Bangalore District Court
Sri.Suresh Kumar.R vs Sri.R.Srinivas on 1 December, 2022
KABC030142412018
Presented on : 26-02-2018
Registered on : 26-02-2018
Decided on : 01-12-2022
Duration : 4 years, 9 months, 5 days
IN THE COURT OF XX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY
PRESENT: BHOLA PANDIT,
B.Com.,LL.M.,
XX ADDL. C.M.M.
Bengaluru.
Dated this the 1st day of December 2022
C.C.No.5258/2018
Complainant : Sri.Suresh Kumar.R.
S/o Late.Sri.Ramachandar,
Age 46 years,
R/at.No.1, Markhem Road,
2nd Cross, Ashoknagar,
Bengaluru- 560 027.
{ By Sri.Vijay Kumar - Advocate }
Vs.
2 C.C.5258/2017
Accused : Sri.R.Srinivas,
Major,
Proprietor:- GIRIJA ENTERPRISES,
No.8, Appajappa Agrahara,
Chamarajpet,
Bengaluru- 560 018.
{ By Sri.N.Jaiprakash Rao - Advocate }
Offence complained : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of Order : 01-12-2022
JUDGMENT
The present complaint is filed under section 2(d) read with section 200 of code of criminal procedure against the accused seeking to punish him for the offence punishable under section 138 of the Negotiable Instruments Act ( in short referred as "N.I. Act").
3 C.C.5258/2017
02. The factual matrix of the complaint is summarized as under;
It is averred in the complaint that, the accused being well known to the complainant for the past several years has borrowed hand loan of Rs.5,00,000/- from the complainant on 16.02.2015 by way of cash for business purpose and has executed pronote and acknowledgement about receipt of said loan amount. Further alleged that, to repay the said loan amount, the accused has issued a cheque bearing No.005397 dated 17.04.2017 for a sum of Rs.5,00,000/- drawn on Bank of Maharashtra, Chamrajpet Branch, Bengaluru in favour of the complainant. The complainant has presented the said cheque for encashment through his banker i.e., Corporation Bank, Shanthinagar, Bengaluru, but it returned unpaid with banker's endorsement dated 18.04.2017 as "Payment Stopped by Drawer". On 09.05.2017, the complainant has issued demand notice to the accused and the same was duly served on 12.05.2017. 4 C.C.5258/2017 The accused has issued reply dated 24.05.2017 to the notice cuased by the complainant. In spite of service of legal notice, the accused neither has paid the cheque amount nor has given any reply. On these grounds, it is sought to convict the accused for the offence punishable under section 138 of NI Act and grant compensation as per section 357 of Code of Criminal Procedure.
03. On presentation of complaint, this court has verified the averments of complaint along with records and thereby had taken cognizance for the offence punishable under section 138 of NI Act. Thereby, as per the verdict of the Hon'ble Apex court reported in AIR 2014 SC 1983 in the case of Indian Bank Association and others V/s Union of India and others, the sworn statement of the complainant has been recorded as PW.1 and got exhibited nine documents at Ex.P.01 to 09. Having been made out the prima-facie case, the complaint has been registered in Register No. III and issued process against the accused. 5 C.C.5258/2017
04. In response to the summons, the accused put his appearance before the court through his counsel and filed bail application under section 436 of Code of Criminal Procedure, the accused has been enlarged on bail. The substance of accusation has been recorded and read over to the accused, he pleaded not guilty and intends to put forth his defense. On filing application by the complainant under section 145(1) of NI Act, sworn statement of the complainant has been treated as examination in chief. Similarly, on filing application under section 145(2) of NI Act, the accused has been permitted to cross examine PW.1. On completion of the trial of the complainant's side, the statement of accused under section 313 of Code of Criminal Procedure has been recorded and read over to the accused, the incriminating material found in the trial of the case of the complainant. The accused has denied the same in toto and gave explanation stating that, he had not issued cheque in favour of the complainant. The accused also wants to lead his defense evidence, but the accused neither has 6 C.C.5258/2017 entered in the witness box nor has produced any documentary evidence. The Learned counsel for the accused submitted no oral evidence from defense side.
05. Heard the oral argument of Learned counsel for the complainant, also filed written argument. Defense side oral argument taken as not advanced giving liberty to file written argument. Perused the materials available on record.
06. The following points that arise for my consideration are as under;
POINTS
1. Does the complainant proves beyond reasonable doubts that, the accused has issued a cheque bearing No.005397 dated 17.04.2017 for a sum of Rs.5,00,000/- towards the discharge of his lawful liability of the complainant and when the said cheque was presented for encashment, it was returned unpaid due to "Payment Stopped by Drawer" in the account of the 7 C.C.5258/2017 drawer as per banker's memo and inspite of issuance of demand notice, the accused has failed to pay the cheque amount, thereby has committed the offence punishable under section 138 of NI Act?
2. What Order or sentence ?
07. My findings 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
08. POINT No.1: It is the specific case of the complainant that, the accused had borrowed hand loan of Rs.5,00,000/- in cash from the complainant for business purpose and towards discharge of the said hand loan amount, the accused has issued the disputed cheque and when the said cheque was presented for encashment, it returned unpaid due to "Payment Stopped by Drawer" in the account of the drawer and inspite of receipt of demand notice, the accused has failed to make the payment of the cheque amount.
8 C.C.5258/2017
09. To substantiate and establish this fact before the court beyond reasonable doubts as per the verdict of the Hon'ble Apex court in the case of Indian Bank Association and others V/s Union of India and others , the sworn statement of the complainant has been treated as affidavit evidence. In his affidavit evidence, PW.1 has replicated the averments of the complainant. To corroborate the evidence of PW.1, the complainant has placed on record in all nine documents as per Ex.P.01 to 09. Ex.P.1 is the disputed cheque dated 17.04.2017, Ex.P.1 (a) is the signature of accused, Ex.P.2 is the banker's memo dated 18.04.2017, which shows the reasons for the return of the cheque at Ex.P.1 for unpaid is as "Payment Stopped by Drawer" , Ex.P.3 is the legal notice dated 09.05.2017 demanding for payment of cheque amount by replicating the averments of complaint, which was duly served to the accused on 12.05.2017 and the accused has issued reply datd 24.05.2017. Ex.P.4 & 5 are the the postal receipts about 9 C.C.5258/2017 sending legal notice at Ex.P.3, Ex.P.6 & 7 are the postal acknowledgements about receipt of the demand notice, Ex.P.8 is the reply notice, Ex.P.9 is the on demand promissory note and Ex.P.9(a) is the signature of accused on Ex.P.9 on demand promissory note. PW.1 has been substantially cross examined by the counsel of accused.
10. To disprove the case of the complainant and also to rebut the mandatory presumptions which could be drawn under section 139 of NI Act, the accused neither has entered in the witness box nor has produced any documentary evidence. The counsel of accused has submitted no defense evidence.
11. Learned counsel for the complainant strenuously contended that, when the accused has been admitting the issuance of cheque and his signature there on, the legal presumption should be drawn in favour of the complainant, that the cheque at Ex.P.1 cheque has been issued towards 10 C.C.5258/2017 the discharge of legal debt or liability. He further argued that, the oral evidence of accused is not sufficient to rebut the statutory presumptions under sections 118(a) & 139 of NI Act. Therefore, He sought to convict the accused.
Accused side oral argument taken as not advanced giving liberty to file written argument . Inspite of this, no written argument filed.
12. Before to appreciate the rival contention of both the parties and also scrutinize the oral and documentary evidence placed on record, it is necessary to find out whether the present complaint has been filed in consonance with the provisions of section 138 of NI Act or not?. The present complaint is filed on 22.06.2017 and on perusal of the cheque, banker's memo, demand notice, postal receipt, postal acknowledgement and reply notice, it appears that, the present complaint filed in compliance of section 138(a) to (c) of NI Act.
11 C.C.5258/2017
13. As per sections 118(a) & 139 of NI Act are two important provisions and they provides for raising mandatory presumptions in favour of the complainant until the contrary is proved by the accused. Even in the catena of decisions i.e., in the case of Rangappa Vs. Mohan reported in 2010(11) SCC 441, in the case of Bir Singh Vs. Mukesh Kumar reported in 2019(4) SCC 197, in the case of APS Forex Services (P) Ltd., Vs.Shakthi International Fashion Linkers reported in 2020(12) SCC 724, in the case of Rajeshbai Muljibhai Patel Vs. State of Gujarat, reported in 2020(3) SCC 794, in the case of Triyambak S. Hegde Vs. Sripad reported in Live Law 2021 SC 492 and it is laid down that, " Once the issuance of cheque and the signature thereon is admitted by the accused, the court is required to raise presumption in favour of the complainant stating that, the accused has issued the cheque for some consideration towards discharge of his legal debt or liability of the complainant and that the complainant is the due holder of the said cheque. The burden shifts on the 12 C.C.5258/2017 accused to rebut the statutory presumptions under sections 118(a) & 139 of NI Act." Now, it is well established law that, the presumption mandated by section 139 of NI Act, thus indeed includes the existence of legally enforceable debt or liability and it is open for the accused to raise a probable defense wherein the existence of legally enforceable debt or liability can be contested and he shall prove before the court on preponderance of probabilities, only thereupon a statutory presumption raised in favour of the complainant stands rebutted.
14. In the well known judgment of the Hon'ble Apex Court reported in AIR 2019 SC 1983 , in the case of Basalingappa Vs. Mudibasappa in para No.19, the top court of the country held that;
"Applying the rule of the word 'proved' under section 3 of Evidence Act, it became evident that in a trial under section 138, a prosecution will have to be made out every negotiable instrument was made or drawn for consideration and that it was extended for discharge of debt or liability once the execution of negotiable instrument is 13 C.C.5258/2017 either proved or admitted. As soon as the complainant discharges burden to prove that instrument was executed by the accused, the rules of presumptions under section 118 & 139 help him to shift the burden on the accused.
The presumptions will live, exists & survive & shall and only when the contrary is proved by the accused, that is the cheque was not issued for consideration and in discharge of any debt or liability. A presumption itself is not evidence, but only makes a prima-facie case for a party to whose benefits it exists.
The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insists in every case the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated, but bare denial of the passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is possible has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration & debt did not exists or their non- existence was so probable, that a prudent man would 14 C.C.5258/2017 under the circumstances of the case act upon the plea that they did not exists."
As per the above verdict of the Hon'ble Apex Court, in order to rebut the statutory presumption under section 118(a) & 139 of NI Act, the accused either may adduce his own evidence or he may rely upon the evidence elicited from the mouth of PW.1 during the cross examination. In this case, the Learned Defense Counsel has cross examined PW.1 at length. Now, it is trite law that, in order to rebut the statutory presumption, the accused shall raise probable defense and the same has to be proved on the touch stone of preponderance of probabilities. Once, the accused has successfully discharges his burden, the onus shifts on the complainant to establish before the court his financial capacity if it has been disputed, so also shall prove the alleged financial transaction. Mere raising of a defense is not enough and sufficient unless the said defense is supported and corroborated by cogent and acceptable evidence.
15 C.C.5258/2017
15. Further, the accused has given reply notice to the legal notice issued by the complainant and the same is marked as Ex.P.8. In para No.2 of the reply notice it is contended that, the complainant is stranger to the accused and both have no contact at any point of time. However, it is claimed that, the accused has borrowed Rs.20,00,000/- from one Mr.Chiman Lal in the month of April 2013 and at that time , the accused has issued three blank cheques as a security for the repayment of the loan amount and also executed on demand promissory note. Subsequently, the accused has fully repaid the loan borrowed by the Mr.Chiman Lal along with interest and had requested Mr.Chiman Lal for the return of three cheques and on demand promissory note, at that time Mr.Chiman Lal told that, he had destroyed the cheques and on demand promissory note, believing the words of Mr.Chiman Lal, the accused had not taken any further steps to get back his signed blank cheques and DP note. But, as a matter of abundant precaution, he has informed stop payment to his 16 C.C.5258/2017 banker in respect of all his three security cheques. Later, he came to know that, Mr.Chiman Lal has fraudulently handed over one of the said three cheques to the present complainant and the complainant along with said Mr.Chiman Lal colluding with each other have hatched a sinister plan to extract money from the accused by creating a false cause of action and thereafter by filling up the said cheque it was presented it to the bank and has filed the present complaint. It is further contended that, in one of the said three cheques, he has rightly informed to his banker for stop payment. In this reply notice, entire transaction has been denied by giving para wise reply. In order to substantiate and prove this defense taken in the beginning under Ex.P.8, the accused did not stepped into the witness box . On the other hand, on scrutinizing of entire cross examination of PW.1 in para No.3 of page No.5, it is suggested that, the accused had borrowed an amount from one Mr.Chiman Lal and had issued three signed blank cheques as security, out of those three cheques, one of the 17 C.C.5258/2017 cheque has been mis-used and the present complaint came to be filed. It is further suggested in same para on page No.6 that, the accused has repaid entire loan amount of Mr.Chiman Lal. Mere taking of this defense in the reply notice and also mere suggesting to PW.1 during his cross examination is not sufficient to hold that, the accused has raised probable defense. When it is the contention of the accused that, he has given stop payment letter to his banker, then he ought to have produced the said copy of the stop payment letter before the court. Further, the accused not proved before the court that he had sufficient amount in his account at the time of presenting the cheque. But, no such effort has been made by the accused in this regard. That apart, as per the accused, the cheque at Ex.P.1 was issued in the year 2013, but it was presented to the bank by the complainant in the year 2017. If that being so, before 2013, there was non CTS cheques and the reason for the return of the cheque could have been shown as non CTS cheque, but no such reason is mentioned in Ex.P.2. In 18 C.C.5258/2017 support of his contention as he stopped the payment of cheque at Ex.P.1, if really the accused had issued such instructions to his banker, then it must be have been issued in the year 2013 itself when the Mr.Chiman Lal did not return the cheque at Ex.P.1. That apart, when the accused not taken any other steps such as, issuing legal notice to Mr.Chiman Lal or filing police complaint against the said person for the non return of three signed blank cheques and blank pronote, under such circumstances mere raising a defense in the reply notice and in the cross examination of PW.1, is not sufficient to hold that, the accused has raised probable defense unless the accused entered in to the witness box and could have lead his oral evidence. But, no such efforts has been made by the accused, remaining entire cross examination of PW.1 was pertaining to non payment of income tax on the alleged borrowed amount. Further, the financial capacity of the complainant is also raised about the advancement of disputed loan amount, so also the question was put with regard to payment of any 19 C.C.5258/2017 amount through bank or cheque if it exceeds Rs.20,000/-. These are the questions which could be considered only when the accused has successfully discharged his burden and rebutted the legal presumptions raised in favour of the complainant. That apart, when the accused is admitting his signature on pronote at Ex.P.9(a) & (b), he clearly admitted the due execution of this Ex.P.9 and the statutory presumption under section 118(a) shall be raised in favour of the complainant that the accused has issued this pronote for some consideration and this statutory presumption is also not rebutted by the accused. Therefore, the accused has miserably failed to raise probable defense and to prove the same on preponderance of probabilities. Hence, I answered point No.1 in the affirmative.
16. 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 20 C.C.5258/2017 wrong. Hence, it is proper to award sentence of fine, instead of awarding sentence of imprisonment. 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.6,10,000/-
(Rupees Six Lakhs Ten Thousand
only). In default, he shall undergo
simple imprisonment for 3 (Three)
months.
Acting under section 357(1) of
code of criminal procedure, it is ordered that an amount of Rs.6,00,000/-
21 C.C.5258/2017
( Rupees Six Lakhs only), there from shall be paid to the complainant as a compensation, remaining fine amount of Rs.10,000/- (Rupees Ten Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
The bail bond of accused stands canceled subject to appeal period.
Supply free copy of judgment to the accused.
{Dictated to the stenographer, transcribed and computerized by her, revised corrected and then pronounced in the open court on this 01st day of December 2022}.
(BHOLA PANDIT) XX ACMM, Bengaluru.
22 C.C.5258/2017ANNEXURE List of witnesses examined on behalf of complainant:
P.W.1 Suresh Kumar.R 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 the legal notice Ex.P. 4 & 5 Postal receipts Ex.P. 6 & 7 Postal acknowledgements Ex.P.8 Reply notice Ex.P.9 On demand promissory note Ex.P.9(a) Signature of accused
List of witnesses examined on behalf of accused:
-Nil-
List of documents produced on behalf of accused:
-Nil-
XX A.C.M.M., Bengaluru.