Has Paid The Following Sum Of Monies ... vs No.1 Represented By Accused No.2 And on 10 February, 2023

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Bangalore District Court

Has Paid The Following Sum Of Monies ... vs No.1 Represented By Accused No.2 And on 10 February, 2023

1 CC.15503/2017( J)

KABC030386542017

Presented on : 05-06-2017
Registered on : 05-06-2017
Decided on : 10-02-2023
Duration : 5 years, 8 months, 5 days

IN THE COURT OF THE XV ADDL CHIEF METROPOLITAN
MAGISTRATE AT BENGALURU CITY.

Dated this the 10 th February-2023

Present: Lokesh Dhanapal Havale. B.A.L.L.B.,
XV Addl.C.M.M., Bengaluru.

Judgment U/s.355 of the Cr.P.C. 1973.

1.Sl.No.of the case CC.No.15503/2017

2.Name of the Complainant: Mr. Syed Husseb S.G
S/o Syed ghouse,
Aged about 33 years,
R/at No.39, 3rd cross,
Chowdaiah Block, Anandnagar,
R.T. Nagar post,
Bangalore-560 032.

3.Name of the accused: 1. M/s Moksha Construction
A partnership firm registered
under the provisions of the Indian
Partnership Act, 1932 and having
its office at No.24, 3rd cross, RMV
2nd stage, Bangalore-560 095.
2 CC.15503/2017( J)

2. Mr.B.M Girish
S/o late B.M Vagesha Shivacharrya
Aged about 45 years,
R/at No.24, 3rd cross, RMV 2nd
stage
Bangalore-560 095.

Also at:
Architectural Services Private
Limited
No.810, Kalyan Nagar, 3rd cross,
HRBR Layout, first block,
Bangalore-560 043.

3. Smt. B.M Jayashree
W/o late B.M Vagesha Shivacharrya
Aged about 65 years,
No.24, 3rd cross, RMV 2nd stage
Bangalore- 560 095.

4.The offence complained of : U/s.138 of Negotiable Instruments
Act.

5.Plea of the accused: Pleaded not guilty.

6.Final Order: Acting U/s.255(1) Cr.P.C., accused
are acquitted

7.Date of final Order 10.02.2023.

* * *

This complaint is filed U/Sec.200 of Cr.P.C. against the
accused for the offence punishable U/Sec.138 of the Negotiable
Instruments Act, 1881.
3 CC.15503/2017( J)

2. The facts of the complaint in brief are as under:
The complainant engaged in the business of purchase,
construction and sale of residential buildings. The complainant was
interested in a project floated by accused No.1 called "Moksha
Elite". Accused No.1 is a partnership firm registered under the
provisions of the Indian Partnership Act. The accused No.2 and 3
are the partners of the accused No.1. The accused No.1 is engaged
in the business of real estate construction and was developing a
project at R.T. Nagar Main road called "Moksha Elite". The first
and the second accused represented to the complainant that upon
the competition of the project, the Apartment bearing No.C-2 at
2nd floor, measuring 2300 sq. ft. would be given to him. The
complainant has paid the following sum of monies towards the
purchase of the said property.
a. A sum of Rs.25,50,000/- vide cheque bearing NO.673431
dated 21.4.2010 drawn on State Bank of India, Dollars
Colony branch.
b. A sum of Rs.14,50,000/- vide cheque bearing NO.673430
dated 23.04.2010 drawn on State Bank of India, Dollars
Colony branch.
c. A sum of Rs.1,00,000/- vide cheque bearing No.673432
dated 26.04.2010 drawn on State Bank of India, Dollars
Colony branch.
d. A sum of Rs.1,20,000/- vide cheque bearing No.0163184
dated 3.11.2010 drawn on Corporation bank.
4 CC.15503/2017( J)

e. A sum of Rs.1,25,000/- vide cheque bearing No.0163185
dated 9.11.2010 drawn on Corporation Bank.
f. A sum of Rs.3,00,000/- by of cash on 5.11.2010.
In addition to the above, the complainant has taken a
housing loan for a sum of Rs.68,00,000/- from State Bank of
India.

The accused have executed an agreement of sale dated
19.04.2010 in respect of the property. The accused have also
executed a Construction Agreement dated 19.04.2010 in respect of
the property. Despite of lapse of seven years, the accused have
failed and neglected to complete the project. Despite several
repeated requests, the accused made no substantial progress
towards completing the project and handing over the property to
the complainant. The complainant has paid a sum of
Rs.46,45,000/- from his personal savings towards the purchase of
the property. However, after much deliberation and discussions,
the accused agreed to pay the following sum of money and issued
following 3 cheques:

1. Cheque bearing No.327214 dated 28.02.2017 for
Rs.91,98,829/-
2. Cheque bearing No.327515 dated 28.02.2017 for
Rs.45,00,000/-
3. Cheque bearing No.327216 dated 28.02.2017 For
Rs.18,98,000/- all the cheques drawn on Syndicate Bank,
Sanjaynagar branch, Bangalore.
5 CC.15503/2017( J)

The accused expressly stated that the first cheque was for the
closure of the housing loan availed by the complainant. The
second cheque was towards the refund of money paid by the
complainant to the accused in the year 2010 while booking the
property. While the third cheque was towards the refund of money
paid by the complainant to State Bank of India towards the
repayment of the housing loan. The accused had assured the
complainant that the said cheques would be honoured upon
presentation. The complainant has presented the said cheques
through his banker for encashment but the said cheques were
returned dishonoured with endorsement 'Drawers signature differs'
on 07.03.2017. The accused No.2 & 3 did not pay the amount
even after oral intimation of dishonour of the cheques. Thereafter
he issued legal notice dated 24.03.2017 to the accused No.2 & 3
calling upon to repay the amount of cheques. The notice sent
through RPAD was served on the accused No.2 and 3 on
27.03.2017. Accused No.2 & 3 failed to pay the amount even after
the expiry of 15 days. The accused No.2 & 3 thereby committed
an offence punishable U/s.138 of the N.I.Act.

3. After the institution of the complaint, the cognizance
was taken and it has been registered as PCR No.5358/2017. The
sworn statement of the complainant has been recorded and on the
basis of sworn statement and other materials on hand, the criminal
case has been registered against the accused and summons was
issued to accused No.2 and 3. In response to the service of
6 CC.15503/2017( J)

summons, the accused No.2 & 3 appeared through their learned
counsel and got enlarged on bail. The prosecution papers were
supplied to the accused No.2 & 3 and the substance of the
accusation was read over and explained to the accused No.2 & 3
in Kannada. They pleaded not guilty and claimed to be tried.

4. During trial the complainant examined himself as PW-1
and got marked Ex.P1 to P40. The statements of the accused
No.2 & 3 U/s. 313 of Cr.P.C. were recorded. The accused has not
lead evidence but got marked Ex.D1 to D11.

5. Heard the arguments and perused the materials on
record. On perusal of the entire materials on record, the points
that arise for my consideration are as under;

1. Whether the complainant proves that the
accused No.1 represented by accused No.2 and
3 issued 3 cheques bearing Nos.(1)327214
dated 28.02.2017 for a sum of
Rs.91,98,829.44 (2)327215 dated 28.02.2017
for a sum of Rs.45,00,000/- (3)327216 dated
28.02.2017 for a sum of Rs.18,98,000/- all the
cheques drawn on Syndicate Bank,
Sanjaynagar branch, Bangalore towards the
discharge of legally enforceable debt/liability
and on its presentation for encashment, they
7 CC.15503/2017( J)

were dishonored with an endorsement
"Drawers Signature Differs" and even after
the service of legal notice, the accused No.2
& 3 have not paid the amount within 15 days
and thereby accused No.2 & 3 committed an
offence punishable U/Sec.138 of N.I. Act,
1881?

2. Whether the accused No.2 & 3 rebuts the
presumption U/s.139 of the N.I.Act?

3. What order?

6. My answers on the above points for consideration are
as under:
Point No.1 : Negative
Point No.2 : Does not survive for consideration.
Point No.3 : As per final order for the following;

REASONS

7. Point No.1 and 2:- The points are taken together for
common discussion to avoid repetition of facts and evidence.

At this juncture it is necessary to discuss the provisions
under Section 138, 118(a), 139 and 141 of the N.I. Act., 1881 and
the said provisions are extracted and they read as under;
8 CC.15503/2017( J)

138. Dishonour of cheque for insufficiency,
etc., of funds in the account - Where any
cheque drawn by a person on an account
maintained by him with a banker for payment
of any amount of money to another person from
out of that account for the discharge, in whole
or in part, of any debt or other liability, is
returned by the bank unpaid, either because of
the amount of money standing to the credit of
that account is insufficient to honour the cheque
or that it exceeds the amount arranged to be
paid from that account by an agreement made
with that bank, such person shall be deemed to
have committed an offence and shall, without
prejudice to any other provision of this Act, be
punished with imprisonment for a term which
may be extended to two years, or with fine
which may extend to twice the amount of the
cheque, or with both:
Provided that nothing contained in this
section shall apply unless:-

(a) the cheque has been presented to the
bank within a period of six months from
the date on which it is drawn or within
9 CC.15503/2017( J)

the period of its validity, whichever is
earlier;

(b) the payee or the holder in due
course of the cheque, as the case may
be, makes demand for the payment of
the said amount of money by giving a
notice in writing, to the drawer of the
cheque, within thirty days of the receipt
of information by him from the bank
regarding the return of the cheque as
unpaid; and

(c) the drawer of such cheque fails to
make the payment of the said amount of
money to the payee or as the case may
be, to the holder in due course of the
cheque within fifteen days of the receipt
of the said notice.

Explanation:- For the purposes of
this section, "debt or other liability"
means a legally enforceable debt or other
liability.
10 CC.15503/2017( J)

118. Presumptions as to negotiable
instruments. -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, was accepted, indorsed,
negotiated or transferred for
consideration;
(b) as to date:- that every Negotiable
Instrument bearing date was made or
drawn on such date;

139. Presumption in favour of holder.- 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.

141. Offences by companies:-(1) If the
person committing an offence under section 138
is a Company, every person who, at the time
the offence was committed, was in charge of,
and was responsible to the Company for the
11 CC.15503/2017( J)

conduct of the business of the Company, as well
as the Company, shall be deemed to be guilty
of the offence and shall be liable to be
proceeded against and punished accordingly;

Provided that nothing contained in this
sub-section shall render any person liable to
punishment if he proves that the offence was
committed without his knowledge, or that he
had exercised all due diligence to prevent the
commission of such offence;

Provided further that where a person is
nominated as a Director of a Company by virtue
of his holding any office or employment in the
Central Government or State Government or a
financial corporation owned or controlled by the
Central Government or the State Government, as
the case may be, he shall not be liable for
prosecution under this Chapter.

(2) Notwithstanding anything contained in sub-
section (1), where any offence under this Act
has been committed by a Company and it is
proved that the offence has been committed
with the consent or connivance of, or is
attributable to, any neglect on the part of, any
12 CC.15503/2017( J)

director, manager, secretary or other officer of
the Company, such director, manager, secretary
or other officer shall also be deemed to be
guilty of that offence and shall be liable to be
proceeded against and punished accordingly.

Explanation:- For the purposes of this section;

(a) "Company" means and Board of
Directors corporate and includes a firm
or other association of individuals; and

(b) "director", in relation to a firm,
means a partner in the firm.

8. On plain perusal of the provisions U/s. 118(a) and 139
of the N.I.Act., it can be seen that initially the statutory
presumptions are raised in favour the complainant. However it is
open to an Accused to raise probable defences and rebut the
statutory presumptions by proving the same. An Accused can raise
a defence, wherein the existence of legally enforceable debt or
liability can be contested. It is also well established that an
Accused for discharging the burden of proof placed upon him
under a statute need not examine himself. He may discharge his
burden on the basis of the materials already brought on record.
An Accused has constitutional rights to maintain silence. The
standard of proof on part of the Accused and that of the
13 CC.15503/2017( J)

prosecution in a Criminal case is different. The prosecution must
prove the guilt of an Accused beyond all reasonable doubts but
the standard of proof so as to prove a defence on the part of an
Accused is preponderance of probabilities.

9. The burden of proving the defence is on the accused.
However, in a case, where a Company/partnership firm is an
accused and its directors/partners are to be made vicariously
liable, then it is necessary for the complainant to prove that its
directors/partners were in charge of and responsible to the conduct
of its business at the time of commission of the offence. Once the
complainant proves it, the onus shifts on an accused to prove that
the offence was committed without his knowledge or he had
exercised all due diligence to prevent the commission of offence, if
not, the directors are vicariously liable. On the other hand, if the
directors/partners are able to prove by cogent evidence that they
are neither in charge of and responsible to the conduct of the
business of the Company/partnership firm nor they had knowledge
of the transaction or negligent, they are entitled for acquittal.

10. Under the light of position of the law, I have perused
the complaint and the evidence placed on record. The complainant
in support of his claim made in the complaint has adduced
evidence by examining himself as PW-1 and he got marked Ex.P1
to 40. PW-1 filed his evidence affidavit on oath and reiterated the
complaint averments. Ex.P1 is the Registration certificate of
accused No.1 issued by the registrar of firms. It discloses that the
14 CC.15503/2017( J)

accused No.1 firm is registered firm under the provisions of Indian
Partnership Act. Ex.P2 is the receipt dated 05.11.2010. It discloses
that the accused acknowledged the receipt of amount of
Rs.3,00,000/- by way of cash in favour of firm in respect of Flat
No.C2 in Moksha Elite Apartment. Ex.P3 is the Letter dated
22.02.2017 issued by State Bank of India. It discloses that the
letter was given by the bank to the complainant in respect of the
outstanding amount of housing loan i.e. Rs.91,98,829/-.

11. Ex.P4 to 6 are the cheques bearing Nos.(1)327214
dated 28.02.2017 for Rs.91,98,829.44, (2) 327215 dated 28.02.2017
for Rs.45,00,000/- (3)327216 dated 28.02.2017 for Rs.18,98,000/-
all cheques are drawn on Syndicate Bank, Bangalore issued in
favour of the complainant. Ex.P4(a) to Ex.P6(a) are the signatures
of the accused. Ex.P7 to Ex.P9 are the Bank Memos with shara
"Drawers Signature differs" dated 07.03.2017. Ex.P10 is the office
copy of Legal Notice dated 27.03.2017 issued by the complainant
to the accused demanding repayment of the cheque amount to the
address of the accused. Ex.P11 to 15 are the postal receipts for
having sent the legal notice to the accused No.1 to 3. Ex.P16 & 17
are the postal acknowledgments for having served the notice to
the accused. Ex.P18 to 20 are the postal envelopes which are
returned unserved with shara 'addressee left' on 30.03.2017.

12. Ex.P21 is the bank account statement of the
complainant in SBI, Dollar colony branch, Bengaluru. It discloses
that on 21.04.2010 an amount of Rs.25,50,000/- was encashed by
15 CC.15503/2017( J)

the accused through cheque bearing No.673431; on 23.04.2010 an
amount of Rs.14,50,000/- was encashed by the accused through
cheque bearing No.673430 and on 26.04.2010 an amount of
Rs.1,00,000/- was encashed by the accused through cheque bearing
No.673432. Ex.P22 is the income tax returns for the year
2011.2012. It discloses that the complainant has income of
Rs.28,07,118/-. In the balance sheet of Ex.P22, which is at
Ex.P.22(a), under the head loans liabilities, SBI Housing Loan-
2(C2 R.T. Nagar) is shown to be Rs.63,28,907/- and SBI Housing
Loan (Dollars Colony is shown to be Rs.48,16,042/- and under the
head current liabilities Moksha Builders advance Flat No.B3(Dollars
Colony is shown to be Rs.61,50,000/-. Ex.P23 is the Bank account
statement of the complainant in Corporation bank, Chikkabanavara
branch, Bengaluru. It discloses that on 04.10.2010 an amount of
Rs.60,000/- was encashed by the accused through cheque bearing
No.163181; on 03.11.2010 an amount of Rs.1,20,000/- was
encashed by the accused through cheque bearing No.163184 and
on 09.11.2010 an amount of Rs.1,25,000/- was encashed by the
accused through cheque bearing No.163185. Ex.P24 is the Bank
account statement of the complainant pertaining to the home loan
of Rs.69,64,000/- taking by the complainant in SBI, J.C road
branch, Bengaluru. It discloses that Rs.64,00,000/- amount is
disbursed and SBI Life Premium advance of Rs.1,63,852/- is added.
The statement is for the period from 07.11.2010 to 16.06.2013 and
outstanding balance as on 16.06.2013 is Rs.58,77,694/-.
16 CC.15503/2017( J)

13. Ex.P25 (a) to (v) are the 22 photographs. Ex.P26 is the
C.D. Ex.P27 is the Times of India News paper dated 09.09.2021.
Ex.P28 is the receipt issued by the photographer for giving the
photographs and CD. Ex.P28(a) is the cover. On perusal of Ex.25
to Ex.P27, they disclose that the apartment appears to have not
completed as on 09.09.2021. Ex.P29 to 30 are the letters issued by
Canara Bank. They disclose that the complainant became personal
guarantee for car loan taken by the accused No.2. The car loan of
Rs.7,65,000/- was taken on 04.02.2008 and it was closed on
28.12.2011 and the complainant is relieved from the personal
guarantee of the said loan. Ex.P31 is the Bank statement of the
car loan. The car loan account was closed on 28.12.2011 and at
the time of closure, the balance amount was Rs.3,53,858/-. They
do not disclose that the said balance amount was paid by the
complainant.

14. Ex.P32 is the NOC issued by first accused to SBI,
RACPC, Bengaluru for disbursing the loan amount to the account
of accused No.1 in PNB RMV branch, Bengaluru current account
No.3625002100111765. Ex.P32(a) is the signature of accused No.2.
Ex.P33 is the Bank pass book of the complainant Dena Bank,
Nagashetty halli branch, Bengaluru. Ex.P33(a) is the transaction
portion dated 30.03.2009. It discloses that on 30.03.2009 cash of
Rs.4,00,000/- withdrawn twice through self cheques bearing
No.590751 and 590752 to give the said amount to Moksha
builders. Ex.P34 is the letter issued by first accused to bank.
Ex.P34(a) is the signature of the accused No.2. It discloses that the
17 CC.15503/2017( J)

original documents pertaining to the Flat No.C2 Moksha Elite are
with first accused and intimated the bank about the bank and
account number of first accused for release of amount. Ex.P35 is
the statement of account of the complainant pertaining to the
account in SBI, Sanjaynagar branch. It is the loan account
statement of the housing loan for purchase of flats No.B3 in
Shreya Residency Apartment.

15. Ex.P36 is the original sale agreement dated 17.12.2008.
On perusal of Ex.P36, it discloses that the another firm Moksha
Builders represented by partners being GPA holder of the property
owners agreed to sell the property Flat No.A1 ie., apartment in
Shreya Residency in favour of the complainant for sale
consideration of Rs.30,00,000/- and executed the agreement by
receiving advance consideration of Rs.8,00,000/-. Ex.P37 is the
original building construction agreement dated 17.12.2008. It
discloses that the construction cost is fixed at Rs.36,00,000/- and
complainant paid the accused Rs.8,00,000/- as advance and
Rs.28,00,000/- were agreed to be paid as per the schedule therein.

16. Ex.P38 & 39 are 2 receipts. Ex.P38(a) & 39(a)
signature of the accused. Ex.P38 and 39 disclose that the accused
No.1 firm acknowledged the receipt of Rs.15,19,000/- on
21.10.2011 and Rs.20,97,000/- on 13.01.2012. Ex.P40 is the letter
issued by Muthoot Finance. It discloses that the complainant
availed gold loan of Rs.40,70,500/- and paid interest of
Rs.52,209/- during the period of 01.04.2011 to 31.03.2012.
18 CC.15503/2017( J)

17. The accused have not lead evidence on their behalf.
The counsel for the accused No.1 to 3 has extensively cross
examined PW.1. The defence is set up by the counsel for the
accused in the cross examination and the documents in support of
the defence were marked by way of confrontation during the cross
examination. It is the defence of the accused as set up in cross
examination of PW.1 is that the partnership firm is not the drawer
of the cheques. The cheques belonged to the individual account of
accused No.2. The complainant has not issued notice to accused
No.2 personally. The signatures in the cheques does not belong to
the accused No.2. The bank memo received with endorsement
drawer's signature differs. The case is not filed against accused
No.2 individually. The accused have paid Rs.1,63,79,355/- to the
complainant. There is no legally enforceable debt as alleged in the
complaint. The cheques are not issued by the accused No.2 as
alleged in the complaint. The cheques at Ex.P4 to 6 have been
stolen on 11.02.2013, the day on which the father of accused No.2
committed suicide. The said cheques were provided in the year
2010. The signatures in the cheques were forged. There is no
individual transaction between the complainant and the accused
No.2 and the complainant has not given any amount to accused
No.2 individually. The transaction of the complainant in respect of
the Flat No.C2 in Moksha Elite Apartment is with the accused
No.1 firm and the construction work of Flat No.C2 is completed.
The other two Flats in the same apartment had been purchased by
complainant and his mother and the sale deeds had been executed
19 CC.15503/2017( J)

and possessions had been delivered. The complainant filed false
case against the accused even though there in no legally
enforceable debt.

18. In order to prove the defence, the accused have relied
on the documents marked during the cross examination of PW.1,
which are at Ex.D1 to 11. Ex.D1 to Ex.D4 are the 4 receipts.
During the course of cross examination, when the receipt at Ex.D1
was confronted to PW.1, he did not admit his signature in the
receipt. Thereafter the signature of Vageesh Shivacharya (who is
the father of accused No.2, the then partner of accused No.1 and
who died on dated 11.02.2013) in Ex.D1 was shown and he stated
that it might be the signature of Vageesh Shivacharya. Thereafter
it was marked as Ex.D1. The signature of the complainant in the
vakalath was confronted and marked as Ex.C1 and C1(a). The
signature of the complainant at Ex.C1(a), all other signatures of
the complainant in the complaint and evidence and signature at
Ex.D1 appear similar and are one and the same. It shows that the
complainant obtained hand loan of Rs.16,50,000/- by way of cash
ie., Rs.10,00,000/- on 03.03.2010 and Rs.6,50,000/- on 20.04.2010.
He denied his signature in Ex.D1 to merely deny the receipt of
amount of Rs.16,50,000/- by way of cash from the then partner
Vageesh Shivacharya. Similarly receipt at Ex.D2 was confronted
and on his admission, it was marked. Ex.D2 discloses that the
complainant had took hand loan of Rs.9,00,000/- by way of cash
on 18.04.2010. During the course of cross examination, when the
receipt at Ex.D3 was confronted to PW.1, he admitted it and it
20 CC.15503/2017( J)

was marked. ExD.3 discloses that complainant acknowledged the
receipt of Rs.4,50,000/- by way of cash on 04.10.2011 and
Rs.5,00,000/- by way of cheque of accused No.1 firm bearing
No.842664 pertaining to PNB, RMV Branch, Bengaluru. During the
course of cross examination, he admitted the receipt of
Rs.12,50,000/- and Rs.5,00,000/- by way of RGTS on 12.08.2011.
When Ex.D4 was confronted to him, he did not admit the
signature and receipt. However he admitted the signature of the
then partner of accused No.1 firm Vageesh Shivacharya and it was
marked. The signature of the complainant at Ex.C1(a), all other
signatures of the complainant in the complaint and evidence and
signature at Ex.D4 appear similar and are one and the same. As
per ExD.4 the total amount received by the complainant is
Rs.12,50,000/- out of which Rs.5,00,000/- is received by way of
RTGS and remaining amount is received by cash on various dates.
It shows that the complainant denied the signature in Ex.D4 to
merely deny the receipt of amount of Rs.12,50,000/- by way of
RTGS and cash from then partner Vageesh Shivacharya. Ex.D4 also
discloses that the complainant taken back advance amount of
Rs.12,50,000/- paid to Flat No.C2 in Moksha Elite, which is the
subject matter pertaining to the amounts in the cheques. It is also
pertinent to note that Ex.D2 and 3 are admitted receipts and the
signatures of the complainant in Ex.D2 and Ex.D3 and signatures
in Ex.D1 and 4 appear similar and are one and the same. Ex.D6 is
the certified copy of bank statement pertaining to the account of
the complainant in State Bank of India, Dollars colony branch,
Bengaluru. Ex.D7 is the certified copy of bank statement pertaining
21 CC.15503/2017( J)

to the account of the complainant in Central bank of India,
Rajmahal Vilas Extension branch, Bengaluru. The complainant
admitted the receipt of various amounts in lakhs of rupees on
various dates from the account of accused No.1 firm and other
accounts of the accused to his bank accounts at ExD.6 and 7.

19. PW.1 admitted the certified copy of sale deed dated
10.02.2012 during his cross examination and it was marked as
Ex.D5. It discloses that the complainant purchased Flat No.D1 in
Moksha Elite Apartment for sale consideration of Rs.40,00,000/-
from accused No.1 firm. Ex.D5(a) is the relevant portion in Ex.D5.
It discloses that the vacant physical possession of Flat No.D1 in
Moksha Elite Apartment was handed over to the complainant as
on the date of sale deed ie., 10.02.2012. PW.1 also admitted the
certified copy of sale deed dated 10.02.2012 during his cross
examination and it was marked as Ex.D11. It discloses that the
mother of the complainant by name Shaheen Taj purchased Flat
No.A2 in Moksha Elite Apartment for sale consideration of
Rs.43,48,000/- from accused No.1 firm. It discloses that as per
recital No.7 in the sale deed, the vacant physical possession of
Flat No.A2 in Moksha Elite Apartment was handed over to the
mother of complainant as on the date of sale deed ie., 10.02.2012.
PW.1 admitted the certified copy of agreement of mortgage dated
08.11.2010 during his cross examination and it was marked as
Ex.D10. It discloses that the complainant mortgaged Flat No.C2 in
Moksha Elite Apartment in SBI bank for having obtained housing
loan.
22 CC.15503/2017( J)

20. PW.1 admitted the certified copy of sale deed dated
30.10.2009 during his cross examination and it was marked as
Ex.D8. It discloses that the complainant purchased Flat No.B3 in
Shreya Residency Apartment for sale consideration of
Rs.28,12,000/- from Moksha Builders. PW.1 admitted the certified
copy of sale deed dated 30.08.2012 during his cross examination
and it was marked as Ex.D9. It discloses that the complainant sold
Flat No.B3 in Shreya Residency Apartment in favour of Prakash
Rao Babu Rao Gayakwad for sale consideration of Rs.35,25,000/-.

21. The counsel for the accused argued that the
complainant filed the complaint on the basis of agreement of sale
and construction agreement but he failed to produce the said
documents. The transaction is between the complainant and the
partnership firm by name Moksha Constructions in respect of the
project Moksha Elite. The complainant paid the amount to the
account of the partnership firm in respect of Flat No.C-2 in the
project Moksha Elite Apartment. The complainant did not pay any
amount to the accused No.2 personally. The accused No.2 has not
issued the cheques in favour of the complainant. The accused No.2
disputed the issuance of cheques and the signatures in the
cheques. The cheques have been dishonoured for the reason
'Drawers Signatures Differs' and the complainant failed to prove
that the signatures found in the cheques are the signatures of the
accused No.2. The complainant filed the complaint against the
partnership firm by name Moksha Constructions represented by its
23 CC.15503/2017( J)

partners accused No.2 and 3. However the cheques did not belong
to the account of the partnership firm. The partnership firm is not
the drawer of the cheques. The cheques belong to the personal
account of accused No.2. The complainant knew the said facts but
he did not file the complaint against the accused No.2 and no
notice was sent by the complainant demanding the repayment of
amount of cheques to accused No.2 personally. Therefore the
ingredients of Sec.138 of N.I Act are not complied. The
complainant claimed the amount in respect of the transaction with
the firm. During the cross examination of PW.1, he admitted the
credit of lakhs of amount to his accounts and he deposed that the
said amounts are not concerned to the present transaction but they
are concerned to different transactions. However the complainant
has not adduced any evidence to show that the said amounts
credited to his accounts, which are admitted by him, are
pertaining to the different transactions. The cheques at Ex.P4 to 6
have been stolen on 11.02.2013, the day on which the father of
accused No.2 committed suicide. The said cheques were provided
in the year 2010. The signatures in the cheques are forged. The
complainant deposed falsely that the apartment is incomplete as
the sale deeds at Ex.D5 and D11 clearly show that the
complainant and his mother purchased two flats in the said
Moksha Elite Apartment. The registered sale deeds show that the
possession has been delivered. The complainant admitted the
receipt of amount as per the bank statements at Ex.D6, D7, the
receipts at Ex.D1 to 4 and the bank statements produced by the
complainant himself at Ex.P21, Ex.P23 and Ex.P24. The
24 CC.15503/2017( J)

complainant failed to prove that the amounts received by him are
pertaining to different transactions. He filed the table in respect of
the amounts received by the complainant as admitted by him in
the cross examination, which is as under:-

Sl No. Date Amount Cheque Exhibits
No.
1 4.5.2010 79,500/- - -
2 3.3.2010 10,00,000/- - Ex.D1
20.4.2010 6,50,000/-
3 18.4.2010 9,00,000 - Ex.D2
4 4.10.2011 4,50,000/- -
5,00,000/- 842664
5 12.8.2011 12,50,000/- Ex.D4
5,00,000/- RTGS
6 30.3.2011 1,33,500/- 842662 -
7 18.4.2011 5,00,000/- 842664 -
8 27.4.2011 1,33,500/- 842665 -
10 29.6.2011 1,33,500/- 842671 SBI A/c.
11 4.10.2011 5,00,000/- 892664 -/-
12 7.3.2012 20,000/- 720082 -/-
13 16.3.2012 52,605/- 720086 -/-
14 10.4.2012 1,00,000/- 720087 -/-
15 21.4.2012 18,000/- 915571 -/-
16 4.5.2012 1,33,500/- 720726 -/-
17 10.5.2012 1,07,000/- 720734 -/-
18 28.5.2012 1,07,000/- 720737 -/-
19 2.6.2012 1,33,500/- 720740` -/-
20 7.6.2012 1,07,000/- - -/-
21 4.7.2012 1,33,500/- 720753 -/-
22 7.7.2012 37,750/- 720738 -
25 CC.15503/2017( J)

23 30.8.2012 21,30,000/- 165259 Ex.D7
24 11.3.2012 2,15,000/- 169260 Ex.D7
25 11.2.2012 19,00,000/- 100628 Ex.D-6(a)
26 13.2.2012 7,00,000/- 669629 Ex.D6(b)
27 4.10.2010 60,000/- 0163181 Ex.P-23(a)
28 3.5.2012 1,20,000/- 720726 Ex.D6
29 12.2.2011 5,00,000/- - Ex.D6
30 2.2.2011 1,33,500/- - Ex.D6
31 26.2.2011 1,33,500/- - Ex.D6
32 29.3.2011 1,33,500/- 842662 Ex.D6
33 27.4.2011 1,33,500/- DD Ex.D6
34 28.6.2011 1,33,500/- 842671 Ex.D6
35 1.6.2012 1,33,500/- 720740 Ex.D6
36 16.7.2012 15,20,000/- 169253 CBI A/c.
37 26.2.2011 1,20,000/- - Ex.D-6
38 29.3.2011 1,33,500/- - -
39 12.8.2011 5,00,000/- - -

1 To 39 Total 1,63,79,355/- - -

22. The counsel for the complainant argued that the
accused No.2 issued the cheques in the year 2017 admitting the
liability. The accused did not dispute the receipt of amounts from
the complainant as alleged in the complaint. The transaction is
between the complainant and the accused No.1 firm in respect of
purchase of Flat No.C-2 in Moksha Elite Apartment. The
complainant filed the complaint against the partnership firm as the
transaction took place between the complainant and the
partnership firm. The accused No.2 is the partner of accused No.1
partnership firm and issued the cheques admitting the liability. It
26 CC.15503/2017( J)

is not the look out of the complainant to see whether the cheques
have been issued from the account of the partnership firm or
through his personal account. Though the cheques have been
dishonoured with shara 'Drawers Signatures Differs' it still attracts
the provision u/sec.138 of N.I Act. It is for the accused to prove
that the signatures in the cheques are forged. The accused credited
the amounts to the account of the complainant but the said
amounts are not concerned to the present transaction. There are
various transactions between the complainant and the partnership
firm of the accused. The accused received the notice but failed to
give the reply to the said notice. The complainant has produced
the documents to show that he paid the amount to the accused as
alleged in the complaint. He also produced the documents to show
that he obtained the home loan, which has been credited to the
account of the accused through bankers cheque. The accused failed
to complete the project within stipulated time and therefore he
was unable to pay the Home Loan and the bank issued notice to
him to pay the outstanding amount that is the principal and
interest. When it was asked to the accused No.2 to discharge the
liability, the cheques in question have been issued by the accused
No.2. The complainant complied all the ingredients of Sec.138 of
N.I Act and therefore the presumptions under Sec.139 of N.I Act is
available in favour of the complainant. The burden is on the
accused to lead evidence and rebut the presumption. The accused
tried to mislead the Court by bringing the different transactions
between the complainant and the accused and by producing the
documents which are not connected to the present transaction.
27 CC.15503/2017( J)

23. In the following decisions the law in respect of the
presumptions, burden of proof and rebuttal of presumptions is
settled:-

(a) The Hon'ble Supreme Court in the case of M.S.
Narayana Menon Vs. State of Kerala - (2006) 6 Supreme
Court Cases 39, held as under:-

"30. Applying the said definitions of 'proved' or 'disproved'
to principle behind Section 118(a) of the Act, the Court shall
presume a negotiable instrument to be for consideration
unless and until after considering the matter before it, it
either believes that the consideration does not exist or
considers the non-existence of the consideration so probable
that a prudent man ought, under the circumstances of the
particular case, to act upon the supposition that the
consideration does not exist. For rebutting such presumption,
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.

31. A Division Bench of this Court in Bharat Barrel &
Drum Manufacturing Company v. Amin Chand Payrelal
reported in (1999) 3 SCC 35 albeit in a civil case laid
down the law in the following terms:
28 CC.15503/2017( J)

"12. Upon consideration of various judgments as noted
hereinabove, the position of law which emerges is that
once execution of the promissory note is admitted, the
presumption under Section 118(a) would arise that it is
supported by a consideration. Such a presumption is
rebuttable. The defendant can prove the non-existence
of a consideration by raising a probable defence. If the
defendant is proved to have discharged the initial onus
of proof showing that the existence of consideration
was improbable or doubtful or the same was illegal,
the onus would shift to the plaintiff who will be
obliged to prove it as a matter of fact and upon its
failure to prove would disentitle him to the grant of
relief on the basis of the negotiable instrument. The
burden upon the defendant of proving the non-
existence of the consideration can be either direct or
by bringing on record the preponderance of
probabilities by reference to the circumstances upon
which he relies. In such an event, the plaintiff is
entitled under law to rely upon all the evidence led in
the case including that of the plaintiff as well. In case,
where the defendant fails to discharge the initial onus
of proof by showing the non- existence of the
consideration, the plaintiff would invariably be held
entitled to the benefit of presumption arising under
Section 118(a) in his favour. The court may not insist
upon the defendant to disprove the existence of
29 CC.15503/2017( J)

consideration by leading direct evidence as the
existence of negative evidence is neither possible nor
contemplated and even if led, is to be seen with a
doubt."

This Court, therefore, clearly opined that it is not
necessary for the defendant to disprove the existence of
consideration by way of direct evidence.

32. The standard of proof evidently is preponderance of
probabilities. Inference of preponderance of probabilities can
be drawn not only from the materials on records but also by
reference to the circumstances upon which he relies.

33. Presumption drawn under a statute has only an
evidentiary value. Presumptions are raised in terms of the
Evidence Act. Presumption drawn in respect of one fact may
be an evidence even for the purpose of drawing presumption
under another."

(b) The Hon'ble Supreme Court in Kumar Exports Vs.
Sharma carpets reported in (2009) 2 SCC 513, held as under;

"20. The accused in a trial under Section 138 of the Act has
two options. He can either show that consideration and debt
did not exist or that under the particular circumstances of
the case the non-existence of consideration and debt is so
30 CC.15503/2017( J)

probable that a prudent man ought to suppose that no
consideration and debt existed. To rebut the statutory
presumptions an accused is not expected to prove his
defence beyond reasonable doubt as is expected of the
complainant in a criminal trial. The accused may adduce
direct evidence to prove that the note in question was not
supported by consideration and that there was no debt or
liability to be discharged by him. However, the court need
not insist in every case that the accused should disprove the
non- existence of consideration and debt by leading direct
evidence because the existence of negative evidence is
neither possible nor contemplated. At the same time, it is
clear that bare denial of the passing of the consideration and
existence of debt, apparently would not serve the purpose of
the accused. Something which is probable has to be brought
on record for getting the burden of proof shifted to the
complainant. To disprove the presumptions, the accused
should bring on record such facts and circumstances, upon
consideration of which, the court may either believe that the
consideration and debt did not exist or their non-existence
was so probable that a prudent man would under the
circumstances of the case, act upon the plea that they did
not exist. Apart from adducing direct evidence to prove that
the note in question was not supported by consideration or
that he had not incurred any debt or liability, the accused
may also rely upon circumstantial evidence and if the
circumstances so relied upon are compelling, the burden
31 CC.15503/2017( J)

may likewise shift again on to the complainant. The accused
may also rely upon presumptions of fact, for instance, those
mentioned in Section 114 of the Evidence Act to rebut the
presumptions arising under Sections 118 and 139 of the Act.

21. The accused has also an option to prove the non-
existence of consideration and debt or liability either by
letting in evidence or in some clear and exceptional cases,
from the case set out by the complainant, that is, the
averments in the complaint, the case set out in the statutory
notice and evidence adduced by the complainant during the
trial. Once such rebuttal evidence is adduced and accepted
by the court, having regard to all the circumstances of the
case and the preponderance of probabilities, the evidential
burden shifts back to the complainant and, thereafter, the
presumptions under Sections 118 and 139 of the Act will not
again come to the complainant's rescue.

26. In light of these extracts, we are in agreement
with the respondent-claimant that the presumption mandated
by Section 139 of the Act does indeed include the existence
of a legally enforceable debt or liability. To that extent, the
impugned observations in Krishna Janardhan Bhat (supra)
may not be correct. However, this does not in any way cast
32 CC.15503/2017( J)

doubt on the correctness of the decision in that case since it
was based on the specific facts and circumstances therein.
As noted in the citations, this is of course in the nature of a
rebuttable presumption and it is open to the accused to raise
a defence, wherein the existence of a legally enforceable
debt or liability can be contested. However, there can be no
doubt that there is an initial presumption, which favours the
complainant.

27. Section 139 of the Act is an example of a
reverse onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption under
Section 139 is a device to prevent undue delay in the course
of litigation. However, it must be remembered that the
offence made punishable by Section 138 can be better
described as a regulatory offence since the bouncing of a
cheque is largely in the nature of a civil wrong whose
impact is usually confined to the private parties involved in
commercial transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
accused/defendant cannot be expected to discharge an
unduly high standard or proof.
33 CC.15503/2017( J)

28. In the absence of compelling justifications,
reverse onus clauses usually impose an evidentiary burden
and not a persuasive burden. Keeping this in view, it is a
settled position that when an accused has to rebut the
presumption under Section 139, the standard of proof for
doing so is that of `preponderance of probabilities'.
Therefore, if the accused is able to raise a probable defence
which creates doubts about the existence of a legally
enforceable debt or liability, the prosecution can fail. As
clarified in the citations, the accused can rely on the
materials submitted by the complainant in order to raise
such a defence and it is conceivable that in some cases the
accused may not need to adduce evidence of his/her own.

(d) The the Hon'ble Supreme Court in Basalingappa Vs.
Mudibasappa reported in (2019) 5 SCC 418 held as under:-

"25. We having noticed the ratio laid down by this Court in
the above cases on Sections 118 (a) and 139, we now
summarise the principles enumerated by this Court in
following manner:
25.1. Once the execution of cheque is admitted Section
139 of the Act mandates a presumption that the
cheque was for the discharge of any debt or other
liability.
34 CC.15503/2017( J)

25.2. The presumption under Section 139 is a
rebuttable presumption and the onus is on the accused
to raise the probable defence. The standard of proof
for rebutting the presumption is that of preponderance
of probabilities.

25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be
drawn not only from the materials brought on record
by the parties but also by reference to the
circumstances upon which they rely.

25.4. That it is not necessary for the accused to come
in the witness box in support of his defence, Section
139 imposed an evidentiary burden and not a
persuasive burden.

25.5. It is not necessary for the accused to come in
the witness box to support his defence.

(e) The Hon'ble Supreme Court of India in the case of
A.P.S Forex Services Pvt Ltd Vs. Shakthi Internatonal Fashion
Linkers & Others reported in 2020 STPL 5773 SC, held at
para No.7 as under:
35 CC.15503/2017( J)

7. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second time,
after the earlier cheques were dishonoured and that even
according to the accused some amount was due and
payable, there is a presumption under Section 139 of the
N.I. Act that there exists a legally enforceable debt or
liability. Of course such presumption is rebuttable in nature.
However, to rebut the presumption the accused was required
to lead the evidence that full amount due and payable to
the complainant has been paid. In the present case, no such
evidence has been led by the accused. The story put forward
by the accused that the cheques were given by way of
security is not believable in absence of further evidence to
rebut the presumption and more particularly the cheque in
question was issued for the second time, after the earlier
cheques were dishonoured. Therefore, both the courts below
have materially erred in not properly appreciating and
considering the presumption in favour of the complainant
that there exists legally enforceable debt or liability as per
Section 139 of the N.I. Act. It appears that both, the
Learned Trial Court as well as the High Court, have
committed error in shifting the burden upon the complainant
to prove the debt or liability, without appreciating the
presumption under Section 139 of N.I. Act. As observed
36 CC.15503/2017( J)

above, Section 139 of the Act is an example of reverse onus
clause and therefore once the issuance of the cheque has
been admitted and even the signature on the cheque has
been admitted, there is always a presumption in favour 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.

(f) The Hon'ble Supreme Court of India in the case of
Thriyambak S Hegade Vs. Sripad reported in 2021 STPL
10270 SC, held at para No.11 & 12 as under:

11. From the facts arising in this case and the
nature of the rival contentions, the record would disclose
that the signature on the documents at Exhibits P-6 and P-2
is not disputed. Exhibit P-2 is the dishonoured cheque based
on which the complaint was filed. From the evidence
tendered before the JMFC, it is clear that the respondent
has not disputed the signature on the cheque. If that be the
position, as noted by the courts below a presumption would
arise under Section 139 in favour of the appellant who was
the holder of the cheque. Section 139 of the N.I. Act reads
as hereunder: "139. Presumption in favour of holder- 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."
37 CC.15503/2017( J)

12. Insofar as the payment of the amount by the
appellant in the context of the cheque having been signed
by the respondent, the presumption for passing of the
consideration would arise as provided under Section 118(a)
of N.I. Act which reads as hereunder:- "118. Presumptions
as to negotiable instruments - 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, was accepted, indorsed, negotiated or
transferred for consideration."

(g) The Hon'ble Supreme Court of India in the case of
M/s. Kalamani Tex v. P. Balasubramanian reported in 2021
STPL 1056 observed at para No.14 to 18 as under:-

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 NIA. 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.
38 CC.15503/2017( J)

This point of law has been crystalized by this Court in
Rohitbhai Jivanlal Patel Vs. State of Gujarat, (2019) 18 SCC
106 in the following words:

"In the case at hand, even after purportedly drawing
the presumption under Section 139 of the NI Act, the trial
Court proceeded to question the want of evidence on the
part of the complainant as regards the source of funds for
advancing loan to the accused and want of examination of
relevant witnesses who allegedly extended him money for
advancing it to the accused. This approach of the Trial
Court had been at variance with the principles of
presumption in law. After such presumption, the onus
shifted to the accused and unless the accused had discharged
the onus by bringing on record such facts and circumstances
as to show the preponderance of probabilities tilting in his
favour, any doubt on the complainant's case could not have
been raised for want of evidence regarding the source of
funds for advancing loan to the appellant-accused....."

15. Once the 2nd Appellant had admitted his
signatures on the cheque and the Deed, the trial Court
ought to have presumed that the cheque was issued as
consideration for a legally enforceable debt. The trial Court
fell in error when it called upon the Complainant-
Respondent to explain the circumstances under which the
appellants were liable to pay. Such approach of the Trial
39 CC.15503/2017( J)

Court was directly in the teeth of the established legal
position as discussed above, and amounts to a patent error
of law.

16. No doubt, and as correctly argued by senior
Counsel for the appellants, the presumptions raised under
Section 118 and Section 139 are rebuttable in nature. As
held in M.S.Narayana Menon Vs. State of Kerala, (2006) 6
SCC 39, which was relied upon in Basalingappa (supra), a
probable defence needs to be raised, which must meet the
standard of "preponderance of probability", and not mere
possibility. These principles were also affirmed in the case
of Kumar Exports (supra), wherein it was further held that a
bare denial of passing of consideration would not aid the
case of accused.

17. Even if we take the arguments raised by the
appellants at face value that only a blank cheque and signed
blank stamp papers were given to the respondent, yet the
statutory presumption cannot be obliterated. It is useful to
cite Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, 36
where this court held that:

"Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards
some payment, would attract presumption under
Section 139 of the Negotiable Instruments Act, in
40 CC.15503/2017( J)

the absence of any cogent evidence to show that
the cheque was not issued in discharge of a
debt."

18. Considering the fact that there has been an
admitted business relationship between the parties, we are of
the opinion that the defence raised by the appellants does
not inspire confidence or meet the standard of
'preponderance of probability'. In the absence of any other
relevant material, it appears to us that the High Court did
not err in discarding the appellants' defence and upholding
the onus imposed upon them in terms of Section 118 and
Section 139 of the NIA.

24. Therefore on perusal of the above judgments it is clear
that it is well established that if the cheque and signature are
admitted, the presumptions U/s. 139 and 118 of NI Act arise that
the cheque was issued for legally enforceable debt/liability and the
cheque was made or drawn for consideration. The presumptions
are rebuttable. The accused has to raise a probable defence and
prove it by adducing evidence, which must meet the standard of
preponderance of probabilities. Unless the same has been done,
doubt can not be raised on the case of the complainant. An
accused need not examine himself for discharging the burden of
proof placed upon him under a statute. He may discharge his
burden on the basis of the materials already brought on record.
An accused has constitutional rights to remain silent. The standard
41 CC.15503/2017( J)

of proof on part of the accused and that of the prosecution in a
Criminal Case is different. The prosecution must prove the guilt of
an accused beyond all reasonable doubts and the standard of proof
so as to prove a defence on the part of an accused is
preponderance of probabilities. The Inference of preponderance of
probabilities can be drawn not only from the materials brought on
record by the parties but also by reference to the circumstances
upon which they rely. He need not lead defence evidence for the
said purpose and it can be done by relying on the evidence of the
prosecution on record. It is the duty of the Courts to consider
carefully and appreciate the totality of the evidence and then come
to a conclusion, whether in a given case, the accused has shown
that the case of the complainant is in peril for the reason that the
accused has established a probable defence either by leading direct
defence evidence or by relying on the evidence of the
complainant.

25. In the background of facts and the settled law in
respect of presumptions, the evidence on record has to be
appreciated. On perusal of the documents, it is clear that the
cheques at Ex.P4 to 6 bearing Nos.(1)327214 dated 28.02.2017 for
Rs.91,98,829.44, (2) 327215 dated 28.02.2017 for Rs.45,00,000/-
(3)327216 dated 28.02.2017 for Rs.18,98,000/- all cheques are
drawn on Syndicate Bank, Bangalore were presented within its
validity. Ex.P7 to Ex.P9 are the Bank Memos. They show that the
cheques were returned with shara "Drawers Signature differs"
dated 07.03.2017. The legal notice dated 24.03.2017 was issued to
42 CC.15503/2017( J)

the accused No.1 firm and its partners at the registered address of
partnership firm and also to another address. The accused No.2 is
the son of accused No.3. Notice sent to partnership firm and the
partners at the registered address was served on accused No.2 on
30.03.2017 as per Ex.P16 and it was returned with shara
'addressee left' on 30.03.2017 in respect of the accused No.1 firm
and accused No.3 partner as per Ex.P19 and 20. The notice sent to
accused No.2 on another address i.e. architectural services private
limited, No.8, 10 Kalyana Nagar, 3 rd cross, HRBR Layout, first
block, Bengaluru-43 was served on accused No.2 on 27.03.2012. It
is pertinent to note that the said address was not mentioned in the
notice but it is mentioned in the cause title of the complaint. The
notice sent to accused No.1 firm at another address was returned
with shara 'addressee left' on 30.03.2017 as per Ex.P18. The
complaint was filed on 22.04.2017.

26. It is the defence of the accused in the cross
examination of PW.1 that the cheques in question at Ex.P4 to 6
have been stolen on 11.02.2013, the day on which the father of
accused No.2 committed suicide. The said cheques were provided
in the year 2010. The signatures in the cheques are forged. The
counsel for the accused argued that the complainant admitted that
the bank memo returned with shara Drawers Signature Differs. The
signatures in the cheques do not belong to the accused No.2. As
per Sec.146 of N.I Act bank return memo is prima facie evidence
for dishonour of cheque for the reason mentioned therein. The
43 CC.15503/2017( J)

burden is on the complainant to prove that the signatures are that
of the accused No.2.

(a) The counsel for the accused relied on the judgment of
Hon'ble Jharkhand High Court in the case of Ram Prakash Gupa
v/s State of Jharkhand and Other reported in 2021(1) EcrC
101, wherein it was held as under:
As per complainant himself the signature in the
cheque differed and the lower appellate Court had made
certain observations with regard to writing on the cheque
itself while examining the case of the accused on the
principle of preponderance of probabilities. As per
complainant the cheque had bounced due to both the
reasons i.e., insufficient funds and signature differed whereas
it was specific case of the complainant that the accused had
made his signature on the cheque in such a manner that it
would differ. The Lower appellate Court has given four
different cogent reasons to hold that the accused had
rebutted the presumption under section 139 of the Act. The
cheque had bounced due to insufficient funds and the
signature on the cheque did not match with the specimen
signature of the accused in the bank. The Lower appellate
Court committed no illegality or perversity in the impugned
judgment. No interference warranted.

(b) The counsel for the accused also relied on the judgment of
Hon'ble Kerala High Court in the case of Muralidharan Pillai v/s
44 CC.15503/2017( J)

Meena Vergeese and Others reported in 2020 ACD 635 ,
wherein it was held as under:

When the accused is denying her signature and she
has got a definite case that the signature seen in Ex.P1 is
not put by her. The burden is upon the complainant to
prove the execution of the cheque. The presumption under
section 118 & 139 of N.I Act will come into operation only
when the execution of the cheque is proved by the
complainant.

27. The counsel for the complainant argued that even
though it is the signature of accused No.2, he is denying his
signature only in order to escape from the liability. He relied on
the judgment of Hon'ble High Court of Jammu and Kashmir and
Ladak at Srinagar in the case of Mohammal Shaffiwani v/s Noor
Mohammad Khan in CRM(M) No.308/2021 dated 17.03.2022
wherein the Hon'ble High Court referred the judgment of the
Hon'ble Supreme Court in the case of Laxmi Dyechem v. State
of Gujarat , reported in (2012) 13 SCC 375, wherein it was
held by the Hon'ble Supreme Court that the expression "amount
of money ... is insufficient" appearing in Section 138 of the Act is
a genus and dishonour for reasons such as "account closed",
"payment stopped", "referred to the drawer" are only species of
that genus. Just as dishonour of a cheque on the ground that the
account has been closed is a dishonour falling in the first
contingency referred to in Section 138, so also dishonour on the
45 CC.15503/2017( J)

ground that the "signatures do not match" or that the "image is
not found", would constitute a dishonour within the meaning of
Section 138 of the Act.

28. The accused have not lead any evidence to prove that
the cheques were stolen on 11.02.2013 as alleged. The counsel for
the accused made several suggestions in that regard and PW.1
denied said suggestions. Mere suggestions are not sufficient. The
accused No.2 has been served with the notice as per Ex.P16 and
17 but he has not taken any action against the complainant either
for committing theft of the cheques or for forgery of the signatures
in the cheques. No stop payment instructions were given to the
bank. The accused No.2 is not a layman but a businessman having
worldly knowledge of transactions. He contended that the cheques
were stolen on 11.02.2013 and the signatures were forged but he
has not explained as to why he has kept quiet without taking any
action. No prudent man would do that. There is nothing on record
to substantiate the contention taken by the accused No.2 that the
cheques were stolen and signatures were forged. Therefore defence
of the accused No.2 in respect of the theft of cheques as alleged is
not a probable defence. No doubt that if the cheques belong to
the account of the accused No.1 firm and the cheques would have
returned with endorsement 'drawers signature differs' then
definitely the ingredients of the provisions u/sec.138 of N.I Act are
attracted. In the case of Laxmi Dyechem v. State of Gujarat ,
reported in (2012) 13 SCC 375 the Hon'ble Supreme Court held
the expression "amount of money ... is insufficient" appearing in
46 CC.15503/2017( J)

Section 138 of the Act is a genus and dishonour for reasons such
as "account closed", "payment stopped", "referred to the
drawer" are only species of that genus. Just as dishonour of a
cheque on the ground that the account has been closed is a
dishonour falling in the first contingency referred to in Section
138, so also dishonour on the ground that the "signatures do not
match" or that the "image is not found", would constitute a
dishonour within the meaning of Section 138 of the Act. In view
of the ratio laid down in the Laxmi Dyechem case, the arguments
of the counsel for the accused that the signature differs does not
attract the provision u/sce.138 of N.I Act is not tenable. However
that is not the fact in the present case. Admittedly the account to
which the cheques in question belong is not maintained by the
accused No.1 firm. The account belongs to accused No.2
individually and he is the drawer of the cheque. Even though it is
considered that the signature in the cheques belongs to accused
No.2, no notice is issued to the accused No.2 individually. The
complainant has not filed case against case accused No.2
individually.

29. It is clear from the complaint averments, documents
produced by the complainant and the accused and the oral
evidence, which includes examination in chief, cross examination
and re-examination, it is clear that the transaction in respect of
the Flat No.C2 in Moksha Elite Apartment took place between the
complainant and the accused No.1 firm represented by its partner
accused No.2 and deceased Sri. B.M Vageesh Shivacharya, who is
47 CC.15503/2017( J)

the father of accused No.2 and husband of accused No.3. The
complainant did not produce the sale agreement dated 19.04.2010
and construction agreement dated 19.04.2010 on the basis of
which the present complaint has been filed. However it is clear
from the evidence on record and the suggestions made by the
counsel for the accused No.1 to 3 that the transaction as alleged
in the complaint in respect of the sale agreement and the
construction agreement dated 19.04.2010 admittedly took place. It
is also clear from the evidence on record, the suggestions made by
counsel for accused No.1 to 3 and admissions obtained from the
PW.1 during the cross examination that the cheques in question at
Ex.P4 to 6 belong to the individual/personal account of accused
No.2. It was elicited in the cross examination of PW.1 that he
knew that the cheques at Ex.P4 to 6 belong to individual account
of accused No.2. Even then the complaint has been filed against
accused No.1 partnership firm and its partners accused No.2 and
3. The counsel for the accused argued that the transaction of the
complainant is with the accused No.1 firm and the amounts are
paid to the firm. There is no transaction between the complainant
and accused No.2 individually and therefore he is not liable. As
per the provisions u/sec.138 of N.I Act the drawer is liable for the
cheque amount. The words "any cheque" and "other liability" in
Section 138 clarifies the legislative intent. If the cheque is given
towards any liability which may have been incurred even by
someone else (such as in a case of a guarantor), the person who
draws the cheque is liable for prosecution in case of dishonour of
the cheque as held by the Hon'ble Supreme Court in ICDS Ltd. v.
48 CC.15503/2017( J)

Beena Shabeer reported in (2002) 6 SCC 426. As per the said
judgment, even if a cheque is issued for liability of other person,
which also includes firm, the drawer of the cheque is liable.

30. In the judgment of Hon'ble Supreme Court of India in
the case of Muinuddin Abdul Sattar Sheikh v/s Vijay D Salvi
reported in AIR 2015 SC 2579, it was held as under;

The appellant company and its directors can not be
made liable for dishonour of cheque issued from the
personal account of an employee of the company. In order
to attract the provisions of Sec.138, a cheque which is
dishonoured must be drawn by a person on an account
maintained by him with the banker for payment of any
amount of money to another person for the discharge in
whole or in part of any debt or other liability. It is only
against the drawer of the cheque which is dishonoured, the
complaint u/sec.138 of N.I Act is maintainable even though
the cheque is issued for the discharge of dues of appellant
company.

31. In the judgment of Hon'ble Supreme Court in the case
of Jugesh Sehgal Vs. Shamsher Singh reported in (2009) 14
SCC 683 wherein it was held as under;
49 CC.15503/2017( J)

Para 13: It is manifest that to constitute an offence
under sec.138 of the Act, the following ingredients are
required to be fulfilled:
(i) a person must have drawn a cheque on tan account
maintained by him in a bank for payment of a certain
amount of money to another person from out of that
account;
(ii) the cheque should have been issued for the discharge, in
whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a
period of six months from the date on which it is drawn or
within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either
because of the amount of money standing to the credit of
the account is insufficient to honour the cheque or that if
exceeds the amount arranged to be paid from that account
by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque
makes a demand for the payment of the said amount of
money by giving a notice in writing, to the drawer of the
cheque, within 15 days of the receipt of information by him
from the bank regarding the return of the cheque as unpaid.
(vi) the drawer of such cheque fails to make payment of the
said amount of money to the payee or the holder in due
course of the cheque within 15 days of the receipt of the
said notice.
50 CC.15503/2017( J)

Being cumulative, it is only when all the
aforementioned ingredients are satisfied that the person who
had drawn the cheque can be deemed to have committed an
offence under sec.138 of N.I Act.

Para-15: As a matter of fact and perhaps having
gained the said knowledge, on 20.1.2001 the complainant
filed an FIR against all the accused for offences u/sections
420, 467, 468, 471 and 406 of the Penal Code (IPC). Thus,
there is hardly any dispute that the cheque, subject-matter
of the complaint under sec.138 of the Act, had not been
drawn by the appellant on an account maintained by him in
Indian Bank, Sonepat branch. That being so, there is little
doubt that the very first ingredient of Section 138 of the
Act, enumerated above, is not satisfied and consequently the
case against the appellant for having committed an offence
under sec.138 of the Act cannot be proved.

On going through the above judgments, it is very much clear
that the drawer of the cheque is alone liable. In the case on hand
the partnership firm represented by its partners is made as accused
and partnership firm is not the drawer of the cheque. Therefore no
liability can be fastened to the accused No.1 firm in the case.

32. In the case on hand, the complainant knew that the
accused No.2 issued cheques pertaining to his individual account
but he did not file the case against accused No.2 individually. He
51 CC.15503/2017( J)

did not issue the notice to the accused No.2 individually. It is the
case of the complainant that the transaction took place with the
accused No.1 firm represented by its partners. It is not at all the
case of the complainant that the accused No.2 issued the cheque
for the liability of the accused No.1 partnership firm. The facts
and evidence make it very much clear that the alleged issuance of
individual cheques by the accused No.2 for the liability of accused
No.1 firm discharges the firm from its liability. The firm is not the
drawer of the cheques. Therefore looking from any angle, the
accused No.1 firm can not be held liable and therefore no
vicarious liability can be fastened to accused No.2 and 3 as per
provision U/s.141 of NI Act. Therefore the above discussion makes
it clear that the ingredients of the provision U/s. 138 of NI Act
are not fulfilled. Therefore the presumption u/sec.139 of N.I Act is
not available to the complainant.

33. The counsel for the complainant argued that the
accused is liable to pay the amount under the cheques and the
accused No.2 admitting the liability issued the cheques. The
complainant has produced the documents to show that he paid the
amounts as alleged in the complaint. He argued that there is
legally enforceable debt. On perusal of the documents produced by
the complainant i.e. ExP.21 and 23 show the credit of the
amounts by the complainant as alleged in the complaint. Ex.P21
shows that on 21.04.2010 an amount of Rs.25,50,000/- was
encashed by the accused through cheque bearing No.673431; on
23.04.2010 an amount of Rs.14,50,000/- was encashed by the
52 CC.15503/2017( J)

accused through cheque bearing No.673430 and on 26.04.2010 an
amount of Rs.1,00,000/- was encashed by the accused through
cheque bearing No.673432. Ex.P23 shows that on 04.10.2010 an
amount of Rs.60,000/- was encashed by the accused through
cheque bearing No.163181; on 03.11.2010 an amount of
Rs.1,20,000/- was encashed by the accused through cheque bearing
No.163184 and on 09.11.2010 an amount of Rs.1,25,000/- was
encashed by the accused through cheque bearing No.163185.
ExP.21 and ExP.23 shows that the amount arranged by him are
credited to account of accused No.1 firm. Further Ex.P38 and 39
show that the accused No.1 firm acknowledged the receipt of
Rs.15,19,000/- on 21.10.2011 and Rs.20,97,000/- on 13.01.2012.
Ex.P40 shows that the complainant availed gold loan of
Rs.40,70,500/- and paid interest of Rs.52,209/- during the period
of 01.04.2011 to 31.03.2012. ExP.38 to 40 show that the
complainant arranged the amount and paid to the accused No.1 as
aforesaid. The receipt of the amounts as per ExP.21, 23, 38, 39 is
not disputed by the accused No1 to 3.

34. The accused disputed the credit of housing loan
amount of Rs.68,00,000/- to the account of accused No.1 firm.
Ex.P22 and ExP.22 (a) show that under the head loans liabilities in
the ITR, the complainant shown SBI Housing Loan-2 (C2 R.T.
Nagar) as Rs.63,28,907/-. The loan account statement at Ex.P24
shows that the home loan of Rs.69,64,000/- was taken by the
complainant in SBI, J.C road branch, Bengaluru and Rs.64,00,000/-
amount is disbursed to accused No.1 through bank cheque. ExP.24
53 CC.15503/2017( J)

is for the period from 07.11.2010 to 16.06.2013 and outstanding
balance as on 16.06.2013 is Rs.58,77,694/-. Ex.P32 is the NOC
issued by first accused to SBI, RACPC, Bengaluru for disbursing
the loan amount to the account of accused No.1 in PNB RMV
branch, Bengaluru current account No.3625002100111765. Ex.P34
is the letter issued by first accused to bank stating that the
original documents pertaining to the Flat No.C2 Moksha Elite are
with first accused and intimated the bank about the bank and
account number of first accused for release of amount. The
documents make it clear that as per NOC issued by the accused
No.1 firm as per ExP.32, bank has disbursed the loan amount of
Rs.64,00,000 to the accused No.1 firm as per ExP.24. It also shows
that complainant repaid amount of housing loan in EMIs as alleged
in the complaint till 2013. Though there is no document to show
that the loan amount of Rs.68,00,000/- is transferred to accused
No.1 firm, certainly there are sufficient materials on record to
show that Rs.64,00,000/- loan amount was transferred to accused
No.1 firm directly from the bank to its account in PNB, RMV
Extension branch, Bengaluru.

35. The counsel for the accused argued that the
complainant had paid amounts to the accused No.1 firm and he
also had got credited the same into his accounts. The counsel for
the accused cross examined PW.1 extensively in respect of the
credit of the amounts from the accounts of accused No.1 firm,
other accounts and also by way of DD and cash. PW1 admitted
the credit of amounts during his cross examination. He admitted
54 CC.15503/2017( J)

credit of Rs.79,500/- on 04.05.2010. He stated that Rs.20,500/-
might have been credited to his account on 04.05.2010. He
admitted receipt dated 18.04.2010 for receiving the sum of
Rs.9,00,000/- as hand loan as per Ex.D2. He admitted the receipt
of amounts of Rs.4,50,000/- and Rs.5,00,000/- on 04.10.2011 and
18.04.2011 respectively as per Ex.D3. He admitted receipt of
Rs.12,50,000/- on 12.08.2011 as per Ex.D4. The clarification needs
to be given in respect of ExD.4. The counsel for the accused
suggested PW.1 that he received Rs.12,50,000 and Rs.5,00,000/-
by RTGS and PW.1 admitted it. However Rs.5,00,000/- is not the
separate amount received apart from Rs.12,50,000/- as per ExD.4.
ExD.4 clearly shows that the total amount received under ExD.4 is
Rs.12,50,000/- out of which Rs.5,00,000/- was transferred by way
of RGTS on 12.08.2011 and remaining amount by way of cash on
various dates. PW.1 denied the receipt of amount of
Rs.16,50,000/- on 03.03.2010 as per ExD.1 and signature in it. The
signature of the complainant at Ex.C1(a), which admitted signature
in vakalath, all other signatures of the complainant in the
complaint and evidence and signature at Ex.D1 appear similar and
are one and the same. It is also pertinent to note that Ex.D2 and
3 are admitted receipts and the signatures in Ex.D2 and Ex.D3 and
signatures of the complainant in Ex.D1 appear similar and are one
and the same. It shows that the complainant denied the signature
in Ex.D1 to merely deny the receipt of amount of Rs.16,50,000/-
by way of cash from the then partner Vageesh Shivacharya.
55 CC.15503/2017( J)

36. During the further cross examination of PW.1, he
stated that there might be a credit of Rs.1,35,500/- on 01.03.2011
and he has admitted the credit of Rs.1,33,500/- to his account by
accused No.1 on 30.03.2011 and Rs.5,00,000/- through RTGS. He
admitted the credit of Rs.1,33,500/- to his account on 27.04.2011
and Rs.1,33,500/- on 29.06.2011 from accused No.1. He admitted
the credit of Rs.5,00,000/- on 04.10.2011. He admitted the credit
of Rs.1,07,000/- to his account on 07.06.2012 from the accused.
He admitted the credit of Rs.21,30,000/- to his account on
30.08.2012 from the accused. PW.1 stated that the said amount
was received for the transaction with respect to one Shreya
Residency but the sale deed of the said Shreya Residency has been
confronted to PW.1 and as he admitted the same it was marked as
Ex.D8 which has been registered on 30.10.2009. He admitted the
credit of Rs.2,15,000/- to his account on 11.03.2012 as per Ex.D7
from the accused. He admitted the credit of Rs.19,00,000/- to his
account on 11.02.2012 which is marked as Ex.D.6(a) and
Rs.7,00,000/- on 13.02.2012 which is marked as Ex.D.6(b) from
the accused. He admitted the credit of Rs.60,000/- to his account
on 04.10.2010 which is marked as Ex.P.23(a). He admitted the
credit of Rs.1,20,000/- to his account on 03.05.2012 in Ex.D.6. He
admitted the credit of Rs.5,00,000/- to his account on 12.02.2011
in Ex.D.6, Rs.1,33,500/- on 02.02.2011, Rs.1,33,500/- on
26.02.2011, Rs.1,33,500/- on 29.03.2011, Rs.1,33,500/- on
27.04.2011, Rs.1,33,500/- on 28.06.2011, Rs.1,33,500/- on
01.06.2012, Rs.1,33,500/- on 02.08.2012 from the accused. He
admitted the credit of Rs.15,20,000/- to his account on 16.07.2012
56 CC.15503/2017( J)

from the accused. He admitted the credit of Rs.5,00,000/- to his
account on 12.08.2011 as per Ex.P23 from the accused. PW.1
stated that the transactions as aforesaid are with regard to other
transactions between him and the accused.

37. The counsel for the accused filed the table of
calculation of total amount paid to the complainant as admitted by
PW.1 in the cross examination and the documents. The table is as
under-

Sl No. Date Amount Cheque Exhibits
No.
1 4.5.2010 79,500/- - -
2 3.3.2010 10,00,000/- - Ex.D1
20.4.2010 6,50,000/-
3 18.4.2010 9,00,000 - Ex.D2
4 4.10.2011 4,50,000/- ExD.3
5,00,000/- 842664
5 12.8.2011 12,50,000/- Ex.D4
5,00,000/- RTGS
6 30.3.2011 1,33,500/- 842662 -
7 18.4.2011 5,00,000/- 842664 -
8 27.4.2011 1,33,500/- 842665 -
10 29.6.2011 1,33,500/- 842671 SBI A/c.
11 4.10.2011 5,00,000/- 892664 -/-
12 7.3.2012 20,000/- 720082 -/-
13 16.3.2012 52,605/- 720086 -/-
14 10.4.2012 1,00,000/- 720087 -/-
15 21.4.2012 18,000/- 915571 -/-
16 4.5.2012 1,33,500/- 720726 -/-
57 CC.15503/2017( J)

17 10.5.2012 1,07,000/- 720734 -/-
18 28.5.2012 1,07,000/- 720737 -/-
19 2.6.2012 1,33,500/- 720740` -/-
20 7.6.2012 1,07,000/- - -/-
21 4.7.2012 1,33,500/- 720753 -/-
22 7.7.2012 37,750/- 720738 -
23 30.8.2012 21,30,000/- 165259 Ex.D7
24 11.3.2012 2,15,000/- 169260 Ex.D7
25 11.2.2012 19,00,000/- 100628 Ex.D-6(a)
26 13.2.2012 7,00,000/- 669629 Ex.D6(b)
27 4.10.2010 60,000/- 0163181 Ex.P-23(a)
28 3.5.2012 1,20,000/- 720726 Ex.D6
29 12.2.2011 5,00,000/- - Ex.D6
30 2.2.2011 1,33,500/- - Ex.D6
31 26.2.2011 1,33,500/- - Ex.D6
32 29.3.2011 1,33,500/- 842662 Ex.D6
33 27.4.2011 1,33,500/- DD Ex.D6
34 28.6.2011 1,33,500/- 842671 Ex.D6
35 1.6.2012 1,33,500/- 720740 Ex.D6
36 16.7.2012 15,20,000/- 169253 CBI A/c.
37 26.2.2011 1,20,000/- - Ex.D-6
38 29.3.2011 1,33,500/- - -
39 12.8.2011 5,00,000/- - -

1 To 39 Total 1,63,79,355/- - -

38. However on going through the table of calculation and
oral and documentary evidence on record, it appears that the
accused calculated several payments twice and included payment
of Rs.60,000/- paid by the complainant to the accused as per
58 CC.15503/2017( J)

Exp.23(a) in his table and therefore the same have to be deducted
from the above table and after deduction of amounts, the table of
payments would be as under-

Sl No. Date Amount Cheque Exhibits
No.
1 4.5.2010 79,500/- - -
2 3.3.2010 10,00,000/- - Ex.D1
20.4.2010 6,50,000/-
3 18.4.2010 9,00,000 - Ex.D2
4 4.10.2011 9,50,000/- - ExD.3

5 12.8.2011 12,50,000/- - Ex.D4

6 27.4.2011 1,33,500/- 842665 -
7 7.3.2012 20,000/- 720082 -/-
8 16.3.2012 52,605/- 720086 -/-
9 10.4.2012 1,00,000/- 720087 -/-
10 21.4.2012 18,000/- 915571 -/-
11 4.5.2012 1,33,500/- 720726 -/-
12 10.5.2012 1,07,000/- 720734 -/-
13 28.5.2012 1,07,000/- 720737 -/-
14 2.6.2012 1,33,500/- 720740` -/-
15 7.6.2012 1,07,000/- - -/-
16 4.7.2012 1,33,500/- 720753 -/-
17 7.7.2012 37,750/- 720738 -
18 30.8.2012 21,30,000/- 165259 Ex.D7
19 11.3.2012 2,15,000/- 169260 Ex.D7
20 11.2.2012 19,00,000/- 100628 Ex.D-6(a)
21 13.2.2012 7,00,000/- 669629 Ex.D6(b)
22 3.5.2012 1,20,000/- 720726 Ex.D6
23 12.2.2011 5,00,000/- - Ex.D6
59 CC.15503/2017( J)

24 2.2.2011 1,33,500/- - Ex.D6
25 26.2.2011 1,33,500/- - Ex.D6
26 29.3.2011 1,33,500/- 842662 Ex.D6
27 28.6.2011 1,33,500/- 842671 Ex.D6
28 1.6.2012 1,33,500/- 720740 Ex.D6
29 16.7.2012 15,20,000/- 169253 CBI A/c.
30 26.2.2011 1,20,000/- - Ex.D-6
31 29.3.2011 1,33,500/- - -

1 To 33 Total 1,39,18,855/- - -

39. The counsel for the accused relied on the judgment of
Hon'ble Supreme Court of India in the case of Dasharathbhai
Trikambhai Patel Vs. Hitesh Mahendrabhai Pate and Anr. In
Crl.A.No.1497 of 2022 dated 11.10.2022 reported in 2022
LiveLaw (SC) 830 wherein it was held as under;

When a part-payment of the debt is made after the
cheque was drawn but before the cheque is encashed, such
payment must be endorsed on the cheque under section 56
of the Act. The cheque cannot be presented for encashment
without recording the part payment. If the unendorsed
cheque is dishonoured on presentation, the offence under
section 138 would not be attracted since the cheque does
not represent a legally enforceable debt at the time of
encashment.
60 CC.15503/2017( J)

For the commission of an offence under section 138,
the cheque that is dishonoured must represent a legally
enforceable debt on the date of maturity or presentation. If
the drawer of the cheque pays a part or whole of the sum
between the period when the cheque drawn and when it is
encashed upon maturity, then the legally enforceable debt
on the date of maturity would not be the sum represented
on the cheque. When a part or whole of the sum
represented on the cheque is paid by the drawer of the
cheque, it must be endorsed on the cheque as prescribed in
Section 56 of the Act. The cheque endorsed with the
payment made may be used to negotiate the balance, if any.
If the cheque that is endorsed is dishonoured when it is
sought to be encashed upon maturity, then the offence
under section 138 will stand attracted.

As per the above judgment the part or whole payment must
have been made during the period between the drawing of the
cheque and the presentation of the cheque for encashment. If any
such payment is made, it should be endorsed on the cheque. If
endorsement is not made and the cheque is presented for
encashment, then the offence U/s.138 of NI Act is not attracted as
there is no legally enforceable debt as on date of presentation of
cheque for encasement. However the facts of the present case are
different. In the case on hand the cheques in question are alleged
to have been issued in the year 2017. There is no part payment
61 CC.15503/2017( J)

made from the alleged date of drawing of the cheques and their
presentment for encashment. Admittedly the payments have been
made much prior to the drawing of the cheques. Though the case
relied upon by the counsel for the accused is not applicable to the
facts of the case, the aspect of existence of legally enforceable
debt as on the date of drawing of the cheques and their
presentation for encashment has to be considered.

40. As per the ExP.21 and 23, the amount paid by the
complainant to the accused No.1 firm is Rs.46,45,000/-. As per
ExP.25, the loan amount transferred to accused No.1 firm is
Rs.64,00,000/-. The complainant also relied on Ex.P29 to 31 to
show that he paid the car loan amount of Rs.7,65,000- of the
accused No.2 is paid by him. However as per the records, though
the car loan of Rs.7,65,000/- was taken on 04.02.2008 by the
accused No.2, there is no record that the complainant repaid the
same. The records show that complainant was guarantor for car
loan of accused No.2; it was closed on 28.12.2011; the
complainant was relieved from the personal guarantee of the said
loan and at the time of closure of car loan, the balance amount
was Rs.3,53,858/- only. ExP.29 to 31 do not disclose that the said
loan amount was paid by the complainant. As per ExP.38 and 39,
the amount acknowledged to have been received by the accused
No.1 firm from the complainant is Rs.36,16,000/-. Admittedly the
complainant received Rs.12,50,000/- from the accused No.1 firm as
per ExD.4. It is specifically mentioned in ExD.4 that out of
62 CC.15503/2017( J)

Rs.12,50,000/-, Rs.5,00,000/- was paid through RTGS on
12.08.2011 and remaining amounts have been paid by way of cash
on different dates. It is also specifically mentioned in ExD.4 that
the said amount is refund of advance amount of Flat No.C-2 in
Moksha Elite Apartment. Such being the case, it is hard to believe
that the complainant paid Rs.36,16,000/- as per ExP.38 and 39
towards further payment in respect of Flat No.C-2 in Moksha Elite
Apartment. It is clear from the admitted documents i.e. sale deeds
dated 10.02.2011 at ExD.5 and ExD.11 that the complainant and
his mother purchased two more apartments in Moksha Elite project
from accused No.1 firm represented by its partners. The
complainant also purchased another apartment Flat No.B-3 in
Shreya Residency from Moksha Builders, which is another firm
belonging to accused No.2, as per sale deed dated 30.10.2009 at
ExD.8 and sold the same to one Prakash Rao Babu Rao Gayakwad
as per sale deed dated 30.08.2012 at ExD.9. The sale agreement
and the construction agreement dated 17.12.2008 at ExP.36 and 37
show that the complainant got executed sale agreement and
construction agreement in respect of another apartment Flat No.A-
1 in Shreya Residency from Moksha Builders. Considering all the
trnsactions it is clear that the complainant has to pay the amounts
to the accused No.1 firm and another firm of the accused i.e.
Moksha Builders in respect of the properties purchased. The
accused No.1 and Moksha Builders are not liable to pay any
amounts under the aforesaid documents to the complainant. It is
therefore inferred that the amounts paid by the complainant as per
ExP.38 and 39 might be in respect of other transactions but not in
63 CC.15503/2017( J)

respect of Flat No.C-2 Moksha Elite Apartment. Therefore the total
amount paid by the complainant to the accused No.1 firm in
respect of flat No.C-2 in Moksha Elite Apartment is
Rs.1,10,45,000/- only.

41. On the other hand, as per ExD.1, the accused No.1
firm paid Rs.16,50,000/- to the complainant on 03.03.2010. As per
ExD.2, the accused No.1 firm paid Rs.9,00,000/- as loan to the
complainant on 18.04.2010. As per ExD.3, the accused No.1 firm
paid Rs.9,50,000/- to the complainant on 04.10.2010. As per
ExD.4, the accused No.1 firm paid Rs.12,50,000/- as refund of
advance amount in respect of flat No.C-2 in Moksha Elite
Apartment to the complainant as on 12.08.2011. The sale
agreement and construction agreement in respect of Flat No.C-2 in
Moksha Elite Apartment are executed by the accused No.1 firm in
favour of the complainant on 19.04.2010. Therefore the amount
under ExD.1 could not be considered as the payment of amount in
respect of refund of Flat No.C-2 Moksha Elite Apartment. Similarly
the amount under ExD.2 being the loan given to the complainant,
it could not be considered as the payment of amount in respect of
refund of Flat No.C-2 Moksha Elite Apartment. On going through
the entire records, it is clear that there is nothing on record to
show that the accused No.1 firm is liable to pay to the
complainant any other amount for any other transaction. The
complainant though stated that there are several transactions and
accused No.1 firm was liable to pay in respect of those
64 CC.15503/2017( J)

transactions and accordingly paid the admitted amounts, he failed
to substantiate the same by adducing cogent evidence. Therefore
the rest of the amount except the amount under ExD.1 and 2 is
inferred to be paid in respect of the Flat No.C-2 in Moksha Elite
Apartment and the said total amount is Rs.1,13,68,855/-. Therefore
it is clear that there is no legally enforceable debt as alleged in
the complaint.

42. It is pertinent to note that PW.1 produced the account
statement from 01.04.2010 to 01.05.2010. During the further cross
examination of PW.1, he stated that he did not remember other
transactions in that account after the said period and he also
stated that he could not produce the account statement. The
counsel for the accused relied on the judgment of Hon'ble High
Court of Karnataka in the case of M/s National Agricultural Co-
op Marketing Federation of India v/s M/s Disha Impex (Pvt)
Ltd in criminal appeal No.1072 of 2013 dated 06.01.2021
wherein it was held as under:

There must be a proof with regard to ascertaining the
liability of the accused. In the absence of said statement of
account before the Court, the Court cannot come to the
conclusion that the cheques are issued towards the debt or
liability. It is also important to note that PW.2 categorically
admits that Ex.P10 was only a Proforma Sale Invoice raised.
When such being the case, in the absence of relevant
documents before the Court, the court cannot come to a
65 CC.15503/2017( J)

conclusion that the said cheques are issued in discharge of
liability. No doubt, it is settled principle that once the
cheque is admitted and not denied the signature; the Court
has to draw the presumption.

I have already pointed out that the said presumption
is also a rebuttable presumption. In the case on hand, the
accused had rebutted the case of the complainant and even
after rebutting the evidence of the complainant, even
though, the burden shifts on him but further fails to prove
the case of the complainant. The complainant did not choose
to place the material before the Court either in invoices or
the statement of accounts. When such being the case, the
accused are rebutted the case of the complainant".

Therefore inference can be drawn that if the further bank
statement is produced it would go against the complainant. It
shows the conduct of the complainant and that he is hiding
several repayments which may be favourable to the accused. This
creates doubt on the case of the complainant.

43. It is also pertinent to note that the complainant is
claiming the outstanding housing loan amount as per the notice
issued by the bank at ExP.3 i.e. Rs.98,98,829/-. PW.1 deposed that
as per Ex.P3, he has received the notice from SBI to pay
Rs.98,98,829.44/- as on 28.08.2017 but the notice was sent on
22.08.2017 i.e., 6 days prior to calculation of the due amount and
66 CC.15503/2017( J)

the bank officials have sent the notice calculating the amount due
for the future days as per Ex.P3. It is pertinent to note that the
complainant has not produced the entire loan account statement of
the housing loan. He produced only the notice issued by the bank
as per Ex.P3. However there is discrepency in the Ex.P3 and it
would have clarified the discrepancy with the complainant would
have produced the loan account statement. This creates doubt on
the case of the complainant. Apart from that PW.1 himself
admitted in the cross examination that the said flat was auctioned
by the bank, which means that the Bank has sold the property
and sale amount was adjusted to the loan amount. No documents
in respect of the same are produced. Moreover as per the bank
statement at Ex.P24, the complainant regularly paid the EMIs of
home loan till 16.06.2013 and the outstanding balance then was
Rs.58,77,694/-. It is alleged in the complaint that as the accused
failed to complete the project in time and when he asked the
accused to refund the due amount after receiving the notice at
ExP.3, the accused admitting the liability issued the cheque as per
ExP.4 for the outstanding housing loan amount as shown in ExP.3.
It is pertinent to note that when the complainant himself taken
back the advance amount of Rs.12,50,000/- in respect of Flat
No.C-2 in Moksha Elite Apartment as per ExD.4 on 12.08.2011,
there would be no reason for him to wait for the completion of
the construction of Flat No.C-2 in Moksha Apartment till 2017.
The entire payments as admitted by the complainant are made to
him from 02.02.2011 to 30.08.2012. Such being the case, the
complainant would have made payments to the home loan. He
67 CC.15503/2017( J)

kept quiet and the Housing Loan liability increased from
Rs.58,77,694/- as on 16.06.2013 to Rs.98,98,829/- as on
22.02.2017. PW.1 also failed to explain as to why he kept quiet
for more than 3 years without whispering a word while the
liability goes on increasing day by day. The complainant did not
send notice to the complainant during that period. He did not
mention anything about asking him orally during that period. He
did not take any steps to recover the money if all it was due as
alleged in the complaint. Therefore the conduct of the complainant
is against the prudence of an ordinary man. Therefore considering
the amounts paid and received by the complainant during the
period from 2010 to 2013, it is clear that there is no legally
enforceable debt as alleged in the complaint and to the extent of
the amount of cheques.

44. PW.1 produced photographs to show that the
construction of Flat No.C2 in Moksha Elite Apartment is
incomplete. However he stated in his cross examination that there
is no board of accused No.1 firm in the photographs and has
further deposed that there is no address of the flat. On perusal of
photographs at Ex.P25 (a) to (v), it is clear that the building
shown in the photographs is incomplete. The accused did not
specifically deny that it is not the Moksha Elite Apartment and the
photographs are of some other building. However PW1 admitted
the sale deed dated 10.02.2012 at Ex.D5, which show that the
complainant purchased Flat No.D1 in third floor of Moksha Elite
68 CC.15503/2017( J)

Apartment. Even though he stated that the said flat is incomplete,
it is pertinent to note that the complainant took the vacant
possession of the said property as per the recitals of the sale deed
at Ex.D5. PW1 admitted the sale deed dated 10.02.2012 at Ex.D11,
which show that the mother of the complainant by name Shaheen
Taj purchased Flat No.A2 in ground floor of Moksha Elite
Apartment. Even though he stated that the said flat is incomplete,
it is pertinent to note that the mother of the complainant took the
vacant possession of the said property as per the recitals of the
sale deed at Ex.D11. On perusal of the records, it is clear that the
Flats purchased by complainant and his mother are in the same
Moksha Elite Apartment, wherein the subject matter property was
also agreed to be purchased and the sale deed in respect of Flat
No.C2 Moksha Elite Apartment was not executed as the
complainant took back the advance amount as per Ex.D4 and also
received lakhs of rupees as the refund of amount of Flat No.C2 in
Moksha Elite Apartment, which have been admitted as per the
bank statements at Ex.D6 and 7 and the bank statements produced
by the complainant himself. Therefore the case of the complainant
is doubtful.

45. The complainant admitted that the transaction is
between him and accused No.1 firm and the cheques issued by the
accused No.2 are the cheques pertaining to his personal account.
The complainant has not filed the case against the drawer of the
cheque i.e. accused No.2. He has not issued notice to the accused
69 CC.15503/2017( J)

No.2 personally. The complainant also admitted the credit of lakhs
of rupees amount to his accounts from the account of the accused
No.1, by cash, though cheques and other accounts. The accused
No.1 to 3 have been able rebut the presumptions by adducing
cogent evidence as per ExD.1 to 11 and also by relying on the
evidence of the complainant. Therefore the said aspects prove the
defence of accused by preponderance of probabilities. They have
also proved that there is no legally enforceable debt and the
cheques were not issued in the manner and under the
circumstances as alleged in the complaint. Therefore reasons are
sufficient to hold that the complainant failed to prove the liability
of the accused No.1 to the tune of amounts of the cheques in
question. It is well settled that the accused needs to prove his
defence by preponderance of probabilities. It is sufficient if the
doubt is created on the alleged transaction. The accused have
created the doubt on the alleged transaction and issuance of
cheques in favour of complainant as alleged in the complaint.
Therefore this Court is of the opinion that the accused proved his
defence by pointing out the infirmities in the case of the
complainant. The evidence on record shows that the complainant
failed to prove the ingredients of Section 138 of N.I Act and
therefore the presumptions are not available in favour of the
complainant. Therefore there is no question of rebutting the
presumption by the accused. Accordingly, the accused No.1 to 3
have been found not guilty for the offence punishable U/s.138 of
the N.I.Act. Hence, the Point No.1 is answered in the Negative
and Point No.2 is does not survive for consideration.
70 CC.15503/2017( J)

46. Point No.3 : In view of the reasons assigned on Point
No.1 and 2, I proceed to pass the following:-

ORDER

As per the provisions of Sec.255(1) Cr.P.C. the accused No.1 partnership firm is held not guilty for the offence punishable u/s.138 of NI Act, 1881 and accused No.2 and 3 being the partners of accused No.1 partnership firm are hereby acquitted of the offence punishable u/s.138 of NI Act, 1881.

The Personal Bonds executed by the accused No.2 and 3 are hereby stand cancelled and the cash surety of Rs.25,000/- each deposited by the accused No.2 and 3 shall be refunded to them after appeal period is over.

(Dictated to the Stenographer, transcript thereof is computerized and printout taken by her, is verified and then pronounced by me in Open Court on this the 10th day of February-2023.) (Lokesh Dhanapal Havale), XV Addl. CMM., Bangalore.

71 CC.15503/2017( J) ANNEXURE Witnesses examined for the Complainant:-

PW.1 : Sri. Sayed Haseeb S.G Documents marked for the Complainant:-

Ex.P1 : Registration certificate of accused No.1 issued by the registrar of firms.

     Ex.P2            : Receipt dated 5.11.2010
     Ex.P3            : Letter dated 22.02.2017 issued by
                        State Bank of India
     Ex.P4 to 6       : 3 cheques

Ex.P4(a)to6(a) : Signatures of the accused No.2 Ex.P7 to 9 : Bank Memos Ex.P10 : Office copy of the legal notice dtd 7.3.2017 Ex.P11 to 15 : Postal receipts Ex.P16 & 17 : Postal acknowledgments Ex.P18 to 20 : Postal envelopes Ex.P21 : Bank Account extract Ex.P22 : Income tax returns for the year 2011-12 Ex.P23 : Corporation bank account extract Ex.P24 : Statement of account Ex.P25 : 22 photographs Ex.P26 : CD Ex.P27 : The Times of India News paper

72 CC.15503/2017( J) Ex.P28 : The receipt Ex.P28(a) : Cover Ex.P29 to 30 : Documents issued by Canara bank Ex.P31 : Bank statement Ex.P32 : NOC issued by first accused Ex.P32(a) : Signature of the 2nd accused Ex.P33 : Bank pass book Ex.P33(a) : Relevant portion dated 30.03.2009 Ex.P34 : Letter issued by accused No.1 to the bank Ex.P34(a) : Signature of the first accused Ex.P35 : SBI Statement of account Ex.P36 : Original Sale deed Ex.P37 : Original building sale deed Ex.P38 & 39 : 2 receipts Ex.P38(a)39(a) : Signatures of accused Ex.P40 : Letter issued by Muthoot finance Witnesses examined For Defence:-

Nil.

Documents marked for Defence:-

     Ex.D1 to 4          : 4 receipts
     Ex.D5               : C/c of Sale deed dated 10.02.2011
     Ex.D6               : C/c of SBI Bank statement
     Ex.D7               : C/c of C. B. I. Bank statement
                  73                 CC.15503/2017( J)




Ex.D8    : C/c of sale deed dated 30.10.2009
Ex.D9    : C/c of sale deed dated 30.08.2012

Ex.D10 : Agreement of mortgage Ex.D11 : C/c of absolute sale deed dtd 10.02.2011 (Lokesh Dhanapal Havale), XV Addl.CMM., Bengaluru.

74 CC.15503/2017( J) 10.02.2023 (Judgment Pronounced in the Open Court Vide Separate Order sheet) ORDER As per the provisions of Sec.255(1) Cr.P.C. the accused No.1 partnership firm is held not guilty for the offence punishable u/s.138 of NI Act, 1881 and accused No.2 and 3 being the partners of accused No.1 partnership firm are hereby acquitted of the offence punishable u/s.138 of NI Act, 1881.

XV Addl.CMM., Bengaluru.

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Has Paid The Following Sum Of Monies ... vs No.1 Represented By Accused No.2 And on 10 February, 2023