Bangalore District Court
M/S. Aviratha Chits Pvt. Ltd vs Mr.Venugopal.N S/O Muniswamy.A on 19 May, 2023
C.C.NO.17998/2020
0
KABC030614732020
Presented on : 07-12-2020
Registered on : 09-12-2020
Decided on : 19-05-2023
Duration : 2 years, 5 months, 12 days
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LLB.,LL.M
XXVIII A.C.M.M, Bengaluru City.
DATED; THIS THE 19 th DAY OF MAY-2023
C.C.NO.17998/2020
Complainant: M/s. Aviratha Chits Pvt. Ltd.,
Regd and Admn office at No.#479,
Tanishaka, 1st Floor, 6th Phase,
1st Stage, Thimmaiah Road,
WOC Road, Rajaji Nagar,
Bangalore-560010. Rep by its
Director Sri.Shashi Kumar.K.M
S/o. Mahabala Bhatta, Age: 48 years.
Bangalore-560011.
As per the order dated: 10.10.2022
Complainant company
Rep by its GPA holder,
Sri.Murugesh Gomadi
S/o Sri. Basavaraju Revannappa Gomadi,
Age: 43 years.
(By Sri.Suresh Subbaiah.,Adv.,)
C.C.NO.17998/2020
1
V/s
Accused: Mr.Venugopal.N S/o Muniswamy.A
Age: Major, No.61/4, 1st Main, Subbanna
Layout, Padmanabha Nagar, BSL 2nd Stage,
Bangalore-560070.
(By Sri.Arun Bangera,Adv.,)
:JUDGMENT:
This case arises out of the private complaint filed under section 200 of Cr.P.C., for an offence punishable under section 138 of N.I.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 a private limited company duly incorporated under the Indian Companies Act, 1956 having its registered office as mentioned in the cause title being a legal entity and it has right to recover the money due from the subscribers and the guarantors. It is further stated that the one Smt.Veena.B subscribed chit group No.AVO5401/40 conducted by the complainant's for the chit value of Rs.5,00,000/- which is payable at Rs.12,500/- each month for 40 months. It is further stated that in auction Smt.Veena.B have offered the highest bidder and she received the prized amount by offering guarantors for the due payment of entire future monthly installment due by her. In the said context, several documents were executed in favour of C.C.NO.17998/2020 2 complainant's company as per law such as on Demand Promissory Note, Consideration Receipt, Surety Proposal Form etc., for the satisfaction of the company, thereby making the liability of the payment of future monthly installment, in the said context accused is also one of the surety to the future chit installments due.
3. It is further stated that after receiving the prized amount by Smt.Veen.B and she was irregular in paying chit installments and thereafter she came a defaulter inspite of several remainders, request and visit of officials of the complainant. Further the complainant also insist to the accused under the capacity of surety to make payment. Further after receiving the prized amount subscriber and the accused are irregular in paying the chit installment and thereafter became defaulter inspite of several remainders. Further finally, the accused have issued a cheque bearing No.953009 on 01.12.2019 for a sum of Rs.2,56,157/- drawn on Canara Bank., Sarakki Layout, Bangalore-560070 in favour of the complainant towards the discharge of the said installment amount due. The assurance and promise of the accused, the complainant had presented the said cheque on 12.12.2019 for realization through its banker the Corporation Bank, Basaweshwara Nagar Branch, Bangalore-44. But the said cheque was dishonored on 12.12.2019 for the reasons "Funds Insufficient" in the account of the accused, which came C.C.NO.17998/2020 3 to on the complainant on 13.12.2019. Thereafter the complainant issued a legal notice on 10.01.2020 through its counsel by RPAD calling upon the accused to repay the amount. The said notice was returned on 11.01.2020 with a reason "Address left". After receipt of the legal notice the accused neither reply the notice nor paid the cheque amount to the complainant. As such the accused has committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 29.01.2020.
4. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R.No.3804/2020. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 05.12.2020 to register the case in Reg.No.III.
5. Thereafter, summons was issued to the accused and he has appeared before the court through counsel 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.
6. The complainant's in support of its case, have C.C.NO.17998/2020 4 examined its Director as PW.1 and got marked total 8 documents at Ex.P.1 to 8 and closed its side.
7. 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 Director Sri.Shashi Kumar.K.M, due to change of circumstances they would like to substitute GPA holder Sri.Murugesh Gomadi during the course of trial. Accordingly on 10.10.2022 said application was allowed and another authorized representative Sri.Murugesh gomadi represented the complainant company. The complainant's have examined said GPA holder as PW.2 and got marked the documents at Ex.P.9 to 15 and closed its side.
8. 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 against him. In his defence the accused has examined as DW.1, but failed to mark any documents.
9. I have heard the arguments on both the sides and perused the written argument filed by the leaned counsel for the complainant and also perused the material placed on record.
10. Upon hearing the arguments and on perusal of the material placed on record, the following points C.C.NO.17998/2020 5 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.4, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that cheque-Ex.P.4 was dishonored for the reason "Funds Insufficient" in the account of the accused and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order or sentence?
11. 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:
12. POINT NO.1 AND 2: These points are inter- related to each other and finding given on any one C.C.NO.17998/2020 6 point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken both points together for common discussion. The case of the complainant is that they were acquainted with the accused. Further the complainant is a private limited company duly incorporated under the Indian Companies Act, 1956 having its registered office as mentioned in the cause title of the complaint. Further one Smt.Veena.B subscribed the chit group No.AVO5401/40 conducted by the complainant's for the chit value of Rs.5,00,000/- which is payable at Rs.12,500/- each month for 40 months. Further in auction Smt.Veena.B have offered the highest bidder and she received the prized amount by offering guarantors for the due payment of entire future monthly installment due by her. In the said context, several documents were executed in favour of complainant's company as per law such as on Demand Promissory Note, Consideration Receipt, Surety Proposal Form etc., for the satisfaction of the company, thereby making the liability of the payment of future monthly installment, in the said context the accused is also one of the surety to the future chit installment due.
13. Further after receiving the prized amount by Smt.Veen.B and she was irregular in paying chit installment and thereafter she came defaulter inspite of several remainders, request and visit of officials of the C.C.NO.17998/2020 7 complainant. Further the complainant also insist to the accused under the capacity of surety to make payment. Further after receiving the prized amount subscriber and the accused are irregular in paying the chit installment and thereafter became defaulter inspite of several remainders. Further finally, the accused have issued a cheque bearing No.953009 on 01.12.2019 for a sum of Rs.2,56,157/- drawn on the Canara Bank., Sarakki Layout, Bangalore-560070 in favour of the complainant towards the discharge of the said installment amount due. The assurance and promise of the accused, the complainant had presented the said cheque on 12.12.2019 for realization through its banker the Corporation Bank, Basaweshwar Nagar Branch, Bangalore. But the said cheque was dishonored on 12.12.2019 for the reasons "Funds Insufficient" in the account of the accused, which came to on the complainant on 13.12.2019. Thereafter the complainant issued a legal notice on 10.01.2020 through its counsel by RPAD calling upon the accused to repay the amount. The said notice was returned on 11.01.2020 with a reason "Address left". After receipt of the legal notice the accused neither reply the notice nor pay the cheque amount. As such, the accused has committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
C.C.NO.17998/2020 8
14. In support of the case, the complainant's have examined its Director and GPA holder as P.W.1 and 2 and 15 documents were marked at Ex.P.1 to 15. In the chief examination P.W.1 and 2 have repeated the contents taken by the complainant in the complaint. Ex.P.1 is the certified copy of the Incorporation Certificate. Ex.P.2 is the Authorization letter given to P.W.1. Ex.P.3 is the computerized copy of the Account Statement. Ex.P.4 is the cheque issued by the accused in favour of the complainant on 10.12.2019 for a sum of Rs.2,56,157/-. Ex.P4(a) is the signature of the accused. Ex.P.5 is the bank memo dated 12.12.2019 informing of the dishonor of the cheque for the reasons Funds Insufficient in the account of the accused. Ex.P.6 is the office copy of legal notice. Ex.P.6(a) is the postal receipt. Ex.P.7 is the returned postal cover. Ex.P.7(a) is the returned notice. Ex.P.8 is the complaint. Ex.P.9 is the certified copy of the GPA executed in favour of the PW.2. Ex.P.10 is the certified copy of the minutes of meeting. Ex.P.11 is the Incorporation certificate. Ex.P.12 is the surety proposal Form. Ex.P.13 is the Chit Agreement. Ex.P.14 is the Payment voucher. Ex.P.15 is the Promissory Note.
15. The accused in order to prove his defence, he has examined himself as DW.1 and no documents were marked. In his evidence he has deposed that the complainant's have filed a false case against him C.C.NO.17998/2020 9 alleging that in order to repayment of chit installments he had issued a cheque for discharging of liability. Further deposed that he has not borrowed any amount from the complainant at any point of time there is no relationship of creditor and debtor between himself and the complainant. He has not borrowed any amount from the complainant issue of cheque does not arise. The cheque Ex.P.1 does not belongs to him, he has not issued any cheque including Ex.P.1 to the complainant. The signature on the Ex.P.1 not pertaining to him. Further deposed that as there was no debt or liability. The complainant failed to established where the complainant claimed to have been received the cheque, failed to prove the signature bearing on Ex.P.1 which does not belongs to him. He is not liable to pay any amount in any way to the complainant. He is not liable to pay any amount against Ex.P.1 the alleged cheque. The complainant's by fabricating the documents filed this false case. Hence, he prays to dismiss the complaint and acquit him.
16. The accused has taken the contention that he had not issued any cheque in favour of the complainant company. Further the complainant's have misused the said cheque and filed this false complaint against the accused. The accused in his defence has disputed Ex.P.4-cheque having been issued by him and same is belongs to his bank account. But he does not seriously C.C.NO.17998/2020 10 dispute his signature on the said cheque. Further he contended that he has never admitted regarding repayment of amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay the his outstanding balance amount of Rs.2,56,157/-.
17. 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. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused towards of discharge of the said payment, the accused had issued the cheque-Ex.P.4 in favour of the complainant. Further argued that after the repeated request made by the complainant, the accused has not paid any amount to the complainant. He further argued that the accused has not denied the cheque-Ex.P.4 being drawn on his account. When the signature is not seriously disputed, the 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 evidence of the said witness. The defence have failed to rebut the presumption under section 139 N.I.Act. The counsel for the complainant further argued that the accused has C.C.NO.17998/2020 11 failed to produce any believable evidence that the cheque and signature appearing on the cheque is not belongs to him. He further argued that under section 139 of N.I.Act, there is a presumption that the cheque has been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.4 being his cheque drawn on his account. The said presumption is available to the complainant.
18. Further he has argued that the accused has failed to prove the very fact that Ex.P.4 was not belongs to him and the cheque was misused by the complainant and filed this false case against him. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instrument is drawn on the date, for the 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 not given the cheque to the complainant. As such, very defence of the accused is not believable.
19. The learned counsel for the complainant has filed written argument. In his argument he has stated that the complainant company engaged chit business. While in the course of chit business one Smt.Veena.B who joined the chit group with complainant company, in C.C.NO.17998/2020 12 chit group No.AVO5401/40 chit value of Rs.5 lakhs and monthly installment of Rs.12,500/- each month for 40 months. In a chit auction subscriber Smt.Veena.B was successful bidder of the said chit group and she received the prize amount from the complainant company, for the future chit installment payment, the accused stood have guarantor to the said chit group in the name of Smt.Veena.B and the accused also signed the surety and surety proposal form and he undertake to clear the future installment amount that the accused is an Government employee as such he stood as a surety.
20. Further submitted that after receiving chit amount from the complainant company, the subscriber Smt.Veena.B become a defaulter to pay the monthly installment to the complainant company, inspite of repeated request and demand from the complainant company to the subscriber and the surety both are failed to pay monthly chit installment amount to the complainant company. After repeated request finally the accused agreed in the capacity of surety to clear the future chit installment amount due and accordingly he had issued cheque in question in favour of the complainant. On the words of the accused complainant presented the said cheque before the bank for encashment. But the said cheque was returned as funds insufficient. The accused issued the said cheque C.C.NO.17998/2020 13 to discharge the liability as a surety in favour of the complainant company.
21. It is further stated that the complainant company issued a legal notice on 10.01.2020 to the accused through RPAD calling upon to pay the cheque amount. In said RPAD notice was returned as addressee left. After issuance of legal notice the accused had not paid the cheque amount nor reply the notice. Hence, the complainant has filed this case before this court. After receiving the complaint this court recorded the sworn statement and issued summons to the accused. After service of the summons, the accused enlarged on bail. Thereafter court recorded the plea and accused as not pleaded guilty of the offence and claimed to be tried. It is further submits that the complainant has examined as PW.1 and initially marked Ex.P.1 to 7 and thereafter substituted the earlier GPA holder Mr.Murugesh Gomadi deposed the evidence and marked Ex.P.8 to 15, after completion of evidence, PW.2 was fully cross examined by the accused lengthy, but accused has nothing elicited in the mouth of PW.2 support his case. After closer of the PW.2 evidence, this court recorded the statement under section 313 of Cr.P.C of the accused. In the statement the accused denied all charges made against him. The accused adduced the evidence and not produced any documents, after closer of evidence C.C.NO.17998/2020 14 the case is posted for arguments. The complainant prove the case on beyond doubt that the accused is one of the guarantor to the chit group for the future chit installment for that the complainant produced the surety proposal form and marked as Ex.P.12, chit agreement Ex.P.13, on demand and promissory note as Ex.P.14 and 15. Further the complainant produced chit account statement to show that legal debt was due on the date of issue of cheque.
22. It is further stated that the accused himself has signed and delivered the cheque in favour of the complainant company on repayment of chit installment due. After dishonor of the cheque the complainant issued legal notice to the accused, inspite of this accused has not taken any legal action nor produced any documents before this court to disprove the same. The accused further defence that legal notice was not served to the accused. The notice sent through RPAD to the accused residential address and same was return, but accused on the date of transaction was residing in the cause title address and last known address notice was issued and same was admitted by the accused in his cross examination as such complainant duly served the notice to the accused. Further for discharge of offence, the accused has not produced any document to show that he was not residing in the cause title address, it is crystal clear that C.C.NO.17998/2020 15 the accused was very much residing in the cause title address.
23. It is further stated that accused has signed the surety proposal form as prescribed under the chit fund act as such for rebuttal, the accused not evidence nor produced any document to disprove the complaint against the accused. Further the accused taken a strange defence that the accused was not signed any document nor in cheque i.e., Ex.P.4 and 4(a) in favour of the complainant. The cheque was returned as insufficient fund not an signature differs. As such it is crystal clear that signature in the cheque belongs to the accused. Further the accused in a Government employee and he know all transaction. The accused has not taken any legal action on against the complainant. Further the accused also denied his own Vakalath signature in cross examination this shows that the accused only to escape the liability gave false evidence before this court and in support of this accused has not produced any documents/material before this court. Further the accused known the subscriber Smt.Veena.B for that he admitted in his cross examination. Hence, it is clear that the accused stood and stand as surety to Smt.Veena.B. The complainant proved the case to in all the ingredients of section 138 of N.I.Act, the complainant proved that there was a legal due amount standing as on the date C.C.NO.17998/2020 16 of the issue of the cheque and also the cheque was dishonored and the complainant has duly issued notice to the accused. Further the accused issued the cheque in question in favour of the complainant stood as a guarantor to the subscriber as such the defence taken by the accused or only to escape the liability and nothing else. Further the accused issued the cheque towards discharge legal enforceable debt and the accused failed to pay the cheque amount under the offence of section 138 of N.I.Act. Hence, he prays to convict the accused and suitable compensation may be ordered.
24. The learned counsel for the accused has argued that there was no legally enforceable debt/balance due to the complainant from the accused for which the cheque-Ex.P.4 was issued. So also he has taken up the defence that the accused had not issued any cheque in favour of the complainant. Further signature appearing on the cheque is not belongs to the accused. Further argued that accused not taken any amount from the complainant company. Hence, question of repayment of the amount and issuance of the cheque as contended by the complainant does not arise at all. 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 C.C.NO.17998/2020 17 came to be issued. On looking it Ex.P.4-cheque the signature of the accused is not admitted by the accused. The complainant's created all the documents and filed this false case against the accused. The complainant not take any legal action against the subscriber. The complainant colluded with the said subscriber filed a false case against the accused. Therefore, from the evidence placed on record, the very granting of bid amount 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.
25. 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 seriously disputed he had issued the said cheque in favour of the complainant. It is not disputed that the complainant is a Private Ltd,. Chit company and the accused is a Government employee. While according to the complainant, the complainant is a company incorporated under the Indian companies Act and they are in business of promoting and conducting the chits as per the provisions of Chit Funds Act. Further the accused is a guarantor of subscriber of one Smt.Veena.B for a chit group No.AVO5401/40 for a chit value of Rs.5,00,000/- payable at Rs.12,500/- per month over a period of 40 months. Further said C.C.NO.17998/2020 18 Smt.Veena.B became a successful bidder in auction and she has received a prize amount and also after the accused along with another guarantor and subscriber furnished the requisite necessary documents and other relevant documents. At the time of receiving the prized amount, the accused and said subscriber had undertaken to repay the future subscription amount to the complainant regularly. But the said subscriber became a defaulter in making payment towards the chit installments. The accused in order to payment of said outstanding liability had issued the said cheque in favour of the complainant towards discharge of said payment debt/amount. Whereas, the accused has contended that he had not issued any cheque in favour of the complainant. Further signature appearing on the said cheque not belongs to him. The accused has specifically denied having debt/liability and issued the cheque-Ex.P.4 on 01.12.2019 towards the discharge of any debt/liability. The complainant has misused the cheque and other documents and a false complaint was filed.
26. 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's in order to prove its case, have C.C.NO.17998/2020 19 examined its Director and GPA holder as PW.1 and 2 and 15 documents were marked at Ex.P.1 to 15. In chief examination, they have repeated the averments made by the complainant's in the complaint. In the present case, the accused has not seriously disputed Ex.P.4 being his cheque drawn on his account. Further during the cross examination of DW.1 he has specifically admits that the cheque in question is belongs to his bank account. The said presumption is available to the complainant. In order to attract the offence punishable under section 138 of N.I.Act, the complainant's is firstly required to prove the existence of a legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has submitted that from the evidence of PW.1 and 2 it is established that the accused towards the discharge of the said amount Ex.P.4-cheque came to be issued in favour of the complainant.
27. Under Section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforcible debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which Ex.P.4 was issued. In order to prove his defence, he has adduced his C.C.NO.17998/2020 20 evidence as DW.1. But he has failed to produce any documents regarding signature appearing on the cheque is not belong to him. Further he has failed to produce any documents shows that signatures appearing on Ex.P.8 to 15 is also not belongs to him. PW.2 during his cross-examination has specifically denied the suggestions made to him that Ex.P.4 was not belongs to the accused and signature also not belongs to the accused. Further in this case the complainant was presented the cheque-Ex.P.4 to the bank for encashment. The said cheque was return as Insufficient funds in the account of the accused. If the cheque is not belongs to the accused and signature is also not belongs to the accused, then the cheque was returned as signature differs. But in this case thr cheque was returned as funds insufficient. As such it is crystal clear that the cheque is belongs to the accused as well as signature is also belongs to the accused. Further the accused at every liberty to take legal action against the complainant if the signature is not belongs to him and further he is every opportunity to send a cheque to handwriting expert/forensic for identification of the signature. But the accused no action taken on this regard. This is clearly goes to show that the cheque and signatures appearing on the cheque and other documents are belongs to the accused. The accused in order to escape from his liability take this C.C.NO.17998/2020 21 defence.
28. 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 the accused he had not given any cheque to the complainant. Further signatures appearing on the cheque and other documents are not belongs to him. Except, said defence, he has not produced any materials to prove such defence. If he had not given any cheque to the complainant and not signed the any documents, 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 said cheque and documents. 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 a Government employee and having knowledge of the financial C.C.NO.17998/2020 22 transaction as well as legal consequences, why he has not taken any legal action against the complainant and why he has given the cheque to the complainant without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the cheque. Moreover, immediately after the alleged cheque misused by the complainant he not lodge complaint before concerned police station. No steps have been taken to receive back the blank signed cheque, after he came to know about the same.
29. Once issuance of 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 Rangappa V/S Mohan (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. Of 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, C.C.NO.17998/2020 23 since the complainant is in possession of cheque- Ex.P.4 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.
30. In the case of K.S.Ranganatha V/S Vittal Shetty, reported in 2021 SCC Online SC 1191, a three judges' bench of the Hon'ble 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.
31. In the case of M/s Kalemani Tax V/s Balan (Crl.A.No.123/2021), (LL 2021 P.75) decided on 10.02.2021, a three judges' bench of the Hon'ble C.C.NO.17998/2020 24 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.
32. Applying the above said principles to the present case and before considering the point whether the 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.
33. 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 reason 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 the cheque is not belongs to him and signatures appearing on the cheque as well as other C.C.NO.17998/2020 25 documents are not belongs to him. The said cheque and documents was misused by the complainant. In this regard he has not produced any piece of evidence.
34. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing of a false case is not possible. The accused admittedly is a Government employee and also having knowledge of business. It is implies, he is conversant with financial transaction and consequences. If the complainant misused the said cheque and had not return the same, inspite of collecting cheque leaves from him, as a prudent man, the accused should have inquired with the complainant 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.4-cheque. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given the complaint to the concerned police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of the cheque against the complainant and said cheque is not belongs to him. It appears, just to escape from his legal liability, he has taken such contentions without any C.C.NO.17998/2020 26 valid basis.
35. Moreover, the complainant's have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment of said 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.4 is the cheque drawn on account of 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/liability. From the evidence of P.W.1 and 2 and also cheque return memo-Ex.P.5 it is established that the cheque was dishonored for the reasons "Funds Insufficient'' in the account of the accused. A legal notice being issued as per Ex.P.6 within one month from the date of dishonour of the cheque is also not in dispute. In the case on hand the accused has not disputed the receipt of the legal notice. But the accused neither reply the notice nor pay the cheque amount. When the accused has not disputed, the notice sent to the correct address is sufficient compliance of under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
36. It is not the contention of the accused that thereafter he has repaid the cheque amount within C.C.NO.17998/2020 27 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 has committed an offence punishable under section 138 of Negotiable Instruments Act. The present 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, (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 wants 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.
37. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan C.C.NO.17998/2020 28 (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, 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 their behalf.
38. The Hon'ble Apex Court in K.Bhaskaran V/s Sankaran Vaidhyan Balan and another (1999 Cri.L.J. 4608) held that if the accused denies issue of cheque although owned his signature therein, the presumption arises that cheque was made or drawn for consideration on the date mentioned in cheque. The holder of cheque presumed to have received it for discharge of liability of the drawer.
39. As per the version of the accused he has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that the accused has issued cheque- Ex.P.4 and even after the accused has not repaid the cheque amount the getting of receipt of notice.
C.C.NO.17998/2020 29 However, in any manner as the complainant's 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.4 in order to pay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him that the cheque-Ex.P.4 was not belongs to him and signatures appearing on the cheque as well as other documents are not belongs to him. 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.
40. PW.1 and 2 in their evidence have specifically stated that the accused is a guarantor of one Smt.Veena.B. Further the accused furnished the requisite necessary and relevant documents. But the subscriber became a defaulter in making payment towards the chit installments. The accused had towards C.C.NO.17998/2020 30 discharge of outstanding balance issued the cheque- Ex.P.4 as repayment of amount 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. 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 defense. With the above reasons, I answer point No.1 and 2 in the Affirmative.
41.POINT NO.3 AND 4: In order to avoid repetition of facts, these 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. The cheque- Ex.P.4 drawn on the account of the accused is not in dispute. The said 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.6 is sent by the complainant, but same has been returned as addressee left, but the accused neither replay to the C.C.NO.17998/2020 31 notice nor paid the cheque amount to the complainant is further admitted. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given of 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 service of the notice, he has not paid the cheque amount. Hence, the present complaint came to be filed before the court on 29.01.2020 within the period of one month from the date of cause of action. On perusal of Ex.P.8 to 15 it is clearly reveals that the accused along-with subscriber and another one guarantor have executed the said documents in favour of the complainant.
42. While discussing the point No.1 and 2, this court has already observed that the complainant's 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. The accused is found to have committed an offence punishable under section 138 of N.I Act. Accordingly, I answer point No.3 and 4 in the Affirmative.
43. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant's have proved it's case. The C.C.NO.17998/2020 32 accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. 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 an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.2,60,157/- (Rupees two Lakhs sixty thousand one hundred and fifty seven only) to the complainant company.
It is further ordered that out of the said fine amount an amount of Rs.2,56,157/- (Rupees two Lakhs fifty six thousand one hundred and fifty seven only) shall be paid to the complainant company as compensation as per Section 357(1)(b) of C.C.NO.17998/2020 33 Cr.P.C., and remaining amount of Rs.4,000/- (Rupees four thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of one year.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 19 th day of May 2023) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2023.05.20 17:45:30 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Shashi Kumar.K.M PW.2 : Sri.Murugesh Gommadi.
List of documents marked on behalf of the complainant:
Ex.P.1 : Certified copy of the Incorporation Certificate. Ex.P.2 : Authorization letter given to the PW.1.
Ex.P.3 : Chit agreement.
Ex.P.4 : Cheque.
Ex.P.4(a) : Signature of the accused.
Ex.P.5 : Bank endorsement.
Ex.P.6 : Office copy of legal notice.
Ex.P.6(a) : Postal receipt.
Ex.P.7 : Returned postal cover.
Ex.P.7(a) : Returned notice.
Ex.P.8 : Complaint.
C.C.NO.17998/2020
34
Ex.P.9 : Certified copy of the GPA executed in favout of
the PW.2.
Ex.P.10 : Certified copy of the minutes of meeting.
Ex.P.11 : Incorporation certificate.
Ex.P.12 : Surety proposal form.
Ex.P.13 : Chit Agreement.
Ex.P.14 : Payment voucher.
Ex.P.15 : Promissory Note.
List of witnesses examined on behalf of the accused:
DW.1 : Mr.M.Venugopal List of documents marked on behalf of the accused:
-Nil-
Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2023.05.20 17:45:39 +0530 XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru. C.C.NO.17998/2020 35 19.05.2023 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.2,60,157/- (Rupees two Lakhs sixty thousand one hundred and fifty seven only) to the complainant company.
It is further ordered that out of the said fine amount an amount of Rs.2,56,157/- (Rupees two Lakhs fifty six thousand one hundred and fifty seven only) shall be paid to the complainant company as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.4,000/- (Rupees four thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of one year.
XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.