Bangalore District Court
K T Venkatesh vs M S Vasanth Kumar on 9 August, 2024
KABC030207392020
Presented on : 19-03-2020
Registered on : 19-03-2020
Decided on : 09-08-2024
Duration : 4 years, 4 months, 21 days
IN THE COURT OF THE XXIII ACMM, BENGALURU
Dated: This the 09th day of August, 2024
Present:
SRI.GIRISH CHATNI, B.A.,LL.B.,(Spl)
Holding C/C. XXIII ACMM, Bengaluru
C.C.No.5355/2020
Complainant : Sri.K.T.Venkatesh,
S/o.Thimmegowda,
Aged about 43 years,
R/at No.41, 2nd Main Road,
9th Cross, Agrahara Dasarahalli,
Near Anjaneya Temple,
Bengaluru North,
Bengaluru-560079.
Ph. 9449726059
(By Sri.Girigowda K.S., Adv)
2 CC.No.5355/2020
- V/s -
Accused : Sri.M.S.Vasanth Kumar,
S/o.Siddappa,
Aged about 47 years,
Resident of Mosale, Sankihalli,
Arasikere Taluk,
Hassan District 573125.
(By Sri.D.V.C, Adv.)
JUDGMENT
This case emanates from a private complaint filed by the complainant alleging that the accused has committed an offence punishable under section 138 of Negotiable Instruments Act, 1881.
2. THE ESSENTIAL FACTS IN BRIEF.
It is the case of the complainant that, the accused is known to him since several years and out of the said friendship he borrowed a hand loan of Rs.5,00,000/- from the complainant. It is further contended that, for the repayment of the said loan amount, the accused has issued cheque bearing No.112925 dated 16.11.2019 for Rs.5,00,000/- drawn on Canara Bank, Sakleshpura branch, in favour of complainant.
3 CC.No.5355/2020
2(i). It is further contended that, as per the instructions of the accused, the complainant has presented the cheque in question for encashment through his banker i.e., ICICI Bank, Magadi Road Branch, Bangalore on 18.11.2019 and the same was returned unpaid for the reason 'Funds Insufficident'. It is further contended that, the complainant got issued a Legal notice dated 10.12.2019 calling upon the accused to pay the amount covered under the cheque and the same was served to the accused. After service of notice, the accused has replied to the said Legal Notice on 27.12.2019, but did not choose to clear the amount covered under the cheque. Therefore, the complainant filed the present complaint against the accused alleging the commission of offence punishable under section 138 of Negotiable Instrument Act.
3. The complainant has led his pre summoning evidence. He has filed his affidavit by way of sworn statement in lieu of oral evidence, in which, he has reiterated the complaint averments. In support of his oral evidence, PW.1 has produced 06 documents, which are marked as Ex.P.1 to Ex.P.6 and closed his side. 4 CC.No.5355/2020
4. Prima-facie case has been made out against the accused and has been summoned vide order of the same date. Accused has appeared before the court and has been enlarged on bail. The substance of accusation was read over to him, to which he pleaded not guilty and claimed to be tried.
5. In view of the directions of the Hon'ble Apex Court in a decision reported in (2014) 5 SCC 510 (Indian Bank Association & Others V/s Union of India), the affidavit filed in lieu of sworn statement was treated as evidence of complainant. Thereafter, the accused was examined as provided under section 313 of Cr.P.C., by explaining the incriminating evidence available against him. The defence of the accused is of total denial one. The accused has examined himself as DW.1 and got marked Ex.D.1 to D.12 and closed his side. During the course of cross of PW.1, Ex.D.1 and 2 got confronted and marked.
6. Heard both sides. The counsel for accused filed written notes of arguments and also relied on decisions. Perused the materials available on record.
5 CC.No.5355/2020
7. The following points would arise for consideration.
1. Whether the complainant proves that the accused has issued cheque bearing No.112925 dated 16.11.2029, in favour of complainant, for an amount of Rs.5,00,000/- towards discharge of legally enforceable debt and same was returned unpaid on account of "Funds Insufficient" and thereby committed an offence punishable under section 138 of Negotiable Instrument Act?
2. What Order?
8. My findings on the above points are as under:-
Point No.1: In the " Negative"
Point No.2: As per the final orders for the following:
REASONS
9. Point No.1:
Section 138 of the Negotiable Instrument Act has been enacted to lend credibility to the financial transactions.
The main ingredients of the offence punishable U/s 138 of Negotiable Instrument Act are ;6 CC.No.5355/2020
(I) Drawing up of a cheque by the accused towards payment of an amount of money, for discharge, in whole or in part, of any debt or any other liability.
(ii) Return of the cheque by the Bank as unpaid.
(iii) The drawer of the cheque fails to make the payment of the said amount within 15 days of the receipt of notice under the proviso (b) to Section 138.
The explanation appended to the section provides that the debt or other liability, for the purpose of that section means a legally enforceable debt or other liability.
10. Apart from this, section 139 of Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in the following terms;
"It shall be presumed unless the contrary is proved, that - the holder of the cheque received the cheque, of the nature referred to him section 138, for the discharge in whole or in part, of any debt or other liability."
11. Also, Section 118 of the N.I.Act states - Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration:--that every negotiable instrument 7 CC.No.5355/2020 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 a date was made or drawn on such date;
(c) as to time of acceptance:--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer:--that every transfer of a negotiable instrument was made before its naturity;
(e) as to order of endorsements:--that the indorsements appearing upon a negotiable instrument were made in the order in which they appear then on;
(f) as to stamp:--that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course:--that the holder of a negotiable instrument is a holder in due course:
provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
12. Thus the Act clearly lays down presumption in favour of the complainant with regard to the issuance of the cheque by the accused towards the discharge of his liability in favour of the complainant.
8 CC.No.5355/2020
13. Under the scheme of the Act, the onus is upon the accused to rebut the presumptions in favour of the complainant by raising a probable defence.
14. It is a well settled position of law that, the defence of the accused, if is in the nature of a mere denial of the case of the complainant will not be sufficient to hold it as a probable defence. The bare denial of the passing of consideration apparently does not appear to be any defence. Something which is probable must be brought on record for getting the benefit of shifting the onus of proof to the complainant.
15. It is also a well settled position of law that once the cheque is proved relating to the account of the accused and if he /she accepts and admits the signature on the said cheuqe, then the initial presumption as contemplated under section 139 of the N.I.Act has to be raised by the court in favour of the complainant.
16. The presumption referred to in section 139 of N.I.Act is a mandatory presumption and not a general presumption, but the 9 CC.No.5355/2020 accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. However, the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. The defence raised by the accused by way of rebuttal evidence, must be probable and capable of being accepted by the court.
17. No doubt the initial mandatory statutory presumption as provided under sections 118 and 139 of N.I.Act are in favour of the complainant. However, they are rebuttable presumptions and the accused is expected to rebut the presumption by raising a probable defence.
18. Such being the legal position, it would be pertinent to refer the defence raised by the accused in order to rebut the presumptions, which are in favour of the complainant. On perusal of the examination-in-chief of the accused , the accused has raised the following grounds as defence.
10 CC.No.5355/2020
i) It is contended that the complainant is doing work of giving amount to others on commission basis.
(ii) It is contended that the complainant has secured two blank cheques, pay slip, copy of the passbook, Aadhar Card, Pan Card and other documents in order to get loan of Rs.2 lakhs to the accused..
iii) It is also contended that the complainant did not get the loan to the accused as assured, thereafter the accused requested the complainant to return the blank cheques and other documents. It is also contended as per the say of the complainant an amount of Rs.50,000/- was transferred to the S.B. Account of the wife of the complainant in the year 2020, so as to take back the complaint.
iv). The complainant is not having any financial capacity in order to lend such huge amount..
19. Having referred the defence raised by the accused, on gone through the cross-examination of DW-1, the accused is not disputing that the cheque in question belongs to him and signature thereon is of his signature. Therefore, in this context of matter, it would be appropriate to refer the decision of the Hon'ble Apex Court in APS FOREX SERVICES PRIVATE LTD., V/S SHAKTHI INTERNATIONAL FASHION LINKERS AND OTHERS reported in AIR 11 CC.No.5355/2020 2020 Supreme Court 945, wherein, it has been observed and held that once the issuance and the signatures of the cheque/s is admitted, there is always presumption in favour of complainant that there exists legally enforceable debt or liability.
20. It is also profitable to refer another decision of the Hon'ble Apex Court in P.RASIYA V/S ABDUL NAZEER AND ANOTHER reported in 2022 SCC Online Supreme Court 1131, wherein, it has been observed and held that once the initial burden is discharged by the complainant, that the cheque was issued by the accused and signature of the accused on the cheque is not disputed, then in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for discharge or any debt or other liability.
21. Now let me consider the evidence on record, the complainant has got examined himself as PW-1 by filing sworn statement by way of affidavit in lieu of oral evidence, wherein he has reiterated the entire averments made in the complaint.
22. In support of his oral evidence, PW-1 has produced the original cheque marked as Ex.P.1, signature of accused marked as 12 CC.No.5355/2020 Ex.P.1(a). Return memo as Ex.P.2, office copy of the legal notice as Ex.P.3, Postal receipt and acknowledgment as per Ex.P.4 and P.5 and reply to the notice as per Ex.P.6. On perusal of Ex.P.1 to P.5, it appears that the complainant had complied with mandatory requirements of Section 138 of N.I.Act. Therefore a presumption can be drawn in his favour as contemplated U/s.139 of N.I.Act.
23. The accused in order to prove his defence has got examined himself as DW-1 and he has deposed that through his friend Venkatesh and Laxman the complainant got known to him. He has further deposed that the complainant is the owner of the bakery and doing the work of giving money to the others on commission basis. He has further deposed that through his brother an amount of Rs.10,000/- was paid to the complainant as commission to the complainant. The DW-1 has further deposed that the complainant has secured two blank cheques, pay slip, copy of the Bank passbook, Aadhar card and Pan card and other documents in order to get Rs.2 lakhs to the accused from others.
24. DW-1 has further deposed that an amount of Rs.10,000/-, Rs.15,000/-, Rs.25,000/- and Rs.20,000/- were given as commission to 13 CC.No.5355/2020 the complainant. DW-1 has further deposed that in spite of payment of the above said amount as commission the complainant has not given loan of Rs.2 lakhs to the accused from others. DW-1 has further deposed that he has sought for return of the cheques and other documents wherein the complainant has demanded for Rs.50,000/-. DW-1 has further deposed that as the complainant said that he will withdraw the case, an amount of Rs.50,000/- to the Bank account of wife of the complainant. DW-1 has further deposed that the complainant through Jayaram has given dire consequences, to which the accused has filed police complaint against the complainant with Basaveshwaranagara Police Station. DW-1 has further deposed that in order to have wrongful gain, complainant has misused the cheque and filed false case against him. During the course of cross- examination of PW-1, Ex.D.1 and D.2 were confronted and marked through DW-1. Ex.D.3 to D.11 were marked through DW.1.
25. Before adverting to discuss the defence with regard to the financial capacity of the complainant, I would like to discuss on the other defences raised by the accused. As stated above, the accused has contended that the complainant has secured two blank cheques 14 CC.No.5355/2020 pay slip and other documents by the complainant in order to advance loan to the accused through others on commission basis. Accused has also contended that he has paid commission to the complainant. On perusal of the materials on record, sufficient evidence has not been produced by the accused in order to show that from whom the complainant intended to advance loan to the accused for Rs.2 lakhs. NO documents are forth coming in order to show that the accused has paid commission to the complainant with regard to the advancement of loan. Therefore, the said line of defence that the complainant has secured cheque in question and other documents for the purpose of security to the complainant in order to advance the loan from others holds no water.
26. FINANCIAL CAPACITY The accused has mainly contended that the complainant is not having financial capacity and has not produced sufficient documents in order to lend the huge amount of Rs.5 lakhs to the accused. It is well settled that the complainant need not prove his financial capacity in order to lend amount to the accused. However, if the accused questions the very financial capacity of the complainant, the 15 CC.No.5355/2020 complainant has to establish his financial capacity in order to lend Rs.5 lakhs. It would be profitable to refer the decision of the Hon'ble Apex Court in Basalingappa Vs.Mudibasappa, wherein the Hon'ble Apex Court has held that the burden would shift on the complainant to prove his financial capacity. I would like to refer cross-examination of PW-1, wherein he has specifically admitted that he had withdrawn the amount from his bank and gave to the accused. On the other hand, the complainant has not produced any bank statement before this Court in order to show that he has withdrawn the amount from the bank and given to the accused. Moreover, there is no averments either in the complaint or in the notice or in the chief-examination stating that on which date the complainant has withdrawn the amount and given to the accused. In this regard, I would like to refer the decision of the Hon'ble High Court of Karnataka reported in 2024 (2) AKR 36 between Adham Bapusab Vs.Jayamala P.Shetty, wherein the Hon'ble High Court has held that the complainant at least would have produced the account extract of herself and her husband to show that the periodical they were in receipt of the money and withdrawn the same and kept in the house.
16 CC.No.5355/2020
27. On referring the cross-examination of PW-1, he has admitted that he has not stated in the complaint, notice and in the examination-in-chief as to on what date and for what purpose he has advanced the money to the accused. In this regard I would like to refer the decision of the Hon'ble High Court of Karnataka Dharwad Bench in Crl. Appeal No.2772/2010 between Lahu V/s Dhanajirao Ramchandra Haibati wherein, the Hon'ble High Court of Karnataka has held that the complainant has not specifically stated as to on what date he gave the money to the accused and the very passing of the consideration towards the cheque has not been mentioned. Therefore, the Hon'ble High Court of Karnataka dismissed the appeal preferred by the complainant.
28. It would be appropriate to refer the decision of the Hon'ble High Court of Karnataka, Dharwad Bench reported in 2022 (2) KCCR 1651 between Sameer Rafiq Mulla V/s Asif Abdulhamid Misrikoti, wherein the Hon'ble High Court of Karnataka has dismissed the appeal filed by the complainant, wherein, in the said case the complainant has not mentioned the date and amount of loan in the complaint and also failed to prove the capacity of the 17 CC.No.5355/2020 complainant to lend money and transaction in question found to be doubtful. Accordingly the accused was acquitted in the said case.
29. I have carefully gone through the cross-examination part of PW-1, wherein, he has deposed that he has withdrawn some amount from the bank and paid to the accused. On perusal of the cross-examination of PW-1, he has admitted that he has no other documents to show that the accused has acknowledged the payment of Rs.5,00,000/-. On perusal of cross-examination of PW-1 he admitted that, he has given amount to the accused in the presence of one Jayram and did not received any receipt from the accused. In this regard, I would like to refer the decision of our own Hon'ble High Court of Karnataka in 2024 (1) AKR 593 between C.K.Ravikumar VS. G.S.Venkatesh, wherein, the Hon'ble High Court of Karnataka has held that the complainant has failed to place any materials on record to show that at relevant point of time the complainant was having cash of Rs.1,50,000/- and the same was paid to the accused.
30. On perusal of the cross-examination of PW-1 he has admitted that he has not given amount to the accused for interest and 18 CC.No.5355/2020 also not taken any documents towards the security of the loan. It would be profitable to refer decision of the Hon'ble High Court of Karnataka in Crl. Appeal No.100296/2016 dated 13.02.2020 between Vishal V/s Prakash Kadappa hegannawar, wherein, the Hon'ble High Court of Karnataka, has held that no prudent man can believe that a person who is doing business would part with such huge amount without charging any interest.
31. It is useful to refer the decision of the Hon'ble High Court of Karnataka reported in 2020 (1) KCCR 458 in between Syed Suleman Saheed Vs.N.D.Subramaniyam, wherein, the Hon'ble High Court of Karanataka has held that the complainant has failed to discharge the burden. There is no material as to how the complainant moblized the amount nor the manner in which he paid this amount to the accused. The Hon'ble High Court of Karnataka has further held that the complainant has neither examined the inmates of his house nor referred to the identity of any one of the persons stated to have accompanied the accused during the transaction. In the case on hand, the complainant though admits that he has given the amount through one Jayram but has failed to examine the said person. 19 CC.No.5355/2020
32. On overall perusal of the materials on the record, complainant has failed to show that he has enough source of income to lend the money to the accused. No sufficient documents, mean to say that, Bank statement has been produced in order to show that the complainant has lent amount by withdrawing from the bank. No supporting documents are produced in order to show that the accused has acknowledged the receipt of Rs.5,00,000/- from the complainant. No independent witnesses have been examined in order to show that the complainant has advanced amount to the accused in the presence of one Jayram.
33. On perusal of the averments made in the complaint, the complainant has not mentioned the date of loan. The complaint is completely silent regarding the date of advancement of loan. However, during the cross-examination of PW-1, for the first time has deposed that on 08.10.2019 he has given amount to the accused. Therefore, prima-facie it is evident that complainant himself is unaware of the fact as to when he advanced the loan. Therefore, it creates suspicion regarding the entire transaction. It is well settled 20 CC.No.5355/2020 that the accused need not prove his financial capacity. However, if the accused questions the financial capacity, then the complainant has to prove his financial capacity. As discussed above, the complainant has failed to show that he had source of income and financial capacity in order to lend the amount to the accused.
34. ANALYSIS On perusal of the cross-examination of PW-1 he has admitted that the cheque in question is written by the accused. PW-1 has admitted that the ink in writing of name, amount, date and the ink of writing in signature are different. Basing on the said admission the counsel for the accused would argue that the complainant has misused the cheque by writing himself in the cheque. He relied on the decision of the Hon'ble Supreme Court reported in (2003) 1 SCC 1 between C.Anthony Vs. K.G.Raghav Nair wherein the Hon'ble Apex Court has held that the ink used in the body of the cheque was different from the ink used in the signature on the cheque. Therefore, the Hon'ble Apex Court has drawn an inference that the case put forth by the complainant was doubtful. Hence, could not be accepted. 21 CC.No.5355/2020
35. On perusal of the cross-examination of PW-1, he pleaded ignorance as to the repaying capacity of the accused. The counsel for the accused relying on the said admission and also relied on the decision of the Hon'ble High Court of Karnataka in LAWS(KAR) 2018 Part 3 331 between Manjula G. Vs. Manjula T, wherein, the Hon'ble High Court has held that the complainant was not knowing about the repaying capacity of the accused accordingly dismissed the appeal. The counsel for the accused would argue that in spite of the fact that without knowing the refundable capacity of the accused, the complainant had advanced huge amount of Rs.5,00,000/-.
36. On perusal of the cross-examination of the PW-1, he has admitted that apart from the accused he has not filed any other case against other persons. PW-1 has also admitted that he has filed case against one Rajendra. During the course of cross-examination of PW- 1 certified copy of the order sheet in CC.No.52/2016 was confronted and also the certified copy of the complaint were confronted and marked through PW-1 as per Ex.D.1 and Ex.D.2. The counsel for the accused during the course of the arguments has relied on the 22 CC.No.5355/2020 decision of the Hon'ble High Court of Karnataka in Crl. Appeal No.2921/2012 dated 23.11.2020 between Srichand S/o Laxman Vernekar V/s Sekharr R.Kundagol, wherein, the Hon'ble High Court of Karnataka in the said decision has held that the accused has raised and substantiated a doubt regarding financial capacity of the complainant. Accordingly, the appeal was came to be dismissed.
37. On perusal of the cross-examination of PW-1, he has pleaded ignorance as to an amount of Rs.50,025/- has been transferred to the savings bank account of wife of the complainant. PW-1 has pleaded ignorance that as on 01.10.2018 an amount of Rs.10,000/- and on 20.10.2018 for an amount of Rs.2500/- has been transferred to the account of wife of the complainant.
38. On perusal of the cross-examination of PW-1, he has admitted that he is having BPL Card. Therefore the counsel for the accused would argue that the financial capacity of the complainant can be doubted. In that regard, the counsel for the accused has relied on the decision of the Hon'ble High Court of Karnataka reported in 2022 (3) AKR 655 between Dadapeer Ammasaheb Vs.Munawarsab, 23 CC.No.5355/2020 wherein, the Hon'ble High Court of Karnataka has held that the findings recorded by the Trial Court doubting the financial capacity of the complainant cannot be said to erroneous.
39. On perusal of the cross-examination of PW-1, he has admitted that one Mr.Thimmegowda has filed present case U/s.138 of N.I. Act against the complainant in CC.No.372/2018, which is pending before the Court of Channarayapatna. Therefore, the counsel for the accused would argue that an adverse inference can be drawn against the complainant.
40. On perusal of the cross-examination of PW-1, he has admitted that on 24.07.2020 the accused has paid a sum of Rs.50,000/- through cheque to the wife of the complainant by name Reshma, which is evident from Ex.D.3. On perusal of Ex.D.4, it further reveals that on 16.10.2018 the accused has paid an amount of Rs.2500/- to the wife of the complainant as per Ex.D.5. On perusal of Ex.D.6, the accused has paid an amount of Rs.2500/- to the wife of the complainant on 22.10.2018.
24 CC.No.5355/2020
41. On perusal of the cross-examination of PW-1, he has not explained with regard to accounted his payments in a sum of Rs.5,00,000/- to the complainant. On perusal of the materials available on record, the complainant has also not produced the bank statement in order to show that under which liability these payments have been adjusted. Therefore, the counsel for the accused would argue that the cheque in question was not issued by the accused towards discharge of legally enforceable debt or other liability. In that context of the matter, the counsel for the accused has relied upon the decision of the Hon'ble High Court of Karnataka, Bengaluru in Crl. Appeal No.913/2010 dated 12.09.2023 between Mitra Finance V/s Vasanth Naik and another, wherein, the Hon'ble High Court has held that in the absence of the cogent documents with regard to the earlier transaction, the contention of the accused that the cheque in question was issued in respect of earlier transaction and misusing the same is to be accepted.
42. The counsel for the accused has relied upon the decision of the Hon'ble High Court of Karnataka reported in 2021 (3) KCCR 2165 between Shrichand Vs.Sekhar R.Kundagol, wherein the 25 CC.No.5355/2020 Hon'ble High Court of Karnataka has elaborately dealt with the contradictions, omission as well as improvements elicited in the cross- examination which casts serious doubt about the transaction between the complainant and the accused so also his financial capacity. On perusal of the cross-examination of PW-1,, it was suggested that on 11.08.2018 an amount of Rs.10,000/- and Rs.7,000/- paid by the accused to the complainant. The counsel for the accused basing on the said suggestion has argued that the complainant has not produced account statement to show under which the liability these payments have been adjusted. Therefore, it casts doubt regarding transaction.
43. The counsel for the accused has also relied upon the decision of the Hon'ble Apex Court reported in 2022 LIVE LAW SC 830 between Dashrathbhai Trikambhai Patel V/s Hitesh Mahendrabhai Patel and Another, wherein, the Hon'ble Apex Court has dealt with Section 56 R/w Section 15 of the N.I.Act. The Hon'ble Apex Court in the said decision has held that, if the un-endrosed cheque is dishonoured on presentation the office U/s.138 would not be attracted. In the case on hand, relying on the admission given by 26 CC.No.5355/2020 the complainant that Rs.50,000/- has been paid to the account of the wife of the complainant, the counsel for the accused would argue that as per Section 56 of the Negotiable Instruments Act, the complainant has not endorsed the part payment made on the cheque. On perusal of the cross-examination of DW-1, it further reveals that after the filing of the complaint an amount of Rs.50,000/- was deposited in the bank account of the wife of the complainant.
44. On perusal of the cross-examination of DW-1, he has admitted that the said amount of Rs.50,000/- which has been deposited in the bank account of the wife of the complainant pertains to the part payment towards the transaction averred in the complaint. Basing on the said admission the counsel for the complainant would argue that the accused has admitted part payment made by him, therefore, he is liable to pay Rs.4,50,000/- which is the remaining amount to the complainant. Mere on the admission of the DW-1, it cannot be ruled out that the accused is liable to pay cheque amount to the complainant as the transaction and passing of the consideration itself is doubtful transaction. 27 CC.No.5355/2020
45. The counsel for the accused has relied on the decision of the Hon'ble Supreme Court of India in SLP No.5583 of 2022 (Criminal) between M/s Rajco Steel Enterprises V/s Kavita Saraff and Another, wherein, the Hon'ble Apex Court took note of the fact that the signature of the respondent and the figures showing the amount in the respective cheques wherein different inks held that the accused has successfully rebutted the presumption of guilt contained in the provisions of N.I.Act.
46. The counsel for the accused has also relied on the decision of the Hon'ble Apex Court reported in (2006) 3 SCC Criminal 30, between M.S. Narayana Menon Alias Mani V/s. State of Kerala and another, wherein the Hon'ble Apex Court has dealt with the presumption U/s.118 and 139 of N.I.Act and also dealt with the concept of consideration. The Hon'ble Apex Court has also dealt with Section 3, 4 and 114 of the Evidence Act.
47. The counsel for the accused has also relied on the decision of the Hon'ble Apex Court in (2013) 3 SCC 86 between Vijay and Laxman and another wherein the Hon'ble Apex Court has dealt 28 CC.No.5355/2020 with the presumptions as contained in 118(a) and 139 of N.I.Act.
48. The counsel for the accused has also relied on the decision of the Hon'ble High Court of Karnataka reported in 2024 (1) AKR 813 between Krishna Naik Vs.T.B.Basavaraj. The Hon'ble High Court of Karnataka has dealt with the financial capacity of the complainant and held that the conviction was not proper.
49. The counsel for the accused has also relied on the decision of the Hon'ble High Court of Karnataka reported in 2011 LAWS (Kar) (11) 35 between Veeraiah Vs. G.K.Madiwalar, wherein the Hon'ble High Court has held that mere issuance of the cheque itself would not be sufficient unless it is shown that the said cheque was issued towards discharge of legally recoverable debt.
50. During the course of the arguments, the counsel for the accused has filed written notes of arguments and relied on the relevant portions of cross-examination of PW-1. The counsel for the accused has relied on the decisions of the Hon'ble High Court of Karnataka and the Hon'ble Apex Court on the point with regard to the 29 CC.No.5355/2020 financial capacity of the complainant. Therefore the accused has prayed for acquitting the accused.
51. It is well settled that in order to draw presumption U/s.118(a) of N.I.Act in favour of the complainant, necessarily the complainant has to prove the passing of consideration and also to prove the transaction as averred in the complaint. In the case on hand, as discussed in my earlier paragraph of discussions, the complainant has failed to show that he has withdrawn money from the bank and given to the accused. On perusal of the materials on record, though, the accused has failed to establish his defence as averred in the examination-in-chief, it was incumbent on the part of the complainant to establish that there was financial transaction in between the complainant and the accused. The complainant has also not averred specific date on which the amount was lent to the accused. In the case on hand, the accused has not only disputed the transaction but also challenged the financial capacity of the complainant, therefore, the burden was shifted on him to prove his financial capacity. During the course of his cross-examination PW-1 has deposed that he is running bakery business and paying rent 30 CC.No.5355/2020 towards the shop and house for Rs.20,000/- per month. The complainant has not produced the bank statement in order to show that he has withdrawn some amount from the bank and given to the accused as admitted in his cross examination.
52. This court has to presume a Negotiable Instrument to be for consideration unless the existence of consideration is disproved. It is well settled that when the issuance of the cheque and the signature admitted, necessarily, the presumption U/s.139 of the N.I.Act has to be drawn in favour of the complainant. The initial burden is on the accused, to rebut the said presumption, the accused has to raise probable defence. In the case on hand, the complainant has disputed the transaction and also the financial capacity of the complainant . As discussed in my earlier paragraphs of discussion the complaint is completely silent regarding the date of advancement of the loan and also about the source of income of the complainant. Therefore, it creates suspicion regarding the transaction in between the complainant and accused. The complainant has neither produced any bank statement nor has adduced the evidence of independent 31 CC.No.5355/2020 witness. There is no material as to how the complainant has mobilized the said amount and the manner in which he paid the amount to the accused. In view of the discussions made above, the complainant has failed to establish his case by producing cogent evidence. In such circumstances, presumption U/s.118(a) cannot be extended in favour of the accused. Therefore, it cannot be held that the cheque in question was issued in favour of the complainant for legally enforceable debt. As the advancement of loan of Rs.5,00,000/- by the complainant itself is doubtful the question of issuance of the cheque towards legally enforceable debt does not arise. Therefore the accused is entitled for acquittal. In view of the discussions made above, I answer point No.1 in the "Negative".
53. Point NO.2:- In the light of discussions made at point No.1, I proceed to pass the following;
ORDER Acting under section 255(1) of Code of Criminal Procedure, the accused is acquitted for the offence punishable under section 138 of the Negotiable Instruments Act.
32 CC.No.5355/2020
The bail bond furnished by the accused stands canceled.
(Dictated to the Stenographer directly on computer, typed by him, corrected by me, signed then pronounced in the open court on this the 09 th day of August, 2024.) Digitally signed by GIRISH GIRISH SHIVANAND SHIVANAND CHATNI CHATNI Date: 2024.08.12 17:48:02 +0530 (GIRISH CHATNI) C/C. XXIII ACJM, BENGALURU ANNEXURE
1. List of witnesses examined on behalf of the complainant:
PW-1 : K.T.Venkatesh
2. List of witnesses examined on behalf of the
accused:
DW-1 : Siddappa
3. List of documents marked on behalf the
complainant:
Ex.P.1 : Cheque
Ex.P.1(a) : Signature of accused
Ex.P.2 : Return Memo
Ex.P.3 : Legal Notice
Ex.P.4 : Postal Receipt
Ex.P.5 : Postal Acknowledgment
Ex.P.6 : Reply Notice
3. List of documents marked on behalf the Accused:
Ex.D.1 : Certified copy of Order sheet.
Ex.D.2 : Certified copy of Private Complaint
33 CC.No.5355/2020
Ex.D.3 : Bank Statement
Ex.D.4 to D6 : Counter foils /Pay in Slips.
Ex.D.7 : Certified copy of Order sheet.
Ex.D.8 : Certified copy of Private complaint
Ex.D.9 : Certified copy of Cheque.
Ex.D.10 : Certified copy of Reply Notice.
Ex.D.11 : Certified copy of Police
Acknowledgment.
Ex.D.12 : Complaint.
Digitally signed by
GIRISH GIRISH SHIVANAND
SHIVANAND CHATNI
Date: 2024.08.12
CHATNI 17:47:57 +0530
(GIRISH CHATNI)
XXIII ACJM, BENGALURU