Bangalore District Court
Sri. H.Basavaiah vs Sri.B.Venkatesh on 4 February, 2022
1
C.C.No. 28628/18 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 4th day of February 2022
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.28628/2018
Complainant : Sri. H.Basavaiah,
S/o. Late Honnaiah,
Aged about 51 years,
R/at # 8/1, 24th 'A' cross,
6th Block, Jayanagara,
Bengaluru 560 082.
(Rep. by Sri. Manjunatha
Kumar.R.S., Adv.,)
Vs
Accused : Sri.B.Venkatesh,
Aged about 58 years,
Risrika Enclave (Apartment)
Flat No.004, I Floor, 6th Cross,
Vittala Nagar I Stage,
Near ISRO Layout,
Kumaraswamy Layout,
Bengaluru 78.
(By Sri. Gopal & Associates., Advs.,)
Case instituted : 3.10.2018
2
C.C.No. 28628/18 J
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 4.2.2022
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, accused is known to him since several years as he was facing financial problems and approached and requested him to pay a sum of Rs. 1,00,000/ (Rupees One Lakh Only) as hand loan in order to meet his Children Educational purpose and heeding to the request of the accused, he paid the said amount of Rs.1,00,000/ by way of cash on 0403 2018 and accused has duly acknowledge the receipt of the same on the said date and has promised and agreed to repay the said hand loan amount within 3 months from the date of borrowal.
3C.C.No. 28628/18 J
3. The complainant further contends that, after the stipulated period of time he approached the accused and requested to repay the hand loan amount and on persistent demand made by him, towards discharge of the debt and liability, the accused has issued a Cheque bearing No. 424822, dated 07082018, for a sum of Rs.1,00,000/ drawn on Canara Bank, Banashankari II Stage Branch, Bengaluru, which is duly signed by the accused in his favour and accused assured him that, he shall maintain sufficient balance in the Account and the said Cheque will be honoured on its presentation to the Bank and as per the request of the accused, he presented the said cheque for encashment through his Bankers i.e., IOB Bank, Banashankari II Stage Branch, Bengaluru but the said Cheque was returned dishonoured with the Bank Endorsement dated 08082018 with a shara "Funds Insufficient", immediately after the dishonour of the said cheque he approached the accused and informed him about the dishonour of the said cheque and demanded to repay the said 4 C.C.No. 28628/18 J Cheque amount, but the accused expressed his financial problems and promised to repay the said Cheque amount within few days, but has not paid the Cheque amount, hence, he constrained to issue the Legal Notice to the accused on 17082018 and the legal notice sent to the accused through the Registered Post was duly served on 21082018. Hence the complainant has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
4. Before issuing process against the accused, the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his sworn statement, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to Ex.P.6 i.e, original Cheque dt: 07.08.2018 as per Ex P.1, the signatures on the said cheque identified by P.W.1 is that of the accused as per Ex.P.1(a), Bank Memo as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, the postal receipt as per Ex.P.4, Postal acknowledgement as per Ex.P.5, complaint as per Ex.P.6, signature of 5 C.C.No. 28628/18 J the complainant as per Ex.P.6(a),
5. Primafacie case has been made out against the accused and summons was issued against the accused in turn accused appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
6. In view of the principles of law laid down and as per the directions of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the accused, as he intended to set out his defence, and the case was posted for cross examination of complainant.
7. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence and also filed written statement , but subsequently he has not lead his rebuttal 6 C.C.No. 28628/18 J evidence. The accused during the course of cross examination of the complainant got marked the application U/s.309 of Cr.P.C dt: 3.10.2019 as per Ex.D.1 and application U/s.70(2) of cr.P.C dt:
3.10.2019 as per Ex.D.2, application U/s.436 of Cr.P.C dt: 3.4.2019 as per Ex.D.3, application U/s.445 of Cr.P.C dt: 3.10.2019 as per Ex.D.4, application U/s.145(2) of N.I.Act dt: 22.12.2017 as per Ex.D.5, vakalathnama filed on behalf of the accusedas per Ex.D.6, RPAD returned cover as per Ex.D.7, relevant entry as per Ex.D.7(a) ( all the above documents are marked through PW.1).
8. Heard by learned counsel for the complainant and the Accused and perused the written argument submitted by the learned counsel for the accused and also perused the decisions relied upon by the learned counsel for the accused ie., 1. AIR 2008 SC 1335 - Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, 2) AIR 2009 SC 1518
- M/s. Kumar Exports Vs. M/s. Sharma Carpets 3) 2011 Cri.L.J. 552 - Karnataka High Court -
7C.C.No. 28628/18 J Amzad pasha Vs. H.N.Lakshmana 4) ILR 2014 KAR 6572 - Sri.H.Manjunath Vs. Sri.A.M. Basavaraju 5) AIR 1986 Andhara Pradesh 120
- Jayanthilal Geol Vs. Smt. Zubeda Khanum 6) 2016(1) AKR 211 - A.M. Govindegowda Vs. V.V.Ravi ; 7) 2007 AIR SCW 6736 - John K. John Vs. Tom Varghese and another; 8) ILR 2008 KAR 4629 - Shiva Murthy Vs. Amruthraj ; 9) AIR 2003 SC 18 - C.Anthony Vs. K.G. Raghvan Nair
10) ILR 2003 KAR 773 - Narasimha Murthy Vs. Janakirama 11) 2008 Cri.L.J. 3411 - K. Narayana Nayak Vs. M.Shivarama Shetty;
12) (2013) 14 Scale 589 = (2014) 2 SCC 236 - John K. Abraham Vs. Simon C. Abraham & another; 13) (2007) 12 Scale 96 - K. Prakshan Vs. P.K.Surenderan ; 14) AIR 1997 Karnataka 275 - V.R.Kamath Vs. Divisional Controller, KSRTC.
9. On the basis of complaint, evidence of complainant and documents and having heard the 8 C.C.No. 28628/18 J arguments of learned counsel for the complainant and accused, the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued cheque bearing No. 424822 dated: 07.08.2018 for Rs.1,00,000/ drawn on Canara bank, Banashankari II Stage Branch, Bengaluru to discharge legally recoverable debt to the complainant and when the complainant has presented the above said cheques for encashment through his banker but the said cheques have been dishonoured for the reasons "Funds Insufficient"
on 08.08.2018 and the complainant issued legal notice to the accused on 17.08.2018 and inspite of it the accused has not paid the cheques amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
10. The above points are answered as under:
Point No.1: In the Affirmative Point No.2: As per final order for the following:9
C.C.No. 28628/18 J
REASONS
11. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act presupposes three conditions for prosecution of an offence which are as under:
1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.10
C.C.No. 28628/18 J
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
12. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 a presumption shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are 11 C.C.No. 28628/18 J rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
13. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, the accused is known to him since several years as he was facing financial problems and approached and requested him to pay a sum of Rs. 1,00,000/ (Rupees One Lakh Only) as hand loan in order to meet his Children Educational purpose and heeding to the request of the accused, he paid the said amount of Rs.1,00,000/ by way of cash on 0403 2018 and accused has duly acknowledge the receipt 12 C.C.No. 28628/18 J of the same on the said date and has promised and agreed to repay the said hand loan amount within 3 months from the date of borrowal.
14. The complainant/PW.1 further testified that, after the stipulated period of time he approached the accused and requested to repay the hand loan amount and on persistent demand made by him, towards discharge of the debt and liability, the accused has issued a Cheque bearing No. 424822, dated 07082018, for a sum of Rs.1,00,000/ drawn on Canara Bank, Banashankari II Stage Branch, Bengaluru, which is duly signed by the accused in his favour and accused assured him that, he shall maintain sufficient balance in the Account and the said Cheque will be honoured on its presentation to the Bank and as per the request of the accused, he presented the said cheque for encashment through his Bankers i.e., IOB Bank, Banashankari II Stage Branch, Bengaluru but the said Cheque was returned dishonoured with the Bank Endorsement dated 08082018 with a shara "Funds 13 C.C.No. 28628/18 J Insufficient", immediately after the dishonour of the said cheque he approached the accused and informed him about the dishonour of the said cheque and demanded to repay the said Cheque amount, but the accused expressed his financial problems and promised to repay the said Cheque amount within few days, but has not paid the Cheque amount, hence, he constrained to issue the Legal Notice to the accused on 17082018 and the legal notice sent to the accused through the Registered Post was duly served on 21082018.
15. In support of his sworn statement, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to Ex.P.6 i.e, original Cheque dt: 07.08.2018 as per Ex P.1, the signatures on the said cheque identified by P.W.1 is that of the accused as per Ex.P.1(a), Bank Memo as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, the postal receipt as per Ex.P.4, Postal acknowledgement as per Ex.P.5, complaint as per Ex.P.6, signature of the complainant as per Ex.P.6(a), 14 C.C.No. 28628/18 J
16. In the present case, there is dispute between the complainant and Accused with regard to their acquaintance. It is not disputed by the accused that, the cheque in question ie., Ex.P.1 belongs the account of the accused and signature found at Ex.P.1(a) is that of signature of accused. The accused has also not disputed that, the cheque in question was presented to the encashment within its validity period and the said cheque has been returned as dishonoured for the reason of "Funds insufficient" as per the returned memo issued by the concerned bank i.e Ex.P.2, hence as a matter on record it is proved by the complainant that, the cheque in question was dishonoured for the reason of Funds Insufficient. It is also not in dispute by the accused that, the legal notice caused by the complainant was within 30 days from the date of receipt of bank memo.
17. In relation to the service of notice, the accused during the course of cross examination of the complainant has denied the service of notice upon him. In order to prove the service of legal 15 C.C.No. 28628/18 J notice on the accused the complainant has produced copy of legal notice, postal receipt and postal acknowledgement which are at Ex.P.3 to P.5 respectively . The perusal of the Ex.P.3 to P.5 it appears that, after receipt of the bank endorsement by the complainant within 30 days he got issued legal notice in writing as per Ex.P.3 to the accused by calling upon him to pay the cheque amount within 15 days from the date of receipt of notice and the said notice was sent through RPAD as per Ex.P.4 and it was returned served on the accused as per Ex.P.5. It is true that, the complainant ie., PW.1 during the course of his cross examination has admitted that, the signatures found on Ex.D.1 to D.6 are those of the accused but he do not know the signature found on Ex.P.5 is that of the accused but the complainant has denied the suggestions made to him that, the legal notice caused by him as per Ex.P.3 was not duly served on the accused but the complainant categorically stated that, he has produced postal acknowledgement for having service of legal notice upon the accused. It is also denied the suggestion that, for the purpose of this case he has 16 C.C.No. 28628/18 J created Ex.P.3 to P.6 and produced in this case. If really the complainant got created Ex.P.3 to P.6 definitely the accused would have proved the said fact by examining the concerned postal authorities , since the accused has not denied the Ex.P.4 and P.5 are concerned to the postal authorities and it is not the defence of the accused that, the complainant by colluding with the postal authorities got created Ex.P.4 and P.5 and produced in this case, therefore the Ex.P.4 and P.5 are the postal receipt and postal acknowledgement issued by the postal department and they are the public documents and cannot be discarded unless the accused proved that, Ex.P.4 and P.5 are not belongs to the postal department and they are created by the complainant for the purpose of this case but in order to believe the said defence except the suggestions accused has not produced any concrete evidence , therefore in view of Ex.P.3 to P.5 it can be held that the legal notice issued by the complainant was sent to the accused through RPAD and same has been served on the accused. But mere admitting by the complainant that, signature found on Ex.P.5 ie.,postal 17 C.C.No. 28628/18 J acknowledgement is not of the accused it cannot be held that, the complainant has not issued the legal notice to the accused and same has not been sent through RPAD and has been served on the accused. It is also relevant here to mention that, when the accused has denied the public documents ie Ex.P.4 and P.5 to that extent burden is on him to prove the same but the accused except the denial by making suggestions to the complainant nothing has been produced before the court.
18. It is also important here to mention that, the accused tried to show that, the legal notice caused by the complainant was not sent to the correct address of the accused. In this regard, the learned counsel for the accused has cross examined in length but nothing has been elicited from the complainant to believe the defence of the accused that, the legal notice caused by the complainant was sent to the wrong address of the accused. The learned counsel for the accused has specifically suggested to the complainant that, he has not produced the documents to show that, accused is 18 C.C.No. 28628/18 J residing in the address mentioned in the complaint but the complainant has specifically stated that, the legal notice which was sent by him through the post and acknowledgement was returned to him and has denied the suggestion that, the accused was not residing in the address shown by him in the complaint. It is suggested that, at the time of enlarging the bail the accused has produced his voter I.D. and he was residing in the said address but the complainant has specifically stated that, the accused was resided in the said address since long back and now he is residing in the address shown by him in the complaint. It is relevant here to mention that, though the accused has produced his photo copy of Vote I.D. at the time of filing the bail application but the said ID card was issued in the year 2008 but not pertains to the year 2018 ie., as on the date of issuance of the legal notice and the accused has not produced any documents pertains to the year 2018 to disprove the address shown by the complainant in the legal notice, therefore mere production of copy of voter I.D. at the time of releasing on bail but the said voter I.D. cannot be 19 C.C.No. 28628/18 J taken into consideration to prove the address of the accused, since the said voter I.D. has not been got marked by the accused through his evidence or by confronting the same to the complainant at the time of cross examination, therefore mere production of voter I.D. cannot be construed as a documentary evidence produced by the accused to disprove the address shown by the complainant in the legal notice or to consider the defence of the accused that, he was residing in the address shown in voter ID as on the date of issuance of legal notice or its service on the accused.
19. It is also tried to elicit from the complainant that, the address of the accused shown by the complainant in the legal notice was not correct address of the accused by relying the summons issued by this court through RPAD and it was returned with an endorsement of "Addressee left without intimation, not known R/S dt: 17.11.2018"
and the said RPAD cover was marked as Ex.D.7 and endorsement on RPAD cover marked as Ex.D.7(a). According to the accused even though the court has 20 C.C.No. 28628/18 J issued the court summons through RPAD to the accused and said summons was not served on the accused as the accused was not residing in the said address. It is also relevant here to mention that, it is true that, the summons which was issued to the accused through RPAD by the court as per Ex.D.7 and same was returned unserved with an endorsement of "Addressee left without intimation, not known R/S dt: 17.11.2018" ie., as per Ex.D.7(a). Hence, it goes to show that, the summons which was issued through RPAD to the accused was returned as unserved with an endorsement of "Addressee left without intimation, not know him R/S dt: 17.11.2018" but it cannot be held that, the address mentioned on Ex.D.7 was not the correct address of the accused and the address mentioned by the complainant in the legal notice and on Ex.P.5 ie., postal acknowledgement and address mentioned on Ex.D.7 along with attached acknowledgement are one and the same. Therefore the court has issued summons to the accused to the address of the accused which is mentioned in the legal notice and complaint. It is also relevant here to mention 21 C.C.No. 28628/18 J that, the complainant has admitted in his cross examination that, he has not produced the documents to show that, accused was residing in the address shown in the complaint but when the accused has denied the service of legal notice upon him and the address shown by the complainant as not of his correct address, the onus of proving the said fact is shifted upon the accused, in such circumstances it is for the accused to produce the documents to disprove the address mentioned by the complainant in the legal notice and on the RPAD is not of his correct address. In order to substantiate the defence of the accused, except the suggestions made to the complainant the accused did not entered into the witness box or produced any documentary proof pertaining to the year 2018 to disprove the address mentioned by the complainant in the legal notice and postal acknowledgement as same is not of his correct address, hence in view of non production of the documents by the accused it cannot be held that, the address mentioned by the complainant in the legal notice and postal acknowledgement is not correct address of the 22 C.C.No. 28628/18 J accused and complainant has not issued legal notice to the correct address of the accused, on the contrary it can be presumed that, the legal notice sent by the complainant through RPAD was to the correct address of the accused and same has been served on the accused which is evidence by documentary evidence. Therefore in view of the above said reasons it can be held that, the legal notice issued by the complainant was to the correct address of the accused and same has been served on the accused and the summons issued by this court through RPAD to the accused same has been returned with a shara that, "Addressee left without intimation, not known R/S dt: 17.11.2018", in such circumstances, it can be held that, the notice sent by the complainant to the correct address of the Accused is presumed to have been served on him U/s. 27 of General Clauses Act. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. Lingamma, wherein the Hon'ble High Court held that, "Notice 23 C.C.No. 28628/18 J sent at correct address returned unclaimed - is deemed to be served. In another decision reported in 1998 KAR 1841 in the case of Shridhar M.A. Vs. Metalloy Steel Corporation and 1999 Cri.L.J. 4606 "K. Bhaskaran Vs. Vaidhanbalan wherein the Hon'ble Apex Court was concerned with the question as to when the service of notice could be inferred and it was held that if there is an endorsement like 'not available in the house' 'house locked' 'shop closed' 'unclaimed' the service should be deemed to have been effected.
It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s. Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, "notice sent by registered post with acknowledgement to a correct addressservice of notice has to be presumed". Therefore in view of the principles of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on him 24 C.C.No. 28628/18 J since in this case also the complainant has issued notice to the accused to his correct address through registered post and the said notice was served on the accused, hence the notice issued by the complainant through registered post is held to be proper. In addition to that, it is relevant here to refer the decision reported in 2007 AIR SCW 3578 in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and another., wherein the Hon'ble Apex court held that " the drawer of the cheque is permitted to deposit the cheque amount within 15 days from the date of his appearance before the court in pursuance of the service of summons on him and in such situation, his defence of non service of the legal notice cannot be available to him'. Hence, in view of the said principles of law, even for sake of discussion, though there is no cogent and reliable documentary proof to substantiate the claim of the complainant with regard to address of the Accused to show there is due service of the legal notice on the Accused, in view of settled position of law by virtue of the above 25 C.C.No. 28628/18 J said decision of Hon'ble Apex Court of India, the Accused is not entitled to the technical defence of the alleged non service of the legal notice. Therefore, for the above said reasons, the argument convassed by the learned counsel for the accused in the written argument that, the notice issued by the complainant was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable and are not sustainable in law and with due respect to the principles of law laid down in the decision relied upon by the learned counsel for the accused are not applicable to the present facts of the case as the facts and circumstances of this case and facts and circumstances of the decided case relied upon by he learned counsel for the accused are not one and the same.
20. The accused in his defence has specifically disputed the financial capacity of the complainant and also the lending of loan amount in question to the accused and issuance of cheque by the accused 26 C.C.No. 28628/18 J toward discharge of the debt in question. In this regard the learned counsel for the accused has much cross examined on the point of production of documentary evidence to prove the source of income by the complainant and also tried to elicite that, the complainant has failed to prove his source of income since the complainant is having school going children and his family expenditure and savings and how he has arranged the loan amount in question and from whom the complainant has brought the loan amount in which place and whose presence the complainant has paid the loan amount in question and it is also elicited that, PW.1 has not pleaded the place of issuance of the cheque in his complaint and evidence and has not disclosed the fact that, he had Rs.60,000/ with him and he has arranged remaining amount of Rs.40,000/ from his friend and details of friends not disclosed in the complaint, except the above stated facts nothing has been elicited from the complainant to disbelieve the claim of the complainant. The complainant has stated that, he has paid Rs.1 Lakh to the accused on 4.3.2018 and the accused in turn agreed to repay 27 C.C.No. 28628/18 J the said loan amount within 3 months from the date of receipt of the loan amount and also specifically stated that, he has not received any interest amount from the accused and has not lend the loan amount in question on interest basis to the accused. It is true that, the complainant has admitted that, he has lent Rs.1 Lakh to the accused through cash and he had Rs.60,000/ with him in cash and arranged the remaining amount of Rs.40,000/ from his friend. But the complainant has not stated in his legal notice, complaint and evidence regarding mobilization of the funds as admitted by him in his cross examination. No doubt, this omission is on the part of the complainant might be a lapse, however it cannot be a ground to disbelieve the entire case of the complainant. If the court were to doubt the case of the complainant only because he had not pleaded regarding the source of which he having arranged funds from his friend as stated by him and subsequently lend the same to the accused then, the very purpose of inserting the presumptions u/s.118 and 139 of N.I.Act would become purposeless and futile. Therefore when the statue 28 C.C.No. 28628/18 J has already provided the presumptive value in respect of a cheque which is admittedly issued by the accused, the court cannot interpret the other facts in a way round so as to take away the very object of inserting such presumptions in the statute, therefore there is no reason for this court to doubt the case of the complainant only by lying stress on the fact that, the complainant has not pleaded in the legal notice, complaint and evidence with regard to mobilization of the funds and subsequently lend the said amount to the accused. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Bombay decided in the case of LekhRaj Sharma V.s, Yashpal Gupta., wherein it is held that "When the signature on the cheque is admitted by the accused to be his own, the non production of the witnesses by the complainant, from whom he claims to have arrange the funds so as to lend to the accused is immaterial". Therefore in view of the above said reasons the arguments canvassed by the accused in the written argument cannot be acceptable one.
29C.C.No. 28628/18 J
21. The learned counsel for accused in the argument specifically argued in length with regard to source of income ie., complainant has not produced any documentary proof to show that, he was having sufficient source of income to lend the loan amount of Rs.1 Lakh to the accused by referring the cross examination of the complainant and also complainant has not examined his friend or any other independent witnesses to substantiate that he had a part of amount with him and further has certain amount from his friend in para No.18 to 18.12 and para No.12.13 to 12.19. The arguments canvassed by the learned counsel for the accused in the above referred paras of the written argument are not sustainable in law and cannot be accepted on facts also, since as already stated in the above that, , the complainant has produced the documents ie. Ex.P.1 to P.5 and out of the said documents Ex.P.1 is the cheque in question belongs to the account of the Accused and signature found at Ex.P.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and it was dishonoured for the reason 30 C.C.No. 28628/18 J of "Funds Insufficient" as per Ex.P.2 and thereafter a legal notice was caused by the complainant as per Ex.P.3 through RPAD to the Accused and it was served on the accused as per Ex.P.5 ie., postal acknowledgement, but the Accused has not given any reply to the legal notice, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initial presumptions are available in favour of the complainant U/s.118(a) and 139 of the N.I. Act. Consequently it is for the Accused to rebut the presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even a presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused unless and until the said 31 C.C.No. 28628/18 J presumptions are rebutted by the Accused, even in the absence of documents produced by the complainant with regard to loan transaction in question and source of income. In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was an adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption 32 C.C.No. 28628/18 J 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. Further held that "Signature on the cheque was his, statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability-hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15032018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to 33 C.C.No. 28628/18 J rebut the presumption. It is further held that "
When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, " Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the 34 C.C.No. 28628/18 J accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt". It is also held that, "the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in 35 C.C.No. 28628/18 J support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in 36 C.C.No. 28628/18 J Crl. Appeal No. 2109/2017 dated: 15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the crossexamination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough". In another decision of Hon'ble Apex Court of India reported in ICL 2021(2) SC 529 in the case of M/s. Kalamani Tex Vs. P.Balasubramanian , dt: 10.02.2021 wherein the Hon'ble Apex court held that " once the accused had admitted his signatures on the cheque and deed, the trial court ought to have presumed that, the cheque was issued as 37 C.C.No. 28628/18 J consideration for legally enforceable debt" . In another decision of Hon'ble Apex Court of Indian in Crl. Appeal No.132/2020 in the case of D. K. Chandel Vs. M/s Wockhardt (L) wherein it is held that, "Production of account books / cash book may be relevant in the civil court, may not be so in the criminal case filed under Sec.138 of N.I. Act while restoring the trial court judgments, the High Court observed that "the reason given by the lower Appellate Court that, he did not bring the cash book or order book etc., could well be understood, if civil suit is tried." But may not be so in the criminal case filed under Sec.138 of N.I.Act. This is because of presumption raised in favour of holder of cheque. In another decision reported in 2017(2) AKR 527 in case of Arjun Vs. E.Shekar., wherein it is held that " Sec.138 , 139, presentation of lawful consideration Rebuttal of Burden of Proving that cheque has not been issued for any debt or liability - Is on accused - Mere plausible 38 C.C.No. 28628/18 J explanation not sufficient to disprove the complainant's case". Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, presumptions U/s.118(a) and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds and examination of the witnesses to prove the source of income were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied 39 C.C.No. 28628/18 J the mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to his account and his signature on the cheque and complainant has proved that the legal notice issued by him was served on the Accused but accused has not given any reply to the said notice, in such circumstances, presumptions have to be drawn even to the extent of existence of legally enforceable debt as per Sec.118a and 139 of N.I.Act. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the accused in the written argument in para No.18 to 18.12 and para No.12.13 to 12.19 ie., the complainant has not produced the documents to show that, he has paid Rs.1 Lakh to the accused and in turn the accused has issued the cheque in question towards discharge of the liability in question and complainant has not examined any witness ie., his friend to prove that, he has brought the amount from his friend and has not produced the documents to prove his source of income and has not stated the place of issue of cheque by the 40 C.C.No. 28628/18 J accused etc., cannot be acceptable one. With due respect to the principles of law laid down by the Hon'ble Apex Court and High Court of Karnataka in the decision relied upon by the learned counsel for the accused at para No.15(a) to 15(n) are not applicable to the defence of the accused in this case, since in this case the accused has admitted that, the cheque in question belongs to his account and signature found on the cheque is that of his signature and the complainant has proved that, he has complied all the mandatory requirements as required U/s.138(a) to (c) of N.I.Act and inspite of service of the legal notice the accused has not chosen to give reply to the legal notice , in such circumstances in view of the recent decisions of Hon'ble Apex Court of India as cited in the above and the facts and circumstances of this case and facts and circumstances of the decisions referred by the learned counsel for the accused are not one and the same.
22. It is also relevant here to mention that, the learned counsel for the accused in the written 41 C.C.No. 28628/18 J argument at para No. 15(n2) by referring Sec.269 SS, 271D of Income Tax Act argued that, as per the above referred sections any advance taken by way of loan of more than Rs.20,000/ was to be made by way of an account payee cheque only and if a person accepts any loan in contravention of provision 269 SS he shall be liable to pay penalty, therefore in the present case the complainant has admitted that, there is no hindrance for him to pay Rs.1 Lakh to the accused by way of cheque or D.D and ignored the suggestion made to him that, he know the law that, if an amount advanced by way of loan of more than Rs.20,000/ was to be made by way of cheque or D.D. , therefore on this count also the complaint filed by the complainant is liable to be dismissed as admittedly the alleged loan amount of Rs.1 Lakh was paid by the complainant by way of cash. Considering the arguments canvassed by the learned counsel for the accused and on careful perusal of the Sections referred in the written argument, it appears that, though law mandates to pay the loan amount to the accused only through cheque or D.D. if the amount paid is more than Rs.20,000/ in cash but if 42 C.C.No. 28628/18 J the amount involved is more than Rs.20,000/ paid by way of cash, in such circumstances also the law or said provisions does not speaks that, those transactions are invalid. In this regard it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2008 (5) KCCR 3371 in a case of Kempanarasimhaiah Vs. P. Rangaraju and others., wherein it is held that, "on careful reading of the above observations and also all other observations in the said judgment I could not find the Hon'ble Supreme Court having laid down that, the transactions in contravention of the said provision of Income Tax Act could be termed as the transactions opposed to the public policy so as to bring within the ambit of nonenforceable transactions. The Hon'ble Supreme Court has not laid down in the said decision that, the transactions of this nature could be termed as opposed to pubic policy and as such the same would be became legally not enforceable." Hence in the light of principal of law 43 C.C.No. 28628/18 J laid down by the Hon'ble High Court of Karnataka in the above said decision it is for the income tax authority to take the action against the person who had transacted in contravention to Sec.269 SS of Income Tax Act, but the transaction cannot be termed as opposed to public policy and legally not enforceable. In another decision of Hon'ble Bomby High Court in Crl. Appeal No.322 of 2017 decided on 25.11.2020 in a case of Pushpa Sanchala Kothari Vs. Aarti Uttam Chavan wherein it is held that, Negotiable Instrument Act 1881, Sec.138 - Income Tax Act 1961, Sec.269 SS - Criminal Procedure Code 1973, Sec.378 (4)
- Cheque dishonored - Appeal against acquittal
- the complainant has not shown the transaction in her income tax returns - no provision in Income Tax Act which makes an amount not shown in the Income Tax Returns unrecoverable - Sec.269 SS of Act 1961, does not declare all transactions of loan, by cash in excess of Rs.20,000/ as invalid, illegal or null 44 C.C.No. 28628/18 J and void - the accused cannot take benefit of such infraction by complainant to show the transaction in income tax returns - The judgment of acquittal rendered by the learned Trial Court is perverse - The impugned judgment needs to set aside - Appeal deserves to be allowed." Hence in the light of principal of law laid down by the Hon'ble High Court of Bombay, the defence of the accused in the present case cannot be acceptable one as under Sec.269 SS of the Income Tax Act does not declare all the transactions of the loan by cash in excess of Rs.20,000/ as invalid, illegal or null and void and the accused cannot take benefit of the same to escape from the liability in question. Therefore for the above said reasons though the complainant has pleaded his ignorance about the law that itself cannot be termed as the transaction in question is not enforceable and the arguments canvassed by the learned counsel for the accused in the written argument cannot be acceptable one.45
C.C.No. 28628/18 J
23. The learned counsel for the accused at
para No.13 (a) to 13 (L2) and (i) to (xi) has
specifically argued that, the material alternation in the cheque by referring the cross examination of the complainant that, the complainant has admitted that, in Ex.P.1 cheque ie., signature of the accused is in thin ink and whereas the date, payee column, amount in the words and figures are in thick ink, therefore in view of the above said admission of the complainant and in view of Sec.89 of N.I.Act there is a material alteration in the cheque by the complainant and the cheque in question is materially altered therefore it is void and the complainant cannot entertained any relief based on materially altered cheque. But on careful perusal of the cross examination of the complainant that, it is nowhere admitted by the complainant that, he has altered the cheque in question or the contents of the cheque in question are written by him on the contrary the complainant has specifically stated that, the Ex.P.1 cheque was filled and written by the accused and also denied by the suggestion made to him that, except putting the signature in english the 46 C.C.No. 28628/18 J accused has no knowledge about reading and writing of the English. It is also suggested to the complainant that, accused has not given any authority to fill up the contents of the cheque in question but the complainant has categorically stated that, the accused himself filled the contents of the cheque in question and issued to him and also denied the suggestion that, the cheque has been altered by him and produced before the court. The suggestions made by the accused to the complainant with regard to the contents of the cheque in question according to him the complainant himself altered the contents of the cheque in question and produced before the court but the accused has not produced any evidence to show that, how the cheque in question has been entered into the hands of the complainant and how the complainant has altered the contents of the cheque in question, therefore only on the basis of suggestions made to the complainant stating that, the cheque was altered by the complainant and produced before the court cannot be acceptable one since the accused has admitted that, the cheque in 47 C.C.No. 28628/18 J question belongs to his account and signature found on the cheque is that of his signature, under such circumstances statutory presumptions can be drawn infavour of the complainant as required U/s.118(a) and 139 of N.I.Act that, the cheque has been issued by the accused by filling the contents in it towards discharge of the debt not for the reasons stated by the accused in his defence and it cannot be hold that, the cheque in question is materially altered by the complainant and the burden is on the accused to prove that, cheque in question is materially altered by the complainant but in order to prove the said defence except the suggestions made to the complainant nothing has been placed before the court instead of making efforts to send Ex.P.1 cheque for handwriting expert to prove the defence of the accused, the accused wants to shift the said burden on the complainant and same cannot be acceptable one since the statutory presumptions are available in favour of the complainant U/s.118(a) and 139 of N.I.Act, therefore when the accused himself has taken specific defence that, the cheque in question is materially altered then certainly the 48 C.C.No. 28628/18 J burden is on the accused to prove it. In addition to the above, when the accused has specifically admitted his signature found at Ex.P.1(a) as that of his signature but he cannot be permitted to deny the contents of Ex.P.1 cheque by contending that, the ink used for signature of the accused is in thin ink and whereas date, payee column, amount in words and figures are in thick ink, therefore it amounts to material alteration in cheque by the complainant, on the other hand, it can be held that, once signature on the Negotiable Instrument is admitted, in that circumstances Sec.20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that " a reading of sec.20 of the act 49 C.C.No. 28628/18 J which is extracted above reveals that, the words used are ' either wholly blank or having written therein an incomplete negotiable instrument'. The instrument may be wholly blank or incomplete in a particular in either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so wide that, the party so signing is bound to be a holder in due course. Promissory notes are often executed in the name of the payer and left unfilled to be afterwards filled by the actual holder, the object being to enable the owner to pass it off to another without incurring the responsibility as an endorser. Thus, it is seen that, person in possession of an incomplete instrument in material particulars has the authority prima facie to fill it and thus the executants becomes liable to pay the amount due'. In another decision of Hon'ble High Court of Madras reported in 2005 (1) DCR 85 in the case 50 C.C.No. 28628/18 J of P.A.Thamatharan Vs. Dalmia cements (B) Ltd., wherein it is held that " Negotiable Instrument Act 1991 - Sec. 138 - dishonour of cheque - plea
-body of cheque was not written by Accused - held it is not mandatory and no law prescribes that, the body of cheque should also be written by the signatory to the cheque, a cheque could be filled up anybody and if it is signed by the account holder of the cheque'. In another decision reported in 1996 Cri. L.J.3099( Guj) :
1997 II Crimes : 1997 (I) CCR 603 wherein the Hon'ble High Court held that "no law provides that, in any case of any negotiable instrument entire body has to be written by maker or drawer only". It is further held that, " when a cheque is admittedly issued blank are incomplete and there is no dispute regarding the signature, it can be presumed that, there is an implied consent for filling up the cheque as when required by holder and get it encashed. Complaint of dishonour of such cheque cannot 51 C.C.No. 28628/18 J be held to be beyond the scope of penal provisions of Sec.138". In another decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Appeal No.1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) 52 C.C.No. 28628/18 J KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument 53 C.C.No. 28628/18 J to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law of Hon'ble Apex court of India and Hon'ble High Courts of Karnataka and Madras referred above, In the present case the Accused has admitted the signature on Negotiable Instrument i.e. cheque and he also admitted the cheque belongs to his account 54 C.C.No. 28628/18 J and signature found on the cheque is that of his signature, it is primafacie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or fabricated the cheque in question given by him and the defence of the Accused cannot be acceptable one as the instrument i.e., cheque in question cannot be rendered unenforceable merely because the contents have been filled by different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it. Therefore the defence of the accused that, the complainant has materially altered the cheque in question and produced before the court cannot be acceptable one. It is also relevant here to refer another decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from 55 C.C.No. 28628/18 J presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of presumed fact." In the present case though the Accused has denied the contents of the cheque in question but he did not proved his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I.Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden and complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is 56 C.C.No. 28628/18 J rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is 57 C.C.No. 28628/18 J towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In such circumstances even if it is assumed that, the complainant admitted that, there is difference in the ink as well as in the handwriting between the signature and the other contents of the Ex. P.1, in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the said cheque has been issued towards discharge of legally recoverable debt. Therefore for the above said reasons the arguments canvassed by the learned counsel for the accused in the written argument in respect of material alteration of the cheque in question cannot be acceptable one and with due respect to the principles of law laid down by the Hon'ble High Court of Andra Pradesh and Karnataka in the decision ie., AIR 1986 Andra Pradesh 120 and 2016(1) AKR 2011 are not applicable to the defence of the accused in this case 58 C.C.No. 28628/18 J as facts and circumstances are not one and the same and in view of the principles of law laid down by the Hon'ble Apex Court of India as referred in the above the defence argument cannot be acceptable one.
24. The learned counsel for the accused at para NO.14 and (14)(1)(a) to (14)(1)(i) has much argued regarding affidavit evidence by referring the cross examination of the PW.1 that, the affidavit evidence of the PW.1 is not administered by the Oath Commissioner/Notary and the procedure necessary particulars have not been followed by the notary and non compliance of the said requirement amounts to a defective affidavit and same cannot be acceptable in the evidence and the court will not act on defective affidavit, thus the complainant has not complied the Karnataka Civil Rules of Practice i.e, Rule 28A of Oath Act Sec.3(ii) Civil Procedure Code Sec.139 and Order 19 Rule 1, Criminal Procedure code Sec.297 Notaries Act Sec.8, therefore the affidavit evidence of the complainant cannot be acceptable one and the advocate on record had read 59 C.C.No. 28628/18 J over the contents of the affidavit evidence and knowing the contents of the same has put his signature consequently there are no valid verification has been complied by the complainant as contemplated under law, hence such void and defective evidence is eschewed from the evidence and same is not permissible under law, hence complainant is not entailed any relief as claimed in the complaint and complaint is liable to be dismissed. So far as concerned to the above stated arguments, the arguments canvassed by the learned counsel for the accused is not sustainable in law and cannot be acceptable for the simple reason that, the complainant has appeared before this court on 17.10.2018 and filed his sworn statement affidavit as record U/s.145 of N.I.Act along with the original documents and the complainant has entered the witness box had oath his administered to him and the complainant has reiterated verbatim all the averments made in the affidavit containing sworn statement and documents were marked as Ex.P.1 to P.6 and thereafter this court considering the prima facie case made out by the complainant and 60 C.C.No. 28628/18 J summons was issued to the accused. The accused has appeared through his advocate on 4.10.2019 and filed his bail application U/s.436 of Cr.P.C. for release and he was released on bail and thereafter substance of accusation was read over and explained to the accused for which the accused pleaded not guilty and claims to be tried. It is also relevant here to mention that, the accused has filed application U/s.145(2) of N.I.Act seeking permission to cross examine the complainant and said application was came to be allowed by this court and this court has specifically ordered that, in view of the principles of law laid down by the Hon'ble apex Court of India in Indian Bank Association V/s. Union of India reported in 2014(5) SCC 590, the sworn statement affidavit filed by the complainant is treated as the chief examination affidavit of the complainant. It is also relevant here to mention that, the counsel for the accused has received the copy of the complaint and sworn statement affidavit on the same day ie., on 4.10.2019 and thereafter case was posted for cross examination of the complainant ie., PW.1 and 61 C.C.No. 28628/18 J the accused has cross examined the complainant on the basis of examination chief affidavit filed by the complainant. Therefore when the complainant appeared before this court and filed his affidavit and thereafter this court has administered the oath to him and after taking the oath by the court the complainant has reiterated the entire averments made in the affidavit filed by way of sworn statement and thereafter the said affidavit itself treated as the examinationinchief affidavit of the complainant in view of the principles of the law laid down by the Hon'ble Apex court in the above referred decision it cannot be held that, the affidavit evidence of the complainant in this case is defective one for the reasons stated by the learned counsel for the accused in his written argument. It is also relevant here to mention that whatever the facts which are elicited from the complainant by the accused during the course of cross examination in respect of swearing of affidavit before the notary public and the irregularities which were elicited from the mouth of complainant cannot be based to discard the evidence of the complainant which is filed by him by way of 62 C.C.No. 28628/18 J affidavit before this court. In addition to that, the accused in this case after his appearance and this court has specifically passed an order on 4.10.2019 that the sworn statement affidavit filed by the complainant is treated as the examination in chief affidavit of the complainant in view of the principles of law laid down by the Hon'ble Apex court in the case of "Indian Bank Association Vs. Union of India", inspite of that, the accused has not challenged the said order on the other hand he has continued with the case and cross examined the complainant on the basis of the affidavit filed by the complainant and which was treated as the examination in chief, therefore when the accused has not challenged the order passed by this court and cross examined the complainant on the basis of the affidavit filed by the complainant which is treated as examination in chief by the court now he cannot be permitted to raise his defence that, the affidavit filed by the complainant in lieu of his affidavit is effective affidavit under the provisions of Notaries Act and under the provisions of Code of Civil procedure and Karnataka Civil Rules Practice 63 C.C.No. 28628/18 J and Oath Act and Sec.297 of Cr.P.C. as contended by the learned counsel for the accused in the written argument and with due respect to the principles of law laid down by the Hon'ble High Court of Karnataka relied upon by the learned counsel for the accused ie., AIR 1997 Karnataka 275 are not applicable to the present facts of the case and facts and circumstances of this case and facts and circumstances of the decided case are not one and the same.
25. It is the specific defence of the accused during the course of cross examination of the complainant and the complainant has also filed his written statement at the time of recording of statement U/s. 313 of Cr.P.C and though the accused has filed his written statement and submitted that, he had defence evidence in this case but subsequently for the reasons best known to him did not turned up before the court to lead his defence evidence. However, it is the specific defence of the accused that, he has not issued cheque in question to the complainant for clearance of any 64 C.C.No. 28628/18 J legally enforceable debt at any point of time but he has loss/misplaced the cheque in question while vacating his house long back and same is misutilized by the complainant in this case. In order to prove the defence of the accused and rebut the presumptions raised in favour of the complainant, the Accused has not entered into witness box and examined before the court, except the suggestions made to the complainant during the course of cross examination that, the accused has misplaced /loss the cheque in question while vacating his house and same has been secured by the complainant or by collecting the cheque from some third person has presented the same in this case. The careful perusal of the defence taken by the accused that, he had loss/misplaced his cheque ie., cheque in question long back while he was vacating his house and same has been collected by the complainant and by misusing the same by the complainant and filed this complaint appears to be bald defence and no prudent man can believe the defence of the accused that, the accused has loss/misplaced his cheque that too a single cheque leaf ie., Ex.P.1 since long 65 C.C.No. 28628/18 J back and subsequently same has been collected by the complainant, therefore the theory set up by the accused as a defence cannot be acceptable one and it cannot be assumed that, a single cheque leaf has been misplaced/loss by the accused while allegedly vacating his house since long back and the said cheque was secured by the complainant. Even for sake of discussion if it is assumed that, the cheque in question ie Ex.P.1 was collected by the complainant then it is the specific defence of the accused that, he is a stranger to the complainant and he has not seen the accused and for the first time he had seen the accused in the court, if that is the truth then how the complainant can came to know about the name and particulars of the accused and why he has filled up the cheque in question only for an amount of Rs.1 Lakh, these facts have to be proved by the accused himself, but except the suggestion made to the complainant nothing has been placed before the court therefore the defence taken by the accused appears to be general denial of the transaction in question not for more than that and the defence set up by the accused is without 66 C.C.No. 28628/18 J there being any proof of document or evidence. In addition to that, if really the accused has misplaced/loss his cheque in question since long back while vacating his house, in such circumstances the natural conduct of an ordinary person who has lossed or misplaced his cheque is to report the same to his bankers stating that, he has misplaced/loss his cheque leaf and if the said cheque presented same cannot be encashed ie., to give stop payment instructions to his banker but no such efforts have been made by the accused in this case as admittedly the cheque in question has been dishonoured for want of sufficient funds. Apart from that, it is also relevant here to mention that, even after receipt of the legal notice the accused has not chosen to issue reply to the said notice and after his appearance in this case has not made any efforts to initiate legal action against the complainant regarding alleged misuse of his cheque and same has been collected by the complainant and by misusing the said cheque has filed this false case against him, therefore the conduct of the accused in not taking action against the complainant for his 67 C.C.No. 28628/18 J alleged misuse of cheque in question may leads to draw an adverse inference against the accused that, he has not taken or initiative any action against the complainant for alleged misuse of cheque in question since the cheque in question has been issued by the accused to the complainant towards discharge of the debt in question not for the reason stated in his defence as presumption U/s.139 of N.I. Act would operate against him. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature -
Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the 68 C.C.No. 28628/18 J cheque is statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. Hence, the above principles of law laid down by the Hon'ble apex Court are aptly applicable to the case on hand, since in this case also though the accused has admitted cheque belongs to his account and signature on the cheque in question is that of his signature but has not produced any cogent and convicible evidence by way of leading his evidence to establish his defence ie., the theory of loss of cheque set up by him .
26. It is settled law that, the accused can rebut the presumption only on the basis of materials produced by the complainant even without entering into the witness box but in the present case the 69 C.C.No. 28628/18 J Accused has failed to substantiate his defence version in order to rebut the presumption available to the complainant and to prove the defense of the accused, under such circumstance, it is for the accused to disprove the case of the complainant or rebut the presumption then only the onus will be shifted on the complainant to prove his case. Admittedly the accused did not entered in to the witness box, therefore an adverse inference can be drawn against the accused that he has failed to rebut the presumption available to the complainant. Therefore it is clear that, except having denial of the case of the Complainant in the cross examination of complainant, the Accused has not taken any interest so as to prove his defence. In this regard, it is relevant here to refer a decision of Hon'ble Apex Court of India reported in "AIR 2018 SC 3173 in a case of Kishan Rao Vs. Shankargouda" wherein the Hon'ble Apex Court held that " Negotiable Instruments Act (26 of 1881), Ss. 138, 139 Dishonour of cheque - Presumption as to - Accused issuing cheque of Rs.2 Lakhs towards 70 C.C.No. 28628/18 J repayment of loan to Complainant said cheque dishonoured on account of insufficiency of funds Complainant proving issuance of cheque having signatures of Accused - Accused failing to rebut presumption raised against him and no evidence led by him in his support - Acquittal of Accused by High Court in revisional jurisdiction on ground of doubt in mind of Court with regard to existence of loan, improper Accused, liable to be convicted. In another decision decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is 71 C.C.No. 28628/18 J duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt. Therefore the principles of law laid down in the above decisions are aptly applicable to the case on hand, since in this case also the 72 C.C.No. 28628/18 J complainant proved the fact that he has lent loan amount of Rs.1 Lakh to the accused as hand loan in turn the accused has issued cheque in question towards repayment of the said loan amount. The accused has also failed to enter into witness box to rebut the statutory presumption in support of his defense in such circumstances the defense taken by the accused counsel during the course of cross examination and argument cannot be acceptable one and the arguments canvassed by the learned counsel for the accused in the written argument cannot be acceptable one and with due respect to the principles of law laid down by the Hon'ble Apex Court of India and Hon'ble High Courts in the decisions relied upon by the learned counsel for the accused is not applicable to the defence of the accused in this case as facts and circumstances of the said case and facts and circumstances of the present case are not one and the same.
27. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do 73 C.C.No. 28628/18 J belong to him and he has failed to explain as to how his cheque has come to the possession of the Complainant, this would also give rise to an adverse inference against him. This preposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa". In another decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the cheque entered into the hands of complainant".
Hence in the present case also the Accused has failed to explain how the cheque in question was entered into the hands of complainant. Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
28. Therefore considering all these aspects of 74 C.C.No. 28628/18 J the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, complainant has proved that, he has lent loan amount of Rs.1 Lakh to the accused and in order to discharge the said loan amount of Rs.1 Lakh the accused has issued Ex.P.1 cheque for Rs.1 Lakh in favour of the complainant and thereafter complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Funds Insufficient" and thereafter he got issued legal notice to the accused and inspite of service of the said notice, the Accused did not repaid loan amount borrowed by him, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 Cheque. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point 75 C.C.No. 28628/18 J is answered in the Affirmative.
29. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following: ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.1,55,000/ (Rupees One Lakh and Fifty Five 76 C.C.No. 28628/18 J Thousand only) in default accused shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.1,50,000/ (Rupees One Lakh and Fifty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 4th day of February 2022).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
77C.C.No. 28628/18 J ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri.H.Basavaiah
2. List of documents exhibited on behalf of the Complainant: Ex.P.1 : Original Cheque Ex.P.1(a) : Signature of the accused Ex.P.2 : Bank Memo Ex.P.3 : Office copy of the Legal Notice Ex.P.4 : Postal Receipt Ex.P.5 : Postal acknowledgement Ex.P.6 : Complaint Ex.P.6(a) : Signature of the complainant.
3. List of witness/s examined on behalf of the Accused: Nil
4. List of documents exhibited on behalf of the Accused: Ex.D.1 : Application U/s.309 of Cr.P.C dt:
3.10.2019 (marked through PW.1).
Ex.D.2 : Application U/s.70(2) of cr.P.C dt:
3.10.2019 (marked through PW.1).
Ex.D.3 : Application U/s.436 of Cr.P.C dt:
3.4.2019 (marked through PW.1).
Ex.D.4 ; Application U/s.445 of Cr.P.C dt:
3.10.2019 (marked through PW.1).78
C.C.No. 28628/18 J Ex.D.5 : Application U/s.145(2) of N.I.Act dt:
22.12.2017 (marked through PW.1).
Ex.D.6 : vakalathnama of the accused (marked through PW.1).
Ex.D.7 : RPAD returned cover (marked through PW.1).
Ex.D.7(a) : Relevant entry (marked through PW.1).
(SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
79 C.C.No. 28628/18 J