Bangalore District Court
Mr. Deepak Kumar vs Mr. Ajay Shankar Sharma on 31 August, 2021
C.C.No.12287/2017 J
1
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 31st day of August, 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.12287/2017
Complainant : Mr. Deepak Kumar,
S/o Late Jugal Kishore Mandal,
Aged about 43 years,
R/at No.29, Ozone Residence,
Harlur Road, Bangalore12.
Rep. by Sri Rajagopala Naidu & K.
R. Pradeep Associates Adv.,)
Vs
Accused : Mr. Ajay Shankar Sharma,
S/o Ram Umed Sharma,
Aged about 45 years,
R/at No.139,
Rainbow Residency,
Off Sarjapur Road,
Bangalore - 560 035.
(Rep. by Sri. H. V. Bhanuprakash
Adv.,)
Case instituted : 21.03.2017
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 31.08.2021
C.C.No.12287/2017 J
2
JUDGMENT
The Complainant has filed this complaint against the for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he and accused were the Directors and carrying business and were known to each other and both he and accused being the Directors of M/s Super Seva Services Pvt., Ltd., and were also holding their respective shares and he was holding 20% stake in the said company and was intending to come out of the said company by disposing off his 20% stake held in the company. It is further contended by the complainant that, he has expressed his desire to retire from the said company and also decided to dispose off his 20% stake in the form of shares held by him, accordingly accused has shown interest to purchase the 20% stake in the form of share from him, thereafter in the resolution passed by the company with effect from 08.11.2011 he ceased to be the Director of said company as he resigned to the company as a director. It is further contended by the complainant that, he and accused on 30.08.2013 have finalized the worth of shares held by him at C.C.No.12287/2017 J 3 Rs.1,00,00,000/ (Rupees One Crore Only) and that a formal transfer agreement came to be entered between him and the accused and on the day of entering in to the share agreement, the shares running from serial numbers 31867 to 56044 had also been handed over to the accused and handing over the share certificates and the prevailing market value of those shares was also Rs.1,00,00,000/ (Rupees One Crore Only) and same has been accepted by him and the accused. It is further contended by the complainant that, in order to clear off the value of shares the accused has issued postdated cheques i.e., (1) Cheque bearing No.042672 for sum of Rs.5,00,000/ dated 28.02.2014, (2) Cheque bearing No.042673 for sum of Rs.5,00,000/ dated 28.02.2014, (3) Cheque bearing No.042674 for sum of Rs.5,00,000/ dated 28.02.2014, (4) Cheque bearing No.042675 for sum of Rs.5,00,000/ dated 28.02.2014, (5) Cheque bearing No.042676 for sum of Rs.5,00,000/ dated 28.02.2014, (6) Cheque bearing No.042694 for sum of Rs.5,00,000/ dated 28.02.2014, (7) Cheque bearing No.042678 for sum of Rs.5,00,000/ dated 28.02.2014, (8) Cheque bearing No.042679 for sum of Rs.5,00,000/ dated 28.02.2014, (9) Cheque bearing No.042680 for sum of Rs.5,00,000/ dated C.C.No.12287/2017 J 4 28.02.2014, (10) Cheque bearing No.042682 for sum of Rs.5,00,000/ dated 28.02.2014, (11) Cheque bearing No.042684 for sum of Rs.5,00,000/ dated 08.02.2017, (12) Cheque bearing No.042685 for sum of Rs.5,00,000/ dated 08.02.2017, (13) Cheque bearing No.042686 for sum of Rs.5,00,000/ dated 08.02.2017, (14) Cheque bearing No.042687 for sum of Rs.5,00,000/ dated 08.02.2017, (15) Cheque bearing No.042688 for sum of Rs.5,00,000/ dated 08.02.2017, (16) Cheque bearing No.042689 for sum of Rs.5,00,000/ dated 08.02.2017, (17) Cheque bearing No.042690 for sum of Rs.5,00,000/ dated 08.02.2017, (18) Cheque bearing No.042681 for sum of Rs.5,00,000/ dated 08.02.2017, (19) Cheque bearing No.042692 for sum of Rs.5,00,000/ dated 08.02.2017 and (20) Cheque bearing No.042693 for sum of Rs.5,00,000/ dated 08.02.2017 and all the above said cheques were drawn on Bank of India, HSR Layout Branch, Bangalore and the said cheques were issued by the accused to him covering the shares with a promise to honor the same and thereafter the accused has released certain payments allowing certain cheques to encash leaving balance of Rs.50 lakhs.
3. It is further contended by the complainant that, the accused has taken back the remaining C.C.No.12287/2017 J 5 previous cheques from him and issued cheques for the outstanding of Rs.50 lakhs i.e., (1) Cheque bearing No.000027 for sum of Rs.5,00,000/ dated 25.01.2017, (2) Cheque bearing No.000029 for sum of Rs.2,00,000/ dated 25.01.2017, (3) Cheque bearing No.000030 for sum of Rs.5,00,000/ dated 25.01.2017, (4) Cheque bearing No.000031 for sum of Rs.5,00,000/ dated 06.02.2017, (5) Cheque bearing No.000032 for sum of Rs.5,00,000/ dated 27.01.2017, (6) Cheque bearing No.000033 for sum of Rs.5,00,000/ dated 27.01.2017, (7) Cheque bearing No.000034 for sum of Rs.5,00,000/ dated 29.01.2017, (8) Cheque bearing No.000035 for sum of Rs.5,00,000/ dated 29.01.2017, (9) Cheque bearing No.000036 for sum of Rs.2,00,000/ dated 29.01.2017, (10) Cheque bearing No.000037 for sum of Rs.2,00,000/ dated 27.01.2017, (11) Cheque bearing No.000038 for sum of Rs.2,00,000/ dated 02.02.2017, (12) Cheque bearing No.000039 for sum of Rs.2,00,000/ dated 02.02.2017 and (13) Cheque bearing No.000040 for sum of Rs.2,00,000/ dated 02.02.2017 all the cheques were drawn on HDFC Bank, K.R. Road Branch, Bangalore. It is further contended by the complainant that, in order to clear off the remaining amount covering part of the shares the accused has requested to present the cheques C.C.No.12287/2017 J 6 bearing No.000032 dated 27.01.2017 for Rs.5,00,000/, cheque bearing 000033 dated 27.01.2017 for Rs.5,00,000/ and cheque bearing No.000037 dated 27.01.2017 for Rs.2,00,000/ all the cheques were drawn on HDFC Bank Ltd., K.R Road Branch, Bangalore and as per the instructions of the accused he has presented the cheques on 07.02.2017 at his bankers namely HDFC Bank Ltd., Gandhi Bazar Branch / CLG Garvebavipalya Branch Bangalore and the said cheques on presentation dishonored with an endorsement "Stop Payment"
and he has received intimation on 08.02.2017, immediately he contacted the accused and informed him about the dishonor of cheques and the interest at 24% p.a., however the accused except giving lame excuses has not all arranged the cheques amount, inspite of his repeated request and demands hence he was left no other alternative, but to get issued a legal notice on 22.02.2017 calling upon the accused to complied the demands made in the notice and the said notice was served on the accused and for which on 04.03.2017 caused untenable reply. Hence the complainant has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
4. Before issuing process against the accused, C.C.No.12287/2017 J 7 the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his sworn statement, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.7 i.e, Original Cheques dated:02.02.2017 as per Ex.C.1 to Ex.C.3, the signatures of the accused on the said cheques identified by P.W.1 are those of the accused as per Ex.C.1(a) to Ex.C.3(a), the Legal Notice as per Ex.C.4, Reply Notice as per Ex.C.5. During the course of trial the complainant has produced certified copy of share purchase agreement which is at Ex.C.6 and certified copy of Bank Memo as per Ex.C.7.
5. Prima facie case has been made against the Accused and summons was issued against the accused in turn the Accused has appeared before the Court and has been enlarged on bail and the substance of the accusation has been read over to him, to which he has pleaded not guilty and has claimed the trial.
6. In view of the principles of law laid down and as per the directions of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, C.C.No.12287/2017 J 8 after recording the plea of the accused, as he intended to set out his defence, and the case was posted for cross examination of complainant and complainant has been cross examined by the accused and closed his side.
7. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence and examined himself as DW1 and has produced as many as five documents during the course of cross examination of the complainant and marked as Ex.D.1 to Ex.D.5 i.e., certified copy of Memorandum of Understanding dated 08.11.2011 marked as Ex.D.1 and signature of the complainant marked as Ex.D.1(a) to Ex.D.1(d), certified copy of Computer downloaded copy obtained from www.kreatio.com/management marked as Ex.D.2, certified copy of Computer downloaded Trade Mark Registration Certificate pertains to Srishti Software Applications Pvt., Ltd., and certified copy of computer downloaded Trade Mark Register issued by Government of India marked as Ex.D.3, Memorandum of Understanding (No due agreement) marked as Ex.D.4, certified copy of Share Transfer Form marked as Ex.D.5, Signature of the C.C.No.12287/2017 J 9 complainant marked as Ex.D.5(a), Portion of the share transfer stamps marked as Ex.D.5(b) and closed his side.
8. Heard the arguments by both sides and perused the written argument submitted by the learned counsel for the Accused and perused the materials on record and decisions submitted by the learned counsel for the complainant i.e., (1) AIR 2019 Supreme Court 2446, (2) Crl.Appeal No.200042/2015 dated 04.07.2018, (3) AIR 2018 SC 3601, (4) 2021 (2) Karnataka High Court 517.
9. On the basis of complaint, evidence of complainant and documents the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued (1) cheque bearing No.000032 dated 27.01.2017 for Rs.5,00,000/, (2) cheque bearing 000033 dated 27.01.2017 for Rs.5,00,000/ and (3) cheque bearing No.000037 dated 27.01.2017 for Rs.2,00,000/ all the cheques were drawn on HDFC Bank Ltd., K.R Road Branch, Bangalore to discharge legally recoverable debt to the complainant and when the complainant has presented cheque for encashment through her banker but the said cheque has been dishonoured for the reasons "Stop Payment" on
08.02.2017 and the complainant issued C.C.No.12287/2017 J 10 legal notice to the accused on 22.02.2017 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
10. The above points are answered as under:
Point No.1: In the Affirmative Point No.2:As per final order for the following:
REASONS
11. Point No.1 : Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been C.C.No.12287/2017 J 11 committed an offence. The offence U/s.138 of N.I. Act presupposes conditions for prosecution of an offence which are as under:
1. Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
2. Cheque shall be presented for payment within specified time i.e., from the date of issue before expiry of its validity.
3. 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
4. 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 conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer in respect of 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.
C.C.No.12287/2017 J 12
12. It is also one of the essential ingredient 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 or 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.
13. In the present case, the Accused has not disputed his acquaintance with the complainant as admittedly the complainant and accused were the directors of Srishti Software Applications Pvt., Ltd., and running business. It is also not in dispute by the accused that, the cheques in question i.e., Ex.C.1 to Ex.C.3 are belongs to his account and signatures found at Ex.C.1(a) to Ex.C.3(a) are those C.C.No.12287/2017 J 13 of the accused. It is also not in dispute by the accused that, as per Ex.C.7 the cheques in question were presented through his bank and have been returned unpaid for the reason of "Payment Stopped by Drawer" dated 08.02.2017. Hence, it is a matter on record and has been proved that, the cheques in question were presented within their validity period and dishonored as per the bank endorsement issued by the banker of accused. It is also not in dispute that, the complainant after receipt of bank endorsement got issued legal notice through RPAD by his advocate as per Ex.C.4 dated 22.02.2017 and the said notice has been served on the accused as the accused issued reply to the said notice as per Ex.C.5 dated 04.03.2017, hence it can be held that, the complainant has also issued legal notice dated 22.02.2017 within 30 days from the date of receipt of bank endorsement with regard to dishonor of the cheques in question. Hence the complainant has complied the mandatory requirements as required U/s.138(a) to (c) of N.I.Act.
14. It is the specific claim of the complainant in his complaint and evidence that, he and accused being the directors of M/s Super Seva Services Pvt., Ltd., were holding their respective shares and he was holding 20% stake in the said company and desire to C.C.No.12287/2017 J 14 retire from the company and also decided to dispose off his 20% stake in the form of shares held by him, accordingly the accused has shown interest to purchase his 20% stake in the form of shares and resolution was passed by the complainant with effect from 08.11.2011 and he ceased to be the director of the said company and resigned to the said company and on 30.08.2013 he and the accused have finalized the worth of shares held by him at Rs.1,00,00,000/(Rupees One Crore only) and a formal transfer agreement came to be entered into between him and the accused and on that day of entering into the said transfer agreement, the shares running serial No.31867 to 50644 had also been handed over to the accused and in order to clear off the value of the shares the accused has issued postdated cheques as shown in para No.6 of the complaint and thereafter the accused has released certain payments allowing the cheques to encash leaving balance of Rs.50 lakhs and thereafter the accused has taken back the remaining cheques and issued fresh cheques for the outstanding due of Rs.50 lakhs which are shown in para No.7 of the complaint and in order to clear off the remaining amount has requested the complainant to present the cheques in question i.e., Ex.C.1 to Ex.C.3, C.C.No.12287/2017 J 15 accordingly he has presented the cheques in question on 07.02.2017 through his banker, but the said cheques were came to be dishonored for the reason of "Stop Payment" and thereafter he got issued legal notice to the accused calling upon him to comply the demands, but the accused issued untenable reply.
15. The complainant in support of his oral evidence and to prove his claim that, he was holding 20% stake in M/s Super Seva Services Pvt., Ltd., and sold the said 20% stake in the form of shares in favour of the accused for worth of Rs.1,00,00,000/ (Rupees One Crore only) has produced the document i.e., Share Purchase Agreement dated 30.08.2013 entered into between him and the accused which is at Ex.C.6. The perusal of recitals of the Ex.C.6 it appears that, the complainant and accused have entered into an agreement in respect of sale of shares of the complainant i.e., the complainant had agreed to sell his 24,178 shares from Serial No.31867 to 56044 held by him in the company i.e., M/s Super Seva Services Pvt., Ltd., to the accused i.e., Mr. Ajay Shankara Sharma and it is also seen that, the accused would discharge consideration by issuing the cheques i.e., (1) Cheque bearing No.042672 for sum of Rs.5,00,000/ dated C.C.No.12287/2017 J 16 28.02.2014, (2) Cheque bearing No.042673 for sum of Rs.5,00,000/ dated 28.02.2014, (3) Cheque bearing No.042674 for sum of Rs.5,00,000/ dated 28.02.2014, (4) Cheque bearing No.042675 for sum of Rs.5,00,000/ dated 28.02.2014, (5) Cheque bearing No.042676 for sum of Rs.5,00,000/ dated 28.02.2014, (6) Cheque bearing No.042694 for sum of Rs.5,00,000/ dated 28.02.2014, (7) Cheque bearing No.042678 for sum of Rs.5,00,000/ dated 28.02.2014, (8) Cheque bearing No.042679 for sum of Rs.5,00,000/ dated 28.02.2014, (9) Cheque bearing No.042680 for sum of Rs.5,00,000/ dated 28.02.2014, (10) Cheque bearing No.042682 for sum of Rs.5,00,000/ dated 28.02.2014, (11) Cheque bearing No.042684 for sum of Rs.5,00,000/ dated 30.08.2014, (12) Cheque bearing No.042685 for sum of Rs.5,00,000/ dated 30.08.2014, (13) Cheque bearing No.042686 for sum of Rs.5,00,000/ dated 30.08.2014, (14) Cheque bearing No.042687 for sum of Rs.5,00,000/ dated 30.08.2014, (15) Cheque bearing No.042688 for sum of Rs.5,00,000/ dated 30.08.2014, (16) Cheque bearing No.042689 for sum of Rs.5,00,000/ dated 30.08.2014, (17) Cheque bearing No.042690 for sum of Rs.5,00,000/ dated 30.08.2014, (18) Cheque bearing No.042681 for sum of Rs.5,00,000/ dated 30.08.2014, (19) Cheque C.C.No.12287/2017 J 17 bearing No.042692 for sum of Rs.5,00,000/ dated 30.08.2014 and (20) Cheque bearing No.042693 for sum of Rs.5,00,000/ dated 30.08.2014 all the above said cheques were drawn on Bank of India, HSR Layout Branch. It is also seen in Ex.C.6 that, the complainant and accused have signed to the Ex.C.6 and their respective signatures are marked as Ex.C.6(a) and Ex.C.6(b). Hence, the perusal of the contents of the Ex.C.6 it goes to show that, the accused had agreed to purchase the shares of the complainant i.e., 24,178 shares from Serial No.31867 to 56044 of the complainant and towards discharge of the consideration the accused has issued the above stated cheques amounting to total amount of Rs.99,25,000 (Rupees Ninety Nine Laks and Twenty Five Thousand only).
16. The accused in his defence has specifically denied the Ex.C.6 and issuance of the cheques shown in Ex.C.6 towards purchase of the shares from the complainant and also denied his signature found in Ex.C.6. But in this regard it is relevant here to refer the admitted facts by the accused with regard to purchase of the shares from the complainant. The accused in his reply dated 04.03.2017 given to the legal notice issued by the complainant which is at Ex.C.5, wherein relevant C.C.No.12287/2017 J 18 portion of admitted facts in Ex.C.5 reads as under:
"1. My client states that, it is true to say that, your client was the owner of shares pertaining to M/s Super Seva Services Pvt., Ltd., running from Sl.No.31867 to 56044 worth of Rs.1,00,00,000/ (Rupees One Crore Only) and the same was purchased by my client."
Further at para No.4 of Ex.C.5 read as under:
"4. With regard to Rs.1,00,00,000/ (Rupees One Crore Only) worth shares being purchased by my client, my client states that, it is the case of your client that alongwith my client had entered into a Memorandum of Understanding dated 08.11.2011 wherein it was agreed by your client to pay my client a sum of Rs.8,00,00,000/ (Rupees Eight Crore Only) within the stipulated time period of (3)years from the date of execution of the MOU dated 08.11.2011 and with respect to the same your client has failed to perform his part of the contract under the said MOU dated 08.11.2011 and till this day, the said obligation on the part of contract of your client is still unresolved. In furtherance of the same, accordingly my client in order to clear the C.C.No.12287/2017 J 19 obligation of your client as stated supra, had bought the shares owned by your client, for a sum of Rs.1.00 Crore and the same being adjusted by my client out of Rs.8.00 Crore which is liable to be paid by your client, and that in furtherance of the same, your client has orally instructed my client adjust the amount as stated supra and to purchase his share worth of a sum of Rs.1.00 Crore."
(Underlined by me) In addition to the above the accused / DW1 in his evidence has also admitted as under:
"Therefore in view of the payment of the said amount of Rs.8 Crores to be paid to me, he offered to transfer 20% his shares in Super Seva Services Pvt., Ltd., to my name which was valued by him at Rs.1 Crore."
The accused has also produced Share Transfer Form during the course of crossexamination of the complainant which is at Ex.D.5. On perusal of the recitals of Ex.D.5 it appears that, the complainant had transferred his 24,178 shares held by him in Super Seva Services Pvt., Ltd., company for consideration of Rs.One Crore in favour of the C.C.No.12287/2017 J 20 accused.
17. Hence from the above written admissions of the accused and also oral admissions makes it clear that, the accused has categorically admitted that, the complainant was the owner of M/s Super Seva Services Pvt., Ltd., Company's shares running from Serial No.31867 to 56044 i.e., 20% stake holder in the company and had decided to dispose off those shares to the accused and the accused agreed to purchase the said shares for total consideration amount of Rs.1,00,00,000/(Rupees One Crore only) from the complainant. Therefore the complainant has successfully proved his claim that, he was holding 20% stake in M/s Super Seva Services Pvt., Ltd., Company and has decided to dispose off his 20% stake in form of shares held by him i.e., the shares running from Sl.No.31867 to 56044 i.e., 24178 shares to the accused and accused has agreed to purchase the said shares for consideration of Rs.1,00,00,000/(Rupees One Crore only).
18. It is also relevant here to mention that, the accused has admitted that, he has purchased the said 24,178 shares from the complainant for Rs.1,00,00,000/(Rupees One Crore only), but the accused in his defence has stated that, as per Memorandum of Understanding dated 08.11.2011 C.C.No.12287/2017 J 21 the complainant was agreed to pay a sum of Rs.8,00,00,000/(Rupees Eight Crore only) to him within three years from the date of execution of MOU towards purchase of IPR of a product by name Kreatio, but has failed to perform his part of contract and in order to clear off his obligations had bought the shares owned by the complainant for sum of Rs.1,00,00,000/(Rupees One Crore only) and as per the oral instructions of the complainant the said shares have been purchased towards adjustment of the amount due by the complainant. But in order to prove the said defence accused has not produced any documents, on the contrary the fact of purchase of 24178 shares of the complainant for consideration amount of Rs.1,00,00,000/(Rupees One Crore only) by the accused remained as it is, in such circumstances it can be held that, though the accused has denied the Ex.C.6 during the course of crossexamination of the complainant, but has admitted the claim of the complainant i.e., with regard to shares held by the complainant in M/s Super Seva Services Pvt., Ltd., and has agreed to purchase the said shares i.e., 24178 shares running from Sl.No.31867 to 56044 from the complainant for consideration of Rs.1,00,00,000/(Rupees One Crore only) as shown in the Ex.C.6, therefore the C.C.No.12287/2017 J 22 complainant has proved that, the accused has entered into an agreement with him on 30.08.2013 for purchase of his shares held in M/s Super Seva Services Pvt., Ltd., as per Ex.C.6.
19. It is also the specific claim of the complainant in the complaint and evidence that, in order to clear off the value of his shares the accused has issued postdated cheques with a promise to honor the cheques as shown at para No.6 of the complaint and thereafter the accused has released certain payments allowing the certain cheques leaving balance of Rs.50 lakhs and thereafter has taken back previous cheques from him and issued cheques for outstanding of Rs.50 lakhs which are shown at para No.7 of the complaint and requested him to present the cheques in question to clear off the remaining amount accordingly he has presented the said cheques through his banker, but same have been dishonored with an endorsement of "Stop Payment" and thereafter he got issued legal notice to the accused, but inspite of service of the notice accused did not complied the demands of notice, but has issued untenable reply. In support of the oral evidence the complainant has produced the original cheques dated 27.01.2017 which are marked as Ex.C.1 to Ex.C.3 and bank endorsement which is at C.C.No.12287/2017 J 23 Ex.C.7, copy of legal notice which is at Ex.C.4 and reply given by the accused is at Ex.C.5.
20. It is relevant here to mention that, on careful perusal of the reply notice i.e., Ex.C.5 given by the accused wherein though he has admitted that, complainant was the owner of shares pertaining to M/s Super Seva Services Pvt., Ltd., running from Sl.No.31867 to 56044 worth of Rs.1,00,00,000/ and same was purchased by him, but he denied the issuance of cheques in question and other cheques as claimed by the complainant, but he contends that, as per the oral instructions of the complainant, the said amount of Rs. 1 Crore being adjusted by him out of Rs.8.00 Crore which is liable to be paid by the complainant as per MOU dated 08.11.2011. Hence the defence of the accused itself sufficient to hold that, the accused has purchased the shares of the complainant for consideration of Rs.1 Crore and admittedly has not paid the amount of Rs.1 Crore to the complainant and according to the accused same has been adjusted towards the alleged amount of Rs.8 crores due to him by the complainant, therefore unless and until the accused proved that, the said amount of Rs.1 Crore adjusted towards the amount due by the complainant as alleged by him it can be held that, C.C.No.12287/2017 J 24 the cheques in question and other cheques as claimed by the complainant at para No.7 of his complaint are issued towards clearing of the balance amount of Rs.50 lakhs covering part of the shares amount. It is also relevant here to mention that, the accused / DW1 in his cross examination has categorically admitted that, in his reply he have not denied the issuance of 20 cheques and also admitted that, the cheques in dispute bares his signatures and the complainant in his notice has mentioned that, the cheques dispute have been issued for Rs.1 Crore, but he contends that, he had not personally issued the cheques to the complainant and on behalf of the company the cheques have been issued and cheques issued on behalf of the company for Rs.1 Crore encashed by the complainant. The accused has also admitted that, out of 20 cheques mentioned in legalnotice and complaint some of the cheques were encashed by the complainant, but he volunteers that, the said cheques are not in cheques in dispute and also admitted that, out of 20 cheques mentioned in the complaint and legal notice the cheques amount worth Rs.50 lakhs were encashed by the complainant, but he volunteers that, since he is intending to help the complainant for the said reason the cheques worth of Rs.50 lakhs were C.C.No.12287/2017 J 25 encashed and the remaining have been returned to him. The accused has also admitted that, the disputed cheques i.e., Sl.No. 1 to 13 bares his signatures and the signatures found at Ex.C.1 (a) to Ex.C.3(a) are his signatures and also admitted that, in his reply he have stated that, the cheques in dispute have taken by the complainant.
21. Hence, from careful perusal of the above stated admissions of the accused in his cross examination makes it clear that, the accused has categorically admitted that, he has not denied the issuance of 20 cheques, which are stated by the complainant in the legal notice and also in complaint and accused has also admitted that, out of the said 20 cheques the cheques amount worth of Rs.50 lakhs were encashed by the complainant and remaining cheques have been returned to him, but the accused contended that, since he intending to help the complainant for the said reasons cheques worth of Rs.50 lakhs were encashed and remaining have been returned to him, but the said defence cannot be acceptable one as there are no documents or evidence produced by the accused to show that, the cheques amounts worth of Rs.50 lakhs encashed by the complainant out of 20 cheques and the remaining cheques have been returned to him only C.C.No.12287/2017 J 26 to help the complainant, therefore the defence of the accused cannot be acceptable one, on the contrary the accused categorically admitted the claim made by the complainant that, he has issued 20 cheques as stated by the complainant at para No.6 of the complaint and in the legal notice towards clear off the value of the shares i.e., Rs.1 Crore and out of the said 20 cheques certain cheques the accused has made payment worth of Rs.50 lakhs by leaving balance amount of Rs.50 lakhs. The accused has also admitted that, he has received back the remaining cheques which were not encashed by the complainant and also admitted that, he has issued the cheques in dispute and other cheques for Rs.1 Crore in favour of the complainant, but he contends that, the said cheques have not been personally issued by him, but have been issued on behalf of the company for Rs.1 Crore and same have been encashed by the complainant, but in order to prove the said defence the accused has not produced any documents, therefore in the absence of material documents it cannot be held that, the cheques which have been issued for Rs.1 Crore by the company as alleged by the accused, but on the contrary the fact of issuance of disputed cheques for Rs.1 Crore in favour of the complainant remained as it is, in such C.C.No.12287/2017 J 27 circumstances it can be held that, the accused has categorically admitted that, the cheques i.e., Sl.No.1 to 13 shown in the complaint and legal notice and the cheques in question issued in favour of the complainant and the said cheques bares the signatures of the accused.
22. Therefore on combined reading of the contents of the reply i.e., Ex.C.5 issued by the accused and admissions of the accused in his cross examination makes it clear that, the complainant has proved that, the cheques in question i.e., Ex.C.1 to Ex.C.3 belongs to the accused and the signatures found in Ex.C.1(a) to Ex.C.3(a) are those of the accused. The complainant has also proved that, the said cheques in question have been dishonored on their presentations by the complainant through his banker as per Ex.C.7 for the reason of "Payment Stopped by the Drawer" and thereafer the complainant got issued legal notice to the accused as per Ex.C.4 and it was duly served on the accused, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initial presumptions can be drawn in favour of the complainant U/s.118a and 139 of the N.I. Act. Consequently it is for the C.C.No.12287/2017 J 28 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 complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused unless and until the said presumptions are rebutted by the Accused even in the absence of documents of the complainant in respect of liability in question. In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was adequate C.C.No.12287/2017 J 29 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 was his, statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15032018 between ROHITBHAI C.C.No.12287/2017 J 30 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 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 C.C.No.12287/2017 J 31 signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the 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 C.C.No.12287/2017 J 32 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 cheque was issued not for any debt or other liability ". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated: 15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the C.C.No.12287/2017 J 33 crossexamination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough". In another decision of Hon'ble Apex Court of India in Crl. Appeal Nos. 132/220 in the case of D.K.Chandel Vs. M/s. Wockhardt (L) wherein the Hon'ble Apex Court held that "production of the account books/cash book may be relevant in the civil court, may not be so in the criminal case filed under section 138 of NI Act while restoring the trial court judgment, 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 section 138 of NI Act. This is C.C.No.12287/2017 J 34 because of the presumption raised in favour of the holder of cheque. 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."
a
23. 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 a presumption is drawn unless the Accused rebutted the presumption available to the complainant it cannot be held that, the cheque issued was not towards legally C.C.No.12287/2017 J 35 recoverable debts 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 mandatory requirements and has proved that, the Accused has issued the cheques in question in his favour and also admitted that, the cheques in question belongs to him and signatures appearing on the cheques are those of signature of his signatures, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act.
24. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the defence in the written argument with regard to legally recoverable debt is not in existence and the other aspects with regard to the ingredient of Sec.138 of N.I. Act not attracted to the present case of the complainant as the cheques are not at all issued by the accused and there is no enforceable debt due by the accused to the complainant cannot be acceptable one. In this case also the learned defence counsel in the written argument contended that, the complainant has to prove his claim by producing his evidence as if it is required for proving his debt before the Civil Court, but the said line of argument cannot be acceptable one in view of the C.C.No.12287/2017 J 36 principles of law laid down by the Hon'ble Apex court of India in the above referred decisions, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheques in question were drawn for consideration as the Accused has admitted the cheques in question belongs to his account and signatures found in the cheques in question are also those of his signatures, therefore the arguments canvassed by the learned counsel for the accused in the written argument at para No.6 to 12 and para No.17 to 23 are not sustainable in law and not accepted in view of the reasons stated above at the time of discussion of the oral and documentary evidence adduced by the complainant and accused.
25. It is relevant here to mention that, the Accused in order to rebut the presumption available to the complainant U/s.118 and 139 of N.I.Act himself examined as DW.1, in his evidence has stated that, in the year 2011 the complainant wanted to quit from the Srishti Software Pvt., Ltd., company and wanted the IPR of a product by name Kreatio and in view of purchasing of the said IPR the complainant agreed to pay Rs.8 Crores to him as per MOU at Ex.D.1, however even after lapse of two years from the date of MOU he failed to pay the C.C.No.12287/2017 J 37 agreed amount and as per MOU, complainant was required to pay the said amount to him part wise in every three months for three years, but complainant defaulted in paying the said amount and in the meanwhile the Bank of India issued notice to him and the complainant calling upon them to settle the dues and that otherwise they would be sued by the bank, hence he contacted the complainant in July 2013 and informed him about the same and after few days the complainant approached and informed him that, he did not have Rs.8 Crores to the paid to him and lieu of the payment of said amount he offered to transfer 20% of his share in Super Seva Services Pvt., Ltd., to his name which was valued at Rs.1 Crore, accordingly he has signed No Due Agreement as per Ex.D4 on 30.08.2013 and on 06.09.2013 he informed about transfer of the shares in his name and also signed on the share transfer form as per Ex.D.5(a) and thereafter the complainant has also transferred his share held by him in the other companies in his name and thereby he adjusted around Rs.5 and half Crores towards the sum of Rs.8 Crores and still owes Rs.2 1/2 Crores to him. The accused / DW1 has also stated that, half of the cheque book pertaining to his personal account in HDFC Bank, Banashankari IInd Stage Branch C.C.No.12287/2017 J 38 consisting around 20 cheque leaves were found missing from his office and the cheques in dispute were not issued by him to the complainant towards dischare of any liability and he used to keep his blank signed cheques relating to his personal account as well as companies account and after the incident he have not been keeping such signed blank cheque in his office. The accused has produced as many as five documents during the course of cross examination of the complainant and marked as Ex.D.1 to Ex.D.5 i.e., certified copy of Memorandum of Understanding dated 08.11.2011 marked as Ex.D.1 and signature of the complainant marked as Ex.D.1(a) to Ex.D.1(d), certified copy of Computer downloaded copy obtained from www.kreatio.com/management marked as Ex.D.2, certified copy of Computer downloaded Trade Marks Registration Certificate pertains to Srishti Software Applications Pvt., Ltd., and certified copy of computer downloaded Trade Mark Register issued by Government of India marked as Ex.D.3, Memorandum of Understanding (No due agreement) marked as Ex.D.4, certified copy of Share Transfer Form marked as Ex.D.5, Signature of the complainant marked as Ex.D.5(a), Portion of the share transfer stamps marked as Ex.D.5(b).
C.C.No.12287/2017 J 39
26. On careful considering the defence of the accused and documents produced by the accused i.e., Ex.D.1 to Ex.D.4 and evidence of accused, according to the accused the complainant has purchased the IPR of a product by name Kreatio as he wanted quit the Srishti Software Applications Pvt., Ltd., in the year 2011 for sum of Rs.8 Crores and as per the MOU i.e., Ex.D.1 he has to pay the said amount of Rs.8 Crores within three years from the date of MOU, but he did not paid the said amount and in lieu of the payment of the said amount of Rs.8 Crores the complainant offered to transfer his 20% shares held in Super Seva Services Pvt., Ltd., to his name which were valued at Rs.1 Crore, accordingly he has signed on Ex.D.4 i.e., No Due Agreement on 30.08.2013 and shares were transferred to his name on 06.09.2013. Hence the above said defence of the accused is taken into consideration, the accused categorically admitted that, the alleged transaction of Rs.8 Crores as per Ex.D.1 stated to have been between him and the complainant for purchase of IPR of a product by name Kreatio and the transaction in question i.e., purchase of shares of the complainant i.e., 20% stakes held by the complainant in M/s Super Seva Services Pvt., Ltd., for worth of Rs.1 Crore by the C.C.No.12287/2017 J 40 accused are not one and the same and the said transactions are independent and separate transactions. It is also relevant here to mention that, on careful perusal of the recitals of Ex.D.4 i.e., No Due Agreement alleged have been entered into between the accused and the complainant it is nowhere mentioned or reflected about offering of the complainant to transfer 20% of his share held in Super Seva Services Pvt., Ltd., in the name of the accused which were valued at Rs.1 Crore and the said transfer of shares made by the complainant in lieu of payment of the amount of Rs.8 Crores due by him as per the MOU dated 08.11.2011 i.e., Ex.D.4, therefore if really the complainant in lieu of the payment of the amount of Rs.8 Crores to be paid to the accused has offered to transfer his 20% shares valued at Rs.1 Crore in favour of the accused definitely the said fact would have been appeared or reflected in Ex.D.4, but nothing has been forth coming in Ex.D.4 about transfer of 20% of share of the complainant and the said amount has been adjusted towards the alleged due of Rs.8 Crores by the complainant. Hence, the accused has miserably failed to prove that, the complainant has transfer his 20% share held in Super Seva Services Pvt., Ltd., valued at Rs.1 Crore and the said amount has been C.C.No.12287/2017 J 41 adjusted towards the sum of Rs.8 Crores which was alleged to be paid by the complainant as per Ex.D.4.
27. It is also relevant here to mention that, as per the recitals of Ex.D.4 i.e., No Due Agreement the accused has admitted that, as on 30.08.2013 the the second party i.e., accused herein confirmed that, their exists no dues from the first party i.e., complainant herein, hence it goes to show that, as per the recitals of Ex.D.4 i.e., as on the date of Ex.D.4 their exist no dues from the complainant towards part of internal structure and as per MOM entered between complainant and accused on 08.11.2011, hence, the accused himself admitted that, their exist no dues from the complainant in respect of the claim made by him under Ex.D.1 i.e., MOU dated 08.11.2011, despite of it the accused in the legal notice has claimed that, in fact by looking into the facts the complainant still liable to pay sum of Rs.7 Crore towards resolving his obligation with regard to his part of contract pertaining to MOU dated 08.11.2011 and directed to clear his obligation by clearing balance amount of Rs.7 Crores and the accused in his evidence claiming that, the complainant has transferred his shares which were held by him in the Super Seva Services Pvt., Ltd., i.e., 20% shares valued at Rs.1 Crore and other C.C.No.12287/2017 J 42 shares held in the other companies in his name and there by adjusted around Rs.5 ½ Crores towards the sum of Rs.8 Crores to be paid to him and still owes Rs.2 ½ Crores to him. Hence on combined reading of the documentary evidence i.e., Ex.D.1 and Ex.D.4 and the contents of the reply notice i.e., Ex.C.5 and evidence of the accused itself goes to show that, the accused as on the date of issuing of legal notice i.e., 04.03.2017 claimed that, complainant still liable to pay sum of Rs.7 Crores and as on the date of evidence i.e., dated 10.04.2019 claimed that, complainant still owes Rs.2 ½ Crores, but whereas in Ex.D.4 the accused himself admits that, as on 30.08.2013 their exists no dues from the complainant in respect of the MOU dated 08.11.2011 , hence the claim made by the accused in the legal notice and in his evidence itself negativates by his own documentary evidence i.e., Ex.D4. If really the Ex.D.4 entered into between the complainant and the accused on 30.08.2013 by declaring that, their exists no due from the complainant in respect of Ex.D.1 MOU, the accused ought not have been claimed alleged balance amount as claimed by him in his legal notice and in his evidence, therefore the claim made by the accused in his legal notice and evidence is contrary to his own C.C.No.12287/2017 J 43 document i.e., Ex.D.4, in such circumstances it cannot be held that, the complainant had transferred his 20% of shares held in Super Seva Services Pvt., Ltd., valued at Rs.1 Crore in the name of accused and thereby complainant adjusted the said amount of Rs.1 Crore in lieu of alleged payment of Rs.8 Crores due by him.
28. It is also relevant here to mention that, as per the terms and conditions of the MOU i.e., Ex.D.1 if the complainant fails to comply the alleged payment of Rs.8 Crores to the accused in the time limit fixed under Ex.D.1, the accused at liberty to terminate the agreement as per the terms of Clause(5) of Ex.D.1 and it is also mentioned in Clause (13) of Ex.D.1 that, a detailed execution plan has to be mutually agreed and signed off before 15 th December 2011 and associated penalty and termination Clauses, but the accused has not produced any such execution plan and this fact is also admitted by the accused in his cross examination, in such circumstances it is for the accused to terminate the agreement i.e., Ex.D.1 in case of default committed by the complainant as per the terms and conditions involved in Ex.D.1. In addition to that, the accused himself stated in his crossexamination to a suggestion that, as per Ex.D1 C.C.No.12287/2017 J 44 MOU the complainant has to transfer his share to him, but he volunteers that, the Ex.D1 MOU pertains to Sristi Software Applications Pvt., Ltd., but whereas Ex.D.5 pertains to Super Seva Services Pvt., Ltd., hence it goes to show that, Ex.D.1 is nowhere concern to the transaction in question as admitted by the accused himself and Ex.D.1 and Ex.D.5 are not one and the same.
29. It is the specific defence of the accused that, half of the cheque book pertaining to his personal account in HDFC Bank, Banashankari IInd Stage Branch consisting around 20 cheque leaves were found missing from his office and the cheques in dispute were not issued by him to the complainant towards discharged of any liability and he used to keep his blank signed cheques relating to his personal account as well as companies account and after the incident he have not been keeping such signed blank cheque in his office. It is also the defence of the accused that, he has issued stop payment intimation to the bank with regard to cheques in dispute. It is also relevant here to mention that, the accused in his reply i.e., Ex.C.5 has contended that, the cheques in question were allegedly taken into possession by the complainant without any information or knowledge and presented C.C.No.12287/2017 J 45 the said cheques which were not in his possession, accordingly he had intimated the missing of cheque to his banker and instructed to not to make any payments pertaining to the said missing cheques. But in order to prove the said defence the accused has not produced any documents to show that, he had given instructions or intimation to his banker stating that, the cheques in question were taken into possession by the complainant and has instructed not to make any payments, in such circumstances in the absence of material documents only on the basis of self serving that too interested say of the accused it cannot be held that, the cheques in question were taken into possession by the complainant without any information or knowledge. It is also relevant here to mention that, the accused was having knowledge about the possession of the cheques in question by the complainant prior to the presentation of the said cheques by the complainant to the banker of the accused without his knowledge, definitely the accused would have issued notice to the complainant by calling upon for return of the alleged cheques which were taken by the complainant or initiated legal action against the complainant either by filing the complaint to the concerned police or before the courts of law alleging that, the cheques in C.C.No.12287/2017 J 46 question were alledgly taken into possession by the complainant without information or his knowledge and intending to present the said cheques to the bank or their encashment, but no such efforts have been made by the accused to get return of the cheques in question from the complainant, therefore the conduct of the accused in nontaking of action for return of cheques in question may leads to draw an adverse inference against the accused that in order to avoid laibility to pay the cheques amounts in question, the accused has taken such defence and same cannot be acceptable one. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt cheques allegedly issued by accused towards repayment of debt Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and C.C.No.12287/2017 J 47 never asking their return for 7 years, unnatural
- Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt Conviction, Proper". It is true that, the above principles of law pertains to the case of different set of facts but the proposition of law held by the Hon'ble Apex Court is aptly applicable to the case on hand since in the present case also the accused has not made any efforts to get return of cheques in question alleged to have been taken by the complainant without any information or knowledge, under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused that, the cheques in question were issued by the accused towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted his signatures and cheques in question belongs to the account o the Accused. Therefore for the above stated reasons the arguments canvassed by the learned counsel for the accused at para No.17 to 22 C.C.No.12287/2017 J 48 are not sustainable in law and cannot be acceptable one.
30.It is also relevant here to mention that, it is not the defence of the accused that, the cheques which were misplaced by the accused were taken by the complainant and has filled up the said cheques and by misusing the said cheques i.e., cheques in question has presented the same to the bank in order to gain illegal money or to cheat the accused and has filed this complaint, therefore it is for the accused to prove that, how the cheques in question have been entered into the hands of the complainant, but the accused except oral say nothing has been produced before the court to show that, how the cheques in question have been entered into the hands of complainant. It is also important to note here that, the Accused has not denied or disputed that the cheques in question as well as the signatures therein do belong to the account of Accused and though he has taken the specific defence that, the cheques in question were misplaced and was not aware who had taken the cheques, but the Accused has not proved the said defence by producing cogent and convincible evidence , in such circumstances it can be held that, the Accused has failed to explain and prove how the C.C.No.12287/2017 J 49 cheques in question have come to the possession of the complainant, this would also give rise to an adverse inference against him, this proposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa" and in the decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the cheque entered into the hands of complainant".
Therefore for the above said reasons the defense taken by the accused cannot be acceptable one.
31. The learned counsel for the accused at para No.14 of his written argument specifically contended that, the cheques in question were misplaced and the accused was not aware who had taken the cheques and after receiving the legal notice the accused had given reply to the said notice for return of the misused cheques and also contended that, there is difference in ink / writing, style with regard to signature and filling of cheques, hence it goes to show that, the complainant has misused the cheques in question. But the accused in his cross examination has admitted that, the cheques in C.C.No.12287/2017 J 50 dispute bares his signatures i.e., Ex.C.1(a) to Ex.C.3(a) are his signatures and when he received legal notice then only he came to know that, cheques in dispute are in the custody of the complainant and even after receipt of notice he has not filed any complaint against the complainant regarding the cheques in dispute i.e., Ex.C.1 to Ex.C.3 and in his reply he has stated that, the cheques in disputes have taken by the complainant, hence it goes to show that, the complainant is having knowledge and aware of the fact that, prior to the presentation of the cheque by the complainant, the cheques in question were in the possession of the complainant, but he is falsely deposing before the court that, only after receipt of legal notice he came to know that the cheques in dispute are in the custody. The accused himself admitted that, the cheques in dispute bares his signatures, in such circumstances the arguments canvassed by the learned counsel for the accused cannot be acceptable one. However, even for sake of discussion if it is assumed that, the contents of the subject cheques are not filled in by the Accused even under such circumstances also, unless and until the Accused has proved his defence by producing cogent and convincible evidence, it cannot be held that, the contents of the cheques C.C.No.12287/2017 J 51 have been filled in by the complainant. In this regard, it is a relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of presumed fact." In the present case though the Accused has denied the contents of the cheques in question except his signatures, but he has failed to prove his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I. Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case C.C.No.12287/2017 J 52 by discharging his burden by complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh 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 C.C.No.12287/2017 J 53 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 such circumstances even if it is assumed that, the complainant admitted that, the contents of cheques in question were filled in by him also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the cheque was filled in by the complainant in presence of the Accused at his consent and the said cheque has been issued towards discharge of legally recoverable debt. It is also relevant here to mention that, once signature on the negotiable instrument act is admitted, in that circumstances sec. 20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High C.C.No.12287/2017 J 54 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 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., C.C.No.12287/2017 J 55 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 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, C.C.No.12287/2017 J 56 whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, 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 C.C.No.12287/2017 J 57 instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law of Hon'ble Apex court of India and also Hon'ble High Court of Karnataka and Madras referred above, In the present case the Accused has admitted the signatures on Negotiable Instrument i.e. cheques in question, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or C.C.No.12287/2017 J 58 fabricated the cheques in question 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 contents have been filled by different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it.
32. Therefore for the above said reasons, the accused has miserably failed to prove that, the complainant had offered to transfer his 20% shares held in Super Seva Services Pvt., Ltd., in his name which were vlaued at Rs.1 Crore in lieu of payment of Rs.8 Crores alleged to be due by the complainant and the complainant orally instructed to adjust the said amount of Rs.1 Crore towards payment of the alleged amount of Rs.8 Crores due by complainant to the accused and the accused has not issued the cheques in question to the complainant towards clearing of the balance amount covering the shares amount of Rs.50 lakhs. Hence for the above said reasons the arguments canvassed by the learned counsel for the Accused in the written argument cannot be acceptable and are not sustainable in view of the discussions made and findings given by the court while appreciating the oral and documentary evidence of the complainant and Accused and the C.C.No.12287/2017 J 59 Accused has miserably failed to rebut the presumption available to the complainant as U/s.118a and 139 of N.I. Act.
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 the complainant has successfully established beyond all reasonable doubt that, the Accused has agreed to purchase 20% of the stakes in the form of shares i.e., total shares of 24178 i.e., Sl.No.31867 to 56044 held by the complainant in M/s Super Seva Services Pvt., Ltd., for consideration of Rs.1 Crore and in order to clear off the value of the shares the accused has issued the 20 postdated cheques as shown in para No.6 of the complaint and thereafter the accused has released certain payments allowing certain cheques by leaving a balance of Rs.50 lakhs and taken back the remaining cheques from the complainant and issued 13 cheques for the oustanding amount of Rs.50 lakhs which was shown at para No.7 of the complaint and thereafter to clear off the said amount the accused has requested to present the cheques in question i.e., Ex.C.1 to Ex.C.3 to the complainant accordingly he has presented the said cheques through his banker and C.C.No.12287/2017 J 60 same were returned dishonoured with an endorsement of "Payment Stopped by the Drawer"
and thereafter he got issued legal notice to the accused and the said notice was served on him inspite of it, the Accused did not paid the cheques amount, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.C.1 to Ex.C.3 Cheques, in such circumstances the Accused has committed an offence punishable U/s.138 of N.I. Act, and is liable to pay the fine amount to the complainant, accordingly for the above said reasons this point is answered in the 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 be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation C.C.No.12287/2017 J 61 is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following : ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.13,25,000/= (Rupees Thirteen Lakhs and Twenty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (6) Six 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.13,00,000/= (Rupees Thirteen Lakhs 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.25,000/= (Rupees Twenty Five Thousand only) shall be defrayed as C.C.No.12287/2017 J 62 prosecution expenses to the state.
Bail bond of Accused stands cancelled.
. Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 31st day of August 2021).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the complainant.
PW1 : Sri. Deepak Kumar
2. List of documents exhibited on behalf of the Complainant: Ex.C1 to C3 Original Cheques dated 02.02.2017; Ex.C1(a)toC3(a) Signature of the Accused; Ex.C4 Office copy of the Legal Notice;
Ex.C5 Reply Notice;
Ex.C6 Certified copy of Share Purchase
Agreement;
Ex.C7 Certified copy of Bank Memo;
3. List of witness/s examined on behalf of the Accused: DW.1 : Sri. Ajay Shankara Sharma C.C.No.12287/2017 J 63
4. List of documents exhibited on behalf of the Accused: Ex.D1 Certified copy of Memorandum of Understanding;
Ex.D1(a) to 1(d) Signatures of the complainant; Ex.D2 Certified copy of Computer downloaded copy pertains to www.kreatio.com/ managment website;
Ex.D3 Certified copy of Computer downloaded Trade Mark Registration Certificate pertains to Srishti Software Applications Pvt., Ltd., and Computer downloaded Trade Mark Register issued by Govt., of India;
Ex.D4 Certified copy of Memorandum of Understanding (No Due Agreement);
Ex.D5 Certified copy of Share Transfer Form; Ex.D5(a) Signature of the complainant; Ex.D5(b) Portion of Seal i.e., Share Transfer Stamps;
(SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
C.C.No.12287/2017 J 64 31.08.2021 Case called out, Counsel for the complainant and complainant present. Accused and Counsel for the accused present, Judgment pronounced since the fine amount and default sentence is only imposed against the Accused, no separate sentence is imposed against the Accused (vide separate judgment.) ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.13,25,000/= (Rupees Thirteen Lakhs and Twenty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (6) Six 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.13,00,000/= (Rupees Thirteen Lakhs only) shall be paid as compensation to the C.C.No.12287/2017 J 65 complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.25,000/= (Rupees Twenty Five Thousand only) shall be defrayed as prosecution expenses to the state.
Bail bond of Accused stands cancelled.
. Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.