Bangalore District Court
Mr. N. Shiva Shekar Reddy vs Mr. Mohan Kumar on 12 May, 2023
KABC0C0234082021
IN THE COURT OF XXXIV ADDL. CHIEF METROPOLITAN
MAGISTRATE, MAYO HALL UNIT, BENGALURU. (ACMM-34)
PRESENT: Smt.PARVEEN A BANKAPUR,B.Com.LLB.
XXXIV ADDL. CHIEF METROPOLITAN
MAGISTRATE,
Dated : This the 12th day of May, 2023.
C.C.No.57312/2021
COMPLAINANT : Mr. N. Shiva Shekar Reddy
Aged about 46 years,
S/o. Sri Nanja Reddy,
Kadubisanahalli, Outer Ring Road,
Near Marathahalli, Reddy Layout,
Bengaluru - 560 103.
(By Mr. K. Mohan - Advocates)
V/s
ACCUSED : Mr. Mohan Kumar,
Major in age,
S/o. Sri Krishnappa,
R/at Boganahalli Village, Bellandur
Post, Varthur Hobli,
Bengaluru East Taluk,
Bengaluru - 560 103.
(By Mr. B. Venkatesha - Advocate)
1 Date of Commencement 19.07.2021
of offence
2 Date of report of offence 08.11.2021
3 Presence of accused
3a. Before the Court 07.01.2022
3b. Released on bail 07.01.2022
4 Name of the Complainant Mr. N.Shiva Shekar Reddy
5 Date of recording of 30.11.2021
evidence
6 Date of closure of evidence 07.03.2023
7 Offences alleged U/s 138 of the Negotiable
Instruments Act.
8 Opinion of Judge Accused is found guilty.
2 C.C.No.57312/2021
JUDGEMENT
The Private Complaint filed by the Complainant under Section 200 of Cr.P.C against the accused alleging that he has committed the offence punishable under Section 138 of Negotiable Instruments Act.
2. The brief facts of the complaint are as follows:
The complainant submits that, the Accused and Complainant were known to each other since several years and Accused approached the Complainant 2-3 times. In third week of September 2020 and first week of October 2020 for hand loan of Rs.10 lakhs for meet his personal, business and flimsily commitments. It is further submitted that, since Accused and Complainant well known to each other, he accepted to pay the amount of Rs.8 lakhs and on 25.10.2020 Accused has received sum of Rs. 8 lakhs from the Complainant with agreed to return the same within 6 months. It is further submitted that, in lieu of liability received by him, the Accused has issued a post dated Cheque bearing No.885390 dtd.28.3.2021 drawn on Indian Bank, New Horizon College of Engineering branch, Bengaluru - 560 087 for sum of Rs.8 lakhs in favour of Complainant.3 C.C.No.57312/2021
The Complainant further submits that he presented the Cheque on 29.3.2021 through his banker Axis Bank Ltd., Marathahalli branch, which was returned unpaid with endorsement as "kindly contact drawer drawee bank and please present again" on 6.4.2021 to the Complainant through courier on 16.4.2021. It is further submitted that, after receipt of endorsement, the Complainant approached the Accused personally and informed him regarding dishonour of Cheque, for which the Accused requested some more time in order to arrange the funds and requested re-present the Cheque on 26.6.2021. It is further submitted that, as per the request of the Accused, the Complainant re-presented the Cheque on 26.6.2021 through his banker, which was also returned as unpaid with endorsement as 'instrument outdated /stale' dtd.30.6.2021 to Complainant. It is further submitted that, after receipt of endorsement, Complainant once again approached the Accused personally and informed about return of Cheque and demanded payment of money, for which the Accused has issued a fresh post dated Cheque bearing No.885389 dtd.19.7.2021 drawn on Indian Bank, New Horizon College of Engineering branch, Bengaluru - 560 087 for Rs.8 4 C.C.No.57312/2021 lakhs in favour of Complainant and requested the Complainant to present the said Cheque on 19.7.2021. It is further submitted that, on 19.7.2021 the Complainant has presented a fresh Cheque through his banker for encashment, which also unpaid with endorsement as 'Kindly contact drawer' on 7.8.2021 to Complainant through courier on 11.8.2021. It is further submitted that, after receipt of endorsement the Complainant again approached the Accused and informed the same, for which, Accused once again requested the Complainant to grant some more time in order to arrange the money and requested to re-present the Cheque on 2.9.2021. It is further submitted that, as per the request, the Complainant re-presented the fresh Cheque on 2.9.2021 through his banker, which was returned unpaid with endorsement as "kindly contact drawer/drawee bank and please present again" dtd.3.9.2021 to the Complainant through courier on 14.9.2021. It is further submitted that, after receipt of endorsement, again Complainant approached the Accused and informed the same and demanded payment of money, though the Accused has agreed to pay the Cheque amount, but has not paid the Cheque amount instead postponing on one pretext 5 C.C.No.57312/2021 or other till today. It is further submitted that, the Complainant has issued legal notice dtd.28.9.2021 through his counsel to the address of the Accused by RPAD and Speed Post, calling upon the Accused to pay the Cheque amount within 15 days from the date of receipt of the notice. It is further submitted that, notice sent under RPAD and Speed Post were duly served on the Accused on 29.9.2021 as per the online postal track. It is further submitted that, after receipt of notice, the Accused has not complied with the notice nor sent any reply. Hence, the Complainant has filed the present complaint against the Accused for the offence punishable u/Sec.138 of N.I. Act.
3. Based on the complaint, the sworn statement affidavit, and documents etc., took cognizance of an offence punishable Under Section 138 of N.I. Act by following the guidelines of Apex Court issued in Indian Bank Association case and ordered to be registered a criminal case against the accused for the offence punishable Under Section 138 of N.I. Act.
4. After issuance of summons, accused appeared before the court and enlarged himself on bail. Plea was recorded, read over and explained to the accused, who pleads not guilty and 6 C.C.No.57312/2021 claims to be tried. Hence, the case is posted for complainant's evidence.
5. The Complainant got examined himself as PW-1 and got marked documents Ex.P.1 to Ex.P.15 and closed his side.
6. Accused was examined U/S 313 of Cr.P.C.
Incriminating evidence appearing in the complainant's evidence was read over and explained to the accused who denies the same. The Accused examined himself as DW1 and none of the documents were produced by the Accused.
7. Heard both counsels at length in great detail. In addition to the oral arguments, both the learned counsels appearing for the Accused and Complainant side have also filed written arguments.
8. Upon hearing the arguments and on perusal of the materials placed on record, the following points arise for my consideration.
1) Whether complainant proves beyond all reasonable doubts that accused in discharge of legally recoverable debt has issued a Cheque No.885389 dtd.19.7.2021 for Rs.8 lakhs drawn on Indian Bank, New Horizon College of Engineering branch, Bengaluru -560 087 in favour of the complainant which came to be dishonoured with an endorsement "kindly contact drawer/draweee bank and please 7 C.C.No.57312/2021 present again" on 3.9.2021 and in spite of service of notice accused has not paid the Cheque amount and thereby committed an offence under Section 138 of N.I.Act?
2) What Order?
9. My findings on the above points is:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
REASONS Point No.1:-
10. Existence of legally recoverable debt is a sine qua non for prosecuting the case under Section 138 of Negotiable Instruments Act. For convenient purpose the essential ingredients to constitute offence under section 138 of N.I.Act is summarized as below:
(i) That there must be a legally enforceable debt.
(ii) That the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes the legally enforceable debt.
(iii)That the cheque so issued had been returned due to "insufficient funds".
11. It is the core contention of the complainant that, the Accused and Complainant were known to each other since several years and Accused approached the Complainant 2-3 8 C.C.No.57312/2021 times. In third week of September 2020 and first week of October 2020 for hand loan of Rs.10 lakhs for meet his personal, business and flimsily commitments. It is further submitted that, since Accused and Complainant well known to each other, the Complainant accepted to pay the amount of Rs.8 lakhs and on 25.10.2020 Accused has received sum of Rs.8 lakhs from the Complainant with agreed to return the same within 6 months. It is further submitted that, to discharge his liability, the Accused has issued a post-dated Cheque bearing No.885390 dtd.28.3.2021 drawn on Indian Bank, New Horizon College of Engineering branch, Bengaluru - 560 087 for sum of Rs.8 lakhs in favour of Complainant.
12. The Complainant further submits that he presented the Cheque on 29.3.2021 through his banker Axis Bank Ltd., Marathahalli branch, which was returned unpaid with endorsement as "kindly contact drawer drawee bank and please present again" on 6.4.2021 to the Complainant. It is further submitted that, after receipt of endorsement, the Complainant approached the Accused personally and informed him regarding dishonour of Cheque, for which the Accused requested some more time in order to arrange the funds and 9 C.C.No.57312/2021 requested re-present the Cheque on 26.6.2021. It is further submitted that, as per the request of the Accused, the Complainant re-presented the Cheque on 26.6.2021 through his banker, which was also returned as unpaid with endorsement as 'instrument outdated/stale' dtd.30.6.2021 to Complainant. It is further submitted that, after receipt of endorsement, Complainant once again approached the Accused personally and informed about return of Cheque and demanded payment of money, for which the Accused has issued a fresh post dated Cheque bearing No.885389 dtd.19.7.2021 drawn on Indian Bank, New Horizon College of Engineering branch, Bengaluru - 560 087 for Rs.8 lakhs in favour of Complainant and requested the Complainant to present the said Cheque on 19.7.2021. It is further submitted that, on 19.7.2021 the Complainant has presented a fresh Cheque through his banker for encashment, which also unpaid with endorsement as 'Kindly contact drawer' on 7.8.2021 to Complainant. It is further submitted that, after receipt of endorsement, the Complainant again approached the Accused and informed the same, for which, Accused once again requested the Complainant to grant some more time in order to arrange the 10 C.C.No.57312/2021 money and requested to re-present the Cheque on 2.9.2021. It is further submitted that, as per the request the Complainant re-presented the fresh Cheque on 2.9.2021 through his banker, which was returned unpaid with endorsement as "kindly contact drawer/draweee bank and please present again" dtd.3.9.2021 to the Complainant through courier on 14.9.2021. It is further submitted that, after receipt of endorsement, again Complainant approached the Accused and informed the same and demanded payment of money, though the Accused has agreed to pay the Cheque amount, but has not paid the Cheque amount instead postponing on one pretext or other till today. It is further submitted that, the Complainant has issued legal notice dtd.28.9.2021 through his counsel to the address of the Accused by RPAD and Speed Post, which was served on the Accused on 29.9.2021 as per the online postal track. It is further submitted that, after receipt of notice, the Accused has not complied with the notice nor sent any reply. Hence, the Complainant has filed the present complaint against the Accused for the offence punishable u/Sec.138 of N.I. Act.
11 C.C.No.57312/2021
13. In order to bring home the guilt of the accused, complainant has examined himself as PW1 and reiterated the contents of complaint in his examination-in-chief. He has also placed the original Cheque bearing No.885389 at Ex.P.1, Bank challan at Ex.P2, Bank endorsement at Ex.P3, returned postal envelopment at Ex.P3(a), Bank challan at Ex.P4, Bank endorsement at Ex.P5, returned postal envelope at Ex.P5(a), office copy of legal notice issued by the Complainant to the Accused on 28.9.2021 at Ex.P6, Postal receipts at Ex.P7 and 8, postal tracts at Ex.P9 and 10, fresh Cheque bearing No.885390 dtd.28.3.2021 at Ex.P11, Bank challan at Ex.P12, bank endorsement at Ex.P13, returned postal envelope at Ex.P13(a), bank challan at Ex.P14 and bank endorsement at Ex.P15.
14. The documents produced by the complainant of course established that complainant meets out the procedural requirements of Section 138 of Negotiable Instrument Act, but it is to be considered whether all these documents establish the offence committed by the accused.
15. The Negotiable Instruments Act raises two presumptions. One contained in Section 118 and the other in 12 C.C.No.57312/2021 Sec. 139 thereof. For the sake of convenience Sec 118(1) of the N.I. Act is extracted here below:
118. Presumptions as to negotiable Instruments--
Until the contrary is proved, the following presumptions shall be made ;--
(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
1. To (g) . . . . . . . . . . . .
Provided that where the instrument has been obtained from its lawful owner, or from an person in lawful custody thereof, by means of an offence of fraud, or has been obtained from the maker or acceptor thereof by means of an offence of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him".
16. Further Section 139 of the Negotiable Instruments Act reads as under:
"139, Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature 13 C.C.No.57312/2021 referred to in section 138, for the discharge, in whole or in part, of any debt or other liability."
Scope and ambit and function of the presumption U/s 118(a) and Sec 139 of NI Act came to be considered by the Hon'ble Apex Court of Indian in Krishna Janardhan Bhat Vs Dattatraya G.Hegde (2008 AIAR (Criminal 151) The Supreme Court has laid down the law in the following phraseology.
" D Negotiable Instruments Act 1881, Secs 139, 138--Presumption under-same arises in regard to second aspect of the matter provided under Sec 138-- Existence of legally enforceable debt is not a matter of presumption under Sec 139- It merely raises presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability - Merely an application of presumption contemplated under Section 139 of N.I.Act should not lead to injustice or mistaken conviction."
17. Further, said decision was followed by Hon'ble High Court of Karnataka in Kempanarasimhaiah Vs P.Rangaraju & Others (2008 (5) KCCR 3371). Relevant paragraph of the said judgment reads as under: -
"12. As to the provisions of Sections 138 of N.I.Act, the following principles emerge from the above observations of Hon'ble Supreme Court at para Nos 14 C.C.No.57312/2021 21, 23, 25, 26 and 34 of its Judgment in the above said case of Krishna Janardhan Bhat Vs Dattatraya G.Hegde, AIR 2008 SC 1325.
(i) Section 139 of the Act merely raises a presumption that the cheque was issued towards discharge in whole or in part in any debt or other liability, which presupposed legally enforceable debt. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability." ( para 21)
(ii) The question as to whether the presumption stood rebutted or not, must be determined keeping in view the other evidences on record. Where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. (para 26)
(iii) An accused, for discharging the burden of proof placed upon him under a statute, need not examine himself.
He may discharge his burden on the basis of the materials already brought on records (para 23)
(iv) Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Further more where as prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is " preponderance of probabilities'" ( para 23 & 25)
(v) Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies ( para 25)
(vi) Other important principles of legal jurisprudence, namely presumption of innocence as human rights 15 C.C.No.57312/2021 and the doctrine of reverse burden introduced by Section 139 should be deliberately balanced (para 34)
18. Thus from the observations extracted above, it is clear that presumption Under Section 139 of the N.I,.Act is only to the extent that the cheque was drawn for discharge in full or in part of any debt or other liability and the said presumption do not relate to the existence of legally enforceable debt or liability. Therefore, before drawing the presumption under section 139 of the N.I.Act, it is the duty of the Court to see whether or not the complainant has discharged his initial burden as to existence of legally enforceable debt. No doubt, as per Section 118(a) of the Act, there is a rebuttable presumption that every negotiable instrument, is accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration."
19. Factual matrix of the case is required to be tested on the anvil of principles emerging from the above-referred decisions.
20. The defence taken by the Accused is that, Complainant and Accused were friends and they used to travel 16 C.C.No.57312/2021 in car so many times stayed outside the Bengaluru. The Complainant is having Shivraj Motors Garage, the Accused given his vehicle for repair and same has not been repaired and for the repair purpose 4 Cheques duly signed by the Accused without writing the contents of the Cheque and duly signed e-stamp paper in the car and same were collected by the Complainant and misused the same and presenting the Cheques behind the back of Accused before the bank. Further defence of the Accused is that, he never borrowed any amount from the Complainant and not due or liable to pay amount to the Complainant as claimed by him.
21. In the cross-examination of PW1, he stated that, Accused and himself known to each other since from 20 years and he paid Rs.8 lakhs to the Accused in the month of October 2020 in his office. During the cross-examination of Complainant, the learned Counsel for accused suggested that in chit transaction Complainant collected 4 Cheques, out of 2 Cheques, he filed present complaint and another two Cheques were with Complainant, which was denied by the Complainant. Another suggestion taken in the cross-examination that, when Complainant along with the Accused in the car, the 17 C.C.No.57312/2021 Complainant collected two Cheques and for chit transaction collected two Cheques and filed this complaint, which also denied by the PW1.
22. In the defence the Accused stated that when he was given a vehicle for repair to the garage of Complainant and for repair purpose, 4 Cheques duly signed by the Accused without writing any contents and also duly signed e-stamp paper in the car and same were collected by the Complainant and misused by the Complainant.
23. In the cross-examination he admits that, he never produced any document to show that, he leaves his vehicle in the garage of Complainant for repair and also admits that, he not taken any action against the Complainant for collecting the Cheque and other documents kept in his vehicle. He further admits that after receipt of notice, the Accused has not replied to the notice.
24. During the course of argument, the learned Counsel for accused argued that, entire averments made in the complaint are denied by the Accused and Complainant is habit of paying money to the persons and filed many cases against 18 C.C.No.57312/2021 the persons and this is the usual habit of the Complainant by filing cases and collecting money from the persons.
25. On the other hand, the learned Counsel for complainant argued that, the Accused has taken false defence that he had given a vehicle or repair in the garage of Complainant and for repair purpose duly signed Cheques and e-stamp papers in the car and same were collected by the Complainant and misused the same. It is further argued that the defence of the Accused is not probable and acceptable to escape from his liability, false defence has been set up.
26. On perusal of documentary and oral evidence, the Accused has not produced any single document to prove his defence that, the Complainant has taken or collected signed four Cheques and signed stamp papers from the car of Accused. Further, the Accused has not taken any legal action against the Complainant for collecting signed Cheques and e-stamp papers belongs to the Accused. Further the Accused himself admits that, he has not replied notice issued by the Complainant to him. Further, the Accused has not produced 19 C.C.No.57312/2021 any document to show that he having Qualis vehicle, which he owned and given to the garage of Complainant for repair.
27. The Accused has not denied his signatures on the Cheques. He has taken different defence that, once he stated that, for chit transaction, Complainant has collected Cheques from him and another defence he stated that, he was kept the signed blank Cheques and signed blank e-stamp paper in his car and Complainant was collected the same and misused the Cheques against him. It is already stated above that, Accused has not taken any legal action against the Complainant for collecting the Cheques from the Accused and misused the same against him.
28. Therefore, for above discussion, it has to be presumed that the cheque in question was issued by the accused to discharge the legally recoverable debt or liability. The accused can place rebuttal evidence so as to show that the cheque was not issued for consideration. As appreciated supra, accused has failed to put acceptable and satisfactory evidence to probabilise the defence. Therefore, there is no question of saying that the cheque was not issued for legal liability. 20 C.C.No.57312/2021
29. The accused himself admits that, the signature on the Cheques were belongs to him. Therefore, complainant has discharged his initial onus laid on him. When he has discharged his initial onus, it raises presumption U/s 118(a) and 139 of Negotiable Instruments Act. Accused has failed to rebut the presumption either in cross-examining PW-1 or in his evidence.
30. Further, it is also not disputed that cheque Ex.P.1 and Ex.P11 bears his signature and it pertains to his Account maintained at Indian Bank, New Horizon College of Engineering branch, Bengaluru. The Accused stated that, the cheques were misused by the Complainant in this case by filing false complaint. Therefore, let me appreciate the oral and documentary evidence adduced by both the parties in the light of the facts admitted and the defence taken by the accused.
31. The main contention of the accused is that cheque Ex.P.1 and 11 were collected by the Complainant in chit transaction and from the car which were kept by the Accused with duly signed blank e-stamp papers. Now it is well settled that, the Accused admitted his signature on the Cheques and 21 C.C.No.57312/2021 not placed any materiel to show that, the Cheques were not issued for legally recoverable debt, hence, his defence is not probable and acceptable.
32. Therefore, considering the fact and circumstances of the case and oral and documentary evidence placed by both parties, Complainant has discharged his initial onus laid on him. When he has discharged his initial onus, it raises presumption U/s118(a) and 139 of Negotiable Instrument Act. Accused has failed to rebut the presumption either by cross- examination of PW-1 or by his evidence. Since Accused has admitted his signature on the Cheques and said Cheques were dishonoured. Hence, he is committed offence punishable u/Sec.138 of N.I. Act.
33. So, far as sentence and compensation is concern, an offence punishable under section 138 of N.I. Act, is a civil wrong and compensatory in nature, punitive is secondary, considering, the above settled principal of law with facts and circumstances of the case, which clearly reveals that, the cheques in question of issued by the accused to the complainant for legally recoverable debt. Therefore considering 22 C.C.No.57312/2021 the nature of transaction, duration of pendency, litigation expenses, I am opinion that, if sentence of Fine of Rs.8,72,000/- (Rupees Eight Lakhs and Seventy-two Thousand only) is imposed that would meet the ends of justice, accordingly, the accused is hereby sentenced to pay a fine of Rs.8,72,000/- (Rupees Eight Lakhs and Seventy-two Thousand only) , out of that, the complainant is entitled for sum of Rs.8,67,000/- (Rupees Eight Lakhs and Sixty-seven Thousand only) as a compensation as per Sec.357(1) of Cr.P.C., remaining amount of Rs.5,000/-, is to be appropriated to the state, in case of default the accused shall under go simple imprisonment for a period of 6 months. Accordingly, the Point No.1 is answered in Affirmative.
34. POINT No.2 : In view of discussion held in Point No.1, I proceed to pass the following :
ORDER Acting U/S 255(2) of Cr.P.C., the accused is convicted for the offence punishable Under Section 138 of Negotiable Instrument Act.
Accused is sentenced to pay fine of Rs.8,72,000/- (Rupees Eight Lakhs and Seventy-
two Thousand only) in default to undergo simple 23 C.C.No.57312/2021 imprisonment for 6 months. Further, it is made clear that out of fine amount, Rs.8,67,000/- (Rupees Eight Lakhs and Sixty-seven Thousand only) is to be paid to the complainant as compensation and Rs.5,000/- is ordered to be remitted to the State.
Bail bond stands cancelled.
Supply the free copy of this judgement to the Accused forthwith.
(Dictated to the stenographer, transcribed by her, corrected by me and then pronounced in the open court on this 12th May, 2023) PARVEEN A Digitally signed by PARVEEN A BANKAPUR BANKAPUR Date: 2023.05.15 16:31:35 +0530 (PARVEEN A BANKAPUR) XXXIV ACMM, BENGALURU.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 Mr. N. Shiva Shekar Reddy
2. Documents marked on behalf of complainant:
Ex.P.1 Cheque
Ex.P.2 Bank Challan
Ex.P.3 Bank endorsement
Ex.P.3(a) Postal cover
Ex.P.4 Bank Challan
Ex.P.5 Bank endorsement
Ex.P.5(a) Postal cover
Ex.P.6 Office copy of legal notice
Ex.P.7 & 8 Postal receipts
Ex.P.9 & 10 Postal tracks
Ex.P.11 Cheque
Ex.P.12 Bank challan
Ex.P.13 Bank endorsement
Ex.P.13(a) Postal cover
Ex.P.14 Bank challan
24 C.C.No.57312/2021
Ex.P.15 Bank endorsement
3. Witnesses examined on behalf of Accused :
D.W.1 Mr. Mohan Kumar
4. Documents marked on behalf of Accused:NIL PARVEEN A Digitally signed by PARVEEN A BANKAPUR BANKAPUR Date:
+0530 2023.05.15 16:31:42 (PARVEEN A BANKAPUR) XXXIV ACMM, BENGALURU.