Bangalore District Court
Sri. Ravi.R vs Sri. Lingaraju on 20 March, 2020
1 C.C.No.29191/2017 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated:- This the 20th day of March 2020
i.
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.29191/2017
Complainant : Sri. Ravi.R,
Aged about 46 years,
S/o. Ramaiah,
Residing at No.8,
Shanimahatma Temple Road,
Opp Bus Stop, Vasanthapura,
Bengaluru South,
Subramanyapura,
Bengaluru - 560 061.
(Rep.by Sri. K.M.Mallesh., .Adv.,)
- Vs -
Accused : Sri. Lingaraju,
S/o. Late Doddegowda,
Aged about 42 years,
Residing at No.118,
5th Cross, Vitala Nagar,
Vasantha Nagara,
Bengaluru.
(Rep. by Sri. Kemparaju., Adv.,)
Case instituted : 5.12.2017
2 C.C.No.29191/2017 J
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 20.3.2020
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, Accused is known to him since several years and he is running a cement shop and having his acquaintance, the Accused approached him in the first week of August 2016 and requested for hand loan of Rs.2,50,000/- for his domestic needs by assuring to repay the said amount within one year, considering the request of the Accused he paid an amount of Rs.2,50,000/- by way of cash out of his savings and arranged from his friends but even after expiry of the said date Accused did not repay the amount borrowed by him and he demanded the Accused to repay the amount at that time has issued 3 C.C.No.29191/2017 J a cheque bearing No. 151332 dated: 12.10.2017 drawn on IDBI Bank, J.P.Nagar branch, Bengaluru for sum of Rs.2,50,000/- in his favour by promising to honour the said cheque on its presentation, as per the instructions of the Accused, he has presented the said cheque for encashment through his banker i.e Karur Vysya Bank, Isro layout branch, Bengaluru but the said cheque returned as "Signature Differs"
on 24.10.2017, immediately he informed the Accused about dishonour of the cheque and demanded to pay the amount but the Accused postponing the same on one pretext or other, thereafter he got issued legal notice dated; 7.11.2017 to the Accused by RPAD and it was duly served on him on 11.11.2017, inspite of it, the Accused did not repay the cheque amount but caused untenable reply dated: 24.11.2017. Hence he has filed the present complaint praying that the Accused be summoned, tried and punished in accordance with Sec.138 of the Negotiable Instruments Act.
3. The Complainant has led his Pre-
summoning evidence and he has filed affidavit in lieu of sworn statement and he has produced the 4 C.C.No.29191/2017 J documents as per Ex.P.1 to P.6 i.e. Ex.P.1 is the original cheque dated: 12.10.2017 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.P.2, the office copy of the Legal Notice as per Ex.P.3, postal Receipt as per Ex.P.4, the Postal acknowledgment as per Ex.P.5 and Reply notice as per Ex.P.6.
4. Prima facie case has been made against the Accused and summons was issued against his in turn the Accused has appeared before the Court and he has been enlarged on bail and the substance of the accusation has been read over to him, to which he has pleaded not guilty and has claimed the trial.
5. As per the direction 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, the case came to be posted for the cross-examination of complainant and the Accused cross examined the complainant and complainant closed his side.
5 C.C.No.29191/2017 J6. Thereafter the statement of the Accused as required U/s.313 of Cr.P.C. has been recorded, the Accused has denied the incriminating evidence appearing against him and chosen to lead his rebuttal evidence, subsequently he did not led his evidence and during the course of cross-examination of the complainant has produced one document i.e. small dairy marked as per Ex.D.1 and signatures of the complainant marked as Ex.D.1(a) and D.1(b).
7. Heard the arguments by both sides and perused the written arguments and decisions relied upon by the learned counsel for the complainant and perused the materials on record.
8. 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 cheque bearing No. 151332 dated: 12.10.2017 drawn on IDBI Bank, J.P.nagar branch, Bengaluru for sum of Rs.2,50,000/-6 C.C.No.29191/2017 J
to discharge legally recoverable debt to the complainant and when the complainant has presented a cheque for encashment through his banker but the said cheque has been dishonoured for the reasons "Signature Differs " on 24.10.2017 and the complainant issued legal notice to the accused on 7.11.2017 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
9. The above points are answered as under:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
REASONS
10. 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 7 C.C.No.29191/2017 J 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 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 pre-supposes 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 8 C.C.No.29191/2017 J 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.
11. It is also one of the essential ingredients of 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.
12. In the present case the complainant got 9 C.C.No.29191/2017 J examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified regarding lending of loan amount of Rs.2,50,000/- to the Accused in the first week of August 2016 for his domestic needs and in turn the Accused assured him to repay the said amount within one year but later the Accused did not repay the said amount as agreed by him, thereafter he approached him and requested to repay the loan amount at that time the Accused issued the cheque in question i.e. Ex.P.1 for sum of Rs.2,50,000/- in his favour towards discharge of the said amount , thereafter he has presented the said cheque through his banker but it was returned with an endorsement of "Signature Differs" on 24.10.2017 thereafter he intimated the Accused and requested to pay the amount covered under the cheque but the Accused postponing the same on one pretext or the other and thereafter he got issued legal notice dated: 7.11.2017 to the Accused by RPAD and it was served on him on 11.11.2017 inspite of it Accused did not repay the amount covered under the dishonoured cheque but has caused untenable reply.
10 C.C.No.29191/2017 J13. In support of his oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to P.6 i.e., Ex.P.1 is the original cheque dated:
12.10.2017 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.P.2, the office copy of the Legal Notice as per Ex.P.3, postal Receipt as per Ex.P.4, the Postal acknowledgment as per Ex.P.5 and Reply notice as per Ex.P.6.
14. 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 cheque in question belongs to his account and signature found at Ex.P.1(a) is also that of his signature. The Accused has also not disputed that the cheque in dispute presented for encashment and dishonoured for the reason of "Signature Differs"
vide bank endorsement dated:24.10.2017 .2018 and as a matter of record and has been proved by Ex.P.2 issued by the concerned bank dated: 24.10.2017. Though the banker had given endorsement that, "signature Differs" in respect of the cheque in question but the Accused in his defence has 11 C.C.No.29191/2017 J admitted that, the signature found at Ex.P.1(a) is that of his signature, in such circumstances it can be held that the Accused has not disputed the signature though the banker has issued endorsement as "Signature Differs". Therefore the complainant has proved that, the cheque in question i.e Ex.P.1 bears signatures of the Accused and it was presented within its validity period and dishonoured as per bank endorsement issued by the banker of the Accused and the cheque in question belonging to the Accused account and signature of the Accused is at Ex.P.1(a). The Accused has also not disputed the receipt of legal notice i.e. Ex.P.3 issued by the complainant as per Ex.P.5 postal acknowledgement, hence the complainant has also proved that, after receipt of the bank memo i.e dishonour of the cheque issued by the Accused, has issued legal notice in writing as per Ex.P.3 within 30 days from the date of receipt of bank memo, hence the complainant has complied mandatory requirements as required U/s.138 of Negotiable Instruments Act.12 C.C.No.29191/2017 J
15. It is the specific defence of the Accused that, the complainant had no source of income to lend alleged loan amount of Rs.2,50,000/= to him and the Accused has not borrowed loan amount in question from the complainant and has not issued the cheque in question i.e Ex.P.1 to the complainant towards discharge of loan amount in question. It is also the defence of the Accused that, the complainant conducting chit transaction and he is a a subscriber of chit transaction and has bid the chit amount in the month of April year 2017 at that time the complainant had given chit amount of Rs.36,000/- to him, at the time of giving the chit amount had collected his blank signed cheque as a security of the chit transaction and though he has paid entire chit amount and chit was closed in the month of December 2017 but the said cheque has been misused by the complainant without returning the same to him, hence in this back ground now it is to be examine oral and documentary evidence adduced by the complainant and Accused.
16. The learned counsel for the Accused cross- examined the complainant in length but nothing has 13 C.C.No.29191/2017 J been elicited to discredit or discard his evidence, instead of eliciting anything materials from the complainant the Accused rather concentrated his defence that, there was no financial transaction between him and the complainant, and Accused has not produced the documents to show his financial capacity and has not collected the documents to show that, he has lend the loan amount in question to the Accused, but the suggestions made by the learned counsel for the Accused in respect of the above defence, the complainant/PW.1 has categorically denied the said suggestions. The complainant/PW.1 in his cross-examination has specifically stated that, he has lent the loan amount to the Accused in the first week of 8th month in the year 2016 and except the said loan transaction has no any other financial transaction with the Accused and Accused assured him to repay the loan amount after one year from the date of borrowing. The complainant/PW.1 has also stated about the possessing of amount of Rs.2,50,000/- and advancing the said amount to the Accused at para No.4 in page No.3 of his cross-examination i.e. how the complainant has arranged the amount and paid 14 C.C.No.29191/2017 J the same to the Accused. It is true that, the complainant/PW.1 admitted that, he has not collected the document from the Accused regarding repayment of the loan amount advanced to the Accused and also has not produced the document to show that, he was having an amount of Rs.2,50,000/- to lend the same to the Accused. It is denied by the complainant/PW.1 to the suggestions made to him that, he has lent an amount of Rs.36,000/- to the Accused in the month of April 2017 towards the chit bid amount at the time he has collected a blank signed cheque from the Accused and even the chit bid amount has been repaid by the Accused but he did not return the blank signed cheque of the Accused and same has been misused by him by filing this complaint. Therefore the perusal of entire cross-examination of the PW.1 nothing has been elicited to disbelieve the claim of the complainant and accept the defence of the Accused that, the cheque in question was not issued to the complainant, in such circumstances, unless and until the Accused has rebutted the presumption available to the complainant U/s.118 and 139 of N.I. Act., the discrepancies elicited in the 15 C.C.No.29191/2017 J cross-examination of complainant by the Accused cannot be taken into consideration to disbelieve the claim of the complainant.
17. It is important to note here that, on careful perusal of the entire oral and documentary evidence produced by the complainant i.e Ex.P.1 to P.5 and admitted facts by the Accused as it is already held in the above that, the complainant proved that the cheque in question belongs to the Accused i.e Ex.P.1 and signature found at Ex. P.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and it was dishonoured for the reason of "Signature Differs"
as per Ex.P.2 and thereafter the legal notice caused by him through RPAD to the Accused was served on him, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initial presumptions are available in favour of the complainant U/s.118a and 139 of the N.I. Act. Consequently it is for the Accused to rebut the said presumptions available in 16 C.C.No.29191/2017 J favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even a presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused unless and until the said presumptions are rebutted by the Accused, even in the absence of documents produced by the complainant with regard to loan transaction in question.
18. It is true that, the complainant has not produced documents except the cheque in question i.e., Ex.P.1 to show that, he has lent an amount of Rs.2,50,000/- to the Accused and in turn the Accused has issued the Ex.P.1 cheque towards discharge of the said debt and has also not produced documents to show his source of income. But as it is already held in the above that, the presumptions can be drawn in favour of the complainant as 17 C.C.No.29191/2017 J required U/s.118 and 139 of N.I., Act and the said presumptions can be drawn even to the extent of existence of legally recoverable debt or liability against the Accused, even in the absence of the documents, unless the said presumptions are rebutted by the Accused. 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 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 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 18 C.C.No.29191/2017 J 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 was his, 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 15-03-2018 between ROHITBHAI JIVANLAL PATEL Vs STATE OF GUJARAT AND ANR 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 19 C.C.No.29191/2017 J 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 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. 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 20 C.C.No.29191/2017 J 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 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 21 C.C.No.29191/2017 J 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 High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated: 15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the cross- examination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial 22 C.C.No.29191/2017 J is not enough".
19. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex 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 cheque in question in his favour and the Accused 23 C.C.No.29191/2017 J has admitted the cheque belongs to him and signature appearing on the cheque is that of his signature, in such circumstances, presumptions have to be drawn towards existence of 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 in the written argument are not acceptable one.
20. It is relevant here to mention that, the Accused in order to rebut the presumption available to the complainant U/s.118 and 139 of N.I. Act the Accused during the course of cross-examination of the complainant has produced one small dairy by confronting the said dairy to the complainant stating that, the complainant has collected his signed blank cheque at the time of giving the chit amount to the Accused and he has received a sum of Rs.5,000/- on 23.2.2017 and Rs.5,000/- on 20.3.2017and has put his signature for acknowledging the receipt of the said amounts, the complainant has admitted his signature found in the said dairy, accordingly the said dairy marked as Ex.D.1 and the signatures of the complainant are marked as Ex.D.1(a) and D.1(b).
24 C.C.No.29191/2017 JThe complainant though has admitted that there is mentioning of disputed cheque number in the said dairy but the complainant has denied the suggestion that, the said blank cheque has been collected towards Rs.50,000/-. On careful perusal of the entire cross-examination of the complainant, the Accused at one breath has taken defence that, the complainant is conducting chit business and the Accused is also subscriber of chit transaction and has bid the chit amount in the month of April 2017 and at the time of giving chit amount of Rs.36,000/- the complainant has collected his signed blank cheque as a security towards the chit transaction and even after paying the chit amount the complainant did not return his blank signed cheque and misused the same by filing this complaint and another breath has taken defence that, as per Ex.D.1 the complainant has collected his blank signed cheque in respect of the amount of Rs.50,000/-, hence it goes to show that, the Accused is not sure as to whether he has given alleged blank signed cheque to the complainant towards security of the transaction or towards the alleged amount of Rs.50,000/- as mentioned in Ex.D.1, in such 25 C.C.No.29191/2017 J circumstances, the Ex.D1 cannot be taken in to consideration to held that, the cheque in question has been collected by the complainant as blank signed cheque either towards the security of the chit transaction or towards Rs.50,000/- as shown in Ex.D.1, in such circumstances though the complainant has admitted his signatures found at Ex.D.1(a) and (b) but it cannot be held that, Accused has rebutted the presumptions available U/s.118 and 139 of Negotiable Instrument Act by raising his probable defence. It is relevant here to mention that, except the Ex.D.1 nothing has been produced before the court to believe the defence of the Accused that, the complainant is/was conducting the chit transaction business and Accused is also one of the subscriber in the said chit transaction and also bid the chit amount for Rs.36,000/- and he has received Rs.36,000/- chit bid amount in the month of April 2017 and at that time the complainant has collected his signed blank cheque and also not produced any document to show that, he has paid the entire chit amount to the complainant and inspite of it the complainant did not return his blank signed cheque, except the oral suggestions made to the complainant 26 C.C.No.29191/2017 J in his cross-examination nothing has been placed before the court to prove the defence of the Accused, therefore the Accused has miserably failed to produce cogent and convincible evidence to rebut the presumptions available to the complainant and the defence of the Accused appears to be denial in nature and cannot be acceptable one.
21. It is relevant here to mention that, in support of oral evidence of the Accused, has not produced any documentary proof to substantiate his defence that, in the month of April 2017, the complainant was running chit transaction and the Accused was a subscriber of chit transaction and was the successful bidder of Rs.36,000/- and has received the said amount and at that time, the complainant had collected his blank signed cheque and he has repaid the entire chit amount to the complainant but the complainant did not return his blank signed cheque and misused the same, in such circumstances the defence of the Accused cannot be acceptable one, it can be held that, cheque in question was issued for discharge of debt in question. In this regard, it is relevant here to refer 27 C.C.No.29191/2017 J the decision of Hon'ble Madras High Court reported in AIR 2009 (NOC) 726 MAD in the case of P. Armugam Vs. P. Veluswamy, wherein the Hon'ble High Court held that "Negotiable Instruments Act (26 of 1881) S.138 - Dishonour of cheque - Accused admits to have signed cheque and handed it over to complainant - Defence raised by accused that said cheque was issued as a blank cheque intended to be a collateral security for an unregistered chit conducted by complainant - However, no evidence has been adduced by Accused to prove that complainant was running an unregistered chit in which Accused joined as a subscribing member - there is no evidence to prove amount of chit or that Accused was a priced subscriber and the blank cheque had been issued to ensure proper payment of future subscriptions - can be held that, cheque was issued for payment of loan obtained by accused from complainant - Accused guilty of offence. In another decision of Hon'ble High Court of Karnataka reported in 2012 (4) KCCR 2634 in the case of Sri. Prakash @ Jnana Prakash Vs. Ms. T.S. Susheela wherein the 28 C.C.No.29191/2017 J Hon'ble High Court held that "NEGOTIABLE ISNTRUCTMETS ACT, 1881 - Section 138 - Complaint under - Cheque dishonoured for "insufficient funds" - Plea of accused as to non - receipt of demand notice, absence of legal liability, misuse of documents given as security in an independent chit transaction - Convicted by Trial Court- Confirmed by Appellate Court - Revision against- The plea as to misuse of documents would not be believed due to in action of the accused. Hence in view of the principles of law laid down by the Hon'ble High Courts in the above decisions, in the present case also the Accused has not proved that, the cheque in question has been issued to the complainant in respect of chit transaction and the complainant has misused the cheque and filed false case against him as alleged in his defence.
22. It is relevant here to mention that, according to the defence of the Accused that, the complainant had collected his blank signed cheque from him towards security in respect of chit transaction, according to him, he has handed over 29 C.C.No.29191/2017 J the blank signed cheque to the complainant at the time of receiving the chit amount of Rs.36,000/= in respect of chit amount and thereafter he has repaid the chit amount to the complainant. If really the complainant has collected blank signed cheque from the accused towards security of the chit amount, and even after repayment of the said chit amount, the complainant has misused his cheque, but even after notice of the fact of alleged misuse of the cheque by the complainant, the Accused would have made an efforts to get return of the said blank cheque from the complainant. Admittedly he has not produced any document to show that, the complainant was running chit business and has paid chit amount to him and the complainant had collected the signed blank cheque from the accused, in such circumstances, the defence of the Accused cannot be acceptable one as the Accused has not made any efforts either to issue notice to the complainant or to his brother and either by filing complaint against the complainant before the police or competent authority for non returning of the alleged misuse of signed blank cheque. In this regard, it is relevant here to refer the decision of 30 C.C.No.29191/2017 J 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 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 by applying the above principles of law to the present facts of the case in the present case though the Accused has taken defence that, the complainant has misused the subject cheque which was alleged to have been given to the 31 C.C.No.29191/2017 J complainant towards security in respect of chit transaction but the said defence has not been proved by the Accused, under such circumstances, it can be held that, the accused has not made any efforts to get return of the cheque in question, therefore, the said unnatural conduct of the accused in non taking of action leads to draw an adverse inference against the accused that, the cheque in question issued by the accused towards discharge of the liability in question and presumption U/s.139 of N.I. Act would operate against him, as he has admitted the signature and cheque in question is belong to him.
23. It is the specific defence of the Accused that, the complainant was running chit business and he has bid the chit amount in the month of April 2017 and taken Rs.36,000/- , during taking bid amount the complainant had taken his blank iogne cheque i.e subject matter cheque towards security purpose and even after bid amount paid by the Accused but the complainant did not return his blank signed cheque to him. As it is already held in the above that, the Accused has failed to prove his 32 C.C.No.29191/2017 J defence by producing cogent and convincible evidence and also failed to rebut the presumptions drawn U/s.139 of N.I. Act. No doubt, Accused had given reply to the notice caused by the complainant but the contents of the reply notice have not been proved by the Accused either by leading his evidence or by producing the documentary proof, therefore the defence of the Accused appears to be denial in nature. It is also important to note here that, the Accused admitted issuance of cheque to the complainant and also his signature on the cheque and has failed to prove his defence that, in such circumstances, it is necessary here to refer decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of Lale Patel Vs. Sharanabasappa., wherein the Hon'ble High Court held that " NEGOTIABLE INSTRUMENTS ACT, 1881- section 138 - Dishonour of cheque for insufficiency of funds - Plea of accused that he had given a blank cheque signed as security for a transaction and complainant filled up the contents and denied existence of any debt or loan - Conviction by Trial court - Affirmed by Appellate Court - Revision against. Hence in 33 C.C.No.29191/2017 J this case also it is the defence of the Accused that, he had given signed blank cheque to the complainant and same has been misused by the complainant by filling the contents of the cheque and denied the existence of debt but no documents have been produced by the Accused to prove his defence, in such circumstances it is for the accused to prove his defence by producing cogent and convincible evidence, if the Accused has not proved the same, it cannot be held that, the cheque in question was issued for the purpose of security in connection with the transaction. In another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. Vijayakumari., wherein the Hon'ble Apex court held that " NEGOTIABLE INSTRUMENTS Act, 1881- Section s138 and 139
- acquittal - If justified- Accused not disputing issuance of cheque and his signature on it- Plea that it was issued long back as security and that loan amount was repaid- Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused- Acquittal not proper. Hence in the present case also it is the main defence of the Accused that the 34 C.C.No.29191/2017 J cheque in dispute was given to the complainant at the time of alleged borrowing of chit amount of Rs.36,000/- but in this regard the accused has not produced documents or proof in such circumstances by applying the principles of law laid down in the above decision the defence of the Accused cannot be acceptable one. In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.271/2020 in the case of APS Forex Services Pvt. Ltd., Vs. Shakthi International Fashion Linkers and others., wherein the Hon'ble Apex Court held that "the defence of the Accused that, cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption. It is also held that, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always presumption infavour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the Accused to rebut such presumption by leading evidence". In the present case the Accused has admitted that, the cheque was issued and signature is also admitted but it is the defence 35 C.C.No.29191/2017 J of the Accused that, it was issued towards chit bid amount of Rs.36,000/- from the complainant and he has misused his cheque but no documentary proof produced by the Accused in support of his defence, in such circumstances the defence of the Accused cannot be acceptable one in the absence of further proof of evidence to rebut the presumption.
24. The Accused has taken another defence that, he has given his signed blank cheque to the complainant at the time of receiving the alleged chit bid amount o Rs.36,000/- though he has paid the entire chit amount to the complainant but he did not return his blank signed cheque and by misusing the said cheque has filed this false case. Even for sake of discussion, if it is assumed that, the Accused had given blank signed cheque to the complainant even in such circumstances also the offence U/s.138 of N.I.Act would attract against the Accused. In this regard, it is a relevant here to refer the 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, 36 C.C.No.29191/2017 J 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 reasonable plausibility of non existence of presumed fact." In the present case though the Accused has denied the contents of the cheque in question except his signature but he has failed to prove 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 and 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 37 C.C.No.29191/2017 J 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 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". Even if it is assumed that, the Accused is not aware who has filled the contents 38 C.C.No.29191/2017 J of the cheque, even in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the cheque filled in by in the presence of the Accused at his consent and the said cheque has been issued towards discharge of legally recoverable debt.
25. It is settled law that, the accused can rebut the presumption only on the basis of materials produced by the complainant even without entering into the witness box but in the present case the Accused has failed to substantiate his defence version in order to rebut the presumption available to the complainant and to prove the defense of the accused, under such circumstance, it is for the accused to disprove the case of the complainant or rebut the presumption then only the onus will be shifted on the complainant to prove his case. Admittedly the accused did not entered in to the witness box, therefore an adverse inference can be drawn against the accused that he has failed to rebut the presumption available to the complainant. Therefore it is clear that, except having denial of the 39 C.C.No.29191/2017 J case of the Complainant in the cross examination of complainant, the Accused has not taken any interest so as to prove his defence. In this regard, it is relevant here to refer a decision of Hon'ble Apex Court of India reported in "AIR 2018 SC 3173 in a case of Kishan Rao Vs. Shankargouda" wherein the Hon'ble Apex Court held that " Negotiable Instruments Act (26 of 1881), Ss. 138, 139- Dishonour of cheque - Presumption as to - Accused issuing cheque of Rs.2 Lakhs towards repayment of loan to Complainant- said cheque dishonoured on account of insufficiency of funds- Complainant proving issuance of cheque having signatures of Accused - Accused failing to rebut presumption raised against him and no evidence led by him in his support - Acquittal of Accused by High Court in revisional jurisdiction on ground of doubt in mind of Court with regard to existence of loan, improper- Accused, liable to be convicted. In another decision 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 40 C.C.No.29191/2017 J 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. 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 41 C.C.No.29191/2017 J consideration and the holder of the cheques received the same in existing debt. Therefore the principles of law laid down in the above decision are aptly applicable to the case on hand, since in this case also the complainant proved the fact that he has lent an amount of Rs.2,50,000/- to the Accused and the accused in turn issued cheque for discharge of the said amount as per Ex.P.1. The accused has also failed to enter into witness box to rebut the statutory presumption in support of his defense in such circumstances the defense taken by the accused counsel during the course of cross examination cannot be acceptable one.
26. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and he has failed to explain as to how his cheque has 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 42 C.C.No.29191/2017 J 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".
Hence in the present case also the Accused has failed to explain and prove that, how the cheque in question was entered into the hands of complainant. Therefore for the above said reasons the defense taken by the accused 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.
27. 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, the complainant has successfully established beyond all reasonable doubt that, he has lent a sum of Rs.2,50,000/= to the accused as a hand loan and the accused in turn has issued cheque in question i.e. Ex.P.1 to the complainant for sum of Rs.2,50,000/= towards repayment of the hand loan, 43 C.C.No.29191/2017 J thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Signature Differs " and thereafter he got issued legal notice to the accused and inspite of service of the said notice, the Accused did not repaid loan amount borrowed by him, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 Cheque. 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.
28. 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 cheque 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.
44 C.C.No.29191/2017 JHence 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 :-
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.2,65,000/= (Rupees Two Lakhs and Sixty Five Thousand only) within one month from the date of order, in default she 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.2,60,000/= (Rupees Two Lakhs and Sixty Thousand only) shall be paid as compensation to the complainant.45 C.C.No.29191/2017 J
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 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 20th March 2020).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri.Ravi.R;
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 : Office copy of the Legal Notice;
Ex.P.4 : Postal Receipt;
46 C.C.No.29191/2017 J
Ex.P.5 : Postal Acknowledgement;
Ex.P.6 : Reply Notice
3. List of witness/s examined on behalf of the Accused:-
- Nil -
4. List of documents exhibited on behalf of the Accused:-
Ex.D.1 : Dairy;
Ex.D.1(a) and : Signatures of the complainant;
1(b) (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
47 C.C.No.29191/2017 J20.3.2020 Judgment pronounced in the open court vide separate order.
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.2,65,000/= (Rupees Two Lakhs and Sixty Five Thousand only) within one month from the date of order, in default she 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.2,60,000/= (Rupees Two Lakhs and Sixty Thousand 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 Accused incompliance of Sec.363(1) of Cr.P.C.
48 C.C.No.29191/2017 JXVI ACMM, B'luru.