Bangalore District Court
Sri. Subramani.N vs Sri. Devaraju.M on 4 February, 2020
1 C.C.No.14631/2017 J
THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
i. Dated:- This the 4th day of February, 2020
Present: Sri.S.B.HANDRAL, B.Sc., L.L.B(SPL).,
XVI Addl.C.M.M., Bengaluru City.
JUDGMENT U/S 355 OF Cr.P.C.,
Case No. : C.C.No.14631/2017
Complainant : Sri. Subramani.N,
S/o. Late Nachimuttu,
Aged about 56 years,
R/at No.8, Vyasya Bank Colony,
Bengaluru -560 078.
Rep. by Sri K.Shridhara &
Associates., Adv.,)
- Vs -
Accused : Sri. Devaraju.M,
S/o. Late Goranty Muniswami
Naidu,
# 14, 7th Cross,
Kothnur Main Road,
J.P.Nagar 8th Phase,
Bengaluru -560 078.
(Rep. by Sri. G.Manivannan and
others., Adv.,)
Case instituted : 5.5.2017
Offence complained : U/s 138 of N.I Act
of
2 C.C.No.14631/2017 J
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 4.2.2020
JUDGMENT
The Complainant has filed this complaint against the Accused for the offence punishable u/Sec.138 of the Negotiable Instruments Act.
2. Briefly stated the case of the Complainant is that, he and Accused are known to each other and the Accused is doing building contractor along with Engineers since past several years, because of his relationship, the Accused approached him on 15th June 2014 and requested for the hand loan of Rs.10 Lakhs to meet his urgent financial commitments and to improve his business and promised to pay the same within one year, accordingly he accommodated hand loan of Rs.10 Lakhs to the Accused on 20th June 2014 by way of cash in his house in front of the witnesses and the Accused promised to repay the said amount within one year with nominal interest, after the lapse of one year he approached and requested return the said amount but the Accused 3 C.C.No.14631/2017 J has requested him to give some time to mobilize the said amount but the Accused had dragged time by giving one and other reasons, finally on 15.11.2016 when he demanded to repay the amount and at that time negotiations has been held between him and the Accused, the Accused agreed to pay Rs.1 lakh on the principal amount and issued cheque bearing No. 000020 dated: 12.3.2017 for sum of Rs.11 Lakhs drawn on HDFC bank, K.R.Road, Banashankari II Stage branch, Bengaluru and assured that, cheque will be honoured on its presentation, thereafter he has presented the said cheque on 13.3.2017 through his banker i.e. Vijaya Bank, Banashankari branch, Bengaluru but the said cheque returned with an endorsement of "Payment Stopped by Drawer"
dated: 14.3.2017, thereafter he approached the Accused and requested to make the payment of dishonoured cheque but the Accused gave evasive answer, hence he has issued legal notice dated:
7.4.2017 to the Accused and the said notice was returned with shara as "Insufficient address, not known, returned to sender" dated: 8.4.2017, though the Accused is very much residing in the said address since 8 years but with an intention to avoid 4 C.C.No.14631/2017 J the service of notice the Accused colluded with the postal authority and managed to return the notice with shara as stated above and deliberately issued the cheque and thereafter stop payment has been made to the bank without having sufficient amount in his account issued the cheque to the complainant.
Hence the complainant has filed this present complainant against the Accused for the offence punishable U/s.138 of Negotiable Instruments Act.
3. Before issuing process against the accused, the Complainant has filed his affidavit-in-lieu of his sworn statement, in which, he has reiterated the averments of the complaint. In support of his sworn statement, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.15 i.e, Original Cheque dated:-12.3.2017 as per Ex.C.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C.2, the office copy of the Legal Notice as per Ex.C.3, the Postal Receipt as per Ex.C.4, returned legal notice as per Ex.C.5, RPAD cover as per Ex.C.6, postal receipt as per Ex.C.7, postal acknowledgement as per Ex.C.8, subsequently has 5 C.C.No.14631/2017 J produced certified copy of the registered sale deed dated: 30.12.2013 as per Ex.C.9, six original pass books pertaining to the complainant marked as per Ex.C.10 to C.15 respectively.
4. Prima-facie case has been made out against the accused and summons was issued against the accused in turn he has appeared before the court and got enlarged on bail and the substance of the accusation has been read over to him, to which he pleaded not guilty and claims to be tried.
5. In view of the principles of law laid down and as per the directions of the Hon'ble Apex Court in the decision of the Indian Bank Association Vs., Union of India, reported in 2014 (5) SCC 590, after recording the plea of the accused, as he intended to set out his defence, the learned counsel for the Accused cross examined the complainant and complainant side was closed.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence 6 C.C.No.14631/2017 J appearing against him and has chosen to lead his rebuttal evidence but subsequently he did not led his rebuttal evidence and he has produced Certified copies of the cheques on his behalf and marked as per Ex.D.1 and D.2 respectively.
7. Heard and perused the written arguments submitted by both learned counsels for the complainant and the Accused and perused the decisions submitted by the learned counsel for the complainant and Accused and materials on record.
8. On the basis of complaint, evidence of complainant and documents and having heard the arguments of both learned counsels for the complainant and the accused, the following points that are arise for consideration are:-
1. Whether the complainant proves that the accused has issued cheque for 000020 dated: 12.3.2017 for sum of Rs.11 Lakhs drawn on HDFC bank, K.R.Road, Banashankari II Stage branch, Bengaluru to discharge legally recoverable debt to the complainant and when the complainant has presented a cheque for encashment through his banker but the said cheques have been 7 C.C.No.14631/2017 J dishonoured for the reasons "payment stopped by drawer" on 14.3.2017 and the complainant issued legal notice to the accused on 7.4.2017 and inspite of it the accused has not paid the cheque amount within prescribed period there by the accused has committed an offence U/s.138 of the Negotiable instruments Act?
2. What Order?
9. The above points are answered as under:
Point No.1: In the Affirmative Point No.2:As per final order for the following:
REASONS
10. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present case, it is relevant to mention that under criminal jurisprudence prosecution is required to establish guilt of the Accused beyond all reasonable doubts however, a proceedings U/s.138 of N.I.Act is quasi criminal in nature. In these proceedings proof beyond all reasonable doubt is subject to presumptions as envisaged U/s.118, 139 and 136 of N.I.Act. An essential ingredient of Sec. 138 of N.I.Act is that, whether a person issues cheque to be 8 C.C.No.14631/2017 J encashed and the cheque so issued is towards payment of debt or liability and if it is returned as unpaid for want of funds, then the person issuing such cheque shall be deemed to have been committed an offence. The offence U/s.138 of N.I. Act pre-supposes three conditions for prosecution of an offence which are as under:
1. Cheque shall be presented for payment within specified time i.e., from the date of issue or before expiry of its validity.
2. The holder shall issue a notice demanding payment in writing to the drawer within one month from the date of receipt of information of the bounced cheque and
3. The drawer inspite of demand notice fails to make payment within 15 days from the date of receipt of such notice.
If the above said three conditions are satisfied by holder in due course gets cause action to launch prosecution against the drawer of the bounced cheque and as per Sec.142(b) of the N.I. Act, the complaint has to be filed within one month from the date on which cause of action arise to file complaint.
9 C.C.No.14631/2017 J11. It is also one of the essential ingredients of Sec. 138 of N.I.Act that, a cheque in question must have been issued towards legally recoverable debt or liability. Sec. 118 and 139 of N.I.Act envisages certain presumptions i.e., U/s.118 a presumption shall be raised regarding 'consideration' 'date' 'transfer' 'endorsement' and holder in course of Negotiable Instrument. Even Sec.139 of the Act are rebuttable presumptions shall be raised that, the cheque in question was issued regarding discharge of a legally recoverable or enforceable debt and these presumptions are mandatory presumptions that are required to be raised in cases of negotiable instrument, but the said presumptions are not conclusive and rebuttable one, this proportion of law has been laid down by the Hon'ble Apex Court of India and Hon'ble High Court of Karnataka in catena of decisions.
12. In the present case the complainant got examined as PW.1 by filing his affidavit evidence wherein he has reiterated the entire averments of the complaint and in his evidence testified that, the Accused approached him on 15th June 2014 and 10 C.C.No.14631/2017 J requested hand loan of Rs.10 Lakhs , accordingly on 20th June 2014 he has lent an amount of Rs.10 Lakhs to the Accused as a hand loan by way of cash in his house and Accused promised to repay the said amount within one year with nominal interest but after lapse of one year Accused did not returned the loan amount, thereafter he approached the Accused and requested to repay the amount finally on 15.11.2016 negotiations has been held between him and the Accused and Accused agreed to pay Rs.1 Lakh on principal amount and also issued cheque in dispute i.e., Ex.C.1 dated: 12.3.2017 for sum of Rs.11 Lakhs and assured that, the cheque will be honoured on its presentation, thereafter on 13.3.2017 he has presented the cheque through his banker but the said cheque was returned with an endorsement of "Payment stopped by Drawer"
dated: 14.3.2017, immediately he approached the Accused and requested to make payment of the cheque amount but the Accused gave evasive answer. The complainant/PW.1 further testified that, he got issued legal notice dated: 7.4.2017 to the Accused but same was returned with a shara of "Insufficient address, not known, returned to sender"11 C.C.No.14631/2017 J
dated: 8.4.2017, though the Accused is very much residing in the said address since 8 years, but the Accused with an intention to avoid the service of notice and colluded with the postal authorities and managed to return the notice and also issued the cheque in question deliberately and thereafter stop payment has been made to the bank, it shows that, the Accused without having sufficient amount in his account issued the cheque in question.
13. In support of her oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.C.1 to C.15 i.e., Original Cheque dated:-12.3.2017 as per Ex.C.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.C.1(a), the Bank Memo as per Ex.C.2, the office copy of the Legal Notice as per Ex.C.3, the Postal Receipt as per Ex.C.4, returned notice as per Ex.C.5, RPAD cover as per Ex.C.6, postal receipt as per Ex.C.7, postal acknowledgement as per Ex.C.8, subsequently has produced certified copy of the registered sale deed dated: 30.12.2013 as per Ex.C.9, six original pass books pertaining to the complainant marked as per Ex.C.10 to C.15 respectively.
12 C.C.No.14631/2017 J14. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance. It is also not in dispute by the accused that, the cheque in question presented for encashment and dishonoured for the reason of "payment stopped by drawer " since as matter on record, proved by return memo i.e. C.2 issued by the concerned bank dated: 14.3.2017, therefore it is a matter on record and has been proved that, the cheque in question was presented within its validity period and dishonoured as per the bank endorsement issued by the banker of accused. It is also not in dispute that, the cheque in question i.e. Ex.C.1 belongs to the account of the accused and has not denied his signature which is appearing at Ex.C.1(a).
15. In relation to the service of notice the Accused during the course of cross-examination of the complainant has denied the service of legal notice issued by the complainant to him. The complainant in order to prove service of notice upon the Accused, has produced the documents i.e copy of the legal notice, postal receipt, returned legal 13 C.C.No.14631/2017 J notice, RPAD cover along with postal receipt, postal acknowledgement which are at Ex.C.3 to C.8. On perusal of the Ex.C.6 i.e. the RPAD returned cover with an endorsement of "Insufficient address, not known, returned to sender" dated: 8.4.2017". Hence, it goes to show that, the legal notice caused by the complainant through RPAD returned with postal endorsement of ""Insufficient address, not known, returned to sender" dated: 8.4.2017". The Accused during the course of cross-examination of complainant has not disputed the address mentioned by the complainant on RPAD cover, postal receipt and acknowledgement, is not of his correct address or he was/is not residing in the said address as on the date of issuance of the legal notice i.e. Ex.C.3 by the complainant. The Accused has also not produced any documents on his behalf to disprove the address mentioned by the complainant in the legal notice, RPAD cover, postal receipt and acknowledgement to show that, the said address is not of his correct address or he was not residing in the said address as on the date of issuance of notice or return of notice. Therefore in view of the said reasons it can be held that, the 14 C.C.No.14631/2017 J Accused has admitted his address mentioned by the complainant in the legal notice as well as RPAD cover, postal receipt and acknowledgement as that of his correct address. Even it is not the defence of the Accused that, the postal endorsement found on Ex.C.6 are not issued by the concerned postal authorities or have been created by the complainant and the Accused has not examined concerned postal authorities to disprove the endorsement found on Ex.C.6 RPAD cover. Therefore in view of non disputing of the address of the Accused in the legal notice as well as on the RPAD cover makes it clear that, the Accused has admitted that, the legal notice caused by the complainant was issued to his correct address through registered post, in such circumstances, it can be held that, the notice sent by the complainant to the correct address of the Accused is presumed to have been served on him U/s. 27 of General Clauses Act. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka reported in 2011 ACD 1572 (KAR) in the case of Jayamma Vs. Lingamma, wherein the Hon'ble High Court held that, "Notice sent at correct address returned unclaimed - is 15 C.C.No.14631/2017 J deemed to be served. In another decision reported in 1998 KAR 1841 in the case of Shridhar M.A. Vs. Metalloy Steel Corporation and 1999 Cri.L.J. 4606 "K. Bhaskaran Vs. Vaidhanbalan wherein the Hon'ble Apex Court was concerned with the question as to when the service of notice could be inferred and it was held that if there is an endorsement like 'not available in the house' 'house locked' 'shop closed' 'unclaimed' the service should be deemed to have been effected. It is also relevant here to refer the decision reported in 2008(4) Civil code cases 027 (SC) "M/s. Indo Automobiles Vs., M/s. Jai Durga Enterprises and others." wherein the Hon'ble Apex Court held that, notice sent by registered post with acknowledgement to a correct address-service of notice has to be presumed. Therefore in view of the principles of law in the above decisions, it can be safely held that, the service of notice on accused in this case is presumed to have been served on him since in this case also the complainant has issued notice to the accused to his correct address through registered post and the said notice was returned with an endorsement of ""Insufficient address, not known, returned to 16 C.C.No.14631/2017 J sender" dated: 8.4.2017", hence, the notice issued by the complainant through registered post is held to be proper service.
16. It is true that, the complainant in his cross- examination has denied the suggestion made to him that, the Accused has not residing in the address mentioned in the notice and sent the notice to the Accused and the complainant has stated that, the Accused is residing in site No.15, but in the address the site number has been wrongly shown as 14 instead of 15 and the said mistake is came to his knowledge at this stage only. Hence, it goes to show that, the complainant has admitted that, the site number is wrongly mentioned as 14 instead of 15 and the said mistake is also came to his knowledge only at the time of his cross-examination, therefore it can not be held that the correct site number of the Accused i.e site No.15 was within the knowledge of the complainant at the time of issuance of legal notice to the Accused, if the complainant was having knowledge of correct site number of the Accused at the time of issuance of legal notice , the same would have been mentioned in the notice 17 C.C.No.14631/2017 J instead of mentioning site No.14, in such circumstances, on the basis of said admission of the complainant cannot be held that, the legal notice caused by him was not to the correct address of the Accused. In this regard, it is relevant here to refer the decision of Hon'ble High Court of Karnataka decided in Crl. Revision Petition No. 219/2019 dated: 12.11.2019 in the case of Smt. Prabhavathi K.R and another Vs. Sri. Lokesh wherein the Hon'ble High Court held that:
"The Accused specifically contended that, the house number is 2317 but in the notice house number has been mentioned as 2371. But the other contents have not been denied by the Accused. I am conscious of the fact that, in Bengaluru if a single digit is changed, under such circumstances, there will be long gap and it is very difficult for any postman to identify the house and deliver the said registered document to the addressee but when the complainant made out a case that, as 18 C.C.No.14631/2017 J per Ex.P.6 the notice has been duly served then under such circumstances the duty cast upon the Accused to rebut the presumption by establishing either by calling the postman or the other competent personalities who were in the post office as to whom and what place the said article has been delivered."
Hence in the present case also the complainant though he has admitted that, at the time of his cross examination he came to know that, the site number of the Accused has been wrongly mentioned as 14 instead of 15, only on that ground, it cannot be held that, the notice which has been sent by the complainant through RPAD to the Accused has not been served on him, on the contrary when the accused has denied the postal endorsement and return of documents to the complainant, under such circumstances the duty cast upon the Accused to rebut the presumption by establishing either by examining the postman or other competent authorities who were in the post office as to why and for what reason the article has been returned to the complainant as held by Hon'ble High Court of 19 C.C.No.14631/2017 J Karnataka in the above referred decision., therefore the defence of the Accused that, the legal notice caused by the complainant was not served upon the Accused cannot be acceptable one.
17. In addition to the above, it is relevant here to refer the decision reported in 2007 AIR SCW 3578 in the case of C.C.Alavi Haji Vs. Palapetty Muhammed and another., wherein the Hon'ble Apex court held that " the drawer of the cheque is permitted to deposit the cheque amount within 15 days from the date of his appearance before the court in pursuance of the service of summons on him and in such situation, his defence of non service of the legal notice cannot be available to him'. Hence, in view of the said principles of law, even for sake of discussion, though there is no cogent and reliable documentary proof to substantiate the claim of the complainant with regard to address of the Accused to show there is due service of the legal notice on the Accused, in view of settled position of law by virtue of the above said decision of Hon'ble Apex Court of India, the Accused is not entitled to the technical defence of 20 C.C.No.14631/2017 J the alleged non service of the legal notice. Therefore, the contentions taken by the learned counsel for the accused in the written argument that, the notice issued by the complainant was not served on the accused and the complainant has not complied the mandatory requirements of Sec.138(b) of N.I.Act and complaint is not maintainable cannot be acceptable one and with due respect to the principles of law laid down in the decision of Hon'ble High Court of Karnataka relied upon by counsel for defence is not applicable to defence of Accused as facts of the present case are not similar.
18. It is the specific defence of the Accused that, the complainant has no source of income to lend alleged loan amount to him and he has not borrowed alleged loan amount of Rs.10,00,000/= from the complainant and complainant has not produced any documents to show that, he had sufficient source of income to lend loan amount and has not produced documents to show that, the Accused has received the loan amount in question. The Accused has also taken defence that, he has not issued the cheque in question i.e Ex.C.1 to the 21 C.C.No.14631/2017 J complainant towards discharge of the alleged loan amount. It is also the defence of the Accused that, the complainant used to lend small amounts as a loans to him and he used to take blank cheques as a security and on repayment of the loan used to return the said cheques which were obtained as security and he has borrowed a sum of Rs.2 Lakhs during April 2014 and as a security the complainant has obtained two cheques and subsequently the complainant had collected two other cheques from the Accused as the earlier two cheques were misplaced and later cheques received were encashed by him and did not choose to return the earlier cheques which were obtained as security and out of the said cheques, complainant has misused the subject cheque in question and filed this false case against him, hence in this back ground the oral and documentary evidence of the complainant has to be examined and the Accused did not entered into witness box.
19. The complainant in his oral evidence has stated that, he has lent an amount of Rs.10 Lakhs to the Accused on 20th June 2014 by way of cash and 22 C.C.No.14631/2017 J at that time the Accused was agreed to repay the same within one year with nominal interest b the did not return the same inspite of request made by him after lapse of one year and finally on 15.1.2016 when he demanded to repay the amount, at that time negotiations held between him and the Accused and Accused has agreed to pay Rs.1 Lakh as an interest to the principal amount and issued the subject cheque in question i.e.Ex.p.1 towards discharge of principal amount and interest. The complainant in support of his oral evidence has produced Ex.C.1 cheque and certified copy of the register sale deed dated: 30.12.2013 which is at Ex.C.9 and six original bank pass books pertaining to his account which are at Ex.C.10 to C.15.
20. The learned counsel for the Accused cross- examined the complainant in length but nothing has been elicited to discredit or discard his evidence, instead of eliciting anything materials from the complainant the Accused rather concentrated his defence that, there was no financial transaction took place between him and the complainant and the complainant has not collected documents at the time 23 C.C.No.14631/2017 J of lending the loan amount in question. It is relevant here to mention that, the complainant in his cross-examination stated that, prior to three years he was having 30 lorries and along with was doing real estate broker and used to earn the money from the said business and in the year 2013 he was earning an amount of Rs.6 Lakhs per annum and his income was Rs.7 to 8 Lakhs in the year 2014-15. It is also relevant here to refer the suggestions made by the Accused at page No.2 of cross-examination that, the complainant along with the lorries and real estate broker business was also doing money lending business but the said suggestion was denied by the complainant, hence, the suggestion made by the Accused is sufficient to hold that, he has suggested that, the complainant is doing money lending business at one breath and another breath the Accused contended that, complainant is not having sufficient source of income, the two version of the Accused itself goes to show that, the Accused at one breath admitted that, the complainant is a financier and doing money lending business when the Accused admitted that, complainant is having money lending business, in such circumstances, at 24 C.C.No.14631/2017 J the same time, he cannot dispute the financial capacity of the complainant for lending of loan amount in question. It is also suggested by the Accused that, the complainant has mediated to purchase one site to the Accused and also two sites to the complainant's sister's son and the Accused has constructed a house on the said site and residing in the said house, this particular suggestion made by the Accused goes to show that, the Accused has admitted that, the complainant was doing real estate broker business as claimed by the complainant. It is true that the complainant/PW.1 in his cross-examination has admitted that, he has got his bank accounts in Canara Bank, Sarakki branch, and Vijaya Bank, Banashankari Branch, and ready to furnish the bank statements pertaining to the year 2013-14 and also admitted that, he has sold his site for sum of Rs.15 Lakhs and ready to produce the copy of the sale deed pertaining to the said site. Thereafter the complainant has produced certified copy of the sale deed dated: 30.12.2013 in respect of the site alienated by him for sum of Rs.15,55,000/= and original pass book pertaining to Canara Bank and also Vijaya Bank which are at 25 C.C.No.14631/2017 J Ex.C.10 to C.15 respectively. It is also true that, the complainant admitted that, out of the sale consideration amount received under Ex.P.9 has been paid to get release of the house properties of J.P.Nagar which were leased out and has paid an amount of Rs.21 Lakhs towards getting release of the leased out house properties. The learned counsel for the Accused in the written argument has argued that, as per the admissions of the complainant he has sold his site in the year 2013 for clearing of the lease of J.P.Nagar House properties for which itself he only got Rs.15,55,000/= out of the sale proceed when such being the fact, the complainant would not have left with no money with him and he could not have lend the loan amount on 20.6.2014, but the complainant has never admitted that, he has paid the amount for clearing of lease of his J.P.Nagar house properties in the year 2013 itself, on the contrary he has denied the suggestion made to him that, after clearing of the lease property out of the sale proceed he would not have left with no money with him and complainant has specifically stated that, he has retained an amount of Rs.10 Lakhs in his hand even after clearing of the lease properties 26 C.C.No.14631/2017 J and the site property was sold in the year 2013 and the amount lent to the Accused by the complainant is on 20.6.2014, hence it goes to show that, even for sake of discussion, if it is assumed that, the complainant has paid the amount which was received out of sale consideration under Ex.P.9 and cleared the lease amount in respect of J.P.nagar House properties but thereafter the complainant would have paid the loan amount to the Accused , in such circumstances the admissions which are elicited from the complainant in respect of the sale consideration amount received by the complainant under Ex.P.9 are not helpful for the Accused to disprove the financial capacity of the complainant as the complainant has specifically denied the suggestion made to him that, he did not have sufficient money even after the clearance of the lease property out of the sale proceeds received under Ex.P.9 he would not have left with no money and has not lend loan amount to the Accused. It is also true that, the complainant has admitted in his cross- examination that, as per his bank statement for the year 2014 there was no transaction more than Rs.25,000/=, but it is not the case of the 27 C.C.No.14631/2017 J complainant that, he has lent the loan amount in question by withdrawing the amount from his bank on the contrary the complainant has produced the bank pass books and copy of the sale deed at the instance of the Accused as the Accused has demanded to produce the bank pass book and site document during the course of his cross- examination. In addition to that, the Accused during the course of his cross-examination has admitted that complainant used to lend the loan amounts of Rs.1 Lakh and Rs.2 Lakhs, Rs.4 Lakhs and Rs.5 Lakhs to the Accused which is reflected at page No.4 of the cross-examination of the PW.1, and the Accused himself admitted that, when ever he received the loan amount from the complainant he used to give cheques to him towards security of the loan amount and after repayment of the said loan he used to receive the cheques from the complainant which were given as a security, in such circumstances, it can be held that, the Accused himself admitted the financial capacity of the complainant by admitting that, he used to borrow the loan amounts from the complainant and also repaying the said loan amounts to him, therefore the 28 C.C.No.14631/2017 J Accused cannot be permitted to deny the financial capacity of the Accused only on the basis of non production of the document, therefore from entire perusal of the cross-examination of the complainant/PW.1 nothing has been elicited to disbelieve the claim of the complainant or accept the defence of the Accused.
21. The learned counsel for the Accused in his written argument much specifically argued that, the complainant has failed to substantiate before the court that, the capacity to lent alleged loan of Rs.10 Lakhs to the Accused as though it is not in dispute that, complainant is a real estate broker and is an income tax assessee and admitted that, his income during the year 2013-14 to 2015-16 is Rs.2,50,000/= to Rs.5 Lakhs and he requires Rs.20,000/= p.m. for his expenses thus he would not have been left with the money to lend loan amount to the Accused and the pass books which were produced by the complainant for the relevant period the average balance reveals that, not more than Rs.10,000/= and has not produced the documents except the cheque in question to prove 29 C.C.No.14631/2017 J his financial capacity and in respect of Ex.P.9 sale deed the complainant admitted that, he was in need of money to clear the lease amount in respect of J.P.Nagar property and out of the sale consideration amount he has cleared the lease amount by paying Rs.21 Lakhs , therefore it was highly improbable to clear the lease in respect of J.P.Nagar and even otherwise lease were to be cleared it would be very difficult for the complainant to lend loan amount of Rs.10 Lakhs to the Accused, hence the complainant has miserably failed to prove his financial capacity to lend the alleged loan of Rs.10 Lakhs to the Accused on 20.6.2014. In support of his argument, has relied upon the decisions reported in 1) AIR 2019 SC 942 in the case of A.N.SS Rajashekar Vs. Augustus Jeba Ananta 2) AIR 2019 SC 1983 in the case of Basalingappa Vs. Mudibasappa; 3) (2015) 1 SCC 99 in the case of K.Subramani Vs. K.Damodara Naidu; 4) 2010 (2) KCCR 1950 in the case of Amzad Pasha Vs. H.N.Lakshman and the learned counsel for the defence argued that in view of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka, in the present case also the complainant has failed to 30 C.C.No.14631/2017 J prove the financial capacity by producing the documents and about the lending of loan amount to the Accused and to show that as on the date of lending of loan amount he was having sufficient source of income and exact date of alleged lending of loan amount advanced by the complainant and has not examined any witness to substantiate his claim, in such circumstances the Accused is liable to be acquittal.
22. It is important to note here that, on careful perusal of the entire oral and documentary evidence produced by the complainant i.e Ex.C.1 to C.8 and admitted facts by the Accused as it is already held in the above that, the complainant proved that the cheque in question belongs to the Accused i.e Ex.C.1 and signature found at Ex.C.1(a) is that of the signature of the Accused and also proved that, the cheque in question was presented within its validity period and it was dishonoured for the reason of "payment stopped by drawer" as per Ex.C.2 and thereafter the legal notice caused by him through RPAD to the Accused was served on him i.e., deemed served as it was returned with postal 31 C.C.No.14631/2017 J endorsement of "Insufficient Address, not claimed, returned to sender", and Accused has not given any reply to the legal notice, in such circumstances, it can be held that, the complainant has discharged his initial burden by complying the mandatory requirements as required U/s.138 of N.I. Act and initially the presumptions are available in favour of the complainant U/s.118a and 139 of the N.I. Act. Consequently it is for the Accused to rebut the said presumptions available in favour of the complainant to show that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt by producing cogent and convincible evidence but not mere suggestions or even by plausible explanation. In such circumstances, when the presumptions U/s.118 and 139 of N.I.Act are available to the complainant, even a presumption can be drawn to the extent of existence of legally recoverable debt or liability against the Accused unless and until the said presumptions are rebutted by the Accused, even in the absence of documents produced by the complainant with regard to loan transaction in question.
32 C.C.No.14631/2017 J23. It is true that, the complainant has admitted that, he has not collected any documents at the time of lending of loan amount to the Accused however, he has stated that, he has not collected the documents at the time of lending the loan amount since the Accused is of his good friend. It is also true that, the complainant has not produced documents except the cheque in question to show that, he has lent loan amount of Rs.10 Lakhs to the Accused but in view of the presumptions available to the complainant U/s.118a and 139 of the N.I. Act, it can be presumed that, there is an existence of legally recoverable debt against the Accused as the Accused has admitted that the cheque in question issued to the complainant and it bears his signature, therefore unless the Accused rebutted the presumptions available infavour of the complainant , it cannot be held that, there is no existence of legally recoverable debt against the Accused and even the issuance of cheque itself carries the consideration as held in catena of decisions by Hon'ble apex Court of India and High Court of Karnataka. In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi 33 C.C.No.14631/2017 J Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s.
Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that issuance of cheque itself was adequate proof of existence of debt or liability. In another decision of Hon'ble Apex Court of India i.e. Hon'ble Three Judges Bench Decision reported in (2010) 11 SCC 441 in the case of Rangappa Vs. Sri. Mohan ., wherein the Hon'ble Apex Court held that " A. Negotiable Instruments Act, 1881 - S.139 - Presumption under - scope of - Held, presumption mandated by S. 139 includes a presumption that there exists a legally enforceable debt or liability - However such presumption is rebuttable in nature - Criminal Trial - Proof - Presumptions - Generally. Further held that "Signature on the cheque was his, statutory presumption under S.139 comes into play and the same was not rebutted even with regard to the materials 34 C.C.No.14631/2017 J submitted by complainant Appellant not able to prove "lost cheque" theory - Apart from not raising a probable defence appellant was also not able to contest the existence of a legally enforceable debt or liability - hence, his conviction by High Court, held, proper. In another decision of Hon'ble Apex Court of India, reported in CRIMINAL APPEAL NO. 508 OF 2018 DT 15-03-2018 between ROHITBHAI JIVANLAL PATEL Vs STATE OF GUJARAT AND ANR held that "Negotiable Instruments Act facts like source of funds are not relevant if the Accused has not been able to rebut the presumption. It is further held that "
When such a presumption is drawn, the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not". In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex 35 C.C.No.14631/2017 J Court held that, " Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, " the accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for 36 C.C.No.14631/2017 J consideration and the holder of the cheques received the same in existing debt". It is also held that, " the Trial court and the High Court proceeded as if, the appellant is to prove a debt before civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries statutory presumption of consideration. The holder of cheque in due course is required to prove that, the cheque was issued by the Accused and that when the same presented , it was not honoured Since there is a statutory presumption of consideration, the burden is on the Accused to rebut the presumption that, the cheque was issued not for any debt or other liability ". It is also relevant here to refer the decision of Hon'ble High Court of Karnataka reported in ILR 2019 KAR 493 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat, wherein the Hon'ble High Court held that, the presumption mandated by Sec.139 of N.I Act includes the presumption that, there existed a legally enforceable debt or liability, however 37 C.C.No.14631/2017 J such presumption is rebuttable in nature". In another decision of Hon'ble High Court of Karnataka in the case of Shri.V.R.Shresti Vs. Shri. Bhaskara.P. in Crl. Appeal No. 2109/2017 dated: 15.10.2019 wherein the Hon'ble High Court of Karnataka held that "the Accused has not given any reply to the notice and also in the cross- examination, he categorically admits that, the cheque has bounced on account of no sufficient fund in the bank account of the Accused. Mere non producing of the document before the court with regard to the source of income to advance a loan is not a ground to dismiss the complaint. The Accused ought to have rebutted the contention of the complainant by producing cogent evidence before the court and mere denial is not enough".
24. Therefore on careful reading of the principles of law laid down by the Hon'ble Apex Court of India and High Court of Karnataka in the above referred decisions makes it very clear that, once the holder in due course i.e. the complainant proved that, the cheque in question belongs to the 38 C.C.No.14631/2017 J drawer and signature appearing on the cheque is that of the drawer i.e., Accused and complied the mandatory requirements as required U/s.138 of N.I.Act, a presumptions U/s.118a and 139 of N.I.Act indeed does extend to the existence of legally recoverable debt and when such a presumption is drawn the facts relating to the want of documentary evidence in the form of receipts or accounts or want of evidence regarding source of funds were not of relevant unless the Accused rebutted the presumption available to the complainant as held by the Hon'ble Apex Court and High Court of Karnataka in the above decisions. In the present case also the complainant has complied a mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to him and signature appearing on the cheque is that of his signature, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act.
25. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the 39 C.C.No.14631/2017 J defence i.e., the complainant has not produced any documents to show that, he had sufficient source of income to lend the amount of Rs.10,00,000/= to the accused and has failed to produce any document to prove that, he has lent the loan amount to the Accused and has not collected any documents from the Accused to show that, he has lent the loan amount to him, cannot be acceptable one. As in this case also the learned defence counsel argued that, the complainant has to prove his claim by producing his evidence as if it is required for proving of his debt before the Civil Court, as held by the Hon'ble Apex court of India in the above referred decisions, therefore in view of the principles of law laid down in the above referred decisions it is presumed that, cheque in question was drawn for consideration as the Accused has admitted the cheque in question belongs to him and signature found on the cheque in question is also that of his signature. It is also relevant here to mention that, on careful reading of the principles of law laid down by the Hon'ble Apex court of India and Hon'ble High Court relied upon by the learned counsel for the Accused with due respect to the principles of law the same are not helpful for 40 C.C.No.14631/2017 J the Accused in this case to prove his defence, as the fact and circumstances of the present case and facts and circumstances of the decided case are not one and the same.
26. The learned counsel for the defence has also argued in written argument that the complainant has admitted in his cross-examination that, he has not disclosed or declared the alleged loan amount lend to the Accused in his income tax returns , hence it goes to show that, the complainant has not lent the alleged loan amount to the Accused and also has no source of income as on the date of alleged lending of loan amount to the Accused and the complaint is liable to be dismissed. It is true that, the complainant in his cross-examination admitted that, he has not disclosed about lending of loan of Rs.10 Lakhs to the Accused in his I.T. Returns, but mere non declaration of the loan transaction in question in income tax returns could by itself invalidates the transaction or not is to be taken into consideration. In this regard, it is necessary here to refer the decision of our Hon'ble High court of Karnataka reported in 2019(1) Kar.
41 C.C.No.14631/2017 JL.R.185 in the case of Sri.Yogesh Poojary Vs. Sri.K.Shankara Bhat in the said case the Hon'ble High Court of Karnataka held that " Negotiable Instruments Act, 1881 - Sections 138 and 139 - Endorsement 'payment stopped by drawer' - The trial court in the instant case, merely considered a suggestion made from the Accused side in the cross-examination of PW-1 that the complainant was an income tax assessee and that he has not declared the alleged loan transaction in his returns and disbelieved the case of the complainant that too, ignoring that legal presumption under section 139 of the N.I. Act, was operating in favour of the complainant- For these reasons, it has to be held that the complainant has beyond reasonable doubt proved the guilt of the Accused punishable under Section 138 of the N.I. Act. As such, the impugned judgment of acquittal passed by the trial court deserves to be set aside and respondent/Accused is liable to be convicted for the offence punishable under Section 138 of the N.I. Act. Hence in view of the principles of law laid down by the Hon'ble High court of Karnataka in the 42 C.C.No.14631/2017 J above referred decisions, in the present case also the complainant admitted that, he has not declared the loan transaction in question in his I.T. Returns but as it is already held that, the complainant has discharged his primary burden by complying the mandatory provisions of Sec.138 of N.I. Act, therefore it is for the accused to rebut the presumption existing infavour of the complainant U/s.139 of Negotiable Instruments Act. Therefore, the admissions of the complainant with regard to non declaration of loan transaction in I.T. Returns for the concerned year could not by itself draw an adverse inference and to hold that, there was no existence of legally enforceable debt or the presumption as envisaged U/s.139 of N.I.Act is successfully rebutted by the accused. In another decision of Hon'ble Madhya Pradesh High Court decided in C.R.R No.5263/2018 dated: 7.3.2019 in the case of Smt. Ragini Gupta Vs. Piyush Dutt Sharma Gwalior., wherein the Hon'ble High Court held that, mere non filing of income tax return would not automatically dislodge the source of income of the complainant and non payment of income tax is a matter between the revenue and 43 C.C.No.14631/2017 J assessee and if the assessee has not disclosed his income in the income tax return, then the income tax department is well within its right to reopen the assessment of income of the assessee and to take action as per provisions of Income Tax Act, however non filing of income tax return by itself would not mean that, the complainant had no source of income and thus no adverse inference can be drawn in this regard only because of absence of income tax return. Hence in view of the principles of law laid down by Hon'ble High Court of Madya Pradesh in the above said decision in the present case also though the complainant has admitted that, he has not disclosed his income and transaction in question in his income tax return that itself would not automatically dislodge the source of income of the complainant. Therefore the admissions of the complainant which are elicited in his cross-examination are not helpful for the accused to prove his defence that, in view of non disclosure of source of income of the complainant and transaction in question in his income tax returns that itself sufficient to hold that, the complainant has no source of income cannot be acceptable one.
44 C.C.No.14631/2017 J27. The Accused during the course of cross- examination has taken specific defence that, complainant has not lent loan of Rs.10 Lakhs to him and he has not issued the cheque in question towards discharge of the loan amount but the complainant used to lend small amounts as a loans to him and whenever the loans lend to him complainant used to take blank cheques as a security and on repayment of the loan used to return the said cheques to him and in regard, the Accused had borrowed a sum of Rs.2 Lakhs during April 2014 and as a security the complainant has obtained two cheques bearing No. 000020 and 000021 both drawn on HDFC bank, Bengaluru and subsequently the complainant intimated him that, the said two cheques were misplaced and would return on tracing the same and has received the said loan amount of Rs.2 Lakhs by way of two other cheques bearing No. 133669 dated: 11.5.2015 and 133663 dated; 11.7.2015 both drawn on Canara Bank, Banashankari II Stage, but the complainant did not return the said cheques which were obtained as a security and thereafter he has intimated his banker to stop payment of the said cheque, 45 C.C.No.14631/2017 J accordingly the banker had stopped the payment.
28. It is true that, the complainant during the course of his cross-examination has admitted the suggest that, the Accused has obtained an amount of Rs.2 Lakhs in the month of April 2014 and also admitted that, he had encashed the said amount through the cheques bearing No. 133669 dated:
11.5.2015 and 133663 dated; 11.7.2015 both drawn on Canara Bank, Banashankari II Stage, and which were marked as Ex.D.1 and D.2 at the time of confrontation. But the complainant has categorically denied that, he has received the Ex.P.1 cheque in question and another cheque bearing No. 000020 as a security at the time of advancing loan amount of Rs.2 Lakhs to the Accused and also denied the suggestion that when the Accused approached him that, he is ready to repay the loan amount and at that time he told that, the said two cheques were misplaced and requested the Accused to issue further cheques and would return the cheques on tracing the same which were obtained as a security.
Hence it goes to show that the complainant in his cross examination no where admitted that the 46 C.C.No.14631/2017 J subject cheque i.e.Ex.P1 and another cheque was given by the Complainant towards security of the loan amount of Rs.2 Lakhs barrowed by him in the month of April 2014 as alleged by the accused in his defence.
29. The accused in order substantiate his defence i.e., when he approached the Complainant and ready to repay the loan amount of Rs.2 Lakhs at that time the Complainant stated that he had misplaced the two cheques which he had obtained as a security and requested to issue further cheques and would return the cheques on tracing the same but he did not choose to return the said cheques and on coming to know that the complainant is likely to misuse the cheque which were issued as a security he has intimated his banker to stop payment of the said cheque accordingly the banker had stopped the payment, has not produced single documents, therefore, except the suggestion made to the Complainant in his cross examination, the accused has not produced any document, if really the accused had given intimation to the his banker for stop payment definitely he would have produce the 47 C.C.No.14631/2017 J said document before the court but no such document has been produced by the accused, in such circumstance an adverse influence with drawn against the accused that the cheque in question was issued by him towards discharge of the debt in question in order to avoid liability to pay the cheque amount the accused has given the stop payment instruction to his bank. If really the accused his having sufficient funds in his account as on the date of issuance of stop payment instructions to the his banker, definitely he would have produce his bank statement to the court to show that, as on the date of issuing stop payment instructions or as on the date of presentation of the cheque in question to the bank he has got sufficient funds in his account to honor the cheque in question, therefore the accused has failed to produce the documentary evidence , in such circumstance it can be held that the accused has not raised a probable defence which creates doubts about the existence of legally enforceable debt are liability.
30. It is also relevant here to mention that, as per the defence of the Accused when the 48 C.C.No.14631/2017 J complainant did not choose to return his blank signed cheques which were given as a security while obtaining loan of Rs.2 Lakhs and even after repayment of the said loan by way of cheques i.e Ex.D1. and D.2 and on coming to know that, there is likely to be misused his cheques he has given stop payment intimation to his banker, but the Accused has not pleaded or suggested to the complainant that, even after repayment of the alleged loan through Ex.D.1 and D.2 he has requested the complainant for return of his blank cheques inspite of it he did not return the same for which only he has given stop payment instructions but no such document is forthcoming before the court to show that, he has made an effort by issuing stop payment instructions to the bank authority, therefore the defence of the Accused that, he had given stop payment instructions cannot be acceptable one. If really the Accused on coming to know that, complainant is likely to misuse his alleged blank signed cheques, definitely he would have initiated legal action against the complainant either by issuing legal notice to him or by lodging the complaint against the complainant before concerned 49 C.C.No.14631/2017 J police station or courts of law by alleging that, even after repayment of loan amount of Rs.2 Lakhs by way of Ex.D.1 and D.2 the complainant did not return his two blank signed cheques and there is likely to be misused of his alleged blank cheques given to the complainant, but no such efforts have been made by the Accused except the oral suggestions made to the complainant during his cross-examination therefore the defence taken by the Accused is appears to be a mere suggestion but not more than that and the unnatural conduct of the Accused in non taking of action by him for getting return of his alleged blank cheques from the complainant which may leads to draw an adverse inference against the Accused that, in order to avoid liability of repayment of the cheque amount in dispute the Accused has taken such a defence that too by mere suggestions to the complainant in the cross-examination and the cheque in question was issued by the Accused towards discharge of the liability. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa 50 C.C.No.14631/2017 J Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt- cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural - Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving existence of legally enforceable debt and issuance of cheques towards discharge of such debt - Conviction, Proper". Hence, in view of the proposition of law held by the Hon'ble Apex Court in the above decision aptly applicable to the case on hand since in the present case also the accused has not made any efforts to get return of cheques alleged to have been given to the complainant for security of the loan amount of Rs.2 Lakhs borrowed by him from the complainant, under such circumstances, the said 51 C.C.No.14631/2017 J unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused that, the cheque in question issued by the accused towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted the signature and cheque in question is belongs to him.
31. It is also the defence of the Accused that, the subject cheque and another cheque were given by him to the complainant as a security towards the loan of Rs.2 Lakhs obtained by him in the year 2014 and he has repaid the said amount but the complainant did not choose to return his blank signed cheques, but it is already held in the above that, the Accused has failed to prove his defence, under such circumstances even the cheques which were given towards security of the some other loan alleged to have been borrowed but the Accused failed to prove the alleged loan transaction, in such circumstances if the Accused admitted the signature on the cheque and also issuance of the cheque, it can be held that, the cheque in question issued is towards the discharge of transaction in question. In 52 C.C.No.14631/2017 J this regard, it is relevant here to refer the decision reported in 2015 (4) KCCR 2881 (SC) in the case of T. Vasanthakumar Vs. Vijayakumari wherein the Hon'ble Apex court held that, "NEGOTIABLE ISNTRUCEMTNS Act, 1881- Section 138 and 139
- acquittal - If justified- Accused not disputing issuance of cheque and his signature on it - Plea that it was issued long back as security and that loan amount was repaid - Not supported by any evidence - Fact that date was printed, would not lend any evidence to case of accused- Acquittal not proper. Hence in the present case also it is the main defence of the Accused that the cheque in dispute alleged to have been issued towards security to the complainant and the complainant by misusing the said cheque has filed this complaint but the Accused has admitted the issuance of cheque and his signature on the said cheque and also taken defence that, the cheque was issued towards security but no documents or proof given by the Accused to prove his defence in such circumstances by applying the principles of law laid down in the above decision the defence of 53 C.C.No.14631/2017 J the Accused cannot be acceptable one. It is true that, the above principles of law pertains to the case of different set of facts but the preposition of law held by the Hon'ble Apex Court is aptly applicable to the case on hand, since in this case also the complainant proved the fact that he has lent an amount of Rs.10,00,000/= to the Accused and the accused in turn issued cheque for discharge of the said amount as per Ex.C.1. The accused has also failed to produce cogent and convincible evidence to rebut the statutory presumption in support of his defense in such circumstances the defense taken by the accused cannot be acceptable one.
32. It is also the defence of the Accused that, he has given a blank signed cheque to the complainant as per the assurance of the complainant at the time of borrowing loan of Rs.2 Lakhs from him and the complainant has misused the cheque issued towards security and has filed this false complaint against him, but the complainant in his cross-examination has denied the suggestions made to him in that regard. Even for sake of discussion if it is assumed that, the contents 54 C.C.No.14631/2017 J of the subject cheque are not filled in by the Accused even under such circumstances also, unless and until the Accused has proved his defence by producing cogent and convincible evidence, it cannot be held that, the contents of the cheque have been filled in by the complainant. In this regard, it is a relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2019 SC 2446 in the case of Birsingh Vs. Mukesh Kumar., wherein the Hon'ble apex Court held that, "presumption U/s.139 is presumption of law, distinguished from presumption of facts and also held that, presumptions are rules of evidence and do not conflict with presumption of innocence which requires prosecution to prove case against the Accused and also held that obligation on the prosecution may discharged with the help of presumptions of law and presumption of fact unless the accused adduces evidence showing reasonable plausibility of non existence of presumed fact." In the present case though the Accused has denied the contents of the cheque in question except his signature but he did not prove his defence or produced any documents or 55 C.C.No.14631/2017 J satisfactory evidence to rebut the presumptions as available U/s.139 of the N.I. Act, under such circumstances in view of the above principles of law, it can be presumed even on fact also that the complainant has proved his case by discharging his burden and complying the mandatory provisions. In the said decision the Hon'ble Apex court has also held that, "presumption as to legally enforceable debt is rebuttable, the signed blank cheque if voluntarily presented to payee towards payment payee may fill up amount and other particulars and it in itself would not invalidate cheque and onus would still be on the accused to prove that, cheque was not issued or discharge of debt or liability by adducing evidence." In another decision of Hon'ble Apex court of India decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, "
Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other 56 C.C.No.14631/2017 J liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. In such circumstances even if it is assumed that, the complainant admitted that, the contents of cheque in question were not filled in by the Accused in view of the principles of law laid down in the above decision that itself would not invalidates the cheque in question and it can be presumed that, the cheque has been issued towards discharge of legally recoverable debt.
33. It is settled law that, the accused can rebut the presumption only on the basis of materials produced by the complainant even without entering into the witness box but in the present case the Accused has failed to substantiate his defence in order to rebut the presumption available to the complainant and to prove the defense of the 57 C.C.No.14631/2017 J accused, under such circumstance, it is for the accused to disprove the case of the complainant or rebut the presumption then only the onus will be shifted on the complainant to prove his case. Admittedly the accused did not entered in to the witness box, therefore an adverse inference can be drawn against the accused that he has failed to rebut the presumption available to the complainant. Therefore it is clear that, except having denial of the case of the Complainant in the cross examination of complainant, the Accused has not taken any interest so as to prove his defence. In this regard, it is relevant here to refer a decision of Hon'ble Apex Court of India reported in "AIR 2018 SC 3173 in a case of Kishan Rao Vs. Shankargouda" wherein the Hon'ble Apex Court held that " Negotiable Instruments Act (26 of 1881), Ss. 138, 139- Dishonour of cheque - Presumption as to - Accused issuing cheque of Rs.2 Lakhs towards repayment of loan to Complainant- said cheque dishonoured on account of insufficiency of funds- Complainant proving issuance of cheque having signatures of Accused - Accused failing to rebut presumption raised against him and 58 C.C.No.14631/2017 J no evidence led by him in his support - Acquittal of Accused by High Court in revisional jurisdiction on ground of doubt in mind of Court with regard to existence of loan, improper- Accused, liable to be convicted. In another decision decided in Crl.Appeal No.1545 of 2019 dt.17/10/2019 by the Hon'ble Apex Court of India in the case of Uttam Ram Vs. Devinder Singh Hudan and Anr. Wherein the Hon'ble Apex Court held that, Dishonor of cheque - Statutory presumption under - burden to prove - the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability - it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer - even a blank cheque leaf, voluntarily signed and handed over by the accused which is towards some payment, would attract presumption U/s. 139 of NI Act - the accused is held guilty of dishonour of cheque for an offence U/s.s.138 of NI Act. It is also held that, the accused has failed to lead any evidence to rebut the statutory presumption, a 59 C.C.No.14631/2017 J finding returned by both the Trial Court and High Court. Both courts not only erred in law but also committed perversity when the due amount is said to be disputed only on the account of discrepancy in the cartons, packing materials or the rate to determine the total liability as if the appellant was proving his debt before the civil court. Therefore it is presumed that, the cheque in question were drawn for consideration and the holder of the cheques received the same in existing debt. Therefore the principles of law laid down in the above decision are aptly applicable to the case on hand, since in this case also the complainant proved the fact that he has lent an amount of Rs.10,00,000/= to the Accused and the accused in turn issued cheque for discharge of the said amount as per Ex.C.1. The accused has also failed to enter into witness box to rebut the statutory presumption in support of his defense in such circumstances the defense taken by the accused counsel during the course of cross examination cannot be acceptable one.
34. It is also important to note here that, the 60 C.C.No.14631/2017 J Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and he has failed to explain as to how his cheque has come to the possession of the Complainant, this would also give rise to an adverse inference against him. This proposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa". In another decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the cheque entered into the hands of complainant".
Hence in the present case also the Accused has failed to explain and prove that, how the cheque in question was entered into the hands of complainant. Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by adducing cogent and convincible evidence.
35. Therefore considering all these aspects of 61 C.C.No.14631/2017 J the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant, the complainant has successfully established beyond all reasonable doubt that, he has lent a sum of Rs.10,00,000/= to the accused as a hand loan and thereafter negotiations held between the complainant and Accused, the Accused has agreed to pay Rs.1 Lakh on the principal amount and thereafter has issued the cheque in question i.e. Ex.C.1 to the complainant for sum of Rs.11,00,000/= towards repayment of the hand loan with interest, thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Payment stopped by Drawer" and thereafter he got issued legal notice to the accused and inspite of service of the said notice, the Accused did not repaid loan amount and interest, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.C.1 Cheque. Therefore 62 C.C.No.14631/2017 J accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
36. Point No.2: Negotiable Instrument Act was enacted to bring credibility to the cheque and the very purpose of enactment is to promote the use of negotiable instrument, while to discourage the issuance of cheque without having sufficient funds in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following :-
ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.63 C.C.No.14631/2017 J
The accused is sentenced to pay a fine of Rs.11,25,000/= (Rupees Eleven Lakhs and Twenty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.11,20,000/= (Rupees Eleven Lakhs and Twenty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
(Directly dictated to the stenographer online, printout taken by her, verified, corrected and then pronounced by me in the open Court on this the 4th day of February 2020).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.64 C.C.No.14631/2017 J
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri.Subramani.N;
2. List of documents exhibited on behalf of the Complainant:-
Ex.C-1 : Original Cheque;
Ex.C-1(a) : Signature of the Accused;
Ex.C-2 : Bank Memo;
Ex.C-3 : Office copy of the Legal Notice;
Ex.C-4 : Postal Receipt;
Ex.C-5 : Returned Notice;
Ex.C-6 : RPAD Cover;
Ex.C-7 : Postal receipt.
Ex.C-8 postal acknowledgement
Ex.C-9 : certified copy of the registered sale deed
dated: 30.12.2013;
Ex.C-10 to C- : original pass books pertaining to the 15 complainant
3. List of witness/s examined on behalf of the Accused:-
- Nil-
4. List of documents exhibited on behalf of the Accused:-
Ex.D.1 & D.2 ; Certified copies of the cheques (Marked through PW.1) (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City.65 C.C.No.14631/2017 J
4.2.2020 Judgment pronounced in the open court vide separate order.
ORDER Acting U/sec.255(2) of Cr.P.C. the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.11,25,000/= (Rupees Eleven Lakhs and Twenty Five Thousand only) within one month from the date of order, in default he shall under go simple imprisonment for a period of (3) three months for the offence punishable U/sec.138 of N.I.Act.
Further acting U/sec.357(1) of Cr.P.C. out of the fine amount on recovery, a sum of Rs.11,20,000/= (Rupees Eleven Lakhs and Twenty Thousand only) shall be paid as compensation to the complainant.
Further acting U/sec.357(1)(a) of Cr.P.C. out of fine amount on recovery a sum of Rs.5,000/= (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
The Bail bond of the Accused stands cancelled.
Office is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
66 C.C.No.14631/2017 JXVI ACMM, B'luru.