Bangalore District Court
Maygalageri Basappa Chennappa vs M/S. Punnami Properties on 1 August, 2024
KABC030263322021
Presented on : 12-04-2021
Registered on : 12-04-2021
Decided on : 01-08-2024
Duration : 3 years, 3 months, 20 days
IN THE COURT OF THE XXI ACJM, BENGALURU
Dated: This the 01st day of August, 2024
Present:
SRI.GIRISH CHATNI, B.A.,LL.B.,(Spl)
XXI ACJM, Bengaluru
C.C.No.9674/2021
Complainant : Sri.Maygalageri Basappa
Chennappa,
S/o Basappa.H.M,
Aged about 42 years,
R/at Harihar Taluk,
Nandi Gavi (Post),
Davanagere District.
(By Sri.S.V, Adv)
V/s
Accused : 1) J.Kondappa Naidu
M/s. Punnami Properties,
Managing Partner,
No.05, Ground Floor,
Punnami Bliss Apartment,
2 CC.No.9674/2021
Sy.No.95/2, Croma Road,
Off. Marathahalli,
Outer Ring Road, Panathur Village,
Bangalore - 560087.
Also Address at:
Flat No.20201,
Bhuvana Greens Apartments,
Kasavanahalli Main Road,
Off Sarjapur Road,
Next to BRS Global School,
Bengaluru - 560 035.
2) Pruthivish Babu.N,
M/s. Punnami Properties,
Partner,
No.59, Near Lower Government School,
Sarjapura, Bikkanahalli,
Handenahalli, Bangalore - 562 125.
(Accused No.1 By Sri.V.M.L, Adv.)
(Accused No.2 By Sri.H.E.P, Adv.)
JUDGMENT
This case emanates from a private complaint filed by the complainant alleging that the accused persons have committed an offence punishable under section 138 of Negotiable Instruments Act, 1881.
2. THE ESSENTIAL FACTS IN BRIEF.
It is the case of the complainant that, he is an individual and had entered into a Deed of Indemnity dated 24.04.2017 with the 3 CC.No.9674/2021 accused i.e., M/s. Punnami Properties, Rep. By its partners Sri.J.Kondappa Naidu and Sri.Prithvish Babu.N. It is further contended that, the accused persons were engaged in the business of developing the land and in the course of its business, they had entered into a registered Joint Development Agreement (JDA) dated 04.03.2015 (Doc No.5080/2014-15) with Sri.P.Munivenkatappa and Sri.P.Venugopal, being the land owners of residentially converted land bearing Sy.No.95/3 (Old Sy.No.95) measuring 09 guntas, BBMP Katha No.1150, Municipal No.115, situated at Panathur Village, Varthur Hobli, Bangalore Urban District. It is further contended that, the complainant after understanding the development scheme named as 'Punnammi Bliss Annex' intended to purchase a flat bearing No.305, 3rd Floor measuring 1560 sq ft of super built up area with one covered car parking space along with 378.77 sq ft of UDS, in the said scheme. It is further contended that, it is agreed by the accused at negotiated special price of Rs.60,00,000/- for the purchase of flat allotted to the complainant and the complainant had made an advance down payment of Rs.30,00,000/- through cheque bearing No.860835 dated 20.04.2017 drawn on SBI Bank, VV Puram Branch and the receipt of 4 CC.No.9674/2021 the said amount is acknowledged by the accused under the Deed of Indemnity dated 24.04.2017.
2(i). The complainant further contended that, as per the clause (v) of the Deed of Indemnity dated 24.04.2017, the investment made by him can be bought back by exercising the buyback option in terms of clause (ii) of the Deed of Indemnity or can proceed to register the allotted flat in his name. It is further contended that, in terms of clause (ii) of Deed of Indemnity dated 24.04.2017, the accused No.1 had issued a cheque bearing No.000327 dated 30.06.2020 for a sum of Rs.33,60,000/- drawn on Andhra Bank, Kasavanahalli Branch. It is further contended that, the complainant has presented the above said cheque for encashment through his banker i.e., State Bank of India, Sajjan Rao Circle Branch, but to the shock and surprise of the complainant said cheques returned as 'Funds Insufficient' as per the bank memo dated:01.07.2020. Thereafter, the complainant issued 30 days prior notice dated:01.09.2020 to the accused in terms of Deed of Indemnity and expressed his desire to encash the amount vide cheque issued by the respondent towards indemnification of the 5 CC.No.9674/2021 investment made by him in case of failure to register the flat allotted by furnishing all the required documents. It is further contended that, the said notice did not evoke any response from the respondent, thus, the complainant once again deposited the said cheque through her banker, but the same was returned dishonoured with a memo dated 01.07.2020 as 'Funds Insufficient'. Thereafter, the complainant issued Legal notice dated:27.10.2020 to the accused through R.P.A.D calling upon him to pay the amount covered under the cheques within the stipulated period and the same was served to the accused persons. Despite of service of notice, neither the accused repaid the amount covered under cheque nor replied to the said notice. Therefore, the complainant filed the present complaint against the accused persons alleging the commission of offence punishable under section 138 of Negotiable Instrument Act.
3. The complainant has led his pre summoning evidence. He has filed his affidavit by way of sworn statement in lieu of oral evidence, in which, he has reiterated the complaint averments. In support of his oral evidence, PW.1 has produced 07 documents, which are marked as Ex.P.1 to Ex.P.07. The complainant further examined on 6 CC.No.9674/2021 15.04.2024 and got marked one document as per Ex.P.8 and closed his side.
4. Prima-facie case has been made out against the accused No.1 and 2 and have been summoned vide order of the same date. Accused No.1 and 2 have appeared before the court and have been enlarged on bail. The substance of accusation was read over to them, to which they pleaded not guilty and claimed to be tried.
5. In view of the directions of the Hon'ble Apex Court in a decision reported in (2014) 5 SCC 510 (Indian Bank Association & Others V/s Union of India), the affidavit filed in lieu of sworn statement was treated as evidence of complainant. Thereafter, the accused No.1 and 2 were examined as provided under section 313 of Cr.P.C., by explaining the incriminating evidence available against them. The defence of the accused No.1 and 2 are of total denial one. During the course of cross examination of PW.1, the accused got marked 19 documents as Ex.D.1 to Ex.D.19.
6. Heard both sides. Both the counsel for complainant and accused No.1 have filed their Written Arguments. The counsel for 7 CC.No.9674/2021 accused No.1 relied on the decision reported in (2023) 1 Supreme Court Cases 578 between Dashrathbhai Trikambhai Patel V/s Hitesh Mahendrabhai Patel and Another.
7. The counsel for complainant also relied on the follwoing decisions
i) 2022 SCC Online SC 1131.
ii) (2001) 6 Supreme Court Cases 463
8. Perused the materials placed before the court.
9. The following points would arise for consideration.
1. Whether the complainant proves that the accused No.1 has issued cheque bearing No.000327 dated 30.06.2020 for an amount of Rs.33,60,000/- towards discharge of legally enforceable debt and same was returned unpaid on account of "Funds Insufficient"
and thereby committed an offence punishable under section 138 of Negotiable Instrument Act?
2. What Order?
10. My findings on the above points are as under:-
Point No.1: In the "Negative"
Point No.2: As per the final orders for the following:
8 CC.No.9674/2021
REASONS
11. Point No.1:
Section 138 of the Negotiable Instrument Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence punishable U/s 138 of Negotiable Instrument Act are ;
(I) Drawing up of a cheque by the accused towards payment of an amount of money, for discharge, in whole or in part, of any debt or any other liability.
(ii) Return of the cheque by the Bank as unpaid.(iii) The drawer of the cheque fails to make the payment of the said amount within 15 days of the receipt of notice under the proviso (b) to Section 138.
The explanation appended to the section provides that the debt or other liability, for the purpose of this section means a legally enforceable debt or other liability.
12. Apart from this, section 139 of Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms;
"It shall be presumed unless the contrary is proved, that - the holder of the cheque received the cheque, of 9 CC.No.9674/2021 the nature referred to him section 138, for the discharge in whole or in part, of any debt or other liability."
13. Also, Section 118 of the N.I.Act states - Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration:--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date:--that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance:--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer:--that every transfer of a negotiable instrument was made before its naturity;
(e) as to order of endorsements:--that the indorsements appearing upon a negotiable instrument were made in the order in which they appear then on;
(f) as to stamp:--that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course:--that the holder of a negotiable instrument is a holder in due course:
provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."10 CC.No.9674/2021
14. Thus the Act clearly lays down presumption in favour of the complainant with regard to the issuance of the cheque by the accused towards the discharge of his liability in favour of the complainant.
15. Under the scheme of the Act, the onus is upon the accused to rebut the presumptions in favour of the complainant by raising a probable defence.
16. It is a well settled position of law that, the defence of the accused, if is in the nature of a mere denial of the case of the complainant will not be sufficient to hold it as a probable defence. The bare denial of the passing of consideration apparently does not appear to be any defence. Something which is probable must be brought on record for getting the benefit of shifting the onus of proof to the complainant.
17. It is also a well settled position of law that once the cheque is proved relating to the account of the accused and if he /she accepts and admits the signature on the said cheuqe, then the initial 11 CC.No.9674/2021 presumption as contemplated under section 139 of the N.I.Act has to be raised by the court in favour of the complainant.
18. The presumption referred to in section 139 of N.I.Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. However, the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. The defence raised by the accused by way of rebuttal evidence, must be probable and capable of being accepted by the court.
19. No doubt the initial mandatory statutory presumption as provided under sections 118 and 139 of N.I.Act are in favour of the complainant. However, they are rebuttable presumptions and the accused expected to rebut the presumption by raising a probable defence.
12 CC.No.9674/2021
20. Such being the legal position, it would be pertinent to refer the defence raised by the accused persons to rebut the presumptions in favour of the complainant. On perusal of the cross examination of PW.1 and materials on record, the accused persons have raised defence that there is no legally enforceable debt against them.
21. Now let me consider the evidence on record, the complainant has got examined himself as PW.1 by filing sworn statement by way of affidavit in lieu of oral evidence, wherein, he has reiterated the entire averments made in the complaint.
22. In support of his oral evidence, PW.1 has produced Original Cheque marked as Ex.P.1, Signature of accused No.1 marked as Ex.P.1(a), Return Memos marked as Ex.P.2 and Ex.P.3, Legal Notice marked as Ex.P.4, RPAD Postal receipt marked as Ex.P.5, Postal Acknowledgments marked as Ex.P.6 and Ex.P.7 and Deed of Indemnity marked as Ex.P.8. On perusal of the Ex.P.1 to Ex.P.4, it appears that the complainant had complied with the mandatory requirements of section 138 of Negotiable Instruments Act. Therefore, a presumption can be drawn in his favour as contemplated U/s 139 of N.I.Act. 13 CC.No.9674/2021
23. It is pertinent to mention here that, initially the complaint was filed against M/s Punnami Properties represented by its Partners J.Kondappa Naidu and Pruthvish Babu.N. Later on, the complainant got amended the complaint by filing necessary application by inserting accused No.1 as J.Kondappa Naidu and accused No.2 as Pruthvish Babu.N, who are the Managing Partner and Partner of M/s. Punnami Properties.
24. On perusal of Ex.P.8, it is not in dispute that the complainant had entered into an Deed of Indemnity dated 24.04.2017 with the Punnami Properties represented by accused No.1 and 2, who are the partners. It is also not in dispute that the accused persons were engaged in the business of developing the land and in the course of its business they had entered into a Registered Joint Development Agreement dated 04.03.2015 with P.Munivenkatappa and P.Venugopal with regard to the converted land therein Sy.No.95/3 measuring 09 guntas. The purpose of the JDA was to develop the above said land into residential apartment named as "Punnami Bliss Annex" and to sell the constructed flats along with undivided share in 14 CC.No.9674/2021 the above said land to the purchaser, who intended to purchase the said flat.
25. On referring Ex.P.8, the complainant after understanding the development scheme named above decided to purchase flat No.305 situated in 3rd Floor measuring 1560 sq.ft. Super build up area with one covered Car parking place along with 378.77 sq.ft of UDS, which is being constructed in the above land under the scheme. On referring Ex.P.8, the complainant had made an advance down payment of Rs.30,00,000/- vide cheque bearing No.860835 dated 20.04.2017, wherein, the total consideration amount was negotiated and fixed at Rs.60,00,000/-. The receipt of the said amount was acknowledged by the accused under the Deed of Indemnity .
26. The counsel for the complainant would argue that as per clause V of the Ex.P.8, the investment made by the complainant can be bought back by exercising the buyback option in terms of clause ii of the Deed of Indemnity or can proceed to register the allotted flat in his name. The complainant in view of the above said terms has presented the cheque in question by exercising the buyback option in terms of clause ii of the Deed of Indemnity dated 24.04.2017. 15 CC.No.9674/2021
27. At this juncture, it would be appropriate to refer Deed of Indemnity and to reproduce Clause ii and Clause v of the Deed of Indemnity dated 24.04.2017 for better discussion.
"ii) The FIRST PARTY hereby covenants that the investment made by the SECOND PARTY in the project under subject is indemnified by way of receiving cheque and the Part of the SECOND PARTY is hereby provided with a Post dated cheque for the guaranteed value of the Flat on completion of 6 months.
However, the SECOND PARTY willing to exercise such option of buyback shall have to inform the same to the FIRST PARTY at lease prior to 30 days before the completion of 6 months from the date of paying the basic cost amount received as mentioned supra.
v) Further, the SECOND PARTY above named is at liberty to encash the post-dated cheque (bearing No.0327 for Rs.3360000/- (Rupees:Thirty Three Lakhs Sixty thousand only), drawn on Andhra Bank, Kasavanahalli Branch, Bangalore-35 in his/her custody, after the expiry of 6 months as above, by giving the notice of exercising the buyback option in terms of clause 2 above OR go ahead to keep the above Flat by insisting on builder to register in its name."
28. Clause ii of Deed of Indemnity stipulates that the complainant willing to exercise the option of buyback shall have to inform the same to the accused persons atleast prior to 30 days 16 CC.No.9674/2021 before the completion of six months from the date of paying the basic cost amount received as mentioned in Ex.P.8. Clause V of Deed of Indemnity further makes it clear that the complainant is at liberty to encash the post dated cheque after the expiry of six months by giving the notice of exercising the buyback option in terms of clause ii referred above or to go ahead with the flat by insisting on builder to register in its name. Combined reading of Clause ii and Clause v of Deed of Indemnity further makes it clear that if the complainant intends to exercise buyback option, he has to inform the same to the accused persons atleast prior to 30 days before the completion of six months from the date of paying the basic cost amount received as mentioned in the Ex.P.8 by issuing notice. Now it has to be seen that, whether the complainant has duly issued 30 days prior notice before the completion of six months to the accused persons in order to exercise buyback option.
29. On perusal of the documents produced by the complainant, apart from 08 documents, which have been marked as Ex.P.1 to Ex.P.8 no documents have been produced by the complainant in order to show that he has complied with the mandate requirement 17 CC.No.9674/2021 as provided under Clause ii of Ex.P.8 in order to exercise buyback option as referred in Ex.P.8. Nonetheless, the accused No.1 during the cross examination of PW.1 has got confronted the notice issued by the complainant to the M/s Punnami Properties represented by the accused No.1 and 2, which has been marked as Ex.D.11. The said document further reveals that the notice has been issued on 22.07.2020. the date on which the notice has been issued plays prominent role in deciding whether the complainant has fulfilled the mandate requirement as contemplated under Clause ii of the Ex.P.8/Ex.D.15.
30. Ex.D.11 further fortifies that the complainant issued a notice in pursuance of agreement dated 24.04.2017 under its terms and conditions. As per the contents of Ex.D.11, the complainant as per Clause ii of Agreement explored the option of buyback under which the complainant was obligated to put the accused persons to notice about the said option of buyback. Further the complainant has contended that under Clause V of the said Agreement, the accused persons have issued a post dated Cheque to encash the same after expiry of six months, subject to issue of such notice. Now coming back 18 CC.No.9674/2021 to the Exhibits marked on behalf of the complainant, Ex.P.1 is of the dated 30.06.2020 and the same was presented on 01.07.2020 and the same has been dishonoured and returned with an endorsement stating 'Funds Insufficient'. The date of the Notice of exercising buyback option was issued on 24.07.2020. In other words before exercise the buyback option and without issuing the notice, the complainant has presented the cheque in question. Therefore, as per the terms and conditions mentioned in the Ex.P.8/Ex.D.15, the complainant has failed to show that he has exercise the buyback option by following the mandate as provided under Clause II and V of the Ex.P.8 /Ex.D.15. However, the complainant after issuance of the notice, he has again presented the cheque, which is evident from Ex.P.3. No doubt, the complainant has issued notice exploring his buyback option, but before the issuance of the notice, he has presented the cheque, which was returned as per Ex.P.2.
31. In order to prosecute the accused persons for the commission of offence punishable U/s 138 of N.I.Act, the complainant need to establish legally enforceable debt. It is pertinent to mention here that, the accused persons have not entered into witness box or 19 CC.No.9674/2021 examined any witnesses on their behalf. During the course of cross examination of PW.1, 19 documents were got confronted and marked as per Ex.D.1 to Ex.D.19.
32. In order to prove their defence, the accused persons have cross examined PW.1, wherein, relevant portions of cross examination of PW.1 will be taken into consideration. During the cross examination of PW.1, he has admitted that on 24.08.2018 an amount of Rs.15,00,000/- was credited to his account at V.V.puram Branch, Via RTGS. PW.1 has further admitted that M/s Punnami Properties have paid him Rs.1,08,000/-, Rs.1,62,000/- and Rs.3,24,000/- by way of cheque to his SBI Account. PW.1 has further admitted that the tax of Rs.36,000/-, Rs.18,000/- and Rs.12,000/- respectively have been paid by M/s Punnami Properties through the auditor of the complainant by name Roopa i.e., the Proprietor of Crystal Consultancy.
33. Ex.D.1 is the Counter foil dated 24.08.2018 making it evident that an amount of Rs.15,00,000/- was credited to the complainant's savings bank account. Ex.P.12 is the Bank Statement of M/s Punnami Properties for the period from 01.08.2018 to 13.08.2018. 20 CC.No.9674/2021 Entries in the Bank Statement further reveals that there is a debit of Rs.15,00,000/- from the M/s Punnami Properties to the complainant.
34. Ex.D.4 to Ex.D.6 are the copies of the cheques bearing No.000382 dated 28.06.2017 for Rs.1,08,000/-, cheque bearing No.000516 dated 17.10.2017 for an amount of Rs.1,62,000/-, cheque bearing No.000805 dated 31.03.2018 for an amount of Rs.3,24,000/- have been credited to the account of the complainant. Ex.D.7 is the Bank Statement of M/s Punnami Properties for the period from 01.06.2017 to 30.09.2018. Ex.D.7(a) to 7(c) further reveals that an amount of Rs.1,08,000/-, Rs.1,62,000/- and Rs.3,24,000/- have been debited from the account of M/s Punnami Properties.
35. Ex.D.8 and 9 are Form No.16A for the Tax deducted at the source EX.D.8 further reveals that an amount of Rs.1,80,000/- has been paid by the M/s Punnami Properties on 01.10.2017 and payment of Tax of Rs.18,000/- to the complainant on 22.10.2017. Ex.D.7(d) reveals that the auditor of the complainant has deposited Rs.18,000/- by way of tax via cheque bearing No.515 on 20.10.2017. Ex.D.9 further reveals that M/s Punnami Properties paid an amount of Rs.3,60,000/- 21 CC.No.9674/2021 to the complainant on 31.03.2018 and payment of Tax of Rs.36,000/- to the PAN of complainant on 11.04.2018. Ex.D.7(e) indicates that a Tax deposit of Rs.36,000/- has been made by the auditor of the complainant via cheque No.806 on 07.04.2018. Ex.D.7(f) is an entry dated 07.07.2017 indicating a tax deposit of Rs.12,000/- by the auditor of the complainant via cheque No.000384. PW.1 has confirmed that he had TDS Certificates with him and he could produce the said certificates for Rs.12,000/-. On perusal of the materials on record, no TDS Certificates have been produced.
36. Ex.D.16 and Ex.D.17 are the Form No.16A, which are the certifications of Tax deducted at the source. Ex.D.16 reveals that M/s Punnami Properties had paid an amount of Rs.2,20,000/- to the complainant on 28.12.2019 and 31.05.2019 as well as Tax payment of Rs.22,000/- on 31.05.2019. Ex.D.17 further shows that M/s. Punnami Properties had paid an amount of Rs.3,90,000/- to the complainant on 13.09.2018 and 07.10.2018 as well as paid Tax of Rs.39,000/- on 07.10.2018.
37. On perusal of the cross examination of PW.1, it was suggested that the accused No.1 has paid him Rs.2,00,000/- on 22 CC.No.9674/2021 25.05.2018, Rs.1,00,000/- on 19.11.2018 and Rs.23,000/- on 31.10.2019 in cash through his auditor, PW.1 has deposed that the said amount were made in the form of cheques. Therefore, it could be averred that the witness has admitted the payments as stated above.
38. During the cross examination of PW.1, he admits that his auditor is Nagesh, who is also the auditor of the accused No.1 firm. PW.1 has further admitted that all the transactions mentioned in the present case were carried out by him and his auditor together.
39. Ex.D.1 to 17 along with the relevant portions of cross examination of PW.1 makes it evident that the accused No.1 has made payment of Rs.36,87,000/- to the complainant. For better discussion the payments are reproduced here under;
"Ex.D.1 - 15,00,000/-, Ex.D.4 - Rs.1,08,000/-, Ex.D.5 - Rs.1,62,000/-, Ex.D.6 - Rs.3,22,000/-, Ex.D.8 - Rs.1,80,000/-, Ex.D.9 - Rs.3,60,000/-, Ex.D.16 - Rs.2,20,000/-, Ex.D.17 - Rs.3,90,000/-, Ex.D.7(f) - Rs.12,000/- and Rs.1,20,000/- and Rs.3,23,000/-." 23 CC.No.9674/2021
40. Ex.D.11 is the notice issued by the complainant dated 24.07.2020, which states that under Clause V of the Agreement, the accused issued a undated cheque for Rs.33,63,000/- and under Clause II of the Agreement, he had the option to encash it after six months with 30 days notice and that he is exploring the buyback option. However, Ex.P.2 is the Bank Endorsement dated 01.07.2020, which shows that cheque had been dishonoured before the service of Ex.D.11.
41. Ex.D.14 is the Reply dated 25.08.2020 of the accused No.1 to the complainant's notice, which has been marked at Ex.D.11 indicating that he has issued an undated cheque for Rs.33,60,000/- against his investments under specific terms. However, the complainant deposited the cheque on 30.06.2020, which came to be dishonored on 01.07.2020. Therefore, the complainant has violated the terms of Ex.P.8/Ex.D.15.
42. Ex.D.11 was followed by another notice dated 01.09.2020, which is marked as Ex.D.13, wherein, it is stated that the accused would be required to provide the completion certificate, occupancy 24 CC.No.9674/2021 certificate from the authority, BWSSV and BESCOM connections to the building complex within 07 days and that there would be no violations and deviations from the approved plan, for him to consider the possibility of purchasing the flat. That was also succeeded by another notice dated 27.10.2020, which is marked as Ex.P.4, wherein, the complainant claims that on 10.01.2020, the cheque was returned for 'Insufficient Funds', after the notice dated 01.09.2020 did not evoke any reply. Ex.D.12 is the Reply to the notice issued by the complainant, wherein, it has been averred that the matter of depositing the undated guaranteed cheque was dishonest act as the complainant already received around Rs.24,83,000/- out of Rs.35,00,000/- on various dates.
43. Ex.D.18 is a copy of Ex.P.1, which was sent to the mail I.D of the accused No.1 on 05.11.2019 by the auditor of the accused Nagesh and Mylors via e-mail. Ex.D.18 further reveals that it was not dated as of 05.11.2019, the date on which the mail was sent.
44. On perusal of the cross examination of PW.1, it was suggested as to an amount of Rs.3,60,000/-covered by the cheque is 25 CC.No.9674/2021 the interest calculated for 6 Months at 2% per month, it was denied by the PW.1. Admittedly, the complainant has paid Rs.30,00,000/- to the M/s Punnami Properties. However, the cheque bears the amount for Rs.33,60,000/-, wherein, the complainant has not accounted any explanation for the extra amount of Rs.3,60,000/-.
45. On perusal of the entire materials on record and based on the collective reading of the oral and documentary evidence of the complainant and the accused No.1, it is clear that the complainant was provided with an undated cheque for Rs.33,60,000/- against the complainant's investment of Rs.30,00,000/- under specific terms indicated in the Deed of Indemnity. As discussed in my earlier paragraphs of discussion, the complainant has failed to show that he has fulfilled the mandatory requirement in order to exercise the buyback option as contend in the Ex.D.15 as he presented the undated cheque before issuance of notice. Now the question for the discussion is whether there exists legally enforceable debt or liability under the cheque to constitute an offence U/s 138 of N.I.Act. In my earlier paragraphs discussions, relying on Exhibit 'D' series along with the oral testimony of PW.1, it makes clear that the accused No.1 had 26 CC.No.9674/2021 made payment of Rs.36,87,000/- to the complainant. The contents of Ex.D.18 and the recitals of Ex.P.4 further makes it clear that it is not the post dated cheque, but it is undated cheque, which has been deposited with a date of 30.06.2020 and it had dishonoured.
46. It is well settled that, the accused persons need not enter into witness box in order to prove their defence. However, they can prove their defence by utilizing the materials made available by the complainant. In the case on hand, the accused persons have not only raised probable defence, but have also rebutted the presumption by proving that there is no legally recoverable debt from the accused persons.
47. During the course of the arguments, the counsel for the complainant has filed written notes of arguments and reiterated the averments made in the complaint and also relied on Deed of Indemnity. The counsel for the complainant has further argued by stating the ingredients of the offence. He also relied on the decision reported in 2022 SCC Online Supreme court 1131 between P.Rasiya V/s Abdul Nazer and Another. I have carefully perused the decision 27 CC.No.9674/2021 referred above. On perusal of the materials on record, the accused No.1 has not disputed with regard to the issuance of the cheque and the signature thereon. Therefore, the presumption envisaged U/s 139 of the N.I.Act can be drawn in favour of the complainant. The said presumption being rebuttable presumption, the accused is supposed to rebut the said presumption by raising a probable defence. In the case on hand, the accused persons have raised probable defence that there is no legally enforceable debt against them or other liabilities against them.
48. The counsel for the complainant has also relied on the decision of the Hon'ble Apex Court reported in (2001) 6 SCC 463 between Dalmia Cement (Bharat) Ltd., V/s Galaxy Traders and Agencies Ltd., and Others. I have carefully gone through the decision referred, wherein, the Hon'ble Apex Court has dealt with section 142(b), 138 proviso (c) and 139 to 149 and also dealt with the limitation period for filing the complaint and cause of action. In the case on hand, the complaint has been filed well within the time and the accused No.1 has replied to the statutory noticed as issued by the complainant.
28 CC.No.9674/2021
49. The counsel for the accused has filed written submissions, wherein, he has reiterated the averments made in the complaint and also relied on, Deed of Indemnity. The counsel for the accused No.1 has also relied on the cross examination of PW.1, Exhibit 'D' series and contended that there is no legally enforceable debt.
50. Counsel for the accused has also relied on section 56 and 15 of the Negotiable Instrument Act. For better discussion, the same are reproduced here under;
"56. Indorsement for part of sum due.--No writing on a negotiable instrument is valid for the purpose of negotiation if such writing purports to transfer only a part of the amount appearing to be due on the instrument; but where such amount has been partly paid, a note to that effect may be indorsed on the instrument, which may then be negotiated for the balance.
15. Indorsement.--When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a 29 CC.No.9674/2021 stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the "indorser"
51. The counsel for the accused has also relied on the decision of the Hon'ble Apex Court reported in (2023) 1 SCC 578 between Dashrathbhai Trikambhai Patel V/s Hitesh Mahendra Bai Patel and Another. The Hon'ble Apex Court in the decision referred has analysed the legal position with regard to the payments after the issuance of the cheque. The Hon'ble Apex Court in the said decision has elaborately dealt and held that when a part payment of the debt is made after the cheque was drawn, but before the cheque is encashed, such payment must be endorsed on the cheque U/s 56 of the N.I.Act, and the cheque cannot be presented for encashment without recording the part payment. The Hon'ble Apex Court has also held that if the unendorsed cheque is dishonoured on presentation, the offence U/s 138 of N.I.Act, would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment. In the case on hand, as per Exhibit 'D' series, the accused No.1 has made full payment.
30 CC.No.9674/2021
52. On over all perusal of the materials on record, the complainant has failed to establish that there exists legally enforceable debt. On perusal of the Exhibit 'D' series and cross examination part of PW.1 it further reveals that the accused No.1 has made entire payment to the complainant. In view of the discussion made above, the benefit of presumption as provided U/s 118 of N.I.Act cannot be extended in favour of the complainant. In view of the discussions made above, the accused persons are entitled for acquittal. Accordingly, I answer point No.1 in the "Negative".
53. Point NO.2:- In the light of discussions made at point No.1, I proceed to pass the following;
ORDER By invoking the power conferred under section 255(1) of Cr.P.C., the accused No.1 and 2 are hereby acquitted of the offence punishable U/S.138 of N.I. Act.
Bail bond and Surety bond of the accused No.1 and 2 shall stand canceled.
(Dictated to the Stenographer directly on computer, typed by her, corrected by me, signed then pronounced in the open court on this the 01 st day of August, 2024.) Digitally signed by GIRISH GIRISH SHIVANAND SHIVANAND CHATNI Date: 2024.08.02 CHATNI 17:50:19 +0530 (GIRISH CHATNI) XXI ACJM, BENGALURU 31 CC.No.9674/2021 ANNEXURE
1. List of witnesses examined on behalf of the complainant:
PW-1 : Maygalageri Basappa Chennappa
2. List of witnesses examined on behalf of the accused:
-NIL-
3. List of documents marked on behalf the complainant:
Ex.P.1 : Cheque
Ex.P.1(a) : Signature of accused
Ex.P.2 & 3 : Return Memos
Ex.P.4 : Legal Notice
Ex.P.5 : Postal Receipts
Ex.P.6 & 7 : Two Postal Acknowledgments
Ex.P.8 : Deed of Indemnity
4. List of documents marked on behalf of the
accused:
Ex.D.1 : Bank Challan / counter foil
Ex.D.2 : Bank Statement
Ex.D.3 : Letter
Ex.D.4 to 6 : Copy of three cheques
Ex.D.7 : Account Statement
Ex.D.8 & 9 : Copies of Form No.16A
Ex.D.10 : Postal cover
Ex.D.11 : Reply dated 24.07.2020
Ex.D.12 : Copy of reply dated 12.11.2020
32 CC.No.9674/2021
Ex.D.13 : Copy of notice
Ex.D.14 : Reply notice dated 25.08.2020
Ex.D.15 : Copy of Deed of Indemnity
Ex.D.16 & 17 : Copies of Form No.16A
Ex.D.18 : Copy of cheque
Ex.D.19 : Affidavit U/s 65B of Indian
Evidence Act
Digitally signed by
GIRISH GIRISH SHIVANAND
SHIVANAND CHATNI
Date: 2024.08.02
CHATNI 17:50:11 +0530
(GIRISH CHATNI)
XXI ACJM, BENGALURU