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Bangalore District Court

A.B.Narendra vs Ms.Deepa J on 28 February, 2020

 IN THE COURT OF THE JUDGE COURT OF SMALL
  CAUSES AND XXVI A.C.M.M, AT BENGALURU

            Present: Abdul Khadar, B.A., LL.B.,
                    JUDGE, Court Of Small Causes,
                    Bengaluru

       Dated this the 28th day of February 2020
                   C.C. No: 7777/2014


  Complainant:      A.B.Narendra
                    S/o.Bheemappa
                    Aged 35years
                    Residing at No.16/2,
                    East Anjaneya temple road,
                    Bengaluru-04.

                    (By Sri.Nagarajsharma -Advocate)
                           -Vs-
  Accused      :    Ms.Deepa J
                    D/o Jaganath,
                    Age 36 years,
                    Residing at No. 363, 9th Main,
                    Dollars Layout, J.P.Nagar 4th
                    Phase, Bengaluru-78.

                    (By Sri.N.Vishvanath-Advocate)


                       JUDGMENT

The complainant has filed the private complaint under Sec. 200 of Cr.P.C., against the accused for having committed an offence punishable under Sec.138 of Negotiable Instruments Act.

2. According to the complainant, the accused known person to the complainant. The accused had involved in a sale agreement between the complainant friends B.U.Shilpa, B.U.Shobha and B.Chaya with Sathyanarayana Reddy, ShubhakarGopal and Chandrashekar residing at 2nd Cross Marenahalli, 2nd Phase J.P. Nagar. However the sale agreement got cancelled and complainant friends had paid an advance of Rs.15,00,000/- for three sale deed papers. Accused on behalf of Sathyanarayana Reddy, Shubhakar Gopal and Chadrashekar had agreed to pay Rs.15,00,000/- along with Rs.3,20,000/-. Accused had issued cheques bearing Nos. 205701 dated 10.06.2013 for Rs.15,00,000/- and No.205140 dated 02.07.2013 for Rs.3,20,000/- both cheques are drawn on The Oriental Bank of Commerce, Jayanagar Branch, Bengaluru. The complainant has presented same through his banker for encashment on 05.07.2013. The said cheques were returned by the bank with an endorsement to effect that "Insufficient Funds". The complainant had issued a legal notice on 31.07.2013 to the house address of the accused calling upon the accused to pay the cheques amount within 15days from the date of receipt of notice and the same was served on the accused on 3-8-2013 and the acknowledgement returned to the complainant. But the accused not paid the cheques amount. Hence, 3 CC.7777/2014 she committed an offence punishable under Sec.138 of N.I. Act. Accordingly, he has filed the present complaint to take action against the accused in accordance with law.

3. After filing of the complaint under Sec.200 of Cr.P.C, this court after taking cognizance of the offence, proceeded to record, sworn statement and thereafter issued process to the accused. The accused appeared through her counsel and got enlarged on bail. Thereafter, accusation for the offence under Sec.138 of the N.I. Act was read-over and explained to the accused, for which, she pleaded not guilty and claimed to make defence. Accordingly, the complainant got examined himself as PW-1 and got marked 10 documents at Exs.P.1 to P.10 Thereafter, accused was questioned under Sec.313 of Cr.P.C explaining the incriminating evidence found against her, for which she denied, it is false and submitted that she has not borrowed any amount covered under cheques. The accused herself examined as DW-1 and no document got marked on her behalf.

4. Heard arguments and perused the materials available on record.

5. Now the points that arise for my consideration are:

1.Whether the complainant proves that the accused has issued cheques bearing 4 CC.7777/2014 No.205701 dated 10.06.2013 for Rs.15,00,000/- and No.205140 dated 02.07.2013 for Rs.3,20,000/-, both cheques were drawn on The Oriental Bank of Commerce, Jayanagar Branch, Bengaluru were issued by the accused towards discharge of her legal liability and failed to make good to the Complainant after its dishonor and issuance of legal notice within the stipulated period and thereby accused has committed the offence Punishable U/s. 138 of the NI Act?

2. What order?

6. My findings on the above points are as under:

Point No.1 : In the Negative Point No.2 : As per the final order below for the following:

REASONS Point No.1:-

7. In order to prove the case of the complainant, the complainant adduced his oral evidence as PW.1 filed by way of affidavit, in which he reiterated compliant averments and got marked documentary evidence at Ex.P1 to P10 and his argument also stated that how the accused has committed an offence, what is the reason the prosecution has been initiated. According to the learned counsel for the complainant, when the cheques and signatures are admitted, then the presumption as required under Section 139 of N.I. 5 CC.7777/2014 Act comes to the aid of the complainant and it is the turn of the accused to explain or rebut the said presumption by raising a probable defence.

8. In this regard, the court has to see whether the accused has been successful in rebutting the presumption through cross-examination of PW-1 and her evidence. According to the evidence of PW-1 that The accused had involved for an sale agreement between the complainant friends B.U.Shilpa, B.U.Shobha and B.Chaya with Sathyanarayana Reddy, Shubhakar , Gopal and Chandrashekar residing at 2nd Cross Marenahalli, 2nd Phase J.P. Nagar. However the sale agreement got cancelled and complainant friends had paid an advance amount of Rs.15,00,000/- for three sale deed papers. Accused on behalf of Sathyanarayana Reddy, Shubhakar Gopal and Chadrashekar had agreed to pay Rs.15,00,000/- along with Rs.3,20,000/-. Accused had issued cheques bearing No. 205701 dated 10.06.2013 for Rs.15,00,000/- and another cheque No.205140 dated 02.07.2013 for Rs.3,20,000/- both cheques are drawn on The Oriental Bank of Commerce, Jayanagar Branch, Bengaluru. These cheques were issued by the accused in the capacity of the Managing Director of Ishanvi Technologies Pvt. Ltd. The complainant presented the same through his banker for encashment 6 CC.7777/2014 on 05.07.2013. The said cheques were returned by the bank with an endorsement to effect that "Insufficient Funds". The complainant had issued a legal notice on 31.07.2013 to the accused; the same was duly served on accused on 01.08.2013. Inspite of service of demand notice, the accused neither cleared the cheques amount nor replied to the notice. Therefore, there shall be initial burden on the complainant to prove that he had so-much of amount with him to lend the same without taking any other documents except Exs.P.1 and P.2 cheques. Further he drew an attention of the court to Section 139 of the Act, which reads thus.......

"....presumption in favour of the holder-it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability...".

9. So, when the cross-examination of PW-1 indicates that the accused had issued cheques to discharge of her liability to PW-1. During the course of cross-examination of PW-1, he categorically admits that, accused is his family friend. He has seen the documents stood in the name of accused. The said property Katha stands in the name of Chandrashekar, Subhakar Gopal and Sathyanarayana Reddy, they are the friends of accused. They are not the relatives of 7 CC.7777/2014 accused. He has not seen the documents pertaining to the business of accused. He admits that Exs.P5 to 7 documents are not executed by the accused. Witness voluntaries that accused put her signature on the above said documents as witness, he has not produced documents to show that the sale consideration amount has been paid to the vendors through accused. He paid amount to the accused by way of cash. He denied that there is no money transaction held between him and the accused. He has not filed civil suit on Exs.P5 to 7 documents. The accused not gave reply to the demand notice. He met the vendors in the year 2013 and demanded to execute the sale deed orally and not demanded by way of written document. The witness voluntaries that by admitting the liability on Exs.P5 to 7 she herself issued Ex.P1-cheque to him. He is an income tax assessee, but not produced documents. He denied that there is no connection with property shown in Exs.P5 to7 and the accused is not due to him as there is no legally recoverable debt from the accused.

10. In the further cross examination he deposed that in para No.3 of affidavit is correct. The agreement at Exs.P5 to 7 are cancelled, but he has not produced the cancellation deed of agreement before this court. Except the above said transaction, he has 8 CC.7777/2014 no other transactions with the accused. The vendor and accused are known through him. He admits that there is no agreement entered between accused and vendors and there is written agreement for refund of amount. The vendors are not given authorization letter to the accused for refund of the amount. He admits that Exs.P5 to 7 agreement entered between vendors and purchasers and there is no agreement held between accused and vendors.

11. The PW-1 further admits that at the time of issuance of cheque the accused was running software company. Ex.P1 and 2 cheques were issued on behalf of Ishnavi Technologies Pvt. Ltd., Company. The said company is not arrayed as party to this complaint. He denied that towards commission amount in real estate business the accused issued alleged cheques in question to him. He admits that he has no transaction with above said company and there is a difference of amount and other writings in Ex.P1 and P2. He denied that he himself written the name in cheques. He do not know other Directors of the company. He admits the purchasers are not given GPA to him. In respect of agreement is concerned, he has not issued notice for cancellation of Exs.P5 to7 document. He do not know what are the transaction held between purchaser and accused. In Exs.P5 to 7 para 3(h) there is a recital that 9 CC.7777/2014 within 3 months the vendors has to execute sale deed. He fail to execute sale deed. The vendor has to return advance amount with interest. As per Exs.P5 to 7 the advance amount has to be return by the vendors and not the accused. The accused issued company cheques, but not her individual capacity. He admits that he has not produced bank statement of purchasers since they are not the parties to this case. He has not produced IT returns for the assessment year 2012 to 2014. In Ex.P10 there is no signature of accused has been admitted.

12. On perusal of cross examination of PW-1 it clearly revels that in connection with a property transaction negotiation between Sathyanarayana Reddy, Chandrashekar, Subhakar gopal in favour of V Chaya and others they paid an advance amount of Rs.15,00,000/- for the 3 sale agreements. The said agreements are not executed in favour of the accused either it contains the signature of the accused and the name of the complainant is nowhere mentioned in the Exs.P5 to 7 and the agreements were executed by the vendors in favour of purchasers they are friends of complainant, but not the accused. Hence Exs.P1 and 2 cheques are not legally enforceable debt since the cheques in question has been issued by the company and the company has not been arrayed as accused.

Moreover the complaint is silent about the transaction between company and the complainant. The Exs.P1 and 2 cheques belongs to Ishanvi Technologies Pvt. Ltd. This evidence/admission of PW1 itself quite clear that, the accused was issued cheques on behalf of company not individual capacity and the said company still exists and the accused is the one of the Director and other Director as well as company has not been arrayed as accused in the complaint.

13. On the other hand, the accused taken defence that, the agreement of sale executed in favour of different people and are not executed in favour of the accused. The complainant has failed to produce any material to establish that the agreement of sale are standing in the name of accused. In the cross examination of PW-1 he categorically admits that the company is not made as a party and there is no transaction done by him with the said company. Admittedly the complainant is relaying on the sale agreements at Exs.P5 to 7 which are not stands between complainant and accused those are executed by the vendors in favour of purchasers. Admittedly, PW-1 deposed that the purchasers are not gave authorization letter in his favour to recover the advance amount from the vendors or accused. There is no transaction inter-se between complainant and 11 CC.7777/2014 accused. The accused was given the cheques to her brother towards purchase of property in and around Bengaluru. The PW-1 admitted that there is a difference in handwriting in the cheques at Ex.P1 and 2. She has no necessity to raise money with the complainant. The complainant taken the advantage of the blank signed cheques filled the contents and filed this false complaint. No statutory notice issued to Ishanvi Technologies Pvt. Ltd., and directors are not made parties to the above case. The complainant has not mentioned about the accused being a director of the company in notice and complaint. The accused is not liable to discharge any debt to the complainant. Hence, this complainant is not maintainable and the complainant failed to prove his case that as on the date of issuance cheques there was a legally recoverable debt under Ex.P1 and P2. The same has been elicited from the mouth of PW1 at the time of cross examination. This witness cross examined by the complainant in length but nothing has been elicited form her mouth to show that, she is sole director of the Ishnavi Technologies Pvt. Ltd., She only responsible for the day to day affairs of the company and towards discharge of liability of the company being a director she issued alleged cheques in question to the complainant.

14. In the cross examination she deposed that Chandrashekar is her brother, Sathyanarayana reddy, Subhakar Gopal are known to her brother. Chandrashekar is having house property in Maraiahnahalli. She do not know said property consists of three story building and each floor was owned by separate persons. She pleads ignorance that Sathyanarayana reddy and Subhakar Gopal along with her brother entered into sale agreement in respect of above said house with Chaya, Shilpa and Shobha as per Exs.P5 to 7. She denied that prior to 2010 she knows the complainant. She do not remember whether she signed as witness in Exs.P5 to 7. She admits that the signature found in Exs.P 5 to 7 belongs to her. She do not know the purchasers are the relatives of complainant. She denied that she approached the complainant and told him that his brother and friends are kept the house property for sale as the complainant bring his relative and entered into sale agreement. She do not know the purchasers of Exs.P5 to 7 paid Rs.5,00,000/- each and they came to know the litigation is pending of the said property they cancelled the agreement at Exs.P5 to 7. Thereafter the purchasers asked the complainant for return of the advance amount as he issued 2cheques towards discharge of legally recoverable debt including interest 13 CC.7777/2014 as per Exs.P1 and 2. She admits that Exs.P1 and 2 belongs to her account and Ex.P1(a) and 2(a) is her signatures and cheques were returned for insufficient funds. Ishanvi Technologies company belongs to her self and her mother. She denied that her mother was received the demand notice. She denied that her brother Chandrashekar, Sathyanarayana reddy and Subhakar gopal has to pay the advance amount shown in Exs.P5 to 7 to the purchasers as she issued Ex.P1 and 2 cheques to the complainant in order to escape from liability, she deposing false evidence before the court.

15. In the further cross examination she admits that Ishanvi Technologies Pvt. Ltd. belongs to her, which was started the year 2007 till today the said company is running. The company had 2 directors they are herself and her mother. She herself look after the day to day affairs of the company and her mother is not actively participating in day today affairs. She herself taken financial decision, after that she informed about her mother. She only authorized signatory to sign company cheques. She admits there was no direct transaction held between complainant and company and there was no connection of real estate business and the company. She denied that she herself liable for the real estate business and Bheemappa and 14 CC.7777/2014 Chandrashekar also liable for the real estate business. She has not given complaint to the police for misuse of company cheques. She signed cheques and given to Chandrashekar for company business and same has been given to complainant. But she has not taken any legal action against Chandrashekar. She denied that in order to cheat the complainant she has given company cheques for repayment of debt to the complainant.

16. In support of his defence, he relied on a decisions reported in M/s. Indus Airways Pvt. Ltd., - vs- M/s Magnum Aviation Pvt. Ltd and Anr. reported in (2014) 12 SCC 539 wherein it is held that the Supreme Court has held in the above case that Section 138, treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation eaves no manner of doubt that to attract an offence U/Sec. 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of cheque. In other words, drawl of the cheque in discharge of existing or past adjudicated liability is sinequa non for bringing an offence U/Sec. 138. If a cheque is issued as an advance payment for purchase of th goods and for any reason purchase order is not carried to it logical conclusion either because s of its cancellation or 15 CC.7777/2014 otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawa for an existing debt or liability.

2. (2007)5 SCC 264 in the case of Kamalas vs Vidhyadharan M.J.and Another, wherein it is held that Burden on accused to rebut the presumption can be discharged by preponderance of probabilities - court can draw inference from material brought: on record as well as circumstances relied upon by accused as held by the Supreme Court in the case.

3. (2008) 4 Supreme Court Cases 54 in the case of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde wherein it is held that - NI Act S. 139 S- Presumption under-Scope of - Held, S. 139 merely raises presumption in favor of holder of cheque that the said cheque has been issued for discharge of any debt or other liability - Existence of legally recoverable debt is not a matter of presumption under S.139.

4) In this regard I have relied decision reported in AIR 2012 SC 2795 in the case of Aneetha Hada

-vs- M/s. Godfather Travels and Tours Pvt.Ltd, wherein it is held that Offence by company - Directors/other officer of company cannot be prosecuted alone - Arraigning company as accused is condition precedent for their prosecution. Section 141 16 CC.7777/2014 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. The vicarious liability gets attracted when the condition precedent under Section 141 namely, offence by company stands satisfied. The power of punishment is vested in the legislature and that is absolute in S. 141 which clearly speaks of commission of offence by the company. The liability created is penal and thus warrants strict construction. It cannot, therefore be said that the expression " as well as" in S. 141 brings in the company as well as the Director and /or other officers is tenable even if the company is not arraigned as an accused. The words "as well as" have to be understood in the context. Applying the doctrine of strict construction, it is clear that commission of offence by the company is an express condition precedent to attract the vicarious liability of the company can be prosecuted, then, only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. It necessarily follows that for maintaining the prosecution under S. 141 of the Act, arraigning of company as an accused is imperative only then the other categories of offenders can be brought in the 17 CC.7777/2014 dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself.

5) Another decision reported in (2012) 5 SCC 661 in the case of Aneetha Hada -vs- Godfather Travels and Tours Private Limited wherein it is held that Mandatory requirement of impleading company as one of the accused - director or authorized signatory of cheque-Prosecution against, without arraigning of company as accused, held, not maintainable.

6) Another decision reported in 2015 CRI. L. J. 4764 in the case of Jetendra Vora -vs- Bhavana Y.Shah and another wherein it is held that Dishonour of cheque issued by respondent partnership firm - Notice though addressed to accused, proprietor and constituted attorney of respondent firm - But there is no specific averment that liability of firm to whom goods were sold was taken over by constituted attorney of respondent firm - Order of High Court acquitting accused on ground that complaint was not maintainable against them - Is proper.

7) In the case of Pooja Ravinder Devidasani vs State of Maharastra and another reported in AIR 2015 supreme Court 675 wherein it is held that no evidence on records show that there is any act committed by the appellant no reasonable inference can be drawn that appellant could be vicariously held liable 18 CC.7777/2014 for offence she was charged continuation of proceeding against appellant U/s 138 and 141 being abuse of process of law thus cheques in question allegedly issued by company be virtue of letter of guarantee would not make alleged directof of company liable u/s 138 and 141.

8) Another decision reported in 2016 1 KCCR 764 in the case of M/s. Halappanavar Agro chemicals v/s M/s Jajee pesticides, wherein his lordship held that cheque issued by one partner failure arraign firm and other partner complainant as such not maintainable.

9) Another decision reported in 2016 (20 KCCrR 1666 in the cse of Srinath v/s D.K.Venkata nareshbabu, wherein their lordship held that complainant receiving cheque from accused/ director of company but not arraigning the company is a serious lapse vitiates entire proceedings.

10) Another decision reported AIR 2017 Supreme Court 4125 in the case of N Harihara Krishna v/s J.Thomas, wherein their lordship held that director / other officers of company cannot prosecuted alone arraigning company as accused is condition precedent for their prosecution. Every person signing cheque on behalf of company on whose account a cheque is drawn- does not become drawer of cheque.

17. On careful perusal of the above culled out principles of the Hon'ble Supreme Court and also High court, it could be seen from the evidence of PW1 wherein, it reveals that the accused was issued a cheque dated 10.06.2013 and 02.07.2013 as a director of Ishanvi Technologies Pvt. Ltd., drawn on Oriental Bank of commerce, Jayanagar Branch bearing No. 205701 dated 10.06.2013 for Rs.15,00,000/- and No.205140 dated 02.07.2013 for Rs.3,20,000/in favour of complainant and the evidence on record discloses that the cheques have been issued by the accused not in her individual capacity but as a director of Ishanvi Technologies Pvt. Ltd. and the Ex.P1 and P2 also mentioned as director wherein, the accused has signed the said cheques. This act of the accused show that representing the company she issued cheques. When that is so the other directors who are also responsible for the conduct of the day to day business of the said company but admittedly company and other director is not made as a party in this case. Hence, in the absence of arrived the company the complainant has filed against the one of the director is not maintainable in law.

18. In the present case the complainant not pleaded the mode of payment to the accused. Further he admits that he do not have the documents to show 20 CC.7777/2014 that as on the date of entering into sale agreement he had 15,00,000/- amount with him. This evidence shows that PW-1 has failed to produce relevant documents in support of his source for advancing money to the accused and he also not aware as to when where the transaction took place for which the cheques in question were issued to him by the accused and also not sure as to who wrote the cheque and making contradictory statements in this regard, in view of said serious defects in evidence of PW-1, the presumption under Sec.139 of N.I. Act is rebutted by the accused. In view of the above, the accused need not step into the witness box and need to prove his defence beyond all reasonable doubt as he is expected of the complainant under criminal trial. Hence, the complainant failed to establish his case.

19. On the other hand the accused has rightly rebutted the presumption. Hence, he prayed for acquittal. The learned counsel for the complainant argued that the complainant has proved his case by tendering his evidence and also proved all the ingredients of the offence punishable under Sec.138 and 142 of N.I. Act. Ex.P.1 and P.2 have been issued by the accused towards debt which legally recoverable and has not disputed by the accused the signatures found 21 CC.7777/2014 on Exs.P.1 and P.2 and also not disputed the contents of Exs.P.1 and P.2 at the time of cross-examination.

20. In this regard, he relied on the decision reported in

1. (2010)11 Supreme Court Cases 441 in the case of Rangappa V/s Sri. Mohan, wherein it is held that A. Negotiable Instruments Act, 1881 - S. 139 - Presumption under - Scope of - Held, presumption mandated by S.139 includes a presumption that there exists a legally enforceable debt or liability - However, such presumption is rebuttable in nature - Criminal Trial

- Proof - Presumptions - Generally.

C. Negotiable Instruments Act, 1881 - Ss. 138 and 139 - Dishonour of cheque - Conviction for - Matters to be considered by court - Held, what courts have to consider is whether ingredients of offence enumerated in S.138 have been met and if so, whether accused was able to rebut statutory presumption contemplated under S.139.

2. 2008 (8) SCALE 680, in the case of Mallavarapu Kasiviswara Rao V/s Thadikonda Ramulu Firm & Ors. wherein it is held that, U/Sec. 118(a) of the N.I. Act Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies 22 CC.7777/2014 on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal.

3. (1999) 3 SCC 35 in the case of Bharat Barrel & Drum Manufacturing Company vs Amin Chand Payrelal, wherein it is held that Sec.118A presumption that promissory note for consideration is rebuttal -initial burden lies on defendant to prove non existence of consideration by bringing on record such facts and circumstances which may lead the court to believe non existence of consideration or non existence so probable that a prudent man would act upon the plea that it did not exist. This can be done either by direct evidence or by preponderance of probabilities. Showing that the existence of consideration was improbable, doubtful or illegal. If burden is discharge, onus shifts on the plaintiff to prove passing of consideration as a matter of fact and failure to prove would disentitle him to relief.

4. (2002) 1 SCC 234 in the case of MMTC Ltd., and another v/s Medchi Chemicals and Pharma Pvt.Ltd., at para-19. Wherein the Apex Court made 23 CC.7777/2014 observation that "the authority shows that even when the cheque is dishonoured by reason of stop payment instructions, by virtue of Section 139, the court has to presume that the cheque was received by the holder for the discharge in whole or in part, of any debt or liability. Of course, this is a rebuttable presumption. The accused can thus show that the "stop payment" instructions were not issued because of insufficiency or Paucity of funds. If the accused shows that in his account, there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued, because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then, offence under Sec.139 of the act would not be made out. The important thing is that the burden of so, proving would be on the accused".

5. AIR 2001 Supreme Court 2895 in the case of K.N Beena Vs. Muniyappan and another wherein it is held that - NI Act (26 of 1881) S. 138, S. 139 S. 118- Cheque dishonour complaint - Burden of proving that cheque had not been issued for any debt or liability

- Is on the accused- Denial/averments in reply by accused are not sufficient to shift burden of proof onto the complainant- Accused has to prove in trial by 24 CC.7777/2014 lending cogent evidence that there was no debt or liability - Setting aside of conviction on basis of some formal evidence led by accused- Not proper.

6. Cri. Appeal No.230-231/2019 between V.Birsingh Vs Mukesh Kumar, wherein his lordship held that the owners to rebut the presumption under Sec.139 that the cheque has been issued in discharge of debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Sec.138 of the N.I.Act. Secs.20, 87 and 139 of N.I.Act makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of liability. It is immaterial that the cheque have been filled in by any person other than the drawer , if the cheque is duly signed by he drawer. If the cheque is otherwise valid, the penal provisions of Sec.138 would be attracted.

7. AIR 2019 SC 1876 in the case of Rohitbhai Jivanlal Patel Vs. State of Gujarat and another wherein it is held that Dishonour cheque - Rule of presumption of innocence of accused - cannot be applied with same rigour to offence U/S. 138, 25 CC.7777/2014 particularly where presumption is drawn that holder received the cheque for discharge the debt or liability.

21. It is settled law that the drawee of the cheque has to prove the existence of debt or liability. In the present case also, the complainant not averred in his complaint that on what date, the accused agreed to refund the earnest money along with excess amount. But in the cross-examination of PW-1 he admits the vendors only liable to pay the advance amount as per Exs.P5 to7 and not this accused. This evidence of PW-1 shows that the complainant has not spelled out the date, on which date his relatives advanced amount towards purchase of 3floor building belongs to purchasers. The cheques indicates that it bears the date as 10.06.2013 and 02.07.2013. Therefore, accordingly class (b) of Sec.118 of the Act, that it was deemed to have been drawn on 10.06.2013 and 02.07.2013. It is clear that no consideration has been passed under Exs.P1 and P2-cheques on the said date. Therefore, presumption under class (a) of Sec.118 of the Act stood rebutted.

22. The document at Ex.P1 and P.2 itself not proved that as on the date of issuance of cheques there was recoverable debt and can it be believed that unless source is proved to the court as to the capacity of complainant to lend a sum of Rs.15,00,000/- to the 26 CC.7777/2014 accused, then the case of the complainant cannot be accepted. Normally, their, arises the presumption when the cheque and signature are admitted. When once such evidence is placed by way of cross-examination of PW-1, then, complainant must be in a position to show source of income as on the date of lending. Therefore, I am of the view that the complainant has utterly failed to prove that Exs.P.1and P.2 cheque have been issued towards legally recoverable debt. On the other hand the accused has been in successful in raising probable defence in the mind of court Exs.P1 and P2 cheques were not given towards legally recoverable debt or liability.

23. In the present case also the accused rebutted the presumption U/s139 of N.I. by cross examining the PW1 that Exs.P1 and P2 cheques were not given towards legally recoverable debt or liability and hence, the evidence of accused not necessary. As per the aforesaid rulings, the presumption mandated by Section 138 of Negotiable Instruments Act includes that there exists legally enforceable debt or liability, which is rebuttable presumption and it is open to the accused to raise defence wherein the existence of legally enforceable debt or liability can be contested. The complainant has not rebutted the burden which cast upon him and he has not produced any corroborative 27 CC.7777/2014 evidence to establish his case. Therefore, on the basis of aforesaid decisions coupled with the defense taken by the accused, those decisions are squarely applicable to the present case on hand. The accused has given rebuttal evidence to the case of the complainant. The complainant failed to give corroborative evidence. Hence, the case of the complainant creates doubtful. In view of the above fact, I am of the view that he has failed to prove that the cheques were issued for legally recoverable debt. Hence, I answer Point No.1 in the Negative.

Point No.2:.

24. In view of the above findings on point No. 1, I proceed to pass the following:

ORDER Acting under Section 255(1) Cr.P.C. the accused is hereby acquitted for the offence punishable under Section 138 of Negotiable Instruments Act.

The bail bond and surety bond of the accused is hereby stand cancelled.

(Dictated to the Stenographer directly over computer, typed by her, corrected and then pronounced by me in the Open Court on this the 28th day of February 2020) (Abdul Khadar) Judge , Court of Small Causes, &XXVI ACMM Bengaluru.

ANNEXURE List of Witnesses examined on behalf of complainant:

PW -1 : A.B. Narendra List of Documents marked on behalf of complainant:

Ex.P1&2        :    Cheques
Ex.P.1(a)&2(a) :    Sig.of accused
Ex.P.3&4       :    Two Bank Endorsements,
Ex.P.5to7      :     Sale agreement dated 17.05.2012
Ex.P.8         :    Notice
Ex.P.9         :    Postal receipts
Ex.P.10        :    Postal acknowledgement

List of Witnesses examined on behalf of accused:

DW-1             :   Deepa J.
List of documents marked for accused:
               -Nil-



                             (Abdul Khadar)
                       Judge , Court of Small Causes,
                         & XXVI ACMM, Bengaluru.