Bangalore District Court
Got Issued Legal Notice On 13.10.2010 ... vs Failed To Pay The Amount Covered Under ... on 30 April, 2019
IN THE COURT OF THE VI ADDL. SMALL CAUSES JUDGE &
XXXI ADDL. CHIEF METROPOLITAN MAGISTRATE,
BENGALURU CITY
DATED THIS THE 30th DAY OF APRIL 2019.
PRESENT: Smt. K.UMA., B.A.L.,LL.B.,.
VI Addl. Small Causes Judge &
XXXI ACMM, Bengaluru.
C C NO.2130 OF 2011
JUDGMENT U/S 355 OF Cr.P.C.1973
1. Sl. No. of the case : C. C. No. 2130/11
2. The date of commission of
the offence : -
3. Name of the Complainant : Sri.Y.B.Narayan,
S/o Boraiah L.,
Aged about 56 years,
R/at No.19,
Between 6th & 8th Main,
17th Cross,
Malleshwaram,
Bengaluru - 560 003.
(By Sri.N.P.Kalalesh gowda,
Advocate)
4. Name of the Accused : Sri. Sampath Kumar C.,
S/o Late Chennaiah,
Major,
R/at No.515/A,
1st Floor, 2nd cross,
Kempegowda Layout,
SCCH-2 CC.2130 of 11
2
BSK 3rd Stage,
Bengaluru-560 085.
(By Sri.T.N.harish &
Y.S.Shivakumar, Advocates)
5. The offence complained : Under Section 138 of the
of or proves Negotiable Instruments
Act
6. Plea of the Accused : Pleaded not guilty.
and his examination
7. Final order : Accused is Acquitted.
8. Date of such order : On 30-04-2019.
for the following;
JUDGMENT
This complaint is filed against the Accused under Sec.200 of Cr. P. C. for the offence punishable under Section 138 of the Negotiable Instruments Act. Cognizance of the offence taken on presentation of the private complaint before the Hon'ble 16th ACMM, Bengaluru, and ordered to register the criminal case, as there were prima facie materials to proceed against the Accused. During the stage of trial this case has been withdrawn and transferred to this court.
SCCH-2 CC.2130 of 11 3
2. The brief facts of the Complainant's case is that; It is the contention of the Complainant that, himself and the accused, who is a Proprietor of M/s.S.K.Pictures, are friends since six years and known to each other as he used to produce movies. By virtue of intimacy and friendship, the accused had approached him during 1st week of August 2010 to advance a loan of Rs.8,00,000/- as the same is needed for the production of movies, agreeing to refund the same within a month. Considering the request of the accused, he lent a loan of Rs.8,00.000/- to the accused during 1st week of August 2010. But after the lapse of one month, when he requested the accused to repay the loan amount, for which, the accused has issued a cheque bearing No.192464 dated 21.09.2010 drawn on Bank of Maharashtra, Basavangudi, Bengaluru in his favour.
3. On presentation of said cheque through his banker for encashment, but the same was returned with an endorsement 'Account closed' on 25.09.2010. Thereafter, the Complainant got issued legal notice on 13.10.2010 through SCCH-2 CC.2130 of 11 4 RPAD under Section 138(b) of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the NI Act"), to the Accused to make payment of the cheque amount. Despite due notice, Accused failed to pay the amount covered under cheque within statutory period of notice of demand. Hence, this complaint.
4. On being served the summons, the Accused appeared through his counsel and got released him on bail. Plea of the Accused recorded by explaining the substances of accusation. Accused pleaded not guilty and claims to be tried.
5. The Complainant in support of the case got examined himself as PW-1 and produced ten documents marked at Ex.P1 to Ex.P10. After closure of Complainant's evidence, the Accused was examined under Section 313 of Cr.P.C. by explaining the incriminating circumstances appearing in the evidence of the Complainant. The Accused has denied the prosecution version in toto. The Accused got examined him as DW1 and during the course of cross examination of PW1, two documents were marked as Ex.D1 and Ex.D2.
SCCH-2 CC.2130 of 11 5
6. Heard arguments of both the parties. The counsel for the Complainant has filed written notes of arguments.
7. The learned counsel for complainant has also relied on the following list of citations in support of the case.
• AIR 2010 SC 1898- Rangappa -vs- Mohan • 2013(3) KCCR 2223-Smt.Peerambi -vs-Hajimalang • 2014(4) AKR 98- Sripath -vs- Ramdas M.Shet • AIR 2001 Supreme Court page 3897 • AIR 2001 Supreme Court page 2895 • Judgment in Crl.Appeal No.913/2016 between the parties of this case (but criminal revision petition is pending before HOK)
8. The learned counsel for Accused has also relied on the following list of citations in support of the case.
• ILR 2014 Kar 6572 • (2014)2 Supreme Court Cases 236 • LAWS (SC) 2008--1-105 Krishna janardhan Bhat -vs Dattatraya G.Hegde • ILR 2008 Kar 4629 Shivamurthy -vs- Amruthraj
9. Following points that arise for my consideration;
1. Whether Complainant proves beyond all reasonable doubt that Accused has committed an offence punishable under Section 138 of Negotiable Instruments Act?
2. What order?
SCCH-2 CC.2130 of 11 6
10. My findings to the above points are:
Point No.1 : In the Negative.
Point No.2 : As per the final order for the following;
REASONS
11. POINT NO.1: The Complainant in proof of his contention, got examined himself as PW1, who filed affidavit in- lieu of oral examination-in-chief. PW1 in chief-examination affidavit PW1 has deposed that the cheque - Ex.P1 has been issued by the Accused towards repayment of hand loan, which is borrowed from him. The cheque on presentation returned as "Account Closed" as per the bank endorsement produced at Ex.P2. Hence, he got issued legal notice, which is produced at Ex.P3 through RPAD vide postal receipts and under certificate of posting are marked at Ex.P4 to Ex.P7, which was served on the Accused as per Ex.P8 - Postal acknowledgement. The accused has issued reply to the notice, which is marked at Ex.P9 and the complaint is at Ex.P10. This is the evidence placed by the Complainant.
SCCH-2 CC.2130 of 11 7
12. On perusal of the oral and documentary evidence placed by the Complainant, it reveals that the complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with regard to taking cognizance of the offence punishable under Section 138 of N I Act.
13. On the other hand the Accused in proof of his defense got examined him as DW1, in examination in chief DW1 has deposed that he is aware of accused since 6-7 years. He works as a distributor of movies. At the request of the complainant and his daughter, they got executed a partnership deed and commenced to do film by name Prem Nagar. The Complainant left him in middle of cinema production and however he completed movie Prem Nagar. Only after recipt of legal notice he came to know about the missing of the cheque which is produced herein. He had given reply to the said legal notice. Thereafter, the complainant over phone spoke to him and assured that he would return the cheque in dispute.
SCCH-2 CC.2130 of 11 8
14. DW1 has further deposed that there was no any transaction between him and the complainant. He never issued the cheque in dispute for repayment of loan as contended by the complainant. He came to know about the cheque after receipt of summons from the court. The Complainant had accesses to his office chambers during the time doing movie. He use to keep the cheques in his table drawer. The Complainant in order to cheat has taken out cheque and filed false case against him. Accordingly he prays for his acquittal.
15. With this evidence of Complainant, I shall examine the probability of defense put forth by the Accused in the light of principles enunciated in the dictum of Hon'ble Apex Court in Krishna Janardhan Bhat Vs. Dattatreya G Hegde, reported in 2008 (4) SCC 54. The Hon'ble Apex Court has observed thus; Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act.It merely raises a presumption in favour of a holder of SCCH-2 CC.2130 of 11 9 the cheque that, the same has been issued for discharge of any debt or other liability.
16. The learned counsel for Complainant during course of arguments has relied on following decisions; AIR 2010 SC 1898 (Rangappa Vs- Mohan) The Hon'ble Apex Court has observed in para 14 and 15 thus;
"14. .... We are in agreement with the respondent claimant that the presumption mandate by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
15.... It is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof SCCH-2 CC.2130 of 11 10 for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability the prosecution can fail. As clarified in the citations, the accused can rely on the material submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own"
2013(3) KCCR 2223 (Smt.Peerambi Vs- Hajimalang) "Accused not denying cheque. It cannot be accepted that, cheque was obtained by complainant illegally and was sought to be misused against him, in absence of any material evidence. Presumption in favour of complainant arises. Dismissal of complaint improper."
2014(4) AKR 98 (Sripath Vs- Ramdas M.Shet) "Cheque issued by accused to repay loan amount to complainant, was dishonoured. Specific defence of accused that he has repaid amount due. However, accused failed to rebut initial presumption U/Ss.118 and 139. Mere distorted version or mere taking up defense by him that he is not liable to pay any SCCH-2 CC.2130 of 11 11 amount, are not sufficient to put back the burden on to the complainant".
AIR 2001 Supreme court 3897 -
(Hiten P Dalal -vs- Bratindranath Bannerjee). the Hon'ble Apex Court has held thus;
"Burden of proof in view of difference between discretionary and mandatory presumptions. There is a presumption under law that cheque was drawn for discharge of liability of drawer Is to be raised by court in every case. Rebuttal evidence requires proper proof and mere plausible explanation is not sufficient. Distinction between the two kinds of presumption lay not only in the mandate to the court, but also in the nature of the evidence required to rebut the two. In the case of discretionary presumption the presumption, if drawn may be rebutted by an explanation which might reasonably be truth and which is consistent with the innocence of the Accused. On the other hand in the case of a mandatory presumption "the burden resting on the Accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and can not be held to be discharged merely by reason of the fact that the SCCH-2 CC.2130 of 11 12 explanation offered by the Accused is reasonable and probable."
AIR 2001 Supreme Court 2895 (K.N.Beena, Vs- Muniyappan and another), The Hon'ble Supreme Court has held thus;
" Burden of proving that cheque had not been issued for any debt or liability, is on the accused. Denial/averments in reply by accused are not sufficient to shift burden of proof onto the complainant. Accused has to prove in trial by leading cogent evidence that there was no debt or liability."
17. The learned counsel for Accused during course of arguments has relied on following decisions; ILR 2008 Kar 4629 (Shivamurthy Vs- Amruthraj) The Hon'ble High Court of Karnataka in its decision has held thus;
"The circumstances of not charging any interest was also considered as the relevant circumstance to find out as to whether the existence of the debt has been proved or not. In the case on hand also, not only no document has been executed even, no interest has been charged. No explanation is forthcoming from the Complainant as to why interest was not charged on SCCH-2 CC.2130 of 11 13 Rs.75,000/- alleged to have been lent by him for a period of nearly 10 months. No prudent man, in my considered view, would lend substantial amount of Rs.75,000/- without charging interest. Admittedly, provisions of Section 269 SS of Income Tax Act has not been followed, as, it is not the case of the complainant that, the loan of Rs.75,000/- was advanced by means of Account payee cheque.."
ILR 2014 Kar 6572 (Sri.H.Manjunath -vs- Sri.a.M.Basavaraju) "Absence of statement in the complaint as to when the amount was actually given to the accused. Absence of material particulars of the transaction in the complaint. Except signature all other entries are in different handwriting-different ink and undoubtedly made a different time- Mentioning of merely the date of issue of cheque without any material particulars- Held-Judgment of acquittal is justified."
"As seen from the complaint there is no statement as to when the amount was actually given to the accused. The complainant has merely mentioned the date of issuance of cheque without any material particulars of the transaction. The cheque in question undoubtedly is signed by the accused. The dispute SCCH-2 CC.2130 of 11 14 raised is entries made in the cheque are not in his handwriting.It is not the case of the complainant that cheque was issued in blank and filled up latter with consent of the accused.-Further held- Perusal of the cheque at Ex.P1 makes it manifest that except signature all other entries are in different handwriting different ink and undoubtedly made at different time. In this view it is difficult to accept the version of the complainant."
(2014) 2 SCC 236 John K. Abraham V.Simon C.Abraham and another The Hon'ble Apex Court in its decision has held thus;
"Complainant alleging that accused borrowed a sum of Rs.1,50,000/- from him and issued a cheque for said sum which was dishonored. From drawing presumption under S.118 R/w 139 N I Act, burden is heavily upon complainant, to show that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make payment as had been agreed while issuing the cheque in favour of the Complainant.
SCCH-2 CC.2130 of 11 15
18. On going through the citations cited by both Complainant and by the Accused and arguments canvassed by them, it is relevant to point out that in the present nature of cases the court has to determine whether version of Complainant is true or the theory put-forth by the Accused is true?.
19. It is necessary to point out the mandatory presumption to be raised in respect of negotiable instrument as contemplated under Negotiable Instruments Act. Indisputably, a mandatory presumption is required to be raised in terms of Section 118 (b) and Section 139 of the Act. Section 138 of the Act has three ingredients viz.:
1. that there is a legally enforceable debt;
2. that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and
3. that the cheque so issued had been returned due to insufficiency of funds.
20. At the outset, an essential ingredient of Section 138 of N I Act is that the cheque in question must have been issued SCCH-2 CC.2130 of 11 16 towards legally enforceable debt. Under Section 118 of the Act, a presumption shall be raised regarding consideration, date, transfer, endorsement and regarding holder in the case of negotiable instruments. Even under Section 139 of the Act, a rebuttable presumption shall be raised that, the cheque in question was issued regarding discharge of legally enforceable debt. These presumptions are mandatory provisions that are required to be raised in case of negotiable instruments.
21. Keeping in mind the position of law as stated supra, let me deviate to appreciate the evidence of PW-1 deposed during cross-examination. On appreciation of the evidence of the Complainant deposed during cross-examination, it indicates that Complainant came in contact with the Accused through one of his friend namely, Mayanna since 10 years. He is a Government Servant and working as an Assistant Executive Engineer, PWD, Hospet Sub-Division. He had funds for construction of house and the same was paid by him accused by way cash as requested by the accused and accused had assured him that he would repay the amount within 3 months. He is an SCCH-2 CC.2130 of 11 17 income tax assessee. He is not partner of S.K.Pictures and denied for having paid money to to S.K.Pictures. According to PW-1 he paid Rs.11,00,000/- to the Accused.
22. On further appreciation of the evidence of the Complainant deposed during cross-examination, it indicates that, he did not shown the payment made to accused in income tax returns. According to complainant he did not involve in production of movies, as he is a government servant. PW-1 has denied for having produced movies namely, "Noorondu Baagilu"
and "Hoogi Baa Magale". PW-1 has deposed that he had participated in arbitration proceedings before Film Chambers. All further possible suggestions have been denied by PW-1 with regard to issuance of cheque.
23. It is relevant to note that, as per the orders by the Hon'ble High Court of Karnataka in Bengaluru, dated 02.07.2018 in Criminal Petition No.7568/2017 C/w Criminal Petition No. 7569/2017, the cheque which was produced in this case has been returned to the Complainant so as to present in CC No. 2131/2011 and accordingly the Complainant has SCCH-2 CC.2130 of 11 18 presented the Ex.P1 cheque in this case after taking the same which was filed in CC No. 2131/2011. Further as per the orders of this court upon the application filed by the Complainant, Ex.P2 bank memo is returned to present in the proper case accordingly, the Complainant produced Ex.P2 bank memo in this case which was produced in CC No. 2131/2011. The Ex.P1 cheque and Ex.P2 bank memo which were produced by the Complainant in CC No. 2131/2011, which was filed between the same parties has been taken back and filed in this case. Furthermore, the Complaint both in sworn statement and in chief examination affidavit were also wrongly filed and the affidavits are not in consonance in averments of Complainant in connection to Ex.P1 cheque and the bank memo.
24. It is pertinent to note that, after producing Ex.P1 cheque and Ex.P2 Bank Endorsement, which was produced in C.C.No.2131/2011, PW1 has been recalled to tender him for cross examination. On further appreciation of evidence of PW1, deposed during cross-examination, it is forth coming that, the Complainant is aware of contents of legal notice, sworn SCCH-2 CC.2130 of 11 19 statement affidavit, the complaint and affidavit filed in-lieu of examination-in-chief, as he had given information to prepare the same to his advocate. PW1 has deposed that, as per the contents of Ex.P3 legal notice and in complaint filed before this court, he stated the Accused had approached him in the first week of August 2010 for financial help of Rs.8,00,000/-. This fact is not stated either in legal notice or complaint of sworn statement affidavit or in chief examination affidavit.
25. On further appreciation of evidence of PW1, deposed during cross-examination, it is forth coming that, according to PW1 he paid Rs.8,00,000/- on 05.08.2010. In Ex.P3 legal notice in para 2 he has stated that, he paid Rs.3,00,000/- to the Accused in the month of July 2010, However, PW1 has stated that, the said legal notice is pertaining to some other case. PW1 has deposed that, the contents in legal notice and as stated in complaint, Rs.8,00,000/- was paid by him to the Accused in the first week of August 2010 is not deposed in sworn statement as well as in the affidavit filed in lieu of examination in chief. The cheque number of Ex.P1 is 192464 and bank memo is SCCH-2 CC.2130 of 11 20 pertaining to the said cheque. The cheque number stated in sworn statement and chief examination affidavit is No.192463 but the legal notice issued as per Ex.P3 is in respect of cheque number 192464.
26. On further appreciation of evidence of PW1 deposed during cross examination, it indicates that, as per the documents, which is confronted to PW-1 is the reply dated 05.04.2011 given by Accused to Karnataka Film Chambers and which is marked at Ex.D1. He is aware of the contents of Ex.D1 reply notice. PW1 has deposed that, there was a dispute between his daughter Y.N.Amrutha and Accused in the year 2011 in connection to partnership deed. Prior to 3 months of this incident, there was a transaction between himself and Accused and according to Complainant the transaction started in the year 2010 and the incident took place in the year 2011. There is no content about the present case in Ex.D1 reply. According to Complainant, he paid Rs.8,00,000/- and again Rs.3,00,000/- to the Accused and except cheques he did not get any documents for having paid total amount to Rs.11,00,000/-
SCCH-2 CC.2130 of 11 21 and he did not submit any documents to establish that he had Rs.11,00,000/- with him. He did not shown in income tax returns about payment of Rs.11,00,000/- to Accused.
27. On further appreciation of evidence of PW1, deposed during cross examination, it is forth coming that, as per the certified copy of document which is confronted to PW1, according to Complainant as per the decision before arbitration he had informed Karnataka Film Chambers to direct Accused to pay Rs.10,00,000/- as per Ex.D2. PW1 has deposed that, he did not give any documents to Accused for having received cheque. The Accused had issued reply to legal notice. According to Complainant, he submitted sworn statement affidavit and cheque as stated in the complaint. PW1 has denied to the suggestion given to the effect that, what is stated in compliant and in legal notice about payment of Rs.8,00,000/- in the month of August 2010 is false. All further possible suggestions have been denied by this witness.
28. On appreciation of the evidence of DW-1 deposed during cross-examination, it reveals that, she is aware of SCCH-2 CC.2130 of 11 22 Complainant since 6 to 7 years. He studied upto to 9th Standard. He can affix his signature in English but he cannot write and can read English. He is owner of S.K.Firm and he is aware of daughter of Complainant. Complainant introduced his daughter prior to 6-7 years. She became partner to S.K. Firm. The Complainant daughter namely Amrutha.Y.N invested Rs.4,00,000/- as partner and not Rs.15,00,000/- as stated by the Complainant's counsel. They produced movie name Prem Nagar. DW1 denied to the suggestion that, he had financial defects during that period and made Amrutha.Y.N as partner to his firm. He has to pay money on daily basis after finishing of movie work on particular day. DW1 has denied to the further suggestion that, he had asked Y.N. Amrutha to ask his father to lend loan and accordingly for having received twice Rs.8,00,000/- and again Rs.3,00,000/- from the Complainant. In all according to Complainant, Accused has received Rs.11,00,000/- on various dates, this fact is denied by DW1.
29. On appreciation of the evidence of DW-1 deposed during cross-examination, it appears that, the Accused did not SCCH-2 CC.2130 of 11 23 dispute signature on cheque. According to Accused, he did not give the cheque to the Complainant and he denied to the contents of the cheque. According to Accused, cheque has been missed from his office. He came to know about missing of his cheque only after receipt of legal notice, but he did not lodge complaint against the Complainant before the police. DW1 has deposed that, when daughter of Complainant had came out from the partnership and at that time in arbitration case it was decided that, he shall pay Rs.10,00,000/- to Y.N. Amrutha. Therefore he issued 2 cheques for Rs.5,00,000/- in the name of AmruthaY.N and the cheque bounce case are pending before 19th ACMM. All further possible suggestions have been denied by DW1.
30. On further appreciation of the evidence of DW-1 deposed during cross-examination, it reveals that, he had issued reply as per Ex.P9 and as per the contents of reply notice he started Megacity firm along with S.K. Pictures. Later he closed Megacity as it was under loss. The bank Account closed in the name of Megacity was closed by the bank as he was not SCCH-2 CC.2130 of 11 24 doing any transactions. The cheque produced in this case pertaining to Megacity. In further cross examination, DW1 has denied all further possible put-forth by the Complainant counsel with regard to institution Megacity and with respect to the cheques. He is president of the Megacity institutions and all the bank transactions taken care by the secretary and secretary will sign all the cheques pertaining to Megacity cheques where in the sign appearing in disputed cheque is of him. He did not return the cheques to the bank as they were mis-placed. The case filed by the Complainant's daughter in CC No.8178/12 is compromised between them. All further possible suggestions have been denied by this witness.
31. On over all appreciation of evidence of PW1, the Complainant did not produce any documents to substantiate his financial capacity. The Accused has taken defense at threshold by giving reply to the legal notice. It is the duty of the complainant to establish his financial capacity but i.e. not done by him. Further, it is relevant to note that, according to the contents of complaint, he lent loan of Rs.8,00,000/- to the SCCH-2 CC.2130 of 11 25 Accused in the month of first week of August 2010 and in turn Accused issued the cheque Ex.P1 bearing No.192464 dated 21.09.2010, this fact is not deposed in chief examination affidavit. Whereas in chief examination affidavit PW1 has deposed that, he had lent a loan to Accused for a sum of Rs.3,00,000/- in the first week of August 2010 and in turn accused issued Cheque bearing No. 192463 for Rs.3,00,000/- dated 18.09.2010. Both these statements of Complainant are contrary to each other. What is pleaded is not deposed by the Complainant. What is deposed in chief examination is not substantiated by producing relevant documents. The Complainant has produced Ex.P1 cheque bearing No.192464 for Rs.3,00,000/- dated 21.09.2010.
32. The pleading is not supported by oral evidence and documentary evidence. Both the statements and documents are contrary to each other. The Complainant though having knowledge of oral and documentary evidence produced by him, he did not lead further evidence to substantiate his pleadings and to depose in support of the documents produced by him.
SCCH-2 CC.2130 of 11 26 The complainant has failed in substantiating case. Furthermore, the Complainant did not lead further evidence of Complainant so as to depose in consonance with averments of complaint. What is pleaded in complaint is not deposed in examination in chief filed by the Complainant. No doubt the sworn statement affidavit is also not in accordance with averments of Complaint. However, rightly or wrongly this court has taken cognizance of the offence against the Accused. Therefore, this court is not having inherent powers to reconsider the stage of taking cognizance, hence, I deem it proper to proceed and dispose the case on merits.
33. In this case, the alleged transactions involved huge amount. No doubt, the initial burden is on the Accused and it is equally necessary to know as to how the Complainant advanced such huge amount to Accused. In this regard, it is not out of place to rely on the decision reported in AIR 2008 SC 278 (John K John V/s Tom Verghees and another) in this decision, the Honb'le Supreme Court has observed that;
SCCH-2 CC.2130 of 11 27 "The presumption under Section 139 of N.I.Act, could be raised in respect of some consideration and burden is on the Complainant to show that, he had paid amount shown in the cheque. When ever there is huge amount shown in the cheque, though the initial burden is on the Accused, it is equally necessary to know how the Complainant advance the huge amount".
34. In this connection further, it is not out of place to place reliance on the decision reported in (2015) 1 Supreme Court Cases 99 in the case of K.Subramani Vs. K. Damodara Naidu. The Hon'ble Apex Court in its decision has held thus;
"Legally recoverable debt not proved as complainant could not prove source of income from which alleged loan was made to accused." As held in the above decision, the Complainant did not submit any single evidence to show his financial capacity. He did not furnish his bank account and he did not produce documents for having arranged funds to lend loan to the Accused. The Complainant being a government servant he should maintain account for having paid money to the accused. All these aspects leads doubt about financial capacity of Complainant. As per the SCCH-2 CC.2130 of 11 28 principles laid down in the above 2 decisions, it is incumbent upon the Complainant to prove his financial capacity, as accused has raised probable defence about the financial capacity of the complainant to make payment of lakhs of rupees.
35. It is necessary to point out that according to Complainant, he is an income tax assesse. But he did not submit his income tax returns to substantiate his financial capacity. The Complainant did not place sufficient materials as to how he generated such huge amount so as to pay the said amount to the Accused on various dates. The Complainant did not show account of that amount. Therefore, it means the said alleged amount is unaccounted amount. In this connection it is out of place to place reliance on a decision reported in 2014(3) DCR 760 (Vijay Kundanlal Sharma V/s Satyavan Bikaji Jadvan and another) the Honb'le court has held that;
"Un accounted cash amount is not legally enforceable debt of liability within the meaning of explaining to section 138 of N.I.Act.
SCCH-2 CC.2130 of 11 29 In the instant case, as stated herein above, the Complainant did not produce any documents to show how the cheque amount is legally enforceable debt. Therefore, the decisions cited herein above clearly applicable to the case on hand.
36. On appreciation of entire evidence of both Complainant and Accused, the Accused has created some shadow of doubt in the case of Complainant. It is law that, it is not necessary to prove the case beyond all reasonable doubt. The degree of proof has to be explained, as held in the decision reported in 2011(3) KCCR 1825 (United Distributors Mangalore V/s Geetha K Ray), the Hon'ble Court has held that, "The Accused in an offence punishable under Section 138 of N.I.Act is not expected to prove his defense beyond reasonable doubt as he expected by Complainant in criminal trial."
37. In another case reported in 2011(1) DCR 135 (Mssrs, Barclay Bank PLC V/s. Rajkumar Sharma), the Hon'ble Court has held that, SCCH-2 CC.2130 of 11 30 "In cases under Section 138 of N.I.Act, if two views are possible then version in favour of Accused is to be accepted."
As per the principles laid in the above 2 cases, the Accused has clearly rebutted the presumption which lies in favour of Complainant. The Complainant failed to prove his case with cogent evidence. The Accused has laid rebuttable evidence through oral and documentary evidence, which supports his stand at the same time, it creates genuine doubt in the case of Complainant and the same is reasonable doubt. The burden shifted on the Complainant to clear all these doubts. But the Complainant has failed to do so.
38. As held in the decision K.Subramani Vs- Damodara Naidu, referred supra when legally recoverable debt is not proved by the complainant by establishing his source of income from which alleged loan was made to the Accused. The presumption in favour of holder of the cheque stands rebutted.
39. In Rangappa V/s Mohan case, the Honb'le Supreme court has held that, to rebut the presumption of Section 139 of SCCH-2 CC.2130 of 11 31 N.I. Act, the standard of proof for doing so is that of preponderance of probability. Therefore, if Accused is able to raise the probable defense which creates doubt about existence of legally enforceable debt or liability, the presumption can fail. The Accused can deny all the materials submitted by the Complainant in order to raise such a defense, the Accused need to adduce the evidence of his or her own.
40. No doubt the cheque is primary loan document to prove the liability. In view of the facts and circumstances of the case, initial presumption under Section 118(A) and 139 of NI Act would arise in favour of the Complainant that, the said instrument were issued by the Accused for consideration to discharge legally enforceable debt. This presumption is rebuttable presumption. The Accused by placing the cogent and acceptable materials rebutted the said presumption. Even if presumption is not rebutted in order to attract Section 138 of N.I. Act the debt has to be a legally enforceable debt as is clear from the explanation to Section 138, which provides that, for the SCCH-2 CC.2130 of 11 32 purpose of said section the debt or other liability means legally enforceable debt or other liability.
41. It is relevant to state that the Complainant deposed during cross examination that the subject cheque was issued by the Accused. In this connection it is not out of place to rely on a decision reported in 2010(2) K.L.J. 284 in the case of B. Girish Vs. S. Ramaiah. The Hon'ble High Court of Karnataka in its decision has held thus;
"In the case on hand, it is the specific defence of the Accused that there was no monetary transaction between him and the Complainant and that he has not received any loan from the Complainant at any point of time and the cheque was not issued for discharge of any debt or liability. Admittedly, the Complainant had no financial capacity to pay Rs.50,000/- nor he had any savings. In the absence of any evidence placed by the Complainant, it is highly difficult to believe that he had borrowed money from a Credit Co-operative Society and others for the purpose of lending the loan to the Accused. In addition to this, except the cheque in question, there is no other documentary evidence to show that the SCCH-2 CC.2130 of 11 33 Complainant had lent Rs.50,000/- to the Accused and the Accused had acknowledged the receipt of the same. No contemporary documents have come into existence. When a substantial amount of Rs.50,000/- was lent, it is reasonable to expect that the creditor would insist on the debtor to execute some document evidencing such transaction. Absence of any such documentary evidence would create great amount of doubt about the genuineness of the transaction. Section 269 (ss) of the Income - Tax Act, 1961 insists that all transactions involving Rs.20,000/- and above, should be through 'account payee cheques'. All these circumstances, as rightly pointed out by the learned Magistrate are sufficient to hold that the defence of the Accused is highly probable and that the Accused has rebutted the presumption under Section 139 of the N.I Act".
42. As observed in the above decision, it is incumbent upon the Complainant to support his financial capacity and advancement of money through bank to Accused with documentary proof. If at all the Complainant had paid money to Accused, then it must be an unaccounted amount. In this case the Accused has raised probable defence by replying to the SCCH-2 CC.2130 of 11 34 demand notice at threshold. However, it is the duty of the Complainant to prove his financial capacity.
43. It is relevant to point out that under Section 139 of the Negotiable Instruments Act, provides for the initial presumption in favour of the Complainant unless the contrary is proved. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. In the instant case the initial presumption has been rebutted by the probable defense taken by the Accused by cross-examining PW-1, as appreciated supra. In the result, I am of the considered opinion that the Complainant has failed to prove that the Accused has committed the offence punishable under Section 138 of Negotiable Instruments Act. Accordingly, I answer point No. 1 in the negative.
44. POINT No.2:- In the light of the reasons on the point No.1, I proceed to pass the following;
ORDER Acting under Section 255(1) of Cr.P.C. the Accused is hereby acquitted for the offence SCCH-2 CC.2130 of 11 35 punishable under Section 138 of Negotiable Instruments Act.
The bail bond and surety bond of the Accused is hereby stands cancelled.
(Dictated to the stenographer through online, corrected by me and then pronounced in open court on this the 30th April 2019).
(K.UMA ) VI Addl. Small Causes Judge & XXXI ACMM, Bengaluru.
ANNEXURE
LIST OF WITNESS EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW1 : Sri. Y.B.Narayana
LIST OF DOCUMENTS MARKED ON BEHALF OF
COMPLAINANT:
Ex.P.1 : Cheque
Ex.P1(a) : Signature of Accused
Ex.P.2 : Bank Memo
Ex.P.3 : Copy of Legal notice
Ex.P.4-P7 : Postal receipts
Ex.P.8 : Postal acknowledgement
Ex.P.9 : Reply notice.
Ex.P.10 : Complaint.
SCCH-2 CC.2130 of 11
36
LIST OF WITNESS EXAMINED ON BEHALF OF THE DEFENCE:
DW1 : Sri.Sampath Kumar LIST OF DOCUMENTS MARKED ON BEHALF OF DEFENCE:
Ex.D1 : Certified copy of Reply notice
Ex.D2 : Certified copy of Letter dt.19.09.2011.
(K. UMA )
VI Addl. Small Causes Judge
& XXXI ACMM, Bengaluru.
**