Bangalore District Court
Navashakthi Chits Pvt. Ltd vs Mr. Kumar. C on 1 October, 2024
C.C.NO.11038/2023
0
KABC030190992023
Presented on : 11-05-2023
Registered on : 11-05-2023
Decided on : 01-10-2024
Duration : 1 years, 4 months, 20 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
BA.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 01st DAY OF OCTOBER-2024
C.C.NO.11038/2023
Complainant: Navashakthi Chits Pvt.,Ltd.,
R/by its Legal Executive,
Raghuprasad.G, Age: 44 years,
Office at No.553/7, 1st Floor, 7th Cross,
3rd Main, Ayyappa Temple Road,
Prakash Nagar, Bangalore-560021.
Email: [email protected]
(By Sri.Leelakantaswamy.C.S.,Adv.,)
V/s
Accused: Mr.Kumar.C S/o Chinaswamy.C
Age: Major, R/at No.99/8,
3rd 'A' Cross, Kushalappa Layout,
Bhuvaneshwari Nagar, R.T.Nagar,
Bengaluru-560032.
O/at: V.K.T. Stones,
# 18/2, 60 feet Road,
Muddinapalya Main Road,
Near Ullala RTO,
C.C.NO.11038/2023
1
Opp: Kalpana Gas Gowdan,
Bengaluru-560091.
Ph.No.9886266145.
(By Smt.Roopa.C.,Adv.,)
:JUDGMENT:
This case arises out of the private complaint filed by the complainant against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that it is a corporate body registered under the companies act, doing its chits business under the chit funds act. One Mr.Shivakumar.N is a subscriber in the aforesaid branch and he has entered into a chit group No.N01/MC/020/08 for a value of Rs.10,00,000/- per month of Rs.25,000/- the period of 40 months. The accused had participated in the chit auction held on 20.12.2019 and in the said auction he bid the chit amount of Rs.3,00,000/-, thereafter on 18.02.2020 he had received prize money of Rs.7,00,000/-. Thereafter, he had executed surety form, on demand promissory note, etc., in favour of the complainant company. It is further stated that in respect of the prize money, which received by the accused, to pay aforesaid chits amount he had issued the cheque No.062556 on 09.02.2023 C.C.NO.11038/2023 2 for Rs.2,58,969/- drawn on ICICI Bank, Nagarbhavi 2nd Stage branch, Bangaluru. The complainant presented the said cheque for realization through its banker the Karur Vysya Bank Ltd., Malleshwaram branch, Bengaluru. But the said cheque was dishonored on 10.02.2023 as "Funds Insufficient". Thereafter on 04.03.2023 the complainant got issued a legal notice to the accused through its counsel by RPAD calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. The said notice was duly served to the accused on 07.03.2023. Inspite of service of the legal notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 N.I.Act. Hence, the present complaint came to be filed before this court on 13.04.2023.
3. After the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 25.04.2023 to register the case in Register No.III and it was registered as a criminal case.
4. Thereafter, summons was issued to the accused and he has appeared before the court through counsel as appointed by the DLSA and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the C.C.NO.11038/2023 3 accused was recorded by the court. He has pleaded not guilty and make a defence.
5. The complainant in support of its case, have examined its Legal executive as PW.1 and got marked 10 documents at Ex.P.1 to 10 and closed its side.
6. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was recorded. The accused has denied the incriminating evidence appeared against him. In his defence, the accused examined himself as DW.1 and no documents were marked on behalf.
7. Heard the arguments on both the sides and perused the material placed on record.
8. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-
Ex.P.1, towards the discharge of the said legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.1 was dishonored for the reasons "Funds Insufficient" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
C.C.NO.11038/2023 4
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
9. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
10.POINT NO.1 AND 2: These two points are inter-related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken these two points together for common discussion. The case of the complainant is that he was acquainted with the accused. The accused is a subscriber in a chit group No.NO1/MC/020/08 for a value of Rs.10,00,000/- per month of Rs.25,000/- over a period of 40 months. The accused had participated in the chit auction and he bid the chit amount of Rs.3,00,000/-, thereafter he had received prize money of Rs.7,00,000/-. Thereafter, he had executed necessary documents. In respect of repayment of chits amount the accused had issued the cheque in question in favour of the complainant. The complainant presented the said cheque for realization C.C.NO.11038/2023 5 through its banker. But the said cheque was dishonored as "Fund Insufficient". Thereafter, the complainant got issued a legal notice to the accused through its counsel calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. Inspite of service of the legal notice, the accused neither reply to the notice nor paid the cheque amount to the complainant. As such, the accused have committed an offence punishable under section 138 N.I.Act. Hence, the present complaint came to be filed before this court.
11. In support of the case, the complainant's have examined its Legal executive as P.W.1 and 10 documents were marked at Ex.P.1 to 10. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the cheque issued by the accused in favour of the complainant on 09.02.2023 for Rs.2,58,968/-. Ex.P.1(a) is the signature of the accused. Ex.P.2 is the bank memo dated: 10.02.2023 informing the dishonor of the cheque as Funds Insufficient. Ex.P.3 is the office copy of legal notice dated:04.03.2023. Ex.P.4 are the postal receipts. Ex.P.5 is the postal acknowledgment. Ex.P.6 is the returned postal cover. Ex.P.6(a) is the returned legal notice. Ex.P.7 is the account statement. Ex.P.8 is the certificate under section 65(b) of Indian Evidence Act. Ex.P.9 is the board meeting. Ex.P.10 is the complaint.
C.C.NO.11038/2023 6
12. In order to prove his defence, the accused examined himself as DW.1 and no documents were marked on his behalf. In his evidence he deposed the defence taken by him.
13. The accused has taken the defence that at the time of bidding the chit the complainant company had taken his three blank cheques and three blank cheques of his wife. Further he has also given documents relating to his site for the purpose of security. Further contended that he has already paid 33 installments amount to the complainant. Further the complainant have misused the one of the blank cheque and filed this false complaint. Further he contended that he has never admitted regarding repayment of the amount as contended by the complainant. The accused in his defence has not disputed Ex.P.1 being his cheque drawn on his account. He also does not dispute his signature appearing on the said cheque.
14. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused is a subscriber in the complainant branch and he has entered into a chit value of Rs.10,00,000/-
C.C.NO.11038/2023 7 for the period of 40 months payable at Rs.25,000/- per month. The accused had participated in the chit auction and he bid chit amount of Rs.3,00,000/- and he had received prize money of Rs.7,00,000/-. Thereafter the accused had executed necessary documents in favour of the complainant. After receiving the prized money the accused has failed to repay the amount. After the repeated request made by the complainant, the accused has not paid any amount to the complainant. Further argued that the accused in order to repayment of debt/liability had issued the cheque-Ex.P.1 in favour of the complainant. He further argued that the accused has not denied Ex.P.1 being his cheque drawn on his account. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence of the complainant case. The defence have failed to rebut the presumption under section 139 N.I.Act. The counsel for the complainant further argued that the accused has failed to produce any believable evidence that he had issued his three blank cheques and his wife three blank cheques in favour of the complainant for the purpose of security and also the defence why he has not returned back the same is not clear. He further argued that under section 139 of N.I.Act, there is a presumption that the cheque C.C.NO.11038/2023 8 has been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.1 being his cheque drawn on his account. The said presumption is available to the complainant.
15. Further he has argued that the accused has failed to prove the very fact that the cheque was given to the complainant for the purpose of security and it was blank when it was given to the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had given the three blank cheques to the complainant. As such, very defence of the accused is not believable. He further argued that the accused has not produced any documentary evidence to prove his defence. Upon careful perusal of the entire evidence of records both oral and documentary evidence the complainant have proved their case. It was further argued that the accused seriously disputed that the complainant company collected blank cheques and they have misused the one of the security cheque. However, he has miserable failed to prove the said fact. It is specific C.C.NO.11038/2023 9 case of the accused that he has already paid 33 installments amount to the complainant. But the accused not produced any documents. Further the materials available on record clearly established that the accused admitted the issuance of cheque to the complainant. The initial burden is on the complainant to prove that the cheque was issued in favour of the complainant towards payment of amount, then onus shifts upon the accused to prove his defence and it is for the accused to rebut the legal presumption enumerated under section 138 of Negotiable Instruments Act. As per presumption the cheque was issued for discharge of legal liability and it is for the accused to rebut the said presumption by adducing the cogent and convincing evidence. It was further argued that under facts and circumstances of the case the complainant have proved that the accused had issued the cheque in question in favour of the complainant for repayment of amount. On the contrary, the accused utterly failed to prove his probable defence. Under these circumstances the complainant have established their case in compliance of 138 of the N.I.Act. Hence, he prays to convict the accused.
16. The leaned counsel for the accused has argued that there was no legally enforceable debt/liability to the complainant from the accused for which the cheque-Ex.P.1 was issued. Further argued C.C.NO.11038/2023 10 that the accused had issued his three blank cheques and his wife three blank cheques to the complainant for the purpose of security. Further argued that the accused has already paid 33 installments amount to the complainant. When the accused has paid 33 installment amount to the complainant, then question of issuance of the cheque does not arise at all. The complainant company misused the one of the security cheque and filed a false case against the accused. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of a legally enforceable debt/liability, for which the cheque came to be issued. The complainant created all the documents and filed this false complaint against the accused. Therefore, from the evidence placed on record, the very due amount of the accused is not clearly made out whereas the accused is succeeded in rebutting the presumption available under section 139 of N.I.Act regarding existence of legally enforceable debt/liability. She further argued that after service of summons the accused has appeared before the court and has been enlarged on bail and the substance of the accusation has been read over to the accused, to which, the accused has pleaded not guilty and has further pleaded to set the motion of trial. Accordingly, the accused has cross examined PW.1. It is further argued that the C.C.NO.11038/2023 11 complainant have not lead any additional evidence in support of their case and after closer of the complainant evidence the accused himself has examined as DW.1. It is further argued that the Apex court has come down heavily on misuse of provisions of N.I.Act and more particularity on section 138 which fetters the hands to the court to largely draw a presumption in favour the complainant.
17. It is further argued that the Apex court has settled the law in the catena of judgments that the existence of legally enforceable debt/liability has to prima fascia to be proved to be complainant and that such a debt to be legally enforceable debt being a debt in true sense in the instance case the complainant has failed to prove the same. The act clearly lays down presumptions in favour of the complainant with regard to issuance of the cheque by the accused towards the discharge of his liability in favour of the complainant under the scheme of the act, the onus is upon the accused to rebut the presumptions in favour of the complainant by raising a probable defence. The facts narrated above clearly demonstrate that the complainant have got no legally enforceable debts from the accused. It is a trite of law that once there is a dispute with regard to the financial transaction itself, the standard of proof in so far as the prosecution is concern should be a case of proof of guilt beyond all C.C.NO.11038/2023 12 reasonable doubt since the one of the accused is only a mere preponderance of probability. Further argued that it is clear from the evidence on record, the complainant has miserably failed to establish the transaction in question as claimed by him and on the contrary, the accused has been successful in eliciting the serious doubtful circumstances in the case of the complainant and in such circumstances, the benefit of such doubts need to be extended to the accused. The case of the complainant is liable to be dis-believed, since the same suffers from serious omissions, contradictions and suspicious circumstances and on the other hand, the accused has probabalized his defence and as such, his defence is sufficient to rebut the presumption available in favour of the complainant under section 118 and 139 of the N.I.Act. The complainant has filed this complaint for illegal gain from the accused by misusing the cheque. Hence, she prays to acquit the accused.
18. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque- Ex.P.1 in favour of the complainant. It is not disputed that the complainant is a private limited chits company and the accused was a subscriber and he had issued the cheque-Ex.P.1. Whereas, the accused has C.C.NO.11038/2023 13 contended that he had given his three chaques and his wife three cheques to the complainant for the purpose of security. When he had given cheques, which were blank. The accused has specifically denied having debt/liability had issued the cheque-Ex.P.1 on 09.02.2023 towards the discharge of any debt/liability. He contends that the blank cheques given by him to the complainant for the purpose of security, one of the cheque as was misused by the complainant and the false complaint was filed.
19. In order to attract the offence punishable under section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant's in order to prove its case, have examined its Legal Executive as PW.1 and 10 documents were marked at Ex.P.1 to 10. In chief examination P.W.1 has repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.1 being his cheque drawn on his account. The said presumption is available to the complainant.
20. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is C.C.NO.11038/2023 14 rebuttable presumption and it is opinion to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque-Ex.P.1 was issued. In order to prove his defence, the accused has failed to produce any documentary evidence before this court. PW.1 during his cross-examination has specifically denied the suggestions made to him that Ex.P.1-cheque was issued in favour of the complainant company for the purpose of security and same was blank at the time of issuing the same.
21. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further the accused has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that he had given his three blank cheques and his wife three blank cheques to the complainant company for the purpose of security. Except, the said defence, he has not produced any materials to prove such defence. If he had given three blank cheques to the complainant, C.C.NO.11038/2023 15 what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque. On which date he came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why he has given blank cheques to the complainant without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the blank cheques. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodge complaint before concerned police station. No steps have been taken to receive back the blank cheques, after he came to know about the same.
22. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in the case of Rangappa V/S Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that C.C.NO.11038/2023 16 ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.1 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
23. Further the learned counsel for the accused has taken contention that the cheque was given as a security. Further the complainant have misused the same and filed false case. Hence, an offence under section 138 of N.I.Act is not attracted. In this regard once issuance of cheque and signature are admitted, the statutory presumptions would arise under section 138 of N.I.Act that cheque was issued by the drawer for legally payable debt/liability and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC online SC 1002 the Hon'ble Supreme court has categorically held that; once the cheque is issued as security for the loan and if C.C.NO.11038/2023 17 the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, without producing any documents, then he has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
24. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt/liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of C.C.NO.11038/2023 18 probabilities.
`25. In the case of M/s Kalemani Tex V/s P.Balansubramanian, reported in (2021) 5 SCC 283, the Hon'ble Apex Court has observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
26. In the present case also, as the accused never disputed his signature and did not deny issuing cheque from the account of the accused. The accused did not dispute cheque return memo also. The cheque was returned for the reasons Funds Insufficient. Thus, the act clearly lays down presumptions in favour of the complainant with regard to the issuance of the cheque by the accused towards the discharge of the liability in favour of the complainant. Further under scheme of the Act, the onus is upon the accused to rebut the presumption in favour of the complainant by raising a probable defence. Such being the legal position, it would be pertinent to refer to the defences raised by the accused to rebut the presumptions in favour of the complainant in this case.
27. Applying the above said principles to the present case and before considering the point whether C.C.NO.11038/2023 19 the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
28. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reason stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard. It was also contended by the accused that he had given three blank cheques to the complainant for the purpose of security and one of the blank cheque was misused by the complainant. But the accused has failed to produce any believable evidence before this court.
29. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of cheque and filing a false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and had not C.C.NO.11038/2023 20 return the same, inspite of collecting cheque leaves from him, as a prudent man, the accused should have inquired with the complainant and demanded to return those cheques. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.1. Further he could have issued notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of the security cheque against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
30. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon the accused to make repayment of amount to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to proved the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.1 being his cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability.
C.C.NO.11038/2023 21 From the evidence of P.W.1 and also cheque return memo at Ex.P.2 it is established that the cheque was dishonored for the reasons "funds insufficient''. A legal notice being issued as per Ex.P.3 within one month from the date of dishonour of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice sent by the complainant on his address. But, the accused failed to reply the notice, immediately after he received the demand notice. Thereby, he could have asserted him defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
31. It is not the contention of the accused that thereafter he has paid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period and failed to give reply to the notice, as such the accused have committed an offence punishable under section 138 of Negotiable C.C.NO.11038/2023 22 Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even the accused did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C., except he has issued the cheque for the purpose of security. In view of judgment of Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C, the accused has no option under section 251 of Cr.P.C, just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he want to take. As such it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
32. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018(8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence.
C.C.NO.11038/2023 23 Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
33. As per the version of the accused is that the accused has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that the accused has issued the cheque-Ex.P.1 and even after he has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused had issued the cheque-Ex.P.1 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him that the cheque-Ex.P.1 was a blank cheque given to the complainant for the purpose of security. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the C.C.NO.11038/2023 24 complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
34. PW.1 in his evidence has specifically deposed that the accused is a subscriber in the chit group No.N01/MC/020/08 for a value of Rs.10,00,000/- per month of Rs.25,000/- the period of 40 months. The accused had participated in the chit auction and he bid the chit amount of Rs.3,00,000/-, thereafter he had received prize money of Rs.7,00,000/-. Thereafter, he also had executed surety form, on demand promissory note, etc., in favour of the complainant company. It is further deposed that in respect of the prize money, which received by the accused, to pay aforesaid chits amount the accused had issued the cheque in question in favour of the complainant. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, the complainant is a private limited chits company and the accused was a subscriber to the complainant company, this is not disputed by the accused. The accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction no consequences to disbelieve the case of the complainant. The accused has failed to probables his C.C.NO.11038/2023 25 defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
35.POINT NO.3 AND 4: In order to avoid repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.1 being his cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored for the reasons funds insufficient, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after given of the notice. As such in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused had issued the blank cheques in favour of the complainant for the purpose of security and why he has not produced any documents. After service of notice the accused has not paid the said amount and failed to give reply to the said notice. Hence, the present complaint came to be filed before the court on 13.04.2023 within the period of one month from the date of cause of action.
C.C.NO.11038/2023 26
36. While discussing the point No.1 and 2, this court has already observed that the complainant's have proved that the cheque-Ex.P.1 was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 and 4 in the Affirmative.
37. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond of the accused is hereby C.C.NO.11038/2023 27 stands canceled.
The accused is sentence to pay fine of Rs.2,65,000/- (Rupees two lakhs sixty five thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.2,58,000/- (Rupees two lakhs fifty eight thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.7,000/- (Rupees seven thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six (06) months. (Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 01 st day of October- 2024) Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.10.03 17:35:50 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.Raghuprasad.G.
C.C.NO.11038/2023
28
List of documents marked on behalf of the complainant:
Ex.P.1 : Cheque. Ex.P.1(a) : Signature of the accused. Ex.P.2 : Bank memo. Ex.P.3 : Office copy of legal notice. Ex.P.4 : Postal Receipts. Ex.P.5 : Postal acknowledgment. Ex.P.6 : Returned postal cover. Ex.P.6(a) : Returned legal notice. Ex.P.7 : Account statement. Ex.P.8 : Certificate U/s.65(b) of I.E.act. Ex.P.8 : Board Meeting. Ex.P.10 : Complaint.
List of witnesses examined on behalf of the accused:
DW.1 : C.Kumar.
List of documents marked on behalf of the accused:
-Nil-
Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.10.03 17:35:56 +0530 XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.11038/2023 29 01.10.2024 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C., the accused is convicted for an offence punishable under section 138 of N.I.Act. The bail bond of the accused is hereby stands canceled.
The accused is sentence to pay fine of Rs.2,65,000/- (Rupees two lakhs sixty five thousand only) to the complainant. It is further ordered that out of the said fine amount an amount of Rs.2,58,000/- (Rupees two lakhs fifty eight thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.7,000/- (Rupees seven thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six (06) months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.