Bangalore District Court
Sri Rajkumar vs Proprietor Of M/S. Khushboo ... on 7 June, 2019
IN THE COURT OF 55TH ADDL. CITY CIVIL & SESSIONS JUDGE,
BANGALORE (CCH-56)
: Present :
Sri K. Narayana Prasad, B.Sc., LL.M.,
th
55 Addl. City Civil & Sessions Judge,
Bangalore
: Crl. Appeal No. 1168/2014 :
Date: The 7th day of June 2019
APPELLANT/ Sri Rajkumar,
ACCUSED : Proprietor of M/s. Khushboo Electricals,
Age: 58 years, r/at No.21/3,
Venkateshwara Complex, A.M. Lane,
B.V.K. Iyengar Road Cross,
Bangalore-560 053.
(By: Sri G. Devaraj, Advocate)
- V/s -
RESPONDENT/ Sri Vikram Chugh s/o. M.R.Chugh,
COMPLAINANT : Age: 45 years, r/at No.16, 7th Cross,
K.P. West, Bangalore-560 003.
(By: Sri M.G.Sathish, Advocate)
JUDGMENT
This is an appeal filed against the Judgment and conviction dt.23-9-2014 in C.C.No.5533/2013 by a learned 21st ACMM, Bangalore City.
2. The rank of the parties are repeated as complainant and accused for clarity and clear understanding. The present appellant is an accused before the trial court.
3. It is the case of the complainant that accused is proprietor of M/s. Khushboo Electricals approached the complainant
-2- Crl. Appeal No. 1168/2014 for financial help and borrowed a sum of Rs.2,00,000/- each on 9-7-2012 and 19-7-2012 in all Rs.4,00,000/- for the purpose of business of the accused. The accused has executed 2 demand promissory notes for the said sum. When it was requested for repayment, the accused has issued 4 cheques bearing No. 825690, 825695, 825696 and 825689 for a sum of Rs.1,00,000/- each drawn on Punjab and Sind Bank, Chickpet branch. When it was presented through bankers of the complainant, the cheques were returned unpaid with an endorsement insufficient funds. Later the complainant got issued legal notice, which was duly served on the accused. Even after service of the same, the accused never made the payment. Accordingly the complainant files a complaint before jurisdictional magistrate.
4. The trial court after taking cognizance has issued summons to the accused and accused appeared before the court and denied accusation in the form of plea and claimed trial. After recording 313 Cr.P.C statement the accused has not chosen to lead defence evidence. After hearing the parties, the trial court convicted the accused for the offence p/u/sec. 138 of N.I. Act and imposed fine of Rs.4,40,000/-, out of which Rs.4,00,000/- as fine and Rs.40,000/- as compensation. Aggrieved by the Judgment and Conviction, the accused has filed the present appeal on various
-3- Crl. Appeal No. 1168/2014 grounds . Some of the main grounds are that the trial court has not observed that the cheques in question are not issued towards legally recoverable debt. The trial court has not appreciated the fact that cheques were handed over to one Dileep, who is the friend of the accused and the accused has no business relationship with the accused in any manner. It is also stated that income tax returns of the complainant never shown the details of the present transactions. In order to rebut statutory presumptions the accused relied on S.K.Jain -V/s- Vijaya Kalra case. The accused need not lead any evidence, but may rely on the principle of preponderance of probability. The court has erred in convicting the accused and not appreciated that the demand promissory note was not filed initially, later it was created etc. The admissions made by the complainant during the course of cross-examination was not at all properly considered by the trial court and accordingly prays for allowing the appeal.
5. On issuance of appeal notice, the respondent has appeared before the court.
6. Heard the arguments of learned counsel for the appellant. The respondent remained absent, not addressed any arguments.
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7. The points that arise for consideration are:-
1) Whether the complainant has proved that the accused has issued cheques bearing No.825690, 825695, 825696 and 825689 for a sum of Rs.1,00,000/- each totally Rs.4,00,000/- towards legally recoverable debt which when presented through complainant bankers the same returned unpaid with an endorsement 'insufficient funds'?
2) Whether the conviction order is liable to be set-
aside on the grounds urged before this court by the accused?
3) Whether order passed by the trial court requires any interference?
4) What order?
8. Findings on the above points are as under:
Point No.1 : In the Affirmative,
Point No.2 : In the Negative,
Point No.3 : In the Negative,
Point No.4 : As per final order for the following:
REASONS
Point No.1 :-
9. It is the specific case of the complainant that the accused borrowed a sum of Rs.2,00,000/- each on 9-7-2012 and 19-7-2012, totally a sum of Rs.4,00,000/- for the purpose of business. It is further the case of the complainant that towards repayment of the said amount the cheques in question are issued by the accused, which when presented returned with an
-5- Crl. Appeal No. 1168/2014 endorsement 'insufficient funds'. Later he got issued a legal notice and even after issuance of legal notice the amount is not paid by the accused. All these facts are reiterated in the evidence of PW1 before the trial court. The complainant has produced original cheques Ex.P.1 to Ex.P.4 and the endorsement Ex.P.5. On going through the endorsement it is seen that the cheques are returned for want of funds in the account of the accused. Ex.P.6 is the legal notice, which was duly served as per Ex.P.8 and Ex.P.9. The other two documents Ex.P.10 and Ex.P.11 are on demand promissory notes.
10. The learned counsel for appellant vehemently argued that there is no direct transaction between the accused and the complainant and there is no legally recoverable debt in this case. He further argues that the cheques were handed over to one Mr.Dileep, who is the friend of accused and the same is mis- utilized by the complainant herein. The learned counsel further submitted that the promissory notes produced before the court are created documents and they were not filed at the initial period of time when PW1 was examined at the first instance. The said submissions falls to ground as the promissory notes are referred to in the complaint filed and also in the examination in chief.
Hence no credence can be given to the said submissions. Now
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coming to the aspect of handing over of cheques to one Mr. Dileep, the same is not proved before the court. In the ground of appeal it has been stated that Dileep is the friend of accused. If the said person is really the friend of accused, then nothing prevented him from examining Dileep before the court. The specific defence of the accused on going through the cross- examination of PW1 is that, cheques in question are not related to the transactions that are stated in the complaint. According to the accused, the complaint averments are false and baseless. The theory of accused that cheques were in the custody of Dileep and are misused etc. is not proved before the court. It would be very difficult to accept such contentions in the absence of specific proof. The presumptions u/sec.118 and 139 of N.I. Act are strong presumptions of law. When once the cheques are presented to the bank and when the cheques and signatures are not denied then initial presumption is that they are issued towards repayment of dues. However, they are rebutable presumptions. Here the presumptions are not rebutted with cogent and convincing evidence. The accused has not chosen to lead any positive evidence in order to rebut the presumption. When the accused take specific defence that complainant got the cheques from some other person and there is no privity of contract in any manner, then
-7- Crl. Appeal No. 1168/2014 burden of proof of those facts are to be proved by the person who has such knowledge. The accused never examined Mr.Dileep or examined himself in this regard.
11. The complainant has produced the original cheques and bank endorsement to show that the cheques are presented within time and they are returned for want of funds in the accounts maintained by the accused. The complainant has followed all the procedure by issuing notice to the accused. The postal endorsements marked before the court clearly shows that there was a valid service of notice. Hence the complainant has complied all the procedures, which are required to prosecute the accused for the offence p/u/sec.138 of N.I. Act. Hence the court has to draw presumptions as provided u/sec. 118 and 139 of N.I. Act. According to section 118 of N.I. Act until the contrary is proved, presumption is that every negotiable instrument was made or drawn for consideration and every such instrument when it has been accepted are negotiated for consideration. Similarly as per section 139 of N.I. Act court shall presume that until contrary is proved the holder of cheque has received the cheque of the nature referred in section 138 of N.I Act, in whole or in part, of any debt or other liability.
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12. On going through the above presumptions they are not only strong presumptions, but they are presumptions of law. Here in the present case, the complainant has produced cheques in question and other documents to show that the accused has issued cheques without making proper arrangements for funds. It is also proved that the cheques when presented returned unpaid with an endorsement insufficient funds. After return of cheques the procedure laid down u/sec.138 of N.I. Act are complied by issuing statutory notice. In view of these facts the complainant has proved the case with documentary proof. The defence taken by the accused remained as defence, but not proved to the satisfaction of the court. It is no doubt true that the accused need not lead any evidence, but when the accused takes specific defence of certain facts such as handing over of cheques to third party, proving of such facts solely rests on the accused. Having regard to these facts the accused has failed to prove the contrary to the presumptions u/sec.118 and 139 of N.I.Act. Accordingly point No.1 is answered in the Affirmative.
13. Point No.2 and 3:- Now coming to the grounds of appeal, it is the contention of the appellant that the trial court has not appreciated the case in proper perspective and it is only preponderance of probability. He has also stated that Income Tax
-9- Crl. Appeal No. 1168/2014 returns of the complainant are not filed and hence the case of the complainant is not proved. The Hon'ble Supreme Court of India in the latest decision decided in Crl. Appeal No.508 of 2019 in Rohitbhai Jivanlal Patel -V/s- State of Gujarat and another, in paragraph No.7.1 has observed that "the High Court observed that if the transaction in question was not reflected in the accounts and income tax returns, that would at best hold the assessee or lender liable for action under the income-tax laws but, if the complainant succeeds in showing the lending of amount, the existence of legally enforceable debt cannot be denied and the said observation was confirmed by Hon'ble Supreme Court by confirming the order passed by the High Court in that case. The effect preponderance of probability is also discussed in the referred case. In paragraphs 20 and 21 of the said order by Hon'ble Supreme Court it is observed that in the scheme of N.I. Act, mere creation of doubt is not sufficient. It is further held in para 21 that calling the complainant to prove the case beyond doubt is a fundamental flaw in the matter of N.I. Act cases. Hence the said principles are when applied to this case the ground urged in the matter of income tax returns, source of income and the defence with regard to proving case beyond reasonable doubts etc., holds no water.
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14. The accused cannot take shelter on the point of Income Tax stating that the complainant has not shown the present transaction in his Income Tax returns. The accused cannot shirk his responsibility on that ground. Because if the transaction is not reflected in the Income Tax returns, it would be between authority concerned and the complainant to take necessary steps, but accused cannot escape from his liability when a legally recoverable debt is proved before the court. The other grounds urged by the appellant are not strong enough to doubt the case of the complainant. This is because the complainant has produced promissory note to show that there was transaction between accused and the complainant and cheques to show that accused has issued those cheques towards repayment. The other documents show that prior notice was issued which are duly served on the accused. Considering all these facts the grounds urged before the court carries no merits. Hence point No.2 and 3 are answered in Negative.
15. Point No.4:- In view of point No.1 to 3 above, this appeal fails and proceed to pass the following:
ORDER The appeal is dismissed with costs.
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2) The Judgment and conviction order passed in C.C.No.5533/2013 dated 23-9-2014 by 21st Addl. Chief Metropolitan Magistrate is confirmed.
Send back the LCR with copy of this judgment to the trial court.
(Dictated to the Judgment writer on computer and after corrections, pronounced by me in the Open Court on this the 7th day of June 2019.) (K. Narayana Prasad) 55th Addl. City Civil & Sessions Judge, Bangalore.