Bangalore District Court
M/S Akshodaya Chits (Bangalore) Ltd vs Sri. Shambuling Mahadev Badiger on 26 September, 2024
C.C.NO.25489/2019
0
KABC030785392019
Presented on : 24-10-2019
Registered on : 24-10-2019
Decided on : 26-09-2024
Duration : 4 years, 11 months, 2 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 26th DAY OF SEPTEMBER-2024
C.C.NO.25489/2019
Complainant: M/s.Akshodaya Chits (Bangalore) Ltd.,
No.44/1, 2nd Floor, "Kamakshi Sadana"
4th Cross, Sampige Road,
Malleshwaram, Bangalore-560003.
R/by its GPA Holder, Sri.H.N.Paramesh.
(By Sri.B.Veeranna.,Adv.,)
V/s
Accused: Sri.Shambuling Mahadev Badiger,
S/o Sri.Mahadev, Director,
M/s.Sri.Sai Dhan Chits Pvt.,Ltd.,
Bus Stand Road, Mahalingapura Post,
Tq:Mudhol, Dist:Bagalkote-587312.
(By Sri.S.S.Jatti.,Adv.,)
:JUDGMENT:
] This case arises out of the private complaint filed by the complainant against the accused under section C.C.NO.25489/2019 1 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant company is registered under the companies Act. The complainant is in the business of promoting and conducting chits, as per the provisions of chit funds Act. The accused is a subscriber and he has subscribed to a chit bearing No.90001/07 for a chit value of Rs.1,00,00,000/- which is payable at the rate of Rs.2,50,000/- per month for 40 months. The accused had participated in the chit auction held on 28.07.2018 and that he was declared the prized bidder as he had bid the said chit for Rs.37,10,000/- and on 22.09.2018 he has received the prize money of Rs.62,90,000/- by offering three personal sureties and the collateral security of his immovable property. Further the accused has executed on demand promissory note and other relevant documents. Further stated that after receiving the prize money, the accused was not regular in repayment of his monthly chit installments and thereafter he became a defaulter. Hence, the complainant had informed the accused that if he fails to pay his chit installments they would file the money recovery suit against him and all his sureties. Thereafter towards the outstanding chit installment for C.C.NO.25489/2019 2 the month of May 2019, the accused had issued cheque No.032757 dated: 19.06.2019 for Rs.1,90,000/- drawn on Karnataka Vikas Grameena Bank, Mahalingapura branch. Accordingly, on 20.06.2019 the complainant presented the said cheque for encashment through its banker Karur Vysya Bank Limited, Malleshwaram Branch, Bangalore. But the said cheque was dishonored on 21.06.2019 as "Funds Insufficient. Thereafter on 27.06.2019 the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. The said legal notice returned on 29.06.2019 as Not claimed. Inspite of service of the legal notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 N.I.Act. Hence, the present complaint came to be filed before this court on 19.07.2019.
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R No.11664/2019. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 15.10.2019 to register the case in Register No.III.
C.C.NO.25489/2019 3
4. Thereafter, summons was issued to the accused and he has appeared before the court through his counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant in support of its case, have examined its General Manager as PW.1 and got marked 12 documents at Ex.P.1 to 12 and closed its side. During the course of cross examination of D.W.1 03 documents were marked at Ex.P.13 to 15 by way of confrontation.
6. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was recorded. The accused has denied the incriminating evidence appeared against him. In his defence, the accused examined himself as DW.1 and no documents were marked on his behalf.
7. I have heard the arguments on both the sides and perused the written arguments filed by the leaned counsels for the complainant and the accused and also perused the material placed on record.
8. Upon hearing the arguments and on perusal of the material placed on record, the following points arise C.C.NO.25489/2019 4 for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2. Whether the complainant further proves that the accused had issued the cheque-
Ex.P.8, towards the discharge of the said legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.8 was dishonored for the reasons "Funds Insufficient" in the account of the accused and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
9. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
10. POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken these points together for common discussion. The case of the complainant is that he was acquainted with the C.C.NO.25489/2019 5 accused. The accused is a subscriber and he has subscribed in chit bearing No.90001/07 for a chit value of Rs.1,00,00,000/- which is payable at the rate of Rs.2,50,000/- per month for 40 months. The accused had participated in the chit auction and that he was declared the prize bidder as he had bid the said chit for Rs.37,10,000/- and he has received the prize money of Rs.62,90,000/- by offering three personal sureties and the collateral security of his immovable property. Further, the accused has executed on demand promissory note and other relevant documents at the time of taking the prize money. After receiving the prize money, the accused was not regular in repayment of his monthly chit installments and thereafter he became a defaulter. Hence, the complainant had informed the accused that if he fails to pay his chit installments they would file the money recovery suit against him and all his sureties. Thereafter, the accused had issued the cheque in question for the month of May 2019. Accordingly, the complainant presented the said cheque for encashment through its banker. But the said cheque was dishonored as "Funds Insufficient. Thereafter the complainant got issued a legal notice to the accused through its counsel calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. Inspite of service of the legal notice, the accused neither reply to the notice nor paid C.C.NO.25489/2019 6 the cheque amount. As such, the accused have committed an offence punishable under section 138 N.I.Act. Hence, the present complaint came to be filed before this court.
11. In support of the case, the complainant have examined its General Manager as P.W.1 and totally 15 documents were marked at Ex.P.1 to 15. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the certified copy of the incorporation certificate of the complainant company. Ex.P.2 is the certified copy of the board resolution. Ex.P.3 is the certified copy of the GPA. Ex.P.4 is the certified copy of the chit agreement. Ex.P.5 is the certified copy of the payment voucher. Ex.P.6 is the certified copy of promissory note. Ex.P.7 is chit ledger. Ex.P.8 is the cheque issued by the accused in favour of the complainant dated: 19.06.2019 for Rs.1,90,000/-. Ex.P.8(a) is the signature of the accused. Ex.P.9 is the bank memo dated: 21.06.2019 informing the dishonor of the cheque as "Funds Insufficient". Ex.P.10 is the office copy of legal notice dated: 27.06.2019. Ex.P.10(a) is the the postal receipt. Ex.P.11 is the returned legal notice. Ex.P.11(a) is the returned postal cover. Ex.P.12 is the complaint. Ex.P.13 is the document related to Sri Sai Dhan Chits Pvt.,Ltd. Ex.P.14 is the DIN Number related to the accused.
C.C.NO.25489/2019 7 Ex.P.15 is the Income tax returns for the period 2017-
18.
12. The accused examined himself as DW.1 and no documents were marked on his behalf. In his evidence D.W.1 has deposed defence taken by him.
13. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused is a chit subscriber to the chit group No.90001/07 for a chit value of Rs.1,00,00,000/- on a monthly installment of Rs.2,50,000/- per month over a period of 40 months. It is further argued that the accused has received the prize of Rs.62,90,000/-. It is further argued that after receiving prize money, the accused was irregular in payment of his monthly chit installments and thereafter he became a defaulter. Hence, the complainant had informed the accused that if he fails to pay his chit installments they would file the money recovery suit against him and all his sureties. Thereafter the accused agreed to pay the outstanding dues and he had issued the cheque in question for the month of May 2019. As per the instructions of the accused the complainant has presented the said C.C.NO.25489/2019 8 cheque for encashment. But the said cheque was dishonored as funds insufficient. It is further argued that the accused has not denied Ex.P.8 being his cheque drawn on his account and signature appearing on the said cheque. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act.
14. He further argued that the accused has failed to produce any believable evidence that he had issued the blank cheques in favour of the complainant for the purpose of security and also why he has not returned back the same is not clear. He further argued that the accused failed to produced any documentary evidence regarding repayment of entire amount to the complainant. Further argued that to prove under section 139 of N.I.Act, there is a presumption that the cheque has been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.8 being his cheque drawn on his account. The said presumption is available to the complainant. Further he has argued that the accused had failed to prove the very fact that Ex.P.8 was given to the complainant for the purpose of C.C.NO.25489/2019 9 security and it was blank when it was given to the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had given the blank cheques as security measure. As such, very defence of the accused is not believable.
15. He further argued that the accused has not produced any documentary evidence to prove his defence. Upon careful perusal of the entire evidence of records both oral as well as documentary evidence the complainant have proved their case. It was further argued that the accused seriously disputed that the complainant collected blank the cheques from the accused as security measure and the complainant have misused the one of the security cheque and filed false case. However, he has miserable failed to prove the said fact. He further argued that the accused examined himself as DW.1, but he has not produced any single documents to support his defence. However, in his examination in chief, the accused is admitted that the complainant has presented the cheque which was given by him every monthly installment amount and when the cheque was dishonored the same was C.C.NO.25489/2019 10 informed by the complainant company. Thereafter the accused was paid to the cheque amount to the complainant and he gets the cash receipt from the complainant. Further argued that during the cross examination the accused admitted that he is the chit subscriber. The accused himself admitted that the signature on the cheque-Ex.P.8 belongs to him and the accused admitted that when the cheque was dishonored, that the cheque amount was paid to the complainant but he has not produced any receipt to show that he has paid the cheque amount to the complainant.
16. The learned counsel for the complainant has filed detail written arguments. In his written argument he has reiterated the facts of the case. Further in his written argument he has relied upon the citations reported in (2010) 11 SCC 441, 2007 (4) AIR 462, AIR 2023 SC 5018, 2014 O Supreme (Kar) 307. Further submits that version of the accused cannot be accepted and the accused has miserable failed to rebut the statutory presumption. Since the complainant have complied with all the ingredients of section 138 of N.l.Act, and further the accused has failed to rebut the presumption that he had issued the said cheque for security purpose. Hence, the accused issued cheque for his legal liability with a malafide intention without C.C.NO.25489/2019 11 maintaining sufficient balance in his account. Further inspite of receipt of the legal notice, the accused not made payment towards the amount of the dishonored cheque. Hence, he prays to punished the accused.
17. The learned counsel for the accused has argued that there was no legally enforceable debt/balance due to the complainant from the accused for which the cheque was issued. Further argued that the accused had issued the blank signed cheques to the complainant for the purpose of security at the time of bidding the chit. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the cheque came to be issued. It is further argued that the complainant is a limited chit company any authorization on behalf company to conduct case is through board of resolution appointing a person. In this case, there is no production of board resolution and therefore, it is a legally factual mistake, the above complaint is unsustainable. Further argued that P.W.1 is not having any personal knowledge about the transactions. Hence, without having the personal knowledge about the transaction he is not having any right to prosecute the case against the accused. Further argued that PW.1 is only in order to give trouble to the accused and with an C.C.NO.25489/2019 12 intention to making illegal money from the accused filed this false case. This is not permissible under the law. Further argued that the cheque in question was collected in the beginning from the accused, as security measure. On looking it Ex.P.8 the signature of the accused is admitted. Whereas, the writing part of the cheque amount in words and in figure are different handwriting. Therefore, the entire cheque was filled up by the complainant as their whims. Further argued that the accused has already paid entire amount to the complainant. Hence, question of the repayment of the amount as contended by the complainant does not arise at all. Further argued that from the evidence placed on record, the very payment of chit amount by the complainant not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt/liability.
18. The learned counsel for the accused has filed written argument. In his written argument he has reiterated the facts and evidence. Further submits that the complainant in respect of the three chits had received the blank signed cheques from the accused, while making agreement. The accused has paid all the installments for the month of May 2019, the complainant has filed a case on all the above installments. The complainant instituted the case of the C.C.NO.25489/2019 13 same chit group and same installments two different cases. The complainant has registered a false case against the accused. Further submits that the complainant through PW.1 concealed/suppressed that chit group No.90001/07 installment for the month May 2019 dishonor cases was filed subsequently and individually against the accused and consolidated installments from all installments against the accused brother Mr.Somanatha Badiger for same installments which is not permissible under the law and it is not termed as legally recoverable debt under N.I.Act, because the complainant company claiming same month installments through two different cheques which is completely illegal. Further submits that the complainant company has admitted that other cheques dishonor complaints initiated against the accused and one case against his brother for defaulted installments total due amount which is not legally enforceable debt. It creates doubt about the existence of debt and the complainant failed to produce the documents that would indicate the possibility of prized money disbursement in favour of the accused. PW.1 has failed to furnish all the relevant documents viz., minutes of proceedings, resolution register, ledger book, adjustment made to different chits, vouchers etc,. Hence, it is settled position of law that the accused can rebut the presumption by showing the shortcomings in C.C.NO.25489/2019 14 the material produced by the complainant. The accused can show that the material produced by the complainant is not sufficient to prove his guilt beyond reasonable doubt.
19. Further submits that the complainant company instituted case against the accused brother Mr.Somanath Badiger for entire dues before this court having C.C.No.32496/2022 on 05.09.2022 and along with complaint produced 14 documents and marked as Ex.P.1 to 14 on behalf of the complainant company. It clearly disclose in the complaint averments more particularly para No.4 and 5 reveals that chit group No.90001, ticket No.07 and the accused brother Mr.Somanath Badiger stood as surety and the all other cases was instituted prior to this complaint i.e., CC.No.32496/2022 and in the said case Mr.Somanath Badiger convicted and preferred and appeal. Hence, the complainant company clearly suppressed the material facts. In this regard, the accused rebutted the presumption casted upon him. The cheque in question is given to the complainant for the purpose of security and the said cheque illegally misused by the complainant by filling same month installments in two different cheques. Further PW.1 has clearly admitted in his cross examination. The complainant had failed to prove his case beyond reasonable doubt. It has been C.C.NO.25489/2019 15 observed that the defence led by the accused has created a doubt regarding the truthfulness of the complainant's case. Further submits that the complainant has possessed cheque in question unlawfully and misused the same given by the accused as security. The accused has discharged the burdened fastened by raising a probable defence, which meets the standard of preponderance of probabilities. Hence, he prays to dismissed the complaint and acquit the accused.
20. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque in favour of the complainant. It is not disputed that the complainant is a limited chit company and the accused is a businessman and subscriber and he had issued the cheque-Ex.P.8. Whereas, the accused has contended that he had given the signed chaques to the complainant for the purpose of security. When he had given the cheques, which were blank. The accused has specifically denied having debt/liability issued the cheque-Ex.P.8 on 19.06.2019 towards the discharge of any debt/liability for the month of May 2019. He contends that the blank cheques given by him to the complainant for the purpose of security and one of the cheque as was misused by the complainant and the C.C.NO.25489/2019 16 false complaint was filed.
21. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant's in order to prove its case, have examined its General Manager as PW.1 and 15 documents were marked at Ex.P.1 to 15. In chief examination, P.W.1 has repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.8 being his cheque drawn on his account. The said presumption is available to the complainant.
22. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is a rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque-Ex.P.8 was issued. In order to prove his defence, the accused/DW.1 has failed to produce any documentary evidence before this court. PW.1 during his cross- examination has specifically denied the suggestions C.C.NO.25489/2019 17 made to him that Ex.P.8-cheque was issued in favour of the complainant for the purpose of security and same was blank at the time of issuing the same. Further the accused has already paid entire amount to the complainant.
23. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of proof required for the accused is not so strict as required for the complainant to prove the case. Further he has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that he had given the blank cheques to the complainant for the purpose of security. Further he has already paid entire amount to the complainant. Except, the said defence, he has not produced any materials to prove such defence. If he had given the blank signed cheques to the complainant for the purpose of security, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque. On which date the accused came to knew about the alleged illegal act of the complainant, he did C.C.NO.25489/2019 18 not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is a businessman and having knowledge of the financial transaction, why he has given the blank signed cheques to the complainant without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the blank cheques. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodge complaint before concerned police station. No steps have been taken to receive back the blank signed cheques, after he came to know about the same.
24. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that C.C.NO.25489/2019 19 explanation is necessary. The principle of law laid down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.8 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant case.
25. Further the accused has taken defence that the cheque was given as security. Further he has already paid entire amount to the complainant. Hence, an offence punishable under section 138 of N.I.Act is not attracted. In this regard once issuance of cheque and signature is admitted, the statutory presumptions would arise under sections 138 of N.I.Act that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security C.C.NO.25489/2019 20 purpose, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
26. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
` 27. In the case of M/s Kalemani Tex V/s P.Balansubramanian, reported in (2021) 5 SCC 283, the Hon'ble Apex Court has observed that even a blank C.C.NO.25489/2019 21 cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
28. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
29. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reasons stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard. It was also contended by the accused that he had given the blank signed cheques to the complainant for the purpose of security and one of the blank security cheque was misused by the C.C.NO.25489/2019 22 complainant. In this regard the accused has failed to produce any believable evidence before this court.
30. In the defence there is no ill-will between the complainant and the accused. Hence, question of misuse of the cheque and filing the false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and had not returned the same, inspite of collecting cheques leaves from him, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheques. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.8. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of security cheques against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
31. Moreover, the complainant have got issued a C.C.NO.25489/2019 23 legal notice to the accused by registered through its counsel calling upon him to make repayment of amount to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant has to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.8 being his cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and also cheque return memo at Ex.P.9 it is established that the cheque was dishonored for the reasons "Funds Insufficient''. A legal notice being issued as per Ex.P.10 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice send by the complainant on his address. But, the accused failed to reply to the notice, immediately after he received the demand notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
32. It is not the contention of the accused that C.C.NO.25489/2019 24 thereafter he has repaid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed before this court within one month after the accused failed to repay the cheque amount. Even he did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
33. In addition to this in the case of T.P.Murugan C.C.NO.25489/2019 25 (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
34. The accused has taken the defence that except signature other writings on the cheque-Ex.P.8 is not in the handwriting of the accused, which was filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits his signature, he cannot take up a defence that other contents of cheque was filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC) 138), between Bir Singh V/s Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments C.C.NO.25489/2019 26 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 cheque is otherwise valid, the penal provision of Section 138 would be attracted.
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 the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. Even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment. Would attract presumption Under section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
35. The principles emerging from the above referred decision make it clear that it is not mandatory and no law prescribes that the contents of cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under C.C.NO.25489/2019 27 section 139 of N.I.Act arises. The principle of law laid- down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, the cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
36. As per the version of the accused is that the accused has nowhere denied transactions. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that the accused has issued the cheque-Ex.P.8 and even after he has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused has issued the cheque-Ex.P.8 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him that Ex.P.8 was the blank signed cheque given to the complainant for the purpose of security. Therefore, the accused has failed to rebut the presumption under C.C.NO.25489/2019 28 section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
37. PW.1 in his evidence has specifically deposed that the accused in order to repayment of amount for the month of May 2019 had issued the cheque-Ex.P.8. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, this is not disputed by the accused. The accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused has failed to probables his defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
38.POINT NO.3 AND 4: In order to avoid repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.8 being his cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored for C.C.NO.25489/2019 29 the reasons funds insufficient, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused had issued the blank signed cheque in favour of the complainant for the purpose of security and why he has not produced any documents. After service of notice he neither reply to the notice nor paid the said cheque amount. Hence, the present complaint came to be filed before the court on 19.07.2019 before this court. While discussing the point No.1 and 2, this court has already observed that the complainant's have proved that the cheque-Ex.P.8 was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
39.POINT NO.5: The accused is held to have committed an offence punishable under section 138 of C.C.NO.25489/2019 30 N.I.Act. The complainant's have proved its case. Further on perusal of the documents and argument addressed by the counsels it reveals that the complainant company filed a case against the guarantor and surety to the subscriber i.e., the accused in respect of the chit group bearing No.90001/07 for in payment of future 25 installments in CC.No.32496/2022 before this court. In that case the complainant said that the subscriber became a defaulter in payment of future 25 installments. As such, subscriber was due for Rs.56,16,350/- to the complainant. Hence, the accused being a surety has issued the cheque towards discharge of liability of his brother i.e., subscriber. In that case on 01.12.2023 the judgment was made in which the complainant company was awarded a compensation of Rs.62,35,000/-. In this case even if the complainant had proved the case against the accused, he would not be entitled to compensation because he has already got relief in CC.No.32496/2022. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond of the accused hereby C.C.NO.25489/2019 31 stands canceled.
The accused is sentence to pay fine of Rs.15,000/- (Rupees fifteen thousand only) and same shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of 02 months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 26th day of September-2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.09.30 11:10:48 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : H.N.Paramesh. List of documents marked on behalf of the complainant: Ex.P.1 : Certified copy of Incorporation certificate. Ex.P.2 : Certified copy of Board Resolution.
Ex.P.3 : Certified copy of GPA.
Ex.P.4 : Certified copy of the Chit agreement.
Ex.P.5 : Certified copy of the Payment voucher.
Ex.P.6 : Certified copy of the Promissory note.
Ex.P.7 : Chit ledger
Ex.P.8 : Cheque.
Ex.P.8(a) : Signature of the accused.
Ex.P.9 : Bank memo.
Ex.P.10 : Office copy of the legal notice.
C.C.NO.25489/2019
32
Ex.P.10(a) : Postal Receipt.
Ex.P.11 : Returned legal notice.
Ex.P.11(a) : Returned postal cover.
Ex.P.12 : Complaint.
Ex.P.13 : Document related to Sri Sai Dhan Chits Pvt.,Ltd.,
Ex.P.14 : DIN number related to the accused.
Ex.P.15 : Income tax return for the period 2017-18.
List of witnesses examined on behalf of the accused: DW.1 : Mr.Shambuling Mahadev Badiger.
List of documents marked on behalf of the accused:
-NIL-
Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.09.30 11:10:54 +0530 XXVIII Addl. Chief Judicial Magistrate, Bengaluru City. C.C.NO.25489/2019 33
26.09.2024 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond of the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.15,000/- (Rupees fifteen thousand only) and same shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of 02 months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.