Bangalore District Court
Limited vs Mr.A.N.Reddy S/O Muniappa Reddy on 9 September, 2021
BEFORE THE COURT OF XXIV ADDITIONAL SMALL
CAUSES JUDGE AND THE MOTOR ACCIDENT CLAIMS
TRIBUNAL & A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 9th DAY OF SEPTEMBER 2021
PRESENT: SRI.R.MAHESHA. B.A.,L, LLB.,
XXIV ADDL. SCJ &
ACMM & MEMBER - MACT
BENGALURU.
1. Sl. No. of the Case CC.No.514 of 2018
2. The date of 20-12-2017
commencement of
evidence
3. The date of closing 28-07-2021
evidence
4. Name of the M/s Confident Projects India private
Complainant limited, Confident propus, # 6, Langford
town, Hosur main road, Bangalore-560
0025, represented herein by its Manager
Mr.Joju Kochappan
(By Sri.R.R.-Advocate)
5. Name of the Mr.Ashwath Narayana Reddy @
Accused Mr.A.N.Reddy S/o Muniappa Reddy,
Aged about 57 years, House No.80,
Poojama compound, Halanayakanna halli,
Varthur hobli, Malar Talk,
Bangalore East Taluk.
(By Sri.H.K.H.C.-Advocate)
6. The offence U/s.138 of the Negotiable Instruments Act
complained of
7. Opinion of the Accused found guilty
judge
2 C.C.No.514 of 2018
SCCH-26
JUDGMENT
The complainant filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the accused has committed the offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short for N.I.Act)
2. The brief facts of the complainant case is as under:
The accused upon collecting earnest amount from complainant, as advance sale consideration did not execute any sale deed in favour of complainant, inspite of waiting for long period by complainant. Since accused did not come forward to execute sale deed in favour of complainant, accused has committed breach by not executing sale deed in favour of complainant. That accused in order to compensate the said breach and the said accused in order to refund said earnest amount with penalty that is payable to complainant i.e., in order to discharge accused liability, by collecting back the original absolute sale agreement, the accused issued cheque bearing No.622033 drawn on Canara Bank, 3 C.C.No.514 of 2018 SCCH-26 Doddakannahally Bangalore-560 035, for Rs.5,00,00,000/- and requested complainant to present said cheque to his banker. That the complainant presented the said cheque to his bank, but the said cheque returned has been dishonoured and received dishonored cheque returned memo endorsement dated 10-10-2017. That the complainant issued legal notice dated 9-11-2017 to the accused, but the accused has not bothered to pay the said amount to the complainant. Hence filed this complaint.
3. After filing of this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded. Thereafter cognizance was taken and registered in Crl.Reg.No.III and summons issued to the accused. In response of summons, accused appeared through his counsel and got enlarged him on bail. The plea was recorded, read over and explained to the accused he pleaded not guilty and claims to be tried. Hence the case is posted for complainant evidence.
4 C.C.No.514 of 2018
SCCH-26
4. In order to establish its case, Manager of the complainant company by name Joju Kochappan examined himself as PW-1 and got marked 1 to 12 and closed his side. One Dr.Roy C.J.-Chairman of the complainant company got examined himself as PW-2.
5. Heard oral argument from complainant and the accused counsel. Both have filed written argument and both have produced decisions of Hon'ble Apex court.
6. The learned counsel for complainant has relied and placed following decisions:-
1. Oil and natural gas corporation Ltd., Vs SAW pipes limited. Civil Appeal No.7419/2001 Supreme Court of India.
2. Construction and design services Vs Delhi Development authority. Civil Appeal No.1440/2015 & 1441/2015 Supreme Court of India.
3. Sumeti vij Vs Paramount tech Fab industries Criminal Appeal No.292 and 293/2021 Supreme Court of India.
4. APS Forex services pvt., Ltd., Vs Shakthi International fashion linkers and others. Criminal Appeal No.271 and 272/2020 Supreme Court of India.
5. T.Vashanth Kumar Vs Vijayakumari Criminal Appeal No.728/2015 Supreme Court of India.5 C.C.No.514 of 2018
SCCH-26
7. The learned advocate for accused has relied and placed following citation:-
1. Basalingappa Vs Mudibasappa Crl.Appeal No.636/2019 Supreme Court of India.
2. Bulland Leasing & Finance Pvt., Ltd. Vs Manoj Singh Nirman (CC No.1660/2017)
3. Sri.H.Manjunatha Vs A.M.Basavaraju ILR 2014 KAR 6572 High Court of Karnataka
4. John K.Abraham Vs Simon C.Abraham and another Crl.Appeal No.2043/2013 Supreme Court of India.
5. K.Subramani Vs Damodara Naidu Crl.Appeal No.2402/2014 Supreme Court of India.
6. Ananth Bondre Vs Alfred David Crl.Mis Appeal No.54/2013 Bombay High Court at Panaji
8. On perusal of entire material available on record and also on hearing the arguments with the rulings relied the points that would arise for consideration are:
POINTS
1. Whether the complainant proves that the accused had issued cheques in question in discharge of the legally recoverable debt as contended by him?6 C.C.No.514 of 2018
SCCH-26
2. Whether complainant proves that the accused has committed the offence punishable under Sec.138 of NI Act?
3. Whether the complainant is entitled for the relief as prayed in the complaint?
4. What order?
9. My answer to the above points is as follows :-
Point No.1 to 3 : In the Affirmative Point No.4 : As per final order for the following:-
REASONS
10. POINT NO.1 to 3 :- Since these points are interlinked and to avoid repetition they are taken together for common discussion. Before peeping the disputed facts it is appropriate to refer the undisputed facts, which can be gathered from the material placed before this court. On going through the rival contention of the parties, oral and documentary evidence, it is clear that the complainant company is registered company under provisions of companies Act and doing business in land development and constructions. The accused is land broker, he received 7 C.C.No.514 of 2018 SCCH-26 Rs.50,00,000/- each in two occasions from complainant company as advance sale consideration. The accused told that he would convince the farmers and see that their properties and registered in favour of complainant company. The accused had entered MOU and agreed to get 38 acres of land in Chambanahalli village wherein accused had agreed , he identified the land and he registered 10 acres of land, the price agreed was Rs.34,00,000/- per acre. The disputed cheque belongs to accused and bear signature was also belongs to accused. The disputed cheque presented by the complainant for recovery of Rs.5,00,00,000/- from the accused. The complainant paid to accused of Rs.1,00,00,000/- .The disputed cheque on presentation got dishonoured for the reason of insufficient of funds. The statutory notice has been sent to accused, same was duly served. The accused gave reply to the said statutory notice. The accused denied entire allegations of complaint averments, he did not choose to lead any rebuttal evidence in his favour. The complainant company represented by its Manager and authorized signatory 8 C.C.No.514 of 2018 SCCH-26 as PW-1 and complainant company examined its Chairman as PW-2.
11. With above admitted facts, now the facts in issue are analyzed, as already stated the accused has denied the entire case of the complainant company as to commission of the offence punishable under section 138 of NI Act. While recording their plea for the said offence and also accused has denied the incriminating circumstance found in the evidence of the complainant. At the time of recording of his statement under section 313 of Cr.P.C., The accused has mainly denied the claim of complainant company, on going through the cross-examination of PW1, it is clear that in addition to the total denial of the case of the complainant company, the accused has specifically contended that the disputed cheque written as for recovery of Rs.5 crore, but as per the case of complainant, they gave amount of Rs.1 crore. The complainant company without seeing the land and without verifying the land documents i.e., who is the owner of land, which land, which survey number and what is the schedule 9 C.C.No.514 of 2018 SCCH-26 property, they gave Rs.1 crore through cash. The memorandum of understanding took place in the year 2008 in white paper. Ex-P9 to 12 produced before this court after lapse of 2 ½ years later. If really Ex-P9 to 12 taken place between accused and complainant company they are definitely produced at the time of filing the PCR. The said documents created for the purpose of this case after lapse of 2 ½ years. There is no witness to Ex-P10, they stated in Ex-P10, the amount was paid on 26-08-2005 and 23-03-2007 of Rs.50,00,000/- each paid to accused and his wife and his son. If they really the complainant has given Rs.1 crore to above said persons they must took the signature of the above persons. The said document created for the purpose of this case, there are no independent or complaint witness to Ex- P10. The chairman of complainant company has not aware of Ex-P1 and he has no personal knowledge of about Ex-P1. PW- 1 is created this false case against accused with an intention to get the compensation. There is no any explanation about Rs.4 crore had been paid to accused. There was no transaction between accused and complainant company as 10 C.C.No.514 of 2018 SCCH-26 alleged in the complaint. Therefore, on the above objections the accused seeking the present complaint is not maintainable and liable to be dismissed in limine.
12. It is needless to say that the proceeding "under section 138 of NI Act is an exception to the general principle that the accused is presumed to be innocent until the guilty is proved beyond all reasonable doubt". In the proceedings initiated under section 138 of NI Act, proof beyond all reasonable doubt is subjected to presumption envisaged under section 139 of NI Act. Once the requirement of Sec.138 of NI Act is fulfilled, then it has to be presumed that the cheque was issued for discharge of the legally recoverable debt or liability. The presumption envisaged under Sec.139 of NI Act is mandatory in nature and it has to be raised in all the cases on fulfillment of the requirements of Sec.138 of NI Act. In the ruling rendered by Hon'ble Apex Court in the case of Rangappa V/s Mohan reported in AIR 2010 SC (1898) by relying on several rulings rendered by the Hon'ble Apex Court including the case of Krishnajanardhana Bhat V/s Dattareya 11 C.C.No.514 of 2018 SCCH-26 G. Hegde reported in AIR 2008 SC (1325) it was held that "existence of legally recoverable debt or liability is a matter of presumption under section 139 of NI Act". The Hon'ble Apex Court disapproved the principle laid down in Krishnajanardhana Bhat case that "initial burden of proving existence of the liability lies upon the complainant". In the case of Sri.B.H.Lakshmi Naryana V/s Smt. Girijamma reported in 2010(4) KCCR 2637 it is held that "the presumption that the cheque was issued for legally recoverable debt is to be presumed". Further the Hon'ble Apex Court in Crl. Appeal No.803/2018 Krishna Rao V/s Shankare Gowda reported in 2018(7) SCJ 300 reiterated the above principle further as provided under Sec.118 it is to be presumed that the cheque in question was issued for consideration on the date found therein.
13. In the light of the rival contention of the parties at the outset it is to be determined as to whether the complainant had complied with all the requirements of Sec.138 of NI Act as contended. In order to prove the case of the complainant, One 12 C.C.No.514 of 2018 SCCH-26 Joju Kochappan-Manager of complainant company has examined as PW-1 and he reiterated the complaint averments in his examination-in-chief by way of affidavit and got documents marked as Ex-P1 to 12 and one Dr.Roy C.J.- Chairman of the complainant company examined as PW-2. On the other hand, the accused did not choose to adduce evidence and not produced any documents. In addition to that the complainant has produced Ex-P1-Cheque dt.27-09-2017 for a sum of Rs.5 crores, Ex-P2-endorsement dt.9-10-2017 return reason "Funds Insufficient", Ex-P3- legal notice dt.9- 11-2017, Ex-P4-psotal track consignment report, Ex-P5- Unopened postal cover it was returned on 10-11-2017 as Insufficient address, Ex-P6-Postal acknowledgment, it did nto contain signature of receiver or addressee, Ex-P7-Reply notice dt.29-11-2017, Ex-P8-Borad of resolution dt.21-4-2009 by the complainant company, Ex-P9-memorandum of understanding dt.26-08-2005, it contain signature of accused and chairman of complainant company-one Nagaraj, Ex-P10-Settlement agreement dt.28-01-2009 entered between complainant company and accused, Ex-P11-Voucher dt.23-03-2007, it had 13 C.C.No.514 of 2018 SCCH-26 accused signature and accused received Rs.50,00,000/- each in further to MOU dt.26-08-2005 and Ex-P12-One document dt.23-03-2007, it bears signatures of accused and Chairman of complainant company.
14. In the light of rival contention of the parties, at the outset it is to be determined as to whether the complainant had complied with all the requirements of Section 138 of NI Act as contended. In order to prove the case, the complainant company Manager Mr.Joju authorized person reiterated the complaint averments in his sworn statement by way of affidavit which itself is treated as examination in chief in view of the decision of Hon'ble Apex court reported in 2014(A) SCC 590 Indian Bank Association and others Vs Union of India and others (WP civil No.18/2013. In addition to that, the complainant has produced Ex-P1-Cheque dt.27-09-2017 for a sum of Rs.5 crores, Ex-P2-endorsement dt.9-10-2017 return reason "Funds Insufficient", Ex-P3- legal notice dt.9- 11-2017, Ex-P4-psotal track consignment report, Ex-P5- Unopened postal cover it was returned on 10-11-2017 as 14 C.C.No.514 of 2018 SCCH-26 Insufficient address, Ex-P6-Postal acknowledgment, it did nto contain signature of receiver or addressee, Ex-P7-Reply notice dt.29-11-2017, Ex-P8-Borad of resolution dt.21-4-2009 by the complainant company, Ex-P9-memorandum of understanding dt.26-08-2005, it contain signature of accused and chairman of complainant company-one Nagaraj, Ex-P10-Settlement agreement dt.28-01-2009 entered between complainant company and accused, Ex-P11-Voucher dt.23-03-2007, it had accused signature and accused received Rs.50,00,000/- each in further to MOU dt.26-08-2005 and Ex-P12-One document dt.23-03-2007, it bears signatures of accused and Chairman of complainant company. So it is clear that, the complainant complied statutory requirements of presenting cheque, issuing notice and presenting complaint well in time.
13. On conjoint reading of the entire oral and documentary evidence, they remains no doubt that the complainant company had complied with all the requirements of the Sec.138 of NI Act. This being the fact, as discussed earlier in the light of the dictum of the Hon'ble Apex Court, it goes without saying that the presumption available under 15 C.C.No.514 of 2018 SCCH-26 section 138 of NI Act is required to be drawn on some presume that the accused had issued the cheque as per Ex.P1 towards discharge of legally recoverable debt. It is also presumed that the cheque was issued for consideration on the date as mentioned therein.
15. It is well settled principle of law through catena of decisions that though the statutory presumptions available under Sec.118 and 139 of NI Act are mandatory in nature, they are the rebuttal one. It is needless to say that when the complainant proves the requirement of Sec.138 of NI Act the onus of proof shifts and lies on the shoulder of the accused to rebut the presumptions available in favour of the complainant. It is the accused who has to rebut the presumptions with all preponderance of probability with clear, cogent and convincing evidence though, not beyond all reasonable doubt. The accused has to make out probable defence by producing convincing acceptable evidence and thereafter only burden shifts on the shoulder of the complainant. It is also settled law that to rebut the presumption, the accused can also rely upon presumptions available under the Evidence Act. It is also set 16 C.C.No.514 of 2018 SCCH-26 in rest that in order to rebut the presumption it is not imperative on the part of the accused to step into the witness box and he may discharge his burden on the basis of the Acts elicited in the cross-examination of the complainant. It is also equally true that, if the accused places such evidence so as to disbelieve the case of the complainant, then the presumptions stand rebutted. This view is also supported with the decisions of the Hon'ble Apex Court reported in 2006(3) SCC (CRL) 30 Tamilnadu Marcantile Bank Limited V/s M/s Subbaiah Gas Agency and others. ILR 2009 (2) 1633 Kumar Exports V/s Sharma Carpets, AIR 2008 SCC 1325 Krishnajanardhana V/s Dattareya G. Hegde, 2013 SCR (SAR) CRI 373 Vijay V/s Lakshman & another and AIR 2010 SC 1898 Rangappa V/s Mohan and Crl. Appeal No.230 & 231/2019 Bir Singh V/s Mukesh Kumar. Now the question that would arise is whether the accused has rebutted the statutory presumptions available in favour of the complainant.
16. With the evidence of PW-1, the contents of documents are analyzed, it is forthcoming that, according to 17 C.C.No.514 of 2018 SCCH-26 say of complainant that PW-1 was a Manager, he stated in his evidence that there was a sale agreement for purchase of land, the accused collected earnest amount from the complainant, the accused has told that he will convince formers and see that sale deed is executed, in this regard MOU was entered and Rs.50 lakhs has been received by the accused. The agreement was to purchase a property for Rs.34 lakhs per acre. On 23-3-2007, the accused received a further sum of Rs.50 lakhs and voucher was signed, totally accused has been received Rs.1 crore from complainant. The accused could not organize the sale on 28-1-2009, settlement agreement was arrived wherein it was agreed that within five years there from i.e., 27-1-2014 sale would be completed failing which he would paying Rs.5 crore, he gave cheque after repeated follow-ups in 2017, to compensate the breach of sale agreement, cheque in question has been issued . In support of the complainant case, PW-2 examined, he deposed in his evidence that he had complete aware of the case. The accused had promise to get 38 acres of land at Chambanahalli village, starting from the main road at the rate of Rs.34 lakhs per acre and further he 18 C.C.No.514 of 2018 SCCH-26 deposed with the consonance of PW-1 and he also reiterated entire complaint averments. Both have subjected cross examination by the accused. During cross examination, the accused gave suggestion that Ex-P9 was executed on white paper and second time, Rs.5 lakh was paid, document taken on white paper as per Ex-P12 by the suggestion of accused. He clearly admitted Rs.1 crore is received from complainant company by the accused. The accused himself suggested to PW-1 that without looking into the documents Rs.1 crore is paid, by this, receipt of Rs.1 crore by the accused is not in dispute. PW-1 stated during cross examination that amount was paid in the presence of M.D. Hence M.D. was examined as PW-2, he also spoken regarding payment of money as well as execution of documents. PW-2 stated before this court during cross examination on the date of execution of Ex-P9, Rs.50 lakhs was paid and on the date of Ex-P11 Rs.50 lakhs was paid and accused had signed on Ex-P9 and 11. The accused assured on that day, he would show the land. Further PW-2 spoken about settlement agreement which is entered between M.D. and accused. During cross examination 19 C.C.No.514 of 2018 SCCH-26 of PW-2, says that there was an agreement of sale which was cancelled on the date of MOU and the original agreement is taken back by the accused. There is suggestion by accused, accused did not received Rs.50 lakhs, but during cross of PW- 1, the accused himself suggested without seeing the land, property, documents of property, without getting opinion from legal experts of complainant company, they paid Rs.1 crore by way of cash.
17. With the above said complaint averments, the defence of the accused is analyzed, one cannot totally ruled out accused defence. Now the complainant company paid Rs.1 crore to accused in two occasions and now complainant company claimed Rs.5 crore from accused as the complainant company incurred loss and Rs.1 crore fetched amount of Rs.4 crores as put by the complainant is looked into. On perusal of documents of complainant, it is forthcoming that the complainant company complied mandatory legal requirements of Section 138 and they produced Ex-P1 to 6, the accused replied as per Ex-P7. On perusal of Ex-P7, he stated denying the averments of Ex-P3 (statutory notice issued by the 20 C.C.No.514 of 2018 SCCH-26 complainant) and he calling alleged sale agreement which is alleged as entered between accused and complainant company. During trial, the complainant company has produced Ex-P9 and 10. On careful perusal of the same, it is forthcoming that on 26-08-2005 MOU had been entered for the purchase of 38 acres of land at Chambenahalli village stating from main road facing will be minimum of 120 feet, Surjapur road, an advance of Rs.50 lakhs is paid to accused and additional Rs.50 lakhs would be paid for registration of 10 acres of land. The said document annexed signatures of accused, M.D. of complainant company and one Nagaraju. It was questioned during cross examination by accused that PW- 1 and 2 have stated that Ex-P9 prepared in the presence of one Nagaraju. At the time of preparing Ex-P9, accused and PW-2 and Nagaraj present on 26-08-2005, the complainant company paid Rs.50 lakhs to accused. Ex-P9 appears as sound document. On perusal of Ex-P10, it is forthcoming that the settlement agreement was entered on 28-1-2009 between accused and complainant company, it is signed by the authorized signatory i.e., PW-1. The said Ex-P1 subscribed 21 C.C.No.514 of 2018 SCCH-26 signature of accused and PW-1. On perusal of contents, it is stated in Ex-P10 that " the company in good faith and being in the long term relationship of the company with the executor entrusted the executor to acquire 38 acres of land in Chambanahalli village. Since this was a land transaction and to be done with farmers and since most farmers did not have a bank A/c. The company withdrew legally money from its bank A/c and paid the executor on two different dates Rs.100 crores ". Further it can be seen in Ex-P10 that " on this day the executor has informed the company is inability to complete the transaction and showed strong confidence to complete as below he wanted some more time, since there was a residential conversion ban due to the new CDP being made and requested that he will complete same within 60 months (non negotiable completion by 27-1-2014)" . Further it can be seen from Ex- P10 that it is important to note terms and conditions arrived by the parties is as follows:-
" In case the executor further defaults after the new extended 60 months which is 27-1-2014, then the 22 C.C.No.514 of 2018 SCCH-26 company and executor have agreed formula wherein it is agreed irrevocably and non-negotiable the executor would return Rs.5 crore in cheque. The company had firmly insisted on returning the advance Rs.1 crore paid on 26- 08-2005 and 23-3-2007, but the executor firmly requested for the extension upto 27-1-2014. In case of default, the executor would issue a cheque for an amount of Rs.5 crores".
18. Further both parties stated calculation in Ex-P10 "
the market purchase land price of Chambenahalli village agreed by the company and executor is Rs.34 lakhs when advance was paid on 26-08-2005. So the total Rs.1 crore advance paid by company would have fetched the company an extent of 2 acres 38 guntas. The estimated and non negotiably agreed market price in 2014 ( 60 months completion year) by company and executor which is again suggested by executor is Rs.1,7 crore per acre. The executor and company non negotiably agrees not to contest this price either themselves or with a arbitrator or in a court of law. Based on this calculation, the executor 23 C.C.No.514 of 2018 SCCH-26 would issue the company a cheque for Rs.5 crores only within 7 days of time the company claims for refund or in any case of lapse of 60 months which is 27-1-2014 in case the executor has not completed any or all of the above mentioned assignments any delay in repayment beyond 27-1-2014, then 15% p.a. interest on the Rs.5 crores will be paid by the executor to the company compounded annually in case of delay". So as per Ex-P10 contents, accused agreed to complete his assignment work if not completed within stipulated period, he would issue cheque for Rs.5 crore. Further on perusal of Ex-P11, one payment voucher dated 23-3-2007, it is noted on Ex-P11 that, paid amount of Rs.50 lakhs to accused and further to MOU dated 26-08-2005 paid now paid Rs.50 lakhs total payment Rs.1 crore. The accused signed as received in Ex-P11. On perusal of Ex-P12, on 27-3-2007, accused and MD of complainant company put their signatures and accused agreed he would settled lands in Chikkatirupathi/Chikkanayakanahalli. 24 C.C.No.514 of 2018
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19. Admittedly accused did not adduce evidence or produce any documents from his side. While recording his statement U/s 313 also accused denied the case of complainant, but he did not stated anything about how the signed cheque i.e., disputed cheque goes to possession of complainant he did not explained while recording 313 statement. The main argument of learned accused advocate Ex-P9 to 12 are created for the purpose of this case the complainant intentionally did not stated anything about the existence of Ex-P9 to 12 in notice and complaint. After lapse of two and half year the complainant produced Ex-P9 to 12 if really Ex-P9 to 12 taken place between accused and complainant company they definitely produced along with PCR. Therefore Ex-P9 to 12 created documents for the purpose of this case. Ex-P9 took place in the year 2008 in a white paper there was no letterhead and seal of the company, they stated that they paid additional Rs.50 lakhs to the accused paid for registration of the 10 acres of land. The price agreed was R.34 lakhs per acre. So this version never stated any where in the complaint and notice. According to this 25 C.C.No.514 of 2018 SCCH-26 version Rs.12 crores 92 lakhs for purchase of 38 acres of land per acre Rs.34 lakhs. It is unbelievable version of complainant. Ex-P10 is the settlement agreement executed on 28-1-2009 but produced before this court in the year 2001. There was no any witness on both side either complainant or accused. It is created document any agreement or the registration or any contract, there must two witnesses in both side, but there was no any witness. They stated in Ex-P10 they paid Rs.50 lakhs each on two dates to accused and his wife and their minor child. If really Ex-P10 entered on 28-1-2009, they definitely gets signature of accused wife and accused son, there is no independent witness to Ex-P10. Ex-P11 has no stamps, no serial number, there was no cheque or bank details, there was no signature of authorized persons, so it is also created by the complainant with an intention to get compensation. Ex-P10 which is also in white paper and there was no witness in Ex- P12. This document also created by the complainant for the purpose of this case. The present complaint filed for Rs.5 crore, the version of the complainant, they paid Rs.50 lakhs each in two different dates, there is no explanation from the 26 C.C.No.514 of 2018 SCCH-26 side of complainant, how Rs.4 crore accrued, there was two version putforth by complainant, the case of the complainant doubtful and benefit of doubt goes to always accused, there is no civil case filed by complainant regards of settlement of agreement. There is no agreement made between complainant and accused. PW-1 clearly admit, he was not fully aware of the transactions putforth between their company and accused. PW-1 and 2 never took any legal opinion before paying Rs.1 crore amount to the accused. There are number of contradictory statement and number of different versions putforth in the cross examination of PW-1 and 2 there was no any transaction took place between compliant and accused. hence he praying for dismissal of complaint and acquit the accused.
20. On the other hand, learned complainant counsel replied or answered to argument canvassed by accused, the suggestion made by accused itself he admitted receive Rs.1 crore by the complainant. So the receipt of Rs.1 crore by the accused is not in dispute. PW-1 and 2 clearly spoken about payment of money as well as execution of documents i.e., Ex- 27 C.C.No.514 of 2018
SCCH-26 P9 to 12. From the evidence of PW-1 and 2 it is clear that on 26-5-2005 Rs.50 lakhs was paid and on 23-3-2007 Rs.50 lakhs has been paid, the settlement agreement was to pay Rs.5 crores on 27-1-2014 in case the accused failed to give. It means for 12 years the accused had the benefit of Rs.50 lakhs and for 10 years the accused had benefit of having Rs.1 crore, but Rs.1 crore has become Rs.5 crore, by virtue of agreement of settlement dt.27-1-2014. As per Ex-P10, it is said that as on August 2005, the market price was Rs.34 lakhs per acre and Rs.1 crore would have got 2 acres 38 guntas. In 2014, the estimated value is Rs.1.7 crores/acre which is confirmed by both parties. Based on this Rs.5 crores is payable. There is also an agreement to pay interest at 15% after the date 27-1- 2014 which the accused is due to pay to the complainant. But never paid by the accused. This amount is also due to the complainant. There is no any substantive evidence U/s 313 Cr.P.C. when accused failed to record evidence to disprove the presumption available U/s 139 of NI Act. There is no cross examination by the accused why money is not payable and there is no even evidence on behalf of accused, he did not 28 C.C.No.514 of 2018 SCCH-26 receive any money from complainant, even he did not denied the signatures found on Ex-P9 to 12. Even to show that no loss of was suffered by the complainant or to show that any claim was made in excess, the evidence of accused was must when accused admitted issuance of cheque and signature and transactions were not disputed the presumption U/s 139 is to be drawn and to rebut presumption accused has to lead evidence. In the instant case, while recording 313 statement, the accused says that he does not want to lead evidence and in reality he does not lead evidence and consequently it is clear that he has no explanation whatsoever to offer contrary to the evidence of complainant and he not leading evidence should result in adverse inference. When accused admitted receipt of money in cash there is no need to show that money was withdrawn or produce any document. The contention took by the accused is incorrect, the very accused has not disputed that he has issued the cheque and that he has signed the cheque when cheque has such is not in dispute, the argument of accused is without any merit. The accused has not arranged for land at all, the same is irrelevant for fulfilling the 29 C.C.No.514 of 2018 SCCH-26 contract never arose. There is no cross examination by the accused regarding Ex-P10 was created, there is no suggestion that accused has not signed, accused has not entered into witness box to challenge the validity of Ex-P10. There is no law that two witness are required for document. The accused has not stated as to under to which law two witnesses are required. The accused received amount from complainant company, the accused has taken the responsibility of answering for the amount paid. Once his signature in the cheque and document is not disputed and once there is no cross examination on these lines, accused not led in any evidence, he did not took ground that accused wife and son signatures are not subscribed on Ex-P10, it is not a valid ground. Voucher is signed by the accused, there is no cross examination by the accused that it is created, signature of accused is not disputed, once document marked, it cannot be objected, no law requires a witness to be there and there is no cross examination that it is created and accused has not given any evidence. Filing of civil case is not the choice of the complainant and that is not a ground for acquittal. The basis 30 C.C.No.514 of 2018 SCCH-26 for Rs.4 crore is clearly available in Ex-P10. Hence pray for convict the accused with maximum penalty.
21. In the backdrop of rival arguments canvassed by both counsel and principle of law laid down the decisions of Apex court relied by both counsel kept in mind and peruse entire oral as well as documentary evidence admittedly Ex-P1 belongs to accused and signature on Ex-P1 is also not in dispute. On presentation of Ex-P1 got dishonoured, same has been communicated by issuing statutory notice as per Ex-P3, the accused had been replied as per Ex-P7. The notice sent by complainant had duly delivered on accused as per postal track consignment report on 11-11-2017 as per Ex-P4. Moreover accused replied on 29-11-2017. Except denial of sale agreement, he nothing stated about disputed cheque how goes to possession of complainant company and did not denied transactions stated by the complainant in Ex-P3, then accused appeared, he conducted cross examination of PW-1 and 2 at very length, but no admission got from PW-1 and 2, accused did not suggested to PW-1 and 2, he did not received 31 C.C.No.514 of 2018 SCCH-26 Rs.1 crore from complainant company. The alleged disputed signed cheque did not belongs to him. The accused himself by giving suggestion to PW-1 and 2, admitted cheque belongs to his bank A/c and signature also belongs to him. He disputed Ex-P9 to 12 as created documents for the purpose of this case after lapse of 2 ½ years, but he never suggested to PW-1 and 2, the signatures found on Ex-P9, 10, 11, 12 are not belongs to accused. The complainant company registered company under the companies Act. So complainant company is juristic person, it has represented by human being in court of law. Therefore the complainant company passed resolution on 21- 4-2004 by its all directors and in that board of resolution, they authorised PW-1 to represent complainant in the court and prosecute the case against this accused. So as per Ex-P8, PW- 1 had proper authority to depose evidence on behalf of complainant company. During trial PW-1 admitted there is no legal hurdle to examine chairman of complainant company, because he personally aware the present business transactions. Accordingly the complainant company examined its chairman as PW-2, both have clearly spoken about 32 C.C.No.514 of 2018 SCCH-26 transaction arrived since 2005 to 2014 between complainant company and accused. The evidence deposed by PW-1 and 2 inconsonance with Ex-P9 to 12. So complainant company completely discharged his/its burden by adducing oral evidence as well as documentary evidence. Now burden shifted on accused to prove the case projected by complainant is false and documents relied by complainant also creed for the purpose of this case. So for discharge of his burden, accused did not adduce any evidence or produce any document except cross examine PW-1 and 2. So as per Section 139 of NI Act, once cheque and signature admitted, presumption shall drawn in favour of the complainant. The opposite party should rebut the presumption by utilizing the evidence of complainant or by adducing independent evidence. The learned counsel for accused relied decision of Basalingappa Vs Mudi Basappa, the accused questioned capacity of complainant to pay Rs.1 crore to accused. But accused himself suggested many times the c complainant company paid Rs.1 crore, but case filed for Rs.5 crore. The accused himself admitted receipt of Rs.1 crore paid by 33 C.C.No.514 of 2018 SCCH-26 complainant company there is no necessity for proving their financial capacity. So the decision relied by the accused is not helpful to the case of accused. Further accused relied decision of Hon'ble High Court of Karnataka, ILR 2014 KAR 6572 Sri.Manjunatha Vs Basavaraju, in that case Apex court held that the entries made in disputed cheques on different handwriting, different ink and undoubtedly made at different time, for this reason complainant case not accepted. But in the instant case the accused never disputed, he did not issued cheque in favour of complainant company and contents of Ex- P1 also he never disputed in his cross examination. So this decision is also not helpful to the case of accused. Further accused relied decision of Hon'ble Apex court John K.Abraham Vs Simon C.Abraham and another -In this case Apex court held that -Presumption drawn in favour of complainant, the initial burden on complainant they had required funds having advance the money to the accused and complainant shall prove complaint averments without any lacuna then only presumption shall draw in favour of complainant. In the instant case, accused himself admitted, 34 C.C.No.514 of 2018 SCCH-26 he received Rs.1 crore from complainant company on two occasion, in connection to Rs.1 crore, Ex-P9 to 12 prepared he never disputed the signature found on Ex-P9 to 12, they give full particulars, how Rs.4 crores comes to in favour of complainant. In consoanace of Ex-P9 to 12, PW-1 and 2 have spoken about transactions, the oral evidence of PW-1 and 2 supported Ex-P9 to 12, the accused failed in proving Ex-P9 to 12 are created. Hence this court drew presumption U/s 118 along with Section 139 of NI Act in favour of complainant company. So this case also not helpful to the case of accused. Further learned accused advocate relied another decision of Apex court K.Subramani Vs K.Damodara Naidu, in this case Apex court held that complainant had no source of income to lend money to accused there is no legally recoverable debt payable by accused to complainant. In the present case, accused admitted receipt of Rs.1 crore and same is enjoying more than 10 years, till date he did not return, the complainant company got relevant documents from the accused, he did not denied his signatures on documents. When once accused admitted receipt of amount there is no 35 C.C.No.514 of 2018 SCCH-26 question arise for proving capacity of lending. So the present decision is also not helpful to the case of accused. The learned counsel for complainant mainly placed relied decisions, decision of Apex court, Oil and natural gas corporation Ltd., Vs Saw pipes Ltd., Division Bench dd-17- 4-2003. In this case, Apex court held that any agreement entered between two parties, for do certain act, in agreement itself pre estimated of loss, when they made proving such loss or such party is not required to lead evidence to prove actual loss suffered by him. Burden is on the other party to lead evidence for proving that, no loss is likely to occur by such breach. Further complainant mainly relied decision of Apex court construction and design services Vs Delhi Development authority (DB) dd-4-2-2015. In this case also Apex court held that Section 73 and 74 of Indian Contract Act, when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach the party complaining of breach is entitled, whether or actual loss is proved to have been caused, thereby to receive from the party who has broken the contract reasonable compensation not 36 C.C.No.514 of 2018 SCCH-26 exceeding the amount, so named. If the compensation named in the contract for such breach, he is genuine, pre-estimate of loss which the parties knew when they made the contract to be likely to result from the breach of it, there is no question of proving such loss or such party is not required to lead evidence to prove actual loss suffered by him, burden is on the other party to lead evidence for proving that no loss is likely to occur by such breach. Further complainant placed reliance on decision of Hon'ble Apex court T.Vasanth Kumar Vs Vijayakumari wherein Apex court held that -since cheque as well as signature had been accepted by accused, presumption U/s 139 of Act would operate. Thus burden was on accused to disprove cheque or existence of any legally recoverable debt or liability. Accused failed to discharge his burden conviction proper. In the instant case, the complainant produced Ex-P1 to 12, from this document, it is forthcoming accused and complainant company having land business, purchase transaction in the year 2005 for the purpose of showing land from farmers, the complainant company paid Rs.50 lakhs as 37 C.C.No.514 of 2018 SCCH-26 advance sale consideration and further against complainant company paid Rs.50 lakhs to accused for completion of sale agreement, the said sale agreement taken back from accused by entering fresh MOU and he agrees to complete assigned work within 27-1-2014, if not completed he would issue cheque for Rs.5 crore. The accused did not completed assigned work as per Ex-P10, so he issued Ex-P1 for the purpose of discharge of legal liability or return of agreed amount of Rs.5 crore, the same has been got dishonoured, the complainant company complied all the necessary mandatory requirements of Section 138 of NI Act. The accused did not repaid till date, so accused committed an offence U/s 138 of NI Act. The complainant company proved guilt of the accused beyond reasonable doubt by adducing oral and producing documentary evidence. The accused did not choose to rebut the evidence placed by the complainant company. So the decisions relied by the complainant company aptly applicable to the case on hand. In the instant case, there is contract between accused and complainant company for purchase of land, on assurance of accused, they paid Rs.50 38 C.C.No.514 of 2018 SCCH-26 lakhs on 26-8-2005, on 23-3-2007 in furtherance of Ex-P9, accused had received Rs.50 lakhs, both parties entered Ex- P10 on 28-1-2009 the time bond fixed to accused to complete assigned work i.e., on or before 27-1-2014. In Ex-P10 there is a clause for in case breach and also calculate damages. The same had been agreed by the accused and he put his signature on Ex-P1, he did not performed his part of work or assignment. So he issued disputed cheque on 27-09-2017 for Rs.5 crore. Except some suggestions made to PW-1, Ex-P9 to 12 are created nothing has been placed by the accused to discharge his burden how the complainant company get signature of accused on Ex-P9 to 12. Why accused issued his signed cheque in favour of complainant for Rs.5 crore on 27-9- 2017. So in the absence of rebuttal evidence, this court without any alternative shall draw presumption in favour of complainant. The evidence of PW-1 and 2 and contention took from the accused during cross examination of PW-1 and 2 and Ex-P9 to 12 are sufficient to hold that Ex-P1 issued towards the discharge of subsisting debt and liability. 39 C.C.No.514 of 2018
SCCH-26
22. The cheque is an instrument comes under the N.I Act holder in due course of the cheque, has got good title over the cheque. Therefore on the basis of evidence of PW1 and documentary evidence it clearly establish that the accused issued the disputed cheque to the complainant company for legally dischargeable debt. The complainant company has complied all essential ingredients of Sec.138 of NI Act. When complainant company complied all essential ingredients of Sec.138, as per Sec.139 of NI Act the cheque is issued for legally recoverable debt.
23. On careful examination of all the documents of complainant, it is very clear that the complainant company filed this complaint well within time and complied all the ingredients of Section 138 of N.I. Act 1881. The presumption Under Section 139 of the NI Act is a presumption of law, it is not a presumption of fact. This presumption has to be raised by the court in all the cases once the factum of dishonor is established. The onus of proof to rebut this presumption lies on the accused. The standard of such rebuttable evidence depends on the facts and circumstances of each case. Such 40 C.C.No.514 of 2018 SCCH-26 evidence must be sufficient to prove the case. Therefore a mere explanation is not sufficient to rebut this presumption of law. The decisions of Hon'ble Apex court relied by the complainant company in recent decision passed in Criminal Appeal No.123/2021 arising out of special leave petition (criminal) 1876/2018 between M/s Kalamani Tex and another Vs P.Balasubramanian disposal date on 10-02- 2021 (three judges bench). In this case, Apex court held that, "once signature on cheque admitted by the accused, court ought to have presume that, cheque was issued as consideration for a legally enforceable debt."
24. Further the complainant company placed reliance on recent decision of Hon'ble Apex court in case Criminal Appeal No.292/21 between Sumethi Vij Vs. M/s Paramount Tech FAB Industries (Division Bench) disposed dated 9.3.2021 In this case Apex Court held that under Section 139 of the Act, a presumption is raised that holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut 41 C.C.No.514 of 2018 SCCH-26 this presumption, facts must be adduced by the accused which on preponderance of probability (not beyond reasonable doubt as in the case of criminal offence. Must then be proved.
25. Further Apex court clarified that there is a mandate of presumption of consideration in terms of the provision of the act under Section 118 and 139 of Negotiable Instrument Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of section 138 of the NI Act.
26. As per N.I. Act, the presumption is in favour of holder of cheque. Here, the holder of cheque is complainant and presumption is in favour of complainant. It is burden on the accused to rebut the above presumption. As per Section 118 of N.I Act, presumption has to be raised by the court in all the cases once the factum of dishonour is established, but it is rebuttal presumption. The onus of proof to rebut this presumption lies on the accused. The standard of such 42 C.C.No.514 of 2018 SCCH-26 rebuttal evidence depends on the facts and circumstances of each case. Such evidence must be sufficient, cogent and should prove beyond any reasonable doubt. The accused has not taken and proved defence to rebut the presumption of law available in favour of the complainant envisaged U/s 118 r/w section 139 of NI Act. Accordingly the case of the complainant is acceptable as the complainant has proved that accused has intentionally without having sufficient money in his account and issued disputed cheque. Therefore, a mere explanation is not enough to repel this presumption of law.
27. Therefore in my considered view, the complainant company has established his case by way of documentary as well as oral evidence. Being accused liable to pay Ex-P1- cheque amount of Rs.5 crore to the complainant company. Hence my answer to point No.1 to 3 in the Affirmative.
28. Point No.4: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. It is worth to note that the offence is of the 43 C.C.No.514 of 2018 SCCH-26 nature of civil wrong. This court has power to impose both sentence of imprisonment and fine on the accused. This court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Hon'ble supreme court of India in a decision reported in 2015(17) SCC 368 in a case of H.K.Pukhraj Vs D.Parsmal observed that having regard to the length of trial and date of issuance of cheque it is necessary to award reasonable interest on the cheque amount along with cost of litigation. Further accused has to compensate the complainant in terms of money. In the result, I proceed to pass the following:-
-: O R D E R :-
By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.5,10,00,000/- (Rupees Five Crores Ten lakhs only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.5,09,90,000/- shall be payable to the complainant as compensation and remaining amount of Rs.10,000/- shall be defrayed as state expense.44 C.C.No.514 of 2018
SCCH-26 In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith.
(Dictated to the stenographer, through online computer, thereof is corrected and then pronounced by me in the open Court on this the 9th September 2021) (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.
ANNEXURE
WITNESSES EXAMINED ON BEHALF OF THE
COMPLAINANT:
PW-1: Joju Kochappan
PW-2: Dr.Roy C.J.
DOCUMENTS MARKED ON BEHALF OF THE
COMPLAINANT:
Ex.P-1: Cheque
Ex.P-1(a): Signature
Ex.P-2: Bank memo
Ex.P-3: Legal notice
Ex.P-4 : Postal track
Ex.P-5: Acknowledgment postal cover
Ex.P-6: Acknowledgment
Ex.P-7: Reply notice
Ex.P-8 : Board resolution
45 C.C.No.514 of 2018
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Ex.P-9: Memorandum of understanding
Ex.P-10: Settlement agreement
Ex.P-11: Voucher
Ex.P-12: Endorsement
WITNESSES EXAMINED ON BEHALF OF THE ACCUSED: NIL DOCUMENTS MARKED ON BEHALF OF THE ACCUSED: NIL (R.MAHESHA) XXIV ADDL. SMALL CAUSES JUDGE & A.C.M.M. BENGALURU.