Bangalore District Court
Sri. Nagaraju M vs Smt. Lalitha Reddy on 31 January, 2019
IN THE COURT OF XXI ADDL.CHIEF METROPOLITON
MAGISTRATE, BENGALURU CITY
Present: Sri. V. NAGARAJA, B.A., LL.B.,
XXI Addl. Chief Metropolitan Magistrate,
Bengaluru.
Dated this the 31st day of January, 2019
C.C. No.22287/2017
COMPLAINANT: Sri. NAGARAJU M
S/o. Late. Munivenkatappa,
Aged about 62 years,
R/at. Chaldiganahalli Village & Post,
Srinivasapura Taluk,
Kolar District - 563 126.
(Reptd. By: SK., Advocate)
V/s.
ACCUSED: Smt. LALITHA REDDY,
W/o. A. Venkatarama Reddy,
Aged about 45 years,
R/at. Chaldiganahalli Village & Post,
Near Govt. Primary School,
Srinivasapura Taluk,
Kolar District - 563 126.
(Reptd. By KNS., Advocate)
:JUDGMENT:
Complainant has filed this complaint under Section 200 of Cr.P.C. r/w Section 138 of N.I. Act, seeking for penalizing the accused for the offence punishable under Section 138 of N.I. Act and also for awarding compensation to him.
2 C.C.No.22287/2017
2. Case of the complainant in a nutshell is that:
He and accused are family friends as well as residents of same village, whereas accused is Contractor by profession and doing Government Contract Works from several years, whereas complainant was earlier working in Kempe Gowda Bus station, Bengaluru City as Traffic Controller and he had retired from his services on 31.05.2015 thereby he received lakhs together retirement benefits. It is further averred that as accused is family friend, she approached him and requested for hand loan of Rs.4,00,000/- to meet her financial commitments. So, believing the words of the accused, on 05.11.2015, he paid Rs.4,00,000/- to the accused by way of cash and accused had agreed to repay the above said amount within two months. It is further averred that after expiry of two months, the complainant requested the accused to repay the above said loan amount, but accused went on postponing the same on one or other pretext. So, ultimately in the third week of June 2017, the accused in order to discharge the above said loan liability, she had issued him a cheque bearing No.0311795 dated 10.07.2017 for Rs.4,00,000/- drawn on State Bank of 3 C.C.No.22287/2017 Mysore, Kolar Branch, Kolar Town and assured to honour the said cheque. So, believing the words of accused, on 12.07.2017, he presented above said cheque through his banker i.e., Corporation Bank, S.C. Road, Bengaluru. But said cheque was dishonoured for the reason "Insufficient Funds" in the account of accused. So, the bank authorities issued endorsement dated 17.07.2017. So, he got issued legal notice dated 29.07.2017 through RPAD to accused regarding dishonour of cheque and calling upon the accused to pay cheque amount, whereas said notice has been duly served on accused on 02.08.2017, but accused has failed to pay the cheque amount. Hence, accused has committed offence punishable U/s.138 of NI Act. Hence, he is constrained to file this complaint seeking for penalizing the accused for the offence punishable under Section 138 of N.I. Act., and also seeking for awarding of compensation to him.
3. In pursuance of summons issued by this court, accused made appearance through her counsel and obtained bail and now she is on bail.
4. As these proceedings are summary in nature, substance of accusation read over and explained to 4 C.C.No.22287/2017 accused in language known to her whereas, she pleaded not guilty and claimed for trial.
5. In order to prove the case of the complainant, he has been examined as PW-1 and got documents marked Ex.P-1 to Ex.P-8. After completion of evidence of complainant, statement of accused as specified U/s.313 of Cr.P.C., has been recorded and she has been examined as DW-1 and got documents marked Ex.D-1 and Ex.D-11.
6. I have heard arguments of both learned counsels, where as learned counsel for accused also filed his written arguments.
7. Perused the records.
8. After perusal of records, the points arise for my consideration are:
1) Whether complainant proves beyond all reasonable doubt that accused in order to discharge her legally enforceable debt, she has issued him cheque bearing No.0311795 dated 10.07.2017 for Rs.4,00,000/- drawn on State Bank of Mysore, Kolar Branch, Kolar Town?
2) Whether complainant further proves that he has complied with mandatory requirements as specified under Section 138 of N.I. Act?
3) What Order?5 C.C.No.22287/2017
9. My findings on the above points are:
Point No.1 : In the Affirmative
Point No.2 : In the Affirmative
Point No.3 : As per final order,
for the following:
REASONS
10. Point No.1: As I have already stated, in order to prove the case of the complainant, he has been examined as PW-1 and he filed his examination-in-chief by way of affidavit by reiterating entire complaint averments as stated above. In support of his oral testimony, he relied upon Ex.P-1 to Ex.P-8.
11. On the other hand, accused has been examined as DW-1 and got documents marked Ex.D-1 and Ex.D-11.
12. Before appreciation of evidence of the parties, I am of the opinion, it is worth to note presumptions envisaged in N.I. Act as well as ratio laid down by the Hon'ble Apex Court in Three Judges Bench Judgment reported in (2010) 11 SCC 441 (Rangappa V/s. Sri Mohan) wherein it is held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a 6 C.C.No.22287/2017 legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent /complainant."
It is further held:
Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption.
13. So in the light of above presumptions and ratio decidendi laid down by Hon'ble Apex Court, if the present facts and situations are analyzed, it is obvious that according to complainant, accused has issued cheque for discharging of her loan liability. On the other hand, on considering the stand taken by the accused in her defence evidence, it is obvious that though she disputes her liability as claimed by complainant, but she is not disputing the facts that cheque is belonged to her account and it bears her signature. So, as I have already stated in view of ratio laid down by Hon'ble Apex court in the Judgments stated supra, that as soon as accused admits his signature on cheque, the mandatory presumption u/S 7 C.C.No.22287/2017 139 of N.I. Act comes to the aid of complainant and he can rest upon said presumption.
14. Whereas, learned counsel for defence argued that in order to raise presumption U/s.138 of NI Act, the condition precedent is that complainant must prove the existence of legally recoverable debt or liability, if he is able to prove the same, then only presumption can be raised otherwise not.
15. Having regard to the arguments of learned counsel for accused, it is important to note as I have already pointed out Hon'ble Three-Judges Bench Judgment of Hon'ble Supreme Court in Rangappa's case stated supra, it is clearly held:
"The presumption mandated by Section 139 includes a presumption that there exists a legally recoverable debt or liability"
16. So when above ratio clearly states that presumption includes existence of legally enforceable debt or liability then further proof of that fact is not required that too in summary proceedings. Because Hon'ble Apex Court in the judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets) has clearly observed that: 8 C.C.No.22287/2017
Presumption literally means "taking as true without examination or proof"
17. Moreover, it is well settled law that the prime object of presumptions are to minimize or to avoid the leading of unnecessary evidence. So, the mandatory presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is to say the cheque was not issued for consideration and in discharge of any debt or liability, in other words, onus shifts on the accused to rebut the said mandatory presumption raised in favour of complainant as observed by Hon'ble Apex Court in the Judgment reported in (2009)2 SCC 513 (Kumar Exports V/s. Sharma Carpets).
Now the crucial question arises as to whether accused is able to rebut the said presumption or not?
18. It is significant to note on considering the defence of the accused, she contended that complainant being her neighbour, he had taken lead as a elder person in her marriage negotiations and solemnization of her marriage. So, she had very confidence on him. So, in that confidence, she used to keep her valuable jewels and signed blank cheques in the house of complainant, 9 C.C.No.22287/2017 whereas complainant taking undue advantage of the situation, he had taken two or three her signed blank cheques and in order to grab money from her, he misused one of the cheques by filling up the contents for his convenience and filed this present false complaint. Hence, same is liable to be dismissed and she may be acquitted.
20. Having regard to the defence of the accused, it is worth to note ratio decidendi laid down Hon'ble Apex Court in very Rangappa V/s. Sri. Mohan's case, it is clearly observed that:
"A mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court"
21. At this juncture, it is worth to note ratio decidendi laid down by the Constitution Bench of Hon'ble Apex Court in the judgment reported in AIR 1964 SC 575 (Dhanvantrai Balwantrai Desai V/s. State of Maharashtra) which has been followed in the subsequent judgment reported in (2001)6 SCC 16 (Hiten P.Dalal V/s. Brathindranath Banerjee) wherein it is held that: 10 C.C.No.22287/2017
"That the distinction between the two kinds of presumption lay not only in the mandate to the court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "The burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation is offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible"
22. At this juncture, it also worth to note in another judgment of Hon'ble Apex Court reported in (2010)8 SCC 11 C.C.No.22287/2017 383 (Meghmala and others V/s. Narasimha Reddy and others) wherein it is held that:
"It is not like any other criminal case where the accused is presumed to be innocent unless the guilt is proved. The presumption of innocence is a human right, however, subject to the statutory exceptions, the said principle forms the basis of criminal jurisprudence. For this purpose, the nature of offence, its seriousness and gravity thereof has to be taken into consideration. Statutes like the Negotiable Instruments Act, 1881; the Prevention of Corruption Act, 1998; and the Terrorist and Disruptive Activities (Prevention) Act, 1987, provide for presumption of guilt if the circumstances provided in those statutes are found to be fulfilled and shift the burden of proof of innocence on the accused. Thus, the legislature has adopted a deviating course from ordinary criminal law shifting the burden on the accused to prove that he was not guilt"
23. So from the above ratio, it is crystal clear that proceedings U/s.138 of NI Act is not like any other criminal case where the accused is presumed to be innocent unless the guilt is proved. On the other hand the legislature has adopted a deviating course from ordinary 12 C.C.No.22287/2017 criminal law by shifting the burden on the accused to prove that he is not guilty. So, the accused must rebut the mandatory presumption by raising probable and acceptable defence to the satisfaction of the court, because the presumption raised in favour of complainant is mandatory presumption, but not general presumption.
24. In the light of above ratio decedendi, if the present facts and situations are analyzed, though the accused has contended that complainant has misused her signed blank cheques, which were kept in the house of complainant on confidence, but she has not placed any cogent and convincing evidence to prove that she had kept her signed blank cheques in the house of complainant and he misused her blank signed cheques. Hence, contention of the accused, cannot be believable and acceptable.
25. At this juncture, it is also worth to note the conduct of the accused that as per her contention, she used to keep her valuable jewels and signed blank cheques in the house of complainant and he has misused her signed blank cheques, then if at all complainant had misused her signed blank cheques, then she could have lodged police complaint or taken legal action against 13 C.C.No.22287/2017 complainant and even she could have given stop payment instructions to her banker. But, admittedly she has not done anything. So, under such circumstances, I am of the opinion, if at all accused had not issued present cheque for discharging of her legally enforceable debt, then definitely accused would have lodged police complaint or initiated legal proceedings or even she would have given stop payment instructions to her banker, because no prudent man will keep quite, when his cheques are misused by somebody else. So, non-taking of any action by the accused, creates doubt in the mind of the court regarding acceptance of her version that complainant has misused her signed blank cheque. Whereas, the documents produced by her i.e., Ex.D-1 to Ex.D-11 which are civil contract work related documents of accused and I.T. returns will not helpful to the above contention raised by accused. So, I come to clear conclusion that the defence raised by the accused is not probable and acceptable.
26. Coming to arguments of learned counsel for accused that complainant has filled up contents of the cheque with different handwriting and different ink for his convenience. So, said cheque is not valid cheque etc. 14 C.C.No.22287/2017
27. Having regard to the arguments of learned counsel for accused at this juncture, it is worth to note ratio laid down by Hon'ble Apex Court in the judgment reported in (2002)7 SCC 150 (P.K. Manmadhan Kartha V/s. Sanjeev Raj and another) wherein it is held that:
"Difference of handwriting and ink on the cheque did not rebut the statutory presumption U/s.139 and 118 of NI Act"
28. At this juncture it is also worth to note that view taken by Hon'ble High Court of Karnataka reported in ILR 2001 KAR 4127 (S.R. Muralidhar V/s. Ashok G.Y.) wherein it is held that:
Section 20 of NI Act - Inchoate stamped instruments "No law provides that in case of any negotiable instrument entire body has to be written by maker or drawer only. What is material is signature of drawer or maker and not the body writing hence question of body writing has no significance"
"It is not objectionable or illegal in law to receive a inchoate negotiate instrument duly singed 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 15 C.C.No.22287/2017 negotiable instrument issued and such transaction fully binds the maker of the Negotiable Instrument"
29. So, in the light of above principle if the present facts and situations are analyzed, as I have already pointed out accused is not disputing issuance of cheques and his signatures thereon. Under such circumstances, filling up body of the cheque by complainant or somebody else will not invalidate the cheque and that itself will not rebut the mandatory presumption raised in favour of complainant as observed by Hon'ble Apex Court in the judgment stated supra. Hence, I don't find any force in the arguments of learned counsel for accused.
30. As I have already pointed that Hon'ble Apex Court in the Constitution Bench and Larger Bench Judgments stated supra, it is clearly held that presumption envisaged U/s.138 of NI Act is not general presumption but it is mandatory presumption, so the said presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible". So, I come to clear conclusion that accused has utterly failed to rebut the mandatory presumption raised in favour of complainant. Hence, I hold this point in Affirmative. 16 C.C.No.22287/2017
31. Point No.2: As I have already discussed in point No.1 that accused has issued cheque for discharging of her legally recoverable debt. Whereas, on perusal of bank endorsement given by bank authority clearly reveal that complainant had presented the said cheque within validity period, but said cheque was dishonoured with endorsement "Funds Insufficient" in the account of accused. On perusal of Ex.P-3 which is legal notice issued to accused clearly reveal that the complainant got issued said demand notice to accused within specified time of 30 days from the date of receiving of endorsement from bank. On perusal of postal acknowledgement Ex.P-5, clearly reveals that the demand notice has been duly served to the address of the accused.
32. So on considering the oral coupled with the documentary evidence of the complainant, they clearly proved that complainant has complied with mandatory requirements as specified U/s.138(a) and (b) of N.I. Act. Whereas, accused has not paid the cheque amount within specified time, inspite of service of demand notice. Hence, accused has committed offence punishable U/s.138 of NI Act. Hence, I hold point No.2 in Affirmative. 17 C.C.No.22287/2017
33. Point No.3: For the foregoing reasons discussed on points No.1 and 2, I proceed to pass the following:-
ORDER Acting under Section 255(2) r/w 264 of Cr.P.C., the accused is hereby convicted for the offence punishable u/S.138 of Negotiable Instruments Act.
(V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
On considering the facts and circumstances of the case, accused is hereby sentenced to pay fine of Rs.4,05,000/- (Four Lakhs and Five Thousand only). In default he shall undergo simple imprisonment for a period of 3 (Three) months.
In view of Section 357 of Cr.P.C., complainant is entitled for compensation of Rs.4,00,000/- (Four Lakhs only) out of above said fine amount.
After collecting the above fine amount, office is directed to pay Rs.4,00,000/- (Four Lakhs only) to complainant as compensation and defray remaining fine amount of Rs.5,000/-
(Five Thousand only) to state, after appeal period is over.
However, accused shall execute personal bond of Rs.4,05,000/- in view of Sec.437(A) of Cr.P.C.
18 C.C.No.22287/2017The office is hereby directed to supply the copy of this Judgment to the accused on free of cost.
(Directly dictated to Stenographer on computer, computerized by him, corrected and then pronounced by me in the open court on this the 31st day of January, 2019) (V. NAGARAJA) XXI ADDL. C.M.M., BENGALURU.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW-1 : Nagaraju M LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P-1 : Cheque
Ex.P-2 : Bank Endorsement
Ex.P-3 : Copy of Legal Notice
Ex.P-4 : Postal Receipt
Ex.P-5 : Postal Acknowledgement Card
Ex.P-6 : Bank Pass Book
Ex.P-7 & 8 : Photos
LIST OF WITNESSES EXAMINED FOR THE DEFENCE:
DW-1 : Lalitha Reddy LIST OF DOCUMENTS MARKED FOR THE DEFENCE:
Ex.D-1 & 2 : Contract Certificate
Ex.D-3 : Identity Card
Ex.D-4 & 5 : I.T. Returns
Ex.D-6 : Contract Certificate
Ex.D-7 to 10: Photographs
Ex.P-11 : C.D.
(V. NAGARAJA)
XXI ADDL. C.M.M., BENGALURU.