Bangalore District Court
Sri. B. Siddesh Kumar vs S/O. Sri. Batheppa on 7 September, 2020
1 Crl.A.No.25193/2019
IN THE COURT OF THE LXXII ADDL. CITY CIVIL &
SESSIONS JUDGE AT MAYO HALL BENGALURU,
(CCH73)
Present:
Sri.AbdulRahiman. A. Nandgadi,
B.Com, LL.B., (Spl.,)
LXXII Addl. City Civil & Sessions Judge, Bengaluru.
Dated this the 7th day of September, 2020.
Crl. Appeal. No.25193/2019
Appellant/ Sri. B. Siddesh Kumar
Accused: S/o. Sri. Batheppa,
Aged about 39 years
R/at Thirumalashettihalli Village
Anugondanahalli Hobli
Hoskote Taluk
BANGALORE RURAL DISTRICT.
[By Sri. R.A. DEVANAND Advocate]
V/s
Respondent/ N. Narayanaswamy,
Complainant: S/o. Sri. Nadipanna,
Aged about 42 years,
2 Crl.A.No.25193/2019
R/at No.53, 2nd cross
Opp. Mother Teresa School,
Varanasi @ Jinkethimmanahalli,
K.R.Puram Post,
Bengaluru560 036.
(By Sri. M.N.Srinivasa Reddy Adv.)
JUDGMENT
This Appeal is preferred by the Appellant/Accused being aggrieved by the Judgment of conviction, passed by the LVII Addl. CMM, Bangalore, in CC.No.51754 of 2017, dtd.04.07.2019, convicting the Appellant for the offence punishable U/Sec. 138 of NI Act, thereby sentencing him to pay fine of Rs.5,000/, in default to undergo simple imprisonment for a period of three months. And further directed the accused to pay compensation of Rs.45,31,000/ to the Complainant, under Sec.357 of Cr.P.C. In default, to pay the compensation, the Accused shall undergo Simple Imprisonment for a period of one year.
3 Crl.A.No.25193/20192. The Brief facts leading to filing of the present appeal are:
The Respondent filed a Complaint U/Sec.200 of Cr.P.C. against the Appellant alleging that, the Appellant has sought for financial Assistance of Rs.30,00,000/ and on receiving the same had acknowledged the receipt of it, promising to return the said amount with interest. On demand for return of the same, the Appellant had issued two cheques, first Cheque bearing No.233048 dtd.16.08.2016 for the sum of Rs.15,00,000/ and another Cheque bearing No.233047 dtd.18.08.2016 for Rs.15,00,000/, both the Cheques drawn on Cauvery Kalpatharu Grameena Bank, Immadihally Branch, Bengaluru. The Respondent presented the said Cheques for there encashment through his banker SBI, Akshayanagar Branch, Rama Murthy Nagar Extension, Bengaluru, but the said Cheques have returned unencashed with an endorsement as 'Funds insufficient' on 17.08.2016 and 20.08.2016, respectively.4 Crl.A.No.25193/2019
On receipt of the said memos, the Respondent issued a legal notice to the Appellant on 25.08.2016, through his counsel, by RPAD and speed post. The notice sent through RPAD has not been returned but the Complainant has taken the track consignment from the postal Department, which shows that, the said notice is served to the Appellant on 26.08.2016. And the notice sent through speed post has been duly served to the Appellant. After completion of a stipulated period, the Respondent was constrained to file a Complaint before the Trial Court against the Appellant.
3. On being satisfied, the Trial Court issued summons U/Sec.204 of Cr.P.C. to the Appellant on 29.10.2015. The Appellant appeared before the Trial Court on 15.11.2016 and he was enlarged on bail. Substance of Accusation of the Appellant was recorded by the Trial Court on 27.02.2017, wherein the Appellant/Accused pleads not guilty and claims to be tried.
5 Crl.A.No.25193/20194. The Complainant inorder to prove his case got himself examined as P.W.1 and got marked 10 documents as Ex.P.1 to Ex.P.10. PW1 was cross examined on behalf of the Appellant/Accused on 30.12.2017, 08.02.2017, 11.09.2018, 23.10.2018 and 02.01.2019.
5. On 22.02.2018, Statement of the Appellant/Accused was recorded U/Sec. 313 of Cr.P.C. The Appellant/Accused in defence got himself examined as DW.1 and got marked 04documents as Ex.D.1 to Ex.D.4. DW.1 was cross examined on behalf of the Respondent on 04.04.2019.
The Trial Court heard both the sides and has recorded Judgment of Conviction against the Appellant. Hence, the Appellant is before this Court, being aggrieved by the said Judgment of conviction.
6. On filing the appeal by the Appellant/Accused, this Court has suspended the sentence under appeal, 6 Crl.A.No.25193/2019 for a period of three months, initially on 01.08.2019. Notice of the Appeal memo and I.A.No.1 was issued to the Respondent and TCR were calledfor. Respondent setin his appearance on 30.09.2019. TCR were secured on 03.09.2019.
7. Heard the Learned Counsels for the Appellant/Accused and the Respondent/Complainant, respectively.
The learned counsel for the Appellant has relied upon the decisions reported in 1) (2015) 1 SCC 99; 2) (2000) 7 SCC 333; 3) (2004) 10 SCC 88; 4) (2008) 4 SCC 54; 5) (6) SCR 320; 6) (2001) 6 SCC 16; 7) (2008) 1 SCC 258; 8) (2014) 2 SCC 236; 9) (2013) 3 SCC 86; 10) AIR 1961 SC 1316; Apart from placing his reliance on the decisions cited before the Trial Court viz., 1) 2009 Crl.L.J. 377; 2) (2009) 6 SCC 72. Further, the Learned Counsel for the Appellant has filed a memo along with typed copy of the extract of Ex.P10 showing the balance of the amount. Percontra, the Learned Counsel for the Respondent has placed reliance upon the 7 Crl.A.No.25193/2019 decisions 1) CDJ 2008 SC 2080; 2) CDJ 2019 SC 1201;
3) CDJ 2020 Ker HC 553; 4) CDJ 2018 DHC 1476; 5) CDJ 2013 DHC 1067, apart from the decisions relied before the Trial Court viz., 1) CDJ 2013 BHC 1205; 2) AIR 2010 SUPREME COURT 1898; 3) CRIMINAL APPEAL NO.245/2010; 4)CDJ 2008 SC 1055; 5) CRR 5263/2018 Madhya Pradesh High Court; 6) Criminal Appeal No.230231/2019 (@ SLD (crl) No.9334 35/2018); 7) CDJ 2014 MHC 5660.
8. The Appellant has preferred this appeal on the following grounds:
Grounds of Appeal:
a) The Trial Court has gravelly erred in convicting the Appellant for the offence punishable U/Sec. 138 of N.I. Act, which is manifestly erroneous and opposed to the facts and circumstances of the case;
b) The Trial Court has miserably failed to appreciate the oral and documentary evidence on record, in a proper and perspective manner;
c) The Trial Court has failed to consider that, there exist no any legally enforceable debt against the 8 Crl.A.No.25193/2019 Appellant/Accused, thereby there exist no any recoverable debt against the Appellant and the Cheques in question were not given by the Accused muchtheless towards the discharge of any debts, as contended by the Complainant;
d) The Trial Court has failed to consider that, the Accused had borrowed Rs.10,00,000/ from one Jinke Kempanna and the Cheques in question were issued as a blank signed Cheques to him, as a security;
e) The Trial Court has failed to consider that there is no any contractual nexus inbetween the Complainant and the Accused; but the said Jinke Kempanna has projected the Complainant for encashing the blank signed Cheques, by filling the contents and has insisted the Complainant to file the present Complaint;
f) The Trial Court has unnecessary observed in its judgment at para No.32 with regard to the clause found in Ex.P9 ;
g) The Trial Court has totally failed to place his reasonings in respect of Ex.P10 Bank statement in its entire judgment;
h) The Trial Court has wrongly arrived at a conclusion that, the Complainant has discharged his initial burden to avail the benefit of presumption, but the Accused has not rebutted the said presumption;9 Crl.A.No.25193/2019
Hence, prayed to allow the said appeal.
9. Following points arise for my consideration;
1. Whether the Respondent/ Complainant is initially entitle for the benefit of presumption, available U/Sec. 139 of N.I. Act?
2. Whether the Respondent/ Complainant proves that, the Accused had issued ChequesEx.P.1 and Ex.P.2 to him towards repayment of an amount of Rs.30,00,000/ ?
3. Whether the Appellant/Accused shows that, he had issued the signed blank Cheques to one Jinke Kempanna as security for obtaining an amount of Rs.10,00,000/; and has not issued the ChequesEx.P.1 and Ex.P.2 to the Respondent/Complainant?
4. Whether the Appellant/Accused has rebutted the presumption available to the Complainant U/Sec.139 of N.I. Act?
10 Crl.A.No.25193/20195. Whether the Appellant/Accused shows that there is violation of Sec.269 SS of the Income Tax Act?
6. Whether the Appellant/Accused show that the observations made by the Trial Court in para No.32 of its judgment relating to the clause available in Sale Deed Ex.P9, is uncalled for?
7. Whether the Appellant/Accused shows that the Order of Conviction and Sentence recorded by the Trial Court in C.C.No.51754/2017, dtd.04.07.2019, deserves to be setaside, and thereby call for the interference of this Court?
8. What Order?
10. My finding on the above points are as under:
Point No.1 : In the Affirmative; Point No 2 : In the Negative;
Point No 3 : In the Negative;
Point No 4 : In the Affirmative; Point No 5 : In the Negative;11 Crl.A.No.25193/2019
Point No 6 : In the Affirmative; Point No.7 : In the Affirmative; Point No.8 : As per final order for the following :
REASONS
11. Point No.1: The rank of parties will be referred to, as they were before the Trial Court.
As per the averments of the Complainant in the complaint, wherein it is contended that, the Accused approached him in the month of Feb. 2016 and sought for financial assistance as he was in severe financial constraint and difficulty. As per the request of the Accused, the Complainant paid an amount of Rs.30,00,000/ to him in the month of Feb. 2016. The Accused has acknowledged the receipt of the said cash. Inorder to repay the said amount, the Accused issued two Cheques ExP.1 and Ex.P.2. On receipt of the said cheques, the Complainant presented it, for there encashment through its banker State bank of India, 12 Crl.A.No.25193/2019 Akshayanagar Branch, Ramamurthy Extension, Bengaluru. The said Cheques have returned unencashed with an endorsement "Funds Insufficient"
on 17.08.2016 and 20.08.2016 as per Ex.P3 and Ex.P.4, respectively. Thereafter the Complainant issued the legal notice to the Accused through his counsel on 25.08.2016 as per Ex.P5, by RPAD, Postal Receipt Ex.P6. The said notices are served upon the Accused, the Complainant has produced the track consignment report at Ex.P.7 and Ex.P.8.
On the basis of the preliminary evidence, the Trial Court has issued summons to the Accused on 14.03.2017. I have perused the said orders, I do not find any error, in it.
12. The Accused has appeared before the Trial Court on 11.04.2017 and he was enlarged on bail. The Trial Court has recorded Plea/Substance of Accusation of the Accused on 15.06.2017. I have perused the substance of Accusation recorded by the Trial Court. I do not find any error, in it.
13 Crl.A.No.25193/201913. On careful perusal of the evidence led by the Complainant as well as the Accused, it is the case of the Complainant that, inorder to repay an amount of Rs.30,00,000/ for having received as a handloan, the Accused issued the cheques as per Ex.P1 and Ex.P.2, which is dishonoured, as per the endorsement Ex.P3 and Ex.P.4.
14. The defence taken up by the Accused is that, he has not issued the Cheques Ex.P1 and Ex.P.2 towards payment of any amount, muchtheless towards the handloan of Rs.30,00,000/ to the Complainant. But, he had issued the said Cheques to one Jinke Kempanna, as security for obtaining loan of Rs.10,00,000/.
As per the defence of the Accused, the Accused admits that, the Cheques Ex.P1 and Ex.P.2, belongs to him and the signature found on themselves belongs to him. But, the Accused contends that, he has not issued 14 Crl.A.No.25193/2019 the said Cheques towards the repayment of the alleged handloan of Rs.30,00,000/.
Further, as per the ocular evidence of the Accused, more specifically, examination in chief of DW1, Page No.2, Para No.2, line Nos.1 to 3, which read as under:
"ನನಗ ಕನನಡ ಒದಲಲ ಬರಯಲಲ ಬರಲತತದ. ಆಆಗಗ ಭಷಷ ಬರಲವದಲಗ. ನಪ.1 ಮತಲತ 2 ರಲರಲವ ಸಹ ಮತ ತ ನನನದರಲತತದ, ಅದರಲ ಮಡದ ಬರವಣಗ ನನನದಲಗ. ...."
As per this evidence, the Accused contends that, he knows Kannada language to read and write but does not know English language. Further he admits that, signature found on Ex.P1 and Ex.P.2 Cheques belongs to him, but the writings on the said Cheques does not belongs to him.
Further as per the crossexamination of PW.1, at Page No.3, Para No.1, Line Nos.2 and 3, which read as under;
".... the Signature now shown to me in Ex.P.1 (a) and 2(a) are my signatures. ......"15 Crl.A.No.25193/2019
As per this, the Accused admits his signatures on Ex.P.1 and Ex.P.2 Cheques.
15. Thus, as per the documentary evidence produced by the Complainant as per Ex.P1 to Ex.P8 and on the basis of the Defence taken up by the Accused, it can be said that the Complainant has initially proved that, the Cheques Ex.P1 and Ex.P.2 belongs to the Accused and the signature on the said Cheques is of the Accused. And on presenting the said Cheques, the same have returned unencashed as per Ex.P3 and Ex.P.4, for which he has issued legal notice as per Ex.P5, which has been served on the Accused, as can be sen as per Ex.P.7 and Ex.P.8.
16. On viewing the amount of oral evidence with Ex.P.1 to Ex.P.8, which will suffice the Complainant, to have benefit of presumption available U/Sec.138, 139 of N.I. Act.
As per the trite principle of law dealing with the presumption U/Sec.138 & 139 of N.I.Act and as per the 16 Crl.A.No.25193/2019 dictum laid down by the Hon'ble Apex Court in the case of K. Subramani V/s K. Damodara Naidu, reported in 2014 (12) SCALE 677, as well as in the case of Rangappa V/s Mohan, reported in (2010) 11 SCC 441, wherein it is held that, "Presumption U/Sec.139 of N.I.Act accrues to the benefit of the Complainant, unless the Accused rebut that presumption".
Now it is for the Accused to rebut the said presumption available to the Complainant U/Sec.139 of N.I.Act.
Therefore, Complainant has shown that he is initially entitle for the benefit of Presumption available U/Sec. 139 of N.I. Act. Hence, Point No.1 is answered IN THE AFFIRMATIVE.
17. POINT Nos.2 to 4:
All these three points are interlinked with each other, so they are taken for joint discussion inorder to avoid repeatation and to have brevity in the discussion.17 Crl.A.No.25193/2019
17.1. The Learned Counsel for the Appellant would contend that the Respondent/Complainant has to prove that the consideration of Rs.30,00,000/ is passed to the Accused for issuance of ChequesEx.P.1 and Ex.P.2 by him, when the Accused has denied the receipt of the said amount/consideration/Rs 30,00,000/, as it will also form one of the ingredients for formation of an offence U/Sec. 138 of N.I. Act.
The Learned Counsel for the Appellant has placed his reliance on the below mentioned decisions:
a) of the Hon'ble Apex Court in the case of Krishna Janardhan Bhat V/s Dattatreya G. Hegde, reported in (2008) 4 SCC 54, wherein it is held that, "Sec. 139 of N.I. Act, merely raises a presumption infavour of holder of the Cheque that the said Cheque has been issued for discharge of any debt or other liability. Existence of legally recoverable debt is not a matter of presumption U/Sec. 139 of N.I. Act."
Further in para No.30 of the Judgment, it is observed as under;
18 Crl.A.No.25193/2019" The proviso appended to the said section provides for compliance with legal requirements before a Complaint petition can be acted upon by a Court of law. Section 139 of the Act merely raises a presumption inregard 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 the cheque that the same has been issued for discharge of any debt or other liability".
b) of the Hon'ble Apex Court in the case of Hiten P Dalal V/s Bratindranath Banerjee, reported in (2001) 6 SCC 16, wherein it is held that, " It is obligatory on the Court to presume the liability of the drawer for the amount of Cheque in every case where the factul basis for such presumption is established. Such a presumption can be rebutted by the drawer by proving on evidence that the holder of the Cheque had not received the same towards the 19 Crl.A.No.25193/2019 discharge of any liability. Such rebuttal does not have to be conclusively established. The Court may either believe the defence to exist or consider its existence to be reasonably probable."
c) of the Hon'ble Apex Court in the case of K. Prakashan V/s V.K. Surendran, reported in (2001) 6 SCC 16, wherein it is observed in para No.13, 14 and 17 as under;
"13. The Act raises two presumptions: firstly, in regard to the passing of consideration as contained in Section 118(a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability. Presumptions both under Sections 118(a) and 139 are rebuttable in nature. Having regard to the definition of terms "proved" and "disproved" as contained in Section 3 of the Evidence Act, as also the nature of the said burden upon the prosecution visavis an accused, it is not necessary that the accused must 20 Crl.A.No.25193/2019 step into the witness box to discharge the burden of proof in terms of the aforementioned provision.
14. It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability.
17. The question came up for consideration before a bench of this Court in M.S. Narayana Menon (2006) 6 SCC 39: (2006) 3 SCC (Cri).30 wherein it was held: (SCC Partition.52 paras 3839) "38. If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a 'fortiori' even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court.21 Crl.A.No.25193/2019
39. A presumption is a legal or factual assumption drawn from the existence of certain facts."
It was furthermore opined that if the accused had been able to discharge his initial burden, thereafter it shifted to the second respondent in that case".
d) of the Hon'ble Apex Court in the case of Johan K. Abraham V/s Simon Abraham & Another, reported in (2014) 2 SCC 236, wherein it is held that, "Inorder to draw presumption U/Sec. 118 R/W Sec. 139, burden lies on the Complainant to show: (i) that he had the requisite funds for advancing the sum of money/loan in question to the Accused; (ii) that the issuance of the Cheque by the Accused in support of repayment of money advanced was true; and (iii) that the Accused was bound to make payment as had been agreed while issuing the Cheque infavour of the Complainant".
22 Crl.A.No.25193/2019e) of the Hon'ble Apex Court in the case of Vijay V/s Lakshman & Another, reported in (2013) 3 SCC 86, wherein it is held that, "Standard of proof required for rebutting the presumption U/Ss. 118
(a) and 139 of N.I. Act is not as high as that required of the prosecution and the same is rebuttable on the preponderance of probabilities".
f) of the District Court of Delhi, in the case of Smt. Neena Gupta V/s Mr. Alok Gupta (CC.No.547/2016, date of decision 13.08.2020, wherein it is observed at Para No.16 as under:
"16. Thus, Section 139 of the Act puts the burden on the Accused to prove his defence. However, the Accused has to prove his defence on the balance of probabilities and not beyond reasonable doubt. Once the presumption is displaced, the Accused is liable to be acquitted".23 Crl.A.No.25193/2019
g) of the Hon'ble Apex Court in the case of State of T.N. V/s A. Vaidyanathan Iyer, reported in AIR 1958 SC 61, wherein it is observed that, " Shall presume is a presumption of law and may presume is a presumption of fact. Both these phrases have been defined in the Indian Evidence Act, but Sec. 4 of the Prevention of Corruption Act, is in pari matria with the Evidence act, because it deals with a branch of law of Evidence, e.g., presumptions, and therefore should have the same meaning "Shall presume" as has been defined in Evidence Act".
The Learned Counsel for the Appellant has drawn the attention of this Court to the citations relied by him before the Trial Court, namely,
h) of the Hon'ble High Court of Bombay, in the case of Sanjay Mishra V/s Kanishka Kapoor @ Nikki & Another, reported in (2009) Crl.L.J. 3777, wherein it is observed at Para Nos.12 and 13 as under, 24 Crl.A.No.25193/2019 "12. Now turning back to the facts of the present case, assuming that the presumption under Section 139 of the said Act regarding existence of debt or liability is not rebutted, in order to attract Section 138, the debt or liability has to be a "legally recoverable" debt or liability. As held by the Apex Court in the case of Krishna Bhat (AIR 2008 SC 1325) (supra) there is no presumption under Section 139 of the said Act that the debt is a legally recoverable debt. In the case of Goa Plast (P) Ltd. v. Chico Ursula D'Souza (2004) 2 Supreme Court Cases 235) the Apex Court reiterated that a debt or liability subject matter of Section 138 means a legally enforceable debt or liability."
"13. In the present case, there is a categorical admission that the amount allegedly advanced by the applicant was entirely a cash amount and that the amount was "unaccounted". He admitted not only that the same was not disclosed in the Income Tax Return at the relevant time but till recording of evidence in the year 2006 it was not disclosed in 25 Crl.A.No.25193/2019 the Income Tax Return. By no stretch of imagination it can be stated that liability to repay unaccounted cash amount is a legally enforceable liability within the meaning of explanation to Section 138 of the said Act. The alleged debt cannot be said to be a legally recoverable debt."
i) of the Hon'ble Apex Court in the case of Raj Kumar Khurana V/s State of (NCT of Delhi) & Another, reported in (2009) 6 SCC 72, wherein it is observed in Para Nos.12 and 13 as under;
" 12. The parameters for invoking the provisions of Section 138 of the Act, thus, being limited, we are of the opinion that refusal on the part of the bank to honour the cheque would not bring the matter within the mischief of the provisions of Section 138 of the Act."
"13. The Court while exercising its jurisdiction for taking cognizance of an offence under Section 138 of the Act was required to consider only the allegations made in the complaint petition and the evidence of the 26 Crl.A.No.25193/2019 complainant and his witnesses, if any. It could not have taken into consideration the result of the complaint petition filed by the Respondent 2 or the closer report filed by the Superintendent of Police in the first information report lodged by the appellant against him."
18. Per contra, the Learned Counsel for the Respondent would contend that when once the Cheque and the signature on the said Cheque, is admitted by the Accused, presumption U/Sec. 139 of N.I. Act, is to be raised, then it is for the Accused to rebut the said presumption by probable defence. The Learned Counsel for the Respondent has placed his reliance on the below mentioned decisions:
a) of the Hon'ble Apex Court, in the case of M/s. Kumar Exports V/s M/s. Sharma Carpets, reported in CDJ 2008 SC 2080, wherein it is held that, " The defence of the Appellant that blank Cheques were obtained by the Respondent as advance payment 27 Crl.A.No.25193/2019 also become probable and the onus of burden would shift on the Complainant. The Complainant did not produce any books of accounts or stock register maintained by him, in the course of his regular business or any acknowledgment for delivery of goods to establish the fact. Having regard to the materials on record, this court is of the opinion that Respondent failed to establish his case U/Sec. 138 of the Act as required by law."
b) of the Hon'ble Apex Court in the case of Uttam Ram V/s Devinder Singh Hudan & Another, reported in (2019) 10 SCC 287, wherein it is held that, "There is a mandate of presumption of consideration in terms of the provisions of the Act, the onus shifts to the Accused on proof of issuance of Cheque to rebut the presumption that the Cheque was issued not for the discharge of any debt or liability in terms of Sec. 138 of N.I. Act".28 Crl.A.No.25193/2019
c) of the Hon'ble High Court of Kerala, in the case of Sunitha V/s Sheela Anthony & Another, reported in 2020 (3) KLJ 200, wherein it is observed in Para No.27 as under:
"27. In my view, the crux of the decisions referred to above is the following: The complainant has no obligation, in all cases under Section 138 of the Act, to prove his financial capacity. But, when the case of the complainant is that he lent money to the Accused by cash and that the Accused issued the cheque in discharge of the liability, and if the accused challenges the financial capacity of the complainant to advance the money, despite the presumption under Section 139 of the Act, the complainant has the obligation to prove his financial capacity or the source of the money allegedly lent by him to the accused. The complainant has no initial burden to prove his financial capacity or the source of the money. The obligation in that regard would arise only when his capacity or capability 29 Crl.A.No.25193/2019 to advance the money is challenged by the Accused."
d) of the Hon'ble High Court of Delhi, in the case of Vedprakash Kharbanda V/s Vimal Bindal, reported in CDJ 2013 DHC 1067, wherein it is observed at 21.1 and 21.2 as under;
"21.1. 21.1. What is 'Truth' and how to discover it * Law's Truth is synonymous with facts established in accordance with the procedure prescribed by law. * The purpose of judicial inquiry is to establish the existence of facts in accordance with law.
* Facts are proved through lawfully prescribed methods and standards. * The belief of Courts about existence of facts must be based on reason, rationality and justification, strictly on the basis of relevant and admissible evidence, judicial notice or legally permitted presumptions. It must be based on a prescribed methodology of proof. It must be objective and verifiable.
21.2. Section 3 of Indian Evidence Act, 1872 -30 Crl.A.No.25193/2019
* 'Evidence' of a fact and 'proof' of a fact are not synonymous terms. 'Proof' in the strict sense means the effect of evidence.
* A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
* The term 'after considering the matters before it' in Section 3 of the Evidence Act means that for judging whether a fact is or not proved, the Court is entitled to take into consideration all matters before it which shall include the Statement of the witnesses, admissions of the parties, confession of the accused, documents proved in evidence, judicial notice, demeanour of witnesses, local inspections and presumptions.
* The term 'believes it to exist' in the definition of 'proof' is a 'judicial belief' of the Judge based on logical/rational thinking and the power of reason, and the Court is required to give reasons for the belief.31 Crl.A.No.25193/2019
The reasons are live links between the mind of the decision maker and the belief formed. Reasons convey judicial idea in words and sentences. Reasons are rational explanation of the conclusion. Reason is the very life of law. It is the heart beat of every belief and without it, law becomes lifeless. Reasons also ensure transparency and fairness in the decision making process. The reasons substitute subjectivity by objectivity. Recording of reasons also play as a vital restraint on possible arbitrary use of the judicial power. The recording of reasons serve the following four purposes".
The Learned Counsel for the Respondent has drawn the attention of this Court to the citations relied by him before the Trial Court, namely,
e) of the Hon'ble High Court of Bombay, in the case of Krishna P. Morajkar V/s Joe Ferrao & Another, reported in CDJ 2013 BHC 1205, wherein it is observed at 17 as under;
"17. As already observed the Judgment in Krishna Janardhan Bhat 32 Crl.A.No.25193/2019 (supra), in so far as it relates to interpretation of Sec. 139 of N.I. Act, has been overruled by a Three Judges of Bench of the Supreme Court in Rangappa (supra). In Rangappa (supra) the Supreme Court was considering an appeal against conviction, recorded by the High Court reversing an acquittal by the Court below for the offence punishable U/Sec. 138 of N.I. Act."
f) of the Hon'ble Apex Court, in the case of Rangappa V/s Mohan, reported in AIR 2010 SC 1898, wherein it is held that, " The presumption mandated by Sec. 139 of the Act, does indeed include the existence of a legally enforceable debt or liability. To that extent impugned observations in Krishna Janardhan Bhat (supra) may not be correct."
g) of the Hon'ble High Court of Karnataka, in the case of H.S.Seetharamaiah V/s H.C.Rajanna, (Crl.Appeal No.254/2010, date of decision 05.11.2016), wherein it is held that, 33 Crl.A.No.25193/2019 " Reliance sought to be placed on a Judgment of the Madras High Court to the effect that the burden is on the Complainant to establish that the Cheque as issued for a legally enforceable debt is an incorrect proposition in the face of Sec. 139 of the N.I. Act. As well as holding that no interest was charged on the loan amount amounts to suspicion, is again not a finding which was warranted, as it is parties to the contract, in the manner they choose".
h) of the Hon'ble Apex Court, in the case of Mallavarapu Kashi Visweswara Rao V/s Thadikonda Ramulu Firm & Others, reported in CDJ 2008 SC 105, wherein it is observed in Para No.12 as under;
"12. Under Section 118(a) of the Negotiable Instruments Act, the Court is obliged to presume, until the contrary is prove, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the nonexistence of consideration by bringing on record such facts and circumstances which would lead 34 Crl.A.No.25193/2019 the Court to believe the nonexistence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal...."
i) of the Hon'ble High Court of Madhya Pradesh, in the case of Smt. Ragini Gupta V/s Piyush Dutt Sharma, (CRR) 5263/2018 date of decision 07.03.2019, wherein it is observed that;
"Whether there was any loan transaction, between the parties or not and whether there was any legally recoverable debt or not, is the subject matter which can be ascertained in the light of entire case led by the parties. Whether the Accused has failed to satisfactorily explained the circumstances under which the Cheque was issued by the Accused or misused by the Complainant, then it can be safely inferred/presumed that the Cheque was issued in discharge of legally recoverable debt/liability".
j) of the Hon'ble Apex Court, in the case of Bir Singh V/s Mukesh Kumar, (Crl Appeal Nos.230 35 Crl.A.No.25193/2019 231 of 2019, date of decision 06.02.2019, wherein it is observed at Para Nos.36 to 38 and 43 as under;
"36. The proposition of law which emerges from the judgments referred to above is that the onus to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt or liability is on the Accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act."
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a 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. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted."36 Crl.A.No.25193/2019
"38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the Accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
"43. In our considered opinion, the High Court patently erred in holding that the burden was on the AppellateComplainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellantcomplainant became highly doubtful or not beyond reasonable doubt is patently erroneous for the reasons discussed above."
k) of the Hon'ble High Court of Judicature at Madras, in the case of C. Dari Swamy V/s K. Balakrishnan & Another, reported in CDJ 2014 MHC 5660, wherein it is held that, "Presumption under a statue has only an evidentiary value. Presumptions are raised in terms of the Evidence Act. Presumption 37 Crl.A.No.25193/2019 drawn inrespect of one fact may be an evidence even for the purpose of drawing presumption under another.
Relying the decision of the Hon'ble Apex Court in the case reported in (2013) 3 SCC 86, it is observed in para No.10, that, "Presumption initially raised in favour of the Complainant and after holding that the Accused rebutted the presumption by probable defence, held that the Complainant failed to prove the passing of consideration and the Cheque was issued for legally enforceable debt."
19. a) As per the decision of the Hon'ble Apex Court in the case of Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, reported in (1999) 3 SCC 35, it is observed in para No.12 as under:
"12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption U/Sec.118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The Defendant can prove the nonexistence of a consideration by raising a probable defence. If the 38 Crl.A.No.25193/2019 defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Plaintiff who will be obliged to prove it as a matter of fact Accused upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the Plaintiff is entitled under law to rely upon all the evidence led in the case including that of the Plaintiff as well. In case, where the Defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the Plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The Court may not insist upon the Defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor 39 Crl.A.No.25193/2019 contemplated and even if led, is to be seen with a doubt."
b) As per the decision of the Hon'ble Apex Court, in the case of Hiten P. Dalal V. Bratindranath Banerjee 8 (2001) 6 SCC 16: 2001 SCC (Cri) 960, wherein it is observed in para Nos.22 and 23 as under;
"22......Presumptions are rules of evidence and do not conflict with the presumption of innocent, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the Accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non existence of the presumed fact.
23. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, 40 Crl.A.No.25193/2019 'after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists'.
Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'."
c) As per the decision of the Hon'ble Apex Court, in the case of M.S.Narayana Menon v. State of Kerala 5 (2006) 6 SCC 39: (2006) 3 SCC (Cri) 30, it was held that, "Once the accused is found to discharge his initial burden, it shifts to the complainant."
d) As per the decision of the Hon'ble Apex Court, in the case of Goaplast (P) Ltd. v. Chico Ursula D'Souza (2003) 3 SCC 232 : 2003 SCC (Cri) 603, wherein it is observed at para 6, as under;
41 Crl.A.No.25193/2019"6. ... The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act which is to promote the efficacy of banking operation and to ensure credibility in the business transactions through banks persuades us to take view that by countermanding payment of postdated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view would render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong. If we hold otherwise, by giving instructions to banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal consequences under Section
138. Once a cheque is issued by a drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment it will not preclude an action under Section 138 42 Crl.A.No.25193/2019 of the Act by the drawee or the holder of the cheque in due course. This was the view taken by this Court in Modi Cements Ltd. v. Kuchil Kumar Nandi (1998) 3 SCC
249. On same facts is the decision of this Court in Ashok Yeshwant Badave v. Surendra Madhavrao Nighojakar (2001) 3 SCC 726. The decision in Modi case (1998) 3 SCC 249 overruled an earlier decision of this Court in Electronics Trade & Technology Development Corpn. Ltd. v.
Indian Technologists & Engineers (Electronics) (P) Ltd (1996) 2 SCC 739:
1996 SCC (Cri) 454 which had taken a contrary view. We are in respectful agreement with the view taken in Modi Case (1998) 3 SCC 249. The said view is in consonance with the object of the legislation. On the faith of payment by way of a postdated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the transaction out of the purview of Section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date."43 Crl.A.No.25193/2019
e) As per the decision of the Hon'ble Apex Court in P.Venugopal v. Madan P.Sarathi, it is held that;
"Under Sections 139, 118(a) and 138 of the NI Act existence of debt or other liabilities has to be proved in the first instance by the complainant but thereafter the burden of proving to the contrary shifts on the accused. Thus, the plea that the instrument/cheque had been obtained from its lawful owner or from any person in lawful custody thereof by means of an offence or fraud or had been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of disproving that the holder is a holder in due course, lies upon him. Hence, this Court observed therein, that indisputably, the initial burden was on the complainant but the presumption raised in favour of the holder of the cheque must be kept confined to the matters covered thereby. Thereafter, the presumption raised does not extend to the extent that the cheque was not issued for the discharge of any debt or liability which is not required to be proved by the complainant as this is essentially a question of fact and it is the defence which has to prove that the cheque was not issued towards discharge of a lawful debt.44 Crl.A.No.25193/2019
f) Further in an Article, 'The Presumption of Innocence and Reverse Burdens, A Balancing Duty published in 2007 CLJ (March Part) 142 it has been stated:
"In determining whether a reverse burden is compatible with the presumption of innocence regard should also be had to the pragmatics of proof. How difficult would it be for the prosecution to prove guilt without the reverse burden? How easily could an innocent Defendant discharge the reverse burden? But courts will not allow these pragmatic considerations to override the legitimate rights of the Defendant. Pragmatism will have greater sway where the reverse burden would not pose the risk of great injusticewhere the offence is not too serious or the reverse burden only concerns a matter incidental to guilt. And greater weight will be given to prosecutorial efficiency in the regulatory environment."45 Crl.A.No.25193/2019
20. In order to determine the question whether offence punishable under Section 138 of the N.I. Act is made out against the Appellant, it will be necessary to examine the scope and ambit of the presumptions to be raised, as envisaged by the provisions of Sections 118 and 139 of the Act. In a suit to enforce simple contract, the plaintiff has to aver in his pleading that it was made for good consideration and must substantiate it by evidence. But to this rule, the negotiable instruments are an exception. In a significant departure from the general rule applicable to contracts, Section 118 of the N.I. Act provides, certain presumptions to be raised. This section lays down some special rules of evidence relating to presumptions. The reason for these presumptions is that, Negotiable Instrument passes from hand to hand on endorsement and it would make trading very difficult and negotiability of the instrument impossible, unless certain presumptions are made. The presumption, therefore, is a matter of principle to facilitate negotiability as well as trade.
46 Crl.A.No.25193/2019Section 118 of the N.I. Act provides presumptions to be raised until the contrary is proved (i) as to consideration, (ii) as to date of instrument, (iii) as to time of acceptance, (iv) as to time of transfer, (v) as to order or endorsements, (vi) as to appropriate stamp and (vii) as to holder being a holder in due course. Section 139 of the N.I. Act provides that, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.
Presumptions are devices by use of which the Courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence.
Under the Indian Evidence Act, all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable) and (3) "conclusive presumptions" (irrebuttable). The term 'presumption' is used to designate an inference, 47 Crl.A.No.25193/2019 affirmative or disaffirmative of the existence of a fact, conveniently called as the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal.
Presumption literally means "taking as true without examination or proof".
Section 4 of the Evidence Act interalia defines the words 'may presume' and 'shall presume' as follows: "(a) 'may presume' - Whenever it is provided by this Act that the Court may presume a fact, it may either regard such fact as proved, unless and until it is disproved or may call for proof of it.
(b) 'shall presume' Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved."
In the former case the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the 48 Crl.A.No.25193/2019 Court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved.
Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every Negotiable Instrument was made or drawn for consideration. Section 139 of the Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque for the discharge of, whole or part of any debt or liability. Applying the definition of the word 'proved' in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the N.I. Act, it becomes evident that in a trial under Section 138 of the N.I. Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was 49 Crl.A.No.25193/2019 executed by the Accused, the rules of presumptions under Sections 118 and 139 of the Act help him when the contrary is proved by the Accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.
50 Crl.A.No.25193/2019The accused in a trial under Section 138 of the Act has two options:
a) He can either show that consideration and debt did not exist; or
b) that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed.
To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The Accused may adduce direct evidence to prove that the note (in the present case the chequesExP1 and ExP2) in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the Accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the 51 Crl.A.No.25193/2019 consideration and existence of debt, apparently would not serve the purpose of the Accused. Something which is probable has to be bought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the Accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the Accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The Accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the 52 Crl.A.No.25193/2019 averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under sections 118 and 139 of the Act will not again come to the complainant's rescue. I find force to my above opinion as per the decision of the Hon'ble Apex Court in the case of Vijay V/s Laxman & Another, reported in (2013) 3 SCC 86.
21. Applying the above preposition of law to the instant case at hand, it can be seen that as per the suggestions made to the Complainant on behalf of the Accused, which can be seen as per the cross examination of PW.1, Page No.10, Line Nos.2 to 9, which reads as under;
" ......It is false to suggest that the Accused never approached me for any loan.53 Crl.A.No.25193/2019
I do not remember who has introduced the Accused to me as I know him since 15 years. It is false to suggest that, I am closely associated with Kempanna of Jinke Thimmanahalli. I have filed this case, on his behalf inorder to help him. It is false to suggest that there is no necessity for the Accused to borrow loan from me out of my aforesaid sale consideration...."
As per the said suggestion, the Accused contends that, he has never approached the Complainant; the Complainant had never paid an amount of Rs.30,00,000/ to him; and he has not issued the Cheques Ex.P.1 and Ex.P.2, inorder to pay the alleged amount of Rs.30,00,000/ to him.
Under such circumstances, the Complainant has to firstly, show that he has paid Rs.30,00,000/ to the Accused. This aspect is to be seen under the light of the following materials on record, as per (a) to (j), as under:
a) the Complainant has averred in the Complaint that, payment of cash amount of Rs.30,00,000/ is duly acknowledged by a receipt, by the Accused. This 54 Crl.A.No.25193/2019 averments can be seen in the Complaint at Page No.2, Para No.3, Line Nos.6 to 10, which reads as under;
"..........Believing Accused words and with good faith and intention to help Accused, Complainant had parted Accused a sum of Rs.30,00,000/( Rupees Thirty Lakhs Only) during the month of February 2016 and Accused collected the cash sum of Rs.30 lakhs from the Complainant and duly acknowledge the receipt of cash. .."
Further the Complainant has produced the legal notice issued to the Accused at Ex.P.5 and even in the said notice it is averred at Para No.1 that, the Accused has duly acknowledged the receipt of cash.
But on careful perusal of the evidence led by the Complainant as PW.1, more specifically, in the examination in chief of PW.1, the above recitals found in the Complaint is missing in it.
When the Complainant contends that, the Accused has acknowledged the receipt of cash and in the counter when the Accused denies the receipt of cash, it was the duty of the Complainant to produce the receipt to prove the fact of payment of cash by him, to the 55 Crl.A.No.25193/2019 Accused. Nonproduction of receipt by the Complainant in the presence of his clear pleadings, creates a doubt.
b) The Complainant contends that he has made the payments of Rs.30,00,000/ to the Accused.
Firstly, the Complainant has contended in the Complaint that he has made such payments in the month of Feb. 2016, but has not disclosed as to on which day exactly such payments were made to the Accused.
Secondly, the Complainant has not stated in his evidence as to exactly on which date he has made the payments to the Accused.
Thirdly, in the evidence, more specifically, in the crossexamination of PW.1, the Complainant has stated that he has made the payments to the Accused on 18.02.2016, which can be seen as per the cross examination of PW.1, at Page No.4, Line Nos.10 to to 13, which reads as under;
"...... I have paid Rs.30,00,000/ to the Accused on 18.02.2016. The Accused 56 Crl.A.No.25193/2019 approached me for loan in the first week of Feb. 2016 and I have paid the money to him on 18.02.2016. ....."
Further, in the evidence more specifically in the crossexamination of PW.1, the Complainant again contends that he has paid the amount to the Accused on 20.02.2016, which can be seen as per the cross examination of PW.1, at Page No.9, Line Nos.4 to 6, which reads as under;
"...... It is true that I could have obtained the Cheque from the Accused when I have advance the money to the Accused on 20.02.2016. ...."
Further as per the crossexamination of PW.1 at Page No.16, Para No.1, Line Nos.11 to 13, which reads as under;
"...... It is true that I have stated during my cross examination that I have paid Rs.30,00,000/ to the Accused on 20.02.2016 and the said statement is correct. ...."
As per this evidence, two versions are coming from the side of the Complainant, wherein he contends that, 57 Crl.A.No.25193/2019 he has paid an amount of Rs.30,00,000/ in cash to the Accused, in one breadth on 18.02.2016 and in another breadth on 20.02.2016. the Complainant is not firm to contend as to when, on which date he has paid the amount of Rs.30,00,000/ to the Accused.
Further as per the crossexamination of PW.1, at Page No.5, Line Nos.4 to 6, which reads as under;
"...... I have withdrawn Rs.10,00,000/ from the Bank on 18.02.2016 and Rs.10,00,000/ on 19.02.2016 and I had Rs.10,00,000/ in cash with me. ......"
The Complainant has produced the bank statement at Ex.P.10. On careful perusal of this statement, it can be seen that on 18.02.2016 the Complainant has withdrawn Rs.10,00,000/ and on 19.02.2016 he has withdrawn Rs.10,00,000/.
Further as per the crossexamination of PW.1,at Page No.8, line Nos.1 to 7, which reads as under;
"...... When it is questioned to the witness that the amount of Rs.10,00,000/ that has been paid to 58 Crl.A.No.25193/2019 the Accused as a loan was a part of the sale consideration that has been deposited to the bank account; the wtienss said that he has not paid that amount and volunteers that he has withdrawn 20 lakhs from the bank and remaining 10lakhs has been accumulated by him in the house. ....."
Further as per the crossexamination of PW.1, at Page No.17, Line Nos. 6 to 9, which reads as under;
"...... I have stated in my crossexamination that Rs.10,00,000/ was in my house and I have paid the said money to the Accused as the part of third installment and the said fact is also correct. ....."
As per the above oral and documentary evidence, it can be said that the Complainant has withdrawn Rs.10,00,000/ on 18.02.2016 and Rs.10,00,000/ on 19.02.2016 from the bank and he was having Rs.10,00,000/ in cash in his house. When this evidence is taken into consideration, then how the Complainant has paid Rs.30,00,000/ on 18.02.2016 itself is doubtful. So payment said to have been made 59 Crl.A.No.25193/2019 by the Complainant to the Accused on 18.02.2016 is not acceptable one.
c) Withregard to payment of Rs.30,00,000/ in cash.
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.4, Line Nos.15 to 24, which reads as under;
"......It is true that, in the Complaint I have stated that I have paid Rs.30 lakhs to the Accused in cash and the said fact is true. The said amount has been received by me by selling my building and I have produced the document to that effect. I have received more than Rs.50 lakhs by selling the building. I have received Rs.49 lakhs through DD and remaining amount in cash. The said DD/ Cheque may be dated 10.02.2016. On the same day, I have deposited the said Cheque to my personal bank account at State Bank of India. The said amount has been credited to my bank account on 11.02.2016..."
As per this evidence Complainant contends that he has paid Rs.30,00,000/ in cash, the said amount 60 Crl.A.No.25193/2019 was received by him by selling the building. He has produced the document to that effect. He had received totally Rs.50,00,000/, out of which he had received Rs.49,00,000/ through D.D. and remaining amount in cash. He had received the D.D/Cheque on 10.02.2016 and on the same day, he has deposited the same in his personal account with State Bank of India. The said amount has been credited to his account on 11.02.2016.
Further, as per the crossexamination of PW.1, at Page No.15, Para No.2, Line Nos.4 to Page No.16, Para No.1, Line No.6, which reads as under;
"...... It may be true that as per my Bank statement at Ex.P10, I have withdrawn Rs.10,000/ each from my ATM. It is true that on 18.02.2016, Rs.60,000/ has been paid through Cheque bearing No.301680 to Sakshi Market. It is true that, I have paid Rs.1 lakh through Cheque to one A.R.Somashekar on 18.02.2016. It is true that on 18.02.2016 Rs.10 lakhs has been withdrawn by using the Cheque. ...."61 Crl.A.No.25193/2019
Further, the Complainant has produced the certified copy of the Sale Deed dtd.10.02.2016 at Ex.P.9. As per this document, it is seen that, the Complainant has sold the property shown in the schedule to the purchasers shown in the said documents, for the valuable consideration of Rs.49,50,000/ for which 10,50,000/ was received by him in cash and 39 lakhs received by way of Cheque bearing No.665049, dtd.10.02.2016.
Further, the Complainant has produced his Bank statement at Ex.P.10. As per the said Bank statement it is seen that, an amount of Rs.39lakhs is credited to his account through Cheque bearing No.665049 on 12.02.2016; an amount of Rs.4,85,000/ is debited to his account through the Cheque No.301682, on 16.02.2016; an amount of Rs.1,00,000/ is debited to his account through the Cheque bearing No.301681, on 16.02.2016; an amount of Rs.10,000/ was withdrawn through ATM on 16.02.2016; further an amount of Rs.10,000/ was withdrawn through ATM on 62 Crl.A.No.25193/2019 16.02.2016; an amount of Rs.60,000/ was debited to his account by a Cheque bearing No.301680, on 18.02.2016, drawn infavour of Sakshi Marketing; an amount of Rs.1,00,000/ was debited to his account by way of Cheque bearing No.301684 on 18.02.2016, drawn infavour of A.R.Somashekhara; an amount of Rs.10,00,000/ was debited to his account by way of self Cheque bearing No.301685 on 18.02.2016; an amount of Rs.10,00,000/ was debited to his account by way of self Cheque bearing No.301686 on 19.02.2016. As per this document, firstly, it can be said that, withdrawals, except the withdrawals by ATM, are done through Cheques, may be for Rs.4,85,000/; Rs.1,00,000/; Rs.60,000/; Rs.10,000/; Rs.10,00,000/; and Rs.10,00,000/. Secondly, it can be said that, Rs.10,00,000/ is withdrawn on 18.02.2016 and Rs.10,00,000/ is withdrawn on 19.02.2016, both by way of self Cheque withdrawals. Thirdly, it can be seen that for payments of R.60,000/ and Rs.1,00,000/, the Complainant has issued two Cheques one bearing No.301680 infavour of 63 Crl.A.No.25193/2019 Sakshi Marketing and another bearing No.301684 infavour of A.R.Somashekhara. From this, we can cult out that,the Complainant for the meagre amount of Rs.60,000/ and Rs.1,00,000./ has issued the Cheques, but in the instant case we are asked to believe that he had paid a huge amount of Rs.30,00,000/ that too in cash to the Accused.
Further as per the crossexamination of PW.1, at Page No.5, Line Nos.7 & 8, which reads as under;
"...... There is no legal impediment or hurdle for me to pay the amount to the Accused through Cheque. ...."
As per this evidence, Complainant contends that, he was not having any impediment to pay the amount to the Accused through Cheque, then why he has not paid such a huge amount of Rs.30,00,000/ by way of Cheque. No any explanation is coming from the side of the Complainant to this effect.
64 Crl.A.No.25193/2019d) Though the Complainant has not averred in the Complaint, but in evidence the Complainant contends that, he has paid the said amount in the presence of one Sriram and Muniraju. This portion of evidence can be seen as per the crossexamination of PW.1, at Page No.5, Line Nos.10 and 11, which reads as under;
"...... I have paid the money to the Accused in the presence of one Sriram and one Muniraju. ...."
Further as per the crossexamination of PW.1, at Page No.7, Para No.1, Line Nos. 8 to 11, which reads as under;
"...... I know the aforesaid Kempanna, Muniraju, Sriram since 20years. It is true that I am closely associated with them and I have at good relationship with them. ...."
As per this evidence, the Complainant admits that he knows Muniraju and Sriram and they are closely associated with him and he is having good relationship with them.
65 Crl.A.No.25193/2019Further, as per the crossexamination of PW.1,at Page No.8, Para No.2, Line Nos.6 & 7, which reads as under;
"...... The filing of the case is within the knowledge of aforesaid Muniraju and Sriram. ....."
As per this evidence, Complainant contends that, said Muniraju and Sriram are aware about filing of the present Complaint by the Complainant against the Accused.
With the background of the above ocular evidence and in the light of denial made by the Accused withregard to payment of Rs.30,00,000/, by the Complainant to him, then under such circumstances, the Complainant ought to have led the evidence of either Muniraju or Sriram, to prove the fact of giving of an amount of Rs.30,00,000/ to the Accused. But the same is not been done.
e) The Complainant though not contended in his Complaint has contended in his evidence that he had 66 Crl.A.No.25193/2019 maintained a entry regarding payment of an amount of Rs.30,00,000/ to the Accused in the notebook, which is in his possession. This aspect can be seen as per the crossexamination of PW.1, at Page No.8 Para No.2, Line Nos.7 to Page No.3, Line No.4, which reads as under;
"...... I have mentioned the date of advancing of Rs.30,00,000/ loan to the Accused in my book. The said book is with me. I have not shown the said book to my Advocate while causing the notice or filing the Complaint. When it is questioned to the witness that why he has not informed the date of advancing the loan when you are particular about the date of advancing the loan as well as noted the same in the notebook; the witness said that he has not informed the date of advancing the loan to his Advocate, but only stated that he had advanced the money in the month of February. ....".
Further, a contrary version to the above version of the Complainant can be seen in his crossexamination at Page No.5, Line Nos.21 to 23, which read as under;
67 Crl.A.No.25193/2019"...... I have not made any entries in any book regarding the advancing the money to the Accused. ...."
As per the above ocular evidence two contrary versions are coming from the side of the Complainant, one is that he has not made any entry in any book regarding the advancement of loan to the Accused and in another he contends that, he had made an entry in the note book. If the second contention of the Complainant is taken into consideration, in the light of denial of payment by him made to the Accused, it was the duty of the Complainant to produce the notebook. But the same is also not done.
f) The Complainant contents that, at the time of giving an amount of Rs.30,00,000/ by him to the Accused, he has not at all taken any document or Cheque for security of the said amount. This can be seen as per the crossexamination of PW.1, at Page No.5, Line Nos.8 to 10, which reads as under;
68 Crl.A.No.25193/2019"...... I have not made any attempt to get any documents from the Accused while paying Rs.30,00,000/ to him. ....."
Further again it can be seen in the cross examination of PW.1,at Page No.8, Para No.2, Line Nos.4 to 6, which reads as under;
"...... I have not made any attempt to get any documents from the Accused while paying Rs.30,00,000/ to him. ....."
But a contrary contention is taken by the Complainant, contending that he has obtained a Cheque but not any documents, this can be seen as per the crossexamination of PW.1, at Page No.7, Para No.2, Line Nos.1 and 2, which reads as under;
" I have not obtained any document other than the Cheque inrespect of present loan transaction from the Accused. ...."
As per the above ocular evidence two contrary contentions have been taken by the Complainant, one that no any document etc., is taken by him and in another breath he contends that, he has obtained a 69 Crl.A.No.25193/2019 Cheque. If at all, the Complainant had obtained the Cheque, he would have either stated in the Complaint or in the evidence; or he would have produced the said Cheque. But nothing is stated in the Complaint nor a Cheque is produced. On the contrary, the Complainant has contended in Para No.4 of his Complaint that when he demanded return of a debt owned by Accused, in the month of August 2016, the Accused issued two Cheques Ex.P.1 and Ex.P.2.
Further, contradictory to the above contentions the Complainant has further admitted to the suggestion made to him on behalf of the Accused that, he could have obtained the Cheque from the Accused, when he has advanced the money to the Accused on 20.02.2016, which can be seen as per the cross examination of PW.1, at Page No.9, Line Nos.4 to 8, which read as under;
" .... It is true that, I would have obtained the Cheque from the Accused when I have advanced the money to the Accused on 20.02.2014. The witness volunteers that out 70 Crl.A.No.25193/2019 of friendship, he has not asked the Accused to issue the Cheque on that day......"
Thus, as per the ocular evidence, it can be said that, no prudent man would pay an amount of Rs.30,00,000/ to another person, without any documents or without any security.
g) With regard to Interest on the payment of Rs.30,00,000/ Firstly, the complainant has contended in his complaint at Page No.2, Para No.3, that the Accused had promised to return the amount of Rs.30 lakhs with interest.
Secondly, the complainant has contended in the NoticeEx.P.5, at Page No.1, Para No.1, issued through his counsel to the Accused, that the Accused has promised to return the amount with interest.
Thirdly, as per the crossexamination of PW1, at Page No.8, Para No.2, line Nos.1 to 4, which read as under:
71 Crl.A.No.25193/2019"There is no talk between me and the Accused regarding the interest and the amount advanced by me to the Accused as loan. The Accused promised me to repay the aforesaid loan amount within 6 months, with interest."
As per the above referred materials, it can be seen that, the Complainant contends that, the Accused has promised to return the money with interest. If that was so, then, the Accused could not have issued two Cheques for Rs.30 lakhs but he would have issued for more amount than Rs.30 lakhs, including the interest. No any explanation is coming forth from the side of the Complainant with regard to either the nonpayment of the interest or with regard to discharge of the interest. So also no prudent man would pay a huge amount of Rs.30,00,000/ to another person, without any interest or profit.
h) With regard to filing of Income Tax returns.
72 Crl.A.No.25193/2019Coming to the ocular evidence on this point more specifically crossexamination of PW1, Page No.2, line Nos.16 to 26, which reads as under:
"...I had become a income tax assessee may be since from 2006. I used to submit Income Tax Returns every year. I do not know what are the Incomes have been declared in my Income Tax Returns; the witness volunteers that his auditor knows about it. One Babu of K.R.Puram was my auditor. I had not maintained my personal file regarding the Income Tax Returns, but I can produce the documents for having been submitted the Income Tax Returns by obtaining the same from my auditor. I do not know that there is a rule that, if any, transaction of about 20,000/ to be declared in the Income Tax Returns. My auditor has also not informed the said fact to me."
As per this evidence the Complainant contends that, he is an income tax assessee and he is filing returns every year.
The amount said to have been advanced by the Complainant to the Accused is too huge, amounting to Rs.30 lakhs, admittedly, more than Rs.20,000/, so a 73 Crl.A.No.25193/2019 man of prudence would require that, either giving of the said amount or about receiving the said amount would be reflected in the Income Tax Returns, as 'Receivables'. Even, production of the Income Tax Returns containing the entry, as to the receipt of Rs.30 lakhs, would lead to an inference of a fact that, the Income Tax assessee has to receive Rs.30 lakhs from the person, named in such entry.
As per the decision of the Hon'ble Apex Court, in the Case of Dalmia Cement (Bharat Ltd., v. Galaxy Traders and Agencies Ltd., and Others, reported in (2001) 6 SCC 463, wherein it is observed at Para No.7, as under:
"7. It is true that merely because amount advanced is not shown in Income Tax Return, in every case, one cannot jump to the conclusion that the presumption under section 139 of the said Act stands rebutted. There may be cases where a small amount less than a sum of Rs.20,000/ is advanced in cash by way of loan which may be repayable within few days or within few months. A Complainant may not show that said 74 Crl.A.No.25193/2019 amount in the Income Tax Return as it is repayable within few days or few months in the same financial year. In such a case the failure to show the amount in the Income Tax Return may not by itself amount to rebuttal of presumption U/Sec. 139 of the said Act. If in a given case the amount advanced by the Complainant to the Accused is a large amount and is not repayable within few months, the failure to disclose the amount in IncomeTax return or Books of Accounts the Complainant may be sufficient to rebut the presumption U/Sec. 139 of the said Act."
As per the above guiding principles, when the Accused has denied the receipt of the amount, it was incumbent upon the Complainant to produce the Income Tax Returns. Income Tax Returns pertaining to the relevant time becomes relevant, but when those Returns have not been produced, then an adverse inference is to be drawn, withregard to the fact of nonentry of the alleged payment of Rs.30,00,000/ by the Complainant, in his Returns.
75 Crl.A.No.25193/2019i) With regard to averments in the Complaint pertaining to receipt of money by sale of building under Ex.P9sale deed; Withdrawal and Payment of amount on different occasions.
The Learned Counsel for the appellant would contend that the Complainant ought to have disclosed in the Complaint, about the receipt of the amount by him, on sale of his building; Withdrawals and payments made by him to the Accused. The Learned Counsel for the appellant has placed his reliance on the decision of the Hon'ble Apex Court, in the case of K.Subramani v/s. K. Damodara Naidu, reported in (2015) 1 SCC 99, wherein at para No.9, it is observed that, ".....There is nothing on record to show that, the source claimed by the Complainant like savings from his salary and an amount of Rs.5 lakhs received on sale of site, belonging to him, either in the Complaint or in the examinationinchief of the Complainant. Further, the Complainant did not produce Bank statement to substantiate his claim."
76 Crl.A.No.25193/2019In the instant case, at hand the appellant has not denied the source of the Complainant. Secondly, the appellant though received the NoticeEx.P5, has failed to issue reply to the said Notice, denying the source of the Complainant. If the Appellant/Accused had denied the source by way of Reply Notice, then the Complainant could have averred the source in the Complaint. Thirdly, when the source of the Complainant was tried to be denied in the cross examination of PW1, conducted on 03.12.2017 and 08.02.2017, the Complainant produced the Bank statement marked as Ex.P10 on 29.06.2018, though the Complainant had produced the certified copy of the Sale Deed dated 10.02.2016 marked at Ex.P9 on 27.10.2017, prior to his crossexamination. Under such circumstances, the facts in the present case differs from the facts on hand in the case cited by the Learned Counsel for the Appellant.
Secondly, the Complainant has taken contrary contentions, in his crossexamination, which can be 77 Crl.A.No.25193/2019 seen at Page No.5, Line Nos.26 to 28, as well as at Page No.8, Line Nos.7 to 10, which read as under:
"...... I have not informed the withdrawing of Rs.20lakhs from my bank account in order to advance the money to the Accused to my advocate while causing the notice as well as filing the Complaint. ....."
"...... I have not instructed my advocate while filing the Complaint as well as causing legal notice to the Accused that I have paid Rs.20 lakhs out of the total sale consideration of Rs.40lakhs and 10lakhs from my savings to the Accused. ...."
As per these evidence, the Complainant contends that, he has not instructed and informed his counsel about withdrawal of Rs.20 lakhs from the bank account at the time of causing the legal Notice, to the Accused.
j) The Complainant contends that 5 to 6 persons, know about the transaction taken place 78 Crl.A.No.25193/2019 between him and the Accused. This can be seen as per the crossexamination of PW1 at Page No.6, Line Nos.6 and 7, which read as under:
"...... 5 to 6 persons knows that I have advanced the loan to the Accused".
So, when the Accused denies the receipt of an amount of Rs.30 lakhs, the Complainant ought to have either led the evidence of Sri Ram and Muniraj or any of the persons out of these 5 to 6 persons, who know about the advancement of the loan amount by the Complainant to the Accused.
22. Viewing the matter, in the light of the materials produced and on the basis of both documentary and oral evidence, it can be said that, when the Accused had denied acceptance of an amount of Rs.30lakhs or inotherwords, to say when the Complainant has contended that, he has paid the amount of Rs.30lakhs to the Accused, it was for the Complainant to prove the same. Though the 79 Crl.A.No.25193/2019 Complainant has tried to bring the material on record to show his capacity to pay, but has failed to prove the fact of giving an amount of Rs.30lakhs to the Accused. What was required in the present case was that, proof of giving of Rs.30lakhs by the Complainant to the Accused. Inorder to prove issuance of the Cheques Ex.P1 and Ex.P2 by the Accused infavour of the Complainant, primarily, existence of debt is required to be proved by the Complainant, for that, firstly, the Complainant has to show that, he has paid Rs.30 lakhs to the Accused and secondly, inturn to repay the said amount, the Accused has issued the said Cheques Ex.P1 and Ex.P2. When the Complainant has failed to prove giving of an amount of Rs.30lakhs to the Accused, resulting into failure to prove the existence of debt. In the consequences, the same will lead to the inference of nonexistence of legally recoverable debt.
Hence, I answer POINT NO.2, IN THE
NEGATIVE.
80 Crl.A.No.25193/2019
23. Though the Appellant/ Accused has failed to issue reply to the notice issued to him, on behalf of the Complainant, but the Accused has brought his defence, to counter the claim of the Complainant, in evidence, which can be seen, more specifically, as per the cross examination of PW.1, at Page No.9, Line Nos. 21 to 27, which read as under;
" ....It is false to suggest that Accused has borrowed Rs.5 lakhs from Kemmappa of Jinke Thimmanahalli and at that time the Accused has issued these two cheques to said Kempanna of Jinke Thimmanahalli as a security. It is false to suggest that said Kempanna of Jinke Thimmanahalli got filed this case through me against the Accused."
As per this evidence, it is the defence of the Accused that he had borrowed Rs.5,00,000/ from Kemmappa of Jinke Thimmanahally and at that time, he had issued two Cheques to him as security. Further, the said Kempanna of Jinke Thimmanahally got filed 81 Crl.A.No.25193/2019 the present case against the Accused through the Complainant.
23.1. Further the Learned Counsel for the Accused contends that, the said Kempanna of Jinke Thimmanahally has filed two suits for the relief of Specific Performance against the present Accused, his father and his brother contending that, all the three have executed an agreement of sale to sell the properties shown as the schedule properties in the respective suits, in his favour. The said suits are pending on the file of the Senior Civil Judge, Rural Bengaluru at O.S.No.1730/2016 and O.S.No.1731/2016. The Accused and the other Defendants therein have filed their Written Statements, wherein they have contended that, the said Kempanna taking the advantage of the situation prevailing in the family of the Defendants therein, had took duly signed blank Cheques from the Defendant No.2 and 3 herein, and estamp paper worth Rs.500/, together with 56 82 Crl.A.No.25193/2019 documents and has misused the said documents, the same are projected as the Agreement of Sale in the said suits.
23.2. The Accused has produced the certified copy of the Suit Plaints in O.S.No.1730/2016 and O.S.No.1731/2016 at Ex.D.1 and Ex.D.3 and the Written Statement filed by him in the said suits at Ex.D.2 and Ex.D.4, respectively.
23.3. On careful perusal of the contents of the Suit Plaint and the Written Statements, it can be said that though the Accused alongwith the other Defendants in the said suits have taken up a contention in para No.20 that the Plaintiff therein had obtained duly signed blank Cheques from him and his brother drawn on the Cauvery Grameena Bank an Federal Bank as well as the Plaintiff therein had obtained e stamp papers together with 56 document sheets with their signatures. On close reading of the contentions 83 Crl.A.No.25193/2019 taken up by the present Accused as one of the Defendants, in the said suits, it can be said that inorder to counter the claim of that Plaintiff, the Defendants therein have taken up a contention withregard to handing over of estamp paper worth Rs.500/ and 56 documents sheets signed by them. But withregard to countering of this Complaint, the Accused has not at all stated as to which Cheques, he and his brother had given to the Plaintiff of that suit, inotherwords to contend the Accused in the said Written Statement has not stated about the Cheque Numbers, which were handed over to the Plaintiff of that suit, as security.
23.4. Secondly, the present Complaint is filed on 06.10.2016; notice Ex.P.5 is issued to the Accused on 25.08.2016; Accused appeared before the Trial Court on 11.04.2017; the suits O.S.No.1730/2016 and 1731/2016 is filed on 21.06.2016; the Written Statements in the said suits if filed on 04.10.2017. Considering these events, when the Accused was made 84 Crl.A.No.25193/2019 aware that, the Cheques Ex.P.1 and Ex.P.2 issued by him, infavour of the Complainant (as per the version of the Complainant) were dishonoured, by way of notice on 25.08.2016; so also when the Accused was made aware about the filing of the Complaint alleging that he has committed an offence punishable U/Sec. 138 of N.I. Act, has come to his notice, when he has appeared before the Trial Court i.e., on 11.04.2017. For having the said knowledge, the Accused ought to have contended in brief about handing over the Cheques Ex.P.1 and Ex.P.2 to the Plaintiff in that suits, in the Written Statement. This aspect is missing.
23.5. Thirdly, as per the defence taken up by the Accused in the crossexamination of PW.1, at Page NO.9, it is contended that, the Accused had borrowed Rs.5,00,000/ from Kempanna, who is the Plaintiff in both the suits O.S.No.1730/2016 and 1731/2016, but as per the contention of the present Accused, who is the Defendant in those suits, more specifically at Para 85 Crl.A.No.25193/2019 No.20 of the Written Statements at Ex.D.2 and Ex.D.4, it is contended that, the Accused, his father and his brother had borrowed Rs.10,00,000/ from Kempanna. Both these contentions are divergent to each other.
23.6. These materials on record leads to a doubt, to believe the specific defence of the Accused that, the present Cheques Ex.P.1 and Ex.P.2 were issued to the Plaintiff in those suits and at the instance of the said Plaintiff, the present Complaint is filed through the present Complainant.
Hence, I answer POINT NO.3, IN THE NEGATIVE.
24. Inorder to ascertain whether the Presumption available to the Complainant U/Sec 139, still holds or is it diluted, circumstantial evidence, is also to be taken into consideration. The circumstantial evidence on record are:
a) withregard to the financial position of the Accused;86 Crl.A.No.25193/2019
Coming to the ocular evidence, more specifically, crossexamination of PW.1, at Page No.3, Line Nos.4 to 6, which read as under;
"...... The Accused is having five to six Acres of land, big house and godown etc. It is true that the Accused had more than sufficient income. ......"
As per this evidence, the Complainant admits that the Accused is having sufficient income.
b) withregard to the financial position of the Complainant;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.2, Line Nos. 1 to 13, which reads as under;
"......I studied upto SSLC. I am doing steel and cement business at T.C.Palya of K.R.Puram in the name and style of "Vishwa Agencies". I am Proprietor of said Vishwa Agencies.
Vishwa Agencies has been established in the year 2003. Vishwa Agencies had a bank account at Karnataka Bank, T.C.Palya Branch but I do not remember the account 87 Crl.A.No.25193/2019 number. The said bank account at Karnataka Bank has been opened about 6 months back. I am having my personal bank account at State Bank of India, R.M.Nagara Branch since 5 years. Other than Vishwa Agencies I am also doing Real Estate and Brokerage Business. I am the permanent resident of Jinke Thimmanahalli@Varanasi, T.C.Palya Post, K.R.Puram. I am doing the real estate business since 2003 in small scale......."
Further as per the crossexamination of PW.1, at Page No.4, Line No.26 to Page No.5, Line No.4, which reads as under;
"...... As we required money for our business we sold the said building. Prior to the sale of said property at Ex.P9 there was no sale agreement regarding the same. I have sold the property with the intention to purchase another site. I have not gone through Ex.P9 Sale Deed before its registration. It is true that in the Sale Deed at Ex.P9 it has been stated that property has been sold as I was need of money and the said fact is true."88 Crl.A.No.25193/2019
As per this evidence, it can be seen that the Complainant is running a Steel and Cement business as well as he is doing a real estate business since 2003 in a small scale. Initially the Complainant contends that, he has sold his building under Ex.P.9 as he was in need of money and subsequently, he contends that he has sold the said building to purchase another site.
c) Withregard to intimacy/relationship inbetween the Complainant and the Accused;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.3, Line Nos.1 to 8 and 21 to 26, which read as under;
"In my family, I am the only earner. I do not have any blood relatives at Thirumalashettyhalli. I had only friend at Thirumalashetihalli is the accused. I came to know about the Accused through real estate transaction. The Accused is having five to six acres of land, big house and godown etc. It is true that the Accused had more than sufficient income. I do not know about the family of the 89 Crl.A.No.25193/2019 Accused. Accused had a brother but I do not remember his name and he was also known to me since 10 years......"
".......I do not remember the exact date on which I have met the brother of the Accused on last occasion. When it is suggested to the witness that the name of the brother of the Accused is Nataraj; the witness said, he do not know. I do not know the father's name of the Accused. I do not know the father's name of the Accused is Bathyappa...."
As per this evidence, Complainant contends that he is having friendship with the Accused. He do not have any relatives at Thirumalashettihalli, he visit to the said village only for his friendship with the Accused. He came in contact with the Accused in real estate business. He do not know about the family of the Accused, but he was aware that the Accused is having a brother, but he do not know his name. He do not know the name of the father of the Accused.
90 Crl.A.No.25193/2019d) Withregard to any prior transaction or business relationship inbetween the Complainant and the Accused;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.3, Line Nos.17 to 21, which reads as under;
"...... There is no financial transaction between me and the Accused prior to the transaction claimed in the Complaint. It is true that myself and the Accused together have not entered into any real estate business or any business......."
As per this evidence, the Complainant admits that there are no any transactions inbetween him and the Accused, prior to the transaction, named in the Complaint. It is further admitted by the Complainant that, he and the Accused have never entered into any real estate business or any other business.
e) Withregard to the civil litigation inbetween the Accused and one Jinke Kempanna;
91 Crl.A.No.25193/2019The Accused has produced Ex.D.1 to Ex.D.4 documents pertaining to the pendency of the two suit, filed by Jinke Kempanna against the Accused, his father and brother, alleging that they have executed an Agreement of Sale in his favour, which is denied by the Accused, as per the Written StatementsEx.D.2 and Ex.D.4, filed by him.
f) Withregard to intimacy of Complainant with Jinke Kempanna;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.7, Line Nos.3 and 4 and Line Nos. 8 to 11, which read as under;
"...... It is true that I know Kempanna of Jinkethimmanahalli and he is now sitting inside the Court hall. ..... "..... I know the aforesaid Kempanna, Muniraju, Sriram since 20years. It is true that I am closely associated with them and I have at good relationship with them. ....."92 Crl.A.No.25193/2019
As per these evidence, the Complainant admits that he know Kempanna of Jinke Thimmanahalli since 20 years and he is closely associated with him and having good relationship with him.
g) Withregard to presence of Jinke Kempanna in the Court hall, while conducting the crossexamination of PW.1, by the Accused on 08.02.2017;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.7, Line Nos.2 and 3, which reads as under;
"...... It is true that I know Kempanna of Jinke Thimmahalli and now he is sitting inside the Court hall. ......"
h) Withregard to differing of the ink inrespect of writings on the Cheques Ex.P.1 and Ex.P.2;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.9, Line Nos.17 to 19, which reads as under;
"...... I do not know that the ink used to write the payees name differs from 93 Crl.A.No.25193/2019 the amount stated in figure in both the Cheques. ......"
As per this evidence, Accused wants to contend that, the ink used to write the payees name differ from the ink used to write the amount in figures in both the Cheques.
i) Withregard to defence set up by the Accused that both the Cheques Ex.P.1 and Ex.P.2 were given to Kempanna;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.9, Line Nos.21 to 25 and crossexamination of DW.1, at Page No.3, Para No.2, Line Nos.1 to 3, which read as under;
"......It is false to suggest that the Accused has borrowed Rs.5 lakhs from Kemmappa of Jinke Thimmanahalli and at that time the Accused has issued these two cheques to said Kempanna of Jinke Thimmanahalli as a security......"94 Crl.A.No.25193/2019
"According to me I have issued two blank signed cheques in favour of Jinke Kempanahalli, drawn on Kavery Bank. I had bank account at Federal Bank, Thirumalashettihalli branch. ...."
As per these evidence, the Accused contends that, he had issued two blank signed Cheques infavour of Jinke Kempanna drawn on Cauvery Grameena Bank.
j) Withregard to defence set up by the Accused that the Complainant has filed the Complaint at the instance of Jinke Kempanna;
Coming to the ocular evidence on this point, more specifically, crossexamination of PW.1, at Page No.9, Line Nos.25 to 27 and Page No.10, Line Nos.21 to 23, which read as under;
"It is false to suggest that I have no document to show that I have withdrawn Rs.20 lakhs from the sale consideration deposited by Canfin Home Bank on behalf of the purchaser of my site..."95 Crl.A.No.25193/2019
"....It is false to suggest that Kempanna of Jinke Thimmanahalli used me to file this false case against the Accused."
As per this evidence, it is suggested to the Complainant that, Kempanna of Jinke Thimmanahalli has got filed the Complaint against the Accused, by using the Complainant.
k) Withregard to contentions of the Complainant relating to demand made by the Accused; As per the averments of the Complaint more specifically at Para No.3, Line Nos.1 to 5, the Complainant contends that the Accused had requested for a handloan of Rs.30lakhs.
But as per the crossexamination of PW.1, at Page No.4, Line Nos.2 to 6, the Complainant contends that, the Accused asked him for a loan of Rs.50lakhs, but he intimated the Accused that he cannot arrange for Rs.50 lakhs and he can advance Rs.30lakhs.
96 Crl.A.No.25193/201925. To disprove the presumptions, the Accused has brought on record the above facts and circumstances, upon consideration of the same, it leads to the fact that a debt of Rs.30lakhs, did not exist or its nonexistence is so probable that a prudent man would under the present given circumstances of the case, act upon the plea that it did not exist.
Apart from adducing direct evidence as per Ex.D.1 to Ex.D.4, by the Accused contending that he had issued the Cheques Ex.P.1 and Ex.P.2 to one Jinke Kempanna; the Accused has also relied upon circumstantial evidence to prove nonexistence of consideration and debt or liability even by letting in evidence as well as to displace the case of the Complainant setup by him in, the notice Ex.P.5; averments of the Complaint and the evidence adduced by the complainant during the trial.
As per the above documentary and oral evidence, the Accused has diluted the presumption by leading 97 Crl.A.No.25193/2019 rebuttal evidence on the basis of preponderance of probabilities.
Hence, I answer POINT NO.4 IN THE AFFIRMATIVE.
26. POINT NO.5:
The Learned Counsel for the Appellant would contend that, initially the Accused has raised a contention before the Trial Court that there is violation of Sec. 269 SS of Income Tax Act. On the said point, the Trial Court having discussed at Para Nos.23 to 25, has come to a conclusion that, as such there is no violation of Sec. 269 SS of Income Tax Act, by placing his reliance on the decision of the Hon'ble High Court of Bombay in the case of Krishna Murajkar V/s Joe Ferrao and Another, reported in CDJ 2013 BHC 1205.
The Learned Counsel for the Appellant would contend in this appeal that, the Accused though having formed a ground in the appeal on this point, the same will not be agitated.98 Crl.A.No.25193/2019
However, I do not find any error in the conclusion draw by the Trial Court on this point. Hence, I answer POINT NO.5 IN THE NEGATIVE.
27. POINT NO.6:
The Learned Counsel for the Appellant would contend that, the Trial Court has unnecessary made an observation in Para No.32 of its Judgment, that, " In Karnataka the document writers are of the habit of writing the recital that the seller is selling the property in view of his necessities and such recitals can be found in more than 75% of documents in Karnataka".
And would contend that this observations are uncalled for, for the disposal of present lis., inbetween the parties. The Learned Counsel for the Appellant has placed his reliance on the decisions;
a) of the Hon'ble Apex Court in the case of State of Karnataka V/s Registrar General, High Court of Karnataka, reported in (2000) 7 SCC 333, wherein it is held that, 99 Crl.A.No.25193/2019 "The high Court while rejecting the State's petition for lieu appeal against acquittal in a case U/Sec. 307 of IPC, requiring the Home Secretary and Home Minister to express their reaction to the adverse remarks of the High Court against poor investigation and in sincere conduct of prosecution, which resulted in acquittal in cases of murder, atrocities against women, harassment of young married women including bride burning and molestation of women and rape, held were not germane to, and beyond the scope of the case, such remarks were uncalled for.
b) of the Hon'ble Apex Court, in the case of Testa Setalvad & Another V/s State of Gujarat and Others, reported in (2004) 10 SCC 88, wherein it is held that, "Remarks in the Judgment in the form of comment and criticism must be relevant to the subject matter of adjudication and if it is to be made against a third person, such person should be given an opportunity to rebut imperative, as principles of Natural Justice, requires the same."100 Crl.A.No.25193/2019
27.1. Percontra, the Learned Counsel for the Respondent would contend that, the observations made by the Trial Court in para No.32 of its Judgment, deals with the experience of the Trial Court and the same are relevant to the subject matter of adjudication. The Learned Counsel for the Respondent has placed his reliance on the Article 'Judicial Notice and personal knowledge', written by Colin Machester.
27.2. On careful perusal of the Judgment of the Trial Court, it is seen that, the Trial Court has made such observations while dealing with the documentary evidence, more specifically, Ex.P.9Sale Deed dtd.10.02.2016, while dealing with the capacity and source of money, available with the Complainant, to give the same to the Accused, inorder to form consideration for issuance of the ChequesEx.P.1 and Ex.P.2.
27.3. It appears that the Learned Counsel for the Accused has placed his reliance on the Clauses found 101 Crl.A.No.25193/2019 in Ex.P.9 with regard to the reason for selling the building by the Complainant under Ex.P.9.
27.4. The Learned Counsel for the Appellant has drawn the attention of this Court to Clause No.7 at Page No.3 of Ex.P.9Sale Deed, wherein a recital is found that, the vendor under Ex.P.9, the Complainant has offered to sell the schedule property under Ex.P.9, as he was in need of the funds. And further would contend that, the said recital is to be considered to ascertain the financial position of the Complainant, relevant at the time of executing Ex.P.9 Sale Deed. And further would contend that, the contents of documents primarily be construed on the terms and conditions contained therein and if there is any ambiguity then circumstances are to be taken into consideration. To this effect, the Learned Counsel for the Appellant has placed his reliance on the decision of the Hon'ble Apex Court, in the case of State Bank of India & Another V/s Mula Sahakari Sakhar Karkhana 102 Crl.A.No.25193/2019 Limited (Civil Appeal No.2801/2006, date of decision.06.07.2006), wherein it is observed that, " A document, as is wellknown, must primarily be constructed on the basis of terms and conditions contained therein. It is also trite that, while construing a document, the Court hall not supply any words which the author thereof did not use.
"The document in question is a commercial document. It does not on its face contain any ambiguity."
27.5. On careful perusal of Ex.P.9, it is seen that, Ex.P.9 is drafted by an Advocate, at the instance of the Complainant and not by a documentwriter/Deed writer.
27.6. The observation dealing with the facts, resulting in ascertaining the capacity and availability of the cash in the hands of the Complainant, inotherwords, to know the existence of the funds in the hands of the Complainant, as on the date on which the 103 Crl.A.No.25193/2019 Complainant contends that he has paid an amount of Rs.30lakhs to the Accused, is relevant in this case.
27.7. Thus, the observation made by the Trial Court in Para No.32 of its Judgment will amount to criticism against the DeedWriters, who are not the parties to this litigation and the said observations are not relevant to the subject matter of the adjudication. Thus, the Appellant has shown that the observation made by the Trial Court in Para No.32 of its Judgment, is uncalled for. Hence, I answer POINT NO.6 IN THE AFFIRMATIVE.
28. POINT NO.7:
Thus, in the light of the evidence on record indicating grave weaknesses in the Complainant's case like absence of any details of the date on which an amount of Rs.30lakhs were given to the Accused; absence of cogent evidence to prove the fact of giving of Rs.30lakhs to the Accused; resulting in nonproving the 104 Crl.A.No.25193/2019 existence of debt, touching the concept of existence of legally recoverable debt, the version of the Accused that the Cheques Ex.P.1 and Ex.P.2 were not given to the Complainant but the same were given to one Jinke Thimmanna, failing to prove giving of Ex.P.1 and Ex.P.2 Cheques by the Accused; nonexamination of the witness like Muniraju, Sriram, who as per the Complainant were present at the time of giving an amount of Rs.30lakhs by him to the Accused; non examination of Jinke Kempanna, who was present in the Court at the time of crossexamination of PW.1; such nonexamination give raise to an inference that, the non examination was a deliberate attempt of the prosecution to keep the witnesses away from the Court for otherwise, they would have to accept the case of the Accused, withregard to nonpayment of Rs.30lakhs by the Complainant to the Accused and handing of the Cheques Ex.P.1 and Ex.P.2 by the Accused to Jinke Kempanna.
Coupled with this, on further scrutiny of the materials brought on record, the Accused has brought 105 Crl.A.No.25193/2019 certain circumstances on record like making of payment of Rs.30lakhs, without any security, without any interest, without any thick intimacy inbetween the Complainant and the Accused, without there being any commercial transaction, without there being any trade inbetween the Accused and the Complainant, which lead to probable defence of the Accused to show non existence of any transaction inbetween him and the Complainant, so probable that a prudent man would under the present given circumstances of the case, act upon the plea that it did not exist.
Thus, under the said circumstances, the evidential burden shifts back to the complainant. On shifting the said burden, the Complainant has failed to prove the existence of legally recoverable debt. Therefore, the presumptions under sections 118 and 139 of the Act will not again come to the complainant's rescue.
29. The Trial Court has failed to consider all these aspects referred to above. Hence, the Trial Court has 106 Crl.A.No.25193/2019 committed an error in appreciating the material evidence placed on record, which suggest that, in any event, it leaves the Complainant's case in the realm of great doubt, on which the case of conviction and sentence cannot be sustained. The order of conviction recorded by the Trial Court is perverse to Law. Hence, I am constrained to interfere with the findings recorded by the Trial Court, resulting in conviction of the Accused.
30. Necessarily the prosecution fails. The order of conviction passed by the Trial Court, therefore requires to be setaside and the Accused is required to be acquitted for the offence punishable U/Sec. 138 of N.I. Act.
Hence, for the above reasons I answer POINT No.7 IN THE AFFIRMATIVE.
107 Crl.A.No.25193/201931. POINT NO.8:
For having answered Point Nos.1, 4, 6 and 7 in the Affirmative and Point Nos.2, 3 and 5 in the Negative, I proceed to pass the following:
ORDER:
Acting U/Sec. 386 (b) (i) of Cr.P.C., the Appeal preferred by the Appellant U/Sec 374 of Cr.P.C., is hereby ALLOWED.
In the consequences, the order of conviction recorded by the LVIIth ACMM, Bengaluru, in C.C.No.51754/2017 dtd.04.07.2019, is hereby Setaside and thereby Appellant/Accused is acquitted for the offence punishable U/Sec. 138 of N.I. Act.
Having due regards, parties are hereby directed to meet their own costs.
In case, if the Accused has deposited the amount, as directed U/Sec. 148 of N.I. Act, the same may be dealt with as per Law U/Sec. 143 of the said Act.108 Crl.A.No.25193/2019
Transmit consigned records to the Trial Court alongwith True copy of this Judgment, forthwith, without causing any delay by securing acknowledgment without fail, inorder to ensure delivery of records.
(Dictated to the Judgment Writer directly on computer system, computerized by her and print out taken by her, after correction, signed and pronounced by me, in the open court on this the 07th day of Sept., 2020.) [AbdulRahiman. A. Nandgadi] LXXII Addl.City Civil & Sessions Judge, Bengaluru. (CCH73) 109 Crl.A.No.25193/2019 110 Crl.A.No.25193/2019