Bangalore District Court
M/S Clover Tech vs M/S Sai Neha Constructions (I) Pvt Ltd on 2 August, 2024
KABC030835132022
Presented on : 09-11-2022
Registered on : 09-11-2022
Decided on : 02-08-2024
Duration : 1 years, 8 months, 23 days
IN THE COURT OF XIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
:: PRESENT ::
SRI. VENKANNA BASAPPA HOSAMANI,
B.Com. LL.B.,(Spl.)
XIII ACJM, BENGALURU CITY.
Dated: This the 2nd day of August, 2024
C.C. NO.34907/2022
COMPLAINANT: M/s. Clover Tech.,
Having its office at No.2/16/5,
5th Main, Sreekrishna Layout,
Devarachikkanahalli,
BTM 4th Stage,
Bengaluru - 560 076.
By its Proprietor Smt. R.Showri.
Represented by GPA holder
Sri.S.Ramamurthy,
S/o Late V.G.Sundaram Naidu,
Aged about 60 years,
R/a. No.35, 2nd Floor, 16th Cross,
7th Main, Mico Layout,
BTM 2nd Stage, Bannerghatta
Road, Bengaluru - 560 076.
(Reptd. by Sri. B.V.Krishna,
Advocate)
JUDGMENT -2- C.C. 34907/2022
V/s.
ACCUSED: 1. M/s. Sai Neha Constructions
(I) Pvt. Ltd.,
Having its office at H.No.636/C,
1st Floor, 12th Cross, 7th Main,
Mico Layout, BTM 2nd Stage,
Bengaluru - 560 076.
By its Proprietor:
Sri. Neelam Shankar,
2. Sri. Neelam Shankar,
S/o Mr.Mogulaiah,
Aged about 50 years,
R/a. No.1,
"Fantasy Neha Lotus Apartments"
5th Floor, 28th Main, 4th Cross,
BTM 2nd Stage,
Bengaluru - 560 076.
(Reptd. by Sri. P.Rajasekar,
Advocate)
Offence Under Section 138 of Negotiable
Instruments Act, 1881.
Plea of the accused Pleaded not guilty
Final order ACQUITTED
*****
:: JUDGMENT ::
This is a private complaint filed by the GPA holder of the complainant against the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
JUDGMENT -3- C.C. 34907/2022
2. The factual matrix of the complainant's case are as under;
The accused No.1 is the Proprietory concern and owned by the second accused and second accused is owning and controlling the business of concern and liable for affairs of the accused No.1 firm. The father of the complainant introduced the accused to the complainant, the accused presented himself to complainant as a businessman with good reputation over a period of time the accused gained the confidence of complainant and sought financial assistance to meet his business requirements and accordingly complainant paid a sum of Rs.2,50,000/- and accused had assured the complainant that he would return the same within some time. The accused has failed to repay the said amount on repeated request of the complainant in the month of July 2022 accused had issued the cheque bearing No.182889 of Rs.2,50,000/- dated 27.07.2022 drawn on Union Bank of India, BTM Layout Branch, Bengaluru. On presentation of the said cheque, same was returned unpaid with an endorsement "Account Blocked" dated 29.07.2022. The JUDGMENT -4- C.C. 34907/2022 complainant has got issued demand notice through his counsel to the accused on 10.08.2022 calling upon the accused to repay the cheque amount within 15 days from the date of receipt of the notice. The said notice was refused by the accused on 13.08.2022 and same was received by the complainant on 17.08.2022. Inspite of that accused has failed to pay the cheque amount. Hence, the complainant has filed this present complaint.
3. In order to prove the case of the complainant, GPA holder of the complainant got examined himself as PW.1 and got marked Ex.P1 to Ex.P8. This court after taking cognizance of the offence issued summons to the accused.
4. In pursuance of the summons, accused appeared before this court and filed bail application through his counsel and got enlarged on bail. The sum and substance of the accusation has been read over to the accused and he has denied the same and not pleaded guilty and submitted that he has defence to make.
JUDGMENT -5- C.C. 34907/2022
5. After completion of evidence of the complainant side, statement under section 313 of Cr.P.C. was recorded and the incriminating evidence appearing against the accused is read over and explained to the accused and he has denied the same and he has defence evidence. The accused examined himself as DW1.
6. Heard the arguments of Sri.HSR, advocate for complainant and Sri.PR, advocate for accused. I have carefully examined the materials placed on record.
7. The following points that would arise for my consideration are;
1. Whether the complainant establishes that, the accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act?
2. What Order?
8. On perusal of materials placed on record and in the light of Arguments, my findings to the above points are as under:-
Point No.1: In the NEGATIVE
JUDGMENT -6- C.C. 34907/2022
Point No.2: As per final order for the
following;
:: R E A S O N S ::
9. POINT NO.1:- It is the specific case of the complainant is that, accused has introduced by her father, the accused gained the confidence of complainant and obtained the hand loan of Rs.2,50,000/-. For repayment of the said hand loan accused had issued Ex.P.2 cheque, on presentation of the said cheque banker had issued Ex.P.3 endorsement. Complainant got issued demand notice as per Ex.P.4, inspite of service of demand notice, the accused refused the same and has not paid the cheque amount. Hence, she pray for conviction of the accused.
10. The court can draw the presumption available under Section 139 of the Negotiable Instruments Act in favour of the complainant. The said presumption is rebuttable presumption, if once the complainant has proves initial burden lies on him, the accused ought to have rebut the case of the complainant by adducing or producing cogent, relevant and reliable evidence. If the JUDGMENT -7- C.C. 34907/2022 accused has rebutted the case of the complainant, then the onus is shifts on the complainant, then the complainant has to prove his case independently, same has been held by the Hon'ble Apex court in Rangappa V/s. Mohan AIR 2010 SCC 1898.
11. The accused has to rebut the case of the complainant with preponderance of probabilities, if the accused has rebut the case of the complainant on preponderance of probabilities, then the onus shifts on the complainant to prove his case, the same has been held in the case of Basalingappa V/s. Mudibasappa (2019) 5 SCC 418.
12. Admittedly, the complainant has to prove that, she had advanced a sum of Rs.2,50,000/- to the accused and for repayment of said amount the accused had issued Ex.P.2 cheque and on presentation of the said cheque same was returned unpaid and Banker issued has issued Ex.P.3. Inspite of issuance of demand notice as per Ex.P.4 the accused has not paid the cheque amount. Once the complainant has discharged initial burden lies on him the JUDGMENT -8- C.C. 34907/2022 accused has to rebut the same with cogent and relevant evidence. The accused is not duty bound to enter into witness box and give his evidence. But accused is liberty to enter into witness box and depose on his behalf or he can rebut the case of the complainant by effective cross- examination. But in this case accused himself examined as DW1 and denied the entire case of the complainant in his evidence.
13. The counsel for the complainant argued that, the Ex.P2 cheque and signature Ex.P.2(a) has been not disputed by the accused, complainant has complied the all necessary ingredients of the Section 138 of NI Act, hence accused is liable to be convicted.
14. On the other hand, the counsel for the accused argued that, accused has not obtained any loan from the complainant, the accused is having sufficient means of income to lead his life and to run his business. The complainant has not stated specific date of loan advanced to the accused as complainant has not advanced the loan. Further argued that, complainant is doing business of JUDGMENT -9- C.C. 34907/2022 fabrication, accused is doing business of construction of building. In this connection for purchase of fabrication accused had ordered material of Rs.2,50,000/- and issued the cheque in the name of "Clover Tech" for Rs.2,50,000/- without mentioning the date. The complainant has not supplied the goods as per purchase order. Therefore, accused had given the letter to his Banker for block his account. Without any transaction between complainant, complainant has filed the false case to get the illegal benefit from the accused without sending the demand notice to the accused and requested to acquit the accused.
15. As already stated above, the complainant has to prove the initial burden lies on him, then the court can draw the presumption in favour of the complainant if he proves the initial burden. Admittedly presumption available under Section 139 of Negotiable Instrument Act is rebuttable presumption. Only on the ground that cheque and signature on the cheque is not disputed by the accused is not a sole good ground to convict the accused. The complainant has to prove when she has advanced the huge amount of Rs.2,50,000/-. In the present case on JUDGMENT - 10 - C.C. 34907/2022 hand the complainant has no where stated the date of advancement of loan of Rs.2,50,000/-. In demand notice as well as examination-in-chief of PW1 dated of advancement of loan has been not stated. If really accused requested the hand loan to the complainant, the complainant ought to have mentioned the date of request made by the accused and date of advancement of loan in complaint, demand notice as well as examination-in-chief of PW1 filed by way of affidavit.
16. The complainant has not given any proper explanation what was the hurdle for her to mention the date of loan. This fact creates the doubt in the mind of this court that, is really the complainant advanced the hand loan of Rs.2,50,000/- to the accused. If complainant advanced the hand loan of Rs.2,50,000/- personally what was the necessity for her to receive the cheque in the name of her firm is also not properly explained by the complainant. This fact also creates the doubt in the mind of court is really complainant had advanced the hand loan. The complainant has not whispered anything about what was the mode of payment to the accused. The complainant has not clarified that, whether she had paid the JUDGMENT - 11 - C.C. 34907/2022 Rs.2,50,000/-by way of cash, cheque or other online transaction. The complainant has showed her ignorance with regard to the mode of payment of hand loan a sum of Rs.2,50,000/- to the accused. This fact also creates the doubt in the mind of the court, is really complainant had advanced the huge amount of Rs.2,50,000/- to the accused.
17. At this stage, I relied the Judgment of Hon'ble Apex Court in the case of John K. Abraham V/s. Simon C. Abraham reported in (2014) 2 SCC 236, wherein, the Hon'ble Apex Court has held that:
"Negotiable Instruments Act, 1881 - Ss.118, 139 and 138 - Dishonour of cheque - Drawing presumption undere S. 118 r/w. S. 139 - Prerequisites for, when cheque is for repayment of a loan/advanced money - Proof required on the part of complainant - Held, in order to draw presumption under S. 118 r/w. S. 139, burden lies on complainant to show : (I) that he had the requisite funds for advancing the sum of money/loan in question to accused, (ii) that the issuance of cheque by accused in support of repayment of money advanced was true, and (iii) that the accused was bound to make payment as had been agreed while issuing cheque in favour of complainant - In present case, complainant not aware of the date when substantial amount of Rs.1,50,000 was advanced by him to appellant - accused - Respondent complainant failed to produce relevant documents in support of the alleged source for advancing money to accused - Complainant also not aware as to when and where the transaction took place for which the cheque in question was issued to him by accused - Complainant also not sure as to who JUDGMENT - 12 - C.C. 34907/2022 wrote the cheque and making contradictory statements in this regard - In view of said serious defects/lacunae in evidence of complainant, judgment of High Court reversing acquittal of accused by trial court, held, was perverse and could not be sustained - Acquittal restored."
"In order to draw the presumption under Section 118 read along with Section 139 of the Negotiable Instruments Act in a case where the cheque drawn was for repayment of advanced money, the burden was heavily upon the complainant to have shown that he had the required funds for having advanced the money to the accused; that the cheque issuance of the cheque in support of the said payment advanced was true; and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant.
In the instant case, the complainant (i.e., the respondent herein) was not aware of the date when substantial amount of Rs.1,50,000 was advanced by him to the appellant, he was not sure as to who wrote the cheque, and he was not even aware when exactly and where exactly the transaction took place for which the cheque came to be issued by the appellant. The complainant once stated in his cross-examination that the cheque was in the handwriting of the accused and the very next moment he took a diametrically opposite stand that it as not in the handwriting of the accused and that it was written by the complainant himself, by further reiterating that the amount in words was written by him.
The various defects in the evidence of the complainant, as noted by the trial court, were simply brushed aside by the High Court without assigning any valid reason. Such a serious lacuna in the evidence of the complainant, which strikes at the root of a complaint under Section 138, having been noted by the trial Judge, which factor was failed to be examined by the High Court while reversing the judgment of the trial court, would vitiate the ultimate conclusion reached by the High Court. Consequently, the judgment of the High Court would amount to a perverse one. Hence, the same cannot be sustained and is set aside."
JUDGMENT - 13 - C.C. 34907/2022
18. In the present case also as earlier stated complainant has not furnished any document to show that, she has advanced the huge amount of Rs.2,50,000/-
on particular date and also she has not furnished any documents to establish that she has advanced the said amount. The complainant has not furnished statement of account or Income Tax Return documents to establish the initial burden lies on her. Hence, above quoted judgment is applicable to the present case on hand.
19. In recent judgment of Hon'ble High Court of Karnataka reported in 2024 (1) KCCR 166, S.P.Rajakumar Vs. M.J.Prabhakar held that, when the complainant failed to discharge the initial burden that amount was paid to the petitioner, the courts below ought not to have raised the presumption that, cheque was issued for discharge of legally enforceable debt. Hence, this ruling is also applicable to the present case on hand as complainant has not furnished the statement of her Bank Account and Income Tax Return.
20. The counsel for the accused had filed the application u/s.73 of Indian Evidence Act and requested to JUDGMENT - 14 - C.C. 34907/2022 compare the ink used for filling of the cheque and filling of the date on the cheque. Admittedly, this court has got ample power to the compare the disputed handwriting with the admitted handwriting. On perusal of Ex.P.2 cheque it can be seen with naked eyes that, ink used for filling the date on cheque is different and filling the particulars of the cheque is different, Hence, there is a more probability of cheque has been issued by the accused for the purpose of purchase of grill, fabrication and other materials in connection with his business and not for personal loan. If really the cheque has been issued in the month of July 2022, the accused ought to have used the same pen for filling the entire particulars of the cheque. But in this case ink used for filling the date is different from filling the other particulars of the cheque. Hence, this fact also creates the doubt in the mind of this court.
21. Another defence of the accused is that, demand notice has been not sent to his correct address and he has not received the same. DW1 in his examination-in-chief he deposed that, demand notice has been not served on him.
On perusal of the Ex.P7 and Ex.P8 it reveals that, Ex.P7 JUDGMENT - 15 - C.C. 34907/2022 was refused and returned to sender. Ex.P8 reveals that addressee left. But during the course of cross-examination of DW1, counsel for the complainant has not put any suggestion with regard to the refusal of demand notice by the accused and also he has not put any suggestion with regard to Ex.P.8 has been returned as 'addressee left'.
During the course of cross-examination of PW1 the counsel for the accused has not elicited any favourable admissions to hold that, demand notice was duly served on the accused and further during the course of cross-
examination it is not denied that DW1 was falsely deposed that, demand notice was not served on him. On this court also it can be held that, demand notice was not duly served on the accused as required u/s.138(b) of Negotiable Instrument Act, 1881. Thereby necessary ingredient of Section 138(b) of Negotiable Instrument Act, has been not complied by the complainant.
22. The complainant has filed the another case against the accused before this court in CC No.34897/2022 wherein it is alleged that, in the first week of December 2021 complainant had advanced loan of Rs.1,80,000/-. If really accused was obtained JUDGMENT - 16 - C.C. 34907/2022 Rs.2,50,000/- much prior to the obtaining Rs.1,80,000/-
what was the necessity for the complainant to advance the loan of Rs.1,80,000/- before repayment of the same. No ordinary prudent man can advance the fresh loan that too in Lakhs together before clearance of previous loan.
23. The Hon'ble Supreme Court of India has summarized the principles on Sections 118(a) and 139 of the Negotiable Instruments Act in Basalingappa V/s.
Mudibasappa (2019) 5 SCC 418. It will be relevant to reproduce the same.
"25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
JUDGMENT - 17 - C.C. 34907/2022 25.4. That it is not necessity for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
24. In order to rebut the presumption, there has to be preponderance of probabilities and probable defence which is required to be raised by accused. It is not mandatory on the part of accused that, he shall be come into witness box and lead his evidence to support his case. But the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. When once the rebuttal has been established and proved to the contrary by the accused, then burden shifts on the complainant to satisfy the court that, cheque has been issued towards legally enforceable debt or liability. But in the present case on hand the complainant has not furnished any documents except cheque in question to show that, complainant had lent Rs.2,50,000/- to the accused and accused acknowledged the receipt of the same. Hence, the complainant has failed to prove the initial burden lies on her and accused has raised the probable JUDGMENT - 18 - C.C. 34907/2022 defence that disputed cheque has been issued for purchase of grill and fabrication material from the complainant and accused has rebutted the case of the complainant. Accordingly, I am of the opinion that, the accused is not liable to repay the Ex.P2 cheque amount. Accordingly, I answer Point No.1 in the NEGATIVE.
25. POINT NO.2:- In view of the above discussion accused is not found guilty. Accordingly, I proceed to pass the following;
ORDER Acting under Section 255(1) of Cr.P.C, the accused is acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act.
Bail bond of the accused will be stand cancelled after completion of Six months from today.
(Directly dictated to the Stenographer, on computer, computerized by her, corrected and then pronounced in open court by me on this the 2nd day of August, 2024) (VENKANNA BASAPPA HOSAMANI) XIII ACJM, BENGALURU CITY.
JUDGMENT - 19 - C.C. 34907/2022
ANNEXURE
Witnesses examined on behalf of the complainant:
PW.1 : Sri. S.Rama Murthy Documents marked on behalf of the complainant:
Ex.P1 : General Power of Attorney Ex.P2 : Original Cheque Ex.P2(a) : Signature of the accused Ex.P3 : Bank Endorsement Ex.P4 : Office copy of Legal Notice Ex.P5 & 6 : Postal receipts Ex.P7 & 8 : Unserved postal covers
Witnesses examined on behalf of the accused:
DW.1 : Sri. Neelam Shankar Documents marked on behalf of the accused:
- NIL - Digitally
signed by
VENKANNA
VENKANNA B
B HOSAMANI
HOSAMANI Date:
2024.08.03
11:35:54
+0530
XIII ACJM, Bengaluru City.