Bangalore District Court
S/O Seetharamarao vs S/O Purushotham on 25 May, 2022
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Crl.A.No.214/2018
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Crl.A.No.214/2018
KABC010041282018
IN THE COURT OF THE LII ADDL. CITY CIVIL &
SESSIONS JUDGE, BANGALORE (CCH-53)
.
th
Dated this the 25 day of May, 2022
PRESENT
Sri.B.G.Pramoda, B.A.L., LL.B.,
LII Addl. City Civil & Sessions Judge,
Bangalore.
Crl.A.No.214/2018
Accused/ Sri.K.S.Venkatesh
Appellant : S/o Seetharamarao,
Aged about 49 years,
R/at No.8, Subbanna Compound,
Subbanna Garden,
Doddabommasandra,
Bengaluru-560094.
(By Sri.C.R.Venkatesh, Advocate)
-V/S-
Complainant/ Sri.Dashrath Kumar
Respondent: S/o Purushotham,
Aged about 37 years,
R/at No.6, Medharahalli,
Abbigere Main Road, Near
Shettihalli Railway Gate,
Banawara Post, Bengaluru-560054.
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Crl.A.No.214/2018
JUDGMENT
This appeal is filed by the Appellant praying to set aside the judgment dated 10.01.2018 passed by the learned 12th ACMM, Bengaluru in C.C.No.35381/2014 and praying to acquit him in the said case.
2. The appellant of this appeal was the accused before the Trial Court. The respondent of this appeal was the complainant before the Trial court. The rank of the parties to this appeal will be hereinafter referred to with the same rank as assigned to them before the trial court for the sake of convenience.
3. The brief facts which leads to file this appeal in nutshell are as follows:
The complainant had filed private complaint before the trial court bearing PCR No.20241/2014 against the accused by alleging the commission of offence punishable u/Sec.138 of N.I. Act. It is alleged in the private compliant before the trial court that the complainant and accused are known to each other. The accused had obtained hand loan of Rs.3,50,000/- from the complainant by way of cash during July 2011 for his family, business and other legal necessities. The accused has promised to repay the said amount within one year. After receiving the hand loan amount, the accused has executed the receipt on 09.07.2011. The accused has not repaid the loan 3 Crl.A.No.214/2018 amount within one year as promised by him. In the receipt dated 09.07.2011, the accused has agreed to pay the bank interest on the received amount upto the date of payment of the loan amount. In the month of September 2014, the accused has agreed to repay the loan amount with bank interest and issued cheque bearing No.14616, dated 22.10.2014 for Rs.4,50,000/- to the complainant drawn on The Shamrao Vithal Co-operative Bank Ltd., Yeshwanthpura Branch, Bengaluru, towards payment of hand loan amount due by him with interest. As per the instructions of the accused, the complainant had presented the said cheque for realization through his banker on 07.11.2014. The said cheque was dishonoured by the accused banker on 08.11.2014 with endorsement "Payment stopped by drawer". The complainant had issued a legal notice dated 03.12.2014 to the accused through RPAD to the residential and office address of the accused. The accused has given untenable reply to the said notice and he has not paid the cheque amount. Hence, the complainant has alleged before trial court that the accused had committed the offence punishable u/Sec.138 of N.I. Act.
4. After filing of the complaint, the trial court took cognizance for the offence punishable u/Sec.138 of N.I.Act against the accused. Thereafter the trial court has recorded the sworn statement of the complainant. The complainant had adduced his sworn statement as C.W.1 before the trial court.
The trial court after perusing the private compliant, sworn statement of the complainant and the documents produced by 4 Crl.A.No.214/2018 him was pleased to registered criminal case against the accused in CC.No.35381/2014 for the offence punishable u/Sec.138 of N.I. Act and issued summons to the accused.
5. The accused had appeared before the trial court after the service of summons and he was enlarged on bail. On appearance of the accused before the trial court, the trial court had recorded the plea of accused for the offence u/Sec.138 of N.I.Act. The accused pleaded not guilty and claimed to be tried. Hence, trial court has posted the matter for evidence of the complainant.
6. In order to prove the allegations made in the complaint, the complainant had adduced his oral evidence as P.W.1. P.W.1 had produced 9 documents and got them marked as Ex.P.1 to P.9. The complainant has examined one witness on his behalf as P.W.2. Thereafter, the trial court had recorded the statements of the accused u/Sec.313 of Cr.P.C. The accused has led his defence evidence as D.W.1. Accused has produced 7 documents and got them marked as Ex.D.1 to D.7. Then, the Trial Court posted the matter for arguments.
7. The trial court, after hearing the arguments and after perusing the oral and documentary evidence was pleased to pass the judgment dated 10.01.2018 by convicting the accused for the offence punishable u/Sec.138 of N.I. Act. The trial court has sentenced the accused to pay fine of Rs.4,55,000/- and in default of payment of fine amount he shall 5 Crl.A.No.214/2018 undergo simple imprisonment for four months. The trial court has directed to pay Rs.4,50,000/- out of the said fine amount as compensation to the complainant and to forfeit remaining Rs.5,000/- amount towards fine. The accused being aggrieved by the said judgment of the trial court has preferred this appeal.
8. Grounds of appeal in nutshell as urged in the appeal memorandum are as follows:-
(a) The trial court has not considered the contention of the appellant that the complainant is a stranger to him and he has not availed hand loan of Rs.3,50,000/- from the complainant and he has not issued Ex.P.1 cheque to the complainant towards discharge of any debt or legal liability.
(b) The trial court has not considered the fact that one Ravindra Reddy has collected the signed blank cheques and blank signed papers from the appellant. Ravindra Reddy and the respondent have colluded with each other and misused the cheque of the appellant and said Ravindra Reddy has instigated the respondent to file cheque case against the appellant. The trial court has not considered the aforesaid contentions of the appellant and erroneously convicted the appellant.
(c) The respondent has not produced any documentary proof and evidence in order to show his financial capacity to lend the amount of Rs.3,50,000/- to the appellant on
09.07.2011. The respondent has not explained either in the legal notice, complaint or in his evidence about why Rs.4,50,000/- is mentioned in Ex.P.1 cheque even though he 6 Crl.A.No.214/2018 has alleged that the accused had took hand loan amount of Rs.3,50,000/- only. The trial court has not considered the said aspect and erroneously convicted the appellant.
(d) The trial court has not considered Ex.D.2 legal notice issued by the appellant to Ravindra Reddy on 23.05.2014 before the date of presentation of cheque calling upon him to surrender the blank signed cheques and blank papers to him within seven days. The trial court has also not considered the reply given by Ravindra Reddy which is produced at Ex.D.3.
(e) The trial court has not considered the fact that after issuance of legal notice to Ravindra Reddy, the appellant has given stop payment mandate to his banker with respect to Ex.P.1 cheque and other cheques received by Ravindra Reddy. The trial court has not considered the said letter and erroneously convicted the appellant.
(f) The trial court has not considered the fact that after the issuance of Ex.D.2 notice and after the appellant gave stop payment mandate, the respondent and Ravindra Reddy have colluded with each other and filled up the blank signed cheque and blank signed stamp paper and presented Ex.P.1 cheque for encashment for the purpose of wrongful gain from the appellant.
(g) The trial court has not properly considered the fact that the respondent ha not produced any documents before it to prove the existence of legally recoverable debt from the appellant and to his source of income to lend Rs.3,50,000/- to the appellant. The trial court has not followed the judgment of 7 Crl.A.No.214/2018 Hon'ble High Court of Karnataka and Hon'ble Apex Court about the said aspect.
(h) The trial court in its judgment has observed that the appellant has not cross-examined P.W.2. The appellant has no legal knowledge and he did not know whether his previous counsel did the cross-examination of P.W.2 or not. As such, the matter has to be remanded back to the trial court to give an opportunity to the appellant to do the cross-examination of P.W.2. Cross-examination of P.W.2 is very much necessary to prove the case of the appellant.
(i) Previous counsel of the appellant has not fully cross- examined P.W.1 in respect of Ex.D.1 to D.7 are concerned. Cross-examination of P.W.1 regarding Ex.D.1 to D.7 is very much necessary to prove the case of the appellant. As such, the matter has to be remanded to trial court to give an opportunity to the appellant to further cross-examine P.W.1.
(j) The appellant has taken the contention that he has issued blank signed cheques and stamp papers. As the matter has to be remanded to the trial court to give an opportunity to the appellant to file the application u/Sec.45 of the Indian Evidence Act to refer and obtain the report regarding ink and handwriting of the contents of the cheque.
(k) The impugned judgment of the trial court is devoid of merits. It is in contravention of express provision of law as laid down u/Sec.138 and 139 of N.I.Act. It is highly illegal and unsustainable.
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(l) The complainant has failed to prove his case beyond reasonable doubt about existence of legally enforceable debt. The complainant has failed to prove all the legal ingredients of offence punishable u/Sec.138 of N.I.Act. The trial court would have held that the appellant has rebutted the presumption u/Sec.118 and 139 of N.I.Act. The trial court is erred in convicted the appellant for the offence punishable u/Sec.138 of N.I.Act. The appellant is entitle for acquittal with respect to the said offence.
On these among other grounds stated in the appeal memorandum, the appellant has prayed to set aside the impugned judgment of the trial court and prayed to remand the case to the trial court for fresh trial.
9. After filing of the appeal, it is registered as Crl.A.No.214/2018 and notice was issued to the respondent. After service of the notice, the respondent was appeared through his counsel. Thereafter, the lower court record was called for. After receipt of lower court record, the matter was posted for arguments.
10. Heard the arguments of the Learned counsel for the appellant and respondent. Perused the appeal memorandum, trial court record, the written arguments submitted by the learned counsel for the respondent and other materials on record.
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11. Having done so, the following points will arise for my consideration:
(1) Whether the appellant proves that the trial court is erred in convicting him for the offence punishable u/s.138 of N.I.Act ?
(2) Whether the appellant proves that the interference of this court is required with the impugned judgment of the trial court?
(3) Whether the appeal filed by the appellant is deserves to be allowed?
(4) What order?
12. My findings on the above points are as under:
(1) Point No.1 .. In the Negative
(2) Point No.2 .. In the Negative
(3) Point No. 3 .. In the Negative
(4) Point No. 4 .. As per final order
for the following:
REASONS
13. Point No.1 to 3:- These three points are interrelated to each other and as such, they are taken together for discussion to avoid repetition of facts.
14. The complainant had filed private complaint before the trial court u/Sec.200 of Cr.P.C. by alleging the commission of offence u/Sec.138 of N.I. Act by the accused. Since the complainant had alleged that the accused had committed the offence punishable u/Sec.138 of N.I. Act, it is for the 10 Crl.A.No.214/2018 complainant to prove all the essential ingredients of Sec.138 of N.I. Act. Hence, it is relevant to note down the provisions of Sec.138 of N.I.Act herein, in order to know its essential ingredients.
Sec.138 of N.I. Act provides as follows:
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for (a term which may be extended to two years), or with fine which may extend to twice the amount of the cheque or with both. "
15. Thus from reading the aforesaid section, it is clear that the complainant has to prove the following essential ingredients for holding the accused guilty of offence under the said section.
(a) The cheque has been drawn by the accused on Bank account which is maintained by him with a particular Banker.
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(b) The amount of money mentioned in the cheque is for discharging the legal liability either wholly or partially and
(c) The cheque is dishonoured or it is returned unpaid due to insufficiency of funds etc.,
16. In order to prove the allegations made in the complaint, the complainant had adduced his oral evidence as P.W.1. P.W.1 in his examination-in-chief filed by way of affidavit has stated that he and accused are known to each other. The accused had obtained hand loan of Rs.3,50,000/- from him by way of cash during July 2011 for his family, business and other legal necessities. PW.1 has further stated in his examination-in-chief that the accused has promised to repay the said amount within one year. PW.1 has further stated in his examination-in-chief that after receiving the hand loan amount, the accused has executed the receipt on 09.07.2011. The accused has not repaid the loan amount within one year as promised by him. PW.1 has further stated in his examination-in-chief that in the receipt dated 09.07.2011, the accused has agreed to pay the bank interest on the received amount upto the date of payment of the loan amount. PW.1 has further stated in his examination-in-chief that in the month of September 2014, the accused has agreed to repay the loan amount with bank interest and issued cheque bearing No.14616, dated 22.10.2014 for Rs.4,50,000/- to the complainant drawn on The Shamrao Vithal Co-operative Bank Ltd., Yeshwanthpura Branch, Bengaluru, towards payment of 12 Crl.A.No.214/2018 hand loan amount due by him with interest. PW.1 has further stated in his examination-in-chief that as per the instructions of the accused, he had presented the said cheque for realization through his banker on 07.11.2014. PW.1 has further stated in his examination-in-chief that the said cheque was dishonoured by the accused banker on 08.11.2014 with endorsement "Payment stopped by drawer". PW.1 has further stated in his examination-in-chief that he had issued a legal notice dated 03.12.2014 to the accused through RPAD to the residential and office address of the accused. PW.1 has further stated in his examination-in-chief that the accused has given untenable reply to the said notice and he has not paid the cheque amount. PW.1 has further stated in his examination-in-chief that the accused had not paid the cheque amount and hence, he has stated that the accused had committed the offence punishable u/Sec.138 of N.I. Act.
17. P.W.1 apart from adducing his oral evidence has produced certain documents. He has produced the original cheque bearing No.14616, dated 22.10.2014 for Rs.4,50,000/- alleged to have been given by accused to him drawn on The Shamrao Vithal Co-operative Bank Ltd., Yeshwanthpura Branch, Bengaluru, at Ex.P.1. Ex.P.1(a) and is the signature of the accused. Ex.P.2 is the bank endorsement. In Ex.P.2, it is mentioned that Ex.P.1 cheque was dishonoured due to "Payment stopped by the drawer". Ex.P.3 is the receipt dated 09.07.2011 executed by the accused in favour of the 13 Crl.A.No.214/2018 complainant. P.W.1 has produced the office copy of legal notice dated 03.12.2014 issued by him to the accused at Ex.P.4. Ex.P.5 and 6 are the postal receipts. Ex.P.7 and 8 are the postal acknowledgments. Ex.P.9 is the reply notice.
18. The oral and documentary evidence adduced on behalf of the complainant supports the complaint averments. The accused has not disputed the fact that Ex.P.1 cheque is belonging to him and it is drawn from the bank account maintained by him and it bears his signature. D.W.1 in his cross-examination has admitted his signature on Ex.P.1 cheque and also admitted that the said cheque was drawn from the bank account maintained by him. It is the defence of the accused that he gave seven blank signed cheques and six blank signed papers to one Ravindra Reddy and the complainant and said Ravindra Reddy have misused the said one of the blank signed cheque and complainant had presented the said blank signed cheque and filed false complaint against him. Whether the accused had succeeded in proving his defence or not will be discussed in later paras. Since the accused had admitted his signature on Ex.P.1 cheque and since the accused had admitted that Ex.P.1 cheque is belonging to him and it is drawn from the bank account maintained by him and the said cheque was presented by the complainant, I am of the opinion that the complainant will became the holder of the cheque within the meaning of Sec.8 of N.I.Act. Once a cheque is issued by the drawer, a presumption under Sec.118(a) r/w. S.139 of N.I.Act must follow.
14Crl.A.No.214/2018 Sec.118(a) of N.I.Act provides as follows:
"Until the contrary is proved, the following presumption shall be made
(a) That every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration."
Sec.139 of N.I.Act provides as follows:
"It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Sec.138 for the discharge, in whole or in part, of any debt or other liability.
19. Thus, u/s.139 of N.I.Act, the initial presumption arises in favour of the complainant that the said cheque was issued for discharge of legally enforceable debt. Once the cheque is proved to be relating to the account of the accused and he admits the signature on the said cheque, then the initial presumption as contemplated u/Sec.139 of N.I.Act has to be raised by the court in favour of the complainant. Further u/Sec.118(a) of N.I.Act there is presumption that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted for consideration. Presumption u/Sec.118(a) and 139 of N.I.Act is a legal presumption and it is a mandatory presumption. The 15 Crl.A.No.214/2018 initial mandatory statutory presumption as provided u/Sec.118 r/w. S.139 of N.I.Act are in favour of the complainant.
20. In the recent decision of Hon'ble Supreme Court of India reported in (2021) 5 Supreme Court cases 283 : 2021 Online SC 75 (Kalamani Tex and another V/s P.Balasubramanian, rendered by Hon'ble three judges bench, the Hon'ble Supreme Court of India has discussed about the provisions of Sec.139 and 118 of N.I.Act. In the said judgment, the Hon'ble Supreme Court of India has held in Para No.13 while discussing the provisions of Sec.118 and 139 of N.I.Act, that the statute mandates that once the signature of an accused on the cheque is 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.
21. Further in the aforesaid judgment, the Hon'ble Supreme Court of India in Para No.15 has observed that the presumption raised u/Sec.118 and 139 of N.I.Act are rebuttable in nature. A probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not mere possibility. Further, a bare denial of passing of consideration would not aid the case of the accused. In Para No.17 of the judgment, the Hon'ble Supreme Court of India has held that even if the arguments raised by the appellants are taken at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory 16 Crl.A.No.214/2018 presumption cannot be obliterated, because, legally, even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. In the aforesaid judgment, in Para No.14, the Hon'ble Supreme Court of India has held that when the accused has admitted his signature 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. It is further observed that the trial court fell in error when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. It is further observed that, such approach of the trial court was directly in the teeth of the established legal position and amounts to a patent error of law.
22. Thus from the aforesaid decision of Hon'ble Supreme Court of India in Kalamani Tex case, it is clear that once the accused admits his signature on the cheque, it can be presumed u/Sec.139 of N.I.Act that the cheque was issued for discharge of legally enforceable debt. The court cannot insist the complainant to explain the circumstances under which the accused is liable to pay the cheque amount.
23. Thus from the provisions of Sec.118(a) and Sec.139 of N.I.Act, it is clear that the court shall raise presumption in favour of the complainant that he has received 17 Crl.A.No.214/2018 the cheque in question for discharge of legal liabilities and cheque was made and drawn for said purpose. This principles is also clearly held by the Hon'ble Supreme Court of India in Kalamani Tex case as discussed above. The burden is upon the accused to adduced satisfactory evidence to rebut the strong presumption as provided u/Sec.118 and Sec.139 of N.I.Act. Hence, the contention of the Learned counsel for the appellant that the burden is upon the complainant to prove his source of income to lend money to the accused and the burden is upon the complainant to prove the existence of legally enforceable debt cannot be acceptable one.
24. The accused in order to rebut the presumption existing in favour of the complainant u/Sec.118(a) and 139 of N.I.Act had adduced his defence evidence before the trial court as D.W.1. It is the defence of the accused as stated in his examination-in-chief as D.W.1 that the complainant is unknown to him. One Ravindra Reddy is known to him. Said Ravindra Reddy has assured the accused to help him to get loan from Srinidhi Souharda Co-operative Bank, V.V. Puram, Bengaluru for construction of residential building. Said Ravindra Reddy demanded seven signed blank cheques and six blank stamped paper to facilitate to obtain required loan amount from the bank. Beliving the assurance given by Ravindra Reddy, the accused gave five blank cheques singed by him and two blank cheques signed by his wife to Ravindra Reddy by hoping that Ravindra Reddy will arrange the loan amount. But Ravindra Reddy failed to arrange the loan amount from the said co-
18Crl.A.No.214/2018 operative society. He did not returned the blank signed papers and blank signed cheques. The accused came to know that two unknown persons have presented two blank signed cheques for realization which were given by the accused to Ravindra Reddy for obtaining loan. Thereafter the accused demanded Ravindra Reddy to return the documents. The accused has issued a legal notice through his counsel on 23.05.2014 to Ravindra Reddy. Complainant and Ravindra Reddy are relatives and they by colluding with each other and got presented the cheque in question for encashment through the complainant and filed false complaint against the accused. The accused has not obtained the financial assistance of Rs.3,50,000/- and he has not issued Ex.P.1 cheque to complainant for payment of the said amount.
25. D.W.1 apart from adducing his oral evidence by stating about his defence has also produced certain documents. Ex.D.1 is the reply notice dated 10.12.2014 given by accused to the notice of the complainant. Ex.D.2 is the legal notice dated 23.05.2014 issued by the accused to Ravindra Reddy. Ex.D.3 is the reply given by Ravindra Reddy dated 05.06.2014 to the legal notice of the accused. Ex.D.4 is the legal notice dated 16.06.2014 issued by one Parvathamma to the wife of the accused. Ex.D.5 is the reply notice to Ex.D.4 notice. Ex.D.6 and D.7 are the postal receipts.
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26. D.W.1 in his cross-examination has stated that he has not taken any documents in writing from Ravindra Reddy at the time of handing over seven blank signed cheques and 6 blank signed stamp papers. D.W.1 in his cross-examination has stated that Ravindra Reddy has not helped him earlier to obtain loan from any bank. D.W.1 in his cross-examination has admitted his signature on Ex.P.3 receipt. He has also admitted his LTM on two sheets in Ex.P.3. D.W.1 in his cross- examination has admitted that Ex.P.1 cheque is pertaining to his bank account. D.W.1 has also admitted his signature on Ex.P.1. D.W.1 in his cross-examination has stated that he has lodged police complaint against Ravindra Reddy for mis- utilizing his blank signed cheques and papers. D.W.1 in his cross-examination has admitted that he has not produced any documents to show that he has given police complaint against Ravindra Reddy. D.W.1 in his cross-examination has stated that he has not stated about lodging of police complaint against Ravindra Reddy in his reply notice and in his chief- examination. D.W.1 in his cross-examination has stated that he has not stated about giving 'Stop payment Mandate' to his bank in the reply notice given by him to the complainant.
27. Nothing has been elicited during the cross- examination of D.W.1 to prove that he know one Ravindra Reddy. Further nothing has been elicited from P.W.1 during the course of cross-examination to prove the defence of the accused that complainant is the relative of Ravindra Reddy and 20 Crl.A.No.214/2018 Ravindra Reddy gave one blank signed cheque and blank signed paper to him which were given by accused to Ravindra Reddy for getting bank loan and he has misutilized the said blank signed cheque and paper and created Ex.P.1 and P.3 and filed false complaint against him. Evidence of P.W.1 in the cross-examination is not helpful to the accused to prove his defence. P.W.1 has denied all the suggestions put to him on behalf of the accused about the defence of the accused as stated in the chief-examination of D.W.1 and as stated in the reply notice of the accused.
28. Except the oral evidence of D.W.1 and reply notice, the accused has not produced any other materials to prove his defence. D.W.1 in his cross-examination has stated that he is B.Com graduate and he is working as medical representative and general insurance agent. Hence, it is clear that he is well educated person and he knows the consequences of giving blank signed cheques and blank signed papers. The accused has not produced any materials to show that he wanted to purchase site for construction of residential building and as such, he was in need of financial assistance. The accused hs not furnished the details of site which he intends to purchase and from whom he wanted to purchase and how much loan amount he required for the same. He has not produced any agreement of sale or other documents about the site. In order to obtain loan for purchase of site, from any bank or co-operative society documents like 21 Crl.A.No.214/2018 agreement of sale and property documents required. According to the accused, Ravindra Reddy is not the employee of Srinidhi Souhardra, Co-operative Bank. For obtaining loan amount, the accused has to file application to the concerned bank and if they agreed to sanction loan, then the question of issuance of cheques etc will arise. Accused has not produced any documents to show that he had filed loan application to bank for loan amount to purchase site. D.W.1 in his evidence has not stated anything about he visiting the bank and filing loan application and confirmation given by the bank authority for sanction of particular amount of loan. He has also not stated anything about any one of the bank authority confirming that they know Ravindra Reddy. D.W.1 in his evidence has not stated anything about he confirming from the manager or any of the bank officials regarding whether Ravindra Reddy is known to them or not.
29. Without confirming from the bank authority that Ravindra Reddy is known to them, how he has issued seven blank signed cheques and six blank signed papers to Ravindra Reddy is not satisfactorily explained by the accused. Before giving the said documents to Ravindra Reddy, the accused would have confirmed from the bank about why seven blank signed cheques and six blank signed paper is required by them. Accused being a educated person would have definitely made such enquiry with the bank authority. The contention of the accused that he gave blank signed cheques and blank 22 Crl.A.No.214/2018 signed papers to the accused without any enquiry only on the assurance of the accused that seven signed cheques and six signed blank papers are required for sanction of loan cannot be acceptable one even from the point of view of ordinary prudent man. Even though the accused has alleged that Ravindra Reddy has misused his blank signed cheques and alleged that he gave three blank signed cheques to three different persons got filed cheque bounce case against him through the said persons, the accused has not lodged any police complaint against Ravindra Reddy or against those persons by alleging the commission of offence of cheating etc. Though D.W.1 has specifically alleged that Ravindra Reddy has cheated him, he has not taken any criminal action against him. No documents are produced by the accused to show that he has initiated criminal action against them. In the grounds of appeal memorandum it is stated that accused has approached the jurisdictional police after issuance of reply notice and police have advised him to approach the court of law. It is also stated that due to lack of legal knowledge, the accused has not initiated any other criminal proceedings against Ravindra Reddy. But the said contention of accused cannot be acceptable one. The accused has contested many cheque bounce case which were filed on the basis of blank signed cheques. Further accused is an educated person. Any of his counsel would have advised him to file criminal case for cheating against the persons who have cheated him. The accused has not produced the copy of the complaint filed by 23 Crl.A.No.214/2018 him before the jurisdictional police. Even if the police have not taken any action on his complaint, the accused would have filed private complaint before the court or he would have approached the higher police officer. But the accused has not did so.
30. Stop payment instruction was given by the accused to his banker on 26.04.2016. The xerox copy of the same is found in the lower court record. The accused has not produced the certified copy of the said document or the copy having endorsement by the bank for having received it. Accused has not examined the bank authorities to prove his contention that he gave stop payment mandate to his banker on 26.04.2016. In the grounds of appeal memorandum, it is stated that the appellant has produced the letter issued by him to his banker to stop the payment to the disputed cheque and the trial court has not considered the said document. But no such letter was marked by accused before trial court. As such, the trial court has not considered the same. The xerox copy is inadmissible in evidence. It could be seen from the xerox copy of the said document that the accused has not stated anything about he giving blank signed cheques to Ravindra Reddy for the purpose of availing loan. It is stated that he had misplaced five cheques mentioned in the said letter. There is also no mention about two cheques given by his wife. In the evidence of D.W.1, it is stated that since March 2013, he has requested 24 Crl.A.No.214/2018 Ravindra Reddy to return the blank signed cheques and papers to him.
31. From the said contention of D.W.1, it is clear that blank signed cheques might have been given by accused to Ravindra Reddy prior to 2013. Further during March 2013 itself accused was aware about the fact that Ravindra Reddy has cheated him and his intention to avoid return of those cheques. But he has taken any criminal legal action against Ravindra Reddy at that time also. Further he has not given any stop payment instructions to his banker at that time. As per accused stop payment instruction was given by him on 26.04.2014. What was the impediment for the accused for not issuing stop payment mandate to his banker at that time is not properly explained. If really the accused had issued seven blank signed cheques to Ravindra Reddy, definitely he would have stated so in the stop payment instruction given by him to his banker. All these facts and circumstances, creates doubts about the say of the accused that he had issued seven blank signed cheques to Ravindra Reddy. According to the complainant, the accused had availed hand loan of R.3,50,000/- from him during July 2011. Further according to the complainant, the accused had executed receipt for having received the said amount on 09.07.2011 itself. As such, there is possibility of accused giving stop payment mandate to his banker with intention of creating defence by issuing those cheques to the complainant and other persons in the case 25 Crl.A.No.214/2018 likely to be case filed by them against him for the offence punishable u/s.138 of N.I. Act cannot be ruled out. Under these facts and circumstances, only on the ground that the accused had issued stop payment instruction to his banker, it cannot be come to the conclusion that the accused had proved his defence and he has proved that he had not issued Ex.P.1 cheque to the complainant to discharge of his legal liability or debt.
32. In the appeal memorandum, the accused had taken the contention that the validity of cheque was only for three months and the accused had presented the cheques after lapse of five months and 14 days and the trial court has not considered the said aspect. If really the cheque was presented after the validity time of cheque, banker of the accused would have dishonour the cheque on the ground that the time limit of cheque was expired. The accused had not examined bank authority in order to prove that the validity time of cheque was expired as on the date of presentation of the cheque. Ex.P.1 cheque was dishonoured on the ground of stop payment mandate issued by complainant. As such, I do not find any merits in the said contention of the appellant.
33. Another main ground taken by the appellant is that the complainant has not proved his source of income to lend money to him and the trial court has not considered the said 26 Crl.A.No.214/2018 aspect. The Learned counsel for te appellant has relied upon the decision of Hon'ble Supreme Court of India reported in
(i) 2015 AIR SCW 64 (K.Subramani V/s.
K.Damodara Naidu)
(ii) (2014) 2 SCC 236 (John K. Abraham V/s Simon C.Abraham and another)
(iii) (2008) 4 SCC 54 (Krishna Janardhan Bhat V/s. Dattatraya G. Hegde) and other decisions in support of his arguments that the burden is upon the complainant to establish is source of income to lend money to the accused and if the complainant has failed to discharge the said burden the accused is entitled for acquittal.
34. I have perused the aforesaid judgments of Hon'ble Supreme Court of India. But as it is discussed earlier, in the recent decisions passed in (2021) 5 Supreme Court cases 283 : 2021 Online SC 75 (Kalamani Tex and another V/s P.Balasubramanian, rendered by Hon'ble three judges bench, the Hon'ble Supreme Court of India has discussed about the provisions of Sec.139 and 118 of N.I.Act. In the said judgment, the Hon'ble Supreme Court of India has held in Para No.13 while discussing the provisions of Sec.118 and 139 of N.I.Act, that the statute mandates that once the signature of an accused on the cheque is 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. Further only on the ground 27 Crl.A.No.214/2018 that the complainant has not produced his income tax returns, the case of the complainant cannot be disbelieved. If the complainant has failed to shown the amount of Rs.3,50,000/- given by him in his income tax returns and if he has violated the provisions of income tax act, it is for the income tax authorities to take necessary action against the accused ffor violating the provisions of income tax act.
35. The decision of Hon'ble Supreme Court of India in Krishna Janardhan Bhat so far as ratio regarding existence of legally enforceable debt is not a matter of presumption under Sec.139 of N.I.Act has been considered by the Hon'ble Three judges Supreme Court in Rangappa vs. Sri. Mohan (2010) 11 SCC 441 Further, the observation of the Hon'ble Supreme Court of India in Krishna Janardhan Bhat's case about compliance of provisions of Sec.269 SS and implication of Sec.269 SS and implication of Sec.271B of Income Tax Act are also considered by the Hon'ble Supreme Court of India in Rangappa's case.
36. As per the decision of Hon'ble Supreme Court of India in Krishna Janardhan Bhat's case, the advance taken by way of loan of more than Rs.20,000/- was only to be made by way of an account payee cheque. In this regard, the provisions of Sec.269 SS of the Income Tax Act is relevant to be noted herein.
Sec.269 SS of the Income Tax Act provides as follows:-
28Crl.A.No.214/2018 "No person shall, after the 30th day of June 1984, take or accept from any other person (hereinafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft."
37. At this stage, the provisions of Sec.271 D is also to be relevant to mention herein. Sec.279 D of Income Tax Act provides that:
"If a person takes or accept any loan or deposit in contravention of the provisions of Sec.269 SS, he shall be liable to pay by way of penalty, a sum equal to the amount of the loan or deposit so taken are accepted."
38. Sec.269 SS of Income Tax Act does not cast any burden upon a person making advance in cash to record it in his income tax return and does not prevent any such cash advance from being made. Further, Sec.269 SS of the Income Tax Act does not specifically provides that a person cannot advance more than Rs.20,000/- in cash to another person. The restriction on cash advances was in fact on the taker and not on the person who makes the advance. Further, punishment is also prescribed for violation of provisions of Sec.269 SS of Income Tax Act.
39. Further, it is to be noted here that in Rangappa's case, the Hon'ble Supreme Court of India was specifically considered the case of an advance of Rs.45,000/- made in 29 Crl.A.No.214/2018 cash and yet, the Hon'ble Supreme Court of India upheld the conviction order of the trial court. The Hon'ble Supreme Court of India in Rangappa's case has noted the observations of Hon'ble Supreme Court of India in Krishna Janardhan Bhat's case regarding advance of more than Rs.20,000/- was to be made only by way of an account payee cheque, yet the Hon'ble Supreme Court of India has accepted the case of the complainant who claimed to have made an advance of Rs.45,000/- in cash. The Hon'ble Supreme Court of India in Rangappa's case thereby, impliedly overruled the decision of Hon'ble Supreme Court of India in Krishna Janaradhan Bhat's case that the advance of amount of more than Rs.20,000/- is only to be made by way of account payee cheque.
40. Hence, merely because the amount advanced is not shown in I.T. Returns, in every case, the court cannot jump to the conclusion that the presumption u/s.139 of N.I.Act stands rebutted. Under these facts and circumstances and also in view of the decision of Hon'ble Supreme Court of India in Rangappa's case as stated above, the contention of the learned counsel for the accused that advances of more than Rs.20,000/- has to be made only through account payee cheque cannot be acceptable one. Further, the contention of learned counsel for the accused that failure on the part of the complainant to show the hand loan amount in his I.T. returns is fatal to the case of the complainant also cannot be acceptable one.
30Crl.A.No.214/2018
41. The appellant in the grounds of appeal has prayed to remand the matter back to the trial court for fresh consideration and permit to do the further cross-examination of P.W.1 and to lead his further defence evidence and to produce necessary documents and to examine one Ravindra Reddy on his behalf in order to elicit true facts. The case before the trial court was of the year 2014. As per the contention of the accused, he has advanced hand loan of Rs.3,50,000/- to the complainant during the year 2011 itself. From the order sheet of the trial court, it could be seen that the matter was posted for cross-examination of P.W.1 during the year 2015 itself. Sufficient time was given to the accused to cross-examine P.W.1. The accused has already extensively cross-examined P.W.1 before the trial court. Further the trial court has also recorded the statement of accused u/Sec.313 of Cr.P.C. The trial court has also given opportunity to accused to lead his defence evidence. When the matter was posted for defence evidence, the accused has got recalled P.W.1 for cross- examination. The accused has took sufficient time to cross- examine P.W.1 before the trial court. P.W.1 was cross- examined by the accused before the trial court on 30.06.2016. The accused has also took sufficient time to lead his defence evidence. When the matter was posted for arguments, the accused had filed application to permitting him to lead his defence evidence. The said application was came to be allowed by imposing cost of Rs.5,000/-. The trial court has given sufficient opportunity to the accused to cross-examine 31 Crl.A.No.214/2018 P.W.1 and to lead his defence evidence. As such, I do not find any merits in the prayer of the appellant for remanding the matter back to the trial court for the reasons stated in the appeal memorandum. If the matter is remanded back to the trial court, it will further delaying the matter. It seems that the appellant is intending to get the matter remand back to the trial court with intention of further delaying the matter and with intention to avoid the complainant from receiving the cheque amount at the earliest.
42. The accused has failed to adduce sufficient probable defence evidence before the trial court to rebut the presumption existing in favour of the complainant u/Sec.118(a) and 139 of N.I.Act. For the discussions made above, the defence evidence and documents produced on behalf of the accused cannot be considered as probable defence to rebut the presumption u/Sec.118(a) and 139 of N.I.Act. The accused has failed to adduce sufficient evidence to prove his contention that Ex.P.1 cheque was not issued by him to the complainant and it was issued by him to one Ravindra Reddy and the same was misused by the complainant. On the other hand, the complainant had adduced his oral and documentary evidence before the trial court to prove the complaint averments and to prove that the accused had availed loan of Rs.3,50,000/- from him and he had issued Ex.P.1 cheque towards payment of principle and interest. The complainant has also examined P.W.2 on his behalf. It is the contention of the appellant in the 32 Crl.A.No.214/2018 appeal memorandum that the complainant has not given proper explanation regarding why the accused had issued cheque for Rs.4,50,000/-, even though the alleged loan amount is Rs.3,50,000/-. But according to the complainant, the accused had agreed to pay the interest on the loan amount and he had issued Ex.P.1 cheque by mentioning the amount which include principle and interest. The complainant had also produced the Ex.P.3 receipt executed by the accused for having received Rs.3,50,000/- loan amount from the complainant and agreeing to repay the said loan amount with bank interest. The signature on Ex.P.3 document is also not disputed by the accused. The accused has failed to adduce sufficient evidence to prove that Ex.P.3 document was got created. As such, I am of the opinion that the accused might have issued Ex.P.1 cheque for Rs.4,50,000/- by including the principle and interest amount.
43. The complainant had adduced sufficient oral and documentary evidence before the trial court to prove that the accused had committed the offence punishable u/s.138 of N.I. Act. The complainant has proved all the essential ingredients of offence punishable u/s.138 of N.I. Act. As such, the trial court has rightly come to the conclusion that the accused has committed the offence punishable u/s.138 of N.I. Act. The trial court has properly and judiciously considered the oral and documentary evidence adduced on behalf of the complainant and the accused and the trial court has come to proper 33 Crl.A.No.214/2018 conclusion that the accused had committed the offence punishable u/s.138 of N.I. Act. As such, I do not find any grounds to interfere with the said findings of the trial court.
44. The trial court has sentenced the accused to pay fine of Rs.4,55,000/-. As per Sec.138 of N.I.Act, the learned Magistrate has got discretion to sentence the accused to undergo imprisonment for the period up to two years or to impose fine which may extend to twice the amount of the cheque or with both. The learned Magistrate by exercising his discretion has sentenced the accused only with fine of Rs.4,55,000/-. By considering the length of trial, date of issuance of cheque and interest on the cheque amount etc., the discretion exercise by the learned Magistrate is also seems to be proper and judicious. As such, I do not find any grounds to interfere with the sentence passed by the trial court. As such, I am of the opinion that the impugned judgment of the trial court is deserves to confirmed and the appeal filed by the appellant is deserves to be dismissed. Accordingly, I answer Points No.1 to 3 in Negative.
45. Point No.4:- In view of my findings on point No.1 to 3, I proceed to pass the following:
ORDER The Appeal filed by the appellant u/s.374(3) of Cr.P.C., is hereby dismissed.
The order passed by learned 12th ACMM, Bengaluru, dated 10.01.2018 in C.C.No.35381/2014 is hereby confirmed.34
Crl.A.No.214/2018 Send back the lower court records along with copy of this order.
(Dictated to the Stenographer, directly on computer, corrected and then pronounced by me in the open court on this the 25th day of May, 2022).
(B.G.Pramoda) LII Addl. City Civil & Sessions Judge, Bangalore.35
Crl.A.No.214/2018 Judgment pronounced in the open court (vide separate order) ORDER The Appeal filed by the appellant u/s.374(3) of Cr.P.C., is hereby dismissed.
The order passed by learned 12th ACMM,
Bengaluru, dated 10.01.2018 in
C.C.No.35381/2014 is hereby confirmed.
Send back the lower court records along
with copy of this order.
LII Addl. City Civil & Sessions Judge,
Bangalore.