Bangalore District Court
Sri.Bhaskar.G vs Sri.Umesh on 15 September, 2016
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 15th day of September 2016
Present: Smt. Saraswathi.K.N, B.A.L., LL.M.,
XVI Addl.C.M.M., Bengaluru City.
JUDGEMENT U/S 355 OF Cr.P.C.,
Case No. : C.C. No.24913/2015
Complainant : Sri.Bhaskar.G,
S/o.Sri.B.S.Guddaiah,
Aged about 36 years,
R/at No.3, 8th Cross,
J.S.Nagar,
Nandi Layout,
Bengaluru-96.
(Rep. by Sri.M.S.Manjunath.,
Adv.,)
- VS -
Accused : Sri.Umesh,
S/o.Muniswamy,
Aged about 45 years,
R/at.No.1594/A,
30th Main, 26th Cross,
B.S.K. 3rd Stage,
Bengaluru-70.
(Rep. by Sri.U.J.Hariprasad.,
Adv.,)
2 C.C. No.24913/2015 J
Case instituted : 20.7.2015
Offence complained : U/s 138 of N.I. Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is acquitted
Date of order : 15.9.2016
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, the Accused and he are known to each other since many years. The Accused is a civil contractor and he was seeking financial assistance from him for his business and financial necessities. He was able to arrange funds from his own sources, his friends and relatives for the urgent necessities of the Accused and pay the same to the Accused on many occasions for the past two years. In terms of the payments made by him, the Accused has taken a total of Rs.30,00,000/=, by agreeing to repay the same with interest within a few months period. Accordingly the Accused has issued a cheque in his 3 C.C. No.24913/2015 J favour for Rs.30,00,000/= vide cheque bearing No.293608 dated 1.6.2015, drawn on the Canara Bank, Padmanabhanagar, Bengaluru, in his favour towards his liability.
3. It is submitted that, when the said cheque was presented for collection, to his utter shock, it returned with an endorsement "Funds Insufficient" on 9.6.2015. Thereafter he got issued legal notice to the Accused on 15.6.2015. The notice sent by RPAD returned as "Unclaimed and Intimation delivered" to the Accused on 2.7.2015. But even after the service of the legal notice, the Accused has failed to comply with the demand made in the notice.
4. The Complainant submits that, the dishonour of the cheque has been malafide, intentional and deliberate. Feeling aggrieved by the conduct of the Accused, he has filed the present complaint praying that the Accused be summoned, tried and punished in accordance with Sec.138 of Negotiable Instruments Act.
5. The pre-summoning evidence has been led by the Complainant on 17.10.2015. Prima-facie case has been 4 C.C. No.24913/2015 J made out against the Accused and he has been summoned vide the order of the same date.
6. The Accused has appeared before the Court on 2.1.2016, the substance of the accusation has been read over to him, he has pleaded not guilty and claimed the trial.
7. In his post-summoning evidence, the Complainant has examined himself as PW1 and has filed his affidavit, wherein he has reiterated the averments made in the complaint.
P.W.1 has also relied upon the following documentary evidence:-
Ex.P1 is the disputed cheque, in which, the signature is identified by P.W.1 as that of the Accused as per Ex.P1(a), the Bank memo as per Ex.P2, the office copy of the legal notice as per Ex.P3, the postal receipt as per Ex.P4, the reply notice as per Ex.P5, the postal cover as per Ex.P6, the receipt as per Ex.P7 and the postal acknowledgement as per Ex.P8.
8. The statement of the Accused under Sec.313 of Cr.P.C., has been recorded on 19.7.2016.
5 C.C. No.24913/2015 J9. The Accused has chosen to not to lead any defence evidence.
10. Heard the arguments of the counsel for the Complainant and the learned defence counsel.
11. The learned counsel for the Complainant has prayed for the conviction of the Accused on the ground that, the signature on the cheque in question and the receipt of the legal notice has been admitted by the Accused. The Accused has not brought on record any cogent evidence to prove that, the cheque in question had been issued by him for the purpose of income tax. He has further argued that, the presumption under Sec.118 r/w.Sec.138 of the N.I. Act is in favour of the Complainant and thus the Accused be convicted for the offence punishable under Sec.138 of the N.I. Act.
12. On the other hand, the learned counsel for the Accused has prayed for the acquittal of the Accused on the ground that, the Accused had never taken any loan from the Complainant and that the Complainant has failed to prove his financial capacity before the Court and the Complainant has also failed to prove the date of the 6 C.C. No.24913/2015 J alleged lending of loan. It is further argued that, the cheque in question had been issued by him in favour of the Complainant for the purpose of income tax as a blank cheque in the year 2010-11 and that the same has been misused by the Complainant and that, except the said transaction, there has not been any other financial transaction between the Complainant and the Accused. Therefore the offence under Sec.138 of the N.I. Act would not be attracted. Accordingly prayed for the acquittal of the Accused.
13. I have considered the submissions and perused the record carefully.
14. Sec.138 of the Negotiable Instruments Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence under Section 138 Negotiable Instruments Act are:-
(i) Drawing up of a cheque by the Accused towards payment of an amount of money, for the discharge, in whole or in part, of any debt or any other liability;
(ii) Return of the cheque by the bank as unpaid;7 C.C. No.24913/2015 J
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of the notice under proviso (b) to Section 138.
The Explanation appended to the Section provides that, the "debt or other liability" for the purpose of this Section means a legally enforceable debt or other liability.
15. Apart from this, Sec.139 of the Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms"-
"It shall be presumed, unless the contrary is proved, that:-
The holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, of any debt or other liability".
16. Also, Sec. 118 of the Negotiable Instruments Act states, "Until the contrary is proved, the following presumptions shall be made:-
(a) that every Negotiable Instrument was made or drawn for consideration and that every such instrument, 8 C.C. No.24913/2015 J when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
17. Thus, the Act clearly lays down presumptions in favour of the Complainant with regard to the issuance of the cheque by the Accused towards the discharge of his liability in favour of the Complainant.
18. Under the scheme of the Act, the onus is upon the Accused to rebut the presumptions in favour of the Complainant by raising a probable defence.
19. Such being the legal position, it would be pertinent to refer to the defences raised by the Accused to rebut the presumptions in favour of the Complainant in this case.
20. It is pertinent to note that, the first and the most important defence taken by the Accused is with regard to the financial capacity of the Complainant, so as to allegedly lend a sum of Rs.30,00,000/= to him. In this regard during his cross-examination, the Complainant has deposed that, he is working in a private Company since May 2011, with an annual income of Rs.17.46 9 C.C. No.24913/2015 J Lakhs and that he is an Income Tax Assessee and as he has his salary income, he is not maintaining his books of accounts.
21. It is also deposed by P.W.1 that, the Accused is known to him since the year 2000 and at the time of his contact with the Accused, the latter was doing civil contract work and he does not know about the annual income of the Accused. With regard to the alleged loan transaction, it is deposed by PW1 that, the Accused had sought financial assistance from him about 2 to 3 years back, but he does not remember the date and the month of such alleged seeking of loan by the Accused from him. According to him, at the first instance the Accused had sought a loan of Rs.10,00,000/= from him and at that time, he lent Rs.5,00,000/= to him, which was his savings amount and which had been kept by him in his house. He has also deposed that, at the time of his alleged lending of Rs.5,00,000/=, he has not collected any document from the Accused towards security. Similarly with regard to his alleged further lending, according to him, few days after his alleged lending of the amount for the first time he lent Rs.2,00,000/= and even with regard to the said amount of Rs.2,00,000/=, he 10 C.C. No.24913/2015 J cannot say the date, month and the year, on which, he has allegedly lent the said amount of Rs.2,00,000/=. Similarly it is also elicited from PW1 that, it is not possible for him to say the exact dates on which and the amounts which he has allegedly lent to the Accused. However with regard to his source of arranging the said amount, for the first time, it is deposed by PW1 in his cross-examination that, he had availed Rs.5,00,000/= about 2 to 3 years back from his brother Lohith, Rs.5,00,000/= from his friend Vinod, who is a Chartered accountant, Rs.4,00,000/= from his father-in-law and according to him, he has not availed any of these amounts for interest and that he has not issued either the cheques or the pronotes or any other documents to the aforesaid persons. In this regard the explanation given by PW1 is that, as the said persons had lent the said amounts to him for a period of only one month, they had not asked for any document from him. According to him, he has repaid Rs.2,00,000/= to his friend Vinod in the month of August 2013 and he has not yet returned the balance amount, but he has not maintained any accounts with regard to the such alleged receipts of the amounts by him from his friends and relatives. Though 11 C.C. No.24913/2015 J according to him, he had entered the same a rough book, the said rough book has been lost, while white-washing his house. Similarly it is also deposed by PW1 that, he has not collected any document from the Accused at the time of his alleged lending of the amounts to the Accused on various occasions. Further with regard to the proof of his income, though PW1 has stated that, he could produce his IT returns for the years 2012-13 & 2013-14, he has not made any attempt to produce the same before the court.
22. It could be observed that, during his further cross-examination, PW1 has pleaded ignorance to the suggestions that the cheque at Ex.P1 relates to the year 2010-11 and that there is difference in the hand writing between the signature at Ex.P1(a) and the contents of the cheque and that the hand writing in respect of the contents of the cheque is not that of the Accused.
23. Thus by going through the evidence of the Complainant, it is clear that, though the Complainant claims to have lent a total sum of Rs.30,00,000/= by way of part payments to the Accused on various occasions, there is no iota of evidence made available by him, so as 12 C.C. No.24913/2015 J to prove that, he had the financial capacity to do the same. Even though, according to the Complainant he had arranged the said amounts by collecting the same from his friends and his relatives, he has failed to examine any of them. Moreover the amount involved in the case is not a small amount and when the Complainant himself admits that, the Accused is neither his relative nor belongs to his community, a serious doubt arises in the mind of the Court as to how the Complainant could have advanced such amount of money that too without collecting any document from the Accused towards security and without even knowing about the financial capacity of the Accused to repay the same. Similarly, when according to the Complainant himself, he does not know about the annual income of the Accused, this is also one of the suspicious circumstances to believe the case of the Complainant.
24. The next defence raised by the Accused is that, one Renuka Prasad and the Complainant by colluding with each other had collected a blank cheque from him in the year 2010-11 in the pretest of helping him for the purpose of income tax and thereafter the same has been misused by them.
13 C.C. No.24913/2015 J25. Though in this regard no steps has been taken by the Accused to take back his cheque, it is not so serious, in view of the fact that, before drawing the presumption in favour of the Complainant under Sec.139 of the N.I.Act, the burden is upon the Complainant to prove beyond reasonable doubt before the Court that, he has lent the amount to the Accused, towards the discharge of which, the cheque in question came to be issued by the Accused in his favour. Therefore the initial burden of proving the existence of the legally enforceable debt is upon the Complainant. But inspite of the fact that the cheque amount involved in the present case is a huge amount of Rs.30,00,000/=, the Complainant has utterly failed to discharge the initial burden cast upon him. In such circumstance, an adverse inference is liable to be drawn against him.
26. In support of this finding, this Court places reliance upon the following decisions:-
1. In Smt.H.R.nagarathna Vs., Smt.Jayashree Prasad, reported in 2009(4)Kar.L.J.26, wherein it has been held that:-14 C.C. No.24913/2015 J
"From the complaint averments it is clear that the complainant failed to prove lending the existence of legally enforceable debt not proved beyond reasonable doubt".
2. In Rajendra Pangam Vs., Paresh B.NaiK and others, reported in Laws (BOM) 2015 (4)
39., in the said case there was no evidence forthcoming so as to prove the alleged lending of the amount by the complainant therein and there was also no evidence to show that the complainant was having sufficient amount so as to support the loan of Rs.75,000/- somewhere in June 2008. In such circumstance the Hon'ble High Court of Bombay has allowed the appeal and restored the judgment of acquittal.
3. In S.Thimmappa Vs., L.S.Prakash, reported in 2010(5) KCCR 3397, wherein it has been held that:-
"It is the drawee of the cheque to prove the existence of debt or liability".15 C.C. No.24913/2015 J
4. In Krishna Janardhan Bhat Vs., Dattatreya G.Hegde, reported in 2008 AIR SCW 738, wherein it has been held that:-
"The existence of the legally recoverable debt is not a matter of presumption U/s.139".
5. In Rangappa Vs., Mohan, reported in (2011) 1 SCC 184, wherein it has been held that:-
"Even in the present case the standard of proof for raising the presumption U/s.139 of the N.I. Act by the accused is that of "Preponderance of Probabilities"
and therefore if the accused is able to raise an probable defence, which creates doubts about the existence of a legally enforceable debt or liability, the presumption can fail".
6. In S.K.Mittal Vs., Saree Mahal Reg, reported in 2012 (2) DCR 384, wherein it has been held that:
"The standard of proof to discharge the burden shifted on the accused to rebut the presumption raised by the court U/s.139 of the N.I. Act is not the same as upon prosecution to prove the case".16 C.C. No.24913/2015 J
7. In Veerayya Vs., G.K.Madivalar, reported in 2012(3) KCCR 2057, wherein it has been held that:-
"When the complainant failed to prove that he had bank balance as claimed by him on the date he has alleged to have advanced the loan and his civil suit was dismissed as not proved and mere issuance of cheque is not sufficient, unless it is shown that the said cheque was issued towards the discharge of a legally recoverable debt and when the complainant's financial capacity is questioned, he has to establish his financial capacity".
8. In Ramdas Vs., Krishnanand, reported in 2014(3) Crimes 291, where in it has been held that:-
"When the complainant's financial capacity is denied and disputed, it becomes a relevant factor".
9. In John K.Abraham Vs., Simon.C, reported in AIR 2014 SCW 2158, wherein it has been held that:-
" In the facts of the said case that, when the complainant is not sure as to who wrote cheque nor aware as to when and where the existing transaction took place, for which the cheque was issued by the accused, it amounts to defects in 17 C.C. No.24913/2015 J the evidence of the complainant and raises a serious doubt in the case of the complainant".
10. In Shiva Murthy Vs., Amruthraj, reported in ILR 2008 KAR 4629, wherein it has been held that:-
" Before considering the conduct of the accused to find out as to whether or not he has been able to rebut the statutory presumption available U/s.139, the court ought to consider the existence of the legally enforceable debt. It is only after satisfying that the complainant has proved the existence of the legally enforceable debt or liability, the courts could have proceeded to draw presumption u/s.139 of the N.I.Act and thereafter find out as to whether or not the accused has rebutted has rebutted the said presumption".
27. Thus by placing reliance upon the principles of law enunciated in the afore-cited decisions, it is clear that, even in the present case, the Complainant has failed to prove his case beyond reasonable doubt and on the contrary, the Accused has successfully rebutted the presumption available in favour of the Complainant. Therefore I proceed to pass the following: -
18 C.C. No.24913/2015 JORDER By exercising the power conferred u/s 265 of Cr.P.C., the Accused is hereby acquitted of the offence punishable u/s 138 of the Negotiable Instruments Act.
His bail bond and surety bond stands cancelled.
(Dictated to the stenographer, transcript thereof is computerized and printout taken by her, verified, and then pronounced by me in the open Court on this the 15th day of September 2016).
(SARASWATHI.K.N), XVI Addl.CMM., Bengaluru City.
ANNEXURE
1. List of witnesses examined on behalf of the Complainant:
PW.1 : Bhaskar.G
2. List of documents exhibited on behalf of the Complainant:
Ex.P-1 : Original Cheque;
Ex.P-1(a) : Signature of the Accused;
Ex.P-2 : Bank memo;
Ex.P-3 : Copy of the Legal Notice;
Ex.P-4 : Postal receipts;
Ex.P-5 : Reply notice;
Ex.P-6 : Postal cover;
19 C.C. No.24913/2015 J
Ex.P-7 : Postal receipt;
Ex.P-8 : Postal acknowledgment.
3. List of witnesses examined on behalf of the Accused:
- Nil -
4. List of documents exhibited on behalf of the Accused:
- Nil -
(SARASWATHI.K.N), XVI ACMM, Bengaluru City.20 C.C. No.24913/2015 J
15.9.2016 Judgment pronounced in the open court vide separate order.
ORDER By exercising the power conferred u/s 265 of Cr.P.C., the Accused is hereby acquitted of the offence punishable u/s 138 of Negotiable Instruments Act.
His bail bond and surety bond stands cancelled.
(SARASWATHI.K.N), XVI Addl.,Chief Metropolitan Magistrate, Bengaluru City.