Bangalore District Court
Vinod Krishnamurthy vs V.Arunkumar on 9 February, 2022
IN THE COURT OF THE XXIII ADDL.CHIEF METROPOLITON
MAGISTRATE, NRUPATHUNGA ROAD, BENGALURU CITY
Dated this the 9th day of February - 2022
PRESENT: SRI. N.K.SALAMANTAPI, B.A., LL.B.,
XXIII Addl.C.M.M., Bengaluru City.
C.C.NO.14748/2016
Complainant : Vinod Krishnamurthy,
S/o.Krishnamurthy,
Aged about 36 years,
Occupation - Business,
R/o No.714, 3rd Block, 3rd Stage,
8th 'D' Main Road, Basaveshwaranagar,
Bengaluru-79.
(Rep. by Sri.Chethan.B, Adv.)
V/S
Accused : V.Arunkumar,
S/o.B.N.Vajravelu,
Aged about 48 years,
R/at No.839, 5th Block,
17th 'F' Main, Rajajinagar,
Bengaluru-10.
Additional Address:
No.1048, 2nd Floor, 18th 'C' Main,
5th Block, Rajajinagar, Bengaluru-10.
(Rep.by Sri.Mahesh Kiran Shetty, Adv.)
OFFENCE COMPLAINED OF : U/Sec. 138 of Negotiable
Instruments Act.
PLEAD OF THE ACCUSED : Not guilty.
FINAL ORDER : Accused is Convicted.
DATE OF ORDER : 09.02.2022.
(N.K.SALAMANTAPI)
XXIII Addl.CMM., Bengaluru.
Judgment 2 C.C.No.14748/2016
JUDGMENT
The complainant has presented the instant complaint against the accused on 23.06.2016 under Section 200 of Cr.P.C. for the offence punishable under Section 138 of Negotiable Instruments Act for dishonour of cheque amount of Rs.19,20,000/-.
2. The brief facts of the complaint are as under:
The complainant submits that the accused was family friend of him. The accused represented that he is in the business of construction and Government Contract work having huge turnover. The accused further represents that for expansion of his business, he requested the complainant to lend money and promised he would get good returns by way of interest on the amount so paid, accordingly, the accused was entering into various loan agreements with him during the year 2010 to 2013.
The complainant has further contended that in the month of June, 2012, the accused had sought financial assistance of Rs.10 lakhs from him to meet his domestic and business necessities and as per request of accused, he paid an amount of Rs.10 lakhs to the accused on 07.06.2012 through RTGS from his bank account to accused bank account and in pursuance of the same, on Judgment 3 C.C.No.14748/2016 07.06.2012, the accused has executed agreement of loan. As per the terms of said loan agreement, the accused has agreed to pay interest on the above said amount at the rate of 2% p.m. to the complainant on or before 20th of every month. As per agreement of loan, towards discharge of his liability, the accused has issued a cheque bearing No.000026 drawn on Karur Vysya Bank, Rajajinagar Branch, Bengaluru in favour of complainant.
The complainant has further contended that as per the revised guidelines of Reserve Bank of India, the accused has received the cheque bearing No.000026 from him and issued a fresh cheque bearing No.000063 drawn on Karur Vysya Bank, Rajajinagar Branch, Bengaluru in favour of complainant and all other terms of agreement of loan dated 07.06.2012 were continued.
The complainant has further contended that inspite of repeated demands made by him, the accused neither paid any interest nor paid the principal amount of Rs.10 lakhs. Thereafter, in the last week of March, 2016, he demanded the accused to pay the said amount along with interest, accused has not paid the said amount, but instructed to present the cheque bearing No.000063 amounting to Rs.19,20,000/- during the last week of April, 2016 Judgment 4 C.C.No.14748/2016 and promised the said cheque would be honoured on its presentation.
The complainant has further contended that believing the assurance of accused, he presented the cheque bearing No.000063 dated 27.04.2016 drawn for Rs.19,20,000/- drawn on Karur Vysya Bank, Rajajinagar Branch, Bengaluru for encashment through his banker viz., State Bank of Hydrabad, Bengaluru, the same came to be dishonoured with an endorsement dated 28.04.2014 (the said date mentioned as in complaint) stating "Funds Insufficient". The accused intentionally issued the said cheque without keeping sufficient funds in his account. Hence, he got issued legal notice to the accused on 16.05.2016 by way of R.P.A.D and the same was duly served upon accused on 20.05.2016. After service of demand notice, on 09.06.2016, the accused has issued evasive reply and not repaid the cheque amount to the complainant. Thus, the accused committed an offence punishable under Section 138 of Negotiable Instruments Act. Hence, filed the present complaint.
3. After receipt of the private complaint, my predecessor in office took the cognizance and got registered the PCR and recorded the sworn statement. Since made out prima-facie Judgment 5 C.C.No.14748/2016 grounds to proceed against the accused for the alleged offence, got issued process.
4. In response to the summons, the accused appeared through his counsel and obtained bail. As required, complaint copy was supplied to the accused. Thereafter, accusation was read over and explained to accused, wherein, he denied the same and claimed to have the defence.
5. To prove the case of the complainant, he himself choosen to examine as PW.1 and got marked Exs.P1 to P20. In support of his case, the PW.1 choosen to examine a witness by name Madan.M as PW.2. The PW.1 and PW.2 were subjected for cross-examination by the advocate for the accused.
6. Thereafter, incriminating evidence made against the accused was recorded under Section 313 of Cr.P.C, wherein the accused denied the same and submitted his detailed written statement under Section 313(5) of Cr.P.C. In this case, the accused has not choosen to enter into witness box and also not produced any document.
7. Both side counsels have addressed their arguments.
Judgment 6 C.C.No.14748/2016
8. On going through the rival contentions, based on the substantial evidence available on record, the following points would arise for determination:
1) Whether the complainant proves beyond all reasonable doubt that the accused got issued Ex.P1-cheque bearing No.000063 to the complainant towards discharge of legally recoverable debt or liability and the said cheque was dishonoured, thereby the accused has committed an offence punishable under Section 138 of Negotiable Instrument Act?
2) What Order?
9. On appreciation of materials available on record, my findings on the above points are as under:
Point No.1 : In the Affirmative Point No.2 : As per final order, for the following:
REASONS
10. POINT No.1: The complainant has filed this complaint for an offence punishable under Section 138 of Negotiable Instruments Act against the accused and prayed to punish the accused for an offence punishable under Section 138 of Negotiable Instruments Act.
11. To attract Section 138 of Negotiable Instruments Act, complainant should prove that; (1) the accused has issued a Judgment 7 C.C.No.14748/2016 cheque for discharge of legally recoverable debt. (2) The same was presented through his banker. (3) It was dishonoured on presentation. (4) The notice in terms of provisions was served on the accused and (5) Despite service of notice neither any payment was made nor other obligations, if any were complied within 15 days from the date of receipt of notice.
12. In order to prove his case, the complainant filed his affidavit and himself examined as PW.1, wherein, he has reiterated the averments made in the complaint. In support of his contention, he relied upon the documents at Exs.P1 to P20. Among them, cheque bearing No.000063 issued by the accused for sum of Rs.19,20,000/- dated 27.04.2016, drawn on the Karur Vysya Bank Limited, 17th G Main Road, Rajajinagar Branch, Bengaluru is marked as Ex.P1. The signature of accused is marked as Ex.P1(a). Ex.P2 is the Bank Endorsement issued by State Bank of Hyderabad, the contents of Ex.P2 disclose that the cheque bearing No.000063 drawn for Rs.19,20,000/- was dishonoured for the reasons "Funds Insufficient". Ex.P3 is the Legal Notice dated 16.05.2016, the recitals of Ex.P3 disclose that the complainant has issued this notice to the accused through his counsel. By issuing this notice, complainant called upon the accused to repay the cheque amount of Rs.19,20,000/- within 15 days from the date Judgment 8 C.C.No.14748/2016 of receipt of notice. Exs.P4 and P5 are the Postal receipts. Exs.P6 and P7 are the postal acknowledgment cards. Ex.P8 is the common reply notice dated 09.06.2016 issued by accused through his counsel by denying the contents of notice dated 16.05.2016. Ex.P9 is the private complaint. Ex.P9(a) and P9(b) are the signatures of complainant. Ex.P10 is the agreement of loan dated 07.06.2012 executed by accused herein in favour of complainant regarding availment of loan amount from the complainant and also its enclosure regarding deficit stamp duty and penalty of Rs.6,050/- paid by the complainant to the District Registrar and Deputy Commissioner of Stamps, Rajajinagar Registration District, Bengaluru. Ex.P11 is the letter/shara dated 29.07.2013 written by accused to the complainant regarding as per RBI revised guidelines, receipt of old cheque bearing No.000026 from the complainant and issuance of fresh cheque bearing No.000063 to the complainant. Ex.P12 is the Statement of account pertaining to complainant for the period from 07.06.2012 to 07.06.2012 issued by State Bank of India. Exs.P13 to P17 are the certified copies of ITR-V i.e., Indian Income Tax Return Verification Forms for the assessment year 2011-12 to 2015-16 pertaining to the complainant and Exs.P18 to P20 are the Statement of accounts pertaining to the complainant herein issued Judgment 9 C.C.No.14748/2016 by State Bank of India. The PW.1 and PW.2 were subjected to the cross-examination by the advocate for the accused. In support of his case, the complainant through his counsel has relied upon the decisions as under:
a) Crl.A.No.123/2021 in the case of M/s. Kalamani Tex and another V/s. P.Balasubramanian.
b) 2021 (1) Kar. L.R. 378 (SC) in the case of Sumeti Vij V/s. M/s. Paramount Tech Feb Industries.
c) Crl.A.No.208 of 2019 in the case of Rohitbhai Jivanlal Patel V/s. State of Gujarat and another.
d) AIR 2018 SC 3601 in the case of T.P.Murugan V/s. Bojan.
e) Crl.A.No.306 of 2016 in the case of B.M.Basavaraj V/s. Srinivas S.Datta.
f) Crl.A.No.1020 of 2010 in the case of Rangappa V/s. Mohan.
g) Cr.R.P.No.5/2002 in the case of V.Satyanarayana V/s. Sandeep Enterprises.
h) Cr.R.P.No.1534/1999 in the case of Vidhyadhar V/s. Manikrao and others.
i) Arbitration Petition No.1/2005 in the case of Shin Satellite Public Co. Ltd. V/s. Jain Studios Limited.
I have gone through the above decisions.
Section 118 (a) of Negotiable Instruments Act provides that:
"Until the contrary is proved, the following presumptions shall be made: (a) of consideration; that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, Judgment 10 C.C.No.14748/2016 was accepted, indorsed, negotiated or transferred for consideration."
Section 139 of Negotiable Instruments Act provides that:
"It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."
13. In the present case, the accused has not choosen to enter in to witness box. In support of his contention, the accused through his counsel has relied upon the decisions as under:
a) Crl.A.No.261/2013 in the case of Vijay V/s. Laxman and another.
In the above decision it was observed that:
"thus discharged the burden envisaged under Section 118(a) and 139 of the N.I. Act which although speaks of presumption in favour of the holder of the cheque, it has included the provisions by incorporating the expressions "until the contrary is proved" and "unless the contrary is proved" which are the riders imposed by the Legislature under the aforesaid provisions of Section 118 and 139 of the N.I. Act as the Legislature chooses to provide adequate safeguards in the Act to protect honest drawers from unnecessary harassment but this does not preclude the person against whom presumption is drawn from rebutting it and proving to the contrary. "
Judgment 11 C.C.No.14748/2016 I have gone through the above decision. It is not precluded the accused to rebut the presumption under Sections 118(a) and 139 of Negotiable Instruments Act. To prove the contrary there is no cogent and convincing material on behalf of accused. In the present case, the accused admitted that he has received an amount of Rs.51 lakhs from the complainant. The accused further stated that he has repaid the said amount along with interest to the complainant. The said fact was not denied by the complainant, but the say of complainant that the payment made by the accused is pertaining to different transaction and the powers given under Sections 59 and 60 of the Indian Contracts Act, the complainant adjusted the said amount to the other 3 cheques amount and he has not filed any case against the said 3 cheques. The accused admittedly issued 12 cheques to the complainant. In the present case, the accused has not proved that he has not issued cheques for discharge of legally recoverable debt.
b) 2013 (3) DCR 460 in the case of Vijay Kumar Upadhyay V/s.
State of U.P and another.
In the above decision it was observed that:
"Criminal Procedure Code, 1973 - Section 482 - Summoning Order - Sought quashing of - Held - Provision of Section 138 of N.I.Act are issued only on account of Judgment 12 C.C.No.14748/2016 dishonour of cheque issued in discharge of liability or debt and not on account of issuance of Security cheque - Filing of complaint and summoning order are liable to be quashed".
I have gone through the above decision. It is relevant to cite Criminal Appeal Nos.1269-1270 Of 2021 in the case of Sripati Singh (since deceased) through his son Gaurav Singh V/s. The State of Jharkhand and Another, wherein the Hon'ble Apex Court observed that the dishonour of a cheque which is issued as a security can attract offence under Section 138 of the Negotiable Instruments Act, 1881. Therefore, the accused cannot say that he has issued cheque for only security purpose, therefore, the offence punishable under Section 138 of Negotiable Instruments Act cannot be attracted.
c) 2008 (2) DCR 275 in the case of Firoz A.Moiyadi V/s. Maruti Diamonds Gold Jwellers and another.
In the above decision it was observed that:
" Negotiable Instrument Act, 1881 - Section 138 - Dishonour of cheque issued for as security - Disputed cheque was not issued to discharge any existing liability of debt - No offence is made out".
I have gone through the above decision.
d) 2004 (2) DCR 1 in the case of Krishnam Raju Finances, Hyderabad V/s. Abida Sultana and another. In the above decision it was observed that:
Judgment 13 C.C.No.14748/2016 "Section 138 - A. P. (T.A.) Money Lenders Act, 1349 - Section 2 (4) and 9 (2) - Dishonour of cheque - Subsisting legally enforceable liability - Complainant admittedly money lender - Money lending licence not produced - Presumption against him - Since appellant had no such licence - Can not be said there was legally enforceable liability of respondent in view of 9(2) read with Section 2 (4) of Act 1349 fasli - Once an Act declares a particular transaction illegal - It can not be made legal for purpose of other Act - Acquittal upheld".
I have gone through the above decision. In the present case on hand, the complainant did not admit that he is doing money lending business. Therefore, question of having money lending licence by the complainant does not arise.
e) Crl.A.No.348/2013 C/w Crl.A.No.349/2013 in the case of M/s. Baba Corporate Services Pvt. Ltd. V/s. V.Narayana Murthy and another.
In the above decision it was observed that:
"The power of attorney is not having personal knowledge cannot depose on behalf of principal. Further observed that the trial court has to refer the receipts of Exs.D3 to D11 for expert opinion for comparison with admitted seals and signatures of Narayan, the Managing Director of the appellant company. On the documents produced before the court to get report and if necessary evidence to summon the expert to give his evidence before the court, the matter was remanded".
I have gone through the above decision.
Judgment 14 C.C.No.14748/2016
f) Crl.A.No.855/2010 in the case of Sami labs Limited V/s. M.V.Joseph.
In the above decision it was observed that:
" 22. Section 138 of the N.I.Act makes it mandatory that to attract Section 138 of the N.I.Act, making the dishonour of the cheque as an offence, the issuance of cheque must be as a whole or in part of any debt or other liability."
"23. In the instant case, when the housing loan disbursed to the accused in full, was a sum 5,00,000/- and since it is established that of a portion of it has already been repaid by the accused or has already been recovered by the complainant company from out of the salary of the accused, then the total outstanding liability would be any sum lesser than the cheque amount. Thus, when any sum issued in the cheque is for an higher amount than the outstanding liability and if that excess amount is also not towards any interest, cost, penalty etc., but remains unexplained, then Section 138 of the N.I.Act cannot be said to be applicable."
I have gone through the above decision. In the present case on hand, the PW.1 admitted some amount has been paid by the accused. But he stated that the said amount is pertaining to the different transaction and he has adjusted the said amount to the other 3 cheques amount. He did not file complaint against that 3 Judgment 15 C.C.No.14748/2016 cheques. Further stated that the accused has issued 12 cheques, out of 12 cheques, he filed cases against only 9 cheques. Issuance of 12 cheques by the accused in favour of complainant is not in dispute and non filing of other 3 cases in respect of other 3 cheques is also not in dispute. Therefore, the accused cannot say that he paid the entire cheque amount to the complainant and the complainant is not liable to recover the cheques amount in the present case. There is no proof on record to believe the version of accused that in the present case, he paid the questioned cheque amount to the complainant. In the absence of such material before the court, it is difficult to believe the version of accused that he paid the alleged cheque amount to the complainant.
g) In the Judgment of Hon'ble Andhra High Court in the case of Veereshan V/s. S.Shiva Shankar and state through. In the above decision it was observed that:
"It was a matter relating to appreciation of evidence. Once the accused discharges the initial burden placed on him, the burden of proof would revert back to the complainant. From rebutting the presumption under Sections 118 and 139 of the N.I.Act, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon and the standard of proof evidently is preponderance of probabilities".
Judgment 16 C.C.No.14748/2016 I have gone through the above decision. In the present case on hand, to discharge initial burden, the learned counsel for accused cross-examined the PW.1. In the entire cross-
examination, PW.1 did not admit the suggestion made by the counsel for accused in respect of repayment of alleged cheque loan amount by the accused. Therefore, the accused cannot say that he has discharged his initial burden.
h) 2009 Crl.L.J. 3777 in the case of Sanjay Mishra V/s. Kanishka Kapoor @ Nikki and another.
In the above decision it was observed that:
"S.138, S.139 - Dishonour of cheque - Presumption as to legally enforceable debt - Rebuttal of - Amount advanced by complainant to accused was large amount not repayable within few months - Failure by complainant to disclose the amount in his Income-Tax Return or Books of Accounts - Sufficient to rebut presumption u/S.139".
I have gone through the above decision.
i) 2010 Crl.L.J.1217 in the case of Anil Baburao Kataria V/s. Purshottam Prabhakar Kawane.
In the above decision it was observed that:
"S.138 - Bombay Money Lenders Act (31 of 1947), S.5, S.10 - Dishonour of cheque - legally enforceable debt - Loan advanced by money lender doing business of money lending without licence - Is not "debt or other liability" as per explanation to S.138 - Provisions of S.138 would not apply to such transaction."
Judgment 17 C.C.No.14748/2016 I have gone through the above decision. In the present case on hand, the complainant is a businessman, he lent amount to accused for business purpose as per agreement. He did not admit that he is doing money lending business, moreover it is not the defence of accused that complainant is doing money lending business. Therefore, question of taking licence for doing money lending business does not arise.
j) AIROnline 2019 Mad 970 in the case of Rangabashyam and another V/s. Ramesh.
In the above decision it was observed that:
"S.138, S.141 - Criminal P.C. (2 of 1974), S.482 - Partnership Act (9 of 1932), S.69(2) - Dishonour of cheque
- Offence by partnership firm - Quashing of complaint - Cheque issued by partnership firm in favour of complainant- partner against due amounts, got dishonoured - Complainant neither issued statutory notice to partnership firm nor arrayed firm as accused in complaint - Only partners shown as accused person in complaint - Plea of complainant that since firm is unregistered, no necessity to make firm as an accused, not tenable as registration or non- registration of firm is immaterial in view of S.141 of N.I.Act - Complaint being not in accordance with S.141, unsustainable - Liable to be quashed."
I have gone through the above decision. In the present case, the accused did not prove that he is the partnership firm.
Judgment 18 C.C.No.14748/2016 Therefore, the above decision is not helpful to the accused to prove his defence.
k) AIR 2010 (NOC) 874 (BOM) in the case of Nanda Dharam Nandanwar V/s. Nandkishor.
In the above decision it was observed that:
"S.138 - Dishonour of cheque - Complaint - Filed by money lender against her borrower - Without production of valid and operative money lending license covering period of transaction - Is not maintainable Bombay Money Lenders Act (31 of 1947), S.10."
I have gone through the above decision. In the entire cross-examination made by the learned counsel for accused, the PW.1 did not admit that he was a money lender. From the evidence, it is seen that the complainant is not a money lender. The accused has not proved that the complainant has lent money to other persons also. The complainant and accused are admittedly friends and both are businessmen, for the purpose of improvement of business, the complainant has lent amount to the accused. The accused is not an ordinary person, admittedly he is a businessman, without liability no businessman can give cheques to the other person.
l) ILR 2009 KAR 2331 in the case of B.Indramma V/s. Sri.Eshwar.
In the above decision it was observed that:
Judgment 19 C.C.No.14748/2016 "When the very factum of delivery of the cheque in question by the accused to the complainant and its receipt by complainant from the accused itself is seriously disputed by the accused, his admission in his evidence that the cheque in question bears his signature would not be sufficient proof of the fact that he delivered the said cheque to the complainant and the latter 'received if from the former' so as to raise the presumption U/s 139 of N.I.Act. Further Held, in order to raise presumption in favour of the complainant, he has to establish the fact that it was he who 'received' from the accused the cheque in question and, it is only after this fact is established by the complainant, presumption can be raised that the said cheque was issued by the accused towards discharge of whole or in part of any debt or other liability."
I have gone through the above decision. In the present case, it is not in dispute that the accused issued a cheque to the complainant, but the dispute of the accused is that he has given cheque for security of some amount received from the complainant and he already paid the entire amount to the complainant. But there is no proof on behalf of accused to believe this version that he has issued the alleged cheque and other cheques for security purpose.
m) ILR 2008 KAR 3635 in the case of K.Narayana Nayak V/s. Sri M.Shivarama Shetty.
In the above decision it was observed that:
Judgment 20 C.C.No.14748/2016 "Cheque issued not for discharge of any existing debt, but issued as a security for advancing loan - Presumption - HELD, That the cheque issued by the respondent to the appellant is only as a security and not for discharge of any existing debt. So far as the presumption as to issuance of the cheque for consideration and in discharge of debt, the respondent/accused need not disprove the appellant's case in its entirety. He can discharge his burden on the basis of preponderance or probabilities through direct or circumstantial evidence, for which he can also rely on the evidence adduced by the complainant - Evidence on record clearly establishes that the cheque was not issued towards discharge of any legally enforceable debt, but the blank signed cheque was issued as security - Order of acquittal is Justified."
I have gone through the above decision. It is relevant to cite the Criminal Appeal Nos.1269-1270 Of 2021 in the case of Sripati Singh (since deceased) through his son Gaurav Singh V/s. The State of Jharkhand and Another, wherein the Hon'ble Apex Court observed that the dishonour of a cheque which is issued as a security can attract offence under Section 138 of the Negotiable Instruments Act, 1881. Therefore, the accused cannot say that he has issued cheque for only security purpose, therefore, the offence punishable under Section 138 of Negotiable Instruments Act cannot be attracted.
n) (2009) 2 SCC 513 in the case of Kumar Exports V/s. Sharma Carpets.
Judgment 21 C.C.No.14748/2016 In the above decision it was observed that:
"Ss.139 and 138 - Presumption that cheque was issued in discharge of debt or liability - Presumption how to be displaced - Declaration made by the complainant himself to the Sales Tax Department that no sale had taken place - Accepts as a valid proof that cheques were not issued by accused in discharge of any debt or liability to complainant - Accused therefore by producing this evidence, held to have displaced the presumption under S.139 and therefore offence under S.138 not proved against accused."
I have gone through the above decision.
o) ILR 2006 KAR 3579 in the case of M/s. Sathavahana Ispat Ltd. V/s. Umesh Sharma and another.
In the above decision it was observed that:
"A cheque issued in respect of uncertain future liabilities would not attract prosecution U/s 138 of the Act - However, the vendor's right to recover the amounts in a Civil forum will not get affected - Therefore the prosecution U/s. 138 of the Act is bad in law."
I have gone through the above decision. In the present case on hand, it is not the case of accused that he issued the cheque in respect of uncertain future liabilities, therefore he cannot say that Section 138 of N.I.Act does not attract against him
p) Crl.A.No.2750/2009 in the case of ING Vysya Bank V/s. Hanumanth B.Ramdurg.
"Para No.11 Both presumptions are under the control of rider that unless the contrary is proved. Even without leading Judgment 22 C.C.No.14748/2016 rebuttal evidence, the accused has successfully rebutted the case of complainant that a post dated cheque was received by the bank while sanctioning loan with consideration and was presented for encashment only after selling the vehicle and adjusting the same proceeds towards the outstanding loan amount. Even if the accused is due for any difference of amount for the remedy for the bank is before a civil forum but not under Negotiable Instrument Act. The court below as rightly held that no offence is made under Section 138 of Negotiable Instrument Act and rightly acquitted the accused."
I have gone through the above decision. In the present case, it is not the defence of accused that he has issued post dated cheques to the complainant.
q) AIR 2019 SC 942 in the case of Anss Rajashekar V/s. Augustus Jeba Ananth.
In the above decision the Hon'ble Apex Court observed that:
"Failure of complainant to establish source of funds alleged to be utilized for disbursal of loan to accused. Presence of doubt on transaction as complainant not disclosing facts as to cheques and any steps taken by him for recovery of same. Material on record rendered probability as to absence of legally enforceable debt. High Court convicting accused on ground that he remained absent through notice of appeal was served, not proper".
I have gone through the above decision. In the present case on hand, the accused has not denied that the complainant is Judgment 23 C.C.No.14748/2016 not a businessman. Admittedly, the complainant and accused were businessmen and accused already admitted that he has received an amount of Rs.51 lakhs from the complainant. It shows that the complainant is having sufficient funds to lend loan to the accused. Therefore, the accused cannot say that the complainant is not having financial capacity to lend amount to him.
r) (2019) 5 SCC 418 in the case of Basalingappa V/s. Mudibasappa.
In the above decision the Hon'ble Apex Court observed that:
"(a) Debt, Financial and Monetary Laws. Negotiable Instruments Act, 1881. Ss,118, 138 and 139 - Drawing of presumption under, and how said presumption can be rebutted - Standard of proof - While prosecution must establish its case beyond reasonable doubt, accused to prove a defence must only meet standard of preponderance of probabilities.
(b) Debt, Financial and Monetary Laws. Negotiable Instruments Act, 1881. Ss,139 and 138 - Rebuttal of presumption under S.139 - If made out - Accused disputing financial capacity of complainant to pay amount and leading evidence to prove it. Held, accused led probable defence, under such conditions, burden would be on complainant to establish his financial capacity, which he was unable to do.
Hence, acquittal restored."
Judgment 24 C.C.No.14748/2016
I have gone through the above decision. In the present
case on hand, to prove the source of income, complainant has produced his IT returns and statements of account. It is not in dispute that the complainant is a business man, therefore, these documents produced by the complainant made clear that the complainant was having sufficient funds to lend the amount to the accused.
It is worthy to cite the decision reported in AIR 2019 SC 1876 in the case of Rohitbhai Jivanlal Patel V/s State of Gujarat and another, which relied upon by the learned counsel for complainant, wherein, the Hon'ble Apex Court held that:
"(E) Accused not denying his signatures on cheques but attempting to suggest availability of his signatures on blank stamp paper with friend - No cogent reasons for him to sign blank stamp paper - cheques with all relevant particulars are same cheques forming subject-matter of complainant's case
- Accused liable to be convicted."
In another decision reported in AIR 2018 SC 3601 in the case of T.P.Murugan V/s Bojan, which relied upon by the learned counsel for complainant, wherein, the Hon'ble Apex Court held that:
"Dishonour of cheque - Presumption as to enforceable debt - Cheques allegedly issued by accused towards repayment of debt - Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - Behaviour of accused in allegedly issuing 10 blank cheques Judgment 25 C.C.No.14748/2016 back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him
- Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt - Conviction, proper."
s) (2015) 1 SCC 99 in the case of K.Subramani V/s. K.Damodara Naidu.
In the above decision the Hon'ble Apex Court observed that:
"Debt, Financial and Monetary Laws. Negotiable Instruments Act, 1881. Ss.138, 118 and 139. Dishonour of cheque. Legally recoverable debt not proved as complainant could not prove source of income from which alleged loan was made to appellant-accused. Presumption in favour of holder of cheque, hence, held, stood rebutted. Acquittal restored."
I have gone through the above decision.
t) 2012 (3) KCCR 2057 in the case of Veerayya V/s. G.K.Madivalar.
In the above decision it was observed that:
"Section 138 - Offence under - Revision against conviction and sentence under Sections 397 and 401 of Cr.P.C. Complainant's case that he had lent Rs.2,00,000/- to accused and that the cheque was issued in discharge of debt - Except cheque no other document-Complainant running a Tailoring shop on foot path with a tin shed - At no point of time had a bank balance of more than Rs.50,000/-
Judgment 26 C.C.No.14748/2016 No proof as to other source of income from land-No evidence that he had a bank balance of Rs.2 lakhs on the day he has alleged to have advanced the loan- His Civil suit was dismissed as not proved - Accused's contention that cheque given to his counsel was misused by complainant and his advocate."
I have gone through the above decision.
u) In the judgment of Sri. Tarsem Singh V/s. Sri Sukhminder Singh decided on 02.02.1998:
I have gone through the above judgment, it is pertaining to civil case. Therefore, it is not helpful to the accused in support of his contention.
v) Crl.Rev.P.No.106/2005 in the case of Virender Singh V/s. Laxmi Narain & another.
In the above decision it was observed that:
"The court will refuse to enforce an illegal agreement at the instance of a person who is himself a party to an illegality or fraud".
I have gone through the above decision. In the present case, the accused has not proved that the loan agreement is illegal by producing cogent and convincing materials before the court. But he simply denied the issuance of cheque and execution of loan agreement. It is not enough to presume that the accused has not executed the loan agreement in favour favour of complainant and Judgment 27 C.C.No.14748/2016 not issued the questioned cheque for discharge of legally enforceable debt.
14. In the present case on hand, the accused has submitted his written statement under Section 313 (5) of Cr.P.C before the court and taken his defence that the complainant has filed 9 false cases against him alleging that he has committed an offence punishable under Section 138 of Negotiable Instruments Act. The cheques involved in all cases are issued in connection with a same transaction towards repayment of a single debt, 9 blank signed cheques and signed blank stamp papers have been taken by the complainant at the time of the said alleged transaction. He further contended in his 313 (5) of Cr.P.C statement that he did 5 transactions only with the complainant through account i.e., on 20.08.2010 for Rs.5 lakhs, on 20.08.2010 for Rs.5 lakhs, on 19.10.2010 for Rs.31 lakhs, on 07.06.2012 for Rs.10 lakhs and on 00.00.2012 (The said date was mentioned by the accused in his 313(5) statement) for Rs.25 lakhs, in all Rs.76 lakhs and he has not made any other transactions with the complainant.
The accused further contended in his 313(5) statement that towards repayment of the said transactions amount along with interest i.e., on 24.02.2012 for Rs.7,60,000/-, on 20.04.2012 for Rs.6,60,000/-, on 29.10.2014 for Rs.40 lakhs, on 26.04.2012 for Judgment 28 C.C.No.14748/2016 Rs.25.80,000/- and on 25.09.2012 for Rs.10 lakhs, in all Rs.90 lakhs, he repaid to the complainant through cash/cheque/RTGS.
15. I have gone through the Ex.P3 demand notice and Ex.P8 - reply notice, the accused has taken his contention that he has taken an amount of Rs.5 lakhs in two times on 20.08.2010 through cheques bearing Nos.039432 and 039431, Rs.31 lakhs on 19.10.2010 through cheque bearing No.034801 and Rs.10 lakhs on 07.06.2012 through RTGS, total he has received an amount of Rs.51 lakhs from the complainant and the said amount was repaid by him with interest as under:
From 20.09.2010 to 24.04.2012 Rs.5,80,000/- by way of cash, on 24.02.2012 Rs.7,60,000/- through RTGS, on 24.04.2012 for Rs.6,60,000/- through RTGS, from 20.11.2010 to 29.05.2014 for Rs.66,65,000/- by cash and on 29.10.2014 for Rs.40,00,000/-
through ICICI Bank account, from 07.07.2012 to 07.09.2012 for Rs.1,50,000/- by cash and on 25.09.2012 for Rs.10 lakhs through RTGS. In all he repaid Rs.72,45,000/- as interest and Rs.51 lakhs as principal. Further he has contended that at the time of holding the above transaction, the complainant has taken 12 numbers blank signed stamp papers and 12 numbers blank signed undated cheques.
Judgment 29 C.C.No.14748/2016
16. The above contention taken by the accused in the reply notice was denied by the complainant and submitted that the amount paid by the accused pertaining to the different transaction and not the present case cheque transaction and the said amount has been adjusted to the 3 cheques amount out of 12 cheques and he has not filed any complaint against the other 3 cheques.
Now the accused is due to pay the amount of 9 cheques.
17. In support of the above contention, the learned counsel for complainant has relied upon Sections 59 and 60 of Indian Contract Act. Sections 59 and 60 of the Indian Contract Act reads as under:
Application of payment where debt to be discharged is indicated "Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation, or under circumstances implying, that the payment is to be applied to the discharge of some particular debt, the payment if accepted, must be applied accordingly.
Application of payment where debt to be discharged is not indicated "Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debtor, whether its recovery is or is not barred Judgment 30 C.C.No.14748/2016 by the law in force for the time being as to the limitation of suits."
18. On going through the above provisions, it made clear that if the accused has omitted to intimate to which debt the payment is to be made, the complainant may apply it at his discretion to lawful debt actually due and payable to him from the debtor. In the present case, it is not the case of accused that he intimated to adjust the amount to the particular cheque amount. Therefore, in view of the above provision, the complainant is having right to adjust the amount which paid by the accused to any earlier debt due transaction. Therefore, the complainant has adjusted the amount which paid by the accused to the 3 cheques amount and he has not filed the complaint against the said 3 cheques. There is no documents on behalf of accused to believe his version that he has paid the entire amount of 9 cheques including the present case Ex.P1 cheque amount. Therefore, the defence taken by the accused in his 313 (5) of statement as well as reply notice in respect of payment of amount pertaining to Ex.P1-cheque is not acceptable. Further, in support of his contention, the accused has not produced any single piece of documents before the court. Hence, he failed to prove the factum regarding repayment of the Judgment 31 C.C.No.14748/2016 said loan amount with interest to the complainant. Further, in this case, the accused has not choosen to enter into witness box.
It is relevant to cite the decision relied upon by the learned counsel for the complainant reported in 2021 (1) Kar.L.R. 378 (SC) in the case of Sumeti Vij V/s M/s. Paramount Tech Fab Industries, wherein, the Hon'ble Apex Court held that:
"On the ground of "Insufficient funds". Statement recorded u/S. 313 of the Cr.P.C. In the instant case, the appellant has only recorded statement under Section 313 of the Code, and has not adduced any evidence to rebut the presumption that the cheques were issued for consideration. Once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment, and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act."
19. From the point of above dictum, the statement of the accused recorded under Section 313 of Cr.P.C is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused. Therefore, there is no evidence to rebut the presumption that the cheque was not issued for consideration. In the present case on hand, the statement of accused under Section 313 of Cr.P.C was recorded, but in order to Judgment 32 C.C.No.14748/2016 prove his contention taken in 313 (5) of Cr.P.C statement, he has not entered into the witness box, hence, the written statement submitted under Section 313(5) of Cr.P.C is not come with assistance of accused to prove his defence. Hence, he failed to prove the contention taken in his written statement under Section 313 (5) of Cr.P.C.
20. I have carefully gone through the Ex.P10 - Agreement of Loan dated 07.06.2012 and Ex.P11 receipt of old cheque and given fresh cheque to the complainant. In the cross-examination para No.6, the complainant admits that the hand writing of questioned cheque is made by him. The advocate for complainant argued that the complainant has right to fill up the cheque, as such, the complainant has filled up the questioned cheque as per the instructions of accused and he presented the said cheque before his banker for encashment, but the said cheque came to be dishonoured. In support of this contention, the learned counsel for complainant has relied upon Section 20 of Negotiable Instruments Act.
Section 20 of Negotiable Instruments Act, 1881 reads as under:
"Inchoate stamped instruments: Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in Judgment 33 C.C.No.14748/2016 1[India], and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima- facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder."
In view of the above provision complainant can fill up the cheque and submit it for encashment.
21. In the present case on hand, the accused in the cross- examination of PW.1 and his reply notice himself taken stand that he has taken sum of Rs.51 lakhs from complainant and repaid the said amount with interest to the complainant. This contention itself shows that the complainant is having financial capacity to lend the huge amount to the accused. It is not in dispute that the complainant and accused are businessmen. Therefore, the question of not having financial capacity by the complainant does not arise.
22. Exs.P13 to P17 are the ITR-V pertaining to the complainant for the assessment year 2011-2012 to 2015-16. It depicts the Judgment 34 C.C.No.14748/2016 income of complainant for the Assessment year 2011-12 was Rs.8,52,175/-, for the Assessment year 2012-13 was Rs.14,16,251/-, for the Assessment year 2013-14 was Rs.12,46,875/-, for the Assessment year 2014-15 was Rs.3,43,397/- and for the Assessment year 2015-16 was Rs.3,92,488/- respectively. The Exs.P18 to P20 are the Statements of account pertaining to the complainant, it shows that the complainant had transacted through his account crores of money.
23. The learned counsel for complainant argued that mere making a suggestion to the complainant that he has not disclosed the alleged loan transaction in his income tax returns or eliciting the statement from the complainant that he has not disclosed the alleged loan transaction in his income tax returns by itself is not sufficient. In this regard, the learned counsel for complainant has relied upon the decision reported in ILR 2019 KAR 493 in the case of Yogesh Poojary V/s. K.Shankara Bhat, wherein, the Hon'ble High Court of Karnataka was pleased to held that:
"Mere making a suggestion to the complainant that he has not disclosed the alleged loan transaction in his income tax returns or eliciting the statement from the complainant that he has not disclosed the alleged loan transaction in his income tax returns by itself is not Judgment 35 C.C.No.14748/2016 sufficient. It is also required for the accused to establish that the complainant is an income tax assessee or required to be an assessee and that the nature of his income tax assessment and the income tax return which he files, requires him to disclose the alleged transaction or the liability in question. In the absence of eliciting those details, by merely making a suggestion that the alleged debt or liability, has not been reflected in the income tax returns would not by itself suffice to draw an adverse inference and to hold that there was no legally enforceable debt or the presumption standing in favour of the complainant as successfully rebutted by the accused".
24. On going through the said dictum, it is also made clear that in the absence of eliciting those details, by merely making a suggestion that the alleged debt or liability has not been reflected in the income tax returns would not by itself suffice to draw an adverse inference against the complainant.
25. In order to disprove the contention of complainant, the learned counsel for accused has cross-examined the PW.1. In the cross-examination, the learned counsel for accused suggested to PW.1 that:
"ಈ ಪಪಕರಣದಲ ಆರರರಪಗ ರರರ10 ಲಕ ಸಲವನನ ನ ಆರ.ಟ.ಜ.ಎಸ ಮನಖಖತರ ದನಖಕರ07.06.2012 ರಖದನ ವರರವಣ ಮಡದನಖದನ ದರರನಲ ಆರರರಪಸದನಖದರ ಸರ. ನನನ ದರರನಲ ಆರರರಪ ಯವದರ ನ ನನಗ ಮರನಪವತಸಲಲ ಎಖದನ ಆರರರಪಸದನಖದರ ಸರ ."
ಮತತವನನ Judgment 36 C.C.No.14748/2016
26. On going through the above testimony of PW.1, it discloses that he paid loan amount of Rs.10 lakhs to the accused through RTGS and the accused did not repay the said amount to him. The said testimony of PW.1 was not denied by the accused. It clearly manifests that the accused has obtained the loan amount of Rs.10 lakhs from the complainant by way of RTGS.
27. The PW.1, in his cross-examination, further deposed that at the time of obtaining the loan amount of Rs.10 lakhs, the accused got executed a loan agreement and made a receipt/shara as receipt of old cheque and issuance of fresh cheque to him. In support of his contention, the PW.1 got produced the said documents before the court and same were marked as Exs.P10 and P11. The contents of Exs.P10 and P11 documents were not denied by the accused. Ex.P10-Agreement of loan discloses that as per Karnataka Stamp Act, the complainant has paid deficit stamp duty and penalty of Rs.6,050/- to the District Registrar on the agreement of loan. On carefully perusal of the Ex.P10, it discloses that the accused has executed the same in favour of complainant at the time of availment of loan amount of Rs.10 lakhs from the complainant on interest at the rate of 2% p.m. The said condition as well as the remaining terms of agreement of Judgment 37 C.C.No.14748/2016 loan at Ex.P10 were not denied by the accused in the entire cross-examination of PW.1.
28. Further, on carefully perusal of Ex.P11 - receipt/shara (letter) dated 29.07.2013 executed by the accused in favour of complainant. It discloses that the accused has taken loan from the complainant on 07.06.2012, for which towards discharge of his liability, he had issued a cheque bearing No.000026 drawn on Karur Vysya Bank in favour of complainant. As per Reserve Bank new policy, he has taken back the said cheque bearing No.000026 and issued a new cheque bearing No.000063 drawn on Karur Vysya Bank, Rajajinagar Branch, Bengaluru in favour of complainant. In the cross-examination of PW.1, the accused has not denied the execution of Ex.P11 in favour of complainant. It appears that towards discharge of his liability, earlier he got issued a cheque bearing No.000026 in favour of complainant and later, he has taken back the said cheque and issued a fresh cheque bearing No.000063 in favour of complainant for discharge of his legal liability.
29. In the present case, at the time of recording 313 of Cr.P.C statement, the accused denied the availment of loan of Rs.10 lakhs from the complainant. But, during the course of cross- examination of PW.1, he admitted the availment of loan of Rs.10 Judgment 38 C.C.No.14748/2016 lakhs from the complainant on interest basis. It appears that the accused has obtained the loan amount from the complainant on interest basis and in order to escape from his liability, he taken mere plausible defence without any base thereby, he utterly failed to prove his probable defence.
30. The complainant in support of his case choosen to examine one Madan.M as PW.2, who is the witness of Ex.P10. The PW.2 has deposed that totally eleven loan transactions were held between complainant and accused during the year 2010 to 2012. On 07.06.2012, the accused got executed a loan agreement in favour of complainant and on the very same day, the complainant has transferred sum of Rs.10 lakhs through RTGS to the accused and he has witness to the said loan transaction. For repayment of the said loan amount, the accused has issued a cheque bearing No.000026 drawn on Karur Vysya Bank in favour of complainant.
31. In order to disprove the deposition of PW.2, the learned counsel for accused has cross-examined the PW.2 and in the cross-examination, the PW.2 deposed that at the time of executing the Ex.P10 - agreement, he was doing building contract work and he signed the said agreement. Further, in his cross- examination, PW.2 has deposed that:
Judgment 39 C.C.No.14748/2016 "ನನನ ಸಹ ಮಡರನವ ದಖಲಯನ ನಪ-10 ಇರನತತದ. ಸಕಯನ ನಪ-
ನ ನರರಡ ತನನ ಸಹ ಮಡದಗ ಯವ ರರತ ಹಳಗಳನ ಇದದವ 10 ನನ ಅದರ ರರತ ಇವ ಎಖದನ ಹರಳನತತರ. ನಪ-10 ದನಖಕರ20.10.2010 ರಖದನ ಆಗರನತತದ ಎಖದರ ಸರ. ನನನ ಅದರ ದನ ಸಹ ಮಡರನತತರನ."
32. The said testimony of PW.2 was not denied by the accused. It shows that the accused has taken loan amount from complainant and executed the Ex.P10-loan agreement in favour of complainant in the presence of PW.2. In order to disprove the deposition of PW.2, the accused did not produce any cogent and convincing evidence/materials before the court. The evidence of PW.2 is supported to the evidence of PW.1.
33. From the point of above dictums stated supra, in the case on hand, cheque was signed by the accused, therefore, adverse inference has to be drawn against the accused that the said cheque was issued for discharge of existence of legally recoverable debt. In the case on hand, there is no cogent and convincing materials on behalf of accused to believe his version that he has not issued the questioned cheque in favour of complainant for discharge of legally recoverable debt. Therefore, it discloses that the accused has taken plausible defence without any documentary evidence.
Judgment 40 C.C.No.14748/2016 It is relevant to cite the Crl.A.No.123/2021 in the case of M/s. Kalamani Tex and another V/s. P.Balasubramanian, which relied upon by the learned counsel for complainant, w herein, the Hon'ble Apex Court was pleased to held that:
"Para N.14 - Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of Negotiable Instrument Act. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
Further, the Hon'ble Apex Court observed that:
Para No.17: "The appellants have banked upon the evidence of DW.1 to dispute the existence of any recoverable debt. However, his deposition merely highlights that the respondent had an over-extended credit facility with the bank and his failure to update his account led to debt recovery proceedings. Such evidence does not disprove the appellants' liability and has a little bearing on the merits of the respondent's complaint. Similarly, the appellants' mere bald denial regarding genuineness of the Deed of Undertaking dated 07.11.2000, despite admitting the signatures of Appellant No.2 thereupon, does not cast any doubt on the genuineness of the said document."
Judgment 41 C.C.No.14748/2016
34. In view of the above decision, once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. In the present case on hand, the accused herein has admitted the signatures on the questioned cheque at Ex.P1 and loan agreement at Ex.P10 as belong to him.
Therefore, the obligation shifts upon him to discharge the presumption imposed upon him. In the case on hand, I did not find any material to create doubt regarding the genuineness of execution of Ex.P10-loan agreement in favour of complainant and issuance of Ex.P1-cheque in favour of complainant for discharge of legally recoverable debt.
35. On carefully perusal of the loan agreement produced by the complainant it shows that the accused has borrowed sum of Rs.10 lakhs from the complainant and he agreed to repay the same along with 2% monthly interest as stated in the loan agreement and for repayment of the said loan amount along with interest, he has issued Ex.P1-cheque in favour of complainant. There is no cogent and convenience materials on behalf of accused to believe his version that he has not issued the Ex.P1- cheque in favour of complainant for discharge of legally Judgment 42 C.C.No.14748/2016 recoverable debt. Thus the accused has failed to rebut the presumption available under Section 118(a) and 139 of Negotiable Instruments Act in favour of complainant.
36. During the course of cross-examination of PW.1, the learned counsel for accused has suggested to PW.1 that:
"ಆರರರಪಯ ವರನದದ 9 ಚಕ ಬನನ ಪಪಕರಣಗಳನನ
ನ ಒಟಟರ
ರರರ5,79,00,000/- ಹಣಕಕ ಸಖಬಖಧಪಟಟಖತ ದಖಲನ ಮಡದನ. ಎಲ ಲ ಲ 9 ಪಪಕರಣಗಳಲರ ಆರರರಪಗ ನನನ ಸಲದ ರರಪದಲ ಹಣವನನ ನ ಕರಟಟದನಖದನ ಸಧನ ಮಡನತತದನಖದರ ಸರ. ಸಕಯನ ಸಸತರ ಮನಖದನವರದನ ಆರರರಪಗ ನನನ ರರರ3,47,00,000/- ಗಳನನ ನ ಸಲವಗ ನರಡದನ ಎಖಬನದಗ ನನಡಯನತತರ."
37. On going through the testimony of PW.1, it appears that he has instituted nine cases against the accused on the basis of nine cheques issued by accused for Rs.5,79,00,000/-. The said testimony of PW.1 was not denied by the accused.
38. In the present case, the accused has admitted the signatures appear on questioned cheque at Ex.P1 and loan agreement at Ex.P10 as belong to him. When he admits the signatures appear on questioned cheque and loan agreement as belongs to him, then the initial burden on him to prove that he has not issued the questioned cheque for discharge of legally recoverable debt or liability. The accused has denied the Judgment 43 C.C.No.14748/2016 execution of loan agreement in favour of complainant. Mere denial is not sufficient, he should prove it by producing cogent and convincing materials before the court.
It is relevant to cite the decision reported in (2001) 8 SCC 458 in the case of K.N.Beena V/s. Muniyappan and another, wherein, the Hon'ble Apex Court held that:
"In view of the provisions contained in Sections 118 and 139, the court has to presume that the cheque had been issued for discharging a debt or liability. However, the said presumption could be rebutted by the accused by proving the contrary. Mere denial or rebuttal by accused in the reply to the legal notice sent by the complainant not enough. The accused had to prove by cogent evidence that there was no debt or liability."
39. In the present case on hand, the accused did not produce any cogent and convincing evidence before this court to believe that he has not issued the alleged cheque in favour of complainant for discharge of legally recoverable debt. It is the burden on the accused to prove his defence by producing sufficient materials before the court. Mere denial of the same is not enough to believe his defence. The accused without supporting any materials, he cannot say that Ex.P10 agreement is void.
Judgment 44 C.C.No.14748/2016 The learned counsel for accused, in support of his contention of accused, he relied upon Section 65 of the Indian Contract Act, 1872.
Section 65 of the Indian Contract Act reads as under:
Obligation of person who has received advantage under void agreement or contract that becomes void.
When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.
40. In the present case on hand, the accused did not prove that the agreement of loan is void by producing sufficient and cogent materials before the court. He just denied the execution of agreement of loan and issuance of alleged cheque in favour of complainant for discharge of legally recoverable debt. As discussed above and in view of the judgment of Hon'ble Supreme Court in the case of K.N.Beena V/s. Muniyappan and another, mere denial is not sufficient to believe his version.
41. To rebut the presumption under Sections 118 and 139 of Negotiable Instruments Act, the advocate for accused cross- examined the PW.1 and PW.2 in length. The PW.1 and PW.2 did not admit the suggestion made by the learned counsel for Judgment 45 C.C.No.14748/2016 accused in respect of repayment of loan amount. The accused did not prove his initial burden, therefore, question of shifting reverse burden on the complainant does not arise.
42. The learned counsel for the accused cross-examined the PW.1 in length, but nothing is elicited from the mouth of PW.1 to believe the defence taken by the accused. When the accused has admitted the signatures appear on alleged cheque and loan agreement as belong to him, then as per Section 139 of Negotiable Instruments Act, unless contrary is proved the presumption arisen in favour of complainant that the accused has issued the questioned cheque for discharge of legally recoverable debt. It is true that this presumption is rebuttable in nature, but to rebut the presumption, the accused has not produced any cogent and convincing materials before the court. Therefore, the defence taken by the accused is not helpful to him to disbelieve the case of complainant. Thus the accused has failed to rebut the presumption available under Section 118(a) and 139 of Negotiable Instruments Act in favour of complainant.
43. In the present case on hand, I did not find any cogent and convincing evidence/materials on behalf of accused to believe his version that he has not issued the Ex.P1-cheque in favour of complainant for discharge of legally recoverable debt and he has Judgment 46 C.C.No.14748/2016 not executed the loan agreement-Ex.P10. If at all, the accused has not issued the said cheque to the complainant for any debt or liability, definitely, he had every opportunity to give stop payment instructions to his banker against the alleged cheque, but he did not to do so. If he has not issued the questioned cheque to the complainant for discharge of legally recoverable debt, then accused could not have kept silent without taking any action against the complainant. Therefore, this court does not other go then to accept the evidence of PW.1 that the questioned cheque was issued by the accused for discharge of existence of legally recoverable debt. In this case, the service of legal notice sent by complainant to the accused is not in dispute.
44. On overall appraisal of the materials available on record, it is the consider opinion of this court that the accused has failed to discharge initial burden to rebut the statutory presumption as well as the facts and circumstances placed by the complainant in the present case. Thereby, the complainant has proved the guilt of the accused that the accused is liable to pay the amount covered under the Ex.P1-cheque. There is no substance in the probable defence of the accused, whereas the complainant has discharged his burden and proved the guilt of the accused. Therefore, keeping in the mind of the object of introduction of Negotiable Judgment 47 C.C.No.14748/2016 Instruments Act, it appears this court that it is a fit case to convict the accused.
45. Therefore, from the perusal of oral and documentary evidence placed on record it reveals that complainant has made out his case and accused has failed to rebut the presumptions arisen in favour of complainant. Thus complainant has proved that accused has committed an offence punishable under Section 138 of Negotiable Instruments Act beyond all reasonable doubt. Hence, in view of the above said reasons, I hold point No.1 in the Affirmative.
46. Point No.2: In view of my findings on point No.1, I proceed to pass the following:
ORDER Acting under Section 255(2) of Cr.P.C. the accused is convicted for the offence punishable under Section 138 of Negotiable Instruments Act and sentence to pay total fine of Rs.19,50,000/-.
Out of the said fine amount, sum of Rs.19,45,000/- shall be payable to the complainant as compensation as per Section 357 of Cr.P.C. Remaining amount of Rs.5,000/- shall be payable to the state as fine amount.
Judgment 48 C.C.No.14748/2016 In default of payment of fine amount, the accused shall under go simple imprisonment for 01 (One) Year.
The bail bond and cash security/surety bond of the accused stands cancelled.
The office is hereby directed to supply the copy of this Judgment to the accused in free of cost.
(Dictated to Stenographer, transcribed and computerized by him, corrected and then pronounced by me in the open court on this the 9 th day of February - 2022) (N.K.SALAMANTAPI) XXIII Addl. Chief Metropolitan Magistrate, Bengaluru.
ANNEXURE List of Witnesses examined on behalf of Complainant:
PW-1 : Vinod Krishnamurthy PW-2 : Madan.M
List of Exhibits marked on behalf of Complainant:
Ex.P1 : Original Cheque Ex.P1(a) : Signature of accused Ex.P2 : Bank endorsement Ex.P3 : Office copy of legal notice Exs.P4 & P5 : Postal receipts Exs.P6 & P7 : Postal acknowledgment cards Ex.P8 : Common reply Ex.P9 : Private complaint Ex.P9(a) : Signature of complainant Ex.P10 : Agreement of loan Ex.P11 : Shara/receipt letter dtd:29.07.2013 Judgment 49 C.C.No.14748/2016 Ex.P12 : Statement of account Exs.P13 to P17 : ITR-V Exs.P18 to P20 : Statements of account
List of Witnesses examined on behalf of the defence:
- None -
List of Exhibits marked on behalf of defence:
- Nil -
XXIII Addl. Chief Metropolitan Magistrate, Bengaluru.
Judgment 50 C.C.No.14748/2016 09.02.2022. Comp - Accd - For Judgment
Judgment pronounced in the open court vide separate order.
***** ORDER Acting under Section 255(2) of Cr.P.C. the accused is convicted for the offence punishable under Section 138 of Negotiable Instruments Act and sentence to pay total fine of Rs.19,50,000/-.
Out of the said fine amount, sum of Rs.19,45,000/- shall be payable to the complainant as compensation as per Section 357 of Cr.P.C. Remaining amount of Rs.5,000/- shall be payable to the state as fine amount.
In default of payment of fine amount, the accused shall under go simple imprisonment for 01 (One) Year.
The bail bond and cash security/surety bond of the accused stands cancelled.
The office is hereby directed to supply the copy of this Judgment to the accused in free of cost.
XXIII Addl. Chief Metropolitan Magistrate, Bengaluru.
Judgment 51 C.C.No.14748/2016 Later, the convictee's counsel filed application Under Section 389(3) of Cr.P.C seeking for suspend the sentence for the reasons stated in the application.
Heard.
In the present case, the judgment was pronounced and convicted the accused. In view of the same, the convictee's counsel has prayed that to suspend the sentence by appeal period.
For the reasons stated in the application, for the limited period of prefer appeal only, the application filed by the accused counsel under Section 389(3) of Cr.P.C. is hereby partly allowed and sentence is suspended till appeal period only.
The convictee is hereby directed to
execute bond for fine amount of
Rs.19,50,000/.
XXIII ACMM, Bengaluru.