Bangalore District Court
Bhoosiri Chits Pvt. Ltd vs Nagashree on 13 September, 2024
C.C.NO.39028/2022
0
KABC030906622022
Presented on : 26-12-2022
Registered on : 26-12-2022
Decided on : 13-09-2024
Duration : 1 years, 8 months, 18 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M., Bangalore City.
DATED; THIS THE 13TH DAY OF SEPTEMBER-2024
C.C.NO.39028/2022
Complainant: Bhoosiri Chits Private Limited,
Registered under the companies Act,
Having registered O/at No.11, 1st Floor,
Dattatreya road, near National Co-operative
Bank Ltd., Basavangudi, Bangalore-560004,
R/by its Managing Director,
B.Y.Thimmegowda.
(By Sri.R.Madhusudhana Reddy.,Adv.,)
V/s
Accused: Smt.Nagashree W/o Krishna.U.Hiriyur,
R/at No.006, Ground Floor, Sumukha
Simhadri Springs Apartment, Simhadri Layout,
Behind ICICI Bank, Utharahalli,
Subramanyapura, Bangalore-560061.
Also having address at: No.T-03, 3rd Floor,
Varaha Residency, Gurudhath Layout,
Hosakerehalli, Bangalore-560085.
(By Sri.Mariyappa and Anr.,Advs.,)
C.C.NO.39028/2022
1
:JUDGMENT:
This case arises out of the complaint filed by the complainant against the accused under section 200 of Cr.P.C,. for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that the complainant is a private limited company engaged in the business of chit funding. Further stated that one Mr.Umashankar.H.K the proprietor of BPR Soft Systems had participated in the chit conducted by the complainant in chit reference No.2BS/LT/18-13. The value of the chit of Rs.60,00,000/-. The monthly subscription amount of Rs.1,50,000/-. The accused stood as one of the surety. Further stated that Mr.Umashankar.H.K has successfully bid the above chit and he has received for Rs.43,39,000/- after deducting the service tax towards. Further stated that he has paid chit premium till the bidding of the chit. Thereafter he has intentionally defaulted in payment of the chit premiums. It is further stated that the representatives of the complainant were in contact with the accused and were regularly following up for payment of dues and in concurrence of repayment of the aforesaid dues the accused issued the cheque No.000055 dated: 16.05.2022 for Rs.45,00,000/- drawn on Bank of Baroda, Vijayanagar Branch, Bengaluru.
C.C.NO.39028/2022 2 The complainant was presented the said cheque on 24.06.2022 for realization through its banker the Karur Vysya Bank, Basavanagudi branch, Bangalore. But the said cheque was dishonored on 27.06.2022 as "Refer to drawer". Thereafter on 16.07.2022 the complainant got issued a statutory notice to the accused through its counsel by RPAD calling upon her to pay the cheque amount within 15 days from the date of the receipt of the notice. The said notice was returned as 'addressee left'. After issuance of the notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 30.08.2022.
3. After the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 23.12.2022 to register the case in Register No.III and it was registered as a criminal case.
4. Thereafter, summons was issued to the accused and she has appeared before the court through counsel and secured bail. She has furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was C.C.NO.39028/2022 3 recorded by the court. She has pleaded not guilty and make a defence.
5. The complainant in support of its case, have examined its Managing Director as PW.1 and got marked 18 documents at Ex.P.1 to 18 and closed its side.
6. After closer of the evidence of the complainant, the statement of the accused under section 313 of Cr.P.C, was recorded. She has denied the incriminating evidence appearing against her. Inspite of sufficient opportunity the accused not lead defence evidence. Hence, the defence evidence taken as nil. But during the course of cross examination of P.W.1 06 documents were marked at Ex.D.1 to 6 by way of confrontation.
7. I have heard the arguments on both the sides and perused the written argument filed by the learned counsel for the accused and also perused the material placed on record.
8. The learned counsel for the complainant has relied upon the citation reported in (2023) 10 SCC 148, 2020 SCC online Kar 2313 and (2019) 4 SCC 197.
9. The learned counsel for the accused has relied upon the judgment in C.Antony V/s K.G.Raghvan Nair in Crl.A.No.1748/1996.
C.C.NO.39028/2022 4
10. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2. Whether the complainant further proves that the accused had issued the cheque-Ex.P.1, towards the discharge of the said legally enforceable debt/liability.?
3. Whether the complainant further proves that cheque-Ex.P.1 was dishonored for the reasons "Refer to Drawer" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
11. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following;
:REASONS:
12.POINT NO.1 AND 2: These two points are inter-related to each other and findings given on any one point will bearing on the another. Hence, in order to avoid repetition of facts, I have taken these two points C.C.NO.39028/2022 5 together for common discussion. The case of the complainant is that he was acquainted with the accused. Further one Umashankar.H.K the proprietor of BPR Soft Systems had participated in the chit conducted by the complainant. The value of the chit is for Rs.60,00,000/-. The monthly subscription amount for Rs.1,50,000/-. The accused stood as one of the surety to him. Further the said Mr.Umashankar.H.K has successfully bid the chit and he has received a sum of Rs.43,39,000/- after deducting the service tax towards the successful bid. Further he has paid chit premium till the bidding of the chit. Subsequent to the bidding he has intentionally defaulted in payment of the chit premiums. Thereafter the representatives of the complainant were in contact with the accused for payment of dues and in concurrence of the said dues the accused had issued the cheque in question. The complainant was presented the said cheque for realization through its banker. But the said cheque was dishonored as "Refer to drawer". Thereafter the complainant got issued a statutory notice to the accused through its counsel by RPAD calling upon her to pay the cheque amount within 15 days from the date of the receipt of the legal notice. After issuance of the notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of C.C.NO.39028/2022 6 N.I.Act. Hence, the present complaint came to be filed before this court.
13. At this juncture, it is necessary to go through the provisions of N.I.Act before proceeding further. The provisions under Section 118(a) and 139 of the Act., 1881 are extracted and they reads thus;
"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."
14. On plain perusal of the provisions under Section 118(a) and 139 of the N.I.Act., as extracted C.C.NO.39028/2022 7 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 defence, wherein the existence of legally enforceable debt or liability can be contested.
15. It is also well established that an accused for discharging the burden of proof placed upon her under a statute need not examine herself. She may discharge her burden on the basis of the materials already brought on record. An accused have constitutional rights to maintain silence. 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".
16. Under the light of above extracted provisions of the Act, I have perused the oral and documentary evidence on record. In support of the case, the complainant have examined its Managing Director as P.W.1 and 18 documents were marked at Ex.P.1 to 18. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the cheque issued by the accused in favour of the complainant dated: 16.05.2022 for Rs.45,00,000/-.
C.C.NO.39028/2022 8 Ex.P.1(a) is the signature of the accused. Ex.P.2 is the bank memo dated: 27.06.2022 informing the dishonor of the cheque as "Refer to drawer". Ex.P.3 is the office copy of legal notice dated: 16.07.2022. Ex.P.4 are the postal receipts. Ex.P.5 and 6 are the returned postal covers. Ex.P.5(a) and Ex.P.6(a) are the returned legal notices. Ex.P.7 is the enrollment application submitted by the Mr.Umashankar. Ex.P.8 is the chit agreement executed by the Mr.Umasahankar. Ex.P.9 is the confirmation letter executed by the Mr.Umashankar and sureties. Ex.P.10 is the cash receipt. Ex.P.11 is the voucher. Ex.P.12 is the surety proposal form. Ex.P.13 is the guarantee. Ex.P.14 is the on demand. Ex.P.15 is the agreement creating lien in favour of foreman. Ex.P.16 is the party ledger. Ex.P.17 is the board resolution. Ex.P.18 is the complaint.
17. I have perused the exhibits on which the complainant have placed her reliance. On perusal of the exhibits, it is clear that cheque in question was presented for encashment within its validity. The bank endorsement with a shara "Refer to drawer". The complainant issued the legal notice within one month from the date of receipt of memo. The notice was returned as addressee left. The complaint was filed on 30.08.2022, which is within limitation. The transaction with the complainant is not seriously disputed. The issuance of the cheque and the signature on the C.C.NO.39028/2022 9 cheque-Ex.P.1 is admitted. Therefore, the documents on record clearly show that the complainant have complied the ingredients of section 138(a) to (c) of the N.I.Act. Therefore, the presumptions under section 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 that the cheque was issued for legally enforceable debt/liability. However actual existence debt/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.
18. The case was seriously contested by the accused and the service of notice was disputed. The notice was not served on the accused. It was returned with a shara 'addressee left' as per Ex.P.5 and 6. The accused also denied the service of notice. The counsel for the accused cross-examined PW-1 in respect of non service of notice. But PW.1 denied the same. Further contended that the notice sent to the accused not served'; that the accused has no knowledge of the notice as it was not served on her; that the accused did not give reply notice as the notice was not served on her; that she did not produce any documents to show that the accused was not residing at the said address and that the accused did not issue reply notice as she C.C.NO.39028/2022 10 was not residing at the said address. The counsel for the accused has submitted that no legal presumption can be raised as the notice was sent to the wrong address and the accused was not residing at the said address. On the other hand, the counsel for the complainant argued that as on the date of executing documents the accused has given the said address, hence, the complainant was given the notice to the said address and same has been duly served. In Ex.P.3, wherein the name of accused is appearing, was confronted.
19. On perusal of Ex.P.3, it is clear that the name of the accused is appearing in the notice. The same notice was sent to the accused. The accused not given reply. There is no evidence on record to show that the accused was residing at some other address other than the address mentioned in the notice at Ex.P.3. On the other hand, it is clear from the documents that the accused was residing at the said address. The above discussion clearly shows that the address mentioned in the notice is the correct address of the accused. As the notice was given to accused and the same notice was sent to her through RPAD, an inference can be drawn that the notice was also served on the accused. Further the address mentioned in the notice being the correct address of the accused, the presumption as per Section 27 of General Clauses Act C.C.NO.39028/2022 11 can be drawn. It states that the notice sent through post shall be deemed to be served, if it is properly addressed to a person to whom it is sent.
20. 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 was duly served through her husband and she has appeared through her counsel. The accused also admitted the service of summons. She appeared before the Court and contested the case by taking all probable defences. Therefore she 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 30.08.2022, which is within limitation. The accused admitted the issuance of cheque and signature in the cheque. It is her defence that there is no due to the complainant and she has not issued the cheque for repayment of the due. Further she has issued the two cheques for the purpose of security of her chit. Therefore, the documents on record clearly show that the complainant have complied the ingredients of section 138(a) to (c) of the N.I.Act. Therefore the presumptions under 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. Once the issuance C.C.NO.39028/2022 12 of the cheque and signature are proved, the presumption arises in respect of the fact that the cheque was issued for legally enforceable debt/liability. The accused can rebut the presumption by raising probable defence and proving it relying on the evidence of the complainant or by leading her direct evidence.
21. In order to prove her defence, the accused not adduced any oral as well as documentary evidence on her behalf. Hence, the defence evidence taken as nil. But during the course of cross examination of P.W.1 06 documents were marked at Ex.D.1 to 6 by way of confrontation. Ex.D.1 to 3 are the sworn statements case filed against Krishna.D, Anand Kumar.S and Bashir Ahmed. Ex.P.4 to 6 are the certified copies of cheques presented in Ex.D.1 to 3.
22. The main defence of the accused is that she had issued two blank cheques to the complainant at the time of her chit in S.J.Construction company for the purpose of security. Further she has already paid entire amount to the complainant. Further contended that even after payment of entire amount the complainant failed to return the cheques. Further the cheque in question is not given by her to the complainant for discharge of any liability. Further contended that she has never admitted regarding repayment of amount. She has specifically denied having agree to repay the amount of Rs.45,00,000/-. But the accused in her C.C.NO.39028/2022 13 defence has not disputed Ex.P.1 being her cheque drawn on her account. She also does not dispute her signature appearing on the said the cheque.
23. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused is a surety to the one Mr.Umashankar.H.K. The face of the value of the chits are Rs.60,00,000/-. Further argued that the said subscriber successfully bid the said chit and received for Rs.43,39,000/- after deducting the service tax towards. Further argued that the said subscriber has paid the chit premium till bidding of the chit. Subsequently, he willfully and intentionally defaulted in payment of monthly chit installments. Thereafter the complainant informed the accused to pay the chit premium regularly. But he failed to do the same and thereby he became a chit defaulter. It is further argued that after repeated request made by the complainant, the subscriber and the accused have not paid any amount to the complainant. Thereafter, the complainant approached the accused to clear the pending amount, the accused towards the discharge of the said payment had issued the cheque-Ex.P.1. He further argued that the accused has not denied Ex.P.1 C.C.NO.39028/2022 14 being her cheque drawn on her account and signature on the said cheque. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the case of the complainant. The defence have failed to rebut the presumption under section 139 N.I.Act.
24. The counsel for the complainant further argued that the accused has failed to produce any believable evidence that she has not issued the cheque in favour of the complainant for repayment of the amount and why she has not returned back the same is not clear. He further argued that the accused has failed to produce any oral or documentary evidence regarding the repaid the amount to the complainant. Further argued that to prove under section 139 of N.I.Act, there is a presumption that the cheque has been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.1 being her cheque drawn on the account of the accused. The said presumption is available to the complainant. Further argued that the accused has failed to disprove the case of the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount in favour of the person as shown in it. It is for C.C.NO.39028/2022 15 the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that she is no due to the complainant and she is not a surety to the chit subscriber. As such, very defence of the accused is not believable. He further argued that the complainant have examined its Managing Director as P.W.1 and he was fully cross examined by the accused, but nothing has been elicited in his the mouth. It is further argued that the accused not adduced oral as well as documentary evidence to prove her defence and further she has not produced any documents. The complainant proved its case. It is further argued that the accused herself has signed and delivered the cheque in favour of the complainant. After dishonor of the cheque the complainant issued a legal notice to the accused, inspite of this the accused has not taken any legal action nor produced any documents before this court to disprove the same. It is further argued that the accused was a surety and she has singed the necessary documents as prescribed under the chit funds act as such for rebuttal, the accused not produced any documentary evidence to disprove the case of the complainant. The complainant proved the case to in all the ingredients of section 138 of N.I.Act. Further the complainant proved that there was a legal due amount standing as on the date of the issuance of cheque and also the cheque was dishonored and the C.C.NO.39028/2022 16 complainant has duly issued a legal notice to the accused. The accused only to escape from the liability has taken false defence. Hence, he prays to convict the accused.
25. The learned counsel for the accused has argued that there was no any legally enforceable debt/liability to the complainant from the accused for which the cheque was issued. Further argued that the accused is not liable/due to pay any amount to the complainant as alleged in the complaint. It is further argued that the accused has not issued the alleged cheque in favour of the complainant to discharge any liability. The complainant is not entitled for any of the reliefs as sought in the complaint. It is further argued that the complainant has falsely stated in the complaint that the accused is a surety to the chit subscriber Mr.Umashankar and she put a signatures on the documents. It is further argued that the complainant has created a false story only for the purpose of this complaint and to harass the accused. It is further argued that the accused has not issued the cheque in question in favour of the complainant with an assurance that the said cheque would be honored on its presentation. It is further argued that the accused has not issued any cheque for payment of any due amount in favour of the complainant. The complainant has misused the cheque and presented the same C.C.NO.39028/2022 17 through its banker and filed false case. It is further argued that no notice was issued to the accused and no notice was served on the accused as alleged in the complaint. The complainant intentionally send a legal notice to the wrong address of the accused.
26. The learned counsel for the accused has filed written argument. In his written argument he has reiterated the brief facts of the case. Further submits that the complainant lead his evidence as PW.1 and marked documents as Ex.P.1 to 18. The accused pleaded not guilty and the accused cross examined PW.1. Further the complainant misused the security cheque given in her chit i.e., S.J.Construction and she was joint principle subscriber in the said chit and after repayment of entire amount in the S.J.Construction chit, the complainant to get the wrongful gain and misused the cheque of the accused. In the cross examination of PW.1, he said that the company was registered before the registrar, but to prove the same PW.1 has not produced any documents before the court and even in the complaint or sworn statement he has not stated that the company was registered. As per Section 4 of the Chit Funds Act, "No chit shall be commenced or conducted without obtaining the previous sanction of the State Government etc". In this case, the complainant company has not registered and same has no right to do any chit business as per law.
C.C.NO.39028/2022 18 As per section 7 of Chit Funds Act "Every chit agreement shall be filed in duplicate by the foremen with registrar". PW.1 produced the chit agreement as Ex.P.8 in respect of chit Ref.No.2BS/LT/18-13 and same was not endorsed by any registrar and no sign or seal of the concerned registrar on Ex.P.8. Also the complainant has not complied the proviso of Section 6 of Chit Funds Act. The complainant has not complied the Section 8 of Chits Funds Act. When the prized subscriber failed to pay the subscription regularly, the complainant have to demand future subscriptions by written notice as per section 33 of Chits Funds Act. In this case the complainant has not issued any notice by demanding the future subscription amount and PW.1 also admitted in his cross examination that "he has not demanded future subscription by notice". Therefore, the complainant has no right to lead any chit business in the state, due to failure of follow the provisions of the Chits Funds Act. Hence, the complaint is not maintainable and the accused liable to acquitted.
27. Further submits that the complainant misused Ex.P.1-cheque, which was taken in another chit (S.J.Construction) and the complainant has written the amount of his convenient and in his cross examination he admitted that the cheque in question was filled in different handwriting and ink color and in supportive of the said aspect the accused produced Ex.D.4 to 6 to C.C.NO.39028/2022 19 show that the complainant filed the different cases against the different persons and all the cheques are written in same handwriting and PW.1 also admitted same is his cross examination. Therefore, the defence taken by the accused that the complainant has filled the cheque and filed the case is seems to be more probable than that the case made out by the complainant. Further the complainant has not issued any notice by demanding accused/surety person to pay the due amount and notice issued under section 138 of N.I.Act was not served to the accused, even though she is residing in her permanent residence. It is further submits that the complainant said in his complaint as well as sworn statement that subsequent to the bidding the principal subscriber defaulted in payment of installments but in the cross examination of PW.1 he admitted that the principal subscriber after bid the chit he paid 14 installment. Thereby PW.1 given contradictory evidence before the court. On this ground the complaint is not maintainable. Further PW.1 produced the documents as Ex.P.9 belong to chit group No.2BS/ST/17 and the said document no way connected to the chit group No.2BS/LT/18-13, on this ground also the complaint is not maintainable. Further submits that PW.1 produced documents as Ex.P.10 belongs to chit group No.2BS/LT/18-13 i.e., cash receipts. The said documents was created one by the complainant and he has created this document to his C.C.NO.39028/2022 20 convenient and there is no signatures of subscriber or sureties, if the complainant paid the said amount to concerned persons, he would have taken signatures of those persons and in the cross examination PW.1 admitted that "he will not do any business without sign". In Ex.P.10, PW.1 adjusted the sum amount to chit group No.2BS/3, 13, 6BM/28-29 and those chits were not belonging to the accused or principal subscriber. As per the law, if the foremen intent to adjust the chit amount he has to take permission from principal subscriber of the concerned chit, but in this case, the complainant not taken any permission from anyone and PW.1 also admitted in his cross examination, he has not taken permission. Therefore, Ex.P.10 was created for convenient of PW.1 and same is not maintainable.
28. Further submits that the complainant stated in his complaint and sworn statement that the principle subscriber received a sum of Rs.43,39,000/-, but as per the voucher marked as Ex.P.11, the subscriber received a sum of Rs.38,13,750/- and same is admitted PW.1 is his cross examination. Further submits that PW.1 produced surety form as Ex.P.12. As per the alleged documents the accused is 3rd surety and the said document was not completely filled and in the said document columns filed in different pen as well as different hand writing and the accused name was inserted in different hand writing and pen. If the C.C.NO.39028/2022 21 accused was stood surety to the alleged chit group, her name would have been written in same pen and same handwriting. Even there is no amount mentioned in the said document. It is clearly shows that the documents was created one and the accused is not stood surety to chit group No.2BS/LT/18. Further in Ex.P.13 i.e., guarantee form. In the said document there is no name of the accused. If the accused stood surety of chit alleged in this case, her name should have been written in Ex.P.13 also in Ex.P.14, but she was not a surety to the any chit group, for which she was also adjusted in Ex.P.12. It is further submits that Ex.P.14 i.e., on demand promissory note dated: 26.09.2017 and in the said document there is no amount filled by the complainant and even the accused also not execute the document and there is no name or address written in the said documents and moreover Ex.P.14 does not belong to the chit group No.2BS/LT/18. The complainant has not stated in his complaint or sworn statement that the accused executed an on demand in his favour and in his cross examination he stated that at the time of bidding, he obtained the On demand from the principal subscriber. It is shows that PW.1 created the on demand promissory note as his will and wish. Further in Ex.P.15 also not belong to chit group No.2BS/LT/18 and in the said document the chit group number mentioned 2BS/St/17 and both are different chit group.
C.C.NO.39028/2022 22
29. Further submits that Ex.P.16 is belong to ledger belong to chit No.2BS/LT/18-13 and in the said ledger shows that some of the amount was misused by the complainant and also shows that those amount adjusted to other chit groups i.e., 6BM/ST/18-28 and 6BM/ST/18-29 and those chits are not belongs to the principal subscriber or the accused, but the complainant without prior permission of the principal subscriber and same is also admitted in his cross examination. Further the chit group No.6BM/ST/18-28 and 6BM/ST/18-29 are unknown chit groups and not related to the accused or principal subscriber. PW.1 in his cross examination stated that he paid Rs.17,00,500/- by way of cash to the accused and Rs.21,00,000/- paid to subscriber through NEFT and RTGS and remaining Rs.5,00,000/- adjusted other chits, but the complainant never said same in the chief examination or complaint or legal notice and same is developed by PW.1 at the time of cross examination. Even as per the Ex.P.10 most of the amount transferred as NEFT and RTGS, there is no cash shows in the Ex.P.10 and in Ex.P.17 also there is no such amount transferred in cash and both are crated for the purpose of filing this case. Further in the cross examination of PW.1 he admitted that he will produce the documents as stated in para No.16 of the written argument. But the complainant failed to produce the said documents as C.C.NO.39028/2022 23 per his admission and the complainant failed prove his case without producing the said documents.
30. It is further submits that the complainant failed to prove that he paid an amount of Rs.43,39,900/- to principal subscriber and also failed to prove that he paid sum of Rs.17,00,500/- to the accused. Even the complainant not produced any bank statement to show the passing of consideration of Rs.43,39,900/- to principal subscriber or the accused. There is no documents to shows that the complainant paid an amount of Rs.17,00,500/- to the accused as stated in his cross examination. Further the exhibits produced by PW.1 to do not establish either the chit amount or issuance of cheque in question towards the legally recoverable debts. The legal notice also not served to the accused, even she is residing in her permanent address. Thereby the complainant has failed to comply the mandates of Section 138 of N.I.Act and therefore the presumption cannot be drawn in favour of the complainant under section 118 and 139 of N.I.Act. Further submits that one Umashankar.H.K proprietor of BPR Soft Systems is principal subscriber in the present case and Krishna Hiruyur and Nagashree (Accused) proprietors of S.J.Constructions are joint principal subscribers of another chit. The complainant misused the documents belongs to the S.J.Constructions chit and filed this false case against the accused, without C.C.NO.39028/2022 24 taking any action against the principal subscriber as well as surety No.1 and 2. Further the complainant company already recover the amount from the principal subscriber and from original sureties in the year 2021 and after that the complainant based on documents left over with him he filed this false case against the accused by inserting her as surety No.3 to get the wrongful gain and there is no legally recoverable debts/ loans on the accused. The documents produced by PW.1 are clearly shows those are all created for the purpose of filing this case. From 2019 the complainant company was not in existence and in the year 2019 the complainant run away by taking the chits amount and after that subscribers filed criminal case against him and to escape from legal liabilities he filing false case. Ongoing to entire oral and documentary evidence of the complainant, do not establish that he paid an amount of Rs.43,39,900/- and existence of legally recoverable debts of Rs.45,00,000/- and issuance of cheque in question towards the legally recoverable debts. Hence, he prays to acquit the accused by dismissing the complaint with heavy costs and grant such other reliefs.
31. In the case on hand the complainant and the accused having some transactions has not been seriously disputed by the accused. Further the accused has not seriously disputed she had issued the cheque C.C.NO.39028/2022 25 in question in favour of the complainant. Further the accused has not disputed that she is the guarantor to the chit subscriber i.e., Mr.Umashankar. It is not disputed that the complainant is a Private Limited chit company and the accused is a Software engineer and one of the surety to the subscriber and she had issued the cheque. Whereas, the accused has contended that she had given the signed chaque to the complainant for the purpose of security in her chit i.e., S.J.Construction chit. When she had given the cheque, which was blank. The accused has specifically denied having debt/liability had issued the cheque-Ex.P.1 on 16.05.2022 towards the discharge of any debt/liability. She contends that the blank cheque and documents given by her to the complainant for the purpose of security as was misused by the complainant and the false complaint was filed.
32. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Managing Director as PW.1 and 18 documents were marked at Ex.P.1 to 18. In chief examination, P.W.1 has repeated the averments made by the complainant in the complaint. In the present case, the accused has not C.C.NO.39028/2022 26 disputed Ex.P.1 being her cheque drawn on her account. The said presumption is available to the complainant.
33. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is a rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque-Ex.P.1 was issued. In order to prove her defence, the accused has failed to produce any documentary evidence before this court. PW.1 during his cross-examination has specifically denied the suggestions made to him that the cheque was issued in favour of the complainant for the purpose of security and same was blank at the time of issuing the same. Further denied the entire suggestions made by the counsel for the accused.
34. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further the accused has to produce some probable evidence, which creates doubt about the existence of legally C.C.NO.39028/2022 27 enforceable debt/liability. In the present case, as per the defence taken by the accused is that she had given the blank cheque and documents to the complainant for the purpose of security of her chit in S.J.Construction chit. Except, the said defence, she has not produced any materials to prove such defence. If she had given the blank cheque and the documents to the complainant, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque and the documents. On which date the accused came to knew about the alleged illegal act of the complainant, she did not whisper about on what date she came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why she has given the blank signed cheque and documents to the complainant without anticipating the consequence is not explained by her. So also, she has not stated anything as to what steps she took to receive back the blank signed cheque and documents after repayment of the entire amount of her chit. Moreover, immediately after the alleged blank cheque misused by the complainant she has not lodge complaint before concerned police station. No steps have been taken to receive back the blank cheque, after she came to know about the same.
C.C.NO.39028/2022 28
35. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan (2010 AIR SCW 296), the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act, are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
36. Further the accused has taken the contention that the cheque was given as security. The complainant have misused the alleged security cheque and filed the false case. Hence, an offence punishable under section 138 of N.I.Act is not attracted. In this regard once issuance of cheque and signature are admitted, the C.C.NO.39028/2022 29 statutory presumptions would arise under sections 138 of N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt/liability.
37. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that C.C.NO.39028/2022 30 the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
38. In the case of Kalamani Tex and another V/s P.Balasubramanian, reported in (2021) 5 SCC 283, the Hon'ble Supreme Court has observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
39. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish her defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
40. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced C.C.NO.39028/2022 31 cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reason stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard.
41. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of alleged cheque and filing a false case is not possible. The accused admittedly having knowledge of business. It is implies, she is conversant with financial transaction. If the complainant misused the said cheque and had not return the same, inspite of collecting cheque leaves and documents from her, as a prudent man, the accused should have inquired with the complainant and demanded to return that cheque and documents. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because she did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.1-cheque. Further she could have issued a notice to her banker to stop payment or legal notice to the complainant or she could have given complaint to the police station immediately. No such steps were taken C.C.NO.39028/2022 32 by the accused. She simply makes a bald allegation of misuse of security cheque against the complainant. It appears, just to escape from her legal liability, she has taken such contentions without any valid basis.
42. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.1 being her cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and also cheque return memo-Ex.P.2 it is established that the cheque was dishonored for the reasons "Refer to drawer''. A legal notice being issued as per Ex.P.3 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice send by the complainant on her addresses. But, the accused failed to reply to the notice, immediately after she received the demand notice. Thereby, she could have asserted her defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at her addresses.
C.C.NO.39028/2022 33 When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
43. It is not the contention of the accused that thereafter she has paid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period and failed to give any reply to the notice, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even she did not whisper anything about the defence while her plea was recorded under section 251 of Cr.P.C. In view of judgment of the Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether she has any defence to make or she pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against C.C.NO.39028/2022 34 her. If she is not willing to plead guilty, she must explain what are the defences she want to take. As such it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on her.
44. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on her behalf.
45. The accused has taken the defence that except signature other writings on the cheque-Ex.P.1 is not in the handwriting of the accused, which were filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits her signature, she cannot take up a defence that other contents of cheque were C.C.NO.39028/2022 35 filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC) 138), between Bir Singh V/s Mukesh Kumar, the Hon'ble Apex Court held as under:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer, if cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. Even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment. Would attract presumption Under section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
C.C.NO.39028/2022 36
46. The principles emerging from the above referred decision make it clear that it is not mandatory and no law prescribes that the contents of cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I.Act arises. The principle of law laid- down in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, the cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
47. As per the version of the accused is that she has nowhere denied transaction. The accused herself has admitted that she is the holder of alleged cheque. It is sufficient hold that the accused has issued the cheque-Ex.P.1 and even after the accused has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for her to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused has issued the cheque in order to repay the C.C.NO.39028/2022 37 legally recoverable amount. Therefore, the accused has failed to probables the defence taken by her. Therefore, the accused have failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
48. PW.1 in his evidence has specifically stated that the accused is a guarantor to the Mr.Umashankar. The said Mr.Umashankar is a defaulter. The accused in order to repayment of due she had issued the cheque. So also it is not in disputed that the complainant and the accused are known to each other, some point of period. The accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused has failed to probables her defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
49.POINT NO.3 AND 4: In order to avoid repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the C.C.NO.39028/2022 38 requirements of section 138 of N.I.Act. Ex.P.1 being her cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the Bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter she had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused has issued the blank cheque in favour of the complainant for the purpose of security of her chit and why she has not produced any documents. After service of notice the accused neither reply to the notice nor paid the said amount. Hence, the present complaint came to be filed before the court on 30.08.2022 within the period of one month from the date of cause of action. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
C.C.NO.39028/2022 39
50. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove her rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for an offence punishable under section 138 of N.I.Act. The bail bond executed by the accused hereby stands canceled. The accused is sentence to pay fine of Rs.45,05,000/- (Rupees forty five lakhs five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.44,90,000/- (Rupees forty four lakhs ninety thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of C.C.NO.39028/2022 40 Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six month.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 13th day of September-2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.09.18 13:31:21 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.B.Y.Thimmegowda.
List of documents marked on behalf of the complainant:
Ex.P.1 : Cheque. Ex.P.1(a) : Signature of the accused. Ex.P.2 : Bank endorsement. Ex.P.3 : Office copy of legal notice. Ex.P.4 : Postal receipts. Ex.P.5 & 6 : Returned postal covers.
Ex.P.5(a) & 6(a) : Returned legal notices.
Ex.P.7 : Enrollment application.
Ex.P.8 : Chit agreement.
Ex.P.9 : Confirmation letter.
Ex.P.10 : Cash receipt.
Ex.P.11 : Voucher
Ex.P.12 : Surety proposal form.
Ex.P.13 : Guarantee.
Ex.P.14 : Ondemand
C.C.NO.39028/2022
41
Ex.P.15 : Agreement creating lien in favour of foreman.
Ex.P.16 : Party ledger.
Ex.P.17 : Board resolution.
Ex.P.18 : Complaint.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
Ex.D.1 to 3 : Sworn statements.
Ex.D.4 to 6 : Certified copies of cheques.
Digitally
signed by
SOUBHAGYA
SOUBHAGYA B BHUSHER
B BHUSHER Date:
2024.09.18
13:31:28
+0530
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
C.C.NO.39028/2022
42
13.09.2024 (Judgment pronounced in the Open Court Vide
Separate Sheet)
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.45,05,000/- (Rupees forty five lakhs five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.44,90,000/- (Rupees forty four lakhs ninety thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.15,000/- (Rupees fifteen thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six month.
XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.