Bangalore District Court
M.R.Satyamurthy vs Sudhakar Rajachar on 25 February, 2022
IN THE COURT OF THE XVIII ADDL.CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
PRESENT: MANJUNATHA M.S. B.A., LL.B.
XVIII ADDL.C.M.M., BANGALORE
DATED : THIS THE 25th DAY OF FEBRUARY 2022
Criminal Case No.15835/2017
COMPLAINANT: M.R.Satyamurthy,
S/o Sri.Ramanna,
Aged about 61 years,
R/o No.258, 4th Main Road,
Mahalakshmi Layout,
Bengaluru-560 079.
(By Sri.K.B.P- Advocate)
// Versus //
ACCUSED: Sudhakar Rajachar,
S/o Rajachar,
Aged about 55 years,
R/o D.No.402, 4th Floor,
"Hemadri Residency,"
Site No.1020, Dr.Rajakumar
Road, 4th Block, Rajajinagar,
Bengaluru-560 010.
Mobile No.9620959198,
(By Sri.P.M - Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Name of the complaint : M.R.Satyamurthy,
S/o Sri.Ramanna,
Date of commencement
of evidence : 15-09-2017
2 Judgment C.C.15835-2017
Date of closing evidence : 16-02-2022
Opinion of the Judge : Accused found guilty.
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE.
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 of the Negotiable Instruments Act (in short referred as "N.I. Act") against the accused alleging that he has committed the offence punishable under section 138 of NI Act.
02. The sum and substance of the complaint is as follows; The complainant and accused are known to each other. In the month of May 2016 the accused had approached the complainant for financial help for Rs.10,00,000/- for purpose of his niece's marriage and promised that he will repay the same in the month of March 2017. Considering his request, the complainant has paid Rs.10,00,000/- to the accused on different dates in between May 2016 to January 2017. In the first week of March 2017 the accused has issued one post dated cheque bearing No. 024622, dated 27-03-2017, drawn on 3 Judgment C.C.15835-2017 ICICI Bank, Rajajinagara Branch, Bengaluru towards discharge of his liability. The complainant has presented the said cheque for encashment through his banker i.e.,Syndicate Bank, Vidyaranyapura Branch, Bengaluru. The said cheque was returned unpaid for the reason "Funds Insufficient" in the drawer's account as per bank endorsement 28-03-2017. Thereafter, the complainant has got issued demand notice on 04-04-2017 to the accused by demanding the payment of cheque amount. The said notice was duly served on the accused. Despite of the demand notice the accused has not paid the cheque amount and thereby he has committed an offence punishable under section 138 of NI Act.
03. After filing of complaint, this court has taken cognizance of the offence punishable under section 138 of Negotiable Instrument Act, sworn statement of the complainant was recorded. Being satisfied that there are prima-facie materials to proceed against accused, summons was issued. After appearance, the accused was enlarged on bail and his plea was recorded as per section 251 of Cr.P.C. The accused has not pleaded guilty but submitted that he has defense to make.
4 Judgment C.C.15835-2017
04. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in (2014) 5 SCC 590, the sworn statement of the complainant treated as complainant evidence and complainant has examined himself as PW1 by filing affidavit of chief-examination and got marked Ex.P.1 to 4. The accused has filed application under section 145(2) of NI Act for recall of PW1 for the purpose of cross-examination. The said application came to be allowed and defence counsel has fully cross- examined PW1.
05. On perusal of the case records, it is noticed that initially this court has convicted the accused and sentenced him to pay fine of Rs.11,00,000/- and in default he shall undergo simple imprisonment for a period of one year vide judgment dated 04-10-2018. Aggrieved by the judgment of this court, the accused has preferred Criminal appeal No.2029/2018 before the Hon'ble LXIV Addl. City Civil & Sessions Judge, Bangalore City. The said appeal came to be dismissed by confirming the judgment of conviction and sentence passed by this court vide judgment dated 06-03-2019. As against the judgment of Hon'ble LXIV Addl. City Civil & Sessions Judge, Bangalore City the accused has preferred Criminal Revision Petition 5 Judgment C.C.15835-2017 No.374/2019 before the Hon'ble High court of Karanataka. The Hon'ble High court by its order dated 23-10-2021 has allowed the criminal revision petition and set aside the judgment of conviction and sentence and remanded the matter for fresh disposal in accordance with law and directed the parties that they shall appear before this court on 15-11-2021. The Hon'ble High Court has directed to record the statement of accused and if an application is made, permit the accused to lead defence evidence. The Hon'ble court also directed to dispose of the matter on or before 28-02-2022 with a direction to the parties to co-operate for the same.
06. After receipt of case file and copy of the order passed in Crl. R.P 374/2019 from Hon'ble High Court of Karanatka, the present case was restored and taken on board on 15-11-2021, but the complainant and accused have remained absent on the said date despite of the clear direction from the Hon'ble High court. Thereafter the presence of the accused was secured by issuing non bailable warrant and the statement of accused as contemplated under section 313 of code of criminal procedure was recorded. The accused has denied all the incriminating material appears against him in the complainant's evidence and submitted that he wish to 6 Judgment C.C.15835-2017 lead defence evidence. Thereafter on 02-12-2021 the counsel for the accused filed application under section 311 of Cr.P.C for recall of PW1 for the purpose of further cross-examination. The said application came to be allowed and the defence counsel has fully cross-examined PW1 and case was posted for defence evidence. On 04-01-2022 Hon'ble High court of Karnataka has issued SOP due third wave of Covid-19 cases and imposed several restrictions on court functioning comes under Banaglaore Urban District. On 14-01-2022 the accused himself examined as DW1 through Video conference and posted the case for cross-examination of DW-1. On 16-02-2022 the accused/DW1 has appeared through video conferencing to tender himself for cross-examination and the complainant counsel has fully cross examined DW1.
07. Heard the arguments of learned counsel for complainant and accused. I have perused the materials available on record.
08. The points that arise for my consideration are as follows;
1. Whether the complainant has proves that the accused has issued cheque bearing No. 024622 dated 27-3-2017 for Rs. 10,00,000/-towards discharge of his debt, which was returned unpaid on presentation for the reason "Funds 7 Judgment C.C.15835-2017 Insufficient" in the drawer's account and despite of demand notice he failed to pay the cheque amount with in the time stipulated and thereby he has committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
09. My answer to the above points is as follows;
Point No.1: In the Affirmative.
Point No.2: As per final order for the following REASONS
10. POINT No.1: The Complainant has filed this complaint alleging that the accused has committed offence punishable under section 138 of N.I. Act. The complainant has pleads and asserts that, the accused has borrowed hand loan of Rs.10,00,000/- from him on different dates in between May 2016 to January 2017 for his niece's marriage and promised to repay the same in the month of March 2017. Towards discharge of aforesaid debt the accused has issued cheque in question for Rs.10,00,000/- in the first week of March 2017. He has presented the said cheque through his banker. The said cheque was returned unpaid with an endorsement "Funds 8 Judgment C.C.15835-2017 Insufficient" in the accused's account. Thereafter he got issued demand notice within time stipulated calling upon the accused to pay the amount covered under cheque. Despite of service of notice, the accused has not paid the amount within 15 days, which gave raise cause of action to file this complaint.
11. To substantiate his case, the complainant has stepped into witness box and examined as PW.1 and got marked Ex.P-1 to Ex.P-
4. PW1 has reiterated the contents of the complaint in his affidavit evidence about lending of amount of Rs.10,00,000/- to the accused, issuance of cheque by the accused towards discharge his debt and its dishonour for Funds insufficient, issuance of legal notice to the accused calling upon him to pay the amount covered under cheque and his failure to comply the same.
12. In this scenario, let me scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 is cheque dated 27-03-2017. The said cheque was returned unpaid with an endorsement "Funds Insufficient" as per Ex.P.2 bank endorsement dated 28-03-2017, Ex.P.3 is legal notice dated 04-04-2017 under which the complainant has demanded the 9 Judgment C.C.15835-2017 payment of cheque amount and Ex.P.4 is postal acknowledgment dated 15-04-2017. This complaint came to be filed on 05-05-2017. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act have been complied with and this complaint is filed within time. The complainant has discharged his initial burden by examining himself as PW1 and by producing aforesaid documentary evidence. Thus, complainant is entitle to relied on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act. Section 118 reads as here:- "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". Further Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here: - "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, or any debt or other liability." A combined reading of above said sections raises a presumption in 10 Judgment C.C.15835-2017 favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability.
13. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence in the scale of preponderance of probability to rebut the presumption available to the complainant. In the present case, the accused has denied the borrowing loan of Rs.10,00,000/- from the complainant and also denied the issuance of cheque in question for discharge of said alleged debt. He putforth his defence that the complainant was doing solar business. He contacted the complainant for installation of solar lift in his house. As per the terms and conditions of the business the complainant collected blank signed cheque for security purpose from him. During the year 2015-16 there was business due of Rs.6,00,000/- and same was repaid by him within the stipulated period as per terms and conditions of the business agreement, but the complainant has failed to return the said security cheque in the pretext that the cheque has been misplaced and assured that he will return the same as soon as he traced it, believing his version he has not pressurized him. After lapse of year the complainant has misused the said security cheque by filling it as per his whims and 11 Judgment C.C.15835-2017 fancy for his wrongful gain and got it bounced. Therefore the cheque in question was not issued for discharge of debt or any other liability but it was issued for security of the aforesaid solar transaction, as such section 138 of NI Act is not attracted. The accused also questioned the financial capacity of the complainant to lend such huge amount of Rs.10,00,000/- at the relevant point of time.
14. In order to rebut the said presumption, the accused has fully cross-examined PW1 and also led defence evidence by examining himself as DW1. During chief-examination he has reiterated his defence. In support of his defence the accused has not produced any documents. During the cross-examination, PW1 has admitted that he is doing solar business, but he denied any transaction with accused and also denied receipt of security cheque from him.
15. In this back drop of the rival contention, this court has given anxious consideration to the materials available on record and the arguments canvased by both counsels. At the outset, it is pertinent to state that the accused has not disputed issuance of cheque in question and his signature found in the said cheque. The only contention of the accused so far as the cheque is concerned that he 12 Judgment C.C.15835-2017 has issued the said cheque as a security for solar transaction. During the chief-examination the accused has specifically stated that as per the terms and conditions of the business, the complainant has collected blank signed cheque for security purposes from him and he has misused the said cheque by filling it as per his whims and fancy for his wrongful gain. During cross-examination, the accused has admitted that Ex.P1 cheque belongs to him and it bears his signature. This admissions of the accused goes without saying that, he has not disputed the issuance of cheque in question and signature found therein. When the drawer has admitted the issuance cheque as well as the signature present therein, the presumption envisaged under section 118 Read with section 139 of NI Act, would operate in favour of the complainant. The said provisions lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder the court shall presume that the instrument was endorsed for consideration. So also, in the absence of contrary evidence on behalf of the accused, the presumption under section 118 and 139 of the NI Act, goes in favour of the complainant. No doubt, said statutory presumptions are rebuttable in nature. As discussed earlier, when the complainant has 13 Judgment C.C.15835-2017 relied upon the statutory presumptions enshrined under section 118 read with section 139 of NI Act, it is for the accused to place the cogent and probable defence to rebut the presumptions raised in favour of the complainant. To put it other way, the burden lies upon the accused to prove that Ex.P.1 cheque was not issued to the complainant for discharge of any debt or liability, but the complainant has misused the security cheque. It is worth to note that, Section 106 of Indian Evidence Act postulates that, the burden is on the accused to establish the fact which is especially within his special knowledge. This provision is exception to the General Rule that, the burden of proof is always on the prosecution to establish their case beyond all reasonable doubt. In that view of the matter, the burden is on the accused to prove that the cheque in question was not issued for discharge of debt or any liability.
16. It is the specific case of the complainant that he has paid Rs.6 lakhs through RTGS and Rs.4 lakhs by cash to the accused on different dates from May 2016 to January 2017. During his evidence he has reiterated said contention by deposing that out of his savings he has paid Rs.4 lakhs by cash and Rs.6 lakhs through RTGS by borrowing loan on his retirement benefit amount. To prove his 14 Judgment C.C.15835-2017 source of income the complainant has not exhibited any documents in his evidence. However he has produced his bank account statement, which is in the case file. On perusal of the same, it appears that on 27-01-2017 the complainant has transferred Rs.6 lakhs from his account to the accused through RTGS. During cross- examination of PW1 at page No.8, the defence counsel has suggested that the complainant has received Rs.6 lakhs from the accused as security in the Solar purchase transaction and as per demand of the accused the complainant has repaid the said amount to the accused through RTGS. By putting said suggestion the accused has admitted that he has received Rs.6 lakhs from the complainant through RTGS. To the contrary, during the chief- examination, the accused contended that during the year 2015-16 there was business due of Rs.6,00,000/- and same was repaid by him to the complainant. There is no averment in his chief examination regarding payment of security deposit amount of Rs. 6 lakhs for solar lift installation to the complainant and refund of said Rs.6 lakhs through RTGS by the complainant as suggested in the cross- examination of PW1. This aspect shows that the defence taken by the accused during cross-examination is different from the defence 15 Judgment C.C.15835-2017 taken by him in his chief-examination. Hence it appears that the accused goes on changing his stand to escape from the criminal liability. The complainant has consistently deposed that the accused has borrowed Rs.10,00,000/- from him and out said Rs.10 lakhs he has paid Rs.6 lakhs through RTGS and Rs.4 lakhs through cash on different dates between May 2016 to January 2017. No doubt the complainant at page No.9 of his cross-examination at 13 th line admitted the suggestion of defence counsel that he has misused security cheque. But thereafter during his cross-examination on several occasions he has consistently denied the suggestion of defence counsel that he has misused the security cheque issued by the accused in solar transaction. On perusal of overall version of PW1, it appears that he might have inadvertently and without understanding the suggestions of the defence counsel has admitted the suggestion that he has misused security cheque. Hence cannot be give much emphasis on the aforesaid stray admission alone by isolating his other contentions. On the other hand except his self serving statement the accused has not produced any document to establish that alleged solar transaction and issuance of cheque as security. In the absence of any positive evidence on behalf of the 16 Judgment C.C.15835-2017 accused it is very difficult to believe the version of the accused that he has issued blank signed cheque for security in alleged solar transaction.
17. The accused contended that as per the terms and conditions of the business the complainant collected blank signed cheque for security purpose from him and inspite of clearing due of Rs.6,00,000/- in the year 2015-16 the complainant has failed to return the security cheque in the pretext that the cheque has been misplaced. If at all, the complainant has not returned the cheque allegedly issued towards security of solar transaction, what prevented the accused to lodge the police complaint or to take suitable steps to secure the said cheque or to give intimation to bank to stop the payment, is not satisfactorily explained by the accused. The accused during his cross-examination has admitted that he has not issued reply notice and no legal action has taken against the complainant till today regarding misuse of security cheque. No prudent man will sit quite without taking any steps to take back his blank signed cheque. Therefore from this point of view the defence of the accused appears to be not a probable one.
17 Judgment C.C.15835-2017
18. The complainant contended that the accused has not issued reply notice by stating his contention. Non replying the demand notice itself shows that he has voluntarily issued cheque in question for repayment of debt. On perusal of the documents produced by the complainant, it appears that after dishonour of cheque the complainant has issued demand notice to the accused as per Ex.P3 by demanding the payment of cheque amount and the said notice was duly served on the accused as per Ex.P4 postal acknowledgment. Even the accused also admitted receipt of legal notice during his cross-examination. Despite of service of notice, the accused has not chosen to reply the same by taking all his defence at the earliest point of time. Hence considering the fact and circumstance of the case, non issuing reply notice at the earliest point of time is fatal to the defence of the accused.
19. The accused also taken contention that except signature in the Ex.P.1 cheque all other writings are not in his hand writing, the complainant has filled the Ex.P.1 cheque for his convenience. As stated above the accused has admitted that cheque in question belongs to him and it bears his signature. Further he has taken contention that the said cheque was issued for security. Under such 18 Judgment C.C.15835-2017 circumstances section 20 of the NI Act has gives authority to the holder of the cheque to make or complete it as negotiable instruments, for any specified therein. The person so signing shall be liable upon such instrument. In this point it is appropriate to refer judgment reported in (2019) AIR 16 in Bir Singh Vs Mukesh Kumar , Hon'ble Apex court has held that " A meaningful reading of the provisions of the Negotiable Instruments Act including in particular, section 20, 87 and 139 of makes it amply clear that a person who signs a cheque and makes it once to the payee remain liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is dully signed by the drawer. If the cheque is otherwise valid, the penal provision of section 138 would be attracted". Hence in view of the above proposition of law the contention of the accused that except the signature in the Ex.P.1 cheque all other writings are not in his hand writing and the complainant has filled the Ex.P.1 cheque for his convenient has no value at all.
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20. The accused has questioned the financial capacity of the complainant to lend Rs.10 lakhs to the accused during the relevant point of time. Regarding financial capacity of the complainant is concerned, it is appropriate to refer judgment reported in In Rohitbhai Jivanlal Patel v. State of Gujarat : AIR 2019 SC 1876, Wherein the Hon'ble Supreme Court has observed that "The observations of the trial court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Section 118 and section 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors 20 Judgment C.C.15835-2017 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 Basalingappa v. Mudibasappa : AIR 2019 SC 1983, the Hon'ble Apex Court observed that "During his cross-examination, when financial capacity to pay Rs.6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts". In APS Forex Service Private Limited v. Shakti International Fashion Linkers AIR 2020 SC 945, the Hon'ble Apex Court has clarified and explained the issue as follows "Now so far as the reliance is placed by Learned Counsel appearing on behalf of the accused on the decision of this Court in the case of Basalingappa (supra), on going through the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand and/or the same shall not be of any assistance to the accused. In that case before this Court, the defence by the accused was that the cheque amount was given by the complainant 21 Judgment C.C.15835-2017 to the accused by way of loan. When the proceedings were initiated under Section 138 of the N.I. Act the accused denied the debt liability and the accused raised the defence and questioned the financial capacity of the complainant. To that, the complainant failed to prove and establish his financial capacity. Therefore, this Court was satisfied that the accused had a probable defence and consequently in absence of complainant having failed to prove his financial capacity, this Court acquitted the accused. In the present case, the accused never questioned the financial capacity of the complainant. We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque". Hon'ble Karnataka High Court judgment in Kuberappa Vs M/s Nirmal Enterprises and others in 22 Judgment C.C.15835-2017 Criminal Appeal No. 2654/2011 has followed the law laid down in the Basalingappa v. Mudibasappa.
21. The crux of the decisions referred to above is that the complainant has no obligation, in all cases under section 138 of NI Act, to prove his financial capacity. But, when the case of the complainant is that he lent money to the accused by cash and that the accused issued the cheque in discharge of the liability, and if the accused challenges the financial capacity of the complainant to advance the money, despite the presumption under section 138 of the Act, the complainant has the obligation to prove his financial capacity or the source of the money allegedly lent by him to the accused. The complainant has no initial burden to prove his financial capacity or the source of the money. The obligation in that regard would arise only when his capacity or capability to advance the money is challenged by the accused.
22. In the present case, the accused has challenged the financial capacity of the complainant to lend an amount of Rs.10,00,000/- at the relevant point of time. In the back drop of the said contention raised by the accused regarding financial capacity of the complainant and the law laid down by the Hon'ble Apex court in the 23 Judgment C.C.15835-2017 above referred judgment let me examine whether the complainant had financial capacity to lend Rs.10 lakhs at the relevant point of time. According to the complainant, he is a retired Government servant and received retirement benefit and also doing solar business as such he had financial capacity to lend such huge amount at the relevant point of time. As referred above the accused himself admitted that he has received Rs.6 lakhs through RTGS from the complainant and he also admitted that the complainant is doing solar business. Under such circumstance one can easily draw a presumed that the complainant had capacity to lend amount of Rs.10 lakhs to the accused at the relevant point of time. Apart from the said admission, the complainant has produced his bank statement, which is found in the case record. On perusal of the same it appears that on 01-04-2016 the complainant had bank balance of Rs.16,02,344/- in his account. On 27-01-2017 he has transferred Rs.6 lakhs to the accused through RTGS. In between 01-04-2016 to 27-01-2017 the complainant had good bank balance in his account. During the said period he has periodically credited the amount and also withdrawn the amount from his account. The bank transaction of the 24 Judgment C.C.15835-2017 complainant clearly suggested that he had financial capacity to lend Rs.10 lakhs at the relevant point of time.
23. As far as proof of existence of legally enforceable debt is concerned, it is profitable to refer the decision of larger bench of the Hon'ble Apex Court reported in Rangappa Vs. Mohan reported in AIR 2010 SC 1898, Wherein their lordships pleased to observe that, "In the light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by section 139 of the Act does indeed include the existence of the legally enforceable debt or liability". In another decision reported in, (2015) 8 SCC 378 in the case of Vasanthakumar Vs. Vijayakumari, it is held that once the accused has admitted the issuance of Cheque as well as signature on it, the presumption under section 139 would be attracted. In K.N. Beena Vs Muniyappan and another reported in (2001) 8 SCC 458, the Hon'ble Apex Court, refers to Hiten P. Dalal Vs. Bratindranath Banerjee and holds that, on the factual matrix, that bare denial of the liability in reply notice is not sufficient to shift the burden of proof on the complainant to prove that the cheque was issued for a debt or liability. In view of the law laid by the Hon'ble Apex Court, the presumption enshrined under 25 Judgment C.C.15835-2017 section 139 of the N.I. Act is extendable to the existence of legally enforceable debt. The story brought by the accused is unworthy of credit and not supported by any acceptable evidence. In other words, accused has not placed cogent material to rebut the said presumption. The Hon'ble Supreme Court of India pleased to discuss aforesaid aspect in detail in the decision reported in, Rangappa Vs. Mohan reported in AIR 2010 SC 1898. It is relevant to reproduce said observations; " Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the court in favour of the complainant. The presumption referred to in Section 139 of the NI Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under the given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be 26 Judgment C.C.15835-2017 probable and capable of being accepted by the court. The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered... "
24. It is further observed in para 18 of the decision that, Ordinarily in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumptions contemplated by Section 139 of the Act. " Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. These provisions were intended to discourage people from not honouring their commitments by way of payment through cheques. In view of Section 139, it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the
27 Judgment C.C.15835-2017 person who wants to rebut the presumption. A contrary view would render S.138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong..." The Hon'ble Apex court clearly laid down the ratio that, when the ingredient of section 138 of NI Act is complied with, presumption shall be drawn in favour of the complainant. The burden is upon the accused to rebut the statutory presumptions.
25. Further, it is profitable to refer the authorities reported in, AIR 2019 Supreme Court 2446 in the case of Bir Singh Vs. Mukesh Kumar, it is held that;"Presumptions are rules of evidence and do not conflict with presumption of innocence, which requires prosecution to prove case against accused- Obligation on prosecution may be discharged with help of presumptions of law and presumptions of fact unless accused adduces evidence showing reasonable possibility of non-existence of presumed fact. Onus to rebut presumption that cheque issued in discharge of debt or liability is on accused. " In the decision reported in, AIR 2019 SUPREME COURT 1876, in the case Rohitbhai Jivanlal Patel Vs. State of 28 Judgment C.C.15835-2017 Gujarat and Another; wherein it is held that Once presumption of existence of legally enforceable debt drawn in favour of complainant, onus is shifted on accused- Unless onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused."In view of the law laid down in the aforesaid Rangappa's case and Bir Singh's case, the claim of the complainant is acceptable and the defence taken by the accused is not a probable one.
26. From the discussion made above, it is clear that, the accused has neither taken probable defence nor taken steps to prove the same. The contention of the accused that, disputed cheque was not issued towards discharge of his liability is also not proved through cogent and acceptable evidence. To put it other way, accused has not taken and proved probable defence to rebut the presumption of law available in favour of the complainant, envisaged under section 118 read with section 139 of N.I. Act. Accordingly, the case of the complainant is acceptable. The Complainant has proved that, for discharge of liability accused has issued Ex.P1 cheque and he has intentionally not maintained sufficient amount in his account to 29 Judgment C.C.15835-2017 honour the said cheque. Hence, this point No.1 under consideration is answered in the Affirmative.
27. POINT NO.2: In view of the reasons stated and discussed above, the complainant has proved the guilt of the accused punishable under section 138 of N.I. Act. Hon'ble Supreme Court of India in a decision reported in, (2015) 17 SCC 368, in a case of H.Pukhraj Vs. D.Parasmal, observed that, having regard to the length of trial and date of issuance of the cheque, it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Further the Hon'ble Apex Court in its recent decision in M/s. Meters & instrument Pvt Ltd. Vs. Kanchana Mehta reported in (2018)1 SCC-560 held at para 18 that "The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the court." Therefore, keeping in mind the time when the transaction has taken place and primary object of the provision, this court is of the opinion that, rather than imposing punitive sentence, if sentence of fine is imposed with a 30 Judgment C.C.15835-2017 direction to compensate the complainant for its monitory loss, by awarding compensation U/Sec.357 of Cr.P.C, would meet the ends of justice. The amount covered under the disputed cheque is Rs.10,00,000/-. The date of cheque is 27-03-2017. By considering all these aspects, this court is of the opinion that, it is just and proper to imposed fine amount of Rs.12,05,000/-, which includes interest and cost of litigation, out of which compensation of Rs.12,00,000/- has to be awarded to the complainant U/s 357 Cr.P.C. Accordingly, this court proceeds to pass the following;
ORDER Acting under section 255 (2) of Criminal Procedure Code, accused is here by convicted for the offence punishable under section 138 of Negotiable Instrument Act and accused is sentenced to pay fine of Rs.12,05,000/-(Rupees Twelve Lakhs and Five Thousand only). In default thereof accused shall undergo simple imprisonment for the term of 6(Six) months.
Acting under section 357(1) (b) of code of criminal procedure, it is ordered that, Rs.12,00,000/- ( Rupees 31 Judgment C.C.15835-2017 Twelve Lakhs only), therefrom shall be paid to the complainant as a compensation, remaining fine amount of Rs.5,000/-(Rupees Five Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
Office is directed to supply free copy of the judgment to the accused.
(Directly dictated to the Stenographer on computer, typed by her, corrected by me and then judgment pronounced in the open court on this the 25 th day of February 2022).
(MANJUNATHA M.S.) XVIII A.C.M.M.,BANGALORE ANNEXURE
1) LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : M.S.Sathyamurthy .
2) LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P.1 : Cheque. Ex.P.1(a) : Signature of the accused. Ex.P.2 : Bank endorsement. Ex.P.3 : Office copy of demand notice. Ex.P.4 : Postal acknowledgement.
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
D.W.1 : Sudhakar Rajachar
32 Judgment C.C.15835-2017
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED: -
- Nil -
(MANJUNATHA M.S.)
XVIII A.C.M.M.,BANGALORE
33 Judgment C.C.15835-2017
Accused Absent. Defence counsel present and filed an application under section 353(6) of Cr.P.C. Perused. Allowed.