused as per Ex.C.1(a) and C.2(a) respectively, the Bank Memos as per Ex.C.3 and C.4 respectively, bank challans as per Ex.C.5 and C.6 respectively, the office copy of Legal Notice as per Ex.C.7, endorsement given by postal authority 14 C.C.No. 6714/2016 J as per Ex.C.8, and true copy of the delivery slip as per Ex.C.9, Original Hiring Agreement dt: 5.10.2013 as per Ex.C.10, two Invoices dt: 07.10.2013 as per Ex.C.11 and C.12, Delivery Note dt: 07.10.2013 as per Ex.C.13, Quotation letter dt: 08.10.2013 issued by the accused to the complainant as per Ex.C.14, Letter dt: 28.10.2014 sent by the complainant to the accused as per Ex.C.15 and Postal receipt as per Ex.C.16. Copies of Emails as per Ex.C.17 to C.49 respectively, and certificate U/s.65(b) fo Indian Evidence Act as per Ex.C.50.
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 cheques in question belongs to the account of accused No.1 proprietary concern and the accused No.2 is the proprietor of accused No.1 and the signatures found at Ex.C.1(a) and C.2(a) are those of accused No.2. It is also not in dispute that, the cheques in question were presented to the encashment within their validity period and the said cheque has been returned as dishonoured for the 15 C.C.No. 6714/2016 J reason of Exceeds arrangement as per the returned memos issued by the concerned bank i.e Ex.C.3 and C.4 respectively, hence as a matter on record it is proved by the complainant that, the cheques in question were dishonoured for the reason of Exceeds arragement. It is also not in dispute that, the legal notice issued by the complainant as per Ex.C.7 was served upon the accused No.1 and 2. Hence, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138(a) to (c) of N.I.Act.
15. It is also not in dispute between the complainant and accused that, complainant is a proprietary concern represented by its proprietor Sri.Channaveeraswamy @ Nagaraj and it is running the business of hiring the civil materials like centering, sheets, jacks, rods and other materials on daily or monthly basis. It is also not in dispute that, the accused no.2 is the proprietor of the accused No.1 constructions and is a civil contractor. It is also not in dispute that, the accused No.2 approached the complainant requesting him to supply the centering 16 C.C.No. 6714/2016 J materials for construction on monthly rental basis. It is also not in dispute that, an agreement of hiring dt:5.10.2013 was entering into by th accused with the complainant as per Ex.C.10. It is also not in dispute that, as per Ex.C.14 the quotation dt:
05.10.2013 submitted by the accused for providing centering materials on hiring contract was approved by the complainant's concern. It is also not in dispute that, as per Ex.C.13 delivery note the centering sheets etc., were delivered to the accused.
16. It is the specific claim of the complainant proprietory concern that, as per the agreement of hiring dt: 5.10.2013 if the accused failed to return the civil materials within the time agreed then an amount of Rs.3,000/ per day would be levied as idling charges and as on 1.06.2016 the accused is due for sum of Rs.15,38,652/ to the complainant's concern and inspite of repeated requests over the phone and through letters /notices/emails to pay the outstanding amount due, the accused finally directed the complainant to present the cheques in question I.e Ex.C.1 and C.2 for encashment which 17 C.C.No. 6714/2016 J were given at the time of entering into the agreement of hiring dt: 5.10.2013 i.e., Ex.C.10 but the said cheques were presented and dishonoured for the reason of Exceeds Arrangement and thereafter he got issued legal notice to the complainant with a request to pay the cheque amount within 15 days from the date of receipt of notice, but the accused did not repay the said amount. On the other hand, it is the specific defence of the accused that, he approached the complainant for supply of centring materials on rental basis for the construction undertaken in HSR layout in the year 2012 for that, the complainant insisted to issue blank cheques for supply of materials, accordingly the accused issued blank signed cheques to the complainant and after completing the construction the accused return the centering materials to the complainant and he has made the payments to the complainant through the cheques and also has paid a cash of Rs.6,80,000/ to the complainant and was busy with the opening of the choultry and forgot to collect the blank cheques and though he is not liable to pay any amounts to the complainant has filed this frivolous case against 18 C.C.No. 6714/2016 J him. Hence, in this back ground the oral and documentary evidence of the complainant and accused has to be examined.
17. The complainant in order to prove his claim that, as per the agreement of hiring dt:
05.10.2013 if the accused failed to return the civil materials within the time agreed then an amount of Rs.3,000/ per day would be levied as idling charges and as on 01.06.2015 the accused is due for sum of Rs.15,38,652/ to him, has produced the original agreement for hiring dt: 05.10.2013 is at Ex.C.10, approval of quotation submitted by the accused dt:
05.10.2013 for providing materials is at Ex.C.14, two invoices in respect of Items in transit to the accused constructions are at Ex.C.11 and C.12, delivery note is at Ex.C.13, copy of the notice issued to the accused on 28.10.2014 regarding non payment of dues is at Ex.C.15, copies of the emails conversation between the complainant and accused construction in respect of demanding due amount and reply given by the accused constructions which are at Ex.C.17 to C.49 and certificate filed U/s.65(b) 19 C.C.No. 6714/2016 J of Indian Evidence Act which is at Ex.C.50. On the other hand, as it is already stated in the above that, the accused has not disputed the fact that, he approached the complainant's proprietory concern for supply of centering materials for construction on monthly rental basis and to that effect an agreement of Hiring dt: 05.10.2013 was entered into by the accused with complainant as per Ex.C.10. It is also not in dispute that, the quotation submitted by the accused was approved by the complainant's concern as per Ex.C.14. It is also admitted by the accused that, as per the invoices i.e Ex.C.11 and C.12 and delivery note ie. Ex.C.13 the complainant's concern has supplied the centering materials to the accused constructions. Therefore the documents produced by the complainant i.e Ex.C.10 to C.14 are admitted by the accused.
18. On careful perusal of the Ex.C.10 ie. Agreement of Hiring dt:05.10.2013 i.e admitted document by the accused wherein at page No.2 in 3 rd para in bold letters it has clearly referred about the additional hiring charges if any delay or prevention or 20 C.C.No. 6714/2016 J objection by the accused or owner's of the choultry or building owners which reads as "Any delay or prevention or objection by either you or by choultry/building/s owners or any one on the work site will cost you extra amount Rs.3,000/ per day of such event in addition to hiring charges quoted above which is payable to us on daily basis without any demur immediately". Hence, the condition referred in Ex.C.10 that, the accused has agreed to pay an extra amount of Rs.3,000/ per day in addition to hiring charges to the complainant concern on daily basis if any delay or prevention for objection by the accused or owners of the building or any one on the work site. Therefore by virtue of the Ex.C.10 the accused cannot be permitted to deny that, he is not liable to pay an amount of Rs.3,000/ per day to the complainant's concern. The complainant has also produced the copies of Email correspondences between the complainant's concern and the accused which are at Ex.C.17 to C.49. On perusal of the said email copies it appears that, the complainant has sent email to the email ID of the accused No.1 21 C.C.No. 6714/2016 J constructions i.e. [email protected] from the email ID of the complainant's proprietory concern i.e [email protected] and in the said emails the complainant's proprietory has demanded the due amount from the accused from time to time and despite of demand made by the complainant's concern by way of sending emails the accused did not cleared the dues by him. It is relevant here to mention that, the learned counsel for the accused during the course of crossexamination of the complainant has specifically denied the copies of the email correspondences produced by the complainant ie. C.17 to C.49. It is true that, the complainant has admitted that, Ex.C.26 and 48 are not sent from the email ID i.e. Annapoorna Power tools to V.R. Constructions but the PW.1 has given explanation that, by mistakenly it was happened but on careful perusal of the entire copies of the emails it apepars that, the said correspondences made by the complainant's concern with the accused constructions, it is true that, the PW.1 admitted that, Ex.C.17 to 49 are not sent to the Email ID of the accused No.2 I.e [email protected] but PW.1 has 22 C.C.No. 6714/2016 J further stated that, he had sent all the emails to the Email ID of the accused No.1 constructions I.e [email protected]. admittedly accused No.2 is proprietor of accused No.1 It is important here to refer that, the learned counsel for the accused has denied that, the email ID of the accused No.1 company is not [email protected]. But in Ex.C10 ie., Agreement of Hiring dt: 05.10.2013 at page No.4 it is clearly mentioned that, the email ID of the accused No.1 constructions company is [email protected], and in Ex.C.14 and C.15 ie the approval of quotation of the accused No.1 company and notice sent to the accused No.1 company, in the said documents also the EMail ID of the accused No.1 company referred as [email protected], therefore the accused No.1 company has admitted that, its EMail ID is [email protected], now it cannot be permitted to deny the said EMail ID does not belongs to the accused No.1 construction. Thus, the complainant has proved that, it has demanded the dues by the accused by way of sending EMails to 23 C.C.No. 6714/2016 J the accused No.1 construction. It is also important here to mention that, in Ex.C.22 the complainant's concern has demanded the amount due from the accused and also mentioned about the Idling charges at Rs.3,000 per day will be charged as per the Agreement of Hiring ie., Ex.C.10.
19. It is the important to mention that, the accused has denied the liability on their part as on the date of presentation of the cheques by the complainant. But on perusal of the cheques in question i.e Ex.C.1 and C.2 it appears that, they were presented on 25.05.2015, on the contrary the accused in order to prove his defence has produced the statement of bank account which is at Ex.D.1 and the perusal of Ex.D.1(a) it appears that, on 8.10.2015 an amount of Rs.1 Lakh was transferred to the account of complainant i.e PW.1, if really there was no liability as on the date of presentation of the cheques the question then the question of making payment after presentation of the cheque in question would not arise at all i.e the accused has transferred the said amount five months after 24 C.C.No. 6714/2016 J presentation of the cheques therefore the accused impliedly admitted existence of the liability on their part as on the date of presentation of the cheques. In addition to that, the complainant has also produced notice and postal receipt i.e., Ex.C.15 and C.16 dt:28.10.2014 ie., notice issued to the accused through RPAD. In the said notice the complainant has demanded the pending dues payable by the accused as on the date of issuing of the notice and the said notice was not disputed by the accused. Therefore on careful perusal of the oral and documentary evidence of the complainant i.e. Ex.C.10 to C.14 to C.16 and C.17 to C.49 and admitted facts by the accused it can be held that, the complainant concern has issued a notice and also sent EMails to the accused No.1 constructions by demanding all pending dues payable by the accused and the accused has not produced any documentary evidence to show that, he has responded or replied or contradicted to the documentary evidence of the complainant , for the said reasons it can be held that, the complainant has proved that, there was a liability existed as stated by the complainant.
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20. It is also the specific defence of the accused that, he has paid a sum of Rs.6,80,000/ to the complainant by way of cash towards the rents for civil materials supply by the complainant and has also made the payments through the bank transfer and has produced Ex.D.1 to D.3, but except oral evidence the accused has not produced any proof or proved that, he has paid an amount of Rs.6,80,000/ to the complainant , therefore mere assertion of accused No.2 that, he has cleared off the entire dues without there being any supporting documentary evidence is not sufficient on the contrary the accused No.2 ought to have produced positive evidence in order to prove his defence i.e. he has paid an amount of Rs.6,80,000/ by way of cash to the complainant . Admittedly the transaction involved in the question is mercantile transaction and accused is having knowledge to pay the amount by way of transferring the amount through bank accounts as he has produced the bank statement stating that, he has made payments through bank account if that is the case, definitely the accused No.2 would have paid the amount of Rs.6,80,000/ to the 26 C.C.No. 6714/2016 J complainant's concern by way of transferring the amount to the account of the complainant's concern from his account, but the contention of the accused that, he has paid an amount of Rs.6,80,000/ through cash that too without getting receipts from the complainant's concern cannot be acceptable one as it is ordinary prudence that, there would be a receipts for payments made by way of cash, but the accused No.2 has failed to produce any receipts for having paid an amount of Rs.6,80,000/ to the complainant's concern by way of cash. Even it is not the case of the accused that, despite of seeking issuance of receipt for having paid the amoutn of Rs. 6,80,000/ in cash the complainant's concern has not issued the receipts, in such circumstances unless and until proved by the accused that, an amount of Rs.6,80,000/ paid in cash to the complainant's concern it can be held that, the accused have admitted existence of liability in question and the failure in proving the fact that, the above said amount is part of liability existing against the accused.
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21. The complainant in the complaint and in evidence of PW.1 has specifically claimed that, as on 1.06.2015 the accused is due of Rs.15,38,652/ and inspite of repeated requests over phone and letters, EMails/and notice to pay the outstanding amount finally the accused towards part payment of the amount due to the complainant's concern directed to present the cheuqes in question i.e Ex.C.1 and C.2, accordingly the said cheques were presented through the complainant's bank for encashment but same were returned dishonured for the reason of "Exceeds Arrangement". On the other hand, the accused has denied the issuance of cheques in question towards part payment of due as claimed by the complainant, but has specifically contended that, the cheques in question i.e Ex.C.1 and C.2 are issued for security at the time of entering into the Agreement of Hiring i.e Ex.C.10 towards if any loss or damage caused to the materials supplied by the complainant to the accused and there was no damage caused by the accused to the materials and the said materials were returned to the complainant and has settled the entire claims of the complainant but the cheques are not returned by 28 C.C.No. 6714/2016 J the complainant and there is no liability on the accused.
22. 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 cheques in question belongs to the account of the accused No.1 construction and the signature found on cheques in question are those of the signatures of the accused No.2 and the cheques in question issued in favour of the complainant's concern. Apart from that, 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 29 C.C.No. 6714/2016 J 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 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, 30 C.C.No. 6714/2016 J 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 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 31 C.C.No. 6714/2016 J 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.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 32 C.C.No. 6714/2016 J 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 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 33 C.C.No. 6714/2016 J 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". 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 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.118a and 139 of N.I.Act indeed does extend to the existence of liability 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 liability in question 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 the mandatory 34 C.C.No. 6714/2016 J requirements and has proved that, the Accused has issued the cheques in question in its favour and the Accused has admitted the cheques belongs to the account of accused No.1 and signatures on the cheques are those of accused No.2 and complainant has proved that the legal notice issued by it was served on the Accused No.1 and 2 in such circumstances, presumptions have to be drawn even towards existence of liability in question as per Sec.118a and 139 of N.I.Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheques in question were not issued either to the complainant's concern or towards discharge of any liability in question by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even the said presumption can be drawn to the extent of existence of liability in question against the Accused, unless and until the said presumptions are rebutted by the Accused even though the documents 35 C.C.No. 6714/2016 J are not produced by the complainant with regard to liability in question.
23. In order to rebut the presumption available to the complainant, it is the specific defence of the accused is that, the accused approached the complainant for supply of centering materials on rental basis for construction of choultry in HSR Layout and at that time the complainant insisted to issued two blank cheques as security and thereafter supplied the centering materials and after completion of the construction work he had returned the said materials to the complainant. The accused has also contended that, he has cleared the rent amount to the complainant by way of transferring the amount to the account of the complainant and also paid a cash of Rs.6,80,000/ to the complainant and later as he was busy with opening of the choultry he forgot to collect the blank cheques from the complainant but the complainant has presented the said cheques for encashment and has filed this false complaint against him. The accused No.2 in his evidence has specifically stated that, he has not signed to any 36 C.C.No. 6714/2016 J Agreement as stated by the complainant. In support of the defence of the accused, has produced the statements of Bank account pertaining to the Karnataka Bank which are at Ex.D.1 to D.3 and the relevant entries are marked as Ex.D.1(a) to D.3(a).
24. On careful perusal of the defence of the accused that, he has paid entire rent amount to the complainant's concern with regard to supply of centering materials and also returned the materials supplied by the complainant's concern for construction of the choultry. As per the defence of the accused and documents produced by the accused, according to the accused he has transferred an amount of Rs.1 Lakh on 8.10.2015 as per Ex.D.1(a) and an amount of Rs.1 Lakh on 3.2.2014 as per Ex. D2(a) and an amount of Rs.1 Lakh on 9.5.2014 as per Ex. D.3(a) and an amount of Rs.6,80,000/ paid by way of cash I.e in total an amount of Rs.9,80,000/ paid to the complainant towards supply of centering materials on rental basis. But the accused No.2 ie., DW.1 during the course of his crossexamination has specifically 37 C.C.No. 6714/2016 J admitted that, he was constructing a wedding hall in the HSR layout for construction of which he had placed order with the complainant at that time he had not made any advance payment to him and the said project was completed by the end of 2018 and he has to return the centering materials after completion of construction work in the year 2014 but he has not taken any documents for having the return the said materials to the complainant. Hence the above admissions of the accused goes to show that, the accused at one breath he stated that, he had returned the centering materials to the complainant in the year 2014 but another breath states that, the construction work carried by him was completed by the end of 2018 and also admitted that, he has no document to show that, he has returned the centering materials to the complainant, therefore the above said versions of the accused itself goes to show that, if really the accused was returned the materials to the complainant in the year 2014 itself the question of completion of construction work by the end of 2018 would not arise at all, in such circumstances it can be held that, even as on 38 C.C.No. 6714/2016 J the date of presentation of the cheques in question the construction work carried by the accused was not at all completed as per his own admissions.
25. The accused No.2/DW.1 has also admitted that, he has paid rent in respect of the centering materials some times by way of cheques and some times by way of cash and has not maintained any ledger in respect of the transaction between him and the complainant and he does not know on which date how much amount was paid in cash and there were no documents in respect of the cash payment of Rs.6,80,000/ made by him. Hence, the said admissions of the accused itself sufficient to hold that, the accused has failed to establish that, he has paid an amount of Rs.6,80,000/ in cash. As it is already held in the above and at the cost of repotation the transaction in question is a mercantile transaction and accused is aware of making payment through cheques but despite of it, he has not paid the huge amount of Rs.6,80,000/ either by way of cheque of by way of transferring to the account of the complainant's concern and even 39 C.C.No. 6714/2016 J he accused has not obtained any receipts from the complainant for having paid the said amount of Rs.6,80,000/ in cash, in such circumstances it is ordinary prudence that, there would be a receipts for payments made by way of cash, but the accused No.2 has not produced any documentary proof or satisfactory evidence to prove that, he has paid an amount of Rs.6,80,000/ in cash towards rent in respect of supply of centering materials by the complainant. It is also admitted by the accused that, he do not remember for which purpose he has paid an amount of Rs.1 Lakh on 8.10.2015 as per Ex.D.1 and for which period of rent of Rs.1 Lakh paid to the complainant as per Ex.D.2(a) and also admitted that, he is not able to say the total rent amount of the centering materials supplied by the complainant's company. Hence it goes to show that, if really the accused has paid the entire rent amount to the complainant definitely he would have stated about the payments made by him as per Ex.D.1 and D.1(a) but for his convenient reason has not stated the same in his crossexamination. The accused No.2 has also admitted that, the complainant had 40 C.C.No. 6714/2016 J issued a typed notice to him through one person and in the said notice there was reference of payment of balance amount and on the basis of said letter he contacted the complainant over phone and requested to reconsider the said letters as he had paid entire amount, but the accused has not proved that, he has paid the entire amount to the complainant but has admitted that, he has received the notice for demanding of due from the complainant . Hence the said admissions clearly goes to show that, the complainant got issued notice to the accused demanding the dues to him and the said notice was also received by the accused. Therefore on over all perusal of the cross examination of the accused No.2 ie DW.1 it appears that, the accused no.2 has admitted that, he has not produced the document to show that, he has returned the centering materials to the complainant and also no documents with regard to alleged cash payment of Rs.6,80,000/ made by him to the complainant and also admitted that, he has received the notice from the complainant regarding the demand made with regard to due by him and accused No.2 has 41 C.C.No. 6714/2016 J miserably failed to prove that, he has paid entire rent amount in respect of supply of centering materials by the complainant's proprietory concern and after completion of the construction work he has returned the centering materials to the complainant and there is no liability on him. Hence, in view of the above said reasons the arguments canvassed by the learned counsel for the accused at para No. 25 to 28 are not acceptable one.
26. It is also relevant here to mention that, the accused /DW.1 in his evidence has stated that, the complainant has insisted to issue two blank cheques at the time of supply of centering materials as security and there after supplied the centering materials and after completion of the construction work he had returned the said materials and also cleared the rent amount and later he was busy with the opening of the choultry he forgot the collect the blank cheques from the complainant but the complainant instead of returning the same has filed this false complaint against him. As it is already held in the above that, accused has failed to prove that, 42 C.C.No. 6714/2016 J after completion of the construction work has returned the centering materials and also failed to prove the amount of Rs.6,80,000/ paid in cash to the complainant., For sake of discussion if it is assumed that, the accused No.2 has paid entire amount to the complainant inspite of it the complainant issued notices through registered post and emails for demanding due towards the rent, in such circumstances, the accsued definitely he would have taken or initiate action against the complainant's concern either by lodging the complaint before the police or court or at least by issuing reply to the complainant for return of his alleged blank cheques handed over to the complainant as a security 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 43 C.C.No. 6714/2016 J complainant for alleged misuse of the cheques in question by the complainant may leads to draw an adverse inference against him that, the Accused No.2 has not initiated any action against the complainant since the cheques in question have been issued by the Accused No.2 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. 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 44 C.C.No. 6714/2016 J 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 No.2 has not made any efforts to get return of cheques alleged to have been given to the complainant for security towards supply of centering materials, under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused No.2 that, the cheques in question issued by the accused No.2 towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted the signatures and cheques in question are belongs to the account of accused No.1.
27. It is important to note here that, according to the complainant the accused inspite of issuing 45 C.C.No. 6714/2016 J letters, notices , and emails to the accused to pay the outstanding amount due to him, the accused did not pay the due by him but finally directed the complainant to present the cheques in question towards part payment of the amount due to the complainant, accordingly he has presented the cheques in question for encashment but same were returned dishonoured. On the other hand, the accused has denied the claim of the complainant and contended that, at the time of supplying the centering materials the complainant had collected two blank cheques for security and even after rent amount paid by him and materials were returned to the complainant, the complainant did not returned the cheques to him but has presented the said cheques for encashment an filed this false case. It is an admitted fact that, the cheques in question issued to the complainant and same are belongs to the account of accused No.1 and signatures found on the cheques in question of those of signatures of accused No.2. It is true that, the complainant during the course of his crossexamination has admitted that, accused has not communicated to him in any 46 C.C.No. 6714/2016 J manner in the month of May 2015 but at the same time the accused No.2 in his cross examination dt:
25.1.2019 stated that, he met the complainant' personally in the year 2015 and before that, the conversation were through telephonic conversations, hence this clearly shows the probabilities of accused No.2 issuing directions to the complainant's concern for presentation of the cheques. Even for sake of discussion if it is assumed that, the accused No.2 had given blank cheques to the complainant but he has admitted his signatures on the cheques in question, therefore once signature on the Negotiable Instrument Act is admitted, in that circumstances Sec. 20 of N.I. Act comes 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 47 C.C.No. 6714/2016 J 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 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 48 C.C.No. 6714/2016 J (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 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 Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w.49
C.C.No. 6714/2016 J 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 inchoate negotiable instrument duly signed by the maker despite the material 50 C.C.No. 6714/2016 J 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 conjunctures and surmises, a case is made out from the difference in ink between the 51 C.C.No. 6714/2016 J signature of the cheque and the other handwritten contents. Therefore in view of the principles of law laid down by Hon'ble Apex court of India and also Hon'ble High Court of Karnataka referred above and in the present case also the Accused No.2 has admitted his signatures on Negotiable Instrument i.e. cheques and he also admitted issuance of the cheques to the complainant, it is primafacie 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 No.2 that, the complainant had misused or fabricated the cheques in question given by him and the defence of the Accused cannot be acceptable one as the instrument i.e., cheques 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 for the above said reasons the arguments canvassed by the learned counsel for the accused at para No.13 to 16 are not acceptable one.52
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28. it is also the specific defence of the accused that, the PW.1 in his crossexamination has admitted that, the disputed cheques are issued at the time of work order ie. on 05.10.2013 and also admitted that, from 05.10.2013 to till filing of the case the disputed cheques are in the custody of the complainant, hence it clearly goes to show that, the accused has not issued the cheques to discharge the liability and when the cheques are in the custody of the complainant , the accused filling up the cheques does not arise and the complainant has collected the cheques as security even though there is no liability. Even for sake of discussion if it is assumed that, Accused has given cheques in question without mentioning the name of the payee and date 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 53 C.C.No. 6714/2016 J 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 presumed fact." In the present case though the Accused No.2 has denied the contents of the cheques in question except his signatures 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 54 C.C.No. 6714/2016 J 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 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 55 C.C.No. 6714/2016 J 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 complainant has written his name and date on the cheques in question in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheques in question and it can be presumed that, the said cheques have been issued towards discharge of legally recoverable debt. It is also relevant here to refer the decision of Hon'ble Apex court held in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " (a) Negotiable Instrument Act 1881 - S.138 - If on the date of the cheque liability or debt exist or the amount has become legally recoverable S.138 will apply
- not otherwise". In another decision of Hon'ble High Court of Bombay decided in CRMM No.2607/2018 (O & M) dated: 27.8.2019 in the case of Kailash vati Vs. M/s. Ludhiyana 56 C.C.No. 6714/2016 J Beverages., wherein the Hon'ble High Court held that " A. Negotiable Instrument Act 1881 - S.138 and 6 - Dishonour of cheque date of drawn - Determination of - The date on which the cheque is drawn has to be with reference to the date mentioned in the column in the cheque and not the date on which it was signed Date when the cheque is drawn is not defined in the act - If date of singing cheque is accepted then all post dated cheques cannot be treated as valid cheques within and drawer of cheques would stand absolved from criminal prosecution if cheques are presented after three months of the date on which signature were appended". Hence in view of the principles of law laid down by the Hon'ble Apex Court of India, it can be held that, the liability of the debt existed as on the date mentioned on the cheque not as on the date of signature on the cheque, even for sake of discussion the arguments canvassed by the learned counsel for the Accused in the written argument taken into consideration but in view of the principles of law laid down by the Hon'ble 57 C.C.No. 6714/2016 J Apex Court and High Court of Bombay it is to be considered that the date on which cheques were drawn has to be with reference to the date mentioned in the cheques but not the date on which they were signed., therefore the arguments canvassed by the learned counsel for the defence at para No.17 to 19 and 23 cannot be acceptable one and with due respect to the principles of law laid down by the Hon'ble High Court of Karnataka, Punjab and Haryana and also Hon'ble Apex Court in the decisions relied upon by the learned counsel for the accused are not helpful for the accused to prove his defence.
29. It is also relevant here to mention that, the Accused/DW.1 in his evidence has also taken specific defence that, the cheques in question were issued to the complainant as security towards supply of centering materials but the complainant did not return the said cheques to him an even inspite of rent amount paid and returned the centering materials but misused the cheques in question. As it is already held in the above that, in 58 C.C.No. 6714/2016 J support of defence of the accused, nothing has been produced before the court to show that, the accused has paid entire rent amount and returned the materials to the complainant, except the oral evidence nothing has been placed before the court. Even for sake of discussion, if the defence of the Accused No.2 i.e. the cheques in question have been given to the complainant towards security for supply of centering materials, in such circumstances also it attracts the offence U/s.138 of N.I.Act, unless the accused proved his defence, in this regard, it is relevant here to refer the decision of Hon'ble Apex court of India reported in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " Even cheque issued as security for payment of loan installments also covered under the purview of sec. 138 of Negotiable Instruments Act" In another decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of Lale Patel Vs. Sharanabasappa., wherein the Hon'ble 59 C.C.No. 6714/2016 J High Court held that " NEGOTIABLE INSTRUMENTS ACT, 1881 section 138 - Dishonour of cheque for insufficiency of funds Plea of accused that he had given a blank cheque signed as security for a transaction and complainant filled up the contents and denied existence of any debt or loan - Conviction by Trial court Affirmed by Appellate Court - Revision against. Hence the Hon'ble High Court of Karnataka in the above decision clearly held that, if the Accused has taken defence that, blank signed cheques has been issued as a security for transaction and the complainant filled up the contents and the accused denied the existence of debt or liability in such circumstances it is for the accused to prove his/her defence by producing cogent and convincible evidence, if the Accused has not proved the same in such circumstances, it cannot be held that, the cheques in question were issued for the purpose of security in connection with the alleged transaction. In another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. 60 C.C.No. 6714/2016 J Vijayakumari wherein the Hon'ble Apex court held that " NEGOTIABLE INSTRUMENTS Act, 1881 Sections 138 and 139 - acquittal - If justified Accused not disputing issuance of cheque and his signature on it Plea that it was issued long back as security and that loan amount was repaid Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused Acquittal not proper. Hence in the present case also it is the main defence of the Accused that the cheques in dispute were given to the complainant for security towards supply of centering materials and he has paid the entire rent amount to the complainant and returned the centering materials, inspite of it the complainant did not returned the cheques in question to him but in this regard the accused has not produced documents or proof in such circumstances by applying the principles of law laid down in the above decision the defence of the Accused cannot be acceptable one. In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.271/2020 61 C.C.No. 6714/2016 J in the case of APS Forex Services Pvt. Ltd., Vs. Shakthi International Fashion Linkers and others., wherein the Hon'ble Apex Court held that "the defence of the Accused that, cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption. It is also held that, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always presumption infavour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the Accused to rebut such presumption by leading evidence". In the present case the Accused has admitted that, the cheques were issued and signatures are also admitted but it is the defence of the Accused that, they were issued towards security and complainant has fabricated the cheques, in such circumstances the defence of the Accused cannot be acceptable one in the absence of further proof of evidence to rebut the presumption.62
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30. 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, the accused is due for sum of Rs.15,38,652/ and inspite of repeated requests made by the complainant through letters, notice and emails, finally the accused No2 has directed to the complainant's concern to present the cheques in question towards part payment of the amount due to the complainant, accordingly the complainant' concern has presented the said cheques through its banker and same were returned dishonoured with an endorsement of "Exceeds Arrangement" and thereafter the complainant got issued legal notice to the accused No.1 and 2 and the said notices were served on accused No.1 and 2, inspite of it, the Accused did not paid the cheques amount, hence the complainant filed the present complaint against the accused. On the other hand, the accused have failed to rebut the presumption available infavour of the complainant with regard to the existence of legally 63 C.C.No. 6714/2016 J recoverable debt under Ex.C.1 and C.2 Cheques. Therefore accused No.1 and 2 have committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
31. 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 their 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 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 No.1 and 2 are convicted for 64 C.C.No. 6714/2016 J the offence punishable U/sec.138 of N.I.Act.
The accused No.2 is sentenced to pay a fine of Rs.9,25,000/= (Rupees Nine Lakhs and Twenty Five Thousand only) within one month from the date of order, in default accused No.2 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.9,20,000/= (Rupees Nine Lakhs and Twenty 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.
The Bail bond of the Accused No.2 stands cancelled.
65C.C.No. 6714/2016 J 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 7th day of April 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. Channaveeraswamy (Nagaraj)
2. List of documents exhibited on behalf of the Complainant: Ex.C1 & C2 : Original Cheques;
Ex.C1(a) & C : Signatures of the Accused;
2(a)
Ex.C3 & C4 : Bank Memos
Ex.C5 & C6 LBank Challans
Ex.C7 : Office copy of the Legal Notice;
Ex.C8 : Endorsement given by postal authority
Ex.C9 : true copy of the delivery slip
66
C.C.No. 6714/2016 J
Ex.C10 : Original Hiring Agreement dt: 5.10.2013
Ex.C11 & C.12 : two Invoices dt: 07.10.2013
Ex.C13 : Delivery Note dt: 07.10.2013;
Ex.C14 : Quotation letter dt: 08.10.2013 issued
by the accused to the complainant
Ex.C15 : Letterdt: 28.10.2014 sent by the
complainant to the accused
Ex.C16 Postal receipt
Ex.C17 to C.49 Copies of Emails
Ex.C.50 : certificate U/s.65(b) of Indian Evidence
Act
3. List of witness/s examined on behalf of the Accused: DW.1 : Ranjith Kumar K.V ( Proprietor)
4. List of documents exhibited on behalf of the Accused: Ex.D.1 to C.3 : Statements of Accounts Ex.D1(a) to : Relevant entries D.3(a) (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
67C.C.No. 6714/2016 J 07.04.2021 case called, Both complainant and counsel for the complainant absent, accused and counsel for the accused No.1 and 2 absent.
Judgment pronounced in the open court, vide separate order.
ORDER
Acting U/sec.255(2) of
Cr.P.C. the accused No.1 and 2
are convicted for the offence
punishable U/sec.138 of N.I.Act.
The accused No.2 is
sentenced to pay a fine of
Rs.9,25,000/= (Rupees Nine
Lakhs and Twenty Five
Thousand only) within one
month from the date of order, in
default accused No.2 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.9,20,000/= (Rupees Nine
Lakhs and Twenty Thousand
only) shall be paid as
compensation to the complainant.
68
C.C.No. 6714/2016 J
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.
The Bail bond of the Accused
No.2 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.