Bangalore District Court
U/S 200 Of Cr.P.C For The Offense vs Not Regular In Repayment Of Monthly on 9 April, 2021
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:- Sri. PRUTHVIRAJ VERNEKAR
B.Com, LLB
XXVIII A.C.M.M
Bengaluru City.
Dated this the 9th day of April, 2021
CC.No.29512/2017
JUDGMENT
1. Sl.No. of the case : C.C.No.29512/2017
2. The date of commence of Evidence: 28.11.2017
3. The date of Institution : 26.09.2017
4. Name of the Complainant :Surabhi Chits Ltd, No.161, 2nd Floor, 7th Block, Jaya Nagar, West, K.R. Road, Opp Indian petrol Bunk, Bengaluru-560078, By its GPA Holder, Sri.Dharanesha M.K. v/s
5. Name of the Accused : Sri.Vipul H.Solanki, S/o.Sri.Harisinh Solanki, No.13, 1st Main, 1st Criss, Annapoorneswari Road, Chunchangatta Road, Bengaluru-78.
CC.No.29512/2017 2
6. The offence complained : U/s.138 of N.I. Act
7. Plea of the accused on his examination : Pleaded not guilty
8. Final Order : Accused is Convicted
9. Date of such order : 09.04.2021 JUDGMENT
1. This case has been registered against the accused on the basis of the complaint filed by the complainant u/s 200 of Cr.P.C for the offense punishable u/s 138 r/w 142 of N.I. Act.
2. The gist of the complainant's case is that :
Complainant submits that, Surabhi Chits Limited is a company engaged in the chit business and registered under the provisions of chit fund Act, 1982. The complainant submits that, the accused is the subscriber of the complainant company at Banashankari Branch and had subscribed to the chit group BFL-12 TKT No: 22A for the chit value of Rs.5,00,000/- payable at the rate of Rs.10,000/- per CC.No.29512/2017 3 month for a period of 50 months. The accused had participated in the above said chit auction and declared the prize bidder in the chit auction held on 24.08.2013 after getting the prised amount, the accused not regular in repayment of monthly installments thereafter the accused became a defaulter and towards the discharge of due amount the accused had issued a cheque bearing No.000022, dt:28.07.2017 for Rs.1,69,423/- drawn on HDFC Bank, No.37/953, 24th Main J.P.Nagar, II Phase, Bangalore in favour of the complainant, which on presentation of the said cheque for encashment through its bankers Bank of India, Banashankari branch, Bangalore, the said cheque was dishonored and returned back with a memo 'funds insufficient' on 29.07.2017. Thereafter the complainant got issued a legal notice on 10.08.2017 to the accused by RPAD.
The said notice unserved as per intimation on delivery dated 16.08.2017 with remarks Door locked issued by CC.No.29512/2017 4 the postal authority. Inspite of lapse of 15 days from the date of receipt of the legal notice, the accused not paid the cheque amount and committed an offense unser sec.138 of the N.I.Act 1881. Hence the complainant constrained to filed this complaint against the accused and prays for punish the accused in accordance with law.
3. In pursuance of the summons, the accused has appeared through Counsel and got enlarged on bail by executing necessary documents. The copy of the complaint was furnished to the accused, as required under law. As there are sufficient material, plea was recorded against the accused on 13.12.2019 and explained to the accused in his vernacular, for which the accused pleaded not guilty and claims to be tried.
4. In order to prove the case, the marketing manager of the complainant Company examined as PW1 and got marked Ex.P1 to Ex.P14. Accused neither examined nor got marked any documents on his CC.No.29512/2017 5 behalf.
5. Then the statement u/s 313 Cr.P.C was recorded on 17.03.2021, wherein the incriminating evidence appeared against the accused was read over and explained which was denied by the accused.
6. Heard argument counsel for the complainant. The learned Counsel for the accused has filed written argument.
7. Heard arguments and perused the material placed on record.
8. On the basis of the above facts, the following points arise for my consideration:
1.Whether the complainant proves that the accused towards discharge of legal recoverable debt issued cheque bearing No.000022 dated:28.07.2017 for an amount of Rs.1,69,423/- drawn on HDFC Bank, JP Nagar Branch, Bangalore in favour of complainant, on presentation for encashment it was returned as 'Funds Insufficient' and in spite of CC.No.29512/2017 6 receipt of legal notice, the accused failed to pay the cheque amount within the statutory period and thereby the accused has committed an offense punishable u/s 138 of N.I. Act?
2. What order?
9. My findings on the above points are as under :
Point No.1: In the Affirmative Point No.2: As per final order, for the following:
REASONS
10. Point No.1:- In order to prove the case of the complainant, the marketing manager examined as PW1 and got marked the documents Ex.P1 to 14. In the present case, it is a specific case of the complainant that, the complainant company is a registered chit fund company engaged in the chit business. Accused has participated in the chit group BFL -12 TKT No:22A and he was declared as a prize bidder in the chit auction held on 24.08.2013. The CC.No.29512/2017 7 accused after getting prised amount was not regular in repayment of monthly installments. The accused at the time of receiving the amount from the complainant company has issued demand pronote towards the discharge of overdue subscription amount from 24.02.2015 to July 2017 including its arrears and interest the accused had issued a cheque dated 28.07.2017 for Rs.1,69,423/- bearing No.000022 drawn on HDFC Bank, JP Nagar. On presentation of the said cheque by the complainant company returned with an endorsement "Funds Insufficient dated 29.07.2017. Thereafter inspite of issue of legal notice to the accused he has not repaid the cheque amount. Therefore the complainant company constrained to file this complaint against the accused and pray for punish the accused in accordance with law.
11. On the other hand the learned counsel for the accused at the time of argument filed written argument. In the written argument contended that, CC.No.29512/2017 8 as per the Ex.P5 i.e., chit agreement clause 2(a) 48 installment shall pay less amount of the chit amount after deducting the monthly dividend but the complainant has no where stated what is the last paid amount after deducting the dividend and what is the amount paid on bid prise taken by the accused. As per the complainant evidence at para no.6 says that, the accused has issued cheque bearing No.000022 for sum of Rs.1,69,423/- towards the arrears and interest for the period of 24.02.2015 to July 2017 is totally false and baseless. Since chit was closed on 28.02.2016 itself then the question of paying arrears from 28.06.2016 to July 2017 does not arise and it is false claim. Though the complainant obtained the surety not taken any action against them it clearly goes to show that, the accused has paid the chit amount. The complainant has not produced the bank statement till the closing of the chit fund till the 28.02.2016. It shows that, the complainant has not CC.No.29512/2017 9 approached this Hon'ble court with clean hands. For all these reasons pray for dismiss the compliant filed by the complainant.
12. This being the evidence and documents produced on behalf of the complainant and also contention taken on either side in order to prove the case of the complainant the marketing manager of the complainant company examined as PW1. In this chief- examination he has reiterated all the facts narrated in the complaint. Apart from this the complainant in order to substantiate his claim got marked the documents Ex.P1 to P14. Ex.P1 which is the minutes of meetings, Ex.P2 GPA, Ex.P3 chit sanction order, Ex.P4 certificate for run the chit business. On perusal Ex.P1 to 4 which clearly goes to show that, this complainant is authorized to file this complaint and the complainant company has obtained permission to run the chit business from the competent authority.
13. The complainant has also produced Ex.P5 which CC.No.29512/2017 10 is the chit agreement, Ex.P6 on demand note, Ex.P7 is the receipt dated 09.01.2014, Ex.P8 is the surety personal form, Ex.P9 is the account statement. On perusal of the said document also clearly goes to show that, the accused has issued chit agreement on 08.02.2012 and also executed on demand note along with sureties on 09.01.2014. Apart from this also clearly goes to show that, the accused has received the receipt for the prised amount and also accused himself and two sureties have executed surety personal form in favour of the complainant company. The complainant has also produced Ex.P9 account statement in order to show the statement of the accused which is marked at Ex.P9 according to Ex.P9 it has been clearly shown the dividend amount and actual amount received and balance outstanding.
14. The complainant has produced cheque and returned memo which are marked at Ex.P10 and Ex.P11. On perusal of the same, which clearly goes to CC.No.29512/2017 11 show that, cheque bearing No.000022 dated 28.07.2017 for Rs.1,69,423/- is issued in favour of the complainant company same is on presentation by the complainant company for collection returned with endorsement fund insufficient on 29.7.2017. Apart from this the complainant has also produced copy of legal notice, postal receipt, returned cover which are marked at Ex.P12, Ex.P12(a), Ex.P13. On perusal of the same, also clearly goes to show that, the complainant has issued legal notice to the accused address as shown in the complaint. Inspite of that, same is returned with endorsement unclaimed. On perusal of all these documents produced on behalf of the complainant which clearly goes to show that, the accuse has taken a chit BFL 12 22 value of Rs.5,00,000/- each installment Rs.10,000/- and total installment 50 and also executed chit agreement, receipt and also surety personal form along with sureties and apart from this it also clearly goes to CC.No.29512/2017 12 show that, the accused has issued cheque bearing NO.000022 for Rs.1,69,423/- on 28.07.2017 in favour of the complainant company and on presentation of the same by the complainant company returned with endorsement "Funds Insufficient and insptie of issuance of the legal notice by the complainant to the accused did not repay the cheque amount. In the present case the accused has taken specific defense that Ex.P10 cheque has given for security purpose and the accused has made payment of entire chit amount to the complainant. In the written argument also counsel for the accused has taken contention that the complainant during cross examination admitted with regard to the cheque taken for security purpose from the accused. In view of this which clearly goes to show that there is no recoverable debt from the accused to the complainant company and complainant company has misutilsied the cheque given for security purpose and filed this false complaint. In the present case as CC.No.29512/2017 13 I have discussed above the complainant has given corroborative evidence and also produced material documents Ex.P1 to ExP14 in order to corroborate his evidence. The accused has not produce any material documents and receipts to show that he has made entire chit amount to the complainant. Only on the admission given by the PW1 during cross examination it is difficult to come to the conclusion that he has taken Ex.P10 cheque for security purpose . On the other hand, there was an opportunity to the accused in order to prove his defense by leading his evidence and also by producing material documents. When the initial burden is discharged by the complainant the burden shifts on the accused by way of rebuttal to prove his defense inspite of that accused at the time of recording 313 statement submits no evidence on behalf of him. It is well established principles of law that there is a presumption u/sec 139 of N.I Act in favour of the holder of the cheque. Though the same CC.No.29512/2017 14 is not conclusive same has to be proved by way of rebuttal evidence.
15. In the instant case, the complainant has produce Ex.P10 cheque that has been issued by the accused for an amount of Rs.1,69,423/- with signature Ex.P10(a) on the said cheque and contended that the cheque has been issued by the accused in discharge of legal debt and liability which on presentation for collection was dishonoured for the reason 'funds insufficient' as per Ex.P11 /memo. It is pertinent to note that nowhere the counsel for the accused denied the execution of the cheque Ex.P10 with signature Ex.P10(a) of the cheque was dishonoured for the reason 'funds insufficient'. It is also equally important to note that accused has not lead any evidence to disprove the cheque Ex.P10 with his signature Ex.P10(a) was not ssued by him for an amount of R.1,69,423/- and the said cheque was dishonoured on presentation for the reason 'funds insufficient' as per CC.No.29512/2017 15 Ex.P11. In view of this it is crystal clear that the complainant has proved that the accused had issued the disputed cheque Ex.P10 for an amount of Rs.1,69,423/- for the discharge of his liability which have been dishonoured for the reason 'funds insufficient' as per Ex.P11. The entire burden is on the accused to rebut the presumption u/sec.139 of N.I Act as per dictum of law laid down in the following cases of Hon'ble Supreme Court reported in:
2019 SAR 2446 (Criminal) 309 Supreme Court, ( Bir Singh v/s Mukesh Kumar).
(E) Negotiable Instruments Act (26 of 1881), S, 138, 139 - Dishonour of cheque - Presumption as to legally enforceable debt - Rebuttal - Onus to rebut presumption that cheque issued in discharge of debt or liability is on accused. (Para 36) (G)Negotiable Instruments Act, (26 of 1881), Ss.138, 139 - Presumption as to legally enforceable debt - Rebuttal - Signed blank cheque- If voluntarily CC.No.29512/2017 16 presented to payee, towards payment, payee may fill up amount and other particulars and it in itself would not invalidate cheque - Onus would still be on accused to prove that cheque was not issued for discharge of debt or liability by adducing evidence.
(Para-38).
(H) Negotiable Instruments Act (26 of 1881), Ss, 138- Dishonour of cheque - Complainant can fill up amount or particulars in blank cheque. (Para 38).
(J)Negotiable Instrument Act 26 of 1881), Ss. 138, 139 - Dishonour of cheque - Absence of finding that cheque was not signed by accused or not voluntarily made over to payee- No evidence regarding circumstances in which blank signed cheque given to complainant - Cheque presumed to be filled in by complainant being payee in presence of accused, at his request or with his acquiescence- No change in amount, its date or name of payee- Subsequent filing in of an unfilled signed cheque is CC.No.29512/2017 17 not alteration- Accused liable to be convicted. This ruling is applicable to the present facts and circumstances of the case since in para-36, 37, 38 & 40 the Hon'ble Supreme court has clearly laid down the dictum of law that the onus to rebut the presumption u/s 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque may be post dated does not absolve the drawer of the cheque of a penal consequences of sec.138 of the N.I Act.
16. On perusal of the said ruling the Hon'ble Supreme Court had made it very clear that if a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill of the amount and other particulars. This in itself would not invalidate the cheque. The Onus would still be on the accused to prove that the cheque was not in discharge of debt or liability by adducing evidence. It is further held that even blank cheque leaf, voluntarily signed CC.No.29512/2017 18 and handed over by the accused, which is towards some payment, would attract presumption u/s 139 of the Negotiable Instrument Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. It is also held that the provisions of Sec.20, 87 and 139 makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. Further in para-36 the Hon'ble Supreme Court makes it clear that the burden is on the accused to rebut the presumption u/s 139 of N.I Act that the cheque/Ex.P10 with signature Ex.P10(a) in the instant case issued by the accused was not in discharge of legal debt and liability but in the instant case there is CC.No.29512/2017 19 clear admission by the accused that the disputed cheque Ex.P10 and the signature Ex.P10(a) on the said cheque belongs to him and he had issued as per the condition No.6 mentioned in the declaration for the discharge of his legal debt and liability. In view of the dictum of law laid down in the above referred judgment and on appreciating the evidence of the accused and complainant it is crystal clear that the accused failed to rebut the presumption existing u/s 139 N.I Act in favour of the complainant.
17. At this juncture I would also like to refer the ruling reported in:
AIR 2019 SUPREME COURT 1876 Rohitbhai Jivanlal Patel v/s State of Gujarat and another (A) Negotiable Instruments Act (26 of 1881), Ss.
138, 139 - Dishonour of cheque - Rule of Presumption of innocence of accused - Cannot be CC.No.29512/2017 20 applied with same rigour to offence u/s 138, particularly where presumption is drawn that holder received the cheque for discharge, the debt or liability.
(B) Negotiable Instruments Act (26 of 1881), Ss.118, 138 - Dishonour of cheque - Presumption in favour of holder - All basic ingredients of Ss.138, 118 and 139 are apparent on fact of record - Therefore, it is required to be presumed that cheques in question were drawn for consideration and complainant received it is discharge of an existing debt.
(D) Negotiable Instruments Act (26 of 1881), Ss. 138, 139 - Dishonour of cheque - Principles of presumption - Once presumption of existence of legally enforceable debt drawn in favour of complainant, onus is shifted on accused - unless onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on CC.No.29512/2017 21 case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused.
On perusal of the ruling it is found that the ruling is applicable to the present facts and circumstances of the case. It is clearly held that an all basic ingredients of Sec.138, 118 and 139 are apparent on actual record then it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e a complainant had received the same in discharge of an existing debt. The onus shifts on the accused who has to establish by probable defense so as to rebut such a presumption but in this case the accused has utterly failed to produce probable defense that the cheques were not issued in discharge of legal debt and liability. It is clearly held in the said judgment that unless the onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of CC.No.29512/2017 22 complainant cannot be raised.
18. At this juncture I would also like to discuss the citation reported in AIR 2018 Hon'ble Supreme Court 3601 (T.P Murugan (Dead) Thr.Lrs.V Bojan AND Posa Nandhi Rep.Thr, POA Holder, T.P Murugan v. Bojan) In this ruling at para-8 the Hon'ble Supreme Court has laid down the dictum of law that u/s 139 of the N.I Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability by referring to K.N.Beena v/s Muniyappan and Another, (2001) 8 SCC 458, para-6 and Rangappa v/s Shrimohan (2010) 11 SCC 411, para 26 . It is further held that the presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan.
The dictum of law laid down by Hon'ble Supreme CC.No.29512/2017 23 Court in this case is aptly applicable to the fact and circumstances of the present case since accused has utterly failed to rebut the presumption u/s 139 of N.I Act existing in favour of the complainant that the cheque Ex.P10 issued by him is not for discharge of any legal debt or liability.
19. The learned counsel for the complainant has also produced zerox copy of decision reported in AIR 2018 Supreme Court 3173 Kishan Rao v/s Shankargowda and another decision reported in 2005 Crl Law Journal 1093. On perusal of the said decisions as per dictum laid down by their lordship are also aptly applicable to the case of the complainant.
20. The word 'unless contrary is proved' is discussed by the Hon'ble Apex Court in a decision reported in 2011 Crl.L.J 4647 (SC). It is observed that "the accused is under the obligation to prove his case in trial by leading cogent evidence that there was no debt or liability to the satisfaction of the Court".
CC.No.29512/2017 24 'Unless contrary is proved' means the presumption has to be rebutted by proof and not by a bare explanation which is mere plausible. The said fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that the reasonable man could act on the supposition that is exist. Therefore, unless explanation is supported by proof, the presumption created by the provisions cannot be said to be rebutted. In the instant case accused has utterly failed to rebut the presumption by producing cogent evidence and relevant document that the complaint filed against the accused is not maintainable.
21. In this case, the court on perusal of the materials placed before the court is satisfied that the mandatory requirements of Sec.138 and 142 of N.I. Act has been duly complied. It is evident that the cheque/Ex.P10 presented for encashment within the validity time.
22. On appreciation of entire evidence, this court is CC.No.29512/2017 25 of the opinion that the accused miserably failed to challenge the oral and documentary evidence produced by the complainant. Accused has utterly fails to prove the fact that he has not issued cheque for discharge of legally enforceable debt. On the contrary, the complainant has proved through overwhelming evidence that the accused has issued Ex.P10/cheque for a sum of Rs.1.69,423/- towards discharge of legally enforceable debt and on presentation of the cheque, the same was dishonored for the reasons 'Funds Insufficient' and even after service of legal notice, the accused has not paid the cheque amount. Hence, in the considered view of this court, the complainant has proved that the accused has committed an offense punishable u/s 138 of N.I. Act. Hence, I answer the above point No.1 in the affirmative.
23. Point No.2:- From the material on record, it appears that the accused is aged about 42 years and CC.No.29512/2017 26 doing private work. Considering the age, avocation of accused and quantum of the cheque, if the accused is sent to jail, it would cause problem to the accused as well as to his family members. Having regard to the facts and circumstances, prevailing rate of interest in the nationalized Bank and litigation expenses, I proceed to pass the following:
ORDER The accused is found guilty for the offense punishable u/s 138 of N.I. Act.
Acting u/s 255(2) of Cr.P.C. the accused is convicted and sentenced to pay fine of Rs.1,80,000/-, in default shall undergo simple imprisonment for six months.
Out of fine amount of Rs.1,80,000/- a sum of Rs.1,75,000/- is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/- shall be remitted to the CC.No.29512/2017 27 State.
The bail bond executed by the accused shall stand canceled.
Supply free copy of the judgment to the accused. (Dictated to Stenographer directly on the Computer, taken print out corrected, signed by me and then pronounced in the open court this the 9 th day of April, 2021) (PRUTHVIRAJ VERNEKAR) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE Witnesses examined for the Complainant:-
PW1 : Sri. M.K Dharaneesha Witnesses examined for the accused:-
NIL Documents exhibited by the Complainant:-
Ex.P1 : Minutes of meeting
Ex.P2 : C/c of GPA
Ex.P3 : Chit commencement sanction order
Ex.P4 : Chit commencement order
Ex.P5 : Chit agreement
Ex.P6 : On demand
Ex.P7 : Receipt
CC.No.29512/2017
28
Ex.P8 : Guarantor details
Ex.P9 : Account statement
Ex.P10 : Cheque
Ex.P10(a) : Signature of the accused
Ex.P11 : Bank memo
Ex.P12 : Office copy of the legal notice
Ex.P12(a) : Postal receipt
Ex.P13 : Legal notice found in the
returned postal cover
Ex.P13(a) : Cover
Ex.P14 : Amended Complaint
Ex.P14(a) : Original compliant
Documents exhibited by the Accused:-
NIL XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
CC.No.29512/2017
29
Judgment pronounced in the
open Court vide separate order.
ORDER
The accused is found guilty for the offense punishable u/s 138 of N.I. Act.
Acting u/s 255(2) of Cr.P.C. the accused is convicted and sentenced to pay fine of Rs.1,80,000/-, in default shall undergo simple imprisonment for six months.
Out of fine amount of Rs.1,80,000/- a sum of Rs.1,75,000/- is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/- shall be remitted to the State.
The bail bond executed by the accused shall stand canceled.
Supply free copy of the judgment to the accused.
XXVIII A.C.M.M, Bangaluru. CC.No.29512/2017 30