Bangalore District Court
Sri. K. Vijay Kumar vs Sri. K. Shekar on 21 September, 2021
1
C.C.No. 1117/2018 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated: This the 21st day of September, 2021
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No. 1117/2018
Complainant : Sri. K. Vijay Kumar,
S/o Late Sri. Subbaiah Setty,
Aged about 55 years,
R/at No.34, (Old No.131),
4th Main Road, APMC Yard,
Yeshwanthpuram,
Bengaluru - 560 022.
Rep. by Sri. Nikhil .P Adv.,)
Vs
Accused : Sri. K. Shekar,
S/o Late M. C. Kannappa Chetty,
Aged about 60 years,
R/at No.50, Armstrong Road,
Bengaluru - 560 001.
(Rep. by Sri. C.R.A.R. Advocates &
Solicitors, C.R. Abdul Rasheed
Adv.,)
Case instituted : 08.12.2017
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Conviction
2
C.C.No. 1117/2018 J
Date of order : 21.09.2021
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he is a tenant for the premises bearing No.131/34, 4th Main Road, APMC Yard, Yeshwanthpura, Bengaluru 22 for over 2 decades under accused and the accused introduced your brothers Sri.K.Sengodan and Sri.K.Ravi to him and the familiarity developed as you along with Sri.K.Ravi and Sri.K.Sengodan used to approach him to collect the monthly rent of the leased premises and accused brothers also got to know that he had a very good and flourishing business in the said premises, the accused and his brothers, also began to seek for hand loans/ borrowings /advances apart from advance rent from him and he used to advance monies to the accused and his brothers assuming that you would maintain the cordial relationship as well as honour to the amounts lent as loan and repay the same with interest as mutually agreed upon. It is further contended by the complainant that, wherever the accused had borrowed loans, the brother of the accused Sri.K.Sengodan would stand as witness and were Sri.K.Sengodan had borrowed 3 C.C.No. 1117/2018 J monies from him, the accused would stand as witness and similarly for Sri.K.Ravi accused or the other brother Sri.K.Sengodan stood as surety, since there was more than a fiduciary relationship as the lease deed, the cordiality and brotherliness that had set in made him to blindly believe and have faith on the accused and his brothers Sri.K.Sengodan and Sri.K.Ravi and further he advanced monies to the accused and his brothers on several occasions and though interest were liable to be paid, the same were waived off by him, because of brotherly trust he had on you and your brothers. It is further contended by the complainant that, he had been misused of his polite nature and was extracted moneies to the tune of Rs.55 Lakhs, which was paid to accused as advance rent, borrowings loan for family necessities apart from the marriage of the daughter of the Accused etc, which was subsequently agreed to be adjusted towards the sale consideration amount for the sale of the shop premises bearing No.131/34, 4th Main Road, APMC yard, Yeshwanthpura, Bengaluru.
3. It is further contended by the complainant that, the brother of the accused Sri.K.Snegodan had also borrowed monies to the tune of Rs.1,50,000/= on 10.12.2015 and also agreed to repay back the same with an interest at 2% p.m. compounding interest as per the promissory notes executed by you, in which you was a 4 C.C.No. 1117/2018 J witness and also orally Sri.K.Sengodan had agreed to repay back the same within one year and Sri.K.Sengodan failed to repay back the loan secured but instead approached him seeking further loan to the tune of Rs.9 Lakhs and promised to pay back within 3 months and requested not to impose any interest on the same as the said money was required for some emergency. It is further contended by the complainant that, considering the request and Sri.K.Sengodan's convincing nature, he advanced the said amount, when Sri.K.Sengodan failed to repay back the said loan by early 2017 as promised, he started to followup regularly, in order to avoid the situation, Sri.K.Sengodan promised to pay the same with 2% interest p.m. as promised but requested for further time of one year for the payment of the entire loan amount. In order to convince him Sri.K.Sengodan issued three post dated cheques towards the loan amount also calculating interest at 2% per month until the date of issue of cheque, the borther of the accused Sri.K.Sengodan issued three cheques bearing Nos.118718, 118719 and 118720 dated: 10.10.2017 drawn on Indian Bank, Commercial Street branch, Bengaluru for an amount of Rs.98,000/= each totaling to Rs.2,94,000/= in his favour. your brother Sri. K. Sengodan begged and pleaded him not to claim any interest on the other loan amount of Rs.9 Lakhs and 5 C.C.No. 1117/2018 J hence he issued a separate post dated cheque bearing No.363937 dated; 13.10.2017 drawn on Indian Bank, Commercial Street Branch, Bengaluru for an amount of Rs.9 Lakhs in his favour. It is further contended by the complainant that, all the cheques have been bounced and he filed separate PCR before this Hon'ble Court against accused brother namely Sri.K.Sengodan, the accused went on to issue series of legal notices to him on the advice of accused brother Sri.K.Sengodan and in order to amicably settle the same, in September 2016, the accused requested him to pay a further amount of Rs.16 Lakhs as an interest free loan, thereby promising to execute the sale deed in his favour and as a guarantee to the loan amount received, for which the accused has issued post dated cheques bearing Nos.143163 and 143164 drawn on United Bank of India, Shviajinagar Branch, Bengaluru both dated 16.8.2017 for an amount of Rs.7 Lakhs and Rs.9 Lakhs respectively only on the principle amount which have now bounced. It is further contended by the complainant that, the accused has failed to settle the amounts due and the accused hatched a plan along with his brother Sri.K.Sengodan to harass and annoy him by falsely instituting a civil suit, which was pending before the City Civil and Session Judge, Mayo Hall, Bengaluru, when he presented the aforementioned cheques for encashment through his 6 C.C.No. 1117/2018 J banker, they were returned dishonoured as "Refer to Drawer" vide bank endorsement dated:17.10.2017. It is further contended by the complainant that, thereafter he got issued a legal notice to the accused on 26.10.2017 through RPAD calling upon him to repay the cheque amount to her within 15 days from the date of the receipt of the said legal notice, Even after the service of notice, the accused has neither paid the amount due nor replied to the said notice. Hence the complainant has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
4. Before issuing process against the accused, the Complainant has filed his affidavitinlieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his sworn statement, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to Ex.P.13 i.e, original two Cheques as per Ex.P.1 to Ex.P.2 respectively, the signatures on the said cheques identified by P.W.1 as those of the accused as per Ex.P.1(a) and Ex.P.2(a) respectively, the Bank Memos as per Ex.P.3 and Ex.P.4, the office copy of the Legal Notice dated 26.10.2017 as per Ex.P.5, the postal receipt as per Ex.P.6, Postal Track Result as per Ex.P.7, 7 C.C.No. 1117/2018 J Certificate as per Ex.P.8, certified copy of Notification dated 30.9.2009 as per Ex.P.9, certified copy of Paper Publication as per Ex.P.10 and Ex.P.11, certified copy of Letter dated 19.11.2009 writtne by the Chief Secretary, Agricultural Products Marketing Committee, Bangalore as per Ex.P.12, certified copy of Letter written by the Director, Agriculturing Marketing, Bangalore as per Ex.P.13.
5. Primafacie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
6. In view of the principles of law laid down and as per the directions of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the accused, as he intended to set out his defence, and the case was posted for cross examination of complainant.
7. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence 8 C.C.No. 1117/2018 J appearing against him and has chosen to lead his rebuttal evidence, subsequently the accused himself examined as DW1 and he has relied upon the documentary evidence as per Ex.D.1 i.e, certified copy of Handwritten Document and closed his side.
8. Heard the arguments by learned counsel for the complainant and accused and perused the materials on record and perused the decision relied upon by the learned counsel for the complainant
9. On the basis of complaint, evidence of complainant and documents and having heard the arguments of both learned counsels for the complainant and the accused, the following points that are arise for consideration are:
1. Whether the complainant proves that the accused has issued cheques i.e., cheques bearing Nos.143163 and 143164 drawn on United Bank of India, Shviajinagar Branch, Bengaluru both dated 16.8.2017 for an amount of Rs.7 Lakhs and Rs.9 Lakhs respectively to discharge legally recoverable debt to the complainant and when the complainant has presented the above said cheques for encashment through his banker but the said cheques have been dishonoured for the reasons "Funds Insufficient" on 17.10.2017 and the complainant issued legal notice to the accused on 9 C.C.No. 1117/2018 J 27.10.2017 and inspite of it the accused has not paid the cheques amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
10. The above points are answered as under:
Point No.1: In the Affirmative Point No.2:As per final order for the following:
REASONS
11. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing 10 C.C.No. 1117/2018 J such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act presupposes three conditions for prosecution of an offence which are as under:
1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
12. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must 11 C.C.No. 1117/2018 J have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 a presumption shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
13. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, he is a tenant for the premises bearing No.131/34, 4 th Main Road, APMC Yard, Yeshwanthpura, Bengaluru22 for over 2 decades under accused and the accused introduced your brothers Sri.K.Sengodan and Sri.K.Ravi to him and the familiarity developed as you along with 12 C.C.No. 1117/2018 J Sri.K.Ravi and Sri.K.Sengodan used to approach him to collect the monthly rent of the leased premises and accused brothers also got to know that he had a very good and flourishing business in the said premises, the accused and his brothers, also began to seek for hand loans/ borrowings /advances apart from advance rent from him and he used to advance monies to the accused and his brothers assuming that you would maintain the cordial relationship as well as honour to the amounts lent as loan and repay the same with interest as mutually agreed upon. It is further contended by the complainant that, wherever the accused had borrowed loans, the brother of the accused Sri.K.Sengodan would stand as witness and were Sri.K.Sengodan had borrowed monies from him, the accused would stand as witness and similarly for Sri.K.Ravi accused or the other brother Sri.K.Sengodan stood as surety, since there was more than a fiduciary relationship as the lease deed, the cordiality and brotherliness that had set in made him to blindly believe and have faith on the accused and his brothers Sri.K.Sengodan and Sri.K.Ravi and further he advanced monies to the accused and his brothers on several occasions and though interest were liable to be paid, the same were waived off by him, because of brotherly trust he had on you and your brothers. It is further contended by the complainant that, he had been 13 C.C.No. 1117/2018 J misused of his polite nature and was extracted moneies to the tune of Rs.55 Lakhs, which was paid to accused as advance rent, borrowings loan for family necessities apart from the marriage of the daughter of the Accused etc, which was subsequently agreed to be adjusted towards the sale consideration amount for the sale of the shop premises bearing No.131/34, 4th Main Road, APMC yard, Yeshwanthpura, Bengaluru.
14. It is further contended by the complainant that, the brother of the accused Sri.K.Snegodan had also borrowed monies to the tune of Rs.1,50,000/= on 10.12.2015 and also agreed to repay back the same with an interest at 2% p.m. compounding interest as per the promissory notes executed by you, in which you was a witness and also orally Sri.K.Sengodan had agreed to repay back the same within one year and Sri.K.Sengodan failed to repay back the loan secured but instead approached him seeking further loan to the tune of Rs.9 Lakhs and promised to pay back within 3 months and requested not to impose any interest on the same as the said money was required for some emergency. It is further contended by the complainant that, considering the request and Sri.K.Sengodan's convincing nature, he advanced the said amount, when Sri.K.Sengodan failed to repay back the said loan by early 2017 as promised, he started to followup regularly, in order to avoid the 14 C.C.No. 1117/2018 J situation, Sri.K.Sengodan promised to pay the same with 2% interest p.m. as promised but requested for further time of one year for the payment of the entire loan amount. In order to convince him Sri.K.Sengodan issued three post dated cheques towards the loan amount also calculating interest at 2% per month until the date of issue of cheque, the borther of the accused Sri.K.Sengodan issued three cheques bearing Nos.118718, 118719 and 118720 dated: 10.10.2017 drawn on Indian Bank, Commercial Street branch, Bengaluru for an amount of Rs.98,000/= each totaling to Rs.2,94,000/= in his favour. your brother Sri. K. Sengodan begged and pleaded him not to claim any interest on the other loan amount of Rs.9 Lakhs and hence he issued a separate post dated cheque bearing No.363937 dated; 13.10.2017 drawn on Indian Bank, Commercial Street Branch, Bengaluru for an amount of Rs.9 Lakhs in his favour. It is further contended by the complainant that, all the cheques have been bounced and he filed separate PCR before this Hon'ble Court against accused brother namely Sri.K.Sengodan, the accused went on to issue series of legal notices to him on the advice of accused brother Sri.K.Sengodan and in order to amicably settle the same, in September 2016, the accused requested him to pay a further amount of Rs.16 Lakhs as an interest free loan, thereby promising 15 C.C.No. 1117/2018 J to execute the sale deed in his favour and as a guarantee to the loan amount received, for which the accused has issued post dated cheques bearing Nos.143163 and 143164 drawn on United Bank of India, Shviajinagar Branch, Bengaluru both dated 16.8.2017 for an amount of Rs.7 Lakhs and Rs.9 Lakhs respectively only on the principle amount which have now bounced. It is further contended by the complainant that, the accused has failed to settle the amounts due and the accused hatched a plan along with his brother Sri.K.Sengodan to harass and annoy him by falsely instituting a civil suit, which was pending before the City Civil and Session Judge, Mayo Hall, Bengaluru, when he presented the aforementioned cheques for encashment through his banker, they were returned dishonoured as "Refer to Drawer" vide bank endorsement dated:17.10.2017. It is further contended by the complainant that, thereafter he got issued a legal notice to the accused on 26.10.2017 through RPAD calling upon him to repay the cheque amount to her within 15 days from the date of the receipt of the said legal notice, Even after the service of notice, the accused has neither paid the amount due nor replied to the said notice.
15. In support of oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to Ex.P.13 i.e, original two Cheques as per Ex.P.1 to 16 C.C.No. 1117/2018 J Ex.P.2 respectively, the signatures on the said cheques identified by P.W.1 as those of the accused as per Ex.P.1(a) and Ex.P.2(a) respectively, the Bank Memos as per Ex.P.3 and Ex.P.4, the office copy of the Legal Notice dated 26.10.2017 as per Ex.P.5, the postal receipt as per Ex.P.6, Postal Track Result as per Ex.P.7, Certificate as per Ex.P.8, certified copy of Notification dated 30.9.2009 as per Ex.P.9, certified copy of Paper Publication as per Ex.P.10 and Ex.P.11, certified copy of Letter dated 19.11.2009 writtne by the Chief Secretary, Agricultural Products Marketing Committee, Bangalore as per Ex.P.12, certified copy of Letter written by the Director, Agriculturing Marketing, Bangalore as per Ex.P.13.
16. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not in dispute by the accused that, the complainant is tenant under him in respect of the premises bearing No.131/34 situated at APMC Yard, Yashwanthapura, Bangalore. It is also not in dispute by the accused that, the cheques in question belongs to his account and the signatures found at Ex.P.1(a) and P.2(a) are those of accused. It is also not in dispute that, the 17 C.C.No. 1117/2018 J cheques in question were presented to the encashment within their validity period and the said cheque have been returned as dishonoured for the reason of "Funds Insufficient" as per the returned memos issued by the concerned bank i.e Ex.P.3 and Ex.P.4 respectively, hence as a matter on record it is proved by the complainant that, the cheques in question were dishonoured for the reason of Funds Insufficient. The accused has disputed the service of notice upon him, but the complainant has produced copy of legal notice, postal receipt, postal track result which are Ex.P.5 to Ex.P.7 respectively. The perusal of Ex.P.5 to Ex.P7 it appears that, the complainant has issued legal notice on 26.10.2017 to the accused through RPAD and same has been served on the accused on 27.10.2017 which reflects as item delivered in Ex.P.7. The accused has not disputed the Ex.P.7 during the course of cross examination of the complainant. In addition to that, the accused in his cross examination has admitted that, he came to know about the filing of this complaint only after service of notice, hence it goes to show that, the accused has categorically admitted the service of notice upon him. In addition to that, the accused has also admitted that, his house 18 C.C.No. 1117/2018 J number is No.50, Arms Strong Road, Bharathi Nagara, Bangalore - 560 001 and till today he is residing in the said address, hence it goes to show that, the accused has also admitted his address as which is mentioned in the legal notice, postal receipt, therefore in view of the said admission it can be held that, the legal notice sent by the complainant to the correct address of the Accused is presumed to have been served on him U/s. 27 of General Clauses Act. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. Lingamma, wherein the Hon'ble High Court held that, "Notice sent at correct address returned unclaimed - is deemed to be served. It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s.
Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, "notice sent by registered post with acknowledgement to a correct addressservice of notice has to be presumed". Therefore in view of the principles 19 C.C.No. 1117/2018 J of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on him. Hence the notice issued by the complainant through registered post is held to be proper. In addition to that, it is also relevant here to refer the decision reported in 2007 AIR SCW 3578 in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and another., wherein the Hon'ble Apex court held that " the drawer of the cheque is permitted to deposit the cheque amount within 15 days from the date of his appearance before the court in pursuance of the service of summons on him and in such situation, his defence of non service of the legal notice cannot be available to him'. Hence, in view of the said principles of law, even for sake of discussion, though there is no cogent and reliable documentary proof to substantiate the claim of the complainant with regard to address of the Accused to show there is due service of the legal notice on the Accused, in view of settled position of law by virtue of the above said decision of Hon'ble Apex Court of India, the 20 C.C.No. 1117/2018 J Accused is not entitled to the technical defence of the alleged non service of the legal notice. Therefore, the argument canvassed by the learned counsel for the accused that, the notice issued by the complainant was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable and are not sustainable in law.
17. It is the specific claim of the complainant that, he is a tenant under the accused in respect of premises bearing No.131/34 situated at APMC Yard, Yashawanthapura, Bangalore for over two decades and the accused who got introduced to him his brothers namely Sri. K. Sengodan and Sri. K. Ravi and the brothers of the accused used to collect the monthly rent of the leased premises and also got know that, he had very good and flourishing business in the said premises and the accused and his brothers used to take hand loans apart from the advance rent from him and whenever the accused borrowed the loans his brothers stood as witnesses and whenever the brothers of the accused borrowed the loans the accused stood as witness and the 21 C.C.No. 1117/2018 J brother of the accused and also the accused misused his polite nature and extracted monies to the tune of Rs.55 lakhs which was paid to the accused Sri. K. Shekar as advance rental, loans for family necessities and marriage of his daughter etc., as he agreed to adjust the said amounts towards the sale consideration amount for sale of the shop premises in which he is running his business as a tenant under him. It is also the specific claim of the complainant that, the accused went on to issue series of legal notices to him on the advice of his brother K. Sengodan and in order to amicably settle the same, in September 2016 the accused requested him to pay further loan of Rs.16 lakhs as an interest free loan thereby promising to execute the sale deed in his favour and has a guarantee to the loan amount received, he also issued postdated cheques i.e., Ex.P.1 and Ex.P.2 for sum of Rs.7 lakhs and Rs.9 lakhs in his favour. On the other the accused had denied the lending of loan amount by the complainant as stated above and also issuance of cheques towards discharge of the said loan amounts.
18. In order to substantiate the claim of the complainant he has produced the cheques in 22 C.C.No. 1117/2018 J question i.e., Ex.P.1 and Ex.P.2 issued by the accused in his favour. As it is already held in the above that, the accused has admitted the issuance of Ex.P.1 and Ex.P.2 cheques in favour of the complainant and signatures thereon, therefore an initial presumptions can be drawn in favour of the complainant under Sec.118a and 139 of N.I. Act that, the cheques in question have been issued towards discharge of legally recoverable debt, unless and until the accused rebut the presumptions available to the complainant it cannot be held that, the accused has not issued the cheques in question to the complainant towards discharge of the debt in question.
19. It is relevant here to mention that, the accused during the course of his crossexamination has admitted that, the execution of the affidavit by him which is at Ex.P.8 and also admitted that, the notification published by APMC Yashwanthapura, Bangalore which is at Ex.P.9 and also admitted the paper publication issued by the said APMC as per Ex.P.10 and P.11 and also admitted that, he has executed a letter dated 19.11.2009 in favour of the APMC, Yashwanthapura, Bangalore as per Ex.P.12, 23 C.C.No. 1117/2018 J hence on careful perusal of the Ex.P.8 to Ex.P.12. It appears that, the accused has sworn an affidavit as per Ex.P.8 stating that, he has agreed to sell the premises bearing No.131/1 situated at APMC Yard Yashwanthpura in favour of the complainant and in turn the Secretary of APMC, Bangalore has also issued notification dated 30.09.2009 by calling objections from the public in general, to the proposed sale transaction offered by the accused in favour of the complainant as per Ex.P.9 and a paper publication were also published as per Ex.P.10 and Ex.P.11 calling the objections from the public. It is also seen from the Ex.P.12 i.e., letter addressed to the Secretary, APMC, Bangalore by the accused stating that, due to his financial crisis he is intending to sell the shop premises bearing No.131 in favour of the complainant and the Joint Director (Planning) of APMC Department, Bangalore has granted permission to sell the shop premises bearing No.131 in favour of the complainant by the accused. Therefore in view of the Ex.P.8 to Ex.P.13 it can be held that, the accused to meet out his financial crises has decided to sell the shop premises bearing No.131/1 in favour of the complainant. It is also relevant here to mention that, the complainant has 24 C.C.No. 1117/2018 J also admitted that, he has not mentioned the date on which has paid Rs.55 lakhs to the accused as advance rent amount and he does not know out of the said amount how much amount included the sale consideration amount and advance rent amount, but the complainant stated that, he has not paid a separate amount towards sale consideration, but has paid total amount of Rs.50 lakhs to the accused and as per the agreement till today the sale deed has not been registered in his name and accused has not yet executed sale deed in his favour and has not filed any suit against the accused, but the said line of crossexamination by the accused is not a relevant aspect to consider the present facts of the case, therefore there is no need to discuss about the said part of crossexamination in the present case. It is also admitted by the complainant that, he has not stated in his affidavit on which date, month and year he had paid Rs.7 lakhs and Rs.9 lakhs to the accused, but he stated that, he do not remember, the date, month and year and also admitted that, he had not collected any documents from the accused at the time of advancing Rs.16 lakhs to the accused, but the complainant stated that, the accused agreed to repay the said amount 25 C.C.No. 1117/2018 J and had issued cheque towards discharge of the said amount and also stated that, since he had faith on the accused and he could not collected any documents from the accused at the time of lending of Rs.16 lakhs to the accused. It is true that, the complainant has admitted that, as on the date of issuance of the cheque to him there was a civil suit pending between him and the accused, but mere pendency of the suit between the complainant and the accused is not a ground to reject the evidence of the complainant holding that, there is possibility of the issuance of the cheque by the accused since the relationship between the accused and complainant was strained due to the pendency of the civil suit, therefore the admission elicited by the accused as stated in the above is not helpful for the accused to discard the evidence of complainant.
20. It is also true that, the complainant has admitted that, he had not collected promissory note or any other document from the accused at the time of lending of Rs.16 lakhs to the accused and he has not lend Rs.16 lakhs either through cheque, DD or online banking, but the complainant has stated that, since he had faith on the accused, therefore he has 26 C.C.No. 1117/2018 J not collected the documents and at the request of the accused he had paid Rs.16 lakhs by way of cash. Apart from that, the law does not hold that, if the huge amount of Rs.16 lakhs paid by way of cash and not paid either through cheque or DD or through online in such circumstances the said transaction becomes invalid. It is true that, of course Sec.269 SS of Income Tax Act mandates that, any advance made by way of loan of more than Rs.20,000/ should be made by way of cheque or bank draft only, but at the same time in the said provision it is nowhere stated that, noncompliance of the provision will makes the transaction invalidates or void. The same is fortified by the Hon'ble High Court of Karnataka in the decision reported in 2008 (5) KCCR 3371 in a case of Kempanarasimhaiah Vs. P. Rangaraju and others wherein it is held that, "on careful reading of the above observations and also all other observations in the said juddment I could not find the Hon'ble Supreme Court having laid down that, the transactions in contravention of the said provision of Income Tax Act could be termed as the transactions opposed to the public policy so as to bring within the ambit of non 27 C.C.No. 1117/2018 J enforceable transactions. The Hon'ble Supreme Court has not laid down in the said decision that, the transactions of this nature could be termed as opposed to pubic policy and as such the same would be became legally not enforceable." Hence in the light of principal of law laid down by the Hon'ble High Court of Karnataka in the above said decision it is for the income tax authority to take the action against the person who had transacted in contravention to Sec.269 SS of Income Tax Act, but the transaction cannot be termed as opposed to public policy and legally not enforceable. In another decision of Hon'ble Bomby High Court in Crl. Appeal No.322 of 2017 decided on 25.11.2020 in a case of Pushpa Sanchala Kothari Vs. Aarti Uttam Chavan wherein it is held that, Negotiable Instrument Act 1881, Sec.138 - Income Tax Act 1961, Sec.269 SS - Criminal Procedure Code 1973, Sec.378 (4) - Cheque dishonored - Appeal against acquittal - the complainant has not shown the transaction in her income tax returns
- no provision in Income Tax Act which makes an amount not shown in the Income Tax Returns 28 C.C.No. 1117/2018 J unrecovarable - Sec.269 SS of Act 1961, does not declare all transactions of loan, by cash in excess of Rs.20,000/ as invalid, illegal or null and void
- the accused cannot take benefit of such infraction by complainant to show the transaction in income tax returns - The judgment of acquittal rendered by the learned Trial Court is perverse - The impugned judmgnet needs to set aside - Appeal deserves to be allowed." Hence in the light of principal of law laid down by the Hon'ble High Court of Bomby, the defence of the accused in the present case cannot be acceptable one as under Sec.269 SS of the Income Tax Act does not declare all the transactions of the loan by cash in excess of Rs.20,000/ as invalid, illegal or null and void and the accused cannot take benefit of the same to escape from the liability in question. Therefore for the above said reasons though the complainant has admitted that, he has not paid the huge amount of Rs.9 lakhs either through cheque or DD or on line that itself cannot be termed as the transaction in question is not enforceable. It is also relevant here to refer the decision of our Hon'ble High court of Karnataka 29 C.C.No. 1117/2018 J reported in 2019(1) Kar. L.R.185 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat in the said case the Hon'ble High Court of Karnataka held that " Negotiable Instruments Act, 1881 - Sections 138 and 139 Endorsement 'payment stopped by drawer' - The trial court in the instant case, merely considered a suggestion made from the Accused side in the cross examination of PW1 that the complainant was an income tax assessee and that he has not declared the alleged loan transaction in his returns and disbelieved the case of the complainant that too, ignoring that legal presumption under section 139 of the N.I. Act, was operating in favour of the complainant For these reasons, it has to be held that the complainant has beyond reasonable doubt proved the guilt of the Accused punishable under Section 138 of the N.I. Act. As such, the impugned judgment of acquittal passed by the trial court deserves to be set aside and respondent/Accused is liable to be convicted for 30 C.C.No. 1117/2018 J the offence punishable under Section 138 of the N.I. Act. Hence in view of the principles of law laid down by the Hon'ble High court of India in the above referred decision it is for the accused to rebut the presumption existing infavour of the complainant U/s.139 of Negotiable Instruments Act and in view of non production of document could not by itself draw an adverse inference and to hold that, there was no existence of legally enforceable debt or the presumption as envisaged U/s.139 of N.I.Act is successfully rebutted by the accused. In another decision of Hon'ble Madhya Pradesh High Court decided in C.R.R No.5263/2018 dated: 7.3.2019 in the case of Smt. Ragini Gupta Vs. Piyush Dutt Sharma Gwalior., wherein the Hon'ble High Court held that, mere non filing of income tax return would not automatically dislodge the source of income of the complainant and non payment of income tax is a matter between the revenue and assessee and if the assessee has not disclosed his income in the income tax return, then the income tax 31 C.C.No. 1117/2018 J department is well within its right to reopen the assessment of income of the assessee and to take action as per provisions of Income Tax Act, however non filing of income tax return by itself would not mean that, the complainant had no source of income and thus no adverse inference can be drawn in this regard only because of absence of income tax return. Therefore the arguments canvassed by the learned counsel for the accused in respect of non discloser of the transaction in question in income tax returns cannot be acceptable one.
21. It is also true that, the complainant has admitted that, he does not know the date on which the loan amount was given to the accused, but has stated that, in the month of September 2016 had advanced Rs.16,00,000/ to the accused and out of the amount earned from his business and savings has paid Rs.16 lakhs to the accused and has denied the suggestions that, he has not paid Rs.7 lakhs and Rs.9 lakhs to the accused as mentioned in Ex.P.1 and Ex.P.2. The complainant has also denied the suggestions made to him that, the Ex.P.1 and Ex.P.2 cheques are 10 to 15 years old cheques and since 32 C.C.No. 1117/2018 J the said cheques were not in existance as on the date of their presentations, therefore the said cheques have been dishonored and returned with endorsement of Referred To Drawer i.e., the Ex.P.1 and Ex.P.2 returned for the reasons of "Refered To Drawer", but the said suggestion cannot be acceptable one as the cheques cannot be return with an endorsement of Referred To Drawer from the bank since the cheques in question were 10 to 15 years old cheques, therefore the suggestion made by the accused itself is under misconception of law and facts. The complainant has also denied the suggestion that, he has not stated in notice, complaint or affidavit evidence about the date of lending of loan amount to the accused since he had not lend either Rs.7 lakhs or Rs.9 lakhs in favour of the accused and Ex.P.1 and Ex.P.2 cheques have been given to him in respect of the transaction pertains to the year 2005 and same have been misused by him and he has filed this false case against the accused since the accused had filed civil suit for his eviction from the shop premises, therefore on careful perusal of the entire cross examination of the complainant nothing has been elicited to discard or discredit his evidence.
33C.C.No. 1117/2018 J
22. It is also relevant here to mention that, it is the specific defence of the accused that, the complainant had given in writing to the accused stating that, he had collected four cheques of the accused belongs to the United Bank i.e., cheque No.143163 for Rs.50,000/, cheque No.143164 for Rs.1,50,000/, cheque No.143165 for Rs.1,00,000/, cheque No..143167 for Rs.60,000/ and the said written receipt has been given to the accused, but during the course of crossexamination the complainant has categorically denied the said suggestion and the said document was marked as Ex.N.1 only for the purpose of identification. It is true that, the complainant has admitted that, he has no objections to send the writings mentioned in Ex.N.1 for getting expert opinion and also admitted that, has no objections to send the cheques in question for getting expert opinion by sending same to the hand writing expert, but the accused has not made any efforts to get the Hand Writing Expert opinion as suggested to the complainant, in such circumstance mere making suggestions to the complainant as he has issued written receipt by stating that, he had collected four cheques of the 34 C.C.No. 1117/2018 J accused pertains to the United Bank by mentioning the numbers and amounts cannot be considered that, the cheques in question have been collected by the complainant in the year 2005 itself in respect of the alleged transaction as stated by the accused in his defence, therefore on careful perusal of the entire crossexamination of the complainant nothing has been elicited to discard or discredit his evidence.
23. t is also relevant here to mention that, though the accused has denied the lending of loan amounts by the complainant and has taken specific defence that, the complainant has not produce the document to show that, he has lend the loan amounts in question to the accused and the cheques in question have been issued towards discharge of the debt in question. As it is held in the above that, the complainant has proved that, he has lend an amount of Rs.16 lakhs to the accused and in turn issued the Ex.P.1 and Ex.P.2 towards discharge of the said loan amount. Apart from that, as it is already held in the above that, the complainant has complied the mandatory requirements as required U/s.138(a) to (c) N.I.Act by producing oral and documentary evidence and the accused has also 35 C.C.No. 1117/2018 J admitted that, the cheques in question belongs to the account and the signatures found on cheques in question are those of the signatures of the accused and the cheques in question issued in favour of the complainant. It is also proved by the complainant that, the cheques in question have been presented to the bank within their validity period and same have been dishonored for want of sufficient funds and thereafter the complainant got issued legal notice to the accused and in turn the said notice was served on the accused, despite of that, the accused has not issued reply to the said notice, in such circumstance even in the absence of documentary evidence with regard to source of funds, a presumption can be drawn in favour of the complainant with regard to existence of debt or legally recoverable debt. In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in 36 C.C.No. 1117/2018 J the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was an adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque is statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable 37 C.C.No. 1117/2018 J debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15032018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that " When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "
Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the 38 C.C.No. 1117/2018 J accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration 39 C.C.No. 1117/2018 J and the holder of the cheques received the same in existing debt". It is also held that, " the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the 40 C.C.No. 1117/2018 J presumption that, there existed a legally enforceable debt or liability, however such presumption is rebuttable in nature". In another decision of Hon'ble Apex Court of India reported in ICL 2021(2) SC 529 in the case of M/s Kalamani Tex Vs. P. Balasubramanian, dt: 10.02.2021, wherein the Hon'ble Apex Court held that, "once the accused had admitted his signatures on the cheque and deed, the trial court ought to have presumed that, the cheque was issued as consideration for legally enforceable debt." In another decision of Hon'ble Apex Court of Indian in Crl. Appeal No.132/2020 in the case of D. K. Chandel Vs. M/s Wockhardt (L) wherein it is held that, "Production of account books / cash book may be relevant in the civil court, may not be so in the criminal case filed under Sec.138 of N.I. Act while restoring the trial court judgments, the High Court observed that "the reason given by the lower Appellate Court that, he did not bring the cash book or order book etc., could well be understood, if civil suit is tried." But 41 C.C.No. 1117/2018 J may not be so in the criminal case filed under Sec.138 of N.I. Act. This is because of presumption raised in favour of holder of cheque. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied mandatory requirements and has proved that, the Accused has issued the 42 C.C.No. 1117/2018 J cheques in question in his favour and the Accused has admitted the cheques belongs to his account and signatures appearing on the cheques are those of his signatures, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the accused that, the complainant has not produced the documents to show that, he has lent an amount of Rs.16 lakhs to the accused and the documents produced by the complainant are not sufficient to prove that, complainant was having financial capacity to lend the money and complainant has not examined any witnesses to prove that, he has lent the loan amount to the accused cannot be acceptable one. The defence taken by the Accused appears that, the complainant has to prove his claim by producing his evidence as if it is required for proving of his debt before the Civil Court, but same cannot be permissible in a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decision, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, 43 C.C.No. 1117/2018 J cheques in question were drawn for consideration as the Accused has admitted the cheques in question belongs to him and signatures found on the cheques in question are also those of his signatures.
24. In order to rebut the presumption available to the complainant, the accused himself examined as DW1 and stated that, complainant is his tenant and he had given Ex.P.1 cheque to the complainant about 15 years back and the said cheque has been altered as Rs.7 lakhs, though he has obtained only Rs.50,000/, but the complainant altered the amount in the cheque as Rs.7 lakhs. The accused further deposed that, he had also issued Ex.P.2 cheque about 15 years back in respect of the loan amount borrowed in the year 2005 and though he has borrowed Rs.1 lakh, but in Ex.P.2 the amount has been altered as Rs.9 lakhs. The accused further deposed that, he does not know who had written date, name of the payee and amount in figure and words in Ex.P.1 and Ex.P.2 and the account number mentioned in Ex.P.1 and Ex.P.2 are only four digits, but now the account number carries 14 digits. The accused has also deposed that, the complainant has issued written receipt for having collecting of his 44 C.C.No. 1117/2018 J cheques about 15 years back and the said document is already marked as Ex.N.1 and relevant portion marked as Ex.N.1(a). The accused has also stated that, he has not received any notice from the complainant as per Ex.P.5 and shop premises running by the accused is fallen to his share in the partition and he is the owner of the said shop and complainant is tenant under him and has filed suit for eviction against the accused and the said suit is pending before the court and there are differences arose between him and the complainant in the year 2010 in respect of vacating of shop premises by the complainant and after seven months from the date of filing of the civil suit, the complainant has filed this false complaint against him.
25. On careful going through the entire evidence of the accused, the sum and substance of the defence of the accused is he had borrowed an amount of Rs.50,000/ and Rs.1 lakh from the complainant in the year 2005 at that time the complainant had collected four cheques including the cheques in question i.e., Ex.P.1 and Ex.P.2 pertains to the United Bank and the complainant had issued Ex.D.1 for having collected the cheques 45 C.C.No. 1117/2018 J in question. But on perusal of the Ex.D.1 in the document it is nowhere mentioned that, the complainant had collected the cheques which mentioned in Ex.D.1 at the time of alleged lending of loan amount of Rs.50,000/ and Rs.1 lakh in the year 2005 as stated by the accused in his evidence.
The accused in his cross examination has categorically admitted that, "ನಎನ 1 ರಲ ಪರರದದರರರ ರವ ಕರಣಕಕಗ ಹಣ ಪಡದರ ಕಕಕಡರರತತರ ಕಕದರ ಬರದರರವದಲಲ . ನಎನ.1 ರಲ ಚಕ
ನಕ.143163 (ನಪ1) ಮತರತ 143164 (ನಪ2) ಗಳ ಮರಕದ ದನಕಕಗಳನರ ನ ದ ಬರಯಲಗದರ ಅಕದರ ದನಕಕ 2.6.20015 ಮತರತ 1.5.2005 ಅಕದರ ಸದರ ದನಕಕಗಳಕದರ ಆ ಚಕರ ಕ ಗಳನರ ನ ಪಡದರಕಕಕಡ ಬಗಗ ನಮಕದಸಲಗದ. ನಎನ.1 ರಲ ನಪ1 ಮತರತ ನಪ2 ರ ಚಕರ ಕ ಗಳನರ ನ ಅದರಲ ನಮಕದರ ಮಡರರವ ದನಕಕಗಳಕದರ ಪರರದದರರರ ತಗದರಕಕಕಡರರತತರ ಕದರ ಬರದರರವದಲಲ ." Hence the accused himself admitted that, there is no reference of name of the complainant and also not mentioned that, the complainant had received the cheques which have shown in the Ex.D.1. It is also relevant here to mention that, except the production of Ex.D.1 the accused has not produced any satisfactory evidence to show that, the writings found in Ex.D.1 are those 46 C.C.No. 1117/2018 J of the writings of the complainant and the complainant had issued the Ex.D.1 during the year 2005 as alleged by the accused, in such circumstance only on the basis of oral say of the accused that, the complainant had issued Ex.D.1 for having collection of cheques in question and other cheques belongs to the accused during the year 2005 at the time of lending of the alleged loan amount of Rs.50,000/ and Rs.1 lakh cannot be acceptable one. It is also stated by the accused that, he has issued the Ex.P.1 and P.2 in favour of the complainant when he was obtained loan of Rs.50,000/ and Rs.1 lakh respectively, but the complainant had altered the amounts in cheques i.e., Rs.7 lakhs in Ex.P.1 and Rs.9 lakhs in Ex.P.2, in order to prove the said defence except oral say of the accused nothing has been produced before the court either documentary proof or any other satisfactory evidence, therefore the defence of the accused without there being any documentary evidence cannot be acceptable one. It is also important here to mention that, the accused at one breath contents that, the complainant had alter the amounts in cheques, but another breath contents that, he does not know who had written, date, name 47 C.C.No. 1117/2018 J of the payee, amounts in words and figures in Ex.P.1 and Ex.P.2, therefore when the accused himself admitted that, he does not know who had written the contents of cheques, in such circumstance it cannot be held that, the complainant had alter the amounts mentioned in the Ex.P.1 and P.2.
26. It is also relevant here to mention that, during the course of crossexamination of the complainant, the accused has elicited that, there is no objections or hindrance to the complainant to refer the handwritings in Ex.D.1 for getting opinion, but inspite of that has not made any effort to get the Handwriting Expert's opinion, in such circumstances only on the basis of Ex.D.1 it cannot be held that, the writings found at Ex.D.1 are those of the complainant and the complainant had issued the Ex.D.1 in favour of the accused. Therefore on perusal of oral and documentary evidence the accused has miserably failed to prove that, he had borrowed an amount of Rs.50,000/ and Rs.1 lakh as loan from the complainant in the year 2005 and at the time of lending of the loan amount the complainant had collected the cheques in question i.e., Ex.P.1 and Ex.P.2 and other cheques belongs to 48 C.C.No. 1117/2018 J him and to that effect the complainant had issued Ex.D.1.
27. It is also the specific defence of the accused that, due to differences arose between him and the complainant in the year 2010 itself in respect of vacating of shop premises by the complainant and he has also filed a civil suit for eviction of the complainant from the premises in the year 2015 and the said suit is pending before the court, therefore since the year 2010 there is no cordial relationship between him and the complainant and after seven months from the filing of civil suit, the complainant has filed this false complaint against him. In order to substantiate the defence of the accused that, no documents were filed by the accused. If really the complainant has filed this false complaint against the accused after filing civil suit by him, but the accused has not made any efforts to take action against the complainant for nonreturn of his cheques either by issuing legal notice to the complainant or by filing complaint before the concerned police or by filing complaint before the courts of law, but no such efforts have been made by the accused since the year 2010 or after filing civil 49 C.C.No. 1117/2018 J suit against the complainant, therefore the conduct of the accused in nontaking of action for nonreturn of his cheques by the complainant may leads to drawn an adverse inference against the accused that, the Accused has not initiated any action against the complainant since the cheques in question have been issued by the Accused to the complainant towards discharge of the liability in question but not for any other reasons. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt cheques allegedly issued by accused towards repayment of debt Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 50 C.C.No. 1117/2018 J 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt Conviction, Proper". Hence in view of the principles of law laid down by the Hon'ble Apex Court are aptly applicable to the case on hand since in the present case also the accused has not made any efforts to get return of cheques alleged to have been given to the complainant for alleged loan transaction, under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused that, the cheques in question issued by the accused towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted the signatures and cheques in question are belongs to the account of accused.
28. It is also the defence of the accused that, he has issued the Ex.P.1 and Ex.P.2 cheques at the time of borrowing loan of Rs.50,000/ and Rs.1 lakh from the complainant and he does not know who 51 C.C.No. 1117/2018 J had written the date, name of the payee and amounts in figure and words in the cheques. But during the course of his crossexamination has admitted that, the signature found on the cheques in question are those of his signatures and belongs to his account, hence it goes to show that, the accused has admitted the signatures found on the cheques in question are those of his signatures and the said chques are belongs to his account and the cheques in question have been given to the complainant. Therefore once signature on the Negotiable Instrument Act is admitted, in that circumstances Sec. 20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he/she had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that "a reading of sec.20 of the act which is extracted above reveals that, the words used are ' either 52 C.C.No. 1117/2018 J wholly blank or having written therein an incomplete negotiable instrument'. The instrument may be wholly blank or incomplete in a particular in either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so vide that, the party so signing is bound to be a holder in due course. Promissory notes are often executed in the name of the payer and left unfilled to be afterwards filled by the actual holder, the object being to enable the owner to pass it off to another without incurring the responsibility as an endorser. Thus, it is seen that, person in possession of an incomplete instrument in maternal particulars has the authority prima facie to fill it and thus the executants becomes liable to pay the amount due'. In another decision of Hon'ble High Court of Madras reported in 2005 (1) DCR 85 in the case of P.A. Thamatharan Vs. Dalmia cements (B) Ltd., wherein it is held that "
Negotiable Instrument Act 1991 - Sec. 138 -53
C.C.No. 1117/2018 J dishonour of cheque - plea -body of cheque was not written by Accused - held it is not mandatory and no law prescribes that, the body of cheque should also be written by the signatory to the cheque, a cheque could be filled up anybody and if it is signed by the account holder of the cheque'. In another decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Appeal No.1663/2003 dated:
18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the 54 C.C.No. 1117/2018 J question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the 55 C.C.No. 1117/2018 J transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible.
Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law laid down by Hon'ble Apex court of India and also Hon'ble High Court of Karnataka referred above and in the present case also the Accused has admitted his signatures on Negotiable Instrument 56 C.C.No. 1117/2018 J i.e. cheques and he also admitted issuance of the cheques to the complainant, it is primafacie proof of authorizing the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant had misused or fabricated the cheques in question given by him and the defence of the Accused cannot be acceptable one as the instrument i.e., cheques in question cannot be rendered unenforceable merely because the contents have been filled by different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it. Therefore for the above said reasons the arguments canvassed by the learned counsel for the accused are not acceptable one.
29. It is also the specific defence of the accused that, the cheques in question i.e., Ex.P.1 and Ex.P.2 are pertains to the year 2005 and the accused has given the said cheques in the year 2005 at the time of borrowing of loan amount of Rs.50,000/ and Rs.1 lakh, therefore the complainant has misused his old cheques by mentioning the date and presented the said cheques 57 C.C.No. 1117/2018 J to the bank and has filed this false case against him, but the complainant has denied the said suggestions and has clearly stated that, the cheques in question have been issued by the accused as postdated cheques in the year 2016. Even for sake of discussion if it is assumed that, Accused has given cheques in question without mentioning the name of the payee and date to the complainant in such circumstances also it attracts the penal liability as contemplated U/s.138 of N.I. Act. In this regard, it is relevant here to refer decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing 58 C.C.No. 1117/2018 J reasonable plausibility of non existence of presumed fact." In the present case though the Accused has denied the contents of the cheques in question except his signatures, but he did not proved his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I.Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden by complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of 59 C.C.No. 1117/2018 J Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In view of the principles of law laid down as above, even if it is assumed that, the complainant has written his name and date on the cheques in question in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheques in question and it can be presumed that, the said cheques have been issued towards discharge of legally recoverable debt. It is also relevant here to 60 C.C.No. 1117/2018 J refer the decision of Hon'ble Apex court held in (2016) 10 SCC 458 in the case of Sampelly Sathyanarayana Rao Vs. Indian Renewable Energy Development Ltd, wherein the Hon'ble Apex Court held that " (a) Negotiable Instrument Act 1881 - S.138 - If on the date of the cheque liability or debt exist or the amount has become legally recoverable S.138 will apply - not otherwise". In another decision of Hon'ble High Court of Bombay decided in CRMM No.2607/2018 (O & M) dated: 27.8.2019 in the case of Kailash vati Vs. M/s. Ludhiyana Beverages., wherein the Hon'ble High Court held that " A. Negotiable Instrument Act 1881 - S.138 and 6 - Dishonour of cheque date of drawn - Determination of - The date on which the cheque is drawn has to be with reference to the date mentioned in the column in the cheque and not the date on which it was signed Date when the cheque is drawn is not defined in the act - If date of singing cheque is accepted then all post dated cheques cannot be treated as valid cheques 61 C.C.No. 1117/2018 J within and drawer of cheques would stand absolved from criminal prosecution if cheques are presented after three months of the date on which signature were appended". Hence in view of the principles of law laid down by the Hon'ble Apex Court of India, it can be held that, the liability of the debt existed as on the date mentioned on the cheque not as on the date of signature on the cheque, even for sake of discussion the arguments canvassed by the learned counsel for the Accused taken into consideration but in view of the principles of law laid down by the Hon'ble Apex Court and High Court of Bombay it is to be considered that the date on which cheques were drawn has to be with reference to the date mentioned in the cheques but not the date on which they were signed., therefore the arguments canvassed by the learned counsel for the defence that, the complainant has misused the blank cheques issued by the accused cannot be acceptable one.
30. It is a relevant here to mention that, the Accused has also taken specific defence and the learned counsel for the defence has also argued that, the cheques in dispute are of the year 2005 and the 62 C.C.No. 1117/2018 J account number in the alleged cheques i.e., Ex.P.1 and Ex.P.2 having four digits account number, therefore the cheques in dispute have been misused by the complainant by mentioning the date and has presented the said cheques during the year 2017. On careful perusal of the defence of the Accused and arguments canvassed by the learned counsel for the defence, it appears that, according to the Accused the cheques in question are of the year 2005 as having account number four digits only, but the complainant misused the same, but as it is already held in the above that, the complainant has proved that, the cheques in question were issued to him and the bank has presented to the bank in turn the bank has issued an endorsement date:
16.10.2017 as per Ex.P.3 and Ex.P.4 stating that, the cheques in question were dishonored for the reason of "Refer to Drawer' in the account of Accused after verification and perusing the said cheques, therefore the question of misusing of cheques by the complainant as alleged by the accused does not arise at all. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in (2012) 13 SCC 375 in the case of Lakshmi 63 C.C.No. 1117/2018 J Dyechem Vs. State of Gujrath, wherein it is held that, "Negotiable Instruments Act. Sec.138.
Return of cheque with endorsement "Account Closed" "Payment Stopped" "Referred to Drawer"
"Signature Do Not Match" "Image is Not Found".
Any attempt to prevent the cheque from being honored would be an offence." In this case also the cheques in question dishonored for the reason of "Referred to Drawer", therefore it can be held that, the accused has made an attempt to prevent the cheques in question from being honored, in such circumstances also it attracts an offence U/Sec.138 of N.I. Act.
31. It is also relevant here to mention that, It is the specific defence of the Accused that, the cheques in question were issued in the year 2005 to the complainant at the time of availing loan of Rs.50,000/= and Rs.1 lakh from him, however this court has already held in the above that, the Accused has miserably failed to prove the defence that, the cheques in question i.e Ex.P.1 and P.2 were issued as blank signed cheques in favour of the complainant in the year 2005 itself and the Accused has not produced any concrete evidence to prove his 64 C.C.No. 1117/2018 J defence or to disprove the loan transaction in question, in such circumstances, in the absence of evidence, cannot be held that, the cheques were issued in the year 2005 as alleged by the Accused. In this regard, it is relevant here to refer the decision of Hon'ble Apex court of India reported in AIR 2015 SC 2240 in the case of T. Vasanthakumar Vs. Vijayakumari wherein the Hon'ble Apex court held that "NEGOTIABLE ISNTRUMENTS Act, 1881 Section 138 and 139 - Dishonour of cheque - appeal against acquittal cheque as well as signature on it not disputed by Accused /respondent presumption U/s.139 would be attracted - story brought out by Accused that cheque was given to the complainant long back in 1999 as security to a loan : the loan was repaid but complainant did not return security cheque Is unworthy of credit , apart from being unsupported by any evidence - mere printed date on cheque by itself cannot be conclusive of fact that, cheque was issued in 1999". Hence in the present case also it is the main defence of the Accused that the cheques in dispute and 65 C.C.No. 1117/2018 J promissory notes alleged to have been issued in the year 2005 itself to the complainant in respect of the loan amount borrowed by the accused in the year 2005 and the complainant by misusing the said cheques has filed this complaint but the Accused has admitted the issuance of cheques and his signatures on the said cheques and has not produced any documents or proof to prove his defence in such circumstances by applying the principles of law laid down in the above decision, the defence of the Accused cannot be acceptable one. Therefore for the above said reasons, the arguments canvassed by the learned counsel for the defence to that effect cannot be acceptable one and are not sustainable in law.
32. It is also important to note here that, the Accused has not denied or disputed that the cheques in question as well as the signatures therein do belong to him and he has failed to prove his defence and how the cheques in question have come to the possession of the Complainant, this would also give rise to an adverse inference against him. This preposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 66 C.C.No. 1117/2018 J 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa". In another decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava" held that, "the Accused has to explain how the cheque entered into the hands of complainant". Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
33. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, he has lent an amount of Rs.16 lakhs to the accused in the month of September 2016 and in turn the Accused has issued the Ex.P.1 and Ex.P.2 for sum of Rs.7 lakhs and Rs.9 lakhs in total Rs.16 lakhs in his favour towards discharge of the said loan amount and thereafter the complainant has presented the said 67 C.C.No. 1117/2018 J cheques through his banker and same were returned dishonored with an endorsement of "Referr to Drawer" and thereafter he got issued legal notice to the accused and the said notice was served on him, inspite of it, the Accused did not paid the cheque amount, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available in favour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 and Ex.P.2 Cheques. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
34. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation 68 C.C.No. 1117/2018 J is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following : ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.25,25,000/= (Rupees Twenty Five Lakhs and Twenty Five Thousand only) within one month from the date of order, in default accused shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.25,20,000/= (Rupees Twenty Five Lakhs Twenty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= 69 C.C.No. 1117/2018 J (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 21st day of September 2021).
.
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant: P.W.1 : Sri. K. Vijay Kumar
2. List of documents exhibited on behalf of the Complainant: Ex.P.1 & 2 : Original two Cheques Ex.P.1(a) & 2(a) : Signatures of the accused Ex.P.3 & 4 : Bank Memos Ex.P.5 : Office copy of the Legal Notice Ex.P.6 : Postal Receipt Ex.P.7 : Postal Track Result 70 C.C.No. 1117/2018 J Ex.P.8 : Certificate Ex.P.9 : Certified copy of Notification Ex.P.10 & 11 : Certified copy of Paper Publication Ex.P.12 : Certified copy of Letter dated 19.11.2009 Ex.P.13 : Certified copy of Letter
3. List of witness/s examined on behalf of the Accused: DW.1 : Sri. K. Shekar
4. List of documents exhibited on behalf of the Accused: Ex.N.1 : Receipt (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.
71C.C.No. 1117/2018 J 21.09.2021 case called, Both complainant and counsel for the complainant absent, counsel for the accused absent and accused present. Judgment pronounced in the open court, (vide separate judgment).
ORDER
Acting U/sec.255(2) of
Cr.P.C. the accused is convicted
for the offence punishable
U/sec.138 of N.I.Act.
The accused is sentenced to
pay a fine of Rs.25,25,000/=
(Rupees Twenty Five Lakhs
and Twenty Five Thousand
only) within one month from
the date of order, in default
accused shall under go simple
imprisonment for a period of (3)
three months for the offence
punishable U/sec.138 of
N.I.Act.
Further acting U/sec.357(1)
of Cr.P.C. out of the fine amount
on recovery, a sum of
Rs.25,20,000/= (Rupees
Twenty Five Lakhs Twenty
Thousand only) shall be paid
as compensation to the
complainant.
72
C.C.No. 1117/2018 J
Further acting U/sec.357(1)
(a) of Cr.P.C. out of fine amount
on recovery a sum of
Rs.5,000/= (Rupees Five
Thousand only) shall be
defrayed as prosecution
expenses to the state.
The Bail bond of the Accused
stands cancelled.
Office is directed to furnish
free certified copy of this
judgment to the Accused
incompliance of Sec.363(1) of
Cr.P.C.
XVI ACMM, B'luru.