Bangalore District Court
Tata Motors Finance Limited vs Nagesh on 25 April, 2019
Before the Court of XXXVI Addl.Chief Metropolitan
Magistrate at Bangalore
(SCCH-12)
Present: Shri .SIDRAM B.A, B.ED., LL.B.,
XXXVI ACMM, Bangalore.
Dated this the 25th day of April, 2019.
C.C.No.2850/2016
Complainant TATA Motors Finance Limited
Having its Regional Office at Lee
Parc Richmonde, 1st Floor, No.51,
Richmond Road,
Bangalore-560025.
Represented by its Regional Legal
Manager Mr.Naveen.N.D.
(Sri.J.C.Advocates and Legal
Consultants)
V/s.
Accused Nagesh
No.71-1, Hanchara Halli village,
Mandur Pot, Hosakote Taluka,
Near Church Bangalore Rural,
Bangalore-560067.
(Sri.Shivakumar.B., Advocate)
1. Date of commencement of offence : 15.12.2016
2. Name of the Complainant : TATA Motors Finance
Limited
3. Date of recording of the evidence : 28.06.2018
4. Date of closing of evidence : 22.03.2019
5. Offence complained of : 138 of N.I. Act
6. Opinion of the Judge : Accused found guilty
7. Complainant represented by : Sri. J.C.Advocates
8. Accused defence by : Sri.Shivkumar.B.
SCCH-12 2 C.C.2850/2016
JUDGMENT
[ The Complainant Society has filed this private complaint case against the Accused for the offence punishable U/s 138 of Negotiable Instruments Act.
2. The brief facts of the complaint are as under:
According to the Complainant, it is a Limited Company incorporated and registered under the provisions of Companies Act, 1956 and doing financial business.
3. It is further stated by the Complainant that the Complainant introduced vehicle loan facilities for the benefit of their customers. The Accused had approached the Complainant Company for vehicle loan and accordingly the Complainant Company had sanctioned the vehicle loan and Accused had agreed to repay the loan amount in EMIs. The Accused had entered into a vehicle loan Agreement bearing No.5000965223. There was a due an amount of Rs.1,51,824/- payable by the Accused and towards the said due the Accused had issued a cheque bearing No.039471 dated 05.12.2015 for Rs.1,51,824/- towards payment of due amount and assured the Complainant Company that he would maintain sufficient balance in his Account. When the said cheque presented for encashment same was dishonoured for the reason that 'Account Closed'. After dishonor of cheque Complainant got issued legal notice on 11.12.2015 through Advocate by RPAD. Said legal notice returned as unserved with an endorsement that in correct address. Inspite of issuance of legal notice Accused failed to comply the demand notice, i.e., he has not paid cheque amount. Thereby Accused has committed an offence punishable under Section 138 of N.I.Act. These facts constrained the Complainant SCCH-12 3 C.C.2850/2016 to file present complaint against the Accused for the offence punishable under Section 138 of N.I.Act.
4. After receipt of complaint, same has been registered as PCR and cognizance taken for the offence punishable under Section 138 of N.I.Act.
5. After recording the sworn statement of Complainant, process issued to the Accused.
6. Summons served upon Accused.
7. Accused appeared before this court through his Counsel and he has filed bail application under Section 436 of Cr.P.C same has been allowed and Accused is on bail during trial. Thereafter plea recorded. Accused pleaded not guilty and claimed to be tried.
8. In order to prove the case of the Complainant, one Sri. Ragavendra C.K.- Manager Collection and Authorized representative of the Complainant Finance himself got examined as P.W.1. He has filed his sworn affidavit in examination-in-chief. In which, the entire complaint averments have been reiterated. Apart from that, 11 documents got marked as Ex.P.1 to Ex.P.11.
9. The Counsel for Accused cross examined to the P.W.1 at length. After closure of Complainant evidence, Accused statement recorded. Accused denied incriminating evidence appeared against him and submitted he has got defense evidence.
10. The Accused himself got examined as D.W.1. He relied upon Ex.D.1. On behalf of Accused one document got SCCH-12 4 C.C.2850/2016 marked as Ex.D.1. The Learned Counsel for Complainant cross examined to the P.W.1 at length.
11. Heard both side.
12. Counsel for Accused submitted written Argument synopsis and some case laws. The Counsel for Accused submitted following case laws
1. The Hon'ble High Court of Karnataka reported in 2009 (2) DCR 483 in Crl.Revn.Petn. NO.1507 of 2005, decided on 27.07.2008, in the matter of Shiva Murthy V/s Amruthraj.
2. The Hon'ble Kerala High Court of reported in 2009 (2) DCR 673 in Crl.A. No.885 of 2001, decided on 02.06.20069, in the matter of C.Bhaskaran Nair V/s B. Mohanan.
13. The points that would arose for my consideration are as follows:-
1) Whether the Complainant proves that, Accused had issued a Cheque No.039471 dated 05.12.2015 for Rs.1,51,824/- drawn on HDFC Bank, Old Bus Stand Devanahalli towards payment of due amount in favour of Complainant and on presentation for encashment it was dishonored for the reasons 'Accounts Closed' and inspite of issuance of legal notice dated 11.12.2015, the Accused has not paid the Cheque amount and thereby he committed an offence punishable under Section 138 of N.I.Act?
2) What order?
14. My answer to the above points are as follows:
SCCH-12 5 C.C.2850/2016Point No.1: In the Affirmative Point No.2: As per final order for the following:
REASONS
15. Point No.1: It is the specific case of the Complainant that it is a Limited Company incorporated and registered under the provisions of Companies Act, 1956 and doing financial business.
16. It is further stated by the Complainant that the Complainant introduced vehicle loan facilities for the benefit of their customers. The Accused had approached the Complainant Company for vehicle loan and accordingly the Complainant Company had sanctioned the vehicle loan and Accused had agreed to repay the loan amount in EMIs. The Accused had entered into a vehicle loan Agreement bearing No.5000965223. There was a due an amount of Rs.1,51,824/- payable by the Accused and towards the said due the Accused had issued a cheque bearing No.039471 dated 05.12.2015 for Rs.1,51,824/- towards payment of due amount and assured the Complainant Company that he would maintain sufficient balance in his Account. When the said cheque presented for encashment same was dishonoured for the reason that 'Account Closed'. After dishonor of cheque Complainant got issued legal notice on 11.12.2015 through Advocate by RPAD. Said legal notice returned as unserved with an endorsement that in correct address. Inspite of issuance of legal notice Accused failed to comply the demand notice, i.e., he has not paid cheque amount. Thereby Accused has committed an offence punishable under Section 138 of N.I.Act. These facts constrained the Complainant SCCH-12 6 C.C.2850/2016 to file present complaint against the Accused for the offence punishable under Section 138 of N.I.Act.
17. I have perused oral and documentary evidence submitted by Complainant as well as Accused. On careful consideration of materials available on record it appears to be that, in the present case it is not in dispute that the Accused has obtained vehicle loan from the Complainant Company. It is not in dispute that the Accused has not paid entire loan amount and he paid some amount.
18. The Complainant relied upon Ex.P.1 to Ex.P.11. Those documents are as follows;
Ex.P.1 Cheque, Ex.P.1(a) Signature of Accused on Ex.P.1, Ex.P.2 Bank memo, Ex.P.3 Office Copy of Legal Notice, Ex.P.4 Postal Cover, Ex.P.5 Returned Postal Cover, Ex.P.5(a) Notice kept in Ex.P.5, Ex.P.6 GPA, Ex.P.7 Account Statement, Ex.P.8Loan-cum-Hypothecation-cum Guarantee Agreement, Ex.P.9 KYC documents, Ex.P.10 Vehicle Valuation Report and Ex.P.11 Sale Receipt.
19. According to the Complainant, there was a due an amount of Rs.1,51,824/-. In order to pay the above said due amount, the Accused had issued Ex.P.1 cheque in favour of Complainant Company on 05.12.2015 for a sum of Rs.1,51,824/-. On presentation, said cheque came to be returned as unpaid with an endorsement 'Account Closed'.
20. At this stage, it is just and necessary to say the defense of Accused. According to the Accused, he had issued 4 blank cheques in favour of Complainant at the time of availment of loan towards security to the loan. It is further SCCH-12 7 C.C.2850/2016 contended by the Accused that the Complainant Company misused the signed blank cheque and filled the amount and presented for encashment and subsequently filed a false complaint against him. It is further contended that, he has paid loan EMIs up to 3 ½ years. The Complainant Company seized the vehicle and before seizing the vehicle the Complainant Company did not issue recall notice by explaining the due amount. After dishonor of cheque demand notice not served upon him. Subsequently he has paid entire loan amount. Inspite of that Complainant Company filed a false complaint against him. It is further contended that after dishonor of cheque demand notice issued at wrong address of the Accused. The complaint is filed without complying the mandatory provision. Therefore, the present complaint is not maintainable and same is liable to be dismissed. Hence, prayed to dismiss the complaint.
21. On careful consideration of Complainant version as well as Accused version there is a dispute with regard to date of issuance of cheque. Admittedly it is not in dispute that the Ex.P.1 cheque is relating to the Accused and Ex.P.1 (a) signature is belongs to Accused. I am saying so for the reason that the D.W.1 (Accused) himself admitted that, Ex.P.1 cheque is relating to his Account maintained in his name. He further admitted that, Ex.P.1(a) is his signature.
22. Once the issuance of cheque is admitted or established by the Complainant then, the provision U/s 118 and 139 of N.I.Act will come into play. As per Section 139 of N.I.Act it shall be presumed unless the contrary is proved that, the holder of a cheque received the same in respect of the SCCH-12 8 C.C.2850/2016 nature required under Section 138 for the discharge in whole or in part or any debt or other liability. Further provision under Section 118(a) of Negotiable Instruments Act speaks regarding presumption of issuance of cheque for consideration. The provision under Section 118 and 139 of N.I.Act reads as follows;
118- Presumptions as to negotiable instruments of consideration:-
Until the contrary is proved, the following presumption shall be made -
(a) That every negotiable instrument was made or drawn for consideration, and that after such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date: that every negotiable instrument appearing a date was made or drawn on such date;
(c) xxx
(d) xxx
(e) xxx
(f) xxx
(g) That holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
Section 139 speaks as follows:-
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 in Section SCCH-12 9 C.C.2850/2016 138 for the discharge, in whole or in part, or any debt or other liability.
23. Further, in the Case Law reported in (2010)11 SCC 441 Rangappa V/s Sri.Mohan. The Hon'ble Apex Court held that, the presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebutable presumption and it is opened to the Accused to raise a defense wherein the existence of a legally enforceable debt or liability can be contested.
Head Notes A & B of Case Law reads as follows;
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 rebutable in nature-
Criminal Trial-Proof- Presumptions-
Generally.
B. Negotiable Instruments Act, 1881- Ss.138 and 139-purpose relative scope and functioning of, explained-
Rebutable presumption under S.139- Standard of proof for rebutting, stated-manner in which defence can be raised by Accused, outlined-
Reliance on prosecution materials by Accused to prove defence, held, permissible-Criminal Trial-Proof-
Burden and onus of proof-Reverse onus statutory clauses-Interpretation of-Standard of proof in such cases.
24. Recently in another Case Law reported in AIR 2018 SC 3173 in between Kishan Rao V/s Shankar Gowda, the Hon'ble Apex Court referred Rangappa V/s Sri. Mohan case SCCH-12 10 C.C.2850/2016 and held that, presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability.
25. Further, in order to prove the outstanding due the Complainant relied upon Ex.P.7 Loan Account Statement pertaining to Accused herein. As per Ex.P.7 as on 11.12.2015 there was due an amount of Rs.1,51,824/-. It is equalent to the cheque amount. According to the Complainant cheque was issued by Accused on 05.12.2015 for a sum of Rs.1,51,824/-. On the basis of oral evidence of P.W.1 and Ex.P.7 and statutory presumption available under Section 118 & 139 of N.I.Act it can be said that, the Accused had issued above said cheque in favour of Complainant towards discharge of liability on 05.12.2015.
26. In the present case there is dispute with regard to date of issuance of Ex.P.1 cheque. On Ex.P.1 the issuance date is reflecting as 05.12.2015. According to the Complainant, Accused had issued Ex.P.1 cheque on 05.12.2015. This fact is denied by the Accused contending that, he had issued above said cheque in blank form at the time of availment of loan. It is pertinent to note here it is not in dispute that the Accused had availed loan from the Complainant Company on 07.05.2012. D.W.1 Accused himself admitted that he had approached the Complainant in the year 2012 for sanctioning of loan. In the cross examination he admitted that he had availed loan of Rs.2,98,000/- from the Complainant and he had to pay EMIs of Rs.9,100/- per month commencing from 11.06.2012.
SCCH-12 11 C.C.2850/201627. As per Section 118(b) of N.I.Act, it shall be presumed that, the cheque was made or drawn on which the date reflecting on cheque. Admittedly on Ex.P.1 issuance date is reflecting as 05.12.2015. In view of oral evidence of P.W.1 and presumption under Section 118(b) of N.I.Act it shall be presumed that Ex.P.1 was issued on 05.12.2015. Of course, the above said presumption is rebuttable one.
28. Now, the burden shifts upon the Accused to rebut the said presumption and prove the fact that above cheque was issued at the time of availment of loan i.e., in the month of December 2012.
29. In order to prove the fact that, above said cheque was issued at the time of availment of loan, the Learned Counsel for Accused cross examined to the P.W.1. In the cross examination of P.W.1 at page No.4 he admitted that at the time of sanctioning the loan the Complainant Finance Company used to take KYC documents and cheques for security purpose. He further deposed before this Court saying that, he can say how many cheques have been taken from the Accused at the time of sanctioning loan by verifying the documents. Further, at the 7th page of cross examination of P.W.1 he admitted that, Ex.P.1 cheque taken by the Complainant Company at the time of sanctioning of the loan to the Accused for security purpose.
30. By considering this admission of P.W.1 at this juncture it can be said that the Accused established the fact that Ex.P.1 cheque was issued at the time of availment of loan from the Complainant Company.
SCCH-12 12 C.C.2850/201631. During the course of argument the Learned Counsel for Accused argued that the Accused had issued blank cheque in favour of Complainant at the time of availment of loan. Prior to disbursement of loan amount there was no existing debt or liability. It is pertinent to note here that the Accused has not specifically contended that, whether he has issued cheque prior to disbursement of loan amount or after disbursement of loan amount.
32. Further, the Counsel for Complainant argued that, the Accused had issued blank cheque. It is not a valid issuance of cheque. It is further contended that the Accused has not written the entire cheque. Therefore, the present complaint is not maintainable since said cheque was issued only for security purpose and not for discharge of legally enforceable debt.
33. Admittedly, the P.W.1 himself admitted that the Complainant Company taken Ex.P.1 cheque at the time of sanctioning the loan. By considering this admission of P.W.1 at this stage, it can be said that the said cheque was issued at the time of availment of loan.
34. When the Accused has issued above said cheque at the time of availment of loan then, it can be said that same was not issued towards discharge of existing liability. I am saying so for the reason that the Accused cannot anticipate himself in the year 2012 that on 05.12.2015 there would be balance amount of Rs.1,51,824/- with such anticipation he was issuing said cheque by mentioning the above said amount. Further, by considering the facts and circumstances, at this stage it can be inferred that at the time of availment of loan the Accused had SCCH-12 13 C.C.2850/2016 issued blank cheque. Further, it is pertinent note here the seal of Complainant Company name is reflecting on Ex.P.1 cheque. Obviously the Accused cannot possess seal of the Complainant Company. Therefore, he is not in position to put the seal of Complainant Company on cheque. The Complainant Company staff may have possess the seal of the Complainant Company. Probably they might have put the Complainant Company seal on Ex.P.1 cheque. This fact also strengthen the contention of Accused that he had issued blank cheque in favour of Complainant Company for security purpose.
35. Now, the question would be whether Complainant Company has authority to fill the blank cheque. To this question my answer is affirmative. For the reason that as per Section 20 of N.I.Act the Complainant Company had authority to fill in blank spaces of blank cheque? Further, such blank signed cheque would be an inchoate Negotiable Instrument. Same is valid Negotiable Instrument, because the drawer of cheque obviously delivers a duly singed inchoate cheque to the payee with a liberty to fill the blanks regarding the amount.
36. Now, another question would be whether Complainant Company has exactly mentioned due amount on cheque or mentioned higher amount than actual due amount? To this question my answer is in affirmative saying exact due amount has been mentioned on cheque. I am saying so for the following reason;
(a) In the present case it is not in dispute Accused had availed vehicle loan from the Complainant Company. It is also not in dispute entire loan amount is not repaid by the Accused.
SCCH-12 14 C.C.2850/2016The Ex.P.7 is a loan Account statement pertaining to loan Account of Accused herein. Same is maintained by Complainant Company.
(b) As per Ex.P.7 as on 12.11.2015 there was a due an amount of Rs.1,51,824/-. In the Ex.P.1 cheque date is mentioned as 05.12.2015. The balance due amount which is reflecting in Ex.P.7 same has been mentioned on cheque. It means the staff of the Complainant Company have mentioned the amount on the cheque which is reflecting in the loan Account statement. It is pertinent to note here the Accused claiming that he has paid entire loan amount. To substantiate this fact Accused has not submitted documentary evidence like payment receipt etc. If the Accused has paid entire loan amount then definitely he had to possess payment receipts. But he has not submitted those receipts. It is not the case of the Accused that though he has paid entire loan amount the Complainant Company has not issued receipts.
(c) The Counsel for Accused tried to substantiate contention of Accused that the Accused has paid entire loan amount on the basis of material produced by Complainant. Of course, it is permissible. However, on the basis of documentary evidence submitted by Complainant Company it is not possible to hold that the Accused has paid entire loan amount prior to 05.12.2015. The very Ex.P.7 speaks that there was a due an amount of Rs.1,51,1824/- prior to 05.12.2015. Therefore, by considering Ex.P.7 I am of the opinion that though the Counsel for Accused tried to establish the fact of repayment of loan amount by the Accused. But, Accused failed to establish this fact.
SCCH-12 15 C.C.2850/2016(d) Of course, Ex.P.10 and 11 go to show that the complaint, Complainant Company received amount in respect of sale of seized vehicle which is belongs to Accused herein. That amount is also reflecting in Ex.P.7. However, this fact will not support the contention of Accused that prior to 05.12.2015 Accused had paid entire loan amount for the simple reason that said vehicle sold in the year 2016 after filing of the complaint.
(e) The Counsel for Accused cross examined to the P.W.1 on number of aspects. However, P.W.1 not admitted that prior to cheque date Accused has paid entire loan amount. It is pertinent to note here during the course of cross examination P.W.1 stated before this Court saying that as per Ex.P.7 statement of Accounts as on 11.12.2015 EMI balance amount was Rs.51,955/- only. He further deposed before this Court the Complainant does not have such document which shows that as on 11.12.2015 there was a due an amount of Rs.1,51,824/-. I once again carefully had gone through the Ex.P.7 loan Account statement. The Ex.P.7 is loan Account statement from 22.05.2012 to 28.11.2016. In which, the due amount as on 12.11.2015 shown as Rs.1,51,824/-. Even if P.W.1 admitted that as on 12.11.2015 there was EMI amount of Rs.51,955/- was due his admission will not carry much weightage for the reason that the loan Account statement clearly speaks that as on 12.11.2015 there was due an amount of Rs.1,51,824/-. It is not the case of the Accused that in the loan Account statement false figure has been shown. Particularly it is not contended that he has made payment on a particular date and same has been not reflecting in the loan Account statement. Therefore, when ever there are oral and documentary evidence are available on record and if both are contradictory to each other SCCH-12 16 C.C.2850/2016 then, the documentary evidence prevails over oral evidence. For that reason regarding balance outstanding due is concerned Ex.P.7 prevails over the oral evidence of P.w.1. Apart from that, the Ex.P.7 is maintained by the Complainant during the course of its business. Therefore, at this juncture I am of the opinion that in the blank cheque which was issued by Accused the Complainant Company filled the exact figure of due amount.
37. During the course of argument the Learned Counsel for Accused relied upon one case law reported in 2011(2) DCR 349 (BOM) in between The Moti Urban Co.operative Bank Ltd V/s Vijaya Damiya Vasave.
38. I have gone through above said case law. Head note speaks as follows;
Negotiable Instruments Act, 1881-
Section 138-Blank Cheque-Scope-
held-Even assuming that the Bank had authority to fill in blank spaces in blank cheque still that trust will have to be discharged properly.
39. With due respect, I am of the opinion that said case law is not helpful to the Accused in his defense. For the reason that the Complainant of present case has mentioned the amount in cheque which is reflecting in Account statement. As stated above, the Complainant Company had authority to fill in blank spaces in the blank cheque. That authority properly and fairly exercised by the Complainant herein. Therefore, that case law is not helpful to the Accused.
40. The Learned Counsel for Accused relied upon one more case law reported in 2009(2) DCR 673 (KER) in between SCCH-12 17 C.C.2850/2016 C.Bhaskaran Nair V/s B. Mohanan. I have gone through above said case law. With due respect, said case law is not helpful to the Accused in his defense. For the reason that the facts of the present case and the facts referred in above said case law are different. The facts referred in the said case law go to show that the Accused therein has disputed the very loan transaction. By considering the given facts and circumstances, the Hon'ble Kerala High Court held that the presumption under Section 118 and 138 of N.I.Act can be canvassed only where execution of instrument is either proved or admitted etc. In the present case, the Accused admitted the loan transaction. He has paid part loan amount. He has admitted the issuance of cheque in favour of Complainant. He has admitted his signature reflecting on Ex.P.1 cheque. Therefore, by considering the facts and circumstances of the present case, I am of the opinion that above said case law is not helpful to the Accused herein to prove his defense.
41. The Counsel for Accused relied upon one more case law i.e., 2009 (1) DCR 314 KER in between Gopan V/s Tonny Varghese. I have gone through above said case law. In which, Hon'ble Kerala High Court held that if the cheque contained the signature of Accused it could not be said that the cheque drawn by him. The execution and issuance of cheque have to be proved to draw presumption. In the present case, Accused himself admitted that he has issued cheque in favour of Complainant. Of course, he established that said cheque was issued in blank form. There is no such provision in the N.I.Act which mandates that the entire Negotiable Instrument shall be written by the drawer only. Apart from that, even a drawer of the cheque issued blank cheque by putting his signature then SCCH-12 18 C.C.2850/2016 also such instrument can be considered as valid instrument for the reason that same is inchoate instrument. Inchoate instrument is recognized by the provisions of N.I.Act. Therefore, at this juncture, I am of the opinion that the above said case law is not helpful to the Accused herein.
42. The Learned Counsel for Accused relied upon one more case law reported in 2009(2) DCR 483 KAR in between Shivamurthy V/s Amrutha Raj. I have gone through above said case law. In which, the Hon'ble High Court of Karnataka held that presumption under Section 139 of N.I.act is only to the extent that cheque was drawn for discharge in full or in part of any debt or any other liability and the said presumption do not relate to the existence of legally enforceable debt or liability. At this juncture, it is just and necessary to refer a decision of Hon'ble Apex Court reported in (2010) 11 SCC 441 Rangappa V/s Sri.Mohan. In the above said decision, the Hon'ble Apex Court held that presumption mandated by Section 139 of N.I.Act includes a presumption that there exists a legally enforceable debt or liability. In view of decision of Hon'ble Apex Court, I am of the opinion that the case law relied by the Accused i.e., Shivamurthy V/s Amrutha Raj is not helpful to him in his defense.
43. The Learned Counsel for Accused relied upon another case law reported in 2013 (2) DCR 34 (ALL) in between Vinod Kumar Singh V/s Lal Saheb Singh and Another. I have gone through the above said case law. In which, the Hon'ble Allahabad High Court held that initial burden to prove the case of Complainant always on Complainant. In the Rangappa Vs Sri.Mohan case, the Hon'ble Apex Court held that presumption SCCH-12 19 C.C.2850/2016 mandated by Section 139 of N.I.Act includes a presumption that there exists a legally enforceable debt or liability. In view of observation made by the Hon'ble Apex Court at this juncture, I am of the view that the burden of rebut the statutory presumption lies upon Accused. Further, if the Accused succeed in rebuttal of the statutory presumption then once again burden of prove the case of the Complainant reshifted on Complainant. Therefore, with due respect I am of the opinion that said case law is not helpful to the Accused in the present case.
44. Counsel for Accused relied upon one more case law reported in 2009(1) DCR 611 (BOM) in between Anand Urban Co.operative Credit Society Ltd V/s Vipin Lal Chand Mehta and Another. In which, Hon'ble Bombay High Court held that, where the blank cheque issued towards security then complaint is not maintainable.
45. At this juncture, I think it is just and necessary to refer recent decision of the Hon'ble Apex Court reported in Sampelly Sathyanarayana Rao V/S Indian Renewable Energy Development Agency Ltd (Crl. Appeal No 867/2016 SLP (Crl.) 5410/2014) wherein the Hon'ble Apex Court observed that, "the question whether a post dated cheque is for discharge of debt or liability depends on the nature of transaction. If on the date of the cheque, liability or debt exists or the amount has becomes legally recoverable, the Section is attracted and not otherwise".
It is further observed by the Hon'ble Apex Court, SCCH-12 20 C.C.2850/2016 'once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonor of such cheques would fall under Section 138 of the Act. The cheques undoubtedly represent the outstanding liability'.
46. In view of observation made by the Hon'ble Apex Court in above said case law, I am of the opinion that even if said cheque was issued by Accused towards security to the loan then also complaint under section 138 of N.I.Act is maintainable provided there shall be due of loan amount as on date of cheque and that due amount is become recoverable. In the present case, Accused has availed loan from the Complainant Society and there was due as on date of cheque. That due amount reflecting on cheque. Therefore, by considering all these facts and circumstances, I am of the opinion that the contention taken by the Accused is not acceptable and same is hereby rejected and I am of the view that the present complaint is maintainable.
47. Now, it is just and necessary to consider the required ingredients to constitute the offence punishable under Section 138 of N.I.Act. The following ingredients have to be satisfied to constitute an offence punishable under Section 138 of N.I. Act.
(i) A person/drawer must have drawn a cheque on an Account maintained by him in a Bank for payment of certain amount of money to another person from out of that Account for the discharge of any debt or other liability.
(ii) The payee has to present the cheque to the Bank within a period of three SCCH-12 21 C.C.2850/2016 months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(iii) The cheque is returned by the Bank unpaid either because of the amount of money standing to the credit of the Account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that Account by an agreement made with the Bank.
(iv) The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of cheque by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of the information by him from the Bank regarding which the return of the cheque as unpaid.
(v) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
48. In the present case, the cheque has been marked as Ex.P.1. As stated above, the said cheque is relating to the Account of the Accused herein. The signature appearing on Ex.P.1 Cheque is admitted by the Accused. The said cheque is dated 05.12.2015. Ex.P.2 goes to show that, the Ex.P.1 Cheque has been presented for encashment. It means that, the said cheque has been presented within its validity period as well as within three months period. The Ex.P.2 goes to show that, the said cheque has been dishonored due to 'Account Closed' The Ex.P.3 is the copy of Legal Notice dated 11.12.2015. Ex.P.4 is Postal Receipt, Ex.P.5 is a Returned Postal cover. The legal notice has been issued within 30 days from the date of receipt of SCCH-12 22 C.C.2850/2016 information regarding dishonor of the Ex.P.1 Cheque. The legal notice which was sent to the address of the Accused returned as unserved with an endorsement 'Incorrect Address'. It is held that, legal notice served upon the Accused.
49. According to the Accused, the Complainant had issued legal notice at wrong address. Therefore, the service of notice is not a due service. Therefore, the complaint is not maintainable.
50. It is pertinent to note here in the cross examination D.W.1 admitted that in the address mentioned on Ex.P.3 legal notice door number is wrongly mentioned. Accoridng to the Accused remaining address is correct except door number. In the Ex.P.3 door number is mentioned as 71-1. The Accused submitted Ex.D.1 Aadhaar Card. According to the Accused in the Aadhaar Card his correct address is mentioned. In the Aadhaar Card door number is mentioned as 671. The Ex.P.8 is Loan-cum-Hypothecation Guarantee Agreement said to have been executed by Accused in favour of Complainant. In which, the door number of Accused is shown as 71-1. This address was furnished by Accused while taking the loan from the Complainant Company. On comparison of address mentioned on Ex.P.3 legal notice and Ex.P.8 Agreement the difference is only hypen and oblique. He has taken loan from the Complainant Company. When the time has come for repayment of loan amount then the Accused has taken hyper technical defense. If at all, Accused has changed his address then he has to intimate the financial institution for future correspondence. By considering Ex.P.8 at this juncture, I am of the opinion that the Complainant Company has issued demand notice at correct SCCH-12 23 C.C.2850/2016 address of the Accused. However, Accused evade the service of notice on one or the other pretext. The service of legal notice comes under the purview of deemed service as because there is a presumption under Section 27 General Clauses Act with regard to service of a letter sent by post. As per Section 27 of General Clauses Act when notices sent to the correct address of the Accused it is deemed to have been served even notices were returned with an endorsement 'door locked/intimation delivered and not claimed etc.
51. It is pertinent to note here, in the case law reported in 2007(3) Crimes SC in between C.C.Alavi Haji V/s Palapatty Muhammed and Another arising out of Crl.Appeal No.767/2007 (reported in Laws (SC) 2007-2-168) in which the Hon'ble Apex Court held that even if drawer of cheque has not received notice he can still make payment of cheque amount within 15 days of the receipt of summons and can absolve himself for prosecution under Section 138 of N.I.Act. If the drawer does not make payment of cheque amount within 15 days from the receipt of summons then plea of proper service of notice is not available to him. The relevant portion at Paragraph No.17. Same reads as follows;
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 under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had SCCH-12 24 C.C.2850/2016 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 under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 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.
52. On careful consideration of oral and documentary evidence it appears to be that, the Complainant has fulfilled all the requirements to constitute an offence punishable under Section 138 of N.I.Act and the complaint is also filed within its limitation period.
53. As stated above, the Complainant has established the fact that, the Accused has issued cheque for payment of loan amount and same has been bounced due to 'Account Closed'. The Complainant also established all required ingredients to constitute an offence punishable under Section 138 of N.I.Act. Further, the Accused has failed to rebut the presumption and disprove the case of the Complainant and also SCCH-12 25 C.C.2850/2016 failed to make payment of cheque amount within 15 days from the date of receipt of legal notice.
54. By considering all these oral and documentary evidence and statutory presumption available under Section 118 and 139 of N.I. Act, I am of the opinion that, the Complainant has proved the fact that the Accused has committed an offence punishable under Section 138 of N.I. Act. At the same time the Accused failed to rebut the statutory presumption which are available to the Complainant and disprove the case of the Complainant and repay cheque amount within prescribed time.
55. During the course of argument the Learned Counsel for Accused given more stress on Ex.P.8 Loan Agreement stating that same is not valid agreement. Since it does not bear the signature of Accused on all pages. Said argument is not enforceable.
56. I have perused material on record and loan agreement. In the present case, the Accused himself admitted that he has availed loan from the Complainant Company. When the Accused admitted loan transaction then question in admissibility of loan agreement cannot be considered. More over the cheque bounce cases are summary trial proceedings. In such cases there is no need to detail discussion of loan agreement. Hence, submission of Counsel for Accused is not acceptable.
57. However, after filing of the complaint, Complainant Company received vehicle sale amount and due amount is Rs.99,191/-. Therefore, by considering the facts and SCCH-12 26 C.C.2850/2016 circumstances, at this juncture, I am of the opinion that the subsequent payment has to be taken into consideration while passing judgment. Hence, I answer Point No.1 in the Affirmative.
58. Point No.2: In view of my answer to the point No.1, I proceed to pass the following:
ORDER Acting U/s 255(2) of Cr.P.C. the Accused is convicted for the offence punishable u/s 138 of N.I. Act Further, the Accused shall pay fine an amount of Rs.1,25,000/-.
In default the Accused shall undergo Simple Imprisonment for a period of six months.
Further, Out of the fine amount Rs.1,20,000/ is awarded as compensation to the Complainant.
Further the Accused shall pay compensation amount to the Complainant within one month from today.
Office to furnish a copy of judgment to the Accused at free of cost immediately.SCCH-12 27 C.C.2850/2016
The Bail bond and surety bond
executed by the Accused stands
cancelled.
(Dictated to the stenographer, transcript thereof, corrected by me and then pronounced in the open court this the 27th day of April, 2019).
(Sidaram), XI Addl. Small Causes Judge and XXXVI ACMM, Bangalore.
ANNEXURE List of the witnesses examined on behalf of Complainant :
P.W.1 Mr.Raghavendra C.K. List of the documents exhibited on behalf of Accused :
Ex.P.1 Cheque
Ex.P1(a) Signature of Accused on Ex.P.1
Ex.P2 Bank memo
Ex.P.3 Office Copy of Legal Notice
Ex.P4 Postal Cover
Ex.P5 Returned Postal Cover
Ex.P5(a) Notice kept in Ex.P.5
Ex.P6 GPA
Ex.P7 Account Statement
Ex.P8 Loan-cum-Hypothecation-cum Guarantee
Agreement
Ex.P9 KYC documents
Ex.P10 Vehicle Valuation Report
Ex.P11 Sale Receipt.
SCCH-12 28 C.C.2850/2016
List of the witnesses examined on behalf of Plaintiff :
D.W.1 Nagesh.R. List of the documents marked on behalf of Defendant :
Ex.D.1 Aadhaar Card
(SIDRAM)
XI Addl. Small Causes Judge
& XXXVI ACMM, Court of Small causes,
Bangalore.