Sri. N.Venu vs Sri. Mahesh on 20 May, 2016

[Cites 19, Cited by 0]

Bangalore District Court

Sri. N.Venu vs Sri. Mahesh on 20 May, 2016

       IN THE COURT OF XVI ADDITIONAL CHIEF
     METROPOLITAN MAGISTRATE, BENGALURU CITY
             Dated: This the 20th day of May 2016
           Present: Smt. Saraswathi.K.N, B.A.L.,LL.M.,
                 XVI Addl.C.M.M., Bengaluru City.
               JUDGEMENT U/S 355 OF Cr.P.C.,
Case No.                :    C.C. No.8711/2011
Complainant             :    Sri. N.Venu
                             S/o. B.M. Narayanaswamy
                             Aged about 36 Years
                             Occ: Business
                             R/at. No.14, 5th Main
                             1st Block, Jayanagar
                             Bangalore-560 011.

                             (Rep. by M.R.Balakrishna., Adv.,)

                             - VS -
Accused                 :    Sri. Mahesh
                             S/o. K.Venkategowda
                             Aged about 34 Years
                             R/at. No.53/45, 11th A Main
                             18th Cross, R.K.Layout
                             Padmanabhanagar
                             Bangalore-560 070.

                             Also at:

                             JMV Trade Fairz
                             No.145, 5th Main Road
                             Chamarajpet
                             Bangalore-560 018.
                             (Rep. by B.C.Avinash, Harish Adv.,)

Case instituted          :   10.01.2011
Offence complained of    :   U/s 138 of N.I. Act
                                    2
                                                    C.C.No.8711/11
Plea of accused            :   Pleaded not guilty
Final Order                :   Accused is acquitted
Date of order              :   20-05-2016

                          JUDGMENT

The Complainant has filed this complaint against the accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.

2. It is the case of the Complainant that, the accused and himself are known to each other for the past two years and he came in touch with the accused in an exhibition conducted by him at Global Energy 2009, in the month of December-2009. He was specialized in marketing innovative products. Taking advantage of his marketing skills in the field of exhibition business, the accused had entered into an exhibition business with him to conduct Industrial and Project Exhibition and Mega Entertainment events in the name and style of JMV Trade Fairz for which, on deliberation, the terms and condition were settled & reduced into a deed of partnership and signed on 10.07.2010. At the initial stage, he had paid a sum of Rs.10,86,000/- for various expenditure on different counts on different dates at the instance of the accused. But, after few months, the accused has showed hostile conduct and was not properly extending full co-operation and co-ordination for the smooth running of the firm. He had deliberations on several occasions, but the accused was evading to have discussion 3 C.C.No.8711/11 across the table. Therefore, he came to the conclusion and expressed his intention to retire from the partnership firm.

3. In order to resolve the whole issue, he had approached the accused on 26.10.2010 and upon deliberation, it was agreed and the accused has conceded his misdeeds and the irregularities in the matter of the management of the firm and on the same day, upon calculation, the accused has made unconditional statement to discharge whatever payment made by him in the partnership firm and issued a cheque bearing No.085471, dated:26.11.2010 for Rs.17,60,000/- drawn on the Indus Ind Bank Limited, Basavanagudi Branch, Bengaluru, towards the settlement of the account and assured him that, the said cheque would be honoured on its presentation and induced him to accept the same. As per the request and assurance of the accused, when he has presented the said cheque for collection through his banker, it got bounced due to the reasons "Insufficient Funds", vide bank endorsement dated:29.11.2010. Thereafter, he has issued the legal notice dated:10.12.2010 through the RPAD. The accused has received the legal notice, but even thereafter he has failed to comply either to the notice or to pay the cheque amount. Hence the present case.

4. In order to prove his case, the Complainant has examined himself as PW.1 and relied upon Ex.P1 to 7 and 4 C.C.No.8711/11 Ex.P10 to Ex.P14, Ex.P8 and Ex.P9 have been marked through DW-1.

5. After recording the sworn statement of the Complainant, the same was registered as criminal case, summons was issued to the accused, who appeared through his counsel and got enlarged on bail. The substance of the accusation was read over to him, he pleaded not guilty and claimed to be tried.

6. Thereafter, the incriminating evidence found in the evidence of the Complainant has been explained to the accused by recording his statement as required under Sec.313 of Cr.P.C., who denied the same and chose to lead his Defence evidence.

7. The accused himself examined as DW-1 and relied upon Ex.D1 to Ex.D11.

8. Heard the arguments of the learned counsel for the Complainant and the accused. Originally prior to the remand of the matter, the learned Counsel for the Accused has also filed his written arguments. I have perused the same.

9. The following points arise for my consideration:-

1. Whether the Complainant has proved beyond reasonable doubt that the accused is guilty of the offence punishable under Sec.138 of the Negotiable Instruments Act?

C.C.No.8711/11

2. If so, what Order or Sentence?

10. My findings to the above points are as under:-

Point No.1: In the Negative;

Point No.2: As per the final order for the following:-

REASONS

11. POINT No.1:- Before discussing the merits of the case, it is pertinent to observe that, admitted by the contract of partnership between the accused and the complainant herein for the purpose of conducting a Mega Entertainment event in the name of JMV Trade Fairz, which was reduced into a deed of partnership on 10.07.2010 is not denied by the parties. According to the Complainant, at the initial stage, he had invested Rs.10,86,000/- at the instance of the accused for various expenditure, in order to arrange the said entertainment event. But due to the disinterestedness of the accused and his non co-operation, he had to retire from the partnership firm. Therefore, the Complainant claims that, as per the own calculation of the accused, the latter issued the disputed cheque in his favour for a sum of Rs.17,60,000/- on 26.11.2010. But the same came to be bounced due to the reason of "Insufficient Funds" in his account.

C.C.No.8711/11

12. In order to prove his case, the Complainant by examining himself as PW1, has filed his affidavit in which he has reiterated the complaint averments.

13. In support of his oral evidence PW.1 has relied upon the following documentary evidence:-

Ex.P1 is the disputed cheque, in which PW-1 has identified the signature as that of the Accused as per Ex.P1(a), the Bank Endorsement as per Ex.P2, the copy of the legal notice as per Ex.P3, the postal receipt as per Ex.P4, the postal acknowledgment as per Ex.P5, the Partnership Deed as per Ex.P6, the complaint as per Ex.P7.

14. Subsequent to the cross-examination of PW-1 on 05.01.2015, the certified copy of the B report filed by the Chamarajpete Police Station in Cr.No.370/2010 has been marked as Ex.P10 and thereafter on 18.06.2015, five documents have been marked through PW-1 as per Ex.P10 to Ex.P14 respectively. Ex.P10 is the Vijaya Bank passbook of PW-1, Ex.P11 is the Bank challan, Ex.P12 is the statement of accounts pertaining to the HDFC Bank account of PW-1, Invoice as per Ex.P13, a letter issued by both the parties to the Manager of the HSBC Limited, Bengaluru, for the closure of the account of the firm as per Ex.P14.

C.C.No.8711/11

15. By placing reliance upon this documentary evidence, in his cross-examination, PW-1 has deposed that, he knows the accused since 2009. He came to know the accused in exhibition by name Global Energy which was organized in December 2009 in the Bengaluru Palace Grounds and the same was organized by the accused. After the said event the accused met him and offered to conduct such exhibition along with him and accordingly thereafter both of them entered into a Partnership Deed for the purpose of the development of their respective businesses and he has admitted that on 10.07.2010, a Partnership Deed was entered into and that the primary intention of the said partnership firm was to conduct an exhibition of the Solar Energy in the year 2010. With regard to extending for the purpose of organizing exhibition in the Palace ground PW-1 has pleaded ignorance and he has admitted that, he has not made the JMV Trade Fairz Company as the accused in the present case. According to PW-1, he has invested Rs.15,00,000/- in the partnership firm and out of the same, he has invested Rs.9,00,000/- through his seven cheques and the balance amount by way of cash. However, he has admitted the suggestion that, he has not produced any documents to show that, he has invested the amount either through cheques or through cash. However, he has denied the suggestion that, he has invested only Rs.4,00,000/- in the firm till date. However, he has further admitted that, in the first notice sent by him to the accused on 30.11.2010, he has 8 C.C.No.8711/11 stated that, he has invested Rs.10,80,000/-. Further, he has not been able to depose as to if there was profit/loss from the Global Energy Event 2010, since he had withdrawn from the Partnership Firm prior to the said exhibition. It is also elicited from the mouth of PW-1 that, the Global Energy Event 2010 was held from 02.12.2010 to 05.12.2010 and that he has withdrawn from the Partnership firm by issuing the notice on 30.11.2010. It is further admitted by him that, as per the terms of the Partnership Deed it was agreed that, the profit or loss incurred by the firm, ought to be divided equally between the accused and himself and according to him, there is mention in the partnership deed that, there is investment of Rs.15,00,000/- and the accused had also contributed equally to the partnership as was made by him. However PW-1 has not been able to state the total expenditure incurred for the completion of the Global Energy Project, but he has admitted that the accused and himself have worked together for four months for the purpose of the said project. When PW-1 has been confronted with the legal notice dated:30.11.2010 which is the notice issued by him for retiring from the partnership firm, he has admitted the same and therefore the said document has been marked as Ex.D1. According to him, prior to the issuance of the said notice, he has submitted his resignation letter and he has not produced the same before the Court. Further, with regard to the expenses incurred and also the investment made by both of them in the partnership firm, 9 C.C.No.8711/11 PW-1 has pleaded ignorance and he has pleaded ignorance with regard to the total expenditure incurred for conducting the event for the purpose of which, the partnership firm came into existence. Similarly he has admitted the suggestion that, till date he has not signed on the Profits and Loss Statement of the firm and even after his retirement, he has not signed on the same and he has not produced any documents to show that, he has invested Rs.15,00,000/- for the said project. According to him, the reply notice issued by the accused to him on 24.12.2010 has not been served upon him and he has admitted that, the accused is not liable to repay any loan to him personally. But, according to P.W-1 the Accused has to return the investment amount as per the Partnership Deed.

16. During the course of the further evidence of PW-1, he has produced the documents at Ex.P10 to Ex.P14, which according to him, are produced by him, in order to show that, he has invested Rs.15,00,000/- in the partnership firm and as per the entry in the passbook at Ex.P10, there is mention with regard to the amount lent by him to the accused. He has deposed before this Court that, he has transferred Rs.1,00,000/- through RTGS on 09.09.2010 in the name of the JMV Partnership Firm, but in Ex.P10 the name of the firm has not been mentioned.

17. Further PW-1 has deposed that, as per Ex.P10 to 14, he has given Rs.9,00,000/- to the accused, but there is no 10 C.C.No.8711/11 mention in the documents at Ex.P10 to Ex.P14 that there is payment of Rs.9,00,000/- personally in the name of the accused, to which PW-1 clarifies that, Rs.4,00,000/- has been transferred to the personal account of the accused. Similarly the explanation given by PW-1 with regard to the issuance of the cheque by the accused for Rs.17,16,000/- is that, he has not calculated to arrive at the said figure. But the accused himself has made the said calculation & he has claimed that, the accused is liable to pay Rs.17,16,000/- to him. Similarly, except Ex.P13, there is no document in order to prove that, P.W-1 has made payment for the purpose of the company and by looking at the document at Ex.P13, P.W-1 has admitted the suggestion that, it does not bear the seal of Lead Prints and that he has not produced the delivery challan pertaining to Ex.P13 and that it does not contain either the signature of the accused or himself or the seal of JMV Trade Fairz Co., Further, PW-1 has denied the suggestion that, there was another account pertains to JMV Trades in the Indus Ind Bank Ltd., for which the accused himself was the authorized signatory and that he has not obtained any statement of the accused in the said account and that he has no knowledge about the transaction which have taken place through the said account.

18. With this evidence in the form of cross-examination of PW-1, the accused has also led his rebuttal evidence by 11 C.C.No.8711/11 examining himself as DW-1 and it is his defence that, the complainant offered to conduct an exhibition in the Palace Grounds and for the same purpose he also offered to form a company, for which he also agreed and accordingly, the Complainant and himself by contributing equally started a partnership firm in the name of JMV Trade Fairz. Though DW- 1, two brochures in the name of Global Energy 2010 have been marked as Ex.P8 & 9 respectively. According to him, after the constitution of the firm, there was no transaction and there was only transaction of Rs.2,00,000/- and they have opened Bank Account relating to their partnership firm which is still in existence and they had decided to invest about Rs.60,00,000/- for the purpose of Global Energy Event 2010 and they had expected Rs.20,00,000/- income from said event. According to D.W-1 the complainant resigned 2 days prior to the said event & therefore he had to incurred loss, since he had to conduct the event. According to him, he had invested Rs.16,00,000/- and he has suffered loss and he has no difficulty to produce the account statement pertaining to the same.

19. The defence of the accused with regard to the disputed cheque is that, he had to give Rs.10,000/- to his friend Mahesh, in respect of which he had kept a signed blank cheque in his office & which came to be misplaced & therefore on 11.06.2010 he had given application for the stoppage 12 C.C.No.8711/11 payment to his banker. According to him, the Complainant has invested only Rs.7,00,000/- towards organizing the event and when he insisted him to invest more he assured him he would invest from the amount that would be received by him through marketing. According to him though the Complainant initially co-operated with him, but subsequently he did not co- operate. Further on 10.06.2010 his cheque bearing No.085471 (disputed cheque) was missing from his office and therefore he lodged a complaint before the Shankarpuram Police Station as per Ex.D2 & gave a letter to his banker seeking stop payment from his Bank account as per Ex.D3. He has produced the UCP receipt as per Ex.D4, Reply Notice as per Ex.D5, the postal receipt and postal acknowledgement and UCP receipt as per Ex.D6 to Ex.D8 respectively. According to him, after he came to know that, the disputed cheque was with the Complainant he had lodged a complaint against the complainant before the Chamarajapet Police Station as per Ex.D9 and obtained acknowledgement as per Ex.P10. He has further produced the reply given by him to the notice issued by the police as per the Ex.D11.

20. By relying upon this documentary evidence, the defence of the accused is that, the complainant has resigned from the partnership firm immediately before the said Global 2009 event and therefore he alone had to spend for conducting said event and therefore he is not liable to pay any amount to 13 C.C.No.8711/11 the complainant. But, instead the complainant himself is liable to pay him towards the expenses incurred for the conducting of the said event.

21. Though DW-1 has been examined at length on the ground that, he has created the copy of the complaint as per Ex.D3, nothing has been elicited from his mouth so as believable his evidence. He has further denied the suggestion that, till 15.10.2010 the Complainant has paid Rs.10,86,000/- by way of cheques and apart from that, he has also collected the amount from the complainant by way of cash.

22. This suggestion put to DW-1 by the learned counsel for the Complainant goes to show that, the Complainant has taken in-consistent pleas with regard to the alleged investment made by him to the partnership firm and he has stated different amounts as his investment amounts in the Partnership Firm. However the documentary evidence produced by PW-1 it does not substantiate the same. Though it is an admitted fact that, the police have filed B report in respect of the complaint lodged by DW-1 against the complainant, that by itself, it does not prove that, the defence of the accused cannot be believable by this Court, since the same is totally a different proceeding.

23. Though the complainant has taken up a claim that, he has invested about Rs.10,86,000/- in the partnership firm 14 C.C.No.8711/11 with the accused, there is no material placed on record to substantiate the same. Therefore, it is pertinent to note that, though the signature of the accused on the cheque is admitted, it does not go to prove the existence of the legally recoverable debt under Ex.P1. Therefore, the complainant has utterly failed to discharge the initial burden of proving the existence of the legally enforceable debt from the accused. Therefore, the initially presumption available in favour of the complainant under Sec.139 of the N.I. Act is not available in favour of the complainant in this case. On the other hand the defence of the accused is probable and reliable and sufficient to rebut the case of the complainant. In view of the aforesaid reasons and discussions, I answer this point in the Negative.

24. POINT No.2:- In view of the above reasons and discussions, I proceed to pass the following: -

ORDER By exercising the power conferred u/s 265 of Cr.P.C., the accused is hereby acquitted for the offence punishable u/s 138 of Negotiable Instruments Act.

The bail bond and surety bond of the accused stands cancelled.

C.C.No.8711/11 (Dictated to the stenographer, transcript thereof is computerized and printout taken by her, and then verified, and pronounced by me in open Court on this the 20th day of May 2016).

(SARASWATHI.K.N), XVI Addl.CMM., Bengaluru City.

ANNEXURE List of witnesses examined on behalf of the Complainant:

PW.1 : N. Venu List of documents exhibited on behalf of the Complainant:

Ex.P-1            : Cheque;
Ex.P-1 (a)        : Signature of the Accused;
Ex.P-2            : Bank Endorsement;
Ex.P-3            : Copy of the Legal Notice;
Ex.P-4            : Postal receipts;
Ex.P-5            : Postal acknowledgement;
Ex.P-6            : Partnership deed;
Ex.P-7            : Complaint;
Ex.P-8 & 9        : Brochures;
Ex.P-10           : B Report;
Ex.P-10           : Vijaya Bank passbook;
Ex.P-10(a)        : Relevant entry in the passbook;
Ex.P-11           : Bank challan;
Ex.P-12           : Bank statement;
Ex.P-13           : Invoice;
Ex.P-14           : Letter.

List of witnesses examined on behalf of the accused:

DW-1 : K.V.Mahesh.

List of documents exhibited on behalf of the accused:

C.C.No.8711/11 Ex.D1 : Legal notice;

Ex.D2 : Complaint given to the Shankarpuram Police station;

Ex.D3 : Letter to the Manger of M/s. Induslnd Bank;

Ex.D4    : UCP receipt;
Ex.D5    : Reply notice;
Ex.D6    : Postal receipt;
Ex.D7    : Postal acknowledgment;
Ex.D8    : UCP receipt;
Ex.D9    : Complaint given by the accused to the
           Chamarajapete Police Station;

Ex.D10 : Endorsement given by the Chamarajpete police to the accused;

Ex.D11 : Letter given to the Chamarajpete Police Station.

(SARASWATHI.K.N), XVI ACMM, Bengaluru City.

17 C.C.No.8711/11 18 C.C.No.8711/11 20.05.2016 Judgment pronounced in the open court vide separate judgment.

ORDER By exercising the power conferred u/s 265 of Cr.P.C., the accused is hereby acquitted for the offence punishable u/s 138 of Negotiable Instruments Act.

The bail bond and surety bond of the accused stands cancelled.

(SARASWATHI.K.N), XVI Addl.CMM., Bengaluru City.

C.C.No.8711/11 IN THE COURT OF XVI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU CITY Dated this the 4th day of January 2014 Present: Sri M.H.Sirwalkar B.A., LL.B.,(Spl.,) XVI Addl., CMM., Bengaluru.


                  JUDGEMENT U/S 355 Cr.P.C.,


Case No.          : C.C. No.5438/2009


Complainant       : Sri.K.V.Kumaraswamy S/o K.Vemanna,
                    38 yrs, R/at:No:29, Sri Krishna Motors,
                    Magadi Main Road, Govindaraja Nagar,
                    Bengaluru-560040.
                               V/s

Accused           : Sri.Promod L.P. S/o Pandurangaswamy,
                    36 yrs, No.46, 4th Block, 4th Stage, 2nd
                    Main, Basaveshwara Nagar,
                    Bengaluru-560079.
                              ---

Offence complained of : U/s 138 of N.I. Act Plea of accused : pleaded not guilty 20 C.C.No.8711/11 Final order : Accused is convicted Date of order : 4/1/2014

---

::JUDGEMENT::

This case emanates from the complaint filed by the complainant alleging that the accused has committed the offence punishable u/s 138 of NI Act.

2. The brief facts of the case of the complainant are as follows:

The complainant submits that accused has approached the complainant for hand loan for Rs.4,35,000/- for his business needs.

The complainant further contends that believing the words of the accused the complainant has paid an amount of Rs.4,35,000/-, by way of cash.

The complainant has approached the accused for repayment of loan amount for Rs.4,35,000/- the accused has issued post dated cheque bearing No:607124, dated 25/3/2008 for Rs.4,35,000/- in favour of complainant.

The complainant further submits that the complainant has presented the said cheque bearing No:607124 for encashment, but, the same was returned unpaid on 4/8/2008 because of the Account closed.

C.C.No.8711/11 The complainant further submits that thereafter, the complainant got issued the legal notice to the accused through his Advocate on 26/8/2008 and the same was duly served on the accused. Hence, the accused has committed the offence punishable u/s 138 of NI Act. By contending so, the complainant has prayed for punishing the accused as per law.

3. On presentation of the complaint this Court has taken cognizance of the offence u/s 190 of Cr.P.C. The summons was issued to the accused person. In pursuance of service of summons, the accused has put his appearance before this Court and filed bail application u/s 436 of Cr.P.C.

and the same was allowed and the accused was released on bail.

4. The copies of the prosecution papers were furnished to the accused as per section 207 of Cr.P.C. The plea was recorded under section 251 of Cr.P.C. The accusation was read over to the accused, to which he pleaded not guilty and claimed to be tried.

5. To substantiate his contentions, the complainant has examined himself as Pw.1 and got exhibited 9 documents as per Ex.p1 to p9. The side of the complainant was closed. The statement of the accused u/s 313 of Cr.P.C., has been recorded. The accused has examined himself as Dw.1 and got examined three documents as per Ex.S1 to S4.

C.C.No.8711/11

6. Arguments heard.

7. In view of the materials placed before me, the points that arise for my consideration are as follows:

1. Whether the complainant proves beyond all shadow of doubt that the accused has com-

mitted an offence punishable u/s 138 of N.I.Act?

2. What order?

8. Now, my findings to the above said points are as follows:

Point No.1: In the affirmative Point No.2: As per final order ::REASONS::

9. Point No.1: I have carefully perused the section 138 of NI Act and the law declared by the Hon'ble High Court of Karnataka in the decision reported in ILR 2008 Karnataka page 4629 between Shivamurthy V/s Amruthraj and another decision, rendered by Hon'ble Apex Court, reported in AIR 2008 Supreme Court, page 1325 between Krishna Janardhan Bhat V/s Dattatreya G. Hegde. A careful reading of section 138 of NI Act and the ratio laid down in aforesaid decisions makes it clear that the section 138 of NI Act has three ingredients, which are as follows:

1. That there is legally enforceable debt.

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2.That the cheque was drawn from the account of Bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt.

3.That the cheque so issued had been returned due to insufficiency of funds.

10. Keeping in view the ingredients of section 138 of NI Act, now, I feel that it is correct to reproduce the section

139 and 118 of NI Act here itself.

11. The section 139 of NI Act reads as follows:

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 to in section 138 for the discharge, in whole or in part, or any debt or other liability.

12. The section 118(a) of NI Act reads as follows:

Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:

a) of consideration: that every negotiable instrument was made or drawn for conside ration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotia ted or transferred for consideration.

C.C.No.8711/11

13. Keeping in view the ingredients of section 138 and the provision of section 139 and 118(a) of NI Act, now, I proceed to discuss the documents of this case.

14. I am of the opinion that I need not repeat the entire case of the complainant here also, since I have already narrated the same at the inception of this Judgement.

15. It must be noted that to substantiate his contentions, the complainant has examined himself as Pw.1 and got exhibited 9 documents as per Ex.p1 to p9. In my view it is correct to discuss about the documentary evidence here itself for the convenient sake.

16. The Ex.p1 is the original complaint. The Ex.p2 is the cheque bearing No:607124 dated 25/3/2008 for Rs.4,35,000/- drawn on Citi Bank, N.A. Branch, Bengaluru. According to complainant the Ex.p2(a) is the signature of the accused herein. A perusal of original complaint and original cheque makes it clear that they buttress the stand taken by the complainant herein.

17. The Ex.p3 is the endorsement issued by the banker which shows that the aforesaid cheque bearing No:607124 was returned unpaid on 4/8/2008 because of the Account closed.

18. It must be noted that as per clause (b) of proviso to section 138 of NI Act the complainant was required to make a demand for repayment of the said amount within 30 days 25 C.C.No.8711/11 from the date of receipt of cheque as unpaid. The Ex.p4 to p7 (Copy of legal notice and postal receipts) show that complainant made a demand, in writing, calling upon the accused to make repayment of the said loan amount by issuing notice dated 26/8/2008, which is within 30 days from the date of receipt of cheque as unpaid.

19. The Ex.p8 and p9 are the Postal acknowledgements, which show that the said legal notice got issued by the complainant was served on 28/8/2008. As per clause (c) of proviso to section 138 of NI Act the accused was entitled to have 15 days time to make the repayment of aforesaid loan amount. Thus, the complainant had to wait till 12/8/2008. Thus, the cause of action for this complaint has arisen on 12/8/2008. Further, as per section 142(b) of NI Act the complaint is to be filed within 30 days from the date on which the cause of action arises. Therefore, the complainant had to file this complaint on or after 12/8/2008 and on or before 12/9/2008. But, this complaint has been filed on 7/10/2008, and hence, the complaint is well within time. Thus, the complainant has fulfilled all the components, which were required for the completion of the offence u/s 138 of NI Act.

20. Keeping in view the documents made available on record, now, I proceed to discuss the decisions pressed into services by the accused herein itself. It must be noted that 26 C.C.No.8711/11 the accused has pressed into services of the following decisions.

1. ILR 2008 Karnataka page 4629 between Shivamurthy V/s Amruthraj.

2. AIR 2008 SC page 1325 between Krishna Janardhan Bhat V/s Dattatreya G. Hegde.

21. I have carefully perused the decisions pressed into services by the learned counsel for the accused. It must be noted that in the decisions between Shivamurthy V/s Amruthraj and between Vishwanath Pai V/s Vivekananda S. Bhat the Hon'ble High Court of Karnataka has referred and followed the ratio laid down by the Hon'ble Apex Court in the case between Krishna Janardhan Bhat V/s Dattatreya G. Hegde.

22. Further, a careful reading of the decisions between Shivamurthy V/s Amruthraj and between Vishwanath Pai V/s Vivekananda S. Bhat and Krishna Janardhan Bhat V/s Dattatreya G. Hegde it becomes clear that the Hon'ble Apex Court and the Hon'ble High Court of Karnnataka have held that even in a trial u/s 138 of NI Act the aforesaid presumptions available u/s 139 and 118(a) of NI Act cannot be raised automatically, on the other hand, the complainant has to prove the existence of legally recoverable debt. Further, it is also laid down by the Hon'ble Apex Court and Hon'ble High Court of Karnataka that even in a trial u/s 138 27 C.C.No.8711/11 of NI Act the complainant has to prove his allegations beyond all shadow of doubts, on the other hand, the accused can prove his allegations by applying the principles namely preponderance of probabilities. Besides, it is also laid down by the Hon'ble Apex Court and Hon'ble High Court of Karnataka that the word "legally recoverable debt"

includes the capacity of the complainant to pay the amount mentioned in the cheque in question.

23. Therefore, the question would be, which of those decisions is to be followed by this Court. It must be noted that as per Article:141 of Constitution of India the law laid down by the Hon'ble Apex Court is binding on all the lower Courts which are functioning in the territory of India. Therefore, both the aforesaid decisions are binding on this Court. Thus, the question is, which of these two decisions is to be followed by this Court. Fortunately a decision rendered by the Hon'ble High Court of Karnataka comes to the rescue of this Court. In other words, in the decision reported in AIR 1980 Karnataka page 92 between Govind Naik S. Kalghataki V/s West Patent Press Ltd., the Hon'ble High Court of Karnataka had an occasion to discuss about the law of precedents. In this decision the Hon'ble High Court of Karnataka has held as follows:

If two decisions of the Supreme Court do not reconcile on a particular question of law 28 C.C.No.8711/11 then the decision rendered by the Bench con sisting of more number of Hon'ble Judges of the Supreme Court is to be followed. Fur ther, If those two decisions of the Supreme Court have been rendered by the Benches consisting of equal number of Hon'ble Jud ges of the Supreme Court then latest of the two decisions is to be followed.

24. Again I repeat, in this decision between Rangappa V/s Mohan the Hon'ble Apex Court has held that once the execution of negotiable instrument is either proved or admitted, then the Court shall draw a presumption to the effect that the said negotiable instrument has been drawn for valid consideration and the legally recoverable debt was in existence.

25. Keeping in view this position of law, now, I proceed to discuss that whether the cheque in question is belonged to the accused and whether the signature of the accused herein is available in the cheque in question.

26. It is specific case of the complainant is that accused has approached the complainant for hand loan for Rs.4,35,000/- for his business needs.

The complainant further contends that believing the words of the accused the complainant has paid an amount of Rs.4,35,000/-, by way of cash.

C.C.No.8711/11 The complainant has approached the accused for repayment of loan amount for Rs.4,35,000/- the accused has issued post dated cheque bearing No:607124, dated 25/3/2008 for Rs.4,35,000/- in favour of complainant.

The complainant further submits that the complainant has presented the said cheque for encashment, but, the same was returned unpaid on 4/8/2008 because of the Account closed.

The complainant further submits that thereafter, the complainant got issued the legal notice to the accused through his Advocate on 26/8/2008 and the same was duly served on the accused.

27. The Ex.p1 is the Original Complaint. The Ex.p2 is the Original cheque. The Ex.P2(a) is the Signature of the accused. The Ex.p3 is the Bank endorsement. The Ex.p4 is the Copy of legal notice. The Ex.p5 to p7 are the Postal receipts. The Ex.p8 & 9 are the Postal acknowledgements. In the cross of Pw.1 nothing has been elicited to disbelieve the version of the Pw.1.

28. The accused examined as Dw.1 and got exhibited three documents as per Ex.S1 to S4 dated 15/8/2008, 3/3/2008, 2/3/2008 and also 5/3/2008 and Mobile No:919845077422.

C.C.No.8711/11

29. It is the defence taken by the accused is that Mr.Mahesh Hegde is his friend and the also GPA holder of the complaint in the case. Taking advantage of his friendship Mahesh Hegde stolen several cheques from his shop and misusing those cheques. Mahesh Hegde had filed two cases against him, and also some cheques presented in the name of complaint who is stranger to him and also taken GPA from the complaint and deposed the evidence before the Court. He never approached the hand loan from the complainant at any point of time nor he received any amount the from the complainant.

30. In the cross of Dw.1 admitted that at page no.5:6:

¤¦.2J £À£Àß ¸À»AiÀÄÁVzÉ JAzÀgÉ ¸Àj. ZÉQÌ£À°è CAzÀgÉ ¤¦.2gÀ°è J¯Áè «ªÀgÀUÀ¼À£ÀÄß £Á£ÉÃ §gÉzÀÄPÉÆnÖzÉÝÃ£É JAzÀgÉ ¸ÀÄ¼ÀÄî. CzÀgÀ°è §gÉ¢gÀÄªÀ «µÀAiÀÄUÀ¼À£ÀÄß £ÀªÀÄä CAUÀrAiÀÄ ¹§âA¢ ªÀÄÆ®PÀ §gÉ¹PÉÆnÖzÉÝÃ£ÉÆÃ ºÉÃUÉ JAzÀgÉ §gÉ¹PÉÆnÖ®è. CzÀgÀ°ègÀÄªÀ «µÀAiÀÄUÀ¼À£ÀÄß AiÀiÁgÀÄ §gÉ¢zÁÝgÉ JAzÀÄ £À£ÀUÉ UÉÆwÛ®è, ªÀÄºÉÃ±ï ºÉUÀqÉ ªÀÄvÀÄÛ PÀÄªÀiÁgÀ¸Áé«Ä ªÀÄvÀÄÛ J.J£ï.gÀªÉÄÃ±ÀgÀªÀgÀÄ MmÁÖV ªÀÄÆªÀvÀÄÛ ®PàëUÀ¼ÀµÀÄÖ ºÀtªÀ£ÀÄß £À£ÀUÉ ºÉÆA¢¹PÉÆnÖzÁÝgÉ £Á£ÀÄ D jÃw ºÀt ¥ÀqÉzÀÄPÉÆAqÀÄ ZÉPÀÄÌUÀ¼À£ÀÄß ªÀÄºÉÃ±ï ºÉUÀqÉ ªÀÄÆ®PÀ FÉ ¥ÀæPÀgÀtzÀ ¦üAiÀiÁð¢üUÉ PÉÆr¹zÉÝÃ£É JAzÀgÉ ¸ÀÄ¼ÀÄî.

30. In the cross of Dw.1 further admitted that at page no.7 and 8:

C.C.No.8711/11 £À£Àß CAUÀrAiÀÄ°è £À£Àß PÉ®¸ÀUÁgÀgÁzÀ ªÀÄºÀzÉÃªÀ, ¨sÁ¸ÀÌgï, ªÀÄtô, PÀÈµÀÚ, ¸É®égÀªÀgÀÄ EgÀÄvÁÛgÉ. £Á£ÀÄ £À£Àß CAUÀrAiÀÄ°è ¨É½UÉÎ 10-30 jAzÀ gÁwæ 8-30gÀªÀgÉUÉ EgÀÄvÉÛÃ£É. EzÀgÀ ªÀÄzsÉå ¨ÉÃgÉ ªÁå¥ÁgÀ ¸ÀÜ¼ÀUÀ½UÉ ¨sÉÃn PÉÆqÀÄvÉÀÛÃ£É. ¦üAiÀiÁð¢üAiÀÄÄ £ÀªÀÄä CAUÀrUÉ §AzÀÄ ZÉPÀÌ£ÀÄß vÉUÉzÀÄPÉÆAqÀÄ ºÉÆÃVzÁÝgÉ J£ÀÄßªÀ ¸ÀA§AzÀs £Á£ÀÄ ¥ÉÇÃ°Ã¸ÀjUÉ zÀÆgÀÄ PÉÆnÖ®è. zÀÆgÀÄ PÉÆqÀ®Ä £À£ÀUÉ AiÀiÁªÀÅzÉÃ vÉÆAzÀgÉ¬ÄgÀ°®è. ¦üAiÀiÁðzÀÄzÁgÀgÀÄ MAzÀÄ ªÀQÃ®gÀ £ÉÆÃnÃ¸À£ÀÄß ¢B26.8.2008gÀAzÀÄ PÀ½¹zÀÝgÀÄ JAzÀgÉ £À£ÀUÉ vÀ®Ä¦®è.

31. In the cross of Dw.1 further admitted that at page no.9:

F zÁR¯ÉUÀ¼À£ÀÄß PÉÃªÀ® LqÉAn¦üPÉÃ±À£ï GzÉÝÃ±ÀPÁÌV ¤.J¸ï.1 jAzÀ ¤.J¸ï.4 JAzÀÄ UÀÄgÀÄw¹zÉ.

Ex.S1:S2:S3:S4: Text Messages

32. Hence, the admissions given by the Dw.1 which clearly shows that when the cheque belongs to the accused and same was signed by the accused and there is no difficulty to the accused for taking any steps against the complainant if the cheque is lost or misplaced.

33. Hence, the admissions given by the Dw.1 and the accused not produced any documents showing that the cheque where misplaced and same was misused by the complainant and regarding income of the accused he has 32 C.C.No.8711/11 turn over Rs.80,00,000/- for the year 2008-2010. Hence, the complainant and accused are the good friends. Hence, the defence taken by the accused regarding cheque was stolen and same was misused by the complainant is also not proved by the accused without producing any documents by the accused in support of his case and accused has utterly failed to prove his contention.

34. Decision rendered by the Hon'ble Circuit Bench at Dharwad in Criminal Petition No:697/2008 between Chandrashekharappa V/s Sharanabasappa Which reads as follows: The order of issue of process for an offence punishable u/s 138 of NI Act is challenged in the present petition on the ground that the complaint is presented by the power of attorney holder and he has stepped into the witness box and has given sworn statement and on the basis of the averments in the complaint and the sworn statement and the material made available, the learned Magistrate directed issue of process.

35. It is also settled position of law that which decided in:

IV(2001) CCR 196(SC) 33 C.C.No.8711/11 K.N.Beena V/s Muniyappan and another Cheque issued for debt or liability: Presumption rebuttable: Burden of proof on accused: Burden not discharged by accused.

36. Hence, accused utterly failed to prove his contention. By perusing the records which clearly shows that there is transactions between the accused and complainant, which is clearly goes to show that the accused is taken the money from the complainant due to business needs. Hence, accused is not discharged his burden regarding he has not obtained any amount from the complainant. The signature in the cheque in question is marked as Ex.p1(a) and in the Vakalath and deposition of Dw.1 which are one and the same belongs to the accused the Court can also compare the signatures of the accused undisputed cheque.

37. As per section 73 of Evidence Act which is held as follows: 73:"Comparison of Signature, writing or seal with others admitted or proved-In order to ascertain whether a signature, writing or seal is that of the person by whom it purports to have been written or made, any signature, writing, or seal admitted or proved to the satisfaction of the Court to have been written or made by that person may be compared with the one which is to be proved, 34 C.C.No.8711/11 although that signature, writing, or seal has not been produced or proved for any other purpose".

38. The materials available on record are sufficient to conclude that the complainant has produced cogent materials to show that the accused has borrowed the amount mentioned in the cheque in question from the complainant, and later, the accused has issued the cheque in question to the complainant, but, the cheque so issued has been returned unpaid because of the insufficiency of funds in the account of the accused herein, and hence, the accused has committed the offence punishable u/s 138 of NI Act. Besides, the materials available on record are sufficient to conclude that the defence set up by the accused is not probable which is sufficient to rebut or dispel the presumption, which is available and favourable to the complainant herein. Hence, I answer the point no.1 in the affirmative.

39. Point no.2: In view of my findings to 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 and sentenced to pay fine of Rs.4,50,000/-(Four lakhs fifty thousand only).

C.C.No.8711/11 If fine is realised, I award Rs.4,45,000/-(Four lakhs forty five thousand) to the complainant as compensation.

The rest of the amount namely Rs.5,000/-(Five thousand) is ordered to be adjusted to the State Exchequer. In default of payment of this compensation amount, the accused shall undergo simple imprisonment for one year. Office is directed to furnish the copy of this Judgement, free of cost, to the accused.

(Dictated to the stenographer, transcript thereof is computerized and print out taken by her, and then verified, and then pronounced by me in open Court on this the 4/1/2014).

(M.H.Sirwalkar), XVI Addl., Chief Metropolitan Magistrate, Bengaluru City.

::ANNEXURE::

1. Witnesses examined for the complainant:

Pw.1: K.V.Kumaraswamy

2. Witnesses examined for the accused:

Dw.1: Promod L.P.

3. List of documents marked for the complainant:

Ex.p1: Original Complaint 36 C.C.No.8711/11 Ex.p2: Original cheque P2(a): Signature of the accused Ex.p3: Bank endorsement Ex.p4: Copy of legal notice Ex.p5 to p7: Postal receipts Ex.p8 & 9: Postal acknowledgements

4.List of documents marked for the accused:

Ex.S1:2:3:4 Text Message

---

XVI ACMM., Bengaluru.

C.C.No.8711/11 IN THE COURT OF XVI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BANGALORE CITY Dated this the 30th day of June 2012 Present: Sri M.Brungesh, B.Com., LL.B., XVI Addl., CMM., Bengalure.



                  JUDGEMENT U/S 355 Cr.P.C.,


Case No.            : C.C. No.8711/2003


Complainant         : Smt.Sunanda W/o M.N.Vaikuntappa,
                      R/at:No:586, 1st "A" Cross, Bana-
                      girinagar, Bangalore-560085.

                              V/s

Accused            : Smt.Susheela Appaji W/o Appaji,

R/at:No:29/41, 15th Main, 13th Cross, Padmanabhanagar, Behind BKF., BSK III Stage, Bangalore-560070.

---

Offence complained of : U/s 138 of N.I. Act Plea of accused : pleaded not guilty Final order : Accused is convicted Date of order : 30/6/2012

---

C.C.No.8711/11 ::JUDGEMENT::

This case emanates from the complaint filed by the complainant alleging that the accused has committed the offence punishable u/s 138 of NI Act.

2. The brief facts of the case are as follows:

The complainant submits that the accused running a Chit Fund Business and several monetary transactions with group of ladies. The accused had instigated house hold wives by influencing them to become members of said chit fund and other benefit schemes. The accused had also taken advantage that her husband is working in Commercial Tax Department and having properties in the name of the accused and by looking into prospectus of the accused, several ladies have come forward to become members of said chit fund. It is learnt that the accused is doing Social work and become herself identified in several organizations. At the same time the accused has also become life member and member of various association and clubs in the residential areas.

The complainant further submits that the accused has sustained loss in chit fund business as well as in finance matters. Since the complainant known to the accused, the accused sought for financial assistance to discharge her liabilities. Believing the words of the accused, the complainant has extended financial help to the tune of 39 C.C.No.8711/11 Rs.10,00,000/- during March 2002. The amount was paid to the accused by the complainant and the accused has agreed to repay the said amount within four months from the date of receipt of the said amount.

The complainant further submits that after the completion of stipulated period of four months, she (complainant) has approached the accused and demanded to repay the said amount. In turn, the accused has issued the cheques in question in favour of the complainant herein. Further, the accused also requested the complainant to present the cheques in question one month later from the date of issuance of the cheque. Accordingly, the complainant has presented the said cheques for encashment on 10/4/2003, but, the said cheques were returned unpaid because of the insufficiency of funds in the account of the accused herein. Thereafter, the complainant got issued the legal notice calling upon the accused to pay the cheque amount and the said notice has been duly served on the accused. Despite service of legal notice, the accused has not come forward to pay any amount towards the amount mentioned in the cheques in question. Hence, the accused has committed the offence punishable u/s 138 of NI Act. By contending so, the complainant has prayed for punishing the accused as per law.

C.C.No.8711/11

3. On presentation of the complaint this Court has taken cognizance of the offence u/s 190 of Cr.P.C. The summons was issued to the accused person. In pursuance of service of summons, the accused has put her appearance before this Court and filed bail application u/s 436 of Cr.P.C.

and the same was allowed and the accused was released on bail.

5. To substantiate her contentions, the complainant namely Sunanda has examined herself as Pw.1 and got exhibited 8 documents as per Ex.p1 to p8. The side of the complainant was closed. The statement of the accused u/s 313 of Cr.P.C., has been recorded. The accused has examined herself as Dw.1 and the accused also got examined five witnesses as Dw.2 to Dw.6. The accused got exhibited 26 documents as per Ex.D1 to D26.

6. Arguments heard.

7. In view of the materials placed before me, the points that arise for my consideration are as follows:

3. Whether the complainant proves beyond all shadow of doubt that the accused has com-

C.C.No.8711/11 mitted an offence punishable u/s 138 of N.I.Act?

4. What order?

8. Now, my findings to the above said points are as follows:

Point No.1: In the affirmative Point No.2 :As per final order ::REASONS::

2. That there is legally enforceable debt.

2.That the cheque was drawn from the account of Bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt.

3.That the cheque so issued had been returned due 42 C.C.No.8711/11 to insufficiency of funds.

10. Keeping in view the ingredients of section 138 of NI Act, now, I feel that it is correct to reproduce the section

139 and 118 of NI Act here itself.

11. The section 139 of NI Act reads as follows:

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 to in section 138 for the discharge, in whole or in part, or any debt or other liability.

12. The section 118(a) of NI Act reads as follows:

Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:

b) of consideration: that every negotiable instrument was made or drawn for conside ration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotia ted or transferred for consideration.

13. Keeping in view the ingredients of section 138 and the provision of section 139 and 118(a) of NI Act, now, I proceed to discuss the documents of this case.

C.C.No.8711/11

14. I am of the opinion that I need not repeat the entire case of the complainant here also, since I have already narrated the same at the inception of this Judgement.

15. It must be noted that to substantiate her contentions, the complainant namely Sunanda has examined herself as Pw.1 and got exhibited 8 documents as per Ex.p1 to p8. In my view it is correct to discuss about the documentary evidence here itself for the convenient sake.

16. The Ex.p2 is the cheque bearing No: 104270 dated 10/3/2003 for Rs.5,00,000/-. The Ex.p3 is also cheque bearing No:102243 dated 12/3/2003 for Rs.5,00,000/-. It must be noted that the Ex.p2 and p3 are drawn on Karnataka Bank Limited, Jayanagar 4th Block Branch, Bangalore. According to complainant the signatures of the accused are available in the cheques in question and they are marked as Ex.p2(a) and Ex.p3(a). The original complaint is marked as Ex.p1. A perusal of original complaint and original cheques makes it clear that they buttress the stand taken by the complainant herein.

17. The Ex.p4 is the endorsement issued by the banker, which shows that the aforesaid two cheques were returned unpaid on 11/4/2003 because of the insufficiency of funds in the account of the accused herein.

18. It must be noted that as per clause (b) of proviso to section 138 of NI Act the complainant was required to make 44 C.C.No.8711/11 a demand for repayment of the said amount within 30 days from the date of receipt of cheque as unpaid. The Ex.p5 to p7 (Copy of legal notice and postal receipts) show that complainant made a demand, in writing, calling upon the accused to make repayment of the said loan amount by issuing notice dated 17/4/2003, which is within 30 days from the date of receipt of cheque as unpaid.

19. The Ex.p8 is the Postal acknowledgement, which shows that the said legal notice got issued by the complainant was returned unserved on 21/4/2003. As per clause (c) of proviso to section 138 of NI Act the accused was entitled to have 15 days time to make the repayment of aforesaid loan amount. Thus, the complainant had to wait till 6/5/2003. Thus, the cause of action for this complaint has arisen on 6/5/2003. Further, as per section 142(b) of NI Act the complaint is to be filed within 30 days from the date on which the cause of action arises. Therefore, the complainant had to file this complaint on or after 6/5/2003 and on or before 5/6/2003. But, this complaint has been filed on 20/5/2003, and hence, the complaint is well within time. Thus, the complainant has fulfilled all the components, which were required for the completion of the offence u/s 138 of NI Act.

20. Keeping in view the documents made available on record, now, I proceed to discuss the decisions pressed into 45 C.C.No.8711/11 services by the accused herein itself. It must be noted that the accused has pressed into services of the following decisions.

3. ILR 2008 Karnataka page 4629 between Shivamurthy V/s Amruthraj.

4. AIR 2008 SC page 1325 between Krishna Janardhan Bhat V/s Dattatreya G. Hegde.

5. AIR-2009-SC-page 1518 between Kumar Exports V/s Sharma Carpets.

22. Further, a careful reading of the decisions between Shivamurthy V/s Amruthraj and between Vishwanath Pai V/s Vivekananda S. Bhat and Krishna Janardhan Bhat V/s Dattatreya G. Hegde it becomes clear that the Hon'ble Apex Court and the Hon'ble High Court of Karnnataka have held that even in a trial u/s 138 of NI Act the aforesaid presumptions available u/s 139 and 118(a) of NI Act cannot be raised automatically, on the other hand, the complainant has to prove the existence of legally recoverable debt. Further, it is also laid down by the Hon'ble Apex Court and 46 C.C.No.8711/11 Hon'ble High Court of Karnataka that even in a trial u/s 138 of NI Act the complainant has to prove his allegations beyond all shadow of doubts, on the other hand, the accused can prove his allegations by applying the principles namely preponderance of probabilities. Besides, it is also laid down by the Hon'ble Apex Court and Hon'ble High Court of Karnataka that the word "legally recoverable debt"

includes the capacity of the complainant to pay the amount mentioned in the cheque in question.

23. Keeping in view the law laid down by the Hon'ble Apex Court and Hon'ble High Court of Karnataka in the decisions pressed into services by the learned counsel for the accused, now, I proceed to cite the decision reported in AIR 2010 S.C. page 1898 between Rangappa V/s Mohan. It must be noted that in this decision the Hon'ble Apex Court had considered the acceptability or otherwise of the law laid down by it [Hon'ble Apex Court] in the decision between Krishna Janardhan Bhat V/s Dattatreya G. Hegde. It must be noted that at paragraph numbers 10 to 14 of the case between Rangappa V/s Mohan the Hon'ble Apex Court has discussed the acceptability of the law laid down by it [Hon'ble Apex Court] in Krishna Janardhan Bhat's case.

24. It must be noted that at paragraph number 14 of this decision between Rangappa V/s Mohan the Hon'ble Apex Court has held that once the execution of Negotiable 47 C.C.No.8711/11 instrument is either proved or admitted, then the Court shall draw a presumption available u/s 139 of NI Act to the effect that the negotiable instrument has been drawn for valid consideration. Further, the Hon'ble Apex Court in Rangappa V/s Mohan also laid down that the observations made by it [Hon'ble Supreme Court] in Krishna Janardhan Bhat V/s Dattatreya G. Hegde's case are not correct in as much as it is related to the questions of presumptions u/s 139 of NI Act. In other words, it is laid down by Hon'ble Apex Court in Rangappa V/s Mohan that the view expressed by it [Hon'ble Supreme Court] in Krishna Janardhan Bhat's case to the effect that "the Court cannot raise the presumptions u/s 139 of NI Act automatically, on the other hand, the complainant has to prove the existence of legally enforceable debt" is not correct.

25. Therefore, it becomes very clear that the Hon'ble Supreme Court has expressed divergent opinions in respect of drawing of presumptions u/s 139 of NI Act. Again I repeat, I have already extracted the provisions of section 139 and 118 of NI Act in the preceding paragraphs of this judgement and to avoid repetition I don't want to reiterate the same.

26. Therefore, the question would be, which of those decisions is to be followed by this Court. It must be noted that as per Article:141 of Constitution of India the law laid 48 C.C.No.8711/11 down by the Hon'ble Apex Court is binding on all the lower Courts which are functioning in the territory of India. Therefore, both the aforesaid decisions are binding on this Court. Thus, the question is, which of these two decisions is to be followed by this Court. Fortunately a decision rendered by the Hon'ble High Court of Karnataka comes to the rescue of this Court. In other words, in the decision reported in AIR 1980 Karnataka page 92 between Govind Naik S. Kalghataki V/s West Patent Press Ltd., the Hon'ble High Court of Karnataka had an occasion to discuss about the law of precedents. In this decision the Hon'ble High Court of Karnataka has held as follows:

If two decisions of the Supreme Court do not reconcile on a particular question of law then the decision rendered by the Bench con sisting of more number of Hon'ble Judges of the Supreme Court is to be followed. Fur ther, If those two decisions of the Supreme Court have been rendered by the Benches consisting of equal number of Hon'ble Jud ges of the Supreme Court then latest of the two decisions is to be followed.

27. Keeping in view this position of law, again I have perused the decision, which is pressed into services by the learned counsel for the accused, which is reported in AIR 2008 Supreme Court page 1325 between Krishna Janardhan Bhat V/s Dattatreya G.Hegde, and I have also gone through the decision between Rangappa V/s Mohan. It must be noted 49 C.C.No.8711/11 that the decision between Krishna Janardhan Bhat V/s Dattatreya G. Hegde has been rendered by the Bench consisting of two Hon'ble Judges of the Supreme Court. On the other hand, the case between Rangappa V/s Mohan has been rendered by the Bench consisting of three Hon'ble Judges of the Supreme Court. Therefore, it becomes clear that this Court is duty bound to follow the ratio laid down by the Hon'ble Apex Court in the decision reported in AIR 2010 Supreme Court page 1898 between Rangappa V/s Mohan.

28. Again I repeat, in this decision between Rangappa V/s Mohan the Hon'ble Apex Court has held that once the execution of negotiable instrument is either proved or admitted, then, the Court shall draw a presumption to the effect that the said negotiable instrument has been drawn for valid consideration and the legally recoverable debt was in existence.

29. Keeping in view this position of law, now, I proceed to discuss that whether the cheques in question are belonged to the accused and whether the signatures of the accused herein are available in the cheques in question.

30. An answer lies to this question in the deposition of the accused. The record shows that the accused namely Susheela Appaji has examined herself as Dw.1. At para 50 C.C.No.8711/11 no.9, page no.3 of her deposition, the accused specifically contends that she had given a cheque bearing No:102243 drawn on Karnataka Bank Ltd., 4th Block, Bangalore in favour of one Narayanappa in respect of the loan transaction, and later, the said Narayanappa has handed over the said cheque in favour of the complainant herein. It must be noted that the said cheque bearing No:102243 is the Ex.p3 of this case. Further, In the same paragrapah, same page, the accused also contends that the other disputed cheque was handed over to Chit Company run by one Smt.Parvathamma as a collateral security, later, the said Parvathamma has handed over the same to the present complainant herein and got filed this case. It must be noted that once the accused uses the word the other disputed cheque, then, definitely it refers to other cheque involved in the present case. It must be noted that the other cheque which is the subject matter of this case is the cheque bearing No:104270 dated 10/3/2003 drawn on Karnataka Bank Ltd., Jayanagara 4th Block Branch, Bangalore. It must be noted that this Cheque baring No:104270 is marked as Ex.p2 in this case. I will discuss about the acceptability or otherwise of the contentions raised by the accused, little later. However, the fact remains that by posing such suggestions, the accused has admitted that the cheques, which are the subject matters of this case, are belonged to 51 C.C.No.8711/11 her and her signatures are available in the cheques in question.

31. It is well settled that admission furnishes best evidence in view of the law laid down by the Hon'ble Apex Court in the decision reported in AIR 1981, Supreme Court page 2085, between Ramji Dayawala V/s Invest Import. Thus, in my view, the admission given by the accused is sufficient to conclude that the execution of negotiable instrument (cheque in question) is admitted and as well as proved.

32. Once this Court concludes that the execution of the cheque in question is proved, then, this Court shall draw a presumption available u/s 139 of NI Act. In other words, this Court shall draw a presumption that the cheque in question has been drawn towards the discharge of legally enforceable debt and it is drawn for valid consideration.

33. However, it is relevant to mention that in the aforesaid decisions the Hon'ble High Court of Karnataka and Hon'ble Apex Court have made the position very clear that the presumption available u/s 139 of NI Act is not conclusive proof, but, the said presumption is rebuttable one. Therefore, in view of the aforesaid facts and circumstances and position of law, the accused has to dispel or rebut the presumption, which is available and favourable 52 C.C.No.8711/11 to the complainant herein. With this perception, now, I proceed to discuss the evidence available on record.

34. It must be noted that the complainant has only produced 8 documents and they are marked as Ex.p1 to p8. I have already discussed about the documentary evidence in the preceding paragraphs of this Judgement. Thus, now, I proceed to discuss the oral evidence.

35. It must be noted that the complainant has examined herself as Pw.1. The Pw.1 has filed her affidavit u/s 145 of NI Act containing her examination in chief, wherein she has reiterated the entire complaint averments. However, this Court cannot draw any conclusion without perusing the cross examination of Pw.1. Thus, I proceed to discuss the cross examination of Pw.1.

36. It must be noted that at page no.5 of deposition of Pw.1, during cross examination, many questions, with reference to denomination of the Currency Notes through which the complainant had paid the amount in question to the complainant herein, were posed. The Pw.1 deposes that she had paid the amount in question to the accused by way of currency notes of Rs.100/- and Rs.500/- face value. In my view, this fact is of no consequences for the simple reason that it is not the denomination of the notes which assumes importance, on the other hand, it is the duty of the 53 C.C.No.8711/11 Court to decide that whether the complainant had, in fact, paid the amount in question to the accused or not.

37. The learned counsel for the accused has pressed into services of a decision reported in 2009 (2) DCR page 153 between Patricio D'Souza V/s Oscar D'Souza and another rendered by Hon'ble High Court of Bombay Wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 139- Burden of proof-Held-Once the accused came with a specific case that he had never taken loan from complainant in that situation it was for complainant to lead cogent evidence to prove as to from where he advanced such amount to the accused.

38. As far as the ratio laid down in the aforementioned decision is concerned there cannot be any quarrel at all and I respectfully agree with the same. Keeping in view this position of law, once again, I have carefully perused the entire materials available on record. It must be noted that the complainant has examined herself as Pw.1. The Pw.1 has been cross examined at length by the counsel for the accused. It must be noted that a careful searching of the entire cross examination of Pw.1 makes it clear that it is not even suggested that the complainant has no capacity to pay the amount mentioned in the cheques in question. On the other hand, during her cross examination, which was 54 C.C.No.8711/11 recorded on 24/1/2005 the Pw.1 specifically deposes that she had mortgaged her house which was situated at Banagiri Nagar, Bangalore, for Rs.5,50,000/-. Further, the Pw.1 also deposes that she had sold her property situated at Bhat Layout, Girinagar, during the month of November 2001. Thus, these two answers given by the complainant makes it clear that she (complainant) had capacity to pay the amount in question to the accused herein. It is true that the complainant has not produced any documents to show that she had mortgaged her house and she had sold her site to some other persons and thereby she got money. Thus, the question would be, whether the case of the complainant has to be disbelieved on this premise or not. It must be noted that a careful searching of the entire cross examination of Pw.1 makes it clear that it is not even suggested by the accused that the complainant has not at all either mortgaged her house or sold her site property to any other persons. Thus, the cumulative effect of these things is that the complainant says something which is favourable to her, on the other hand, the accused has not at all disputed the said averments by cross examining the Pw.1 in that regard. It is well settled that whenever an opponent does not avail himself of the opportunity of cross examining a witness on essential points, then, the evidence adduced by that witness on that issue or question has to be accepted as true and 55 C.C.No.8711/11 correct. This view of this Court receives support from the law declared Hon'ble Apex Court in the decision reported in AIR 2002 Supreme Court page 3652 between Sarvan Singh V/s State of Punjab.

39. Again I say that in the present case on hand the complainant deposes something to show that she had the capacity to pay the amount in question to the accused. On the other hand, the accused has not at all disputed the said assertions made by the complainant. Thus, whatever the evidence given by the complainant herein has to be accepted as true and correct in view of the law declared in the aforementioned decision between Sarvan Singh V/s State of Punjab. Thus, I hold that the complainant has been able to prove that she had the capacity to pay the amount in question. In that view of the matter, in my humble opinion, the complainant has complied the law declared in the aforementioned decision between Patricio D'Souza V/s Oscar D'Souza's case.

40. Therefore, the aforementioned facts and circumstances of the case buttress the stand taken by the complainant herein.

41. In the cross examination of complainant/Pw.1, it is suggested that the legal notice got issued by the complainant was not served on the accused and the Pw.1 has denied the said suggestion. It must be noted that the 56 C.C.No.8711/11 learned counsel for the accused argued that the legal notice got issued by the complainant was not served on the accused, hence, the complainant has not complied one of the main ingredients of section 138 of NI Act, hence, the case of the complainant needs to be dismissed. Keeping in view this argument of the learned counsel for the accused, once again, I have carefully perused the entire materials available on record. It must be noted that the accused namely Susheela Appaji has examined herself as Dw.1. The Dw.1 has been cross examined at length by the counsel for the complainant. It must be noted that during the cross examination the Dw.1, which was recorded on 12/9/2005, has specifically admitted that the address mentioned in the Ex.p7 and Ex.p8 is her address. It is also relevant to mention that the counsel for the complainant had confronted the Ex.p7 and Ex.p8 to the Dw.1, and in turn, the Dw.1 has admitted that the address mentioned in Ex.p7 and Ex.p8 is her address. It must be noted that the Ex.p7 is the Postal receipt, which shows that the complainant did send the legal notice to the accused by certificate of posting. The Ex.p8 is the Postal acknowledgement, which contains an information that the legal notice got issued by the complainant was served on the accused on 27/4/2003. It must be noted that the Ex.p7 and Ex.p8 do contain the address of the accused. Again I repeat, the Dw.1 has admitted that the address 57 C.C.No.8711/11 available in Ex.p7 and Ex.p8 to the effect that Smt.Susheela Appaji W/o Appaji, No:29/41, 15th Main, 13th Cross, Padnabhanagar, BSK III Stage, Bangalore, is her address. Again I repeat, the admission furnishes best evidence unless it is explained. Keeping in view this position of law, again I say that the accused has admitted the address mentioned in Ex.p7 and Ex.p8 as her address, but, she does not offer any explanation to the effect that by over sight she has given such an admission. Thus, the admission given by the accused furnishes best evidence. Thus, the cumulative effect of the aforementioned facts is that the complainant did send legal notice to the accused by writing the correct address of the accused.

42. The next question would be, whether sending the legal notice by writing the correct address of the addressee itself is sufficient to presume due service of notice. It must be noted that in the decision reported in KCCR 2008(4) page 2509 between Indo Automobiles V/s Jai Durga Enterprises, The Hon'ble Apex Court has held as follows:

"It is well settled that once notice has been sent by RPAD to a correct address, it must be presumed that the service has been made effective".

Keeping in view the law declared in the aforementioned decision, again I say that even in the present case on hand 58 C.C.No.8711/11 also the complainant did send the legal notice, by RPAD, to the correct address of the accused. Thus, the law declared in the aforementioned decision is squarely applicable to the facts and circumstances of this case, hence, I conclude that this Court has to presume that service of legal notice has been made effective. Thus, in my opinion, the defence set up by the accused, in this regard, falls to ground.

43. In my opinion, it is correct to discuss about the documentary evidence produced by the accused here itself for the better appreciation of the questions involved in this case. The accused has produced, in all, 22 documents, now, I proceed to discuss the said documents here itself.

44. The Ex.D1 is the certified copy of the order sheet of the case bearing No:C.C.3721/04. The Ex.D2 is the certified copy of the complaint filed in C.C.3721/04. These two documents show that one Narayana, who is examined as Dw.4 in the present case, had filed a complaint u/s 138 of NI Act against the present accused herein namely Susheela Appaji. The Ex.D2 shows that the said Narayana had alleged in Ex.D2 that the accused namely Susheela Appaji had borrowed Rs.3,55,000/- on 23/2/2002 from the said Narayana/Dw.4 agreeing to repay the said loan amount within a year from that day she (Susheela Appaji) had issued a cheque bearing No:102246 dated 7/10/2003 drawn on Karnataka Bank, Jayanagar, 4th Block Branch, Bangalore.

C.C.No.8711/11 Further, the Ex.D2 also shows that the complainant of that case namely Narayana i.e. present Dw.4 had alleged usual pleas such as when the said cheque bearing No:102246 was presented for encashment, the same was returned unpaid because of the insufficiency of funds in the account of the accused herein, and despite service of legal notice the present accused did not repay the said amount, hence, he (Narayana) had filed that complaint u/s 138 of NI Act. Further, the order sheet of that case namely Ex.D1 shows the events that had taken place in the said case bearing No:3721/04 date vise. It must be noted that the Ex.D1 and Ex.D2 show that the said complaint was presented by the said Narayan on 10/12/2003. Further, the Ex.D1 contains the details of the events that had taken place in the said case from the date of presentation of the complainant till 9/5/2005.

45. The Ex.D3 has nomenclature as Memorandum of Understanding. A careful reading of this document makes it clear that the present accused namely Susheela Appaji and the present Dw.4 namely Narayana had entered into that Memorandum of Understanding on 11/10/2004 at Bangalore. The gist of the said Ex.D3 is that the present accused namely Susheela Appaji had borrowed Rs.3,55,000/- during February 2002 from the Narayana and had handed over four cheques bearing numbers 102242 and 60 C.C.No.8711/11 102243 and 102244 and 102246 drawn on Karnataka Bank Ltd., Jayanagar, 4th Block Branch, Bangalore and an On Demand Promissory Note and Consideration Receipt in favour of said Narayana as security.

It must be noted that the cheque bearing No:102243 drawn on Karnataka Bank Ltd., Jayanagar, 4th Block Branch, Bangalore, is one of the subjects matter of the present case and the same is marked as Ex.p3.

46. Further, the Ex.D3 also contains an information that the said Narayan had initiated a case against the present accused before the XII ACMM., Bangalore vide C.C.3721/2004 and the same was pending on that day. Further, the Ex.D3 also contains an information that finally at the instance of the well wishers said Narayan and Susheela Appaji (present Dw.4 and present accused) had agreed to get the said dispute settled amicably. Further, the Ex.D3 also contains an information that the Susheela Appaji had agreed to pay Rs.2,50,000/- to the said Narayan by way of three installments, and in turn, the said Narayan had agreed to return the remaining three cheques namely Cheques bearing No:102242 and 102243 and 102244, drawn on Karnataka Bank Ltd., Jayanagar, 4th Block Branch, Bangalore and On Demand Promissory Note and 61 C.C.No.8711/11 Consideration Receipt to the Susheela Appaji after receipt of the entire amount of Rs.2,50,000/-.

47. Further, at page no.5 of this Ex.D3 it is also narrated that the Narayan undertook not to hand over the aforesaid three cheques to any other person and the said cheques will be handed over to the Susheela Appaji after the settlement of entire amount.

48. The Ex.D9 is the copy of the legal notice got issued by the present accused namely Susheela Appaji on 25/3/2005 calling upon the Narayan (present Dw.4) and Sunanda (present complainant) to return the cheque bearing No:102243, drawn on Karnataka Bank Ltd., Jayanagar, 4th Block Branch, Bangalore. Further, in this Ex.D9 it is also alleged that the said Narayan and Sunanda had common intention to cheat the present accused namely Susheela Appaji. Further, in this Ex.D9 it is also alleged that the Narayan had entered into a Memorandum of Understanding on 11/10/2004 wherein and where under Narayan had agreed to return the aforesaid cheque bearing No:102243, but, later Narayan did not respect the terms of the said Memorandum of Understanding, and instead, he (Narayan) had abeted Sunanda (present complaint) to file the case bearing No:8711/03 (present case) with an intention to cheat the present accused. By contending so, the accused had demanded the present complainant and Dw.4 to return 62 C.C.No.8711/11 the said cheque bearing No:102243 drawn on Karnataka Bank.

49. The Ex.D5 to D8 are Postal receipts, which show that the accused herein, in fact, posted the said notice/Ex.p9 to the present complainant and present Dw.4 on 29/3/2005. The Ex.D4 shows that the said notice dated 25/3/2005 got issued by the accused was served on the present complainant on 30/3/2005.

50. The Ex.D10 is the unserved postal cover, which shows that the legal notice got issued by the accused on 25/3/2005 to the Narayanappa (Dw.4) was returned unserved. The Ex.D11 is the Reply notice got issued by the present complainant herein in response to the legal notice dated 25/3/2005 got issued by the accused herein. It must be noted that these documents namely postal documents and the reply notice show that the complainant had received the legal notice dated 25/3/2005 got issued by the accused and finally she (complainant) also given her reply. In the said reply notice the complainant has denied each and every allegations made by the accused in the notice dated 25/3/2005, and finally, she (complainant) had reiterated the facts which are identical to the averments made in the present complaint namely Ex.p1 of C.C.8711/03.

51. Further, the accused has also produced other documents and they are marked as Ex.D13 to D21. A 63 C.C.No.8711/11 perusal of these documents makes it clear that the accused herein had also got issued the legal notice to the Narayanappa (Present Dw.4).

52. The said notice is marked as Ex.D13. The Ex.D14 to D17 are the Postal covers. The Ex.D18, D20 and D21 are the unserved postal covers. These documents contain informations which are identical to the informations available in Ex.D9. To put it differently, even in the Ex.D13 also the accused had called upon Narayana (Dw.4) to return the cheque bearing No:102243 as per the terms of MOU. Further, the postal receipts and unserved postal covers show that the said notice got issued by the accused to Narayanappa was returned unserved.

53. Further, the accused has also produced one inland letter written by one Krishnappa, Excise Department, Wherein said Krishnappa is quoted as saying that Narayana (Dw.4) had given two cheques and two Agreement papers to the said Krishnappa and borrowed Rs.40,000/-. Further, Krishnappa is also quoted as saying that the said bond papers, which were given by Narayana to him (the author of this Ex.D22), contain the photographs of the accused herein.

54. These documents are highlighted by the counsel for the accused. But, in my opinion, the letter written by one Krishnappa to the present accused is of no consequences at all for the simple reason that if the accused had contended 64 C.C.No.8711/11 that along with the said letter/Ex.D22 Krishnappa also did send copies of the bond papers and copies of the cheques, then, the things would have been different. But, the accused has not made available any such materials before this Court. In that view of the matter, the letter said to have been written by one Krishnappa to the accused making some allegations against Narayana (Dw.4) has no relevancy as far as the rights of the complainant is concerned.

55. Further, in my opinion, as far as the allegations made in the Ex.D13 is concerned, the accused has to produce cogent materials before the Court. But, in my view, mere writing a letter or issuance of notice by making some allegations against Narayana itself is not sufficient to disbelieve the entire case of the complainant herein. This view of this Court receives support from the discussion, which I will make about the Ex.D3. I will discuss the same little later.

56. Again I repeat, the accused has produced the Ex.D3 which has nomenclature as Memorandum of Understanding. I have already extracted the averments made in Ex.D3 in the preceding paragraph of this Judgement. Further, the record shows that the accused has examined one Kittappa as Dw.2, and one Narasimhareddy as Dw.3 and one Narayana as Dw.4 and one Jayaramashetty as Dw.5 and one Manjula W/o Narayana as Dw.6. It must be noted that it is 65 C.C.No.8711/11 an admitted fact that this Dw.6 is the W/o Dw.4. Further, the accused has examined the said Dw.2 to D6 to prove the execution of the Ex.D3.

57. In my opinion, before discussing the oral evidence of Dw.2 to D6, it is correct to know that the legal consequences that would flow in the event the accused proves the execution of this Ex.D3. Besides, I am also of the opinion that recitals or averments available in Ex.D3 are in the nature of affecting the rights of the complainant herein, then, it would be proper to discuss the corresponding oral evidence of Dw.2 to D6.

58. It must be noted that the present case namely C.C.8711/03 was filed on 16/5/2003. But, the aforesaid Ex.D3 namely the Memorandum of Understanding was executed on 11/10/2004, which is apparently one year five months after filing of the present case. Further, the order sheet maintained in this case namely C.C.8711/03 makes it clear that the accused had appeared before this Court and was released on bail on 14/11/2003. Therefore, these facts make it clear that the accused, has appeared before this Court and got released herself on bail, and thereafter, got executed the Ex.D3. Thus, these facts make it clear that the Ex.D3, according to the averments made by the accused herself, has come into existence after filing of this case. Further, a careful reading of the Ex.D3 makes it clear that 66 C.C.No.8711/11 the present complainant is not a party to the said Ex.D3. Further, the Ex.D3 does not contain the signature of the complainant herein. Further, it is interesting to note that the said Narayanappa (Dw.4) had filed the complaint against the present accused herein on 10/12/2003 which is also apparently seven months after filing of the present case namely C.C.8711/03. To put it differently, the present Dw.4 namely Narayana had filed the aforesaid C.C.3721/04 on 10/12/2003 against the present accused herein. Thus, these facts make it clear that the recitals available in Ex.D3 do not bind the complainant herein. Further, the mere fact that the Ex.D3 has come into existence after filing of the present case, that too, after the accused got herself released on bail in the present case, itself creates an impression that the accused got executed the Ex.D3 just to suit her convenience. In that view of the matter, I hold that the recitals or conditions available in Ex.D3 do not bind the complainant herein. Besides, it is important to note that in Ex.D3 there is no mention that the present Dw.4 namely Narayana had handed over the cheque bearing No:102243 to the present complainant herein. This conclusion can be drawn for the following reasons. Admittedly the present case was filed on 16/5/2003 and in the complaint of present case the complainant herein has made specific allegations that the accused had given cheque bearing No:102243. Further, 67 C.C.No.8711/11 according to accused the Ex.D3 has come into existence on 11/10/2004, which is apparently one year five months after filing of the present case, But still, there is no mention in Ex.D3, to the effect that the said Narayana had already handed over the cheque bearing No:102243 to the present complainant herein. Further, in my opinion, at any stretch of imagination one cannot presume and conclude that the complainant herein filed the present complaint on 16/5/2003 in anticipation that the said Narayanappa would give, the said cheque bearing No:102243, to her subsequently. Further, the cheque return memo namely The Ex.p4 show that on 11/4/2003 itself the cheques in question were returned unpaid by the banker because of the insufficiency of funds in the account of the accused herein. Further, the question of return of cheques unpaid arises only on presentation of the cheques for encashment. It is needless to say that for encashment the original cheque should be presented to the banker concerned. In that view of the matter, one had to conclude that the cheques in question were in the hands of complainant herein much earlier to 11/4/2003 i.e. the date on which the cheques were returned unpaid. When such being the position, if really the contentions raised by the accused were true, definitely a mention about the present case namely C.C.8711/03 would have been made in the Ex.D3. But, such facts are not 68 C.C.No.8711/11 available in the present case. In that view of the matter, in my humble opinion, even if this Court concludes that the accused has proved the execution of Ex.D3 namely Memorandum of Understanding dated 11/10/2004, then also the recitals or conditions available in the said Ex.D3 do not bind the complainant herein, and importantly, they do not affect the rights of the complainant herein, which had accrued to her because of the return of the cheques unpaid. In that view of the matter, in my opinion, that there is no necessity to discuss the corresponding oral evidence of Dw.2 to Dw.6.

59. I am of the opinion that it is correct to discuss about the decisions pressed into services by the learned counsel for the accused here itself.

60. The learned counsel for the accused has pressed into services of a decision reported in 2011 (1) DCR page 3 between A.S.Bafakkithangal V/s Purushothaman rendered by Hon'ble High Court of Kerala. Wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 138- Dishonour of cheque-Acquittal-Validity-Held-Since Magistrate concluded that the case set up by complainant as to circumstances under which the cheque was issued by accused is not convincing, so that finding cannot be disturbed solely on the basis of 69 C.C.No.8711/11 some admission culled out from witnesses examined by accused.

Keeping in view this position of law, once again, I have carefully perused the entire record and it is noticed that the case set up by the complainant is convincing because the accused has failed to bring out anything from the mouth of the complainant to disbelieve the case set up by the complainant herein. Hence, in my humble opinion, the ratio laid down in the aforementioned decision is not applicable to the facts of this case.

61. Further, the learned counsel for the accused has pressed into another decision reported in 2011 (1) DCR page 108 between Om Parkash V/s Subhash Chand rendered by Hon'ble High Court of Punjab and Haryana wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 138- Acquittal-Validity-Held-If the cheque is found tempered than acquittal of accused is just and proper. Keeping in view this position of law, once again, I have carefully perused the cheques in question and I do not come across any tampering of any of the writings available in the cheques in question. Hence, I am of the opinion that the ratio laid down in the aforementioned decision is not applicable to the present case.

C.C.No.8711/11

62. The learned counsel for the accused has pressed into services of a decision reported in 2011 (1) DCR page 110 between Nisha D. Saraf V/s Rakesh Kumar Madhar rendered by Hon'ble High Court of Punjab and Haryana Wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 138- Complaint for dishonour of cheque-Maintainability- Held-Where the allegations made in complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion, so the complaint is liable to be dismissed. Keeping in view the ratio laid down in the aforementioned decision, once again, I have perused the allegations made in the complaint and it is noticed that the complainant has made available clear allegations in the complaint, and importantly, the allegations made in the complaint are not absurd. Thus, the ratio laid down in the aforementioned decision is not applicable to the facts and circumstances of the case.

63. The learned counsel for the accused has pressed into services of a decision reported in 2011 (1) DCR page 214 between Anil S/o Baburao Kataria V/s Purshottam S/o Prabhakar Kawane rendered by Hon'ble High Court of Bombay Wherein it is held as follows:

C.C.No.8711/11 Negotiable Instruments Act, 1881-Section 138- Bombay Money Lenders Act, 1946-Section 10 and 32(b)-Maintainability of complaint-Held-As per Section 138 of N.I.Act "debt or other liability" means a legally enforceable debt or other liability-So a loan advanced by a money lender who is doing business of money lending without licence is not a debt or other liability and provision of Section 138 N.I.Act will not apply to such transaction.

Keeping in view this position of law, again I have perused the entire materials available on record and it is noticed that in the cross examination of Pw.1, it is not even suggested that the complainant is doing money lending business. Besides, the accused has not produced any materials to show that the complainant herein is a money lender by profession. In that view of the matter, in my humble opinion, the ratio laid down in the aforementioned decision is not applicable to the facts and the circumstances of this case.

64. The learned counsel for the accused has pressed into services of a decision reported in 2011 (1) DCR page 495 between Ranada Dutta V/s The State of West Bengal & another rendered by Hon'ble High Court of Calcutta Wherein it is held as follows:

C.C.No.8711/11 Negotiable Instruments Act, 1881-Section 138- Demand notice-Status-Held-Since the complainant has failed to prove the demand notice under section 138 of NI Act as such acquittal of accused is just and proper.

Keeping in view the ratio laid down in the aforementioned decision, again I say that the complainant has been able to show that he got issued the legal notice to the accused by writing the correct address of the accused in the legal notice. In the preceding paragraph of this Judgement itself I have already concluded that this Court has to presume that the legal notice has been duly served on the accused. In that view of the matter, in my humble opinion, the ratio laid down in the aforementioned decision is not applicable to the facts and circumstances of this case.

65. The learned counsel for the accused has pressed into services of a decision reported in 2011 (1) DCR page 627 between M/s Siva Sakthi Mills V/s Chandrashekar rendered by Hon'ble High Court of Madras Wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 138- Dishonour of cheque-Proof of -Held-In order to attract the penal provision for bouncing of a cheque it is essential that the dishonoured cheque should have 73 C.C.No.8711/11 been issued in discharge, wholly or in part of any debt or liability of drawer to payee.

Keeping in view the law declared in the aforementioned decision, once again, I have carefully perused the materials available on record. Again I say that in the present case the complainant has been able to show and prove that in fact a legally enforceable debt was in existence, hence, in my humble opinion, the ratio laid down in the aforementioned decision is not applicable to the facts and circumstances of this case.

66. The learned counsel for the accused has pressed into services of a decision reported in 2011 (1) DCR page 680 between Inder Pal Singh V/s Pankaj Bhardwaj rendered by Hon'ble High Court of Punjab and Haryana Wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 138- Scope of provision-Held-To make out offence under Section 138 of NI Act it is incumbent on the complainant to prove that the cheque was issued in discharge of legally enforceable debt or liability. Keeping in view the law declared in the aforementioned decision, once again, I have carefully perused the materials available on record. Again I say that in the present case the complainant has been able to show and prove that in fact a legally enforceable debt was in existence, hence, in my 74 C.C.No.8711/11 humble opinion, the ratio laid down in the aforementioned decision is not applicable to facts and circumstances of this case.

67. The learned counsel for the accused has pressed into services of a decision reported in 2011 (2) Civil L.J. page 274 between Joseph V/s Gladis Sasi rendered by Hon'ble High Court of Kerala Wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 118-139

-Presumptions regarding validity of cheque-Execution of cheque required to be admitted or proved-Drawer admitted only that she issued the cheque for Rs.1,50,000/---According to drawer she gave a signed blank cheque as the complainant demanded a cheque as security-Admission of the drawer did not amount to admission of execution of cheque-Evidence of complainant found insufficient to prove the execution of cheque-Case of drawer of giving a signed blank cheque as security probablised-Therefore, the presumption is not available.

Keeping in view this position of law, again I have perused the entire materials available on record and it is noticed that the accused has not elicited anything from the mouth of the complainant to conclude that the accused has issued the cheques in question for security purposes. On the other hand, the complainant has been able to show that she had 75 C.C.No.8711/11 lent money to the accused herein and to discharge the said liability the accused had issued the cheques in question. In that view of the matter, in my humble opinion, the ratio laid down in the aforementioned decision is not applicable to the facts and circumstances of this case.

68. The learned counsel for the accused has pressed into services of a decision reported in 2009 (1) DCR page 403 between K.Narayana Nayak V/s M.Shivarama Shetty rendered by Hon'ble High Court of Karnataka Wherein it is held as follows:

Negotiable Instruments Act, 1881-Section 138- Dishonour of cheque-Presumption-Held-So far as the presumption as to issuance of cheque for consideration and in discharge of debt the accused need not disprove the complainant's case in its entirity-Preponderence of probabilities are sufficient. It must be noted that even in the aforementioned decision between Rangappa V/s Mohan also the Hon'ble Apex Court laid down identical ratio. But, it is made clear that in the present case on hand this Court is not concluding anything only on the premise that the accused has not been able to disprove the complainant's case in it's entirity. On the other hand, this Court is searching to know that whether the defence set up by the accused is probable one or not. But, as has been stated above, the defence set up by the 76 C.C.No.8711/11 accused is not probable, hence, the same is not sufficient to dispel or rebut the presumption available and favourable to the complainant herein. In that view of the matter, in my humble opinion, this Court has followed the ratio laid down in the aforementioned decision.

69. Further, a careful reading of the cross examination of Pw.1 and the averments made in Ex.D3 makes it clear that the accused has offered some explanation as to how the cheque bearing No:102243 had gone to the possession of the complainant herein. However, I have already concluded that the said explanation offered by the accused cannot be accepted at all.

70. However, in her evidence, at page no.3, para no.9, the accused had stated that she had given the other cheque in question to one Parvathamma in respect of a chit fund transaction, and later, the said Parvathamma had given the said other cheque in question to the complainant herein and got filed this case. But, a careful searching of the cross examination of Pw.1 makes it clear that the Pw.1 has not been cross examined with reference to the said other cheque namely the cheque bearing No:104270. In my opinion, in the absence of any such suggestions in the cross examination of Pw.1, the mere assertion made by the accused, in her examination in chief, to the effect that she had given the other cheque namely the cheque bearing 77 C.C.No.8711/11 No:104270 to one Parvathamma in respect of the chit transaction, and later, said Parvathamma had handed over the same to the complainant herein and got filed this case assumes no significance at all. Thus, these facts make it clear that the defence set up by the accused is not probable one, hence, it does not inspire the confidence of the Court to accept the defence set up by the accused herein.

71. The learned counsel for the accused has pressed into services of another document and the same is marked as Ex.D12. I feel it is correct to discuss about the Ex.D12 here itself.

72. The Ex.D12 is the certified copy of the document issued by the II ACMM., Bangalore. This document shows that the present accused namely Susheela Appaji had filed a criminal complaint against the present complainant namely Sunanda and present Dw.4 namely Narayanappa alleging that they have concocted the documents and filed the present case bearing No:C.C.8711/03, and hence, the present complainant and the Dw.4 Narayanappa are to be punished as per law.

73. But, it is important to note that the accused has not produced any materials to show that what has happened in the said criminal complaint which was filed by the accused before the Hon'ble II ACMM., Bengalure. In my opinion, if the accused had produced any materials to show that the 78 C.C.No.8711/11 Hon'ble II ACMM., had passed some order concluding that the complainant herein had concocted the documents in question, which are the subject cheques of the present case, then, the things would have been different. But, for the best reasons known to her, the accused has not made any such efforts. In that view of the matter, in my opinion, mere fact that the accused had filed a private complaint before II ACMM., Bengalure alleging that the Sunanda (present complainant) and Narayanappa i.e. (Present Dw.4) have concocted the documents and filed the case in hand namely C.C.8711/03 itself is not sufficient to doubt the entire case of the complainant herein.

74. For the foregoing reasons, I hold that the materials available on record are sufficient to conclude that the complainant had paid the amount mentioned in the cheques in question to the accused, and in turn, towards the repayment of the said loan amount the accused had given the cheques in question, but, the cheques so issued have been returned unpaid because of the insufficiency of funds in the account of the accused herein. Further, I am of the opinion that the materials available on record are not sufficient to rebut or dispel the presumption, which is available and favourable to the complainant herein. Thus, I hold that the complainant has proved, beyond all shadow of doubts, that the accused has committed the offence 79 C.C.No.8711/11 punishable u/s 138 of NI act. Hence, point no.1 is answered in the affirmative.

75. Point no.2: In view of my findings to 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 and sentenced to pay fine of Rs.11,05,000/-(Eleven lakhs five thousand only).

If fine is realized, I award Rs.11,00,000/-(Eleven lakhs) as compensation to the complainant.

The rest of the fine amount namely Rs.5,000/-(Five thousand) is ordered to be adjusted towards State Exchequer.

In default of payment of this compensation amount, the accused shall undergo simple imprisonment for one year. Office is directed to furnish the copy of this Judgement, free of cost, to the accused.

(Dictated to the stenographer, transcript thereof is computerized and print out taken by her, and then verified, and then pronounced by me in open Court on this the 30th June 2012).

(M.Brungesh), XVI Addl., Chief Metropolitan Magistrate, Bangalore City.

C.C.No.8711/11 ::ANNEXURE::

1. Witnesses examined for the complainant:

Pw.1: Sunanda

2. Witnesses examined for the accused:

Dw.1: Susheela Appaji Dw.2: Kittappa Dw.3: Narasimha Reddy Dw.4: Narayana Dw.5:H.Jayarama Shetty Dw.6: Manjula

3. List of documents marked for the complainant:

Ex.p1: Original complaint Ex.p2:3: Original cheques P2(a):p3(a): Signatures of the accused Ex.p4: Bank endorsement Ex.p5: Copy of legal notice Ex.p6:7: Postal receipts Ex.p8: Postal acknowledgement

4.List of documents marked for the accused:

Ex.D1: Certified copy of the Order Sheet (C.C.3721/04) Ex.D2: Certified copy of the Complaint (PCR 2592/04) Ex.D3: MOU 81 C.C.No.8711/11 D3(a)&D3(b):Signatures of Dw.5 Ex.D4: Postal acknowledgement Ex.D5 to D8: Postal receipts Ex.D9: Copy of the legal notice Ex.D10:Unserved postal cover Ex.D11: Reply notice Ex.D12: Copy of the complaint (PCR 15695/05)) Ex.D13: Legal notice (Narayana Shetty) Ex.D14toD17: Postal Covers Ex.D18to21:Unserved postal covers Ex.D22: Inland letter (Krishnappa) Ex.D23: Memorandum of Possession Mortgage document Ex.D24: Copy of the Sale agreement Ex.D25: Copy of the Sale deed Ex.D26: Agreement of Memorandum of Possession Mortgage

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XVI ACMM., Bengalure.

82 C.C.No.8711/11

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