Bangalore District Court
Sheela Ramani vs L Shivaraju on 7 August, 2024
KABC0C0029282019
IN THE COURT OF XXXIV ADDL. CHIEF JUDICIAL MAGISTRATE,
MAYO HALL UNIT, BENGALURU. (ACJM-34)
PRESENT: Smt. PARVEEN A BANKAPUR,B.Com.LLB.
XXXIV ADDL. CHIEF JUDICIAL MAGISTRATE,
Dated : This the 7th day of August, 2024
C.C.No.50722/2019
COMPLAINANT : Mrs. Sheela Ramani
Aged about 60 years,
W/o. Mr. S. Sudandra Prakash
R/at No.818, 5th Cross, 9th Main,
HRBR Layout, 1st Block,
Kalyan Nagar,
Bengaluru - 560 043.
(By Mr.S.Suresh Kumar - Advocates)
V/s
ACCUSED : Mr. L. Shivaraju
S/o. Lingaiah
R/at No.384, 7th Main, ITI Layout,
Mallathahalli,
Bengaluru - 560 076.
Also at:
No.33, Manjunatha Nilaya,
2nd Cross, Nanjappa Layout,
Jaraganahalli, J P Nagar, 6th Phase,
Bengaluru - 560 078.
Working as:
Scale 8, IMM Department,
Badge No.4464/87195-24
M/s. Hindustan Aeronautics Ltd.,
Engine Division,
Bengaluru Complex
Bengaluru -560 093.
(By M/s. K.P.J.Advocates &
Associates - Advocate)
1 Date of Commencement 30.08.2018
of offence
2 Date of report of offence 05.11.2018
2 C.C.No.50722/2019
3 Presence of accused
3a. Before the Court 22.06.2019
3b. Released on bail 22.06.2019
4 Name of the Complainant Mrs. Sheela Ramani
5 Date of recording of 28.01.2019
evidence
6 Date of closure of evidence 15.02.2024
7 Offences alleged U/s 138 of the Negotiable
Instruments Act.
8 Opinion of Judge Accused is found guilty.
JUDGEMENT
The Private Complaint filed by the Complainant under Section 200 of Cr.P.C against the accused alleging that the Accused committed the offence punishable under Section 138 of Negotiable Instruments Act.
2. The brief facts of the complaint are as follows:
The complainant submits that, she and Accused are colleagues and were working in IMM Department, M/s. Hindustan Aeronautic Ltd., Engine Division, Bengaluru.
The Complainant was working there as Sr. Chief Supervisor and she retired from her service on 30.6.2018. The Accused approached her for a handloan to meet his family necessities and also personal commitments and borrowed Rs.27,80,000/-3 C.C.No.50722/2019
from her and the Accused had assured to pay interest of 18% per annum for the said amount.
The Complainant has paid the said amount in the following manner;
i) Rs.8,37,000/- by cheque
ii) Rs.2,24,000/-by bank transfer
iii) Rs.17,19,000/- by cash In all the Accused had borrowed Rs.27,80,000/- from the Complainant.
It is further submitted by the Complainant that as the Accused failed to repay the said loan amount, she and her husband approached the Accused and demanded for the said amount. Then the Accused entered into a Handloan Agreement on 22.5.2018 and agreed to pay the entire outstanding amount and also executed an On Demand Promissory Note for the said amount. As per the terms of the Handloan Agreement, the Accused promised and undertook to return the said amount of Rs.27,80,000/- and issued 3 post dated cheques bearing No.560391 dtd.30.6.2018 for Rs.10 lakhs, No.560392 4 C.C.No.50722/2019 dtd.30.7.2018 for Rs.10 lakhs and No.560393 dtd.30.8.2018 for Rs.7,80,000/- all drawn on SBI, AeroEngine Factory, Bengaluru Branch, HAL, Bengaluru Complex, Bengaluru with an assurance the same would be honoured on their presentation for encashment.
It is further submitted by the Complainant that as per the instructions and assurance of the Accused, she presented the 3rd cheque bearing No.560393 dtd.30.8.2018 for Rs.7,80,000/- through her banker i.e., Canara Bank, Kalyannagar branch, Bengaluru for encashment on 14.9.2018 however, the cheque was dishonoured with an endorsement as "Exceeds arrangement" on 15.9.2018. Immediately she approached the Accused and intimated about the dishonour of the cheque, but the accused did not bother to pay the cheque amount. Thereafter, the Complainant got issued a legal notice by RPAD on dtd.22.9.2018 to three addresses of the Accused as per the cause title, calling upon the accused to pay the cheque amount. The notice sent to the first address was returned with shara 'unclaimed' and notice sent to second address of the 5 C.C.No.50722/2019 Accused was not returned and not received any confirmation thereofre, the Complainant has taken print out of the status for the legal notice sent to the second address. The notice sent to the third adress was duly served. After receipt of the notice, the neither the Accused paid the Cheque amount nor replied the notice. Accordingly, the Complainant has filed present complaint against the Accused for the offence punishable u/Sec.138 of N.I. Act.
3. Based on the complaint, the sworn statement affidavit, and documents etc., took cognizance of an offence punishable Under Section 138 of N.I. Act by following the guidelines of Apex Court issued in Indian Bank Association case and ordered to be registered a criminal case against the accused for the offence punishable Under Section 138 of N.I. Act.
4. After issuance of summons, accused appeared before the court and enlarged himself on bail. Plea was recorded, read over and explained to the accused, who pleads not guilty and claims to be tried. Hence, the case is posted for complainant's evidence.
6 C.C.No.50722/2019
5. The Complainant got examined herself as PW-1 and got marked documents Ex.P.1 to Ex.P.9. Ex.P10 and Ex.P 10(a) document came to be marked through confrontation during the cross-examination of DW1. The Report of FSL is marked as Ex.C1.
6. Accused was examined U/S 313 of Cr.P.C. Incriminating evidence appearing in the complainant's evidence was read over and explained to the accused who denies the same. The Accused got examined himself as DW1 and no documents were marked from his end and closed his side.
7. Heard arguments of both side.
The learned Counsel for Complainant has placed the following citations;
1. 2020 (2) KLJ 184
2. 2010(4) KCCR 2637
3. 2010 (11) SCC 441
4. ILR 2008 (18) KAR 5431
5. 2018 Cri.L.J. 3613
6. 2019 (4) SCC 197
7. AIR 2020 SC 945 7 C.C.No.50722/2019
8. AIR 2021 SC 2814
9. Cri.Apl.No.1060 of 2010
10. 2020 (4) KCCR 2505
11. 2021 (5) SCC 283
12. 2021 (3) KCCR 2134
13. 2022 (1) KCCR 508 14 2022 (2) KCCR 1184
15. Cri.Apl.No.1223 to 1235 of 2022 (SC)
16. 2023 (2) AKR 461
17. Cri.Apl.No.12802/2022 SC The learned Counsel for Accused has placed the following citations;
1. AIR Online 2023 KAR 202
2. 2015 (1) SCC 1999
3. 2024 (1) KCCR 545
4. AIR 2019 SC 1983
5. AIR 2023 SC 471
8. Upon hearing the arguments and on perusal of the materials placed on record, the following points arise for my consideration.
8 C.C.No.50722/2019
1) Whether complainant proves beyond all reasonable doubts that accused in discharge of legally recoverable debt has issued a Cheque bearing No.560393 dtd.30.8.2018 for Rs.7,80,000/- drawn on State Bank of India, Vimanapura branch, Bengaluru in favour of the complainant which came to be dishonoured with an endorsement "Exceeds arrangement" on 15.09.2018 and in spite of receipt of notice accused has not paid the Cheque amount and thereby committed an offence under Section 138 of N.I.Act?
2) What Order?
9. My findings on the above points is:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
REASONS
10. Point No.1:- Existence of legally recoverable debt is a sine qua non for prosecuting the case under Section 138 of Negotiable Instruments Act. For convenient purpose the essential ingredients to constitute offence under section 138 of N.I.Act is summarized as below:
(i) That there must be a legally enforceable debt.
(ii) That the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes the legally enforceable debt.9 C.C.No.50722/2019
(iii) That the cheque so issued had been returned due to "insufficient funds".
11. It is the core contention of the complainant that, she and Accused are colleagues and were working in IMM Department, M/s. Hindustan Aeronautic Ltd., Engine Division, Bengaluru. The Complainant was working there as Sr. Chief Supervisor and she retired from her service on 30.6.2018. The Accused approached her for a handloan to meet his family necessities and also personal commitments and borrowed Rs.27,80,000/- from her and the Accused had assured to pay interest of 18% per annum for the said amount.
The Complainant has paid the said amount in the following manner;
i) Rs.8,37,000/- by cheque
ii) Rs.2,24,000/-by bank transfer
iii) Rs.17,19,000/- by cash In all the Accused had borrowed Rs.27,80,000/- from the Complainant.
10 C.C.No.50722/2019
12. It is further submitted by the Complainant that as the Accused failed to repay the said loan amount, she and her husband approached the Accused and demanded for the said amount. Then the Accused entered into a Handloan Agreement on 22.5.2018 and agreed to pay the entire outstanding amount and also executed an On Demand Promissory Note for the said amount. As per the terms of the Handloan Agreement, the Accused promised and undertook to return the said amount of Rs.27,80,000/- and issued 3 post dated cheques bearing No.560391 dtd.30.6.2018 for Rs.10 lakhs, No.560392 dtd.30.7.2018 for Rs.10 lakhs and No.560393 dtd.30.8.2018 for Rs.7,80,000/- all drawn on SBI, Aero Engine Factory, Bengaluru Branch, HAL, Bengaluru Complex, Bengaluru with an assurance the same would be honoured on their presentation for encashment.
13. It is further submitted by the Complainant that as per the instructions and assurance of the Accused, she presented one of the Cheque bearing No.560393 dtd.30.8.2018 for Rs.7,80,000/- through her banker i.e., Canara Bank, 11 C.C.No.50722/2019 Kalyannagar branch, Bengaluru for encashment on 14.9.2018 which was dishonoured with an endorsement as "Exceeds arrangement" on 15.9.2018. Thereafter, the Complainant got issued a legal notice by RPAD on 22.9.2018 to three addresses of the Accused as per the cause title, calling upon the accused to pay the cheque amount. The notice sent to the first address was returned with shara 'unclaimed' and notice sent to second address of the Accused was not returned and not received any confirmation. Therefore, the Complainant has taken print out of the status for the legal notice sent to the second address. The notice sent to the third address was duly served. After receipt of the notice, the neither the Accused paid the Cheque amount nor replied the notice. Accordingly, the Complainant has filed present complaint against the Accused for the offence punishable u/Sec.138 of N.I. Act.
14. In order to bring home the guilt of the accused, Complainant got examined herself as PW1 and reiterated the contents of complaint in her examination-in-chief. She has also placed the certified copy of Promissory Note at Ex.P1, certified 12 C.C.No.50722/2019 copy of Handloan Agreement at Ex.P2, original No.560393 dtd.30.8.2018 at Ex.P3, Ex.P4 is bank endorsement, Ex.P5 is office copy of legal notice issued by the Complainant to the Accused on 22.9.2018, Ex.P6 is 3 postal receipts, Ex.P7 is the returned postal cover, Ex.P8 is the postal acknowledgement, Ex.P9 is the postal track and Ex.P10 is the Vakalathnama filed on behalf of Accused.
15. The documents produced by the complainant of course established that complainant meets out the procedural requirements of Section 138 of Negotiable Instrument Act, but it is to be considered whether all these documents establish the offence committed by the accused.
16. The Negotiable Instruments Act raises two presumptions. One contained in Section 118 and the other in Sec. 139 thereof. For the sake of convenience Sec 118(1) of the N.I. Act is extracted here below:
118. Presumptions as to negotiable Instruments--
Until the contrary is proved, the following presumptions shall be made ;--
13 C.C.No.50722/2019
(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.
1. To (g) . . . . . . . . . . . .
Provided that where the instrument has been obtained from its lawful owner, or from an person in lawful custody thereof, by means of an offence of fraud, or has been obtained from the maker or accepter thereof by means of an offence of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him".
17. Further Section 139 of the Negotiable Instruments Act reads as under:
"139, Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability."
Scope and ambit and function of the presumption U/s 118(a) and Sec 139 of NI Act came to be considered by the Hon'ble Apex Court of Indian in Krishna 14 C.C.No.50722/2019 Janardhan Bhat Vs Dattatraya G.Hegde (2008 AIAR (Criminal 151) The Supreme Court has laid down the law in the following phraseology.
" D Negotiable Instruments Act 1881, Secs 139, 138--Presumption under-same arises in regard to second aspect of the matter provided under Sec 138-- Existence of legally enforceable debt is not a matter of presumption under Sec 139- It merely raises presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability - Merely an application of presumption contemplated under Section 139 of N.I.Act should not lead to injustice or mistaken conviction."
18. Further, said decision was followed by Hon'ble High Court of Karnataka in Kempanarasimhaiah Vs P.Rangaraju & Others (2008 (5) KCCR 3371). Relevant paragraph of the said judgment reads as under: -
"12. As to the provisions of Sections 138 of N.I.Act, the following principles emerge from the above observations of Hon'ble Supreme Court at para Nos 21, 23, 25, 26 and 34 of its Judgment in the above said case of Krishna Janardhan Bhat Vs Dattatraya G.Hegde, AIR 2008 SC 1325.15 C.C.No.50722/2019
(i) Section 139 of the Act merely raises a presumption that the cheque was issued towards discharge in whole or in part in any debt or other liability, which presupposed legally enforceable debt. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability." ( para 21)
(ii) The question as to whether the presumption stood rebutted or not, must be determined keeping in view the other evidences on record. Where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. (para 26)
(iii) An accused, for discharging the burden of proof placed upon him under a statute, need not examine himself.
He may discharge his burden on the basis of the materials already brought on records (para 23)
(iv) Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Further more where as prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is " preponderance of probabilities'" ( para 23 & 25)
(v) Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies ( para 25) 16 C.C.No.50722/2019
(vi) Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be deliberately balanced (para 34)
19. Thus from the observations extracted above, it is clear that presumption Under Section 139 of the N.I. Act is only to the extent that the cheque was drawn for discharge in full or in part of any debt or other liability and the said presumption do not relate to the existence of legally enforceable debt or liability. Therefore, before drawing the presumption under Section 139 of the N.I.Act, it is the duty of the Court to see whether or not the complainant has discharged his initial burden as to existence of legally enforceable debt. No doubt, as per Section 118(a) of the Act, there is a rebuttable presumption that every negotiable instrument, is accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration."
20. Factual matrix of the case is required to be tested on the anvil of principles emerging from the above-referred decisions.
17 C.C.No.50722/2019
21. The defence taken by the accused is that, he denied borrowing the loan as well as he denied issuance of Cheque to the Complainant. He denied On Demand Promissory Note and Loan Agreement executed by him. It is only defence that, in the year 2017-18 he had issued Cheque, Promissory Note and Agreements are in civil nature, therefore the Complainant ought to get relief in the Civil Court.
22. To substantiate her claim, the Complainant herself examined as PW1. In the evidence she deposed that, herself and Accused were colleagues and working in IMM Department at HAL, Bengaluru. She further deposed that she was working as Sr. Chief Supervisor and retired from the service on 30.6.2018. It is further deposed that Accused was in need of funds for his family necessities and personal commitments and approached the Complainant for handloan on different occasions and agreed that, he will pay interest at the rate of 18% per annum. It is further deposed that she had paid Rs.8,37,000/- by Cheques, Rs.2,24,000/- by way of bank transfer and Rs.17,19,000/- had paid by way of cash and 18 C.C.No.50722/2019 accordingly, she has paid Rs.27,80,000/- to the Accused. It is further deposed that Accused failed to repay the loan amount and accordingly, she herself and with her husband persuading the Accused to pay the loan amount which borrowed by him. It is further deposed that in that pursuance the Accused and Complainant entered into handloan agreement as per Ex.P2 and also Accused executed On Demand Promissory Note as per Ex.P1. It is further deposed that as per the terms of Ex.P2 Accused promised to return the amount and issued 3 post dated Cheques as per Ex.P3 and other two Cheques. It is further deposed that on trusting the words of the Accused she presented the Ex.P3 Cheque before the bank for encashment, which was dishonoured as per Ex.P4. She further deposed that she issued legal notice to the Accused, calling upon him to pay the Cheque amount as per Ex.P5 which duly served upon the Accused as Ex.P8.
23. On considering the oral and documentary evidence placed by the Complainant, prima facie presumed that, the Ex.P3 Cheque was issued towards discharge of legally 19 C.C.No.50722/2019 enforceable debt. To rebut the presumption the learned Counsel for accused cross examined the PW1 in full length. It is admitted that, Complainant and Accused were employees of HAL. In the cross-examination he admits that, the Accused got handsome salary from his job. She denied that, Accused has no any financial problem and also he not seek any financial assistance from her. In the cross-examination it is suggested by the learned Counsel for accused that, in the year 2017-18 there was a election in HAL in Employees' Union and at that time, some employees are borrowed loan from her and for that, Accused is a guarantor for the loan. In the cross-examination she further stated that, she has not obtained permission from HAL Authority for lending the loan. It is further defence taken in the cross-examination that, Ex.P1 to 3 are obtained by the Complainant by threatening the Accused, which denied by the PW1. She further denied the suggestion that on Ex.P1 to 4 signatures and thumb impressions are not belongs to the Accused. Further denied the suggestion that notice was not duly served upon the Accused. It is further denied by the PW1 that, Ex.P1 to 3 documents are created by the Complainant. 20 C.C.No.50722/2019
24. Further, to rebut the presumption Accused examined himself as DW1. He deposed that the Complainant had filed false complaint against him. He deposed that he has not issued any Cheques to the Complainant in the year 2018 and signature on the Cheque not belongs to him. He further deposed that the Complainant has not produced any document to show that, before her retirement, she lent amount to him. He further deposed that, without licence from the proper authority, the Complainant doing money lending business, which was against the law. He further deposed that, during the period 2017-18 Complainant took Cheques, promissory note and agreement from him, which documents are civil in nature. He further deposed that, the Complainant has not mentioned specific date for lending the amount and issuing the Cheques. He further deposed that, Complainant has not issued legal notice to the him and signature appeared on the postal acknowledgement not belongs to him.
25. In the cross-examination he admitted that, notice was issued on his correct address and he also admits that, the 21 C.C.No.50722/2019 affidavit filed by him in lieu of oral examination-in-chief, the address mentioned in the said affidavit and in the legal notice address were one and same. He further admits that Ex.P1 address and his affidavit address are one and same. He further admits that Ex.P2 address and his affidavit address are one and same. He further admits that, Ex.P3 Cheque was belongs to him. He admits the signature on vakalathnama filed by the learned Counsel for accused on behalf of Accused as per Ex.P10. He stated in the cross-examination that Ex.P1 to 3 documents are taken by the Complainant by threatening him. He further stated that, son of the Complainant was threatened him. He further stated that, he has not lodged complaint against the Complainant and her son for threat. He further stated that, Ex.P1 to 3 were taken by the Complainant in blank.
26. Meanwhile, on the application filed by the Complainant Ex.P1 to 3 in which Accused has denied his signature s and thumb impressions were sent to the FSL for expert opinion along with admitted signatures and thumb impression and also Ex.P10. After analyzing the signatures and 22 C.C.No.50722/2019 thumb impression, the expert has sent the report to the court which marked at Ex.C1. As per the expert opinion the admitted signatures and disputed signatures are belongs to one person. It is clear opinion of the expert that the person who wrote the standard signatures also wrote the questioned signatures.
27. After receiving the FSL Report from the expert, when the case posted for further cross-examination of DW1, DW1 remained absent and not appeared for tendering further cross- examination. Hence, after giving time and opportunity, when DW1 not appeared for tendering cross-examination inspite of directions issued to him, the entire evidence of DW1 is discarded.
28. The only defence of the Accused is that, the signatures on Ex.P1 to 3 are not belongs to him. The Complainant took blank Ex.P1 to 3 by threatening him. It is pertaining to note that he has not taken any legal action against the Complainant and his son by threatening him and also by taking Ex.P1 to 3 documents from him. It is pertaining to note that Ex.C1 expert report in which it is clearly opined 23 C.C.No.50722/2019 that, the signature on Ex.P1 to 3 are belongs to the Accused only. Further, on perusing the vakalathnama of the Accused in which he admitted the signature as per Ex.P10(a) and signatures on deposition of DW1, signatures on statement recorded u/Sec.313 and plea are one and same. Hence, it is clear that Ex.P1 to 3 documents are belongs to the Accused. Ex.P1 Promissory Note, Ex.P2 Handloan Agreement executed by the Accused in favour of Complainant. Further, Ex.P3 Cheque was issued by the Accused in favour of Complainant.
29. During the course of arguments, the learned Counsel for accused vehemently argued that, the Complainant was employee of HAL and before lending amount, she has not obtained permission from the Higher Authority and further she has no financial capacity to lend huge amount to the Accused and Complainant has not mentioned date of lending the amount and date of issuance of Cheque. In this regard, the learned Counsel for accused relied on 2023 (2) AKR 649 in the case of Jadesha Reddy V/s. G. Chandranna wherein Hon'ble High Court of Karnataka held that; 24 C.C.No.50722/2019
"Negotiable Instrument Act 138 and 139 - When the annual income of the Complainant from agriculture and salary is hardly about Rs.275,000/- to Rs.3 lakhs it is hard to accept his contention that on 19.6.2009 he had hard cash of Rs.6 lakhs in his hand. He claims that, he has agricultural income but his annual agricultural income does not exceed Rs.1,30,000/- as per his own admission. In that event, the Complainant is required to explain about the source for this amount and if he is incapable of explaining the source for this amount, the court cannot become a party to his illegal activities.
"No doubt, the Complainant is the holder of the Cheque in due course and the initial presumption is in his favour. But it is required to noted here that he is a public servant and handling cash without permission from the higher officers. Further, his financial capacity itself establishes that, he is not in a position to pay such a huge amount of Rs.6 lakhs that too by way of hard cash. Under such circumstances, the presumption u/Sec.139 of the N.I. Act is not available to the Complainant and the Complainant is required to prove his transactions by lending cogent evidence. But, except the self interested testimony of the Complainant, there is no material placed and hence the same cannot be 25 C.C.No.50722/2019 accepted in view of cross-examination of the Complainant and Ex.D1."
Further, the learned Counsel for accused relied on 2015 (1) SCC 99 in the case of K. Subramani V/s. K. Damodara Naidu wherein Hon'ble Apex Court held that;
"Negotiable Instrument Act Sec.138, 118 and 139 - dishonour of Cheque - Legally enforceable debt not proved as a Complainant could not prove source 0f income from which alleged loan was made to appellant - Accused - Presumption in favour of holder of Cheque, hence, held, stood rebutted - Acquitted restored."
Further relied on 2024 (1) KCCR 545 in the case of Charles Hary V/s. Praveen Jain wherein, the Hon'ble High Court held that;
"Sec.138 and 139 - Acquittal - Accused disputing financial capacity to lend money and also necessity for Accused to borrow- Complainant failing to establish said disputed aspects - Accused rebutting presumption drawn in favour of Complainant - Acquittal not interfered with." 26 C.C.No.50722/2019 Further the learned Counsel for accused relied on Air 2019 SC 1983 in the case of Basalingappa V/s. Mudibasappa wherein Hon'ble Apex Court held that;
""Negotiable Instrument Act Sec.138, 118 and 139 - Dishonour of Cheque - Non mentioning of date of issuance of Cheque by Complainant in complaint as well as in his evidence - Complainant not satisfactorily explaining contradictions in complaint vis a vis his examination in chief and cross- examination - His failure to prove financial capacity though he is a retired employee to advance substantial amount to different persons including Accused - Findings of trail court that Complainant cannot prove his financial capacity, cannot be termed as perverse without discarding evidence led by defence - Accused entitled to acquittal."
30. On the other hand, the learned Counsel for Complainant vehemently argued that the Accused and Complainant were employees of HAL and both were working in same department. It is further argued that, the Complainant is working as a Sr. Chief Supervisor and before just retirement, she lent the amount. It mean that she having handsome salary 27 C.C.No.50722/2019 at the time of retirement of service. Moreover, the Complainant paid money to the Accused by way of Cheque, by way of account transfer and also by cash. Further, it is submitted that the Accused has taken several defences in the cross- examination, one time he stated that, he denying the issuance of Cheque and denying his signatures on the Cheque as well as executed documents by him. Another time he stated that, Ex.P1 to 3 documents were taken by the Complainant by threatening him and third time, he stated that, in the year 2017 - 18 he issued Ex.P1 to 3 documents in favour of Complainant, which were misused by her. Therefore, the Accused taken several defences only with intention to avoid his liability. Further, the learned Counsel for complainant submits that for lending the amount in emergent necessity who is co- employee the permission of higher authority is not necessary when no complaint lodged against them. Int his regard, the learned Counsel for complainant relied on decision of Hon'ble High Court of Karnataka in Cri.Apl.No.594/2018 in the case of Sateesha B.A. S/o. Sri Annegowda V/s. Sri R. Prasad S/o. Sri Rajan wherein the Hon'ble High Court held that; 28 C.C.No.50722/2019
"Cr.P.C. Sec.378 (4) - "Negotiable Instrument Act Sec.138 - Loan money to worker of company - Dishonour of Cheque - Rejection of complaint on ground that permission of higher authority to lend a loan to a co-worker - Acquittal - Even if it is a case that Conduct of Rules would apply to parties, Magistrate while dealing with the matter u/Sec.138 of the Act, required to find out whether the Complainant had proof to show that, he had lent money to Accused, whether he had source to lend money, - Not within domain of Magistrate to find out as to whether the Complainant had sought permission from higher authorities - Taking permission or not in a matter of disciplinary proceedings which could be initiated only by disciplinary authority - Magistrate while dealing with the matter under Negotiable Instrument Act is in no way concerned with permission that he was required to be taken from higher authority, if Conduct of Rules would required such permission - Adherence to disciplinary or Conduct of Rules totally irrelevant for consideration of a criminal proceedings u/Sec.138 of N.I Act - Order of acquittal set aside."
In the above said decisions the Hon'ble High Court discussed in para No.11 that;
29 C.C.No.50722/2019
11- Ex.P15 HAL CDA Rules, 1984 was produced by the Appellant herein before the Trial Court. The very first clause i.e., clause 1.5.2.1 provides that the HAL conduct, disciplinary and appeal rules were introduced effective from September 1st 1984 and is applicable to all officers in Grade - I and above of company. On the other hand, at Clause 1.5.3, it provides that the Government of India under the Laws related to Industrial Relations (IR) had promulgated the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Employment (Standing Orders) Rules, 1946. These are applicable to every industrial establishment wherein 100 or more workmen are employed. It further provides that the main object of Certified Standing Orders is to require employers to define the conditions of work and to bring uniformity in terms and conditions of employment and also to maintain harmonious relations between the employer and the employees.
12- Article 309 of the Constitution of India provides that the Acts of the appropriate Legislature may regulate the recruitment and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or 30 C.C.No.50722/2019 the State. The protection given to the persons under the services of the State under Article 311 of the Constitution do not apply to the workmen since they are governed by the Standard Orders of the Board and the provisions of the Industrial Disputes Act and such other related enactments provided in this regard."
31. Further, the learned Counsel for Complainant submits that, Accused has admit issuance of Cheque, On Demand Promissory Note and Loan Agreement. Further submits that, as per Ex.C1 it is proved that the signature on Ex.P1 to 3 are belongs to the Accused and Accused has signed and issued Ex.P1 and 3 in favour of Complainant and also executed Loan Agreement as per Ex.P2. In this regard, the learned Counsel for complainant relied on 2010 (4) KCCR 2637 in the case of Sri B.H. Lakshminarayana V/s. Smt. Girijamma wherein Hon'ble High Court held that;
"Negotiable Instrument Act Sec.13, 139 and 142 - Dishonour of Cheque - Admission by Accused
- Issue of several Cheques by the Accused on 31 C.C.No.50722/2019 various dates to discharge amount due - Accused did not dispute his signatures on Cheques - Accused took the defence that, the Cheques in questions were issued in contemplation of the Complainant and her husband arranging for loan to the Accused and that they failed to do so and the Cheques were not supported by consideration - The agreement at Ex.P2 was in the handwriting of the Accused and contained a clear admission as to the existence of debt and issue of Cheques. Held, the Trial Court had rightly convicted the Accused for the offence punishable u/Sec.138 of N.I. Act."
Further, relied on 2010 (11) SCC 441 in the case of Rangappa V/s. Sri Mohan where the Hon'ble High Court held that;
"Negotiable Instrument Act Sec.138, 139 - Dishonour of Cheque - Conviction confirmed - Appellant - Accused, drawer of Cheque in question, neither raising a probable defence nor able to contest a existence of legally enforceable debt or liability - High Court reversing his acquittal - Sustainability - Held, complaint discloses prima facie existence of a legally enforceable debt or liability - Since Accused admitted that signature on the Cheque was his, 32 C.C.No.50722/2019 statutory presumption u/Sec.139 comes into play and the same was not rebutted even with regard to the materials submitted by the Complainant - Accused not able to prove lost Cheque theory - Apart from not rising a probable defence, Accused was also able to contest the existence of a legally enforceable debt or liability - Hence, his conviction by High Court, held, proper."
Further, the learned Counsel for complainant relied on 2023 (2) AKR 461 in the case M. Shashikala Vs. S. Wilfred wherein the Hon'ble High Court held that;
"Negotiable Instrument Act Sec.138, 139 - Dishonour of Cheque - Complaint - Statutory notice was received by Accused but, she did not reply the same - Signature and writings found on Cheque admitted by Accused - Accused also admitted that said Cheque was drawn from her bank account - Presumption against Accused u/Sec.139 - Cheque was presumed to be issued by Accused to Complainant towards discharge of her legally enforceable debt - Accused failed to rebut said presumption - Accused neither set up any probable defence nor offered any satisfactory explanation as to how Cheque had reached the custody of 33 C.C.No.50722/2019 Complainant - Complainant proved that he had financial capacity to pay amount - Evidence shows that Complainant paid amount to Accused - Conviction u/Sec.138 proper."
Further the learned Counsel for complainant relied on 2021 (3) KCCR 2134 in the case of T. Kumar V/s. K. Channakeshavalu, the Hon'ble High Court of Karnataka held that;
"It was contended that the respondent did not produce any materials to show that he was possessing cash of Rs.9,50,000/- on the date of the alleged lending and he did not produce his bank account statement, income tax returns etc. Therefore, lending capacity was not proved. This court has already held that there was a deemed service of a notice on the Accused. But the Accused did not choose to reply the notice. PW1 deposed that in the year 2000 he completed his diploma at the age of 21 years, thereafter, he was in real estate business and he had income from the said business. The fact of the completing diploma and thereafter carrying real estate business was not at all disputed. In the cross-examination of PW1 only questions like whether he can produce the statement of accounts, 34 C.C.No.50722/2019 whether he is an income tax assessee were asked. There was no direct suggestion to the PW1 that he had no lending capacity. Such statement was not made even in the evidence of DW1. Considering the materials on record and the presumption attached u/Sec.139 of N.I. Act, the court below accepted the claim of the Complainant that he lent loan with the funds available to him. This court does not find any perversity in such findings of the court below."
32. On careful reading of above decisions relied by both sides, in the present case the Complainant was working as a Sr. Administrative Supervisor in HAL company and this fact is not disputed by the Accused and she got good financial capacity to lend amount to the Accused. It is further not denied that the Complainant transferred amount to the Accused by Cheque, account transfer as well as by cash. It is pertaining to note that the Complainant and Accused were employees of HAL and they are workers. Therefore, taking permission from higher authority to lending the money to the Accused is not material to this case since it is criminal proceedings u/Sec.138 of N.I. Act. Further the Accused has take multiple defences in the 35 C.C.No.50722/2019 present case, somewhere he stated that he had issued Cheque, promissory note and handloan agreement in favour of Complainant, in somewhere he stated that all 3 documents were obtained by the Complainant by threatening him. He further stated that, he was not signed on Ex.P1 to 3. Therefore, the changing version itself shows that to avoid the liability, he was take false defence.
33. Therefore, it has to be presumed that the cheque in question was issued by the accused to discharge the legally recoverable debt or liability. The accused can place rebuttal evidence so as to show that the cheque was not issued for consideration. As appreciated supra, accused has failed to put acceptable and satisfactory evidence to probability the defense. Therefore, there is no question of saying that the cheque was not issued for liability.
34. It is not denied by the Accused that, Cheque not belongs to his bank account and also it is proved that on the Cheque Accused was signed. Therefore, complainant has discharged her initial onus laid on her. When she has 36 C.C.No.50722/2019 discharged her initial onus, it raises presumption U/s 118(a) and 139 of Negotiable Instruments Act. Accused has failed to rebut the presumption either in cross-examining PW-1 or on his evidence.
35. So, far as sentence and compensation is concern, an offence punishable under Section 138 of N.I. Act, is a civil wrong and compensatory in nature, punitive is secondary, considering, the above settled principle of law with facts and circumstances of the case, which clearly reveals that, towards discharge of consideration amount, the cheque in question of issued by the accused to the complainant. Therefore, considering the nature of transaction, duration of pendency, litigation expenses, I am opinion that, if sentence of fine of Rs.10,56,120/- (Rupees Ten Lakhs Fifty-six Thousand One Hundred and Twenty only) is imposed that would meet the ends of justice, accordingly, the accused is hereby sentenced to pay a fine of Rs.10,56,120/- (Rupees Ten Lakhs Fifty-six Thousand One Hundred and Twenty only) out of that, the complainant is entitled for a sum of 10,51,120/- (Rupees Ten 37 C.C.No.50722/2019 Lakhs Fifty-one Thousand One Hundred and Twenty only) as a compensation as per Sec.357(1) of Cr.P.C., remaining amount of Rs.5,000/-, is to be appropriated to the state, in case of default the accused shall undergo simple imprisonment for a period of 6 months. Accordingly, the Point No.1 is answered in Affirmative.
36. POINT No.2 : In view of discussion held in Point No.1, I proceed to pass the following :
ORDER Acting U/S 255(2) of Cr.P.C., the accused is convicted for the offence punishable Under Section 138 of Negotiable Instrument Act.
Accused is sentenced to pay fine of
Rs.10,56,120/- (Rupees Ten Lakhs Fifty-six
Thousand One Hundred and Twenty only) in
default Accused shall undergo simple
imprisonment for 6 months. Further, it is made
clear that out of fine amount, 10,51,120/- (Rupees Ten Lakhs Fifty-one Thousand One Hundred and Twenty only) is to be paid to the complainant as compensation and Rs.5,000/- is ordered to be remitted to the State.38 C.C.No.50722/2019
Bail bond stands canceled.
Supply the free copy of this judgment to the Accused forthwith.
(Dictated to the stenographer, transcribed by her, corrected by me and then pronounced in the open court on this 7th August, 2024) PARVEEN A Digitally signed by PARVEEN A BANKAPUR BANKAPUR Date: 2024.08.08 17:28:28 +0530 (PARVEEN A BANKAPUR) XXXIV ACJM, BENGALURU.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 Mrs. Sheela Ramani
2. Documents marked on behalf of complainant:
Ex.P.1 Certified copy of On Demand
Promissory Note
Ex.P.1(a)& (b) Signatures of the Accused Ex.P.2 Certified copy of Handloan Agreement Ex.P.2(a)& (b) Signature of the Accused and Complainant Ex.P.3 Original Cheque Ex.P.3(a) Signature of the the Accused Accused Ex.P.4 Bank endorsement Ex.P.5 Office copy of legal notice Ex.P.6 Postal receipt Ex.P.7 Unserved Postal Cover Ex.P.8 Postal acknowledgement Ex.P.9 Postal track Ex.P.10 Vakalathnama Ex.P.10(a) Signature of the Accused
3. Witnesses examined on behalf of Accused:
D.W.1 Mr. L. Shivaraju
4. Documents marked on behalf of Accused: NIL
5. Court Document marked Digitally signed by Ex.C.1 FSL Report PARVEEN A PARVEEN A BANKAPUR BANKAPUR Date: 2024.08.08 17:28:32 +0530 (PARVEEN A BANKAPUR) XXXIV ACJM, BENGALURU.