Bangalore District Court
Sri. Ramesh Chand Bafna vs Sri. Papanna R on 25 April, 2022
KABC020315562019
IN THE COURT OF ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY.
SCCH-6
PRESENT: SMT. K. LAKSHMI, B.A.L, LL.B.,
IV Addl., Small Cause Judge &
ACMM, Court of Small Causes,
BENGALURU.
C.C. No.7062/2019
Dated this the 25th day of April 2022
COMPLAINANT : Sri. Ramesh Chand Bafna
S/o J. D. Bafna,
Aged about 55 years,
Proprietor of M/s Ramesh Chand
Gauravkumar Bafna,
No.29, South End Road,
Seshadripuram,
Bangalore-560 020.
Mob No. 9739311021
(By Advocate Shri. V R Lakke
Gowda)
V/s
ACCUSED Sri. Papanna R
S/o Ramaiah,
C.C. No. 7062 / 2019
R/at No.123/1, Chelakere
Village, Chelakere,
Bangalore-560 043.
(By Advocate Shri. Krishnappa N)
****
-: J U D G M E N T :-
The complainant has filed the present complaint
against the accused under section 200 of Cr.P.C for the
offence punishable under section 138 of Negotiable
Instrument Act.
2. According to the Complainant, the accused
approached him and availed a credit facility to the tune of
Rs. 3,45,000/- in the year 2019. It is further alleged that
the accused had executed the pro-note and consideration
receipt in his favour. The accused has borrowed a loan of
Rs. 3,45,000/- to purchase the vehicles. It is also alleged
that the accused has also executed the hire purchase
agreement and also hypothication agreement in his favour.
C.C. No. 7062 / 2019
He assured that he will return the said amount within a
short period. Subsequently for repayment of the said
amount along with interest, accused issued a cheque
bearing No. 730305 dated 07-11-2019 for a sum of Rs.
4,04,500/- drawn on Allahabad Bank, HRBR Layout
Branch, Bengaluru. Thereafter, the cheque was
presented for collection in the account of the complainant
and the cheque was dishonored by the said Bank on
08-11-2019 on the ground that the " funds insufficient ".
3. Thereafter, the complainant issued a statutory
notice dated 14-11-2019 under section 138 of the
Negotiable Instrument Act, to the accused. The accused
received the notice and acknowledged the same. The
accused did not even sent any reply to the said statutory
notice. Since the said notice was not complied with, the
above said complaint is preferred by the complainant.
4. In his pre-summoning evidence, complainant was
examined on affidavit. He reiterated the contents of
C.C. No. 7062 / 2019
complainant and got marked thirteen documents as per
Ex. P-1 to Ex. P-13. Upon appreciation of pre-summoning
evidence, accused was summoned for an offence punishable
under section 138 of the Negotiable Instrument Act. After
receipt of summons, the accused appeared before this
Court through his counsel and he was enlarged on bail.
Plea of accusation has been read over and explained to the
accused and he pleads not guilty and claims to be tried.
The accused was examined u/Sec.313 of Cr.P.C. He
totally denied the entire case of the complainant.
5. The complainant relied on the evidence of PW-2.
The accused moved an application to cross examine the
complainant and said application came to be allowed.
The accused has cross examined the complainant. On the
other hand, the accused has not led evidence and no
documents got marked on his behalf. Thereafter, the case
is posted for arguments.
6. Heard the arguments.
C.C. No. 7062 / 2019
7. On the basis of the above facts, the following
points arise for my consideration :-
1. Whether the complainant proves beyond all the
reasonable doubt that, the accused has taken the
hand loan of Rs. 3,45,000/- to purchase the
vehicles from him and issued a a cheque
bearing No. 730305 dated 07-11-2019 for a
sum of Rs. 4,04,500/- drawn on Allahabad
Bank, HRBR Layout Branch, Bengaluru, and
when the complainant presented the cheque
for encashment and the cheque was dishonored
due to "funds insufficient", for which the
complainant has issued a legal notice through
RPAD and the same was served, but the
accused has not repaid the said amount and
thereby the accused has committed the offence
punishable under section 138 of Negotiable
Instruments Act?
2. What order ?
C.C. No. 7062 / 2019
8. My answers to the above points are as follows :
Point No.1 : In the Affirmative,
Point No.2 : As per final order,
for the following:
-: R E A S O N S :-
POINT No.1 :-
9. The complainant has filed his affidavit in lieu of
his oral chief examination. In his affidavit he has testified
regarding lending of Rs.3,45,000/- to the accused, issuance
of the cheque, its dishonour, issuance of legal notice and
failure of the accused to pay the cheque amount. The
complainant has produced the a cheque bearing No.
730305 dated 07-11-2019 for a sum of Rs. 4,04,500/-
drawn on Allahabad Bank, HRBR Layout Branch,
Bengaluru alleged to be issued by the accused in favour
of the complainant. Ex. P-1 stands in the name of the
complainant for 4,04,500/-. Ex. P-2 is the Banker's
endorsements. Ex. P-3 is the office copy of the legal
C.C. No. 7062 / 2019
notice, which is dated 14-11-2019. Ex. P- 4 is the postal
receipt. Ex. P-5 is the postal acknowledgement. Ex. P-6
is hire purchase agreement was alleged to be executed by
the accused. Ex. P-7 is the hypothication cum loan
agreement was alleged to be executed by the accused. Ex.
P-8 and Ex. P-9 are hire rental due lists. Ex. P-10 and
Ex. P-11 are the delivery notes. Ex. P-12 is the pro-note
and consideration receipt alleged to be executed by the
accused in favour of complainant. Ex. P-13 is the
registration certificate.
10. PW-2 deposed that the accused borrowed a loan
from the complainant to purchase the vehicles. He know
the accused and complainant. The accused has purchased
the TATA 407 vehicle bearing registration No. KA-04-
6239 from him. He has delivered the vehicle to the
accused. The accused has borrowed a loan from the
complainant in his presence.
11. Learned counsel for the complainant argued that
the complainant has discharged his initial burden of
C.C. No. 7062 / 2019
proving the case by his oral as well as documentary
evidence. It is also contention of the complainant that the
accused has not initiated the legal action against the
complainant to recover the disputed cheque. The accused
was aware of the fact that the disputed cheque was with
the complainant. He has also contended that the benefit
of presumption under Sections 118 and 139 of Negotiable
Instruments Act is in favour of the complainant, and
therefore the accused has failed to rebut the presumption.
Hence, the accused is liable to be convicted.
12. According to the accused, there was no
transaction between the complainant and the accused, and
the accused never borrowed a loan of Rs. 3,45,000/- from
the complainant. The notice was not served on him. It is
further alleged that the accused has borrowed a loan of Rs.
1,00,000/- from the complainant in the year 2019 and
same was discharged by the accused. The complainant
secured the blank signed cheque and blank signed papers
from the accused for the purpose of the security. After
C.C. No. 7062 / 2019
repayment of the said amount, the complainant did not
return the cheque and documents to the accused and
misused the same in order to make wrongful gain. The
complainant has not approached the Court with clean
hands. The accused in is not liable to pay the cheque
amount to the complainant. It is further contended that
though there is presumption under Sec.118 and 139 of
Negotiable Instruments Act, existence of legally
enforceable debt is not a matter of presumption u/Sec.139
of Negotiable Instruments Act.
13. In view of rival contentions raised by the parties,
it is necessary to consider the statutory provisions in this
regard and also proposition of law.
Section 118 of Negotiable Instrument Act lays
down that:
"Until the contrary is proved, it
shall be presumed that every
Negotiable instrument was made or
drawn for consideration."
C.C. No. 7062 / 2019
Section 139 of N.I. Act contemplates that :
" Unless the contrary is proved, it
shall presume that holder of the cheque
receive the cheque of the nature
referred to section 138 of the N.I. Act
for the discharge, in whole or in part,
of any debt or other liability."
14. The presumption mandated by Section 139 of
N.I. Act does indeed show the existence of legally
enforceable debt or liability. It is a rebuttal presumption.
It is open to raise the defence, wherein the existence of
legally enforceable debt or liability can be contested. For
rebutting presumption accused is not required to adduce
evidence with unduly high standard of proof, but the
standard of proof for doing so is that preponderance of
probability. If the accused is able to raise probable
defence, which creates doubt about the existence of legally
enforceable debt or liability, then the onus shift back to
the complainant. It is also clear that for rebutting the
presumption accused can rely on the material submitted
C.C. No. 7062 / 2019
by the complainant or his cross examination and he need
not necessarily adduce his defence evidence in all the cases.
15. The specific case of the complainant is that, the
accused has borrowed a loan of Rs. 3,45,000/- from him
and agreed to repay the said amount with interest within
three months. The accused issued the disputed cheque for
discharging of debt and the said disputed cheque was
dishonored. Thereafter a legal notice was issued and then
he filed complaint. It is further contended that once the
cheque relates to the account of the accused and the
signature is admitted on the cheque, then initial
presumption as contemplated u/Sec.139 of N.I. Act has to
be raised by the court in favour of the complainant.
16. In order to prosecute the drawer of the cheque
for the offence punishable under offence Sec.138 of
Negotiable Instrument Act, the following facts are
required to be proved :
C.C. No. 7062 / 2019
That the cheque was drawn for payment
of money for discharging the of a debt
or liability,
The cheque was dishonored,
That the cheque was presented within
the prescribed period,
The payee made a demand for payment
of the money by giving demand notice in
writing to the drawer within stipulated
period.
That the drawer failed to make the
payment within 15 days of the receipt of
notice.
17. According to the accused, he never borrowed a
loan from the complainant in the year 2019. In this case,
the accused has not denied the issuance of cheque and also
the signature in the cheque. Section 20 of Negotiable
Instrument Act, 1881, states that when a person signs and
delivers blank cheque to another, he thereby gives prima
facie authority to holder thereof to make or complete it
for any amount specified therein and not exceeding the
amount covered by stamp. After combined reading of
said section 20 and 138 of Negotiable Instrument Act, it
C.C. No. 7062 / 2019
appears that to made out an offence in question against the
accused, the necessary ingredient is that the cheque should
be drawn on the account of the drawer and it is immaterial
the contents therein are in whose handwriting as per
section 20 of the Negotiable Instruments Act. After
perusal of said section 20, it appears that the drawer of a
cheque can issue blank cheque to other person and by his
said act he gives an authority to said concern person to fill
up it contents. It enables the holder of the cheque to fill up
the incomplete cheque.
18. In the case of T. Vasanthkumar -Vs-
Vijayakumari, (2015) 8 SCC 378, the Hon'ble Apex
Court held that the defence of accused that the cheque in
question was given to the complainant as a security was
not acceptable. The accused was not able to convincingly
rebut the presumption existing in favour of the
complainant under Section 139 of the Negotiable
Instrument Act. Further in the case of M. S. Narayana
Menon @ Mani -Vs- State of Kerala and another,
C.C. No. 7062 / 2019
(2006) 6 SCC 39, the Hon'ble Surprme Court held
that the the appellant clearly said that nothing is due and
the cheque was issued by way of security. The said
defence has been accepted as probable. If the defence is
acceptable as probable the cheque there for cannot be
held to have issued in discharge of the debt as, for
example, if a cheque issued for security or for any other
purpose the same would not come within the purview of
Section 138 of the Act.
19. Further, the decision reported in Umaswamy
Vs- K. N. Ramanath AIR Karnataka 171, the Hon'ble
High Court of Karnataka held that :-
" the cheque whether issued for
payment of debt or as security makes
no differences in law. The cheue issued
even of as a security for payments, it is
negotiable instrument and encashable
security is at the hands of payee.
Therefore, solely because the drawer
C.C. No. 7062 / 2019
averred that it was issued as security
cannot be held as ground to pardon the
penal liability under Section 138 of
Negotiable Instrument Act."
20. The position of law which emerges is that once
issuance of cheque is admitted, the presumption under
Section 118 (a) of Negotiable Instrument Act would arise
that it is supported by a consideration. Such a
presumption is rebuttal. The accused can prove the non-
existence of a consideration by raising a probable defence.
If the accused is proved to have discharged the initial onus
of proof showing that the existence of debt was
improbable or doubtful or the same was illegal, the onus
would shift to the complainant who will be obliged to
prove it as a matter of fact and upon it failure to prove
would dis-entitle him to grant of relief on the basis of the
negotiable instruments. The burden upon the accused of
proving the non-existence of the consideration can be
either direct or by bringing on record the preponderance
C.C. No. 7062 / 2019
of probability by reference to the circumstances upon
which he relies. In such event, the complainant is entitled
under law to rely upon all the evidence led in the case. In
case, where the accused fails to discharge the initial onus
of proof by showing the non-existence of the
consideration, the complainant would invariably be held
entitled to the benefit of presumption arising under
Section 118 (a) of Negotiable Instrument Act in his
favour. The Court may not insist upon the accused to
disprove the existence of consideration by leading direct
evidence as the existence of negative evidence. It is neither
possible not contemplated and even of led, is to be seen
with a doubt. The standard of proof evidently is
preponderance of probabilities. Inference of
preponderance of probabilities can be drawn not only
from the materials on records, but also by reference to the
circumstances upon which relies.
21. Thus, this Court has to consider whether the
complainant has to prove the existence of legally
C.C. No. 7062 / 2019
recoverable debt. From the statement of the complainant
reveals that the accused borrowed a loan from him and
disputed cheque was issued in favour of complainant. The
accused has admitted the cheque and the signature in the
cheque. In the present case, the complainant has presented
the disputed cheque within 3 months from the date of the
cheque as it could be seen from endorsement. Ex. P-2
further reveal that the cheque in question was dishonored.
The demand notice was issued on 14-11-2019 and the
notice issued within a statutory period. Then the
complainant has filed this complaint within the statutory
period. The documents produced by the complainant
reveal that the accused purchased the Vehicles bearing
Nos. KA-04-6239 and AP-02-T-7566 on hire purchase
and executed the delivery note and pro-note in this regard.
The accused has not denied the signatures found in the Ex.
P- 8 to Ex. P-12. Admittedly, in this case, the accused has
not taken any legal action against the complainant to
recover the cheque in issue from him even after receipt of
summons. Further, the accused has not placed any
C.C. No. 7062 / 2019
material to show that the complainant has received the
amount and refused to give the disputed cheque even after
receipt of said loan amount from him. Mere allegation is
not sufficient to disprove the case of complainant. The
accused has to place the probable evidence to show that
the disputed cheque was not issued towards debt.
22. Another contention of the accused is that the
demand notice was not severed on him. The burden is on
the complainant that the notice was dispatched by post
with correct address. Per contra, Learned Counsel for
complainant argued that the notice was duly served on the
accused. Admittedly, the requirements of Section 138 (b)
of the Negotiable Instrument Act is that notice should be
sent to the drawer of the cheque. Clause (b) of the proviso
to Section 138 of the Negotiable Instrument Act lays
down that notice regarding dishonor of the cheque should
be sent to the drawer of the cheque within 15 days of the
receipt of intimation regarding the dishonor of the cheque.
Considering the provision contained in Section 27 of the
C.C. No. 7062 / 2019
General Clauses Act once the sender establishes the fact
that the notice was dispatched by post with correct address
written thereon, it should be deemed to have been served
on the sendee unless he establishes that it was not really
served and that he was not responsible for such non-
service. It is not sufficient to show that the letter was not
served upon the sendee but, it is necessary for the sendee
to establish that it was not on account of the fault on the
part of the sendee that the service could not be effected.
23. In the case of Mahmuda Khatun -Vs- Ajit
Chandra Deka AIR 1978 NOC 112 (GAU ), Hon'ble
High Court of Gauhati held that the presumption of
service of notice sent under registered post is available
under Sections 16 and 114 (e) of Evidence Ac as well as
under Section 27 of the General Clauses Act only when
the plaintiff proves that the letter was properly addressed
and was put into the post office. Further in the case of In
Alavi Haji v. Palapetty Muhammed and Anr. (2007) 6
SCC 555 the Hon'ble Apex Court has been held as
C.C. No. 7062 / 2019
under:- "Any drawer who claims that he did not receive
the notice sent by post, can, within 15 days of receipt of
summons from the court in respect of the complaint under
Section 138 of the Act, make payment of the cheque
amount and submit to the Court that he had made
payment within 15 days of receipt of summons (by
receiving a copy of complaint with the summons). A
person who does not pay within 15 days of receipt of the
summons from the Court along with the copy of the
complaint under Section 138 of the Act, cannot obviously
contend that there was no proper service of notice as
required under Section 138, by ignoring statutory
presumption to the contrary under Section 27 of the G.C.
Act and Section 114 of the Evidence Act. In our view, any
other interpretation of the proviso would defeat the very
object of the legislation."
24. Admittedly, the presumption service of notice
sent under registered post is available under Section 27 of
the General Clauses Act. The mere fact that the full
C.C. No. 7062 / 2019
address was given in the body of the notice, does not raise
any presumption that the envelop containing the notice
was also correctly addressed. At any rate presumption
under Sections 16 and 114 (e) of the Evidence Act as well
as under Section 27 of the General Clauses Act is a
rebuttable one. When the person on whom the notice is
said to have been served appears before the Court and
denies on oath that the notice was served on him, the
presumption is rebuttal one and in such a case the evidence
of the postman becomes necessary. In this case, the
complainant is relying upon the presumption which are in
his favour. It is specific case of the accused that the
demand notice alleged to be issued by the complainant not
served on him. From the material available on the record,
it is clear that the address of the accused was correctly
mentioned in the envelope. It is not the case of the
accused that the address mentioned in the legal notice as
well as postal acknowledgments are incorrect.
Absolutely, there is no an iota of evidence on the record
to show that legal notice has been sent on the incorrect
C.C. No. 7062 / 2019
address. Therefore, the contention of accused that the
notice was not served on him cannot be acceptable.
25. Once the cheque relates to the account of the
accused and he accepts and admits his signature on the
cheque, then initial presumption as contemplated
u/Sec.139 of N.I. Act has to be raised by the court in
favour of the complainant. The presumption referred to
u/Sec.139 of N.I. Act is a mandatory presumption and
not a general presumption. But, the accused is entitled to
rebut the said presumption by probable and acceptable
evidence. On perusal of records, it also shows that the
accused appears to be aware of the fact that the cheque was
with the complainant. Further, the very fact that the
accused has failed to reply to the notice under Sec.138 of
N.I. Act and he had also not taken any legal action against
the complainant after receipt of the notice leads to the
inference that there is a material in the complainant's
version. Furthermore, the accused had not taken legal
action against the complainant on the ground that the
C.C. No. 7062 / 2019
complainant did not return the disputed cheque even after
the discharge of the debt. In the present case, the
complainant proves that the existence of legally
enforceable debt. Apart from that, the accused failed to
contest the existence of legally enforceable debt or
liability. Since the accused admitted the issuance of
cheques and also signatures in the cheque, then the
statutory presumption comes into play and the same has
not been rebutted by the accused. Hence, I answer point
No.1 in the Affirmative.
POINT No.2:-
26. Section 139 of N.I. Act creates presumption that
the cheque received in the nature referred to Section 138
of N.I. Act is always issued in discharge of debt or other
liability. In this case, the complainant proves the fact that
the accused had issued the cheque in issue for discharge of
legally enforceable debt. The accused failed to prove the
fact that he has not issued the impugned cheque in favour
of the complainant towards discharge of debt. In view of
C.C. No. 7062 / 2019
my findings to the above point, I proceed to pass the
following :
ORDER
The accused is found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is convicted acting Under Section 255(2) of Cr.P.C of the charges leveled against him for the offence Under Section 138 of Negotiable Instruments Act and he is sentenced to pay fine of Rs.4,54,500/-. In default of payment of fine, he has to undergo simple imprisonment for the period of Six months.
Out of fine amount recovered under Section 357 of Criminal Procedure Code a sum of Rs. 4,04,500/- shall be paid to the complainant which includes the cheque amount as a compensation. Remaining fine amount of Rs. 5,000/- shall be forfeited to State.
Bail bond of accused is canceled and surety stands discharged.
C.C. No. 7062 / 2019 Supply free copy of this judgment to the accused.
(Dictated to the Stenographer, transcribed and typed on Lap-top, then corrected by me, Print out taken, signed and then pronounced by me in the open court on this the 25th day of April 2022) (K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.
C.C. No. 7062 / 2019 ANNEXURE List of witnesses Examined for Prosecution:
PW.1. : Sri. Ramesh Chand Bafna PW.2. : Manikanth R List of documents marked for prosecution :
Exp.1 : Cheque
Exp.1(a) : Signature of accused
Exp.2 : Banker's endorsement
Exp.3 : Office copy of Legal notice
Exp.4 : Postal receipt
Exp.5 : Postal cover
Exp.6 : Hyper-purchase agreement
dtd: 10.03.2019
Exp.7 : Hypothication cum loan
agreement dtd: 10.04.2019 Exp.8 & 9 : Installment due list Exp.10 & 11 : Delivery Note Exp.12 : On-demand pro-note Exp.13 : RC C.C. No. 7062 / 2019 List of witnesses examined for accused :
- Nil -
List of documents marked for accused :
- Nil -
(K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.
C.C. No. 7062 / 2019 Dt: 25.04.2022 C-
A-
For Judgment (Order pronounced in open court vide separate judgment) ORDER The accused is found guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Hence, the accused is convicted acting Under Section 255(2) of Cr.P.C of the C.C. No. 7062 / 2019 charges leveled against him for the offence Under Section 138 of Negotiable Instruments Act and he is sentenced to pay fine of Rs.4,54,500/-. In default of payment of fine, he has to undergo simple imprisonment for the period of Six months.
Out of fine amount recovered under Section 357 of Criminal Procedure Code a sum of Rs. 4,04,500/- shall be paid to the complainant which includes the cheque amount as a compensation. Remaining fine amount of Rs. 5,000/- shall be forfeited to State.
Bail bond of accused is canceled and surety stands discharged.
Supply free copy of this judgment to the accused.
(K. LAKSHMI) IV Addl. SCJ & ACMM, Bengaluru.
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