Bangalore District Court
Mr.Shivakumar.B.R vs Mrs.Chaitra.M on 8 September, 2020
IN THE COURT OF XX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY
Dated this the 8th day of September 2020
PRESENT: KALPANA.M.S.,
B.Sc., LL.M.,
XX ADDL. C.M.M.
Bengaluru.
C.C.No.11547/2018
Complainant : Mr.Shivakumar.B.R.
S/o Radha Krishna.M.K.
Aged about 33 years,
R/at #1/114,
Door No.301, Siri Emerald,
2nd Cross, 4th Main,
Canara Bank Colony,
Uttarahalli Main Road,
Chikkalasandra,
Bengaluru - 560 061.
Vs.
Accused : Mrs.Chaitra.M,
W/o B.V.Munesh,
Proprietor of ZEN AUTO MATS,
Office /at # 105,
6th "A" Main,
Mahalakshmipura Post,
J.C.Nagar, Kurabarahalli,
Bengaluru - 560 086.
2 C.C.11547/2018
And also;
Residing at # 01,
15th Main Road, 6th Cross,
Mahalakshmipura Post,
J.C.Nagar, Kukrubarahalli,
Bengaluru - 560 086.
Offence complied of : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of Order : 08-09-2020
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused alleging that, she has committed the offence.
3 C.C.11547/2018
02. The sum and substance of the complaint, is as follows;
The accused is the friend of complainant and well known to each other. In the month of 25th September 2017, the accused had obtained hand loan of Rs.3,00,000/- by way of NEFT, cheque and cash from the complainant for business, legal necessities and agreed to repay the same within a short period. On the same day, the accused had executed demand promissory note/consideration receipt. Accused has not returned the money as agreed upon and has given one or the other reason to postpone for repayment of amount. After consistent demands, towards discharge of her liability, accused has issued following two cheques;
1. Cheque bearing No.456294 dated 05.04.2018 for Rs.2,00,000/- .
2. Cheque bearing No.456293 dated 05.04.2018 for Rs.1,00,000/-.
Both the cheques were drawn on Canara Bank, Kurubarahalli, (J.C.Nagar), Bengaluru-560 086. Complainant 4 C.C.11547/2018 presented the said cheques for encashment through his banker i.e., State Bank of India, Sudhamnagar Branch, Bengaluru - 560 027 and the said cheques returned with an endorsements "Funds Insufficient", dated 06.04.2018. Thereafter, complainant got issued legal notice on 12.04.2018 to accused. The notice was duly served to the accused on 19.04.2018. Accused neither complied nor replied the notice. It is contended that, accused intentionally not maintained sufficient amount in her bank account to honour the cheques issued in favour of the complainant towards discharge of legally enforceable debt. On these allegations, present complaint is filed.
03. After filing of complaint, this court perused the documents and taken cognizance for the offence under section 138 of Negotiable Instrument Act, sworn statement of complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons 5 C.C.11547/2018 was issued. After appearance, accused enlarged on bail and plea was recorded as per section 251 of Cr.P.C. Accused has not stated the defence.
04. Learned Counsel for complainant prays to treat sworn statement as examination-in-chief and to consider the documents marked as Ex.P.1 to 11. The statement under section 313 of code of criminal procedure is recorded, read over and explained to the accused. The defence of the accused is total denial. The accused has not adduce defence evidence.
05. Complainant relied on the following citation.
Crl.A.(MD).No. 179 of 2008, A.K.Mohammed Farook Vs. M.Syed Jaheer Hussain.
06. Heard the Learned Counsel for complainant. Perused the citation and materials on record. No arguments addressed on behalf of accused.
6 C.C.11547/2018
07. The points that arise for my consideration are as follows;
POINTS
1. Whether the complainant proves that, accused has issued following two cheques;
1. Cheque bearing No.456294 dated 05.04.2018 for Rs.2,00,000/- &
2. Cheque bearing No.456293 dated 05.04.2018 for Rs.1,00,000/-, towards discharge of her liability, which were returned unpaid on presentation and also not complied the notice issued by the complainant and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
08. My answer to the above points is as follows;
1. Point No.1: In the Affirmative
2. Point No.2: As per final order for the following;
7 C.C.11547/2018REASONS
09. POINT No.1: Complainant has filed this complaint alleging that accused has committed offence under section 138 of N.I. Act. She pleads and asserts that, towards discharge of her liability, accused has issued following two cheques;
1. Cheque bearing No.456294 dated 05.04.2018 for Rs.2,00,000/- &
2. Cheque bearing No.456293 dated 05.04.2018 for Rs.1,00,000/-.
The said cheques came to be dishonoured on presentation. Complainant has issued notice within time stipulated calling upon the accused to pay the amount covered under cheque. Inspite of service of notice, accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint. He further relied on the 8 C.C.11547/2018 documents from Ex.P.1 to 11. This witness was subjected to cross examination.
10. In this scenario, let us scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 & 2 are cheques dated 05.04.2018, the said cheques returned with an endorsements "Funds Insufficient". Ex.P. 3 & 4 are bank endorsements dated 06.04.2018, Ex.P.5 is legal notice dated 12.04.2018, which was duly served on the accused on 19.04.2018, Ex.P.6 & 7 are the postal receipts, Ex.P. 8 is the postal track report, Ex.P.9 is the On Demand Promissory note, Ex.P.9(a) & (b) are the signatures of the accused, Ex.P.10 is the SBI bank statement , Ex.P.11 is the Income Tax acknowledgment and balance sheet. This complaint came to be filed on 10.05.2018. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act is 9 C.C.11547/2018 complied with and this complaint is filed within time. Thus, complainant relied on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act.
11. No doubt, this presumption is rebuttable in nature. Accused is required to place cogent evidence to rebut the presumptions. To discharge his burden, accused solely relied on the cross examination of the complainant, but not placed defence evidence. In the course of cross examination of complainant, the accused has taken contention that, cheque in question were issued for payment of tax pertaining to the business belongs to accused. On this contention, accused sought for dismissal of the complaint and consequent acquittal.
12. In the back drop of the rival contentions, this court has given anxious consideration to the case papers. At the outset, accused has not disputed the cheque in question and the 10 C.C.11547/2018 signatures present therein. When the drawer has admitted the issuance of the cheques as well as the signatures present therein, the presumptions envisaged under section 118 read with section 139 of NI Act, would operate in favour of the Complainant. The said provisions lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder court shall presume that the instrument was endorsed for consideration. So also, in the absence of contrary evidence on behalf of the accused, the presumption under section 118 of the NI Act, goes in favour of the complainant.
13. This proposition of law is laid down by the Hon'ble High Court of Karnataka in the decision reported in ILR 2006 KAR 4672 - J.Ramaraj V/s Iliyaz Khan, wherein it is held that;
"Mere denial of issuing cheque would not be sufficient as it is time and again noted that once the cheque is issued 11 C.C.11547/2018 duly signed by the petitioner, the presumption goes against him as per Sec.139 of the Negotiable Instruments Act."
No doubt, said statutory presumptions are rebuttable in nature. It is for the accused to place cogent and probable defence to rebut the presumptions raised in favour of the Complainant.
14. To discharge the burden of rebuttal, accused has put forth the defence of issuance of the cheque for payment of tax concerned to his business. The complainant out rightly denied the suggestion by re-asserting that, cheques were issued for repayment of the hand loan amount of Rs.3,00,000/-. Such being the case, the burden is on the accused to prove his defence, which is in his special knowledge. Section 106 of Indian Evidence Act, postulates that, the burden is on the person who asserts the fact in his specific knowledge. As stated earlier, accused has not taken 12 C.C.11547/2018 any steps to prove his defence either through eliciting material admissions in the course of cross examination or by adducing defence evidence. On the other hand, to fortify his claim, complainant relied on the supportive document as per Ex.P.9-On Demand Promissory note dated 25.09.2017. It is worth to note that, accused has not denied the signatures present on an On Demand Promissory note by adducing defence evidence. Above all, complainant has produced his bank statement as per Ex.P.10, which reads that, in the month of September 2017, an amount of Rs.1,00,000 and Rs.90,000/- was transferred to the account of the accused, for which no suitable explanation is forth coming from the accused. Nothing material is placed by the accused to disbelieve the supportive documents put forth by the complainant.
15. Further, accused has not disputed the address mentioned in the legal notice. As such, in view of section 27 13 C.C.11547/2018 of General Clauses Act, the legal notice sent to the proper and correct address of the accused shall be taken as deemed service of notice. In this context, it is profitable to refer the decision reported in, 2002 Crl. LJ 1926 (Kar), Fakirappa Vs. Shiddalingappa, wherein it is held that;
" The only requirement for the service of demand notice is that, the notice should have been sent to the correct address of the drawer. Since the mode of service is not prescribed by the law, it can be sent either by registered post or under certificate of posting or otherwise. The expressions " Left, not known, ' not available in the house', 'house locked', 'shop closed' etc., are all synonyms. Therefore, if the address of the drawer is proved to be correct, even if the notice is returned with the above remarks, then the notice is deemed to have been served on the drawer."
In the present case, accused has not disputed his address mentioned in the legal notice. Hence, it can be taken that, there is deemed service of legal notice. 14 C.C.11547/2018
16. Further, it could be seen that, inspite of deemed service of legal notice, the accused has not taken steps to issue reply taking all these contentions. The act of the accused in not issuing reply at the earliest point of time immediately after service of the legal notice is one of the strong circumstances in favour of the complainant. This proposition of the law laid down in the following decisions.
17. In decision reported in, 2007 CRI.L.J. (NOC) 520 (KER), in a case of Sanjeev P.R. V/s. Thriveni Credit Corporation, Thodupuzha & Another, wherein it is held that;
"(B). Negotiable Instrument Act (26 of 1881), S.138- Dishonour of cheque- Conviction- Validity-
Signature in cheque is admitted -
Notice of demand though duly received and acknowledged , did not evoke any reply......- Concurrent finding that complainant has succeeded in proving all ingredients of the offence punishable under 15 C.C.11547/2018 section 138 - Conviction of accused proper."
Further, the decision reported in, 2006 CRI.L.J.1, in a case of Gorantala Venkateswara Rao. V/s. Kolla Veera Raghava Rao and another, it is held that;
"(B) Negotiable Instrument Act ( 26 of 1881), S.138 - Dishonour of cheque- Legally enforceable debt-
Failure of accused in giving reply to legal notice issued by complainant-
Is one of the strong circumstances to draw an inference that accused borrowed amount from complainant and cheque was issued towards part payment of legally enforceable debt."
From the ratio laid down in the aforesaid decisions it is clear that, non issuance of reply by the accused is fatal to his defence. As such, the defence taken by the accused is not acceptable.
16 C.C.11547/2018
18. From the overall consideration of the evidence on record it is forthcoming that, accused has not taken probable defence to rebut the statutory presumption. Mere denial is not sufficient to discharge the onus shifted on accused. To fortify this opinion, it is proper to refer the decision reported in, 2001 CRI.L.J. 4647, in a case of Hiten P.Dalal V/s. Bratindranath Banerjee, wherein it is held that;
"(B) Negotiable Instrument Act ( 26 of 1881), Ss.139, 138- Dishonour of cheque- Presumption that cheque was drawn for discharge of liability of drawer- Is presumption of law- Ought to be raised by Court in every case-
Rebuttal evidence- Nature- Mere plausible explanation is not sufficient-
Proof of explanation is necessary.
Evidence Act (1 of 1872), Ss .114, 101- 104."
Further in another decision reported in, 2017(2) A.K.R. 527, Arjun Vs.E.Shekar, it is held that, S. 138, 139- Presentation of lawful consideration- Rebuttal of - Burden of proving that cheque has not been issued for any debt or liability - is on 17 C.C.11547/2018 accused - mere plausible explanation not sufficient to disprove complainant' s case.
From the gist of the ratio laid down in the above decisions, it is clear that, burden shift on the accused to rebut the statutory presumption through cogent evidence, which is not discharged by the accused in the present case.
19. Under the facts and circumstances of this case, it is profitable to refer the decisions of the Hon'ble Supreme Court of India reported in, AIR 2018 SUPREME COURT 3601, in a case of, T.P.Murugan (Dead) Thr.Lrs. V. Bojan, wherein it is held that;
" Negotiable Instruments Act (26 of 1881), Ss.118,138,139- Dishonour of cheque- Presumption as to enforceable debt- cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back in 1995-
Behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, 18 C.C.11547/2018 unnatural- Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him- Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt- Conviction, proper".
20. In another decision reported in, AIR 2018 Supreme Court 3604, in a case of Krishna Rao Vs. Shankargouda, wherein it is held that;
"Negotiable Instruments Act (26 of 1881), Ss.138, 139-Dishonour of cheque- Presumption as to - Accused issuing cheque of Rs. 2 lacs towards repayment of loan to complainant - Said cheque dishonored on account of insufficiency funds- Complainant proving issuance of cheque having signatures of accused- Accused failing to rebut presumption raised against him and no evidence led by him in his support - Acquittal of accused by High Court in revisional jurisdiction on ground of doubt in mind of court with regard to existence of loan, improper- Accused, liable to be convicted".19 C.C.11547/2018
21. Moreover, in the latest judgment decided on 15th March 2019, the Hon'ble Supreme Court of India, AIR 2019 Supreme Court 1876; Rohitbhai Jivanlal Patel V/s State of Gujarat & Another, it is observed in para 12 that;
" 12. For determination of the point as to whether the High Court was justified in reversing the judgment and order of the Trial Court and convicting the appellant for the offence under section 138 of the NI Act, the basic questions to be addressed to are two - fold: as to whether the complainant - respondent No.2 had established the ingredients of Sections 118 and 139 of the NI Act, so as to justify drawing of the presumption envisaged therein; and if so, as to whether the accused -appellant had been able to displace such presumption and to establish a probable defence whereby, the onus would again shift to the complainant?........"
It is further observed in 18.6 that;
" 18.6. The fact of the matter remains that the appellant could not deny his signatures on the said writing but 20 C.C.11547/2018 attempted to suggest that his signatures were available on the blank stamp paper with Shri Jagdishbhai. This suggestion is too remote and too uncertain to be accepted. No cogent reason is available for the appellant signing a blank stamp paper. It is also indisputable that the cheques as mentioned therein with all the relevant particulars like cheque numbers, name of bank and account number are of the same cheques which form the subject matter of these complaint cases. The said document bears the date 21.03.2007 and he cheques were postdated, starting from 01.04.2008 and ending 01.12.2008. There appears absolutely no reason to discard this writing from consideration...."
It is further observed in para No.19 that;
" 19. Hereinabove, we have examined in detail the findings of the Trial Court and those of High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to 21 C.C.11547/2018 advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been or irrelevant factors of consideration of a probable defence of the appellant....."22 C.C.11547/2018
The ratio laid down in the cited decisions are aptly applicable to the case on hand.
22. The accused has taken a vague defence and not placed cogent evidence to prove the same. This aspect is discussed in detail in a decision reported in, 2014(4) AKR 98 between Sripad Vs.Ramadas M.Shet, Criminal Appeal No.2689 of 2009, wherein it is held that;
"Negotiable Instrument Act (26 of 1881), Ss.138,139, 118- Dishonour of cheque-Acquitted-Validity-Cheque issued by repay loan amount to complainant, was dishonoured-Specific defence -However, accused failed to rebut initial presumption under sections 118 and 119- Mere distorted version or mere taking up defence by It means that he is not liable to pay any amount- Are not sufficient to put back the burden on to the complainant-
Acquittal of accused- Not proper."
The ratio laid down in the cited decision is squarely applicable to the facts on hand.
23 C.C.11547/2018
23. That apart, as far as proof of existence of legally enforceable debt is concerned, it is profitable to refer the decision of larger bench of the Hon'ble Apex Court reported in, Rangappa Vs. Mohan reported in AIR 2010 SC 1898 = 2010 AIR (SCW) 2946, Wherein their lordships pleased to observe that;
"In the light of these extracts, we are in agreement with the respondent-
claimant that the presumption mandated by section 139 of the Act does indeed include the existence of the legally enforceable debt or liability".
In view of the law laid by three judges bench of Hon'ble Apex Court, the presumption enshrined under section 139 of the N.I. Act is extendable to the existence of legally enforceable debt. Accused has not placed cogent material to rebut the said presumption. As such, this contention of the accused holds no water.
24 C.C.11547/2018
24. In this case plea of the accused was recorded as per section 251 of Cr.P.C. Accused pleaded not guilty. As per section 251 of Cr.P.C. accused has to state about his defence. Here, except pleading not guilty accused has not stated his defence at the time of recording plea. As per the decision reported in AIR 2014 SC 2528 (Indian Bank Association V/s Union of India), Crl. Petition No.8943/2010 M/s.Mess Transgare Pvt V/s Dr .R. Parvathareddy and in Rajesh Agarwals case, Wherein, it is held that; " Accused cannot simply say " I am innocent " or " I pleaded not guilty ". The proposition of law laid down in the aforesaid decision is squarely applicable to the facts and circumstances of this case. As such, it cannot be taken that accused has rebutted the presumption of law enshrined under section 139 and 118 of N.I. Act, by mere pleading not guilty.
25. From the discussion made supra, it is clear that, accused has neither taken probable defence nor taken steps to 25 C.C.11547/2018 prove the same. To put it other way, accused has not taken and proved probable defence to rebut the presumption of law available in favour of the complainant, envisaged under section 118 read with section 139 of N.I. Act. Accordingly, the case of the complainant is believable. Complainant has proved that, accused has intentionally not maintained sufficient amount in his account to honour the disputed cheque. Hence, this point No.1 under consideration is answered in the affirmative.
26. POINT NO.2: In view of the reasons stated and discussed above, the complainant has proved the guilt of the accused punishable under section 138 of N.I. Act It is worth to note that, the offence is of the nature of civil wrong. Hence, it is proper to award sentence of fine, instead of awarding sentence of imprisonment. Hon'ble Supreme Court of India in a decision reported in, (2015) 17 SCC 368, in a case of H.Pukhraj Vs. D.Parasmal, observed that, having regard to 26 C.C.11547/2018 the length of trial and date of issuance of the cheque, it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Considering all these aspects, this court proceed to pass the following;
ORDER Acting under section 255 (2) of Criminal Procedure Code, accused is hereby convicted for the offence punishable under section 138 of Negotiable Instrument Act and sentenced to pay fine of Rs.3,85,000/- (Three Lakhs Eighty Five Thousand Rupees only). In default thereof accused shall undergo simple imprisonment for 3 (Three) months.
Acting under section 357(1) (b) of code of criminal procedure, it is ordered that, Rs.3,80,000/- (Three Lakhs Eighty Thousand Rupees only), there from shall be paid to the complainant as a compensation, remaining fine amount 27 C.C.11547/2018 of Rs.5,000/- ( Five Thousand Rupees only) is defrayed to the state for the expenses incurred in the prosecution.
The bail bond of the accused stands cancelled after expiry of six months.
Office to supply the copy of this Judgment to the accused immediately on free of cost.
{Dictated to the stenographer directly on computer, corrected and then signed by me and then pronounced in the open court on this 8th day of September 2020}.
(KALPANA M.S.), XX ACMM, Bengaluru.
ANNEXURE List of witnesses examined on behalf of Complainant:
P.W.1 Mr.Shivakumar.B.R. 28 C.C.11547/2018 List of documents produced on behalf of complainant:
Ex.P.1 & 2 Cheques
Ex.P. 1(a) & 2(a) Signatures of the accused
Ex.P. 3 & 4 Bank endorsements
Ex.P. 5 Copy of the legal notice
Ex.P. 6 & 7 Postal receipts
Ex.P. 8 Postal track report
Ex.P.9 On Demand Promissory note
Ex.P.9(a) & (b) Signatures of the accused
Ex.P.10 SBI bank statement
Ex.P.11 Income Tax acknowledgment
and balance sheet
List of witnesses examined on behalf of accused:
-Nil-
List of documents produced on behalf of accused:
-Nil-
XX A.C.M.M., Bengaluru.