Bangalore District Court
Sri.Rajath Dwarka vs Sri.R.Prasad on 27 February, 2023
1
C.C.No.222/2021
KABC030008762021
Presented on : 05-01-2021
Registered on : 05-01-2021
Decided on : 27-02-2023
Duration : 2 years, 1 months, 22 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated : This the 27th day of February 2023
Present: Sri.N.M. RAMESHA, B'Com.,L.L.M.
XVI Addl.C.M.M., Bengaluru City.
Case No. C.C.No
: C.C.No.222/2021
Complainant : Sri.Rajath Dwarka
S/o Late.Munirathnam Naidu,
Aged about 42 years
R/at No.2062,
7th Main, 2nd Stage,
Kumaraswamy Layout,
Bengaluru -560 078.
(By Sri.Rathan.S., Adv,)
V/s
Accused : Sri.R.Prasad
S/o Late.Ramprasad
2
C.C.No.222/2021
Aged about 47 years
R/at No.1880,
10th Main Road, 2nd Stage,
Kumaraswamy Layout,
Bengaluru-560078.
(By Sri.A.R.Vivek., Adv.,)
Case instituted : 18.09.2020
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of order : 27.02.2023
JUDGMENT
The Complainant has filed this complaint against the accused under the provisions of Sec.200 of the Code of Criminal Procedure, for the offence punishable U/Sec.138 of the Negotiable Instruments Act.
2. The case of the Complainant is as under:-
The accused was known to complainant since several years. The accused has approached the complainant on 9.6.2019 and requested for hand loan of Rs.1,00,000/- to fulfill his immediate financial commitments. Therefore, the complainant has paid a loan of Rs.1,00,000/- to the accused in the 2 nd week of June 2019. The accused has agreed to repay the loan in 3 C.C.No.222/2021 the month of January 2020. But in spite of repeated request and demand, the accused has failed to repay the loan amount. On demand, the accused has issued a cheque bearing No.073905 dated 19.2.2020 for Rs.1,00,000/- drawn on the Mysore Silk Cloth Merchants Co-operative Bank Ltd., Bangalore. Therefore, the complainant has presented the cheque for encashment before the ICICI Bank Ltd., Vasanthapura Main Road, Bangalore. But the cheque was dishonoured as "Non cts cheque not allowed in cts clearing" vide endorsement dated 24.2.2020. The complainant has informed the accused about the dishonour of cheque for which, the accused has requested the complainant to re- present the cheque in the month of April, 2020. Therefore, the complainant has re-presented the cheque for encashment before ICICI Bank Ltd., Vasanthapura Main Road Branch, Bengaluru. But the said cheque was again dishonoured for want of sufficient funds in the account of the accused vide bank endorsement dated 24.4.2020. Therefore, the complainant got issued a legal notice dated 22.5.2020 calling upon the accused to repay the cheque amount within 15 days from the date of reciept of notice. The notice was served on the accused on 26.5.2020. But, in spite of service of legal notice, the accused has failed to pay the cheque amount 4 C.C.No.222/2021 within stipulated period of time and thereby committed an offence punishable U/s.138 of NI Act. Hence, this complaint.
3. After presentation of complaint, it was ordered to be registered as PCR No.10423/2020 vide order dated 5.10.2020.
4. The sworn statement of the complainant has been recorded and the documents were got marked as per Ex.P.1 to P.7.
5. My Learned Predecessor in office having heard the arguments of learned counsel for complainant and having satisfied with the complaint averments, sworn statement of complainant and documents at Ex.P.1 to P.7 and having satisfied with the prima facie materials placed on record and in view of courts closed from 25.3.2020 till 29.11.2020 by vertue of various notifications issued by Hon'ble High Court of Karnataka dated 25.3.2020, 16.4.2020, 30.4.2020, 15.5.2020, 2.6.2020, 1.7.2020, 15.7.2020, 27.8.2020, 18.9.2020 and 30.9.2020 and in view of Limitation period for filing of complaint extended till 29.11.2020, for the purpose of Sec.4 of Limitation Act and in view of the Hon'ble Supreme Court in its order dated 23.3.2020 in suo moto Writ Petition (Civil) No.(s) 03/2020 extended the period 5 C.C.No.222/2021 of limitation with effect from 15.3.2020 till the date on which the lackdown was lifting and allowed the extension for a period of 15 days even after lifting the lockdown and whatever the dealy caused in presenting the complaint was condoned and has taken the cognizance for the offence punishable U/s.138 of N.I.Act and the case was order to be registered as CC.No.222/2021 and the process was ordered to be issued against the accused vide order dated 22.12.2021.
6. On service of summons, the accused has appeared before the court through his learned counsel and obtained the bail by depositing cash surety of Rs.2,000/- vide Q.No.4025 dt: 8.6.2022. The copies of all the prosecution papers were supplied to the accused.
7. The Plea of accused for the offence punishable U/s.138 of N.I.Act has been recorded and the substance of accusation has been read over and explained to the accused in the language known to him. The accused has pleaded not guilty, but claims to be tried.
8. In order to establish the guilt against the accused, the complainant got himself examined as PW-1 and got the documents marked as Ex.P.1 to P.7. PW.1 was subjected for cross examination by the learned counsel for the accused.
6C.C.No.222/2021
9. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded vide dated 12.8.2022 and the incriminating evidence as such forthcoming against the accused in the evidence of complainant and documents has been read over and explained to the accused in the language known to him. But the accused has denied the entire evidence of complainant and documents. The accused did choose to enter the defence evidence.
10. In order to substantiate his defence, the accused got himself examined as DW.1 and got the documents marked at Ex.D1 and D2. DW.1 was subjected for cross examination by the Learned Counsel for complainant.
11. I have heard the arguments of learned counsel for both the side. The learned counsel for complainant has also filed notes of arguments and memo with decisions. The learned counsel for the accused has also filed memo with document published by the Reserve Bank of India with regards to cts cheque.
12. In the light of the arguments canvassed by the learned counsel for both side, I have carefully perused the oral and documentary evidence placed on record and 7 C.C.No.222/2021 also gone through the principles laid down in the cited decisions.
13. Now, the points that would arise for my consideration are as under:-
1. Whether the complainant proves that the accused has issued a cheque bearing No. 073905 dated 19.2.2020 for Rs.1,00,000/-, drawn on The Mysore Silk Cloth Co-operative Bank Ltd., in his favour towards the legally recoverable debt of Rs.1,00,000/- and on presentation of cheque for encashment before ICICI Bank, Vasanthapura Main Road Branch, Bangalore, it was dishonorued as 'Non cts cheque not allowed in cts clearing' and for want of sufficient funds in the account of the accused vide bank endorsements dt:24.2.2020 and 24.4.2020 and in spite of issuance of legal notice dt: 22.5.2020 and in spite of service of legal notice on 26.5.2020, the accused has failed to pay the cheque amount and thereby committed an offence punishable U/s.138 of N.I.Act?
2. What Order?
14. On considering and assessing the oral and documentatry evidence placed on record, now my answers to the above points are as under :
[ Point No.1: In the Affirmative.8
C.C.No.222/2021 Point No.2: As per final order for the following :-
REASONS
15. Point No.1 : The provisions of Sec.20 of Negotiable Instrument Act deals about Inchoate Stamped Instruments. As per this provisions of law, where one person signs and delivers to another a paper stamped in accorance with the law relating to negotiable instrements then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima-facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, or any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instruemnt, in the capacity in which he signed the same, to any holder in due course for such amount.
16. The provisions of Sec.118 of Negotiable Instrument Act deals about presumptions as to neogtiable instruments. As per this provisions of law, unit the contrary is proved, the following presumptions shall be made:-(a) of consideration: that every negotiable 9 C.C.No.222/2021 instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transfered, was accepted, indorsed, negotiated or transferred for considertaion: (b) as to date: that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance- that every accepted bill of exchange was accpted within a reasonable time after its date and before its maturity. (d) as to time of transfer-that every transfer of a negotiable instrument was made before the maturity; (e) as to order of indorsement; that the indorsements appearing upon a negotiable instrument were made in the order in which they apear thereon; (f) as to stamps-that a lost promissory note, bill of exchange or cheque was duly stamped and (g) that holder is a holder indue course- that the holder of a negotiable instrument is a holder in due course. [
17. The provisions of Sec.138 of Negotiable Instrument Act deals about dishonour of cheque for insufficiency etc., of funds in the accounts. As per this provisions of law, where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or 10 C.C.No.222/2021 inpart, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other proviosn of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both.
18. As per the proviso attached to the above said provisions of law, nothing contained in this section shall apply unless-(a) the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier. (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing , to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the 11 C.C.No.222/2021 cheque, within fifteen days of the receipt of the said notice.
[ 19. The provisions of Sec.139 of Negotiable Instrument Act deals about presumption in favour of holder. As per this provisions of law, it shall be presumed, unles 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.
20. The provisions of Section 146 of the Negotiable Instruments Act, 1881 deals about the Bank's slip prima facie evidence of certain facts. As per this provisions of law, the Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved.
21. Now keeping the above said provisions of Section 20, 118, 138, 139 and 146 of N.I.Act, in mind, let us consider as to whether the complainant could able to comply all the madates, ingredients, terms and conditions of Section 138 of N.I.Act, so as to raise or to 12 C.C.No.222/2021 draw the presumption in his favour as per Section 118 and 139 of N.I.Act.
22. It is averred in the complaint and stated by PW.1 in his oral evidence that the accused was known to him since several years and the accused has approached him on 9.6.2019 and requested for hand loan of Rs.1,00,000/- to fulfill his immediate financial commitments and therefore, he has paid a loan of Rs.1,00,000/- to the accused in the 2 nd week of June 2019 and the accused has agreed to repay the loan in the month of January 2020, but in spite of repeated request and demand, the accused has failed to repay the loan amount and on demand, the accused has issued a cheque bearing No.073905 dated 19.2.2020 for Rs.1,00,000/- drawn on the Mysore Silk Cloth Merchants Co-operative Bank Ltd., Bangalore and therefore, he has presented the cheque for encashment before the ICICI Bank Ltd., Vasanthapura Main Road, Bangalore, but the cheque was dishonoured as "Non cts cheque not allowed in cts clearing" vide endorsement dated 24.2.2020 and hence, he has informed the accused about the dishonour of cheque for which, the accused has requested him to re-present the cheque in the month of April, 2020 and therefore, he has re- presented the cheque for encashment before ICICI Bank 13 C.C.No.222/2021 Ltd., Vasanthapura Main Road Branch, Bengaluru, but it was again dishonoured for want of sufficient funds in the account of the accused vide bank endorsement dated 24.4.2020 and therefore, he got issued a legal notice dated 22.5.2020 calling upon the accused to repay the cheque amount within 15 days from the date of reciept of notice, the notice was served on the accused on 26.5.2020, but, in spite of service of legal notice, the accused has failed to pay the cheque amount within stipulated period of time and therefore he has presented the complaint before the court.
23. The complainant has produced the cheque dated 19.2.2020, bank endorsements dated 24.2.2020 and 24.4.2020, legal notice dated 22.5.2020, postal receipt dated 22.5.2020, postal acknowledgement dated 26.5.2020 and complaint and they are marked at Ex.P1 to P7.
24. The accused neither disputed the cheque nor his signature on the cheque or presentation of cheque for encashment or disonour of cheque for want of sufficient funds in the his account and for non cts cheque not allowed in its clearing or issuance of legal notice or service of legal notice. There is no material suggestions to PW.1 either to deny the issuance of 14 C.C.No.222/2021 cheque or the signature of the accused on the cheuqe or presentation of cheque for encashment or dishonour of cheque for want of sufficient funds in the account of the accused or for non cts cheque not allowed in its clearing or issuance of legal notice or service of legal notice.
25. But, on the other hand, during the cross examination of PW.1, it is suggested to him that the accused has availed a loan of Rs.50,000/- in the year 2013 and has already repaid the loan with interest from 2013 to 2019. It is also suggested to PW.1 that as per Ex.P2 & 3, the cheque was returned with bank memos and the bank has issued the endorsements.
26. Be that as it may, the accused in his evidence has stated that he has availed a loan of Rs.50,000/- from the compalianant in the year 2013 and issued a signed blank cheque to the complainant and he has already repaid the loan to the complainant.
27. From these materials placed on record, it is crystal clear that the accused by necessary implications has admitted the cheque vide Ex.P1 and his signature also finds a place on the cheque. The accused has also admitted about the presentation of cheque for encashment and dishonour of cheque for want of sufficient funds in the account of the accused and for 15 C.C.No.222/2021 non cts cheque not allowed in cts clearing. The accused has also admitted about the issuance of legal notice including service of legal notice.
28. However, on perusal of complaint averments, oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7, it clearly establishes that the complainant and accused were known to each other since longtime and therefore, the accused has availed a loan of Rs.1,00,000/- from the complainant and issued the cheque in question vide Ex.P1 in favour of the complainant and on presentation of cheque for encashment for 2 times before ICICI Bank, it was dishonoured for 2 times vide bank endorsements at Ex.P2 and P3 and therefore, the complainant has issued a legal notice vide Ex.P4, calling upon the accused to pay the cheque amount within 15 days from the date of receipt of legal notice and the legal notice was duly served on the accused as per Ex.P6. But, in spite of service of legal notice, the accused neither replied the notice nor make necessary arrangements to pay the cheque amount within time.
29. It is pertinent to note here that the cheque vide Ex.P1 is dated 19.2.2020. As could be seen from the documents at Ex.P2 & P3, on presentation of cheque for encashment for 2 times before ICICI Bank, it was 16 C.C.No.222/2021 dishonoured for 2 times vide bank endorsements dated 24.2.2020 and 24.4.2020. So, it is clear that the complainant has presented the cheque for encashment before the bank within the validity of the cheque and it was dishonoured for want of sufficient funds in the account of the accused.
30. As could be seen from the documents at Ex.P4 to P6, the complainant got issued a legal notice on 22.2.2020 giving 15 days time to the accused to pay the cheque amount and the legal notice was duly served on the accused as per Ex.P6 on 26.5.2020. But, in spite of service of legal notice, the accused neither replied the notice nor make necessary arrangements to pay the cheque amount.
31. It is also pertinent to note here that the courts were closed from 25.3.2020 till 29.11.2020 on account of Covid-19 Pandemic situation by virtue of various notifications issued by Hon'ble High Court of Karnataka dated 25.3.2020, 16.4.2020, 30.4.2020, 15.5.2020, 2.6.2020, 1.7.2020, 15.7.2020, 27.8.2020, 18.9.2020 and 30.9.2020 and the Limitation period for filing of complaint was extended till 29.11.2020 for the purpose of Sec.4 of Limitation Act and the Hon'ble Supreme Court in its order dated 23.3.2020 in suo moto Writ 17 C.C.No.222/2021 Petition (Civil) No.(s) 03/2020 extended the period of limitation with effect from 15.3.2020 till the date on which the lackdown was lifting and allowed the extension for a period of 15 days even after lifting the lockdown and whatever the dealy caused in presenting the complaint was already condoned vide order dated 5.1.2020.
32. So, it is crystal clear that the complainant has complied the mandates of Sec.138 of NI Act by adducing the oral evidence of PW.1 and by producing the documentary evidence at Ex.P1 to P7. Under these circumstances, when once the complainant has complied the mandates of Sec.138 of NI Act, this court has no option, but to draw the presumtpions in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
33. Admittedly, the presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NIAct are not conclusive proof, but they are rebuttable in nature. Therefore, when once the complainant has complied the mandates of Sec.138 of NI Act and when once the court has drawn the presumptions in favour of the complainant under the provisions of Sec.118 and 139 of NI Act, then the onus 18 C.C.No.222/2021 shifts on the accused to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
34. The learned counsel for the complainant has argued with force that the oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7 clearly establishes the loan transaction of Rs.1,00,000/- between the complainant and accused on 9.6.2019 and issuance of cheque vide Ex.P1 by the accused to the complainant towards legally recoverable debt of Rs.1,00,000/- and dishonour of cheque for want of sufficient funds in the account of the accused as per bank endorsements vide Ex.P2 and P3 and issuance of legal notice and service of legal notice and thereby, the complainant has complied the mandates of Sec.138 of NI Act and therefore, the presumptions are in favour of the complainant U/Sec.118 and 139 of NI Act.
35. It is further contended that the accused neither disputed the loan transaction nor issuance of cheque or dishonour of cheque for want of sufficient funds in his account or issuance of legal notice or service of legal notice, but he has admitted the said facts in his evidence. However, the accused has taken a contention that he has availed a loan of Rs.50,000/-
19C.C.No.222/2021 from the complainant in the year 2013 and issued the cheque for security purpose and he has already repaid the loan of Rs.50,000/- with interest and the complainant has failed to return the cheque and filed the case and the cheque was in the name of his minor daughter who opened an account in the year 2004 and she attained the age of majority in the year 2019 and changed into major account vide application dated 19.10.2019. But the accused has not proved the said defence before the court with legal evidence and not examined any independent witnesses before the court and thereby failed to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act and therefore, the evidence of complainant and documents has to accepted and the accused is liable for conviction U/Sec.138 of NI Act.
36. In support of his submission, the learned counsel for the complainant has relied upon a decision rendered by the Hon'ble Supreme Court in Crl.A.No.123/2021 in between M/S. Kalamani Tex & another V/s P.Balasubramanian, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme Court has pleased to held that even a blank cheque leaf, voluntarily signed and handed over 20 C.C.No.222/2021 by the accused, which is towards some payment, would attract presumption under section 139 of the NI Act, in the absence of any cogent evidence to show that the cheque was not issued for discharge of a debt.
37. The learned counsel for the complainant has also relied upon a decision rendered by the Hon'ble Supreme court in Crl.A.No.508/2019 in between Rohitbhai Jivanlal Patel V/s State of Gujarat and another, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme Court has pleased to held that, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. Mere denial would not fulfil the requirements of rebuttal as envisaged U/Sec.118 and 139 of NI Act. On the same principles, the learned counsel for the complainant has also relied upon a decision rendered by the Hon'ble High Court of Calcutta in CRA.No.685/2018 in between Bubrata Bose V/s Mithu Ghosh.
21C.C.No.222/2021
38. The learned counsel for the complainant has also relied upon a decision rendered by the Hon'ble Supreme Court in Crl.A.No.1020/2010 in between Rangappa V/s Mohan, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme Court has pleased to held that the very fact that the accused had failed to reply to the statutory notice under section 138 of NI Act leads to the inference that there was merit in the complainant's version. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under section 139 of NI Act has to be raised by the court in favour of the complainant.
39. The learned counsel for the complainant has also relied upon a decision rendered by the Hon'ble High Court of Kerala in Crl.R.P.No.244/2020 in between M.Valsan @ Wilson V/s State of Kerala and another, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High Court of Kerala has pleased to held that it is trite that the complainant need not adduce evidence regarding the original transaction or original consideration as required in a suit for realisaction of money. When the accused has not reasonable and probabal explanation as to how the 22 C.C.No.222/2021 cheque travelled from his possession to that of the complainant is certainly a crucial aspect while considering the acceptability of the evidence of the complainant.
40. The learned counsel for the complainant has also relied upon a decision rendered by the Hon'ble High Court of Delhi in Crl.L.P.No.559/2015 in between Sheela Sharma V/s Mahendra Pal, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High Court of Delhi has pleased to held that the mere advancement of the loan in cash, may entail consequences for the party acting in breach of section 269ss of the income tax Act. That is not the concern of the court. Whether or not, the complainant reflected the availability of the said amount in the income tax returns is also not a matter of concern for the court. That would again be an aspect to be considered by the income tax authroties. The advancement of loan, in cash is not prohibited in law. The transaction of advancement of loan in cash does not illegal. Such a transaction is enforceable at law. Breach of Sec.269ss of the income tax Act provides the penalty to which the person would be subjected to under section 271D of the income tax Act. Sec.271D does not provide that such a transaction would be null and void. On the same principles, the 23 C.C.No.222/2021 learned counsel for the complainant has also relied upon a decision rendered by the Hon'ble High Court of Madhya Pradesh in MCRC.No.34478/2021 in between Vijay Kumar V/s Om Prakash Dubey.
41. Per contra, the learned counsel for the accused has vehemently contended that the oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7 do not establish the loan transaction of Rs.1,00,000/- between the complainant and accused in the year 2019 and also do not establish the existence of legally recoverable debt of Rs.1,00,000/- and also do not establish the issuance of cheque in question towards legally recoverable debt of Rs.1,00,000/-. The evidence adduced by the complainant do not establish the guilt against the accused for the offence punishable U/Sec.138 of NI Act.
42. It is further contended that the accused has raised a probable defence and proved the same before the court with legal evidence of DW.1 and documentary evidence at Ex.D1 & D2 and also by eliciting the material facts in the evidence of PW.1 which clearly establishes that the complainant and accused were known to each other since 20 years and the complainant has been doing money lending business and therefore, 24 C.C.No.222/2021 the accused has availed a loan of Rs.50,000/- in the year 2013 and issued the blank signed cheque for Rs.50,000/- and the accused has already repaid the loan with interest, but the complainant has not issued any receipt for having received the loan and also not returned the cheque and got the cheque bounced and filed a false case.
43. It is further contended that the cheque was in the name of minor daughter of accused who opened the account in the year 2004 and it was chandged into major account in the year 2019 vide application dated 19.10.2019 and produced the documents at Ex.D1 & D2 in this regard and moreover the cheque was dishonoured with an endorsement as 'Non cts cheque not allowed in cts clearing' and therefore, in view of the cheque not in the name of accused and in view of the bank endorsements and in view of the publication by the Reserve Bank of India with regard to cts cheque, the offence U/Sec.138 of NI Act does not attract against the accused. Nothing is elicited in the evidence of DW.1 to disprove the defence taken by the accused and all the material suggestions put to DW.1 has been denied by DW.1 and therefore, the defence raised by the accused is more probable than that of the case made out by the 25 C.C.No.222/2021 complainant and therefore, the accused is entitled to an order to acquittal.
44. Now, keeping the arguments canvassed by the learned counsel for both the side and the principles laid down in the cited decisions and publication of Reserve Bank of India in respect of cts cheque in mind, let us consider as to whether the accused could able to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
45. It is the evidence of DW.1 that the complainant was known to him since 20 years who is doing money lending business and he has availed a loan of Rs.50,000/- from the complainant in the year 2013 and already repaid and he has issued a signed blank cheque to the complainant and was paying interest till October 2019 and the complainant had not issued any receipt and he has paid interest till October 2019 and requested the complainant to return the cheque for which, the complainant has torn the cheque and thereafter, he has presented the cheque before the bank and filed a false case against him.
46. It is the further evidence of DW.1 that the cheque was in the name of his minor daughter who 26 C.C.No.222/2021 opened the account in the year 2004 and it was changed into major account in the year 2019 vide application dated 19.10.2019 and he has produced the letter issued by bank and also bank statement as per Ex.D1 & D2 and he has not availed any further loan from the complainant.
47. Though, the accused has taken this bald contention, same has not been amplied before the court in any manner. The accused neither adduced any evidence of independent witnesses nor elicited anything in the evidence of PW.1 either to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 or to falsify the documentary evidence at Ex.P1 to P7 or to substantiate his probable defence or to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
48. No doubt, it is suggested to PW.1 that he has been doing money lending business; that the accused has aviailed loan of Rs.50,000/- only in the year 2013; that the accused has already repaid the loan of Rs.50,000/- from 2013 to 2019 which comes to Rs.2,95,000/-; that the accused has issued a blank signed cheque for Rs.50,000/- availed in the year 2013 27 C.C.No.222/2021 and therefore, it was dishonoured with an endorsement as 'Non cts cheque not allowed in cts clearing'; that he has taken a colour xerox of the cheque and torn the same in the presence of accused and thereafter based on the original cheque, he has filed the false case against the accused; that there was panchayath in the presence Sahukar and the accused has already repaid the loan; but he failed to return the cheque and filed the false case.
49. But, all these material suggestions have been specifically denied by PW.1. Therefore, it is said that the denied suggestions are always remained as suggestions only and not come in the way of accused either to substantiate his probable defence or to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act or to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 or to falsify the documentary evidence at Ex.P1 to P7.
50. However, there is no material suggestions to PW.1 on behalf of accused either to deny the loan transaction or to deny the issuance of cheque or the signature of the accused on the cheque or presentation of cheque for encashment or dishonour of cheque for 28 C.C.No.222/2021 want of sufficient funds in the account of the accused and as 'non cts cheque not allowed in cts clearing' or to deny the issuance of legal notice or service of legal notice. In fact, it is forthcoming in the evidence of PW.1 that he has been doing real estate business and also contract work from 2017 and was having sufficient source of income so as to lend the loan of Rs.1,00,000/- to the accused.
51. It is pertinent to note here that if really the accused has issued a signed blank cheque to the complainant in the year 2013 or 2019 towards security for loan of Rs.50,000/- and if really the accused has already repaid the loan to the complainant with interest and if really the complainant has failed to return the cheque to the accused and if really the complainant has taken a colour xerox of the cheque and torn the same in presence of accused and thereafter, presented the cheque before the bank and filed the case by misusing the cheque in question or if really the cheque in question was in the name of minor daughter of the accused and thereafter, it was changed into major account in the year 2019 as per Ex.D1, then the accused could have definately either issued a reply notice to the complainant or issued stop payment instructions to the concerned bank to stop the payment or the accused could have 29 C.C.No.222/2021 lodged a complaint before the jurisdictional police station or before any police station or before the court or he could have taken some legal action against the complainant for misuse of cheque or he could have obtained the receipt from the complainant for having repaid the loan of Rs.50,000/- with interest to the complainant. But the accused has not done so. No explanation as such forthcoming either in the evidence of DW.1 or during the cross-examination of PW.1. Under these circumstances, in the absence of such an explanation in this regard on the part of the accused, an adverse inference has to be drawn against the defence raised by the accused. The very inaction on the part of the accused in this regard creates a doubt about the defence raised by the accused and leads to an adverse inference against a probable defence raised by the accused.
52. But, on the other hand, DW.1 in his cross- examination has admitted that he studied upto PUC and working as a pigmi collector at MSCB Bank since 18 years and therefore, he is very much aware about all the bank transactions. It is also stated by DW.1 that he has not received any documents or receipt from the complainant for having paid interest on every month and he do not have any documents to show that he has 30 C.C.No.222/2021 already repaid the entire loan to the complainant with interest. It is also admitted by DW.1 that he has issued the cheque in question to the complainant towards repayment of loan.
53. It is also stated by DW.1 that he has not produced the representation dated 7.9.2022 before the court. It is also admitted by DW.1 that at the time of issuing the cheque to the complainant, he himself was maintained account bearing No.100200500256 and his daughter has not lodged any complaint before the police station for misuse of cheques belongs to her account. It is also admitted by DW.1 that since the cheque in question belongs to his account, when it was presented before the bank for encashment, it was dishonoured for want of sufficient funds in the account of the accused and if the cheque was not belongs to his account, then the bank would issued an endorsement as mismatch.
54. It is pertinent to note here that the cheque is dated 19.2.2020 which was issued by the accused in favour of the complainant and the signature of the accused finds a place on the cheque which is not in dispute. It was dishonoured for want of sufficient funds in the account of the accused and not in the account of daughter of accused. But the accused has obtained the 31 C.C.No.222/2021 letter from bank only on 7.9.2022 which is admittedly subsequent to the presentation of cheque and dishonour of cheque and issuance of notice and presentation of complaint. The accused has not produced the representation dated 19.10.2019 or 7.9.2022. It is an admitted fact that the accused himself maintained the account to which the cheque in question belongs to. Under these circumstances, the contention of the defence side that account is not belongs to accused and cheque is not belongs to accused and cheque was dishonoured as non cts cheque not allowed in cts clearing and therefore, offence U/Sec.138 of NI Act does not attract against the accused is not sustainable under law and therefore, cannot be accepted.
55. It is pertinent to note here that at one point of time, DW.1 has stated that he has availed a loan of Rs.50,000/- from the complainant in the year 2013. But, at another point of time, DW.1 has stated that he has availed a loan of Rs.50,000/- from the complainant in the year 2019. At another point of time, DW.1 has stated that he has issued a blank signed cheque to the complainant for loan of Rs.50,000/- availed in the year 2013. At another point of time, DW.1 has stated that he has paid the interest till October 2019. But, at another point of time, DW.1 has stated that he has repaid the 32 C.C.No.222/2021 loan of Rs.50,000/- to the complainant in the month of October 2019.
56. Further, at another point of time, DW.1 has stated that the complainant has torn the colour xerox cheque in his presence. But, at another point of time, DW.1 has stated that after repayment of loan, the complainant has returned the cheque in question and he has produced the same before the court. But he has not produced said cheque returned by the complainant. But, at another point of time, DW.1 has stated that he has issued the cheque in question towards repayment of loan of Rs.50,000/-. Further, at another point of time, DW.1 has stated that the cheque belongs to his minor daughter and thereafter, it was changed into major account. But, at another point of time, DW.1 has stated that he only issued the blank cheque to the complainant.
57. So, from these evidence of DW.1 and material suggestions put to PW.1, it is crystal clear that the accused has kept on changing his version from stage to stage and the accused has also kept on changing his defence from stage to stage and thereby laid on the material facts before the court. Under these circumstances, utmost confidence cannot be reposed on 33 C.C.No.222/2021 the oral evidence of DW.1 and much reliance cannot be placed on the documents at Ex.D1 & D2. Therefore, the oral evidence of DW.1 and the documentary evidence at Ex.D1 & D2 is not sufficient either to rebut the statutory presumptions available in favour of the complainant U/Sec.118 and 139 of NI Act or to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 or to falsity the documentary evdience at Ex.P1 to P7.
58. On appreciation of entire oral and documentary evidence placed on record, it is found that the accused has availed a loan of Rs.,1,00,000/- from the complainant in the 2nd week of June 2019 and in repayment of the loan of Rs.1,00,000/-, the accused has issued the cheque vide Ex.P1 and on presentation of cheque for encashment within its validity, it was dishonoured for want of sufficient funds and as non cts cheque not allowed in cts clearing vide bank endorsements at Ex.P2 and P3 and therefore, the complainant got issued a legal notice vide Ex.P4 within the stipulated time from the date of receipt of bank endorsements and the said notice has been duly served on the accused as per Ex.P6. But, the accused neither replied the notice nor made necessary arrangements to pay the cheque amount and therefore, the complainant 34 C.C.No.222/2021 has presented the complaint before the court and thereby complied all the mandates of Sec.138 of NI Act.
59. It is pertinent to note here that the accused has clearly admitted the issuance of cheque and also his signature on the cheque including dishonour of cheque for want of sufficient funds in the account of the accused and also service of legal notice. But the accused has failed to raise a probable defence and also failed to prove the same before the court with legal evidence and thereby failed to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act. Under these circumstances, there are no reasons to disbelieve or to discard the oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7.
60. Therefore, there is some legal and considerable force in the submission of learned counsel for the complainant that the oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7 clearly establishes the issuance of cheque for legally recoverable debt of Rs.1,00,000/- and also dishonour of cheque for want of sufficient funds in the account of the accused including service of legal notice, but the accused neither replied the notice nor made necessary arrangements to pay the 35 C.C.No.222/2021 cheque amount and in fact the accused has admitted the issuance of cheque and also his signature on the cheque and therefore, the presumptions are always in favour of the complainant U/Sec.118 and 139 of NI Act, but the accused neither replied the notice nor made necessary arrangements to pay the cheque amount and also failed to raise a probable defence and also failed to prove the same before the court with legal evidence and in fact, the accused kept on changing his version from stage to stage and also kept on changing his defence from stage to stage and thereby laid on the material facts and therefore, the accused is liable for conviction U/Sec.138 of NI Act and the decisions cited in this regard are also applicable to the present facts and circumstances of the case.
61. But, on the other hand, the arguments of the learned counsel for the accused that the oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7 do not establish the existence of legally recoverable debt of Rs.1,00,000/- and the complainant has failed to prove the existence of legally recoverable debt of Rs.1,00,000/- as on the date of issuance of cheque, but the accused has raised a probable defence and also proved the same before the court with oral evidence of DW.1 and documents at Ex.D1 and 2 which clearly establishes 36 C.C.No.222/2021 that the accused has already repaid the loan of Rs.50,000/- with interest to the complainant, but the complainant has failed to return the cheque and he had taken a colour xerox of the cheque and torn the same in the presence of accused by retaining original cheque with him and thereafter, he has presented the cheque and got the cheque bounced and filed case against the accused and the cheque was in the name of daughter of accused and later on it was converted into major account in the year 2019 and the cheque was also dishonoured as non cts cheque not allowed in cts clearing and hence, the offence U/Sec.138 of NI Act does not attract against the accused and thereby the acucsed has rebutted the presumptions U/Sec.118 and 139 of NI Act and therefore, the accused is entitled to an order of acquittal is not sustainable under law and therefore, cannot be accepted.
62. Therefore, for the reasons discussed above, this court is of the considered view that the materials placed on record clearly establishes the guilt against the accused for the offence punishable U/Sec.138 of N.I.Act. Hence, I hold that the complainant has proved the guilt against the accused for the offence punishable U/s.138 of NI Act. Hence, I answer point No.1 in the 'Affirmative'.
37C.C.No.222/2021 63 . POINT. No.2:- The provisions of Section 138 of N.I.Act provides punishment for imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of cheque or with both. In the present case, the complainant and accused were known to each other since several years and the accused has availed the loan of Rs.1,00,000/- in the month of June 2019 for his financial problems. Therefore, considering the nature of loan transaction between the complainant and accused including facts and circumstances of the case and time taken for disposal of this case, this Court is of the considered view that if the following sentence is awarded, then it would meet the ends of justice. Hence, in view of my findings on point No.1, I proceed to pass the following:-
ORD ER The accused is found guilty for the offence punishable U/s.138 of Negotiable Instruments Act.
Hence, acting U/sec.255(2) of Cr.P.C, the accused is convicted and sentenced to pay fine of Rs.1,20,000/-(Rupees One Lakh Twenty Thousand Only), in default of fine amount, he shall undergo simple imprisonment for 6 months for the offence punishable under section 38 C.C.No.222/2021 138 of N.I.Act.
Out of the fine amount collected from the accused, an amount of Rs.1,15,000/- (Rupees One Lakh Fifteen Thousand only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining fine of Rs.5,000/-
shall be adjusted towards the cost of state expenses.
The bail bond of the accused shall be in force till the appeal period is over as contemplated under the provisions of Sec.437(A) of Cr.P.C.
The cash surety of Rs.2,000/-
deposited by the accused vide Q.No.4025 dated 8.6.2022 shall be refunded to the accused after appeal period is over with due identification.
Office to supply the copy of the Judgement to the accused forthwith at free of cost.
(Dictated to the stenographer, transcribed by her, print out taken by her verified, corrected and then pronounced by me in the open Court on this the 27th February 2023).
(N.M.RAMESHA) XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri.Rajath Dwarka
39
C.C.No.222/2021
2. List of documents exhibited on behalf of the Complainant:-
Ex.P.1 : Original Cheque. Ex.P.1(a) : Signature of the Accused. Ex.P.2 & 3 : Bank Memos. Ex.P.4 : Copy of Legal Notice. Ex.P.5 : Postal Receipt. Ex.P.6 : Postal Acknowledgment Ex.P.7 : Complaint
3. List of witness/s examined on behalf of the Accused:-
DW.1 ; Sri.R.Prasad
4. List of documents exhibited on behalf of the Accused:-
Ex.D.1 : Letter to the Bank Ex.D.2 : Bank Statement (N.M.RAMESHA) XVI ACMM, Bengaluru City.
40C.C.No.222/2021 27.02.2023 Judgment pronounced in open court, (vide separate order) ORDER The accused is found guilty for the offence punishable U/s.138 of Negotiable Instruments Act.
Hence, acting U/sec.255(2) of Cr.P.C, the accused is convicted and sentenced to pay fine of Rs.1,20,000/-(Rupees One Lakh Twenty Thousand Only), in default of fine amount, he shall undergo simple imprisonment for 6 months for the offence punishable under section 138 of N.I.Act.
Out of the fine amount collected from the accused, an amount of Rs.1,15,000/- (Rupees One Lakh Fifteen Thousand only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining fine of Rs.5,000/-
shall be adjusted towards the cost of state expenses.
The bail bond of the accused shall be in force till the appeal period is over as contemplated under the provisions of Sec.437(A) of Cr.P.C.
The cash surety of Rs.2,000/-
deposited by the accused vide Q.No.4025 dated 8.6.2022 shall be 41 C.C.No.222/2021 refunded to the accused after appeal period is over with due identification.
Office to supply the copy of the Judgement to the accused forthwith at free of cost.
XVI ACMM, Bengaluru City