Bangalore District Court
Sri Ganesh Sai Finance And Pawn Brokers vs Vinay.S. S/O. Shivanna. J on 4 October, 2024
C.C.NO.22239/2022
1
KABC030563152022
Presented on : 12-07-2022
Registered on : 12-07-2022
Decided on : 04-10-2024
Duration : 2 years, 2 months, 23 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, Bengaluru City.
DATED; THIS THE 04th DAY OF OCTOBER-2024
C.C.NO.22239/2022
Complainant: Ganesh Sai Finance and Pawn Brokers ®
No.107/1, 2nd Floor, 3rd Main, Mount joy
Extension, Hanumanthnagar,
Bangalore-560019.
R/by its Partners.
R/by its office Accountant
Mr.B.R.Venu S/o Ramaswamy,
Age: 29 years, No.54, 2nd cross,
K.G.Nagar, Bengaluru-560019.
As per the order dated: 11.09.2023.
Complainant company
R/by its Authorized representative,
Mr.Chandrashekar S/o. K.Ramaiah,
Age: 41 years, R/at No.672, Old No.12/11,
2nd Main, Ganganadhi Road, 3rd Cross,
Kavikeshava Road, Srinagar,
Near Madhuramma Temple,
Bangalore-560050.
C.C.NO.22239/2022
2
(By Sri.Anand.S.G & Ors.,Advs.,)
V/s
Accused: Mr.Vinay.S S/o Shivanna.J
Age:40 years, R/at No.1351, 5th A Cross,
10th Main, 2nd Phase, Srinivas Nagar,
Banashanakari 1st Stage, Bengaluru-560050.
(By Sri.N.M.Parameswara.,Adv.,)
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 running the aforesaid concern and having money lending licence. The accused has approached the complainant during 2nd week of April 2017 for a loan of Rs.4,00,000/- and he has received same from the complainant by agreeing to pay the nominal interest at the rate of 16% per annum, but the accused failed to pay either the interest or principal amount from 01.05.2017 to 28.12.2020 and there is a outstanding of interest of Rs.2,34,134/-. The accused is liable to pay for Rs.6,34,134/- to the complainant. It is further stated that the accused towards discharge of his part liability had C.C.NO.22239/2022 3 issued the cheque No.557315 on 28.12.2020 for Rs.6,34,134/- drawn on Corporation Bank, Nrupathunga road branch, Bengaluru. As per the instructions of the accused the complainant had presented the said cheque for encashment through its banker the SVC Co.Op Bank Ltd., Hanumanthanagar, Bengaluru. But the said cheque was dishonored on 18.03.2021 with an endorsement "Funds Insufficient". Thereafter, on 08.04.2021 the complainant got issued a legal notice to the accused through its counsel calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. The said notice has returned on 09.04.2021 as Addressee left. Inspite of 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 16.07.2021.
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as PC.R.No.11129/2022. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 12.07.2022 to register the case in Register No.III.
C.C.NO.22239/2022 4
4. Thereafter, summons was issued to the accused and he has appeared before the court through advocate and secured bail. He was furnished its necessary papers. As complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant in support of its case, have examined its Accountant as PW.1 and got marked 13 documents at Ex.P.1 to 13 and closed its side.
6. During the pendency of the case, the learned counsel for the complainant has filed an application for the substitution of the representative of the company contending that the complainant originally represented by its Accountant due to change of circumstances they would like to substitute another Manager Sri.R.Chandrashekar during the course of trial. Accordingly on 11.09.2023 the said application was allowed and Manager Sri.R.Chandrashekar represented the complainant company. The complainant's have examined its Manager as PW.2 and got marked two documents at Ex.P.14 and 15 and closed its side.
7. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C. was recorded. He has denied the incriminating evidence appearing C.C.NO.22239/2022 5 against him. In his defence, the accused was examined as DW.1 and no documents were marked on his behalf.
8. I have heard the arguments on both the sides and also perused the material placed on record.
9. 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 the cheque-Ex.P.1 was dishonored for the reasons "Funds Insufficient" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of the legal notice.?
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5.What order?
10. 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:
C.C.NO.22239/2022 6
11.POINT NO.1 AND 2: These two points are inter- related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts, I have taken these two points together for common discussion. The case of the complainant is that he was acquainted with the accused. Further the complainant is running the aforesaid concern and having money lending licence. The accused had approached the complainant for a loan of Rs.4,00,000/- and he had received same from the complainant by agreeing to pay the nominal interest at the rate of 16% per annum, but the accused failed to pay either the interest or principal amount and there is a outstanding of interest of Rs.2,34,134/- and the accused is liable to pay Rs.6,34,134/- to the complainant. Further the accused towards the discharge of his part liability had issued the cheque in question in favour of the complainant. As per the instructions of the accused the complainant had presented the said cheque for encashment through its banker. But the said cheque was dishonored with an endorsement "Funds Insufficient". Thereafter, the complainant got issued a legal notice to the accused through its counsel calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. Inspite of issuance of the notice, the accused neither reply to the notice nor paid the cheque amount to the complainant. As such, the accused have committed an offence punishable under section 138 of C.C.NO.22239/2022 7 N.I.Act. Hence, the present complaint came to be filed before this court.
12. In support of the case, the complainant have examined its Accountant and Manager as P.W.1 and 2 and 15 documents were marked at Ex.P.1 to 15. In the chief examinations P.W.1 and 2 have repeated the contents taken by the complainant in the complaint. Ex.P.1 is the cheque in question issued by the accused in favour of the complainant dated: 28.12.2020 for Rs.6,34,134/-. Ex.P.1(a) is the signature of the accused. Ex.P.2 is the bank memo dated: 18.03.2021 informing the dishonor of the cheque as Funds Insufficient. Ex.P.3 is the office copy of legal notice dated: 08.04.2021. Ex.P.4 is the postal receipt. Ex.P.5 is the returned postal cover. Ex.P.5(a) is the returned legal notice. Ex.P.6 is the partnership deed of the complainant company. Ex.P.7 is the Money lending licence. Ex.P.8 is the loan application given by the accused to the complainant. Ex.P.9 and 10 are the payment vouchers given by the accused to the complainant for receiving the loan amount. Ex.P.11 is the promissory note executed by the accused in favour of the complainant. Ex.P12 is the authorization letter given to PW.1. Ex.P.13 is the complaint. Ex.P.14 is the authorization letter given to P.W.2. Ex.P.15 is the Amended complaint.
13. In order to prove his defence, the accused examined himself as DW.1 by way of affidavit and no C.C.NO.22239/2022 8 documents were marked on his behalf. In his chief examination affidavit D.W.1 has repeated the defence taken by him.
14. 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 by the accused. The learned counsel for the complainant has argued that from the evidence placed on record, it reveals that the complainant is having money lending license. Further argued that during 2nd week of April 2017 the accused approached the complainant for a loan of Rs.4,00,000/- and he has received the said amount from the complainant by agreeing to pay the nominal interest at the rate of 16% per annum. Further argued that after availing the loan the accused failed to repay either the interest or principal amount and from 01.05.2017 to 28.12.2020 there is a outstanding interest of Rs.2,34,134/- and the accused is liable to pay Rs.6,34,134/-. Further argued that after the repeated request made by the complainant, the accused has not paid any amount to the complainant. Further argued that the accused in order to repayment of part liability had issued the cheque-Ex.P.1 in favour of the complainant. He further argued that the accused has not denied Ex.P.1 being his cheque drawn on his account. When the signature of the accused is not disputed, the C.C.NO.22239/2022 9 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.2 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act. He further argued that the accused has failed to produce any believable evidence that he had issued the blank cheque in favour of PW.2 for the purpose of security at the time of availing the loan of Rs.25,000/- from PW.2 during the year 2016-17 and also why he has not returned back the same is not clear. He further argued that under section 139 of N.I.Act, there is a presumption that the cheques have been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.1 being his cheque and drawn on the account of the accused. The said presumption is available to the complainant.
15. Further he has argued that the accused has failed to prove the very fact that the cheque-Ex.P.1 was given to the Sri.R.Chandrashekar for the purpose of security for hand loan of Rs.25,000/- and it was blank when it was given to the complainant. Further argued that if the accused has paid the said hand loan with interest at the rate of 5% of Rs.60,000/- total sum of Rs.85,000/- why he has not return back the said cheque. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the C.C.NO.22239/2022 10 amount and in favour of the person as shown in it. It is for 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 he had given the blank cheque to the Sri.R.Chandrashekar for the purpose of security at the time of availing the hand loan. As such, the very defence of the accused is not believable. Further argued that after service of the legal notice the accused neither reply the notice nor paid the cheque amount, the complainant having no alternative have filed a complaint before this court. The defence of the accused is that he had issued the blank cheque to the Sri.R.Chandrashekar for the purpose of security. The accused in support of the said presumption he has not produced any documents to take the defence to rebut the said presumption under section 138 of N.I.Act. Therefore, the accused have committed an offence. Further argued that even though the issuance of cheque for security/guarantee, the offence under section 138 of N.I.Act is attracted. Hence, he prays to convict the accused.
16. The learned counsel for the accused has argued that there was no legally enforceable debt/liability to the complainant from the accused for which the cheque- Ex.P.1 was issued. Further argued that the accused had issued the blank cheque to the Sri.R.Chandrashekar for C.C.NO.22239/2022 11 the purpose of security at the time of availing the hand loan of Rs.25,000/-. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the cheque came to be issued. It is further argued that the complainant was not existed at the time of filing the above complaint as per Ex.P.7 the license of the complainant was issued by the Government of Karnataka from 16.04.2016 to 31.03.2021 itself and the same was not renewed as per the rules and regulations. The complaint is filed on 15.07.2021 without any locus-standi to file the above complaint. It is further argued that the accused has obtained hand loan of Rs.25,000/- from Sri.R.Chandrashekar, PW.2 herein during the year 2016-17 and the accused has returned the said amount including interest at the rate 5% of Rs.60,000/-, total sum of Rs.85,000/-. It is further argued that said Sri.R.Chandrashekar who used to do finance in his individual capacity has taken the cheque in question from the accused as security and few documents of the complainant. Further argued that the said Sri.R.Chandrashekar not returned the same even after repayment of Rs.25,000/- loan amount with interest, which is total amount of Rs.85,000/-. Further argued that said Sri.R.Chandrashekar has also admitted in the cross C.C.NO.22239/2022 12 examination about his personal transaction with the accused in the year 2016 in C.C No.22240/2022.
17. It is further argued that it is clear that PW.2 has individual transactions with the accused and misused the cheque which was given to him for personal transaction and filed the above complaint on behalf of his wife's finance company, the complainant herein. Further argued that the said Sri.R.Chandrashekar has misused the cheque obtained for security purpose in his individual transactions with the accused and by filling the cheque he has filed this case by making false and frivolous allegations stating that the accused has obtained Rs.4,00,000/- loan from the complainant company during April 2017 by way of cash. He further argued that the accused has not received any amount from the complainant and the complainant filed false case against the accused. The complainant has not produced any documents to show that the accused has received a sum of Rs.4,00,000/- from the complainant. It is further argued that there was clear condition that in the alleged loan application Ex.P.8 it is in complete application form wherein the there was no details or signatures of the sureties were taken, which is mandatory for the loan purpose. PW.1 admitted in the cross examination that it is not mentioned about the sureties are not necessary for the loan in Ex.P.8. It is mandatory for every finance company C.C.NO.22239/2022 13 to obtain the surety for the issuance of loan. Hence it is clear that the accused not obtained any loan from the complainant.
18. He further argued that as per the rules if the borrower defaults any payment towards EMI for more than two months, then they have to issue notice to the borrower and call upon them to pay the balance due. PW.1 admitted in the cross examination that the complainant has not taken any legal action for three years seven months 27 days from the date of alleged loan transaction. The complaint filed after lapse of three years from the alleged transaction and the complaint is filed on time barred debt. Hence, the complaint is liable to be dismissed on the said point. Further argued that though PW.2 admitted in the cross examination that he has admitted he has not produced the alleged loan account details such account statement, day book, ledger book and income returns, wherein it is mandatory to mention the loan details of every borrower. Though he admits that he will produce the documents but not produced any documents. Further argued that the partners of the complainant have authorized Sri.R.Chandrashekar to conduct the case on their behalf and the authorization letter dated: 24.02.2018 is produced is not correct. The license of the complainant was already expired and there is no existence of the complainant. Hence, the complaint is not maintainable and C.C.NO.22239/2022 14 liable to be dismissed. Further argued that the accused not issued the subject cheque towards the discharge of his part liability and there was no loan transaction with the complainant. It is further argued that the complainant is only in order give trouble to the accused and with an intention to make illegal money from the accused filed false case. Therefore, from the evidence placed on record, very availing the loan from the complainant is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt. Further argued that the complainant have not followed any mandatory procedure laid-down under law. Admittedly the said cheque was given as security. By taking undue advantage of possession of the aforesaid cheque, the complainant have foisted a false complaint against the accused. Hence, he prays to dismiss the complaint and acquit the accused.
19. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque in favour of the complainant. It is not disputed that the complainant is a registered finance company and the accused is a customer. The accused in order to repayment of the said amount had issued the cheque-Ex.P.1 in favour of the C.C.NO.22239/2022 15 complainant. Whereas, the accused has contended that he had given the chaque to the Sri.R.Chandrashekar for the purpose of security at the time of availing the hand loan. When he had given the cheque-Ex.P.1, which was blank. The accused has specifically denied having debt/liability had issued the cheque-Ex.P.1 on 28.12.2020 towards the discharge of any debt/liability. He contends that the blank cheque given by the accused to the Sri.R.Chandrashekar as was misused by the complainant colluded with him and a false complaint was filed against the accused.
20. 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 Accountant and Manager as PW.1 and 2 and 15 documents were marked at Ex.P.1 to 15. In chief examinations, they have repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.1 being his cheque drawn on the account of the accused. The said presumption is available to the complainant.
21. Under section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable C.C.NO.22239/2022 16 debt/liability. Such presumption is 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 was issued. PW.2 during his cross- examination has specifically denied the suggestions made to him that the cheque was issued to him for the purpose of security at the time of availing the hand loan and same was blank at the time of issuing the same. Further he has denied that he has misused the said cheque colluded with the complainant.
22. 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 enforceable debt/liability. In the present case, as per the defence taken by the accused that he had given the blank cheque to the Sri.R.Chandrashekar for the purpose of security at the time of availing the hand loan. Except, the said defence, the accused has not produced any materials to prove such defence. If the accused had given the blank cheque to the C.C.NO.22239/2022 17 Sri.R.Chandrashekar for the purpose of security, 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 colluded with Sri.R.Chandrashekar. On which date the accused came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why he has given the blank cheque to the Sri.R.Chandrashkar without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps the accused took to receive back the blank cheque. Moreover, immediately after the alleged blank cheque misused by the complainant colluded with the R.Chandrashekar he has not lodge any complaint before concerned police station. No steps have been taken to receive back the blank cheque, after he came to know about the same. Further the accused has taken the defence that the complainant is not having valid license from the competent authority and the license was already cancelled. Hence, the complainant is not having locus-standi to file the case against the accused. On perusal of the documents it reveals that as on the date of availing the loan the C.C.NO.22239/2022 18 complainant company having license. The complainant has filed this case on the basis of dishonor cheque. Even the complainant is not having the license this is immaterial to the case on hand.
23. 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 cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in the case of Rangappa V/s Mohan, reported in 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. Off 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-Ex.P.1 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.
C.C.NO.22239/2022 19
24. Further the learned counsel for the accused has taken contention that the cheque was given to the Sri.R.Chandrashekar for the purpose of security at the time of availing the hand loan. Further the complainant have misused the said security cheque colluded with the Sri.R.Chandrashekar. Hence, an offence under section 138 of N.I.Act is not attracted. In this regard once issuance of the cheque and signature are admitted, the 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 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, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
25. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble C.C.NO.22239/2022 20 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 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.
26. In the case of Kalemani 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.
27. Applying the above said principles to the present case and before considering the point whether the C.C.NO.22239/2022 21 accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
28. 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 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 reasons 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. It was also contended by the accused that he had given the blank cheque to the Sri.R.Chandrashekar for the purpose of security at the time of availing the loan. The said the blank cheque was misused by the complainant colluded with him. In order to prove his defence the accused has failed to produce any believable evidence before this court.
29. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant C.C.NO.22239/2022 22 misused the said cheque colluded with the Sri.R.Chandrashekar and had not return the same, inspite of collecting cheque leaves from the accused, as a prudent man, the accused should have inquired with the complainant and Sri.R.Chandrashekar and demanded to return that cheque. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.1. Further he could have issued notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of blank cheque against the complainant. It appears, just to escape from his legal liability, he have taken such contentions without any valid basis.
30. Moreover, the complainant have got issued the legal notice to the accused by registered through its counsel calling upon him to make repayment of the said cheque amount to the complainant. Before a person is held to be guilty of the offence punishable under 138 of N.I.Act, the complainant's 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 his cheque drawn on account of C.C.NO.22239/2022 23 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 or liability. From the evidence of P.W.1 and 2 and also cheque return memo-Ex.P.2 it is established that the cheque was dishonored for the reasons "Funds Insufficient''. A legal notice being issued as per Ex.P.3 within one month from the date of dishonor is also not in dispute. In the case on hand the accused has not disputed regarding notice sent by the complainant on his address. But the accused has not given reply to the said notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed the address, 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.
31. It is not the contention of the accused that thereafter he has repaid 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 of section 138 N.I.Act, have been complied with. As the accused has not repaid the cheque amount within stipulated period, the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present C.C.NO.22239/2022 24 complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even the accused did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, reported in 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 he has any defence to make or he pleads guilty. Thus, unlike 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 him. If he is not willing to plead guilty, he must explain what are the defences he 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 him.
32. 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, C.C.NO.22239/2022 25 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 his behalf.
33. The accused has taken defence that except signature other writings on Ex.P.1-cheque is not in his handwriting, which was filled up by the complainant colluded with the Sri.R.Chandrashekar and it amounts to material alterations, so, the complaint is liable to be dismissed. When the accused admits his signature, he cannot take up a defence that other contents of cheque was 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 C.C.NO.22239/2022 26 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."
34. 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.
35. As per the version of the accused is that he has nowhere denied transaction. The accused himself has admitted that he is the holder of the alleged cheque. It is sufficient hold that the accused has issued the cheque-
C.C.NO.22239/2022 27 Ex.P.1 and even after the accused 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 him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 and 2 have established the case of the complainant that the accused has issued the cheque- Ex.P.1 in order to pay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him that Ex.P.1 was the blank cheque and given to the R.Chandrashekar for the purpose of security at the time of availing the hand loan. Therefore, the accused has 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.
36. PW.1 and 2 in their evidence have specifically deposed that the accused had approached the complainant during 2nd week of April 2017 for a loan of Rs.4,00,000/- and the accused had received the same from the complainant by agreeing to pay the nominal C.C.NO.22239/2022 28 interest at the rate of 16% per annum, but the accused failed to pay either the interest or principal amount from 01.05.2017 to 28.12.2020 there is a outstanding of interest of Rs.2,34,134/- and the accused liable to pay Rs.6,34,134/- to the complainant. Further deposed that the accused towards the discharge of his part liability had issued the cheque in question in favour of the complainant. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, no documents could have been existence the evidencing financial transaction. This factor will not affect case of the complainant to disbelieve the financial transaction between the complainant and the accused. When 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 his defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
37. POINT NO.3 AND 4: In order to avoid repetition of facts, these two 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's have to prove all the requirements of section 138 of N.I.Act. Ex.P.1 being his cheque drawn on the account of the accused is not in dispute. The said C.C.NO.22239/2022 29 cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. Thereafter, the notice-Ex.P.3 being sent by the complainant is not seriously disputed. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given 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. When the accused immediately after receive the notice, he has not paid the cheque amount. As such, in the present case on perusal of the documents, the essential requirements of section 138 of N.I.Act have been complied with. Hence, the present complaint came to be filed before the court on 16.07.2021 within the period of one month from the date cause 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 of section 138 of N.I.Act, being complied with. Hence, the accused is found to have committed an offence punishable under section 138 of N.I.Act. With these observations, I answer point No.3 and 4 in the Affirmative.
38.POINT NO.5: The accused is held to have committed an offence punishable under section 138 of C.C.NO.22239/2022 30 N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above. 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 the offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.6,45,000/- (Rupees six lakhs forty five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.6,35,000/- (Rupees six lakhs thirty five 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.10,000/- (Rupees ten thousand only) shall be remitted to the State.
C.C.NO.22239/2022 31 In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 04th day of October 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.10.08 17:43:51 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witnesses examined on behalf of the complainant:
PW.1 : Mr.B.R.Venu. PW.2 : Mr.R.Chandrashekar.
List of documents marked on behalf of Complainant:
Ex.P.1 : Cheque.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Office copy of the legal notice.
Ex.P.4 : Postal receipt.
Ex.P.5 : Returned postal cover.
Ex.P.5(a) : Returned legal notice.
Ex.P.6 : Partnership deed.
Ex.P.7 : Money lending licence.
Ex.P.8 : Loan application.
Ex.P.9 & 10 : Payment Vouchers.
Ex.P.11 : Promissory note.
Ex.P.12 : Authorization letter given to PW.1.
Ex.P.13 : Complaint.
Ex.P.14 : Authorization letter given to PW.2.
Ex.P.15 : Amended complaint.
C.C.NO.22239/2022
32
List of witnesses examined on behalf of accused:
DW.1 : Vinay.S List of documents marked on behalf of accused:
-Nil-Digitally signed by SOUBHAGYA B
SOUBHAGYA BHUSHER B BHUSHER Date:
2024.10.08 17:43:59 +0530 XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.22239/2022 33 04.10.2024 (Judgment pronounced in the open court vide separate order sheet) ORDER Acting under section 255(2) of Cr.P.C., the accused is convicted for the offence punishable under section 138 of N.I.Act.
The bail bond and surety bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.6,45,000/- (Rupees six lakhs forty five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.6,35,000/- (Rupees six lakhs thirty five 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.10,000/-
(Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.