Bangalore District Court
(Represented By Its Manager Babu M.) vs (Proprietor Of Shakthi Traders) on 22 January, 2021
BEFORE THE COURT OF XXIV ADDL. SMALL CAUSES
JUDGE & A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 22nd JANUARY 2021
PRESENT:
SRI.R.MAHESHA, B.A. L. LL.B.
XXIV ADDL. SMALL CAUSES JUDGE
& A.C.M.M.
BANGALORE.
1. Sl. No. of the Case CC.No.4509 of 2018
2. The date of 04-10-2018
commencement of
evidence
3. The date of closing 18-12-2020
evidence
4. Name of the M.K.Agro Tech Pvt., Ltd.,
Complainant (Represented by its Manager Babu M.)
having office at # 389, M.B.Road,
Kaveri layout,
Srirangapatna-571438.
5. Name of the Srinivasa Reddy G.
Accused (Proprietor of Shakthi Traders),
S/o Gopal Reddy, Aged about 32 years,
Residing at No.605,
Dommasandra village (ADN post)
Sarjapura Hobli, Anekal Taluk, ,
Bangalore-562125.
6. The offence U/s.138 of the Negotiable Instruments Act
complained of
7. Opinion of the Accused found guilty
judge
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JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
The complainant is a registered company under companies Act 1956, it is carrying business of manufacturing of cooking oil which called Sunpure edible oil. The accused was the main distributor of sunpure edible oil under the complainant. In the routine course of the business the accused being a distributor had purchased sunpure edible oil for which complainant had issued invoices. The accused issued a cheque No.800702 dated 30-7-2018 for an amount of Rs.7,49,914/- of State Bank of Mysore, Dommasandra branch, Bangalore-562125. That upon presentation of the said cheque for encashment, the cheque returned with memo 3 C.C.NO.4509 OF 2018 SCCH-26 dated 31-7-2018 with endorsement "Insufficient Funds". That the complainant had made several attempts to approach the accused, the accused avoided the complainant company. The complainant issued a legal notice on 29-08-2018, the notice has not delivered to the accused. Hence filed this complaint.
3. After filing of this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded. Thereafter cognizance was taken and registered in Crl.Reg.No.III and summons issued to the accused. In response of summons, accused appeared through his counsel and got enlarged him on bail. The plea was recorded, read over and explained to the accused they pleaded not guilty and claims to be tried. Hence the case is posted for complainant evidence.
4. The Manager of the complainant company himself examined as PW-1 and got marked 10 documents as Ex-P1 to 11 and closed his side.
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5. The accused examined U/s 313 Cr.P.C., read over and explained him, the incriminating material appearing in the complainant evidence, but who denied the same.
6. The accused himself examined as DW-1 and one document marked as Ex-D1.
7. The learned counsel for complainant and accused filed written arguments.
8. The learned counsel for complainant filed written arguments. In the written argument, he has stated that the accused being the distributor of Dommasandra area, Bengaluru, the complainant company, accused started distribution in the name of Shakthi traders. The accused entered into distributor agreement with complainant company with terms and conditions. The accused used to purchase Sunpure edible oil from complainant company based on his requirement, the accused purchased Sunpure oil from the complainant company and complainant company had issued invoices. On 30-06-2017, the accused purchased goods worth of Rs.5,16,257/-, the accused had a credit of Rs.13,50,704/- towards the complainant company and on 3-7-2017 accused 5 C.C.NO.4509 OF 2018 SCCH-26 made a payment of Rs.4,00,000/- and on 6-7-2017, accused made payment of Rs.4,00,000/-, the credit balance came Rs.5,50,704/-. Again on 6-7-2017, the accused purchased goods worth of Rs.3,58,204/-, the credit balance was Rs.9,09,913/- and on 10-11-2017, accused made a payment of Rs.1,60,000/-, keeping a balance of Rs.7,49,914/- for which, accused gave Ex-P1. The said Ex-P1 presented by the complainant company and same was returned with endorsement of "Funds Insufficient", thereafterwards, he issued statutory notice, despite service of said notice to the accused, he did not repay the balance amount. The accused clearly admitted Ex-P1 belongs to his account and signature on Ex-P1 was belongs to him, the said signature done by him, he did not produced any documents like account statement, books of accounts, invoices of the company, goods received, goods sold, incentive receipts, bonus forms. The accused himself admitted, the bank statement i.e., Ex-P12. In Ex-P12 discloses that, accused has deposited Rs.1,60,000/- on 10-11- 2017, keeping a balance of Rs.7,49,914/-. The main defence of the accused is the notice have not been served on him and 6 C.C.NO.4509 OF 2018 SCCH-26 the disputed cheque was given for the purpose of security. He himself admitted in his evidence, address on the driving licence and the legal notice dispatched address are the same and accused himself had furnished the same address at the time of registration as a distributor of M.K.Agro Tech Pvt., Ltd., in the year 2014. The accused intentionally avoided to receive the statutory notice, he did not produced any document to show he was not residing in the earlier address furnished by him and carriedout his business in another new address. The accused mainly contending in this case that, Ex-P1 was given for security purpose while getting distributor licence, the said cheque was misused by the complainant company and complainant company created Ex-P12 for his convenience. To prove his allegations, he did not filed any formal complaint to police against complainant company or not sent a legal notice asking for return of the cheque. The complainant fulfilled all the ingredients of Section 138 of NI Act, the accused committed offence U/s 138 of NI Act, hence he seeks for conviction and compensation.
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9. The learned counsel for complainant has relied following Apex court decisions :-
1. 2015(4) KCCR 2881(SC)-T.Vasanth Kuamr Vs Vijayakumari In this case Apex court held that- Accused not disputing issuance of cheque and his signature on it, the accused pleaded as cheque was issued long back as security and that loan amount was repaid, the said contention was not supported by any document or oral evidence, order of acquittal not proper.
2. AIR 2018 Supreme court 3601-T.P.Murugan Vs Bojan Posa Nandhi Held that presumption as to enforceable debt, the accused contending in his evidence alleged cheques issued towards repayment of loan back in 1995, he never asking their return cheuqes for seven years. the behavior of the accused is unnatural. The accused admits cheques and signature, the presumption U/s 139 would operate against accused. The appellant court come to clear conclusion that complainant 8 C.C.NO.4509 OF 2018 SCCH-26 proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt.
3. 2010 (11) SCC 441-Rangappa Vs Sri.Mohan held that-
Complainant proves prima-facie existence of legally enforceable debt or liability, accused admitted signature on the cheque, the statutory presumption U/s 139 comes into play in favour of the complainant., the said presumption was not rebutted by the accused, accused failed to show raising a probable defence conviction order passed by the High Court held proper.
4. (2016) 10 Supreme Court cases 458 Sampelly Satyanarayan Rao Vs Indian Renewable Energy Development Agency Limited.
In this case, Apex court held that, whether cheque represents discharge of existing enforceable debt or liability or whether it represents advance payment without there being any subsisting liability once loan amount was disbursed, as 9 C.C.NO.4509 OF 2018 SCCH-26 per agreement, installments had fallen due and date of issuance of cheque, the said dishonour of such cheques fall U/s 138 of NI Act and such issuance of cheque undoubtedly represents outstanding liability.
5. AIR 2018 Supreme Court 3173-Kishan Rao Vs Shankargouda In this Apex court held that complainant proving issuance of cheque having signature of accused, accused failing to rebut presumptions raised against accused, no evidence lead by accused in his support, acquittal of accused by High Court in revisional jurisdiction on the ground of doubt in mind of court with regard to existence of loan improper. Accused convicted by the Supreme Court.
10. Per contra, learned accused counsel filed his written argument wherein he mainly contended that the present complaint has not been filed by the authorized person and there is no proper authorization to prosecute this case as prescribed by company Act. The complainant company did not 10 C.C.NO.4509 OF 2018 SCCH-26 produced resolution of board of directors of company and document of authorization to PW-1, hence on this ground present complaint liable to be dismissed. The complainant has not furnished any statement of accounts, track record pertaining to the entire transaction, he has not furnished invoice/receipt, account book to establish the fact that accused was in due of above said amount i.e., Rs.7,49,914/-. PW-1 himself admitted in his cross examination for which period or for which material or for which invoice accused liable to pay the cheque amount. So from this admission of complainant, complainant failed to prove the fact, the accused is in due of the cheque amount and has issued disputed cheque in discharge of his liability. Further the accused mainly contending that the legal notice sent to accused has not been served, he clearly admits in para 8 the notice sent by the complainant has not delivered to the accused, the address shown in Ex-P8 to 10, different from address shown in legal notice. PW-1 has got issued the legal notice without any authorization by the board of directors, hence on this ground also the present complaint is not maintainable. Further the 11 C.C.NO.4509 OF 2018 SCCH-26 accused mainly contended in his written argument that as per the terms and conditions annexed to Ex-P9, it is stipulated that the distributor has to handover two blank letter pad with seal and signature as a security to the complainant company and it is also stipulated that all the transactions has to be strictly made through RTGS or through NEFT and no payment shall be made in cash or cheque. The complainant company has not produced any document to show that accused is due of amount mentioned in the cheque. Further complainant company has not placed any accounts/statement/receipts/ invoice to show that accused had in fact purchased the products and has issued the cheque in question in discharge of the products purchased by him. Further accused stated in written arguments that, to rebut the presumption U/s 139 of NI Act, the accused has been examined as DW-1 and he explained the facts and circumstance under which the cheque in question went to hands of the complainant company, the said fact was corroborated by admission made by PW-1 and Ex-P9, at the time of entering agreement for distribution the complainant company get two blank signed cheques from the 12 C.C.NO.4509 OF 2018 SCCH-26 accused, the accused has discharged his burden of rebutting the presumption, the accused successfully proves before this court that he is not in due of any amount to the complainant company. Hence he seeking acquittal from this court.
11. In support of his argument, he furnished following citations :-
1. George Joseph Vs HMT Ltd., Order passed by the Hon`ble High Court of Karnataka in Criminal Revision Petition No.129/2013 dated 28-10-2014.
In this case Apex court held that, for any person to represent and tender evidence in a court of law on behalf of a company, ought to be authorize under the articles of association of the company or by a separate resolution by the board of directors.
2. 2017 (3) DCR 478 Karnataka High Court, Dharward Bench- Shree Bhagawati Sarees & Readymade Stores Vs Basantsingh.
In this case Apex court held that, the complainant has failed to establish the due amount on the date of issuance 13 C.C.NO.4509 OF 2018 SCCH-26 of cheque, so passing acquittal of accused is just and proper. The complainant has to prove on the date of issuance of cheque, there is a due payable by accused, it shall establish by the complainant during trial.
3. (2006) 6 Supreme Court cases 39-M.S.Narayana Menon Alias Mani Vs State of Kerala and another.
In this case Apex court held that, the burden of rebut initially on the accused, the said presumption by raising a probable defence, if he discharges the said burden, the onus thereafter shifts on to the complainant to prove the case.
4. Order passed by the High Court of Karnataka in Crl.A.No.1784 of 2006(A) Sri.P.G.Sukandaraj Vs Smt.Chithra
12. In this case Apex court held that, Section 27 of General Clause Act provides for deemed service provided the document is properly addressed and posted but said notice 14 C.C.NO.4509 OF 2018 SCCH-26 was sent by registered post acknowledgment due, it was not sent to proper address cannot be taken presumption as to deemed service.
Order passed by the High Court of Karnataka in criminal revision Petition No.862/2011 In this case, Apex court held that, as per Section 138 proviso (B) of NI Act in order to attract the offence U/s 138 of NI Act, notice will have to be served on the accused. if notice was not served, the requirement of proviso (B) to section 138 of NI Act has not been fulfilled. No offence U/s 138 of NI Act can be said to be have been made-out.
13. Upon hearing the arguments and perusal of the material placed on record, the following points arise for my consideration :-
POINTS
1. Whether the complainant has made-out the case that the accused has issued a cheque bearing No.800702 dated 30-07-2018 for the amount of Rs.7,49,914/- drawn on State Bank of Mysore, Dommasandra branch, Bangalore, to discharge the legally enforceable debt or 15 C.C.NO.4509 OF 2018 SCCH-26 liability due to the complainant and on presentation of cheque it was returned without encashment with an endorsement as " Insufficient Funds" and accused failed to make any payment within the stipulated period and thereby accused had committed an offence punishable under section 138 of N.I Act?
2. What order?
14. My answer to the above points is as follows :-
Point No.1 : In the affirmative Point No.2 : As per final order for the following :-
REASONS
15. POINT NO.1 :- The provision of Section 101 of the Indian Evidence Act provide that the burden of proof rests on the party who substantially asserts it and not on the party who denies it, in fact burden of proof means that a party has to prove an allegation before he is entitle to a judgment in his favour. Further law U/s 103 of Indian Evidence Act amplifies the general rule of Section 101 that the burden of proof lies on the person who asserts the affirmative of the fact in issue. 16 C.C.NO.4509 OF 2018
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16. The burden lies on the complainant to prove the complainant complied with mandatory requirements of Section 138 of NI Act.
The three ingredients of offence U/s 138 NI Act are as under.
1. That there is a legally enforceable debt
2. That cheque was drawn from the account of bank for discharge in whole or in part of any debt or any other liability which presuppose legally enforceable debt
3. That the cheque so issued had been returned due to insufficiency of funds.
The proviso appended to the said section provides for compliance with legal requirements before the complaint/petition can be acted upon by court of law.
Section 118A of NI Act deals with special rule of evidence and stated that, every negotiable instrument act is deems to have been drawn for consideration. Section 139 of NI Act enables the court to presume, unless contrary is proved, that the holder of the cheque received the cheque of the nature referred in Section 138, in whole or in part, of any debt or other liability.
The presumption available U/s 118 and 139 of NI Act is rebuttal in nature, the accused can rebut the same by either 17 C.C.NO.4509 OF 2018 SCCH-26 entering into the witness box or effectively cross examine the complainant and his witness.
17. In the instant case, the PW-1 in his affidavit in lieu of examination-in-chief reiterated the facts of the complaint once again. The learned counsel for complainant argued that the accused was a dealer under the complainant company and he was purchased the sunpure edible oil on credit basis and he was due of Rs.7,49,914/-, to discharge his legal obligation, he has issued a cheque, but same was dishonoured, thereafter legal notice issued, even then, he failed to pay the amount. Hence he prayed for convict the accused.
18. The learned counsel for accused argued that it is admitted that the accused was a dealer and purchased the cooking oil, but he has paid entire dues and there is no due as on the date of filing of this complaint, but the cheque issued by the accused for security purpose at the time of taken dealership, but thereafter the complainant company misused the said cheque. Further argued that the legal notice issued 18 C.C.NO.4509 OF 2018 SCCH-26 by M.Babu and he is not an authorized person and there is no document furnished by the complainant to show his authorization and thereafter the case represented by another person, he has also not having any board resolution and he has no authority to represent the case. Further argued that the accused issued a cheque in the year 2018 for security purpose. To proof of this, he has furnished bank statement, from 1-5-2016 to 22-5-2017. But the complainant filled up the cheque as his will and wish and presented to the bank in the year 2018. Hence he prayed for acquit the accused.
19. I have perused Ex-P1 cheque dated 30-07-2018 which was dishonoured as per Ex-P2 and thereafter legal notice issued on 29-08-2018 as per Ex-P3 and thereafter the said notice returned with an endorsement address not found, return to sender as per Ex-P5. Thereafter within stipulated period complainant filed this complaint. DW-1 admitted during cross examination that he filed/furnished his DL to complainant company. The address shown in DL and legal notice has been sent to accused address are one and the 19 C.C.NO.4509 OF 2018 SCCH-26 same. Under the circumstances it can be held that the complainant has caused statutory notice to the accused at his admitted address. This attracts presumption laid down U/s.27 of the General Clauses Act. For the aforesaid reasons, the defence raised by the defence party regarding non service of notice on the accused is not at all sustainable and same is hereby rejected. Hence the complainant complied all the ingredients of Section 138 of N.I Act.
20. Ex-P9 is a distributors assessment letter duly executed by the accused and he has also admitted the terms and conditions of the dealership and Ex-P10 and 11 are the invoices. On perusal of both documents, it is clearly goes to show that the accused was dealer under the complainant company. Ex-P12 is a statement of account maintained by the complainant, this statement shows the balance of Rs.7,49,913=64 as on 10-11-2017. When the accused paid part payment, the same is also reflected in the statement of account. The cheque amount is as per invoice raised on 30- 06-2017 for sum of Rs.5,16,257=96 out of that the accused 20 C.C.NO.4509 OF 2018 SCCH-26 paid Rs.4,00,000/- on 03-07-2017 and 4,00,000/- on 06-07- 2017 and as per invoice raised on 06-07-2017 for sum of Rs.3,58,204=98 and remaining balance due shown in this statement of account. To disprove this figure, the accused has not furnished any document to shown his entire balance discharged. In absence of this material document and there is no good reason to disbelieve the Ex-P12. Therefore according to the complainant and also according to the statement of account furnished by the complainant the accused is fallen due of the cheque amount.
21. The Ex-P1 is the cheque and the complainant company has obtained the said cheque in the year 2018. Ex- D1 is a bank statement of the accused account. Therefore itself shows that the said cheque issued by the accused in the year 2018 itself, but the complainant used the said cheque for discharge of his legally enforceable debt by the accused. When accused fallen due such cheque may be used for discharge of legally enforceable debt.
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22. Admittedly complainant company is a registered company, it is running a business under the rules and regulations of the company Act 1956, but on the same time, there was a agreement between the complainant and accused as per Ex-P10 and 11 which shown the terms and conditions that if any due fallen by the accused the cheque issued for security purpose may be used. The meaning of security i.e., to provide on assurance or comfort to drawee, that in case of failure of primary consideration on due date or on the happening ( or not happening) contingency, the security may be enforced while in above situations. The dishonour of such cheque may attracted the penal provision of section 138 of NI Act. Therefore the accused has consented to present the cheque, even which was issued for security purpose, but in this case, he taken specific defence that the said cheque issued for security purpose and misused by the complainant cannot be acceptable.
23. The learned counsel for accused mainly argued that denying entire contents of the legal notice and also the 22 C.C.NO.4509 OF 2018 SCCH-26 accused has discharged entire debt and no any balance. But to justification of this contention, there is no document furnished by the accused. He did not give any reply to legal notice at appropriate time.
24. I have also perused oral evidence of the parties. During the cross examination of PW-1 there is no admissions to helpful to the accused and PW-1 clear-cut denied the suggestion that the cheque misused by the complainant and there is no due by the accused etc., During the cross examination of DW-1 also denied regarding there is a balance shown in his account. In support of limb defence, he produced Ex-D1, he did not produced full account statement, but he admitted that he has signed on Ex-P1, but remaining particulars, he did not filled-up and stated that he does not know the terms and conditions of the agreement, but he admitted that he signed on the said agreement. Once signed the agreement, the law presumed that the executor knows its contents of the agreement. Therefore in my considered view, the accused failed to prove his defendant in respect of he has 23 C.C.NO.4509 OF 2018 SCCH-26 no balance to the complainant company, on the same time, the complainant established its case by way of oral and documentary evidence.
25. The learned counsel for accused very much objected in respect of authorization. It is true if a person has no authority to issue authorization, on such a situation the representative of the complaint has no authority but in the present case on hand, the complainant company issued authorization in favour of the PW-1. They produced Ex-P6 and 7. Therefore he has authorized person to represent the case.
26. Therefore in my considered view, on considering the above ratio laid down by the Hon`ble High Court and Supreme court and also facts and circumstances of the case, the accused failed to prove his defence by way of oral and documentary evidence, on the same time, complainant proved his case by way of oral an documentary evidence, on the same 24 C.C.NO.4509 OF 2018 SCCH-26 time complainant proved his case by way of oral and documentary evidence.
27. On careful examination of all the documents of complainant, it is very clear that the complainant filed this complaint well within time and complied all the ingredients of NI Act 1881. The presumption under section 139 of the Act is a presumption of law, it is not a presumption of fact. This presumption has to be raised by the court in all the cases once the factum of dishonor is established. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttable evidence depends on the facts and circumstances of each case. Such evidence must be sufficient to prove the case. Therefore a mere explanation is not sufficient to rebut this presumption of law.
28. As per NI Act, the presumption is in favour of holder of cheque. Here, the holder of cheque is complainant and presumption is in favour of complainant. It is burden on the accused to rebut the above presumption. As per section 118 25 C.C.NO.4509 OF 2018 SCCH-26 of N.I Act, presumption has to be raised by the court in all the cases once the factum of dishonour is established, but it is rebuttal presumption. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and should prove beyond any reasonable doubt. Therefore, a mere explanation is not enough to repel this presumption of law. Therefore, it is to appreciate whether accused rebut the evidence or not?
29. This court carefully gone through the entire case papers. Accused admitted issuance of cheque. It means, issuance of cheque is not in dispute. Hence, this court relied the decision which is reported in 2017 (2) AKR 12 (K.L.Agarwal Vs M/s Paramount Solutions, Bangalore), Hon`ble Court held that "Accused admitted issuing three cheques and also signature on cheques-no evidence on record to rebut the presumption raised against accused".
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30. This court relied the decision reported in 2015 AIR- SCW 3040 (T.Vasanthakumar Vs Vijayakumari), Hon`ble Supreme Court held that, " cheque as well as signature on in not disputed by accused-presumption u/s 139 would be attracted. Story brought out by the accused that, cheque was given to complainant long back as security to a loan, the loan was repaid, but complainant did not return security cheque-is unworthy of credit, apart from being unsupported by any evidence-Order of high court in acquitting accused is erroneous''. The said decision clearly applicable to the case on hand. Here, also accused admitted cheque as well as signature. He contended that, it was issued for the purpose of security. Accused failed to prove the same.
31. Accused clearly admitted that Ex.P.1(a) is his signature. Regarding defence raised by the accused that he was issued the duly signed blank cheque, It is necessary to discuss on Section 20 of NI Act. It reads as under;
Section 20:- " Inchoate stamped instruments-Where one person signs and delivers to another person a paper stamped 27 C.C.NO.4509 OF 2018 SCCH-26 in accordance with law relating to negotiable instruments then in force in (India), and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to paid there under''.
32. The accused contended that they have issued blank cheque. What is the effect of issuing a blank cheque is to be considered at this stage. Where the cheque is signed leaving blank all other particulars and handed over to the payee authorizing her to fillup the blanks as agreed upon, it is valid in law. Therefore, when such a cheque is 28 C.C.NO.4509 OF 2018 SCCH-26 dishonoured, section 138 applies. ILR 2001 KAR 4127 in the case of S.R.Muralidhar Vs G.Y.Ashok. In this regard section 20 of the Act is very clear. It is further held by Apex court in Bir Singh Vs Mukhesh Kumar 2019 (4) SCC 197held that if a signed blank cheque Is voluntarily handed over to payee, towards some payment, the payee may fillup the amount, other particulars, this in itself would not invalidate the cheque, the onus would on validate the cheque still be on accused to prove the cheque was not in discharge of debt or liability by adducing evidence. it is immaterial that, the cheque may have been filled in by any person other than drawer if the cheque is duly signed by the drawer. Here the stand of the accused is not maintainable.
33. The accused contended that the cheques are issued for the purpose of security. The cheque issued as a security is also comes under the purview of section 138 of N.I Act. This aspect was observed in the decision which is reported in AIR 2002 SC 3014 (ICDS Ltd., Vs Beena Shabeer and another). 29 C.C.NO.4509 OF 2018
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34. Further, I relied decision reported in (2016) 3 SCC 1 (Don Ayengia Vs State of Assam and another) wherein it is held that;
" Dishonor of cheque issued as a security for discharge of debt or other liability-conviction of guarantor/surety, who had issued cheques as security for payment of amount due by principal debtor, as principal debtor had defaulted and he is committed offence-Person who secondly liable, such as security or guarantor may also be convicted under section 138 of NI Act. If the ingredients thereof or satisfied. ''
35. At this stage it is pertinent to note the Apex court decision reported in -
Hithin P Dalal Vs. Brathin Dranath Benerji 2019 SC 7302- Lakshmi Dyechem Vs. State of Gujarath and others- Kumar Exports Vs.Sharma Carpets and K.N.Beena Vs. Muniyappa and others.
The Hon'ble Apex court clearly held that "onus of proving that the cheque issue was not in discharge of any debt or any liability is on the accused drawer of the cheque, it is obligatory on 30 C.C.NO.4509 OF 2018 SCCH-26 courts to raise the presumption provided U/s 139 of the NI Act. The said presumption is rebuttal and can be rebutted by accused by proving the contrary by needing cogent evidence that there was no debt or liability. The Supreme Court observed that it is immaterial that the cheque is filled by any person other than drawer provided it is duly signed by the drawer. The same would not invalidate the cheque and shall attract the presumption U/s 139 of NI Act.
A meaning full reading of the provisions of Negotiable Instrument Act including in particular section 20, 87 and 139 makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless, he adduced evidence to rebut the presumption that the cheque had been issued for payment of debt or in discharge of a 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, if the cheque is otherwise valid, the penal provision of Section 138 would be attracted.
If a signed cheque voluntarily presented to a payee towards sum payment, the payee may fill up the amount and other particulars, this in itself would not invalid the cheque. The onus would still be on the accused, to prove that the cheque was not indischarge of a debt or liability by adducing evidence.
36. It is profitable to refer Hon'ble Apex Court decision -
IN THE SUPREME COURT OF INDIA IN CRIMINAL APPEAL NO. 508 OF 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 31 C.C.NO.4509 OF 2018 SCCH-26 2018) ROHITBHAI JIVANLAL PATEL VS. STATE OF GUJARAT & ANR In this case Hon'ble Supreme court held that the onus on the complainant to prove his case beyond reasonable doubt by trial court these consideration and observation do not standing conformity with the presumption existing infavour of the complainant by virtue of Section 118 and 139 of NI Act and presumption is that existence of legal enforceable debt is to be presumed in favour of the complainant. When such presumption is drawn the factor 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 the if the accused has been able to rebut the presumption or not. The other observation as regards any variance in the statement of complainant and witnesses or want of knowledge about dates and other particulars of cheques.
37. Further Hon'ble Apex court clearly held that the order of acquittal on the mere ground of creation of doubt it can misplaced the assumption by the trial court. Mere creation of doubt is not sufficient to rebutted the presumption as envisaged by Section 139 of NI Act.
38. Further this court relied Hon'ble Supreme Court of India recent decision in-
Crl.Appeal No.1545/2019 Uttam Ram Vs. Devender Singh Hudan and others, decided on 32 C.C.NO.4509 OF 2018 SCCH-26 17/10/2019 by division bench. The Apex court held that -
once signed cheque issued court can presumed that cheque in question drawn for consideration to holder of the cheque. The complainant proves before court regarding existence of debt. Thereafter the onus shifted on accused to prove there is no existence of legally recoverable debt, then court can hold presumption in favour of complainant is proper. Under Negotiable Instrument Act, there is clear presumption about existence of legally enforceable debt.
39. In present case on hand issuing of cheque is proved. In this case Ex.P1 belongs to accused and signature on Ex.P1(a) is not disputed. The case of complainant that the accused issued two blank cheques without date and amount duly signed with a blank letter pad with seal and signature as a security to the company as per terms and conditions annexed to Ex-P9. In order to show the said cheques was issued towards security. The accused did not placed any believable documents. Ex-P12 itself speaks the accused conducted business till 2017. In Ex-P12 on 10-11-2017, the accused made payment through receipt No.12104 for a sum of Rs.1,60,000/- and remaining due shown as Rs.7,49,913=64. 33 C.C.NO.4509 OF 2018
SCCH-26 Therefore the court is of considered opinion that the complainant company has discharged his initial onus laid on him when he has discharged his initial onus, presumption is raised U/S 118 A and 139 of N.I.Act and accused is obliged to rebut the statutory presumption available to the complainant. The accused has failed to raise probable defence which creates doubts about the existence of a legally enforceable debt or liability. The defence raised by the accused remains as defence only and does not take the place of proof. Though accused has try to rebut the statutory presumption, he has failed in his attempt for the reasons discussed supra. The accused has not rebutted the statutory presumption available to the complainant. The complainant company had substantially proved its contention by producing i.e., Ex-P1 to 12 and 12(a), According to Section 34 of Indian Evidence Act, it reveals that books of accounts, including bank records which are maintained in the daily course of business in electronic form or otherwise are relevant. Section 4 of banker books evidence Act 1891, Section 4 of Act provides for mode of producing of document in the court, the document produced 34 C.C.NO.4509 OF 2018 SCCH-26 before the court must be certified copies, according to the procedure, in section 2 (8) and 2(a), the certified nature is required because it establishes the reliability and credibility of the document, the document after getting signed by the branch manager or General manager of the bank a certified copy". The certified copy is produced in the court and admissible as a prima-facie evidence.
40. The cheque was issued by the accused towards discharge of debt (outstanding due as per Ex-P12 and 12(a)) and on presentation of the said cheque came to be dishonoured for the reason insufficient of funds, thereafter having intimated about dishonour of the cheque the accused having failed to make payment of the dishonour of the cheque amount, it had proved that accused has guilty of the offence punishable U/s 138 of NI Act. By allowing the cheque to be dishonoured without maintaining sufficient funds inspite of issuing cheque towards discharge of legally enforceable debt. I have perused Apex court decisions with due respect and ratio laid down in respective cases. The decisions relied by the 35 C.C.NO.4509 OF 2018 SCCH-26 complainant counsel amply applicable to the case of the complainant. The decisions relied by accused are not helpful the contention took by the accused. Therefore the decisions relied by the accused are not helpful to his case. Hence in the circumstance, the complainant having proved its case. Hence I answer Point No.1 in the Affirmative.
41. Point No.2: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. This court has power to impose both sentence of imprisonment and fine on the accused. The court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Further accused has to compensate the complainant in terms of money. Therefore the cheque issued in the year 2018 and accused is due to complainant. Therefore the accused is liable to pay the cheque amount and also interest and litigation expenses. In the result, I proceed to pass the following:-
36 C.C.NO.4509 OF 2018
SCCH-26 ORDER By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.8,50,000/- (Rupees Eight Lakhs Fifty Thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.8,45,000/- shall be payable to the complainant as compensation and remaining amount of Rs.5,000/- shall be defrayed as state expense.
In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith. (Dictated to the stenographer, through online computer, thereof is corrected and then pronounced by me in the open Court on this the 22nd January 2021) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.37 C.C.NO.4509 OF 2018
SCCH-26 ANNEXURE WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:
PW-1: Babu M. DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P-1 : Cheque Ex.P1(a): Signature of the accused Ex.P-2: Bank memo Ex.P-3: Legal notice Ex.P-4: Postal acknowledgment Ex.P-5: Returned postal cover Ex.P-6 & 7: Authorisation letter Ex.P-8: Request letter for distributionship Ex.P-9: Distributors assessment letter Ex.P-10 and 11: Invoices Ex.P-12: Statement of account Ex.P-12(A): Date in statement of account
WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
DW-1 : Srinivas Reddy DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
Ex.D1: Bank statement
(R.MAHESHA)
XXIV ADDL. SMALL CAUSES JUDGE,
& A.C.M.M. BANGALORE.