Bangalore District Court
S. Siddaraju vs G.C. Shivananda on 23 October, 2024
1
Crl.A.No. 1387/2022
KABC010308272022
IN THE COURT OF THE LII ADDL. CITY CIVIL & SESSIONS
JUDGE, BANGALORE (CCH-53)
Dated this the 23rd day of October, 2024
PRESENT
Sri.Gangappa Irappa Patil., B.A., LL.B(Spl).,
LII Addl. City Civil & Sessions Judge,
Bangalore.
Crl.A.No.1387/2022
Appellant/ Sri S.Siddaraju
Accused: s/o Siddappa,
aged about 30 years
Sri Vivekananda Techno School,
Shivanna Building
OppAmnrutha college,
Thimmegowdanahadoddi,
Itmadu post,
Bengaluru 562 109
(By Sri. HR , Advocate)
-V/S-
Respondent/ Sri G.C.Shivananda
Complainant s/o late Chennappa,
aged about 70 years
r/at Gonipura village,
K.Gollahalli post, Via- Kengeri
Bengaluru South Taluk
Bengaluru 560074.
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Crl.A.No.1387/2022
(By Sri.HM Advocate)
JUDGMENT
This appeal is filed by the Appellant praying to set-aside the judgment of conviction dated 17.10.2022 passed by XXIII ACMM in CC No.11617/2019 and to acquit him in the said case.
2. The appellant of this appeal was the accused before the Trial Court. The respondent of this appeal was the complainant before the Trial court. The rank of the parties to this appeal will be hereinafter referred to with the same rank as assigned to them before the trial court for the sake of convenience.
3. The brief facts which leads to file this appeal in nutshell are as follows:
It is the case of the complainant that the accused availed loan of Rs. 3 lakhs from the complainant on 20.9.2018 and in order to repay the same had issued cheque bearing No. 262646 dated 12.2.2019 for a sum of Rs. 3 lakhs drawn on Vijaya Bank, Byramangala branch, which on presentation at Vijaya Bank, Kengeri branch, dishonored stating `funds insufficient`, hence the complainant issued legal notice on 5.3.2019 which was served on the accused, but the accused failed to comply the notice. Thereby accused committed an offence punishable U/s.138 of the N.I.Act.3
Crl.A.No.1387/2022
4. After perusal of the material available on record and on prima−facia material grounds, the trial Court took cognizance and thereafter sworn statement has been recorded and summons was issued to Accused. After service of summons, the Accused appeared through his counsel and got himself enlarged on bail and substance of accusation was recorded as to the alleged offence under Section138 of Negotiable Instrument Act. The Accused pleaded not guilty and claimed to be tried.
5. The Complainant himself examined as PW−1 and got marked 5 documents as Ex.P.1 to Ex.P.9 on his behalf and closed his side. The accused led his evidence as DW. 1 and marked 5 documents at Ex.D. 1 to D5.
6. After completion of evidence of complainant's side, the statement of the Accused under Section 313 of Cr.P.C. was recorded, wherein the Accused denied all the incriminating evidence appearing against him. Therefore, case was posted for arguments.
7. The trial court, after hearing the arguments and after perusing the oral and documentary evidence available on record, passed the impugned judgment by convicting the accused for the offence punishable u/Sec.138 of N.I. Act. The accused being aggrieved by the said judgment of the trial court has preferred this appeal.
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8. Grounds of appeal in nutshell as urged in the appeal memorandum are as follows:-
a) The judgment passed by the trial court is erroneous and it is not sustainable in the eye of law.
b) The appellant submits that the Trial Court failed to consider that it is just and necessary for the complainant to prove his income capacity.
c) The Trial Court has not considered the fact that in the cross-examination PW. 1 admitted obtaining mortgage loan in the year 2014-15 from Vyavasaya Seva Sahakara Bank Ltd. Which is not cleared by the complainant and he had not produced No Due Certificate for clearing said loan, which would clearly establish that even after 2018-19 the complainant not repaid agriculture loan to Vyavasaya Seva Sahakara bank ltd.
d) The Trial Court failed to consider the cross-
examination of PW. 1 which show that he had no retirement benefit or earnings and savings derived from agriculture or pension much prior to 2014-15 and subsequent to 2018-19 he obtained loan of RS. 1,00,000/- by mortgaging the property.
e) That the learned Magistrate in para 17 of the judgment reproduced 4 lines of cross-examination of the PW. 1 and wrongly come to conclusion.
f) No acknowledgment is produced to show that the demand notice was served on the appellant. The complainant has failed to prove his source of income.
5Crl.A.No.1387/2022 The Trial Court failed to appreciate the evidence on record in proper manner.
On these and other grounds as urged in the appeal memorandum, the appellant has prayed to allow the appeal and prayed to acquit him for the offence punishable u/s.138 of NI.Act.
9. After filing of the appeal, it is registered as Crl.A.No.1387/2022 and notice was issued to the respondent. After service of the notice, the respondent has appeared before the court through his counsel. Thereafter, the trial court record was called for. After securing the trial court record, the matter was posted for arguments.
10. Heard the arguments. Perused the appeal memorandum, the written arguments furnished by the appellant, trial court record and other materials on record.
11. The points that arise for consideration before this court are as under:
(1) Whether the judgment passed by the trial court is just and proper and in accordance with law?
(2) Whether the interference of this court is required in the impugned judgment of the trial court?
(3) What order?
12(a) .The findings on the above points are as under:
(1) Point No.1 .. In the Affirmative
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Crl.A.No.1387/2022
(2) Point No.2 .. In the Negative.
(3) Point No.3 .. As per final order
for the following:
REASONS
12. Point No.1 and 2 :- These two points are interrelated to each other and as such, they are taken together for discussion to avoid repetition of facts.
13. The complainant had filed private complaint before the trial court u/Sec.200 of Cr.P.C. by alleging the commission of offence u/Sec.138 of N.I. Act by the accused. Since the complainant had alleged that the accused had committed the offence punishable u/Sec.138 of N.I. Act, it is for the complainant to prove all the essential ingredients of Sec.138 of N.I. Act. Hence, it is relevant to note down the provisions of Sec.138 of N.I.Act herein, in order to know its essential ingredients.
14. Sec.138 of N.I. Act provides as follows:
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, 7 Crl.A.No.1387/2022 such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for (a term which may be extended to two years), or with fine which may extend to twice the amount of the cheque or with both. "
15. Thus from reading the aforesaid section, it is clear that the complainant has to prove the following essential ingredients for holding the accused guilty of offence under the said section.
(a) The cheque has been drawn by the accused on Bank account which is maintained by him with a particular Banker.
(b) The amount of money mentioned in the cheque is for discharging the legal liability either wholly or partially and
(c) The cheque is dishonoured or it is returned unpaid due to insufficiency of funds etc.,
(d) Issuance of notice in writing to the drawer of the cheque demanding payments of the cheque amount.
(e) Failure of the drawer to make payment within receipt of the demand notice.
16. To prove his case, the complainant examined himself as Pw:1 by reiterating and reaffirming the averments of the 8 Crl.A.No.1387/2022 complaint. In his evidence Pw:1 has deposed that regarding the loan transaction, The complainant has issued legal notice to accused and to substantiate his contention he has produced the office copy of the notice at Ex.P:3. The track consignment is marked at Ex.P.5.
17. In order to rebut the presumption available under Sections 118(a) and 139 of Negotiable Instruments Act, the accused has filed his affidavit and examined himself as DW.1. The main defence of accused is that he has not taken any amount from the complainant, he was working in Kalpataru Vidyanikethan High School as Head Master for the period from 2010-11 to 2017-18 and complainant's daughter-in-law was also working as Assistant Teacher in the said school, some occasions on trust, he has given his signed blank cheques to the complainant's daughter-in-law for maintenance of school, the daughter-in-law of complainant left the school, without returning of his signed blank cheque, she misused his signed blank cheque and filed this false case against him through the complainant herein, the legal notice sent by complainant was not served on him, he has not received the amount as alleged in complaint from the complainant at any point of time and he has not issued the alleged cheque to the complainant for discharge of legally enforceable debt, hence, he prayed for acquit him. In support of his contention, he relied upon the documents at Exs.D1 to D5. Among them, Ex.D1 is the salary details of staff of Kalpataru Vidyanikethan Higher Primary School for the month of Jan - Feb-2018. Ex.D2 is the school strength 9 Crl.A.No.1387/2022 details of students. Ex.D3 is the statement of account pertaining to accused for the period from 01.07.2017 to 01.07.2018 issued by Vijaya Bank. Ex.D4 is the Indian Income Tax Return Acknowledgment for the assessment year 2018-19 pertaining to the accused and Ex.D5 is the Aadhaar Card pertaining to the accused.Judgment
18. It is not in dispute that the cheque and signature appear thereon are belonging to accused. Further it is not in dispute that in the year 2018-19 one Rajappa and accused have opened the school under the name of Vivekananda Techno School atThimmegowdana Doddi and the same was registered. In order to rebut the presumption, the accused has taken his contention that the daughter-in-law of complainant by name Smt.Mala has misused his signed blank cheque and filed the present false case against him through complainant. In support of his contention, the advocate for accused has cross-examined the PW.1 in length, but the PW.1 has not admitted the suggestions made by the advocate for accused.
19. Mere denial of the case of complainant by the accused is not enough to acquit the accused. If really, the accused has not issued the cheque to the complainant, definitely, he would have taken legal action against the complainant and his daughter-in- law, but in this case there is no legal action taken by the accused against the complainant and his daughter-in-law. It shows that 10 Crl.A.No.1387/2022 the accused has issued the questioned cheque Ex.P1 for discharge of legally recoverable debt.
20. In order to rebut the presumption available under Sections 118(a) and 139 of Negotiable Instruments Act, the accused has filed his affidavit and examined himself as DW.1. The main defence of accused is that he has not taken any amount from the complainant, he was working in Kalpataru Vidyanikethan High School as Head Master for the period from 2010-11 to 2017-18 and complainant's daughter-in-law was also working as Assistant Teacher in the said school, some occasions on trust, he has given his signed blank cheques to the complainant's daughter-in-law for maintenance of school, the daughter-in-law of complainant left the school, without returning of his signed blank cheque, she misused his signed blank cheque and filed this false case against him through the complainant herein, the legal notice sent by complainant was not served on him, he has not received the amount as alleged in complaint from the complainant at any point of time and he has not issued the alleged cheque to the complainant for discharge of legally enforceable debt, hence, he prayed for acquit him. In support of his contention, he relied upon the documents at Exs.D1 to D5. Among them, Ex.D1 is the salary details of staff of Kalpataru Vidyanikethan Higher Primary School for the month of Jan - Feb-2018. Ex.D2 is the school strength details of students. Ex.D3 is the statement of account pertaining to accused for the period from 01.07.2017 to 01.07.2018 issued by Vijaya Bank.Ex.D4 is the Indian Income Tax Return 11 Crl.A.No.1387/2022 Acknowledgment for the assessment year 2018-19 pertaining to the accused and Ex.D5 is the Aadhaar Card pertaining to the accused.
21. It is not in dispute that the cheque and signature appear thereon are belonging to accused. Further it is not in dispute that in the year 2018-19 one Rajappa and accused have opened the school under the name of Vivekananda Techno School at Thimmegowdana Doddi and the same was registered. Inorder to rebut the presumption, the accused has taken his contention thatthe daughter-in-law of complainant by name Smt.Mala has misused his signed blank cheque and filed the present false caseagainst him through complainant. In support of his contention, the advocate for accused has cross-examined the PW.1 in length, but the PW.1 has not admitted the suggestions made by the advocate for accused.
22.. Mere denial of the case of complainant by the accused isnot enough to acquit the accused. If really, the accused has not issued the cheque to the complainant, definitely, he would have taken legal action against the complainant and his daughter-in- law, but in this case there is no legal action taken by the accused against the complainant and his daughter-in-law. It shows that the accused has issued the questioned cheque Ex.P1 for discharge of legally recoverable debt.
12Crl.A.No.1387/2022
23. Further, once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. In the present case on hand, the accused herein has admitted the signature on the questioned cheque at Ex.P1(a). Therefore, the obligation shifts upon him to discharge the presumption imposed upon him. In the case on hand, I do not find any material to create doubt regarding the genuineness of Ex.P1- cheque. There is no cogent and convincing materials on behalf of accused to believe his version that he has not issued the Ex.P1- cheque in favour of complainant for discharge of legally recoverable debt. The complainant by producing oral and documentary evidence has proved his case beyond all reasonable doubt.
24. Admittedly, in the present case, the accused has not given reply notice to the statutory notice of complainant. In view of the above decision, the inference has to be drawn against the accused that there was merit in the complainant's version.
25. Further the accused has taken contention that the legal notice sent by complainant was not served to him. The complainant has stated that the demand notice sent by him to the correct address of accused through Speed Post was duly served upon accused. In support of his contention, the complainant has produced Ex.P5Track Consignment issued by postal authority. On 13 Crl.A.No.1387/2022 carefully perusal of the Ex.P5, it appears that the Event Details of Consignment Number RK062358787IN item was delivered on 26.03.2019 to the school address of accused.
26. During the course of cross-examination, the DW.1 has deposed that:
In the year 2018-19 he and Rajappa have got registered Vivakananda Techno School at Thimmegowda Doddi and he denied that he is working at Head Master and he deposed that he is working as Secretary in the school.
27. This admission itself made clear that the accused and one Rajappa have opened the Vivekananda Techno School at Thimmegowdana Doddi and it was registered. Further from the above testimony of DW.1, it shows the accused was Secretary in the said institution. On carefully perusal of admitted address and the address mentioned in the cause title of complaint and legal notice - Ex.P3, it appears that these all addresses are one and the same. In order to disprove the service of demand notice, the accused did not try to adduce the evidence of concerned post master, who got issued Ex.P5. It appears that the complainant has sent the demand notice to the correct address of accused and the same got served on him. Therefore, the accused cannot say that the legal notice was not served on him and he does not aware about the notice sent by the complainant.
14Crl.A.No.1387/2022
28. On going through the said dictum, it is also made clear that if the notice was sent with correct address of the accused, it is suffice to draw the inference that the notice was duly served on the accused. If the accused failed to accept the notice and failed to claim the notice sent to him under register post, there is deemed service of notice upon him. In the present case on hand, it appears that the address mentioned in the cause title of complaint and legal notice are one and the same. From which, it made clear that the legal notice as required under Section 138(b) of Negotiable Instruments Act was served upon accused and complainant has complied the Section 138(b) of Negotiable Instruments Act.
29. Mere taking bald defence is not enough to suspect the genuineness of claim of the complainant. There is no cogent and convincing materials on behalf of accused to believe his version. Thereby, the complainant proved his contention, but accused without any base took bald and baseless contention. Thus the accused has failed to rebut the presumption available under Section 118(a) and 139 of Negotiable Instruments Act in favour of complainant.
30. The Hon'ble Supreme Court of India in the case of MMTC Ltd. v. Medchl Chemicals and Pharma (P) Ltd., reported in (2002) 1 SCC 234 held that "A complaint under Section 138 can be made not only when the cheque is dishonoured for reason of funds being insufficient to honour the cheque or if the amount of the cheque exceeds the amount in the account, but also where the drawer of 15 Crl.A.No.1387/2022 the cheque instructs its bank to "stop payment". If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque and that the stop-payment notice had been issued because of other valid causes, then offence under Section 138 would not be made out". The Hon'ble Supreme Court of India in the decision of D.Vinod Shivappa Vs. Nanda Belliappa reported in (2006) 6 SCC 456 held with respect to the object of Sec. 138 of the Act at para 13 as follows;
"13. Sec. 138 of the Act was enacted to punish those unscrupulous persons who purported to discharge their liability by issuing cheques without really intending to do so, which was demonstrated by the fact that there was no sufficient balance in the account to discharge the liability. Apart from civil liability, a criminal liability was imposed on such unscrupulous drawers of cheques. The prosecution, however, was made subject to certain conditions. With a view to avoid unnecessary prosecution of an honest drawer of a cheque, or to give an opportunity to the drawer to make amends, the proviso to Sec. 138 provides that after dishonour of the cheque, the payee or the holder of the cheque in due course must give a written notice to the drawer to make good the payment. The drawer is given 15 days time from date of receipt of notice to make the payment, and only if he fails to make the payment he may be prosecuted. The object which the proviso seeks to achieve is quite obvious. It may be that on account of mistake of the bank, a cheque may be returned despite the fact that there is sufficient balance in the account from which the 16 Crl.A.No.1387/2022 amount is to be paid. In such a case if the drawer of the cheque is prosecuted without notice, it would result in great in-justice and hardship to an honest drawer. One can also conceive of cases where a well intentioned drawer may have inadvertently missed to make necessary arrangements for reasons beyond his control, even though he genuinely intended to honour the cheque drawn by him. The law treats such lapses induced by inadvertence or negligence to be pardonable, provided the drawer after notice makes amends and pays the amount within the prescribed period. It is for this reason that Clause (c) of proviso to Sec. 138 provides that the section shall not apply unless the drawer of the cheque fails to make the payment within 15 days of the receipt of the said notice. To repeat, the proviso is meant to protect honest drawers whose cheques may have been dishonoured for the fault of others, or who may have genuinely wanted to fulfill their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. The proviso is not meant to protect unscrupulous drawers who never intended to honour the cheques issued by them, it being a part of their modus operandi to cheat unsuspecting persons."
31. On perusal of the above decisions, they show that whatever be the reason for dishonour of the cheque, it has to be co-related to the insufficiency of funds in the account or to the lack of arrangement made by the drawer with his bank under an agreement. In the case on hand no efforts are made to show that the accused had sufficient funds in the account as on the date of 17 Crl.A.No.1387/2022 presentation of cheque by filing the bank account statement of accused . The accused have withheld the bank statement. Therefore adverse inference can be drawn that the accused has no sufficient funds in the account as on the date of presentation of cheque. Therefore the endorsement "insufficient funds" also attracts the offence punishable U/s.138 of N.I.Act. The accused can not escape from his liability when he has failed to discharge his burden to show by leading evidence that he had sufficient balance as on the date of dishonour of the cheque. Therefore the defence of the accused is not tenable.
32. On perusal of the oral and documentary evidence placed by the complainant, it reveals that the complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with regard to taking cognizance of the offence punishable under Section 138 of N I Act.
33. In the present nature of cases, the court has to determine whether version of complainant is true or the theory put-forth by the accused is true?
34. At the outset, an essential ingredient of Section 138 of N.I Act is that the cheque in question must have been issued towards legally enforceable debt. Under Section 118 of the Act, a presumption shall be raised regarding consideration, date, transfer, endorsement and regarding holder in the case of 18 Crl.A.No.1387/2022 negotiable instruments. Even under Section 139 of the Act, a rebuttable presumption shall be raised that, the cheque in question was issued regarding discharge of legally enforceable debt. These presumptions are mandatory provisions that are required to be raised in case of negotiable instruments.
35. The accused has completely denied the loan transaction and financial transaction with the complainant. However, to substantiate his defence he has not placed cogent and corroborative evidence before the court. Admittedly, counsel for the accused has cross-examined the Pw:1, however, nothing worthwhile is elicited from his mouth to disbelieve the evidence of the complainant.
36. The accused has issued above cheque to complainant, it indicates that the accused has failed to rebut the presumption, which is in favour of complainant. As appreciated and discussed supra, the complainant has proved by placing convincing evidence to show that accused is due of payment of cheque amount and to repay the liability he had issued Ex.P.4- cheque.
37. In the recent decision of Hon'ble Supreme Court of India reported in (2021) 5 Supreme Court cases 283 : 2021 Online SC 75 (Kalamani Tex and another V/s P.Balasubramanian, rendered by Hon'ble three judges bench which is relied upon by the learned counsel for the complainant, the Hon'ble Supreme Court of India has discussed about the provisions of Sec.139 and 118 of N.I.Act.
19Crl.A.No.1387/2022 In the said judgment, the Hon'ble Supreme Court of India has held in Para No.13 while discussing the provisions of Sec.118 and 139 of N.I.Act, that the statute mandates that once the signature of an accused on the cheque is established, then these "reverse onus"
clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him.
38. There are sufficient material on record to prove the case of the complainant. The trial court by considering the documentary and oral evidence adduced on behalf of the complainant has rightly and judiciously come to the conclusion that the accused has committed the offence punishable u/s 138 of NI Act. The reasons assigned by the trial court to arrive such conclusion is also proper and judicious. The trial court has rightly applied the presumption u/s 118 and sec.139 of NI Act to the facts and circumstances of the case. The trial court has rightly convicted the accused for the offence punishable u/s 138 of NI Act. As such, this court do not find any merits in any of the grounds urged in the memorandum of appeal and on the said grounds, the impugned judgment of conviction and sentence cannot be set-aside. The impugned judgment of conviction passed by the trial court is deserves to be confirmed.
39. In view of the aforesaid principles discussed in aforesaid authorities and in view of the reasons assigned by the trial court and in view of the aforesaid reasons, this court feels that the 20 Crl.A.No.1387/2022 judgment passed by the trial court is just and proper which need not requires the interference of this court. As such, this court is of the opinion that the impugned judgment of the trial court is deserves to be confirmed and appeal filed by the appellant is deserves to be dismissed. Accordingly , this court answers Point No.1 in the Affirmative and Point No.2 in the Negative.
40. Point No.4:- In view of the findings on point No.1, 2 and 3, this court proceeds to pass the following:
ORDER The Appeal filed by the appellant u/s.374(3) of Cr.P.C., is hereby dismissed.
The judgment of conviction and sentence dated 17.10.2022 passed by XXIII ACMM in CC No.11617/2019 is hereby confirmed.
Send back the Trial court records along with copy of this judgment.
(Dictated to the Sr. Shr/SG I on Computer, script thereof is corrected, signed and then pronounced by me in the open court on this the 23rd day of October, 2024.) Digitally signed by GANGAPPA I GANGAPPA I PATIL PATIL Date: 2024.11.08 10:57:28 +0530 (GANGAPPA IRAPPA PATIL ) LII Addl. City Civil & Sessions Judge, Bengaluru.
21 Crl.A.No.1387/2022 22 Crl.A.No.1387/2022 Judgment pronounced in the open court (vide separate Judgment ) ORDER The Appeal filed by the appellant u/s.374(3) of Cr.P.C., is hereby dismissed.
The judgment of conviction and sentence dated 17.10.2022 passed by XXIII ACMM in CC No.11617/2019 is hereby confirmed.
Send back the Trial court records along with copy of this judgment.
LII Addl. City Civil & Sessions Judge, Bengaluru 23 Crl.A.No.1387/2022