Bangalore District Court
Sri.T.C. Sathish Kumar vs Jatti Automobiles on 28 September, 2021
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C.C.No..2871/2014 J
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 28th day of September, 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.2871/2014
Complainant : Sri.T.C. Sathish Kumar,
S/o. Late Channaveeraiah,
Hindu Aged 59 years,
R/at No.3456, I 'F' Cross,
7th Main Road,
Vijayanagar II Stage,
Near BMTC Depot,
Bangalore 40.
(By Sri.T. Seshagiri Rao., Adv.,)
Vs
Accused : 1. Jatti Automobiles,
by Proprietor D.B. Jatti,
Presently having office at
Dwarakamai ,
Pattandur Agrahara,
Sy.No.51, Outer Circle,
Behind St. Lourde's Church,
White Field,
Bangalore 66.
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C.C.No..2871/2014 J
2. Jatti Projects Inc.,
by Proprietor D.B. Jatti,
Presently having office at
Dwarakamai ,
Pattandur Agrahara,
Sy.No.51, Outer Circle,
Behind St. Lourde's Church,
White Field,
Bangalore 66.
3. Jatti Engineering India Pvt.
Ltd.,
by Executive Director,
Rani Dhanappa Jatti,
Presently having office at
Dwarakamai ,
Pattandur Agrahara,
Sy.No.51, Outer Circle,
Behind St. Lourde's Church,
White Field,
Bangalore 66.
(By Sri.Nagendra Prasad B.M., Adv.)
Case instituted : 28.09.2013
Offence : U/s 138 of N.I Act
complained of
Plea of Accused : Pleaded not guilty
Final Order : Accused No.1 and 2 are
Convicted and Accused No.3
Acquitted.
Date of order : 28.09.2021
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C.C.No..2871/2014 J
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, the Accused No.1, 2 and 3 have established business in Automobiles, marketing and in Engineering Field respectively and carrying business under the shelter by Jatti Family members and during the year 200708 the Accused raised loan from him and other persons for improving their business and in the said context the Accused No.1 raised a loan of Rs.1,50,000/ from him on 30.11.2007 and agreed to pay interest at 2% p.m. and for the said amount the Accused No.1 issued receipt with an undated cheque bearing No.157413 for corresponding amount drawn on Corporation Bank of High Way Junction, Devanahalli, Bangalore District. It is further contended by the complainant that, the Accused No.1 has also raised another sum of Rs. 1 Lakh from him on 30.1.2008 by agreeing to pay interest at 2% p.m. and also issued receipt for havign received the said amount and undated cheque 4 C.C.No..2871/2014 J cheque bearing No.150635 drawn on Corporation Bank of High Way Junction, Devanahalli, Bangalore District for the said amount of Rs.1 Lakh, and both cheques issued towards repayment of the said lent amount in future dates. It is further contended by the complainant that, the Accused raised additional loan of Rs.1 Lakh from him on 1.03.2008 in the name of 2nd Accused by agreeing to pay interest at 2% p.m. and for which 2 nd Accused issued receipt for the said amount to him and another loan amount of Rs.1,50,000/ was also raised by the 2 nd Accused from him on 1.4.2008 by agreeing to pay the interest at 2% p.m. for which 2 nd Accused issued receipt for lent amount of Rs.2,50,000/ and also issued a consolidated cheque bearing No. 073600 for Rs.2,50,000/ drawn on Syndicate Bank, Frazer Town branch towards repayment of the said amount dt: 1.3.2008 and 1.4.2008 in future date. It is further contended by the complainant that, in total he has paid an amount of Rs.5 Lakhs and the Accused have paid interest at 2% p.m. on the entire lent amount till end of November 2008 thereafter they postponed payment of interest and also lent amounts and on his 5 C.C.No..2871/2014 J demand the head of Jatti groups, B.V. Jatti on behalf of all the Accused, informed on 15.7.2009 admitting the repayment of entire lent amount of Rs.5 Lakhs along with interest remitting an amount of Rs.75,000/ through cheque bearing No.210033 on 10.3.2010 drawn on State Bank of India, St. Marks Road, issued by the 3 rd Accused and though he was assured of repayment of lent amount along with agreed interest in the short time, the Accused kept on seeking time after time, despite his reminders and for which he is very much upset and even the Accused did not responded to his telephone/mobile calls , therefore he has sent a letter dt: 24.7.2013 to the Accused intimating them for failed to repay the lent amount of Rs.5 Lakhs along with the balance interest amount accrued and he has no option except to fill the date, month and year as 12.8.2013 in the undated cheques of the Accused and to present the cheques through his bank account for encashment and on failure to encash the said cheques and pay the balance interest amount he would initiate proceedings against all Accused, for which the proprietor D.B .Jatti on behalf of all the 6 C.C.No..2871/2014 J Accused has sent a reply letter dt: 2.8.2013 requesting him not to present the cheques that he would clear the entire liability by selling his family properties etc., as the request of Accused he has waited but the Accused have failed to repay the cheque amount and interest thereon, he has presented the said cheques on 16.8.2013 for encashment through his account held in Nyaya Mitra Sahakara Bank Niyamita, H.O. Branch, Bengaluru, but all the three cheques dt: 16.8.2013 are bounced back without encashment as per endrosement dt:
20.8.2013 issued by the said bank as "Account Closed" and he has received endorsement on 21.8.2013. It is further contended by the complainant that, he being frustrated by all the assurance of the Accused has chosen to cause legal notice demanding for repayment of the lent amount along with accrued interest, accordingly on 2.9.2013 issued legal notice to the Accused and the respondent having receipt of said legal notice, they failed to comply his legitimate demands, thus the acts of Accused in issuing cheques without arranging funds in the bank account is a criminal offence 7 C.C.No..2871/2014 J committed by them U/s.138 of N.I. Act and they have violated the provisions of N.I.Act and are liable to be punished with sentence for the offences with fine and penalty, hence he has filed this complaint before this court against the Accused.
3. Before issuing process against the accused, the Complainant has filed his affidavitinlieu of his sworn statement along with the original documents in which, he has reiterated the averments made in the complaint.
4. Primafacie case has been made out against the accused No.1 to 3 and summons were issued against them, accused No.1 to 3 in turn have appeared before the court and got enlarged on bail and the substance of the accusation has been read over to them, to which they pleaded not guilty and claims to be tried.
5. Thereafter the complainant himself examined as PW.1 by filing his affidavit in lieu of oral evidence and in support of his evidence, has relied upon the documentary evidence as per P.1 to P.31, i.e, original receipt dt: 30.11.2007 as per Ex.P.1 and 8 C.C.No..2871/2014 J signature of the cashier and accused No.1 as per Ex.P.1(a) and P.1(b) respectively, Original Cheque dated: 12.08.2013 is as per Ex.P.2, Signature of the Proprietor of accused No.1 and 2 as per Ex.P.2(a), Original receipt dt: 30.1.2008 as per Ex.P.3 and Signature of the cashier and Proprietor of accused No.1 and 2 as per Ex.P.3(a) and P.3(b) respectively, Original Cheque dated: 12.8.2013 is as per Ex.P.4, Signature of the Proprietor of accused No.1 and 2 as per Ex.P.4(a), Original Cheque dated: 12.8.2013 is as per Ex.P.5, Signature of the Proprietor of accused No.1 and 2 as per Ex.P.5(a), Original receipts issued by Jatti Projects Inc., dt: 1.3.2008 as per Ex.P.6 and signature of the Proprietor of accused No.1 and 2 as per Ex.P.6(a), Original receipts issued by Jatti Projects Inc., dt: 1.4.2008 as per Ex.P.7 and Signature of the Proprietor of accused No.1 and 2 as per Ex.P.7(a), Letter issued by respondent No.1 ie., D.B.Jatti on behalf of Jatti projects Inc., dt:
15.7.2009 as per Ex.P.8 and Signature of Proprietor of accused No.1 and 2 as per Ex.P.8(a), Letter written by the complainant dt: 24.7.2013 as per Ex.P.9, postal acknowledgements as per Ex.P.10 to P.12 9 C.C.No..2871/2014 J respectively, Bank memos dt: 20.8.2013 marked as per Ex.P.13 to P.15 respectively, Bank challans marked as per Ex.P.16 to P.18 respectively, Letter written by accused No.1 and 2 dt: 2.8.2013 as per Ex.P.19 and signature of the Proprietor of accused No.1 and 2 as per Ex.P.19(a), RPAD Cover as per Ex.P.20 and postal receipt as per Ex.P.21, Copy of legal notice dt: 2.9.2013 as per Ex.P.22, Postal acknowledgement as per Ex.P.23 to P.25 respectively, Letter written by the complainant dt;24.8.2009 as per Ex.P.26, Postal receipt and acknowledgements as per Ex.P.27 and P.28 and RPAD cover as per Ex.P.29, postal receipt as per Ex.P.30 and Xerox copy of the cheque dt: 10.3.2020 as per Ex.P.31 and closed his side.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. Accused No.1 to 3 have denied the incriminating evidence appearing against them and have chosen to lead their rebuttal evidence subsequently the Accused No.1 and 3 have examined as DW.1 and Dw.2 and have not produced and documents and closed their side.10
C.C.No..2871/2014 J
7. Heard by learned counsel for the complainant and the Accused and the decision relied upon by the learned counsel for the complainant I.e
1) (2009) 4 SCC 197, 2) AIR 2010 SC 1898 and the learned counsel for the accused relied upon the decisions 1) Crl.Appeal No.2852/2018 decided on 28.4.2021 by Hon'ble High Court of Telangana, 2) Crl.L.P.No.492/2017 of Hon'ble High Court of Delhi dt: 24.9.2019.
8. On the basis of complaint, evidence of complainant and accused and documents the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued three cheques i.e. 1) cheque bearing No.157413 dt 12.8.2013 for Rs.1,50,000/ , 2) cheque bearing No.150635 dt: 12.8.2013 for Rs.1,00,000/, both cheques were drawn on drawn on Corporation bank, Ground Floor, Next to Jain Temple, High Way Junction, NH7, Devanahalli, Bangalore,
3) cheque bearing No.073600 dt:
12.8.2013 for Rs.2,50,000/ , drawn on Syndicate Bank, 23, Saunders Road, 11 C.C.No..2871/2014 J Frazer Town, Bangalore05 to discharge legally recoverable debt to the complainant and when the complainant have presented cheques for encashment through his banker but the said cheques have been dishonoured for the reasons "Account Closed" on 19.8.2013 and the complainant issued legal notice to the accused on 02.09.2013 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?
9. The above points are answered as under:
Point No.1: In the partly in 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 12 C.C.No..2871/2014 J 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:
1. 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 13 C.C.No..2871/2014 J 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 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 are 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.
14C.C.No..2871/2014 J
12. In the present case the complainant has examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire contents of the complaint. The complainant / PW.1 testified that, the Accused No.1, 2 and 3 have established business in Automobiles, marketing and in Engineering Field respectively and carrying business under the shelter by Jatti Family members and during the year 2007 08 the Accused raised loan from him and other persons for improving their business and in the said context the Accused No.1 raised a loan of Rs.1,50,000/ from him on 30.11.2007 and agreed to pay interest at 2% p.m. and for the said amount the Accused No.1 issued receipt with an undated cheque bearing No.157413 for corresponding amount drawn on Corporation Bank of High Way Junction, Devanahalli, Bangalore District. The complainant / PW.1 testified that, the Accused No.1 has also raised another sum of Rs. 1 Lakh from him on 30.1.2008 by agreeing to pay interest at 2% p.m. and also issued receipt for having received the said amount and undated cheque cheque bearing No.150635 drawn on Corporation Bank of High Way Junction, 15 C.C.No..2871/2014 J Devanahalli, Bangalore District for the said amount of Rs.1 Lakh, and both cheques issued towards repayment of the said lent amount in future dates. The complainant / PW.1 testified that, the Accused raised additional loan of Rs.1 Lakh from him on 1.03.2008 in the name of 2 nd Accused by agreeing to pay interest at 2% p.m. and for which 2 nd Accused issued receipt for the said amount to him and another loan amount of Rs.1,50,000/ was also raised by the 2nd Accused from him on 1.4.2008 by agreeing to pay the interest at 2% p.m. for which 2 nd Accused issued receipt for lent amount of Rs.2,50,000/ and also issued a consolidated cheque bearing No. 073600 for Rs.2,50,000/ drawn on Syndicate Bank, Frazer Town branch towards repayment of the said amount dt: 1.3.2008 and 1.4.2008 in future date. The complainant / PW.1 testified that, in total he has paid an amount of Rs.5 Lakhs and the Accused have paid interest at 2% p.m. on the entire lent amount till end of November 2008 thereafter they postponed payment of interest and also lent amounts and on his demand the head of Jatti groups, B.V. Jatti on behalf of all the Accused, 16 C.C.No..2871/2014 J informed on 15.7.2009 admitting the repayment of entire lent amount of Rs.5 Lakhs along with interest remitting an amount of Rs.75,000/ through cheque bearing No.210033 on 10.3.2010 drawn on State Bank of India, St. Marks Road, issued by the 3 rd Accused and though he was assured of repayment of lent amount along with agreed interest in the short time, the Accused kept on seeking time after time, despite his reminders and for which he is very much upset and even the Accused did not responded to his telephone/mobile calls, therefore he has sent a letter dt: 24.7.2013 to the Accused intimating them for failed to repay the lent amount of Rs.5 Lakhs along with the balance interest amount accrued and he has no option except to fill the date, month and year as 12.8.2013 in the undated cheques of the Accused and to present the cheques through his bank account for encashment and on failure to encash the said cheques and pay the balance interest amount he would initiate proceedings against all Accused, for which the proprietor D.B .Jatti on behalf of all the Accused has sent a reply letter dt: 2.8.2013 requesting him not to present the cheques that he 17 C.C.No..2871/2014 J would clear the entire liability by selling his family properties etc., as the request of Accused he has waited but the Accused have failed to repay the cheque amount and interest thereon, he has presented the said cheques on 16.8.2013 for encashment through his account held in Nyaya Mitra Sahakara Bank Niyamita, H.O. Branch, Bengaluru, but all the three cheques dt: 16.8.2013 are bounced back without encashment as per endrosement dt:
20.8.2013 issued by the said bank as "Account Closed" and he has received endorsement on 21.8.2013. The complainant / PW.1 testified that, he being frustrated by all the assurance of the Accused has chosen to cause legal notice demanding for repayment of the lent amount along with accrued interest, accordingly on 2.9.2013 issued legal notice to the Accused and the respondent having receipt of said legal notice, they failed to comply his legitimate demands.
13. In support of his evidence, P.W.1 has relied upon the documentary evidence as per P.1 to P.31, i.e, original receipt dt: 30.11.2007 as per Ex.P.1 and signature of the cashier and accused No.1 as per 18 C.C.No..2871/2014 J Ex.P.1(a) and P.1(b) respectively, Original Cheque dated: 12.08.2013 is as per Ex.P.2, Signature of the Proprietor of accused No.1 and 2 as per Ex.P.2(a), Original receipt dt: 30.1.2008 as per Ex.P.3 and signature of the cashier and Proprietor of accused No.1 and 2 as per Ex.P.3(a) and P.3(b) respectively, Original Cheque dated: 12.8.2013 is as per Ex.P.4, Signature of the Proprietor of accused No.1 and 2 as per Ex.P.4(a), Original Cheque dated: 12.8.2013 is as per Ex.P.5, Signature of the Proprietor of accused No.1 and 2 as per Ex.P.5(a) ,Original receipts issued by Jatti Projects Inc., dt: 1.3.2008 as per Ex.P.6 and signature of the Proprietor of accused No.1 and 2 as per Ex.P.6(a), Original receipts issued by Jatti Projects Inc., dt: 1.4.2008 as per Ex.P.7 and signature of the Proprietor of accused No.1 and 2 as per Ex.P.7(a), Letter issued by respondent No.1 ie., D.B.Jatti on behalf of Jatti projects Inc., dt:
15.7.2009 as per Ex.P.8 and signature of Proprietor of accused No.1 and 2 as per Ex.P.8(a), Letter written by the complainant dt: 24.7.2013 as per Ex.P.9, postal acknowledgements as per Ex.P.10 to P.12 respectively, Bank memos dt: 20.8.2013 marked as 19 C.C.No..2871/2014 J per Ex.P.13 to P.15 respectively, Bank challans marked as per Ex.P.16 to P.18 respectively, Letter written by respondent No.1 dt: 2.8.2013 as per Ex.P.19 and signature of the Proprietor of accused No.1 and 2 as per Ex.P.19(a), RPAD Cover as per Ex.P.20 and postal receipt as per Ex.P.21, Copy of legal notice dt: 2.9.2013 as per Ex.P.22, Postal acknowledgements as per Ex.P.23 to P.25 respectively, letter written by the complainant dt;24.8.2009 as per Ex.P.26, postal receipt and acknowledgement as per Ex.P.27 and P.28 and RPAD cover as per Ex.P.29, postal receipt as per Ex.P.30 and Xerox copy of the cheque dt: 10.3.2020 as per Ex.P.31.
14. In the present case, there is no dispute between the complainant and Accused No.1 to 3 with regard to their acquaintance. It is also not in dispute by the accused No. 1 that, the cheques in question ie Ex.P.2, P.4 and P.5 belongs to the account of accused No.1 and 2 proprietary concern and the Sri. D.B. Jatti is the proprietor of accused No.1 and 2 proprietory concern. It is also the signatures found at Ex.P.2 , P.4 and P.5 .2(a) are those of Proprietor of 20 C.C.No..2871/2014 J accused No.1 and 2. It is also not in dispute that, the cheques in question were presented for encashment within their validity period and the said cheques have been returned as dishonoured for the reason of "Account closed" as per the returned memos issued by the concerned bank i.e Ex.P.13 to P.15 respectively, hence as a matter on record it is proved by the complainant that, the cheques in question were dishonoured for the reason of Account closed.
15. The Accused No.1 to 3 during the course of cross examination of the complainant have disputed service of legal notice on them which is caused by the complainant. The complainant in order to prove the service of legal notice has produced copy of the legal notice dt: 2.9.2013, postal acknowledgements which are at Ex.P.22 to P.25 respectively. The perusal of Ex.P.22 to P.25 it appears that, the complainant has issued legal notice to the accused No.1 to 3 through RPAD within 30 days from the date of receipt of bank endorsements by calling upon them to pay the cheques amount along with accrued interest thereon within 2 weeks from the date of 21 C.C.No..2871/2014 J receipt of the notice failing which he will initiate legal action against them. It is also seen from Ex.P.23 to P. 25 that the said notice was sent to the respondent No.1 to 3 and the said notices were received by affixing signatures on the Ex.P.22 to P.25. It is relevant here to mention that, though the accused have denied the service of legal notice upon them but in their evidence have not denied the issuance of legal notice by the complainant as per Ex.P.22 and sent the same through RPAD as per Ex.P.23 to P.25 and service of legal notice upon them and have also not disputed the total acknowledgement and signatures found on them, therefore in view of non disputing the documentary evidence produced by the complainant, it can be held that, the accused have not disputed the Ex.P.22 to P.25. It is also relevant here to mention that, the accused have not disputed the address mentioned by the complainant in the legal notice and postal acknowledgments as not of their addresses or the addresses of accused No.1 to 3, Proprietory concern, therefore the accused have admitted that, the addresses mentioned in the legal notice and postal acknowledgement are the correct 22 C.C.No..2871/2014 J addresses of the accused No.1 to 3. Apart from that, the accused have not produced any documentary proof to show that, the address mentioned in Ex.P.22 to P.25 are not the correct address of the accused No.1 to 3 and as on the date of issuance of the notice the accused No. 1 to 3 proprietory concern are not carrying business in the said businesses, in such circumstances it can be held that, the complainant has proved that, the legal notice caused by him as per Ex.P.22 sent through RPAD as per ex.P.22 to P.25 to the correct address of the accused No.1 to 3 and in turn the said notice was received as per the signatures found at Ex.P.22 to P.25, though the accused have denied the signatures found at Ex.P.22 to P.25 are not their signatures but have not disputed the address mentioned in Ex.P.22 to P.25.
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. It is also relevant here to refer the 23 C.C.No..2871/2014 J 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. Hence the notice issued by the complainant through registered post is held to be proper. In addition to that, it is also 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 24 C.C.No..2871/2014 J 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 canvassed by the learned counsel for the accused that, the notice issued by the 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.
16. The accused No.1 to 3 have specifically denied that the complainant has lent the amount of Rs.1,50,000/ on 30.11.2007 and Rs.1,00,000/ on 30.1.2008, and Rs. 1,00,000/ on 1.3.2008 and Rs.1,50,000/ on 1.4.2008 to them and in turn they have agreed to repay the said amount along with interest at 2% p.a. and issuance of receipts and 25 C.C.No..2871/2014 J undated cheques towards lending of the said amounts by the complainant. In order to prove the claim of the complainant he has produced receipts issued by the respondent No.1 and 2 for having received the amount lent by him and also issued the cheques towards repayment of the said amounts has produced the original receipts and cheques which are marked as Ex.P.1 to P.7 respectively. The perusal of Ex.P.1 and P.3 it appears that, the accused No.1 proprietary concern has issued the said receipts dt:
30.11.2007 and 30.11.2008 for having receipt of Rs.1,50,000/ and Rs.1,00,000/ by way of cash respectively from the complainant and the Ex.P.1 and P.3 bears the signatures of the proprietor of accused No.1 which are at Ex.P.1(b) and 3(b). It is also seen from Ex.P.6 and P.7 it appears that, the accused No.2 proprietory concern representing its proprietory has issued the said receipts dt: 1.3.2008 and 1.4.2008 for having receipt of Rs.1,00,000/ and Rs.1,50,000/ by way of cash respectively from the complainant and the Ex.P.6 and P.7 bears the signatures of the proprietory of accused No.2 which are at Ex.P.6(a) and P.7(a). It is also relevant here to 26 C.C.No..2871/2014 J mention that, the proprietor of accused No.1 and 2 ie Sri. D.B. Jatti examined as DW.1 who in his cross examination has clearly admitted that, the receipts which are at Ex.P.1 ,P.3 and P.6 and P.7 are pertains to their proprietary concern and also admitted that, the signatures found at Ex.P.1(a), P.1(b), P.3(a), P.3(b), P.6(a) and P.7(a) are those of his signatures and he had signed to the Ex.P.1, P.3 P.6 and P.7 only after knowing the transactions in his proprietory concern. It is also relevant here to mention that, the DW.1 has categorically admitted that, an amount of Rs.1,50,000/ in Ex.P.1, an amount of Rs.1,00,000/ in Ex.P.3, an amount of Rs.1,00,000/ in Ex.P.6, an amount of Rs.1,50,000/ in Ex.P.7 are received from the complainant by his proprietory concern, but the DW.1 stated that, one Mr.Palanethra R.T.O, has deposited the said amounts and as he is a Government Servant on his request the Ex.P.1, P.3, P.6 and P.7 issued in the name of complainant but in order to belive the said fact the DW.1 has not produced any evidence except his oral say, therefore the accused No.1 and 2 have clearly admitted that, the complainant has lent an amount of 27 C.C.No..2871/2014 J Rs.1,50,000/ on 30.11.2007 and Rs.1,00,000/ on 30.1.2008, and Rs. 1,00,000/ on 1.3.2008 and Rs.1,50,000/ on 1.4.2008 to the accused No.1 and 2 proprietary concern and after receipt of the said amounts the accused No.1 and 2 have received receipts as per Ex.P.1, P.3 and P.6 and P.7 in favour of the complainant. Therefore the complainant has proved that, in total he has lent an amount of Rs.5 Lakhs to the respondent No.1 and 2 proprietory concern.
17. It is also relevant here to mention that, the complainant has produced a letter written by Sri. D.B. Jatti i.e., the proprietory of accused No.1 and 2 concern dt: 15.7.2009 in his name which is at Ex.P.8 and the DW.1 during the course of his cross examination has admitted that, he had written a letter as per Ex.P.8 to the complainant on 15.7.2009 and his signature is at Ex.P.8(a). On perusal of the Ex.P.8 it appears that, the proprietor of accused No.1 and 2 i.e. DW.1 has written the said letter to the complainant by admitting the fact of deposit of Rs.5 Lakhs by the complainant with the respondent No.1 and 2 and also stated that, he had paid Rs.88,000/ 28 C.C.No..2871/2014 J as interest till December 2008 and also agreed to return the principal amount within one year and requested not to present the cheques issued with regard to the said deposited amount which were given along with the receipts. Hence, on careful perusal of the Ex.P.8 and admitted facts by DW.1 makes it clear that, the proprietory of accused No.1 and 2 has admitted that the complainant has deposited an amount of Rs.5 Lakhs with the accused No.1 and 2 and he had also paid interest of Rs.88,000/ till December 2008, therefore the complainant has proved that, he has lent a total amount of rs.5 Lakhs to the respondent No.1 and 2 on different dates as stated by him in the complaint and evidence and in turn the Accused No.1 and 2 issued receipts for having received the said lent amount by the complainant as per Ex.P.1,P.3 and P.6 and P.7.
18. The complainant has also produced original cheques issued by the proprietor of respondent No.1 and 2, Proprietory concern which are at Ex.P.2, P.4, and P.5. It is the specific claim of the complainant that, the said cheques have been as undated cheques 29 C.C.No..2871/2014 J by mentioning his name and amounts and at the time of lending the amounts i.e., Ex.P.2 issued at the time of lending Rs.1,50,000/ on 30.11.2007 to the respondent No.1 and Ex.P.2 issued at the time of lending of Rs.1,00,000/ on 30.1.2008 to the respondent No.1 and Ex.P.5 was towards repayment of amount lend Rs. 1,00,000/ lent on 1.3.2008 and Rs.1,50,000/ lent on 1.4.2008 to the respondent No.2. On the other hand, though the respondent No.1 and 2 have denied the issuance of cheques ie Ex.P.2, P.4 and P.5 as claimed by the complainant but the DW.1 in his crossexamination has categorically admitted that, Ex.P.2, P.3 and P.5 cheques in question are belongs to the account of his proprietory concern and signatures found at Ex.P.2(a), P.3(a) and P.5(a) are those of his signatures and though he has denied the suggestion that the said cheques have been issued towards repayment of the lent amounts by the complainant but he has stated that, the said cheques have been given to the complainant as undated cheques towards security, but in order to prove the fact that, the cheques in question have been issued towards security, the 30 C.C.No..2871/2014 J accused have not produced any oral or documentary evidence, therefore in the absence of such material evidence it can be held that the proprietor of the accused No.1 and 2 proprietory concern has issued undated cheques by filling the name, amounts in the words and figure and by affixing the signatures on the cheques in the name of complainant. In addition to that, it is also seen from the Ex.P.8 that, the proprietor of accused No.1 and 2 i.e. DW.1 has written the said letter to the complainant by admitting the deposit of Rs.5 Lakhs by the complainant with the respondent No.1 and 2 and also admitted that, he had paid Rs.88,000/ as interest till December 2008 and also agreed to return the principal amount within one year and requested not to present the cheques issued with regard to the deposited amount which were given along with the receipts. Hence, in view of the admitted facts by the Dw.1 in his crossexamination makes it clear that, the proprietor of accused No.1 and 2 proprietor concern has issued undated cheques by filling the name of the complainant and amounts at the time of receiving of amounts by the 31 C.C.No..2871/2014 J complainant ie., at the time of lending the amounts ie., Ex.P.2 was issued at the time of lending Rs.1,50,000/ on 30.11.2007 to the respondent No.1 and Ex.P.2 issued at the time of lending of Rs.1,00,000/ on 30.1.2008 to the respondent No.1 and Ex.P.5 was towards repayment of amount lend Rs. 1,00,000/ lent on 1.3.2008 and Rs.1,50,000/ lent on 1.4.2008 to the respondent No.2 by the complainant.
19. It is also the specific claim of the complainant that, in total an amount of Rs.5 Lakhs was lent by him to the respondents ad for which they paid interest at 2% p.m. on the said amount till November 2008, thereafter they have postponed the payment of interest and also to re pay the lent amount, thereafter upon his demand made, the head of Jatti Groups i.e., D.B. Jatti on behalf of all the respondents informed him through a letter dt;15.7.2009 admitting repayment of the entire lent amount in future date with interest and paid Rs.75,000/ through cheque bearing no. 210033 dt:
10.3.2010 drawn on State Bank of India, St. Marks Road, ie issued by respondent No.3, but thereafter 32 C.C.No..2871/2014 J despite of his reminders the respondents did not pay the interest or repay the lent amount, thereafter he got issued a letter dt: 24.7.2013 to the respondents intimating them to repay the lent amount of Rs.5 Lakhs along with the balance interest accrued and failure to pay the said sum he have to fill the date, month and year as 12.8.2013 on the undated cheques and present the same to his bank account if the failure of the respondent in payment of lent amount and interest he would initiate proceedings against them, for that, the proprietor of respondent No.1 and 2 on behalf of all the respondents has sent a reply letter dt: 2.8.2013 requesting him not to present the cheuqes by appraising that, they would pay the entire amount by selling the properties but the respondents have not paid the amount and interest, hence he has presented the said cheques dt: 12.8.2013 on 16.8.2013 through his account and the said cheques have been returned without encashment as per the endorsement dt: 20.8.2013 as "Account Closed" and thereafter he caused a legal notice dt: 2.9.2013 to the respondent by demanding to pay the lent amount along with balance interest 33 C.C.No..2871/2014 J though they have received the notice but failed to comply his demand. In order to substantiate the oral evidence complainant has produced the letter dt:15.7.2009 which is at Ex.P.8 and letter dt: 24.7.2013 which is at Ex.P.9 and postal acknowledgements which are at Ex.P.10 to P.12, letter dt:2.8.2013 issued by Propreitor of Respondent No.1 and 2 which is at Ex.P.19, RPAD cover and postal receipts which are at Ex.P.20 and P.21, Xerox copy of the cheque bearing no.210033 which is at Ex.P.31.20. The proprietor of accused No.1 and 2
proprietory concern ie DW.1 in his cross examination has admitted the letter issued by him to the complainant as per Ex.P.8 and letter written by the complainant as per Ex.P.9 and also letter issued by him as per Ex.P.19 to the complainant, therefore there is no dispute with regard to issuance of letter by DW.1 to the complainant as per Ex.P.8 and P.19 and he has also admitted his signatures on Ex.P.8 and P.19 found at Ex.P.8(a) and P.19(a). On careful perusal of the Ex.P. 8 it appears that, the proprietor of accused No.1 and 2 admitted the 34 C.C.No..2871/2014 J deposit of Rs.5 Lakhs by the complainant with the respondent No.1 and 2 and also admitted that, he has paid interest of Rs.88,000/ till December 2008 and also admitted the issuance of undated cheques at the time of receipt of the amounts from the complainant. It is also seen from the Ex.P.9 that, the complainant has intimated the respondent No.1 to 3 that for having failed to repay the lent amount of Rs.5 Lakhs along with the balance interest amount accrued, has no option except to fill the date month and year as 12.8.2013 in the undated cheques issued by them and present the said cheques through his account for encashment and also intimated that, on failure to encash the said cheques amount and pay the lent amount and balance interest he would initiate proceedings U/s.138(a) against the respondents i.e., on bouncing of the cheques. It is also seen from Ex.P.19 that, the proprietor of accused No.1 and 2 concern has issued reply to the Ex.P.9 letter written by the complainant and in the said reply the proprietor of accused No.1 and 2 has admitted about information of giving option for filling date, month and year as 12.08.2013 35 C.C.No..2871/2014 J in the undated cheuqes and to present the undated chques for encashment and also requested not to present the cheques for encashment as he will clear the existing liabilities at the earliest. Hence, on the basis of Ex.P.8 P.9 and P.19 it can be held that, the respondent No.1 and 2 have failed to repay the amount of Rs.5 Lakhs lent/deposited by the complainant with the respondent No.1 and 2 and also failed to pay the interest after December 2008, therefore the proprietor of accused No.1 and 2 issued letter to the complainant by admitting the repayment of the entire lent amount of rs.5 Lakhs and interest in future dates and thereafter failure to pay the said amount and interest the complainant was forced to write a letter to the respondent No. 1 to 3 as per Ex.P.9 by intimating for presentation of the undated cheques which were issued by the respondent No.1 and 2 in his name by filling the date, month and year as 12.8.2013 and even after intimating the same, inspite of that, the proprietor of respondent No.1 and 2 requested not to present the cheques but has admitted the due of lent amount and interest to the complainant and promised to clear the said liability 36 C.C.No..2871/2014 J but has not cleared the same, therefore the complainant was forced to present the cheques in question ie Ex.P.2,4 and P.5 through his bank account on 16.8.2013 as per Ex.P.16 to P.18, but the said cheques have been dishonoured for the reason of "Account Closed" as per Ex.P.13 to P.15 and thereafter the complainant as per Ex.P.22 got issued legal notice on 2.9.2013 and the same was served on the respondent No.1 to 3 as per Ex.P.22 to P.25, despite of it they did not comply the demand made by the complainant in the notice.
21. It is also relevant here to mention that, the learned counsel for the accused during the course of argument has vehemently argued that, the complainant has not produced any documents to prove source of income to deposit the amount and has not produced a single piece of paper to show his financial capacity to deposit Rs.5 Lakhs with the respondents. The proprietor of accused No.1 and 2 has also in his evidence reiterated the same facts ie., complainant has not produced any document to show his financial capacity. The defence of the accused and arguments canvassed by the learned 37 C.C.No..2871/2014 J counsel for the accused cannot be acceptable one for the simple reason that, the proprietory of accused No.1 and 2 ie. DW.1 in his crossexamination has clearly admitted that, Ex.P.1, P.3 and P.6.P..7 receipts have been issued in favour of the complainant by mentioning the receipt of amounts mentioned therein and also issuance of cheques ie Ex.P.2, P.4 and P.5 infavour of the complainant and also admitted in Ex.P.8 deposit of Rs.5 Lakhs by the complainant and payment of interest of Rs.88,000/ in the name of complainant and also made requests as per Ex.P.8 and P.19 not to present the cheques in question as he is intending to clearoff the entire liability due to the complainant. Therefore in view of categorical admissions by the proprietor of accused No.1 and 2 ie DW.1 with regard to deposit/lending of Rs.5 Lakhs by the complainant with the respondent No.1 and 2 he cannot be permitted to take defence that, complainant has not produced any document to show his source of income to deposit Rs.5 Lakhs with the respondents.
22. Apart from that, as it is already held in the above that, the complainant has proved that, the 38 C.C.No..2871/2014 J cheques in question belongs to the account of accused No.1 and 2 and signatures found on the cheques in question I.e Ex.P.2 and P.4 and P.5 at Ex.P.2(a), 4(a) and P.5(a) are those of the signatures of the proprietor of accused No.1 and 2 and the said cheques have been presented through the account of the complainant for encashment within their validity period and same have been dishonoured for the reason of Account closed as per Ex.P.13 to P.15 and thereafter the complainant got issued legal notice to the accused NO.1 to 3 as per Ex.P.22 and same was served on the accused No.1 to 3 as per Ex.P.23 to P.25 but the accused have not given any reply to the said notice, in such circumstances an initial presumptions can be drawn U/s.118(a) and 139 of N.I.Act with regard to legally recoverable debt and also existence of liability in question and the said presumption also extends to the passing of consideration. 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 39 C.C.No..2871/2014 J 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 an 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 Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque is statutory presumption under S.139 comes into play and the same was not rebutted even with regard to 40 C.C.No..2871/2014 J 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 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 41 C.C.No..2871/2014 J 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.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 42 C.C.No..2871/2014 J 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 , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the 43 C.C.No..2871/2014 J 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 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 44 C.C.No..2871/2014 J 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 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 45 C.C.No..2871/2014 J 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 High Court of Karnataka in the above decisions. In the present case also the complainant has complied the mandatory requirements and has proved that, the Proprietor of Accused No.1 and 2 has issued the cheques in question in his favour and the proprietor of Accused No.1 and 2 ie. DW.1 has admitted the cheques belongs to the account of accused No.1 and 2 proprietory concern and also admitted his signatures on the cheques are those of his signatures and complainant has proved that the legal notice issued by him was served on the Accused No.1 to 3 in such circumstances, presumptions have to be drawn even towards existence of liability in question as per Sec.118a and 139 of N.I.Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheques in question were not issued either to the 46 C.C.No..2871/2014 J complainant's concern or towards discharge of any liability in question 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 the said presumption can be drawn to the extent of existence of liability in question against the Accused, unless and until the said presumptions are rebutted by the Accused even though the documents are not produced by the complainant with regard to liability in question. Therefore in view of the above said reasons the arguments canvassed by the learned counsel for the accused are not sustainable and acceptable one and with due respect to the principles of law laid down by the Hon'ble Apex Court of India and Hon'ble High court of Delhi in the decisions relied upon by the learned counsel for the accused are not applicable to the defence of the accused.
23. It is also relevant here to mention that, the learned counsel for the accused during the course of cross examination of the complainant has much 47 C.C.No..2871/2014 J more cross examination on the point of non production of Income tax returns documents and non declaration of transaction in question in the Income tax returns of the complainant. It is true that, the complainant has not produced his I.T. Returns pertaining to the year 200708 and 200809 but has stated that, he has submitted his returns during the said period through his Chartered Accountant by name Sri.Ananda Murthy and he had contacted his son in turn his son informed him that, his father has undergone surgery at Hyderabad and who is on treatment and also informed him that, if the documents were given to his father in turn his father has submitted the same to the Income tax Department, even though the documents were not submitted to the Income Tax Department, now also he can submit the same to the income tax department. The complainant has also stated that, after verifying the income tax returns he would say as to whether he has declared the transaction in question in his Income tax returns. Therefore the reasons assigned by the complainant for non production of his I.T. returns in this case may be 48 C.C.No..2871/2014 J acceptable one as the proprietor of accused No.1 and 2 himself admitted that, the receipts i.e., Ex.P.1, 3, 6 and P.7 have been issued to the complainant aftr having receipt of the amount lent by the complainant and also admitted the receipt of Rs.5 Lakhs from the complainant in Ex.P.8 and P.19, in such circumstances though the complainant has not produced the Income Tax returns documents is not fatal to the claim made by the complainant in this case. Even though the complainant has admitted that, he is an Income Tax Assessee and has submitted his I.T. returns during the year 200708, 200809 and declared about lending of the amounts to the accused in his I.T. returns during the year 200708 and 200809 and has not produced I.T. return documents before the court, but only on the said 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 production of Income tax returns that itself invalidates the transaction in question or not is to be taken into consideration. In this regard, it is necessary here to refer the decision of our Hon'ble 49 C.C.No..2871/2014 J 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 deserves to be set aside and 50 C.C.No..2871/2014 J 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 he has declared the transaction in question in his I.T. returns, but has not produced the documents, however, as it is already held in the above that, the complainant has discharged his 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 production of 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 51 C.C.No..2871/2014 J Smt. 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 declared the transaction in question in his I.T. returns but has not produced the 52 C.C.No..2871/2014 J same before the court, that itself would not automatically dislodge the source of income of the complainant. Therefore the admissions of the complainant which are elicited in his cross examination are not helpful for the accused to prove their defence that, in view of non production of income tax returns documents, by the complainant that itself sufficient to hold that, the complainant has failed to prove the transaction in question cannot be acceptable one. With due respect to the principles of law laid down in the decision relied upon by the learned counsel for the accused decided in Crl. Appeal No.2852/2018 dt: 28.04.2021 are not applicable to the defence of the accused in this case as the facts and circumstances of this case and facts and circumstances of the decided case relied upon by the learned counsel for the accused are not one and the same.
24. In order to rebut the presumption available to the complainant, the proprietor of the accused No. 1 and 2 proprietory concern examined as DW.1 by filing his affidavit evidence and the DW.1 stated that, he is the proprietor of accused No.1 and 2 53 C.C.No..2871/2014 J proprietary concern and they were running sales and service of two wheelers in the said premises and used to end to end RTO formalities paying the road tax, registration of vehicle and delivery of the same and used to charge a consolidated amount of Rs.2,000/ to complete RTO formalities and deliver vehicles to the respective customers and on any given day they used to sell about 20 to 25 two wheelers and complete the RTO formalities in a day or two and vehicle was delivered with full proof of registration certificate. It is also stated by DW.1 that, they were very closely connected with RTO officials to carryout the process of registration and formalities and one such RTO official Mr. Palanetra a close relative of the complainant had deposited some amount with them and he came to us along with the complainant in the year 2007 and requested to raise receipt in the name of T.C. Sathish Kumar for Rs.1,50,000/ on his behalf and requested them to destroy the receipt which was in his name as he did not want to record of the deposit of money in his name since he was a State Govt. Employee. The accused/DW.1 has also stated that, as per the request they issued Ex.P.1 in 54 C.C.No..2871/2014 J the name of T.C. Satish Kumar dt: 30.11.2007 and mentioned towards account and also issued undated cheque towards security purpose for an amount of Rs.1,50,000/, likewise the registration of the vehicle used to take place on the regular basis and the consolidated incidental expenses of RTO official which was accumulated in their office with respect to the RTO officer i.e., Mr. Palanetra were duly informed once in every three months and the said Palanetra used to visit their office to collect the receipt in the name of T.C. Satish Kumar with a consolidated undated cheque in the complainant's name, like wise Ex.P.3 receipt, Ex.P.4 cheque, Ex.P.5 cheque, Ex.P.6 and P.7 receipts came to be issued in the name of T.C. Satish Kumar on the request of RTO officer Mr. Palanetra and all the cheques were undated cheques and all the receipts mentioned as towards account or towards deposit and nowhere it is mentioned as loan towards the accused firm and the complainant has not deposited any amount with them at any point of time.
25. On careful perusal of the oral evidence of the DW.1 makes it clear that, they have issued 55 C.C.No..2871/2014 J Ex.P.1, P.3 P.6 and P.7 receipts in the name of complainant and also issued undated cheques towards security purpose of the said amounts i.e., the consolidated amount is that of the expenses incurred towards RTO officer Mr.Palanetra to process the registration of the vehicles and the said receipts have been raised in the name of complainant at the request of RTO Mr.Palanetra on his behalf as he was a State Govt. Employee, but in order to believe the defence of the DW.1 except the self serving statements ie oral evidence nothing has been produced before the court, therefore only on the basis of oral evidence of the DW.1 it cannot be held that, Ex.P.1 to P.7 i.e., receipts and cheques issued by the DW.1 only towards the consolidated amount i.e., the expenses incurred towards RTO officer Mr.Palanetra to process the registration of the vehicles. Even the DW.1 has not produced single piece of paper to prove his defence with regard to registration of vehicles and delivery of vehicles and they used to complete the RTO formalities and to deliver the vehicles to the customers and even have not produced the documents to show that, they were 56 C.C.No..2871/2014 J running sales and service of two wheelers as contended by him in the evidence, therefore the oral evidence of DW.1 remained as allegations against the complainant but not supported by any documentary evidence.
26. Apart from that, the respondents have not examined the then RTO Mr. Palanetra to prove their defence that, he used to visit along with the complainant and requested to raise the receipts and issued undated cheques in the name of complainant and the said Palanetra used to visit their office once in threes months to collect the receipts and undated cheques in the name of T.C. Sathish Kumar i.e. the Complainant, therefore an adverse inference can be drawn against the respondents that, for the best reasons known to them they have not examined the said RTO Mr. Palanetra and have intentionally withheld the material witness from his examination before the court, in such circumstances it can be held that, in order to evade liability to pay the cheques amount to the complainant the respondents have not examined the material witness to prove their defence, therefore the evidence of DW.1 is not 57 C.C.No..2871/2014 J satisfactory to hold that, the Ex.P.1 to P.7 receipts and cheques have been issued in the name of complainant not towards deposit of the amount by him but same have been issued towards the consolidated amount ie., expenses incurred towards RTO officer Mr.Palanetra to process the registration of the vehicle unhindered as contended by DW.1 in his evidence.
27. It is the specific defence of the accused No.1 to 3 that, the cheques in question ie. Ex.P.2 P.4 and P.5 have been issued as undated cheques towards security for the consolidated amount ie expenses incurred towards RTO officer Mr. Palanetra to process the registration of the vehicles and at the request of Mr. Palanetra the said undated cheques have been issued in the name of complainant but they were not issued towards repayment of the loan amount as claimed by the complainant. As it is already held in the above that, the accused NO.1 to 3 have miserably failed to prove that, the cheques in question have been issued as undated towards security for the consolidated amount ie expenses towards RTO Officer Mr. Palanetra and issued at his 58 C.C.No..2871/2014 J request in the name of complainant. On the other hand, as it is already held in the above that, due to nonpayment of the lent amount and interest amount to the complainant by the accused, the complainant has issued a letter ie Ex.P. 9 by intimating the respondent about filling the date, month and year as 12.8.2013 in the cheques issued by the respondents and also intimated them to present the cheques through his account and requested to make the said cheques to honour and also intimated failure to encash the cheques he will initiate the proceedings against them and after receipt of the said letter the DW.1 i.e., the proprietor of accused No.1 and 2 has also issued reply as per Ex.P.19, hence the respondents have issued undated cheques in favour of the complainant and the complainant after intimating to the respondents has filled the date, month and year and has presented the said cheques for enashment. Even for sake of discussion if it is assumed that, the accused have given undated cheques to the complainant but the DW.1 has admitted his signatures on the cheques in question and issue of cheques to the complainant, therefore 59 C.C.No..2871/2014 J 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/she 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 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 60 C.C.No..2871/2014 J 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, 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 of Hon'ble Apex court to India reported in (2002) 7 SCC in the case 61 C.C.No..2871/2014 J of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, 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 62 C.C.No..2871/2014 J 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, 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 63 C.C.No..2871/2014 J 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 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 laid down by Hon'ble Apex court of India and also Hon'ble High Court of Karnataka referred above and in the present case also the proprietor of Accused No.1 and 2 concern has admitted his signatures on Negotiable Instrument i.e. cheques and he also admitted issuance of the cheques to the complainant, 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 64 C.C.No..2871/2014 J mouth of the Accused No. 1 to 3 that, the complainant had misused or fabricated the cheques in question given by them and the defence of the Accused cannot be acceptable one as the instrument i.e., cheques in question cannot be rendered unenforceable merely because the date, month and year filled by the complainant as 12.08.2013 it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it. Therefore for the above said reasons the arguments canvassed by the learned counsel for the accused are not acceptable one.
28. it is also the specific defence of the accused that, the cheques in question have been issued as undated towards security of the consolidated amount ie expenses towards RTO officer Mr. Palanetra to process the registration of the vehicles but not towards repayment of the amount lent by the complainant as claimed by him, and the cheques in question have been issued to the complainant at the request of Mr. Palanetra. Therefore there is no liability towards the accused to pay the cheques amount to the complainant. As it is 65 C.C.No..2871/2014 J already held in the above that, the accused have miserably failed to prove their defence either by producing the documents or by examining the RTO Mr. palanetra. Even for sake of discussion if it is assumed that, Accused have given cheques in question without mentioning the name of the payee and date, to the complainant 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 66 C.C.No..2871/2014 J reasonable plausibility of non existence of presumed fact." In the present case though the Accused have denied the date mentioned on the cheques in question except signatures of DW.1 but they did not proved their 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 67 C.C.No..2871/2014 J 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. In view of the principles of law laid down as above, even if it is assumed that, the complainant has written date, month and year on the cheques 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 cheques in question and it can be 68 C.C.No..2871/2014 J presumed that, the said cheques have been issued towards discharge of legally recoverable debt. It is also relevant here to refer the decision of Hon'ble Apex court held in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " (a) Negotiable Instrument Act 1881 - S.138 - If on the date of the cheque liability or debt exist or the amount has become legally recoverable S.138 will apply
- not otherwise". In another decision of Hon'ble High Court of Bombay decided in CRMM No.2607/2018 (O & M) dated: 27.8.2019 in the case of Kailash vati Vs. M/s. Ludhiyana Beverages., wherein the Hon'ble High Court held that " A. Negotiable Instrument Act 1881 - S.138 and 6 - Dishonour of cheque date of drawn - Determination of - The date on which the cheque is drawn has to be with reference to the date mentioned in the column in the cheque and not the date on which it was signed Date when the 69 C.C.No..2871/2014 J cheque is drawn is not defined in the act - If date of singing cheque is accepted then all post dated cheques cannot be treated as valid cheques within and drawer of cheques would stand absolved from criminal prosecution if cheques are presented after three months of the date on which signature were appended". Hence in view of the principles of law laid down by the Hon'ble Apex Court of India, it can be held that, the liability of the debt existed as on the date mentioned on the cheque not as on the date of signature on the cheque, even for sake of discussion the arguments canvassed by the learned counsel for the Accused taken into consideration but in view of the principles of law laid down by the Hon'ble Apex Court and High Court of Bombay it is to be considered that the date on which cheques were drawn has to be with reference to the date mentioned in the cheques but not the date on which they were signed, therefore the arguments canvassed by the learned counsel for the defence cannot be acceptable one.
29. It is also relevant here to mention that, the 70 C.C.No..2871/2014 J Accused/DW.1 in his evidence has also taken specific defence that, the cheques in question were issued to the complainant towards security for the purpose of consolidated incidental expenses of RTO official which was accumulated in their office with respect to the RTO officer Mr. Palanetra to process the registration of vehicles, but, in support of defence of the accused, nothing has been produced before the court to prove their defence except the oral evidence. Even for sake of discussion if the defence of the Accused i.e. the cheques in question have been given to the complainant towards security for the purpose of consolidated incidental expenses of RTO official which was accumulated in their office with respect to the RTO officer Mr. Palanetra to process the registration of vehicles, in such circumstances also it attracts the offence U/s.138 of N.I.Act, unless the accused proved his defence, in this regard, it is relevant here to refer the decision of Hon'ble Apex court of India reported in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " Even 71 C.C.No..2871/2014 J cheque issued as security for payment of loan installments also covered under the purview of sec. 138 of Negotiable Instruments Act" In another decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of Lale Patel Vs. Sharanabasappa., wherein the Hon'ble High Court held that " NEGOTIABLE INSTRUMENTS ACT, 1881 section 138 - Dishonour of cheque for insufficiency of funds Plea of accused that he had given a blank cheque signed as security for a transaction and complainant filled up the contents and denied existence of any debt or loan - Conviction by Trial court Affirmed by Appellate Court - Revision against. In another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. Vijayakumari wherein the Hon'ble Apex court held that " NEGOTIABLE INSTRUMENTS Act, 1881 Sections 138 and 139
- acquittal - If justified Accused not disputing issuance of cheque and his signature on it Plea 72 C.C.No..2871/2014 J that it was issued long back as security and that loan amount was repaid Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused Acquittal not proper. In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.271/2020 in the case of APS Forex Services Pvt. Ltd., Vs. Shakthi International Fashion Linkers and others., wherein the Hon'ble Apex Court held that "the defence of the Accused that, cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption. It is also held that, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always presumption infavour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the Accused to rebut such presumption by leading evidence". Hence in the present case also it is the main defence of the 73 C.C.No..2871/2014 J Accused that the cheques in dispute were given to the complainant for security for the purpose of consolidated incidental expenses of RTO official which was accumulated in their office with respect to the RTO officer Mr. Palanetra to process the registration of vehicles, but in this regard the accused have not produced documents or proof aqnd in the present case the Accused have admitted that, the cheques were issued and signatures are also admitted but it is the defence of the Accused that, they were issued towards security and complainant has fabricated the cheques, in such circumstances the defence of the Accused cannot be acceptable one in the absence of further proof of evidence to rebut the presumption.
30. The accused No.3 has examined as DW.2 by filing her affidavit and the DW.3 in her evidence stated that, she is Executive Director of Jatti Engineering India (Pvt., Ltd., and she noway directly connected with the other business interest of accused No.1 and 2 and she is not signatory to the cheques and receipts ie.,. Ex.P.1 to P.7 and she is noway connected with the transaction but the 74 C.C.No..2871/2014 J complainant with a malafide intention has arraigned her as accused No.3 in this case and dragged her to this court unnecessarily and she has neither accepted the deposit on account nor issued the cheques and has not signed any receipts which are part of this matter and an amount of Rs.75,000/ paid from the account of accused No.3 as the business of accused No.1 and 2 went from bad worse during the financial recession in the year 200910 and there was no pre existing debt or liability with respect to the accused No.3 with the complainant.
31. The DW.2 has cross examined by the complainant but nothing has been elicited from her to show that, the accused No.3 has issued the receipt and cheques in question ie Ex.P.1 to P.7 and the accused No.3 has accepted the deposits by the complainant, therefore nothing has been elicited from the cross examination of DW.2 to show that, the accused No.3 is also liable to pay the debt in question and accused NO.3 is also signatory to the cheques in question. It is an admitted fact by the complainant that, he has deposited the amount of Rs.1,50,000/ on 30.11.2007 and Rs.1,00,000/ on 75 C.C.No..2871/2014 J 30.1.2008 to the accused No.1 and also lent Rs.1,00,000/ on 1.3.2008 and Rs.1,50,000/ on 1.4.2008 in the name of respondent No.2 and in turn the accused No.1 and 2 have agreed to pay the interest and also issued the cheques in question ie Ex.P.2, P.4 and P.5 in his name. It is also admitted fact by the complainant that, the signatures found at Ex.P.2(a), P4(a) and P.5(a) are those of proprietor of the accused No.1 and 2 and the proprietary of the accused No.1 and 2 has only issued the cheques in question in favour of the complainant, therefore the accused No.3 is not either the signatory to the cheques in question or issued the cheques in question in favour of the complainant. Therefore, the accused No.3 is not liable to pay any amount or cheques amount to the complainant as there was no pre existing debt or liability with respect tot he accused No.3 with the complainant.
32. It is also relevant here to mention that, the accused No.3 has proved that, the subject cheques in question are not belongs to the account of accused No.3 Pvt. Ltd., and the complainant has proved that, the cheques in question pertains to the account of 76 C.C.No..2871/2014 J accused No.1 and 2 and same have been admitted by the proprietor of accused No.1 and 2 during the course of his crossexamination in such circumstances, it cannot be held that, the Accused No.3 has also issued the cheques in question to the complainant towards discharge of the debt in question and the Accused No.3 has also committed offence U/s.138 of Negotiable Instruments Act. In this regard it is also relevant here to refer the decision of Hon'ble Supreme Court of India decided in Crl. Appeal No.258/2021 in the case of Alka Khandu Avhad Vs. Amar Syamprasad Mishra and Anr., dt: 08.03.202021 held that " Sec.138 of the N.I.Act and observed that, to prosecute a person the following conditions should be met "(1) the cheque should be drawn by a person in an account maintained by him with a banker ; (2) the payment made should be discharge a liability or debt and (3) the cheque was dishonoured either due to insufficient funds or the amount exceeded the available funds". and also held that, "a person who is signatory to the 77 C.C.No..2871/2014 J cheque and the cheque is drawn by that person on an account maintained by him and cheque has been issued for the discharge, in whole or in part, or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have been committed an offence"
and also held that, "even in joint liability cases, the person who has not drawn the cheque could not be prosecuted if he /she did not sign the cheque , and the joint account has to be held both the liable persons". In another decision of Hon'ble Apex Court of India in Aparna A.Shah Vs. Sheth Developers Private Ltd., and another., reported in (2013) 8 SCC 71 wherein it has been clearly held that "Only the Drawer of the cheque is liable for prosecution U/s.138 of N.I.Act and in case of joint accounts, each and every account holder cannot be prosecuted unless he had signed on the cheque and that no one can be fastened with criminal liability for acts of others., except as expressly provided by law and 78 C.C.No..2871/2014 J the element of common intention is not relevant in N.I.Act, unless the proceedings are initiated under the penal code". The principles of law down in the above decision are aptly applicable to the case on hand, in this case also the cheques in question have not been drawn from the account maintained by the accused No.3 and accused No.3 is also not signatory of the chques in question, therefore in view of the prinples held in above decision i.e in order to prosecute a person the cheques should be drawn by a person in an account maintained by him with a banker, therefore it can be held that, the complaint filed by the complainant against accused No.3 itself is not maintainable. Therefore the arguments canvassed by the learned counsel for the complainant that, the accused No.3 is also liable to pay the cheques amount and has committed the offence U/s.138 of N.I.Act cannot be acceptable one and not sustainable in law.
33. 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 79 C.C.No..2871/2014 J the complainant has successfully established beyond all reasonable doubt that, the complainant has lent total amount of Rs.5 Lakhs to the accused No.1 and 2 Proprietary concern on different dates and in turn the accused No.1 and 2 proprietary concern has issued the cheques in question ie Ex.P.2,P.4 and P.5 towards repayment of the amount of Rs.5 Lakhs lent by the complainant and thereafter the complainant has presented the said cheques through his account and same were returned dishonoured with an endorsement of "Account Closed" and thereafter the complainant got issued legal notice to the accused No.1 to 3 and the said notices were served on accused No.1 to 3, inspite of it, the Accused No.1 and 2 did not paid the cheques amount. As it is already held in the above that, accused No.3 has not issued the cheques in question and is the signatory to the cheques in question or drawer of the cheques and the cheques in question are not pertains to the account of accused No.3, hence the complaint filed by the complainant as against the accused No.3 is not maintainable. On the other hand, the accused NO.1 and 2 have failed to rebut the presumption available 80 C.C.No..2871/2014 J infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.2, P.4 and P.5 Cheques. Therefore accused No.1 and 2 have committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Partly in Affirmative.
34. 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 No.1 and 2 be punished for their 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 NO.1 and 2, 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 : 81 C.C.No..2871/2014 J ORDER Acting U/sec.255(2) of Cr.P.C. the accused No.1 and 2 are convicted for the offence punishable U/sec.138 of N.I.Act.
The accused No.1 and 2 are sentenced to pay a fine of Rs.6,15,000/= (Rupees Six Lakhs and Fifteen Thousand only) within one month from the date of order, in default accused No.1 and 2 shall under go simple imprisonment for a period of (3) three 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.6,10,000/= (Rupees Six 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 complaint U/s.200 of Cr.P.C. filed by the complainant against accused No.3 for the offence 82 C.C.No..2871/2014 J punishable U/sec.138 of N.I.Act is hereby dismissed. No costs. Acting U/sec.255(1) of Cr.P.C. the accused No.3 is acquitted for the offence punishable U/sec.138 of N.I.Act.
The Bail bond of the Accused No.1 to 3 stands cancelled after expiry of the appeal period.
Office is directed to furnish free certified copy of this judgment to the Accused No.1 and 2 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 28th day of September 2021).
.
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri. T.C. Sathish Kumar
2. List of documents exhibited on behalf of the Complainant: 83 C.C.No..2871/2014 J Ex.P.1 to Ex.P3 : Receipts;
Ex.P.2 and Ex.P.4 : Original Cheques;
Ex.P.2(a) and : Signatures of Accused
Ex.P4(a)
Ex.P.5 : Cheque;
Ex.P.6 & 7 : Receipts;
Ex.P.6(a) & 7(a) : Signatures of the accused
Ex.P.8 : Copy of notice
Ex.P.8(a) : Signatures of the accused
Ex.P.9 : Letter
Ex.P.10 to 12 : Postal Acknowledgment
Ex.P.13 to 15 : Bank Memos
Ex.P.16 to 18 : Challans
Ex.P.19 : Reply
Ex.P.19(a) : Signatures of the accused
Ex.P.20 : RPAD Cover
Ex.P.21 : Postal Receipt
Ex.P.22 : Legal notice
Ex.P.23 to 25 : Postal Acknowledgment
Ex.P.26 : Letter
Ex.P.27 & 28 : Postal Receipt and
acknowledgement
Ex.P.29 : RPAD Cover
Ex.P.30 : Postal Receipts
Ex.P.31 : Xerox copy of the cheque
dated:10.03.2020.
3. List of witness/s examined on behalf of the Accused: DW.1 : Sri. D.B. Jatti DW.2 : Smt. Rani Danappa Jatti 84 C.C.No..2871/2014 J
4. List of documents exhibited on behalf of the Accused: NIL (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
85C.C.No..2871/2014 J 28.09.2021 case called, Both complainant and counsel for the complainant present and accused and counsel for the accused No.2 and 3 present.
Judgment pronounced in the open court, vide separate order.
ORDER
Acting U/sec.255(2) of
Cr.P.C. the accused No.1 and 2
are convicted for the offence
punishable U/sec.138 of N.I.Act.
The accused No.1 and 2
are sentenced to pay a fine of
Rs.6,15,000/= (Rupees Six
Lakhs and Fifteen Thousand
only) within one month from the
date of order, in default
accused No.1 and 2 shall under
go simple imprisonment for a
period of (3) three 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.6,10,000/= (Rupees Six
Lakhs and Ten Thousand
86
C.C.No..2871/2014 J
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 complaint U/s.200 of
Cr.P.C. filed by the complainant
against accused No.3 for the
offence punishable U/sec.138 of
N.I.Act is hereby dismissed. No
costs. Acting U/sec.255(1) of
Cr.P.C. the accused No.3 is
acquitted for the offence
punishable U/sec.138 of N.I.Act.
The Bail bond of the Accused
No.1 to 3 stands cancelled after
expiry of the appeal period.
Office is directed to furnish free
certified copy of this judgment to
the Accused No.1 and 2
incompliance of Sec.363(1) of
Cr.P.C.
XVI ACMM, B'luru.
87
C.C.No..2871/2014 J