Bangalore District Court
Having Its Registered Office At No.499 vs S/O Narayanaswamy on 30 March, 2021
BEFORE THE COURT OF XXIV ADDITIONAL SMALL
CAUSES JUDGE AND THE MOTOR ACCIDENT CLAIMS
TRIBUNAL & A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 30th DAY OF MARCH 2021
PRESENT: SRI.R.MAHESHA B.A.L. LLB.,
XXIV ADDL. SCJ &
ACMM & MEMBER - MACT
BENGALURU.
1. Sl. No. of the Case CC.No.20600 of 2016
2. The date of 20-11-2019
commencement of
evidence
3. The date of closing 17-02-2021
evidence
4. Name of the M/s Kapil Chits (K) Pvt Ltd.,
Complainant Having its registered office at No.499,
East End Road, Jayanagar, 9th block,
Bangalore - 560 068. Branch Jayanagar.
Represented by Legal Officer
Sri.T.Prasad.
(By Sri.S.B.S., Adv.,)
5. Name of the Mr.Manjunath.T.N.
Accused S/o Narayanaswamy,
Residing at Thadegulu.J Post,
Srinivasapura, Kolar Dist.
(By Sri.P.N.)
6. The offence U/s.138 of the Negotiable Instruments Act
complained of
7. Opinion of the Accused found guilty
judge
2 C.C.No.20600 OF 2016
SCCH-26
JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
The complainant is a Company in business of promoting and conducting chits as per the provisions of the Chit Funds Act, 1982. The accused had subscribed for a chit group bearing No.GIT02J-49 with the Ticket No.49 for a chit value of Rs.5,00,000/- payable at Rs.10,000/- p.m. over a period of 50 months at Hebbal branch. The accused became the successful bidder in auction held on 27-08-2011, for a bid value of Rs.1,75,000/- and the accused has received the prize amount of Rs.3,25,000/- on 27-10-2011 and promised to repay the future subscription amount to the complainant regularly. But, the accused has paid last payment on 3 C.C.No.20600 OF 2016 SCCH-26 September 2012 and thereafter, the accused has defaulted in payment amount and subsequently, the chit also completed its full term of 50 months. Further, when the representative of the complainant approached the accused, he had issued a cheque bearing No.216637 for Rs.4,91,000/- drawn on Canara bank, Siddalagatta Branch dated 11.4.2016 to clear the balance amount in favour of the complainant. The complainant presented the said cheque through his bankers for encashment, but the cheque was dishonoured with an endorsement dated 19-04-2016 as "Funds Insufficient''. The complainant company got issued legal notice dated 12.05.2016 calling upon the accused to make payment of the amount due, but neither the accused has replied the notice nor made payment of the amount due. Hence complainant filed this complaint.
3. At first instance, the present complaint filed before the 42nd ACMM, Bengalore on 20-06-2016 which was registered as PCR 6757/2016, thereafter sworn statement of the complainant by way of affidavit was received on 12-8- 2016, the case was registered and summons was ordered to be 4 C.C.No.20600 OF 2016 SCCH-26 issued, pursuant to which present CC number assigned. On 8-11-2017, as per notification No.ADM 1/19/2017 dated 20- 11-2017 of CMM, Bengaluru, this case is transferred to 24th ASCJ & 22nd ACMM (SCCH-26), Bengaluru. This court issued process. In response to the NBW, accused appeared through his counsel and got enlarged him on bail. Hence the case is posted for complainant evidence.
4. In order to establish his case, the Legal Officer of the complainant company himself examined as PW-1 and got marked 10 documents as Ex-P1 to 10 and closed his side.
5. Accused was examined under section 313 of Cr.P.C. incriminating material appearing in the complainant evidence was read over and explained to the accused, who denied the same, he claims to lead defence evidence. In order to establish his case, the accused examined himself as DW-1 and got marked Ex-D1 to 3 documents.
6. Heard oral arguments from both side.
7. Heard arguments of both counsel.
5 C.C.No.20600 OF 2016
SCCH-26
8. After hearing the arguments and perusal of the material placed on record, the following points arise for my consideration :-
POINTS
1. Whether the complainant has made-out the case that the accused has issued the cheque bearing No.216637 dated 11-04-2016 for Rs.4,91,000/- drawn on Canara Bank, Siddlagatta Branch, to discharge the legally enforceable debt or liability due to the complainant and on presentation of cheque it was returned without encashment with an endorsement as "Funds Insufficient'' and accused failed to make any payment within the stipulated period and thereby accused had committed an offence punishable under section 138 of N.I Act?
2. What order?
9. My answer to the above points is as follows :-
Point No.1 : Affirmative
Point No.2 : As per final order for the
following :-
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REASONS
10. POINT NO.1 :- The provision of Section 101 of the Indian Evidence Act provide that the burden of proof rests on the party who substantially asserts it and not on the party who denies it, in fact burden of proof means that a party has to prove an allegation before he is entitle to a judgment in her favour. Further law U/s 103 of Indian Evidence Act amplifies the general rule of Section 101 that the burden of proof lies on the person who asserts the affirmative of the fact in issue.
11. The burden lies on the complainant to prove the complainant complied with mandatory requirements of Section 138 of NI Act.
The three ingredients of offence U/s 138 NI Act are as under.
1. That there is a legally enforceable debt
2. That cheque was drawn from the account of bank for discharge in whole or in part of any debt or any other liability which presuppose legally enforceable debt
3. That the cheque so issued had been returned due to insufficiency of funds.
7 C.C.No.20600 OF 2016
SCCH-26 The proviso appended to the said section provides for compliance with legal requirements before the complaint/petition can be acted upon by court of law.
12. Section 118A of NI Act deals with special rule of evidence and stated that, every negotiable instrument act is deems to have been drawn for consideration. Section 139 of NI Act enables the court to presume, unless contrary is proved, that the holder of the cheque received the cheque of the nature referred in Section 138, in whole or in part, of any debt or other liability.
The presumption available U/s 118 and 139 of NI Act is rebuttal in nature, the accused can rebut the same by either entering into the witness box or effectively cross examine the complainant and his witness.
13. The case of the complainant is that accused had a subscriber for a chit group bearing No.BIT-02J-49 with the ticket No.49 for a chit value of Rs.5,00,000/- payable at Rs.10,000/-p.m. over a period of 50 months at Hebbal branch and accused became successful bidder in auction held on 27- 8 C.C.No.20600 OF 2016 SCCH-26 08-2011 and he received priced amount of Rs.3,25,000/- on 27-10-2011. Thereafter accused defaulted in paying subscription amount. Accused did not repay the future subscription amount to complainant company regularly. Therefore accused owes the complaint in all of Rs.4,91,000/-. The accused issued cheque bearingNo.216637 for a sum of Rs.4,91,000/- on 11-4-2016 drawn on Canara bank, Shidlagatta branch for repayment of the above said amount. When the said cheque was presented to the bank for encashment, the said cheque was dishonoured for the reason "Funds Insufficient". The complainant company got issued a legal notice on 12-5-2016 for demanding the cheque amount. Inspite of service of legal notice, accused did not repaid. Therefore this complaint filed.
14. In order to prove the case, one T.Prasad S/o T.Govindappa-legal officer at the office of S.Kapil Chits (K) Pvt., Ltd., and authorized person has been examined as PW-1 and documents produced as Ex-P1 to 11, 11(a) to (h) and filed his examination in chief. On perusal of entire documents, it clear 9 C.C.No.20600 OF 2016 SCCH-26 that the accused is having due chit subscription amount from chit company for Rs.4,91,000/- and for that payment accused issued cheque Ex.P1. On presentation of cheque, the same was returned with endorsement as per Ex.P2 as funds insufficient. Thereafter in spite of repeated demand by the complainant firm, the accused did not repay the subscription amount and penalty.
15. During cross examination PW.1 mainly attacked him by the accused that when subscriber defaulted in paying future subscription chit premium amount, the said firm issued notice for payment of future subscription amount. He did not produced the said notice issued to the accused. while entering membership of the chit, they did not get any security document, but he admitted they get income proof and address proof documents. PW-1 clearly stated that complainant firm having many branches in Karnataka and two branches in Bengaluru, one is in Hebbal another one is in Nagarabhavi. The present transactions took place in Hebbal branch. The main grievance of the accused is that accused having 10 C.C.No.20600 OF 2016 SCCH-26 transaction with the complainant firm in Hebbal branch, thereafterwards i.e., after 2016, the complainant firm closed the Hebbal branch office, but he did not know where the said branch transferred. Therefore he could not repay the future subscription amount. The accused suggested to PW-1 that the alleged disputed cheque was get by the complainant firm at the time of giving subscription amount. PW-1 also admitted that accused had paid 24 future subscription amount i.e, Rs.2,59,000/-. Further accused suggested that accused having another chit in the name of his wife Smt.Ambika and another chit in the name of one Venkatesh Reddy. The complainant firm adjusted the chit subscription amount from Ambika for Rs.1,40,000/- and Vekatesh Reddy for Rs.73,200/-. He paid Rs.2,59,000/-. The accused had paid nearly Rs.4,00,000/- to complainant firm, he has no due towards complainant firm and he denied Ex-P1 was not issued on 4-11-2016. It was get by the complainant firm after two months of bid when he getting successful bid amount from complainant firm and further accused suggested during cross examination that the demand notice has been not served on 11 C.C.No.20600 OF 2016 SCCH-26 him. The disputed cheque contents were filledup by complainant firm officials as their wish. The other suggestions putforth by the accused clearly denied by the PW-1.
16. To disprove the case of the complainant firm and prove his contention, the accused himself orally examined before this court as DW-1 and he produced Ex-D1 to 3. The case of the accused is that, he is the primary school teacher, he is residing in Siddarthanagara, Ward No.9, Door NO.1102, Shidlaghatta town. The complainant firm opened their branch for conducting chit business in Hebbal branch. The accused went to said office and get membership of Rs.5,00,000/- chit bearing No.BA-22J49/2011 in the year 2011. He auctioned chit for Rs.1,75,000/- and he get chit subscribed amount of Rs.3,25,000/-. But complainant firm did not gave such subscribed amount on the same day. Before giving subscribed amount, the complainant firm get cheque and some records after lapse of two months, the complainant firm gave of Rs.2,35,000/- instead of rs.3,25,000/-. He subscribed another chit for a sum of Rs.1,00,000/- in the name of his wife ie,, 12 C.C.No.20600 OF 2016 SCCH-26 Smt.Ambika chit bearing No.BIT3J/50, but he did not bid the chit in the name of his wife. He paid Rs.1,40,000/- for his wife chit. The complainant firm shifted their Hebbal branch to some other place. He gave separate letter to complainant firm for adjusting amount of his wife chit amount to his chit. The complainant firm adjusted chit amount of his wife to chit bearing No. BA-22J49/2011. One Venkatareddy -Teacher stood as surety to accused. the said Venkatareddy get membership of chit in Gowribidanur branch for a sum of Rs.1,00,000/-, they regularly paying chit subscription, he did not get chit amount. The complainant firm get chit amount of Rs.73,200/- of Venkatareddy and adjusted towards chit of accused. The accused had paid total sum of Rs.4,00,000/- towards his chit bearing No. BA-22J49/2011. Some private officials of the complainant firm came to near his house and collected future chit subscription amount but they did not gave any receipt. The accused asking return of cheque, but the said officials said that you approach complainant firm office. The alleged cheque given in the year 2011 not in the year 13 C.C.No.20600 OF 2016 SCCH-26 2016. The accused have no due towards complainant firm and he produced Ex-D1 to 3 and praying for acquittal.
17. During cross examination accused admitted that he having another chit document and he undertakes for production of documents before this court. Further he admitted that, when chit commenced, he use to reside in Thadigolu village, Srinivasapura Taluk, Kolar district. The address mentioned in Ex-D1 is correct and it is his home town. He denied the suggestion of complainant, he did not received amount sum of Rs.3,25,000/- on 21-11-2011, on 27- 11-2011 through cheque and he contended during cross examination that complainant firm gave Rs.2,30,000/-only. He did not took any legal action against complainant firm for not paying Rs.3,25,000/-. Further he admitted that he subscribed another chit from Rs.1,40,000/- out of which he started new chit in the name of his wife for Rs.90,000/-. The complainant firm regularly made entry in chit pass book and also use to gave receipts. In Ex-D1, accused had paid 23 future premium subscription amount. Further he admitted 14 C.C.No.20600 OF 2016 SCCH-26 that according to Ex-D1, he had due towards complainant firm a sum of Rs.2,70,000/-. Further he stated during cross examination that, he knew bank transactions and he did not gave any blank cheques to anybody, he denied he was become defaulter since September 2012. The complainant firm officials regularly came near school and house and asking to pay chit premium amount. Further he denied that he was not issued cheque on 11-4-2016 for a sum of Rs.4,91,000/- and he did not gave disputed cheque to complainant firm representatives. Further he admits that, he had not given any instructions to bank, not to honour cheque. Further he denied the suggestion made by the complainant firm about on 29-2-2016 the complainant firm adjusted the chit amount of Ambika and Vekatareddy. Further he admitted that one execution petition No.139/2016 pending against accused which was filed by complainant firm for execution of the decree passed by Deputy Register of chit, North zone, Bangalore. Further he stated that, he questioned the validity of execution 139/2016 before another court and he contended during cross examination that he had no liability towards 15 C.C.No.20600 OF 2016 SCCH-26 compliannt firm. The disputed cheque had been given in the year 2010 and legal notice has been not served.
18. Perused the entire materials on record it disclose that admittedly the complainant firm registered chit company it was registered and having office as mentioned in the complaint as per prescribed law. PW.1 is the legal officer and presenting complainant firm before court of law. The accused is chit member and subscriber for a chit group bearing GIT02J-49 with the ticket No.49 for a chit value of Rs.5,00,000/- payable at Rs.10,000/-p.m. over a period of 50 months. Accused had obtained the chit amount. Accused had cleared the installment till July 2011. 23 installments paid by accused from September 2010 to July 2011. He paid average Rs.2,59,000/-.
19. Thereafter accused did not paid further chit installment amount. He was having a due of Rs.4,91,000/- to chit company. Despite several oral demand he did not turned up and not pay the chit installment. The accused having due 16 C.C.No.20600 OF 2016 SCCH-26 subscription amount and penalty of Rs.4,91,000/-. Accused himself issued cheque to repay the outstanding amount of Rs.4,91,000/-. On presentation of the above cheque to the bank, same was bounced. Therefore this complaint instituted against the accused. For the bring home of guilt of the accused, the complainant firm authorized person by name Prasad has been examined PW.1 and produced document Ex.P1 to 11.
20. On perusal of Ex.P1 is minutes of the 49th meeting of the board of directors of Kapil Chits (Karnataka) Pvt., Ltd. held on 15-12-2009.One Managing Director K.Dayanandan signed Ex-P1. He attested signature of Prasad. Ex-P2 is the authorization letter issued by one M.D. on behalf of the complainant firm. As per terms of the board resolution dt.15- 12-2009, the Managing Director authorized T.Prasad legal officer to representing complainant firm before all courts. Ex- P3 is the cheque it belongs to accused, it contains signature of accused. Ex-P4 is the endorsement, the disputed cheque dishonoured for the reason of Funds Insufficient. Ex-P5 is the 17 C.C.No.20600 OF 2016 SCCH-26 legal notice issued by on the instruction of T.Prasad to accused dt.12-5-2016. Ex-P6 is the postal receipt, Ex-P7 is the postal acknowledgment, it was duly served on accused on 14-5-2016. Ex-P8 is the on demand promissory note, which was executed on 27-11-2011 by accused and one M.C.Jainendra Kumar and Venkata reddy and P.Venkateshappa and D.Gowraj. On going through Ex-P8 accused and other sureties agreed and stated that, accused received Rs.3,80,000/- in respect of ticket No.49 in chit series No.BIT02J/49 and agreed to repayable with interest at 24% p.a. to complainant firm. Ex-P9 is the entire ledger extract of group code ticket No.BITO2J-49 which is maintained by the compliannt firm, it can be seen that the chit group code Ticket No.BIT02J-49 chit was started by getting permission from competent authority, chit value is Rs.5,00,000/- monthly subscription Rs.10,000/- and said chit was commenced on 28-09-2010 and chit agreement registered on 30-05-2011. The present accused joining into this chit on 28-04-2011. The entire chit transaction details contains from 01-01-2000 to 16-08-2019. The above accused get prized money through 18 C.C.No.20600 OF 2016 SCCH-26 voucher numbers dated 27-10-2011 through cheque bearing No.30045 for sum of Rs.21,478/- and on voucher dt.21-11- 2011 though cheque No.580008 for a sum of Rs.88,450/- and through voucher dt.21-11-2011 through cheque No.30044 a sum of Rs.7,500/- and on 27-11-2011 though cheque bearing No.580007 accused get Rs.2,07,572/- from all of the above accused get from complainant firm a total sum of Rs.3,25,000/- as a chit prized amount. Further on going though Ex-P9, it can be seen that the complainant firm get four guarantors for the purpose of repayment of future subscription amount from the accused. The guarantors are M.C.Jainendra Kumar, Teacher colony, H.S. garden, Chikkaballapura-560001. Venkatareddy, Bachanahalli, Dibburwaly, Shidlaghatta Tq., Chikkaballapura-560001. Venkateshappa, Melur post, Shidlaghatta Tq., Chikkaballapura-560001. D.Gauraj Jangamakote post, Shidlaghatta, Chikkaballapura-560001. So from Ex-P9 it is clear that accused participated in bid and he get chit value of Rs.3,25,000/- through different cheques and different voucher number from the complainant firm and accused paid 19 C.C.No.20600 OF 2016 SCCH-26 subscription amount of Rs.1,89,921/- and he received dividend to a total sum of Rs.71,300/-. So accused totally paid Rs.2,61,221/- and remaining amount of Rs.2,38,779/- was due from the accused towards complainant firm. Ex-P10 is the memo of calculation furnished by A/cs officer of the complainant firm, he stated in Ex-P10 that execution petition claimed amount of Rs.4,71,925/- and additional interest on principle amount of Rs.2,73,800/- at the rate of 18% p.a. from 12-1-2016 to 11-4-2016 i.e., Rs.12,321/- and legal expense for Rs.7,754/-, total amount of Rs.4,91,000/-. He seeking include interest and legal expense along with EP claim amount. Ex-P11 is the chit agreement, the accused entered into this agreement, he put his signature on each of the page which were marked as Ex-P11(a) to 11(h). They clearly stated terms and conditions in kannada and English language, the accused being a Assistant School Teacher, he ought to gone through the terms and conditions and then he signed. The accused is not a lay man. Before putting his signature he must have knowledge about the terms and conditions of the chit agreement. So from above all documents, it is proved 20 C.C.No.20600 OF 2016 SCCH-26 before this court that accused was the chit member of complainant firm in chit sl.No.BIT02J-49, total chit installments are 50, total amount per ticket for installment Rs.10,000/-, total chit amount is Rs.5,00,000/-. The accused get only one chit in the above said series of chit. As per Ex-P9 accused get total prized money of rs.3,25,000/-. Admittedly remaining amount was not paid, accused claiming some complainant firm officials came near his house and school, he paid by way of cash, but they did not gave any receipts. In Ex- P10 there is a clear term about collecting receipts from head office within 21 days of payment in term 6 of Ex-P11. The said term is extracted here " permanents receipts are issued against payments made at counters in the foremen's office. In case of payments made to recovery staff through temporary receipts, the subscriber should insist and obtain a permanent receipt from the foremen's office within seven days of such payment. Otherwise, he/she shall make a written complaint to the foremen within 20 days of his/her payment to the recovery staff. The foremen shall not be responsible for payment made 21 C.C.No.20600 OF 2016 SCCH-26 otherwise or paid without obtaining a receipt or not making written complaint within 20 days of payment. If any, to recovery staff ". So as per Ex-P11 terms, if accused made future subscription amount to recovery staff, he get temporary receipts and he ought to get permanent receipts from foremen's office within seven days from the date of payment made and also provision made in ex-P11, if recovery staff not given temporary receipts, the accused had right report the same in writing to foreman within 21 days from the date of payment made. But in the instant case, except bald allegation made against complainant firm by the accused, during trial, he did not follow the terms and conditions of Ex- P11. He did not produced any receipts before this court regarding after get prized subscription amount, he has been regularly paying future subscription amount to complainant firm or their recovery staff. So this omission is sufficient to hold the accused was defaulter in paying future subscription amount. The accused himself produced Ex-D3 i.e., certified copy of the entire ordersheet and execution petition pending before Hon'ble City Civil Judge, CCH-11. On going the entire 22 C.C.No.20600 OF 2016 SCCH-26 ordersheet and petition, the complainant firm filed petition against accused and other guarantors before Deputy Registrar of Chits, North zone, Bangalore vide dispute number DRB/NZ/CFS/78/2013-2014. It was disposed by Deputy Registrar of Chits on 6-4-2016. The complainant firm get decree for a sum of Rs.3,40,512/- along with interest and legal expense. The above execution petition filed in the year 2016, the JDS were not appeared till 2018. The present accused is the JDR No.1. The present execution petition still pending for consideration. Hon'ble District and Sessions court ordered for attaching of salary of the accused of 1/3rd and directed garnishee to deposit 1/3rd amount of accused salary before CCH-25. So above proceedings clears that accused has due of Rs.4,71,925/- since 2015 despite directed by the CCH-25, Bangalore, accused did not deposit EP claimed amount before Hon'ble CCH-25. The conduct of accused clears being government servant, he did not complied court direction and he trying to protract EP proceedings as well as this case proceedings since 2016. During pendency of the EP petition, the accused had issued Ex-P3 for discharge of balance amount 23 C.C.No.20600 OF 2016 SCCH-26 of Rs.4,91,000/-, the same was dishonoured. The accused is liable to pay the above said amount to complainant firm.
21. The cheque is an instrument comes under the Negotiable Instrument Act. Holder in due course of the cheque, has got good title over the cheque. Therefore on the basis of the evidence of P.W.1 and documentary evidence it clearly reveals that the accused issued the cheque to the complainant firm. Therefore the complainant firm has complied all essential ingredients of Sec.138 of NI Act as stated supra. When the complainant firm complied all essential ingredients of Sec.138 of NI Act, as per Sec.139 of NI Act the cheque is issued for legally recoverable debt.
22. At this stage it is pertinent to note the Apex court decision reported in -
Hithin P Dalal Vs. Brathin Dranath Benerji
- Lakshmi Dyechem Vs. State of Gujarath and others- umar Exports Vs.Sharm Cerpets and K.N.Beena Vs. Muniyappa and others.
The Hon'ble Apex court clearly held that "onus of proving that the cheque issue was not in 24 C.C.No.20600 OF 2016 SCCH-26 discharge of any debt or any liability is on the accused drawer of the cheque, it is obligatory on courts to raise the presumption provided U/s 139 of the NI Act. The said presumption is rebuttal and can be rebutted by accused by proving the contrary by needing cogent evidence that there was no debt or liability. The Supreme Court observed that it is immaterial that the cheque is filled by any person other than drawer provided it is duly signed by the drawer. The same would not invalidate the cheque and shall attract the presumption U/s 139 of NI Act.
A meaning full reading of the provisions of Negotiable Instrument Act including in particular section 20, 87 and 139 makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless, he adduced evidence to rebut the presumption that the cheque had been issued for payment of debt or in discharge of a 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, if the cheque is otherwise valid, the penal provision of Section 138 would be attracted.
If a signed cheque voluntarily presented to a payee towards sum payment, the payee may fill up the amount and other particulars, this in itself would not invalid the cheque. The onus would still be on the accused, to prove that the cheque was not indischarge of a debt or liability by adducing evidence.
23. It is profitable to refer Hon'ble Apex Court decision -
IN THE SUPREME COURT OF INDIA IN CRIMINAL APPEAL NO. 508 OF 2019 (Arising 25 C.C.No.20600 OF 2016 SCCH-26 out of Special Leave Petition (Crl.) 1883 of 2018) ROHITBHAI JIVANLAL PATEL VS. STATE OF GUJARAT & ANR In this case Hon'ble Supreme court held that the onus on the complainant to prove his case beyond reasonable doubt by trial court these consideration and observation do not standing conformity with the presumption existing infavour of the complainant by virtue of Section 118 and 139 of NI Act and presumption is that existence of legal enforceable debt is to be presumed in favour of the complainant. When such presumption is drawn the factor 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 the if the accused has been able to rebut the presumption or not. The other observation as regards any variance in the statement of complainant and witnesses or want of knowledge about dates and other particulars of cheques.
24. Further Hon'ble Apex court clearly held that the order of acquittal on the mere ground of creation of doubt it can misplaced the assumption by the trial court. Mere creation of doubt is not sufficient to rebutted the presumption as envisaged by Section 139 of NI Act.
25. Further this court relied Hon'ble Supreme Court of India recent decision in-
26 C.C.No.20600 OF 2016
SCCH-26 Crl.Appeal No.1545/2019 Uttam Ram Vs. Devender Singh Hudan and others, decided on 17/10/2019 by division bench. The Apex court held that -
once signed cheque issued court can presumed that cheque in question drawn for consideration to holder of the cheque. The complainant proves before court regarding existence of debt. Thereafter the onus shifted on accused to prove there is no existence of legally recoverable debt, then court can hold presumption in favour of complainant is proper. Under Negotiable Instrument Act, there is clear presumption about existence of legally enforceable debt.
26. The advocate for the complainant placed and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.123/2021 arising out of special leave petition (criminal) 1876/2018 between M/s Kalamani Tex and another Vs P.Balasubramanian disposal date on 10-02- 2021 (three judges bench). In this case, Apex court held that, once signature on cheque admitted by the accused, court ought to have presume that, cheque was issued as consideration for a legally enforceable debt. 27 C.C.No.20600 OF 2016
SCCH-26
27. It is pertinent to refer and relied Hon'ble Apex court recent decision passed in Criminal Appeal No.292/21 between Sumethi Vij Vs. M/s Paramount Tech FAB Industries (Division Bench) disposed dated 9.3.2021 In this case Apex Court held that under Section 139 of the Act, a presumption is raised that holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut this presumption, facts must be adduced by the accused which on preponderance of probability (not beyond reasonable doubt as in the case of criminal offence. Must then be proved.
Further Apex court clarified that there is a mandate of presumption of consideration in terms of the provision of the act under Section 118 and 139 of Negotiable Instrument Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of section 138 of the NI Act.
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28. In present case on hand issuing of cheque is proved. In this case Ex.P3 belongs to accused and signature on Ex.P3(a) was not disputed. Ex-P5 duly served on accused as per Ex-P7. The accused clearly admitted during cross examination by complainant in page 4 in 5th to 7th line while commencing chit he use to reside in his home town i.e., Thadigolu village, Srinivasapura Tq., Kolar dist., and also admitted that the address mentioned in Ex-D1 is his home town address. So as from this admission, the defence took by the accused regarding non service of legal notice would not sustainable. The case of complainant that the accused issued cheque towards clear the balance amount. In order to show the said cheque was issued towards debt or liability. The complainant produced Ex-P1 to 11. Therefore the court is of considered opinion that the complainant firm has discharged his initial onus laid on complainant firm. When complainant firm has discharged his initial onus, presumption is raised U/S 118 A and 139 of N.I. Act and accused is obliged to rebut the statutory presumption available to the complainant. The accused has failed to raise probable defence which creates 29 C.C.No.20600 OF 2016 SCCH-26 doubts about the existence of a legally enforceable debt or liability. The defence raised by the accused remains as defence only and does not take the place of proof. Though accused has tried to rebut the statutory presumptions, he failed in his attempt for the reasons discussed supra. The accused has not rebutted the statutory presumption available to the complainant. The complainant firm had substantially proved its contention that Ex-P3 cheque was issued by the accused towards discharge of debt i.e., to clear the balance amount of Rs.4,91,000/- and on presentation of the said cheque came to be dishonoured for the reason "Funds Insufficient", thereafter having intimated about dishonour of the cheque, the accused has failed to make payment of the dishonour of the cheque amount, it had proved that accused has guilty of the offence punishable U/s 138 of NI Act. By allowing the cheque to be dishonoured without maintaining sufficient funds inspite of issuing cheque towards discharge of legally enforceable debt. Hence in the circumstance, the complainant having proved its case. Hence I answer Point No.1 in the Affirmative.
30 C.C.No.20600 OF 2016
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29. Point No.2: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. This court has power to impose both sentence of imprisonment and fine on the accused. The court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Further accused has to compensate the complainant in terms of money. In the result, I proceed to pass the following:-
ORDER By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.6,30,000/- (Rupees six lakhs thirty thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.6,20,000/- (Rupees six lakhs twenty thousand only) shall be payable to the complainant as compensation and remaining amount of Rs.10,000/- shall be defrayed as state expense. 31 C.C.No.20600 OF 2016
SCCH-26 In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith. (Dictated to the stenographer, typed by her directly on the computer, the same is corrected and then pronounced by me in the open court on this the 30th March 2021) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
ANNEXURE
WITNESSES EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW-1: T.Prasad
DOCUMENTS MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P-1: Board Resolution
Ex.P-2: Authorisation letter
Ex.P-3: Cheque
Ex.P-3 (a): Signature of the accused
Ex.P-4 : Bank endorsement
32 C.C.No.20600 OF 2016
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Ex.P-5: Legal notice
Ex.P-6: Postal receipt
Ex.P-7: Postal acknowledgement
Ex.P-8: On demand promissory note
Ex.P-8 (a): Signature of the accused
Ex.P.9: Account extract
Ex.P.10: Memo of calculation
WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
DW.1 Manjunath DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
Ex.D1 & 2: Passbooks
Ex.D3: Certified copy of Ex.Case.139/2016
(R.MAHESHA)
XXIV ADDL. SMALL CAUSES JUDGE
& A.C.M.M. BENGALURU.