Bangalore District Court
Manjegowda. N vs E. Hanumanthappa on 6 February, 2024
1
C.C.No.18488/2022
KABC030480462022
Presented on : 16-06-2022
Registered on : 16-06-2022
Decided on : 06-02-2024
Duration : 1 years, 7 months, 20 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated : This the 6th day of February 2024
Present: Sri.N.M. RAMESHA, B,Com.,L.L.M.
XVI Addl.C.M.M., Bengaluru City.
Case No. C.C.NoCC.No.18488/2022
:
Complainant : Mr.Manjegowda.N
S/o Ningegowda
Aged about 54 years
R/at No.28, 1st Floor,
7th Main, 13th Cross,
Agraharadasarahalli,
Bangalore - 560079.
(By Sri.N.M.Parameswara., Adv,)
V/s
Accused : Mr.E.Hanumanthappa
C/o Vyshnavi Compound
R/at No.12/84, Ground Floor,
8th Main, RBI Colony,
2
C.C.No.18488/2022
3rd Block East, Jayanagara,
Bangalore - 560011.
and also at :
Mr.E.Hanumanthappa
Lab Technician
Referral Hospital (BBMP)
Jagajeevanaram Nagara,
Bangalore - 560036.
(By Sri.M.Sathisha., Adv.,)
Case instituted : 26.08.2021
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 06.02.2024
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 is the friend of complainant. The accused has requested the complainant in the first week of March 2021 for a loan of Rs.4 lakhs for domestic and 3 C.C.No.18488/2022 legal necessities. The complainant has paid a loan of Rs.4 lakhs to the accused on 10.03.2021 by way of cash. The accused has agreed to repay the loan within 3 months and issued a cheque bearing No.067413 dated 25.06.2021 for Rs.4 lakhs, drawn on Canara Bank, Jayanagar Branch, Bangalore infavour of the complainant towards the repayment of loan of Rs.4 lakhs. The complainant has presented the cheque for encashment before the Karnataka Bank Ltd., Basavanagudi Branch, Bengaluru. But the cheque was dishonoured with an endorsement as "drawer's signature incomplete" vide bank endorsement dated 29.06.2021. Therefore, the complainant got issued a legal notice dated 07.07.2021 calling upon the accused to pay the cheque amount within 15 days from the date the date of receipt of legal notice. The legal notice was served on the accused on 14.07.2021. But the accused neither repaid the cheque amount nor replied the notice and thereby committed an offence punishable U/s.138 of NI Act and therefore, the complainant has presented the complaint before the court on 26.08.2021.
3. After presentation of complaint, it was ordered to be registered as PCR No.17123/2021 vide order dated 26.08.2021.
4C.C.No.18488/2022
4. The sworn statement of the complainant has been recorded and the documents were got marked as per Ex.P.1 to 11.
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 the documents and prima facie materials placed on record 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.18488/2022 and the process was ordered to be issued against the accused vide order dated 17.03.2022.
6. On service of summons, the accused has appeared before the court through his learned counsel and obtained the bail by depositing the cash security of Rs.4,000/- vide Q.R.11968 dated 12.09.2022. 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 vide dated 12.09.2022 and the substance of accusation has been read over and explained to the accused in the language 5 C.C.No.18488/2022 known to him. The accused has pleaded not guilty, but claims to be tried.
8. In order to establish the guilt against the accused, complainant got himself examined as PW-1 and got the documents marked as Ex.P.1 to P.11. PW.1 was subjected for cross examination by the learned counsel for the accused.
9. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded vide dated 02.06.2023 and the incriminating evidence as such forthcoming against the accused in the evidence of complainant and the documents has been read over and explained to the accused in the language known to him. But the accused has denied the evidence of complainant and the 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 as Ex.D1 & D2. DW.1 was subjected for cross examination by the learned counsel for the complainant.
6C.C.No.18488/2022
11. I have heard the arguments of learned counsel for both the side and perused the oral and the documentary evidence placed on record.
12. 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.067413 dated 25.06.2021 for Rs.4,00,000/-, drawn on Canara Bank, Jayanagar Branch, Bengaluru in his favour towards the legally recoverable debt of Rs.4,00,000/- and on presentation of cheque for encashment before the Karnataka Bank Ltd., Basavanagudi Branch, Bengaluru, it was dishonoured with an endorsement as "Drawer's Signature Incomplete" vide bank endorsement dated 29.06.2021 and in spite of issuance of legal notice dt:07.07.2021 and in spite of service of legal notice on 14.07.2021, the accused has failed to pay the cheque amount within stipulated time and thereby committed an offence punishable U/s.138 of N.I.Act?
2. What Order?
13. On considering and assessing the oral and documentatry evidence placed on record, now my answers to the above points are as under :
7C.C.No.18488/2022 [ Point No.1: In the Affirmative.
Point No.2: As per final order for the following :-
REASONS
14. 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.
15. 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 8 C.C.No.18488/2022 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. [
16. 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 9 C.C.No.18488/2022 from out of that account for the discharge, in whole or 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.
17. 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 10 C.C.No.18488/2022 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 cheque, within fifteen days of the receipt of the said notice.
[ 18. 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.
19. 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.
20. 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 11 C.C.No.18488/2022 to comply the mandates, ingredients, terms and conditions of Section 138 of N.I.Act, so as to draw the presumptions in his favour as per Section 118 and 139 of N.I.Act.
21. It is averred in the complaint and stated by PW.1 in his oral evidence that the accused has requested him in the first week of March 2021 for a loan of Rs.4 lakhs for domestic and legal necessities and he has paid a loan of Rs.4 lakhs to the accused on 10.03.2021 by way of cash and the accused has agreed to repay the loan within 3 months and issued a cheque bearing No.067413 dated 25.06.2021 for Rs.4 lakhs, drawn on Canara Bank, Jayanagar Branch, Bangalore in his favour towards the repayment of loan of Rs.4 lakhs and he has presented the cheque for encashment before the Karnataka Bank Ltd., Basavanagudi Branch, Bengaluru, but the cheque was dishonoured with an endorsement as "drawer's signature incomplete" vide bank endorsement dated 29.06.2021 and therefore, he got issued a legal notice dated 07.07.2021 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 served on the accused on 14.07.2021, but the accused neither repaid the cheque amount nor 12 C.C.No.18488/2022 replied the notice and therefore, he has presented the complaint before the court on 26.08.2021.
22. The complainant has produced a cheque dated 25.06.2021, bank endorsement dated 29.06.2021, legal notice dated 07.07.2021, 2 postal receipts dated 07.07.2021, 2 postal acknowledgements, returned notice, dated 07.07.2021, postal cover, postal receipt and complaint and they are marked at Ex.P1 to P11.
23. The accused has not seriously disputed the fact that the cheque vide Ex.P1 dated 25.06.2021 is belongs to him and he has drawn the cheque on an account maintained by him with his banker namely Canara Bank, Jayanagar Branch, Bengaluru. The accused has also not seriously disputed about the presentation of cheque for encashment before the Karnataka Bank Ltd., Basavanagudi Branch, Bengaluru within its validity and the dishonour of cheque with an endorsement as 'Drawer's Signature Incomplete' vide bank endorsement at Ex.P2 dated 29.06.2021 and the issuance of legal notice vide Ex.P3 dated 07.07.2021 and the address mentioned on the notice.
24. In fact, there are no material suggestions to PW.1 either to deny the cheque vide Ex.P1 or to deny the 13 C.C.No.18488/2022 the presentation of cheque for encashment before the bank within its validity or to deny the dishonour of cheque with an endorsement as 'Drawer's Signature Incomplete' vide bank endorsements at Ex.P2 dated 29.06.2021 or to deny the issuance of the legal notice vide Ex.P3 dated 07.07.2021 or to deny the address mentioned on the notice.
25. DW.1 in his entire evidence has not seriously disputed either the cheque vide Ex.P1 or the presentation of cheque for encashment before the bank within its validity or the dishonour of cheque with an endorsement as 'Drawer's Signature Incomplete' vide bank endorsement at Ex.P2 dated 29.06.2021 or the issaunce of legal notice vide Ex.P3 dated 07.07.2021 or address mentioned on the notice. Be that as it may, DW.1 in his cross-examination has admitted that the address mentioned on the notice and the complaint are as that of his address. It is also admitted by DW.1 that the cheque vide Ex.P1 shown to him is belongs to him and pertains to his account and the address mentioned on Ex.P6 and P8 are as that of his hospital address.
26. From these materials placed on record, it is crystal clear that the accused by necessary implications 14 C.C.No.18488/2022 has admitted the fact that the cheque is belongs to him and he has drawn the cheque on an account maintained by him with his banker namely Canara Bank, Jayanagara Branch, Bengaluru and on presentation of cheque for encashment before the Karnataka Bank, Basavanagudi Branch, Bengaluru within its validity, it was dishonoured with an endorsement as 'Drawer's Signature Incomplete' vide bank endorsement at Ex.P2 dated 29.06.2021 and the issuance of legal notice including the address mentioned on the notice. Under these circumstances, it is said that the admissions are the best proof for the complainant to comply the mandates of Sec.138 of NI Act.
27. 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 P11 and also by eliciting the material facts in the cross-examination of DW.1. Under these circumstances, when once the complainant has complied the mandates of Sec.138 of NI Act and when once the accused has admitted the cheque and the dishonour of cheque including the address mentioned on the notice, this court has no option, but to draw the presumptions in favour of the complainant 15 C.C.No.18488/2022 available under the provisions of Sec.118 and 139 of NI Act.
28. Admittedly, the presumptions available in favour of the complainant under the provisions of Sec.118 and 139 are not the conclusive proof, but they are rebuttable in nature. Therefore, when once the complainant has fulfilled the mandates of Sec.138 of N.I. Act and when once the accused has admitted the cheque and the address mentioned on the notice and when once the court has drawn the presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act, then, the onus 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.
29. The learned counsel for the complainant has argued with force that the complainant has complied the mandates of Sec.138 of NI Act with oral evidence of PW.1 and the documentary evidence at Ex.P1 to P.11 which clearly establishes that the accused has approached the complainant in the first week of March 2021 for a loan of Rs.4,00,000/- and the complainant has paid a loan of Rs.4 lakhs to the accused on 10.03.2021 and in 16 C.C.No.18488/2022 repayment of the loan, the accused has issued a cheque vide Ex.P1 for repayment of loan of Rs.4,00,000/- and the cheque was dishonoured with an endorsement as 'Drawer's Signature Incomplete' vide bank endorsement dated 29.06.2021 at Ex.P2 and therefore, the complainant got issued a legal notice vide Ex.P3 dated 07.07.2021 which was served on the accused on 14.07.2021 vide Ex.P6, but in spite of service of legal notice, the accused has failed to pay the cheque amount and therefore, the complainant has presented the complaint before the court on 26.08.2021 which was well within time.
30. It is further contended by the learned counsel for the complainant that the accused neither disputed the cheque nor the presentation of cheque for encashment before the bank within its validity or the dishonour of cheque with an endorsement as 'Drawer's Signature Incomplete' or the issuance of legal notice or the address mentioned on the notice and the oral evidence of PW.1 is very much consistent and in confirmity with the documentary evidence at Ex.P1 to P11 and therefore, the presumptions are available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
17C.C.No.18488/2022
31. It is further contended by the learned counsel for the complainant that the accused has taken a defence that he never transacted with complainant at any point of time, but he had money transaction with one Lakshmipathi in the year 2016 and availed a loan of Rs.3 lakhs from Lakshmipathi who had taken an amount of Rs.3 lakhs from his father-in-law Venkataramanappa and given to him and he had issued two cheques for security purpose to said Lakshmipathi who in turn handed over both cheques to his father-in- law Venkataramanappa in the year 2016 and he has repaid entire loan of Rs.3 lakhs to Lakshmipathi in the year 2019 with interest @ 5% per annum through cash, phone pay and google pay and requested Lakshmipathi to return the cheque who taken him to Venkataramanappa who sought for time and thereafter, he had requested Venkataramanappa for 4 to 5 times to return the cheque, but the said Venkataramanappa postponed for return of cheque for one or the other reasons and when he tried to lodge a complaint, the said Venkataramanappa handed over both the cheques to complainant who filed the false case by misusing one of the cheque and therefore, he is not liable to any cheque amount to the complainant. But the said contentions 18 C.C.No.18488/2022 has not been proved by the accused before the court in any manner and the accused neither examined any independent witnesses nor elicited anything in the evidence of PW.1 and thereby the accused has failed to rebut the statutory presumptions available in favour of the complainant.
32. It is further contended by the learned counsel for the complainant that the accused neither lodged any complaint against the complainant for misuse of cheque nor issued any stop payment instructions to the bank to stop the payment or issued any notice to get back the blank cheque from Lakshmipathi and Venkataramanappa 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 nothing is elicited in the evidence of PW.1 as to how and in what manner the complainant has misused the cheque and thereby failed to substantiate his probable defence and in view of the accused failed to rebut the statutory presumptions, the accused is liable for conviction U/Sec.138 of NI Act.
33. Per contra, the learned counsel for the accused has vehemently contended that the oral evidence of 19 C.C.No.18488/2022 PW.1 and the documentary evidence at Ex.P1 to P11 do not establish the loan transaction of Rs.4 lakhs between the complainant and the accused at any point of time and the existence of loan transaction of Rs.4,00,000/- and the issuance of cheque by the accused to the complainant towards the legally recoverable debt of Rs.4,00,000/- and thereby the complainant has failed to prove the loan transaction and the issuance of cheque towards the legally recoverable debt and failed to prove the guilt against the accused.
34. It is further contended by the learned counsel for the accused that the accused has raised a probable defence and proved the same before the court with oral evidence of DW.1 and by producing the documentary evidence at Ex.D1 & D2 and also by eliciting the material facts in the cross-examination of PW.1 which clearly establishes that the accused never approached the complainant at any point of time for a loan of Rs.4 lakhs and also not issued the cheque in question to the complainant for repayment of loan of Rs.4 lakhs, but the accused had money transaction with one Lakshmipathi in the year 2016 and availed a loan of Rs.3 lakhs from Lakshmipathi who had taken an amount of Rs.3 lakhs from his father-in-law Venkataramanappa and given to 20 C.C.No.18488/2022 the accused and the accused had issued two cheques for security purpose to said Lakshmipathi who in turn handed over both the cheques to his father-in-law Venkataramanappa in the year 2016 and the accused has repaid entire loan of Rs.3 lakhs to Lakshmipathi in the year 2019 with interest @ 5% per annum through cash, phone pay and google pay and requested Lakshmipathi to return the cheques who taken the accused to Venkataramanappa who sought for time and thereafter, the accused had requested Venkataramanappa for 4 to 5 times to return the cheque, but the said Venkataramanappa postponed for return of cheques for one or the other reasons and when the accused tried to lodge a complaint, the said Venkataramanappa handed over both the cheques to complainant who filed the false case by misusing one of the cheque and therefore, the accused is not liable to any cheque amount to the complainant and thereby the accused has rebutted the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act and hence, the accused is entitled to an order of acquittal.
35. In support of his submission, the learned counsel for the accused has relied upon a decision 21 C.C.No.18488/2022 reported in 2022 (1) KCCR 188 in between Udaya Shetty V/s Yogesh Gudigar, wherein while dealing with provisions of Sec.138 of NI Act, the Hon'ble High Court of Karnataka has pleased to held that the presumption of deemed service not available when the accused had already left the address mentioned on postal cover and if the demand notice not served, then it cannot be said that the ingredients of offence of dishonour of cheque are fulfilled.
36. The learned counsel for the accused has also relied upon a decision reported in 2022 (2) AKR 641 in between Prakash Shetty V/s Venkatesha., wherein while dealing with provisions of Sec.138 of NI Act, the Hon'ble High Court of Karnataka has pleased to held that when no material evidence to show that complainant is having financial capacity to pay such a huge amount and when the dispute between the parties is of civil nature and when the complainant tried to give a criminal colur to transaction instead of appraching civil court and when the complainant failed to bring home guilt of accused beyond all reasonable doubt, then the accused is entitled to an order of acquittal.
22C.C.No.18488/2022
37. The learned counsel for the accused has also relied upon a decision reported in (2013) 3 SCC 86 in between Vijay V/s Laxman 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 standard of proof required for rebutting the presumption U/Sec.118 and 139 of NI Act is not as high as that required of the prosecution and is rebuttable on the preponderance of probabilities.
38. The learned counsel for the accused has also relied upon a decision reported in (2006) 6 SCC 39 in between M.S.Narayana Menon Alias Mani V/s State of Kerala and another, wherein, while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme Court has pleased to held that if the accused discharges the onus, then the burden thereafter shifts on the complainant to prove his case and the accused can discharge his onus on the basis of preponderance of probabilities through direct or circumstantial evidence.
39. The learned counsel for the accused has also relied upon a decision reported in ILR 2008 KAR 5175 in between H.R.Halappa & others V/s H.Devaraju, 23 C.C.No.18488/2022 wherein while dealing with the provisions of Sec.2(10 &
11) of Money Lenders Act, 1951 Act, the Hon'ble High Court of Karnataka has pleased to held that the very expression 'business of money lending' used in Sec.2(2) of the Act makes it clear that the said activicity of money lending can be carried on in connection with or in addition to any other business.
40. The learned counsel for the accused has also relied upon a decision rendered by the Hon'ble High Court of Karnataka in Crl.P.No.1387/2011 in between R.Parimala Bai V/s Bhaskar Narasimhaiah, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High Court of Karnataka has pleased to held that in order to attract Sec.138 of NI Act, the party has to plead with regard to existence of legally recoverable debt. If the complainant himself does not plead the existence of legally recoverable debt, then there is no question of raising any initial presumption in favour of the complainant. On the same principles, the learned counsel for the accused has also relied upon a decision rendered by the Hon'ble High Court of Karnataka in Crl.R.P.No.1248/2017 in between Sri.S.G.Rajesh V/s Sri.N.Prakash and Crl.A.No.1813/2017 in between Smt.Thejavathi G.N V/s Smt.Savitha.
24C.C.No.18488/2022
41. The learned counsel for the accused has also relied upon a decision rendered by the Hon'ble Supreme Court in Crl.A.No.636/2019 in between Basalingappa V/s Mudibasappa, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme Court has pleased to held that the adjudication in civil matters is based on the preponderance of probabilities whereas adjudication in criminal case based on the priniciple that the accused is presumed to be innocent and the guilt of the accused should be proved to the hilt and the proof should be beyond all reasonable doubt.
42. The learned counsel for the accused has also relied upon a decision rendered by the Hon'ble High Court of Karnataka in Crl.A.No.913/2010 in between Mitra Finance (R) V/s 1. Vasanth Naik 2. VSC Holla, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High Court of Karnataka has pleased to held that when the cheque in question was dishonoured on the ground that account is closed and if the account is closed by the bank due to operation of law, then the liability of accused would not arise.
43. The learned counsel for the accused has also relied upon a decision rendered by the Hon'ble High 25 C.C.No.18488/2022 Court of Andhra Pradesh in Crl.A.No.1293/1998 in between Nagisetty Nagaiah V/s State of A.P. and another, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble High Court of Andhra Pradesh has pleased to held that when the amount due from the accused in business not proved and the complainant did not file any account books, Income Tax Report or audit book to construe that there was any legally enforceable debt, then it cannot be said that factual basis for raising presumption had been established.
44. The learned counsel for the accused has also relied upon a decision reported in (2009) 2 SCC 513 in between Kumar Exports V/s Sharma Carpets, wherein while dealing with the provisions of Sec.138 of NI Act, the Hon'ble Supreme Court has pleased to held that the provisions of Sec.118 of NI Act is to facilitate negotiability of an instrument and it is for this purpose, Sec.118 has departed from general law of contract wherein existence of consideration has to be proved in the first instance and the Act also creates special rules of evidence for negotiable instruments. These presumptions are however rebuttable in nature.
26C.C.No.18488/2022
45. Now, keeping the arguments canvassed by the learned counsel for both the side and the principles laid down in the above said decisions in mind, let us consider as to whether the accused could able to raise a probable defence and whether the accused could able to prove the same before the court and whether the accused could able to rebut the presumption available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
46. It is the evidence of DW.1 that he never apporached the complainant at any point of time for loan of Rs.4 lakhs, but he had money transaction with one Lakshmipathi in the year 2016 and availed a loan of Rs.3 lakhs from Lakshmipathi who had taken an amount of Rs.3 lakhs from his father-in-law Venkataramanappa and given to him and he had issued two cheques for security purpose to said Lakshmipathi who in turn handed over both cheques to his father-in- law Venkataramanappa in the year 2016 and he has repaid entire loan of Rs.3 lakhs to Lakshmipathi in the year 2019 with interest @ 5% per annum through cash, phone pay and google pay and requested Lakshmipathi to return the cheque who taken him to 27 C.C.No.18488/2022 Venkataramanappa who sought for time and thereafter, he had requested Venkataramanappa for 4 to 5 times to return the cheque, but the said Venkataramanappa postponed for return of cheque for one or the other reasons and when he tried to lodge a complaint, the said Venkataramanappa handed over both the cheques to complainant who filed the false case by misusing one of the cheque and therefore, he is not liable to any cheque amount to the complainant.
47. The accused has produced the empty cheque book issued by the Canara Bank and the Canara Bank Statement of accounts and they are marked at Ex.D1 & D2.
48. But, though the accused has taken these bald defences and bald contentions, same has not been amplified before the court in any manner. Because, the accused neither examined any evidence of independent witnesses before the court nor elicited any material facts in the cross-examination of PW.1 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 28 C.C.No.18488/2022 the oral evidence of PW.1 or to falsify the documentary evidence at Ex.P1 to P11.
49. No doubt, it is suggested to PW.1 that he has obtained the cheque from Venkataramanappa and filed the false case against the accused; that Venkataramanappa has handed over the cheque to him; that he has not lend any loan to the accused; that the accused has not availed any loan from him; that the accused is not liable to repay any loan to him; that he has filed false case against the accused with dishonest intention for wrongful gain and deposing false evidence.
50. But, all these material suggestions have been specifically denied by PW1. 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 presumption U/sec.118 and 139 of NI Act available in favour of the complainant or to falsify the case made by the complainant or to falsify the oral evidence of PW1 or to falsify the documentary evidence vide Ex.P1 to P11.
51. But, on the other hand, it is forthcoming in the evidence of PW.1 that he came in contact with 29 C.C.No.18488/2022 accused through his friend Lakshmipathi about 6 to 7 years back who has been working as a lab technician at BBMP Hospital, Banashankari and the accused was also working in the same hospital and now the accused is working in JJ Nagar, BBMP Hospital and he has taken the address of the accused from his hospital in order to send the notice and the accused has approached him seeking loan of Rs.4 lakhs on 01.03.2021 and therefore, he has lent a loan of Rs.4 lakhs to the accused on 10.03.2021 in the denomination of Rs.500 and Rs.100 in the house of his friend Channegowda.
52. It is also forthcoming in the evidence of PW.1 that he was working at bar and restaurant as a cashier since 25 years which belongs to Narayanarao situated at J C Road and on the date of loan, the accused has issued a postdated cheque and he has presented the cheque before the bank with due intimation to the accused and soonafter the dishonour of cheque, he had intimated the accused for which, the accused has assured to make an alternative arrangement to pay the cheque amount, but the accused has failed to pay the cheque amount and therefore, he has issued the notice and in spite of service of legal notice, the accused has 30 C.C.No.18488/2022 failed to pay the cheque amount and hence, he has presented the complaint before the court.
53. It is pertinent to note here that if really the accused had availed a loan of Rs.3 lakhs either from Lakshmipathi or from Venkataramanappa and if really the accused had issued two blank cheques either to Lakshmipathi or to Venkataramanappa for security purpose in the year 2016 and if really the accused had already repaid entire loan of Rs.3 lakhs with interest @ 5% per annum either to Lakshmipathi or to Venkataramanappa either by way of cash or google pay or phone pay and if really the said Lakshmipathi and Venkataramanappa had failed to return the cheque even after repayment of entire loan amount with interest and if really the complainant has obtained the cheques either from Lakshmipathi or from Venkataramanappa and if really the complainant has misused the cheque and filed the false case and if really the accused has not availed any loan from the complainant and not issued the cheque in question to the complainant, then the accused could have taken some legal action against the complainant or Lakshmipathi or Venkataramanappa for misuse of cheque or the accused could have produced some documents to show that he had taken loan from 31 C.C.No.18488/2022 Lakshmipathi or Venkataramanappa or the accused could have issued a notice to Lakshmipathi or Venkataramanappa to get back the cheque or the accused could have issued stop payment instructions to the concerned bank or the accused could have said the specific defence either at the time of recording of plea vide dated 12.09.2022 before the court or at the time of recording of statement U/Sec.313 of Cr.P.C. vide dated 02.06.2023 or the accused could have examined any independent witnesses or atleast Lakshmipathi or Venkataramanappa which evidences the defence taken by the accused.
54. But, the accused has not done so. No explanation as such forthcoming either in the evidence of DW.1 or elicited any material facts in the cross- examination of PW.1 in this regard. In the absence of such an explanation or in the absence of the cogent materials on record or in the absence of independent testimony of either Lakshmipathi or Venkataramanappa in the absence of legal action against the complainant or Lakshmipathi or Venkataramanappa or in the absence stop payment instructions to the concerned bank or in the absence of police complaint against the complainant or Lakshmipathi or Venkataramanappa for misuse of 32 C.C.No.18488/2022 cheque, an adverse inference has to be drawn against the accused for withholding the material witnesses being examined before the court and also for withholding the material documents being produced before the court.
55. But, on the other hand, DW.1 has stated in his evidence that he is a graduate and having worldly knowledge, but he has not produced any documents to show that he has availed a loan of Rs.3 lakhs from Venkataramanappa. It is also stated by DW.1 that he had not taken any action against Venkataramanappa when he failed to return the cheques and there was no impediment for him to take such action against Venkataramanappa and also not disclosed the cheque numbers which were issued to Venkataramanappa in his chief-examination and he has also not produced any documents before the court to show that he has issued a stop payment instructions to the concerned bank.
56. Even according to DW.1 that he has not issued any legal notice to return the cheque even after payment of entire loan and also not taken any action against Venkataramanappa till today for misuse of cheques and also not lodged any complaint against Lakshmipathi or Venkataramanappa and also not taken any action 33 C.C.No.18488/2022 against them and also not informed the higher officers when the police had refused to take or receive the complaint against Lakshmipathi or Venkataramanappa.
57. Even according to DW.1 that he used to maintain a counter files for having issued the cheques to anybody, but he has not mentioned the same in Ex.D1 with respect to issuance of cheques to anybody and he has mentioned the name of Venkataramanappa in Ex.D1 to the effect that he has obtained loan of Rs.1,50,000/- after putting whitener on the document at Ex.D1. The document at Ex.D2 bank statement also do not indicate or establish that the accused has repaid entire alleged loan of Rs.3 lakhs with interest @ 5% per annum either to Lakshmipathi or Venkataramanappa. Under these circumstances, even the documents at Ex.D1 & D2 also do 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 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 P11.
58. It is pertinent to note here that at one point of time, the accused has taken a defence of as that of total 34 C.C.No.18488/2022 denial at the time of recording the plea vide dated 12.09.2022 and he has not taken any specific defence and also not stated anything about the cheque and his signature on the cheque at the time of recording of his plea vide dated 12.09.2022. But, at another point of time, the accused has feigned his ignorance about the issuance of cheque in question to the complainant and denied the other incriminating evidence at the time of recording of the statement U/Sec.313 of Cr.P.C. vide dated 02.06.2023. But, at another point of time, the accused has stated in his statement U/Sec.313 of Cr.P.C. that he has received the notice with delay.
59. But, at another point of time, the accused has taken a defence during the course of cross-examination of PW.1 that the complainant has obtained the cheque in question from Venkataramanappa and filed the false case against the accused for wrongful gain though the accused had not availed any loan and not issued the cheque in question. But, at another point of time, the accused has taken a different stand in his evidence that he has received an amount of Rs.3 lakhs from Lakshmipathi and issued the cheque in question. But, at another point of time, the accused has taken a different stand that he had availed a loan of Rs.3 lakhs 35 C.C.No.18488/2022 from Venkataramanappa and issued the cheque in question in favour of Venkataramanappa for security purpose. But, at another point of time, the accused has taken a contention that the notice sent by the complainant has not been served upon him. But, at another point of time, the accused has taken a contention that he has already repaid entire amount to Lakshmipathi. But, at another point of time, the accused has taken a contention that he has repaid entire amount to Venkataramanappa and the complainant has taken the cheque from Venkataramanappa and misused the cheque.
60. So, from these materials placed on record, it is crystal clear that the accused has kept on changing his versions from stage to stage and also kept on changing his defence from stage to stage and also from time to time and thereby, laid on the material facts before the court with respect to the loan transaction between him and the complainant and the issuance of cheque to the complainant for legally recoverable debt of Rs.4,00,000/- towards the repayment of loan and also service of legal notice. Under these circumstances, utmost confidence cannot be reposed on the defence taken by the accused 36 C.C.No.18488/2022 and much reliance cannot be placed on the oral evidence of DW.1 and the documentary evidence at Ex.D1 & D2 as the said documents do not establish the defence taken by the accused.
61. It is well settled position of law that if the notice is issued to the proper address of the accused and even if the said notice returned with an endorsements as 'refused', 'not claimed', 'unclaimed', 'door locked', 'left the address', 'delivered', 'addressee absent' etc, then it amounts to deemed service. Reference in this regard may be made to a provisions of Sec.27 of the General Clauses Act. In the present case, DW.1 has categorically admitted that the address mentioned in the notice and complaint are as that of his address and the second address mentioned in the notice and also complaint are also as that of his address and the address mentioned on Ex.P6 postal acknowledgment is as that of his hospital address and the address as mentioned in Ex.P8 is as that of his residential address. So, it is clear that the complainant has issued the legal notice to the proper address of the accused and the accused has not disputed the same. Under these circumstances, it has to be held here that the notice sent by the complainant is 37 C.C.No.18488/2022 amounts to deemed service and thereby the complainant has complied the mandates of Sec.138(b) of NI Act.
62. On appreciation of entire oral and the documentary evidence placed on record, it is found that the accused has issued the cheque vide Ex.P1 to the complainant towards the legally recoverable debt of Rs.4,00,000/- and on presentation of cheque for encashment before the Bank within its validity, it was dishonoured with an endorsement as 'Drawers Signature Incomplete' vide bank endorsement at Ex.P2 dated 26.09.2021. Therefore, the complainant got issued a legal notice vide Ex.P3 giving 15 days time to the accused to comply the demand made in the notice. But, the accused inspite of service of legal notice as per Ex.P6, has failed to pay the cheque amount within stipulated period of time and therefore, the complainant has presented the complaint before the Court on 26.08.2021 which was well within time.
63. It is pertinent to note here that the document at Ex.P1 being the cheque raises the presumption under the provisions of Sec.118 and 139 of NI Act. The document at Ex.P2 being the bank endorsement also raises the presumption under the provisions of Sec.146 38 C.C.No.18488/2022 of NI Act. The documents at Ex.P3 to P10 being the legal notices, postal receipts, postal cover & postal acknowledgements clearly establishes the service of legal notice. The accused has admitted the cheque and the address mentioned on the notice. Under these circumstances, the statutary presumptions under the provisions 118 and 139 of NI Act are available in favour of the complainant.
64. The accused has not only failed to examine an independent witnesses before the court, but also failed to elicit the material facts in the cross examination of PW1 and also not produced any cogent documentary evidence to substantiate his probable defence or to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 and the documentary evidence Ex.P1 to P11 and thereby the accused has failed to rebut the staturory presumptions available in favour the complainant under the provisions of section 118 and 139 of NI Act. The oral evidence of DW.1 and the documents at Ex.D1 & D2 do not probablize the defence taken by the accused or 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 39 C.C.No.18488/2022 PW.1 or to falsify the documentary evidence at Ex.P1 to P11. In fact, the accused neither issued any notice to get back the signed blank cheque nor taken any legal action against the complainant or Lakshmipathi or Venkataramanappa for misuse of cheque or issued any stop payment instructions to the concerned bank or any replied the notice. Under these circumstances, there are no reasons to disbelieve or to discard the oral evidence of P.W.1 and the documentary evidence at Ex.P1 to P11.
65. Under these circumstances, there is some legal and considerable force in the submission of the learned counsel for the complainant that the accused has not disputed the cheque vide Ex.P1 and his address mentioned on the documents at Ex.P3 to P10 and thereby the accused has admitted about the cheque for legally recoverable debt of Rs.4,00,000/- which was dishonoured with an endorsement as 'Drawer Signature Incomplete' vide bank endorsement at Ex.P2 dated 29.06.2021, but in spite of service of legal notice as per Ex.P6, the accused has failed to pay the cheque amount and the complainant has proved the guilt against the accused with legal evidence before the court, but the accused has failed to raise a probable defence and failed to prove the same before the court with legal evidence 40 C.C.No.18488/2022 and the accused has failed to establish that the complainant has misused the cheque and the accused has not taken any legal action against the complainant or Lakshmipathi or Venkataramanappa and also not issued reply notice or stop payment instructions and also not produced any documents to substantiate his defence and also failed to prove that the complainant has obtained the blank cheque from Venkataramanappa and misuse the same and thereby the accused has failed to rebut the statutory presumptions and therefore, the accused is liable for conviction U/Sec.138 of NI Act.
66. But, the arguments of the learned counsel for the accused that the oral evidence of PW.1 and the documentary evidence at Ex.P1 to P11 do not establish the loan transaction of Rs.4,00,000/- between the complainant and the accused and the existence of legally recoverable debt of Rs.4,00,000/- and the issuance of cheque for legally recoverable debt of Rs.4,00,000/- and the service of legal notice and thereby the complainant has failed to establish the guilt against the accused, but the accused has raised a probable defence and proved the same before the court by adducing the oral evidence of DW.1 and also by producing the doucmentary 41 C.C.No.18488/2022 evidence at Ex.D1 & D2 and also by eliciting the material facts in the evidence of PW.1 which clearly establishes that the accused has not availed any loan from the complainant and also not issued any cheque to the complainant, but the accused has availed a loan of Rs.3 lakhs from Venkataramanappa through Lakshmipathi and issued the cheque for security purpose and he had already repaid the loan to Venkataramanappa, but the complainant has taken cheque from Venkataramanappa and misused the cheque and filed the case for wrongful gain and thereby the accused has rebutted the presumptions and therefore, the accused is entitled to an order of acquittal is not sustainable under law and therefore, cannot be accepted and the decisions cited in this regard are also not applicable to the present facts and circumstances of the case.
67. 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 42 C.C.No.18488/2022 of NI Act. Hence, I answer the point No.1 in the 'Affirmative'.
68. 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 accused and the complainant were known to each other and the accused has received the loan from the complainant for domestic and legal necessities and issued the cheque for repayment of Rs.4,00,000/- which was dishonored. But, in spite of service of legal notice, the accused has failed to pay the cheque amount. Therefore, considering the nature of loan transaction between the complainant and the accused including the facts and circumstances of the case and the 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:-
43C.C.No.18488/2022 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 a fine of Rs.5,00,000/- (Rupees Five lakhs Only) in default of fine amount, he shall undergo simple imprisonment for Six 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.4,90,000/- (Rupees Four Lakhs Ninety Thousand only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining fine of Rs.10,000/- 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 amount of Rs.4,000/- deposited by the accused vide Q.No.11968 dated 12.09.2022 shall be refunded to the accused after the appeal period is over.44
C.C.No.18488/2022 Office to supply the copy of the Judgment to the accused forthwith at free of cost.
(Dictated to the stenographer directly on computer, typed by her, print out taken by her, verified, corrected and then pronounced by me in the open Court on this the 6 th February 2024).
(N.M.RAMESHA) XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Mr.Manjegowda.N
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 : Bank Memo.
Ex.P.3 : Copy of Legal Notice.
Ex.P.4 & 5 : Postal Receipts.
Ex.P.6 : Postal Acknowledgment.
Ex.P.7 : Returned Notice.
Ex.P.8 : Postal Cover.
Ex.P.9 : Postal Receipt.
Ex.P.10 : Postal Acknowledgment.
Ex.P.11 : Complaint.
45
C.C.No.18488/2022
3. List of witness/s examined on behalf of the Accused:-
DW.1 ; Mr.E.Hanumanthppa
4. List of documents exhibited on behalf of the Accused:-
Ex.D.1 : Empty Cheque book.
Ex.D.2 : Bank Statement.
(N.M.RAMESHA) XVI ACMM, Bengaluru City.
46C.C.No.18488/2022 06.02.2024 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 a fine of Rs.5,00,000/- (Rupees Five lakhs Only) in default of fine amount, he shall undergo simple imprisonment for Six Months for the offence punishable under section 138 of 47 C.C.No.18488/2022 N.I.Act.
Out of the fine amount collected from the accused, an amount of Rs.4,90,000/- (Rupees Four Lakhs Ninety Thousand only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining fine of Rs.10,000/- 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 amount of Rs.4,000/- deposited by the accused vide Q.No.11968 dated 12.09.2022 shall be refunded to the accused after the appeal period is over.
Office to supply the copy of the Judgment to the accused forthwith at free of cost.
[ XVI ACMM, Bengaluru City