Bangalore District Court
Sri.G.S.Madhu vs Sri.Harish Reddy on 19 November, 2021
1
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 19th day of November, 2021
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.23410/2017
Complainant : Sri.G.S.Madhu,
S/o. G.N.Subbaiah,
Aged about 40 years,
Businessman,
R/o. # 10, New Cross Road,
Near R.V.K. School,
Chikkamavalli,
Near Lalbagh West Gate,
Bengaluru 4.
(By Sri. V.S.Ramesh., Adv.,)
Vs
Accused : Sri.Harish Reddy,
S/o. Muni Reddy,
Aged about 35 years,
Businessman,
R/o. Muthakapalli Village &
Post, Srinivasapura Taluk,
Kolar Taluk.
(By Sri. G.K.Varada Reddy.,Adv .,)
Case instituted : 6.9.2017
2
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 19.11.2021
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he and the accused were friends since 15 years and the accused being the businessman doing Real Estate and Oil business, was in necessity of funds for his business commitments and other family necessities and as such the accused approached him for financial assistance of Rs.17 Lakhs in the 2 nd week of May 2016 and he was having liquid cash as his father had disposed off some lands at his village and he paid a sum of Rs.17 lakhs to the accused on 3 rd week of May 2016 by way of cash, he further submits that, the accused has promised him to repay the amount of Rs.17 Lakhs within six months, when he 3 demanded the accused to repay the amount after expiry of six months, as he required the amount but the accused postponed the repayment of the amount on one or the other reasons and finally after repeated demands and panchayaths, the accused instead of paying the amount have issued the cheque bearing No.629602 dt:10.7.2017, drawn on HDFC Bank, Gandhi Bazaar Main Road, Basavanagudi, Bengaluru for a sum of Rs.17 Lakhs in his favour. The complainant further contends that, he trusted and beleived the words of the accused and presented the said cheque for encashment on 10.7.2017 through his banker ie Canara Bank, Lalbagh West branch, Bengaluru but the said cheque came to be returned dishonorued as "Account Closed" vide endorsement dt:12.7.2017, thereafter he got issued the legal notice to the accused on 31.7.2017 through RPAD, demanding the accused to pay the cheque amount within 15 days from the date of receipt of the legal notice, the legal notice was returned with a shara that the accused absent at the time of service and has not claimed the said notice on 10.8.2017, the accused knowing about the legal notice have intentionally not 4 claimed the legal notice and hence it is deemed that the notice has been served on the accused, inspite of that, the accused has not repaid the amount nor replied the said notice. Hence he has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
3. Before issuing process against the accused, the the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments made in the complaint. In support of his evidence, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.17 i.e, Original Cheque dated: 10.7.2017 is as per Ex.C.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C2, the office copy of Legal Notice as per Ex.C3, postal receipt as per Ex.C.4, Returned legal notice as per Ex.C5, postal envelope as per Ex.C.6, postal receipt as per Ex.C.7, Statements of accounts of PW.1 of Canara Bank, V.V.Puram Branch, Bengaluru as per Ex.C.8, relevant entry in the pass book as per Ex.C.8(a), certified copy of the Sale deed dt: 29.5.2014 5 as per Ex.C.9, certified copies of the three sale deeds of 27.11.2014 as per Ex.C.10 to C.12 respectively, certified copy of the sale deed dt: 22.2.2017 as per Ex.C.13 and certified copy of the Sale deed 30.10.2018 as per Ex.P.14, Income tax returns for the Assessment years 201617 and 201718 as per Ex.C.15 & C.16 respectively, application U/s.65 B of Indian Evidence Act as per Ex.C.17.
4. Primafacie case has been made out against the accused and summons was issued against the accused in turn has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
5. As per the direction of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the Accused, as he intended to set out his defence, then the case was posted for the crossexamination of the PW.1 and crossexamination of PW.1 recorded and complainant 6 has closed his side evidence.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence subsequently the Accused has not lead his rebuttal evidence.
7. Heard by learned counsel for the complainant and the Accused and perused the materials on record and the decisions relied upon by the learned counsel for the complainant ie. 1) (2010) 11 SCC 441 2) ILR 2005 KAR 3167 3) ILR 2006 KAR 1730 4) AIR 2018 SC 3173 5) AIR 2018 Sc 3601 6) Crl.
Appeal No.23031/19 arising out of SLP (CRL) No.933435/2018 7) 2015(4) KCCR 2881 (SC) 8) ILR 2019 KAR 493 9) ILR 2006 KAR 4672.
The decisions relied upon by the learned counsel for the accused ie., 1) 2015 AIR SCW 64 K.Subramani Vs. K. Damodara Naidu, 2) ILR 2007 KAR 2709 M.Senuguttuvan Vs. Mahadevaswamy 7
3) 2014 (2) SCC 236 - John K. Abraham Vs. Simon C. Abraham and another., 4) 2011(3) AIR Kar R 434 B. Girish Vs. S.Ramaiah.
8. On the basis of complaint, evidence of complainant and documents the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued cheque bearing No.629602 dated: 10.7.2017 for Rs.17,00,000/ drawn on HDFC Bank, Gandhibazar Main Road, Basavanagudi, Bengaluru to discharge legally recoverable debt to the complainant and when the complainant has presented cheque for encashment through his banker but the said cheque has been dishonoured for the reasons "
Account Closed" on 12.7.2017 and the complainant issued legal notice to the accused on 31.7.2017 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
89. The above points are answered as under:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
..
REASONS
10. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act presupposes three conditions for prosecution of an offence which are as under:
91. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
11. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 a presumption shall be 10 raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
12. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, he and the accused were friends since 15 years and the accused being the businessman doing Real Estate and Oil business, was in necessity of funds for his business commitments and other family necessities and as such the accused approached him for financial assistance of Rs.17 Lakhs in the 2nd week of May 2016 11 and he was having liquid cash as his father had disposed off some lands at his village and he paid a sum of Rs.17 lakhs to the accused on 3 rd week of May 2016 by way of cash. The complainant/PW.1 further testified that, the accused has promised him to repay the amount of Rs.17 Lakhs within six months, when he demanded the accused to repay the amount after expiry of six months, as he required the amount but the accused postponed the repayment of the amount on one or the other reasons and finally after repeated demands and panchayaths, the accused instead of paying the amount have issued the cheque bearing No.629602 dt:10.7.2017, drawn on HDFC Bank, Gandhi Bazaar Main Road, Basavanagudi, Bengaluru for a sum of Rs.17 Lakhs in his favour. The complainant/PW.1 further testified that, he trusted and believed the words of the accused and presented the said cheque for encashment on 10.7.2017 through his banker ie Canara Bank, Lalbagh West branch, Bengaluru but the said cheque came to be returned dishonorued as "Account Closed" vide endorsement dt:12.7.2017, thereafter he got issued the legal notice to the accused on 31.7.2017 through 12 RPAD, demanding the accused to pay the cheque amount within 15 days from the date of receipt of the legal notice, the legal notice was returned with a shara that the accused absent at the time of service and has not claimed the said notice on 10.8.2017, the accused knowing about the legal notice have intentionally not claimed the legal notice and hence it is deemed that the notice has been served on the accused, inspite of that, the accused has not repaid the amount nor replied the said notice.
13. In support of his evidence, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.17 i.e, Original Cheque dated: 10.7.2017 is as per Ex.C.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C2, the office copy of Legal Notice as per Ex.C3, postal receipt as per Ex.C.4, Returned legal notice as per Ex.C5, postal envelope as per Ex.C.6, postal receipt as per Ex.C.7, Statements of accounts of PW.1 of Canara Bank, V.V.Puram Branch, Bengaluru as per Ex.C.8, relevant entry in the pass book as per Ex.C.8(a), certified copy of the 13 Sale deed dt: 29.5.2014 as per Ex.C.9, certified copies of the three sale deeds of 27.11.2014 as per Ex.C.10 to C.12 respectively, certified copy of the sale deed dt:
22.2.2017 as per Ex.C.13 and certified copy of the Sale deed 30.10.2018 as per Ex.P.14, Income tax returns for the Assessment years 201617 and 2017 18 as per Ex.C.15 & C.16 respectively, application U/s.65 B of Indian Evidence Act as per Ex.C.17.
14. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not disputed by the accused that, the cheque in question belongs to his account and signature found at Ex.C.1(a) is also that of his signature. The Accused has also not disputed that the cheque in dispute was presented for encashment and dishonoured for the reason of "Funds Insufficient" vide bank endorsement dated: 12.7.2017 therefore as a matter on record and has been proved by producing bank memo i.e., Ex.C.2 issued by the concerned bank dated: 31.7.2017. Therefore the complainant has proved that, the cheque in question i.e Ex.C.1 was presented within its validity period and 14 dishonoured as per bank endorsement issued by the banker of the Accused and the cheque in question belonging to the Accused account and signature of the Accused is at Ex.C.1(a).
15. In relation to the service of notice, the accused in his defence denied the service of notice upon him. The complainant in order to prove service of notice upon the Accused, has produced the documents i.e copy of the legal notice dated 31.7.2017, postal receipt, returned legal notice dated 31.7.2017, RPAD Cover and postal receipt which are at Ex.C.3 to C.7 respectively. On perusal of the Ex.C.3 to C.7 it appears that, the complainant has issued legal notice within 30 days from the date of receipt of endorsement of the bank and the said notice was sent through RPAD and the said RPAD returned with an endorsement of "7 days absent, hence returned to sender", hence, it goes to show that, the legal notice caused by the complainant through RPAD to the addressof the Accused shown in the notice returned with postal endorsement of "7 days absent, hence returned to sender". The Accused during the 15 course of crossexamination of complainant denied service of the notice, it is relevant here to mention that, the accused has not denied or disputed the address mentioned by the complainant in Ex.C.3, Ex.C.6 and it is also not the defence of the accused that, the complainant by colluding with the postal authorities got created the endorsements on Ex.C.6 i.e., the endorsement made by the Postal Authorities as "7 days absent, hence returned to sender". If really the complainant got created the endorsement on Ex.C.6, definitely the accused would have proved the same by examining the concerned postal authorities, but no such efforts have been made by the accused, therefore mere denial of the endorsement issued by the postal authority it cannot be held that, the endorsement issued by the postal authority as per Ex.C.6 is got created by the complainant.
16. Hence from the above documentary evidence clearly goes to show that, the accused was residing in the address mentioned in the legal notice and RPAD cover. The accused has not produced any documents to disprove his address as shown by the complainant, 16 in such circumstance it can be held that, the complainant has sent legal notice to the accused to his correct address and the said notice was came to be returned with an endorsement of "7 days absent, hence returned to sender". Therefore in view of non disputing of the address of the Accused in the summons and endorsements issued by the postal authorities on Ex.C.6 makes it clear that, the Accused has admitted that, the legal notice caused by the complainant to his correct address and sent through registered post, in such circumstances, it can be held that, the notice sent by the complainant to the correct address of the Accused is presumed to have been served on him U/s. 27 of General Clauses Act. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. Lingamma, wherein the Hon'ble High Court held that, "Notice sent at correct address returned unclaimed - is deemed to be served. In another decision reported in 1998 KAR 1841 in the case of Shridhar M.A. Vs. Metalloy Steel Corporation and 17 1999 Cri.L.J. 4606 "K. Bhaskaran Vs. Vaidhanbalan wherein the Hon'ble Apex Court was concerned with the question as to when the service of notice could be inferred and it was held that if there is an endorsement like 'not available in the house' 'house locked' 'shop closed' 'unclaimed' the service should be deemed to have been effected. It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s. Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, "notice sent by registered post with acknowledgement to a correct address service of notice has to be presumed". Therefore in view of the principles of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on him since in this case also the complainant has issued notice to the accused to his correct address through registered post and the said notice was returned with an endorsement of "7 days absent, hence returned to sender", hence the notice issued 18 by the complainant through registered post is held to be proper. In addition to that, it is relevant here to refer the decision reported in 2007 AIR SCW 3578 in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and another., wherein the Hon'ble Apex court held that " the drawer of the cheque is permitted to deposit the cheque amount within 15 days from the date of his appearance before the court in pursuance of the service of summons on him and in such situation, his defence of non service of the legal notice cannot be available to him'. Hence, in view of the said principles of law, even for sake of discussion, though there is no cogent and reliable documentary proof to substantiate the claim of the complainant with regard to address of the Accused to show there is due service of the legal notice on the Accused, in view of settled position of law by virtue of the above said decision of Hon'ble Apex Court of India, the Accused is not entitled to the technical defence of the alleged non service of the legal notice. Therefore, the argument convassed by the learned counsel for the accused that, the notice issued by the 19 complainant was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable and are not sustainable in law.
17. It is the specific defence of the Accused that, there was no monitory transaction between him and the complainant and has not issued the cheque in question towards the discharge of loan transaction in question and also denied the lending of loan amount of Rs.17 lakhs by the complainant. The accused has also disputed financial capacity of the complainant to lend the loan amount in question to the accused. The complainant in support of his oral evidence has produced statement of account pertaining to his bank for the period from 17.9.2015 to 17.9.2016 which is at Ex.C.8. The complainant has also produced the certified copies of the registered sale deeds dt:
29.5.2014, 27.11.2014, 22.2.2017, 31.10.2018 and also produced his I.T. returns documents for the assessment year 201617, 201718 and also filed certificate U/s.65(B) of Indian Evidence Act which are 20 marked at Ex.C.9 to C.17 respectively. The perusal of the Ex.C.8 it appears that, the complainant is having sufficient funds during the year 2015 in his bank account. It is true that, though the Ex.C.8 discloses that, during the year 2016, the complainant was not having sufficient funds in his bank account but the opening balance ie during the year 2015 discloses sufficient funds in the account and it is also seen that, the complainant had withdrawn the cash amount of Rs.10,34,385/ from his account during the year 2015 ie in the month of October 2015 which is at Ex.C.8(a). It is also seen from the Ex.C.9 to C.14 ie., the registered sale deeds wherein the properties belongs to the Joint family of the father of the complainant have been sold during the year 2014, 2017 and 2018. It is true that, the sale deed pertains to the year 2017 and 2018 are not taken relevant for consideration since the complainant alleged that, he has lend the loan amount to the accused in the 3 rd week of May 2016 but the sale deeds which are prior to the said date are taken into consideration to prove that, the complainant's father has sold properties. It is true that, the sale consideration amount shown in the 21 sale deeds is lesser than the amount lend by the complainant to the accused but only on that ground the entire claim of the complainant cannot be thrown out as the other documents produced by the complainant are also required to be taken into consideration to ascertain the financial capacity of the complainant. The complainant has also produced his I.T.returns documents pertains to the year 201617 and 201718, which are at Ex.C.15 and C.16, hence it goes to show that, the complainant was also an income tax payee during the year 2016 to 2018. The learned counsel for the accused during the course of cross examination has not disputed the Ex.C.8 to C.16 produced by the complainant. It is true that, at the first instance the complainant was not produced Ex.C.8 to C.16 and after the cross examination complainant has produced the said documents to prove his financial capacity but mere non production of the Ex.C.8 to C.16 at the first instance and producing the said documents after the cross examination of the complainant cannot be made as a ground for non consideration of Ex.C.8 to C.16 since the onus of proof proving the financial capacity shifted 22 on the complainant only after denial of the financial capacity of the complainant by the accused during the course of cross examination of the complainant, therefore the arguments canvassed by the learned counsel for the accused that, the complainant in order to fulfill the lacuna has filed the documents ie Ex.C.8 to C.16 after his crossexamination cannot be taken into consideration, therefore the documents produced by the complainant Ex.C.8 to C.16 are sufficient to hold that, during the year 201516 the complainant was having sufficient source of funds to lend the loan amount to the accused.
18. Apart from that, the learned counsel for the accused, has cross examined the complainant in length, but nothing has been elicited to discard or discredit the oral and documentary evidence of the complainant. The complainant/PW1 in his evidence has stated about his acquittance with the accused and also stated that, the accused is doing real estate business and later he joined in Sri. Ramana Constructions Basavanagudi, Bangalore and the accused himself suggested to the complainant that, he owned 50 to 60 acres of land in his native village at 23 Srinivasapura Taluk , hence it goes to show that, the accused is having capacity to repay the loan amount in question but it is suggested that, accused is having more than 30 lakhs income per annum, out of his landed property ie., Mango Crops and sufficient agricultural income , there was no necessity for him to seek for any financial assistance from the complainant but the complainant denied the suggestion and stated that, the accused approached him seeking for financial assistance for the purpose of his business necessities and there was such necessity for him at that time and even apart from that, the accused has not produced any documentary proof or evidence to show that, he was having income of more than Rs.30 lakhs per annum from his agricultural lands and there was no necessity for him to seek financial assistance , therefore the complainant has specifically stated the financial necessity of the accused to obtain the loan from him. The complainant has also stated that, he is doing business in the name of Silicon systems and the nature of business is security systems such as CC TVs, excess control, fire alarm system etc., and he is the proprietor of the said 24 concern having income of Rs.15 to 16 lakhs excluding expenditure from the said business same has been shown by the complainant in his I.T. returns document, therefore it goes to show that, the complainant is having business and also getting income from the said business. The complainant has also stated that, he has lent the loan amount to the accused in the month of May 2016 and has also stated how he has mobilized the funds to lend the loan amount to the accused. It is true that, the complainant stated that, he had received an amount of Rs.8 Lakhs from his father. The complainant has also stated that, at the request of the accused and faith on the accused he had advanced the loan of Rs.17 Lakhs to him without getting any documents towards security of the said loan amount and it is also true that, the complainant admitted that, the loan amount has to be transferred either by way of cheque or through bank, but mere paying the loan amount by way of cash cannot be construed as the complainant did not lend the loan amount in question. The complainant has also stated that, the handing over of the cheque in question to him on 10.7.2017 in his 25 office. The complainant has denied the suggestions made to him that, except the signature on the cheuqe the rest of the contents have been filled in by him and has filed this case against the accused and also denied the suggestions that, he has not lend any loan amount to the accused and the accused has not issued the cheque in question to him and has misused the cheque in question which was given to the uncle of the complainant and has filed this false case against the accused. Hence, on entire perusal of the cross examination of PW1 nothing has been elicited to believe the defence of the accused or discard the evidence of the complainant.
19. It is important to note here that, on careful perusal of the entire oral and documentary evidence produced by the complainant i.e Ex.C.1 to Ex.C.7 and admitted facts by the Accused, the complainant proved that the cheque in question belongs to the Accused i.e Ex.C.1 and signature found at Ex.C.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and it was dishonoured for the reason 26 of "Funds Insufficient" as per Ex.C.2 and thereafter the legal notice caused by him through RPAD as per Ex.C.3 was presumed to have been served on him as per entry made on Ex.C.6 and Accused has not given any reply to the legal notice, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initial presumptions are available in favour of the complainant U/s.118a and 139 of the N.I.Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even a presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused unless and until the said presumptions are rebutted by the Accused, even in the absence of documents produced 27 by the complainant with regard to loan transaction in question. In this regard it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139
- Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature - Criminal 28 Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque was his, statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability
- hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15032018 between ROHITBHAI JIVANLAL PATEL Vs STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that " When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were 29 not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, " Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer
- even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory 30 presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt". It is also held that, "the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented 31 , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability ". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated: 15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the cross examination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere 32 non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough". In another decision of Hon'ble Apex Court of India reported in ICL 2021(2) SC 529 in the case of M/s.Kalamani Tex Vs. P.Balasubramanian, dt: 10.02.2021, wherein the Hon'ble Apex Court held that, "once the accused had admitted his signatures on the cheque and deed, the trial court ought to have presumed that, the cheque was issued as consideration for legally enforceable debt." In another decision of Hon'ble Apex Court of Indian in Crl. Appeal No.132/2020 in the case of D. K. Chandel Vs. M/s Wockhardt (L) wherein it is held that, "Production of account books / cash book may be relevant in the civil court, may not be so in the criminal case filed under Sec.138 of N.I. Act while restoring the trial court judgments, the 33 High Court observed that "the reason given by the lower Appellate Court that, he did not bring the cash book or order book etc., could well be understood, if civil suit is tried." But may not be so in the criminal case filed under Sec.138 of N.I. Act. This is because of presumption raised in favour of holder of cheque. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and 34 High Court of Karnataka in the above decisions. In the present case also the complainant has complied mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to him and signature appearing on the cheque is that of his signature and even after service of the notice, the Accused has not given any reply or complied the terms of the notice, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act. Therefore, for the above said reasons the defence taken by the Accused that, the complainant has failed to prove that, he has lent an amount of Rs.17 lakhs to the accused and the accused the accused has issued the cheque in question towards discharge of the said loan amount cannot be acceptable one. The defence taken by the Accused appears to be the complainant has to prove his claim by producing evidence as if it is required for proving of his debt before the Civil Court, but same cannot be permissible in a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the 35 above referred decision, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question was drawn for consideration as the Accused has admitted the cheque in question belongs to him and signature found on the cheque in question is also that of his signature. Therefore for the above said reasons the arguments canvased by the learned counsel for the accused cannot be acceptable one and with dur respect of the principles of law laid down by the Hon'ble Apex court of India and High Court of Karnataka relied upon by the learned counsel for the accused are not applicable to the case on hand since the facts and circumstances of this case and facts and circumstances of the cases in the decisions relied upon by the learned counsel for the defence are not one and the same.
20. It is relevant here to mention that, it is the specific defence of the accused that, one Janakiram of Srinivasapura who is the fatherinlaw of the complainant had advanced a loan of Rs.3 Lakhs during the year 201112 at the instance of the 36 complainant and during that time at the instance of the complainant the said Janakiram had collected three blank signed cheques of the accused and out of the said cheques the fatherinlaw of the complainant filed this complaint through the complainant by making use of one of the cheque but the complainant has denied the suggestions made to him during the course of crossexamination. The accused except the said suggestions nothing has been produced before the court either by examining himself or by producing documentary evidence or by eliciting anything from the materials produced by the complainant, therefore only on the basis of mere suggestion it cannot be held that, the accused has given or handed over three blank signed cheques to the fatherinlaw of the complainant ie Janakiram at the time of borrowing of alleged loan amount of Rs.3 Lakhs from him that too the accused had given said blank signed cheques at the instance of complainant. If really the Accused had given the subject cheque and other cheques as blank signed cheques to the fatherinlaw of the complainant at the time of borrowing alleged loan amount of Rs.3 lakhs of the accused and thereafter 37 the fatherinlaw of the complainant by misusing one of the said cheque filed this complaint through the complainant definitely the Accused would have taken either civil or criminal action against the complainant or his fatherinlaw by issuing notice to them or by filing the complaint before the concerned police or filing the case before the competent courts of law or by issuing reply to the notice issued by the complainant or at least he would have issued stop payment instructions to the accused bank but no such efforts have been made by the Accused, in such circumstances the said unnatural conduct of the Accused for non initiation of legal action against the complainant or fatherinlaw of the complainant for getting return of his blank signed cheques, certainly may leads to draw an adverse inference against accused that, the cheque in question was issued to the complainant towards discharge of legally recoverable debt. In this regard, it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the 38 Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.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 in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt Conviction, Proper." Hence by applying the above principles of law to the present facts of the case in the present case though the Accused had taken defence that, the fatherinlaw of the complainant has collected his blank signed cheques at the time of lending the loan amount of Rs.3 lakhs to him, but the said defence has not been proved by the accused, under such circumstances, it 39 can be held that, the accused has not made any efforts to get return of the cheque in question alleged to has been given to fatherinlaw of the complainant for alleged loan amount lend by him, therefore, the said unnatural conduct of the accused in non taking of action may leads to draw an adverse inference against the accused that, the cheque in question issued by the accused towards discharge of the liability and presumption U/s.139 of N.I. Act would operate against him , as he has admitted signature and cheque in question is belongs to him.
21. It is also elicited in the crossexamination of the complainant that, he have been an Income tax Assessee since 7 to 8 years and has not declared the loan transaction in question in his I.T. returns of the concerned year, but only on the above admissions of the complainant, it cannot be held that, the transaction in question becomes invalidate. It is also important to note here that, whether non declaration of amount lent to the accused in Income tax returns that itself invalidates the transaction in question or not is to be taken into consideration. In this regard, it 40 is necessary here to refer the decision of our Hon'ble High court of Karnataka reported in 2019(1) Kar. L.R.185 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat in the said case the Hon'ble High Court of Karnataka held that " Negotiable Instruments Act, 1881 - Sections 138 and 139 - Endorsement 'payment stopped by drawer' - The trial court in the instant case, merely considered a suggestion made from the Accused side in the crossexamination of PW1 that the complainant was an income tax assessee and that he has not declared the alleged loan transaction in his returns and disbelieved the case of the complainant that too, ignoring that legal presumption under section 139 of the N.I. Act, was operating in favour of the complainant For these reasons, it has to be held that the complainant has beyond reasonable doubt proved the guilt of the Accused punishable under Section 138 of the N.I. Act. As such, the impugned judgment of acquittal passed by the trial court 41 deserves to be set aside and respondent/Accused is liable to be convicted for the offence punishable under Section 138 of the N.I. Act. Hence in view of the principles of law laid down by the Hon'ble High court of Karnataka in the above referred decision, in the present case the complainant has admitted that, he is an income tax assessee and has not declared the loan transaction in question in his I.T. returns, but as it is already held in the above that, the complainant has discharged her primary burden by complying the mandatory provisions of Sec.138 of N.I. Act, therefore it is for the accused to rebut the presumption existing infavour of the complainant U/s.139 of Negotiable Instruments Act. Apart from that, the admissions of the complainant with regard to non declaration of transaction in question in his I.T. Returns, could not by itself draw an adverse inference and to hold that, there was no existence of legally enforceable debt or the presumption as envisaged U/s.139 of N.I.Act is successfully rebutted by the accused. In another decision of Hon'ble Madhya Pradesh High Court decided in C.R.R No.5263/2018 dated: 7.3.2019 in the case of Smt. 42 Ragini Gupta Vs. Piyush Dutt Sharma Gwalior., wherein the Hon'ble High Court held that, "mere non filing of income tax return would not automatically dislodge the source of income of the complainant and non payment of income tax is a matter between the revenue and assessee and if the assessee has not disclosed his income in the income tax return, then the income tax department is well within its right to reopen the assessment of income of the assessee and to take action as per provisions of Income Tax Act, however non filing of income tax return by itself would not mean that, the complainant had no source of income and thus no adverse inference can be drawn in this regard only because of absence of income tax return". Hence in view of the principles of law laid down by Hon'ble High Court of Madya Pradesh in the above said decision in the present case also though the complainant has admitted that, he is an income tax assessee and has not declared the loan transaction in question in his I.T. returns that itself would not automatically 43 dislodge the source of income of the complainant. Therefore the admissions of the complainant which are elicited in his crossexamination are not helpful for the accused to prove his defence that, in view of non declaration of loan transaction in question in his income tax returns that itself sufficient to hold that, the complainant has no source of income cannot be acceptable one and the arguments canvassed by the learned counsel for the accused cannot be acceptable one and not sustainable in law.
22. It is suggested in the cross examination of the complainant by the accused that, the accused has given blank signed cheques to the fatherinlaw of the complainant namely Janakiram during the year 2011 12 while obtaining loan of Rs.3 Lakhs from him and the said cheques have been handed over to him at the instance of the complainant and except the signature in the disputed cheque the rest of the contents have been written by the complainant and has filed this false case against him, but the said suggestion were stoutly denied by the complainant, in such circumstances the heavy burden casted upon the accused to prove his defence but except the said 44 suggestions nothing has been produced before the court to prove the defence, therefore the defence of the accused cannot be acceptable one. However, it is admitted fact by the accused that, the cheque in question belongs to his account and signature found on the cheque in question ie Ex.C.1 (a) is that of his signature, in such circumstances also it can be held that, once signature on the negotiable instrument act is admitted, in that circumstances sec. 20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that " a reading of sec.20 of the act which is extracted above reveals that, the words used are ' either wholly blank or having written therein an incomplete negotiable instrument' . The instrument may be wholly blank or incomplete in a particular in 45 either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so vide that, the party so signing is bound to be a holder in due course. Promissory notes are often executed in the name of the payer and left unfilled to be afterwards filled by the actual holder, the object being to enable the owner to pass it off to another without incurring the responsibility as an endorser. Thus, it is seen that, person in possession of an incomplete instrument in maternal particulars has the authority prima facie to fill it and thus the executants becomes liable to pay the amount due'. In another decision of Hon'ble High Court of Madras reported in 2005 (1) DCR 85 in the case of P.A.Thamatharan Vs. Dalmia cements (B) Ltd., wherein it is held that " Negotiable Instrument Act 1991 - Sec. 138 - dishonour of cheque - plea - body of cheque was not written by Accused - held it is not mandatory and no law prescribes that, 46 the body of cheque should also be written by the signatory to the cheque, a cheque could be filled up anybody and if it is signed by the account holder of the cheque'. In another decision reported in 1996 Cri. L.J.3099( Guj) :1997 II Crimes : 1997 (I) CCR 603 wherein the Hon'ble High Court held that "no law provides that, in any case of any negotiable instrument entire body has to be written by maker or drawer only". It is further held that, " when a cheque is admittedly issued blank are incomplete and there is no dispute regarding the signature, it can be presumed that, there is an implied consent for filling up the cheque as when required by holder and get it encashed. Complaint of dishonour of such cheque cannot be held to be beyond the scope of penal provisions of Sec.138". In another decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that "
As long as signature on the cheque is admitted, 47 whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Appeal No.1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, 48 blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed 49 upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law of Hon'ble Apex court of India and also Hon'ble High Court of Karnataka and Madras referred above, in the present case the Accused has admitted the signature on Negotiable Instrument i.e. cheque and he also admitted issuance of the cheque, it is primafacie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or fabricated the cheque in question given by her and the defence of the Accused cannot be acceptable one as the instruments i.e., cheque in question cannot be rendered unenforceable merely because the contents have been filled by different ink, as it would not rendered such instrument illegal or 50 inadmissible, the complainant certainly can base action on it.
23. In addition to that, even for sake of discussion if it is assumed that, Accused has given cheque in question without mentioning the name of the payee, in such circumstances also it attracts the penal liability as contemplated U/s.138 of N.I. Act. In this regard, it is relevant here to refer decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble Apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of 51 presumed fact." In the present case though the Accused has denied the contents of the cheque in question except his signature but he did not proved his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I.Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden by complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh 52 Hudan and Anr. Wherein the Hon'ble Apex Court held that, "Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer
- even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In view of the principles of law laid down as above, even if it is admitted by the complainant that, he had written his name and date on the cheque in question in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the said cheque has been issued towards discharge of legally recoverable debt, therefore the defence of the accused that, except the 53 signature on the subject cheque and has not filled up the rest of the contents in it cannot be acceptable one and for the above said reasons the arguments canvassed by the learned counsel for the accused is not sustainable in law and are not accepted.
24. It is settled law that, the accused can rebut the presumption only on the basis of materials produced by the complainant even without entering into the witness box but in the present case the Accused has failed to substantiate his defence version in order to rebut the presumption available to the complainant and to prove the defense of the accused, under such circumstance, it is for the accused to disprove the case of the complainant or rebut the presumption then only the onus will be shifted on the complainant to prove his case. Admittedly the accused did not entered in to the witness box, therefore an adverse inference can be drawn against the accused that he has failed to rebut the presumption available to the complainant. Therefore it is clear that, except having denial of the case of the Complainant in the cross examination of complainant, the Accused has 54 not taken any interest so as to prove his defence. In this regard, it is relevant here to refer a decision of Hon'ble Apex Court of India reported in "AIR 2018 SC 3173 in a case of Kishan Rao Vs. Shankargouda"
wherein the Hon'ble Apex Court held that "
Negotiable Instruments Act (26 of 1881), Ss. 138, 139 Dishonour of cheque - Presumption as to - Accused issuing cheque of Rs.2 Lakhs towards repayment of loan to Complainant said cheque dishonoured on account of insufficiency of 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 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. In another decision decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein 55 the Hon'ble Apex Court held that, Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the 56 appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt. Therefore the principles of law laid down in the above decisions are aptly applicable to the case on hand, since in this case also the complainant proved the fact that he has paid a sum of Rs17 Lakhs to the accused in turn the accused, has issued cheque in question towards repayment of the alleged loan amount as per Ex.C.1. The accused has also failed to enter into witness box to rebut the statutory presumption in support of his defense in such circumstances the defense taken by the accused counsel during the course of crossexamination and argument cannot be acceptable one and with due respect to the principles of law laid down by the Hon'ble Apex Court of India in the decision relied upon by the learned counsel for the accused is not applicable to the defence of the accused in this case as facts and circumstances of the said case and facts and circumstances of the present case are not one and the same.
5725. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and he has failed to explain as to how his cheque has come to the possession of the Complainant, this would also give rise to an adverse inference against him. This preposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa". In another decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated:
19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava" held that, " the Accused has to explain how the cheque entered into the hands of complainant". Hence in the present case also the Accused has failed to explain how the cheque in question was entered into the hands of complainant.
Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
5826. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, he has lent a sum of Rs.17 lakhs to the accused as a hand loan and the accused in turn the accused has issued subject cheque to the complainant towards discharge of the said debt, thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Account closed"
and thereafter he got issued legal notice to the accused and the said notice was served on the Accused, inspite of it, the Accused did not repaid cheque amount, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available in favour of the complainant with regard to the existence of legally recoverable debt under Ex.C.1 Cheque. Therefore accused has committed an offence punishable U/s.138 of Negotiable Instrument Act, accordingly for the above said reasons this point 59 is answered in the Affirmative.
27. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following : ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.17,15,000/= (Rupees Seventeen Lakhs and Fifteen 60 Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (2) two months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.17,10,000/= (Rupees Seventeen Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 19h day of November 2021).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
61ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri.G.S.Madhu
2. List of documents exhibited on behalf of the Complainant: Ex.C.1 : Original Cheque;
Ex.C.1(a) : Signature of the Accused;
Ex.C.2 : Bank Memo;
Ex.C.3 : Office copy of the Legal Notice;
Ex.C.4 : Postal receipt
Ex.C.5 : Returned legal notice
Ex.C.6 : Postal Cover;
Ex.C.7 : Postal receipt
Ex.C.8 : Statement of accounts
Ex.C.8(a) Relevant entry
Ex.C.9 : Certified copy of the Sale deed dt: 29.5.2014
Ex.C.10 to certified copies of the three Sale deeds dt:
C.12 27.11.2014
Ex.C.13 certified copy of the sale deed dt: 22.2.2017
Ex.C.14 Certified copy of the sale deed dt:
30.10.2018
Ex.C.15 & I.T.Returns for the Assessment year 2016
17 and 201718
C.16
Application U/s.65(B)of Indian Evidence Ex.C.17 Act.
3. List of witness/s examined on behalf of the Accused: Nil 62
4. List of documents exhibited on behalf of the Accused: Nil (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
6319.11.2021 Case called out, Both complainant and accused and counsels for the Complainant and accused absent, No representation.
Judgment pronounced since the fine amount and default sentence is only imposed against the Accused, no separate sentence is imposed against the Accused vide separate order, ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.17,15,000/= (Rupees Seventeen Lakhs and Fifteen Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (2) two months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.17,10,000/= (Rupees Seventeen Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five 64 Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.