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Bangalore District Court

Sri. K. Vijay Kumar vs Sri. K. Sengodan on 21 September, 2021

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                                         C.C.No. 1118/2018 J




  THE COURT OF THE XVI ADDITIONAL CHIEF
 METROPOLITAN MAGISTRATE, BENGALURU CITY
  Dated:­ This the 21st day of September, 2021

Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
             XVI Addl.C.M.M., Bengaluru City.

           JUDGMENT U/S 355 OF Cr.P.C.,
Case No.             :     C.C.No. 1118/2018
Complainant          :     Sri. K. Vijay Kumar,
                           S/o Late Sri. Subbaiah Setty,
                           Aged about 55 years,
                           R/at No.34, (Old No.131),
                           4th Main Road, APMC Yard,
                           Yeshwanthpuram,
                           Bengaluru - 560 022.
                           Rep. by Sri. Nikhil .P Adv.,)

                            ­ Vs ­
Accused              :     Sri. K. Sengodan,
                           S/o Late M. C. Kannappa Cetty,
                           Aged about 58 years,
                           R/at No.50, Armstrong Road,
                           Bengaluru - 560 001.
                           (Rep. by Sri. C.R.A.R. Advocates &
                           Solicitors, C.R. Abdul Rasheed
                           Adv.,)

Case instituted          : 08.12.2017
Offence complained       : U/s 138 of N.I Act
of
Plea of Accused          : Pleaded not guilty
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                                        C.C.No. 1118/2018 J




Final Order             : Conviction
Date of order           : 21.09.2021

                    JUDGMENT

The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.

2. Briefly stated the case of the Complainant is that, he has been a tenant of the premises bearing No.131/34, 4th Main Road, APMC Yard, Yeshwanthpura, Bengaluru­22 for over 2 decades under one Sri. K.Shekar and the accused got introduced to him as one of brother Sri.K.Sehkar, along with Sri.K.Ravi (another brother of Sri.K.Shekar) and the familiarity developed with the accused and Sri.K.Ravi and Sri.K.Shekar used to approach him to collect the monthly rent of the leased premises. It is further contended that, as the accused and his brothers also got to know that he had a very good and flourishing business in the said premises, the accused and his brothers, also began to seek for hand loans/ borrowings /advances apart from advance rent from him. It is further contended by the complainant that, he used to advance monies in terms of loan (with interest) to accused and his brothers assuming that, they will maintain the cordial relationship as well as 3 C.C.No. 1118/2018 J honour to the amounts lent as loan and repay the same with interest as mutually agreed upon and wherever the accused had borrowed loans, his brother Sri.K.Shekar stood as witness and wherever Sri.K.Shekar had borrowed monies from him, the accused stood as witness and similarly for Sri.K.Ravi, Sri.K.Shekar or accused stood as surety. It is further contended by the complainant that, since the relationship between him and Sri.K.Shekar was more than a fiduciary relationship as per the lease deed, the cordiality and brotherliness that had set in, made him to blindly believe and have faith on accused and his brothers Sri.K.Shekar and Sri.K.Ravi and further he advanced monies to accused and his brothers on several occasions and though interest were liable to be paid, the same were waived off by him, because of brotherly trust he had on accused and his brothers. It is further contended by the complainant that, he had been misused of his polite nature and was extracted monies to the tune of Rs.55 Lakhs, which was paid to K.Shekar as advance rent, loan for family necessities, marriage of his daughter etc., which was subsequently agreed to be adjusted towards the sale consideration amount for the sale of the shop premises bearing No.131/34, 4 th Main Road, APMC yard, Yeshwanthpura, Bengaluru.

3. It is further contended by the complainant that, 4 C.C.No. 1118/2018 J the accused had also borrowed monies to the tune of Rs.1,50,000/= on 10.12.2015 and also agreed to repay the same with an interest at 2% p.m. compounding interest as per the promissory notes executed by him and also orally agreed to repay the same within one year, however the accused has failed to repay the loan secured, but instead, approached him seeking further loan to the tune of Rs.9 Lakhs and promised to repay within three months and requested not to impose any interest on the same as the said money was required for some emergency, considering the request and convincing nature of the accused, he advanced the said amount, when he failed to repay the said loan by early 2017 as promised, he started to follow­up regularly. It is further contended by the complainant that, in order to avoid the situation, the accused promised to pay the same with 2% interest p.m. but requested for further time of one year for the repayment of the entire loan amount and in order to convince him, the accused has issued three post dated cheques towards the loan amount also calculating interest at 2% per month until the date of issue of cheques i.e., cheques bearing Nos.118718, 118719 and 118720 dated: 10.10.2017 drawn on Indian Bank, Commercial Street branch, Bengaluru for an amount of Rs.98,000/= each totaling to Rs.2,94,000/= in his favour, the accused begged and pleaded him not to claim 5 C.C.No. 1118/2018 J any interest on the other loan amount of Rs.9 Lakhs and hence he issued a separate post dated cheque bearing No.363937 dated; 13.10.2017 drawn on Indian Bank, Commercial Street Branch, Bengaluru for an amount of Rs.9 Lakhs in his favour. It is further contended by the complainant that, the accused had every intention of duping him and hence started to avoid and evade him soon after issuing the cheques, but requested to return the same as the accused was making every efforts to settle the loans by mid of 2017. It is further contended by the complainant that, the brother of the accused Sri. Shekar went on to issue series of legal notices to him on the advice of accused and in order to amicably settle the same, in September 2016, Sri. Shekar requested him to pay a further amount of Rs.16 Lakhs as an interest free loan, thereby promising to execute the sale deed in his favour and as a guarantee to the loan amount received, Sri. K. Shekar also issued post dated cheques only on the principle amount which have now bounced, in respect of the same he has issued legal notice to Sri. K. Shekar. It is further contended by the complainant that, the accused failed to settle the amounts due and he hatched a plan along with his brother to harass and annoy him by falsely instituting a civil suit, which was pending before the City Civil and Session Judge Court at Mayo Hall, Bengaluru, when he presented the cheques 6 C.C.No. 1118/2018 J bearing Nos.118718, 118719 and 118720 dated:

10.10.2017 drawn on Indian Bank, Commercial Street branch, Bengaluru all dated 10.10.2017 for an amount of Rs.98,000/­ each, aggregating to an amount of Rs.2,94,000/­ to his banker i.e., Karur Vysya Bank, Basavanagudi Branch, Bangalore for encashment, but they were returned dishonoured as "Funds Insufficient"

vide bank endorsement dated:­17.10.2017 and further he also presented another cheque bearing No.363937 drawn on Indian Bank, Commercial Street Branch, Bangalore dated 13.10.2017 for an amount of Rs.9 lakhs to his banker i.e., Karur Vysya Bank, Basavanagudi Branch, Bangalore which was also returned with a memo dated 17.10.2017 stating "Funds Insufficient". It is further contended by the complainant that, he is an unpaid lender of loan lent to the accused, against the request and execution of promissory note in this regard, the transaction is purely commercial in nature, he has been illegally denied the benefit of Rs.11,94,000/­ which amount is due and outstanding from the accused, now realize that, the accused lacks bonafide on his part and he has no honest intention to repay the amount secured as loan. It is further contended by the complainant that, the misconduct of the accused is further compounded by the fact that, he has not maintained sufficient funds in 7 C.C.No. 1118/2018 J his account for clearance of the subject instrument / cheques bearing No.118718, 118719 and 118720 all dated 10.10.2017 and cheque bearing No.363937 dated 13.10.2017, thereafter he got issued a legal notice on 26.10.2017 against the accused and on 27.10.2017 same was duly served on him through RPAD to the address shown in the cause title, the accused neither paid the amount due nor replied to the said notice. 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, 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.P.1 to Ex.P.14 i.e, original four Cheques as per Ex.P.1 to Ex.P.4 respectively, the signatures on the said cheques identified by P.W.1 as those of the accused as per Ex.P.1(a) to Ex.P.4(a) respectively, the Bank Memos as per Ex.P.5 to Ex.P.8, the office copy of the Legal Notice dated 26.10.2017 as per Ex.P.9, the postal receipt as per Ex.P.10, Postal Track Result as per Ex.P.11, On 8 C.C.No. 1118/2018 J Demand Promissory Notes as per Ex.P.12 to Ex.P.14, the signatures on the said on demand promissory note identified by P.W.1 as those of the accused as per Ex.P.12(a) to Ex.P.14(a) and Ex.P.12(b) to Ex.P.14(b) respectively.

5 Prima­facie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.

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, 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.

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, subsequently the accused himself 9 C.C.No. 1118/2018 J examined as DW1 and he has relied upon the documentary evidence as per Ex.D.1 i.e, certified copy of receipt and closed his side.

8. Heard the arguments by learned counsel for the complainant and accused and perused the materials on record and perused the decisions relied upon by the learned counsel for the complainant.

9. On the basis of complaint, evidence of complainant and documents and having heard the arguments of both learned counsels for the complainant and the accused, the following points that are arise for consideration are:­

1. Whether the complainant proves that the accused has issued cheques i.e., cheques bearing Nos.118718, 118719 and 118720 dated: 10.10.2017 drawn on Indian Bank, Commercial Street branch, Bengaluru for an amount of Rs.98,000/= each and cheque bearing No.363937 drawn on Indian Bank, Commercial Street Branch, Bangalore dated 13.10.2017 for an amount of Rs.9 lakhs to discharge legally recoverable debt to the complainant and when the complainant has presented the above said cheques for encashment through his banker but the said cheques have been dishonoured for the reasons "Funds Insufficient" on 17.10.2017 and the complainant issued 10 C.C.No. 1118/2018 J legal notice to the accused on 26.10.2017 and inspite of it the accused has not paid the cheques 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 11 C.C.No. 1118/2018 J unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act pre­supposes three conditions for prosecution of an offence which are as under:

1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.

2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and

3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.

If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.

12. It is also one of the essential ingredients of 12 C.C.No. 1118/2018 J 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 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 complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, he has been a tenant of the premises bearing No.131/34, 4th Main Road, APMC Yard, Yeshwanthpura, Bengaluru­22 for over 2 decades under one Sri. K.Shekar and the 13 C.C.No. 1118/2018 J accused got introduced to him as one of brother Sri.K.Sehkar, along with Sri.K.Ravi (another brother of Sri.K.Shekar) and the familiarity developed with the accused and Sri.K.Ravi and Sri.K.Shekar used to approach him to collect the monthly rent of the leased premises. The complainant / PW1 further testified that, as the accused and his brothers also got to know that he had a very good and flourishing business in the said premises, the accused and his brothers, also began to seek for hand loans/ borrowings /advances apart from advance rent from him. It is further contended by the complainant that, he used to advance monies in terms of loan (with interest) to accused and his brothers assuming that, they will maintain the cordial relationship as well as honour to the amounts lent as loan and repay the same with interest as mutually agreed upon and wherever the accused had borrowed loans, his brother Sri.K.Shekar stood as witness and wherever Sri.K.Shekar had borrowed monies from him, the accused stood as witness and similarly for Sri.K.Ravi, Sri.K.Shekar or accused stood as surety. The complainant / PW1 further testified that, since the relationship between him and Sri.K.Shekar was more than a fiduciary relationship as per the lease deed, the cordiality and brotherliness that had set in, made him to blindly believe and have faith on accused and his 14 C.C.No. 1118/2018 J brothers Sri.K.Shekar and Sri.K.Ravi and further he advanced monies to accused and his brothers on several occasions and though interest were liable to be paid, the same were waived off by him, because of brotherly trust he had on accused and his brothers. The complainant / PW1 further testified that, he had been misused of his polite nature and was extracted monies to the tune of Rs.55 Lakhs, which was paid to K.Shekar as advance rental, loan for family necessities, marriage of his daughter etc., which was subsequently agreed to be adjusted towards the sale consideration amount for the sale of the shop premises bearing No.131/34, 4 th Main Road, APMC yard, Yeshwanthpura, Bengaluru.

14. The complainant / PW1 further testified that, the accused had also borrowed monies to the tune of Rs.1,50,000/= on 10.12.2015 and also agreed to repay the same with an interest at 2% p.m. compounding interest as per the promissory notes executed by him and also orally agreed to repay the same within one year, however the accused has failed to repay the loan secured, but instead, approached him seeking further loan to the tune of Rs.9 Lakhs and promised to repay within three months and requested not to impose any interest on the same as the said money was required for some emergency, considering the request and convincing nature of the accused, he advanced the said amount, 15 C.C.No. 1118/2018 J when he failed to repay the said loan by early 2017 as promised, he started to follow­up regularly. The complainant / PW1 further testified that, in order to avoid the situation, the accused promised to pay the same with 2% interest p.m. but requested for further time of one year for the repayment of the entire loan amount and in order to convince him, the accused has issued three post dated cheques towards the loan amount also calculating interest at 2% per month until the date of issue of cheques i.e., cheques bearing Nos.118718, 118719 and 118720 dated: 10.10.2017 drawn on Indian Bank, Commercial Street branch, Bengaluru for an amount of Rs.98,000/= each totaling to Rs.2,94,000/= in his favour, the accused begged and pleaded him not to claim any interest on the other loan amount of Rs.9 Lakhs and hence he issued a separate post dated cheque bearing No.363937 dated; 13.10.2017 drawn on Indian Bank, Commercial Street Branch, Bengaluru for an amount of Rs.9 Lakhs in his favour. The complainant / PW1 further testified that, the accused had every intention of duping him and hence started to avoid and evade him soon after issuing the cheques, but requested to return the same as the accused was making every efforts to settle the loans by mid of 2017. The complainant / PW1 further testified that, the brother of the accused Sri. Shekar went on to 16 C.C.No. 1118/2018 J issue series of legal notices to him on the advice of accused and in order to amicably settle the same, in September 2016, Sri. Shekar requested him to pay a further amount of Rs.16 Lakhs as an interest free loan, thereby promising to execute the sale deed in his favour and as a guarantee to the loan amount received, Sri. K. Shekar also issued post dated cheques only on the principle amount which have now bounced, in respect of the same he has issued legal notice to Sri. K. Shekar. The complainant / PW1 further testified that, the accused failed to settle the amounts due and he hatched a plan along with his brother to harass and annoy him by falsely instituting a civil suit, which was pending before the City Civil and Session Judge Court at Mayo Hall, Bengaluru, when he presented the cheques bearing Nos.118718, 118719 and 118720 dated: 10.10.2017 drawn on Indian Bank, Commercial Street branch, Bengaluru all dated 10.10.2017 for an amount of Rs.98,000/­ each, aggregating to an amount of Rs.2,94,000/­ to his banker i.e., Karur Vysya Bank, Basavanagudi Branch, Bangalore for encashment, but they were returned dishonoured as "Funds Insufficient"

vide bank endorsement dated:­17.10.2017 and further he also presented another cheque bearing No.363937 drawn on Indian Bank, Commercial Street Branch, Bangalore dated 13.10.2017 for an amount of Rs.9 lakhs 17 C.C.No. 1118/2018 J to his banker i.e., Karur Vysya Bank, Basavanagudi Branch, Bangalore which was also returned with a memo dated 17.10.2017 stating "Funds Insufficient".The complainant / PW1 further testified that, he is an unpaid lender of loan lent to the accused, against the request and execution of promissory note in this regard, the transaction is purely commercial in nature, he has been illegally denied the benefit of Rs.11,94,000/­ which amount is due and outstanding from the accused, now realize that, the accused lacks bonafide on his part and he has no honest intention to repay the amount secured as loan. The complainant / PW1 further testified that, the misconduct of the accused is further compounded by the fact that, he has not maintained sufficient funds in his account for clearance of the subject instrument / cheques bearing No.118718, 118719 and 118720 all dated 10.10.2017 and cheque bearing No.363937 dated 13.10.2017, thereafter he got issued a legal notice on 26.10.2017 against the accused and on 27.10.2017 same was duly served on him through RPAD to the address shown in the cause title, the accused neither paid the amount due nor replied to the said notice.

15. In support of oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 18 C.C.No. 1118/2018 J to Ex.P.14 i.e, original four Cheques as per Ex.P.1 to Ex.P.4 respectively, the signatures on the said cheques identified by P.W.1 as those of the accused as per Ex.P.1(a) to Ex.P.4(a) respectively, the Bank Memos as per Ex.P.5 to Ex.P.8, the office copy of the Legal Notice dated 26.10.2017 as per Ex.P.9, the postal receipt as per Ex.P.10, Postal Track Result as per Ex.P.11, On Demand Promissory Notes as per Ex.P.12 to Ex.P.14, the signatures on the said on demand promissory note identified by P.W.1 as those of the accused as per Ex.P.12(a) to Ex.P.14(a) and Ex.P.12(b) to Ex.P.14(b) respectively.

16. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not in dispute by the accused that, the complainant is tenant of the premises bearing No.131/34 situated at APMC Yard, Yashwanthapura, Bangalore under the brother of the accused i.e., K. Shekar. It is also not in dispute by the accused that, the cheques in question belongs to the account of accused and the signatures found at Ex.P.1(a) to P.4(a) are those of accused. It is also not in dispute that, the cheques in question were presented to the encashment within their validity 19 C.C.No. 1118/2018 J period and the said cheque have been returned as dishonoured for the reason of "Funds Insufficient" as per the returned memos issued by the concerned bank i.e Ex.P.5 to Ex.P.8 respectively, hence as a matter on record it is proved by the complainant that, the cheques in question were dishonoured for the reason of Funds Insufficient. It is also not in dispute that, the legal notice issued by the complainant as per Ex.P.9 was served upon the accused as per Ex.P.11, as admitted by the accused during the course of his cross­examination i.e., there is mentioning of "Item Delivered" in first cloumn of Ex.P.11 and the address mentioned in Ex.P.9 is his correct address. Hence even otherwise the accused has admitted that, the legal notice i.e., Ex.P.9 was issued to his correct address through RPAD by his advocate, in such circumstances, it can be held that, the notice sent by the complainant to the correct address of the Accused is presumed to have been served on him U/s. 27 of General Clauses Act. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. 20 C.C.No. 1118/2018 J Lingamma, wherein the Hon'ble High Court held that, "Notice sent at correct address returned unclaimed - is deemed to be served. It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s. Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, "notice sent by registered post with acknowledgement to a correct address­service of notice has to be presumed". Therefore in view of the principles of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on him. Hence the notice issued by the complainant through registered post is held to be proper. In addition to that, it is also relevant here to refer the decision reported in 2007 AIR SCW 3578 in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and another., wherein the Hon'ble Apex court held that " the drawer of the cheque is permitted to deposit the cheque amount within 15 days from the date of his appearance before the court 21 C.C.No. 1118/2018 J in pursuance of the service of summons on him and in such situation, his defence of non service of the legal notice cannot be available to him'. Hence, in view of the said principles of law, even for sake of discussion, though there is no cogent and reliable documentary proof to substantiate the claim of the complainant with regard to address of the Accused to show there is due service of the legal notice on the Accused, in view of settled position of law by virtue of the above said decision of Hon'ble Apex Court of India, the Accused is not entitled to the technical defence of the alleged non service of the legal notice. Therefore, the argument canvassed by the learned counsel for the accused that, the notice issued by the complainant was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable and are not sustainable in law.

17. It is the specific claim of the complainant that, he is a tenant under brother of the accused by name K. Shekar in respect of premises bearing No.131/34 situated at APMC Yard, 22 C.C.No. 1118/2018 J Yashawanthapura, Bangalore for over two decades and the accused who got introduced to him his brothers namely Sri. K. Shekar and Sri. K. Ravi and the brothers of the accused used to collect the monthly rent of the leased premises and also got know that, he had very good and flourishing business in the said premises and the accused and his brothers used to take hand loans apart from the advance rent from him and whenever the accused borrowed the loans his brothers stood as witnesses and whenever the brothers of the accused borrowed the loans the accused stood as witness and the brother of the accused and also the accused misused his polite nature and extracted monies to the tune of Rs.55 lakhs which was paid to brother of the accused Sri. K. Shekar as advance rental, loans for family necessities and marriage of his daughter etc., as he agreed to adjust the said amount towards the sale consideration amount for sale of the shop premises in which he is running his business as a tenant under him. It is also the specific claim of the complainant that, the accused had borrowed an amount of Rs.1,50,000/­ on 10.12.2015 and also agreed to repay the same with interest at the rate of 23 C.C.No. 1118/2018 J 2% p.m. compounding interest and has executed promissory notes and orally agreed to repay the same within one year, however he failed to repay the said amount, but again he sought loan amount of Rs.9 lakhs for his emergency and agreed to repay the same within three months and requested not to imposed any interest on the said loan, considering the same he has paid Rs.9 lakhs to the accused, however the accused failed to repay the same by early 2017 as promised by him and in order to avoid the situation the accused agreed to pay the said amount with 2% interest and sought further time of one year to pay the entire loan amount and also issued three cheques i.e., Ex.P.1 to Ex.P.3 for Rs.98,000/­ each in totaling Rs.2,94,000/­ and also issued another separate post dated cheque i.e., Ex.P.4 dated 13.04.2017 in his favour towards the discharge of the loan amounts. On the other the accused had denied the lending of loan amount by the complainant as stated above and also execution of the promissory notes and issuance of cheques towards discharge of the said loan amounts.

18. In order to substantiate the claim of the complainant he has produced the cheques in 24 C.C.No. 1118/2018 J question i.e., Ex.P.1 to Ex.P.4 issued by the accused in his favour. As it is already held in the above that, the accused has admitted the issuance of Ex.P.1 to Ex.P.4 cheques in favour of the complainant and signatures thereon, therefore an initial presumptions can be drawn in favour of the complainant under Sec.118a and 139 of N.I. Act that, the cheques in question have been issued towards discharge of legally recoverable debt, unless and until the accused rebut the presumptions available to the complainant it cannot be held that, the accused has not issued the cheques in question to the complainant towards discharge of the debt in question.

19. The complainant has also produced On Demand Promissory Note and Consideration Receipt which are at Ex.P.12 to Ex.P.14 and the signatures identified by the complainant as the signatures of accused are at Ex.P.12(a) to Ex.P.14(a) and Ex.P.12(b) to Ex.P.14(b). The accused though has denied the contents of the Ex.P.12 to Ex.P.13, but during the course of his evidence only the accused has admitted as "ನಪ12 ರರದ 14 ರಲರರವ ಪಪಮಸರ ನನನಟ‍ ಗಳಲ ಹಸರರಗಳನರ ದ ನನರ ನ ಪರರದದರರರ ಬರದದರ 25 C.C.No. 1118/2018 J ಫಗರ‍ ನಲ ಅಮರಟ‍ ನರ ನ ಮತ ತ ಬರದರರತತನ ನ. 2005 ರಲ ನಪ12 ರರದ 14 ಗಳನರ ನ ಕನಟಟರ ರತತನ ನ." and at page No.2 in para No.3 of his cross­examination has also admitted that, "ನಪ12 ರರದ 14 ರಲರರವ ಪಪಮಸರ ನನನಟ‍ ಗಳಲರರವ ಸಹಗಳರ ನನನ ಸಹಗಳರ ಇರರತತವ ." and at page No.3 of his cross­examination has also admitted that, ನಪ12 ರರದ 14 ರಲರರವ ಪಪ ಮ ಸರ ನನನಟ‍ ಗಳನರ ನ ಪರರದದರರರ ನನಗ ಹಣ ಕನಟಟದದ ಕಕ ನನರ ಚಕ‍ ನರ ನ ಕನಟಟದದ ರ ನ ಕನಟಟರ ರತತನ ನ. Hence, the ಚ ವರರಗ ಅವಗಳನರ ಅದಕಕ ಹಚರ above said unequivocal admissions of the accused makes it clear that, the accused has admitted that, he had executed the on demand promissory note and consideration receipts as per Ex.P.12 to P.14 in favour of the complainant and also admitted that, the amounts which are mentioned in the figures in Ex.P.12 to P.14 are return by the accused himself and also admitted that, he had borrowed the loan amount from the complainant and towards discharge of the said amount has issued the cheque to the complainant and also issued Ex.P.12 to P.14 in additional to the cheque issued to the complainant, therefore though accused has elicited certain facts during the course of cross­examination 26 C.C.No. 1118/2018 J of the complainant i.e., he had not filed any recovery suit against the accused on the basis of on demand promissory notes and the complainant admitted that, he has filled up the on demand promissory notes and has not taken the signatures of adjustcent owners of the shop of his premises as witnesses to the Ex.P.12 to Ex.P.14 and there are no independent witnesses to the Ex.P.12 to Ex.P.14 and there are different in writings in respect of the name of the complainant and amount mentioned in the words in Ex.P.12 to Ex.P.14 and other admissions cannot be acceptable one in view of the categorical and unequivocal admissions given by the accused during the course of his evidence and cross­examination. In addition to that, even for sake of discussion if it is assured that, complainant had written the names in the Ex.P.12 to Ex.P.14, but the accused himself admitted that, he had written the amount in figure, that sufficient to hold that, the accused is aware of the contents of the Ex.P.12 to Ex.P.14 and only after going through the contents had signed to the Ex.P.12 to Ex.P.14. 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 27 C.C.No. 1118/2018 J case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that "a reading of sec.20 of the act which is extracted above reveals that, the words used are ' either wholly blank or having written therein an incomplete negotiable instrument'. The instrument may be wholly blank or incomplete in a particular in either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so vide that, the party so signing is bound to be a holder in due course. Promissory notes are often executed 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'. Hence by applying 28 C.C.No. 1118/2018 J the above principals of law even if it is assumed that, the accused has given blank signed promissory notes in favour of the complainant in that circumstances also the accused is liable to pay the amount due to the complainant. Therefore the complainant has successfully proved that, the accused has executed Ex.P.12 to P.14 i.e., on demand promissory note and consideration receipt for sum of Rs.50,000/­ each in favour of the complainant and the brother of the accused i.e., K. Shangoden and K. Shekar have signed as witnesses to the said Ex.P.12 to Ex.P.14.

20. It is also relevant here to mention that, the learned counsel for the accused has cross­examined the complainant in length, but nothing has been elicited to disbelieve or discard the evidence of the complainant, it is true that, the complainant had admitted that, he has not mentioned the date on which has paid Rs.55 lakhs to the brother of the accused as advance rent amount and he does not know out of the said amount how much amount included the sale consideration amount and advance rent amount, but the complainant stated that, he has not paid a separate amount towards sale 29 C.C.No. 1118/2018 J consideration, but has paid total amount of Rs.50 lakhs to the brother of the accused and as per the agreement till today the sale deed has not been registered in his name and brother of the accused has not yet executed sale deed in his favour and has not filed any suit against the brother of the accused, but the said line of cross­examination by the accused is not a relevant facts to the present facts of the case, therefore there is no need to discuss about the said part of cross­examination in the present case. It is also admitted by the complainant that, he has not stated in his affidavit on which date, month and year he had paid Rs.9 lakhs to the accused, but he stated that, he do not remember, the date, month and year and also admitted that, he had not collected any documents from the accused at the time of advancing Rs.9 lakhs to the accused, but the complainant stated that, the accused agreed to repay the said amount within three months and thereafter he had issued a cheque towards discharge of the said amount and also stated that, since he had faith on the accused and he could not collected any documents from the accused at the time of lending of Rs.9 lakhs to the accused. It is true that, the 30 C.C.No. 1118/2018 J complainant has admitted that, as on the date of issuance of the cheque to him there was a civil suit pending between the complainant and brother of the accused i.e., Shekar, mere pendency of the suit between the complainant and brother of the accused is not a ground to reject the evidence of the complainant holding that, there is no possibility of the issuance of the cheques by the accused since the relationship between the brother of the accused and complainant was strained due to the pendency of the civil suit, therefore the admission elicited by the accused as stated in the above is not helpful for the accused to discard the evidence of complainant.

21. It is also true that, the complainant has admitted that, he had not collected promissory note or any other document from the accused at the time of lending of Rs.9 lakhs to accused and he has not lend Rs.9 lakhs either through cheque, DD or online banking, but the complainant has stated that, since he had faith on the accused, therefore he has not collected the documents and at the request of the accused he had paid Rs.9 lakhs by way of cash. Apart from that, the law does not hold that, if the huge amount of Rs.9 lakhs paid by way of cash and 31 C.C.No. 1118/2018 J not paid either through cheque or DD or through onnline in such circumstances the said transaction becomes invalid. It is true that, of course Sec.269 SS of Income Tax Act mandates that, any advance made by way of loan of more than Rs.20,000/­ should be made by way of cheque or bank draft only, but at the same time in the said provision it is nowhere stated that, non­compliance of the provision will makes the transaction invalidates or void. The same is fortified by the Hon'ble High Court of Karnataka in the decision reported in 2008 (5) KCCR 3371 in a case of Kempanarasimhaiah Vs. P. Rangaraju and others wherein it is held that, "on careful reading of the above observations and also all other observations in the said juddment I could not find the Hon'ble Supreme Court having laid down that, the transactions in contravention of the said provision of Income Tax Act could be termed as the transactions opposed to the public policy so as to bring within the ambit of non­ enforceable transactions. The Hon'ble Supreme Court has not laid down in the said decision that, the transactions of this nature could be termed 32 C.C.No. 1118/2018 J as opposed to pubic policy and as such the same would be became legally not enforceable." Hence in the light of principal of law laid down by the Hon'ble High Court of Karnataka in the above said decision it is for the income tax authority to take the action against the person who had transacted in contravention to Sec.269 SS of Income Tax Act, but the transaction cannot be termed as opposed to public policy and legally not enforceable. In another decision of Hon'ble Bomby High Court in Crl. Appeal No.322 of 2017 decided on 25.11.2020 in a case of Pushpa Sanchala Kothari Vs. Aarti Uttam Chavan wherein it is held that, Negotiable Instrument Act 1881, Sec.138 - Income Tax Act 1961, Sec.269 SS - Criminal Procedure Code 1973, Sec.378 (4) - Cheque dishonored - Appeal against acquittal - the complainant has not shown the transaction in her income tax returns

- no provision in Income Tax Act which makes an amount not shown in the Income Tax Returns unrecovarable - Sec.269 SS of Act 1961, does not declare all transactions of loan, by cash in excess 33 C.C.No. 1118/2018 J of Rs.20,000/­ as invalid, illegal or null and void

- the accused cannot take benefit of such infraction by complainant to show the transaction in income tax returns - The judgment of acquittal rendered by the learned Trial Court is perverse - The impugned judmgnet needs to set aside - Appeal deserves to be allowed." Hence in the light of principal of law laid down by the Hon'ble High Court of Bomby, the defence of the accused in the present case cannot be acceptable one as under Sec.269 SS of the Income Tax Act does not declare all the transactions of the loan by cash in excess of Rs.20,000/­ as invalid, illegal or null and void and the accused cannot take benefit of the same to escape from the liability in question. Therefore for the above said reasons though the complainant has admitted that, he has not paid the huge amount of Rs.9 lakhs either through cheque or DD or on line, but that itself cannot be termed as the transaction in question is not enforceable.

22. It is also true that, the complainant has admitted that, he does not know the date on which 34 C.C.No. 1118/2018 J the loan amounts were given to the accused, but has stated that, in the month of September 2016 had advanced Rs.1,50,000/­ and in the month of December 2016 again he has lend Rs.9 lakhs to the accused and out of the amount earned from his business and savings has paid Rs.9 lakhs to the accused and has denied the suggestions that, he has not paid Rs.2,94,000/­ to the accused as mentioned in Ex.P.1 to Ex.P.3 and has not paid Rs.9 lakhs as mentioned in Ex.P.4. The complainant has also denied the suggestions made to him that, the Ex.P.1 to Ex.P.4 cheques are 10 to 15 years old cheques and since the said cheques were not in existance as on the date of their presentations, therefore the said cheques have been dishonored for Want of Sufficient Fund i.e., the Ex.P.1 to Ex.P.4 returned for the reasons of "Insufficient Funds", but the said suggestion cannot be acceptable one, as the cheques cannot be return with an endorsement of Insufficient Funds from the bank since the cheques in question are 10 to 15 years old cheques, therefore the suggestion made by the accused itself is under misconception of law and facts. The complainant has also denied the suggestion that, he has not stated in 35 C.C.No. 1118/2018 J notice, complaint or affidavit evidence about the date of lending of loan amount to the accused since he had not lend either Rs.98,000/­ or Rs.9 lakhs in favour of the accused and Ex.P.1 to Ex.P.4 cheques have been given to him in respect of the transaction pertains to the year 2005 and same have been misused by him and he has filed this false case against the accused since the brother of the accused had filed civil suit for his eviction from the shop premises, therefore on careful perusal of the entire cross­examination of the complainant nothing has been elicited to discard or discredit his evidence.

23. It is also relevant here to mention that, it is the specific defence of the accused that, the complainant had given in writing to the accused stating that, he had collected two cheques of the accused belongs to the Indian Bank i.e., cheque No.118718 for Rs.50,000/­, cheque No.36397 for Rs.50,000/­ and the said receipt paper has been given to the accused, but during the course of cross­ examination the complainant has categorically denied the said suggestion and the said document was marked as Ex.N.1 only for the purpose of identification. It is true that, the complainant has 36 C.C.No. 1118/2018 J admitted that, he has no objections to send the writings mentioned in Ex.N.1 for getting expert opinion and also admitted that, has no objections to send the cheques in question for getting expert opinion by sending same to the hand writing expert, but the accused has not made any efforts to get the Hand Writing Expert opinion as suggested to the complainant, in such circumstance mere making suggestions to the complainant as he has issued receipt paper by stating that, he had collected two cheques of the accused pertains to the Indian Bank by mentioning the numbers and amounts cannot be considered that, the cheques in question have been collected by the complainant in the year 2005 itself in respect of the alleged transaction as stated by the accused in his defence, therefore on careful perusal of the entire cross­examination of the complainant nothing has been elicited to discard or discredit his evidence.

24. It is also relevant here to mention that, though the accused has denied the lending of loan amounts by the complainant and has taken specific defence that, the complainant has not produce the document to show that, he has lend the loan 37 C.C.No. 1118/2018 J amounts in question to the accused and the cheques in question have been issued towards discharge of the debt in question. As it is held in the above that, the complainant has proved that, he has lend an amount of Rs.1,50,000/­ to the accused on 10.12.2015 and thereafter also lend an amount of Rs.9 lakhs to the accused and in turn the accused has executed on demand promissory notes i.e., Ex.P.12 to P.14 towards borrowing of Rs.1,50,000/­ and also issued the Ex.P.1 to Ex.P.3 towards discharge of the said loan amount alongwith the interest and also issued the Ex.P.4 cheque towards discharge of loan amount of Rs.9 lakhs. Apart from that, as it is already held in the above that, the complainant has complied the mandatory requirements as required U/s.138(a) to (c) N.I.Act by producing oral and documentary evidence and the accused has also admitted that, the cheques in question belongs to the account and the signatures found on cheques in question are those of the signatures of the accused and the cheques in question issued in favour of the complainant. It is also proved by the complainant that, the cheques in question have been presented to the bank within 38 C.C.No. 1118/2018 J their validity period and same have been dishonored for want of sufficient funds and thereafter the complainant got issued legal notice to the accused and in turn the said notice was served on the accused, despite of that, the accused has not issued reply to the said notice, in such circumstance even in the absence of documentary evidence with regard to source of funds, a presumption can be drawn in favour of the complainant with regard to existence of debt or legally recoverable debt. 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 an adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench 39 C.C.No. 1118/2018 J Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque is statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15­03­2018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR 40 C.C.No. 1118/2018 J 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 41 C.C.No. 1118/2018 J drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is 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 42 C.C.No. 1118/2018 J claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble Apex Court of India reported in ICL 2021(2) SC 529 in the case of M/s Kalamani 43 C.C.No. 1118/2018 J Tex Vs. P. Balasubramanian, dt: 10.02.2021, wherein the Hon'ble Apex Court held that, "once the accused had admitted his signatures on the cheque and deed, the trial court ought to have presumed that, the cheque was issued as consideration for legally enforceable debt." In another decision of Hon'ble Apex Court of Indian in Crl. Appeal No.132/2020 in the case of D. K. Chandel Vs. M/s Wockhardt (L) wherein it is held that, "Production of account books / cash book may be relevant in the civil court, may not be so in the criminal case filed under Sec.138 of N.I. Act while restoring the trial court judgments, the High Court observed that "the reason given by the lower Appellate Court that, he did not bring the cash book or order book etc., could well be understood, if civil suit is tried." But may not be so in the criminal case filed under Sec.138 of N.I. Act. This is because of presumption raised in favour of holder of cheque. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex 44 C.C.No. 1118/2018 J Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied mandatory requirements and has proved that, the Accused has issued the cheques in question in his favour and the Accused has admitted the cheques belongs to his account and signatures appearing on the cheques are those of his signatures, in such circumstances, presumptions have to be drawn towards existence of 45 C.C.No. 1118/2018 J legally enforceable debt as per Sec.139 of N.I.Act. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the accused that, the complainant has not produced the documents to show that, he has lent an amount of Rs.1,50,000/­ and Rs.9 lakhs to the accused and the documents produced by the complainant are not sufficient to prove that, complainant was having financial capacity to lend the money and complainant has not examined any witnesses to prove that, he has lent the loan amount to the accused cannot be acceptable one. The defence taken by the Accused appears that, the complainant has to prove his claim by producing his evidence as if it is required for proving of his debt before the Civil Court, but same cannot be permissible in a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decision, 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 him and signatures found on the cheques in question are also those of 46 C.C.No. 1118/2018 J his signatures.

25. In order to rebut the presumption available to the complainant, the accused himself examined as DW1 and stated that, he has borrowed an amount of Rs.6,05,000/­ from the complainant in the year 2005 and he has repaid the said amount to the complainant and in this regard the complainant has issued a written chit to him and he has produced the said chit which is at Ex.D.1. The accused / DW1 has also deposed that, in Ex.D.1 there is mentioning of cheques which have been given by him to the complainant and he had given four cheques pertains to the Indian Bank and three cheques pertains to the Malleshwaram Co­Operative Bank in favour of the complainant and same has been mentioned in Ex.D.1. The accused / DW1 has also stated that, the cheques in question i.e., Ex.P.1 to P.4 pertains to Indian Bank and the complainant has not presented the remaining cheques and also not returned to him. The accused has also stated that, he has issued blank cheques to the complainant and has not written in the cheques and he does not know the writings in the Ex.P.1 to P.4. The accused / DW1 further deposed that, the complainant is a tenant 47 C.C.No. 1118/2018 J under his brother and there are cases filed between them, for that reason the complainant has filed this case against him and since the year 2010 the cases between his brother and the complainant are pending, since then the differences aroses between him and the accused and after the year 2010 no financial transactions were taken place between him and the accused and has no due to the complainant and the complainant informed him to return the cheques to him in the year 2010 at that time there was a good relationship between him and the complainant, therefore he had not taken any action, but after 2010 the disputes started between his brother and the complainant, then the complainant did not return the cheques to him. In support of his oral evidence has produced certified copy of receipt which is at Ex.D.1.

26. On careful going through the entire evidence of the accused, the sum and substance of the defence of the accused is he had borrowed an amount of Rs.6,05,000/­ from the complainant and had returned the said amount within two to three years to the complainant and at the time of borrowing the said amounts the complainant had 48 C.C.No. 1118/2018 J collected the cheques in question i.e., Ex.P.1 to Ex.P.4 and also the complainant had issued Ex.D.1 for having collected the cheques in question. But on perusal of the Ex.D.1 in the document it is nowhere mentioned that, the complainant had collected the cheques which mentioned in Ex.D.1 at the time of alleged lending of loan amount of Rs.6,05,000/­ in the year 2005 as stated by the accused in his evidence. The accused in his cross examination has categorically admitted that, "ನಡ1 ರಲ ಪರರದದರರರ ನನಗ ಸನರದ ಎರಡರ ಚಕ‍ ಗಳನರ ನ ತಗದರಕನರಡರರತತರ ರರದರ ಬರದರರವದಲಲ . ನಡ1 ರಲ ನನನ ಹಸರನಲ ಮನರರ ಚಕ‍ ಗಳನರ ನ ಬರಯಲಗರರತತದ . ನಡ1 ರಲ ದನರಕ ಮತರತ ಪರರದದರರ ಸಹ ಇರರವದಲಲ ." Hence the accused himself admitted that, there is no reference of name of the complainant and also not mentioned that, the complainant had received the cheques which have shown in the Ex.D.1. It is also relevant here to mention that, except the production of Ex.D.1 the accused has not produced any satisfactory evidence to show that, the writings found in Ex.D.1 are those of the writings of the complainant and the complainant had issued the Ex.D.1 during the year 49 C.C.No. 1118/2018 J 2005 as alleged by the accused, in such circumstance only on the basis of oral say of the accused that, the defence of accused that, the complainant had issued Ex.D.1 for having collection of cheques in question and other cheques belongs to the accused during the year 2005 at the time of lending of the alleged loan amount of Rs.6,05,000/­ cannot be acceptable one. It is also relevant here to mention that, though the accused has stated that, he had returned Rs.6,05,000/­ to the complainant within two to three years from the date of borrowing, but in order to prove the said defence the accused has not produced any documentary proof, therefore only in order to evade liability in question the accused has taken such type of defence and same cannot be acceptable one. It is also relevant here to mention that, during the course of cross­ examination of the complainant, the accused has taken specific defence that, there is no problem or hindrance to the complainant to refer the handwritings mentioned in Ex.D.1 for getting expert opinion, but inspite of that has not made any effort to get the Handwriting Expert opinion, in such circumstances only on the basis of Ex.D.1 it cannot 50 C.C.No. 1118/2018 J be held that, the writings mentioned in Ex.D.1 are those of the complainant and the complainant had issued the Ex.D.1 in favour of the accused. Therefore on perusal of oral and documentary evidence the accused has miserably failed to prove that, he had borrowed an amount of Rs.6,05,000/­ as loan from the complainant in the year 2005 and the said amount was repaid by him within two to three years and the accused at the time of lending of the loan amount had collected the cheques in question i.e., Ex.P.1 to Ex.P.4 and other cheques belongs to him and to that effect the complainant had issued Ex.D.1.

27. It is also the specific defence of the accused that, though he has repaid the amount of Rs.6,05,000/­ to the complainant and there are disputes between his brother and complainant and cases were filed by them and same are pending before the court since the year 2010, hence, after filing the cases by the complainant and his brother the differences arose between him and the complainant and inspite of requesting the complainant he did not return the cheques belongs to him and has filed this case against him. In order 51 C.C.No. 1118/2018 J to substantiate the defence of the accused that, the differences arose between his brother and the accused in the year 2010 and due to that, the cases were filed by and against them and same were pending since 2010, the accused has not produced any documents and also not produce any documents to show that, he has requested the complainant for return of his cheques, therefore only on the basis of oral evidence that too in the absence of documentary evidence it cannot be held that, the accused has repaid the alleged loan amount of Rs.6,05,000/­ to the complainant and requested for return of his cheques, but due to the pendency of the cases, the complainant did not return the cheques in question to him. If really the accused has repaid the alleged loan amount to the complainant and despite of it the complainant did not return his cheques after the year 2010, definitely the complainant would have taken legal action against the complainant for non­ return of his cheques either by issuing legal notice to the complainant or by filing complaint before the concerned police or by filing complaint before the courts of law, but no such efforts have been made by the accused since the year 2010, therefore the 52 C.C.No. 1118/2018 J conduct of the accused in non­taking of action for non­return of his cheques by the complainant may leads to drawn an adverse inference against the accused that, the Accused has not initiated any action against the complainant since the cheques in question have been issued by the Accused to the complainant towards discharge of the liability in question but not for any other reasons. 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 never asking their return for 53 C.C.No. 1118/2018 J 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". Hence in view of the principles of law laid down by the Hon'ble Apex Court are 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 alleged to have been given to the complainant for alleged loan transaction, 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 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 the signatures and cheques in question are belongs to the account of accused.

28. It is also the defence of the accused that, he has issued blank cheques to the complainant and he had not written contents of the cheques in 54 C.C.No. 1118/2018 J question i.e., Ex.P.1 to P.4 and the complainant has filed this complaint against him. But during the course of his cross­examination has admitted that, the signature found on the cheques in question are those of his signatures and belongs to his account, hence it goes to show that, the accused has admitted the signatures found on the cheques in question are those of his signatures and the said chques are belongs to his account and the cheques in question have been given to the complainant. Therefore once signature on the Negotiable Instrument Act is admitted, in that circumstances Sec. 20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he/she had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that "a reading of sec.20 of the act which is extracted above reveals that, the words 55 C.C.No. 1118/2018 J 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., wherein it is held that " Negotiable Instrument 56 C.C.No. 1118/2018 J 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 57 C.C.No. 1118/2018 J question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the 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 58 C.C.No. 1118/2018 J transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible.

Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law laid down by Hon'ble Apex court of India and also Hon'ble High Court of Karnataka referred above and in the present case also the Accused has 59 C.C.No. 1118/2018 J admitted his signatures on Negotiable Instrument i.e. cheques and he also admitted issuance of the cheques to the complainant, it is prima­facie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or fabricated the cheques in question given by him 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. Therefore for the above said reasons the arguments canvassed by the learned counsel for the accused are not acceptable one.

29. It is also the specific defence of the accused that, the cheques in question are pertains to the year 2005 and the accused has given the said cheques in the year 2005 at the time of borrowing of loan amount of Rs.6,05,000/­, therefore the complainant has misused his old cheques by mentioning the date and presented the said cheques 60 C.C.No. 1118/2018 J to the bank and has filed this false case against him, but the complainant has denied the said suggestions and has clearly stated that, the cheques in question have been issued by the accused as postdated cheques in the year 2016. Even for sake of discussion if it is assumed that, Accused has given cheques in question without mentioning the name of the payee and date to the complainant in such circumstances also it attracts the penal liability as contemplated U/s.138 of N.I. Act. In this regard, it is relevant here to refer decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing 61 C.C.No. 1118/2018 J 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 did not proved 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 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 62 C.C.No. 1118/2018 J Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In view of the principles of law laid down as above, even if it is assumed that, the complainant has written his name and date on the cheques in question in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheques in question and it can be presumed that, the said cheques have been issued towards discharge of 63 C.C.No. 1118/2018 J legally recoverable debt. It is also relevant here to refer the decision of Hon'ble Apex court held in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " (a) Negotiable Instrument Act 1881 - S.138 - If on the date of the cheque liability or debt exist or the amount has become legally recoverable­ S.138 will apply - not otherwise". In another decision of Hon'ble High Court of Bombay decided in CRM­M No.2607/2018 (O & M) dated: 27.8.2019 in the case of Kailash vati Vs. M/s. Ludhiyana Beverages., wherein the Hon'ble High Court held that " A. Negotiable Instrument Act 1881 - S.138 and 6 - Dishonour of cheque­ date of drawn - Determination of - The date on which the cheque is drawn has to be with reference to the date mentioned in the column in the cheque and not the date on which it was signed­ Date when the cheque is drawn is not defined in the act - If date of singing cheque is accepted then all post dated 64 C.C.No. 1118/2018 J cheques cannot be treated as valid cheques within and drawer of cheques would stand absolved from criminal prosecution if cheques are presented after three months of the date on which signature were appended". Hence in view of the principles of law laid down by the Hon'ble Apex Court of India, it can be held that, the liability of the debt existed as on the date mentioned on the cheque not as on the date of signature on the cheque, even for sake of discussion the arguments canvassed by the learned counsel for the Accused taken into consideration but in view of the principles of law laid down by the Hon'ble Apex Court and High Court of Bombay it is to be considered that the date on which cheques were drawn has to be with reference to the date mentioned in the cheques but not the date on which they were signed., therefore the arguments canvassed by the learned counsel for the defence that, the complainant has misused the blank cheques issued by the accused in the year 2005 cannot be acceptable one.

30. It is a relevant here to mention that, the Accused has also taken specific defence and the 65 C.C.No. 1118/2018 J learned counsel for the defence has also argued that, the cheques in dispute are of the year 2005 and the account number in the alleged cheques i.e., Ex.P.1 to Ex.P.3 having 3 digits account number, therefore the cheques in dispute have been misused by the complainant by mentioning the date and has presented the said cheques during the year 2017. On careful perusal of the defence of the Accused and arguments canvassed by the learned counsel for the defence, it appears that, according to the Accused the cheques in question are of the year 2005 as having account number three digits only, but the complainant misused the same, but as it is already held in the above that, the complainant has proved that, the cheques in question were issued to him and the bank has presented to the bank in turn the bank has issued an endorsement date:

16.10.2017 as per Ex.P.5 to Ex.P.7 stating that, the cheques in question were dishonoured for the reason of "Funds Insufficient' in the account of Accused after verification and perusing the said cheques, therefore the question of misusing of cheques by the complainant as alleged by the accused does not arise at all.

C.C.No. 1118/2018 J

31. It is also relevant here to mention that, It is the specific defence of the Accused that, the cheque in question and promissory note and consideration receipt and other documents were issued by him as blank signed cheques and promissory note an consideration receipt in the year 2005 to the complainant at the time of availing loan of Rs.6,05,000/= from him, however this court has already held in the above that, the Accused has miserably failed to prove the defence that, the cheques in question and promissory notes and consideration receipt i.e Ex.P.1 to P.4 and Ex.P.12 to Ex.P.14 were issued in blank signed infavour of the complainant in the year 2005 itself and the Accused has not produced any concrete evidence to prove his defence or to disprove the loan transaction in question, in such circumstances, in the absence of evidence, cannot be held that, the cheques were issued in the year 2005 as alleged by the Accused. In this regard, it is relevant here to refer the decision of Hon'ble Apex court of India reported in AIR 2015 SC 2240 in the case of T. Vasanthakumar Vs. Vijayakumari wherein the Hon'ble Apex court held 67 C.C.No. 1118/2018 J that "NEGOTIABLE ISNTRUMENTS Act, 1881­ Section 138 and 139 - Dishonour of cheque - appeal against acquittal­ cheque as well as signature on it not disputed by Accused /respondent­ presumption U/s.139 would be attracted - story brought out by Accused that cheque was given to the complainant long back in 1999 as security to a loan : the loan was repaid but complainant did not return security cheque­ Is unworthy of credit , apart from being unsupported by any evidence - mere printed date on cheque by itself cannot be conclusive of fact that, cheque was issued in 1999". Hence in the present case also it is the main defence of the Accused that the cheques in dispute and promissory notes alleged to have been issued in the year 2005 itself to the complainant in respect of the loan amount borrowed him in the year 2005 and the complainant by misusing the said cheques has filed this complaint but the Accused has admitted the issuance of cheques and his signatures on the said cheques and has not produced any documents or proof to prove his defence in such circumstances by 68 C.C.No. 1118/2018 J applying the principles of law laid down in the above decision, the defence of the Accused cannot be acceptable one. Therefore for the above said reasons, the arguments canvassed by the learned counsel for the defence to that effect cannot be acceptable one and are not sustainable in law.

32. 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 him and he has failed to prove his defence and how the cheques in question have come to the possession of the Complainant, this would also give rise to an adverse inference against him. This preposition 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". In another 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 69 C.C.No. 1118/2018 J cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.

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, he has lent an amount of Rs.1,50,000/­ on 10.12.2015 and thereafter has lent an amount of Rs.9 lakhs to the Accused and in turn the Accused has issued the Ex.P.1 to Ex.P.3 for sum of Rs.98,000/­ each including the interest on loan amount of Rs.1,50,000/­ i.e., in total Rs.2,94,000/­ and also issued Ex.P.4 cheque for Rs.9 lakhs in his favour towards discharge of the said loan amounts and thereafter the complainant has presented the said cheques through his banker and same were returned dishonored with an endorsement of "Funds Insufficient" 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 70 C.C.No. 1118/2018 J cheque amounts, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available in favour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 to Ex.P.4 Cheques. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, 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 cheques 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 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 :­ 71 C.C.No. 1118/2018 J 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.12,05,000/= (Rupees Twelve Lakhs and Five Thousand only) within one month from the date of order, in default accused shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.

Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.12,00,000/= (Rupees Twelve 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.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.

The Bail bond of the Accused stands cancelled.

Office is directed to furnish free certified copy of this judgment to the 72 C.C.No. 1118/2018 J 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 21st day of September 2021).

.

(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.

ANNEXURE

1. List of witness/s examined on behalf of the Complainant:­ P.W.1 : Sri. K. Vijay Kumar

2. List of documents exhibited on behalf of the Complainant:­ Ex.P.1 to 4 : Original four Cheques Ex.P.1(a)to4(a) : Signatures of the accused Ex.P.5 to 8 : Bank Memos Ex.P.9 : Office copy of the Legal Notice Ex.P.10 : Postal Receipt Ex.P.11 : Postal Track Result Ex.P.12 to 14 : On Demand Promissory Notes Ex.P.12(a)to14(a): Signatures of the accused Ex.P.12(b)to14(b): Signatures of the accused

3. List of witness/s examined on behalf of the Accused:­ DW.1 : Sri. Sengodan 73 C.C.No. 1118/2018 J

4. List of documents exhibited on behalf of the Accused:­ Ex.D.1 : Certified copy of Receipt (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.

C.C.No. 1118/2018 J 21.09.2021 case called, Both complainant and counsel for the complainant absent, counsel for the accused absent and accused present. Judgment pronounced in the open court, (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.12,05,000/=
             (Rupees Twelve Lakhs and
             Five Thousand only) within
             one month from the date of
             order, in default accused shall
             under go simple imprisonment
             for a period of (3) three months
             for the offence punishable
             U/sec.138 of N.I.Act.
                  Further acting U/sec.357(1)
             of Cr.P.C. out of the fine amount
             on    recovery,     a    sum   of
             Rs.12,00,000/=            (Rupees
             Twelve 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
     75
                 C.C.No. 1118/2018 J




on   recovery     a    sum     of
Rs.5,000/=     (Rupees     Five
Thousand only) shall be
defrayed as          prosecution
expenses to the state.

   The Bail bond of the 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.