Bangalore District Court
Company Smt.B.G Pushpalatha Examined vs Failed To Pay The Cheque on 8 January, 2020
IN THE COURT OF THE XXVIII ADDL. CHIEF
METROPOLITON MAGISTRATE NRUPATHUNGA ROAD,
BENGALURU CITY
Present:- Sri. ABDUL RAHIM HUSSAIN SHAIKH
B.Sc, B.Ed, LLB(Spl)
XXVIII A.C.M.M
Bengaluru City.
Dated this the 8th day of January, 2020
CC.No.2633/2018
JUDGMENT U/S 355 OF Cr.P.C.
1. Sl.No. of the case : C.C.No.2633/2018
2. The date of commence of Evidence : 21.08.2018
3. The date of Institution : 07.11.2017
4. Name of the Complainant :M/s Shreyas Hind Chits
India Pvt Ltd
Having its Registered
Office at: No.56/1,
3rd floor, 9th main,
Opp:Samskruthi Banquet Hall
5th block, Jayanagar,
Bengaluru-560 041.
Rep. by its authorized
signatory
B.G Pushpalatha
5. Name of the Accused : Mr C. Chandra Shekar
S/o Chinna Raju Naidu,
R/o No.564, 41st cross,
2nd main, 2nd block,
Rajajinagar,
2 CC.No. 2633/2018
Bangalore- 560 010.
6. The offence complained : U/s.138 of N.I. Act
7. Plea of the accused on
his examination : Pleaded not guilty
8. Final Order : Accused is Convicted
9. Date of such order : 08.01.2020
JUDGMENT
1. This case has been registered against the accused on the basis of the complaint filed by the complainant u/s 200 of Cr.P.C for the offence punishable u/s 138 r/w 142 of N.I. Act.
2. The gist of the complainant's case is that :
The Complainant is a registered Chit Fund Company and the accused has subscribed chit group 50LB conducted by the complainant for Rs.50,00,000/- with ticket No.44 which was launched on 15.04.2011 and the said chit group was closed on 15.05.2015. It is further submitted that the accused has successfully bid the chit auction held on 16.01.2012 for the bid amount of Rs.15,00,000/- and received the chit 3 CC.No. 2633/2018 amount from the complainant by executing the chit documents in favour of the complainant. It is further contended that after obtaining the chit prized money the accused has failed to pay the monthly chit installments and was due to pay 28 monthly chit installments amounting to Rs.28,00,000/-. It is the case of the complainant that on demand of payment of due, the accused has issued a cheque bearing No.111402 dated 20.09.2016 for Rs.28,00,000/- drawn on IDBI Bank, Rajkumar road, Rajajinagar Branch, Bengaluru towards the liability and repayment of the above said chit installments amount. Further when the said cheque was presented for encashment through its banker the same was dishonoured for the reasons 'Funds Insufficient' as per the bank memo dated.01.11.2016. It is further contended by the complainant that a notice was issued on 28.11.2016 through RPAD calling upon the accused to pay the cheque amount within 15 days from the 4 CC.No. 2633/2018 date of receipt of the said notice but the accused even after the receipt of the notice on 29.11.2016 has not repaid the cheque amount nor replied to the said notice. Accordingly the complainant filed the complaint against the accused for having committed an offence punishable u/s 138 of N.I. Act.
3. In pursuance of the summons, the accused has appeared through Counsel and got enlarged on bail by executing necessary documents. The copy of the complaint was furnished to the accused, as required under law. As there is sufficient material, plea was recorded against the accused on 06.07.2018 and explained to the accused in his vernacular, for which the accused pleaded not guilty and claims to be tried.
4. In order to prove the case, the Director of the complainant Company Smt.B.G Pushpalatha examined as PW1 and got marked Ex.P1 to 14. Then the statement u/s 313 Cr.P.C came to be recorded on 5 CC.No. 2633/2018 30.11.2018, wherein the incriminating evidence appearing against the accused was read over and explained. Accused denied the incriminating evidence readover to them. Accused examined himself as DW1 and got marked Ex.D1 to 3 on his behalf.
5. The learned Counsel for complainant argued that Complainant is a registered Chit Fund Company and the accused has subscribed chit group 50LB conducted by the complainant for Rs.50,00,000/- with ticket No.44 which was launched on 15.04.2011 and the said chit group was closed on 15.05.2015. It is further submitted that the accused has successfully bid the chit auction held on 16.01.2012 for the bid amount of Rs.15,00,000/- and received the chit amount from the complainant by executing the chit documents in favour of the complainant. It is further contended that after obtaining the chit prized money the accused has failed to pay the monthly chit installments and was due to pay 28 monthly chit 6 CC.No. 2633/2018 installments amounting to Rs.28,00,000/-. It is the case of the complainant that on demand of payment of due, the accused has issued a cheque bearing No.111402 dated 20.09.2016 for Rs.28,00,000/- drawn on IDBI Bank, Rajkumar road, Rajajinagar Branch, Bengaluru towards the liability and repayment of the above said chit installments amount. Further when the said cheque was presented for encashment through its banker the same was dishonoured for the reasons 'Funds Insufficient' as per the bank memo dated.01.11.2016. It is further contended by the complainant that a notice was issued on 28.11.2016 through RPAD calling upon the accused to pay the cheque amount within 15 days from the date of receipt of the said notice but the accused even after the receipt of the notice on 29.11.2016 has not repaid the cheque amount nor replied to the said notice. Accordingly the complainant filed the complaint against the accused for having committed an offence 7 CC.No. 2633/2018 punishable u/s 138 of N.I. Act. Hence prayed to convict the accused. In support of his contention the advocate of complainant produced the following citations:-
1. (2008) 2 SCC (Cri) 677 Nagappa v/s Y.R Muralidhar
2.(2001) 8 SCC 458 K.N Beena v/s Muniyappan and Anr
3.(2009)2 SCC 513 Kumar Exports v/s Sharma Exports.
4.(2010) 11 Supreme Curt Cases 411, Rangappa v/s Mohan
5.(2012)13 SCC 375 Laxmi Denchem v/s State of Gujarath
6. (2019) 4 SCC 197 Bir singh v/s Mukesh Kumar
7.(2009) 5 SCC (Civ) 384 M.D Thomas v/s P.S Jallel.
6. The learned Counsel for accused contended that he was the member for the chit at complainant company in the year 2012 and for bidding the said chit 8 CC.No. 2633/2018 on the 10th installment received Rs.40,00,000/- through cheques. It is contended by the accused that on 27.12.2013 he paid an amount of Rs.8,00,000/-, on 15.05.2014 an amount of Rs.9,00,000/- and on 15.02.2015 paid an amount of Rs.8,16,500/- to the complainant and has obtained the receipts regarding the payment. It is the main contention of the accused is that the complainant has not paid dividend amount to the accused and by misusing the cheques which has been hand over for security have filed this false complaint against the accused. It is also contended that the entire chit amount has been repaid and there is no due to be paid to the complainant, in view of it the compliant has to be dismissed. In support of his contention the advocate for accused produced the following citations:--
1. MANU/ KA/2371/2014 HICH COURT OF KARNATAKA, Cri. Revision Petition NO.129/2013, George Joseph v/s HMT (International) Limited.9 CC.No. 2633/2018
2. MANU/KA/1861/2013, Crl. Appeal No.1419/2006, CREF FINNANCE LIMITED V/S SREE SHANTHI HOMES PRIVATE LIMTIED.
3. ILR 2013 KAR 559, M/s Shriram Chits (K) Pvt Ltd, Bangalore v/s The Additional Registrar of Cooperative Societies.
4.CRL.P.NO.1387/2019 DATED:06.07.2018 HIGH COURT OF KARNATAKA, R. Parimala Bai v/s Bhaskar Narasimhaiah 5.2018(2) AKR 440 Branch Manager, PCA & RD Bank Ltd v/s Suresh Ganapathi Das
6.MANU/KA/1250/2018, Veeresh Finance Corporation v/s Shivakumar
7.(2019)5 SUPREME COURT CASES 418, Basalingappa v/s Mudibasappa.
8.MANU/KA/0777/2018, Nagendra Credit cooperative Society Ltd v/s J. Nanda Kumar
9.MANU/KA/0309/2009, 10.2009, CRI.L.J 3777, Sanjay Mishra v/s Ms. Kanishka Kapoor @ Nikki and Anr.
7. Heard the arguments and perused the material placed on record.
8. On the basis of the above facts, the following 10 CC.No. 2633/2018 points arise for my consideration:
1. Whether the complainant proves that the accused towards discharge of legal recoverable debt issued cheque bearing No.111402 dated 20.09.2016, for Rs.28,00,000/- drawn on IDBI Bank , Rajakumar road, Rajajinagar branch, Bengaluru in favour of complainant, on presentation for encashment it was returned as 'Funds Insufficient' and inspite of receipt of legal notice, the accused failed to pay the cheque amount within the statutory period and thereby the accused has committed an offence punishable u/s 138 of N.I. Act?
2. What order?
9. 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:- In order to prove the case, the 11 CC.No. 2633/2018 Director of the complainant company Smt. B.G Pushpalatha filed affidavit in lieu of examination-in-
chief and has reiterated the allegations made in the complaint on oath. She also got marked documents Ex.P1 to Ex.P14. On perusal of document Ex.P1 it is found that it is the c/c of incorporation certificate issued by the Registrar of companies which holds that the company is registered as per the guidelines of companies Act 1956. Further in the evidence the complainant has produced Ex.P2 the order passed by the Registrar of chits permitting the complainant company to continue the recovery proceedings on conditions. From this document it is crystal clear that the complainant companies incorporation is not denied by the chit registrar but has permitted the complainant firm to restart the chit business for the recovery of the amount due in various chits from its customers. It is also equally important that the accused counsel though denied the incorporation 12 CC.No. 2633/2018 certificate of the complainant company Ex.P1 and the order of the chit registrar permitting to recover the chit amount as per Ex.P2, in the cross examination of PW1 but have not produced any relevant document to disprove Ex.P1 incorporation certificate and Ex.2 the order of the chit registrar issued to start the chit business and recover the amount. In view of the same the incorporation certificate Ex.P1 and the order of the chit registrar Ex.P2 remained unchallenged.
11. Further in the evidence PW1 has produced Ex.P3 authorization letter for having been authorized to represent by the complainant company to contest the case against the accused. It is important to note that though PW1 was cross examined that she has no authority to contest the case but no cogent evidence and relevant document have been produced by the complainant to disprove the authorization of the complainant /PW1. It is very pertinent to note that the complainant counsel has vehemently argued that PW1 13 CC.No. 2633/2018 had an authority to represent the case being a director of the firm and she is also duly authorized by another managing director to contest the case on behalf of the complainant. On perusal of Ex.P1 authorization letter it is found that the managing director of the company has authorized the complainant who is also the director of the company to contest the case on behalf of the company. In the instant case it is found that PW1 herself is a director of the company and also was authorized by another managing director of the complainant company as per Ex.P3 to contest the case on behalf of the complainant against the accused. In view of the evidence of PW1 and the documentary evidence Ex.P3 it is crystal clear that PW1 being the director of the company is duly authorized to contest the case on behalf of the complainant.
12. In order to support his case the accused has relied on a ruling reported in:
THE HIGH COURT OF KARNATAKA , CRIMINAL 14 CC.No. 2633/2018 REVISION PETITON No.129/ 2013, George Joseph v/s HMT (International) Limited.
It is contended that the complainant on behalf of company was prosecuted by person who was not duly authorize to do so. Article of association of company has to confirm the power on directors to sue or depend any proceedings on behalf of the company. Delegation of such power could only be by resolution of board of directors. It is clearly held that mere letter of authorization or power of attorney executed by Chairman or other officer of the company without delegation of power to institute such proceedings having emanated by board of directors, would invalidate any proceedings brought without any necessary authority. This ruling is not applicable to the case of the accused since the complainant the director of the complainant company has produced the authorization Ex.P3 issued by the remaining sole Managing director her husband to prosecute the case on behalf of the company. In the referred case the 15 CC.No. 2633/2018 proceedings to be held to be vitiated for want of authority to prosecute the complainant on behalf of company by power of attorney holder. In the instant case the complainant herself is the director and as per the resolution Ex.P3 she has been directed to conduct the case on behalf of the complainant company.
13. Accused is also relied on another judgment reported in:
THE HIGH COURT OF KARNATAKA, CRIMINAL APPEAL NO.1419 OF 2006, CREF Finance Limted v/s Sree Shanthi Homes Private Limited This ruling is also not applicable to the present case of the accused since the complainant has proved beyond all reasonable doubt that she has been authorize to contest the case as per the board resolution Ex.P3 on behalf of the complainant against the accused.
14. In the evidence PW1 deposed that accused has subscribed chit group 50LB conducted by the complainant for Rs.50,00,000/- with ticket No.44 16 CC.No. 2633/2018 which was launched on 15.04.2011 and the said chit group was closed on 15.05.2015. Further it is the case of the complainant in her evidence that the accused has successfully bid the chit auction held on 16.01.2012 for the bid amount of Rs.15,00,000/- and received the chit amount from the complainant by executing the chit documents in favour of the complainant and after obtaining the chit prized money the accused has failed to pay the monthly chit installments and was due to pay 28 monthly chit installments amounting to Rs.28,00,000/-. Further it is the contention of the complainant that accused was default of in payment of monthly installment and on demand of payment of due, the accused has issued a cheque bearing No.111402 dated 20.09.2016 for Rs.28,00,000/- drawn on IDBI Bank, Rajkumar road, Rajajinagar Branch, Bengaluru towards the liability and repayment of the above said chit installments amount. It is further evidence of PW1 that when the 17 CC.No. 2633/2018 said cheque was presented for encashment through its banker the same was dishonoured for the reasons 'Funds Insufficient' as per the bank memo dated.01.11.2016. In order to prove the said fact the complainant has produced the chit agreement Ex.P4 with signature Ex.P4(a) on the said chit agreement. On demand promissory note Ex.P7 with signature Ex.PxP7(a) and receipt Ex.P6 and the signature of the accused Ex.P6(a) & 6(b) and chit auction minute Ex.P5. It is very pertinent to note that the entire facts has been admitted by the accused/DW1 in his evidence. The relevant portion of cross examination of DW1 at page 3 which is as follows:-
" £Á£ÀÄ ºÀvÀÛ£Éà vÀgÀUÀwªÀgÉUÉ «zÁå¨sÁå¸À ªÀiÁrzÉÝãÉ. £À£ÀUÉ F ¥ÀæPÀgÀtzÀ aÃn ªÀåªÀºÁgÀzÀ §UÉÎ ¸ÀA¥ÀÇtð ªÀiÁ»w EzÉ JAzÀgÉ ¸ÁQëAiÀÄÄ aÃn ¸ÀzÀ¸Àå£ÁzÀ §UÉÎ ªÀÄvÀÄÛ aÃn ©qï ªÀiÁr ºÀt ¥ÀqÀzÀÄPÉÆAqÀ §UÉÎ ªÀiÁvÀæ ªÀiÁ»w EzÉ JAzÀÄ £ÀÄrAiÀÄÄvÁÛgÉ. £Á£ÀÄ ¦gÁå¢ ¸ÀA¸ÉÜAiÀÄ°è 50 ®PÀë ªÉÆvÀÛzÀ aÃnUÉ ¸ÀzÀ¸Àå£ÁVzÉÝ JAzÀgÉ ¸Àj. £Á£ÀÄ ºÀvÀÛ£Éà PÀAw£À ¸ÀªÀÄAiÀÄzÀ®°è 10 ®PÀë ªÉÆvÀÛPÉÌ aÃnAiÀÄ£ÀÄß ©qï ªÀiÁr 40 ®PÀë ºÀtªÀ£ÀÄß ¥ÀqÉzÀÄPÉÆArzÉÝãÉ. 18 CC.No. 2633/2018 ¸ÀzÀj 40 ®PÀë ºÀtªÀ£ÀÄß ¦gÁå¢ ¸ÀA¸ÉÜAiÀĪÀgÀÄ 3 PÀAvÀÄUÀ¼À°è £À£ÀUÉ ¥ÁªÀw ªÀiÁrzÁÝgÉ. £À£ÀUÉ ¦gÁå¢ ¸ÀA¸ÉܬÄAzÀ ¥Á¸ï ¥ÀŸÀÛPÀ ¤ÃqÀ¯ÁVzÉ JAzÀgÉ ¸ÁQëAiÀÄÄ ¸ÀjAiÀÄ®è J£ÀÄßvÁÛgÉ.
¤¦6 gÀ°ègÀĪÀ ¸À»AiÀÄ£ÀÄß ¸ÁQëUÉ vÉÆÃj¸À¯ÁzÀ ¸ÀzÀj ¸À»AiÀÄ£ÀÄß M¦àzÀÝjAzÀ ¤¦6J ªÀÄvÀÄÛ ¤¦6© JAzÀÄ UÀÄgÀÄw¸À¯Á¬ÄvÀÄ. ¸ÁQëAiÀÄÄ ¤¦7 gÀ°ègÀĪÀ ¸À»AiÀÄ£ÀÄß M¦àzÀÄÝ ¤¦7 JAzÀÄ UÀÄgÀÄw¸À¯Á¬ÄvÀÄ. ¸ÁQëUÉ ¤¦4 zÁR¯ÉAiÀÄ£ÀÄß vÉÆÃj¸À¯ÁV ¸ÀzÀj zÁR¯ÉAiÀÄ°ègÀĪÀ ¸À»AiÀÄ£ÀÄß ¸ÁQëAiÀÄÄ M¦àzÀÄÝ ¤¦4J JAzÀÄ UÀÄgÀÄw¸À¯Á¬ÄvÀÄ. CzÉà jÃw ¸ÁQëUÉ ¤¦5 gÀ°ègÀĪÀ ¸À»AiÀÄ£ÀÄß vÉÆÃj¸À¯ÁV ¸ÁQëAiÀÄÄ ¸ÀzÀj ¸À»AiÀÄ£ÀÄß M¦àzÝÀjAzÀ ¤¦5J JAzÀÄ UÀÄgÀÄw¸À¯Á¬ÄvÀÄ. £Á£ÀÄ MlÄÖ gÀÆ.25,16,500 ºÀtªÀ£ÀÄß ¥ÁªÀw¹zÀ §UÉÎ gÀ¹Ã¢UÀ¼À£ÀÄß ºÁdj¸À¯ÁVzÉ JAzÀgÉ ¸ÁQëAiÀÄÄ F »AzÉ ¸ÀºÀ £Á£ÀÄ ¦gÁå¢ ¸ÀA¸ÉÜUÉ ºÀtªÀ£ÀÄß ªÀÄgÀÄ¥ÁªÀw ªÀiÁrzÀÄÝ ¸ÀzÀj ºÀtPÉÌ ¦gÁå¢ ¸ÀA¸ÉÜAiÀĪÀgÀÄ gÀ¹Ã¢ ¤Ãr®è JAzÀÄ £ÀÄrAiÀÄÄvÁÛgÉ. "
This admission of DW1 makes it crystal clear that accused admits the oral and documentary evidence of the complainant that he was the member of the chit for an amount of Rs.50,00,000/- and by bidding the said amount of Rs.10,00,000/- has obtained an amount of Rs.40,00,000/- in three installments through cheques. It is also admitted by DW1/ accused that he has 19 CC.No. 2633/2018 executed On Demand Promissory Note Ex.P7 with signature Ex.P7(a) and also has executed receipt for having received the said amount as per Ex.P6 with signature Ex.P6(a) and Ex.P6(b). In support of the case the complainant has also produced Ex.P14 the bank statement to show that the amount of Rs.40,00,000/- has been disbursed through cheques to the accused. In view of no disputed between both the parties regarding accused subscribing the chit and participating in the bid and received Rs.40,00,000/- from the complainant company the said chits stand proved. In the cross examination the accused counsel had taken the contention that the chit agreement was not registered and it was carried illegally with the motive of extracting money from the public but the admission of DW1 in his evidence shatters the defence of the accused regarding the authentication of chit proceedings. The document Ex.P2 also clearly discloses that the complainant has been duly 20 CC.No. 2633/2018 permitted to continuing the chits regarding the recovery of the money. At this juncture it is important to note that if at all as per the contention of the accused a chit agreement was in valid definitely the Sub registrar of chit would have never permitted the complainant company to continue the chit business as per Ex.P2.
15. Accused has relied on the ruling reported in:
ILR 2013 KAR 559 M/s Sriram chits (K) Pvt Ltd, Bangalore v/s The Additional Registrar of Cooperative Societies, (Industrial Coop., Societies) and others.
Peruse the said ruling and found that the said ruling is not applicable to the present facts and circumstances of the accused case. In the said relied judgment the point for consideration is whether the chit has been registered and a previous sanction has been obtained and if the complainant failed to prove than they are not entitle for the relief. In the instant case the document Ex.P2 the permission of the chit registrar 21 CC.No. 2633/2018 and also chit agreement Ex.P4 executed by the accused is sufficient to prove that the chit transaction is valid.
16. At this juncture I would like to discuss the ruling reported in AIR 2018 Hon'ble Supreme Court 3601 (T.P Murugan (Dead) Thr.Lrs.V Bojan AND Posa Nandhi Rep.Thr, POA Holder, T.P Murugan v. Bojan) Negotiable Instruments Act (26 of 1881), S. 118, S. 138, S.139- Dishonour of cheque- Presumption as to enforceable debt-Cheques allegedly issued by accused towards repayment of debt-Defence of accused that 10 cheques issued towards repayment of loan back in 1995-Behaviour of accused in allegedly issuing 10 blank cheques back in 1996 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 22 CC.No. 2633/2018 of cheques towards discharge of such debt- Conviction, proper.
In this ruling at para-8 the Hon'ble Supreme Court has laid down the dictum of law that u/s 139 of the N.I Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability by referring to K.N.Beena v/s Muniyappan and Another, (2001) 8 SCC 458, para-6 and Rangappa v/s Shrimohan (2010) 11 SCC 411, para 26 . It is further held that the presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan.
The accused had admitted the cheque Ex.P8 and the signature Ex.P8(a) on the said cheque and also admitted the execution of On Demand Pronote Ex.P7 with his signature Ex.P7(a), Ex.P6 the receipts with signature Ex.P6(a) and Ex.P6(b) and chit auction 23 CC.No. 2633/2018 minute Ex.P5 but only contended that the cheque which has issued for security has been misused by the complainant without returning the same even after the payment of entire amount. The ruling is aptly applicable to the present case on hand since in this case also accused had obtained the chit amount in the year 2012 by executing the pronote Ex.P7 and the payment voucher Ex.P6 but has never taken legal action against the complainant for not returning the said cheques even after payment of the entire amount.
17. The oral and documentary evidence before the court clearly discloses that accused has not paid the entire chit amount due to the complainant company. The receipt Ex.D1 to D3 that has been produced by the accused is only for Rs.25,16,500/-. Per contra, the contention of the complainant in her evidence accused was in due for the payment of Rs.28,00,000/- and towards the discharge of the said liability had executed the cheque Ex.P8 for the said amount. It is very 24 CC.No. 2633/2018 pertinent to note that though accused had contended that he has made payment of the entire chit amount but has not produced any cogent evidence and relevant document to prove that accused has repaid the amount and he is not in due of payment.
18. In the cross examination of PW1 the accused counsel had taken the contention that the ink that has been used for signature of the accused and filling the content of the cheque are different but the said suggestion is denied by the complainant. The relevant portion of cross examination of PW1 by the accused counsel regarding the said aspect is as follows:-
" ¤¦8 ZÉPï£À°è DgÉÆævÀ£À ¸À» ªÀiÁqÀ®Ä §¼À¹zÀ ±Á»UÀÆ ªÀÄvÀÄÛ G½zÀ §gÀºÀ §gÉAiÀÄ®Ä §¼À¹zÀ ±Á»UÀÆ ªÀåvÁå¸À«zÉ JAzÀgÉ ¸ÀjAiÀÄ®è. "
It is very pertinent to note that the Hon'ble Supreme Court has clearly laid down the dictum of law that even if there is a difference in the writing in the cheque that will not invalidate the cheque disputed by the 25 CC.No. 2633/2018 accused issued in discharge of legal debt.
19. On this point I would like to discuss the ruling produced by the complainant:
2019 SAR 2446 (Criminal) 309 Supreme Court, ( Bir Singh v/s Mukesh Kumar).
(E) Negotiable Instruments Act (26 of 1881), S, 138, 139 - Dishonour of cheque - Presumption as to legally enforceable debt - Rebuttal - Onus to rebut presumption that cheque issued in discharge of debt or liability is on accused. (Para 36) (G)Negotiable Instruments Act, (26 of 1881), Ss.138, 139 - Presumption as to legally enforceable debt - Rebuttal - Signed blank cheque- If voluntarily presented to payee, towards payment, payee may fill up amount and other particulars and it in itself would not invalidate cheque - Onus would still be on accused to prove that cheque was not issued for discharge of debt or liability by adducing evidence.
(Para-38).
26 CC.No. 2633/2018(H) Negotiable Instruments Act (26 of 1881), Ss, 138- Dishonour of cheque - Complainant can fill up amount or particulars in blank cheque. (Para 38). (J)Negotiable Instrument Act 26 of 1881), Ss. 138, 139 - Dishonour of cheque - Absence of finding that cheque was not signed by accused or not voluntarily made over to payee- No evidence regarding circumstances in which blank signed cheque given to complainant - Cheque presumed to be filled in by complainant being payee in presence of accused, at his request or with his acquiescence- No change in amount, its date or name of payee- Subsequent filing in of an unfilled signed cheque is not alteration- Accused liable to be convicted. This ruling is applicable to the present facts and circumstances of the case since in para-36, 37, 38 & 40 the Hon'ble Supreme court has clearly laid down the dictum of law that the onus to rebut the presumption u/s 139 that the cheque has been issued in discharge 27 CC.No. 2633/2018 of a debt or liability is on the accused and the fact that the cheque may be post dated does not absolve the drawer of the cheque of a penal consequences of sec.138 of the N.I Act. In the cross examination of PW1 the accused counsel has taken the contention that other than the signature of the accused in the disputed cheque Ex.P8 the remaining portion have been filled as per the convenience by the complainant and by misusing the same false complaint has been filed against the accused.
20. In view of the dictum of law laid down by the Hon'ble Supreme Court the contention that has been taken by the accused counsel in the cross examination that the dispute cheque Ex.P8 has been filled by using different inks and in different handwritings as per the convenience by the complainant cannot be taken into consideration and accepted. On perusal of the said ruling the Hon'ble Supreme Court had made it very clear that if a signed blank cheque is voluntarily 28 CC.No. 2633/2018 presented to a payee, towards some payment, the payee may fill of the amount and other particulars. This in itself would not invalidate the cheque. The Onus would still be on the accused to prove that the cheque was not in discharge of debt or liability by adducing evidence. It is further held that even blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption u/s 139 of the Negotiable Instrument Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. It is also held that the provisions of Sec.20, 87 and 139 makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. In the instant case there is clear 29 CC.No. 2633/2018 admission by the accused that the disputed cheque Ex.P8 and the signature Ex.P8(a) on the said cheque belongs to him. In view of the dictum of law laid down in the above referred judgment and on appreciating the evidence of the accused and complainant it is crystal clear that the accused failed to rebut the presumption existing u/s 139 N.I Act in favour of the complainant.
21. At this juncture I would like to discuss the ruling reported in:
AIR 2019 SUPREME COURT 1876 Rohitbhai Jivanlal Patel v/s State of Gujarat and another (A)Negotiable Instruments Act (26 of 1881), Ss. 138, 139 - Dishonour of cheque - Rule of Presumption of innocence of accused - Cannot be applied with same rigour to offence u/s 138, particularly where presumption is drawn that holder received the cheque for discharge, the debt or liability. 30 CC.No. 2633/2018
(B) Negotiable Instruments Act (26 of 1881), Ss.118, 138 - Dishonour of cheque - Presumption in favour of holder - All basic ingredients of Ss.138, 118 and 139 are apparent on fact of record - Therefore, it is required to be presumed that cheques in question were drawn for consideration and complainant received it is discharge of an existing debt. (D) Negotiable Instruments Act (26 of 1881), Ss. 138, 139 - Dishonour of cheque - Principles of presumption - Once presumption of existence of legally enforceable debt drawn in favour of complainant, onus is shifted on accused - unless onus is discharged by accused that preponderance of probabilities are tilting in his favour, doubt on case of complainant cannot be raised for want of evidence regarding source of funds for advancing loan to accused.
On perusal of the ruling it is found that the ruling is applicable to the present facts and circumstances of the 31 CC.No. 2633/2018 case. It is clearly held that All basic ingredients of Ss.138, 118 and 139 are apparent on fact of record than it has to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e a complainant has received the same in discharge of an existing debt. The onus shifts on the accused who established probable defence so as to rebut such a presumption but in this case the accused though contended that he has repaid the entire amount but has not produced materialist evidence regarding the repayment of entire chit amount. The documents that has been produced by the accused Ex.D1 to D3 discloses that only a part of amount has been paid by the accused. Further the pass book that has been issued by the complainant company to the accused is not produced by the accused which would have clearly revealed the exact amount that has been repaid by the accused. In the cross examination DW1 it was the contention of the accused that though he has made 32 CC.No. 2633/2018 payment but the complainant has not issued him the receipts for the said payment but the said contention cannot be accepted for the reason that it was the duty of the accused to approach the complainant office to issue him the receipt for the payment he has made. In the instant case it is also admitted by the accused that he has not taken any criminal action against the complainant company nor have issued any notice for not issuing him the receipts for the payment he has made and for not issuing NOC after the entire payment has been made. In the absence of the same the contention of the accused that he has repaid the entire amount and he is not due for payment on the date of issuing of the cheque cannot be accepted and considered.
22. From the dictum of law laid down in the aforesaid decisions the Hon'ble Apex Court has clearly held that sec.139 introduces an exception to the general rule as to the burden of proof and shifts the 33 CC.No. 2633/2018 onus on the accused and that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge or a liability. Hence, in the instant case the accused has utterly failed to rebut the presumptions under Sec.139 of the Negotiable Instrument Act exist in favour of the complainant by producing cogent and relevant documents and accordingly he is not entitled for the relief claimed in his defence.
23. In the instant case, PW1 has deposed that the complainant company had issued a legal notice Ex.P10 dt:28.11.2016 and the same was duly served as per the postal receipts Ex.P10(a) and postal acknowledgment Ex.P11. It is pertinent to note that, accused has replied to the said notice on 15.12.2016 as per the document Reply notice Ex.P12 and the postal cover Ex.P12(a). On perusal of Ex.P12 it 34 CC.No. 2633/2018 discloses that the notice has been duly served to the proper address of the accused and he has denied the claim of the complainant contending that he is not in due for payment of the amount claimed in the disputed cheque. It is very pertinent to note that nowhere in the cross examination of PW1 nor in the evidence of DW1 the accused had denied that he has not received the legal notice as per Ex.P10. In view of the same the complainant has proved beyond all reasonable doubt that he has complied the provisions of Sec.138(b) of N.I Act by issuing the notice to the proper address of the accused which has been duly acknowledged.
24. On this point I would like to discuss the ruling of the Hon'ble Apex Court of India produced by the complainant reported in:
2007 AIR SCW 3578 (C.C.Avavi Haji v/s Palapetty Muhammed & Anor).
On perusal the said ruling it is found that the Hon'ble Supreme Court held at para- 8 that :35 CC.No. 2633/2018
Sec.138 of the act does not require that the notice should be given only by 'post', yet in a case where the sender as a dispatched the notice by post with correct address written on it, the principle incorporated in section 27 of the General Clause Act 1897 (for short GC Act) could profitably be imported in such a case. It was held that in this situation service of notice is deemed to have been affected on the sendee unless he proves that it was not really served and that he was not responsible for such non service. Further at para -10 it is held that : The requirement of clause (b) of the provisions of Sec.138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in clause (c) of the said proviso to Sec.138 for payment by the drawer of the cheque. Nevertheless it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice are brought to his address. This ruling is aptly applicable to the present case on the hand since the notice as per Ex.P10 is duly served to the proper address of the 36 CC.No. 2633/2018 accused and the same has been duly acknowledged as per Ex.P11/acknowledgment and reply notice Ex.P12. From this reasons and discussion it is found that the complainant has duly complied the provisions of Sec.138(b) by issuing notice to the accused on his proper address before filing the complaint.
25. The word 'unless contrary is proved' is discussed by the Hon'ble Apex Court in a decision reported in 2011 Crl.L.J 4647 (SC). It is observed that "the accused is under the obligation to prove his case in trial by leading cogent evidence that there was no debt or liability to the satisfaction of the Court". 'Unless contrary is proved' means the presumption has to be rebutted by proof and not by a bare explanation which is mere plausible. The said fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that the reasonable man could act on the supposition that it 37 CC.No. 2633/2018 exist. Therefore, unless explanation is supported by proof, the presumption created by the provisions cannot be said to be rebutted. In the instant case also accused though had taken the defence that, he has made the entire payment and he is not in due of the amount as mentioned in the disputed cheque but failed to rebut the presumption by proving his defence. On appreciation of material on record and in the light of the judgments discussed above it is clearly established that the accused has failed to discharge his obligation to rebut the presumption of enforceable debt -liability under section 139 of the N.I Act and accordingly, I have no hesitation to arrive at the conclusion that accused has utterly failed to rebut the presumption.
26. On appreciation of entire evidence, this Court is of the opinion that the accused has miserably failed to prove the fact that he has not issued cheque for discharge of legally enforceable debt. On the contrary, the complainant has proved that the accused has 38 CC.No. 2633/2018 issued cheque/Ex.P8 for a sum of Rs.28,00,000/- towards discharge of legally enforceable debt and on presentation of the cheque, it was dishonored for the reasons 'Funds Insufficient'. Further it is proved by the complainant that after service of legal notice, the accused has not replied the notice and has not paid the cheque amount. Hence, in the considered view of this Court, the complainant has complied the provisions of Sec.142 and Sec. 138 of N.I. Act. Hence, I answer the above point No.1 in the affirmative.
27. Point No.2:- From the material from record it appears that accused is 57 years & doing business. Considering the age and avocation of the accused, also quantum of accused if the accused is sent to jail it will cause hardship to the accused and the family members. Having regard to the said facts and circumstance, prevailing rate of interest in the nationalized bank and litigation expenses I proceed to pass the following: 39 CC.No. 2633/2018
ORDER The accused is found guilty for the offence punishable u/s 138 of N.I. Act.
Acting u/s 255(2) of Cr.P.C. the accused is convicted and sentenced to pay fine of Rs.40,05,000/-, in default shall undergo simple imprisonment for six months.
Out of fine amount of Rs.40,05,000/- a sum of Rs.40,00,000/- is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/- shall be remitted to the State.
The bail bond executed by the accused shall stand cancelled.
Supply free copy of the judgment to the accused. (Dictated to Stenographer directly on the Computer, taken print out corrected, signed by me and then pronounced in the open court this the 8th day of January, 2020) (ABDUL RAHIM HUSSAIN SHAIKH) XXVIII Addl. Chief Metropolitan Magistrate, Bangaluru.40 CC.No. 2633/2018
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:-
PW1 : Smt. B.G Pushpalatha LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENCE:-
DW1 : Sri. C. Chandrashekar LIST OF DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:-
Ex.P1 : C/c of incorporation certificate Ex.P2 : Chit commencement permission letter Ex.P3 : C/c of authorization Ex.P4 : Chit agreement Ex.P5 : Chit auction minute Ex.P6 : Receipt Ex.P7 : On Demand Promissory note Ex.P8 : Cheque Ex.P8(a) : Signature of the accused Ex.P9 : Bank Memo Ex.P10 : Office copy of the legal notice Ex.P10(a) : Postal receipt Ex.P10(b) : Courier receipt Ex.P11 : Postal acknowledgment Ex.P12 : Reply Notice Ex.P12(a) : Cover Ex.P13 : Complaint Ex.P14 : Account Statement LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENCE:-
Ex.D1 to D3 : Receipts XXVIII Addl. Chief Metropolitan Magistrate, Bengaluru.41 CC.No. 2633/2018
Judgment pronounced in the open court vide separate order.
ORDER The accused is found guilty for the offence punishable u/s 138 of N.I. Act.
Acting u/s 255(2) of Cr.P.C. the accused is convicted and sentenced to pay fine of Rs.40,05,000/-, in default shall undergo simple imprisonment for six months.
Out of fine amount of Rs.40,05,000/- a sum of Rs.40,00,000/- is ordered to be paid to the complainant towards compensation u/s 357(3) of Cr.P.C. and the balance amount of Rs.5,000/- shall be remitted to the State.
The bail bond executed by the accused shall stand cancelled.
Supply free copy of the judgment to the accused.
XXVIII A.C.M.M, Bangaluru.