Bangalore District Court
M/S Flikerys Enterprises vs A Partnership Firm on 5 April, 2021
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 5th day of April, 2021.
Crl. Appeal. No.25181/2020
Appellant/ M/s Flikerys Enterprises,
Accused: A Partnership Firm,
No.9/6, Lloyds Road,
Lloyds Ville, No.2B,
2nd Floor, Cooke Town,
Bengaluru560 005.
Mr. Syed Nejeeb Ahmed Khan,
S/o Syed Ahmed Khan,
Aged about 73 years,
Partner, M/s Flikerys Enterprises,
No.9/6, Lloyds Road,
Lloyds Ville, No.2B,
2nd Floor, Cooke Town,
Bengaluru560 005.
[By Sri. H. Muniswamy Gowda
Advocate]
V/s
2 Crl.Appeal.No.25181/2020
Respondent/ Mr. Sunil Mirpuri,
Complainant: S/o Mohan R. Mirpuri,
Aged about 51 years,
R/o No.501, Fairmont Towers,
16 Banaswadi Road, Cooke Town,
Bengaluru560 005.
[By Karan JosephAdvocate]
JUDGMENT
This Appeal is preferred by the Appellant U/Sec. 374(3)(a) of Cr.P.C, being aggrieved by the Judgment of conviction passed by the XXXIII ACMM, Bangalore in CC.No.56478 of 2016, dtd.19.11.2020, convicting the Appellant for the offence punishable U/Sec. 138 of NI Act, thereby sentencing them to pay fine of Rs.5,60,000/. Indefault to pay the fine, the Accused No.2 shall undergo Simple Imprisonment for a period of six months. Further directed to pay an amount of Rs.5,50,000/, to the Complainant, as compensation U/Sec. 357(1) of Cr.P.C., out of the fine amount.
2. The Brief facts leading to filing of the present appeal are:
3 Crl.Appeal.No.25181/2020The present Respondent filed a Complaint U/Sec. 200 of Cr.P.C. against the present Appellants alleging that, the Appellant No 1 is a Partnership firm and the Appellant No 2 is its Partner. In October 2014, Appellant No 1 approached the Respondent through Appellant No 2, with a request to give handloan of Rs 5,00,000/. Accordingly the Respondent paid Rs 5,00,000/ through cheque dated 31.10.2014 into the accounts of the Appellant No 1. As per the understandings the Appellant has to repay the said amount within five months and with 1.5% p.m interest on it. Accordingly the Appellant No 1 paid an amount of Rs 50,000/ towards interest on 03.11.2014. Appellant No 1 repeated defaulted in repaying the loan amount. Inpartial discharge of its liability, the Appellant No 1 issued the Cheque bearing No 489924 dated 12.06.2016 for Rs 5,00,000/. The same was presented by the Respondent for its encashment through his banker, but the same has returned unencashed with an endorsement "Funds Insufficient" on 18.08.2016. In the circumstances, 4 Crl.Appeal.No.25181/2020 he was constrained to issue a legal notice to the Appellants, through his counsel on 01.09.2016, by RPAD. The said notice was served to the Appellants.
But the Appellants have issued an untenable reply to the said notice.
On completion of the stipulated period required under the statute, the Respondent was constrained to file the present Complaint against the Appellants, for the offence punishable U/Sec.138 of N.I.Act.
3. On being satisfied, the Trial Court has issued summons U/Sec.204 of Cr.P.C., to the Accused on 04.10.2016. The Appellants appeared before the Trial Court on 03.11.2017 and Appellant No 2 was enlarged on bail. Substance of Accusation of the Appellant/Accused No 2 was recorded by the Trial Court on 03.11.2017, wherein the Appellant/Accused No 2 pleads not guilty and claims to be tried.
4. The Complainant inorder to prove his case got examined himself as PW.1 and got marked 08 documents as Ex.P.1 to Ex.P.8. PW1 was cross 5 Crl.Appeal.No.25181/2020 examined on behalf of the Appellant/Accused on 09.02.2018, 12.03.2018, 11.01.2019 & 13.03.2020.
Statement of the Appellant/ Accused was recorded U/Sec. 313 of Cr.P.C., on 05.06.2018.
Appellant No 2 got himself examined as DW.1 on 23.08.2019 and got marked 03documents as Ex.D.1 to Ex.D.3. DW.1 was cross examined on behalf of the Complainant/Respondent on 08.04.2019, 01.07.2019 & 01.10.2019.
On hearing both the sides, the Trial Court has passed the Judgment convicting the Appellants /Accused persons for the offence punishable U/Sec. 138 of N.I. Act on 19.11.2020. Hence, the Appellant is before this Court, being aggrieved by the said Judgment of conviction.
5. On preferring the appeal, this Court has suspended the execution and operation of the judgment, initially for a period of three months on 19.12.2020. Notice of Appeal Memo and I.A.No.1 was issued to the Respondent and TCR were called 6 Crl.Appeal.No.25181/2020 for. Respondent/Complainant setin his appearance on 16.02.2021. TCR were secured on 26.02.2021.
Heard the Learned Counsels for the Appellant and the Respondents.
6. The Appellants have 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, a blank signed Cheque, was issued as a security;
d) The Trial Court has failed to consider that, the entire amount is paid by the Appellants, but the Appellants would not take back the said cheque from the Respondent;
e) The Trial Court has failed to consider the documents produced by the Appellants at ExD1 to ExD3;7 Crl.Appeal.No.25181/2020
f) The Trial Court has failed to consider that, the Appellants are not due to pay any amount to the Complainant, towards the transaction inbetween them, as alleged by the Complainant;
g) The Trial Court has not properly appreciated and considered the principles of law laid down in the citations relied before it;
h) The Trial Court has failed to convict the Appellant on the basis of assumptions and presumptions, which are not sustainable under the law;
i) 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 persons have failed to rebut the said presumption;
Hence, prayed to allow the said appeal.
7. Following points arise for my consideration;
1. Whether the Trial Court is right in holding that the Respondent/ Complainant is initially entitle for the benefit of presumption, available U/Sec. 139 of N.I. Act?
8 Crl.Appeal.No.25181/20202. Whether the Appellants/ Accused persons prove on the basis of preponderance of probabilities that, the blank signed ChequeEx.P.1 was issued, as security?
3. Whether the Appellant/ Accused proves on the basis of preponderance of probabilities that, inspite of receipt of the entire amount, the Respondent has misused the ChequeExP1, to file the present Complaint?
4. Whether the Trial Court has rightly held that, Appellants/ Accused persons have failed to rebut the presumption available U/Sec. 139 of N.I. Act?
5. Whether the Appellants/ Accused persons show that the Order of Conviction and Sentence recorded by the Trial Court in CC.No.56478 of 2016, dtd.19.11.2020, deserves to be setaside, and thereby call for the interference of this Court?
6. What Order?
8. My finding on the above points are as under:
9 Crl.Appeal.No.25181/2020Point 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;
Point No.6 : As per final order for the following :
REASONS
9. The rank of parties will be referred to, as they were before the Trial Court.
10. POINT NO. 1: The Complainant has filed a Complaint U/Sec. 200 of Cr.P.C. alleging that, the Accused persons approached him with a request of handloan of Rs.5,00,000/ accordingly he paid the same through cheque, which was remitted in the account of the Accused No 1. On several reminders, inorder to pay the partial amount, i.e., towards Principle amount, the Accused persons issued Cheque belonging to the Accused No 1 Partnership firm, bearing its No 489924 for Rs 5,00,000/ as per ExP1. The said cheque was presented for its encashment, but the same has returned unencashed, with an 10 Crl.Appeal.No.25181/2020 endorsement "Funds Insufficient" on 18.08.2016, as per ExP2. Legal Notice dated 01.09.2016 was issued by the Complainant through his lawyer, to the Accused persons, as per ExP3 by RPAD, as per Postal receipts ExP4. The said notice was received by the Accused persons, as per Postal Acknowledgements ExP5 & ExP6. The Accused persons have issued reply to the said notice, as per ExP7.
11. On the basis of the said documents and the preliminary evidence led by the Complainant, the Trial Court has issued summons to the Accused U/Sec.204 of Cr.P.C. I do not find any error in the said order of the Trial Court.
12. The Accused No 2 had appeared before the Trial Court on 03.11.2017 and he was enlarged on bail. Substance of Accusation/Plea was recorded on 03.11.2017. I have gone through the contents of the substance of Accusation/Plea recorded by the Trial Court. I do not find any fault, in the 11 Crl.Appeal.No.25181/2020 Plea/Substance of Accusation, recorded by the Trial Court.
13. The defence takenup by the Accused persons:
a) ChequeExP1 blank signed cheque was issued as security;
b) Entire amount of Rs 5,00,000/ is paid by them to the Complainant;
c) when the Complainant was asked to returned the said Cheque, he had given a lame excuse that he had misplaced the chequeEXP1, and being found, he will return the said cheque;
d) Inspite of receiving the entire amount, the Complainant has failed to return the cheque and has misused the same by filing the present complaint.
14. Coming to the ocular evidence on the point of giving of cheque by the Accused persons to the Complainant, the same can be seen, more specifically,
a) in the cross examination of PW1, Page No 4, Line Nos 1 & 2, which reads as under:
12 Crl.Appeal.No.25181/2020"... It is false to suggest that I have misused the blank signed cheque given by the Accused to me. ...."
b) in the cross examination of PW1, Page No 2, Para No 2, Line Nos 7 to 10, which reads as under:
"... It is false to suggest that when I have suffered loss in my business. I have filled the blank signed cheque of accused and filed this false case against the accused. ...."
c) in the examinationinchief of DW1, Page No 1, Para No 2, Line Nos 1 to 3, which reads as under:
"The complainant has advanced interest free loan of Rs 5 lakhs on 31.10.2014 and on the same I have issued a undated cheque in favour of the complainant. ...."
d) in the examinationinchief of DW1, Page No 2, Para No 2, Line Nos 17 & 18, which reads as under:
"... the cheque at ExP1 has been issued as security and that has been misused by the Complainant. ...."13 Crl.Appeal.No.25181/2020
e) in the cross examination of DW1, Page No 6, Para No 1, Line Nos 10 & 12, which reads as under:
"... When it is questioned to the witness that did you issue the cheque to the complainant; the witness said yes, he issued it in the year 2014."
15. Thus from the above ocular evidence, it is crystal clear that the ChequeExP1 was issued by the Accused No 2, belonging to the Accused No 1. But as per the Accused persons, they contend that the said cheque was signed blank cheque when it was issued and the same was issued as a security. But the Complainant contends that the said cheque was issued towards repayment of the Principle amount of Rs 5,00,000/ given to the Accused persons.
16. Thus the Complainant has proved the initial burden casted upon him U/Sec.138 of N.I. Act, to show that, the Cheque belong to Accused No 1, issued by the Accused No 2.
14 Crl.Appeal.No.25181/202016.01. On viewing the amount of oral evidence with Ex.P.1 to Ex.P.7, which will suffice the Complainant to have benefit of presumption available U/Sec.138, 139 of N.I. Act.
16.02. As per the trite principle of law, dealing with the presumption U/Sec.138 & 139 of N.I.Act and as per the 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 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".
16.03. Now it is for the Accused to rebut the said presumption, available to the Complainant U/Sec.139 of N.I.Act.
Hence, I answer POINT NO.1 IN THE AFFIRMATIVE.
15 Crl.Appeal.No.25181/202017. POINT NOS.2 to 4:
Since all these three Points are interlinked with each other, they are taken for joint discussion, inorder to avoid repeatation and confusion in the discussion.
The defence takenup by the Accused persons is that, the Complainant has paid an amount of Rs 5,00,000/, interest free loan to the Accused No 1 and the Accused No 2 on behalf of the Accused No 1 had issued signed blank chequeExP1 to him, as security. Accused persons have paid the entire amount to the Complainant. After receipt of the amount when the Complainant was asked to return the signed blank cheque, the Complainant gave an excuse that he has misplace the same and on finding the same, he will return. Without returning the cheque, inspite of paying the entire amount, he has misused the cheque by filling it and has filed the Complaint.
This defence has to be looked into from three angles:16 Crl.Appeal.No.25181/2020
a) Payment of Rs 5,00,000/ by the Complainant to the Accused persons;
b) Repayment of the said amount by the Accused persons to the Complainant; and
c) retaining of the cheque by the Complainant, contending that the same is misplaced.
18. Coming to the ocular evidence on the point of payment of Rs 5,00,000/ by the Complainant to the Accused persons. This can be seen, more specifically,
a) in the cross examination of PW1, Page No 1, Line Nos 6 to 8, which reads as under:
"... It is true that accordingly to me the accused approached me for a hand loan of Rs 5 lakhs in the month of October 2014. ...."
b) in the examinationinchief of DW1, Page No 1, Para No 2, Line Nos 1 to 3, which reads as under:
"The complainant has advanced interest free loan of Rs 5 lakhs on 31.10.2014 and on the same I have issued a undated cheque in favour of the complainant. ...."17 Crl.Appeal.No.25181/2020
c) in the examinationinchief of DW1, Page No 2, Para No 2, Line Nos 14 to 16, which reads as under:
"... I am not liable to pay the cheque amount to the complainant as I have paid entire amount to the complainant that has been borrowed by me. ...."
18.01. As per the above ocular evidence, the Accused persons admit to have borrowed Rs 5,00,000/ from the Complainant and the Complainant has paid the said amount of Rs 5,00,000/ to the Accused persons.
18.02. Coming to the documentary evidence on this point, more specifically the reply issued on behalf of the Accused persons to the notice issued on behalf of the Complainant, the said reply notice is marked as ExP7. Coming to the recitals of the said Reply NoticeExP7, at Page No 2, Para No 2, Line Nos 3 to 8, which reads as under:
18 Crl.Appeal.No.25181/2020".... My Client who had a temporary financial need gracefully accepted the offer of Rs 500000/(five lakhs) only. With a clear understanding that no interest is payable, as the both clients know to one another for a very long time and as a one time measure in a friendly affair, mutually agreed terms that, the short term financial accommodation shall be cleared at the earliest possible time. ...."
18.03. Even as per the reply, the Accused persons clearly admit to have received Rs 5,00,000/ from the Complainant.
18.04. Thus, as per the above ocular and documentary evidence, it can be concluding, on this point that the Complainant has paid an amount of Rs 5,00,000/ to the Accused persons.
19. Secondly, the Complainant contends that he has received Rs 50,000/ from the Accused persons as interest. But the Accused persons contend that they had borrowed interest free loan of 19 Crl.Appeal.No.25181/2020 Rs 5,00,000/ from the Accused and has paid the entire amount. And the amount of Rs 50,000/ is paid towards the principle amount and not towards the interest.
19.01. Coming to the ocular evidence on the point of repayment of Rs 50,000/ by the Accused persons to the Complainant.
a) in the cross examination of PW1, Page No 1, Line Nos 17 to 20, which reads as under:
"... When it is questioned to the witness that whether the accused repaid Rs 50,000/ on 03.11.2014 on your request or the accused voluntarily paid; the witness said that the said amount has been paid by the accused towards the interest. ...."
b) in the cross examination of PW1, Page No 3, Line Nos 17 to 21, which reads as under:
"... There is no agreement as on 03.11.2014 between me and the accused regarding the interest payment of Rs 50,000/. It is false to suggest that the accused has paid Rs 50,000/ 20 Crl.Appeal.No.25181/2020 towards the principle amount as on 03.11.2014."
19.02. As per the above ocular evidence, the though admits receipt of Rs 50,000/ but he contends that the same is received by him towards the interest. The Complainant also admits that no agreement was entered on 03.11.2014 towards payment of interest of Rs 50,000/.
19.03. Coming to the documentary evidence on this point, more specifically,
a) the notice issued on behalf of the Complainant to the Accused persons, the said notice is marked as ExP3. Coming to the recitals of the said NoticeExP3, at Page No 1, Para No 4, which reads as under:
"4. As per the understanding between you and my client, you were to repay the loan to my client within a period of 5 months, i.e., on or before 31.03.2015, and the interest agreed upon was at the rate of 1.5% per month. The interest component was to be paid to my client on a monthly 21 Crl.Appeal.No.25181/2020 basis. In compliance thereof, you made a payment of Rs 50,000/ towards interest on 03.11.2014 to my client."
b) the reply issued on behalf of the Accused persons to the notice issued on behalf of the Complainant, the said reply notice is marked as ExP7. Coming to the recitals of the said Reply NoticeExP7, at Page No 2, Para No 2, Line Nos 3 to 10, which reads as under:
".... My Client who had a temporary financial need gracefully accepted the offer of Rs 500000/(five lakhs) only. With a clear understanding that no interest is payable, as the both clients know to one another for a very long time and as a one time measure in a friendly affair, mutually agreed terms that, the short term financial accommodation shall be cleared at the earliest possible time. In this direction as a part payment Rs 50000/ (fifty thousand) a cheque was issued and duly honoured, the same has been admitted by your client in your notice, ...."
22 Crl.Appeal.No.25181/202019.04. As per the NoticeExP3, the Complainant contend that there was an oral understanding to give interest of Rs 50,000/ per month to him. But as per the Reply NoticeExP7, the Accused persons contend that it was interest free loan and no agreement was entered withregard to payment of interest of Rs 50,000/ per month.
19.05. Thus, as per the above ocular and documentary evidence, it can be concluding, that since there was no agreement for repayment of handloan with interest, then the amount admittedly paid by the Accused persons is to be held as, paid towards the principle amount and not towards the interest.
20. Thirdly, the Accused contends that remaining balance of Rs 4,50,000/ they have paid to the Complainant on several occasions, which the Complainant denies.
20.01. Coming to the ocular evidence on the point of repayment of Rs 4,50,000/ by the Accused 23 Crl.Appeal.No.25181/2020 persons to the Complainant. This can be seen, more specifically,
a) in the cross examination of PW1, Page No 1, last but 2 lines onwards, which reads as under:
"... It is false to suggest that the accused inbetween 03.11.2014 to 30.12.2015 paid Rs 4,50,000/ in installments of Rs 20,000/, 30,0000/ to 1 lakh."
b) in the cross examination of PW1, Page No 3, Line Nos 21 to Page No 4, Line No 1, which reads as under:
"... It is false to suggest that after paying Rs 50,000/ the accused has paid Rs 4,50,000/ in cash to me. It is false to suggest that there is no due or liability by the Accused to me. ...."
c) in the examinationinchief of DW1, Page No 2, Para No 2, Line Nos 1 to 8, which reads as under:
"The complainant has advanced the money as a loan and also assured me that he will adjust the amount towards the commission if the business has been happened. On 03.11.2014 I 24 Crl.Appeal.No.25181/2020 have repaid Rs 50,000/ to the complainant on his request and the said payment is a part payment out of the aforesaid Rs 5 lakhs. Thereafter within 7 months I have repaid the entire amount to the complainant in installments of Rs 50,000/, Rs 60,000/ and Rs 1,00,000/. ...."
d) in the cross examination of DW1, Page No 6, Para No 1, Line Nos 1 to 10, which reads as under:
"I am the partner in accused no. 1 firm. Accused no. 1 is registered partnership firm. The accused no. 1 is still conducting the business. A1 partnership firm maintains its account. When it is questioned to the witness that you have claimed that you have repaid the amount due ot the complainant and whether that has been disclosed or recorded in the account maintained by accused no. 1; the witness said that 50,000/ is accounted. The witness volunteers that he has paid the remaining amount in cash and that has not been stated in the accounts of A1. ..."25 Crl.Appeal.No.25181/2020
e) in the cross examination of DW1, Page No 6, Para No 2, which reads as under:
"When it is questioned to the witness that you have claimed that you have paid Rs 4.5 lakhs to the complainant and did you have any receipts for having been paid the money to the complainant; the witness said that he did have the receipts but due to the period of time he has misplaced the said receipts. I might have misplaced the said receipt by the end of the year 2015. I have no document from the complainant for having been paid the said amount or endorsement or Acknowledgment from the complainant regarding no due certificate. I have paid Rs 50,000/ to the Complainant through cheque and that has been issued by A1."
20.02. As per the above ocular evidence, the Accused persons contend that they have paid Rs 4,50,000/ in installments to the Complainant, by cash, but they do not have any receipt to show the same. Even the said repayment is not recorded in the accounts of the Accused No 1 firm.
26 Crl.Appeal.No.25181/202020.03. Coming to the documentary evidence on this point, more specifically the reply issued on behalf of the Accused persons to the notice issued on behalf of the Complainant, the said reply notice is marked as ExP7. Coming to the recitals of the said Reply NoticeExP7, at Page No 2, Para No 2, Line Nos 10 to 12, which reads as under:
".... At the request of your client balance due amount was paid by cash on various dates, the details shall be produced at a appropriate time. ...."
20.04. Even as per the reply, the Accused persons contend that they have paid balance amount of Rs 4,50,000/ on various dates and the details will be produced at the appropriate time.
20.05. Thus, as per the above ocular and documentary evidence, it can be concluded that when the Accused persons contend to have paid the balance amount of Rs 4,50,000/ to the Complainant. ON denial of the said fact by the 27 Crl.Appeal.No.25181/2020 Complainant, then it is for the Accused persons to prove the said repayment.
The Accused persons contend in the reply notice that they will supply the details of repayment on the appropriate time, then they ought to have produced the said evidence, to show the payment of the balance amount of Rs 4,50,000/.
Further the Accused No 2 contends that he was having receipts for having paid Rs 4,50,000/, but he has misplaced the said receipts. No receipts are produced by the Accused persons, to show the repayment of balance amount of Rs 4,50,000/ to the Complainant.
When the Accused persons contend that the loan was raised for the Accused No 1 firm and repayment of Rs 50,000/ is done to Complainant through cheque pertaining to Accused No 1 firm, then why repayments of the balance amount of Rs 4,50,000/ is not either made through Accused No 1 firm and paid in cash; or why the said repayments are not recorded in the books of accounts of the Accused No 1 firm. In the absence of any explaining 28 Crl.Appeal.No.25181/2020 to these effect, it can be safely concluded that the Accused persons have failed to prove the alleged repayment of the balance amount of Rs 4,50,000/ to the Complainant.
21. Fourthly, the Accused persons contend that inspite of repayment of the entire due amount by them to the Complainant, he has not returned the signed blank cheque, contending that it is misplaced.
21.01. Coming to the ocular evidence on this point:
a) in the cross examination of PW1, Page No 2, Para No 2, Line Nos 4 to 7, which reads as under:
"... It is false to suggest that after repaying the entire amount when the accused asked me to return the cheque I told him that the cheque has been misplaced and I will return on its trace. ...."
As per this evidence, a suggestion is made to the Complainant that he told on receipt of the entire amount that he has misplaced the cheque and on tracing the same, he will return it. The said 29 Crl.Appeal.No.25181/2020 suggestion is denied. When it is denied, it is the duty of the Accused persons to prove the said fact.
b) in the examinationinchief of DW1, Page No 2, Para No 2, Line Nos 8 to 13, which reads as under:
"... Thereafter, though I requested to complainant to return the cheque every day, the complainant told me that he has misplaced the cheque and nothing to worry and the said assurance was continued till the year 2015 and I kept quiet as I have trusted him. ....."
21.02. Coming to the documentary evidence on this point, more specifically, the reply issued on behalf of the Accused persons to the notice issued on behalf of the Complainant, the said reply notice is marked as ExP7. Coming to the recitals of the said Reply NoticeExP7, at Page No 2, Para No 2, Line Nos 12 to 14, which reads as under:
".... My Client inadvertently not taken back the cheque issued favouring your client, the same was issued 30 Crl.Appeal.No.25181/2020 Voluntarily at the availing short term loan despite full payment made to your client."
As per the Reply NoticeExP7, the Accused persons contend that the cheque issued at the time of availing the loan, was not received by them, after payment of entire amount, due to their inadvertence.
21.03. Thus, as per the above ocular and documentary evidence, it can be concluded that, in ocular evidence, it is suggested that the Accused No 2 demanded for return of the signed blank cheque ExP1 after making entire payment, but as per ExP7 Reply, the Accused persons contend that due to their inadvertence they have not received back the chequeExP1 from the Complainant. Thus the Accused persons have failed to prove the fact that, on repayment of the entire due, on demand of ExP1 Cheque, the Complainant posed that he has misplaced the said cheque and on tracing the same, he will return the same to them.
31 Crl.Appeal.No.25181/202021.04. When the Complainant has not returned the signed blank cheque, on payment of entire loan amount by the Accused persons, then a man of ordinary prudence, would have issued notice to the Complainant to return the ChequeExP1. Even the same is not done by the Accused persons. This can be seen as per the cross examination of DW1 at Page No 7, Para No 2, Line Nos 8 to 12, which reads as under:
"... I have not caused any written notice to the complainant calling him to return the cheque. I have not caused any written notice to the complainant after the bouncing of cheque that why he has presented the cheque for encashment. ..."
22. So the defence takenup by the Accused persons have remained unproved..
23. As per the decision of the Hon'ble Apex Court, in the case of APS Forex Services Pvt. Ltd., V/s Shakthi International Fashion linkers & others, wherein it is held that;
32 Crl.Appeal.No.25181/2020"When the financial capacity of the Complainant is questioned in support of probable defence, despite presumption U/Sec. 139 of the N.I. Act, withregard to the existence of legally enforceable debt, the onus shifts on the Complainant to prove the financial capacity. Under such circumstances, complainant is required to prove his financial capacity, inorder to raise the presumption available U/Sec. 139 of N.I. Act, in his favour".
23.01. Further, as per the decision of the Hon'ble Apex Court, in the case of Basalingappa V/s Mudibasappa, reported in (2019) 5 SCC 418, wherein it is held that;
"Appellant disputing financial capacity of the Complainant to pay the amount, by leading cogent evidence to prove it, leads to the Accused probablising his defence, then burden would be on the Complainant to establish his financial capacity".
23.02. Further, as per the decision of the Hon'ble Apex Court, in the case of John K Abraham Vs Simon C Abraham & Anr, reported in (2014) 2 SCC 236, wherein it is held that;
33 Crl.Appeal.No.25181/2020"Inorder to draw presumption U/Sec 118(a) R/w Sec 139, burden lies on the Complainant to show that
(i) that he had the requisite funds for advancing the sum of money/loan in question to the accused;
(ii) that the issuance of cheque by 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 cheque in favour of complainant."
23.03. Further, as per the decision of the Hon'ble Apex Court, in the case of M S Narayana Menon Alias Mani Vs State of Kerala & Another, reported in (2006) 6 SCC 39; in the case of wherein it is held that;
"Initial burden is on the Accused to rebut the presumption U/Sec 118(a) and 139, as to the issuance of cheque for consideration and discharge of debt, by raising probable defence. If the accused discharges the said burden, the onus thereafter shifts on to the complainant to prove his case.34 Crl.Appeal.No.25181/2020
Burden of proof on accused is not heavy. Accused need not disprove the prosecution case in its entirety. Accused can discharge the burden on the basis of preponderance of probabilities through direct or circumstantial evidence."
24. Applying the above principles of law to the instant case at hand, it is seen that, in the present case though the Accused persons contend that they have repaid the entire amount to the Complainant, but the same is not proved by any cogent evidence. Hence, the said stand of the Accused persons is not acceptable.
25. Under these circumstances, the Accused persons/Appellants should have led some cogent evidence to show that
a) they had given ExP1 signed blank cheque to the Complainant, at the time of availing handloan of Rs 5,00,000/;
b) they have repaid the entire loan amount of Rs 5,00,000/ to the Complainant;
35 Crl.Appeal.No.25181/2020c) Complainant has failed to return back the signed blank cheque to them.
Unless the Accused persons lead cogent evidence to these effects, the defence of the Accused persons will not become probable, but it will be merely a palpable defence, which will not be sufficient to discharge their duty to rebut the presumption available U/Sec. 139 of the N.I. Act, to the Complainant.
26. Thus, as per the above oral and documentary evidence, it can be said that, the Accused persons have taken inconsistent stands in their defence. On looking to the line of defence and the various contentions taken up by the Accused persons, in their evidence, the version of the Accused persons will not inspire the confidence of this Court. Hence, the contention of the Appellants/Accused persons cannot be accepted, at all.
27. Considering the inconsistent contentions raised by the Accused persons in the cross examination of PW1 and on leading evidence as DW1, as well as ExD1 to ExD3 produced by them, 36 Crl.Appeal.No.25181/2020 are of no relevancy to their stand/defence, it can be said that, the stands taken up by the Accused persons, is not fortified with cogent evidence, on the basis of preponderance of probabilities, inorder to rebut the presumption available to the Complainant, U/Sec 139 of NI Act. So, in the absence of material evidence, the different and distinct stands, taken up by the Accused persons, cannot be accepted at all.
28. Thus, the presumption available to the Complainant U/Sec. 139 of N.I. Act, has remained unrebutted, from the side of the Appellants/Accused persons. Hence, presumption available to the Complainant U/Sec.139 of N.I.Act stands unrebutted. I have gone through the Judgment of the Trial Court, rightly the Trial Court has concluded that the Accused persons have failed to rebut the presumption available to the Complainant U/Sec.139 of N.I.Act.
HENCE, I ANSWER POINT NOS. 2 & 3 IN THE NEGATIVE AND POINT NO.4 IN THE AFFIRMATIVE.
37 Crl.Appeal.No.25181/202029. POINT NO 5:
Under these circumstances, there is no any hurdle to derive the presumption available to the holder of the cheque U/Sec.118 as well as U/Sec. 139 of N.I.Act. I find force to my above opinion as per the decision of the Hon'ble Apex Court in the case of Hiten Pidalal V.s Bratindranath Banergi reported in 2001 Crl.L.J. 4647 (Supreme Court) as well as in the case of M.S.Narayan Menon @ Mani V/s State of Kerala and Another reported in 2006 SAR.Crl.616 and in the case of Krishna Janardhan Bhat V/s Dattatreya G. Hegde reported in (2008)2 SCC Crl. 166. Rightly, the Trial Court has considered all these aspect and there is no any fault on the part of the Trial Court. I do not find any force in the submission of the learned counsel for the Appellant.
30. Further 313 Statement is recorded by the Trial Court on 05.06.2018, it covers the entire incriminating substance, brought on record by way of evidence, against the Accused. The Trial Court 38 Crl.Appeal.No.25181/2020 has examined the Accused U/Sec. 313 of Cr.P.C. I have gone through the statement of the Accused recorded by the Trial Court U/Sec. 313 of Cr.P.C., and reply given by the Accused, to the said questions, in the statement, more specifically reply given to question No 3. I do not find any fault in the statement of the Accused, recorded by Trial Court U/Sec 313 of Cr.P.C.
31. I have carefully gone through the reasonings given by the Trial Court, while awarding compensation to the Complainant U/Sec.357 of Cr.P.C. The Trail Court has not considered the amount of Rs 50,000/ paid by the Accused Persons to the Complainant, while awarding Compensation, which it ought to have considered. To that effect the order of the Trail Court requires modification and rest all finds are required to be maintained.
32. Further inorder to conclude, the Hon'ble High Court has held in General Auto Sales Vs Vijayalakshmi, reported in 2005(1) KLT 478, in Paragraph No 8 thereof, that:
39 Crl.Appeal.No.25181/2020"Even if a blank signed cheque has been given towards liability or even as security, then the liability subsists and quantified, if the cheque is filled up and presented to the Bank, the person who had drawn the cheque, cannot avoid the criminal liability under Section 138 of NI Act".
Further the Hon'ble Apex Court has held in Rangappa Vs Sri Mohan, reported in (2010) 11 SCC 441, that;
"Once issuance of cheque and signature thereon are admitted, presumption of a legally enforceable debt infavour of the holder of the cheque arises. It is for the Accused to rebut the said presumption, though Accused need not adduce his own evidence and can rely upon the material submitted by the Complainant. However, mere statement of the Accused may not be sufficient to rebut the said presumption".
33. In this case there was really presumption available infavour of the Complainant in terms of Section 138 & 139 of Negotiable Instruments Act, against the Accused persons and they have not discharged their burden to rebut that presumption.
40 Crl.Appeal.No.25181/202034. The Trial Court has considered all the aspects, the grounds taken up by the Accused as defence. The Order of the Trial Court in awarding compensation to the Complainant, is only required to be modified.
35. When no fault is committed by the Trial Court, in coming to the conclusion, convicting the Accused for the offence punishable U/Sec 138 of NI Act, interference to that effect, by this Court does not arise at all.
36. Thus, I am declined to interfere with the findings recorded by the Trial Court, except withregard to the modification of awarding compensation to the Complainant U/Sec 357(1) (b) of CrPC.
37. Necessarily the prosecution succeeds. The conviction is therefore confirmed, as the accused is found guilty of the offence punishable under Section 138 of Negotiable Instruments Act. The Accused is hereby directed to pay fine of 41 Crl.Appeal.No.25181/2020 Rs 5,10,000/ out of which an amount of Rs 5,00,000/ is to be paid to the Complainant, as compensation. To this effect the order of the Trail Court stands modified.
Hence, for the above reasons I am constrained to answer POINT NO.5 IN THE NEGATIVE.
38. POINT NO. 6:
For having answered Point Nos 1 & 4 in the Affirmative and Point Nos 2, 3 & 5 in the Negative, I proceed to pass the following:
ORDER Acting U/Sec.386 (b) (iii) of Cr.P.C., the Appeal preferred by the Appellant/Accused is hereby Dismissed, by modifying the order of the Trail Court, withregard to sentence pertaining to payment of fine.
In the consequences, the order passed by the Learned XXXIII Addl. ACMM, Bengaluru, in C.C.No.56478 of 2016 dtd.19.11.2020, recording 42 Crl.Appeal.No.25181/2020 conviction of the Accused, is hereby confirmed.
The Accused Persons are sentenced to pay fine of Rs 5,10,000/ (Rupees Five Lakhs Ten Thousand Only), indefault, the Accused No 2 shall undergo Simple Imprisonment for a period of six months.
Further an amount of Rs 5,00,000/ is to be paid to the Complainant as compensation, U/Sec 357 (1)(b) of CrPC, out of the fine amount and an amount of Rs 10,000/ is to be paid to the State, as exchequer fine.
The Trial Court shall execute these orders, as per law.
No order as to 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.
Remit the TCR to the Trial Court, on obtaining necessary 43 Crl.Appeal.No.25181/2020 acknowledgement, alongwith the copy of this Judgment.
(Dictated to the Judgmentwriter directly on the computer, corrected and pronounced in open court this the 5th day of March, 2021.) [AbdulRahiman. A. Nandgadi] LXXII Addl.City Civil & Sessions Judge, Bengaluru. (CCH73).