Bangalore District Court
3. After The Institution Of The ... vs Did Not Led Any Evidence on 26 July, 2022
1 CC.11469/2019(J)
KABC030367192019
Presented on : 23-05-2019
Registered on : 23-05-2019
Decided on : 26-07-2022
Duration : 3 years, 2 months, 3 days
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY.
Dated this the 26th Day of July2022
Present: Lokesh Dhanapal Havale. B.A.L.L.B.,
XV Addl.C.M.M., Bengaluru.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case CC.No.11469/2019
2.Name of the Complainant: Ramesh & Co
No.46, Mohiddin Saheb Lane,
J.M Road cross,
Bengaluru560 002.
Rep by its Proprietrix
Tarabai
D/o Bhickamchand
W/o Ramesh Kumar
Aged about 55 years.
Letter of Authority Holder,
Sukhraj Bhandari,
S/o late Dhanaji Bhandari,
2 CC.11469/2019(J)
Aged about 63 years,
No.64/1, Model House Street,
Basavanagudi,
Bengaluru560 004.
3.Name of the accused: 1. P.M Traders C/o Famart
No.39/40, 1 & 2, Opposite:UTI
Mutual Funds, Thempadath Building,
Near Krishna Hospital,
Iyyatil Junction, Chittoor road,
Ernakulam682 011
State : Kerala Rep by its partner
Mahesh Das.
Also at:
P.M Traders C/o Famart, Heyyampatt
building, Iyyatti Junction, Chitoor
road, Near Krishna Hospital,
Ernakulam682 011.
Zapple Care
Parayil building,
Near Jubily Hero, Vadavathur PO
Kalathipady, KK Road, Kottayam
686010
State Kerala.
APPLE SERVICE CENTRE
Kottayam Place,
Near Girideepam School road,
Vadavathur PO,
Kalathipady, KK Road,
Kottayam686010.
State Kerala.
3 CC.11469/2019(J)
2. Mahesh Das
Partner of P.M Traders,
C/o Famart, No.39/40, 1 & 2,
opposite: UTI Mutual funds,
Thempadath Building,
Near Krishna Hospital,
Iyyatil Junction, Chittoor Road,
Ernakulam682 011.
State: Kerala.
3. Deepti Mahesh Das
W/o Mahesh Das
Partner of P.M Traders,
C/o Famart, No.39/40, 1 & 2,
Opposote: UTI Mutual Funds,
Thempadath Building,
Near Krishna Hospital, Iyyatil
Junction, Chittoor road,
Ernakulam682 011.
State: Kerala.
(Accused No.3 is dropped)
4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(2) Cr.P.C., accused
No.2 is Convicted.
7.Date of final Order 26.07.2022.
***
4 CC.11469/2019(J)
This complaint is filed by the complainant U/Sec.200 of Cr.P.C.
through his LoA holder Sri. Sukhraj Bhandari against the accused No.1
to 3 for the offence punishable U/Sec.138 of the Negotiable
Instruments Act, 1881.
2. The facts of the complaint in brief are as under.
The accused persons are well aware that commercial
establishment of the complainant namely Ramesh & Co. She has been
carrying on wholesale business in Textiles and she is also a wholesale
distributor. The Textile Materials have been supplied to the accused
No.1 firm namely P.M Traders worth Rs.16,25,132/, which is the
principal amount and the accused agreed to pay interest and rate
difference of Rs.3,00,000/ totally amounting to Rs.19,25,132/. The
accused No.2 with consent and connivance of accused No.3 issued
cheque bearing No.000299 dated 14.01.2019 for Rs.1,00,000/ drawn
on The Karur Vysya Bank Ltd, Tripunithura628 301,
District:Ernakulam, State: Kerala in favour of Ramesh & Co towards
part payment of the above amount. The cheque is duly signed by
accused No.2 Mahesh Das, Partner/authorized Signatory of accused
No.1 P.M Traders. On presentation of the cheque for encashment, it
was returned dishonoured with shara "Funds Insufficient" on
17/01/2019. The complainant issued legal notice dated 9.2.2019
through speed post to all the accused and they came to be served on
the accused on 15.2.2019 & 19.2.2019. The accused persons did not
pay the amount within 15 days even after the service of the notice.
5 CC.11469/2019(J)
Hence prayed to punish the accused persons and compensate the
complainant.
3. After the institution of the complaint the Court registered
PCR No.6478/2019 and took cognizance of the offence. The sworn
statement of the complainant was recorded. On the basis of sworn
statement and other materials on hand, the criminal case was
registered against the accused No. 1 to 3 and summoned them. In
response to the summons, the accused No.2 and 3 put their
appearance through their learned counsel and got enlarged on bail and
it was followed by the supply of the prosecution papers to the accused
No.2 and 3 and the plea was recorded. The accused No.2 and 3 denied
the plea and claimed for trial. The complainant filed the memo and
prayed to delete accused No.3/ drop the proceedings. On perusal of the
case file, it is found that the accused No.2 is signatory to the cheque.
The said memo was allowed and in view of the memo filed by the
complainant, the proceedings against accused No.3 is dropped.
4. During trial the LoA of complainant by name Sukhraj
Bhandari examined himself as PW1 and got marked Ex.P.1 to P11. The
accused did not led any evidence.
5. I have heard the written arguments submitted by the
complainant, perused the entire materials. The following points would
arise for my consideration;
1. Whether the complainant proves that the
accused issued a cheque bearing No.000299
6 CC.11469/2019(J)
dated 14/1/2019 for Rs.1,00,000/ drawn on
Karur Vysya Bank Limited, Tripunithura and
on its presentation for encashment, it was
returned dishonoured with shara "Funds
Insufficient" and the accused failed to pay the
amount within 15 days from the date of
service of notice and thereby accused has
committed an offence punishable U/Sec.138
of N.I. Act, 1881 ?
2. Whether the accused rebuts the
presumption U/s.139 of N.I.Act?
3. What order?
6. My answers to the above points are as under.
Point No.1 : In the Affirmative
Point No.2 : In the Negative
Point No.3 : As per final order for the following;
REASONS
7. Point No.1 & 2: The points are taken together for discussion
to avoid repetition of facts and evidence. At this juncture, it is necessary
to go through the provisions of N.I. Act before proceeding further. The
provisions under Section 118(a) and 139 of the Act., 1881 are
extracted and they reads thus;
7 CC.11469/2019(J)
"118. Presumptions as to negotiable
instruments. - Until the contrary is proved,
the following presumptions shall be made:
(a) of consideration - that every
negotiable instrument was made or drawn
for consideration, and that every such
instrument, when it has been accepted,
indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or
transferred for consideration.
(b) as to date: that every Negotiable
Instrument bearing date was made or drawn
on such date;
"139. Presumption in favour of holder.
It shall be presumed, unless the
contrary is proved, that the holder of a
cheque received the cheque of the nature
referred to in section 138 for the discharge,
in whole or in part, of any debt or other
liability."
8. On plain perusal of the provisions under Section 118(a)
and 139 of the N.I.Act., as extracted herein above, it can be seen that
initially the presumptions constituted under these two provisions
favour the complainant. However, it is open to an accused to raise a
defence to rebut the statutory presumptions. An accused can raise a
defence, wherein the existence of legally enforceable debt or liability
can be contested.
8 CC.11469/2019(J)
9. It is also well established that an accused for discharging
the burden of proof placed upon him under a statute need not examine
himself. He may discharge his burden on the basis of the materials
already brought on record. An accused has constitutional rights to
maintain silence. Standard of proof on part of the accused and that of
the prosecution in a Criminal case is different. The prosecution must
prove the guilt of an accused beyond all reasonable doubts, the
standard of proof so as to prove a defence on the part of an accused is
"Preponderance of probabilities".
10. Under the light of above extracted provisions of the Act, I
have perused the oral and documentary evidence on record. In order to
prove his case the Letter of Authority Holder Sri. Sukhraj Bhandari
Mukesh examined as PW1 and Ex.P1 to 11 documents are marked.
Ex.P.1 is the LoA, which discloses that the complainant authorized the
LoA, holder to conduct the case on her behalf. It also discloses that the
complainant agreed that all acts and deeds lawfully done by the LoA
holder shall be construed as acts and deeds done by complainant
herself in respect of the commercial establishment. Ex.P2 is the cheque
bearing No.000299 dated 14.1.2019 for Rs.1,00,000/ drawn on The
Karur Vysya Bank Ltd, Tripunithura628 301, District: Ernakulam, State
Kerala issued by the accused in favour of the complainant. Ex.P.2(a) is
the signature of the accused on the cheque. Ex.P.3 is the Bank
endorsement dated 17/01/2019, which was issued with a Shara "Funds
Insufficient". Ex.P.4 is the legal notice dated 9/2/2019 issued by the
complainant to the accused demanding repayment of the cheque
amount. The six postal receipts are together marked as Ex.P.5, for
9 CC.11469/2019(J)
having sent the notice to the accused. Ex.P.6 to 11 are the postal
acknowledgments.
11. I have perused the exhibits on which the complainant has
placed his reliance. On perusal of the exhibits, it is clear that cheque at
Ex.P2 bearing No.000299 dated 14/1/2019 for Rs.1,00,000/ drawn on
The Karur Vysya Bank Ltd., Tripunithura628 301, District: Ernakulam,
State : Kerala in favour of the complainant was presented through the
Bank within its validity for encashment and the Bank issued
endorsement as per Ex.P3 on 17/01/2019 with a Shara "Funds
Insufficient". The complainant issued statutory notice dated
09/02/2019 as per Ex.P.4 demanding repayment of the cheque amount
within time from the date of receipt of Bank Memo. The notice sent
through speed post to all the accused and they came to be served on
the accused on 15.2.2019 and 19.2.2019. The complaint was filed on
22/5/2019, which is within limitation. The issuance of the cheque and
the signature on the cheque at Ex.P.2 are not disputed. Therefore, the
documents on record clearly show that the complainant has complied
the ingredients of Section 138(a) to (c) of the N.I.Act. Therefore the
presumptions U/s.118 and 139 of the N.I.Act arise in favour of the
complainant. The presumptions are rebuttable and the burden is on the
accused to rebut the presumptions. The presumption is that the cheque
was issued for legally enforceable debt/ liability. However actual
existence debt or liability can be contested. The accused No.2 can rebut
the presumptions by raising probable defences and proving it relying on
the evidence of the complainant or by leading his direct evidence.
10 CC.11469/2019(J)
12. The plea of the accused No.2 was recorded on 16.9.2019.
The case was posted for crossexamination of PW1 on 30.9.2019. The
accused remained absent since long time. Sufficient opportunities have
been given to the accused to crossexamine PW1. The Court has also
issued and reissued NBW against the accused but the accused was not
secured. Therefore the crossexamination of PW1 was taken as nil on
24.06.2022. The accused No.2 did not appear before the Court since
long time. Hence the statement of the accused No.2 U/s.313 of Cr.P.C
could not be recorded. As per the Hon'ble High Court of Karnataka in
Crl. Revision Petition No.437/2010 in the case of R.V.Kulkarni Vs.
Dakshina Murthy vide Judgment dated 28.06.2012, wherein it was
held that it was for the accused to appear before the Court and to have
defended himself effectively and to make himself available for the Court to
record the statement U/s.313 of Cr.PC. In the said case the complainant
preferred the revision before the Hon'ble High Court challenging the
order of the First Appellate Court in remanding the matter for fresh
trial for non recording of the statement of the accused U/s.313 of
Cr.P.C. The Hon'ble High Court of Karnataka observed that there is no
justification of the Appellate Court for having held that there is failure
of justice on account of statement of the accused not having been
recorded U/s.313 of Cr.P.C. The Hon'ble High Court of Karnataka also
discussed settled law in respect of statement of accused U/s.313 of
Cr.P.C by referring to the decision of three judge bench of Hon'ble
Supreme Court in the case of Basavaraj R.Patil Vs.State of Karnataka
reported in (2000) 8 SCC 740. It is clear from the above decision that
it is the duty of the accused to appear before the Court and make
available himself for recording of statement U/s.313 of Cr.P.C. and to
lead defence evidence. The accused failed to utilize the opportunity by
11 CC.11469/2019(J)
remaining absent. Therefore the statement of the accused U/s.313 of
Cr.PC was not recorded and the defence evidence is taken as nil. The
order sheet shows the conduct of the accused No.2 in delaying the
proceedings. Further the Hon'ble Supreme Court of India in the case
of Sumeti v/s M/s Paramount Tech Fab Industries in Crl.Appeal
No.292/2021 arising out of SLP(Crl) No.8498 of 2019 decided on
9.3.2021 held that a statement of the accused recorded u/sec.313 of
Cr.P.C is not a substantive evidence of defence but only on opportunity to
the accused to explain the incriminating circumstances appearing in the
prosecution case of the accused. It was also observed that if there is no
evidence in support of his defence either to disprove or to rebut the
presumption under sec.139 of the Act, the statement recorded under
sec.313 of Cr.P.C pleading false implication and innocence does not come
to the aid of the accused as it is not a substantive evidence. Further it is
settled principle that the accused must show prejudice caused to him
due to the non recording of statement u/sec.313 of Cr.P.C. If no
prejudice is pleaded and proved to the satisfaction of Court for non
recording of statement u/sec.313 of Cr.P.C there would be no violation
of salutary principle of natural justice as enshrined in the maxim "audi
alteram partem". No doubt it is well settled that a circumstance about
which the accused was not asked to explain can not be used against
him. But certainly it can be distinguished under the peculiar facts and
circumstances of a particular case. In the case on hand, it is clear from
the evidence on record that the accused No.2 had at all points of time
attempted to misuse the process of the Court and abandoned the
proceedings. The delaying tactics have been practiced by the accused
No.2. If the same are entertained, it would defeat the proceedings
instituted by the complainant. Therefore in the opinion of this Court,
12 CC.11469/2019(J)
the non recording of the statement u/sec.313 of Cr.P.C would not
vitiate the proceedings unless prejudice is shown by the accused No.2.
The scope and object of Sec.313 of Cr.P.C is explained in catena of
decisions and in view of that no injustice caused to the accused No.2
for not having recorded his statement u/sec.313 of Cr.PC.
13. Further as per the judgment of the Hon'ble Supreme
Court of India in the case of Md. Sukur Ali v/s State of Assam in
Crl. Appeal No.546/2011 dated 24.2.2011, wherein it was held that
if the criminal case whether a trial or appeal or revision is decided against
accused in the absence of counsel there will be violation of Article 21 of
the Constitution. However this Court is of the opinion that as the
accused No.2 has the right to fair trial, he is also under the duty or
obligation to promptly appear before the Court and contest the case. As
per the law of jurisprudence, there is always duty or obligation
corresponding to the right. The accused No.2 remaining absent for the
years together at his peril and therefore he can not be expected to
claim the right. Further the judgment in the case of Md. Sukur Ali
(supra) can be distinguished on the basis of the facts of the present
case. The facts of the said case are that the Crl. Appeal No.137 of 2003
was decided by the Hon'ble Gauhati High Court on 1.6.2010 in the
absence of the counsel for the Appellantaccused and the conviction
was upheld. The question before the Hon'ble Supreme Court was that
whether in a criminal case, if the counsel for the accused does not
appear, for whatever reason, should the case be decided in the absence
of the counsel against the accused, or the Court should appoint an
amicus curie to defend the accused. Usually in appeal or revision, there
is no question of recoding of evidence of the parties. The counsels
13 CC.11469/2019(J)
appearing for the parties canvass the arguments on behalf of their
parties assisting the Court about the correct position of law and the
error committed by the Trial Court or Appellate Court as the case may
be. However that is not the case when it comes to a trial. The parties
have to personally appear before the Court and lead evidence and the
complainant has only benefit of recording the evidence through
GPA/SPA holder. In a case where the accused himself is not appearing
and because of instructions being not given or for any other reason, the
counsel is also not appearing, if the Amicus Curie is appointed by the
Court to defend the accused, he could not proceed with the case
without there being any instructions of the accused and knowledge of
the facts/the defence of the accused. If the Amicus Curie is unaware of
the defence of the accused under the facts of a particular case, he is
unable to proceed with the case in effective manner. If the accused
himself is not appearing, there is no question of leading the defence
evidence. Further at a later stage, the accused may appear and if at all
something went against him in his absence, he might challenge it. If the
counsel for the accused appear at a later stage, he might also challenge
it. Therefore with due respect to the judgment of the Hon'ble Supreme
Court in the case of Md. Sukur Ali (supra) this Court is of the opinion
that under the circumstances as elaborated herein above the
appointment of Amicus Curie in trial is not feasible. Further the
proceedings under the N.I Act are quasi civil in nature and the object of
the N.I Act is to bring back the credibility of Negotiable Instrument
which were loosing their credibility because of lack of responsibility on
the part of the drawer and to inculcate faith in the efficacy of banking
operations in transacting business on Negotiable Instrument in general
to bring the erring drawer to book, so that such irresponsibility is not
14 CC.11469/2019(J)
perpetuated, to protect the honest drawer and to safeguard the payee
who is almost a looser. Such being the case, if the accused is allowed to
abuse the process of the Court, the object of the Act would be defeated.
Further in the case of K.S Panduranga v/s State of Karnataka,
reported in 2013(3) SCC 721 the Hon'ble Supreme Court held that,
"regard being had to the principles pertaining to binding precedent, there
is no trace of doubt that the principle laid down in Md. Sukar Ali (Supra)
by the learned judges that the Court should not decide a criminal case in
the absence of counsel of the accused as an accused in a criminal case
should not suffered for the fault of his counsel and the Court should, in
such a situation must appoint another counsel as amicus curie to defend
the accused and further if the counsel does no appear deliberately, even
then the Court should not decide the appeal on merit is not in accordance
with the pronouncement by larger bench in Bani Singh." The Hon'ble
Court further held that in view of the aforesaid annunciation of law, it
can safely be concluded that the dictum in Md. Sukur Ali (Supra) to the
effect that the Court can not decide a criminal appeal in the absence of
counsel for the accused and that too if the counsel does not appear
deliberately or shows negligence in appearing, being contrary to the ratio
laid down by the larger bench in Bani Singh (Supra) is per in curium.
Furthermore the transaction alleged in the case is purely a commercial
transaction entered into between the private individuals i.e. supply of
textile materials and the accused No.2 is not in judicial custody and he
does not fall under any of the parameters under the Legal Services
Authority Act to get free legal aid. Under such circumstances the
question of appointing counsel for the accused at the cost of state may
not arise at all. Hence, in view of the law laid down in the case of K.S
Panduranga (Supra), the case is proceeded on merit.
15 CC.11469/2019(J)
14. The accused No.2 failed to cross examine PW1 and he did not
lead any defence evidence. Even after the service of notice, the accused
No.2 did not issue reply notice. Further the order sheet shows the
conduct of the accused No.2 in delaying the proceedings on one or the
other pretext. The accused had given number of opportunities for cross
examination of PW1 but the accused failed to cross examine PW1
further. Therefore, the cross examination of PW1 was taken as nil. The
accused No.2 did not lead the defence evidence even though sufficient
opportunities have been given. Therefore the defence evidence is also
taken as nil. The case was posted for arguments. The conduct of the
accused No.2 itself shows that he is postponing the liability. If at all
the accused No.2 had no liability towards the complainant as alleged in
the complaint and if at all he had not issued the cheque in question for
the said liability, he would have promptly proceeded with the case and
also he would have lead defence evidence by taking probable defences
and proving the same by leading cogent evidence. The same has not
been done. The accused did not issue reply notice and he had not taken
any action either against the complainant for misuse of cheques.
Therefore there is nothing on record to disbelieve the case of
complainant.
15. The cheque and signature on the cheque at ExP.2 are not
disputed. It is marked as Ex.P.2(a). The admission regarding drawer's
signature on the cheque, attracts the ratio laid down by the Hon'ble
Supreme Court of India in its decisions reported in 2011 (11) SCC -
441 - Rangappa V/s.Sri.Mohan and SCC 2015 (8) Page No.378 -
T.Vasanthakumar V/s.Vijayakumari and the recent Judgment delivered
16 CC.11469/2019(J)
in Crl. Appeal No.508/2019 - Rohit Bhai Jeevanlal Patel V/s.State of
Gujarath and another. The ratio is that the cheque shall be presumed to
be for consideration unless and until the court forms a belief that the
consideration does not exist or considers the nonexistence of
consideration was tenable that a prudent man would under no
circumstances act upon the plea that the consideration does not exist.
On perusal of Ex.P2, it clearly shows that the signature, the amount in
digits and words are written in same ink and the name of complainant
and date on the cheque are written with different ink. However as per
Section 20 of the N.I.Act, if the person signs and delivers Negotiable
Instrument and it is left incomplete and thereby he authorizes the
holder to complete the Negotiable Instrument and thereby he is liable
for the amount mentioned in the Negotiable Instrument. In the
Judgment rendered by the Hon'ble Supreme Court of India in Bir
Singh V/s.Mukesh Kumar reported in AIR 2019 SC 2446, it was held
by the Hon'ble Apex Court that "If a signed blank cheque is voluntarily
presented to a payee, towards some payment, the payee may fill up the
amount and other particulars. This in itself would not invalidate the
cheque. The onus would still be on the accused to prove that the cheque
was not in discharge of a debt or liability by adducing evidence. Even a
blank cheque leaf, voluntarily singed 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."
Therefore there is nothing on record to disbelieve the case of the
complainant.
17 CC.11469/2019(J)
16. The Hon'ble Supreme Court of India in the case of
Rangappa Vs. Mohan reported in 2011 (11) SCC 441 held as under;
The presumption mandated by Section 139 of N.I.Act does
indeed include the existence of legally enforceable debt or
liability. It is rebuttable presumption and it is open to the
accused to raise a defence wherein the existence of legally
enforceable debt or liability can be contested. However there
can be no doubt that there is an initial presumption which
favours the complainant. Section 139 of the Act is an
example of reverse onus clause that has been included in
furtherance of the legislative objective of improving the
credibility of negotiable instruments.
Therefore the as per the presumption U/s139 of N.I.Act, if
the cheque and signature are admitted then it shall be presumed
that there is legally enforceable debt.
17. The Hon'ble Supreme Court of India in the case of Rohit
Bhai Jeevanlal Patel Vs. State of Gujarath and another reported in
(2019) 18 SCC 106 observed at para No.14 and 17 as under:
14. So far the question of existence of basic ingredients for
drawing of presumption under Sections 118 and 139 the NI
Act is concerned, apparent it is that the accusedappellant
could not deny his signature on the cheques in question that
had been drawn in favour of the complainant on a bank
account maintained by the accused for a sum of Rs. 3 lakhs
each. The said cheques were presented to the Bank
18 CC.11469/2019(J)
concerned within the period of their validity and were
returned unpaid for the reason of either the balance being
insufficient or the account being closed. All the basic
ingredients of Section 138 as also of Sections 118 and 139
are apparent on the face of the record. The Trial Court had
also consciously taken note of these facts and had drawn the
requisite presumption. Therefore, it is required to be
presumed that the cheques in question were drawn for
consideration and the holder of the cheques i.e., the
complainant received the same in discharge of an existing
debt. The onus, therefore, shifts on the accusedappellant to
establish a probable defence so as to rebut such a
presumption.
17. In the case at hand, even after purportedly drawing the
presumption under Section 139 of the NI Act, the Trial
Court proceeded to question the want of evidence on the
part of the complainant as regards the source of funds for
advancing loan to the accused and want of examination of
relevant witnesses who allegedly extended him money for
advancing it to the accused. This approach of the Trial
Court had been at variance with the principles of
presumption in law. After such presumption, the onus
shifted to the accused and unless the accused had discharged
the onus by bringing on record such facts and circumstances
as to show the preponderance of probabilities tilting in his
favour, any doubt on the complainant's case could not have
been raised for want of evidence regarding the source of
19 CC.11469/2019(J)
funds for advancing loan to the accusedappellant. The
aspect relevant for consideration had been as to whether the
accusedappellant has brought on record such
facts/material/circumstances which could be of a
reasonably probable defence.
It is clear from the aforesaid decision that once the presumption is
raised U/s 139 of N.I.Act, the source of income of the complainant
could not be questioned unless the accused discharges the onus by
bringing on record such facts and circumstances as to show the
preponderance of probabilities tilting in his favour.
18. The Hon'ble Supreme Court of India in its latest case of
M/s. Kalamani Tex v. P. Balasubramanian reported in 2021 SCC
OnLine SC 75 observed at para No.14 to 16 as under:
14. Adverting to the case in hand, we find on a plain
reading of its Judgment that the trial Court completely
overlooked the provisions and failed to appreciate the
statutory presumption drawn under Section 118 and Section
139 of NIA. The Statute mandates that once the signature(s)
of an accused on the cheque/negotiable instrument are
established, then these 'reverse onus' clauses become
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him.
This point of law has been crystalized by this Court in
Rohitbhai Jivanlal Patel Vs. State of Gujarat, (2019) 18 SCC
106 in the following words:
20 CC.11469/2019(J)
"In the case at hand, even after purportedly drawing
the presumption under Section 139 of the NI Act, the trial
Court proceeded to question the want of evidence on the part
of the complainant as regards the source of funds for
advancing loan to the accused and want of examination of
relevant witnesses who allegedly extended him money for
advancing it to the accused. This approach of the Trial Court
had been at variance with the principles of presumption in
law. After such presumption, the onus shifted to the accused
and unless the accused had discharged the onus by bringing
on record such facts and circumstances as to show the
preponderance of probabilities tilting in his favour, any
doubt on the complainant's case could not have been raised
for want of evidence regarding the source of funds for
advancing loan to the appellantaccused....."
15. Once the 2nd Appellant had admitted his
signatures on the cheque and the Deed, the trial Court
ought to have presumed that the cheque was issued as
consideration for a legally enforceable debt. The trial Court
fell in error when it called upon the Complainant
Respondent to explain the circumstances under which the
appellants were liable to pay. Such approach of the Trial
Court was directly in the teeth of the established legal
position as discussed above, and amounts to a patent error
of law.
21 CC.11469/2019(J)
16. No doubt, and as correctly argued by senior
Counsel for the appellants, the presumptions raised under
Section 118 and Section 139 are rebuttable in nature. As
held in M.S.Narayana Menon Vs. State of Kerala, (2006) 6
SCC 39, which was relied upon in Basalingappa (supra), a
probable defence needs to be raised, which must meet the
standard of "preponderance of probability", and not mere
possibility. These principles were also affirmed in the case
of Kumar Exports (supra), wherein it was further held that
a bare denial of passing of consideration would not aid the
case of accused.
Therefore it is clear from the above judgments that the accused
has to raise a probable defence and prove it by adducing evidence,
which must meet the standard of preponderance of probabilities.
Unless the same has been done, doubt can not be raised on the case of
the complainant.
19. The Hon'ble Supreme Court of India in its latest case of
Tedhi Singh v/s Narayan Dass Mahant in Crl Appeal No.362/2022
arising out of SLP (Crl) No.1963/2019 dated 7.3.2022 observed at para
No.9 as under:
"The Trial Court and First Appellate Court have noted that
in the case u/sec.138 of N.I Act, the complainant need not
show in the first instance that he had the capacity. The
proceedings u/sec.138 of N.I Act is not a civil suit. At the
time when the complainant give his evidence unless a case is
22 CC.11469/2019(J)
set up in the reply notice to the statutory notice sent, that
the complainant did not have the fair wherewithal, it can
not be expected of the complainant to initially lead evidence
to show that he had the financial capacity. To that extent
the courts in our view were right in holding on those lines.
However, the accused has the right to demonstrate that the
complainant in a particular case did not have the capacity
and therefore, the case of the accused is acceptable which he
can do by producing independent materials, namely, by
examining his witnesses and producing documents. It is
also open to him to establish the very same aspect by
pointing to the materials produced by the complainant
himself. He can further, more importantly, achieve this
result through the cross examination of the witnesses of the
complainant. Ultimately, it becomes the duty of the courts
to consider carefully and appreciate the totality of the
evidence and then come to a conclusion whether in a given
case, the accused has shown that the case of the
complainant is in peril for the reason that the accused has
established a probable defence.
As per the observations made by the Hon'ble Supreme Court of
India in all the above decisions, it is clear that as per the presumption
U/s139 of N.I.Act, if the cheque and signature are admitted then it
shall be presumed that there is legally enforceable debt. The accused
has to raise a probable defence and prove it by adducing evidence,
which must meet the standard of preponderance of probabilities.
Unless the same has been done, doubt can not be raised on the case of
23 CC.11469/2019(J)
the complainant. Once the presumption is raised U/s 139 of N.I.Act, the
source of income of the complainant could not be questioned unless the
accused discharges the onus by bringing on record such facts and
circumstances as to show the preponderance of probabilities tilting in
his favour. The complainant need not show in the first instance that he
had the financial capacity at the time when the complainant give his
evidence. The proceedings u/sec.138 of N.I Act is not a civil suit. Unless
a case is set up in the reply notice to the statutory notice sent, that the
complainant did not have the financial capacity, it can not be expected
of the complainant to initially lead evidence to show that he had the
financial capacity.
20. On perusal of the evidence, the Court has raised
presumption U/s.139 of N.I.Act in favour of the complainant as the
complainant has complied all the ingredients of 138 of N.I.Act. The
presumption would operate in favour of the complainant unless the
contrary is proved. The onus is on the accused No.2 to prove his
defence and rebut the presumption. The accused No.2 has not taken
any specific defence. If at all the cheque in question was misused by the
complainant, then the accused No.2 would have taken legal action
against the complainant which has not been done. The accused No.2
did not even bother to issue reply to the legal notice even though the
notice was served on him. The accused No.2 is having the knowledge of
the proceedings at all times. Therefore the overall evidence on record
gave the impression that the accused No.2 issued the cheque in favour
of the complainant in respect of the transaction as averred in the
complaint.
24 CC.11469/2019(J)
21. For the reasons mentioned herein above, it is crystallized
that the accused No.2 has utterly failed to prove that there was no
existence of legally enforceable debt/liability between him and the
complainant and he has not at all issued the instant cheque towards the
discharge of legally enforceable debt of Rs.1,00,000/. On the other
hand, the complainant has proved that the accused No.2 issued the
cheque for the legally enforceable debt; the cheque was dishonored
due to the reason Funds Insufficient and the notice issued by him was
served on the accused No.2. The complainant proved his case beyond
reasonable doubt. The accused No.2 failed to rebut the statutory
presumptions U/s.118(a) & (b) and 139 of the N.I.Act. Accordingly the
accused No.2 is found guilty for the offence punishable U/s.138 of the
N.I.Act. Hence, I proceed to answer the Point No.1 in Affirmative and
Point No.2 in the Negative.
22. Point No.3 : In view of the reasons assigned in Point No.1
and 2, it is clear that the transaction is proved and the transaction is
made in the year 2019. The complaint was also filed in the year 2019.
The order sheet shows the conduct of the accused No.2. It shows that
the accused No.2 had played all the tactics to delay the proceedings
and to delay in making the payment to the complainant. As per the
provision U/s 138 of NI Act the Court has power to impose fine up to
double the cheque amount. That apart if the complainant would have
kept the said amount in the bank, it would have fetched some interest.
Therefore considering the facts and circumstances of the case, I
proceed to pass the following:
25 CC.11469/2019(J)
ORDER
As per the provisions of Sec.255(2) Cr.P.C. the accused No.2 representing the accused No.1 is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine Rs.1,15,000/ (Rupees One Lakh Fifteen Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.1,10,000/ (Rupees One Lakh Ten Thousand Only). The remaining balance amount of Rs.5,000/ is to be forfeited to the State.
In default of payment of the fine amount accused No.2 shall undergo simple imprisonment for three months.
The personal bond executed by the accused No.2 is hereby stands cancelled and cash surety of Rs.1,000/ furnished by the accused No.2 shall be refunded to him after expiry of appeal period.
The copy of the judgment shall be furnished to the accused No.2 at free of cost.
(Dictated to the Stenographer, transcript thereof is computerized and printout taken by him, is verified and then pronounced by me in Open Court on this the 26 th day of July2022.) (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
26 CC.11469/2019(J) ANNEXURE Witnesses examined for the Complainant: PW.1 LoA holder Sri. Sukhraj Bhandari Documents marked for the Complainant: Ex.P.1 Authorization letter Ex.P.2 Cheque Ex.P.2a Signature of the accused Ex.P.3 Bank endorsement Ex.P.4 Legal Notice Ex.P.5 6 Postal Receipts Ex.P.6 to 11 Postal acknowledgements Witnesses examined For Defence: Nil Documents marked for Defence: Nil (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
27 CC.11469/2019(J) 26/7/2022 (Judgment Pronounced in the Open Court Vide Separate ) ORDER As per the provisions of Sec.255(2) Cr.P.C. the accused No.2 representing the accused No.1 is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine Rs.1,15,000/ (Rupees One Lakh Fifteen Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.1,10,000/ (Rupees One Lakh Ten Thousand Only). The remaining balance amount of Rs.5,000/ is to be forfeited to the State.
28 CC.11469/2019(J) In default of payment of the fine amount accused No.2 shall undergo simple imprisonment for three months.
The personal bond executed by the accused No.2 is hereby stands cancelled and cash surety of Rs.1,000/ furnished by the accused No.2 shall be refunded to him after expiry of appeal period.
The copy of the judgment shall be furnished to the accused No.2 at free of cost.
XV Addl.CMM., Bengaluru.