Bangalore District Court
Sri. Anil Kumar K.R vs Sri. Manjunatha .B on 17 April, 2021
IN THE COURT OF XX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY
Dated this the 17th day of April 2021
PRESENT: KALPANA.M.S.,
B.Sc., LL.M.,
XX ADDL. C.M.M.
Bengaluru.
C.C.No.24301/2018
Complainant : Sri. Anil Kumar K.R.,
S/o B. Ramaiah,
Aged about 38 years,
R/at Doddabidarakallu,
Nagasandra Post,
Bengaluru.
{ By Sri. Shivaraju .S - Advocate}
Vs.
Accused : Sri. Manjunatha .B.,
S/o Boppanna,
Aged about 30 years,
R/at No.24, Beeranahalli,
Badamaranahalli Post,
Sira Taluk, Tumakuru District.
Now R/at M.P. Layout,
Chikkasandra,
Bengaluru.
{ By Sri. A. T. Jayaraja - Advocate}
Offence complained : U/S. 138 of N.I. Act.,
2 C.C.24301/2018
Plea of accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of Order : 17-04-2021
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 & 142 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused alleging that, he has committed the offence.
02. The sum and substance of the complaint, is as follows;
The accused is known to the complainant. In the said background, during the month of December-2017 the accused had approached the complainant and sought for financial assistance of Rs.3,00,000/- as hand loan for his immediate family and legal necessity and agreed to repay 3 C.C.24301/2018 the same within three months. The complainant had obliged the accused request and arranged the above said amount. Finally, the accused has borrowed the above said amount of Rs.3,00,000/- from the complainant agreeing to repay the same within three months. But the accused had failed to repay the said amount within the stipulated period as agreed by him. The complainant started demanding the accused to repay the loan amount, but the accused was postponing the same on one or other pretext. Then the panchayath was held between the common friend of complainant and accused and according to the panchayath, the accused has accepted to pay Rs.1,50,000/- before 30- 05-2018 and another Rs.1,50,000/-before August-2018. But the accused failed to repay the 1 st installment of Rs.1,50,000/- before 30-05-2018 and when the complainant questioned about this with the accused and the accused has assured to present the single cheque for Rs.3,00,000/- in 1st week of July-2018. Accordingly, the complainant has presented the cheque bearing No.205318 4 C.C.24301/2018 dated 05.07.2018 for a sum of Rs.3,00,000/- drawn on State Bank of India, Laggere Branch, Bangalore, assuring the complainant of prompt encashment. On 05.07.2018, the complainant had presented the above said cheque for collection through Karnataka Bank Ltd., Nagasandra Branch, Bangalore, but the said cheque was returned unpaid with an endorsement "Funds Insufficient", dated 06.07.2018. Thereafter, complainant got issued legal notice on 13.07.2018 to accused. The notice was duly served to the accused. Accused neither complied nor replied the notice. It is contended that, accused intentionally not maintained sufficient amount in his bank account to honour the cheque issued in favour of the complainant towards discharge of legally enforceable debt. On these allegations, present complaint is filed.
03. After presentation of the complaint, this court perused the documents and taken cognizance for the offence under section 138 of Negotiable Instrument Act, sworn statement 5 C.C.24301/2018 of 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. Accused has not stated the defence.
04. Learned Counsel for complainant prays to treat sworn statement as examination-in-chief and to consider the documents marked as Ex.P.1 to 7. In support of his case, complainant examined his friend one Bramhachari.K, as PW.2. The statement under section 313 of code of criminal procedure is recorded, read over and explained to the accused. Accused denied the incriminating circumstances and stated the defense that, in the year 2018, accused has issued two blank cheques and other two cheques to one Manju, who was running chit business on behalf of the complainant. He is not liable to pay any amount to the complainant. Further, accused examined himself as DW.1 and got marked two documents as Ex.D.1 & 2. 6 C.C.24301/2018
06. Heard the Learned Counsel for the accused. Perused the and materials on record and cited decisions.
07. Accused relied on the following judgments
1. AIR 2009 SC 1983 Basalingappa Vs. Mudibasappa
2. AIR 2019 SC 942 Anus Rajashekar Vs. Augustus Jeba Ananth
3. ILR 2008 KAR 4629 Shiva Murthy Vs. Amruthraj
4. ILR 2009 KAR 2331 B.Indramma Vs. Sri.Eshwar
5. ILR 2014 KAR 6572 Sri.H.Manjunath Vs. Sri. A.M.Basavaraju
08. The points that arise for my consideration are as follows;
POINTS
1. Whether the complainant proves that, accused issued cheque for cheque bearing No.205318 dated 05.07.2018 for Rs.3,00,000/-, towards discharge of his liability, which was returned unpaid on 7 C.C.24301/2018 presentation and also not complied the notice issued by the complainant 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;
1. Point No.1: In the Affirmative
2. Point No.2: As per final order for the following;
REASONS
10. POINT No.1: Complainant has filed this complaint alleging that accused has committed offence under section 138 of N.I. Act. He pleads and asserts that, towards discharge of his liability, accused has issued a cheque for Rs.3,00,000/-. The said cheque came to be dishonoured on presentation. Complainant has issued notice within time stipulated calling upon the accused to pay the amount covered under cheque. In spite of service of notice, accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint. He further relied on 8 C.C.24301/2018 the documents from Ex.P.1 to 7. This witness was subjected to cross examination.
11. In this scenario, let us 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 05.07.2018, the said cheque returned with an endorsement "Funds Insufficient". Ex.P.1(a) is the signature of the accused, Ex.P.2 is bank endorsement dated 06.07.2018, Ex.P.3 is legal notice dated 13.07.2018, said notice was duly served to the accused, Ex.P.4 & 5 are the postal receipt, Ex.P.6 is the postal acknowledgement and Ex.P.7 is the reply notice and Ex.P.7(a) is the postal cover. This complaint came to be filed on 18.08.2018. 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 relied 9 C.C.24301/2018 on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act.
12. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence and rebut the presumption available to the complainant. Let us examine whether accused has successfully rebutted the presumptions of law. It is the specific defense of the accused that, the complainant is the stranger. The wife of the complainant hails from the neighboring village of the accused. He has done money transaction with the wife of the complainant. One Manjunath was running chit business on behalf of the complainant. The accused subscribed for Rs.3,00,000/- chit in the year 2016 at the instance of complainant and his wife. At that point of time, they have received two blank signed cheques for the purpose of security. Accused has paid all the chit installments except last two installments. Subsequently towards a payment of said two installments, he has issued 10 C.C.24301/2018 two cheques for Rs.20,000/- and Rs.17,000/- to the wife of the complainant. Cheque for an amount of Rs.20,000/- was dishonored. Thereafter, the complainant and his wife approached the accused demanding the amount, on that day, the accused paid Rs.37,000/- by way of cash to the wife of the complainant and demanded for return of all the security cheques, but in vain. It is further contended that, the accused is not liable to pay any amount to the complainant. Legal notice was duly replied as per Ex.D1. On this contentions, the accused sought for dismissal of the complaint and consequential acquittal. To prove his defence, the accused examined himself as DW1 and relied on the documents i.e., Ex.D.1 - reply notice and Ex.D.2 - postal receipt. DW1 was partly cross examined.
13. In the back drop of the rival contentions, this court has given anxious consideration to the case papers. At the outset, accused has admitted in his evidence that, the cheque in question belongs to him and it bears his 11 C.C.24301/2018 signature. For better appreciation the relevant portion of cross examination of DW.1, is culled out as under;
" ಕ ನನನ ಬಬಬಕ ಖತಗ ಸಬಬಬಧಸದ. ವವದತ
ವವದತ ಚಕಕ
ಚಕಕನಲ ನನನ ಸಹ ಇದ. "
From this part of evidence, it goes without saying that, accused has not disputed the cheque in question. When the drawer has admitted the issuance of the cheque as well as the 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 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.
14. This proposition of law is laid down by the Hon'ble High Court of Karnataka in the decision reported in ILR 12 C.C.24301/2018 2006 KAR 4672 - J.Ramaraj V/s Iliyaz Khan, wherein it is held that;
"Mere denial of issuing cheque would not be sufficient as it is time and again noted that once the cheque is issued duly signed by the petitioner, the presumption goes against him as per Sec.139 of the Negotiable Instruments Act."
No doubt, said statutory presumptions are rebuttable in nature. It is for the accused to place cogent and probable defence to rebut the presumptions raised in favour of the Complainant.
15. It is evident from the materials on record that, the accused is keep on changing his defence from legal notice to cross examination and to his evidence. To put it other way, the defence of the accused is self-contradictory and more specifically inconsistent. Admittedly, the accused got issued reply notice to the statutory notice as per Ex.P.7. Para No.7 of the said document reads that, during December-2016, 13 C.C.24301/2018 the accused has availed hand loan of Rs.37,000/- from the complainant and towards security of the said amount, he has issued two cheques and after dishonor of said cheques, issued additional security cheques bearing No.205317 and 205318 drawn on State Bank of India, Laggere Branch, Bangalore. Subsequently in the month of February-2018, he has repaid Rs.37,000/- and collected the dishonored cheques bearing No.205329 and 205330. Even after demand, the complainant has not returned additional security cheques i.e., disputed cheques and another cheque bearing No.205317. From the cursory reading of Ex.P.7 - reply notice of accused, it can be gathered that, there was hand loan transaction between the complainant and accused for an amount of Rs.37,000/- in the month of December-2016, towards which disputed cheque was given for security. Surprisingly, the accused has given total go bye to the aforesaid defence and put forth entirely new defence of chit transaction conducted by one Manjunath on behalf of the complainant and he was induced the complainant 14 C.C.24301/2018 and his wife to subscribe for the chit for an amount of Rs.3,00,000/- in the year 2016. In that connection, two signed blank cheques were issued as a security. Even after payment of the chit installments, security cheques were not returned by the complainant or his wife, one of which is misused to foist this false case against the accused. At the cost of repetition, both these defenses contradict each other.
16. Nevertheless, the accused has not chosen to place cogent and acceptable evidence to prove either of the defenses. More specifically, no iota of documents or independent testimony is placed to establish the previous transaction for an amount of Rs.37,000/- in the year 2016 with the complainant. So also, conducting of chit transaction of complainant or his wife or one Manjunath on behalf of them, is not shown or established. If at all, the version of the accused is believed for the sake of arguments, what prevented him to place any documents such as chit pass book, installment demand receipt or placing testimony 15 C.C.24301/2018 of any other chit subscribers is not satisfactorily explained. Further more, the contention of the accused regarding issuance of additional security cheques, inspite of custody of his previous cheques by the complainant, sounds strange. Moreover, if at all complainant or his wife refuses to return the alleged additional security cheques, which includes the disputed cheque, what prevented him to take steps to get back the cheques through lodging police complaint or private complaint or else issuance of legal notice calling upon the complainant to return the security cheques, remained unanswered. Considering all these aspects, this court is hesitant to believe the defense of the accused, having regard to the inconsistent defenses un supported with cogent and convincing evidence.
17. In this context, it is profitable to refer the decision reported in, AIR 2018 SC 3601, T.P.MURUGAN (DEAD) THR.LRS V/S. BOJAN, wherein it is held that; 16 C.C.24301/2018
"NI Act- 118, 138, 139- Dishonour of cheque- presumption as to enforceable debt- cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back in 1995- Behavior of accused is allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural- Accused admitting signature on cheques and pronote- presumptions would operate against him- complainant proving existence of legally enforceable debt - conviction proper. "
18. On the contrary, apart from the statutory presumptions, complainant has placed his oral testimony coupled with the evidence of independent eye witness - PW2, who asserts that, he was very much present at the time of impugned transaction for an amount of Rs.3,00,000/-. In the cross examination of PW2, nothing material information has been elicited to disbelieve the evidence of PW2 in toto. Infact, it was suggested to PW2 that, cheque in question was issued during panchayath / negotiation. If at all disputed cheque was issued during panchayath for hand loan of Rs.37,000/-, what prevented 17 C.C.24301/2018 the accused to fill the amount and the name of the payee in the said cheque, is not satisfactorily explained. Therefore, this court opined that, the accused is not successfull in eliciting the material admission from PW1 and PW2 sufficient to rebut the statutory presumptions.
19. Furthermore, accused has taken a contention of issuance of blank signed cheques as security to the chit installments and complainant filled the cheques to suit his claim. It is to be noted that, section 20 of Negotiable Instrument Act, empowers the holder in due course to fill up the cheque. On this point, it is relevant to refer the following decisions.
In the decision reported in, ILR 2006 KAR 2054;, H.S.Srinivas Vs. Girijappa and others, " Negotiable Instruments Act, 1888 -Section 20- Inchoate Stamped Instruments-
Plaintiff's suit for recovery of money with interest based on Blank promissory notes - Application filed to complete the promissory notes as contemplated under Section 20 of the N.I.Act authorizes that where a 18 C.C.24301/2018 promissory note is signed and delivered to another person on a properly stamped and either left blank or an incomplete document, the person whom the promissory note delivered will have prima facie authority to make the document complete. - The plaintiff will have the authority to complete the document as a negotiable one- Learned Trial Judge was not justified in rejecting the application on the ground that the filling up the blank instrument is impermissible under Section 93 of the evidence Act- Impugned order is set aside.
In another decision reported in, 2001 (4) Kar.L.J.122;, S.R. Muralidar Vs. Ashok.G.Y., it is held that;
" (A) Negotiable Instruments Act, 1881, Sections 20, 138,139 and 140- Blank cheque- Issue of - Issuing of cheque duly signed by maker thereof authorizing payee to fill up amount agreed upon will not invalidate cheque as such practice is recognised and permitted by law- Dishonour of such cheque attracts penal liability."
By applying the principle laid down in the afore said decisions to the facts and circumstances of this case, it can be conveniently held that, the above contention of the accused holds no water.
19 C.C.24301/2018
20. Nevertheless, the Hon'ble courts laid down of plethora of decisions that, the cheque in question was issued as security, then also his liability is not absolved. To fortify this opinion, I would rely on the decision reported in, 2006 Cri.L.J.3760, Umaswamy Vs. K.N.Ramanath, their lordships pleased to observe that, "Negotiable Instrument Act (26 of 1881). S.138- Dishonour of cheque -
cheque even if issued as a security for payment, it is negotiable instrument and encashable security at the hands of payee -Merely because it is issued as security is no ground to exonerate the penal liability u/s.138."
The Hon'ble Court interpreted that, aforesaid words provided under section 138 of N.I. Act includes the liability of the drawer of a cheque issued towards security. In other words, the contention of the accused that cheque was issued for security purpose does not absolve liability. 20 C.C.24301/2018
In another decision reported in, IV (2013) BC 284 (P & H), Shalini Enterprises& Anr Vs.Indiabulls Financial Service Ltd., wherein their lordships pleased to observe that, "(iii) Negotiable Instrument Act, 1881-Section 138- Dishonour of cheque- security cheque-Is integral part of commercial process entered into between petitioner and respondent /complainant -Security cheque can fasten liability on drawer under N.I. Act.- Argument that security cheque is not handed over or issued in pursuance of any un-discharged liability -To hold so would defeat whole purpose of security cheque- Security cheque is an acknowledgement of liability on part of drawer that cheque holder may use security cheque as an alternate mode of discharging his/its liability."
The ratio laid down in the decision aptly applicable to the facts and circumstances of the case. As such, it can be conveniently opined that, security cheque is an acknowledgement of liability on the part of the drawer. 21 C.C.24301/2018
21. Further, in the decision reported in 2005 CRI.L.J.1454, in M/s.General Auto Sales Vs. Vijayalakshmi .D, it is held that;
" (A) Negotiable Instrument Act (26 of 1881), S.138-Cheque-Bouncing of-
Prosecution under S.138 maintainable even if same is given by way of security."
In view of the ratio laid down in the decision, accused has to prove his contention that, there was no debt or liability through cogent evidence. As stated earlier, accused has neither elicited material admissions in the cross examination of PW.1 nor placed cogent defense evidence.
22. As far as proof of existence of legally enforceable debt is concerned, it is profitable to refer the decision of larger bench of the Hon'ble Apex Court reported in Rangappa Vs. Mohan reported in AIR 2010 SC 1898 = 2010 AIR (SCW) 2946, Wherein their lordships pleased to observe that, "In the light of these extracts, we are in agreement with the respondent-
claimant that the presumption 22 C.C.24301/2018 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 AIR SCW 3040, in a case of Criminal Appeal No.728 of 2015 - T.Vasanthakumar Vs. Vijayakumari, it is held that;
'Cheque as well as signature on it not disputed by accused- Presumption under section 139 would be attracted story brought out by accused that cheque was given to complainant long back in 1999 as a security to a loan, the loan was repaid but complainant did not return security cheque- is unworthy of credit, apart from being unsupported by any evidence.' 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 that, cheque was given to long back as security to the chit transaction, is not supported by any evidence. In other words, accused has not placed cogent 23 C.C.24301/2018 material to rebut the said presumption. As such, this contention of the accused holds no water.
23. 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 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 24 C.C.24301/2018 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......"
Hence, the High Court concluded that the alleged discrepancies on part of the complainant which had been noted by the trial court were not material since the accused had failed to raise a probable defence to rebut the presumption placed on him by Section 139 of the Act. Accordingly, the Hon'ble High Court recorded a finding of conviction.
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 25 C.C.24301/2018 the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. These provisions were intended to discourage people from not honouring their commitments by way of payment through cheques. The court should lean in favour of an interpretation .........
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 S.138 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 is complied with, presumption shall be drawn in favour of the complainant. The burden is upon the accused to rebut the statutory presumptions.
24. Further, it is profitable to refer the authorities reported in, AIR 2019 Supreme Court 2446 in Criminal 26 C.C.24301/2018 Appeal Nos. 230-231 of 2019, D/- 06.02.2019, Bir Singh Vs. Mukesh Kumar, it is held that;
"(C) Negotiable Instruments Act (26 of 1881), S.138, S.139- Evidence Act (1 of 1872), S.4-
Presumption u/S. 139- Is presumption of law, distinguished from presumption of facts- Presumptions are rules of evidence 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.
(E) Negotiable Instruments Act (26 of 1881), S.138, S.139- Dishonour of cheque-
Presumption as to legally enforceable debt- Rebuttal- 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, Rohitbhai Jivanlal Patel Vs. State of Gujarat and Another; wherein it is held that;
" (D) Negotiable Instruments Act (26 of 1881), S.138, S.139 - Dishonour of cheque-
Principles of presumption - Once
presumption of existence of legally
27 C.C.24301/2018
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 acceptable.
25. In the latest decision reported in, 2021 (1) KCCR 542, Criminal Revision Petition No.606 of 2020, K.Kuppuraju Vs. Thrilokamurthy; it is held that;
" Accused not rebutting presumption attached to cheque under Section 139- Plea that cheque in question was issued to some other person- Not proved- Nothing to show that cheque in question was misused - Accused only to escape liability taking all lame excuses- Conviction justified."
The ratio laid down in the cited decision is squarely applicable to the case on hand.
28 C.C.24301/2018
26. In another latest decision reported in, the Supreme Court of India, Criminal Appeal No.123 of 2021; M/s.Kalamani Tex & Anr Vs. P.Balasubramanian , the Hon'ble Apex Court, clearly observed in Para No.14 that;
Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/ negotiable instrument are established, then these ' reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by tis Court in Rohitbhai Jivanlal Patel V. State of Gujarat, in the following words:
" In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused . This approach of the trial court had been at variance with the principles of 29 C.C.24301/2018 presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant- accused...."
From this observations, it is crystal clear that, unless accused discharged the onus by establishing the defense by way of preponderance of probabilities tilting in his favour, any doubt on the complainant's case cannot have been raised for want of evidence regarding the source of funds. From the above dictum, the contention of the accused disputing the financial capacity of the complainant can only be considered, after establishing the defense of the accused through cogent evidence. In the present case, accused has not proved his defence.
30 C.C.24301/2018
27. From the overall consideration of the evidence on record it is forthcoming that, accused has not taken probable defense to rebut the statutory presumption. Mere denial is not sufficient to discharge the onus shifted on accused. To fortify this opinion, it is proper to refer the decision reported in, 2001 CRI.L.J. 4647, in a case of Hiten P.Dalal V/s. Bratindranath Banerjee, wherein it is held that;
"(B) Negotiable Instrument Act ( 26 of 1881), Ss.139, 138- Dishonour of cheque- Presumption that cheque was drawn for discharge of liability of drawer- Is presumption of law- Ought to be raised by Court in every case-
Rebuttal evidence- Nature- Mere plausible explanation is not sufficient- Proof of explanation is necessary.
Evidence Act (1 of 1872), Ss .114, 101- 104."
Further, in another decision reported in, 2017(2) A.K.R. 527, Arjun Vs.E.Shekar, it is held that, 31 C.C.24301/2018 S. 138, 139- Presentation of lawful consideration- Rebuttal of - Burden of proving that cheque has not been issued for any debt or liability - is on accused - mere plausible explanation not sufficient to disprove complainant' s case.
From the gist of the ratio laid down in the above decisions, it is clear that, burden shift on the accused to rebut the statutory presumption through cogent evidence, which is not discharged by the accused in the present case.
28. Under the facts and circumstances of this case, it is profitable to refer the decision in, AIR 2018 Supreme Court 3604, in a case of Krishna Rao Vs. Shankargouda, wherein it is held that;
"Negotiable Instruments Act (26 of 1881), Ss.138, 139-Dishonour of cheque- Presumption as to - Accused issuing cheque of Rs. 2 lacs towards repayment of loan to complainant - Said cheque dishonored on account of insufficiency funds- Complainant proving issuance of cheque having signatures of accused- Accused failing to rebut presumption raised against him and no evidence led by him in his support -Acquittal of accused 32 C.C.24301/2018 by High Court in revisional jurisdiction on ground of doubt in mind of court with regard to existence of loan, improper- Accused, liable to be convicted".
Moreover, in the latest judgment decided on 15 th March 2019, the Hon'ble Supreme Court of India, AIR 2019 Supreme Court 1876; Rohitbhai Jivanlal Patel V/s State of Gujarat & Another, it is observed in para 12 that;
" 12. For determination of the point as to whether the High Court was justified in reversing the judgment and order of the Trial Court and convicting the appellant for the offence under section 138 of the NI Act, the basic questions to be addressed to are two - fold: as to whether the complainant - respondent No.2 had established the ingredients of Sections 118 and 139 of the NI Act, so as to justify drawing of the presumption envisaged therein; and if so, as to whether the accused -appellant had been able to displace such presumption and to establish a probable defence whereby, the onus would again shift to the complainant?........"
It is further observed in 18.6 that;
33 C.C.24301/2018
" 18.6. The fact of the matter remains that the appellant could not deny his signatures on the said writing but attempted to suggest that his signatures were available on the blank stamp paper with Shri Jagdishbhai. This suggestion is too remote and too uncertain to be accepted. No cogent reason is available for the appellant signing a blank stamp paper. It is also indisputable that the cheques as mentioned therein with all the relevant particulars like cheque numbers, name of bank and account number are of the same cheques which form the subject matter of these complaint cases. The said document bears the date 21.03.2007 and he cheques were postdated, starting from 01.04.2008 and ending 01.12.2008. There appears absolutely no reason to discard this writing from consideration...."
It is further observed in para No.19 that;
" 19. Hereinabove, we have examined in detail the findings of the Trial Court and those of High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent 34 C.C.24301/2018 did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8 th floor had also been or irrelevant factors of consideration of a probable defence of the appellant....."35 C.C.24301/2018
The ratio laid down in the cited decisions are aptly applicable to the case on hand.
29. The accused has taken a vague defence and not placed cogent evidence to prove the same. This aspect is discussed in detail in a decision reported in , 2014(4) AKR 98 between Sripad Vs. Ramadas M.Shet, Criminal Appeal No.2689 of 2009, wherein it is held that;
"Negotiable Instrument Act (26 of 1881), Ss.138,139, 118- Dishonour of cheque-Acquitted-Validity-Cheque issued by repay loan amount to complainant, was dishonoured-
Specific defence -However, accused failed to rebut initial presumption under sections 118 and 119- Mere distorted version or mere taking up defence by It means that he is not liable to pay any amount- Are not sufficient to put back the burden on to the complainant- Acquittal of accused- Not proper."
The ratio laid down in the cited decision is squarely applicable to the facts on hand.
36 C.C.24301/2018
30. In this case plea of the accused was recorded as per section 251 of Cr.P.C. Accused pleaded not guilty. As per section 251 of Cr.P.C. accused has to state about his defence. Here, except pleading not guilty accused has not stated his defence at the time of recording plea. As per the decision reported in AIR 2014 SC 2528 (Indian Bank Association V/s Union of India), Crl. Petition No.8943/2010 M/s.Mess Transgare Pvt V/s Dr .R. Parvathareddy and in Rajesh Agarwals case, Wherein, it is held that; " Accused cannot simply say " I am innocent " or " I pleaded not guilty ". The proposition of law laid down in the aforesaid decision is squarely applicable to the facts and circumstances of this case. As such, it cannot be taken that accused has rebutted the presumption of law enshrined under section 139 and 118 of N.I. Act, by mere pleading not guilty. No doubt, accused has made statement recorded under section 313 of Code of Criminal Procedure. However, in the latest decision reported in, LL 2021 SC 149; Sumeti Vig Vs. Paramount Tech Fab 37 C.C.24301/2018 Industries ( Cr.A.292/2021), the Hon'ble Supreme Court has observed that;
" The statement of the accused recorded under Section 313 of Code is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused. Therefore, there is no evidence to rebut presumption that the cheques were issued for consideration."
31. From the discussion made supra, it is clear that, accused has neither taken probable defense nor taken steps to prove the same. 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, accused has intentionally not maintained sufficient amount in his account to honour the disputed cheque. Hence, this point No.1 under consideration is answered in the affirmative.
38 C.C.24301/2018
32. 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 It is worth to note that, the offence is of the nature of civil wrong. Hence, it is proper to award sentence of fine, instead of awarding sentence of imprisonment. 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. The amount covered under the disputed cheque is Rs.3,00,000/-. The date of cheque is, 05.07.2018. It is pertinent to note that, RBI monitory policy statement of the year 2017-2018 dated 02.08.2017 provides that, the prevailing bank rate of interest was 6.25%. By considering all these aspects, this court is of the opinion that, it is just and proper to imposed fine amount of Rs.3,70,000/-, which includes interest and cost 39 C.C.24301/2018 of litigation, out of which compensation has to be awarded to the complainant. Accordingly, this court proceed to pass the following;
ORDER Acting under section 255 (2) of Criminal Procedure Code, accused is hereby convicted for the offence punishable under section 138 of Negotiable Instrument Act and sentenced to pay fine of Rs.3,70,000/-
(Rupees Three Lakhs Seventy
Thousand only). In default thereof
accused shall undergo simple
imprisonment for 1 (One) month.
Acting under section 357(1) (b) of
code of criminal procedure, it is
ordered that, Rs.3,65,000/- ( Rupees Three Lakhs Sixty Five Thousand 40 C.C.24301/2018 only), there from 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.
The bail bond of the accused stands canceled.
Office to supply the copy of this Judgment to the accused immediately on free of cost.
{Dictated to the stenographer, transcribed and computerized by her, revised corrected and then pronounced in the open court on this 17th day of April 2021}.
(KALPANA.M.S.) XX ACMM, Bengaluru.
41 C.C.24301/2018ANNEXURE List of witnesses examined on behalf of complainant:
P.W.1 Anil Kumar K. R. P.W.2 Bramhachari .K
List of documents produced on behalf of complainant:
Ex.P.1 Cheque
Ex.P.1(a) Signature of the accused
Ex.P.2 Bank endorsement
Ex.P.3 Copy of notice
Ex.P.4 & 5 Postal receipts
Ex.P.6 Postal acknowledged
Ex.P.7 Reply notice
Ex.P.7(a) Postal cover
42 C.C.24301/2018
List of witnesses examined on behalf of accused:
D.W.1 Manjunath. B List of documents produced on behalf of accused:
Ex.D.1 Reply notice
Ex.D.2 Postal receipt
XX A.C.M.M.,
Bengaluru.