Bangalore District Court
Tvs Credit Services Ltd vs Gowri.D on 30 March, 2024
KABC020327122022
IN THE COURT OF THE XX ADDITIONAL SMALL
CAUSES JUDGE AND ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE AND M.A.C.T.,
BENGALURU (SCCH-22)
PRESENT : Smt. Savitha.P.R.,
B.A.[L]., LL.B.,
XX Addl. Small Causes Judge
and A.C.M.M., Bengaluru.
DATED : This the 30th Day of March 2024.
C.C. NO.12853/2022
Complainant - M/s TVS Credit Services Ltd,
Having Head Office at,
'Chaitanya, No.12, Khader Nawaz Khan
Road, Nungambakkam, Chennai-600006.
Regional office at # 1613/31,
Vishnupriya Tower, 2nd floor,
KBG Extension, MKK Road,
Nagappa Block, Devaiah Park,
Bengaluru-560021, Represented by its
Area Legal Manager,
Ms. Kusuma Pavan Chokira,
(Rept: By Sri. Shivakumar B Gowda, Advocate)
- Versus -
SCCH-22 2 CC No.12853/2022
Accused - Mrs. Gowri.D,
S/o/C/o Lakshmipathy,
No.113, Mariyamman Kovil Street,
Melpettai, Tindivanam,
Villupuram,
Villupuram Temple- 604307.
(Rept: By Sri.Jayarama, Advocate)
Dated of Institution : 16.08.2022
The offences complied : Under Sec.138 of the
off or proved Negotiable Instrument Act
Plea of the accused : Pleaded not guilty
Date of commencement : 27.10.2022
of recording evidence.
Final Order : Accused is Convicted
Date of such order : 30.03.2024
(Savitha.P.R.)
XX ADDL.S.C.J. & A.C.M.M.,
BENGALURU.
:: JUDGMENT ::
This complaint filed under Section 200 of Cr.PC for the offence punishable under Section 138 of Negotiable Instrument Act.
2. The case of the complainant is as follows; SCCH-22 3 CC No.12853/2022 The complainant company is involved in the business of providing various loan facilities i.e., vehicle loans, mortgage loans and MSME/SME loans to prospective customers by executing terms and conditions of the loan agreement.
3. The accused approached the complainant for financial assistance of Rs. 11,62,000/- and entered into a loan agreement bearing No. TN3002UV0000311 and the accused had agreed to pay the monthly installment without any delay. But the accused has failed to pay the monthly installments.
4. On repeated request and demand the accused issued a cheque bearing No.125065 dated 08.06.2022 for a sum of Rs.5,59,823/- drawn on Tamil Nadu Mercantile Bank, Tindivanam branch in favour of complainant company towards the discharge of legal liability. But the said cheque returned unpaid for the reason 'Funds Insufficient'. Thereafter complainant got issued legal notice dated 07-07-2022 calling upon the accused to pay the above amount. The accused neither complied the notice nor replied. Hence this complaint.
5. After service of the summons, the accused appeared through her counsel and she was released on bail. Copy of the SCCH-22 4 CC No.12853/2022 complaint was furnished to the accused. The Plea was read over to the accused. She denied the accusations and submitted that she has defence to make.
6. In support of the complainant case the GPA holder by name Kusuma Pavan Chokira got examined as PW.1 and got marked 6 documents at Ex.P1 to Ex.P6.
7. Heard on complainant side, accused counsel remained absent. Hence argument by accused side taken as nil and perused the record.
8. Now the points that arise for my consideration are as follows:
1) Whether the complainant proves that the accused issued a cheque Ex.P2 towards discharge of legally enforceable debt?
2). Whether the complainant proves the guilt of the accused punishable under Section 138 of NI.Act?
3). What Order?
9. My answer to the above points are under :
Point No.1 - In the Affirmative
Point No.2 - In the Affirmative
Point No.3 - As per final order for the
following
SCCH-22 5 CC No.12853/2022
:: REASONS ::
POINT No.1 & 2:- These points are taken up together for common discussion to avoid repetition of facts.
10. The burden of proving the ingredients of Section 138 of N.I.Act is heavily on the complainant.
11. In order to constitute an offence under Section 138 of N.I.Act, the complainant has to fulfill the following requirements which are as follows.
I) Cheque should have been issued for the discharge in whole or part of any debt or other liability.
ii) Cheque should have been presented before the bank within a period of six months or within a period of its validity whichever is earlier.
Iii) The payee should have issued a legal notice in writing to the drawer of the cheque within 30 days from the date of information by the bank.
iv) After the receipt of the notice, the drawer should have failed to pay the cheque amount within 15 days from the date of the receipt of the said notice.
v) On non payment of the amount due, on the dishonored cheque within 15 days from the date of the receipt of the notice by the drawer, the complaint should have been filed by the complainant within one month from the date of expiry of the grace time of 15 days before Metropolitan Magistrate or not below the rank of JMFC.
12. For that purpose, I have gone through the SCCH-22 6 CC No.12853/2022 documentary evidence placed by the complainant. In this case, the disputed cheque which is Ex.P.2 dated 08.06.2022 which was issued by the accused in the name of the complainant for an amount of 5,59,823/- the cheque was drawn on Tamil Nadu Mercantile Bank, Tindivanam Branch. The Ex.P.3 is an endorsements given by the banker, stating that Funds Insufficient. The Ex.P.4 is the legal notice issued to the accused by the complainant. The Ex.P.5 is the postal receipt. The Ex.P6 is the postal aknowledgment.
13. Now, let us see whether the ingredients of Sec. 138 of N.I.Act is complied with. On careful scrutiny of the said provisions of law, it is clear that within 3 months from the date of issuance of cheque which is at Ex.P.2 date 08.06.2022 was presented for an encashment through, Axis Bank Ltd, Yeshwanthpura branch, Bengaluru, but the same was dishonored as per Ex.P3 dated 13.06.2022. The legal notice was issued as per Ex.P.4 dated 07.07.2022. The complaint is filed on 16.08.2022, which is within time as per the provisions of 138 of N.I.Act. Hence, the ingredients of Sec.138 of N.I.Act is complied by the complainant.
SCCH-22 7 CC No.12853/2022
14. At this juncture it is also necessary to discuss the about provision of law enshrined under the Negotiable Instrument Act which says about the presumption of law regarding Negotiable Instruments.
15. Section 139 of NI Act says about the presumption available to the holder of cheque. Under the said provision of law it is presumed that the holder of the cheque received the same in discharge of any debt or liability in whole or in part. Therefore prima face reading of the provision will reveal that a presumption in favour of the complainant in law.
16. Even under Section 118(a) of NI Act. There is presumption that every Negotiable Instrument made shall be presumed to be drawn for consideration.
17. However the presumption drawn under both the provision are rebuttable in nature. It is the right of the accused to rebut the presumption on a defence of preponderance of probability.
18. So in order to decide whether accused has sufficiently rebutted the presumption available under Section 139 and 118(a) or not can only be decided by going in to the factual SCCH-22 8 CC No.12853/2022 matrix of this case and the materials brought on record and having regard to the legal principles governing the same.
19. In order to substantiate the case of the complainant it got examined the GPA holder of the complainant company as PW.1 got marked Ex.P1 to Ex.P6. It is the contention of the complainant that since the accused has issued a cheque marked at Ex.P2 in order to pay the due amount. But the same was dishonored as per the endorsement in Ex.P3. So the complainant issued a legal notice as per Ex.P4. These documents all together shows that the accused failed to make the payment of the cheque amount which is due to the complainant.
20. Now, onus shifts on the accused to rebut the case of the complainant by placing rebuttal evidence. But the accused neither cross-examined the complainant nor led any defence evidence. Such being the case without any hesitation the court can draw presumption in favour of the complainant under Section 139 and 118(a) of the NI Act.
21. In the decision, Rangappa Vs Mohan (AIR 2010 SC 1898), Hon'ble Supreme Court has reconsidered this issue SCCH-22 9 CC No.12853/2022 and clarified that, existence of legally recoverable debt or liability is a matter of presumption under section 139 of N.I.Act. In para 14 of the Judgment the Hon'ble Supreme Court observed as here below:
''In light of these extracts, we are in agreement with the respondent-
claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of -course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption, which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While section 138 of the Act, specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is SCCH-22 10 CC No.12853/2022 largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probabile defence, which creates doubts about the existence of a legally enforceable debt or liability, the presumption can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence on his/her own."
22. In view of the above decision, now it is clear that the presumption mandated by section 139 of N.I.Act does indeed include the existence of legally enforceable debt or liability. It is a rebuttable presumption. It is open to the accused to raise the defence wherein the existence of legally enforceable debt or liability can be contested. For rebutting the presumption, the accused need not adduce evidence with SCCH-22 11 CC No.12853/2022 unduly high standard of proof but, the standard of proof for doing so with that of preponderance of probabilities. If the accused is able to raise a probable defence, which creates doubt about the existence of legally enforceable debt or liability, the onus shifts back to the complainant. It is also clear that for rebutting the presumption, accused can rely on the materials submitted by the complainant or his cross examination and he need not necessarily adduce his evidence.
23. At this juncture it is also relevant to quote the another decision in the case of K.N.Beena Vs Muniyappan reported in (2001) 8 SCC 458, it is observed and held as here under;
"under Section 118 of the NI Act, unless the contrary is proved, it is to be presumed that the negotiable instruments (including a cheque) had been made or drawn for consideration. Under Section 139, the court has to presume, unless the contrary is proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. In complaints under Section 138, the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that the cheque has not been issued for a debt or liability is on the accused.
24. So as per the ratio laid down in the above said two SCCH-22 12 CC No.12853/2022 decision the accused ought to have placed rebuttal evidence in order to rebutt the presumption available under law in favour of the complainant. But she failed to do so. Therefore court has to come to the conclusion that the accused issued a cheque to the complainant to discharge the legally enforceable debt.
25. Therefore I am of the opinion that accused is guilty of the offence punishable under Section 138 of the N.I Act. Therefore I answer point No.1 and 2 in the affirmative.
26. POINT No.3: In view of the above discussion, I proceed to pass the following:
:: ORDER ::
The accused is found guilty of the offence punishable U/s 138 of N.I.Act.
In exercise of powers conferred U/s 264 of Cr.P.C. of Cr.P.C., the accused is hereby convicted for the offence punishable U/s 138 of N.I. Act.
The accused is liable to pay Rs.5,69,823/- in favour of the complainant. In default she shall undergo S.I for a period of one year. Further, it is also ordered that out of the amount deposited by the accused, the accused shall liable to pay compensation amount of Rs.5,59,823/- to the SCCH-22 13 CC No.12853/2022 complainant U/s 357 of Cr.P.C and remaining amount of Rs.10,000/- shall be confiscated to the state towards the state expenses. Bail bond of the accused and her surety shall stands cancelled.
Furnish free copy of this Judgment to the accused.
(Dictated to the stenographer directly on the computer, typed by her, corrected by me and then pronounced in the open court on this the 30th day of March 2024.) (Savitha.P.R) XX A.S.C.J. & A.C.M.M., Bengaluru.
:: ANNEXURE ::
List of witnesses examined on behalf of the complainant:
P.W.1 - Ms. Kusuma Pavan Chokira List of witnesses examined on behalf of the accused:
- Nil -
List of documents marked on behalf of the complainant:
Ex.P.1 - Notarized copy of the GPA
Ex.P.2 - Cheque
Ex.P.2a - Signatures of accused
SCCH-22 14 CC No.12853/2022
Ex.P.3 - Bank endorsement
Ex.P.4 - Legal Notice
Ex.P.5 - Postal receipt
Ex.P.6 - Postal Acknowledgment
List of documents marked on behalf of the accused:
- Nil -
(SAVITHA.P.R) XX A.S.C.J. & A.C.M.M., BENGALURU.