Bangalore District Court
Sri. Raju.V vs Sri. C.Ganesh on 19 February, 2020
1 C.C.No.10557/2018 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated:- This the 19th day of February 2020
i.
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.10557/2018
Complainant : Sri. Raju.V,
S/o. Late.Venkatappa,
Aged about 49 years,
R/a No.355, 3rd Cross,
3rd Stage, Bhovi Colony,
Opp. to Carmel School,
Basveshwaranagar,
Bengaluru -560 079.
(Rep.by Sri. K.H.Pradeep Kumar.,
Adv.,)
- Vs -
Accused : Sri. C.Ganesh,
S/o. Chowdappa,
Aged about 43 years,
R/at No.223,
"Sree Lakshmi Venkateshwara
Prasanna",
8th Main, Bhavani Nagar,
Teachers Colony,
Subramanyapura Main Road,
B.S.K. 2nd Stage,
Bengaluru - 560 070.
2 C.C.No.10557/2018 J
Also at R.R.Fancy Store,
Situated at No.60,
Sarabande Palya,
BSK 2nd Stage,
Subramanyapura Main Road,
Bengaluru - 70.
(Rep. by Sri. B.K.Ramesh., Adv.,)
Case instituted : 13.4.2018
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 19.2.2020
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, Accused is his friend and they are well acquainted to each other since 10 years and Accused approached him for financial assistance in the month of April 2017 to improve his fancy store under the name and style of "R.R. Fancy Store" situated at No.60, Sarabandepalya, B.S.K. II Stage, 3 C.C.No.10557/2018 J Subramanyapura Main Road, Bengaluru -70, accordingly he has given a hand loan of Rs.1,50,000/= to the Accused in the 2nd week of May 2017 without any interest and Accused promised to repay it within six months, even after lapse of six months, the Accused has not paid the amount inspite of his repeated requests, demands thereafter finally in the last week of January 2018 the Accused has issued a cheque bearing No. 542061 dated: 2.2.2018 for sum of Rs.1,50,000/- drawn on ICICI Bank, Jayanagar 7th Block Branch, Bengaluru., in his favour for repayment of the loan borrowed by him, thereafter he has presented the said cheque through his banker i.e. KSC Apex Bank Ltd., Padmanabhanagar Branch, Bengaluru for encashment and same came to be dishonoured on 3.2.2018 for the reason "Funds Insufficient" and thereafter he got issued legal notice dated: 2.3.2018 through RPAD to the Accused calling upon him to pay the amount covered under the dishonoured cheque within 15 days from the date of receipt of notice and the said notice was returned with shara "Not claimed" on 6.3.2018 and Accused failed to pay the amount and neglected to reply the notice inspite 4 C.C.No.10557/2018 J of receipt of notice sent by him. Hence he has filed the present complaint praying that the Accused be summoned, tried and punished in accordance with Sec.138 of the Negotiable Instruments Act.
3. The Complainant has led his Pre-
summoning evidence and he has filed affidavit in lieu of sworn statement and he has produced the documents as per Ex.P.1 to P.14 i.e. Ex.P.1 is the original cheque dated: 2.2.2018 in which, the signature is identified by P.W.1 as that of the Accused as per Ex.P1(a), the Bank memo as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, two postal Receipts as per Ex.P.4 and P.5, copies of the returned legal notices as per Ex.P.6 and P.7, RPAD covers as per Ex.P.8 and P.9, two postal receipts as per Ex.P.10 and P.11 and two Postal acknowledgments as per Ex.P.12 and P.13 and original pass book as per Ex.P.14 and relevant entries dated: 23.12.2016 and 15.5.2017 as per Ex.P.14(a) respectively.
4. Prima facie case has been made against the Accused and summons was issued against his in 5 C.C.No.10557/2018 J turn the Accused has appeared before the Court and he has been enlarged on bail and the substance of the accusation has been read over to him, to which he has pleaded not guilty and has claimed the trial.
5. In view of the principles of law laid down and as per the directions of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the accused, as he intended to set out his defence, the case was posted for the cross-examination of PW.1 and the Accused has cross examined the PW.1 and complainant closed his side.
6. Thereafter the statement of the Accused as required U/s.313 of Cr.P.C. has been recorded, the Accused has denied the incriminating evidence appearing against him and chosen to lead his rebuttal evidence.
7. The Accused himself examined as DW.1 and no documents have been produced on behalf of the Accused and closed his side.
6 C.C.No.10557/2018 J8. Heard the arguments by both sides and perused the and perused the decisions relied upon by the learned counsel for the complainant and materials on record.
9. On the basis of complaint, evidence of complainant and documents and having heard the arguments of both learned counsels for the complainant and the accused, the following points that are arise for consideration are:-
1. Whether the complainant proves that the accused has issued cheque bearing No. 542061 dated: 2.2.2018 for sum of Rs.1,50,000/- drawn on ICICI Bank, Jayanagar 7th Block Branch, Bengaluru to discharge legally recoverable debt to the complainant and when the complainant has presented a cheque for encashment through his banker but the said cheque has been dishonoured for the reasons "Funds Insufficient" on 3.2.2018 and the complainant issued legal notice to the accused on 2.3.2018 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?7 C.C.No.10557/2018 J
2. What Order?
10. The above points are answered as under:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
REASONS
11. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act pre-supposes three conditions for prosecution of 8 C.C.No.10557/2018 J an offence which are as under:
1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
12. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 a presumption 9 C.C.No.10557/2018 J shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
13. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified regarding lending of loan amount of Rs.1,50,000/- to the Accused on 15th May 2017 without any interest and Accused promised to repay the same within six months, thereafter the Accused has not paid the amount borrowed by him inspite of repeated requests, demands finally the Accused has issued 10 C.C.No.10557/2018 J cheque i.e Ex.P.1 for Rs.1,50,000/- dated: 2.2.2018 towards repayment of the loan amount , thereafter he has presented the said cheque through his banker for encashment and it was dishonoured for the reason of "Funds Insufficient" dated; 3.2.2018 and thereafter on 2.3.2018 caused legal notice to the accused through RPAD to him calling upon him to pay the amount covered under the dishonoured cheque within 15 days from the date of receipt of notice and the notice was returned with an endorsement of "Not claimed" on 6.3.2018 Accused failed to pay the amount and neglected to reply the notice inspite of receipt of notice sent by him.
14. In support of his oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 to P.14 i.e., Ex.P.1 is the original cheque dated:
2.2.2018 in which, the signature is identified by P.W.1 as that of the Accused as per Ex.P1(a), the Bank memo as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, two postal Receipts as per Ex.P.4 and P.5, copies of the returned legal notices as per Ex.P.6 and P.7, RPAD covers as per Ex.P.8 and P.9, two postal receipts as per Ex.P.10 11 C.C.No.10557/2018 J and P.11 and two Postal acknowledgments as per Ex.P.12 and P.13 and original pass book as per Ex.P.14 and relevant entries dated: 23.12.2016 and
15.5.2017 as per Ex.P.14(a) respectively.
15. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not in dispute by the accused that, the cheque in question belongs to his account and signature found at Ex.P.1(a) is also that of his signature. The Accused has also not disputed that the cheque in dispute presented for encashment and dishonoured for the reason of "Funds Insufficient' vide bank endorsement dated:3.2.2018 and as a matter of record and has been proved by Ex.P.2 issued by the concerned bank dated:
3.2.2018. Therefore the complainant has proved that, the cheque in question i.e Ex.P.1 was presented within its validity period and dishonoured as per bank endorsement issued by the banker of the Accused and the cheque in question belonging to the Accused account and signature of the Accused is at Ex.P.1(a).12 C.C.No.10557/2018 J
16. In relation to the service of legal notice i.e Ex.P.3 upon the Accused, the Accused has denied and disputed the service of legal notice on him. The complainant in order to prove the service of legal notice caused by him, he has stated in his evidence that, he got issued legal notice through his counsel on 2.3.2018 through RPAD and the said notice was returned with postal shara "Not claimed" on 6.3.2018. In support of his oral evidence has relied upon the documentary evidence i.e. copy of legal notice, RPAD covers returned to him with a postal shara that, "not claimed", and postal receipts and acknowledgements which are at Ex.P.3 to P.13 respectively. On perusal of the Ex.P.3 to P.13, it appears that, the complainant has got issued legal notice on 2.3.2018 to the two addresses of the accused as mentioned in the legal notice i.e. Ex.P.3 through registered post acknowledgement due i.e. as per Ex.P8 and P9. The complainant has mentioned the address of the Accused on Ex.P.8 and P9 and the said RPAD covers sent by the complainant returned with a postal shara "Not claimed". Hence, on the basis of Ex.P.3 to P.13 it can be held that, the legal notice issued by the complainant to the accused 13 C.C.No.10557/2018 J through RPAD were returned to him with an endorsement of "Not claimed". The learned counsel for the accused during the course of cross- examination of complainant has suggested that, the complainant by colluding with the officials of the postal authorities got created the shara on Ex.P.8 and P.9 and has disputed the first address of the Accused mentioned in the legal notice as the Accused was not residing in the said address but the Accused admitted the second address shown by the complainant in his legal notice but he denied that the notice issued to the second address was not served on him, but the complainant has denied the said suggestions. It is also relevant here to mention that, the Accused in his cross-examination at page No.2 has categorically admitted that, the two addresses mentioned in the legal notice i.e Ex.P.3 are the addresses of his residential and his shop addresses, and also admits that, his residential address and shop address are one and the same. Hence, the admissions of the Accused makes it clear that, the learned counsel for the Accused though he has denied the service of legal notice on the Accused during the course of cross-examination of 14 C.C.No.10557/2018 J complainant and also denied the residential address of the Accused but the Accused himself categorically admitted the addresses mentioned in the legal notice i.e Ex.P.3 are of his residential and shop addresses, in such circumstances what ever the cross- examination conducted by the learned counsel for the Accused in relation to the service of notice nullifies by the Accused himself by admitting the addresses mentioned by the complainant in the legal notice i.e Ex.P.3 are of his residential and shop addresses. Therefore the accused has admitted that, the addresses mentioned in the legal notice are of his correct addresses and the Accused has also not produced any documents to show that, as on the date of issuance of the legal notice or service of legal notice, the addresses mentioned in the legal notice, RPAD and postal acknowledgements are not his correct addresses, in such circumstances, it can be held that, the accused has admitted that, the legal notice issued by the complainant is to his correct addresses and the said notice has not been received by him and it was returned to the complainant with a postal endorsement that "not claimed". Though the Accused has contended that, the endorsement 15 C.C.No.10557/2018 J issued by the postal authorities on Ex.P.8 and P.9 are got created by the complainant by colluding with the staff of the postal authorities, in such circumstances the burden of proving to that extent is upon the Accused but the Accused has not produced any evidence to substantiate his allegations that, the complainant got created the shara on Ex.P.8 and P.9 by colluding with the postal authorities and even the Accused has not examined the concerned postal authorities to prove that, the postal endorsement issued by the authority is got created by the complainant, in such circumstances it can be held that the Accused has also admitted the postal endorsement issued by the concerned postal department. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. Lingamma, wherein the Hon'ble High Court held that, "Notice sent at correct address returned unclaimed - is deemed to be served. In another decision reported in 1998 KAR 1841 in the case of Shridhar M.A. Vs. Metalloy Steel Corporation and 1999 Cri.L.J. 4606 "K. Bhaskaran Vs. Vaidhanbalan wherein the 16 C.C.No.10557/2018 J Hon'ble Apex Court was concerned with the question as to when the service of notice could be inferred and it was held that if there is an endorsement like 'not available in the house' 'house locked' 'shop closed' 'unclaimed' the service should be deemed to have been effected. It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s. Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, notice sent by registered post with acknowledgement to a correct address-service of notice has to be presumed. Therefore in view of the principles of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on her since in this case also the complainant has issued notice to the accused to her correct address through registered post and the said notice was returned with an endorsement of "not claimed", hence, the notice issued by the complainant through registered post is held to be proper service and for the above said reasons, the contentions taken by the learned counsel for the accused that, the notice issued by the complainant 17 C.C.No.10557/2018 J was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable and are not sustainable. Hence the complainant has complied mandatory requirements as required U/s.138 of Negotiable Instruments Act.
17. It is the specific defence of the Accused that, the complainant had no source of income to lend alleged loan amount of Rs.1,50,000/= to him and the Accused has not borrowed loan amount in question from the complainant and has not issued the cheque in question i.e Ex.P.1 to the complainant towards discharge of loan amount in question. It is also the defence of the Accused that, one Mr. Shankaregowda was doing business of chit, he and complainant are subscriber to the chit run by the said Shankaregowda and they were used to visit the office of Shankaregowda during the year 2016 and he used to send subscription amount of the chit through the complainant by way of cheque as such on 23.12.2016 he had given a cheque for Rs.2,600/- towards chit subscription amount in order to give 18 C.C.No.10557/2018 J the said cheque to Mr. Shankaregowda but he said cheque was dishonoured as such complainant brought back the said cheque handed over the same to his wife intimating the dishonour of cheque at that time his wife had given blank signed cheque to the Accused by collecting the said cheque at that time as he was out of station and the said cheque has been misused by the complainant by filing this false complaint. Hence in this back ground now it is to be examined oral and documentary evidence adduced by the complainant and Accused.
18. The learned counsel for the Accused cross- examined the complainant in length but nothing has been elicited to discredit or discard his evidence, instead of eliciting anything materials from the complainant the Accused rather concentrated his defence that, there was no financial transaction between him and the complainant, and Accused has not produced the documents to show his financial capacity and has not collected the documents to show that, he has lend the loan amount in question to the Accused. It is true that, the complainant/ PW.1 admitted that, has not made an enquiry 19 C.C.No.10557/2018 J about the business running by the Accused but the complainant has specifically stated that, he know the Accused since 7 to 8 years and he has got shop in the name and style of "R.R. Fancy Stores" and the said shop is in the name of his wife and his wife is looking after the business of the said fancy stores, hence it goes to show that, mere non making an enquiry of the business run by the Accused is not fatal to the transaction in question. The complainant/PW.1 in his cross-examination has specifically stated that, he has got an income of Rs.5 to 6 Lakhs per year and he has got shop in the name of Shree Raju Fashion Ware and he used to submit his income tax returns in respect of the income getting from the said business. The complainant has also stated that, the Accused approached him in the month of April 2017 seeking financial assistance but he did not remember the date on which the Accused was approached to him but he has specifically stated that, on 15.5.2017 he has lend an amount of Rs.1,50,000/- to the Accused in his shop and at the request of Accused only he has lend the said amount by way of cash. The complainant has also stated that, he has withdrawn an amount of Rs.2 Lakhs 20 C.C.No.10557/2018 J from the bank and out of the said amount has paid an amount of Rs.1,50,000/- to the Accused. The complainant has also stated that, earlier to the present transaction the Accused used to receive small amounts from him about ten times and has repaid the same to him. It is true that, the complainant has admitted that, he has not collected any document from the Accused at the time of lending of the Rs.1,50,000/- to him. It is relevant here to mention that the complainant/PW.1 has specifically denied the suggestion made to him that, as per the Ex.P.14 entry dated: 23.12.2016 the Accused had given a cheque to him and the said cheque bearing No. 300991 was dishonoured and thereafter he has collected blank signed cheque of the Accused from the wife of the Accused. The complainant/pw.1 has also denied the suggestion made to him that, the Accused requested him to return his blank signed cheque but he promised to return the same after securing the said cheque as it was misplaced and later the said cheque has been misused by him by filing this case. Therefore from careful perusal of the entire cross-examination of the complainant nothing has been elicited to discard or 21 C.C.No.10557/2018 J discredit the evidence of the complainant and accept the defence of the Accused that the cheque in question has been given by the Accused as blank signed cheque and same has been misused by him.
19. The complainant in order to substantiate his claim i.e. he is having sufficient source of fund to lend the Accused has produced his original bank pass book which is at Ex.P.14 and the relevant entry dated: 15.5.2017 marked as Ex.P.14(a). On perusal of the Ex.P.14(a) it appears that, the complainant has got withdrawn an amount of Rs.2 Lakh on 15.5.2017 from his bank account. It is relevant here to mention that, the learned counsel for the Accused during the course of cross-examination of the complainant has admitted that, as per Ex.P.14 entry dated: 12.9.2016 an amount of Rs.2,60,000/- has been credited to the account of the complainant. It is also suggested that, the complainant has withdrawn an amount of Rs.2 Lakhs as per the entry dated:
15.5.2017 i.e Ex.P.14(a) from his account but the said amount has been utilized for his own purpose but the said suggestion was denied by the complainant. Hence, the very suggestion made by 22 C.C.No.10557/2018 J the Accused to the complainant suffice to say that, the Accused not only admitted the fact that, the complainant is having sufficient source of fund in his bank account but also admitted that, the complainant has withdrawn an amount of Rs.2 Lakhs on 15.5.2017 from his account as claimed by the complainant but the Accused has not produced any evidence to show that, complainant has utilized the said amount of Rs.2 Lakhs withdrawn by him for his own purpose, such circumstances an inference can be drawn that, the Accused has admitted the lending of loan amount by the complainant to him, therefore on combined reading of the Ex.P.14, 14(a) i.e entry dated: 15.5.2017 and the admissions of the Accused by way of suggestions it can be held that, as on the date of lending of the loan amount the complainant was having sufficient source of income.
20. It is important to note here that, on careful perusal of the entire oral and documentary evidence produced by the complainant i.e Ex.P.1 to P.14 and admitted facts by the Accused as it is already held in the above that, the complainant proved that the cheque in question belongs to the 23 C.C.No.10557/2018 J Accused i.e Ex.P.1 and signature found at Ex.
P.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and it was dishonoured for the reason of "Funds Insufficient"
as per Ex.P.2 and thereafter the legal notice caused by him through RPAD to the Accused was returned to the complainant as not claimed by the Accused , hence it is held that, the notice was also deemed to be served on him but Accused has not given any reply to the legal notice, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initial presumptions are available in favour of the complainant U/s.118a and 139 of the N.I. Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 24 C.C.No.10557/2018 J 139 of N.I.Act are available to the complainant, even a presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused unless and until the said presumptions are rebutted by the Accused, even in the absence of documents produced by the complainant with regard to loan transaction in question.
21. The learned counsel for the defence has also argued that the complainant has admitted in his cross-examination that, he has not disclosed or declared the alleged loan amount lend to the Accused in his income tax returns, hence it goes to show that, the complainant has not lent the alleged loan amount to the Accused and also has no source of income as on the date of alleged lending of loan amount to the Accused, hence the complaint is liable to be dismissed and the alleged amount in question was unaccounted money and that, cannot be enforceable under the law. It is true that, the complainant in his cross-examination admitted that, he has not disclosed about his loan transaction in question in his I.T. Returns, but mere non 25 C.C.No.10557/2018 J declaration of the loan transaction in question in income tax returns could by itself invalidates the transaction or not is to be taken into consideration. In this regard, it is necessary here to refer the decision of our Hon'ble High court of Karnataka reported in 2019(1) Kar. L.R.185 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat in the said case the Hon'ble High Court of Karnataka held that " Negotiable Instruments Act, 1881 - Sections 138 and 139 -Endorsement 'payment stopped by drawer' - The trial court in the instant case, merely considered a suggestion made from the Accused side in the cross- examination of PW-1 that the complainant was an income tax assessee and that he has not declared the alleged loan transaction in his returns and disbelieved the case of the complainant that too, ignoring that legal presumption under section 139 of the N.I. Act, was operating in favour of the complainant- For these reasons, it has to be held that the complainant has beyond reasonable doubt proved the guilt of the Accused punishable under Section 138 of the N.I. Act. As such, the 26 C.C.No.10557/2018 J impugned judgment of acquittal passed by the trial court deserves to be set aside and respondent/Accused is liable to be convicted for the offence punishable under Section 138 of the N.I. Act. Hence in view of the principles of law laid down by the Hon'ble High court of Karnataka in the above referred decisions, in the present case also the complainant admitted that, he has not declared the loan transaction in question in his I.T. Returns but as it is already held that, the complainant has discharged his primary burden by complying the mandatory provisions of Sec.138 of N.I. Act, therefore it is for the accused to rebut the presumption existing infavour of the complainant U/s.139 of Negotiable Instruments Act. Apart from that, the admissions of the complainant with regard to non declaration of loan transaction in I.T. Returns for the concerned year could not by itself draw an adverse inference and to hold that, there was no existence of legally enforceable debt or the presumption as envisaged U/s.139 of N.I.Act is successfully rebutted by the accused. In another decision of Hon'ble Madhya Pradesh High Court decided in C.R.R No.5263/2018 dated: 7.3.2019 27 C.C.No.10557/2018 J in the case of Smt. Ragini Gupta Vs. Piyush Dutt Sharma Gwalior., wherein the Hon'ble High Court held that, mere non filing of income tax return would not automatically dislodge the source of income of the complainant and non payment of income tax is a matter between the revenue and assessee and if the assessee has not disclosed his income in the income tax return, then the income tax department is well within its right to reopen the assessment of income of the assessee and to take action as per provisions of Income Tax Act, however non filing of income tax return by itself would not mean that, the complainant had no source of income and thus no adverse inference can be drawn in this regard only because of absence of income tax return. Hence in view of the principles of law laid down by Hon'ble High Court of Madya Pradesh in the above said decision in the present case also though the complainant has admitted that, he has not disclosed his income and transaction in question in his income tax return that itself would not automatically dislodge the source of income of the complainant. Therefore the admissions of the complainant which are elicited in his cross-examination are not helpful 28 C.C.No.10557/2018 J for the accused to prove his defence that, in view of non disclosure of source of income of the complainant and transaction in question in his income tax returns that itself sufficient to hold that, the complainant has no source of income cannot be acceptable one.
22. It is relevant here to mention that, the Accused in order to rebut the presumption available to the complainant U/s.118 and 139 of N.I. Act himself examined as DW.1, in his evidence has stated that, one Mr.Shankaregowda was doing business of chit, he and complainant are subscriber to the chit run by the said Shankaregowda and they were used to visit the office of Shankaregowda during the year 2016 and used to send subscription amount of the chit to the complainant by way of cheque as such on 23.12.2016 he had given a cheque for Rs.2,600/- towards chit subscription amount in order to give the said cheque to Mr. Shankaregowda but he said cheque was dishonoured as such complainant brought back the said cheque handed over the same to his wife intimating the dishonour of cheque at that time his 29 C.C.No.10557/2018 J wife had given blank signed cheque to the Accused by collecting the said cheque as he was out of station and the said cheque has been misused by the complainant by filing this false complaint.
23. It is relevant here to mention that, in order to substantiate oral evidence of the Accused, has not produced any documentary prove that, one Mr. Shankaregowda was doing chit business and he and complainant are subscribers to the chit which was run by the said Shankaregowda during the year 2016. The Accused has also not produced any documents to show that, he used to send the subscription amount of the chit transaction through the complainant by way of cheque. The Accused has also admitted in his cross-examination that, he has not produced documents to show that, one Shankaregowda was conducting chit business and also admitted that, he is ready to examine the said Shankaregowda on his behalf, but the Accused has not examined the said Shankaregowda to prove his defence that, the said Shankaregowda was running the chit business in the year 2016 and he and the complainant were the subscribers to the chit. Hence 30 C.C.No.10557/2018 J in view of the admitted facts by the Accused and non production of the documentary proof and non examination of the Shankaregowda, the defence of the Accused cannot be acceptable one. It is also important to note here that, the Accused has failed to prove his defence that, on 23.12.2016 he had given a cheque for Rs.2,600/- towards chit subscription amount in order to give the said cheque to one Mr.Shankaregowda but the said cheque was came to be dishonoured, as such the complainant brought back the said cheque and handed over the same to his wife by intimating the dishonour of the cheque and at that time his wife had given blank signed cheque to the Accused by collecting the dishonoured cheque as he was out of station at that time, either by examining his wife or by producing the said dishonoured cheque before the court. The Accused in his cross-examination has admitted that, his wife had given blank signed cheque to the complainant in the year 2016 and there is no hindrance for his wife to write the name of Shankaregowda and amount of Rs.2,600/- on the blank cheque and to hand over the same to the complainant. It is also admitted by the Accused that, 31 C.C.No.10557/2018 J he has not taken any action against the complainant or Shankaregwoda, hence the said admissions of the Accused makes it clear that, if really the wife of the Accused had collected the dishonoured cheque issued for Rs.2,600/- by the Accused from the complainant and given blank signed cheque of the Accused to the complainant, there is no hindrance for the Accused to prove the said defence by examining his wife but no such efforts have been made by the Accused, therefore an adverse inference can be drawn against the Accused that, the Accused for the reasons best known to him has withhold material witness i.e. his wife from proving his alleged defence, in such circumstances also the Accused has miserably failed to prove that how the cheque in dispute ie. Ex.P.1 has entered into the hands of the complainant.
24. In this regard, it is relevant here to refer the decision of Hon'ble Madras High Court reported in AIR 2009 (NOC) 726 MAD in the case of P. Armugam Vs. P. Veluswamy, wherein the Hon'ble High Court held that "Negotiable Instruments Act (26 of 1881) S.138 - Dishonour of cheque -32 C.C.No.10557/2018 J
Accused admits to have signed cheque and handed it over to complainant - Defence raised by accused that said cheque was issued as a blank cheque intended to be a collateral security for an unregistered chit conducted by complainant - However, no evidence has been adduced by Accused to prove that complainant was running an unregistered chit in which Accused joined as a subscribing member - there is no evidence to prove amount of chit or that Accused was a priced subscriber and the blank cheque had been issued to ensure proper payment of future subscriptions - can be held that, cheque was issued for payment of loan obtained by accused from complainant - Accused guilty of offence. In another decision of Hon'ble High Court of Karnataka reported in 2012 (4) KCCR 2634 in the case of Sri. Prakash @ Jnana Prakash Vs. Ms. T.S. Susheela wherein the Hon'ble High Court held that "NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 138 -
Complaint under - Cheque dishonoured for "insufficient funds" - Plea of accused as to non - receipt of demand notice, absence of legal 33 C.C.No.10557/2018 J liability, misuse of documents given as security in an independent chit transaction - Convicted by Trial Court- Confirmed by Appellate Court - Revision against- The plea as to misuse of documents would not be believed due to in action of the accused. It is true that, the facts of the above cases are different from the facts of the present case but the principles of law laid down by the Hon'ble High Courts in the above decisions are aptly applicable to the case on hand since in the present case also the Accused has not proved that, one Shankaregowda was conducting chit business and he and the complainant area subscribers to the chit and he used to send subscription amount of chit through the complainant by way of cheque and his wife had given his blank signed cheque to the Accused towards subscription amount of the chit payable to one Shankaregowda and the complainant has misused the cheque by filing this case against him as alleged in his defence.
25. It is relevant here to mention that, according to the defence of the Accused that, the complainant had collected his blank signed cheque 34 C.C.No.10557/2018 J from his wife by handing over of the dishonoured cheque of the Accused i.e issued for Rs.2,600/- and at that time he was out of station and thereafter his return he has paid the subscription amount by way of cash to the complainant and asked to return back the blank signed cheque but the complainant failed to return the said cheque inspite of his requests and neither handed over to the Mr. Shankaregowda nor returned to him now has misused the cheque by filling the same as per his whims and fancies. But the complainant has not admitted the same during the course of his cross-examination that, therefore in such circumstances, it cannot be held that, complainant has collected the blank signed cheque of the Accused from his wife and has misused the same by filing this case. If really the complainant has collected blank signed cheque from the wife of the accused and thereafter he has misused the said cheque by filing this complaint the Accused atleast he would have taken action in that regard, but the Accused has not made any efforts either to issue notice to the complainant or to one Mr.Shankaregowda or by filing complaint against the complainant or Shankaregowda before the police 35 C.C.No.10557/2018 J or competent authority for non returning of the his signed blank cheque and alleged misuse of the said cheque. In this regard, it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt- cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt- Conviction, Proper." Hence by applying the above principles of law to the present facts of the case in the present 36 C.C.No.10557/2018 J case though the Accused has taken contention that, the complainant had collected the his blank signed cheque from his wife and misused the same by filing this case which was alleged to have been given to handover the same to one Mr.Shankaregowda towards subscription amount of the chit transaction but the said defence has not been proved by the Accused, under such circumstances, it can be held that, the accused has not made any efforts to get return of the cheque in question alleged to have been given to hand over the same to one Mr. Shankaregowda towards chit subscription amount therefore, the said unnatural conduct of the accused in non taking of action leads to draw an adverse inference against the accused that, the cheque in question issued by the accused towards discharge of the liability in question and presumption U/s.139 of N.I.Act would operate against him, as he has admitted the signature and cheque in question is belong to him.
26. The learned counsel for the Accused during the course of argument has taken contention that, the complainant in his cross-examination has 37 C.C.No.10557/2018 J specifically admitted that, the cheque is filled in different handwriting with different ink, hence that itself sufficient to believe that, the cheque in question issued as a security. It is true that, the complainant in his cross-examination admitted that, the cheque is filled in different handwriting with different ink but he nowhere admitted that, the cheque is filled in by him. Even for sake of discussion, if the defence of the Accused is taken into consideration that, he has issued the blank signed cheque, and if it is assumed that, the contents of the subject cheque are not filled in by the Accused, unless and until the Accused has proved his defence by producing cogent and convincible evidence, it cannot be held that, the contents of the cheque have been filled in by the complainant. In this regard, it is a relevant here to refer a decision of Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Apeepal No. 1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it 38 C.C.No.10557/2018 J must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus :
"The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the 39 C.C.No.10557/2018 J transaction nor can invalidate the negotiable instrument issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents.
Hence, in view of the principles of law laid down by 40 C.C.No.10557/2018 J the Hon'ble High Court of Karnataka, the same were aptly applicable to the case on hand and the defence of the Accused cannot be acceptable one as the instrument i.e., cheque in question cannot be rendered unenforceable merely because the contents have been filled by different ink, as it would not render such instrument illegal or inadmissible, the complainant certainly can base action on it.
27. It is also relevant here to refer another decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of presumed fact." In the present case 41 C.C.No.10557/2018 J though the Accused has denied the contents of the cheque in question except his signature but he did not proved his defence or produced any documents or satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I.Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden and complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, " Dishonor of cheque -
42 C.C.No.10557/2018 JStatutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In such circumstances even the complainant is admitted that, cheque is filled in different handwriting with different ink, in such circumstances also in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the said cheque has been issued towards discharge of legally recoverable debt.
28. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do 43 C.C.No.10557/2018 J belong to him and though he has taken the specific defence that, he used to send subscription chit amount through the complainant by way of cheques and the complainant has collected his blank signed cheque from his wife towards payment of subscription chit amount hand over to one Mr. Shankaregowda and thereafter he did not handed over the said cheque either to Mr. Shankaregowda or returned to him and has misused the said cheque by filing this case but the Accused has not proved the said defence by producing cogent and convincible evidence , in such circumstances it can be held that, the Accused has failed to explain and prove how the cheque in question has come to the possession of the complainant, this would also give rise to an adverse inference against him, this proposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa" and in the decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the cheque entered into the hands of complainant".44 C.C.No.10557/2018 J
Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by producing cogent and convincible evidence.
29. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, the complainant has lent an amount of Rs.1,50,000/- to the Accused as a hand loan and in turn the Accused has issued the Ex.P.1 cheque in question in his favour towards discharge of the said debt and thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Funds Insufficient" and thereafter he got issued legal notice to the accused and the said notice was returned as not claimed by the Accused inspite of it, the Accused did not paid the cheque amount, hence the complainant filed the present complaint against the accused. On the other 45 C.C.No.10557/2018 J hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 Cheque. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
30. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following :-
46 C.C.No.10557/2018 JORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.1,65,000/= (Rupees One Lakh and Sixty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.1,60,000/= (Rupees One Lakh and Sixty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.47 C.C.No.10557/2018 J
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 19th February 2020).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri.Raju.V;
2. List of documents exhibited on behalf of the Complainant:-
Ex.P-1 : Original Cheque;
Ex.P-1(a) : Signature of the Accused;
Ex.P.2 : Bank Memo;
Ex.P.3 : Office copy of the Legal Notice;
Ex.P.4 & P.5 : Postal Receipts;
Ex.P.6 & P.7 : Returned Legal Notices;
Ex.P.8 & P.9 : Postal envelopes;
Ex.P.10 & : Postal receipts;
P.11
Ex.P.12 & : Postal acknowledgements;
P.13
Ex.P.14 : Bank pass book
Ex.P.14(a) : Relevant entries dated: 23.12.2016 and
15.5.2017
48 C.C.No.10557/2018 J
3. List of witness/s examined on behalf of the Accused:-
DW.1 : Sri.Ganesh;
4. List of documents exhibited on behalf of the Accused:-
-Nil-
(SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.49 C.C.No.10557/2018 J
19.2.2020 Judgment pronounced in the open court vide separate order.
ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.1,65,000/= (Rupees One Lakh and Sixty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.1,60,000/= (Rupees One Lakh and Sixty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free
50 C.C.No.10557/2018 J
certified copy of this judgment to
the Accused incompliance of
Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.