Bangalore District Court
Sri. Raju. H.M vs Sri. Ramesh Kadalur on 18 March, 2020
1 C.C.No.28947/2017 J
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
Dated:- This the 18th day of March 2020
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.28947/2017
Complainant : Sri. Raju. H.M
S/o. Late Madegowda,
Aged about 53 years,
Residing at No.18/A,
Opposite Medisola Hospital,
Vinayaka Layout,
Jnanabharathi,
Nagadevahalli Post,
Kengeri,
Bengaluru -560 056.
(By Sri. L.T.Gopal, H.C.Rajesh.,
Advs.,)
- Vs -
Accused : Sri. Ramesh Kadalur,
S/o. Bommegowda,
Aged about 57 years,
Residing at No.130, 2nd Cross,
1st Floor, Nayandahalli,
Opp. Rajarajeswari Arch,
Gurusarvabhuvana Nagar,
Near ITI Layout,
Bengaluru -560 039.
2 C.C.No.28947/2017 J
Also Available at :
Residing at Kadalur,
Hathgur Hobli,
Maddur Taluk,
Mandya District.
(By Sri. M.V.Ganesh., Adv.,)
Case instituted : 10.11.2017
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 18.3.2020
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he and Accused are known to each other , the Accused approached and requested him for financial assistance of Rs.2,40,000/- as hand loan as he was required for personal commitment and agreed to repay the same within five months, accordingly he has paid sum of Rs.2,40,000/- to the Accused 3 C.C.No.28947/2017 J during the 2nd week of March 2017, having received the said amount the Accused issued a post dated cheque bearing No.638812 dated: 12.8.2017 drawn on State Bank of Mysore, Wilson Gardens Branch, Bengaluru for sum of Rs.2,40,000/- towards discharge of his legal obligation/debt in his favour, while issuing the cheque the Accused assured him that, on presentation of the cheque would see that same will be honoured, he has presented the said cheque through his banker i.e., Allahabad Bank, Basavanagudi branch, for realization but the said cheque came to be dishonoured on 13.9.2017 as "Funds Insufficient", thereafter he got issued legal notice dated:-26.9.2017 through RPAD to the Accused notifying the dishonour of cheque and demanding for repayment of the cheque amount within 15 days from the date of receipt of notice and it was served on 30.9.2017 on the Accused, but the Accused did not repay the cheque amount and issued untenable reply dated: 6.10.2017. Hence he has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
4 C.C.No.28947/2017 J3. Before issuing process against the accused, the Complainant has filed his affidavit-in-lieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.7 i.e, the Original Cheque dated: 12.8.2017 as per Ex.C.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C.2, the copy of Legal Notice as per Ex.C.3, the two Postal Receipts as per Ex.C.4 and 5 , postal acknowledgement as per Ex.C.6, and reply notice as per Ex C.7.
4. Prima-facie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
5. As per the direction of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the Accused, 5 C.C.No.28947/2017 J as he intended to set out his defence, the case came to be posted for the Cross-examination of complainant.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence subsequently the Accused has examined as DW.1 and two documents i.e. copy of reply given by him and postal receipt are marked as per Ex.D.1 and D.2 on behalf of the Accused and closed his side.
7. Heard both sides and perused the materials on record.
8. On the basis of complaint, evidence of complainant and documents the following points that are arise for consideration are:-
1. Whether the complainant proves that the accused has issued cheque bearing No.638812 dated:
12.8.2017 for sum of Rs.2,40,000/- drawn State Bank of Mysore, Wilson Gardens Branch, Bengaluru, to discharge 6 C.C.No.28947/2017 J legally recoverable debt to the complainant and when the complainant has presented cheque for encashment through her banker but the said cheque has been dishonoured for the reasons "Funds Insufficient" on 13.9.2017 and the complainant issued legal notice to the accused on 26.9.2017 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
9. The above points are answered as under:
Point No.1: In the Affirmative Point No.2: As per final order for the following:
REASONS
10. Point No.1 : Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof 7 C.C.No.28947/2017 J beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act pre-supposes conditions for prosecution of an offence which are as under:
1. Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
2. Cheque shall be presented for payment within specified time i.e., from the date of issue before expiry of its validity.
3. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
4. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.8 C.C.No.28947/2017 J
If the above said conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer in respect of bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
11. It is also one of the essential ingredient of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 presumption shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and are rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena 9 C.C.No.28947/2017 J of decisions.
12. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein the complainant has reiterated the entire averments of the complaint, the complainant/PW.1 in his evidence testified that, he and Accused are known to each other, the Accused approached and requested him for financial assistance of Rs.2,40,000/- as hand loan as he was required for personal commitment and agreed to repay the same within five months, accordingly he has paid sum of Rs.2,40,000/- to the Accused during the 2nd week of March 2017, having received the said amount the Accused issued a post dated cheque bearing No. 638812 dated: 12.8.2017 drawn on State Bank of Mysore, Wilson Gardens Branch, Bengaluru for sum of Rs.2,40,000/- towards discharge of his legal obligation/debt in his favour. The complainant/PW.1 further testified that, he has presented the said cheque through his banker i.e., Allahabad Bank, Basavanagudi branch, for realization but the said cheque came to be dishonoured on 13.9.2017 as "Funds Insufficient", thereafter he got issued legal 10 C.C.No.28947/2017 J notice dated: 26.9.2017 through RPAD to the Accused notifying the dishonour of cheque and demanding for repayment of the cheque amount within 15 days from the date of receipt of notice and it was served on 30.9.2017 on the Accused but the Accused did not repay the cheque amount and issued untenable reply dated: 6.10.2017.
13. In support of the oral evidence of the complainant, he produced and marked the documents as per Ex.C.1 to C.7 i.e, the Original Cheque dated:12.8.2017 as per Ex.C.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C.2, the copy of Legal Notice as per Ex.C.3, the two Postal Receipts as per Ex.C.4 and 5 , postal acknowledgement as per Ex.C.6, and Reply notice as per Ex C.7.
14. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not in dispute that, the cheque in question i.e. Ex.C.1 belongs to the account of the accused and also not disputed signature of the 11 C.C.No.28947/2017 J Accused which is appearing at Ex.C.1(a). It is also not in dispute by the accused that, the cheque in question presented for encashment and dishonoured for the reason of "Funds Insufficient" since as matter on record, proved by return memo i.e. C.2 issued by the concerned bank dated: 13.9.2017, therefore it is a matter on record and has been proved that, the cheque in question was presented within its validity period and dishonoured as per the bank endorsement issued by the banker of accused. In relation to the service of notice the Accused has given reply to the complainant as per Ex.C.7. Hence, it goes to show that, the legal notice i.e. Ex.C.3 caused by the complainant was served upon the Accused. Hence, the complainant has complied mandatory requirements as required U/s.138(a) to
(c) of Negotiable Instruments Act.
15. It is the specific defence of the Accused that, he has denied the claim made by the complainant and also issuance of the cheque towards discharge of the liability in question. It is the specific defence of the Accused that, in the year 2015 he had borrowed a sum of Rs.50,000/- from 12 C.C.No.28947/2017 J the complainant and had issued the cheque in question which is blank in all aspect and latter he had repaid the loan of Rs.50,000/- and requested for return of the cheque but the complainant in the guise of misplacement has not return the cheque and assured that, cheque would be returned when once it is traced, but the complainant has misused the said cheque and filed the present complaint without returning the cheque in question to him. Hence on this back ground the oral and documentary evidence of the complainant and Accused has to be examined as to whether the Accused has rebutted presumption available to the complainant.
. 16. It is relevant here to mention that, the learned counsel for the defence has cross-examined the complainant in length but nothing has been elicited to discredit or discard his evidence, instead of eliciting anything materials from the complainant the Accused rather concentrated his defence on production of document in respect of source of income and also the cheque in question was issued as a security in respect of the loan of Rs.50,000/-
13 C.C.No.28947/2017 Jborrowed by him in the year 2015 and the said cheque has not been returned to the Accused in spite of the loan amount of Rs.50,000/- was repaid by him and the said cheque is misused by the complainant, but the suggestions made to the complainant in respect of the said defence have been categorically denied by the complainant. The complainant/PW.1 specifically stated that, Accused is known to him since 10 years and on 11.3.2017 had received an amount of Rs.2,40,000/- as a hand loan from him and he has paid the said amount by way of cash. It is denied by the complainant to a suggestion that, the cheque in question issued to the complainant towards security of the loan of Rs.50,000/- borrowed by the Accused in the year 2015 and the Accused has repaid Rs.50,000/- along with interest to the complainant inspite of it, has not returned the cheque in question to the Accused. Except the said suggestion nothing has been elicited from the complainant to accept the defence of the Accused. Hence, on entire perusal of the cross- examination of the PW.1 nothing has been elicited by the Accused to disbelieve or discard the evidence of the PW.1.
14 C.C.No.28947/2017 J17. It is relevant here to mention that, it is true that the complainant in his cross-examination admitted that, he has not produced any documents in respect of source of income but the complainant has stated that, he was having the amount in cash in his house and same has been paid to the Accused. It is also important to note here that, as per the defence of the Accused, the Accused himself admitted that, in the year 2015 he has received a loan of Rs.50,000/- from the complainant, that itself sufficient to hold that, the Accused is having financial transaction with the complainant and also admitted that, complainant is capable of lending the loan to him, in such circumstances the defence taken by the Accused in respect of source of income of the complainant cannot be acceptable one. In addition to that, as it is already held in the above that, the complainant proved that the cheque in question i.e Ex.C.1 belongs to the Accused and signature found at Ex.C.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and it was dishonoured for the reason of "Funds Insufficient" as per Ex.C.2 and thereafter the legal 15 C.C.No.28947/2017 J notice caused by him through RPAD to the Accused was served on him, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initially the presumptions are available in favour of the complainant U/s.118a and 139 of the N.I. Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even the said presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused, unless and until the said presumptions are rebutted by the Accused even the documents are not produced by the complainant with regard to loan transaction in question. In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 16 C.C.No.28947/2017 J between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque was his, statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials 17 C.C.No.28947/2017 J submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15-03-2018 between ROHITBHAI JIVANLAL PATEL Vs. STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that " When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the 18 C.C.No.28947/2017 J Hon'ble Apex Court held that, " Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for 19 C.C.No.28947/2017 J consideration and the holder of the cheques received the same in existing debt". It is also held that, " the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability ". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however 20 C.C.No.28947/2017 J such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated:
15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the cross-
examination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough".
18. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the 21 C.C.No.28947/2017 J drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, a presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied the mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to him and signature appearing on the cheque is that of his signature and legal notice issued by complainant was served on the Accused, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act.
22 C.C.No.28947/2017 J19. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the defence that, the complainant has not produced the document to show that, he was having source of income or funds to lend the loan amount to the Accused as on the date of lending of the loan amount and has not collected the documents for having advancing the loan amount of Rs.2,40,000/- to the Accused at the time of alleged lending of loan amount cannot be acceptable one. In this case also the learned defence counsel argued that, the complainant has to prove his claim by producing his evidence as if it is required for proving his debt before the Civil Court, same cannot be permissible in a proceedings initiated U/s.138 of N.I. Act, as held by the Hon'ble Apex court of India in the above referred decisions, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question was drawn for consideration as the Accused has admitted the cheque in question belongs to him and signature found on the cheque in question is also that of his signature.
23 C.C.No.28947/2017 J20. It is the specific defence of the Accused that, in the month of January 2015 he had borrowed a loan of Rs.50,000/- from the complainant at that time he had given blank signed cheque to the complainant and he has repaid the entire loan amount of Rs.50,000/- along with interest to the complainant, but the complainant did not return his blank signed cheque and assured him to return the said cheque after tracing of the same but now the complainant has misused the said blank signed cheque and has filed this false complaint against him. It is also relevant here to mention that, the Accused in his cross-examination admitted that, the cheque in question i.e., Ex.C.1 belongs to his account and signature on the cheque i.e Ex.C.1(a) is that of his signature. Hence, once signature on the Negotiable Instrument Act is admitted, in that circumstances sec. 20 of N.I. Act comes into play i.e. as per Sec. 20 of N.I.Act if the blank or incomplete Negotiable Instrument is given to the holder in due course, it is to be presumed that, he had given authority to the holder in due course to fill up the remaining portion. In this regard, it is relevant here to refer the decision of Hon'ble High Court of 24 C.C.No.28947/2017 J Karnataka reported in ILR 2006 KAR 2054 in the case of H.S.Srinivasa Vs. Girijamma and another wherein the Hon'ble High Court held that " a reading of sec.20 of the act which is extracted above reveals that, the words used are ' either wholly blank or having written therein an incomplete negotiable instrument'. The instrument may be wholly blank or incomplete in a particular in either case, the holder has authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so vide that, the party so signing is bound to be a holder in due course. Promissory notes are often executed in the name of the payer and left unfilled to be afterwards filled by the actual holder, the object being to enable the owner to pass it off to another without incurring the responsibility as an endorser. Thus, it is seen that, person in possession of an incomplete instrument in maternal particulars has the authority prima facie to fill it and thus the executants becomes liable to pay the amount due'. In another decision of Hon'ble High Court of Madras reported in 2005 25 C.C.No.28947/2017 J (1) DCR 85 in the case of P.A. Thamatharan Vs. Dalmia cements (B) Ltd., wherein it is held that "
Negotiable Instrument Act 1991 - Sec. 138 - dishonour of cheque - plea -body of cheque was not written by Accused - held it is not mandatory and no law prescribes that, the body of cheque should also be written by the signatory to the cheque, a cheque could be filled up anybody and if it is signed by the account holder of the cheque'. In another decision of Hon'ble Apex court to India reported in (2002) 7 SCC in the case of P.K. Manmadhan Karthra Vs.Sanjeeva Raj., wherein it is held that " As long as signature on the cheque is admitted, whether the ink with which the other particulars are filled up is different or that the hand writing is not that of drawer does not matter. Until rebutted, the presumption that, cheque was issued for consideration exists". In another decision of Hon'ble High Court of Karnataka at Bengaluru in a case of Crl. Appeal No. 1664/2003 C/w. Crl.Appeal No.1663/2003 dated: 18.6.2008 in the case of R.Mallikarjuna Vs. H.R.Sadashivaiah wherein the Hon'ble High Court 26 C.C.No.28947/2017 J at para No.19 held that " But, the question is, whether that renders instrument unenforceable. In this regard, it must be observed that, this court similar circumstances in the case of S.R. Muralidar Vs. Ashok G.Y. reported in 3001 (4) KAR. LJ K. 122 referring to the provisions of Sections 20, 138, 139, and 140 of the Act and after interpreting alteration and filling up of the cheque observed thus " The trial court has made much about the difference in ink. Admittedly, Accused cheque is issued bearing signature of the Accused. It is the contention of the defence that, blank cheques issued for the business transactions have been illegally converted as a subject matter to this case fastening false liability........ It is not objectionable or illegal in law to receive a inchoate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument 27 C.C.No.28947/2017 J issued and such transaction fully begins the maker of the negotiable instrument to the extent it purports to declare........ The fact that, a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorizing the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as in admissible nor it amounts to tampering with the material particulars...... In the present case there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. Therefore in view of the principles of law of Hon'ble Apex court of India and also Hon'ble High Court of Karnataka and Madras referred above, in the present case the Accused has admitted the signature on Negotiable Instrument i.e. cheque and he also admitted issuance of the cheque to the complainant, it is prima-facie proof of authorizing 28 C.C.No.28947/2017 J the holder in due course i.e. the complainant to fill up the remaining contents of the Negotiable Instrument, therefore it cannot lie in the mouth of the Accused that, the complainant has misused his blank signed cheque which was allegedly given to the complainant at the time of borrowing of loan of Rs.50,000/- in the year 2015, thus the defence of the Accused cannot be acceptable one.
21. It is also relevant here to mention that, the Accused/DW.1 in his evidence has taken specific defence that, he has borrowed a loan of Rs.50,000/- from the complainant during January 2015 and at that time the complainant insisted him to issue cheque in question as security purpose, accordingly he had issued the cheque in question as blank signed cheque and thereafter he repaid the loan amount of Rs.50,000/- to the complainant on 18.7.2015 and requested to return the cheque in question but the complainant in the guise of its misplacement has not return the cheque and assured him to return the same at once it is traced but he did not return the cheque and misused the same by filing this complaint. As it is already held in 29 C.C.No.28947/2017 J the above that, the complainant in order to substantiate his defence has not produced single document, therefore only on the basis of oral evidence it cannot be held that, the cheque in question has been given by the Accused as a security to the complainant at the time of borrowing of Rs.50,000/- loan in the month of January 2015. No doubt, the Accused has produced reply copy i.e Ex.D.1 wherein also had taken similar defence but in order to prove the said defence nothing has been placed before the court, in such circumstances the defence of the Accused appears to be denial in nature. It is also important to note here that, the Accused admitted issuance of cheque to the complainant and also his signature on the cheque and as failed to prove his defence that, he has repaid the loan amount of Rs.50,000/- to the complainant as alleged by him in his defence, in such circumstances, it is necessary here to refer decision of Hon'ble High Court of Karnataka reported in 2015 (1) KCCR 235 in the case of Lale Patel Vs. Sharanabasappa., wherein the Hon'ble High Court held that " NEGOTIABLE INSTRUMENTS ACT, 1881- section 138 - Dishonour of cheque 30 C.C.No.28947/2017 J for insufficiency of funds - Plea of accused that he had given a blank cheque signed as security for a transaction and complainant filled up the contents and denied existence of any debt or loan - Conviction by Trial court - Affirmed by Appellate Court - Revision against. Hence in this case also it is the defence of the Accused that, he had given signed blank cheque to the complainant and same has been misused by the complainant by filling the contents of the cheque and denied the existence of debt but no documents have been produced by the Accused to prove his defence, in such circumstances it is for the accused to prove his defence by producing cogent and convincible evidence, if the Accused has not proved the same, it cannot be held that, the cheque in question was issued for the purpose of security in connection with the transaction. In another decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. Vijayakumari., wherein the Hon'ble Apex court held that " NEGOTIABLE INSTRUMENTS Act, 1881- Section s138 and 139
- acquittal - If justified- Accused not disputing issuance of cheque and his signature on it- Plea 31 C.C.No.28947/2017 J that it was issued long back as security and that loan amount was repaid- Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused- Acquittal not proper. Hence in the present case also it is the main defence of the Accused that the cheque in dispute was given to the complainant at the time of alleged borrowing loan of Rs.50,000/- in the year 2015 but in this regard the accused has not produced documents or proof in such circumstances by applying the principles of law laid down in the above decision the defence of the Accused cannot be acceptable one. In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.271/2020 in the case of APS Forex Services Pvt. Ltd., Vs. Shakthi International Fashion Linkers and others., wherein the Hon'ble Apex Court held that "the defence of the Accused that, cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption. It is also held that, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always presumption 32 C.C.No.28947/2017 J infavour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the Accused to rebut such presumption by leading evidence". In the present case the Accused has admitted that, the cheque was issued and signature is also admitted but it is the defence of the Accused that, it was issued towards loan amount of Rs.50,000/- borrowed by him in the month of January 2015 from the complainant and he has misused his cheque but no documentary proof produced by the Accused in support of his defence, in such circumstances the defence of the Accused cannot be acceptable one in the absence of further proof of evidence to rebut the presumption.
22. It is also important to note here that, the Accused in his defence has taken specific contention that, he had given signed blank cheque to the complainant at the time of borrowing loan amount of Rs.50,000/- from him in the month of January 2015 and on 18.7.2015 he had repaid the said amount to the complainant but he did not return the cheque even inspite of demand made by him. But the Accused in his cross-examination has admitted that, 33 C.C.No.28947/2017 J he came to know about the dishonour of Ex.C.1 cheque when he received the legal notice issued by the complainant and he has not produced the document to show that, cheque in question was handed over to the complainant during the year 2015 and also not produced the document to show that, on 18.7.2015 he has repaid the loan amount of Rs.50,000/- to the complainant. the Accused has also admitted that, he has not issued any stop payment instructions to his banker by alleging that, his blank signed cheque will be misused by the complainant and has not issued any legal notice to the complainant about the alleged misuse of cheque in question by the complainant and has not filed any complaint either before the police or before the court alleging that, the complainant has misused his cheque in question. Hence, the admissions of the Accused makes it clear that, even after coming to know about the dishonour of the cheque, the Accused has not made any efforts to initiate legal action against the complainant about alleged misuse of cheque in question, in such circumstances it can be held that, if really the Accused has return the alleged loan amount of Rs.50,000/- to the 34 C.C.No.28947/2017 J complainant and requested to return his alleged blank signed cheque to him and the complainant has not return his blank signed cheque and misused the same by filing this complaint against him, in such circumstances the Accused definitely he would have taken or initiate action against the complainant either by lodging the complaint before the police or court or atleast by issuing notice to the complainant for return of his alleged signed cheque handed over to him as a security or by issuing stop payment instructions to his banker, but no such efforts have been made by the Accused even after notice of the dishonour of his cheque and receipt of legal notice issued by complainant and even after his appearance in this case also, therefore mere denial of the Accused is not sufficient to hold that, he has rebutted the presumptions available to the complainant U/s.118 and 139 of the N.I. Act. It is also relevant here to mention that, the conduct of the Accused in not taking the action against the complainant for alleged misuse of cheque in question by the complainant may leads to draw an adverse inference against him that, the Accused has not initiated any action against the complainant since 35 C.C.No.28947/2017 J the cheque in question has been issued by the Accused to the complainant towards discharge of the liability in question but not for any other purpose. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt- cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt - Conviction, Proper". Hence in view of the principles of law laid 36 C.C.No.28947/2017 J down by the Hon'ble Apex Court are aptly applicable to the case on hand since in the present case also the accused has not made any efforts to get return of cheque alleged to be given to the complainant at the time of borrowing of alleged loan of Rs.50,000/- from him, under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused that, the cheque in question issued by the accused towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted the signature and cheque in question is belongs to him.
23. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and though he has taken the specific defence that, he had given blank signed cheque to the complainant at the time of borrowing of alleged loan of Rs.50,000/- and even after repayment of the said loan the complainant, in turn he did not return the cheque in question but the Accused has not proved the said defence by producing cogent and 37 C.C.No.28947/2017 J convincible evidence, in such circumstances it can be held that, the Accused has failed to explain and prove how the cheque in question has come to the possession of the complainant, this would also give rise to an adverse inference against him, this proposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa" and in the decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava" held that, " the Accused has to explain how the cheque entered into the hands of complainant". Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused have miserably failed to rebut the presumption available in favour of the complainant by producing cogent and convincible evidence.
24. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused 38 C.C.No.28947/2017 J the complainant has successfully established beyond all reasonable doubt that, he has lent an amount of Rs.2,40,000/- to the Accused and in turn the Accused has issued the Ex.C.1 cheque in question in his favour towards discharge of the said loan amount and thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Funds Insufficient" and thereafter he got issued legal notice to the accused and the said notice was served on him, inspite of it, the Accused did not paid the cheque amount, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.C.1 Cheque. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
25. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and 39 C.C.No.28947/2017 J the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following :-
ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.2,55,000/= (Rupees Two Lakhs and Fifty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.40 C.C.No.28947/2017 J
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.2,50,000/= (Rupees Two Lakhs and Fifty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
His Bail bond stands cancelled.
. Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 18th day of March, 2020).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri.H.M.Raju;41 C.C.No.28947/2017 J
2. List of documents exhibited on behalf of the Complainant:-
Ex.C-1 : Original Cheque; Ex.C-1(a) : Signature of the Accused; Ex.C-2 : Bank Memo; Ex.C-3 : Office copy of the Legal Notice; Ex.C-4 & 5 : Postal Receipts; Ex.C-6 : postal Acknowledgement Ex.C-7 : Reply notice.
3. List of witness/s examined on behalf of the Accused:-
DW.1 : Sri. Ramesh Kadalur
4. List of documents exhibited on behalf of the Accused:-
Ex.D.1 : Reply Notice;
Ex.D.2 : Postal Receipt;
(SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.42 C.C.No.28947/2017 J
18.3.2020 Judgment pronounced in the open court vide separate order.
ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.2,55,000/= (Rupees Two Lakhs and Fifty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.2,50,000/= (Rupees Two Lakhs and Fifty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
His Bail bond stands cancelled.
. Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.
43 C.C.No.28947/2017 J