Bangalore District Court
The Presumptions Are Rebuttable And The ... vs To Rebut The Presumptions. The ... on 28 September, 2022
1 C.C.No.26740/2017
KABC031113112017
Presented on : 13-11-2017
Registered on : 13-11-2017
Decided on : 28-09-2022
Duration : 4 years, 10 months,
15 days
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BANGALORE CITY
Dated this the 28th day of September 2022
Present: Lokesh Dhanapal Havale, B.A.LL.B
XV Addl.C.M.M., Bengaluru.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case C.C.No.26740/2017
2.Name of the Complainant: Sri. Annamalai,
S/o Ramapilai
Aged about 40 years,
Residing at No.120, 1st cross,
Nageshwara Layout,
Naganathapura,
Bengaluru100.
3.Name of the accused: Smt. Shanthi,
W/o Sri. Murugan,
Major, No.120, 1st cross,
Nageshwara Layout,
Naganathapura,
Bangalore100.
2 C.C.No.26740/2017
4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(1) Cr.P.C., accused is
Convictted
7.Date of final Order 28th day of September 2022
***
This complaint is filed U/Sec.200 of Cr.P.C. against the accused for
the offence punishable U/Sec.138 of the Negotiable Instruments Act,
1881.
2. The facts of the complaint in brief are as under:
The complainant and the accused knew each other. The accused
borrowed a sum of Rs.4,90,000/ without interest for her urgent
financial necessities. The accused issued cheque bearing No.006281 for
Rs.4,90,000/ dated 20.03.2017 drawn on The Shamarao Vithal Co
operative Bank, Naganathapura, Electronic City, Bangalore towards the
repayment of the said amount. He presented the cheque for
encashment and it was dishonored with an endorsement "Funds
Insufficient" vide endorsement dated 02.06.2017. He issued legal
notice dated 15.06.2017 to the accused calling upon him to repay the
cheque amount. The notice sent through RPAD to was returned as
'unclaimed' dated 27.06.2017. The accused failed to repay the amount
within 15 days from the said date and thereby committed an offence
punishable U/s.138 of the N.I.Act.
3 C.C.No.26740/2017
3. After the institution of the complaint, the cognizance was
taken and it has been registered as PCR No.9600/2017. The sworn
statement of the complainant has been recorded and on the basis of
sworn statement and other materials on hand, the criminal case has
been registered against the accused and summons was issued to her. In
response to the service of summons, the accused appeared through her
learned counsel and got enlarged on bail. The prosecution papers were
supplied to the accused and the substance of the accusation was read
over and explained to the accused in kannada. She pleaded not guilty
and claimed to be tried.
4. During trial the complainant examined himself as PW1
and got marked Ex.P1 to P5. The statement of the accused U/s.313 of
Cr.P.C. is not recorded due to the absence of the accused and
proceeded with the case relying on the Judgment of the Hon'ble High
Court of Karnataka in Crl.Revition Petition No.437/2010 in the case of
R.V Kulakarni V/s Dakshina Murthy decided on 28.06.2012. The
accused did not lead any evidence.
5. Heard the counsel for the complainant and the arguments
on the side of the accused are taken as nil. On perusal of the entire
materials on record, the points that arise for my consideration are as
under;
1. Whether the complainant proves that the
accused issued cheque bearing No.006281 dated
20.03.2017 for Rs.4,90,000/ drawn on The
Shamrao Vithal Cooperative Bank Ltd,
Naganathapura, Electronic City branch,
Bengaluru towards the discharge of legally
enforceable debt/ liability and on its presentation
4 C.C.No.26740/2017
for encashment, it was dishonored with an
endorsement "Funds Insufficient" and the
accused has not paid the amount even after 15
days from the date of return of legal notice sent
through RPAD as unclaimed and thereby accused
committed an offence punishable U/Sec.138 of
N.I. Act, 1881?
2. Whether the accused rebuts the presumption
U/s.139 of the N.I.Act?
3. What order?
6. My answers on the above points for consideration are as under.
Point No.1 : In the Affirmative
Point No.2 : In the Negative
Point No.3 : As per final order for the following;
REASONS
7. Point No.1and 2 : The points are taken together for the
common discussion to avoid repetition of facts and evidence. It is
necessary to discus the provisions U/s. 118(a) and 139 of the Act.,
1881 at this stage.
"118. Presumptions as to negotiable
instruments. - Until the contrary is proved,
the following presumptions shall be made:
(a) of consideration - that every
negotiable instrument was made or drawn
for consideration, and that every such
instrument, when it has been accepted,
indorsed, negotiated or transferred, was
5 C.C.No.26740/2017
accepted, indorsed, negotiated or
transferred for consideration;"
"139. Presumption in favour of 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."
8. On plain perusal of the provision U/s. 118(a) and 139 of
the N.I.Act., it can be seen that initially the presumptions constituted
under these two provisions are in favour of the complainant. However
the presumptions are rebuttable and it is open to an accused to raise a
defence to rebut the statutory presumptions. An accused can raise a
defence, wherein the existence of legally enforceable debt or liability
can be contested.
9. It is also well established that an accused need not
examine himself for discharging the burden of proof placed upon him
under a statute. He may discharge his burden on the basis of the
materials already brought on record. An accused has constitutional
rights to remain silent. Standard of proof on part of the accused and
that of the prosecution in a Criminal Case is different. The prosecution
must prove the guilt of an accused beyond all reasonable doubts, the
standard of proof so as to prove a defence on the part of an accused is
preponderance of probabilities.
6 C.C.No.26740/2017
10. Under the light of position of the law, I have perused the
complaint and the evidence placed on record. The complainant in
support of his claim made in the complaint has adduced evidence by
examining himself as PW1 and he got marked Ex.P1 to P5. PW1 filed
his evidence affidavit on oath and reiterated the complaint averments.
Ex.P1 is the cheque bearing No.006281 dated 20.03.2017 for
Rs.4,90,000/ drawn on The Shamrao Vithal Cope Bank,
Naganathpura, Electronic City branch, Bengaluru issued in favour of
the complainant. Ex.P2 is the Bank Memo dated 02.06.2017 with shara
"Funds Insufficient". Ex.P3 is the office copy of Legal Notice dated
15.06.2017 issued by the complainant to the accused demanding
repayment of the cheque amount. Ex.P4 is the postal receipt for having
sent the legal notice to the accused. Ex.P 5 is the postal envelope
returned with shara unclaimed on 27.06.2017. Ex.P5(a) is the legal
notice found in the returned postal cover.
11. On perusal of the documents, it is clear that the cheque at
Ex.P1 bearing No.006281 dated 20.03.2017 for Rs.4,90,000/ drawn
on The Shamrao Vithal Coop Bank Ltd, Naganathapura, Electronic city
Branch, Bengaluru issued in favour of the complainant was presented
for encashment within the validity. The Bank Memo at Ex.P2 was
issued with shara "Funds Insufficient" on 02.06.2017. The complainant
issued statutory legal notice to the accused on 15.06.2017 as per Ex.P3,
which is well within the time from the date of receipt of dishonor
memo. The notice was issued by the complainant through RPAD and it
was returned with shara unclaimed on 27.06.2017. As per Judgment of
Hon'ble Supreme Court of India in the case of N. Parameswaran Unni
v. G. Kannan, reported in (2017) 5 SCC 737, it was held that "It is
clear from Section 27 of the General Clauses Act, 1897 and Section 114 of
7 C.C.No.26740/2017
the Evidence Act, 1872 that once notice is sent by registered post by
correctly addressing to the drawer of the cheque, the service of notice is
deemed to have been effected. However, the drawer is at liberty to rebut
this presumption". Further as per Judgment of Hon'ble Supreme Court
of India in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and
Another reported in (2007) 6 SCC 555, it was held at para No.17 as
under;
17. It is also to be borne in mind that the
requirement of giving of notice is a clear departure from
the rule of Criminal Law, where there is no stipulation
of giving of a notice before filing a complaint. Any
drawer who claims that he did not receive the notice
sent by post, can, within 15 days of receipt of
summons from the court in respect of the complaint
U/s.138 of the Act, make payment of the cheque
amount and submit to the Court that he had made
payment within 15 days of receipt of summons (by
receiving a copy of complaint with the summons) and,
therefore, the complaint is liable to be rejected. A person
who does not pay within 15 days of receipt of the
summons from the Court along with the copy of
the complaint u/s.138 of the Act, cannot obviously
contend that there was no proper service of notice as
required u/s.138, by ignoring statutory presumption to
the contrary u/s.27 of the G.C. Act and Section 114 of
the Evidence Act. In our view, any other interpretation
of the proviso would defeat the very object of the
legislation. As observed in Bhaskaran's case (supra), if
the 'giving of notice' in the context of Clause (b) of the
proviso was the same as the 'receipt of notice'
a trickster cheque drawer would get the premium to
avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section
138 of the Act.
8 C.C.No.26740/2017
In a nutshell it can be said that the statutory notice is an
opportunity given to the accused to make payment and avoid the
consequences of 138 of N.I.Act. In the case on hand, the summons
issued by the court on the address mentioned in the notice and
complaint and it was duly served on accused as per order sheet dated
24.02.2020 and on the next date of hearing, the accused appeared
through her counsel and obtained the bail. Therefore she cannot take
the shelter of statutory requirement of service of notice to avoid the
consequences of Section 138 of N.I.Act. The complaint was filed on
09.08.2017, which is within limitation. The issuance of the cheque and
the signature on the cheque at ExP.1 are not disputed. Therefore, the
documents on record clearly show that the complainant has complied
the ingredients of Section 138(a) to (c) of the N.I.Act. Therefore the
presumptions U/s.118 and 139 of the N.I.Act arise in favour of the
complainant. The presumptions are rebuttable and the burden is on the
accused to rebut the presumptions. The presumption is that the cheque
was issued for legally enforceable debt/ liability. However actual
existence debt or liability can be contested. The accused can rebut the
presumptions by raising probable defences and proving it relying on the
evidence of the complainant or by leading her direct evidence.
12. The plea of the accused was recorded on 7.3.2020. The
complainant lead evidence on 15.03.2022 and the case was posted for
cross examination of PW1 on 12.4.2022. The accused remained absent
since long time. Sufficient opportunities have been given to the accused
to crossexamine PW1. The Court has also issued and reissued NBW
against the accused but the accused was not secured. Therefore the
crossexamination of PW1 was taken as nil on 16.09.2022. The
9 C.C.No.26740/2017
accused did not appear before the Court since long time. Hence the
statement of the accused U/s.313 of Cr.P.C could not be recorded. As
per the Hon'ble High Court of Karnataka in Crl. Revision Petition
No.437/2010 in the case of R.V.Kulkarni Vs. Dakshina Murthy vide
Judgment dated 28.06.2012, wherein it was held that it was for the
accused to appear before the Court and to have defended himself
effectively and to make himself available for the Court to record the
statement U/s.313 of Cr.PC. In the said case the complainant preferred
the revision before the Hon'ble High Court challenging the order of the
First Appellate Court in remanding the matter for fresh trial for non
recording of the statement of the accused U/s.313 of Cr.P.C. The
Hon'ble High Court of Karnataka observed that there is no justification
of the Appellate Court for having held that there is failure of justice on
account of statement of the accused not having been recorded U/s.313
of Cr.P.C. The Hon'ble High Court of Karnataka also discussed settled
law in respect of statement of accused U/s.313 of Cr.P.C by referring to
the decision of three judge bench of Hon'ble Supreme Court in the case
of Basavaraj R.Patil Vs.State of Karnataka reported in (2000) 8 SCC
740. It is clear from the above decision that it is the duty of the accused
to appear before the Court and make available himself for recording of
statement U/s.313 of Cr.P.C. and to lead defence evidence. The
accused failed to utilize the opportunity by remaining absent. Therefore
the statement of the accused U/s.313 of Cr.PC was not recorded and
the defence evidence is taken as nil. The order sheet shows the conduct
of the accused in delaying the proceedings. Further the Hon'ble
Supreme Court of India in the case of Sumeti v/s M/s Paramount
Tech Fab Industries in Crl.Appeal No.292/2021 arising out of
SLP(Crl) No.8498 of 2019 decided on 9.3.2021 held that a statement
of the accused recorded u/sec.313 of Cr.P.C is not a substantive evidence
10 C.C.No.26740/2017
of defence but only on opportunity to the accused to explain the
incriminating circumstances appearing in the prosecution case of the
accused. It was also observed that if there is no evidence in support of his
defence either to disprove or to rebut the presumption under sec.139 of
the Act, the statement recorded under sec.313 of Cr.P.C pleading false
implication and innocence does not come to the aid of the accused as it is
not a substantive evidence. Further it is settled principle that the accused
must show prejudice caused to him due to the non recording of
statement u/sec.313 of Cr.P.C. If no prejudice is pleaded and proved to
the satisfaction of Court for non recording of statement u/sec.313 of
Cr.P.C there would be no violation of salutary principle of natural
justice as enshrined in the maxim "audi alteram partem". No doubt it is
well settled that a circumstance about which the accused was not asked
to explain can not be used against him. But certainly it can be
distinguished under the peculiar facts and circumstances of a particular
case. In the case on hand, it is clear from the evidence on record that
the accused had at all points of time attempted to misuse the process of
the Court and abandoned the proceedings. The matter is pertaining to
the year 2017. This itself shows that the delaying tactics have been
practiced by the accused. If the same are entertained, it would defeat
the proceedings instituted by the complainant. Therefore in the opinion
of this Court, the non recording of the statement u/sec.313 of Cr.P.C
would not vitiate the proceedings unless prejudice is shown by the
accused. The scope and object of Sec.313 of Cr.P.C is explained in
catena of decisions and in view of that no injustice caused to the
accused for not having recorded his statement u/sec.313 of Cr.PC.
13. Further as per the judgment of the Hon'ble Supreme
Court of India in the case of Md. Sukur Ali v/s State of Assam in
11 C.C.No.26740/2017
Crl. Appeal No.546/2011 dated 24.2.2011, wherein it was held that
if the criminal case whether a trial or appeal or revision is decided against
accused in the absence of counsel there will be violation of Article 21 of
the Constitution. However this Court is of the opinion that as the
accused has the right to fair trial, he is also under the duty or
obligation to promptly appear before the Court and contest the case. As
per the law of jurisprudence, there is always duty or obligation
corresponding to the right. The accused remaining absent for the years
together at his peril and therefore he can not be expected to claim the
right. Further the judgment in the case of Md. Sukur Ali (supra) can be
distinguished on the basis of the facts of the present case. The facts of
the said case are that the Crl. Appeal No.137 of 2003 was decided by
the Hon'ble Gauhati High Court on 1.6.2010 in the absence of the
counsel for the Appellantaccused and the conviction was upheld. The
question before the Hon'ble Supreme Court was that whether in a
criminal case, if the counsel for the accused does not appear, for
whatever reason, should the case be decided in the absence of the
counsel against the accused, or the Court should appoint an amicus
curie to defend the accused. Usually in appeal or revision, there is no
question of recoding of evidence of the parties. The counsels appearing
for the parties canvass the arguments on behalf of their parties assisting
the Court about the correct position of law and the error committed by
the Trial Court or Appellate Court as the case may be. However that is
not the case when it comes to a trial. The parties have to personally
appear before the Court and lead evidence and the complainant has
only benefit of recording the evidence through GPA/SPA holder. In a
case where the accused himself is not appearing and because of
instructions being not given or for any other reason, the counsel is also
not appearing, if the Amicus Curie is appointed by the Court to defend
12 C.C.No.26740/2017
the accused, he could not proceed with the case without there being
any instructions of the accused and knowledge of the facts/the defence
of the accused. If the Amicus Curie is unaware of the defence of the
accused under the facts of a particular case, he is unable to proceed
with the case in effective manner. If the accused himself is not
appearing, there is no question of leading the defence evidence. Further
at a later stage, the accused may appear and if at all something went
against him in his absence, he might challenge it. If the counsel for the
accused appear at a later stage, he might also challenge it. Therefore
with due respect to the judgment of the Hon'ble Supreme Court in the
case of Md. Sukur Ali (supra) this Court is of the opinion that under the
circumstances as elaborated herein above the appointment of Amicus
Curie in trial is not feasible. Further the proceedings under the N.I Act
are quasi civil in nature and the object of the N.I Act is to bring back
the credibility of Negotiable Instrument which were loosing their
credibility because of lack of responsibility on the part of the drawer
and to inculcate faith in the efficacy of banking operations in
transacting business on Negotiable Instrument in general to bring the
erring drawer to book, so that such irresponsibility is not perpetuated,
to protect the honest drawer and to safeguard the payee who is almost
a looser. Such being the case, if the accused is allowed to abuse the
process of the Court, the object of the Act would be defeated. Further in
the case of K.S Panduranga v/s State of Karnataka, reported in
2013(3) SCC 721 the Hon'ble Supreme Court held that, "regard
being had to the principles pertaining to binding precedent, there is no
trace of doubt that the principle laid down in Md. Sukar Ali (Supra) by
the learned judges that the Court should not decide a criminal case in the
absence of counsel of the accused as an accused in a criminal case should
not suffered for the fault of his counsel and the Court should, in such a
13 C.C.No.26740/2017
situation must appoint another counsel as amicus curie to defend the
accused and further if the counsel does no appear deliberately, even then
the Court should not decide the appeal on merit is not in accordance with
the pronouncement by larger bench in Bani Singh." The Hon'ble Court
further held that in view of the aforesaid annunciation of law, it can
safely be concluded that the dictum in Md. Sukur Ali (Supra) to the effect
that the Court can not decide a criminal appeal in the absence of counsel
for the accused and that too if the counsel does not appear deliberately or
shows negligence in appearing, being contrary to the ratio laid down by
the larger bench in Bani Singh (Supra) is per in curium. Furthermore the
transaction alleged in the case is purely a hand loan transaction
between the parties and the accused is not in judicial custody. Under
such circumstances the question of appointing counsel for the accused
at the cost of state may not arise at all. Hence, in view of the law laid
down in the case of K.S Panduranga (Supra), the case is proceeded on
merits.
14. The accused failed to cross examine PW1 and she did not
lead any defence evidence. Further the order sheet shows the conduct
of the accused in delaying the proceedings on one or the other pretext.
The accused had given number of opportunities for cross examination
of PW1 but the accused failed to cross examine PW1. Therefore, the
cross examination of PW1 was taken as nil. The accused did not lead
the defence evidence. Therefore the defence evidence is also taken as
nil. The case was posted for arguments. The conduct of the accused
itself shows that she is postponing the liability. If at all the accused had
no liability towards the complainant as alleged in the complaint and if
at all she had not issued the cheque in question for the said liability,
she would have promptly proceeded with the case and also she would
14 C.C.No.26740/2017
have lead defence evidence by taking probable defences and proving
the same by leading cogent evidence. The same has not been done. She
had not taken any action against the complainant for misuse of cheque.
Therefore there is nothing on record to disbelieve the case of
complainant.
15. The cheque and signature on the cheque at ExP.1 is not
disputed. It is marked as Ex.P.1(a). The admission regarding drawer's
signature on the cheque, attracts the ratio laid down by the Hon'ble
Supreme Court of India in its decisions reported in 2011 (11) SCC -
441 - Rangappa V/s.Sri.Mohan and SCC 2015 (8) Page No.378 -
T.Vasanthakumar V/s.Vijayakumari and the recent Judgment delivered
in Crl. Appeal No.508/2019 - Rohit Bhai Jeevanlal Patel V/s.State of
Gujarath and another. The ratio is that the cheque shall be presumed to
be for consideration unless and until the court forms a belief that the
consideration does not exist or considers the nonexistence of
consideration was tenable that a prudent man would under no
circumstances act upon the plea that the consideration does not exist.
On perusal of Ex.P1, it clearly show that the signature, date, the name
of complainant and the amount in words and digits are written with
same ink. Further as per Section 20 of the N.I.Act, if the person signs
and delivers Negotiable Instrument and it is left incomplete and
thereby he authorizes the holder to complete the Negotiable Instrument
and thereby he is liable for the amount mentioned in the Negotiable
Instrument. In the Judgment rendered by the Hon'ble Supreme Court
of India in Bir Singh V/s.Mukesh Kumar reported in AIR 2019 SC
2446, it was held by the Hon'ble Apex Court that "If a signed blank
cheque is voluntarily presented to a payee, towards some payment, the
payee may fill up the amount and other particulars. This in itself would
15 C.C.No.26740/2017
not invalidate the cheque. The onus would still be on the accused to prove
that the cheque was not in discharge of a debt or liability by adducing
evidence. Even a blank cheque leaf, voluntarily singed and handed over by
the accused, which is towards some payment, would attract presumption
under Section 139 of the Negotiable Instruments Act, in the absence of
any cogent evidence to show that the cheques was not issued in discharge
of a debt." Therefore there is nothing on record to disbelieve the case of
the complainant.
16. The Hon'ble Supreme Court of India in the case of
Rangappa Vs. Mohan reported in 2011 (11) SCC 441 held as under;
The presumption mandated by Section 139 of N.I.Act does
indeed include the existence of legally enforceable debt or
liability. It is rebuttable presumption and it is open to the
accused to raise a defence wherein the existence of legally
enforceable debt or liability can be contested. However there
can be no doubt that there is an initial presumption which
favours the complainant. Section 139 of the Act is an
example of reverse onus clause that has been included in
furtherance of the legislative objective of improving the
credibility of negotiable instruments.
Therefore the as per the presumption U/s139 of N.I.Act, if
the cheque and signature are admitted then it shall be presumed
that there is legally enforceable debt.
17. The Hon'ble Supreme Court of India in the case of Rohit
Bhai Jeevanlal Patel Vs. State of Gujarath and another reported in
(2019) 18 SCC 106 observed at para No.14 and 17 as under:
16 C.C.No.26740/2017
14. So far the question of existence of basic ingredients for
drawing of presumption under Sections 118 and 139 the NI
Act is concerned, apparent it is that the accusedappellant
could not deny his signature on the cheques in question that
had been drawn in favour of the complainant on a bank
account maintained by the accused for a sum of Rs. 3 lakhs
each. The said cheques were presented to the Bank
concerned within the period of their validity and were
returned unpaid for the reason of either the balance being
insufficient or the account being closed. All the basic
ingredients of Section 138 as also of Sections 118 and 139
are apparent on the face of the record. The Trial Court had
also consciously taken note of these facts and had drawn the
requisite presumption. Therefore, it is required to be
presumed that the cheques in question were drawn for
consideration and the holder of the cheques i.e., the
complainant received the same in discharge of an existing
debt. The onus, therefore, shifts on the accusedappellant to
establish a probable defence so as to rebut such a
presumption.
17. In the case at hand, even after purportedly drawing the
presumption under Section 139 of the NI Act, the Trial
Court proceeded to question the want of evidence on the
part of the complainant as regards the source of funds for
advancing loan to the accused and want of examination of
relevant witnesses who allegedly extended him money for
advancing it to the accused. This approach of the Trial
17 C.C.No.26740/2017
Court had been at variance with the principles of
presumption in law. After such presumption, the onus
shifted to the accused and unless the accused had discharged
the onus by bringing on record such facts and circumstances
as to show the preponderance of probabilities tilting in his
favour, any doubt on the complainant's case could not have
been raised for want of evidence regarding the source of
funds for advancing loan to the accusedappellant. The
aspect relevant for consideration had been as to whether the
accusedappellant has brought on record such
facts/material/circumstances which could be of a
reasonably probable defence.
It is clear from the aforesaid decision that once the presumption is
raised U/s 139 of N.I.Act, the source of income of the complainant
could not be questioned unless the accused discharges the onus by
bringing on record such facts and circumstances as to show the
preponderance of probabilities tilting in his favour.
18. The Hon'ble Supreme Court of India in its latest case of
M/s. Kalamani Tex v. P. Balasubramanian reported in 2021 SCC
OnLine SC 75 observed at para No.14 to 16 as under:
14. Adverting to the case in hand, we find on a plain
reading of its Judgment that the trial Court completely
overlooked the provisions and failed to appreciate the
statutory presumption drawn under Section 118 and Section
139 of NIA. The Statute mandates that once the signature(s)
of an accused on the cheque/negotiable instrument are
established, then these 'reverse onus' clauses become
18 C.C.No.26740/2017
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him.
This point of law has been crystalized by this Court in
Rohitbhai Jivanlal Patel Vs. State of Gujarat, (2019) 18 SCC
106 in the following words:
"In the case at hand, even after purportedly drawing
the presumption under Section 139 of the NI Act, the trial
Court proceeded to question the want of evidence on the part
of the complainant as regards the source of funds for
advancing loan to the accused and want of examination of
relevant witnesses who allegedly extended him money for
advancing it to the accused. This approach of the Trial Court
had been at variance with the principles of presumption in
law. After such presumption, the onus shifted to the accused
and unless the accused had discharged the onus by bringing
on record such facts and circumstances as to show the
preponderance of probabilities tilting in his favour, any
doubt on the complainant's case could not have been raised
for want of evidence regarding the source of funds for
advancing loan to the appellantaccused....."
15. Once the 2nd Appellant had admitted his
signatures on the cheque and the Deed, the trial Court
ought to have presumed that the cheque was issued as
consideration for a legally enforceable debt. The trial Court
fell in error when it called upon the Complainant
Respondent to explain the circumstances under which the
appellants were liable to pay. Such approach of the Trial
Court was directly in the teeth of the established legal
19 C.C.No.26740/2017
position as discussed above, and amounts to a patent error
of law.
16. No doubt, and as correctly argued by senior
Counsel for the appellants, the presumptions raised under
Section 118 and Section 139 are rebuttable in nature. As
held in M.S.Narayana Menon Vs. State of Kerala, (2006) 6
SCC 39, which was relied upon in Basalingappa (supra), a
probable defence needs to be raised, which must meet the
standard of "preponderance of probability", and not mere
possibility. These principles were also affirmed in the case
of Kumar Exports (supra), wherein it was further held that
a bare denial of passing of consideration would not aid the
case of accused.
Therefore it is clear from the above judgments that the accused
has to raise a probable defence and prove it by adducing evidence,
which must meet the standard of preponderance of probabilities.
Unless the same has been done, doubt can not be raised on the case of
the complainant.
19. The Hon'ble Supreme Court of India in its latest case of
Tedhi Singh v/s Narayan Dass Mahant in Crl Appeal No.362/2022
arising out of SLP (Crl) No.1963/2019 dated 7.3.2022 observed at
para No.9 as under:
"The Trial Court and First Appellate Court have noted that
in the case u/sec.138 of N.I Act, the complainant need not
show in the first instance that he had the capacity. The
proceedings u/sec.138 of N.I Act is not a civil suit. At the
20 C.C.No.26740/2017
time when the complainant give his evidence unless a case is
set up in the reply notice to the statutory notice sent, that
the complainant did not have the fair wherewithal, it can
not be expected of the complainant to initially lead evidence
to show that he had the financial capacity. To that extent
the courts in our view were right in holding on those lines.
However, the accused has the right to demonstrate that the
complainant in a particular case did not have the capacity
and therefore, the case of the accused is acceptable which he
can do by producing independent materials, namely, by
examining his witnesses and producing documents. It is
also open to him to establish the very same aspect by
pointing to the materials produced by the complainant
himself. He can further, more importantly, achieve this
result through the cross examination of the witnesses of the
complainant. Ultimately, it becomes the duty of the courts
to consider carefully and appreciate the totality of the
evidence and then come to a conclusion whether in a given
case, the accused has shown that the case of the
complainant is in peril for the reason that the accused has
established a probable defence.
As per the observations made by the Hon'ble Supreme Court of
India in all the above decisions, it is clear that as per the presumption
U/s139 of N.I.Act, if the cheque and signature are admitted then it
shall be presumed that there is legally enforceable debt. The accused
has to raise a probable defence and prove it by adducing evidence,
which must meet the standard of preponderance of probabilities.
Unless the same has been done, doubt can not be raised on the case of
21 C.C.No.26740/2017
the complainant. Once the presumption is raised U/s 139 of N.I.Act, the
source of income of the complainant could not be questioned unless the
accused discharges the onus by bringing on record such facts and
circumstances as to show the preponderance of probabilities tilting in
his favour. The complainant need not show in the first instance that he
had the financial capacity at the time when the complainant give his
evidence. The proceedings u/sec.138 of N.I Act is not a civil suit. Unless
a case is set up in the reply notice to the statutory notice sent, that the
complainant did not have the financial capacity, it can not be expected
of the complainant to initially lead evidence to show that he had the
financial capacity.
20. The accused neither cross examined PW.1 nor lead the
defence evidence. The cheque and signature on the cheque at ExP.1 are
not disputed. It is marked as Ex.P.1(a). The admission regarding
drawer's signature on the cheque, attracts the ratio laid down by the
Hon'ble Supreme Court of India in its decisions reported in 2011 (11)
SCC - 441 - Rangappa V/s.Sri.Mohan and SCC 2015 (8) Page No.378 -
T.Vasanthakumar V/s.Vijayakumari and the recent Judgment delivered
in Crl. Appeal No.508/2019 - Rohit Bhai Jeevanlal Patel V/s.State of
Gujarath and another. The ratio is that the cheque shall be presumed to
be for consideration unless and until the court forms a belief that the
consideration does not exist or considers the nonexistence of
consideration was tenable that a prudent man would under no
circumstances act upon the plea that the consideration does not exist.
Further as per Section 20 of the N.I.Act, if the person signs and delivers
Negotiable Instrument and it is left incomplete and thereby he
authorizes the holder to complete the Negotiable Instrument and
thereby he is liable for the amount mentioned in the Negotiable
22 C.C.No.26740/2017
Instrument. In the Judgment rendered by the Hon'ble Supreme Court
of India in Bir Singh V/s.Mukesh Kumar reported in AIR 2019 SC
2446, it was held by the Hon'ble Apex Court that "If a signed blank
cheque is voluntarily presented to a payee, towards some payment, the
payee may fill up the amount and other particulars. This in itself would
not invalidate the cheque. The onus would still be on the accused to prove
that the cheque was not in discharge of a debt or liability by adducing
evidence. Even a blank cheque leaf, voluntarily singed and handed over by
the accused, which is towards some payment, would attract presumption
under Section 139 of the Negotiable Instruments Act, in the absence of
any cogent evidence to show that the cheque was not issued in discharge
of a debt."
21. On perusal of the evidence, the Court has raised
presumption U/s.139 of N.I.Act in favour of the complainant as the
complainant has complied all the ingredients of 138 of N.I.Act. The
presumption would operate in favour of the complainant unless the
contrary is proved. The onus is on the accused to prove her defence and
rebut the presumption. The accused has not taken any specific defence.
If at all the cheque in question was misused by the complainant, then
the accused would have taken legal action against the complainant
which has not been done. The accused appeared before the court and
she is having the knowledge of the proceedings at all times. Therefore
the overall evidence on record gave the impression that the accused
issued the cheque in favour of the complainant in respect of the
transaction as averred in the complaint.
22. For the reasons mentioned herein above, it is crystallized
that the accused has utterly failed to prove that there was no existence
23 C.C.No.26740/2017
of legally enforceable debt/liability between her and the complainant
and she has not at all issued the instant cheques towards the discharge
of legally enforceable debt. On the other hand, the complainant has
proved that the accused issued the cheques for the legally enforceable
debt; the cheque is dishonored due to the reason Funds Insufficient and
the notice issued by him was returned as 'unclaimed', which is deemed
service of notice on the accused. The complainant proved his case
beyond reasonable doubt. The accused failed to rebut the statutory
presumptions U/s.118(a) & (b) and 139 of the N.I.Act. Accordingly the
accused is found guilty for the offence punishable U/s.138 of the
N.I.Act. Hence, I proceed to answer the Point No.1 in Affirmative and
Point No.2 in the Negative.
23. Point No.3 : In view of the reasons assigned in Point No.1
and 2, I proceed to pass the following:
ORDER
As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine Rs.5,25,000/ (Rupees Five Lakh Twenty five Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.5,20,000/ (Rupees Five Lakh Twenty Thousand Only). The remaining balance amount of Rs.5,000/ is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for three months.
24 C.C.No.26740/2017The personal bond executed by the accused is hereby stands cancelled and cash surety of Rs.3,000/ furnished by the accused shall be refunded to him after expiry of appeal period.
The copy of the judgment shall be furnished to the a at free of cost.
(Dictated to the Stenographer, transcript thereof is computerized and printout taken by him, is verified and then pronounced by me in Open Court on this the 28 th day of September2022.) (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
ANNEXURE Witnesses examined for the Complainant: PW.1 : Sri. Annamalai Documents marked for the Complainant: Ex.P1 : Original cheque Ex.P1(a) : Signature of the accused Ex.P2 : Bank Memo Ex.P3 : Legal notice Ex.P4 : Postal receipt Ex.P5 : Postal envelope Ex.P5(a) : Legal notice found in the returned postal cover Witnesses examined For Defence: NIL Documents marked for Defence: NIL (Lokesh Dhanapal Havale), XV Addl.CMM., Bengaluru.
25 C.C.No.26740/201728.09.2022 (Judgment Pronounced in the Open Court Vide Separate Order sheet) ORDER As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine Rs.5,25,000/ (Rupees Five Lakh Twenty five Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.5,20,000/ (Rupees Five Lakh Twenty Thousand Only). The remaining balance amount of Rs.5,000/ is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for three months.
26 C.C.No.26740/2017The personal bond executed by the accused is hereby stands cancelled and cash surety of Rs.3,000/ furnished by the accused shall be refunded to him after expiry of appeal period.
The copy of the judgment shall be furnished to the a at free of cost.
XV Addl.CMM., Bengaluru.