Bangalore District Court
And Convinced That He Invested The ... vs Borrowed A Sum Of Rs.4 on 30 January, 2023
1 CC.13144/2014( J)
KABC030344732014
Presented on : 21-05-2014
Registered on : 21-05-2014
Decided on : 30-01-2023
Duration : 8 years, 8 months, 9 days
IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY.
Dated this the 30 th Day of January-2023
Present: Lokesh Dhanapal Havale. B.A.L.L.B.,
XV Addl.C.M.M., Bengaluru.
Judgment U/s.355 of the Cr.P.C. 1973.
1.Sl.No.of the case CC.No.13144/2014
2.Name of the Complainant: Sri. B.N Narayana Swamy
S/o Late Hanumantharayappa
No.751, 2nd Floor, 5th Block,
Rajajinagar,
Bengaluru- 560 010.
3.Name of the accused: Sri. Vijay Dhandapani
Advocate
No.82, First Floor,
Arcot Road,
Kodambakkan,
Chennai-600 024.
4.The offence complained of : U/s.138 of Negotiable Instruments
Act.
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5.Plea of the accused: Pleaded not guilty.
6.Final Order: Acting U/s.255(2) Cr.P.C., accused
is Convicted.
7.Date of final Order 30.01.2023.
* * *
This complaint is filed U/Sec.200 of Cr.P.C. against the
accused for the offence punishable U/Sec.138 of the Negotiable
Instruments Act, 1881.
2. The facts of the complaint in brief are as under:
The complainant and accused are well known to each other.
The complainant is practicing Advocate at Bangalore and accused
is a practicing Advocate at Chennai. The accused approached the
complainant and convinced that he invested the amount in N.A.P
accounts on D.R.T cases and the accused has told that he would
purchase the valuable properties on auction sale held by D.R.T
and same would be sold in open market for higher price. The
accused borrowed a sum of Rs.4,17,80,000/- on various dates
commencing from 01.04.2011 onwards. The complainant has
demanded the accused to repay the loan amount of
Rs.4,17,80,000/-. The accused has issued five cheques bearing Nos.
(1)000086 dated 15.11.2012 of Rs.2,75,00,000/-, (2)No.000089
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dated 15.11.2012 for Rs.30,00,000/-, (3)No.0000142 dated
5.11.2012 for Rs.10,30,000/- (4)No.000141 dated 5.11.2012 for
Rs.47,50,000/- and (5)cheque bearing No.000156 dated 15.11.2012
for a sum of Rs.55,00,000/- total for Rs.4,17,80,000/- all the
cheques are drawn on Kotak Mahindra Bank Limited,
Kodambakkam branch, Chennai in favour of the complainant in
order to discharge legal debt/liability. On presentation of the
cheques for encashment through his banker Kotak Mahindra Bank
Limited, Lavelle Road branch, Bangalore, the cheques were
returned with bank memo's 'Funds Insufficient' on 31.01.2013. The
complainant issued legal notice on 21.02.2013 to the accused
through RPAD demanding repayment of the amount of cheques to
an extent of Rs.4,17,80,000/-. The notice issued through RPAD
was returned on 27.2.2013 with a shara 'Unclaimed'. The accused
did not pay the amount even after the expiry of 15 days. The
accused thereby committed an offence punishable U/s.138 of the
N.I.Act.
3. After the institution of the complaint, the cognizance
was taken and it has been registered as PCR No.8443/2013. The
sworn statement of the complainant has been recorded and on the
basis of sworn statement and other materials on hand, the criminal
case has been registered against the accused and summons was
issued to accused. Even after the service of summons, the accused
failed to appeared before the Court and NBW was issued.
Thereafter the complainant came to know that he was in judicial
custody in some other case and he was produced from the custody
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under the body warrant and he obtained the bail. The prosecution
papers were supplied to the accused and the substance of the
accusation was read over and explained to the accused in the
language known to him. He pleaded not guilty and claimed to be
tried.
4. During trial the complainant examined himself as PW-1
and got marked Ex.P1 to P29. The statement of the accused U/s.
313 of Cr.P.C. was not recorded due to the absence of accused
and the defence evidence was take as nil as per the decision of
the Hon'ble High Court of Karnataka dated 28.06.2012 in the Crl
Revision Petition No.437/2010 in the case of R.V Kulakarni v/s
Dakshina Murthy.
5. Heard the arguments. On perusal of the entire
materials on record, the points that arise for my consideration are
as under;
1. Whether the complainant proves that the
accused issued 5 cheques bearing Nos
(1)000086 dated 15.11.2012 of
Rs.2,75,00,000/-, (2)No.000089 dated
15.11.2012 for Rs.30,00,000/-, (3)No.0000142
dated 5.11.2012 for Rs.10,30,000/-
(4)No.000141 dated 5.11.2012 for
Rs.47,50,000/- and (5)cheque bearing
5 CC.13144/2014( J)
No.000156 dated 15.11.2012 for a sum of
Rs.55,00,000/- total for Rs.4,17,80,000/- all
the cheques drawn on Kotak Mahindra Bank
Limited, Kodambakkam branch, Chennai
towards the discharge of legally enforceable
debt/liability and on its presentation for
encashment, they were dishonored with an
endorsement "Funds Insufficient" and even
after the legal notice was sent to the correct
address of the accused it was returned with
shara 'unclaimed', which is deemed service of
notice, the accused has not paid the amount
within 15 days and thereby accused
committed an offence punishable U/Sec.138 of
N.I. Act, 1881?
2. Whether the accused rebuts the
presumption U/s.139 of the N.I.Act?
3. What order?
6. My answers on the above points for consideration are
as under:
Point No.1 : Affirmative
Point No.2 : Negative
Point No.3 : As per final order for the following;
6 CC.13144/2014( J)
REASONS
7. Point No.1 and 2 :- The points are taken together for
the common discussion to avoid repetition of facts and evidence. It
is necessary to discus the provisions U/s. 118(a) and 139 of the
Act., 1881 at this stage.
"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;"
"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
7 CC.13144/2014( J)
discharge, in whole or in part, of any
debt or other liability."
8. On plain perusal of the provision U/s. 118(a) and 139
of the N.I.Act., it can be seen that initially the presumptions
constituted under these two provisions are in favour of the
complainant. However the presumptions are rebuttable and 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.
9. It is also well established that an accused need not
examine himself for discharging the burden of proof placed upon
him under a statute. He may discharge his burden on the basis of
the materials already brought on record. An accused has
constitutional rights to remain silent. The 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.
10. Under the light of position of the law, I have perused
the complaint and the evidence placed on record. The complainant
in support of his claim made in the complaint has adduced
evidence by examining himself as PW-1 and he got marked Ex.P1
to 29. PW-1 filed his evidence affidavit on oath and reiterated the
8 CC.13144/2014( J)
complaint averments. Ex.P1 to 5 are the cheques bearing Nos.
(1)000086 dated 15.11.2012 of Rs.2,75,00,000/-, (2)No.000089
dated 15.11.2012 for Rs.30,00,000/-, (3)No.0000142 dated
5.11.2012 for Rs.10,30,000/- (4)No.000141 dated 5.11.2012 for
Rs.47,50,000/- and (5)cheque bearing No.000156 dated 15.11.2012
for a sum of Rs.55,00,000/- total for Rs.4,17,80,000/- all the
cheques are drawn on Kotak Mahindra Bank Limited,
Kodambakkam branch, Chennai. Ex.P1(a) to Ex.P5(a) are the
signatures of the accused on the cheques. Ex.P6 to 10 are the 5
pay in slips they show that the cheques are deposited for
encashment to the bank on 28.01.2013. Ex.P11 to 15 are the Bank
return memos issued by Kotak Mahindra Bank with shara "Funds
Insufficient" dated 31.01.2013. Ex.P16 to 20 are the return cheque
advices issued by Kotak Mahindra Bank dated 31.1.2013 stating
that the cheques are returned for the reason 'Funds Insufficient'.
Ex.P21 and 22 are the 2 receipts of payment. On perusal of the
said receipts it is clear that the accused acknowledged the receipt
of an amount of Rs.4,17,80,000/- from the complainant. Ex.P23 is
the office copy of Legal Notice dated 21.02.2013 issued by the
complainant to the accused demanding repayment of the amount
of cheques to the address of the accused. Ex.P24 is the postal
receipt for having sent the legal notice to the accused.
Ex.P25/Ex.P29 is the application given by the counsel for the
complainant to the postmaster Rajajinagar dated 6.12.2021 seeking
confirmation of delivery of registered post bearing No.
RK086199688IN dated 23.02.2013. Ex.P26 is the reply letter given
by Senior Post Master, Rajajinagar HO, Bengaluru stating that the
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article is booked on 23.02.2013 and since it is time barred
complaint, no delivery particulars can be given for the same.
Ex.P27 is the postal acknowledgment for having served the notice
on the accused. Ex.P27 is the postal envelope in which the Senior
Post Master issued the reply. The complainant filed application to
lead secondary evidence has the original returned envelope was
lost. The said application was allowed and the complainant was
permitted to lead secondary evidence. Ex.P28 is the photo copy of
the returned postal envelope. On perusal of the same it is found
that the notice sent through RPAD to the accused was returned
with shara 'unclaimed' dated 27.02.2013.
11. On perusal of the documents, it is clear that the
cheques at Ex.P1 to 5 bearing nos(1)000086 dated 15.11.2012 of
Rs.2,75,00,000/-, (2)No.000089 dated 15.11.2012 for
Rs.30,00,000/-, (3)No.0000142 dated 5.11.2012 for Rs.10,30,000/-
(4)No.000141 dated 5.11.2012 for Rs.47,50,000/- and (5)cheque
bearing No.000156 dated 15.11.2012 for a sum of Rs.55,00,000/-
total for Rs.4,17,80,000/- all the cheques are drawn on Kotak
Mahindra Bank Limited, Kodambakkam branch, Chennai issued in
favour of the complainant were presented for within their validity.
The Bank endorsements dated 31.01.2013 at Ex.P11 to 15 and the
bank return advices dated 31.01.2013 at Ex.P16 to 20 are returned
with shara "Funds Insufficient". Ex.P23 is the legal notice dated
21.02.2013, which was returned unserved with shara 'unclaimed'
dated 27.02.2013. The accused has not contested the matter. In
the case of C.C. Alavi Haji v. Palapetty Muhammed reported
10 CC.13144/2014( J)
in (2007) 6 SCC 555, the Hon'ble Supreme Court held that when
the notice is sent by registered post by correctly addressing the
drawer of the cheque, the mandatory requirement of issue of
notice in terms of clause (b) of proviso to Section 138 of the Act
stands complied with. It is needless to emphasise that the
complaint must contain basic facts regarding the mode and
manner of the issuance of notice to the drawer of the cheque. In
the case of N. Parameswaran Unni v. G. Kannan reported in
(2017) 5 SCC 737 the Hon'ble Supreme Court held that it is clear
from Section 27 of the General Clauses Act, 1897 and Section 114
of the Evidence Act, 1872 that once notice is sent by registered
post by correctly addressing to the drawer of the cheque, the
service of notice is deemed to have been effected. However, the
drawer is at liberty to rebut this presumption. The address of the
accused in notice and complaint is not disputed and no evidence
was lead to show that the said address is not the correct address
of the accused. Therefore the notice is deemed to have been
served on the accused on 27.02.2013 as per Ex.P28. The complaint
was filed on 25.03.2013, which is within limitation. The cheques
and the signatures are admitted. Therefore, the documents on
record clearly show that the complainant has complied the
ingredients of Section 138(a) to (c) of the N.I.Act. Therefore the
presumptions U/s.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 accused can rebut
the presumption by raising probable defence and proving it relying
11 CC.13144/2014( J)
on the evidence of the complainant or by leading his direct
evidence.
12. The plea of the accused was recorded on 04.11.2019.
The the case was posted for cross examination of PW-1 on
24.02.2020. The stage remained for cross examination of PW.1 till
27.10.2021. The accused was represented by the counsel and
exemption applications were filed. Number of adjournments were
given to the accused to cross examine PW.1. But accused failed to
properly appear before the Court and cross examine PW.1. Hence
cross examination of PW.1 is taken as nil on 27.10.2021. On the
said day also the counsel represented the accused and prayed time
for cross examination. On going through the order sheet, the EP
was rejected and NBW was issued against the accused and the
case was posted for recording of statement of 313 of Cr.P.C. The
accused appeared through VC and recalled the warrant. The
counsel for the accused filed application u/sec.203 of Cr.P.C and
the same was rejected after contest on 8.4.2022 and the case was
again posted for recording of statement u/sec.313 of Cr.P.C. The
accused failed to appear and NBW was issued. The accused did
not appear before the Court nor secured under NBW to proceed
with the case. Hence the statement of the accused U/s.313 of
Cr.P.C has not been recorded. As per the Judgment of Hon'ble
High Court of Karnataka in Crl. Revision Petition
No.437/2010 in the case of R.V.Kulkarni Vs. Dakshina Murthy
dated 28.06.2012, wherein it was held that it was for the
accused to appear before the Court and to have defended himself
12 CC.13144/2014( J)
effectively and to make himself available for the Court to record
the statement U/s.313 of Cr.PC. In the said case the complainant
preferred the revision before the Hon'ble High Court challenging
the order of the First Appellate Court in remanding the matter for
fresh trial for non recording of the statement of the accused
U/s.313 of Cr.P.C. The Hon'ble High Court of Karnataka observed
that there is no justification of the Appellate Court for having held
that there is failure of justice on account of statement of the
accused not having been recorded U/s.313 of Cr.P.C. The Hon'ble
High Court of Karnataka also discussed settled law in respect of
statement of accused U/s.313 of Cr.P.C by referring to the decision
of three judge bench of Hon'ble Supreme Court in the case of
Basavaraj R.Patil Vs.State of Karnataka reported in (2000) 8
SCC 740. It is clear from the above decision that it is the duty of
the accused to appear before the Court and make available himself
for recording of statement U/s.313 of Cr.P.C. and to lead defence
evidence. The accused failed to utilize the opportunity by
remaining absent. Therefore the statement of the accused U/s.313
of Cr.PC was not recorded and the defence evidence is taken as
nil. The order sheet shows the conduct of the accused in delaying
the proceedings. Further the Hon'ble Supreme Court of India in
the case of Sumeti v/s M/s Paramount Tech Fab Industries in
Crl.Appeal No.292/2021 arising out of SLP(Crl) No.8498 of
2019 decided on 9.3.2021 held that a statement of the accused
recorded u/sec.313 of Cr.P.C is not a substantive evidence of
defence but only on opportunity to the accused to explain the
incriminating circumstances appearing in the prosecution case of
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the accused. It was also observed that if there is no evidence in
support of his defence either to disprove or to rebut the
presumption under sec.139 of the Act, the statement recorded
under sec.313 of Cr.P.C pleading false implication and innocence
does not come to the aid of the accused as it is not a substantive
evidence. Further it is settled principle that the accused must show
prejudice caused to him due to the non recording of statement
u/sec.313 of Cr.P.C. If no prejudice is pleaded and proved to the
satisfaction of Court for non recording of statement u/sec.313 of
Cr.P.C there would be no violation of salutary principle of natural
justice as enshrined in the maxim "audi alteram partem". No
doubt it is well settled that a circumstance about which the
accused was not asked to explain can not be used against him. But
certainly it can be distinguished under the peculiar facts and
circumstances of a particular case. In the case on hand, it is clear
that the accused attempted to misuse and abuse the process of the
Court and abandoned the proceedings. It is pertinent to note that
the accused is also a practicing advocate and he has been properly
represented by counsel during the proceedings. He knew very well
about the proceedings but he intentionally failed to appear before
the Court to proceed with the case. The matter is pertaining to the
year 2014 and the order sheet shows that the delaying tactics have
been practiced by the accused. If the same are entertained, it
would defeat the proceedings instituted by the complainant, who is
also a practicing advocate. Therefore in the humble opinion of this
Court, the non recording of the statement u/sec.313 of Cr.P.C
would not vitiate the proceedings unless prejudice is shown by the
14 CC.13144/2014( J)
accused. The scope and object of Sec.313 of Cr.P.C is explained in
catena of decisions and in view of that no injustice is caused to
the accused for not having recorded his statement u/sec.313 of
Cr.PC. The Court is unable to record the statement of the accused
u/sec.313 of Cr.P.C due to the intentional absence of the accused
and therefore he can not claim the benefit of non recording of
statement u/sec.313 of Cr.P.C.
13. Further as per the judgment of the Hon'ble Supreme
Court of India in the case of Md. Sukur Ali v/s State of
Assam in Crl. Appeal No.546/2011 dated 24.2.2011, wherein it
was held that if the criminal case whether a trial or appeal or
revision is decided against accused in the absence of counsel there
will be violation of Article 21 of the Constitution . However this
Court is of the opinion that as the accused has the right to fair
trial, he is also under the duty or obligation to promptly appear
before the Court and contest the case. As per the law of
jurisprudence, there is always duty or obligation corresponding to
the right. The accused remaining absent for the years together at
his peril and therefore he can not be expected to claim the right.
Further the judgment in the case of Md. Sukur Ali (supra) can be
distinguished on the basis of the facts of the present case. The
facts of the said case are that the Crl. Appeal No.137 of 2003 was
decided by the Hon'ble Gauhati High Court on 1.6.2010 in the
absence of the counsel for the Appellant-accused and the
conviction was upheld. The question before the Hon'ble Supreme
Court was that whether in a criminal case, if the counsel for the
15 CC.13144/2014( J)
accused does not appear, for whatever reason, should the case be
decided in the absence of the counsel against the accused, or the
Court should appoint an amicus curie to defend the accused.
Usually in appeal or revision, there is no question of recoding of
evidence of the parties. The counsels appearing for the parties
canvass the arguments on behalf of their parties assisting the Court
about the correct position of law and the error committed by the
Trial Court or Appellate Court as the case may be. However that
is not the case when it comes to a trial. The parties have to
personally appear before the Court and lead evidence and the
complainant has only benefit of recording the evidence through
GPA/SPA holder. In a case where the accused himself is not
appearing and because of instructions being not given or for any
other reason, the counsel is also not appearing, if the Amicus
Curie is appointed by the Court to defend the accused, he could
not proceed with the case without there being any instructions of
the accused and knowledge of the facts/the defence of the accused.
If the Amicus Curie is unaware of the defence of the accused
under the facts of a particular case, he is unable to proceed with
the case in effective manner. If the accused himself is not
appearing, there is no question of leading the defence evidence.
Further at a later stage, the accused may appear and if at all
something went against him in his absence, he might challenge it.
If the counsel for the accused appear at a later stage, he might
also challenge it. Therefore with due respect to the judgment of
the Hon'ble Supreme Court in the case of Md. Sukur Ali (supra)
this Court is of the opinion that under the circumstances as
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elaborated herein above the appointment of Amicus Curie in trial
is not feasible. Further the proceedings under the N.I Act are quasi
civil in nature and the object of the N.I Act is to bring back the
credibility of Negotiable Instrument which were loosing their
credibility because of lack of responsibility on the part of the
drawer and to inculcate faith in the efficacy of banking operations
in transacting business on Negotiable Instrument in general to
bring the erring drawer to book, so that such irresponsibility is
not perpetuated, to protect the honest drawer and to safeguard the
payee who is almost a looser. Such being the case, if the accused
is allowed to abuse the process of the Court, the object of the Act
would be defeated. Further in the case of K.S Panduranga v/s
State of Karnataka, reported in 2013(3) SCC 721 the Hon'ble
Supreme Court held that, "regard being had to the principles
pertaining to binding precedent, there is no trace of doubt that
the principle laid down in Md. Sukar Ali (Supra) by the learned
judges that the Court should not decide a criminal case in the
absence of counsel of the accused as an accused in a criminal case
should not suffered for the fault of his counsel and the Court
should, in such a situation must appoint another counsel as
amicus curie to defend the accused and further if the counsel does
no appear deliberately, even then the Court should not decide the
appeal on merit is not in accordance with the pronouncement by
larger bench in Bani Singh." The Hon'ble Court further held that
in view of the aforesaid annunciation of law, it can safely be
concluded that the dictum in Md. Sukur Ali (Supra) to the effect
that the Court can not decide a criminal appeal in the absence of
17 CC.13144/2014( J)
counsel for the accused and that too if the counsel does not
appear deliberately or shows negligence in appearing, being
contrary to the ratio laid down by the larger bench in Bani Singh
(Supra) is per in curium. That apart the order sheet in the present
case clearly shows that the accused is monitoring the proceedings
through the counsels on his behalf, who now and then apper
before the Court and sought time to proceed with the case. No
doubt the case has been proceeded with when there is no
representation on the side of the accused but most of the time the
counsel for the accused appeared before the Court, which shows
that the accused has every knowledge of proceedings. Furthermore
the transaction alleged in the case is purely a hand loan
transaction between the parties. Under such circumstances the
question of appointing counsel for the accused at the cost of state
may not arise at all. Hence, in view of the law laid down in the
case of K.S Panduranga (Supra), the case is proceeded on merits.
14. The accused failed to cross examine PW1 and he did not
lead any defence evidence. Further the order sheet shows the
conduct of the accused in delaying the proceedings. The accused
has been given sufficient opportunities for cross examination of
PW1 but the accused failed to cross examine PW1. Therefore, the
cross examination of PW1 was taken as nil. The accused did not
lead the defence evidence. Therefore the defence evidence was also
taken as nil. The case was posted for arguments. The conduct of
the accused itself shows that he is postponing the liability. If at
all the accused had no liability towards the complainant as alleged
18 CC.13144/2014( J)
in the complaint and if at all he had not issued the cheques in
question for the said liability, he would have promptly proceeded
with the case and also he would have lead defence evidence by
taking the probable defences and proving the same by leading
cogent evidence. The same has not been done. He had not taken
any action against the complainant for misuse of cheques, if at all
they were misused. Therefore there is nothing on record to
disbelieve the case of complainant.
15. The cheques and signatures on the cheques at ExP.1 to
5 are not disputed. It attracts the ratio laid down by the Hon'ble
Supreme Court of India in its decisions reported in 2011 (11) SCC
- 441 - Rangappa V/s.Sri.Mohan and SCC 2015 (8) Page No.378 -
T.Vasanthakumar V/s.Vijayakumari and the recent Judgment
delivered in Crl. Appeal No.508/2019 - Rohit Bhai Jeevanlal Patel
V/s.State of Gujarath and another. The ratio is that the cheque
shall be presumed to be for consideration unless and until the
court forms a belief that the consideration does not exist or
considers the non-existence of consideration was tenable that a
prudent man would under no circumstances act upon the plea that
the consideration does not exist. On perusal of Ex.P1 to 5, they
clearly show that the signature and the contents are written in
different ink and the alterations are also made but the said
alterations are authenticated by the signature of the accused
himself at the place of alteration. The alterations prima facie being
with the consent of the accused, it could not be considered as
material alteration as per Sec.87 of N.I Act. Further as per Section
19 CC.13144/2014( J)
20 of the N.I.Act, if the person signs and delivers Negotiable
Instrument and it is left incomplete and thereby he authorizes the
holder to complete the Negotiable Instrument and thereby he is
liable for the amount mentioned in the Negotiable Instrument. In
the Judgment rendered by the Hon'ble Supreme Court of India
in Bir Singh V/s.Mukesh Kumar reported in AIR 2019 SC
2446, it was held by the Hon'ble Apex Court that "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 be on the accused to prove that the cheque was not in
discharge of a debt or liability by adducing evidence. Even a
blank cheque leaf, voluntarily singed 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 cheques
was not issued in discharge of a debt." The judgment makes it
clear that if the blank signed cheque is issued towards some
payment it would attract the presumption u/sec.139 of N.I Act.
The burden is on the accused to prove that there is no debt or
liability. Further in the case on hand, on perusal of Ex.P1 to 5
and on perusal of Ex.P21 and 22, it is found that they are in the
handwriting of the accused himself. Therefore there is nothing on
record to disbelieve the case of the complainant.
20 CC.13144/2014( J)
16. In the following judgments of the Hon'ble Supreme
Court, the aspect of presumptions and burden of proof has been
settled.
a) The Hon'ble Supreme Court in Rangappa Vs. Mohan
reported in (2010)11 SCC 441 held as under:
26. In 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 a legally enforceable debt or
liability. To that extent, the impugned observations in
Krishna Janardhan Bhat (supra) may not be correct.
However, this does not in any way cast doubt on the
correctness of the decision in that case since it was based on
the specific facts and circumstances therein. As noted in the
citations, this is of course in the nature of a rebuttable
presumption and it is open to the accused to raise a
defence, wherein the existence of a legally enforceable debt
or liability can be contested. However, there can be no
doubt that there is an initial presumption, which favours the
complainant.
27. Section 139 of the Act is an example of a
reverse onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
21 CC.13144/2014( J)
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption under
Section 139 is a device to prevent undue delay in the course
of litigation. However, it must be remembered that the
offence made punishable by Section 138 can be better
described as a regulatory offence since the bouncing of a
cheque is largely in the nature of a civil wrong whose
impact is usually confined to the private parties involved in
commercial transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
accused/defendant cannot be expected to discharge an
unduly high standard or proof.
28. In the absence of compelling justifications,
reverse onus clauses usually impose an evidentiary burden
and not a persuasive burden. Keeping this in view, it is a
settled position that when an accused has to rebut the
presumption under Section 139, the standard of proof for
doing so is that of `preponderance of probabilities'.
Therefore, if the accused is able to raise a probable defence
which creates doubts about the existence of a legally
enforceable debt or liability, the prosecution can fail. As
clarified in the citations, the accused can rely on the
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 of his/her own.
22 CC.13144/2014( J)
b) The Hon'ble Supreme Court in T. Vasantha Kumar V/s
Vijaya Kumari reported in (2015) 8 SCC 378 held as
under:-
Therefore, in the present case since the cheque as
well as the signature has been accepted by the
accused/respondent, the presumption under sec.139
would operate. Thus the burden was on the accused to
disprove the cheque or the existence of any legally
recoverable debt or liability. To this effect, the accused
has come up with a story that the cheque was given to the
complainant long back in 1999 as a security to a loan; the
loan was repaid but the complainant did not, return the
security cheque. According to the accused, it was that very
cheque used by the complainant to implicate the accused.
However, if may be noted that the cheque was dishonoured
because the payment was stopped and not for any other
reason. This implies that the accused had knowledge of the
cheque being presented to the bank, or else how would be
accused have instructed her banker to stop the payment.
Thus, the story brought out by the accused is unworthy of
credit, apart from being unsupported by any evidence.
23 CC.13144/2014( J)
c) The Hon'ble Supreme Court of India in the case of
Rohitbhai Jivanlal Patel Vs. State of Gujarat, (2019) 18
SCC 106 held as under:
"In the case at hand, even after purportedly
drawing the presumption under Section 139 of the NI
Act, the trial Court proceeded to question the want of
evidence on the part of the complainant as regards the
source of funds for advancing loan to the accused and
want of examination of relevant witnesses who
allegedly extended him money for advancing it to the
accused. This approach of the Trial Court had been at
variance with the principles of presumption in law.
After such presumption, the onus shifted to the accused and
unless the accused had discharged the onus by bringing on
record such facts and circumstances as to show the
preponderance of probabilities tilting in his favour, any
doubt on the complainant's case could not have been raised
for want of evidence regarding the source of funds for
advancing loan to the appellant-accused....."
d) The Hon'ble Supreme Court of India in its latest case
of M/s. Kalamani Tex v. P. Balasubramanian reported in
(2021) 5 SCC 283 observed at para No.14 to 18 as under:-
24 CC.13144/2014( J)
14. Adverting to the case in hand, we find on a
plain reading of its Judgment that the trial Court completely
overlooked the provisions and failed to appreciate the
statutory presumption drawn under Section 118 and Section
139 of NIA. The Statute mandates that once the signature(s)
of an accused on the cheque/negotiable instrument are
established, then these 'reverse onus' clauses become
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him.
This point of law has been crystalized by this Court in
Rohitbhai Jivanlal Patel Vs. State of Gujarat, (2019) 18
SCC 106 in the following words:
"In the case at hand, even after purportedly
drawing the presumption under Section 139 of the NI
Act, the trial Court proceeded to question the want of
evidence on the part of the complainant as regards the
source of funds for advancing loan to the accused and
want of examination of relevant witnesses who
allegedly extended him money for advancing it to the
accused. This approach of the Trial Court had been at
variance with the principles of presumption in law.
After such presumption, the onus shifted to the accused
and unless the accused had discharged the onus by
bringing on record such facts and circumstances as to
show the preponderance of probabilities tilting in his
favour, any doubt on the complainant's case could not
25 CC.13144/2014( J)
have been raised for want of evidence regarding the
source of funds for advancing loan to the appellant-
accused....."
15. Once the 2nd Appellant had admitted his
signatures on the cheque and the Deed, the trial Court
ought to have presumed that the cheque was issued as
consideration for a legally enforceable debt. The trial Court
fell in error when it called upon the Complainant-
Respondent to explain the circumstances under which the
appellants were liable to pay. Such approach of the Trial
Court was directly in the teeth of the established legal
position as discussed above, and amounts to a patent error
of law.
16. No doubt, and as correctly argued by senior
Counsel for the appellants, the presumptions raised
under Section 118 and Section 139 are rebuttable in
nature. As held in M.S.Narayana Menon Vs. State of
Kerala, (2006) 6 SCC 39, which was relied upon in
Basalingappa (supra), a probable defence needs to be
raised, which must meet the standard of
"preponderance of probability", and not mere
possibility. These principles were also affirmed in the
case of Kumar Exports (supra), wherein it was further
held that a bare denial of passing of consideration
would not aid the case of accused.
26 CC.13144/2014( J)
17. Even if we take the arguments raised by the
appellants at face value that only a blank cheque and signed
blank stamp papers were given to the respondent, yet the
statutory presumption cannot be obliterated. It is useful to
cite Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, 36
where this court held 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."
18. Considering the fact that there has been an
admitted business relationship between the parties, we
are of the opinion that the defence raised by the
appellants does not inspire confidence or meet the
standard of 'preponderance of probability'. In the
absence of any other relevant material, it appears to us
that the High Court did not err in discarding the
appellants' defence and upholding the onus imposed
upon them in terms of Section 118 and Section 139 of
the NIA.
27 CC.13144/2014( J)
e) The Hon'ble Supreme Court of India in its latest case of
Jain P Jose v/s Santhosh reported in SLP Crl.5241/2016
dated 10.11.2022 observed by referring to its earlier
Judgments in Vasanth Kumar v/s Vijaya Kumari, Rangappa
v/s Mohan and Kalamani Tex and Another v/s P.
Balasubramanian that the complainant is entitled to the
benefit of presumption u/sec.139 of N.I Act that the
cheque was issued for discharge of legally enforceable
debt or liability. It was also observed that the source of
income and the purpose for which the loan was lent
need not be averred in the compliant.
17. Therefore on perusal of the Judgments, it is clear that
an accused need not examine himself for discharging the burden of
proof placed upon him under a statute. He may discharge his
burden on the basis of the materials already brought on record.
An accused has constitutional rights to remain silent. The 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 doubt and the standard of proof
so as to prove a defence on the part of an accused is
preponderance of probabilities. If the cheque and signature are
admitted, the presumption arises that the cheque was issued for
legally enforceable debt/liability. The presumption is rebuttable.
The accused has to raise a probable defence and prove it by
adducing evidence, which must meet the standard of
preponderance of probabilities. Unless the same has been done,
28 CC.13144/2014( J)
doubt can not be raised on the case of the complainant or the
financial capacity of the complainant or the source of his income
cannot be questioned. In the case on hand the accused failed to
appear before the Court in order to take probable defences and
prove the same. The presumption is raised in favour of the
complainant u/sec.139 of N.I Act and it operates until rebutted by
the accused by proving his probable defence. The onus will not
shift on the complainant to prove his case until the presumption is
rebutted.
18. For the reasons mentioned herein above, it is
crystallized that the accused has utterly failed to prove that there
was no existence of legally enforceable debt/liability between him
and the complainant and he has not at all issued the instant
cheques towards the discharge of legally enforceable liability of
Rs.4,17,80,000/-. On the other hand, the complainant has proved
that the accused issued the cheques for the legally enforceable
liability; the cheques were dishonored due to the reason 'Funds
Insufficient' and the notice issued by him was deemed to have
been served on the accused. The complainant proved his case
beyond reasonable doubt. The accused failed to rebut the statutory
presumptions U/s.118(a) & (b) and 139 of the N.I.Act. Accordingly
the accused is found guilty for the offence punishable U/s.138 of
the N.I.Act. Hence, I proceed to answer the Point No.1 in
Affirmative and Point No.2 in the Negative.
29 CC.13144/2014( J)
19. Point No.3 : In view of the reasons assigned in Point
No.1 and 2, it is clear that the transaction is proved and the
transaction is made in the year 2011-2012. The case was filed in
the year 2013. The criminal case was registered in the year 2014.
It took almost 5 years to secure the presence of the accused before
the Court. Thereafter the case was protracted till the year 2022. It
shows that the accused have played all the tactics to delay the
proceedings. As per the provision U/s 138 of NI Act the Court has
power to impose fine up to double the cheques amount. That
apart if the complainant would have kept the said amount in the
bank, it would have fetched some interest. Therefore considering
the facts and circumstances of the case, it is just and proper to
impose the fine more than the amount of cheques. Hence I
proceed to pass the following:-
ORDER
As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine of Rs.4,85,10,000/- (Rupees Four Crore Eighty Five Lakhs Ten Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.4,85,00,000/- (Rupees Four Crore Eighty Five Lakhs Only). The remaining 30 CC.13144/2014( J) balance amount of Rs.10,000/- is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for six months.
The personal bond executed by the accused is hereby stands cancelled.
The copy of the judgment shall be furnished to the accused at free of cost.
(Dictated to the Stenographer, transcript thereof is computerized and printout taken by him, is verified and then pronounced by me in Open Court on this the 30th day of January-2023.) (Lokesh Dhanapal Havale) XV Addl. CMM., Bangalore.
31 CC.13144/2014( J) ANNEXURE Witnesses examined for the Complainant:-
PW.1 : Sri. B.H Narayana Swamy Documents marked for the Complainant:-
Ex.P1 to 5 : 5 Cheques Ex.1(a) to 5(a) : Signatures of the accused Ex.P6 to 10 : 5 pay-in-slips Ex.P11 to 15 : 5 Bank endorsements Ex.P16 to 20 : 5 Bank memos Ex.P21 & 22 : 2 payments receipts Ex.P23 : Legal notice Ex.P24 : Postal receipt Ex.P25 : Photo copy of the letter given to Post master Ex.P26 : Reply given by post master Ex.P27 : Postal envelope Ex.P28 : Returned postal envelope Ex.P29 : Postal acknowledgement Witnesses examined For Defence:-
Nil Documents marked for Defence:-
Nil (Lokesh Dhanapal Havale), XV Addl.CMM., Bengaluru.
32 CC.13144/2014( J) 30.01.2023 (Judgment Pronounced in the Open Court Vide Separate Order sheet) ORDER As per the provisions of Sec.255(2) Cr.P.C. the accused is hereby convicted for the offence punishable u/s.138 of NI Act, 1881 and sentenced to pay fine of Rs.4,85,10,000/- (Rupees Four Crore Eighty Five Lakhs Ten Thousand Only). On deposit of fine amount, the complainant is entitled for compensation of Rs.4,85,00,000/- (Rupees Four Crore Eighty Five Lakhs Only). The remaining balance amount of Rs.10,000/- is to be forfeited to the State.
In default of payment of the fine amount accused shall undergo simple imprisonment for six months.
The personal bond executed by the accused is hereby stands cancelled.
The copy of the judgment shall be furnished to the accused at free of cost.
XV Addl.CMM., Bengaluru.