Bangalore District Court
Reptd By Its Senior Assistant Manager vs Puttur Taluk on 20 January, 2023
1
IN THE COURT OF XIV ADDL. CHIEF
METROPOLITAN MAGISTRATE, MAYO HALL,
BENGALURU
PRESENT
SRI.OONKAR MURTHY K.M.,
B.Sc., L.L.M.,
XIV Addl. C.M.M., Bengaluru
DATED ON THIS 20 th DAY OF JANUARY 2023
CASE NO C.C. NO.51891/2019
M/s. The India Cements Limited,
Regd. Office at 827, Dhun Building,
Anna Salai, Chennai - 600 005.
Regional Marketing Office at
Nos.106 & 107, Midford House,
No.1, Midford Gardens,
M.G. Road, Bengaluru - 560 001.
COMPLAINANT
Reptd by its Senior Assistant Manager -
Accounts and Power of Attorney Holder
Mr. Shridhar S. Salunke
S/o. Shabaji, Aged about 44 years.
Mob. No.70220 37669
E-mail:[email protected]
(By Sri. S. Shiva Prasad - Adv.,)
2
Mr. M.D. Madhu - Proprietor
M/s. Babloo Enterprises,
Nagara Panchayath Building,
No.IV, Junior College Road,
Near Market, Ward No.3,
Sullia - 574 239,
ACCUSED Puttur Taluk, D.K.
Also at;
Bypass Road, Puttur - 574 201,
Dakshina Kannada.
(By Sri.P. Karunakara - Adv.,)
OFFENCE U/s.138 of Negotiable Instruments Act
PLEA OF THE
ACCUSED Pleaded not guilty
FINAL ORDER Accused is convicted
Digitally signed by
ONKARMURTHY K
ONKARMURTHY M
KM Date: 2023.01.20
14:59:42 +0530
(OONKAR MURTHY K.M)
XIV ADDL. C.M.M.,
BENGALURU
3
JUDGMENT
This is a private complaint filed by the complainant against the accused under Sec.200 Cr.PC alleging the offense punishable under Section 138 of the Negotiable Instruments Act, 1881.
The brief facts of the complaint are as follows ;
2. The complainant Company is incorporated under the provisions of Companies Act 1956 having it's Registered Office at No.827, 'Dhun Building', Anna Salai, Chennai - 600 002 and one of its Regional Marketing Office at No.106 and 107, Midford House No.1, Midford Gardens, M.G. Road, Bengaluru and is represented by Mr.Shridhar S. Salunke, Senior Assistant Manager - Accounts. The company is in the business of manufacture and sale of cements under three brands viz., 'Sankar', 'Coromandel' and 'Raasi' apart from other diversified activities.
2.1) The accused being Proprietor of M/s.Babloo Enterprises is in the business of sale of cements and 4 is responsible for the conduct of day-to-day transactions of his proprietorship concern. Consequent to orders placed by the accused, the complainant company had supplied cements of all the brands on credit basis and has maintained a running account in the usual course of its business in respect of the transactions with M/s.Babloo Enterprises. Copies of the statement of its accounts was supplied to the accused periodically and the accused acknowledged and has confirmed the balance outstanding with the complainant company. As per the accounts books of the complainant, the accused is liable to pay a sum of Rs.8,98,211.52 as on 31.08.2018. Towards partial discharge of said liability, the accused had issued two cheques i.e., * Cheque bearing No.388306 dtd.10.09.2018 for Rs.1,50,000/-, * Cheque bearing No.382382 dtd.03.09.2018 for Rs.1,50,000/-, Both cheques were drawn at Canara Bank, Main Road branch, Sullia, D.K in favour of the complainant company. The said cheques were deposited by the 5 complainant for encashment through its banker i.e., HDFC Bank Ltd., Richmond Road branch, Bengaluru on 25.09.2018 and the said cheques have been returned dishonored for the reason "Exceeds Arrangement" vide two bank memo's dated 27.09.2018. Thereafter, the complainant got issued legal notice on 01.10.2018 to the accused by registered post which was dispatched on 04.10.2018 demanding the accused to pay the cheque amount with interest at the rate of 18% per annum within 15 days from the date of its receipt. The said notice has been returned unserved with posal shara "intimation delivered, unclaimed" on 20.10.2018. In spite of it, the accused has failed to pay the cheque amount and therefore, the accused has committed the offense punishable under Sec.138 of Negotiable Instruments Act, 1881.
3. On filing of the complaint, cognizance has been taken for the offense punishable under Sec.138 of Negotiable Instruments Act, 1881 and a private complaint was registered in PCR. No.58113/2018.
6Sworn statement of the complainant has been recorded by way of affidavit. On hearing the complainant and by considering the documents on record, summons was issued to the accused by registering the criminal case in C.C.No.51891/2019. Thereafter, in response to summons issued, the accused has appeared before the court through his counsel and has pleaded for bail. The accused has been enlarged on bail. Plea of the accused has been recorded and accused has pleaded not guilty and h a s claimed to be tried. Hence the matter was posted for trial.
4. The sworn statement of Representative of the complainant company who is examined as CW.1 has been treated as examination-in-chief in view of the decision of the Hon'ble Apex Court reported in (2014) 5 SCC 590 - Indian Bank Association and others Vs Union of India and others - [W.P. (civil) No.18/2013]. CW.1 to prove the guilt against the accused, has relied on the documents marked at Ex.P1 to Ex.P10. The incriminating circumstances emanating from the evidence of CW.1 has been 7 brought to the notice of the accused and his statement under Sec.313 of Cr.PC was recorded. The accused has denied the incriminating circumstances and further states that the complainant himself has to pay incentive amount to him. The accused has not led any defense evidence nor has produced any of the documents on his behalf.
5. Heard the arguments of both the counsels.
6. The counsel for the complainant has relied on the following citations;
i) K.N. Beena Vs Muniyappan and
another - (AIR 2001 S.C 2895),
ii) R. Sivaraman Vs The State of Kerala
and others - (Crl. A. No.465 of 2000),
iii) Dr.B.V. Sampath Kumar Vs Ms.Dr.K.G.U Lakshmi - (Crl. A. No.1115 of 1999),
iv) Sampelly Satyanarayana Rao Vs Indian Renewable Energy Development Agency Ltd., - (2016 (2) Kar. L.R. 788 (SC), 8
v) Uttam Ram Vs Devinder Singh Hudan & Another - (Crl. A. No.1545 of 2019),
vi) Bir Singh Vs Mukesh Kumar - [(2019) 4 SCC 197].
7. The counsel for the accused has relied on the following authorities;
i) M/s.Indus Airways Pvt., Ltd., & Others Vs M/s. Magnum Aviation Pvt., Ltd., and another - (Crl. A. No.830 of 2014),
ii) Director, Maruti Foods and Farms Pvt., Ltd., Vs Basanna Pattekar - (2008 Crl. L.J. 157),
iii) A.C. Narayanan Vs State of Maharashtra and another - (Crl. A. No.73 of 2007)
8. The points that arise for my consideration are:-
1)Whether the complainant proves that the accused has issued two cheques bearing No.388306 dtd.10.09.2018 and No.382382 dtd.03.09.2018 for Rs.1,50,000/- each, both drawn at Canara Bank, Main Road branch, Sullia, D.K for discharge of legally 9 recoverable debt and the said cheques were dishonored for the reason "Exceeds Arrangement". In spite of issuance of notice dated 01.10.2018, accused has failed to repay the amount and thereby the accused has committed the offense punishable under Sec.138 of N.I. Act, 1881?
2) What Order?
9. My findings on the above points are as under;
Point No.1 : In Affirmative,
Point No.2 : As per final order,
for the following.,
REASONS
10. Point No.1: To prove its case, the
Representative of the complainant company
Mr.Shridhar S.Salunke has examined himself as CW.1. In his chief-examination, he has reiterated the averments of the complaint. Further, CW.1 has produced copy of Company Board Resolution dtd.27.01.2017 at Ex.P1, notarized copy of Power of Attorney dtd.08.10.2018 at Ex.P2. Two original cheques bearing No.388306 dtd.10.09.2018 and 10 No.382382 dtd.03.09.2018 for Rs.1,50,000/- each, both drawn at Canara Bank, Main Road branch, Sullia, D.K. at Ex.P3 and P4 respectively. Ex.P5 and P6 are the bank endorsements dtd.27.09.2018 showing that both the cheques at Ex.P3 and P4 have been dishonoured for the reason "Exceeds Arrangement". Ex.P7 is the legal notice dtd.01.10.2018 wherein the accused has been demanded to pay the cheque amount within 15 days of its receipt. Ex.P8 is the postal receipt showing dispatch of legal notice on 04.10.2018 to the address of the accused. Ex.P9 is the postal cover addressed to the accused which has been returned unserved with postal shara dtd.17.10.2018 as "Intimation delivered, unclaimed". Ex.P10 is the Ledger Account Extract pertaining to the accused firm wherein balance of Rs.8,98,211.52 is shown as overdue. In the cross- examination, CW.1 states that since the accused is an authorized dealer, complainant company has supplied cement on orders placed by him orally. For a suggestion that false invoice has been raised by the 11 complainant company, CW.1 by denying it has stated that they have uploaded it with VAT returns and also have paid taxes in the name of the Dealer/accused. The suggestion that the cheque was issued by the accused in the year 2006 - 2007 during entering into Dealership Agreement has been denied by the CW.1. Further states that cheque is of the year 2018. The counsel for the accused has suggested that during the pendency of this case and C.C. No.53876/2019, the accused has paid Rs.3 lakhs in all to the complainant company and the same has been admitted by CW.1. The suggestion that the remaining amount is the commission amount to be paid to the accused by the complainant company has been denied by CW.1.
11. The accused has not led any evidence on his behalf nor has relied on the any of the documents. By considering the suggestions made in the cross-examination of CW.1 and the arguments addressed by the counsel for the accused, the defense of the accused can be deduced as follows;
12* The representative of the complainant company Mr.Shridhar S.Salunke has not been properly authorized to prosecute the matter.
* The representative of complainant company has no personal knowledge of the transaction.
* No notice is served on the accused.
* Blank cheque issued during entering into Dealership Agreement has been misused and there is no legally recoverable liability.
Defense - No proper authority to CW.1 to prosecute the matter:
12. The counsel for accused has argued that Board Resolution dtd.27.01.2017 produced at Ex.P1 is signed by one S.Anand, Sr.Dy.Gen.Manager- Marketing. No signature of any of the Directors is found on Ex.P1. Also no signature of Mr.Rakesh Singh in whose favour authority has been delegated on behalf of the company is found on it. Also there are no documents to show that the said Mr.Rakesh Singh is Executive President of the complainant company. Even though the complainant has produced 13 notarized copy of Power of Attorney at Ex.P2, there is no documents to show that Mr.Shridhar S.Salunke is the employee of the complainant company. Therefore there is no proper authority to the representative of the complainant company and hence has prayed to dismiss the complaint.
13. In support of his contention, the accused has relied on the decision of Hon'ble High Court of Karnataka in the case of Director, Maruti Foods and Farms Pvt., Ltd.,'s case cited supra wherein at Para 3 has it is observed as follows;
Para 3. I have considered the
contentions of Learned Counsel with
reference to the material on record. It is not disputed that the complainant is a company registered under the Companies Act and P.W. 1 apart from his own self serving statement that he is the Director who is authorised to depose on behalf of the company, has not produced any documentary evidence to show that he is the Director and he has been authorised by the company to depose on behalf of the company. The resolution of the company is not produced and he has pleaded his ignorance in the cross examination about the resolution passed by the Board of Directors. Since the company is a juristic person, any person on behalf of the company has to be authorised by the 14 company under the Articles of Association or by a separate resolution to depose on behalf of the company and therefore, finding of the Trial Court is justified and it is unnecessary to go into the other reasons recorded by the Trial Court in dismissing the complaint and acquitting the accused. I do not find any ground to interfere with the judgment of acquittal passed by the Trial Court. However, .......
(emphasis supplied by me)
14. In the case on hand, the complainant has produced the Certified Extract of Minutes of Meeting of the Board Directors held on 27.01.2017 at Ex.P1 wherein the Board has resolved and authorized Mr.Rakesh Singh, Executive President of the Company to initiate and prosecute any legal proceedings, tender evidence etc, on behalf of the company. Also has authorized to delegate his authority to any official, external consultant, professional etc., in the interest of the Company. Ex.P1 is the certified extract of the minutes of meeting of the board of directors and therefore cannot be expected to possess the signature of the board directors as asserted by the accused.
1515. Ex.P2 is the notarized copy of Power of Attorney dtd.08.10.2018 wherein Mr.Rakesh Singh, the Executive President of the complainant company has authorized representative of the Company i.e., Mr.Shridhar S.Salunke, Sr.Assistant Manager (Accounts) of the Company to prosecute all the proceedings against accused and others. The said documents have been disputed by the accused in the cross-examination of CW.1. Nothing has been brought on record to doubt the said document showing delegation of authority of CW.1 by the complainant company. When the document purports that Mr.Rakesh Singh as Executive President of the complainant company and the representative Mr.Shridhar S.Salunke as Sr.Assistant Manager (Accounts) of the Company, the contention that there are no documents produced by the complainant to show that they are the officials of the complainant company by the counsel for the accused holds no water.
1616. In the case on hand, the complainant has produced certified extract of board resolution authorizing its representative Mr.Rakesh Singh, Executive President who has also been authorized to sub delegate his authority and accordingly he has authorized Mr.Shridhar S.Salunke, CW.1 to prosecute this matter against the accused. Under the circumstances, the decision relied upon by the counsel for the accused where no board resolution was produced is of no help to the accused in respect of the said contention.
Defense - No personal knowledge of the transaction:
17. The counsel for the accused has argued that CW.1 has no personal knowledge of the transaction and therefore he cannot give any evidence on behalf of the complainant company. He has relied on the decision of Hon'ble Supreme Court in the case of A.C.Narayanan Vs State of Maharashtra and another, the Hon'ble Supreme Court at para 26 has held as follows;
17Para 26. While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.
(iv) In the light of section 145 of N.I Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the N.I Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant of his witness upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the N.I. Act.
(v) The functions under the general power of attorney cannot be delegated to another 18 person without specific clause permitting the same in the power of attorney.
Nevertheless, the general power of attorney itself can be cancelled and be given to another person.
(Emphasis supplied by me)
18. In the above precedent, it is held that the Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint. But it is also held that the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions. In the cross-examination, CW.1 has stated that he has no personal knowledge of the transaction, but he is deposing before the court on the basis of the documents maintained at the complainant company. Of course CW.1 in his cross- examination has clearly stated that he do not have any personal knowledge of the transaction. But the same does not mean to say that he did not possess due knowledge regarding the transaction of the complainant company with the accused. In the entire 19 cross-examination of CW.1, nothing has been elicited to show that CW.1 is devoid of knowledge regarding the alleged transaction. In the above precedent, along with the personal knowledge, the power of attorney holder possessing due knowledge regarding the transactions can also depose in order to prove the contents of the complaint. Under the circumstances, the contention of the counsel for the accused that CW.1 do not possess personal knowledge of the transaction and therefore he cannot depose on behalf of the complainant holds no water. More particularly when the complainant's case has been substantiated by documentary evidence. Therefore the decision relied upon by the counsel for the accused is of no help in substantiating his defense.
Defense - No notice is served on the accused:
19. It is seriously contended that the notice issued by the complainant has not been served on the accused. The complainant has produced legal notice at Ex.P7 addressed to the accused. Ex.P8 is 20 the postal receipt showing dispatch of the said legal notice to the address of the accused on 04.10.2018. Ex.P9 is the postal cover through which legal notice was sent and the same has been returned with postal shara "absent, intimation delivered, unclaimed".
20. To adjudicate the said fact, I would also like to rely upon the decision in the case of T.Kumar Vs K.Chennakeshavulu - (2021 (2) AKR 219) at para 16 our Hon'ble High Court has held as follows;
Para 16. When the matter was referred to the Larger Bench of the Hon'ble Supreme Court in C.C.Alavi Haji V. Palapetty Muhammed and Anr.(2007) Cri LJ 3214 answering the reference in para 17 of the judgment it was held as follows:
"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons 21 from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (supra), if the 'giving of notice' in the context of Clause
(b) of the proviso was the same as the 'receipt of notice' a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
(Emphasis supplied by me)
21. When the complainant has shown dispatch of legal notice to the correct address of the accused, it is burden of the accused to show that notice was not sent to his correct address. In the case on hand, the accused has not disputed the correctness of the address and therefore it is to be inferred that the notice has been issued to his correct address. Further the accused has not paid the cheque amount even after his appearance before the court. Under the circumstances, by relying upon the above precedent, 22 the contention of the accused that notice was not served on him holds no water.
Defense - Blank cheque was issued while entering of Dealership Agreement and there is no legally recoverable liability:
22. The counsel for the accused has argued that Blank cheque issued by the accused while entering into Dealership Agreement with the complainant has been misused and there is no legally enforceable debt exist. In the cross-examination, he has also suggested that the said alleged cheque issued during the year 2006 - 2007 which has been denied by CW.1. Further CW.1 states that the alleged cheque is of the year 2018. Except oral assertions, there is nothing on record to show that the alleged cheque was issued during the year 2006
- 2007.
Principles:
23. Once the factum of issuance of cheque and its dishonour is established the presumption under 23 Sec.139 of Negotiable Instruments Act has to be raised in all the cases. The onus of proof to rebut the presumption lies on the accused. The accused need not rebut the presumption beyond all reasonable doubt. But the accused has to place sufficient materials to convince the court that his case is more probable when it is compared with the case of the complainant.
Analysis:
24. In the case on hand the accused has not denied issuance of cheque and his signature on the cheque and therefore is to be inferred that the cheque was issued towards legally recoverable liability until it is rebutted. Further the complainant by producing documents at Ex.P3 to Ex.P6 has established the factum of issuance of cheque and its dishonour. Therefore presumption under Sec.139 of Negotiable Instruments Act in respect of passing of consideration and existence of legally enforceable debt or liability has to be raised until the contrary is 24 proved. After raising such initial presumption in favour of the complainant, it is for this court to consider whether the accused has placed sufficient materials to convince the court that his case is more probable when it is compared with the case of the complainant.
25. In support of his contention, counsel for the accused has relied on the decision of Hon'ble Supreme Court in the case of M/s.Indus Airways Pvt., Ltd., & Others Vs M/s. Magnum Aviation Pvt., Ltd., and another, wherein at para 19 the Hon'ble Supreme Court has observed has follows;
Para 19........if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability.
26. In the above precedent, it is held that if a cheque is issued as an advance payment for purchase 25 of goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods was not supplied by the supplier, the cheque cannot be said to have been drawn for an existing debt or liability. But in the case on hand, there is no such contention that the cheque was issued as an advance payment. Even though it is contended that no goods have been delivered by the complainant company, in the tail end of the cross-examination of CW.1, the counsel for the accused has clearly suggested that the accused has deposited an amount of Rs.3 lakhs with the complainant company during pendency of this case and also another case in C.C. No.53876/2019.
27. It is also suggested that the remaining amount claimed in the said two cases is the commission amount to be paid to the accused by the complainant company. Deposit of Rs.3 lakhs by the accused is admitted by CW.1. But has clearly denied that the remaining amount was commission amount to be given to the accused. The accused has not 26 produced any materials to show that the remaining amount is the commission amount to be paid by the complainant to accused. When the accused has admitted his liability by conduct and has deposited an amount of Rs.3 lakhs during pendency of the proceedings, his contention that no goods were supplied to him by the complainant and there was no legally recoverable liability in favour of the complainant holds no water. For the same reason, the contention of the accused that the cheque was issued during entering into Dealership Agreement has been misused has remained mere oral assertion without any substantiation.
28. The complainant has produced ledger account extract maintained by the complainant company pertaining to the transactions with the accused wherein the balance due as on 21.11.2018 is shown to be Rs.8,98,211.52. The accused has not denied business of the complainant company, but states that the goods have not been delivered. He has not produced any materials to doubt the transactions 27 depicted in Ex.P10. Moreover, by depositing an amount of Rs.3 lakhs with the complainant company during pendency of the two cases filed by the complainant company has clearly admitted the liability. Furthermore, the accused has not led his evidence nor has produced any documents on his behalf. Therefore, the accused has failed to bring in any materials on record to probabalize his defense. There is nothing on record to rebut the presumption available U/s.139 of N.I. Act in favour of the complainant. Under the circumstances, the accused has failed to bring any sufficient materials to rebut the presumption. On the contrary, the complainant has clearly established the existence of legally recoverable debt and has also complied all the necessary ingredients U/s. 138 of N.I. Act. Further the delay of two days in filing the complaint has been condoned by this court vide its order dated 4.2.2019. Therefore, the accused is found guilty of the offense punishable under Sec.138 of Negotiable Instruments Act.
2829. In Bir Singh's case supra relied upon by the complainant, the Hon'ble Supreme Court at Para 36 has held as follows;
Para 36. 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.
In the above precedent, it is held that Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment will attract presumption under Section 139 of the Negotiable Instruments Act in the absence of cogent evidence. In the case on hand, the accused has failed to show that there was no legally recoverable liability. Therefore, even if the cheque was issued in blank, by relying upon the above precedent, offense U/s 138 of NI Act is attracted.
30. In K.N. Beena's case supra relied upon by the complainant, the Hon'ble Supreme Court at Para 6 has held as follows;
29Para 6. In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonored cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Sections 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebutable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal vs. Bratindranath Banerjee reported in (2001) 6 S.C.C. 16 has also taken an identical view.
31. In R. Sivaraman's case cited supra relied upon by the complainant, the Hon'ble Kerala High Court at Para 5 has held as follows;
Para 5. Thus in a complaint under Section 138, the court has to presume that the cheque had been issued for a debt or liability. The presumption is rebuttable. The burden of proving that the cheque had not been issued in discharge of a debt or liability is on 30 the accused. That burden is not discharged in this case as already discussed above.
32. In Dr. B.V. Sampath Kumar's case supra relied upon by the complainant, the Hon'ble Karnataka High Court at Para 5 has held as follows;
Para 5. The dismissal of the complaint on the plea that it was issued only as security and therefore no prosecution would lie is again untenable view. A cheque whether issued for repayment of loan or as security makes little difference under Section 138 of the Act. In the event of dishonour, legal consequences are same without distinction. In the present case, issue of cheque, its dishonour and issuance of statutory notice are held to be proved according to the findings of the trial court. When once issue of cheque is proved, a presumption under Section 139 of the Act would arise with regard to consideration. The accused has not let in any evidence to rebut the said presumption. In that view, dismissal of the complaint is bad in law and the complainant has successfully proved the guilt and the accused is liable to be convicted under Section 138 of the Act.
33. In Sampelly Satyanarayana Rao's case supra relied upon by the complainant, the Hon'ble Supreme Court at Para 18 has held as follows;
Para 18. In Rangappa versus Sri Mohan, this Court held that once 31
issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption, though accused need not adduce his own evidence and can rely upon the material submitted by the complainant. However, mere statement of the accused may not be sufficient to rebut the said presumption. A post dated cheque is a well recognized mode of payment.
34. In Uttam Ram's case supra relied upon by the complainant, the Hon'ble Supreme Court at Para 29 has held as follows;
Para 29. Learned counsel for the respondent has referred to the judgment reported in M.S. Narayana Menon v. State of Kerala that evidence adduced by the complainant can be relied upon to rebut the presumption of consideration.
However, said judgment has no
applicability to the facts of the
present case as the Trial Court has found that the presumption is not rebutted but still the Trial Court dismissed the complaint for the reason that the appellant has failed to prove the amount mentioned in the cheque as due amount. Once the cheque is proved to be issued it carries statutory presumption of consideration. Then the onus is on the respondent to disprove the presumption at which the respondent has miserably failed.
3235. In the above precedents, it is held that once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. The presumption is rebuttable. The burden of proving that the cheque had not been issued in discharge of a debt or liability is on the accused. But in the case on hand the accused has failed to rebut the presumption and therefore by relying on the above precedents, the accused is to be held guilty for the offense punishable U/s 138 of NI Act. Accordingly, I hold Point No.1 in Affirmative.
36. Point No.2: It is admitted that the accused has deposited Rs.3 lakhs with the complainant company during pendency of this case. The accused is entitled for deduction of the said amount in the fine amount imposed on the accused. The punishment prescribed for the offence U/s.138 of Negotiable Instruments Act is imprisonment for a period which may extend to two years or with fine. Considering the facts and circumstances of this case, nature, year 33 of the transaction, nature of the instrument involved, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), this court is of the considered view that it is just and desirable to impose fine of Rs.4,05,000/- and out of the said amount, it seems to be proper to award a sum of Rs.4,00,000/- as compensation to the complainant as provided U/s.357(1) (b) of Cr.PC and the remaining sum of Rs.5,000/- shall go to the State. In the said compensation amount, if the amount of Rs.3,00,000/-, which is already paid to the complainant during trial is deducted, the accused is liable to pay the remaining compensation of Rs.1,00,000/- to the complainant. Accordingly, I proceed to pass the following.., ORDER In exercise of power vested under section 255(2) of Cr.P.C., I hereby convict the accused for the offence punishable under Sec.138 of 34 Negotiable Instruments Act, 1881.
The accused is sentenced to pay fine of Rs.4,05,000/-
(Four Lakhs Five Thousand only) for the offence punishable U/s.138 of Negotiable Instruments Act, 1881. In default of payment of fine, the accused shall under go simple imprisonment for a period of one month.
In exercise of powers vested under section 357(1)
(b) of Cr.PC., out of fine amount a sum of Rs.4,00,000/- (Four Lakhs only) is ordered to be paid to the complainant as compensation and the remaining Rs.5,000/- (Five Thousand only) shall go to the State.
Since the accused has paid Rs.3,00,000/- (Three Lakhs only) during trial to the complainant, the complainant 35 is entitled for remaining compensation of Rs.1,00,000/-
(One Lakh only).
The bail bond of the accused stands canceled. The cash security deposited by the accused is ordered to be continued till expiry of the appeal period.
Free copy of the judgment shall be supplied to the accused forthwith.
(Dictated to the stenographer, transcripted thereof, computerized and print out taken by him is verified, corrected and then pronounced by me in open court on this the 20th day of January, 2023) Digitally signed by ONKARMURTHY K ONKARMURTHY M KM Date: 2023.01.20 15:00:10 +0530 (OONKAR MURTHY K.M) XIV ADDL. C.M.M., BENGALURU 36 ANNEXURE List of witnesses examined by complainant:
CW.1 : Sri. Shridhar S. Salunke List of Documents marked by complainant:
Ex.P1 : Board Resolution
Ex.P2 : Notarized copy of Power of
Attorney
Ex.P3 & P4 : Two Cheques
Ex.P5 & P6 : Two Bank endorsements
Ex.P7 : Legal Notice
Ex.P8 : Postal receipt
Ex.P9 : Postal cover
Ex.P10 : Ledger Account Extract.
List of Witnesses examined by defence:
NIL List of Documents marked by defence:
NIL Digitally signed by ONKARMURTHY ONKARMURTHY K M KM Date: 2023.01.20 14:59:55 +0530 (OONKAR MURTHY K.M) XIV ADDL. C.M.M., BENGALURU