Bangalore District Court
Sri.K.S.Swamy vs Sri.A.Muniswamaiah on 13 April, 2022
IN THE COURT OF THE XVIII ADDL.CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
PRESENT: MANJUNATHA M.S. B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
DATED : THIS THE 13 th DAY OF APRIL 2022
C.C. No.2326/2017
COMPLAINANT: Sri.K.S.Swamy,
S/o Sannannaiah,
Aged about 40 years,
R/at No.50, 7th Cross,
K.S.C.B Chikkabommasandra,
G.K.V.K.Post, Yelahanka New Town,
Bangalore-560 065.
(By Sri.C.S.- Advocate)
// Versus //
ACCUSED: Sri.A.Muniswamaiah,
S/o Anjinappa,
Aged about 57 years,
Chhatra Chhaya,
No.02, Renu Dhruva Niwas,
Vadderahalli Vidyaranyapura
Post, Bengaluru North Taluk,
Bengaluru-560 064.
Also at
Government of India,
Ministry of Urban Development,
Central Public Works Department,
Sri.A.Muniswamaiah,
I.D.Card No80, Operator,
A.G.S.Office, Bengaluru-01
(By Sri.S.G.S Advocate)
2 Judgment C.C.23262017
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Name of the complaint : Sri.K.S.Swamy
S/o Sannannaiah,
Date of commencement
of evidence : 27.02.2019
Date of closing evidence : 23.02.2022.
Opinion of the Judge : Accused not found guilty.
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE.
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act against the accused alleging that he has committed the offence punishable under section 138 of NI Act.
02. The sum and substance of the complaint is as follows; The complainant and accused are well known to each other. The accused and his wife were doing business and they have sustained loss in their business and they were in need of financial assistance. Therefore, in the last week of December 2015 the accused and his 3 Judgment C.C.23262017 wife have visited to the house of complainant and requested him for hand loan of Rs.8,50,000/- and also promised to return the said amount within six months. Considering his request, the complainant has paid Rs.8,50,000/- to the accused. The accused and his wife have executed the agreement dated 06-01-2016 agreeing to repay the same within six months with interest. After lapse of six months, in the month of August 2016 the complainant has approached the accused and demand for repayment of the said loan amount, but he failed to repay the said amount and postpone the repayment of the loan amount, finally the accused has issued cheque bearing No. 857875 dated:09.11.2017 of Rs.8,50,000/- drawn on State Bank of India, Jalahalli Branch, Bengaluru towards repayment of the said loan amount and assured that cheque will be honoured on its presentation. On believing the assurance of the accused, the complainant has presented the said cheque for encashment through his banker i.e.,S.B.I, Yelahanka New Town Branch, Bengaluru. To the shock and surprise of the complainant, the said cheque was returned unpaid with an endorsement "funds insufficient" on 15.11.2017. Thereafter, the complainant has got issued demand notice on 24.11.2017 to the accused by demanding the payment of 4 Judgment C.C.23262017 cheque amount. The said notice was duly served on the accused on 29.11.2017. For that, the accused has given untenable reply without any basis. Despite of the demand notice the accused has not paid the cheque amount and thereby he has committed an offence punishable under section 138 of N I Act.
03. After filing of complaint, this court has taken cognizance of the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of the complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, the accused was enlarged on bail and her plea was recorded as per section 251 of Cr.P.C. The accused has not pleaded guilty but submitted that he has defense to make.
04. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in (2014) 5 SCC 590, the sworn statement of the complainant treated as complainant evidence and complainant has examined himself as PW1 by filing affidavit of chief examination and got marked Ex.P.1 to 10. The accused has filed application under section 145(2) of NI Act for recall of PW1 for the purpose of cross-examination. The said 5 Judgment C.C.23262017 application came to be allowed and defence counsel has fully cross- examined PW1. After completion of complainant's evidence, the statement of accused as contemplated under section 313 of code of criminal procedure was recorded. The accused has denied all the incriminating material appears against him in the complainant's evidence. To prove his defence the accused himself examined has DW-1 and he also examined his wife Smt.Bhagyamma as DW-2.
05. Heard the arguments of learned counsels for complainant and accused. The learned counsel for accused has relied on judgments reported in AIR 1991 ORISSA, 25 Sri.Khetramohan Ray Vs Duayanarayana Panda and ars, ILR 2008 KAR 4629 Shiva Murthy Vs Amruthraj, 2010(5) KCCR SN 435 B.Girish Vs S.Ramaiah, (2015) 1 SCC 99 K.Subramani Vs K.Damodaranaidu, 2016(5) KCCR 1341 Smt.Threja Vs Smt.Jayalaxmi, 2016(1) AKR 211 A.M.Govinde Gowda Vs B.V.Ravi, AIR 2019 SC 942 Anss Rajashekar Vs Augustus Jeba Ananth, 2020(1) KCCR. 458 Mr.Syed Sulaiman Shahid Vs Sri.N.D.Subramanayam, 2020(1) KCCR 505 Yeshwath Kumar Vs Shanth Kumar.N., 2020(3) KCCR 2373 Vishal Vs Prakash Kadappa Hegannawar and 2021(1) 588 M.J.Appaji 6 Judgment C.C.23262017 Ex.MLA Vs T.Pushparaj. I have perused the materials available on record and judgments referred by the defence counsel.
06. The points that arise for my consideration are as follows;
1. Whether the complainant has proves that the accused has issued cheque bearing No.857875 for Rs.8,50,000/- dated 09.11.2017 and towards discharge of his liability, which was returned unpaid on presentation for the reason "Funds insufficient" and despite of notice the accused has not paid the cheque amount and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
07. My answer to the above points is as follows;
Point No.1: In the Negative .
Point No.2: As per final order for the following REASONS
08. POINT No.1: The Complainant has filed this complaint alleging that the accused has committed offence punishable under section 138 of N.I. Act. The complainant has pleads and asserts that, towards discharge of his liability the accused has issued a cheque in 7 Judgment C.C.23262017 question for Rs.8,50,000/-. He has presented the said cheque for encashment through his banker. The said cheque was returned unpaid with an endorsement "Funds Insufficient". Thereafter he got issued demand notice within time stipulated calling upon the accused to pay the amount covered under cheque. Despite of service of notice, the accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint.
09. To substantiate his case, the complainant has stepped into witness box and examined as PW.1 and got marked Ex.P-1 to 10. PW1 has reiterated the contents of the complaint in his affidavit evidence about leading of Rs.8,50,000/- to the accused, execution of loan agreement by the accused and his wife, issuance of cheque by the accused towards refund of aforesaid loan amount and its dishonour for funds Insufficient, issuance of legal notice to the accused calling upon him to pay the amount covered under cheque and his failure to comply the same.
10. In this scenario, let me scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 is 8 Judgment C.C.23262017 cheque dated 09.11.2017, the said cheque was returned unpaid with an endorsement "funds insufficient" as per Ex.P.2 bank endorsement dated 15.11.2017, Ex.P.3 is Legal Notice dated 24.11.2017 under which the complainant has demanded the payment of cheque amount, Ex.P.4 is Postal Receipt, Ex.P.5 is Postal Acknowledgment , Ex.P.6 is loan agreement cum receipt dated 06- 01-2016, Ex.P.7 to 9 are Income Tax Returns, Ex.P.10 is News Paper by name Praja Sandesha. The complainant is the editor of the said daily news paper. This complaint came to be filed on 18.12.2017. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act have been complied with and this complaint is filed within time. Thus, complainant is entitle to relied on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act. Section 118 reads as here: - "That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration". Further Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here:
9 Judgment C.C.23262017
- "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, or any debt or other liability." A combined reading of above said sections raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability.
11. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence in the scale of preponderance of probability to rebut the presumption available to the complainant. Let me examine whether the accused has successfully rebutted the said presumptions of law. The accused has specifically denied availing of hand loan of Rs.8,50,000/- from the complainant and issuance of Ex.P.1 cheque for repayment of said loan amount. He put forth the defence that on 15.12.2015 he has borrowed hand loan of Rs.2 lakhs from one Ramanjinappa for treatment of his elder brother son who was suffering from dengue fever. At the time of lending said loan said Ramanjinappa has obtained blank signed stamp paper in the name of complainant and 10 Judgment C.C.23262017 one blank signed cheque. Subsequently on February 2017 he has repaid the said loan amount with interest by borrowing loan from HDFC Bank and demanded for return of aforesaid blank stamp paper and cheque, but he has failed to return the same on one or the other pretext. Since, the said Ramanjinappa residing in the same locality and known person, strictly he has not demanded for return of said stamp paper and cheque. On receipt of legal notice dated 24.11.2017 from the complainant he came to know that aforesaid Ramanjinappa and the complainant herein in collusion with the each other have misused his signed blank stamp paper and cheque to file present case. He never borrowed loan of Rs.8,50,000/- from the complainant and there was no necessity to borrow such huge amount at any point of time. Hence, he contended that cheque in question has not issued for discharge of debt or any other liability as such section 138 of NI Act is not attracted to Ex.P.1 cheque and prays to acquit him from the case. The accused also questioned the financial capacity of the complainant to lend such huge amount of Rs.8,50,000/- at the relevant point of time.
12. In this back drop of the rival contentions, this court has given anxious consideration to the materials available on record and the 11 Judgment C.C.23262017 submissions made by both counsel. At the outset, it is pertinent to state here that the accused has not disputed the cheque in question and signature found in the cheque. The contention of the accused is that he has issued blank signed cheque and stamp paper to one Ramanjinappa while borrowing loan of Rs.2 lakhs. Subsequently he repaid the said loan, but said Ramanjinappa has not returned the said stamp paper and cheque and colluding with complainant has misused the same. From the said contention, it goes without saying that the accused has not disputed the cheque in question. Therefore, when the drawer has admitted the issuance of cheque as well as the signature present therein, the presumption envisaged under section 118 read with section 139 of NI Act would operate in favour of the complainant. The said provision lays down a special rule of evidence applicable to Negotiable Instruments. The presumption is one of the law and thereunder court shall presume that the instrument was endorsed for consideration so also, in the absence of the contrary evidence on behalf of the accused, the presumption under section 118 and 139 of NI Act goes in favour of the complainant. No doubt, said statutory presumption are rebuttable in nature. It is for the accused to place cogent and probable defence to 12 Judgment C.C.23262017 rebut the presumption raised in favour of the complainant. As discussed above when the complainant has relied upon the statutory presumption enshrined under section 118 read with section 139 of NI Act. It is for the accused to rebut the said presumption with cogent and convincing evidence. To put it other way, the burden lies upon the accused to prove that Ex.P.1 cheque was not issued for discharge of any debt, but it was issued while borrowing loan from said Ramanjinappa. It is worth to note that section 106 of Indian Evidence Act postulates that the burden is on the accused to establish the fact which is especially within his special knowledge, This provision is exception to the General Rule that, the burden of proof is always on the prosecution to establish their case beyond all reasonable doubt. In that view of the matter, the burden is on the accused to prove the earlier transaction with said Ramanjinappa and issuance of signed blank stamp paper and signed blank cheque to him while borrowing of loan of Rs.2 lakhs.
13. To discharge said burden the accused has led defence evidence by examining himself as DW-1 and examined his wife as DW-2. The defence counsel also fully cross-examined PW-1 to 13 Judgment C.C.23262017 rebut the presumption. During his chief-examination, the accused has reiterated his defence that, he has borrowed of loan of Rs.
2,00,000/- from one Ramanjinappa on 15-12-2015 by issuing signed blank cheque and stamp paper and inspite of repayment of loan amount said Ramanjinappa has misused his cheque and stamp paper colluding with complainant to file present case. The complainant counsel has cross-examined the accused. During his cross-examination he deposed that he is a retired central government employee and one month back he retired from the service. At the time of retirement he was drawing salary of Rs.60,000/- per month. He denied the suggestion that there is no connection to Ramanjinappa and this case. He further deposed that he repaid Rs.2 lakhs with interest of Rs.10,000/- to said Ramanjinappa but, no document was produced in that connection. He further deposed that, he has not lodged any complaint against said Ramanjinappa till today and no notice was issued to said Ramanjinappa demanding return of cheque and stamp paper. DW-2 is the wife of the accused she also deposed during the cross-examination that as per the demand of her husband she signed blank stamp paper, but she don't know why her husband took her signature on blank stamp paper. She 14 Judgment C.C.23262017 denied the suggestion that her husband was playing cards in the office and sustained huge loss in the said habit. Therefore, he took her signature on Ex.P.6 and on the basis of said stamp paper her husband borrowed loan of Rs.8,50,000/- from the complainant.
14. In the complaint at paragraph No.3, the complainant contended that the accused has borrowed loan of Rs.8,50,000/- for his business purpose. He further stated that the accused and his wife were doing business in the aforesaid address. The accused sustained loss in the business and therefore, he was need of financial assistance. As such they have visited to the house of complainant and expressed their difficulties and requested to provide Rs.8,50,000/- as hand loan and agreed to return the same within six month. Since complainant and accused are well known to each other, the complainant agreed to give hand loan. In this regard, on 06.01.2016 the accused and his wife have executed the agreement and borrowed of loan of Rs.8,50,000/- . On perusal of the aforesaid avernments, it appears that it is the case of the complainant that the accused has sustained huge loan in his business, therefore he borrowed loan from the complainant. But during the cross- examination of DW-2 the complainant counsel himself suggested 15 Judgment C.C.23262017 that the accused was playing cards in the office and sustained huge loss in the said bad habit. Because of said loss he borrowed loan from the complainant. The said contention of the complainant is totally contradictory to the complainant avernments stated above. Further, during the cross-examination at page No.6 & 7 the complainant deposed that he knows the accused since 5 years prior to the date of lending loan and he is working in accountant general office as operator. He further deposed that he has not enquired about the income of the accused at the time of lending loan to him, but he knows that the accused is a government servant. He further, deposed that wife of the accused is a house wife. He further deposed that he doesn't know what business was doing by the wife of the accused and he does not know in which business the accused has sustained loss. This version of the complainant and aforesaid complaint averments clearly shows that he don't know anything about the alleged business of the accused. No prudent man will believe that the complainant has lent loan of Rs.8,50,000/- without knowing the correct avocation of the accused and repayment capacity. It is very difficult to believe that the complainant has lent hand loan of 16 Judgment C.C.23262017 Rs.8,50,000/- to the accused without knowing his so called business and his capacity to repay the loan.
15. In the complaint he simply stated that the accused sustained loss in the business so he borrowed loan of Rs.8,50,000/- that too without obtaining any guarantee or security for the so called alleged hand loan. No creditor will lend such huge amount without asking any valuable security and with demanding any guarantor. Further, in the paragraph No.3 of complaint the complainant contended that the accused and his wife have visited his house and requested for hand loan of Rs.8,50,000/-. But during the cross- examination at para 4 of page No.7 he deposed that the accused has came to his office at 11- 00 AM and his office is situated at Yelahanka. This version of the complainant is totally contradictory to the aforesaid complaint avernment. This aspect shows that the complaint is not certain that when and where the accused demanded such huge loan amount. Furthermore, as per the complaint avernment at para No.3, the complainant contended that on the last week of December 2015 the accused approached for hand loan of Rs.8,50,000/- and he lent said amount on 06.01.2016. But during the cross-examination he deposed 17 Judgment C.C.23262017 that six months after the demand made by the accused he lent loan to him. This version of the complainant is totally against his case.
16. The complainant further deposed that he has purchased stamp paper and after preparing agreement on 06.01.2016 he lent loan to the accused. He further deposed that on the date of purchase of stamp paper he prepared agreement. On perusal of Ex.P6, it appears that stamp paper was purchased on 14.12.2015 and it is mentioned in the agreement that the said agreement was executed on 06.01.2016. Hence there is no uniformity in the complainant's version about when exactly the said agreement was executed. At page No.9 of his deposition the complainant deposed that he knows the contents of the Ex.P.6. But in the page No.10 he deposed that there is no condition in the Ex.P.6. This version of the complaint shows that he doesn't know anything about the Ex.P.6 because in the Ex.P.6 there is condition that the accused and his wife agreed to pay the loan within six months with interest at the rate of 2% per month and in case of default they shall pay interest at the rate of 24% per annum.
18 Judgment C.C.23262017
17. In the complaint the complainant contended that the accused issued Ex.P.1 in the month of November 2017. That means after lapse of 1 year 11 months from the date of alleged loan. The cheque amount is Rs.8,50,000/- and the principal amount alleged have been lent to the accused is Rs.8,50,000/-. That means the cheque amount is not included any interest. In the Ex.P.6 there is a condition that the accused and his wife agreed to pay the loan within six months with interest at the rate of 2% per month and in case of default they shall pay interest at the rate of 24% per annum. But the complainant claims that he received cheque for repayment of the loan amount only. For waiver of interest the complaint has not given any proper explanation. When the agreement itself contained condition regarding payment of interest and penal interest, then how the complainant has received the cheque on the principal amount without insisting the payment of interest, which also creates serious doubt about the case of the complainant that he lent hand loan of Rs. 8,50,000/- to the accused and he issued Ex.P.1 cheque for repayment of said amount.
18. The complainant has mainly relied on Ex.P6 loan agreement to prove the alleged loan. The accused in his evidence has deposed 19 Judgment C.C.23262017 that while borrowing the loan of Rs.2 lakhs from one Ramanjinappa he given signed blank stamp paper and signed blank cheque to him. During the cross-examination DW1 and DW2 have specifically deposed that they signed blank stamp paper. When the accused specifically contended that he put the signature on blank stamp paper, the onus to prove the execution of agreement Ex.P.6 is on the complainant. In that regard the complaint has not made any effort to prove the due execution of the Ex.P.6. Mere admission of the accused that Ex.P.6 contained his signature is not sufficient to prove the due execution the Ex.P.6 agreement. The accused contended that the complainant herein, Ramanjinappa and Madevappa are friends each other and they are together doing money lending business in the locality. The said Ramanjinappa has insisted him to buy stamp paper in the name of complainant as such he purchased stamp paper in the name of complainant and give it to said Ramanjinappa while borrowing loan of Rs.2 lakhs. The accused contended that by borrowing loan from HDFC bank he repay the said loan in Feb 2017. No doubt the accused has not produced anything to prove borrowing of loan from Ramanjinappa and repayment of said loan amount to him. But the cross-examination PW1 has admitted that 20 Judgment C.C.23262017 Mahadevappa is his friend and he knows Ramanjinappa, however he denied the suggestion that they together doing money lending business in the locality. During the cross-examination of PW1 it is demonstrated that he does not know anything about avocation of the accused, what purpose he borrowed loan, what are the conditions stipulated in the loan agreement, why he has waived interest and when exactly the accused issued cheque in question. From the view of the above contradictions if it is analyzed case of the complainant then the defence of the accused that he borrowed Rs. 2 lakhs loan from Ramanjinappa on 15-12-2015 and while borrowing the said loan he has given blank signed stamp paper and blank signed cheque and the complainant has misused the said blank stamp paper and cheque appears to probable one.
19. In the present case the accused has taken defence that he never borrowed any loan from the complainant and also questioned financial capacity of the complainant to lend such a huge amount. In this aspect it is appropriate to refer judgment reported in Rohitbhai Jivanlal Patel v. State of Gujarat : AIR 2019 SC 1876, Wherein the Hon'ble Supreme Court has observed that "The observations of the trial court that there was no documentary evidence to show the 21 Judgment C.C.23262017 source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Section 118 and section 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of 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 Basalingappa v. Mudibasappa : AIR 2019 SC 1983, the Hon'ble Apex Court observed that "During his cross-examination, when financial capacity to pay Rs.6 lakhs to the accused was questioned, there was no satisfactory reply given by the 22 Judgment C.C.23262017 complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts". In APS Forex Service Private Limited v. Shakti International Fashion Linkers AIR 2020 SC 945, the Hon'ble Apex Court has clarified and explained the issue as follows "Now so far as the reliance is placed by Learned Counsel appearing on behalf of the accused on the decision of this Court in the case of Basalingappa (supra), on going through the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand and/or the same shall not be of any assistance to the accused. In that case before this Court, the defence by the accused was that the cheque amount was given by the complainant to the accused by way of loan. When the proceedings were initiated under Section 138 of the N.I. Act the accused denied the debt liability and the accused raised the defence and questioned the financial capacity of the complainant. To that, the complainant failed to prove and establish his financial capacity. Therefore, this Court was satisfied that the accused had a probable defence and consequently in absence of complainant having failed to prove his financial capacity, this Court 23 Judgment C.C.23262017 acquitted the accused. In the present case, the accused never questioned the financial capacity of the complainant. We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque".
20. The crux of the decisions referred to above is that the complainant has no obligation, in all cases under Section 138 of the Act, to prove his financial capacity. But, when the case of the complainant is that he lent money to the accused by cash and that the accused issued the cheque in discharge of the liability, and if the accused challenges the financial capacity of the complainant to advance the money, despite the presumption under Section 139 of the Act, the complainant has the obligation to prove his financial capacity or the source of the money allegedly lent by him to the 24 Judgment C.C.23262017 accused. The complainant has no initial burden to prove his financial capacity or the source of the money. The obligation in that regard would arise only when his capacity or capability to advance the money is challenged by the accused. In the present case, the accused had challenged the financial capacity of the complainant to lend an amount of Rs.8,50,000/-. On the other hand the complainant claims that he has lent Rs.8,50,000/- to the accused by way of cash. Under such circumstance it is for the complainant to establish his financial capacity and source of income to lend such huge amount at the relevant point of time.
21. During the cross-examination the complainant deposed that, out of his income from his news papers business and agriculture income he lent loan to the accused. He deposed that he was getting income of Rs.2 lakhs per month from his paper business at the relevant point of time. He further deposed that he kept amount in house, but he has not shown the said amount in his IT returns. He denied the suggestion that he had no capacity to lend Rs.8,50,000/- at the relevant point of time. In order to prove his financial capacity the complainant has produced his IT returns for the assessment year 25 Judgment C.C.23262017 2016-17 and 2017-18 along with profit and loss statement. The said IT returns were marked as Ex.P.7 & 8. In the Ex.P.7 the complainant shown his income of Rs.2,85,200/- during the assessment year 2016-
17. Further in the profit and loss account statement he has assessed his profit and loss for year ending 31.03.2016 and shown his profit as Rs.11,76,150/- and expenditure of Rs.11,76,150/-. That means his savings was zero from his paper business. Further, the balance sheet shows that he had loan outstanding of Rs.15,19,232/- for the year ending 31.03.2016. Similarly, he has shown his income of Rs.3,16,200/- for the assessment year 2017-18 and in the balance sheet he shown loan outstanding of Rs.11,06,143/- and 1,81,200/- for the year ending on 31.03.2017. When the complainant himself borrowed loan from the various banks and kept the said loan outstanding, it is difficult to believe that he lent Rs.8,50,000/- to the accused that too without insisting him to provide any valuable security or guarantee. Hence, the Ex.P.7 & 8 are not at all helpful to prove the financial capacity of the complainant to lend such huge amount of Rs.8,50,000/- at the relevant point of time. Therefore the complainant utterly failed to prove his financial capacity and source of income to lend loan of Rs.8,50,000/- at the relevant point of time.
26 Judgment C.C.23262017
22. The loan amount is very substantial and it is highly improbable that a person would lend such huge amount to the other person without taking adequate security. Moreover, the complainant could not prove his financial capacity to advance such huge loan amount to the accused. In the absence of the same, the allegations of the complainant that the alleged loan amount was advanced to the accused, it cannot be believed that he might have advanced said amount to the accused. Therefore having regard to facts and circumstances of the case and evidences available on record the complainant's evidence is not suffices to establish the existence of debt.
23. Hon'ble Apex court in the case of Kumar Exports Vs Sharma Carpets, reported in (2009)2 SCC 513 has held that the accused in a trail under section 138 of N I Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstance of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption an accused is not expected to prove his 27 Judgment C.C.23262017 defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, bare denial of passing of the consideration and existence of debt, apparently does not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the cheque in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied 28 Judgment C.C.23262017 upon are compelling, the burden may likewise shift again on to the complainant. In the case on hand, the facts and circumstance discussed above leads to the conclusion that the defence set up by the accused that is so probable one. Therefore, the accused by raising probable defence has rebutted the statutory presumptions enshrined under section 118 and 139 of NI Act. Hon'ble Apex court in the case of Kamala S Vs Vidhyadharan M J, reported in (2007) 5 SCC 264 has held that once the accused has discharged his burden, then onus shifts on the complainant to prove his case beyond reasonable doubt. On overall appreciation of evidence, it is forthcoming that the complainant has failed to prove his case beyond reasonable doubt. In other words, the complainant has failed to put forth acceptable and satisfactory evidence in support of the case, to show that the accused has issued cheque Ex.P-1 for legally recoverable debt or liability. In the result, I am of the considered opinion that the complainant has failed to prove that the accused has committed the offence punishable under Section 138 of Negotiable Instruments Act. Accordingly, I answer point No. 1 in the negative. In view above discussion this court proceeds to answer POINT NO.1 IN THE NEGATIVE.
29 Judgment C.C.23262017
24. POINT No.2:- In the light of above discussions, I proceed to pass the following ORDER:
Acting under Section 255(1) of Cr.P.C., accused is acquitted of the offence punishable under Section 138 of Negotiable Instruments Act.
Bail bonds of accused and that of surety stand cancelled.
(Directly dictated to the Stenographer on computer, typed by her, corrected by me and then judgment pronounced in the open court on this the 13th day of April 2022).
(MANJUNATHA M.S.) XVIII A.C.M.M.,BANGALORE ANNEXURE I. List of witnesses on behalf of complainant:
P.W.1: K.S.Swamy . List of documents on behalf of complainant:
Ex.P-1 : Original Cheque.
Ex.P-2 : Bank memos.
Ex.P-3 : Legal notice
Ex.P-4 : Postal receipt
Ex.P-5 : Postal Acknowledgment
Ex.P-6 : loan Agreement
30 Judgment C.C.23262017
Ex.P-7 to 9 : Income tax returns
Ex.P-10 : News Paper
III. List of witnesses for the accused:
D.W.1: A.Muniswamaiah
D.W.2: Bhagyamma
IV. List of documents for accused: Nil
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE