Bangalore District Court
Sri.T.A.Krishnamurthy vs Nps Constructions on 10 January, 2020
1 C.C.No.11807/2014 J
IN THE COURT OF THE XVI ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY
i. Dated:- This the 10th day of January, 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.11807/2014
Complainant : Sri.T.A.Krishnamurthy,
S/o.Late T.S.Adimurthaiah
Setty,
Aged about 50 years,
Residing at No-401, 3rd Floor,
Samruddi Nivas, 4th Cross,
3rd Main, R.K.Layout,
2nd Stage, Padmanabhanagar,
Bengaluru -560 070.
Rep. by Sri.M.N.Satya Raj., Adv.,)
- Vs -
Accused : NPS Constructions, Proprietor
V. Prasanna Kumar Setty,
S/o.Late Venkataiah,
Aged about 56 years,
Residing at No-287/1,
Near SRP Industries,
Kanakapura Main Road,
Near Sarakki Gate, J.P.Nagar,
Bengaluru.
(Rep. by Sri. S.Guruprasad., Adv.,)
2 C.C.No.11807/2014 J
Case instituted : 8.5.2013
Offence complained : U/s 138 of N.I Act
of
Plea of Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 10.1.2020
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 had executed guarantee agreement for the Housing loan vide account No. 8429752100 availed by the Accused from the Bank of India, Malleshwaram Bengaluru along with his wife i.e. P.Swarnalatha and his son Chethan Krishna during the year 2009. He has received several notices from the said bank for non payment of the installments and final notice during October 2012, failing payment of the arrears of the bankers have initiated rigorous action on him because he has executed guarantee agreement to the said bank, to safeguard 3 C.C.No.11807/2014 J his position has paid a sum of Rs.11,13,010.14 till date to the Bank of India towards Housing loan of the Accused i.e. he has paid the payment an amount of Rs.4,94,053.72ps recovered from his FD with Bank of India on 28.1.2013 and an amount of Rs.18,956.42ps. recovered from his interest amount on the said FD with bank of India on 28.1.2013 and has paid an amount of Rs.6 Lakhs through DD bearing No. 031290 of IndusInd Bank, Basavanagudi Bengaluru and in all total an amount of Rs.11,13,010.14ps paid by him and the Accused is also aware of the promising of repayment of the said amount paid by him. It is further contended that, the Accused in order to repay the amount paid by him has issued a cheque bearing No. 512389 dated:
18.3.2013 for sum of Rs.10 Lakhs drawn on Indian Bank, Basavanagudi Branch, Bengaluru and thereafter he has presented the said cheque for collection through his banker i.e. Subramanyeshwara Co-Operative Bank Ltd., V.V. puram Branch, Bengaluru on 21.3.2013 for encashment but the said cheque was dishonoured for the reason "Insufficient Funds' vide endorsement dated: 22.3.2013 and thereafter he got 4 C.C.No.11807/2014 J issued legal notice on 1.4.2013 to the Accused through RPAD and courier and said notice was served on the Accused on 2.4.2013. 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 along with original documents
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. Thereafter the complainant himself examined as PW1 by filing his affidavit in lieu of examination in chief and has produced six documents marked as Ex.P.1 to P.6 i.e Original 5 C.C.No.11807/2014 J Cheque dated:-18.3.2013 as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Memos as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, the Postal Receipt as per Ex.P.4 and courier receipt as per Ex.P.5, postal acknowledgement as per Ex.P.6 and closed his side.
6. Thereafter, the statement of the accused as required under Sec.313 of the Cr.P.C. has been recorded. He has denied the incriminating evidence appearing against him and has chosen to lead his rebuttal evidence.
7. Accused himself examined as DW.1 and has produced 14 documents got marked as Ex.D.1 to D.14. i.e., certified copy of the Acknowledgement as per Ex.D.1, Deed of Settlement Agreement dated:
17.9.2012 as per Ex.D.2, certified copy of the depositions of examination-in-chief of plaintiff in O.S.No.3258/2013 as per Ex.D.3, certified copies of the examination-in-chief and cross-examination of the Accused herein in O.S.No.1714/2013 as per Ex.D.4 and D.5 respectively, certified copy of 6 C.C.No.11807/2014 J examination-in-chief of plaintiff in O.S.No.6721/12 as per Ex.D.6, certified copies of the examination-
in-chief and cross-examination of complainant in C.C.No.12645/2014 are as per Ex.D.7 and D.8 respectively, certified copy of the complaint in C.C.No.10189/2014 as per Ex.D.9, certified copy of the examination-in-chief of complainant in C.C.No.10189/2014 as per Ex.D.10, certified copy of the complaint in C.C.No.9266/2014 and certified copy of the sworn statement of the complainant are as per Ex.D.11 and D.12 respectively and certified copy of the cheque in the said complaint, Bank memo are as per Ex.D.13, 13(a) and 13(b), certified copy of the order sheet in C.C. No 1610/2014 as per Ex.D.14 and closed his side.
8. 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.
9. On the basis of complaint, evidence of complainant and documents and having heard the 7 C.C.No.11807/2014 J 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 bearing No. 512389 dated: 18.3.2013 for sum of Rs.10 Lakhs drawn on Indian Bank, Basavanagudi 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 dishonoured for the reasons "Insufficient Funds" on 22.3.2013 and the complainant issued legal notice to the accused on 1.4.2013 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?
10. The above points are answered as under:
Point No.1: In the Affirmative Point No.2:As per final order for the following:
REASONS
11. Point No.1: Before appreciation of the facts and oral and documentary evidence of the present 8 C.C.No.11807/2014 J 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 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 9 C.C.No.11807/2014 J
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.
12. 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 10 C.C.No.11807/2014 J 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.
13. 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, he has executed guarantee agreement for the housing loan vide account No. 8429752100 availed by the Accused along with his wife and his son during the year 2009 and he has received several notices from the Bank for non payment of installments of the loan by Accused and final notice was issued to him by the bank in the month of October 2012 calling upon him to pay the arrears of the amount and in case failed to pay the arrears, bank will take rigorous action against him since he being the guarantee to the agreement, hence he has paid entire loan amount of Rs.11,13,010.14ps to the Bank of India towards the Housing loan availed by the Accused. The complainant/PW.1 further testified that, he has paid his FD amount of Rs.4,94,053.72ps dated:
11 C.C.No.11807/2014 J28.1.2013 which is in the Bank of India and FD interest of Rs.18,956.42ps dated : 21.1.2013 which is in the said bank and also an amount of Rs.6 Lakhs through DD bearing No. 031290 of IndusInd Bank, Basavanagudi branch, Bengaluru in all 11,13,010.14ps to the Bank. The complainant/Pw.1 further testified that, the Accused towards discharge of the amount paid by him towards the housing loan of the Accused, has issued a cheque in dispute i.e Ex.P.1 for sum of Rs.10 Lakhs to him and thereafter he has presented the cheque in question i.e., Ex.P.1 for its encashment through his banker, but the said cheque returned dishonoured with banker's memo that "Insufficient" Funds dated: 22.3.2013. The complainant further testified that, on 1.4.2013 caused legal notice to the accused calling upon him to pay the amount covered under the dishonoured cheque through RPAD and courier and the said notice was served returned on him on 2.4.2013, inspite of receipt of the notice, the Accused has failed to pay the amount covered under the cheque.
14. In support of his oral evidence, P.W.1 has relied upon the documentary evidence as per Ex.P.1 12 C.C.No.11807/2014 J to P.6 i.e., Original Cheque dated:-18.3.2013 as per Ex.P.1, the signature on the said cheque identified by P.W.1 as that of the accused as per Ex.P.1(a), the Bank Memos as per Ex.P.2, the office copy of the Legal Notice as per Ex.P.3, the Postal Receipt as per Ex.P.4 and courier receipt as per Ex.P.5, postal acknowledgement as per Ex.P.6.
15. In the present case, there is no dispute between the complainant and Accused with regard to their acquaintance as they are the brothers. It is also not in dispute by the accused that, the cheque in question presented for encashment and dishonoured for the reason of "Insufficient Funds" since as matter on record, proved by return memo i.e. P.2 issued by the concerned bank dated: 22.3.2013 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.P.1 belongs to the account of the accused and has not denied his signature which is appearing at Ex.P.1(a). It is also not in dispute that, the 13 C.C.No.11807/2014 J complainant has issued legal notice dated: 1.4.2013 to the Accused through RPAD and courier, i.e. as per Ex.P.3 to P.6 and it is also not in dispute by the Accused that the said notice was served on the Accused as per Ex.P.6 i.e. postal acknowledgement, as the Accused has also admitted the address mentioned on Ex.P.6 is that of his company's address and has received the legal notice issued by the complainant.
16. Therefore on careful perusal of the entire oral and documentary evidence of the complainant i.e. Ex.P.1 to P.6 and admitted facts by the Accused in his defence makes it clear that, the complainant has proved that, the cheque in question i.e. Ex.P.1 was issued by the Accused to him and signature found on cheque i.e Ex.P.1(a) is that of the Accused and the cheque in question was presented for its encashment within its validity period and same was dishonoured for want of sufficient funds in the account of the Accused and thereafter as per Ex.P.3 to P.6 the complainant got issued legal notice within 30 days from the date of dishonour of the cheque in question to the Accused through RPAD and courier 14 C.C.No.11807/2014 J calling upon him to pay the cheque amount within 15 days from the date of receipt of notice and the said notice was also served on the Accused, but inspite of service of notice the Accused did not pay the amount covered under the cheque in question. Hence, the complainant has discharged his initial burden by complying the mandatory provisions of Sec.138 of N.I. Act and initial presumption are available in favour of the complainant as required U/s.118 and 139 of N.I. Act. Consequently it is for the Accused to rebut the said presumptions by showing that, the cheque in question was not issued either to the complainant or towards discharge of any legally recoverable debt or liability by producing cogent and convincible evidence but not mere suggestions or by plausible explanations.
17. The learned counsel for the defence has cross examined the complaianant/PW.1 in length but nothing has been elicited to discredit or discard the evidence of the complainant. The complainant/PW.1 in his cross-examination has specifically denied the suggestions made to him that, Accused and himself were the partners in, NPS 15 C.C.No.11807/2014 J constructions and the Accused and himself have entered into a MOU before the Advocate by name Sri.Narendra Babu and by virtue of said MOU it was agreed that, he would purchase Samruddi shelters from the Accused for sum of Rs.4 Crores and there were dispute between the Accused and himself in respect of financial matters, at the time of the resolution of the said dispute himself and his advocate Sri. Narendra Babu have collected the documents viz., the Original Property documents, the cheques of the Accused inclusive of the cheque in dispute and the original MOU from him and issued receipt to the Accused by acknowledging the fact that, he had received the original documents from him and on the basis of said documents he has filed this false complaint and also other cases got filed against the Accused through the prospective buyers on the basis of original documents. Hence the perusal of entire cross-examination of the complainant, the Accused has rather concentrated on MOU alleged to have been entered into by him and the complainant before one Sri.Narendra Babu, Advocate and the complainant allegedly collected original documents pertaining to the property, 16 C.C.No.11807/2014 J cheques of the Accused including the subject cheque, but the complainant has specifically denied the said suggestion. It is important to note here that, the Accused during the course of cross-examination of the complainant has not disputed the claim of the complainant that, the Accused, his wife and son have borrowed housing loan from Bank of India and the complainant executed guarantee agreement for the said loan and stood as a guarantor and due to non payment of the arrears of the loan amount, the complainant being a guarantor to the said loan and has paid an amount of Rs.11,13,010.14 as stated by the complainant in his legal notice, complaint and evidence. It is also not denied in the cross- examination by the Accused that, the payments made by the complainant i.e. his FD amount of Rs.4,94,053.72ps dated: 28.1.2013 which is in the Bank of India and FD interest of Rs.18,956.42ps dated : 21.1.2013 which is in the said bank and also an amount of Rs.6 Lakhs through DD bearing No. 031290 of IndusInd Bank, Basavanagudi branch, Bengaluru in all Rs.11,13,010.14ps to the Bank of India.
17 C.C.No.11807/2014 J18. In addition to that, the Accused during the course of his cross-examination has specifically admitted that, " ¸ÀAªÀÄÈ¢Ý ¤ªÁ¸À PÀ£ïìlæPÀë£ïUÀ¼À£ÀÄß ¤ªÉñÀ£ÀUÀ¼À£ÀÄß vÉUz É ÀÄPÉƼÀÄîªÀ PÁ®PÉÌ £À£Àß ¨ÁåAPï SÁvÉAiÀÄ°è CµÀÄÖ ºÀt EgÀ°®è ¦gÁå¢zÁgÀgÀÄ ¨ÉÃgÉAiÀĪÀjAzÀ ºÀtªÀ£ÀÄß £À£ÉUÉ PÉÆr¹ £À£Àß ºÉ¸Àj£À°è ¸ÉÊmïUÀ¼£À ÀÄß Rjâ¸À¯ÁVgÀÄvÀÛzÉ JAzÀgÉ ¤d".
Further admitted that " £Á£ÀÄ ¸ÀAªÀÄÈ¢Ý ¤ªÁ¸ÀPÉÌ ¸ÀA§A¢¹zÀAvÀºÀ C¥ÁmïðªÉÄAmïUÀ¼À zÁR¯ÉU¼ À À ªÉÄÃ¯É ¨ÁåAPï D¥sï EArAiÀiÁ ¨ÁåAQ£À°è gÀÆ. 18 ®PÀë ºÀtªÀ£ÀÄß ¸Á®ªÁV ¥ÀqÉzÀÄPÉÆArgÀÄvÉÛÃ£É JAzÀgÉ ¤d. ¸Àzj À ¸Á®PÉÌ ¦gÁå¢zÁgÀgÀÄ UÀÁgÀåAlgï DVgÀÄvÁÛgÉ JAzÀgÉ ¤d. £Á£ÀÄ ¸ÀzÀj ¸Á®zÀ ¨Á§ÄÛ ¨ÁåAQUÉ ºÀtªÀ£ÀÄß ªÀÄgÀÄ¥ÁªÀw ªÀiÁrzÀ §UÉÎ £À£Àß §½ zÁR¯ÉU½ À gÀÄvÀª Û É.
Further admitted that "¦gÁå¢zÁgÀgÀÄ £Á£ÀÄ ¨ÁåAQ¤AzÀ ¥ÀqÉzÀÄPÉÄÁqÀAvÀºÀ ¸Á®zÀ ºÀtªÀ£ÀÄß ªÀÄgÀÄ¥ÁªÀw ªÀiÁrzÀÄÝ D PÁgÀtPÁÌV £Á£ÀÄ ¤¦.1 ZÉPÀÌ£ÀÄß gÀÆ.10 ®PÀëPÉÌ PÉÆnÖgÀÄvÉÛÃ£É JAzÀÄ F PÉøÀ£ÀÄß zÁR®Ä ªÀiÁrgÀÄvÁÛgÉ JAzÀgÉ ¤d. DzÀgÉ £Á£ÀÄ ¨ÁåAQ¤AzÀ ¥ÀqÉzÀÄPÉÆAqÀAvÀºÀ 18 C.C.No.11807/2014 J ¸Á®zÀÀ ºÀtªÀ£ÀÄß ªÀÄgÀÄ ¥ÁªÀw ªÀiÁrzÀ §UÉÎ ¨ÁAQ£À ¸ÉÖÃmïªÉÄAmïUÀ¼À£ÀÄß £Á£ÀÄ ºÁdgÀÄ¥Àr¸À®Ä vÀAiÀiÁjgÀÄvÉÛãÉ.
Hence, the above admitted facts by the Accused makes it clear that, he has categorically admitted that, he has borrowed a loan amount from the Bank of India and the complainant stood as a guarantor to the said loan. Though, he has admitted that, he has paid the said loan amount to the bank and also has got documents to show that, he has paid the loan amount to the bank, but the Accused has not produced such documents, on the contrary he admitted that, the complainant has filed this case claiming that, he has paid the loan amount to the bank and in order to repay the said amount to the complainant he has issued the Ex.P.1 cheque for sum of Rs.10 Lakhs in his favour, in such circumstances if really the Accused has paid the loan amount to the bank and having documents to prove the said fact, the Accused would have been produced the said documents, but the documents have not been forthcoming before the court, and in turn the Accused himself admitted the issuance of cheque to the complainant towards payment made 19 C.C.No.11807/2014 J by the complainant to the bank, therefore in view of the non production of the documents and admitted facts by the Accused an adverse inference can be drawn against the Accused that, he has issued the Ex.p.1 cheque in question towards the amount which has been paid by the complainant towards the housing loan borrowed by the Accused his wife and son from the Bank of India.
19. It is also relevant here to mention that, the Accused in his cross-examination has admitted that, Ex.P.1 cheque belonging to his account and signature found at Ex.P.1(a) is that of his signature and he came to know about the said cheque only after reaccept of the notice. The Accused has also admitted in his cross-examination that, the complainant has filed this case against him since he has issued Ex.P.1 cheque for Rs.10 Lakhs to him in respect of the amount which has been paid by the complainant to the Bank of India towards the housing loan borrowed by him, in such circumstances, a presumption can be drawn with regard to existence of legally recoverable debt or liability as required U/s.118 and 139 of N.I. Act. It is 20 C.C.No.11807/2014 J true that, the complainant has not produced documents to show that, he has repaid the loan amount borrowed by the Accused to the bank but the Accused though he has admitted that, he has got documents to show that, he has repaid the loan amount but has not produced the said documents , on the contrary he admits that, the complainant stood guarantor to his loan and the loan amount has been paid to the bank, therefore unless and until the documents in respect of alleged repayment made by the Accused are produced, a presumption can be drawn infavour of the complainant in respect of the cheque in question with regard to legally enforceable debt against the Accused as claimed by the complainant . In this regard, it is relevant here to refer the decisions reported in 2001 AIR Karnataka HCR 2154 between 'M/s.Devi Tyres V/s.Navab Jan' and in 2011 ACD 1521 (KAR) between 'Smt. Usha Suresh V/s. Shashidharn', in 2010 SC 1898 between 'Rangappa Vs. Mohan' and 2011 ACD 1412 (KAR) between 'N.Hasainar Vs. M.Hasainar, S/o. Ibrahim'. The Hon'ble High Court of Karnataka in the above decision i.e., 2001 AIR Karnataka HCR 2154 at para No.6 was pleased to hold that 21 C.C.No.11807/2014 J 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 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 22 C.C.No.11807/2014 J 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 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 23 C.C.No.11807/2014 J 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 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 24 C.C.No.11807/2014 J 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 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-
25 C.C.No.11807/2014 Jexamination, 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".
20. 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 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 26 C.C.No.11807/2014 J 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 mandatory requirements and has proved that, the Accused has issued the cheque in question in his favour and the Accused has admitted the cheque belongs to him and signature appearing on the cheque is that of his signature and even service of the said notice, the Accused has not given any reply or complied the terms of the notice, in such circumstances, presumptions have to be drawn towards existence of legally enforceable debt as per Sec.139 of N.I.Act.
21. Therefore, for the above said reasons the arguments canvassed by the learned counsel for the defence in his written argument that, the complainant has misused the original documents along with the cheques of the Accused including the subject cheque and has filed this false complaint cannot be acceptable one.
27 C.C.No.11807/2014 J22. The Accused inorder to rebut the presumptions available in favour of the complainant himself examined as DW.1, in his evidence stated that, he had executed a marketing agreement to sell the flats made by him to the complainant and further later due to mismanagement and misappropriation made by the complainant with him, he had entered into Memorandum of Understating dated: 9.11.2011 with regard to settlement of several issues that arose in the course of business run by them in the name and style of 1) M/s. Samruddhi Shelters Pvt. Ltd., 2) M/s. Trust-N- Gain Investors Services Pvt.Ltd., 3) M/s. Trust-N Gain Registered partnership Firm; 4) M/s. NPS constructions before the advocate Sri.B.K.Narednra Babu who had drafted the MOU and got signed the same by himself and the complainant and the said advocate also acknowledged the custody of original MOU with him along with all original documents mentioned therein such as signed and unsigned cheques and other agreements, accounts books, vouchers, bills, computerized accounts statements etc., for settlement of financial transactions between him and the complainant, hence the complainant 28 C.C.No.11807/2014 J has also given an acknowledgement with regard to custody of original documents stated above. The Accused /DW.1 further stated that, he is not liable to pay any money to the complainant as alleged by him in the complaint and as per the MOU date:
9.11.0211 the complainant had agreed to pay 400 Lakhs i.e. Rs. 4 crores to him to go out of the project of building apartments in M/s. Samruddhi Shelters Pvt. Ltd., along with clearing the bank loan of Bank of India vide its loan account No. 842975210000084 but the complainant misusing his original documents includidng the cheque in dispute has filed the present case and also other cases through prospective purchasers by misusing, abusing the process of law, hence the complainant has created false, baseless frivolous, concocted story with an intention of demanding false ransom amount and to cheat him has filed this case. In support of his oral evidence the Accused has produced certified copy of the Acknowledgement as per Ex.D.1, Deed of Settlement Agreement dated: 17.9.2012 as per Ex.D.2, Depositions of examination -in-chief of plaintiff in O.S.No.3258/2013 as per Ex.D.3, certified copy of the examination-in-chief and cross-29 C.C.No.11807/2014 J
examination of the Accused herein in O.S.No. 1714/2013 as per Ex.D.4 and D.5 respectively, certified copy of examination in chief of plaintiff in O.S.No.6721/2012 as per Ex.D.6, certified copy of the examination-in-chief and cross-examination of complainant in C.C.No.12645/2014 are as per Ex.D.7 and D.8 respectively, certified copy of the complaint in C.C.No.10189/2014 as per Ex.D.9, certified copy of the examination-in-chief of complainant in C.C.No.10189/2014 as per Ex.D.10, certified copy of the complaint in C.C.No.9266/2014 and certified copy of the sworn statement of the complainant are as per Ex.D.11 and D.12 respectively and certified copy of the cheque in the said complaint, Bank memo are as per Ex.D.13, 13(a) and 13(b), certified copy of the order sheet in C.c. No 1610/2014 as per ExD.14.
23. On careful perusal of the entire documents produced by the Accused, the Accused has not produced the original Memorandum of Understanding dated: 9.11.2011 and also alleged acknowledgement of receipt issued by the complainant or the advocate by name Sri.Narendra 30 C.C.No.11807/2014 J Babu for having receipt of all original documents including the subject cheque in question as alleged by him in his evidence. It is true that, the Accused has produced certified copy of the 1) acknowledgement which is at Ex.D.1 but on perusal of the same, it cannot be held that, the complainant has issued the receipt for having received the alleged original documents including the subject cheque in question. It is also true that, the notarised copy of the MOU dated: 9.11.2011 got marked as Ex.N.1 but the said document cannot be looked into unless and until the Accused has proved the fact that, the original of the said Ex.N.1 is not with or in the custody of either complainant or the advocate i.e. Sri.Narendra Babu as alleged by the Accused. It is also relevant here to mention that, the Ex.N.1 was got marked by the court subject to proof as per law, in such circumstances, the Accused has not established a fact that, the original copy of the Ex.N.1 is with the complainant or with the advocate by name Sri.Narendra Babu who has drafted the same. If really the original MOU is with the advocate by name Sri.Narendra Babu as alleged by the Accused , the Accused would have examined the said 31 C.C.No.11807/2014 J advocate on his behalf but has not made any efforts to examine the said advocate. Therefore the Accused has failed to prove that, the subject cheque in question was kept in the custody of the advocate of the complainant i.e. Sri.Narendra Babu and the said cheque in dispute has been misused by the complainant. It is also relevant here to mention that, this court has summoned the said advocate Sri. Narendra Babu who in turn appeared before the court and submitted that, he is not in possession of any such MOU, in such circumstances also the Accused has miserably failed to prove that, the original MOU is in the custody or possession of the complainant's advocate i.e Sri.Narendra Babu. Therefore for the said reasons the defence taken by the Accused that, in view of the execution of the MOU, the complainant and his advocate have received the original documents relating to the property and cheques including the subject cheque etc., as stated by the Accused cannot be acceptable one.
24. In addition to the above, for sake of discussion if it is assumed that, the Accused and 32 C.C.No.11807/2014 J complainant have entered into Memorandum of Understanding in dated: 9.11.2019 in respect of their several financial issues arising out of business run by them and as per the settlement the complainant and his counsel were in the custodian of all original documents mentioned in MOU dated:
9.11.2011 and the complainant had agreed to pay Rs.4 Crores to the Accused and also agreed to clearing the bank loan including the loan transaction in question, but later the complainant did not complied the terms of the MOU dated: 9.11.2011 and misused his alleged original documents and cheques including the cheque in question by the complainant by filing the several suits and complaint including the present complaint,. in such circumstances, the Accused would have taken or initiated action against the complainant by alleging that, he is misusing his original documents and also cheques including the cheque in question by filing false cases against him by filing the complaint before the police or competent course of law or atleast by issuing legal notice to the complainant or his advocate by name K.Narendra Babu as alleged by him, but no such efforts have been made by the 33 C.C.No.11807/2014 J Accused till today. Even the Accused has not made any efforts to issue stop payment instructions to his banker alleging that, as per the MOU date:
9.11.2011 the complainant and his counsel have colluded to each other and misusing his cheques including the subject cheque but no such efforts has been made by the Accused, in such circumstances, by the conduct of the Accused in non taking of the action against the complaint or his advocate as alleged by him in respect of misuse of the original documents and cheques including subject cheque, an adverse inference can be drawn against him that, the Accused has issued subject cheque toward discharge of the debt or liability in question as claimed by the complainant. But the Accused has not made any such efforts either to lodge complaint against the complainant or his counsel or by initiating legal proceedings against the complainant or his counsel for alleged non return of original documents and cheques including the subject cheque and the subject cheque has been misused by the complainant, therefore the conduct of the Accused in not taking the action against the complainant for alleged misuse of his blank signed 34 C.C.No.11807/2014 J cheque, an adverse inference can be drawn against him that, the Accused has not initiated any action against the complainant since the cheque in question has been issued by the Accused to the complainant towards discharge of the liability in question not for any other purpose i.e. as alleged by the Accused in his defence. In this regard it is relevant here to refer the decision of Hon'ble Apex Court of India reported in AIR 2018 SC 3601 in a case of T.P.Murugan(dead) Thr. Lrs.V. Bhojan Vs. Posa Nandi, rep. Thr. Lrs. PA holder, T.P. Murugan V. Bhojan, wherein the Hon'ble apex Court held that "Negotiable Instruments Act (26 of 1881) Ss.118, 138, 139 - Dishonour of cheque - Presumption as to enforceable debt-
cheques allegedly issued by accused towards repayment of debt- Defence of accused that 10 cheques issued towards repayment of loan back in 1995 - behavior of accused in allegedly issuing 10 blank cheques back in 1995 and never asking their return for 7 years, unnatural
- Accused admitting his signature on cheques and pronote, presumption under S.139 would operate against him - Complainant proving 35 C.C.No.11807/2014 J existence of legally enforceable debt and issuance of cheques towards discharge of such debt - Conviction, Proper". It is true that, the above principles of law pertains to the case of different set of facts but the proposition of law held in the above decision of the Hon'ble Apex Court is aptly applicable to the case on hand since in the present case also the accused has not made any efforts to get return of cheque alleged to have been given to the complainant in respect of settlement arrived between him and the complainant as per MOU dated: 9.11.2011, under such circumstances, the said unnatural conduct of the accused in non taking of action, an adverse inference can be drawn against the accused that, the cheque in question issued by the accused towards discharge of the liability and presumption U/s.139 of N.I.Act would operate against him, as he has admitted the signature and cheque in question is belongs to him.
25. The Accused has also taken defence that, the complainant as per MOU dated: 9.11.2011 and settlement agreement dated;- 17.9.2012 i.e Ex.N.1 and D.1, along with all original documents 36 C.C.No.11807/2014 J mentioned therein such as signed and unsigned cheques, agreements, accounts books vouchers, bills computerized account statement etc., have been given to the complainant but the complainant for the reasons best known to him by misusing the original documents along with the subject cheque i.e. Ex.p.1 has filed this case and other cases and he has not issued any cheque i.e. Ex.P.1 to the complainant According to the Accused he has not issued the cheque in question to the complainant but the complainant has misused his blank signed cheque which was collected by him along with other original documents as per MOU dated: 9.11.2011 and Ex.D.1 acknowledgement and misused the subject cheque. But the Accused has not proved the said fact either by eliciting anything from the complainant during his cross-examination or by producing cogent and convincible evidence on his behalf, in such circumstances it cannot be held that, the complainant has misused the alleged signed cheque of the Accused. Even for sake of discussion if it is assumed that, the contents of the subject cheque is not filled in by the Accused even then also unless and until the Accused has proved 37 C.C.No.11807/2014 J 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 proved his defence or produced any documents or 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, 38 C.C.No.11807/2014 J 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 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 39 C.C.No.11807/2014 J 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 contents of the cheque 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 was filled in by the complainant in presence of the Accused at his consent and the said cheque has been issued towards discharge of legally recoverable debt.
26. It is also important to note here that, the Accused has not denied or disputed that the cheque in question as well as the signature therein do belong to him and though he has taken the specific defence that, the complainant had collected his blank signed cheque along with other cheques and original documents as per MOU dated: 9.11.2011 and Ex.D.1 in respect of settlement of their financial matter but the complainant has misused the subject 40 C.C.No.11807/2014 J cheque in question by filing this case, but the Accused has not proved the said defence by producing cogent and convincible evidence, in such circumstances it can be held that, the Accused has failed to explain and proved how the cheque in question has come to the possession of the complainant, this would also give rise to an adverse inference against him. This proposition of law finds support from the decisions of Hon'ble High Court of Karnataka reported in 2010(1) KCCR 176 in the case of "Siddappa Vs. Manjappa" and in the decision of Hon'ble Apex court of India decided in Crl.A.No.664 of 2012 dated: 19.9.2019 in the case of "M.Abbas Haji Vs. T.M.Chennakeshava"
held that, " the Accused has to explain how the cheque entered into the hands of complainant".
Therefore for the above said reasons the defense taken by the accused cannot be acceptable one and accused has miserably failed to rebut the presumption available in favour of the complainant by producing cogent and convincible evidence.
27. Therefore for the above said reasons arguments canvassed by the learned counsel for the 41 C.C.No.11807/2014 J Accused in the written argument cannot be acceptable and are not sustainable in view of the discussions made and findings given by the court while appreciating the oral and documentary evidence of the complainant and Accused and the Accused has miserably failed to rebut the presumption available to the complainant as U/s.118a and 139 of N.I. Act.
28. Therefore considering all these aspects of the case and totality of the circumstances and on careful and meticulous appreciation of evidence adduced on behalf of the complainant and accused the complainant has successfully established beyond all reasonable doubt that, he has paid the housing loan amount of Rs.11,13,010.14 Ps to the Bank of Baroda which was borrowed by the Accused along with his wife and son as he was stood as a guarantor to the said loan and in view of non payment of the installment by the Accused the complainant has cleared the said loan out of his amount deposited in the bank of Baroda and other funds and the accused in turn has issued cheque in question i.e. Ex.P.1 to the complainant towards 42 C.C.No.11807/2014 J repayment of the loan amount paid by the complainant which was borrowed by him from Bank of Baroda towards housing loan, thereafter the complainant has presented the said cheque through his banker and same was returned dishonoured with an endorsement of "Insufficient Funds" and thereafter he got issued legal notice to the accused and the said notice was served on the Accused and inspite of it, the Accused did not repaid cheque amount, hence the complainant filed the present complaint against the accused. On the other hand, the accused has failed to rebut the presumption available infavour of the complainant with regard to the existence of legally recoverable debt under Ex.P.1 Cheque. Therefore accused has committed an offence punishable U/s.138 of N.I. Act, accordingly for the above said reasons this point is answered in the Affirmative.
29. 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 43 C.C.No.11807/2014 J in their accounts. Such being the case the intention of the legislature is that, complainant be suitable compensated while accused be punished for his act. Hence while awarding the compensation the said fact is to be kept in mind and suitable compensation is awarded to the complainant certainly it will not cause injustice to the accused, accordingly the complainant is entitled for the compensation as ordered by the court and for the said reasons, it is just and proper to pass the following :-
ORDER Acting U/sec.255(2) of Cr.P.C.
the accused is convicted for the offence punishable U/sec.138 of N.I.Act.
The accused is sentenced to pay a fine of Rs.10,15,000/= (Rupees Ten Lakhs and Fifteen 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.10,10,000/= (Rupees Ten Lakhs and Ten Thousand only) shall be paid as compensation to the complainant.
44 C.C.No.11807/2014 JFurther 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 and surety 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 10th day of January 2020).
(SRI.S.B. HANDRAL), XVI ACMM, Bengaluru City.
ANNEXURE
1. List of witness/s examined on behalf of the Complainant:-
P.W.1 : Sri. T.A.Krishna Murthy;
2. List of documents exhibited on behalf of the Complainant:-
Ex.P-1 : Original Cheque;
Ex.P-1(a) : Signature of the Accused;
Ex.P-2 : Bank Memo;
Ex.P-3 : Office copy of the Legal Notice;
Ex.P-4 : Postal Receipt;
45 C.C.No.11807/2014 J
Ex.P-5 : Courier Receipt;
Ex.P-6 : Postal Acknowledgement;
Ex.N-1 : MOU
3. List of witness/s examined on behalf of the Accused:-
DW.1 : Sri. V.Prasanna Kumar Setty;
4. List of documents exhibited on behalf of the Accused:-
Ex.D.1 : Certified copy of the acknowledgement ;
Ex.D.2 : Deed of Settlement Agreement date:
17.9.2012 Ex.D.3 : Depositions of examination-in-chief of plaintiff in O.S.No.3258/2013 ;
Ex.D.4 & D.5 : Certified copy of the examination-in-chief and cross-examination of the Accused In O.S.No.1714/2013;
Ex.D.6 : Certified copy of examination-in-chief of plaintiff in O.S.No. 6721/2012;
Ex.D.7 & D.8 : Certified copy of the examination-in-chief and cross-examination in C.C.No.12645/ 2014;
Ex.D.9 : Certified copy of the complaint in C.C.No.10189/2014 ;
Ex.D.10 : Certified copy of the examination-in-chief of complainant in C.C.No.10189/2014;
46 C.C.No.11807/2014 J Ex.D.11 & : Certified copy of the complaint in D.12 C.C.No.9266/2014; Ex. 13 & : Certified copies of the cheque and Bank Ex.D.13(a) & Memo; (b) Ex.D.14 : Certified copy of the order sheet in C.C.No.1610/2014 (SRI.S.B.HANDRAL), XVI ACMM, Bengaluru City. 47 C.C.No.11807/2014 J
10.1.2020 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.10,15,000/= (Rupees Ten Lakhs and Fifteen 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.10,10,000/= (Rupees Ten Lakhs and Ten 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 and surety bond of the Accused stands cancelled.
48 C.C.No.11807/2014 JOffice is directed to furnish free certified copy of this judgment to the Accused incompliance of Sec.363(1) of Cr.P.C.
XVI ACMM, B'luru.