Bangalore District Court
There Is No Dispute That The Cheque ... vs Is Hereby Convicted For The Offence ... on 26 May, 2022
1 CC.2585/2019 (J)
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BANGALORE CITY.
Dated this the 26th Day of May2022
Present: Lokesh Dhanapal Havale. B.A.L.L.B.,
XV Addl.C.M.M., Bangalore.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case CC.No.2585/2019
2.Name of the Complainant: Ramesh Kataria,
S/o.Late.K.L.Kataria,
Aged about 51 years,
residing at Flat No.405,
Ugal Paradise, Best Conti,
2nd Phase,
Hessargatta main road,
Vidyaranyapura,
Bangalore560 097.
3.Name of the accused: Eswaran S.
S/o.K.Sankareswaran,
Aged about 35 years,
R/at New No.27, G8 Street,
Next to Kattri Amman Temple,
Ulsoor, Bangalore08.
4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(2) Cr.P.C., accused is
hereby Convicted.
7.Date of final Order 26.05.2022.
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***
This complaint is filed U/Sec.200 of Cr.P.C. against the accused
for the offence punishable U/Sec.138 of the Negotiable Instruments
Act, 1881.
2. The facts of the complaint in brief are as under:
The complainant and the accused knew each other from past 6
months. The accused was introduced by one Imran, who is the resident
of Frazer Town Bangalore and well known to him. The accused
approached complainant for a hand loan of Rs.9,50,000/ and he paid
the sum of Rs.9,50,000/ to the accused in month of November 2017.
The accused assured to repay the loan on or before 1st week of
February 2018. The accused has issued a post dated cheques of
different dates and different amount for total sum of Rs.9,50,000/.
The accused issued a cheque bearing No.000392 dated 15.02.2018 for
a sum of Rs.2,50,000/ drawn on ICICI Bank, Cox Town, Bangalore
Branch at No.55, Coles Road, Frazer Town, Bangalore05. He presented
the said cheque for encashment through his Banker i.e.,Corporation
Bank, R.T.Nagar Branch on 15.02.2018 and it was returned with an
endorsement "Payment Stopped By Drawer" on 16.02.2018. He issued
the legal notice to the accused on 12.03.2018 and it was returned
unserved with shara 'left' on 14.03.2018. Thereafter the accused has
not paid the loan amount within 15 days. Hence prayed to punish the
accused and compensate the complainant.
3. After the institution of the complaint, cognizance has been
taken and the case has been registered as PCR No.6622/2018. The
sworn statement of the complainant has been recorded and on the basis
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of sworn statement and other materials on hand the criminal case has
been registered against the accused and summons was issued to him. In
response to the service of summons, the accused appeared through his
learned counsel and got enlarged on bail. The prosecution papers
supplied to the accused and the substance of accusation for the offence
punishable U/s.138 of Negotiable Instruments Act was read over to the
accused. He pleaded not guilty and claimed to be tried.
4. During trial the complainant examined as PW1 and got
marked Ex.P.1 to P.5. The statement of the accused U/s. 313 of Cr.P.C.
was not recorded. The accused did not lead defence evidence.
5. I have heard the arguments and perused the entire
materials. The following points would arise for my consideration.
1. Whether the complainant proves that the
accused issued a cheque bearing No.000392
dated 15.02.2018 for a sum of Rs.2,50,000/
drawn on ICICI Bank, Cox Town, Bangalore in his
favour towards the discharge of legally
enforceable debt/liability of accused and on its
presentation for encashment, it was dishonored
with an endorsement of "Payment Stopped By
Drawer" in the account maintained by the
accused and the accused has not paid the amount
even after 15 days from the date of service of
notice on him and thereby accused committed an
offence punishable U/Sec.138 of N.I. Act, 1881 ?
2. Whether the accused rebuts the presumption
U/s.139 of N.I.Act?
3. What order?
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6. My answers to the above points are as under.
Point No.1 : In the Affirmative
Point No.2 : In the Negative
Point No.3 : As per final order for the following;
REASONS
7. Point No.1 & 2: The points are taken together for discussion
to avoid repetition of facts and evidence. At this juncture it is necessary
to discuss the provisions under Section 138, 118(a) and 139 of the N.I.
Act., 1881 and the said provisions are extracted and they read as
under;
138. Dishonour of cheque for insufficiency, etc.,
of funds in the account - Where any cheque drawn
by a person on an account maintained by him with a
banker for payment of any amount of money to
another person from out of that account for the
discharge, in whole or in part, 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
provision of this Act, be punished with imprisonment
for a term which may be extended to two years, or
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with fine which may extend to twice the amount of
the cheque, or with both:
Provided that nothing contained in this section
shall apply unless:
(a) the cheque has been presented to the bank
within a period of six 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
demand for the payment of the said amount
of money by giving a notice in writing, to the
drawer of the cheque, within thirty days of
the receipt of information by him from the
bank regarding the return of the cheque as
unpaid; and
(c) the drawer of such cheque fails to make
the payment of the said amount of money to
the payee or as the case may be, to the holder
in due course of the cheque within fifteen days
of the receipt of the said notice.
Explanation: For the purposes of this
section, "debt or other liability" means a
legally enforceable debt or other liability.
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"118. Presumptions as to negotiable
instruments. - Until the contrary is proved,
the following presumptions shall be made:
(a) of consideration - that every
negotiable instrument was made or drawn
for consideration, and that every such
instrument, when it has been accepted,
indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or
transferred for consideration.
(b) as to date: that every Negotiable
Instrument bearing date was made or drawn
on such date;
"139. Presumption in favour of holder.
It shall be presumed, unless the
contrary is proved, that the holder of a
cheque received the cheque of the nature
referred to in section 138 for the discharge,
in whole or in part, of any debt or other
liability."
8. On plain perusal of the provisions under Section 118(a) and
139 of the N.I.Act., as extracted herein above, it can be seen that
initially the presumptions constituted under these two provisions
favour the complainant. However, it is open to an accused to raise a
defence to rebut the statutory presumptions. An accused can raise a
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defence, wherein the existence of legally enforceable debt or liability
can be contested.
9. It is also well established that an accused for discharging the
burden of proof placed upon him under a statute need not examine
himself. He may discharge his burden on the basis of the materials
already brought on record. An accused has constitutional rights to
maintain silence. The standard of proof on part of the accused and that
of the prosecution in a Criminal case is different. The prosecution must
prove the guilt of an accused beyond all reasonable doubts, the
standard of proof so as to prove a defence on the part of an accused is
"Preponderance of probabilities".
10. Under the light of above extracted provisions of the Act, I
have perused the oral and documentary evidence on record. In order to
prove his case the complainant examined himself as PW.1 and got
marked Ex.P.1 to P.5. Ex.P.1 is the cheque bearing No. 000392 dated
15.02.2018 for a sum of Rs.2,50,000/ drawn on ICICI Bank, Cox
Town, Bangalore and Ex.P.1(a) is the signature of the accused on the
cheque. Ex.P.2 is the Bank endorsement dated 16.02.2018, which was
issued with a Shara "Payment Stopped By Drawre". Ex.P.3 is the office
copy of the statutory notice dated 12.03.2018, which was issued
demanding the repayment of cheque amount. Ex.P.4 is the postal
receipt for having sent the legal notice to the accused. Ex.P.5 is the
postal envelope, which was returned with shara 'left' on 14.03.2018.
11. I have perused the exhibits on which the complainant has
placed his reliance. On plain perusal of the exhibits, it is clear that the
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cheque at Ex.P1 is the accused have given a cheque bearing No.000392
dated 15.02.2018 for a sum of Rs.2,50,000/ drawn on ICICI Bank, Cox
Town, Bangalore was presented through the Bank within its validity for
encashment.
12. On presentation of the cheque for encashment, the Bank
issued endorsement as per Ex.P.2 on 16.02.2018 with a shara "Payment
Stopped by Drawer". The Hon'ble Supreme Court of India has in the
case of Laxmi Dychem v. State of Gujarat and Ors. reported in (2012)
13 SCC 375 held that the expression "amount of money...........is
insufficient" appearing in Section 138, N.I. Act is a genus and dishonour
for reasons such as "account closed", "payment stopped", "referred to the
drawer" are only species of that genus and would attract penal liability
under section 138 N.I. Act. Further as per Judgment of Hon'ble Supreme
Court of India in the case of MMTC Ltd. v. Medchl Chemicals and
Pharma (P) Ltd., reported in (2002) 1 SCC 234, it was held that "A
complaint under Section 138 can be made not only when the cheque is
dishonoured for reason of funds being insufficient to honour the cheque or
if the amount of the cheque exceeds the amount in the account, but also
where the drawer of the cheque instructs its bank to "stop payment". If the
accused shows that in his account there were sufficient funds to clear the
amount of the cheque at the time of presentation of the cheque and that
the stoppayment notice had been issued because of other valid causes,
then offence under Section 138 would not be made out". Therefore the
endorsement "Payment Stopped By Drawer" also attracts the offence
punishable U/s.138 of N.I.Act.
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13. The complainant issued statutory notice dated 12.03.2018
as per Ex.P.3 within time from the date of receipt of Bank memo. The
notice was returned unserved with shara 'left' on 14.03.2018. As per
Judgment of Hon'ble Supreme Court of India in the case of N.
Parameswaran Unni v. G. Kannan, reported in (2017) 5 SCC 737, it
was held that "It is clear from Section 27 of the General Clauses Act,
1897 and Section 114 of the Evidence Act, 1872 that once notice is sent
by registered post by correctly addressing to the drawer of the cheque, the
service of notice is deemed to have been effected. However, the drawer is at
liberty to rebut this presumption". Further as per Judgment of Hon'ble
Supreme Court of India in the case of C.C.Alavi Haji Vs. Palapetty
Muhammed and Another reported in (2007) 6 SCC 555 , it was held
that "When the notice is sent by registered post by correctly addressing the
drawer of the cheque, the mandatory requirement of issue of notice in
terms of clause (b) of proviso to Section 138 of the Act stands complied
with. It is needless to emphasise that the complaint must contain basic
facts regarding the mode and manner of the issuance of notice to the
drawer of the cheque". The Hon'ble Supreme Court of India also held at
para No.17 as under;
17. It is also to be borne in mind that the
requirement of giving of notice is a clear departure from
the rule of Criminal Law, where there is no stipulation
of giving of a notice before filing a complaint. Any
drawer who claims that he did not receive the notice
sent by post, can, within 15 days of receipt of
summons from the court in respect of the complaint
U/s.138 of the Act, make payment of the cheque
amount and submit to the Court that he had made
payment within 15 days of receipt of summons (by
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receiving a copy of complaint with the summons) and,
therefore, the complaint is liable to be rejected. A person
who does not pay within 15 days of receipt of the
summons from the Court along with the copy of
the complaint u/s.138 of the Act, cannot obviously
contend that there was no proper service of notice as
required u/s.138, by ignoring statutory presumption to
the contrary u/s.27 of the G.C. Act and Section 114 of
the Evidence Act. In our view, any other interpretation
of the proviso would defeat the very object of the
legislation. As observed in Bhaskaran's case (supra), if
the 'giving of notice' in the context of Clause (b) of the
proviso was the same as the 'receipt of notice'
a trickster cheque drawer would get the premium to
avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section
138 of the Act.
In a nutshell it can be said that the statutory notice is an
opportunity given to the accused to make payment and avoid the
consequences of 138 of N.I.Act. In the case on hand, the summons sent
to the accused on the said address through RPAD and on the day fixed
for appearance i.e. 13.03.2019, the accused appeared through his
counsel, which shows that the summons was duly served on the
accused. Therefore he cannot take the shelter of statutory requirement
of service of notice to avoid the consequences of Section 138 of N.I.Act.
The complaint was filed on 30.04.2018, which is within limitation.
Therefore, the documents on record clearly show that the complainant
has complied the ingredients of Section 138(a) to (c) of the N.I.Act.
Therefore the presumptions U/s.118 and 139 of the N.I.Act arise in
favour of the complainant. The presumptions are rebuttable and the
burden is on the accused to rebut the presumptions. The presumption is
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that the cheque was issued for legally enforceable debt/ liability.
However actual existence debt or liability can be contested. The
accused can rebut the presumptions by raising probable defences and
proving it relying on the evidence of the complainant or by leading her
direct evidence.
14. The plea of the accused was recorded on 13.03.2019. The
case was posted for crossexamination of PW1 on 23.03.2019. The
PW1 was not crossexamined. The stage is for crossexamination since
then till 17.03.2022. Number of adjournments were given in four years.
The accused remained absent since long time. Sufficient opportunities
have been given to the accused to crossexamine PW1 further. The
Court has also issued and reissued NBW against the accused but the
accused was not secured. Therefore the crossexamination of PW1 was
taken as nil on 17.03.2022 and the case was posted for statement
U/s.313 of Cr.P.C. The accused did not appear before the Court since
long time. Hence the statement of the accused U/s.313 of Cr.P.C could
not be recorded. The Hon'ble High Court of Karnataka in Crl. Revision
Petition No.437/2010 in the case of R.V.Kulkarni Vs. Dakshina Murthy
vide Judgment dated 28.06.2012 held that it was for the accused to
appear before the Court and to have defended himself effectively and to
make himself available for the Court to record the statement U/s.313 of
Cr.PC. In the said case the complainant preferred the revision before
the Hon'ble High Court challenging the order of the First Appellate
Court in remanding the matter for fresh trial for non recording of the
statement of the accused U/s.313 of Cr.P.C. The Hon'ble High Court of
Karnataka observed that there is no justification of the Appellate Court
for having held that there is failure of justice on account of statement
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of the accused not having been recorded U/s.313 of Cr.P.C. The
Hon'ble High Court of Karnataka also discussed settled law in respect of
statement of accused U/s.313 of Cr.P.C by referring to the decision of
three judge bench of Hon'ble Supreme Court in the case of Basavaraj
R.Patil Vs.State of Karnataka reported in (2000) 8 SCC 740. It is clear
from the above decision that it is the duty of the accused to appear
before the Court and make available himself for recording of statement
U/s.313 of Cr.P.C. and to lead defence evidence. The accused failed to
utilize the opportunity by remaining absent. Therefore the statement of
the accused U/s.313 of Cr.PC was not recorded and the defence
evidence is taken as nil. The order sheet shows the conduct of the
accused in delaying the proceedings. It appears that the accused is not
interested in challenging the evidence of the complainant on record.
Therefore heard the arguments of counsel for the complainant and the
case was posted for Judgment.
15. PW.1 was not cross examined by the counsel for the
accused. There is nothing on record to disbelieve the case of the
complainant. There is no dispute that the cheque belongs to the
account pertaining to the accused and the signature on the cheque is
not disputed. The transaction and issuance of cheque is denied but no
specific defence was taken by the accused. The possession of the
cheque pertaining to the account maintained by the accused with the
complainant is not explained. The undisputed evidence of PW1
indicates that the accused has issued cheque at Ex.P.1 bearing No.
000392 dated 15.02.2018 for a sum of Rs.2,50,000/ drawn on ICICI
Bank, Cox Town, Bangalore towards the discharge of legally
enforceable debt. In the Judgment of Hon'ble Supreme Court of India
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in the case of Rangappa Vs. Mohan reported in (2010) 11 SCC 441, it
was held that the presumption mandated by Section 139 of N.I.Act does
indeed include the existence of legally enforceable debt or liability. It is
rebuttable presumption and it is open to the accused to raise a defence
wherein the existence of legally enforceable debt or liability can be
contested. However there can be no doubt that there is an initial
presumption which favours the complainant. Section 139 of the Act is an
example of reverse onus clause that has been included in furtherance of
the legislative objective of improving the credibility of negotiable
instruments. In view of the said decision, the burden is on the accused
to rebut the presumption by raising a probable defence and proving the
same by adducing direct evidence or by relying on the evidence of the
complainant. On the basis of evidence on record the Court has raised
statutory presumptions U/s.118(a) and 139 of N.I.Act. in favour of the
complainant. No doubt that the statutory presumptions are rebuttable
but the accused failed to rebut the evidence on record even though
sufficient opportunities were given to him. For the reasons mentioned
herein above, it is crystallized that the accused has utterly failed to
prove that there was no existence of legally enforceable debt between
him and the complainant at the given point of time and he has not at
all issued the instant cheque towards the discharge of legally
enforceable debt. Accordingly the accused is found guilty for the
offence punishable U/s.138 of the N.I.Act. Hence, I proceed to answer
the point No.1 in Affirmative and Point No.2 in the Negative.
16. Point No.3 : In view of the reasons assigned in Point No.1
and 2, it is clear that the liability of the accused to pay the amount is
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proved. Therefore considering the facts and circumstances of the case,
and in view of the reasons assigned on Point No.1 and 2, I proceed to
pass the following:
ORDER
As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine of Rs.2,65,000/ (Rupees Two Lakhs Sixty Five Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.2,60,000/ (Rupees Two Lakhs Sixty Thousand only). The remaining balance amount of Rs.5,000/ is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for three months.
The personal bond executed by the accused is hereby stands cancelled and cash surety of Rs.2,000/ furnished by the accused shall be refunded to him after expiry of appeal period.
The copy of the judgment shall be furnished to the accused at free of cost.
(Dictated to the Stenographer, transcript thereof is computerized and printout taken by him, is verified and then pronounced by me in Open Court on this the 26th day of May2022.) (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
15 CC.2585/2019 (J) ANNEXURE Witnesses examined for the Complainant: PW.1 Ramesh Kataria Documents marked for the Complainant: Ex.P.1 Cheque.
Ex.P.1a Signature of the accused.
Ex.P.2 Bank Endorsement.
Ex.P.3 Legal Notice.
Ex.P.4 Postal Receipt.
Ex.P.5 Postal Envelope.
Witnesses examined For Defence: Nil Documents marked for Defence: Nil (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.