Bangalore District Court
Sri.M.Vishwanath vs M/S Pushpanjali Traders on 18 September, 2021
IN THE COURT OF THE XVIII ADDL.CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
PRESENT: MANJUNATHA M.S. B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
DATED : THIS THE 18th DAY OF SEPTEMBER 2021
Criminal Case No. 5857/2019
COMPLAINANT: Sri.M.Vishwanath,
S/o M.T.Marulasiddappa
Aged about 53 years,
R/at No.426/26, 2nd Main
Amarjyothi Layout,
Sanjayanagar, Bengaluru-560 094.
(By Sri.S.R- Advocate)
// Versus //
ACCUSED: 1. M/s PUSHPANJALI TRADERS
A sole Proprietorship Concern
Rep.by its Proprietor
Mr.Keshava Murthy D.R.
Major,
Father name not known to the
complainant
R/at No.116-122,
5th Main, Brindavan Extension,
2nd stage, Mysore-570 020.
2.Mr.Keshava Murthy D.R.
Major,
Father name not known to the
complainant R/at No.116-122,
5th Main, Brindavan Extension,
2nd stage, Mysore-570 020.
(By Sri. D.S- Advocate)
2 Judgment C.C.5857/2019
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Name of the complaint : Sri. M.Vishwanath,
S/o M.T.Murulasiddappa
Date of commencement
of evidence : 11-03-2019
Date of closing evidence : 17-03-2021
Opinion of the Judge : Accused found guilty.
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE.
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused alleging that, he has committed the offence punishable under section 138 of NI Act.
2. The sum and substance of the complaint, is as follows; The accused No.1 proprietorship concern represented by accused No.2 have entered into a Lease Deed dated 15-12-2015 with the 3 Judgment C.C.5857/2019 complainant in respect of property bearing commercial Shop No.S-2, situated on the Mysore measuring 1300 Sq.Ft of super built up area with electricity connection and infrastructure for a period of 12 years with lock-in period of two years commencing from 01-01-2016. However, due to various reasons accused had vacated the premises. At the time handing over the vacant possession of the said premises the accused has requested for three month time to clear outstanding amount towards full and final settlement, but he has not kept up his promise. On consistent demand, towards discharge of his above said liability, the accused has issued four cheques bearing No.632887 dated 25-09-2018 and No. 632884 dated 25-10-2018 and No. 632885 and 632886 both dated 25-11-2018 for Rs.40,500/- each drawn on Indian Overseas bank, Vijayanagar, Mysore Branch. The Complainant has presented the said first two cheques for encashment through his banker i.e., Indian Overseas bank, Vijayanagar, Mysore Branch. The said cheques were returned unpaid with an endorsement "Funds Insufficient" and the complainant has initiated legal proceedings in respect of said cheque. On the promise and assurance made by the accused, the Complainant has presented the said third 4 Judgment C.C.5857/2019 cheque bearing No. 632885 for Rs.40,500/- dated 25-11-2018 for encashment through his banker i.e.,Indian Overseas bank, Vijayanagar, Mysore Branch. The said cheque was returned unpaid with an endorsement "Funds Insufficient" in the drawer's account on 28-11-2018. Thereafter, the complainant has got issued demand notice on 27-12-2018 to the accused by demanding the payment of cheque amount. The notice was returned with endorsement "Intimation Delivered Unclaimed". Despite of the demand notice the accused has not paid the cheque amount and thereby he has committed an offence punishable under section 138 of N I Act.
03. After filing of complaint, this court has taken cognizance of the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of the complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, accused enlarged on bail and plea was recorded as per section 251 of Cr.P.C. The accused has not pleaded guilty but submitted that he has defense to make.
5 Judgment C.C.5857/2019
04. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in (2014) 5 SCC 590, this court treated the sworn statement of the complainant as complainant evidence. The accused has filed application under section 145(2) of NI Act for recall of PW1 for the purpose of cross- examination. The said application came to be allowed. Despite of giving reasonable opportunities, the accused has failed to cross- examine PW1. Hence cross-examination of PW1 taken as Nil vide order dated 16-02-2021 and posted case for statement of accused as contemplated under section 313 of Cr.P.C. It is seen from the order sheet when the matter was posted for statement of accused under section 313 of Cr.P.C, the accused remained absent and himself not available for the court to record the statement u/S 313 of CrPC. The said act of the accused has protracted the proceeding, which is against to the spirit of the special enactment of Negotiable Instruments Act. The accused intentionally has evaded appearing before the court.
5. Hon'ble High Court of Karnataka in Crl. R.P No. 437/10 vide its Judgment dated 28-06-2012, held that it was for the 6 Judgment C.C.5857/2019 accused to appear before the court and to have defended himself effectively and to make himself available for the court to record the statement u/S 313 of CrPC. In the Criminal Revision Petition the complainant has preferred the said revision before the High Court challenging the order of the 1st appellate court in remanding the matter for fresh trial for non recording the statement of accused U/s 313 of Cr.P.C. The Hon,ble High Court of Karnataka has clearly held that there is no justification in the appellate court having held that there is failure of justice on account of the statement of the accused not having been recorded under Sec. 313 of Cr.PC. Hence, in the present case also the accused has tried to drag the proceedings and thereby caused inordinate delay. The Hon'ble High court has also discussed the settled law in respect of statement of accused U/s 313 Cr.P.C. by referring the decision of a three-judge bench of Hon'ble Supreme Court in the case of Basavaraj R Patil vs. State of Karnataka, (2000)8 SCC 740.
6. Even the Hon'ble Supreme Court in the case of Indian Bank Association and others Vs Union of India and others 7 Judgment C.C.5857/2019 reported in AIR 2014 SC 2528 while giving guidelines to the trial court dealing with case under section 138 of NI Act, the Hon'ble Supreme Court has not stated for recording of statement of accused under section 313 of Cr.P.C. by putting incriminating evidence. The Hon'ble court has held that if the accused has not filed any application under section 145(2) of NI Act for recall of complainant for cross-examination, the court has to post the case straight away for defence evidence. Even in M/s. Cheminova India Ltd, Vs. Jaaji Pesticides in Crl. Appeal No. 376/2007 dated 25.2.2012 the Hon'ble High Court has not found fault in the trial court for dispensing the statement of accused under section 138 of NI Act. By relying the aforesaid judgments this court has dispensed the recording of statement of accused u/S 313 of Cr.P.C. and posted case for defence evidence. Thereafter in spite of giving sufficient opportunities the accused has not adduced defence evidence. Hence the defence evidence has taken nil and posted case for argument vide order dated 17-03-2021.
07. Heard the arguments of learned counsel for complainant. Despite of giving sufficient opportunities the defence counsel has not 8 Judgment C.C.5857/2019 addressed his arguments. I have perused the materials available on record.
08. The points that arise for my consideration are as follows;
1. Whether the complainant proves that, accused issued cheque bearing No.632885 dated 25/11/2018 for Rs.40,500/- towards discharge of his liability, which was returned unpaid on presentation for the reason "Fund Insufficient" and despite of service of notice he has not paid the cheque amount and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
09. My answer to the above points is as follows;
Point No.1: In the Affirmative.
Point No.2: As per final order for the following;
REASONS
10. POINT No.1: The Complainant has filed this complaint alleging that the accused has committed offence punishable under section 138 of N.I. Act. He pleads and asserts that, The accused No.1 proprietorship concern represented by accused No.2 have entered 9 Judgment C.C.5857/2019 into a Lease Deed dated 15-12-2015 with the complainant in respect of property bearing commercial Shop No.S-2, situated on the Mysore measuring 1300 Sq. Ft of super built up area with electricity connection and infrastructure for a period of 12 years with lock-in period of two years commencing from 01-01-2016. However, due to various reasons accused had vacated the premises. At the time handing over the vacant possession of the said premises the accused has requested for three month time to clear outstanding amount towards full and final settlement, but he has not kept up his promise. On consistent demand, towards discharge of his above said liability, the accused has issued four cheques bearing No.632887 dated 25-09- 2018 and No. 632884 dated 25-10-2018 and No. 632885 and 632886 both dated 25-11-2018 for Rs.40,500/- each drawn on Indian Overseas bank, Vijayanagar, Mysore Branch. The Complainant has presented the said first two cheques for encashment through his banker i.e.,Indian Overseas bank, Vijayanagar, Mysore Branch. The said cheques were returned unpaid with an endorsement "Funds Insufficient" and the complainant has initiated legal proceedings in respect of said cheque. On the promise and assurance made by the 10 Judgment C.C.5857/2019 accused, the Complainant has presented the said third cheque bearing No. 632885 for Rs.40,500/- dated 25-11-2018 for encashment through his banker i.e.,Indian Overseas bank, Vijayanagar, Mysore Branch. The said cheque was returned unpaid with an endorsement "Funds Insufficient" in the drawer's account on 28-11-2018. Thereafter, the complainant has got issued demand notice on 27-12- 2018 to the accused by demanding the payment of cheque amount. The notice was returned with endorsement "Intimation Delivered Unclaimed". Despite of the demand notice the accused has not paid the cheque amount. Despite of notice, the accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint. To substantiate his case the complainant himself stepped into witness box and examined as PW.1 and got marked Ex.P-1 to Ex.P-5. The complainant has reiterated the contents of the complaint in his affidavit evidence about issuance by the accused towards discharge of his liability and its dishonour for insufficient funds in the account maintained by the accused, issuance of legal notice to the accused calling upon him to pay the amount covered under cheque and his failure to comply the same.
11 Judgment C.C.5857/2019
11. In this scenario, let me scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 is cheque dated 25-11-2018 , the said cheque was returned with an endorsement "Funds Insufficient" as per Ex.P.2 bank endorsement dated 28-11-2018. Ex.P.3 is legal notice dated 27-12-2018, Ex.P.4 is postal receipt and Ex.P.5 is unclaimed postal cover. This complaint came to be filed on 31-01-2019. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act is complied with and this complaint is filed within time. Thus, complainant is entitle to relied on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act. Section 118 reads as here: - "That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration". Further Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here: - "It shall be presumed, unless the contrary is proved, 12 Judgment C.C.5857/2019 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, or any debt or other liability." A combined reading of above said sections raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability.
12. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence in the scale of preponderance of probability to rebut the presumption available to the complainant. Let me examine whether the accused has successfully rebutted the said presumptions of law. The accused neither led any defence evidence nor cross-examined PW1.
13. In this back drop, this court has given anxious consideration to the materials available on record. At the outset, the accused has not disputed issuance of cheque and his signature in the cheque by way of cross-examination. It goes without saying that, accused has not disputed the cheques in question and signatures found therein. When the drawer has admitted the issuance of the cheque as well as the 13 Judgment C.C.5857/2019 signature present therein, the presumptions envisaged under section 118 read with section 139 of NI Act, would operate in favour of the Complainant. The said provisions lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder the court shall presume that the instrument was endorsed for consideration. So also, in the absence of contrary evidence on behalf of the accused, the presumption under section 118 of the NI Act, goes in favour of the complainant. No doubt, said statutory presumptions are rebuttable in nature. As discussed earlier, when the complainant has relied upon the statutory presumptions enshrined under section 118 read with section 139 of NI Act, it is for the accused to rebut the presumptions with cogent and convincing evidence. To put it other way, the burden lies upon the accused to prove that cheques in question is not issued for discharge of debt or liability. It is worth to note that, Section 106 of Indian Evidence Act postulates that, the burden is on the accused to establish the fact which is especially within his special knowledge. This provision is exception to the General Rule that, the burden of proof is always on the prosecution to establish their case beyond all reasonable doubt. In 14 Judgment C.C.5857/2019 that view of the matter, the burden is on the accused to prove that the cheques in question not issued for discharge of any liability. 14 . As far as proof of existence of legally enforceable debt is concerned, it is profitable to refer the decision of full bench of the Hon'ble Apex Court reported in Rangappa Vs. Mohan reported in AIR 2010 SC 1898, Wherein their lordships pleased to observe that, "In the light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by section 139 of the Act does indeed include the existence of the legally enforceable debt or liability". In another decision reported in, (2015) 8 SCC 378 in the case of Vasanthakumar Vs. Vijayakumari, it is held that once the accused has admitted the issuance of Cheque as well as signature on it, the presumption under section 139 would be attracted. In K.N. Beena Vs Muniyappan and another reported in (2001) 8 SCC 458, the Hon'ble Apex Court, refers to Hiten P. Dalal Vs. Bratindranath Banerjee and holds, on the factual matrix, that bare denial of the liability in reply notice is not sufficient to shift the burden of proof on the complainant to prove that the cheque was 15 Judgment C.C.5857/2019 issued for a debt or liability. In view of the law laid by the Hon'ble Apex Court, the presumption enshrined under section 139 of the N.I. Act is extendable to the existence of legally enforceable debt. The story brought by the accused is unworthy of credit and not supported by any acceptable evidence. In other words, accused has not placed cogent material to rebut the said presumption. As such, the contention of the accused holds no water. The Hon'ble Supreme Court of India pleased to discuss aforesaid aspect in detail in the decision reported in, Rangappa Vs. Mohan reported in AIR 2010 SC 1898 = 2010 AIR (SCW) 2946, It is relevant to reproduce said observations; "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to in Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under the given 16 Judgment C.C.5857/2019 circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court. The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered.... "
15. It is further observed in para 18 of the decision that, Ordinarily in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumptions contemplated by Section 139 of the Act. " Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to
17 Judgment C.C.5857/2019 negotiable instruments in business transactions. These provisions were intended to discourage people from not honouring their commitments by way of payment through cheques. In view of Section 139, it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. A contrary view would render Section 138 of NI Act 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..." The Hon'ble Apex court clearly laid down the ratio that, when the ingredients of section 138 of NI Act are complied with, presumption shall be drawn in favour of the complainant. The burden is upon the accused to rebut the statutory presumptions.
16. Further, it is profitable to refer the authorities reported in, AIR 2019 Supreme Court 2446 in the case of Bir Singh Vs. Mukesh Kumar, it is held that;"Presumptions are rules of evidence 18 Judgment C.C.5857/2019 and do not conflict with presumption of innocence, which requires prosecution to prove case against accused- Obligation on prosecution may be discharged with help of presumptions of law and presumptions of fact unless accused adduces evidence showing reasonable possibility of non-existence of presumed fact. Onus to rebut presumption that cheque issued in discharge of debt or liability is on accused. " In the decision reported in, AIR 2019 SUPREME COURT 1876, in the case Rohitbhai Jivanlal Patel Vs. State of Gujarat and Another; wherein it is held that Once presumption of existence of legally enforceable debt drawn in favour of complainant, onus is shifted on accused- Unless onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused."In view of the law laid down in the aforesaid Rangappa's case and Bir Singh's case, the claim of the complainant is appears to be acceptable one.
17. Keeping in mind the position of law as stated supra, let me appreciate the evidence on record. In order to prove his case, the 19 Judgment C.C.5857/2019 complainant examined himself PW1 by reiterating the contents of the complaint and got marked Ex.P1 to 5. Despite of giving sufficient time, the accused did not even cross-examine PW1 nor appeared before the court to give evidence on his behalf. Therefore the evidence placed by the complainant is remained unchallenged and there is no reason to disbelieve the version of the complainant. Though the accused has denied the transaction while recording of his plea, but in support of his defence he has neither cross-examined PW1 nor led any defence evidence.
18. From the discussion made supra, it is clear that, accused has neither taken probable defence nor taken steps to prove the same. The contention of the accused that, disputed cheque was not issued towards discharge of his liability is also not proved through cogent and acceptable evidence. To put it other way, accused has not taken and proved probable defence to rebut the presumption of law available in favour of the complainant, envisaged under section 118 read with section 139 of N.I. Act. Accordingly, the case of the complainant is acceptable. Complainant has proved that, for 20 Judgment C.C.5857/2019 discharge of liability accused has issued Ex.P1 cheque and he has intentionally not maintained sufficient amount in his account to honour the said cheque. Hence, this point No.1 under consideration is answered in the Affirmative.
19. POINT NO.2: In view of the reasons stated and discussed above, the complainant has proved the guilt of the accused punishable under section 138 of N.I. Act. Hon'ble Supreme Court of India in a decision reported in, (2015) 17 SCC 368, in a case of H.Pukhraj Vs. D.Parasmal, observed that, having regard to the length of trial and date of issuance of the cheque, it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Further the Hon'ble Apex Court in its recent decision in M/s. Meters & instrument Pvt Ltd. Vs. Kanchana Mehta reported in (2018)1 SCC-560 held at para 18 that "The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to 21 Judgment C.C.5857/2019 the parties or the court." Therefore, keeping in mind the time when the transaction has taken place and primary object of the provision, this court is of the opinion that, rather than imposing punitive sentence, if sentence of fine is imposed with a direction to compensate the complainant for its monitory loss, by awarding compensation U/Sec.357 of Cr.P.C, would meet the ends of justice. The amount covered under the disputed cheque is Rs.40,500/-. The date of cheque is 25-11-2018. By considering all these aspects, this court is of the opinion that, it is just and proper to imposed fine amount of Rs.65,000/-, which includes interest and cost of litigation, out of which compensation of Rs.60,000/- has to be awarded to the complainant U/s 357 Cr.P.C. Accordingly, this court proceeds to pass the following;
ORDER Acting under section 255 (2) of Criminal Procedure Code, accused No.1 and 2 are here by convicted for the offence punishable under section 138 of Negotiable Instrument Act and accused No.2 is sentenced to pay fine of Rs.65,000/-(Rupees Sixty Five Thousand only).
22 Judgment C.C.5857/2019 In default thereof accused No.2 shall undergo simple imprisonment for the term of 6(Six) months.
Acting under section 357(1) (b) of code of criminal procedure, it is ordered that, Rs.60,000/- ( Rupees Sixty thousand only), therefrom shall be paid to the complainant as a compensation, remaining fine amount of Rs.5,000/-(Rupees Five Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
Office is directed to supply free copy of the judgment to the accused.
(Directly dictated to the Stenographer on computer, typed by her, corrected by me and then judgment pronounced in the open court on this the 18 th day of September 2021).
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE
Digitally signed by
MANJUNATHA MANJUNATHA M S
MS Date: 2021.09.18
16:53:47 +0530
ANNEXURE
I. List of witnesses on behalf of complainant:
P.W.1: M.Vishwanath
23 Judgment C.C.5857/2019
II. List of documents on behalf of complainant:
Ex.P-1 : Original Cheque.
Ex.P-2 : Bank memos.
Ex.P-3 : Legal notice.
Ex.P-4 : Postal receipt.
Ex.P-5 : RPAD postal cover
III. List of witnesses for the accused: Nil
IV. List of documents for accused:Nil
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE