Bangalore District Court
Abhishwa Chits Private Limited vs Nagesh M on 10 January, 2025
C.C.NO.3160/2020
0
KABC030118262020
Presented on : 14-02-2020
Registered on : 14-02-2020
Decided on : 10-01-2025
Duration : 4 years, 10 months, 25 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Soubhagya.B.Bhusher,
B.A.,LL.B.,LL.M
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 10th DAY OF JANUARY-2025
C.C.NO.3160/2020
Complainant: M/s.Abhishwa Chits Pvt.,Ltd.,
Regd office at No.273/288,
Tejasvi Complex, 3rd Floor,
6th A cross, Banashankari 1st Stage,
2nd Block, Srinivas Nagar,
Bengaluru-560050.
R/by its Foreman/Manger,
Sri.M.N.Nagaraj.
As per the order dated: 09.01.2024
Complainant company
R/by its Manager and Foreman,
Mr.D.Babu S/o Dalleshwaraiah
(By Sri.P.P.Jayakumara.,Adv.,)
V/s
Accused: Mr.Nagesh.M S/o Mahadevaiah,
Age: Major, No.71, Chikkalur,
Ramohalli Post, Kengeri Hobli,
Bengaluru-560060.
(By Sri.Sridhar.N & Ors.,Advs.,)
C.C.NO.3160/2020
1
:JUDGMENT:
This case arises out of the private complaint filed by the complainant against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant is that complainant is a reputed chits company registered under the provisions Companies Act and they are in this business of promoting and conducting chits as per the provisions of Chits Funds Act. Further stated that the accused is a subscriber for a chit No.AB3L/2, ticket No.06 for a chit value of Rs.3,00,000/- payable at Rs.15,000/- for 20 months. Further stated that the accused is participated in the chit auction held on 16.02.2018 and was declared as a prize bidder and he received the prize money of Rs.2,25,000/- after deducting the bid amount and standard deductions.
Further the accused along-with other guarantors executed an on demand promissory note, surety form, guarantee bond and other relevant documents in favour of the complainant company. Further stated that after receiving the prize amount the accused was not regular in payment of the said chit installments, further he paid only 14 installments and thereafter he committed defaulter. Since the accused failed to make the C.C.NO.3160/2020 2 payment, the complainant requested the accused to pay the due but he postponed the date month to month. Further the accused came to the complainant office personally and request to settle the said chit dues and at the same time, he had issued cheque No.933414 dated:20.09.2019 for Rs.1,00,000/- drawn on Syndicate Bank, Ramohalli Branch, Bangalore towards part chit dues and requested not file a suit against him and other guarantors. The complainant had presented the said cheque on 25.10.2019 for encashment through its banker the Karnataka Bank Ltd., Srinagar Branch, Bengaluru. But the said cheque was dishonored as "Funds Insufficient". Thereafter on 31.10.2019 the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque amount within 15 days from the date of receipt of the notice. The said notice was duly served to the accused on 04.11.2019. Inspite of service of the notice the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 02.12.2019.
3. After the complaint was filed, the cognizance of the offence cited therein was taken and it was registered as P.C.R No.1576/2020. Sworn statement of the complainant was recorded. Since there were C.C.NO.3160/2020 3 sufficient materials to proceed against the accused, an order was passed on 14.02.2020 to register the case in Register No.III.
4. Thereafter, summons was issued to the accused and he has appeared before the court through counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant in support of its case, have examined its Managing Director as PW.1 and got marked 14 documents at Ex.P.1 to 14 and closed its side.
6. During the pendency of the case, the learned counsel for the complainant has filed an application for the substitution contending that the complainant originally represented by its Managing Director Sri.M.Nagaraj, due to change of circumstances he would like to substitute Manager/Foreman Sri.D.Babu during the course of trial. Accordingly, on 09.01.2024 the said application was allowed and the complainant have examined the said Manager/Foreman as PW.2 and got marked 03 documents at Ex.P.15 to 17.
7. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was C.C.NO.3160/2020 4 recorded. He has denied the incriminating evidence appearing against him. Inspite of sufficient opportunity the accused not lead defence evidence. Hence, the defence evidence taken as nil.
8. I have heard the arguments on the complainant side and also perused the written argument filed by the learned counsel for the complainant and also perused the material placed on record.
9. Upon hearing the arguments and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-Ex.P.10, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that cheque-Ex.P.10 was dishonored for the reason "Funds Insufficient" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5. What order?
10. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative C.C.NO.3160/2020 5 Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
11. POINT NO.1 AND 2: These points are inter- related to each other and finding given on any one point will bearing on the another. Hence, in order to avoid repetition of facts and evidence, I have taken both points together for common discussion. The case of the complainant is that he was acquainted with the accused. Further the complainant is a chits company registered under the provisions Companies Act and they are in this business of promoting and conducting chits as per the provisions of Chits Funds Act. The accused is a subscriber for a chit bearing No.AB3L/2, ticket No.06 for a chit value of Rs.3,00,000/- payable at Rs.15,000/- for 20 months. Further the accused is participated in the chit auction and was declared as the prize bidder and he received the prize money of Rs.2,25,000/- after deducting the bid amount and standard deductions. The accused along with other guarantor executed an on demand promissory note, surety form, guarantee bond and other relevant documents. After receiving the prize amount the accused was not regular in payment of the said chit installments, further he paid only 14 installments and thereafter he committed defaulter. Since the accused C.C.NO.3160/2020 6 failed to make the payment, the complainant requested the accused to pay the due but the accused postponed the date month to month. Further subsequently, the accused came to the complainant office and request to settle the said chit dues and he had issued cheque in question towards part chit dues and requested not file a suit against him and other guarantors. The complainant had presented the said cheque for encashment through its banker. But the said cheque was dishonored as "Funds Insufficient". Thereafter the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque amount. Inspite of service of the notice the accused neither reply to the notice nor paid the cheque amount. As such, the accused have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
12. In support of the case, the complainant's have examined its Managing Director and Manager/Foreman as P.W.1 and 2 and 17 documents were marked at Ex.P.1 to 17. In the chief examinations P.W.1 and 2 have repeated the contents taken by the complainant in the complaint. Ex.P.1 is the Minutes of Extract. Ex.P.2 is the Authorization. Ex.P.3 is the guarantee agreement. Ex.P.4 is the ondemand promissory note. Ex.P.5 is the voucher. Ex.P.6 is the account statement. Ex.P.7 is the Bank of Baroda account statement of the C.C.NO.3160/2020 7 complainant company for the period 16.03.2018 to 31.03.2018. Ex.P.7(a) is the portion dated: 20.03.2018 for amount transferred to the accused account. Ex.P.8 is the copy of the demand notice issued to surety/guarantor dated: 21.06.2019. Ex.P.9 is the copy of the demand notice issued to the accused dated:
23.08.2019. Ex.P.10 is the cheque issued by the accused in favour of the complainant dated:
20.09.2019 for Rs.1,00,000/-. Ex.P.10(a) is the signature of the accused. Ex.P.11 is the bank memo dated: 25.10.2019 informing the dishonor of the cheque as "Funds Insufficient. Ex.P.12 is the office copy of legal notice dated: 31.10.2019. Ex.P.12(a) is the postal receipt. Ex.P.13 is the track consignment. Ex.P.14 is the complaint. Ex.P.15 is the Minutes of Meeting Extract.
Ex.P.16 is the authorization. Ex.P.17 is the amended complaint.
13. The main defence of the accused is that he had issued two blank cheques in favour of the complainant company for the purpose of security at the time of receiving chit amount. Further the complainant's have misused the one of the blank security cheque and filed this false complaint. Further he contended that he has never admitted regarding repayment of the amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay C.C.NO.3160/2020 8 the amount of Rs.1,00,000/-. Further contended that he has already paid entire amount to the complainant. But the accused in his defence has not disputed Ex.P.10 cheque having been issued by him and same is belongs to his bank account. He does not seriously dispute his signature on the said cheque.
14. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The learned counsel for the complainant has argued that from the evidence placed on record, the fact that the accused is a chit subscriber for a chit No.AB3L/2 ticket No.6, for a chit value of Rs.3,00,000/- which is payable at Rs.15,000/- for 20 months. In an auction the accused was declared as a prize bidder and he has received the prize money of Rs.2,25,000/- after deducting the bid amount and standard deductions. Further argued that the accused had received the prize amount by offering guarantors and also executed several documents in favour of the complainant. Further argued that after receiving the prized amount the accused became a defaulter and he paid only 14 installments. After repeated request made by the complainant, the accused has not paid any amount to the complainant. Further argued that the accused came to the complainant office personally and requested to C.C.NO.3160/2020 9 settle the chit dues and at that time he had issued the cheque-Ex.P.10 as a part payment. He further argued that the accused has not denied Ex.P.10 being his cheque drawn on his account. When the signature is not seriously disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused have failed to elicit anything in the cross examination of P.W.2 to disbelieve the evidence of the said witness. The defence have failed to rebut the presumption under section 139 N.I.Act.
15. He further argued that the accused has failed to produce any believable evidence that he had issued two blank cheques at the time of receiving the chit amount for the purpose of security. Further argued that the complainant has misused the one of the security cheque and presented the same to the bank. Under section 139 of N.I.Act, there is a presumption that the cheque has been issued for discharge of legally enforceable debt/liability. In the present case, the accused has not disputed Ex.P.10 being his cheque drawn on his account. The said presumption is available to the complainant. Further argued that the accused has failed to prove the very fact that the cheque was misused by the complainant and filed this false case against him. Moreover, under section 118 of N.I.Act, there is a presumption that the Negotiable Instruments is drawn on the date, for the amount and in C.C.NO.3160/2020 10 favour of the person as shown in it. It is for the accused to rebut the said presumption. But, in the case on hand no such evidence forthcoming. It was also argued by him that as per the defence by the accused that he had issued two blank cheques to the complainant for the purpose of security. As such, very defence of the accused is not believable. The complainant proved the case.
16. The learned counsel for the complainant has filed written argument. In his argument he has reiterated the facts of the case. Further submits that the accused admit he residing the address mentioned in the complainant cause title and he received the legal notice and court summons and did not take any steps to reply the legal notice. Further the accused admits that disputed cheque belongs to the accused and signature in the cheque also belong to him. Further the accused admits that he executed the documents along with his guarantors. The accused defence before this court is that security cheque misused by the complainant, but he admits the issuance of cheque and signature in the cheque. Further submits that the accused defence before this court is that he paid the entire chit amount, hence question of payment does not arise, but he said he paid 14 installments only, it shows that he is under the wrong impression. Further as per the registered chit agreement he has to pay 20 C.C.NO.3160/2020 11 installments, but he paid only 14 installments, hence his defence it for away from the true fact/real transaction. Further submits that he admit the chit transaction, execution of documents, issuance of cheque, further the complainant complied all the procedure mentioned in 138 of N.I.Act, and further the complainant establish that, said cheque amount is legally recoverable amount, hence this court accept the case of the complainant and convict the accused as per law.
17. Further submits that the accused defence before this court is that he paid the entire amount, it shows that he admits the transaction and he paid the entire chit amount but he paid only 14 installments, hence burden lies on the accused to show that how he paid entire chit amount. In this case he did not produce any documents. It is revealed that the complainant has complied with all the essentials enshrined in section 138 of N.I.Act. The complainant presented the cheque within time for collection. After its dishonor, it also issued legal notice to the accused. Though the legal notice was duly served on the accused, he did not come forward to pay the cheque amount within the stipulated period. When the accused failed to repay the amount, the complainant filed this complaint. Hence, records reveal that the complainant is entitled to the presumption available under Section 118(a) and 139 of C.C.NO.3160/2020 12 the N.I.Act. He relied upon the citation in Rangappa V/s Mohan, reported in 2010 (1) DCR 706. Therefore, in view of the above decision, once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant to the effect that the alleged cheque was issued for discharge of an existing legally enforceable debt or liability against the accused and the burden will shift on the accused to rebut the same. In view of the fact and circumstances and case laws laid down by the higher courts, the complaint is deserved to be allowed. Hence, he prays to allow the complaint.
18. The learned counsel for the accused argued that the accused had issued two blank cheques to the complainant for the purpose of security at the time of receiving the chit amount. Further argued that the accused has paid entire amount to the complainant. Inspite of payment of amount the complainant have misused the one of the blank security cheque and filed false complaint against the accused. Further argued that the accused has never admitted regarding repayment of the said amount and there is no transaction between the complainant and the accused as alleged by the complainant. The accused has specifically denied having agree to repay the amount of Rs.1,00,000/- to the complainant. Further argued that the complainant had collected the blank cheques and C.C.NO.3160/2020 13 documents from the accused for the security purpose. Further argued that the accused has paid the installments, hence he is not liable to pay the amount covered under the cheque. Further argued that the complainant unable to prove that the subject cheque was issued in discharge of duly enforceable debt/liability. The complainant have not come with a clean hands before this court. Indubitably, Ex.P.6, the document relied on by the complainant would indicate that as on 22.09.2019 the accused was due of Rs.91,050/- and the subject dishonored cheque presented on 20.09.2019. As on the date of the presentation of the cheque the accused is not in due of Rs.1,00,000/- to the complainant. The complainant in order to harass the accused fill up the cheque and presented to the bank. Hence, the accused is not liable to pay the cheque amount.
19. It is further argued that the evidence placed before this court clearly shows that the complainant in order to make illegal monetary gain has presented a blank cheque given as security, by filling up the cheque and for the purpose of this case the complainant have created documents and no transaction has been carried out between the complainant and the accused as alleged in the complaint. Hence, the accused has proved that the cheque was issued as security and not for discharge any legally enforceable debt/liability. For C.C.NO.3160/2020 14 an offence under section 138 of N.I.Act to attract, the accused must have issued the cheque to discharge any legally enforceable debt/liability. But in the present case, since there is no due amount from the accused thus there lies no legally enforceable debt. Also the accused has successfully managed to rebut the evidence of the complainant with detailed cross examination, thereby rebutting the presumption under section 139. On the date of presentation of the cheque, the accused was not in due of Rs.1,00,000/-. The complainant has not produced any material documents to show that when the accused defaulted monthly installment before presentation of the cheque. Thus the complainant failed to prove that the accused had issued the subject cheque for a sum of Rs.1,00,000/-. The complainant has misused the cheque obtained from the accused at the time of receiving the chit amount. Therefore, issuing the subject cheque for repayment of the due is far away from truth. The complainant unable to prove the case that the accused had issued the cheque to them in lieu of liability recoverable debt.
20. Further argued that the accused created doubt against the story putforth by the complainant in the complaint. The pharse "debt or other liability"
means a legally enforceable debt or other liability. There was no convincing evidence from the C.C.NO.3160/2020 15 complainant's side as to existence of any existing debt/liability to be discharged by the accused. The accused has discharged the onus that the subject cheque was not received by the complainant for any existing debt/liability. The accused entitled to acquittal. The complainant having received the subject cheque as security and it was misused by filling huge amount. The actual amount payable is less than the dishonored of the cheque amount and the subscriber has paid most of the installments. The alleged balance amount remains unexplained. The complainant has miserably failed to prove the liability to the tune of the amount covered by the cheque. The offence is deemed to be committed if amount covered by the cheque is either in discharge of the liability incurred by the accused either full or in part. It cannot be any way in excess of the liability incurred. Therefore, the section 138 of N.I.Act cannot be said to be applicable. Hence, he prays to acquit the accused.
21. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed he had issued the cheque- Ex.P.10 in favour of the complainant. It is not disputed that the complainant is a private limited chits company and the accused was a subscriber and he had issued the cheque in favour of the complainant. Whereas, the C.C.NO.3160/2020 16 accused has contended that the cheque was given for security measure at the time of receiving the chit amount. When he had given the cheque, which was blank. The accused has specifically denied having debt/liability had issued the cheque on 20.09.2019 towards discharge of any debt/liability. He contends that the blank cheques given by him for the purpose of security as was misused by the complainant and a false complaint was filed.
22. In order to attract the offence of the section 138 of N.I.Act, the main ingredients of the existence of the legally enforceable debt/liability, for which the cheque drawn on the account of the accused was given for discharge of the same, are to be proved. The complainant in order to prove its case, have examined its Managing Director and Manager and Foreman as PW.1 and 2 and 17 documents were marked at Ex.P.1 to 17. In chief examinations P.W.1 and 2 have repeated the averments made by the complainant in the complaint. In the present case, the accused has not disputed Ex.P.10 being his cheque drawn on his account. The said presumption is available to the complainant.
23. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is opinion to the accused C.C.NO.3160/2020 17 to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand also the accused has disputed the existence of legally enforceable debt/liability, for which cheque was issued. In order to prove his defence, the accused has failed to produce any oral as well as documentary evidence before this court.
24. Since, the presumption under section 139 of N.I.Act is a rebuttable presumption the accused is firstly required to produce some probable evidence to rebut the same. Though in the criminal cases, the standard of the proof required for the accused is not so strict as required for the complainant to prove the case. Further the accused has to produce some probable evidence, which creates doubt about the existence of legally enforceable debt/liability. In the present case, as per the defence taken by the accused is that the cheque was given for security. Further he has already paid entire amount to the complainant. Except, the said defence, he has not produced any materials to prove such defence. If he had given the blank cheques to the complainant for the purpose of security, what prevented the accused to file the complaint immediately after the alleged illegal act made by the complainant. Further what prevented the accused to file the complaint against the complainant for misusing of the said cheque. On which date he came to knew about the C.C.NO.3160/2020 18 alleged illegal act of the complainant, he did not whisper about on what date he came to know the alleged cheque illegally misused by the complainant. Admittedly the accused is having knowledge of the financial transaction, why he has given the blank cheques to the complainant without anticipating the consequence is not explained by him. So also, he has not stated anything as to what steps he took to receive back the blank cheques. Moreover, immediately after the alleged blank cheque misused by the complainant he has not lodge complaint before concerned police station. No steps have been taken to receive back the blank cheques, after he came to know about the same. Further on perusal of Ex.P.3 it reveals that the accused was a chit subscriber to the chit group No.AB3L/2, ticket No.6. Further on perusal of Ex.P.4 it reveals that the accused has received prize amount of Rs.2,25,000/- from the complainant. But the accused has not denied the same. In order to prove his defence he has not produce any documents before this court.
25. Once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt or liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that C.C.NO.3160/2020 19 the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case, though, it is a rebuttable presumption. Of course, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.10 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case.
26. Further the accused has taken defence that at the time of receiving the chit amount, he had issued two blank cheques to the complainant for the purpose of security. Further taken the defence that he has already paid entire amount to the complainant. The complainant have misused the one of the security cheque and filed false case. Hence, an offence punishable under section 138 of N.I.Act is not attracted. In this regard once issuance of cheque and signature are admitted, the statutory presumptions would arise under sections 138 of N.I.Act that the cheque was issued by the drawer for legally payable debt/liability C.C.NO.3160/2020 20 and for valid consideration. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored which attract 138 of N.I.Act. The principle of law laid-down in the above decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose, but without producing any documents, then the accused has to pay the cheque amount when it is presented for encashment which is legally recoverable debt.
27. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it C.C.NO.3160/2020 21 will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
28. In the case of Kalemani Tex and another V/s. P.Balasubramanian, reported in (2021) 5 SCC 283, the Hon'ble Supreme Court has observed that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
29. Applying the above said principles to the present case and before considering the point whether the accused succeeded to rebut the presumptions and to establish his defence to the extent of probabilities, it is just and necessary to accumulate undisputed facts in this case.
30. It is not in dispute that bounced cheque belongs to the bank account of the accused. It is also not in dispute that signature appearing on the bounced cheque is the signature of the accused. It is also not in C.C.NO.3160/2020 22 dispute that the cheque presented by the complainant came to be dishonored by the banker of the accused for the reason stated in the dishonor memo. To consider whether the accused succeeded to rebut the presumption and established the defence to the extent of probabilities, the accused has not produced any documents in this regard.
31. In the defence there is no ill-will between the complainant and the accused. Hence, misuse of the security cheque and filing a false case is not possible. The accused admittedly having knowledge of business. It is implies, he is conversant with financial transaction. If the complainant misused the said cheque and had not return the same, inspite of collecting cheques leaves from him, as a prudent man, the accused should have inquired with the complainant and demanded to return those cheques. No ordinary prudent man would keep quite in such circumstances, without taking any steps. The conduct of the accused is very unusual, because he did not take any legal action against the complainant, even after filing of the complaint based on Ex.P.10. Further he could have issued a notice to his banker to stop payment or legal notice to the complainant or he could have given complaint to the police station immediately. No such steps were taken by the accused. He simply makes a bald allegation of misuse of security cheque against the complainant.
C.C.NO.3160/2020 23
32. Moreover, the complainant have got issued a legal notice to the accused by registered through its counsel calling upon him to make repayment to the complainant. Before a person is held to be guilty of an offence punishable under section 138 of N.I.Act, the complainant have to prove the compliance of the requirement under section 138 of N.I.Act. It is not in dispute that Ex.P.10 being his cheque drawn on account of the accused. In view of the above discussions, it is also held to be proved that it was drawn for discharge of legally enforceable debt/liability. From the evidence of P.W.1 and 2 and also cheque return memo-Ex.P.11 it is established that the cheque was dishonor for the reasons "Funds Insufficient''. A legal notice being issued as per Ex.P.12 within one month from the date of dishonor of the cheque is also not in dispute. In the case on hand the accused has not seriously disputed regarding notice send by the complainant on his address. Ex.P.12(a) and 13 are the postal receipt and track consignment. On perusal of the Ex.P.13 it reveals that item delivery confirmed. But the accused had never asserted in his cross examination that the address mentioned in those documents is not his address. The presumption under section 114 of the Evidence Act and section 27 of the General Clauses Act is that the notice was deemed to have been served. In the context of section 138 of the Act, makes it clear C.C.NO.3160/2020 24 that if once the sender dispatches the notice by post with correct address written the notice is deemed to have been served by the sender. But, the accused failed to reply the notice, immediately after service of the demand notice. Thereby, he could have asserted his defence at an earliest available opportunity. In the case on hand the notice is sent to the accused at his address. When the accused has not seriously disputed, the notice sent to the correct address is sufficient compliance under section 138 of N.I.Act. Therefore, there is sufficient proof of due service of the legal notice.
33. It is not the contention of the accused that thereafter he has paid the cheque amount within stipulated time of 15 days on receiving the notice. Therefore, in the case on hand on perusal of the evidence placed on record, all the essential ingredients under section 138 N.I.Act, have been complied with. As the accused has not paid the cheque amount within stipulated period and failed to give reply to the notice, as such the accused have committed an offence punishable under section 138 of Negotiable Instruments Act. The present complaint is filed within the period of one month after the accused failed to repay the cheque amount. Even he did not whisper anything about the defence while his plea was recorded under section 251 of Cr.P.C. Except he had issued the C.C.NO.3160/2020 25 blank cheque to the complainant and the complainant have misused the same. In judgment of the Hon'ble Supreme Court in Indian Bank Association V/s Union of India and others, reported in 2010 (5) SCC 590, it is clear that while recording the plea under section 251 of Cr.P.C., it becomes the duty of the accused to state whether he has any defence to make or he pleads guilty. Thus, unlike under section 240 of Cr.P.C., the accused has no option under section 251 of Cr.P.C., just to deny the allegations made against him. If he is not willing to plead guilty, he must explain what are the defences he wants to take. As such, it has to be considered, whatever defence raised by the accused during the trial are all after thought, just to get ride of statutory burden cast on him.
34. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported in 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act, cannot be discharged. The principle of law laid-down in the above decisions are C.C.NO.3160/2020 26 applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
35. As per the version of the accused is that he has nowhere denied transaction. The accused himself has admitted that he is the holder of alleged cheque. It is sufficient hold that he has issued the cheque-Ex.P.10 and even after he has not repaid the cheque amount the getting of receipt of notice. However, in any manner as the complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. In case of dishonor of the cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 and 2 have established the case of the complainant that the accused had issued the cheque-Ex.P.10 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. In the said circumstances, the complainant is not at all required to produce any material as to the financial transaction between the complainant and the accused, since the initial presumption is still available, when there is no rebuttal evidence.
36. PW.1 and 2 in their evidence have specifically C.C.NO.3160/2020 27 deposed that the accused is a subscriber for a chit bearing No.AB3L/2, ticket No.6 for a chit value of Rs.3,00,000/- payable at Rs.15,000/- for 20 months. In an auction of chit held on 16.02.2018 the accused was declared as the prize bidder and he received money of Rs.2,25,000/- after deducting the bid amount and standard deduction. Further deposed that the accused and guarantors have executed necessary documents. After receiving the chit amount the accused became a defaulter in payment of chit installments and he paid only 14 installments and in order to part chit dues he had issued the cheque in question. The accused has failed to get the tender. Accordingly, the complainant became entitled to receive the said amount from the accused, this is not disputed by the accused. So also it is not in disputed that the complainant and the accused are known to each other, some point of period. Further the accused has failed to rebut the presumption under section 139 of N.I.Act, non furnishing of details of financial transaction and other documents no consequences to disbelieve the case of the complainant. With these reasons, I answer point No.1 and 2 in the Affirmative.
37. POINT NO.3 AND 4: In order to avoid repetition of facts, these points are taken together for common discussion. Before a person is held to have committed an offence punishable under section 138 of C.C.NO.3160/2020 28 N.I.Act, the complainant have to prove all the requirements of section 138 of N.I.Act. Ex.P.10 being his cheque drawn on the account of the accused is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after service of the notice. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with. In this case if the accused has issued two blank cheques in favour of the complainant for the purpose of security and why he has not produced any documents. After service of notice he has not paid the said amount and failed to give reply to the said notice. Hence, the present complaint came to be filed before the court on 02.12.2019 within the period of one month from the date of cause of action. While discussing the point No.1 and 2, this court has already observed that the complainant have proved that the cheque was issued for discharge of legally enforceable liability/debt and in view of the mandatory requirements under section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. With these reasons, I answer point No.3 C.C.NO.3160/2020 29 and 4 in the Affirmative.
38. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following;
:ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.1,00,000/- (Rupees one lakh only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.90,000/- (Rupees ninety thousand only) shall be paid to the complainant as compensation as per C.C.NO.3160/2020 30 Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 10 th day of January 2025) (Soubhagya.B.Bhusher) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.M.Nagaraj. PW.2 : Sri.D.Babu.
List of documents marked on behalf of the complainant:
Ex.P.1 : Minutes of Extract.
Ex.P.2 : Authorization.
Ex.P.3 : Guarantee agreement.
Ex.P.4 : Ondemand promissory note.
Ex.P.5 : Voucher.
Ex.P.6 : Account statement.
Ex.P.7 : Bank of Baroda account statement.
Ex.P.7(a) : Potion of the amount transferred.
Ex.P.8 & 9 : Office copies of the demand notices.
Ex.P.10 : Cheque.
Ex.P.10(a) : Signature of the accused.
Ex.P.11 : Bank endorsement.
Ex.P.12 : Office copy of legal notice.
Ex.P.12(a) : Postal receipt.
Ex.P.13 : Track consignment.
Ex.P.14 : Complaint.
C.C.NO.3160/2020
31
Ex.P.15 : Minutes of meeting extract.
Ex.P.16 : Authorization.
Ex.P.17 : Amended complaint.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
-Nil-
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
C.C.NO.3160/2020 32 10.01.2025 (Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bond executed by the accused hereby stands canceled.
The accused is sentence to pay fine of Rs.1,00,000/- (Rupees one lakh only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.90,000/- (Rupees ninety thousand only) shall be paid to the complainant as compensation as per Section 357(1)
(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.