Bangalore District Court
Sri.N.S.Harish vs Sri.S.Manjunath on 11 February, 2020
IN THE COURT OF THE XX ADDL.CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY
Dated this the 11th day of February 2020
PRESENT: KALPANA.M.S.,
B.Sc., LL.M.,
XX ADDL. C.M.M.
Bengaluru.
C.C.No.24489/2016
Complainant : Sri.N.S.Harish,
S/o.Late.Subbegowda,
Aged about 34 years,
R/at No.247, 2nd Floor,
4th Cross, 5th Main,
Mariyappana Palya,
Bangalore - 560 021.
Vs.
Accused : Sri.S.Manjunath,
"Saloon Paradise",
No.32/1, 10th Cross,
Ejukolada Bhadavane,
Malleshwaram,
Bangalore - 560 003.
Offence complied of : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
2 C.C.24489 of 2016
Final Order : Accused is Convicted
Date of Order : 11-02-2020
JUDGMENT
The complainant has filed this complaint under section 200 of code of criminal procedure read with section 138 & 142 of the Negotiable Instruments Act ( in short referred as "N.I. Act") against the accused alleging that, he has committed the offence.
02. The sum and substance of the complaint, is as follows;
Complainant and accused are best friends. Accused approached the complainant for a hand loan of Rs.3,00,000/- from 02.02.2016 to meet his financial difficulties and family necessities and agreed to repay the same within three months. Accused has not returned the money as agreed upon. Towards discharge of his liability, accused has issued 3 C.C.24489 of 2016 a cheque bearing No.372610 dated 08.07.2016 for Rs.3,00,000/- drawn on Oriental Bank of Commerce, Malleswaram, Bangalore - 560 003. Complainant presented the said cheque for encashment through his Bank and it returned with endorsement "Funds Insufficient". Thereafter, complainant got issued legal notice to the accused and it was served on him. It is contended that, accused intentionally not maintained sufficient amount in his bank account to honour the cheque issued in favour of the complainant towards discharge of legally enforceable debt. On these allegations, present complaint is filed.
03. Learned Counsel for complainant prays to treat sworn statement as examination-in-chief and to consider the documents marked as Ex.P.1 to 10. The statement under section 313 of code of criminal procedure is recorded, read over and explained to the accused. The defence of the accused is total denial.
4 C.C.24489 of 2016
04. At the first instance, accused filed affidavit in lieu of examination in chief and examined as DW.1 and subjected to cross examination. Thereafter, in view of decision of the Hon'ble High Court of Karnataka, reported in, 2018 CRR 418 (KANT). Accused was directed to lead oral evidence. Accordingly, oral evidence of accused was recorded. Further accused examined one witness DW.2 and marked document as Ex.D.1 to Ex.D.4. Hand writing expert examined as CW.1 and report marked as Ex.C.1.
05. In this case, the evidence on record shows that summons trial procedure was adopted instead of summary trial. As per the judgment passed by Supreme Court reported in 2014 Cr.L.J. 1953, in a case of Mehsana Nagarik Sahakari Bank Limited V/s. Shreeji CAB Company Limited and others, conducting Denova trial does not arises.
06. Complainant relied on the following citations;
5 C.C.24489 of 2016
1. (2014) 12 Supreme Court cases 685 Ajeet Seeds Limited Vs. K.Gopala Krishnaiah
2. AIR 2017 SC 774 Amrutbhai Shambhubhai Patel Vs. Sumanbhai Kantibhai Patel and Ors.
3. 2019(1) KCCR 230 Mr.Vasantha Amin Vs. Shekara.N.H.
4. 2018(2) KCCR 1301 Sri Devaraj Vs. State of Karnataka by Hebagodi Police, Bengalore and Another.
5. 2019(1) Kar.L.J.185 Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat
6. 2019(4) AKR 206 Prashant Vs. N.K.Venkategouda
7. AIR 2019 SUPREME COURT 1876 Rohitbhai Jivanlal Patel Vs. State of Gujarat and Another.
8. AIR 2019 SUPREME COURT 4003 M/s. Shree Daneshwari Traders Vs. Sanjay Jain and Another.
6 C.C.24489 of 2016
9. AIR 2018 SUPREME COURT 3173 Kishan Rao Vs. Shankargouda
10. AIR 2019 SUPREME COURT 3601 T.P.Murugan (Dead) Thr.Lrs Vs. Bojan Posa Nandhi Rep.Thr. POA Holder, T.P.Murugan Vs. Bojan
11. AIR 2019 SUPREME COURT 2446 Bir Singh Vs. Mukesh Kumar
12. AIR 2016SUPREME COURT 4486 S.P.S.Rathore Vs. C.B.I. and Anr.
13. 2017(4) KCCR SN 428 (DB) The Registrar General, High Court of Karnataka, Bengaluru Vs. Venkatesha @ Chandra and Others.
07. Accused relied on the following citations;
1. Copy of judgment in Crl. Appeal No.95/2010 on the file of Hon'ble High Court of Karnataka disposed off on 17.02.2016.
M/s Maha Rashtra Apex Corporation Ltd., represented by General Power of Attorney holder, Sri U.Gopal Vs. Mrs. Rachana Kohli 7 C.C.24489 of 2016
2. Copy of judgment in Crl. Appeal No.843/2008 on the file of Hon'ble High Court of Karnataka disposed off on 07.12.2012.
Smt.S.R.Uma, Vs. Sri.C.Nagarajaih
3. Copy of judgment in Crl. Appeal No.295/2013 on the file of Hon'ble High Court of Karnataka disposed off on 29.10.2013.
B.K.Prabhushankar Vs. Deepak G.Ankolekar
4. Copy of judgment in Crl. Appeal No.297/2010 on the file of Hon'ble High Court of Karnataka disposed off on 12.02.2014.
SHA MAGANLAL SAKICHANDJI, Since deceased REP. BY LR, MOHITH KUMAR Vs. PRAKASH PALANKAR
5. Copy of judgment in Crl. Appeal No.354/2012 on the file of Hon'ble High Court of Karnataka disposed off on 15.03.2016.
SRI.N.DINESH, SINCE DEAD BY HIS LR's. Smt. Rekha, Chi.Dhanush, Kum.Aishwarya @ Chinmay Vs. Sri.Rakesh Ramakanth 8 C.C.24489 of 2016
6. LAWS (KAR) 2018 3 281 Nagaraj.B Vs. Abdul Rehman @ A M Hosapet
7. AIR 2017 SUPREME COURT 5006 Ratanlal Vs. Prahlad Jat and Ors.
8. 2018(2) KCCR 1445(DB) Raghu alias Raghuram Vs. State of Karnataka
9. (2010)11 Supreme Court cases 441, Rangappa Vs. Mohan
10. AIR 2007 KARNATAKA 17, Smt.Sharadamma Vs. Smt.Kenchamma and Ors.
11. 2013 (3) KCCR 1940 Smt. Lakshmi Subramanya Vs. Sri.B.V. Nagesh
12. 2012 (3) KCCR 2057 Veerayya Vs. G.K.Madivalar
13. (2009) 2 Supreme Court Cases 513 Kumar Exports Vs. Sharma Carpets
14. AIR 2003 SUPREME COURT 182 C.Antony Vs. K.G.Raghavan Nair
15. 2014 CRLJ 2304 John K.Abraham Vs. Simon C.Abraham and Anr.
16. AIR 2019 SUPREME COURT 942 Anss Rajashekar Vs. Augustus Jeba Ananth 9 C.C.24489 of 2016 17.2018(3) AKR 747 Ravindra Vs. T. Parameshwara Hegde 18.2018(3) AKR 406 M/s. Shakti Pharmaceuticals, Belgaum Vs. Santoji Jairam Pavale 19.2018(3) KCCR 1374 Parappa and another Vs. Bhimappa and Another
20.AIR 2019 SC 1983 Basalingappa Vs Mudibasappa
08. Heard the Learned Counsel for complainant and accused. Perused the written arguments filed on behalf of the complainant, accused, citations and materials on record.
09. The points that arise for my consideration are as follows;
POINTS
1. Whether the complainant proves that, accused issued cheque for Rs.3,00,000/- towards discharge of his liability, which was returned unpaid on presentation and also not complied the notice issued by the 10 C.C.24489 of 2016 complainant and thereby committed an offence punishable under section 138 of Negotiable Instruments Act?
2. What Order?
10. My answer to the above points is as follows;
1. Point No.1: In the Affirmative
2. Point No.2: As per final order for the following;
REASONS
11. POINT No.1: Complainant has filed this complaint alleging that accused has committed offence under section 138 of N.I. Act. He pleads and asserts that, towards discharge of his liability, accused has issued a cheque for Rs.3,00,000/-. The said cheque came to be dishonoured on presentation. Complainant has issued notice within time stipulated calling upon the accused to pay the amount covered under cheque. Inspite of service of notice, accused has not paid the amount within 15 days, which gave raise 11 C.C.24489 of 2016 cause of action to file this complaint. He further relied on the documents from Ex.P.1 to 10. This witness was subjected to cross examination.
12. In this scenario, let us scrutinize the documents relied by complainant in order to examine the compliance of statutory requirements envisaged under section 138 of N.I. Act. Ex.P.1 is cheque dated 08.07.2016, Ex.P.2 is bank endorsement dated 12.07.2018, Ex.P.3 is legal notice dated 27.07.2016, Ex.P.4 is postal receipt, Ex.P.5 Postal acknowledgement, Ex.P.6 is rent agreement, Ex.P.7 is house rent agreement, Ex.P.8 is BBMP Khata Extract, Ex.P.9 is IT Return Verification form of 2015-2016 & Ex.P.10 is IT Return Verification form of 2015-2016. This complaint came to be filed on 23.08.2016. A careful scrutiny of the documents relied by the complainant goes to show that, statutory requirements of section 138 of N.I. Act is complied with and this complaint is filed within time. Thus, complainant relied 12 C.C.24489 of 2016 on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act.
13. No doubt, the said presumptions of law are rebuttable in nature. The accused can take probable defence and rebut the presumption available to the complainant. Let us examine whether accused has successfully rebutted the presumptions of law. It is the specific defence of the accused that, he know the complainant since three years. On 26.01.2016, he has taken loan of Rs.25,000/- from the complainant and issued one signed blank cheque drawn on Oriental Bank. After four months, an amount of Rs.25,000/- was repaid through common friend by name Noor. Said Noor assured to get back the cheque, but failed to return the cheque. Subsequently, complainant misused the cheque and filed false complaint. The legal notice alleged to have been issued by the complainant was not served on him. On these contentions, accused sought for dismissal of the complaint and 13 C.C.24489 of 2016 consequent acquittal. To endorse this contention, accused and one witness were examined as DW.1 & DW.2 and relied on the documents from Ex.D.1 to Ex.D.4. Ex.D.1 is the Certified copy of the private complaint in CC.No.10461/2017, Ex.D.2 is the deposition of N.S.Harish in CC.No.10461/2017, Ex.D.3 is the affidavit evidence of accused/Tirumalaswamy in CC.No.10461/2017 and Ex.D.4 is the Certified copy of deposition of Mujaid Aliyas Syed Mujamil Ahammed in CC.No.10461/2017. Both DW.1 and DW.2 were subjected to cross examination.
14. In the back drop of the rival contentions, this court has given anxious consideration to the case papers. At the outset, accused has not disputed the issuance of the cheque in question and also admitted the signature present therein. It goes without saying that, when the drawer has admitted the issuance of the cheque as well as the signature present therein, the presumptions envisaged under section 118 r/w 14 C.C.24489 of 2016 139 of N.I. Act, would operate in favour of the Complainant. The said provisions lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder court shall presume that the instrument was endorsed for consideration. So also, in the absence of contrary evidence on behalf of the accused, the presumption under section 118 of the N.I. Act goes in favour of the complainant.
15. This proposition of law is laid down by the Hon'ble High Court of Karnataka in the decision reported in ILR 2006 KAR 4672 - J.Ramaraj V/s Iliyaz Khan, wherein it is held that;
"Mere denial of issuing cheque would not be sufficient as it is time and again noted that once the cheque is issued duly signed by the petitioner, the presumption goes against him as per Sec.139 of the Negotiable Instruments Act."
15 C.C.24489 of 2016 No doubt, said statutory presumptions are rebuttable in nature. It is for the accused to place cogent and probable defence to rebut the presumptions raised in favour of the Complainant.
16. In order to discharge the burden of rebuttal, accused has taken defence of issuance of cheque in question in relation to the previous transaction for an amount of Rs.25,000/-. He claims that, the said amount was repaid after four months through his friend Noor. But, complainant instead of returning the cheque, misused the same for this false claim. To substantiate this defence, apart from his evidence, accused has also placed the evidence of his friend Noor Mohammed as DW.2. Said witness says that, at his instance, complainant lent Rs.25,000/- to the accused. Accused has paid interest for a period of one year. After one year, there was dispute between the complainant and accused, which reached the police station. In the police 16 C.C.24489 of 2016 station, negotiation taken place in his presence and witness himself paid Rs.25,000/- by way of cash to the complainant. Relying on the evidence of DW.1 and DW.2, accused reasserts the previous transaction.
17. On the other hand, complainant denied the aforesaid defence put forth by the accused, by reaffirming impugned transaction. To fortify his claim, the attention of the court was invited to the material discrepancies and contradictions surfacing in the evidence of accused and his witness. It is impressed that, as per the defence put forth by the accused, he repaid Rs.25,000/- loan amount immediately after four months and not whispered anything about the payment of interest. Whereas, his witness who allegedly plays important role in the said transaction states that, an amount of Rs.25,000/- was repaid after one year that too after intervention of police. The witness improved the case by deposing the payment of Rs.15,000/- towards interest. For 17 C.C.24489 of 2016 better appreciation the relevant portion of evidence of DW.1 is culled out as under;
" ¢.26.1.16gÀAzÀÄ ¦gÁåzÀÄzÁgÀjAzÀ gÀÆ25000 ¸Á® vÉUÉzÀÄPÉÆArzÉÝ. D ¸ÀAzÀ¨ÀsðzÀ°è MAzÀÄ ¸À» ªÀiÁrzÀ NjAiÀÄAl¯ï ¨ÁåAPï SÁvÉAiÀÄ SÁ° ZÉPÀÌ£ÀÄß ¦gÁåzÀÄzÁgÀjUÉ PÉÆnÖzÉÝ. 4 wAUÀ¼À £ÀAvÀgÀ £À£Àß ªÀÄvÀÄÛ ¦gÁåzÀÄzÁgÀgÀ ¸ÁªÀiÁ£Àå ¸ÉßûvÀ£ÁzÀ £ÀÆgï ªÀÄÄSÁAvÀgÀ gÀÆ25000 ºÀtªÀ£ÀÄß ¦gÁåzÀÄzÁgÀjUÉ ªÀÄgÀÄ¥ÁªÀw¹zÉÝãÉ."
From this part of evidence of accused it is crystal clear that, he repaid an amount of Rs.25,000/- after four months.
18. On the contrary, the evidence of DW.2, reads as under;
" zÀÆgÀÄzÁgÀjUÉ DgÉÆæAiÀÄ£ÀÄß £Á£Éà ¥ÀjZÀ¬Ä¹gÀÄvÉÛãÉ. £À£Àß ªÀÄÄSÁAvÀgÀ zÀÆgÀÄzÁgÀgÀÄ, DgÉÆæUÉ gÀÆ-25000 ºÀt PÉÆnÖzÁÝgÉ. MAzÀÄ ªÀµÀðzÀ CªÀ¢AiÀĪÀgÉUÀÆ zÀÆgÀÄzÁgÀjUÉ §rØ ¥ÁªÀw¹zÁÝgÉ. MAzÀÄ ªÀµÀðzÀ £ÀAvÀgÀ, DgÉÆæ ªÀÄvÀÄÛ zÀÆgÀÄzÁgÀgÀ £ÀqÀĪÀÉ UÀ¯ÁmÉ £ÀqÉzÀÄ ¥ÉÇð¸ï oÁuÉUÉ ºÉÄÁÃzÀgÀÄ. £À£ÀߣÀÄß ¸ÀºÀ ¥ÉÇð¸ï oÁuÉUÉ PÀgɹzÀgÀÄ. oÁuÉAiÀÄ°è gÁf ªÀiÁr, DgÉÆæ zÀÆgÀÄzÁgÀÀjUÉ gÀÆ-25000 PÉÉÆqÀĪÀAvÉ w½¹zÀgÀÄ. £ÀAvÀgÀ, £Á£Éà zÀÆgÀÄzÁgÀjUÉ gÀÆ-25000 ºÀtªÀ£ÀÄß £ÀUÀzÀÄ gÀÆ¥ÀzÀ°è PÉÆnÖzÉÝãÉ."
18 C.C.24489 of 2016 From this part of evidence of eye witness of the accused that, amount of Rs.25,000/- was repaid after one year, goes contrary to the version of the accused. Witness affirms the payment of interest for a period of one year and also deposed that, amount of Rs.25,000/- was repaid by him. Whereas, accused reasserts in the cross examination that, Rs.25,000/- was paid by him only. Accused has not taken suitable steps to put forth satisfactory explanation to this contradiction.
19. Even otherwise, the accused has not placed iota of evidence to show the alleged previous transaction of Rs.25,000/- dated 26.01.2016. Admittedly, no receipt obtained by the accused on the date of repayment of Rs.25,000/- to the complainant. This sounds unnatural as any prudent man will obtain acknowledgment for repayment of hand loan or make repayment by way of DD or cheque to get proof of repayment. Further, accused has not placed believable evidence regarding availability of funds to repay the 19 C.C.24489 of 2016 Rs.25,000/- to the complainant on the given date. That apart, when the complainant has not returned the cheque as alleged, accused has not taken any steps to get back the cheque through issuance of legal notice calling upon the complainant to return the cheque or stop payment directions to the concerned bank or police complaint/private complaint before the court of law. In the normal course of business, it is quite natural to take suitable steps for obtaining the cheque alleged to have been issued for security after repayment of the amount. The inaction on the part of accused is one of the suspicious circumstances against the defence.
20. Furthermore, in the course of cross examination, it was suggested that, at the time of alleged money transaction between the complainant and the accused for an amount of Rs.25,000/-, two cheques were issued by the accused. Whereas, accused in his evidence clearly stated that, a blank signed cheque was issued to the complainant. Even in the 20 C.C.24489 of 2016 cross examination, accused reasserts issuance of only one cheque to the complainant. No explanation is forth coming for this improvement in the defence of the accused.
21. Accused has taken further contention of issuance of signed blank cheque to the complainant in-connection with the previous transaction of the year 2016 for an amount of Rs.25,000/-. Per contra, complainant claims that, the accused has handed over the filled cheque towards discharge of impugned hand loan. In order to fortify his contention of completion of the blank signed cheque by the complainant as per his convenience, accused has filed an application to refer the disputed cheque with the admitted hand writing of the complainant for comparison to the Forensic Lab. The application came to be rejected by this court. Accused preferred an appeal before the Hon'ble District and Sessions Court. The Appellate authority allowed the application with a direction to the court to refer the admitted writings of the 21 C.C.24489 of 2016 complainant along with the disputed cheque to compare the writings. Accordingly, the cheque was sent to Truth Lab, Bengaluru. Subsequently, the documents were sent by the said lab to their Chennai Office.
22. The report submitted before the court as per Ex.C.1 with an opinion that, ' the person who wrote the standard writings and signatures also wrote the questioned writings present on the disputed cheque.' The expert was examined as CW.1 and cross examine in lengthy on behalf of the complainant. In the cross examination of the expert, it has been elicited that, there is difference in pen pressure, shading, pause, pen lift, hesitation, appreciation, placing, space and retouching in the writings of each and every person. Though, expert has examined all these aspects, but failed to mention all of them in his report. Further, expert admits that, there is difference in letter ' T ' of ' Three ' word present in the standard writings to that of the writings 22 C.C.24489 of 2016 present on the cheque. Witness also admits there is difference in the other letters viz., ' h, r and e' present in the aforesaid word. Expert has also admitted that, he has arrived at an opinion of disguised writing present in the disputed cheque on the ground of spelling mistake in the writings. There is difference in the standard writings and disputed writing in respect of space between letters and mode of writing and letter fashion. From over all consideration of the evidence of expert, it is evident that there is considerable difference between the standard writings / admitted writings and the disputed writing presents on the cheque. Surprisingly, being an expert, CW.1 jumped into an opinion of disguising writing only on the ground of spelling mistake. This sounds strange. Though, expert witness admits that, he has verified characteristics of pen pressure, shading, pause, pen lift, hesitation, appreciation, placing, space and retouching in the writings present in the standard and questioned writings, for the reasons best known to him those aspects do not find 23 C.C.24489 of 2016 place in his report. For all these reasons, expert opinion does not inspire the confidence of this court.
23. On this point, it is profitable to refer the decision reported in, 2017(4) KCCR SN 425 (DB), The Registrar General, Hon'ble High Court of Karnataka, Bengaluru Vs. Venkatesha @ Chandra and Others, wherein it is held that;
" C. EVIDENCE ACT, 1872- Section 45- Expert evidence - Admissibility - Preservation and handing over of chance finger prints found to be doubtful- Expert not delineating as to which points on which he found questioned finger prints tallied with specimen finger prints- His opinion cannot be ascribed any weight.
Held : An expert is not a witness of fact and his evidence assumes the character of the opinion evidence and therefore he is required in the cross -examination. Section 45 of the Evidence Act makes the opinion of an expert admissible in evidence provided the opinion is backed by reasons and justifications. "
24 C.C.24489 of 2016 In the present case, it is evident from the evidence of the expert that, he has not assigned valid reasons for not mentioning the characteristics of the hand writing and the opinion is not supported with reasons and justification.
24. It is settled point that, expert evidence is not conclusive proof and it requires further corroboration of evidence. As discussed earlier, accused has not placed cogent, convincing and consistent evidence to prove his defence. In this view of the matter, this court opined that, it is not to safe to rely on the expert opinion. In this context it is profitable to refer the authorities relied by the complainant in, AIR 2016 Supreme Court 4486, Criminal Appeal No.2126 of 2010, D/-23.09.2016, S.P.S. Rathore Vs. C.B.I and Anr, it is held that;
" (D) Evidence Act (1 of 18720, S.45- Evidence of Hand writing expert- Is only opinion evidence and not conclusive- Cannot be relied upon, unless corroborated by clear direct evidence or by circumstantial evidence. "
25 C.C.24489 of 2016
25. On this aspect, it is profitable to refer the authorities relied by the complainant in, AIR 2019 Supreme Court 2446 in Criminal Appeal Nos. 230-231 of 2019, D/- 06.02.2019, Bir Singh Vs. Mukesh Kumar, it is held that;
"(C) Negotiable Instruments Act (26 of 1881), S.138, S.139- Evidence Act (1 of 1872), S.4-
Presumption u/S. 139- Is presumption of law, distinguished from presumption of facts- Presumptions are rules of evidence and do not conflict with presumption of innocence, which requires prosecution to prove case against accused- Obligation on prosecution may be discharged with help of presumptions of law and presumptions of fact unless accused adduces evidence showing reasonable possibility of non-existence of presumed fact. (E) Negotiable Instruments Act (26 of 1881), S.138, S.139- Dishonour of cheque-
Presumption as to legally enforceable debt- Rebuttal- Onus to rebut presumption that cheque issued in discharge of debt or liability is on accused. "
In the decision relied by the complainant reported in, AIR 2019 SUPREME COURT 1876, Rohitbhai Jivanlal
26 C.C.24489 of 2016 Patel Vs. State of Gujarat and Another; wherein it is held that;
" (D) Negotiable Instruments Act (26 of 1881), S.138, S.139 - Dishonour of cheque- Principles of presumption - Once presumption of existence of legally enforceable debt drawn in favour of complainant, onus is shifted on accused- Unless onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused."
In the another decision relied by the complainant reported in, AIR 2019 SUPREME COURT 4003, M/S. Shree Daneshwari Traders Vs. Sanjay Jain and another;
" Negotiable Instruments Act ( 26 of 1881), Ss.138, 139- Dishonour of cheque- Legally enforceable debt- Presumption as to - Statement of complainant that cheques in question were issued for rice bags purchased on credit- Failure of accused to rebut presumption by leading cogent and consistent evidence- Defence of accused that complainant did not return cheques issued by him after payment made in cash and used it on later date is improbable since accused continued
27 C.C.24489 of 2016 transaction without taking steps to get back cheques- Accused liable to be convicted." The ratio laid down in the cited decisions are aptly applicable to the case on hand.
26. Be that as it may, section 20 of NI Act enables the complainant to fill up the incomplete cheque. In the present case, admittedly the disputed cheque was issued in favour of the complainant and also not disputes the signature present on the cheque. No doubt, he has taken the contention of previous transaction. However, said aspect is not proved through cogent and consisting evidence. Such being the case, the complainant being holder in due course, is entitled to complete the negotiable instrument i.e., cheque.
27. At this juncture, Learned Counsel for accused vehemently argued that, it is not the case of the complainant that, himself filled up the cheque, it is his case from the 28 C.C.24489 of 2016 beginning that, accused has filled up the cheque. Therefore, complainant cannot take shelter under section 20 of the Negotiable Instruments Act. Of course, there is slight discrepancy in the evidence of complainant in respect of who filled up the blank cheque. Nevertheless, it is settled point that, penal liability of the accused is not absolved on the ground of issuance of blank signed cheque. It is presumption of law that, the drawer of the cheque authorizes the holder in due course to complete the cheque. In this context, it is profitable to refer the authorities relied by the complainant reported in, AIR 2019 Supreme Court 2446 in Criminal Appeal Nos. 230-231 of 2019, Bir Singh Vs. Mukesh Kumar, D/- 6.02.2019, it is held that;
" (G)- Negotiable Instruments Act (26 of 1881), S.138, S.139- Presumption as to legally enforceable debt- Rebuttal- Signed blank cheque- If voluntarily presented to payee, towards payment, payee may fill up amount and other particulars and it in itself would not invalidate cheque- Onus would still be on accused to prove that cheque was not issued
29 C.C.24489 of 2016 for discharge of debt or liability by adducing evidence.
(H). Negotiable Instruments Act (26 of 1881), S.138- Dishonour of cheque- Complainant can fill up amount or particulars in blank cheque."
In another decision relied by the complainant reported in, AIR 2019 SUPREME COURT 1876, Rohitbhai Jivanlal Patel Vs. State of Gujarat and Another; wherein it is held that;
" (E). Negotiable Instruments Act (26 of 1881), S.138 - Dishonour of cheque -Insufficiency of amount- Plea of issuance of cheques in favour of friend and its misuse by complainant -
Failure of accused to show reasonable probability of existence of transaction with his friend- Evidence of friend not supporting his case- Accused not denying his signatures on cheques but attempting to suggest availability of his signatures on blank stamp paper with friend - No cogent reasons for him to sign blank stamp paper- Cheques with all relevant particulars are same cheques forming subject- matter of complainant's case- Accused liable to be convicted."
30 C.C.24489 of 2016 Similar to the facts and circumstances of the cited decision, in the present case, the accused not denied his signature on the cheque. No cogent reasons for him to sign blank cheque. By applying the proposition of law to the facts and circumstances of this case, this court has an arrived at an irresistible conclusion that, this contention of the accused is not helpful to his defence.
28. Further, the accused disputes the service of legal notice on the contention that, the signature present on the Ex.P.5 acknowledgment neither belongs to the accused nor belongs to his family members. To counter this contention, complainant relied on the admissions elicited in the course of the cross examination of the accused, which reads as under;
"¸À®Æ£ï ¥ÁågÁqÉÊ¸ï ºÉ¸Àj£À ¸À®Æ£ï £ÀqɸÀÄwÛzÉÝ JAzÀgÉ ¸Àj. ¸ÀzÀj ¸À®Æ£ï ¦gÁ墣À ²gÉÆãÁªÉÄAiÀÄ°è ¸ÀÆa¹gÀĪÀ £ÀAB32-1----
-- ªÀįÉèñÀégÀA, ¨ÉAUÀ¼ÀÆgÀÄ F «¼Á¸ÀzÀ°èzÉ JAzÀgÉ ¸Àj. ¤¦.5- CAZÉ ¹éÃPÀÈwAiÀÄ°è ªÉÄÃ¯É ºÉýzÀ £À£Àß «¼Á¸ÀªÀ£Éßà §gÉAiÀįÁVzÉ JAzÀgÉ ¸Àj."
31 C.C.24489 of 2016 From this part of evidence of accused, it is clear that, the address mentioned in the legal notice as well as in the Postal acknowledgement belongs to accused. To put it other way, complainant has sent the legal notice to the proper and correct address of the accused. Section 27 of General Clauses Act and as well as 114 of the Indian Evidence Act provides that, service of legal notice sent to the proper and correct address of the accused shall deemed to have been effected on the addressee.
29. In this context, it is profitable to refer the decision reported in, 2002 Crl. LJ 1926 (Kar), Fakirappa Vs. Shiddalingappa, wherein it is held that;
" The only requirement for the service of demand notice is that, the notice should have been sent to the correct address of the drawer. Since the mode of service is not prescribed by the law, it can be sent either by registered post or under certificate of posting or otherwise. The expressions " Left, not known, ' not available in the house', 'house locked', 'shop closed' etc., are all synonyms. Therefore, 32 C.C.24489 of 2016 if the address of the drawer is proved to be correct, even if the notice is returned with the above remarks, then the notice is deemed to have been served on the drawer."
In the decision relied by the complainant reported in, (2014) 12 Supreme Court Cases 685, Ajeet Seeds Limited Vs. K. Gopala Krishnaiah, it is held that;
" B. Statute Law- General Clauses Act, 1897- S.27- Presumption as to service of notice- Notice sent to correct address by registered post- Service of, unless and until the contrary is proved, reiterated, is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business- Evidence Act, 1872- S.114."
In the present case, accused has not disputed his address mentioned in the legal notice. Hence, it can be taken that, there is valid service of service of legal notice.
30. Further, it could be seen that, inspite of service of legal notice, the accused has not taken steps to issue reply taking all these contentions. The act of the accused in not issuing reply at the earliest point of time immediately after service of 33 C.C.24489 of 2016 the legal notice is one of the strong circumstances in favour of the complainant. This proposition of the law laid down in the following decisions.
31. In decision reported in, 2007 CRI.L.J. (NOC) 520 (KER), in a case of Sanjeev P.R. V/s. Thriveni Credit Corporation, Thodupuzha & Another, wherein it is held that;
"(B). Negotiable Instrument Act (26 of 1881), S.138- Dishonour of cheque- Conviction- Validity-
Signature in cheque is admitted -
Notice of demand though duly received and acknowledged , did not evoke any reply......- Concurrent finding that complainant has succeeded in proving all ingredients of the offence punishable under section 138 - Conviction of accused proper."
Further, the decision reported in, 2006 CRI.L.J.1, in a case of Gorantala Venkateswara Rao. V/s. Kolla Veera Raghava Rao and another, it is held that;
34 C.C.24489 of 2016 "(B) Negotiable Instrument Act ( 26 of 1881), S.138 - Dishonour of cheque- Legally enforceable debt-
Failure of accused in giving reply to legal notice issued by complainant- Is one of the strong circumstances to draw an inference that accused borrowed amount from complainant and cheque was issued towards part payment of legally enforceable debt."
From the ratio laid down in the aforesaid decisions it is clear that, non issuance of reply by the accused is fatal to his defence. As such, the defence taken by the accused is not acceptable.
32. Accused has taken further contention of non disclosure of present transaction in the Income Tax returns. It is contended that, non disclosure of the present transaction in the IT returns creates serious doubt about the impugned transaction. To buttress this argument, the Learned Counsel for the accused relied on the decision of Hon'ble High Court of 35 C.C.24489 of 2016 Karnataka reported in, 2013 (3) KCCR 1940, Smt. Lakshmi Subramanya Vs. Sri.B.V. Nagesh, wherein it is held that;
" C. NEGOTIABLE INSTRUMENTS ACT, 1881- Section 138- Acquittal- Factum of lending - Complainant not reflecting in his IT return- Accused borrowing Rs.5 lakhs - Documentary evidence showing payment of that amount and Rs.3 lakhs towards interest- Complainant's allegation of lending Rs.8 lakhs cannot be sustained- After appreciation of evidence Magistrate justified in acquitting accused."
33. Per contra, complainant relied on the latest decision of the Hon'ble High Court of Karnataka reported in, 2019(1) Kar.L.R.185, Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, it is held that;
" Negotiable Instruments Act, 1881- Sections 138 and 139- Endorsement ' payment stopped by drawer' - The trial Court in the instant case, merely considered a suggestion made from the accused side in the cross- examination of PW-1 that the complainant was an income tax assessee and that he has not declared the alleged loan transaction in his returns and disbelieved the case of the complainant that too, ignoring that legal presumption under Section 139 of the N.I.Act, was operating in favour of the complainant -
36 C.C.24489 of 2016 For these reasons, it has to be held that the complainant has beyond reasonable doubt proved the guilt of the accused punishable under Section 138 of the N.I.Act. As such, the impugned judgment of acquittal passed by the trial Court deserves to be set aside and respondent /accused is liable to be convicted for the offence punishable under Section 138 of the N.I.Act."
In the cited decision Hon'ble High Court of Karnataka pleased to observe that;
' When the accused in the process of rebutting the presumption existing in favour of the complainant under Section 139 of the N.I.Act apart from making a mere suggestion as to absence of any documentation about the alleged loan transaction and absence of non- disclosure of the loan transaction in the Income Tax Returns, is also required to place more material either in the form of favorable replies elicited in the cross examination of the complainant or in the form of documents or atleast bringing to the notice of the court and convincing it that the circumstances of the case warrants for drawing such a conclusion'. In the present case also, accused merely relied on the suggestions made to the complainant in the course of cross examination in relation to the non production of the 37 C.C.24489 of 2016 supportive documents to the impugned transaction as well as non disclosure of the present transaction in the Income Tax Returns. Those suggestions are not sufficient to rebut the statutory presumptions available to the complainant.
34. Further, the decision reported in, 2017 Cr.R 530, (Kant) between C.N.Dinesha Vs. Smt. C.G.Mallika, it is held that;
"The Culpability of offence under section138 of Negotiable Instrument Act will not freeze for the reason or violation of section 269 of IT Act and nothing prevents operation of statutory presumption."
In another decision reported in, Writ Petition NO.29144/2018, dated 29th day of August 2018, Dr.M. Krishna Shetty Vs. Sri.H.R.Nagabhushan, it is held that;
" The prosecution under Section 138 of N.I.Act cannot be stalled for non- compliance of Section 269 SS of the 38 C.C.24489 of 2016 Income Tax Act. Any cash transaction in violation of section 269 SS of Income Tax Act may give rise to an independent criminal offences, but on account of violation of the said provision, the prosecution of the petitioner for the alleged dishonour of cheque under Section 138 of Act does not become bad in law."
In view of the proposition of law laid down in the aforesaid decisions, this court is of the considered view that, non disclosure of the impugned transaction in the Income Tax returns of the complainant is not fatal to his case.
35. Furthermore, accused disputes source of income of the complainant to lend amount of Rs.3,00,000/- to the accused by way of suggestion to the complainant as under;
É É DgÉÆæUÉ ªÀÄÆgÀÄ ®PÀë gÀÆ¥Á¬Ä ºÀt ¸Á® vÉUÉzÀÄPÉƼÀÄîªÀ CªÀ±ÀåPÀvÉ EgÀ°®è JAzÀgÉ DvÀ£À ªÀÄ£ÉAiÀÄ vÉÆAzÀgÉUÁV vÉUÉzÀÄPÉÆArzÁÝgÉ. ªÀÄÆgÀÄ ®PÀë gÀÆ ºÀt ¸Á® PÉÆqÀĪÀ DyðPÀ ¸ÁªÀÄxÀðå E®è JAzÀgÉ ¸ÀjAiÀÄ®è. É É From this suggestion, it can be safely infer that, as per the accused, he is financially in a sound position and there 39 C.C.24489 of 2016 was no necessity to take loan from the complainant. Per contra, accused himself has put forth the defence of availing loan from the complainant in the year 2016. This defence of the accused uproots the aforesaid suggestion disputing the financial capacity of the complainant.
36. Be that as it may, accused has taken further contention of non disclosure of source of income in the Income Tax returns of the complainant for the relevant period. To counter this contention, complainant relied on the Income Tax returns for the assessment year 2015-2016 as per Ex.P.9 and for assessment year 2016-2017 as per Ex.P.10 and the rent agreements as per Ex.P.6 & Ex.P.7. The rental income is reflected in the Income Tax returns. Furthermore, the complainant claims that, he is running a club, which is not countered by the accused. From these aspects, it is evident that, complainant has got sufficient income to lend the present loan in favour of the accused. Accused has not placed 40 C.C.24489 of 2016 contrary evidence to disbelieve the case of the complainant. Moreover, in Rangappa Vs. Mohan reported in AIR 2010 SC 1898 = 2010 AIR (SCW) 2946, Hon'ble Supreme Court of India, pleased to observe that;
"In the light of these extracts, we are in agreement with the respondent-
claimant that the presumption mandated by section 139 of the Act does indeed include the existence of the legally enforceable debt or liability".
In view of the law laid by three judges bench of Hon'ble Apex Court, the presumption enshrined under section 139 of the N.I. Act is extendable to the existence of legally enforceable debt. Accused has not placed cogent material to rebut the said presumption. As such, this contention of the accused holds no water.
37. Thus, it is for the accused to rebut the said presumption by placing cogent, consisting and acceptable evidence. As 41 C.C.24489 of 2016 discussed supra, the evidence placed by the accused in support of his defence is inconsistent and improbable. Hence, this court can safely believe the case of the complainant supported by the statutory presumptions as well as material, oral and documentary evidence.
38. From the overall consideration of the evidence on record it is forthcoming that, accused has not taken probable defence to rebut the statutory presumption. Mere denial is not sufficient to discharge the onus shifted on accused. To fortify this opinion, it is proper to refer the decision reported in, 2001 CRI.L.J. 4647, in a case of Hiten P.Dalal V/s. Bratindranath Banerjee, wherein it is held that;
"(B) Negotiable Instrument Act ( 26 of 1881), Ss.139, 138- Dishonour of cheque- Presumption that cheque was drawn for discharge of liability of drawer- Is presumption of law- Ought to be raised by Court in every case-
Rebuttal evidence- Nature- Mere plausible explanation is not sufficient-
Proof of explanation is necessary.
42 C.C.24489 of 2016 Evidence Act (1 of 1872), Ss .114, 101- 104."
Further in another decision reported in, 2017(2) A.K.R. 527, Arjun Vs.E.Shekar, it is held that, S. 138, 139- Presentation of lawful consideration- Rebuttal of - Burden of proving that cheque has not been issued for any debt or liability - is on accused - mere plausible explanation not sufficient to disprove complainant' s case.
From the gist of the ratio laid down in the above decisions, it is clear that, burden shift on the accused to rebut the statutory presumption through cogent evidence, which is not discharged by the accused in the present case.
39. Under the facts and circumstances of this case, it is profitable to refer the decisions of the Hon'ble Supreme Court of India reported in, AIR 2018 SUPREME COURT 3601, in a 43 C.C.24489 of 2016 case of, T.P.Murugan (Dead) Thr.Lrs. V. Bojan, wherein it is held that;
" Negotiable Instruments Act (26 of 1881), Ss.118,138,139- Dishonour of cheque- Presumption as to enforceable debt- cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back in 1995-
Behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural- Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him- Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt- Conviction, proper".
40. In another decision reported in, AIR 2018 Supreme Court 3604, in a case of Krishna Rao Vs. Shankargouda, wherein it is held that;
"Negotiable Instruments Act (26 of 1881), Ss.138, 139-Dishonour of cheque- Presumption as to - Accused issuing cheque of Rs. 2 lacs towards repayment of loan to complainant - Said cheque dishonored on account of insufficiency funds- Complainant 44 C.C.24489 of 2016 proving issuance of cheque having signatures of accused- Accused failing to rebut presumption raised against him and no evidence led by him in his support - Acquittal of accused by High Court in revisional jurisdiction on ground of doubt in mind of court with regard to existence of loan, improper- Accused, liable to be convicted".
41. Moreover, in the latest judgment decided on 15th March 2019, the Hon'ble Supreme Court of India, AIR 2019 Supreme Court 1876; Rohitbhai Jivanlal Patel V/s State of Gujarat & Another, it is observed in para 12 that;
" 12. For determination of the point as to whether the High Court was justified in reversing the judgment and order of the Trial Court and convicting the appellant for the offence under section 138 of the NI Act, the basic questions to be addressed to are two - fold: as to whether the complainant - respondent No.2 had established the ingredients of Sections 118 and 139 of the NI Act, so as to justify drawing of the presumption envisaged therein; and if so, as to whether the accused -appellant had been able to displace such presumption and to establish a probable defence whereby, the onus would again shift to the complainant?........"
45 C.C.24489 of 2016 It is further observed in 18.6 that;
" 18.6. The fact of the matter remains that the appellant could not deny his signatures on the said writing but attempted to suggest that his signatures were available on the blank stamp paper with Shri Jagdishbhai. This suggestion is too remote and too uncertain to be accepted. No cogent reason is available for the appellant signing a blank stamp paper. It is also indisputable that the cheques as mentioned therein with all the relevant particulars like cheque numbers, name of bank and account number are of the same cheques which form the subject matter of these complaint cases. The said document bears the date 21.03.2007 and he cheques were postdated, starting from 01.04.2008 and ending 01.12.2008. There appears absolutely no reason to discard this writing from consideration...."
It is further observed in para No.19 that;
" 19. Hereinabove, we have examined in detail the findings of the Trial Court and those of High Court and have no hesitation
46 C.C.24489 of 2016 in concluding that the present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the 47 C.C.24489 of 2016 statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been or irrelevant factors of consideration of a probable defence of the appellant....."
The ratio laid down in the cited decisions are aptly applicable to the case on hand.
42. The accused has taken a vague defence and not placed cogent evidence to prove the same. This aspect is discussed in detail in a decision reported in, 2014(4) AKR 98 between Sripad Vs.Ramadas M.Shet, Criminal Appeal No.2689 of 2009, wherein it is held that;
"Negotiable Instrument Act (26 of 1881), Ss.138,139, 118- Dishonour of cheque-Acquitted-Validity-Cheque issued by repay loan amount to complainant, was dishonoured-Specific defence -However, accused failed to rebut initial presumption under sections 118 and 119- Mere distorted version or mere taking up defence by It 48 C.C.24489 of 2016 means that he is not liable to pay any amount- Are not sufficient to put back the burden on to the complainant-
Acquittal of accused- Not proper."
The ratio laid down in the cited decision is squarely applicable to the facts on hand.
43. In this case plea of the accused was recorded as per section 251 of Cr.P.C. Accused pleaded not guilty. As per section 251 of Cr.P.C. accused has to state about his defence. Here, except pleading not guilty accused has not stated his defence at the time of recording plea. As per the decision reported in AIR 2014 SC 2528 (Indian Bank Association V/s Union of India), Crl. Petition No.8943/2010 M/s.Mess Transgare Pvt V/s Dr .R. Parvathareddy and in Rajesh Agarwals case, Wherein, it is held that; " Accused cannot simply say " I am innocent " or " I pleaded not guilty ". The proposition of law laid down in the aforesaid decision is squarely applicable to the facts and circumstances of this 49 C.C.24489 of 2016 case. As such, it cannot be taken that accused has rebutted the presumption of law enshrined under section 139 and 118 of N.I. Act, by mere pleading not guilty.
44. From the discussion made supra, it is clear that, accused has neither taken probable defence nor taken steps to prove the same. To put it other way, accused has not taken and proved probable defence to rebut the presumption of law available in favour of the complainant, envisaged under section 118 read with section 139 of N.I. Act. Accordingly, the case of the complainant is acceptable. Complainant has proved that, accused has intentionally not maintained sufficient amount in his account to honour the disputed cheque. Hence, this point No.1 under consideration is answered in the affirmative.
45. POINT NO.2: In view of the reasons stated and discussed above, the complainant has proved the guilt of the 50 C.C.24489 of 2016 accused punishable under section 138 of N.I. Act It is worth to note that, the offence is of the nature of civil wrong. Hence, it is proper to award sentence of fine, instead of awarding sentence of imprisonment. Hon'ble Supreme Court of India in a decision reported in, (2015) 17 SCC 368, in a case of H.Pukhraj Vs. D.Parasmal, observed that, having regard to the length of trial and date of issuance of the cheque, it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Considering all these aspects, this court proceed to pass the following;
ORDER Acting under section 255 (2) of Criminal Procedure Code, accused is hereby convicted for the offence punishable under section 138 of Negotiable Instrument Act and sentenced to pay fine of Rs.5,10,000/- (Five Lakhs Ten Thousand Rupees only). In default 51 C.C.24489 of 2016 thereof accused shall undergo simple imprisonment for 4 (Four) months.
Acting under section 357(1) (b) of code of criminal procedure, it is ordered that, Rs.5,00,000/- ( Five Lakhs Rupees only), there from shall be paid to the complainant as a compensation, remaining fine amount of Rs.10,000/-
( Ten Thousand Rupees only) is defrayed to the state for the expenses incurred in the prosecution.
The bail bond of the accused stands cancelled.
52 C.C.24489 of 2016 Office to supply the copy of this Judgment to the accused immediately on free of cost.
{Dictated to the stenographer, transcribed and computerized by him, revised corrected and then pronounced in the open court on this 11th day of February 2020}.
(KALPANA.M.S.) XX ACMM, Bengaluru.
ANNEXURE List of witnesses examined on behalf of Complainant:
P.W.1 N.Harish List of documents produced on behalf of complainant:
Ex.P.1 Cheque
Ex.P. 1(a) Signature of the accused
53 C.C.24489 of 2016
Ex.P. 2 Bank endorsement
Ex.P. 3 Copy of the legal notice
Ex.P. 4 Postal receipt
Ex.P. 5 Postal acknowledgement
Ex.P.6 Rent agreement
Ex.P.7 House rent agreement
Ex.P.8 BBMP Khata Extract
Ex.P.9 IT Return verification form of
2015-2016
Ex.P.10 IT Return verification form of
2016-2017
List of witnesses examined on behalf of accused:
DW.1 Manjunath.S DW.2 Noor Mohammed
List of documents produced on behalf of accused:
Ex.D.1 Certified copy of the private complaint in CC.No.10461/2017 54 C.C.24489 of 2016 Ex.D.2 Deposition of N.S.Harish in CC.No.10461/2017 Ex.D.3 Affidavit evidence of accused/Tirumalaswamy in CC.No.10461/2017 Ex.D.4 Certified copy of deposition of Mujaid Aliyas Syed Mujamil Ahammed in CC.No.10461/2017.
List of witnesses examined on behalf of Court :
C.W.1 Professor K.Ramakrishnan, Director, Truth Lab, Chennai.
List of documents produced by court:
Ex.C.1 Report
XX A.C.M.M.,
Bengaluru.