Bangalore District Court
Anusha Industries vs Deepa Solar Systems Pvt., Ltd on 5 October, 2024
C.C.NO.610/2020
1
KABC030025052020
Presented on : 10-01-2020
Registered on : 10-01-2020
Decided on : 05-10-2024
Duration : 4 years, 8 months, 26 days
IN THE COURT OF THE XXVIII ADDL.CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LLB.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 05th DAY OF OCTOBER-2024
C.C.NO.610/2020
Complainant: M/s.Anusha Industries,
Sri.Dipanshu Sharma (Partner)
Having its O/at No.390,
Sompura sub-layout, KIADB,
Dabaspet, Tq:Nelamangala,
Bangalore Rural-562111.
R/by its GPA Holder,
Sri.Manohar Sharma
S/o Sanwarmal Ganeshnarain Sharma,
Age: 59 years, R/at No.92/2, Shubhlab
Cypress Apartment, E-304, Near Royal Mart
Super Market, Hesaraghatta Main Road,
Mallasandra, Bangalore-560057.
As per the order dated: 04.12.2023
Complainant company
R/by its GPA holder
Sri.Vinodha Kiran.S S/o S.B.John,
Age:51 years, R/at No.4/7C, Saunder Road,
Frazer Town, Bengaluru-560055.
(By Sri.Avinash.P & Ors.,Advs.,)
C.C.NO.610/2020
2
V/S
Accused: 1.M/s. Deepa Solar Systems Pvt.,Ltd.,
#04, 80 feet ring Road, Next to BDA
Complex, Nagarbhavi 2nd Stage,
Bangalore-560072.
R/by Sri.K.L.H Raya (M.D),
2.Sri.K.L.H.Raya (Managing Director),
Age: 50 years, #04, 80 feet ring Road,
Next to BDA Complex, Nagarbhavi 2nd Stage,
Bangalore-560072.
(By Sri.M.Lakshmana & Associates.,)
: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 the complainant are manufacturers and dealers of lithium battery packs for energy storage purpose, carrying on business since two years and it is a partnership concern. The partner of the complainant office and the accused are known to each other from past more than one year. In the course of this business, the accused had approached the complainant and placed an amended purchase order No.DSSPL/18-19/002A, dated: 04.04.2018 for supply of Lithium Ferro Phosphate Battery and Battery Enclosure (Ms box). In that regard the purchase order acknowledged by the C.C.NO.610/2020 3 accused. After considering the purchase order, the complainant had supplied the said batteries to the accused through invoices dated: 08.05.2018 (No.A12001 & A12022), which is total sum of Rs.26,70,900/- including tax. The accused in respect of the same had issued undated cheque No.934982 and 934983 for Rs.12,17,950/- each both were drawn on State Bank of India, Peenya 2nd Stage branch, Bangalore. After receiving the materials the accused had requested the complainant not to present the said cheques and with regarding the same he will make the RTGS for the remaining amount within 3 months. The complainant believing the words of the accused, had not presented the said cheques. After lapse of 3 months the accused had not made any payment. Thereafter the accused had assured that he will make the payment and to present the cheques on 22.07.2019. The complainant on the assurance of the accused, presented the said cheques for realization through its banker the Vijaya Bank, Peenya branch, Bangalore. But the said cheques were dishonored on 24.07.2019 as "Payment Stopped by Drawer and Funds Insufficient" respectively. Thereafter on
03.08.2019 the complainant got issued a legal notice to the accused calling upon him to make payment of the cheques within 15 days from the date of receipt of the said notice along with 24% of interest per annum. The said notice served to the accused on 05.08.2019. After C.C.NO.610/2020 4 receipts of the legal notice the accused neither reply to the notice nor paid the cheques amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 18.09.2019.
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R No.14888/2019. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 10.01.2020 to register the case in Register No.III.
4. Thereafter, summons was issued to the accused and he has appeared before the court through his counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant in support of its case, have examined its Director as P.W.1 and got marked 12 documents at Ex.P.1 to 12 and closed its side.
6. During the pendency of the case, the learned counsel for the complainant has filed an application for the substitution of the representative of the complainant company contending that the complainant originally C.C.NO.610/2020 5 represented by its Director Sri.Manohar Sharma, due to change of circumstances they would like to substitute another GPA holder Sri.Vinodh Kiran.S during the course of trial. Accordingly on 04.12.2023 the said application was allowed. The complainant's have examined the said GPA holder as PW.2 and got marked 04 documents at Ex.P.13 to 16 and closed its side.
7. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C, was recorded. The accused No.2 has denied the incriminating evidence appeared against him. In their defence, the accused No.2 has examined himself as DW.1 and no documents were marked on their behalf.
8. I have heard the arguments on both the sides and perused the material placed on record.
9. 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 cheques-
Ex.P.7 and 8, towards the discharge of the said legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheques-Ex.P.7 and 8 were dishonored for the reasons ""Payment Stopped by Drawer and Funds Insufficient" respectively and C.C.NO.610/2020 6 thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4.Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
10. 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:
11.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 points together for common discussion. The case of the complainant is that the complainant are manufacturers and dealers of lithium battery packs for energy storage purpose, carrying on business from the above registered office since two years. The partner of the complainant office and the accused are known to each other from past more than one year. In the course of this business, the accused had approached the complainant and placed a amended purchase order for supply of Lithium Ferro Phosphate Battery and Battery C.C.NO.610/2020 7 Enclosure (Ms box). In that regard the purchase order acknowledged by the accused. After considering purchase order of the accused, the complainant had supplied the said batteries to the accused through two invoices dated 08.05.2018, which is total sum of Rs.26,70,900/- including tax. The accused in respect of the same has issued the undated cheques in question in favour of the complainant. After receiving the materials the accused had requested the complainant not to present the said cheques and with regarding the same he will make the RTGS for the remaining amount within 3 months. The complainant believing the words of the accused, had not presented the said cheques. After lapse of 3 months the accused had not made any payment to the complainant. Thereafter on repeated oral reminder of the complainant the accused had assured him that he will make the payment and to present the cheques. The complainant on the assurance made by the accused, presented the said cheques for realization through its banker. But the said cheques were dishonored as "Payment Stopped by Drawer and Funds Insufficient" respectively. Thereafter the complainant got issued a legal notice to the accused calling upon him to make payment of the cheques within 15 days from the date of receipt of the said notice along with 24% of interest per annum. After receipt of the legal notice the accused neither reply to the notice nor paid the cheques amount. As such, the C.C.NO.610/2020 8 accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
12. At this juncture, it is necessary to go through the provisions of N.I.Act before proceeding further. The provisions under section 118(a) and 139 of the Act., 1881 are extracted and they reads thus;
"118. Presumptions as to negotiable instruments:- Until the contrary is proved, the following presumptions shall be made:-
(a).of consideration-that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
(b).as to date:- that every Negotiable Instrument bearing date was made or drawn on such date;
"139.Presumption in favour of holder:-
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, of any debt or other liability."
13. On plain perusal of the provisions under section 118(a) and 139 of the N.I.Act., as extracted hereinabove, it can be seen that initially the C.C.NO.610/2020 9 presumptions constituted under these two provisions favour the complainant. However, it is open to an accused to raise a defence to rebut the statutory presumptions. An accused can raise a defence, wherein the existence of legally enforceable debt or liability can be contested.
14. It is also well established that an accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has constitutional rights to maintain silence. Standard of proof on part of the accused and that of the prosecution in a Criminal case is different. The prosecution must prove the guilt of an accused beyond all reasonable doubts, the standard of proof so as to prove a defence on the part of an accused is "Preponderance of probabilities".
15. Under the light of above extracted provisions of the Act, I have perused the oral and documentary evidence on record. In support of the case, the complainant's have examined its Director and GPA holder as P.W.1 and 2 and 16 documents were marked at Ex.P.1 to 16. In the chief examinations P.W.1 and 2 have repeated the contents taken by the complainant in the complaint. Ex.P.1 is the partnership deed. Ex.P.2 is the GPA. Ex.P.3 is the amended purchase order. Ex.P.4 and 5 are the tax invoices. Ex.P.6 is the ledger account.
C.C.NO.610/2020 10 Ex.P.7 and 8 are the cheques issued by the accused in favour of the complainant dated: 22.07.2019 for Rs.12,17,950/- each. Ex.P.7(a) and 8(a) are the signatures of the accused No.2. Ex.P.7(b) and 8(b) are the bank memos dated: 24.07.2019 informing the dishonor of the cheques as "Payment Stopped by the Drawer and "Funds Insufficient" respectively. Ex.P.9 is the office copy of legal notice dated: 03.08.2019. Ex.P.9(a) is the postal receipt. Ex.P.10 is the courier receipt. Ex.P.11 is the postal acknowledgment. Ex.P.12 is the complaint. Ex.P.13 is the GPA. Ex.P.14 is the email. Ex.P.15 is the certificate under section 65(b) of Indian Evidence Act. Ex.P.16 is the amended complaint.
16. I have perused the exhibits on which the complainant have placed their reliance. On perusal of the exhibits, it is clear that cheques in question were presented for encashment within its validity. The bank endorsements with a sharas "Payment Stopped by Drawer and Fund Insufficient" respectively. The complainant issued the legal notice within one month from the date of receipt of memos. The notice was duly served on the accused. The complaint was filed on 18.09.2019, which is within limitation. The transaction with the complainant is admitted. The issuance of the cheques and the signatures on the cheques-Ex.P.7 and 8 are admitted. Therefore, the documents on record C.C.NO.610/2020 11 clearly show that the complainant have complied the ingredients of section 138(a) to (c) of the N.I.Act. Therefore, the presumptions under section 118 and 139 of the N.I.Act arise in favour of the complainant. The presumptions are rebuttable and the burden is on the accused to rebut the presumptions. The presumption is that the cheques were issued for legally enforceable debt/liability. However, actual existence debt/liability can be contested. The accused can rebut the presumptions by raising probable defences and proving it relying on the evidence of the complainant or by leading his direct evidence.
17. The case was seriously contested by the accused and the service of notice was disputed. The notice was duly served on the accused as per Ex.P.11. The counsel for the accused cross-examined PW.2 in respect of non service of notice. But PW.2 denied the same. Further contended that the notice sent to the accused not served'; that the accused has no knowledge of the notice as it was not served on him; that the accused did not give reply notice as the notice was not served on him; that he did not produce any documents to show that the accused was not residing at the said address, the notice was not served on him and that the accused did not issue reply notice as he was not residing at the said address. The counsel for the accused argued that no legal presumption can be C.C.NO.610/2020 12 raised as the notice was sent to the wrong address and the accused was not residing at the said address. On the other hand, the counsel for the complainant cross examined DW.1 in length in respect of address of the accused, service of notice. He admitted that the address. He admitted that the notice was received by him and not given the reply notice. In the notice at Ex.P.9, wherein the name of accused is appearing, was confronted.
18. On perusal of Ex.P.9, it is clear that the name of the accused is appearing in the notice. The same notice was sent to the accused. The accused not given reply. There is no evidence on record to show that the accused was residing at some other address other than the address mentioned in the notice at Ex.P.9. On the other hand, it is clear from the cross-examination of DW.1 that the accused was residing at the said address. The above discussion clearly shows that the address mentioned in the notice is the correct address of the accused. As the notice was given to the accused and the same notice was sent to him through RPAD, an inference can be drawn that the notice was served on the accused. Further the address mentioned in the notice being the correct address of the accused as admitted by him in the cross-examination, the presumption as per Section 27 of General Clauses Act can be drawn. It states that the notice sent through post shall be deemed to be served, if it is properly C.C.NO.610/2020 13 addressed to a person to whom it is sent. Therefore, even though the notice sent to the accused through RPAD duly served.
19. In a nutshell it can be said that the statutory notice is an opportunity given to the accused to make payment and avoid the consequences of 138 of N.I.Act. In the case on hand, the summons was duly served on accused and he appeared through his counsel. The accused also admitted the service of summons. He appeared before the court and contested the case by taking all probable defences. Therefore he cannot take the shelter of statutory requirement of service of notice to avoid the consequences of section 138 of N.I.Act. The complaint was filed on 18.09.2019, which is within limitation. The accused admitted the issuance of cheques in favour of the complainant and signatures in the cheques. It is his defence that the cheques were issued to the complainant for the purpose of security. Therefore, the documents on record clearly show that the complainant have complied the ingredients of section 138(a) to (c) of the N.I.Act. Therefore, the presumptions under 118 and 139 of the N.I.Act arise in favour of the complainant. The presumptions are rebuttable and the burden is on the accused to rebut the presumptions. Once the issuance of cheques and signatures are proved, the presumption arises in respect of the fact that the cheques were issued for C.C.NO.610/2020 14 legally enforceable debt/liability. The accused can rebut the presumption by raising probable defence and proving it relying on the evidence of the complainant or by leading his direct evidence.
20. In order to prove their defence, the accused No.2 is examined himself as DW.1 by way of affidavit and no documents were marked on his behalf. In his evidence he deposed the defence taken by him.
'
21. 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 cheques came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the complainant are manufacturers and dealers of lithium battery packs for energy storage purpose, carrying on business. Further argued that the partner of the complainant office and the accused are known to each other from past more than one year. In the course of this business, the accused had approached the complainant and placed an amended purchase order dated: 04.04.2018 for supply of Lithium Ferro Phosphate Battery and Battery Enclosure. In that regard the purchase order acknowledged by the accused. After considering the purchase order of the accused, the complainant had supplied the said batteries to the accused through two invoices dated:
C.C.NO.610/2020 15 08.05.2018, which is total amount of Rs.26,70,900/-
including tax. It is further argued that the accused in respect of the same had issued the undated cheques in question for Rs.12,17,950/- each. Further argued that the accused after receiving the materials had requested the complainant not to present the said cheques and with regarding the same he will make the RTGS for the remaining amount within 3 months. The complainant believing the words of the accused, had not presented the said cheques. After lapse of 3 months the accused had not made any payment to the complainant. Thereafter on repeated reminder the accused had assured him that he will make the payment and to present the cheques on 22.07.2019. The complainant on the assurance of the accused, presented the said cheques for realization through its banker. He further argued that the accused has not denied Ex.P.7 and 8 being his cheques drawn on the account of the accused No.1 and signatures appearing on the said cheques. When the signatures is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused have failed to elicit anything in the cross examination of P.W.1 and 2 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act.
22. He further argued that the accused have failed to produce any believable evidence that he had C.C.NO.610/2020 16 issued the blank post dated cheques in favour of the complainant for the purpose of security and why he has not returned back the same is not clear. He further argued that the accused failed to produce any documentary evidence regarding repayment of amount to the complainant. Further argued that to prove under section 139 of N.I.Act, there is a presumption that the cheques have been issued for discharge of legally enforceable debt/liability. In the present case, the accused No.2 has not disputed Ex.P.7 and 8 being his cheques drawn on the account of the accused No.1. The said presumption is available to the complainant. Further he has argued that the accused had failed to prove the very fact that cheques were given to the complainant for the purpose of security and its were blank when its were 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 blank post dated cheques as security measure. As such, very defence of the accused is not believable. He further argued that the accused No.2 has not produced any documentary evidence to prove his defence. Upon careful perusal of the entire evidence of records both C.C.NO.610/2020 17 the oral as well as documentary evidence the complainant have proved their case. It was further argued that the accused seriously disputed that the complainant collected blank post dated cheques from the accused for the purpose of security and the complainant have misused the same. However, he has miserable failed to prove the said fact.
23. Further argued that it is specific case of the accused that there is no due. Further defence of the accused is that goods supplied by the complainant is defective goods, which is not upto the mark of the accused company and even after many request and demand by the accused company to the complainant for replacing the defective goods. The complainant not complying the demands. The complainant have misused the security cheques. Further the materials available on record clearly established that the accused admitted the issuance of cheques to the complainant. The initial burden is the complainant to prove that the cheques were issued in favour of the complainant towards payment of amount, then onus shifts upon the accused No.2 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 cheques were 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 C.C.NO.610/2020 18 the facts and circumstances the complainant have proved that the accused had issued the cheques in question for repayment of amount. On the contrary, the accused have utterly failed to prove their probable defence. It is pertinent to note that the accused No.2 has admitted that he had issued the cheques produced at Ex.P.7 and 8 and the accused have not produced any evidence to prove their 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.
24. The learned counsel for the accused has argued that there was no legally enforceable debt/balance due to the complainant from the accused for which the cheques were issued. Further argued that the accused had issued the blank signed post dated cheques to the complainant for the purpose of security. 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 cheques came to be issued. It is further argued that the complainant is a partnership firm any authorization on behalf company to conduct case is through board of resolution appointing a person. In this case, there is no production of board resolution and therefore, it is a legally factual mistake, the above complaint is unsustainable. Further argued that P.W.2 is not having any personal knowledge about C.C.NO.610/2020 19 the transactions. Hence, without having any personal knowledge about the transaction he is not having any right to prosecute the case against the accused. Further argued that PW.2 is only in order give trouble to the accused and with an intention of making illegal money from the accused filed this false case. This is not permissible under the law. Further argued that the cheques in question was collecting in the beginning from the accused, as security measure. On looking it Ex.P.7 and 8 the signatures of the accused is admitted. Whereas, the writing part of the cheques amount in words and in figure are different handwriting. Therefore, the entire cheques were filled up by the complainant as their whims. The complainant created all the documents and filed this false case against the accused.
25. Further argued that the complainant have supplied the defective goods which is not upto the mark of the accused company, and even after many request and demand by the accused company to the complainant for replacing the defective goods and to present the cheques for encashment, but the complainant company without informing and without complying the demands have presented the alleged cheques only to make gain out of it and also misused the same by filing the present complaint and the accused is not entitled to pay any legally debt to the complainant. Further argued that the complainant has C.C.NO.610/2020 20 not disclosed regarding his failure to replace the defective supplied goods and the project taken up by the accused is the central government project and it is the public project and the said facts will be revealed only after leading evidences and cross examination. Further argued that the complainant has promised after filing the case but to compromise by replacing the defective goods and make good the loss to the accused and thereafter they will receive the payment while replacing the defective goods, but till today the complainant has not come forward to replace the defective goods and in one occasion the accused has agreed for the said offer i.e., replacing the defective goods and on the same day the payment should be made and accordingly the accused sent a mail to the complainant that they are ready to make the payment in due course. But the same mail is misused by the complainant.
26. Further argued that the complainant was subjected himself for evidence and partly cross examined and while cross examination some of the valid questions was asked to him wherein he could not answer the same and to avoid the same, the complainant has come up with some applications only to harass to the accused so that he will come forward for settlement or pay the amount to the complainant. The transaction done by the complainant with the accused is not fair and is not supported by C.C.NO.610/2020 21 documentary evidence and as such the complainant is not entitled for any reliefs as sought in the complaint. Further argued that there is no prima facie in this case in favour of the complainant, since there in no merits in the complaint against the accused. The complainant has filed this false case against the accused just to harass the accused. The accused is not liable to pay any amount to the complainant. Hence, question of the repayment of the amount as contended by the complainant does not arise at all. Therefore, from the evidence placed on record, the very due amount by 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. Hence, he prays to dismissed the complaint and acquit the accused.
27. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused No.2 has not seriously disputed he had issued the cheques in question in favour of the complainant. It is not disputed that the complainant is a partnership firm and the accused No.1 is a private limitation company and the accused No.2 is a Managing Director and businessman and he had issued the cheques-Ex.P.7 and 8 in favour of the complainant. Whereas, the accused has contended that he had given the signed post dated chaques to the complainant for the purpose C.C.NO.610/2020 22 of security. When he had given the cheques, which were blank. The accused has specifically denied having debt/liability issued the cheques dated: 22.07.2019 towards the discharge of any debt/liability. He contends that the blank signed cheques given by him to the complainant for the purpose of security as was misused by the complainant and the false complaint was filed.
28. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheques drawn on the account of the accused No.1 was given for discharge of the same, are to be proved. The complainant's in order to prove its case, have examined its Director and GPA holder as PW.1 and 2 and 16 documents were marked at Ex.P.1 to 16. In chief examinations, P.W.1 and 2 have repeated the averments made by the complainant in the complaint. In the present case, the accused have not disputed Ex.P.7 and 8 being his cheques drawn on the account of the accused No.1. The said presumption is available to the complainant.
29. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is a 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 C.C.NO.610/2020 23 accused has disputed the existence of legally enforceable debt/liability, for which cheques-Ex.P.7 and 8 were issued. In order to prove their defence, the accused No.2/DW.1 has failed to produce any documentary evidence before this court. PW.2 during his cross-examination has specifically denied the suggestions made to him that cheques-Ex.P.7 and 8 were issued in favour of the complainant for the purpose of security. Further he has denied the other suggestions made by the counsel for the accused.
30. 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 have 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 No.2 is that he had given the blank cheques to the complainant for the purpose of security. Further the complainant have supplied the defective goods, which is not upto the mark of the accused company, even after many request and demand by the accused to the complainant for replacing the defective goods the complainant without complying the demands have presented the alleged cheques to the bank only to make gain out of it and the C.C.NO.610/2020 24 accused is not liable to pay the cheques amount to the complainant. Except, the said defence, he has not produced any materials to prove such defence. If he had given the blank post dated cheques to the complainant for the purpose of security, 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 cheques. On which date the accused came to knew about the alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheques illegally misused by the complainant. Admittedly the accused is a businessman and having knowledge of the financial transaction, why he has given the 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 cheques 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.
31. Once issuance of cheques and signatures are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheques C.C.NO.610/2020 25 were issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, 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 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 cheques-Ex.P.7 and 8 the court has to draw the initial presumption that he is the payee of that cheques. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant case.
32. Further the accused No.2 has taken the defence that he has given post dated cheques as security measure. Further he is not liable to pay the cheques amount. Further the complainant have misused the cheques and filed this false case. Hence, an offence punishable under section 138 of N.I.Act is not attracted. In this regard once issuance of cheques and signatures are admitted, the statutory presumptions would arise under section 138 of N.I.Act C.C.NO.610/2020 26 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 categorically held that; once the cheque is issued as security for the loan and if 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 cheques were given only for security purpose, but without producing any documents, then the accused have to pay the cheques amount when it is presented for encashment which is legally recoverable debt.
33. 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 or liability. It is further held that the position of law makes it crystal clear that when a C.C.NO.610/2020 27 cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
`34. 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.
35. In the case of Electronics Trade & Technology Corporation Ltd., V/s Indian Technology & Engineers (Electricals) (P) Ltd, & Anr., reported in 1996(2) SCC 739, it is observed that instructions for stoppage of payments also attracts Section 138 of N.I.Act.
36. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts C.C.NO.610/2020 28 in this case.
37. It is not in dispute that bounced cheques belongs to the bank account of the accused No.1. It is also not in dispute that signatures appearing on the bounced cheques is the signatures of the accused No.2. It is also not in dispute that the cheques presented by the complainant came to be dishonored by the banker of the accused No.1 for the reasons stated in the dishonor memos. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused have not produced any documents in this regard. It was also contended by the accused No.2 that he had given the blank post dated cheques to the complainant for the purpose of security only. The complainant have misused the same. In this regard the accused have failed to produce any believable evidence before this court.
38. In the defence there is no ill-will between the complainant and the accused. Hence, question of misuse of cheques and filing the false case is not possible. The accused No.2 admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said post dated cheques and had not returned the same, inspite of collecting cheques leaves from him, as a prudent man, the accused should have inquired with C.C.NO.610/2020 29 the complainant and demanded to return that 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.7 and 8. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. Further the accused had issued a notice to his banker to stop payment in respect of Ex.P.8, but the accused has not issued a legal notice to the complainant regarding stop payment to the bank. Further he has not produced any documents to shows that as on the date of presentation of the cheque-Ex.P.8 to the bank he is having sufficient balance in the account of the accused No.1. No such steps were taken by the accused. He simply makes a bald allegation of misuse of security cheques against the complainant. It appears, just to escape from his legal liability, he has taken such contentions without any valid basis.
39. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon him to make repayment of cheques 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 prove the C.C.NO.610/2020 30 compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.7 and 8 being his cheques drawn on the account of the accused No.1. In view of the above discussions, it is also held to be proved that its were drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and 2 and also cheques return memos at Ex.P.7(b) and 8(b) it is established that the cheques were dishonored for the reasons "Insufficient Funds'' and "Payment Stopped by the Drawer" respectively. A legal notice and rejoinder notice being issued as per Ex.P.9 within one month from the date of dishonor of the cheques is also not in dispute. In the case on hand the accused No.2 has not seriously disputed regarding notice send by the complainant on his address. But, the accused failed to reply to the notice, immediately after he received the demand notice. Thereby, he could have asserted his 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.
40. It is not the contention of the accused No.2 that thereafter he has repaid the cheques amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the C.C.NO.610/2020 31 evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused No.2 has not paid the cheques amount within stipulated period, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed before this court within one month after the accused failed to repay the cheques amount. Even he did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. In view of judgment of Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, (2010 (5) SCC 590), it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused have no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
41. 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 C.C.NO.610/2020 32 in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused have not been able to make out a probable case on their behalf.
42. The learned counsel for the accused argued except signatures other writings on Ex.P.7 and 8- cheques is not in his handwriting, which were filled up by the complainant and it amounts to material alterations, so, the complaint is liable to be dismissed. As narrated above, when the accused admits his signatures, he cannot take up a defence that other contents of cheques were filled up by the complainant and it amounts to material alteration. In this respect, ruling reported in 2019 SCC On-line (SC) 138), between Bir Singh V/s. Mukesh Kumar, the Hon'ble Apex Court held as under:
"37.A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he C.C.NO.610/2020 33 adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a 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, if cheque is otherwise valid, the penal provision of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still the on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
40. Even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment. Would attract presumption U/sec.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."
43. The principles emerging from the above referred decision make it clear that, it is not mandatory and no law prescribes that the contents of cheque should be written by the signatory to the cheque. A cheque can be written by anybody and if the account holder of the cheque signs it, the presumption under section 139 of N.I Act arises. The principle of law C.C.NO.610/2020 34 laiddown in above decision is aptly applicable to the facts of this case. In view of section 20 of N.I.Act, cheque being an inchoate instrument, if the drawer signs and delivers to the drawee, thereby he gives authority to the drawee thereof to make or complete the instrument.
44. As per the version of the accused is that the accused No.2 has nowhere denied transactions. The accused No.2 himself has admitted that the accused No.1 is the holder of alleged cheques. It is sufficient hold that the accused No.2 has issued the cheques- Ex.P.7 and 8 and even after he has not repaid the cheques 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 cheques, once the execution of cheques is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. The accused is liable for dishonor of cheques. Accordingly, PW.1 and 2 have established the case of the complainant that, the accused No.2 had issued the cheques-Ex.P.7 and 8 in order to repay the legally recoverable amount. Therefore, the accused have failed to probables the defence taken by him that Ex.P.7 and 8 were blank post dated cheques given to the complainant for the purpose of security and he is not liable to pay any C.C.NO.610/2020 35 amount to the complainant. Therefore, the accused have failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
45. PW.1 and 2 in their evidence have specifically deposed that the partner of the complainant office and the accused are known to each other from past more than one year. In the course of this business, the accused had approached the complainant and placed a amended purchase order for supply of Lithium Ferro Phosphate Battery and Battery Enclosure (Ms box). In that regard the purchase order acknowledged by the accused. After considering the purchase order of the accused, the complainant had supplied the said batteries to the accused through two invoices dated:
08.05.2018 (No.A12001 & A12022), which is total amount of Rs.26,70,900/- including tax. It is further deposed that the accused inrespect of the same had issued the undated cheques No.934982 and 934983 for Rs.12,17,950/- each. The accused after receiving the materials had requested the complainant not to present the said cheques and with regarding the same he will make the RTGS for the remaining amount within 3 months. Further deposed that the accused in order to C.C.NO.610/2020 36 repayment of the said amount had issued the cheques-
Ex.P.7 and 8. So also it is not in disputed that the complainant and the accused are known to each other, some point of period, this is not disputed by the accused. The accused have 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 have failed to probables their defence. With these reasons, I answer point No.1 and 2 in the Affirmative.
46. 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.7 and 8 being his cheques drawn on the account of the accused No.1 is not in dispute. The said cheques having been dishonored for the reasons funds insufficient and Payment Stopped by Drawer respectively, when its were presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused No.2 has not taken up any contention that thereafter he had paid the cheques amount within stipulated time of 15 days, after service of the notice. As such in the present C.C.NO.610/2020 37 case on 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 post dated cheques in favour of the complainant for the purpose of security only and why he has not produced any documents. After service of notice the accused neither reply to the notice nor paid the said cheques amount. Hence, the present complaint came to be filed before the court on 18.09.2019 before this court. While discussing the point No.1 and 2, this court has already observed that the complainant's have proved that the cheques-Ex.P.7 and 8 were 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.
47.POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant's have proved its case. The accused have failed to prove their 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 C.C.NO.610/2020 38 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 are convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused No.2 hereby stands canceled.
The accused are sentence to pay fine of Rs.24,50,000/- (Rupees twenty four lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.24,40,000/- (Rupees twenty four lakhs forty 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.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused No.2 shall undergo simple imprisonment of 6 months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 05th day of October-2024) C.C.NO.610/2020 39 Digitally signed by SOUBHAGYA SOUBHAGYA B BHUSHER B BHUSHER Date:
2024.10.08 11:51:27 +0530 (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.Manohar Sharma. PW.2 : Mr.Vinodh Kiran.S.
List of documents marked on behalf of the complainant:
Ex.P.1 : Partnership deed. Ex.P.2 : GPA. Ex.P.3 : Amended purchase order. Ex.P.4 & 5 : Tax Invoices. Ex.P.6 : Ledger account. Ex.P.7 & 8 : Cheques.
Ex.P.7(a) & 8(a) : Signatures of the accused No.2. Ex.P.7(b) & 8(b) : Bank endorsements.
Ex.P.9 : Office copy of legal notice. Ex.P.9(a) : Postal receipt. Ex.P.10 : Courier receipt. Ex.P.11 : Postal Acknowledgment. Ex.P.12 : Complaint. Ex.P.13 : GPA. Ex.P.14 : E-mail. Ex.P.15 : Certificate under section 65(b) of I.E.Act. Ex.P.16 : Amended complaint.
List of witnesses examined on behalf of the accused:
D.W.1 : K.L.Hanumantharaya List of documents marked on behalf of the accused:
-NIL- Digitally signed
by SOUBHAGYA
SOUBHAGYA B BHUSHER
B BHUSHER Date:
2024.10.08
11:51:18 +0530
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.
C.C.NO.610/2020
40
05.10.2024 (Judgment pronounced in the Open
Court Vide Separate Sheet)
:ORDER:
Acting under section 255(2) of
Cr.P.C. the accused are convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused No.2 hereby stands canceled.
The accused are sentence to pay fine of Rs.24,50,000/- (Rupees twenty four lakhs fifty thousand only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.24,40,000/- (Rupees twenty four lakhs forty 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.10,000/-
(Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine
amount, the accused No.2 shall
undergo simple imprisonment of 6
months.
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.