Bangalore District Court
Mr Vinod Kumar Rai M vs Mrs Preetham Bhandary on 8 January, 2025
KABC030270112021
IN THE COURT OF THE XIII ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
:: PRESENT ::
SMT. PAVITHRA. R, B.A.L, L.L.B.,
XIII ACJM, Bengaluru City.
C.C.NO.9924/2021
Dated this the 8th day of January 2025
COMPLAINANT: Mr. Vinod Kumar Rai. M,
S/o Late Vishwanatha Rai,
Aged about 47 years,
R/a. No.Co633, Brigade Meadows,
Saaluhunase,
Kanakapura Main Road,
Udayapura Post,
Bengaluru - 560 082
[By Sri. Govindaraj K. Joisa, Advocate]
V/S
ACCUSED: Mr. Preetham Bhandary,
S/o H.M.Bhandary,
Aged about 44 years,
"Lalithadeep",
Chilmetharu Post,
Kaikara Post,
Puttur Tq. D K - 574210
(By Sri. M.J. Alva, Advocate)
-2- C.C.No. 9924/2021
Offence complained of : U/s. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final order : Accused is acquitted
Date of order : 08.01.2025
JUDGMENT
This is a private complaint filed by the complainant under Sec.200 of Cr.P.C., against the accused for the offence punishable under Sec.138 of Negotiable Instrument Act, 1881 (in short referred to as N.I Act).
The brief facts of the case are as under :
2. It is the case of the complainant that, father of the accused and complainant hails from same region in Puttur, Mangalore and they are neighbors and also accused is a far relative of the complainant. During the month of September 2014 accused approached the complainant with a request to lend a sum of Rs.12,00,000/- to him as he require the same to make a short film. Considering the long time relationship with the accused and also for the reason
-3- C.C.No. 9924/2021 that his father helped the complainant earlier, the complainant paid a sum of Rs.12,00,000/- to the accused and the accused promised to repay the same within a year together with interest. After expiry of one year the complainant approached the accused and requested to repay the amount, but accused informed that he will repay the amount and sought some more time which was agreed by the complainant. Thereafter the complainant approached the accused to repay the amount on several time, the accused informed that he will pay the amount in part and the same was agreed by the complainant. The accused paid meager amount by depositing in the complainant's account and failed to clear the outstanding amount inspite of several request and reminder. In the month of October towards repayment of above outstanding dues the accused issued a post dated cheque bearing No.562164 dated 30.12.2020 drawn on Vijaya Bank, (Now Bank of Baroda) Puttur Branch for a sum of Rs.10,50,000/-. The said cheque was presented to the complainant Banker for realization, but the same was
-4- C.C.No. 9924/2021 dishonored and returned with shara "Funds Insufficient".
Inspite of issuance of legal notice dated 18.01.2021 the accused replied with vague answers inspite of paying the cheque amount. Hence, accused has committed the offence punishable u/s. 138 of Negotiable Instrument Act. Hence, this complaint.
3. On filing of this complaint, this court recorded the sworn statement of the complainant and took cognizance of the offence and issued summons to the accused. Accused appeared before the Court through his counsel and was enlarged on bail and substance of accusation was read over to him and he pleaded not guilty having defense to make. Hence, the matter was posted for recording of statement U/Sec.313 of Cr.P.C. Since there was incriminating evidence against the accused, the statement as required under Sec.313 of Cr.P.C was recorded and the matter was posted for defense evidence. PW1 was fully cross-examined by the accused. Accused submitted
-5- C.C.No. 9924/2021 that he has no defense evidence. During the course of cross-examination of PW1, accused got marked Ex.D.1.
4. Heard both the sides. Perused the averments made in complaint, oral and documentary evidence of the complainant and after hearing arguments, the points that arises for determination are:-
1) Whether the complainant has proved that he lent a hand loan of Rs.12,00,000/- by way of cash to the accused, and the accused paid part of the amount by depositing to the complainant's account. To discharge the said remaining liability Ex.P.1 cheque was issued by the accused in favour of the complainant for sum of Rs. 10,50,000/- and the same was dishonored. Even after issuance of notice, the accused has failed to pay the cheque amount and thereby he is guilty of the offence punishable under Sec.138 of N.I. Act?
2) What order?
5. Findings to the above points are as under:-
Point No.1 : In the negative Point No.2: As per final order for the following:
-6- C.C.No. 9924/2021
REASONS
6. Point No.1:- According to the complaint
averments of the complainant, the complainant and accused are neighbors and accused is far relative of the complainant. Accused approached the complainant for financial assistance of Rs.12,00,000/- to make a short film and complainant lent the same since the accused promised him to return the said amount within a year. Later the accused made part payment by depositing meager amount to the complainant's account and thereafter has issued post dated cheque for discharging his liability, but the said cheque was dishonored and the accused did not repay the amount even after issuance of legal notice.
7. In order to prove the complainant's case he got examined as PW1 by filing an affidavit and got marked 8 documents at the time of his chief examination as follows...
(i) Ex.P.1 is the cheque of Vijaya Bank bearing No.562164 dated 30.12.2020 for sum of Rs.10,50,000/- alleged to have been issued by the
-7- C.C.No. 9924/2021 accused. Signature of the accused is marked through complainant as Ex.P1(a).
(ii) Ex.P2 is the Bank Endorsement dated 30.102.2020 issued by Bank of Baroda, MSRS Nagar Branch stating that 'Insufficient Funds'.
(iii) Ex.P3 is the legal notice dated 08.01.2021 issued by the complainant through his advocate to the accused demanding the payment of cheque amount.
(iv) Ex.P.4 and 5 are the postal receipts.
(v) Ex.P.6 is the track consignment report
(vi) Ex.P.7 is the unserved postal cover
(vii) Ex.P.8 is the reply notice dated 28.01.2021.
8. In the chief-examination of P.W.1, he has reiterated entire averments of the complaint and supported his version. The accused admits that the Ex.P1 cheque belongs to him and Ex.P1(a) is his signature. From the overall evaluation of oral and documentary evidence of the complainant it is not in dispute that the Ex.P1 cheque belongs to the accused and it bears his signature and the same was issued to the complainant whatever the reason it
-8- C.C.No. 9924/2021 might be. Hence, these points are sufficient to raise presumption available under Sec.118 and 139 of N.I. Act.
9. Since the cheque belongs to the accused's account and bears his signature, the complainant is benefited to raise presumption under Sec.118 and 139 of N.I. Act. Thus until and unless the contrary is proved it is presumed that the cheque-Ex.P.1 is issued for the purpose of legal liability.
10. Now the burden shifts on the accused to rebut the presumption under Sec.118 and 139 of N.I Act from the defence points either by giving a standard proof or by establishing the same under the principles of preponderance of probabilities.
11. The accused has not lead defence evidence. During the cross examination of PW.1 and in the chief examination of DW.1 the accused has taken following defence:
-9- C.C.No. 9924/2021
(i) that the accused had issued stop payment instructions to his Banker on 22.08.2019 to dishonour Ex.P1 and 7 other cheques, and hence there is no question of he issuing Ex.P1 cheque dated 30.12.2020 in the month of December 2020.
(ii) that the signed blank cheque Ex.P1 and few other cheques were handed over to the complainant in the year 2015 when himself and complainant were in cordial relationship and close association, and doing business jointly, out these cheques Ex.P1 is misused by the complainant,
(iii) that the complainant had no financial capacity to lend huge amount of Rs. 12,00,000/- to the accused as alleged in the complainant and the accused. Further that the accused herein has never deposited Rs. 45,000/- and Rs. 20,000/- to the complainant's account towards part payment of loan amount,
iv) that the claim of the complainant is barred by limitation since the alleged loan is in the month of
- 10 - C.C.No. 9924/2021 September 2014 and the issuance of the cheque is in the month of December 2020.
Rebuttal evidence by the accused:
12. Above mentioned are the specific defences taken by the accused in this case. Let us analyze whether the accused has substantiated his defense points. The accused has not stepped into witness box to give his evidence. It is a settled position of law that the accused need not step into witness box to rebut the presumption but may also elicit answers in cross examination of PW.1 and rebut the presumption available to the complainant. Counsel for the accused has relied on a decision reported in (2010) 11 Supreme Court Cases 441, Rangappa Vs. Sri. Mohan. The observation and ratio laid down therein is applicable to the present case on the point that "standard of proof for rebutting evidence and manner in which defence can be raised by the accused even relying on the prosecution materials to prove his defence is permissible". Firstly: the
- 11 - C.C.No. 9924/2021 accused has taken a defence that he had issued stop payment instructions to his Banker to stop payment in respect of Ex.P1 since he had an apprehension of misuse of cheque by the complainant.
13. In order to substantiate this defence point, the accused through his counsel cross examined the PW.1 effectively by eliciting points supporting his defence. At the time of cross examination, the accused produced Ex.D1 which was marked on confrontation to the PW.1 after the said document was admitted by the complainant. Ex.D1 is a reply letter issued by the Bank of Baroda dated 18.12.2023 to the accused's representation sent through email dated 27.11.2020 attached with a letter dated 22.08.2019 with a stop payment instruction for accused's cheques No. 562158, 562159, 562163, 562164 (Ex.P1), 562169, 562170, 562171 and 562172. The letter also indicates that four of the above cheques have been dishonoured for the reason stop payment and remaining four cheques have been
- 12 - C.C.No. 9924/2021 dishonored for a reason non availability of fund in accused's account on 03.12.2020.
14. It is relevant to note that though the Ex.P2 is issued by Bank of Baroda, MSNS Nagar Branch and Ex.D1 is issued by Bank of Baroda, Darbe Puttur Branch, the Bank is same. Such being the case recital made in Ex.D1 as to dishonour of cheque for funds insufficient on 03.12.2020 is contrary to the Ex.P2 which says Ex.P1 is dishonoured on 30.12.2020. It is true that the Ex.D1 is the document of the accused and he has to prove the said document. But the complainant has admitted to the said document in his cross examination. Since the complainant has admitted the Ex.D1 at the time of cross examination even generally, the onus shifts on the complainant to prove the Ex.P2 as against the Ex.D1. This variance in the documents issued by the Bank of Baroda and non examination of the Banker who issued Ex.P2 and Ex.D1 by the complainant raises presumption as to the fact that the accused had made an attempt to issue
- 13 - C.C.No. 9924/2021 stop payment instructions to his Banker for not to honour the Ex.P1 cheque much before the date the cheque was presented to the Bank.
15. Secondly: the accused has taken a defence that his signed blank cheque Ex.P1 and few other cheques were handed over to the complainant in the year 2015 when himself and complainant were in cordial relationship and doing business jointly, out of these cheques Ex.P1 is misused by the complainant. In order to support his defence he has relied upon Ex.P8 which is a reply notice sent by the accused to the statutory notice issued by the complainant as per Ex.P3. I have gone through the entire averments of the Ex.P8. Accused in his reply notice has pointed out several loop holes of the complainant who has failed to mention date of loan, purpose of loan, date of issuance of cheque and mode of loan. It also highlights the initial defence of the accused who has stated that the "accused and complainant had cordial and close relationship as they
- 14 - C.C.No. 9924/2021 hail from same region and community" which is also admitted by the complainant in his complaint who has proceeded to state that the accused had very close acquaintance with the complainant who is a far relative to the complainant and accused's father had helped the complainant earlier. This suffice to show that the there existed a close relationship between the accused and the complainant. Looking into the contents of Ex.P3 which lacks the ingredients required for the issuance of statutory notice under section 138 of N.I Act i.e date of loan, quantum of loan, tenure fixed for repayment of loan, date of issuance of cheque and mode of payment of loan brings doubt as to the existence of legally recoverable debt. It also gives way to believe the defence of the accused placing his cheque to the complainant's possession in the year 2015 to be probable one.
16. That apart, it is relevant to mention a fact that the Ex.P1 is a cheque issued to the accused by the "Vijaya Bank", the said Bank got merged with the "Bank of Baroda"
- 15 - C.C.No. 9924/2021 in the year 2018 and the fact is admitted by the complainant. The complainant has not given satisfactory answer to believe that what was the impediment for him to accept Vijaya bank cheque in the month of December 2020 when the said cheque was not in action at the time of issuance by the accused in his favour. Also, it is hard to believe for the prudent man as to how it is possible for a person to issue cheque of the Bank which is not in action and another person to accept the same. This area is elicited by the accused in the cross examination of PW.1 which actually raises a presumption to believe the defence of the accused to be probable one.
17. Thirdly: the accused has taken a defence that the complainant had no financial capacity to lend huge amount of Rs. 12,00,000/- to the accused. In support of his defence during arguments has relied on decision reported in (2023) 1 SCC 578 Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel and another and 2024 (1) Kar. L.R.
- 16 - C.C.No. 9924/2021 168 S.P.Rajkumar Vs. M.J.Prabhakar and (2023) 10 SCC 148, Rajesh Jain V/s Ajay Singh which has discussion regarding financial capacity of the complainant and his failure to prove the same. Observations made therein is applicable to the case on hand. The complainant in order to prove his financial capacity has not produced any documentary evidence. There is no single piece of document to show that the complainant possessed Rs.12,00,000/- by way of cash as on date of advancement of alleged loan. That apart, the complainant who claims receipt of part payment of Rs.45,000/- and Rs.20,000/- deposited by the accused, has not produced his bank statements or any related document to believe his version. This non action by the complainant in producing above documents raises a presumption to be probable one questioning the financial capacity of the complainant and also existence of legally recoverable debt.
18. Fourthly: the accused has taken a defence that that the claim of the complainant is barred by limitation
- 17 - C.C.No. 9924/2021 since the alleged loan is in the month of September 2014 and the issuance of the cheque is in the month of December 2020. There is a clear admission by the complainant in his cross examination to the effect that alleged loan was in the year September 2014 and there was one year tenure fixed for repayment of the said loan, that would be August 2015. He further states that the cheque was issued in the month of December 2020 which was five years later from the date of cause of action arouse for recovery of the above said loan. From the date of cause of action i.e august 2015 three years period would be July 2018 for recovery of loan amount. So, the Ex.P1 which was issued in the month of December 2020 appears to be for a time barred time which is not legally recoverable debt in the eye of law since the issuance of cheque is disputed by the accused who has defended the issuance of cheque to be in the year 2015 and not in the year 2020. Thus above defence of the accused is substantiated successfully and the same stands probable one.
- 18 - C.C.No. 9924/2021
19. In this background if the defences of the accused is looked into, then a doubt arises as to when Ex.P1 cheque was issued, is it towards legal liability as averred in the complaint or is it towards the purpose stated by the accused in his defence. This suspicion gives way to believe the contention of the accused who has taken above defences. Upon consideration of the defense points the accused was able to raise probable defences in this case. Hence now, the existence of legally recoverable debt is in question. Thus, it arises doubt about the existence of legally recoverable debt. At this stage it is relevant to refer to decision: Basalingappa Vs. Mudibasappa reported in (2019) 5 SCC 418 regarding "standard of proof to be given by the accused". The said decision is is aptly applicable to the case on hand for the reason that the accused by cross examining the PW.1 effectively elicited facts mentioned supra which has established his defence points and created doubt on the case of the complainant. So, that's a degree of proof which is akin to preponderance of probability which shall be
- 19 - C.C.No. 9924/2021 produced by the accused in a case under section 138 of N.I Act.
ONUS ON THE COMPLAINANT
20. Since the accused has established his defences on the principles of preponderance of probability, now the onus shifts on the complainant to prove his case beyond reasonable doubt. In order to prove the complainant's case beyond reasonable doubt the complainant except producing Ex.P1 to 8 documents in his favour has not produced any documents to show that (i) he possessed Rs. 12,00,000/- by way of cash at the time of advancement of alleged loan, (ii) he actually lent a sum of Rs. 12,00,000/- by way of cash to the accused on the date of alleged loan (iii) more fully specific date of loan (iv) supportive piece of document for having lending huge amount of Rs. 12,00,000/- by way of cash and (v) with regard to repayment of part loan amount by the accused to the complainant. Thus to sum up, the complainant has not produced cogent oral and documentary evidence to show that their exists legally recoverable debt of
- 20 - C.C.No. 9924/2021 Rs.12,00,000/- due by the accused. Thus an inference can be drawn to the effect that the alleged cheque was issued by the accused in favour of the complainant for the purpose mentioned in his defence and not for the purpose mentioned in the complainant.
21. In order to constitute an offence under section 138 of N.I Act, there should be an existence of legally recoverable debt or legal liability, but in this case any of the ingredients is not in existence as the complainant has failed to prove the same beyond reasonable doubt who has utterly failed to prove his financial capacity and existence of legally recoverable debt. The complainant has failed to prove the case as required under section 138 of N.I Act for the reasons discussed supra. All these circumstantial evidence gives way to doubt the case of the complainant within the ambit of section 138 of N.I Act. The complainant has failed to prove his case beyond reasonable doubt and the guilt of the accused by answering the rebuttal evidence of the accused.
- 21 - C.C.No. 9924/2021 Thus for all these reasons this court finds that the accused has successfully rebutted the presumption available at the hands of the complainant and the complainant has completely failed to prove his case beyond reasonable doubt. Therefore, in the light of above discussion, the Court answer point No.1 in the Negative.
22. Point No.2:- In view of the reasons stated and discussed above the court proceeds to pass the following:-
ORDER Acting under Sec.255(1) of Cr.P.C accused is hereby acquitted of the offence punishable U/Sec.138 of N.I. Act.
The bail bond of the accused stands canceled.
(Dictated to the Stenographer directly on computer, revised, corrected, signed and then pronounced in the open court on this the 8 th day of January, 2025) (PAVITHRA R.) XIII ACJM, BENGALURU CITY
- 22 - C.C.No. 9924/2021 ANNEXURE LIST OF WITNESSES EXAMINED FOR COMPLAINANT:
PW.1 Sri. Vinod Kumar Rai. M. LIST OF WITNESSES EXAMINED FOR ACCUSED:
- NIL -
LIST OF DOCUMENTS MARKED FOR COMPLAINANT:
Ex.P1 : Original Cheque
Ex.P.1(a) : Signature of the accused
Ex.P.2 : Bank endorsement
Ex.P.3 : Copy of Legal Notice
Ex.P.4 & 5 : Postal receipts
Ex.P.6 : Track consignment report
Ex.P.7 : Unserved postal cover
Ex.P.8 : Reply notice
LIST OF DOCUMENTS MARKED FOR ACCUSED:
Ex.D.1 : Letter dated 18.12.2023 issued by Bank of
Baroda to the accused
XIII ACJM, BENGALURU CITY.