Bangalore District Court
Smt. G.N.Rashmi vs Sri.Suresh.N.G on 23 April, 2021
IN THE COURT OF THE XX ADDL.CHIEF
METROPOLITAN MAGISTRATE AT BENGALURU CITY
Dated this the 23rd day of April 2021
PRESENT: KALPANA.M.S.,
B.Sc., LL.M.,
XX ADDL. C.M.M.
Bengaluru.
C.C.No. 24989/2017
Complainant : Smt. G.N.Rashmi,
Aged about 33 years,
W/o Sri.Somshekar,
Residing at No.70, 1st Main,
7th Cross, Bank Colony,
Laggere,
Bengaluru - 560 058.
{ By Sri.M.Srinivasa- Advocate}
Vs.
Accused : Sri.Suresh.N.G.
Aged about 45 years,
S/o Sri. Late Gangappa,
Residing at No.193, 2nd Floor,
15th Main Road,
G.K.W.Layout,
Hegganahally, Peenya 2nd Stage,
Bengaluru - 560 058.
{ By Sri.G.K.Venkata Reddy - Advocate}
2 C.C.24989/2017
Offence complained of : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final Order : Accused is Acquitted
Date of Order : 23-04-2021
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 & 142 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused alleging that, he has committed the offence.
02. The sum and substance of the complaint, is as follows;
The accused is known to her for a long time. In the month of February 2016, the accused had obtained hand loan of Rs.50,00,000/- from the complainant for his 3 C.C.24989/2017 family, legal necessities, business purposes and agreed to repay the same within six months. Accused has not returned the money as agreed upon. After several demands and requests, towards discharge of his liability, accused has issued following three cheques;
1. cheque bearing No.390423 dated 26.08.2017 for Rs.20,00,000/-,
2. cheque bearing No.390426 dated 02.09.2017 for Rs.21,00,000/- &
3. cheque bearing No.390427 dated 02.09.2017 for Rs.9,00,000/-, totally Rs.50,00,000/-.
All the cheques were drawn on State Bank of India, Laggere Branch, Bengaluru- 560 058. Complainant presented the said cheques for encashment through her banker i.e., State Bank of India, Peenya Industrial Area Branch, Bengaluru and the said cheques returned with an endorsements "Funds Insufficient" dated 07.09.2017. 4 C.C.24989/2017 Thereafter, complainant got issued legal notice on 20.09.2017 to accused. The notice was duly served to the accused on 22.09.2017. Accused has not complied the notice issued by the complainant. Hence, this complaint.
03. On filing of complaint, this court has taken cognizance for the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, accused enlarged on bail and plea was recorded as per section 251 of Cr.P.C. Accused has stated the defence that, he is not liable to pay any amount to the complainant.
04. Learned Counsel for complainant prays to treat sworn statement as examination-in-chief and to consider the documents marked as Ex.P.1 to 20. In support of her 5 C.C.24989/2017 case, she examined her sister and husband as PW.2 & PW.3. The statement under section 313 of code of criminal procedure is recorded, read over and explained to the accused. The defence of the accused is total denial. Further, Learned Counsel for accused submits that, accused has not got defence evidence.
05. Complainant relied on the following decisions.
1. CDJ 2021 SC 194 Sumeti Vij Vs. M/s Paramount Tech Feb Industries
2. CDJ 2020 SC 418 Rangappa Vs. Mohan
3. AIR 2019 SC 2446 Bir Singh Vs. Mukesh Kumar
4. CDJ 2019 SC 366 Rohitbahi Jivanlal Patel Vs. State of Gujarat and another
5. CDJ 2019 SC 934 M/s. Shree Daneshwari Traders Vs. Sanjay jain and another 6 C.C.24989/2017
6. C.C.No.24489/2016 N.S.Harish Vs. S.Manjunath
7. AIR 2018 SC 3601 T.P.Murugan Vs. Bojan
8. 2007 CRI.L.J.(NOC) 520 (KER) Sanjeev P.R. Vs. Thriveni Credit Corporation, Thodupuzha & Another
9. 2006 CRI.L.J.1, Gorantala Venkateswara Rao Vs. Kolla Veera Raghava Rao and another
10. 2019(1) Kar.L.R.185, Yogesh Pojary Vs. K.Shankara Bhat
11. 2017 Cr.R 530, (Kant) between C.N.Dinesha Vs. Smt. C.G.Mallika
12. Writ Petition No.29144/2018 Dr.M.Krishna Shetty Vs. Sri.H.R.Nagabhushan
13. 2016 in CRL.L.P. 559/2015, Hon'ble Delhi High Court, Sheela Sharma Vs. Mahendra Pal
06. Accused relied on the following decisions.
01. ILR 2008 KAR 4929 7 C.C.24989/2017 Shiva Murthy Vs. Amruthraj
02. 2015(1) SCC 99 Subramani Vs. Damodara Naidu
03. 2016(5) KCCR 1341 Smt. Threja Vs. Smt. Jayalaxmi
04. 2009 Crl.J.3777 Sanjay Mishra Vs. Ms. Kanishka Kapoor @ Nikki and Anr
07. Heard the Learned Counsel for complainant and accused. Perused the written arguments filed on behalf of the complainant, citations and materials on record.
08. The points that arise for my consideration are as follows;
POINTS
1. Whether this complaint is maintainable in respect of;
a). cheque bearing No.390423 dated 26.08.2017 for Rs.20,00,000/-, 8 C.C.24989/2017
b). cheque bearing No.390426 dated 02.09.2017 for Rs.21,00,000/- ?
2. Whether the complainant proves that, accused issued a cheque bearing No.390427 dated 02.09.2017 for Rs.9,00,000/-, towards discharge of legally enforceable debt, which was returned unpaid on presentation and also not complied the notice issued by the complainant and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
3. What Order?
09. My answer to the above points is as follows;
1. Point No.1: In the Negative
2. Point No.2: In the Negative
3. Point No.3: As per final order for the following;
REASONS
10. POINT No.1: Complainant has filed this complaint alleging that accused has committed offence 9 C.C.24989/2017 under section 138 of N.I. Act. She pleads and asserts that, towards discharge of his liability, accused has issued following two cheques and another cheque;
1. cheque bearing No.390423 dated 26.08.2017 for Rs.20,00,000/-,
2. cheque bearing No.390426 dated 02.09.2017 for Rs.21,00,000/-.
The said cheques came to be dishonoured on presentation. Complainant has issued notice within time stipulated calling upon the accused to pay the amount covered under cheque. Inspite of service of notice, accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint. She further relied on the documents from Ex.P.1 to 20. In support of her case, she examined her sister and husband as PW.2 & PW.3. All the witnesses were subjected to cross examination. 10 C.C.24989/2017
11. In this scenario, let us scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 to 3 are cheques dated 26.08.2017 & 02.09.2017, Ex.P. 4 to 6 are bank endorsements dated 07.09.2017, Ex.P.7 is legal notice dated 20.09.2017 and the said notice duly served to the accused dated 22.09.2017, Ex.P.8 is the postal receipt, Ex.P.9 is the Postal acknowledgement, Ex.P.10 is the bank challan, Ex.P.11 & 12 are the gold pledge receipts dated 09.01.2016 & 10.08.2016, Ex.P.13 to 16 are the receipts, Ex.P.17 to 20 are the lease deeds. This complaint came to be filed on 11.10.2017. Based on the material documents, complainant relied on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act.
11 C.C.24989/2017
12. It is settled point of law that, aforesaid statutory presumptions are rebuttable in nature. The accused can take probable defence and rebut the presumption available to the complainant. Let us examine whether accused has successfully rebutted the presumptions of law. It is the specific defence of the accused that, complainant is stranger and he has not taken any amount of Rs.50,00,000/- from the complainant. She was running a chit business, wherein accused was one of the members/subscribers. In-connection with the said chit transaction, accused has issued disputed blank cheques for the purpose of the security. Complainant has misused those cheques by filling up of the excess amount as per his whims and fancy and filed this false complaint. Accused has also denied the financial capacity of the complainant to lend Rs.50,00,000/- to the accused. On these grounds, accused sought for dismissal of the 12 C.C.24989/2017 complaint and consequent acquittal. Learned Counsel submitted that, there is no defence evidence.
13. Learned Counsel for the accused put forth further arguments that, Ex.P.1 cheque bearing No.390423 dated 26.08.2017 and Ex.P.2 cheque bearing No.390426 dated 02.09.2017 clearly depicts that, those cheques are valid for an amount of Rs.10,00,000/- and under. Whereas, the amount mentioned in both the cheques is Rs.20,00,000/- each. Accordingly, it is contended that, this complaint based on Ex.P.1 & 2 cheques is not maintainable.
14. Before adverting into merits of the case, it is relevant to consider the basic objections of the accused regarding maintainability of the complaint due to invalidation of the Ex.P.1 & 2 cheques, as it goes to the root of the case. The accused invited the attention of the court to the printed 13 C.C.24989/2017 words present on Ex.P.1 & 2 cheques , which reads as under;
"VALID FOR Rs.10.00 Lacs & UNDER"
Placing reliance on the aforesaid printed words depicted in the cheques, it is vehemently argued on behalf of the accused that, the disputed cheques at Ex.P.1 & 2 is valid upto a maximum limit of Rs.10,00,000/-. Whereas, in Ex.P.1 & Ex.P.2, the amount mentioned is Rs.20,00,000/- & Rs.21,00,000/- respectively i.e., beyond maximum limit mentioned on the cheques. Accordingly, it is argued that, the disputed cheques are beyond the maximum ceiling limit prescribed by banker and hence not valid in the eye of law.
15. To support this contention, accused relied on the admission elicited from the mouth of PW.1, which reads as under;
14 C.C.24989/2017
"ನಪ.1 ರರದ ನಪ.2 ರಲರರವ ವವದತ ಚಕರ ಕ ಗಳಲ ರರ. 10 ಲಕ ಅಥವ ರರ. 10 ಲಕಕಕರತ ಕಡಮ ಮತತಕಕ ಮತ ತ ಮನನತ ಹರರದದಯರದರ ಮರದದಸಲಗದ ಎರದರ ಸರ. ..... ರರ. 10 ಲಕಕಕರತ ಹಚಚನ ಮತತ ಬರದರಕರರಡರರವದರರದ ನಪ.1 ಮತರತ ಕ ಗಳರ ಮನನತ ಕಳದರಕರರಡವ ಎರದರ ಗರತತಲಲ."
ನಪ.2 ಚಕರ Relying on the this portion of evidence, it is argued that, at the first instance the clearance center verifies the balance amount available in the account. It is further clarified that, after verifying the cheque amount, which is more than the ceiling limit of the cheques, neither the bank nor cheque clearance processing center, will honour the cheques. Moreover, complainant has not denied the aforesaid suggestion regarding invalidity of the cheque, but only expressed ignorance. On this line of argument, Learned Counsel for the accused sought for dismissal of the case.
16. To counter this line of argument, Learned Counsel for the complainant has relied on the computer out put of 15 C.C.24989/2017 Policy on multi city cheques dated 25.10.2019 and state bank of India, cheque collection policy - 2015 and argued that, as per clause 4 of the said policy, there will be no limit of payment of MCC (Multi city cheques) at home branch. Ex.P.1 & 2 cheques were presented to the home branch and hence the upper limit of Rs.10,00,000/- printed on the said cheques, is not applicable. Accordingly, it is argued that, accused has taken a lame contention of invalid cheques, which is not maintainable in the eye of law.
17. This court has carefully perused the computer outputs of policy of state bank of India and Reserve Bank of India, relied by the complainant. At the out set, there is nothing on record regarding authenticity of these computer outputs. Even otherwise, complainant has not chosen to examine bank official, who is a competent person to say about authenticity of the policies relied by 16 C.C.24989/2017 him or enlighten the court regarding the procedure followed by the banks in case of presentation of the cheques similar to Ex.P.1 & 2. No doubt, complainant has buttressed the arguments that, bank's slip carries presumptive value under section 146 of NI Act. The cheques return memo as per Ex.P.4 & 5 show that, aforesaid cheques returned unpaid for want of sufficient funds and not for other reason. Therefore, the burden to prove the contrary i.e., the cheques were dishonoured for the reason of cheque amount exceeds the upper limit, is on the accused. Accordingly, it is argued that, it is for the accused to examine bank official to prove the contrary. It is difficult to accept this contention put forth on behalf of the complainant. Accused has shown the contrary by relying on the printed words depicted on the cheques regarding upper limit of encashment, wherein, the cheque amount exceeds the upper limit. That apart, the letter and spirit of provision of law enshrined section 138 17 C.C.24989/2017 of NI Act, postulates that, complainant has to prove the ingredients of section 138 of NI Act along with compliance of proviso (a) to (c) of the said section, in order to raise statutory presumptions under section 139 and 118 of NI Act. Obviously, it contains and includes the presentation of valid cheques for encashment. Thus, the initial presumption of proving the aforesaid aspects heavily lies on the complainant in order to take shelter under the statutory presumptions.
18. Nevertheless, for the sake of arguments, if we consider the policy of SBI relied by the complainant, which reads as under;
4. Upper Limit of MCCs:
* There will be no limit of payment of MCC at home branch.18 C.C.24989/2017
* There will be a cap on payment of MCC at non-home branches with legend / ceiling mentioned on the Cheques as detailed hereunder:-
" Valid upto Rs..........lacs at Non-Home branch"
In the second condition, it is clearly stated that, in case of presentation of multi city cheque at non home branches, there will be gap on payment as detailed that, 'valid upto Rs........lacs at non home branch'. From this general definition, it is crystal clear that, if the RBI or SBI intends to put a cap on payment of MCC at Non- home branch, there will be specific mention of validity amount or upper limit payable at 'Non-home branch'. The said words are absent in the Ex.P.1 & 2- cheques. If at all, it is printed as ' valid for Rs.10 lacs and under in Non- home Branch', the situation would be different and this court can appreciate the line of arguments put forth on behalf of the complainant that, there will be no limit for payment of MCC cheques at home branch. But, printing 19 C.C.24989/2017 of plain words as ' valid for Rs.10 lacs and under', leads to irresistible inference that, the maximum limit for payment of Ex.P.1 & 2- cheques is Rs.10,00,000/- & under in any branches, not with standing the fact of presentation in home branch or non home branch.
19. Any how, at the cost of repetition, the policy details of RBI and SBI relied by the complainant is a computer out put and its authenticity is not established. At the same time, complainant has taken steps to place the testimony of the banker. In this scenario, court may take judicial note of the testimony of the bank manager placed before this court in a case with similar facts and circumstances. In CC. No.26747 OF 2016, disposed on 5th October 2019, by this court, the Bank Manager,examined as CW.1 testifies before the court in respect of the subject cheques, wherein the maximum/ upper limit is printed as Rs.5,00,000/- & under that, 20 C.C.24989/2017 "the disputed cheques are valid only upto the limit of Rs.5,00,000/- in all the branches of SBM, which later on merged with SBI." The Bank Manager is competent person to say about the validity of the cheques containing the upper limit for encashment. Under these circumstances, if the court ventures to weigh the testimony of bank manager given before the court in other judicial proceedings, with the computer output of bank's policy in respect of multi city cheques, obviously balance tilts in favour of the testimony of the competent person given in the judicial proceedings. Thus, this court opined that, it is safe to rely on the testimony of the Bank Manager, who asserts that, a cheque for an amount exceeding the upper limit mentioned / printed on the cheque is not a valid negotiable instrument.
20. As rightly contended, the dishonour of the disputed cheques is not due to the intentional mistake or fault of 21 C.C.24989/2017 the accused. Moreover, prosecution under section 138 of NI Act, could be launched only after compliance of all the ingredients of section 138 (a) to (c) of NI Act. Obviously, it includes the dishonour of valid cheques. From the discussion made supra, it is crystal clear that, Ex.P.1 & Ex.P.2 cheques are not valid negotiable instruments. Therefore, this court has no hesitation to hold that, present complaint is not maintainable in respect of Ex.P.1 cheque bearing No. 390423 and Ex.P.2 cheque bearing No 390426. Accordingly, this point answered is in the negative.
21. Point No.2: As for as Ex.P.3 cheque is concerned, accused seriously disputes the financial capacity of the complainant to lend alleged Rs.50,00,000/-. To substantiate this defence, accused relied on the material information elicited during the course of cross
-examination. In the evidence, complainant states that, 22 C.C.24989/2017 she has generated Rs.50,00,000/- amount out of agricultural income, hand loan from the sisters-in-law and by pledging golden ornaments. Surprisingly, there is no whisper about said source of income or aforesaid description of mobilization of funds in the complaint. It goes without saying that, any amount of evidence bereft of pleadings is not admissible. There is no hurdles for considering aforesaid proposition of law, as proceedings under section 138 of NI Act is quasi-civil in nature. Nevertheless, complainant states that, she has not taken or demanded any interest from the accused. Such being the case, it is difficult to believe that, complainant inspite of paying interest to the gold loan as per Ex.P.11 & 12, failed to demand interest from the accused or lent interest free hand loan of huge amount of Rs.50,00,000/- to the accused. No prudent person would avail loan for interest and lend the same amount as interest free loan to some third party. This aspect throws shadow on the claim of the 23 C.C.24989/2017 complainant, especially in respect of her financial capacity, proof of which is mandatory pre- requisite to raise statutory presumptions.
22. In the course of evidence, complainant contends that, she has mobilized an amount of Rs.50,00,000/- by utilizing the lease amount of four houses, agricultural income, savings and loan obtained by her sisters-in-law. She further contends that, there is no impediment to produce the lease deeds to show the actual lease amount received by the complainant. For better appreciation, the relevant portion of the cross examination of the complainant/PW.1, is culled out as under;
" ..... 4 ಮನಗಳನರ ನ ಭರಭಗನಕಕ ಹಕದದ ಹಣ,
ವನವಸಯದರದ ಬರದ ಹಣದ ಉಳತಯದ ಹಣ ಹಗರ
ನನನ ಅತತಗಯರದ ಪಡದ ಹಣವನರ ನ ಒಟರ
ಟ ಗರಡಸ
ಕರಟಟದನ.
ಮನಗಳನರ ನ ಭರಭಗನಕಕ ಹಕಸಕರರಡವರ ಹಸರರಗಳರ, ರರಪ ತಪಪಸಸಮ, ಶರಭಭ, ಸರಜತಮ ಮ , ಅರರಣ ಹಗರ ಸರತರಭಷ ಆಗರರತತದ. ತಲ 5 ಲಕಕಕ ಒರದರರದರ ಮನಯನರ ನ ಹಕದವ. ಭರಭಗನದ ದಖಲಗಳನರ ನ ಹಜರರಪಡಸಲರ ತರರದರ ಇಲಲ."
24 C.C.24989/2017From this part of evidence, it is evident that, as per the case of the complainant, she mobilized an amount of Rs.20,00,000/- out of lease amount obtained by leasing out the properties belongs to her husband. To support this contention, complainant has produced lease deeds from Ex.P.17 to Ex.P.20. Accused disputed the said lease deeds on the ground of created document after partial cross examination of PW.1 regarding non production of any documents to show the source of income to lend Rs.50,00,000/- to the accused. In this scenario, the burden lies upon the complainant to prove that, the properties scheduled in Ex.P.17 to Ex.P.20 stand in the name of husband of the complainant. For that purpose, complainant might have produce the property documents. But, for the reasons best known to her, complainant neither produced property document nor examined the lessees or tenants. It is worth to note that, there is an admission attributable to the complainant that, she has no 25 C.C.24989/2017 impediment to place the testimony of the tenants before the court. Inspite of that, no explanation forthcoming for non examination of alleged tenants of the husband of the complainant. Therefore, this court is hesitant to place reliance on the un registered lease deeds from Ex.P.17 to Ex.P.20, which are not supported with cogent evidence.
23. Further, complainant has produced gold loan documents of Sumukha Merchants Finance company, as per Ex.P.11 & 12. Said documents reads that, complainant has pledged gold ornaments and availed loan of Rs.5,05,000/- repayable with interest 1.50%. As discussed earlier, this aspect creates doubt in the mind of the court that, complainant having obtained gold loan on interest of 1.5% has allegedly lent the said amount to the accused without interest. Above all, as rightly contended, Ex.P.12 - Sumukha Gold Loan Receipt, is dated 10.08.2016. Complaint averments reads that, the impugned hand loan 26 C.C.24989/2017 transaction taken place in the month of February 2016. In other words, it appears that, the gold loan was availed after six months from the date of alleged transaction. Anyhow, no independent evidence is placed to prove Ex.P.11 & 12 documents. It is pertinent to note that, complainant has placed the testimony of her husband, who was examined as PW.3. This witness asserts that, complainant has mobilized an amount of Rs.10,00,000/- by pledging the gold ornaments of complainant and PW.3. But, Ex.P.11 & 12 shows that, the gold loan amount is Rs.5,05,000/-. PW.3 has not produced any documents to show pledging of his ornaments. This is another suspicious circumstances surrounded the claim of the complainant.
24. Furthermore, complainant has produced receipts as per Ex.P.13 & 14 issued by M/s.Madhu Traders, Hassan. These two documents were marked subject to objection of 27 C.C.24989/2017 the opposite party regarding proof and relevancy. Subsequently, complainant has not produced any document to show that, her family members are owning/holding agricultural properties. If at all, complainant had agricultural income of Rs.10,00,000/- per year, what prevented her to produce the landed property documents or any other document to show the agricultural income, is not satisfactorily explained. It is also to be noted that, complainant has admitted in her evidence that, she is going to produce the documents pertaining to the landed property and to show the agricultural income, but those documents are not before the court. If at all, it is believed that, complainant has got an agricultural income, naturally, the amount has to be kept in the bank accounts of complainant or her husband. If the bank statement is placed before the court, it would clinches the point in issue. To put it other way, complainant has not placed acceptable documents to 28 C.C.24989/2017 believe that, she has got agricultural income of Rs.10,00,000/- per year and the said amount was utilized to lend alleged loan amount to the accused. So also, PW.3, who is none other than the husband of the complainant has not placed any acceptable evidence to show that, his father had an amount of Rs.10,00,000/- at the relevant point of time, to hand over the said amount to complainant for the purpose of lending in favour of the accused.
25. Further, complainant asserts that, she has received an amount of Rs.5,00,000/- from her sister by name Suma.S.M., who has been examined as PW.2 before the court. This witness was subjected to cross examination and it has been elicited that, she has not got any documents to show the availability of Rs.5,00,000/- in the month of January 2016. So also, there is no such documents to show the source of income to lend Rs.5,00,000/- in favour of the complainant. This shows 29 C.C.24989/2017 that, except oral testimony of PW.2, noting is placed before the court to show the financial capacity of the said witness at the given point of time. Surprisingly, PW.3 says that, Rs.5,00,000/- amount was taken from his sister and another Rs.5,00,000/- was taken from his another sister Suma.S.M. But, PW.2 - Suma.S.M., deposes that, she is sister of complainant. If that is the case, the sister of husband of the complainant by name Suma and another sister, whose name is not mentioned by PW.3, are not examined before the court. So also, no iota of evidence is placed to show the financial capacity of the sisters of the husband of the complainant. Thus, these contentions of complainant pertaining to mobilization of funds taken in the course of evidence for the first time without pleadings to that effect in the complaint, does not inspire the confidence of the court. Even otherwise, as per the complainant, she mobilized an amount of Rs.20,00,000/- out of lease amount, Rs.5,00,000/- from gold loan, taken 30 C.C.24989/2017 Rs.5,00,000/- from her sister - PW.2 and shown an amount of around Rs.8,00,000/- through receipts from Ex.P.14 to Ex.P.16, on calculation amounting to Rs.38,00,000/-. The complaint averments as well as evidence of complainant, is silent in respect of balance amount of Rs.12,00,000/-. This one another aspect creates suspicion in the mind of court regarding financial capacity of the complainant and hence opined that, complainant has not discharged initial burden cast upon her.
26. In this context, it is profitable to refer the plethora of decisions of Hon'ble Supreme Cout of India and Hon'ble High Court of Karnataka that, initial burden is on the complainant to show the availability of funds. In the decision reported in, (2014) 2 SCC 2376, between John K. Abraham Vs. Simon C. Abraham and another, it is held at para - 9 that, 31 C.C.24989/2017 " It has to be stated that in order to draw presumption under section 118 read with section 139 of the Negotiable Instrument Act, the burden was heavily upon the complainant to have shown that he had the required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true; and that the accused was bound to made the payment as had been agreed while issuing the cheque in favour of the complainant".
27. In another decision reported in, (2015) 1 Supreme Court Cases 99, between K.Subramani Vs. K.Damodara Naidu, wherein it is held that;
"Dishonour of cheque - Legally recoverable debt not proved as complaint could not prove source of income from which alleged loan was made to appellant- accused - Presumption in favour of holder of cheque, hence, held, stood rebutted- Acquittal restored ". In the decision reported in, ILR 2008 KAR 4629, in a case of Shiva Murthy Vs. Amruthraj, it is held that;
" Before considering the conduct of accused to find out as to whether or not he has been able to rebut the presumption 32 C.C.24989/2017 available under section 139, the court ought to have considered as to whether the complainant has proved."
In the decision reported in, AIR 2008 SC 278, between John K John Vs.Tom Verghees and another, it is held that, "The presumption under section 139 could be raised in respect of some consideration and burden is on the complainant to show that he had paid amount shown in cheque. Whenever there is huge amount shown in the cheque, though the initial burden is on the accused, it is equally necessary to know how the complainant advanced such a huge amount".
In the latest decision of Hon'ble Supreme Court reported in, AIR 2019 Supreme Court 1983, Basalingappa Vs. Mudibasappa, decided on 09.04.2019, it is held that;
" (A) Negotiable Instruments Act (26 of 1881), S.138, S.139, S.118(a)- Dishonour of cheque- Non mentioning of date of issuance of cheque by the complainant in complaint as well as in his evidence-
Complainant not satisfactorily explaining contradiction in complaint vis-a-vis his 33 C.C.24989/2017 examination-in-chief and cross-
examination - His failure to prove financial capacity though he is a retired employee to advance substantial amount to different persons including accused- Findings of Trial Court that complainant cannot prove his financial capacity, cannot be termed as perverse with out discarding evidence laid by defence- Accused entitled to acquittal."
The proposition of law laid down in the above decisions is aptly applicable to the case on hand. In the cited decisions, the Hon'ble Supreme Court of India, pleased to observe that, complainant being retired government employee failed to show the availability of funds so as to lend in favour of the accused. Similarly, in the present case, complainant is housewife having no independent income alleged to have lent huge amount of Rs.50,00,000/- in favour of the accused, who is neither relative nor friend of the complainant. Admittedly, complainant came to know the accused through her husband. At the cost of repetition, complainant has not proved her source of income to lend the huge amount of 34 C.C.24989/2017 Rs.50,00,000/- without interest and without obtaining supportive documents from the accused.
28. Be that as it may, if we consider the case on merits, it is forthcoming from the materials on record that, complaint lacks material descriptions regarding availability or augmentation of funds. It also not discloses the date of demand and purpose of hand loan. For better appreciation, the relevant portion of the evidence of complainant, is culled out as as under;
" ಆರರಭಪ ಯವ ದನರಕದರದರ, ಯವ ಉದಶಕಕಗ ಹಣ ಕಭಳದದರರದರ ಸಕನ ಪ ದಮಣ ಪತ ತದಲ ಉಲಖಸಲಲ ಎರದರ ನನಪಲಲ. ನನನ ದರರರ, ಲಭಗಲ ನರಭಟಭಸ ಹಗರ ಸಕನ ಪ ದಮಣ ಪತ ತದಲ ಆರರಭಪಗ ಕರಟಟದನ ಎರದರ ಹಭಳರವ ಹಣ ಯವ ಮರಲದರದ ಬರತರ ಎರದರ ಸಕ ಉತತರಸರವದಲಲ."
From this part of evidence, it is clear that, complainant fails to aver the date of impugned transaction either in the complaint, legal notice or evidence, which is fatal to the case of the complainant. No doubt, Learned Counsel for the complainant buttressed the arguments that, in the complaint, facts only to be stated and evidence 35 C.C.24989/2017 need not be. Therefore, non mentioning of mode of mobilization of the funds and source of income and the details of the impugned transaction in the complaint, cannot be taken as ground to disbelieve the case of the complainant. This line of arguments, is not acceptable, because, the Hon'ble Supreme Court of India, pleased to observe in the following decisions that, absence of material particulars in the complaint, strikes at the root of the case of the complainant.
29. In this context, it is profitable to refer the decisions in, Criminal Appeal No. 2043 of 2013 (SLP (Crl) No. 9505 of 2011) John K.Abraham V/s Simon. C. Abraham & another, " The respondent was not even aware of the date when substantial amount of Rs.1,50,000/- was advanced by him to the appellant, that he was not sure as to who wrote the cheques, that he was not even aware when exactly and where exactly the transaction took place 36 C.C.24989/2017 for which the cheque came to be issued by appellant - such a serious lacuna in the evidence of complainant which strikes at the root of a complaint under sec. 138"
In another decision reported in, ILR 2014 KAR 6572 H. Manjunath V/s A.M. Basavaraju, " Absence of statement in the complaint as to when the amount was actually given to the accused - Absence of material particulars of the transaction in the complaint - Held - judgment of Acquittal is justified."
Application of the proposition of law laid down in the cited decisions to the facts and circumstances of this case, would leads to an inference that absence of material particulars of the transactions, in the complaint is serious lacuna in the case of the complainant.
30. Furthermore, admittedly, complainant has not disclosed the present transaction in her income tax returns. Further, as per the provisions of Income Tax Act 37 C.C.24989/2017 and guidelines of RBI, no cash transaction more than Rs.20,000/- is permissible. For better appreciation, the relevant portion of the evidence of complainant, is reproduced as under;
"ಆರರಭಪಯರದಗನ 50 ಲಕದ ಹಣದ ವನವಹರವನರ ನ ಆದಯ ತರಗ ರಟನರನಲ ಉಲಖಸಲಲ. ನನರ ಆದಯ ತರಗ ಪವತದರಳರ. ಆದಯ ತರಗ ಇಲಖಗ ತಳಸಲಲದ ಮತತವನರ ನ ಲ ಕನರನರ ಬಹರ ಮತತವರದರ ಹಭಳಲಗರತತದ ಎರದರ ಸರಯಲ."
From the above evidence, complainant has not mentioned the impugned transaction in the income tax returns. It is not a transaction involving negligible amount, in fact involves huge amount of Rs.50,00,000/-, which requires to be disclosed to the tax department. Otherwise, it leads to an inference that, complainant has transacted the un- accounted and un- disclosed amount, which is not legally recoverable. This aspect is re-iterated by the Hon'ble superior courts in the following decisions. 38 C.C.24989/2017
31. In the decision of the Hon'ble High Court of Karnataka, Criminal Appeal No.1147 of 2016, dated 17th February 2018, Abhay Kumar Jain Vs. Pankaj R Makkanna, it is held that;
" 8. The cash in the hands of the appellant is admittedly unaccounted. When the cash is unaccounted, it would mean non-compliance of the requirements of law. Therefore, the appellant cannot expect to seek protection of the law in order to recover unaccounted amount. The appellant cannot be permitted to violate the law as and when he chooses and consequently seek protection of the law for such violations."
In another decision reported of the Hon'ble High Court of Bombay, in 2009 CRI.L.J.3777, Sanjay Mishra Vs. Kanishka Kapoor @ Nikki and Anr, it is held that;
" (A) Negotiable Instruments Act (26 of 1881), S.138, S.139 - Dishonour of cheque- Presumption as to legally enforceable debt- Rebuttal of - Amount advanced by complainant to accused was large amount - Failure by complainant to 39 C.C.24989/2017 disclose the amount in his Income Tax Return of Books of Accounts - Sufficient to rebut presumption u/S.139."
" (B) Negotiable Instruments Act (26 of 1881), S.138, S.139- Dishonour of cheque-
Presumption as to issuance of cheque in discharge of legally enforceable debt-
Amount advanced by complainant to accused was unaccounted cash amount- It was not disclosed in Income Tax Return- Liability to repay unaccounted cash amount cannot be said to be legally enforceable liability within meaning of explanation to S.138 - Acquittal of accused proper. "
From the ratio laid down in the cited decisions, it is crystal clear that, the un- accounted cash amount cannot be considered as legally enforceable debt. This is one another circumstance goes against the case put forth by the complainant.
32. On the other hand, Learned Counsel appearing for the complainant relied on the decision of the Hon'ble High Court of Karnataka and vehemently argued that, any cash transaction in violation of section 269 SS of Income Tax 40 C.C.24989/2017 Act may give raise to an independent criminal offences, but on account of violation of the said provision, the prosecution of the accused for the alleged dishonour of cheque under section 138 of Act, does not become bad in law. To support this line or arguments, complainant relied on the decision of the Hon'ble High Court of Karnataka, in writ petition No.29144/2018 between Dr.M.Krishna Shetty and H.R.Nagabhushan, decided on 29.08.2018 and another decision of the Hon'ble High Court of Karnataka, in Crl.Appeal No. 467/2018 between Yogesh Poojari Vs. K.Shankara Bhat, decided on 20.11.2018.
33. This court thoughtfully read the aforesaid decisions cited by the complainant, in WP.No.29144/2018, the Hon'ble High Court pleased to observe in para No. 5 that, ' No doubt, the sources from which the complainant paid the loan amount may be required to be established during the trial, but the prosecution under section 138 of NI Act, cannot be stalled for non compliance of section 269 SS of the Income Tax Act........ 41 C.C.24989/2017 even otherwise, the contention urged by the petitioner / accused could be decided only during the trial. Hence, reserving the liberty to the petitioner to canvas the said plea before the trial court, petition is dismissed.' From the reading of the above observation, it is clear that, Hon'ble court permitted the accused to raise the aforesaid plea during the trial and also observed that, the source from which the complainant paid the loan amount to be established during the trial. But, said plea cannot be considered for quashing the proceedings. Hence, the ratio laid down in the aforesaid writ petition is most helpful to the defence of the accused.
34. In Criminal Appeal No.467/2018, the Hon'ble High Court of Karnataka, pleased to observe that;
' It is also required for the accused to establish that, the complainant is an income tax assessee are required to be an assessee and that the nature of is income tax assessment and the income tax returns which he files, requires him to disclose the alleged transaction or the liability in question. In the 42 C.C.24989/2017 absence of those details by merely making a suggestion that, the alleged debt or liability, has not been reflected in the income tax returns would not by itself suffice to draw an adverse inference.' The facts and circumstances of the cited decision reads that, cheque involved in that case is for an amount of Rs.1,50,000/- under that circumstances, The Hon'ble High Court of Karnataka, pleased to make aforesaid observation that, the burden is on the accused to establish that, complainant is an income tax assessee and the nature of his income tax assessment requires to disclose the alleged transaction. Per contra, in the present case, for suggestion in the cross examination, complainant admits that, she is an income tax assessee. Admission is best piece of evidence and does not require further proof. Complainant further admits that, she has not disclosed the impugned transaction in her income tax returns. But, for the reasons best known to her, she has not made voluntary or further statement that, the nature of her income tax 43 C.C.24989/2017 assessment does not require disclosure of impugned transaction involving huge amount of Rs.50,00,000/-. So also, she has maintained glorious silence for a suggestion that, an amount not disclosed to the income tax department, is considered as illegal or un- accounted amount. If at all, the nature of assessment of her income tax does not require disclosure of impugned transaction involving huge amount of Rs.50,00,000/-, she would have certainly answered to the aforesaid suggestion that, she need not required under law to disclose the impugned transaction to the income tax department. It is to be noted that, an amount of Rs.50,00,000/- does not fall within the tax exemption limit as per income tax slab for the year 2016-2017. For these reasons, complainant is not entitled to take shelter on the premise that, non disclosure of impugned transaction to the tax department does not absolve the penal liability, as the Hon'ble High Court of Karnataka, clearly laid down in Criminal Appeal 44 C.C.24989/2017 No.1147 of 2016 that, 'the cash in the hands of the complainant is admittedly un- accounted. When the cash is un- accounted, it would mean non compliance of the requirements of law. Therefore, the complainant cannot expect to seek protection of the law in order to recover un- accounted amounts.' Therefore, this court has no hesitation to opine that, non disclosure of impugned transaction in the income tax returns is one of the strong circumstances goes against the complainant and tilts in favour of the defence.
35. Be that as it may, it is definite contention of the accused that, he has issued disputed cheques 'as a security' to the complainant in a chit transaction. There was no such money transaction as claimed by the complainant. For that reason, complainant has not produced any documents to show the availability of funds and supportive documents for the impugned transaction. 45 C.C.24989/2017 It is worth to note that, complainant has unequivocally admitted that, she has not got any document to show the payment of Rs.50,00,000/- to the accused except the cheques in question. So also, complaint lacks material description regarding the source of income to the complainant to pay the huge amount of Rs.50,00,000/- to the accused with out obtaining supportive documents. As such, this court opined that, complainant has not proved the existence of legally enforceable debt, because the initial burden of showing availability of funds to lend the amount in question, is on the complainant, which is not discharged by her. In case of discharge of the initial burden by the complainant, the question of shifting the burden of rebuttal on the accused arises.
36. The Learned Counsel appearing for the accused relied on the decision reported in, CDJ 2021 SC 194; Sumeti 46 C.C.24989/2017 Vij Vs. Paramount Tech Fab Industries, wherein it is held that;
" Statement of accused recorded u/s 313 of CrPC is not substantive evidence to rebut presumption u/s139 of NI Act- Primary burden was discharged by complainant that the cheques were issued by the appellant in lieu of the material supplied, and it was for the appellant accused to discharge her burden to rebut in defence as required under Section 139 of the Act- Appellant only recorded her statement under Section 313 of the Code, no evidence was recorded to disprove or rebut the presumption in defence".
In the above decision, the Hon'ble Supreme Court of India, observed that, the facts of cited decision show the existence of the basic ingredients for drawing of presumption under section 118 and 139 of the NI Act. Hence, accused required to discharge the burden of rebuttal by adducing cogent defence evidence. But, in the present case, the complainant failed to discharge the initial burden of proving availability of the funds at the given point of time and also validity of the cheques. 47 C.C.24989/2017 Furthermore, in the larger bench decision of the Hon'ble Supreme Court of India, reported in, CDJ 2010 SC 418/ AIR 2010 SC 1898; Rangappa Vs. Mohan, wherein it is held that;
"Keeping this in view, it is settled position that when an accused has to rebut the presumption. under section 139, the standard of proof for doing so is that 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/ her own."
Further, in the decision reported in, (2006) 3 Supreme Court Cases (Cri) 30, in a case of M.S.Narayana 48 C.C.24989/2017 Menon @ Mani Vs. State of Kerala and another, it is held that;
"Whether the initial burden has been discharged by accused is a question of fact- Burden of proof on accused is not heavy- He need not disprove the prosecution case in its entirety- He can discharge his burden on the basis of preponderance of probabilities through direct evidence or on the materials relied by the complainant".
In the light of he proposition of law laid down in the aforesaid decisions of Hon'ble Supreme Court of India, this court has no hesitation to hold that, in case of complainant discharging the initial burden by establishing financial capacity and availability of funds, then only the question of raising presumptions in favour of the complainant and thus calling upon the accused to rebut the presumptions arises. The said proposition of the law, now also holds the field. In that view of the matter, the detailed discussion on the contention of the accused regarding misuse of security cheques issued in- 49 C.C.24989/2017 connection with chit transaction, does not necessitates detailed discussion and can be accepted by preponderance of probabilities.
37. Further, complainant relied on the decision reported in, AIR 2018 SUPREME COURT 3601; T.P. Murugan (dead) Thr.Lrs Vs. Bojan, wherein it is held that;
' - Defence of the accused that 10 cheques issued towards repayment of loan back in 1995- Behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural.' I respectfully concede with the proposition of law laid down in the above decision. However, in the recent decision of the Supreme Court of India reported in, AIR 2019 Supreme Court 1983, Basalingappa Vs. Mudibasappa, it is clearly observed that, in order to draw statutory presumptions, the complainant is required the discharge of initial burden proving the availability of funds. Therefore, the decisions relied by the complainant are not helpful to prove her case.
50 C.C.24989/2017
38. From the overall consideration of the evidence on record, it is clear that, accused has taken probable defence of invalid cheques and non existence of legally enforceable debt and successfully rebutted the statutory presumptions. The standard of proof required for the accused is preponderance of probabilities. Hence, this court opined that, accused has rebutted the presumption drawn in favour of complainant. Consequently, the onus shifts on the complainant to prove the transaction in question bereft of statutory presumptions. At the cost of repetition, accused has not proved the availability of funds and source of income to lend huge amount of Rs.50,00,000/- to the accused, thereby failed to establish the existence of legally enforceable debt. As stated earlier, prosecution cannot be launched on the 51 C.C.24989/2017 basis of invalid cheques. Therefore, this point No.2 is answered in the negative.
39. POINT NO.3: In view of the reasons stated and discussed above, this court opined that, the complainant has not proved the guilt of the accused punishable under section 138 of N.I. Act. Hence, this court proceed to pass the following;
O R DE R Acting under Section 255(1) of code of criminal procedure, the accused is acquitted for the offence punishable under Section 138 of Negotiable Instruments Act.
The bail bond and surety bond of accused stand canceled.
{Dictated to the stenographer directly on computer, corrected and then signed by me and then pronounced in the open court on this 23 rd day of April 2021}.
(KALPANA.M.S.) XX ACMM, Bengaluru.
52 C.C.24989/2017ANNEXURE List of witnesses examined on behalf of complainant:
PW.1 Smt.G.N.Rashmi PW.2 Suma S.M. PW.3 Somshekar
List of documents produced on behalf of complainant:
Ex.P.1 to 3 Cheques
Ex.P. 1(a) to 3(a) Signatures of the accused
Ex.P. 4 to 6 Bank endorsements
Ex.P. 7 Copy of the legal notice
Ex.P. 8 Postal receipt
Ex.P. 9 Postal acknowledgement
Ex.P.10 Bank Challan
Ex.P.11 to 16 Receipts
Ex.P.17 to Ex.P. 20 Lease deeds
53 C.C.24989/2017
List of witnesses examined on behalf of accused:
-Nil-
List of documents produced on behalf of accused:
-Nil-
XX A.C.M.M., Bengaluru.