Bangalore District Court
Suresh .S.N vs Sudhindra on 2 April, 2024
1
C.C.No.15955/2021
KABC030467722021
Presented on : 20-07-2021
Registered on : 20-07-2021
Decided on : 02-04-2024
Duration : 2 years, 8 months, 13 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated : This the 2nd day of April 2024
Present: Sri.N.M. RAMESHA, B'Com.,L.L.M.
XVI Addl.C.M.M., Bengaluru City.
Case No. C.C.No
: CC.No.15955/2021
Complainant : Suresh S.N.
S/o Late S.Murthy
Aged about 42 years
R/at No.86/1, 3rd Main Road,
Mount Joy Extn.,
Hanumanth Nagar,
Bangalore-560019.
(By Sri.S.V.Shashikantha., Adv,)
V/s
Accused : Mr.Sudhindra
S/o Late Krishnamurthy
Aged about 38 years
R/at No.1472/2, CH 11/2,
7th Cross,
KrishnamurthyPuram,
2
C.C.No.15955/2021
Mysore.
(By Sri.Mahadeva Deshok., Adv.,)
Case instituted : 10.11.2020
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of order : 02.04.2024
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 complainant and the accused were the friends. The accused had approached the complainant in the month of October 2019 for a loan of Rs.1,25,000/- for family necessities. The accused has agreed to repay the loan within 3 months. Therefore, the complainant has paid a loan of Rs.1,25,000/- to the accused. The accused has issued a post dated cheque bearing No.648852 dated 24.02.2020 for Rs.1,25,000/-, drawn on Canara Bank, Nanjumalige Branch, Mysuru in favour of the complainant towards the repayment of loan of 3 C.C.No.15955/2021 Rs.1,25,000/-. Therefore, the complainant has presented the cheque for encashment before the National Co-operative Bank Ltd., Gandhi Bazar Branch, Bengaluru on 24.02.2020. But the cheque was dishonoured for want of sufficient funds in the account of the accuse vide bank endorsement dated 25.02.2020. Therefore, the complainant got issued a legal notice dated 07.03.2020 calling upon the accused to pay the cheque amount within 15 days from the date of service of legal notice. The notice was served on the accused on 16.03.2020. But, in spite of service of legal notice, the accused has failed to repay the cheque amount within time and thereby committed an offence punishable U/s.138 of NI Act. Therefore, the complainant has presented the complaint before the court on 10.11.2020.
3. After presentation of complaint, it was ordered to be registered as PCR No.12133/2020 vide order dated 10.11.2020 by condoning the delay which was due to lockdown on account of covid-19 pandemic situation in view of the order passed by the Hon'ble Supreme Court in Suo-Moto Writ Petition (civil) 3/2020 vide dated 23.03.2020 and by virtue notifications issued by the Hon'ble High Court of Karnataka.
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4. The sworn statement of the complainant has been recorded and the documents were got marked as per Ex.P.1 to P.7.
5. My Learned Predecessor in office having heard the arguments of learned counsel for the complainant and having satisfied with the complaint averments, sworn statement of the complainant and the documents at Ex.P.1 to P.7 and having satisfied with the prima facie materials placed on record has taken the cognizance for the offence punishable U/s.138 of N.I.Act by condoning the delay which was due to lockdown on account of covid-19 pandemic situation in view of the order passed by the Hon'ble Supreme Court in Suo-Moto Writ Petition (civil) 3/2020 vide dated 23.03.2020 and by virtue notifications issued by the Hon'ble High Court of Karnataka and the case was ordered to be registered as CC.No.15955/2021 and the process was ordered to be issued against the accused vide order dated 20.07.2021.
6. On service of summons, the accused has appeared before the court through his learned counsel and obtained the bail by depositing the cash surety of Rs.1000/- vide Q No.12901 dated 19.02.2022. Copies of all the prosecution papers were supplied to accused.
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7. The Plea of accused for the offence punishable U/s.138 of N.I.Act has been recorded on 19.02.2022 and the substance of accusation has been read over and explained to the accused in the language known to him. The accused has pleaded not guilty, but claims to be tried.
8. In order to establish the guilt against the accused, the complainant got himself examined as PW-1 and got the documents marked as Ex.P.1 to P.7. PW.1 was subjected for cross examination by the learned counsel for the accused.
9. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded vide dated 15.09.2023 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 the complainant and the documents. The accused did choose to enter the defence evidence.
10. In order to substantiate his probable defence, the accused got himself examined as DW.1 and got the documents marked as per Ex.D.1 to D3. DW.1 was 6 C.C.No.15955/2021 subjected for cross examination by the learned counsel for the complainant.
11. I have heard the arguments of learned counsel for both the side. The learned counsel for the complainant has also filed notes of arguments along with citations.
12. In the light of the arguments canvassed by the learned counsel for both side, I have carefully perused the oral and the documentary evidence placed on record and also gone through the principles laid down in the cited decisions.
13. Now, the points that would arise for my consideration are as under:-
1. Whether the complainant proves that the accused has issued a cheque bearing No.648852 dated 24.02.2020 for Rs.1,25,000/- drawn on Canara Bank, Najumalige Branch, Mysuru in his favour towards the legally recoverable debt of Rs.1,25,000/- and on presentation of cheque for encashment before the National Co-operative Bank Ltd., Gandhi Bazar Branch, Bengaluru on 24.02.2020, it was dishonoured for want of sufficient funds in the account of the accused vide bank endorsement dt:25.02.2020 and in spite of issuance of legal notice dt: 07.03.2020 and in spite of service of legal notice on 7 C.C.No.15955/2021 16.03.2020, the accused has failed to pay the cheque amount and thereby committed an offence punishable U/s.138 of N.I.Act?
2. What Order?
14. On considering and assessing the oral and documentatry evidence placed on record, now my answers to the above points are as under :
[ Point No.1: In the Affirmative Point No.2: As per final order for the following :-
REASONS
15. Point No.1 : The provisions of Sec.20 of Negotiable Instrument Act deals about Inchoate Stamped Instruments. As per this provisions of law, where one person signs and delivers to another a paper stamped in accorance with the law relating to negotiable instrements then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima-facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, or any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be 8 C.C.No.15955/2021 liable upon such instruemnt, in the capacity in which he signed the same, to any holder in due course for such amount.
16. The provisions of Sec.118 of Negotiable Instrument Act deals about presumptions as to neogtiable instruments. As per this provisions of law, unit the contrary is proved, the following presumptions shall be made:-(a) of consideration: that every negotiable 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.
9C.C.No.15955/2021 [
17. The provisions of Sec.138 of Negotiable Instrument Act deals about dishonour of cheque for insufficiency etc., of funds in the accounts. As per this provisions of law, where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or 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 provision of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both.
18. As per the proviso attached to the above said provisions of law, nothing contained in this section shall apply unless-(a) the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier. (b) the payee or the holder in due 10 C.C.No.15955/2021 course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing , to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
[ 19. The provisions of Sec.139 of Negotiable Instrument Act deals about presumption in favour of holder. As per this provisions of law, it shall be presumed, unles the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, or any debt or other liability.
20. The provisions of Section 146 of the Negotiable Instruments Act, 1881 deals about the Bank's slip prima facie evidence of certain facts. As per this provisions of law, the Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of 11 C.C.No.15955/2021 dishonour of such cheque, unless and until such fact is disproved.
21. Now keeping the above said provisions of Section 20, 118, 138, 139 and 146 of N.I.Act, in mind, let us consider as to whether the complainant could able to comply all the madates, ingredients, terms and conditions of Section 138 of N.I.Act, so as to draw the presumption in his favour as per Section 118 and 139 of N.I.Act.
22. It is averred in the complaint and stated by PW.1 in his oral evidence that he and the accused were the friends and the accused had approached him in the month of October 2019 for loan of Rs.1,25,000/- for family necessities and the accused has agreed to repay the loan within 3 months and therefore, he has paid a loan of Rs.1,25,000/- to the accused and the accused has issued a post dated cheque bearing No.648852 dated 24.02.2020 for Rs.1,25,000/-, drawn on Canara Bank, Nanjumalige Branch, Mysuru in his favour towards the repayment of loan of Rs.1,25,000/- and therefore, he has presented the cheque for encashment before the National Co-operative Bank Ltd., Gandhi Bazar Branch, Bengaluru on 24.02.2020, but the cheque was dishonoured for want of sufficient funds in 12 C.C.No.15955/2021 the account of the accuse vide bank endorsement dated 25.02.2020 and therefore, he got issued a legal notice dated 07.03.2020 calling upon the accused to pay the cheque amount within 15 days from the date of service of legal notice and the notice was served on the accused on 16.03.2020, but, in spite of service of legal notice, the accused has failed to repay the cheque amount within time and therefore, he has presented the complaint before the court on 10.11.2020.
23. The complainant has produced a cheque dated 24.02.2020, bank endorsement dated 25.02.2020, legal notice dated 07.03.2020, postal receipt dated 07.03.2020, track consignment, complaint settled reply, delivery manifest and they are marked at Ex.P1 to P7.
24. The accused has not seriously disputed the fact that the cheque vide Ex.P1 dated 24.02.2020 is belongs to him and he has drawn the same on an account maintained by him with his banker namely Canara Bank, Nanjumalige Branch, Mysuru and his signature on the cheque vide Ex.P1(a). The accused has also not seriously disputed about the presentation of cheque for encashment before the National Co-operative Bank, Gandhi Bazar Branch, Bengaluru within its validity and the dishonour of cheque for want of 13 C.C.No.15955/2021 sufficient funds in his account vide bank endorsement at Ex.P2 dated 25.02.2020 and the issuance of legal notice vide Ex.P3 dated 07.03.2020 and the address mentioned on the notice and the service of legal notice on 16.03.2020 as per Ex.P6 & P7.
25. Infact, there are no material suggestions to PW.1 either to deny the cheque vide Ex.P1 or to deny the signature of the accused on the cheque as per Ex.P1(a) or to deny the presentation of cheque for encashment before the bank within its validity or to deny the dishonour of cheque for want of sufficient funds in the account of the accused vide bank endorsement at Ex.P2 dated 25.02.2020 or to deny the issuance of legal notice vide Ex.P3 or to deny the address mentioned in the notice or to deny the service of legal notice on 16.03.2020 as per Ex.P6 & P7.
26. But, on the other hand, it is suggested to PW.1 that he has issued the notice vide Ex.P3 to the accused on 07.03.2020 and he has obatined the postal acknowledgment vide Ex.P6 after filing the case before the court. Be that as it may, DW.1 in his entire evidence has not seriously disputed either the cheque vide Ex.P1 or his signature on the cheque as per Ex.P1(a) or the presentation of cheque for encashment before the bank 14 C.C.No.15955/2021 within its validity or the dishonour of cheque for want of sufficient funds in his account vide bank endorsement at Ex.P2 dated 25.02.2020 or the issaunce of legal notice vide Ex.P3 dated 07.03.2020 or the address mentioned on the notice or the service of legal notice on 16.03.2020 as per Ex.P6 & P7. In fact DW.1 has stated in his evidence that he and the complainant are the friends. In fact, DW.1 in his cross-examination has admitted that he and the complainant were studying together at Beluru School and College. DW.1 further stated that he has not issued any reply notice to the notice sent by the complainant.
27. From these materials placed on record including the material suggestions put to PW.1 and the admissions given by DW.1, it is crystal clear that the accused by necessary implications has admitted the fact that the cheque is belongs to him and he has drawn the same on an account maintained by him with his banker namely Canara Bank, Nanjumalige Branch, Mysuru and on presentation of cheque for encashment before the National Co-operative Bank, Gandhi Bazar Branch, Bengaluru, it was dishonoured for want of sufficient funds in his account and the issuance of legal notice including the address mentioned on the notice and the service of legal notice. Under these circumstances, it is 15 C.C.No.15955/2021 said that the admissions are the best proof for the complainant to comply the mandates of Sec.138 of NI Act.
28. However, on careful perusal of complaint averments, oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7, it clearly establishes that the cheque vide Ex.P1 is belongs to the accused and the signature on the cheque vide Ex.P1(a) is as that of the signature of the accused. The materials placed on record also establishes that on presentation of cheque for encashment, it was dishonoured for want of sufficient funds in the account of the accused vide bank endorsement at Ex.P2.
29. The materials placed on record further establishes that the complainant got issued a legal notice vide Ex.P3 dated 07.03.2020 giving 15 days time to the accused to comply the demands made in the notice. The legal notice was served on 16.03.2020 as per Ex.P6 & P7. The accused has not disputed the address mentioned on the notice vide Ex.P3. But, in spite of service of legal notice, the accused has failed to pay the cheque amount and therefore, complainant has presented the complaint before the court on 10.11.2020.
16C.C.No.15955/2021
30. It is pertinent to note here that the cheque vide Ex.P1 is dated 24.02.2020. As could be seen from the document at Ex.P2 that on presentation of cheque, it was dishonoured for want of sufficient funds in the account of the accused vide bank memo dated 25.02.2020. So, it is crystal clear that the complainant has presented the cheque before the bank for encashment within its validity and it was dishonoured for want of sufficient funds in the account of the accused.
31. As could be seen from the documents at Ex.P3, P4, P6 & P7, the complainant got issued a legal notice dated 07.03.2020 within the stipulated period of time from the date of receipt of bank endorsement giving 15 days time to the accused to comply the demands made in the notice. As could be seen from the documents at Ex.P6 & P7, the notice was served on the accused vide dated 16.03.2020. 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 10.11.2020. As already stated above, the delay in presenting the complaint which was due to lockdown was already condoned on account of covid-19 pandemic situation in view of the order passed by the Hon'ble Supreme Court 17 C.C.No.15955/2021 in Suo-Moto Writ Petition (civil) 3/2020 vide dated 23.03.2020 and by virtue notifications issued by the Hon'ble High Court of Karnataka.
32. So, it is crystal clear that the complainant has complied the mandates of Sec.138 of NI Act by adducing the oral evidence of PW.1 and by producing the documentary evidence at Ex.P1 to P7. Under these circumstances, when once the complainant has complied the mandates of Sec.138 of NI Act, then this court has no option but to draw the presumptions in favour of the complainant available under the provisions of Sec.139 of NI Act.
33. 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 NI Act and when once the court has drawn the presumptions in favour of the complainant under the provisions of Sec.118 and 139 of NI Act, then, the onus 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.
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34. 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 P7 which clearly establishes that the accused was known to complainant and received a loan of Rs.1,25,000/- from the complainant and accordingly, the accused has issued the cheque for repayment of loan amount of Rs.1,25,000/- and the cheque was dishonoured for want of sufficient funds in the account of the accused and therefore, the complainant got issued a legal notice which was served on the accused, 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.
35. It is further contended by the learned counsel for the complainant that the accused neither disputed the cheque nor his signature on the cheque or the presentation of cheque for encashment within its validity or the dishonour of cheque for want of sufficient funds in the account of the accused or the issuance of legal notice or the address mentioned on the notice or the service of legal notice on 16.03.2020 and the oral evidence of PW.1 is very much consistent and in confirmity with the documentary evidence at Ex.P1 to P7 19 C.C.No.15955/2021 and therefore, the presumptions are available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
36. It is further contended by the learned counsel for the complainant that the accused has taken a contention that he has not availed any loan from the complainant or issued any cheque to the complainant. But the said contentions 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.
37. 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 examined any witnesses before the court or produced any documents to substantiate his defence or to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 or to falsify the documentary evidence at Ex.P1 to P7 and the accused has not stated as to whom he has issued the cheque in question and thereby failed to rebut the statutory presumptions available in favour of the complainant 20 C.C.No.15955/2021 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 created and concocted the documents and in view of the accused failed to rebut the statutory presumptions, the accused is liable for conviction U/Sec.138 of NI Act.
38. In support of his submission, the learned counsel for the complainant has relied upon a decision rendered by the Hon'ble High Court of Bombay in Crl.A.No.795/2018 in between Praksh Madhukar Rao Desai V/s Dattatraya Shesh Rao Desai, wherein while dealing with the provisons of Sec.138 of NI Act, the Hon'ble High Court of Bombay has pleased to held that the mere absence of the amount advanced/lent to the drawer of the cheque being shown in the Income Tax Returns could not be of such importance so as to proclude the holder of the cheque from seeking to recover such liability. The complaint which is otherwise maintainable U/Sec.138 of NI Act., is not liable to be dismissed at the treshhold only on the ground that the complainant had failed to disclose the amount mentioned in the cheque in his Income Tax Returns.
39. Per contra, the learned counsel for the accused has vehemently contended that the oral evidence of 21 C.C.No.15955/2021 PW.1 and the documentary evidence at Ex.P1 to P7 do not establish the existence of loan transaction of Rs.1,25,000/- between the complainant and the accused and the issuance of cheque by the accused to the complainant towards the legally recoverable debt of Rs.1,25,000/- and also do not establish the money transaction between the complainant and the accused and the capacity of the complainant to lend that much of loan of Rs.1,25,000/- to the accused and thereby the complainant has failed to prove the money transaction and the issuance of cheque towards the legally recoverable debt of Rs.1,25,000/-.
40. 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 also by producing the documentary evidence at Ex.D1 to D3 and also by eliciting the material facts in the cross-examination of PW.1 which clearly establishes that the accused has not availed any loan from the complainant and also not issued the cheque in question to the complainant at any point of time and the complainant has not declared the lending of loan to the accused in his Income Tax Returns and also not placed any materials to show that he was having sufficient source of Income so as to lend loan to 22 C.C.No.15955/2021 the accused and the complainant also not stated the date of approach of accused for loan and the date of loan and the accused had issued the cheque to some persons and the complainant has filed the case by misusing the cheque and therefore, question of repayment of cheque amount does not arise and there was no legally enforceable debt between the accused and 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.
41. Now, keeping the arguments canvassed by the learned counsel for both the side and the principles laid down in the cited dicision 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 with legal evidence and whether the accused could able to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act.
42. It is the evidence of DW.1 before the court on oath that he and the complainant were the friends and he has not availed any loan from the complainant and 23 C.C.No.15955/2021 there was no loan transaciton between him and the complainant and he has not issued any cheque to the complainant.
43. The accused has produced the Canara bank statement consisting of 6 pages, Karnataka Bank Statement consisting of 18 pages and the Certificate U/Sec.65-B of Indian Evidence Act and they are marked at Ex.D1 to D3.
44. But, though the accused has taken these bald defences and 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 or produced any cogent documentary evidence either to substantiate his probable defence or to rebut the statutory presumptions available in favour of the complainant under the provisions of Sec.118 and 139 of NI Act or to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 or to falsify the documentary evidence at Ex.P1 to P7.
45. No doubt, it is suggested to PW.1 that the accused was having transaction with some other 24 C.C.No.15955/2021 persons to whom he had issued the several cheques out of which, one cheque has been misused through him and filed a false case against the accused; that there was no any financial transaction between him and the accused and that the accused has not issued any cheque in his favour.
46. 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 P7.
47. No doubt, it is forthcoming in the evidence of PW.1 that he do not know as to who written the cheque and the bank memo vide Ex.P2 was issued by the bank in which, he was working and he do not know the date of lending of loan and he do not have documents to show that he was having that much of amount to lend the loan to the accused and he has not declared the lending of loan to the accused in his Income Tax 25 C.C.No.15955/2021 Returns. But, merely on the basis of these admissions made by PW.1, the entire evidence of PW.1 and the documentary evidence at Ex.P1 to P7 cannot be discarded in toto and the financial capacity of the complainant so as to lend the loan of Rs.1,25,000/- to the accused cannot be doubted.
48. Because, it is forthcoming in the evidence of PW.1 that the complainant and the accused were the friends and PW.1 has been working as Deputy Manager at National Co-operative Bank and since the accused is the friend of complainant, the complainant has paid the loan to the accused by way of cash and therefore, the complainant has not declared the lending of loan of Rs.1,25,000/- to the accused in his Income Tax Returns. It is also forthcoming in the evidence of PW.1 that on the date of loan, the accused has issued a postdated cheque in favour of the complainant and the complainant has presented the cheque before the bank with due intimation to the accused and soonafter the dishonour of cheque, the complainant had intimated the accused, but the accused has failed to pay the cheque amount within time and therefore, the complainant has issued the notice, but in spite of service of legal notice, the accused has failed to pay the cheque amount and hence, the 26 C.C.No.15955/2021 complainant has presented the complaint before the court.
49. It is also no doubt true that if the money transaction exceeds the limit of Rs.20,000/-, it has to be made by way of cheque. Reference in this regard may also be made to the provisions of Sec.269ss of Income Tax Act, 1961 and the complainant was expected to declared the outstanding amount and also liability in the Income Tax Returns. But, the provisions of Negotiable Instruments Act do not mandates that the monitary transaction has to be done only by way of account payee cheque. Under these circumstances, if at all the complainant has not complied the mandates of Income Tax Act or any other Law, then it is for the concerned to take necessary legal action against the complainant as per the provisions of law and not the accused before this court in this proceedings which is admittedly a summary in nature as per the provisions of Sec.143 of NI Act as the accused has admitted the cheque and his signature on the cheque including the dishonour of cheque and the service of legal notice. Therefore, the entire case made out by the complainant and the oral evidence of PW.1 and the documentary evidence at Ex.P1 to P7 cannot be doubted or cannot be discarded in toto.
27C.C.No.15955/2021
50. It is pertinent to note here that if really the accused had no financial transaction with complainant at any point of time and if really the accused had not issued the cheque in question to the complainant and if really the accused had issued several cheques to some other person and not to the complainant in respect of different transactions and if really the said person had failed to return the said cheques and if really the said person misused the cheque by filing false complaint through the complainant, then the accused could have taken some legal action against the complainant or against the said person for misuse of cheque or the accused could have produced some documents to show that he was having different transactions with other person and issued the several cheques to the said person or the accused could have issued a notice to the complainant or to the said person to get back the cheque or the accused could have issued stop payment instructions to the concerned bank to stop the payment or the accused could have issued a reply notice to the complainant narrating the alleged real facts or the accused could have said the specific defence either at the time of recording of plea vide dated 19.02.2022 before the court or at the time of recording of statement U/Sec.313 of Cr.P.C. vide dated 15.09.2023 or the 28 C.C.No.15955/2021 accused could have examined any independent witnesses or atleast the person with whom the accused stated to have transaction and stated to have issued several cheques which evidences the defence taken by the accused.
51. 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 or in the absence of legal action against the complainant or against the said person or in the absence of stop payment instructions to the concerned bank or in the absence of police complaint against the complainant or against the said person for misuse of 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.
52. But, on the other hand, DW.1 has admitted in his evidence that as per the Canara Bank Statement vide Ex.D1 shown to him, the bank balance as on October 2019 was Rs.178/- and there was no 29 C.C.No.15955/2021 impediment for him to send a reply notice to the complainant and he has not lodged any complaint before any police station against the complainant for alleged misuse of cheque and he do not know the name of person to whom he has issued several cheques and he has not disclosed the name of said person in his evidence and he do not know as to who is the said person.
53. No doubt, the accused has produced the bank statements and the certificate and they are marked at Ex.D1 to D3. But, the documents at Ex.D1 to D3 do not indicate or establish that the accused had transactions with other person and he has issued several cheuques including the cheque in question to the said person. Even according to the accused and as admitted by DW.1 in his evidence that the bank statements would indicate that his bank balance was Rs.178/- as on October 2019. Under these circumstances, even the documents at Ex.D1 to D3 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 under the provisions of Sec.118 and 139 of NI Act or to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 or to falsify the documentary evidence at Ex.P1 to P7.
30C.C.No.15955/2021
54. It is pertinent to note here that at one point of time, the accused has taken a defence of as that of total denial at the time of recording the plea vide dated 19.02.2022 and also at the time of recording of statement U/Sec.313 of Cr.P.C. vide dated 15.09.2023 and he has not taken any such 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 19.02.2022 and at the time of recording of statement U/Sec.313 of Cr.P.C. vide dated 15.09.2023. But, at another point of time, the accused has feigned his ignorance about the presentation of cheque and the dishonour of cheque in his statement U/Sec.313 of Cr.P.C. But, at another point of time, the accused has admitted the issuance of legal notice and also service of legal notice in his statement U/Sec.313 of Cr.P.C.
55. Further, at one point of time, the accused has stated that he was having sufficient source of income and therefore, there was no ncessity for him to avail the loan from the complainant which has not been proved by the accused before the court. But, at another point of time, the accused has taken a contention in his evidence that there was no money transaction between him and complainant and he has not issued any cheque in favour of the complainant and he has issued the cheque to 31 C.C.No.15955/2021 other person in respect of different transaction and not to the complainant. But, the accused has not examined any witnesses before the court to substantiate the same. But, at another point of time, the complainant has taken a contention during the course of cross-examination of PW.1 that the complainant had no financial capacity to lend the loan.
56. So, from these materials placed on record, it is crystal clear that the accused has kept on changing his version 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.1,25,000/- 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 and much reliance cannot be placed on the oral evidence of DW.1 and the documentary evidence at Ex.D1 to D3 as the said documents do not establish the defence taken by the accused.
32C.C.No.15955/2021
57. 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.1,25,000/- and on presentation of cheque for encashment before the Bank within its validity, it was dishonoured for want of sufficient funds in the account of the accused vide bank endorsement at Ex.P2 dated 25.02.2020. 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 & P7, has failed to pay the cheque amount within stipulated period of time and therefore, the complainant has presented the complaint before the Court.
58. 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 of NI Act. The documents at Ex.P3, 4, 6 & 7 being the legal notice, postal receipt, complaint settled reply and track consignment clearly establishes the service of legal notice. The accused has admitted the cheque and the address mentioned on the notice. Under these 33 C.C.No.15955/2021 circumstances, the statutary presumptions under the provisions 118 and 139 of NI Act are available in favour of the complainant.
59. 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 P7 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 to D3 do not probablize the defence taken by the accused or rebut the statutory presumptions available in favour of the complainant U/Sec.118 and 139 of NI Act or to falsify the case made out by the complainant or to falsify the oral evidence of PW.1 or to falsify the documentary evidence at Ex.P1 to P7. In fact, the accused neither issued any notice to get back the cheque nor taken any legal action against the complainant or against the person to whom he has issued the cheque for misuse of cheque or issued any stop payment instructions to the concerned bank or any 34 C.C.No.15955/2021 reply 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 P7.
60. 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 signature on the cheque including the service of legal notice and thereby the accused has admitted about the cheque for legally recoverable debt of Rs.1,25,000/- which was dishonoured for want of sufficient funds in the account of the accused vide bank endorsement at Ex.P2 dated 25.02.2020, but in spite of service of legal notice vide Ex.P3 as per Ex.P6 & 7, 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 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 against any person 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 35 C.C.No.15955/2021 has obtained the cheque from any person 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 and the decision cited in this regard is also applicable to the present facts and circumstances of the case.
61. 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 P7 do not establish the loan transaction of Rs.1,25,000/- between the complainant and the accused and the existence of legally recoverable debt of Rs.1,25,000/- and the issuance of cheque for legally recoverable debt of Rs.1,25,000/- 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 by producing the doucmentary evidence at Ex.D1 to D3 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 issued several cheques to different persons, but the said person has misused the cheque and filed the case for wrongful gain through the complainant and the complainant has 36 C.C.No.15955/2021 not declared the lending of loan to the accused in his Income Tax Returns and infact, the complainant had no financial capacity to lend that much of loan to the accused 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.
62. Therefore, for the reasons discussed above, this court is of the considered view that the materials placed on record clearly establishes the guilt against the accused for the offence punishable U/Sec.138 of N.I.Act. Hence, I hold that the complainant has proved the guilt against the accused for the offence punishable U/s.138 of NI Act. Hence, I answer the point No.1 in the 'Affirmative'.
63. POINT. No.2:- The provisions of Section 138 of N.I.Act provides punishment for imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of cheque or with both. In the present case, the accused and the complainant were known to each other and they are the friends and the accused has received the loan from the complainant for family necessities and issued the cheque for repayment of Rs.1,25,000/- which was 37 C.C.No.15955/2021 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:-
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.2,00,000/- (Rupees Two 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.1,90,000/- (Rupees One Lakh Ninety Thousand only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining 38 C.C.No.15955/2021 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.1000/- deposited by the accused vide Q.No.12901 dated 19.02.2022 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.
(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 2nd April 2024).
(N.M.RAMESHA) XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri.Suresh S.N.
2. List of documents exhibited on behalf of the Complainant:-
Ex.P.1 : Original Cheque.
Ex.P.1(a) : Signatures of the Accused.
Ex.P.2 : Bank Memo.
39
C.C.No.15955/2021
Ex.P.3 : Copy of Legal Notice.
Ex.P.4 : Postal Receipt.
Ex.P.5 : Complaint.
Ex.P.6 : Complaint settled reply.
Ex.P.7 : Track Consignment.
3. List of witness/s examined on behalf of the Accused:-
DW.1 ; Mr.Sudhindra
4. List of documents exhibited on behalf of the Accused:-
Ex.D.1 & 2 : Bank Statements.
Ex.D.3 : Certificate U/Sec.65 B of Indian Evidence Act.
(N.M.RAMESHA) XVI ACMM, Bengaluru City.40
C.C.No.15955/2021 2.4.2024 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.2,00,000/- (Rupees Two 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.1,90,000/- (Rupees One Lakh 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.1000/- deposited by the accused vide Q.No.12901 dated 19.02.2022 41 C.C.No.15955/2021 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