Bangalore District Court
M/S Bhumandala Chits Pvt. Ltd vs Mr. C.G Chikkannavar on 15 February, 2025
C.C.NO.30238/2023
0
KABC030533232023
Presented on : 27-11-2023
Registered on : 28-11-2023
Decided on : 15-02-2025
Duration : 1 years, 2 months, 18 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 15th DAY OF FEBRUARY-2025
C.C.NO.30238/2023
Complainant: M/s.Bhumandala Chits Pvt.,Ltd.,
Regd and Admn office at No.# 64,
1st Floor, Nehru Road, Girinagar,
Bangalore-560085.
R/by its Foreman/Director,
Sri.M.S.Rudresh S/o Shankregowda,
Age:45 years, Ph:7026638765,
Email:[email protected]
(By Sri.Suresh.C.Subbaiah.,Adv.,)
V/s
Accused: Mr.C.G.Chikkannavar S/o Goneppa
Age: Major, R/at No.128, 11th Block,
1st Floor, HUDCO Police QTRS,
Madivala, Koramangala, Bangalore-34.
Ph.No.9902023172.
(By Sri.Santhosh Kumar.M.B.,Adv.,)
C.C.NO.30238/2023
1
: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 is a private limited company duly incorporated under the Indian Companies Act, being a legal entity and it has right to recover the money due from the subscribers and the guarantors. Further one Smt.Vedavathi.B subscribed to the chit group No.BCT01G-8, for a chit value of Rs.2,00,000/- which is payable at Rs.4,000/- each over a period of 50 months. In the chit auction held on 12.11.2015 the subscriber have offered the highest bid agreeing to forgo a sum of Rs.80,000/- and which was duly confirmed by the complainant. The subscriber has received the prize amount of Rs.1,20,000/- by offering guarantors for the due payment of entire future monthly installments due by her. In the said context, several documents were executed such as On Demand promissory note, consideration receipt and surety proposal form etc., for the satisfaction of the company, thereby making the liability of the payment of future monthly installment, in the said context the accused is also one of the surety to the future chit installment due. After receiving the prized C.C.NO.30238/2023 2 amount the subscriber is irregular in paying the chit installments and thereafter she became a defaulter. Further stated that after repeated request the accused had issued the cheque No.841097 dated: 07.08.2023 for Rs.1,40,000/- drawn on Canara Bank Madiwala branch towards the discharge of the said installments amount due. As per assurance of the accused the complainant presented the said cheque for collection through its banker Bank of Baroda, Girinagar branch, Bangalore. But the said cheque was dishonored on 04.10.2023 as "Funds insufficient", which came to the complainant on 05.10.2023. Thereafter, on 19.10.2023 the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque amount. The said notice was returned on 20.10.2023. Inspite of issuance of the notice, the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act.
Hence, the present complaint came to be filed before this court on 17.11.2023.
3. After the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 17.11.2023 to register the case in Register No.III and it was registered as a criminal case.
C.C.NO.30238/2023 3
4. Thereafter, summons was issued to the accused and he has appeared before the court through 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 Foreman/Director as PW.1 and got marked 15 documents at Ex.P.1 to 15 and closed its side.
6. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was recorded. He has denied the incriminating evidence appearing against him. The learned counsel for the accused has submitted no defence evidence. Hence, the defence evidence taken as nil.
7. I have heard the arguments on both sides and perused the written argument filed by the learned counsel for the complainant and also perused the material placed on record.
8. The learned counsel for the complainant has relied upon the citations reported in ILR 2001 KAR 4127, SC Crl.A.No.2743/2023 (Arising out of SLP (Crl.No.7455/2019), SC.Crl.A.No.849-850/2011, (2015) 8 SCC 378, High Court of Karnataka C.C.NO.30238/2023 4 Crl.A.No.996/13(a), AIR 2024 (1) AKR 3 and (2019) 18 SCC 106.
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 that the cheque-Ex.P.1 was issued by the accused towards discharge of a legally enforceable debt/liability?
2. Whether the complainant further proves that the complainant have complied with all the mandatory provisions of section 138 of N.I.Act?
3.Whether the complainant proves beyond reasonable doubt that the accused inspite of want of sufficient funds he had issued the cheque-Ex.P.1 and thereafter failed to repay the amount within stipulated period inspite of receipt of the notice-Ex.P.3 and thus have committed offence punishable under section 138 of N.I.Act?
4. What order?
10. My answers to the above points are as under:
Point No.1: In the Negative.
Point No.2: In the Negative.
Point No.3: In the Negative.
Point No.4:As per final order, for the following;
:REASONS:
11.POINT NO.1 AND 2: These points are inter- related to each other and finding given on any one point will bearing on the others. Hence, in order to C.C.NO.30238/2023 5 avoid repetition of facts and evidence, I have taken these points together for common discussion. The case of the complainant is that he was acquainted with the accused. Further Smt.Vedavathi.B has subscribed to the chit group No.BCT01G-8, for a chit amount of Rs.2,00,000/- which is payable at Rs.4,000/- each month for 50 months. In the chit auction she has offered the highest bid and same was duly confirmed by the complainant. The subscriber has received the prize amount by offering guarantors and executed several documents in favour of the complainant's thereby making the liability of the payment of future monthly installment, in the said context the accused is also one of the surety to the future chit installment due. After receiving the prized amount the subscriber has irregular in paying the chit installments and thereafter she became a defaulter. After repeated request and personal visit, the accused had issued the cheque in question in favour of the complainant towards the discharge of the said installments amount due. On the assurance of the accused the complainant presented the said cheque for collection through its banker. But the said cheque was dishonored as "Funds Insufficient". Thereafter the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque amount. Inspite of issuance of the notice, the accused neither reply to the notice nor paid the cheque amount. As such, the C.C.NO.30238/2023 6 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. In support of the case, the complainant have examined its Foreman/Director as P.W.1 and 15 documents were marked at Ex.P.1 to 15. In the chief examination P.W.1 has repeated the contents taken by the complainant in the complaint. Ex.P.1 is the cheque issued by the accused in favour of the complainant dated: 07.08.2023 for Rs.1,40,000/-. Ex.P.1(a) is the signature of the accused. Ex.P.2 is the bank memo dated: 04.10.2023 informing the dishonor of the cheque as "Funds Insufficient". Ex.P.3 is the office copy of legal notice dated: 19.10.2023. Ex.P.4 is the postal receipt. Ex.P.5 is the returned postal cover. Ex.P.5(a) is the returned legal notice. Ex.P.6 is the ledger extract. Ex.P.7 is the certificate under section 65(b) of Indian Evidence Act. Ex.P.8 is the certified copy of the resolution passed by the complainant company. Ex.P.9 is the certified copy of the Incorporation certificate of the complainant company. Ex.P.10 is the complaint. Ex.P.11 is the Guarantee Form. Ex.P.12 is the On demand promissory note. Ex.P.13 is the surety proposal form. Ex.P.14 is the Salary slip of the accused. Ex.P.15 is the Gas bill of the accused.
13. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly C.C.NO.30238/2023 7 required to prove the existence of legally enforceable debt/liability, for which cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused is one of the surety to Smt.Vedavathi.B. After taking money from the complainant, the subscriber became a defaulter. After the repeated request made by the complainant, the subscriber and the accused have not paid any amount to the complainant. Further argued that the accused towards discharge of the said payment, he had issued the cheque-Ex.P.1 in favour of the complainant. He further argued that the accused has not denied Ex.P.1 being his cheque drawn on his account. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.1 to disbelieve the said evidence. The defence have failed to rebut the presumption under section 139 N.I.Act. Further argued that the accused has failed to produce any believable evidence that he had issued the blank cheque in favour of the complainant for the purpose of security and also why he has not returned back the same is not clear. He further argued that the accused has failed to produce oral as well as documentary evidence. Further argued that under section 139 of N.I.Act, there is a presumption that the cheque have been issued for discharge of legally enforceable C.C.NO.30238/2023 8 debt/liability. In the present case, the accused has not disputed Ex.P.1 being his cheque drawn on his account. The said presumption is available to the complainant.
14. Further he has argued that the accused had failed to prove the very fact that cheque was given to the complainant for the purpose of security and it was blank when it was given to the complainant. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had given the blank cheque as security measure. As such, very defence of the accused is not believable. He further argued that the accused has not produced any documentary evidence to prove his defence. Upon careful perusal of the entire evidence of records both the oral as well as documentary evidence the complainant have proved their case. He further argued that PW.1 has adduced his evidence and Ex.P.1 to 15 documents were marked and on behalf of the accused he has not adduced any evidence and not produced any documentary evidence. Further argued that in the cross examination of PW.1 the defence taken by the accused is that he had issued C.C.NO.30238/2023 9 cheque as a matter of security. Hence, the accused has admitted the issuance of cheque and thus the presumption under section 139 of N.I.Act., comes in favour of the complainant. Now what has to be seen is whether any credible defence is taken by the accused and whether cogent evidence has been led by the accused. The primary defence taken by the accused during cross examination of PW.1 is that the cheque was issued as security. The second line of defence which has been taken by the accused is that there was no legally enforceable debt. Now the point whether the cheque issued a security or not is nowhere concerned to acquit the accused the Hon'ble Supreme Court has clearly held that even the cheque if issued for security it attracts the ambit of section 138 of N.I.Act.
15. Further argued that the accused was surety to Smt.Vedavathi.B is not disputed by the accused thus the complainant have proved that the accused was surety to Smt.Vedavathi.B. Further argued that Smt.Vedavathi.B had participated in the auction and she had successful bidder and received the prize amount, this contention of the complainant is admitted by the accused. Thus the complainant have proved that the accused was surety to Smt.Vedavathi.B and he is also liable to pay the amount due by the subscriber. These admissions will corroborate the contention of the complainant that the cheque in question was issued by C.C.NO.30238/2023 10 the accused for repayment of the due amount. Further argued that the accused has not produced any documents to show that the cheque was given as a matter of security. Further he has not taken any legal actions against the complainant. Further the accused has to disprove the case of the complainant and thus the accused has to establish that on the date of presentation of the cheque there was no liability but he has not produced any evidence to prove the same. Further on perusal of the entire documents placed by the complainant clearly goes to show that the accused is liable to pay the cheque amount. The learned counsel for the complainant has filed detail written argument. Hence, he prays to convict the accused and compensate the complainant under section 357 of Cr.P.C.
16. The learned counsel for the accused argued that the accused had issued the blank cheque to the complainant for the purpose of security. Further the complainant have misused the said blank cheque and filed a false complaint against the accused. Further argued that the accused has never admitted regarding repayment of the said amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay the amount of Rs.1,40,000/- to the complainant. He further argued C.C.NO.30238/2023 11 that PW.1 in his chief examination reiterated the above narrated averments of the legal notice and complaint. Further argued that the complainant had collected the blank cheque from the accused for the security purpose and documents, at the time of chit bid. Further argued that the subscriber has paid the installments, hence he is not liable to pay the amount covered under the cheque. Further argued that the complainant miserably failed to prove the complaint averments. The complainant unable to prove that subject cheque was issued in discharge of duly enforceable debt/liability. The complainant has not come with a clean hands before this court. Indubitably, Ex.P.6, the document relied on by the complainant would indicate that as on 02.12.2020 the subscriber was due of Rs.41,024/- and Ex.P.6 was taken print out at 17.10.2023 as on that date also the subscriber was a due of Rs.41,024/- and the subject dishonored cheque presented on 07.08.2023. As on the date of the presentation of the cheque subscriber and the accused is not in due of Rs.1,40,000/- to the complainant. The complainant in order to harass to the accused fill up the cheque and presented to the bank. Hence, the accused is not liable to pay the cheque amount.
17. He further argued that the complainant claiming Rs.1,40,000/-. It is further argued that the evidence placed before this court clearly shows that the C.C.NO.30238/2023 12 complainant in order to make illegal monetary gain has presented the blank cheque given as security, by filing up the cheque, and for the purpose of this case he has created documents and no transaction has been carried out between the complainant and the accused as alleged in the complaint. Hence, the accused proves that the cheque was issued as security and not to discharge any legally enforceable debt/liability. For offence under section 138 of N.I.Act to attract, the accused must have issued the cheque to discharge any legally enforceable debt/liability. But in the present case, since there is no due amount from the accused thus there lies no legally enforceable debt. Also the accused has successfully managed to rebut the evidence of the complainant with detailed cross examination, thereby rebutting the presumption under section 139. Further argued that on the date of presentation of the cheque, the accused was not in due of Rs.1,40,000/-. The complainant has not produced any material to show that when the subscriber defaulted monthly installment before presentation of the cheque. Thus the complainant failed to prove that the accused had issued the subject cheque for a sum of Rs.1,40,000/-. The complainant has misused the cheque obtained from the accused issued for security at the time of bid of the chit. Therefore, issuing the subject cheque by the accused is far away from truth.
C.C.NO.30238/2023 13
18. Further argued that the accused created doubt against the story putforth by the complainant in the complaint. The pharse "debt or other liability"
means a legally enforceable debt/other liability. There was no convincing evidence from the complainant's side as to existence of any existing debt/liability to be discharged by the accused. The accused has discharged the onus that the subject cheque was not received by the complainant for any existing debt/liability. The complainant having received the subject cheque as security at the time of chit bid and it has misused by filing huge amount. The actual amount payable is less than the dishonored of the cheque amount and the subscriber has paid most of the installments. The alleged balance amount remains unexplained. The complainant has miserably failed to prove the liability to the tune of the amount covered by the cheque. The offence is deemed to be committed if amount covered by cheque is either in discharge of the liability incurred by the accused either full or in part. It cannot be any way in excess of the liability incurred. Further argued that the complainant have issued the legal notice to the accused as address shown in the cause title of the complaint. But the address shown in the the cause title of the accused is not the correct address of the accused. The complainant not sent the legal notice to the accused and the said notice is not served to the accused. Hence, the accused not given C.C.NO.30238/2023 14 the reply. Hence, an offence under section 138 of N.I.Act cannot be applicable. Hence, he prays to acquit the accused.
19. In the proceedings for dishonor of cheque under section 139 of N.I.Act a presumption can be raised that when a cheque is issued, it was drawn for discharge of legally enforceable debt/liability. The presumption under section 139 of the act does include the existence of legally enforceable debt/liability. This is in the nature of a rebuttable presumption and it is opened to the accused to raise a defence wherein the existence of a legally enforceable debt/liability can be contested. However, there is initial presumption which favours the complainant. The test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused cannot be excepted to discharge an unduly high standard of proof. In the absence of the compelling justifications, revers onus clauses usually impose an evidentiary burden and not a persuasive burden. It is settled position that when an accused has to rebut the presumption under section 139 of the Act, the standard of proof for doing so is that of preponderance of probabilities. Therefore, if the accused is able raise a probable defence which creates doubts about the existence of a legally enforceable debt/liability, the prosecution can fail. The accused can rely on the C.C.NO.30238/2023 15 materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence on his own.
20. In the case on hand the very liability of the accused to pay an amount to the complainant is seriously disputed. The accused has contended that he had issued the blank cheque in favour of the complainant for the purpose of security. Further he has contended that the complainant misused the security cheque and filed this false case. He denies any amount being due by him. He also denies issuance of the cheque for repayment of the amount on 07.08.2023.
21. To prove the factum of the case the complainant produced oral evidence of PW.1 and produced Ex.P.1 to 15 only. The documents produced by the complainant does not disclose that the subscriber and the accused is due of Rs.1,40,000/- as on the date of issuance of the cheque. In the said circumstances the complainant required to prove the very due amount by the accused and how an amount of Rs.1,40,000/- is still due. The complainant's have examined its Director/Foreman as PW.1. In his evidence has repeated the contentions taken by the complainant in the complaint. In all 15 documents are produced at Ex.P.1 to 15. The accused has denied issuance of the cheque-Ex.P.1 in favour of the C.C.NO.30238/2023 16 complainant for discharge any legally enforceable debt/due. Therefore, it is necessary to discuss the evidence regarding the due amount by the accused to the complainant and the said amount still due from the accused. Since the complainant claims that the accused in order to repayment of debt/due had issued the cheque-Ex.P.1 on 07.08.2023, the complainant is firstly required to produce evidence in this regard. But as above discussed no material is placed on record to established the said facts by producing the books of account, credit and statement of payment and other related documents. So also though the company maintained record regarding the amount due by the subscriber no such material is produced in this case. How the amount of Rs.1,40,000/- is due from the subscriber and what is interest amount as on the date of issuance of the cheque has not been properly explained. Because the complainant have not shown what was the amount was due from the subscriber and how this figure came to be arrived as still due from the subscriber. In this case the complainant have produce the chit ledger as per Ex.P.6. On perusal of the same it indicate that the subscriber only due of Rs.41,024/-. Further as on the date of the presentation of the cheque the subscriber was not in due as mentioned in the cheque. Further the complainant have not produced any material to show that when the subscriber defaulted monthly installments and what is the interest C.C.NO.30238/2023 17 is calculated. When the subscriber was not in due as mentioned in the cheque as on the date of presentation of the cheque, then question of issuance of the cheque- Ex.P.1 on 07.08.2023 by the accused in favour of the complainant does not arise at all.
22. When the complainant is a company maintaining account of all its transaction, it was required to produce some documents with regard to due/debt of the subscriber. Further the complainant not produced those documents to prove that facts. The failure to produce these materials creates doubt regarding existence of legally enforceable debt. It is pertinent to note that the complainant have not produced documents relating to the actual amount in due at the time of issuance of disputed cheque by the subscriber. Here, undisputedly the complainant company is a private limited chit and finance company. It has to carry on the business in accordance with law. In these circumstances it is quite reasonable to expect the books of accounts maintained by the complainant which throw light on the account of the subscriber and due of any amount by the subscriber during the year 2023 as on the date of issuance of subject cheque. The said documents are having direct bearing on the case, as the said documents who the amount in due by the said accused and he establishes the case of the complainant that the accused issued the disputed C.C.NO.30238/2023 18 cheque towards legally enforceable debt. The said documents is withheld by the complainant without offering any plausible explanation. Since the complainant company withheld the relevant documents, the production of which directly establishes its case results in drawing adverse inference against the complainant and the said omission to produce relevant documents fortifies the defence version of issuing cheque at the time of chit bid as a security. Further the complainant have not explained how this amount is came to be mentioned in the cheque. It shows that the cheque in question was not issued for repayment of the due amount.
23. Moreover the contention by the complainant and their case it is reveals that the accused is one of the surety to Smt.Vedavathi.B, the said subscriber subscribed chit group amount of Rs.2,00,000/-. The subscriber has successfully bidding the chit and had received the prized amount from the complainant. Further the accused is well know to the complainant. Further the subscriber and the accused had became a defaulter in repayment of the said amount. After repeated request the accused for repayment of the said amount had issued the cheque in question in favour of the complainant and assured that the said cheque would be honored on its presentation. Further from the evidence produced by the complainant the very fact C.C.NO.30238/2023 19 that the accused is a surety and in order to repayment of due amount the accused had issued the cheque in question. But the complainant have not proved by any reliable evidence. The exact amount still due by the subscriber is not clearly forthcoming. Further the complainant have failed to produce any documents to due amount from the subscriber. So also the cheque being issued for the amount due by the subscriber has not been established. Though there is an initial presumption under section 139 of N.I.Act, if the accused from the cross examination raise some reasonable doubt, the said presumption can be held to have been rebutted.
24. In proceedings under section 138 of N.I.Act the standard of proof required by the accused to rebut the presumption is not so high. It is sufficient, if the accused by way of preponderance of probabilities creates doubt regarding very existence legally enforceable debt/liability. The learned counsel for the accused has submitted that when the cheque is issued for uncertain liabilities the offence under section 138 of N.I.Act, is not attracted. The Hon'ble Apex Court as well as High Courts have observed that the accused if reasonably produces evidence to probables his defence, it is sufficient to discharge presumption. Then the burden is on the complainant to produce probables evidence. But in the case on hand as already above C.C.NO.30238/2023 20 discussed except producing some documents and his oral evidence no material is produced by the complainant to prove the issuance of the cheque in order to discharge of liability. While on the other hand the accused has show that the cheque was not given to the complainant for repayment of the amount.
25. In the judgment reported in 2011 ALL MR (Crl) 1922, in the case of "Bhalla Automobiles V/s Rajesh S/o Rambhau Maurya", the Hon'ble court has discussed that the complainant has to take all grounds available to him at the filing of the complaint and he cannot be permitted to change his stand at different times. In such circumstances the accused is entitled for benefit of doubt.
26. In the case of Krishna Janardhana Bhat V/s Dattatreya Hegde, reported in AIR 2008 SC 1325, the Hon'ble Apex Court held that the accused not required to step into witnesses box, he may discharge his burden on the basis of materials already bought on record. He can rely on the materials already on record. It was further observed that the standard of proof to prove the defence is preponderance of probabilities. Thus from the above discussion and placing reliance on the judgments noted above this court is of the opinion that the accused has succeeded in rebutting the initial presumption available to the complainant under section 139 of N.I.Act. When there is no other C.C.NO.30238/2023 21 material produced by the complainant to support its contention for repayment of amount the accused had issued the cheque-Ex.P.1, he has failed to prove the material ingredients of legally enforceable debt. Question whether statutory presumption rebutted or not, must be determined in view of other evidence on record.
27. If the accused succeeds in rebutting the presumption, the onus of proving the existence of legally enforceable debt for which the cheque was issued will be on the complainant. But in the case on hand the complainant's have failed to produce any evidence in order to prove that the cheque-Ex.P.1 was issued for discharge of legally enforceable debt. Whereas the accused has succeeded, in rebutting the initial presumption available in favour of the complainant. In the said circumstances the defence has succeeded in discharging his burden of rebutting the said presumption. Thus from the above discussion and placing reliance on the judgment noted above this court is of the opinion that the accused has succeeded in rebutting the presumption available to the complainant under section 139 of N.I.Act. When there is no other material produced by the complainant to support of their contention, he has failed to prove the material ingredients of existence of legally enforceable debt. The discussion supra manifest that the version of C.C.NO.30238/2023 22 defence is a probable one and worth acceptable. Thus by raising a probable defence the accused successfully rebutted the legal presumption raised in favour of the complainant and thereby shifted the anus of proof to the complainant to demonstrate the existence of legally recoverable debt as claimed, but in the instant case the complainant utterly failed to discharge the shifted onus.
28. According to the complainant the cheque- Ex.P.1 when it was presented the bank for encashment same was dishonored for the reasons "Funds Insufficient" in the account of the accused. To prove this fact the complainant's have produced the cheque- Ex.P.1, the bank memo-Ex.P.2 and also notice-Ex.P.3. On perusal of the bank memo-Ex.P.2 it is disclosed that the cheque-Ex.P.1 was dishonored for the reasons "Funds Insufficient" in the account of the drawer namely the accused. These facts are also stated in the legal notice-Ex.P.3 and the oral evidence of PW.1. The accused has not seriously disputed the dishonor of the cheque for the reasons "Funds Insufficient". What has been disputed is the fact that the cheque-Ex.P.1 was not issued by the accused for discharge of any legally enforceable debt/liability. Further taken the defence that he had issued the cheque for the purpose of security. When the accused demanded the complainant to returned the cheque, but the complainant's have not returned the same. On perusal of the documents C.C.NO.30238/2023 23 clearly shows that the accused had issued the cheque in question in favour of the complainant. Therefore, from the evidence of PW.1 and the documents placed on record, the fact that the cheque-Ex.P.1 came to be dishonored for the reasons "Funds Insufficient" has been proved by the complainant.
29. In order to attract the offence under section 138 of N.I.Act a cheque has to be issued by the accused which was drawn on an account maintained by his for discharge, in whole or in part of any debt or other liability. Further it is required that the said cheque when presented by the complainant was returned unpaid by the bank for any of the reasons enumerated in section 138 of N.I.Act. Thereafter the accused had failed to repay the cheque amount inspite of having issuance of a legal notice demanding such payment within a period of 15 days on receipt of the legal notice. It is the case of the complainant that the cheque-Ex.P.1 was issued to them on 07.08.2023 for clearance of the due amount. The said cheque was presented on 04.10.2023 to the Bank of Baroda, Girinagara Branch, Bangalore for encashment. Thereafter, the complainant have received the bank memo as per Ex.P.2 on 05.10.2023 informing them that the cheque was dishonored for the reasons that there was no sufficient funds in the account of the accused/drawer. Thereafter within statutory period of receipt the said information C.C.NO.30238/2023 24 the complainant has got issued the legal notice as per Ex.P.3 calling upon the accused to make payment of the cheque. The said notice is shown to have been issued to the accused as per Ex.P.5. The said notice was returned. But the accused has failed to reply to the notice.
30. The accused has seriously denied the service of notice and he also dispute the address shown on the notice. Section 138 of N.I.Act, requires that a legal notice be sent to the drawer of the cheque at the address mentioned in the cheque or at the last known address of the drawer. In this case, the complainant issued a legal notice to the accused, but the notice was sent to a wrong address. The notice was sent to a wrong address, which means the accused may not have received the notice. Section 138 of N.I.Act requires that the notice be sent to the correct address of the drawer. As per the documents produced by the complainant at Ex.P.13 and 15 is the correct address and last known address of the accused. But the complainant sent a legal notice as per Ex.P.5. But address mentioned in Ex.P.5 is not the correct address or last known address of the accused. In Rajesh Kumar V/s Dharmavir, reported in (2010) 2 SCC 431: The Hon'ble Supreme Court held that sending a notice to a wrong address is not a valid service of notice under section 138. Further in K.Bhaskaran V/s Sankaran C.C.NO.30238/2023 25 Vaidhyan, reported in (1999) 7 SCC 510: The Hon'ble Supreme Court held that the notice must be sent to the correct address of the drawer to satisfy the requirements of section 138. The complainant has failed to establish that the legal notice was sent to the accused at the correct address. Infact, the notice was sent to a wrong address, which means the accused may not have received the notice. In view of the provisions of section 138 of the N.I.Act, and the case law precedents, this court holds that sending a notice to wrong address is not a valid service of notice. Therefore, the complaint under section 138 is not maintainable. In the present case the first essential requirement of the existence of legally enforceable debt/liability to the complainant by the accused has not been proved. Further the complainant has also failed to prove the issuance of legal notice to the accused at the correct address. Hence, the complainant have failed to comply the required mandatory provision of section 138 of N.I.Act. The basic requirement is not established. Accordingly, I answer Point No.1 and 2 in the Negative.
31. POINT NO.3: In view of the findings of this court, the essential requirements to attract the offence of section 138 of N.I.Act has not been proved by the complainant and also as there is no sufficient evidence to hold the accused liable for any offence in the present case. Hence, I answer point No.3 in the Negative.
C.C.NO.30238/2023 26
32. POINT NO.4: The complainant has been held to have failed to prove the very transaction with the accused. Hence, the accused is found to be not guilty of the offence charged. In the said circumstances, the accused cannot be directed to pay any compensation. In view of the above discussion, I proceed to pass the following:
:ORDER:
Acting under section 255(1) of Cr.P.C., the accused is acquitted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 15th day of February 2025) (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Rudresh.M.S. List of documents marked on behalf of the complainant:
Ex.P.1 : Cheque.
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement.
Ex.P.3 : Office copy of legal notice.
Ex.P.4 : Postal receipt.
Ex.P.5 : Returned postal cover.
C.C.NO.30238/2023
27
Ex.P.5(a) : Returned notice.
Ex.P.6 : Ledger extract.
Ex.P.7 : Certificate U/s.65(b) of I.E.Act.
Ex.P.8 : Certified copy of the Resolution.
Ex.P.9 : Certified copy of the Incorporation certificate.
Ex.P.10 : Complaint.
Ex.P.11 : Guarantee Form
Ex.P.12 : On demand promissory note.
Ex.P.13 : Surety proposal form.
Ex.P.14 : Salary slip.
Ex.P.15 : Gas bill.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
-Nil-
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.30238/2023 28 15.02.2025 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(1) of Cr.P.C., the accused is acquitted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.