Bangalore District Court
Sri. N.Nagesh vs Smt.Latha.B.M on 4 March, 2022
KABC020169582019
IN THE COURT OF THE JUDGE COURT OF SMALL CAUSES
AND A.C.M.M, AT BENGALURU
Present: UMESHA.H.K, B.A., LL.B.,
JUDGE, Court Of Small Causes,
Bengaluru.
Dated this the 04th day of March, 2022
C.C. No: 3703/2019
Complainant: Sri. N.Nagesh,
S/o.Late V.Nagappa,
Aged about 63 years,
No.118, 2nd Main Road,
9th Cross, Chamarajpet,
Bengaluru - 560018.
(By Sri.Bharath Kumar.V - Adv.)
-Vs-
Accused: Smt.Latha.B.M.,
W/o.Maheshwra,
Aged about 53 years,
Block 48, Income Tax Colony,
HMT Watch Factory,
Jalahalli,
Bengaluru.
Working At:
Smt.Latha.B.M.,
W/o.Maheshwara,
Jai Munirao Circle,
Opp.IIFT College of Fashion,
Agrahara Dasarahalli,
SCCH-09 2 CC.3703/19
Bengaluru.
(By Sri. Revanasiddappa
Adv.)
JUDGMENT
Complainant has filed this private complaint under Sec. 200 of Cr.P.C., against accused for an offence punishable under Sec.138 of Negotiable Instruments Act.
2. It is the case of the complainant that, accused and complainant are well acquainted with each other. The accused approached the complainant in the 2nd week of October 2018 and requested him to pay a sum of Rs.7,00,000/- and promised to repay the same within 6 months and for due discharge of the same, accused issued an account payee cheque bearing No.527327, dtd.14.04.2019 for Rs.7,00,000/- drawn on Bank of India, Basaveshwaranagar Branch, Bengaluru in favour of complainant. On presentation of said cheque through his banker i.e., Grain Merchants Co-operative Bank Ltd., Chamarajpet Branch, Bangalore, and said cheque was returned with endorsement "Funds Insufficient". SCCH-09 3 CC.3703/19
3. It is further case of complainant that he issued legal notice, dated 16.05.2019 through RPAD, the said notice was duly served on 03.06.2019. However, accused did not paid the aforesaid amount. As such accused committed an offence punishable under Section 138 of N.I.Act and prays to convict accused.
4. My Predecessor in Office by taking cognizance for the offence punishable U/Sec.138 of N.I. Act, registered the case as PCR. Sworn statement of complainant was recorded. Thereafter, by perusing the averments of complaint, documents, this court has registered the case as CC in register No.3 and issued summons to accused. In pursuance of summons accused appeared through her Advocate and she is on bail. Plea read over as per the provisions of U/Sec.251 of Cr.P.C. accused pleaded not guilty and claimed to be tried.
5. Complainant in order to prove his case, he himself examined as PW1 and got marked documents Ex.P1 to 9. Thereafter, statement of accused U/Sec. 313 of Cr.P.C. was recorded. Accused denied the incriminating evidence available SCCH-09 4 CC.3703/19 against him and adduced his defense evidence as DW1. E.Maheshwara husband of accused is examined as DW.2.
6. Heard the arguments of learned counsel for complainant and accused. In addition to oral arguments both counsels have filed their written arguments.
7. The following points are arise for my consideration:
1. Whether complainant proves that the accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
8. My findings on the above points are as under:
Point No.1 : In the Affirmative; Point No.2 : As per the final order;
for the following:
REASONS
9. Point No.1:- Before appreciation of fact and oral, documentary evidence of the present case. It is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the accused beyond all reasonable doubt. However, a proceeding U/Sec. 138 of N.I. SCCH-09 5 CC.3703/19 Act is quasi criminal in nature and quasi civil in nature. In this proceeding proof beyond all reasonable doubt is subject to presumption as envisaged U/Sec. 118, 139 of N.I. Act. An essential ingredients of Sec. 138 of N.I. Act is that Whether a person issues cheque to be encashed and the cheque so the issued towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing cheque, shall be deemed to have been committed an offence punishable U/Sec.138 of N.I. Act. N.I.Act presupposes conditions for prosecution of an offence which are as under:
1. Existence of legally enforceable debt or liability and issuance of cheque in discharging of said debt or liability.
2. Cheque shall be presented for payment within specified time i.e., from the date of issue before expiry of its validity.
3. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and SCCH-09 6 CC.3703/19
4. The drawer, inspite of demand notice fails to make payment within 15 days from the date of the receipt of such notice.
10. If the above said ingredients are satisfied by the holder in due course gets cause of action to launch prosecution against the drawer in respect of the bounced cheque and as per Sec. 142 (b) of N.I. Act the complainant has to be filed within one month from the date on which the cause of action arise to file complaint.
11. It is also one of the essential ingredients of Sec. 138 of N.I. Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I. Act, envisages certain presumption. U/Sec. 118(a) presumption shall be raised regarding consideration, date, transfer, endorsement and holder, in due course of Negotiable Instrument. Even Sec. 139 of N.I. Act are rebuttable presumption shall be raised that, cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumption are mandatory presumptions that are required to be raised in case of SCCH-09 7 CC.3703/19 Negotiable Instrument. But, the said presumption are not conclusive and they are rebuttable one. This preposition of law has been laid down by Hon'ble Apex Court and Hon'ble High Court of Karnataka in catena of decisions.
12. In the light of above, let me discuss the case of complainant and accused in this case. It is the case of complainant that accused had borrowed loan of Rs.7,00,000/- to meet her domestic necessities and accused promised to repay within 6 months and for due discharge of said amount, she issued cheque in dispute, on presentation it was returned for the reasons "Funds Insufficient".
13. On appearance it is the defense of accused that her husband had borrowed loan of Rs.1,00,000/- from the complainant on 19.09.2017 with interest @ 2% p.m., and at that time her husband has given her cheque as security to the complainant towards the said loan and thereafter her husband regularly paid interest till 2018 since her husband could not pay interest from January 2019 to March 2019 and requested the complainant to grant time, complainant demanded more SCCH-09 8 CC.3703/19 interest and refused to grant time and thereafter by misusing her security cheque has filed this false case.
14. I have perused oral and documentary evidence placed by both parties. In order to prove his case, complainant himself examined as PW1 and during the course of his chief examination he has reiterated the complaint averments in detail on oath and in support of his oral evidence he also placed Ex.P1 to 9 documents. Ex.P1 is the cheque, bearing No.527327, dated 14.04.2019 drawn on Bank of India, Basaveshwaranagar Branch, Bengaluru for Rs.7,00,000/- and Ex.P2 is the endorsement dated 17.04.2019, which discloses that the cheque in dispute was returned unpaid for the reasons "Funds Insufficient". Ex.P3 is the copy of legal notice dated 16.05.2019. Ex.P4 & 5 are the postal receipts. Ex.P6 is the postal acknowledgment. Ex.P7 is the complaint lodged to the Post Master for non receipt of acknowledgment. Ex.P8 is the track consignment and Ex.P9 is the account extract. On perusal and careful scrutiny of documents relied by the complainant prima-facie it goes to show that statutory SCCH-09 9 CC.3703/19 requirement of U/Sec. 138 of N.I.Act is complied with and this complaint is filed within limitation. Thus, the complainant relied on the statutory presumption enshrined U/Sec. 118 & U/Sec.139 of N.I.Act.
15. No doubt, the said presumption of laws are rebuttable in nature. The accused can take probable defence and rebut the presumption available to the complainant. In this scenario, let me examine whether accused has successfully rebutted the presumption of law. It is the specific defence of the accused that she never borrowed any loan from the complainant, her husband had borrowed loan of Rs.1,00,000/- from complainant in the year 2017 and her cheque was given as security and it is misused by complainant etc.,
16. Accused in order to substantiate her defence she herself examined as DW-1 and during the course of her chief examination she has reiterated the above defense on oath. In support of her oral testimony, she also examined her husband as DW.2 and he also reiterated above defense of the accused in his chief examination. Both Dw1 & 2 were thoroughly cross- SCCH-09 10 CC.3703/19 examined by learned counsel for complainant. DW 1 & 2 have denied the material suggestions of complainant's counsel. But DW.1 has specifically admitted the cheque in dispute is pertaining to her account and signature found in Ex.P1 cheque belongs to her and she has received notice as per Ex.P6 and she has not replied to the notice. She further admitted she has not taken any legal action against complainant for misusing her cheque. So, on careful anlayzing of defense evidence it is crystal clear accused has admitted her signature and issuance of cheque but her defense is that it was issued as security to the loan of her husband. Since the accused has admitted the issuance of cheque and signature, this court is required to draw initial presumption in favour of complainant as provided U/Sec.118 and U/Sec.139 of N.I.Act.
17. At this juncture, I would like to quote decisions of Hon'ble Apex Court reported in (1999) 7 SCC 510 K.Bhaskaran V/s Shankaran Vaidhyan Balan and another decision reported in (2010) 11 SCC 441 Rangappa V/s. Mohan, (2020) 12 SCC 724 APS Forex SCCH-09 11 CC.3703/19 Services Pvt. Ltd., - Versus - Shakti International Fashion linkers and ors." by reiterating the principles laid down in K.Bhaskaran V/s Shankaran Vaidhyan Balan's case and "Rangappa Vs. Mohan's" case. The Hon'ble Apex in APS Forex case has held that: "The fact that the accused has admitted the issuance of cheque and his signature on the cheque and that the cheque in question pertaining to the account, there is a presumption u/Sec. 139 of NI Act, that there exists a legally enforceable debt or liability." Even our Hon'ble High Court relying on the Hon'ble Apex Court decision recently in Criminal Appeal No.140/2011, dtd. 20th November-2020 - Muralidhar Rao Vs. P. Nageshwar Rao" has held that "a person who signs a cheque and make it over to the payee remains liable unless he adduces the evidence and rebut the presumption that the cheque had been issued for payment of debt or in discharge of a liability and the onus shifts on the accused to establish a probable defence." Further recently the Hon'ble Apex SCCH-09 12 CC.3703/19 Court in Triyambaka S Hedge v/s S.Sripad Cr.L.Appeal No.849-850/2011, dated 23.09.2021 reported in L.L (Live Law) 2021 SC 492 by reiterating the same principles as held - that applying the proposition of law that when once signature is admitted to be that of accused, the presumption envisaged in Sec.118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Sec.139 of the Act enjoins on the court to presume that the holder of the cheque received it for discharge of any debt or liability. The question to be looked into is as to - whether any probable defense was raised by accused.
18. In the light of above dictum of Hon'ble Apex Court and Hon'ble High Court of Karnataka, once signature and issuance of cheque is admitted the heavy burden is on accused to place rebuttable evidence to displace the statutory presumption available in favour of complainant. So, in the light of above let me discuss, whether accused is able to displace SCCH-09 13 CC.3703/19 the presumption available in favour of complainant and able to prove her defence.
19. The defence of accused is that, the cheque in dispute was issued as security to loan of her husband. During the cross-examination of PW1, learned counsel for accused has suggested the said defense to the PW1. But, PW1 has specifically denied the said material suggestions and categorically stated accused herself has borrowed loan of Rs.7,00,000/- and issued the cheque for discharge of said loan. No doubt, the accused has adduced her evidence to rebut the presumption. But, the evidence placed by accused is not probable, believable and acceptable one. According to the accused the said cheque was issued as security for the loan of her husband. If the cheque was issued as security why she remained silent without issuing reply to the notice though she has received the notice. Further, why she remained silent without taking any legal action against complainant. If really, the cheque is misused as contended by her she could have taken legal action against complainant or she could have SCCH-09 14 CC.3703/19 immediately replied the notice. Admittedly, accused is not an illiterate lady and she is teacher and she knows the consequences of issuing cheques etc. So, under such circumstances, the defense of the accused that the cheque has been misused which was alleged to have been issued for security etc., is not acceptable one.
20. Further, as per the defense of accused her husband had borrowed Rs.1,00,000/- and he was paying interest @ 2% p.m., and he has paid interest till December 2018 and subsequently he failed to pay the interest though they requested complainant for extension of time complainant demanded more interest and filed this complaint by misusing her security cheque. Even for the sake of arguments it is believed that accused has not placed any document except her and her husband's self serving statement to show that her husband had borrowed loan of Rs.1,00,000/- he was paying interest @ 2% p.m. So, under such circumstances, the contention of accused that her cheque was issued as security and it is misused by complainant etc., is not acceptable one. SCCH-09 15 CC.3703/19
21. Further, the defense of the accused is that since her husband had no account her cheque was given as security and it is misused by the complainant etc. This defense is also not acceptable and believable one because during the cross- examination DW2 has admitted he is having account in his own name and also cheque facility. When such being the case, why she has issued her cheque as security to the loan of her husband. Further DW.2 has specifically admitted they have not given any reply notice to the notice issued by complainant. If really, there was transaction between complainant and husband of accused they could have issued reply notice narrating the facts or their defense. Non issuance of reply notice and non taking of any legal action it clearly discloses the defense of accused is an after thought defense and there is no truth in it. As discussed above, if really the defense of the accused is true why and what made her to issue her cheque to the complainant as security for the amount borrowed by her husband, that too her husband is having account and cheque facility. As stated above, accused is not SCCH-09 16 CC.3703/19 an illiterate lady she is a teacher and well educated and a Govt. Employee. No prudent man or woman would remain silent without taking any legal action if really he or she cheated or their cheque is misused. So, it is crystal clear that the defense of accused is an after thought defense and there is no truth in it.
22. Further, If really complainant has misused her cheque she could have given representation to the bank for stop payment. Admittedly, accused has not made such attempt. It shows the said defence of accused is only an after thought defence and there is no truth in it.
23. The Ex.P9 document discloses that complainant after withdrawing an amount of Rs.7,20,000/- it fotify the contention of complainant and it shows complainant has paid the amount of Rs.7,00,000/- to the accused on the same day. As discussed above, accused has admitted her signature and issuance of cheque and receipt of legal notice. As admitted by accused herself she has not taken any legal action against complainant for misusing of her security cheque. So the SCCH-09 17 CC.3703/19 defence putforth by the accused is not probable acceptable and believable one.
24. Mere, plausible explanation is not sufficient or enough to rebut the presumption available in favour of complainant. Sec.139 of N.I.Act mandates that unless the contrary is proved, it is to be presumed that holder of the cheque received the cheque of the nature referred to U/Sec. 138 of N.I.Act for the discharge in whole or in part, of any debt or other liability. Needless to mention that the presumption contemplated U/Sec.139 of N.I.Act is rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque.
Sec.139 introduces an exception to the General Rule as to the burden of proof and shifts the onus on the accused. The presumption U/Sec.139 of N.I.Act is presumption of law, as distinguished from presumption of facts. Presumption or rules of evidence and do not conflict with the presumption of innocence, which SCCH-09 18 CC.3703/19 requires the prosecution to prove the case against the accused beyond all reasonable doubt. The obligation on the prosecution may be discharged with the help of presumption of law and presumption of facts, unless the accused adduces evidence showing the reasonable possibility of the non existence of presumed fact as held by Hon'ble Apex Court in the decision of - Hiten P Dalal V/s Bratindranath Banerjee reported in (2001) 6 SCC 16.
25. A meaningful reading of the provision of N.I.Act including, in particular Sec.20, 87, 118, 138 , 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 liability. Further, it is immaterial that the cheque may have been filled by any person other than the drawer, if the cheque is duly signed by the drawer and it would attract the provisions of Sec.138 of N.I.Act. As discussed above, except some plausible explanation SCCH-09 19 CC.3703/19 accused has not placed any iota of evidence to accept her contention. Accused has not placed any probable defense in this regard to displace the presumption available in favour of complainant.
26. Therefore, considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of complainant and accused, the complainant has successfully established his case and proved that he had had advanced loan of Rs.7,00,000/- to the accused and accused is due a sum of Rs.7,00,000/- to the complainant and for due discharge of amount Rs.7,00,000/- accused has issued Ex.P1 cheque in favour of complainant. On the other hand, accused has miserably failed to rebut the presumption available in favour of complainant with regard to the existence of legally recoverable debt under Ex.P1 cheque. Therefore, accused has committed an offence punishable U/Sec.138 of N.I.Act. Thus, for the above reasons, I answer Point No.1 in the Affirmative. SCCH-09 20 CC.3703/19
27. Point No.2: As discussed in point No.1, the complainant has proved the guilt of the accused. It is worth to note that the offence is of the nature of quasi civil and quasi criminal wrong. Hence, it is proper to award sentence of fine only instead of imposing sentence of imprisonment to the accused. At this juncture, it is worth to place the reliance of recent decision of Hon'ble Apex Court reported in 2020 (1) SCC 283 Kalamani Text. and another V/s. P Balasubramaniam, Wherein the Hon'ble Apex court at head note D has held that Negotiable Instrument Act 1881- Sec. 138 - compensation under - there needs to be a consistent approach towards awarding it compensation and unless there exist special circumstance, the court should uniformly Levy fine of up to the double of cheque amount along with simple interest at 9%. So considering the pendency of the case from 2019 and loan transaction this court, feels an amount of Rs.8,00,000/- can be awarded as compensation to the complainant, which would SCCH-09 21 CC.3703/19 meet the ends of justice. Thus for the above reasons, I proceed to pass the following:
ORDER Acting under Section 255[2] of Cr.P.C, the accused is hereby convicted for the offence Punishable U/s. 138 of the N.I. Act.
The accused is sentenced to pay total fine amount of Rs.8,05,000/-. In default of payment of fine amount, the accused shall under go Simple Imprisonment for a period six months.
After deposit of fine amount an amount of Rs.8,00,000/- shall be paid to the Complainant as compensation as provided U/s.357(3) Cr.P.C. The remaining amount Rs.5,000/- be appropriated to the state as fine.
The bail bond of the accused is hereby stand cancelled.
Office is directed to furnish free copy of this judgment to the accused.
(Dictated to the stenographer on computer, corrected and then pronounced by me in the open court on this the 4 th day of March, 2022.) (Umesha.H.K) Judge, Court of Small Causes & ACMM Bengaluru.